Naira devaluation hits industries hard

CMYK

JUNE 22, 2015

Continues on page 22

COMPANIES in themanufacturing sector of theeconomy that source foreign

exchange to import raw materials andproducts have been hit hard by thedevaluation of the naira and thesuspension of Retail Dutch AuctionSystem (RDAS) by the Central Bankof Nigeria (CBN).

At the interbank foreign exchangemarket, the exchange rate of the nairato a dollar is N196.9 while in the blackmarket it hovers between N210 toN214 to a dollar. Similarly, BritishPound Sterling exchanges betweenN303 to N304 to the Naira, while thed

AGM - From left: Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar N. Onyema, OON; President, NSEMr. Aigboje Aig-Imoukhuede, CON and Secretary to NSE Council, Ms Tinuade Awe at the Nigerian Stock Exchange2015 Annual General Meeting in Lagos.

FG’s plan to create 3 million jobs annually under threat — MANLCCI demands zero import duty for critical raw materials

By FRANKLIN ALLI Euro exchanges for N222.Investigations by Financial

Vanguard, showed that the high

exchange rate occasioned by thesuspension of RDAS policy, has wipedsmiles off the faces of operators in thesector since it was implemented by theapex bank in February to tightencontrol on the foreign exchangemarket, in a bid to protect the nation'sexternal reserves and save the Nairafrom further slide in value.

Dr. Frank Udemba Jacobs, Presidentof Manufacturers Association ofNigeria, MAN, noted that the impactis enormous on all manufacturers,especially those that depend onimported raw materials.

According to him, the FederalGovernment's plan to create threemillion jobs annually will be a mirage

if the current exchange rate is notaddressed quickly. He urged FederalGovernment through the CBN tocreate a special foreign exchangewindow for manufacturers.

In addition, he requested the CBNto examine manufacturers’ forexdemand trends to ascertain the actualneed of each company for theimportation of machines, spare partsand raw materials. He assured thatMAN will validate beneficiaries toensure that only bonafidemanufacturers have access to suchspecial foreign exchange window.

Also, Mr. Okey Akpa, the Chairman,Executive Committee ofPharmaceutical Manufacturers Groupof MAN, disclosed that the negativeeffects of the CBN policy of RDAShave started to trickle down to theentire pharmaceutical industry. Hesaid companies operating in the sectorare spending so much on importationof pharmaceutical glass bottles andpackaging materials that are notavailable locally. He said this has ledto further increase in the cost ofproduction.

According to the Chairman of UnitedAllied Spare parts Dealers Association(UASPADA), Chief BartholomewAchukwu, his members are alsoadversely affected. “Today theproblem is dollar issue, all ourbusinesses are collapsing. We areexpecting President MuhammaduBuhari to address this issue as it ishampering growth in trade. Going byhis antecedent, we believe that theeconomy of Nigeria will soon bebetter than any other countryaround the world,” he said.

Mrs. Olaitan Efughi, ChiefExecutive Officer , Annabel Boutique also lamented that operators in thesector are also feeling the negativeeffects of the foreign exchangetransactions. “I buy my goods fromDubai and Hong Kong, and I sellmainly to retailers and others whobuy for personal use. But foreignexchange is a problem; most banksdon’t sell BTA for people who go toDubai for business, apart from that,there is a limit of the amount ofmoney that the bank allows, you arenot to spend more than $4000 perquarter, so basically, you have themoney, but you can’t really buy much,”

CBN shouldexaminemanufacturers’forex demandtrends toascertain theactual needsof eachcompany

Naira devaluationhits industries hard

CMYK

22 — Vanguard, MONDAY, JUNE 22, 2015

Cover

Continued from page 21

Albert Einstein oncedefined insanity as

doing the same thing over andover and expecting differentresults, while the Frenchclassical author, Francois de laRochefoucauld said ‘ the onlything constant in life ischange’.

This paper stresses theimportance ofentrepreneurship educationtowards enhancingsustainable development inNigeria. The problems facingthe country ranging from highrate of poverty, youth andgraduate unemployment;overdependence on foreigngoods and technology; Loweconomic growth anddevelopment; among others.This paper therefore arguesthat entrepreneurshipeducation will equip thestudents with the skills withwhich to be self-reliant. Theobjectives and strategies for re-designing entrepreneurshipeducation are also discussed.The paper also recommendedthat educational programmesat all levels of education shouldbe made relevant to providethe youth the neededentrepreneurial skills. It is alsorecommended that thegovernment should giveadequate attention toentrepreneurial developmentin the country through theprovision of good economicenvironment.

So it is on this premise Iwould like us to see theNigerian educational system inlight of current realities in the21st century. A careful look ofthe current state of affairs inNigeria reveals that we are ina 21st century economy with a19th century education system.A system whereby muchemphasis is still placed on theconventional classroomenvironment with muchreverence for certificate forgraduates who in most casesare trained to be job seekers asevidenced in present highunemployment rate in theland. However, we must acceptthe fact that times havechanged and we must adjustby transiting from the old styledera of Adam Smith inspiredconcept of the ‘industrializedspecialist’ which has outlivedits usefulness to a moredynamic, resourceful and I.C.Tbased model where skills andcreativity takes precedence.

Entrepreneurial Education Revolution:An Imperative for SustainableDevelopment in Nigeria: Part 1

Without deviating from thetopic of my speech which isEntrepreneurial EducationRevolution in Nigeria, I wouldlike to briefly define some ofthe concept in the topic.

WHO IS ANENREPRENEUR?

An entrepreneur is a personwho is driven to establish abusiness to take advantage ofthe financial opportunities andpersonal fulfilment offered, bypursuing their own dreams andshaping their own destiny inlocal, national and globaleconomies. I personally definean entrepreneur as anyonewho can convert what he lovesdoing to a moneymakingventure. Entrepreneurship onthe other hand is said to be theprocess of planning, operatingand assuming the risk of abusiness. It has also been seenas a process of creating aunique value. For the purposeof this speech, I would belimiting education to theactivity of teaching about aparticular subject.

Revolution on the other handhas been defined by TheMacmillan English dictionaryas a sudden or major change,especially in ideas or methods.A revolution signifies a drasticturn around, a new way ofthinking and acting.

So at this juncture, what thenis Entrepreneurial Education?Entrepreneurial education isa lifelong learning process,starting as early as elementaryschool and progressingthrough all levels of education,including adult education. Entrepreneurial educationfocuses on developingunderstanding and capacity forpursuit, of entrepreneurialbehaviours, skills andattributes in widely differentcontexts. It can be portrayed asopen to all and not exclusivelythe domain of the high-flyinggrowth-seeking businessperson. The propensity tobehave entrepreneurially is notexclusive to certainindividuals. Differentindividuals will have a differentmix of capabilities fordemonstrating and acquiringentrepreneurial behaviours,skills and attributes. Thesebehaviours can be practiced,developed and learned; henceit is important to expose allstudents to entrepreneurialeducation.

she stated.Alhaji Remi Bello, President

of the Lagos Chamber ofCommerce and Industry,LCCI, also added that highexchange rates is a majorchallenge currently facingmany real sector operators,especially the medium andlarge firms.

According to him, thechamber has reviewed thepolicy and observed thatalthough it was targeted atproviding support for the realsector of the economy becauseof their strategic importance tothe development process, jobcreation and inclusive growth,yet the sector is the firstnatural victim of the closure,particularly the few that hadaccess to this window.

He identified the immediateimplications on the sector asfollows: “It has resulted inthe escalation of productioncost for firms that had accessto this forex window. Suchfirms will experience costincreases of up to 20percent. This would impacton sales performance, profitmargins and ultimatelycapacity utilisation ofmanufacturing companies inthe country.

"Import duty and otherport charges which arecomputed as a percentage ofimport costs have alsocorrespondingly increased.This implies additionalpressure on operating costsfor erstwhile beneficiaries ofthe CBN RDAS forex window.Firms funding requirementsin naira will increase toreflect the new exchange rateand this has implications forcost of funds.

Naira devaluation hitsindustries hard

“Many firms, especiallymanufacturers with highforeign exchange exposurehave been thrown into losspositions as a consequence ofthe depreciation of the nairaover the last couple of monthsand the eventual closure ofthe RDAS window.

“Exchange rate inducedlosses could trigger a newwave of Non-PerformingLoans in the banking systemand this has implications forfinancial system stability.However, given the recorddisparity between the CBNRDAS forex window; theinterbank and the parallelmarket rates, it was clear thatthe RDAS Forex window wasnot sustainable. The CBNcould obviously not meet thehuge demand for forex underthe RDAS window.

"In spite of repeatedassurances, many genuinerequests for forex forindustrial raw materials andother vital inputs were deniedby the CBN. Foreignfinancial obligations couldalso not be met by many firmsas remittances were affected. This resulted in seriousconfidence issues amongforeign creditors of Nigeriancompanies with some creditlines to Nigeria companies

being put on hold. “The huge premium of over

20 per cent was a majorincentive for round tripping,corrupt practices in themanagement of the forex,speculative activities in theforeign exchange market andmany other abuses. It wasalso a major source ofuncertainty and volatility inthe market. There wereconcerns about the lack of levelplaying field in themanagement of the RDASwindow. In the light of allthese, it is difficult to fault thedecision of the CBN to closethe RDAS window."

Meanwhile, the LCCI hasproposed measures tocushion the effect of the CBNpolicy on investors with highforeign exchange exposure. It said that CBN shouldurgently provide arefinancing facility as life-linefor investors in the economywhich have high foreignexchange exposure.

“The sustainability of thisclass of businesses is currentlyat risk. We recommend aminimum refinancing facilityof N200 billion to be providedat single digit interest rateand a fifteen year tenure. Allcritical raw materials andother imported inputs ofmanufacturing firms shouldhenceforth attract zero importduty. All machineries andequipment should attract zeroimport duty.

"Port charges should bewaived for raw materialsimportation andmachineries. All these arenecessary to minimizedislocations in the economyand ensure the continuedsurvival of the real sector,”the chamber stated.

Port chargesshould bewaived forraw materialsimportationandmachineries

PRESENTATION - From left: Mr. Tunde Akerele, Chief Finance Officer, Proton Energy; Dr.Sam Amadi, Executive Chairman, Nigeria Electricity Regulatory Commission (NERC); Mr.Oti Ikomi, Executive Vice-Chairman, Proton Energy; and Mr. Mark Fancett, Proton EnergyAdviser, a t t he presentation of 150mw licence to Proton Energy by NERC in Abuja

Vanguard, MONDAY, JUNE 22, 2015 — 23

Business& Economy

CMYK

The new chairman of theGovernors' Forum said: “Wedecided not to talk of thebailout directly, though theproblem we observe is not onlya state matter. It is a nationalmatter. Some federal agenciesare being owed for sevenmonths and above. TheFederal Government cannotdo it alone because of thedwindling economy.

"So, instead of requesting forthe bailout, because we haveto make sure that the FederalGovernment has liquidity, butwhere will the FederalGovernment find the liquidity?It is sending a very wrongsignal that the states areasking for bailout and we allknow that the economy of thecountry is in a very bad shape.

"So, instead of sending a badsignal and aware of theimplications, we are askingthe Federal Government topay the states for the FederalGovernment jobs that havebeen executed by the states."We would be asking theFederal Government to settlethe backlog owed the states.The Federal Governmentowes some states N10 billion,N20 billion, N30 billion andLagos State, N50 billion. So, ifwe can get back some of thismoney, we can settle some ofthe backlog of wages andsalaries."

The situation facing states atthe moment is self inflicted.State governors had theopportunity to develop theirlocal economies and grow theirinternal revenue generation.But many of these stategovernors prefer to rely onallocation from the federationaccount. For too long, theNigerian economy has livedon rentals. The economy

Governors: No bailoutcoming from anywhere

Governors of the 36 states of the federation rose from a meeting in Abuja lastweek Wednesday, resolving to meet President Muhammadu Buhari on the

financial crisis crippling the affairs of some states in the federation. According to thechairman of the Governors’ Forum, Abdulazeez Yari, the governors viewed thefinancial crisis facing the states as national issue as there are also FederalGovernment agencies that owe salaries for upward of seven to eight months.

operated on rents from oilexport. It is a pity that no stategovernment has developed itsinternal resources to the pointthat it can stand on its ownwithout federal allocation.

While the oil boom lasted, nogovernment functionary inthese states was ready to puton a thinking cap that a day willcome when rent on oil will dryup.

While the rents accruing fromoil lasted, governors were livinglike lords of the manor. Theyflew and hired private jets,moved around in fleets ofvehicles and kept chains ofaides. Some were busy usingstate resources to marry for theirchildren and themselves. Theyhosted lavish parties. Themoney they should haveinvested in projects that wouldhave brought future returns tostates was wasted on frivolities.Some of these governors builtmansions with state money inthe name of Governor’s Lodgein several locations in theirstates to meet theirostentatious lifestyle.

These are monies that couldhave been used for income-yielding ventures. Some ofthese governors have investedtheir state's money in privatecompanies which they havedishonestly converted to theirpersonal use. Such propertiesnow that the chickens havecome home to roost, should besold and the money realisedfrom them used to offset

whatever debt is outstanding justas the new governor of AkwaIbom is trying to do to theprivate jet his predecessoracquired with state moneyinstead of going cap-in-hand tobeg the Federal Government fora bailout.

In Akwa Ibom for instance, theformer Governor bought aprivate jet for the state, built afootball stadium that may only beused once in a year. The jetsowned by state governments areparked and maintained withstate funds. The question is;why should a state own a privatejet?

Akwa Ibom State governor,Emmanuel with his private sectorbackground is said to beunfavourably disposed to theprivate jet acquired by hispredecessor, Godswill Akpabioto ease his movement outside thestate and is contemplating

disposing of the aircraft.The governor is said to be

shopping for buyers of the jetto relieve him of the burden offuelling and maintaining it.Akwa Ibom is not the only statewith a private jet, DanbabaSuntai of Taraba had even goneto the extent of not onlyowning a private jet but flyingone himself.

It is heart-warming that thestate governors are aware thatthe Federal Government itselfis cash strapped and cannothelp itself or bail out the states.

The Federal Governmentshould tell these shamelessstate governors in unequivocalterms that it will not now or inthe future bail out any state.They should be told to go backto their states and straighten uptheir finances. In fact, theFederal Government shouldbegin to make allocation tostates based on accountability.States must account for themoney they get from thefederation account monthly andthey should be made to publishtheir annual statements ofaccount. They should not justbe collecting money and notgive proper account for it. Everystate must publish its accountas well as every localgovernment. This is the kind ofchange the APC governmentand legislature should bringabout in the country.

A survey has shown thatNigerian politicians, especiallystate governors, deliberately

involve themselves in flagrantand ostentatious expenditure asa way to show off their class,without the knowledge thattheir action is responsible forthe underdevelopment of theeconomy.

Many governors are richerand more powerful than somepresidents around the world.In the states, governors are thebeginning and end of allwisdom. The governor is thestate and the state was createdfor his good pleasure. Theymay occasionally try anddisplay some decorum intreating the state’s funds asbelonging to the citizens, butdon’t be fooled.

Much of that fund is theirpocket money literally. In somestates, the SURE-P fund forinstance, is essentially thegovernor’s chop money.

Security votes and ecologicalfunds belong to this categorytoo. No two governors are alikethough every state gets thegovernor it deserves.

Nigerian governors are themasters of their universe, thelords of their manor andconquerors of their realms.They are capable of beingdictatorial, democratic,benevolent, malevolent,difficult, simple, matured andchildish all at once. They are tough,calculating and ingenious inmaneuvering the turbulenceassociated with that unique office.

Now that the financial situationin states is precarious, stategovernors should come off theirhigh horses and face reality. Theyshould cut down on their frivolitiesand spend the state resources onwhat is necessary. Time is now foraltruistic service. There is no bailoutfrom anywhere.

TRADE MISSION - From left: Chief Fola Osibo, Chairman,Export Committee, Nigerian British Chamber of Commerce(NBCC); Mr. Hassan Mohammed Hassan, Minister of Industry,Trade & Investment, Nigeria High Commission, London; PrinceDapo Adelegan, Deputy President NBCC/ Mission Leader andMr. James Houston, Chairman, NBCC-UK Network at theNigeria House at the ongoing Export Trade Mission to theUK.

Leading internationalcommunica t i ons

consultancy Hill+KnowltonStrategies has expanded itsphysical footprint in Africawith the launch of a new officein Lagos, Nigeria.

Hill+Knowlton StrategiesNigeria builds on thecompany’s existing strongpresence in Sub-SaharanAfrica and further extends theagency’s ability to serve itsrapidly expanding clientinterests in African countriesin a fully integrated way. TheHill+Knowlton Strategiesglobal network consists of

Hill+Knowlton Strategies debuts in NigeriaBy SEBASTINE OBASI some 88 offices, including key

African markets such asEgypt, Ghana, Kenya,Rwanda, South Africa,Tanzania, and Uganda.

Hill+Knowlton’s entry intoNigeria is said to reflect arecognition of the vasteconomic and commercialpotential of the West Africancountry, which sits among thetop five investment countriesin Africa, and which has seena surge in capital inflows intothe market.

Additional streams forinvestment have also openedup, with the establishment offledgling economic sectors inthe Nigerian market. Thegrowth in investment and

funding for domesticcompanies, as well as anincrease in Foreign DirectInvestment (FDI) and jointventures in the country, hascreated an attractive platformfor H+K from which to growand develop its client base.

“Global businesses with long-term growth strategies arefocusing on the Africancontinent,” said Lars Erik,Chairman and CEO ofHill+Knowlton Strategies,Europe, the Middle East andAfrica.

“Nigeria has the largesteconomy in Africa, as well as apopulation of 170 millionpeople which is expected toexpand to 200 million by 2019.

FederalGovernmentshould tell theseshamelessgovernors inunequivocalterms that itwill not bail outany state


CMYK

Business & Economy

The Federal Court ofAppeal, Lagos, has

adjourned a case between theNigerian Shippers’ Council(NSC) and the SeaportsTerminal Operators Associationof Nigeria (STOAN), over portcharges, till Feb. 4, 2016.

The Presiding Judge, MrsUzoamaka Anyanwu, said thatthe court adjourned the case asa result of the backlog ofpending cases the court had tohandle.

STOAN had earlier filed a

ANNIVERSARY - From left: Mr. Fidelis Ajibogun, Zonal Coordinator, National LotteryRegulatory Commission; Mr. Abdullahi Ibrahim, Group Executive, Technology and Services,FirstBank, Mr. Adolphus Ekpe, Director-General, National Lottery Regulatory Commission;and Mr. Henry Uwadiae, Deputy Director, National Lottery Regulatory Commission at a courtesyvisit by the National Lottery Regulatory Commission to FirstBank in commemoration of the10th Anniversary of the Commission.

Port charges: Court adjourns Shippers’Council, terminal operators’ hearing

suit against the NSC overrestriction of increase in

progressive storage chargesand reversal to what obtainedin May 2009. The suit wasstruck out on technical groundsby Justice Ibrahim Buba of theFederal High Court, Lagos.The court in December 2014,consequently upheld the statusof the NSC as the economicregulator of the seaports.Justice Buba also orderedSTOAN and Association ofShipping Lines Agencies(ASLA) to revert to the variouscharges as obtained in 2009

and, as directed by the NSC.The court ordered ASLA and

STOAN to refund excessrevenue made from 2009 todate to the Cargo DefenseFund. Meanwhile, counsel tothe second defendant, theShippers’ Association LagosState (SALS), Mr OsualaNwagbara, said he would beglad if the date of hearing wasbrought forward. Nwagbarasaid his client was sufferingbecause STOAN and ASLAwere still collecting thecharges.

Counsel to the NSC, MrEmeka Akabogu, expresseddissatisfaction with the longadjournment, saying that hewould meet his client (NSC) onthe next step to take.

Akabogu said the counsel tothe Appellant (STOAN), MrFemi Atoyebi, failed to file theappellant’s brief as ordered bythe court since the lastadjournment.

“We are not satisfied with thelong adjournment, we aregoing to meet with our clienton the steps we are going totake,” the lawyer said. Akabogunoted that the case was anurgent national matter and itdeserved outmost urgency bythe court.

However, counsel to ASLA,Mr Chidi Ilogu said the courtwas not ready to take the matterbecause it had a crowded listof cases. “It is because of thecircumstances. We do not havea choice than to accept thatdate,” Ilogu said.

Philips Innovations NigeriaLimited, providers of personal

health and lighting solutionsbusinesses of Royal Philips of theNetherlands, has decried the over 50percent faking of its products inNigeria, saying that world-wide crossborder trade in physical counterfeitingalone, cost the global economy $250billion yearly.

To this end, Philips Nigeria hasannounced plans to kick-off acampaign known as “Buy Original”which had already started in Kenyasince October 2014 and will moveacross West Africa during June 2015to combat the menace.

Speaking at a media briefing inLagos, General Manager, PersonalHealth, Philips West Africa, Mrs.Chioma Iwuchukwu-Nweke, said that,Counterfeiting is designed to mislead

Global economy loses $250bn yearly tofake products — Philips

By PROVIDENCE OBUH the public and all who are involved inbuying and selling the product in orderto make easy money by free riding onthe reputation of others, “In Nigeriaand other countries, a number ofPhilips lamps (lighting products) soldare counterfeits. Cheap componentsfound in the counterfeit lamps, suchas the driver which regulates electricalvoltage, cause the lamp to fail wellbefore its stated lifetime. Also, it canprove to be a hazard because of thepoor construction. Counterfeits aretherefore dangerous to consumers.”

She disclosed that the companywould be introducing innovativehologram security stickers for lamps,providing a 16 digit code validationcode for all Philips Lighting products,as well as the “original” sticker for theirconsumer lifestyle and lightingproducts to enable consumers to easilyand instantaneously identify originals.

Iwuchukwu-Nweke said, “For allPhilips consumer appliances and

Philips AVENT baby products, Philipsis introducing a hologram sticker onpackaging so that consumers canidentify authentic products. It is hard topinpoint where the fake product orpackaging is originally made, where theshipment originates, and who isresponsible for exporting the product.

“While there are no reliable industrywide statistics on the number of productsthat are counterfeits; from marketfeedback we receive, we know that thisissue is very severe. Philips wants towork alongside consumers, governmentauthorities, other MNCs and relevantorganizations to see how we cancollaborate together to enlighten andinform the consumers on matters relatingto counterfeiting.

We urge the public to become morevigilant and question products that seemto be unusually cheap, appear poorlymade, or have generic packaging;especially when shopping at moretraditional trade stores.

37 shipsexpected inLagos

Thirty seven ships ladenwith petroleum products,

food items and othercommodities are expected toarrive in Apapa and Tin-CanIsland ports in Lagos, fromJune 18 to June 30.

The Nigerian Ports Authority(NPA) disclosed this in itsdaily publication, ‘ShippingPosition’, made available tonewsmen in Lagos.

According to the document,the contents of the expectedships are petrol, kerosene,diesel, bulk urea, fresh fish,steel products, bulk wheat,bulk sugar and ethanol.

It said that other vesselswould arrive with generalcargo, buthane gas andcontainers.

The document explainedthat nine ships with petrol,aviation fuel, crude palm oil,rice, fish and general cargoare waiting to berth at theports. 23 other ships hadarrived the ports dischargingbulk wheat, fertiliser, base oil,rice, general cargo, fresh fish,gypsum, base oil, petrol anddiesel.

CBN calls meetingwith banks on FX rulesCentral bank has called a

meeting with chiefexecutives and treasurers ofcommercial banks to discussissues surrounding its policyon the foreign exchangemarket, multiple bankingsources told Reuters.

The central bank imposedtight controls on the foreignexchange market in Februaryto curb speculation on thenaira and save its dwindlingforeign reserves in Africa’sbiggest economy.

Before setting therestrictions, the central bankhad been battling to prop upthe naira after a sharp fall inthe price of oil, Nigeria’s mainexport, which triggered a sell-off in assets by foreigninvestors.

The central bank also fixedthe rate at which banks canbuy dollars from oilcompanies.

Traders were upbeat on theoutcome of the meeting whichthey claimed was longoverdue to ease the tightcontrol in the market andallow the local currency to findits real value.

“We are anticipating that themeeting would naturallydiscuss the present marketconditions and explorepossibility of reviewing thetight control on the forexmarket,” one senior treasurertold Reuters.

The court inDecember 2014upheld the statusof the NSC as theeconomicregulator of theseaports


Business & Economy

Bilfinger SE, a minorityshareholder with a

holding of 33.4 per cent inJulius Berger Nigeria Plc(JBN) has expressed itsdecision to divest its stake toNigerian investors.

In a statement, theconstruction giant saidBillfinger has notified theBoard of Julius Berger of itsdecision to dispose of itsremaining stake in JBN tolong term Nigerian investorson or before the end of June2015

JBN states that this proposedtransaction will lead to the exitof the representative ofBilfinger SE from the Board ofJBN. The Company addedthat the decision is based onBilfinger ’s strategicrealignment from aconstruction company to anengineering and servicesgroup in the last decade whichsaw Bilfinger SE divest totallyfrom its construction activities.

The Board of Julius BergerNigeria Plc and the ExecutiveManagement stronglybelieves that the exit ofBilfinger SE will not impact onJBN in view of the strategicbusiness directions beingundertaken by the Board andManagement of the Companywhich would sustain andincrease JBN’s efficiency andresponsiveness as well as setbasis for a future of longlasting success. The

Billfinger divests 33.4% stake in Julius BergerBy FAVOUR NNABUGWU

conglomerate at its 45th

Annual General Meeting forthe year ended December 31,2014 held in Abuja onWednesday, announced awhopping N196 billionincome. The company’srevenue for the period underreview stood at N196 billionfrom N212 billion recorded in2013, representing a loss of7.49 per cent. Profit before taxalso dropped to N13.134billion from N16.220 billionposted in the previous years

while its profit after taxationincreased to N8.239 billion

in 2014 from N7.853 billionannounced in 2013representing 4.92 percentrise. The company offered adividend of 270 kobo perordinary share of 50 koboeach in the sum of N3.564billion to its shareholderswhile its Shareholders’ fundsrose to N26.095 billion in2014 from N21.034 billion in2013 while earning per sharewent down by 8.81 percentfrom N6.72 in 2013 to N6.13in the year underconsideration.

Dangote Cement Plc hasset plans in motion to

open N78.4 billion ($400million) factory with a 2 millionmetric tonnes in Nepal, Asiabefore the next 30 months.While awaiting all regulatoryapprovals required to start theconstruction of a cement factoryin the south Asian nation, AlikoDangote, says the company hasreceived 90 per cent of theregulatory approvals tocommence operation by end of2017. “It’s going to be one ofthe first factories for us to buildoutside our comfort zone,outside Africa,”

Dangote, who has nevervisited Nepal, will invest $400million in the country to build acement plant with a capacity ofas much as 2 million metrictons. He’s also eyeing SouthAmerica and surveying forlimestone in Brazil, where heregistered a company two yearsago. Nepal’s governmentestimates reconstruction costsfrom April’s quake, which killedthousands, alone will exceed$10 billion, even before thecountry was hit by a separate7.3 magnitude temblor lastmonth. “It will be a major boostfor them, especially with whathappened,” Dangote said.“They don’t produce cement atthe moment, they import mainlyfrom India.”

There is room for Dangote tomove into Nepal, said AndyGboka, a fund manager atBellevue Asset ManagementAG, which manages more than$5 billion and holds DangoteCement shares.

“There is not enoughproduction capacity andunfortunately you saw whathappened with the earthquakeand the infrastructure that wasdamaged,” Gboka said byphone from Zurich. “Eventhough this is coming from anegative event, there is a stronggrowth story in the Nepalregion.” The tycoon, with a networth of $15.4 billion accordingto the Bloomberg BillionairesIndex, has made the vastmajority of his fortune in Africancement production. He also hasinterests including sugar andmore recently oil refineries inNigeria.

Dangote’s charity gave $1million to Nepal’s governmentafter the deadly earthquakes.He said he has made more than20 billion naira ($100 million)of donations in more than twoyears, mainly in Africancountries such as Nigeria,Niger, Kenya, Tanzania andEbola-hit nations in West Africa.

Dangote to openN78.4bn cementfactory in AsiaBy FAVOUR NNABUGWU

The Central Bank of Nigeria(CBN), has said that Africans

have the capacity to drive thecontinent’s economic integration,growth and development rather thanrelying entirely on foreign investors.

Commenting on the Dangote’s 2.5million metric tonnes cement plantestablished recently in Ethiopia, theGovernor of CBN, Godwin Emefiele,said the recent expansion drive ofAlhaji Aliko Dangote confirms thatAfricans has the capacity to drive thecontinent’s economy integration,growth and development rather thandepend almost entirely on foreigninvestors, especially at a time when theregional economy of sub-SaharanAfrican and the economy of many ofthe constituents countries seem to beslowing down due to the impact ofglobal shocks.

“I must commend Dangote cement forits expansion projects. The trust of theevent is undeniably momentous for theentire Africa continent particularly asit underscores the importance of

Africans able to drive economic integration, growth – CBN

By NAOMI UZOR fostering intra Africa investments.Africa must first and foremost invest

in Africa. We need to promote asymbolic and mutually beneficial flowof direct investment within thecontinent” he said.

He noted that the plant wasundertaken at a cost of about $600million and it is arguably the singlelargest investment in Ethiopia by anAfrican entrepreneur, adding that, hebelieves that the investment will boosterintra-regional trade, deepen financialmarket, create wealth, reduce povertyand unemployment and ultimatelyengender gross domestic product inEthiopia with particular effectsthroughout the sub region.

For this, he said, Nigerians are veryproud of Alhaji Dangote, anentrepreneur who is a patriotic Africanand a true ambassador of Nigeria.

The President/ Chief Executive,Dangote Group, Aliko Dangote, saidthe company’s decision to set up themultimillion dollar plant in Ethiopiawas informed by the enablingenvironment the government ofEthiopia had in place for investors andthat this favorable investment makes

Ethiopia attractive to foreign investors.“The government has made

remarkable progress and hassuperintended a period of significantand inclusive economic growth that hasseen official Gross Domestic Product(GDP) growth rates of Ethiopiasurpassing 10 per cent, over the pastdecade, with a projection of 10.6 percent in 2015.”

“This makes Ethiopia the largesteconomy by GDP in East and CentralAfrica. The government is alsoinvesting massively in several large-scale infrastructure projects, includingconstruction of the continent’s largesthydropower dam. All these makeEthiopia a beautiful bride to investors”he said. He said he believes thatmanufacturing, and not trading, is thebest way to grow an economy, and thatapart from cement production, they arealso investing substantially in othersectors of the economy such asagriculture, oil and gas refinery,fertilizer and petrochemicals and in all,they have 13 subsidiaries in Nigeriaand are investing about $16 billionbetween now and 2018, in new projectsand existing plants.

The decision isbased onBilfinger’sstrategicrealignment froma constructioncompany to anengineering andservices group

AGM: From left, HRH Igwe Peter Nwokike Anugwu discussing with former Managing Direc-tor of Julius Berger, Engr. Wolfgang Goetsch during the 45th AGM of Julius Berger Plc inAbuja. Photo by Gbemiga Olamikan.


Corporate Finance

The Chief ExecutiveOfficer of Lead Capital

Plc, Prince AbimbolaOlashore, has said that tounlock opportunities inNigeria’s real estate market,the financial sector has to bereformed, fair bankingpractices have to be adoptedand better supervision has tobe focused on.

He explained that this willalso stabilise prices in thelong run and help to utilisethe 17 million deficits in thereal estate market whichrepresents a hugeopportunity.

Olashore, stated thisduring a paper presentationon “Unlocking theOpportunities in the NigerianResidential Real Estatemarket: The Investor ’sPerspective” at a forumrecently organised by LekkiGardens Estate Investment inLagos.

According to him, theopportunities inherent in thesector lies in the fact thatthere’s an increasingpopulation growth in whichmore than 80 per cent ofNigerians live in settlementsand demand for housing farexceeds the supply.

His words “Opportunities inthe real estate financing canbe seen from the increasingpopulation growth, rapidurbanisation and the growthof the middle class havespurred demand for real

Stanbic IBTC topublish names of loandefaultersStanbic IBTC, the local

unit of South Africa’sStandard Bank in response todirective of the apex bank,Central Bank of Nigeria (CBN)will make public list of loandefaulters.

Stanbic IBTC would beamong the first banks topublish such a list after theregulator directed banks inApril to go after non-performing loans to forestalla repeat of a 2009 industrybailout that cost thegovernment $4 billion.

The new plan requires banksto give bad debtors threemonths to square theiraccounts, following which theywould be named in Nigerianmedia and barred from takingpart in currency andgovernment debt markets inAfrica’s biggest economy.

An online publication quotedthat Stanbic, in a statement saidthat in addition to publishinga list of defaulters by the endof August, it would also uselegal and other means torecover non-performingloans.

LBSAA holdsPresident’s dinner tofete alumni

Alumni of Lagos BusinessSchool (LBS) who

have distinguished themselvesin their chosen fields will becelebrated at the 21stPresident’s Dinner organised bythe LBS Alumni Association(LBSAA), where high-levelnetworking opportunities will befostered.

The annual event, scheduled tohold on 27 June 2015 at the EkoHotel and Suites, Victoria Island,Lagos is one of the biggestcorporate and social events of LBS.Mr. Wole Oshin, LBSAA President,said this year’s President’s Dinnerwould be attended by a goodnumber of the institution’s alumniwho have distinguishedthemselves in their chosen fields.

“The event would create aplatform for high-level networkingamong icons of the Nigerianbusiness community and highlightthe School’s leading role innurturing Nigeria’s businessleaders,” he said.

According to Mr. HenryOnukwuba, Director, AlumniRelations, LBS, awards will bepresented to deserving Nigeriansand the best alumni class wouldalso be honoured.

He said: “The event will begraced by distinguishedprofessionals and captains ofindustry from all walks of life,some of them, products of theprestigious institution.”

Lead Capital canvassesbanking reforms to grow realestate marketBy PETER EGWUATU

estate. With the level ofhousing at only 2 dwellingunits per thousand peoplecompared to a rate of 8-10

dwelling units per thousandpeople as recommended bythe United Nations. Nigeriahas a population growth rateof 3 percent and a rural-urban migration rate of 5 percent per annum. The rate ofhousing demand continues toexceed supply, presentingample opportunities forgrowth and development”.

Viewing the investmentperspective of the Real Estate,he portrayed Africa and theEmerging market as beingfield with opportunities for

healthy returns due to theirincreasing growthfundamentals. This is due tothe fact that the Eurozonecrisis has slowed downgrowth and weakenedadvanced economies fromtheir strong position as aninvestment destination. Thishas made investors focus onpromising markets, such asAfrica, and the fact thatAfrica’s cities areexperiencing an influx ofresidents in search of workand better standards ofLiving.

The Managing Director ofFSDH Merchant Bank, MrRilwan Belo-Osagie, whospoke from the Banker ’sperspective on ‘FinancingReal Estate deals’ stated thatone of the peculiarities in theindustry is that there is alarge demand for housing inNigeria and as such the RealEstate business is growingfast. “The key issue infinancing real estate isachieving bankability, anddealing with weak valuechains which ranges fromproperty registration andtaxes, Infrastructures, highinterest rates demand, andaccess to long term finances.Unless we get moremortgages in Nigeria,developing the residentialreal estate among other realestates will be difficult.”

While trying to unlock realestate opportunities from themedia perspective, thePublisher of Business DayPaper, Mr Frank Aigbogunreiterated that more clarity isrequired on the part of thosedeveloping and buyinghouses, in order tounderstand the dynamics ofsector, what drives it, andhow it is compared with thoseabroad? According to him allthese will aid reporting of thesector better .

Heritage Bank has announced itspartnership support with the Performing

Musicians Employers Association of Nigeria(PMAN) for the launch of a Biometrics CardScheme for members of the music body.

The PMAN Biometrics Card Scheme, a flagshipmulti-purpose identity card project which wasinitiated to re-validate the association’s eminentstatus in the nation’s entertainment industry, isconceived as a starting point of an all-inclusivescheme to ensure significant levels of protectionfor Nigerian musicians’ commercial rights.

PMAN President, Pretty Okafor, explained thatthe Scheme is a product of a comprehensiveassessment of the nation’s entertainment businesslandscape which shows that Nigerian musiciansand their colleagues in the entertainment sectorhave been earning far below the commercialvalue of their works due to a variety of factorssuch as poor infrastructure and weak institutionaland policy environment.

According to him, the Scheme would make itpossible for PMAN to develop a sound databaseof genuine practitioners in the nation’s musicbusiness sector, thereby strengthening the anti-

Heritage Bank partners PMAN on biometric card scheme

piracy campaign.Additionally, the card would serve as a debit

ATM Card as well as avail members a CUG (CloseUser Group) platform to call their music businessassociates for a fixed monthly flat rate using thenetwork service provider that is also partneringwith PMAN in the Scheme. Heritage Bank’sGroup Head of e-bank, Tobe Nnadozie, said theBank’s decision to be part of the PMAN BiometricsCard Scheme is informed by its unwaveringcommitment to wealth creation, preservation andtransfer in the entertainment sector.

“The entertainment sector has been identifiedas one of the biggest economic blocs in the countrywith potential to contribute hugely to thedevelopment of the national economy. Sadly,entertainment practitioners are being hamperedfrom enjoying large chunks of what they deserveas income from their creative investments. As abank that is wholly committed to the mantra ofwealth creation and preservation, Heritage Bankis more than ready and willing to partner withPMAN in the task of sanitizing the environmentso that entertainment practitioners can reallyflourish”.

Opportunitiesin the realestate financingcan be seenfrom theincreasingpopulationgrowth

GOOGLE DAY: From Left, Tolu Ogunkoya, Chief Executive Officer, MediaReach OMD; JulietChiazor, Country Manager, Google Global Services Nigeria Limited; and Patrick Gomes,Chief Digital Officer, Google; at ‘Google Day’; an event organized on brand marketing atOMD’s office in Lagos.


Corporate Finance

WORKSHOP - From left: Managing Solicitor, Tayo Tiwo and Co. Mr. Tayo Tiwo; Director ofLands, Lagos State, Mr. Tunde Oyegbola; and Chief Executive Officer, SOFUNIX Investmentand Communications Limited, Mr. Sola Oni, during a workshop on “Perfection of Titles inNigeria: Issues and Resolutions” in Lagos.

Chemical and AlliedProducts, CAP Plc, a

subsidiary of UAC of NigeriaPlc and manufacturer ofDulux paint, has posted aProfit Before Tax, PBT ofN2.44 billion in its financialyear ended December 31,2014.

This shows a 17 per centincrease over the previousyear. The company’s turnoveralso rose to N6.99 billion,indicating a growth of 13 percent during the same period.

Based on the performance,the Board recommended afinal dividend of N595million, representing 85 kobofor every 50 kobo of ordinaryshare to shareholders on theregister of members at theclose of business on May 28th2015. This, in addition to theInterim dividend of 150 koboper share paid on November19, 2015, brought the totaldividend for 2014 financialyear to N1.645 billion,representing 235 kobo pershare.

The proposal received anoverwhelmingly approval fromthe shareholders during themeeting.

Addressing shareholders atthe Annual General Meeting,AGM, in Lagos, the Chairman,Mr Larry Ettah, said:“Businesses have continuedto be buffeted by the usualchallenges of poor

CAP posts N2.4bn profit, paysN595m dividend

infrastructure and publicservices, insecurity, officialcorruption, multiple taxes,power supply shortfalls andvolatile capital market.” Heexplained that power supplydeclined so precipitously inthe country that public powerbecame non-existent just asthe currency devaluationheralded another round ofsharp increases in the pricesof inputs.

He stressed that coupled

forward looking business, wewill continue to seek andharness opportunities thatensure we remain relevantand create more value for you,our esteemed shareholders.

We will invest in cuttingedge technology for paintmanufacture that will enableyour company to efficientlymeet the needs ofconsumers, allowing themto express their colourpreferences in the localvariant of our flagshipbrand.”

Ecobank Transnational Inc.(“Ecobank”) has signed a

landmark multi-country agreementwith global payments technologycompany, MasterCard to bringMasterCard’s payment solutions tomore than 32 sub-Saharan Africanmarkets. It is a move that is expected toincrease the acceptance and adoptionof electronic payments in Africa.

A culmination of the multi-countrylicensing agreement signed byMasterCard and Ecobank in January2014, this initiative will see Ecobankissue MasterCard debit, prepaid, andcredit cards to millions of its customersover the next 10 years. Ecobank willalso roll out innovative MasterCardacceptance solutions designed toexpand the number of merchantlocations that accept MasterCardpayment cards on the continent.

Albert Essien, Group Chief ExecutiveOfficer of Ecobank, says: “Thiscollaboration with MasterCard willenable us to achieve our vision ofcontributing to the economic andfinancial integration and development

Ecobank, Mastercard sign pact on payment solutions

of the African continent by rolling outconvenient, accessible and reliablefinancial products and services to ourcustomers. Specifically, the initiativeenables us to extend our MasterCardacquiring capabilities at thousands ofmerchants across Africa, grow our e-commerce acquiring business, andexpand our service offerings to retail andcommercial customers in Africa.”

Michael Miebach, President, MiddleEast and Africa at MasterCard, adds:“Bringing the benefits of electronicpayments to markets across Africa andcreating a world beyond cash is a primaryfocus for MasterCard. By collaboratingwith a leading pan-African financialinstitution such as the Ecobank Groupwith its extensive regional reach andestablished infrastructure, anothersuccessful step has been taken inensuring access to safe, secure andconvenient payments via MasterCardpayment solutions.” As a result of theagreement, cardholders will now be ableto access their funds at millions ofautomated teller machines in Africa andworldwide. They will also be able to payfor products and services in 210countries and territories whereMasterCard payment cards are accepted

today. The agreement will also seeEcobank roll out thousands of mobilepoint of sale devices to retailers inselected African countries, furtherboosting Ecobank’s current pan-African network.

The Nigerian Stock Exchange(NSE) has concluded

arrangements to lead corporate financeexperts, lawyers, capital marketoperators, regulators and companieskeen to explore a London/Lagos duallisting, to an investor road show atLondon Stock Exchange Group(LSEG), as part of efforts aimed atpromoting dual listing and showcasingthe potential of quoted companies onthe NSE to global markets.

Scheduled to be held on June 22,2015, the event is in furtherance to theagreement signed in November 2014between the NSE and LSEG to

First millionaireemerges in Skye Bankreward scheme

A businessman residing inKaduna, Kaduna State,Mukaila B. Hamza, hasemerged the first winner of onemillion naira in Skye Bank’s‘Reach for the Skye MillionaireReward’ scheme.

Hamza, a former MainstreetBank account holder, nowmerged with Skye Bank,became the first winner of thescheme, following an electronicdraw involving over 400,000customers, during theunveiling of Skye Bank’s newretail banking project, tagged,‘Retail Transformation andGrowth’, R-TAG.

A surprise congratulatoryphone call was made to thewinner by Managing Director/Chief Executive Officer of thebank, Mr. Timothy Oguntayo,who urged him to invest hisreward wisely and continue hisloyalty to the bank.

Speaking earlier at the launchof the project in Lagos onTuesday, June 9, 2015, Mr.Oguntayo, assured that thenew business transformationproject would bring aboutcustomized and needs-satisfying financial solutions ina manner that will exceed theexpectations of the customers.

In his words, “Our reneweddrive and focus on retailbanking is anchored on thepremise of building a longlasting relationship with ourcustomers based on trust as wellas supporting the financialinclusion drive of the CBN soas to bring a lot more peopleinto the financial system and theformal economy.”

For her part, the ExecutiveDirector, South South, SouthEast and Retail Banking, Mrs.Ibiye Ekong stated that the‘Reach for the Skye MillionaireReward’ scheme was institutedby the bank to encouragesavings culture amongst themass market segment.

NSE , LSE partner to stage capitalmarket road show in London

strengthen cooperation and promotemutual development between the twoexchanges. According to the CEO ofthe Nigerian Stock Exchange, Mr.Oscar N. Onyema, the event will bringtogether key market stakeholders todiscuss opportunities for dual listingin the London and Nigerian capitalmarkets. “It is an opportunity forengagement between the UK andNigerian capital markets with a viewto deepening domestic and regionalmarkets; enhancing liquidity andidentifying institutional and capacitybuilding initiatives needed to developboth markets and create long term valuefor respective stakeholders.

By PETER EGWUATU

with the elevated political riskdue to the elections recentlyheld in the country,investment dried up asconsumer purchasing powerremained weak.

Ettah further stated that theeffects of these developmentson the economy were lowcorporate revenues andmargins and higher cost ofdoing business.

On the company’s plan forthe future, he said, “As a

Banking & Finance


JUSTICE Olayinka Faji ofthe Federal High

Court, Ibadan, on Friday,granted bail to five employeesof three commercial banksinvolved in the N8 billionmutilated currency scam.However, the court denied bailto 10 others, including threeemployees of the Central Bankof Nigeria (CBN).

The officials are AdemolaAdewale of Wema Bank;Kehinde Fatokun, OlukunleSijuade of First CityMonument Bank and AjuwonBolade. The accused werearraigned by the Economicand Financial CrimesCommission (EFCC) oncharges bordering on fraud,forgery and violation of thebank employees code ofconduct.

The three CBN staff areKolawole Babalola, OlaniranAdeola, and Togun Philip.

Others include, Isaq Akano,Ayodele Adeyemi, OyebamijiAkeem, Ayodeji Aleshe andAjiwe Adegoke, all of FirstBank Plc and Oni Dolapo andAfolabi Olunike of Wema Bank.Delivering his ruling on thebail applications made by theaccused persons, Faji said thatthe prosecution failed toestablish a strong case againstthe five for which they shouldbe denied bail.

He said that while the courtcould grant or deny bail basedon its discretion, bailapplications could be deniedif prosecution could prove thattrial could be hampered if bailwas granted. “The prosecutionhad not proven well enoughthat these five accused couldattempt to jeopardise the caseby concealing evidence orinfluencing witnesses.

“Although the offences,

Access Bank UK Limited,a wholly owned

subsidiary of Access Bank Plc.,which has just published itsreport and financialstatements for the year endedDecember 31, 2014 recordeda growth in its operatingincome by 37 per cent.

The operating profit grewfrom 10.9-million Pounds in2013 to 15-million pounds in2014. The Bank’s profit beforetax grew by an outstanding 138per cent to £5-million. Thelatter reflects the growth intrade finance and also assetmanagement activity by AccessPrivate Bank. Assets undermanagement for 2014 were£34-million, which is a year onyear rise of 12.2 per cent, whiletotal private bank customer

funds were £46-million, a riseof 16 per cent on the previousyear.

The Bank also saw asignificant increase in netinterest income of 94 per centto £6.4-million as a result of thegrowth in loans tocorrespondent banks andcustomers. As The Access BankUK’s Chief Executive Officerand Managing Director, JamieSimmonds, highlights “this hasbeen achieved while stilloperating within the moderaterisk appetite set by the UKboard”.

Further new products, suchas UK fixed term deposits, werealso introduced by the Bank in2014.

Commenting on the figures,Jamie Simmonds adds:

“Our second five-year planbegan in 2014 and we achievedour aims and outperformedprojections for the year. As at

31 December the Bank had ahigh capital adequacy ratio andliquid buffer assets significantlyin excess of the minimumregulatory requirements. It isour intention that these willcontinue to be maintained at

satisfactory levels in thefuture.

“This has been atransformational year for theBank as we have continued togrow the business based on thefirm foundations that we haveestablished and also diversifyour income streams to ensuresustainable performance. Webelieve we have succeeded inthe current financial climatewhere others have failedthrough our focus onestablishing strongrelationships with all ourcustomers.

“Our achievements owe agreat deal to the strongpartnership that we have withour parent company, asevidenced by our joint supportof the fourth Access Bank Dayat the Guards Polo Club inWindsor.”

Access Bank Plc GroupManaging Director HerbertWigwe highlighted that theaim of the event at the GuardsPolo Club is to raise furtherawareness of the issues andsupport required.

herein, in my view are graveas it affects the economy, yetconsidering the proof ofevidence before me, theprosecution has no strong caseagainst the five,” he said.

Faji, thereafter, granted eachof the five accused bail in thesum of N20 million with twosureties in like sum. The judgesaid that the sureties must beresident within the court’sjurisdiction and have landedproperty in Oyo State; inaddition to possessingevidence of payment of threeyears tax. On the other accused

persons, Faji held that theirstatements to the police upontheir arrest suggested somelevel of involvement in theoffences against them.

“The amount of money foundin their different bank accountsand the worth of propertydisclosed by them, which isabove their proven income,suggest that there is a strongcase against them.

“Although they complied withthe EFCC when they weregranted administrative bail, thesame may not be said of themnow that they know the gravity

of what lies ahead,” he said.He, therefore, denied them bailand ordered for acceleratedtrial.

The 22 bank officials are beingprosecuted by the EFCC inseven different suits.

Three of the cases are beforeJustice Nathaniel Ayo-Emmanuel, while Faji ishearing four cases. Fajiadjourned hearing in the foursuits to June 26, July 1 and July10 while the one involving theCBN trio and the three WemaBank employees is Sept. 24 andSept. 25.

Currency scam: Cour Cour Cour Cour Court grants bailt grants bailt grants bailt grants bailt grants bailttttto 5 accused pero 5 accused pero 5 accused pero 5 accused pero 5 accused personssonssonssonssons

Stories byPETER EGWUATU

Access Bank’s UK subsidiary operatingincome up 37%

Fidelity Bankrewards loyalcustomers

Our achievementsowe a great deal tothe strongpartnership that wehave with our parentcompany, asevidenced by ourjoint support of thefourth Access BankDay at the GuardsPolo Club inWindsor.

Another set of 643customers of First City

Monument Bank (FCMB)Limited have been rewardedat the second draw of theBank’s ongoing promotiontagged, ‘’FCMB MillionairePromo.” The winnersemerged at the electronicselection exercise which tookplace across the 3 Regionsand 25 zones of the Banknationwide on Wednesday,June 17, 2015. While 3customers of the Bank wererewarded with the sum of N1million each at the Regionaldraws held in Akure (Ondostate; Awka (Anambra state)and Abuja, a total of 640others smiled home with LEDtelevisions, generating sets,decoders, tablets, smartphones and other consolationprizes at the Zonal draws heldin different parts of thecountry.

FCMB rewardsmore customersat second drawof millionairepromo

Fidelity Bank Plc hasrewarded loyal customers

with the sum of N52 millionin the on-going FidelityLoyalty Savings Scheme. Atotal of 106 customers wererewarded in this second batch;80 beneficiaries receivedN500,000 “Xtra income” each,under Fidelity PersonalSavings Scheme (FPSS)while 26 SWEETA accountholders received N150,000“School fees support” each.The Fidelity Loyalty SavingsScheme is a special schemedesigned to appreciatecustomers that had openedFidelity Personal SavingsScheme and SWEETAaccounts respectively. Theaccounts are interest-yieldingwhich allows deposit of cash,cheques and dividendwarrants. In addition, theFPSS and SWEETA accountcan be opened with anyamount.Another presentation will beheld next month to a fresh setof beneficiaries of the scheme.So, open and start savingtoday and you could win Extraincome and School feessupport with your FPSS andSWEETA account.

The FCMB MillionairePromo, which commenced inFebruary and run till July, istargeted at all segments of thesociety and for existing aswell as potential savingsaccount customers.

LAUNCH: From left, Director Healthcare Programs, Bayer Pharma AG, Dr. Michael Heerde;Director, Health, Population and Nutrition office, USAID Nigeria, Dr. Nancy Lowenthal; DirectorFamily Health, Ministry of Health, Dr. Balami Wapada and Senior Bayer Representative/Head,Bayer Healthcare West Central Africa, Mr. Amechi Nwachukwu at the launch of Microgynon FeOral Contraceptive in Abuja on June 18, 2015 at Ladi Kwale Hall, Sheraton Hotel, Abuja.


CMYK

Banking & Finance

VISIT - From left , Secretary to Akwa Ibom State Government, Mr. Etekamba Umoren, Regional Director, South South II, SkyeBank Plc, Mrs Emem Udosen; Governor of Akwa Ibom State, Mr. Emmanuel Udom; Group Managing Director/Chief ExecutiveOfficer, Skye Bank Plc, Mr. Timothy Oguntayo; and Executive Director, South South/Retail Banking, Skye Bank, Mrs IbiyeEkong, during Skye Bank’s management’s visit to the Governor.

Naira depreciates againstmajor currenciesTHE Naira on Friday at

the parallel marketdepreciated against threeinternational currencies at theclose of trading for the week.

A on Friday in Lagosshowed that the Nairadepreciated by N1 or 0.45 percent against the dollar due tohigh demand. It sold for N221

CITIGROUP isplanning to shift the

head office of its Europeanretail banking operation toDublin from London to benefitfrom lower costs and capitalrequirements.

This week the bank wrote toclients to say the UK-basedbusiness, CitibankInternational Limited, whichoperates a small number ofbranches across some 20European countries, would betaken over by Dublin-basedCitibank Europe Plc.

“From a strategicperspective for Citi, movingto a single pan-Europeanbank is expected to reduceoperational and regulatorycomplexity, capitalrequirements and cost,” thecompany told clients.

Reuters quoted analystssaying UK rules that requirebanks to hold a higher level

of cash in reserve than otherEuropean countries do waslikely to be a factor behind themove but that they did notexpect to see a stream of otherbanks moving theirheadquarters from the UK.

A spokeswoman for thebank said the change in theretail bank’s legal domicileand principal regulatory basewould not involve job cutsand that the leadership of theEuropean retail operationwould continue to be based inLondon.

“The primary reason (for themove) is simplification,mirroring Citi’s strategy ofcreating a simpler, safer,stronger institution,” shesaid.

Citigroup has been scalingback its retail operations inrecent years and remains asmall player in Europe.

Citibank International Ltd

employed 4,600 people atthe end of last year, filingsshow. Citibank Europe Plcemployed 4,300 and currentlyfocuses on providingtransaction services tofinancial services andcorporate clients.

The spokeswoman deniedthat the decision to rebase inDublin was influenced by thepossibility of the UK leavingthe European Union followingthe referendum on EUmembership which is due tobe held in the next two years.

Also, although Ireland hasbecome a magnet forinternational financialinstitutions thanks to its lowtax rate, the spokeswomansaid the restructuring was nottax driven.

Regulatory capitalSince the financial crisis

regulators have increased the

amount of cash andgovernment bonds banksmust keep in reserve in caseof financial storms.

Higher capitalrequirements mean lessmoney to lend out or investand consequently lowerreturns for a bank.

European Union countriesapply the same internationalrules on capital requirements.However, on top of the basicreserve requirements,regulators require some banksto hold additional capital asa buffer. The amount dependson the regulator’s perceptionof the bank’s systemic orbusiness risks.

The UK’s banking industryis much larger in terms of itsassets as a percentage ofnational GDP than that ofother countries in Europe,which means bank failurescould cause bigger economicripples than elsewhere.

This has led the UKregulator to require banks toset aside more money thanother European countriesdemand, analysts said.

against the dollar from theN220 it sold on Monday, June15. The Naira also lost N27to sell at N352 to the pound,representing 8.31 per centdepreciation from the N325 ittraded on June 15.

Besides, the Naira againstthe euro went for N245compared with the N238 it

sold on June 15, representingN7 or 2.97 per cent drop. TheNaira against the dollar atCentral Bank of Nigeria(CBN) official rate remainedat N196.90, the rate sinceJune 11.

But it fell by N7.96 or 2.61per cent to the pound, sellingfor N313.31 from the N305.31

it sold on June 15. Thecurrency also depreciatedagainst the euro to sell forN224.58 compared with theN220.74 it traded onMonday.

A bureau de changeoperator, Mr Harrison Owohsaid that the depreciation inall segments was due to ashortfall between demandand the foreign exchangeavailable for sale. Owoh, whois the Managing Director ofHJ Trust Investment Ltd.,Lagos, said that a furthershortfall in forex supply maylead to further depreciation.

Citigroup to shift European retailbanking base to Dublin

CENTRAL Bank ofNigeria, CBN on

Friday called a meeting withchief executives andtreasurers of banks to discussissues surrounding its policyon the foreign exchangemarket, multiple bankingsources told Reuters.

The central bank imposedtight controls on the foreignexchange market in Februaryto curb speculation on thenaira and save its dwindlingforeign reserves in Africa’sbiggest economy. Beforesetting the restrictions, thecentral bank had beenbattling to prop up the nairaafter a sharp fall in the priceof oil, Nigeria’s main export,which triggered a sell-off inassets by foreign investors.

The central bank also fixedthe rate at which banks canbuy dollars from oilcompanies.

Traders were upbeat on theoutcome of the meeting whichthey claimed was longoverdue to ease the tightcontrol in the market andallow the local currency tofind its real value.

CBN holdsmeeting withbanks on forexrules

In line with its corporatedisposition to sustainable

women empowerment,Ecobank Nigeria ispartnering Women’sEntrepreneurship Day(WED) on the hosting of thisyear Women of West AfricaEntrepreneurship (WOWe)Festival. WOWe Festival 2015 with thetheme ‘Vision to Reality’slated for June 25 and 26 willprovide the opportunity forfemale entrepreneurs andcorporate professionalwomen with entrepreneurialambitions, to secure practicalinformation on how totransform their businessesand realize theirentrepreneurial ambitions. The conference will alsoprovide a high levelnetworking platform thatconnects the most influentialwomen entrepreneurs whowill exchange ideas, addresschallenges, uncover newstrategies and dialogue onissues relating toentrepreneurship.

Ecobank lendssupport towomenentrepreneurs,partners WOWEfestival


CMYK

Homes & Housing

Real estate remains abooming opportunityfor Africa-focused

investors for good reasons.The growth of cities creates ademand for increasedvolumes of high-qualitycommercial and residentialreal estate. Also, the rise of theurban middle class drivesretail property development,particularly as modernshopping malls spread acrossthe continent.

A growing number ofmultinational companies aresearching for office space in thenewly emerging cities. The riseof regional tech hubs and anexpanding oil and gas sectorcreates job opportunity with noplace to house the employees.A survey by Venture Africa listsNigeria among the topmostcountries in the continent thatoffer the greatest investmentopportunities in real estate.

AngolaAngola is Africa’s fifth largest

economy with Luanda andHuambo as its major cities.Despite the recent constructionof new properties across theboth cities, primarily Luanda,the country suffers from a lackof good quality office andresidential space. Surveysreveals that the majority of thenear 300,000 square meters ofoffice space brought to themarket during 2014 – 2015 wasalready pre-leased or soldbefore officially opening.Prices for office space,accordingly, are the highest inAfrica at $150 per squaremetre per month in Luanda

•Warren Buffet, one of the richest men in the world, lives in the same house he bought in1958 for $31,500.

Nigeria among African countries withbest property investment prospects

Stories by YINKAKOLAWOLE,with agency report

(the 2ndhighest in Africa iscomparatively $65 per squaremetre less). The retail market,although in its infancy, alsoprovides a high return oninvestment with prices at $120per square metre per monthand a rapidly expandingmiddle class in Luanda.

NigeriaNigeria is Africa’s largest

economy with Lagos and Abujaas its major cities. You get mixreviews from developers inLagos and Abuja on the effects

of recent construction. Capitalhas been poured extensively

into both cities. Yet the pricesin both markets areconsistently at two of the mostexpensive. Lagos office spacerents for $85 per square metreper month while the Abujaoffice space, despite being in amarket nearly 1/4 the size ofLagos, still rents for $72 persquare per month.

As Africa’s sixth fastestgrowing economy (accordingto IMF projections 2015-2019),Nigeria is likely the mostattractive market for retailproperty. Private equity fundshave been active in this spacein Nigeria for several years butprices remain high. It is hometo the 3rdand 4thexpensivemarket for retail space at $80per square metre and $72 persquare metre per month inLagos and Abuja respectively.An executive house with 4bedrooms goes for $8,000and $8,500 per month inLagos and Abuja, while inAngola, the same propertycosts about $25,000.

EgyptEgypt is Africa’s third largest

economy with Cairo,Alexandria and Giza as itsmajor cities. Egypt is notAfrica’s fastest growingeconomy – not even breakingthe top 20 in Africa for the nextfive years. But its retail marketis booming and looks to stay soin the near future. The drop inthe retail sector during the ArabSpring hurt the growing sectorback in 2013 through 2014.

Cairo retail space is rentingfor $100 per square metre permonth. Office space rents for$35 per square metre permonth in Cairo, making it oneof top 15 expensive cities.

As Africa’s sixthfastest growingeconomy,Nigeria is likelythe mostattractivemarket for retailproperty

Rock of Ages Properties limited, amember of (CHICASON) Group has

started the construction of 10,000 housingunits Estate at Lugbe South in the FederalCapital Territory (FCT).Chairman of theCHICASON Group, Chief Dr Chika Okafor,who disclosed this, said about 3,000 unitsof the housing development which are meantfor civil servants and other interestedindividuals will be delivered before the endof year.

He assured all the subscribers that thehouses will be ready before the second quarterof next year, based on what he termed thegood the reputation of the CHICASONGroup. Okafor further noted that the TradeUnion Congress (TUC) is one of the majorsubscribers of the houses. Meanwhile,Executive director of CHICASON Group,Adike Chux, said the United WorkersHousing Scheme is a housing developmentthat would deliver 10,000 housing units inplot 301 and 302 of L22 Southern Lugbe ofthe FCT in the phase 5 FCT development.

Chux explained that the project is beensponsored by CHICASON Group and thedeveloper is Rock of Ages, a subsidiary ofthe Group, while the other collaborators forthe project include TUC, Federal MortgageBank of Nigeria (FMBN), Nigeria MortgageRefinance company (NMRC), Trusts Bond

Firm begins work on 10,000 Abuja workers’ houses

Mortgage Bank and other banks. He addedthat the subscribers of the project cut acrossall works of lives, including the staff of NigeriaCustoms and ECOWAS.

According to Chux, the houses are in 12different house styles and affordable tosubscribers. “The subscribers will makeequity contributions depending on the housetype referred; the apartment blocks rangesfrom 2 bedroom flats to 3 bedroom flats, andworkers who are contributors to Pension andNational Housing Fund automatically qualifyto apply for the houses. Some of the facilitiesand social infrastructures the subscribers willenjoy are good road network, independentpower supply, water that will be metered tovarious apartments, hospital, secondaryschool, primary school, banks, petrolstations, office complexes, motor servicestations, shopping mall.

To achieve all this, CHICASON is workingwith Development Control of the FCDA toavoid the use of substandard materials.

The project is bigger than that of Gwarinpaand in the next six months, constructionworks would have gone far,” he stated.Alsospeaking, Professor Charles Ofoegbu, formerDirector General of NBBRI, said the UnitedHousing Scheme for Nigeria workers falls inline with what he has been advocating for inthe past 10 years in Nigeria’s housing policy.

NMRC to open2015 Abujahousing show

Nigerian MortgageRefinance Company

(NMRC) will kick-start theprogramme for this year’sAbuja Housing show.

The annual Abuja Housingshow billed to take placefrom 6th to 8th July, 2015is the biggest platform forexhibition of housingproducts in Abuja.

NMRC will open the eventwith a session tagged“Affordable Housing forNigerians- what does thisexactly mean?”

Notable experts drawnfrom various areas of thehousing sector have beeninvited. Some of theorganizations that will bepart of the deliberationinclude: Director, OtherFinancial InstitutionsDepartment of the CentralBank of Nigeria (CBN);Director-General, NationalPension Commission(PENCOM); NationalInsurance Corporation ofNigeria (NICON); MortgageBankers Association ofNigeria (MBAN) and; RealEstate DevelopersAssociation of Nigeria(REDAN).

Discussions will focus onland issues, delivery ofstandardized andaffordable housing, buildingstandard as well as thesupply side of the housingequation (constructionfinance). Some statecommissioners areexpected to be part of thesessions. A communiquéwill be issued at the end ofthe day.

Meanwhile, over 100exhibitors and variousstakeholders from everypart of the country are setto attend the Abuja housingshow which is expected tobe declared open by theVice President, Prof YemiOsinbajo.

This year’s Abuja housingshow is sponsored byNMRC, FMBN, DangoteCement, Rock of AgesLimited, Nigerite,GoodHomes and ShelterAfrique, with FestusAdebayo as coordinator.Abuja Housing show is anevent of FESADEBcommunications Limited,producers of HousingProgramme on AIT, NTAand Raypower. The eventhas become an ideal placefor networking, meetingvisitors and selling deals.


CMYK

People in Business

Dr Chidi Akunne isa ConsultantApiarist and

senior lecturer in theDepartment of Zoologyand EntomologyOption, NnamdiAzikiwe University. Inthis chat with FinancialVanguard in Awkarecently, he spoke onthe Modified LangstrothHive, honey wine andother products, notingthat honey can helpprovide the muchneeded employment aswell as food security.

Excerpts:

The Beehive:According to Dr. Akunne,

he and his friend, ChiegeleAkpoke invented theModified Langstroth Hivefor beekeeping and honeyproduction.

"The beehive has twosections - the lower or broodchamber and the upper orsuper chamber. The broodchamber is where the queenbee and young ones residewhile the upper chamber orsuper is for honeyproduction.

By EBELE ORAKPO "The advantage theModified Langstroth Hivehas over others is that bothchambers (brood andsuper) are on the sameside, affording the superchamber more space tostore honey.

"Through beekeeping orapiculture, we can havehoney as our primaryproduct apart frombeeswax used for candlemaking, paint making,shoe polish,pharmaceutical andtherapeutic purposes aswell as food."

Apiculture'll solvehealth, unemploymentproblems - Dr. Akunne

Tonic wine:"I also made honey tonic

wine which is moremedicinal than the tablewine.

Other products are beepropolis which is even moremedicinal than the honeypeople clamour for. Sobeekeeping/honeyproduction is purely foreconomic empowermentespecially for the youth andyoung entrepreneurs."

Job creation:"Today, we talk about

unemployment sobeekeeping/honeyproduction is really aventure that people canengage in small scale tocurb the problem ofunemployment. It empowersthe youths, even the womenare involved.

Food security:"Honey is good food for

everybody - the young andthe old as well as for healthpurposes.

As we know, today inNigeria, healthcare is noteasily accessible but withhoney, you can solve a lot ofhealth problems.""

Challenges:"There are challenges and

risks in all professions. Butwith beekeeping, the

The advantageModifiedLangstrothHive has overothers is thatboth chambers(brood andsuper) are onthe same side,affording thesuper chambermore space tostore honey

number one challenge, beesting, is beneficial.

Bee sting medicinal: "Onecannot engage inbeekeeping without beestings but we have reducedit to the barest minimum.And of course, bee sting isnot detrimental, it ismedicinal.

In one of my write-ups, Italked about using it to solvethe problem of HumanImmunodeficiency Virus/Acquired ImmuneDeficiency Syndrome andcancer because from records,bee venom has actuallydone wonders in these areasso bee sting is not bad,people use it to cure some

diseases."But for someone to be

involved in beekeeping, youhave to protect yourself.There are bee suits, smokerused to calm the beesbecause the bees releasepheromones. A pheromoneis a chemical released by ananimal and it changes thebehaviour of another animalof the same species. In thiscase, bees. They aresometimes described asbehaviour-altering agents.

"The pheromones tell otherbees that there is dangerand they start stinging, butonce you are protected, youwill not be afraid," saidAkunne.

•Dr. Chidi Akunne...with beekeeping, the numberone challenge, bee sting, is beneficial.

•Dr.Akunne at

work •ModifiedLangstroth

hive

•Some of the products


CMYK

Interview

Many Nigerians arelooking up to theFederal Inland

Revenue Service to bail thecountry out of the currentrevenue crisis, owing to the fallin oil revenue, what strategieshave you put in place to raise yourtax collection?

It is all about our commoninterest because we are allaffected. If Nigeria does not haveenough revenue, it would not beable to execute governmentprogrammes. But you know thatthe life line of the revenue sourceof this country is oil. If it does well,you would not know there isproblem in all the other sectors. But how do you do effective taxadministration in the face of thepresent tax system? A good taxsystem is based on the law, thepolicy and the administration.

The last Minister of Finance hadanticipated that the oil pricewould be on the declining end andsuggested a list of newsurcharges. They thought itwould be sufficient to block theleakages and assist the budgetdeficit but that has not beenrealised. On our part, we keyedinto it because we saw it as averitable source towardsaddressing the declining revenue.But we have not been able tocollect. The reason is that Nigerialacks the policy and law thatsupport it. We are revenueadministrators but we do not havethat enabling law.

There are sources of revenuebut what is needed is tounderstand what is driving the taxcollection and remain focus. Whatever we do have to be withinthe national Tax Policy. For usin FIRS, I can only improve onmy limit. I have to follow thetax administration and can notinfluence the Minister of Finance.The Minister had proposed a newVAT ( Value Added Tax) rate butthe question is, are we preparedto implement this new rate? Weare not because the power to dothat lies with the executive asadvised by the minister ofFinance. I can only providetechnical inputs. If we make allthese policies become laws, it willhelp the economy.

We go to the National Assemblythrough the office of the Ministerof Finance and Attorney Generalof the Federation, still the laws arenot considered. That was whathappened to the PIB, but we allknow what PIB would have donefor the economy. They havedemonstrated the figures but threeyears on, the National Assemblyis still on it. What we are doingnow is to look at the laws as theyexist today and see areas thatcan give us quick wins.

What are these “quick wins"?We started off with the structure

of the FIRS. Before now, we usedto have the Tax Officesperforming the functions ofrevenue collection and returnsprocessing. We have the same TaxOffices doing audit work and wehave the same Tax Offices doingdebt management and at the sametime doing tax payer education. So, we felt that we had torestructure and allow the office to

focus on education of tax payer,going out to bring in more taxpayers and encourage them tokeep books of account and notonly that ensure that they bring intheir returns when it is due as weare doing now. We free you ofall other burdens. Let somebodyelse or group focus on auditingthose companies. It is not apunitive step but a corrective stepwith a view to changing thesystem.

So, we are emphasising the needfor engagement with tax payersbecause we can not do taxadministration all by ourselvesalone. We want to partner with taxpayers and if they get it right, ourjob becomes easy and morefocused. But we have not beenpromoting all these in the past.The old way had not helped us.We are segregating all theactivities relating to audit andgiving it to experts, those whoreally understand the language ofaccounting, those who understandthe tax laws, coming together inwhat we call audit environment.That will help us, improvetransparency and accountability.They can then give report tomanagement from time to time,on a monthly basis what they aredoing.

We have a group whoseresponsibility is debtmanagement. There are hugedebts out there uncollected, whatwe do now is that if a particulargroup failed to collect their debtwe send a different group to goand collect them and all they willbe doing is to pursue debts. What we have done there is tocreate 10 regional debtmanagement offices across thecountry. Their jobs will be topursue every debtor in theirregion.

Are you saying you do not have

all the tools needed to dischargeyour duties?

Yes, I will say we have not allbut we are engaging relevantagencies of government. We werestill talking to all of them. It wasstill work in progress when they (last administration) wereleaving.

Could that be why the Luxuryitems taxes regime has not yetstarted?

Yes, levy on private jets, forinstance, was proposed butremember that when it comes tolevy on luxury goods, we will notbe the only one to collect them.Customs, NCAA and FIRS willdo some parts. It is a collectivething. For instance, customs willcollect the surcharge on luxurygoods being imported, NCAA willwork on private jets but we neededto work together to agree on thebasis of the revenue collection. What is worrisome on that is usingweight to determine how muchanyone who has a private jet willpay.

But the question to ask is, for thefact that a man has brought aprivate jet for himself, is it right tolevy N100 million on him? And isit weight that should determinehow much he should pay? So, weengaged them on this. Many ofthem own platforms here but donot own jets. They use theplatforms of foreign planes flyingand they will register those privatejets against their names and at the

end, we discovered that theydo not own even one private jet. Some of them use those privatejets for business purposes not forluxury after registering with therevenue agency and pay incometaxes and also remit VAT on them.So, there were a lot of issues withthe administration. We were alsoto levy N15,000 on those flyingBusiness Class. We thought thatwill start in July, but how readyare we without enabling laws.

There is this believe that bigmen do not pay tax, how true isthis?

That is a general perception butyou have to put your facts on the

table. Tell me one man you know,who does not pay tax? But the firstchallenge is that we do not havecentralised tax collection system.So, it is difficult to say this man isnot paying tax and I want to runafter him. At a point we createda department called HighNetworth Individual Group in theoffice of the Chairman. Butsome members of the NationalAssembly whom we engagedcame back to us and said 'we arenot earning all the money you seeagainst our names.' They saidsome of the money paid into theiraccounts were for constituency,accommodation and otherallowances. At the end of the day,the facts were staring us in theface. We lack central tax

collection system in this country. Thatis not to say that Fiscal federalism isnot okay. The states can be allowed toretain their revenue but we can worktogether under MoU and we help themdo the collection. Constitution allowsit, Canada also has Fiscal federalism,America has it. Let us work together.

But if you create silos in differentstates and leave the centre, we areexchanging information. But we needto capture every tax payer. When wesay big men do not pay tax, we shouldrealise that some countries have goneflat rate in tax collection. We do notwant to rattle anybody or disruptbusinesses because one single taxsystem may serve the purpose

In fact, we are bringing PresumptiveTax System very soon. The idea is toenable us register every individual and

Tax holidays requiresanitisation— FIRS boss

By EMMA UJAH,Abuja Bureau Chief &

EMMANUEL ELEBEKE

We are bringingPresumptive TaxSystem very soon.The idea is toenable us registerevery individualand businessesand determinehow much theywill pay

The dwindling oil revenue across the globe has left theNigerian economy in state where every alternative revenuesource must be fully exploited. The Federal Inland RevenueService readily comes to mind. The Acting ExecutiveChairman, Mr. Samuel Ogugbesan told a team fromVanguard that his organization was ready to play its role butcalled for the enabling policies and legislations that couldsignificantly shore up tax collection in the country. He alsostressed the need to sanitise the Tax Holiday granted tocompanies with pioneer status.

Excerpts.

The dwindling oil revenue across the globe has left theNigerian economy in a state where every alternative revenuesource must be fully exploited. The Federal Inland RevenueService readily comes to mind. The Acting ExecutiveChairman, Mr. Samuel Ogungbesan told a team fromVanguard that his organisation was ready to play its role butcalled for the enabling policies and legislations that couldsignificantly shore up tax collection in the country. He alsostressed the need to sanitise tax holidays granted to companieswith pioneer status.

Excerpts.

•Samuel Ogugbesan

•Samuel Ogugbesan


Interview

businesses and determine how much theywill pay. But first of all, we need to knowwho our tax payers are.

If a tax man does not know who his taxpayer is, it is difficult to get them to pay So, we are getting it right now. We aredeveloping tax identification platform,which we hope will bring everyone intothe platform. Looking at the successrecorded in Lagos, even though they donot have the law, they started withcobblers, shoe shiners, taxi drivers andbrought them into the tax system. Theamount may be too small and does notdisturb their business but when you putthem together, it gives you the criticalfactor, the critical mass you need.Because they have the data on them now,when a shoe shiner suddenly buys amachine, with the central data system,he is upgraded because his data will beseen. That is what we are trying to dowith every individual. We can’t doeffective tax administration if we do nothave a data base of all our tax payers.

I have already met with the CBNGovernor and he was happy to work withus. We have a team right now at thefederal level. We have only requestedstates to drive it at their own end butcompliance is poor, no one isfollowing. The implication is that, ifwe do not have a robust data base, thereis no way we can do effective tax system.

We have asked the CBN Governor tomandate all banks to ensure that noindividual or corporate entity is allowedto operate his account until they have aTIN. We are working with NIMC also,so that all information they have in theirdatabank can be uploaded into ourplatform, irrespective of who is

involved, as long as, they are onthat platform. For us, it is a hugerevenue potential if we are able toget it.

But you know, it is ICT that willdrive it. ICT today is an expensiveventure, but we are ready to go byit. By the time we do it, nobody willcome to remind us that somebodyis not paying tax.

In every country, the informalsector is the engine of growth butif you do not partner with them,you may not be able to accessanything from them.

One good thing governmentdid was to establish theDevelopmental Bank of Nigeria.That bank is now giving out loansto individuals and cottageindustries. You grant them loanand it comes with moratoriumperiod. That is for the next eighteenmonths, you are not required topay back at all. In addition to that,it is at a low rate of interest.

If government has done that foryou, it becomes easier for the FIRSto walk in there and demand theirbooks of account and file in theaccounts and then collect their tax.

That is why I keep saying, we cannot do it all alone without thepeople.

Taxation in every country is everyone's responsibility. Nigeriansshould support us, the legalpeople, judiciary, NationalAssembly will be there, giving usinformation about people whoshould pay and those who shouldnot pay. We need information, butimagine that a tax man is thereand you see people doing businessand refuse to pay tax from them.

There are people whose tax es

are deducted by their employeesbut when they request for taxclearance they are not given, howare you working to make surethat workers' taxes deducted areremitted to you?

That is a very good one but Iwould not want you to see it fromthe perception that nothing ishappening. Something ishappening which tends to promotecompliance. I can tell you that thelevel of compliance from last yearto this year has improved.

For those of us in the federal civilservice, we have the IntegratedPersonnel Payroll System, IPRSplatform in the office of theAccountant General. It does thecalculation of pay as you earn. Allyou need to do is to fill in yourinformation. There is no civilservant who is on that platformthat is not captured. We have about64 agencies integrated into thissystem. The number grew from 24.The idea is to make sure that allfederal government parastatalskey into that platform. So, whatthat does is that you do not evenhave any control over it. TheMDAs themselves cannot do it,someone is doing it for them.

For those in the private sector,that is where the problems is. Thebanks do the deduction but oftentimes, they do not remit correctly.What is important to us is to ensurethat they are in our data base. Andwith the kind of monitoring we aredoing in the recent times, we arereaching out to them andmandating them to ensure that themoney they have deducted gets intoour accounts. If it is filed late, weimpose penalty. At least we knowthem. The number of agentscoming into the platform is

increasing, but we are saying ifevery individual can do his ownthing, the better for us. Let everyoneaccount for his tax by himself butlet us agree. I think, every workerhas a responsibility to report to usif his employer is not remitting histax to us. That is why we areemphasising engagement andcollaboration. We are sendingour people out for taxenlightenment.

There will only be problem withus when your tax is remitted to usand we fail to issue the clearanceto your employer.

How do you handle tax evadersWe insist they must pay. We use

all our debt management staff to

You owe me so much. I am notgoing to kill your business. Youneed to remain in business so thatwe can continue to recruit ourchildren and I need you tocontinue to contribute to the GDP,so tell me how you are going topay. That is debt managementtoday. There is no sense in goingto seal up businesses anymore. Let me see your cash flowprojection and then I say ok this ishow much you need for yourexpenses- for your business tocontinue to run but tell me youmust have to pay some, then wesign an MoU,- you sign and I signand then the bank signs and I haveyou make payments every month. That is what modern taxadministration that yields resultsdoes.

Tax payer service, before now wewere doing it from theheadquarters . We need the TaxOffices to do tax payers service- justhelp fill forms. Now we said no. let headquarters alone beresponsible for developingtechnical materials that will go tothe fields. At the Regional level, 10Regional Officers throughout thecountry, let them be the ones thatwill be organising stakeholdersengagement with associations,with trade groups, interface withour officers there to undertake taxenlightenment programmes. Itis happening at the same timeacross the country.

No one needs to be told that thisis a new reawakening that is goingto change the way we do things andwe are engaging more with taxpayers- they can feel us now. Forthe communications companies,airlines, power companies, whatwe are doing now is to ensure thatwe take our money upfront. Whydo we have to encourage you tohold back our money and hold itfor sometime before remitting tous. We have told them and theyhave assured that they willcooperate with us.

Do you still have issues withbanks holding bank your moneyfor some period, do business withit before remitting to youraccounts?

Those were delay matters. Theycollect this money, and because weallow them then, some of themwere holding back. But we havesanitised that area and as at todaythey are reporting as at when due.

In fact right now, no fund stayslonger than 24 hours in any bank.

What about the use ofconsultants?

They law says no revenue agencyshould engage consultants for taxadministration. Assessmentcollection and accounting for it. We use consultants here but fortraining and ICT. We useconsultants to build capacity butnot to raise revenue. We are theone that tax payers should see inthe front. We need the knowledge,the capability to collect revenueand we have done this for twoyears. Now we have seen that wecan do it on our own and so we donot need them any longer. Letthem go back to the backgroundand rest. If they have better ideasin the future, they can come backand sell to us. But it is only inthose peripheral areas.

But it is still a problem at thestate and local governmentlevels?

The last government did a lot tosanitise these problems. Statesand local governments can nolonger just wake up and put spikeson the road. There is a Bill, we willpresent to the new NationalAssembly, the document wentthrough a lot of negotiations. Some states that were authorisedby the former Act to collect 13taxes, suddenly expanded it to 69.We have to sit down with them- theMinisterial ImplementationCommitteee- called their membersand said, this is badadministration. What do we do? Sothey traded off some, so the oneson which they passed laws at theirstate level, we allowed them tokeep.For others they alsointroduced those taxes or levis tohelp grow their IGR. What we havetoday, I can assure you is a singledocument that prescribes to eachtier of government , the kind oftaxes it can collect.

There are issues with TaxHolidays. If a Nigerian companybuys an existing business, is sucha company supposed to enjoy taxholidays through the pioneerstatus policy?

It is not just the pioneer statusexemption. It is looking at theincentive regime in totality. I aman advocate of the governmentgiving some level of incentives toattract investment into thiscountry. Remember , we are nota capital exporting country butcapital must flow into ourcountry. Let me give you anexample, those years when we hada lot of DFIs coming into thecountry, those capital inflows keptour foreign exchange in check. Forthose four or five years, we weremoving between N140 andN150=$1. And we werecelebrating . The moment thoseforeign investments stoppedcoming into the country, you cansee the repercussion today.

There are other things that havecontributed to the current foreignexchange situation but that is onecritical point. What are wesaying about incentives? Thereis a law. That law says this 73sectors will enjoy pioneerincentives. It says investors areentitled to three years tax holidayand additional 1 year plus anotherone year, subject to satisfactoryperformance.

get them to pay. We use banks. It isa tripartite arrangement. We toldthe banks, you are collectingrevenue for us , it is a collectiveresponsibility. This tax payer isnot complying. He is owing usso much, can you place a lien onthe account of that tax payer?

They do not have a choice, theywill do it and it is happening. Thatis better than to say because youhave not paid, let us go to court. Why am I going to waste my timein the court? At the end of the day,when judgment is given, we are stillcoming to sit down together. Sowhat we are doing on debtmanagement right now ispromoting compliance.

There is no sense in going toseal up businesses anymore.

In everycountry, theinformal sectoris the engine ofgrowth but ifyou do notpartner withthem, you maynot be able toaccess anythingfrom them

•Samuel Ogugbesan

CMYK

34 —Vanguard, MONDAY, JUNE 22, 2015

CMYK

E-Commerce

Mark Essien is theC h i e fE x e c u t i v e

Officer of Nigeria’s largestonline hotel booking portal,Hotels.ng. His companyrecently secured a $1.2 millioninvestment, making it the onlyNigerian e-commerce companyto have 90 percent local equitystake. In this interview withJONAH NWOKPOKU, hespoke on how he managed thecompany to be able to attractsuch investment and how otherstart-ups can learn from hisexperience to also attractinvestors. Excerpts:

Hotels.ng is graduallybecoming a household namein the hotel industry barelytwo years since you started it,what really inspired you intothis line of business?

Building the nexus ofanything that involves the realworld and the online andsomething like this issomething that is basicallyfacilitating people that arelooking for hotel online. Beforewe came along this was notpossible. People enter a townand virtually had to findsomeone to take them to ahotel. And they go there blindlybut now that we have built thisplatform, anyone can go onlineand look at the pictures of thehotel and then decide to makethe reservation because theyalready know that the roomsare available when they getdown there. I think, observingthat this opportunity exists inNigeria to build something ofthis nature is what inspired usinto this business.

Given your experience sinceyou started, how would assessthe Nigerian hospitalityindustry in relation to theemerging e-commerce sector?

The hospitality industry isworth about $3 billion annuallyin Nigeria alone. It is a verybig industry. And generallyyou will see that when youcompare e-commerce andhospitality, e-commerce isalways the first online marketto take off. We have seen it inSouth America, India andmany other emerging marketsand then the second one thatusually takes off is the travelindustry because travel is mademuch easier by pre-bookingsand doing this in a way thatyou can compare prices. Youcan see comparing yourexperience of going to theairport to buy ticket to doing itonline before you travel, thereis a huge difference. This is thesame thing with the hotel.Instead of walking aroundthree to four different hotelstrying to figure out, it is veryobvious that if you do thisonline, you end up withsomething much morecomfortable for you. In thatsense, as e-commercedevelops, travel follows veryquickly behind.

How Nigerianstart-ups can attractinvestors – EssienYour company recently

secured an investment of $1.2million, how were you able todo this in a landscape likeNigeria where there is scarceinvestible funds for start-ups?And how do you intend toutilise this fund?

The investment we receivedis a good validation of the workwe have done so far. RecentlyI was looking at the hot start-ups of 2014 and in the list weare the only one still alive. Wehave been able to stay alivethrough these turbulent twoyears and now we have beenable to build a profitablecompany and now thisinvestment. After the newVenture Capitals, partners arecoming in numbers seeingwhat we have been able to do.This is a vote of confidence.This is because they believethat this business can go far.The people coming in now,they are not just coming inwith money; they are alsocoming in as partners in thebusiness. They are coming aspeople with big funds. So, theymay be giving us $1.2 millionbut they have $500 million intheir fund and typically as thebusiness expands, you don’tend up raising money once, asyou have more capital needs,you are going to raise moneyagain from your existinginvestors. This investment nowis positioning us to expandlocally and to also expandacross West Africa. As we needmore money to also expandacross other parts of Africa, we

will be able to raise from eitherexisting investors or newinvestors that like the growththat we are showing. So Ibelieve that having thisinvestment now has changedus from one of the start-ups toa viable business that is wellpositioned to take advantage ofthe opportunity that lie aheadwithin the continent.

Despite the challenges in theindustry, you have been ableto survive thus far, what haveyou done differently and whatcan other start-ups learn fromthat?

There is something I keep onpreaching which is the fact thatit is the market that drives yourbusiness. If there is no market,there is no business. If youbring out any product and it iswonderful but there is nomarket, there is nothing youcan do to make that market sellbut if there is a market, people

will buy even if it is a badmarket. Anybody selling in themarket will tell you that. Sowhen you are building a start-up, the first thing you need todo is to make sure that you arein the right market and if yousee signs that you are not inthe right market and that it isnot moving, get out of thatmarket and provide somethingthat works. So, one of thethings we did right and this wasnot because we are geniuses,is that we ventured into theright market from thebeginning. We did not dosomething that was notworking, we did something thatwas working and it was allabout how do we make it workbest? And it terms of making itwork best, we are not the first.I think there were one or twosmall players before we cameand when we came we justdominated over them. Andwhat did we do differently fromthem?

There are two things that areimportant. First, when you arestarting a business, you haveto tell your story, if you do that,people read about it, they knowabout you, they get a feelingof who you are so that you willbe able to attract funding. Thatwas what we were able to dofast. Right from the beginning,we did that because wefocused on entering the rightmarket, demonstrating topeople that we can actuallygenerate traction to what weare doing and then tell the storyso that people out there thathave money and are willing toinvest can now start talking toyou and get the details of howthey can come in. So, doingthings and staying quietdoesn’t help people grow, youhave to tell your story so thatpeople who may partner withyou will know about you.

OperationsThe second aspect is that you

need to be good in operations.Many people cannot forecastwhat is going to happenmonths down the road. So, theyhave a certain amount ofmoney in the bank, now youknow your money will last youfor three months and you havea certain number of staff. Threemonths earlier, you have to cutyour staff strength so that yourthree become six months andyou have time to recover. Butsome people will wait until thelast month before they willbegin to consider reducingteam size but then it will be toolate. Such decision has to bemade early. This is because,when you are in a corner, youdo not win by exploringbecause even if you find whatis working, you do not havemoney to exploit it. You do nothave enough knowledge yet.You have no run way. So youhave to focus on what isimportant and once you do that,you will grow from there.

When you arebuilding astart-up, thefirst thingyou need todo is to makesure that youare in theright market

eTranzact holds forumto drive mobilebanking innovationseTranzact International

PLC, has held a mobilebanking Masterclass inLondon, England titled “TheFuture of Mobile BankingMasterclass”.

The event provided aplatform to discuss newinnovations in mobile bankingtargeted at making mobilebanking more about thecustomer and launching newinnovations to make thecustomer on boarding processeasier.

Topics discussed ranged fromhow to improve the mobilebanking experience forcustomers and innovations inproviding support forcustomers, to unveilingeTranzact’s improvements inthe on boarding process andmobile architecture of themobile banking application.

Speaking about what thebanks and their customersshould begin to seeimmediately after the session,Chief Executive Officer,eTranzact International PLCMr. Valentine Obi, said: “To us,every product we build isultimately about the customerwhether at the corporate orindividual level, and we wantto ensure that we are meetingtheir needs both locally andglobally, pushing ourselvesevery day."

Amazon signs booksales deal with PenguinAmazon.com Inc. has

signed a digital and printbook deal with PenguinRandom House LLC, the last ofthe five biggest publishers toreach an agreement with theWeb retailer following a disputelast year over e-book sales.

The contract is for sales in theU.S. and U.K. The companygave no other terms. StuartApplebaum, a spokesman forPenguin Random House,declined to comment beyondsaying that the publisher is “stillin business with Amazon.”

The agreement followsprevious deals betweenAmazon and Harper CollinsPublishers, Hachette BookGroup, Macmillan Publishersand Simon & Schuster. Amazonand Hachette were locked in apublic spat for much of 2014because of disagreements overthe price of digital books andshared revenue. Amazon hassought discounts, arguing thatlower prices boost sale volumesand result in more total income.Book publishers resisted themove, while authors opposedAmazon’s tactic of removingtitles from its Web store duringthe dispute.


Aviation

THE International CivilAviation Organisation

, ICAO, said Nigeria wasgiven a pass mark after athorough audit of the nation’saviation industry which justended because the auditteam discovered there havebeen massive improvements inthe security systems at theairports..

Disclosing this developmentto newsmen, leader of the teamof the ICAO auditors, Mr.Steven Neu said that Nigeriaperformed excellently in the 9days audit conducted on thenation’s aviation securitysystem.

Neu noted that Nigeriascored a pass mark of 90percent stressing that he wasvery impressed with theNational Security Programmeas there were very minimal“open items to be closed”.

He said, “Nigeriasurpassed our expectations. Wereviewed the 2008 audit beforewe commenced this exercisebut we discovered there havebeen massive improvements inthe security systems at theairports.”

‘’To Nigeria’s credit all theminimal open items wereclosed immediately. The auditwas focussed on the eightcritical elements”. he added.

According to him, Nigeria isone of the first countries in theworld to go through theUniversal Safety AuditProgramme ,USAP, ContinuousMonitoring Assessment

,CMA, Audit.While applauding all the

security agencies at the airportsacross the country, the likes ofthe Nigerian police airportcommand, DSS, Port HealthServices, Air Force, NigerianDrug Law enforcement Agency(NDLEA) and Quarantineservices, The ICAO bossstressed that the USAP CMAactivity had been completedwhile draft findings andrecommendations would beprovided to the RegulatoryAuthority.

“After 60 days ICAO willforward the USAP CMA auditreport to Nigeria. In 30 days,Nigeria will submit itscomments on the audit reportif any. Within another 30 days,the country will submit to ICAOits Corrective Action Plan(CAP)” he said.

Meanwhile, DirectorGeneral, Nigerian CivilAviation Authority, (NCAA),Capt. Muhtar Usmanappreciated the auditors forconducting a very thoroughICAO audit.

Capt. Usman revealed thathe was happy that Nigeriaperformed better than she didin 2008 adding that the countrywould not rest on her oars butwill continue to ensure that ourair transport operation is secureand safe.

“The Nigerian Civil AviationAuthority, NCAA , will sooncommence preparation for theICAO’s Universal SafetyOversight Audit Programme(USOAP) coming up inNovember, later this year”.

“While the USAP takescognisance of states’ security atthe airports, the ultimate goalof USOAP is promoting globalaviation safety through regularaudits of safety oversightsystems in all ICAO memberstates” Capt. Usman affirmed.

Aviation security audit: WhyICAO gave Nigeria pass mark

THE contractor handling the construction of

a new terminal at the MallamAminu Kano InternationalAirport (MAKIA) Kano, CivilEngineering ConstructionCorporation ,CCECC, would complete the project onschedule and hand it over inMarch 2016. The permanentsecretary in the ministry ofaviation, Mrs. Binta Bello,has revealed

Bello said this in Kanowhere she inspected projectsat the airport. She saiddespite the seemingly slowpace of work on the terminaland other ones in otherlocations, there is no cause to

doubt the completion of theprojects on schedule.

According to her “Theproject manager at MAKIAhas assured me that he willhand over the job in March2016. They will finish it; theyhave all the materials. If they,who are doing the work, saythey will deliver by March,you have no course to doubtthem.

“The only place where wehad challenges was Lagos.They had the initial challengeof site. And when theyovercame the challenge, theymobilized to site and work isin progress. At other sites,there have been no problems”said Bello.

The China’s Exim Bank isfunding the construction of

the international terminalslocated at Lagos, PortHarcourt, Abuja and Kanoairports at the total cost of$500 million.

Meanwhile, like thesituation at the Lagos andPort Harcourt airports, localcontractors working ondifferent projects at MAKIAhad suspended work due tolack of funds.

Whichever project site thepermanent secretary and herentourage visited, only ahandful of artisans were seenidling away while their bosseswere nowhere to be found.

Patmoz Nigeria Ltd which isin charge of building theairport’s fire station hadsuspended work on theproject saying it had

exhausted what it got asmobilization fee. Althoughone of the company’s juniormanagers did not disclose thecontract sum because “onlymy boss has the filecontaining the agreement”, itwas gathered that thecontractor received paymentfor the work around October2014.

Similarly, Jameck WestAfrica, which constructs thegeneral aviation terminal,said the project which is about60 per cent completed hadbeen suspended due to non-availability of funds.

Responding, the permanentsecretary assured that thecontractors would bemobilized to sites when “thereis availability of funds.”

“As soon as we are able tomobilize funds, we will callthem back to sites. They saidthey have not been paid; wewill look at it and once fundsare available, we will paythem,” she said.

By LAWANI MIKAIRU& DANIEL ETEGHE

New MAKIA terminal, others to becompleted on schedule — BELLO

THE three leading unions inthe Nigerian aviation industryhave expressed theirdispleasure about the plannedmerger of the aviation agenciesand the ministry of aviationwith the ministry of transport.

The unions who made theirposition known insisted thatthe merger of the agencies andthe ministry by the newadministration was not apanacea to the myriad ofproblems facing the sector.

The unions; the NationalUnion of Air TransportEmployees, NUATE, theNational Association of AircraftPilots and Engineers, NAAPE,and the Air Transport ServicesSenior Staff Association ofNigeria, ATSSSAN, in a jointstatement signed byr CaptainTarmongu , ComradesOlayinka Abioye, and AbaOcheme respectively, said thatmerging the ministry withtransport would weaken its performance.

The unions recalled that theministry was merged with theministry of transport during theregime of former PresidentOlusegun Obasanjo, but didnot yield the expected result,which later led to its de-merging by late PresidentUmaru Yar’Adua. They insistthat the merging of the twoministries was as a result of ill-advise from some “cabals” inthe aviation sector and advisedPresident Buhari of the anticsof the cabals.

The Managing Director ofDana Air, Jacky

Hathiramani has urged thenew government of PresidentMuhammadu Buhari toreview current multidesignations approved forforeign carriers as most of themoperate without reciprocityfrom their countries. This is justas he commend Buhari on hishistoric victory at the polls andeventual inauguration as thePresident.

According to SamuelOgbogoro, Head CorporateCommunication, Dana Air,Hathiramani said thatPresident Buhari’s message ofCHANGE resonates with thevision of Dana Air, and theyearnings of many in theaviation industry, given that President Buhari had promisedto appoint technocrats to runthe different aspects of theeconomy including theaviation sector.

By LAWANI MIKAIRU

Review currentReview currentReview currentReview currentReview currentmulti designationmulti designationmulti designationmulti designationmulti designationfor foreignfor foreignfor foreignfor foreignfor foreigncarriers, carriers, carriers, carriers, carriers, DanaDanaDanaDanaDanatells FGtells FGtells FGtells FGtells FG

Aviation unionsoppose plannedmerger of ministries

VISIT - From right: Vice President, Prof Yemi Osinbajo; Mr. Oti Ikomi, Executive Vice-Chairman,Proton Energy and Mr. Adrian Mucalov, Director, Actis, UK during a courtesy visit on the VicePresident by Proton Energy in Abuja.

CMYK


Micro-Finance

"N12bn currency scam:N3.95b destroyed with acid,water, court told.”

THE NATION, June 12,2015, p 1.

The story went on toreveal that whatstarted as an N8

billion scam had escalated toN12 billion scandal. Mostprobably, that might noteven be the end of the story.Most likely other discoveriesor revelations will increasethe amount and how long theeconomic sabotage had beengoing on within the bankingsystem – with the CentralBank of Nigeria, CBN, as theepicenter of this financial waragainst Nigeria by a fewndividuals in the bankingsector.

Last week’s column endedwith the assertion that sincemoney is regarded as the rootof all evils, then banks mustbe the devil’s preferredworkshop because nowhereelse are individuals, like allof us, exposed to thetemptation to “help”themselves to “wealthwithout work” (apologiesGhandi) as in banks. Theaccused revealed, so far, arejunior staff. The amountstraced to them don’t add upto N8 billion. So that should

CBN and the N8bn scam (2)tell us something.

Among the questions weshould be asking are thefollowing. Who assigns staffto this sensitive task? Whatcriteria are used in selectingthose assigned? And, why arethey not subject tocontinuous investigation?Also, how on earth canjunior staff of banks have somuch in their accounts withany branch without anyonealerting the authorities?Finally, were all these peoplesuch loners in their banksthat none of their colleagueswas aware of theirstupendous wealth or wasthere an active conspiracy ofsilence in every branch of thebanks involved?

Let us start with the firstquestion – which shouldpoint to collusion by seniorbank officials. It is a fact,easily demonstrated that allthe staff of mostorganisations, private orpublic, eventually, get toknow the assignments whichare most and least lucrative.Competition for the mostlucrative becomes almostcut-throat. The senior staffresponsible for postinginvariably trade on this

knowledge. They post onlythose who will render“returns” from the illegalself-enrichment that wouldfollow. Customs staff postedto the Murtala MohammedAirport or Seme invariablylive beyond their legitimateincomes. Posted out, theyfight with everything at theirdisposal to return to thelucrative posts. The same istrue of Police Officers, NavyCommanders etc.

There is absolutely noreason to think that the same

system of patronage does notoperate in the bankingsector. It is quite possiblethat for each of the juniorstaff so far apprehendedthere is a senior staff whoarranged the postingknowing what would occurand benefiting from it. Thatwould partly explain thehuge gap between the N8-12billion involved and the sumtotal of the assets found withthe culprits at the moment.

At the risk of beingaccused of trying to

teach the prosecutors theirjobs, one might want tosuggest an approach oftenadopted by US prosecutors.They offer to turn one or twoof the accused to witnessesfor the state in exchange forlighter sentences if theywould provide vitalinformation which will leadto the BIG people whoprobably master-minded thescam in the first place.

Looking at the staffinvolved, including driversand security staff, it wouldappear that only one or twosenior staff who couldcoordinate the activities ofthese people and remove the

security cover could haveplanned it. Those now in thenet might be small “fish” –while those who received thelion’s share of the loot areplanning their escape or havealready fled Nigeria.

Finally, the conspiracy ofsilence, which made itpossible for the scam to goon for so many years, musthave involved some pay-offsto other staff members tobuy their silence. Generally,it is almost impossible forthree or four people to keepa secret of this magnitude foryears. When we now havealmost a dozen peopleinvolved, then they need abroad base of support fromother staff in all the branchesinvolved; and there must bean arrow-head ensuring thatthe conspiracy of silence ismaintained. And, that canonly mean regular pay-offs toother staff members in thebranch.

At the moment, the EFCC ismerely scratching thesurface. They would nothave solved the riddle untilthey can account for almostN7.5 billion.

The National Associationof Microfinance Banks

(NAMB) is bedeviled byinactive website, to makematters worse is the Presidentwho do not pick calls orrespond to Short MessageService (SMS).

The latest information onthe website was posted onJuly 8, 2014 with headline:“CBN assures NAMB ofsupport; MFBs veritable toolfor nation building – CIBNPresident; NAMB elects newofficers and another postedon April 18, 2013 withheadline: “Executivesecretary warns of theactivities of fraudsters,”among others.

From indications, it is aboutone year since the associationposted information on itswebsite.

Vanguard findings show

NAMB goesincommunicadoWebsite inactive, President shuns press

By PROVIDENCE OBUHthat MfBs that are membersof the association are evenmore active on their websitethan the mother association.Example is LAPOMicrofinance Bank (MfB)which latest post was in Mayand Accion MfB in February.

A research into the benefitsof making websites activeshows that: “The moreengaged a website visitorsare, the more time they spendon the site.

The more time they spendon the site, the more likelythey are to feel connected tothe brand. The moreconnected they feel to thebrand the more they willregister, tell their friends andkeep coming back for more.These things don’t work in avacuum, they must weavetogether to work seamlessly.”

NAMB’s VisionThe association has a

vision to be theinternationally respectedindustry representative ofNigerian Microfinance Banksby simulating innovative andsustainable microfinancepractices that guaranteefinancial inclusion and wealthcreation for the economicallyactive poor

NAMB must wakeup, website shouldnever be staticTo encourage more

participation and patronageof this sub sector, it isimperative that theassociation ponder on these:“You can’t fix a leaky faucet ifyou don’t know where thedrip is coming from,similarly, how can you fix a

website if you don’t knowwhere your problems andyour successes lie? Siteanalytics are critical if youwant to increaseconversations on your site.

Furthermore, most directorseither don’t have thecapabilities or aren’t usingthe key reports that providecrucial information infiguring out what is workingfor their site and what isn’t

Analyze your site. Use theinformation. Make changes!Websites should never bestatic. You can always tweakto find what peaks theinterests of your users andthey will always be happywhen new information comesalong.

Importance ofwebsiteAccording to

Superanalyst.net, “The mainreason it is important forbusinesses to have a websiteis how people are likely tofind you. These days mostpeople will go online andresearch products andcompanies before they makea purchase, if you don’t havea website you are missing outon all of potential business.

“A website is also

important because it helpsyou establish credibility as abusiness. There are actuallystill quite a few smallbusinesses that don’t have awebsite and without one thisis exactly what they willremain. If you don’t have awebsite that you can referpeople to, potentialcustomers are going toassume that you are a smalltime company that does nottake their business seriously.Once you establish thisreputation it is going to behard to make sales.

“Clearly there are still a lotof small businesses that donot have websites, there arevarious reasons for this butmostly it comes down to thebelief that they are expensive.It is rather surprising howmuch small business ownersbelieve a website will costthem. In truth a website canbe built for very little moneyand if you are on a tightbudget you can even get freewebsites. Remember youdon’t need a giant tenthousand page website foryour business, just a simplesite that tells people aboutyour company and yourproducts will be more thanenough.

It is quitepossible that foreach of thejunior staff sofar apprehendedthere is a seniorstaff whoarranged theposting


Economy

Nigeria, South Africa, Egypt crashin ranking on ICT for business

BY EMEKA ANAETO

Africa’s three leadingeconomies, Nigeria,South Africa and

Egypt, have recorded massivedrops in their ranking on theglobal Information andCommunications Technology(ICT) development withregards to NetworkedReadiness Index (NRI). Theindex is managed by theWorld Economic Forum(WEF).While Nigeria’s positiondropped seven places to119th, South Africa fell fiveplaces and now ranks 75thwhile Egypt dropped threeplaces and now ranks 94th.Though ranking below SouthAfrica, Kenya’s positionappears more impressive as itactually climbed six places to86th position in the globalrecord.

NRI is a crucial indicator ofa country ’s ability toimplement and take fulladvantage of ICTs inbusinesses, economicdevelopment and globalcompetitiveness.

2015 edition of the GlobalInformation TechnologyReport (GITR) is released ata time when many economiesaround the world arestruggling to ensure thateconomic growth is equitableand provides benefits for theirentire populations.

In the report, ManagingDirector of WEF, Espen BarthEide, said ‘’advancedeconomies have not yetreached their full potentialand they struggle withpersistently highunemployment, risinginequalities, and fiscalchallenges. Emerging

markets and developingeconomies are facing strongerheadwinds than before andneed to adjust theirdevelopment models toensure economic growth anda more broad-baseddistribution of gains’’.

As a general-purposetechnology, Eide explained

that the impact of ICTs extendswell beyond productivitygains and acts as a vector ofsocial development andtransformation by improvingaccess to basic services,enhancing connectivity, andcreating employmentopportunities.

Published by the WEF inpartnership with Cornell

University and INSEAD since2001, GITR has measured thedrivers of the ICT revolutionusing the NIR.

For each of the 143economies covered GITRseries allows areas of priorityto be identified to more fullyleverage ICTs fordevelopment.

BY FAVOUR NNABUGWU

The Nigeria InvestmentP r o m o t i o n

Commission (NIPC) hasbegan a review of the currentinvestment laws with a viewto making it more attractiveto foreign investors while alsostrengthening NIPC’sinstitutional capacity todeliver on its statutorymandate. The affected lawsare NIPC Act No 16 of 1995and the draft InvestmentPromotion and ProtectionAgreement (IPPA).

An Inter-MinisterialCommittee comprisingofficers of the Internationaland Comparative LawDepartment as well as theLegal Drafting Department ofthe Federal Ministry ofJustice, an officer from theInvestment Department of theFederal Ministry of Industry,Trade and Investment andrepresentatives of NIPC hasbeen inaugurated for thispurpose.

Executive Secretary ofNIPC, Mrs. Uju Aisha

Hassan Baba stated that oneof the key strategies beingadopted to face thechallenges in investmentpromotion is the sharpeningof the promotional tools suchas the IPPA which dealsprimarily with the admission,treatment and protection offoreign investment.

IPPAs usually coverinvestments by enterprises orindividuals of one country inthe territory of its treatypartner and ultimately boostthe confidence of potentialinvestors.

She explained that the needfor review of the country’sIPPA and investment law wasto develop a legal andinstitutional framework in linewith current globalinvestment and economic

trends that will enable directand aggressive strategies forforeign investment inflows.

Nigeria, she said, “is infierce competition with otherdeveloped and developingcountries for global capitalhence must develop specificpromotional tools to boost itsmarketing strategies”.

Aisha Hassan Baba, servedas Chairman of Nigeria’sInter-Ministerial Committeeon the negotiation of IPPAsand had prior to herappointment as the ExecutiveSecretary of NIPC, ferventlycalled for NIPC to drive thereview process of thedocument as the Nation’sforemost investmentpromotion agency that relieson the incentives containedin the IPPAs.

NIPC sets toreviewinvestment laws

•Mrs. Uju Aisha Hassan Baba, Executive Secretary of NIPC

Advancedeconomies havenot yet reachedtheir full potentialand they strugglewith persistentlyhighunemployment


CMYK

Insurance

The interim board andmanagement of

International Energy Insurance(IEI) Plc says its focus is tobring stability and return theorganisation to strongercapacity to be able to competeeffectively and meet itsobligations.

In this vein, the Board whichassumed management of theCompany about three weeksago following the dissolutionof the former board and theinauguration of the interimboard by the NationalInsurance Commission(NAICOM) says it hasembarked on restructuring ofthe company’s operations,relationship with brokers aswell as investmentamortization.

Mohammed Ahmad, interimboard chairman, who disclosedthis during a brokers forumorganised by the company inLagos said the company ishealthy and have the capacityto meet all its obligations. Theintervention of NAICOM is to protect policyholders,investors and otherstakeholders interests.

“Regulatory intervention wasto ensure that individualinterest does not destroy theinstitution, particularly thatthere were squabbles amongstboard members.”

He stated that interventiondoes not amount to stress onthe company, but could be forthe interest of the industry toavoid laying a bad precedence.

Ahmad who has many yearsof experience as a regulatoracross the financial servicesindustry including CBN, NDICand Pensions where he retiredas pioneer Director General ofthe National PensionCommission, says “We are nothere to close IEI, but ensurethat actions of the board doesnot undermine the institution.

“We gave you license notbecause of the money you paidbut because you have promisedto exhibit good character,integrity and good corporategovernance.

“We are not here to stay long,but to finish our assignmentwithin the specified time of firstsix months,” Ahmad stated.

He assured the brokers thatthe company will look at allclaims outstanding and pay upwithin the shortest possibletime. In another development,the company at the BrokersForum, unveiled their onlineMarine Cargo product, meantto assist importers do businesswithout hassles.

THE National InsuranceC o m m i s s i o n

(NAICOM) says it is awaitingresponses from 13 insurancecompanies over issues ontheir accounts before theCommission approves ofthem.

The regulatory body toldjournalists in Ilorin that 40insurance companies have sofar submitted their accounts tothe Commission well aheadof the June 30th deadlineout of which 13 are yet to get

back to NAICOM.Section 26(1) of the

Insurance Act 2003 stipulatesthat every insurer shall notlater than 30th June of eachyear submit to NAICOM, abalance sheet duly auditedshowing the financialposition of the insurer and itssubsidiaries at the close of thepreceding year together witha copy of the relevant profitand loss account which theinsurer is to present to itsshareholders at its annualgeneral meeting.

Director of Supervision of NAICOM, Mr Nicholas

Opara said that out of the40, the Commission hasapproved 26 accounts of thecompanies while 13 of themare yet to get approval due toobservations made by theCommission which thecompanies must correctbefore they get their accountsokayed and one is still underreview by NAICOM.

Opara said that NAICOMis waiting on the 13companies to address theissues observed in theiraccounts and submit back forapproval.

He said, “40 insurance

companies have alreadysubmitted their accounts toNAICOM. And out of the 40,26 have been duly approved.NAICOM made observationson 13 of them for correctionsby the companies while oneis still under review”

In what seemed like avaledictory message from theCommissioner for Insurance,Mr Fola Daniel whose tenureends in August this year, theinsurance industry has hugepotential that could matchwith South Africa insurancesector.

He thanked the media forthe role they played inpropagating insurance whichhas now become a vital sectorin economic development ofthe country.

IEI boardtargets stability,

strongercapacity

Synergy with media deepensinsurance awareness — NAICOM

By FAVOUR NNABUGWU

THE National InsuranceC o m m i s s i o n(NAICOM) has said

that the media serves as a tooland a partner in fosteringgrowth of the insurance sector.

Commissioner forInsurance, Mr. Fola Daniel,at the 8th seminar forInsurance Correspondents inIlorin, Kwara State said theseminar, which began in 2009,has deepened the synergybetween the sector and themedia in the last eight years.

He said that the seminarhelped a great deal to fosterstronger relationship with themedia who help educate thepublic on the importance ofinsurance.

“This forum has afforded usthe opportunity to reassessourselves and relationshipwith each other and in theprocess, explore new ways offorging stronger bonds of

cooperation betweenmembers of the press and thecommission.”

“Over the years, theCommission has had asustained mutually beneficialrelationship with the media.For instance, we have not hadserious reasons to disagreewith reports about theCommission in the media.The Commission shallcontinue to acknowledge andappreciate you in thisregard,” he said.

The InsuranceCommissioner also addedthat it has organised over 200workshops and trainingprogrammes for insurancepractitioners and journaliststo expand their knowledge

about the sector. According to him, “The

objectives of the traininginclude engendering betterworking relationship withmedia practitioners andpublic awareness; to addressmedia on latest policies anddevelopments and curb badpress among others,” he said.

On his part, DirectorGeneral of the NigerianInsurers Association, NIA, MrSunday Thomasacknowledged the support ofthe media though sharedsome observations which hehoped would change withtime.

Thomas said, “Effectivedissemination by the media of regulatory policies has ease

understanding andcompliance by stakeholders;the media always act indefense of the policyholdersto preserve their rights;agenda setting by the mediahas always put the regulatorand the operators on theirtoes; cooperation with themedia, creative thinking hasincreased in the insurancesector.” Thomas noted that themedia always remind theindustry of promises made,agenda set and policesintroduced that have not beenreneged, followed orimplemented.

He admitted that the effortsof the media has assisted instabilising the insuranceindustry

...Awaits 13 insurance companies’response on accounts

By FAVOUR NNABUGWU

AGM - From left: Transcorp Ughelli Power Limited (TUPL) Directors Muhammed Risqua and Peter Hertog; CEO AdeoyeFadeyibi; Board Chairman Tony O. Elumelu, CON; Transcorp Plc Group President/CEO Emmanuel N. Nnorom; and TUPLDirectors Sylvester Monye & Victor Osadolor during the 2nd Annual TUPL AGM


CMYK


Tax Matters

The Value Added Tax ActCap V1 LFN 2004 (asamended) imposes a taxknown as Value Added Tax(VAT) on taxable goods andservices. Part 2 of the FirstSchedule to the Act onlyexempts servicesrendered by Communitybanks, Peoples bank andMortgage institutions fromVAT. Accordingly, all banksand financial institutions,except those exempted, arerequired to charge VAT onservices rendered by them totheir customers and accountfor same to the FederalInland Revenue Service. Thisis in line with Section 2 of theAct, which stipulates that “thetax shall be charged andpayable on the supply of allgoods and services (in thisAct referred to as “taxablegoods and services”) otherthan those goods andservices listed in the FirstSchedule to this Act.

Definition of Bank andother Financial Institutions

These are legal entitiesincorporated under theCompanies and AlliedMatters Act (CAMA) of 1990and engage in banking andfinancial activities as definedby the Banks and otherFinancial Institutions Act(BOFIA), 1991. They arecompanies within thefinancial sector of theNigerian economy and areeither publicly quoted orprivate companies. Banks willordinarily include commercialbanks, merchant banks anddevelopment banks whileother financial institutionswill include; finance houses,insurance companies, re-insurance companies, stock-brokerage firms, investmentcompanies and financialconsultants.

VAT LiabilityBanks in particular, charge

commission, fees, or othercharges for services renderedto their customers. VATcalculations are expected tobe based only on the chargesmade for services rendered. Itshould however, be notedthat the focus of VAT is on thecharges levied on customersfor the consumption ofservices rendered by Banks.

The provision of loans andadvances does not in itselfconstitute a vatable servicebut there are other ancillaryservices to the provision ofbank loan/advances or bankoverdrafts, which are vatable.The documentation andperfection of loan/overdraftagreements are examples ofsuch ancillary services andfees charged, which wouldattract VAT. The resultant

VAT on services of banks andother financial institutions

interest chargeable on theloans and overdraft ishowever not vatable.

Insurance companies’brokers/agents earncommission, loss adjustersearn fees, surveyors earnfees, brokers earn commissionand agents earn commissionfor various services renderedto the Insurance Companies.The services which generatedthese income are vatableservices, and even thoughthe premium received onpolicies is not vatable as itrepresents cost of risk to theinsured, the commission paidto brokers/agent frompremium will attract VAT; withthe burden of VAT beingborne by the insurancecompany itself.

Vatable Services Renderedby Financial Institutions

In arriving at whatconstitutes vatable financialservices, a distinction shouldbe made between activitiesthat constitute return oninvestment and consumptionof services rendered byfinancial institutions. Allcharges arising from theservices of banks andfinancial institutions willordinarily attract VAT andthey include among others,the following:

Commisssions/feescharged on forex trading orremittance;

Commission on turnover(COT), ledger fees etc;

Legal and other feeschargeable on leasearrangements;

Fees charged for advisoryservices e.g. mergers andacquisition, financial strategycounseling etc;

Fees chargeable on public/private issues;

Debt conversion fees;Fees/commission on asset

trading;Fees earned on fund

management;Fees and commissions

earned on letters of credit/documentary collection tofinance import/export;

Commissions on sale ofBankdrafts/certified cheques;

Fees chargeable on stock-brokerage and trust services;

Commissions paid tobrokers, reinsurers,underwriters and otherinsurance agents by aninsurer.

Services of Banks and OtherFinancial Institutions notLiable to VAT

A simple criteria fordetermining whether aservice is vatable or not is theidentification of thoseactivities that constitutereturn on investment asdistinct from those thatrepresent consumption of

are taxable with the exceptionof the services of PeoplesBank, Community Banks andMortgage Institutions whichare exempted by the VAT Act.These Banks and OtherFinancial Institutions are toregister for tax with therelevant tax office and obtainTIN. VAT returns are to bemade regularly to the

relevant tax office withintwenty one (21) days afterthe month of transaction.

Accounting Procedureand Records to be keptby BanksThe mode of operation

in the banks does notpermit the issuance of taxinvoices to customers. TheVAT charges therefore haveto be reflected in thecustomers’ statements ofaccounts in order to enhancedisclosure and easyverification by tax officers.Banks and other FinancialInstitutions are required toadopt the following simplemethods of recording theirtransactions for VATpurposes:

(i) When any service isidentified as vatable, internalentries are raised by the Bankfor the cost of the service plus5% VAT.

(ii) The Bank is expected todebit the account of thecustomer accordingly with thecost of the service plus the 5%VAT charged.

(iii) Credit the Incomeaccount of the Bank orInstitution with the incomeelement of the chargeexcluding the VAT

(iv) Credit the FIRS VATaccount in the particular Bankor Institution with the 5% VATdeducted from (ii) to arrive at(iii).

Section 16 subsection (b)provides that where input taxexceeds output tax, thetaxpayer will be entitled torefund of the excess tax fromthe FIRS on production ofsuch documents as the FIRSmay, from time to timerequire. With regards tobanks and other financialinstitutions, this is notapplicable because of theprovision of Section 17 ofValue Added Tax Act onallowable input tax, whichprovides that input tax on anyoverhead, service, andgeneral administration of anybusiness which otherwise canbe expended through theincome statement (profit andloss accounts) shall not beallowed as a deduction fromoutput tax.

It is a common knowledgethat the bank and otherFinancial Institutions renderservices; they do not producegoods and therefore regardedas final consumer of thosegoods purchased or servicesrendered to them. In thisconnection, all input VATpayable in respect of assetspurchased for use in thebanks and other Financial

Institutions should be addedto the cost of the assets onwhich capital allowances maybe claimed. Similarly, all VATpayable in respect of servicesconsumed by the bank shouldbe regarded as part of normaloperational expenseschargeable to Statement ofProfit or Loss Account. Underno circumstance should inputtax on such items be claimedor deducted from output taxcollected. Banks and otherFinancial Institutions cannotclaim or deduct any input taxsuffered. The entire amountcollected on behalf of theFIRS should be promptlyremitted in whole asprescribed by the law.

The Central BankThe position of the Central

bank with regards to VATpayment is not different fromthat of other banks in thesystem. The Central Bankperforms nearly all theservices listed in paragraph 4above and also acts as bankerto other banks. It is thereforeexpected that VAT would becharged on payments madeto it by the banks for vatableservices rendered to them.This makes it necessary forthe Central Bank to registerfor VAT purposes.

Offences and PenaltiesBanks and other Financial

Institutions have obligationsto fulfill under the VAT Actlike other taxable orregistered persons. Part V ofthe Act contains the list ofoffences and penalties to beimposed. These includeamong others:

Failure to register within six(6) months of the existence ofa bank;

Failure to issue tax invoice(debit note showing amountof VAT collected in the case ofbanks); failure to charge andremit VAT collected;

Failure to keep properrecords and accounts;

Rendition of incorrect orfalse returns.

For these offences, stringentpenalties are imposed tocheck possible defaults.

Banks and other FinancialInstitutions are taxablepersons within the provisionsof the VAT Act and all theirservices are vatable exceptthose specifically mentionedin the First Schedule. Bankofficials are strongly advisedto familiarize themselves withthe provisions of the VAT Act.Whatever is peculiar to anyBank or Financial Institutionin terms of procedures whichhas not been dealt with inthis circular should bereferred to the FIRS withoutdelay.

Finally, wherecomputerization has beenestablished and it is likely toskip these procedures, theFIRS should be notified of thesystem in operation and howit would take care of allprocedures without leavingout anything uncaptured.

services. The services ofBanks and other FinancialInstitutions that will notattract VAT include:

Premium on insurancepolicies;

Interest on loans/advancesand overdraft facilities;

Interest on savingsaccounts;

Interest on bank deposits;Dividends;Interbank placements; andProfit/gain on disposal of

government securities.

VAT Registration andRendition of Returns

Banks and other FinancialInstitutions are taxablepersons within the provisionsof the VAT Act and allservices rendered by them

Wherecomputerization hasbeen establishedand it is likely toskip theseprocedures, theFIRS should benotified of thesystem in operationand how it wouldtake care of allprocedures withoutleaving outanythinguncaptured.

Advertising & Promotions


CMYK

In Nigeria, corporate firmsoperating Experience

Centres across the countryemploy some front-line agentscommitted to achieve ‘best inclass’ customer service asdefined by the JD Powersurvey, a tool used to measurecustomer satisfaction.

The JD Power idea focuses ondefining and developing skillsand behaviours that arerequired by agents in order tomake interaction withcustomers effective, memorableand consistent as possible.

The first step was to developa simple competencyframework that summarised theimportant skills, knowledgeand behaviour required todeliver the customerexperience which included arange of performancestandards, such as the JDPower criteria, used to evaluatecustomer satisfaction.

However, over the pastdecade or so customers haveall become accustomed todealing with experiencecentres – whether it is to queryan electricity bill, order acheque book or complain abouta missing delivery.

They are part of the way welive today, and in many waysthey represent a significantimprovement over the ‘old’ wayof doing things, providing apersonal service at a time to suitus.

Millions have been investedin improving experience centreservice levels and efficiency,through sophisticatedtechnology, improved businessprocesses and complexperformance metrics.

However, experience centresoften achieve low levels ofcustomer satisfaction due to a

PPPPPororororortland metland metland metland metland metrics ftrics ftrics ftrics ftrics for eor eor eor eor experience centres,xperience centres,xperience centres,xperience centres,xperience centres,custcustcustcustcustomer satisfactionomer satisfactionomer satisfactionomer satisfactionomer satisfactionStories by PRINCEWILLEKWUJURU

poor interaction between theexperience centre staff and thecustomer. If we have beenguilty of focusing too heavilyon improving processes andsystems and ignoring the(more complex) human factor.?If this sounds familiar thenthere are lots to experience inthe new centre commissionedby Portland Paints and ProductsNigeria Plc, recently, owners ofthe Sandtex brand of paints.

As the Sales and MarketingManager, Mrs. Nnena Azuka-Onwuka put it at the unveilingof Sandtex experience centre at

Ifako, Gbagada: “We do not sellpaints, what we sell iscustomized colour services.The experience center is not allabout buying products, it’smore about you (Customers).”

She described the Center asa comfortable one-stop retailcenter where customers canaccess all products from thestable of Portland with expertcolour advice at no extra cost.Colours are available in over15,000 in the Crown UK rangeand over 1,000 in the Sandtexrange for immediate tinting. Whatever the consumer choice

of colours, our experiencecolours can match it, she said.

The new Center takes thebrands closer to the consumers,provider to full the need forsatisfying perfect paint finishthat come in textured, smooth,gloss, satin, matt and specialeffects.

Corroborating, the ManagingDirector, Mr. Femi Oguntade,represented by the FinanceManager, Mr. Jubril Shittustated: “our experience centeris a one-stop shop where youhave all Sandtex products withfive years guaranty.”

Speakers at the AdvertisersAssociation of Nigeria,

ADVAN organized peer to peer learning workshop havecounselled Nigerian marketersto consider the value of newmedia in their marketing efforts,as a means of newcommunications channel.

Embrace new media — ADVAN urges marketers

The speakers believed that asmuch as the social media isimportant, marketers shouldunderstand this and embracethe platforms for brand building,but not at the detriment of the traditional media as it is stillrelevant in the marketing space.

Onyekachi Onubogu,

Executive Commercial Director,Promasidor Nigeria Limited,gave the advice during theADVAN organized workshoptitled: “The changing role ofmarketing in digital economy,”saying that the workshop is aplatform provided by theAssociation for knowledgesharing with different expertson various subjects with theobjective to build the marketingindustry and marketing expertsthat will help grow Nigeria’seconomy. He also observed thatthe world and every marketerneeds to understand how toapply and use these tools inorder to remain relevant in themarketing world.

According to him, “Nigeria ismoving faster in terms ofdigitalization, use of socialmedia and e-commerce.”

Whilst noting that making theplatforms a fundamental part ofthe marketing mix at this timeis crucial. This he stated willmake advertisers become betterin what they are practising asthe world is fast changing andnobody knows it all.

Airtel Nigeria says the reputation of thefive brand ambassadors comprising

musicians, a comedian and an on-air-personality speaks volume for the brand.

The selection which was arrived at afterseries of consultation presents the musiclegend, TuFace Idibia; rap artiste Phyno;reggae dancehall singer, Patoranking; acomedian, Akpororo and renowned On-Air-Personality, IK Osakioduwa as brandambassadors.

Speaking on rational behind theirselection, the Managing Director and ChiefExecutive Officer of Airtel Nigeria, Mr.Segun Ogunsanya, said that the selectedambassadors for the new Airtel brand; whoare tagged Smart Icons are respectedmembers of the society who havedistinguished themselves in their respective

Our ambassadors' reputation speaks volume - Airtel

fields and as a result, have now becomeforces in the entertainment sector.

He said: “We have carefully selectedambassadors who embody the values,character and overall image inherent to theAirtel brand, therefore making them aperfect fit for further endearing Airtel tomillions of Nigerians whilst strengtheningthe relationship we have with ourcustomers.”

Ogunsanya also noted that theappointment of enterprising and talentedNigerians as brand ambassadors is in linewith their commitment to delivering valueand rewarding excellence.

He described the unveiling ceremony ofthe celebrities as further demonstration ofthe Telco’s commitment to support the arts,creativity and entertainment industry.

Litrature Award:Etisalat calls for entryEtisalat Nigeria has

called for entries for the2015 Prize for Literature whichis in its third edition. TheEtisalat Prize for Literature isthe first Pan African prizecelebrating debut Africanwriters of published fiction.

According to MatthewWillsher, Chief ExecutiveOfficer of Etisalat Nigeria, “theEtisalat Prize for Literatureserves as a platform for thediscovery of new creativewriting talents out of theAfrican continent.”

While highlighting thefollowing, he said the successof the second year concludedearlier this year paved way forthe third year.

NoViolet Bulawayo won themaiden edition of the EtisalatPrize for Literature with hernovel, We Need New Names,while Songeziwe Mahlangu emerged winner of the secondyear of the prize with his novel,Penumbra. The Etisalat prizeis designed to foster writing inAfrica, bring exciting newAfrican writers to the attentionof a wider audience, andpromote the reading culture.The winner receives a cashprize of £15,000 in addition toa fellowship at the prestigiousUniversity of East Anglia underthe mentorship of the award-winning author, Professor GilesFoden.

Ikeja City Mallrewards customersAs part of activities to

reward customers, IkejaCity Mall, ICM, has rewardedits five premium shoppers withshopping voucher.

The initiative which aimed atextending hand of appreciationto their customer witness thewinners make purchases fromany store in the mall worthN10, 000. Speaking during thepresentation of voucher, theMarketing Manager, ICM, Mr.Emmanuel Ositelu said that therewarding their customers waspart of activities line up by themall to mark the specialmoment in the history ofNigeria.

“We commence thisDemocracy Day with a promowhich started on WednesdayMay, 20th to 28th May, 2015and it required shoppers tospend up to or above the sumof 5,000 on a single purchasereceipt to qualify for the raffledraw and stand a chance to wina shopping voucher ofN10,000”

“The winners of this promoare contacted through theirphone numbers and ondemocracy day they are hereto redeem their cash prize.

HANDOVER: Managing Director/Chief Executive Officer, Tilad Nigeria Ltd, Alhaji TijaniOladosu (left) Representative of Auto Value Ltd. Dolapo Onayemi at the handing over ofkeys to 10 Shine Ray mini-buses to Auto Value Limited in Lagos.

Business & Economy

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


CMYK

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

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

The ExecutiveGovernors ofmore states in the

Federation recently,unabashedly admitted, that,all is not well with theirfinances; indeed it hasbecome, sadly evident, thatcivil servants in some statesare owed several monthssalary arrears.

The devastating impact ofsuch experience on personaldignity, and self confidencewill be appreciated by anyonewho has suffered suchdeprivation; ultimately anabiding sense ofresponsibility and integritymay become compromisedwith rationalisation for selfpreservation, while the“opportunities” for unethicalor corrupt enrichment maybecome identified as divineprovidence. Social Scientistsmay also argue that once apublic servant crosses thisRubicon, other decisionsinvolving public assets will beprocessed through the sameprism of self interest ratherthan public service.

Consequently, even whenthe period of adversity is over,the once dedicated and honestcivil servant will still becomehooked on a predatory habiton their fellow countrymen!

Indeed, the spirit of genuineand undiluted dedication topublic good, was probablyextinguished whendistinguished and dedicatedcivil servants, were notified oftheir summary dismissal fromservice, without fair hearingon radio and TV in January1975, by the presiding

Military Junta. Thereafter, the civil service

became an unsafe haven topursue a career, as one’sfuture could clearly bejeopardized without theprotection of extant proceduralrules that seeminglyguaranteed job security, if oneperformed their dutiesdiligently. Expectedlytherefore, the erstwhileuncommon incidents ofcorrupt enrichment in publicservice soon gave way to whathas become a concertedlooting cult, in the guise oftaking personal responsibilityto safeguard one’s future,rather than endure theuncertain prospect ofhonorable retirement withpension.

Furthermore, civil servantsalso recognized that the rapidinflationary trend instigatedby serial Naira devaluationsbetween 1985 and thereafter,reduced the once lifesustaining pension paymentsto monkey nuts! In this event,public servants needed nopersuasion to ensure they putthemselves first before thepeople they served.

Thus, it is possible that thespirit of I before state orcountry in public service mayhave become rechargedthroughout several states inthe country by the currentinability of several states topay staff salaries. Certainly,under such circumstances, ifthe opportunity presents itselfto collude and clandestinelydispose of expensivegovernment equipment andmachinery for self enrichment,

there would be manyconverts who wouldstreamline the process.Regrettably, such anti-socialcoup de tat, will berationalised as selfpreservation and or a divineopportunity presented inanswer to ardent prayers.

Last week, a multifacetedGovernors’ Forum, reportedlyapproached President Buhari,with a beggars’ bowl for fundsto enable them meet theirsalary obligations. It isunclear how much each Staterequires, but what is certain,however, is that the federalgovernment currently has nosubstantial reserves to dipinto; besides, the completionof several critical federal

projects is also challenged bypaucity of funds.

Nevertheless, althoughthe 2015 budget alreadyaccommodates about N1tndeficit, it is more probable thatover N2tn may have to beborrowed with oppressiveinterest rates between 12-17per cent to fund the modestN4.5 trillion budget and fuelsubsidy payments.

So, where will Buhari getthe additional funds to bail outthe States and also remediatethose critical infrastructuraldeficits that urgently cry outfor attention on the federallevel, particularly in the areasof Education, Health andTransportation. Regrettably,rather than deploy the modestproceeds of the Excess CrudeAccount directly to criticalinfrastructure, these fundswere stashed away as idledeposits and then gradually,simply whittled down, asrecurrent consumptionexpenditure.

Indeed, despite theprevailing high interest rates,it may be difficult for thoseStates with already highindebtedness to source fundsfrom Commercial Banks, ifthese States do not have arealistic repayment plan,particularly with reducedmonthly allocations caused bythe crash in oil prices.Alarmingly, internallygenerated revenue in someStates remains well below 10per cent of total budget, sohow will such States pay backadditional loans, especiallywhen gestation for newinitiatives on internal revenuegeneration take considerabletime to harvest?

However, as usual, CBNmay be called to the rescuewith bailout funds, similar tofunds which were created to

support banks during thefinancial crisis in 2008-9;that process, despite itsinflationary collateral,incidentally required over N5trillion of fresh Naira supplyto buy out those toxic debtsthat allegedly threatened thefinancial market and byextension the economy.

Some Nigerians may claimthat what is good for thegoose is also good for thegander; instructivelyhowever, most States mayhave very modest qualityassets to pawn for the tens ofbillions of Naira that they mayrequire as ‘temporary’ bailoutto keep afloat. In any eventthe CBN would not beexpected to provide suchbailouts with zero interest rate.Eventually, the applicablecost of funds may mirror thepattern of other CBNinterventions which carryabout 9 per cent rate ofinterest; curiously, thedisbursing bank would earnthe lion share of 7 per centwhile the CBN’s return on itsclearly inflationaryinvestment will make up thebalance 2 per cent.

Nevertheless, it is pertinentto also ask how the CBNsources its seeminglyinexhaustible supply of funds,especially when most of thefunds provided to AMCONstill remain outstanding. Well,the truth is that the CBN hasthe sole authority to printmoney, and so far, there is nostrict limit to how much cashit can release into the systemat anytime.

What is however, clear isthat such increase in moneysupply will fuel inflation,particularly when CBNappears eternallypreoccupied already with theirreconcilable challenge ofsurplus Naira in the system.

SALARY ARREARS:What manner of bailout?

which relies on oil for about 70percent of its income, to scaleback budgeted spending anddevalue the naira. The nation’sformer finance minister, NgoziOkonjo-Iweala, said earlier thismonth that her successor willface a “difficult” year because ofplunging crude revenues.

Brent fell 69 cents to $63.57 at10:34 a.m. local time on theLondon-based ICE FuturesEurope exchange.

Horizontal drilling andhydraulic fracturing, or fracking,that unlocked supplies in shaleformations in North Dakota,Texas and other states hasboosted U.S. output to thehighest in more than threedecades. That’s forced overseasproducers, whose exports to theworld’s biggest oil consumer areshrinking, to find new marketsfor their crude.

year, roiling global markets asproducer nations lost revenueand foreign-exchange reserves.

While oil has pared losses thisyear, prices are still below whatsome producers includingNigeria and other OPECmembers need to balance theirbudgets, data from theInternational Monetary Fundand ING Bank NV show.“Nigeria has no choice but tocut their price differential tofight for market share,” HongSung Ki, a commodities analystat Samsung Futures Inc., saidby phone from Seoul. “The U.S.was its key oil buyer in the pastbut imports have beenshrinking with more shaleoutput in an alreadyoversupplied market.”

The slump in prices last yearforced authorities in Nigeria,

THE shale boom that’sreduced U.S.

dependence on overseas crudeis reverberating in Nigeria asit cuts the pricing for itsflagship grade to the lowest ina decade.

The country, part of theOrganisation of PetroleumExporting Countries, will sellJuly supplies of its Bonny Lightcrude at 23 cents more thanDated Brent, according to ane-mailed statement fromNigerian National PetroleumCorp. That’s the smallestdifferential since 2005 andcompares with a 50 centpremium in June and $2.55 ayear earlier.

Surging output from U.S.shale formations contributed toa market glut that drove crudedown almost 50 percent last

Shale fallout torments Nigeria as flagship oil at decade-low

Increase inmoney supplywill fuelinflation,particularlywhen CBNappearseternallypreoccupiedwithirreconcilablechallenge ofsurplus Nairain the system

Naira devaluation hits industries hard

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Transcript of Naira devaluation hits industries hard