The Nation Newspaper

Category: Business

  • Power: Massive load-shedding hits Lekki, Ajah, Ikoyi

    Despite reports that power supply has substantially improved in the country, residents of Aja, Lekki and Ikoyi axis are experiencing massive load-shedding (power rationing) as a result of challenges in distribution and transmission sections of the power value chain, it was learnt.

    The areas are some of the highbrow districts in Lagos State, located within the network of Eko Electricity Distribution Company.

    It was gathered that the company receives its bulk supply from two major transmission facilities – Aja and Akangba with 330/132 kv capacity each but the challenge being faced by the company has compelled it not to optimally service the customers.

    The Chief Executive Officer of Eko Electricity Distribution Company, Mr Oladele Amodu, said the reason for supply challenges in the areas was a result of failure of some distribution and transmission transformers. He said some transformers along the Ajah axis were having challenges but noted that the management of the company had started working on them. He said the company would deploy new 500kv and 300kv transformers, while the capacities of some existing transformers would be uprated and the dysfunctional ones would be changed with new ones.

    Hes identified vandalism as another major setback in the company. “Vandalism of power facilities including underground cables is a major challenge in our network. We are putting measures in place to guard against this menace to ensure steady supply to our esteemed customers,” he said.

    He said the Eko network has capacity to evacuate 700 megawatts (MW) but it is limited to 500MW due to inadequate generation. He noted that with the ongoing expansion and injection of new equipment into the network, the company’s demand would rise to 850MW by first quarter of 2013.

    The Eko chief stated other things the company have done to improve service delivery to the company’s customers. He said: “In Eko we have 333,039 customers. Out of this number, 152,746 are non maximum demand (MD) customers, while 604 are maximum demand customers. Residential customers constitute 79 per cent of the customer base and the remaining 20 per cent is commercial customers. We have 166,293 metered non-MD customers.

    “Currently, our demand load is 670MW, but we get average of 460MW as daily allocation. We have installed 628 distribution transformers between 2010 and third quarter of 2012 and 32 numbers of 15MVA 33/11KV transformers. We also have installed 27 projects under the National Integrated Power Project (NIPP).”

  • Unity Bank begins sale of 9 subsidiaries

    Unity Bank Plc has started divesting from its non-core banking subsidiaries with a view to complying with the new banking regulatory regime introduced in 2010 by the Central Bank of Nigeria (CBN).

    Under the CBN’s Scope of Banking Activities and Ancillary Matters No 3, 2010, banks are required to fully concentrate on core banking functions. The new model requires banks to either sell all non-core banking businesses or form a holding company to hold such non-core banking businesses including activities such as insurance, asset management and capital market operations.

    Most banks including Access Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank (GTB) Plc, Skye Bank Plc, Sterling Bank, Zenith Bank, Unity Bank and Wema Bank have chosen to divest from non-banking subsidiaries.

    Unity Bank at the weekend indicated it has commenced and made appreciable progress in the divestments from non-core banking subsidiaries.

    In a regulatory filing with the Nigerian Stock Exchange (NSE), the bank indicated that it has already sold three subsidiaries including Unity Registrars Limited, Pelican Prints Limited and Northlink Insurance.

    It indicated it was about completing the deal for Caranda Management Services Limited, which sale process was just about 14 per cent to complete. Two other subsidiaries- Hexadix Properties Limited and Unity Bank Bureau De Change Limited have also started discussions with potential new investors with the processes almost 39 per cent and 27 per cent completed respectively.

    Unity Bank also informed that it has identified a buyer for the purchase of Unity Investment & Capital Limited, while Newdevco Investments & Securities Company Limited and Unity Kapital Assurance Plc are currently being packaged for sale to identified buyers.

    The bank stated that it intended to conclude the whole divestment process on or before December 31, 2012.

  • Banks’ credit to private sector falls by N39b

    Banks’ credit to private sector falls by N39b

    Money and credit statistics obtained from the Central Bank of Nigeria (CBN) indicated that credit to the private sector fell by N39.4billion.

    Also, money supply dropped from N6.402trillion in the same period to N6.243trillion, representing 0.27 per cent, or equivalent of N154billion.

    Analysts attributed the fall in money supply to the decision of the CBN to mop up money in circulation through the sale of Treasury Bills (TBs). They said the apex bank has long-term objectives to reduce liquidity in the economy and further tame inflation.

    They said the decision of CBN to peg the Standing Lending Deposit (SLD) at 14 per cent will help in increasing lendind to the economy, adding that sectors which have hitherto suffered lending would be able to access funds for growth.

    A former CBN’s Director of Research, Titus Okuronmu, said the increase in banks’ lending to the private sector signals a good development for the economy. He said many private sector operators were denied access to credit, following the discovery of huge toxic assets in the industry in 2009.

    He said anytime the financial position of private sector operators is galvanised by way of providing them with operational funds, the economy gets better.

    He advised banks to increase lending to the private sector, arguing that this is the only way to put the economy back on track.

    The former apex bank chief said globally, the private sector determines where the pendulum that drives the economy swing, adding that Nigeria must not be an exception.

    According to him, more investment opportunities will be created when companies have enough money to finance their operations.

    “Private sector remains the engine of growth in any economy. When the sector is provided with enough funds, the operators will be able to invest, re-invest, create employment opportunities, and stimulate economic growth. If the trend continues, we hope to see a better and improved economy,” he added.

    In a related development, the Managing Director, Bgl Securities Limited, Mr Sunday Adebola, said the private sector is the barometer of the economy, adding that when the private sector is well funded, the economy will be buoyant.

    He said illiquidity starved the economy of certain benefits, noting that activities become dull when operators do not have enough capital to play with.

  • CIBN honours CBN deputy governors, others

    Two Deputy Governors of Central Bank of Nigeria (CBN), Managing Director/Chief Executive, Nigeria Deposit Insurance Commission (NDIC) and eight bank executives are among key operators who would be conferred with the Fellowship of The Chartered Institute of Bankers of Nigeria (CIBN) on Saturday, October 20.

    Among eminent bankers to be honoured at the Institute’s Fellowship Investiture include, Sarah Alade and Suleiman Barau, both CBN Deputy Governors. Also to be honoured are NDIC boss, Umaru Ibrahim; Managing Director, Ecobank Transnational, Arnold Ekpe, First Bank CEO, Bisi Onosanya; Diamond Bank CEO, Alex Otti; Others are CEOs of Skye Bank, Sterling Bank Plc, Unity Bank, Union Bank, United Bank for Africa, among others.

    A statement from CIBN said out of the 79 awardees to be invested at the event, 11 would receive Honorary Fellowship award while 68 Associates of the Institute will be conferred with Fellowship.

    CIBN president, Segun Aina, will be the Chairman of the occasion while ‘Debola Osibogun First Vice President will be the Chief Host supported by Uju M. Ogubunka, Registrar.

  • Enterprise Bank CEO tasks inspectors on e-payment fraud

    THE confidence of Nigerians on the usage of electronic payment systems is dependent on the control measures taken by banks’ auditors to prevent e-fraud in the financial services sector, Managing Director, Enterprise Bank Limited, Ahmed Kuru has said.

    Speaking at the quarterly meeting of the Committee of Chief Inspectors of Banks in Nigeria (CCIBN), which the bank hosted in Lagos recently, Kuru, who was represented by Nneka Onyeali-Ikpe, an Executive Director of the bank, disclosed that more Nigerians would embrace the e-payment system as the country migrates to a cashless economy. However, he said that lenders should guarantee the safety customers’ money.

    Describing e-fraud as a crime that affects the society as a whole and impacting adversely on individuals, businesses and governments, the bank CEO maintained that recent studies showed that e-fraud has increased as more bank customers key into the cashless banking initiative.

    He challenged the CCIBN to always be a step ahead of fraudsters to check the rate of electronic fraud in the country. He also called for collaboration among stakeholders to check the menace.

    Kuru suggested that development of effective controls by banks especially in data security, maintenance of efficient joint industry database on e-fraud for knowledge sharing, collaboration with local and international agencies on fraud control mechanisms among other measures will assist banks address e-payment frauds in their respective institutions.

    He further charged the chief inspectors to regularly perform employee background checks, conduct fraud awareness trainings, make vacations mandatory for staff and segregate duties among staff members as these would assist banks check e-frauds in the financial services sector.

  • FMCG stocks lead equities’ rally with 301.27% return

    Fast moving consumer goods (FMCG) companies are ahead in the upswing at the Nigerian Stock Exchange (NSE) with a sectoral year-to-date return of 301.27 per cent, almost 10 times of the average overall market return of 31.63 per cent.

    The NSE Consumer Goods Index advanced by 1.94 per cent last week as several FMCG stocks including Nestle Nigeria, Guinness Nigeria, Cadbury Nigeria and Nigerian Breweries dominated the top gainers’ list.

    The NSE Banking Index indicated the second highest year-to-date return of 61.91 per cent after rising by 7.70 per cent last week. The NSE 30 Index, which tracks the 30 most capitalised stocks, reflected significant rally by major companies with average return of 40.14 per cent over the nine and a half months. It rose by 3.89 per cent last week.

    The NSE Lotus Islamic Index- which tracks a portfolio of Shari’a-compliant stocks indicated average year-to-date return of 34.10 per cent after the ethical index had risen by 2.03 per cent last week. The NSE Insurance Index showed slight recovery with a gain of 1.59 per cent last week but its year-to-date return remained negative at -1.80 per cent. The NSE Oil and Gas Index slipped by 0.34 per cent last week, worsening the average return so far this year to -26.02 per cent.

    The benchmark index at NSE, the All Share Index (ASI), rose by 3.20 per cent last week to close at 27,287.85 points while aggregate market capitalization of all equities increased by N275.586 billion to close at N8.695 trillion.

    Nestle Nigeria led the advancers with a gain of N10 to close at N625 per share. Guinness Nigeria rose by N4.40 to close at N281.60. Ashaka Cement gained N2.75 to close at N19.50. Cadbury Nigeria rose by N2.44 to close at N30 while Nigerian Breweries added N2.15 to close at N142.

    Altogether, 50 stocks recorded capital gains last week as against 25 stocks that suffered depreciation, indicating a ratio of two gainers to one loser.

    Total turnover stood at 2.184 billion shares worth N17.495 billion in 27,786 deals. The financial services sector accounted for 1.736 billion shares valued at N12.268 billion in 16,453 deals. The consumer goods sector followed with 166.772 million shares valued at N3.570 billion in 5,443 deals.

    Turnover was largely driven by activity in the shares of Access Bank Plc, Zenith Bank Plc and Fidelity Bank Plc which altogether accounted for 569.875 million shares, representing 26.09 per cent of total turnover for the week.

  • IMF approves $1.1b for low-income countries

    THE International Monetary Fund (IMF) has approved the distribution of SDR 700 million (about US$1.1 billion) in reserves attributed to windfall gold sales profits to its members in order to boost its concessional lending capacity for low-income countries during the global crisis.

    The distribution according to a statement from the Fund, is a key element of a 2009 plan to boost concessional lending capacity to US$17 billion over the five years to 2014. The decision authorising the distribution was taken by the Executive Board in February 2012. It will however, become effective only after IMF members have provided satisfactory assurances that new amounts equivalent to at least 90 per cent of the amount distributed—i.e. SDR 630 million—would be transferred or otherwise provided to the IMF’s concessional lending vehicle, the Poverty Reduction and Growth Trust (PRGT). The 90 per cent threshold has been reached with assurances received from the countries listed below, meaning the distribution can now take place.

    The IMF will continue to seek contributions from remaining members in order to maximise concessional lending capacity. In addition, as agreed on September 28, the Fund is starting a process for seeking assurances on a separate distribution of the remaining gold sales windfall profits of US$2.7 billion.

    “This is a wonderful achievement that demonstrates our members’ determination to ensure the IMF has the wherewithal to support its low-income members through this crisis,” IMF Managing Director Christine Lagarde stated. “For many countries this process has involved complex legal or legislative steps, and it is a tribute to our membership that we have arrived at the required level in just a few months.”

    Because gold sales profits are part of the IMF’s general resources available for the benefit of the entire membership, they cannot be placed directly in the PRGT, which is available only to low-income member countries. Accordingly, using these resources for PRGT financing required a distribution of the resources to all IMF member countries in proportion to their quota shares, on the expectation that members would direct the Fund to transfer these resources (or would provide broadly equivalent amounts) to the PRGT as subsidy contributions. The resources raised through the operation will count towards the 2009 package’s target of raising an additional SDR 1.5 billion (US$2.3 billion) in PRGT subsidies. The balance is being raised from other sources, including additional bilateral contributions which the IMF continues to seek from member countries.

    The IMF sold 403.3 metric tons of gold in 2009-10 as part of a plan to ensure the long-term financing of the IMF’s day-to-day operations through the creation of an endowment using anticipated gold sales profits of some SDR 4.4 billion (US$6.8 billion). High world gold prices during the sales period, over and above the US$850 an ounce envisaged when the sales were originally planned, generated “windfall” profits of some SDR 2.45 billion (about US$3.8 billion). The first SDR 700 million of those windfall profits will be now distributed to the membership in proportion to their IMF quota shares.

  • ‘Insurers need to reinvent themselves’

    ‘Insurers need to reinvent themselves’

    Mr. Adegboyega Adepegba, Director, General, Chartered Insurance Institute of Nigeria (CIIN), in this interview with Ibrahim Apekhade Yusuf, reflects on the theory and practice of insurance in Nigeria

    What is your assessment of the insurance industry?

    My assessment is that there are still a lot more to be done by the industry itself, there are still a lot more to be done by the institute where I happen to be the Director General. I will say the Chartered Insurance Institute of Nigeria (CIIN), which is the body that has been given the statutory powers to train and retrain insurance professional and persons in Nigeria, is doing its best to ensure that those who will hold themselves high as professionals are well trained before they are certified. That is, for you to become an insurance professional, you must have gone through some prescribed examinations, which the institute conducts. And the examination is in three parts, we have the certificate, the diploma and advanced diploma stage. If any one hopes to hold himself high as a professional, he must go through these examinations. The institute provides different services to enable us prepare the students for examination. We also have a college that has been put in place to ensure that we train those who would take the examinations and those that will come in for refresher courses. The institute has also some examination programmes that it conducts on regular basis, some on annual bases and regular intervals.

    For example, the conferences, seminars, in house programmes and Mandatory Continuing Professional Development (MCPD) training programme. In all that I have said concerning the efforts of the institute, I think the insurance education in the country is not doing badly. I can say members of the industry are getting the best on training. We have also encouraged that education is not something you get from a particular source like the CIIN; we also encourage students and our members to develop and re-develop themselves. The MDCP programme for example ensures that students write, carry out research, and attend programmes that can broaden their knowledge about the practice of insurance. I can say the insurance in Nigeria is gathering momentum.

    What are the challenges confronting the institute?

    There are a lot of challenges; of course finance is the major issue, whether for the institute or the corporate bodies that would send their staff for programmes. Over the years, I want to suspect, that the budget for training has being falling, I do not have the figures, but I suspect, that there might be some scaling down of budget for training, this is a major challenge. This is because no matter how good and elaborate a training programme is, if we do not have more of our members attending there is a challenge. It is no longer fashionable for a practitioner to just have one certificate in the present dispensation. Professions have intertwined that somebody must have a bit of what is obtainable in other professions. The knowledge that was impacted 10 years ago may not be sufficient to drive the business of today. Therefore, there is the challenge for our people to change in learning new things and asking more questions. There is also the challenge on research, raising qualified people who can impact knowledge on young practitioners.

    Our professionals are very busy people, but the time has come for them to give back something to those that are coming up. The challenge we have here is that the professionals have their primary duties and must meet certain targets in their officers. We have been trying to encourage the professionals, but it has not been easy. We try to encourage people to have mentors and build relationships, but we still have some challenges. We hope that so many good hands we have in industry, which may not be getting younger, there is need for us to begin to ask them to impact on others.

    How has the institute fared in encouraging intake of fresh hands to replace aging practitioners?

    Most professionals have continued to age and we have continued to educate young people to take our examination to boost their performance. We have improved on our awareness drive and there are more people coming in to register for our examination, but there is still the need to fast track it. I believe we must be able to match the number of people coming in two times over and above those going out. That we have not been able to achieve. There is a danger if we have for an example 30 people retiring every year and we cannot find about 40 or 50 people replacing them by way of qualification. Exit can be as a result of death, retirement, loss of jobs and other factors, whereas, the only entrance into the profession is the CIIN which monitors those who come into the industry. When we did the last count, we observed that we have average of 60 people joining the profession every year. I do not want to go into the number of people that leave the industry for I do not have the figure, but we know that people are leaving due to age and other reasons. I believe there has been some improvement in the number of people coming in; for we are working seriously to get more people into the profession through National Youth Service Corps (NYSC) orientations campaigns, visit to tertiary institutions, Catch Them Young Programmes, our Operation 5000 Graduate Scheme and others.

    What is the state of the insurance college?

    The college of insurance and financial management is evolving; its blue print is ready. I do tell people that the college is not the building – the number of classes we have, but the blue print which we have been able to develop and where the blue print is taking us to is that within the next few months, we would be admitting students. Whether we admit them in the permanent site or somewhere else, would not be the most important thing now, but the important thing is that we have a blue print and we are bringing in people that would run the college. We would be bringing experts from the industry that would form the faculties of the college. Presently, the administration block of the college is completed, the restaurant 90 per cent completed, we have seven chalets that have also been completed. With the complement of buildings we have in there, we can start. We have made tremendous progress on the college. We have completed the administration block that houses the class rooms and can sit about 2000 students. We have admin offices for the college rector and other staff. We have a restaurant and seven chalets for people who may want to stay overnight. The next stage is for us to build the halls for presidents and that I think before the end of the year, we shall lay the foundation for that.

    As a non professional, how have you been able to cope with the administration of the institute?

    While I would not unduly justify that a non professional can run this place, I want to say that what is required to run this place successfully is a good knowledge of management.

    Other things required to run the institute are deep managerial skill, ability to wed people together, ability to win the support of the industry, ability to meet the needs of members, cutting down one’s excesses. The work here is like that of a judge. In the years I have been here, I have lost many friends and cut down many because if one is running an institution like ours, he must be above board.

  • P/Harcourt refinery records rising incidents of vandalism

    P/Harcourt refinery records rising incidents of vandalism

    OVER 199 incidence of pipeline vandalism has been recorded by Port Harcourt Refining Company Limited (PHRC) between January and September.

    The Managing Director PHRC, Engineer Sylvester Idemudia made this revelation while fielding questions from the members of House Committee on Petroleum Resources (Downstream sector) who were on oversight visit to the office complex, in Port Harcourt.

    According to him, “The crude supplied is not regular due to vandal’s activities along the pipeline right of ways in Bonny and Port Harcourt.”

    For the Nigerian refineries to function effectively, Idemudia stressed the need for complete overhauling of the refineries as most of the processing equipments are obsolete.

    In his remark, the Chairman of the 42 member Committee, Hon. Dakuku Peterside lamented that even the TAM was done last 12 years ago; this calls for the need to get approval from federal government to execute TAM/Rehabilitation of all the refineries.

    “If refineries are functioning optimally, we’ll not be in this mess. TAM then was not done with seriousness but we hope the money to be spent this time around will add value to the economy of the nation,” said Peterside.

  • Commission boosts SMEs with over N12bn

    Commission boosts SMEs with over N12bn

    No fewer than 100,000 women in small and medium scale agric-business and allied sectors across the South West of Nigeria are beneficiaries of over N12bn revolving loans disbursed by the Justice, Peace and Development Commission(JPDC), a nongovernmental organisation wing of the Ijebu Diocese of the Catholic.

    The amount which was disbursed over a period of 10 years was designed to assist the beneficiaries, especially women start small and medium enterprises in agro-produce or expand existing ones.

    Mrs Florence Ogunnupebi, the coordinator of JDPC microfinance institution, Centre for Grassroots Economic Empowerment (CGEE), made this known to reporters during award giving ceremony to 80 beneficiaries of the credit facility and who had been adjudged faithful to the scheme.

    Ogunupebi said the N12 billion loans were given to women since the establishment of the Commission in year 2000 till date.

    “Since the inception of this scheme, we realised that we have some people that remained committed and stead fast to the programme with their performances outstanding.

    While presenting the cheque, Rev. Fr. John Patrick Ngoyi, JDPC Director, said the loan assist the beneficiaries who are into Agric business and produce to boost food production, income and job creation in the state.