smuggled rice floods nigerian market, as merchants suffer losses

OCTOBER 7, , , , , 20132013201320132013

Smuggled rice fSmuggled rice fSmuggled rice fSmuggled rice fSmuggled rice floods Nigerian marloods Nigerian marloods Nigerian marloods Nigerian marloods Nigerian markkkkket,et,et,et,et,as meras meras meras meras merchants sufchants sufchants sufchants sufchants suffffffer losseser losseser losseser losseser losses

BY SUNNY IKHIOYA& GODWIN ORITSE

Rice, Nigeria's staple foodand most commonly eatendelicacy in parties, may not be

available on the tables of most Nigerianfamilies during the yuletide. This,according to Mrs Esther Olufumilayo,President, Rice Distributors Associationof Nigeria, is because importers have

stopped bringing rice into the countrysince the new tariff was introduced inJanuary 2013. The old tariff of 35 percent was okay and helped to check theactivities of rice smugglers to a reasonableextent, as the duty was almost at par withthat of Cotonou port. The governmentintroduced the new tariff regime toencourage local production and helpboost investors’ confidence in the riceindustry. The policy seems to havebackfired and helped to fuel smugglingactivities along the Nigeria-Benin

border. Although rice import by land isprohibited, almost all the brand varietiesin Lagos markets come in through landroutes.

Vanguard investigation revealed thatthree months to Christmas, there are novessels awaiting rice discharge at theports. This is an unusual situation andmay lead to scarcity during the embermonths. The resultant effect will be sky-rocketing of prices.

Official rice import has dropped as aresult of the new price regime, but the Continues on page 18

fact on ground according to Vanguardinvestigation is that smuggling of riceinto the country has become bigbusiness. The local production that it wasmeant to benefit cannot flourish, as theycannot compete with the prices ofsmuggled rice from the land borders.

Olufumilayo said for the policy to work,there must be effective policing ofNigerian borders.

A visit to the Seme border showed that

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 04 /10/2013

109.34 +0.34

103.90 +0.59

17,000 -170

2,584.00 -1.00

18.46 -0.06

DOLLAR 154.75 155.25 155.75STERLING 250.726 251.5361 252.3462EURO 209.2375 209.9135 210.5896FRANC 170.9189 171.4712 172.0234YEN 1.5865 1.5917 1.5968CFA 0.3008 0.3108 0.3208WAUA 237.0687 237.8346 238.6006RENMINBI 25.2727 25.3548 25.4369RIYAL 41.2645 41.3978 41.5311KRONA 28.0451 28.1357 28.2263SDR 237.696 238.464 239.232 *Contributory Pension Scheme: Chairman, Investment and Securities Tribunal, Ngozi Chianakwalam (left), discuss-

ing with Acting Director-General, National Pension Commission, Chinelo Anolu-Amazu during an interactive work-shop on contributory pension scheme in Abuja. Photo by Gbemiga Olamikan.

CMYK

Cover Story

18 — Vanguard, MONDAY, OCTOBER 7, 2013

WHO IS ANENTREPRENEUR?

There are manydiffering views on

what makes someone anentrepreneur and what anentrepreneurial venture is.The term itself is believedto have originated fromFrench, coined by aFrench economist, Jean-Baptiste Say, in about 1800,who defined anentrepreneur as “one whoundertakes an enterprise, especially a contractor,acting as intermediarybetween capital andlabour”. But it was firstdefined in English by theIrish economist RichardCantillon, as” a termapplied to the type ofpersonality who is willingto take upon herself orhimself a new venture orenterprise and accepts fullresponsibility for theoutcome”. The definitionof entrepreneur is notlimited, as various writersand world renownedentrepreneurs have givenit various meanings. Forinstance, one of the greatmotivational speakers andwriters of our time RobertKiyosaki, in his book“Retire Young, RetireRich” defined anentrepreneur as “someonethat sees an opportunity,puts together a team, andbuilds a business thatprofit from theopportunity”. As you canalready see, the wordentrepreneur isinexhaustible. Accordingto the Merriam-Websteronline an entrepreneur is“one who organizes,manages, and assumes therisks of a business orenterprise”. A moredetailed definition given byDaile Tucker, anentrepreneur herself, whoin her own words describesan entrepreneur as “aperson who has decidedto take control of hisfuture and become selfemployed whether bycreating his own uniquebusiness or working as amember of a team”.

Something that keepscoming up aboutentrepreneurs is theirability to see opportunities

The Basic Guide to StartingYour Business Part 5

and make the most of it, notminding the risks they willundertake. Entrepreneursare generally incompetition withthemselves and believethat success or failure lieswithin their personalcontrol or influence. So itis very important for you,when starting a business,to be sure that you canidentify opportunities,make the most of them andhave the wherewithal tothrive even in the midst ofrisks and unforeseencircumstances and that iswhy carrying out a selfanalysis cannot be overemphasized.

Entrepreneurs areleaders, prime movers,authors, pacesetters,investors and risk bearers.They are usually pioneerswho strategize andformulate the rules for thegeneral interest of theenterprise for others tofollow. An entrepreneurconceives an idea andbrings it to life throughsystematic and well-articulated planning,driven by the passion andthe need to achieveuncommon things. Anentrepreneur not onlyassumes responsibilityand the risk for a businessoperation with theexpectation of making aprofit, the entrepreneuralso generally decides onthe product, acquires thefacilities, and bringstogether the labour force,the capital and productionmaterials. Simply putentrepreneurs are peoplewho choose to see positivitywhere negativity abounds.Bear it in mind, however,that if a business succeeds,the entrepreneur reaps thereward of profits; on theother hand, if it fails, he orshe takes the loss.

S u c c e s s f u lentrepreneurs are notperfect people but arebrilliant, productive, andarticulate; it takes both theheart and the head tosuccessfully run anentrepreneurship. Alsonote that an entrepreneuris an inspirer, a motivator,a coach, a great listener,attentive, consistent andenthusiastic.

*General Manager, True Tales Publications, Ms Anne Omezi, First Lady of Lagos State, Mrs Abimbola Fashola and DeputyManaging Director, UBA, Mr Kennedy Uzoka, during theofficial launch of Hello Nigeria in Lagos.

Smuggled rice floodsSmuggled rice floodsSmuggled rice floodsSmuggled rice floodsSmuggled rice floodsNigerian market, asNigerian market, asNigerian market, asNigerian market, asNigerian market, asmermermermermerchants sufchants sufchants sufchants sufchants suffffffer losseser losseser losseser losseser lossessmugglers do not only bring inthe commodity in bits andpieces, but use the creeks toferry rice into Lagos. TheFederal Government in a moveto reduce rice importation intoNigeria jerked up the levy onrice from 20 per cent to 100 percent while the duty was peggedat 20 per cent.

Vanguard investigationshowed that a creek linking theBadagry and Igando areas ofLagos has become a hot spot forsmugglers as they load theirvehicles with several bags of riceand ferry them into Lagos.

Some brands of rice sightedby Vanguard include: UncleChef, Master Chef, Parro’t, andReve Gold. These brands, it wasgathered, are made in India.

A trader who refused to giveher name at the Iyana Eran areaof Lagos said that rice made inIndia are less expensive thanthose from Thailand.

She told Vanguard that thelatest brand of rice - Chief Chef- goes for N8,000, while the Thairice goes for between N9,000and N11,000.

At the Iyana Eran motor park,a major hub for smuggled rice,there is a large warehousewhere the commodity is re-bagged and re-packaged intosmaller sizes. Vanguardsighted at the warehouse inIyana-Eran motor park, printedbags of different brands ondisplay for smugglers to buyand re-package and re-brand.

Vanguard also gathered thatthe commodity is alsoadulterated and packaged inbags of other brands andbrought to the market, therebydeceiving the unsuspectingpublic.

Speaking to Vanguard on theban on rice through the landborders, the NationalCoordinator of TransborderTraders Association, AlhajiMikky Okunola, confirmed theimposition of a 100 per cent levyand additional 20 per cent duty

in order to discourage riceimportation and encouragelocal production.

Okunola, however, explainedthat the imposition of the levyand duty alone cannot boostlocal production of rice. Headded that a genuineintervention on the part ofgovernment in agriculture willboost local rice production thatwould feed the nation’spopulation. Some traders, whoalso spoke to Vanguard on thecondition of anonymity saidthat the rice business in theneighbouring countries isbooming, adding thatsmugglers are only takingadvantage of it to eke out aliving.

Nigeria's Rice BusinessIt has always been the same

story. Government introduces anoble and well intentionedpolicy, but when it comes toimplementation, it is fouled andmuddled up in such a mannerthat a few carpet baggersextend their millionaire andbillionaire status, while themajority of citizens are furtherimpoverished. It happened withthe fuel subsidy regime; it isnow happening in the riceindustry.

The government raised dutiesfor rice import from 35 per centto a range of 110-120 per centin the month of January 2013with a view to encouraging localproducers for industry growthand desired self-sufficiency forthe nation. It was also intendedto encourage investors in therice business. For this tosucceed, Nigerian borders mustbe secured from the activities ofsmugglers and local productionmust meet a significant part ofthe huge rice demand of thepopulace projected by USDAreport to reach 3.1 million tonsin 2013.

A few key players in theindustry - importers,distributors, retailers, analysts-are worried about government's

unpreparedness to see thispolicy through. Nine monthsinto the tariff increase, there ispalpable fear that manyNigerians may not be able toafford rice during the emberseason because from whatVanguard discovered onground; the policy of tariffincrease has totally back fired.

While the smugglers andborder security personnel aresmiling to the bank, majorNigerian key players in thebusiness are gnashing theirteeth. Nigerians are askingwhy well intentioned policiesfail? Is it due to sabotage, faultyplanning or ineffectiveness onthe part of those entrusted withexecution? Vanguard findingsrevealed the following:

Market:A visit to the following major

rice markets - Iddo, Daleko,Ketu, Mile 12, Alaba and SangoOta, revealed the variousbrands of rice on display wereimported. There was no traceof rice produced in Nigeria.

ImplicationThe statistics of Nigerian rice

production is different from whatis on ground. Our localproduction level is yet to makemeaningful impact

Apapa WharfAlso, a visit to Apapa Wharf

revealed that there are novessels carrying rice awaitingor discharging. It was the samesituation at the Tin Can IslandPort. If the two major ports arenot expecting rice, where willthe imported rice come from?Implication

Importers have stoppedbringing rice through thewharfs. On enquiry, it wasdiscovered that rice vessels arebeing diverted to Cotonou port,including those earlier destinedfor Lagos ports.

ImportersGenuine rice importers are

almost closing shops; theycannot compete with the pricesof smuggled rice. The few whotried it at the new rates couldnot sell their products. Some ofthem now buy from smugglersto stay afloat. A few of them likeGLOBAL and MILAN have leftthe country.

ImplicationJoblessness for many

Nigerians working in thesecompanies, including theirchain of transporters,distributors and retailers.

DistributorsThese are the link between the

importers and retailers. Theycannot get goods to sell becauseimporters are no more bringingin goods.The local riceproducers cannot meet theirdemand. In fact, the Presidentof Rice Distributors Associationof Nigeria, Mrs Olufumilayo,confirmed to Vanguard that thelocal producers have not evenestablished contact with them.

GovernmentThe tariff that is supposed to

be a revenue gain to thegovernment has now become

Continues from page 17

Continues on page 19

CMYK

Vanguard, MONDAY,OCTOBER 7, 2013 — 19

Cover StorySmuggled rice fSmuggled rice fSmuggled rice fSmuggled rice fSmuggled rice floods Nigerian marloods Nigerian marloods Nigerian marloods Nigerian marloods Nigerian markkkkket, as meret, as meret, as meret, as meret, as merchants sufchants sufchants sufchants sufchants suffffffer losseser losseser losseser losseser lossesrevenue loss. The governmentmay claim credit for low riceimportation, but the truesituation, as Vanguarddiscovered, is that most of therice coming into the country donot have Customs record becausethey are smuggled. They also arenot checked for quality standardsby agencies like NAFDAC andSON. The low import statisticsis not a sign of success of thetariff programme, but anincrease in smuggling activities.If all the various brands of ricein the market are foreign,genuine importers are notbringing in rice and landimportation is banned, wheredid all the rice in the market

come from?According to PRAN (Patriotic

Rice Association of Nigeria),quoted by Thisday Newspapersof May 24, 2013, “Lost revenuefrom imported rice from Cotonouamounts to N10 billion monthlybut the Nigerian CustomsService's figure is put at N27billion in four months…” We aretalking about the month of Mayhere; both quoted figures willtriple in the ember months.Implication

Government is losing revenueunnecessarily.

Local ProducersLocal rice is not in the markets

because at per unit cost ofproduction, they cannot competewith the smuggled rice.

Vanguard investigation revealedthat landing cost of Benue riceto Lagos is N17,000 and thisexcludes the cost of fine-tuningin form of separating the stones.Cotonou rice sells for betweenN9,000 and N10,000, how canthe local producers compete?Implication

A policy that is supposed toassist local production is nowhelping to kill it because of badimplementation.

The MassesAs usual, the masses will bear

the brunt. In the ember months,demand for rice will increase assmugglers cannot meet the hugedemand. Nigeria riceconsumption is estimated in theregion of 5.5 million metric tons.Genuine importers have

stopped importing; prices areheading for the top. The bordersecurity will have to be settled;they are happy, the Cotonouimporters are happy.

ConclusionFrom Vanguard investigation,

it is clear that the policy lackproper execution. The Ministryof Agriculture is making effortsto see positive growth in riceproduction but it had to be donein phases for it to be effective.Government must also factor inkey players like the DistributorsAssociation through whom therice gets to the desired markets.

From Vanguard's findings,rice has become a staple foodthat any adverse effect on thepopulace will generatesentiments akin to the fuel price

increase.Concerned Nigerians say that

it is important for those inauthority to introduce aneffective monitoring system onlocal rice production andconsumption. As it is now,official statistics on riceimportation cannot be reliedupon. Nigeria, they say, shouldnot be in a hurry to ban importor increase tariff to prove that weare working; we are only makinga few people rich.

Furthermore, they pointed outthat security agencies entrustedwith the task of securingNigerian borders have failed.This, in their opinion, is outrightsabotage and dereliction of duty.

Continues from page 18

In the last three months, local governments, states and federal governmentofficials have been at each others’ neck over short falls in revenueallocation from the federation account. The war of words is as a result of

panic by state governments that they may not be able to meet their obligations totheir workers if the federation account allocation continues to dwindle. The currentpanic stems from the fact that if the revenue shortfall from the federation allocation

Nigeria will survive without oil,can we please think?

committee to states falls belowsome levels, it will result inmany of the states not beingable to pay their employees.

On two occasions, membersof the committee from stateshave walked out on theMinister of State for Financeover the amount due forsharing. It is a shame that thecommittee members are notseeing the opportunity thatthe short-fall is offering themto think and act to remove theirstates from the shackles of oil.Before the discovery of oil,regions in the country hadeconomy. They survived basedon primary produce from thevarious regions. Nigeria willsurvive without oil. All that isrequired is for people to think.It is a sad story that thecommittee is not querying theFederal Government for notinvesting wisely, it is notasking for investment in theseveral minerals that dot thecountry, they simply bickerover sharing.

It is the sharing of cheap oilmoney that makes Nigerianpoliticians dummies, men andwomen who cannot think.They only wait to share. It issharing that makes ministerscome to office and leavewithout making any impact onthe economy. It is the same forpresidents and governors whopreside over a sharingformula and nothing else.Over the years they justbecome political bird ofpassage. It is the sharing ofoil money that is tearing thePDP apart. It is sharing thathas caused the sharp divisionin the country - North,South.If there was no oil revenue toshare at the centre, the fightover the zone to produce thenext president will not be a door die affair. It is a shame thatin the Nigerian politicalequation of today, none isthinking about how to make a

bigger cake for all to share.While the bickering over

sharing is on by cluelesspoliticians and their coexploiters, it is important forthe federal, state and localgovernment functionaries toput on their thinking caps andfashion out how to generateinternal revenue to sustaintheir operations. It will befoolhardy for government at alllevels to continue to rely andplan on proceeds from oilsales. For a very long time, thesignals have been showingthe simple fact that thiseconomy cannot continue torun on crude oil sales. Manyof the states whichcommissioners of financegather in Abuja to share fromthe federation account cannotgenerate up to N200 millionper annum. Localgovernments are worse. Somecannot generate even amillion naira a year. Yet, allgather in Abuja to share oilmoney.

Delta State has had for awhile, the slogan, Deltawithout oil. States and localgovernments that have caughtthe vision of a Nigeria withoutoil early enough, will use theresources at their disposalnow to develop the real sectorof their economy and a viabletax system to grow theirrevenue base. At the moment,states that cannot generateinternal revenue to meet atleast their recurrentexpenditure, will be in seriousfinancial crisis in the next fewyears. The federal situation isa little different in that it hasthe capacity to borrow. But thatin itself has its own limitations.

Now that there is still roomfor action, state and localgovernments must embark oninternal reforms that willenable them generate revenuethat will make them lessdependent on revenueallocation from the centre. Thebig problem here is that rightnow, federal, state and localgovernment revenue officialshave become mentally lazy. Infact, the nation’s leaders havebecome lazy all because ofcheap petrodollar that isconverted to naira. Theordinary Nigerian is a veryhard working person.Farmers, traders and marketwomen who have nothing todo with cheap oil money workhard for their daily living.

But oil money sharing hasenslaved governmentfunctionaries that all they doon daily basis is play theblame game. Instead ofgovernment officials creativelyengaging the people inpositive thinking andmotivating the citizenry intoproductive ventures, it is

accusation and counteraccusation.

For instance, states haveaccused the FederalGovernment of misinformationand mismanagementconcerning the federationaccounts, including the failureof the NNPC to remit awhopping N2.983 trillion intothe federation account in thelast two years. They see thelatest report on the federationaccount as a calculatedattempt to confuse the publicregarding the revenue accruedto the nation and give theimpression that thegovernment is under pressureto augment revenue shortfall,while in actual fact, theshortfall is as a result of poormanagement.

Specifically, while theMinister put the revenueearned in the month of July2013 at N497.98 billion, theCentral Bank of Nigeria(CBN) economic report for thesame period stated thatrevenue from oil rose by 0.2per cent to N645.65 billion,

while gross non-oil receipt(corporate taxes, custom andexcise duties and Customs'special duties) was put atN404.53 billion, a total ofN1090.18Bn revenue whichwas higher than the budgetestimate of N702.54 billionapproved by the NationalAssembly for July 2013,” thecommittee said.

The three tiers of governmentin the country have shared atotal of N718.103 billion asfederal allocation for themonth of June 2013. They hadshared N620, 656 billion asfederal allocation for themonth of May 2013. Abreakdown of the allocationshows that the FederalGovernment got N294.038billion (52.68%) as againstN235, 778 billion it got inMay; state governments gotN149.140 billion (26.72%)compared to the N119, 590billion they got in May whilelocal governments gotN114.981 billion (20.60%) asagainst N92.199 billion inMay. The oil-producing statesgot a total of N52.230 billionas 13 % derivation revenue forthe month of June comparedto the N48, 874 billion theyreceived last month.

The war of words is aboutsharing; Nigerians should letthe proposed nationaldialogue centre on Nigeriawithout oil, what is the wayforward? Let us think moreabout developing asustainable economy than howto share from a wasting assetwhose future is uncertain.


CMYK


Business & Economy

Nigeria, EU bilateral trade hits N8.4trnin 2012

The Minister ofTrade andInvestment, Mr.

Olusegun Aganga, hasstated that bilateral tradebetween Nigeria and theEuropean Union (EU)reached 40 billion euros(about N8.4 trillion)accounting for almost athird of Nigeria’s total tradewith the rest of the world.

Aganga who wasrepresented by Director ofLegal Services FederalMinistry of investment, UjuHassan Baba disclosed thisat the 2nd European Union(EU)-Nigeria BusinessForum: ‘ForgingPartnerships in Africa’sEconomic Powerhouse’held in Lagos yesterday,said that the EuropeanUnion’s stock ofInvestments in Nigeriaexceeds 30 billion euros.

Speaking further, theminister explained, “Wetherefore view ourrelationship with the EUas strategic and essentialto our national growth.

By HANNAH ISIBOR

Beyond trade, Europe hashistorically been the largestsource of foreign directinvestment into Nigeria. EUinterests in Nigeria cutacross a diverse range ofsectors including upstreamoil and gas,t e l e c o m m u n i c a t i o n s ,financial services, fastmoving consumer goods,

infrastructure among others.”Adding that as European

business exploreopportunities in the Nigeriaand regional market,government is addressingthree key pillars to attractinvestments and improvecompetitiveness in thecountry which includeensuring macro stability,

having competitivegovernance and regulations,and enhancing nation’sinfrastructure.

On the issue of macrostability, which forms thebedrock on which everythingelse is built, he said thatNigeria remains a strong andstable destination forinvestment for investments.Saying that themacroeconomic growth hasconsistently averaged 8 percent in the last 10 years asNigeria have one of thelowest debt to GDP rations inthe world and inflation issingle digits.

Also on the macro front, hesaid that to further promoteregional economic integrationwithin the West Africanregion, Nigeria has beenworking with its peers inECOWAS to actualize aCommon External Tariffregime (CET) next year.

Old Mutual to invest N9.2bn inNigeria, West, East Africa

BY PRINCEWILLEKWUJURU

Old MutualNigeria, asubsidiary of Old

Mutual Group, a SouthAfrican insurance firmengaged in the provision oflife and general insurancepolicies, said it is investingabout $600 million(N9,240,000,000) inNigeria, and in other partsof West and East Africaninsurance markets.

The firm disclosed thisthrough its Chief ExecutiveOfficer for West Africa,Offong Amah, at themaiden press briefing ofthe firm to announce itsarrival in Nigeria insurancesub-sector of the economysix months ago.

The CEO said thecompany ’s opening inNigeria is a critical part ofits expansion strategy inWest Africa.

Amah who said thecompany which completedthe acquisition of majoritystake of Oceanic life fromEcobank TransnationalIncorporated, ETI, said itwould be investing $600

million across East and WestAfrica of which Nigeria is acritical part of that expansionstrategy.

According to him: The rollout of old Mutual Nigeriaforms part of the strategicpriorities of the group in itsexpansion drive in West Africa

He went on to say that OldMutual Nigeria’s objective isto work wit existing insurancecompanies and the regulatorto broaden and deepen theinsurance market in Nigeria.“This we plan to do throughthe introduction of innovativeproducts, financial educationand reaching out to theunderserved and unservedsegment of the market.

A critical part of this, istackling the skepticism ofmany Nigerians regardinginsurance which we areaddressing through theprompt settlement of claimsand excellent service deliveryamongst others.” Ambah said.

He said further that OldMutual Nigeria would becombining local resources andskills at its disposal andleveraging off the Old MutualGroup capabilities andexperience around the world.

The CEO while affirming the

company’s commitment to itsgroup value said that it iscommitted to being a customercentric company whichoperates responsibly, providessolutions to address thesavings, protection andinvestment needs of itscustomers and is supportiveof the community in which itoperates by contributingpositively to its development.

AMfB builds team spirit withstaff tournament

To foster team spiritamong its staff,Accion Microfinance

Bank Limited, (AMfB) held itsmaiden edition of AnnualStaff Tournament.

Scrabble was selected forthe tournament with 16 teamsdrawn from the bank’s 19branches and Head Office.

Elimination stage saw theemergence of eight teams thatwill compete at the next stageholding on Saturday, October19, 2013.

In a statement made

BY PROVIDENCE OBUHavailable to Vanguard,signed by Mrs. OluwayemisiMafe, “the tournament isproposed as an annual eventgeared towards buildingteam-spirit among AMfB’semployees.

“This is premised on thebelief that team work fostersefficiency that builds healthycompetition.”

Meanwhile, AMfBincorporated in May 2006 tocarry on microfinance bankingbusiness, currently operatesfrom 19 branches spreadacross Lagos State and hasdisbursed loans well over N19billion and has a customerbase of over 100,000.

From left: Alhaji Umaru Kwairanga, Chairman, Ashaka Cement PLC; Mr Jean-ChristopheBarbant, Outgoing Country CEO, Lafarge Nigeria; Mr Guillaume Roux, Incoming CountryCEO, Lafarge Nigeria and Chief Olusegun Osunkeye, Chairman Lafarge WAPCO at the La-farge in Nigeria Country CEO's Turn Over Ceremony held in Lagos.

If the borders are not secured,this policy will not work.According to agric experts, itis important for the relevantauthorities to institute inquiriesand get guilty partiessanctioned where necessary.

They suggested that in theinterim, the duties on riceimport should be reverted to theold 35 per cent. At this level,activities of smugglers will haveminimal effects as the landingcost between Cotonou andLagos will be almost same.

They believe that it is stillearly correct these anomalies sothat the people can have apeaceful and stress-freeyuletide.

Mrs Esther Olufumilayois the President of Rice

Distributors Association ofNigeria and a key player in theNigerian rice industry, as wellas an importer and a majordistributor. We had thisinterview with her.

EXCERPTS:

What is the situation of therice business in Nigeria?

Rice is a common food eatenby everybody and if care is nottaken, there may be no rice byDecember.

WhyThis is because of high duty

and the activities of smugglers.Importers are losing as theycannot sell. If we are to followthe current duty, rice will costabout N16,000 per bag in themarket and the Cotonou ricesells at between N9,000 toN10,000. Some of us thatimported rice at the new ratecould not sell our products.

What then can be done?Our problem is the border.

Government cannot stop itbecause the people they put atthe border are fighting for theirown interest. Cotonou isgaining and Nigerians aresuffering. The actions havecaused so many job losses in thebusiness. Importers are closingshops and we are talking ofreducing employment. Again,what I can say is that enoughhomework has to be done bygovernment before suchdecision to increase tariff can betaken. From what we have seen,not enough home work hasbeen done. I am the presidentof Rice Distributors Associationof Nigeria and also, an importer,I have only been hearing aboutlocal production. Nobody hasconsulted with us on how thelocal production can come intothe market. In fact, we only hearabout them, we do not see them.

My solution for now is thatgovernment should revert tothe previous 35 percent. Thiswill minimise smugglingbecause the duty will almost beat par with that of Cotonou.

Continued from page 19

Interview

CMYK

CMYK

Vanguard, MONDAY, OCTOBER 7, 2013 — 21

Business & Economy

BRIEFSTwitter plansto raise $1bnin IPO

Commercial activitiesat Nigeria’spremier seaport - the

Apapa Port Complex - wereshut down last week byprotesting retirees of theNigeria Port Authority (NPA),whose services were severedin 2006 after the portconcession regime. Theformer NPA workers, whostaged a peaceful protest atApapa Port gate were said tohave been paid severancebenefits.

However, they claim thatthey were supposed to be alsoabsorbed in the authority’s

Protesting NPA retireesshut down Apapa port

pension scheme.Tensions are already going

high as some dock workersseek to enter the port for theirdaily job, saying the ex-NPAworkers cannot stop them fromdoing their own jobs.

However, the NigerianPolice are at the scene of eventwith squad of mobile policeofficers to ensure that peaceprevailed. The aggrievedpensioners had on

Wednesday threatened todisrupt port operations invarious ports formations in thecountry.

The National Chairman ofthe 2006\2007 retired staff ofthe agency, Mr Charles AyoBinitie, who addressed thenewsmen disclosed that themass protests will be total untilthe management of NPAadhere to their request.

He said that in Lagos Ports,

the pensioners will form ahuman barricade along theports access road in a bidto stop evacuation of cargofrom the port. Binities saidthe same action would bereplicated in Onne Port,Warri Port and CalabarPort. He declared that theywere denied their benefitsby the NPA managementthrough the PresidentialTask Force.

“For the purpose ofprosperity, what shall wetell our children and thoseto come? That we workedin NPA for 10 to 35 yearsand by the decision of aPresidential Task Force,we were denied ourpension” he lamented.

The pensioners said theyare entitled to pension forlife because they fallwithin the old pensionscheme, especially theFederal Governmentcircular of August 3, 2009.

‘We are demanding the10 percent gratuity andpension as compensationfor premature retirement.We are also demanding forone year salary ascompensation for thosedisengaged employees,who did not complete theminimum qualifyingperiod for gratuity andpension”, the pensionersdeclared.

They also said the NPAmanagement should paythem repatriationallowance as was done inthe case of 2008disengaged employees.

From left Louis Jordan, Chief Financial Officer, Old Mutual Nigerial; Mojisola Odanye, Commercial Director; OffongAmbah, Group Chief Executive and Keith Alford, MD/CEO during a media briefing by the executives of Old Mutual Insur-ance on the activities of the company.

‘Proposed NationalConference willaddress concernsin PIB, solidminerals’

Publish What You Pay(PWYP), an NGO,

has said that the proposedNational Conference mayhelp to address

Ms Faith Nwadishi,National Coordinator, PWYPand a member of the NationalStakeholder Working Groupof the Nigeria ExtractiveIndustry TransparencyInitiative (NEITI) said this inan interview with the NewsAgency of Nigeria (NAN) inAbuja.

President GoodluckJonathan had on Wednesdayannounced the setting up ofa committee to proposemodalities for the conveningof a National Conference.Nwadishi said the conferencewould provide opportunity forPetroleum ProducingCommunities and other stakeholders in the oil, gasand extractive industry tocontribute meaningfully to thepassage of PIB.

BY IFEYINWA OBI

Workers shutdown Costain West Africaover unpaid salary

Lagos- Protesting workersof Costain West Africa

PLC, a Nigeria-basedcompany engaged in thedevelopment of businesssolutions and technologieshave shut down theoperations of the companyover alleged unpaid salaries.

According to the aggrievedworkers, the management ofthe company has refused topay their salary arrears for thepast three to four months anddisplayed several placardswith inscriptions such as“Pay us our 38 monthspension and salary, fellowNigerians come to our aid toredeem the image of our dearcompany from kareemsfamily”.

Speaking, Mr Joseph ChikaNkwocha, one of the leadersof the protesting workerssaid: “The Management isowing us one gratuity that has

been calculated, pensionscheme deducted three andhalf years not remitted,retirees he has not paid adime, Union dues he gave abounced cheque to NUSAMUheadquarters Alimosho, taxhe did not pay.”

“The management indulgein the process of delaying oursalaries early last year andeven threatened withreduction of staff which waseventually averted aftermaking the Lagos based staffto sacrifice the deduction ofabout 15% (senior staff) and10% (junior staff) respectivelyfor about three months to keepour jobs . There after thesituation improved and theylater carried out the reductionin staff strength andsustained as the case maybeperiodically.”

“The situation worsened atthe beginning of 2013 whensalaries were delayed for threemonth without recourse thatstaff have children and wardsto send to schools or other

social essentials to meet uplike rents and medical bills.Since then, staffs of Costainhave had to beg and appealfor payment of their salariesfrom the management on amonthly basis and even seekassistance elsewhere to keepand maintain their parentalresponsibilities at home.”

“What is prevalent now isthat staffs of Costain lastreceived their salaries in themonth of August 2013 whichwas for May 2013 and havenot been considered for anypayment since then despiteappeals and meetings held byour respective NationalUnions to see progressive andmeaningful ways ofpreventing a breakdown inrelationship and also toprotect workers in Costain.Equally our colleagues whohave been retired on accountof age and staff reductionhave been unpaid theirgratuities for the past fouryears and still countingwithout news on when theirpayments will be redeemed.

BY KELECHI AZUBUIKE

Social networkingcompany Twitter has

said it plans to raise$1billion in its stock marketdebut in documents filedwith US regulators.

In the filing, revealed lastweek, the seven-year-oldcompany said that it nowhas 218 million monthlyusers and that 500 milliontweets are sent a day. Itmade a loss of $69 million inthe first six months of 2013,on revenues of $254 million.It will be the largest SiliconValley stock offering sinceFacebook’s listing in 2012.

Analysts said that theoffering was likely to get agood response. “Socialmedia is red hot,” saidInternet analyst Lou Kerner.“Twitter is front and centrebenefiting from marketenthusiasm for all thingssocial, and remarkablystrong metrics.”

The filing also revealedTwitter’s finances for the firsttime. While the company hasnever made a profit, itsrevenue has grown from just$28 million in 2010 to $317million by the end of 2012.

Around 85 percent ofTwitter ’s revenue last yearcame from ad sales; the restwas from licensing its data.The company takes in asignificant portion of its adrevenue from mobiledevices, an important metricoften tracked by analysts.


CMYK

BRIEFS

Banking & Finance

The Nigeria SovereignI n v e s t m e n t

Authority (NSIA) hasappointed Stanbic IBTC asthe local custodian of theNigerian Sovereign WealthFund (SWF) .Thisappointment was madefollowing a rigorousexercise by NSIA. StanbicIBTC’s experience and it’strack record of providingintegrated securitiesservices solutions form akey part of the reason forthis selection.

Stanbic IBTC’s role aslocal custodian of theSovereign Wealth Fund,which is the third largestSovereign Wealth Fund inSub-Saharan Africa,embraces safekeeping,settlement and otherrelated services for assetsin the region of $1 billion.Stanbic IBTC’sappointment willcomplement NSIA’sappointment of other fundmanagers for theSovereign Wealth Fund.

Mr. Segun Sanni, Headof Investor Services atStanbic IBTC, expressedhis delight at the

There are enoughresources in Nigeria

that would go round if welldistributed to Nigerians,Managing Director RwellsMedia, Mrs. Jibe Ologeh, hassaid.

Speaking at theIndependence Daycelebration, markingNigeria’s 53rd birthday,Ologeh made this positionknown , saying, equitabledistribution of resources doesnot make any citizen moreNigerian than the others.

She urged the leaders to goback to the drawing boardand implement policies thatwill engender fairness thatwill make the Nigerianpeople feel important andcared for. “ Give socialwelfare policies that willmake Nigerians proud of theircountry. A proper valueshould be placed on Nigerianby the leaders.

“That you are a politician ora President, Governor, Lawmaker or law enforcementagent, does not make youmore Nigerian than the otherpeople, we are all Nigerianwe should show respect forthe nation Nigeria by showingrespect to Nigerians asindividual and to one anotherso that there will be peace

“Those in authority and thecorridors of power shouldrespect the other Nigerians,ensuring that the resources ofthe nation get to everybody.If this happen, you will nothave people doing BokoHaram, Kidnapping andarmed robbery, let us cometogether and respect oneanother as Nigerians, makesure that the resources goesround to everybody in thiscountry, there is enough foreveryone in Nigeria we don’tneed to pay N10 million tosend our children to schoolabroad.”

Human effort critical to fighting poverty— World Bank

The World Bank hasa c k n o w l e d g e dthat human effort is

very critical in the fight toend poverty. The WorldBank stated that in the faceof social unrest, economiccrises, and more frequentnatural disasters,preparation and recoveryefforts by governments,communities, andindividuals have becomeincreasingly essential.

According to the WorldDevelopment Report 2014,titled - Risk andOpportunity: ManagingRisk for Development,adverse shocks - above allhealth, weather shocks, andeconomic crises - play amajor role in pushinghouseholds below thepoverty line and keepingthem there.

The report concludes thatmanaging risks responsiblyand effectively can savelives, avert economicdamages, preventdevelopment setbacks, andunleash opportunities. Riskmanagement can be a

powerful instrument fordevelopment, bringingsecurity and the means ofprogress to people indeveloping countries andbeyond.

Over the past 25 years, theworld has experienced rapid

integration, economic reform,technological modernization,and increased democraticparticipation, but has alsoendured financial turbulence,job and income loss, andenvironmental damage. TheWDR contends that, rather

than rejecting change inorder to avoid risk, peopleand institutions need toprepare for theopportunities and risks thataccompany change.

NSIA appoints Stanbic IBTC as custodian of SWFappointment.”We are deeplygratified by NSIA’sappointment of Stanbic IBTCas its domestic custodian.Thisis another strong validation ofour leadership position in theNigeria custody space andthe thoughts, efforts andresources we invest in

constantly pushing thefrontiers of the value we bringto our clients.”

Speaking further on theappointment, Mr. MarkKerns, Global Head of InvestorServices for Standard Bank,the parent company of Stanbic

IBTC, also commented onthe appointment of StanbicIBTC in Nigeria. “As localcustodians of the SovereignWealth Fund in Nigeria, wewelcome the opportunity towork with NSIA and its otherfinancial partners.

Equitabledistributions ofresources tocurb nation’swoes

BY PROVIDENCE OBUH

Stories ByPETER EGWUATU

THE Institute ofChartered Secretaries

and Administrators of Nigeria(ICSAN) will hold its 37th Conference betweenNovember 5 and 6 at theLagos Sheraton Hotel andTowers, Ikeja. According toICSAN’s Registrar/CEO, MrDele Togunde, theconference has as theme:“The Interplay of RiskManagement andCompliance Issues inCorporate Governance.”

ICSAN holdsconference Nov 5

Concerted promotion andprotection of Small and

Medium Enterprises (SMEs)through the establishment ofa solid framework supportedby clearly articulatedgovernment policy is the firststep in creating an activeSmall and Medium ScaleEnterprise SMEs sector thatcould spearhead the muchneeded revolution Nigeriaand indeed Africa urgentlyrequires in the area ofbuilding the next generationof African corporates.

This was a major submissionof the Managing Director/Chief Executive Officer ofHeritage Bank, Mr. IfieSekibo, who was a guestSpeaker at the 2nd US-AfricaTrade & Investment Forum/

Heritage Bank advocates solid frameworkto grow SMEs

Africa Investment &Development Awards whichtook place on 25th September2013 at St. Regis Hotel, NewYork, USA where he wasselected to speak as anauthority on “Small &Medium Enterprise Fundingin Africa - a banker ’sexperience”, on account ofwhat the organizers describedas the outstanding efforts ofthe new Heritage Bank in thearea of SME Banking inNigeria.

The Heritage Bankhelmsman observed that inSub-Saharan Africa, SMEs aremore credit-constrained andthis typically affects growthpossibilities as significantlylow number of start ups whoapply for financing actually

succeed. Studies, he noted,indicate that more than 70%of the SMEs lack access tom e d i u m - l o n g e r - t e r mfinance, creating an SMEfunding gap of more than$140 billion in Africa alone.

“Using Nigeria as a casestudy, between 2003 and2009, SME loans as apercentage of total credit,decreased from 7.45% to0.18%. Yet by 2012, Nigeriahad about 17.6 millionMSMEs employing about32.4 million people.Although it is generallyaccepted that SMEs enhancecompetition andentrepreneurship, and theirdevelopment has a positiveimpact on innovation andproductivity.

From left: Managing Director, Fidelity Bank Plc, Mr. Reginald Ihejiahi; Central Bank ofNigeria (CBN) Deputy Governor, Operations Directorate, Tunde Lemo and FCMB’s VicePresident and Group Head, Project & Structured Finance, Robert Grant, at the special forumon Financing the Power Sector Reforms for Economic Development, in Abuja over the weekend.

Vanguard, MONDAY, SEPTEMBER 30, 2013 — 23


BRIEFS

Corporate Finance

From left: Ifori Layague, Director, Governance Risk Compliance Service, PWC; Yetunde Oni,Head, Local Corporate & Client Coverage, Standard Chartered Bank; Cyril Azobu, Partner,PWC; Ebehijie Momoh, Head, SME Banking, West Africa, Standard Chartered Bank and CarolOyedeji, Regional Head, Consumer Banking, West Africa, Standard Chartered Bank, duringthe SME clients’ Financial Management Training organised by Standard Chartered Bank inpartnership with Price Waterhouse Coopers in Lagos.

Small and Medium ScaleEnterprises, SMEs, have

been enjoined to takeadvantage of advisoryservices being offered bycapital market operators togroom their businessespreparatory to listing on thestock market.

Alhaji Ola Yussuff, formerpresident, Association ofStockbroking Houses ofNigeria, ASHON, andManaging Director/CEO,Trust Yield Securities Limited,who made the call, blamedpoor representation ofcompanies in the sector on theNigerian Stock Exchange,NSE, on their reluctance topay the fees attached to theservices.

Yussuff said that instead ofshying away from this service,the owners of such businessesshould engage the services ofstockbrokers, who wouldmentor them on how tostructure their production andfinances for enhanced growth.

In his word, “Even if theycannot list now, a kind ofprogramme has beendesigned for them, amentoring programme,whereby if as an SME and thecompany cannot meet therequirement to be listed onthe second tier market, it canembrace the service ofstockbroking firm that willguide it on how to prepare itsbooks; how to articulate its

Stockbroker urges SMEs toleverage NSE advisoryservices for growthStories byNKIRUKA NNOROM

market and even on how toprotect itself. By the time thecompany does this for aperiod of two to three years,having been alreadymentored, it will be ready tomeet the requirements thatwill qualify it to be listed.

“The stockbrokers are notdoing this to enrichthemselves; they are moreparticular about therelationship with the hope

that such business will growtomorrow. But they charge atoken fee just to reflect theefforts they have put intonurturing such company.”

Continuing, he said, “Theprovision is there for the

SMEs to come and list. If youlook at the structure of theNigerian Stock Exchange, yousee that there is first andsecond tier markets. The

second tier is a way of sayingto SMEs, may be you mightnot be able to meet the sameentry requirements as UACand Unilever; therefore youcan take advantage of an entryrequirement that reflects theSMEs position. It is a way ofthem coming into the marketas a second tier company andas time goes by, they canmove into the first tier.”

“Apart from the structuralprovision that is made forthem, we also see that theSecurities and ExchangeCommission and thestockbrokers are all going out,trying to encourage all theseSMEs, trying to educate themon why they should embracethe capital market.”

It will be recalled that theNSE had earlier this yearlaunched the alternativesecurities market to cater forsmall and medium sizedcompanies. With ASEM,provision was made for SMEsto raise low cost, long termfunds from the capital marketwithout the usual difficultrequirement for access andpost listing. Anticipatingpossible challenges on theimplementation of the newprogramme, the Exchange hadselected qualified dealingmembers as DesignatedAdvisers. Consequently everycompany aspiring to list underASeM must have a DesignatedAdviser whose role will be toprovide professional guidanceto the company. T h eDesignated Advisers willensure that the companieslisted on ASeM comply with allthe requirements andobligations of the AlternativeSecurities Market.

Wema Bank Plc said itwill apply to the Central

Bank of Nigeria, CBN, for aNational Banking licencehaving exceeded the N40billion minimum requiredcapital of operating thebanking model.

The Managing Director/CEO, Mr. Segun Oloketuyi,who disclosed this, said that thebank will commence theprocess of securing the licencein the next few months.

The decision, according to astatement from the bankfollowed the successfulcompletion of its N40billionspecial placing andsubsequent allotment of sharesand approval by the Securitiesand Exchange Commission.

Kemi Aina, Head, Brands &Marketing, said with thisapproval, a total of 26.67 billionordinary shares of 50k each

Wema Bank set to upgrade tonational bank status*Raises N40bn tier 1 capital

valued at N40 billion wereallotted to successfulinstitutional and privateinvestors at N1.50k per sharein two tranches.

She stated that the additionalshares have raised bank’s paidup capital above the thresholdfor a National Banking Licence.

Speaking on the specialplacing process, Oloketuyithanked all stakeholders fortheir support towards ensuringthe success of the capital raisingdrive which began a couple ofmonths ago.

He further thankedshareholders and customersespecially, who kept faith withthe bank through the ongoingtransformation process andreiterated the Board andmanagement’s commitment toensuring that the bank regainsits pride of place in industrywithout compromising on

values and standards. ”With this development, the

shareholding structure of thebank remains diverse with nosingle investor having acontrolling shareholding in thebank. Over the past four years,Wema Bank has beensuccessfully repositionedagainst all odds by creating astrong platform for sustainablesuperior financial performancethrough quality personnel,better risk management andcorporate governanceprinciples, improved systemsand processes, and anenhanced capital base,” headded.

In its 2013 half-year results,the bank reported a half-yearprofit before tax of N481million, a validation of theefficacy of its repositioningprogramme, a trend expectedto be sustained into the future.

Global stocks, dollarfall as US shutdownenters third day

Major stock markets fellwhile the dollar

dropped to an eight-month lowon Thursday with no end insight to the budget fight inWashington that has shutdown the government for athird day.

Worries also grew about themore important battle over theU.S. debt ceiling in comingweeks, sending U.S. one-month Treasury bill rates totheir highest level sinceNovember. Failure to raise the$16.7 trillion borrowing limit byOctober 17 will lead to a U.S.default and roil global markets.

Market volatility could riseif the deadlock continues asconcern about the economicimpact mounts. GoldmanSachs estimated a short-termshutdown would slow U.S.economic growth by about 0.2percentage point, while aweeks-long disruption couldweigh more heavily - 0.4percentage point - asfurloughed workers scale backpersonal spending.

President Barack Obama metwith Republican andDemocratic leaders inCongress late Wednesday to tryto break the budget deadlockthat has shut down wide swathsof the government, but therewas no breakthrough and bothsides blamed each other.

Unilever plans newmanufacturingplant in Kenya

Anglo-Dutch consumergoods firm, Unilever said

it plans to invest 150 millioneuros ($203.9 million) in a newmanufacturing plant in Kenyathat will help it access the eastAfrican market.

Unilever ’s Global ChiefExecutive, Paul Polman, saidthe firm’s planned investmentwill cater for the company’sexpanding interests in theregion, including in Ethiopiaand Tanzania.

Polman met Kenya’sPresident Uhuru Kenyatta atState House Nairobi, as partof a visit to review hiscompany’s interests in thecountry and consultgovernment and businessleaders. He said his companyhas identified Kenya as one ofthe three strategic hubs inAfrica, alongside Nigeria andSouth Africa.

The London listed companyalready operates seven teafactories in Kenya’s north-riftdistrict of Kericho and it buysan estimated 30 percent of thecommodity from farmers. Teais the country ’s leadingforeign currency earner.


CMYK

26 —Vanguard, MONDAY,OCTOBER 7, 2013

CMYK


Business &Economy

From left: Cutting the ceremonial cake are Chief Doja Adowolu, Oba LamidiAdeyemi the Alaafin of Oyo, Iyalode Alaba Lawson, Mrs. Funsho Amosun,Ogun State First Lady, Oba Kehinde Olugbenle the Olu of Ilaro Olori Olugbenleand Ogun SSG, Barrister Taiwo Adeoluwa during the presentation of womanof Integrity award to Iyalode Alaba Lawson on his elevation as the 2nd NationalDeputy President of NACCIMA by Fortune Class Magazine.

Investors have beenassured of the safety

of their shares that arenot listed on theNigerian StockExchange, NSE as theNational Association ofSecurities Dealers(NASD) Over theCounter (OTC) marketplatform has beenpositioned to provideliquidity for investorsthat had invested inpublic entities that arenot listed on theExchange.

Also, 15 additionalstockbroking firms arebeing targeted to beregistered with theNASD Plc before the endof the year, 2013 to bringthe total number to 60.

Speaking to newsmenin Lagos over theprogress made so far byNASD since the marketwas launched in Julythis year, the ManagingDirector/Chief ExecutiveOfficer, NASD Plc, Mr.Bola Ajomale assuredinvestors of the safety oftheir shares being tradedon OTC market, saying“So far we have 45registered stockbrokerswith the market and weare hoping thatadditional 15 will joinbefore the end of theyear. Already 10 out ofthe 15 firms are expectedto join in few days time.We have also sixregistered securities andthere are two othercompanies that are in thepipeline to join and tradefreely in the platform.They are SwopTechnology and BGL Plc.

NASD assures investors ofsafety of shares at OTC market*Targets 60 stockbroking firms by Dec

By PETER EGWUATU Already, out of the sixsecurities that arealready registered in theplatform, three are activeand they are WAMCO,Food Concept and IGIInsurance.”

Continuing, Ajomalesaid, “The NASD OTCmarket is an alternativemarket to the NSE, henceshould not bemisconstrued to be anissuer market. The NASDOTC market is an investormarket and not an issuermarket. The companieswhose shares are beingtraded in NASD OTCmarket are not listed orquoted in the OTCplatform. So, any investorwho wants to sell itsshares at the OTC willdetermine the price it

wants the shares to besold: Similarly, aninvestor that wants to buywill also determine theprice it wants to buy aparticular share. So theprocess continues untilsellers and buys desiresare met at an equilibriumprice.” Whilecommenting on thestatistics of operators onthe NASD OTC market,Ajomale said, “We have17 Issuing Houses and10 are expected to joinbefore the end of the year2013. Though, it is not thefigures that matters butthe velocity of deals thatwe should be concernedwith. We are hopeful thatthe market will rise asinvestors become awareof its benefits.

The DirectorGeneral, Securities

and ExchangeCommission (SEC), Ms.Arunna Oteh, hasemphasized theenormous potential in thecapital market as afunding engine forinfrastructure projects .

Oteh, who spoke at the38th Annual Conferenceof the InternationalOrganisation ofSecurities Commissions(IOSCO) with theme“Connecting GlobalFinance” said, “ Thecapital market is anavenue for wealthcreation”

The SEC DG, who wasa panelists at theconference also observedamong others, the needfor jurisdictions to employ

Oteh urges govt to fund infrastructurethrough capital market

sound regulatoryframework as a majorsource of comparativeadvantage as investorsand issuers will beattracted to markets withquality regulation.

The opening ceremonyof the conferencefeatured a string of high-profile speakers withJean-Claude Juncker, thePrime Minister ofLuxembourg deliveringthe keynote address,while Jean Guill, DirectorGeneral of theCommission deSurveillance du SecteurFinancier (CSSF),Luxembourg, GregMedcraft, Chair of theIOSCO Board and DavidWright, IOSCO SecretaryGeneral, deliveredwelcome remarks.

Sept. 27 - Oct. 03 2013

CMYK

Vanguard, MONDAY, OCTOBER 7, 2013 — 2928 — Vanguard, MONDAY, OCTOBER 7, 2013

Interview Interview

Excerpts:

Sir, when you came up with theidea of cell phones for

farmers, not a few people criticisedthe idea but the idea seems to beworking. Could you tell us moreabout the Electronic Wallet (e-wallet)system and how it works?

The backbone of any agriculturalrevolution is access of farmers tomodern agricultural inputs, especiallyfertilisers and seeds. The old systemof government buying anddistributing fertilisers was verycorrupt as only 11 per cent of farmersgot the fertilisers. Rich and powerfulpolitical elites siphoned off thefertilisers belonging to poor farmers.Between 1980 and 2010, over N873billion was spent on fertilisersubsidies with only 11 per cent offarmers getting the fertilisers. Peoplewill sell sand to government and in alot of cases, nothing was supplied butthey got paid. So about N776 billionwas siphoned off the system throughcorruption, an average of N2.6 billionannually. It took us 90 days to endthat corruption just to let you knowhow serious the President is aboutdoing things right. We launched theGrowth Enhancement Scheme (GES)to provide subsidized inputs tofarmers. To reach them directly withseeds and fertilisers, we developedthe e-wallet system which allowsfarmers to receive subsidizedelectronic vouchers for their seeds andfertilisers on their mobile phones.Nigeria is the first in Africa andpossibly in the world, to develop thee-wallet system for targeting farmerswith subsidised farm inputs. We don’tneed any middleman. Last year, wereached 1.5m farmers and thatimpacted 7m persons. This year, wehave reached 3.7m farmers just thisseason and we still have the dryseason to go. We expect to exceed 5mfarmers and that will impact 25mpeople by the end of the season. Thee-wallet system has come to stay, thatis what the National Assemblymembers who were at the publichearing had to say. People are notselling sand to us anymore; if you sellsand to the farmers, you will feel ityourself.

What are your plans for thenorthern part of Nigeria in view ofits huge untapped agriculturalpotential?

We aim to unlock agriculturalpotential to drive economy—Akinwumi AdesinaBY EBELE ORAKPO

Since men have learnt to shoot without missing, Eneke the bird haslearnt to fly without perching. This seems to be the approach adoptedby Nigeria’s urbane Minister of Agriculture and Rural Development,

Dr. Akinwumi Adesina to tackle head-on the rot in the sector and transformagriculture into money-making venture. In this interview with Vanguard inAbuja, the minister speaks on the efforts of his ministry to ensure that Nigeriabecomes not only self-sufficient in food production but also a net exporter offood. He says they are making agriculture attractive to youths which willcurb rural-urban migration, tackle corruption and create jobs. Talk of killingmany birds with one stone!

When it comes to the issue ofagriculture, we have a huge

potential. Nigeria has 84m hectares ofarable land but only about 40 per centis cultivated today. If you look at thelevel of cultivation, may be no morethan 10 per cent of it is cultivated rightnow. We have two of the largest riversin Africa - Niger and Benue, and ifthere is anything that crops like, it iswater, we have about 263 billion cubicmetres of water so water is not ourproblem and we have cheap labour.We have land, water, rainfall andsunshine so Nigeria has no businessimporting food, Nigeria has thepotential to be a net food exporter.Potential land is there but nobody caneat land, we have to turn it into incomefor people. That was why when westarted, President Jonathan said;“Look, get agriculture right for me,”and we said we have to get agriculturedone as a full-time business. Whetheryou are a small, medium or large scalefarmer, if you produce what the marketwants, when the market needs it andat the price the market wants, youmake money. Gone are the days whenagriculture is some kind of backwater.Agriculture is the front and centre ofthe economy, a money-makingventure.

Let me talk about some of the cropswe have in the north.

Rice: Nigeria used to be the largestimporter of rice in the world. We havejust been overtaken by China.Whether gold or silver medal, we arenot proud of this. We embarked on amajor effort to extricate Nigeria fromdecades of dependency on riceimports. We set a target of being self-

twice the yield you get in the rainyseason.

Why is that?This is because diseases are much

lower and you don’t have insects, solarradiation is much better so your grainfilling is much better. The onlyproblem you are going to have is birdsbecause they have great view.

We went into dry season cultivationwith 267,000 farmers all using theirmobile phones to get seeds andfertilisers across 10 states in the north.They produced 1.1 million metric tonsof paddy rice; one third of the entirepaddy we need to be self-sufficient asa country. We did it in one single dryseason and we estimate N77 billion in

important; two states of Nigeria trading in whatis produced, processed and consumed inNigeria as opposed to buying it from India orThailand.

Fourteen large-scale integrated rice millswere established by the private sector in justtwo years, producing international qualitylong-grain parboiled rice, tastier and healthierthan the 15-year-old imported rice dumped onthe Nigerian market.

Cotton: Nigeria used to be the largestproducer of cotton in West Africa and behindus were Mali, Niger and Burkina Faso buttoday, these three countries are the largestproducers of cotton which I find totallyunacceptable. So we have started to revive thecotton system in the north. Last year, we gave1,596 metric tons of high-yielding cotton seedsfree of charge to about 38,000 farmers whichthey planted on 756,000 hectares of land in 10states across the north and they harvested240,000 metric tons of cotton.

What is BT cotton and how is it goingto improve Nigeria’s economy if deployed?

Science is everything in agriculture becausein agriculture, it is about increasingproductivity so that you reduce the amount ofland you are clearing. That is where you havesustainable productions in the system. If youryield is low, you will be cutting down trees togrow more cotton. With BT cotton, we don’tneed to. BT cotton is a technology that allowsyou to avoid spraying pesticides on your cottonand it is a genetic modification (GM)technology but it is based on just a particularbacterium called Bacillus thurigiensis (BT). Itproduces a toxin in the plant which has

insecticide action so the advantages of a BTcotton are; one, you are not spending moneyon chemicals, two, it improves the health ofthe farmers because they are no longerexposed to chemicals which causeheadaches, diarrhoea and all kinds ofpulmonary diseases. It also saves money ascost goes down because the profitability forthe farmer goes up; it is a biotechnology sowe are regulating the testing of thetechnology because you have to do riskmanagement and all that. I find it verystrange and unacceptable that Nigeria is theonly country that exports cotton that doesnot have BT technology so we decided tobring in BT cotton. We are testing it in thenorth and we are getting very good results.

Sorghum: Nigeria is the largest producerof food sorghum in the world (producesabout 9.3 million metric tons) and the US isthe largest producer of feed sorghum in theworld but the US produces millionaires whileNigeria generates poverty, why? The reasonis that we are not creating market for such;we are growing sorghum almost like asubsistence crop. We decided to change thatas part of the Agricultural TransformationAgenda. We set up a sorghumtransformation value chain from end to end,finding market for the sorghum and thenworking backwards to create the market forfarmers. The North-West and North-Eastzones produce 85 per cent of the sorghumin the country but the same areas have thehighest level of malnutrition and wastage.It doesn’t make sense and so we decided toturn sorghum into high income crop for

farmers. We worked with Dansa FoodsLimited and last week, theyannounced that they will be investing36 million euros (about $48 million)in a high energy food plant which willbe the largest energy food plant inAfrica. They will use the sorghum,maize and soybean to make highenergy foods. The World FoodProgramme which is world’s numberone UN agency for distributingemergency food, buys 98 per cent oftheir high energy food from Asia andwhen the food gets here, it is notappropriate, it is delayed, the qualityis poor and finally, they are not buyingfrom our farmers so they are notcreating markets here, they arecreating markets for farmers in Asiaand I asked them why when all youneed to produce high energy food issorghum, maize and soybean? Wehave that and we can grow more inthe northern guinea savannah ofNigeria. So I got them to agree thatthey will buy high energy foods fromNigeria if we can get the private sectorto set up a plant. We succeeded; wegot Dansa Foods to put in 36 millioneuros to do that. So that will allow thefarmers growing sorghum in theNorth-East and North-West to have bigmarket for their sorghum. We havereleased for these farmers new highbreed sorghum varieties which givethem about five times the yield theyare currently getting. Finding themarket was going to be a problem andthat was why we decided to get aprivate investor to do that.

Groundnut: Nigeria used to havegroundnut pyramids and then theydisappeared as a result of a diseasecalled rosette disease which wiped outour groundnuts because we did notpay attention to it and aflatoxin whichspoils the groundnut. I met with theEmir of Kano and I did say that wewill work to revive groundnut farmingin the north and we have started. Wesigned an agreement with theInternational Crops Research Institutefor the Semi-Arid Tropics (ICRISAT)based in India, world’s number onecentre for groundnuts, to help usintroduce new rosette-resistantvarieties and aflatoxin-tolerantvarieties and also technologies to dothat. So we are well on our way, weare targeting about 280,000 farmers inthe north.

Do you have plans for fruits andfresh produce export?

Nigeria has a huge potential forhorticulture. Nigeria is the largestproducer of pineapples in Africa ( over900,000 metric tons), South Africaproduces a little over 35,000 metrictons but we import pineapple juicefrom them. Nigeria is the secondlargest producer of citrus in the world,second only to China, but we importorange juice. We arethe largest producerof tomato, but weimport tomato paste.None of these thingsmake sense. We,therefore, started ana g g r e s s i v eprogramme toproduce and processhere, to add valuehere and do importsubstitution and it isworking. As I amspeaking to you now,Dansa Foods has putup $35 million to setup a tomatoprocessing plant inKano that willprocess the tomato

drip irrigation. Nigeriadoes not have problemwith water, it only hasproblem withmanaging water. Thisgovernment is doingquite a lot about dams.The Ministry of WaterResources has a veryactive plan to completea number of thesedams and also developdownstream irrigationinfrastructure to allowus to use the dams fora g r i c u l t u r a lproduction, we have aclose workingrelationship with theMinistry of WaterResources to further

exploit our water resourcesfor agriculture. We areworking together now in theBakolori Irrigation projectfor wheat production in thenorth. But at the end of theday, we need to learn fromthe experiences of India andPakistan where they usesmall scale pumps, washbowls and tube wells to getunderground water toirrigate the fields. That waswhat we did for the dryseason rice last year and itworked.

How much fish doesNigeria produce currently?

The total consumption offish in Nigeria is about 2.34million metric tons; weproduce about 780,000metric tons so we import thedifference of about a little bitover one million metric tons.But my position is that itdoes not make sense forNigeria which is blessedwith Atlantic Ocean, rivers,lakes, creeks and ponds, sowhat are we importing fishfor? Fish grows inside ofwater and we have thatwater so we decided thatover the next four years, weare going to be veryaggressive in pushing animport-substitution policy for

coming out of Kadawa valley whichtoday rots away. Secondly, they put inabout $40 million in Cross River Stateto put up a 6,000-hectare plantation forpineapples, and then they will processtwo kinds of pineapples - one for localconsumption and one for export.

They will produce juice so that we canbegin to drink our own pineapple juiceinstead of buying concentrate fromoutside. In Benue State, Teragro, asubsidiary of Transcorp has invested$6.5 million to set up a plant. They arebuying oranges from all over Benue andprocessing there. Also, East AfricanTrading Group (ETG), has come intoNigeria. They are going to invest up to$100 million in agriculture but they arestarting with about $10 million to builda plant that will process juice. Today, ifyou look at your orange juice, it isconcentrate mixed with water. The onlylocal content is water but we arechanging that.

What is your ministry doing aboutabandoned irrigation facilities?

In agriculture, water is important butwhat is most important is themanagement of water. How much grainare you getting per drop of water?Israel does not have dams but it is oneof the largest food producers in theworld because they manage water via

Nigeria to be self-sufficient in fishproduction. Of course there would besome fish that are not farmed fish thatpeople will want to import, that is ok.You can import because you have ataste for something but to depend onimported fish? I cannot accept it. Weare addressing the problem ofaquaculture which is the fastest wayof growing fish especially tilapia andcatfish.

We have an aquaculturevalue chain that is

encouraging massive production offish and our goal is to have two millionmetric tons of table fish which willreplace what we are currentlyimporting. We are also working toimprove our deep sea fishing. Today,foreigners come into our shores withbig trawlers and cart away all the fishand shrimps, and then process themand send them back to us. Yet, a lot ofour fishermen that have trawlers areout of business because of attacks bypirates on the sea so we are beginningto address that issue. The third one issmall scale fishermen. As agovernment, this country has neversupported fish farming. In the South-South, all they do is fishing so westarted this year to give what we callGrowth Enhancement Support whichis subsidy for those that are into fishfarming. We give them fingerlings, fishfeed and nets. We allow some of themthat are in cooperatives to get outboardengines for their boats. We areregistering the boats so we know whothey are and what they need. It is thefirst time ever that government willsupport fishermen in Nigeria. That isbecause I am concerned that we haveenough fish production to meet upwith our protein requirements but Iwant that done here to create jobs. Inthe South-South Cooperation with theChinese, they introduced a technologycalled Fish cage culture which allowsyou to put your cage right in themiddle of the pond. We are going tobe promoting a lot of that. In one of

Potential land isthere but nobodycan eat land, we

have to turn itinto income forpeople; that iswhy when we

started, PresidentJonathan said:

“Look, getagriculture right

for me

What is importantis not what is

under you; what isimportant is howyou unlock the

potential of what isunder you; it’s notthe number, it’s the

effectiveness,efficiency and

productivity thatmatters


,

,

,

,

*Dr. Akinwumi Adesina... Nobody drinks oil or smokes gas but everybody eats food..., we should beproducing and processing food for our 167m population

*Dr. Adesina...to reach farmers directly withseeds and fertilisers, we developed the e-walletsystem

sufficient in rice by2015 and we are wellon our way toachieving this goal.With vast amount ofirrigated land in thenorth, Mr. Presidentsupported us and gaveus funds to go and dodry season ricefarming, first time inhistory that theFederal Governmentwill do dry season riceproduction as a matterof policy. It made senseas far as I amconcerned becauseyou see, in the dryseason, you get almost

terms of gross valueadded into theeconomies of thosestates. In addition,the dry seasonfarming alone createdabout 466,000 farmjobs and some of thempermanent jobs. LagosState has a rice milland bought 17 trailerloads of paddy ricefrom Kebbi Statewhere we haveunleashed a ricerevolution. Lagosprocesses that into EkoRice and sell in Lagos.For me, that is


Interview

the areas they went to, thelocals said that the spirits inthe water did not allow themto do anything but theChinese set up their fish cageculture and transformed thevillage, so apparently, it is notthe spirits, it is just lazinessand lack of ideas.

What is your ministrydoing to encourage the youthto go into agriculture?

One of the things we starteddoing was to change themindset on agriculture,agriculture is a money-making venture. Nobodydrinks oil or smokes gas buteverybody eats food and sincewe have 167 million peoplewho live here and eat food,we should be producing andprocessing food for them. Westarted by telling them that itis a business and agricultureis not when you see a farmerwith a hoe or cutlass, no, thatis suffering. We are changingthat. Sometimes when we getused to a bad thing, you thinkit is normal.

That is why we are goinginto mechanised

agriculture. We areestablishing a total of 80agricultural entrepreneurialtraining centres across thecountry and we are givingthem a lot of tractors,combined harvesters etc. It isrun by the private sector butwe are supporting it becauseit will allow our farmers leaseequipment. In fact, for the firsttime, we are giving what iscalled Mechanised GrowthEnhancement which meansthe farmer gets alert on hisphone to go and rentequipment so it is one of theinnovations we brought in.Two, we are getting youngpeople into agriculture. Ayoung master’s degree holderleft Abuja for his village tostart cassava farming. In oneyear, he employed 65 peoplefull-time, he has become ayoung commercialagricultural entrepreneur.People are leaving the banksto go into agriculture becausethey see it as business. Banksthat were not lending toagriculture before are lendinga lot more now because theysee the opportunities. That iswhy the President launchedthe Youth Employment inAgriculture Programme tocreate a new generation ofyoung commercial farmersand agriculture entrepreneurs(Nagropreneurs) who willreplace the aging ones. Theprogramme will develop atotal of 760,000Nagropreneurs within fiveyears and this will createabout seven million jobsacross the agric value chain.The new millionaires ofNigeria will be in agriculture.

How is the ministry

partnering with researchinstitutes or are the high-yielding seeds imported?

All the research institutesand parastatal agencies areunder my ministry but youknow, what is important is notwhat is under you; what isimportant is how you unlockthe potential of what is underyou; it’s not the number, it’sthe effectiveness andefficiency and productivitythat matters. When I wasappointed minister, as agovernment, we put up a planto invest more in agriculturalresearch and you wouldexpect that will be the case,the President has a PhD inBiology so he is a scientist. Hesaid ‘look, we’ve got to domore in agricultural research.

At the start of the presentadministration, the

share of the agric budget thatwent into research was about8 per cent. In our first year,we increased it to 22 per cent,second year we increased itto 23 per cent and this year,it’s going to be about 23 percent because budget is stilltight but that is a big shift from8 per cent. That is because werecognised the importance ofresearch and I am thrilledwiith what our researchinstitutes have done with thelittle they have. CocoaResearch Institutes of Nigeriareleased eight cocoa hybridsfirst in the world to releasethose kinds of hybrids thatgive you yields five timeswhat farmers are getting.

The cocoa varieties maturein two and half years instead

of five years and the buttercontent is better. At theNational Root Crops ResearchInstitute, Umudike, theydeveloped a new variety ofcassava called Pro-Vitamin Acassava in partnership withIITA and Harvest-Plus. Thiswill allow people whoconsume a lot of starch to havevitamins in the products.

The Lake Chad ResearchInstitute, Maiduguri, hasreleased new varieties of

them more to real problems tobecome more relevant andsupportive.

On partnership with theBrazilian AgriculturalResearch Corporation,Embrapa:

Brazil is today world'snumber one in

poultry, beef and citrusproduction because ittransformed the savannaharea into a food basket andtheir savannah is worse thanthe northern guinea savannahof Nigeria. While they aremaking money, ours is full ofpoor people so we decided asa government that we mustborrow from Brazil and turnaround the northern guineasavannah of Nigeria. To dothat, we have to invest inresearch, market andinfrastructure. We broughtEmbrapa, BrazilianAgricultural ResearchCorporation which turnedagriculture around for Brazil.I went to Brazil and talkedwith them, they came hereand we have already set up apartnership arrangement totransform the northern guineasavannah of Nigeria.Agriculture in Nigeria has somuch potential but we needto invest properly to unlockthat. So we are going to workon what is pretty much anEconomic Marshall Plan fornorthern Nigeria because thatplan is based on agriculturaltransformation andindustrialisation just likeBrazil. We will be reformingour own agency called theAgricultural ResearchCouncil of Nigeria and all ofour research agencies to beaccountable to agriculturevalue chains. We will nolonger pay people to just sit

For some of our crops, it is ashigh as 40 – 45 per cent andthat is because in this country,we don’t have warehouses.My ministry has invested insilos. We have big silo capacityin the country which is verygood for us to be able to meetour storage requirements. Wehave today about 1.3 millionmetric tons of silo capacity andthat allows us to store food tomaintain our strategic grainreserves. However, to storegrain, maize, soybeans, fruitsand so on, you needwarehouses and we don’thave warehouses. So as aministry, we decided to investin warehouses. We arecurrently working on a planthat will install world classwarehouses in every localgovernment area of thiscountry; that will help farmersto reduce post-harvest losses.In the area of processing, weare currently designing whatis called Staple CropProcessing Zones, just likeyour export processing zonesexcept that this time, it is toset up clusters of foodmanufacturing plants aroundareas with high production.You don’t move raw materialsdown to Lagos, you move towhere the raw material is andprocess it there. The cost ofraw material will go down,production by farmers will goup, the market for farmers willbe there, the jobs will becreated and the ruraleconomy will grow and sothis staple crop processingzones that Mr. President hasdirected us to pursue is veryinnovative. The World Bank,African Development Bank,USAID and DFID have cometogether and said 'this isinnovative, we haven’t seenit done in any country.'Normally, you would set up aplan somewhere in Lagos andthen you will be roamingaround looking for rawmaterials but here, we arechanging that so this willallow us to create incentivesfor food manufacturing plants.Take the case of cassava inAgbadu, Kogi State whereCargill, world's largestmanufacturer of food, isinvesting in Agbadu, 15,000hectares. They are going to beprocessing cassava intostarch, starch into sweetenersto replace sugar. This willcreate markets for all thefarmers. In Kwara State, FlourMills of Nigeria inpartnership with UNILEVERand a local investor, areinvesting to process cassavato starch, starch to sorbitolused in making oral hygieneproducts so soon, the toothpaste you use will be comingout of cassava. That is howprocessing adds value andcreate market. That is whatwe do.

We aim to unlock agricultural potential to driveeconomy — Akinwumi Adesina

wheat which will give yieldsfive – six tons compared toless than one ton they weregetting in the 80s, all in thelast two years. Now we havethe potential to actuallyproduce wheat economicallynot politically. Our target is toreduce our wheat import byhalf within the next two –three years, taking advantageof the new varieties. So thefuture is bright for agriculturebut we need to fund theresearch institutes more. I ama scientist so I know the valueof research. We decided thatthey have to change theirapproach and become moredemand-driven as opposed tosupply-driven because peopledon’t eat publications, they eatfood. So we are connecting

around; they have toproduce, that allows us togrow the economy and that isthe direction we are going.

Nigeria spends so muchbringing in processed food,what is the ministry doing toassist and encourage farmersto go into food processingbecause when you go intoShoprite and others, you seethat most of the processedfoods are imported and thesethings can be processed here?

First and foremost, weneed to reduce post-

harvest losses because if youare going to process foods,you must be producingenough food and reducinglosses. As a country, our post-harvest losses are too high.

Continued from page 29

Gone are the days whenagriculture is some kind ofbackwater; agriculture is the frontand centre of the economy, amoney-making venture

,

,

*Adesina... if you look at your orange juice, the only localcontent is water but we are changing that.

CMYK


BRIEFS

Homes & Housing Finance

The Association ofHousing Corporations of

Nigeria, AHCN, has called forthe establishment of a HousingTrust fund (HTF) as one of theways of addressing theproblem of paucity of fundsmilitating against adequatedevelopment of affordablehousing in Nigeria.

This formed part of thesubmissions by stakeholdersgathered at the Association’sNational Workshop/AnnualGeneral Meeting recently heldin Owerri, Imo State. Thetheme of the two-day Workshopwas, “Effective HousingProvision in Post GlobalEconomic Meltdown”.

In his opening remarks at theevent, AHCN President, Dr.Ifenna Chukwujekwu, saidappropriate blending ofsustainable mortgage market,development of local buildingmaterials and effectiveimplementation of PublicPrivate Partnership in housingprovision is paramount tosolving housing crisis in thecountry. He questioned thecurrent contributory pensionfunds investment profilerestricting the investment ofabout N3 trillion worth ofpension funds into equities,government bonds and bankdeposits without provision forhousing development.“Workers need to retire to theirown houses after a successfulworking career services to thenation. Therefore, a pool oflong term funds easilyaccessible through the vastpension funds and the longterm requirement of mortgagefinancing would surelyenhance long term investmentin the mortgage sector,” hesaid.

In a communique issued at

Ogun, ChineseOgun, ChineseOgun, ChineseOgun, ChineseOgun, Chinesefirm to developfirm to developfirm to developfirm to developfirm to develop2,000 houses2,000 houses2,000 houses2,000 houses2,000 housesOgun State government

is set to collaborate witha Chinese constructioncompany, Citic Construction,to develop over 2,000 housingunits in the state.

According to a statement, theproject which is meant toexpand the scope of the state’saffordable housing and urbanrenewal programme, is beingsupported by the InternationalFinance Corporation and theSovereign Wealth FundInvestment Authority.

Country Manager, IFC, Mr.Solomon Adegbie-Quaynor,was quoted as saying that thepartnership would help todevelop mass housing,comprising “social housing,middle income housing andslightly higher than middleincome housing,” adding thatOgun is the first point of callwhere the feasibility studywould be done. He noted thatthe construction company incharge of the project had theability to build large units ofhouses, which could bepurchased through mortgagesafter assessing the demandand the ability of the buyer topay.Housing summit toHousing summit toHousing summit toHousing summit toHousing summit toaddressaddressaddressaddressaddressdevelopmentdevelopmentdevelopmentdevelopmentdevelopmentconstraintsconstraintsconstraintsconstraintsconstraintsStakeholders in the

building constructionindustry, including officials ofhousing corporations anddeveloping companies, are setto discuss issues relating tohousing development in thecountry.

The discussion will form amajor part of the 2nd NationalHousing Summit scheduled tohold in Abuja, with the theme,‘Constraints to housingdevelopment in Nigeria’. Astatement by the organisers,Faculty of Housing, NigerianInstitution of Estate Surveyorsand Valuers (NIESV), saidManaging Director, UACNProperty DevelopmentCompany Plc, Mr. HakeemOguniran, is expected tospeak on the sub-theme,‘Legal constraint to housingdevelopment in Nigeria’.Other speakers includePresident, Mortgage BankingAssociation of Nigeria(MBAN), Mr. Femi Johnson,and a past president ofNigerian Institution of EstateSurveyors and Valuers(NIESV), Mr. NwekeUmezuruike, who will speakon ‘Access to affordablehousing: A mirage?’ and ‘Theland factor in housingdevelopment in Nigeria’,respectively.

The Lagos Stategovernment has alerted

members of the public onactivities of fraudsters who areinviting unsuspectingLagosians to subscribe to theLagos State Home OwnershipMortgage Scheme (LagosHOMS) with the aim todefraud them.

A joint statement signed bythe State Attorney General, MrAde Ipaye, and Commissionerfor Housing, Mr Bosun Jeje,said that the fraudsters providefalse information purporting toemanate from government andrequest payment to certainbanks.

They noted that thefraudsters “have also sent outagents to sell printed forms toinnocent members of the public

Mortgage scheme: Lagos alerts onactivities of fraudsters

who seek allocation of flatsunder the Lagos HOMSprogramme”, adding that theinformation, invitation anddemands do not emanate fromthe state government. Theysaid the state is alreadytracking down the criminalelements with a view toprosecuting them.

The government, through thestatement, urged members ofthe public to report any personor persons making suchdemands to the nearest policestation or law enforcementagency, while assuring allcitizens that full details of theLagos HOMS programme willbe presented and widelypublicised at the appropriatetime.

On the modus operandi of

the fraudsters, thecommissioners said thecriminal elements directinterested individuals to visita particular website,requesting them to begin theirsubscription.

According to thecommissioners, the fraudstershave put in place falseinformation on the websitewhich was ascribed to theLagos State Government andalso requesting payment tosome banks. They said suchinformation should bedisregarded as they do notemanate from the government,promising that full details ofthe programme as well asmodalities for accessing theunits would be put into publicdomain at the appropriate time.

Housing: AHCN seeksestablishment of trust fund

Development of social housing

Stories byYINKA KOLAWOLE

the end of the workshop,signed by AHCN President,Chukwujekwu; and itsSecretary General, Mr. D.AHar-Yusuph, participants atthe workshop said theHousing Trust Fund could beused to harness untappedfunds lying fallow in pensionand insurance funds,unclaimed dividends and otherrelated instruments for thedevelopment of the real estatesector.

The stakeholders noted thatthe existing arrangements inthe country for funding ofhousing provision was grosslyinadequate, adding that thecreation of HTF would helpcomplement the NationalHousing Fund (NHF) to fasttrack housing development.

They identified Public PrivatePartnership (PPP), as averitable tool of qualitative,efficient and effective masshousing delivery in a globaleconomic recession, enjoiningthe three tiers of governmentto be proactive and takeadvantage of the PPP toincrease housing stock inNigeria. AHCN taskedgovernment at all levels to fullyexplore the PPP consent byproviding the enabling andconducive environment forprivate sector driven housingprovision. Participants at theworkshop also called forsustainable strategies thatwould increase the stock ofaffordable housing for thepeople. They listed other majorproblems of housing to include

lack of political will, lack ofcommitment to invest inhousing and lack of holisticapproach to housing matterleading to lack of finance, highcost of building materials andhigh infrastructuraldevelopment cost.

They also associated thechallenges of real estatedevelopment in Nigeria withcash-based (cash and carry)economy and outright salessyndrome. The communiquécalled for re-engineering of thenation’s mortgage system foreffective and liberal mortgageloans administration for homeacquisition for the people. Italso canvassed increasedfunding of the mortgagemarket through long termfinancing from local capitalmarket and external group.“The workshop notes theinherent advantages of RealEstate Investment Trusts(REITs) in creating masshousing delivery for the peopleall over the world and imploregovernment to fully developREITs market for expansion ofreal estate development inNigeria. It also notes theavailability of offshore fundingfor housing delivery and itsattendant challenges and callson government to support theirhousing agencies to providegovernment guarantee toaccess offshore funding forhousing development,” itadded.

The communiqué imploredall housing agencies in thecountry to explore the usage ofinstruments such as bond,stocks, mutual funds,insurance policies, Goldcertificates, corporateguarantee, which are acceptedby some lenders, to secureoffshore funding.

CMYK


CMYK


Micro- Finance

BRIEFThe ManagingDirector, FortisMicofinance Bank

Plc, Mr. Kunle Oketikun hascalled for more financialempowerment for Nigerians.This is following a breakdownof EFInA’s report, showingthat out of 84.7 millionNigerian adults and only 15.9million individuals in Nigeriaborrowed money in the last 12months and only 7.9 millionof individuals who borrowedmoney used it for businesspurposes. In this interviewwith PROVIDENCE OBUH,he said, “With about 900Microfinance Banks (MfBs) 22Commercial Banks, and otherfinancial institutions, there isa need for all stakeholders todo more and empower morepeople.”

How best would youmeasure the NigerianMicrofinance Industry?

In corporate Nigeria,officially, commercialmicrofinancing is under adecade and in comparisonwith what obtains in otherclimes where micro financinghas been practiced for overthree to four decades; it willonly be fair to saymicrofinancing in Nigeria isdoing well and will do muchbetter in the coming years.

The sector is graduallygaining momentum moreNigerians are beginning togain increased confidence inthe sector.

The Microfinance Sector hasdone well with over fourmillion accounts of which 57.3percent are male and 42.3percent are female.

According to recentstatistics, the sector hasdisbursed over N97 billion inrisk assets. In comparison towhere we are coming from,this is reasonably okay.

But if we are comparing withwhat it should be, it is a farcry as well over 67.2 percentof Nigerian adults summingup to 56.9 million are stillfinancially excluded as statedin EFInA latest Access toFinancial Services surveyreport in Nigeria.

Nigeria still lags behindSouth Africa, Kenya, Namibiaand a couple of others infinancial inclusion indicators.Generally, there is more to bedone.

A healthy Microfinancesector should trigger a

very active Micro, Small andMedium Scale Enterprisessector, the lifeblood of mostviable economies.

On the whole, microfinancebanks in Nigeria have activelyengaged a substantial numberof Nigeria’s population in thearea of financial literacy andaccess to finance. Throughfacilitation of group formationand lending more social skillsand interaction have been

MfBs needmore financialempowerment— Oketikun

BY PROVIDENCE OBUH

With over 70 per centpoor in Nigerians,

MOG has called onchurches to stand up to itsresponsibility to addresspoverty in nation’seconomy.

Speaking at the ChristianMinisters’ WelfareInitiatives (CMWI), alsoknown as Minister of God(MOG), President of thegroup, Apostle DanielAdebiyi said that thewelfare initiative was toenlighten minister of Godagainst the full timeMinistry as some claims.

According to Adebiyi,Pastor must have a job. Theybelieve that as a pastor youdon’t need to work but thisbrings poverty to some ofthem. 24 hours full timepastor leads to poverty.

There are concession andwe need to address it, howcan you because you are apastor you are not working.We want to align ourselveswith the governmentbecause bible says everyfood of the land is for all notfor a certain segment.

He added that theinitiative is a vision of twoyears with large network allover the country.

“The motive is to alleviatepoverty, we have 12 pointagenda, but we want toempower ourselves first,then we come to the politicalterrain.

A member of the initiative,Mr. Ayo Akintayo in hismessage identified 70percent Nigerians to bepoor, saying, “We need toshow integrity, and that isleadership, people are readyto follow you when theyknow you care in reachingout to the poor.

“We are not to allownuisance in position ofleadership, but people whofear God and that is how wecan alleviate poverty; wehave enough resources to goround in this country. Peopleat the top are earning high,changing furniture withinshort intervals, they shouldallow the resources goround.

“The money we shouldhave used in setting upindustries in the country, aretaken abroad, we need tostand up for our right,” hesaid.

,

,

'Church hasresponsibilityto care forthe poor'

imbued into the consciousnessof Nigerians at the base of theeconomic pyramid,particularly the women.

In this wise, the sector havenot only provided the supplyof financial access but are alsodoing some work in the areaof empowering the customersto be well informed on whatto demand for. If the currenttempo is sustained and a well-structured support on fundingand monitoring is maintainedby the apex regulatory bank,the sector will do better andwill add significant value toour economy.

In borrowing to the lowincome earners, how wouldyou rate the sector?

There is a strong correlationbetween financial access andpoverty alleviation. If we arelooking in terms of availablestatistics how many peoplethat have been affected, thenyou can aptly say that there ismuch room for improvement inthe activities of allstakeholders. Take forinstance, a further breakdownof EFInA report revealed thefollowing: out of 84.7 millionNigerian Adults only 15.9million individuals in Nigeriaborrowed money in the last 12months, only 7.9 million ofindividuals who borrowedmoney used it for businesspurposes. In the last 12months, Commercial Banksadvanced loans to only 5.6

percent with microfinancebanks advancing loans to only4.7 percent of the 84.7 millionNigerian Adults.

These figures show that weare collectively not doingenough with about 900Microfinance Banks (MfBs)

format. What difference do you

think the MSMEDF wouldbring to the sector?

The funds will enable moreNigerians have access tofunds at a more reasonablerate. One of the basic reasonswhy MfBs can notimmediately service moreNigerians is due to paucity offunds. The market is huge,largely untapped but thefunds available for the banksthat are MSME focused is verymeager. It is expected thatonce institutions begin toaccess the funds, there will bea substantial difference in theimpact that will be recorded onthe MSME and SME sectorsof the Nigerian economy.

Going forward fromIndependence what

should we expect from thesector

The Sector would have todo more in providing morechannels to create access tofinance, also, embrace mobilemoney and other forms ofelectronic payment to reachmore people. As it is at themoment, Kenya and SouthAfrica are doing well in thearea of mobile payment, but bythe time the microfinancesector in Nigeria embraces theuse of mobile channels indispensing their financialservices what they have inother climes will be smallerthan what we will have inNigeria because we have thepopulation advantage. Playersin the sector need to urgentlyup their game in the area ofcustomer education to ensurethey know precisely whatfinancial service to demandfor. Players also need to buildcapacity in other to know theright financial service tosupply customers in a way itwill impact them positively.

The midpoint betweencustomer education andcapacity building formicrofinance operators isproviding the appropriatefinancial service that willusher the hitherto excludedinto financial freedom whichis the basis for sustainedfinancial capability. It willenable operators to be able todemystify banking and to beable to bring banking servicesthat were thought to be for therich to the door step of thepoor.

We need to design productthat are customer centric, weneed to expand our reachthrough application oftechnology into our processesso that more Nigerians can beseamlessly serviced.

The regulators have toensure that the new MSMEfunds are disbursed througha secured framework that willalso make it accessible bymicrofinance institutions inNigeria.

22 Commercial Banks, andother financial institutions.There is a need for allstakeholders to do more. Wehave to empower morepeople, we have to give outmore loans, we have tosensitize more Nigerians andwe have to ensure they haveaccess to finance in a morecost effective and sustainable

If the currenttempo issustained and awell-structuredsupport onfunding andmonitoring ismaintained bythe apexregulatorybank, the sectorwill do betterand will addsignificantvalue to oureconomy

Oketikun, MD, Fortis MfB


Appointment and [email protected] 08033348923

National PensionC o m m i s s i o n ,PenCom, has

approved the appointment ofMrs. Helen Da-Souza as thesubstantive ManagingDirector/Chief ExecutiveOfficer, MDCEO of TrustfundPensions Plc.

The Board of TrustfundPensions Plc led by Dr. Mrs.Ngozi Olejeme had earlierconfirmed the appointment ofDa-Souza, the erstwhileActing MD/CEO as thesubstantive MD/CEO ofTrustfund Pensions Plcduring the company’s AnnualGeneral Meeting in July, 2013.

Da-Souza Joined TrustfundPensions Plc as Director,Finance and Administrationin 2010. She brought on boarda wealth of experiencegarnered over 27 yearshaving worked in AkintolaWilliams Deloitte from 1985 to2010.

She joined AkintolaWilliams Deloitte as a TraineeAccountant in 1985, and roseto the position of AssociateDirector in 2009, a position sheheld before joining TrustfundPensions Plc in 2010.

She attended the Universityof Nigeria Nsukka, where shebagged a B.Sc inAccountancy in 1984. She isalso an alumnus of theprestigious WhartonBusiness School, University ofPennsylvania, U.S.A.

She is an Associate memberof Institute of CharteredAccountants of Nigeria,ICAN, November 1988 andChartered Institute of

PenCom approves Da-Souza asTrustfund Pensions’ new CEO

Taxation, CITN, November2000.

Da-Souza has attended anddelivered papers at severalconferences at home andabroad on Taxation, andAccounting.

Speaking on herconfirmation, Da-Souzaexpressed appreciation to theBoard for the confidenceaccorded her leadership,saying assuming the positionof the MD of Trustfund hadadded the responsibility oftaking the organization toeven greater heights. “I feelvery excited and elated thatthis has happened. I promisethat with the support of themanagement team and the

board, this is just thebeginning of exciting times’.

A former Director of thecompany and DirectorGeneral of the NigeriaEmployers ConsultativeAssociation NECA, Mr.Olusegun Oshinowo, said theBoard could not have taken abetter decision than toconfirm Da-Souza, saying “herconfirmation has shown thatTrustfund is on the upwardswing since she came onboard’. She is competent,experienced and theperformance of the companyin these two years is anevidence of the quality shehas brought to theorganization.”

M A N A G I N GD i r e c t o r /

C h i e fE x e c u t i v e

Officer, MD/CEO StandardChartered Bank Nigeria, SCB,Mrs. Bola Adesola, has won thewinner of the OutstandingWoman in Business categoryat the African BusinessAwards, 2013.

The award category was forthe female candidate that hasshown initiative andexcellence in the workplaceand made a significancecontribution towards hercompany in terms of progressand growth.

Leading Africanbusinessmen Tony Elumeluand Edward Boateng wereamongst those that receivedaccolades at the AfricanBusiness Awards 2013.

The event organised byAfrican Business magazine,was held at the MandarinOriental New York recently.

The African BusinessAwards are organised byAfrican Business magazineand BusinessinAfrica Eventsand produced by IC Events.

The Awards preceded theAfrican Leadership Forum, agathering of African leaders todiscuss issues of leadershipwithin an African context.

Bola Adesola was appointedMD/ CEO of SCB NigeriaLimited in March 2011.

Prior to joining the bank, shewas an Executive Director inFirst Bank of Nigeria Plc whereshe was responsible for theCorporate Banking business,and managing the entirebusiness in the LagosDirectorate including retail,corporate and commercialbanking.

SCB CEOemergesoutstandingwoman inbusiness

Director -General ofthe NigerianInstitute of

Medical Research, NIMIR,Professor Innocent Ujah, hasbeen honoured with theAssociation of ProfessionalBodies of Nigeria, APBN,Award for ProfessionalExcellence, AAPE.

The award was given to himfor his contribution toprofessional excellence andfocused leadership to themedical profession and thenation at large..

Presenting the award,President of APBN, Bala BawaKaoje, said the objectives ofthe award was to recogniseprofessionals whodistinguished themselves invarious fields of specialisationand played key roles in thedevelopment of the nation.

According to him, theaward was also to celebrate

Centre; Professor Innocent Ujah, Director- General, Nigerian Institute of Medical Research,NIMR, his wife and President of APBN, Bala Bawa Kaoje during the presentation of the 2013APBN Award for Professional Excellence to the Director General last week in Lagos.

NIMR DG bags APBN award for professional excellenceprofessionalism, encouragepresent and future leaders toimbibe the spirit ofaccountability, integrity,excellence and other ethos ofprofessionalism expected innation building.

Responding, Ujah expressed

gratitude to the body forfounding him worthy of theaward.

Others honoured alongsidewith him at the well-attendedevent include; Hajia MaryamLadi Ibrahim, Immediate PastPresident of APBN, Mr. Nweke

Umezuruike, Director, MCNProperties & InvestmentCompany Limited, andJosiah Okoronkwo,Registrar/Chief Executive,Chartered Institute ofAdministration.

Director General ofNational Commission

of Museum and Monument,NCMM, Alhaji UsmanAbdallah, has received anaward of excellence from theFiscal Transparency andAccountability Initiation, FTAI.

Abdallah was honoured forperceived transparency in thecommission and prioritizingstaff’s welfare.

Presenting the award inAbuja, President of FTAI,Charles Edo, describedAbdallah as a man whobelieved in merit, “somebody

Abdallah gets award for transparencyyou do not need to havegodfather before you get whatyou deserved.”

He said NCMM under theDG’s administration wasgrowing stronger, making thecountry’s museums to be thebest in Africa. According tohim, “In the course of ourinteraction with thecommission, we discoveredcertain quality in the life of theDG, which we felt we shouldcommending him in our ownlittle way by presenting him theaward of excellent because hehas done very well and he

meant well for thiscommission.”

Receiving the award,Abdallah who dedicated theaward to the commission’sworkforce, noted that all hisachievements were madepossible by God. He assuredthat the commission wouldprovide necessary support forthe establishment of the AirForce Museum, noting that theestablishment of the Air ForceMuseum would afford peoplethe opportunity to see thedevelopment in the NigerianAir Force in the past severalyears.

•Helen Da-Souza

•Bola Adesola


“Many states have beenunable to pay salariesbecause for the past

three months , what is beinggiven to them is not enough.That is where the challengeof paying salaries is comingfrom…”, Governor EmmanuelUduaghan of Delta State,PUNCH, September 25, 2013.

Governor Uduaghan earnedmy respect during his firstterm when he boldly warnedhis people about preparing fora future Delta State withoutoil. It was almost sacrilegious.Who ever wanted tocontemplate such a futurewith so much oil still in theground to be lifted? Even theGovernors Commissioners,who clapped with gusto, wereskeptical about such aprospect. Nationally, theGovernor might as well havebeen talking to cows – for allthe attention he received.Nigerians have demonstratedthat if there is anything theydon’t want to think about, itis a future without oil –because it will require a vastamount of effort to build sucha future.

But, like it or not, two thingsare well known about thefuture. First, the future willalways come and it will alwaysbe different from today. Partof the future, about whichUduaghan warned us in 2007,is already here – six yearsafter he sounded the alarm.And it is beginning to lookunpleasant and frightening tothose who can peer into moreof the future. For the first time,since 1999, when Nigeria’scrude oil price started on anescalator, and volumes alsoclimbed steadily, bringingunprecedented wealth to thecountry, Nigeria can no longercount on rising aggregate oilrevenue. On the contrary, weare now faced with the realprospect of a decline in crudeoil income for 2014.

“We have met the enemyand they are ours”, Oliver H.Perry, 1785-1819.(VANGUARD BOOK OFQUOTATIONS p 48).

But, even “Prophet”

,,

Why state governments cannot payUduaghan, could not, in hiswildest imagination, haveassumed that Nigerianswould constitute the architectsof their own misfortune. Heprobably thought that theworld might need less crude;other nations could discovercrude oil in their backyardsand the nations of the MiddleEast which were facingembargoes would be allowedto join the crude market onceagain. All these had actuallyoccurred; but the mostimportant reason crude oilexports had becomeunreliable as a revenue sourcecan be captured in two words– “oil theft”. Never in thehistory of Nigeria, andperhaps any nation, not atwar, had so much of a nation’srevenue downfall beentraceable to criminal activitiesby its own people with the

untouchable. Unlike governments

elsewhere, which get goingwhen the going gets tough,the Federal government ofNigeria had simply adjustedto its impotence in the face ofrelentless assault by oilthieves.

Next to corruption isextravagant waste. GovernorUduaghan, understandably,ignored the culture ofprofligacy which haddeveloped in Nigeria since1999. “Fish rots from thehead” and the culture ofdeliberate waste starts fromthe Presidency and works itsway down to the LocalGovernment level. ThePresident of Nigeria has tenaircraft in his fleet of planes;the British Prime Minister hasnone; Presidents of nations,far richer than Nigeria have

a plane for his personal useas governor. Governor Suntaiof Taraba State, one of thepoorest states in Nigeria, notonly spent public funds to buya plane, he went and crashedit, then proceeded to spendeven more money to treathimself for being reckless.The excuse given by ourgovernors for their ridiculousexpenditure is mostlaughable.

When it comes to cars, eventhe most self-restrainedgovernor in Nigeria will makethe Swedish Head of Stateappear a pauper. Onegovernor has over seventy ofthe most expensive cars in hisfleet – each with a driverattached. They claim theyneed them for their jobs. But,most states in America arelarger than Nigerian statesand many have more than oneairport. No state in Nigeriahas more than one airport,except Lagos. So where intheir states are they headingfor in their planes?

The frequent visits of ourgovernors out of state, usuallyto Abuja, are totallyunconnected with thegovernance of their states.Instead, they are mostlyconcerned with their partypolitics. Apart from having noplanes to fly, Americangovernors will not dare travelat tax payers expense just toattend the meeting of theirpolitical parties. Added to thatinexcusable use of publicfunds is the amount of fundsthey spend when attendingpurely private functions. Letme draw attention to a veryrecent example.

The regrettable death of DrOlusegun Agagu, the formergovernor of Ondo State hadresulted in Federal Ministriesand State Governmentsspending huge sums of publicmoney to mourn him. Theneach state governor hadagain, either gone to Ibadanpersonally, with a largedelegation, or had sent manypeople to the event. This isnot an exception; it is the rule.Yet, compared to best

governance practiceseverywhere else, this is totallyuncalled for. In my ten yearsin the US, not once was onecent of public money on suchventures.

The number ofCommissioners and SpecialAdvisers each of themappoints could not possibly beconsidered by an Americangovernor and retain his job forlong. One governor, aprogressive for that matter,appointed over 1000 SpecialAssistants and was hailed bythe “progressive” media forthat fiscal lunacy; that is inaddition to over fifteenCommissioners. Yet, for allthe waste, there is very littleachievement to justify theexpenditure.

The prize for stupidity ingovernance, however, shouldbe claimed by the governorwho promised and started topay anybody over 70 years inhis state N10,000 per month– for nothing. Granted, manyadvanced countries operate awelfare system, but it is basedon the fact that millions oftheir people are employedand they can support the oldand unemployed. Thegovernor who wants to payidle old people governs oneof the poorest states inNigeria and unemploymentthere is very high. Yet, on thatshaky foundation he proposesto build a viable welfaresystem which is sustainable.We wait to see how that willwork now that revenue iscertain to decline andexpenses remain highbecause many of the samestates governed by peoplespending money like drunkensailors are also highlyindebted. Creditors willdeduct their money at source.

From now on, the states willbe hot for governors –especially those up for re-election in 2014. Unlessthings suddenly change forthe better, even the 2015elections have already beendecided.

V i s i t :www.delesobowale.com

no more than one. But,Jonathan has ten. When itcomes to cars, it is almostimpossible to count thenumber of cars which comeunder the Presidential fleet.UK Prime Minister has onlyfour. The governors of stateshave, without exception,copied the profligacy of thePresident. Like prodigal sons,which most of them are,including the progressives,they spend public funds inways that would scandaliseAmerican governors despitethe fact that we copied theconstitution of the UnitedStates. No Americangovernor, of any state, owns

government appearing to betotally helpless to check thetrend.

However, that is only partof the story. The otherreasons, again self-inflictedinclude incredible andunrelenting corruption at alllevels. From Customs toImmigration to FRSC, thegovernment loses billions ofnaira to criminals, in and outof government. The wealthyseldom pay their share of thetax – if at all. But, the “motherof all corruption is associatedwith crude oil export and fuelimports” – both under theMinistry of Petroleum; whoseMinister is apparently

They claim they need themfor their jobs. But, moststates in America are largerthan Nigerian states andmany have more than oneairport, No state in Nigeriahas more than one airport,except Lagos

Business & Economy

NECA’s Network ofE n t r e p r e n e u r i a l

Women (NNEW), is scheduleto hold its maiden NNEWpreneurship fair, come October9, 2013, titled“NNEWpreneurship Fair”.The theme of the Fair,“Financing your Business”,

NECA said that financingbusiness ha s become verysignificant for the Nigerianentrepreneur, who are facingchallenges of conducive

NECA set to hold women entrepreneurship fairBy ONOZURE DANIA access to finance their

businesses.The keynote speaker at the

occasion is Dr Mrs ObyEzekwesili, former Ministerfor solid Minerals, who is

expected to speak on the roleof entrepreneurs in Nationaldevelopment.

The one-day event will takeplace at the Lagos Chamber ofCommerce and Industry

(LCCI) Exhibition andConference Centre, Alausa,Lagos as another milestone andinitiative of NNEW toward theadvancement of sustainableentrepreneurship in Nigeria.

As the World BrandCongress, WBC, 2013

tagged “Sustainable Brands”comes up between October21st-23rd 2013 at Taj LandsEnd Mumbai, India, about 50brands from Nigeria acrossbanking, oil and gas amongother sectors have beennominated for an award for

50 Nigerian brands nominated for Mumbai awardthe event, reveals, the localrepresentative of WBC, Mrs.Kofo Olaosebikan revealed.

The WBC is strategicallypartnered by Chief MarketingOfficers, CMO, Council USAand Asia which together havecombined membershipstrength of over 6,500members who control more

than $350 billion inaggregated annualmarketing expenditures andrun complex, distributedmarketing and salesoperations worldwide.

Olaosebikan said thatNigeria will be representedat the World Brand Congress2013 in India where several

Nigerian brands have beennominated for prestigiousawards in various categories.

“We are delighted toannounce that Nigeria will berepresented at the WorldBrand Congress 2013 inIndia. Several Nigerianbrands have been nominatedfor prestigious awards invarious categories,” she said.


E- Commerce

Bankole Cardoso is theManaging Director ofone of Nigeria’s

fastest growing e-commercefirm; EasyTaxi while hiscolleague, MarekZmyslowski is the ManagingDirector, Jovago.com, anonline company specializedin hotel booking. In thisinteraction with JonahNwokpoku, they argue thatwith increasing challenges ofe-payments for onlinecompanies in Nigeria,strategic approach is requiredto stem the tide. Excerpts

What do you think isdriving the growth of e-commerce in Nigeria?

BankoleI think that the rapid

expansion of GSM, dataservices and Smartphonepenetration has providedNigerians with access to a lotmore information andcommerce. I think that thislifestyle change has resultedin a sophistication of tastes ofthe average Nigerianconsumer who is nowexposed to a wider variety ofworld-class products andservices. Two years ago,phone applications like theEasy Taxi app which enablespeople book for taxisconveniently from theirsmartphones, could not havesuccessfully operated.

MarekOne of the major growth

drivers of e-commerce inNigeria is the middle class.As internet access is rapidlybecoming common place, themiddle class is getting moretech-savvy and so is it’spurchasing power. Anotherstrong growth driver of e-commerce is the demand forhigh quality goods,innovative products, servicesand platforms such as onlinehotel booking platforms likeJovago.com and mobileapplications.

BankoleI would also say that the

democratization of theInternet has also provided anavenue for Nigerianentrepreneurs to leverage theglobal village online. Theyhave played an important rolein harnessing local talent toprovide unique solutions forconsumers such as paymenton delivery. Consequently,this has resulted in a quickand embedded uptake of e-services and e-commerce is noexception to this rule.

Giving your experience sofar in the industry, whatwould you say about thepayment system and whathas been your greatestchallenge?

Tackling e-payment challengesdemands holistic approach —Bankole

•Bankole Cardoso •Marek Zmyslowski

MarekThere are payments options

available to e-commerceclients- Pay on delivery, andonline payment with creditcards. However from myexperience, Nigerians preferthe payment on deliverysystem, an offshoot of the fearof potential internet fraud.With Jovago.com, our travelportal which allows clients tobook hotels all over the worldonline, most of the customersprefer to pay for the booking

space in the industry.Mobile payment solutions,

which are largely powered byour commercial banks andsome independent players,are springing up left, rightand center. More Nigerianshave debit cards, which theycan use to shop online andthere are some otherelectronic paymentalternatives. With awarenessand education (aided by theCBN’s Cashless policy) therehas been significant uptake.

are always being explored An online retailer, Kalahari

recently pulled out of Nigeriaciting payment challenges asreason; do you foresee othere-commerce operatorsclosing shops in the absenceof effective solutions to e-payment challenges in thecountry?

BankoleI highly doubt that this

would be the case. TheNigerian market that Kalaharioperated in is significantlydifferent from today’s e-commerce market. . Rightnow with the ubiquity of themobile phones andsignificantly cheaper andmore affordable Internetaccess across socio-economiclines in Nigeria, e-commerceis positioned for a morefavorable uptake. There isimmense potential in Nigeriaand I cannot imagine that anyinvestor would want to missout on it.

What do you think can bethe best approach to the e-payment challenges inNigeria?

MarekBuilidng trust for the brand

and its services is the firstnecessary step. Educatingcustomers about the comfort ofe-payment alongside buildingrational awareness of thethreats posed and how toovercome them is the second.This however cannot be donewithout a strong and reliablepayment operator.

BankoleI think we need a holistic

approach to tackle the e-payment challenges inNigeria so I cannot pick out asingle best approach. There’s a need to create

awareness of the ease andconvenience of e-paymentoptions and eradicateignorance. Consumers needincentives to try out e-payment options. Majorityof the time, a consumer’s firstexperience with a successfulend-to-end e-paymenttransaction is the mostcritical. The same can be saidof introducing ATM cards intothe banking system or evenGSM phone adoption. Thesewere new technologies thatpeople were once not familiarwith but a consumer’s firstpositive experience is all ittakes to convert them.

Lastly, I would say that theproduct must work! There isnothing more annoying,frustrating and in fact,harmful to your brand/productthan a botched attempt atproving its efficacy andusefulness.

Do you think pure-click e-

commerce companies pose areal competitive threat totraditional retailers i.e, brickand mortar companies?

MarekE-commerce definitely

redefines offline commerceand takes away a largeportion of its customer base,however it could neverreplace offline commercebecause they serve differentpurposes. For instance,sometimes you just fancygoing to a shopping mall byyourself and touching theactual products, talking to thesales representative inperson, e.t.c. Just like TVdidn’t kill the radio, e-commerce couldn’t kill offlinecommerce.

BankoleI am certain that they pose

a competitive threat totraditional retailers. Thecost-saving and synergiesenjoyed in the online spacecannot be beat! People shoponline because of theconvenience, choice andtimesaving it affords them. However, I foresee a futurewhere brick-and-mortar andonline stores work hand inhand to ensure the best andmost complete shoppingexperience for the customer.

upon arrival. However thatcreates additional risk of acustomer not showing up,which might pose as achallenge. This is whybuilding brand loyalty iscrucial to building sustainablebusiness.

BankoleTrust is a key component in

any system that entailsmonetary transactions. Thisis even more important in theNigerian ecosystem where theaverage Nigerian is largelyapprehensive of hisneighbour (in mattersconcerning money and otherfinances). However,Nigerians are quick to learnand are always on the questto improve – so this ispromising for the e-payments

Notwithstanding, Nigeriansare still most comfortable withthe cash-on-delivery option.

Talking about myexperience with my company,Easy Taxi is a new innovationthat provides a safe,convenient and free mediumbetween taxi drivers,operators and their clientele. By nature of the product,payment transactionsbetween clients and taxioperators are not handled onthe platform. So, paymenthas not provided a significantchallenge for us yet. Regardless, as pioneers inthe industry, Easy Taxi isconsistently innovating andfinding better ways to serveour customers and safer, moreconvenient payment options

,

,

I think that the rapidexpansion of GSM, dataservices and Smartphonepenetration has providedNigerians with access to a lotmore information andcommerce

I would saythat the productmust work! There isnothing moreannoying,frustrating andin fact, harmfulto your brand/product than abotched attemptat proving itsefficacy andusefulness

,

,

CMYK


Tax Matters

BY FRANK OBARO

The organizations making thepayments are required towithhold tax from such

payments and pay over the withheldamounts to their respective relevantTax Authorities within 30days ofreceipt of payment or credit by theperson or entity suffering the Tax.

The relevant tax authorities toreceive the WHT tax transactionsmade by companies is FIRS and forindividuals and unincorporatedbodies subject to Rules of Residenceis SIRS or FIRS.

PERSON LIABLE TO DEDUCTWITHHOLDING TAX

The payer of withholding tax inrespect of any of the activities coveredunder the withholding tax regimeshall include company (Corporate ornon-corporate), GovernmentMinistries and Department,Parastatals, Statutory bodies,Institutions and other establishedorganization approved for theoperations of Pay As you Earn System.

WHO IS TAXABLE ? All Persons, Companies etc.

who’s Incomes are liable to incometax, are subject to Withholding Tax.

? However, exempt entities likeEducational Institutions, GovernmentMinistries, Parastatals and otherAgencies of Government, are Agentsfor the collection of WHT. They arerequired to deduct WHT on anypayment made to a taxable body andremit same to the relevant taxauthority.

WITHHOLDING TAXIMPLICATION ON FOREIGNTRANSACTIONS

Non Resident Companies/Enterprises

The Revenue practice is that non-resident companies are notempowered to deduct anytype ofWHT. These categories of enterprisesare practically outside the regulatorymonitoring and control of the FIRS.It will be impracticable for Revenueoffice to inspect the accounting booksof these companies in order to confirmdue deduction and remittance of WHT.

Double Taxation Agreement (DTA)Transactions that are ordinarily not

liable to tax in Nigeria are not liableto WHT in Nigeria. Thus contracts andsupplies of goods and servicesperformed entirely outside Nigeria bynon-resident individuals are notliable to WHT. Nigeria has treatyagreements with about eight (8)countries and these countries aregranted a reduced rate of WHTdeduction, usually at 75% of thegenerally applicable WHT rate. 7.5%.These countries include UK, NorthernIreland, Canada, France, Belgium,the Netherlands, Pakistan, andRomania.

PERMANENT ESTABLISHMENT(PE) PRINCIPLE EXISTS UNDERNIGERIA TAXATION

The rules construe a PE where: ? The company has a “fixed

base” in Nigeria.

? The company operates inNigeria through a dependent agentauthorized to conclude contracts ordeliver goods on its behalf,

? The company is executing aturnkey project in Nigeria, or

? The operation between thecompany and its Nigeria affiliate doesnot appear to be at arm’s length.

? “Fixed base” implies somedegree of permanence and willinclude:

? Facilities, such as a factory,office, branch, mine, oil or gas well

? Activities, such as building,construction, assembly or installation

? Provision of services inconnection with the activities listedabove.

PRINCIPLES OF PERMANENTESTABLISHMENT

? The rules construe aPermanent Establishment where:

? The company has a “fixedbase” in Nigeria.

? The company operate inNigeria through a dependent agentauthorized to conclude contracts ordeliver goods on its behalf,

? The company is executing aturnkey project in Nigeria, or

? The operation between thecompany and its Nigeria affiliate doesnot appear to be at arm’s length.

“Fixed base” implies some degreeof permanence and will include:Facilities, such as a factory, office,branch, mine, oil or gas well Activities,such as building, construction,assembly or installation Provision ofservices in connection with theactivities listed above.

OTHER TYPES OF INCOME NOTLIABLE TO WHT

? Companies operating withinthe Free Trade Zones/ExportProcessing Zones

? Insurance premium ? Turnover/Income from

Dealership or Distributive trade ? Telephone Bills are not subject

to WHTAPPLICATION OF

WITHHOLDING TAXSections of CITA and PITA that

provides for the deduction ofwithholding tax at the applicable ratesbelow.

Types of payment Applicable rates

Companies IndividualDividends, Interest, Rent

10% 10%Directors Fees

10% 10%Royalties

15% 15%Commission, Consultation,

10% 5%Technical, Service Fees

Management fees10% 5%

Construction/Building Contracts5% 5%

Contracts, other than outright salesand purchase of goods in the

Administration ofwithholding tax (11)

ordinary course of business5% 5%

Returns & RemittanceTax Returns are filed monthly with

evidence of remittance and a detailedschedule of taxable transactions.

Submitted schedule should show thefollowing details:

Name of supplier AddressNature of Invoice payment Amount Rate @ Y% Tax

Service Date Date

? Returns for corporatesuppliers should be filed within 21days from end of month oftransactions.

? Returns for non –corporatesuppliers should be filed within 30days from end of month of transaction.

? In practice, tax returns arefiled in the same month they occur.

? Tax deducted should beremitted to the revenue in exchangefor a receipt of payment.

? Tax is payable in the currencyof the qualifying transaction.

Following payment and filing ofreturns, the revenue processes creditnotes for the suppliers on whoseincome tax was deducted.

? Credit notes can be used inapplying for tax credit against currentand future tax liabilities (i.e. where itis not final tax)

? Remittances are due to eitherfederal or state tax authorities.

Remittances due to Federal InlandRevenue Service (FIRS):

? Corporate entities,? Nonresident individuals,? Members of the armed forces

and police,? Resident of Abuja,? Foreign officers.Remittances due to state internal

revenue service (SIRS):? All other individuals /

partnerships resident in the state.? PAYMENT ON CURRENCYSection 64B of CITA empowers the

tax authority that withheld tax mustbe remitted to the tax authority in the

deducting organization. All withheldtaxes are forwarded to the taxauthority, which in turn records thecredit against the tax payer’s account,with a schedule containing details ofthe contract or service, on which basisthe tax authority issues a credit note.Assessed tax and related charges areusually entered as debits in thetaxpayer’s tax account, while he isexpected to pay only the differencebetween his assessed tax andwithholding tax credit at the time offiling their own returns.

? It is this credit note that ataxpayer uses as a set off against taxassessed within that year or ifunutilized within that year can beapplied based on the taxpayer requestto transfer the credit balance in thatyear to offset or reduce debit balanceof another year.

? In cases where there is anexcess charge of WHT on a taxpayer,the 2007 amendments to CITA (Section63 (7)) have even further empoweredFIRS to refund proven excesswithholding tax to any taxpayer within90 days of filing a claim.

OFFENCES AND PENALTIESOFFENCES ? Failure to withhold tax or ? Failure to remit or late

remittance of the tax withheld ? Non remittance of the tax

withheld within the time limitstipulated by the Revenue.

PENALTIES a. For CompaniesA fine of 200 percent of the tax not

withheld or withheld but not remitted,plus interest at the prevailingcommercial rate.

b. For Individuals & otherOrganizations

A fine of the higher of N5,000 or 10%of the amount of tax due, plus theamount of tax deductible , or withheldbut not remitted, plus interest at theprevailing commercial rate.

• Interest on Savings Accountof less than N50, 000 paid by a Bank,is not subject to WHT.

The WHT system has come to stay

currency in whichthe deduction wasmade. This meansthat transactionsmade in foreigncurrency are to beremitted in thesame currency andthat the tax sowithheld is to beremitted in thesame currency.Simultaneouslypenalty for defaultwould also becalculated in thesame currency.

? HOW TOC L A I MWITHHOLDINGTAX CREDIT(CREDIT NOTES)

A taxpayer fromwhom tax has beenwithheld isexpected to gainwithholding taxcredit notes fromthe relevant taxauthority via the

CMYK


Advertising, Media& Marketing

Let’s Think ServiceLet’s Think ServiceLet’s Think ServiceLet’s Think ServiceLet’s Think ServiceThe Customer Service Week (CSW) is here! You

probably know that the first full week in Octoberis celebrated as the Customer Service Week in anumber of countries. It’s a time to beam the spotlighton customer service issues and appreciate thosewho serve customers. Ever since the InternationalCustomer Service Association (ICSA) came up withthe idea of a customer service week, the celebrationhas gained acceptance across the globe. In 1992,the US Congress formally recognized it as a nationalcelebration.

I am not aware the customer service week hasgained any form of official recognition in ourcountry. But that doesn’t matter much. What mattersis that there is a dire need to focus on customersand the quality of service we render to them. Justas in most things, we have much to complain about,as far as service in our country is concerned.

Without talking politics, we realize that we all arecustomers to people in government and we cansafely say that the kind of service Nigerians receiveis simply appalling – hence our roads remain un-motorable, most of our public hospitals are worsethan mere consulting clinics, power supply remainsepileptic and no year goes by without any strikes.For the same reason, the National Assembly fails topass enough bills that address the needs of thepeople and our president doesn’t seem to be in ahurry to deliver service although his customers aretired of waiting!

We could go on and on. In a few months, anotherround of elections will come up and politicians willexpectedly make tongue-in-cheek promises,knowing that they don’t plan to keep many.Sometimes, I think that politicians also needcustomer service training! Perhaps they don’t reallysee us as customers although whenever they seekvotes they make mealy-mouthed references to“service” as their motivation.

At the risk of sounding simplistic, I dare say thatmost of the problems we face as a nation can betraced to a culture of poor service. Whether inbusiness or in government, many of us see serviceas something beneath us. Rather than serve, weseek to be served! For this reason, a localgovernment chairman expects other citizens to kow-tow to him. Some men of the uniformed servicesthink their starched clothes make them superior tothose whose money pays their salaries. And agovernor demonstrates his divine immunity fromtraffic jams by blaring sirens and terrorizinginnocent citizens whose tax and votes gave him theparaphernalia of his exalted office!

In the private sector, the story is just a little better.But, generally speaking, customers are not treatedwith the respect they deserve. Frontline peoplehave little or no power to resolve simple issues.Managers keep creating rules that make servingcustomers virtually impossible. Organisationsadvertise things they don’t do. Top officials thinkthey have outgrown service. Of course, there issome silver lining in the cloud (of poor service) butit looks so thin that you sometimes need to strainyour eyes to notice it.

As we celebrate the customer service week, let’sfocus our thoughts and energy on serving customersbetter. Whoever you are, whatever you do, whetheryou are in the public or private sector, spare athought for your customers. How can you servethem better? How can you make life easier for them?How can you support those who serve if you arenot on the frontline? What can you do to motivateyour colleagues?

Share your storyHave you received exceptional customer service

anywhere in Nigeria? Can you share your story inabout 100 words? As we celebrate the CSW, I inviteyou to share the story of great customer service youhave received in Nigeria. The best 10 stories (inmy estimation) will be published in this column tomotivate our readers and show that great service ispossible here. For their effort, the writers of theselected stories will each receive an autographedcopy of either How to Serve & Keep Your Customersor 20 Universal Laws of Service Excellence. Startwriting now. Email your story to:[email protected]. Story submissionends on Friday. Happy Customer Service Week!

Mr. Seni Adetu (4th from left), Managing Director/CEO Guinness NigeriaPlc, with the 2013 Diageo Africa Business Reporting Awards (DABRA)finalists from Nigeria at the recently concluded award ceremony held inLondon recently.

It’s instructive whenbusinesses want to

guarantee long-term successthey must ensure the successof their operating environment.Diageo, represented byGuinness Nigeria, is acompany that seems to take itsrole in adding value to thesociety seriously.

The company has shown tobe a responsible member of thesociety, but this should not besurprising considering theroots of Guinness itself. ArthurGuinness started brewing stoutlager in 1759 at St. James’ Gatebrewery. Guinness, who was aProtestant, went on to set upsome of the most impactfulcommunity outreach andwelfare programmes in thehistory of Ireland thatcontinued for many years afterhis death. It was recorded thatby 1900, Guinness’ brewerywas operating unparalleledwelfare schemes for its 5,000employees and by 1907 thewelfare schemes were costingthe brewery £40,000 a year,which was one fifth of the totalwage bill at the time.

Diageo, the British companywhich took over Guinnessseems to have bitten the bugand have an uncommon andunwavering pledge to servingsociety at large that speaks tothe very values upon whichGuinness built his legacy.

It is against this backgroundthat the company initiated thewriting awards focusing onAfrica, which has gainedground across the world as theDiageo Africa BusinessReporting Awards (DABRA).These Awards have put 10years into rewarding excellentbusiness reporting, focusing onAfrica while drawing globalattention to a region hithertoneglected for not so clear

DABRA: Rewarding excellencein business reportingStories byPRINCEWILL EKWUJURU

Consumer right protection imperativefor healthy society, says expert

reasons, not excludingprejudice cultivated in theminds of prospective investorsby negative reporting of social,cultural and economic activitiestherein.

It is difficult to place numberson the volume of investmentthat has been drawn to Africafrom the Diaspora as a resultof these Awards, but what iscertain is that the DABRAbeams positive light on theAfrican continent with theAwards ceremony holdingannually in London. TheAwards ceremony is always acelebration of Africa and theunique values thatinternational investors can

derive by setting their sights on thecontinent.

It has continued to attract the elite,influencers and investors. For instancethe first DABRA Awards were presentedon 16 July 2004 at the CommonwealthSecretariat in London. This maidenedition attracted a colourful and diverseaudience of over 100 guests, includingMPs, business leaders, ambassadors andjournalists. This unique global audiencewas treated to a flavour of African musicon the occasion as entertainment wasprovided by Seckou Keita, a kora playerfrom Mali.

The Awards buttress the impact theprivate sector can have in drivinginvestment to Africa and helping hermeet the Millennium DevelopmentGoals.

The best ways to betterthe lives of Nigerians is

to protect their rights againstincessant abuses bymanufacturers of goods andservice providers, a consumerright activist, Mr. MosesIgbrude has said.

Moses, who is the chairman ofConsumer Rights AwarenessAdvancement and Advocacy Initiative,CRAAAI, who spoke to journalists inLagos on lack of proper attention to issuesconcerning the way consumers aretreated by players in various sectors ofthe economy.

He described Nigeria as one of the fewcountries of the world wherestakeholders pay lip service to cases offake and adulterated products and poorservice delivery.

However, the activist commended theConsumer Protection Council (CPC) andother relevant regulatory agencies likethe Standards Organisation of Nigeria(SON), and the National Agency forFood and Drug Administration andControl (NAFDAC), which he said, aretrying their best to protect consumerrights. “It is sad that after decades ofindependent, consumers in this part ofthe world are still in bondage. FromAviation sector to banking and food andbeverages, cases of abuse of consumerright are daily making the headlines ofthe newspapers and the perpetrators aregetting away with it.

Lafarge, others take homeSERA's statuettes

The prized statuette forthe winner of the Most

Socially Responsible Companyin Nigeria 2013 was takenhome by Lafarge Cement inaddition to the statuette forDesign for Sustainability whichrepresented the SERAs 2013thematic focus.

The theme of the SERAs2013focused attention on designand innovation forsustainability - “Shaping theFuture Through InnovativeValue Creation: Making aWorld of Difference”

The 7th Annual the SERAswas celebrated in Lagos,recently saw the executivegovernors of the State of Osun,Ogbeni Rauf Aregbesola; andKatsina State, Dr. IbrahimShema received recognitionawards at the SERAs 2013 forstrides achieved in theirrespective states in the areasof educational andinfrastructural development.

The awards to the governorswas presented by HonourableJohn Owan-Enoh, who chairedthe occasion.

CMYK


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

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

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

O U R T E A M

Any patron of Bureau deChange may find that a

difference of about N10 perdollar now exists between theofficial rates of N155 per dollarex-Central Bank, and aboutN165/dollar in the openmarket. This is in place of thepermitted 1 per cent markupofficially allowed to commercialbanks on dollar purchases ex-CBN.

According to the CBN,commercial banks have takenadvantage of the wider gap inforex rates to roundtrip dollarsearlier purchased from CBN’sforex auctions with large-scaledollar importation, for onwardsale to Bureaux De Change(BDCs) and customers. Surprisingly, despite seriousimplications of such odiouspractice on the economy, nobank has so far suffered anyserious sanction.

In an attempt to puncture thebloated demand for dollars,CBN, last week, rolled out aseries of measures, whichincluded withdrawal of theoperating licences of about 20BDCs for purchasing andselling huge sums of dollars,without appropriatedocumentation, against CBNguidelines; furthermore,commercial banks willhenceforth only be allowed toimport foreign cash after priorCBN consideration andapproval.

Paradoxically, in order tocurb dollar demand, CBN alsoraised the existing limit ofUS$40,000 to US$150,000 perannum for holders of nairadebit and credit cards. Question is, how manyNigerians earn this kind ofmoney, and how much tax dothey pay? Nonetheless, CBN’slatest requirement thatrecipients of foreign exchangemoney transfers (i.e. ex-Western Union, etc) shallhenceforth be paid in naira, may

Guess who is dollarisingthe economy

,

,

actually, drive the bulk of suchremittances back into the ‘blackmarket’, which offers betterexchange rates.

Similarly, CBN’s reductionof BDCs’ maximum weeklypurchase from $1,000,000 to“mere” $250,000, in spite ofrising demand, might actuallyfurther reduce dollar supplyand instigate naira exchangerate well above N165=$1. Curiously, however, in August2011, CBN management hadapproved the removal of thelimit of $1m/week sales to BDCsas part of the measures to“sustain and ensure exchangerate stability”. Ironically,conversely, the slap-on-the-wrist penalty for thoseapprehended for smugglingmillion of foreign currenciesfrom Nigeria remains thesimple forfeiture of 10 per centof the foreign exchange valueto government.

In addition to the latestmeasures, CBN has alsoabolished the Wholesale DutchAuction System (WDAS),under which banks couldspeculate, buy and hoardforeign exchange purchasedfrom CBN, for onward sales tocustomers and importers;consequently, the Retail DutchAuction System (RDAS) hasbeen reintroduced, so thatbanks would now onlypurchase foreign exchange asper the specific demand of theircustomers. Incidentally, thefailure of this same reinstatedRDAS, in the past, led to itssubstitution with WDAS, whichis now again being replaced bythe earlier discarded RDAS. See our article titled “WDAS:

Why is CBN FoolingNigerians?” published in 2006,at http://www.lesleba.com/wdas.doc.

It is noteworthy that severalforex market systems, such

as FEM, IFEM or AFEM,DAS, were also adopted in thepast, but regrettably, just likeRDAS and WDAS, they allfailed to forestall extensivedollar hoarding and round-tripping! Consequently, thislatest reintroduction of RDAS

is retrogressive and akin to adog returning to its vomit.

In reality, the forex marketstructures failed because CBNconsciously ignored the otherside of the equation relating tothe supply of naira, because,as earlier indicated, whenincreasing cash sums chaseany commodity whose supplyis sticky, the price of thatcommodity will invariably rise. In other words, whenevernaira supply increases relativeto available dollars, we canexpect that the price of dollarswill rise with increasedpatronage.

So, any realistic andsustainable solution to theconsequences of abeleaguered naira mustrecognize the origin ofunceasing excess naira orexcess liquidity in the market.

Every month, against the grainof wisdom, CBN religiously,borrows about N300bn excesscash from the money market atoppressive interest rates inorder to reduce perceivedexcess naira from our moneymarket.

Sadly, despite CBNGovernor ’s belated“confession” of “inadvertently”sustaining the practice ofborrowing back governmentfunds in such transactions,Nigerians are not bothered by

the reality that suchhumongous public debts areultimately not applied toinfrastructural enhancement orimprovement in social welfareof Nigerians.

Although the CBN and itssurrogate parastatals such asAsset ManagementCorporation of Nigeria andDebt Management Officewould swear that the perceivedexcessive spending of the threetiers of government isresponsible for the unendingexcess cash in the system, thetruth, of course, remains clear,that the unending scourge ofsystemic excess naira is theresult of the ability ofcommercial banks to leveragemultiple folds on the freshinflow of hundreds of billionsof naira, which CBNsubstitutes for federation dollar

revenue in monthly allocationsto the three tiers ofgovernment. Surely, the CBNcannot sincerely contest thisreality.

Conversely, if dollarrevenue allocations are paidwith dollar certificates, we willimmediately find that thedestabilising problem ofuseless and excess naira in thesystem and accumulation ofavoidable public debts willbecome a thing of the past, asthe curse of systemic nairaflush with minimalimprovement to societal welfarewill disappear from ourmonetary predicament. Theartificial lopsided equationbetween naira and dollarsupply will begin to beredressed in favour of the localcurrency.

A stronger naira will shiftmarket preference from thedollar and reduce thepropensity for roundtripping. Furthermore, it isparadoxical that naira rate ofexchange comes underpressure simultaneously withincreasing CBN dollarreserves; in other words, whilethe CBN decries the excessivedemand for dollars, and thehigher propensity forNigerians to hoard dollars, thereal villain in the pricemechanism that weakens thenaira is actually the CBN, as itjealously hoards and presidesover $40bn, after suffocatingthe money market withunbridled naira creationssubstituted as monthlyallocations for distributabledollar revenue. So, in effect, itis CBN’s obnoxious monetarypolicy framework that repelsmarket affinity/loyalty to thenaira, and therefore, promotesdollarisation of the economywith large-scale forex roundtripping.

SAVE THE NAIRA, SAVENIGERIANS.

Business & Economy

West Texas Intermediatefell from its highest

settlement in almost two weeksas the U.S. government’spartial shutdown fannedconcern that economic growthmay slow.

Futures slid as much as 0.6percent in New York. Talksbetween President BarackObama and U.S.congressional leadersyesterday failed to break thebudget logjam as the partialgovernment closure entered itsthird day. WTI jumped 2percent yesterday to thehighest level since Sept. 20after TransCanada Corp.(TRP) said it expects tocomplete work on the southernportion of its Keystone

Crude oil price drops on concern US shutdown may curb fuel demandpipeline expansion by the endof October.

“Oil has been under pressurewith the gloomy economicpicture, and in the past fewtrading sessions with the U.S.government shutdown, whichmay slow oil demand,” saidMyrto Sokou, an analyst atSucden Financial Ltd. inLondon.

WTI for November deliverydropped as much as 65 centsto $103.45 a barrel inelectronic trading on the NewYork Mercantile Exchange. Itwas at $103.69 as of 1:22 p.m.London time. The contractyesterday advanced to $104.10in the first gain in four days.The volume of all futurestraded was about 2 percent

below the 100-day average.Brent for November

settlement fell as much as 49cents, or 0.5 percent, to$108.70 a barrel on theLondon-based ICE FuturesEurope exchange. TheEuropean benchmark was ata premium of $5.82 to WTI, upfrom $5.09 yesterday, the leastsince Sept. 23.

U.S. crude inventoriesclimbed by 5.5 million barrelslast week, data from theEnergy InformationAdministration yesterdayshowed. They were forecast torise by 2.5 million in aBloomberg News survey.

Government Closures The stalemate in

Washington put about 800,000

federal employees out of workand shuttered many U.S.government functions,

including infant nutrition aid,national parks and InternalRevenue Service audits. Otherservices, such as air-trafficcontrol and Social Securitybenefits, were operating.

A stronger naira will shiftmarket preference from thedollar and reduce thepropensity for round tripping

CMYK

smuggled rice floods nigerian market, as merchants suffer losses

Documents

rice discharge

prices ofsmuggled rice

official rice import

contributory pension

land borders

new price regime

old tariff

national pension commission