The Nation Newspaper

Category: Business

  • ‘Desist from reforms that strangulate business’

    ‘Desist from reforms that strangulate business’

    If the Federal Government must carry out reforms in the aviation sector, such efforts must not strangulate the operating environment by pushing operators out of business, but it must address operational challenges, Chief Executive Officer (CEO) of Widescope International Logistics Limited, Mr Segun Musa has said.

    According to the freight forwarders chairman of the Murtala Muhammed International Airport (MMIA) Ikeja, Lagos, until the Federal Government establish a cargo village at the Lagos Airport, efforts to sanitize the cargo section of the industry will not yield the desired results.

    He explained that as is the practice in other parts of the world, the establishment of a cargo village at the airport will boost trade facilitation, as such a facility will not only earn revenue for government, but will help to organize the business of freight by air for goods coming in and out of the country.

    Musa, who spoke in an interview, explained that the major challenge operators in the cargo and freight arm of the aviation sub sector face range from exclusion by government officials while putting policies in place that will shape operations at the airport.

    He explained that it is only valid for government to carry along stakeholders in the sector, when fine-tuning policies and programmed that will assist to order the business of trade facilitation.

    Musa also faulted the insufficient capacity of financial institutions in Nigeria, including banks to fund serious aviation projects including loans to acquire aircraft, affirming that the banks rather than focus on their core business of funding businesses, have deviated into other areas.

    Musa said it appears out of place for banks to be setting up subsidiaries to run their customers out of business, thereby shrinking the competitive space for players that do not have the available capacity to fizzle out.

  • FAAN laments damage of facility

    FAAN laments damage of facility

    The Federal Airports Authority of Nigeria (FAAN) has raised the alarm over the wanton destruction of convenience facilities at the Murtala Muhammed International Airport, Ikeja, Lagos.

    Such attitude by passengers the managing director of the airport authority, Mr George Uriesi warned is at variance with the transformation agenda of government of making the airports safe, convenient and secured for either inbound or outbound passengers.

    Uriesi who spoke at a one day conference on viable options for airlines financing explained that some passengers have continued to damage facilities that were installed at the refurbished toilets at the Lagos Airport, affirming that it would be proper for such passengers to seek clarification on how to utilise the highly sensitive facilities with sensors.

    He explained that the resolve of government is to deliver facilities at the airports that are world class, as is the practice in other airports across the globe, but expressed dismay that rather than key into this revolutionary move, passengers have demonstrated a shabby culture of damaging the toilet handles.

    Such actions by passengers he said will act as a disincentive for the airport authority , which is poised to fast track the renovation of the terminal , even as he said some section of the terminal will be completed for use before the end of the year.

    Uriesi also spoke of plans to complete the remodelling of the terminals at Benin  and Owerri airports before the end of the year, affirming that the delay in completing the projects on schedule were due to extraneous factors, which were not antiquated at the commencement of the project.

  • Fix legal, debt issues, banks told

    Banks must ensure they get legal and debt recovery is sues right before giving loans to customers, a university teacher, Taiwo Odumosu, has said.

    Speaking at a workshop on credit management and debt recovery organised by Monsad Ventures Limited, Odumosu said the direction of commerce required lenders to be painstaking and diligent in analysing credit requests, including dealing with legal issues and challenges faced by credit recovery agents.

    He called for a proactive legal regime and control that understand the relevant laws, know how and when to invoke legal processes, avoid legal pitfalls in debt collection negotiations.

    He explained that credit analysts and lawyers have to understand what a credit report contains, especially information about customer’s borrowing history. They also need to be abreast with credit bureau service providers that collect – and then distribute – all of this information about borrowers.

    He described credit buraux as information warehouses, adding that where there is erroneous information from this segment of the market, credit could suffer.

    According to him, a bank should adhere to the Nigeria Deposit Insurance (NDIC) Act, Section 22 which stipulates that it is illegal for an insured bank-not to make adequate provisions for bad and doubtful debts up to the amount recommended by the Corporation or pays dividends in defiance of this provision.

    He explained that where an insured bank is closed on account of its inability to meet the demands of its depositors, the corporation is empowered to recover any debts owed to the closed bank or any asset which are in possession of any other person or institution. He said these policies have to be continually enforced for the credit industry to grow.

    Odumosu regretted that the laws have not been able to provide enough safeguard for the banks and other money lending agencies to ensure that they are adequately covered when there is loan default.

  • Minister orders distribution of transformers to states

    Minister orders distribution of transformers to states

    The Minister of State for Power, Darius Ishaku, has directed that all 33/11KV transformers, transformers panels, oils and other power equipment at the Central Stores of the Power Holding Company of Nigeria,(PHCN), Shogunle, Lagos , be allocated to every part of the country that needs them within the next two weeks.

    In a statement by the Assistant Director, Press, Patricia Doweritshe, the move is to ameliorate the plight of the communities affected by power supply due to damaged transformers .

    She said the Minister gave the directives in Lagos, when he paid an unscheduled visit to the PHCN Central Stores, adding that he was surprised that over 2000 transformers and other accessories for the transmission and distribution of power effectively to Nigerians were idling away at the central stores, while consumers are complaining of damaged transformers.

    She said Ishaku was at the Ikorodu Port of the Nigeria Customs and Excise, to receive inventory of all the Power equipment at their custody, since 2004, adding that the Minister took delivery of these equipment from the Comptroller of the Port, Dan Ogu, who represented the Comptroller-General of the Nigerian Customs and Excise, Abdulahhi Inde Dikko, and thanked the Customs for protecting the equipment from vandals all these years.

    He assured that these equipment would further consolidate power supply in the country, as they would be distributed to all successor companies of the PHCN according to their requirements.

    He said a Distribution Committee would be set up to identify areas of needs to enable each company take delivery of the available equipment.

    Ishaku said government is anxious to see a quantum leap in power supply to the citizenry and therefore directed the chief executives of these companies to pick up their allocations from the port before the end of October.

    The Minister was accompanied by the Permanent Secretary, Dr. Dere Awosika and the Chief Executive Officers of Eko and Ikeja Distribution Companies, Chris Akamnonu and Amoda.

  • MAN, firm partner on IFRS

    Akintola Williams Deloitte (AWD) and the Manufacturers Association of Nigeria (MAN) have concluded a one-day seminar on assisting Small and Medium Enterprises to achieve the International Financial Reporting Standard (IFRS) implementation. The IFRS will take effect from January, next year.

    The IFRS are principles-based standards, interpretations and framework adopted by the International Accounting Standards Board (IASB) that requires disclosure on a range of issues including risk management measures and changes in accounting policy.

    The IFRS Leader for Deloitte West and Central Africa, Oduware Uwadiae, said there are benefits and challenges of IFRS reporting for SMES. He listed them to include IFRS conversion process and the need for early preparation.

    A statement said MAN has approached Akintola Williams Deloitte to take the seminar to other regions in Nigeria, where its other SME members, who could not attend, are Deloitte is also partnering with MAN after signing a Memorandun of Understanding (MoU) to organise elaborate training and assist in IFRS implementation for all SMEs under the platform of MAN.

    The seminar, which was hugely applauded by participants and stakeholders, was the third phase of the adoption of IFRS in Nigeria. It highlighted the need to create awareness and sensitise participants.

    According to the roadmap for IFRS adoption in Nigeria, this phase of the adoption, statutorily requires SMEs to issue financial statements based on the framework of IFRS for SMEs at the end of 31st December, 2014. This effectively means that the transition date to IFRS for all SMEs in Nigeria is January, 2013.

  • Why co-operatives are weak, by group

    Limited systematic data on the co-operative sector is hindering effective engagement with the segment, Enhancing Financial Innovation & Access (EFInA) has said.

    EFInA, which promotes financial inclusion in the country, said it was difficult to determine the optimal strategy for expanding financial services through co-operatives based on a survey it conducted.

    The firm had undertaken a study of the sector in Enugu, Kebbi and Oyo states. Findings from the survey showed they were disseminated and discussed by panelists and participants from co-operative groups, traditional co-operatives are common throughout the country, but these groups tend to be small, with a common bond based on membership of a kinship, societal and/or professional group.

    According to the Federal Department of Co-operatives, as at 2010, there were over 80,000 co-operative groups with over 1.4 million members in 605 local government areas in the country. The EFInA Access to Financial Services in Nigeria 2010 survey also revealed that almost 21.9 million Nigerian adults used informal groups including co-operatives while 14.8 million rely on the sector as their only means of access to financial services.

    Chief Executive Officer, EFInA, Ms. Modupe Ladipo, said: ”There is a core and dedicated following of co-operatives in Enugu, Kebbi and Oyo states, which is probably also replicated across Nigeria. Members regularly save and have a real demand for loans.

    “Our data revealed that the 700 members interviewed in these three states saved over N243 million annually; and that the 150 managers interviewed, managed a loan portfolio of N122 million. Therefore, there is a significant potential for co-operatives to make a bigger impact amongst those who are un-banked or under-served. If optimised, co-operatives can be a force in empowering rural communities, farmers, women and micro entrepreneurs throughout Nigeria.”

    Minister of Co-operative Development and Marketing, Kenya, Mr Joseph Nyagah and Dean, Faculty of Co-operative and Community Development, Moshi University College of Co-operatives and Business Studies (MUCCoBS), Tanzania Mr Christian Malamsha, agreed with her.

    Nyagah shared insights on how effective regulations can support the growth and development of co-operatives and maximise their impact on financial inclusion. “Kenya’s Savings and Credit Cooperative (SACCO) is the most dynamic and largest in Africa. At the end of 2011, there were 14,126 registered co-operatives – serving over 10 million members in Kenya,” he said.

    He reiterated the need for government to create a conducive environment for growth and development of co-operatives through effective policies, overseeing development and administration of co-operative legislation and regulations.

    “Co-operatives remain important in providing access to finance, and in particular credit to low income individuals given the rising cost of lending by banks,” he said.

    Malamsha, on his part, said co-operative can strengthen the competence of co-operatives and their managers, which would assist in accelerating the uptake of formal financial products in the co-operative sector.

    “Co-operative colleges should identify, develop and review programmes continuously, to ensure that the training needs of co-operatives are met,” he said.

  • Lottery board to sanction banks over fake promos

    The National Lottery Regulatory Commission (NLRC) will not hesitate to seal off the premises of any bank whose promotional campaigns are bogus or misleading.

    Other sanctions include issuing a public disclaimer and an order to stop the promo.

    The Assistant Director, Enforcement and Compliance, NLRC, Henry Uwadiae, said the sanctions were in line with the powers conferred on the commission as the sole regulator of all aspects of lottery in the country.

    He told The Nation that the lottery body would resort to such measures to protect consumers from being hoodwinked into patronising certain banking services and further maintain the integrity of the commission.

    He said the commission has been intimated with issues of fake presentation and claims prizes among various players in the economy, and would try as much as possible to protect consumers.

    He said: “The Lottery Commission regulates national lotteries including promos. What the banks are doing is under promo in which we have oversight functions. It is part of regulatory duties to investigate promos to see whether they are genuine or not.

    “For instance, a bank (name withheld) organised a promo sometimes ago. The bank stated in its promo that it is presenting 20 cars to the lucky winners, but we discovered that the information was not true. At the end of the day, the bank said it could not reach all the twenty winners in question. We were able to find out that the bank had three cars, instead of the twenty cars.

    “If a bank is doing a promo that is lottery in nature, it is the duty of the lottery commission to tell the bank to regularise it. If the bank fails to regularise the promo, there is no other thing the commission can do other than to stop the promo.”

    If any bank or company violates the law regarding the running of a promo, and it was discovered to be deliberate, the firm will be charged in accordance with the criminal code act, he stated.

    Uwadiae said the commission has taken it upon itself to monitor all activities relating to promotional campaigns, from beginning to the end, to ascertain their genuineness.

    “We give banks the permit to organise promos. Not only that, we take our men to the venue of the promo to witness it. We involve ourselves in the presentation of the prizes. Some institutions may not be able to present the prizes centrally due to their sizes and the volume of the promos they are running.

    “To ensure fairness and further prevent any form of sharp practices, “we ask the institution(s) to send the list of winners to us, and verify them to know whether they are genuine. Through this, we would be able to know the level of redemption of the prizes,” he said.

  • Prepaid credit cards used for money laundering, CBN, EFCC, others allege

    Prepaid credit cards used for money laundering, CBN, EFCC, others allege

    Prepaid credit cards are being deployed in borders for money laundering, the Nigeria Electronic Fraud Forum (NeFF), has said.

    The NeFF, comprising the Central Bank of Nigeria (CBN), the Economic and Financial Crimes Commission (EFCC) and commercial banks, spoke in Lagos.

    The laundered money is often used for terrorist financing. The planning, logistics and acquisition of objects for terrorist actions often require cross-border transfer of funds to the country of destination.

    Digital Encode Limited, NeFF partner, said money laundering is an intentionally-committed crime that signifies the conversion and transfer of assets of an illicit origin. The objective of this action consists of disguising the true origin, location, nature, disposition, movements and transfer of assets acquired from illegal activities.

    Participation, support or facilitation of illegal activities, such as transfer of money of illicit origin to several bank accounts and afterwards their conversion into legal financial products, are regarded also as money laundering actions.

    NeFF said: “Direct importing of cash will be avoided for the reason of strict border control; more sophisticated techniques will rather be applied for quick and mostly complex transfer of funds through existing legal and illegal transfer systems and financial instruments.”

    The money laundering techniques involving direct use of electronic payment systems is often linked to terrorism financing and it is used only as a transporting instrument in one of the three phases of the money laundering cycle.

    “Money wire transfers can be characterised as the easiest transfer method within the money laundering activities. Transfers are financial transactions by which values are transported from the payer to the payee electronically over telecommunication networks,” it said.

    Chief Technical Officer, Digital Encode Seyi Akindeinde said the laundered fund is detrimental to economies of nations, including Nigeria.

    He said prepaid card services have a unique ’domino effect, which brings the unbanked into the formal financial system, but it has to be guided against being hijacked by money launderers because of its simplicity in usage.

    “The expansion of e-payment platforms is an exciting opportunity to reduce the cash economy, making the market safe while simultaneously improving the lives of the poor. We insist that it is only through a careful analysis of the actual risks posed that appropriate proportionate regulation and controls can be developed,” he said.

    Other features that make prepaid cards vulnerable to money laundering include anonymity, elusiveness (untraceable transactions), rapidity and lack of oversight.

    He however, explained that even in the worst-case scenario where a mobile customer is not registered, transactions are less anonymous than with cash, since they can be linked to a unique mobile number and since transactions (sender’s mobile number, amount, receiver’s mobile number, date) are recorded and traceable. This differs from cash where there is neither a unique identifier for the user nor a recorded trace of the payment.

    He said whilst cash transactions are untraceable, mobile money transactions are clearly traceable in the system of mobile operators as part of usual business practice.  For instance, telephone number (sending and receiving), time and the amount of the transaction are known to the mobile operator.

    According to him, over a distance, the electronic character of mobile technology can make transactions much more rapid and effortless than cash. Rapidity is therefore a bigger risk factor for mobile money services than for cash. In the case where there are no automated internal controls, this can provide efficient means for criminals to launder money.

    He added that while the cash economy lacks oversight, a mobile operator offering mobile money services is regulated. He explained that where laundered money is loaded onto a prepaid debit card that is given to another individual for use, it could look very much like any normal transaction with no observable loss to the card issuer. Therefore, prepaid cards he explained are an example of a payment method that provides a potentially attractive vehicle for enabling money laundering transactions.

    According to him, payment providers and others in the card industry have reacted by putting restrictions on load limits and requiring cardholder identification to help eliminate the potential for using prepaid cards in money laundering.

  • Operators to access Bombardier jets

    Operators to access Bombardier jets

    To boost domestics operations, the Federal Government is facilitate the acquisition of brand new Bombardier regional jets by airlines.

    This is part of the benefits of the investment tour by officials of the Ministry of Aviation and some agencies that visited Canada, China and the United States.

    Under the plan, an investment tracking desk has been opened at the ministry to enable officials react within a few days to questions asked by potential investors, who may wish to carry out due diligence.

    The choice of regional jets, it was learnt, is based on their suitability for short distant operations which is the forte of domestic airlines.

    Regional jets, according to experts, apart from lowering operating costs in terms of fuelling, are ideal for routes, where the passenger traffic oscillates depending on a myriad of factors.

    Only Arik Air uses such in Nigeria.

    Bombardier regional jets are used mainly for short haul flights in developed aviation economies where passenger traffic is encouraging, unlike in Nigeria where domestic operators deploy massive aircraft, including Boeing and Airbus aircraft types on short haul routes, which are meant for medium and long haul routes.

    The Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mr George Uriesi, said Boeing Company would also be visiting Nigeria to carry out an audit of the aircraft and airlines to the ascertain their air worthiness.

    The company, he said, is expected to give a specific evaluation of every aircraft operating in the country to raise the bar of air safety.

    The idea is to have an idea of the status of every aircraft and airline in the country with a view to having a full brief of the situation, which will remain confidential to the company and the ministry of aviation he said.

    He said a clause of non disclosure was signed with the aircraft manufacturer to ensure that the technical safety information is managed effectively.

    The company, Uriesi said, would partner with Nigeria in setting up a maintenance and repair overhaul facility, by lending its expertise to project.

  • Customs Reform Bill scales second reading

    Customs Reform Bill scales second reading

    A Bill which seeks to reform the administration and management of the Nigeria Customs and Excise, scaled second reading in the Senate yesterday.

    Entitled, “A Bill for an Act to repeal the Customs and Excise Management Act, CAP.C45 of the Federation of Nigeria, 2004, and Other Customs and Excise Laws; to establish the Nigeria Customs Service; Reform the Administration and Management of Customs and Excise in Nigeria and for Other Related Matters, 2012,” was sponsored by Senate Leader, Senator Victor Ndoma-Egba.

    In his lead debate, Ndoma-Egba noted that Customs administration is globally recognised as a key indicator driving economic growth by facilitating trade between countries.

    He said the administration of Customs occurs in a complex national and international legal regulatory environment that influences the form and content of the national Customs laws or regulations.

    He noted that Nigerian Customs Service is unarguably one of the oldest institutions of government with a history spanning as far back as 1891.

    Ndoma-Egba said as one of the frontline organisations that contribute to national security and economic growth, the Service’s functions of collection of revenue and curtailing smuggling have remained crucial to the security and development of Nigeria.