financial vanguard

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 13/12/2013

108.35 -0.32

96.43 -1.07

114.0 3.3

2,802.00 +37.00

16.28 -0.02

DOLLAR 154.73 155.23 155.73POUNDS 251.8231 252.6368 253.4506EURO 212.3979 213.0842 213.7706FRANC 173.6198 174.1809 174.7419YEN 1.4932 1.4981 1.5029CFA 0.306 0.316 0.326WAUA 237.9988 238.7679 239.537RENMINBI 25.4837 25.5665 25.6493RIYA 41.2525 41.3858 41.5191KRONA 28.4613 28.5533 28.6453SDR 238.7639 239.5354 240.307

CMYK

DECEMBER 16, , , , , 20132013201320132013

*From left: President, Institute of Strategic Management, Nigeria (ISMN), Dr. Otive Igbuzor; awardee, Mr. DeleAgekameh; and Chairman, Board of Fellows, ISMN, Prof. Oluwayemisi Obashoro-John, during the investiture ofAgekameh as a fellow in Lagos... recently.

Continues on page 18

Importation of tomatoes fromBenin Republic and otherneighbouring countries by

Nigerians particularly across the Semeborder is on the increase following theBoko Haram insurgence in the North-East of the country famous for tomato

Boko Haram: Nigeria importstomatoes from Benin

By GODWIN ORITSEfarming. As a result, the Nigeria Cus-toms Service (NCS) has collectedover N5million baggage fees fromsuch imports in just two months.

A trip to Benin Republic by Finan-cial Vanguard reporter, where toma-to farms are rapidly springing upshowed that the import of the vege-table has become a big business forboth the producers in Benin Repub-

lic and buyers of the produce in Nige-ria.

During the visits to these farms inBenin Republic, it was discovered thattomatoes produced in Benin arefleshier and do not decay easily butstay longer than those produced inNigeria. Confirming this to Vanguard,Madam Comfort Akeke, Iya-Oja Gen-eral of the Badagry Central market

said that the fleshy species of toma-toes has less fertilizer as against thewatery one that is planted with morefertilizer. A tomato seller, Mrs SarahShanu who corroborated MadamAkeke’s claim said that the issue oftomato production is seasonal addingthat sometimes traders from Cotonoudo come to Nigeria to buy tomatoes.

She, however, added that the patron-age is more from the Nigerian side. Atomato dealer, Mr Fatai Adeyemi akaTanto olorun told Financial Vanguard

CMYK

18 — Vanguard, MONDAY, DECEMBER 16, 2013

Continues from page 17

Continues on page 19

,

,

Cover Story

Significant lessons could alsobe learnt from Margaret

Thatcher’s economic policies thatpropelled Britain to an economicboom in the ‘80s throughextensive promotion ofentrepreneurial initiative andshare-ownership.

Thatcherism’s thrust onsubstituting debt with equityspawned colossal economicdevelopment in the UK, whichwas soon adapted and replicatedacross Southeast Asia.

In the 20th century the USAtraded their entrepreneurialrevolution which they enjoyed inthe previous 200years and begana 50 years stint of dependenceon the modern day corporation.The myth of job security prevailedin the past 50 years. This is nowgone. Renowned historians likeWill Durant wrote about this in1944 leaders like MahatmaGandhi, Franklin Roosevelt andStephen Covey had written andspoken about it.

For sure, Africa representsuniquely different realities andchallenges, and there is noeffective model than can beentirely transplanted here. Policymakers must prioritiseinstitutional efforts to compensatefor reigning socio-economicrealities. Nigerian initiatives topursue financial restructuring,for instance, have been largelyhamstrung due to civil andpolitical unrest. Likewise,Abuja’s insistence on micro-enterprises, instead of small-scale ventures, has done little tohelp its burgeoning urbanunemployed work force.

A viable economic agenda forNigeria that allows rapidentrepreneurial progress has tofocus on fundamentaladjustments:

*Creating a pro-active socio-economic environment thatencourages creative and viableentrepreneurship from thegrassroots level up. Indentifyingand correcting infrastructuredeficits and systemic imbalanceinimical to small business.

*Developing a credit regime –through relevant financial andindustrial policy changes – thatis sympathetic to small businessrealities. Promotion of lendingthrough equity, and not debt, isof critical importance.

*Removing administrative andtrade barriers whilesimultaneously enhancingtechnical support and capacitybuilding assistance for bothexisting and emerging

The Entrepreneurial Revolution:A New Order for Nigeria PT 2

entrepreneurs.*Mobilising the country’s

significant human resourcespool by revamping theeducation sector to providevocational, administrative andskill development training torural and urban youths.

*Creating efficient andeffective mechanisms forregulation and oversight ofenterprise-developmentinitiatives in general, andmicrofinance institutions inparticular.

*Maintaining politicalstability and authority ofdemocratic institutions;fighting corruption andbuilding social consensus onimportant issues to ensurebroad-based success ofmacroeconomic policies.

Another importantconsideration to this discourseis the difference betweenpolicy and implementation,which can at least partly beviewed as the differencebetween developed anddeveloping nations worldwide.The best policies come tonaught unless adequatelyexecuted, and the Africancontinent provides a long listof such examples. Obasanjo’sedict on entrepreneurialstudies could very well end upbeing the next one unlesssuccessive governments followit through in both letter andspirit. To accomplish durableprosperity, Nigeria needs toexploit its tremendouseconomic potential withinnovative governance,together with an ironclad shiftagainst endemic corruption.Interventionist policies andinstitutional mismanagementare potentially far moredamaging in the long-termthan, for example, the currenteconomic crisis. A twofoldagenda of reform andregulation, with effectiveimplementation, is crucial toachieving the entrepreneurialrevolution that will help theNigerian economy overcome itstrouble legacy.

The world looks with envy atthe unprecedented growth ofChina and India.

These two Asian giants werestill in the landscape of pre-industrial agricultural economywhen Nigeria was alreadysetting up factories. Today theyare enjoying the blessing of aborderless interconnectedworld economic order.

that Nigerians rush to Cotonouto buy tomatoes because of theprice difference. For instance,a basket of tomato in Benin costabout N2,850 as againstN5,000.00 – N8,000.00 at theMile 12 market in Lagos.

The reason for the pricedifference is the fact that it isbecoming difficult to access to-matoes from the North and therisk and cost of moving theproduct from the North to La-gos has become very high sincethe Boko Haram insurgencystarted about three years ago.Besides the issue of price, an-other issue that has attractedNigerians to Songhai Farm,Financial Vanguard learnt, isthe quality of tomatoesproduced there. Speaking toVanguard on the quality of to-matoes produced in Songhai,Malam Shehu Abubakar fromKano said that tomatoesproduced in Nigeria can beused as raw material by tomatopaste companies because it iswatery.

He also explained thatincrease in the patronage oftomatoes from Cotonou can beattributed to the menace ofBoko Haram whose activities inBornu and Yobe states havedisrupted farming activities inthose areas. He disclosed thatthe governments of these stateshave also enacted laws that barfarmers from planting tallcrops like maize so that theinsurgents do not takeadvantage of these crops tocreate havoc.

*Hon. Minister of Culture & Tourism, High Chief Edem Duke (left), presenting a publicationof his Ministry to the National President of Nigerian Association of Chambers of Commerce,Industry, Mines and Agriculture (NACCIMA), Alhaji Badaru Abubakar during the visit ofNACCIMA president to the Minister in his office in Abuja.

Boko Haram: Nigeria importstomatoes from Benin

Abubakar stated that mostof the affected states now

look elsewhere for the supplyof tomatoes adding that eventhe Kadawa irrigation projectin Shiromawa in Kano wheretomatoes are produced in largequantity, has fallen short ofproduction because everybodyis turning to it. Another tomatofarmer in Badagry, AlhajiMikky Okunola told FinancialVanguard that it is a shame

that Nigerians now import to-matoes from neighbouringcountries.

“The development goes toshow how unserious thecountry is about agriculture. Ithink the government shouldmake deliberate effort to en-courage people to go into farm-ing.

“We have the land, we havethe human resources, thegovernment can useagriculture to resolve the issueof youth unemployment andeven make money in theprocess.

“For a small country likeBenin Republic to be exportingtomatoes to Nigeria, it is

something the governmentshould look into and see howit has failed in that area,”Okunola said.

According to an officer ofthe Nigeria Customs Servicein charge of Baggage at theSeme border post, Mr. BenModun, because the seasonof tomato is gradually com-ing to an end, the number oftrucks passing through theborder has reduced.

Modun told Financial Van-

guard that before now, aboutsix trucks of tomatoes passthrough the border everyday adding that only fewbaskets are brought bytraders.

His words: “During theseason, an average of sixtrucks and some few basketspass through the border ondaily basis but for now, youcan see trickles of basketscoming from Cotonou.” Hesaid that a total of N5.643million was realised asbaggage fee within twomonths of the movement oftomatoes across the border.Besides the production of to-

His words “ during the season, anaverage of six trucks and some fewbaskets pass through the border ondaily basis but for now, you can see

trickles of baskets coming fromCotonou

CMYK

Vanguard, MONDAY, DECEMBER 16, 2013 — 19

Business & EconomyContinues from page 18

The ruling class inNigeria has neverfailed to amuse me.

Sometimes, they soundgenuine. At other times, theyjust find it difficult to hidetheir true identity. They areself-centered and self-seeking. Whatever does notbenefit them in the main isanti-Nigeria. They portraythemselves while in office aslovers of Nigeria more thananyone else.

Making sacrifice is not intheir dictionary. They mustget the best while in office andout of office at the expense ofthe ordinary Nigerian. Theytreat the resource of thecountry as their farm fromwhich they must get maximumbenefit. It is this fundamentalflaw in the thinking of theaverage Nigerian leader thathas impoverished the countryand the ordinary Nigerian.Every government functionaryis an emperor in his domainthat everyone working withhim must pander to.

When Nelson Mandeladied, the entire human raceextolled his virtues offorgiveness and ability to bringopponents together to discussand negotiate. Mandela hasthought the world that angerand bitterness cannot fosterunity. But as the worldcelebrates Mandela, Nigerianleaders joined thebandwagon. Funny enough, agroup of governors took a fullpage advertorial to identifywith the Mandela idea. Whatan irony in a country whereleaders bask in the euphoriaof selfish interest!

The non-passage of the 2014

The Nigerian class warbudget is not about theNigerian people; it is aboutthese clannish politicians,who are looking for avenuesto exploit whatever isavailable. The members of theNational Assembly are lookingfor their cut from the annualbudget preparatory to 2015.The presidency is seekingmore savings in the excesscrude account so it can haveunhindered access to freemoney. Whichever way, it isnot for the benefit of thecommon man. The capitalbudget that would ordinarilybring dividends of democracyto Nigerians has never beenfully implemented but thesepoliticians use the people assmokescreen to push theirposition of greed.

Whenever they are cut offfrom the source of the looting,they shout as if the roof is aboutto come down. Call it PDP orAPC, they are all the same -self-centered politicians -pretending as if the welfare ofthe people is what they areafter. Is it surprising thatseven governors elected underthe platform of PDP can easilydefect to APC without blinkingan eyelid? Everyday, stories ofbillions rent the air andnothing is done about it. It didnot start today; corruption hasbeen around, past and presentgovernments have not takenthe needed steps to deal withthe monster so it keepsgrowing by the day as newleaders emerge from thementoring of their successors.

It is not a surprise tostudents of Nigeria’s recenthistory that Obasanjo cameout with a damning letter to

the president. Obasanjo in hisletter admitted that Jonathansees him as his mentor. If hedid his job of groomingsuccessors well, he would nothave foisted Yar ’ Adua/Jonathan on Nigerians. If hehad dealt with corruption theway it should, the Jonathanadministration would not havehad any hiding place.Jonathan’s failings are that ofObasanjo. So he should notplay the ostrich in this case.Obasanjo’s cavalier dismissalof President GoodluckJonathan is not his first timeof assailing an occupant of thePresidential Villa.

It was at the peak of thestruggle for the actualisationof the June 12, 1993 electionsthat General OlusegunObasanjo told the world thatthe acclaimed winner of thatelection, Chief MoshoodAbiola, was not the messiahthat Nigeria needed.

The comment by the formermilitary head of state was inthe perspective of many, areflection of his perspective of

,

,himself as the country ’sultimate saviour.

That perception was a nearfact about five years later in1999 when Obasanjo wasagain heralded to nationalleadership almost as amessiah, no thanks to theprecipitous adventures of theSani Abacha dictatorship.

At the mid-point of hissecond term in office,President Obasanjo’smessianic attitude was againbrought to the fore whenassociates of the presidentmade desperate efforts toextend his tenure with a thirdterm in office that wasseriously opposed by even hisvice-president at that time,Atiku Abubakar. His vicesnonetheless, even his mostvicious foes agree thatObasanjo is an unrepentantnationalist dedicated to thebest interest of the country.

That nationalistic streak isperhaps one factor that hasmotivated Obasanjo in his self-assumed crusade against hissuccessors since his first exit

as Military Head of State in1979. President ShehuShagari who Obasanjohanded over the mantles ofoffice to on October 1, 1979was to receive the tongue lashof the former Head of State.

When General MuhammaduBuhari took over the affairs ofthe leadership of the countrywith a seemingly messianiccampaign to rid the country ofcorruption and other vices thatthreatened its economicprogress, he lashed out at him.He wrote General Babangidathe same form of letter heentitled: SAP with a humanface. That letter also caused astir in the Babangida militaryregime.

This president is sleeping onduty; he has sleep-walked thetowns and villages of Nigeriafor too long. It is time for himto wake up from sleep and dowhat presidents like him do.

He should honour hisagreement of one term inoffice and use the remainingone and half years of his termto deal decisively with issuesraised on corruption, economy,sectionalisation of the countryand most importantly, fix theeconomy by ensuring hedelivers on power. It is not howlong one stays in office thatmatters but what legacy oneis leaving behind. Mr.Jonathan should name andshame oil thieves, name andshame past and presentcorrupt public office holdersand be courageous enough todeal with any member ofcabinet involved in the NNPCshameful looting of thefederation account.

Mr. Jonathan should name andshame oil thieves ...past andpresent corrupt public officeholders and be courageousenough to deal with anymember of cabinet involved inthe NNPC shameful looting ofthe federation account

Nigeria imports tomatoes from Beninmatoes, birds of different typesare also cultivated in the farmas a rice meal served with quailbird was served to VanguardCorrespondent. Financial Van-guard also gathered that about250 crates of eggs are producedeveryday at the farm.

Investigation by FinancialVanguard showed that becauseof the boom in the business, theSonghai Farm in Port Novo,Benin Republic, has researchedinto the production of tomatoesand came up with various meth-ods of tomato farming that givegood yields.

Speaking to Vanguard in PortNovo, Head of Commercial andMarketing, Ms Belvue Akpachosaid Songhai Farm does not ex-port tomatoes directly toNigeria, but that they have Ni-gerian customers who buy to-matoes in large quantitiesfrom the farms.

Some of these Nigerians buyas much as eleven tonnes oftomatoes from the farm.

Akpacho explained thatsometimes Nigerian tradersplace order for the vegetableahead of production and takedelivery during harvest.She further explained thatthe demand for the vegetablefrom Nigeria has encouragedthem to conduct researches ontomato production and the re-sults of some of these studieshave been amazing.

According to Akpacho, fivevarieties of tomatoes that suchresearch has been conductedon showed that some of thesevarieties such as Nirvana arebest grown in Nigeria becauseof the kind of soil in the coun-try. Other varieties of toma-toes are Makis, Padma, Plat-inumRani Jelani and Samru-dhi. She said that besides the

purchase of tomatoes by Ni-gerians, tomato seedlings arealso sold to Nigerian farmerswho want to grow their owntomatoes.

Financial Vanguard alsodiscovered that a lot of Nige-rians are currently under-studying different aspects offarming including the pro-duction of tomatoes. She stat-ed that the farm has stopped

researching into the Nirvanatype because it is better grownin Nigeria. The Songhai Farmhas also opened up otherbranches of its farms in Ni-geria. Akpacho disclosed toFinancial Vanguard thatthere is now SonghaiBadagry, Narasawa and onein Delta State.

“We have the technology toproduce good quality toma-toes and one of the best tech-nologies we have used ingrowing tomatoes is the plas-tic mesh technology. We growtomatoes three or four timesa year because of the high de-mand for the product and thishas kept our workers busy allyear round. Besides the plas-tic mesh technology used forthe production of tomatoes,the Remial Cheap Wood(RCW) and drip technologies

are also used to grow the veg-etable.

Although the RCW couldnot be explained by the guide,Kofi Kuessi, who took Finan-cial Vanguard round thefarm, however said that thedrip technology is a systemwhereby the tomato ridge isirrigated by undergroundpipe water. This is done veryslowly and stops automatical-ly when the entire farm is ful-ly irrigated and the water isshut down.

For plastic mesh technolo-gy, the ridge is covered withplastic with a view to creat-ing heat not above 700C be-cause according to him, theseedling needs a lot of heatto grow well.

Besides the Songahi Farmwhich is built on a 32-acre land, other places in Parakouand Savalou also have largetomato farms which produceare destined for the Nigerianmarket.

,

,She said thatbesides the

purchase of tomatoesby Nigerians, tomato

seedlings are also soldto Nigerian farmers

who want to grow theirown tomatoes

CMYK


Business & Economy

BRIEFS

Facts have emergedon why the international watchdog

and standard bearer on Fi-nancial Intelligence Units'compliance with anti-mon-ey laundering and terror-ism, the Egmont Group ofFIUs withdrew Nigeria'sFIU access to the EgmontSecured Web. It said it isdue to its lack of commit-ment to fight money laun-dering and terrorism.

According to the group,“Nigeria shall remainexcommunicated until itscommitments to theinternational community onthe fight against moneylaundering and terrorismfinancing are met,including the specificissues related to theautonomy of the NigerianFinancial IntelligenceUnit.”

It blamed the country fordeceiving the internation-al community by claimingthat the Nigerian FinancialIntelligence Unit was in-dependent only to betrayitself a month after beingdelisted from the FinancialAction Task Force list ofhigh risk countries.Commenting on the devel-opment, a top official of theNFIU who spoke on con-dition of anonymity ex-plains: “The Egmont Se-cured Web (ESW) is a por-tal built for exchange ofinformation and to enhanceinternational cooperationon money laundering andterrorism financingbetween the 139 registeredmember-countries thatmeet their standard. Bare-ly one month after the Fi-nancial Action Task Forcedelisted Nigeria from itslist of high risk countriesfollowing the commitmentof the Federal Governmentto strengthening the legalframework against moneylaundering and terrorism,as well as assurances of atruly independent FIU, thegroup was shocked to readreports of a clamp down onthe NFIU. While the inter-national community wastrying to investigate the re-port, they read reports fromthe EFCC denying thatthere was no such siege,but claiming that the NFIUis a Unit under it and thatit was merely restructuringand redeployed the ActingDirector to another Unit.This is a clear lack of un-

Why Nigeria was sanctioned on stanceWhy Nigeria was sanctioned on stanceWhy Nigeria was sanctioned on stanceWhy Nigeria was sanctioned on stanceWhy Nigeria was sanctioned on stanceagainst financial crimes against financial crimes against financial crimes against financial crimes against financial crimes —Egmont—Egmont—Egmont—Egmont—Egmont

STORIES BYEMMANUEL ELEBEKE

derstanding of EGMONTand FATF principles on in-dependence of FIUs global-ly. They also do not under-stand the international stan-dard on the operations ofFIUs. I am afraid; moresanctions may be underway.Those of us that understandthe implications of this de-velopment are really dis-turbed, but we cannot helpthe situation.”

The release from the EFCCmade available to our Cor-respondent reads thus:

“The EFCC does not needmobile policemen to occupyits own premises nor doesit require a riot squad toredeploy its own staff,” Mr.Uwujaren, EFCC spokes-man said. “The redeploy-ment is therefore, part of there-tooling and re -align-ment process by the man-agement of the Commis-s i o n … ”Adding his voice, a finan-cial expert, Kingsley Ba-balola described the situa-tion as sad, even as he

questioned the rational be-hind the recent interferencewith the operations of theNFIU.

According to him, “ with-drawal of NFIU’s access tothe Egmont Secured Websimply means blindfoldingNigeria from all develop-ments and situations in theinternational scene, as longas terrorism financing, mon-ey laundering and otherhigh profile internationalcrimes are concerned.

FG tFG tFG tFG tFG to como como como como complete N5plete N5plete N5plete N5plete N54b Gur4b Gur4b Gur4b Gur4b Gurararararara Dam ba Dam ba Dam ba Dam ba Dam by 20y 20y 20y 20y 201111144444

The FederalG o v e r n m e n tsays it is determined

to complete the N54.3 billionGurara Dam project in Kadu-na State by December, 2014.

The Director of the GuraraWater ManagementAuthority, Federal Ministry ofWater Resources, Engr. I.Babbaji told the NGGT teamthat the project could not bedelivered on schedule due toa review that was carried outon it following additionalcomponents that were addedto it over the years, amongwhich are a hydro-powerplant and pilot irrigationproject.

This, he said, necessitatedan upward review of the ini-tial contract sum ofN15.1billion to the presentN54.3 billion following theapproval of the additional

sum of N38.5billion by theFederal Executive Council in2007.

According to him, it wasforeseen that a 132kv highvoltage transmission line of140 kilometres to Kadunawould be erected to fullyutilise the 30 Mega WattsHydro-power plant, hence theneed for the review, whileadditional roads on right bankto Katari and left bank to Kenyidirection would beconstructed.

He assured that the projectwhen completed, would meetthe high demand of water byFCT residents.

“The Multipurpose Guraraproject will satisfy the FCTwater demand, produce elec-tricity for Kaduna city, allowdevelopment of modern irri-gation areas for intensive ag-riculture in the Gurara valley

and will boost the tourismpotential of the surroundingcommunities,’’ said Babba-ji.

Babbaji further explainedthat the project would allowfor the development of mod-ern irrigated agriculture,adding that on the basis ofthe pilot project experience,the final Irrigation MasterPlan has foreseen the pos-sibility of realising 12,000hectares of irrigated surfacein the Gurara Valley.

The site engineer, LainerDenllonze, noted that thelake is about 50 meters deepand 6km downstream withongoing pilot irrigationproject, adding that the sys-tem consists of water supplyfrom the dam through feed-er pipes.

*From left: Chairman, Anti-Counterfeiting Collaboration (ACC)of Nigeria and Brand Protec-tion Manager, Unilever Nigeria, Mr. Desmond Adeola, Area Head, Regulatory Affairs, BritishAmerican Tobacco West Africa Area, Mr.Sola Dosunmu and Brand Protection Advisor, NigeriaGuinness, Diageo Plc, Mr. Tony Oghohorie at the 5th Anti-Counterfeiting Collaboration (ACC)Committee Roundtable at Four Points, Victoria Island, Lagos.

A fter 15 years ofredundancy, the

Kaduna PetrochmicalCompany, KPC has resumedproduction at the capacity oftwo million barrels per day.

The Group ManagingDirector of NNPC, Mr.Andrew Yakubu disclosed thiswhen the National GoodGovernance Tour Team visitedthe company in Kaduna.He said that the company isgearing up for another turnaround maintenance by theoriginal builders, Chiyota ofJapan in the third quarter of2014 after the lastmaintenance in 2005 and istargeting to jack the annualturn over of the company toN1tr.

The maintenance he saidhad already been approved bythe federal government toensure that the companyoperate at the installationcapacity.

He however, added that thepetrochemical company hasfully commenced operationafter 15 years of stagnationand that the presentleadership of the companyhad sustained operation offuel supply to the designatedstates in the North with 1,403staff personnel.

Kaduna RefineryKaduna RefineryKaduna RefineryKaduna RefineryKaduna Refineryresumesresumesresumesresumesresumesoperation withoperation withoperation withoperation withoperation with2m barrels daily2m barrels daily2m barrels daily2m barrels daily2m barrels dailyproductionproductionproductionproductionproduction

At the just concludedPayment Card

Industry Data SecurityStandard (PCI DSS) customerseminar held in Lagosrecently, Data protectioncompany, SafeNet incollaboration withDataGroupIT have assuredboth banks and organizationson protection of sensitivedata.

PCI DSS is a proprietaryinformation security standardfor organizations that handlecardholder information for themajor debit, credit, prepaid,e-purse, ATM, and POScards.

Speaking at the seminartagged ComplianceCheckbox for Data Securityand Encryption, the Director,Middle East and Africa, MEASales at the SafeNet,Sebastien Pavie told theparticipants that in a complexand evolving climate ofadvanced threats,organizations should take adata centric approach toprotect and control theirsensitive information.

DatDatDatDatDataGroupITaGroupITaGroupITaGroupITaGroupIT,,,,,SafeNet offerSafeNet offerSafeNet offerSafeNet offerSafeNet offerdata protectiondata protectiondata protectiondata protectiondata protectionsolution forsolution forsolution forsolution forsolution forbanks, othersbanks, othersbanks, othersbanks, othersbanks, others

BY EMEKA AGINAM

CMY


Business & Economy

BRIEFS

From left: Executive Director Support Services, Infrastructure Concession RegulatoryCommission (ICRC), Dr. Ghaji Bello; Chief Servicom Officer, Nnenna Akajemeli; Nodal Headof Servicom, Office of the Secretary to the Government of the Federation, Amom Shimwen;Nodal Head of Servicom, ICRC, Mr. Michael Ohiani at the inauguration of the ICRC ServicomUnit at ICRC Head Office, Abuja, on Wednesday 11th December 2013.

BY GODFREY BIVBERE

Corporate AffairsCommission, CAC

yesterday achieved the ISO9001:2008 certification by theStandard Organisation ofNigeria, SON as an evidenceof the commission’scommitment to continuallyimproving its operationalperformance and underscoresits ability to meet customerneeds.

Established by theInternational Organizationfor Standardization and theSON, ISO 9001:2008 is a setof standards related to qualitymanagement systemsdesigned to enable

CCCCCAAAAAC acC acC acC acC achiehiehiehiehievvvvves ISO 900es ISO 900es ISO 900es ISO 900es ISO 9001:2008 recer1:2008 recer1:2008 recer1:2008 recer1:2008 recertificationtificationtificationtificationtificationfor operations standardsfor operations standardsfor operations standardsfor operations standardsfor operations standards

By FAVOUR NNABUGWUorganizations to ensure theymeet the needs of customersand other stakeholders, whilecomplying with statutory andregulatory requirements.

As the world’s mostrecognizable qualitymanagement standard, theISO 9001:2008 standard helpsorganizations increase theefficiency of their operations,realize cost savings andcontinually improve thequality of their products andservices.

CAC Registrar-General,Alhaji Bello Mahmudreassured SON and itsteeming customers on thecommission’s commitment tocontinue to improve itsprocesses, procedures andsystems in line with

international standards,adding, “We shall alsocontinue to strive for higherversions of QMScertificates”

“We have been able toreduce the period ofregistration of companiesfrom 5 days to 24 hourssince the adoption of theISO standards. We intend toreduce it further by bringingit down to a maximum of3hours by the time wedeploy the new registrationsoftware in the first quarterof 2014”

In achieving ISO9001:2008 certification, CACis able to highlight itscommitment to providingclients with the highestlevel of quality assurance forits global, industry-leadingscreening and identitysolutions.

Following the reaction ofthe Lagos State

Governor, BabatundeFashola, over the control ofthe nation’s waterways, theNational Inland WaterwaysAuthority (NIWA) has askedgovernor, to go to court tochallenge the law if he is notcomfortable with it.

Reacting to the governor’scomments that the state wouldnot obey aspects of the NIWAAct over a month ago, NIWAsaid the state should recourseto the law court rather thantake the law into its hands.Recall that the law requiresthat the states should obtainpermit from the FederalGovernment agency beforebuilding bridges or providingferry services on waterswithin their territories.

A statement issued by theGeneral Manager, PublicAffairs of NIWA, Tayo Fadile,noted that “While weconcede the right of theGovernor to express hisopinion as it relates to InlandWaterways in Lagos, we wishto draw the attention of HisExcellency to the fact thatwhere he is dissatisfied withthe valid Federal lawestablishing the NationalInland Waterways Authorityespecially as it concerns theAuthority ’s functions andregulatory control over Rivers,Creeks, Lagoons, Lakes andother bodies of internalwaters of Nigeria, the onlyalternative is the court of lawand not otherwise.

Waterwayscontrol: Go to: Go to: Go to: Go to: Go tocourcourcourcourcourt, NIWt, NIWt, NIWt, NIWt, NIWA tellsA tellsA tellsA tellsA tellsFasholaFasholaFasholaFasholaFashola

BY GODFREY BIVBERE

In a bid to curbimportation of fakeproducts into the

country, the FederalGovernment has issued freshguidelines for cargo clearanceat the ports and borders postnationwide.

A memo dated December 3,the Minister of Finance andCoordinating Minister for theEconomy, Dr Ngozi Okonjo-Iweala direwcted theComptroller-General ofCustoms, Alhaji DikkoAbdullahi, that the guidelinestakes effect from December 1.Under the new regime, alldocuments must bear theproduct name, country oforigin, specifications,manufacturer, date and batchnumber, standards ofproduction (e.g. NetworkInformation Services (NIS),British Standards PD.International Organisation forStandardisation (ISO),International EnergyStandards (IES), andDocumentation IdentificationNumber (DIN).All goods, according to theguidelines, must be labelledin English, in addition to anyother language of transaction;otherwise such goods shouldbe confiscated by Customs.According to the letter, allimports shall be accompaniedby the following documents:

-Combined Certificate ofValue and Origin (CCVO)contain the followinginformation.

-e-Form ‘M’ No:-Adequate description of

goods;-Port of destination. (The

FG releases fresh imporFG releases fresh imporFG releases fresh imporFG releases fresh imporFG releases fresh importttttguidelinesguidelinesguidelinesguidelinesguidelines… moves to curb importation of fake products

actual port shall be specifiede.g Tin-Can, Apapa, Kano,Onne, etc);

-Shipment identification,date of shipment, Country ofOrigin, Country of Supply.

-Packing List.-Shipped/Clean on Board

Bill of Lading/Airway Bill/Railway Bill/Road Waybill.

-Manufacturer’s Certificateof production, thePhytosanitary Certificate orChemical Analysis Report, which must state thestandards.

- Laboratory test certificatesfor chemicals, foods,beverages, pharmaceuticals,electrical appliances, andother regulated products arealso required from importers.

The letter, signed by theDirector, Home Finance, KZaji, said any intendingimporter should in the firstinstance, process e-Form ‘M’through any authoriseddealer bank irrespective ofthe value and whether or notpayment is involved.The first validity period of thee-Form ‘M’ for generalmerchandise, Zaji said,would be six months, whichhe said, may be extended foranother six months by thedealer.

The government, accordingto the memo, has granted aninitial validity period of 365days to capital goods withapproved e-Form ‘M’, andthe maximum extension of

another 365 days isallowed.

But any subsequentrequest for revalidation andconsideration of e-Form ‘M’after the maximum 365days extension period canonly be granted by theDirector, Trade andExchange Department,Central Bank of Nigeria(CBN).

Supporting documentsshall be clearly marked“Valid for Forex” or “NotValid for Forex” asappropriate i.e. whether ornot foreign exchangeremittance would beinvolved.

Also, all applications forgoods subject to DestinationInspection (DI), Zaji said,must carry the “BA” code,while those exempted shallinclude “CB” in the prefixof the numbering system ofthe e-Form ‘M’.

Importers intending tomake payments for goodsexempted under the D Ischeme, the governmentsaid, would not be allowedto do so in the ForeignExchange Market, exceptthere is a prior approvalfrom the CBN.Importers are also advisedto ensure that the e-Form‘M’ and the relevant pro-forma invoice carry a properdescription of goods to beimported to facilitate priceverification as follows:

-Generic product namei.e. product type, category:

-Mark or brand name ofthe product, whereapplicable;

-Model name and/ormodel or reference number,where applicable;

-Description of thequality, grade,specification, capacity, size,performance, etc;

-Quantity and packagingand/or packing.

The letter said the e-Form‘M’ would be valid forimportation if it isacceptable to the NigeriaCustoms Service (NCS).

As part of its CorporateSocial Responsibility

initiative in advancing thevision and knowledge ofNigerian youths, leadingMTN, has partnered with,RISE Networks, a privatesector funded youth-interestorganisation, to engage youthsacross the country in aNational DevelopmentalForum.

The forum is focused onadvancing the aspirations andknowledge of youths, all overthe nation, by providing themwith the opportunity to interactwith renowned and successfulNigerian Business Icons andprofessionals, who will sharewith them knowledge andexperience on their success.

C.S.R : MTNC.S.R : MTNC.S.R : MTNC.S.R : MTNC.S.R : MTNempowersempowersempowersempowersempowersNigerian youthsNigerian youthsNigerian youthsNigerian youthsNigerian youthson developmenton developmenton developmenton developmenton developmentprogrammesprogrammesprogrammesprogrammesprogrammesBy PETER EGWUATU


CMYK

Banking & Finance

BRIEFS

It was a representation ofall the major actors in thequest to extend financial

services to the 34 million adultNigerians, who has no accessto any form of such services

The Central Bank of Nigeriawas there, represented by theGovernor, Mallam LamidoSanusi, the banks wererepresented by Sterling Bank,Enhancing FinancialInnovation and Access(EFInA) was also there, aswell as various civil societygroups. The gathering tookplace in a market dominatedby women and illiteratetraders, which constitutemajority of Nigerians with noaccess to financial services.

The purpose of the gather-ing was the audacious goal ofreducing the number of thisgroup of people, referred to as'financially excluded', to 20per cent of the adult popula-tion by 2020 from 20 per centin 2010.

The financially excluded arethose who do not use anyfinancial service or product tomanage their finances. Theytransact using cash. Most ofthem according to a 2012study by EFInA, are women,rural dwellers, farmers andilliterates. 52.3 per cent of thefinancially excluded adultpopulation are female,according to a study on Accessto Financial Services inNigeria, by EFInA. Theimplication is that efforts toreduce the population of thefinancially excluded shouldbe concentrated on women.Hence the choice of Asejerefish market, located inMakoko, Yaba, Lagos State,to launch the first Agentbanking scheme in thecountry.

“What we are trying to do inthe central bank now is to tellyou that whether you are pooror rich, whether you speakEnglish or not, whether youhave car or not, whether youlive in a town or a village, youhave a right to bankingservices”, Sanusi told thecrowd of fish sellers.

But having a right tofinancial services is one thing,deciding to exercise that rightis another issue. Most of thepeople who are financiallyexcluded in Nigeria, actuallychose not to exercise that rightfor sundry reasons. These rea-sons were revealed in a 2011study on, Understanding theLow income population in Ni-geria by EFInA.

Financial inclusion: Hopes andchallenges of 34 million NigeriansBy BABAJIDEKOMOLAFE

The reasons include: Intim-idating and stressful accountopening process, long dis-tance and associated cost ofvisiting banks; unexplaineddeductions; low interest rateon savings; increased fraudrate, etc.

Some of the low incomepeople surveyed in the studylist the challenges ofexperienced patronisingbanks. These include: slowpaced services and longqueues; unreasonable bankcharges and hidden charges;unfriendly staff; ATM fraud;unreliable network; andrequired opening andminimum balance.

In an effort to address someof these factors, the CBNintroduced the tiered KnowYour Customer regulations,which introduces differentaccount requirement for threecategories of bank customers.The Low-level KYC, whichaims at making it easy for low

income people to have bankaccounts, requires only pass-port photograph and person-al information for accountopening. Also the CBN haddirected banks to allow peo-ple to open accounts with zerobalance. To complement this,the CBN introduced the agentbanking model, which is de-signed to bring financial ser-vices closer to where peoplelive or work. Furthermore isthe introduction of biometricelectronic payment devicessuch as ATM and PoS, whichallow use of fingerprint foraccess.

“By the time you see howthis machine works, the onlything you need to open ac-count is your finger that Godhas given you.” Sanusi boast-ed. “It is a finger nobody cantake from you. God, who cre-ated us, gave each of us a fin-ger nobody on earth has. Notyour sister or your brother oryour parents or your children.So when you put this fingeron that machine anywhere inthe world, they will open ac-count for you. You put yourfinger and you collect yourmoney. Very soon, you will beable to combine your fingerwith your telephone.”

Like many of the 34 millionfinancially excluded peoplein Nigeria, the Asejere marketwomen are not entirely newto financial services. At onepoint in time, they havepatronised one bank or theother, but with unpalatableexperiences.

Speaking the minds of themarket women, Baale ofAsejere said”, the fear of ourpeople is Nigerian policy, thepolicy keeps changing fromtime to time, and we arealways the loser. Themicrofinance bank is a typicalexample; these marketwomen were alwayscontributing money into thesebanks. I have a case wherebyover N100 million was stolenaway by one Almond MicroFinance Bank. It took theirmoney away, over N100million. I wrote the centralbank, they all claimedignorance of that bank. Howthe bank was registered in thefirst instance only God knows.That is why I said they shouldnot allow these women to puttheir money into this financialinclusion project, only forthem to tell them that theirmoney is stalked somewhere.”

This fear is a major barrierto financial inclusion inNigeria. While low incomepeople usually expressexcitement at the safety,convenience and comfort ofbanking services especiallyelectronic payment channels,the fear of losing their moneyconstrains them frompatronising these services.According to the EFInAstudy, the fear of losingmoney to fraudsters was thefirst concern expressed byrespondents to the concept ofusing mobile phones to makepayment.

ACCIONretainsLEED’s bestMFB Award

Accion Microfinance Bankhas again for the 3rd year

running taken its pride ofplace as winner of the 2013Lagos State Enterprise Award(LEAD) for Best MicrofinanceBank of the year. AccionMicrofinance Bank wasdeclared winner based on asurvey conducted by anindustry research group forLEAD Awards. TheManaging Director/ChiefExecutive Officer of AMfB,Ms. Bunmi Lawson said “this3rd consecutive win as apointer to AMfB’scommitment to financialinclusion, its high standardsof corporate governance andstaff devotion to our mission.Going forward, AMfB willcontinue to expand itsservices aided by technologyas we are driven by thepassion of ensuring a brighterfuture for our customers.”

Also speaking, Jide Petersthe Executive Director ofLEAD Africa Award saidAMfB is being selected forthe 3rd year running “as aresult of its uncompromisingstandard in promotingmicroenterprises anddelivering first class servicesresulting in povertyalleviation in Nigeria.”

New Zealandcenbankcautions onbitcoin

New Zealand’s centralbank is wading into the

debate about bitcoin, urgingthe country’s banks and busi-nesses to exercise cautionwith the virtual currency.

“Tread very carefully,”Reserve Bank of NewZealand Assistant Gov. JohnMcDermott said Thursdaywhen asked if local banks andbusinesses should embracebitcoin’s potential.

“You have to worry aboutwhere’s the supply, how it’scontrolled, how it’smonitored,” Mr. McDermottsaid. “Who knows at thispoint? There is still a lot forthe world to learn on thisissue.”

Bitcoin is a virtual curren-cy that isn’t backed by anycentral bank or reserves, butexists only online.

*Asejere market women welcoming the CBN Governor, Mallam Sanusi Lamido Sanusi andMr Yemi Adeola, Managing Director/Chief Executive Officer, Sterling Bank Plc..at the launchof Financial Inclusion Scheme by Sterling Bank Plc held at Asejere Market, Makoko YabaLagos. PHOTO: AKEEM SALAU

By the time yousee how thismachine works,the only thingyou need to openaccount is yourfinger that Godhas given you

,

,


Banking & Finance

BRIEFS

*The first regional and zonal draws of the 30th anniversary promo of First City MonumentBank (FCMB) Limited took place on Wednesday, December 11, 2013 across the country. Pictureshows the Executive Director, Lagos and South-West of the bank, Mr. Olufemi Bakre, present-ing a prize to one of the winners, Corporal Paul Ejoga at the regional draw held at Akute inOgun State. With them are the Divisional Head, Retail Banking of FCMB, Mr. Olu Akanmuand the Divisional Head, Human Resources and Change Management, Felicia Obozuwa, atthe event.

Economic experts havepredicted higher infla-

tion rate and exchange ratefor the country in 2014. Thesepredictions contrast the stableexchange rate and inflationband of four to seven per centobjectives of the Central Bankof Nigeria (CBN) for nextyear.

Regional Head of Research,Africa, Standard CharteredBank, Razia Khan of Stand-ard Chartered Bank predict-ed that inflation will rise to 12per cent in 2014 from 7.2 percent this year. On his part,Managing Director/Chief Ex-ecutive, Financial DerivativeCompany, Mr. Bismarck Re-wane predicted that inflationwill rise to 11 per cent in thesecond quarter of 2014.

On Exchange, Rewane pre-dicted that Naira official trad-ing band will be N155-165with midpoint at N160. Hemade these predictions at theLagos Business School year-end review. He also predict-ed that the CBN will furtherincrease banks’ cash reserveratio (CRR) on public sectordeposit to 75 per cent fromthe present level of 50 percent, and on private sectordeposit to 20 per cent fromthe present level of 12 percent. He said this increasewould severely impact banks’profitability by about 30 percent.

Khan similarly predictedthat the middle point of theofficial exchange rate would

Experts predict higher inflation,exchange rate in 2014

By BABAJIDEKOMOLAFE

rise to N160 per dollar, andfurther tightening of moneysupply by the CBN.

She said: “The CBN is like-ly to defend the current for-eign exchange peg (around amid-point of 155) up to apoint, and to tighten policy toachieve this. Should the nairatrade consistently outside thisband even after tightening,we believe the authorities willaccommodate this, with themid-point of USD-NGN im-plicitly shifting to 160 in 2014.

“We change our view on in-terest rates. While inflationslowed to single digits in

2013, this could be put at riskby higher pre-election spend-ing, foreign exchange volatil-ity (exacerbated by Quantita-tive Easing (QE) tapering),and investor concerns aboutCBN succession. We previous-ly expected the CBN to raisethe monetary policy rate(MPR) by 200bps to 14 percent in 2014 to influence theforeign exchange rate.

However, the CBN madeclear after its most recentmeeting that it would preferto hike the public-sector cashreserve ratio (CRR) further inorder to deal more decisively

with excess liquidity shouldit arise. “We expect a furtherhike in the public-sector CRRto 100 per cent (from 50 percent) in first half of 2014, es-pecially if spending pressuresemerge. We now expect only50bps of MPR hikes, mostlikely at the September 2014policy meeting, in order tokeep the rate positive withrespect to inflation. WhileCBN officials have spoken ofadopting an informal 4-7 percent inflation target by 2015,we expect inflation to end2014 just above 12 per cent.

Ecobank Capital, the investmentbanking arm of Ecobank Group,

has raised, on behalf of Orion Oil Ltd$500 million to be utilised for the pre-payment of crude oil cargoes to be sup-plied by Société Nationale des Pétrolesdu Congo (The National Oil Companyof the Republic of Congo, SNPC).

The facility comprises a US dollar de-nominated $342 million tranche and aXAF denominated USD 158 milliontranche. Ecobank Capital acted as theMandated Lead Arranger, working withUnited Bank for Africa (UBA) Plc as co-arranging bank. Participating lenderswere Afreximbank, BGFIBank Group,UBA Group, Banque Atlantique Groupand the Ecobank Group. The closingceremony was held in Paris, France onOctober 26th, 2013.

Orion is a privately held companywhose principal activities include thephysical trading of crude oil and refinedproducts. The company focuses on thevalue chain of the oil & gas industry,

Ecobank Capital raises $500m facility for Orion Oilsupplying approximately 100,000 met-ric tons of refined products each monthalong the West African Coast and hold-ing interests in oil & gas fields in Con-go. Orion entered into a 24-month crudeoil allocation program with SNPC, thelargest oil & gas company in Central Af-rica. The proceeds of the debt facility willbe used to fund the prepayment of theaforementioned crude oil cargos(amounting to circa USD 100 million percargo) on a Free on Board basis.

This transaction is the largest loan syn-dication completed to date in CentralAfrica solely funded by regional Africanbanks and for an indigenous company.It clearly showcases the increasing in-terest of regional banks in financing cap-ital intensive oil & gas deals in Sub-Sa-haran Africa, channelled through thediligent syndication expertise of EcobankCapital.

Mr. Ikenna Onyejiaka, Acting Man-aging Director of Ecobank Capital said:“This landmark transaction underscores

Ecobank Capital’s capabilities as a LeadArranger of syndicated loans, workingwith Africa’s key financial institutions toprovide vital support to Congo’s eco-nomic growth, especially at a time whenthe Eurozone crisis is threatening Afri-can businesses’ access to internationalmarkets.” Ms. Foluke Aboderin, Execu-tive Director of Ecobank Nigeria added:“Ecobank is proud to be associated withOrion Oil Limited, a truly internationaloil company with a reputable track record.We are indeed excited to have partici-pated in the USD 500 Million Pre-Ex-port Financing with SNPC, Congo. Forus at Ecobank, this transaction is unde-niably strategic and represents what weare about - leveraging on our large foot-print across middle Africa to support vi-able business for the development of ourcontinent. Our expectations are that wewould continue this strategic alliance/partnership with Orion in a manner thatis mutually beneficial to both institu-tions.”

FirstBank attainsISO22301certification onbusiness continuitymanagement

First Bank of Nigeria Ltdhas once again achieved

yet another milestone by beingthe first banking institution inNigeria to achieve the new in-ternational certification on Busi-ness Continuity Management,ISO22301 (Societal Security:Business Continuity Manage-ment System).

ISO 22301, the world’s firstinternational standard for Busi-ness Continuity Management(BCM), has been developed tohelp organizations minimizethe risk of disruptions. It spec-ifies requirements from organ-izations to plan, establish, im-plement, operate, monitor, re-view, maintain and continual-ly improve a documented man-agement system to prepare for,respond to and recover fromdisruptive events when theyarise. According to FirstBank’sGroup Managing Director/Chief Executive Officer, BisiOnasanya the Bank’s attain-ment of this feat is a demon-stration of our commitment todelivering sustained, consist-ent and exceptional services toour customers and meeting theexpectations of all stakeholderseven in the event of any dis-ruptions.

Sterling Bankpartners Audaxon computereducation

Sterling Bank, in partnership with Audax, a soft-

ware development company, atthe weekend organized theComputer Science Education(CSE) Hour of Code in Niger-ia. The programme held simul-taneously worldwide; with theCSE Week starting worldwidelast Monday, November 09,2013.

The Hour of Code, accordingto a statement from the bank,is aimed at deepening aware-ness of Computer Science Ed-ucation among children andyouth. It comprises free one-hour sessions on the buildingblocks of computer codes writ-ing, open to registered attend-ees between the ages of 6 and16. The programme had threeblocks of one-hour sessionswith over 50 participants persession and was essentially, aone-hour Introduction to Com-puter Science; designed to de-mystify “computer codes” andshow that anyone can learn thebasics to be a maker, creatorand an innovator of any com-puter code.

By NKIRUKA NNOROM

BRIEFS By NKIRUKA NNOROM

*From left: CEO, Brittania-U Nigeria Limited, Mrs. Uju Ifejika; Guest Lecturer and GMD/CEO Diamond Bank Plc, Dr. Alex Otti; Founder/CEO, Emzor Pharmaceutical Industries Limit-ed, Dr. Stella Okoli; and Deputy Governor, Corporate Services, CBN, Mallam Suleiman Barauat the Hallmark Public Policy Forum in Lagos.

Shareholders in theNigerian capital markethave said that the

planned exclusion of compa-ny directors and majorityshareholders from exercisingvoting right in any take-overbid is illegal as the Exchangelacks the power to take suchaction.

Though a cross section ofshareholders, who spoke withFinancial Vanguard in sepa-rate interviews, observed thatit is a good idea, they said thatit would be unachievable un-less the Companies and Al-lied Matters Act, CAMA, isamended to reflect the newposition.

The NSE had recently saidit would ban directors andcontrolling shareholders fromvoting in transactions such astakeovers to protect minorityinvestors.

The proposal, according toTinuade Awe, Head, Legaland Regulation Division,NSE, is part of measures tostrengthen corporate govern-ance and would be introduced“as soon as possible.” Sheexplained that the recommen-dation has already been re-leased for public commentand is subject to the approvalof the Securities and Ex-change Commission, SEC.

Reacting, AmbassadorOlufemi Timothy of Renais-sance Shareholders Associa-tion, said that going aheadwith the proposal would beunfair to the directors and ma-jority shareholders involvedas it is against the investmentlaw (CAMA).

According to him, “Thereare other legal means toachieve the aim. They may beasked not to own block sharesindividually. All of them puttogether must not controlmore than 60 percent of thecompany.”

“There could also be volun-

Ban of coy directors,majority shareholdersfrom voting, illegal—Shareholders

Infinity Mortgage Bank Plc has disclosed that one of itscardinal objectives in the next two years (2014) is toattain a national mortgage bank status, and to be a lead

participant in the proposed Nigerian Mortgage Refinancecompany.

Speaking at the fact behind the listing on the NigerianStock Exchange, NSE, the Managing Director, Mr. Obal-eye Olabanjo, said the company also plans to float capitalmarket securities such as Mortgage Backed Securities(MBS) and Real Estate Investment Trust (REIT).

The company had listed a total of 4.17 billion ordinaryshares of 50 kobo each at N1.50 per share on the NSE’sofficial list last week.

“We will continue to be a leader in provision of affordablehousing to Nigerians and we will continue to dominate themortgage banking industry, increasing our market share fromthe current size,” he said, adding that it is set to pursueorganic and strategic branch expansion in order to createand enhance shareholders’ value.

He noted that Infinity Trust hoped to tap into the hugegap in the housing sector to bolster its revenue, even as ithopes to achieve 30 percent growth in profit after tax in2014.

“We intend to achieve a 30 percent growth in profit after

Enterprise Bankrisk managementefforts recognised,rewarded

The effort of the management of Bank Limited of

building a sound financial in-stitution was at the weekendrecognised and rewarded assecond best in the country atthe maiden edition of the Ni-gerian Risk Awards (NRA).The award was organised byConrad Clark Nigeria Limit-ed in collaboration with news-papers and United Kingdom(UK) Institute of Risk Man-agement. In the same vein, the Headof Operational Risk Manage-ment of Bank was also nomi-nated in the “Risk Managerof the Year” category, whichwas eventually won by thehead of Operational RiskManagement at AccessBank. The NRA is dedicated to rec-ognising and rewarding or-ganisations and individualswho have achieved measur-able results through the effec-tive implementation of enter-prise risk management prin-ciples among other parame-ters. The panel of judges wasco-chaired by Dr. Divid Hill-son, known globally celebrat-ed scholar from the UnitedKingdom, and Mr. VictorOdozi, former Deputy Gover-nor of the Central Bank of Ni-geria (CBN).

U.S. stocks fallwith gold, silveras dollar gains on

Fed

U.S. stocks fell, sending theStandard & Poor’s 500 In-

dex to a one-month low, treas-uries declined and the dollargained versus most majorpeers as growth in retail salesadded to speculation that theFederal Reserve will slowstimulus. Gold and silver ledcommodities lower.

The Standard & Poor’s 500Index lost 0.3 percent to1,776.41 after sliding by 1.1percent Thursday. Treasury10-year yields added one ba-sis point to 2.87 percent. TheBloomberg U.S. Dollar Index,a gauge of the currencyagainst 10 counterparts,climbed 0.4 percent. TheStoxx Europe 600 Index de-clined 1 percent to the lowestsince October and the MSCIAsia Pacific Index slid by 1.2percent. Gold lost more thantwo percent and silver sankmore than four percent.

More economists predictthe Fed will taper bond buy-ing as soon as next week anddata Thursday showed U.S.retail sales increased morethan economists estimated.Chinese policy makers meetthis week to set growth targetswhile central banks in Indo-nesia, New Zealand, SouthKorea and Switzerland main-tained their benchmark inter-est rates today.

tary disqualification of them-selves (the directors and ma-jority shareholders) in votingon such transactions in orderto show fairness,” he added.

Boniface Okezie, Chairman,Progressive Shareholders As-sociation of Nigeria, PSAN,observed that stripping thesegroups of shareholders of vot-ing right in the instancewould be a good idea only ifthe Nigerian Stock Exchange

has the power to do so.“Under what law will they

execute the programme. Willa tenant have the power toevict his landlord from hishouse,” he queried, adding“For me, if the answer is no,then they cannot enforce it be-cause they lack the power todo so. The NSE cannot oper-ate outside the CAMA. In asmuch as the companies arestill operating under CAMA,

the NSE lacks power to do so.You cannot suddenly say thatthe minority shareholdersshould become the majority,while the majority becomesthe minority.”

However, if the law isamended, it will be good forshareholders so that the ma-jority shareholder will notcontinue to oppress theminority, he affirmed.

ITMB targets national mortgage bankstatus by 2014 tax in the coming year and we expect it to continue in that

trend. Earning per share will equally rise; when you havemore business to do, definitely, the earning will rise,” hestressed.

According to him, “Our mission is to be a reference point inall spheres of mortgage business through the usage of time -tested professionals, the best in technology and adequatecapital in creating wealth for all stakeholders - customer, staff,shareholders and the community at large,” he said.

He disclosed that the company had shareholders’ funds inexcess of N4.5 billion as at the end of 2012, making it one ofthe most capitalised PMIs in the country.

Olabanjo noted that the firm was profitably run with verysubstantial, impactful value addition and great potential, say-ing that for eight years running, it has been consistent inincreasing returns on investment and paying dividends tothe shareholders.

Speaking on the performance, he said the bank recorded aprofit before tax of N565.6 million and profit after taxation(PAT) of N517million.

He explained that the approach was to reinforce the com-pany’s position by growing significantly across the key met-rics, including scale, profitability and market share.

The results, he said, reflected a robust improvement uponthe previous performance and the indicators were well abovethose posted by the company’s peers.

“The bank has continued to be ahead of our competitorsdespite the challenging economic environment in Nigeria,”Olabanjo said.


Corporate Finance

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26 —Vanguard, MONDAY, DECEMBER 16, 2013

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CMYK

Commodity Index E-Commerce

Dec 06 - Dec 12, 2013Experts decry lack of ITpatency law in NigeriaStories ByJONAH NWOKPOKU

*From left: Mr. Chidi Okoro, Managing Directorof GlaxoSmithKline, receiving the Anabel Leader-ship Academy Transformational agenda DVD fromMr. Nicholas Okoye, President, Anabel Group andConvener, Nigeria Leadership Summit at the 2ndNigeria Leadership Summit in Lagos.

Information andCommunica t ion

Technology, ICT expertsin the country have calledfor a law for patentingICT-related intellectualproperties to drive mon-etisation in Nigeria.

The experts, PeterAkporume and HenryAfekuana both fromMobile EnterpriseNigeria, made the call inan exclusive interviewwith Vanguard on thechallenges of IT startupsin the country.

They said that apartfrom the challenge ofobtaining Value AddedService licence asstartups, patentingintellectual property asfar as IT products are con-cerned, especially soft-ware, has remained ahuge challenge as it isobvious that there are nostatutory provisions tomake that possible at the

moment.According to them,

“Patency in Nigeria is ahuge challenge. Fromour recent finding, it doesnot hold water. The onlything we have in Nigeriais copyright, you canhave a situation whereyou can have your appthat you developed fromthe scratch, that is yourpersonal idea and you

can’t patent it and thenyou see another personcoming up with the sameidea. But in an organisedsociety, even withoutmoney, you can patent agood intellectualproperty. But the problemis that at the moment,Nigeria only patents tan-gibles like drugs. Thereis no provision yet for in-tangibles, like technolog-ical applications and Ithink the governmentneeds to address that.”

They argued that, “forthe patent, governmentcan put structures inplace so that startups canhave the opportunity topatent intellectual prop-erty. That would go along way to solve theproblem and help the lo-cal IT scene to grow.

“We want to appeal togovernment to come upwith legislation to ad-dress that patency chal-lenge so that when youare creating something,at least you will be confi-dent that you are goingto benefit from it.

What e-commerceoperators can expectin 2014

As we wrap up another year, looking

back at the retail andtechnology trends thatshaped 2013 can help usgauge what retailers canexpect for 2014. Heatedcompetition from onlineretailers and the lack oftraction for mobile walletsshow we’re still in theearly stages of digital andmerchant convergence.The industry will contin-ue to evolve in 2014 asmobile commerce contin-ues to grow and retailersput more focus on creat-ing targeted, personal-ized and seamless shop-ping experience for con-sumers. What can we ex-pect from commerce andmobile marketing in2014?

Experts believe thatpart of the prominent fea-ture of 2014 mobile mar-keting would be the drivefor mto deliver the bestconsumer experience.Consumers would shiftloyalty to merchants thatfocus on delivering themost engaging, rich anduseful customer experi-ence. If retailers want tostay competitive, theywill need to focus on mak-ing it as easy as possiblefor customers to find – and

pay for – exactly whatthey want. As is becom-ing the trend in the laterpart of 2013, in an effortto provide a better expe-rience, convert moresales and build loyalty,more and more merchantsare releasing personaliza-tion apps that aren’t justfocused on commerce,but make the entire shop-ping and purchase proc-ess more seamless fortheir customers.

Kaymu advocates strategicproduct positioning tomaximize profit

Managing Direc-t o r ,

Kaymu.com.ng, an onlinemarket place,Massimiliano Spalazzi,has said that strategicproduct positioning anddelivering top class cus-tomer service would driveprofit especially duringthis Christmas period.

According to him, “theway and manner itemsare listed will greatly de-termine how much profita seller makes on theKaymu website. Re-searching bestsellingproducts and introducingit during Christmas is a

key factor in maximizingprofit during Christmas.Products that look set torepeat their profitableperformance of past yearsshould be given topmostpriorities during theChristmas period.”

He explained that,“The online marketplaceis highly competitive andwhether shopping onlineor in-store, the experi-ence the shopper re-ceives impacts how likelyit is that they will be re-turn shoppers, hence de-livering a top-notch ex-perience is very vital tomaximize profit.”


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Homes & Housing Finance

BRIEFSKebbi partnersFHA to build 2,500houses

Kebbi Government isworking in partnership

with the Federal HousingAuthority (FHA) to construct2,500 houses in the state.

Commissioner for Landsand Housing, AlhajiHussaini Raha, told the NewsAgency of Nigeria (NAN) inBirnin Kebbi that the houseswould be constructed in fourLocal Government Areasnamely Argungu, BirninKebbi, Yauri and Zuru LGAs.

He said that 1,000 houseswould be built in BirninKebbi, while 500 eachwould be sited in Argungu,Zuru and Yauri localgovernments, adding thatthe houses would beallocated to civil servantsand individuals in the state.

Raha, who did not revealthe contract sum, said workwould commence as soon ascompensation was paid toowners of the land acquiredfor the project.

He called on developers toinvest in the state’s housingsector, “especiallyconsidering that a newfederal university, new statepolytechnic and new CentralBank of Nigeria office willattract more workersrequiring accommodation’’.

UK houseprices continuerapid rise

House prices rose by 1.1percent in November

compared with the previousmonth and up 7.7 percentannually, the Halifax hassaid.

The lender, now part ofLloyds Banking Group, saidstrong demand for homescombined with low levels ofproperty on the market hadpushed up prices. It said thatthe average home in the UKwas now valued at £174,910.

However, the Halifax saidthat the rate of house pricegrowth would be“constrained” by squeezedhousehold finances. “We arealso seeing signs of a revivalin housebuilding, whichshould help bring supply anddemand into better balanceand curb upward pressure onprices over the medium andlonger terms,” said MartinEllis, chief economist at theHalifax.

The month-on-month risewas the 10th successivemonthly increase in prices,according to the Halifax’smeasure.

Big banks have been retrenching fromthe mortgage business recently,

leaving smaller players to pick up largerchunks of business.

As of the third quarter, smaller mortgageplayers held a 60 percent market share ofthe U.S. origination market, up from 39percent in 2009, according to industrypublication Inside Mortgage Finance.

In the third quarter alone, the smallerlenders, defined as those outside the topfive, gained about six percentage points ofmarket share, according to data compiledby Paul Miller, an analyst with FBR CapitalMarkets. The trend is opening upopportunities for small companies such asloanDepot.com LLC, regional banks such asM&T Bank Corp. MTB -0.60 percent andlarger mortgage players like Quicken Loans.The competition is benefiting consumers insome places, while helping find jobs for

Smaller US mortgage banks control 60% market sharedisplaced workers. Some smaller lenders,looking to take advantage of the trend, havesold shares in initial public offerings.

The midsize and smaller players havegrown despite tightening their underwritingstandards, much like larger banks have sincethe financial crisis. But the smaller banks’capital rules aren’t as stringent as those thatmake mortgages a costly enterprise for thebiggest firms.

The behemoths have pulled back bytightening credit standards and takinglonger to process certain loans, as smallerlenders, whose loan officers can know theircustomers better, have shown a willingnessto be more flexible and close loans quickly,analysts say. One significant driver in bigbanks’ declining market share has been theirdecisions to stop buying loans from otherlenders or mortgage brokers, due to costlycapital rules.

Ogun State governmenthas unveiled a scheme

that will enable homeowners inthe state regularise andproperly document theirproperties, known as OgunState Homeowners’ CharterProgramme. A statement fromthe state Ministry of Urban andPhysical Planning, said thatapart from forming an integralpart of the government’smission to rebuild the state, thescheme will provide data for themedium-term planning forprovision of roads, schools,hospitals and other essentialservices.

The statement noted that GISSatellite mapping of the staterevealed significant numbers ofunrecorded properties, whilethousands of houses in thestate have no building planapproval, certificate ofoccupancy and other titledocuments. It added that thescheme will enable owners ofproperties built withoutgovernment approvalregularise their title documentsthrough a window ofopportunity to obtain buildingplan approval and certificatesof occupancy. It is expected topave way to clear ownershiplands, unlock the potential ofproperty owners to createwealth and enhance thedevelopment of Ogun State’shousing market.

Under the scheme, owners ofproperties without the requiredbuilding approvals, or housesbuilt on land belonging to thestate government will be givena window of opportunity toobtain building plan approvals,Certificates of Occupancy andother documents that will

Ogun unveils plan tohelp homeownerssecure properties

•House-Real-Estate

establish their ownership to theproperties. The scheme willensure that all penalties andfines that are normally leviedagainst those who build houseswithout approvals andCertificates of Occupancy willbe waived. It also relaxes thedocumentation requirementsand fees are discounted so thatmany residents, especiallythose who would otherwise notbe able to afford it, can benefitfrom the programme.

Also under the scheme,interested property owner willmake an initial deposit of N5,000, and then submitdocuments that can be used toestablish ownership of theproperty. These would includeland purchase agreements,deed of gift or sublease,receipts, and survey plan.According to the statement, “it

is quite evident that withoutthese documents, it would beextremely difficult to establishclaims to ownership ofproperties”.

The statement added thatdesignated officials willundertake an initial visit to thesite to confirm that the propertyis indeed eligible for theprogramme, and that theinformation that was providedon the form is accurate.Properties that are not eligibleare those that are built underPower Holding Company ofNigeria (PHCN) high tensioncables, those occupying Right-of-way of the Nigerian NationalPetroleum Corporation(NNPC) pipeline, those on the‘set-back’ of roads, water bodiesand gullies, as well as thosebuilt on flood plans or areas thatare committed acquisitions, or

that are substandard ordefective.

The statement said: “It isexpected that properties withregularised documents willbenefit from Ogun StateGovernments’ urban renewalpolicy through effectiveplanning of facilities in theareas of education, health andother essential infrastructure. Itwill also minimise disputes ofownership of properties whileproperty related fraud andproblems of land speculatorsare reduced to the barestminimum. The Homeowners’Charter Programme will alsoenhance the value of theproperty market in the state.”

Communities expected tobenefit from the new initiativeinclude Sango, Sango-Ota,Magboro, Ifo, Ogijo, Ojodu,Alagbole, Ado Odo Ota, OkeOdan, Akute, Agbado, Agbara,and Ijoko as well as otherinhabitants, mostlyentrepreneurial as many ofthem will find it easier to usetheir houses to secure bankloans. Some partner banksalready picked for the schemeare First Bank, FCMB, GTB,Keystone Bank, Skye Bank,Sterling Bank, Wema Bank,Lavendar Microfinance, TrustMicrofinance and, GatewaySavings & Loans.

“The governmentunderstands that it might bedifficult for some propertyowners to make the fullpayment at once. It hastherefore made it possible forthose who cannot do so to payin instalment – as long as thefinal payment is made by thefinal deadline of August 31,2014. The government has alsobeen able to secure thecooperation of a number of thepartner banks in offering loanswith two-year tenure. Theprogramme can be consideredas a reprieve for those whohave built on governmentlands, or those who have builton private lands withoutobtaining building planpermits.


CMYK


Insurance

BRIEFS

From left: front row; Lady Isioma Chukwuma, Treasurer CIIN; Pastor Adeyemo Adejumo,CIIN past president; and Mr. GUS Wiggle, Nigerian Insurers Association, NIA, Deputy Chairmanat the recently held 2013 Chartered Insurance Institute of Nigeria, CIIN, Christmas carolservice in Lagos.

Activities in thereinsurance sub-sector

have noticeably increasedwith enhanced publicawareness of the sector andtheir operations, rapidexpansion and strategicbusiness acquisitions,improved visibility and strictsupervisory regulation.

Howbeit, one of the majorchallenges facing the AfricanReinsurance marketspecifically is competition,particularly from theinternational market wherereinsurers seek to continue todiversify their portfolios withbusiness from relatively non-catastrophic territories inAfrica.

The Associate Director,Market Development andCommunications at A.M.Best, Dr. Edem Kuenyehiasaid the demand for insurancein Africa has continued toincrease in tandem witheconomic growth.

The six largest insurancemarkets in the continentgenerated a premium incomewhich stood at $60.7 billionrepresenting 7.8 per cent atthe end of 2011 with Nigeriaand Morocco experiencingdouble-digit percentagegrowth though the market, hesaid, is growing at a low basebut expanding at a faster ratemore than developed markets.

Egypt, Kuenyehia said, hasbeen exceptional with 0.4%contraction in total premiumowing to the political situation

African reinsurers steerbusiness competition,integration

By FAVOURNNABUGWU

in that country while Kenyaand morocco have the nextlevels of insurancepenetration on the continentwith 3.2% and 2.9%respectively which can becompared to insurance marketin Brazil and China.

He said Nigeria and Chinathat have populationadvantage of over 165 millionand 82million respectively arestill largely underinsured.

The insurance markets acrossAfrica, he admitted, arediverse, reflecting disparitiesin economic conditions and

the approaches ofpolicymakers in individualcountries and regional blocs.

Countries with strongereconomies often driven by theenergy sector and mininghave enjoyed greater demandfor insurance whileaffordability remains an issuein poorer African countries

“Nigeria has the biggestinsurance market in WestAfrica, as the oil and gasindustry has fuelled economicdevelopment and demand forenergy infrastructure projects,The insurance market has seen

consolidation driven primarilyby higher capitalrequirements, although A.M.Best believes there is room forfurther mergers andacquisitions”.

“Insurers are attempting tomake insurance moreaccessible through microinsurance and, to a lesserextent in certain countries,through Takaful productofferings that comply withIslamic Sharia law. Insurersarc exploring new distributionmethods for personal lines,driven by expanding use ofmobile telephones”

Nigeria’s Commissioner forInsurance, Mr. Fola whoconcurred to Kuenyehia, saidinsurance is a key driver in theeconomies of countries andthe West Africa sub-region wasnot expected to be anexception.

Daniel said, “Let me alsoquickly restate the well-known fact that insurance isnot very popular in our sub-region for various reasonsamongst which are; low levelof financial literacy, lack ofadequate awareness ofinsurance mechanism andpoor perception of theindustry.

“However, there is anincreasing cross-borderinsurance practice in the sub-region in tandem with ourcollective quest forintegration. The insuranceregulatory bodies in the sub-region are therefore poised toengage in cross-bordercollaboration and exchange ofinformation and data.

This is to ensure thatinsurance practice engenderstrust and acceptance in oursub-region throughenforcement of rules andregulations,” Daniel said.

The microinsurance market in thecountry will begin to witness activities

soon following the inauguration of theMicroinsurance Steering Committee by theNational Insurance Commission, NAICOMlast week.

Commissioner for Insurance, Mr. FolaDaniel, who inaugurated the committee,said that the terms of reference is to developthe action plan for microinsuranceimplementation in Nigeria; identify andmake recommendations to NAICOM onissues that affect microinsuranceimplementation in Nigeria; makerecommendations on possibleimprovements that can be made on theregulatory and operational framework; aswell as any other assignment as may bedirected by the Commission.

It will be recalled that NAICOM recentlyreleased the guidelines for microinsuranceoperation in the country and the registration

Microinsurance activities to commence assteering committee comes on stream

requirements for specialised microinsuranceoperators are that applicant must be aLimited Liability Company registeredunder the Companies and Allied MattersAct (CAMA Act 2004); the applicant shallchoose to underwrite the followingbusinesses: life microinsurance or generalmicroinsurance.

The minimum paid-up share capitalrequirements for life microinsurancebusiness is N150,000,000 while generalmicroinsurance business is N200,000,000.

According to the guideline, the applicantshall submit its 5-year business plan andfeasibility study of microinsurance to betransacted, which shall contain theminimum of: background of the company;organisational structure of the company;details and list of shareholders of thecompany; vision statement; missionstatement; targeted low income groups andservice providers; expected volume ofbusiness; IT tools and its relevance to thebusiness; investment, accounting, MISreporting etc; corporate governance; etc.

By ROSEMARY ONUOHA

Wapic appointsnew managingdirector

The Board of Directors ofWapic Insurance Plc has

appointed Mr. Ashish Desai asthe new Managing Director/Chief Executive Officer whowill oversee the next phase ofWapic’s growth and evolution.

In a statement, Desai is aqualified actuary with over twodecades experience in theinsurance industry in SouthAfrica, India and the UnitedKingdom.

Desai is a Fellow of theInstitute of Actuaries (UK) aswell as the Actuarial Society ofSouth Africa and Institute ofActuaries India. He holds aFirst Class Degree inEconomics and Econometricsfrom Manchester Universityand is an alumnus of theWharton School, University ofPennsylvania. Prior to joiningWapic Insurance Plc. He wasan Executive and ManagingDirector of Hollard Life &Investments, a subsidiary ofHollard Insurance Group aSouth African privately ownedinsurance group.

This appointment follows theresignation of Mr. SegunBalogun who resigned asManaging Director of WapicInsurance Plc. effectiveNovember 30, 2013.

Law union claimsrose by 22% in2012 — Ogunseye

Law Union & RockInsurance Plc has said

that the claims it paid to itspolicyholders rose by 22.8%from N1.27 billion in 2011 toN1.558 billion in 2012financial period.

Managing Director of thefirm, Mrs. Toyin Ogunseye,said that the company wascommitted to claims paymentbecause that is its purpose ofbeing in business.

A breakdown of the claimspaid revealed that fireinsurance was the highestwith a figure of N581m,followed by motor insuranceat N529.99m. The firm paidN161m on claims thatemanated from generalaccident, N130.3m on marine& aviation insurance,N101.14m on engineeringpolicy while N77m was paidon oil & gas insurance policy.

The firm also revealed thatit paid N1.2m to claims whichemanated from bonds, theportfolio that recorded theleast claims. All claims paidwere to Law Union & RockInsurance’s policyholdersfrom different parts of thecountry.


Micro-Finance

Stories byPROVIDENCE OBUH

“A truth that’s told with badintent beats all the lies you caninvent.” William Blake, 1757-1827.

(VANGUARD BOOK OFQUOTATIONS p 254).

For two weeks, the RiversState Governor, Rotimi

Amaechi, had been carrying ona one-governor crusade withrespect to what he calls,“Missing $5b from the ExcessCrude Account, ECA”. He wasquoted in The NATION, onSunday, November 24, 2013,as saying that the ECA wasbeing managed “like a piggybank.” As it turned out, Amae-chi was both original, right andwrong. But, more wrong thanright. What was right was notoriginal. What was not origi-nal was wrong.

It requires no greatintelligence to notice thatAmaechi’s newfound positionis informed by his new positionas an outsider to the innercaucus of the ruling party, thePDP. When he was a solid partyinsider, he never questionedthe ECA; neither did he everdispute the disbursementsmade from it by the FederalGovernment. That is why the“truth” he now dispenses istainted with malice and beatsall the lies which can beinvented. And Amaechi, in hisindictment of the Federal Gov-ernment, on this matter, hadbeen very, very economicalwith the truth. Let me quicklyexplain.

The ECA is an illegal ac-

Needless controversy over$5b eca withdrawalcount, for which there is noprovision in our constitution. Tothe best of my knowledge, therehas been no amendment to theconstitution which allowed forany revenue to be divertedfrom the Federation Account,which must be sharedaccording to agreed formulaamong the three tiers ofgovernment. It was PresidentOlusegun Obasanjo, this sameMinister of Finance, DrOkonjo-Iweala and the PDP-dominated National Assemblywho created ECA, in order tomanage it “like a piggy bank”– as Amaechi rightly called it.The ECA predated Amaechi asgovernor and he admitted thathe was aware of its existenceand he even admitted that thegovernors were privy to thesharing of $1 billion from this“piggy bank”.

Therein lies the insincerityassociated with the governor’sposition. It is a fact, absolutelyindisputable, that the 36governors and the President ofNigeria, dishohourably aidedby the National Assembly, donot constitute a constitutionreview commission known toour laws. They are notempowered, individually, orcollectively, to create an accountwhich the constitution forbids.

But, Nigeria is a lawless coun-try and the worst outlaws arethose who swore to uphold ourconstitution only to reach officeand proceed to violate thoseparts of it which they find in-convenient. Without anyrespect to Amaechi and theother 35 governors, what theyhave accomplished was toconnive with the FederalGovernment to rob theNigerian people andAmaechi’s objections nowappear like the outcries of onemember of a robbery gang whofeels he had been short-changed. He is not an honest

defender of probity or even thedue process he claims had beenviolated.

Governors like Amaechi hadcontributed to the weakeningof the principles of a federalrepublic, when it served theirpurpose, and are now drawingattention to violations whichhad taken place since 2004 –because it now serves theirpolitical purpose of wanting topaint the Jonathan administra-tion black. Unfortunately, forthose like me, who had beencampaigning against the cre-ation of this rogue account,Amaechi’s participation in

sharing from the accountpaints him just as black. Whatone expects him to do now isto move to close down theaccount permanently. TheFederal Government cannot betrusted, and at any rate is notrequired to help states andlocal governments to save theirmoney against the rainy day.Who, for instance decideswhen the “rainy day” hadarrived for any state, is it theFederal Government or the oth-er 35 governors? The entireposition is not only unconsti-tutional, it is absurd.

Furthermore, Amaechi’sobvious denial of knowledge ofwithdrawal from the ECA mustcome as surprise to Nigerianswho read newspapers everydayand who can recollect accountsof meeting of the FinanceCommissioners of the statesand the Federal Minister ofState for Finance. Reproducedbelow is a graph which accom-panied my article on this pagein October this year, titled: ForPublic Servants; the Party isover.

From the graph, it was obvi-ous that only in one month,June, had crude oil revenuereached or exceeded project-ed revenue. September resultswere also below expectations.Thus, for seven months, theFederal Government had beendipping into the Excess CrudeAccount to augment the short-fall.

MONTHLY PROJECTED REVENUE ANDACTUALS – 2013(JANUARY – JULY)

PROJECTIONS: 863702

621571

595 621 590

498

JAN FEB MAR APR MAY JUN JUL

The Micro, Small andMedium Enterprises,

under the auspices ofAssociation of MicroEntrepreneurs of Nigeria(AMEN), has decried itsinability to participate at 2013Economic Community of WestAfrican States, ECOWAS tradefair, held in Togo, blaming it onfinance. Recall that theassociation was selected by theNigeria Export PromotionCouncil, NEPC to represent thecountry. Speaking at a businessforum/ inauguration of AMENCooperative, PresidentAMEN, Prince Saviour Iche,described the ongoingsubmission of businessproposals to the Bank ofIndustry (BOI) through

A Non Governmental Organisation(NGO), Lights on Foundation, has

donated a block of seven toilet rooms and watersystem to Aviara Secondary CommercialSchool, Aviara, Isoko-South Local GovernmentArea of Delta State. The facilities donated bythe foundation to the community was aimed atdeveloping the educational environment thatwill further boost learning conditions.

Speaking at the commissioning ceremony,Founder of the foundation, Mr. Austin EpadiIgbuku said that the foundation aim atpromoting education, urging students of the

MSMEs decry inability to participate2013 ECOWAS trade fair

SMEDAN as a welcomedevelopment, saying, “ but ourmembers may not be able toaccess the fund due tostringent requirements andconditions attached to it. Weare proposing to meet themanagement for the wayforward.

“The ECOWAS Trade Fair inTogo, which the associationwas selected by NEPC torepresent Nigeria wascanceled due to lack of fund tofinance members. The issue offinance to meet the associationneeds must be critically lookedinto and ways to solve theproblem must be mapped out.

Highlighting furtherchallenge, he bemoaned thelevies collected by governmentagencies from its members,noting that it is affectingturnover and if not checked

could hamper expansion.He added that the cost of

obtaining documents neededfor product registration is veryhigh in Nigeria, “the relevantgovernment agencies shouldconsider the beginners whenmaking policies.”

A three year over view of theyear under review, show thatfrom 2011 to 2013, the numberof police cases involvingmembers reduced from 15 tothree, trademark registrationincreased from 10 to 40,NAFDAC registration from five

to 30, meeting with agenciesimproved from one to 18,among others. “Since theinception of AMEN, we haveawaken the consciousness ofNigerians to own a businessaimed at generatingemployment for the youths.Our slogan and vision of onefamily, one product and serviceis impacting positively on theyoung Nigerians as we can seethe number of fresh graduatesjoining the association on dailybasis,” he said.

Foundation commissions facilities for Delta schooltwelve participating communities to study hardas the foundation gives scholarship award toany student who secures admission into theuniversity during the year. Commissioning thefacilities, Chief Inspector of Education (CIE)of the state’s local government, Mrs Useh,stated that it is good to give back to society toenhance development, commending thefounder and promoter of the foundation forsupporting education. Useh called on theindigent of the community to emulate the goodworks of the foundation and come up withschemes aim at developing their communities.


CMYK

Business Unusual

The goal of theSustainability Initiative,

according to ProfessorMargee Ensign, President ofAUN, "is to spur local econom-ic development by providinghands-on training for localpeople while at the same timeprotecting and enhancing thenatural environment, thuspreserving it for futuregenerations. So ProfessorCharles Reith, Director ofSustainability, came up withthe idea of making bricksusing empty plastic bottles.

“This is actually somethingthat I put together to build aneco-bench so I soughtpermission to have the studentsbuild the bench. My overallbudget was N4,000," said theProfessor of EnvironmentalScience.

Under normal circumstances,a plastic bottle has a very shortservice life but when it is re-used, as in the case of eco-

Uncommon housingmaterial for all

By EBELE ORAKPO

To many Nigerians, the dream of owning their own houses is a pipedream given the harsh economic realities of our time. But the Officeof Sustainability of the American University of Nigeria (AUN) in

Yola, Adamawa State seems to have found a way to make the dream realwith their unusual, cheap and environment-friendly building materials.

In this chat with Financial Vanguard in Yola, Professor Charles Reith,Interim Provost & Director of Sustainability Initiatives and Mr DahiruAdamu, Head of Water Resources Unit, Works & Maintenance Depart-ment spoke on the project and its impact on the environment. Today, wefeature AUN’s eco-bricks, said to be more durable than normal bricks.Reith noted that the University is saving about N600,000 monthly in wastedisposal. Excerpts:

bricks, it lasts much longer.Making eco-bricks:“The process involves filling

empty plastic bottles with sand.You really have to pack the sandin and once you do, it is muchmore durable than a brick; itwill last a really, really long

time because it is plastic andnon-biodegradable (cannot bedecomposed by micro-organisms), it has better tensilestrength, it is more durable andlonger lived. A bottle can befilled with sand in 45 seconds,"said Reith, adding that eco-

bricks can be used to makemuch more cost-effectivehouses, walls, benches etc.,which can last a very long time.

From constructing benches,the students went on to costructwalls using eco-bricks.

Mr Dahiru Adamu went a

step further. He put up an impres-sive self-contained apartment us-ing eco-bricks and other waste ma-terials.

Speaking with Financial Van-guard, Adamu said the projectcost him about N380,000 which cov-ered "the cost of toilet fittings, ce-ment used in plastering and chick-en net used to partition the wall,labour for masons, painters andeco-builders. I paid the eco-build-ers just feeding allowance since itis a program I designed to trainyouths," said Adamu.

Asked why he used thatch forroofing, Adamu said: "I used thatchfor three reasons: It is affordableand can be sourced free; the weath-er in Yola is hot and thatch has theability to make the rooms cool andsince it is my private property, Iam creating a village setting formy family."

“Most of the eco-bricks are filledwith sand, so they areopaque. However, one can fillthem with something clear such asground glass and they will betranslucent. The translucent brickswill let light pass through, whichwill give the room a more airyfeeling than if no extra light wereto be getting in,” noted Reith.

Impact on environment:“The essence of recycling is that

you are creating jobs to replaceactivities that otherwise relybasically on natural resources,”said Reith.

For Prof. Ensign,"It is not justcleaning our environment, butcreating income for those with-out jobs. That is Social Entrepre-neurship in practice.”

*Structure being put up with eco-bricks at theSustainability Unit of AUN. Inset is Profes-sor Charles Reith, Director of Sustainability.

The goal of the Sus-tainability Initiativeis to spur local eco-nomic development...while at the sametime protecting andenhancing the natu-ral environment

*The completed eco-bricks house equipped with modern facilities*Eco-bricks house under construction.

,

,


CMYK

Appointment & Promotion

Time Tell Nigeria Limitedhas launched two of its

products; Fruit of the Loom(FOL) United States ofAmerica and Grant ofLondon (GOL)wristwatches in Nigeria.The two brands wereunveiled in Ibadan, Oyo, byOyo State Governor, AbiolaAjimobi, at a ceremony thatincluded performances bydancing groups from OyoState.

Both brands were said tohave endured throughyears of creative

United Bank for Africa(UBA) Plc, the pan-

African financial servicesgroup , has announced theappointment new Chairmanand Vice Chairman of itsBoard of Directors.

They are Ambassador JoeKeshi and Rose AdaOkwechime.

A statement by Mr.Charles Aigbe, DivisionalHead, Marketing &Corporate RelationsDirectorate, said “AmbassadorKeshi was appointed to theBoard of UBA in 2010 and wasmade Vice Chairman onJanuary 1, 2011.

He has over 35 yearsworking experience at thehighest levels of governmentas a career diplomat, servingas Permanent Secretary,Ministry of Foreign Affairs,Permanent Secretary, CabinetSecretariat, The Presidency,Charge d’Affaires, Embassy ofNigeria, The Hague,Netherlands and Consul-General of Nigeria, Atlanta,Georgia.

According to the statement,Ambassador Keshi’sappointment followed theretirement of Chief IsraelOgbue, a member of the UBABoard since 2005 andChairman since January 1,2011.

“It has been a pleasureserving the Bank. I haveworked with a group of men

UBA appoints Keshi, OkwechimeBoard Chairman, Vice-Chairman

and women who have beenresponsible for forging anextraordinary transformationin Nigerian and Africanbanking. Ambassador Keshi isan admirable choice to leadthe Bank in its next growthphase” said Chief Ogbue.Similarly, Mrs Okwechime isthe Managing Director of theAbbey Building Society Plcand has played a leadingrole in financial services forover 20 years, including timespent with the Bank ofE n g l a n d .Both appointments took effectfrom November 21, 2013.

Speaking on hisappointment, AmbassadorKeshi said “I am touched thatmy fellow board membershave asked me to chair theBoard. Chief Ogbue hasraised the bar on governance,transparency and businessgrowth. We will sustain thestrong governance and riskmanagement structures inplace and maintain themomentum of our pan-Africangrowth strategy ”.Phillips Oduoza, UBA’s ChiefExecutive, speaking onbehalf of the executivemanagement said,

The Nigerian Institute ofM a n a g e m e n t

(Chartered), has elected newofficers to run its affairs for thenext two years.

Dr. Nelson Uwaga, aconsultant Pharmacist and analumnus of National Institutefor Policy and StrategicStudies, Kuru, emerged as the19thPresident and Chairmanof Council of the Institute.

NIM elects president,other officers

Until his election, hewas the Deputy President

of the institute.Also elected were Prof.

Munzali Jubril, a formerExecutive Secretary of theNational UniversitiesCommission and a universitydon, and Mr. Grant Orugbani,

a seasoned ManagementConsultant as DeputyPresident and NationalTreasurer respectively.

Uwaga, who has beenserving the Institute invarious capacities since

2003 holds a Bachelor ofPharmacy Degree (B.Pharm)University of Nigeria (UNN),Doctor of Pharmacy degree(Pharm. D) from theUniversity of Benin, and aMaster of BusinessAdministration (MBA) fromthe University of Port-Harcourt, with over 30 yearsof professional andmanagerial experiences.

A holder of the Fellowshipsof the Pharmaceutical Society

of Nigeria (FPSN) and theWest African Post-graduateCollege of Pharmacists(FPCPharm), he is a formerNational President of thePharmaceutical Society ofNigeria (PSN) and one time3rd World Representative(Community Pharmacy) at theInternational PharmaceuticalFederation (FIP)at TheHague, Netherlands.

At other times he has beenthe National Chairman,Nigerian Association ofGeneral Practice Pharmacists(NAGPP) also a former VicePresident of Association ofProfessional Bodies ofNigeria (APBN).

Apart from being the currentChairman, Faculty ofCommunity Pharmacy of theWest African Post-graduateCollege of Pharmacists and amember of the Court ofExaminers, Dr. Uwaga is alsoa Senior Lecturer (Adjunct) atthe Faculty of Pharmacy,University of Port Harcourt.

Director-General of theConsumer Protection

Council, CPC, MrsCatherine Atoki, hasreceived the award of GusiPeace Prize InternationalFoundation, the Asiancounterpart of the NobelPeace Prize.The CPC Director Generalwas given the award at 13th edition in Manila, Philippines.

Atoki who got the Award of the Human Rights Advocacycategory, by virtue of her advocacy on human rights in theAfrican Union, AU, alongside 14 others, spent the last twoyears as the Chairperson of the Commission, making herthe first Nigerian to head an AU organ.

The 14 others who were conferred with the award werethe President of Mauritus, Rajkeswur Purryag, formerRomanian President, Professor Emil Constantinescu, formerPresident of Estonia, Arnold Ruutel, former Sudanese PrimeMinister, Imam Al-Saddiq Abdel Rahman Al-Mahdi andthe Chairman of Arab Thought Foundation and Governorof Mecca, Prince Banda Khalid bin Faisal Al Saud of SaudiArabia.

Others included Professor Raoul Weiler from Belgium,who clinched the Award for Science & Technology(Engineering), Mr. Jerome Binde of France (literature),Professor Abdelmadjid Amrani of Algeria (Philosophy) andArchitect Yolanda David Reyes of Philippines, who got theAward in the architecture category.

The ceremony was presided over by the Chairman of theGusi Peace Prize International Foundation, AmbassadorBarry Gusi and witnessed by several other dignitariesincluding the Nigerian embassy staff in the Philippinesand the Nigerian community in the Philippines led byAmbassador Yemi Farounbi.

CPC DG getspeace award

A Nigerian youth, Mr.Ahmad Adamu has

been elected FirstChairperson of the newlycreated Commonwealth YouthCouncil, CYC, the largest andmost diverse youthorganization in the world.

Adamu who contested theposition against three othercontestants from UnitedKingdom, Botswana, andCameroon would be the firstyouth to hold such positionamong the CommonwealthNations.

Representing more than 1.2billion young people of the Commonwealth, Adamu-ledcouncil will provide a framework for youth-leddevelopment initiatives.

Adamu, a graduate of Bayero University Kano is fromKastina State and will serve a two-year term until thenext Council General Assembly in Malta in 2015.

Adamu elected 1st CYC Chairperson

Nigerian firm unveils FOL, GOLcraftsmanship unique to theUK and the Americanmarket.

Abdulkadir, said her“company holds thefranchise for both brands inWest Africa”, while sayingthat the “Fruit of the Loomclothing is one of the world’smost recognised clothingbrands loved and trusted bypeople all over the world”,she noted that it had over160 years’ experience and along history ofmanufacturing of qualitytextiles.

36 — Vanguard, MONDAY,DECEMBER 16, 2013

Tax Matters

Merger is defined as“any amalgamation of

the undertakings or any partof the undertakings orinterest of two or morecompanies or theundertakings or part of theundertakings of one or morecompanies and one or morebodies corporate”. Simply put,a merger is a combination orintegration of existingcompanies to form a singlecompany.

Acquisition on the otherhand, is known as take-over.It is the take-over of by onecompany of sufficient share inanother company to give theacquiring company controlover that other company.

Statutory Requirementunder Companies Income TaxAct (CITA)

The CITA in Section 29(12)Cap (21, LFN, 2004) providesthat “no merger, take-over,transfer or restructuring of thetrade or business carried onby a company shall take placewithout having obtained theService’s direction under sub-section 9 of this section andclearance with respect to anytax that may be due andpayable under the CapitalGains Tax Act”. Theimplication of this provision isthat the approval of theFederal Inland RevenueService is a necessarycondition for the completionof the process in a merger oracquisition bid. Therefore, nomerger or acquisition bidswould be fully consummatedwithout the companiesinvolved having obtainedconsent from the FIRS.

Procedure for Obtaining theService’s Approval

From the start, the merging

,

,in order to ensure that taxeswhich may result from thecompanies’ transactions arecorrectly assessed andcollected. Herein lies therelevance of the Service’spowers under section 29(9) (i)to require either of thecompanies directly affected byany direction which is underthe consideration of theService to guarantee or givesecurity to its satisfaction forpayment in full of all tax dueor to become due by thecompany which is selling ortransferring such asset orbusiness.

Tax Issues inMergers andAcquisitions

A merger may result in anyof the following situations:Formation of a new company.Continuation of theconsolidated business by one

and the company beingacquired.

Emergence of a NewCompany, Rendition ofAnnual Returns

Where a new companyemerges from a mergerprocess, then, the newcompany is expected to file itsreturns, in line with theprovisions of Section 55(3)(b)of CITA. The section providesthat “every new companyshall file with the Service, itsaudited accounts and returnswithin eighteen (18) monthsfrom the date of itsincorporation or not later thansix (6) months after the endof its first accounting periodas defined in section 29(3) ofthis Act, whichever is earlier”.It should however beunderstood that a merechange of name does notmake an existing businessentity a new company. Suchcompanies will continue to be

treated as old businesses onan on-going concern basis.

Basis of AssessmentCommencement rule as

provided under Section 29(3)will apply to the newcompany, except where any ofthe under-listedcircumstances arise:

Where the merging partiesare connected parties, theService may direct thatcommencement rule be setaside, in which case, the newcompany will file its returnsas an on-going concern andits assessment will bedetermined on preceding yearbasis.

Where the new business isa reconstituted company,taking over the trade orbusiness formerly run by itsforeign parent company.

Claim of AllowancesCompanies Income Tax Act

(CITA) did not categoricallyaddress the value at whichassets may be transferred forthe purpose of capitalallowances claims. However,International AccountingStandard 22 prescribes that inmerger accounting, theassets, liabilities and reservesmust be recorded at theircarrying balances, implyingthat merger process does notpermit the recording of assetsat their fair value in the eventof consolidation. The newcompany will therefore not beentitled to any investmentallowance claim or initialallowance on the transferredassets; it will only be entitledto claim annual allowance onthe Tax Written Down Values(TWDV) of the transferredassets.

Unabsorbed Losses and Un-Utilized Capital AllowancesBrought Forward

The new company may alsonot be permitted to inherit theunabsorbed losses and capitalallowances of the absorbedcompanies, except under thefollowing circumstance:

where a reconstitutedcompany is carrying on thesame business previouslycarried on by this companyand it is proved that the losseshave not been allowed againstany assessable profits orincome of that company forany such year; in that case theamount of unabsorbed lossesshall be deemed to be a lossincurred by the re-constitutedcompany in its trade orbusiness during the year ofassessment in which thebusiness commenced.

Taxes andDeductibility ofRelated ExpensesStamp Duties

Duty payment will arise onthe share capital of the newcompany, subject to theprovisions of Section 104 ofthe Stamp Duties Act, in

companies are required tosubmit to the FIRS, copies ofthe scheme of merger andscheme of arrangement on theconsolidation request for itsstudy and proper evaluation

of the merging parties, in itsname or under a new name.Cessation of business by theother merging parties.

In acquisition, there is onlyan acquiring company (ies)

relation to capital and dutyrelief.

Consolidated ExpensesFees paid to statutory bodies

such as SEC, NSE, CBN,Land Authorities etc,including professionals likeaccountants, stockbrokers,issuing houses, and solicitorsare regarded as capital innature and will therefore notbe allowed as deductibleexpenses by virtue of Section27(a) of CITA.

Taxation of ConsolidationFees:

Fees paid to professionalsfor services rendered inconnection with consolidationwill be subject to VAT andWHT at the rates of 5% and10% respectively.

Tax IndemnificationSection 29(9)(i) of CITA

provides that the Service mayrequire the new company toguarantee or give security forpayment in full, for any taxdue or that may become dueby any of the ceasedcompanies.

Approval for PensionScheme The new companywill need to obtain a Joint TaxBoard (JTB) approval for itsstaff pension scheme.

Status of a SurvivingCompany in Relation toTaxation

It is a possibility that one ofthe merging companiessurvives and its old name ora new name to inherit theassets, liabilities, reservesand entire operations of themerging parties. Where thishappens, the following pointsmust be noted:

The surviving company mustfile its returns in line with theprovisions of section 55(3)(a)of CITA. Commencementrules under section 29(3) ofCITA will not apply to thesurviving company, as it willbe regarded as an existingcompany.

The surviving company willnot be allowed to claiminvestment allowance on theassets which were transferredto it and will also not claiminitial allowance on suchassets.

The surviving company mayhowever claim annualallowance only on the taxWritten down Values (TWDV)of the assets transferred to it.The surviving company maynot inherit the unabsorbedlosses and capital allowancesof the merging companies,except it is proved that thenew business is areconstituted company.

All fees payable on mergerbids or consolidation will beliable to VAT and WHT justlike it is applicable on theemergence of a new company.Stamp duties will be paid onthe increase in share capitaland the company will have toobtain its own staff pensionscheme approval from theJTB.

Tax implication ofmergers and acquisitions

General Manager/ Human Resources Bristow Helicopter Mr. Femi Collins, Principal ii Wes-ley primary school, Mr. Solomon Adeoye, Principal 1 Wesley primary school and, Mr. AlimiKehinde at the commissioning of 14 computers & internet powered solar system donated byBristow Helicopters.

The surviving company mustfile its returns in line with theprovisions of section 55(3)(a)of CITA, commencement rulesunder section 29(3) of CITAwill not apply to the survivingcompany, as it will beregarded as an existingcompany

Vanguard, MONDAY,DECEMBER 16, 2013 — 37

CMYK


Agric

Smallholder farmers needinstitutional support — Ademokun

Tomi Mercy Ademokun isan expert in public

health, internationaldevelopment, andcampaigns and advocacy,with over 10 years ofexperience, including sixyears workinginternationally. Currently, Tomi is theAssociate Country Director/GROW Campaign Managerfor OXFAM GB in Nigeria.The GROW campaign isdedicated to overcomingpoverty and injustice andworks with partners inNigeria in order to achieveimpact and improvement inthe lives of people, especiallywomen family farmers, onthe issues relating toagriculture, food security,trade and climate change. In this interview withJIMOH BABATUNDE inLagos during the OxfamGrow Campaign, she talksabout the role of smallholder farmers inagriculture and why theyneed access to information aswell as the need to advocatefor the realisation of the 10%budgetary allocation toagriculture in Nigeria.Here is an excerpt:

On Oxfam and agricultureWe work with small scale

farmers in Nigeria and ourmission in Nigeria and acrossthe world is to eliminatepoverty and injustice and toensure we have a good foodsystem where everybody hasenough food to eat.

On smallholder farmersfeeding the nation

The smallholder farmershave the capacity to feed thenation, because if you look atall the sectors in Nigeria,agriculture is still the secondleading sector after oil andgas in GDP. However, thereis a lot of gap in the system.

Over 80 per cent ofNigeria’s food is produced bysmall-scale farmers, of whom

60-79 per cent are women.These farmers work on smallplots of land and rely onrainfall for irrigation. Despiteseveral policies beingdesigned to improve thechances of small farmers,there is a fundamental gapbetween policy intentions andtheir implementation. Thisgap affects many areas ofagricultural life includingaccess to credit, markets andland security.

We really need to campaignto government to keep theirpromise to transform thesector. Right now, we havethe AgricultureTransformation Agenda (ATA)by the ministry which is reallygood.

We also have the Maputopledge, where thegovernment promised todedicate 10 per cent of thenational budget to agriculture,but the current budget toagriculture is about two percent, so we need to ensurethat 2014 budget is increasednot just in quantity but thequality of those investments.

We also need to ensure thatthose investments get downto the state and localgovernment levels, where thesmall-scale farmers needthem.

If you look at our farmerstoday, a lot of them are ageingso we need a new generationof farmers and that is why weneed to transform agriculturemanagement and look at it asa thriving business where theyouth can come in.

There are lots of equipmentand technology for the youthin the business and this isone of the reasons we aregetting celebrities asambassadors to try to changethe myth and stereotype of oldfashioned ways of doingthings.

On whether the youth willtake up farming as it is notyet practised as business

The system is broken, if you

want to practise it as abusiness, how will you getaccess to loans to start thebusiness as a lot of thebanking institutions do notgive loans to farmers becausethey believe it is high riskbusiness, so we need tomake sure that we workwith the government andpartner with the CentralBank of Nigeria.

The CBN actually hasan agric loan scheme,however, there is a lotof gaps as lots of thesmall holder farmersstill don’t have accessto it, it is the mediumand large scale farmersthat are accessingthose loans and otherschemes.

What do we meanby the gap betweenthe intention andimplementation? A goodexample is the NigeriaIncentive-Based Risk SharingSystem for AgriculturalLending (NIRSAL), whichwas introduced in 2012 inorder to improve smallfarmers’ access to credit. Theconcept sounded good onpaper, but in practice, smallholder farmers could not meetthe stringent loan conditionswhose prevailing interest rateof 20 per cent made them nomore accessible thancommercial loans.

We need to advocate to thegovernment to ensure thatthey make those schemesavailable to youngentrepreneurs that want tocome into agriculture.

On whether thesmallholder farmers haveinformation on how to accessloan

A lot of that is lack ofinformation as most of ourfarmers are not literate, so itis hard for them to reallyhave access to informationthat they need, informationon how to link up across thevalue chain, how to link upto the market and how totransport their produce to themarket.

So, access to information iskey, so that is where we comein at Oxfam and other localcivil society organisations aswell as the media so as tomake our smallholder farmersand female food heroeschampions of change. Wherethey can say I am a farmer, Ineed to improve mylivelihood, I need to make mybusiness thrive and improveit.

On the success story ofgetting women into farming

Women are already infarming for years as 70 percent of our smallholderfarmers are women, but a lotof them don’t have access toresources. A lot of womenfarmers don’t own the land,they farm on family ownedland or rented land fromgovernment, but they don’thave land ownership, theydon’t understand how tomarket, if they sell they don’tknow to do so at marketablerate.

So, we are teaching themthose skills where they canlearn, so access to informationis key to the women farmersespecially those that don’thave access to information.We are breaking theinformation down to the levelthey will understand.

Most of the lobby we do, wepartner with radio stations,we make sure our ourmaterials are broken downinto pidgin and lot of the locallanguages they canunderstand.

On aggregating thesmallholder farmers into abody

We are actually workingwith Association of Smallscale Agric Producers inNigeria. It is a coalition. Theyhave a coalition called TheVoices of Food SecurityCoalition that has about 17other farmer group. Theyhave registered over 800farmers across 17 states inNigeria.

They are trying to scale upas they are working with theministries of agriculture toensure that all farmers areregistered in the ministries’data base. So we work withcoalitions of different partnersas we believe the power of thepeople is the power of peopleuniting by coming together tomake the change.

On getting Nigeria tohonour the Maputodeclaration

It comes to partnership. Weneed to spread the word, weneed to advocate and provethat increased investment inagriculture can actually makethe economy of Nigeria betterand eliminate poverty. It canactually help the country tobe food secured as a hungryman is an angry man.

So when you don’t haveaccess to food, there is lot ofviolence, a lot of thingshappen, so we can make surethat we lobby and partnerwith various media outlets toensure that in the 2014 budgetformation, we ensure toremind them of the promiseand say look, 10 years agoyou made a pledge inMaputo, we need to honourthe pledge.

On post-harvest lossWe are working with local

institutions and with thegovernment to address that,and also not just on post-harvest loss but storage andwhen you talk of climatechange like the flooding thathappened last year, there wasno storage system wherethere was food, instead the

*Tomi Ademokun flanked by Tuface, one of the three current GROWNigeria Ambassadors and Safiya Akau during the Press briefing onthe Oxfam Grow Campaign in Lagos recently.

Tomi MercyAdemokun


Advertising, Media& Marketing

Stories byPRINCEWILL EKWUJURU

Osun refocuses for servicedelivery, increases IGR

All over the world,organisations in both

private and public sectors drawbudget to attain specific goalsand objectives.

While budgeting in theprivate sector is market driven,and profit oriented, the contraryis the case in the public sector.

The public sector is resourceconstrained as it is fundedmostly by taxation.

Hence government at variouslevels often ensure that budgetis well prepared in advance inorder to render service to thepeople particularly in ademocratic dispensation wherecitizens expect so much fromelected leaders.

“Budget” as the nameimplies, “is a plan, quantifiedin monetary terms, preparedand approved prior to a definedperiod of time, usually showingplanned income to begenerated and/or expenditureto be incurred during thatperiod and the capital to beemployed to attain a givenobjective.”

In Osun State, which is aforward looking brand, the artof budget making has beentaken to greater heights.

Osun State under theleadership of Ogbeni RaufAregbesola has not onlytouched lives, but with theexecution and implementationof its six point agenda, it hasalso turned the economy of thestate around.

The Internally GeneratedRevenue (IGR) under theAregbesola regime increased

by 100 percent. Yet this was achievedwithout necessarily foisting a higher taxregime on the people.

According to Dr. Wale Bolorunduro,Commissioner for Finance, EconomicPlanning and Budget, who spoke at aworkshop held for civil servants in thestate, “The approach we adopted was toplug loopholes and stop the lossesincurred through manual collection andmanual processing.

Reckitt Benckiser NigeriaLimited, a health and

homecare productsmanufacturer has added anew variant, Dettol Re-energize to the Dettol soapbrand range. The new soapcombines a citrus fragrancewith the Dettol germprotection function.

Speaking at the tradelaunch in Lagos, theMarketing Manager,Personal Care, Mr. AhmedShah, disclosed that theDettol brand has recordedtremendous growth since itsintroduction to the Nigerianmarket 50 years ago.

He said, “In the last fiveyears, the brand has achieved216 percent growth in its

Reckitt Benckiser deepens marketpresence with Dettol Re-energize

market share and is now present in 63million households in Nigeria, whichmeans one out of every threehouseholds in Nigeria uses Dettol”.

On the philosophy behind the newvariant, he explained that Dettol Re-energize was a product of innovationand intensive research into consumers’want and preference, saying “Ourresearch has shown that consumerswant a soap that has pleasant fragranceand ability to refresh them. This is whywe have introduced a Dettol soapvariant with a pleasant long lastingorange fragrance that refreshes andalso gives them protection againstgerms.”

He further revealed that Dettol wasable to triple its market share becauseit has adopted the right market strategyof building consumers’ trust andconfidence in the brand.

The Group ManagingDirector of Primlaks

Group, parent company ofVenus Processing andPackaging Limited, VPPL,producers of Sympli range ofIndividually Quick Frozen,IQF, Mr. Anil Hemnani, hassaid the products will offerNigeria a huge revenueearning opportunity.

Sympli products will earn Nigeria huge revenue opportunityHemnani made this

disclosure at the launch of theproducts in Lagos, where hesaid: “Apart fromencouraging more people toembrace Nigerian foods, webelieve that our efforts, in thelong run will help to createmore direct and indirectemployment opportunities inthe agricultural sector in line

with the objectives of the FederalGovernment’s AgriculturalTransformation Agenda.

Speaking further, he stated that thecompany introduced the Sympli brandof products to meet the demands ofcustomers for convenience because,“we observed that the business ofliving in today’s fast-paced worldmake people to place a premium ontheir time.”

From left: AbdulKarim Chukkol, Head, Advance Fee Fraud Section, Economic & Financial CrimeCommission, EFCC; Mr. Goddie Ofose, Chairman, Brand Journalists Association of Nigeria, BJAN;Mrs. Bunmi Oke, President AAAN, and Mr. Yemisi Fadairo, Special Assistant to Ogun State governoron Information, at the 2013 Annual Conference and Award of BJAN in Ogun State. PHOTO BYAKEEM SALAU.

So much of what we call management consists inmaking it difficult for people to work.” You know

who said so. Peter Drucker. But if you think he didn’tknow what he was talking about, you only need toexperience the helplessness of some frontlineemployees before customers.

Frontline employees are, sometimes, unable todeliver excellent service because their managers claimto know how best to serve customers. And to provetheir knowledge, they come up with brilliant rulesthat emasculate their frontline people. Let’s consideran example.

A prospect wanted to open a savings account in aNigerian bank (let’s withhold the name of the bankfor now). After completing the account opening forms,she was told her company identity card was notadequate to identify her and that she should producea PHCN bill to authenticate her address. She wasalso told that only a national ID card, an internationalpassport or a driver’s licence was an acceptable meansof identification. All for a mere savings account! Inannoyance, the prospect left.

Less than a kilometre away, she stepped into thebranch of another bank. The difference was clear, asthey say. The customer service executive on duty notonly completed the account opening form for thecustomer, but also accepted the corporate ID card asa means of identification. In addition, she didn’t askfor any utility bill – after all, even children (who payno utility bills) can open savings accounts. The onlyseeming downside was that the opening balance wastwice that of the other bank. But the customer washappy to make the extra deposit.

This story illustrates what happens when managersof a business decide to operate by thick unfriendlyrule books that make no room for the discretion of theintelligent beings on the frontline. In an article titled“Zombies in Civilian Dress” which was published inThe Guardian of 24 September, 2009, Kola Akomolede,narrated his ordeal in the hands of frontlineemployees of an embassy and an internet serviceprovider – both of whom insisted that, to be served,the customer must produce documents that wereeither unavailable or obviously irrelevant.

How could anyone produce a PHCN bill if he wason the pre-paid platform? Akomolede blamedmanagers for the actions of their subordinates. And Ithink he is right.

Managers have a responsibility to ensure thatpolicies that relate to serving customers are appliedwith discretion. Such policies must be relevant andnecessary. For instance, it doesn’t make sense to insistthat a self-employed person bring a letter from hisemployers in order to obtain a visa, or that a customerget the approval of his account officer before movingfunds between his two accounts within the bank. Afterall, he is not asking for a loan.

Have you noticed that if you have to do a simplereplacement of your SIM card at any of the servicecentres run by the telecom companies, you need toprovide an acceptable form of identification, no matterhow long you have been a customer? Although thenetworks have our biometric data and pictures, theystill treat everyone like a stranger. Recently, Ichallenged a telecom customer service rep to use thedata on her system. Her tame response: “We haven’tstarted using the data yet to process customer issues.”You wonder, when will they ever start?

If you manage a business or a section of it, I suggestyou urgently review your policies to make sure theystill serve the needs of customers. Some rules thatwere useful in the past may no longer be relevanttoday. Why apply anachronistic rules to your service?

Wanted: Customer-friendly Rules

“


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

Omoh Gabriel - Group Business EditorBabajide Komolafe - Ag. Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentMichael Eboh - Energy ReporterFranklin Alli - Industry/Agric. ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime ReporterRosemary Onuoha - Insurance Reporter

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

Business & Economy

O U R T E A M

,

,

We have regrettablyremained loyal, as a

country, to a culture of latebudget approval and partialimplementation annually. Indeed, since the beginningof our civil dispensation, nofiscal plan received legislativeapproval and presidentialassent before December 31.

Curiously, despite the proxyassurances of the FinanceMinister, Dr. Okonjo-Iweala,over two years ago, PresidentGoodluck Jonathan, incontrast, has invariably failedto lay annual budgets beforethe Legislature well before theend of each year, so as toaccommodate exhaustiveparliamentary debate andconsensus before legislativeapproval and presidentialassent to the fiscal bill. Inevitably, therefore, latepassage of the appropriationbill has often made fullimplementation of the capitalbudget impossible, while theusually bloated recurrentexpenditure is converselyalways fully consumed.

Sadly, President GoodluckJonathan has yet to lay the2014 budget before theNational Assembly as atDecember 14, 2013.

The main bone of contentionin this instant is the FederalExecutive’s proposed $75/barrel crude oil budget price;while the Senate has endorseda slightly higher benchmarkof $76.5, the House ofRepresentatives, in contrast,has insisted that the budgetbenchmark should not fallbelow $79/barrel.

In view of this apparentstalemate, it is pertinent toevaluate the basis for thedisparate crude oil pricebenchmarks proposed by theExecutive and Legislaturerespectively, particularly sincecrude oil accounts for over70% of budgeted annualrevenue.

Senate’s ill-advised $76.5crude oil benchmark

Indeed, the FederalExecutive, in suggesting abenchmark of $75/barrel, mayappear altruistic, as theirargument is based on the fearthat eventual political stabilityin the Middle East andincreasing patronage of shaleoil in the United States andCanada would ultimatelyreduce demand for crude andconsequently induce lowerprices in the internationalmarket.

This argument for aconservative benchmark mayappear sensible and cautiouson the surface, but theproposal may not clearly standup to closer scrutiny, as arealistic and progressiveoption! The Lower Housemaintains for example, thatthe fear of a drastic drop incrude prices is inconsistentwith actual historicalevidence; indeed, except fora brief spell in 2008, theinternational crude oil pricehardly fell below the usuallyclearly contrived low budgetbenchmarks below $74, asprices steadily remainedbuoyant above $90/barrel.

Besides, industry expertshave suggested that shale oilmay not become such a strongcompetitor to crude for at leastanother decade, whileindustrial growth in China,India and other emergingeconomies should continue topush demand for crude oil.

Consequently, the House ofReps maintains that it makesno sense to set a conservativebenchmark, which wouldtechnically reduce projectedrevenue, and also constrictfunds available for urgentinfrastructural enhancement.

Curiously, the Senate’sproposed $76.5/barrel wouldexpectedly lead to revenueshortfall of about N1tn that willinevitably require to be fundedby borrowing at double-digitinterest rates in the 2014budget. Furthermore, theLower House observes,however, that such a hugebudget deficit and the need tocommit to such costly debtswould become totallyunnecessary, if the crudebenchmark was conversely setmuch higher at $79/barrel.

Indeed, the CBN’s andDMO’s total component ofnational debt currently

contractors and othercreditors; the amount does notalso include the over N5.7tn($34bn) incurred by AMCONin its takeover of toxic debtsin the banking sector.

In recent years, despite thecontrived ghost deficits, whichnecessitated borrowing atdouble-digit interest rates,inexplicably, over the years,we simultaneouslyconsolidated an averagerevenue surplus of over $10bnannually from crude oil soldat prices well-abovegovernment’s conservativebenchmarks. So, in the lightof the above, the big question

rightly consider such wastefuland antisocial spending asfiscal irresponsibility.

In this event, the Senatewould need to urgentlysalvage their image by quicklyproffering a more solidargument on why, despite theabove reality, they continue tosupport a much lower andcertainly inappropriate crudeoil benchmark with itsattendant debt-inducingcollateral, which wouldcompound and add over N2tn($12bn) in three years to thecurrent total debt level of aboutN14tn (about $85bn).

The above discussion doesnot suggest that the $79/barrelrecommended by the LowerHouse is the most appropriateor realistic crude pricebenchmark; indeed, in view ofthe heavy debt level, theappropriate budgetbenchmark for a responsibleadministration should be thatprice, at which budgets willbecome balanced for theduration of the 2014/16MTEF. In other words, theguiding factor of the budgetmust be the urgent need toensure that, in view of thehigh cost of servicing theexisting oppressive debts, itwill be socially insensitive tofurther increase our debtburden by even one kobo inthe next three years. Thismeans that, we may onlycommit to additional debt, ifagainst the odds, crude pricesfall below approvedbenchmarks. It makes nosense to borrow to fund adeficit that is ultimately non-existent.

Consequently, the absenceof government’s erstwhilehumongous borrowings willreduce the crowding out effectof the real sector in the capitalmarket and thereby facilitatethe real sector ’s access tocheaper funds for industrialconsolidation and increasingemployment opportunities.

exceeds $50bn, according tothe Finance Minister; most ofthe debt burden attractsdouble-digit interest rates,and service charges alonewould gulp over N700bn,about 15 per cent of budgetedrevenue, in 2014.

Curiously, most of thesedebts were incurred to fundthe huge deficits, whichbecame necessary as a resultof the clearly inappropriatelylow crude price budgetbenchmarks (note that theabove debt value does notinclude the fresh debt of aboutN400bn (about $2.5bn) owedby the erstwhile PHCN to

is why would the FederalExecutive and the Senateknowingly commit Nigeriansto an increasing debt burdendespite the available surplusidle cash.

It definitely also smacks ofdeceit and recklessmisappropriation to alsoconsume the funds borrowedto fund the inappropriatelyprojected ghost deficitsannually, and thereafter alsoconsume the eventual surplusfunds in the so-called ExcessCrude Account with nothingto show for it. Thehonourable members of theHouse of Representatives

This argument for aconservative benchmark mayappear sensible and cautious onthe surface, but the proposalmay not clearly stand up tocloser scrutiny, as a realistic andprogressive option

Malicious allegation ofsexual intimidation of

teachers, students, financialimpropriety leveled against theout going Director General, ofWest African InsuranceInstitute (WAII) based inBanjul, The Gambia, ProfessorMike Ikupolati is said to havebeen orchestrated by someelements in the Banjul basedregional institute who want himout by all means. According toa statement, there is no iota oftruth in the allegations.

The revelation came on theheels of the just concludedgoverning council’s meeting

WAII governing council refutesallegations against Ikupolati

held during the West AfricanInsurance Association’smeeting held in Lagosrecently.

According to the statement, atthe governing council level,investigations conductedproved that there has been noevidence to show that Ikupolatihad at any point in timeharassed his female staffersand student of sex as nobodyhad come out to testify againsthim. He was also found not tohave misappropriated theinstitute’s fund throughout histwelve year tenure in office,according to financial records

available.The malicious allegations

were said to have been borneout of boardroom intrigues,petty jealousy and malignorchestrated by fewunscrupulous elementstargeting at an innocent officialin the chambers of 35 years oldWest Africa Insurance Institute(WAII).

This unfortunate incidentmay lead to the demise of theBanjul based institute, thedevelopment that has forcedthe dogged head of mission,Professor Mike Ikupolati whohas put in so much for the

survival of the regionalinsurance institution to stepaside recently.

His exit, according to report

is also having a negative effecton the institute as the academicactivities back in Gambia havescuttled.

financial vanguard

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