CBN halts branch operations by bureaux de change

DECEMBER 14, 2015

Continues on page 22

BY JONAH NWOKPOKU

Orders closure of branches within 90 daysBans relationship with street currency hawkersTo saction BDCs operating outside registered office

THE Central Bank of Nigeria,CBN has ordered bureaux dechange (BDCs) to close all

branches within 90 days, sayingbranch operations is no longer allowedin the subsector. T h i sdirective was contained in the revisedguidelines for BDCs released on Fridayby the apex bank. According to theguidelines, issued via a circular titled:‘Revised Operational Guidelines forBureaux De Change in Nigeria’,

"Bureau De Change is Licenced as aunit institution. No Bureau De Changeshall have a branch office outside itsregistered office. All Bureaux DeChange that under the 2002Guidelines have branches are requiredto close such branches within 90 daysof the 2015 guidelines."

The CBN also banned BDCs frombusiness relationship with streettraders in foreign currencuies. Itstated: "Similarly, it shall be a groundfor the revocation of Licence shouldany street trader in foreign currencies

be found to have any businessrelationship with a Licenced BDC.

Application for licenceAccording to the circular, “A formal

application to the CBN Governor togrant the promoters an Approval inPrinciple to carry on the business of aBureau De Change in Nigeria (shallbe made). The application should beaddressed to the Director, FinancialPolicy and Regulation Department(FPRD), Central Bank of Nigeria.Applicants/promoters shall attach to

their application the followingdocuments:A non-refundable application fee of

N100, 000 or such other amount as maybe determined by the Bank from timeto time in bank draft payable to theCentral Bank of Nigeria; Evidence of payment of the

prescribed minimum capital of N35million or any other amount as may bedetermined by the CBN from time totime, into the designated CBN account.The Bank shall refund this amount withinterest after the proposed institutionhas obtained its final licence;A copy of the draft Memorandum

and Articles of Association;A letter of intent to subscribe to the

shares of the proposed Bureau DeChange signed by each subscriber;A copy of the list of the proposed

shareholders in tabular form showingtheir business, and residentialaddresses and the names andaddresses of their respective bankers,as well as the details of their BankVerification Number (BVN).”

It further stated that, “Promotersshall reserve the proposed company’sname at the Corporate AffairsCommission (CAC) as no proposedBureau De Change shall incorporate/register its name with the CorporateAffairs Commission until an approval-in-principle has been obtained fromthe CBN, a copy of which shall bepresented to the Corporate AffairsCommission.”

Requirements forfinal licenceThe circular further noted, “Not later

than six months after the grant of AIP,the promoters of a proposed BDC shallsubmit application for the grant of afinal licence to the Governor, CentralBank of Nigeria, Abuja, with thefollowing documents: Evidence ofpayment of anon-refundable licencingfee of N1 million only or any otheramount as may be determined by theCBN from time to time; the names,designations and signed CurriculaVitae (CV) of the proposed membersof the top management; Evidence of

CONFERENCE: From left, Aigboje Aig-Imoukhuede, President, Nigerian Stock Exchange (NSE); Gbenga Oyebode,former chairman, Access Bank Plc; Akinwunmi Ambode, Governor, Lagos State, and Herbert Wigwe, GMD/CEO, AccessBank Plc, during the Access Leadership Conference 2015 with the theme “Leading in a Transformational World: TheImperative of Innovation” in Lagos. PHOTO: AKEEM SALAU

CBN halts branch operationsby bureaux de change

CMYK

22 — Vanguard, MONDAY, DECEMBER 14, 2015

CMYK

Cover

Continued from page 21

Breaking the Nigerian PovertyCycle through Entrepreneurial

Revolution (2)

Thatcher’s radical policies, successfully adapted acrossthe US, Europe and large parts of Asia, sparked off anew world order and confirmed the evolution of global

economic powerhouses. For a uniquely placed country likeNigeria, blessed with resources but hexed with endemicproblems, these events hold tremendous relevance andopportunity. They are also crucial to Nigeria making progresstowards the United Nation’s Millennium Development Goalsof eradicating hunger and poverty and improvingenvironmental sustainability, among others.

The first lesson for Nigeria of course is the need forfundamental changes in outlook and practices with regardsto promoting entrepreneurship as a means to permanentlyovercoming poverty and achieving grassroots development.Of equivalent importance is upgrading infrastructure andimproving access to social services, especially health andeducation. The World Bank outlines a three-pronged strategyfor Nigeria to meet this challenge, which includes:

Establishing a viable macroeconomic configuration thatoptimises incentives to the widest citizen base.

Prioritising accountability as a means of encouragingentrepreneurship and the subsequent delivery of qualityservices to the population.

Adapting policy and public expenditure conventionssuitable to promoting efficient growth and enhancedproductivity in a way that brings tangible benefits to thepoor.

Some of these suggestions have already been adopted. In2003, the Nigerian government set up the National EconomicEmpowerment Development Strategy, in line with IMFpoverty reduction policies, to achieve better fiscalmanagement. The same year, fuel prices were deregulatedand Abuja announced the privatisation of four nationalrefineries. The current global economic downturn is certainto wreak further havoc on Nigeria’s fledgling and oftenfloundering economy. What will determine the final outcomeof its nascent entrepreneurial revolution, to borrow astatement from Apple honcho Steve Jobs, is the amount ofperseverance is backs it up with.

A viable economic agenda for Nigeria that allows rapidentrepreneurial progress has to focus on fundamentaladjustments:

Creating a pro-active socio-economic environment thatencourages creative and viable entrepreneurship fromthe grassroots level to onwards. Identifying and correctinginfrastructure deficits and systemic imbalance inimicalto small business.

Developing a credit regime – through relevant financialand industrial policy changes – that is sympathetic tosmall business realities. Promotion of lending throughequity, and not debt, is of critical importance.

Removing administrative and trade barriers whilesimultaneously enhancing technical support and capacitybuilding assistance for both existing and emergingentrepreneurs.

Mobilising the country’s significant human resourcespool by revamping the education sector to providevocational, administrative and skill development trainingto rural and urban youths.

Creating efficient and effective mechanisms for regulationand oversight of enterprise-development initiatives ingeneral, and microfinance institutions in particular.

Maintaining political stability and authority of democraticinstitutions; fighting corruption and building socialconsensus on important issues to ensure broad-basedsuccess of macroeconomic policies.

incorporation of the companywith CAC; evidence ofpayment of N35 millionmandatory caution deposit, orany other amount as may bedetermined by the CBN fromtime to time, into a designatedCBN account; evidence ofhaving suitable officeaccommodation for theoperation of the proposedBDC.”

FinancialrequirementsAccording to the circular, the

financial requirements, whichmay vary at the discretion ofthe CBN, are as follows:“Minimum paid-up sharecapital-N35million; Non-refundable application fee-N100, 000; Non-refundablelicensing fee-N1 million;Mandatory caution Deposit-N35 million; Non-refundableannual licensing renewal fee[payable not later than30 daysafter the end of each calendaryear]-N250,000; Non-refundable change of namefee-N100, 000”

Operations ofbureaux de changeOn the operations of BDCs

in Nigeria, the circular said:“Every BDC in Nigeria shalldeal in bank notes and coins,plastic cards and such otherbusinesses as the CBN mayapprove from time to time;The foreign currencies dealt inby a BDC shall be derivedfrom private sources and suchother sources which mayinclude the CBN window asdetermined by the CBN fromtime to time for the purpose offunding Business TravelAllowance [BTA] and PersonalTravel Allowance [PTA]; Any

CBN halts branch operations by bureaux de change

person/individual wishing tosell foreign currency above$10,000 or its equivalent to aBDC shall be required todisclose the source;Transactions shall be on spotbasis (immediate settlement),adding “For the avoidance ofdoubt, forward transactions byBDCs are not allowed; Themaximum amount pertransaction for a BDC shall bedetermined from time to timeby the CBN with respect tobusiness and personal travelallowances. The maximumamount currently for PTA andBTA per quarter is $4000 and$5000, respectively; All salesor purchases of foreignexchange shall be properlydocumented and recorded asmay be required by the CBN.

Such documents should bearranged sequentially and bemade available to CBN andother regulatory authorities ondemand, etc.”

Ground for licencerevocationThe guidelines further

stated: “Every BDC shalltransact business at its

registered office approved bythe CBN as any BDC thatoperates outside its registeredoffice shall be sanctioned.Similarly, it shall be a groundfor the revocation of Licenceshould any street trader inforeign currencies be found tohave any businessrelationship with a LicencedBDC. Every BDC shall fix itshours of business which shallbe clearly displayed in itsoffice.

Every BDC shall be requiredto open both domiciliary andNaira accounts withAuthorized dealers in Nigeriaand inform the CBNaccordingly. The accountsshall be used solely for day today operations.”

Non-permissibleactivitiesAccording to the circular,

non-permissible activities forBDCs include: “Engaging inoff-shore business ormaintaining foreigncorrespondence relationship;Engaging in any trade relatedimport activities; Maintaininga foreign account in whateverform; Round-tripping offoreign exchange [currency]acquired through the CBNwindow; Street trading offoreign exchange; Carryingon capital market activities;Any other activity as may fromtime to time be termed “non-permissible” by the CBN.”

It also warned that “BureauDe Change is licenced as aunit institution”

And as such, “no Bureau DeChange shall have a branchoffice outside its registeredoffice. All Bureaux De Changethat under the 2002Guidelines have branches arerequired to close suchbranches within 90 days of the2015 guidelines.”

Every BDCshall berequired toopen bothdomiciliary andNaira accountswith Authorizeddealers inNigeria andinform the CBNaccordingly

INVESTITURE - From left, Mrs. Azeeza Munzali, Prof. Munzali Jibril, new President andChairman of Council, and Dr. Nelson Uwaga, immediate Past President, Nigeria Institute ofManagement during the investiture of the new President in Lagos.

Vanguard, MONDAY, DECEMBER 14, 2015 — 23

Business & Economy

There is usually the belief that investors avoid Nigeria due to lackof infrastructure. This has led government and many well meaningNigerians to always focus their thoughts on building

infrastructure. While it is true that infrastructure facilitate investment, italso aids economic development. The greatest challenge facing the countryin terms of foreign direct investment is the obsolete nature of Nigerian

•Saraki

Can Saraki really push for amodern economy for Nigeria?

laws that do not conform to21st Century economy.Investors have longcomplained of the lack ofsanctity of contract andrespect for property right inNigeria. Nigeria instead ofattempting an overhaul of thelegal and judicial system tomake Nigeria investment-friendly, they rather focus onwhat they have been made tobelieve is the problem.

When the Nigeriantelecommunication spacewas opened to private sectorinvestors, many were deceivedby the report the World Bankgave to them. But MTN,Econet as Airtel was calledthen, took the risk. Despitethe gloomy picture of lack ofinfrastructure, telecomcompanies are making profitfrom their investment. It isthe same story with the oilcompanies and many othersthat have invested inNigeria.

The Senate President, Dr.Bukola Saraki seems to haveunderstood the economicbottleneck the nation isfacing and last week,promised the businesscommunity that the EighthSenate of the FederalRepublic of Nigeria willtackle the problem.Delivering a speech titled:'Macroeconomic outlook for2016 and legislativeperspective' at LagosBusiness School BreakfastClub end of the year dinner,Dr. Saraki told the augustgathering of key businessoperators in Nigeria that the8th Senate is at an advancedstage of carrying out one ofthe most far-reachinglegislative reviews everembarked upon by thelegislature in Nigeria with theDoing Business Development

project which is aimed ateliminating obsolete businessregulatory laws that haveoutlived their usefulness andin their place, provideadequate legal, institutionaland regulatory mechanismsto drive a new moderneconomy.

He said: “Prior to this, wehave strategically utilisedformal and informal meetingswith key stakeholdersincluding the NBA, the SEC,RMFAC, the ICPC, FIRSand many other relevantagencies of government and

critical industry leaders, witha view to using gatheredinformation as a critical tool tofashioning out what will makeNigeria a favourableinvestment destination. Forthe 8th Senate, we can nolonger accept the placement ofNigeria at 169 of 189 countrieson the global ranking ofbusiness competitiveness.Therefore, the task ofmodernising the Nigerianeconomy and providing theregulatory environment forease of doing business is forus a task that must be done

in order to set the stage formeaningful economic growth.As operators, we need yourpartnership on this importantassignment to ensure thatyour concerns and views areadequately captured.”

The question to ask Dr.Saraki is: Will the review becomprehensive enough toinclude property right, landuse act and sanctity ofcontract? Will the NationalAssembly pass laws that willfasttrack the judicial processof seeking redress oncommercial and tradedisputes?

Globally, investors areinterested in places wherereturn on their investmentsis high. Nigeria certainlyqualifies as investors havefound out that they reaphigher benefit if they investin Nigeria. The few that havedone so have found this to betrue. Yet, Nigeria is not ahaven to foreign investors.

There must be reasons whythey shy away from Nigeria.Many investors out there whospeak privately to Nigeriansat investment fora are quickto point out that in Nigeria,there is no sanctity of contractand property rights are notclearly defined.

Most foreign investors seethis as the most inhibitingfactor that scares away would-be investors. They are notworried about the lack ofinfrastructure as is alwaysclaimed by those who explainaway the Nigerian situation.

Shell, Mobil, Chevron,

MTN, UACN and others knowtoo well the infrastructuraldeficiency in the country, yetthey invested and are reapingthe benefits.

The truth is that both localand foreign investors arewary of investing in Nigeriabecause the state and itsagents have no respect forproperty rights and sanctityof contracts.

They are worried that ifthey invest in Nigeria, theirinvestment can be taken overby the state. The terminationof Lekki Concessionagreement by Lagos StateGovernment, the taking overof private banks by theSanusi-led CBN, therevocation of the concessiongranted to Bi-courtney areexamples of such impunitythat scare investors awayfrom Nigeria.

Property rights, accordingto Professor Pat Utomi,constitutes a major part ofthe constitutionalarrangement that makes aneconomy advance. Now, untilthis entity called Nigeria hasa philosophicalunderstanding of whatproperty rights means,Nigeria is not going to makeany major economicprogress. To say the least,investors are scared andskeptical about Nigeriabecause there is impunityand property rights are notguaranteed.

Will the Saraki-led Senategive Nigeria legislations thatwill resolve all of these?Nigeria will be a better placeto do business if the laws tobe reviewed are carried outquickly and include thereview of the land use act anda well defined property rightsis enshrined in the country.

Officials of theC o o p e r a t i v e

Society of the office of theHead of Civil Service of theFederation have accused itsPresident ofmismanagement andmisappropriation of fund.Financial Vanguardinvestigations revealed thatover 1,600 members of theHead of ServiceCooperative Society arecalling for the interventionof anti-graft authorities toinvestigate the refusal of thePresident to relinquish hisposition 22 months after he

Financial scandal rocks Head of Service Staff Co-operativeretired from the Service.

In a letter addressed to thePresident, Joint UnionNegotiating Council in theoffice of the Head of Servicedated January 5, 2015, themembers appealed forintervention in the crisis thathas rocked the cooperativesince the president, MrStephen Esezebor got onaboard.

The letter which was dulysigned by the 39 members ofthe cooperative reads,“Permit us to kindly draw theattention of your office to thelingering crisis that has beenrocking the operations andgeneral administration of theCooperative Thrift and

Credit Society (CTCS) of theOffice of the Head of CivilService of the Federation.

This crisis has assumed anunresolved dimension hencethe need for this SOS (SaveOur Soul) letter.

“Mr. Stephen Esezebor,now a retired civil servanthas held sway as thePresident of the Cooperativefor many years while in active service and wasexpected to haverelinquished power to asuccessor just before hisretirement but blatantlyfailed to do so, held ontopower unduly therebyaggravating the avoidablecrisis that has rocked the boat

of the Cooperative hitherto.“Mr. Stephen Esezebor, not

willing to handover the affairsof the Cooperative, and alsonot willing to end the crisis,resorted to legal means ashe headed for litigation in theCourt of law which we haveviewed as just a strategy toundo so many things to his personal interest. Worst still,is the apprehension that ourhard-earned savings in theCooperative accounts wouldhave been grossly tamperedwith. This is obvious asmembers who applied forloans no longer get them, those who retired from theservice can not access their

life- savings."The Cooperative society

accounts with Ecobank,United Bank for Africa,Diamond Bank and GTBankare still being operated byMr Stephen Esezebor whoretired from the Service inFebruary 2014.

“We undersignedstakeholders and concernedmembers, on behalf of theentire members of thecooperative thereforeconsidere it imperative foryour good office to wade intothis crisis that has donenobody any good.”

The Audit Committee ofthe cooperative had in 2012written to the Head of CivilService of the Federation onalleged mismanagementand misappropriation offunds.

BY FAVOURNNABUGWU

CMYK

24— Vanguard, MONDAY, DECEMBER 14, 2015

CMYK

Business & Economy

By GODWIN ORITSE

A partnership to cute m i s s i o n sfrom airports

and take the industry towardsclimate neutrality has beenlaunched. The partnershipwas signed at COP21 in Parisby the United NationsFramework Convention onClimate Change (UNFCCC)and Airports CouncilInternational (ACI), whichdeveloped the AirportCarbon Accreditation programme.

Emissions reductions willbe achieved through use ofenergy-efficient lighting,cooling and heating systems,solar energy, climate-friendlyground transportation and awide range of other measuresaimed at climate neutrality.ACI will support theUNFCCC’s initiative, whilethe UNFCCC secretariat willsupport airport carbonaccreditation, wherebyairports measure, report andreduce their emissions.

The two organizations willdevelop a common workprogramme andcommunications planpromoting carbon neutrality.UNFCCC will join theadvisory board of the AirportCarbon Accreditation programme, which aims toincrease the number ofairports graduating to carbonneutral status. In the past 12months, 137 airportsworldwide, representing 31percent of global passengertraffic have earned ACI’s“airport carbon accredited”

Airports, UNFCCC enter deal on climateneutrality

status. There are currently 20carbon neutral airports. Thepartnership announcementfollows the commitment bythe European airport industrylast week at COP21 toincrease the number of carbonneutral airports to 50 by2030.

“It is immenselyencouraging to see anindustry as visible andstrategically relevant as theairport industry being soproactive on climate action,”said John Kilani, Director,Sustainable DevelopmentMechanisms programme,UNFCCC secretariat. “WhatACI has achieved throughairport carbon accreditationover the past six years isinspiring – to mobilize 137

airports in the journey towardscarbon neutrality is anexample that many otherindustries could learn from.”

Angela Gittens, DirectorGeneral ACI WORLD andOlivier Jankovec, DirectorGeneral ACI EUROPE in ajoint statement said “Today isa very big day for ACI andAirport CarbonAccreditation. To gain thesupport of an organization asauthoritative as the UNFCCCis something we consider amajor achievement and agenuine recognition of thecontribution of the airportindustry to the climate actionthrough Airport CarbonAccreditation. We aredelighted to be partneringwith UNFCCC and look

forward to their input in theAdvisory Board of theprogramme.”

Launched at Climate Weekin New York in September2015, Climate Neutral Nowencourages countries,industries, organizations andeven individuals to measuretheir emissions, reduce whatthey can and offset the restwith quality projects indeveloping countries. TheIntergovernmental Panel onClimate Change hasestimated that aviationaccounts for about 2 percentof global CO2 emissions. Ofthat figure, airport operationsaccount for up to 5 percent.For more information aboutthe Airport CarbonAccreditation programme,including key results,

The Lagos InternalR e v e n u eService (LIRS) said it

had shut four companiesover non-remittance onN6.86 million workers’personal income taxes. MrsAjibike Oshodi-Sholola, theHead, Distrain Unit of theLIRS, disclosed this to theNews Agency of Nigeria(NAN) in Lagos.

According to her, the firmswere closed during a state-wide tax law enforcementexercise on Thursday, lastweek. Oshodi-Sholola saidthat the four companies’ totaltax liabilities were only for2012 audited results. Shesaid that the affected

LIRS shuts four firms over N6.86 million tax debt

companies included hotels,electronic shop, shippingcompany and fashion firm.

The head of the distrain unitsaid that some of the affectedcompanies had started payingthe 2015 taxes, but had notpaid for 2012, 2010 and 2011.She said that some firms wouldpay for the current yearwithout paying for theprevious years.

According to her, thecompanies were doing this bythinking government willforget, overlook or wave taxpayment of past years. “It iswrong to bypass tax paymentof any year becausegovernment will not forget itsmoney. Certainly, the

government will come for thetaxes one day. And pilling upthe taxes may make theamount to accumulated sohigh that it may be difficult forthe company to pay,” she said.

She said that somecompanies were out ofbusiness because their taxliabilities had accumulatedsuch that they were unable topay the debts. Oshodi-Shololaurged firms operating in thestate to ensure that theyregularly remit their workers’taxes to the service to avoidthe embarrassment anddisruption of their operation.“Ensure your company is up-to-date with its tax paymentsand always make available all

necessary documents inrespect to the companies’ taxissues in case LIRS visits.Tax-payment is a civicresponsibility of everyonebecause it is a major sourceof government’s revenue.

“It also the only waygovernment can provide thebasic amenities for the citizensto improve their livingstandards,” she said. Someof the affected companies,however, complained thatLIRS was not giving them fairhearing. They said that theydid not receive letters from theLIRS in respect of its plan toseal their companies.

Low oil prices andhealthy demand fortravel will boost

airline profits again in 2016,the International AirTransport Association hassaid. IATA, whichrepresents almost 260airlines accounting for 83percent of global air traffic,said net profits would reachrecord levels of 36.3 billiondollars in 2016 after 33billion dollars in 2015.

It said over half of theprofits would come fromNorth American carriers. TheGeneva-based associationhad previously forecastairline profits of 29.3 billiondollars in 2015.

“It is a good news story,”IATA Director General, TonyTyler, told journalists inGeneva.

Tyler, however, said that theindustry profits were still bestdescribed as fragile ratherthan sustainable.

Demand for travel has beenbooming in 2015, thanks toimproving economies andlower fuel helping to boostspending, especially onleisure trips. “We shouldenjoy the benign tradingconditions while they last,but it would be a mistake tostart to get used to them,”Tyler said.

Airlines profitsto hit recordlevels in 2016— IATA

Land border riceimport: Customsrakes in N1.178bnin 2 months

Nigeria CustomsService, NCS, has

recorded a total revenue ofN1,178,720,376 on riceImported through the landborders in October andNovember 2015. During thesame period, the totalquantity of rice importedthrough the land bordersstood at 17.596 MetricTonnes.

A press statement signedby Customs Public RelationsOfficers, Wale Adeniyi, noted that the figures weredisclosed at a strategysession convened by theComptroller-General ofCustoms, Col. Hameed Ali(Rtd) to review revenueperformance for the year.

Adeniyi stressed that it isimportant to note therevenue collected wasduring the period theComptroller-General of theService had approved theremoval of the restrictionplaced on importation of ricethrough the land borders.

AWARD - From left: Director, MTN Foundation, Mr. Dennis Okoro; MTNF Science &TechBeneficiaries, Ms. Seun Akinfolarin and Onyeonoro Praise; and MTNF Executive Secretary,Ms. Nonny Ugboma at the Award Ceremony of the MTNF Scholarship Scheme 2015 in Lagos.

CMYK



CMYK

Banking & Finance

First City MonumentBank (FCMB) has said

that its decision to decisionto donate a multi-purposeStudents’ Centre to Pan-Atlantic University (PAU), ispart of its strategies to investin the future especially thatof the youth.

Speaking at thecommissioning and hand-over ceremony of the Centre,Group Managing Director/Chief Executive of FCMBLimited, Mr. Ladi Balogun,

Financial crimes threaten globaleconomy system —DPPF

BY ONOZURE DANIA

The Director of PublicProsecutions of theFederation (DPPF),

Federal Ministry of Justice,Mr. Mohammed Saidu Dirihas said that organisedcrimes and financial crimesare the major threats to theglobal economic system.He said that organisedcrimes and financial crimes,which have taken the centrestage in the global world,entails intricate layers ofcriminal conspiracy andresponsibility, with crossborder implications asdifferent components of“predicate crimes.”Diri disclosed this during the2015 Capacity BuildingWorkshop for Law andEnforcement Agenciesorganised by the NigeriaDeposit InsuranceCorporation (NDIC), inL a g o s .The two-day workshop hadin attendance, the LawEnforcement Agencies whichincludes the Economic andFinancial CrimesCommission (EFCC),Independent CorruptPractices and Other RelatedOffences Commission(ICPC), the Nigeria Police,Federal Ministry of Justiceetc. was held at Golden TulipHotels, Festac, Lagos.The public prosecutor, whowas represented by Mr.Ernest Ezebilo stated thatthe investigation of financialcrimes in this high-techglobalised world requiredmen and women of soundtechnological know-how andthat such level of skills canonly be possible throughcapacity building

programmes such as the oneorganised by the NDIC.“Financial crimes andTerrorism are criminal actsthat are inextricablyintertwined and in this eraof terrorist attacks onNigeria and her citizens,terrorist financing is themost deadly act of terror aswithout the financialcapability, the terroristscannot carry out any attacks.“Money laundering as a formof financial crime has become

a phenomenal criminalactivity as almost allproceeds of financial crimesare laundered to safety, untilour law enforcementagencies are equipped totrace, find and recover allproceeds of crime, thecriminals will always beahead of the public securityinstitutions”, Ezebilo said.Diri further encouraged theagencies not to relent in thefight against corruption,adding that they should be

steadfast and never give upon their mandate, ascorruption is the bane of thecountry ’s nationaldevelopment and thatNigerians are counting ont h e m .“Corruption, I cannot in allhonesty address you withoutmentioning this issue, mostimportantly because it is thebane of our nationaldevelopment but mostpracticably because it fallswithin your mandate. Thecurrent administration ofPresident MuhammaduBuhari has decided in wordsand in deeds to purge ourdear country of thiscankerworm that hashindered us from attainingnational developmentcommensurate to oureconomic fortunes.The president and indeedNigerians are counting onall of us”, Diri stated.Earlier in his keynoteaddress, the ManagingDirector/Chief ExecutiveOfficer of NDIC, AlhajiUmaru Ibrahim lamentedincessant fraud in thebanking system, in Nigeria,stating that this hascontinued to be a greatconcern to the Corporationgoing by the magnitude oflosses recorded over theyears.

Ibrahim, who wasrepresented by Alhaji B.DUmar noted that theexperience with those banksthat were closed between1994 and till date clearlyillustrated the trend and thedamaging impact of fraud onthe affected banks.“Many of the banks underliquidation as well as manyin operation have suffered agreat deal from the impactof fraud.

Rödl& Partner integrates with WFOProfessional ServicesRödl& Partner, a global

professional servicesfirm providing audit, legal,tax consulting, BPO,management and ITconsulting, has furtherstrengthened its presence inAfrica with the admittance ofWFO, a fast growing groupof firms providing audit, taxand advisory services inNigeria and Ghana.

Rödl & Partner offers aunique approach to theopportunities of the Africanmarkets: a multi-disciplinary,one-stop shop firm oflawyers, accountants, taxspecialists and managementconsultants – entirelyfocused on the needs offoreign direct investmentand truly integrated servicesfor private investors,international financialinstitutions andgovernmental agencies inAfrica. Rödl & Partnersupports German and othermultinational businesses,wherever in the world theymight be.

WFO is the brand throughwhich WFO ProfessionalServices LP (CharteredAccountants), WFO AdvisorsLimited (providing tax andadvisory services) and LekkiCorporate Services Limited(providing companysecretarial services and,immigration and

employment advisoryservices) provide a boutiqueof services to clients. WFO,with over 40 partners,directors, managers,consultants and associates, isheadquartered in Lagos andhas representative offices inPort Harcourt, Ibadan, Abujaand Accra, Ghana.

Why We Donated Students’ Centreto Pan-Atlantic University – FCMB

added that the gesture is alsoin line with the commitmentof the Bank to effectivelysupport initiatives that wouldenhance the standard ofeducation in the country aswell as the well-being of thesociety.

The FCMB Students’Centre, located within themain campus of PAU atIbeju-Lekki, along the Lekki-Epe expressway in Lagos, isa facility devoted to students’recreation and socialisation.

Access bank Plc has led thecall for Nigeria to adopt

innovative approaches in itsbid to transform itsleadership for a better,prosperous society.The Chief Executive Officer/Group Managing Director,Access Bank, Herbert Wigwemade the call while speakingat the 2nd Access leadershipconference held in Lagos.According to Wigwe, thequestion around leadershipand innovation is perhapsmore pertinent in Nigeriatoday that just had asuccessful transition into anew leadership.He said: “If we can change theworld with very simplequestion, what if? What if ourliteracy rate in Nigeria is 100percent? What if everyone inNigeria had access toeducation? What if the fightagainst malaria and HIV waswon? What if ourinfrastructure enabledeconomic success andopportunities for allNigerians? And the bankingindustry could contribute toall these lofty goals byproviding the best qualityproducts and services at thecheapest prices for allNigerians. This conferencewill enable each and everyone of us to ask the question,what if? The question aroundleadership and innovation isperhaps more pertinent inNigeria today that just had asuccessful transition into anew leadership.”While noting that theconference brought togetherglobal business leaders,innovators, entrepreneurs,politicians, civil societyleaders to discuss importanttopics that affect all sectors,he added, “Despite the factthat there are globaldifferences and economicchallenges all over the world,there are also significantopportunities which we mustall grasp both for homegrown talents and forinternational investors.Whereas such anenvironment may bring itsown challenges to thebusiness world, we also knowthat such environment willcreate tenacious leaders,courageous politicians andinnovative chief executives.

Access Bankleads innovationadvocacy totransformNigeria’sleadership

PROMO - From left, Ebere Nwaolikpe, Assistant Marketing Manager, Western Union(ECOWAS); Mrs Olukorede Demola-Adeniyi, Head, Personal Banking, Ecobank Nigeria; PrinceAdewale Oladiti (one of the lucky winners of ‘Ecobank-Western Union Double your moneypromo), and Daniel Onyemenam, Deputy Manager, Regulatory and Monitoring, NationalLottery Regulatory Commission, during the draw, in Lagos.

By Jonah Nwokpoku

Vanguard, MONDAY, DECEMBER 14, 2015— 27


CMYK




Corporate Finance

Ifeanyi Ogbor is the Head, Vehicle and Asset Finance,Stanbic IBTC Bank. He is experienced in asset finance

and general investments and currently leads the team that isresponsible for originating, structuring, executing andadministering asset finance facilities within Stanbic IBTCBank. In this interview with Vanguard, Ogbor explains howthe bank is using asset finance to make vehicle ownershipless cumbersome for Nigerians. Excerpt:

You just signed a deal with Peugeot Automobile Nigeria tofinance car purchase for your customers. Coming on the backof a similar deal you recently signed with Coscharis Motors,what would you say is the overarching strategy behind thesedeals?

We plan to grow our Vehicle and Asset Finance franchise inthe market, providing services to various customers. Theseinclude individuals, small and medium enterprises (SMEs),commercial and corporate clients. With our position as a marketleader in vehicle and asset financing in Nigeria, we havecontinually provided various solutions to our customers whorequire various equipment from time to time. Aside thesuccessful sales campaigns with selected vehicle andequipment dealers, we are in relationship with key vendorsand vehicle dealers financing their products for a wide rangeof users. Taking this further, we are bringing vehicle andequipment financing to the dealer’s showroom. By so doing,customers can walk into our vendor outlets and they can accessfinancing from the dealer flow. This we have started and weintend to replicate amongst several dealerships. Simply put,

SEC disclaims BGL50 Index

Following the publicationof the BGL 50 Index in

a national newspaper, theSecurities and ExchangeCommission (SEC) Nigeriahas insisted that thesuspension of BGL Plc, itssubsidiaries and sponsoredindividuals from all capitalmarket activities still subsists.

SEC in a notice it posted onits official website, said that theCommission dissociates itselffrom the “BGL 50 Index”publication.

According to the notice, Theattention of the Securities andExchange Commission (“TheCommission”) has been drawnto a “Market Index” titled “BGL 50”, currently beingsponsored by BGL Plc inThisday Newspapers. This isto remind the general publicthat the suspension of BGL Plc,its subsidiaries and sponsoredindividuals from all capitalmarket activities still subsists.

“The Commission herebydissociates itself from the “BGL50 Index” publication.

GTBank namedBank of the Yearin Nigeria

Guaranty Trust Bank Plchas once again

reaffirmed its position as aleading global brand with itsrecent recognition as the ‘Bankof the Year’ during the 2015Banker Awards held in London,United Kingdom.

The Banker, a publication ofthe Financial Times, is theworld’s leading monthlyjournal of records for thebanking Industry, with over 90years expertise in publishingdevelopment in the bankingindustry both in Africa and onthe global scale.

The Banker Awards isregarded as the industrystandard for bankingexcellence, recognizing andcelebrating the achievements ofindividuals and financialinstitutions within the globalbanking sector.

According to Brian Caplen,Editor of the Banker Magazine:“The banking and financialservices industry continues todevelop rapidly, with a fewfinancial institutionscementing their positions asmarket leaders, pushing theboundaries of innovation andexcellence. GTBank has overthe years maintained areputation for deliveringnotable financial successhinged on world classcorporate governancestandards and excellent servicedelivery.”

What is constantis the fact that ourofferings are acombination ofvery attractiverates, qualityassets, specialinsuranceofferings and aconvenientrepayment plan.

Stanbic IBTC offerscompetitive ratesfor vehicle andasset financing— OGBOR

the customer will eventuallywalk into a dealer showroom,process and secure financingfor any choice of vehicle andeventually take deliverywithout necessarily going toany of the bank branches.

Does this deal represent there-emergence of Peugeot inNigeria and that the smallfleet transporter, whoprovide the majority oftransportation via road, cannow access facilities atStanbic IBTC to replace theirbuses?

The programme supportsthe drive to produce and selllocally assembled vehicles inNigeria. This is one way inwhich the bank supports localmanufacturing by providing aspecial finance scheme thatwill enhance the sale oflocally assembled vehicles.Years ago, it seemed like therewas at least one Peugeotbrand in most homes inNigeria. Our parents drovethe 504GL, 504SR, 404, 305and later, the 505. We alsoremember the 505 evolution.With this deal, the bank willbe providing financing forcustomers who are interestedin buying any of the Peugeotbrands based on favourableterms and conditions. Thenew brands include a widerange of vehicles from theSedan to the Crossover andSUVs. These are the 508,

4008, 3008, 308, 301 and thePanel Van. Peugeot is backagain and working with abank like ours, it is most likelygoing to end up with at least“One Peugeot brand in mosthomes.”

The offering is channelledtowards existing and newcustomers of the bank.However, the fleet buyers arelikely to take more advantageof the programme and we arewilling to support them in thisregard.

What are the specificrequirements for individualswho wish to benefit from thisdeal?

In the personal space, firstprice for us will be to deal with

employees of corporateorganisations whose salaryaccounts are domiciled withthe bank. Where we deal withcustomers without salarydomiciliation, an irrevocablestanding order must be inplace. The above is, however,subject to affordability,considering the cost of thevehicle and salary.

Are the requirements andpaperwork arduous? Whatexactly is the process?

Aside the execution of theapplication form, we willrequire other documentsshowing proof of employment,evidence of monthly takehome and proforma invoicestating the price of thevehicle. Customers can walkinto any of the outlets ofPeugeot Automobile approvedvendors or any branch ofStanbic IBTC Banknationwide and there aresales team members who areat all times available toprovide the necessarysupport. After a preliminaryassessment, the customer willreceive immediate feedbackon eligibility and will beguided on the documentationprocess for the application.Upon approval, the customerwill be issued an offer letter.Based on acceptance of theoffer (other conditions met)the customer will takedelivery of the vehicle.

It appears the scheme isskewed in favour ofemployees who work in bluechip organisations,unavailable to a hugepercentage of Nigerians whoare in the informal sector butare desirous of owning a car.How can a self-employedNigerian in the SME sectorbenefit from this deal?

As a group, we offerfinancial services to customersin various segments. Theseare Personal Banking,Business Banking, Corporate& Investment Banking and

Wealth. In the BusinessBanking space, we offerbanking services to bothSMEs and commercialcustomers and our vehicleand asset finance offering isone of the numerous productson offer. Self-employedclients and other smallbusinesses fall under ourSME segment and they areopen to this scheme. For theSMEs, it is a businessapplication with separaterequirements, which differfrom those of the individuals.

When the Coscharis dealwas signed, the perceptionwas that Stanbic IBTC Bankwas only interested in the topend of the market as onlyluxury car brands, essentiallyhigh-net-worth individuals,were covered by the deal.Can we then say that thePeugeot deal is an indicationof the bank’s intention toincrease presence in theretail end of the market?

Under the CoscharisVehicle Finance Scheme,financing is availed tocustomers who intend topurchase any of the Coscharisbrands of vehicles. Theseinclude Ford, M&G, BMW,Jaguar, Mini, Land Rover andRolls Royce. Even though thevendor sells luxury brands,Ford and M&G have modelsthat compete with otherbrands that are considered tobe less expensive. Aside thespecial programmes we runwith selected vendors, wedeal with most of the majorvehicle and equipmentdealers providing financingfor a wide range of products.We cater for the varioussegments in the market.

Many observers of dealssuch as this often wonderwhy there is fanfare aroundsuch deals when the marketfor new cars in Nigeria isonly 10 per cent of the totalcar market, with usedvehicles making up thebalance 90 per cent. Don’tyou think that real value liesin going after the 90 per cent,which these deals do notcover?

For new vehicle purchases,we are aware that a highernumber of these vehicles aresold on outright purchase.With the kind of offerings wehave, we are able to increasethe number of financedvehicles in the market. For anumber of customers whowould ordinarily buy usedvehicles, affordability iscreated and we see themmove up to play in the newvehicle segment. Lifestyleand standards of living areenhanced. Aside that, we alsoprovide financing for pre-owned vehicles under ourgeneral vehicle financingterms and conditions.Therefore, we can rightly saythat we cover the pre-ownedcar segment as well.

•Ogbor


Insurance

Homes & Housing Finance

In a quest to be globallycompetitive in plant and

machinery valuationpractice, some EstateSurveying and Valuationpractitioners in Nigeria haveliaised with the AmericanSociety of Appraisers (ASA),to obtain internationalcertification. Though, knownas valuation in Nigeria, somecountries use the term,appraisal to define the act ofestimating value for tangibleand intangible assets, plant,machinery and equipment.This was the highlight of thevisit to Nigeria by the PastPresident of the AmericanSociety of Appraisers (ASA),Leslie H. Miles Jr.

“Govt must provide enabling policies foraffordable housing”

Areal estated e v e l o p e r ,Mr. Deji Alli, has

revealed that withoutgovernment’s enablingpolicies to drive the prospectof affordable housing inNigeria, achieving it will bedifficult.

Alli is the chairman ofMixta Africa,, parent body ofMixta Nigeria, a real estatedevelopment firm operatingin several African countriesthat has now been acquiredby ARM Properties.

Disclosing this at theformal launching of MixtaNigeria in Lagos last week,Alli noted that affordablehousing is a major segmentin the operations of MixtaAfrica. He said “In Senegalfor instance where we havedeveloped affordable homes,the price is 30,000 Euros perhome which is about N6million. This is exactly whatwe want to do in Nigeria.“But before we can do this,certain things have to bedone. For instance, thegovernments must bedesirous to make homesaffordable to the teemingprospective Nigerian homeowners by creating policiesthat will drive the dream ofaffordable homes in thecountry. For instance, the

government should ensurethat it is possible for peopleto borrow for a long term ataffordable rates to acquiretheir homes. “This is thedifference between what ishappening in Nigeria andwhat we are seeing in othercountries where we areoperating. So, until we havea situation where thegovernment is providing thatenabling environment foraffordable homes, achievingaffordable housing in Nigeriais always going to bedifficult”, he stated.According to him, there is

what is called social housingprogramme, which is usuallya programme of thegovernment where there isan objective to deliver homesto citizens at a price point.He added that to do this,there must be policies inplace. He further pointed outthat then, there is affordablehomes where there is nogovernment’s support. “Ithink for Nigerians, this iswhere they have theopportunity to own theirhomes because there are nopolicies by the governmentto facilitate affordable homes

in the country yet. The kindof prices we are talking aboutwhich is between N5 and N6million as we have done inother countries in Africa isnot impossible in Nigeria”,the chairman noted.

Shedding more light onMixta Africa, he said “MixtaAfrica which is the parentbody of Mixta Nigeria isbased in Barcelona, Spain. Ithas subsidiaries in Tunisia,Senegal, Cote’d Voir andnow Nigeria. In addition tothis, in the past, we haddeveloped projects inAlgeria, Egypt and

Mauritania. So, Mixta Africais an African real estatedevelopment company. Butthe distinguishing feature ofthis company when you lookat its operations acrossAfrica, is that we havespecialisation in our area ofbusiness.”Our core area isaffordable homes. In placeslike Morocco and Algeria,we have been able to deliverhomes successfully to endbuyers at a price of N5million. So, the reason forthe acquisition for us, is tobring that managementdiscipline of Mixta Africa toNigeria which makes a lot ofsense to us so that we areable to lower the deliverycost of houses to prospectivebuyers.

Estate Valuation practitioners seek global certificationThe ASA, last week in Lagos,commenced Stage 1 of theaccreditation process aimedat certifying the first set ofNigerians as Members of theorganization. The program isbeing co-ordinated by Mr.Leslie H. Miles Jr. a pastpresident and CertifiedInstructor of ASA. He is alsoa Senior Appraiser withAsset Valuation Source, aTexas based institution in theUnited States of America(USA). The program dweltessentially on plant,machinery and equipmentvaluation principles andpractice. The program washosted by Messrs Paul Osaji&Co at their head office in

Lekki Phase 1.Elaborating on this, Mr. PaulOsuji, a renowned estatesurveyor and valuer, saidvaluation is needed invarious sectors of theeconomy such as bankingand financing, oil and gasindustry, aviation sector,manufacturing, real estateand such sundry businesses.Investors would want toknow the values inherent inthe business they want to puttheir money in. According toOsaji, Estate Surveyors andValuers (Appraisers) are inthe best position to put themthrough on this as they havethe competence. Continuing,Osaji argued that

investments have no border,therefore, professionals haveto continually seek to obtaincertifications withinternational designations inaddition to their NationalCertifications, in order tomeet various expectations ofmultinational organizations.“An appraiser must invest inacademic study and hands-on, full-time experience; andmust prove competencythrough passing qualifyingexaminations in valuationtheory, ethics, and at leastone specialty, plus peer-review approval of appraisalreports”, said Osaji.

The Managing Directorof Continental

Reinsurance plc, Mr FemiOyetunji has said the use ofUS Dollar in the company’soffshore offices has helped tosooth the reinsurer ’soperations, following thecontinuous fall of the nairain the organisation’s homecountry.

Oyetunji who said thedepreciation of currencieshas slowed down business in

ITF builds partnership with insurancecompanies

STORIES BYFAVOUR NNABUGWU

As a human resourcedevelopment agency,Industrial Training

Fund has planned to build onits partnership withinsurance companies onskills training to see how theunderwriters can provideinsurance for its facilitators,among others.

The Director-General ofITF, Mrs. Juliet Chukkas-Onaeko made this knownduring a press briefing withCommerce and IndustryCorrespondents Associationof Nigeria (CICAN) Abujachapter in her office.

Chukkas-Onaeko will writeto some insurancecompanies on how theinsurers can work with theFund to insure some of itsfacilities and facilitators.

“We are planning to buildon our partnership withinsurance companies. We

want insurance companies tocome up with a kind ofproduct that will cover ourfacilitators as trainers trainour trainees in our variouscentres.

“ITF is committed tocontinuous development ofhuman capital to adequatelyadvance human resourcepractices in Nigeria andaccelerate the level ofcontribution in nationaldevelopment. We have fivevocational training centres indifferent states. We arepartnering with othertraining institutions bothinside and outside Nigeriaand the aim is to provideinternationally acceptabletraining for Nigerians so thatthey can use the certificatesearned anywhere in theworld. It is only when we dothis that our people canleave Nigeria and get goodjobs outside the country. Wewant to empower people that

can work locally andinternationally”

She said the fund hadestablished collaborationand networking with otherinstitutions and agenciessuch as the GermanChamber of Crafts andCommerce to trainapprentices in line with

German Dual System.,SENAI in Brazil, Instituteof Technology Engineeringand Education Services(ITEES) in Singapore,Galilee InternationalM a n a g e m e n tInstitute(GIMI) in Israel,the SURE-P, Dangote, theNigerian Employers

Consultative Association(NECA), ManufacturersAssociation of Nigeria(MAN), Cement TechnologyInstitute and the AjaokutaSteel Rolling Company.

The whole aim of thecollaborations, she said, is tosee a revitalized economy asevidence from developedand emerging economiesshow that requisite skillsconstitute a major platformfor attaining sustainableeconomic development.

Use of US Dollar in Zimbabwe marketstabilises CRe operations – MD

Mozambique, Zambia andSouth Africa, noted that theuse of the US dollar inZimbabwe had stabilised thefirm’s operations.

“In terms of using the USdollar for us, we convey ourpremiums and when weaggregate the average, wereport in Naira. The issue ofcurrency losing tractionaffects us in other markets.Premiums paid in US dollar

boost us when translated intothe group rate,” he said.

He said although thecurrent focus was onconsolidating the firm’sposition in Botswana, therewere concerted efforts to dealwith regulatory challenges soas to operate directly fromZimbabwe in the near future.

Oyetunji said Zimbabwewas an important market forthe company and was thethird largest market in Africain terms of premium income.


CMYK

E-Commerce

“Who ever reads historywith application will perceivethat the same events are oftenrepeated and that we needonly change the names of theactors. Frederick the Great,1712-1786, (VANGUARDBOOK OF QUOTATIONS,VBQ, p 92.)

Another economic waris about tostart in Nigeria. The

war will be about MinimumWage, MW. The states wantto renegotiate it, meaningreduce it. Labor also wantsto renegotiate it, meaningincrease it. Renegotiationseems to be the only pointof agreement; it is also thebattle ground. On the faceof it, one would assume thatthis is only “a matter ofcash”. But, it is more thanthat. The very existence ofstates and local governmentsis threatened by this conflict.

The first sounds of the2016 war involving thegovernments and Labor havealready been heard from mostof the state governors –

Minimum wage and the inevitablebankruptcy of state governments

minus three dissenters,namely Governors Wike,Fayose and Oshiomhole.Wike, as everybody knows,faces another election andcannot be seen to be anti-labor. Self-interest is themotive here. Fayose, weknow, loves to fish in troubledwaters; while Oshiomhole iscaught in the trap of his pastas a labor leader. The formerlabor leader cannot be seento be forsaking the peoplewho brought him intoprominence. At any rate hehas only seven months to go;he can leave his successorwith the problem when hegoes. That is the worst formof political cynicism.Irrespective of how the threegovernors arrived at theircurrent positions, they can beregarded as traitors to thecause of the othergovernments. They mayeventually regret their dissentfrom the majority.

Let me declare, up front,that I strongly believe that thetwo sides are engaged in awar that would end up in

mutual destruction — theywill also destroy the states,economically, as we knowthem now. Most states arealready tottering on the brinkof bankruptcy with the currentMW pegged at N18,000 permonth. Many will grind to ahalt by the second quarter of2016 if they continue to paythe current MW withoutretrenching staff. Anyincrease in MW will onlyhasten the day of doom.

The case for the governorshad been made explicitly bythe Chairman of the NigeriaGovernors’ Forum, NGF, andZamfara State GovernorAbdulaziz Yari when he said:“What we said is that thewhen the National Assemblyenacted the law of payingN18,000 minimum wage, oilwas about $118 per barrel andtoday oil is sold for $41 perbarrel…So, if it continues,definitely we will find itdifficult to continue….Thereceipts from FederationAccount show that some[states] received N400million, N500 million; some

others received N55million…Not even the salary[can be paid], their pensionis over a billion. So how canwe continue borrowing..?”

The states and the Federalgovernment ran into troublevery early this year. In areport titled “FG recordsN1.3tn revenue shortfall inthree months” by IfeanyiOnuba, in PUNCH, May 7,2015, Nigerians were told that“The persistent drop in oilprices and low receipts fromnon-oil sources may have ledto N1.3tn shortfall in revenueaccruable to the federationin the first three months of thisyear. The report furtherpointed out that “the NationalAssembly, while passing the2015 budget last weekapproved a benchmark oil priceof $53 per barrel.”

Meanwhile, the revenuegenerated for the first threemonths of 2015 were as follows:

January N416.09bnFebruary N401.46bnMarch N315.05bnAccording to Dr Ngozi

Okonjo-Iweala, Minister ofFinance, “in April, we had toborrow to cover up some gap.” The chief reason forborrowing was the depletion ofthe Excess Crude Oil Account,ECA, by November 2014. FromJanuary till now, the price ofcrude oil had stayed below $53per barrel and in the lastquarter of this year, it hadaveraged just about $42 perbarrel. The consequences ofthis were made clear in the

September 2015 revenueaggregates which came toN389.94bn, less than theJanuary and February figuresand far off from the budgetedN815bn per month.

Things can only get worsein 2016 as the price of crude isset to decline even furtherbelow $40 per barrel andvolume is also likely to drop.States of Nigeria will becollecting about 40% of theaverage monthly allocationsfor 2014, which was our secondbest year in history. Comparedto 2013, the states will befortunate to receive 35% of thatglorious year. With many statesdepending on the revenueallocation from Abuja for closeto 95% of their income, it isclear that Governor Yari hadspoken the truth. But, sadly,that is not a truth which laborand their mindlesssympathizers want to be told.Forgetting that organized laborconstitutes less than five percent of the population of anystate, they insist that the statesmust go bankrupt just to pleasethem. Civil servants arethreatening to close downstates.

That only demonstrateshow desperate the situationhas become. Shutting down astate will not produce moneywhich the states don’t have. Atany rate, where were the civilservants when some of theirgovernors were incurring hugedebts to fund “innovative”projects?

Stories byJONAH NWOKPOKU

Kaymu tackles pay-on-delivery, partnersInterswitch on e-payment

In a bid to discouragepayment on delivery

considered one of thechallenges of e-commerce inNigeria, online marketplace,Kaymu.com.ng haspartnered Interswitch toprovide electronic paymentoptions for its customers.

Kaymu said through the

partnership, hundreds ofthousands of customerscurrently conductingbusiness transactions via theKaymu platform areprovided with a reliablealternative pre-paymentsolution.

Speaking on the

partnership, ManagingDirector of Kaymu Nigeria,Sefik Bagdadioglu said:“Trust is a major issue in e-commerce and we take thisvery seriously at Kaymu. Itis an essential component inevery part of the transaction,from honest product

descriptions right through toreliable payment options.This necessitated apartnership with Interswitchto promote a secure andenabling environment forpeople to make pre-payments for productspurchased on Kaymu.”

According to Bagdadioglu,the primary focus of thiscollaboration is to bringeven greater convenience tothe customer. By partneringwith Interswitch to createmore accessible paymentchannels, Kaymu is furtheropening up the e-commercespace to all consumers.

“By working with like-minded partners, we areoffering the Nigerianconsumer easy, secure andmost importantly freepayment options with theaim to continue to pioneerthe Nigerian onlineecosystem throughinnovation,” he said.

He added that, “The pre-payment gateway promotesbusiness transactions acrossthe country via the Kaymuplatform. Now, customerscan make secure paymentsfor products they desire fromthe comfort of their homesor offices irrespective oflocation and sellersencouraged to ship productsoutside of their states,”noting that “Kaymu’spartnership with Interswitchhighlights its commitmenttowards developing effectivepayment solutions gearedtowards strengtheningcommerce and developingthe country’s economy.”

French premium cabletelevision channel,

CanalPlus Group andNigeria’s mainstream onlinestreaming video on demand,iROKO have entered into adeal to create and launch thefirst FrancophoneSubscription Video onDemand, SVOD serviceaimed at bringing affordable,popular mobile TV contentto French-speaking Africa.The partnership which wasannounced last week as partof a multi-million euro dealwill see the two parties buildthe mobile-first AndroidApp with downloadfunctionality to be launchedin the coming months.In a statement, iROKO saidthe service which will be

CanalPlus, iROKO launch video service for Francophonecountries

designed to optimize dataconsumption, will be aimedat building a new mobile-only subscriber base acrossFrancophone Africa. Thestatement noted that the

partnership with CanalPluswas inspired by the fact thatthe group now owns andbroadcasts the largestcatalogue of African content,including Nollywood films

and TV series, Africanhomemade series and showsand South-American TVNovelas, for French-speaking Africa.

E-commerce solutionprovider, Slimtrader,

has launched a White LabelRewards scheme, theMo’Rewardz Club, for itsecommerce platform,MoBiashara.MoBiashara is introducingthe add-on loyaltyprogramme tosimultaneously rewardguests and hotel staff forusing the e-commerceplatform.In a statement, Slimtradersaid: “In stark contrast to

SlimTrader launches white label rewards schemetraditional loyalty schemes,where customers arerewarded for their loyalty toeither a hotel chain or a thirdparty booking site,Mo’Rewardz is brand & saleschannel agnostic, allowingtravellers and hotels toaccrue points via any first orthird party sellers that usethe MoBiashara onlinereservation system. Atpresent, these include TripAdvisor, HotelNowNow,Lagos Oriental Hotel, ProteaHotels and the Maison

Fahrenheit Hotels. Guestsare rewarded with points foreach reservation, which canbe used towards futurereservations, to buy mobileairtime, pay bills and caneven be cashed out by theguest. Front desk staffreceive loyalty points forcreating reservations on theMoBiashara for HotelsAdmin area and checking inguests with the system whenguests arrive on the hotel’spremises.”


Economy

Amidst sustained highliquidity in thebanking system

financial experts areexpecting developments inNigeria’s fiscal policy 2016and the internationalfinancial markets to shapeinvestment yields positivelyin December 2015 and firstquarter 2016.

A total inflow of aboutN890billion is expected to hitthe money market from thevarious maturinggovernment securities andFederation AccountsAllocation Committee,FAAC, in the month ofDecember 2015.

Expected outflows from thevarious sources such asgovernment securities andstatutory withdrawals areestimated at N577billionwithin this month, leading toa net inflow of aboutN312billion.

Though, according tofinance industry operators,this analysis does not includethe CBN’s interventions atthe inter-bank segment ofthe foreign exchange marketby the Central Bank ofNigeria, CBN, and the CashReserve Requirement (CRR)total liquidity in the systemis still expected to exceedN1.0 trillion except if theCBN conducts Open MarketOperation, OMO, to mop upthe excess cash during themonth.

With this situation financialanalysts expect yields on fixincome securities to rise inthe month of December.

Analysts at FSDHMerchant Bank said duringthe weekend that higherincrease in the longer datedsecurities is more likely thanon the shorter datedsecurities.

According to them ‘’thehigher yields would bedriven by the need tomaintain positive real yieldby the investors, theexpectation of an increase inthe Fed Rate in the UnitedStates of America and theimpact of Nigeria’s fiscaldeficit for 2016'’.

But with the

Fiscal policy 2016, other factorsshape investment returns in Dec

BY EMEKA ANAETO,Economy Editor

Investment experts havecanvassed investment

education amongst not onlyinvestment managers butalso the investors in bothretail and portfolio.

This according to themwould address thechallenges of maintainingquality investments even incrises situations adding thatthe more informed theinvestor, the more balancedhis investment and the morevalue he derives frominvesting.

This was the thrust of the

implementation of theTreasury Single Account,TSA, yields in the NigerianTreasury Bills, NTB, may belower, according to theanalysts.

Consequently investors areseeking likely opportunitiesat the longer end of themarket while money tradersmay exit current position forprofit-taking.

Average yields on the FGNEurobonds were higher inNovember 2015.Consequently, the prices ofall the bonds closed lower inthe month of November,compared with October2015.

According to the analystsat FSDH Merchant Bank,‘’we expect the yields to risehigher in the month ofDecember because of themacroeconomic risks theNigerian economy still facesin the short-term. This is inaddition to our expectationsthat Dollar denominatedyield may increase becauseof the possibility of rate hikein the U.S.’’

Meanwhile the banks aretaking advantage of the hugeliquidity to trade their excesscash instead of lending to thereal sector of the economy asenvisaged by CBN’s newexpansionary monetary

policy stance.CBN’s Monetary Policy

Committee, MPC,announced an expansionarymonetary policy inNovember 2015, marking adeparture from its tightpolicy. CBN’s intention is tostimulate lending to the realsector, agriculture,infrastructure and solidminerals sectors. At the endof its November 2015meeting, the MPC reducedthe Monetary Policy Rate(MPR) to 11% from 13%. TheMPC also lowered the CashReserve Requirement (CRR)to 20% from 25%; andmaintained the LiquidityRatio (LR) at 30%.

Reacting to thisdevelopment, however,FSDH said “ while wesupport measures aimed atstimulating lending; ourconversations with banksreveal that they are cautiousabout lending at themoment. This is because ofthe impact of the currenteconomic conditions inNigeria on the ability ofbanks’ customers to repayloans extended to them.

“Many of the banks preferto play safe in the inter-bankmarket and governmentsecurities despite the lowrates and yields. We believethat the current low rates inthe financial system does notadequately compensate forthe risks in the economy toencourage lending.

“We believe measures tode-risk the economy wouldlikely stimulate lending.Some of these measures are:adequate security of livesand properties, improvementin infrastructure (roads, railsand power), enforcement oflaws and order anddiversification of theNigerian economy from oil.This will reduce the adverseimpact of low oil price on theeconomy.

“These measures are longterm in nature and areoutside the confine of themonetary authority. Theproposed expansionarybudget for 2016 may removeliquidity from the financialsystem. Necessary measuresare required so that bankswill not only have preferencefor government securities”.

Investment experts harp on economicvalue of Portfolio Management

BY ESTHERONYEGBULA

discussion of the maidenAnnual national conferenceof the Portfolio ManagementInstitute of Nigeria (PMIN),led by Dr Isaac OlusolaDada, its president andchairman in council.

In his presentation, Dadaurged Nigerians and thestock broking community totake advantage of theopportunity offered by thePMIN to boost their intereston portfolio management toreturn additional value totheir clients.

According to him, balancedportfolio creates room forattainment of investmentobjectives, creates more

wealth, and increasesexpansion of existingbusinesses while adding tojob creation by freeing morefunds for investments, thustranslating to vibrancy of thecapital market as well as theoverall economy.

Dada said investmenteducation thrives for thosethat want to securemaximum value on theirinvested funds, and thatwithout education onportfolio investment,balance in portfolioarrangement would not beachieved and this would notoptimize earnings frominvestment.

Mr Wole Adetunji,Chairman of the 2015 annualconference said the portfoliomanagement institute offersboth education and trainingto the qualified investmentcommunity that advancesportfolio investments toattract the best value frominvestible funds.

This is done throughtraining students in portfoliomanagement leading toexamination in variouscadres of portfolio investing.It also entails continuoustraining through seminarsand workshops.

Godwin Emefiele, CBN Governor


People in Business

Engr. Christopher Uchenna Nwadi is theManaging Director of Abuja-based NCR& Associates Limited, an outfit that specialises in

Properties, Estates and construction. In this chat withFinancial Vanguard in Abuja recently, the PropertyConsultant speaks on why he ventured into the propertybusiness, the challenges and says his love for real estateand the desire to provide good and affordable housing forNigerians made him go into the real estate business.

Excerpts:According to Engr. Christopher Nwadi, after his primary

We’ll meet housing challenges ifgovt is....— CHRISTOPHER NWADI

school education at the ArmyChildren’s School in Yaba,Lagos, he proceeded to CMSGrammar School for hissecondary school education.Thereafter, he was admittedinto the University of Lagoswhere he read MechanicalEngineering. Upongraduation, he was posted toAbuja by the National YouthService Corps scheme forthe one year compulsoryservice to fatherland. Oncompletion of the serviceyear, he started his ownbusiness.

“Along the line, I wasawarded an honorarydoctorate degree in BusinessAdministration by theCommonwealth University,London and I am a UnitedNations Peace Ambassador. Ihave received so many otherawards,” he said.

Motivation: “I just have this love for

real estate. When I realisedthat Nigeria is lacking in thearea of accommodation,housing estates to be precise,I decided to go into the realestate sector. Again, I have

been a lover of real estate/property because as far backas 1980; I joined my motherin her real estate business.She is very passionate aboutthe business. You see, mymother is Yoruba, from Lagosroyal family so we have somany family lands that wehad to sell and being the firstchild, I always wenteverywhere with her to theextent that people calledmeMummy’s husband.

So as a young child, mymother took me along whileconducting her real estatebusiness so I became a loverof property.

“When I came to Abuja formy youth service in the late90s, I was posted to AbujaMunicipal Area Council(AMAC) for my primaryassignment. One of the firstjobs I did was construction ofcorner shops in Wuse Zone 3and I also designed andconstructed the overhead tankat Utako Market. I thank Godfor where we are today.

I have partnered with somany people in Real estatesuch as Pent House,Platinum Bank, Mortgage

Home etc.

Going into business:“I started this business after

my youth service. I startedfrom scratch and graduallybuilt up, building from onehouse to small estate. I lovebuying property. I buy landfrom speculators. I buy landand keep for like 10 or 15years and sell. I don’t believeanywhere is a bush. I canmake a city out of every bush

I can make acity out of anybush because Ihave seen itbefore; I wentto Dubai in the90s whenDubai wasnothing and Isaw Dubai grow

*Engr. Christopher Nwadi…Government policies have notbeen consistent

*Only through mass housing schemes like this can Nigeria be able to meet the housing challenges.

BY EBELE ORAKPO

Educational background:

because I have seen it before.I went to Dubai in the 90s

when Dubai was nothing. Isaw Dubai grow because Iwent to Dubai every year soI saw the city coming up. Iwas part of the people thatwent to see Living FaithChurch, Ota, Ogun State. Thatplace was a thick forest,today, it is a city so I haveseen bush turned to city. Iwas in Kubwa area of Abujain 1992-93, I saw it grow towhat it is now. I saw Abujagrow into a city so there isnowhere in Abuja that is abush. You know I grew up inLagos, I lived on themainland and I saw Lagosexpand to where it is today.”

Challenges:Speaking on the challenges

faced in the business, Nwadisaid: “One of the problems wehave in the real estate sectoris government policies. Thepolicies have not beenconsistent. A new ministerwill come in and truncate theprocess that has been onground and bring up his ownteam. A land that has been

allocated will bereallocated withoutgoing through theprocess of revokingbefore reallocation;they will justoverride theprevious allocation.Even when we areable to bring inforeign investors,once they come intothe country, beforeyou know it, within afew months, may bethe minister ischanged or there is atransition ofgovernment, thewhole thing will betruncated.

The only way acommon man canown property in acity like Abuja andmany places in

Nigeria today is throughmass housing schemes. Forinstance, in the FederalCapital DevelopmentAuthority (FCDA)allocations, if you want tobuy 100 acres of land now,you will pay about N5 billion.Without N5 billion, acommon man cannot own ahouse in that place. Theminimum price of a housethere is about N30 billion,”he stated.

“It is now that they havereallocated some placeswithin the area council thatpeople want to key into it anddo mass housing. They willtell us they have given us landfor mass housing but it isbeing sold to us. We buy forN3 billion or N4 billion sothere is no way we can meetup with the housingchallenges in Nigeria.Nobody should deceive us,we cannot meet up. The onlyway we can meet up is ifgovernment is consistent andis truthful and transparent.That is the only way that gapcan be bridged. Only then willwe be able to convinceforeigners to bring in money.

Another challenge is theinterest rates on bank loans.They are killing. Interest rateis about 25 per cent frombank to real estate. TheFederal Mortgage Bank istrying but they are not doingenough because they do nothave the resources.”

It will be recalled that in late2012, about 500 housingunits built by MinanuelInvestments Ltd (our clients)for low income workers, waspulled down by the FCTadministration over claimsthat they were built withoutapproval.

“We were able to go tocourt and the judgement wasin our favour. The land wasrestored and that increasedour client’s confidence inus,” he said.

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

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

(0805 220 1997)


Business & Economy

The crash in crude oilprices from over $145in 2008 to below $40/

barrel presently, hasinvariably reduced Nigeria’sexport earnings by over 50%;consequently, the significantdeflation in dollar income iscommonly blamed for thepersistent intense marketpressure on the Nairaexchange rate. Interestingly,this perception is, ironically,against, the actual reality thatthe Naira exchange rateremained static betweenN152-N160/$1, even when theforeign reserves in CBN’scustody exceeded $60bn.

Incidentally, after 2006, theIMF’s ‘Policy Support’recommendation to liberalisedollar supply and stabiliseNaira exchange rate, soonbecame an article of faith inCBN’s monetary policymanagement. Ultimately,almost 3,000 BDCs becamelicensed to sell weekly dollarallocations supplied fromCBN’s reserves. Curiously,dollar allocations to BDCsoften exceeded the monthlyprovision for the real sector,despite their indisputable roleas engine of economic growthand prime creators ofemployment opportunities.

Curiously, however, personalNaira debit cards wereactively promoted by thebanks, with CBN collaborationto enable Nigerians cash upto $150,000 from ATMs abroadat the official Naira rate, evenwhen it is clear that possiblyless than 1% of Nigerians earnN15m annually.

Clearly, such uninhibiteddollar supply clearly promoteswidespread moneylaundering and liberalimports of contraband whichundermine governments’declared intentions to supportlocal industrialists and createmore jobs. Ironically, whilebillions of dollars are offeredto the BDCs and Nigeriantravellers at official rates, somelocal manufacturers aredenied access to CBN dollarsand are therefore invariablyconstrained to fund theirdollar needs at over N240/$1,while other equally genuine

Is the economy poisoned byCBN $ hoarding?industrialists may also have toremain in bank queues forseveral weeks before theyobtain forex cover for theircritical raw material imports.

Besides, it is certainlyirrational for CBN to gleefullysell ‘our’ dollar reserves at facevalue to BDCs and tourists ,while government issimultaneously busyborrowing same dollarsexternally with anunnecessarily high cost.Nevertheless, the CBNremains resolute that its forexcontrol measures areabsolutely necessary toprotect the Naira exchangerate and by extension oureconomy and the welfare ofour people .

Evidently, however, thepresent wide differencebetween an official (read assubsidized) rate of N197 andthe open market price ofN240=$1 would expectedlycreate potentially seriousmarket distortions andthreaten economic andgeneral price stability. Theabove realitiesnotwithstanding, CBNmanagement proudlypositions itself as crediblyperforming its role as theconstitutional defender of theNaira Exchange rate withdollar reserves in its custody!Incidentally, however, if theslide in crude revenuepersists, Nigerians may beginto question why fuel imports,Corporate dividends andTechnical fees, whichconsume about 80% of ourtotal forex income, aresubsidized with cheaper forexallocations when a significantsegment of the real sector, isconversely forced to endurehigher black marketexchange rates to importthose critical inputs theyrequire to produce and createjobs locally. Regrettably, If this

imbalance persists, we mayultimately become helplessagainst the challenge ofcheaper imports of finishedconsumer goods flooding ourmarkets, forcing factoryclosures and throwing moreNigerians into an alreadysaturated job market.

Nonetheless, it is necessaryto examine how CBNaccumulates its dollars, sincethe Apex bank clearly does notengage in the production andexport of goods or servicesthat could sustainably fund itsrelatively high reserves base.Firstly, we may need to askwho actually owns thereserves in CBN’s custody?Indeed, if the NigerianFederation truly owns thedollar reserves in CBN’scustody, it would beunexpected and inexplicablefor government tosimultaneously resort tofunding its programmes withexternal borrowing withhigher interest rates wheninfact it has $30bn idledeposits, which earn minimal

or nil yield in CBN vaults andaccounting records.

Curiously, in 2013, formerPresident Jonathan, paid abusiness visit to China with adistinguished delegationwhich included NgoziOkonjo-Iweala, Finance andCo-ordinating Minister of theEconomy, and Lamido Sanusi,former CBN Governor; whilePresident Jonathan went inpursuit of a $3bn loanpackage for the enhancementof aviation, railway andmarine infrastructure fromExport-Import Bank of Chinaand China DevelopmentBank, Lamido Sanusi, theCBN Governor converselyreported that his mission wasto assess how some of theCBN’s surplus reserves ofabout $40bn could be held inalternative currencies such asthe Chinese Yuan. Clearly, theimport of the precedingscenario is that CBN reservesare not actually consolidatedto bring respite from thosesocial and infrastructuraldeprivations Nigerians suffer.Furthermore, what infact stopsthe Chinese Bank from sellingChinese Yuan or at bestborrowing Sanusi’s dollarreserves for below 3% andturning round to lend thesame funds to PresidentJonathan’s delegation with ahigher interest rate.

The begging questionhowever, is , how can CBNconfidently lay sole claim tothe dollar cache that is, in thelight of the preceding,obviously erroneously calledour National reserves.Evidently, the level of CBN’sreserves clearly has nothing todo with any direct economicactivity of the Bank.Instructively, therefore, theCBN consolidates its reservesby retaining Nigeria’s exportdollar revenue from crude oiland substituting Naira

allocations at its ownunilaterally determinedexchange rate before thedistribution of bloated Nairasums to the constitutionalbeneficiaries of the Federationpool.

So, while the three tiers ofgovernment are fed withincreasingly worthless Nairavalues, the CBN ‘ wisely ’keeps all the dollars we earn;consequently, any fortuitousincrease in dollar revenue forwhatever reason, will alsoincrease the burden ofsystemic Naira surplus whichultimately fires inflation andalso induces weaker Nairaexchange rates, as theresultant excess Naira supplychase the small rations ofdollars that the CBNironically auctions from timeto time TO DEFEND THENAIRA.

In addition, the subsistingNaira surplus unfortunatelyinduces, highly oppressivecost of funds and alsodiscourages investment andjob creation as the same CBNwhich initially instigated theNaira surfeit, impulsivelyspikes its benchmark interestrate to banks, to discourageconsumer borrowing andliberal spending as a strategyagainst a threateninginflationary spiral.

Technically, reserves arenormally defined as anyexcess to immediaterequirement; consequently,the real reserves we own arethose deposits which areconstitutionally consolidatedfrom any revenue earned inexcess of annual budgetprojections, and warehousedin the Excess Crude Accountand Sovereign Wealth Fund.Consequently, we may oncemore ask, who owns thereserves? Surely, it would beunconscionable if the threetiers of government alsosubsequently lay claim to allthe dollars in CBN’s custodyafter they have readilyaccepted and consumed thesubstituted Naira allocations.Surely, you cannot have yourcake and eat it.

SAVE THE NAIRA! SAVENIGERIANS.

Nonetheless, it isnecessary toexamine how CBNaccumulates itsdollars, since theApex bank clearlydoes not engagein the productionand export ofgoods or servicesthat couldsustainably fundits relatively highreserves base

Food security in Africa is setto become a major

investment theme as rapidindustrialisation andurbanisation across manyemerging economies places astrain on the world’s foodresources, according to a newreport byPricewaterhouseCoopersPwC.The PwC report released lastweek outlined how thecollapse in oil prices, aUS$35bn continent-widestructural food deficit andhuge potential to lift outputand productivity, have forced

Africa has potential to solve global food security crisis – Report

food security and agriculturaldevelopment to the top of thepolitical and economicagenda.Agricultural adviser to PwCand author of the report,Richard Ferguson said: “Theworld needs more food.China’s growing proteinneeds alone will require anarea the size of the UnitedKingdom (UK) to grow thegrains to support thatconsumption. And as moreindustrialising countries losethe ability to feed themselves,the world is going to lookincreasingly to Africa to be thesolution”.

He said: “For Africa to thrive,economically and socially,African food security effortsneed to become more urgent,more active and more focused.With some 400 million hectares of under-utilisedland on the GuineaSavannah, Africa representsan extraordinary resource notonly capable of supplyingdomestic needs for multipleAfrican nations but alsobecoming a major source ofworld food supplies. Africahas a once in a lifetimeopportunity to feed theworld.”

By Jonah Nwokpoku

Documents

CBN halts branch operations by bureaux de change