The Nation Newspaper

Category: Business

  • Summit to address unemployment

    The Conference of the Northern States Chambers of Commerce, Industry, Mines and Agriculture (CONSCCIMA) has said its economic and investment summit in October will address security and employment challenges in the north.

    CONSCIMMA chairman Ahmad Rabin said the conference’s second Economic and Investment Summit coming up on October 15 and 16 in Minna, Niger State.

    Rabin said the conference would adopt measures to revamp the region’s economic base and engage the youths in ventures that would keep them away from social vices.

      He said the summit would also examine the effects of insecurity on the economy of Nigeria and northern Nigeria, specifically, as well as develop a clear and realistic integrated economic revival agenda for northern Nigeria.

      It would advocate for peace as a recipe for economic growth and development, he added.
    Rabin said that the summit would harness the vast experience and resources of people of the region and its various governments for economic rebirth.

    He said the summit would be about rebirth, revival and reinvention of the north as a region and would be tied to the Federal Government’s transformation agenda.

      On the security challenge in the region, the chairman said that the situation was not peculiar to the north as “insecurity is a global phenomenon.”

  • NASME frets over shopping malls activities

    The National Association of Small and Medium Enterprises (NASME) said shopping malls are taking over the business of small traders.

    Executive Secretary of the association, Mr Eke Ubiji, said in Lagos that shopping malls were taking over products being sold by small time traders.

    Ubiji said the standard and ambience of shopping malls were enough to attract buyers against the open and harsh environment of petty traders.

    “Customers would prefer to go to an air-conditioned shop than to go to an unattractive shop to buy products. Many of these malls have everything in stock. You can buy building materials, hospital equipment and even farm products from the malls.

    “If you can buy tomatoes, pepper and onions in a sophisticated mall, why would you go to muddy and unkempt open markets to get them,” he said.

    According to Ubiji, many of the malls sell products at ridiculously cheap prices to attract more customers.

    “Foreign investments are good for our economy, but they should not be allowed to take over our small and medium businesses. It is even sad that many of the malls are owned by foreigners who don’t re-invest their profits into our economy.They would rather take it back to develop their own economies,” he said.

    Ubiji appealed to the government to put a limit on the kind of goods being sold by the shopping malls to guarantee the growth and sustenance of ordinary traders.

  • Entrepreneurs invest in mobile catering

    Mobile  catering is gradually changing the face of Lagos State as young enterpreneurs invest in the business. As a result, some families could be   lifted out of poverty. This is also changing the perception of the State as the hub of youth hooliganism to a major player in the booming business of mobile catering and small chops business.

    With unemployment rates  as  high  as   40 per cent, the young  entrepreneurs  are now profoundly repositioned and fully  prepared  to take  the leadership  of  the business. This group comprising youths in the 20-35 age bracket is repositioned and fully engaged in applying all they have learned, in a leap that many young professionals are now chasing.

    Youths involved in catering service have shown how food service -led growth can be a powerful antidote to poverty. The evolving industry is laying the foundation for long-term economic vitality for the areas involved.

    Some young men have taken their place at the heart of the industry worth thousands of naira. One  of  them is the Chief  Executive  of  Ades Small Chops, Mr Ajiboso Adepoju .
    With a group of  friends, Ajiboso now   caters  for events fulfilling  the  social needs for Shomolu-area businesses. Ades Small Chops  is a food and services company that cooks and supplies food.

    The  company  offers catering services and cocktail drinks for events. Their productivity is incredibly high, and   engagement scores are incredibly high. With  overhead so low, and  client base in place, he  has  began making money.

    Ajiboso said with the business of small chops young people can make enough money  to live life on their  own terms and have  a sense of peace and fulfillment. Taking  to  mobile  catering, Ajiboso and  his group provide brilliant mix of services that makes events memorable.

    The menu offers a mix of old and new favourites that guests can enjoy.  It is clear from the demand for their services that  they will change  the face of the industry. The young entrepreneurs have created a multi-million business enterprise.

    Their love for   the catering business and zealousness to take on new challenges is far from diminished. They have   been to wedding receptions, business meetings and hospitality events, and one thing they have in common,  is the array of small chops  that always accompanies them.

    Ajiboso  has proved that no hindrance is too big to tackle or no obstacle too hard to overcome only if one possesses enough self confidence and are determination to succeed. He had to struggle hard for almost everything he has achieved in life. He   has learned to cope with difficulties and face them boldly.

    He acquired  skills on  small chops. Seventy per cent  of their jobs  come from referrals. The  group  has  persevered with hard work and determination to succeed against all odds.  ”We had received several inquiries and the number  keeps growing,” he said.

    For him why outside catering fails is because the students, or customers, aren’t served the type of food people want to eat. His  goal now is to continue to grow the business and work with clients.

    One of the young entrepreneurs, Yomi Martins, prepares small chops  at its premises and delivers it to the event when needed. His  target is private and corporate events. These consist weddings, birthday parties, dinner parties and funerals.

    He  leads   a small group of hungry, success driven, passionate, action-taking entrepreneurs whose goals are creating wealth for themselves and others.

  • First Bank: New structure, greater values

    As shareholders prepare for the September 24, 2012 extraordinary general meeting, emerging details on the restructuring of First Bank of Nigeria (FBN) Group into a holding company showed strong potential for increased values for shareholders.
    Under a new banking regulatory framework introduced in 2010 by the Central Bank of Nigeria (CBN), banks are required to concentrate fully 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.
    First Bank and four other banks have opted for restructuring of their group universal banking operations into holding company structure. Other banks are seeking to divest from non-core banking operations.
    The largest banking group in Nigeria and easily one of Africa’s largest financial services institutions, the choice of holding company complement the existing group structure of First Bank while creating new synergies that eliminate overlapping functions and loopholes and enhance the efficiency of the group structure.
    First Bank Group consists of 11 subsidiaries operating in various segments of the financial services industry from pension custodian, asset management, investment banking, insurance, and microfinance banking entities. Besides, the bank also holds investments in companies with international presence in the United Kingdom and France through its subsidiary FBN Bank (UK) Limited, in addition to representative offices in South Africa, China and Abu Dhabi.
    Market pundits said the new structure would enhance the productivity of the FBN Group, thus creating values for shareholders along the component structure.
    Managing director, Cowry Asset Management Limited, Mr. Johnson Chukwu, said the decision to restructure into holding company was the best option for shareholders of First Bank.
    According to him, the holding company structure would create more values for shareholders given that subsidiaries under the FBN Group are doing quite well and are leaders in their various segments.
    He noted that with the new structure, shareholders of First Bank would be able to fully unleash the latent potential and returns locked in the subsidiaries pointing out particularly the long-established strengths of the bank in investment banking.
    Investment advisor and securities expert, Sterling Capital Markets Limited, Mr. Sewa Wusu, said the realisation of the holding company structure would enhance the competitiveness of each component as the performance of the core banking operations and other businesses can be measured distinctively against similar businesses.
    He said the new structure would lead to increased profitability as all the members of the holding company would contribute profit to the centre, which would now be shared to investors.
    He added that holding company would ensure better preservation of assets of the group as any infraction in a particular segment could easily be contained while the holding company could use its influence to source additional funds for operations of the subsidiaries.
    “I think it’s a good development, there is nothing wrong with the new structure. It’s the same group structure only that the new system will create better values and enhance the profitability of each component,” Wusu said.
    Shareholders said they were impressed by the clear sense of direction outlined by the management of the bank.
    General Secretary, Independent Shareholders Association of Nigeria (ISAN), Mr. Adebayo Adeleke said shareholders were particularly happy that the bank’s holding company arrangement is devoid of complexities that have been known to result in fractional shares in other cases.
    According to him, the arrangement where all existing shares of First Bank are transferred entirely to the holding company in the name of the beneficial owners, following which the same number of units and percentage would be held in the new entity is better for shareholders.
    He noted that each of the companies would be seen as they are, rather than as a bunch, just as it would ensure that the value that has been built in these 11 companies by First Bank shareholders over the years would not be lost.
    “We are excited about the development; we are going to get value, because everything we have would be transferred to the holding company. There will be no manipulation as a result reconstruction that usually leads to fractional shares,” Adeleke said.
    Speaking earlier on the plan, group managing director, First Bank of Nigeria (FBN) Plc, Mr. Bisi Onasanya said the new structure will enhance the bank’s competitiveness, besides streamlining and coordinating various operations across non-bank financial services.
    According to him, it would enable the group to exploit opportunities for synergies between subsidiaries, while aligning the ownership and operation of the subsidiaries and businesses with current CBN regulatory requirements.
    Under the new structure, shareholders of First Bank will be migrated to FBN Holdings as at the terminal date by way of a share-for-share exchange between the shareholders of First Bank and FBN Holdings. Also, First Bank’s stakes in each of the holding company subsidiaries and associated companies will be transferred to FBN Holdings, while First Bank’s shareholdings in each of the Investment Banking and Asset Management (IBAM) subsidiaries will be transferred to FBN Capital Limited. FBN Capital will in turn be owned by FBN Holdings, an arrangement that will not alter the current beneficial shareholding structure of the FBN Group.
    Shareholders of First Bank are expected to approve the proposal to transfer the shares to the new structure, after which an application would be submitted to delist First Bank shares from the Nigerian Stock Exchange, and listing of FBN Holding shares next month.
    Onasanya outlined that the new structure would create an operating model that will profitably grow the bank’s presence in the market for commercial banking and non-banking financial services in order to achieve the aspiration to be the dominant financial services group in Sub-Saharan Africa.
    “The holding company would result in the creation of a corporate centre with responsibility for setting strategic direction, providing group-wide oversight and ensuring the leveraging of synergies across the group through the constitution of a governing board and committees at the group level to optimally align corporate governance and management roles,” Onasanya pointed out.
    Market analysts said the new structure would further enliven the performance of bank, which had doubled profit in the first half of this year. Half-year report of First Bank for the period ended June 30, 2012 showed that net profit doubled by 124.6 per cent to N46.01 billion as against N20.48 billion posted in comparable period of 2011. Gross earnings had grown by 25.6 per cent to N182.30 billion compared with N145.09 billion in corresponding period of 2011.
    The first half report was a significant consolidation on the first quarter performance. First quarter report of First Bank for the period ended March 31, 2012 showed that gross earnings rose by 42.5 per cent to N92.3 billion as against N64.8 billion in comparable period of 2011. Operating income increased to N74.2 billion compared with N49.4 billion in 2011. Profit before tax stood at N28.9 billion in first quarter 2012 as against N14.3 billion in 2011, an increase of 101.6 per cent. Customers’ deposits also rose by 31.1 per cent from N1.6 trillion in 2011 to N2.1 trillion in 2012.
    The performance trend this year supported the growth outlook indicated by the latest audited report and accounts of the bank for the year ended December 31, 2011. The report showed a 27.6 per cent growth in gross earnings to N296.3 billion as against N232.1 billion recorded in 2010. The bank also secured a 45.6 per cent growth in operating income to N259.2 billion contrary to N178.1 billion the previous year. Total deposit growth of 34.3 per cent to N1.9 trillion and was driven by low cost current and savings accounts, leading to a further reduction in total funding costs to 1.7 per cent from 3.1 per cent in the previous year. First Bank’s shareholders’ funds increased from N339.2 billion in 2010 to N365.48 billion in 2011. Cost to income ratio firmed up to 56.8 per cent while earning per share rose to N1.40 as against 95 Kobo in 2010. Consequently, the bank increased cash dividend by 33.3 per cent to 80 kobo for the 2011 business year as against 60 kobo distributed for the 2010 business year.

  • Association to govt: Develop fishing to create wealth

    Chairman of Ibeju Lekki Fishers Cooperatives Society, Lagos State, Mr Odubitoe Lateef has urged the state government to develop fishing as a means of wealth creation.

    Lateef said the profession was capable of engaging many youths in the country, if well exploited by the government. He, therefore, urged the government to address the challeges confronting the sub-sector such as lack of funding and modern equipment.

    “We want the government to provide us with modern equipment that will enable us to compete with our counterparts in the western world.

    “It will make fish available and cheap as well as reduce the importation of fish.
    “It is unwise to import fish in a country like Nigeria where we have enough rivers.” He said the association was encouraged by the state government’s support.

    Meanwhile, the Lagos State Ministry of Agriculture and Cooperatives has launched the artisanal fishing inputs service delivery programme.

    During the launch of the programme at Orimedu Beach, Ibeju Lekki, Lagos, the state Commissioner for Agriculture and Cooperatives, Prince Gbolahan Lawal, said the programme was aimed at empowering and equipping youths.He said the government had spent more than N3 million to purchase fish farming equipment for the programme.

  • Naira eases on strong dollar demand

    Nigeria’s naira eased against the U.S. dollar on the interbank market on Monday after a surge in demand by one lender buying the greenback for its customers, dealers said.
    The local currency closed at 157.80 naira to the dollar, weaker than Friday’s close of 157.55 naira.
    The naira according to Reuter’s news, had firmed to 157 naira level last week from 158 to the dollar after the state-owned energy company NNPC sold around $480 million to some banks.
    “The dollar inflow from the NNPC is gradually thinning out because of a surge in demand, driven by importers who were taking advantage of cheaper dollars to bring forward their obligations,” one dealer said.
    Dealers said the naira should be back at 158 naira level this week as dollar demand continues to reduce market liquidity, unless a major inflow from oil companies come in.
    At the bi-weekly auction, the central bank sold $180 million at 155.78 naira to the dollar, compared with the $200 million it sold at 155.80 naira at last Wednesday’s auction.

  • CBN to print N5, 000 banknote locally mid- 2013

    • Ekpo’s family backs apex bank
    The Nigerian Security Printing & Minting (NSPM) Plc will begin printing of the planned N5,000 banknote by mid-2013, its Managing Director, Ehi’ E Okoyomon has said.
    Also, the family of late Margaret Ekpo, one of the three women whose photographs are to appear on the N5, 000 banknote, has endorsed the Central Bank of Nigeria (CBN) currency overhaul plan.
    Speaking yesterday at a conference and exhibition organised by the Association of African Banknotes & Security Documents Printers in Lagos, the NSPM boss explained that the apex bank has already given the firm a specimen of the proposed note. However, it was discovered that NSPM does not have the type of machine to print the new banknote because of a specialised feature included in it.
    “The CBN has shown us the N5,000 design but there is a particular feature in the note that we do not have the machine to print at the moment. But I want to tell you that by mid- 2013, we will have the machine to print the note,” he said.
    The N5,000 banknote billed to be introduced early next year, will be printed by a foreign company.
    There had been public outcry against the introduction of the banknote, but this will not stop the CBN from introducing the currency as approval has been secured from President Goodluck Jonathan. It is the primary responsibility of the apex bank to effect changes in the nation’s currency with the approval of the President.
    The higher denomination will be introduced alongside the new coins of N5, N10, and N20.
    Okoyomon, explained that NSPM currently prints all Nigerian currencies at home, and would commence same for the proposed N5,000 note next year.
    He refuted claims that the N5,000 note is ready and awaiting distribution, explaining that it is difficult to stop counterfeiting of currencies. He said the best option remains to move ahead of counterfeiters by adopting sophisticated technology in printing Nigerian currencies.
    He said his firm receives several counterfeit bank notes seized and sent to it by the  Police, State Security Service, Central Bank and other security agencies. The NSPM boss  said high resolution machines are making digital counterfeiting easier hence, it was necessary for regulators to continually improve on the sophistications and technology used in note printing.
    He said high security features have been added to the proposed N5,000 note to make to ensure that it is not counterfeited.
    Meanwhile, the family of late Margaret Ekpo has endorsed the CBN currency overhaul plan.
    Speaking to journalists at the weekend, Head of Ekpo’s Family, Bassey Ekpo, said the family feels very honoured and delighted that their grandmother is being honored.
    Bassey, Ekpo’s first grandson and Deputy Manager, Well Operations Monitoring, Joint Venture Oil Operations, National Petroleum Investment Management Services (NAPIMS), said her grandmother would have been very pleased for the honour if she had been alive.
    He said the Ekpo family never expected that government will give her this kind of honour, saying she made sacrifices for the development and unity of the country.
    He said her contributions to the nation’s development and unity are still visible.
    Bassey said Federal Government has now recognised her sacrifices, especially on women emancipation and the efforts are being rewarded.
    “The family feels very honored. We are really very delighted that our grandmother is so honored. I want to use this opportunity to thank the President, Goodluck Jonathan, the First Lady, Dame Patience Jonathan, the CBN Governor, Sanusi Lamido Sanusi and all his team that made it possible,” he said.
    He refused to be drawn on the technical details of whether the introduction of N5,000 was necessary at this time, arguing that he is an engineer, nor an Economist, arguing that such questions are better handled by experts in monetary, or economic policies.
    He said his family approved of the three women- Margaret Ekpo, Olufunmilayo Ransome-Kuti and Gambo Sawaba, having their pictures on the proposed N5,000 banknote.

  • Bank recovery fails to reach real economy

    • Lenders worried about loan defaults after 2009 crisis
    The recovery of Nigeria’s banking sector has failed to get credit flowing to the real economy, as high interest rates and a liquidity squeeze funnel money away from businesses or consumers into high yielding government debt, market players have said.
    According to Reuter’s news, years after a credit crisis led to the near collapse of nine lenders, banking capital ratios have recovered, but lenders are piling all their cash into treasury bills at yields that are unlikely to be sustainable, banking analysts, stated.
    Yields have already fallen in the past month, as JP Morgan prepares to include Nigeria’s debt in one of its indices.
    “Eventually banks are going to have to take real economy risks to drive up returns. I can’t imagine that regulators will continue to licence the operation of banks without there being evidence of some lending to the real sector,” said Razia Khan, Head of Africa Research at Standard Chartered Bank.
    Nigeria’s economy grew 6.17 per cent in the first quarter of this year, according to the latest available figures, but credit to the private sector grew just 4.3 per cent by July 2012, while lending to the government shot up 56.5 per cent in that time.
    Interest income now accounts for 50-70 per cent of gross earnings for Nigerian banks, Francis Ikenga, Head of Strategy at Fidelity Bank told Reuters, but it is mostly in government debt.
    “Interest rates and lending criteria are too difficult to meet,” Lagos Household Product saleswoman Titi Adeojo, has said. “We do a lot of deposits,but it’s not easy to get a loan”.
    In 2008, credit to the private sector outstripped government borrowing for the first time, a move which many analysts had thought heralded a consumer driven boom.
    But 6.3 per cent of total loans of N7.4 trillion ($47 bln) granted in 2008 turned bad, Renaissance Capital said, leaving nine overleveraged banks in need of a bailout.
    Banks are reluctant to risk burning their fingers again.
    “Our lending pattern has changed as it is more skewed towards major corporate bodies. Our approval processes, is now more stringent,” said Kayode Fadahunsi, Investor Relations Director at United Bank for Africa.
    Banks worry consumers and firms may not be able to pay back loans at high interest rates, whereas tax free government bond returns are a safe bet at such attractive rates of 15-16 per cent — a huge spread over average bank deposit rates of 1-2 percent.
    “Access to credit is a bit more difficult for the businesses and households,” said Femi Aribaloye, head of risk management at Skye Bank. He said lending rates for big firms like Flour Mills have risen to 14 percent this year, from 12 percent in 2008. For consumers, by contrast, they went up to 33 percent this year, from 22 percent last year.
    “The crisis in the industry seems to be over,” he said. “But investments are largely being channeled to safer outlets.”
    Yet if treasury yields continue to fall, banks over-reliance on them for earnings could hurt profitability down the line.

     

  • SEC, staff row over promotion, postings

    The  relative calm at the Abuja headquarters of Securities and Exchange Commission (SEC) was yesterday ruffled following the deployment of armed policemen around its premises.
    The Nation learnt that the deployment of the securitymen was aimed at forestalling  “any untoward action by the union to register its displeasures against the decision of the management of SEC on promotion and internal redeployments.”
    As early as 7.30 am, a detachment of policemen took strategic positions within the SEC, even though there was no roudiness when The Nation visited.
    It was gathered that SEC’s Director-General, Ms. Arunma Oteh, in an apparent attempt to deepen the oversight and regulatory functions of the SEC on the capital market, last week approved internal re-deployment of staff who have stayed in a position for five years or more.
    The redeployment exercise, it was learnt, was to afford the affected staff the opportunity to have broad knowledge of the workings of the capital SEC ways and means to effectively regulate the market, but the exercise was viewed in a different light by some union members who regarded it as an attempt to witch-hunt perceived ‘anti- Oteh staff.’
    Another grouse against Ms. Oteh, was her stance on staff promotion, as it was learnt that a list of all outstanding promotions had been approved by the immediate past SEC board chaired by Senator Udo- Udoma.
    Instead of endorsing the promotion as approved by the immediate SEC board,  Ms. Oteh, it is alleged, insisted that any such promotion would be earned through  a promotion examination. That decision, it is said, has pitched her against the union.
    A staff who spoke on condition that her identity would be veiled, said examination has never been the basis for staff promotion at SEC, adding that the last management concluded everything in respect to promotions and approved that all outstanding promotions should be effected.
    She alleged that Ms. Oteh on her reinstatement, vowed that promotions would be tied to examination, a situation, she stated, is responsible for the current tension at SEC.
    SEC under Ms. Oteh, has been having a running battle with the staff, who resisted her reinstatement following  her temporary suspension over  an alleged fraud on SEC’s  ”Project 50.’

  • Schneider, ECN, UNDP to implement energy project

    As part of measures by the United Nations Development Programme (UNDP) and Global Environment Facility (GEF) to promote energy efficiency in Nigeria, Schneider Electric has been selected to implement a renewable energy project at the Energy Commission of Nigeria (ECN’s) Headquarters building in Abuja.

    The project which is aimed at showcasing the Energy Commission of Nigeria’s building as a model for public lighting using renewable energy, would include the replacement of all non compliant lighting fixtures in the building with Schneider Electric’s energy efficient LED lamps ‘In-Diya.’

    It will also include the installation of Schneider Electric’s off grid energy solution ‘Villasol’ as well as an upgrade of the building’s electrical distribution network to include metering so that the energy consumption of the building can be measured henceforth.

    Speaking at the event in Abuja, the Country President of Schneider Electric, Mr. Marcel Hochet described the project as a landmark development in the sensitization of the general public on the feasibility and benefits of energy efficient lamps.

    He said, as the global specialist in energy management, Schneider Electric is committed to bringing to the project, its enormous wealth of experience and knowhow to ensure timely completion and delivery.

    He therefore, stated that Schneider Electric is strongly committed to helping people make the most of their energy.This involves making the energy safe, reliable, efficient, productive and most of all, green. “Our fully functional renewable energy project in Asore, Ogun state is a testimony to Schneider Electric’s involvement in renewables industry in Nigeria.”

    Also speaking at the event, the national coordinator of the UNDP-GEF programme, Mr Etiosa Uyigue disclosed that the project’s target was to reduce the buildings’ consumption by up to 50 percent thereby creating an energy efficiency best practice for others to follow.

    The Director-General of the Energy commission of Nigeria, Prof. Sambo who gave a presentation during the event, highlighted that the key barriers to successful energy efficiency practice in Nigeria include a lack of relevant policy, cost versus market ratios, a lack of information as well as wrong human behaviour. He further reiterated that projects that help save energy, eventually save the environment as well as the economy.

    In May 2011, UNDP-Global Environment Facility (GEF) in Nigeria launched an energy efficiency project to promote appliances in the residential and public sector, which had earlier been boosted by a $3 million grant in 2009.

    The four-year’s project is being implemented by the UNDP, while the Federal Ministry of Environment and Energy Commission of Nigeria are among the executing partners of the project that is being funded by GEF. Similar projects have recorded success stories in countries like Ghana, Cuba and Bangladesh.