APRIL 25, 2016

CMYK

Continues on page 18

Operators of outdooradvertising businessin Nigeria say their survival is

under threat if government fails to cometo their aid, as they accuse the LagosState government of owing them overN1 billion.

The N1 billion is the total sumresulting from allotted sites for PresidentMuhammadu Buhari and GovernorAkinwunmi Ambode's 2015 electioncampaign, Financial Vanguard, FVauthoritatively gathered. The

practitioners under the aegis of OutdoorAdvertising Agencies of Nigeria,OAAN, among other things decried theinability of member companies andclients to access foreign exchange tobring in raw materials for production.

The Association also complained ofhigh rate of charges by states on bothredundant and occupied billboards.

President of the Association,Babatunde Adedoyin told FV that thesector is groaning under seriouseconomic crunch which is noticed onabout 70 percent of member companybillboards nationwide.

Adedoyin also noted that the present

economic situation is forcing clients tocut their advertising budget which hastaken toll on member companies.

Speaking to FV, the OAAN Presidentsaid: “The economy for us is in totalrecession, in a situation like this, thereis no way it would not affect our industry.As we speak, about 70 per cent of ourbillboards are redundant. Clients arecutting budgets. Some are not sure ofwhat they want to do this year and somecan’t even access foreign exchange tobring in raw materials and since they donot have raw materials they can’tproduce, hence they can’t advertise.

“For the first quarter of this year, there

are no media orders from mostcompanies, some of them are still tryingto put things together because of theuncertainty that we are facing today.That is the basic truth and I can’t startmentioning organisations. Some areeven owing the last two quarters of lastyear; I am talking about multinationals.”

Adedoyin went further to say, “theregulators are looking for money; LagosState Signage and AdvertisementAgency, LASAA is trying to collect moneyat all costs and everybody is looking forways to get money from operatorsbecause allocation coming from thecentre is little or nothing, therefore mostof them are now thinking that there areinternally generated revenues, IGR, andunfortunately those of us they are tryingto get the money from are having thesame problem.

“Our clients are not doing well, theyare not giving orders, they are notpaying. This is not peculiar to Lagos itis in all the states. Right now, our boardsare being pulled down in Kaduna,Rivers, Abuja and we have been to allthese places and the story is all the sameexcept that charges in Lagos is highermay be because they are the pioneer ofthese agencies. For sure, we don’t haveany sympathy from them, that is thetruth.”

On whether Lagos and the associationhave been able to strike a rapport, hequipped:

“First and foremost we have not settledanything with Lagos. We are stilldiscussing. We are trying to arrive at anamicable solution. We are praying andhoping that in a short time this wouldcome to an end. You know this is aprofessional association and as acompany you are compelled to practicein all the states of the federation. Wehave some of our members practising inthe East, in the West and those practisingonly in Lagos, and whatever policy thatwe have, members should be safewhether practising in Lagos orelsewhere. That is why we decided notto hold our annual general meetings inLagos alone.

"As I speak someone is in Kaduna andAbuja doing some discussion with theregulators there. It is a professionalassociation and the policy is the samewhether you are in Lagos, Abeokuta orUyo their problem there is our problemhere. Because today you might be inLagos and tomorrow may want topractice in Uyo."

BY PRINCEWILL EKWUJURU

Multiple woes hitoutdoor advert sector

TOUR: From left, Former Governor of Kebbi State, Senator Adamu Aliero; CBN Governor, Godwin Emefiele; Ministerof Agriculture, Chief Audu Ogbe and; Kebbi State Governor, Alhaji Atiku Bagudu, during the assessment tour ofANCHOR Borrowers Programmes in Kebbi State over the weekend.

Operators complain of unpaid bills, zero orders, regulatory issues

18 —18 —18 —18 —18 — Vanguard, MONDAY, APRIL 25, 2016

Cover

Continued from page 17

On what drives rates,Emmanuel Ajufo, VicePresident of the associationstated that "there was a fixedrate, but with the advent ofLASAA, the rate went up by over1000 per cent and so theregulators want to make money,but like we keep telling them,Nigeria today has oil but havenowhere to sell it.

“We are telling them to allowus pay to the extent we havealso received but they are notreasoning, and we must getthem to understand that. "Ifthey can take what has beenreceived, then they should alsoallow us to pay what we havealso received.”

Corroborating the President’sstatement, Ajufo said furtherthat the association has beenbattling with LASAA on theissue of vacant billboards.

He said: ”We are theendangered specie, whatevermoney we spend, come from theadvertisers.

“The regulators still insist thatwe must pay them the sameamount of money we pay whenthe billboards were occupied.Where do they expect us to getthe money from?"

On raging debt controversy,the VP admitted that membersare owing LASAA, but it is as aresult of charges on vacantbillboards.

“We are saying to LASAA thatwe did a job for them and wehad an agreement with peoplethat gave us the job and LASAAis saying that they do not knowthat agreement and we believethat government is a continuumand very soon this presentmanagement of LASAA will bea thing of the past. I do notknow why people do not learnfrom the past. I don’t knowOAAN will enter agreementwith somebody and when thecurrent leadership departs andanother comes in and it willbegin to say it doesn’t knowanything about such agreement.

We are still talking about thisthing and we expect LASAA toset aside those debts until weresolve them because we areclaiming that money and he issaying that he doesn’t knowabout the money and he is stilldealing with us on the accountof the money that we expecthim to pay us.

Continuing, the VP stated: “itis not possible for us not to owebecause we can’t walk into thebank and take a loan to pay forvacant billboards. We believe asregulators, they mustunderstand the environmentsthey regulate and they mustalso know that a percentage ofwhat we give to them come fromadvertisers and they(advertisers) have the right totake their money to anywherethey want. We are here todaytalking about this rate being toohigh and we are asking themto bring it down and let us payas we received, but they saidno.

“Presently, we are havingissues in Kaduna, don’t forget the present Kadunagovernor was the one who didwhat he did in Abuja so hewants to do the same thing inKaduna. They started by sayingbeautify the environment and atthe end of the day it is rateincrease and so it is very clear

we need to come down toaddress this issue."

LASAA’s defence:The said Lagos State Signage

and Advertisement Agency,LASAA, the agency saddledwith the responsibility ofregulating outdoor practice inLagos, was said to have embarked on Save Our Soulagreement on behalf of the APCto rally support for itscandidates both within the Stateand at the federal level throughthe provision of sites foradequate exposure.

Although the agreement wassaid to have been reached byboth the regulator and theoperators prior to the election,the new administration ofLASAA led by Mobolaji Sanusihas denied any arrangement ordeal claiming that the formerhelmsman, George Noah, actedon his own.

Sanusi while denying theclaim stated that the partymade available some funds forthe execution of the campaignand as such the immediate pasthead should be heldresponsible to account for it.

While LASAA under Sanusiis insisting that it was theoperators that owe it for thestated period, the operatorsbelieve the new administrationwas being unfair by asking themto go after Noah for thepayment when the agreementwas reached.

To the operators, it was quitesurprising that the same LASAAwhose staffers were privy to theagreement could make a U-turnon the issue.

The operators further revealedthat some members had torelinquish previous agreementreached with the PeoplesDemocratic Party (PDP) in orderto key into what the regulatorproposed to them.

Part of the agreement reachedbetween both parties, accordingto a source, include defrayingthe cost incurred by each of theoperators on the usage of theirsites for Buhari and Ambodecampaigns by clearing off eitherpart or all the debt owed.

Multiple woes hit outdoor ad sector

EntrepreneurialEntrepreneurialEntrepreneurialEntrepreneurialEntrepreneurialrevolution: The wayrevolution: The wayrevolution: The wayrevolution: The wayrevolution: The wayffffforororororwwwwward fard fard fard fard for Nigeriaor Nigeriaor Nigeriaor Nigeriaor NigeriaFor Nigeria’s and Africa’s women, youth, rural

populations, the urban poor, the underemployed andunemployed, the current economic realities offer no

hope for a change in their circumstances. Mass poverty isendemic across the continent, and shows no signs of waning.Most of Africa’s 54 countries are consistently listed amongthe low and low-medium human development societies. Whatis required to transform this situation is a radical break fromthe past. What is required is an entrepreneurial revolutiondevoted to providing goods and services that take advantageof the large domestic and regional markets and opportunitiesof a globalised economy. But this will not happen by wishfulthinking. It requires a profound shift in individual mind-setsand a fundamental reorganisation of government policies andpractices.

It will not happen overnight, but it can happen. Pursuingsuch a revolution, practical, directed steps can be takenimmediately to encourage the entrepreneurial vision, talentsand efforts of Nigeria’s, and Africa‘s populations. Theentrepreneurial revolution is key to poverty alleviation. Sucha revolution holds out a realistic hope for the future of Africa’s1 billion people.

Entrepreneurship is the surest way for a nation to meet thosegoals and to develop prosperity for the greatest number ofpeople. In fact, government activities should focus onsupporting entrepreneurship not just to meet thesemeasurable targets, but to unlock people’s mind- set, to allowinnovation to take place and to enable people to exercise theirtalents. In all people, you find different kinds of talents, andentrepreneurship is about harnessing those talents, andmaking sure that it takes people to another level in theirpersonal development. So, it is important for government todevelop the private sector and to create an environment thatenables entrepreneurs to flourish. We are focused on loweringthe costs of electricity, providing access to finance, buildingroads, and training managers.

Change has to start in the mind. And that is what we havebeen working on over time. Once the mind gets correct, therest becomes simple. This entrepreneurial mind-set mustinform our actions whether we are in the private sector,government, or civil society. This mind-set must inspire ourentrepreneurs to aim ever higher. It must compel our civilservants to reinvent government. It must encourage our civilsociety to work for the greater good. Ultimately, this mind-setholds the key to our prosperity, our development, and ourfuture.

Entrepreneur and government working together in public-private partnerships to pursue economic opportunities is theessence of the entrepreneurial revolution. The entrepreneurin his entrepreneurial activities can bring about increase inproduction and create employment, income and facilitate rapidgrowth of micro, small, medium, and large scale enterprise toreduce poverty and hunger among the people.

The World Bank’s country partnership strategy (CPS) forNigeria out lines basic requirements for sustainable growth:-Improving governance, Maintaining non- oil growth, andpromoting human development. The World Bank’s CPS andNigeria’s NEEDS strategies serve as a summary of keyinitiative that government must focus on in order to drive asustainable entrepreneurial revolution. These initiativesinclude:

· Creating a collective socio-economicatmosphere that encourages entrepreneurialdevelopment to its fullest and widest capability. Thisincludes tackling infrastructure deficits (in roads,power, and communication) that elevate the cost ofdoing business and mortality rates.

· Addressing systemic imbalances in terms ofpolicy design and implementation, together witheffective measures against institutional corruption.

INAUGURATION - From left, Victor Gotevbe, Secretary-General, Chartered Institute of StrategicManagers and Leaders, CISML Nigeria; Dr. Austin Izagbo, President/Chairman, CISML Africa;Dr. Hayford Alile, President-General, CISML Global and Prof. Joseph Mba, Registrar-General,CISML Global during the inauguration of principal officers of CISML Africa in Lagos recently.

We believe asregulators,they mustunderstandtheenvironmentthey regulateand they mustalso knowthat apercentage ofwhat we giveto them comefromadvertisers

Vanguard, MONDAY, APRIL 25, 2016 — 19

Economy

federation account by State andLGAs, while its IGR is not evenamong the top ten in the Stateby State list. Yes, why would thecore North be asked to collecttaxes when they can collect somuch from the federationaccount? Easy money. Even mysmall Kogi collects more IGRthan Katsina State. But KatsinaState ranks second when itcomes to sharing the allocationfrom the federation account byStates. So, to the core North, itis unitary fiscal government ornothing so that they cancontinue to control the federalpurse and appropriate it tothemselves using criteria likelandmass and census figures.

You just highlighted the realproblem with Nigeria. Peoplecan shout Sai Baba all theywant, there is no way in blueblazes someone like Buhari caninstill fiscal federalism into thesystem. To maintain its controlover Nigeria’s resources andmilitary, the North has tocontinue to uphold the myth ofbigger population whichjustifies their appropriation ofa lion's share of Nigeria’swealth. Anyone who thinksBuhari will bring about anyfundamental change is living ina fool’s paradise. Real changewill see the North losing all theirage long privileges. I don’t seethat happening at all.

Mr. President: Fiscal federalism willend Nigeria’s economic woes

Here are some interesting reactions to the issue raised on this column last Monday

Onu Igala

If the writer of this article saw the breakdown of internally generated revenues(IGR) by States, he would not have held his breath for Fiscal Federalism. If

the core North gives you fiscal federalism, what is then the attraction to seize federalpower by all means? Check this out, Kano State gets the highest allocation from the

Victor Inyang-EdungThe resources from Akwa Ibom

is what Kano is using to paysalaries, build roads andwhatever they call development,can you tell us what Kano andthe entire North is bringing tothe federal purse for sharing?Akwa Ibom, the rest of South-South and South East arejustified to collect 50 per centas it was before the civil war.

Matthews IThe problem does not so much

dwell on the absence ofknowledge or the unawarenessof our pitfalls as a people andnation but rather, on the non-existence of political and moralwill power to reason together asone people in resolving issuesconfronting us. Failure andinability to tackle the basiccauses of the so-called inherent,deep-seated and mutualdistrust rooted in our political,religious and ethnic trajectorywould continue to bog us downas an entity.

Of course, the major factor forour sundry predicaments lies in

our so-called leaders from allwalks of life – political, religiousand ethnic. Rather than seek orpromote causes for nationalunity, they would rathersponsor or lay foundation fordivisions for their ulteriormotives based on self-aggrandizement. Apt as theadvisory by the NationalEconomic Council, asencapsulated in this article, ongoing back to the basics of fiscalfederalism may seem to theentire developmental process ofthe nation, without genuinecommitment, this may wellseem like returning to thebridges that have been burnt.

DodoThis is very correct,

unfortunately, Nigerians areblind including their leaders.This problem, if not adequatelyaddressed, will affect ourchildren. Nigeria’s problem isnot about PDP, APC, religion ortribe. Buhari is not the solutionto Nigeria's problem. How longare we going to blame everyother person except ourselves?We are all responsible for thisvery unsustainable structure weoperate. Address this andchange our educational systemto focus on creativity and thingswill move in the right direction.Alternatively, we can continueto live in self denial. I repeat,Nigerians are blind. Take it orleave it.

Eri KingdomFiscal Federalism must also

include total deregulation of thetelecom sector. Some will arguethat at current stage, the sectoris already deregulated, but acloser look at it will show moreneeds to be done. A situationwhere five network providers

occupy a space for 100 millioncell phone subscribers isunacceptable. In fact, Nigeriawith its large population, needsa minimum of 50 networkproviders, an average of onenetwork provider per state inthe federation. Any networkprovider with two million+subscribers can sustain itsbusiness. States should beallowed to attract whicheverprovider they deem fit.

OkpomO Prince YusufThe regions that suffer the

most in this current lop-sidedarrangement must organisethemselves to get what theywant, whether any other regionagrees or not. They haveeverything at their disposal.

Oshimili OlatubosunPMB cannot deliver Nigeria;

he is part of the problem. Hewill never address thefundamental issue of true /fiscalfederalism, he can travel to themoon and borrow any amountor arrest all the thieves, yet hecannot deliver Nigeria from itscurrent problems.

Of course, themajor factor for oursundrypredicaments liesin our so-calledleaders from allwalks of life –political, religiousand ethnic.

Of all the Issues thathave threatened thestability of this

country- religion, ethnicity -there has been none as virulentas oil. This threat has beenpotentiated by the manner inwhich this product has beenadministered andmismanaged.The effect of thismismanagement has speltdoom for our economy andbrought total discontent to thepeople of the Niger Delta.When militancy and thedemand for resource controlfirst started, the rest of thecountry accused the people ofthe region of wanting tosecede. But, as I have hadoccasion to state in the past, itwas never the intention of thepeople of the region to secede.Rather our worry, which tilltoday has not been adequatelyaddressed, was, and remains,the fear that it is the rest of thecountry that has a hidden

PIB: Need for even handednessagenda toward our oil. Thesuspicion has been expressedthat the rest of the countryintends to exhaust the oil andgas in such an uncaringmanner as has left the regionenvironmentally devastated,and at the end of the day bidus good bye.We have therefore soughtguarantees that this will nothappen but none has beenoffered. We have soughtmeaningful participation ofthe States and localcommunities in the oilindustry and this has beenstiffly resisted. What we haveinstead is a contrivance calledPetroleum Industry Bill (PIB).The 1999 constitution ofNigeria as amended is veryclear and states as follows:“Notwithstanding theforegoing provisions of thissection, the entire property inand control of all minerals,mineral oils and natural gasin, under or upon any land inNigeria or in, under or uponthe territorial waters and theExclusive Economic Zone of

Nigeria shall rest in thegovernment of the Federationand shall be managed in suchmanner as may be prescribedby the National Assembly.”Why is the National Assemblyin such a hurry now toregulate the management ofmineral oils only and not theother minerals with whichNigeria is so abundantlyblessed?The Chairman of the House ofRepresentatives Committee onPublic Petitions, Hon UzomaNkem Abomia, was reportedas saying that the newPetroleum Industry Bill (PIB)proposed by the Nigeriansenate is skewed in a mannerthat would breed moretroubles and restiveness in theNiger Delta region, instead ofsolution.I have read such screamingheadlines as: “Plateau toexplore solid mineral”;“Ondo partners US firm onbitumen exploitation”; “PIB:Nigeria mulls 40% sale of newoil firms”.There is also a determination

to unbundle and completelyreorganize NNPC. It has alsobeen reported how “Expertsmake case for solid mineralpolicy”. The Hon. Minister forSolid Minerals, Dr Fayemi hasbeen quoted as saying “Thereis nothing in any law in thiscountry that prohibits Statesfrom being active participantsin the development ofminerals endowed in theirStates”. The Hon Ministerwent on to say “However, theFederal Government mustactively encourage States toplay a part. If anyoneimagines that simply becausesomeone has license (he) canjust enter and start operatingwithout some level ofengagement with the localauthorities; it’s a misnomer.This is not the intention of ourconstitution. It is the residueof our authoritarian past thatis still allowing people to feelthat that is what exclusivityrefers to.”Why has this never been sowith oil and in what way is thePIB expected to correct this

anomaly?With the industry in a flux andwith heightened activity in thesolid mineral sector there is acompelling demand for evenhandedness in the formulationof policies to govern allminerals, solid as well as oil.The Petroleum Industry Billtherefore should wait and letthis country make up its mindabout how all minerals in,under or upon land or waterin Nigeria are to be uniformlyadministered for the good ofall.Whatever else we do not do,in the long run, the aim mustbe to put the country back onthe firm compass of true fiscalfederalism. There can be nodoubt that all these agitationsfor secession, renewedmilitarism and even maybeBoko Haram, have their rootsin the fault lines of ourdistorted and fracturedfederalism.

* Obong Victor Attah isformer Governor of AkwaIbom State

By VICTOR ATTAH

20 — Vanguard, MONDAY, APRIL 25, 2016

Business & Economy

The Consumer ProtectionCouncil, (CPC) ,

weekend, clamped down ontraders at Oregun area ofLagos state for selling fake gasfilters and other mechanicalproducts.

Selling fake products in themarket, CPC said contravenesconsumers’ rights to value for

CPC clamps down on fake gasfilter traders

By FRANKLIN ALLI

money.The Head of Lagos

Operational Office, CPC, Mr.Joshua Nggada, who led theenforcement that lasted up toan hour, said CPC has the

mandate to protect theinterest of the consumers andpromoting their welfare.

He said that the Council isdetermined to make sure thatall products that are

hazardous and substandardare removed from the markets.

According to him, this isdone through routinesurveillance and consumertips from the public.

He informed that the councilhad received consumer tipsthat fake fleet gas productsand filters are being sold incertain locations in Lagos,especially in Oregun, Ikeja

“We went into surveillanceand discovered that severaloutlets are selling thesecomponents that haveidentified some of the shopswith what they are selling.After the due diligence andwe have identified the source,we have to now remove themfrom the market”, he said.

Similarly, the council’s Headof Surveillance andEnforcement, LagosOperational office, Mr.Camillus Anyawu who led theenforcement exercise toldnewsmen after the exercisesaid the enforcement was toprotect consumers’ interestand right.

According to him, manyconsumers are ignorant ofwhat they are buying butwhen they are sensitized, theyknow better.

“Education has to comefrom two angles because theperson selling has to informthe consumer what theproduct is all about. Theconsumers have opportunitiesto 3 Rs, repair, return orrefund but unfortunately,many consumers are notaware while traders too don’tgive room for such”, he stated.

The Acting Director-General of the

Standards Organisation ofNigeria (SON), Dr PaulAngya, has given reasons whythe agency ’s standardenforcers have resorted tochasing trailers and containerson the highways rather thanother less risky methods ofenforcing standards

Angya who was speaking tostakeholders in the nations’maritime sector at a forum inLagos, said the reason isbecause, contrary to generalimpression, the SON had longbeen sent out of the nation’sports, and had no alternativethan to seek other ways ofcarrying out its statutoryfunctions.

‘’As I speak to you, SON isnot at the ports. SON can onlygo the ports at the invitation ofthe Customs. We arebegging to be allowed to cometo the ports to do our jobs, butwe cannot force our way intothe ports.”

Angya said that result of thecurrent position of things is thatup to 60 per cent of thecontainers that arrive thenation’s waters leave the portswithout inspection by the SON,with obviously negativeimplications.

Angya saiD: ”Put us at theports, we will holdunscrupulous importers. SON

Why SON chases containers onhighways — Angya

was removed from the ports tofacilitate trade but that trade iskilling Nigeria and Nigeriansnow.

"We can’t continue like this.Our young ones can’t get jobsbecause there are nomanufacturing companies. Ourmanufacturers have gone toChina and other places.”

According to him, theComptroller of Customs hashowever been receptive ofSON’s initiatives for acollaborative way of policingthe ports more effectively,adding that modalities for thathad already been establishedin the course of recent meetingsand deliberations.

The Chief Operational Officer, BoschWorldwide, Dr. Michael Schoellhorn, has

expressed confidence in the Nigerianeconomy, saying its population and growthprospect is among other attractions thatpropelled investment of Bosch in the Nigerianmarket. While opening its first showroom inAfrica located in Lagos, Schoellhorn said hehas confidence in the Nigeria economy, andno doubt that the Nigerian market wouldbenefit immensely from the quality of productsand services Bosch is bringing to the table.

“We are expecting a lot in Africa and indeedNigeria considering the size of the populationand the potentials it has for growth. We haveno doubt that the Nigerian market wouldbenefit immensely from the quality of productsand services we are bringing to the table,” hesaid.

Also, the Head, Africa Region of Bosch, Mr.Novert Klien, who was also at the well-attendedceremony, said Nigerian consumers, wouldfind their array of quality home and kitchenproducts very useful and hard to resist.

We have confidence in Nigerian economy — BoschBy PRINCEWILL EKWUJURU Corroborating, Chief Executive Officer of

Pedini Nigeria Limited, Mr. Chiedu Nwokolo,said many of the products they are bringinginto the market are targeted at addressing theday to day challenges faced by manyNigerians especially with appliances used inkitchens. “At Pedini, we decided to partner withBosch in solving some of the problemsencountered by many Nigerians in the kitchenbecause they are the most reliable brand inthe entire continent in terms of durability,quality and technology.

“We are very confident of the Nigerianeconomy, the size of the market and also inthe quality and pricing of our products whichare tailored to compete favourably well in themarket. We intend to build between 50 to 100Bosch-branded stores across the country overthe next three years. This is to further servethe Nigerian public better,” he said.

However, the Managing Director of BSHSouth Africa, Enrico Hoffmann, said theproducts are “invented for life, adding “Boschhome appliances provide precision technologyand European design, which simplifies life inevery kitchen.”

The Managing Director ofGolden Chance Lotto,

Charles Arthur has said that theestablishment of the companyhas contributed immensely tothe development of man powerin the country.

Arthur said many youths havebenefitted from the jobopportunities provided by thecompany.

He stated this during theaward ceremony of the 30 Sub-Agent whom he claimed haveworked tremendously and wasable to meet a certain target thatwas given to them.

“Our company which isamong the big companies inNigeria, has changed so manylives, before now, you see a lotof youths underneath thebridges who steal and snatchbags from people because theyare hungry, but we empoweredthem through this Lottobusiness” he said.

All the awardees got differentprizes which ranges fromTricycle, double door deepfreezer and a Plasma Television.

According to him, the LottoCompany is now operating in28 states of the country and weare still doing more, this is thefourth time we would berewarding our agents.

He added that the GoldenChance Lotto Company is aregistered company with Lagosstate government and theFederal government.

Arthur urged the government

We're majoremployers of labour— Golden Lotto

By ONOZURE DANIA

Olam to invest $150min poultry sectorOlam International says

it is making $150 millioninvestment in animal feedmills, poultry breeding farmsand a hatchery in Kaduna andKwara state.

Olam CEO for AfricaVenkataramani Srivathsan,who disclosed this in astatement, said: “Domesticallyproduced meat is beinghampered by a lack of goodquality feed, support forfarmers and availability ofyoung stock, but consumptionis set to increase.

“By investing in poultry andfish feed, we can utilise thewheat bran from our wheatmilling operations, as well asmaximise our sourcingnetworks to buy corn and soyfrom local farmers. Ourinvestment in the hatchery willhelp boost poultry productionand, in the long run, helpreduce the country’s relianceon import.”

RECEPTION - From left: Director, Legal & Regulatory, Airtel, Shola Adeyemi; Chief Execu-tive Officer, Teledom Group International, Dr. Emmanuel Ekuwem with 1st Vice President,Association of Telecoms Companies of Nigeria (ATCON), Mr. Olusola Teniola during the Spe-cial Reception held in honour of the Communications Minister in Lagos.

Vanguard, MONDAY, APRIL 25, 2016 — 21

CMYK

Banking & Finance

VISIT - From left, ECOWAS Commissioner for Finance, Sesay Allieu, Managing Director ofEcobank, Mr Charles Kie chatting with President of ECOWAS, Marcel Alain de Souza andECOBANK Deputy Managing Director, Foluke Aboderin during a courtesy visit by Managementof ECOBANK to ECOWAS Secretariat in Abuja.

BY BABAJIDE KOMOLAFE

More than half of Africanbusinesses reduced

investments in capital projectsin the first quarter of the yeardue to gloomy economicoutlook and decliningbusiness confidence.

This was one of thehighlights of the latest GlobalEconomic Conditions Surveyconducted by the Associationof Chartered CertifiedAccountants (ACCA) and theInstitute of ManagementAccountants (IMA). TheGlobal Economic ConditionsSurvey (GECS) is the largestregular economic survey ofaccountants in the world.

Among other things thesurvey revealed that 55percent of African businessessaid that they were lessconfident about the economy,while 61 percent cut back oncapital investment.

The report stated, “China’sinvestment slowdown and theresulting collapse incommodity prices have hitbusiness confidence in Africahard. In Q1, 55 percent ofbusinesses said they hadbecome less confident aboutthe outlook – well above theglobal average of 48 percent.

“More firms in Africa thananywhere else (61 percent)were cutting investment incapital projects, and thecontinent is also the regionwhere businesses have thebiggest problems with risingcosts and foreign exchangemovements, with many of theregion’s economies sufferingsharp falls in their currenciesin recent quarters.

“The region’s largesteconomy, South Africa, is

African firms cut investments asbusiness confidence wanes —Survey

going through a particularlydisastrous spell. PresidentZuma is under pressure toresign, and a once-in-a-century drought is sendingfood prices soaring.

“The situation is not muchbetter in Nigeria, Africa’ssecond-largest economy,where speculation of currencydevaluation is mounting andthe government is struggling

to cope with a collapse in itsrevenue as oil prices havefallen.”

At the global level, TheGECS showed that in Q1businesses were lessoptimistic about theirprospects than at any othertime in the past four years.Almost half of the firmssurveyed said that they weremore pessimistic about their

prospects than they werethree months earlier. Lessthan one quarter had becomemore optimistic.

It also showed that morethan half of firms are eithercutting or freezingemployment, while only 14%are increasing investment instaff. As many as 42 percentof firms are cutting back oninvestment, up from 40percent in Q4 2015. Almostevery region saw an increasein the number of businessescutting capital expenditurelast quarter, with NorthAmerica the most notableexception.

Commenting on theoutcome of the survey, “ToyinAdemola, Country HeadACCA Nigeria said, “Theeconomic issues facing theworld are not limited toNigeria, it is the emergingmarkets more generally thatare suffering most from bottomlines being squeezed. Wagesare rising rapidly in manyparts of the world andbusinesses are finding itharder to cope as revenuescome under increasingpressure. The sharp dropagainst the dollarexperienced by manycurrencies will also havepushed up costs, makingimports more expensive andraising the value of dollar-denominated debts. All thesemean that firms in emerging-market economies are verypessimistic about theirprospects.”

Eurozone financeministers say they have

made progress in talks aboutthe bailout programme forGreece. But they said after ameeting in Amsterdam onFriday that further work wasstill needed.

They said they are hopefulthat an agreement canreached in the next few daysand are ready to call anextraordinary meeting. Thatwould pave the way for thenext payment under thebailout.

Once again a review of theGreek government’s policieshas been delayed by months.So has the next payment offinancial assistance. Thisreview, the first under a newbailout of more than 80billion Euros and agreed inAugust 2015, was originallysupposed to be completedlast year.

The tone emerging from ameeting of eurozone financeministers was, however,relatively positive. There hasbeen progress, theyacknowledged, but they wantto see more in a number ofareas, includingprivatisation and the strategyfor the government finances.

That latter of these is alsoat the centre of a disputebetween the financeministers and the EuropeanCommission on one side andthe International MonetaryFund on the other.

The IMF is sceptical aboutwhether the measures underdiscussion are sufficient tomeet the targets for reducingthe government’s finances -a surplus in the publicaccounts before interestpayments on its debtsequivalent to 3.5 percent ofnational income, GDP.

The IMF is also doubtfulabout whether it’s realistic toexpect that target to beachieved at all over a longperiod.

One way that the eurogroup is trying to narrow thegap with the IMF is seekingan agreement on measuresthat Greece wouldautomatically take if it missesits financial targets. If allwere to go to plan, theywouldn’t be needed, but theywould be available as abackstop if needed.

The IMF has anotherconcern. Its view is that debtrelief is needed and that’swhy it is not contributingfinancially to this, the thirdbailout, though it did providefunds for the first two.

Heritage Bank has introduced twocustomer reward programmes,

MyHeritageReward and HBConcourse,designed to appreciate and encourage customerloyalty.

While MyHeritageReward is a loyaltyprogramme in which customers winmouthwatering prizes as they use the variouselectronic channels of the banks, the HBConcourse is a meeting room fully furnishedwith relevant office equipment and designedto afford the small business owner or beginner,who are customers of the bank, space to holdbrief business meetings and conclude deals withhis own clients at absolutely no cost.

Managing Director/Chief Executive Officer ofthe bank, Mr. Ifie Sekibo, said that the twoprogrammes demonstrate, “Heritage Bank'scommitment to supporting customers in wealthcreation, preservation and transfer acrossgenerations.”

These programmes, he noted, are some of theinnovative ways through which we can showappreciation to our customers for being part ofour success story.” For MyHeritageReward,customers are required to sign up online on theplatform, www.myheritagereward.com, usingtheir mobile phone numbers, which enable thecreation of a customer profile with a pass-worded access. From this point on, the customerearns points which enable him to graduate fromclass to class while winning commensurateprizes as he actively uses the bank’s POS,

Heritage Bank introducesMyHeritageReward, HBConcourse

internet and mobile banking, ATMs and cardsamong other eBanking products.

The uniqueness of the MyHeritageRewardis in the ability to view milestone progressmade by customer like, bank transactionchannels, membership class, milestoneboosters and cashbacks as well as an inquiryservice that gives the customer access to pointbalance, ranking, rebate purse in addition toentertaining games and contests likeGoldfinger and Brain Quest among others.

The prizes to be won range from airtimeacross all networks, smart phones, business,shopping vouchers, generators, inverters toa brand new vehicle.

Apart from saving cost for the newcomer inbusiness and SMEs, the HB Concourse alsoprovides convenience for clients travellingout-of-State for business to naturally conducttheir meetings or appointments withoutworrying about office space among others.

To use these meeting rooms such customersof the bank will have to go through asimplebooking process online, which are mereformalities to avoid clashes of meeting times withfellow customers who also want to use the samefacilities.

These concourses are currently available infive key locations in Abuja, Lagos, Ibadan andPort Harcourt. Each concourse is furnished withoffice chairs, conference table, airconditioning,projector, flat screen TV, telephone, internet/Wi-Fi and crockery for tea/coffee.

Greece bailouttalks make‘progress'

22 — Vanguard, MONDAY, APRIL 25, 2016

CMYK

Banking & Finance

PRESENTATION - From left: Group Head, Retail Banking Unit, Skye Bank Plc., NkolikaOkoli; a winner of N100,000 consolatory cash prize, a Jewelry Seller, Okoro Akonam and TeamLead, Small Business Group, Osolo Way Branch, Skye Bank Plc., Femi Shobande at the tenthcheque presentation to winners in the ongoing Skye Bank’s “Reach for the Skye” MillionaireReward Scheme held in Lagos on Thursday, April 21, 2016.

‘Naira/Y‘Naira/Y‘Naira/Y‘Naira/Y‘Naira/Yuan swuan swuan swuan swuan swap'll increaseap'll increaseap'll increaseap'll increaseap'll increaseNigeria’s dependency on China’Nigeria’s dependency on China’Nigeria’s dependency on China’Nigeria’s dependency on China’Nigeria’s dependency on China’Neutral effect on exchange rate

STORIES BY BABAJIDEKOMOLAFE

The Naira/Yuan currencyswap agreement

between the federalgovernment and Chinesegovernment will increasedependency of Nigeria onChina, said FinancialDerivatives CompanyLimited (FDC).

In an analysis of the dealtitled: 'Naira /Yuan CurrencySwap: The Mother of allDeals - Nothing to Cheer’,the Company stated that,“While the objective of theswap deal is to correct thetrade imbalance, the reality isthat the deal will increase thedependency complex andparasitic relationshipbetween Nigeria and China.Despite its drawbacks andmore important, it will providea negotiating platform forNigeria to extract better tradeand investment concessionsfrom other Westerncountries.”

The Company also notedthat currency swap will nothave any effect on theexchange rate of the naira,and it would not help curbinflation.

“Will this transaction makethe Naira stronger in theForex markets? No. Theimpact on the currencypressure is neutral. This isbecause the swap deal doesnot increase the inflow offorex into the country.

“Will this deal help curbinflation? No. This is becausethe root cause of the spike inconsumer prices is thescarcity of forex exchange

and other cost push factors.The currency swap deal hasnot addressed this issue.Therefore, the problem ofsoaring inflation remains.”

Explaining how the swapwill work, FDC said, “TheCentral Bank of Nigeria(CBN) will convert a certainportion of its external reservessay $3bn to Naira (N200 x$3bn = N600bn) and depositwith the Peoples Bank ofChina. The Chinesegovernment will give Nigeriathe Yuan equivalent of $3bn. Nigerian trader wants toimport spare parts from China

will approach Nigerianbank, and pay N40m for$200,000 (at N200/$). The Nigerian bank will open letter of Credit (L/C) confirmed by Industrial andCommercial Bank of China(ICBC). The Nigerian bankcredits ICBC with N40m,goods are shipped anddocuments negotiated. ICBCis long Naira and short Yuan.

If ICBC needs to importgoods from Nigeria i.e. oil at$43pb, it will pay NNPC withnaira at $43pb x N200. Consequently, Nigerian oilexports to the rest of the worldwill reduce by the volume

sold to China. Nigerian Yuanearnings increase and dollarrevenue reduces by the sameamount. Impact neutral onexternal balance. Nigeriawill end up importing morefrom China and selling moreto China. EUREKA! EUREKA!

It is the economic equivalentof Archimedes’ principle: The Yuan volume is the objectthat is immersed in theNigerian dollar pool. Theamount of Yuan will be equalto the dollars displaced. Inthe end oil revenue will notchange and import volumewill not. Destination ofexports and origination ofimports is all that will change.”

The Company noted thatwhile the currency swap will,“boost bilateral trade volumesbetween Nigeria and China, itwill also increase dependenceon China for imports of rawmaterials and equipment.

Cost of funds areexpected to fall this

week due to inflow of N396billion from statutoryallocation funds and paymentof matured treasury bills.

Meanwhile, FederalGovernment bond prices fellsharply last week due toincrease sell pressure fromfund managers.

In its review of activities inthe interbank bank moneymarket last week, Cowry Assetmanagement Limited notedthat “In the just concludedweek, Nigerian InterbankOffered Rates moved inmixed directions amidtreasury bills auctionsaccompanied by FederationAccounts AllocationCommittee (FAAC)disbursement of N299.7billion. “During the week,Central Bank of Nigeriaauctioned Federal

Fortis MFBgives outN15bn loan to64,000customers BY EMMA UJAH, ABUJABUREAU CHIEF

Fortis MicrofinanceBank Plc has given out

a record N15 billion in loansto 64, 000 customers inaddition to financiallyempowering over 100, 000clients.

Managing Director/ChiefExecutive, Fortis MFB, Mr.Tiko Okoye, disclosed this inAbuja, at the weekend duringthe presentation of the ClientProtection Certification by theSmart Campaign.

According to him, Fortis hasmaintained a leadingposition among theFicrofinance Banks (MFBs),in the country, been the firstto receive the ClientProtection Certification by theSmart Campaign.

Speaking on the SmartCampaign Certification, theMD said, “Fortis is amicrofinance bank that takesgood care of its customersbecause customer interest isforemost in whatever we dohere.”

He stressed that the bankpays particular attention tothe successes of its clients anddoes much more than justmerely transactingbusinesses with them.

According to him, “Wehave always held a strongcommitment to protecting ourclients, but this independentvalidation lends credibilityand demonstrates to ouresteemed clients and ourindustry that we continue towork every day to improveour service and ourcommitment to best practicesin microfinance.

On the Smart CampaignCertification, he said, “Thecertification we have justreceived underscores ourcommitment to customers. We make sure that there istransparency in pricing. We make sure that there is nohidden condition in ourfacilities, as it is said, noreading between the lines. With Fortis, what you seeis really what you get.

“And we must thank ourpartners, FMO. T h e yhave been very crucial intaking us through theprocess. And again I saythat the Smart Campaign, theCustomer Protection Principle(CPP) is central to ouractivities in this bank.

Interbank rates to fall as N396bn boost market liquidity

Government Bonds (all re-openings) worth N167.52billion on Wednesday, 20April; viz: 91-day bills worthN36.79 billion (marginal rate(MR) rose to 7.88 percentfrom 6.10 percent); 182-daybills worth N35 billion (MRrose to 8.99 percent from 8.69percent) and; 364-day billsworth N95.73 billion (MRrose to 10.25 percent from9.49 percent).

“The outflows were offset byinflows worth same amountsand tenors; hence, NIBOR forovernight funds, 1 month and6 months tenor bucketsincreased w-o-w to 5.58percent (from 4.54 percent)and 10.43 percent (from 10.39percent) respectively whileNIBOR for 3 months and 12months tenor buckets fell to8.33 percent (from 8.38percent) and 12.35 percent(from 12.48 percent)

respectively.“Meanwhile, yields on the

Nigerian Interbank TrueTreasury bills increased for allmaturities on sustained selloffs – yields on the 1 month,3 month, 6 months and 12months tenors increased to3.90 percent (3.54 percent),6.81 percent (from 6.50percent), 9.43 percent (from8.88 percent) and 10.98percent (from 10.55 percent)respectively.

This week, N96.36 billion,274-day treasury bills willmature on Thursday, 28 April2016. We expect that thematurity coupled with theN299.7 billion FAAC inflowswill help boost financialsystem liquidity and reduceinterbank offered rates.

“In the just concluded week,Federal Government bondprices depreciated (and yieldsincreased) on sustained bear

run. Week-on-week, 20-year,10.00 percent FGN JUL 2030debt lost N1.91 (yieldincreased to 12.97 percent);the 10- year, 16.39 percentFGN JAN 2022 paperplunged N3.25 (yield rose to12.50 percent); the 7-year,16.00 percent FGN JUN 2019instrument depreciated byN2.47 (yield increased to12.24 percent); the 5- year,15.10 percent FGN APR 2017paper declined by N0.25(yield upped to 10.85percent); while the 3- year,13.05 percent FGN AUG 2016bond shed N0.41 (yieldclimbed to 7.43 percent). Atthe London Stock Exchange,traded FGN Eurobondsweakened amid profit takingactivity – the 10-year, 6.75percent FGN JAN 2021 paperand 10-year, 6.38 v JUL 12,2023 bond lost $0.38 and$0.43 respectively.

Vanguard, MONDAY, APRIL 25, 2016 — 23

CMYK

Union Bank of Nigeria Plchas said that its target

is to become one of the top tierbanks in the country by 2020.

The bank further stated that itis poised to grow its customerdeposit by 20 per cent in 2016while significantly driving downcost and reducing its Non-Performing loans, NPLs.

The Group Managing Directorof the bank, Mr. Emeka Emuwa,who disclosed this at the bank’sfacts Behind Figures on theNigerian Stock Exchange, NSE,said the bank’s aspiration is tobe a highly respected bankinginstitution in the country byimproving on the quality of itscustomer experience, quality ofits earnings, clients’ base, itstalent, as well as the quality ofthe banking platform.

He said: “Looking into thefuture, we expect to grow deposita bit faster in 2016 because wehave already made a lot ofinvestments in alternativechannels, we have made a lot ofinvestments in our retail front,so we expect our customerdeposit to go up a little faster by15 to 20 per cent within the year.

“Our cost-to-income ratio, weclosed 2015 at 67 per cent. In2016, we expect that to be lessthan 65 per cent or 65 per centat most. So, we will focus ontaking out cost by being a bitmore disciplined aroundpurchasing and being a bit moredemanding from serviceproviders.

Return-on-equity, again, weclosed 2015 at eight per cent, andwe expect the number to pushupwards to between eight andnine per cent in 2016,” he said.

On reducing the Non-performing loans ratio whichstood at 6.67 per cent as at fullyear ended December 31, 2015,the UBN boss said: “As our loanbook continues to grow andgrow copiously, the ratio of non-performing loans to performingloans is expected to come down;that is what we see. In addition,for the loans are not performing,there are two things we aredoing. One is actively workingto make sure they perform andwhere they are not performing,we apply measures exclusive tous to get our money back. Wehave been able to use that in anumber of cases and it workedpretty well. That is how we seethe NPLs.”

According to him, the bank’srobust transformation plansinclude portfolio enhancementwhich will help it enhance itsbusiness model and drive marketpenetration.

UBN targets top tier 1position in 2020, togrow deposit by 20%

By NKIRUKA NNOROM

Five banks quoted on theNigerian Stock

Exchange, NSE haverecorded a total Profit AfterTax, PAT of N90.07 billion forthe first quarter,Q1 financialperiod ended March 31,2016, representing a drop ofN10.52 billion or 10.5 percent from N100.59 billion inthe corresponding period of2015.

The first banks areGuaranty Trust Bank, GTBankPlc, Union Bank of Nigeria Plc,Zenith Bank Plc, EcobankGroup, and United Bank forAfrica, UBA Plc.

Similarly, the five banksrecorded a total Profit BeforeTax, PBT of N106.29 billionfor the three months periodended March 31, 2016,indicating a drop of 11.15 percent from N119.63 billionrecorded in each of the banks’financial performance for thefirst quarter 2016 as releasedon the Nigerian StockExchange, NSE, last weekend,show that Guaranty TrustBank, GTBank Plc continuedto consolidate on its positionrecording moderate growthfrom its core bankingactivities.

However, decline in tradingand revaluation gainsoccasioned by ForeignExchange, FX paucity robbedoff on the impressiveperformance recorded with a4.6 per cent decline in grossearnings to N75.39 billion asagainst N79.02 billion in Q1,2015 . The bank recorded a6.1 per cent decline in PBT toN30.68 billion as againstN32.65 billion in 2015 and 3.6

Profits of 5 banks drop byN10.52bn in first quarter

By PETER EGWUATU per cent decline in PAT toN25.61 billion against N26.56billion in 2015. The bank alsoreported a post-tax Return OnAverage Equity ROAE of 24.19per cent and Return on AverageAssets, ROAA of 3.96 per centrespectively.

In line with the bank’s RiskManagement strategy, thebank approached its loangrowth with disciplinedstrategy, thus Non PerformingLoans (NPL) of the bank for theperiod under review is still wellwithin range at 3.51 per centand Net Interest Margin(NIM) for the period underreview declined marginally by9 bases points , bps to 8.12 percent from 8.21 per cent in Q12015. Commenting on the

financial results, SegunAgbaje, the ManagingDirector and Chief ExecutiveOfficer of GTBank stated that“Despite a slow start ineconomic activity in 2016and the extremelychallenging businessenvironment, the Bankrecorded decentperformance across keyfinancial indices during theperiod.” He added that “Weunderstand that there’s a lotmore work to be done, we arehowever prepared for thechallenges and opportunitiesthat lie ahead the 2016financial year.”

A review of the Union Bankof Nigeria Plc first quarterresults show that PBT

dropped to ¦ 4.7billion from ¦4.9billion in Q1 2015;excluding gain on sale ofsubsidiaries which increasedby 85 per cent to ¦ 4.7billionfrom ¦ 2.5billion in Q1 2015.

The bank’s PAT for the firstquarter 2016 was N4.72billion as against N4.91 billionin the corresponding periodof 2015.

Union Bank recorded grossearnings of ¦ 26.6billion asagainst ¦ 29billion in Q1 2015;excluding gain on sale ofsubsidiaries which was at parwith prior year at ¦ 26.6billion.

Interest income was up 5per cent to ¦ 21billion asagainst ¦ 20 billion in Q1 2015.This was as a result ofimprovement in asset yieldfrom 14.36 per cent in Q12015 to 15.65 per cent in Q12016.

Commenting on the UnionBank’s first quarter results,Emeka Emuwa, ChiefExecutive Officer said:”Ourfirst quarter results reflectsteady progress on theexecution of our strategicpriorities. The Bank’s core PBTin Q1 2016 is up significantlyby 85% to ¦ 4.7bn comparedto ¦ 2.5bn in the same quarterlast year. With the sale of non-banking subsidiaries nearcompletion, the Bank is nowfocused on growing anddelivering results through itscore banking business.

Customer deposits grew 9per cent in the year to March2016, compared to March2015, reflecting increasedcustomer confidence in ourservice channels, newproduct offerings and a re-energised brand identity.

Our priorities to sustaingrowth in 2016 remainfocused on growing ourdeposit base and newcustomer acquisitions, as wellas driving gains intransactional income.

First Bank of Nigeria, FBN, Limited saidit has advanced over N12 billion in

credit facilities to Small and MediumEnterprises, SMEs, in the country to supporttheir growth aspiration.

The bank also disclosed that it has disbursedabout N200 million to-date from the CentralBank of Nigeria’s N220 billion InterventionFund for SMEs.

The Deputy Managing Director, Mr.Gbenga Shobo, stated these at the bank’sEconomy & You forum with owners of smallbusinesses in Lagos.

He lamented the poor rate of assessmentof the SME Intervention Fund, saying thatit would have been higher, but for basicproblems associated with SMEs, especiallyunavailability of tangible collateral.

Shobo stated that guarantees is the way togo if lending to SMEs is to be increased,adding that most small businesses do nothave right structures on ground to attract

FirstBank advances N12bn loans to SMEs to drive growth

By NKIRUKA NNOROMbank lending.

“I think for us in Nigeria, we only determinewhether a loan is accessible or not accessiblebased on the pricing, but there are otherelements of lending that we need to look at.Apart from the pricing, the precondition by wayof collateral has to be available. Is it somethingwe all have.

“There are SMEs that don’t have tangiblecollateral which is what the banks are looking.So, the CBN Intervention Fund aside frommaking it available at a single digit of nineper cent also comes with some terms andconditions, which the banks and customersmust comply with. For example, you havesecurity, ie tangible collateral, you haveTreasury Bills and cash deposit. So do all SMEshave all these,” he queried.

“So, that is why the disbursement of thisFund has been very slow. We are not going toaffect that because it is not directly from bank’spursue. It is CBN Fund and CBN has saidthere must be collateral. If First Bank forinstance lends to a customer and the customersdoesn’t pay back, the bank is liable.

Corporate Finance

*CEO, NSE, Oscar Onyema *CBN Governor, Godwin Emefiele

24 — Vanguard, MONDAY, APRIL 25, 2016

Corporate Finance

BY PETER EGWUATU

In a bid to boostagriculture and

promote commodityexchange in Nigeria, theSecurities and ExchangeCommission (SEC) is set torevitalise commodity tradingin the capital market.

Already, the commission isreviewing the WarehouseReceipt Bill currently beforethe National Assembly andhas assured that it willactively advocate itspassage.

This is in support of thepolicy thrust of the FederalGovernment to encourageinvestments in theagricultural and solidminerals sectors in a bid toensure economicdiversification and deepencapacity across theagricultural value chain.

Director General of SEC,Mounir Gwarzo said thiswhile delivering a Keynoteaddress at a TrainingSeminar organized by AfricaExchange Holdings (AFEX)on Commodity Trading andRisk Management in Abuja.

He said the 10-year capitalmarket master plan whichthe Market is currentlyimplementing is theblueprint for the growth anddevelopment of the marketover the next decade andacknowledges commoditiesexchanges as critical forenabling investmentdiversification, riskmanagement, pricediscovery and transactionalefficiency and expressedstrong belief that to boostNigeria’s competitiveness, athriving commodities trading

SEC set to revitalise commodity trading to boost agriculture

ecosystem must bedeveloped.

The DG said “We believethis can be achieved byimplementing the followingstrategic initiatives: Build asupporting and functionalecosystem for commoditiestrading;

“Others are: Build Centre ofExcellence in areas ofcomparative advantage suchas for oil & gas, cocoa, etcDevelop efficientcommodities exchanges andtrading platforms, Sponsorlegislation to ensure Nigeria’scrude oil sales are traded onlocal exchanges and buildcapacity in commoditiestrading at the SEC andamong market operators”.

He said that as Nigeriapursues policies aimed atdiversifying the economy,creating jobs and hastening

socioeconomic development,it is becoming increasinglyclear that CommoditiesExchanges can play a crucialrole in actualizing these loftyobjectives as a detailedempirical study by the UnitedNation’s Conference on Tradeand Development (UNCTAD)analyzed the impact ofcommodities exchanges ondevelopment in emergingmarkets.

Gwarzo said Countries thatwere part of the study are alsoemerging countries with themost vibrant commoditiesmarkets such as India, Brazil,China, Malaysia and SouthAfrica. Among the manyinsights in study’s report isthe fact that commoditiesexchanges play a central rolein facilitating economicdevelopment especially byhelping farmers to enhance

their marketing and riskmanagement capacity (suchas reducing their exposure toprice and other productionrisks).

Nigeria he said, ranksnumber one (1)in globalexport rankings forcommodities such as kolanut,shea nuts and shea butter,cassava, and yams and alsofeature in top exporters forother commodities such ascocoa, rubber, oil palm,cashew and sesame seed.

“Our ginger is reputed topossess the best aroma in theinternational markets. Exportopportunities also exist for awide variety of otheragricultural commodities.This simply magnifies thepotential of our agriculturalsector to contributesignificantly to economicgrowth and development” he

StanfordSEED,Pan-AtlanticUniversity,otherspartnerTAMSsummit

SB Telecoms & Devices,organisers of the TimeManagement Summit, haveentered into partnershipwith Stanford Institute forInnovation in DevelopingCountries (Stanford SEED)and Pan-Atlantic University(PAU) to deliver TAMSSummit, its forthcominghigh-level time managementconference. Stanford SEED isa Stanford Graduate Schoolof Business-led initiativeintent on ending the cycle ofpoverty in developingeconomies.

Others partneringinstitutions are theChartered Institute ofPersonnel Management ofNigeria (CIPM), ConSat,TVC, Radio Continental andInspiration FM.

The theme of the summit is“From African Time” to “ToOn Time”: A paradigmShift.” At the TAMS Summitscheduled to hold 19th May2016 in Lagos, leaders ofthought from StanfordSEED, Pan-AtlanticUniversity, CIPM and otherreputable institutions as wellas the public and privatesectors of the economy willconverge to proffer solutionto our curious nationaldevotion to the African Timesyndrome. Speaking on thepartnership support, Mr.Afolabi Abiodun, CEO, SBTelecoms & Devices,expressed delight at thebest-in-class institutionalsupport garnered by theTAMS Summit. He statedthat participation andsupport from StanfordSEED, Pan-AtlanticUniversity and CIPM willdeepen discourse at thesummit.

“As an organisationrenowned for its efficiencythrough its TAMS software,we are very excited thatthese institutions aresupporting this initiative ofnational importance. Bypartnering with us, they areencouraging us to do moreand their involvement willcertainly deepen theconversation and also shapethe expected positiveoutcomes,” he said.

BY NKIRUKA NNOROM

NASD OTC Plc has saidthat investors crossed

144.36 million shares worthN1.03 billion in the market inthe first quarter ended March31, 2016 compared to128.12million units worth ¦ 665.33million traded in 150 deals inthe preceding quarter 1, 2015.

NASD Plc is the promoter ofa trading network that easessecondary market trading ofall securities of unquotedpublic companies primarily inNigeria but with a focus on theWest African region.

The first quarter report of thesecurities exchange showedthat volume and value tradedrose by 13 per cent and 52 percent respectively with the

NASD OTC records N1.01bn transaction value in Q1

market registering an averagedeal volume and value of 214units and N1.50 millionrespectively in Q1, 2016.

Transactions in the marketwas led by Industrial andGeneral Insurance, IGI, Plcand FrieslandCampinaWAMCO Nigeria Plc whichaccounted for 29.42 per centand 48.93n per centrespectively of the valuetraded during the quarter.

The market recorded apositive quarterly return onthe index as reflected in theupward movement of theUnlisted Securities Index(USI-Market Cap). The USIclosed at 592.06 points asagainst 582.79 points in theprevious quarter representingan increase of 1.59 per cent,

while the marketcapitalisation of admittedsecurities on NASD OTCmarket at the end of Q1 2016stood at N389.85billion. .

The market also experiencedgrowth in the number ofauthorised traders as five newauthorised traders wereinducted during the quarterbringing the total number ofauthorised traders registeredby their sponsoring firms to193.

At the end of the quarter,NASD OTC market hadopened up 26 securities totrade as against 24 securitiesin the previous quarter.

Meanwhile, a turnover of885.367 million shares worthN5.829 billion in 13,870 dealswere traded by investors on

the floor of the NigerianStock Exchange, NSE, lastweek.

The financial servicesindustry (measured byvolume) led the activity chartwith 747.817 million sharesvalued at N3.832 billiontraded in 8,768 deals; thuscontributing 84.46 per centand 65.73 per cent to the totalequity turnover volume andvalue respectively.

The consumer goodsindustry followed with 45.517million shares worthN977.579 million in 2,145deals. The third place wasoccupied by the agriculturesector with a turnover of32.313 million shares worthN48.460 million in 247 deals.

AGM - From Left;Company Secretary, Dangote Sugar Refinery, Mrs Chioma Madubuko;Chairman, Dangote Sugar Refinery, Aliko Dangote, Acting Group Managing Director, DangoteSugar Refinery, Engr. Abdullahi Sule; at the 10th Annual General Meeting of Dangote SugarRefinery in Lagos on Wednesday. PHOTO;AKEEM SALAU

Vanguard, MONDAY, APRIL 25, 2016 — 25

CMYK

Homes & Housing Finance

A report by theFinancial DerivativesCompany Limited

(FDC) has highlightedreasons why rents in realestate in some parts of Lagosremain high despite a glut inproperty supply. The reportcovered Ikoyi, Victoria Islandand Lekki neighbourhoods.

According to the FDC report,“persistent macroeconomicheadwinds in recent timeshave led to lower demand forprime properties in Lagos.Stock broking firms,investment banks, insurancecompanies, airlines and oilcompanies that usually rentthese properties for officespace or residential use areexperiencing a businessdownturn.”

The report also noted thatthere is a strong correlationbetween real estate andinvestment, moneylaundering and public sectorcorruption. Explaining howanti money laundering activityaffects the real estate market,the report stated that many ofthe suspects are returningproperties to government;EFCC confiscating propertiesand; many properties aretagged as under investigation.“Empirical evidence revealsthat approximately 90 percentof Nigerian investors hold realestate as an asset class in theirportfolios. The sector hasbecome enigmatic because ofthe strong correlation betweenthe investment, moneylaundering and public sectorcorruption. This is why rentsremain stubbornly high evenwhen there is a supply glut.”

In the pioneer edition of itsreal estate vacancy factorindex (VFIX) for the Lagos

Real estate: ‘Why rents remain highdespite supply glut’

Stories by YINKAKOLAWOLE

metropolis, using January2015 as the base month forindex, FDC noted that thenumber of properties that werevacant in March 2016 was 65percent higher than in thebase month in January 2015.The vacant properties werehigher in Lekki (64 percent)followed by Victoria Island (35percent) and Ikoyi (24percent). The report addedthat Admiralty Way in Lekkihas the highest vacancy ratiodue to challenges thatbusinesses face in the currentmacroeconomic environment,noting that most properties onthe street are offices andcommercial spaces.

InflationThe jump in the inflation rate

from 8.2 percent in January

2015 to 9.6 percent inDecember 2015 has reducedthe purchasing power ofindividuals within theeconomy. As a result, the valueof individual incomes hasdeclined both in nominal andreal terms. Given that this

research focuses on luxuryareas, a decline in income isexpected to reduce thedemand for housing.Following, the real estateindustry is used as a hedgeagainst inflation. This isbecause real estate assets arelong-lived assets that adjust toinflation, which explains theincreased supply of housing.Specifically, inflation increasesthe value of the housingproperty, which providesincentives for new initiativesin the real estate market.

The official exchange raterigidity in the face of imminentdevaluation is discouraginginvestors from taking finalinvestments decisions. Thusin aggregate, is reducing thedemand for both residentialand commercial properties.The potential investments willnaturally lead to demand foroffice space and commercialproperties.

The sector hasbecomeenigmaticbecause of thestrongcorrelationbetweeninvestment,moneylaundering andpublic sectorcorruption

Arbitrary estate valuation, high agency feeand high cost of rent have contributed to

the inability of most Nigerians to have accessto affordable housing.

Minister of Power, Works and Housing, Mr.Babatunde Fashola, made this assertion at therecently concluded 46th Annual conference ofthe Nigerian Institute of Estate Surveyors andValuers (NIESV).

Fashola, who was represented by his SpecialAdviser on Lands and Housing, Mr AbiodunOki, challenged surveyors on the need forchange of estate valuation in conformity with theprinciples of real estate pricing. He said highfees charged by surveyors are impeding accessto affordable housing. According to him, 5000properties in Lagos were not rented due to over-pricing and high agency fee. “Fifty, forty-oneand thirty-three 33 percent of people in Lagos,Kano and Abuja, respectively, rely on estateagents when looking for a house but agents makehousing more difficult compared to thelandlords,” he stated.

Arbitrary estate valuation worsenshousing crisis —FASHOLA

The minister noted that the role of NIESVin making housing affordable to Nigerianscannot be over-emphasised, even as thethree tiers of government are expected tofacilitate the development of housing.

He asserted that the housing needs ofNigerians cannot be met by governmentalone, adding however, that even whereavailable everyone cannot afford a house.“Sixty-four per cent of the United Statespopulation are house owners while 34 percent are living on rented apartment despitetheir housing programme,” he declared.

In his remarks at the conference,President of NIESV, Olorogun JamesOmeru, enjoined surveyors as foremostprofessionals in the built environment toguide the country towards sustainable citydevelopment. He stressed that surveyorscould help redress infractions in citydevelopment across the country if there isa conducive environment for them tooperate.

CDK to openceramic tiles,sanitarywares factory

CDK IntegratedIndustries is set to

commence the production ofporcelain and ceramic tilesas well as sanitary wares as itopens its factory in Shagamu,Ogun State, in May 2016.

Chief Executive Officer ofthe company, Dr KhaterMassaad, said that the ultramodern factory, built on amillion square meters of land,is targeted at meetingdemand for ceramics andsanitary wares, particularlyin Africa and Europe.

He asserted that with CDKIntegrated Industries Nigeriawill become a major exporterof ceramic tiles andsanitary wares to otherAfrican countries and Europein the nearest future. Henoted that over sixty fivemillion square meters ofceramic tiles are importedinto Nigeria as published byItaly-based Ceramic Worldreview magazine. “Our aim isto produce high qualityceramic tiles and sanitarywares products; everyone isin need of high qualityproducts. We aim to meet thebest quality in the worldmatching and possiblysurpassing the American andEuropean standards. CDKIntegrated Industries’ visionis to be number one in Africain terms of product qualityand pricing,” he added.

US home salessoar 5.1% inMarch

Sales of existing home inthe US rebounded

strongly in March, signallingsturdy demand in thehousing market even as therecovery remains choppy.

Sales rose 5.1 percent to a5.33 million seasonallyadjusted annual rate, theNational Association ofRealtors said last week. Thatwas higher than the 5.3million rate forecast byeconomists surveyed byMarketWatch.

That pace was up only 1.5percent compared to a yearago, but the average for thefirst three months of the year,which NAR Chief EconomistLawrence Yun called“bouncy,” was 4.8 percenthigher compared to the sameperiod in 2015.

High-end housing development

26 — Vanguard, MONDAY, APRIL 25, 2016

Insurance

BY ISRAEL OBIORAMBACHU

Many African countries

have established thenational health insuranceprogram. Nigeria’s NationalHealth Insurance Scheme(NHIS) came on stream in1999. Ghana’s NHIS wasestablished in 2003. Kenya’sNational Hospital InsuranceFund (NHIF) has been longoperational, since 1966.

The establishment of thenational health insurancescheme came about by thedesire of the nationalgovernments to better servethe health needs of thepopulation. It was hithertothe situation that the citizenshave to go before thephysician when theircondition had become worsebecause medical costs werenot easily affordable. Thescheme made it possible forthe insured to seek immediatecare whenever there isimminent need to see aphysician.

However, as in all humanendeavours, a minisculepercentage of theparticipants, particularlyphysician providers, haveresorted to milking the systemfor pecuniary gains andgreed. Every health care orinsurance program has beensubject to criminal gamingand gaining off the system byphysician providers whoperpetrate fraud.

Fraud diminishes theobjectives of the program,indeed of any humanendeavour. If fraud is allowedto fester and not checked, theprogram will ultimately shutdown.

The West, particularlyEurope and America, haveestablished fraud task forces

PRESENTATION - From left: Mr. Bala Bantex, Deputy Governor of Kaduna State; Mr. HenryAtionu, Executive Director, Business Development, UBA Metropolitan Life Insurance Ltd;Mallam Nasir El Rufai, Kaduna State Governor; Mr. Adetunji Mustapha, Regional BusinessHead (Abuja & North) of UBA Metropolitan Life; Mrs. Hadiza Bala Usman, Chief of Staff toKaduna State Governor; at the presentation of about N30 million benefit cheques to the 24deceased beneficiaries of last year’s Zaria bomb blast.

Why NHIS should be monitoredby investigative auditors

Fashion industrymust achievescale to attractinvestment– Uduanu

In a deliberate bid tocapture the interest of

fashion and design industryoperators and boost activitiesin the proposed micropension scheme targeted atinformal sector operators, PalPensions, one of the licensedPension Fund Administrators(PFA) sponsored this year’sedition of the Lagos Fashionand Design Week.

Speaking at the event,Managing Director/ ChiefExecutive officer of PalPensions, Mr Dave Uduanu,said for the fashion industryto attract investments, theoperators must have todemonstrate their ability toachieve scale.

He said the fashionindustry, has incrediblepotential to scale but howeversaid it was being held backby a number of issues.

He cited example ofpotentials in the industrysaying the second richestman in the world, Zarafounder, Amancio Ortegamade his money through thefashion industry. “What ittells me is that if you reallywant to make money fromfashion, you need to achievescale.

“There is $25 billioninvestment opportunity in theindustry and this money islooking for investmentoutlets. These investmentoutlets are outlets that wouldgenerate returns that wouldensure that the pensionersget their monies when theyretire,” he stated

The pal Pension boss toldthe designers that it isimportant they have abusiness plan that they canpitch to investors.

“For your business tosucceed, you need to put allyour energy into thatbusiness because investorsprefer to back anentrepreneur who is willingto put all he has into hisbusiness.

He also counselled them toalways create an exit strategywhen doing their long termplans in order to attractinvestors.

According to him,“Investors need to see an exitbecause most investors arenot looking to remain withyou for 20 years. You can’tbuild a business with theview that you must leave thatbusiness to your children, youmust build a business withthe view that you can exit atsome point.

either solely by the privatesector or by their respectivegovernments in collaborationwith the private sector. In theUnited States, there is theDepartment of Health andHuman Services, whichestablished the MedicareFraud Strike Force and theMedicaid Fraud ControlUnits. There are also theHealth Care Fraud Unit of theFederal Bureau ofInvestigation (FBI)and theCenters of Medicare andMedicaid Services (CMS). Allthe government’s efforts arecoordinated under theDepartment of Justice (DOJ).

There are privateorganisations such as theCoalition against InsuranceFraud and the NationalHealth Care Anti-Fraudassociation (NHCAA). Theseorganisations strive to combathealth care fraud andsafeguard the US annual

health care expenditure ofover US$3 trillion. In spite oftheir efforts, however, theyacknowledge that about 5% ofthe annual expenses is lost tofraud. The FBI estimates thatover US$250 billion was lostto fraud in 2014. The effortsof the US Department ofJustice (DOJ) in investigatinghealth care fraud havehowever resulted inrecoveries of the sum ofUS$5.7 billion in 2014 andUS$3.3 billion in 2015. From1997 to 2015, it has recoveredthe sum of US$27.8 billion.

The Canadian Health CareAnti-Fraud Association(CHCAA) reports that out ofC$120 billion spent byCanada annually on healthcare, fraud loss is over C$12billion per year.

European countries have notfared any better in effectivelychecking fraud in theirrespective health careprograms. The 2020 Health inthe United Kingdom estimatesthat the true cost of fraud inthe UK’s National HealthServices (NHS) is over £3billion per year.

It has been recognised thatthe various ways thephysicians bill the programsinclude billing for services notrendered, unnecessary testsin order to collect insurancepayments and use ofanother’s insurance card.

African countries’experience includingNigeria’s with respect tofraud cannot be different fromthe experience of the West.While discussing this topicwith some people in Nigeria,one of the interviewees, anemployee of a multi-nationalcorporation, covered underthe NHIS informed me thathis wife took ill at a time andwent to the hospital. She wasbilled ¦ 61,000.00. However,her cover under the schemewas limited to ¦ 50,000.00 per

outpatient visit, which meantthat she has to pay ¦ 11,000.00from her pocket. He hadreached into his trouserpocket to retrieve his walletwhen one of the physiciansadvised him that nobody payscash from their pocket. He wastold to present his insurancecard and they will apply it tohis wife! That is fraud and anindication it thrives in thesystem.

“The challenge in the useof recent medical graduatesas fraud Investigators is thatalthough they may be versedin medical practice, they lackfraud knowledge andtraining.”

Another indication that ledme to the suspicion that fraudexists within the NHIS inNigeria, is that over 60% ofhealth insurance fraudperpetrated in Nigeriaagainst foreign public andprivate insurers involvesphysicians colluding with thesubscribers/policyholders.More than 60% of thesephysicians are enrolled in theNHIS network as expressedin their letterhead. If they arebilling or attempting todefraud overseas companies,then the local programscannot be different.

If fraud is occurring underNigeria’s NHIS so it is in mostAfrican countries health careschemes. Kenya recognizesthis fact in their NationalHospital Insurance Fund(NHIF). As a result, itencourages whistleblowers toreport fraud and has a hotlineor tip line on their web site.For Nigeria, I’m aware thatalthough they have notinstituted an Internet hotline,but the HMOs deploy youngphysicians as Investigators toinvestigate suspicious claims.

In order to solve thesechallenges, not only inNigeria but around the world,I have developed a programto train HMO InvestigativeAuditors. This will be the firstof such a program anywherein the world.

The HMO InvestigativeAuditor will be able toinvestigate and audit bothlocal HMO claims as well asforeign claims. Investigationentails that the trainedprofessional can effectivelyundertake the investigation ofone or more suspicious claimin order to determine the factsabout it. Auditing requiresthat occasionally, claims fromevery primary, secondary andtertiary-level hospital in thenetwork should be audited todetermine if fraud is beingperpetrated and, if so, to whatextent.

Additionally, the HMOInvestigative Auditor caneffectively investigate foreignhealth claims including travelinsurance (medical expenses)claims and report factually tothe principals.

“The Nigerian HMOInvestigative Auditor will beable to effectively investigatelocal and foreign HMOclaims. He may choose towork only cases in Nigeria orwithin ECOWAS or evenaround the world.”

The HMOInvestigativeAuditorwill beable toinvestigateand auditboth localHMOclaims aswell asforeignclaims

Microfinance

vehicles waiting for days (nothours anymore) for fuel whichnever seems to arrive, transportfares long gone through the roofand general despair that thesituation will be better soon.One might as well add unpaidsalaries to millions of workers inthe public and private sectors.These are the realities of ourlives these days. Were these partof the change agenda? Werethese the promises made toNigerians during thecampaigns? Probably not, atleast, I never heard anybody inthe APC campaign trail sayingthings were going to get so badfor us.

So the Vice President ofNigeria was right; CHANGEwas a slogan devoid of contentduring the last elections. Ishould know because of myexperience with Buhari’scampaign in 2011 when he hadfirst adopted the change mantra.Prince Tony Momoh, formerFederal Minister forInformation was the Chairmanfor Congress for ProgressiveChange, CPC, on whoseplatform Buhari ran that year.Some of those with who Buharientered into an alliance hadtheir own candidates. TheAction Congress of Nigeria,ACN, fielded Malam NuhuRibadu – who they later

APC Change Programme:The slogan and the reality

Buhari came into office with an agenda for change. This was a compelling andultimately victorious slogan….” Vice President Yemi Osinbajo, at the NATION’s

Forum on the Economy, Thursday, 8 April 2016.Sweltering afternoons, usually spent engaging in vicious fights at filling stations for fuel,

followed by dark and cheerless nights on account of continuous power failures, businessesparalysed in the absence of raw materials and the same power supply and roads closed by

betrayed and voted for Jonathanon Election Day. So, we all knowwho to blame for four years ofJonathan.

However, this column is notdesigned to re-open the bookson 2011. Its purpose is toexamine how the concept of“change” which started with theBuhari campaign in 2011, andwhich had a specific content,had transformed into a mereslogan in 2014 to 2016 and howthe APC is now just strugglingto give it a content. TheNATION’s Forum on theEconomy, coming only abouttwo weeks after the NationalEconomic Council, NEC, helda retreat to craft an economicprogramme for the FederalGovernment is instructive in twoways.

First, it implies that thenewspaper — its proprietor,directors and editors – stronglybelieve there is a vacuum ineconomic policy and programmewhich needs to be filled. Theyare absolutely right. No honesteconomist can fail to notice theabsence of both policy and

credible programmes at themoment. Second, the Forumitself is coming too late andmight not be too useful. Inreality, given the fact that thepaper had supported the APCand its candidate, the time toorganize the Forum on Economyshould have been last year –before Buhari assumed office.Permit a quick diversion beforean explanation is givenregarding the timing of theNATION’s forum.

In 2011, I had approachedTony Momoh, who was with usin VANGUARD beforebecoming the Chairman of CPCto offer my services, free ofcharge, to assist Buhari incrafting his Economic Change

Programme. The reason wassimple. A political party, outof government, campaigningon the platform of “change”,must, as a minimum, addressseveral questions: what is to bechanged and why? How will itbe changed and why? Whenthe changes will occur? Whowill undertake the changeprocess? How much will itcost? What will be the benefitsto the people of Nigeria?

I went to Abuja at my ownexpense and Momohintroduced me to some ofBuhari’s senior campaign staff.Within two weeks, a draft outlineof CPC’s Content of Changewas ready – to be discussed andfleshed out later. Seven areaswere identified and the most up-to-date information about thesituation of each of them wasobtained. These were going tobe focus of change. Selection ofseven thrusts was deliberate.After over twenty years ofrunning commentaries onFederal Budgets, it hadbecome clear that we weremaking no progress on

anything becausegovernments were trying to dotoo many things in a short time.Prioritisation was key tosuccess – do a few things anddo them well.

The draft was presented toBuhari’s people shortly afterand two decisions were made.First, the details needed to beworked out – including theimplementation process.Second, an appointment wouldbe made to brief Buhari afterthe work had become moreadvanced. Unfortunately,there was a major constraint –the Buhari campaignorganization was short offunds. My trips to Abuja wereself-funded and there was nomoney to recruit the additionalstaff required to provide thedetails until the end. But, therewas a content to Buhari’schange message in 2011.

About a month after Buharihad been nominated by theAPC as the flag bearer of theparty, I noticed that “change”had again become the slogan.Investigations quicklyconfirmed my worst fear; theslogan had no meaningbecause it was devoid ofspecifics. Again, at my ownexpense, I traveled to Abujafor an appointment with oneof Buhari’s in-laws.

“Vanguard, MONDAY, APRIL 25, 2016 — 27

CMYK

STORIES BYPROVIDENCE OBUH

Microcred Micro-Finance Bank (MFB)

has diversified into micro-insurance services with a viewto generating about N40billion from the Lagos marketin the next four years.

The diversification which iscoming barely three monthsafter the Kaduna-based outfitsecured a licence from theCBN to offer its servicesnationwide, sets the companyon course to grabbing up to300,000 insurance customersin Lagos.

CEO, Microcred MfB, MrKazeem Olarenwaju, said thatthe diversification wouldsustain the company’s growthand leadership position,disclosing that the bankentered into partnership withAXA Mansard, a member ofthe global AXA Group, to giveclients multi-facetedinsurance services.

He said, “Through apartnership arrangement withAXA Mansard, MicrocredNigeria will provide its clientsmulti-faceted insuranceservices, covering life andnon-life insurance. Lossesassociated with death,burglary, fire and special perilsshould now become a thing of

Microcred MFB diversifies into micro insurance servicesthe past.

“Never shall our clients losetheir business to any disaster,clients would be educatedand supported to ensure thattheir assets are insured at anaffordable rate.”

Also speaking, DeputyCEO, Ms. Isabelle Levard,said that the outfit wouldexploit the huge businesspotential in Lagos to

consolidate its leadershipposition, pledging a newexperience for its Lagosclients.

“We want to ensure thatclients are protected and willnot lose their goods to anyinsurable risk. We plan toenlist over 300,000 customersin Lagos and its surroundingswithin the next four years andwe are targeting over N40

billion from variousinsurance products,” Levardsaid.

The Divisional Director,Retail Solutions of AXAMansard, Mr Yomi Onifade,described the Nigerianinsurance industry as largelyunder-penetrated, stating,“as a leading non-bankingfinancial service group, weare poised to offer

unparalleled products andservices to Microcred’s clientsby ensuring that their risksare adequately covered.

“The targeted clients haveevery reason to be excited andhappy as their losses wouldbe minimised going forward.We are excited to partner withMicrocred to achieve itsgrowth aspirations in Nigeriawhile also growing insurancepenetration,” he said.

The Former Minister ofHealth and Chairman of

Juli pharmacy, Prince JuliusAdelusi-Adeluyi, has said thatthe adoption of goodcorporate governance willchange Nigeria.

He stated this during theconferment of FellowshipAwards on 969 members ofInstitute of CharteredAccountants of Nigeria(ICAN) in Lagos.

Meanwhile, earlier in anaddress, ICAN President,Otunba Femi Deru, urged thenew Fellows to inculcatehonesty in the discharge oftheir duties so as to contributeto the development of theeconomy, saying, “The nationis waiting for us as charteredaccountants to make thingswork.”

According to Adeluyi, “As

Good corporate governance will change Nigeria — Adeluyi...as ICAN confers fellowship award on 969 members

professionals especially asaccountants who areaccountable, we must lookthrough life and leave thatlife whereby people will knowthat we are disciplined,ethical and that we can bebelieved as truth speakers

who are ready to buildgoodwill and that our work isgoing to be beneficial to ourclients and all concerned.

“I am sure that if we do thisit will help the body outthere, the business peopleboth public and private to

carry out good corporategovernance. If we have goodcorporate governance Nigeriawill change. If theprofessional groups canchange their mind and say wewant to have professionalethics, the country willchange.”

Acting Director General of the StandardsOrganisation of Nigeria (SON), Dr. Paul

Angya has appealed to State and LocalGovernments to assist Micro, Small andMedium Scale Enterprises (MSMEs) stand ontheir feet for overall economic and industrialgrowth.

He said this at a courtesy visit to Governorof Enugu State, Ifeanyi Ugwuanyi, stating thatMSMEs are the engine of growth for anyeconomy.

To this end he said, “Concerted efforts shouldbe made by government at all levels to grow

SON boss tasks States on MSMEsthe sector.

“There is no way we can diversify theeconomy without the active development andinvolvement of the MSMEs. They are thesecret of economic prosperity. Let the stategovernments in Nigeria help MSMEs in theirlocalities to survive, then SON as theregulator would come in, accredit and certifythem. “We have been encouraging andsupporting them through trainings andsensitization programmes. We have offeredin some states and offering 25 percent subsidyfor their certifications.

So the VicePresident ofNigeria was right;CHANGE was aslogan devoid ofcontent during thelast elections

28 — Vanguard, MONDAY, APRIL 25, 2016

E-Commerce

CONFERENCE: From left, Dirk Henke, Managing Director, Emerging Markets, Criteo;Sebastian Loaiza, Country Manager, Sub-Saharan Africa, Criteo; Shayan Rahimi, BusinessDevelopment Manager, Middle-East & Africa, Criteo and Michele Lozzo, Commercial Director,MEA, Criteo at the Mobile West Africa Conference in Lagos. Photo:Lamidi Bamidele

Digital Base,iFLUX openretail shop forLED lightingproducts

iFLUX brand inpartnership with Digital

Base Limited have lastweek opened its secondbrand experience and retailcentrer in Lagos with anarray of eccentric, top-of-the-range LED lightingproducts.

Speaking at the VictoriaIsland showroom opening ,Teddy Lee, ManagingDirector of iFLUX said thatthe multinational companyis the first of such brandsplaying in the LED lightingsector to cover a two yearswarranty on all their LEDproducts.

“We have proven to themarket the high quality andour commitment to qualityassurance. For instance, theeighty eight (88) solar-powered streetlightsinstallations in Ikejacomputer village of ‘Lightup Ikeja’ Community SocialResponsibility project byTecno Telecoms limited areiFLUX products

“As we speak, those LEDstreetlights are fullyfunctional; there are noglitches and each one ofthem has a warranty of twoyears, within this period, theproduct will be responsiblefor fixing or replacing anyof the streetlights that showfactory faults,” Leeexplained.

Speaking on the long lifespan of the products, theManaging Director, iFLUXLED Nigeria, VictorOkpaluku said on a threehours daily use, the lifespan of one iFLUX LEDlight bulb is equivalent tothe combined life spans oftwenty incandescent bulbs.

“iFLUX products saves up80% of the energy used topower incandescent lights,the power wattage requiredto light up the product to fullglow can be as low as 8W,”Victor, the brand marketinglead reiterates.

“The two years warrantyon products redeemable onall CarlcareTM centresnationwide,” Terry Tang,Marketing supervisor, of thecompany, added.

Also speaking, the Head ofMarketing, Digital BaseLimited, authorised dealerof iFLUX, Abel Emokai saidthat the product has thestate-of-art technology tosupport the Nigeria market.

STORIES BY JONAHNWOKPOKU

The number of retail e-commerce transactions

taking place throughsmartphones in Nigeriaspiked by 73 per cent withinthe first quarter of 2016.

This is according to e-commerce Q1 report data byperformance marketing firm,Criteo which was presentedby the Managing Director,Emerging Markets, DirkHenke while making apresentation at the MobileWest Africa conference heldin Lagos last week. This is areflection of global mobilecommerce trend which hasrisen by 39 per cent since thelast quarter of 2015.

The report which showssmartphones becoming thedominant m-commercedevice indicates smartphonestaking a huge chunk, about18 per cent in Africa, of e-commerce transactionscompared to about 10 percent share of other mobiledevices.

The report also highlightsmobile versus desktop salestrends in the country withdesktop sales dominating e-commerce transactions withinweekdays and Saturdayswhile Sundays share equaltransactions rates betweenmobile and desktops. This isin contrast to South Africa’smobile commerce trendswhere mobile dominates allweekend transactions.

The report also noted thaton weekdays, desktopusages specifically spikesduring office hours withclicks averaging 1200 per

73% e-commerce transactions in Nigeriahappened on smartphones in Q1cent and clicks through mobilebarely rising above 100 percent. However, on weekends,desktops and mobile usageare similar with clicksaveraging 250 per cent acrossthe devices.

Another importanthighlight of the survey is theinability of payday weeks toinfluence e-commerce sales.Except for significant salesrise during the Black Fridaysales in Q4, 2015 whichcoincided with the paydays,transactions within the other

paydays and within the firstquarter of 2016 remainedbasically flat. However,Henke noted in hispresentation that despite theimpressive statistics andgrowth trends, everything isnot perfect yet, because while86 per cent of retailers claimthey already have a mobileoptimised website, only 13 percent of consumers rate theirshopping experience as ‘verygood’ on smartphones.

The report, however, showsNigeria's mobile conversion

rates steadily growing withAndroid smartphoneaveraging 1.8 per centconversion rates, iPhone andiPad, 2.9 per cent andAndroid Tablet, at 1.5 percent conversion rates.

Henke noted retailers needto become more strategic intheir approach to sales bypersonalising their marketingacross different channels andadopting retargetingstrategies to convert morevisitors into real buyers.

As part of programmes tomark its

23rd anniversary, non-banking finance institution,Rosabon Financial Serviceshas entered into a strategicpartnership with a nongovernment organisation,NGO Mamamoni, to empower23 women with soft grants andcapacity building.

In a statement, Rosabonsaid, this is part of its effortsat encouraging womenempowerment and promotingindigenous production,adding that the training andprovision of grant to theselected women is part ofRosabon’s commitment atsupporting local business toboost local production andgrow the economy.

The women who areinvolved in various craftsincluding farming, fashiondesigning, soap making, fishfarming and other chemicalproductions got the grant tofurther expand theirbusinesses.

At the cheque presentationat Satellite Town, Lagos last

Rosabon marks 23rd anniversary, empowers women with grantsweek, the 23 womenexpressed gratitude andsatisfaction for the supportreceived from Rosabon.

Speaking on theempowerment initiative andpartnership with Mamamoni,Rosabon’s CEO, ChukwumaOchonogor said they wereinspired by Rosabon’spassion for deepening accessto financial services,especially as a means to

tackling the menace ofpoverty among theunbanked.

He noted that the companyhas championed financialinclusion in Nigeria throughits several innovativeproducts targeted at the non-banking population, addingthat the partnership withMamamoni is to continue itsdrive at deepening financialinclusion in the country.

According to Ochongor,“Women are becoming greatplayers in the economy, so itis very important that theyget the right empowerment.At Rosabon, we have asocietal outlook andrecognize the importance ofworking together for thegreater good. We are fullycommitted to this project andwill keep it on for as long aspossible.”

International online shop, Shoptomydoor.comhas announced a three day delivery service

from the United States of America to Nigeria andother African countries

In a statement, the company said theintroduction of the three days delivery at adiscounted rate from USA to any country in Africais in the spirit of its commitment to constantlygive value to customers.

“The company’s goal is to continue providingAfricans stress free global shopping and shippingexperience that brings an affordable solution totheir need for quality products ranging fromclothes, shoes, auto parts, cars and electronicsthrough an innovative platform. Although,ecommercehas continued to grow in Africa, thereis still room for improvement. E-commerce is not

Shoptomydoor unveils 3-day delivery from US to Nigeria

just about setting up computers andbusinesses, but encompasses a larger scope,”said Nduka Udeh, President/CEO ofShoptomydoor.com.

He said: “Most of what is needed to growe-commerce is to put in place the rightstrategies and ensure strict implementation,provide an enticing browsing experienceacross online platforms, create multi-channelofferings that will enable consumersexperience your brand consistently, considerconsumers shopping method of choice andinvest in mobile. Mobile commerce isgrowing at a rate of over 130 per centannually. To stay competitive, we offermobile-accessible services such as tracking,delivery status and real-time notifications.

Vanguard, MONDAY, APRIL 25, 2016 — 29

CMYK

Background: Upon graduation from University of Benin,

armed with a degree in Civil &Structural Engineering, Engr.Egube was sent to the NationalDefence Academy, Kaduna forhis one year national youthservice. After that, he workedbriefly with his elder brother inhis furniture component exportbusiness.

“After working with him for ashort period, I felt I should somemore exposure in business andenterprise so I joined ArthurAnderson (now KPMGProfessionals). From ArthurAnderson, I went intoconstruction again becausebusiness was always on mymind. Although I readengineering, I have an MBAand I am a member of differentsocieties – Nigerian Society ofEngineers, Council for theRegulation of Engineering inNigeria, Fellow of the Instituteof Credit Management,Honorary Senior member of theChartered Institute of Bankersand an Associate of NigerianInstitute of Management. I alsoattended several courses.

Working in the bankingindustry:

“I went into construction withsome of my friends and workedthere for about two years beforegoing into the bankingindustry. The exposure I had atArthur Anderson formed thebedrock of my work ethics andculture. In Arthur Anderson, Ilearnt about how to analysebusiness and the frameworks bywhich some of these analysesare done quite easily. And thenthe work culture was extremelystrong.

I went into banking becausewhile I was in Arthur Anderson,I consulted for the financialservices industry and so I hadvery heavy interactions withmost of the leading banks at thattime, doing one form ofassignment or the other. Ipassed through several leadingbanks from UBA, NIBInternational Bank, First Bankand Diamond Bank, taking updifferent roles andresponsibilities (administrativeto business development).

I spent quite a bit of timedriving energy so I am known

People in Business

Corruption beginsin the mind, withthe way weinterpret things; ifyou believe you aregoing to gainwealth only byreceiving, it is acorrupt thinking

People gain wealth byinvesting, not by hoarding— Engr. Samuel Egube

•Engr. Samuel Egube

By EBELE ORAKPO

Engr. Samuel Egube is the Chairman, AltAssistLimited, a Lagos-based ManagementConsulting firm. In this chat with Financial Vanguard,

the engineer, banker and business consultant speaks onsundry issues, harping on the need to unlock/create valuethrough networking and building business relationships.Excerpts:

basically as oil & gas man eventhough I have had significantexposure across the varioussegments of the economybasically.

What I do:Today, I do a

lot ofc o n s u l t i n gwork, what Icall Pair ofh a n d sconsulting. Iinteract with a lot of people whorequire capacity in theirbusiness from the advisorystand and then you flow in togive them that support. Manybusinesses are led by CEOswho require an equivalentcapacity in business and whoprobably are unable to affordthat on permanent basis sobasically, we give that level ofsupport from time to time. I amalso a director in severalcompanies and serve on theirboards, helping to provide therequired directions to keepthem focused, and thegovernance system andframework working.

Networking:I have a passion for Nigeria.

I believe Nigeria is a greatplace but our forebears had notdone a great work in buildinggreat enterprises. It is quite achallenge seeing the very fewenterprises that had movedfrom one generation to another.It is the African/Nigerianmindset. Typically, we have notlearnt how to work together.Most people are soleproprietors, they run theirbusinesses alone. I am glad theconsolidation in the bankingindustry forced a lot of peoplein the sector to work togetherwith other stakeholders and theindustry is better for it.

It is coming from very strongregulations and rules aroundthe practice of banking inNigeria and the fact that thereare a lot of extremely strongstakeholders in the sector. It ismy belief that we will see moreof that happening whereresources can be pulled togetherto make things happen.

Historically, if your money isunable to do it and you areunable to get banks to do it, youjust leave the enterprise or theidea. But today, people cometogether to build skyscrapers

where each of them will own justa part. This gives me the hopethat the future of Nigeria isgreat. The Oil & Gas sector hasdone well too. When somemajor international oilcompanies began to divest, itbecame clear that as Nigerians,we were going to participateand we needed to do sotogether. There would be moreof that going on as we pull ourcapital together to create things.

One job which I love andwhich I do now is pullingpeople together and causingthem to make investments thatare good for Nigeria. Except welearn how to do that, we will notmake significant progress.

Trust:As human beings, it has

always been a matter of trust.There is a reason why we needvisas to go into other countries.Depending on the level of trust,things can work smoother butyou cannot wait for trust to entera perfect state before you cando business; that is why youhave laws. There are rules ofengagement and if you want toapproach life purely based ontrust, then you will not have

institutions.In the Banking industry, you

build rules and controls; youanticipate what can go wrongand then you build reasonablecontrols around them. You havesystems that check thoseevents from time to time toensure they are not in breach.There are outcomes andrepercussions when thosesystems are in breach. “Can Itrust you? I don’t know. Youmay be a great person todaybut I am not sure how you willbe if we start to make moneyor how you will behave if youstart to have family problems,whether the problems willcome into the business. So itis always going to be about therule of law and principles.Today, the biggest corporationsin the world are publiccompanies and they arecontrolled companies becausethe stakeholders are the public.The securities and exchangecommissions around the worldput rules to guide thebehaviours of these companies.Rules actually hedge us in toa predetermined behaviouralexpectation.

Challenges:One is Rule of law: I am

looking at the entire systemsthat help support agreementsin Nigeria - constitution,specific rules aroundbusinesses and the rules withwhich we operate. So if therule of law is workingproperly, then it is clear whatto expect when we agree todo business. Corruption:Another problem is the waypeople think which I callcorruption. Corruption is notwhat you see in the streetswhen the roads are decayingor things like that.Corruption begins in themind, with the way we

interpret things. If for exampleyou believe you are going togain wealth only by receiving,it is a corrupt thinking. Peoplegain wealth by investing, notby hoarding. So when youhave people putting money insoakaways, it is a decayingmindset, and those people arethe ones you put in charge ofour infrastructure andbusiness systems. Andbecause that is their mindset,the outcome of their work isdecay.

People think also thatscattering, rather thanintegrating people is a greatway to provide leadership sorather than reintegrating ourpeople, we put them in silos –north and south; Christian/Moslem and not justNigerians. That creates apolitical ecosystem that leadsto another level of distrust. Ihave to surmount the fact thatyou are a northerner and I ama southerner so we always tryto second-guess what otherpeople’s intentions are. Thiscreates an unhealthyatmosphere for interaction andbusiness actually thrives withincreased interactions amongpeople.

Infrastructure: The two majorones are power and logistics.If power is steady, smallenterprises andmanufacturing companies canrun at lower costs. Thankfully,Nigerians are creatingalternative solutions.

Functioning rail system:People and goods must movefreely and cheaply. If I canmove from Benin to Lagos intwo hours by rail, I don’t needto live in Lagos to work inLagos. If I knew that quitecheaply I could move mygoods from Apapa Port by railto Port Harcourt, then I canbuild a factory in Port Harcourtand have a very decentralisedeconomy and a betterdistribution of our peoplewhich will aid significantamount of interaction. I canwake up this evening and sayI am going to Abuja for ameeting and from there, I justwant to touch base in Kadunaand each of the trips takesabout three hours or even 30minutes. That helps becausewhen people interact withpeople, business happens.

I understand that over 50%of our tomatoes go to waste.Can you imagine if that 50%can come to the market, whatthe standard of living of ourbrothers who producetomatoes in the north will looklike?

In my own business,because it is a business thataffects capital and people, youfind out that the challengesfacing the economy become mychallenges and my job is to tryand create solutions aroundthese challenges to makething better despite thesituation.

CMYK

30 — Vanguard, MONDAY, APRIL 25, 2016

Economy

BY ESTHER ONYEGBULA

In the face of worseningforeign exchange supply

crises, young entrepreneurshave been urged not to allowexchange rate to determinetheir success.

Speaking at the 2016 editionof Business Wednesday, aninteractive platform thatfacilitates networking,information sharing, andbonding hosted by theMarket Place Alliance of thisPresent House, ManagingDirector, Guaranty Trust BankPlc, Mr Segun Agbaje, whomade this admonition, shareduseful insights onsuccessfully running abusiness and ultimatelycreating lasting value inpresent-day Nigeria.

To buttress his point Agbajegave a brief recap of similar

GTB boss advises entrepreneurs on exchange rate

challenges in his careertrajectory in GTBank, and laterdelved into the socio-economicdynamics of the country since1991 when he joined the bank.

“I still believe Nigeria is thegreatest place on earth to dobusiness. Africa as a continentis the best place to dobusiness. There are a fewcountries with the populationwe have and at the least, 50per cent are below 28. Whoelse has 170 million people tosell products to?” Agbaje said.“When the rate was N22 to $1,you didn’t have cars. N150 toone, you didn’t own a car, butat N200 and N300 you boughtcars. At N400 you will buyhouses. There areopportunities that come withdevaluation.”

“The only way forward in acountry like Nigeria is to havethe SMEs sector developed.

It’s not corporations that willfix Nigeria, it’s anamalgamation of SMEs thatwill take the country forward,”he said.

Pastor Tony Rapu, theconvener of the event, furtherelaborated on the need formore engagements such asTPH Business Wednesdaysaying things can no longerbe business-as-usual.

“The reality of the 21stcentury demands a betterapproach for highperformance, and ThisPresent House’s BusinessWednesday service is a greatplatform to exchange ideas.We are excited to have Mr.Agbaje on this platform withus today, and we areconfident that the insightsshared will inspire us to attainfor greatness in spite of thecurrent economic situation,”he said.

BY EMEKA ANAETO,ECONOMY EDITOR

Amidst dramatic positiveturn in oil prices in the

international market someeconomy analysts haveindicated that a positive rub-off on Nigerian economywould not come in the shortterm.

Economists at the FinancialDerivatives CompanyLimited, said the inflationarypressures which hadsustained over thirteenmonths consecutively, wouldremain in the months ahead,due to the persistent scarcityof petroleum products,among other key factors.

However they noted that thecurrency swap initiativebetween Nigeria and Chinais expected to dampendomestic prices, as Chinaaccounts for 25.6 per cent ofNigeria’s import, hence amoderating influence onimported inflation,especially as China’sinflation remained flat at 2.3per cent in March, 2016.

But economy researchers atARM Investments said theirearlier identified tripod ofinflation drivers coming into2016 (higher electricity tariff,Naira volatility and petroleumproducts scarcity) dominatedinflation discuss thus far in2016, adding that lingeringfuel scarcity bolsters theirexpectation for continuedpressures on prices within thesecond quarter.

Consequently, theyprojected a 57 basis pointsrise in headline inflation to13.4 per cent for April 2016with a target full year 2016average now at 12.79 percent. Last month’s headlineinflation rate was 12.8 percent, a near 4-year high.

In its economic outlook forfirst half 2016, the economists

First half economic outlookappears hazy despite oil pricerebound —ANALYSTS

at ARM Investments statedthat output will also remaindepressed as growthchallenges show no sign ofabating

“Going forward, we retainbearish outlook on overallgross domestic products,GDP, on the back of extendeddelays in the passage of 2016budget which was meant tosignpost a kick-start ofstimulatory fiscal spendingthat would have supportedproduction in non-oilsegments of the economy.Consequently, we retain our2016 GDP forecast of 2.9 percent year-on-year.”.

Further, they stated, “whilstwe expect currency issues tokeep importation reasonablyconstrained, oil exports islikely to be pegged-back byincessant downtime atstrategic pipelines such asTrans Forcados, withorganisations such as SeplatPetroleum, already bracing upfor significant down-time overthe first half of the year”.

This, according to them,increases prospects forrenewed balance of paymentpressures over the rest of2016.

As a result, they said thatthe huge parallel marketpremium in the foreignexchange market whichresulted from the decision ofthe Central Bank of Nigeria,CBN, to administratively pegexchange rate in its officiallycontrolled market segment inthe face of sharp depreciationin the parallel market, wouldpersist.

“In all, as the CBN keeps itsgrip of the peg, we expectfurther market dislocation toresult in sustained increase inparallel market premium”.

On the stock market ARManalysts said, “over the restof first half 2016, whilst oilprices show signs of findinga bottom, current foreign

exchange market illiquidityshould continue to stymieforeign interest on thedomestic bourse”.

Thus, they advised thatdomestic investorconsiderations should play apivotal role in charting equitymarket outlook in the secondquarter (Q2), 2016.

However, on this wise, theyreasoned that the recent twistin monetary policy andresultant rise in interest ratesraises the hurdles for quotedcompanies while drivingheightened domestic investorsensitivity to stockfundamentals.

On balance, they see lagged

economic policy response tothe tepid economic landscapeas driving a bearish marketoutlook in the Q2, 2016.

“Our base case was for aweak macroeconomiclandscape on account of theoil price shocks to combinewith current foreign exchangerestrictions to temper foreignparticipation in Nigerianequities, leaving domesticconsiderations to exert greaterinfluence on market outlook.

“On a sector basis, weanticipated the planned fiscalstimulus would be positive forFMCGs (fast movingconsumer goods companies)and cement stocks with thelatter aided by modestvaluation multiples.

“Going forward, whilst oilprices have posted a quickerrecovery than we expected,subsisting glut and stillunclear prospects for anoutput freeze leave room forfurther price volatility in Q2,2016.

“Combined with currentforeign exchange restrictions,we see an extension of net

Sen. UdoUdoma,Minister ofNationalPlanning

Advertising & Media

Vanguard, MONDAY, APRIL 25, 2016 — 31

Nick Imudia is theRegional Director,

Alcatel Nigeria and centralAfrica. He spoke of thecompany’s plan for Nigerianmarket with a renewed focus ofbringing innovation to a broadspectrum of Nigerian consumers.Princewill Ekwujuru reports.

Nigerian mobile phoneculture

Mobile phone is a basiccommunication and work tool formost Nigerians and as such hasbecome an absolute necessity forpeople to communicate and dobusiness. Consumers also needreliable devices that offer themall the features they expect froma smartphone but at anaffordable price. As such priceplays a key deciding factor forthe majority of consumers whoneed to stay in touch and dobusiness on the go.

A key factor in Nigeria is theconnectivity issues faced due tothe growing demand for mobiledevices. This puts a strain onthe infrastructure and hascreated the need for manyconsumers to carry a secondsupporting mobile device inorder to stay connected throughan alternate network.

Nigeria is still very much a

Nigeria is key market for Alcatel—NICK IMUDIA

growing mobile market whichcreates the perfect opportunityfor Alcatel.

Market penetrationWe recognize that every

smartphone user needs anddeserves a device that offersgood performance, beautifulaesthetics and rich functionality.As such, we’ll strive to offerchoice, variety and flexibility toconsumers irrespective of theirbudget.

With our renewed focus inNigeria we have spent the pastmonths giving Nigeriaconsumers, partners, operatorsand their consumers’ easy accessto our vast range of affordableproducts. This includesestablishing the fundamentalssuch as in store devices, bothlive and dummy, promoters, afield marketing team, onlinepurchasing / promotions andtraining for sales staff etc. Webelieve we are delivering on thisand once this has been firmlyestablished we will then turn ourfocus on building Alcatel into amajor player in the Nigerianmarket. We have the brand, theproducts and the distributioncapabilities to grow aggressivelyin the years to come.

Market shareAccording to Q4 2015 IDC +

company data, Alcatelis number 5worldwide in the totalphone market with4.5 percent marketshare. Alcatel is IDCTop 2015- 2016 Top10 GlobalSmartphone brandsand IDC 2015-2016 Top 15Global Smart ConnectedDevices Brand. So globallyAlcatel has strong presence,therefore when entering theNigerian marketplace weneeded to ensure that we hadall the fundamentals in place.Key to this was ensuring we hada strong in-store presence withlive and dummy in store devices,promoters, a field marketingteam, online purchasing /promotions and training for salesstaff etc. In addition it wasimportant for us that wepartnered with the rightdistributors in order to ensurethat the Nigerian consumershave every opportunity to gettheir hands on the perfect mixof Alcatel devices that are featurerich and affordable. This isevident with the Alcatel Idol 3premium smartphone, that iscurrently available with itsinnovative technology.

West Africa hubNigeria is a key market for

Alcatel particularly from an openmarket perspective. However,

we have offices throughoutAfrica all of which are importantto grow.

Phone dealers and availabilityIn order to reach the mass

market in Nigeria, it isadvantageous for companies,particularly technologycompanies to partner with theComputer Village. This givescompanies access to all areas andvillages throughout the country,through their distribution anddealer network. Alcatel aims atmaking technology available tothe market. This means makingit available at affordable priceswithout compromising onfeatures and style. We believethat we have managed toachieve this with the productslaunched in Nigeria.

Partnership with Konga.comE-commerce is seen as an

opportunity for Alcatel to createdeep partnerships withplatforms such as Konga, Jumiaand Yudala. This means thatwe are fully integrated in theend-to-end delivery of theproduct.

The Chairman and Boardof Directors of Lexcel

management/Nigeria Distillerieshas appointed Aare FataiOdesile as Acting ManagingDirector, MD of Grand OakLimited, effective March 282016. Aare Fatai Odesile was theCommercial Director before hiselevation to the position ofActing Managing Director ofGrand Oak Limited (GOL),following the exit of the formeroccupant.

Aare Odesile started hisWorking Career with 7upBottling Company Plc in1991and moved to NDL as aResearch and DevelopmentOfficer the following year.

He rose rapidly to become theR&D Manager, before crossingover to Sales and Marketing,where he rose to become thepioneer Marketing Director ofGOL in 2010.

Lexcel Group appointsFatai Odesile Ag MD ofGrand OakBy ANN OKAFOR

Aviation

NCAA directs airlines to remit collected chargespassengers by the airlines onbehalf of the FederalGovernment of Nigeria.

“These sales charges are toenable all aviation agenciescarry out their responsibilitiesof providing safe, secure andefficient regulatory servicesfor the overall benefits of allaviation stakeholders,”Usman said.

He further said “It isimperative that all unremittedfunds must be forwarded infull to the NCAA immediately.The airlines must desist fromusing these funds ‘’held intrust”; The ongoing 5%Ticket/Cargo/Charter/SalesCharges automation ofpayments which offers real-time transparent transactionsmust be completed withintwo(2) months. This willremove endless reconciliationof data and reduce high debtprofile of Airlines to NCAA.”

“Reconciliation of alloutstanding debts must becompleted within sixty(60)days; The 5% Ticket/ Cargo/Sales Charges must be On

Gross Ticket excluding VATand Passenger ServiceCharge(PSC) only; Allairlines must provide to theAuthority the breakdown ofthe recently introduced‘’Taxes+Fees” component onall passenger tickets whichinclude the amount due toeach Government Agency.”

“That is FAAN-PassengerService Charge (PSC);Federal Inland RevenueServices (FIRS)-5% VAT; andNCAA 5% Ticket SalesCharges (TSC).Any add-oncharge, surcharge (i.e. fuelsurcharges-(YQ, etc) or anyother miscellaneous added onpassenger ticket must be

approved by the Authoritybefore applying these chargeson passenger tickets.”

“After exhaustivedeliberations between NCAAteam led by the DG on onehand and Operators by CaptChimara O. Imediegwu ofFirst nation on the other,agreement was reached by allparties on all the issuesraised.”

Airbus, one of the largest aircraftmanufacturers, has introduced its Airbus

H175 Helicopter series to the Nigeria market.Airbus Helicopters is promoting the H175 seriesthrough a demonstration tour in Lagos. The tourheld from 20th to 22rd April 2016 with severalkey oil & gas operators.

Speaking with Aviation reporters in Lagos, MrRegis Magnac, Vice President, Head ofOperational Marketing, Airbus Helicopter, saidthe H175 series was designed with the supportof oil companies and helicopters operators, and“with 16 passengers aboard in an oil and gasconfiguration, it can fly to distances of 140 nauticalmiles (332KM), increasing to nearly 200 nauticalmiles (435 KM) when 12 passengers are carriedin a long range configuration, with no auxiliaryfuel tank required.”

Airbus introduces Airbus H175 Helicopter series to Nigeria

“In a higher density configuration, it cancarry as many as 18 passengers up to 105nautical miles (269 KM). It offers costcompetitiveness, performance and newstandards of safety and comfort. Thisaircraft is perfectly suited for oil and gasoperators in Nigeria.”

Magnac further said the 7-ton classH175 was developed by AirbusHelicopters as “its new-generationmedium-sized rotorcraft, certified inaccordance with the latest and mostdemanding regulatory requirements.Benefits include enhanced flight safety,more volume per seat for passengercomfort, mission versatility, simplifiedmaintenance, and cost effectiveness tomatch customer expectations.”

By LAWANI MIKAIRU

The Nigerian CivilAviation Authority,

NCAA, Weekend directed allairlines, domestic & charter,operating in the country toforward in full unremittedfunds accruable to theauthority without furtherdelay.

According to Mr SamAdurogboye , GeneralManager, Public Relations,NCAA, the directive washanded down at a meetingwith the operators on non-remittance of 5% Ticket, Cargoand Charter Sales Charges[TSA/TCA] held at theAuthority ’s HeadquartersAnnex .

Adurogboye added that theDirector General of the NCAA,Capt.Muhtar Usmanpresided at the meeting incompany of the Authority’stop management staff.

According to the DG, thedirective is with regards to the5% TSA/TCA collected atsource from the air

32 — Vanguard, MONDAY, APRIL 25, 2016

Omoh Gabriel - Group Business Editor

Babajide Komolafe - Deputy Business Editor

Clara Nwachukwu - Energy Editor

Peter Egwuatu - Asst. Business Editor

Yinka Kolawole - Snr Bus. Correspondent

Favour Nnabugwu - Insurance Correspondent

Godwin Oritse - Maritime Correspondent

Godfrey Bivbere - Maritime Correspondent

Michael Eboh - Energy Reporter

Franklin Alli - Industry/Agric. Reporter

Ifeyinwa Obi - Maritime Reporter

Rosemary Onuoha - Insurance Reporter

Nkiruka Nnorom - Capital Market Reporter

CONTRIBUTORS

Princewill Ekwujuru - Media/Marketing

Jonah Nwokpoku - E-Commerce

Naomi Uzor - Industry

Providence Obuh - Micro Finance

LAYOUT - Graphics Department

(0805 220 1997)

Business & Economy

CMYK

President MuhammaduBuhari on Friday saidhe was yet to be

convinced that the vastmajority of ordinary Nigerianswould derive any tangiblebenefit from devaluation ofthe Naira. The president saidthis at a meeting withmembers of the Council ofRetired Federal PermanentSecretaries in Abuja. He saidthat he still held theconviction which motivatedhis principled resistance todevaluation in his first tenureas head of state.“When I was military head ofstate, the IMF and the WorldBank wanted us devalue the

I'm not convinced on Nigeria's benefitfrom previous devaluations —BUHARI

naira and remove petrolsubsidy but I stood mygrounds for the good ofNigeria. The naira remainedstrong against the dollar andother foreign currencies untilI was removed from office inAugust, 1985 and it wasdevalued.“But how many factories werebuilt and how many jobs werecreated by the devaluation?That is why I’m still asking tobe convinced today on thebenefits of devaluation,” hesaid. Buhari welcomed thecouncil’s pledge of support forthe successful implementationof his administration’s changeagenda, especially in thepriority areas of improving

security, curbing corruptionand revitalising the nationaleconomy.“I am glad you have rightlyidentified the key issues wecampaigned on. We need adynamic bureaucracy whichwill not mislead us into takingwrong decisions,” he added.The Pioneer Chairman of thecouncil, Chief Philip Asiodu,expressed the readiness ofmembers of the council toassist in ensuring the successof Buhari-led administration.We are non-partisan. Theinterest of Nigeria isparamount to us and we areanxious that you shouldsucceed,” Asiodu said.

The template for publicexpectation fromPresident Muhammed

Buhari’s recent visit to Chinawas formally defined by FemiAdesina, in the President’sMedia Adviser’s press release,which was published a daybefore Nigeria’s star-studdeddelegation departed Abuja inApril. However, the FinanceMinister, Kemi Adeosun hadtold Reuters and London'sFinancial Times, just beforethe China trip that Nigeria wasactually in negotiation for a$2.5bn World Bank loan topartly fund the 2016 budget,because of the more favourableterms.

Shortly however, before thisannouncement, Adeosun hadalso suggested that Eurodenominated, Diaspora bondsand Chinese Panda bondsincluding a $Rbninfrastructure loan were alsobeing considered to fund thebudget deficit. Inexplicably,the signing of the $2bnChinese loan did notmaterialise, but Kemi Adeosunwas however quick to confirmthereafter that her Ministrywas actually looking at otherhome grown solutions to fundthe 2016 Budget deficit.

Evidently, however, afterPresident Buhari’s meetingswith Xi Jinping, protocolagreements on various areasof co-operation and assistancewere signed; according toGarba Shehu, the President’smedia assiatant, theseincluded for example, $1bnA b u j a - I b a d a n - L a g o sGreenfield Expressway, a 300megawatt solar plant inShiroro; other more modestdeals which were also sealedin housing, rail transportationand floating gas facilities. Indeed, in another majoragreement, China had alsooffered a $6bn loan to fundinfrastructure projects inNigeria; according to GeoffreyOnyeama, Nigeria’s ForeignMinister, “ the offer is a Credit

President’s trade mission to Chinathat is on the table as soon aswe identify the Projects”. Inthe light of Onyeama’sstatement, it is disturbing thatthe Nigeria delegationembarked on the China Trademission without a clean copyof a defensible and coherent“Wish list” that would havemade access to the $6bninfrastructure loanimmediately possible. Itshould however be instructive,before we commit to the $6bnoffer, to appraise why theearlier infrastructure loansobtained four years ago byformer President Jonathan’sadministration failed topositively impact oureconomy.

However, Nigerians shouldalso be concerned with ourgovernment’s apparentfixation on external loanswhich have yielded minimalsocial impact over the years,especially when, our owndomestic money market,remains embarrassinglyawash with excess Nairaliquidity, while our own CBNalso, ironically sits on almost$30bn reserves “just awaitingauction” to banks!

Conversely, the Chineseshould be encouraged withspecial concessions to injectthe $6bn as direct privateinvestment in Nigeria to buildand independently operatethese critical infrastructuralprojects for a period notexceeding 15years, with aclear provision for privatesector Nigerian partnershipthat would jointly run theestablishment, from the tenthyear, after project iscommissioned.

Notably however, the newsof a Currency Swap agreementbetween Nigeria and Chinaseems to have captivatedpublic attention. Basically, theswap implies that Chinawould set aside billions ofdollars equivalent of itscurrency (the Renminbi) fromwhich Nigerian importers can

directly exchange their Nairaat pre-determined exchangerates, without first procuringdollars to complete thetransaction. Regrettably, thePresidency has not publishedthe amount, nor tenor andapplicable exchange rates thatwill be applicable totransactions and settlementsunder the swap arrangement.

Nonetheless, while briefingState House correspondentson gains of the China trip,Foreign Affairs Minister,Geoffrey Onyeama suggestedthat the celebrated agreementwas not a currency swap aswidely reported, but arecruitment of Nigeria into apartnership “that wouldfacilitate China’s drive to

internationalize its currency”.“So, far us” according toOnyeama, “ it has given us(our economy) greateropportunity, so that thosepeople (who cannot readilyaccess dollars) can now alsoimport, notwithstanding theshortage of dollars”.

Similarly, CBN Governor,Godwin Emefiele, also notedin a ThisDay report of 18thApril that “the agreement oncurrency swap with China willdefinitely benefit Nigeriabecause the essence of themandate is that Nigeria isdesignated as the trading hubwith China in the Ecowas subregion.” Emefiele furtheradded that “ we believe thatusing the Renminbi willimprove trade with China, asthis will encourage importersto open L/Cs in the Chinesecurrency for the importation ofraw materials, equipment andmachinery from China, ratherthan other trading regions, sothe agreement will encouragetrade between both Countries”.

However, Lin Songtian, asenior official of the ChineseForeign Ministry noted thatthe deal on Yuan transactions“means that the Renminbi isfree to flow among differentbanks in Nigeria, and theRenminbi has been includedin the foreign exchangereserves of Nigeria”. Indeed,Lamido Sanusi, as formerGovernor had converted about10% of CBN’s dollar reservesinto Yuan about 4 years ago!

In effect, in order to facilitaterapid Yuan acceptance in oursub-region, Nigeria as hub,will invariably host a ClearingHouse with affiliation to thePeoples Bank of China toallow the Renminbi to becomea common settlement currencywhich can be used for bilateralloans or aid. Ultimately a Newbank with affiliation to theChina bank will also beestablished and dedicated tointermediate on Yuantransactions in the sub region,as a product of the Currency

Swap.Furthermore, China’s official

News Agency reported thatPresident Xi Jinpingexpressed interest in economiccooperation with the Nigeriandelegation, particularly inareas like oil refining andmining; however, it is not yetclear if the Currency Swapdeal also implies that Chinawill pay for Nigeria’s crude oilin Naira or Yuan.

Ultimately, this currencydeal will bolster our Renminbireserves, but this willinvariably lead to acorresponding drop in ourdollar reserves; ironicallyhowever, China may readilydepreciate its Yuan to promoteexport price competitivenessof its products in the UnitedStates and other dollardenominated markets.Unfortunately, in such event,Nigeria’s increasing Renminbireserves would have beendevalued and would buy lessand less dollars than before.It is instructive that, China isalready in similar bilateralcurrency swap agreementstotaling RMB 3.137Tn (about$500bn) with 31 Central Banksincluding the UK and SouthAfrica, and the trade volumewith these countries has sinceexceeded RMB 11 Trillionafter the swap agreements.

Nonetheless, CBN GovernorEmefiele has howeverobserved that “ we are workingto encourage exports of rawmaterials to China in order toreduce the trade imbalance”which is presently, clearlyheavily skewed againstNigeria with an annual importbill of about $15bn to China.However, It is not yet clearhow Nigeria’s industrialproduction and output willever become internationallycompetitive enough to reducethis trade imbalance,particularly when domesticinflation rate is trending atover 12% while cost of fundsto real sector presently exceed20%!

Nigeriansshould alsobe concernedwith ourgovernment’sapparentfixation onexternalloans whichhave yieldedminimalsocial impactover theyears ...