The Nation Newspaper

Category: Business

  • NCC plans virtual taskforce to prevent child abuse

    The Nigerian Communications Commission (NCC) will soon adopt measures to protect children from cyber abuses, its Chief Executive Officer, Dr Eugene Juwah, has said

    Juwah said the government would create the Virtual National Security Taskforce (VNST) to work with the Virtual Global Taskforce (VGT) to guide against terrorist recruitment and online predators.

    He said: “VNST will be created, which will work with ViGT. VGT is a law enforcement body which provides a 24/7 mechanism to receive reports about illegal behaviour or content from persons in the United States of America, Canada, Australia and Italy.

    Nigeria will join this global security platform most especially for counter-measures against terrorist recruitment and online predators,”

    According to him, the regulator will also ensure the adoption of a national policy on Nigerian child online terms and conditions based on common criteria and child acceptable use policies which all service providers must subscribe to, in addition to the industry’s service providers general terms and conditions. He said this is vital to motivate industry responsibility in the role and importance of communicating the Nigerian child in terms of clarity, awareness of shared responsibility.

    He stressed the need for industry and regulators’ partnership and collaboration on the classification and rating system of internet content and services using most appropriate age-based rating system, while benchmarking internet content rating standards in the country against universal system of rating.

    “Nigerian Broadcasting Commission, and the industry they regulate shall work together in this direction in the overall interest of Nigeria Child online,” he added.

     

     

     

     

     

     

     

     

     

     

     

     

     

  • Samsung to build more engineering academies

    Global giants in mobile phones and household electronic products, Samsung, is to build more engineering academies to address technical and engineering skills shortage in Nigeria.

    Managing Director, Smasung Electronics West Africa Limited, Bravo Kim, told The Nation that building the Samsung Electronics Engineering Academy (SEEA) in the country further demonstrates the firm’s commitment to building a workforce of technicians and experts to fulfil the Federal Government’s plan of creating decent jobs, especially for the young.

    “We already have one SEEA in Lagos. The last one, which we went to do the ground breaking ceremony was in Ekiti, Ekiti State. So as long as any government shows interest, Samasung will partner with them. This year, we hope to have the one in Ekiti to join the one in Lagos. Every year, we like to establish one or two in each state,” he said.

    In 2011, Samsung launched its SEEA in South Africa, Kenya and Nigeria as part of the company’s broader goal to develop 10, 000 Electronics Engineers across the continent by 2015.

    The SEEA provides hands-on, vocational skills training for Grade 10-12 students and opening up skilled, well-paying job opportunities for its students.

    According to him, the Nigerian market remains the largest on the continent. He expressed pleasure in the fact that the economy is growing, adding that the firm would partner with the government and other stakeholders to ensure that Samsung keeps growing with the market.

    Reviewing its activities last year, he said: “This (last) year, the economic situation has not been so good. But we are growing. In mobile phone (segment), we made about 60 per cent compared to last year and in our consumer electronics, depending on the product, there is some difference in general.”

     

     

     

     

     

     

     

     

     

     

  • CBN reassures on financial inclusion strategy

    CBN reassures on financial inclusion strategy

    …Number of ‘unbanked’ adult population to drop by 20%

    The Central Bank of Nigeria said it intends to reduce the country’s unbanked population by 20 per cent before year 2020.

    The plan is part of the apex bank financial inclusion strategy aimed at ensuring greater participation in the nation’s financial sector.

    The percentage figure of Nigeria’s unbanked population currently stands at 46.3 per cent.

    The Director, Banking and Payments System Department, CBN, Mr. Dipo Fatokun, stated this on Saturday, while presenting a paper titled: “Mobile Money in Nigeria: Prospects, Opportunities and Challenges,” at the Institute of Chartered Accountant of Nigeria, Ikeja District, meeting.

    He said CBN will work to ensure success of the strategy.

    According to him, a survey carried out in 2008 by an international agency, Enhancing Financial Innovation and Access (EFInA), on access to financial services in the Nigeria revealed that banking penetration was relatively low with only 21 per cent of adult population in the country having access to banking services, while 74 per cent had never been banked.

    The remaining five percent, previously banked, in other words, had left the banking system, Fatokun added.

    Reasons adduced for lack of bank accounts by many are- proximity to financial service outlets, product complexity and cost of service.

    He said, “The concerns for financial inclusion are valid as no nation can progress and develop if majority of its population is under banked or has no access to financial services.

    ‘A good example is Kenya where it has been proved that a half percentage increase in their national Gross Domestic Product growth is attributable to mobile money transactions.

    “Indian policy makers too, have embraced the importance of mobile money as the best solution for financial inclusion and economic growth.

    “A study on the impact of financial access on poverty in the country carried by Economists, Robin Burgess and Rohini Pande estimated that one per cent increase in the number of rural locations banked; par capital reduced rural poverty by 0.42 per cent and increased economic productivity by 0.34 per cent.

    “With the above scenario in mind, and to promote financial inclusion, the CBN identified mobile telephony as one of the veritable channels through which the unbanked can be provided easy access to financial services at affordable cost.

    “The need to create an enabling environment for all participants saw the development of the Mobile Payments Regulatory Framework in 2009, to guide the industry players

    The overriding vision was to achieve a system that is nationally utilized and internationally recognized – a Nigerian system of mobile payments.”

     

     

  • Banks face rising risks over cheque truncation

    Banks face rising risks over cheque truncation

    The commencement of cheque truncation scheme in the country’s financial system will raise banks’ transaction risks, The Nation has learnt.

    Sales Manager, Sybrin Systems Limited, Daniel Parreira, who confirmed this development in an interview, said banks should invest in sophisticated payment solutions, adopt fully integrated management systems as well as anti-fraud mechanisms.

    Sybrin Limited, a software technology firm based in South Africa, provides automated cheque truncation and other payment solutions among Africa’s leading banks, clearing houses and corporations.

    According to him, the firm is doing a pilot scheme in many of the banks and will also be discussing with the Nigeria Interbank Settlement System (NIBSS) on its operations. Cheque truncation entails that the clearing cycle will reduce by one day, such that a customer can deposit a cheque early on Monday and value is obtained on Wednesday as against Thursday of the same week.

    He said some forward-looking banks were getting set to decentralise the cheque truncation processes to their branches, adding that such steps would further reduce the pressure on the clearing centres.

    The Central Bank of Nigeria (CBN), after due consultation with the banks, issued fresh guidelines to assist banks clear their cheques online. The policy is expected to provide for the regulation and management of cheque truncation in Nigeria with a view to reducing cost and days of clearing instruments. It was also meant to articulate the rights and responsibilities of presenting and paying banks in the Cheque Truncation System.

    A circular from the CBN said the policy will provide minimum technical and operational standards for cheque truncation as well as facilitate the implementation of an effective and efficient payment system in the country.

    The apex bank said it acted on the powers conferred in it in Section 47 of the CBN Act No. 7 of 2007. Here, the CBN was charged with the clearing of cheques, credit instruments for banks and for this purpose to organise in conjunction with other banks, clearing houses in such places as it may consider necessary.

    The rules apply to clearing and settlement activities in the Nigeria Bankers Clearing Houses, which practise cheque truncation system. However, where there is a conflict between the provisions of the cheque truncation guidelines and revised Nigeria bankers’ clearing house rules, the former would prevail.

    E-Clearingotherwise known as cheque truncation involves stopping the physical movement of the cheque and replacing the physical instrument with the image of the instrument and the corresponding data contained in Magnetic Character Ink Character Reader (MICR) line.

    The cheque details are captured, typically by the bank presenting the cheque or its clearing agent and electronically presented in an agreed format to the clearing house for onward delivery to the paying bank for payment.

    Unlike the more common form of presentation where a cheque, a truncated cheque is stored by the presenting bank electronically.

  • Customs agents seek regulatory powers for NPA

    Customs agents seek regulatory powers for NPA

    The President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr Lucky Amiwero, has said if the Federal Government is serious about generating employment for the people, then the ports system must be redesigned to give the Nigerian Ports Authority (NPA) regulatory and operational powers.

    Amiwero told The Nation in Lagos that if the nation’s the ports system is redesigned, it is capable of creating more than two million jobs directly and indirectly.

    He said the government’s emphasis should not be on how much it could get from the ports as it is doing by giving revenue targets yearly to the Nigerian Customs Service (NCS), but on how it could provide employment through the ports which, he said, holds a lot of prospect.

    Amiwero, who is Managing Director of Eyis Resources Limited, said the NPA is no longer employing as its counterparts in other countries, such as Ghana, are doing. This, he explained, was as a result of the faulty port concessioning exercise carried out over six years ago that saw the ports being given to foreigners.

    “The ports were given to foreigners and a few local business people to manage,” he said, adding that NPA no longer employs because it has nothing doing at the ports while all the terminal operators have only employed a few thousands.

    Comparing the Ghanaian port concessioning with that of Nigeria, Amiwero said when Ghana concessioned her ports, it reserved 25 per cent of ports operations to Ghana Ports and Harbour Authority (GPHA), while in the Nigerian model, NPA has no regulatory powers over the concessionaires.

    He said the government imports are handled by the Ghana Port and Harbour Authority while in Nigeria, all sensitive government imports are handled by the concessionaires, arguing: “What we have in Nigeria are business entities that have turned the ports into a gold mine.”

    Amiwero also lamented that the trade component of the country has been taken over by the multinationals, who are now involved in all aspects of ship supply mechanism, a practice not allowed in other countries.

    The issue, he added, had not been addressed and until that was done, the real benefits from our ports would continue to elude us.

  • Nokia chief laments existence of fake phones in Nigeria

    Nokia chief laments existence of fake phones in Nigeria

    Nokia’s Vice-President, West and Central Africa, James Rutherfoord, has decried the preponderance of fake and substandard phones in the country.

    He lamented that it has become a big monster that has become difficult to tame.

    Rutherfoord, who spoke with The Nation in Lagos, said the firm was, however, collaborating with the mobile phone operators and the relevant agencies to curb the menace, adding that the firm would step up campaign aimed at education its customers in the country.

    “Presence of fake mobile phones is a big problem in Nigeria but we have employed multi-pronged approach to it. One is to educate the consumer on all our materials. We put our warrant stickers on it and also give them a careline where they can send SMS to check if their phone is fake or not. We educate our partners and our dealers in the market. We have also, on more than one occasion, trained them and show them on how to differentiate the fake and the genuine from the pack. So we have a number of initiatives against fake products in the market,” he said.

    According to him, the only security agency it is partnering with is the Nigeria Customs Service (NCS), the agency responsible for checking the goods that come to the country from abroad.

    “We don’t really have partnership with security agents. The important agency to work with is the customs to help check the (inflow of the) devices into the country. So, we feel that is the point at which we need to work.

    “On the other side, we are working with the operators to try and see what they can do about fake devices on their network because (poor service too have been traced to fake phones),” he said.

    He added that the firm was collaborating with the Federal Government, through the Nigerian Communications Commission (NCC), to fight the menace through the registration of mobile devices in the country.

    “We also trying to collaborate with government, specifically with the NCC on the registration of all devices in Nigeria,” he said.

  • NSE warns against market infractions

    THE Nigerian Stock Exchange (NSE) has warned against market abuses and infractions, saying perpetrators of illegal activities will be tracked down and be made to face the wrath of the law.

    Its Chief Executive Officer, Mr Oscar Onyema, said market operators should know that the NSE is closely monitoring activities at the market and would detect any infraction or abuse of rules.

    “We are watching those perpetrating the crime. Let me use this opportunity to tell anybody that wants to manipulate the market that we are watching very closely and if we catch you, we will come after you with everything we have,” he said.

    Shedding light on the effort put in place to protect companies listed on the exchange from take over, Onyema said a surveillance department was created to monitor the affairs of the trading floor.

    Explaining the nature of their job, he said they do a lot of work that shouldn’t be known to all, except those guilty of the offence. “They will come after you,” he said.

    So far, he said the management is satisfied with the number of cases that were brought because the people that were perpetuating it were not aware they were being watched.

    The market, he said, should be a level playing ground for all. “Things like insider trading and general market manipulation will not be tolerated in this market,” he said.

    Meanwhile, on the sustainability of the recent market growth, a spill over of 2012, he said that an efficient market really needs to take into consideration many different varying objectives, trading strategies and investment philosophy.

    In terms of raw value, he said for the volume and value to be sustainable, the market needs more activities. “In the market liquidity and depth is something we are trying to build,” he said.

    On pricing, he said the sectoral indices are reflective of the fundamentals of the listed companies’ shares. Most sectors, he said that were not doing well, it reflected the decrease in their returns; such companies in the insurance and oil and gas sub-sector. Those that are doing very well as its reflected in their financial statements and other indices, are the banking and consumer goods among others. The indices showed that they are doing very well.

    However, he said the position of prices in the market and the index showed that there is a wide margin of progress compared to the performances of the 2008 or the previous years.

    Supporting his views, he argued that the companies in the market are better than what the market looked like years back.

    His words: “Qualities of companies listed on the floor of the exchange today, are virtually higher than what used to be there. We have tried to clean up the market to ensure the financials of companies listed are there. Also that those coming into the market are good quality companies.”

    Meanwhile, the return of initial public offerings (IPOs) to the capital market has been described a major way to confirm the comeback of the market.

    Onyema said though the management of the NSE has been satisfied with the secondary market performance, it cannot celebrate the full recovery of the market until the IPOs are back in the market.

    He said the market need the active support of the government to make it necessary to get IPO market return to complement the growth the market has been enjoying lately.

    Analyst attributed the lack of interest in approaching the market to the low level of confidence on the part of investors. As such, advised regulators to step up the campaign, sensitising investors that will attract more companies to list and also to float IPOs as doing so will help sustain the market on the part of full recovery.

    It was gathered that over 20 companies showed interest and agreed in principle to float IPOs but could not because of the confidence level as it will be a waste of time and money to come to the market with such offer when most of the potential investors are not willing to participate.

    A PFA analyst expressed worry over the equity growth in the stock market, even as he describes the appreciation as a pointer to a bubble that may occur in the securities market.

    “In 2012, only very few stocks are responsible for the growth witnessed in the market. We have stocks that are presently with a PE ratio of 40, which was the point we got to in 2008 before the meltdown. It seems we are approaching that point again. Most of these stocks are those bought by the foreign funds injected into the capital market through a handful of stock brokers. My advice is to diversify the market as much as possible”, he said.

    He said for a market that still needs to be deepened, there ought to be public offerings which are the main driver of every thriving exchange, as against the secondary window of trading in shares which the NSE has been known for in the last four year.

    It would be recalled that after the meltdown from 2008 wherein investors lost investment worth about N9 trillion or 70 per cent value of the market, no company has come forward to raise fund from the market, thereby reducing transaction in the primary segment of the market.

    According to the NSE, local investors contributed 44.3 per cent of total market activities. The percentage has improved from 40 per cent to 44 per cent while the foreign investors reduced to 56 per cent from 60 per cent.

    “Local investors started coming back to the equities market, accounting for 44.3 per cent of total market activity as at November 2012, a 38.38 per cent increase from 2011 performances”.

    Prior to this time, it has been reported that Foreign Investors contributed about 70 per cent of daily trading value of equities at the Nigeria’s Exchange.

    According to Onyema, “the number of listed companies and equities at the end of 2012 were 194 and 197. While the market for IPOs and new equity listings was flat – no IPOs and two new listings on the Main Board, four companies were delisted FinBank Plc, through its acquisition by FCMB Plc, and Ablast Products Plc, Udeofson Garment Factory Plc and Hallmark Paper Products Plc, as a result of non-compliance with the Exchange’s post-listing standards.”

    Three banks were also delisted and relisted in compliance with the holding company structure mandate by the Central Bank of Nigeria (CBN), following the repeal of the Universal Banking Guidelines, in a move to restore regulatory and corporate governance soundness in the Nigerian financial system”.

  • Consolidated Breweries lists benefits of merger

    Chairman, Consolidated Breweries Plc, Prof. Oyinade Odutola-Olurin has assured that the business combination between the company and its two subsidiaries – DIL/Maltex and Benue Brewery – would lead to greater benefits to shareholders, employees and all other stakeholders.

    Addressing shareholders of the company at a court-ordered meeting for the business combination, Mrs Odutola-Olurin said by creating a stronger, more efficient and more profitable organisation, it is hoped that the merger will create better opportunities for all stakeholders in the company.

    She, particularly, assured staff of the companies that the merger would not result in job losses as the business combination was not intended to jeopardise employment of any employee of Consolidated Breweries, Benue Brewery or DIL/Maltex.

    According to her, all contracts of employment of employees of Benue Brewery and DIL/Maltex shall be transferred to Consolidated Breweries and such employees shall become employees of the enlarged Consolidated Breweries Plc. But where any employee of Benue Brewery or DIL/Maltex does not wish to continue in the employment of the enlarged Consolidated Breweries, after the mergers, such employee would be entitled to obtain the terminal benefits based on his or her contract of service.

    Shareholders of Consolidated Breweries Plc gave their nods to the scheme of merger with Benue Brewery Limited and DIL/Maltex Nigeria Plc to improve operational efficiency, expand growth prospects and maximise value for all stakeholders.

    Mrs Odutola-Olurin noted that prior to the court-ordered meeting, DIL/Maltex and Benue Brewery were subsidiaries of Consolidated Breweries Plc and engaged in the same line of business as Consolidated Breweries adding that Consolidated Breweries owned 97.83 per cent of the equity in DIL/Maltex and 100 per cent of the equity in Benue Brewery.

    According to her, the primary objective of the mergers is to streamline the management, corporate governance and operations of Consolidated Breweries Plc and its subsidiaries.

    “It’s envisaged that the mergers will lead to administrative efficiencies, cost reductions and operational synergies; and be beneficial to all stakeholders of Consolidated Breweries,” Mrs Odutola-Olurin said.

    She further explained that the post-merger entity would capture positive economies of scale and realise significant synergies through enhanced operational and administrative efficiencies, a streamlined supply chain, and a unified service delivery platform.

    Speaking in the same vein, the Chairman of DIL/Maltex Nigeria Plc, Chief Samuel Bolarinde and his Benue Brewery counterpart, Steven Ameh, at separate meetings, noted that the merger schemes would provide an opportunity for Consolidated Breweries to better use its assets and further streamline its operations. The combination of the assets of Consolidated Breweries and DIL/Maltex and Benue Brewery, the duo pointed out, is expected to increase Consolidated Breweries’ manufacturing capacity while streamlining overlapping costs, resulting in increased earnings.

    ”Significant operational synergies will be generated from the optimisation of key operations, particularly, the manufacturing, overall management, administration and accounting functions”, said Steven Ameh, stressing that the merger would, therefore, result in improved returns to the shareholders and employees while customers would also benefit from access to a wider operational platform.

  • PenCom unveils guidelines for state pension bonds

    THE National Pension Commission (PenCom) has introduced new requirements for states wishing to access pension funds for investing in state bonds.

    According to the Commission, such a state must first enact a law to establish the Contributory Pension Scheme, which must give its contributions the same priority as salaries.

    The law should also address every inconsistency observed by the National Pension Commission in its review.

    In a circular signed by the General Manager, Public Sector Pensions, Mrs G. E. Usoro, it said such a state must establish a state pension board and a local government pension bureau to coordinate the implementation of the contributory pension scheme and other related matters in the state.

    Besides, the state should open retirement savings accounts with PFAs for employees that in the Pension Scheme in the state, and ”fully remit both employer and employee pension contributions into the employees’RSAs for a minimum of six consecutive months from the date of commencement of the scheme in the state’’.

    The Commission’s new position also indicated that such a state must “secure a group life insurance cover that guarantees a minimum of 300 per cent of the yearly total emolument of the employees covered by the Contributory Pension Scheme.”

    PENCOM’s requirement said the insurance companies engaged for this purpose must be eligible life insurance firms, licensed by the National Insurance Commission (NAICOM) and duly certified by the National Pension Commission as being compliant with the provisions of the Pension Reform Act 2004.

    Other requirements, according to the circular, are that states wishing to access the pension funds: “Must have consistently funded the Retirement Benefits Bond Redemption Fund Account, with the Central Bank of Nigeria, or any PFA from the date of commencement of remittance of pension contributions by the state.

    “Must execute an Irrevocable Standing Payment Order (ISPO), to mandate the Accountant-General of the Federation (AGF) to deduct at source and remit monthly pension contributions from the state’s share of the Federation Account Allocation to the state, in line with the guidelines of the Commission.”

  • Operators get new deadline on N1t target

    INSURANCE operators have up to 2017 to realise the N1 trillion target set for them, the Commissioner for Insurance, Fola Daniel, has said.

    He spoke at a briefing in Lagos.

    Daniel said: “Our people don’t trust insurance. We’ve done a considerable amount of housekeeping to make sure the companies respect the rules,” adding that the value of insurance contracts would rise from N300billion to about N1 trillion ($6.4 billion) in four years

    He said the industry would contribute about three per cent to the Gross Domestic Product (GDP), while insurance penetration would increase to 22.5 per cent from 10 per cent.

    He said compulsory motor-vehicle insurance, which makes up most contracts, would hit about 10 per cent by 2017; life insurance would constitute seven per cent, general business insurance, three per cent and petroleum companies’ insurance, 2.5 per cent.

    Daniel said oil and gas businesses would continue to contract international companies to insure their Nigerian operations as the capacity of local insurers is still limited.

    But Managing Director, Riskguard Africa Nigeria Limited Yemi Soladoye, said the industry failed to realise the target because of its inability to start the implementation of the Market Development and Restructuring Initiative (MDRI) in 2009, which was designed to prop up the projection.

    He told The Nation that the projection was part of the industry’s four-year strategic plan, adding that there was no way the target would have been achieved with the take-off of the implementation.

    On the expection from the insurance industry in the new financial year, the Riskguard chief said Nigerians need protection from insurers, adding that it is the duty of insurance companies.

    He said insurance companies are not living up to expectations as they have not been able to provide adequate protection to the public.

    He said: ”To me, it is a national duty that insurance companies should give us financial protection in this country, but that is lacking.”

    He said the industry has not been able to meet the needs of the public. He frowned at the performance of the industry, adding that what the industry records is minimal.

    He said: “We do not have what I would call real insurance companies in Nigeria. What we have are small firms. What the industry writes as annual premium income is not up to a premium that a branch or agency of a company writes in a normal insurance setting.

    ‘’For example, look out the results of Fortune 500, American Insurance Group (AIG) and more. These are companies that are generating about $250 billion premium each year. Convert that to naira, it is about N4 trillion.

    “Two years ago, an analysis was done on the 500 biggest companies in Africa; looking at the insurance companies on the report, there were 20, and none is from Nigeria. So, we are not there.

    ‘’A small country like Mauritius, with a population of 1.2 million generates 60 per cent of the premium income of Nigeria.”

    He said when the right things are done and operators have the vision to create a big customers service-oriented company, the industry would take its rightful place.