The Nation Newspaper

Category: Money

  • ‘How procurement can reduce corruption’

    The Chartered Institute of Purchasing and Supply Management of Nigeria (CIPSMN) has said the right application of procurement practices will help reduce corruption and enhance budget implementation in the country.

    Its President, Mohammed Aliyu said the transformation agenda of the Federal Government may not be realistic if the right people are not in the right positions.

    He spoke in Lagos during the annual conference of the institute with theme: ‘Mainstreaming the procurement practice in Nigeria, its implication on the transformation agenda of the Federal Government’.

    Aliyu said Nigeria is in need of people that will bring productivity to the economic development and revival of the economy. He said procurement and supply chain management practices could be used to fight corruption through efficient management of resources.

    He said CIPSMN is determined to continue to point out the ugly conduct that someday this might lead to other unbearable outcome for the nation.

    The Secretary to the Government of the Federation, Senator Anyim Pius Anyim said the president is committed to good procurement practices in the county and he is taking the lead in transformation agenda. He said that the government will not hesitate to invoke all the sanction provisions of the Public Procurement Act 2007 against any public officer or contractor or consultant who contravenes any provision of the law.

    He said the Economic and Financial Crimes Commission (EFCC) are investigating cases of infractions.

     

     

     

  • ANAN seeks International Accounting Standards’ domestication

    The President of the Association of National Accountants of Nigeria (ANAN), Sakirudeen Labode is seeking the application of International Accounting Standards for transparency of financial statements.

    He spoke after a two-day workshop on International Public Sector Accounting Standard (IPSAS) held in Nassarawa State University, Keffi.

    The workshop is jointly organised by ANAN and the Institute of Certified Public Accountants in Ireland (CPAI). “If we truly desire to drop the toga of a developing country and join the league of developed nations, our reporting system must swing along the lines of the credible path. ‘That will lead to transparent presentation of financial positions through application of international standards,’’ Labode said.

    He said that the workshop would also make ANAN members more competent and efficient on the convergence of financial information based on Generally-Accepted Accounting Principles (GAAP) with the international public sector accounting standards.

    According to him, that is very important to the extent that almost all the countries in the world had adopted it (IPSAS) wholesale or by blending to suit their peculiar financial environment. “Many governments introduced IPSAS because it is considered to be good and transparent. “While some adopt the standards wholesale, some adopt and modify the system, the bottom line , however, is its universality,’’ Labode said.

    The ANAN president, however, said that in Nigeria, we had opted to transit to cash basis in 2014 and to accrual basis in 2016 full blast. He added, ‘’ the use of IPSAS is steadily becoming more widely spread and increasingly relevant in public sector accounting around the worlds.’’

    Labode mentioned that accountants in public sector were, however, faced with the daunting task of having to learn and apply what seemed a completely new set of Financial Reporting Standards.

    According to him, even, though, the task is daunting, this is necessary to make our impact felt and the consequential output of our efforts relevant, understandable and comparable.

    “ Being associate member of IFAC places enormous responsibility of training on both members and staff upon our shoulders on which we must not waiver no matter how intimating the challenges might be,’’ the ANAN president said.

    The Coordinator of the workshop and the Assistant Registrar, Technical of ANAN, Dr Micheal Ayeni said that the connotation of the international accounting standard was meant to ensure credibility of financial statement.

    Ayeni said that this could not be achieved without a thorough understanding of its benchmark. “One of the beacons of these benchmarks used as a pathfinder to a credible financial statement is the international public sector accounting standard (IPSAS), which we are about to demystify today,’’ he said.

    The Accountant said the principal objective of the workshop was to equip participants with the tool kits and acumen that would make them become versatile in the art of converting fro financial statement based on the Generally Accepted Accounting Principle (GAAP) to the modern global standard known as IPSAS.

    He said that this would enable ANAN members to be on the same page with international stakeholders who would like to assess the worth of their investments in Nigeria using international accepted principles

  • Fidelity SME Forum advises entrepreneurs

    Passion has been identified as a key critical success factor for aspiring business people. Lady Kehinde Kamson, founder of Sweet Sensation made the disclosure while sharing her success secret in a highly competitive industry on the Fidelity SME Forum, a weekly radio programme organised by Fidelity Bank Plc as a deliberate attempt to resuscitate the Small and Medium – scale Enterprises (SMEs) and create a new generation of entrepreneurs with the “I can do” spirit in Nigeria.

    Kamson said that she had always had the passion for cooking, baking and food service generally. “I like to try out recipes and I had a mother who taught me same and she was a good example. So, the business had to be food because that was what I had a passion for and that’s another point I would like to share with aspiring business people. It’s good to look out for money, but it’s also good to satisfy your passion.”

    On why it took long to open an outlet of Sweet Sensation, she said that every good thing has to start with some degree of experience, stressing that one must necessarily struggle because if one does not struggle, then he or she can’t understand the business effectively and success may be short lived. “There is a learning process that you cannot compromise and it comes with every territory and if you then patiently struggle through the process, then you will come out victorious.”

    Kamson maintained that there is no right time to go into business rather it depends on the type of maturity the business choice requires. Some business, she says, may require extreme maturity which one cannot really cope with except they are able to learn from a skill acquisition centre. “Businesses require different skills and temperament. While one is young, it’s true that making children comes in the way in the case of mothers, but with determination, you can truly succeed,” she added.

  • Eti-Osa Council presents annual budget

    The Eti-Osa East Local Council Development area (LCDA) has presented this year’s proposed budget to legislators. The year 2014 tagged “Budget of Consolidation” is prepared to accommodate the infrastructural needs of the people of the local council this year.

    The event was attended by dignitaries from all works of life among whom were party leaders, Community Development Associations (CDA), CDC Chairman Alhaji Ariwaja, APC chairman Alhaji Apampa Bashorun to mention but few.

    In the Executive chairman’s address, he appreciated members of his administration, Management and staff and the entire populace of Eti-Osa East LCDA for their support in seeing to the smooth running of this administration.

    The leader of the legislative council, Eti-Osa East LCDA Hon. Kabir Sulaiman in his speech applauded the efforts of the administration in the past year and promised to critically look into the year 2014 proposed budget. He also enjoins the administration to ensure complete implementation of the year 2014 budget.

  • FMDQ, Bloomberg inaugurate e-bond trading platform

    FMDQ, Bloomberg inaugurate e-bond trading platform

    Bloomberg and FMDQ OTC Plc have launched the Bloomberg E-Bond trading and market surveillance system, a new electronic trading system for Nigerian government bonds.

    Developed by Bloomberg, FMDQ and the local market-maker community, the product provides e-trading and market surveillance tools for participants in Nigeria’s N12 trillion fixed income market.

    “As a newly established OTC market securities exchange, our goal is to empower the Nigerian OTC financial markets to be efficient, credible and globally competitive. With its potential to drive transparency and liquidity, we believe the introduction of the Bloomberg E-Bond system will help us to achieve those aims and we are pleased to work with Bloomberg to bring it to the Nigerian fixed income market,” says Dipo Odeyemi, the Divisional Head, Operations and Technology, FMDQ OTC.

    The Bloomberg E-Bond system provides a complete, consolidated marketplace for government bonds, offering market participants a robust and flexible set of tools supporting the full trade workflow. This includes pre-trade price discovery and analytical tools, the ability to handle both multi-dealer request-for-quote (RFQ) and order trading, straight-through processing (STP) functionality and integrated trade capture and reporting tools. In addition, market oversight entities and regulators can use the system to review market activity and audit transactions.

    “A well-functioning debt market needs an efficient technical infrastructure, bespoke trading rules, market surveillance and straight-through processing,” says David Tamburelli, Bloomberg’s Head of Emerging Markets Product.

    “Bloomberg’s E-Bond system responds to those needs and we are delighted to collaborate with FMDQ to build a more transparent, liquid and efficient bond market in Nigeria,” he added.

     

  • Why investment return is low in Africa, by CBN chief

    Why investment return is low in Africa, by CBN chief

    Return on Investment (RoI) in many African countries is relatively low compared to most developed economies, Central Bank of Nigeria’s (CBN) Deputy Governor, Operations, Kingsley Moghalu, has said.

    Moghalu, who spoke at the Second Africa CEO Forum last weekend in Switzerland, said this was due mostly to multiple taxes and tariff, high business registration costs and port charges.

    Speaking on the theme: “Competitiveness and economic transformation- Africa’s imperative,” he said the high cost of funds, policy inconsistency as well as high level of insecurity were also affecting Africa’s ROI.

    “All these factors combine to heighten the cost of operation that undermine the realisation of corporate objectives. To make African economies competitive, the high cost of doing business must be drastically reduced through sustainable economic and institutional reforms. There is also a need for substantial reforms in the banking sector so that African banks will be able to finance long-term growth enhancing projects to guarantee competitiveness of the African economy,” he said.

    Moghalu said the major economic challenge in Africa is the need to diversify the productive base of their economies from commodity exports to manufacturing.

    He explained that economic diversification was vital to countries’ long-term economic growth, but many resource-rich countries in Africa rely mainly on revenues generated from export of primary products, mining or oil production, thereby jeopardising their chances for sustainable growth.

    “Economies heavily dependent on natural resources can face serious challenges in sustaining growth because of swings in prices of those resources. African economies depend heavily on commodities as the main source of their foreign earnings accounting for over 81 per cent,” he said.

    Moghalu said enhancing the competitiveness of economies transcends pricing to include critical factors, such as industrialisation, cost of labour and doing business, economic diversification, infrastructure, security, investment climate and institutions as well as corporate governance, transparency and accountability.

    He said Africa’s competitiveness is important because the continent needs to secure its position in the global market for trade, investment and services.

    “The continent should enhance its competitiveness by harnessing its huge endowments in natural and human resources in an efficient manner that promotes global and intra-regional trade,” he said.

    This, he said, imposes a strategic imperative for African countries to improve their individual investment and business environments through the development of infrastructure, strong institutions, human capital, stable political and macroeconomic environment, as well as technological advancement and innovation. All of this will translate into sustainable economic growth and transformation.

     

  • Taxation Institute, EFCC, FRC, others to fight corruption

    Taxation Institute, EFCC, FRC, others to fight corruption

    The Chartered Institute of Taxation of Nigeria (CITN) is working out modalities with the Economic and Financial Crimes Commission (EFCC), National Financial Intelligence Unit and Financial Reporting Council (FRC) to tackle corruption and economic crimes in the country.

    In a statement, the institute said it has taken proactive steps to educate stakeholders, particularly tax practitioners, on various statutory requirements stipulated in the Money Laundering (Prohibition) Act, 2011 (as amended), the Financial Reporting Council Act of 2011, the EFCC Act of 2004, and the Terrorism (Prevention) Act, 2011 (as amended).

    CITN’s Acting Registrar/Chief Executive of the Institute, Mr. Adefisayo Awogbade, the steps are in line with the institute’s strict compliance to the statutory requirements of the regulatory bodies designated, by the Money Laundering (Prohibition) Act 2011 (as amended), as Non-Financial Institutions for the purpose of registration, reporting and conduct of customer due diligence.

    Awogbade described the rate of corruption in the country as alarming, adding that more often than not, many of the acts of corruption were facilitated by professionals for culprits. That is why the institute, in conjunction with these anti-corruption agencies, is facilitating an avenue to inculcate in its rank and file the various statutory provisions that are obligatory on them in the process of performing their professional callings.

    According to Awogbade, “The taxman plays a dual role, to the government, on one hand, and to the taxpayer on the other. It is, therefore, expedient to ensure that tax practitioners perform their duties professionally within the ambit and dictates of the laws of the land. We need to ensure that whatever we do as professionals are in tandem with the Charter of our Institute, as well as other statutory provisions.”

    He explained further that the Council of CITN was now better positioned than before to monitor all practitioners carrying the practising licence of the Institute.

    He said: “It is not enough for members to have practising licence to practice once and for all.

    “The Institute will continue to monitor each practitioner to the extent that re-certification would be done as regularly as practicable.”

  • CBN’s, IFC’s push for sustainable banking

    The Central Bank of Nigeria (CBN) and the International Finance Corporation (IFC) are working to ensure that banks are cautious in financing transactions that may affect the environment. COLLINS NWEZE examines the steps banks must take to achieve this objective and avoid sanctions.

    To sustain profitability in banking there is need for lenders to ensure that their activities are not targeted at short term goals. This, experts say, can be achieved when the lenders think of the long term effects in financing projects that have negative impact on the environment.

    In this regard, the Central Bank of Nigeria (CBN) and the International Financial Corporation (IFC) have urged banks to consider environmental and social policies in their decision-making and lending.

    According to the apex bank, if the oil firms that degrade the environment and their cohorts in other sectors are starved of funds by local and international banks, they will comply. The CBN said there is need to ensure that people do not conduct their businesses in an unfriendly manner and get away with it.

    The reason is that as an industry, banks cannot continue to take savings and deposits from Nigerians and then, lend to firms that are destroying the environment.

    To ensure that this is achieved and defaulters sanctioned, the regulator also developed a template for banks in filling their reports on loans to firms whose operations have negative impact on the environment.

    For the CBN, sustainable banking is aimed at minimising or mitigating the negative impacts of financial institutions’ operations on the environment and local communities in which they operate especially on agric, power and the oil and gas sectors.

     

    Sanctions coming

    The CBN Acting CBN Governor, Dr. Sarah Alade said banks that fail to comply with the guidelines on sustainable banking practices will be sanctioned.

    She spoke at an International Sustainable Banking Forum organised by the CBN in collaboration with the International Finance Corporation (IFC).

    She said lenders that consistently fail to comply with the guidelines would not be spared.

    Alade, represented by CBN Deputy Governor, Operations, Dr. Kingley Moghalu, said the regulator would not set guidelines for the lenders, but that their levels of conformity would be assessed at least every two years.

    “The banks are trying to apply those principles on their operations. Although the principles have become part of banking system supervision process, we cannot set a compliance timeline for that. However, if a bank does not comply, then we will take sanctions if non-compliance becomes consistent,” she said

    She also said the CBN directive on board membership would be assessed by year-end, adding that that would bring them to key board positions. She said the CBN is also partnering with the IFC to create a movable collateral registry that will make lending to women much easier. She said there was need to increase lending to women by ensuring that collateral to loans are creative.

    “The CBN recognises that unless social concerns, such as gender disparity and women economic empowerment are addressed, economic and environmental goals and overall sustainable development will be difficult to achieve,” she said.

    Alade added that sustainable practices will look at how banks are managing environmental and social risks in lending investment decisions, safeguarding human rights, promoting women economic participation and empowerment and leveraging collaborative partnerships to accelerate sector progress.

     

    NDIC’s role

    Also, the CBN and Nigeria Deposit Insurance Corporation (NDIC) want banks to shift focus from profitability and consider other issues around sustainability, before lending.

    NDIC Managing Director Umaru Ibrahim said banks should ensure that activities of firms that pollute the environment were not financed. He said the United Nations Environment Programme (UNEP), through its UNEP Financial Initiative on the Environment and Sustainable Development at the Earth Summit in 1992, made it a priority for financial systems across the world.

    He said sustainable banking in Nigeria, therefore, is focused on energising the influence of the sector towards transforming the long term interest of environmental preservation and societal balancing into key parameters for allocation of capital.

     

    IFC’s position

    IFC’s Country Manager for Nigeria Solomon Adegbie-Quaynor said the CBN has encouraged the adoption of sustainable banking in Nigeria.

    “Today’s forum presents a platform for regulators to share insights on environmental and social risk management and sustainability-related tools for long-term economic growth,” he said.

    Adegbie-Quaynor also said sustainability is central to inclusive economic growth and aligns with IFC’s strategy for long-term economic development, adding that sustainable banking helps banks and financial institutions to better understand the benefits and risks of environmental and social impacts of their investments and loans.

    It provides a framework for them to further integrate these considerations into their policies, operations and procedures. This creates environmental and social responsibility in the financial sector and adds long-term values for clients and other stakeholders, he said.

    He said the International Sustainable Banking Forum is a voluntary platform of bank regulators and banking associations established to facilitate knowledge sharing and development of standards, policies and guidelines on environmental and social risk management for regulators in emerging markets. The Network members include Nigeria, Bangladesh, Brazil, China and Colombia. Others are Indonesia, Lao, Mongolia, Peru, Philippines, Thailand and Vietnam.

     

    CBN’s roles

    According to the CBN, for the successful implementation of the principles, the institutions would be required to develop a management approach that balances the environments and social ( E &S) risks identified with the opportunities to be exploited through their businesses.

    “The adoption of the principles will not only help banks in mitigating the E & S risks associated with their business operation and those of their clients, but also help them to achieve greater efficiencies and better position them to take advantage of opportunities in the global market place where environmental and social issues are becoming increasingly important.

    “They will also enjoy higher productivity, higher staff morale, lower turnover and absenteeism due to strong employee relations and workplace practices. The CBN would need to provide the structural mechanism to encourage consistent and widespread implementation of the principles and develop its institutional capacity to support the banks in their implementation of the principles,” it added.

    While noting that the process of developing the sustainable banking principles and guidelines has so far been driven by the banks, the apex bank assured that it will create the enabling environment for banks to succeed in their implementation of the principles.

    The CBN has also recently set new rules for lending to the agricultural sector of the economy. This resolution stemmed from the reports from banks and discount house, which indicated that lending to the subsector, remains a high-risk, which should be followed with caution.

     

    Women’s role in sustainable banking

    According to the CBN, sustainable banking entails ensuring that women are well represented in the banking sector.

    Alade said the apex bank will by year-end, review banks’ compliance with its directive that lenders give 40 per cent of board positions to women.

    She said the CBN has told the banks that compliance was important, adding that the sector is committed to increasing the number of women in decision-making: 40 per cent of top management positions and 30 per cent of board positions occupied by women within this year.

    “Although we want this achieved, we will have to wait till the end of 2014 to assess compliance. We expect that many banks will comply. We recognise that simply issuing the circular is the beginning of the journey. It is not an easy thing to comply, as witnessed in other parts of the world. Even in the United States, there are problems with women being represented on the boards of corporates. Even the European Union has made it compulsory, and mainly because there is a structural impediments, to getting women in corporate leadership position,” she said.

    She said the CBN has taken proactive steps to promote gender equality and women empowerment.

    The CBN, she said, is promoting women’s economic empowerment to achieve sustainability by launching the N220 billion Micro, Small and Medium Enterprises Development Fund, 60 per cent of which would be committed to women owned or headed businesses and enterprises.

    “The CBN recognises that unless social concerns, such as gender disparity and women economic empowerment are addressed, economic and environmental goals and overall sustainable development will be difficult to achieve,” she said.

    She explained that just like in every part of the country, there are qualified people to fill any position. It also follows that in firms, there are qualified women to fill vacant position.

  • ‘Nigerian banks remain best buys’

    ‘Nigerian banks remain best buys’

    Zenith Bank Plc, Access Bank Plc and United Bank for Africa Plc, among others, have been recommended for investment because of their valuations and growth potential.

    Exotix Ltd., a leading investor in Africa, said the banks were an investors delight.

    “We strongly believe that now is the time to have a strong bias toward Nigerian banks,” Kato Mukuru, an analyst at Exotix Frontier Equities, told Bloomberg. “Nigeria also offers something that few sub-Saharan African banking systems can hope to offer — scale.”

    Almost half of Nigeria’s more than 170 million people don’t have access to finance, according to the country’s central bank. With loan penetration in the West African nation increasing by only five percentage points over the past 10 years, the potential for asset growth in Nigeria is probably much larger than in other parts of the continent, said London-based Exotix, which started building an Africa equity team last year.

    Zenith may improve its return on equity to 22.4 per cent by 2017 from the 19.6 per cent that Nigeria’s third-largest bank by market value reported last year, Exotix said.

    Barclays Bank of Zimbabwe Ltd., Standard Chartered Bank Ghana Ltd. and Ghana Commercial Bank Ltd. are Exotix’s top sell recommendations, Mukuru said. The Zimbabwean bank runs the “risk of an acute deterioration in domestic liquidity and a rapid deterioration in its asset quality” amid macroeconomic turbulence, he said.

    The Ghanaian lenders face asset quality and operating cost risks due to increasing interest rates, Mukuru said. The Bank of Ghana raised its key lending rate to a four-year high of 18 per cent in April.

     

  • Stakeholders explore funding for healthcare sector

    Stakeholders explore funding for healthcare sector

    •Okafor, Ayebae extol gains of listing

    Stakeholders in the healthcare sector and the capital market have called for continuous collaboration with a view to deepening funding and unlocking the immense opportunities in the healthcare sector.

    At the quarterly sectoral dinner of the Nigerian Stock Exchange (NSE) for the healthcare sector, the Federal Government, NSE, capital market operators and chief executives of healthcare companies brainstormed on the ways the capital market can foster the development of the healthcare sector.

    The dinner themed “Tapping the Opportunities in the Capital Market for the Development of the Health Sector’ was partly sponsored by May & Baker Nigeria Plc, Africa Prudential Registrars Plc and Fidson Healthcare Plc.

    Minister of Health, Prof. Onyebuchi Chukwu, said there are several opportunities in the healthcare sector that capital market operators and investors can collaborate on that will contribute to national development and yield good returns for investors.

    According to him, facilities such as specialist hospitals, diagnostics centres, ambulance services, trauma centres, mobile clinics, pharmaceutical manufacturing, generic drugs and small holder specialist clinics among others are investment opportunities with good prospects.

    He highlighted the impressive prospects of the healthcare sector noting that a robust and growing economy, large market as denoted by high demand for healthcare services and incentives such as zero duty on medical equipment and flexible expatriate personnel quota make room for enormous potential in the sector.

    Managing Director, May & Baker Nigeria Plc, Mr, Nnamdi Okafor, called for a special collaboration among capital market regulators, operators and pharmaceutical and healthcare companies to create a special funding window for the industry.

    According to him, the NSE, Securities and Exchange Commission (SEC) , pharmaceutical manufacturers and other healthcare operators need to work together to create a special window of investment funding for the healthcare industry through the capital market.

    He noted that the demand for drugs and medical care remain an advantage to domestic producers as well as an opportunity for growth and development of the sector.

    “With an improved situation, pharmaceutical manufacturers have confidence to approach the capital market for funds knowing that their investments will be quick to recover. The market has capacity to identify foreign investors interested in the pharmaceutical business and I hope it will not be improper to arrange collaborative meetings for local companies with such investors,” Okafor said.

    He pointed out that May & Baker Nigeria had undertaken several significant investments in recent period through its internally generated revenue and borrowed funds noting that the recovery at the capital market provides opportunity to better funding through the market.

    “With the recovery in the capital market it is our hope that more conducive funding windows will be available to us and we shall count on the support of the NSE and other operators in the capital market if we decide to approach the market,” Okafor said.

    Encouraging other healthcare companies to list their shares, Okafor said that listing has added values to May & Baker Nigeria pointing out that it will in November celebrate its 20 years of listing on the NSE.

    According to him, the company has gone to great lengths to improve value for its shareholders as it invested heavily in the construction of a world class pharmaceutical manufacturing facility which its asset holding by more than 100 per cent by an additional N4 billion.

    He commended the courage and patience of shareholders and investors who willingly sacrificed their dividends when the company was building the Pharmacentre, assuring that with the progress it has made, the company is in good position to continue its tradition of robust dividends to shareholders soon.

    “With the PharmaCentre, we have been able to raise our capacity for producing medicines by about 200 per cent. From a total capacity of 2 billion tablets and 19 million bottles of liquid preparations of 60 ml, we now have capacity to produce 6.5 billion tablets and 56.5 million bottles of 60 ml liquid preparations annually. With that investment also we are at the forefront of the country’s pursuit of international quality standard. Along with few other companies we have reached an advanced stage in the process of WHO pre-qualification for locally manufactured pharmaceuticals. When that is accomplished, we shall be in a position to compete for international tenders, export our products to all parts of the world and reduce drastically the use of foreign drugs by international agencies who are undertaking intervention programmes in Nigeria and other African countries,” Okafor said.

    He pointed out that May & Baker PharmaCentre has capacity for contract manufacturing for local and foreign brand owners adding that some foreign pharmaceutical manufacturers are currently signing up with the company to manufacture their products in Nigeria.

    Managing director, Fidson Healthcare Plc, Mr. Fidelis Ayebae, said listing on the NSE will provide major boost to healthcare companies.

    He outlined the benefits of listing on the NSE to include easy access to adequate and amenable capital to grow and expand the business, diversification of shareholders’ base and resultant broadened idea base for the company, perpetuity of the company irrespective of the absence of the original founders and wealth creation.

    Relating his experience, Ayebae, who founded Fidson, said listing the company has proved to be a beneficial decision than any disadvantage.

    “The advantages of listing far outweigh the disadvantages, my experience in the lst seven years has been more sweet than bitter,” Ayebae said.