FG Goes Tough on Poor Telco Services

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Read Time:3 Minute, 15 Second
From January 1, 2014, service providers in the telecommunications sector that do not meet previously agreed targets on Quality of Services indicators will be prevented from further expansion of their subscribers’ base.
 
The Minister of Communications Technology, Mrs. Omobola Johnson, gave the warning at a joint press conference addressed in Lagos by the ministry, the Consumer Protection Council (CPC) and the Nigeria Communications Commission (NCC), on the quality of service of network operators.
 
She also said the ministry, in conjunction with the CPC and other relevant agencies of government, has commenced a working relationship that would make it possible for government to prevent incessant abuse of consumer rights by the industry operators.
 
Johnson admitted that the issue of poor service has been a persistent one over a number of years and that it appeared to have worsened in the last twelve months, despite the fact that the ministry has been working hard to provide an enabling environment for the deployment of ICT infrastructure, especially in the area of base stations and fibre optic cable.
 
She pointed out that the collaboration with CPC and NCC to protect subscribers, who daily bear the brunt of QoS, will deliver appropriate customer redress by telecoms subscribers in the area of rebate on airtime, usage irregularities, inaccurate billing and opportunities to opt out of unsolicited SMS messages.
 
Other areas she mentioned are: poor network service delivery that makes it impossible for consumers to receive calls, lack of sustainability of calls, deceptive broadband speed adverts by some service providers and failure of service delivery without compensation to consumers.
The minister also identified some challenges being put forward by the service providers and reeled out various attempts that have since been made to address the problems.
 
Among other things, she pointed out that the right of way on federal highways has been reduced by 90 per cent and that the ministry has negotiated an agreement with all state governments to reduce right of way on state highways and also reduce charges on infrastructure.
 
She said: “In Lagos State, we reached a landmark agreement that has reduced right of way by 85 per cent and charges on infrastructure by 45 per cent. In Ekiti, Cross Rivers and Lagos, state governments are partnering telecommunications companies to build metro fibre by giving outright waivers on right of way cost in exchange for a share of revenue as the infrastructure is put into use.”
 
On vandalisation of infrastructure, the minister made reference to the Federal Executive Council’s approval of the new bill on cyber crime, which she said, will have severe penalties for the wanton destruction of ICT infrastructure.
 
In her contribution at the conference, the DG of the CPC, Mrs. Dupe Atoki, stated that the challenge of doing business in Nigeria is the usual justification for these violations by service providers. She however pointed out that as long as her council is concerned and as long as a business is in operation, and consumers pay for the service, she would ensure that consumers get value for their money.
 
The DG added that under the act that established the council, CPC has the power to sanction, prosecute and compel any product or service provider, to answer a lawful inquiry, disobedience of which, she said, are all criminalised. 
 
Speaking further on the legal implication of abusing consumers, Atoki said operators risk prosecution and jail terms of up to five years if investigations currently ongoing reveal they have deliberately short-changed Nigerians in poor service delivery.
 
“CPC can make orders in the interest and protection of consumers and disobedience is also criminalised by law. While NCC can impose fines on an offending operator, CPC can in addition commit such recalcitrant offenders to jail terms for contravening any consumer protection enactment,” she said.
 

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Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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NAICOM to Blacklist Auditors who Endorse Fraudulent Reports

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Read Time:3 Minute, 26 Second
As a follow up to the implementation of the International Financial Reporting Standards (IFRS), the insurance regulator, National Insurance Commission (NAICOM), has threatened to blacklist any audit firm that endorses fraudulent reports for insurance companies.
It said blacklisted firms would not be allowed to work for any other insurance company in the country and would also be formally reported to their umbrella body, the Institute of Chartered Accountants of Nigeria (ICAN) and the Financial Reporting Council (FRC).
 
The Director in charge of Supervision at the commission, Mr. Nicholas Opara, made the position of the commission known during the seminar for Journalists on Ilorin, Kwara State recently.
He said NAICOM feels auditors should not stamp their seal on an account that the figures are questionable, adding that the commission has since reported some of such auditors to their ICAN and the FRC.
 
“In other jurisdictions, once an Auditor puts its stamp on an account, that account is accepted as credible. We shall begin to ask auditors questions on why the accounts submitted to NAICOM were not correct.
 
“We have reported some of the auditors to ICAN and Financial Reporting Council (FRC) that they are not helping us. If the Chief Financial Officer of a company is not doing a job well, why should the auditor not correct that? We are beginning to report those auditors who have failed to live up to expectations” he said.
 
Opara complained that a sizeable number of insurance companies had issues trying to get approval for their 2012 financial reports as a result of the conversion to IFRS from the Nigerian Generally Accepted Accounting Principles (NGAAP).
 
According to him, NAICOM issued guidelines and circulars on IFRS conversion and trained relevant Finance Officers of insurance companies and their consultants on the new reporting format. It was unfortunate that many companies were still confused without knowing how to go about the conversion, he added.
 
Meanwhile, the commission has reacted to the complaints by some quoted companies that it was making them pay fines unnecessarily to the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) for the delay in submitting their 2012 financial reports.
 
The Commissioner for Insurance, Mr. Fola Daniel, said such companies had up till November, 2013 not done the right things and were yet to get approval for their 2012 financials, which they were expected to prepare in compliance with the IFRS.
 
He said the commission did not owe anybody any explanations for the delay, saying until these companies do the right things, NSE and SEC had to wait and apply necessary sanctions for failure.
 
“We are not making excuses neither are we apologising to those companies whose accounts are still pending. They refused to do the right thing. The NSE and SEC are aware of what we are doing and they are supporting us” he said.
 
Daniel observed that some companies deliberately refused to submit their accounts as at when due because they can afford to pay the N5,000 daily fine for late submission, saying that companies who do that were indirectly telling their shareholders and customers that they are not doing well.
 
IFRS are principles-based standards, interpretations and framework adopted by the International Accounting Standards Board (IASB). Its overall objective is to create a sound foundation for future accounting standards that are principles-based, internally consistent and internationally converged.
 
NAICOM in 2011 directed insurance and reinsurance companies under its supervision to convert to IFRS in by the end of the first quarter of the last year.
 
“Insurance and reinsurance companies being public interest entities are expected to start their transition from January 2, 2011 while insurance brokers being other public interest entities will take their turn in 2012.
 
“The commission is committed to the adoption of IFRS not only because it is one of the initiatives of the insurance industry under FSS 2020 programme, but also because it is an imperative for the recognition of our insurers and reinsurers,” the commission explained.

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Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Sanusi: Speculation about My Successor Can Affect Price Stability

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Read Time:8 Minute, 4 Second
Central Bank of Nigeria, Governor, Mallam Sanusi Lamido Sanusi, who spoke with journalists at the end of the 5th annual retreat of the Bankers’ Committee in Calabar recently, appealed for moderation on speculation around his likely successor. Obinna  Chima presents the excerpts
 
What level of progress has been achieved on the cashless policy?
The whole cashless programme was rolled out with a number of things. First of all, these are products that were designed for customers and to make things easy for them and easy for the banks. So it is about financial literacy and financial education. What we have found in places like Lagos is that people have bought into it. Everybody understands it is now easier to receive payment on a card than to have a pile of cash in your shop or move cash around in the market.
 
The risks are too high. It is easier for the banks and reduces the cost of handling cash. We  have multiplied in million times, the volume and value of transactions that are done on point of sale (PoS) terminals since we started cashless Lagos and we don’t think that, that will be a problem in Nigeria. We have PoS that are biometric-compliant and don’t need to have someone with a strong level of education. We also have mobile payment. So, there are alternatives that are designed to include those that we want to get into these channels.
 
 
Recently, we discovered that there are so many mutilated naira notes in circulation and it looks like the central bank has stopped the production of mint?
You know there was a process that had commenced when we had redesigned notes that were going to be printed and as a result of the approval we received, we had actually stopped the production of the notes and gotten our printers to prepare to print the new notes. As a result of all the noise around the N5, 000 and coins, that process was stopped. We did not print the new notes. I know some people think we have already printed, but we did not print the new notes and we did not award the contracts for the new notes. But then, our printers now have to go back to the production of old notes. I think that would soon be a matter of the past. We have re-ordered for banknotes and I think they have started arriving and probably you would have seen some improvements on that by now.
 
 
You said the bankers' committee will sustain the real sector growth. What strategies have been designed to support the real sector?
Well, if you take agriculture for instance, we started in 2009 with lending at less than one per cent and now it is about 3.6 per cent. We did have a target of getting to five per cent of banks’ loan books by 2015 and seven per cent by 2017. So there are clear targets and we are moving towards those targets. As for small and medium scale enterprises (SMEs), the amount lent to SMEs, when you discount the loans provided through the central bank and Development Finance Institutions (DFI) is negligible. So frankly, any progress in that area is welcome. There are some banks that have established a strong capacity to lend, many have not. We recognise that for SMEs, just like agriculture, the issues go beyond providing finance.
 
You have to deal with things like electricity, infrastructure, the tariff regime, security, fiscal incentives and one of the ways we would like to do this is to engage with the Ministry of Industry, Trade and Investment and the Ministry of Finance, to see how we can move together in developing SMEs. So, if you have an industrial cluster with 1,000, 2,000 or 3,000 factories, which has electricity, infrastructure and incentives, it is easier for the banks to go and lend in a safe manner.
What is the level of compliance by banks on the sustainable banking principle and are there sanctions for banks that fail to implement this initiative?
 
 
Sustainable banking is a journey and not a destination. Every single day, you are improving. If you look at our nine principles, we have environmental principles, social principles and governance. So you have principles for example around risk management and disclosure and accounting practices; around women and gender issue; around environmental footprints; around taking environment into consideration in banks’ lending; around stakeholders’ engagement. So, it is an ongoing process. At the moment, what I can say is that the Nigerian banking industry is actually used as role model and benchmark for sustainability.
 
Now, does this mean that we are where we want to be? No, we still have a long way to go. It just means that other regulators have not taking this with the same urgency that we have taken it. We have rolled out guidelines for example on lending to power, lending to agriculture and lending to oil and gas. Banks will not lend to you if, for example, your business involves bush burning because it destroys the environment, or anything that will lead to environment degradation. So, we have made a lot of progress, but we still have a long way to go.
 
 
But despite your efforts in the agric sector, there are still complaints by farmers that they are not getting enough loans to support their business. What is the central bank doing in that area?
 
 
Well, I am happy we are in Calabar. I will request if you can, that before you leave Calabar, you interview the Commissioner for Agriculture of Cross River State. There is a 5,000 hectare plantation being developed by a Nigerian businessman in Calabar that is financed by Nigerian banks. It is an integrated farm that would produce pineapple. Now, the reality is that we are moving from a situation where there was actually no lending to one in which we have gotten to 3.6 per cent of a hugely increased portfolio. On Commercial Agricultural Credit Scheme (CACS) alone, banks have given out, using the central bank money, N200 billion. You’ve got NIRSAL and the number of companies that have benefitted from the guarantee that have been issued by NIRSAL.
 
The entire growth enhancement support that financed the fertilisers for the farmers, based on the subsidies of the government, all the agro-dealers got their loans from banks and I think the banking industry this year gave about N6 billion to N7 billion, just for the agro-dealers to promote fertilisers. I know the banking industry is financing the tomato paste and tomato manufacturing factory that Dangote is putting up near Kano. So, there are so many things that are happening. I do know that it looks like it is not enough because agriculture is 42 per cent of GDP and four per cent lending is frankly still a long way to go. We need to increase it. But when you look at where we are coming from, you have to accept that there has been a lot of progress.
 
 
Your tenure will soon come to an end, and also that of one of the deputy governors and some bank chief executive officers. What has the Bankers’ Committee put in place to sustain some of the progress made since the inception of this retreat?
I think one of the greatest tests of leadership is to always plan institutionalisation and while the individual remains important for having a vision, for defining a strategy, for driving everyone and bringing everybody together for implementation. I think a very important aspect of leadership is to make sure that those that are part of this process buy into the process and believe in it and are convinced that, that is the way to go. Both at the level of the central bank and the bankers’ committee, everything we have been doing have been a result of a process of debate and understanding of what is in the best interest of the Nigerian economy. It is not the view of one man or the idea of one man.
 
The deputy governors that you see and the chief executive officers of banks have been part of everything we have done in the last five years. The departure of Aigboje Aig-Imoukhuede from Access Bank has been planned with the transition to a successor and his departure from the committee has also been planned. There will be a new chairman of this committee and the committee will continue and next year the strategy is defined and what we are going to do is clearly articulated.  We do think that the transition at the central bank, the banks and bankers’ committee would not be destructive.
 
  However, I would like to urge the press to be a bit moderate in some of the speculations and write-ups. I know sensational news sell newspapers, but you must remember that where the central bank is concerned, too much sensation around these things can have an impact on the economy and stability far beyond what you intended. For example, unnecessary speculation or rumour can affect the exchange rate, it can affect the flow of capital and whoever the next governor is, you would have placed him in a difficult situation ab initio by creating instability. So my advice is to moderate some of sensation around that and I am sure we will have a smooth transition.

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Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Zenith Bank Reaps the Fruits of Hard work

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Read Time:7 Minute, 46 Second
Zenith Bank Plc is the number five stock on the Nigerian Stock Exchange (NSE), in terms market capitalisation. As at last Monday, the market capitalisation of Zenith Bank stood at N686 billion. The other stocks that are ahead of Zenith Bank are: Dangote Cement Plc, which occupied number one with N3.408 trillion. Nigerian Breweries Plc closed second with N1.218 trillion, while Nestle Nigeria Plc and Guaranty Trust Bank (GTBank) Plc  have N888 billion and N786 billion to occupy the third and fourth position respectively.
 
 
Also, among the banking stocks, Zenith is the second highest priced closing at N21.85 per share behind GTBank, which stood at N26.70 per share. However, the corporate profile of Zenith Bank witnessed a major boost recently as The Banker magazine, a publication of the Financial Times of London, named the bank as the “Bank of the Year Nigeria 2013.”
 
 
This award, according to capital market operators and financial analysts, reflects the bank’s  impressive financial performance over the years.  Market analysts explained that the hard work that the board, management and entire staff members of the Zenith Bank have put in place have started to yield fruits.
 
 
Corporate Profile
Zenith Bank Plc is one of the leading financial services institution with headquarters in Nigeria and subsidiaries in the United Kingdom, Ghana, Sierra Leone, Gambia, and South Africa (Representative Office).The bank was incorporated as Zenith International Bank Limited on May 30, 1990, as a private limited liability company and was licensed to carry on the business of banking in June 1990. The name of the bank was changed to Zenith Bank Plc on May  20, 2004, to reflect its status as a public limited liability company. The bank's shares were listed on the NSE October 20, 2004, following a highly successful Initial Public Offering (IPO).The bank is currently owned by Nigerian individuals and institutions numbering over 1,000,000 shareholders.
 
 
The bank has been growing its customers' businesses and wealth in the last 20 years and this has positioned Zenith Bank as the financial institution of choice. The bank’s business is built on its core principle of working in its customers' best interest.
 
 
Vision/Strategic Objectives
The overall vision of the bank has been "to build the Zenith brand into a reputable international financial institution recognised for innovation, superior performance while creating premium value for all stakeholders."
 
 
The strategic objective of Zenith Bank includes the continuous improvement of its capacity to meet the customer's increasing and dynamic banking needs as well as sustain high quality growth in a volatile business environment through: continuous investment in branch network expansion and thus bringing quality banking services closer to our teeming existing and potential customers; continuous investment and deployment of up to date and state-of-the-art technology; continuous employment of the best people available and motivating them; continuous investment in training and re-training of our personnel; maintaining and reinforcing our core customer service delivery charter.
 
 
Financial Performance
The bank has been posting impressive financial results over the years, rewarding shareholders with equally impressive dividends.  For instance, the bank paid a dividend of N1.60 per share for the 2012 financial year. And given the results for the third quarter ended September 2013, shareholders should expect a higher dividend at the end of this year.
 
 
Gross earnings rose from N229.161 billion to N255.299 billion. A breakdown of the gross earnings showed that corporate and commercial business fetched the bank the highest percentage of 42.2 per cent. Retail banking followed, accounting for 25.28 per cent, while institutional and public sector accounted for 15.8 per cent and 12.05 per cent in that order.
 
 
Net interest income rose by 16 per cent from N119.7 billion in 2012 to N138.979 billion.  Profit before tax stood at N83.037 billion, up from N75.22 billion in the corresponding period of 2012. Profit after tax grew from N64.1 billion to N69.7 billion, while earnings per share rose to 220 kobo, compared with 202 kobo in 2012.
 
 
Customers’ deposits, which indicate the level of patronage enjoyed by the bank, stood at N2.852 trillion, up from N1.929 trillion. Corporate and commercial customers deposited accounted for 42.65 per cent of the deposits, followed by retail customers with 30.7 per cent. Public accounted for 17.3 per cent.
 
 
A further analysis of the results showed shareholders’ funds of N482.5 billion compared with N462.9 billion in 2012. In terms of some key ratios, net interest margin improved from 8.9 per cent to 9.5 per cent. Cost of funds stood at 3.36 per cent in 2013, as against 3.83 per cent in 2012. Return on average assets reduced to 3.4 per cent, compared with 3.5 per the in 2012 while return on average equity decreased from 20.9 per cent to 19.67 per cent. Liquidity ratio improved from 60.4 per cent to 63.1 per cent. Non-performing loans ratio fell from 3.2 per cent to 3.1 per cent.
 
 
Commenting on the results, Managing Director/Chief Executive Officer of Zenith Bank, Mr. Godwin Emefiele, said: “Our results for nine months ended September 30, 2013 remained strong as we sustained our drive for another impressive performance this year. Driven essentially by of our people, technology and excellent customer services the group recorded an 11.41 per cent and 10.39 per cent  improvements in gross earnings and PBT to N255 billion and N83 billion respectively.
 
 
“We sustained improvements in our net interest margin (NIM) year-on-year as well as quarter-on-quarter as we responded effectively through reallocation of resources and optimal pricing of assets and liabilities to counter the effects of the new CRR regime and increased savings deposit cost on our operations. The cost of funding our operations improved both year-on-year as well as quarter-on-quarter. Our cost-to income ratio remained stable despite increased AMCON charge and new COT tariff as we continue to push for other non-interest income through deployment of e-banking products and services.”
According to him, the bank’s balance sheet remains strong with total assets growing and in excess of N2.85 trillion as at September 30, 2013.
 
 
“Liquidity and capital adequacy remained at very comfortable levels of 63 per cent and 28 per cent respectively giving us enough latitude to explore new business horizons while being able to withstand any systemic shocks. Our loan books continued to grow as we take advantage of emerging business opportunities, whilst ensuring that our cost of risk and NPL remained below industry averages. Given the current macro-economic indices, we are very confident that we would sustain this strong performance and growth trend into the fourth quarter of the year,” Emefiele added.
 
 
Bank of the Year Award
Apparently impressed with the performance of the bank in all ramifications, The Banker magazine gave an award of Bank of the Year to Zenith Bank.
 
 
Nominees for the award were judged by their ability to deliver shareholder returns and gain strategic advantage in terms of market visibility and positioning. The award also indicates the level of trust and confidence on the brand and is a testament to the strong management, sound business model and prudent risk approach of Zenith Bank Plc.
 
 
The Banker said Zenith Bank was selected based on the overall performance of the institution and the opinion of leading financial analysts from the world’s financial markets.
Receiving the award, Emefiele dedicated it to his bank’s customers while commending management and staff members for working excellently to build Zenith into a respectable global brand.
 
 
“The bank’s competitive advantage as a financial powerhouse for value creation in Nigeria and the several achievements and successes of the brand are a result of a strategic combination of people talent, proprietary knowledge, strong brand equity, leadership, integrity, and relationship management,” he said.
Before the new award, Zenith Bank was again named Nigeria’s largest financial institution by The Banker. In its 2013 rating of the world’s Top 1000 banks, the magazine listed the bank as Africa’s sixth largest by Tier 1 capital, having grown its Tier I capital to $2.969 billion within 12 months.
 
 
The bank also ranked the best customer-focused in both the retail and corporate banking categories by KPMG in its 2013 Banking Industry Customer Satisfaction Survey (BICSS).
The award, according to analysts, is an eloquent attestation of Zenith Bank’s best-in-class customer-centric service delivery.
Zenith Bank Nigeria was ranked the best Customer-focused bank in both the retail and corporate banking categories on the basis of a Customer Satisfaction Index (CSI), which took into account key factors like convenience, product/service offering, transaction methods and systems, pricing and customer care.

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Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Continental-Re’s Q3 Premium Income Rises by 15%

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Read Time:3 Minute, 30 Second
Continental Reinsurance Plc (Continental-Re), one of the two licensed reinsurance companies in the country, said it has recorded a 15 per cent improvement on its gross premium income for the third quarter of this year.
 
According to the company, its premium income rose from N9.9 billion in the third quarter of 2012 to N11.30 billion as at September 30, 2013.
 
The Managing Director of the company, Dr. Femi Oyetunji, disclosed this in a statement in Lagos recently, attributing the improvement to the sustenance and development of underwriting relationships with existing and new clients and strict adherence to underwriting prudence.
 
“In the third quarter of 2013, we continued to see favourable trends across our key core business indices. We sustained the momentum achieved during the first half of the year with gross written premium growing by 15 per cent. Overall, we are progressing towards achieving our 2013 performance objectives,” he said.
 
According to Oyetunji, the report for the third quarter shows that Continental-Re raked in retrocession premium worth N 1.40 billion reflecting a retrocession ratio of 12.40 per cent, which is slightly higher than the previous period of 11.40 per cent.
 
Its loss ratio was 47.90 per cent (2012: 47.40 per cent), mainly because there were no major catastrophic events during the year under considering even the company was expecting to achieve a strong combined ratio by the end of the year.
 
“The firm’s net acquisition expenses ratio stood at 31 per cent and was higher than last year’s ratio of 27.6 per cent,” he said.
 
Oyetunji also disclosed that the firm’s management expenses for the period under review hovered around N1 billion; a 22 per cent increase over the N830.20 million recorded in the corresponding period of last year.
 
He noted that the ratio of management expenses to net premium income was 10.20 per cent and slightly higher than the 9.50 per cent recorded in 2012.
 
Continental-Re’s underwriting profit rose by 20.30 per cent from N1.10 billion in 2012 to N1.33 billion in 2013 mainly due to a higher growth in premium than the increase in combined costs, while its underwriting profit ratio as a percentage of gross premium income 12 per cent as against the 15.4 per cent recorded in 2012, he stated.
 
The firm boss also noted that investment and other income raked in by the firm at the third quarter of 2013 peaked at N 879.30 million; a 9 per cent shortfall from the N 970.90 million it recorded last year.
 
Out of this, the firm made provisions for bad debts to the tune of N3.10 billion as against the N2.82 billion it provided for in the corresponding period of last year.
The firm’s profit before tax for the period was N1.70 billion, which translates to an 8.90 per cent improvement on the N 1.60 billion it made in the corresponding period of last year.
 
 
Its profit after tax for the third quarter of this year was N1.4 billion as against the N 1.20 billion recorded in the corresponding period of last year and a 7.90 per cent improvement in performance, Oyetunji said.
 
According to him, total asset being managed by the firm was grown by eight per cent to N25.90 billion from N24.10 billion as at December 2012, adding that the appreciation was mainly due to an increase in investment and fixed asset.
 
He also noted that shareholders’ funds in the firm rose to N13.50 billion as at the end of the third quarter of this year. The figure, as at December 31, 2012, was N13.23 billion; a 3 per cent improvement in nine months.
 
The firm’s boss also said its return on equity was for 2012 and in the third quarter of this year was 13 per cent even as he expressed confidence that the future would be brighter.
 

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Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Dangote Cement Lifts Market to N12.7tn

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Read Time:1 Minute, 46 Second
The week started on a positive note monday as the Nigerian Stock Exchange (NSE) All-Share Index rose 2.22 per cent to close at 39,685.34, compared with a marginal loss of 0.01 per cent on the last day of last week.
However, the 2.22 per cent jump yesterday was influenced by a 10 per cent rise in the share price of Dangote Cement Plc. The stock, which accounts for 27 per cent of the NSE market capitalisation, rose N20 to close at N220 per share, which is New Year high.
The DCP gain added N140 billion to the market capitalisation of the exchange and accounted for the 50 per cent of the N276 billion recorded yesterday. The market capitalisation rose from N12.427 trillion to N12.703 trillion.
 
While some market operators said the high demand for DCP’s shares is driven by speculative trading, others said some investors were attracted by the nine months results of the company where it recorded a growth of 36 per cent in profit.
The cement firm’s profit before tax (PBT) rose to N151.73 billion indicating an increase of N45 billion over N106.43 billion in 2012, while operating profit rose by 36.4 per cent to N156.89billion.
Revenue for the period under review went up by N64 billion or 28.7 per cent to N288.98 billion compared with N244.50 billion of the preceding year.
 
Commenting on the results, Group Managing Director, Dangote Cement, Devakumar Edwin, said demand for cement remains strong in Nigeria with company recording sales nearly 30 per cent higher than last year.
“As we predicted in July, the gas supply to Obajana was lower than desired during the third quarter and we are looking for additional sources of gas and other fuels such as coal to keep us fully supplied in the coming years.”
Apart from DCP that rose 10 per cent, other price gains appreciated between 0.12 per cent and 4.7 per cent. In all, there were 18 price gainers compared with 29 price losers.

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Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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CAC Liquidates 30 Wonder Banks, as Depositors May Lose N106bn

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Read Time:2 Minute, 8 Second
The federal government has said the weak nature of the Small and Medium Scale Enterprises (SMEs) sector is currently hampering the inflow of foreign direct investment.
 
The Executive Secretary, Nigerian Investment Promotion Commission (NIPC), Mr. Mustafa Bello, disclosed this in Abuja during the recent ninth national conference on investment.
The conference with theme, ‘Building linkages for competitive and responsible entrepreneurship in Nigeria,’ was attended by relevant investment promotion agencies and development institutions from both the public and private sector of the economy.
 
It was convened to mobilise broad-based support and provide a road map towards creating an enabling investment environment for investment in Nigeria.
 
Bello, while quoting statistics from the International Finance Corporation (IFC), lamented that although SMEs constitute 96 per cent of Nigerian businesses in general and 90 per cent of the manufacturing sector, it only contributes about one per cent to Nigeria's Gross Domestic Product (GDP).
 
The one per cent contribution to GDP, he added, is low when compared to the 40 per cent contributed by SMEs in Asian countries and 50 per cent in the United States and Europe.
 
He said: “There is no gainsaying that the engine of industrial development in any economy is the small and medium enterprises sector. According to the IFC, SMEs constitute 96 per cent of Nigerian businesses in general and 90 per cent of manufacturing/industrial sector in particular as against 53 per cent and 65 per cent of businesses in US and Europe respectively.
 
“Unfortunately, they contribute approximately one per cent GDP in Nigeria compared to 40 per cent in Asian countries and 50 per cent in the US and Europe. It is also important to note that with a weak SME sector, the ability of the country to attract FDI is seriously hampered”, he added.
 
With such low contribution to Nigeria's GDP, the NIPC boss said the sector's contribution to wealth and employment in the country would be far below its potential.
He disclosed that the commission has selected the areas that have been identified as hindering the growth of SMEs in Nigeria, adding a framework that would make Nigeria the preferred next destination would soon be formulated.
 
Also speaking at the event, the Minister of State, Industry, Trade and Investment, Dr. Samuel Ortom, said the federal government had taken several measures to make the Nigerian investment environment more competitive. He listed some of the measures as increased investment infrastructure in roads, railways and airports.

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Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Court Stops Chevron from Sale of Oil Blocks to Seplat Petroleum, Others

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Read Time:4 Minute, 52 Second

A Federal High Court sitting in Lagos has issued an interim junction restraining Chevron Corporation of the United States and its Nigerian subsidiary, Chevron Nigeria Limited (CNL), and their agents from negotiating the sale of Oil Mining Leases (OMLs) 52, 53 and 54, with Seplat Petroleum Development Company (SPDC) Limited or any other bidder, apart from Brittania-U Limited.

The court, presided over by Justice M. N. Yunusa, also issued an injunction restraining Chevron and its agents from declaring Seplat Petroleum Development Company or its agents as the preferred bidder for the oil blocks, apart from Brittania-U Limited, which emerged the highest bidder in the transaction.

The injunction against Chevron followed a court action by Brittania-U, alleging that CNL and Chevron USA have been working behind the scenes to ignore the result of the competitive bid conducted for the sale of Chevron’s 40 per cent interest in the three oil blocks.

The court also ordered Chevron not to execute a definite agreement or any other agreement with Seplat or any other bidder, apart from Brittania-U.

Joined in the suit were CNL, Chevron USA, BNP Paribas Securities Corporation, Mr. Hermant Patel and Seplat Petroleum Development Company Limited.

Brittania-U emerged as the highest bidder, offering $1.015 billion, while Seplat and its partners came second with an offer of about $900 million.

THISDAY gathered that although Chevron acknowledged Brittania-U as having submitted the highest bidder, the company refused to provide a formal letter to Brittania-U.

The transaction assumed a curious twist, when Chevron, through its General Counsel, Mr. EN Mojuetan, wrote to Brittania-U on December 5, 2013, stating: “Chevron has the right to engage or negotiate with any party, including by changing the bidding procedures at anytime.”

A Chevron top official, who was not happy with what he called his company’s decision to change the goal post, told THISDAY that the letter conveying Chevron’s decision to change the bid process came two-and-a-half months after the closure of the bid.

“The letter was written after Brittania-U had been verbally informed of its winning bid and made to provide evidence of bank guarantees from Nigeria and abroad, and made an initial payment of $250 million through a letter of credit that is still with Chevron,” he said.

It was also gathered that Brittania-U has been involved in meetings and communication with Chevron and its agents in the past two months as the recognised highest bidder and has been requesting any form of letter from Chevron to no avail.

After waiting for the formal letter without success, Brittania-U, on 6th of December, 2013, declared a dispute with Chevron Nigeria and through its lawyers wrote Chevron accordingly, accusing it of acting in contravention of international best practices and standards in such matters and transactions, including its own information memorandum on the sale of the three Nigerian assets.

An official of Brittania-U, who preferred to remain anonymous, also said as a law abiding company, it had expected Chevron to do the right thing formally by declaring it as the winner of these assets.

“Unfortunately, Chevron reneged on this pledge; rather they went behind to deal with Seplat and others at a meeting held in London on October 31, 2013, which is a fraud, yet the President of Chevron invited Brittania-U’s management and its bankers for a meeting at Chevron Corporation on November 14, 2013.

“It should be noted, that nowhere in the world will the government or the national oil company of any responsive country allow such reckless behaviour from a multinational operating in their country. It is only in Nigeria that such can be done without any repercussion,” the company said.

Brittania-U was said to have resorted to the court action after a recent meeting on November14, this year, which was at the instance of the President of Chevron Corporation, Mr. Ali Moshiri, who directed Brittania-U to come with their bankers —First Bank of Nigeria Plc, Diamond Bank Plc and Ecobank Nigeria Limited — and their lawyers, as well as their firm board commitment letters, that the banks were ready to fund Brittania-U’s bid.

Brittania-U argued that they were made to provide firm board commitment letters which is as good as cash, even though it was not part of the bid process as published by Chevron.
In attendance at the said meeting were the Chevron team of Messrs Hemant Patel, Matthew Steele and Norman Hanson, while the Brittani-U team was led by their Chairman/CEO, Mrs. Uju Ifejika, with executive directors from the three banks.

Brittania-U submitted its firm board commitment letters for the new revised bid sums of $1.015 billion, which was still higher than that of the consortium of Seplat, Amini Petroleum and Belema Oil, which offered a total bid of $900 million, according to information from Venture Africa report.

It was gathered that Patel, who chaired the meeting, in the presence of everyone at the meeting, promised to send the revised Sales and Purchase Agreement (SPA) for the three OMLs to Brittania-U within 48 hours, upon final review by the Legal Department of Chevron.

However, Chevron through Patel wrote Brittania-U on November 18, 2013, to indicate that Brittania-U omitted in their submission, their individual amounts that made up the revised bid of $1.015 billion.

But Brittania-U was said to have promptly provided Chevron with the information the same day and was acknowledged by Chevron on November 19, 2013.

Having met all the requirements of the bid process, Brittania-U alleged that Chevron refused to give it an award letter, as the successful bidder of the three blocks, hence the court action.

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Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Revamping Nigeria’s Manufacturing Sector

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Read Time:7 Minute, 36 Second
The Nigerian manufacturing sector has begun to experience statistical growth. It is an important point to make, in spite of the cynicism towards statistical expression of performances of economic indicators in Nigeria. But part of the economic transformation that is taking place in the country is that public and private sector institutions are now producing analytics for better understanding of what is going on in the economy. More systematic approaches to data-gathering are helping to provide reliable information, which guide economic and investment decisions, in line with the trend in the advanced and emerging markets, where regional, national and sectoral data are crucial in understanding the state of the economies and the performance of their industries.  
 
According to the National Bureau of Statistics (NBS), the performance of the manufacturing sector has been strengthening. The sector grew by 8.41 per cent in Q1 2013. It was a performance that even bettered the impressive growth of 7.70 per cent in the last quarter of 2012. This upswing in the performance of one of the sectors that hold the ace for Nigeria’s economic transformation was corroborated by researchers at FBN Capital, one of the leading investment banking and financial advisory groups in Nigeria. FBN Capital’s Purchasing Managers Index (PMI) has maintained a reading above 50 points since the “headline reading” of 59.6 per cent at its launch in April 2013. The PMI methodology indicates 50 points as flat performance; a reading above it is growth, while lower reading indicates contraction.
 
Although far from glory days, the Nigerian manufacturing sector currently constitutes 10 per cent of our GDP. This is significant for a frontier market, and at this stage of Nigeria’s development. The sector accounts for about 12 per cent of employment in the formal sector. In spite of the decline in the sector a few years ago, the consumer goods sub sector has always been vibrate. After decades of domination by multinational food and beverage franchises, recent growth in manufacturing has seen strong contribution by indigenous manufacturers, who have come into fortune because of the policy support under the Transformation Agenda of President Goodluck Jonathan, and the fillip provided by his predecessors.
 
A Manufacturing Hub
Nigeria has been a sort of manufacturing hub for West Africa for decades. A huge percentage of the trade in manufactured products that linked the sub region is informal. Pharmaceutical products and other consumer manufactured goods had fuelled Nigerian exports to Ghana, Sierra Leone, Gambia, Liberia and a swath of Francophone West African countries, until China took aim at the sub region to dump inferior quality items from the 1990s. But Nigeria is set to regain its status as the central nervous system for manufacturing and distribution on the West coast of Africa, for a number of reasons.
Unlike in the 1970’s through to the last decade, China now cares much more than economic growth that is achieved through foul trade practices such as dumping. Now the second-largest world economy – one that aims to be more influential in global diplomacy – China has begun to reform its industrial practices, and is aiming to shift from manufacturing of inferior quality products to leveraging hi-tech. Moreover, China is transitioning from a low-wage economy as domestic consumption has been identified to be a major support for economic growth for the country, moving forward.
 
The status of Nigeria in manufacturing in West Africa can hardly be challenged. A domestic consumer base of over 170 million people ensures that local demands are strong and supportive of investment in manufacturing. This is particularly so as a result of the growing middle class in Nigeria that is boosting consumption. Thus, it is reasonable, that foreign investors in the region look at setting up in Nigeria and then export excess capacity to other countries in the region. A reverse strategy is a nonstarter. While infrastructural support for trade of manufactured goods in the country has been inadequate (but improving), more serious logistical, non-tariff barriers will thwart any effort to serve Nigeria’s needs from a manufacturing base elsewhere in West Africa. Not surprisingly therefore, some of the manufacturing companies that moved out of Nigeria a few years ago are now returning.
 
A number of reforms are reshaping the manufacturing sector in Nigeria. The NBS has more recently attributed the growth in the sector to implementation of the power sector reforms. The full effect of the reforms is a promise than what we currently experience. It is therefore expected that the era of more stable grid-electricity power s supply, which Nigeria now has on the horizon, would ensure that products manufactured in Nigeria move towards price-competitiveness. It will also drive other efficiency factors. As I had mentioned, the present administration has pressed on with addressing infrastructural deficiencies. As a first step in the rail transportation, some of the old rail lines have been revamped and are now operational. This and some proposals for new tracks will support establishment of an agricultural corridor to connect agricultural produce to agro-processing industries.
 
A number of policy supports, including fiscal incentives and establishment of free trade zones, have underlined government’s efforts to lift the manufacturing sector. General Electric is one of the global manufacturers that have taken advantage of this in recent times. Its $1 billion investment in a service and manufacturing facility in Calabar, Cross River State, Nigeria adds to the high profile nonoil foreign direct investment in the country. Of bigger scale is the $9 billion investment of Dangote Group in petroleum refining, petrochemical and fertiliser plant in the Olokola Free Trade Zone.
SME manufacturing is not overlooked. Part of the credit goes to the strong advocacy of the very vibrant trade association for the sector: Manufacturers Association of Nigeria (MAN). Its leadership has been persistent in calling for more favourable fiscal environment and removal of barriers to the growth of the sector. Where MAN has been helpless (although not altogether without assistance), is the area of high interest rate charged by the commercial banks. A number of financing initiatives including an SME fund sponsored by Central Bank of Nigeria (CBN) have been addressed to the special funding needs of manufacturers of smaller scale. That we have need of more low-cost finance solution is well acknowledged by policymakers, although macroeconomic goals that impact interests rates are much more difficult to achieve at the current level of success with diversification of the economy.
 
Nexim Bank in the Solution Mix
The Nigerian Export – Import Bank has been working closely with some manufacturers in Nigeria since we formulated our “MASS Agenda.” We thought that the manufacturing, agro-processing, solid minerals and services sectors were very important frontiers of job-rich growth that the country needed to give welfarist meaning to the impressive GDP growth Nigeria has experienced since much of the last decade. Specifically, since 2010, NEXIM Bank has been assisting some manufacturers to retool. We have funded complete overhaul of facilities for some manufacturer clients. Manufacturing evolves with technology. Therefore, our interventions usually assist manufacturers to adopt new technology in the form of new equipment and machinery. 
As a development finance institution (DFI), NEXIM Bank’s facilities, including for manufacturers, are priced below the exorbitant market rate of the commercial banks. For a number of our loan beneficiaries, our facilities have been critical to their ability to take advantage of opportunities that require them to expand their capacity, or acquire more cost-efficient facilities to improve the quality of their products.  In either scenario, jobs are on the line. We look to create and sustain jobs in the manufacturing sector.
 
We hope to scale up our impacts. By 2015, Nexim Bank aims to provide about N42 billion in short and long-term financing to the manufacturing sector. This will represent about 6 per cent of total funding needs of the sector. With this, we hope to directly mediate about 4 per cent of total production value in manufacturing, and create and support over 70,000 jobs. Our specific view of the sector is to identify key areas of growth dynamics. As a result of local consumption capacity and local sourcing of raw materials, Nexim Bank will focus significant parts of its intervention on these subsectors: food and beverage, wood products, domestic and industrial plastic/rubber products, steel and alloy products.
An up-to-date view of the sector is not that it is comatose; it is revamping. The growth potentials in the manufacturing sector are huge. Manufacturing is one of the sectors that will contribute to the long-term economic growth in Nigeria. When we factor in the value chain, we see even brighter economic prospects. Nexim Bank will continue to innovate on how to support, in particular, export-manufacturers in fulfilment of its mandate. We are taking another major step in this direction with our buyer credit facility, which is in the offing and will be launched by 2015.
 

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Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Dasuki Roots for new Anti-Insurgency Strategies

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Read Time:1 Minute, 21 Second
National Security Adviser Col. Sambo Dasuki (rtd) has advocated new strategies as the solution to the insurgency plaguing the country.
Dasuki, who said this at a seminar organised by the National Defence College in Abuja weekend, disclosed that global terror championed by Al Qaeda has encroached upon the frontiers of Nigeria’s security and wellbeing.
Nigeria, according to him, is responding to this threat on all fronts. “Through new and relevant legislations and policies, security agencies continue to dismantle terrorist infrastructure in Nigeria,” he said.
 
The NSA also declared “that military action on its own will not counter terror if not accompanied by a robust public diplomacy aimed at defeating the ideology of hate and building consensus against violent extremism.  “That is why strategic communication is an essential part of our counter terrorism operations. Nigeria will continuously update its strategic communication needs to reflect current challenges occasioned by terrorism.”
 
He opined that Nigeria’s diversity, rich history and culture should be considered assets for the demonstration of national cohesion rather than a cause for division. “We will mobilise these national assets to remind Nigerians that more issues unite us than divide us. Our shared history, cultures and geography will be amplified as basis for a comprehensive strategic communication in order to attain set national security objectives. In all areas of strategic communication programs, focus will be placed on: unity and indivisibility of Nigeria as a nation; democracy and the fundamental freedom of worship and belief; public safety and good governance and zero tolerance for violent extremism.”

About Post Author

Anthony-Claret Ifeanyi Onwutalobi

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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