banks, others jittery over investments in power sector

CMYK

APRIL 14, 2014

THERE are strong indicationsthat banks and other financialinstitutions are worried over

the possibility of not being able to re-coup their investment in the powersector.

Indications to this emerged at thejust-concluded Seventh Lagos Eco-nomic Summit, tagged Ehingbeti2014, where some chief executives offinancial institutions expressed con-cern over the revenue profile of thepower companies, especially the re-cently privatized electricity distribu-tion companies (DISCOs). Conse-quently, they called for an increase inthe electricity tariff and price of gasto boost the income generating capac-ity of the companies.

Speaking at a session tagged, ‘Fund-ing the power sector - creating bank-ing projects/companies,’ the execu-tives explained that increasing elec-tricity tariff, as well as the price of gas,will improve the fortunes of the pow-er companies and make it possible formore investors to stake their funds inthe sector.

Members of the panel included Mr.Rossie Turman, Partner, Skadden,Arps, Slate, Meagher & Flom LLP;Mr. Idris Mohammed, Partner, Devel-opment Partners International; Mrs.Sola David-Borha, Chief ExecutiveOfficer, Stanbic Holdings, Mr. AyoGbeleyi, Commissioner for Finance,Lagos State and Mr. Akin Ogunranti,General Manager, Power and Infra-structure, Zenith Bank Plc. Mr. BatchiBaldeh, Senior Vice President, Pow-er, African Finance Corporation wasthe lead speaker, while Mr. SolomonAdegbie-Quaynor, Country Manager,International Finance Corporation,IFC, was session chair.

David-Borha explained that theproblems bedevilling the power sec-tor will be addressed with appropri-ate pricing and tariffs. She noted thatthe distribution companies’ ability topay back their indebtedness will im-prove as their ability to generate morecash improves.

She maintained that pricing is keyin the power sector as it will help en-sure that the numbers add up. Sheadded that if the pricing issue is ad-dressed, everything else will fall inplace. “If we really want more inves-tors to come and invest in the powersector, it is necessary that they should

be given the right incentives and op-portunities. We have to encourage in-vestors by putting more money on thetable; by ensuring the right tariffs arein place,” she said.

Also speaking, Ogunranti called foran increase in the tariffs, noting thata number of investors are waiting onthe sidelines and will not hesitate tocome in and invest in the sector oncethe pricing issue is tackled. He said,“Increasing the tariff will encouragemore investors to put in more mon-ey. If we did do not get the tariff is-sue right, we will not see the rapidimprovement we desire in the powersector.

Adegbie-Quaynor pointed to thefact that what the masses are paying

via the use generators is very high. Hesaid the fact is that the masses are pay-ing life cycle power costs of US$0.40(N64) to $0.50 (N80) per kilo watt hour,with small petrol or diesel generators.He said that this makes it critical forprivate investors, regulators and thegovernment to come together and dis-cuss key issues that can make the powerreforms successful so that the ordinaryman and woman do not have to paysuch large amounts for power.

The key issues, he noted, includereliability and availability of gas, whichwill require investment in gas supplyand a pipeline network; strengtheningand expansion of the power transmis-

Banks, others jittery overinvestments in powersector

Continues on page 18

PARTNERSHIP: From left ; Group Managing Director/CEO, BGL Plc, Mr Albert Okumagba; Group Deputy Man-aging Director, BGL, Mr Chibundu Edozie; and Managing Director, Vunani Limited, Mr Butana Khoza, during thesigning of the strategic partnership agreement between BGL and Vunani in Lagos on Tuesday.

PHOTO: Kehinde Gbadamosi

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 11/04/2014

107.72 +0.50

104.07 +0.26

200.10 -6.00

2,982.00 +12.00

16.82 -0.26

DOLLAR 154.74 155.24 155.74POUNDS 258.895 259.732 260.5686EURO 214.7636 215.4576 216.1515FRANC 176.5247 177.0933 177.6637YEN 1.5247 1.5296 1.5345CFA 0.3082 0.3182 0.3282WAUA 239.3962 240.1698 240.9433RENMINBI 24.9106 24.9915 25.0724RIYA 41.2607 41.394 41.5273KRONA 28.7573 28.8502 28.9431SDR 240.2493 241.0256 241.8019

Worry over low rates of return, seekhigher power, gas tariffs

BY MICHAEL EBOH

Cover Story

CMYK

18 — Vanguard, MONDAY, APRIL 14, 2014

,

,

Continues on page 19

sion network; investment inthe power discos to reduce theAggregate Technical, Com-mercial and Collection(ATC&C) losses, that may beas high as 60 per cent insome discos; and rehabilitateand expand the generationcompanies (GENCOs) andthe Independent PowerProjects (IPPs)”.

He noted that resolution ofthese key issues requires sig-nificant investment, manage-ment and technical skills, add-ing that government, regula-tors and the private sectorneed to come together andreach a solution that will leadto the necessary investments,and at the same time not beadversely impactful on thecommon man or woman.

Continuing, he said, “TheWorld Bank’s position is thatgovernment, regulators andthe private sector owners ofpower assets should come to-gether, deliberate, and find afair and balanced solution sothat Nigeria has reliable andaffordable power to fuel inclu-sive growth and economicdevelopment.

“IFC, World Bank and Mul-tilateral Investment Guaran-tee Agency (MIGA) are com-mitted to supporting govern-ment, regulators and the pri-vate sector in making thepower reforms successfulthrough the World BankGroup’s Energy BusinessPlan which aims to supportfinancing and risk mitigationfor the addition of at least1,500MW of additional gen-erating capacity in the next 12to 18 months.

We would also, “Supportcapital expenditure financingin two to four distributioncompanies; support develop-ment, investment and financ-

Banks, others jittery overinvestments in power sector

ing of Public-Private Partner-ships (PPPs) in both powertransmission and gas pipelinenetworks; support develop-ment and financing of afford-able renewable energy solu-tions through solar lanternsand cook stoves, amongst oth-er products, to the commonman and woman, and also off-grid solar solutions to Smalland Medium Scale Enterpris-es and critical centres likehospitals and schools usingphotovoltaic technology.

However, in a separate ses-sion at the summit, NigerianLabour Congress, NLC rep-resented by its General Sec-retary, Mr. Issa Aremu,warned that until the prob-lems in the sector are re-solved, any attempt to bringabout increase in electricitytariffs will be seen as crimi-nal and will be sternly resist-ed.

He said that tariffs shouldbe commensurate with serv-ice delivery. “It is stealing ifyou increase tariffs withoutimproved service”, he said.

He said Nigerians are ac-tually looking for improvedservice delivery as regardspower supply and will actu-ally like to see what they arepaying for before tariff in-crease is considered.

He noted that the nature ofthe power sector reforms andhow they are carried out arecritical, and also wonderedwhy the reform process is be-ing rushed, especially whenthe operators are of the viewthat a lot still have to be putin place to drive the process.

In other panel sessions atthe three-day summit, the is-sue of revamping the powersector in the country took thecentre stage, while improvingelectricity supply to Lagoswas also given adequate at-

tention.For instance, Mr. Charles

Momoh, Chairman, WestPower and Gas, owner of theEko Distribution Company,emphasized the need to re-vamp the country’s powerinfrastructure, saying thatthe country is still usingpower infrastructure in op-eration since 1896.

He blamed the epilepticpower situation across thecountry on the non-availa-bility of gas and the reduc-tion of power supply to thedistribution companies.

Specifically, he said thatthe total gas available forLagos State, cannot powermore than 500 mega wattsof electricity, adding thatthe company is currentlyreceiving less than 200mega watts, down from the400 mega watts promisedwhen it took over the assets.

Momoh further blamed theTransmission Company ofNigeria, TCN, for the“blinking” power situation,saying, “The TCN intro-duced frequency relays toprotect their equipment,which is at the expense ofconsumers’ appliances, be-cause this relay is respon-sible for the two minutes onand off power situation inLagos.”

He noted that Eko Distri-bution Company currentlyhave the capacity to deliver700 mega watts of electrici-ty, but it is currently receiv-ing only about 240 megawatts.

He however noted thatEko Distribution Companyhas commenced the processof increasing power supplyby about 500 mega watts,adding that it is talking to45 companies interested in

Continued from page 17

UNVEILING: From left, Executive Secretary, Lagos State Water Regulatory Commis-sion, Mrs Tanwa Koya; a board member, Professor Lanre Fagbohun; chairman, Mr TaiwoShebioba; member, Mr Doyin Owolabi and President of Consumer Advocacy Foundationof Nigeria, Ms. Sola Salako, at the unveiling of the commission's website, toll free lines,and complaints boxes for better public access in Lagos.

Breaking the Nigerian povertycycle through entrepreneurialrevolution (1)

Nigeria is a country ofabsurd economic

realities. The 13th largest crudeoil producer in the world andthe second largest economy inAfrica earn an estimated $2.2million a day in oil revenue. Yet,its GDP per capita, at just over$1,400, is among the lowest forthe continent and 54 per centof its 148 million people live onless than $1 per day. Thefigures are especially shockingbecause of the abundance ofnatural resources primarily oiland natural gas, and massiveagricultural potential based onits climate and significant ruralpopulation.

Human development data forNigeria has remainedpersistently bleak despite aconsiderable upturn in thecountry’s economic fortunessince 2000. The UNDP ranked

the country 80th in a povertysurvey of 108 developingnations that focussed onsevere deprivation. Theagency gave Nigeria aHuman Poverty Index of 37.3,placing it below moreimpoverished Africanneighbours with far smallereconomies like Rwanda andMalawi. Significantly, thestudy looked not just atincome destitution, but also atsecondary aspects includingeducation, access to healthcare, standard of living andlife-expectancy. More than 67million Nigerians aredocketed as poor according tostandard definitions, while 35per cent of the total populationlive in extreme poverty.

These recent trends areespecially worrying becausethey parallel a significant butcontradictory improvement inNigeria’s macro-economic

performance. Before thecurrent global financial crisisset in, Abuja had beensuccessful in wieldingsubstantial positive change inits overall balance sheetsthrough a process of re-prioritisation and economicreform since 1999. A slew ofmeasures, includingprivatisation of several steel,petrochemical, mining andport entities helped developthe non-oil sector, bring downinflation and boostinternational currencyreserves. Nigeria alsosuccessfully negotiated withthe London and Paris clubs todo away with a large part ofits foreign debt.

However, World Bankresearch confirms that evenduring periods of relativeprosperity, poverty levelsremained unabated in thebroadest sense, and actuallyworsened during successivepositive growth periods.

Between 1972 and 1980,for instance, the

Nigerian per capita incomeshot up from $1,300 to $2,900based on rapidly escalatingoil prices. A subsequentdecline in global oil revenuesdragged down per capitaincome, consumption andexpenditure to critical levels.However, Nigeria neglectedinvestment in humandevelopment projects andcontinued to pump borrowedfinances into capital-intensiveenterprises. The fallout wasthat the dramatic rise innational fortunes bypassedthe majority of Nigerians, asevident from the negligiblerise in per capita consumptionfigures for the same period.

The differential effect onpoverty levels in rural andurban areas for the coincidingperiod is equally startling.Because of a simultaneousworsening of incomedistribution, rural povertydeclined slightly while thenumber of urban poor gained.However, the worst-off werealso the worst losers, as thepopulation living in extremepoverty across Nigeriaswelled up from 10 million to14 million. The obviousexplanation behind this is thatpolicy makers sorely failed toshare the increase in wealthequitably.

The obviousexplanation

behind this isthat policy

makers sorelyfailed to sharethe increase in

wealthequitably

CMYK

Vanguard, MONDAY, APRIL 14, 2014 — 19

,,

Continued from page 18

Cover story

embedded generation and twoother companies for captivepower.

On his own part, Mr. SolaAdeshina, Managing Director,Sahara Power, owner of theIkeja Distribution Company,also noted that unavailabilityof gas and a non-cost reflec-tive tariff structure is hamper-ing the effective delivery ofpower to consumers.

In addition, Mrs. Funke Os-ibodu, Chief Executive Offic-er, Benin Electricity Distribu-tion Company, said that oper-ators are aware that Nigeriansare fed up with the power sit-uation and want a change.

She however noted thatwhat is lacking is the fact thata vast majority of Nigerians do

not have the information thatthe change that is expectedwill require more from everyone.

According to her, fixing theproblems in the power sectoris a long haul and it will takea long time for operators toachieve their goals.

“Nigerians should be awarethat infrastructure is not pow-er. The government and somepoliticians will donate trans-formers to a community andthey will think their powerproblems are over.

“We should know that trans-former is not power. Power hasto be generated first before thetransformer and other equip-ment can distribute.”

In his own view, Mr. AnilSardana, Managing Director,

Tata Power, who spoke via livewebcast from India, said thereforms in the Nigerian pow-er sector will not succeed un-less there is direct support andoversight from the govern-ment.

Banks, others jittery over investments in power sector

Bajaj Auto Limited,manufacturers of Bajaj

tricycle, Bajaj RE, said it hasimproved the performance itstricycle. The company said ithas added 20 more advancedfeatures to the cycle.

The company stated that foradvanced performance of thetricycle it has added eightperformance advancement inthe redesigned gear box,increased the slot width for

Bajaj raises stakes on tricycle with 20 new features

When in August 2009 Sanusi Lamido Sanusi intervened in five troubledbanks in the country; many saw it as a rescue mission. But I saw itdifferently. I whole-heartedly supported Sanusi cleaning up the toxic

assets in the industry. Beyond that, I disapproved of his taking over of somebanks that were still liquid at the time of the intervention. Sanusi did not separatethe individuals from the institutions. If some of the bank executives contravenedthe banking rules, the CBN or the law enforcement agencies are at liberty to dealwith such individuals. As it happens so often in developed democracies,

Revisiting rescued banks’ grant of waiversto billionaires: What redress is possible?

companies that infringe onregulatory guidelines arefined heavily and in somecases, their chief executivesare prosecuted and jailed.

If Sanusi at the time hadrelieved the chief executivesof those banks of their jobs andmade them to face the law, hewould have been a hero. Buthe did not stop at removingthe chief executives, he wentahead and took over the banks.That was what many did notsee that behind the scene,there were unseen handsguiding some of the well-targeted decisions. Whensome of us saw through whatwas happening and said so,the country never took ourwords for certain. One of thevery sad things that happenedthen was waivers granted tobillionaires. At the time, thelink between Sanusi, Lai Alabiand Bukola Saraki was not soclear to Nigerians. Now thatSanusi Lamido Sanusi hasopenly acknowledged thatSaraki was his classmate, thepicture of what happened tothe rescued banks is becomingclearer. Now, if Saraki isSanusi’s close friend and LaiAlabi worked for Saraki, thenthe connection and thesubsequent chain of actionsthat led to the liquidation ofsome of the banks is emergingin very clear terms.

For those of us who reportedthe crisis recall with nostalgiathat Intercontinental Bank’sinterim management thenheaded by Lai Alabi hadgranted waivers to the tune ofseveral billions to somecompanies alleged to beassociated with Saraki. Thesedebtors were close to the theninterim management put inplace by the CBN Governor.The explanation then was thatin order to recover fully the

principal of their non-performing loans, themanagement of some of thetroubled banks startednegotiations with key debtorswho applied for forbearance.

In the madness of the time,Intercontinental Bank grantedwaivers to a debtor who owedthe bank N11 billion andapplied for 70 per cent waiver.Also, another customer whoowed the bank N1.5 billionapplied for forbearance andgot about N500 million waiver.The debtor was billed to payN1billion but what was said tohave reached the bank’s vaultwas N800 million. The balanceof N700 million was given aswaiver to the debtor.

In another instance, acustomer who owed N7.5billion was said to have hadhis entire indebtedness writtenoff.

The suspended CBNGovernor, Mallam LamidoSanusi, when questioned byreporters at the 2009 IMF/World Bank meeting inIstanbul, Turkey, said that theCentral Bank will not getinvolved in the day-to-dayrunning of the troubled banks.He said that the onus ofrunning the banks was in thehands of the managementsand the boards.

It was clear from thebeginning that what washappening in the industry atthe time was not normal asbankers were worried thatthough it is normal for a long-standing non-performing loan

considered lost written offthe books of a bank to be sotreated, most of the banksbailed out by CBN had nofunctional boards to grantsuch waivers, leaving thedecision to the ManagingDirectors, some of whom wereacting as sole administrators.

The discretion applied bythose chief executives was notin the interest of reviving theailing banks but to pander tothe interest of those whoappointed them. In normalcircumstances, it is only theaccumulated interest andpenalty that are built into aloan term that can be grantedas waivers, not the principal.

It was abnormal that at a timewhen the Economic &Financial Crimes Commission,EFCC, was busy recoveringdebts from chronic debtors, themanagement of the troubledbanks started to give waiverswithout the approval of anylegally constituted board byshareholders. In the ordinarycourse of doing business,money fully provided for asloan loss when recovered goesto beef-up the capital orshareholders’ funds which thenon-performing loan hasgrossly eroded. What onefound disturbing at the timewas the fact that the caretakermanagement ofIntercontinental Bank haddisclosed that the bankrecovered over N78 billion outof the N142.644 billionprovisions for loans and otherknown losses, stating that thewaivers the bank granted to

debtors was in line with theexisting policy in the bank toencourage debtors to pay.Explaining the situation, LaiAlabi had said: “When loanshave become bad as they are,when the underlyingsecurities have virtually beentotally eroded as we havenow, then there is a need to

give someconcessionsin order toe n c o u r a g esuch debtorsto pay, thatis exactlywhat we didand this is thepractice in allbanks - bothin Nigeriaa n dworldwide.” T h e r eexisted suchpolicy onw a i v e r sbefore thep r e s e n tmanagementa s s u m e doffice, thiswas thenpresented tothe creditc o m m i t t e ew h i c hrefined ita n dpresented itto the boardw h i c happroved it.But we arecontesting

with serious issue of molesin the bank, what these peopleintended to achieve was tomalign the bank, frustrate theprogress we have made for thepurpose of serving certaininterest.

”Most of the figures givenout are distorted. For instance,in some cases the

amounts theyare asked to payexclude thevalues of sharethe loans wereused topurchase. Also inmost cases, thewaivers took intoconsideration,wrong debits,penalty chargesand other entriesin dispute; weneed to have inmind that oureffort has so faryielded a rewardof about N80billion since theintervention.”

Now that it is inthe publicdomain thatsome of theactions werepremeditated tohelp a friend getwhat he hadcraved for butcould not get inthe ordinary runof business, whatredress ispossible for thoselost five banks?

The very sadthing thathappened thenwas waiversgranted tobillionaires. Atthe time, thelink betweenSanusi, LaiAlabi andBukola Sarakiwas not so clearto Nigerians.Now that SanusiLamido Sanusihas openlyacknowledgedthat Saraki washis classmate,the picture ofwhat happenedto the rescuedbanks isbecomingclearer

smoother gear shifting,improved on the enginecooling mechanism, thedigital ignition with TPS andexhaust TEC.

Speaking, Head, Marketingand Sales for DAGMotorcycles IndustriesLimited, marketers of thetricycle, Mr. Firdous Ahmad,who gave the brandperspective of the tricycle, saidthat the anti judder clutch has

been improved upon, the hoodpipe heightened, improved onthe cabin ergonomics,redesigned the driver cabinfloor and the water splashguard improved upon.

For durability of the tricycle,he said the product now hasbigger screw– on type oil;strainer which is a dual oilfiltration process.

He noted that financial pru-dence in the transition proc-ess is key, adding that empha-sis should be placed on thechange management process,as well as in the valuation ofthe business.

He said customer satisfac-tion should be the key goal forthe reforms process, addingthat the reforms should alsofocus on working to reduce thecost of distribution.


CMYK


CMY

Business & Economy

The digital world ishere. We are all usingvarious digital

devices – smartphones,laptops, tabletops,tablets,phamblets, etc andconsuming data,which is thecurrency of the digital world.Manufacturers and techiesare pushing out new gadgetsand appon on a daily basistofurther drive us down thedigital lane. At the heart of allthese are the telecommuni-cations networks whichprovide the high capacitytransport infrastructure thatservices ride on. It is oftenacknowledged thattelecommunications is to thedigital era what electricitywas to the industrial era.Across various spheres ofendeavours – education(distance learning),traditional and social media,travel and tours, shopping,entertainment, etc, Nigeriansare actively harnessing digitalopportunities and ways oflife, courtesy of theenablement accorded by thet e l e c o m m u n i c a t i o n snetworks.From growingtelephone penetration fromless than one percent in 2001to more than 86 percent in2013, the telecommunicationssector now comes second onlyto the oil and gas sector interms of attracting ForeignDirect Investment (FDI) andcontribution to GrossDomestic Product (GDP) inNigeria. According to PyramidResearch, the sectorcontributed about 35 percentof FDI(aroundUS$45bn)between 2001 and2011 and its GDP input grewfrom below one percent to8.54 percent between 2001and 2013. The sector has alsobeen responsible for creatingaround three million directand indirect jobs and a valuechain that impacts millions ofNigerians across variousspheres of life. It has alsobeen pivotal in promotingwide public access toinformation which is animportant element for thedevelopment of democracy.As a social overhead capital,that is, a basic service withoutwhich primary, secondary andtertiary productive activitiescannot function effectively,telecommunications thereforeneeds to be accorded dueattention by relevantstakeholders in order toensure that Nigeria’s visionof digital inclusion is realized.

With the announcement ofthe National Broadband Plan(NBP) by the FederalGovernment last year, thetelecommunications sector isset to play an even greaterrole in the socio-economicdevelopment of the country.A critical success factor for theNBP was aptly outlined in the

The Lagos initiative:Another first by the telecomsindustry

BY OSONDU C.NWOKORO

following statement“implementation of a nationalbroadband plan requireslong-term commitment andsignificant action by theFederal, States and LocalGovernments, as well as, theexecutive and legislativebranches of government –alongside strong privatesector participation.”Ridingon this, theFederalGovernment through theMinistry of CommunicationTechnology is partnering withIBM, a global ICT player, toprovide technology-drivensolutions to resolvechallenges in key sectors ofthe Nigerian economy and tothat end has convened aministerial roundtable todevelop appropriateimplementation plans.

At state level,Lagos andOsun have declared ICTadoption as an important partof their strategic developmentefforts and are activelycollaborating with the privatesector to this end. OgbeniRauf Aregbesola,Governor ofOsun State who had earlierchampioned the State’smultiple award-winningcomputer tablet innovation,“Opon Imo” (Tablet ofKnowledge), recentlyreaffirmed his determinationto make his state the ICT hubin Nigeria at a ceremonymarking the take-off of themulti-million dollar RLG-Adulawo Technology City inIleshathat that was set-up byRLG Communications, aphone manufacturingcompany, with support fromOsun State Government.According to the GroupChairman of RLGCommunications, thetechnology city will play amajor role in the technologyrevolution that is imminent inNigeria.The centre will beinvolved in the training ofyouths in the assembly, repairand manufacture of variouselectronic devices and isexpected to create over 10,000jobs, both directly andindirectly. Aside from being astrategic tool, Osun Statehaskeenly applied ICT intransactional activities asOgbeni Aregbesola hadindicated that the deploymentof ICT in governmentoperationshad blocked

financial leakages andbrought about an increase ininternally generated revenueby 100 per cent, from N300million to N600 million withinone year and to N1.6 billionpresently. Lagos State hasalso adopted e-paymentssolutions for governmenttransactions. The Eko Atlanticcityproject which will beAfrica’s first “Smart City” isundoubtedly the mostambitious ICT project of theState to date.

While not detracting fromthese initiatives, the recentagreement between theLagos State Government andthe telecommu-nications operators whichstreamlines the approvalprocesses and fees fortelecommunications facilitiesdeployment is an even moremomentous development interms of scope of impact anddemonstrated alignment withthe spirit and letters of theNBP’s vision on public-private sector collabora-tion.TheLagos StateGovernment was interested inprotecting the sanctity ofextant planning and relatedregulations while the

telecommunications operators’concerns were around speed ofi n f r a s t r u c t u r edeployment,discriminatoryfees and multiple taxation/regulation, as well as theprotection of their facilities fromillegal lock-outs by over-zealous government officials.In discussions leading to thelandmark agreement, theparties were able to reachreasonable and legitimatecompromises as partners-in-development to streamlineprocesses leading to reductionin approval timelines for thegrant of site build permits to 30days and reduction ofapplicable fees by around 60percent. This landmarkagreement will certainlyfacilitate the expansion oft e l e c o m m u n i c a t i o n sinfrastructure across LagosState to enhance the provisionof services currently on offerand facilitate the deploymentof “future” services such as 4GLTE. The CEO of Airtel, SegunOgunsanya, certainly had thisin mind when he recentlyexpressed gratitude to theLagos State Government andannounced thattelecommunications operatorswould reciprocate the goodwillby providing state-of-the-artservices in the state.

Telecommunication has beenplaying a leading role innational development since theliberalization of the sectorabout thirteen years ago. Inaddition to facilitating tele-access for over 120million

Nigerians presently andmaking significantcontributions to GDP and FDI,the sector is now pioneering adevelopmental partnershipmodel that will prove useful inthe consolidation and growthof all infrastructure-basedindustries in Nigeria, therebyreaffirming its status as ‘thegoose that lays the golden egg.'Such a specially innovativeindustry should be widelycelebrated rather than vilifiedas unfortunately seems to bethe case currently.

Osondu is Director, Legal& Regulatory Affairs at AirtelNigeria.

,

,

Omobolaji Johnson, Minister for Information andCommunication Technology

It has alsobeen pivotal inpromoting widepublic access toinformationwhich is animportantelement for thedevelopment ofdemocracy

MTN providesdata roamingservices BY ETOP EKANEM

MTN, has taken thebull by the hornsby providing data

roaming services for itscustomers , even as manyoperators are shying awayfrom resolving the high ratesof data roaming charges orcoming up with a betteralternative,.

Only few operators aretrying to ensure that theirmedium and high valuecustomers still have access tothe internet through theirmobile phones while roaming.

Recently, MTN launched aproduct termed “Browse likeHome when you Roam withMTN One World”.

The MTN One World is anew data roaming tariff whereMTN prepaid and post-paidsubscribers, who travel out ofthe country, have access tothe internet on their mobilephones and send textmessages, paying a standardhome rate of 5kobo perkilobyte and N4 per SMS, asif they were in Nigeria. Thisservice is available in any of19 MTN operating countriesnamely: Benin, Cameroon,Ghana, South Africa, Liberia,Cote D’Ivoire, Uganda,Congo, Rwanda, GuineaConakry, Zambia, Iran,Sudan, Guinea Bissau,Cyprus, Swaziland, Yemen,Afghanistan and Botswana.

The Chief MarketingOfficer, MTN Nigeria, LarryAnnetts, explained that, thekey strategic focus for the newtariff plan is to ensure datacommunication at the mostaffordable and friendly rate onthe go. “We are alwayscommitted to deliver a newworld of digital experience toour customers and the thrustof this initiative is to ensurefriendly roaming tariff , whereour customers who travel toany of our 19 operatingcountries can still feel athome, browsing at a standardhome rate of 5kobo perkilobyte.


CMYK

CMYK


Corporate Finance

LECTURE: - From left, Vice Chancellor, Ladoke Akintola University of Technology,Ogbomoso, Prof.Gbadegesin Adeniyi; Former National President, Nigeria Associationof Chambers of Commerce, Industry, Mines and Agriculture, Chief John Odeyemi; ViceChancellor, Obafemi Awolowo University, (OAU), Ile Ife, Prof. Bamitale Omole; andChairman, GlaxoSmithKline Nigeria Plc, Chief Olusegun Oshunkeye, at the first yearlylecture organised in honour of Odeyemi by the Natural History Museum, OAU.

Seplat listing may spur return of publicofferings — NSE boss Skye Bank Plc has

announced a profitbefore tax of N17.136 billionfor the financial year endedDecember 31, 2013,representing an increase of3.79 per cent over theN16.510 billion recordedduring the correspondingperiod in 2012.

According to theInternational FinancialReporting System’s (IFRS)compliant result submittedto the Nigeria StockExchange last week, theBank’s profit after tax rosesignificantly to N16.023billion compared withN12.644 billion posted inthe previous year showingan improvement of 26.7 percent.

Other highlights of theresult include growth intotal assets from N1,073trillion to N1.116 trillion,while its deposit liabilitiesalso increased from N966billion to N996 billionduring the period underreview, reflecting a growthof three per cent.

IMF urgesnations to cutbudget deficit

The InternationalMonetary Fund, IMF

urged has nations to cutbudget deficits, sayingdeflationary concerns, weakgrowth prospects and risingborrowing costs threaten toundermine fiscal balances.While Europe is mostexposed to the risk of asustained period of ultra-lowinflation, the U.S. FederalReserve also saw itspreferred gauge of pricechanges remaining below its2 percent target for almosttwo years. The IMF hastermed such developments“low-flation” and is callingon countries to take action toprevent it from hurtingoutput and reducinggovernments’ ability to repaydebts.

“In most countries,persistently high debt ratioscontinue to cast shadows overthe medium term,” theWashington-based IMF saidin its Fiscal Monitor reportreleased today. “Risks tofiscal forecasts remain mostlyon the downside, reflectingweak growth prospects,medium-term policyuncertainty, and persistentdeflationary concerns withpotentially deleteriousimpacts on debt dynamics”and budget results, it said.

Skye Bankposts N17bnprofit for2013

Diamond Bank posts N8.2bn profit infirst quarter

D iamond Bank Plchas recorded a Profit

After Tax (PAT) of N8.2 billionfor the first quarter of 2014,representing a growth of 37per cent Year on Year.

According to informationfrom the Nigerian StockExchange, NSE, the Bankalso recorded a profit beforeminority interest of N8.446billion for the year underreview, while interest incomestood at N38,245 billion.Analyzing the DiamondBank’s first quarter results,FBN Capital stated that thegrowth in PAT was driven byvisible improvements inDiamond’s underlyingresults and a reduction intaxes.

According to its analysis“Both funding income andnon-interest income postedhealthy growth during theperiod. Diamond Fundingincome was up 12 per centy/y to N27.5billion whilenon-interest income grew 65per cent y/y to N10.0billionto support a 23 per cent y/ygrowth in PBT beforeprovisions.”

Continuing, the FBNCapital stated “Loan growthof 3 per cent Quarter onQuarter, q/q in first quarter,Q1 was slightly ahead of the

2 per cent q/q deposit growthduring the period. Similar tothe fourth quarter, Q4numbers, these results morethan offset a 25 per cent y/yincrease in OperatingExpenses ,opex and N5.0billion in loan loss provisions(up 54 per cent y/y).Sequentially, PBT was up 42per cent q/q because fundingincome growth of 7 per cent

q/q and a 24 per cent q/qdecline in provisions wereenough to offset a decline of11 per cent q/q in non-interestincome.

“ However a N2.0bn taxgain in Q4 2013 and to alesser extent N250million losson the other income linecompared with N764millionin Q4 2013 resulted in PATdeclining 11 per cent q/q.

Compared with ourunrevised estimates (priorto Q4 results beingpublished), Diamond’s Q12013 results are betterthan we were expecting.Although funding incomewas close to our forecastof N28.5bn forecast, non-interest income came inahead of our forecast by 48per cent.

A stock market debut byoil and gas firm Seplat

in Lagos and London is likelyto unleash a round of InitialPublic Offerings (IPOs) inNigeria , the Chief ExecutiveOfficer, Nigerian StockExchange, NSE, Mr. OscarOnyema has said.

Onyema told the ReutersAfrica Investment Summitthat he expects more oil andgas listings to follow Seplat’s.He said this would help tacklethe sector ’s under-representation on theNigerian Stock Exchange.

The sector currently makesup just 2.6 percent of marketcapitalization versus 14percent of Nigeria’s newlyrebased GDP. After Seplat, thesector will make up 5.9percent of the exchange.

Seplat said it had raised$500 million in its IPO andplans to list its shares in Lagosand London on April 14. Theoffering gives Seplat a market

capitalization of $1.9 billion.None of the foreign oil

majors such as Shell andExxon Mobil that have beenoperating in Nigeria fordecades are listed. Only localfirms; Oando, Forte Oil,Conoil and now Seplat arelisted.

Heavyweight cementproducer Dangote Cementaccounts for a third of the NSE, followed by the bankingsector .”It will be the first yetto resume.

The market is down 6 percentin the first quarter, whichOnyema attributed to thetapering of quantitativeeasing in the United States,volatile emerging marketcurrencies and Nigeria’sforthcoming elections, whichhad led to some pullback fromforeign investors.

Nigeria revalued its grossdomestic product (GDP) onSunday to more than $500billion, surpassing South

Africa as the continent’s topeconomy and shrinking theratio of stock marketcapitalization to GDP to 15percent, compared with morethan 100 percent in most

developed stock markets.“It positions us better tobecome a gateway toAfrica for foreign direct orportfolio investments,”Onyema said of therebasing.

GTBank to reward credit cardholders

Guaranty Trust Bank Plc has announced the launch ofits new loyalty scheme exclusively for GTBank credit

card holders. The loyalty scheme is in partnership withAvios, the leading global travel rewards company.

This initiative is part of GTBank’s overall strategy to bringthe best in card products to its customers. It will rewardinternational GTBank credit card holders, who are alsomembers of the British Airways Executive Club Programme,for using their cards to pay for purchases using Point ofSale terminals. Avios is the global currency of the BritishAirways Executive Club. Members can collect Avios whenthey book a flight or shop with its partners and now whenthey spend with their GTBank credit card. With the newGTBank credit card loyalty scheme, every card holder willcollect one Avios for every $2 USD on qualified spend onthe card.

By PETER EGWUATU

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Sim Capital Alliance Plc 103.50 103.50 103.50 103.50 10.56 9.71Stanbic IBTC Bank Plc 20.45 20.45 100,882 15.69 10.64 0.87 18.03UBA Capital Plc 2.60 2.60 7,781,504 1.41 0.03 0.21 6.71

HEALTHCAREMedical SuppliesMorison Industries Plc 1.91 2.23 785 10.54 9.52 0.00 0.00Healthcare ProvidersUnion Diagnostics & Clinicals Services 0.50 0.50 60,250 0.50 0.50 0.00 0.00

PharmaceuticalsEkocorp Plc 3.72 3.72 162 5.31 5.31 88.50Evans Medical Plc 2.12 2.12 2,500 1.45 0.70 0.19 0.00Fidson Healthcare Plc 2.92 2.92 9,498 3.20 0.83 0.44 3.07Glaxo Smithkline Consumer Nig 70.00 70.00 239,074 23.11 2.58 2.62May & Baker Nigeria Plc 1.81 1.81 49,500 5.61 3.61 0.20 9.05Neimeth International Pharm 1.45 1.45 3,000 1.96 0.95 0.09 14.13Nigeria-German Chemicals Plc 7.36 7.36 2,150 12.91 0.95 0.00 0.00Pharma-Deko Plc 1.57 1.57 100 200 4.28 0.00 0.00

ICTComputer Based SystemsCourteville Investment Plc 0.57 0.57 5,201,000 0.52 0.50 0.10 10.00

Computers and PeripheralsOmatek Ventures Plc 0.50 0.50 2,600 0.50 0.50 0.00 12.50

IT ServicesNCR (Nig) Plc 15.99 16.83 5,098 9.31 3.25 0.00 1.43Tripple Gee and Company Plc 1.97 2.07 360 3.59 3.25 0.01 0.00Processing SystemsChams Plc 0.50 0.50 1,360,450 50,000

ICTTelecommunicationsStarcomms Plc 0.50 0.50 4,000 1.47 0.50 0.00 0.00

INDUSTRIAL GOODSBuilding MaterialsAshaka Cement Plc 16.62 16.62 795,608 30.00 12.00 2.14 7.86Berger Paints Plc 8.76 8.76 49,116 12.57 8.10 1.09 4.97CAP Plc 37.75 37.75 89,657 43.98 15.16 2.28 8.88Cement Co. of Northern Nig. Plc 9.48 9.48 264,827 15.49 4.16 1.47 2.31Dangote Cement Plc 235.00 234.70 737,148 132.51 95.00 7.56 13.17First Aluminium Nigeria Plc 0.50 0.50 150 0.75 0.50 0.00 0.00DN Meyer Plc 1.16 1.34 62,984 3.51 1.02 0.00 0.00Lafarge WAPCO Plc 108.00 108.00 958,957 48.05 36.58 4.10 42.86Portland Paints & Products Nig Plc 4.10 4.10 20 5.28 5.11 0.44 14.19Paints & Coatings Manufacturers 1.64 1.90 10,000 3.36 0.51 0.23 2.89Premier Paints Plc 10.00 11.00 123,564 13.40 10.93 0.00 0.00

Packaging/ContainersAvon Crowncaps & Container 1.41 1.41 3,125 6.91 5.94 0.5 39.60Nigerian Bags Manufacturing Company 2.74 2.70 2,717,101 3.60 1.47 0.25 9.16

Tools and MachineryNigerian Ropes Plc 7.46 7.85 40 8.69 8.26 0.00 0.00

NATURAL RESOURCESChemicalsBOC Gases Plc 6.66 6.66 1,000 9.20 6.80 0.78 7.37

MetalsAluminium Extrusion Ind Plc 7.75 10.50 500 12.39 10.70 0.13 85.77

Non-Metalic Mineral MiningMultiverse Plc 0.50 0.50 33,333,333 0.50 0.50 0.01 0.00

Paper/Forest ProductsThomas Wyatt Nig. Plc 0.79 0.79 1,000 1.38 1.38 0.00 0.00

Electronic and Electrical ProductsCutix Plc 1.94 1.94 200,200 2.50 1.62 0.11 13.15Nigerian Wire & Cable Plc 0.50 0.50 10,000 2.58 2.58 0.00 0.00

Mortgage Carriers, Brokers and SeAbbey Building Society Plc 1.44 1.44 2,000 1.51 1.33 0.03 28.80INDUSTRIAL GOODSPackaging/ContainersAbplast Products Plc 3.98 3.98 6,888 3.98 3.98 0.00 0.00Beta Glass Co. Plc 19.95 19.95 119,520 15.58 12.71 3.90 3.26Greif Nigeria Plc 12.68 12.68 10 15.03 13.97 0.90 0.00Nampak Nigeria Plc 4.30 4.30 29,198 4.30 3.60 1.22 3.52Poly Products (Nig) Plc 1.05 1.05 200 1.86 1.05 0.30 6.18Studio Press (Nig) Plc 2.92 2.78 84,311 2.92 2.92 0.07 41.71W.A. Glass Ind. Plc 0.63 0.66 2,749,340 0.63 0.63 0.00 0.00

OIL AND GASEnergy Equipment and ServicesJapaul Oil & Maritime Service 0.50 0.50 531,000 0.97 0.87 0.19 6.06

Intergrated Oil and Gas ServicesOando Plc 16.04 16.04 3,625,073 78.97 27.99 1.73 4.17

Petroleum and Petroleum ProductsAfrican Petroleum Plc 20.50 20.50 82,191 37.10 0.50 4.93 7.40Beco Petroleum Plc 0.50 0.50 2,000 0.70 0.50 0.00 0.00Conoil 51.90 51.90 16,044 5.59 3.89 0.61 6.99Forte Oil Nig Plc 122.70 122.70 507,146Mobil Oil Nigeria Plc 120.05 120.05 36,576 163.50 141.00 6.11 11.11MRS Oil Nigeria Plc 54.44 54.44 156 2,100 63.86 2.98 19.23Total Nigeria Plc 172.38 172.38 32,566 240.00 195.50 14.63 17.07

HospitalityTantalisers Plc 0.50 0.50 200 200 0.01

SERVICESAfromedia Plc 0.50 0.50 30 0.72 0.51 0.00 12.75Automobile/Auto Part RetailersRT Briscoe Plc 1.15 1.15 118,531 3.65 1.30 0.21 8.19

Courier/Freight/DeliveryRed Star Express Plc 4.39 4.39 116,700 3.67 2.65 0.60 4.91Trans-National 2.47 2.47 62 0.25 11.12Employment SolutionsC & I LEASING PLC 0.50 0.50 9,000 1.64 0.90 0.04 11.25

Hotels/LodgingCapital Hotel 4.55 4.55 1,000 400 3.00 0.34 34.09Ikeja Hotel Plc 0.57 0.57 72,000 2.07 1.33 0.92 2.12

Media/EntertainmentDaar Communications Plc 0.50 0.50 10,000 0.50 0.48 0.00 0.00

Printing & Publishing.Academy Press Plc 1.80 1.80 1,000 3.68 3.17 0.25 12.19Learn Africa Plc 1.78 1.78 152,048 0.30Studio Press Nig. Plc 2.40 2.40 1,080 0.00 0.00University Press 3.67 3.67 1,232,211 6.82 3.60 0.54 27.69

Road TransportationAssociated Bus Company Plc 0.89 0.89 688,485 0.80 0.50 0.00 0.00

SpecialityInterlinked Technologies Plc 4.90 4.90 1,995 5.15 4.90 0.00 0.00

Transport-Related ServicesAirline Services and Logistics Plc 2.46 2.46 55.669 2.78 1.57 0.60 4.22Nigerian Aviation Handling Company 5.09 5.09 811,742 11.75 6.50 12.53 8.75

Opening Closing Quantity Year Year P.EPrice N Price N Traded High Low E.P.S Ratio

Oil and Gas and ProductsPetroleum Prod ucts

Capital Oil Plc 0.50 0.50 100 0.50 0.50 0.09

1st fTier SecuritiesAGRICULTURECrop ProductionFTN Cocoa Processors Plc 0.50 0.50 3,000 0.50 0.50 0.10 50.00Okomu Oil Palm Plc 42.00 42.00 23,980 24.58 14.53 7.33 2.77Presco Plc 42.00 42.00 78,339 8.30 6.40 2.75 4.37

Livestock/Animal SpecialitiesLivestock Feeds Plc 3.09 3.09 813,170 0.66 0.48 0.11 15.00

CONGLOMERATESDiversified IndustriesA.G. Levents Nigeria Plc 1.43 1.43 2,503 2.54 1.45 0.16 5.18Chellarams Plc 3.95 3.95 4,500 7.60 6.43 0.31 20.74John Holt Plc 1.21 1.27 1,500 8.82 5.89 0.00 0.00SCOA Nigeria Plc 5.06 5.06 20,454 8.28 5.52 0.35 15.77Transnational Corporation 3.55 3.55 13,701,241 1.82 0.50 0.24 3.64UACN Plc 59.00 59.00 1,151,038 42.50 28.70 6.89 4.14

CONSTRUCTION/REAL ESTATEBuilding Construction/StructureARBICO Plc 5.30 5.30 31,443 4 20Constain (WA) Plc 1.29 1.29 671,961 2,720,390.38

CONSTRUCTION/REAL ESTATENon-Building/Heavy ConstructionJulius Berger Nig Plc 68.50 68.50 69,970 62.26 32.96 4.11 10.11Roads Nigeria Plc 8.46 8.46 4,750 8.28 3.01 4.73 2.26

Real Estate DevelopmentUACN Property Development 25.00 25.00 950,719 20.15 11.59 1.69 7.33

Real Estate Investment TrustsSkye Shelter Funds 100.00 100.00 200 100.00 97.00 11.75 8.51Union Homes Real Estate Investment 47.59 47.59 70 - - - -

CONSUMER GOODSAutomobile/Auto PartsDN Tyres & Rubber Plc 0.50 0.50 14,000 0.50 0.50 0.00 0.00

Beverages-Brewers/DistillersChampion Breweries Plc 13.79 13.79 20 4.63 2.23 0.00 0.00Guinness Nigeria Plc 190.00 190.00 84,301 255.00 186.00 9.95 19.98International Breweries Plc 26.41 26.41 121,875 7.10 5.23 0.41 16.29Nigerian Brew Plc 150.85 150.85 3,378,679 100.00 72.50 5.08 22.22Premier Breweries Plc 0.77 0.77 10,000 1.01 0.93 0.00 0.00

Beverages-Non-Alcoholic7-UP Bottling Company Plc 90.00 90.00 8,097 51.49 ,39.00 2.69 13.92

Food ProductsDangote Flour Mills Plc 8.18 8.18 200,400 19.90 4.31 0.00 16.91Dangote Sugar Refinery Plc 9.85 9.85 1,131,777 16.20 4.02 0.91 14.38Flour Mills Nigeria Plc 68.49 68.49 1,098,837 95.00 57.00 4.09 16.89Honeywell Flour Mill Plc 3.70 3.70 574,785 6.60 2.31 0.39 16.92National Salt Co. Nig Plc 11.90 11.90 274,862 6.70 3.80 1.01 5.75UTC Nigeria Plc 0.53 0.53 38,647 0.88 0.50 1.13 8.83

Food Products-- DiversifiedCadbury Nigeria Plc 77.00 77.00 2,974,266 37.27 8.33 1.35 27.61Nestle Nigeria Plc 1,185.00 1,185.00 211,173 840.10 400.00 25.43 32.84

Household DurablesNigerian Enamelware Plc 32.27 32.27 60 36.19 33.96 13.89 2.44Vitafoam Nig. Plc 4.03 4.03 54,800 5.54 2.91 0.61 7.07Vono Products Plc 1.66 1.66 11,000 2.88 2.88 0.00 0.00

Personal/Household ProductsPZ Cussons Nigeria Plc 32.00 32.00 205,019 41.02 21.02 0.82 4.39Unilever Nigeria Plc 46.00 46.00 240,223 47.39 27.60 1.44 32.91

FINANCIAL SERVICESBankingAccess Bank Plc 7.41 7.41 5,568,797 12.39 4.70 1.42 8.73Diamond Bank Nigeria Plc 6.03 6.03 19,591,452 7.51 1.92 0.90 8.34Ecobank Transnational Incorporated 13.10 13.10 31,605,010 14.04 9.90 2.81 5.00Fidelity Bank Plc 2.11 2.11 6,124,714 3.47 1.13 0.43 7.93First City Monument Bank Plc 4.75 4.75 865,336 5.70 2.90 0.00 0.00Guaranty Trust Bank Plc 27.20 27.20 13,759,127 26.09 13.02 2.10 12.39Skye Bank Plc 3.49 3.49 22,361,420 6.50 2.65 0.71 9.15Sterling Bank Plc 2.62 2.62 11,771,597 3.05 0.80 0.54 5.43UBA Plc 7.20 7.20 9,593,981 7.69 1.64 0.67 11.19Union Bank Nig. Plc 10.35 10.35 504,983 10.60 2.34 0.00 0.00Unity Bank Plc 0.50 0.50 2,103,763 1.22 0.50 0.00 0.00Wema Bank Plc 0.99 0.99 2,525,595 1.75 0.52 1.34 0.43Zenith Bank Plc 21.25 21.25 29,699,488 21.49 11.96 2.09 10.24

Insurance Carriers, Brokers and SectorAfrican Alliance Insurance 0.50 0.50 100 0.50 0.50 0.00 0.00AIICO Insurance Plc 0.76 0.76 1,207,472 1.11 0.50 0.50 22.20Continental Reinsurance Plc 0.97 0.97 245,313 1.03 0.58 0.14 6.79Cornerstone Insurance Company 0.50 0.50 4,410,491 0.54 0.50 0.02 27.30Consolidated Hallmark Insurance 0.50 0.50 150 0.50 0.50 0.50 10.00Custodian and Allied Insurance Plc 2.00 2.06 9,054,578 2.44 1.08 0.28 7.43Equity Assurance Plc 0.50 0.50 1,500 0.50 0.50 0.01 50.00Goldlink Insurance Plc 0.50 0.50 93,000 0.68 0.50 0.00 0.00Great (Nig) Insurance Plc 0.50 0.50 2,750 0.50 0.50 0.03 16.67Guinea Insurance Plc 0.50 0.50 2,200 0.50 0.50 0.01 50.00International Energy Insurance Plc 0.63 0.63 74,400 0.50 0.50 0.00 0.00Investment and Allied Assurance 0.50 0.50 1,670,890 0.50 0.50 0.02 25.00LASACO Assurance Plc 0.50 0.50 10,500 0.50 0.50 0.00 0.00Law Union & Rock Insurance Plc 0.50 0.50 3,200 0.60 0.50 0.00 0.00Linkage Assurance Plc 0.50 0.50 151,500 0.50 0.50 0.03 16.67Mansard Insurance Plc 2.32 2.32 5,098,821 2.59 1.06 0.16 16.19Mutual Benefits Assurance Plc 0.50 0.50 1,000 0.54 0.50 0.00 0.00NEM Insurance Co. (Nig) Ltd 0.77 0.77 5,074,189 0.81 0.50 0.37 2.19Niger Insurance Co. Plc 0.50 0.50 10,000 0.61 0.50 0.02 26.00OASIS Insurance Plc. 0.59 0.59 204,700 0.50 0.50 0.03 16.67Prestige Assurance Co. Plc 0.63 0.63 418,000 1.01 0.50 0.06 15.50Regency Alliance Insurance 0.50 0.50 200 0.50 0.50 0.04 12.50Sovereign Trust Insurance 0.50 0.50 1,000 0.56 0.50 0.09 5.65Staco Insurance Plc 0.50 0.50 1,000 0.50 0.50 0.00 0.00Standard Alliance Insurance 0.50 0.50 30,000 0.50 0.50 0.00 0.00UNIC Insurance Plc 0.50 0.50 1,000 0.50 0.50 0.00 0.00Unity Kapital Plc 0.50 0.50 1,500 0.50 0.50 0.02 25.00Universal Insurance Plc 0.50 0.50 300 0.50 0.50 0.00 0.00Wapic Insurance Plc 0.69 0.69 11,342,914 1.08 0.50 0.07 15.43

Microfinance BanksFortis Micro-Finance Bank Plc 6.27 6.27 1,000 6.00 0.00 0.04 150.00

NPF Micro-Finance Bank Plc 0.97 0.97 272,000 1.18 0.92 0.92 10.56Mortgage Carrier, Broker and SectorAbbey Building SOC 1.35 1.35 500 1.57 1.37 0.19 47.6 7Aso Savings and Loans Plc 0.50 0.50 185,447 0.50 0.50 0.02 25.00Resort Savings & Loans Plc 0.50 0.50 20 0.50 0.50 0.00 0.00Union Homes Savings Plc 0.50 0.50 109,000 0.50 0.50 0.00 0.00

Other Financial InstitutionsAfrica Prudential Plc 3.04 3.04 3,031,252 0.75 0.00 0.19 9.16Crusader (Nigeria) Plc 0.50 0.50 22,000 0.50 0.50 0.00 0.00Deap Capital Management & Trust Plc 0.99 0.99 500 2.02 2.02 0.00 0.00FBN Holdings Plc 12.35 12.35 11,354,899 20.00 8.57 2.03 9.85Nigeria Energy Sector Fund 552.20 552.20 250 552.20 12.68 43.55Royal Exchange Assurance 0.62 0.59 212,000 0.78 0.50 0.13 6.00

Opening ClosingPrice Price Quantity Year Year P.E.

Company (N) (N) Traded High Low E.P.S. Ratio

Capital Market Daily Stock Market Report as at Friday, April 11, 2014

CMYK


Banking & Finance

UNVEILING: From left, Managing Director/CEO, SystemSpecs, Mr. John Obaro, Super Eaglesformer goalkeeper and Ambassador, Remita Corporate Champions’ Cup, Mr. Peter Rufai,Managing Director/CEO, Media Vision, Mr. Fela Bank-Olemoh and Executive Director,SystemSpecs, Mr. ‘Deremi Atanda during the trophy and logo-unveiling ceremony of RemitaCorporate Champions Cup in Lagos

Stanbic IBTCrelocatesOshodi branchAs part of efforts to take

banking services evencloser to customers’doorsteps, Stanbic IBTCBank, a subsidiary of StanbicIBTC Holdings, has relocatedits Oshodi branch at BrownStreet to a more accessiblelocation along the Oshodi-Apapa Expressway. The newbranch is strategically locatedclose to Oshodi bus stop tobetter serve the bankingneeds of residents of Oshodiand its environs.

Speaking on the relocation,Executive Director of Personaland Business Banking inStanbic IBTC Bank, ObinniaAbajue, said the movebecame necessary toaccommodate the growingneed to provide full financialservices in the Oshodi area.Abajue said the financialinclusion drive of the bankhas seen a rapid expansionof its operations withinOshodi and its environs,necessitating the relocation toa more conduciveenvironment for customers.

“Stanbic IBTC Bankcurrently has over 180branches nationwide withpresence in every state of thefederation. Our retailbanking business operates anetwork of over 2,500MobileMoney agents.

The rate of increase inprices of goods and

services will rise to 10 percentfrom the 7.7 percent recordedin February.

The rate, which is referredto as inflation rate has beenrelatively stable sinceOctober last year. From 7.8percent in October, it rosemarginally to 7.9 percent inNovember and 8.0 percent inDecember. Though itremained stable at 8.0 percentin January, it however fell to7.7 percent in February.

A Central Bank of Nigeria(CBN) official howeverestimated that this declinewill be short-lived andreplaced by a steady rise inthe next six months. DeputyGovernor, Operations, CBN,Mr Kingsley Moghaludisclosed this in his personalstatement at the MonetaryPolicy Committee (MPC)meeting held last month. Hesaid, “While headlineinflation in February 2014fell to 7.7 percent from 8.0percent in January 2014,core inflation has inchedhigher from 6.65 percent inJanuary 2014 to 7.17percent in February 2014.Moreover, staff estimatesproject headline inflation ata range between 8 percentand 10 percent over thenext six months, based onfactors including fiscalspending and the impact ofthe planting season. Thisprojection clearly indicatesthat an inflationary threatremains real, and the beastof inflation is yet to be slaindecisively. The policyimplication is that the MPCmust maintain a tight

CBN official predicts 10%inflation by Julymonetary policy at this time.This is more so when weconsider the global conditionsnoted earlier.” Meanwhileanalysts at FinancialDerivatives Company (FDC),have predicted decline ininflation for the Month ofMarch to 7.64 percent.

The prediction wascontained in the FDC’sEconomic Bulletin publishedlast week. The companystated, “Based on ourmonthly analysis of thenational consumer price

index, we forecast amoderate decline in theheadline inflation to 7.64percent in March from 7.7percent recorded inFebruary. Our projectionreveals a slower rate ofchange in consumer priceswhen compared to the sameperiod in 2013.”

“Further to this, thecontinuous contractionarymonetary policy by the CBNis expected to keep inflationmuted in the near team. Also,the projection of a lower

inflation rate coincides withthe announced rebased GDPnumbers. Most countrieslook towards achieving ahigh GDP growth rate in a lowinflation environment. A highnominal GDP in a lowinflation environmentincreases the fiscal andmonetary policy options opento policy makers. As anattractive market, theincrease in capital flows willboost the external reserveslevel and enable the CBNbring down interest rateslater.”

President, AfricaDevelopment Bank Group(AfDB), Dr. Donald Kaberuka,will lead discussions onfinancial inclusion at theAfrica CEO Round-table &Conference on CorporateSustainability &Responsibility (AR-CSR).

The event, which is thefourth in series, will focus onFinancial Inclusion with thetheme: ‘The Intersection:Financial Inclusion, EconomicSustainability & SocialBenefit’. Scheduled to hold inJune will feature a keynoteaddress by Kaberuka.

In a statement announcingthe event, the conveners ofthe Conference, ThistlePraxisConsulting, said, “Thecorrelation between financialinclusion and economicgrowth has long been widelyrecognized. However despitebroad consensus on theimportance of access tofinance as a powerful povertyalleviation tool and

AfDB President leads discussions on financial inclusion at CEOs roundtablesubstantial financial sectorreforms in Africa, it isestimated nearly half thecontinents’ householdscontinue to be excluded fromthe formal financial sector’.

“Financial inclusion, whichadvances universal access toappropriate and affordablefinancial services, is crucial toinclusive growth. At the basiclevel, financial inclusion iseffectively a measure of theextent to which economicagents in an economy utilizethe financial servicesapparatus at their disposal toeffect the desired exchanges,and particularly, support thehighest possible activity inthe real economy.

Hence, the 2014 edition willseek to interrogate theintersection where financialinclusion fosters economicsustainability and enhancessocietal benefit. The financialindustry plays a critical rolefor society at large, serving

individuals, families,businesses, governments,civic institutions and otherstakeholders. The sectorperforms indispensablefunctions such as enablingfinancial inclusion,facilitating saving andinvestment, providingprotection from risks andsupporting the creation ofnew jobs and enterprises. Itis critical that the sectoroperates to provide thesefunctions for society in astable, sustainable way, andincreases awareness of itsactivities in this area.

In its annual tradition, theAR-CSR will again feature aseries of events such as: CEOround-table sessionsfollowed by a one-and-a-half-day conference; SustainableSolutions Showcase (anexhibition of eco-friendlyproducts and servicesolutions); Eco-Tourism,Sustainable Investment

Forum (hosted by the CrossRiver State Government);Networking cocktails & GalaDinner amongst otherinspiring and intellectuallystimulating activities.

Leaders from a variety ofsectors from far and widewithin and outside thecontinent will gather to sharetheir expertise andexperiences on an array ofbusiness and developmentsub-topics. They will also tryto identify what is missing:the pooling of the mostavailable heap of investablefunds possible from all nooksand crannies of the economy;how to channel the pooledfunds to attractive productionactivities, particularly those ofsmall-to-medium sizeenterprises which areestablished as the mainengines of economic growthand job creation acrosscountries.

Second set ofwinners emerge inEcobank’s promo

Ecobank has rewardedanother set of winners

that emerged from its Card 4Prizes promo’s secondmonthly draws that heldsimultaneously in Lagos, PortHarcourt and Abuja last week.The 15 lucky winnersemerged from a transparentelectronic draw witnessed byofficials from National LotteryRegulatory Commission(NLRC) and the ConsumerProtection Council (CPC).They went home withdifferent prizes includingsmart phones; Led TVs; airconditioners; home theatresand power generating sets.

According to Head, Cardsand e-banking, EcobankNigeria, Mr. Tunde Kuponiyi,the promo which was flaggedoff in February is graduallyachieving its objectives. Morecustomers of the bank nowutilise the alternativepayment channels thatincludes ATMs, Point of Sale(PoS) terminals and internetBanking.

By BABAJIDE KOMOLAFE

26 —Vanguard, MONDAY, APRIL 14, 2014

CMYK

Banking & Finance

As part of its strategicinitiatives to drive

financial empowermentand boost economicdevelopment, First Bankof Nigeria Limited, isteaming up with the OyoState Government for theState Summit scheduledto hold from today.

The Summit themed“Oyo State: Right forBusiness” is organizedto highlight the variousopportunities that areabound in the state forboth local and foreigninvestors, as well asidentifying practicalsolutions to develop keystrategies that will serveas an integrated roadmap to achieving theeconomic transformationof Oyo State through aframework of privatesector partnership. Themain aim of the summitis to create an enablingenvironment that wouldattract business andinvestment opportunitiesin Oyo State fromstakeholders acrossboard, and alsostrengthen theprogressive partnershipbetween the stategovernment and theprivate sector.

His Excellency,Senator Abiola Ajimobithe Governor of OyoState will be on hand atthe opening ceremony todeclare the Summitopen. Other dignitariesand discussants expectedat the summit include;The South AfricanAmbassador to Nigeria,Mr J. N. K. Mamabolo;Nigeria’s foremostbusinessman, AlhajiAliko Dangote, GroupChairman FBN HoldingsPlc, Dr. Oba Otudeko,Dr. Oby Ezekwesili and Mr. Bismarck Rewane.

FCMB, Kano boost cashless policy with customised PoS terminalsThe cashless policy

has received amajor boost with FirstCity Monument Bank(FCMB), Limited andthe Kano StateGovernment partneringto launch customisedPoint of Sales (PoS)machines to fast-trackinternally generatedrevenue in Fagge LocalGovernment. The PoSmachines, which aresecure, easy to use andrun on customisedsoftware, have beendistributed to the taxcollection staff to ease

revenue generation inthe area.

FCMB in a statementannouncing thepartnership said,“Fagge localgovernment is taking thelead in theimplementation of thenewly passed 2014Kano State HarmonizedRates and Levies Lawthat aims at removing allambiguities hithertoexperienced by taxpayers by providingthem access to tracktheir tax records. TheFCMB PoS machines

will ensure effective andefficient tax collectionsystem therebyeliminating issues suchas multiple taxes andleakages in localcouncil’s revenuecollection system.

Handing over themachines to the localgovernment at aceremony held recentlyat Fagge town, FCMB’sZonal Head for theNorth-west Zone, Mr.Abdullahi Mainasara,explained that the Bankdeveloped the taxcollection platform as

part of its contributionsto the success of thecashless economy andfinancial inclusionpolicies of the CentralBank of Nigeria. Headded that the,deployment of the PoSmachines to motor parks,markets and othercollection points, “willhelp to reduce leakagesin tax collections, boostinternally generatedrevenue (IGR), enhanceautomation, trackingand real time reportingof revenue collection”.

He said the PoS

collections initiative forFagge LGA, ‘’is also inline with FCMB’s focuson being a strategicpartner in helping ourcustomers grow theircollections andpayments and also buildcustomised solutionswhere they may not yetexist”. According tohim, the Bank hasconducted refreshertraining for revenuecollectors and other staffinvolved in the projecton the use andoperations of the PoSmachines as part of the

capacity buildingcomponents of thepartnership.

Mr. Mainasara addedthat FCMB wouldensure that thecustomized PoS revenuecollection initiative,which is being piloted inFagge local government,is extended to all the 44local governments inKano state. Hereiterated thecommitment of the Bankto further partner withthe local and stategovernments on otherinitiatives that wouldimpact the lives ofindividuals, businessesand the society.

FirstBankpartners Oyo toboost economicdevelopment


CMYK

CMYK

28 —Vanguard, MONDAY, APRIL 14, 2014

Homes & Housing Finance

JPMorgan profitsJPMorgan profitsJPMorgan profitsJPMorgan profitsJPMorgan profitsfall as mortgagefall as mortgagefall as mortgagefall as mortgagefall as mortgagebusiness fadesbusiness fadesbusiness fadesbusiness fadesbusiness fades

US banking giantJPMorgan Chase has

reported a sharp fall in profitsat the start of 2014, which itblamed on declines in itsmortgage business.

The bank said net income inthe three months to the endof March was $5.3bn(£3.1bn) - a fall of 19 percentcompared with a year earlier.Profits from its mortgagebusiness stood at $114m,down $559m from last year.

The figures mark the secondsuccessive quarterly fall inprofits at the bank. Profitsfrom its corporate andinvestment banking divisionstood at $2bn, down from$2.6bn just three monthsearlier. The results follow a2013 marred by huge legalsettlements over JPMorgan’smortgage practices prior tothe 2008 crisis. The “Londonwhale” trading scandal andother controversiesincluding legal costs relatingto the fraudster BernieMadoff also dented earningsin 2013.

JPMorgan chief executiveJamie Dimon still describedthe bank’s first quarter resultsas “good” given the industry-wide headwinds in bothinvestment banking andmortgages.

US mortgagerate inchestowardsrecord low

Average U.S. rates onfixed mortgages

declined last week, edgingcloser to historically lowlevels as the spring home-buying season begins.

Mortgage buyer FreddieMac said that the average ratefor the 30-year loan fell to4.34 percent from 4.41percent the previous week.The average for the 15-yearmortgage eased to 3.38percent from 3.47 percent.Mortgage rates have risenabout a full percentage pointsince hitting record lowsabout a year ago.

Refinancing’s share ofmortgage applications fellfrom 53 percent to 51 percentin the week ended April 4 - thelowest level since July 2009,the Mortgage BankersAssociation reportedWednesday. The increase inmortgage rates over the yearwas driven by speculationthat the Federal Reservewould reduce its $85 billion-a-month bond purchases,which have helped keep long-term interest rates low.Indeed, the Fed hasannounced three $10 billiondeclines in its monthly bondpurchases since December.

Investigations haverevealed that majority ofhome owners in Lagos

State, and in many other statesof the federation, have noCertificate of Occupancy (C ofO). A Certificate of Occupancyis a document issued by Stategovernments in Nigeria to aland/property buyer as a proofof ownership. A parcel of landor property without anauthentic C of O or equivalentcould be likened to a vehiclewithout an authentic vehiclelicence.

Individuals or corporationsseeking to buy land in Lagoshave several options: Theycan buy straight from thegovernment in the case ofgovernment acquired land orbuy from individuals who havebought from the governmentor buy from the natives(popularly known as Omoo’nile in Lagos), afterverifying from the authoritiesthat they are not illegallyselling government acquiredland. Whoever one buys from,you need to eventuallyobtain a C of O from the stategovernment to legitimize thepurchase, if the previousowner have not already doneso.

The following are the step bystep procedures anddocuments required forobtaining a C of O in LagosState for both State land andnon-State land:

Procedures for State landApplicant purchases and

submits application pack toLand Use AllocationCommittee (LUAC) andcollects acknowledgementslip; Applicant collects letterof offer of allocation (1 day);Applicant pays for allocatedland (within 90 days);Applicant issued with letter ofconfirmation with plot andblock number (Full paymentsmust be made before Plots &Blocks are allocated); SchemeOfficer processes applicationfor C of O, signs off on the fileand forward files to ExecutiveSecretary LUAC (5 days);Surveyor General providesScheme Officer with digitizedsurvey (2 days); ES LUACapproves processing and signsletter of allocation. ES LUACsigns off on the file, send fileto the Senior Special Assistantto the Governor on Lands (2days);

SSA (Lands) vets entire fileand sends file/application witha covering memo to thePermanent Secretary LandsBureau (2 days); If file has aquery, message is relayedback by notification;

Procedures, requirements for obtainingC of O in Lagos State

By YINKA KOLAWOLE

Our journey to home ownership, by LagosHOMS winners

Eleven new home ownerswho successfully met

the requirements of theLagos Homes OwnershipMortgage Scheme (LagosHOMS) collected the keys totheir apartments from theLagos State GovernorBabatunde Fashola recently.

One of the lucky winners,Mr. Amos Kimeh Omodunni,narrated his journey tobecoming a home owner inLagos with these words:“Everything worked just likeclock. I did not have to visitany office or talk to anyone.Everything that I needed todo to complete thatapplication was done just inmy office and I did not haveto move anywhere.”

Omodunni won a three-

bedroom apartment at ShittaEstate, Surulere, one of theestates purposely built by thestate government forownership by prospectivefirst time home owners onlyunder a mortgage paymentsystem.

Other lucky new homeowners are: Mrs. RukiatAbdulmalik, Mr. AdemolaOdujoko, Mr. EjirogheneTorishedu Madedor, Mrs.Yetunde OluwaseunAwopeju, Mr. Ajayi OmotayoJubril, Mrs. Ganiyat DolapoAkanni, Mr. Gbenga Owolabi,Mr. Chukwuneta John PaulOgbatwi, Mrs. Bibian AlobaKanayo and Mr. Ikpeh DanielDarligton.

Giving testimony on behalfof other winners after they

were handed keys to theirrespective apartments,Omodunni said the journeythat changed his statusstarted a few weeks ago whenhe came across the scheme onone of the social media sites.

According to him, he sawthe photographs of one of theschemes that were uploadedwhen the Governor visited theestate. Having read moreabout the Lagos HOMSinitiative, he said he becameinterested. That was how heapplied and followed theentire process through,online.

He explained that he wasfascinated by the non-complex procedure of thescheme unlike some otherhouse ownership schemes.

Certificate of Occupancy key for housing development

PS Lands signs off on thememo and sends file toGovernor (2 days); Governorapproves file andelectronically signs the C of O(2 days); If file has a query,message is relayed back bynotification.

Upon approval and signingof C of O, the Governor signsoff and sends file to the DeputyRegistrar for furtherprocessing (2 days); DeputyRegistrar processes filefurther, signs off and sends file

to Registrar of Titles for finalregistration (2 days);Registrar of Titles registersthe C of O, signs off andrequest for printing of C of O(1 day).

The whole process adds upto 21 days

Documents required forState land

Formal Letter addressed tothe Executive Secretary – LandUse and Allocation Committee,Block 13, Room 4, LandsBureau, The Secretariat,Alausa, Ikeja; StandardAllocation Form with Receipt- Lekki Pennisula Schemes,

Abijo Commercial andIndustrial (Form for PrimeLand); other areas (Form forGeneral); Four PassportPhotographs with whitebackground; Evidence ofpayment of Income Tax;Current Development Levy(In case of company, Evidenceof payment of Income Taxo f Two Directors andDevelopment Levy); SurveyPlan; All payment receipts ofLand Charges; VitalInformation Form.

Procedures for Non-State land

Submission of Applicationand Vital Information Formfor Certificate of Occupancy(by Applicant); Compilationof applicants names forpublication, Title Search forprevious Registration and SiteInspection (21 days);Certificate of OccupancyEngrossment (by LUAC);

Recommendation forexecution of C of O (by ESLUAC, SSA Lands & PSLands); Execution of C of O(by Governor); Stamp Duty (byCommissioner for Stamp

Duties); Registration of C of O(by Land Registry); andCollection of executed andregistered C of O (byApplicant)

Documents required forNon-State land

Formal Letter addressed tothe ES LUAC, Block 13, Room4, Lands Bureau, TheSecretariat, Alausa, Ikeja;Completed Certificate ofOccupancy Form with receipt;Land Information Certificatewith receipt; Four originalSurvey Plan (2 in cloth and 2

in paper); Four PassportPhotograph with whitebackground; Sketch Map ofthe Site Location; PurchaseReceipt Duly Stamped;Evidence of payment ofIncome Tax; CurrentDevelopment Levy. (In case ofCompany, Two Directors TaxClearance and DevelopmentLevy); Publication Fee -N10,000.00; CapitalContribution Fee subject to aminimum of N30,000.00;Building Plan Approval ifdeveloped; and Copy ofTenement Rate Receipt (ifoccupied).

CMYK



CMYK

Aviation

Aviation experts havethrown their weight

behind the Minister ofPetroleum, Mrs DeizaniAlison-Madueke saying sheneeds a chartered aircraft tofacilitate her movementconsidering the nature of thejob of her ministry.Theyfurther contend that going byregular scheduled flights willslow down the minister ’smovement and consequentlymake her less efficient.

Recall that the House ofRepresentatives has beenprobing the PetroleumMinister over an allegationthat she “ has expended overN10 billion on charter andmaintenance of a Challenger850 aircraft.” However, theNigerian National PetroleumCorporation,NNPC, has

Airports need separatepower projects, saysNAHCO boss

Stories ByLAWANI MIKAIRU

NAHCO MD, Mr Kayode Oluwasegun-Ojo

Nigerian AviationHandling CompanyPlc. capitalized

recently marked 35 years incargo, aircraft handling,passenger facilitation, crewtransportation and aviationtraining. Part of the activitiesmarking the Company’s 35th

anniversary, saw theManaging Director, MrKayode Oluwasegun-Ojo,personally handling thecheck-in formalities of aLondon-bound VirginAtlantic Airways passengerMr. Michael Olusesi.

He thereafter fieldedquestions from Aviationreporters. Exceprts:

NAHCO is 35 years old.What has kept the companygoing?

Good and strong corporategovernance. The companyhas maintained strongcorporate ethical standards.We are a service provider andwhatever impression youcreate with passengers stayswith them and is passed onto others. So, it is imperativeyou maintain high standardand give customers valuedservices.

NAHCO is one of the fewcompanies that has beensuccessful after privatizationand is one of the few publiclyquoted companies inaviation industry. What is therelationship withshareholders?

We have tried to keep faithwith our shareholders. We area profit oriented company. In2005, NAHCO Aviance wasprivatized and subsequentlylisted on the Nigerian StockExchange in 2006. Thecompany is now owned byover 80,000 shareholders,including two internationalairlines — Air France andLufthansa; as well as localinvestors; Sycor PrivateInvestment Limited andRosehill Group NigeriaLimited. The company’s stockexchange symbol is“Nahco”.

We have always placed theinterest of our shareholdersfirst and we try to satisfythem. We pay dividends,though the shareholders willalways ask for more . We havethe confidence of ourshareholders. Theperformance of the companyon the stock exchange isokay.

Your company has a strongglobal alliance with Aviance.How has that impacted yourbusiness ?

NACHO has developedstrategic global alliancesthrough its membership ofAviance, the global alliance of10 reputable airport serviceproviders operating from 112stations in 17 countries. We

have a cordial relationshipwith our partners and wehave abided by the MoUs wesigned with them. Thepartnership has made us aglobal player and has helpedus compare our performancewith our foreign partners andkeep international standards.

In terms of training andequipment, how much hasthe company invested inthese areas ?

We have invested morethan $50 million in equipmentand training. The benefit oftraining is what has helpedus retain our internationalclients. In the last three to fouryears, we have invested morethan N500 million on localand international training ofour staff. We are a serviceprovider and so, training iskey. We provide value andbuild value through training.

When I took over as chiefexecutive of the company,most of the company ’sequipment were more than 20to 30 years old. In the lastthree years we have investedheavily in equipment and Iam proud to say that ourequipment are now less thanthree years old.

What is your share of theground handling operationsmarket currently ?

We currently control 85 per

cent of the ground handlingoperations in Nigeria. Thecompany currently servesmore than 35 airlines at sevenairports across Nigeria, withplans to expand operations toother African countries. Ithandles about 70% ofdomestic and foreign airlinesoperating in Nigeria.

You had issues with theNigerian Customs overimproper warehouserecords. Though the issueshave been resolved, what isyour relationship with theorganization now ?

Yes, we, along withSAHCOL, had issues withNigerian Customs over whatthey called improper recordsof goods in our warehouses.The issues have beenresolved and agreementswere signed. We have abidedby these agreements. We havea cordial relation with them.

What has been the biggestchallenges so far ?

Infrastructure problems atmost of the airports. Powersupply is the biggestchallenge. It has increasedthe cost of operations. We arehowever hopeful that withprivatization of the powersector, things will improve.We are also recommending tothe government that there

should be an independentpower project strictly for theairports. This will enhancepower supply to the airports.

Also as a leader in groundhandling operations inNigeria, we are target ofattack by our competitors. Weare however not aversed tohealthy competition.

Stakeholders fault mergerof aviation parastatals

Aviation stakeholdershave reactedfuriously to the

Federal government approval of the Steve Oransanyereport and the White Paperdirecting the merger ofNigerian AirspaceManagement Agency,NAMA, Nigerian CivilAviation Authority, NCAA,and Nigerian MeteorologicalAgency, NIMET, into a bodycalled Federal Civil AviationAuthority.

Former commandant ofNigeria Airport, Capt. JohnOjikutu, is of the opinion thatgovernment cannot merge aregulator with agencies it issupposed to regulate.According to Ojikutu“Whoever advisedgovernment to merge NigeriaAirspace ManagementAuthority, NAMA, NigerianCivil AviationAuthority,NCAA, and the

Nigeria MeteorologicalAgency, NIMET, must be fromanother planet. He probablyforgot to include FAAN in theappropriation to further takeus back to the era of self-regulation.”

“Oransanye must have beenwrongly briefed by some eggheads. How do you mergeoperators of the industry withthe regulator? This mergercompletes what Oduahstarted – bring the industryunder the jackboot of thegovernment. Must thegovernment drive the policy,regulate and operate theindustry? We must be in aworld of our own and out ofthe earth.”

“When we should get theprivate operators to investmore in the industry orcommercialise government operators like FAAN andNAMA as recommended inthe privatisation andcommercialization Act of2000, government instead isappropriating the industry toitself alone. Surely,government officials andpolitical office holders can notremove their eyes, mind andsouls from the hidden orsleaze funds in theseagencies.”

Chairman, Air TransportServices Senior StaffAssociation, ATSSSA MrEkanem Ekanem believesthat whoever advisedgovernment to merge theagencies does not wish thecountry well, as the mergerwill take Nigerian aviationsector some decades back.He said NCAA is anautonomous body and cannotmerge with service providerlike NAMA.

Petroleum Minister needschartered plane for effectiveperformance —Aviation experts

denied the existence of achartered aircraft for theexclusive use of the Minister.

Speaking exclusively withVanguard , an aircraftEngineer with the defunctNigerian Airways and currentexecutive member of AviationRound Table, Engineer SheriKyari said the nature of thePetroleum Minister ‘s jobdictates that she has access toa chartered aircraft to facilitateher movement.

According to Engr Kyari “the difficult terrain were oilcompanies operate needs tobe accessed by an aircraft andbeing asupervising minister overthese companies, the ministerneeds a stand by aircraft forexigent movement.


CMYK

CMYK


Agric

CBN releases N19.9bn GESS fund toboost agricThe Central Bank of

Nigeria (CBN) hasso far released aboutN19.9 billion under theGrowth EnhancementScheme (GES)’s CreditRisk Guarantee (CRG)meant to boostagriculture financing inthe country.

The apex bank,however did notapprove any GrowthEnhancement Scheme

Nigeria‘ll soon befree from wheatimporters—ADESINA

BY GABRIEL EWEPU

AS the federal government intensify itscampaign for 20 per cent inclusion of

cassava flour in wheat flour, the Minister ofAgriculture and Rural Development, Dr.Akinwumi Adesina said Nigeria will soon befree from the shackles of wheat flourimporters.

Adesina made the declaration whilecommissioning the official headquarters,buses, guest house and website of the NigeriaCassava Growers Association of Nigeria,NCGA, in Abuja at the weekend.

Adesina commended the achievementsrecorded by the NCGA and congratulatedfarmers for making Nigeria the world’s largestcassava producing and exporting nation.

He said the government was making franticeffort to place Nigeria as number one cassavaprocessing country in the world since it hadoccupied the position of number one producerof the commodity over time.

He assured Nigerians that by 2015, Nigeriawill surpass the target of adding 20 millionmetric tons of food to the national food outputset at the time of launching the ATA in 2011.

Adesina said: “I want to say that PresidentGoodluck Jonathan is excited with what youfarmers are doing because without food therecannot be national security. President Jonathanlaunching the Agricultural Transformation,ATA, just three years ago and his goal wasvery simple is to take Nigeria from a fooddependent to a food self-sufficient country andalso making it a food exporting country.

Nasarawa tasksextensionworkers, youthson bumperharvest

The Nasarawa stategovernment has urged

beneficiaries of the FederalGovernment’s motorcyclesand Knapsack sprayers, toensure bumper harvest andfood sufficiency in the state.

Mr Emmanuel Yaji, thestate's Commissioner forTrade and Commerce,commended thegovernment’s gesture duringthe distribution of 22motorcycles and sprayers toextension workers andyouths in Lafia.

The largesse was infulfilment of an earlieragreement reached betweenthe state government and theFederal Ministry ofAgriculture.

Alhaji Danladi Madaki, theCommissioner forAgriculture and WaterResources, said theagreement was to ensure thetransformation of theagriculture sector and toenhance food security in thestate.

Madaki lauded thegovernment for fulfiling itsown part of the bargain,adding that the motorcycleswould enable the extensionworkers to effectively monitorthe activities of farmers in thestate.

(GES)’s Credit RiskGuarantee (CRG) in themonths of January toMarch, 2014.

The Central Bank inits DevelopmentFinance Department(DFD) report forJanuary- March 2014disclosed that the sumof N134.61million waspaid to 61 projectsunder the Nigeria

Incentive-Based RiskSharing System forAgricultural Lending(NIRSAL) in the firstquarter of this year.

The Nigeria Incentive-Based Risk SharingSystem for AgriculturalLending (NIRSAL) is amechanism designed toprovide farmers withaffordable financialproducts, reduce therisk of financialinstitutions that grantthem loans, build

capacities of banks to lend to agriculture, aswell as develop an incentive mechanism forNigerian banks based on their commitmentto agricultural financing.

The report showed that one Credit RiskGuarantee (CRG) valued N2 billion wasissued during the review period. That tookthe total value to N16.272 billion in respectof 45 CRG cover issued from inception todate.

On the other hand, seven InterestDrawback Programme (IDP) claims valuedat N57.250 million were processed and paidduring the review period under the NIRSAL.That made the total Interest DrawbackProgram (IDP) claims paid under NIRSALto N124.769 million in respect of 22 projects.

The apex bank’s Development FinanceDepartment report on the CommercialAgriculture Credit Scheme (CACS), revealedthat from inception in 2009 to March, 2014that the sum of N228.093 billion has so farbeen released to the economy under theCommercial Agriculture Credit Scheme inrespect of 299 projects.

The CACS was established to finance largeticket projects along the agriculture valuechain. The scheme is being administered ata single digit rate of nine per cent tobeneficiaries for a period of seven years.State governments, including the FCT canaccess a maximum of N1 billion each for onlending to farmers’ cooperatives or otherareas of agricultural intervention.

A breakdown of the amount showed that itcomprised N199.831 billion released from

Legend promo 3kicks off

The 2014 edition ofLegend Extra Stout’s

Real Deal NationalConsumer Promotion,officially kicked off thismonth. The promotionwhich will last for twomonths will end in June2014.

Launched in 2012, thefirst edition of the promosaw hundreds of luckyconsumers winning prizessuch as TV sets, generatorsand millions of free LegendExtra Stout drinks, amongother prizes.

Last year, Legend ExtraStout however stepped upthe ante in the annals ofconsumer promotions inNigeria by taking 25 luckyconsumers to Dubai in theUnited Arab Emirates on anall-expense paid trip. Whilein Dubai, they shopped forgift items worth one millionnaira in value. The luckyconsumers were also takenon a special tour wherethey visited fascinatingtourist sites during theirstay.


CMYK

Tax Matters

This article clarifies theFIRS’ position onwhat constitutes

‘trade’ or business for taxpurposes. In accordance withthe Companies Income TaxAct (CITA), and the PersonalIncome Tax Act (PITA), anytrade is subject to tax underCITA and PITA, even if thattrade is carried out by friendlysocieties, co-operativesocieties, charitable andecclesiastical organizations,or trade unions. .

CITA states that “any tradeor business for whateverperiod of time such trade orbusiness may have beencarried on” shall be subject toCompanies Income Tax (Sec9(1)(a)). The profits of certaininstitutions are exempt fromtax under CITA, but only inso far as such profits are notderived from ‘trade orbusiness’ (Sec. 19(1) (a, b, c,e)). This means that theprofits of any organizationthat are derived from ‘trade’shall be subject to CompaniesIncome Tax. This raises thequestion, what exactlyconstitutes ‘trade’?

A definition of the word‘trade’ cannot be found inNigerian tax legislationalthough an attempt wasmade in PITA. Theinterpretation Section of theFifth Schedule of PITAdefines “trade or business” tomean “trade or business orthat part of a trade or businessthe profits of which areassessable under this Act”.

However, the issue hasbeen addressed in severallegal cases, the rulings ofwhich provide some legalcertainty regarding how thecourts interpret the word (seeSection 2). In line with theserulings, ‘trade’ can beregarded as “the business ofbuying and selling orbartering goods or services”.Furthermore, the one-offnature of an activity in no wayinvalidates that activity asconstituting trade. Thisinterpretation matches theapproach in otherjurisdictions, namely the UKand USA (see Section 3).

Case Law in NigeriaAlthough no explicit

definition of ‘trade’ exists inthe law, the issue has beenaddressed in several legalcases, the rulings of whichprovide some legal certaintyregarding how the courtsinterpret the word. The mostimportant case is that ofArbico Ltd v. FBIR, {1996} 2All NLR 303. The plaintiff inthe dispute, Arbico, hadacquired a plot of land,erected a building, and soldthe property at a profit. Thecompany was subsequentlyassessed for tax on theproceeds of the sale ofproperty The Companyobjected to the assessment onthe basis that the transaction

,

,

What constitutes ‘Trade’ for Taxpurposes: Guidelines for the GeneralPublic

was a one-off and thereforedid not constitute ‘trade’. Thecase was ultimately settled inthe Supreme Court. In theruling the Court laid downtwo important axioms:

•Firstly, that the word‘trade’ should be interpretedin its widest sense, inaccordance with its commoneveryday meaning;

•Secondly, that an isolatedone-off transaction can stillconstitute a “trade”.

In line with the ruling of theSupreme Court, the followingdefinition seems to capturethe common meaning of theword ‘trade’. Trade is “thebusiness of buying andselling or barter in goods orservices”(taken from Black’sLaw Dictionary, Eighth Ed.

(2004)).Treatment in Other Tax

Jurisdictions

In considering whatconstitutes ‘trade’ for taxpurposes it is useful toconsider how the issue isaddressed in otherjurisdictions.

In the UK, as in Nigeria,there is no statutory definitionof the word ‘trade’. HerMajesty’s Revenue andCustoms (HMRC) relies oncase law to formulate aworking definition. HMRCstates that “Usually, tradinginvolves the provision ofgoods or services to customerson a commercial basis”. As inNigerian case law, “Simplybecause a venture is a one-offor occasional does not meanthat it will not be treated astrading for tax purposes”. It isinteresting to note thatalthough the HMRCdefinition employs the notionof ‘commercial basis’, HMRCexplicitly states that whetheror not the profits of an activityare ultimately used forcharitable purposes is notrelevant for the determinationof whether or not that activityconstitutes a trade.

In the USA, the InternalRevenue Service (IRS)employs a similar approach toHMRC. IRS regards ‘trade’ asincluding “any activity carriedon for the production ofincome from selling goods orperforming services”. It isinteresting to note how IRStreats the trading activities ofan organisation that alsocarries out tax exemptactivities. IRS states that “anactivity does not lose itsidentity as a trade or businessmerely because it is carried onwithin a larger group of similaractivities that may, or may not,be related to the exempt

purposes of theorganizations. In otherwords, a single organisationcan undertake both exemptactivities and tradingactivities. This implies that anorganisation cannot arguethat none of its activitiesconstitute ‘trade’ just becauseit undertakes some exemptactivities.

Badges of TradeIn 1955 in England, the

Royal Commission on theTaxation of Profits and Incomein reaction to whether astatutory definition of tradewas necessary, said that“each case must be decidedto its own circumstance (1955Cmnd.9474 para.116) andsuggested badges of trade”which they considered to bethe major relevantconsiderations that willfacilitate in determiningwhether any profit is a taxabletrading profit or not. Badgesof trade refer to certainindicators that may be usedin determining the factualquestion as whether anactivity is trade or not. Caselaw has expanded it to 9. Thebadges of trade are:

•Profit seeking motive. Anintention to make a profitsupports trading, but by itselfis not conclusive.

•The number of transaction.Systematic and repeatedtransactions will support‘trade’. An isolatedtransaction may alsoconstitute a trade.

•Existence of similartrading transactions orinterests. Transactions thatare similar to those of anexisting trade may themselvesbe trading.

•Changes to the asset. Wasthe asset repaired, modifiedor improved to make it moreeasily saleable or saleable ata greater profit?

•The way the sale wascarried out. Was the assetsold in a way that was typicalof trading organizations?Alternatively, did it have tobe sold to raise cash for anemergency?

•The source of finance. Wasmoney borrowed to buy theasset? Could the funds onlybe repaid by selling theasset?

•Interval of time betweenpurchase and sale. Assets thatare the subject of trade willnormally, but not always, besold quickly. Therefore, anintention to resell an assetshortly after purchase willsupport trading. However, anasset, which is to be heldindefinitely, is much lesslikely to be a subject of trade.

•Method of acquisition. Anasset that is acquired byinheritance, or as gift, is lesslikely to be the subject oftrade.

These ‘badges’ will not bepresent in every case and ofthose that are, some maypoint one way and some theother. The presence orabsence of a particular badgeis unlikely, by itself, toprovide a conclusive answerto the question of whether ornot there is a trade. Theweight to be attached to eachbadge will depend on theprecise circumstances.

FIRS PositionA definition of the word

‘trade’ cannot be found inNigerian tax law. However,the issue has been addressedin several legal cases, therulings of which providesome legal certaintyregarding how the courtsinterpret the word. In linewith these rulings, ‘trade’can be regarded as “thebusiness of buying andselling or bartering goods orservices”. Where one or moreof the criteria on the badgesof trade apply, FIRS will treatsuch transaction as trade.Furthermore, the one-offnature of an activity in noway invalidates that activityas constituting a trade. Thisinterpretation matches theapproach in otherjurisdictions, namely the UKand USA. The followingdecided cases are relevant inthis regard:

i In the case of Marlin VsLowry (1955)3 All ER 48; 11TC 297),

a person without previousknowledge of linen tradebought a surplus stock ofaeroplane linen fromgovernment which he sold tothe public in small lots. Heengaged employees for there-packaging and embarkedon sales” promotion throughextensive adverts andcampaigns. It was held thathe was trading.

i i In Murray Vs I .R.Comrs (1951, 32 TC 238),where a timber merchant whobought standing timbers intwo plantations and could notcut them due to labour cost,sold the rights to cut thetimbers to meet hisindebtedness. He wasassessed to tax on the profitfrom the transaction. Hecontended that the sale wasa capital transaction since itwas not in the normal courseof his business but it washeld that the transaction waspart of his normal trading asa timber merchant.

Kabir Mashi, FIRS Boss

A definition of theword ‘trade’ cannotbe found inNigerian taxlegislation althoughan attempt wasmade in PITA. TheinterpretationSection of the FifthSchedule of PITAdefines “trade orbusiness” to mean“trade or businessor that part of atrade or businessthe profits of whichare assessableunder this Act


CMYK

E- Commerce

Researchers have pushedout a fix for a security

flaw that affects as many astwo-thirds of all internetservers and could let hackersintercept encrypted trafficincluding e-mail messages,banking information,usernames and passwords.

The flaw and the fix, whichresearchers disclosed lastweek, involve a two-year-oldprogramming mistake inOpenSSL. OpenSSL is open-source software that is widelyused by internet companies tosecure traffic flowing betweenservers and users’ computers.SSL refers to an encryptionprotocol known as SecureSockets Layer and its use isindicated by a closed padlockappearing on browsers nextto a website’s address.

Samsung launches app that connectssmart phones, TV, tablets, othersSTARTING in South Ko

rea and the U.S. but soonrolling out globally, consum-ers will be able to connect andcontrol appliances, TVs,

VISIT: Mr. Hassan Bello, Executive Secretary, Nigerian Shippers’ Council, NSC (middle),flanked by Bamishebi Thompson, Authority Manager, Integrated Logistics Services, Intels (r)and Ishaku Shekarau, during Intels’ courtesy visit to NSC in Lagos.

Tobeit plans ‘Hackcess’ to combat ITsecurity threats

Tobeit Consulting, aninformation technology

firm said it plans to organizea technology conference andexhibition in Lagos that willfocus on combating IT securitychallenges in Nigeria.

The event, tagged ‘Hackcessfestival’ is aimed at bringingtogether ICT experts from theWest African region to comeand discuss issues andchallenges around IT security.

According to TobechiNdubuaku, Chief OperatingOfficer of Tobeit, “Hackcesswas born out of a desire tohelp educate corporateorganizations, both large and

medium scale companies andthe public on some of thoseburning technology areas thatare most times rarelydiscussed.”

He explained that, “TheHackcess festival will discussthe ‘Hacking idea’ in such away that has not beendiscussed in this part of theworld before. The conferencesat this festival will play hoststo some of the world’s mostreputable ICT companies whohave invested a lot in ITsecurity solutions and arespending a lot of resources onresearch and development tocurb most of the IT challenges

most organizations arecurrently undergoing.

The two day event willcreate a platform for ICTtechnocrats from the financialservices, oil & gas,telecommunications andSME sector to share theirexperiences and chart a betterpath of securing informationand the growing amount ofdata generated via moderntransactions. The challengesthat affect both public andprivate cloud have beenhighlighted as some of thekey issues to be discussed.

Microsoft,University ofNairobi releasesurvey on cloudcomputing

University of Nairobi,and Microsoft

technology, has released abaseline survey on cloudcomputing and its impact inKenya.The project was tomake stakeholders in Kenyaunderstand the status ofcloud computing and itssupporting technologies withthe intention of learning moreabout the future of thetechnology in Kenya.

According to the report,there is relatively lowawareness of cloudcomputing policy frameworkin Kenya by respondents andthat government would alsoneed to fast-track theenactment of key policiesaddressing cyber security,data protection and privacy inorder to increase confidencein the adoption of cloudservices in the country.

Kunle Awosika, Microsoft'sCountry Manager in Kenyanoted that an increasingnumber of companies andgovernment organizationsare turning to cloud servicesto increase the productivity oftheir workforce.

“We are seeing widespreadadoption of cloud-based emailservices and productivitytools like Office 365, whichenables “always-on” access toemails and files from virtuallyanywhere. Businesses arealso running CRM, HR,accounting and customenterprise applications in thecloud. Cloud computing canbenefit governments in threeareas: increasing nationalcompetitiveness, enhancingcitizen services and drivingdown costs,” he said.

Website securityflaw spurringcalls forpasswordchange

Rafael Afaedo wholeft Jumia.com,

Nigeria’s online retailer thathe co-founded recently haslaunched an online grocerystore, supermartng.com.

Supermart is a three houronline grocery deliveryservice that allows customersshop for groceries fromleading supermarkets inLagos.

Afaedor teamed up withGbolahan Fagbure, Jumia’sformer Chief OperatingOfficer to build the onlinegrocery store which willallow customers to buy itemsfrom various supermarketsall from the supermartwebsite, thereby saving themtime and money.

Raphael said he wasmotivated by, “knowing thatcustomers typically go tomultiple supermarkets tocomplete their groceryshopping.”

He said, “The Supermartallows customers easily additems from the multiple storesinto one basket and pay once.For the first time in Nigeria,customers will be able toselect when their order isdelivered to their homes or

Raphael Afaedor launches supermartng.comoffices, which can be in asearly as three hours.”

Supermart, he explained,aims to use customer serviceby using personal shoppers toindividually pick customerorders, select them carefullyand then have it delivered bythe firm’s delivery drivers.

“We have worked very hardto build a service we believe

will add a great deal ofconvenience to the lives ofpeople who prefer not tospend hours driving betweenvarious supermarkets,looking for parking spacs atbusy supermarkets andwaiting on queues to pay fortheir shopping,” co-founder,Gbolahan added.

smartphones, and tablets withlittle more than an app.

Samsung first demonstratedthe system and its possibilitiesat the Consumer Electronics

Show in January, and while ithas taken the company onlythree months to go from show-case to showroom, the futureof the connected home isn’there just yet.

Although downloading andsetting up the Android smart-phone app will give consum-ers control over a host of de-vices, said devices need to becompatible; the app won’t startmagically controlling the re-frigerator that’s been standingin the kitchen for the past fiveyears.

However, if you’re preparedto upgrade to the latest Sam-sung double-door smart fridge(the T9000), then you’ll be ableto operate it while at work, shutit down remotely while on hol-iday, and adjust its tempera-ture. Likewise, if your washingmachine is the latest Samsungmodel, then you’ll be able toprogramme wash and spin cy-cles to coincide with arrivinghome from the office.

Samsung says all of its 2014model smart TVs will also workwith the app and that beforethe end of the year, functional-ity will extend to cover its newrange of smart lightbulbs andits upcoming smart oven, too.

“We are excited that thelaunch of Samsung SmartHome makes the connectedhome a reality today and allowsour customers to live a smarterlife,” said Dr. Won-Pyo Hong,president and head of theMedia Solutions Center atSamsung Electronics. “Sam-sung Smart Home lets peoplelive better, worry less, and besmarter with their devices andappliances. We also havegrand plans to enhance moreand more parts of the homeexperience, especially with aview of expanding it to areaswith high-growth potentialsuch as home safety and ener-gy management.”

However, that’s for the future.The development of the con-nected home and its support-ing technologies is still at a veryearly stage, yet, consumersappear to be excited about theprospect of the Internet ofThings and about homes filledwith smarter appliances.


CMYK


International Business NewsMicro FinanceCommodity index

NASME faultsimportation of locallyavailable machinesStories byPROVIDENCEOBUH

The significance ofentrepreneurship

and enterprise creationin economic growth anddevelopment cannot beover emphasised, saidJanni Ibrahim,Chairman, LubconInternational.

He said that thedeveloped nations of theworld did not only applythe entrepreneurshiptheories but followedthem religiously toaccomplish the status ofdevelopment andindustrialization thathave made them theenvy of the world.

Ibrahim, who is alsothe President of theAlumni Association ofthe Nigerian Institutefor Policy and StrategicStudies (NIPSS), saidthese at the occasion of12th Conferment ofFellowship awardceremony of the Instituteof CharteredAccountants of NigeriaICAN. According to him,“The consciousintroduction ofe n t r e p r e n e u r s h i peducation into thecurriculum of our

The NigerianAssociation ofSmall and

Medium Enterprises,NASME, has called onits members not top a t r o n i s eimpor ted indus t r ia lmachines that are locallyavailable.

The association madethe call during anindustrial tour of FederalInstitute of IndustrialR e s e a r c hOshodi, FIIRO.

NASME Lagos StateChairman, Ladi Jemi-Alade, noted that SMEsare spending fortunesimporting machines thatare locally available inthe country. He stressedthat , “Economies growfaster with the use oflocally fabricatedindustrial machines.

“We are here to seemachines which insteadof buying from China,our members can buyfrom FIIRO. Most ofthe equipments imported

Lubcon chair hinges economicdevt on entrepreneurship

to Nigeria can befabricated locally.”

He noted that uses oflocally fabricatedmachines would reducethe rate ofunemployment in thecountry.

“If you buy equipmentfrom China, when theequipment has fault, yougo back to China tobring experts torepair it, thereforecreating jobs in China,but if you do it locallywhen it is bad you getsomeone from here to fix

it, you will engage ourunemployed youths andsave cost,” Alade added.

FIIRO DG, Dr. GloriaElemo in her responsesaid most of thetechnologies at theinstitute are targeted atthe SME sector of thecountry.

Represented by aDirector, Dr. PatrickIrabor, Elemoe x p r e s s e d t h eInstitute’s readiness topartner with SMEoperators to boost thenation’s growth.

facing serious slowgrowth, the emergenceof these newlyindustrialized nations isalso to the credit ofenterprise creation.

Meanwhile, ICANconferred fellowshipaward to about 491 of itmembers constituting 20percent or 7,489 of itsmembership strengthenof 38, 104, where itcalled for integrity andtransparency.

Mohammed explainedthat the promotionbecame necessary as aresult of the instituteeffort to meetglobalisation processestaking place in thebusiness environment.

He said, “The use of acommon accounting andfinancial reportinglanguage appliedconsistently willfacilitate investment andother economic activitiesacross borders at a timewhen globalisation ofbusinesses and financehas inevitably called fora common set of highquality globalaccounting standards.”

educational system, asmost of our childrenspend more time inschool, should be widelysupported.

All facets of our livesare touched bye n t r e p r e n e u r s h i pactivities, hence wecannot ignore thesignificance of this allimportant factor if wemust develop as anation. “In as much aswe all cannot beentrepreneurs in thetrue sense of it, we allcan however beenterprising andinnovative to affectpositively our variousjobs and services, be itpublic or private.

The wealth of theworld is gradually

drifting into the hands ofemerging countries,although the USA is stillthe largest in terms ofGDP, China and Indiaput together havecaught up with the USAwith their show ofconsistent growth overthe decade. While theUSA and the otherdeveloped nations are

L-R: Regional Sales Manager, Lagos, Mr. OlusegunAdekeye; Mr. Adeola Isaac, N500,000 winner inthe on-going Nutricima Mega Cash Promo andArea Sales Manager, Lagos North, Nutricima Ltd.Mr Ohu Abidoye during the second prizepresentation at Ikorodu

Advertising, Media& Marketing


Theatric performance thatdelivered Legend activation

STORIES BYPRINCEWILL EKWUJURU

It takes a plethora ofmarketing activities for abrand to get to the

market, some of theseactivities consumers are notprivy to. These actions areprivileged by few who witnessthe razzmatazz and glamourthat follow the arrival of a newor repackaged brand to themarket.

Despite this, consumers donot understand the word'Activation’, and what itstands for, yet, brands followthis route to the market.

The major reason for brandactivation according toexperts is to chart a newcourse for a brand in themarket. Through activationbrands extend their power ofcommunication, buildvisibility and memorability,also reinforce keyassociations. Other things, itdoes, is to unlock the latentpotential of sports andentertainment brand (s).

Like Paul Morel, PeterPreister and Andres Nystromput it, “brand a ctivationis not a theory, but a naturalstep in the evolution ofbrands.” A good example, isthe recent Activation’ ofLegend Stout from the stableof Nigerian Breweries Plc,and the NESCAFE FlightMug by Nestle Nigeria Plc,both of the creative ingenuityof Oracle Experience, an

Activation Agency, Led byFelix Eiremiokhae.

At the Legend Activation’night, beginning from thegate of the prestigious EkoAtlantic hall , which housedover 1,200 loyal consumers ofthe brand, the Activation’smirks of the trappings of aclass experience.

With the presence of thegorgeously dressed ushersthat welcomed guests with asmile, and the gentleapproach of the securitypersonnel stationed atstrategic positions at thecentre, gives a conclusion ofthe kind of Activation that theAgency has planned for theunveiling of the latest Goldneck Stout in the market. Thechronological display andflick by the dancers, the

historical perspective of theevolution of the Legend branddepicts the reason theActivation’ team threw in alltakings to see that the branddelivers on schedule.

The drama, ‘Bodi No befirewood’ depicts of a typicalexample of the brand’sstrength to conqueradversities in life and theconcomitant protection thatcan come from a reliable ally,the unity it brings whenfriends gather to celebrate anoccasion, the sound effect ofthe movie connects the brandto the consumer, all these putto gather is an attempt tocreate a route for the brand toexplore the market.

When Femi Kuti came onstage, he did not disappoint.He provided that legendarydisplay on stage dishing outhis popular tunes. He wasenergetic on stage, fullyusing the space as he sang.

Speaking on creating rightActivation’ to suit a particularevent, Henry Bamidele, CEOof Expression Impact said, “Iwitnessed the activationcreated by Oracle Experiencefor Nigerian Breweriesdistributors’ award.

Unilever’s Knorr fetescooksThe Knorr seasoning

brand from the stable ofUnilever Nigeria Plc hasstarted giving out cash andproduct rewards to viewers ofthe Knorr Taste Quest cookingcompetition.

The competition which isorganised to search forNigeria’s best in cooking alsodecided to reward viewerswho watch the show ontelevision with cash andprizes to the tune of N10,000.

To participate, at the end ofeach episode, viewers athome were to watch out forone simple question from theprevious episode, and sendthe correct answer to the shortcode given on the screen. Thefirst 20 correct answersbecome winners for that week.Hundreds of winners haveemerged nationwide, as theprogram is showing on majorstations across Nigeria

The Champion of thecompetition will win N2million cash prize, a Ford EcoSport SUV courtesy ofCoscharis Motors, andKenwood kitchen equipment.The second place winner will

get, N1 million cash prizeand Kenwood kitchenequipment and the third placewinner will get N500,000 cashprize and Kenwood kitchenequipment.

CAP names ‘TEAL’Duluxcolour for 2014

Chemical and AlliedProducts (CAP) Plc, a

subsidiary of UACN Plc andthe technological licensee ofAkzoNobel – manufacturersof Dulux brand of paint inNigeria has named ‘TEAL’2014 Dulux colour of theyear.

‘TEAL’ which is a deepblue-green colour; a darkcyan colour was unveiled asthe 2014 Dulux colour of theyear at an event witnessed bythe company ’s variousstakeholders groupsincluding top echelon of theUACN group, Trade Partners,customers and the Media.

CAP also used the occasionto introduce the newpackaging design (New

Livery) for Dulux premiumbrand of paint. The newattractive packaging design isavailable for the differentvariants of Dulux paint;Gloss, Weathershield andEmulsion.

Speaking at the event,Group Managing Director,UAC of Nigeria Plc, Mr. LarryEttah, disclosed that thetheme of the 2014 DuluxColour of the Year,‘Unlocking Potential’ is aninteresting one thatresonates with the times.

‘’We live in a time of greatchange. By taking a look atwhat we have, we can unlockthe potentials that surroundus and by so doing, ourdestinies,” he said.

Femi kuti and his band performing at the Legend RealvolutionActivation at Eko Atlantic Hall.

Customers as Captives (1)

R.T. Briscoe (Nigeria) Plc is one of Nigeria’sforemost distributors of Toyota cars, among other

things. It also offers after-sales support at its servicecentres strategically located in major cities. The companyhas been doing business in Nigeria for nearly 60 years.And it appears to have distinguished itself in the varioussectors of the economy it has ventured into.

So when the air-conditioning system of my Toyota carbegan to malfunction, it was a no-brainer for me to takethe car to R.T. Briscoe. Interestingly, the two customerservice representatives I met at the company asked meto deposit N15,000 before anybody could look at the car.I found that strange. I thought the company wassupposed to diagnose the problem with the car first, andgive me an estimate for the repairs for approval. At least,that was what I was used to, but I was a first-timer there.

I sought the rationale for the deposit and I was told itwas “management policy.” I sought to know what wouldhappen to my deposit if I decided not to fix the car. Iwas told the deposit was refundable. But I smelt a rat. Iknow how difficult it is to get a refund from a Nigeriancompany. Moreover, I didn’t see the sense in taking adeposit in the first place if it would

be refunded in full toa customer that decidesnot to go ahead with therepairs. While I wasstill trying to challengethat method of doingbusiness, a customerservice rep pointed outthat technicians werepaid on hourly basis.That “Freudian slip”settled the matter forme. Was it possible thatpart of the depositwould be converted toa “diagnosis fee” (forthe technician’s wages)if I decided not to fixthe car?

I didn’t wait to findout. I left in a huff andR.T. Briscoe lost mebefore I could becomea customer! I drove toMetropolitan Motors inIkeja. Thankfully, theapproach wasrefreshingly different.There was no talk ofdeposit. Instead, the

company quickly diagnosed the fault with my car andgave me an official estimate of almost N26,000 forapproval. I approved willingly. At least, I knewbeforehand what I was letting myself into. Workcommenced immediately, still with no talk of deposit. Infact, while the repairs were on, I dashed to a nearbyATM to get cash for the bill. After the car was fixed, thefinal bill was N1,000 less than the estimate. Again, Iwas happy with the approach at Metropolitan. But thatwas not all. One week later, someone phoned from thecompany to find out how the car was doing and whetherI was satisfied with the work done. You can guess myresponse. If you were in my shoes, which of the twocompanies I encountered would you rather do businesswith?

Let’s get to the point of this story. Why do somecompanies make customers part with money even beforethey know exactly what they are paying for? Is it thatsuch companies are afraid of losing out completely ifcustomers change their mind? Or do they believe thatthe best way to do business is to treat customers likecaptives? If that is so, then such companies have veryweak value propositions indeed. Those organisationsthat try to hold customers captive lose in the long run.

TO BE CONTINUED

I sought therationale for thedeposit and Iwas told it was“managementpolicy.” Isought to knowwhat wouldhappen to mydeposit if Idecided not tofix the car. Iwas told thedeposit wasrefundable. ButI smelt a rat

,

,


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

Business & Economy

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

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

In the aftermath of theannouncement that

Nigeria’s current GrossDomestic Product (GDP) hadrisen to $510bn, the question onthe street was simply, that of,whether or not food will becomereadily available on the table forthe common man, and whetheror not the teeming millions ofNigerian youths who arecurrently unemployed willquickly be provided with jobs.

In the short term, the higherrevalued gross estimate of alllocally produced goods andservices will remainmeaningless to the micro-economy, as the higherrevaluation from a modestvalue of about $264bn wouldliterally not change anything. The wages of the man on thestreet will not also increase,neither will the purchasingvalue of his paltry minimumwage of N18,000/month;furthermore, quality educationand healthcare facilities willremain inaccessible to themasses, in spite of a muchhigher GDP.

On the long run, however, if the right enabling politicaland economic environment alsoexist, foreign direct investmentswill flow into the real sector,and this would ultimatelyinduce a positive trickle downimpact on micro enterprises aswell as the man on the street,and more jobs will be created,with the collateral of increasingconsumer demand, which willin turn, propel additionaleconomic growth.

In the rest of this article, wewill assess some of the othersalient questions that have been

The hype of GDP revaluation and matters arisingasked by concerned Nigerianson our newly acquired status asthe 28th-largest economy in theworld, with output that is, way-ahead of economies such asDenmark, Austria andSingapore, which arenotwithstanding, currentlypreferred destinations thanhome, for our frustrated andeconomically disenfranchisedcountrymen.

Let us first respond to thequestion of what rebasingactually means. The wordrebasing conveys a similarmeaning to the simple accountingprocess of revaluation. Thefigure of $264bn was theestimated value of all goods andservices produced within theterritory called Nigeria by 1994. However, 24 years thereafter, anew estimate of total currentoutput of goods and services hasnow been found to be above$500bn. The rise in total outputof goods and services isapparently attributable to theidentification of significantgrowth in sectors such as telecom,aviation, entertainment(particularly Nollywood), whichhitherto accounted for modest ornil values in 1994.

In addition to defining thestructure and the sectoralpotentials in each economy for thepurpose of properly guidingdevelopment, the size of acountry’s annual GDP also servesas a measure of comparison withthe relative size of the gross outputof other nations.

In the new GDP estimate,commercial services subsectornow contributes over 50% of totaloutput, while industrial andagricultural outputs have

similarly increased. Consequently, in view of thesignificant relative growth inthese sectors, it would bemisleading to continue to see thesize of Nigeria’s economy fromthe prism of the much lowerestimates of 24 years ago.

Indeed, in practice, GDPestimates are generallyreviewed around every five years,so that government plans will bepredicated on more current andaccurate estimates of theperformance of each economicsector. Some analysts mayhowever, observe that in theevent that average annualgrowth rates of 5% wereofficially reported between 1994and 2014, the rebased GDPfigure should be in excess of120% of the 1994 figure of$264bn!

Another frequently askedquestion is whether or not thehigher GDP will attract moreforeign direct investment toNigeria. Indeed, increasingforeign direct investment inthe real sector will certainlycontribute to expanding the GDPof the host country. This iswithout prejudice, of course, tothe fact that domestic investorscould similarly grow output ifthey had access to cheaper fundsand appropriate governmentsupport as their foreigncounterparts.

So, in reality, buoyant outputfigures may actually attractforeign investors, nonetheless,such investments may notnecessarily go into the realsector, if the economy is alsobedeviled by challenges such asa tortuous process of land

acquisition, extended process ofcompany registration, grant ofexpatriate quotas and multipletaxes, as well as the additionalchallenge of insecurity, wherethreats of kidnapping ofexpatriate staff also exist.

Furthermore, in spite of abuoyant GDP, popularperception of a corrupt publicservice would also create majorobstacles to the attraction offoreign direct investment intoour country.

In such event, despite theincreased GDP, foreign investorsmay decide to simply stay awayor at best decide on the less riskyinvestment of lending money toNigeria’s government at interestrates which will be considered tobe highly excessive andoppressive, for what is actuallya risk-free sovereign debt, whichshould normally attract lessthan 2% interest in successfuleconomies elsewhere. Thus, itmay be possible for a foreigninvestor to borrow from thoseinternational banks, which holdNigeria’s foreign reserves withlittle or no yield and for thissame investor to, thereafter,simply turn around to lend thesame funds to the Nigeriagovernment at over 12% interest!

Another question that has alsobeen asked, is whether or not theaverage Nigerian is now betteroff than his South Africancounterpart, and if investors willnow find Nigeria as a betterinvestment destination thanSouth Africa.

Nigeria’s reviewed GDP at$510bn is literally larger thanSouth Africa’s current GDP of$370.3bn, and this may give

those Nigerians, who have thenotion of competition betweenSouth Africa and Nigeriabragging rights, which mayinduce a psychological ‘feel-good’ sensation. Nevertheless,such ephemeral rights do notmake the average Nigerian to bebetter off than his South Africancounterpart, as the revaluedaverage annual personal incomeof the Nigerian worker is nowabout $2,700, compared toSouth Africa’s average personalincome of almost $7,000. Besides, the quality of education,as well as the facilities for healthand availability of other socialwelfare infrastructure, includingpower, remain much morereadily available in South Africathan in Nigeria.

Furthermore, foreigninvestors have previouslyperceived South Africa’seconomy as the largest in Africa;this perception as well as thepresence of other factors such assecurity and advancedinfrastructure, may still makeSouth Africa the first port of callfor foreign investors. Nonetheless, this preferencewould radically change infavour of Nigeria, if we are ableto put in place, politicalstructures that would engenderpeace and harmony, with atransparent and accountablepublic service that is committedto growing our economy, withmonetary and fiscal strategiesthat do not widen class inequityand further deepen poverty.

SAVE THE NAIRA, SAVE

NIGERIANS!!

The seasoning marketprofile penultimate

week grew with NestleNigeria Plc formallyintroducing the Chickenvariant of its Maggi range.

The Maggi Chicken brandis an extension of theMaggi family whichaccording to the company

Nestle grows seasoning market profilewas reformulated to meet thedemand of its consumers. TheChicken brand which formallyhit the market was witnessedby a cross section ofconsumers, distributors andprospective, who scrambled forthe distributorship of the brandat the unveiling ceremony inLagos.

Speaking, Guy Kellaway,Category Business Manager-culinary, said the brandcontinuously and consciouslyaims to bringing the bestproducts for consumers.

His words, “with the newmagi chicken cube added toour seasoning range, we aimto deliver the best chicken

seasoning in the market,delighting our consumers,rewarding our retail partners,whilst maintaining thehighest levels of quality thatMaggi is known for.”

Earlier, the Managing

Director of the company , Mr.Dharnesh Gordhon, had saidthat the launch of the newMaggi chicken cube will bringa renewed excitement to thecategory, to our retailers andfor all consumers.

In line with its tradition of putting smiles andhappiness on the faces of Nigerians, Maltina

- the premium non-alcoholic malt brand from thestable of Nigerian Breweries Plc - has rolled outstrategic plans to reward consumers andNigerians with freebies during the Lagos Carnivaland Black Heritage week.

Senior Brand Manager Maltina, AdewoleAdedeji, who revealed this, said most Nigeriansare aware of the fact that the brand is all aboutsharing happiness.”The Maltina story has alwaysbeen the story of sharing, friendship, togethernessand a good time with loved ones. We alwaysexplore avenues that bring people together in

Maltina Shares Happiness in Lagosan atmosphere of friendship. And whatbetter way to bring people together than byproviding them with what makes lifeenjoyable. That is the brand promise westand upon, that is why we want to makethis Easter celebration memorable for ourconsumers and Nigerians generally.”

The carnival themed ‘Lasgidi’ comes upon Monday April 21st, while the heritageweek is a weeklong event scheduled to holdfrom the 14th of April to the 21st with variousactivities designed to promote the culturaland unique heritage of Lagos State.