The Nation Newspaper

Category: Business

  • Arik Air flies 10.2m passengers in six years

    Arik Air flies 10.2m passengers in six years

    Arik Air has carried over 10.2 million passengers in the six years of its operation, giving it 65 per cent market share of domestic traffic, the Managing Director of the airline, Chris Ndulue, has said.

    At a press conference yesterday to commemorate the sixth anniversary, Ndulue announced plans to build an academy in Benin-City, and expand its maintenance hangar in Lagos.

    He said next year, the airline will expand its network.

    Ndulue called on the Central Bank of Nigeria (CBN) to review the policy of not giving out loans to domestic carriers. He said investment in aviation is capital intensive, and it could only be done through offshore financing.

    He said for the required investment in aviation, the carrier would get loans from external sources to buy more aircraft.

    He disclosed that the airline paid N8.7 billion to aviation fuel suppliers and N25.78 billion as interests on bank loans to finance aircraft purchases.

    While calling on the government to assist domestic operators, he said it was not doing enough. He urged it to, aside its proposed removal of duties on aircraft and spares, create a level playing field for private investment to thrive.

    He said the airline has secured partnership deal with Lufthansa Technik to build a wide body aircraft in Lagos that other airlines could benefit from, adding that it would serve as a pool for manpower development.

    He described Arik Air as a true flag carrier, with its expansion of connecting every capital in Nigeria to Abuja, with its over 23 new generation aircraft.

    He explained that in the very soon the airline will operate flights from Ghana and Sierras leone to London.

  • ExxonMobil donates N80m to flood victims

    ExxonMobil donates N80m to flood victims

    Mobil Producing Nigeria Unlimited(MPN) and Esso Exploration and Production Nigeria Limited (EEPNL), affiliates of Exxon Mobil Corporation, have donated $500,000 (about N80 million) to victims of flooding in five of the worst hit states.

    A statement by General Manager, Public & Government Affairs, Paul C. Arinze, said ExxonMobil affiliates in Nigeria are partnering with the Nigerian Red Cross to provide relief to Akwa Ibom, Rivers and three other states, that are seriously affected by the disaster.

    “Our sincere thoughts are with the people of Nigeria where hundreds have lost their lives and millions more have been impacted by this disaster,” said Mark Ward, Lead Country Manager of ExxonMobil Affiliates in Nigeria.

    “It’s our hope that our support for the Nigerian Red Cross efforts will help to address the needs of those affected by this tragedy,” he added.

    Millions have been severely affected as floods have ravaged homes, farmlands, schools and health centres, leaving many without food, drinking water, shelter, and basic amenities. There is also a high risk of epidemics breaking out in the affected areas.

    “We are extremely grateful to receive these funds, as they will allow us to help those most affected by this disaster,” said Umar Mairiga, Disaster Management Coordinator, Nigerian Red Cross.

    “Using our network of volunteers, these funds will be used to support activities that will help people recover from this emergency,” he added

    ExxonMobil places the highest priority on the preservation of human life, and is committed to the safety and wellbeing of the Nigerian people. Together with the Nigerian Red Cross, ExxonMobil affiliates in Nigeria are committed to providing disaster relief assistance in the affected states, Arinze said.

  • CBN tasks banks on Customers’ due diligence

    The Central Bank of Nigeria (CBN) has advised banks to conduct thorough customers’ due diligence during transactions that are above regulatory designated threshold.

    It urged the banks to ensure due diligence when information about customers have expired to avoid unwholesome practices.

    The Acting Director, and Regulation Department, CBN, Mr Chris Chukwu, said the measure is necessary to protect depositors’ fund.

    At a stakeholders’ forum in Lagos, Chukwu said CBN had made the safety of the industry a priority through certain regulatory frameworks. The apex bank, he said, was concerned about the status of the ownership of the banks because the issue is critical to the wellbeing of the industry.

    He said CBN conducted investigations on who is buying into the banks to ensure that they are not of dubious characters.

    Chukwu said: “Banks are required to maintain all records of transactions (local or international) or ( on-going or terminated) for at least a minimum of five years, following the completion of the transactions. Also, they should carry out thorough investigations on their customers, irrespective of their status. The aim is to put the industry on a sound footing, and make it competitive with others globally”.

    He said any bank that failed to apply customers’ due dillgence measures would not be permitted to open accounts, enter into business relationship or perform transactions with customers.

    Banks, he said must conduct due diligence on non-resident customers, arguing that the issue would help in knowing a lot about customers who are hardly seen.

    He said CBN is insisting that the banks must adopt a staff training policy, adding that the idea would help the workers to know the importance of customers’ due diligence.

  • ‘Premiums record growth, profits dwindle’

    The Chairman, Union Assurance Company Limited, Mrs Olufunke Osibodu, has said performance of the insurance premiums globally has been impressive.

    She, however, added that underwriting profitability has been adversely affected by increased claims.

    She adduced reasons for the development, saying the global economic situation, the low interest rates environment, particularly in the more advanced insurance markets, poor investment yields and increase in claims, among others, were partly responsible for it.

    Olufunke told The Nation that insurance premiums were growing, as insurers gradually restore underwriting capacity to pre-crisis level, while building lager capital buffers after two years of sluggish growth following the global economic crisis.

    She said the robust economic recovery and reforms, especially in the developing economies continued to fuel strong rebound in premiums across a broad spectrum of the insurance value chain.

    She listed one key challenge for the industry globally as the low interest rate environment, particularly in the more advanced insurance markets, adding that underwriting profitability has been adversely affected by increased claims. ‘’This has necessitated increase in premium rates across most developed economies, she said

    “In Nigeria, what is prevalent is a strong buyer market and this she said has brought about insurers’ declining renewal of some businesses owing to dwindling underwriting profits.

    “The greatest downside risk to premium growth in Nigeria remains the insufficient awareness of the operations of and structure of insurance policies as well as their significance,’’ she said, adding that political risks have waned in the aftermath of the general elections in April 2011, but the increase in sectarian and ethnic violence in the country continues to heighten security fears and could slow down Foreign Direct Investment (FDI) in Nigeria.

    ” The regulatory landscape for insurers globally is shifting towards more robust risk-based supervision. The Solvency 11 policy is a renewed focus on Insurance and capital adequacy, adding that the purpose of the new supervisory regime is to ensure a clearer picture of an insurer’s solvency. This, she said, will be achieved via the introduction of risk weighted capital charges similar to the banking Industry Basel 11 framwork.

    Olufunke expressed hope that with the introduction of the new supervisory regime, the expected cover for both the underwriting and investment risks will be covered.

    The policy will unearth the undercapitalisation in the industry, especially in emerging markets, such as Nigeria with relatively shallow financial markets, she said.

    Issues of transparency are currently being tackled through regulatory guidelines on corporate governance, enterprise risk management and more inclusive financial reporting model provided by IFRS, she added.

  • Lawyer flays proposed composition of CBN Board

    Lagos-based lawyer, Chukwuemeka Eze, has opposed the proposed amendment of the Central Bank of Nigeria (CBN) Act.

    In a statement, Eze, said the business of the CBN is too serious to be handed over to a Director in the Ministry of National Planning, Director of Federal Inland Revenue Service, among other nominees as proposed in the amendment.

    He said appointing a former CBN Governor as chairman of the Board may create problems that would polarise the Board. “A former CBN Governor may have ‘analogue’ ideas while the sitting CBN Governor may have ‘digital’ ideas. The latter may be hampered by the former who may refuse to acknowledge the rapid changes manifesting in global economic trends,” he said.

    He said the power of the National Assembly to appropriate public fund of the Federation is derivable from the Constitution of the Federal Republic of Nigeria, 1999 as amended. Various sections of the Constitution confirm this position. For instance, section 80 (3) of the Constitution provides that: No moneys shall be withdrawn from any public fund of the Federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those moneys has been authorised by an Act of the National Assembly.

    He said that Section 81 (1) and (2) of the Constitution makes it mandatory for the president to lay before the National Assembly budget estimates through an Appropriation Bill before money could be expended from the Consolidated Revenue Fund of the Federation.

    He, however, said the Act can be amended, if need be, to promote accountability and transparency.

  • ICSAN chief decries corruption in Nigeria

    ICSAN chief decries corruption in Nigeria

    THE President of the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN), Mr Olatunde Busari, has decried the large scale corruption in the country.

    Busari, who made the remark at a dinner as part of the Annual Conference of the Institute in Abuja, described corruption as a hydra-headed monster, which kept rearing its head in all the organs and agencies of government.

    “The malaise further ridicules the system to the extent that even when culprits are apprehended, it does not appear that we have effective machinery for thorough investigation, prosecution and sentence according to the law”, he said. The ICSAN boss said there were various examples of private and public officers that engaged in corrupt practices and were today walking the streets as free men. According to him, this gives an impression that corruption is rewarding in the country.

    Busari said to create the desired environment for investment, the government must develop effective legal regime and structures strong enough to apprehend, investigate and prosecute corrupt officers in Nigeria.

    On energy, he advised the Federal Government to set the necessary machinery in motion to ensure transparency and efficiency in the on-going reform in the power sector.

    The ICSAN boss said the absence of infrastructure in any economy was inimical to business investment and sustenance.

    ”It is inconceivable that Nigeria cannot boast of 24- hour uninterrupted power supply nationwide despite of the nation’s over 50 years of independence”, he said.

  • ‘Dollar accounts for 82.1% of forex holdings’

    The currency composition of foreign reserves showed that the holdings in United States dollar are $29.09 billion, constituting 82.1 per cent of the total during the first quarter, according to data from the Central Bank of Nigeria (CBN).

    Other currencies listed in the basket include Euro which accounted for 6.9 per cent; Pounds, 2.2 per cent, Chinese Yuan, 1.4 per cent and Saudi Riyal, 7.2 per cent.

    The apex bank said composition of Euro at 6.9 per cent is still high considering the prevailing economic conditions in the Euro-Zone area and should be diversified to other relatively stable currencies. The Japanese yen accounted for 0.05 per cent while holdings in Swiss franc (CHF) were 0.004 per cent.

    The aggregate demand for foreign exchange by the authorised dealers consisting of Wholesale Dutch Auction System (WDAS) and Bureau De Change (BDCs) operators during the period under review stood at $7.18 billion, indicating a decline of 0.74 and 28.26 per cent when compared with the levels recorded in the preceding quarter and corresponding quarter of 2011.

    This development was traced to the on-going reform in the oil sector, which is aimed at ensuring efficient allocation of resources through the liberalisation of the downstream oil sector. It said a total amount of $7.05 billion was supplied in the review period consisting of $5.38 billion and $1.67 billion to the WDAS and BDC operators.

    This indicated a decline of 18.21 per cent and an increase of 3.37 per cent when compared with the corresponding quarter of 2011 and preceding quarter.

    The data showed total of $12.14 billion was utilised during the review period consisting of $7.74 billion and $4.39 billion for visible and invisible trade. This represented 63.80 and 36.20 per cent. This pattern of domination by visible trade was evident during the three quarters analysed.

    Analysis of foreign exchange utilisation by sectors revealed that $7.74 billion or 63.8 per cent was spent on importation of various items into the country during the quarter. The importation of oil, industrial, food and manufactured products gulped 30.0, 25.0, 21.0 and 15.0 per cent of the total amount utilized for visible imports.

    The importation of food items at 21.0 per cent is exceptionally high and should be discouraged through huge investment in the agricultural sector by the government, private sector or through public-private partnership.

  • FirstBank sponsors Team Naija

    FirstBank of Nigeria PLC will be sponsoring Team Naija to the finals of the global Cyberlympics in Miami, United States.

    In a statement, the bank said information security involves the protection of information and information systems from unauthorised access, use, disclosure, disruption, modification, perusal, inspection, recording or destruction.

    The Global CyberLympics is an international cyber security competition that seeks to build capacity across nations, create awareness for global cyber defense and promote global peace.

    Team Naija and Team Broken Cipher of Sudan will represent the Africa and compete against teams from other continents at the finals which kicked off yesterday. Team Naija’s four-man contingent comprises Abolusoro Oluboyede David (FirstBank staff), Nasiru Abimbola Jaiyeola (FirstBank staff), Oluseyi Akindeinde (Digital Encode) and Adewale Obadare (Digital Encode).

    FirstBank’s spokesperson, Mrs. Folake Ani-Mumuney, said the bank considers the opportunity to support Nigeria’s contingent to the CyberLympics as another platform to promote youth empowerment and contribute to the growth of information security in the country.

  • NIMC, banks disagree over biometric data

    NIMC, banks disagree over biometric data

    THE National Identity Management Commission (NIMC) is not happy with banks’ decision to continue to provide their biometric data base.

    The decision would cause waste of funds, duplication of efforts and financial exclusion, NIMC said.

    It said banks would increase their cost of operations, if they insisted on providing the database themselves.

    NIMC spoke against the backdrop of arrangement for getting the biometric data of all Nigerians.

    It’s Chief Executive Officer, Chris Onyemenan, said it would amount to waste of funds for banks to embark on the exercise since the Federal Government has budgeted money for it.

    He said: “Already, banks have a lot of costs on their neck. So, if they go ahead with decisions to provide biometric database for their operations, the development would stretch their cost of operations further. This amounts to a waste of funds because the Federal Government had committed huge amount of money for the production of biometric data of Nigerians vis-a-vis the management of the NIMC.”

    Besides, it would amount to duplication of efforts since NIMC is charged with the responsibility of integrating the databases of the private and public sectors, asking: Why should banks provide their own biometric database since the government has already made arrangement for one?

    He added: “If banks should go ahead and have the biometric database of all their customers with them, it will lead to financial exclusion. This implies that non-account holders are going to be excluded from data capturing nets.”

    Onyemenan said banks do not have a strong database in place, hence their decision to direct customers to bring all sorts of documents to ascertain their identities and further achieve the objectives behind the introduction of Know Your Customer(KYC) initiative of the Central Bank of Nigeria (CBN).

    He said banking core functions include keeping accounts of their customers, and ensuring judicious use of depositors’ funds, arguing that banks need to link up with a centralised and biometric database system to achieve growth.

    However, banks have taken a different position by supporting the idea of having their own biometric database.

    Sources close to the Committee of Chief Compliance Officers of Nigeria said the use of a separate biometric data capturing is non-negotiable as banks are to achieve their objectives of reducing frauds in the industry. According to a member of the association, who spoke on condition of anonymity, banks’ decision on the matter is line with the Central Bank of Nigeria’s (CBN) goals of tightening loopholes that could lead to fraud in the industry.

    He said the position of the banks was reinforced by the need to prevent untoward development in the area of transactions management.

    “No bank is ready to leave anything to chance, having gone through the CBN’s stress test in 2009. Now, banks are tightening all loopholes as relate to cash and credit management. To achieve this, there must a biometric data capturing system in place in the banks,” the sources added.

  • LASACO gets ISO certification

    LASACO Assurance Plc has bagged ISO 9001: 2008 certification, the management has said.

    In a statement, the Managing Director, Olusola Ladipo-Ajayi, said the Standards Organisation of Nigeria (SON) has provided independent confirmation that LASACO has met requirements of the ISO 9001:2008 certification.

    By this certification, LASACO has become the first insurance firm in Nigeria to be so certified, he stated.

    He said: ” By this certification, our company has been adjudged to meet the needs of customers and other stakeholders, including all statutory and regulatory requirements applicable to our operations. These standards are universally regarded as International best practices and are published by the International Organisation for Standardisation (ISO). It is administered locally by the SON.

    “Simply put, our company is committed to the method and model of quality prescribed by the standards.”

    Explaining the rationale for the certification award, Ajayi said: “The ISO 9001: 2008 deals with the fundamentals of Quality Management Systems. The certification is a powerful marketing tool because it places high priority on customer needs. It is expected to lead to superior operational performance required from companies operating in the international domain, especially when one of our main areas of operations is the oil and gas insurance, as well as other special risks.