n20.9bn agric fund for farmers in nigeria, 11 other nations

CMYK

JUNE 8, 2015

Nigerian small-holderfarmers and those from 11other Africa countries are to

benefit from the Global EnvironmentFacility, an innovative N20.975 billion($106.5 million) pilot programme forfostering sustainability and foodsecurity in Sub-Saharan Africa.

The twelve African dry-landcountries are Nigeria, Burkina Faso,Burundi, Ethiopia, Ghana, Malawi,Niger, Kenya, Senegal, Swaziland,

Tanzania, and Uganda.According to GEF, these dry-land

regions face the greatest threat ofenvironmental degradation in small-holder farms, and are therefore wellplaced to harness good practices forsustainability and resilience such assoil and water conservation,diversification of farmlands, andintegrated management of crops andlivestock.

GEF financing for the programmewill be driven by the priorities ofparticipating countries, primarily inthe context of baseline investments

addressing the needs of small-holderfarmers. The programme, it wasfurther learnt, will enable creation orstrengthening of institutionalframeworks to promote integrated

approaches in small holdingagriculture; promote scaling-up ofinterventions for sustainability andresilience; and ensure effectivemonitoring of ecosystem services andglobal environmental benefits throughapplication of innovative tools andpractices.

Mr. Richard Lerisien Lesiyampe,GEF council member from Kenya inendorsing GEF’s integratedprogrammatic approach said:

“The whole world must develop aframework for food security; thisworking programme is so significantit will go into the annals of the GEF.”

The Global Environment Facility

Banks shun loan proposalsfor vessel acquisition

BY GODWIN ORITSE

THE crisis presently rocking theNigerian Ship-owners

Association, (NISA) last week, took anew dimension as banks participatingin the ship acquisition scheme haveshunned and stopped processingloan applications for vesselacquisition by local ship operatorsplanning to acquire ships to boosttheir fleet.

The move by banks to stopprocessing loan applications forNigerian ship-owners is due to thefact that the banks are confused as towhat group in the now factionalisedbody, are they to deal with inprocessing loan applications. Thebanks need a corporate guarantee foreach application which theassociation is supposed to provide forits members. Disclosing thisdevelopment last week in Lagos,Secretary General of the break awayfaction of the Association, Mr. TunjiBrown said that the banks are nowvery skeptical of dealing with any ofthe groups as the banks claim theydo not know which of the factionsis the genuine umbrella body of ship-CEREMONY - From left: Funke Aiyepola, Managing Director, Union Trustees Limited; Binta Max-Gbinije, Secretary

General, Association of Corporate Trustees (ACT); Funmilayo Ekundayo, President of ACT, Abdulkadir Abbas, DeputyDirector, Securities Offering, Securities and Exchange Commission, Nigeria; and Tokunbo Ajayi, during the Association’s1st Quarter Training Programme, held at UBA House, Lagos.

Continues on page 22


N20.9bn agric fund forfarmers in Nigeria, 11other nations

BY OMOH GABRIEL,Business Editor

CMYK

22 — Vanguard, MONDAY, JUNE 8, 2015

Economy


Continued from page 21

VISIT: From left, Mr. Oze K. Oze, Head, Corporate Publications & Conferences, First Bank ofNigeria Ltd, Mrs. Bukie Oluyadi, Head, Brand Management, First Bank of Nigeria Ltd, Mrs.Folake Ani-Mumuney, Group Head, Marketing & Corporate Communications, First Bank ofNigeria Ltd, Yomi Badejo-Okusanya, Secretary-General, African Public Relations Association(APRA) and Kayode Yeku, APRA Coordinator during a Thank You visit by APRA to First BankCorporate Headquarters, Marina Lagos.

said the innovative $106.5million pilot programme forfostering sustainability andfood security in Sub-SaharanAfrica is in response to thegrowing pressure totransform African agriculturethrough intensification withhigh inputs and high yieldingvarieties that will likelyundermine sustainability ofthe natural capital.

According to the body, “Byintegrating environmentalpriorities at scale, theprogramme, entitledFostering Sustainability andResilience for Food Security inSub-Saharan Africa willenable smallholder farmers inthe dry-land regions of Sub-Saharan Africa ensure thesustainability and resilienceof production systems”.

Naoko Ishii, CEO andChairperson of GEF said:“Sustainability of the naturalcapital — land, water, soil,trees, and genetic resources— that underpin food andnutrition security, must beensured by bridging the gapbetween traditional andmodern farming practices.Smallholder agriculture,which accounts for more than70 percent of agriculturalproduction in Sub-SaharanAfrica, can benefit from aholistic approach tomanagement of naturalcapital.”

It was learnt that the totalGEF financing of $106.5million will be supplementedby $805.36 million co-financed from the

N20.9bn agric fund forfarmers in Nigeria, 11 othernations

governments, developmentagencies, foundations,international organizations,and the private sector. IFADis the lead GEF agency forthe programme, and seven

other GEF agencies — CI,FAO, IFAD, UNDP, UNEP,UNIDO, and the World Bank— will support the individualcountry projects.

owners in Nigeria.According to Brown, the

need to reconcile the variousgroups with a view to workingtogether for the common goodof the association cannot beemphasized. He blamed thePresident, Captain NiyiLabinjo for the crisis rockingthe association.

Brown refused to disclosefull details of the reason whyCaptain Labijo was beingasked to step aside. He saidthat until the matter wasresolved and the authoritiescleared Labinjo of any wrongdoing, the elected Presidentremains suspended.

Brown who spoke at apurported Annual GeneralMeeting of the associationheld at the Federal PalaceHotel in Lagos said that effortto get Labinjo to see reasonfor his suspension was futileas Labinjo is insisting that aprivate business deal withpartners should not be thebusiness of the association.

The NISA scribe said theassociation would not haveintervened in the failedbusiness deal because it wasa private business but the fact

Banks shun loan proposalsfor vessel acquisition

that the company petitionedthe association, the FederalMinistry of Transport, and theEFCC got them involved.

He also said the botcheddeal has taken its toll on NISAmembers as banks wereskeptical in doing businesswith them.

Speaking on thedevelopment, Mr. Eddy Idigoof Fidelity Bank toldVanguard that the banks arevery much concerned aboutthe crisis in the association.

Idigo said that it will not beproper to give money to agroup who cannot providecorporate guarantee for suchloan applications, adding thatthe banks are being careful asto whom to disburse moniesto.

The annual NigerianMaritime Expositionotherwise known asNIMAREX which is aninitiatitive of the Labinjo ledgroup, has also been affectedas two planning Committeesworking with separatemembers have beenconstituted.

He said: “NISA is dividedinto two and that is affecting

BY JIMOHBABATUNDE

Major foodcommodityp r i c e s

declined again in May,hitting an almost six-year lowas cereal prices fellsubstantially amid afavourable outlook for thisyear’s harvests.

The FAO Food Price Indexaveraged 166.8 points in May,down 1.4 percent from Apriland as much as 20.7 percentfrom a year earlier.

FAO has also upgraded itsMay 2015 forecast for globalproduction of wheat, coarsegrains and rice, anticipatingbigger maize harvests inChina and Mexico as well asmore abundant wheatharvests in Africa and NorthAmerica.

The Organization’s latestCereal Supply and DemandBrief released on Friday alsopredicts that global rice outputwill grow by 1.3 percent fromlast year mainly thanks toincreases across Asia.However, the forecast is stillsubject to much uncertainty,as the outcome of the seasonwill very much depend on theunfolding of the season in thenext few months.

The Food Price Index is a

FAO Food Price Index falls to itslowest value since September2009

trade-weighted index thattracks prices on internationalmarkets of five major foodcommodity groups: cereals,meat, dairy products,vegetable oils and sugar. InMay, the Index reached itslowest level since September2009.

The May decline wasdriven by a 3.8 percentmonthly drop in the cerealprice index, a 2.9 percentdrop in the dairy price indexand a one percent drop in themeat price index.

The sugar price index rose2.0 percent, due to temporarydelays in Brazil’s crushingseason despite abundantsupplies.

The vegetable oil priceindex rose 2.6 percent, partlydriven by concerns that thestrengthening of El Niñoconditions may affectproduction in Southeast Asia.

On the latest upgradedforecasts, global cerealproduction in 2015 will be2.524 billion tonnes, only onepercent below last year ’srecord. While someinventories will be drawndown, the world cereal stock-to-use ratio is projected to dipmarginally, “reinforcing theview of generally stablecereal markets”, according toFAO.

Continued from page 21 Kenya’s president haspicked an IMF adviser,

Patrick Ngugi Njoroge, as thenext central bank governor,pending approval byparliament, his spokesmansaid on Tuesday.Njoroge is an adviser to adeputy managing director atthe Washington-basedInternational Monetary Fund,has been named to lead thebank at a time when theshilling has come underheavy pressure because of theglobal strength of the dollar,falling foreign exchangerevenues and a wideningcurrent account deficit.Manoah Esipisu, the

Kenya’s president nominates IMF adviseras central bank chief

president’s spokesman, saidNjoroge’s name was beingput forward by PresidentUhuru Kenyatta for “vettingand approval” by parliament.The president had been givena shortlist of three names afterofficial interviews by thePublic Service Commission,in charge of recruitinggovernment staff.His choice is expected to beapproved by parliament, inwhich Kenyatta’s Jubileecoalition has a majority.Njoroge, who has a PhD inEconomics from YaleUniversity, would replaceNjuguna Ndung’u whoseterm ended in March.

Some financial experts haveurged the Central Bank of Nigeria (CBN) and the Securities

and Exchange Commission (SEC) to initiate friendly policiesand laws to boost the nation’s investment climate. They said inLagos that the market regulators must ensure properimplementation of policies and laws to enhance economicgrowth and development. Mazi Okechukwu Unegbu, a formerPresident, Chartered Institute of Bankers of Nigeria (CIBN),said that unfriendly policies of government agencies wereaffecting small businesses and investment in the nation’sbourse. Unegbu said that regulators should understand thepeculiarity of the country before initiating any policy, addingthat regulators had exhibited impunity in implementation ofpolicies.

Financial experts call for harmonisation ofeconomicpolicies

Vanguard, MONDAY, JUNE 8, 2015 — 23

Cover

CMYK

Continued from page 22

Former militaryPresident, GeneralIbrahim Babangida

was once quoted at a meetingwith the organized privatesector during the StructuralAdjustment Programme SAP,as saying that he did notknow why the Nigerianeconomy had not collapsed.

He was reacting to theinability of government todevelop policies andstrategies to deal with theeconomy. Over the years,successive administrationshave made futile efforts atdiversifying the Nigerianeconomy. What many ofNigerian policy-makers havefailed to take into calculationin developing their economicmodels is the huge potentialof the informal sector. Nigeriaover the years, has failed togive the sector attention andtake its potential intoconsideration in policyformulation.

The result of this neglect hasresulted in policy failures. Inother countries, the small andmedium enterprises areregarded as the engine ofeconomic growth andappropriate policy measuresare taken to grow the sector.In some of these countries, noentrepreneur can evenoperate a trade in a kioskwithout registration with theappropriate authorities. TheNigerian informal sector is sohuge and has long been leftalone. Government officialsdo not know the strength ofthe sector.

This neglect has causedpolicy failures and pain in theneck of fiscal and monetarypolicy-makers. In theinformal sector, there is a lotof money circulating in thesystem that may never get to

the banking system.N i g e r i a nbusinessmen in theinformal sector havedeveloped a uniqueAfrican bankingsystem where moneyis collected on dailybasis and given toone participant in thescheme.

Traders in mostmarkets across thecountry do this ondaily, weekly andmonthly basis. Apartfrom market places,rural dwellers havebeen known topractice thistraditional mode ofsavings for long.Workers have keyedinto this model and

•Emefiele, CBN Governor

have helped to keepsubstantial part of the moneyin circulation outside thebanking system in the handsof operators in the informalsector to the detriment ofCBN's monetary policy. Whilethe CBN targets money in thebanking system to curbperceived liquidity, it is notable to do anything about themoney outside the bankingsystem. As money iswithdrawn from banks, almostan equivalent returns throughthe back door from theinformal sector.

The need to permanentlyaddress this structuralliquidity in the economy callsfor a rethink of the nation’smonetary policy,andimproving the efficacy of theapex bank monetary policyratios. The second issue thatthe CBN is yet to find asolution to is the sharppractices in banks. At themoment there is the pressing

need to address currencysubstitution from public sectordeposit to private sector depositby banks which is assuming adangerous dimension. Nigerianbanks as it is with othersglobally, are fond of cuttingcorners. They have not focusedon core financial

intermediation but have beenmanipulating the cash reserveratio to their advantage.

Indications are that when theCBN increased the cashreserve ratio requirement ofpublic sector funds to 75 percent, banks immediately weresubstituting public sectordeposit with private deposit byreclassification of public sectordeposit as private deposit.

This behaviour of banks isseen as a product of marketand state failures that led tothe paradox of substantialgovernment deposits in banksand high governmentborrowing from the samebanks. The banks cashing onpublic sector deposit withthem, lend the same money tofederal and state governmentsthat have penchant forborrowing. CBN recordsshowed that as at June 13,2013, the three tiers ofgovernment had N2.384trillion in the various Nigerianbanks out of which about 90per cent are in zero interest-bearing Current Accounts.

For the CBN to mop up theliquidity at 14 per cent interestcost the apex bank N301.33billion which is more than theannual budgets of most statesin the country. Clearly,governments are over-borrowing from the bankswhere bulk of the money isgovernment deposit. This hasshown that governments atvarious levels in the countryare not prudent with publicfunds and are wasteful in themanagement of publicresources.

In addition, this act of bankscertainly undermines andcorrupts the public sector andmakes public resources togenerate inefficient outputsand ineffective outcomes.

Improving the market and thestate demands the correctionof the causes of distortions.CBN data shows significantchanges in the ownership andinstrument structure of thedeposits of banks in favour ofgrowth in government depositand a more efficient use offinancial instruments by thegovernment when the cashreserve ratio was retained at50 per cent.

CBN data equally showedthat between June and August2013 for which data areavailable, the FederalGovernment's naira depositwith banks rose by almost N1.5trillion. By corollary, privatedeposits declined by N1.077trillion. As a result, total publicsector naira deposit rose toN3.73 trillion in August 2013from N2.384 trillion in June2013 while private sector nairadeposits fell to N8.7 trillionfrom N9.78 trillion in the sameperiod. In addition, asignificant part of the increasein the Federal Government'snaira deposit (81%) was heldin Time Deposit in August2013.

But when it was raised to 75per cent last year, the reversewas noticed as banks wereimmediately substitutingpublic sector deposit withprivate sector. This wouldimply that the banks are alwaysa step ahead of monetarypolicy and work towardsmaking it ineffective. The CBNhas been collaborating withthe Bureau of Statistics toundertake surveys and studiesof the Nigerian economy.

So far, they have not doneany outstanding research onthe causes and failure ofmonetary policies in Nigeria.Now is the time to do so.

CBN needs out-of-the-boxthinking to control informalsector, banks

While the CBNtargets money inthe bankingsystem to curbperceivedliquidity, it isunable to doanything aboutmoney outsidethe bankingsystem

Banks shun loan proposals for vessels acquisitionNIMAREX. Banks arecalling; sponsors of the eventare calling to know what ishappening in theassociation.”

Speaking on thedevelopment, Mr.Greg Ogbeifun called on the

warring parties to shield theirsword and give peace achance to move theassociation forward. Amember of the associationwho was also in attendanceat the meeting , Mr. AyorindeAdedoyin told Vanguard that

some of the banks are membersof the association and theyhave a way of passinginformation to each other.

Adedoyin also said that thereare members who have newcontracts but the banks are notwilling to fund such contracts

as a result of the current crisis.In his reaction, President ofthe NISA, Capt Niyi Labinjosaid that the idea that banksare shunning loanapplications is the figment ofthe imagination of the breakaway group.

By JONAH NWOKPOKU

Nigeria may be in fortougher times as foreign

investors are beginning toshift their attention toEthiopia as a preferredinvestment decision.

Ethiopia topples Nigeria on foreign investment destination list in AfricaThis was indicated by the buzzat the just concluded WorldEconomic Forum on Africa, anannual summit of thecontinent’s rich and powerful,which was all about Ethiopia,where the economy isflourishing and the

government is embracing selectforeign capital.Executives from GeneralElectric Co., Dow ChemicalCo., Standard Bank Group Ltd.and MasterCard Inc. attendingthe gathering in Cape Townwere reported to have all

singled out the East Africannation as a market with strongpotential.Ethiopia was Africa’s eighth-largest recipient of foreigndirect investment last year, upfrom 14th position in 2013, areport released by accounting

firm, Ernst & Young showed.The number of projects inEthiopia surged 88 percent,the most of all countriesranked, while those in Nigeriaslumped 17 percent.“It’s got a government that ismanaging economicdevelopment in a verydeliberate, cautious manner.It’s the second-most populouscountry in Africa. It hasn’turbanized like other Africancountries, but it’s going to. It’sa very exciting place,” RossMcLean, Dow’s president forsub-Saharan Africa, told themedia in an interview lastweek.


CMYK

Business & Economy

CONFERENCE - From right: National President, Nigerian Association of Chambers ofCommerce, Industry, Mines and Agriculture (NACCIMA), Chief Bassey Edem; Cross RiverState Deputy Governor, Prof. Ivara Esu; Permanent Secretary, Federal Ministry of Mines andSteel Development (Rep of President Muhammadu Buhari), Alhaji Baba Umar Farouk and 1stDeputy National President of NACCIMA, Iyalode Alaba Lawson at the association's 55th AnnualConference held in Calabar, Cross River State.

good, not political.He decried high

unemployment and lowcontribution of themanufacturing sector to thegrowth of the economy sayingthere is need to take non-oilsector more seriously.

“UNIDO is worried aboutsome pressing issues such asmassive unemployment andthe low contribution ofmanufacturing to the growth ofthe economy.

"Former President GoodluckJonathan launched NIRP inFebruary as a roadmap toindustrial revolution andpromotion of localmanufacturing."

Ezedinma asserted that theworkshop is the first formaltraining under the UNIDOimplemented programme,which objective is to developthe capabilities in the NIRPimplementation teams to beable to distinguish between the profitability of an industrial project for the investor and thebenefits of the same project canhave on the economy.

Furthermore, he averredthat the trainees numberingabout 60 from differentinstitutions across the nation,would learn the skills tomeasure and assess both theprivate and social costs andbenefits of investmentprojects.

“This is an importantcapability for the NIRP teamsto acquire because the processof implementing the NIRP isone in which decisions need tobe made about how to selectand promote industrialprojects.”

In an interview withVanguard, Engr. OmotanwaAwobokun of the FederalMinistry of Industry, Trade andInvestment said NIRP wasproactively designed to salvageNigeria’s economy from itsmonolithic trend.

The NIRP, Awobokun said, isa game changer for Nigeria tofurther deepen the promotionof diversification througheffective exploitation ofresources where the countryhas competitive andcomparative advantage.

She added that the NIRP wastagged the most ambitious andc o m p r e h e n s i v eindustrialisation programmebecause it is based on the areaswhere Nigeria has competitiveand comparative advantagesuch as automotive, garment,among others.

Those sub-sectors, shenoted, have been identified asareas where Nigeria can benumber one in Africa and top10 globally.

UNIDO calls on new administrationto sustain NIRPBy FAVOUR NNABUGWU

The United NationsI n d u s t r i a l

Development Organisation(UNIDO) has called on thenew administration of PresidentMuhammadu Buhari to intensify efforts at sustaining the Nigerian IndustrialRevolution Plan (NIRP).

Officer-In-Charge of UNIDOin Nigeria, Mr ChimaEzedinma at the openingceremony of the workshop on

‘NIRP Managers CapacityBuilding Programme onInvestment Project Appraisal’, said that the NIRP, being oneof the fruits of the partnershipbetween UNIDO and Nigeria,should be sustained in spite ofthe change in leadership.

Ezedinma affirmed thatUNIDO has been partneringwith the Nigerian Government,especially in the area ofindustrialisation.

“It is not a plan that shouldbe phased out or abandoned inthe face of a change in

government because industrialrevolution is for economic

There is a call on government to applya renewed focus to strike a fiscal

balance and sustainability in order to reducethe cost of delivery. In the same fold,governments should boost agility of publicsector organisations to cope with changesin the future. These were just two findingsfrom the PricewaterhouseCooper (PwC)18th Annual Global CEO Survey. Therewere 1322 responses from business leadersin 77 countries worldwide being added tovaluable insights from 50 governments’representatives and state-backed CEOs.

Kalani Rampai, leader of local governmentat PwC Southern Africa, said it has becomemore important than ever for governmentto be affordable especially in light ofrecurrent budget cuts to reduce fiscal deficitsin many countries.

“This means doing better for less - meetingrising expectations by doing thingsdifferently to deliver services moreeffectively and efficiently and prioritising the public services that matter most tocitizens, as well as to business,” saidRampai. At the top of the CEO’s wish listfor governments’ attention was: aninternationally competitive and efficient taxsystem, a skilled and adaptable andworkforce and adequate physicalinfrastructure. A notable 78 per cent ofSouth African CEO’s feel that it’s thegovernment’s responsibility to create a

CEOs concerned over fiscal deficitsskilled workforce.

Following this survey, PwC’s public sectorreleased a report titled, ‘Government & theGlobal CEO: Delivering outcomes, creatingvalue’, which calls for government andpublic sectors to respond in five key ways.

Firstly, deal with fiscal deficits and makegovernment affordable. Seventy-two per centof CEO’s surveyed are “somewhat” or“extremely” concerned about this threat.

Secondly, rise to the digital challenges.With affordable government facilitiestackling the new reality, digital technologyhas the potential to be a key enabler, offeringthe scope to deliver higher productivity andbetter outcomes while also reducing costs.

Thirdly, invest in growth.“This requires public leadership to facilitate

a more demand-driven skills system,meeting employer needs, as well asdeveloping a workforce comprising peoplefrom different backgrounds who areadaptable and able to think and work indiverse ways,” said Rampai. Fourthly tocollaborate with business to deliver societaloutcomes and lastly,

to tackle the burden of regulation and tax.“There is an important agenda for publicleaders to deliver on all these five areas.Delivering on business priorities, alongsidesocietal outcomes, requires real leadershipand trust between citizens and the state foreach to do the right thing.”

26 ships ladenwith petrol,diesel, food items,expected in Lagos

Twenty-six ships ladenwith petroleum

products, food items and othercommodities are expected toarrive at Lagos ports fromJune 3 to June 20. This iscontained in a publication,Daily Shipping Position ,made available by theNigerian Ports Authority(NPA) to newsmen onWednesday in Lagos.

The document noted that theexpected ships containedpetrol, kerosene, diesel,containers, general cargo,fish, bulk gypsum and bulkwheat. It said that 11 otherships laden with petrol,diesel, base oil, bulk rice andfresh fish had arrived at theports, awaiting discharge oftheir contents. Thepublication stated that 26other ships containing petrol,diesel, bulk gas, aviation fuel,rice, crude palm oil, bulkwheat were discharging at theports. Other ships in the portsare discharging generalcargo, trucks, etc.

S.Africa’s Libertylooking foracquisitions in NigeriaLiberty Holdings, South

Africa’s fourth largestinsurer, is looking atacquisitions in Nigeria toestablish a strong regionalpresence in West Africa, itschief executive said.

The Johannesburg-basedfirm, which is majority ownedby Africa’s biggest lenderStandard Bank, has an assetmanagement outfit in Ghanaand a regional healthinsurance business in Nigeriabut seeks to expand itsfootprint, CEO Thabo Dlotisaid.

“Clearly the big area wherewe are looking to establishourselves is Nigeria, both ininsurance and assetmanagement,” Dloti toldReuters on the sidelines of theWorld Economic Forum Africain Cape Town.

“It’s a journey we’vetravelled for the last year orso, looking for the rightopportunity and finding theright partner.” Libertyreported a 3 percent declinein full-year profit in February,reflecting a contraction inearnings from its shareholderinvestment portfolio.

In all, Liberty has apresence in 16 countries inAfrica. It has around 650billion rand ($53 billion) ofassets under management.

NIRP wasproactivelydesigned tosalvage Nigeria’seconomy from itsmonolithic trend


Interview

What is the portal all about?Adplus Software Company

Limited is a subsidiary of HIITand we have Adplus360 portalto which Vanguard has signedon. We recently trainedVanguard freelance advertagents on how to use the portaland we are happy withVanguard. The Adplus360portal enables all advertisersusing IT via the internet toadvertise in media houses thathave signed up on Adplusportal. The adverts are prepaidand that’s crucial for mediahouses because of credit issue.As it is, we have trained allother relevant staff ofVanguard. Right now,Vanguard is running live onAdplus360. We have madeseveral commercial adverts onbanks through Adplus360. Thefreelancers are relevantbecause they are like agents toAdplus, meaning that inaddition to using Adplus toadvertise in Vanguard, theycan equally advertise in othernewspapers without going totheir offices. It is not limited tofreelancers alone, we havegraduates who wish to dosame. All they need do is go towww.adplus.ng/adp to registerand they will become membersafter meeting therequirements. Then they canstart operating despite the factthat they are not freelancers oragents to any newspaper.

How long have you been inoperation?

Vanguard signed on late lastyear and we startedcommercially two months ago.Adplus360 is our owninnovation and we own thepatent. We have invested a lotof time and resources over thelast six months, waiting for theenvironment to be right. It’s anICT product and before now,people were not verycomfortable with doing thingsonline and payment solutionswere not as friendly as they aretoday. So we had to wait for thebuy-in of the society to attainthe level it is right now. So,people are getting comfortablewith digital ways of doingthings.

What challenges relating toadvertising are you trying toaddress?

Adplus360 willAdplus360 willAdplus360 willAdplus360 willAdplus360 willbenefbenefbenefbenefbenefit adverit adverit adverit adverit advertttttagents moreagents moreagents moreagents moreagents more– Shobajo

Mr. KayodeShobajo is theChief Executive

Officer/Chief Technopreneurof Adplus SoftwareCompany Limited, asubsidiary of HIIT Plc. In thischat with Financial Vanguard,he talks about Adplus360, anonline advert placementportal and how advert agentsstand to benefit from theportal. Excerpts

BY EBELE ORAKPOAND ROSEMARYONUOHA

Before Adplus360 came onboard, whoever wanted toadvertise will have to call theAdvert department of anymedia house, follow throughwith the people and look forhow to pay. The client couldpossibly visit the office and allthe physical movementassociated with advertising ina media house. But as it isnow, from your computerthrough Adplus360 portal,you can do all that. In as littleas three to five minutes, youare done with your advert, paythe media house and theyhave accepted your advert asgood to go. As soon as themedia house accepts that theadvert is good to go, themoney moves to the mediahouse and that’s why it’sprepayment. Otherwise if theyowe me and I am sendingadvert to Vanguard, evenVanguard will not like it. Whatwill be Vanguard’s gain? Sonow, without knowingVanguard’s Advert managerfor instance, I can go to

Adplus360 portal and send myadvert from there. Let’s saythat I am in Abuja or outsidethe country, and I go to Adplusportal to advertise and followthe process, in maximum offive minutes, I am done andVanguard has its money. Letme give a simple scenario ofthe convenience thatAdplus360 provides forpeople. For instance, if I wantto do a change of name as awoman, I don’t have to callanybody. I will just go toAdsplus360, follow theprocess and it is done. I don’teven have to become anAdpluspreneur, which meansan agent of Adplus360. So theproblem we have solved is theclumsiness that wasassociated with the physicalflow of things in advertisingand people that want to putpublic notices in the papersgetting to the media houses.Adplus360 serves allcategories such as self- serviceusers, our own agents whomwe call Adpluspreneurs and

advert agencies includingmedia houses. They can usethe convenience of Adplus360to get to media houses thathave signed up withAdplus360. But right now, thesignificant media house thathas signed up is Vanguardwhich is why we are bondingwith Vanguard to say ‘Takeadvantage of this opportunitybefore others sign up.’Vanguard has an advantagein Adplus360. All over thecountry and beyond, anybodythat has access to the internetcan go to www.adplus.ng andadvertise in the paper.Vanguard by this very act, hasoffices anywhere there isinternet access so the papercan advertise that it has officesall over the world now becauseinternet is global andintensive. You may not be ableto imagine the quantum ofcommercial activitiesVanguard is going to havewhen that information goespublic. Vanguard has nowtaken ownership. However,people are still looking andsaying, ‘Adplus360, what willit do? Will it take our jobs? Andso on.’ That is why we had tocome and encourage thefreelancers. We told them thatit’s a change which time hascome and they must justbecome part of it intelligentlyas against sitting on the walland watching before othermedia houses sign up. Wehave limited number oftargets, it is not as if it is openended and everybody canbecome an agent of Adplus360at anytime. We have a ceilingbecause we want it to berewarding to those who joinedfirst. We want them to knowthat they cannot wake up fromtheir slumber at anytime andjust join saying that after all,there are no closing barriers.

How are adverts censoredagainst libelous materials?

Adplus360 does not takeaway the duty of Vanguardfrom Vanguard. Vanguardstill accepts all its adverts. Theway the technology is

designed is this, when I placemy advert, the advert manageror the assistant gets an alertthat somebody has placed anadvert. They go to the portalthemselves, either on theirsmart phones or their desktop,open and accept it. Theadvertiser then gets thefeedback and alert that theadvert has been accepted. SoVanguard’s job is to check thatit conforms to its requirement.If it is an advert that needscertification, the person mustequally upload such certificatewhich the advert manager orwhoever is delegated to checkand confirm that it is certified.So it is the job of Vanguard toaccept. What the portal doesis to process. If Vanguard doesnot accept, there is option toreject. So when you reject, youhave to reject with a commentbecause if the advert gets backto me and there is no comment,I will think that it is a mistake.Until Vanguard accepts, themoney will not digitally switchto Vanguard because they havenot transacted any business. Incases where adverts or publicnotices could be libelous,Vanguard can allow us toactivate her lawyer’s numberin an email in a manner thathe can open it and clear beforeadvert people accept but thatis subject to Vanguard policy.What they are doing right nowis that they download it,consult the lawyer for hisopinion before accepting it. Wehave a functionality to even letthe lawyer see it first. If apublic notice is of this nature,the first person that clears itwill be the lawyer and then theadvert manager does thegeneral check.

Won’t Adplus360 take awaybusiness from advert agents?

Let’s understand the flow foradverts. There are threechannels. Channel one is as aself- service, just like I ampaying for my DSTV. I just goto a DSTV website and pulldown the bouquet I want andoff I go. But DSTV too still hasagents and offices where I cango and pay if I choose. Nowthe freelancers are relevant toour second channel which isthe window we opened foragents. Instead of makingthem lose their jobs, we areexpanding their opportunitiesbecause they don’t need to beagents or freelancers ofVanguard alone, they can bethat of other newspapers whenthe media houses sign up. Theadvantage is that they don’thave to be coming toVanguard office everydaybecause once you get the job,you log into the portal andprocess it and you pay themoney upfront. And Vanguardgets her money and you getyours. Some of the concerns ofadvert agents are aboutinstances where advert clientswon’t pay upfront.

Theadvertiserthen gets thefeedback andalert that theadvert hasbeenaccepted. SoVanguard’sjob is to checkthat itconforms toitsrequirement

•Kayode Shobajo

Adplus360 willAdplus360 willAdplus360 willAdplus360 willAdplus360 willbenefbenefbenefbenefbenefit adverit adverit adverit adverit advertttttagents moreagents moreagents moreagents moreagents more– Shobajo


Banking & Finance

By YINKA KOLAWOLE

When Mr. GodwinE m e f i e l ebecame the

Governor of the Central Bankof Nigeria (CBN) on June 3,2014, there was visiblepressure on the Naira as wellas a decline in the country’sforeign reserves.

Vision

On assumption of office,Emefiele unveiled

his vision for the Nigerianfinancial sector. Thisinclude: Pursuing gradualreduction in key interestrates, and includeunemployment rate inmonetary policy decisions;maintain exchange ratestability and aggressivelyshore up foreign exchangereserves; and buildingsector-specific expertise inbanking supervision toreflect loan concentration ofthe banking industry. Othersare: Abolishing feesassociated with limits ondeposits and reconsiderongoing practice in which allfees associated with limits onwithdrawals accrue to banksalone; introducing a broadspectrum of financialinstruments to boost specificenterprise areas inagriculture, manufacturing,health, and oil and gas.

Achievements

In spite of the challenges,chief of which has

been the fall in the globalprice of crude oil, Emefieleand his team at the CBN,within the past 12 months,have recorded notablemilestones.

Financial System Stability:Within the past one year,CBN has regulatedoperations of Bureaux deChange (BDCs) to checkrent-seeking amongoperators, depletion of thenation’s foreign reserves,unauthorized financialtransactions, and dollarizingthe economy, among others.For instance, out of 130BDCs sampled based onvolume of purchase frombanks, as at the time of thereforms, the Bank found 121BDCs, representing 93percent, to be in breach ofthe objectives and provisionsof its guidelines.

Bank Supervision:

Towards achieving themandate of ensuring

safety and soundness of thefinancial system, CBNconducted a Risk-Basedexamination of all banks withHigh and Above AverageComposite Risk Rating inJune 2014 and those withModerate and LowComposite Risk Rating in

CBN haswithin theperiodfacilitated therefund of morethan N4.01billion to bankcustomersbased oncomplaintsresolved

Godwin Emefiele, CBN Governor

Emefiele, one year in the CBN saddleSeptember 2014. It alsocarried out the ForeignExchange Examination of allbanks in September 2014 aswell as the routineexamination of all discounthouses and financial holdingcompanies in October 2014.In January 2015, it carried outthe Risk Asset Examination of24 banks as at December 31,2014. Within the period, CBNcommenced theimplementation of the BASELII Accord aimed at promotingfinancial system stability byensuring that banks areadequately capitalized andhave enhanced riskmanagement systems.

Consumer Protection:

The bank has within theperiod facilitated the

refund of more than N4.01billion to bank customersbased on complaints resolvedand directives communicatedto them following theConsumer ComplianceExaminations and a spot-check conducted on thebanks. It concluded fulldeployment of the ConsumerComplaint ManagementSystem (CCMS) with themigration of all banks to thelive platform of the system.

Other FinancialInstitutions:

The reform of the BDCsegment of the

Foreign Exchange Marketwas concluded on 31st July,2014, resulting in 2,501 BDCswith caution deposits andcapital base of N35 millioneach. The bank issued a finallicence to the NationalMortgage and Re-financingCompany (NMRC) tocommence operation in 2015under the Housing FundProgramme (NHFP). Itcarried out further reforms ofPrimary Mortgage Banks(PMBs), with 32 PMBs fullycapitalized as at June 30,2014 while 10 were in thecategory given up toDecember 31, 2014. Licencesof 21 PMBs which failed torecapitalize or had remainedtechnically insolvent wererevoked. It also partneredwith the Federal Governmentand Development Partners tomidwife the DevelopmentBank of Nigeria that isenvisaged to address thepaucity of low interest andlong-term funding forMSMEs in Nigeria.

Development Financing

In his maiden remarks, theCBN Governor

pledged to reposition the

introduced to complement theexisting ones include: N300billion Real Sector SupportFund (RSSF) established tohelp unlock the potential ofthe real sector to engenderoutput growth, value addedproductivity and job creation.N152 billion has beenapproved for five projectsunder RSSF; N213 billionNigerian Electricity MarketStabilisation Facility(NEMSF) aimed at settlingcertain outstanding debts inthe Nigerian ElectricitySupply Industry (NESI).N56.68 billion has beendisbursed to five generatingand five distributioncompanies under the scheme.Under existing schemes andintervention programmes, theCommercial AgriculturalCredit Scheme (CACS)guidelines were reviewed toenable DMBs assess the fundat 2 percent from CBN andlend at an all-inclusiveinterest rate of 9 percent witha spread of 7 percent.Expiration of the scheme hasbeen extended from 2016 to2025. Also, disbursement offunds under the Micro, Smalland Medium EnterprisesDevelopment Fund(MSMEDF was formallyflagged-off in 2014. N43.57billion has so far beendisbursed, with 61.6 percent

of beneficiaries beingwomen, while N30.31 millionhas been accessed by 292People Living withDisabilities (PLWD)

Banking and PaymentsSystem

In conjunction with theoffice of the

Accountant General of theFederation (OAGF), e-collection element of theTreasury Single Account(TSA) took off on March 1,2015. This ensures real timeremittance of governmentreceipts directly into theConsolidated Revenue FundAccount (CRF) to enthronetransparency andaccountability inmanagement of governmentreceivables, and promoteseffective monetary policy andreduces cost of liquiditymanagement borne by thebank. Removal of charges oncash deposits was alsointroduced to encourage flowof deposits to DMBs.

Reserve Management

Following the sharpdecline in global oil

prices and the resultant fallin the country ’s foreignexchange earnings, there wasa widening margin betweenthe rates in the interbank andthe rDAS window, thusengendering undesirablepractices including round-tripping, speculativedemand, rent-seeking,spurious demand, andinefficient use of scarceforeign exchange resourcesby economic agents. CBNclosed the rDAS/wDASforeign exchange window atthe bank in order to checkfurther pressure on thecountry’s foreign exchange,avert the emergence of amultiple exchange rateregime and preserve thecountry’s foreign exchangereserves.

Looking Ahead

A summary of Emefiele’sperformance in the

past one year indicates thathe and his team haveensured stability in thesector, in spite of global anddomestic challenges. Analystsagree that the bank under hiswatch is on the right track toguaranteeing the soundnessand stability of the Nigerianfinancial system. Goingforward, it is hoped that,working closely with thefiscal authorities, CBN underEmefiele will continue toachieve its mandate.

developmental financinginitiatives of the bank. Newschemes and interventions


Corporate Finance

Stories byPETER EGWUATU

Unilever OverseasHoldings B.V. hasindicated interest in

increasing its equity stake inUnilever Nigeria Plc from50.04 per cent up to amaximum of 75 per cent andhas made a tender offer toindividual shareholders ofUnilever Nigeria.Vanguard gathered that theoffer initially scheduled toclose June 10, 2015 has beenextended to June 25, 2015 toenable more shareholderstake effective decision thatwould see the companyexpands its operations.Under the terms of the offer,it was gathered that Unilever Overseas is seekingto acquire up to 942,215,930shares in the company at ¦45.50 per share in cash (the“offer price”). “This is not amandatory takeover bid asshareholders who are willingto sell can voluntarily do so”Unilever noted.The offer price represents apremium of 33.8 per cent tothe company’s closing shareprice on 23 March 2015, theday prior to UnileverOverseas announcing itsintention to make the Offer,and a premium of 33.2 per centto the 3 month VolumeWeighted Average share priceas at the same date. The totalvalue of the transaction at theintended Offer Price isapproximately ¦ 42.871 billion(€192.6 million at prevailingexchange rates).

Regulatory and AdvisersapprovalsThe Directors of UnileverNigeria, who have beenadvised by FBN CapitalLimited, consider the terms ofthe Offer to be fair andreasonable from a financialpoint of view, to the othershareholders of UnileverNigeria Plc.The offer was approved by theSecurities and ExchangeCommission and the NigerianStock Exchange and is subjectto the conditions and otherterms set out in theannouncement and to the fullterms and conditions whichwas set out in the formal Offerdocument. Citigroup GlobalMarkets Limited and ChapelHill Advisory Partners Limitedare acting as financial advisersto Unilever Overseas. Theproposed move will seeUnilever Overseas up itsequity stake in the Nigeriabusiness from 50.04 per centup to a maximum of 75 percent, with the aim to continue

Unilever set to raise equity stake as offerextends to June 25

This is not amandatorytakeover bida sshareholderswho arewilling tosell canvoluntarilydo so

MD, Unilever Nigeria, Mr. Yaw Nsarkoh,

to maintain the company’slisting on the Nigerian StockExchange as well. If acceptedat the maximum level, thevalue of the deal could reach€200 million (based onprevailing foreign exchangerates).Bruno Witvoet, Executive VicePresident of Unilever Africasaid: “This Proposaldemonstrates our commitmentto the Unilever Nigeriabusiness and confidence inthe long-term growthprospects of the company andconsumer goods sector inNigeria.”Meanwhile, ass the closingdate of the offer draws nearer,market analysts are of theview that Nigerianshareholders are likely to partwith some volume of theirshares to benefit from the offerand take advantage of theliquidity opportunity itportends to them. Analystshave also said that the Offerwould provide shareholderswho wish to sell some or all oftheir shares in UnileverNigeria the opportunity to doso.Unilever is one of the world’sleading manufacturers ofFood, Home and PersonalCare products with sales inover 190 countries. Unileverproducts are present in 7 outof 10 homes globally and areused by over 2 billion peopleon a daily basis. Unileveremploys 171,000 peoplearound the world andgenerate annual sales of over€50 billion. Over half of thecompany’s footprints are inthe fast growing developingand emerging markets (56% in2011). Company’s portfolioincludes some of the world’sbest known brands such asKnorr, Persil , Dove,Hellmann’s, TRESemmé,Lipton, Sure, Wall’s and Lynx.

Unilever has stated that itwill grow its business inNigeria and continue its longterm commitment in Africanmarkets. Unilever Overseashas no intention of delistingfrom the Nigerian StockExchange.

Financial performanceboth full year and firstquarterUnilever Nigeria reported 21percent decline in first quarter(Q1) 2015 Profit Before Tax(PBT) to N864.742 millionfrom N1.089 billion in Q1,2014. Also, Profit After Tax(PAT) declined by 21 percentto N590.448 million fromN750.629 million in thecorresponding quarter of 2014.“The sales growth is the firsttime in five quartersUnilever’s topline has shownany meaningful growth. Webelieve unit volume growthwas the principal driver for

the topline as prices havebeen kept relatively flattishyear-on-year (y/y),”Olajumoke Okeowo andUwadiae Osadiaye, bothanalysts at Lagos-based FBNCapital Limited, said in theirfirst reaction to UnileverNigeria Q1’15 numbers.According to the Analysts“Unabated insecuritychallenges in the North andincreased competition in thecalmer southern marketsmean that consumer goodcompanies cannot readilypass on higher costs toconsumers for fear of loss ofmarket share. However, weawait management’scomments on this.”

S h a r e h o l d e r sendorsement ofdividendMeanwhile, shareholders ofUnilever Nigeria recentlyunanimously approved the 10kobo dividend per shareproposed by its Board ofDirectors, even as they lamentover high cost of borrowingfrom the banks. Theshareholders at the 90thAnnual General Meeting,AGM approved a total payoutof N378.3 million dividend forthe financial year endedDecember 31, 2014. Speakingat the AGM, shareholderscommended the company fordeclaring divided, even asthey seek for higher dividendsin the next financial year.According to them “We reallypity the manufacturingindustry for the turbulentbusiness environment theyoperate upon. Nevertheless,we advise the Board to reducethe high cost of carrying outits business. Expenses likemarketing, administrative etcshould be reduced. We are nothappy that the company isspending so much servicingloans from the banks. Insteadof borrowing from banks athigh interest rate the companycan seek fresh funds from theexisting shareholders.” In hisremarks at the meeting,Managing Director, UnileverNigeria Plc, Mr. YawNsarkoh said “We reallyappreciate the contribution ofthe shareholders and aredoing everything possible toreduce cost. It is evident thatthe business environment willbe more daunting in 2015, butwe will remain focused on ourpriorities to satisfy ourconsumers. We are committedto stay and invest in Nigeria.Our ambition is to continue todeliver value to all ourstakeholders and positivelyaffect our communities byleveraging on the UnileverSustainable Living Plan.”

The Securities andExchange Commission,

SEC has approved therevision of the minimum price(Price floor) for any givenstock traded on the floor ofthe Nigerian Stock Exchange,NSE.Vanguard, gathered that thecommission has on 2 June2015, approved the Par ValueRule submitted to it by theNational Council of TheNigerian Stock Exchange(NSE) on 5 March 2015.This is sequel to the draftRule submitted (forstakeholders’ comment) bythe Rules and AdjudicationCommittee of Council of theNSE on 21 October 2014.The Rule states that“notwithstanding its parvalue, the price of every sharelisted on the exchange shallbe determined by the market,save that no share shall tradebelow a price floor of oneKobo per unit (N0.01)”.

SEC approves parvalue rule for stockto trade at 1 kobo

Ecobank RapidTransfer declared‘Best RemittanceProduct' in Africa

BY JONAH NWOKPOKU

Ecobank Rapid Transferhas been named the

winner of the Best RemittanceProduct in Africa at The AsianBanker’s 2nd Annual MiddleEast and Africa Awards heldat the Ritz Carlton, DIFC,Dubai, United Arab Emirates(UAE).

The Asian Banker providesinformation for the financialservices industry in the formof publications, onlinematerials such as e-newsletters, research, andconventions, and otherindustry gatherings. It isregarded as one of the Asianregion’s leadingconsultancies in financialservices research,benchmarking andintelligence. KingsleyUmadia, Executive Director,South South/South East,Ecobank Nigeria, said theaward was well deserved, asEcobank has taken remittancebusiness to higher level on thecontinent. “As a Bank, We areproud to offer the best inremittance product on thecontinent. We will continue tostrive to remain the best andsurpass customers’expectations at all times.”Heexplained that the RapidTransfer, one of Ecobank’sRemittance products hasachieved tremendous success.


CMYK

Corporate Finance

By JONAH NWOKPOKU

Fidelity Bank pledges commitmentto efficient trade transactions

The value ofgovernment’s tradedbonds at the secondary

market on the Nigerian StockExchange, NSE declined by60.2 per cent, indicating lowerpatronage when compared tothe equity transactions.Specifically, a total of 14,817units of Federal GovernmentBonds valued at N17.586million were traded last weekin 5 deals compared with atotal of 64,465 units of Federaland State Government Bondsvalued at N69.372 milliontraded in 7 deals penultimateweek.The NSE All-Share Index andmarket capitalizationdepreciated by 1.88 per cent and 1.44 per cent to close lastFriday at 33,664.91 pointsand N11.491 trillionrespectively.Similarly, four indicesfinished lower during theweek under review, whileNSE Consumer Goods, NSELotus II, NSE IndustrialGoods Indices closed higherby 0.08 per cent , 0.37 percent , and 0.16 per cent

Value of govt bonds drops by 60.2%By PETER EGWUATU

AGM - From left: Director, PropertygateDevelopment and Investment Plc, Mr. WoleOgungbola; Managing Director and ChiefExecutive Officer, Mr. Adetokunbo Ajayiand Company Secretary, Mrs. TosinAarinola, during the company’s 6thAnnual General Meeting in Lagos

Lafarge Africa Plc has been awarded the Best ComplyingCompany of the Year 2014 bythe Corporate AffairsCommission.. The award, whichhas to do with the extensivecompliance requirements of theCompanies and Allied mattersAct and industry regulations bythe commission, and is inrecognition of the company’scommitment to operating withthe highest ethical standards onconsistent basis was presented atthe Commission’s annualcorporate citizens’ award heldin Abuja recently.According to the Chairman,CAC Board of Directors, Mr.Funso Lawal, the rationale forthe award is to recognizeperformance and rewardcorporate excellence amongcompanies operating inNigeria, with the ultimate goalof improving the country’srating in the globalcompetitiveness index.To beeligible for consideration,companies must have compliedwith the requirements of theCompanies and Allied MattersAct and respective industrystatutes and regulations. Inaddition, the companies mustimpact on their respectiveindustries positively throughcredible performance incorporate socialresponsibility.

Lafarge Africa winsCAC complianceaward

respectively. However, theNSE ASeM index closed flat.A turnover of 1.221 billionshares worth N16.964 billionin 19,847 deals were traded last week by investors on thefloor of the exchange incontrast to a total of 1.799billion shares valued atN22.105 billion thatexchanged handspenultimate week in 17,337deals.The Financial ServicesIndustry (measured by

volume) led the activity chartwith 935.233 million sharesvalued at N9.258 billiontraded in 11,066 deals; thuscontributing 76.58 per centand 54.58 per cent to the totalequity turnover volume andvalue respectively. TheConsumer Goods Industryfollowed with a turnover of77.298 million shares worthN5.048 billion in 3,144 deals.The third place was occupiedby the ConglomeratesIndustry with 47.348 million

shares worth N228.761million in 1,182 deals.Trading in the Top ThreeEquities namely – ZenithInternational Bank Plc,Diamond Bank Plc andUnited Bank for Africa Plc.,(measured by volume)accounted for 357.004 millionshares worth N4.033 billionin 3,021 deals, contributing29.23% and 23.77 per cent tothe total equity turnovervolume and valuerespectively.

Managing Director/ChiefExecutive Officer, Fidelity

Bank Plc, Nnamdi Okonkwo, hasreiterated the bank’s commitmentto efficient processing of tradetransactions.He made the pledge during thepresentation of the 2014 StraightThrough Processing, STP awardto the bank by Deutsche Bank,where the bank emerged thesecond runner up in the STPcategory.Commenting on the award, hesaid: “This is an award forefficient processing oftransactions. It is just a testamentof the improvement fidelity bankhas been making concerning howwe process our tradetransactions. This is the fifth timethat we will be coming up herefor this award and we are verypleased that each year we getnominated and we either win orcome second. We will continueto do even better to delight ourcustomers. We have won it a fewtimes and next year we believewe will again. What this means

to us is that somebody isrecognising the efficiency in ourprocessing of trade transactionsin Fidelity bank. “Also speaking, ExecutiveDirector, Shared Services,Fidelity Bank, UgochukwuChijioke said: “We are veryhappy to feature in this editionof the award. It means a greatdeal to us at Fidelity bank. Towork hard and do well is onething but to be internationallyrecognised is a different ballgame entirely. This is like theOlympics of recognition in STPawards and Fidelity is always ontop of it.”Earlier in a welcome address,Deputy Country Head, DeutscheBank AG Lagos, Mrs. AdeolaAzeez said noted that 2014 wasa tough year for most financialinstitutions and that it is in themidst of such challenges that theBank is recognising theachievements of thecorrespondent banking spacedespite the challenges.She said: “We celebrate ourpartners for achieving the STPrates between 97 and 100 percent. You have all achieved over99 per cent STP rate.”


CMYK

Homes & Housing

In line with ongoingreforms in the mortgagesector which pegged

minimum capitalrequirement for stateoperations at N2.5 billion,Spring Mortgage Plc andUnited Mortgage Limitedhave concluded agreementsto merge.

The merger deal wasdisclosed at a court-orderedmeeting with stakeholdersheld in Lagos recently.Managing Director/CEO,United Mortgage, Mr. Walter

Two mortgage banks conclude merger dealStories by YINKAKOLAWOLE, withagency report

Akpani, remarked at themeeting that the merger willenable both firms to meet thestipulated capital requirementby the Central Bank of Nigeria(CBN). The two firms had onApril 24, 2014, signed aMemorandum ofUnderstanding in relation tothe merger scheme.

The scheme which had beencleared by the Approval-In-Principle received from theSEC was presented forconsideration and approval ofshareholders at the Court-Ordered Meeting on May 21,2015. Shareholders of bothcompanies voted to support tosupport the merger. The new

entity, after regulatoryapprovals of the CBN and theSecurities ExchangeCommission (SEC) will berenamed United MortgageBank Plc and would result inmerging of both business intoone.

Akpani noted that themerger would also lead tocreating a bigger firm that willbe able to compete effectivelywithin the mortgage industry,improve operationalefficiencies as a result of costsavings and improve capitalbase among other reasons.“The merger will provide astrong financial muscle to thepost-merger United Mortgage

in executing biggermandates. It is worthmentioning that UnitedMortgage currently owns47.87 per cent in SpringMortgage Plc. It is againstthis background that theproposed merger is conceived,with the aim of consolidatingthe mortgage business of bothfirms. The Directors of bothcompanies are of the opinionthat this merger will improvethe business of the post-merger United Mortgage andcreate additional value for theshareholders of the post-merger bank. The Scheme isset to be achieved by thetransfer of the assets, liabilitiesand undertakings of SpringMortgage to UnitedMortgage, in exchange forwhich ordinary shares ofUnited Mortgage will beissued to the othershareholders of SpringMortgage in the agreedmanner,” he stated

It would be recalled that theCBN had in a circular statedthat 10 primary mortgagebanks (PMBs) had met theN5 billion requirement tooperate as national mortgagebanks while 26 met the N2.5billion mark for statemortgage banks. The apexhowever noted that four outof the 26 PMBs had propertiesheld for sale, which they wereyet to fully dispose off orcreate mortgages for. It furtherdisclosed that about fourPMBs were still in differentstages of mergerarrangements.

Real estate transactionsinvolve the leasing,renting, buying or

selling of property and isviewed as a very profitableventure. Unfortunately, scamsand frauds are a commonfeature within the sector. Thisis largely due to the fact thatmost people are notknowledgeable or versatileabout real estate transactionsand often require the help ofa third party. They trust thethird party to do justice totheir investment and fail toconduct proper and adequatedue diligence themselves.Also, another reason peopleget conned is when they wantto cash in on an ‘opportunityof a lifetime’ and are quick toinvest in what is probably ahoax which once againpinpoints the fact that duediligence is important.

Although circumstancessurrounding everytransaction can be different,there are red flags you shouldwatch out for to ensure you

Avoiding scams in real estate transactionsare making the rightinvestment and not beingduped. Lamudi Nigeria, a realestate market place that offersonline property listings, listedthe following as some of the redflags to watch out for in realestate transactions.

Pressure for quick paymentBe wary when agents or

sellers tell you the propertywill be out of the market if youdon’t pay up immediately.They make you believe otherbuyers are interested and putyou under unnecessarypressure, cajoling you to payso as to take possession of theproperty before other peopledo. What this does is that itdoesn’t give you time toinvestigate the propertyproperly and ensure it isgenuine. Whoever else mightbe interested in the property,don’t be in a rush.

Insistence on cash paymentWhen an agent or seller

insists you pay in cash, theremay be trouble. Mostfraudulent sellers take this

route to avoid being traced.Whether the person is afriend, family oracquaintance, insist on doingthe transaction through areputable bank for recordpurposes. This gives youleverage in case there areproblems later and can beused as evidence in court. Forno reason should you pay anagent in cash, whether partialinstalment or the full amount.You might end up not seeingyour money as well as yourproperty.

Inability to view documentIf you are unable to view the

documents of the property,don’t go ahead. Take a pauseand hold off the purchase. Itis possible the person sellingto you isn’t the owner soinsist on seeing all thenecessary documents beforecash exchange hands. Evenwhen you have been shownthe documents, it is in yourbest interest to verify them andbe sure they are genuinebefore making any

commitment.No independent scrutinyAn agent or seller that

refuses to allow you bring inyour own experts to survey theproperty is up to no good. Itis in your best interest not toprogress with the purchase ofsuch a property until you getyour way. Don’t be fooled ifthe agent tells you he is asurveyor or can give you aproper assessment of theproperty. There is no way youcan verify the authenticity ofthe person so it’s better to beon a safe side and bring insomeone neutral, preferably,someone you know and canverify his or her integrity.

Fenced propertyCheck and double check

again when you are beingsold a property, especially alanded property, which isalready fenced. Don’t be overexcited that you don’t have topay for the cost of fencing andquickly pay up.

Lagos HOMS: 42new homeownersemerge

Fourty-two newh o m e o w n e r semerged in the May

edition of the Lagos StateHome Ownership MortgageScheme (Lagos HOMS).

Mr. Akinola Kojo-Sagoe,Chief Executive Officer ofLagos Mortgage Board(LMB), organisers of themonthly draw, said since thescheme began in March 2014,more than 400 winners whohave completed the necessarydocumentation, had receivedthe keys to their apartmentsacross the state.

Kojo-Sagoe noted that 80applications were received forthe May draw, 60 people werepre-qualified and 20applications were declineddue to improperdocumentation; while 12housing schemes wereavailable for the draw.

The schemes are AlhajaAdetoun Mustapha andOlaitan Mustapha estates inOjokoro; Sotonwa and ObaAdeboruwa estates in Ikorodu;Sir Michael Otedola Estate inEpe; Chief Anthony EnahoroEstate, SchemesI and II inOgba; Igando Gardens inAlimosho; Chios Gardens inLekki-Ajah; Mushin Schemeand Sangotedo Scheme inAjah.

Police to build6000 houses forjunior officers

The Inspector-Generalof Police (IGP), MrSolomon Arase, has

mandated the Police WorksDepartment of the Force tobuild 6000 units of modernhouses for the rank and filepersonnel. Arase gave themandate at a one-dayworkshop held for officers of thedepartment in Abuja, notinghowever, that corrupt officerswould not benefit from theproject.

The IGP said 500 units of thehouses should be located ineach of the 12 Police ZonalCommands across the nation.He mandated the departmentto complete the houses in sixmonths, adding that it was partof efforts to improve the welfareof junior officers He decriedshoddy projects carried out inthe past for the force by somebuilding developers at highcosts, adding that the newinitiative should be driven bythe relevant professionalexpertise in the force. “Uponcompletion, a unit of twobedroom flat will be deliveredto officers at a cost not aboveN4 million as materials will besourced directly frommanufacturers.

•High-end housing estate


CMYK

Insurance

All goods and servicesare ‘VATable’, exceptthose that are

exempted under schedule 1of the Act.These are: Goods ExemptedAll medical andpharmaceutical products,Basic food items, Books andeducational materials, Babyproducts, Fertilizer, locallyproduced agricultural andveterinary medicine,farming machinery, andfarming transportationequipment All exports Plant andmachinery imported for usein the Export ProcessingZone Plant, machinery andequipment purchased forutilisation of gas indownstream petroleum operations.Tractors, ploughs, andagricultural equipment andimplements purchased foragricultural purposes Services Exempted Medical services,Services rendered bycommunity banks, People’sBank and mortgageinstitutions, Plays andperformances conducted byeducational institutions aspart of learning. All exportservices. Note also: Exportsare zero rated. VAT is leviable at the timeof supply of goods andservices. VAT paid oninputs are creditableagainst output tax.Taxreturns are to be submittedon monthly basis. Administration of VATThe tax shall beadministered and managedby the Federal Board ofInland Revenue (in this Act,referred to as “the Board”) RegistrationA taxable person shall

Value added tax (VAT) in Nigeria (II)

within six (6) months ofcommencement of this Actor within six (6) months ofcommencement ofbusiness, whichever isearlier register with theBoard for the purpose ofthis Act Registration bygovernment ministries, etcas agents of the Board Every governmentministry statutory body andother agency ofgovernment shall registeras agent of the Board forpurpose of collection of taxunder this Act. Every contractortransacting business with agovernment ministry,statutory body and otheragency of federal state orlocal government shallproduce evidence ofregistration with the Boardas a condition for obtaininga contract. Registration by non-resident companiesA non-resident companythat carries on business inNigeria shall register forthe tax with the Boardusing the address of theperson with whom it has asubsisting contract as itsaddress for purposes ofcorrespondence relating tothe tax. Records and AccountsA registered person undershall keep such recordsand books of alltransactions, operationsimports and other activitiesrelating to taxable goodsand services as aresufficient to determine thecorrect amount of tax dueunder the Act. Offences by law

Furnishing falsedocuments, Evasion of tax,Failure to make attributionFailure to notify change ofaddress, Failure to issue taxinvoice, Resistingauthorised officers, Issuingtax invoice by unauthorizedperson, Failure to register,Failure to keep properbooks and accountsFailure to collect tax, Failureto submit returns, Aidingand abetting commission ofoffenceOffences by bodycorporate.Explanation of Some Termsin VATTaxable Goods andServicesThe Act says the tax shallbe charged and payable onthe supply of all goods andservices (in this Act referredto as “taxable goods andservices”) other than thosegoods and services listed inthe First schedule to thisAct.Allowable Input TaxThe input tax to be allowedas deductions from theoutput tax shall be limitedto the tax on goodspurchased or imported

directly for resale and goodwhich form the stock-intrade used for directproduction of any newproduct on which the outputtax is charged. This means input tax on:Any overhead, service andgeneral administrationcannot be charged as inputtax but expended throughthe profit and loss account On capital item and assettoo should be capitalizedalong with the cost of theitem and asset.Distribution of Revenue:15% Federal Government.50% States Government &FCT, Abuja. 35% LocalGovernments.Input Tax: Tax charged onpurchases made Output Tax: Tax charged onsales made Taxable PersonMeans a person whoindependently carries out inany place any economicactivity as a producer,wholesale trader, supplierof goods, supplier ofservices or person exploitingtangible or intangibleproperty for the purpose ofobtaining income therefromby way of trade or businessand includes a person andan agency of governmentacting in that capacity. Zero rated goodsIf you sell zero-rated goodsor services, they count astaxable supplies, but youdon’t add any VAT to yourselling price because theVAT rate is 0 per cent. Thuswhile no VAT is charged onproviding goods andservices taxable at zero-rateof VAT, you are still able todeduct VAT on costs andexpenses you incur inmaking zero-ratedsupplies.Examples are (1) all non-oilexports (2) goods andservices purchased bydiplomats (3)goods and servicespurchased for use inhumanitarian donor fundedprojects Exempted Goods/ServicesIf you sell goods or servicesthat are exempt, you don’tcharge any VAT and theyare not taxable supplies.This means that you won’tnormally be able to reclaimany of the VAT on yourexpenses. Generally, youdon’t register for VAT orreclaim the VAT on yourpurchases if you sell onlyexempt goods or services.In this case you may not beable to reclaim the VAT onall your purchases

You don'tregister forVAT orreclaim theVAT on yourpurchases ifyou sell onlyexempt goodsor services

Resort designsaccount to helpyoung employees

Resort Savings and LoansPlc has designed an

account for young Nigerianswho have just securedemployment to help themsecure their future housingneeds called Resort EarlyHome Owners account, theorganization in a statementby its Head of BusinessDevelopment Mr. YemiPopoola said the product willassist in bridging the housingdeficit in Nigeria.

To benefit from this newproduct; customers of the bankshould be between the agesof 25 and 40 who have had abanking relationship of sixmonths with the bank andwho has a minimum balanceof N50,000.

Beneficiaries of the loanunder this platform accordingto the statement are entitledto a mortgage loan amountwith the equity contribution ofN30 percent depending onthe loan being sought for. Theloan tenor is put at 10 years.

The statement readsfurther that the product isspecifically designed to helpthose who are just starting offin a salary job so as to helpthem with a future plan tohave their ownaccommodation.

”What we have found outis that many young peopledon’t plan for their housingneeds and they end up beingthrown out from theirresidence because of theirinability to pay."

PRESENTATION - Acting Executive Chairman, Federal Inland Revenue Service, Mr.Samuel Ogungbesan presenting an FIRS Tax information pack to Mr. Chidi Ajaegbu, ICANPresident during his visit to FIRS recently in Abuja.

Oil prices rise afterOPEC keeps lowoutput target

Oil prices rose on Friday,breaking a two-day

losing streak, after OPECministers kept their existingoil production target foranother six months at a levelbelow current output.

The12-member groupagreed on the deal at OPEC’sbiannual ministerial meetingin Vienna. Saudi Arabia’s oilminister Ali al-Naimi said the12-member group had agreedto maintain their productiontarget at 30 million barrels perday (bpd).

The Organisation of thePetroleum ExportingCountries (OPEC) had rolledover its target, he said. OPEChas been pumping over 31.2million bpd in recent weeks.

Brent crude oil for JulyLCOc1 rose 80 cents to a highof $62.83 before easing backto around $62.40 while U.S.crude futures CLc1 were up30 cents at $58.30.


CMYK

Interview

Tope Niyi is the Head of Marketing and ProductsDevelopment of Nigeria’s online job portal,Careers24. In this exclusive interview with

JONAH NWOKPOKU, he argues that most of the onlinejobs in Nigeria are from scammers looking to exploitdesperate job seekers. He also spoke on Careers24'sgrowth, market strategies and how job seekers cansuccessfully explore the online job market to boostchances of employment. Excerpts

Careers24 has been in Nigeria’s online job market forthe past one year, what has your experience been andwhat is your general assessment of the online job marketin Nigeria?

Our experience for the past one year has been a goodone. We have seen a growth in our business and for abusiness that is still very young; the growth has beenencouraging to our investors. When we came on board,our job stock was standing at about a thousand jobs, andwe were projecting five thousand available vacancieswhich seemed an impossible task at the time but todaywe average about 11, 000 vacancies. In terms of visit also,we have noticed that over the past few months the numberof people applying for jobs through our platform hasincreased to about 1,500 a day. That is huge growth forus, seeing that applications have gone up and that peopleare really applying for jobs. The number of our job stockhas gone up which are good indicators of growth for usbut these are still early days but we are seeing the kindof growth which we want to see at this stage.

What we have seen is that there are a lot of peoplelooking for jobs. We have also found out that the jobs thatare available in the market are jobs that require certainexpertise or years of experience. We do not get to see alot of jobs for entry levels. And if you look at the job pool,

there ish i g hnumber ofp e o p l el e a v i n gs c h o o levery day,millions oft h e m ,w h oc a n n o tseem tofind thatfirst jobthat wille n a b l ethem toget therequiredexperienceand thenapply fort h o s eexperiencedjobs. We

have also found that maybe itis also about the younggraduates coming out of school,and then have too highexpectations about the jobmarket. There are people whojust finished school and expect

to start earning big money.They want the best jobs. Theoil companies cannot employeverybody. The bankingsector is not what it used tobe in terms of employment.So you find these high

expectations and the reality isthat the people that hire thelargest numbers of entry levelemployees are the small andmedium enterprises, SMEsand they cannot afford to paythe huge salaries that big andmultinational corporations canafford to pay.

With the goal of beating themain player in the job marketin Nigeria, have you madeany significant progress inthis direction?

To be honest, we are still along way from getting therein terms of brand recognition.This year we ran a majorcampaign on television andradio. This has really helpedto boost our image and brandequity in the marketplace. Ifyou remember, Jobberman hasover five years’ head start. Itis going to take time to catchup with Jobberman. But forus, beyond catching up withcompetition, one of the mostimportant things for us andthe reason why we are doingwhat we are doing is that wewant to give recruiters andjob seekers value. That isreally important to us. Itsalways a game of numbers. In

a marketplace, there is alwaysgoing to be a number one andnumber two. Our job is goingto be to increase the numberof people who are using ourplatform and increase thekind of value satisfaction theyget while using the platform.

In what significant wayshas your entry into the onlinejob market affected the onlinejob space in Nigeria?

With our entry, people nowhave more than one option tosearch for jobs. Secondly ithas helped to shine somelights about the opportunitiesin the space for otherinterested investors. Forinstance, Rocket Internet islooking to launch a job portalin Cameroun, which we knowwill eventually be in Nigeriabecause of their heavypresence in the countryalready.

Are there any newinnovations you havebrought to the table besidesposting jobs online aseveryone else is doing?

For us as Careers24, the waywe look at this business isthat we believe, as reflectedin our name, in the careers of

individuals who subscribe toour platforms. We believe thatwe want to be able to holdyour hands through yourcareer growth. We believe thatan entry level worker wouldnot always be entry level. Sowe believe that if we are ableto assist you grow in yourcareer growth, you wouldalways come to us first. Soone of the key things we aresaying is, what kind of valuecan we give you in thistimeline that you have, fromthe beginning to the end ofyour career? How canCareers24 come in? One ofthe major things that we aredoing now is that we are alsoproviding career advice, atwhatever level that you findyourself. So there is advice forgraduates, engineers,finance, technology,managers, and entrepreneurson our website. For usability,we have also divided the siteinto verticals. Currently wehave six verticals. Theseinclude: Graduates,Engineering, Finance, Tech,Office, so that when one visitsthe site, it will take you thepage for the advice most

We have foundout that the jobsthat are availablein the market arejobs that requirecertain expertiseor years ofexperience

•Tope Niyi

80% of onlinejobs in Nigeriaare frauds – NIYI


Interview

Onlinesolutionprovidersshould beable todeploytightermeasures toreduce theincidents offraud

The moment anyone tellsyou to send your informationvia SMS, you should know itis a fraud...genuine recruiterwill ask for your CV

suitable to one’s needs. Thesepieces of advice revolvearound what you need to do ifyou have just gotten a job,what to do on the job and howto grow your career on the job.So, there are lots of resourcescurrently on the site becausewe believe that career portalsshouldn’t just be a placewhere people apply for jobsonly. It should be a placewhere people get useful careeradvice as well, no matter thecircumstances one findsoneself in a current work life.

The online job space hasbecome an attractive platformfor fraudsters, what has beenyour experience and whathave you done to combat thechallenge?

At the time that Careers24launched, it was beinghandled from South Africa. Sowhat the team in South Africadid was to Google the emailaddresses of those recruiterswho want to recruit throughthe platform. But when wecame on board, we realisedthat a lot of those recruiterswere actually fraudulentrecruiters. I can tell you thatout of a hundred jobs that aresent to us by recruiters in aday, about 80 per cent of thatare fraudulent jobs. So whatwe did was to build a systemwhere every job that comes onour site goes through a fraudproof registration process.This gives us access to thedetails of our potentialrecruiters so that we can verifythat the job is genuine. Forexample, someone says Shellis recruiting, and says sendyour CV to [email protected] you see that, you

platform, we can protect jobseekers from falling prey tosuch schemes. I am sure thatgetting the police involved issomething that we will lookinto. Also we also have scamalert mechanism on ourwebsite. It is a spam flag, thatour users are expected to clickon when they encountersuspicious job post. This is forcases where fraudulent jobsare able to pull throughwithout it being detected byour team. This helps us tofollow up on the company andverify the authenticity of theirposts. And then in cases wherethe company has made afraudulent post, we blacklistthe company.

What can be done about theimpact of fraud on the growthof the online job space inNigeria?

I think the onus is on us theplayers in this market toeducate the job seekers. Ibelieve that a lot of times,these frauds occur because ofthe desperation on the part ofthe job seekers. For example,there is this popular scam thathappens all the time with theoil companies whereapplicants are told to paysome money to somebody thatwill get them into the test roomfor maybe Shell or Chevron.But the truth is that applicants

must neverpay for a job.They shouldnever pay foreither thetest or thej o bin te r v iew.There area l w a y sprocesses forh i r i n gespec ia l lywhen itcomes to bigcompanies.And there isno bigc o m p a n ythat will askyou to paymoney towrite a testor to comefor anin te r v iew.The otherone is thatthe momentanyone tellsyou to sendy o u rinformationvia SMS,you shouldknow it is afraud. Anyg e n u i n erecruiter willask for yourCV. He willnot ask youto send yourn a m e ,

height, address andqualifications via SMS. Theseare the things that job seekersneed to know because thetruth remains that jobscammers will always remainbecause the people they arescamming are gullible.

For us as a business in acountry like Nigeria wherethere is always fear ofinsecurity, the truth is that aslong as there isunemployment, and peopleare looking to get rich quick,people will always try toundermine the online sectorthrough fraud. What theonline operators needs to dois to continue to educate theirtarget audience. Onlinesolution providers also needto protect their consumers sothat even if they can’t protectthemselves, they should beable to deploy tighter

measures to reduce theincidents of fraud. Everyclassified site in this countryshould take that intoconsideration so that if as ascammer, I go to this platformand my scam doesn’t gothrough and I go to anotherand another without success,I will probably pack my loadand go to the social media.

From the regulatory pointof view, do you thinkanything can be done?

If we can make scapegoatsof few scammers, that can bea deterrent to many would-bescammers. The truth is thatnow, there is no one catchingthem. As an operator, you canstop them from coming to yourwebsite, but you can’t stopthem from going to Facebookor other avenues they canexplore to get to people. Ithink there should be somekind of legislations stipulatingthe punishment for this kindof fraud. What we are used tois the ‘Yahoo Yahoo’ kind offraud but this one is more of acrisis. I think the way thesecurity agencies rose to thechallenge of ‘Yahoo’ scam toreduce it to the barestminimum, I think they canapply the same strategies todeal with this new kind offraud.

Many people have beenapplying for jobs onlinewithout success, what mustsuch job seekers do tobecome successful?

First, they cannot be lazy andthey cannot have highexpectations. They need to beprepared to work anywherethat fits into their career,probably at less pay. Thismight be painful but it will helpthem grow and exercise theirtalents. They have to provethat they are valuable and theyhave to show theirachievements. If you have noachievements, it would bedifficult to get employees toconsider you. This is becauseemployers are looking forachievers. They are lookingfor top talents. I also think thatthe mindsets of job seekersabout instant success also haveto change, especially for thegraduate job seekers. Theymust manage theirexpectations and look towardsdeveloping themselves first.

CMYK

will realise it is a scambecause a company likeShell should probably haveemails like [email protected] we have littletolerance for scam, so even ifit looks right, you still haveto prove to us that it is right.Apart from that, we have away of taking it further. Wesaid because it is Nigeria andthere is this problem of scam,we are going to ensure thatwe call every recruiter thatputs a job on the site. This ispossible since the job doesn’tgo live once it is submittedfor posting on our site. So theteam at the backend that seesthe job before it goes livecalls the recruiter to actuallyverify the submission.

Can you share anyinstance where yousuccessfully detected andpulled down fraudulent jobscam?

There are lot of things thathelp us to detect scam. Firstis salary, because as arecruiter, you are meant toput the salary range of howmuch you are meant to pay.So as SME, a company thatwe have never heard before,you would naturally put asalary range that is low,maybe less than N100, 000 amonth. But there was thisinstance when all of a suddenwe began to see a salaryrange of up to N900, 000 andfor a business one has neverheard before. So we flaggedthat and then Googled theiremail to see if they have puttheir jobs on other websites,and they had done that. Sowe looked at the salary rangewhich they have put thereand they were all different forthat same job. On one jobportal, it was N1.5m and onanother portal, it was N900,000 and then on another, itwas N600, 000. Immediatelywe saw that, we called thecompany and they arguedthat it was genuine and thatit was a mistake from theperson who inputted thedata. But we also noticed thatthe company does not evenhave a website for us to seethat it is a company that canafford to pay that kind ofsalary. So at the end of theday, we took off the jobcompletely from our sitebecause they did not provebeyond reasonable doubt thatthe job was not a fraud.

But why do you not gofurther by reporting thesecases to the police?

To be honest with you, wehave not started doing that.We have not gone to theauthorities because we do notallow the fraud to beperpetrated. We try to shutthem down in the processbecause we believe that if wecan reduce those kinds ofpeople that come to our

34 —Vanguard, MONDAY, JUNE 8, 2015

CMYK


CMYK

It was beautiful and simple;as all truly great swindles

are.”O. Henry, 1862-1910.

(VANGUARD BOOK OFQUOTATIONS p 239).

America is sometimes called“Uncle Sam” or “God’s owncountry”. Perhaps Nigeria’snickname should be “Fraud’sOwn Country”. Literallyhundreds of thousands ofscams are perpetrated in thisnation 24/7 as to make areasonable man wonder if wehave any other job – fake drugs,fake spare parts, fake drivers’and vehicles’ licence, fakecurrency notes, illegaluniversities 9even medicalschools), pirated Nollywoodfilms, free bail for which thepolice demand money at allPolice Stations, free medicalwhile patients pay for blood,etc. Unbelievable as it is,governments are involved inan astonishing percentage ofthe scams.

Take electricity bills forinstance. Every bill carries anentry saying Fixed ChargesN750 per month. That charge,annualized, totals N9000 perannum and in twenty years willamount to N180, 000. That isabout thirty times the cost ofstringing a line to a newbuilding in Ibadan twenty yearsago. For more than ten yearsthere had been no powersupply to the house involved.Yet, the monthly bill arrives forN750. If that is not fraud, tellme what is. Power HoldingCompany of Nigeria, PHCN

Attack on DISCOs– Blaming victims of FG scam(Problem Has ChangedName), handed that scam tothe DISCOs, who courtesy ofthe Regulatory body, NERC,accepted the “stolen” funds.

However, before you shakeyour head, and start shoutingfor the Police to arrest theDISCOS, better read the restof the article. But, let me startat the conclusion. DISCOS arenot our problem. In fact, theDISCOS are the most unhappyvictims of the swindle whichprivatization has become onaccount of abysmally lowpower supply by the powerproviders. Let me tell you atrue story about the powersector to illustrate the point.

A wealthy friend of mineand his group were interestedin acquiring one of the unitsand they put in a bid – beforeit came to my knowledge.Before the bids were opened, Itold them to pray that they didnot win. They thought I wascrazy despite the explanationsgiven to them – the reasonswere based on my travelsthroughout Nigeria. Mydeclarative statement was this.“I would not accept any of theunits if given to me free.” Theylaughed at me then; they lostthe bid and “cried”. Today, theyare laughing again – at thewinners; who would be too glad

to be rid of the damndistribution companies. Why?

All the DistributionCompanies had fallen prey tothe lies told to them by theFederal Government ofNigeria, through the formerMinister of Power, ProfessorNebo regarding power supplyfrom the time of acquisition.THE ROAD MAP TO POWERpublished in 2013 promisedthem 14,100MW by December2013. Till today we have notreached 5000MW. Investors inDISCOS were deceived andthey are stuck.

Most of us, as consumers,including people highlyeducated and who read papersevery day, still operate with

false notions about whatDISCOS stand for and whatthey can do. Yet, unlike thepast, prior to privatisation, thesame government wasresponsible for powergeneration and supply;DISCOS are powerless toincrease supply. Sinceprivatisation, the DISCOS canonly distribute whatever thegenerating and transmittingunits provide for them. Theycannot supply more; and it isnot in their interest to supplyless than they receive because,apart from fixed charges, theycan only make money bysupply maximum power toconsumers.

Unfortunately the DISCOSare squeezed between thegenerating and transmittingunits, which have consistentlyprovided less than 4500MWand consumers who want upto 10,000MW. DISCOS receivethe maledictions of consumersand their staff are the target ofphysical attacks when indeedthey are victims like us – theconsumers. A top bank official,whose bank financed theacquisition of one of theDISCOS while revealing to methe predicament of investors inDISCOS and their banks,wondered how manyNigerians are aware of the

situation. He mentioned the matter

while other Club memberswere up in arms againstDISCOS which they wantdisbanded and for governmentto take over the distributiononce again. To me, reversing theprivatisation of PHCN, even ifthere was inequity as alleged,will be disastrous for Nigeria.

Punishing DISCOS for nowrong doing on their part willamount to blaming anothervictim because we, theconsumers, are suffering thenegative impact of poor andunstable generation andsupply.

There is no doubt in my mindthat if the nation can generate20,000MW and deliver to theDISCOS, they will pass everysingle megawatt to us. Theyare in business to make money,which they are not making atthe moment. They will gladlymake more of more power ismade available to them. Instead of attacking DISCOSand asking for privatization tobe reversed, we shouldpressurize government todrastically increase powergeneration and the DISCOSwill respond appropriately.

It has been necessary tomake this point because amongthe mountains of advicePresident Buhari has beenreceiving; reversing powersector deregulation is one ofthem. It will constitute severalsteps backwards if it occurs. Atany rate DISCOS cannot givewhat they don’t have.

“

Aviation

The International CivilA v i a t i o nOrganisation, ICAO,

has commenced its ICAOUniversal Security AuditProgramme of Nigerian civilaviation .

Briefing aviation reportersat a joint news conferencewith the ICAO Official at theMurtala MuhammedInternational Airport, Lagos, the Director General of theNigerian Civil AviationAuthority ,NCAA, Capt.Muhtar Usman said theobjective of the USAP – CMAprogramme is to promoteglobal aviation securitythrough continuous auditingand monitoring of member –states’ aviation securityperformance.

According to Usman, whilein Nigeria, the team ofAuditors from ICAO

ICAO commences security audit of Nigerian civil aviationBy LAWANI MIKAIRU& DANIEL ETEGHE

comprising of Messrs KarenZadoyan, Steven Neu, NunoMiguel Silva Ferreira Fortesand Wendy Mueller wouldobserve and assess Nigeria’sadherence to “associatedsecurity procedures inaddition to the guidancematerials and security relatedpractices.”

He added that the movewould enhance states’security compliance andoversight capabilities bydetermining the extent ofcompliance of the state inimplementing Annex 17standards and relatedprovisions of Annex 9.

“Furthermore, ICAO will

similarly determine thesustainability andeffectiveness of the states’implementation of a securitysystem through theestablishment of legislation,programmes, regulations anda security authority withcontrol and enforcementcapacity” Captain Usman

said.The NCAA DG also pointed

out that at the end of the audit,recommendations and timewindows would be providedfor the “closure of the openitems” and ensure compliance stressing thatNigeria was fully prepared tosucceed in the audit as shedid in 2008 when the countryperformed impressively.

The Federal Airports Authority of Nigeria, FAAN, haspartnered Nigeria’s multinational

telecommunications company, Globacom Ltd, to launch anationwide Wireless Fidelity (Wi-Fi) facility across all theairports in the country.

The facility will enable passengers waiting at airports andother airport users to connect to the internet through their smartphones, tablets, laptops and other smart devices.

At the launch of the facility at the international wing of theMurtala Muhammed Airport, Lagos, the Managing Directorof FAAN, Mr. Saleh Dunoma, said the launch was a realizationof the Aviation Ministry’s commitment to improve passengerexperience in the country.

He said one of the numerous complaints the authority hadencountered was lack of internet connectivity at the airportsand urged Globacom to extend the Wi-Fi coverage of to the

FFFFFAAN parAAN parAAN parAAN parAAN partnertnertnertnertners Globacom ts Globacom ts Globacom ts Globacom ts Globacom to launco launco launco launco launch Wi-Fi at all irh Wi-Fi at all irh Wi-Fi at all irh Wi-Fi at all irh Wi-Fi at all irporporporporportststststsnew buildings under construction at the airport any time theyare ready. In his remarks, Glo’s coordinator, business solutions,Mr. Ike Oraekwuotu, expressed the company’s delight to “bringNigeria up to speed with one of the best trends in the aviationindustry worldwide by introducing ultra high speed Wi-Fi dataexperience for travellers and other users of our airports,beginning with Nigeria’s flagship airport.”

“Millions of Nigerians who use and international travellerswho use the 26 airports operated by FAAN deserve a superfast and reliable internet connectivity to stay in touch withloved ones and transact their businesses even while on transit.That is the state of the aviation industry in many of theadvanced countries today. Travellers waiting at airports fortheir flights are able to hook up to the internet using airportWi-Fi facilities in order to maintain contact with their lovedones, colleagues, friends and business associates.

For more thanten years therehad been nopower supply tothe house ...Yet,the monthly billarrives for N750


CMYK

Agric

Fertilizer supplierswho participatedin the Federal

ministry of Agriculture’sGrowth EnhancementSupport Scheme (GESS)are begging thegovernment to redeem theN52 billion (Fifty TwoBillion Naira) being thesubsidy portion they arebeing owed by both theFederal and StateGovernments.

The GrowthEnhancement Support

GES Scheme: Agro-allied contractorscry out over unpaid N52 billionBy JIMOHBABATUNDE

Scheme (GESS) is afederal governmentinitiative to actualise theA g r i c u l t u r a lTransformation Agenda(ATA). It is also aimed atsubsidising the costs of

major agricultural inputs,such as fertiliser andseedlings for farmers.

Based on the GESSpolicy, the Federal andState Governmentsequally contribute thebalance of 50 per centbeing the approvedsubsidy amount foronward payment to

participating inputs(fertilizer) suppliers. Allparticipating states gave astandard Standing Orderfor their portion (25%) ofthe Subsidy amount to bededucted directly fromtheir Statutory MonthlyAllocation from theFederation Account asdue.

The Federal Ministry ofAgriculture & RuralDevelopment (FMARD),as the Agency in-chargeof the administration ofthe program has theresponsibility ofcoordinating, managingand effecting the paymentof the subsidy to allparticipating inputs

supplier companies.GES soon became the

flagship of the out-goinggovernment as it becamethe barometer to gaugethe policy achievements ofthe government as theprogram had within thefirst two seasonssucceeded in deploying amassive fertilizerdistribution networkwhich effectivelydelivered the product tothe door steps of Nigerianfarmers, irrespective oftheir location in Nigeria.

But, those whocontributed to theprogramme’ s success,Farm Inputs SuppliersAssociation of Nigeria(FUISAN ), said this is notthe best of time for themas their businesses arecompletely prostrate dueto non payment of theiroutstanding by thegovernment .

Speaking on behalf ofthe group, Bar. MosesItie Itie said there is noredemption in sight as allentreaties to the relevantauthorities for thepayment of thegovernment’s portion ofthe subsidy has fallen ondeaf ears.

“The Wet season, 2014GES program ended inAugust /September & theDry season, 2014/2015 hasended since January2015. The amountoutstanding to date, beingthe subsidy portion ofFederal and StateGovernments begging forpayment to fertilizersuppliers, is about N52billion (Fifty Two BillionNaira).

“The past 9 months haswitnessed a series ofmeetings and promises topay by the appropriateofficials of the FMARD,ranging from the Hon.Minister of Agriculture,the Permanent Secretaryand up to Directors in theMinistry; all to no avail.The harrowingexperiences of thesefertilizer suppliers in thehands of their financier(bankers) are betterimagined and coupledwith the devaluation of theNaira.”

Itie said that thefertilizer stock inventoryfor the suppliers is bad astheir their lines forimportation transactionshave been blocked orcompletely de-listed bytheir banks.

“Our members do nothave hope or resources toreplenish their stocks offertilizer for sale tofarmers for the 2015


Micro-Finance

To enhance financialliteracy, it is imperative to

assist women get into the financialecosystem, said General ManagerVisa West Africa, Mr. Ade Ashaye,in this interview with FV, stating,“If you are able to facilitate thewomen in getting into the financialecosystem, with that comes thefamily, household, focusing on thatis important.”

What is Visa’s commitment

to financial literacy and isNigeria in your scheme?

If we look at the level offinancial literacy and developmentof the financial ecosystem,particularly for consumers,’ we arestill at the early stages of theelectronic ecosystem, and therehas been a good deal of progress,with that progress there is a needfor financial literacy as part of thatprogress. Our commitment is tofocus on financial literacy, provideand teach individuals systems thathelp them to learn how to spend,save and budget properly. If youhave the basic understandingeveryone will learn from it and thatis one of the purposes of theprogress. We have been doing ourprogrammes for decades in Visaand we have had programmeslocalised in about 30 countries, ourinitial commitment was to take 20million people through ourfinancial literacy programmes by2013 and we have achieved thata year early and to date we areapproaching 30 million peoplewho have done visa financialliteracy programmes.

You launched financial

literacy apps over a year ago,what progress have you madeso far?

That was a network localisationand one of the different networklocalisation that we do. Differentthings happen in different market,example: because South Africa isculturally a story telling culture, welocalised our financial literacyactivity to work in the form ofindustrial theatre, with the greatadoption of technology in Nigeriawe decided to localise our financialliteracy activity working with Co-creation hub in Yaba to create acompetition that had Nigerianswho understand the issues andchallenges better than anybody tocreate apps and games that helpdrive financial literacy and also helpteach people some of the basicsaround financial literacy and thatwas last year. Three winnersemerged from that competition,the response has been very positiveand they will continue to developthe apps because the developmentof apps is an ongoingdevelopment. We plan to haveanother event in the next couple

Experts have highlightedthe cost and

consequences associatedwith bad corporategovernance for MicrofinanceBanks (MfBs) in operationswithin the country.

The experts, Director, OtherFinancial InstitutionSupervision Department(OFISD) Central Bank ofNigeria (CBN) Alhaji AhmedAbdullahi, ManagingDirector/CEO, Stanbic IBTCHolding, Mrs. Sola David-Borha and Principal Partner,Kenna Partners and Founder/Fellow, Society for CorporateGovernance Nigeria, Dr.Fabian Ajogwu, gave thehighlights at a MicrofinancePlatform Symposiumorganised by LapoMicrofinance Bank inpartnership with AccionMicrofinance Bank Limitedand AFOS, with the theme:“The Cost/Consequences ofBad Corporate Governance.”

David Borha, said “Themicrofinance sector occupiesa pivotal role in our nationseconomy, plays an integralintermediary role in theeconomy and providesfinancial services toentrepreneurs and smallbusinesses. Corporategovernance is important toensure its sustainability andthat of the business itfunctions.

“Bad corporate governanceimpacts both the good guysand the bad guys, everycorporate governance failure isan opportunity to strengthencorporate governance andgovernance is not an end itselfit’s a means to an end.”

She listed: Disclosure,Integrity, Responsibility andTreatment of Stakeholders /Balance as elements ofcorporate governance,explaining that full disclosurein line with best practice evenwhen there is bad news ispivotal to achieving corporategovernance goals, she addedInvestor confidence, Capital,Price / Earnings,Sustainability and Longevityare the main benefits ofcorporate governance.

She said, “The NigerianStock Exchange recentlylaunched a CorporateGovernance Rating System(“CGRS”) designed tomeasure corporategovernance of listedcompanies and provideincentive to companies thatare committed to goodcorporate governance. The

'Women empowerment will enhancefinancial literacy'

There is aneed toincreasefinancialliteracy inall thedifferentsectors ofthe economy

By PROVIDENCE OBUH

of months to get more publicly onthe apps and work withstakeholders to look at the bestways of putting those apps out intothe wider market.

How you see the Nigerian

market in terms of financialliteracy and card usage

I have been within the visasystem for about 20 years, I haveworked in different countries butwhat makes Nigeria different is thefact that so many stakeholders arepushing in the same direction.Everybody is pushing to improvetransparency, convenience andsecurity, for me, that is why if youlook at where we are in Nigeria,say seven years ago and where weare today, compare that to anyother market I have worked in myseveral years in electronic market,I have not seen any market thathas made such advancement soquickly and it is so becauseeverybody is pushing in the samedirection and I must tell you, thereis room to grow further.

Looking at the microfinance

sub sector, how does financialliteracy come to play?

If you accept that we havemoved very quickly, that meansthat everybody needs to catch up,when we say financial literacy, itmeans different things to differentstakeholders, from a merchant

perspective, I need to understandfully the value of acceptance ofelectronic payment over cash, thatis different from a consumerperspective, where I need tounderstand the benefit of savingand budgeting appropriately andcontrolling my finances. There isa need to increase financial literacyin all different sectors of theeconomy and ensure that theknowledge and capabilities benefitin there are shared.

I look at micro financing entitiesas financial institutions similar toour client banks that focus on howto service different sub sectorcustomers who have slightlydifferent needs. The trick is howdo we help specifically take themessage to ensure that theircustomers are able to benefit fromwhat we are talking about. In thefinancial literacy space, it is themen who are usually excludedfrom the formal financialenvironment where you have thegreatest needs.

What product does Visa

have for microfinance banksin the country?

If you look at the plans that wehave in place around makingbetter use of technology to availfinancial services, when you are ina better position to make use offinancial technology with thatcomes the efficiencies, cost,convenience, which means thatmore people can be included. Ifyour only tool is a tool which hascertain characteristics, as youprovide more tools perhaps, yousuit it to bring in more people intothe ecosystem and serve in thatdirection.

Financial literacy

programmes for women,especially the rural woman?

There are a number of researchprogrammes in a number ofcountries that would tell you, if youare able to facilitate the women

getting into the financialecosystem, with that comes thefamily, household, so focusing onfinancial literacy for women isimportant. We have supported thatin a number of countries. Am onthe advisory board of AfricanWomen’s Banking, the pure focusis supporting financial inclusion forwomen.

Future plan Number one plan for me is to

build an office here, increase thenumber of Nigerians who arefocused within Visa on supportingNigeria. There are a number ofproduct and services which are inthe pipeline and would helpprovide that choice. Really thestory is if you can provide choice,then you are in a position that theconsumer and other merchant/stakeholders can find somethingthat works for them. We willcertainly provide education on thedifferences between prepared,debit and credit cards, the differentbetween the two means you arepaying for your goods and servicesupfront or you are paying fromyour bank account or you areeffectively gaining from a line ofcredit.

Plans to grow the debit

market Debit is fundamental in Nigeria

because from paymentperspective, what you see is thatpeople are used to the idea ofspending the money they have,debit is a fundamental tool thatenable people to get theconvenience and the security ofvisa payment system from theirdebit cards.

Nigeria’s financial literacy

landscapeIn retail space that we have been

involved to date, there has beensignificant progress over the shortperiod of time and there is scopefor continued progress. Otherstakeholders particularly the CBNare pushing in that direction thatlandscape is in health free spacewith regards to opportunity tomove forward.

Scorecard for microfinancing in Nigeria

I think it will be unfair of me togive a scorecard without having tolook at the microfinance subsector. Where you have anindustry that is trying to servicecustomers need and customers thathave choice, I think the customerswould be able to hold cards. SoI think if the customers are thereand they are making use of theindustry, is a scorecard. When youhave entities like ours who havethe knowledge, capabilities and thetools to support and assist, willscore the changes over time.

Experts harp oncorporate governancefor MfBs operationBy PROVIDENCE OBUH

Ade Ashaye, GM, Visa West Africa


CMYK

People in Business

Ms. GbonjuAwojuyigbe isthe Managing

Director/Chief ExecutiveOfficer of Lagos-basedWandy Foods Limited, afood processing outfit.The 1992 law graduatefrom the Nigerian LawSchool, an alumnus ofFate Foundation and a2005 Fate FoundationAlumnus Award winner,first worked with FirstAfrican Trust Bank beforegoing fully into business.In this chat with FinancialVanguard, the GoldmanSachs scholar tells thestory of how she left thebanking industry for foodprocessing business andthe challenges involved.Excerpts:

Why I went into agribusiness:“I left the bank in 1997

because I felt I was not fulfilled.I had this desire to fill the gapin the food processing industry.My grandparents were big timefarmers and one thing I noticedwas that none of the children orgrandchildren took to farmingapart from me. My maternalgrandfather had 65 childrenwith many wives andconcubines. He was a court clerkso all the places they postedhim, he acquired a wife. So

I want to fill thegap in foodprocessing industry

By EBELE ORAKPO nobody is tending mygrandfather’s cocoa farm as attoday. That was whatinterested me. I began toask myself why peoplewere running away fromfarming and production.

Why people runfrom production:

“I have seen first-hand whypeople are not going intoproduction. It is so frustratingfor a manufacturer in Nigeria.Sometimes I wonder who ledme into this business. Isometimes feel it must be thedevil because production is sobad in Nigeria; that is thehumble truth. You doeverything by yourself; you arevirtually all alone. That is onething I pray that the newadministration will look into.Initially, it was so interestingwhen I started about 17 yearsago. It was fun getting grainsand at the end of the day, youhave flour. Then I would buywheat and make wheat flourand wheat cookies. I wouldbrowse the internet, get somestuff and I would experiment.We were selling but right now,it is so frustrating."

Going into business:I started in January 1998 in

my house with just onereluctant staff because I wasstill in paid employment. Mycarpenter came in one day and

said his niece should help me. Isaid help me to do what? Hesaid, ‘just take her’. I said howmuch will I pay her, he saiddon’t worry. That was how sheresumed on Monday and I wentto work. By the time I returned,I noticed that she had done oneor two things that impressedme. I had buckets containingmilled grains which I kept in aroom. I noticed that she had

sealed all the things in thebucket and I asked who taughther and she said she taughtherself. She showed me all thecellophane paper she used toteach herself to seal and that wasit! I employed her. She is now late.

"What happened was that I wasworking in the bank and then Igot attracted to production, Itold my late grandmother that Iwanted to try one or two thingsand she told me to try plantainflour because not many peopleknew its health benefits. I startedwith rice flour, later addedplantain flour, bean flour and chilipepper. I am also a bee keeperand I bottle and sell honey. Mycolleagues were my customers,they were buying everything Iproduced and that encouragedme to supply supermarkets,starting with Value Mart nextto our bank and later startedsupplying othersupermarkets."

Why I chose supermarkets:"I decided that my niche

would be supermarkets

because supermarkets in thosedays do not owe. You supplythem and in 30 days, you getyour money. Some even payyou immediately, some afterseven or 14 days. There was nostress, once your invoice waswith them, you would be sure ofyour money but that is not thestory today. Things have reallychanged.

Patronage:Awojuyigbe who has a

certificate in EntrepreneurialManagement from Pan-AfricanUniversity, noted that"patronage has been great but inJanuary this year, I reducedproduction because of theeconomy. People were owingand unwilling to pay. Bigsupermarkets were owing , notthat they were not selling. Thereare a lot of things that still needto be put in place in Nigeria. Weneed a government that will bevery strict with small businessesbecause if you get angry with asupermarket today and go andwithdraw your products, by thetime you go back there,somebody else would havesupplied them that sameproduct, telling them not tomind you. We need a unifiedvoice because mostsupermarkets in Nigeria areowned by expatriates and theytreat us anyhow and nobody isbothered about it, nobody iscomplaining. Even the way theytreat their workers is horrible."

Challenges:She named power, funding and

marketing as the majorchallenges. "You are competingwith big companies who go to themarket and tell marketers not toaccept your products. You know,before you can sell in any Lagosmarket, you must know theIyaloja and Babaloja. Theknowing is not just ordinaryknowing, you will holdsomething like a party forthem, spend a lot of money. Soit is so expensive marketingyour goods and that is whyselling in the open market is likea clique."

Coming to TIC:"I had money at a point and

instead of just spending the moneyon myself, I bought a warehousein Maryland but when NAFDACcame for inspection, they said itwas too small, I couldn’t partitionit. So with some help, I got thisplace at the TechnologyIncubation Centre (TIC), Lagosunder the National Board forTechnology Incubation. We donot pay rent but theyaccommodate us for a givenperiod. Although I need to moveout, there is no cash right now. Infact, I have just two staff now as Ihad to lay off some. I am justdoing the little I can, hopingthat God will answer myprayers because they say it isnot trying at all that is failure.If you try and fail, posterity willrecord that you tried."

Mostsupermarketsin Nigeria areowned byexpatriatesand theytreat usanyhow

*Gbonju Awojuyigbe...It is not trying at all that is failure

— GBONJU AWOJUYIGBE

CMYK


Economy

As most operators in theeconomy continue to

wait for government policypronouncements beforemaking major business andinvestment moves bond marketappears to be an exception inthe game. The market,measured by FinancialMarkets Derivatives Quote(FMDQ) total market index,has returned 7.9 per cent Year-To-Date last week thoughrecent trading momentumremains subdued.

This generally bullishperformance continued till thethird trading day of the firstbusiness week in the life of thenew government in Nigeria.Dealers said the increase canbe related to improvedoptimism in the newgovernment though investorsseem to be awaiting the policydirection of the newadministration to charge-uptheir decision making.

On account of the perceivedsilence in the first week afterinauguration, yields on fixedincome instruments across alltenors traded sideways in thelast three days of the week.

Average yields declined 8basis points on Friday whileWeek-on-Week analysis of thesovereign yield curve showsdivergence at the lower endsignifying increased investorappetite for treasury bills.

According to analysts atAfrinvest Group, political risk,credit risk, re-investment risk,

Stories byEMEKA ANAETO,Economy Editor

Bond marketbrushes asideeconomy policywaiting game

considerations by the UnitedStates of America to raiseinterest rates may divert fundsfrom the Nigerian capitalmarket, hence a likelyreduction in the rate of foreignparticipation in the bondmarket, adding however, that‘’we expect the bond marketthis week to ride on anypossible economicpronouncement by the newgovernment”.

A week after theinauguration of Nigeria’s newpresident, MuhammaduBuhari, the financial market

has sustained a calmmomentum on the back of the

interest rate risk andexchange rate risk arethe main factors thatcontinue to defineinvestors’ actions.

In their report lastweekend they statedthat the recent

new president’s silence on hisblueprint for the economy. TheNigerian Stock Exchange AllShare Index (NSE-ASI)tumbled 1.9 per cent Week-on-Week as uncertaintiesbordering on keymacroeconomic policy directionof the new government dragthe index lower.

Additionally, foreign portfolioinvestors whose participationin the Nigerian marketaccounted for over 55 per centfrom 2011 to 2014 appear tohave remained on the side lineamid uncertainties on

exchange rate and economicreforms.

In a related development,fuel scarcity continues to biteas long queues are seeminglybecoming the new normalacross the states.

This appears expected givensome marketers’ apparentreluctance to sell at regulatedprices amid fears of importingat a loss should subsidypayment be officially removed.

Some observers, however,believe the unsettling scenarioin the downstream sectorremained largely hinged on thePresident Buhari’s mutedunfavourable dispositiontowards subsidy payment onimported fuel.

With five days since hisascendency, the onlynoteworthy action taken by thepresident relates to insecurityand ending insurgency in thecountry.

Some economy analystsbelieve the President must setthe tone for the market bymaking a clear pronouncementon critical concerns in theeconomy.

Chief among these includethe oil and gas sector andsubsidy removal, exchangerate and the framework formonetary policy, addressingthe power sector crisis and thefuture of infrastructure inNigeria.

•Emefiele, CBN Governor

General Electric (GE), a 123-yearold American Conglomerate

with operations in 130 countriesaround the world, is gearing up tofurther exploit the economic potentialsinherent in sub-Saharan Africanmarkets, especially Nigeria andEthiopia. At the ongoing WorldEconomic Forum (WEF) on Africa, GEsaid it would increase its capital outlayto US$10 billion over the next fiveyears.

The conglomerate will target power,health and locomotive opportunitiesin several African countries. Nigeria,its prime target, offers a ready marketwith the numerous gaps in

GE still positioning for Nigeria with USD10b investmentinfrastructure and a new governmentlooking to drive “change.”

According to a report by VenturesAfrica, GE’s Transport Leader in-charge of Africa, Mr Thomas Konditi,said “We’re bullish on Nigeria. Wemet with a couple of the incomingleadership and they’ve put rail rightbehind power. They don’t have minesas much, so you’re going to look formore general freight” .

According to Konditi, Nigeriatransports only 0.1 percent of itsfreight by rail and could boost thenumber of locomotives to 500, a 1900percent increase over the current 25engines in the country. GE plans

to reinitiate talks with the newNigerian government on a previousagreement for 200 locomotives.

Over the past decade, GE hasinvested massively in Nigeria, the mostsignificant being a US$1 billion serviceand manufacturing facility in thetourist city of Calabar, Cross RiverState. It has also engaged partnershipswith the likes of Dangote to solve thepower challenges in the country.

Jeff Immelt, GE’s CEO, has identifiedAfrica as one of the company’s mostimportant growth areas, with plans toinvest US$2 billion in the region by2018 as well as double its workforce onthe continent.

Some economyanalysts believe thePresident must setthe tone for themarket by making aclearpronouncement oncritical concerns inthe economy


Economy

Our exhibition'll deepenNigeria-Iran traderelations — KOOZECHI

Mr. Saeed Koozechi is the Iranian Ambassadorto Nigeria. In this interview with BABAJIDE

KOMOLAFE & JONAH NWOPOKU, he spoke on the bilateraltrade relations between Nigeria and the Islamic Republic ofIran. He also spoke on how the two countries can explore theopportunities provided by the upcoming first Iranian SoloExhibition in Nigeria to boost trade ties. Excerpts:

Iraniancompanies donot know theopportunitiesavailable inNigeria

Besides oil gas,what arethe other

economic and tradeopportunities in Iran?

As you may know, Iran isone of the biggest countrieswith the highest crude oil andgas reserves in the world. Butin spite of that, the Iraniangovernment is graduallyreducing its dependence onoil revenue. In the nextcouple of years, Iran shall berelying more on othersources of revenue. In thiscurrent year, our budget isjust 30 percent dependent onoil and gas revenue. As amatter of fact, we areactually concentrating onindustry and other industry-related sectors of oil and gas.Take the petrochemicalindustry for example; this isa very huge and valuablesector for the Iranianeconomy. Iran produces 60million tons ofpetrochemicals annuallyand we deploy them for thelocal market and the idea isto support many of the SMEsin the country who use themas raw materials. Of all thepetrochemicals produced inIran, only 25 percent areexported to the internationalmarket. Last year, Iranianexport of petrochemicalsstood at about $15 billion.

In the power sector whichis one of the most importantinfrastructures in Iran, wehave made good progressand have achieved about 95percent self sufficiency in thissector including design andmanufacture of equipmentlike turbines, transmissionequipment and many others.Last year, Iran exported $1billion worth of electricity toneighbouring countries.

In the steel industry, thereis about 17 million tonsproduction annuallyproviding the neededsupport for the Iranianindustry. Many of Iraniancities rely on Iranian-mademachines.

In this exhibition, there willbe fifteen companiesshowcasing Iranian mademachines and products. Ithink that since Nigeria isgoing to establish plants forassemblage of cars, it ispossible that Iraniancompanies in theautomotive sector will alsobe thinking about comingover to Nigeria to establishplants as well.

In agriculture, we produceabout 120 to 130 milliontons of produce annually.Iran ranks fourth in the worldin fruits production. We rankvery high in the productionof various kinds of fruits.Fruits are very important inmy country. For example,Iran’s export of the Pistachiofruits is valued at $1 billionannually.

Health is also a veryimportant sector in mycountry. Many high techdrugs and pharmaceuticalproducts can be produced inIran. With regards to nucleartreatment, we can produceradiographic drugs for thetreatment of health cases likecancer.

As for building materials,there are thousands ofIranian companies thatspecialise in buildingmaterials. For example, Iranranks fourth in the worldbelow China, Italy and Spainin the manufacture of tiles.

What is the purpose of

this exhibition?This exhibition is expected

to open doors ofopportunities for bothIranian and Nigeriancompanies and businesses.It will help to identify eachother’s capacity in order todeepen trade relationsbetween the two countries.Right now, Iraniancompanies do not know theopportunities available inNigeria. And Nigeria is a verybig market, especially withits big population andresources. This situation also

applies to Nigerianbusinesses as they also knowlittle about Iraniancompanies and the hugepotential that the Iranianmarket offers. I believe thatthrough this exhibition, astronger connection will befostered among the Iranianand Nigerian businesses. Theexhibition will play a verykey role in identifying theopportunities on both sides.I hope that as soon aspossible we can have anotherexhibition in northernNigeria.

Why should Nigerians

and Nigerian companiescome to the exhibition?

They should be coming tofind business opportunities.I think that many Iranianproducts can competefavorably in terms of priceand quality with otherproducts in the Nigerianmarket. For instance, there

are some products that whenI compare them with theprices in Iran, it will be threetimes higher. And then Iwonder why the Iranianproduct is absent in theNigerian market. Forexample, in the foodindustry, the quality ofIranian food is far aboveinternational standards.Take dairy products forinstance, it is a good area ofinvestment for Iraniancompanies in Nigeria. Themain reason why Nigerianbusinessmen should comefor the exhibition is to findone part of the Iraniancapacity for products andother businessopportunities.

For Nigerian

companies that want totravel to Iran and dobusiness with Iraniancompanies, what is youradvice to them?

This exhibition provides awindow of opportunity forrealistic assessment of thecapacity of each country.There are manyinternational exhibitionsthat take place in Iran.Sometimes in oneexhibition, there are morethan 1,000 companiesparticipating and most ofthese exhibitions arespecialised. For example:

Medicine, building, furnitureand industry etc. If Nigerianbusinessmen visit mycountry during or after theseexhibitions, within three tofive days, they will get Iraniancompanies that are willing

to partner with them.And the beginning of

this seriousr e l a t i o n s h i p

will even helpto create a

c u l t u r a lbalance

betweent h et w ocountriesa st h e i rproductsc r o s sto thedifferentmarkets.

Y o uk n o wt h a tm a n ytourists,a b o u t

four to fivemillion, also

visit Iranannually and most

of them visit asmedical tourists.

Many of Iran’sneighbours like

Afghanistan, Azerbaijan,and Iraq visit my country

for medical reasons. This isbecause Iran can boast ofhigh quality and affordablehealthcare but unfortunatelymany Nigerians do not knowthis. They believe thatEurope offers betterhealthcare. This is also a goodarea that the two countriescan also explore to buildtheir relationships.

Do you have any

incentives for Nigerianbusinesses that want todo business with Iraniancompanies? Does thegovernment of Iran haveany incentives forNigerian businesseswilling to come dobusiness in Iran?

Getting a visa to Iran as abusiness person is notdifficult. Nigerian businessmen who want to travel toIran for business purpose cantravel to Iran easily. Iran is abig country. One can travelthere either for business orfor holiday. I hope thatthrough this connection weare trying to establishbetween Iran and Nigeriathrough this exhibition,more awareness about thebenefits of trade relations canbe created. Iran is a veryimportant country in theMiddle East whereas Nigeriais in the same position inAfrica, so I think we can havea good partnership.

CMYK

Advertising & Promotions


CMYK

The indicators that drivethe integrated

m a r k e t i n gcommunications industrywere completely lagging inquarter one. What willdetermine the success ofbusiness in Q2 is theconcern of this report forthe 2015 financial year. Princewill Ekwujuru takesa cursory look into Q2.

The Q1 of the Integrated

Marketing Communications,IMC industry was basically slowand uninspiring despite thevolume of political advertisingmaterials churned out bypolitical parties in the 2015electioneering campaignaccording to industryprofessionals.

Though the political war hasbeen fought and won, but whatbecomes of the fate of the IMCindustry in Q2.?

Analysts had hitherto blamedthe lull in Q1 to less focus onbusiness ads even though thequarter had been promising aswell as encouraging some newbusiness decisions for quartertwo.

What the quarter two will looklike depends on what therecently sworn in governmentmakes of it. The IMC industry,particularly the AdvertisingPractitioners Council ofNigeria, APCON areoptimistic the administrationwould appoint an informationminister that understands theIMC industry to drive theindustry to a greater height.

From the informationdeduced from the annualMediafacts book published byMediaReach OMD, which

PARLEY - From Left: Head of Government Affairs, West Africa Area, British American Tobacco(BATN), Odiri Erewa-Maggison; Head of Legal and External Affairs, Freddy Messanvi; AreaHead of Corporate Affairs, Oluwaseyi Ashade; and Head of Litigation and Regulation, SolaDosunmu during a media parley in Lagos

New govt'll restore confidence in IMCsector – Marketing professionals

indicated that by this time in2013, the first quarter of Above-the-Line, ATL advertisingexpenditure was N26.6billion(26per cent) of the entire ATLadvertising expenditure thatyear. This figure was drive byprivate sector initiatives.

Aside political campaignexpenditure analysts said the2015 ATL ad expenditure in Q2may rise above what theindustry experienced two yearsago.

There are also indications thatradio advertising expendituretrends which was N15.1 billionin 2013 may increase by 26percent in Q2, because itrecorded a steadily growth in2013, as a result of its widespread, and preference byadvertisers, likewise the TV

which ad expenditure wasN47.0 billion in 2013whichthough declined by 20 percent28 and 24 percent in theprevious quarter of 2013.

For the print, Industry analystssay that print advertising

expenditure will grow due tonew publications and increasedbrand activities on print media,the spends on print media willincrease double in Q2.

The Outdoor advertisingexpenditure trends in 2013 wasN23.2 billion after a huge dipof-37 percent in 2012.

The Outdoor spend followingthe promise by the President ofthe Association, CharlesChijide during the press briefingto herald the ninth edition of thePosters Awards seemsoptimistic.

According to him, “theoutdoor industry will be morecreative this year to give clientsthe edge in terms of digitalcreativity to propel and exposeclient’s products by deployinga legendary OOH platforms.”

This statement is anindication that basically OOHspend will definitely increasewhich may push outdoor ad by26 percent despite the fact theywere the most favoured duringthe political campaign periods,Chijidu Alakwe, anindependent media monitorstated.

Mrs. Bunmi Oke, FormerPresident AAAN, said the incoming government hasclearly shows that they haveunderstanding of howimportant communication istowards the selling of itspolicies. The creative industrywants the government to usemarketing communications tobring about betterunderstanding of allgovernment policies. Forexample, if government is ableto explain to Nigerians throughmarketing communicationscampaigns the steps which weneed to take to build the powersector, whether it is solar power

The Association of Advertising Agenciesof Nigeria, AAAN has urged the new

administration of President MuhammaduBuhari to ensure the appointment of askilled and experienced marketingcommunication professional as the Ministerof Information.

The President of the Association, Mr.Kelechi Nwosu, in a press statement saidthe new role of the Ministry of Informationis far beyond the traditional role of acting asa catalyst in disseminating information andmanagement of the information machineryof the government.

In view of the strategic importance of theInformation Ministry, the ideal Minister,AAAN believes, should have a track recordof brand building and executing high impactcommunication strategies and frameworks inthe interest of the nation.

The statement, signed by the PublicitySecretary of the Association, Mr Ikechi

First Bank spendsN3bn on CSRin 10 years

First bank said it has spentN3 billion in the last

ten years on corporate socialresponsibility, CSR, initiativesin education, health andempowerment.

Group Head, Marketing andCorporate Communications,Mrs. Folake Alli-Mumuney, disclosed this at an interactive section with reporters in Lagos, where shesaid that on average over thelast ten years, “we have spentin excess of about N1billion toN3billion per-annum on ourCSR space , it depends on theproject although she stated.

According to her we havestreamlined our area ofinvention around education,health and empowerment, andbased on that we look at thevarious opportunities.

On the space of educationshe stated: “we have endowedabout 14 Universities, we havethe oldest endowment thatexists in this country, we haveset up endowment acrossvarious institutions.

Speaking further she said thebank partners junior Achieversof Nigeria to drive financialliteracy and decided to kind ofstreamline to make sure that is

GTB, Etisalat launchGTB, Etisalat launchGTB, Etisalat launchGTB, Etisalat launchGTB, Etisalat launchGTEasySavers toGTEasySavers toGTEasySavers toGTEasySavers toGTEasySavers todrive financialdrive financialdrive financialdrive financialdrive financialinclusioninclusioninclusioninclusioninclusion

GTBank and EtisalatNigeria said they are

partnering to drive the financialinclusion process with thelaunch of a savings account: GTEasySavers. According toManaging Director of GTBank,Mr. Segun Agbaje, during thelaunch of the product in Lagos,said the product was designedto enable the unbanked andunder-banked achieve theirfinancial goals while operatinga regular bank account via themobile phones.

The Managing Director alsostated that the alliance willenhance the service delivery ofboth brands and offercustomers unparalleledlifestyle and loyalty benefits.

Agbaje further stated that thepassion about driving theCBN’s financial inclusionstrategy in ensuring the under-banked and unbanked willbegin to find the propositionsof banking services moreattractive and convenient, and“then take the bold step ofpatronizing our numerousbank products and offerings, apassion which we fully sharewith Etisalat Nigeria”.

Appoint professional Information Minister— AAAN t ells FGStories by PRINCEWILL EKWUJURU Odigbo, said the Minister of Information of

the Federal Republic of Nigeria at this stagein the history of the country, should be athoroughbred professional with relevantexperience in integrated marketingcommunication, information strategy &management and brand building in orderto put in place and manage a nationalcommunication plan and rebranding processin line with best global practices.

“The country has been confronted withseveral image and brand positioningchallenges of recent and critical incomplicating the problems has been theabsence of brand communicationexpertise as a strong consideration in theappointment of the heads of the country’sInformation Ministry. But we are happy thatthe new government rode to power, drivenby the campaign slogan of Change. For us,this change should be extended to theappointments of professionals to managerelevant strategic offices,” the AAANPresident said in the statement.

The outdoorindustry will bemore creativethis year to giveclients the edge interms of digitalcreativity

Business & Economy

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


CMYK

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

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

One does not reallyhave to be a medicalexpert to recognize

that the heavy grime and dirton Nigerian currency noteswould also readily serve as vector for the spread of germsand diseases.

However, despitecommendable progress in theadoption of E-transactions,cash handling, still remainsvery popular regardless of thequality of the notes and theattendant health hazard.

Curiously, however, newcurrency notes have becomeeasier to obtain at socialparties and event centreswhere they are brazenlyhawked with up to 20%discount, even whencommercial banks, on the otherhand, continue to plead nonsupply from CBN. Nonetheless,the popular suspicion of ‘undertable dealings’ in currencysupply were probablyvalidated last week by mediareports, such as “EFCC nabs sixCBN officials and 16 otherbankers over N8bn fraud”, onpg 9 in Vanguard edition of 1/6/15. According to this report,the EFCC picked up thesuspects for “stealing andputting back into circulationabout N8bn stock of defacedand mutilated Nigeriancurrency notes which weremeant for destruction”; theCommission’s investigationshad apparently also revealedthat in September 2014, “a boxthat was supposed to containN5bn in N500 notedenominations was discoveredto be filled instead with oldnewspapers” as replacement atthe Ibadan branch of the CBN.

Clearly, the sum of N8bn inthe alleged scam may actuallybe an understatement, sincethe EFCC also claims that suchescapades had enjoyedconsiderable mileage overseveral years. Besides, theN134m credit balance in one

Thieves in the treasuryof the bank accounts and thevalue of other listed propertiesallegedly acquired by astandard six certificate holder,who is, incidentally a juniormember of the syndicate, mayalready exceed N1bn! Thewhistle blower who uncoveredthe heist also alleged that theTreasury assistant, and theCoordinator and Head ofSecurity at the Ibadan branchwere alerted, but regrettablytook no action. Be that as itmay, this developmentprobably explains why grimy,dirty notes still form a goodproportion of the currency incirculation, despite theirpotential as vector fortransmission of diseases.

Nevertheless, according to areport on pg 8 in PunchNewspaper edition of 1/6/15,in addition to the relatedhealth issues, the FinancialCrimes Agency, alsorecognized that “the currencyfraud is partly to blame for thefailure of CBN’s monetarypolicy over the years, as thecurrency mop up exercises bythe Apex bank failed to checkthe inflationary pressure onthe economy’. Properlytranslated in plain language,EFCC’s above statement seeksto explain that in order toreduce the threat of perceivedinflationary threat ofperceived too much Naira inthe system; the CBN commitsthe hari-kari of adopting highmonetary policy rates whichare antagonistic to economicgrowth and job creation. Worsestill, the CBN becomes forcedin response to reduce theavailable surplus moneysupply by borrowinghundreds of billions of Nairathat it intends to simply keepas idle funds, despite theattendant oppressive interest

rates of up to 15% in order torestrain commercial banksfrom promoting spending bylending to other customersand fueling inflation. Thisu n f o r t u n a t ecounterproductive and antipeople strategy to restraininflation clearly becomesmeaningless, if some CBN staff,in collusion with othercommercial bank staffcontinue to re-inject billions ofalready discarded/condemned currency notesback into the system, while theCBN is simultaneously kept

spending, the same Apex bankalso deliberately promotes theliquidity surplus syndromewhen it substituteshumongous Naira allocationsfor the distributable portion ofdollar denominated revenueevery month!

Thus, in the light of theprevailing culture of

impunity in governance, itwould be a hard sell toconvince Nigerians that theIbadan currency scam is anisolated case; in this event, itwould be presumptions toapprove a clean bill to theother 36 stations where suchCBN cash operations arecarried out nationwide. Theexposure in Ibadan wouldobviously have temporarilytrigged cover-up strategies inother CBN cash centres.

Curiously, however,currency scams involving CBNstaff are not unusual; forexample, in December 2012,the House of Representativesexpressed shock to “hear thatN2.1bn of newly printedN1000 notes was missing atthe Nigerian Security Printingand Minting Company”, acorporation over which CBNhas supervisory role. Mediareports suggested then, that inorder to facilitateinvestigations, the ManagingDirector of the NSPMC, one,Ehi Okoyomon whoreportedly enjoyedextravagant lifestyles, and thesubsisting Head of security, ofthe Mint Company were senton compulsory leave. Sadly,the initial intensity of publicattention on this scam hassince waned and prosecutionmay ultimately never beconcluded.

In another relateddevelopment, the cover

report of the Sun Newspaperedition of 16th April 2013 alsocarried a story titled “EFCCdetains ex Mint MD Okoyomonover N750m polymerscandal!” The story was sequelto allegations that anAustralian Newspaper hadreported that, SECURENCY (anote printing subsidiary of theReserve bank of Australia)paid N750m in bribes to someofficials of CBN between 2006-2008 to secure the contract tomake polymer notes inNigeria. According to thereport, apart from the formerCBN Boss, senior officials ofthe Finance ministry and aformer President were namedas beneficiaries of the bribesfor polymer notes.

While no official of the CentralBank has so far been indicted,the EFCC is presently in courtwith Ehi Okoyomon, theformer Managing Director ofthe Nigerian Security Printingand Mint Company over arequest to extradite him to theUK to face prosecution oversome findings related to thebribery allegations for thecontract for the N20 polymernote.

However, in a curious twistof events, the same CBN whichhad, earlier zealouslypromoted the allegedattributes of the polymer notesat great public expense haslately turned around tocondemn the adoption of suchcurrency as ill advisedbecause polymer notes werefound to rapidly deteriorate inthe market place.Nevertheless, it is also allegedthat the polymer contractbribes may have alsoencouraged Securrency tobreach the plannedestablishment of a polymerbased mint in Nigeria as partof the principal objectives oftransferring technology todeveloping nations!

busy mopping up perceivedsystemic excess Naira supplydespite the attendantoppressive debt burden forthe nation!

Curiously, the modusoperandi of the Ibadancurrency theft is awkwardlysimilar to the process CBN alsoadopts for its liquidity mop upoperations. For example,while the Central Bank on onehand pretends to be sociallyresponsible in attempting tostop inflation by reducingNaira surplus and liberal

Curiously, themodus operandiof the Ibadancurrency theft isawkwardlysimilar to theprocess CBNalso adopts forits liquidity mopup operations

M u l t i n a t i o n a lcompanies deprive

African governments of 11billion US dollars in taxes eachyear, and G7 world leadersshould set up a new globalbody to regulate corporatetaxation, OxfamInternational said. By shiftingprofits overseas to lower taxregimes, companies legallyavoid paying taxes to theAfrican countries where theygenerate revenues, deprivinggovernments of money theydesperately need fordevelopment, the anti-poverty group said in a report

Corporations deprive Africa of $11bn taxesyearly

on Africa.When leaders of the G7

major industrialisedcountries meet in Germanyon June 7-8 to discuss how tosupport economic growth inAfrica, a vital component oftheir talks should becomprehensive reform of theglobal tax system, Oxfam said.

“It’s absurd that there areinternational organisations fortrade, health and football butnot for tax,” OxfamInternational executive directorWinnie Byanyima said.

An international body similarto the World Trade

Organisation could representall countries’ interests andmediate disputes amongtaxation regimes, Oxfam said.

Oxfam based its calculation ofthe tax revenue Africa loses ona United Nations-backed studyreleased in April that estimated$50 billion in illicit funds flowout of the continent each year,much of it through corporatetrade mispricing to avoid taxesor in transfers of moneyobtained corruptly.

This is almost double theofficial development aid Africareceives each year.

n20.9bn agric fund for farmers in nigeria, 11 other nations

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