The Nation Newspaper

Category: Business

  • Eight staff get Airtel’s long service award

    Airtel Nigeria has honoured eight of its employees for putting in 10 years in service.

    The event held at the company’s Employee Consultative Forum (ECF) in Lagos.

    Speaking at the event, the firms’s Managing Director/ Chief Executive Officer, Segun Ogunsanya, commended the awardees for their dedicated service to the company through the good and bad times over the past ten years.

    He said: “It is a thing of pride to see people who have put in 10 precious years of their lives in the service of Airtel Nigeria. It is a moving human-interest story and it is the kind of story we wish to encourage in Airtel Nigeria,” Ogusanya said.

    The awardees were Yetunde Okaro, Vivian Ogunbanjo, Gabriel Afunwa, Ogochukwu Chigbo, Nicholas Aigberua, Babatunde Oginni, Joshua Eru and Titilope Olusanya.

     

  • MTN, RIM partner on Blackberry 10

    MTN Nigeria and Research In Motion (RIM), makers of the brand new Blackberry Z10 smartphone, are planning to introduce the new Blackberry 10 to the country. If the deal sails through, MTN will be the first to bring the latest Blackberry to the Nigerian market.

    MTN customers will be among the first users in the world to experience the new product, which has been re-designed to give customers a unique experience.

    Speaking on the deal, Chief Marketing Officer, MTN Nigeria, Larry Annetts, said the firm is giving them value for their money.

    “MTN is offering pre-order opportunities thus conferring on our customers the privilege of being one of the first to own the device in Nigeria. Not only that, those who pre-order will get the smartphone at a bargain price and they will be contacted for pickup at locations of their choice even before the phones become commercially available at retail stores. They are not required to make any deposits; they will simply pay on delivery,” he said.

    MTN Nigeria has an alliance with RIM, dating back to 2007, when MTN Nigeria was the first telecoms company in Africa to offer Blackberry on pre-paid.

    Analysts say the success of the Blackberry 10 will largely rest on winning back those customers who fled for the gorgeous hardware and exceptional user interface of the iPhone or fancied the range of phones running Android. The task is tougher here, though at least BlackBerry has 70,000 apps available on day one. This is a remarkable achievement and is many ways is enough to be going on with. Apple and Android have over 700,000 apps each, but the number of jewels is much lower.

     

  • Nigeria to save N2tr in raw materials devt

    The development of Nigeria’s intermediate raw materials will save it over N2 trillion in the next 25 years, the Raw Materials Research and Development Council (RMRDC), has said.

    Speaking in Abuja, its Director-General, Prof. Peter Onwualu, said since the council’s inception 25 years ago, it has promoted the exploitation, development and use of local raw materials.

    “Little wonder that after 25 years experience in value addition to local raw materials, the council has emerged as Nigeria’s focal point for the development of Nigeria’s vast industrial raw materials.

    “Our target is to increase the percentage of local content in industrial raw materials utilisation in Nigeria from the 25 per cent to 60 per cent in the next 25 years.

    “This, by our estimation, can save Nigeria over N2 trillion in foreign exchange for the importation of intermediate raw materials, process equipment and impact skills,’’ Onwualu said.

    According to the him, Nigeria is expending foreign exchange to import raw materials and products, which can be sourced from the country, because of lack of awareness.

    Onwualu said the country is processing about 25 per cent of its local cocoa production before the council was born.

    He said because of the council’s efforts over the years, the figure moved to 75 per cent, adding that another 2,000 jobs were created.

    He said over 100 research projects had been funded by the council, and about 50 per cent of research results had been commercialised, while 30 per cent were at various stages of commercialisation through pilot plants and joint venture with SMEs.

    He expressed the council’s belief on the development of the nation’s natural raw materials and investment in people, saying that both were possible and sustainable.

    He said to ensure that both remained a socio-economic vehicle for sustainable national growth and development, the council has embarked on intensive investment promotion campaigns across the country.

    He said the next 25 years, over two million jobs would be created in the area of raw materials production, processing, distribution and final processing of goods and services.

    “We hope to achieve these by consolidating on the council’s information generation, research grants scheme, commercialisation of research results and promotion of investment in resource based industries,’’ he said.

    Onwualu said the council would work with other relevant organisations to see to the emergence of about 5,000 SMEs, adding that this would be done by using research results and technologies developed by the council research institution, universities and other higher institutions.

  • The fall of cybercafé

    About ten years ago, cybercafe business was highly profitable. The owners were virtually minting money. Now the story is different. Cybercafe can hardly make ends meet. Many businesses have closed shop because of huge debts. Those still in business are merely existing. Lucas Ajanaku reports

     

     

    When he left Obafemi Awolowo University (OAU), Ile-Ife, about 10 years ago, Kayode Adeyeye had made up his mind not to seek a white collar job. He took this step because he had seen people who, after leaving school became ‘professional applicants.’

    To achieve his dream, Adeyeye mobilised funds from relatives and friends to set up a cybercafé in his neighbourhood in Agbado-Ijaye, a Lagos suburb.

    “I did not want to be a liability after graduating. I raised about N1.5 million and ploughed it into cybercafe business. I got 10 personal computers (PCs), rented a warehouse, bought an electricity generating set, got some furniture in place and started business,” he said.

    According to him, at the beginning, business was good; money was coming in from people who came to browse the Internet. An hour attracted about N200. He had problems coping with the huge customer traffic. Since necessity is the mother of invention, his wife introduced snacks and soft drinks and the business flourished. That was then.

    Today, the story has changed. One hour browsing time has come down to N100.

    At Karimu Laka Street, Egbeda, another Lagos suburb, a large building used to house DS Cybercafé and Computer Training Centre. Five years ago, the building was a beehive as men, women, old and young, thronged the place to browse and get computer education. He combined the business with Internet calls. His peak period was during the American Diversity Lottery programme. But the story has since changed as the firm has closed shop.

    The Emesck Solutions Cybercafe in Abule Odu, also a Lagos suburb, has also been deserted. The Client Service Executive, Yetunde Odukoya, a part time student of Wolex Polytechnic, said as at 8.30 am, she had not attended to any customer.

    “Before the advent of Blackberry and other smartphones, business was good. Now, with a mobile phone of about N2,500, one can take and send picture, chat, check email and do other things on the Internet. What has compounded the woes of the business is that most of the mobile operators give 10 megabytes (MBs) of data to their customers on purchase of N100 worth of airtime. This will last me for two weeks,” she said.

    She added that power supply and regular raid on cafes by security agencies have contributed to the near-demise of the business. The gradual migration of examinations and recruitment into the armed forces in the country to the electronic platform that ought to have boosted the income of operators is not doing so. “Tutorial centres and private schools buy laptop, biometric data capturing machine, printers and other things needed to register candidates online,” she added.

    According to a report, in 2003, the country had over 15,000 cyber cafes, with over 10,000 of them in Lagos State alone. At the twilight of 2007, this figure paled into insignificance to just about 1,002. Today, it is estimated that there are no fewer than 2,000 flourishing cybercafés in the country.

    To set up a cybercafé, one would require about N2.5 million for Internet connectivity, N150,000 monthly subscription fee; payment for rent, computers and other infrastructure that would make the place congenial for business transaction. An average cybercafé would need between 20 and 30 computers and other accompaniments, such as printers, scanners and generators. An independent Internet group in Britain revealed that Internet service providers (ISPs) in Africa lose over $400 million yearly for pairing of local traffic in exchange and international bandwidth provision. This colossal loss is incurred because most African countries do not have Internet exchange point (IXP) where ISPs can interconnect and share local traffic.

    Adeyeye recalled that he paid N450,000 to DPC to acquire its modem alone and another N30,000 monthly subscription fee. “How much you pay as subscription is a function of the number of computers you intend to use. When I was in business, I used only 10 computers and paid N450,000 and N30,000 monthly subscription fee,” he said.

    Like Miss Odukoya, he said the undulating power supply by the Power Holding Company of Nigeria (PHCN), constant harassment and extortion from security men, emergence of the Global System for Mobile Communication (GSM) and private telephone operators (PTOs) offering Internet service in their bouquets and the ear of unified licences have contributed to the near-moribund state the business in the country.

    Though the cost of browsing has gone down drastically from between N150 and N200 per hour to about N120 per hour, administrative cost continue to rise. Rent is reviewed yearly while the pump price of petrol underwent adjustments for more than a dozen times under former President Olusegun Obasanjo administration. Today, automotive gas oil (AGO) or diesel goes for N150 per litre in the Lagos area while petrol is N97 per litre.

    Adeyeye said: “You don’t get power supply from PHCN but they never stop bringing bills.” For his 40 kva generator, which runs on diesel, he spends N9,000 while the other two that use petrol would accommodate about 15 litres, costing N1,455; this lasts for only six hours before. The problem is that the generators pack up no sooner had they been bought. “I bought that generator for N80,000; used it for only one month and it packed up,” he lamented. His four generators have parked up, adding that he used them for only three months.

    Even when the generators work, there are always fluctuations in the signal of ISPs. Thus, for one week, the signal strength may be as low as 25 per cent. When this happens as it so often does, it is double jeopardy.

    The sudden surge in cyber crimes in the country did not help matters. The Managing Director, Brand Definitions, Richard Afolalu, said the level of cyber crime in the country has made law enforcement agents to see anyone browsing in a cybercafé as a fraudster. And contrary to the legal dictum of being presumed innocent until proven otherwise by a court, one is subjected to humiliation by barely literate, but perpetually inebriated policemen.

    “If you are unlucky to be arrested at a cybercafé or attacked by armed gangs who dispossess you of your cash and valuables, would you go there again? So, people who can afford modems and pay for data stay at home and do whatever they want to do,” he said.

    Cybercafés were real haven for young cyber criminals.By special arrangements, these criminals pay their way to have night access to the cafes where they send scam mails. “Whenever you see any cybercafé operating overnight browsing, it is with an intention to defraud. These boys, called Yahoo Boys, pay them to use the facility,” a security expert said on condition of anonymity.

    But an operator denied this, saying those with criminal intentions do it within the confines of their bedrooms. Though this brings more cash to mobile operators, it also attract international odium to the nation. E-commerce and transaction have remained low in Africa because of Internet fraud. In 2005, the Federal Bureau of Investigation (FBI), United States and the Economic and Financial Crimes Commission (EFCC) carried out an operation that led to the seizure of goods worth N319 million in Lagos alone while the EFCC made seized over $1 billion.

    Some years ago, officials of the EFCC and Association of Telecoms Companies of Nigeria (ATCON) agreed to discontinue overnight browsing. Besides, they were to run their services on membership instead of the pay-as-you-go format that is dominant in the country.

    The intervention of the EFCC was as a result of the enactment of the Advance Fee Fraud and other Offences Act 2006, signed into law on June 5, 2006 by Chief Obasanjo which transferred the policing of cyber crime to telecoms operators and also empowered the EFCC to enforce provisions of the act.

    Even with these challenges, the proprietor of Emesck Solutions who simply identified himself as Emeka, said hope is not lost. “Not many people use hand held devices. Students come in and do research. Turnover may be small, cybercafes will continue to fill the gap,” he said on telephone.

     

  • CBN, banks to review charges

    CBN, banks to review charges

    The Bankers’ Committee, comprising the Central Bank of Nigeria (CBN), all the Deposit Money Banks, Micro Finance Banks and the Nigeria Deposit Insurance Corporation (NDIC) is reviewing guidelines on new bank charges.

    The Director, Banking Supervision of the CBN, Mrs Agnes Tokunbo Martins while addressing journalists yesterday in Abuja, said no final decision has been taken on the guideline for new bank charges.

    Managing Director of Access Bank, Aig-Imokhuede, said bank charges cannot stop particularly when lenders are providing value. He however, said the charges will come down this year from N5/mill to N3/mil. He said Commission on Turnover (COT) will continue to reduce to allow bank charges to decline.

    He said that the Committee also decided, “no bank customer should pay Automated Teller Machine (ATM) charges, adding that bank customers who use ATM cards on machines other than their bank’s ATM machines, are not expected to pay any charges because, “that is the banks contribution to alleviate some of the problems that bank customers face. Besides, he said that the Committee directed that customers should take up such issue with any bank that charges them for using their ATM.

    The Managing Director of Zenith Bank PLC, Godwin Emefiele, said the Committee also reviewed the success of the cashless policy in Lagos and hopes that in due course; it will be replicated in other parts of the country. “But for now, we are concentrating on cluster locations where cash is used predominantly to see how the people can be convinced to go cashless. A date for the movement of cashless policy from Lagos to other parts of the country will be announced later,” he said.

    He stated that the Committee also discussed customer identity management to boost consumer credit to borrowers, saying the weakness in extending consumer credit to bank customers, “is that there is no data bank of information on customers.” Consequently, he said the Committee is setting up the customer identity management team that would help to build a data base.

    To this end, a bio-metric project where customers are assigned unique identification numbers and thumb prints taken, will soon commence, he said. He added, “once these information is taken, all banks will have access to that information irrespective of where the initial account is domiciled.  Because of the unique identification number, it will now be easy for banks to lend money to customers with good repayment records, or clean slate and those who fail in repaying their loans, will also be easily identified and refused further credit by the banks.”

    As part of the cashless project, Emefiele stated it was clarified at the meeting that the N150,000 third party cheque payments is nationwide. He said here will not be any cash payments on third party cheques for sums more than N150,000, and it is not restricted to Lagos.

    Aig-Imokhuede added that the banking industry is serious about capturing those outside the banking system through financial inclusion strategies. Consequently, he said the Committee has decided to use Borno as the pilot for financial inclusion, adding that if it works in Borno it will work anywhere in Nigeria. “We will concentrate efforts on Borno state, which was chosen because it is in the North East of the country with its social demographics in terms of poverty, “ added.

    Another reason for choosing Borno he noted is because women, youths and those in the rural areas do not have access to financial services, hence the decision of the committee to concentrate efforts in these areas.

    The financial inclusion strategy for Borno he said is near finalization. He said with a population of 5 million in 2010, only 280,000 had access to payments, with savings accounting for only 14 per cent of the population. He noted that less than two per cent had access to credit; pensions 2.9 per cent  and less than 1 per cent had access to insurance.

    The Bankers’ Committee he said, did not adopt the national averages for financial inclusion for Borno, becuase “the idea is to get the number of ATMs up from 95 today to 770 in 2020, branch networks from 72 bank branches to 120 in 2020  and Point of Sales (PoS) from less than 300 to just under 10,000 by 2020.”

  • Fashola sets October date for 10.4MW Power project

    Fashola sets October date for 10.4MW Power project

    Lagos State Governor, Babatunde Fashola has said the 10.4 Mega Watts Alausa Independent Power Project, (IPP) that will provide power for the entire Alausa Secretariat would be ready for commissioning by October, this year.

    Fashola stated this yesterday at the opening of the Lagos State Science and Technology, (LASTECH), Week, themed, ‘Promoting the Development of Science and Technology through Entrepreneurship Education,’ held at the Adeyemi Bero Auditorium, Alausa, Secretariat.

    Fashola, who was represented by the Commissioner for Works and Infrastructure, Dr. Obafemi Hamzat explained that “the different between developed countries and developing ones is science and technology and the rule of law.

    “In order to close this gap and achieve the development that we crave for, the state government embarked on the construction of Independent Power Projects, (IPP), to power the public infrastructure in the state. This was because the cost of providing power supply for public infrastructure through generating set is high.

    “Among the IPP already constructed by the state, is the Akute Power Project to provide power supply for the Akute Water Works and others. But it hasn’t stopped there. You can notice that in front of the state House of Assembly, we have dug that area to lay some cables. What we are trying to do is that by October this year, God willing, the whole of Alausa, will be off Power Holding Company of Nigeria (PHCN).

    “We are building our own source of power supply. What that gives us is the ability to determine our life’s and serve the residents of the state better.”

    “We know that power supply is the bases for development and that was why we started with the Power Projects. By the time we complete the power projects, it will aid the state’s broadband,” he added.

    Fashola also said the state government is almost completing the design of a broadband infrastructure for Lagos state, saying, the state is already working with two companies on the project.

    He said the essence of the broadband is to reduce the cost of broadband and to allow everyone to have easy internet, adding that every school in Lagos, hospitals, every infrastructure in the state will have effective access to internet.

    “The broadband is already on, but what is available in the country right now was provided by overseas companies. We need to get it to peoples’ homes and offices. The penetration in the country is still below-20 per cent. With the policy being introduced by the state government and with the infrastructure the state government is currently providing, there will be 100 per cent penetration and this will aid the knowledge based economy we are aiming at.

  • Prosecute loan defaulters, minister urges

    Prosecute loan defaulters, minister urges

    The Minister of Mines and Steel Development, Mohammed Musa Sada, has urged the prosecution of loan defaulters to serve as deterence to others.

    Sada, who spoke yesterday at the inauguration of the board of the Solid Minerals Development Fund, also urged the board to publish the names of future loan defaulters in national newspapers, and pursue defaulters through judicial action to recover unpaid loans.

    He asked the board to ensure that the right procedures are followed when disbursing loans to miners, assuring that the fund would be domiciled at the Central Bank of Nigeria (CBN ) to ensure that monies are not diverted.

    The establishment of the fund is a call on operators to ensure that the sector becomes bigger than the oil and gas sector in terms of revenue generation and employments creation, he said.

    The Minister who declined to disclose the amount domiciled in the fund, said the resources for the fund are expected from sums “appropriated for solid minerals development under the Revenue Act, any sum appropriated for solid minerals development under the Small and Medium Industries Equity Investment Scheme (SMIEIS); any funds received as grant, donations, foreign loans, bonds and long term swaps and any sums appropriated to it by the Federal Government’s budgetary allocations”.

    He tasked the board to provide funding for “the development of  both human and physical capacity in the sector; funding for geo-scientific data gathering, storage and retrieval to meet the needs of private sector led mining industry; equipping the mining institutions to enable them perform their statutory functions; funding for the extension services to small and artisanal mining operators; and provisions of infrastructure in mines land”.

      Meanwhile, the chairman of the board, Linus Adie thanked the government for establishing the fund to ensure the growth of the sector and for giving them the opportunity to serve the nation.

    Adie,  who was the Project Coordinator of the World Bank funded $120million Sustainable Management of Mineral Resources Project (SMMRP) pointed at the recent Audit of the by the Nigeria Extractive Industries Transparency Initiative who disclosed that the sector contributed N54billion to the federation account as an indicator that the sector is rebounding.

    While acknowledging that the development of the sector is still a challenge, he assured that the fund would be utilized to grow the sector.

    He thanked  the government for establishing the fund to ensure the growth of the sector and for giving them the opportunity to serve the nation.

    Other members of the board are Loreta Aniagulu, Sani Shehu Mohammed, Caleb Dare, Mahe Shehu Ahmed (Secretary), a representative each from the Central Bank of Nigeria (CBN), Bankers’ Committee and the Ministry of Mines and Steel Development.

  • NAMA begins area radar control

    NAMA begins area radar control

    Nigerian Airspace Management Agency (NAMA) has put in place the necessary logistics to commence area radar control in the country to further boost air navigation services and safety.

    Area radar control, is an air traffic control service, provided for airplanes flying within the Flight Information Region (FIR).

    NAMA’s Managing Director, Mazi Nnamdi Udoh, said a good number of air traffic controllers have been trained to handle this operation at both the Kano and Lagos area control centres.

    Addressing airline pilots in Lagos, Udoh   disclosed that Friday, February 22,  has been slated for the test run with the operating airlines, while April 12, 2013, is slated for its inauguration.

    While asking for the co operation of the pilots, the NAMA boss said the regulatory agency-Nigerian Civil Aviation Agency (NCAA) is being carried along to give approval for the immediate implementation of this air traffic service to airlines .

  • Why finance houses’ planned reform is delayed

    What is delaying the planned reforms for finance houses? It is being delayed by bureaucracy, The Nation has learnt.

    An insider at the Finance Houses Association of Nigeria (FHAN) said despite securing stakeholders’approvals in critical areas, especially in the drive to raise capital base from N20 million to about N100 million, the other elements are not yet in place.

    The source said stakeholders expect the reforms to be unfolded by the CBN before the end of this quarter. It is also expected that the reforms will expand the funding structure of the subsector to allow new investors into it.

    Findings showed that the CBN Board of Governors will release new prudential guidelines for the subsector that also include raising the capital base.

    Other policy issues, such as the appointment of Managing Directors will form part of the ongoing reforms in the subsector.

    The source said CBN is also considering developing a regulatory framework that will govern finance lease practice, institutionalise a “funding pool” to stimulate lending in the sub-sector and structure programme to address the subsector’s challenges.

    Other pending issues, such as withdrawal of licences of 47 finance houses whose liquidity were called to question last May, and funding for the subsector are also being looked into. The source said progress is being made now, unlike before when nothing was happening in the subsector.

    In a statement, FHAN President Samuel Durojaye said the reforms would transform the sub-sector to enable it to play increasing role in the financing value chain.

    He urged FHAN members to support CBN’s efforts at strengthening the regulatory environment by regular and timely rendering of statutory returns and reports, and the renewal of their licences yearly.

    Unlike banks, finance companies are not allowed to accept deposits. This means they can only source funds from shareholders, private equity companies, development finance institutions and other institutional investors.

     

     

     

     

     

     

  • Life policies outpace rest of industry

    Life insurance was the largest segment in the overall United States insurance industry in terms of gross written premium from 2007 through 2011 but the industry’s book of business shrank during that time, according to a new report from market research firm

    The report, “Life Insurance in the US, Key trends and opportunities to 2016” reviews both historical data and examines the industry’s prospects through 2016, according to a statement.

    The total written premium value of the life insurance segment decreased at a compound annual growth rate (CAGR) of 0.7 per cent during the review period. The report examines written premiums, incurred losses, loss ratio, commissions and expenses, and also analyses the various distribution channels for life insurance products, according to the publisher’s statement.

    A separate financial analysis prepared by SNL Financial reported that while industry revenue grew by eight per cent between 2010 and 2011, it has been nearly flat over the five-year period.

    Revenues totaled just over $815 billion in 2007, grew to $844.7 billion the following year, then slipped during the financial crisis before rebounding to $835 billion in 2011.

    Net income declined 8.8 percent between 2010 and 2011, and at $14.4 billion in 2011 was slightly less than half of 2007’s $31.6 billion, according to SNL Financial.

    The decrease is attributed to high levels of unemployment, which depressed the demand for group life insurance products and the uncertain economic environment, which resulted in a decline in gross written premiums in the term life category, researchers found. In addition, the low investment returns due to low interest rates represented losses to the earnings of life insurers.

    Other industry watchers have said life insurance companies face a broad array of headwinds, from the demographic to the financial. Accounting giant Ernst & Young’s 2013 industry outlook noted, “Insurers are competing in a market where average household expenditures on life insurance have declined 50 per cent over the past decade.” Deloitte, another large accounting firm, issued its own pessimistic US life insurance predictions for the year: “With millions still out of work or underemployed, and many more focused on repayingdebts, a lot of consumers have shorter-term financial priorities to worry about other than life or annuity protection.”