Financial 19 May 2014

CMYK

MAY 19, 2014

Continues on page 18

AGM: From left: Mrs Abidemi Ademola, General Counsel and Company secretary, Uni-lever; HRM Nnaemeka Achebe, Obi of Onitsha, Chairman and; Mr Yaw Nsarkoh, MD atthe 89th AGM of Unilever held in Lagos on Thursday.

Oil majors fleeceNigeria with inflatedproject costsTotal reviews Ofon 2 from $2.85bn to $6.63bnBY CLARA NWACHUKWU

There is no betterdemonstration of howNigerians suffer unduly on

account of the padding of project costsby the International Oil Companies,IOCs, operating in the country than inthe sudden request by the Nigerian unitof French oil giant, Total for a reviewof its Ofon 2 project.

Total Exploration & ProductionNigeria, TEPN, Financial Vanguardreliably gathered, is seeking additional$3.78billion to an existing $2.85billionoriginally proposed for the project. Ifapproved, this will bringtotal costs for the project to$6.63billion, representing awhopping 132.6 per centincrease, a developmentthat is giving the NigerianNational PetroleumCorporation, NNPC, amajority partner in the JointVenture, JV, graveconcerns.

While cost padding is notpeculiar to Total, as it cutsacross all the multinationaloperators, this particularreview stands out as theprice of crude per barrel isbeing estimated above the$77.5per barrel beingproposed by the FederalGovernment in the 2014national budget; thusmaking Ofon 2 the mostexpensive project inNigeria today.

Since November 2008,when the project wasapproved, Total hasreviewed the costs twice,even as the project whichshould have been

delivered in 2011 is still faced with anumber of issues.

Ofon 2The Ofon field is located in the Oil

Mining Lease, OML 102, offshoreNigeria, in 40 metres water depth andis a Joint Venture development of theNNPC (60%) and Total E&P (40%).According to Total, “The mainobjectives of the Ofon Phase 2 projectare to monetize the gas, developadditional reserves of oil and gas anddrill 24 additional production andwater injection wells in 2015.

“When completed, 106 million

standard cubic feet (scf) of gas per daywill be sent to the domestic gas marketthereby boosting the Government’saspirations on power.

“The new project will also addapproximately 40,000 barrels of oil perday to Nigeria’s production.”

Economic viabilityIronically, the National Petroleum

Investment Management Services,NAPIMS, the investment arm of theNNPC, had in October 2010, declaredthe project of “no value to the FederalGovernment of Nigeria.”

Financial Vanguard also gathered that

NAPIMS had rejected the initialexpenditure estimates for the project onthe grounds that it was “too expensive”but Total had used its influence at thePresidency and the Ministry ofPetroleum Resources “to get it approvedat over $1billion above the originalestimates.” This is also a commonpractice among oil majors. Lendingcredence to this, NAPIMS in itseconomic analysis of the project in amemo dated August 9, 2010, withreference number; NAP/PL/01.04exclusively obtained by Vanguard,concluded after its review of theestimates that: “… the economics of theproject based on the updated FDP(Field Development Plan) is not robustand adds no value to the FederalGovernment of Nigeria.”

It added that “On the basis of theabove, the updated FDP request shouldnot be granted until a meeting is heldbetween NAPIMS and TEPNG (Total)to review the project with the objectiveof improving its economic viability.”

NAPIMS apparently based itsconclusion against the backdrop ofinitial capital expenditure (CAPEX)estimates of $2,784MM contained inthe FDP of November 2008, but whichwas reviewed by Total in August 2010,to bring CAPEX costs to $5,476MM.

Even two years after, NAPIMScontinued to express concern overescalating costs for Ofon 2, as in anothermemo dated January 24, 2012 with

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 16/05/2014

109.79 +0.70

102.08 +0.58

184.0 -10.15

2,915.00 +8.00

17.87 -0.33

US DOLLAR 154.73 155.23 155.73POUNDS 260.0702 260.9106 261.751EURO 211.8873 212.572 213.2567FRANC 173.4836 174.0442 174.6048YEN 1.525 1.53 1.5349CFA 0.3032 0.3132 0.3232WAUA 237.8816 238.6503 239.419YUAN 24.8206 24.901 24.982RIYAL 41.2558 41.3891 41.5225

KRONA 28.382 28.4737 28.5654

SDR 239.0579 239.8304 240.6029

Cover Story

CMYK

18 — Vanguard, MONDAY, MAY 19, 2014

Continues on page 19

,,

Continued from page 17

*VISIT - From left: Deputy Director, Cassava Value Chain, Federal Ministry of Agriculture& Rural Development, Mr. Efuntoye Ademola Titus; Managing Director, Honeywell FlourMills Plc, Mr. Lanre Jaiyeola; Technical Adviser, Cassava Value Chain, Federal Ministry ofAgriculture & Rural Development, Mrs. Adetunji Oluwatoyin; and Divisional ManagingDirector, Honeywell Flour Mills Plc, Dr. Nino Ozara, during a courtesy visit to Honeywell byofficials of the Federal Ministry of Agriculture & Rural Development team in Lagos

Oil majors fleece Nigeriawith inflated project costssame reference, whichacknowledged that “anupdated FDP was received in2011 December for the reviewwith CAPEX of $5,270MM.”

However, in its economicanalysis of the new estimatesfor Ofon 2, which included “thethree CAPEX scenarios of theapproved FDP and the newscenario as proposed inDecember 2011,” NAPIMSreiterated the unviability of theproject.

It maintained: “…theeconomics of the project basedon the updated FDP is notrobust and adds little value($48MM) to the FederalGovernment of Nigeria at themost pessimistic crude of $50/bbl and could be as high as$2,690MM in a $100/bblregime.”

NAPIMS therefore,requested that “Specificattention should be given to thepossibility of CAPEX over-run,as a 20 per cent overrun couldthreaten the entire viability ofthis project which could onlybe remediated by an upsideprice regime of about $80 andabove.”

New costs estimatesNo doubt, the fact that it was

able to get approvals over andabove the NNPC for the firstand field plans, may havespurred Total to seek theadditional $3.78billion, whichis already generating a lot offurore in the industry. Total ina presentation on the ModifiedCarry Agreement, MCA onOfon 2 to the NNPC inFebruary 2014 to defend itslatest request noted that“NNPC reserves the right toreject any EPC (EngineeringProcurement andConstruction) contract awardcost or firm contract cost that it

deems unreasonable over andabove the initially used bestestimate cost.”

But industry watchers areconcerned about the impact ofthe escalating costs on thecommon Nigerians, who aredeprived of basic socialinfrastructure such as schools,roads, pipe-borne water,electricity, hospitals, housing tomention just a few.

In fact, under the 2014 budgetproposals, the additional $3.78billion or N604.8billion at anexchange rate of $1 to N160being requested by Total, couldconfidently fund entire Health(N493.46billion); Power(N62.45billion); Water (N38.38billion) budget proposals andeven part of the Housing(N18.51billion) estimates.

Contractors are to blameBut Total in response to

Financial Vanguard’s enquiryblamed contractors handlingvarious arms of the Ofon 2project for the steep costescalations.

The explanation came as Totalrecently reported a 10 per cent

drop in first-quarter net profitand a drop in oil and gasoutput in its global operationson Wednesday.

It attributed output drop by1.5 per cent in Libya andNigeria, to “security issues”even as it expected to deliverthe “Ofon Phase 2 in Nigeriain the second half of theyear.”

The Ofon FieldDevelopment Project Phase 2was launched in 2007, toenhance production from themature Ofon field. Under theoriginal agreement, Ofonshould have gone intoproduction in 2011, but theoil company did not awardmost of the contracts until2011.

According to Total, thefinancing agreement put inplace with the NNPC in2008, was below $3 billion. AMinistry source revealed that“…the first thing their (Total)new MD did on assumptionof office was to ask foradditional billions of dollarsmore, even when they havenot yet delivered on theproject.”

Financial Vanguardgathered that thedevelopment is not onlypeculiar to Total, as this is acommon practice with all theinternational oil companies,IOCs, who go for approvalfor additional costs for their sJV projects over and abovethe NNPC, the majoritypartner. The source addedthat this practice hasconsiderably weakened thepower of the NNPC tocheckmate the excesses of theforeign oil companies,saying, “This is a countrywhere any top manager of anIOC can easily have accessto the Presidency to get

,

,

Specific attentionshould be given tothe possibility ofCAPEX over-run,as a 20% overruncould threaten theentire viability ofthis project whichcould only beremediated by anupside priceregime of about$80 and above

A recent collection of essayson entrepreneurial

innovation in developingeconomies, titled ‘Lessons fromthe Poor’, mentions an aspectof Nigerian clothing design.Examining the traditional adiredye industry, author ThompsonAyodele informs that the bottom19% of entrepreneurs polled forthe study earned more thanstate and federal civil servants.For the purpose of this essay,the story is significant in moreways than one. First, it is aclassic instance ofentrepreneurial spirit,describing the transformation ofan established Yoruba craft intoa venture for wealth creationand employment generation.Second, and perhaps only inbetween lines, it reflects ameasure of the seriousimbalances that plagueNigeria’s economy.

Africa’s second largesteconomy is a bundle of extremecontradictions; with billions ofdollars in annual oil revenueon one end and pervasivepoverty for most of its 148million people on the other.Relative political stability since1999 has delivered some reformand regulatory initiatives tocorrect huge and long-standingmacroeconomic disparities, yetthe country remainsoverwhelmed by persistentlydismal indicators and humandevelopment indices. Nigeria’scurrent per capita GDP of$1,501.72 ranks it below muchsmaller African economies likeSudan, Congo and Swaziland.The latest UNDP poverty surveyof 108 developing nationsplaced the country at the 80th

position, below Rwanda andMalawi. Achieving the UNMillennium DevelopmentGoals and its own, and moreambitious 2020 target require aparadigm shift in mindset andpriorities. It also requires thesuccessful engendering of abroad, pan-Nigerianentrepreneurial spirit!

A slew of relevant policyredirections have already beeninitiated in this regard: Thegovernment has deregulated oilprices, disinvested public sectorundertakings, created specialeconomic zones and passedassorted legislation toencourage enterprisedevelopment. While some ofthese measures are starting toshow positive results, manyhave been largely ineffectivewhile yet others havecompletely collapsed. Forinstance, a massiveprivatisation drive launchedafter 1999 managed to rake upprivate sector investment.However, Abuja’s simultaneousinclination for micro-enterprises, instead of small-

Developing EntrepreneurialDeveloping EntrepreneurialDeveloping EntrepreneurialDeveloping EntrepreneurialDeveloping EntrepreneurialSpirit in Nigeria PSpirit in Nigeria PSpirit in Nigeria PSpirit in Nigeria PSpirit in Nigeria Pararararart 1t 1t 1t 1t 1

The business environmentin the whole of Africa iscrippled with massiveinfrastructure shortfalls thatresult in the continent’s highenterprise mortality rate.Significantly, the rate offailure affects older and newentrants alike. A leadingcause is almost alwaysinfrastructure deficits thatcritically hamper genuineeconomic growth andproductivity.

Since 2008 the governmenthas began to show thepolitical will to implement themarket-oriented reformsurged by the IMF such asmodernizing the bankingsystem, curbing inflation byblocking excessive wagedemands, and resolvingregional dispute over thedistribution of earnings fromthe oil industry. GOP rosestrongly in 2007-10 becauseof increased in oil exportsand high global crude oilprices.

Nigeria likewise suffersfrom endemic infrastructuralwoes with regards to roads,communication andespecially power (small andlarge businesses alike acrossthe country rely heavily, andat times exclusively, onbackup electricity).

scale ventures, did little tocurb unemployment. Thefailure or even inadequatesuccess of these measures isattributed primarily todisregard or ignorance ofground realities, and lack ofa coherent, consistent, macro-level vision.

Nigeria’s unique set ofproblems calls for broad-basedpolicy intervention from thebottom up, and any individuallaw or policy that is not partof a unified effort is unlikelyto make much difference. The‘bottom up’ analogy ispertinent, as one of the firstthings Nigeria ought to bedoing is improving thecondition of its roads.

Africa’s secondlargest economy isa bundle ofextremecontradictions;with billions ofdollars in annualoil revenue on oneend and pervasivepoverty for most ofits 148 millionpeople on theother

CMYK

Vanguard, MONDAY, MAY 19, 2014 — 19


Cover Story

Nigeria has successfully hosted the World Economic Forum for Africa.The event has come and gone and the organisers and the Nigerianauthorities are counting their gains and losses. Many Nigerians were

apprehensive of the hosting of the event,believing that with the currentinsecurity, it was not expedient to host the event in Abuja. The FederalGovernment was bent on making the point that Nigeria was safe for all. Now

Gains, losses of WEFAGains, losses of WEFAGains, losses of WEFAGains, losses of WEFAGains, losses of WEFAthat the event has held, whatwere the issues it threw up?With the benefit of hindsight,both sides have a point.

The Federal Governmentwithout thinking of theeconomic and social cost of theevent granted a three-dayholiday to Abuja residents.

The city was practically shutdown. Businesses andgovernment establishmentswere closed for the period ofthe event. Some parts of Abujacity where delegates werelodged were not accessible tomotorists. Stern-lookingsoldiers were posted in themetropolis as if the countrywas at war. The securitycheckpoints were somethingelse. These made the city ofAbuja a ghost town. Itdeprived the visitors theopportunity of seeing the realNigerians who reside in Abuja.It made it look as if thegovernment was not capableof protecting it citizens and thevisitors if activities were in fullgear in Abuja. When I had theopportunity to attend aconference in Japan, US,Singapore, Turkey etc, I andmy colleague went to town tofeel and see what washappening in those parts ofthe world. We went by metro,tasted their food and went tosee their shopping malls. Butthis was not the case with theWorld Economic Forum forAfrica in Abuja.

The tight security presenteda picture of a nation undersiege. The government madeit impossible for prospectiveinvestors to seek for relevantinformation on their own fromgovernment offices as well asbusiness outfits. The action ofgovernment instead ofencouraging investment flowcreated a picture that may bedifficult to erase from theminds of discerning investors.International event of thismagnitude serves most of the

time as business and pleasureas visitors would out ofcuriosity visit neighbouringtowns, and in some cases, thecountryside as tourists.Nigeria lost the opportunityfor the visitors to see the Abujaenvirons. Instead of puttingthe nation through thisunwholesome experience inthe eyes of the internationalcommunity, the event shouldhave held either in Lagos orPort Harcourt, where theneeded security check wouldnot have been so tight.

The Forum has attracted over$68 billion (about N12.9trillion) in investment to theAfrican continent, Dr. PhilippRosler, the Managing Directorof the Forum, said. He saidthe funds were in the form ofForeign Direct Investments aswell as private and publicinvestments across Africancountries, which wouldcontinue to yield results in thenext years. Rosler said thefunds were targeted atinvestments in beautiful

projects that would foster theagriculture sector, improveinfrastructure such as roadsand railways, hospitals,education, skills developmentand ICT. “What this means isthat it is not just money, butopportunities for Africa andthe reason why we are here isto unlock the opportunities forthe improvement in the statesof Africa,” he said.

These are commitmentswhich have not translated intoreal time investments for now.How much of theseinvestments will Nigeria beable to actualise to help itreduce the risingunemployment in the countrydepends on how friendly thebusiness environment is andhow those who made thesecommitments see Nigeria. Forthe first timers, if they havewrong impression about thecountry, they may not want toreturn to fulfill their promises.This is where first impressionis so important in an event ofthis nature.

If the Federal Governmenthad taken this intoconsideration, it may not haveout of panic, declared publicholiday in Abuja. Africancountries are competing forinvestment with the rest of theworld. Investors go to wherethey feel safe and are sure ofthe safety of their investment.It would be difficult for theFederal Government toconvince Nigerians that theimpression that was createdduring the forum was assuringto foreign investors.

The organisers saw the eventas one of the best in recentyears. The forum, they argued,had achieved the mission ofthe organisers, which is“commitment to the growth ofthe world in three steps.” Thesteps, according to Rosler are:“To create community ofinterest, to create communityof purpose and lastly to havecommunity of exchange. TheWEFA, Abuja, has been able toachieve these. For instance, increating the community of

interest, the articles during theevent were more than 48,000articles, which is three timesmore than that of last year.Millions of people have nowrealised that Africa is importantin global economy. Secondly,we created the community ofpurpose.

The event won the nationsome mileage in the waragainst terror as the worldstood behind the country indenouncing Boko Haram andcalling for the return of thegirls they abducted. The eventhad more than 1,000participants and they werehere not withstanding all thereports about security. Theywere here because of all thediscussions and they send theirvoices of solidarity with thepeople of Nigeria. They cameup with a common voice thatthey will never allow theterrorists and violence dictateglobal agenda and the people’sagenda for the Africancontinent.

Elzie Kanza, the Director andHead of Africa WEF, said sinceMay 2, there were about 50,000social media items thatmentioned WEF (A), Abuja.Kanza said the coverage had atotal reach of over 2.1 billion,which is about 30 per cent ofworld population. This ishuge, this has raised globalfocus on Nigeria and for manyyears to come those who havenot been paying attention to thecountry will begin to inquireand desire to know more aboutNigeria and its people.

The big question now is: Cangovernment tap into thesegreat openings to make thedifference? Can thisgovernment, following theglobal goodwill against terrorin Nigeria, deliver thecrushing blow on Boko Haram?This is the final test for thisgovernment’s capacity to actdecisively.

Oil majors fleece Nigeria with inflated project costs

whatever they want. So even ifthe NNPC refuses, it’s only amatter of time before they getwhat they want.”

Cost is still under reviewHowever, a spokesman for

TENP, Mr. Charles Ogan, in anemail response to Vanguard’senquiry, dismissed theallegations, saying, “All thesenumbers are totally incorrect.”

The numbers he referred towere deliberately inflated inorder to get prompt response,

as it is a common practice bythe IOCs not to respond toissues relating to productionand costs.

According to Ogan, “NeitherNNPC nor Total has anycommercial or pecuniaryinterest in having higher costsas such expenses decreases therevenues of the joint venture.”

But he could not give furtherdetails on the cost because,“NNPC and Total are stillreviewing the final costs and weare therefore unable to commentfurther on this matter until thenecessary agreements and

approvals are given by the jointventure partners.”

The NNPC could also notcomment officially on the issue,but Ogan noted that Total as theoperator of the JV usuallypresented “all cost proposals,projects and other JVexpenditure to NNPC forapproval and are monitoredaudited and expenditure finallyapproved by NNPC and/orother partners.”

He added that “the jointventure accounts are alsoaudited by NEITI and other

stakeholders," while pointingout that “royalties and taxespayable on joint ventureproduction is over 85 per centand that NNPC receives its 60per cent share of any profitspaid after payment of royaltiesand taxes.”

Nigerians pay 60% of costsBut what Ogan failed to note

in his explanations is thatNigerians bear 60 per cent ofthe burden of whatever costs areincurred by the JV, and as such,the impact of the costs is more

on Government than the IOCs.Furthermore, the 60 per centprofit the NNPC gets is net aftercosts, as such, the 85 per centroyalties and taxes would havebeen removed before profitsharing. As such, NNPC, as the60 per cent equity partner, alsopays 60 per cent of the 85 percent costs, which governmentpays from taxes paid byNigerians. Recall that risingcosts was one of the reasons thatthe Federal Government, during

Continues on Page 23


CMYK

Business & Economy

UNILEVER Nigeria Plchas said that Nigeria is

its second largest market in theworld.

This, Unilever said, makes itimpossible to be ignored as atleast 28 million Nigerians useits Close-Up brand alone.

Category Manager, OralCare, Unilever Nigeria, OizaGyang, at the launch of thenew Close-Up variant, ‘Close-Up Naija Herbal Gel’, notedthat Nigeria is the largestmarket for its products in theworld, after Brazil. “It isimperative that the company isdoing everything possible todeliver the best to the Nigerianmarket,” she said.

Gyang said “Nigeria isimportant to all our products,that is why we are developingbrands that suit the Nigerianmarket.” According to her, over28 million Nigerians use thecompany’s Close-Up brand,that is why, “if we win inNigeria, we actually winglobally, so that is why ifUnilever Nigeria sneezes, thewhole Unilever quivers.”

Also speaking, BrandBuilding Director, UnileverNigeria, Mr. David Okeme,said that the essence of theNaija Herbal gel toothpaste isto encourage young Nigeriansget close naturally, the Naijaway. He stated that Nigeriansare known to be energetic,resilient, creative, and

Nigeria, world’s 2nd largestmarket for UnileverBY PRINCEWILLEKWUJURU

differentiated in their style.“So Close-Up creates a mixthat is not only unique toNigeria but is an embodimentof the Nigerian spirit.”

Also speaking at the event,Close-Up Brand Manager,Tolu Dima–Okojie, said CloseUp has been brightening up

Nigerians since its launch in1975 and quickly rose to bethe market leader in Nigeria.“Close Up is committed toimproving the oral healthhygiene of Nigerians and thenew Close-Up Naija HerbalGel toothpaste, is another wayof showing this. The new

brand is a blend of Aloe Vera,which serves as an anti-bacterial agent, Mint leafextract which gives freshbreath and Lemon extract forwhite teeth,” he said.

AGM: From left: Company Secretary, Consolidated Breweries Plc, Mrs Temidayo Olaofe;Chairman, Prof. Oyin Odutola-Olurin and Managing Director, Mr. Boudewijn Haarsma duringthe company’s 34th Annual General Meeting, in Lagos.

Capital importation peaks at N3.42 trnin 2013, says NBS

The National Bureau ofStatistics (NBS) hassaid that Nigeria’s

capital importation stood at21.3 billion dollar (N3.42

trillion) in 2013. The figure ishigher compared to the 11.2billion dollar (N1.80 trillion)and 5.7 billion dollar(N917.70 trillion) recorded in2008 and 2009, respectively.

The data was, however,silent on the import rates for2010, 2011 and 2012,respectively.

The Statistician-General ofthe Federation, Dr Yemi Kale,said this in a statement issuedin Abuja. The statementexplained that the data oncapital importation wasobtained from the CentralBank of Nigeria (CBN).

“The data is being compiledusing information on bankingtransactions, gatheredthrough Electronic FinancialAudit Sub-System (e-FASS)software, which enablesautomatic reporting of allbanking transactions to CBN,”the statement said.

It stated that the financialcrisis largely shaped capitalimportation between 2007 and2013 period.

“From 11.2 billion dollar in2008, it dipped to a low of 5.7billion dollar in 2009.

“Yet Nigeria’s rapid recoveryattracted higher levels ofinvestment, allowing capital

importation to soar to 21.3billion dollar in 2013, a recordhigh to date.

“The main driver of thisgrowth has been the sharesbusiness, which saw a six-foldincrease in capital valuebetween the 2007 and 2013, ”the statement said.

According to the statement,this has been countered by adecline in the bankingbusiness sector, which inconverse declined to just 1/5th of its 2007 size.

It noted that in spite of thesedevelopments, lower levels ofcapital importation for boththe stock and bankingbusinesses had beenobserved in the first quarterof 2014, with total importationof 40.8 per cent lower thanquarter one of 2013.

“Prior to the global financialcrisis, Nigerian capitalimportation was high andrising; it grew 16.7 per centfrom 9.5 billion dollarrecorded in 2007 to reach 11.2billion dollar in 2008.

“The onset of the crisisbrought a sharp decline incapital imported to half itsvalue at 5.7 billion dollar in2009,” the statement quotedhim as saying.

The Nigerian BritishChamber of Commerce,

NBCC,has said that it expects trade between Nigeria andBritain to hit £20 billion withinthe next five years.

In a parley with pressmen atthe NBCC secretariat in Lagos,the President of NBCC, PrinceAdeyemi Adefulu, disclosedthat in 2010, PresidentGoodLuck Jonathan andPrime Minister DavidCameron resolved that thetrade between the twocountries must double from£4b to £8b within five years,adding that, he believesauthoritatively, that the figurewill be achieved and thatpotential of trade between thetwo countries within the nextfive years may well be in £20billion.

NBCC sees £20bn tradebetween Nigeria, Britain

BY NAOMI UZOR“This however will not be

achieved by wishful thinkingbut by strategy and hard work.The NBCC trade mission andother activities are a majorvanguard for achieving growth of trade between ourtwo countries. The key toattracting foreign investmentinto the country, is peace,good government,transparency and an enablingenvironment. Foreigninvestment has a way offlowing to where it is mostwelcome,” he said.

According to him, there isgreat need for the Nigeriangovernment to work fortolerance at home, and tocontinue to improve on thesecurity and criticalinfrastructure in order toreduce the various costs ofdoing business in the country.

M r. BabatundeFowler, the chairman

of Lagos Internal RevenueService (LIRS) has beenhonoured with a book titled:‘The Rudiments of NigerianTaxation’ written byOlugbenga Obatala.

Speaking during the publicpresentation of the book inLagos which attracted morethan 140 dignitaries from thepublic and private sector,Fowler, commended theauthor and said, “I amextremely marveled; I didn’tknow he was going tohonour me with the book; thisis the official book for LIRSand I am going to buy a copyfor all LIRS staff and another100 copies to members of taxclub.”

“There is no book ontaxation like this book; theauthor has put together allthe taxes that need to beunderstood by all the tiers ofgovernment.

Fowler, LIRSboss, honouredwith taxationbook

BY FRANKLIN ALLI

More winnersemerge inFirstBankpromo

THE third quarterlydraw of the on-going

FirstBank ‘Big Splash Promohas produced three more win-ners of brand new Toyota Co-rolla cars. The three winnersemerge at the draw whichtook place last week at theConstantial Hotel, Benin Citythe Edo State capital. Thewinners were Eseduo Fran-cis of Makurdi Branch, Ezea-num Chinedu Maureen ofOnitsha-Owerri branch andDairo Adeola Olugbenga ofIkeja Industrial Estatebranch.

Meanwhile the savings pro-mo which kicked off in July2013 has been extended toDecember 2014 to create am-ple opportunity for more cus-tomers to participate in thepromo and stand a chance ofwinning the grand prize of aTerrace Duplex .

The draws supervised byrepresentatives from the Na-tional Lottery RegulatoryCommission, Consumer Pro-tection Council and KPMGAdvisory Services also pro-duced 120 winners of stand-ing gas cookers, 120 winnersof refrigerators as well as 120winners of N50, 000 cash.



Banking & Finance

BY BABAJIDEKOMOLAFE

The African DevelopmentBank Group (AFDB) is

moving to re-engage withLibya after its Country Re-Engagement Note 2014-2016was approved by the BankGroup’s Board last week.

According to the note,Libya’s new politicallandscape gives the Bank theopportunity to renew andexpand its engagement withthe country, a key shareholderwith a subscribed capital of4.057 percent as of December31, 2013. Libya also pledged$37 million in contribution tothe 13th replenishment of theAfrican Development Fund,the concessionary window ofthe Bank Group, a clear signalof the country’s interest in re-engaging with AfDB.

The Note proposes that theBank explore opportunities towork with Libyan authoritiesand international partners inareas that are in line withcreating the basis forpromotion of stability andinclusive growth in thecountry.

Simplifying ownership of bank accountsfor financial inclusion

,

,The requirement for opening

this account is very simple andthus accessible to anybodyirrespective of level of literacyand socio-economic status

Dr. Sarah Alade, Acting CBN Governor

M ore than 50m i l l i o nNigerians do

not have access to financialservices. They are thefinancially excluded. Mostof them according to a2012 study by EFInA arewomen, rural dwellers,farmers and illiterates.They do not use anyfinancial service or productto manage their finances.They transact using cash.This is because most ofthem do not have one of thecritical requirements toaccess financial services,which is ownership of abank account.

Prior to 18th of Januarylast year, the requirementfor owning a bank accountwas heavily skewed againstmost of the peopleclassified as financiallyexcluded. You need a valididentification, which mustbe driver ’s licence orinternational passport orNational Identity card. Youmust bring utility bill asproof of residential address,then you must be literateenough to complete theaccount openingdocumentations and beable to speak English thatthe bank staff canunderstand. Thus, agateman, or fisherman thatspends most of his time onthe waters, who is notliterate and who most likelydo not have a valid identitycard, would find itherculean to own a bankaccount. In fact most ofthese people are evenscared to approach banks toown a bank account. Somebelieve it is only for theeducated and the elite, andsome are intimidated by theposh ambiance andsurroundings of a bankinghall. “It is not for peoplelike me”, they conclude intheir minds.

In an effort to correct thisimpression and change thistrend, the Central Bank ofNigeria (CBN), on 18th ofJanuary last year,introduced what is calledthe Tiered Know YourCustomer (Tiered KYC).

It created three types ofbank accounts with differentrequirements forownership, and limit oftransactions that can becarried out with eachaccount.

“The main objective ofthe approach is to promoteand deepen financialinclusion, by makingaccount opening andoperation more attractive

and appealing to the masses”,said Barrister, Obot Udofia,Deputy Director, CBN. Toachieve this, the apex bankcreated the Low ValueAccount, Medium ValueAccount, and the High ValueAccount.

Low Level AccountsThe Low Value Account

(LVA) is a savings account,targeted at those who do not

have valid means ofidentification. Therequirement for opening thisaccount is very simple andthus accessible to anybodyirrespective of level of literacyand socio-economic status.

This account can be openedat branches of financialinstitutions (banks,microfinance banks,mortgage bank) by theprospective customer orthrough banking agents. Thismeans, the prospectivecustomer does not need tovisit the bank to open theaccount. The account can beopened by providing:Passport photograph; Name,place and date of birth; andGender, address, telephonenumber, etc. The customerhowever, does not need toprovide documentaryevidence of the information

and the bank does not needto verify the information.Furthermore no amount isrequired to open this type ofaccount.

But the customer cannotdeposit more than N20, 000at a time, and the balance inthe account must not be morethan N200, 000 at anytime.Furthermore, where theaccount is linked to mobile

phone, and thus used formobile money purposes, themaximum transaction limitallowed is N3, 000 with adaily limit of N30, 000

This is to ensure that theaccount is not abused or usedfor money laundering. Moreso, the Low Value Account isdesigned for people who areusually low income and arealso daily income earners.Thus, while the account canbe used for ATMtransactions, it can only beoperated in Nigeria, andcannot be used forinternational funds transfer.Also, third parties can onlymake deposits into theaccount but cannot withdrawfrom it. Withdrawal is limitedto the owner of the account.

Medium Value AccountsLike the LVA, the Medium

Value Account (MVA) is a

strictly savings account. Alsothe physical presence of theprospective customer is notcompulsory for accountopening. The major differenceis that, the informationsupplied by the prospectivecustomer must be supportedwith valid means ofidentification and must beverified by the CBN.

According to the TieredKYC guidelines, “The MVAaccounts can be opened atany branch of a bank by agentson behalf of enterprises formass payroll purposes or bythe account holder; It can becontracted by phone or at thebanking institution website;Account opening can beconducted face-to-face(directly) at bank branchesand by banking agents; Noamount is required foropening of the accounts.

“Basic customer informationrequired are, passportphotograph, name, place anddate of birth, gender,address, etc. These may beuploaded offsite or submittedon-site in banks’ branches oragents’ offices. Customerinformation obtained (name,place and date of birth,gender, address) are to beverified against similarinformation contained in theofficial data-bases [e.g.National IdentityManagement Commission(NIMC), IndependentNational ElectoralCommission (INEC) VotersRegister, Federal Road SafetyCommission (FSRC)]. It issubject to further IDverification and monitoringby financial institutions.

“Where the account is linkedto a mobile phone, themaximum transaction limit isN10, 000 per time, while thedaily limit is N100, 000. Theycan be used for fundstransfers within Nigeria only.Maximum single deposit isN50, 000 while the maximumcumulative balance of N400,000 is allowed at any time.Where cross-checking ofclient’s ID information is notcompleted at the point ofaccount opening, withdrawalshould be denied.

High Value AccountHigh Value Account (HVA)

is for people who can meet allthe documentation requiredto open a normal bankaccount. Unlike the Low andMedium Value Accounts, theaccount cannot be opened ata bank agent or by a bankagent on behalf of thecustomer. The account canonly be opened by theprospective customer, and hemust be physically present todo so. These accounts couldbe both savings and current.No amount is required foropening of accounts.

FCMB launchesaccount openingon Facebook

New customers of FirstCity Monument Bank

(FCMB) can now opensavings accounts with ease inthe comfort of their homes,offices, or on the go via theircomputers or mobile devicesfollowing the recentintroduction of the bank’sonline account openingplatform. The launch of theplatform coincides with theintroduction of a new productcalled, ‘the e-savingsaccount’. The new account isan online based savingsaccount which enablesprospective customers tocomplete their accountopening process with FCMBwithout the need to fill outphysical form(s) or visit abranch.

The Bank explained that thisnew innovation was designedwith the aim of utilisingtechnology to reduce the timeit takes to open an accountwhilst also improvingcustomer service andcustomer experience. Theplatform effectively extendsthe bank’s e-business offeringby enabling new customers toopen accounts. Existingcustomers already haveaccess to various electronicbanking services, includingonline banking, mobilebanking and a range ofinternational cards.

AfDB movesto re-engagewith Libya


Banking & Finance

BY BABAJIDEKOMOLAFE

Heritage Bank's Transparent MasterCard offers innovativee-payment services

HERITAGE Bankintroduced the

first transparent Master-Card in Nigeria to dem-onstrate its commitmentto offer innovative e-pay-ment services to its cus-tomers.

Managing Director/Chief Executive, Herit-

age Bank Limited, Mr.Ifie Sekibo stated this,adding that the HeritageBank Transparent Mas-terCard is born out ofthe bank’s commitment tooffer innovative bankingservices in a more con-venient and efficient wayto customers.

Sekibo said, “This isthe philosophy behindour e-payment services.There is more to e-pay-ment than Nigerians are

currently enjoying. Weare determined to takeNigerians to newheights of e-paymentservices that deliver un-paralleled convenienceand security. That is whywe introduced the firsttransparent MasterCardin Nigeria.”

Group Head, e-Bank,Heritage Bank, Mr. TobeNnadozie said that theHeritage Bank Transpar-ent MasterCard is avail-

able to new and existingcustomers of the bank. “To own a Heritage BankTransparent MasterCardis easy,” he said, addingthat the card comes withno additional cost beyondthe cost of applying forthe average Master-Card.

Nnadozie further said,“The Heritage BankTransparent MasterCarddistinguishes our cus-tomers. It gives them theprestige and excitementof being part of innova-tion which is what thecard represents. “Theyouths as well as adultswill find it very attrac-tive. Definitely you willlike something that youwill see through andsomething very present-able. It is for everybody. There are millions ofpeople out there yearn-ing for something differ-ent, something thatwould make them stand

the new generationwhich are particularlythe youths of these days,the likes of us who liketo do banking on themove, people who don’tsee reasons to enter thebank before carrying outtransactions. Nigerianswant to sit on the Face-book or internet and dotheir banking services.That is the reasoning ofthe youths of these days.We try to cater for them.That’s what’s behind oure-banking offerings. Wecall it innovation, doingsomething differentlyand catering for all thesepeople.“In addition tothese, we are saying toour customers, we areoffering the Transpar-ent MasterCard to showthat we offer transparentservices, transparentcharges and all that, andit is to show you that inHeritage Bank, nothingis hidden.”

out from others. They willdefinitely find the Herit-age Bank TransparentMasterCard attractiveand embrace it.”

Speaking further, hesaid, the TransparentMasterCard is anotherreason to bank with Her-itage Bank. “HeritageBank is the bank for thefuture, our style is quitedifferent and we cater forall, we are not just look-ing at some segments. Sowe want everybody tocome, whether old, highclass, young, the middleclass, we cater for every-one. “Most banks prac-tice what we call tradi-tional banking and thatis what our parents areused to. We cannotleave these people be-hind; we need to cater forthem. We look at the highnetwork customerswhom we refer to as theIvory banking, we alsocater for them. There is

Oil majors fleece Nigeria withinflated project costs

the President OlusegunObasanjo’s regimesought to review thesharing formula, sayingthat operators could nolonger take 100 per centof costs before sharingprofit, as there was verylittle left afterwards.

Rising costs andsharing formula is alsobehind the industryreforms, which startedduring the Obasanjoregime, culminating inthe Petroleum IndustryBill, PIB, still before theNational Assembly morethan 10 years after.

While awaiting thepassage of the PIB, theNNPC has become stricterin its budget approvals inorder to cut down costs,even in the face ofdelayed project cycles toget the IOCs to be moreprudent in theirproposals. Indeed, Total’sChief Executive Officer,Mr. Christophe deMargerie, in an interviewwith Bloomberg TV inJanuary, had alsocomplained that “Costsare becoming too high.”

He had noted that “Ourindustry is facing a hugeamount of cost pressure.More is being spent toproduce less. Our clientsare seeing the rate ofreturn on capitaldropping and they’rebeing challenged byinvestors who want themto be more disciplined.”

Delivery delayWith regard to the delay

in delivery, Ogan saidthis was as a result of aprotracted court case. Hesaid that “as a result of acourt injunction put inplace by an aggrievedparty, no work took placefor four years, whichmeant that the project thatshould have gone intoproduction in 2011, didnot award most of thecontracts till 2011.

“This delay and theupswing in contractorpricing meant that the costof the project hasincreased.”

He insisted that theproject had advancedsubstantially, as thefollowing had beencompleted: The livingquarters platform,substantially built inNigeria was installed inDecember 2013, the newproduction topsideplatform (OFP 2) with aweight of 16,000 tons wasinstalled on January 07,2014. The two bridgeslinking the existingproduction platform(OFP1) to the newproduction platform(OFP2) and the new OFP2to the living quartersplatform, were installedon April 07, 2014. All newpipelines, including thenew 70km gas export line,were laid by April 25,2014.

Contractors for theproject

Total, which blamedcontractors for theescalating costs, did notidentify them. However,Offshore-technology.comlisted some of thecontractors for the Ofon 2project to include:

Technip - a turnkeycontract for supplyingtopsides of the Ofon 2fixed platform (OFP2), inMay 2007. The scope ofworks will include load-out and transportation ofthe 16,000t topsides fromSouth Korea to the field,engineering, supply andinstallation of theequipment throughUnideck floatovermethod.

Nigerdock, anengineering andconstruction firm inNigeria, startedconstruction of the Ofon 2platforms in March 2012.In October 2011, Saipemwas awarded the contractto provide EPC,fabrication andinstallation of the OFP2jacket and living quarterplatform for phase 2.Fabrication of the 900m,1,970t jacket and 4,500tpiles will take place inRumuolumeni Yard in PortHarcourt, Nigeria. Thevessel, Saipem 3000, willprovide offshore activitieswhen the project comes online.

The EPC andcommissioning contractfor the phase 2 was

Continues from Page 19

Continues on Page 33


Corporate Finance

Emzor talksEmzor talksEmzor talksEmzor talksEmzor talkswellness throughwellness throughwellness throughwellness throughwellness through‘Maxwell’‘Maxwell’‘Maxwell’‘Maxwell’‘Maxwell’

The Group ManagingDirector/CEO of Emzor

Pharmaceuticals Limited, Dr.Stella Okoli, said the companyplans to deliver good health toNigerians through its newlyunveiled brand ambassador,‘Maxwell’.

She said that the brandambassador, an animation, isa new development in the lifeof the company.

According to her, “with‘Maxwell’ Nigerians,henceforth, are "wellocrats,"because they share in thebelief of the company for aworld where wellness isavailable to all and affordableby all. That is what we call inthe world of Emzor,"Wellocracy" and that is why allof us are Wellocrats.”

She went on to say that thevision that drives the companyis to see a world whereunlimited wellness is madeavailable to all and isaffordable by all. “For thisreason, we have remainedconsistently true to providinghigh quality healthcareproducts made available atprices which create value forall stakeholders. By so doing,we believe that one day, wewill see that ideal world ofWellness for everybody.

*FORUM: From left: Propertygate Development and Investment Plc’s Manager, DevelopmentTrading, Mr. Olayiwola Asere; Managing Director/Chief Executive Officer, Mr. AdetokunboAjayi, and Chief Executive Officer, SOFUNIX Investment and Communications Ltd, Mr. SolaOni at Propertygate’s Advisory Services Forum in Lagos.

BY FAVOUR NNABUGWU

The Nigerian capitalmarket has beenidentified as an

institution that contributes tothe socio-economic growthand development ofemerging and developedeconomies, more so with therebased GDP of $510 billionand its attendant impact onthe market.

This was a majordeliberation at the 2ndEdition of Securities andExchange Commission,SEC’s Learning Seriesthemed: Rebased GDP- It’sImpact on the NigeriaCapital Market, in Abuja.

The Director-General ofSEC, Ms. Arunma Oteh,while welcomingparticipants stated that theCommission’s learningseries was part of itscontribution towardsenhancing economic growthand development even asthe country’s capital marketcontinues to play itstraditional role of mobilisingmedium to long-term fundsfor development purposes.

Commending the NationalBureau of Statistics, NBS, forthe GDP rebasing, Otehstated that the exercisereceived applause from theAfrican Development Bank,International MonetaryFund and the World Bank

Rebased GDP: SEC examinesimplications for Nigeriancapital market

which showed that the NBSdid a very good job on therebasing of the country’sGDP.

She said: “I have neverseen a job well done as therebased GDP done by theNigerian Bureau ofStatistics."

While highlighting some ofthe objectives of thepresentations at the Series,the SEC DG said the aim wasto evaluate the macro-economic conditions of theNigerian Capital market inthe context of the rebasedGDP and to determine the

static, dynamic and linkageimpact of the new GDPconfiguration and theNigerian capital market.

Another objective, accordingto her, was toexamine the implications onfinancial services and capitalmarkets and above all, torecognise that Nigeria is arising star of Africaninvestment opportunities forwhich the capital market hasto foster the prospect.

Apparently, this is madepossible through some of thevital roles played such aschanneling resources,promoting reforms tomodernise the financialsectors, financialintermediation capacity to linkdeficit to the surplus sector ofthe economy and a veritabletool in the mobilisation andallocation of savings amongcompetitive uses which arecritical to the growth andefficiency of the nation’seconomy.

She said the new GDP wouldhelp the country manage itseconomy better whileprospective foreign investors,who probably have beenignoring the Nigerianeconomy, would reconsidertheir stand and begin to investin the economy because of itsattractiveness.

“Any investor that had in thepast ignored investing in thiscountry, can no longer affordto ignore Nigeria again.

“The rebasing has alsohelped to inform the world,investors and policymakershow large the Nigerianeconomy is and has placed itin the middle income country.

“It has also improved theNigerian capital market’sprofile,” Oteh said.

Shareholders ofUnilever Nigeria Plchave directed its

Board of Directors to considerbackward integration policy inorder to manufacture all of itsproducts using local contents,just as they called for interimdividend payment.

The shareholders at thecompany’s 89th AnnualGeneral Meeting, AGM,approved the resolutionsrecommended by the Board ofDirectors and commended themanagement and staff on theperformance for the financialyear ended December 31,2013, stressing the need forthe company to look inwardin the sourcing of its rawmaterials rather thandepending on importation.

Speaking at the AGM thevarious leaders ofshareholders’ groups, such asSir Sunny Nwosu,Chief Timothy Adesiyan, Mr.Boniface Okezie, Mr. NonahAwoh and others, said: “Weappreciates the dividend ofN1.25 per share that has beenrecommended and this shows

Shareholders task Unilever on localcontent, seek interim dividend

the sustainability of thecompany’s dividend policy,but we think going forward,interim dividend payoutshould be consideredinstead of bonus issue toavoid dilution of stakeholdings.

According to them “Thecompany should look atsourcing its raw materialslocally. We don’t want thecompany to make Nigeria adumping ground, the ideaof importing and couplinggoods should bediscouraged. If our rawmaterials are sourcedlocally, the prices of ourproducts will be verycompetitive.”

The shareholders equallyadvised the company toreconsider its finance costsand find a way of reducingit.

Responding, theChairman of UnileverNigeria Plc, His MajestyNnaemeka A. Achebe,commended theshareholders for theircontribution and comments

at the meeting, saying “TheBoard will look at all issuesand act on them for the goodof all the stakeholders.

According to him “Thecompany’s results for 2013are reflective of short termeffects of deliberateinvestment strategy toachieve a more sustainablefuture. Our companynevertheless continues todemonstrate strongfundamentals and strongagility to weather theincreasing fiercelycompetitive landscape andtough operatingenvironment.

“Our turnover grew byeight percent compared to1.5 percent in 2012;Operating margin was 13.1percent with earnings pershare of N1.27. We arepaying a dividend of N4.7billion, translating to N1.25per share. Revenue went upto N60.004 billion fromN55.547 billion, whileoperating cost went up by 87percent from 84 percent in2012.”

Caverton, an oil servicesfirm, said it plans to list

N31.83 billion shares on theNigerian Stock Exchange,NSE, tomorrow

The company also plans tocommence the process ofraising fresh capital by fourthquarter of the year from theNigerian capital market afterthe listing.

The Chief Executive Officerof the company, Mr. OlabodeMakanjuola, said in aninterview that the capitalraising exercise will help thecompany to diversify itscapital structure from debt,which is currently around 75percent of the capital base bybroadening the ownershipbase of the company.

Makanjuola said thecompany’s debt was securedby contracts withmultinational oil companiesfrom where it generated cashflows.

“Most of our financing hasbeen done via debt. In listing,we want to diversify ourpipeline of capital.

NKIRUKA NNOROMwith Agency Report

Caverton to listN31.83bn shareson NSE

CMYK


Corporate Finance

May & Baker Plc hasd i s c l o s e dplans to raise at

least N3 billion from thecapital market to boost itsworking capital.

The Managing Director,Mr. Nnamdi Okafor, whomade the disclosure at afacility tour of the company’sproduction factory in Ota,Ogun State, said thecompany will be payingdividend to shareholders inthe current financial yearafter failing to pay themdividend the previous year.

Though he did not disclosethe date for commencementof the capital raisingexercise, he said it will bethrough a combination ofrights issue, privateplacement or debt equity byprivate investors.

He, however, ruled outraising the money through apublic offer and undertakingfurther capital investment,saying that the company hasdone quite a lot in thatdirection in the last fewyears.

“We want to apologise to allinvestors and shareholders

TOURISM WORKSHOP: From left: Mrs. Taba Peterside, GM, Nigerian Stock Exchange;Mr. Bassey Essien, Managing Director, International Style Week; Mrs. Funmi Ajila-Ladipo,National President, Fashion Designers Association of Nigeria and Dr Osuji Otu, NationalProfessional Officer, Science, UNESCO during the 2014 Tourism Development Workshop inLagos. Photo Lamidi Bamidele

May & Baker plans N3bn fresh capital injectionBy NKIRUKA NNOROM for our inability to give them

something to smile about lastyear. We have actually in thepast two or three years beentrying to build strongfoundation for the businessso that we will begin toreturn very good profit andof course dividend.

“And I think that last yearwill be the last that we wouldhave to deliver this kind ofresult because all the issuesexcept the need torecapitalise have beenaddressed, and goingforward, we believe that weshould be in a better positionto deliver good profit anddividend,” Okafor said.

I believe that the worst daysare now behind us and thatour company willprogressively begin todeliver better returns. Wehave already started takingsteps to reverse the lossposition of 2013 and bring thecompany back to profitability.

“These measures includestrategies to sustain revenuegrowth through moreaggressive marketing andproduct initiatives, efficientmanagement, enhancingworking capital andaggressive reduction inoverheads costs,” he added.

“We made some huge capitalinvestment in the past threeto five years. We are notgoing into any major capitalinvestment anymore. Whatwe need to do now is to shoreup our working capital so thatwe will have to competestrongly in the market placeand deliver value to all ourshareholders.

So, the money we will beraising will be majorly forworking capital,” he stated.

He also noted that the

company is in the process ofsecuring WHO certification,saying that an audit of theproducts and processes wasconducted earlier thismonth.

According to him, “Weexpect that in the next coupleof months, we should be ableto scale through the firststage of bagging a WorldHealth Organization (WHO)pre- qualification and lookforward to fast tracking thesecond and final stage and

before the end of the year, wewould have our products pre/qualified,” he said.

The company had in 2013financial year endedDecember 31, 2013, postedloss after tax of N103.089million as against profit aftertax of N75.943 million in2012 and turnover of N6.368billion compared to N5.668billion posted incorresponding period in2012.

26 —Vanguard, MONDAY, MAY 19, 2014


CMYK

Micro FinanceCommodity index

Stories by BYPROVIDENCE OBUH

Alhuda Centre of Islamic Bankingand Economics(CIBE) has said

that Islamic banking is not forreligious intervention but a businessmodel.

Chief Executive Officer, AlhudaCIBE, Mr. Muhammad Mughal, saidthis while addressing an InternationalConference on Islamic Micro financeBusiness Model, saying, “Islamicmicro finance is being utilised as onlyfor Muslim communities in fewcountries including Nigeria, India,Tanzania, and Ethiopia. But this isquite wrong, it should be used as abusiness model not as religiousintervention." Islamic Micro financeis a system which can be utilised andoperated by all the segment of thesociety without any religiousdiscrimination. Yes, there is an extrabenefit for muslims, that it is inaccordance with their religious beliefbut for non-muslims it is an idealfinancial instrument for povertyalleviation and social uplifting.”

Mughal added that the demand forislamic micro finance is rapidlyincreasing in order to serve povertyalleviation and social development,hinting that its active client base haveexceeded two million from whichmore than 700,000 belong to Sudanand more than 400,000 clients ofislamic micro finance institutions arefrom Pakistan.

According to him, Yemen,Indonesia, and Bangladesh also havea good number of clientage withsatisfactory demand in Morocco,Senegal, Nigeria, and Tunisia.

One of the challenges of theinstitution is funding, he said, stating,“ there are lots of challenges faced byislamic micro finance i.e. squeezedvolume of organisations, lack oftechnical expertise and quality HR,lack of standardisation of theproducts, they are many but the mainhurdle is lack of funds for the

Islamic micro finance not forreligious intervention – CIBE

institutions, this is why growth is notso constant in the system but it canbe rectified with venture capital.”

AlHuda: CIBE is an organisation foreducation, training, awareness andislamic financial productdevelopment, conduct trainingsession of islamic banking, Takaful &Sukuk for Islamic Banks and otherfinancial institutions.

MTN to empower 10entrepreneurs withN10m

Using its Link Forum as a platform,Africa’s leading ICT Company,

MTN, is sourcing for 10 entrepreneurswith ideas in order to empower themwith N10 million grant.

The entrepreneurs will be sponsoredto the 2014 World EntrepreneurshipForum taking place in Lyon, Francewith the grants.

The company announced its 2014empowerment programme known asLink Forum, which took off in Enuguon May 16, extending to other citieslike Port-Harcourt, Lagos and Abuja.

The programme tagged “ BuddingEntrepreneur Challenge” with a viewto budding entrepreneur challenge, isan innovative and interactive platformthat is focused on advancing theaspirations of budding entrepreneursand professionals, by providing themwith the opportunity to interact withrenowned and successful NigeriaBusiness icons, who will share withthem knowledge, experiences andinsights on their business success.

A statement made available by thecompany, states that notablepersonalities like Mr Tonye Ibiema,CEO, Graftin Entertainment andSecurity Limited; Mr Opriebo West, aCharted Architect and the Director ofEST Company Limited, a constructioncompany based in Port-Harcourt andmany others have participated in thepast.

The Turkish Naval Forces hasentered into collaboration with

the Nigerian Navy on its water waysto facilitate maritime security.

For the first time, Turkish warshipberthed in Lagos penultimate weekand was handed over to the NigerianNavy and Defence personnel duringa port visit led by Vice Admiral/Commander of the Southern Sea Area,Turkish Naval Forces, Mr. HasanUsaklioel, at the Apapa Ports in Lagos.

Turkish Ambassador to Nigeria, Mr.Mustafa Pulat said that it is workingon building a solid ground to ensurerelationship with the country fairsbetter.

Pulat said that the Turkish Nigeriarelationship has grown stronger in thelast two decades, stating, “We attachso much importance to our relationshipwith Nigeria and we do our best toimprove it in all fields includingsecurity cooperation, which is why ournavy is here to participate in the

Turkish Navy partners Nigeria tofacilitate maritime security

coming urban game expressprogramme.

“At the political level, we have highlevel of exchanges of ministerial visitsand at humanitarian level there isstrong exchange of business peoplevisiting Nigeria and Turkeyrespectively from each others country,we have a relatively strong legislativebasis,” he said.

Describing the visit as historical,Commander, Turkish Maritime TaskUnit, Captain Ihsan Bakar, said, “Weare enjoying port visit to Nigeria forthe first time in the Turkish Navyhistory, this port visit is not onlyassociated with urban game expressexercise but is a historical event fromour perspective because is coming forthe first time.

“We are here to make contributionsto enhancing divided relations fromnavy to navy, this is the sixth port visitwe are undergoing and the previousport visit was to Ghana.

May 09 -May 15, 2014

CMYK

28 —Vanguard, MONDAY, MAY 19, 2014



CMYK

Homes & Housing Finance

Stories by YINKAKOLAWOLE

The Federal Governmentis to adopt an American

building technology for thedevelopment of masshousing across the country ina bid to tackle the hugehousing deficit in thecountry.

Minister of Lands, Housingand Urban Development,Mrs. Akon Eyakenyi, statedthis during a visit to the siteof the pilot project beingundertaken by the Ministryin partnership withAmerican Building Systemsto develop 80-unit prototypehouses in Kuje, in theFederal Capital Territory(FCT). The building systemadopted for the prototypehousing scheme employsthe use of light gauge steeltechnology and local rawmaterials.

The minister said the newtechnology was beingadopted by government torapidly address the hugehousing deficit gap in thecountry estimated to be 17million units. She assertedthat the new technology,which is mainly used in theUnited State of America,ensures the completion of aunit of housing within fiveto10 days. According to her,

FG tackles housing deficit withAmerican technologyafter the completion of the80-unit prototype affordablehousing scheme, the newtechnology would bereplicated in other parts ofthe country.

“I came here to see one ofthe project sites of the ministryhandled by the AmericanBuilding Systems where theyuse special Americantechnology to build the

housing units. And I haveseen the construction andeach block can be deliveredabout 10 days after thefoundation would have beenlaid. I have gone round andseen the structure and I wantto say that I am veryimpressed about thetechnology. The former USAmbassador to Nigeria, RobinSanders, is also here with me

to give explanation of herrole from the US NEXIMBank to back up the Nigeriangovernment, my ministry inthis project,” she said.

Eyakenyi explained thatthe choice to adopt thesystem was because it ischeaper and faster. “Fromwhat we have seen, it ischeaper to deliver and alsotimely to deliver. Forinstance, in 10 days, a threebedroom unit that goes forN6 million only can bedelivered. If we go with ourconventional buildingmethod, except subsidised,you will have a similarbuilding going for about N8million to 10 million. Oncompletion, the developerwould have a maintenanceunit at the site. Governmentwould replicate thistechnology in other states ofthe federation,” sheremarked.

The Nigeria MortgageRefinance Company

(NMRC) has called forcontributions from thegeneral public in support ofthe formulation of a ModelMortgage and ForeclosureLaw to be adopted by pilotstates. The move is infurtherance of its mandate ofpromoting legislativereforms to improve processesin land administrationtowards creating an enablingenvironment for mortgageorigination in the country.

The pilot states are thosethat have committed tosupporting the NMRCinitiative by creating anenabling environment formortgage orientation to berefinanced by the company.They include Abia, Anambra,Bauchi, Bayelsa, Delta, Edo,Ekiti, Enugu, Gombe,Kaduna, Kano, Kwara,Lagos, Nasarawa, Ogun,Ondo and the FederalCapital Territory (FCT).

A statement from thecompany calling for thememoranda stated: “NMRChas engaged a panel ofreputable law firms andexperts to advice on andcoordinate the process of

NMRC seeks memoranda on modelmortgage, foreclosure law

formulating and drafting themodel law, which will beimplemented in closecollaboration with the pilotstates and key stakeholders.

“The key issues the modelmortgage law will seek toaddress include fast-tracking the process for

creating legal mortgages(including reducing the costand the processes forobtaining the relevantconsents and registration),timely resolution of disputesarising out of mortgagetransactions, consumerprotection and creating anefficient foreclosure process.

Less than 25% of Nigerian workers subscribe to NHF

Less than 25 percent of Nigeria’s workingpopulation subscribe to the National

Housing Fund (NHF).Oyo State Controller of the Federal Mortgage

Bank of Nigeria (FMBN), Mr Raheem Onitolo,disclosed this in Ibadan, noting that mostNigerians have a wrong perception of the fund.

“NHF is available to both government andprivate workers, but unfortunately mostworkers are pessimistic about it. Many believethat nothing works in Nigeria and because ofthis, they hold back from contributing to thefund or even harnessing it,” he said.

Onitolo assured that FMBN had improved theprocess of accessing the fund, allaying the fearof potential contributors on the bureaucraticbottlenecks usually associated with theprocessing of the fund. He advised workersapplying for the fund to ensure their landedproperty were supported with governmentapproved title deeds. “Having a registered titledocument is a major consideration we cannot

overlook,” he added.For retired subscribers who did not access

the fund while in service, he said theircontributions would be refunded in lump sumwith two per cent interest and that the refundwould be paid within 90 days of the receipt oftheir application.

In a related development, FMBN hasdisbursed about N102 million housing loansto qualified NHF subscribers through ResortSavings and Loans Plc (RSL) in the first quarterof this year.

Managing Director/CEO, RSL, Mr. AbimbolaOlayinka, who said this in a statement in Lagos,noted that the fund is open to all Nigeriansfrom the ages of 18 years to 65 years. Hereiterated that the opportunity is open toprivate sector employees, public servants,self- employed individuals, businessmen andtradesmen, adding that the minimumrequirement is to have at least 10 percentequity contribution of the cost of the house.

•RSL disburses N102m to subscribers

Lagos to introduceLagos to introduceLagos to introduceLagos to introduceLagos to introducee-building planse-building planse-building planse-building planse-building plans

Lagos State government isset to introduce electronicbuilding (e-building) plans inthe state to fast-track theprocess of building planapproval.

Commissioner for PhysicalPlanning and UrbanDevelopment, Mr. OlutoyinAyinde, revealed this at aseminar in Lagos. He said theprocedure for obtainingapproval for building plans iscumbersome, time-consumingand have not made an impacton mass housingdevelopment, hence thenecessity for e-planningpermit. “Apart from otherstrategies, we have been ableto put in place for properadministration of the buildingplan approval, we are making frantic effort atensuring that we bring the e-building plan approval policyinto the system,” he added.

Ayinde said the ministryintroduced pre-submissionapproval scheme to ensurethat construction conforms tocurrent trend, adding that acommittee had been set up towork on the reduction ofbuilding plan approval fee,adding that developmentpermit was getting better.

US fixedUS fixedUS fixedUS fixedUS fixedmortgage ratemortgage ratemortgage ratemortgage ratemortgage ratedips to 4.2%dips to 4.2%dips to 4.2%dips to 4.2%dips to 4.2%

Average U.S. rates on fixedmortgages declined for a thirdstraight week. The low ratescould give a boost to thespring home-buying season,which has gotten off to a slowstart.

Mortgage buyer FreddieMac said that the average ratefor a 30-year loan eased to 4.20percent from 4.21 percent theprevious week. The averagefor the 15-year mortgage fellto 3.29 percent from 3.32percent.

Mortgage rates have risennearly a full percentage pointsince hitting record lows abouta year ago. The increase inmortgage rates over the yearwas driven in part byspeculation that the FederalReserve would reduce its bondpurchases, which have helpedkeep long-term interest rateslow. Indeed, the Fed hasannounced four declines in itsmonthly bond purchasessince December because theeconomy appears to besteadily healing. But the Fedhas no plans to raise itsbenchmark short-term ratefrom record lows.

A privately developed house


CMYK

Insurance

FORUM - From left: LEAP Africa Board Directors; Mr. Babatunde Dabiri, Dr. AbdulMukhtar, Lagos State Commissioner for Commerce and Industry, Mrs. Sola Oworu andLEAP Africa”s Founder & Director, Mrs. Ndidi Nwuneli at the LEAP Africa 9th CEO Forumheld in Lagos.

‘Transfer of N305bn Police Pension,illegal’By NKIRUKA NNOROM

The move by theNational PensionC o m m i s s i o n ,

PenCom, to transfer the N305billion Police pension fund tothe proposed NPF PensionsLimited has continued togenerate criticism as financialanalysts have insisted thatthe move is illegal andsuspicious.

They also said that theaction if hatched willjeopardise the future of menand women of the Police forceafter retirement, saying thatit contravenes the PensionReform Act, 2004.

Some analyst had raisedthe alarm that given thehistory of the fraudassociated with policepensions, the N305 billionsavings currently beingmanaged by existingPension Fund Administrators(PFAs) should not be movedto a new PFA to be known asNPF Pensions Limited.

Reacting to the fears of theanalysts, PenCom, hadthrough its spokesman, Mr.Emeka Onuora, assuredthat licensing of NPFPensions Limited to managethe pension savings of menof the force pending theopening of the transferwindow would not pose anythreat whatsoever to thescheme.

However, a financial andlegal analyst, Mr. AyodeleAdekunle, said in a statementthat the federal governmentshould re-consider the movebecause it does not only posea threat to payment of menand officers of the NPF, but also moving the fundsfrom existing PFAscontravenes the law whichthe government, itself, hadput in place.

“We all are living witnessesto the stories about policepensions in this country andthe N305 billion hasprofessionally been managedunder the pension reformover the years. Changing thestatus quo has so many risksand I believe the governmentshould consider the demeritsof this move before takingfurther action,” he said.

Adekunle explained thatsection 11(2) of the PRA 2004gives every contributor theright to choose any PFA , stressing that the move byPenCom contravenes thisprovision and also raisessome suspicion.

“Apart from the fact thatmoving the fundscontravenes that section ofPRA 2004, I am suspectingsome foul play. The regulatoris saying that after thetransfer, the police personnelwill have the freedom totransfer to the PFA of theirchoice after two years. To me,

there is ulterior motive in thisposition. Instead oftransferring the entirepension to a new PFA, theopportunity should be givento the police personnel rightfrom day one so that theydecide which PFA to use

rather than compelling themto move to a new PFA andafter two years they willtransfer from the new PFA toany other one of their choice.This will not only becumbersome but it is alsodoubtful,” the statement said.

Adekunle, thereforeurged the government tore-evaluate theimplications of the plan forthe pension fund industryand future of the personnelof the NPF.

Leadway Assurance donates tocharities, fetes less privilegedchildrenIn commemoration of the

15th year anniversary ofthe passing of its founder, Sir(Dr.) Olusola HassanOdukale, Leadway AssuranceCompany Limited hasdonated medication, foodstuffand equipment worththousands of naira to fourhomes in Lagos state.

The homes are Modupe ColeMemorial Child Care andTreatment Home School,Akoka; Ile Aanu Olu Pre-school, Surulere; NigeriaSociety for the Blind andWesley Schools for HearingImpaired Children.

In a statement, theunderwriting firm said thatthe donations were madefollowing the May 3anniversary date infurtherance of the ideals of thelate founder who was well-known for his philanthropy,integrity and soundprofessional/business ethicswithin the industry.

Using the platform of the Leadway movie club, thecompany also hosted about180 children from lessprivileged homes to a kiddiemovie at the SilverbirdGalleria, Ahmadu Bello,Victoria Island, Lagos. Thechildren from Modupe Cole

Memorial Child Care andTreatment Home School,Down Syndrome FoundationNigeria, the Slum to SchoolProject along with theircaregivers, were treated topopcorn and drinks and wereexcited to visit the renownedcinema house.

Speaking at the event,Amaka Obidi of the DownSyndrome FoundationNigeria, lauded thecompany ’s initiative inproviding the platform as analternate means of educatingthe children. She enjoinedother corporate institutions totake a cue from Leadway andshow similar constructivephilanthropy to the children.

Born on March 1926, SirOdukale started his business

life as the general goodsstore owner of HassanStores. He establishedLeadway AssuranceCompany Limited in 1970to fill the gap of anindigenous InsuranceCompany that wouldcompete favourably withthe foreign companies atthe time and was itsfounding ManagingDirector/Chief ExecutiveOfficer. He sat as theCompany’s chairman from1993 till 1999 when hepassed away. Sir HassanOdukale was a devoutChristian andphilanthropist. He wasblessed with children anddied on 3rd May, 1999 atthe age of 73.

NIIA DG for WBF lecture

The Director General,Nigeria Institute of

International Affairs, Prof.Bola Akinterinwa will delivera lecture on povertyeradication at this year ’sWilson Badejo Fundation,WBF annual lecture.

The event which is 7th in itsseries is scheduled for May

By WILLIAM JIMOH 21, 2014 at the NigeriaInstitute of InternationalAffairs, NIIA, Lagos.

Addressing newsmen inLagos, Chairman of thefoundation, Dr. WilsonBadejo, said the lecturetagged; Nigeria, LimitedEducation Access forUnderprivileged and theEscalation of the Incidence ofMass Poverty: An Initiative of

Positive Change.” was aimedat reliving the plight of theless privileged in the society.

According to him “Studiesin recent times have shownthat Nigeria today is a countryin which poverty, humandegradation anddespondency reign supreme.But this situation need notremain so.

E tisalat Nigeria hasstrengthened its

route to the market platformwith distribution partnersAwards, christened, HeroesAwards 2013.

The 2013 Awards whichheld in Lagos saw thecompany giving out rewardsin 11 categories to appreciatethe effort of its distributionpartners towards its successin the past businessyear.Acting Chief ExecutiveOfficer, Etisalat Nigeria,Matthew Willsher, saidEtisalat was pleased torecognise and reward itsdistributors because they arean important link with thesubscribers and have tobelieve in the business torepresent it well before thepublic.

Willsher who wasappreciative of thedistributors role in takingEtisalat to its present positionin the telecommunicationsindustry in Nigeria, said hehoped that both parties willtake the brand to a higherlevel.

According to him,”theawards we have given todayare just a token to show thatwe appreciate the effort ofour distribution partners inhelping to take our productsand services to the end users.Continuing, he stated: “weare grateful to ourdistribution partners for thepart they have played intaking us to where we aretoday. We hope that they willkeep up the effort so that wecan both achieve ourgoals.”The distributionpartner with the HighestSIM Activations Award wentto Upper Room Limited. Mr.Olukorede Odukoya,Managing Director of thecompany, went home with anew Toyota Hilux truck. 10distribution partners won inthe Best Overall Performancecategory. The CEO’s Awardfor Overall Excellence wentto Office Devices Limited,Alennsar Infinity CompanyLimited and CantStopNigeria Limited. A total of50 distribution partners wererewarded at the event.

Etisalatstrengthenspartnership withdistributors


E - Commerce

WORKSHOP - From left, Minister of Tourism, Culture and National Orientation, High ChiefEdem Duke, Honourable , Chairman, Citi Lodge Hotel and Conference Centre, Olufemi Talabi,Director-General, Nigerian Tourism Development Corporation, Mrs Sally Mbanefo, and ChiefExecutive Officer, International Style Week Limited, Bassey Essien, at the Tourism DevelopmentWorkshop in Lagos.

Co-Chief Executiveofficer ofSupermartng.com,

Raphael Afaedor has calledfor localization of solutions bye-commerce operators in thecountry in order to achievemaximum impact andsucceed in the business.

Afaedor made the callwhile speaking at this year’sedition of the Mobile WestAfrica conference held inLagos.

Speaking on what isdriving development in e-commerce and retail inNigeria and on whetherAfrican version of Amazoncan emerge from Nigeria, heexplained that the key tosuccess is to start from acustomer and that it is not somuch about the model thanabout good solutions that willserve a customer’s needs.

“Ask yourself, who is thiscustomer that I am serving?Design a solution for thatcustomer. It is not so muchabout the model. It is not somuch about e-commerce. It isnot about an Amazon or e-Bay model, it is about who isthis customer and how areyou going to fulfill this

Expert advocates localisingsolutions to drive e-commerce

customer’s needs? Alsoremember that the winningsolution will reflect the Africansituation,” he said.

He further explained thatthe e-commerce space is largeenough for anyone to playprofitably and that despitechallenges and culturalinfluences of retail in African

STORIES BY JONAHNWOKPOKU

societies, opportunities stillabound for people to providesolutions using the internetmedium.

“Lagos is an interestingmarket to play, because it isvery big. If you find acustomer and design asolution for that customer,then the customer will pay

you for the services you areproviding, and then youstand a good chance ofsucceeding. Then also, ifyou have an overview of themarket opportunities, thenyou will understand that itis to serve customersconveniently. Retail is notwhat retail should be and soyou have customers alwaysasking for solutions. And soanyone who will design suchsolutions also stands achance of winning.

“It is also important to notethat our traditional retailmarkets will not disappearanytime soon. As a matter offact, it will never disappear.This is because the marketsare as African as the peoplein the continent. Also theyserve a significant part of themarket. The brick and mortarshops will continue to growbut there will still be room foropportunities in the e-commerce space. There willstill be room for partnershipsand collaborations,” he said.

He noted that having beena major player in the e-commerce space for awhilenow and tried differentmodels, he has been able tolearn that anyone delvinginto the space should have adeep appreciation of whatretail and e-commerce meanand how they playinterchangeably.

“What I have been to learnover time is that the conceptis e-commerce and the realityis that retail is what is beingsolved. People have retailneeds and e-commerceoperators should be able toprovide that option forpeople to shop for what theyneed using the internetmedium. Whatever you do,you have to localize thesolution. You have to becertain from the start whatretail solution you want toprovide. You can succeed ifyou identify a key customerneeds, focus and make sureyou serve the need of thatcustomer.”

Chief Executive Officerof Gloo.ng, Dr

Olumide Olusanya has saidthat he aims to capture atleast 5 percent of Nigeria’sonline grocery market in thenext five years and to coverthe whole of Lagos bySeptember 2014.

Gloo.ng is an onlinegrocery store.

He stated this whilespeaking to Vanguard in anexclusive interview on theoperations of the firm inLagos.

He said the e-commercespace in Nigeria remains ahuge one that no one,including Gloo.ng hasscratched the surface.

He said Gloo.ng is aiming

Gloo.ng unveils plan to capture onlinegrocery market

for 5 percent market share inthe medium-term with a planto cover the whole of Lagosby September 2014.

Olusanya who abandonedmedical practice for the e-commerce business said, “Hisvalue proposition is that ofexchanging trust our usersrepose in us with happinesswe deliver to their doorstepscontinually. Gloo.ng enrichestheir lives with happiness byvirtue of the precious time,the valuable money and theneedless stress it saves onefrom the inconvenience ofgoing to shop at thesupermarket.”

“This time should be betterspent on other activities thatpromote happiness, such asspending quality time with

friends and family,” headded.

He said he was inspired bythe desire to reduce stressfor home keepers, especiallywomen who have to combinetheir jobs with keeping ahappy home.

He said the idea is to relievesuch women of the stress ofbalancing theseresponsibilities.

“Gloo.ng will enable us topartner with them to buildthe happiness they want tobuild into their homes andfamilies, by saving them theprecious time, the valuablemoney and the needlessstress spent on the veryunnecessary inconvenienceof supermarket visits,” hesaid.

O n l i n et r a v e ldemandexpands60%a n n u a l l y

Managing Director ofNigeria’s online

hotel booker, MarekZmyslowski, has said thatonline travel demand isexpanding rapidly at a 60percent annual growth rate,and will continue to increaserapidly so in the foreseeablefuture.

Travel e-commerce, hesaid, is an increasinglybooming industryespecially in the sub SaharanAfrica

Speaking at the MobileWest Africa conference inLagos, he noted that Sub-Saharan Africa receives 5percent of all globaltravelers.

“Last year alone, thenumber of search queriesfor Hotels and Tourism hasgrown astronomically,reinforcing the debate thattravel e-commerce isbooming at a fast-growingrate and mobile access to e-commerce websites andcompanies alike will onlycontinue to grow,” he said.

He explained that, “With61 percent of internet usersaccessing through mobiledevices, Nigeria’s travelindustry has become anincreasingly blossoming e-commerce. ”

BitcoinFoundationhit byresignations

As the mostprominent tradegroup pushing

adoption of the electroniccurrency, Bitcoin began itsannual conference on Fridaylast week; it was being roiledby controversy.

At least 10 members of thenonprofit BitcoinFoundation resigned overlast week’s election ofonetime Disney child starand current Bitcoinentrepreneur and financier,Brock Pierce as a newdirector.

Some of the members citedPierce’s troubled past.

That includes allegationsin lawsuits from threeemployees of Pierce’s firstc o m p a n y , D i g i t a lEntertainment Network,that he provided drugs andpressured them for sexwhen they were minors.


,

“The most obstinate illusions areultimately broken by facts, TrevorRoper, in THE LAST DAYS OFHITLER. (VANGUARD BOOK OFQUOTATIONS p 100).

On Monday, May 12, 2014,the entire world read in thePUNCH, on page 9, that

“We’ve achieved 85 per cent self-sufficiency in rice production.” Thestatement was credited to the FederalMinister for Agriculture, Dr AkinwumiAdesina. He was further quoted tohave said that “In 2013, we produced2.9 metric tonnes of paddy rice. In2012, we produced 1.4 million tonnes.Nigeria is now 80 to 85 per cent self-sufficient in paddy rice production.”With all due respect to the HonourableMinister, unless repudiated by him,this statement represents an illusion.And I fervently pray that this is notwhat he presents every week to theFederal Executive Committee, FEC,as progress report.

That statement is the mostridiculous thing anybody in anygovernment, Federal, State or Localgovernment had uttered in a longtime in Nigeria. Let me explain. But,before the explanation, permit me tomake a necessary diversion – whichis pertinent to the discussion.

On May 7, 2014, I set out forSokoto from Lagos in order to fulfilla pledge made in a church in 1990that if God kept me alive until May 8,2014, I will return to that church tooffer thanksgiving. Instead of flyingas my family advised, I decided togo by road despite the horriblecondition of most of the roads fromLagos to Sokoto. My reason wassimple. I wanted to know frompersonal experience how far thatzone of Nigeria had progressed withrice farming.

Until 1990, I had operated a ricemill, Haske Rice Mill Limited, nextto Sokoto Cement, on Kalambina

,

,

Minister of Agriculture in fantasyland —1Road in Sokoto. I had also operatedfarms at Talata Mafara, Yelwa Yauriand some villages near Jega andKoko. In addition to this, I had anetwork of farmers supplying rice tothe mill in Sokoto. I was among thoseresponsible for the introduction ofthe Fadama Project in Sokotocomplete with the construction of thedam which collapsed two years ago.I need not go into the details of thework I undertook to get theInternational Rice ResearchInstitute, IRRI, at Badeggi, Niger

State, to Yelwa Yauri, Koko, Jega inKebbi State and Tambuwal in SokotoState, it was clear to me that therehad been a quantum jump in riceproduction in the Northwestgenerally. Coming back downthrough Talata Mafara, Gusau, Chafein Zamfara State and Funtua inKatsina State, it was even moreobvious that Nigerian farmers hadrisen to the challenge of producingrice in large quantities. On that countthe Minister and I are in totalagreement.

On this trip, I was in no hurry; Istopped at will and spoke to farmers,millers, sellers and buyers – especiallyat Yelwa Yauri, where the main marketis situated off the road near the Emirof Yauri’s impressive palace. YelwaYauri was, and is still, a weathervanefor studying the rice situation inNigeria. The Local Government is oneof the largest producers of local rice,more than national average in termsof per capita consumption of rice (theyeat more because they grow more), itis also a rice milling community.Despite its large production of localrice, it is also a battle ground for localand imported rice. Price is always thedeterminant of choice. Whenever, thedisparity in price between local andimported rice becomes too wide,consumers eat more imported rice. So,even in a large rice-producingcommunity like Yelwa Yauri, it wasclear to me that Nigeria had notachieved anything close to 80 to 85per cent self-sufficiency as theMinister is stating everywhere.

I have gone to all those details justto let the readers, including peopleclose to President Jonathan know thatone of the reasons Nigerians fail totrust government is because some, ifnot most, of his Ministers say thingsthat would please him rather than thetruth he should know. Unfortunatelyfor the President, a lot of people knowthe truth which his officers try very

hard to hide from him. Getting theMinister of Agriculture sacked is notthe objective of this write-up. GettingNigerians fed, real food instead of hotair is the goal. And let me address whythe Minister of Agriculture and hisstaff, some of who will be identifiedsoon, are not helping matters.

The first thing one notices about DrAdesina’s presentation of figures istheir lack of breakdown that willenable individual verification. For ascientist, a long-term researcher, DrAdesina should be among the first torecognise the importance of a secondview in order to establish the validityof statements made. The Minister hadtossed out figures about millions ofjobs the Ministry of Agriculture hadcreated since 2012. He had alsoprovided figures about rice andcassava production nationwide. Hehad failed to provide a breakdown asproof of his claims. On a recent visitto Olam Farms in Nassarawa State,the Minister announced to reporters,at least DAILY TRUST andVANGUARD reported the visit, in hisentourage that “We can convenientlyboast of about 4,200 small mills inAbakaliki and several other placesacross the country as at today.” Thatstatement can be read two ways;either there are 4,200 small mills inAbakaliki alone or there are 4,200mills in the entire country. Any wayyou read it, one would expect thatthe Minister would have abreakdown of the number of ricemills in each state, as well as theFederal Capital Territory making upthe 4,200. Yet, if the request is made,the Ministry will not be able toprovide it –just as it has been unableor unwilling to provide thebreakdown, by states, of jobs claimedto have been created.

Visit: www.delesobowale.com orVisit: www.facebook.com/biolasobowale

State to introduce several varietiesof rice into Nigeria – each varietybeing the most suited for its ownecological zone.

So, the Honourable Minister and thereaders must know that I am anexpert on rice production in all itsaspects – from farm to table. Goingnorth and driving through Oke Ogunin Oyo State, Jebba in Kwara State,Mokwa, Makera, Kontagora in Niger

On this trip, Iwas in no hurry;I stopped at willand spoke tofarmers, millers,sellers andbuyers –especially atYelwa Yauri,where the mainmarket issituated off theroad near theEmir of Yauri’simpressivepalace


Cover StoryOil majors fleece Nigeria withinflated project costs

awarded to Eiffage ConstructionMétallique, in November 2011.

The value of the contract is $424m.Aveon Offshore was awarded a $50mcontract to fabricate OFQ jacket,helideck, utility deck and piles for theLQ platform, in December 2011. Thesubsea systems are expected to beinstalled in March 2013.

Sofresid and OOPE are theengineering consultants. Akmos GlobalServices is the spare parts supplier forplatform maintenance.

A consortium of Actemium Oil & GasEngineering (AOGE) and Yokogawawas selected for providing the detailedengineering, functional analysis, HIPSdetail studies, instrument databasemanagement, supply of machinesvibration monitoring system andelectrical network power shading 5,000

I/O, and Nexans will provide Halogen-free thermoset compound SHF2 orXLPE low smoke PVC outer sheath toreduce gas flaring.

New facilitiesTotal listed some new facilities to be

added to the existing complex toinclude a new processing platform; twonew bridges to link the productionfacilities; two well head platforms; aliving quarters platform toaccommodate about 124 people; a 70-kilometre 12-inch gas export line; 40kilometres of infield lines and cableslinking the well heads to the centralcomplex; 24 new wells. Total also notedthat the project “has been a tremendoustechnical and technological offshoreundertaking with substantial Nigeriancontent designed to maximize revenuefor the joint venture and the FederalGovernment.”

GROUP Managing Director andChief Executive Officer, Com-

puter Warehouse Group (CWG) plc,Mr. Austin Okere has been named asthe chairman of the Nigeria InternetGovernance Forum (NIGF) 2014.

Confirming this development, thechairperson of the Local Multi-stake-holders Advisory Group (LMAG) ofthe Nigeria Internet Governance Fo-rum, Mrs. Mary Uduma, said that Mr.Okere has accepted to preside overthis year’s edition of the event to beheld at the Musical Society of Niger-ia (MUSON) Center, Onikan-Lagoson June 10, 2014.

According to her, LMAG is excitedto have Mr. Okere chair the event ashis nomination and acceptance wasunanimously endorsed by memberswhich consist of the Ministry of Com-munication Technology (MCT), Na-tional Information Technology Devel-opment Agency (NITDA), Nigerian

Austin Okere to chair NIGF 2014Communications Commission (NCC),Nigeria Internet Registration Associ-ation (NIRA), DigitalSENSE Africa(DSA), Internet Society (ISOC) Niger-ia, Rita Talabi Foundation, CreativeTechnology for Development Initiative(CTDI) and Global Network for Cy-bersecurity (GNC).

Mrs. Uduma also said that the two-day 2014 NIGF would host its youthworkshop on the first day with focuson “Internet Governance for Job Cre-ation & Social Enterprise Develop-ment” to be presided over by an In-ternet Security Consultant and formerD-G of NITDA, Professor CleopasAngaye.

On the second day, she explained itwould centre on “Harnessing Multi-Stakeholders Framework for InternetGovernance & Economic Growth” withdiscussions led by 2014 forum chair-man, Mr. Austin Okere of ComputerWarehouse Group Plc on June 10.


Agric Business

When he talks about agriculture, he does so withpassion and facts. You might not agree with hispositions on some issues, but you will not be

disappointed at the ways he goes about marshalling his points.That person is Mr. Emmanuel Ijewere, the CEO, Best Foods.

He is involved in agriculture in terms of farming and many ofthe value chains like meat processing and horticulture.

He is also involved as the coordinator of a body calledCommittee of Agricultural Stakeholders of Nigeria (CASON),apart from being asked to help coordinate the new group setup by the Federal Ministry of Agriculture, called the AgricultureBusiness Group.

In this interview with JIMOH BABATUNDE, the man whochairs the agriculture and food security commission of theNigeria Economic Summit Group talks about the AgricTransformation Agenda, the role of the private sector and theneed to ban rice importation come next year.Excerpt.

On his assessment of the agriculture transformation agendaThe word transformation agenda was talked about not as an

agenda, but transformation. It is this government that now gavereality, gave life and form to the concept of transformationagenda. So, NESG is not taking credit for it. This governmentshould take credit for it.

Now, how is it affecting our people? It is easier for me toexplain it in a practical fashion. You will remember that therewas a time when Obasanjo being a farmer himself wanted tohelp farmers and he said let us go for area we have comparativeadvantages.

Government must ban riceimportation in 2015 — IJEWERE

He started with cassava; hewent abroad and got contractsfrom China and askedNigerians to producecassava. He meant well, butthere was something thatwent wrong with the valuechain.

First, we had not preparedthe ground for the right typeof stems that would suit it.Two, the farming system wehad always adopted hadalways been the same andtherefore there were smallholders, even the cost ofgoing to collect from theselittle farms on one acre, halfacre, two plots was soexpensive.

Thirdly, there was no centralprocessing. Fourthly, the typeof specie of cassava that wasrequired for this hugedemand was not there.

In other words, everybodywas producing cassava, butsome are different from othersfor specific purposes andfinally where were theseprocessing units to which thevarious farmers would selltheir products?

You will remember thatcassava has short lifeimmediately after harvest.The beautiful idea became anightmare. A lot of peopleplanted cassava to the extentthey had nothing else to doas the only thing they knewabout cassava was makinggarri.

And the markets were filledup with garri to the extentthese women carry the garrito the market and they couldnot sell, it was cheaper forthem to throw it away thanpay for transportation to takeit back home.

It was a disaster. It was notbecause Obasanjo didn’tmean well, it was because thevalue chain had not beencreated. Everybody should bean expert in his own field andnot create a situation where

you have to do everything. So,this Transformation Agenda isset up to address that kind ofsituation.

Let us start from the otherend. It is not just on cassavaspecifically, it is not just todaythat you are talking of supplyof chips to China, it has gonebeyond that.

The starch industry inNigeria is getting bigger,ethanol is coming on board.We are now having a situationnow where this government isdriving the composite cassavaflour bread and this samecassava will be held for somany other things.

So with that now, you arecreating a market and themarket is diversified as moreand more people are gettingto know more about this andyou are now having biggerfarms. The more big farms youhave, the more economic it isfor whoever is doing it.

You can harvest in one placeand process in that same place,

but if you have to go fromplace to place, the cost ofdoing that will be veryexpensive.

So what is really wrong wasthe fact that we did notinclude the value chain thatsaw to the need of every stageof the value chain. That isindeed the transformationagenda.

The transformation agendaalso say that agriculture orfarming is no longer aproject; the concept is nowwealth creation. It is aprofitable business, it is abusiness you must go intobecause you see it asprofitable, don’t go into it if itis not profitable. And it is true,it is very profitable and thatis why we must make sure,we handle it well and createmore wealth as over 65 percent of our people are inagriculture. If you canempower these people, youempower Nigerians.

Are challenges barring

youths from coming intoagriculture being attendedto?

Simple answer is, as attoday, no. But the situation ischanging. There are a lotmore discussion now on theyouths. This morning I had along meeting on aprogramme on how we shallengage the youths in givingthem an avenue to knowwhat agriculture is and whatthe opportunities are; thatagriculture today oragriculture business today isnot just farming. Farming isjust one of the aspects. Thereare lots of opportunities. Theenvironment which we shallpresent this to them on anongoing basis , we are alsocreating what we call a helpline, the information linewhere they can call or sendmails and we will giveinformation to them.

Nigeria is a large country,yet these things are notfalling in place, it takes time.It took us so many years offinding out which directionshould we be going, now weare beginning to get it rightand to get it really right, youmust take things stage bystage.

On the actual figure of foodimportation into the country

As for the figure, I am nottoo sure, but we have aproportionately highimportation when we cangrow ourselves. Let us takerice as example. I don’t knowabout you, but in my owndays as a young man in

school, we ate rice once in aweek. We looked forward toit. Sunday lunch was rice.

There were other familiesthat eat rice only onChristmas day, but today,everyday is Christmas, evenwe eat it twice. Situation haschanged, but unfortunately,while we had this local ricethey have not grown to meetthe increased demand for riceof Nigerians.

And unfortunately, oil hasfurther destroyed ouragricultural base; it wascheaper to go to Indonesia,Thailand, wherever to bringin rice and they ended upbeing cheaper.

Whereas those people inThailand and others havesince mechanized, they cangrow 10,000 hectares of riceand they do it automaticallyand therefore far cheaperthan what you get in Nigeria.

Worse still the quality ofNigeria rice did not improvein consonance with thedemand, but part of thetransformation agenda is tochange this concept.

But one thing I will sayemphatically, governmentmust change that philosophy,nobody should be given theimpression that we will notban rice in 2015.

We must ban it.Government must continue,no matter how inconvenientit is, it must happen. In theworst case scenario, which isnot going to happen, if wedon’t have rice we should eatmore yam or cassava.

Emmanuel Ijewere ... Obasanjo being a farmer himself wanted to help farmers

,

,

We must ban it.Government must

continue, no matter howinconvenient it is, it musthappen. In the worst case

scenario, which is notgoing to happen, if we

don’t have rice we shouldeat more yam or cassava


Tax Matters

Merger is defined as“ a n yamalgamation of

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

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

Statutory Requirementunder Companies Income TaxAct (CITA)

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

Procedure for Obtaining theService’s Approval

From the start, the mergingcompanies are required tosubmit to the FIRS, copies ofthe scheme of merger andscheme of arrangement on theconsolidation request for itsstudy and proper evaluation inorder to ensure that taxeswhich may result from thecompanies’ transactions arecorrectly assessed andcollected. Herein lies therelevance of the Service’spowers under section 29(9) (i)to require either of thecompanies directly affected byany direction which is underthe consideration of theService to guarantee or givesecurity to its satisfaction forpayment in full of all tax dueor to become due by thecompany which is selling ortransferring such asset orbusiness.

Tax Issues in Mergers andAcquisitions

,

,

Tax implication of mergers and acquisitionsA merger may result in any

of the following situations:* Formation of a new com-

pany.* Continuation of the con-

solidated business by one ofthe merging parties, in itsname or under a new name.

* Cessation of business bythe other merging parties.

In acquisition, there is onlyan acquiring company (ies)and the company beingacquired.

Emergence of a NewCompany

Rendition of AnnualReturns

Where a new companyemerges from a mergerprocess, then, the newcompany is expected to file itsreturns, in line with theprovisions of Section 55(3)(b)of CITA. The section providesthat “every new company shallfile with the Service, itsaudited accounts and returnswithin eighteen (18) monthsfrom the date of itsincorporation or not later thansix (6) months after the endof its first accounting periodas defined in section 29(3) ofthis Act, whichever is earlier”.

It should however beunderstood that a merechange of name does not makean existing business entity anew company. Suchcompanies will continue to betreated as old businesses onan on-going concern basis.

Basis of AssessmentCommencement rule as

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

(I) Where the mergingparties are connected parties,the Service may direct thatcommencement rule be setaside, in which case, the newcompany will file its returnsas an on-going concern andits assessment will bedetermined on preceding yearbasis.

(II) Where the newbusiness is a reconstitutedcompany, taking over thetrade or business formerly runby its foreign parent company.

Claim of AllowancesCompanies Income Tax Act

(CITA) did not categoricallyaddress the value at whichassets may be transferred forthe purpose of capitalallowances claims. However,International AccountingStandard 22 prescribes that inmerger accounting, the assets,liabilities and reserves mustbe recorded at their carryingbalances, implying thatmerger process does notpermit the recording of assets

at their fair value in the eventof consolidation. The newcompany will therefore not beentitled to any investmentallowance claim or initialallowance on the transferredassets; it will only be entitledto claim annual allowance onthe Tax Written Down Values(TWDV) of the transferredassets.

Unabsorbed Losses and Un-Utilized Capital AllowancesBrought Forward

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

(i) Stamp DutiesDuty payment will arise on

the share capital of the newcompany, subject to theprovisions of Section 104 ofthe Stamp Duties Act, inrelation to capital and dutyrelief.

(ii) C o n s o l i d a t e dExpenses

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

(iii) Taxation of Consolida-tion Fees:

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

4.3.1 Tax IndemnificationSection 29(9)(i) of CITA

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

4.3.2 Approval for PensionScheme

The new company will needto obtain a Joint Tax Board(JTB) approval for its staffpension scheme.

Status of a Surviving Com-pany in Relation to Taxation

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

(i) The surviving companymust file its returns in linewith the provisions of section55(3)(a) of CITA.

(ii) Commencement rulesunder section 29(3) of CITAwill not apply to the surviv-ing company, as it will be re-garded as an existing com-pany.

(iii) The surviving companywill not be allowed to claiminvestment allowance on theassets which were trans-ferred to it and will also notclaim initial allowance onsuch assets.

(iv) The surviving companymay however claim annualallowance only on the taxWritten down Values(TWDV) of the assetstransferred to it.

(v) The surviving companymay not inherit the unabsorbedlosses and capital allowancesof the merging companies, ex-cept it is proved that the newbusiness is a reconstituted com-pany.

(vi) All fees payable onmerger bids or consolidationwill be liable to VAT and WHTjust like it is applicable on theemergence of a new company.Stamp duties will be paid onthe increase in share capitaland the company will have toobtain its own staff pensionscheme approval from the JTB.

Ceased BusinessesThe merger or consolidation

exercise may also result incessation of business for anyof the merging parties. In thiscase, cessation rule asapplicable under section 29(4)of CITA will apply to any of themerging companies whichhave now ceased businesspermanently, except if any ofthe following circumstancesoccur:

(i) Where the merging com-panies are connected. Here,the Service may direct, in linewith its discretionary powers,under section 29(9) of CITAthat the cessation rule may notapply.

(ii) Where a reconstitutedcompany is formed to take overthe trade or business formerlyrun by its foreign parentcompany. (See Section 29(10)of CITA.

Capital Gains Tax Shares orCash Received

Section 32A of Capital GainsTax Act (CGTA) Cap 121LFN2004 provides that a personshall not be chargeable to taxunder the Act, in respect of anygains arising from theacquisition of the shares of acompany, either merged with,or taken over or absorbed byanother company, as a resultof which the acquiredcompany has lost its identity.However, where shareholdersare either wholly or partly paidin cash for surrendering theirshares in the ceased business,the gains arising from the cashpayment will be subject toCGT.

Effect of Taxations on Con-solidation Acquiring/Ac-quired Companies

The tax implications of con-solidation on an acquiringcompany or acquiredcompanies are similar to thoseof mergers. Acquisitionexpenses are non-deductiblewhile fees paid to professionalbodies are equally subject toWHT and VAT.

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

Taxes and Deductibility ofRelated Expenses

The newcompany willtherefore notbe entitled toanyinvestmentallowanceclaim or initialallowance onthetransferredassets; it willonly beentitled toclaim annualallowance onthe TaxWritten DownValues(TWDV) of thetransferredassets


Appointment & [email protected] 08033348923

SAFETY - From left : Alhaji Bukar Abbar Isa, Managing Director of GreenviewDevelopment Nigeria Limited (GDNL), Captain J.A. Oyewumi, Managing Director, DangotePorts Operations, Engr Abdulahi Sule, Deputy Group Managing Director of Dangote SugarRefinery Plc and Usen Udoh, Group Human Resource Officer, Dangote Group at the Safetyawareness week organized by GDNL, a subsidiary of Dangote Group

Sterling Bank promotes 386staff

In line with itscommitment torewarding excellence,

hardwork and dedication, andboosting productivity amongstaff, Sterling Bank Plc hasannounced the promotion of386 staff across all cadresfollowing the conclusion of itsfull year 2013 appraisalexercise. The Bank in astatement noted that thepromotion exercise was basedon merit using a transparentand robust performancemanagement system in linewith global practice.

Out of this, 368 staff werepromoted in the Junior and Middle Managementcadre while 18 SeniorManagement staff wereelevated.

According to the breakdownof figures made available toour correspondent by theBank, 14 Managers werepromoted to SeniorManagers, 15 from DeputyManagers to Managers, 26from Assistant Managers toDeputy Managers, while 80Banking Officers werepromoted to Senior BankingOfficers. In addition, 128Senior Executives werepromoted to Banking Officerswhile 69 staff moved from the Executive Trainee grade tothe Senior Executive grade.

In the Senior Managementcadre, two Deputy GeneralManagers, Mojisola Bakareand Mr. Adegun AdegboyegaAdelani of the CorporateBanking Groups 1 and 2respectively, were elevatedfrom Deputy General

Managers to GeneralManagers, while Mrs.Kikelomo AdefolahanKuponiyi of Retail Loans, Mrs.Isioma Ada Ubosi, RegionalBusiness Executive, LagosIsland I, Mrs. AdebimpeOlambiwonnu, Group Head,Finance & PerformanceManagement, Mrs. ObeEniola, Regional BusinessExecutive, Lagos Mainland 3and Mr. Segun Anako of theInformation Technology

Group, were elevated fromAssistant General Managersto the Deputy GeneralManager position.

The new Assistant GeneralManagers promoted from theSenior Manager level includeMr. Abiodun MuniruOladipupo, RegionalBusiness Executive, LagosMainland 5; Mr. JohnAkingbade, Group HeadTreasury & FinancialInstitutions; Mr. Richard

Oshungboye, E-Business;Mrs. Titilayo AdewonuolaOgundipe, Group Head,Customer Care and Mr.Ademola Adeyemi, RegionalBusiness Head, South West 2,

Others include Mr. LateefAliu, Channels Operations;Mr. Adekunle Adewole,Group Head, Recovery; Mr. Tsunuku Kingaba, BusinessManager, Abuja and Mr.Olabisi Ogunwoye, GroupHead, Human ResourcesManagement.

These appointments havebeen approved by the CentralBank of Nigeria (CBN), andare with immediate effect.

SAT appoints new global manager;communications

SOUTH African Tourism,SAT, has announced

the appointment of Ms RisunaMayimele as its new GlobalManager; Communications.

The appointment took effectfrom May 2, 2014.

Prior to joining SAT,Mayimele worked as aMarketing Manager forSABC3, where she headedMarketing andCommunications for thechannel which was also votedthe best TV channel in theStar Readers’ Choice Awardsunder her marketing tenure.

Her career spans over 13years, as a MarketingCommunications practitioner.

She has years of experiencein Marketing Research andStrategic Planning in theadvertising and mediaindustry.

Also, she has worked inleading global advertisingagencies in the area ofStrategic Planning, both inSouth Africa and outside thecountry, including Nigeriaand Ghana.

Prior to SABC, she workedas the Strategic PlanningDirector for the Ogilvy Ghanaoffice, where she wasinstrumental in launching theVodafone Brand to theGhanaian market. She hasalso worked in other countriesin West Africa as a MarketingCommunications consultant.Locally, some of the roles sheoccupied include; StrategicPlanning Manager atRedNail, Lead Strategist onMedia brands at DRAFT FCBwhere she played a major rolein re-positioning SABCbrands, including SABC1.

Mayimele is a BAC o m m u n i c a t i o n sManagement graduate, andholds a post-graduatediploma in strategic BrandManagement.

“South African Tourismwelcomes Ms Mayimele toher new position.

With her expertise,extensive knowledge andexperience in media, we areconfident that she is best

suited to take over thischallenging butrewarding position. Weknow she will be morethan capable ofenhancing ourorganisation’s globalc o m m u n i c a t i o nstrategy,” says MsJanine Hutton, ChiefMarketing Officer ofSAT.

“Tourism is one of themost important sectorsthat drive economicgrowth in South Africa.I am extremelymotivated to be part ofthe SA Tourism. I amjoining a strong teamthat has managed tosuccessfully positionSouth Africa positivelyon an internationalscale. I look forward tocontributing towards thegrowth of this sector andpositioning South Africaas the place to visit,”adds Mayimele.

Noel Douglas now MD WildFusionGoogle AdWords certified

partner, Wild FusionLimited has appointed NoelDouglas as its new ManagingDirector.

Noel Douglas has over 25 years’experience in the marketing andadvertising ecosystem, workingwith agencies across the globe.

Speaking on his appointment,Noel said he is “delighted to begiven the responsibility of drivingone of Africa’s leading digitalagencies forward. It is a newchapter in our world of marketing– where we are at the forefront ofnew technology – where traditionalfuses with digital and thelanguage become one. For ourclients, we will continue to pushthe boundaries of technology andcreativity to grow their brandawareness and sales, whilemaintaining high standards ofservice and brand guardianship”.

The appointment of Douglas was

sequel to Mr. AbasiamaIdaresit, the formerManaging Director, becomingChief Executive Officer, CEO,of Wild Fusion Africa,overseeing operations andproviding strategic support toWild Fusion Group.

While congratulating thenew Managing Director, hesaid: “After a rigorousselection process, NoelDouglas emerged as theoutstanding candidate to bethe Managing Director forAfrica at Wild Fusion. Hebrings a great depth ofknowledge and experience inmarketing and advertising; Iam delighted to welcome himon behalf of our African team.It is an incredibly excitingtime at Wild Fusion as welook forward to building atruly African business.”

THE Felix OhiwereiFoundation, FOF, has

appointed an eight manBoard of Trustees, BoT, to pilotits affairs. Made up ofseasoned business men,academics and corporateexecutives, the Chairman ofthe Foundation is Mr.Lawrence Agose, while theVice Chairman is Mr. FidelisAyebae. Other Trustees of theFoundation are Mr.Emmanuel Imoagene, Prof.Emmanuel Emenyonu, Engr.Greg Ojieh, Mr. Yusuf Ageni,Mr. Ohiosimuan Ohiwereiand Mr. Idode Ohiwerei, whois the General Secretary.

Addressing the Trustees atits inaugural meeting, Mr.Felix Ohiwerei expressed hishappiness with the calibre ofmembers of the Board ofTrustees.’’ I’m quite confidentthe Trustees would ensure theFoundation takes offsuccessfully and execute theagreed programmes, drawingfrom its aims and objectives’’.

Felix Ohiwereifoundationgets BoT

Noel Douglas


Aviation

Niger Republic to handle IRSplane crash investigationActing Director General

of the Nigerian CivilAviation Authority,

NCAA, Engr. BenedictAdeyileka has revealed thatthe investigations into the IRSplane crash will be handledby the civil aviation authorityof Niger Republic. He has alsotasked the management ofAZMAN Air Services Limitedto ensure safety at all timesas well as protect and makepassengers comfortableduring its flight operations.

Engr Adeyileka made thisdisclosure at the NCAAannex, Murtala MuhammedInternational Airport, Lagoswhile presenting the AirlineOperators Certificate ,AOC,to AZMAN Air. He said theinvestigation into the IRSplane crash was beinghandled by Niger Republicnoting that the AccidentInvestigation and PreventionBureau ,AIPB, and theNigerian Civil AviationAuthority, NCAA, would assistin the course of theinvestigation.

According to him “As soonas we have an update on thepilot, we will let you know.The investigation is beinghandled by the NigerRepublic because it is withintheir territory, the NCAA andthe AIPB are offeringassistance, so we have a teamtogether and we are trying tocontact them so that we canwork together but the mostimportant thing to note is thatit was not within Nigeriaterritory”

Meanwhile, Engr.Adeyileka told AZMAN Airthat safety was one of themajor factors every airlinemust adhered to. He saidgetting the AOC was not themajor challenge stressing thatthe challenge comes duringthe course of flight operations.He urged the managementof AZMAN Air to always treattheir passengers with care.

The Acting NCAA DGfurther said that theregulatory authority wouldwork with the airline as partner in order to ensure safeskies noting that if there wasa delay, AZMAN AIr shouldmanage the situation carefullyby making sure that thepassengers are well cateredfor and the reason for thedelay or cancellation adequately explained to them.He said “Having a delay orcancellation is not theproblem, it is how you manageit. If it happens ensure thatyour passengers are welltreated and if you can managethat, you are good. If there isa technical fault, delay theflight and at the same timetreat the passengers well

because it affect safety.Each time you fight with

your passengers, you putsafety at risk” He also advisedAZMAN Air to comply withall the regulations of NCAAas falling to do so wouldattract serious sanction.

Also speaking, President ofAZMAN Air ServicesLimited, Alhaji AbdulmunafYunusa said that themanagement of the airlinewas grateful to NCAA forgranting AOC to it. He alsosaid the airline would start

its flightoperation onT h u r s d a y ,15th May2014, with twoBeoing 737classic addingthat their inflight serviceswas very goodas passengerswill be treatedwith care.

By LAWANIMIKAIRU & DANIELETEGHE

Discovery Air takesdelivery ofsecond aircraft

By LAWANI MIKAIRU

Discovery Air has takendelivery of another aircraft, B737-300.

The aircraft which landed in Lagos fromEngland at the weekend brings the number ofaircrafts in its operations to two.

According to the Managing Director of theairline, Captain Abdusalami Muhammed, “theacquisition of this additional aircraft is in linewith our vision to commence operations soon inthe Nigerian aviation market.

We are excited that our dream of providingquality service to our prospective guest isbecoming a reality. We are more than ready. Weare on track. As soon as all the necessaryrequirements are met, the Airline OperatorsCertificate AOC issued, we will begin operationsWe will continue to emphasize our missionwhich is to facilitate our customer’s success byproviding a Safe, Affordable, Fast and Efficienttravel solution through excellent customerservice delivery. (S A F E).”

At the inspection of the new aircraft, the TeamLead Internal Audit and Control of FirstDeepwater Discovery Limited, Taiwo Osinloyesaid it is good to start on a good note.

Arik Air, has alerted airtravelers of new security

measures put in place atNigerian airports by theFederal Government. Theairline is therefore advisingall intending air travelers toset out early for their flightsto avoid loss of travel time.

According to GeneralManager, PublicCommunication, Arik Air, MrOla Banji “The FederalGovernment has put extrasecurity measures in place atall airports and this couldcause traffic snare on airportroads leading to unforeseendelays or missed flights fortravelers.”

“The new security measuresbeing implemented bygovernment has led to visiblepresence of more securitypersonnel across the nation’sairports.

Arik Air alertstravellers onnew securitymeasures atailrports

WORLD HYPERTENSION DAY: From left: Mr Abiola Adbul, Regional Manager; Mr OlayinkaEbenezer, Products Manager; Mr Ogheneochuko Omaruaye, Managing Director; MrsOlubunmi Omaruaye, Director of Operation and Mr Felix Anyanwu, Regional Manager, Eastall of New Heights Pharma, the official Business partner for Omron Healthcare in Nigeriaduring the media parley in Lagos to commemorate World Hypertension Day.



Advertising, Media& Marketing

Broken promisesKeep your promises. Whenever you promise to call,

do call. When you promise to come or deliver, alwaysdo so. You are building your credibility and a reputationfor reliability. The reward for both you and yourbusiness is tremendous. Those sales people who makeglib promises they don’t intend to keep will definitelyreap the outcome of a poor credibility rating.

Keeping callers on hold for too longIt is better to call back than to keep a caller on hold

for too long. That way you save the customer bothtime and money. But how long is too long? I think aminute is already too long. This is why telecomcustomer care lines are great irritants to customers. Fromexperience, to get through to customer carerepresentative on those lines, you need to wait for atleast 20 minutes. Although the customer doesn’t paycash for such calls, they do pay a lot in terms of timeand stress. By the time they get to speak to a customercare person, they are usually a little more irritable.

Asking callers to use another lineThis sucks, especially when you know the other line

does not work. We often hear,”This is a direct line.” Sowhat? Secretaries enjoy saying this, as if the telephoneline were a symbol of their authority or position in theorganisation. If you can’t reach the person the callerwants, say so politely. Take down the caller’s detailsor message and promise to pass it on.

Vilifying your competitorsYou should respect your competitors. Don’t run them

down. Present only facts and let the customer makeup their mind. Running your competitors down actuallydraws attention to them and makes you look desperateto make a sale. It is not a sin to acknowledgesomething good in the competition without diminishingthe worth of your own product.

Avoiding customersNo doubt, a lot of sales people indulge in hide-and-

seek games with customers, especially those customersperceived as “difficult” or “troublesome.” People easilyresort to customer avoidance when they have failed todeliver on their promises (see “Broken promises”above). Unfortunately, avoiding the customer not onlyirritates them but also complicates the service situationfurther. I think it’s simply escapist to avoid customers.It’s always better to face your challenges and get themresolved in a professional manner. Better still, don’tput yourself in situations that will make you run fromcustomers.

Refusing to pick callsThis is another way of avoiding customers, isn’t it? If

you are not able to pick the customer’s call (for whateverreasons), the customer has a right to expect you to returntheir calls as soon as possible. If you don’t return theircalls, then they are justified to believe you’re avoidingthem.

Letters with typographic errors or wrongly usedwords

Always read through your letters and email. If thecustomer spots mistakes in your letter or email, he maythink: if this guy is so sloppy with his letter, how am Isure he can perform? Why should I rely on him? Inthis age of e-everything, many of us are becoming alittle careless. We are also relying a lot more onspellcheckers. Unfortunately, most spellcheckers willignore your use of “site” instead of “cite”!

What are those things you don’t like as a customer?To share them on this page, send an email to:[email protected].

TO BE CONTINUED.

CONTINUED FROM LAST WEEK

Things CustomersHate – Part 3

By PRINCEWILLEKWUJURU

The Kwara Stategovernment said thet rans format ional

branding agenda embarkedupon to position the state asan investment hub in themiddle belt and Nigeria hasstarted yielding positiveresults.

The government notedthat the unveiling of thestate’s investment and re-branding logo on May 29,2012 democracy daycelebration has put the stateon the radar of investors, bothlocal and international.

Taking an overview of theperformance index of setplans to transform the state,the government of AbdulfatahAhmed, incumbent governorof the state observed that it istime to measure its micro andmacro economic performance.

How the state is able toattain this height, is to thecredit of the investment logoor sign designed andtagged: ‘’Its Good Here’’,which exposes the plans ofthe state to existing investorsand prospectives.

However, in terms, logoconnotes different meaningfor different agenda. Logosas signage system works asan instrument of information,identity and stimulation. Forinstance, Buenos Aires,Argentine undergroundsignage designed by DisenoShakespear between 1995 to2007, code named, ‘Subte’,was chosen following localsurvey and focus groupsstudies that showed a needfor a collective memory term.

The government of Kwarastate on its own carried outsurvey that pointed the wayto achieve a prospectiveeconomic and brandingagenda for the state.

Like Shakespear put it, “asign is not just a panel withimages, figure and letters.They are active expressionsof identity that go beyondgiving directions and solvingbasic circulation andcommunication problems.”

Thus, the Kwara State logowas fully integrated to itssurrounding. The result wasa multi-level informationsystem that helpedprospective investorsunderstand and identify thestate’s different agenda forlocals and internationalinvestors.

According to SBA website,the cost-per-thousand, is acommon method employed tomeasure the cost of reachinga thousand potentialconsumers, this tool workedfor the Kwara government.

Elements of the logo:The antelope, ‘Tragelaphus

Eurycerus’, (biological name), represents humility,goodness, down-to-earth andnatural beauty of the land

Kwara's branding as investmenthub yields positive results

Contributing, Dr. FemiAkorede, SSA Media andCommunication stated: “BothShared Prosperity programmeand the State Logo have downreally well with the people.People can relate to SharedProsperity and the logo slogan,“Its Good Here”. People caneasily relate to both and grasp themeaning. It is interesting to chantKwara State and hear peoplereply “Its Good Here’. Both havestreamlined how wecommunicate both our brandidentity and governmentprogrammes.”

Aside its economic growth, andsupport to agriculture, humancapital development is anotherarea the government has faredwell, even as it strengthenedhealthcare delivery through 500meter access to quality primaryhealth centres supported by acluster of secondary healthinstitutions.

Testimonies:Residents of the state have

varying views on theperformance of the stategovernment at different levels, ineducation, Mrs. M.T Ogunifa,Teacher, Gaa-Akanbi GBA SchoolB, said that the renovation of theschool has improved enrolment.

Hajia Abdul Malik Mariam,Principal, Govt. High Sch. SeniorSection said the the Info Techand Food and Nutritionlaboratories were renovated.whilst the school has beenprovided with f bore hole.

Akeem Lawal, Mechanic, FateRoad. The government isworking, we used to encounterproblem on this road duringrainy season but since thereconstruction of the road, wehave not witnessed any flooding.

Abdulfatah Ahmed

and people.Cassava represents

abundant agriculturalpotential. The Cowriesconnotes the forebearers ofenterprise and deep culturalheritage.

For the Crown on the logo,it depicts royalty and deepcultural heritage, theFlowing water is a source ofnatural goodness.

The Precious stonesrepresents abundant naturalresources, while the Shieldmeans the unyielding spiritto succeed and excel.

Blue represents flowingwater and the beautifulseasonal belts. Deep redrepresents the pride,passion, royalty and greatspirit of enterprise that hasbeen a life long heritage

Black represents being partof the African race asNigerians, while Goldrepresents the minerals andindustrial wealth, and Greenrepresents the richagricultural and potential)

And that was why Ahmedsaid in his May 29, 2012speech, “It is in line withthis quest to grow our statefor greater prosperity that weare re-branding Kwara State.This campaign and the newlogo that comes with it aredesigned to promote our stateas a top investmentdestination using ourreputation for peace, ourstrengths in agriculture,commerce, solid mineraldevelopment, tourism andstrategic infrastructure. Weintend to strongly market ourstate as a haven for lucrativedomestic and foreign directinvestment. Let me state herethis is not a mere politicalgimmick. Rather, we aresetting the foundations forthe long-term prosperity ofour great state and itspeople.”

Continuing, he had said:“As you are all aware, theprevious administrationplaced the state on a globalstage through innovativeprogrammes and policies.Today, we make history bymidwifing a new Kwara, onewhich gives us all a greatersense of pride, ownershipand participation.

,

,

It is in linewith this questto grow ourstate for greaterprosperity thatwe are re-brandingKwara State


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

Business & Economy

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. ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime ReporterRosemary Onuoha - Insurance Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNkiruka Nnorom - Capital MarketJonah Nwokpoku - E-CommerceNaomi Uzor - IndustryProvidence Obuh - Micro FinanceLAYOUT - Graphics Department

Lagos sensitises residents on non-smoking law

BY PRINCEWILLEKWUJURU

The Lagos Stategovernment has started

sensitising Lagos residentson the newly promulgatedlaw banning smoking inpublic places which takeseffect from August 17, 2014.

It recently held a one-dayadvocacy and sensitisationcampaign /s takeho ldersmeeting on the law. Inattendance, were Hon.Tobun Abioudun, HouseChairman on Environment,Hon. Yishawu Olusegun,sponsor of the non-smokingbill, Barr. Yomi Dada, aConsultant, Engr. R.A. Shabi,General Manager/CEO, LagosState Environmental

Protection Agency, LASEPAand the representative ofBritish American Tobacco ofNigeria, BATN, Mr. SolaDosumu.

Governor BabatundeFashola, who wasrepresented by Dr. YewandeAdesina, Special Adviser onHealth, at the meeting, saidthe enactment of the lawdoes not prohibit people fromsmoking, but to controltobacco smoking in publicplaces.

The governor went on to saythat it is the responsibility ofthe government in educatingand enlightening its citizenson the provisions of the law.He added that the law shouldnot be seen as an attempt bygovernment to regulate theadvertisement or sale ofcigarettes, but a simple

restriction of smoking inpublic places and not anoutright ban.

Fashola further said it isunacceptable for smokers topollute a public gatheringwith cigarette smoke withoutregard for the health orconvenience of non-smokers. He said the law hasmade necessary provisionsfor conditions under whichsmokers can indulge in theirpleasure withoutinconveniencing others.Corroborating, Engr.R.A.Shabi, General Manager/CEO, LASEPA, said thatsmokers have a right tosmoke, but that non-smokerneed not be impacted by thesmoke from cigarette, thatvulnerable groups have to beprotected. He stated thatthere are some provisions in

In last week’s article, wediscussed theadverse consequences

of a flagging naira exchangerate, and observed thathistorical evidence suggeststhat further nairadepreciation would simplydeepen poverty nationwide. However, we also noted thatavailable evidence, in fact,suggests that the nairaexchange rate has ironically,steadily dipped inverselywith vastly improved foreignreserves and extendedimports demand cover”.

Hereafter, we will provideanswers to some questionsrelating to the primary causeof a constantly depreciatingnaira despite bountiful dollarrevenue predominantlygarnered from crude oilexport.

Why have you relentlesslycampaigned for a strongernaira for over 10 years?

By 2001, I becameconcerned that despite ourrapidly increasing dollarreserves, the naira exchangerate inexplicably continuedto depreciate below theN80:$1, which existed priorto our return to democracy.

It was also ironical thatthe depreciation was despiteour relatively buoyantreserves, which wereofficially reported to provideextended imports cover thanwas possible with theexisting $4bn total reservesbetween 1996 and 2000.

What was responsible forthe weaker exchange ratedespite more bountifulreserves?

Well, it was clear that theweaker naira was not actuallythe result of dwindlingexports revenue, and it wasworrisome that the EconomicManagement Team alsoinsisted that there wassurplus naira supply in thesystem, even when the realsector, particularly the Small

Systemic surplus Naira aseconomic poisonand Medium Enterprises(SMEs) bitterly complained oflack of access to cheapfunds.

So, what causes the surplusnaira in the system, and whyis it not available to the realsector at reasonable costs?

After several months ofdiligent observation, itbecame clear that thedestabilising burden of excessnaira supply is accentuatedevery month, wheneverhundreds of billions of nairaallocations are paid into thebank accounts of the threetiers of government.

Are you saying that it iswrong to make theseallocations?

NO. It is constitutionallyappropriate to make monthlyrevenue allocations, but itwas disturbing that despitethe reality that 80% ofgovernment revenue wasdenominated in billions ofdollars from crude oil export,surprisingly, only naira valueswere ultimately distributed.

What happened to theoriginal dollar revenue?

It was clear, therefore, thatsomeone or some governmentagency had unilaterallysubstituted naira allocationsfor the distributable dollarrevenue at their ownunilaterally determinedexchange rate, (contrary tothe provisions of Section 162of the 1999 Constitution).

How does the ensuingconsolidated bloated nairaallocations affect theeconomy?

If, for example, the CBNsubstitutes a fresh supply ofN160bn as the equivalent of

$1bn revenue, such freshnaira cash inflow wouldsupport almost a ten-foldleverage in the credit capacityof commercial banks. Thus,if the mandatory cash reserveratio stood at 10%, the bankswill consequently, have anenhanced capacity to lend outabout N1600bn, instead of theactual initial deposit ofN160bn.

Is this what is generallytermed as excess liquidity?

Yes, if the banks were to takefull advantage of theirenhanced credit capacity toliberally extend loans, thiswould induce excessivedemand with so much easymoney being available forbank loans for all forms ofconsumptions.

This would lead to inflation.Wouldn’t it?

Yes, it would; as you know,too much money chasing toofew goods would lead to aninflationary spiral, whichquietly deepens poverty. Similarly, too much nairachasing rationed dollarsupply will also weaken thenaira exchange rate.

So, how does CBN react tosuch a situation?

CBN “altruistically” steps inand offers to borrow andreduce the bloated size of thecash and credit available, byoffering mouthwateringdouble-digit interest rates tocommercial banks toencourage them to part withsome of the ‘excess’ funds intheir custody.

How do the banks react tothe CBN’s strategy?

The banks are, of course,happy to lend government’s

money back to government atbetween 10 and 16% interestrates, as belatedly revealed byLamido Sanusi, last year. Thus, with such abnormallyhuge returns for what areactually sovereign risk-freeloans, it is not surprising thatthe banks show little interestin lending to aninfrastructurally-challengedreal sector.

Is CBN actually responsiblefor the high interest ratescharged by the banks?

Yes, CBN’s objective is torestrain access to the surplusfunds, so as to arrest inflation;higher interest ratesundoubtedly remains a usefuldeterrent to borrowing. Regrettably, other publicsector borrowings willinevitably also suffer theresultant oppressive cost offunds!

QUESTION: So, what does

the CBN do with the funds itmops up at such high cost?

ANSWER: Curiously,

those funds so borrowed byCBN are simply kept idle;remember that CBN’sobjective for borrowing is toreduce spending. Consequently, it will result inmisapplication (compoundednaira surplus) if the borrowedfunds are again madeavailable by the same CBN foreither public or privatespending.

You can’t be serious! No, this is no joke. Indeed,

this kind of sociallyoppressive borrowing bygovernment annuallyincreases the size of our

national debt, and it costs thenation over N300bn to servicesuch debts annually.

How does the surplus nairaaffect the exchange rate?

Well, it is a matter of supplyand demand; CBN’sunilateral substitution of nairafor dollar revenue inevitablyinduces the destabilisingburden of excess nairasupply. Consequently, withavailable naira values inmultiple fold excess of theactual amount of substituteddollar revenue, the nairaexchange rate will inevitably,consistently fall against thedollar in the money market.

So, are you saying that thenaira rate has nothing to dowith productivity and adiversified economy?

In reality, our rebased GrossDomestic Product is a clearindication of increasedproductivity; however, it isinexplicable that despite thealmost doubled GDP, the nairaexchange rate has ironicallycontinued to weaken in thelast 20 years.

Indeed, the expectation ofa diversified and inclusiveeconomy with increasing jobcreating opportunities willhardly materialize, so long asgovernment consciouslycontinues to borrow back itsown money at double-digitinterest rates, while activelypreventing access to adequate and supportive costof funds to the real sector,particularly the SMEs, whichare the growth engines in alleconomies.

Fortunately, however,allocations of dollar revenuewith “dollar certificates” isundoubtedly a potent antidoteto the economic poison ofsurplus cash in ourdevelopmental strategy. (See “The Sensible Path toEconomic Prosperity” atwww.lesleba.com)

SAVE THE NAIRA, SAVE

NIGERIANS!

the law that prescribescertain place where smokers

can smoke.

Documents

Financial 19 May 2014