By Yemisi Olaosun and Gbemisola Adesola

Dean of the Southwest  State Universal Basic Education Board and  Chairman of Oyo SUBEB, Dr. Nureni Aderemi Adeniran, has said the board is committed to enhancing and raising the standard of education in the region (Southwest).

He made this known at the quarterly meeting of the Southwest executive chairmen of the Universal Basic Education Board (UBEC), at the Lagos State Universal Basic Education Board  (LASUBEB)w.

He said the meeting was to aimed at enhancing the development of basic education in the region, adding that education could not be toyed with.

“Southwest has always been the pace-setting zone in the area of education and we don’t want to relinquish that position to any other zone,” he said.

Nureni said their coming together would enable them speak in one voice and get whatever was their right from the UBEC without any discrimination.

The Chairman of LASUBEB, Hon. Wahab Alawiye-King, said the meeting was imperative to  address, review and resolve issues affecting the affairs of the southwest as regards education.

“We need to put up a collective result to address some of the challenges we have identified,so we will decide and take all the decisions at the meeting to our governor to help with  implementation,” he said.

Others at the meeting were Chairman, Osun SUBEB, Hon. Ajibola Famurewa, and his Ekiti State counterpart, Prof. Femi Akinwumi.

A lecturer in the Department of Microbiology, School of Life Sciences of the Federal University of Technology, Minna, Prof. Frank Adamu Kuta, has said the only credible option to control viral diseases in developing countries is the development of indigenous vaccines rather than importing vaccines that may not serve the purpose.

He also said the identification of genotypes of pathogenic viruses in circulation will also help in controlling viral diseases.

The Professor of Medical Microbiology proffered these solutions when he delivered the university’s 77th Inaugural Lecture entitled:  “Knowing the Molecular Heterogeneity of Human Pathogenic Viruses: My Concern and Your Hope”, at the University Auditorium, Main Campus, Gidan Kwano, Minna.

He noted that viral diseases could best be controlled through prophylactic rather than curative measures.

He stressed the need for synergy between government and non-governmental organisations to fund researches that would target the production of indigenous vaccines to be used for the control of viral diseases.

Kuta said the collaborations would be in funding researches in identifying and circulating genotypes of most pathogenic viruses to serve as data for the development of indigenous vaccines.

He also appealed to the government to direct its attention towards the establishment of regional laboratories, equipped with state-of-the-art facilities that would address problems of diagnosis of viral diseases, particularly during epidemics.

Kuta noted that most of the licensed antiviral drugs in use today were not designed based on rational procedures for effective selective toxicity.

He said this explained why almost all antiviral drugs exhibited severe side effects.

The Vice Chancellor, Federal University of Agriculture (FUNAAB), Abeokuta, Prof. Felix Kolawole Salako, has warned that all hands must be on deck to check the excesses of herdsmen who use their cows to destroy farm lands across the country to avoid food scarcity

Salako, who spoke in a chat with The Nation, lamented that the activities of bandits and herdsmen were assuming a dangerous dimension that should be checked, because a lot of farmers, particularly cassava farmers, were losing their produce to herdsmen.

The don regretted that  most of these farmers were suffering in silence and fast losing their farm lands, noting that the majority of them were forced to harvest their cassava before maturation  for fear of losing it to rampaging cows.

The expert in soil science explained that the country is blessed with fertile soil that if well harnessed is a comparative advantage that could translate to good agricultural yield at the end of each planting season. He called for a comprehensive programme that will integrate job seekers in the country.

“The government should invest in soil survey and evaluation which is the hall mark of a good agricultural return in the long run. This is the time we should go all out to do this so that we can secure the future of the country regarding food.”

He urged parents to be up and doing in close monitoring of their children  to have a better society, noting that the youth need ethical reorientation because   abnormalities look normal in their thinking, hence youth waywardness is very rampant in the society.

By Emma Elekwa, Onitsha

Anambra State Governor, Willie Obiano has promised to rebuild the classrooms destroyed by windstorm at the Father Joseph Memorial High School, Aguleri in Anambra East Local Government Area of the state.

No fewer than 100 buildings were reportedly destroyed by the storm in the community, which also wreaked havoc at the Justice Chinwuba Memorial Secondary School in the area.

President of Old Boys Association of Father Joseph Memorial High School, Aguleri, Dr. Emman Ude-Akpeh, expressed shock over the level of destruction of facilities in the school.

He praised the governor for his prompt response in visiting the school to ascertain the level of damage.

He was confident in the synergy of the government and other stakeholders, including the National Emergency Management Agency (NEMA) and the Federal Government to restore normality to the lives of the over 2000 affected pupils.

He said: “For the governor to visit the school with the Commissioners for Works and that of Housing is a clear indication that he is always ready to listen to the yearnings of the people.

“He gave immediate instructions on the spot as to what is to be done. We know that he will do what he said and will wipe away our tears before long.

“On behalf of the entire Old Boys Association, the PTA and the school authorities, we thank him immensely and pray the Almighty God will continue to empower him to continue the great works he has been doing for Ndi Anambra.”

Ude-Akpeh also thanked the Federal Government for sending NEMA alongside SEMA for on-the- spot assessment of level of destruction in the school and other schools and residential buildings affected in the area.

The governor  was received by the Bishop of Onitsha Archdiocese, Most Revd. Denis Isizoh; Principal of the school, Revd. Fr. Anthony Izuchukwu, among others.

 

By Justina Asishana, Minna

A Neuro-Scientist, Dr. Angela Danborno, has presented brain models to secondary schools in Nasarawa State to enable the schools to teach students about the brain, its functions and how to take care of it.

Danborno, a lecturer in the Department of Physiology at Bingham University, Karu, Nasarawa, made the presentation during a Global Engagement Outreach, Teach the Teachers Programme sponsored by the International Brain Research Organisation (IBRO).

She said the brain models would encourage students to develop an interest in studying neuro-science as neuro-scientists are very few in the country, adding that more people needed to come into the profession to promote the mental health of the people.

Speaking to the selected teachers of 17 schools drawn from across the state, Danborno stressed the  importance of the brain.

She appealed to the teachers not to just put the brain model in the science laboratory, but use it to teach students to encourage them to take up the study of the brain.

Danborno who had earlier engaged the people of Karu community on building better mental health, lamented that the level of brain awareness in communities was low and needed to be improved.

She explained that most families and communities did not know anything about the brain and this made them take a lot of self-diagnosis which could lead to brain  damage.

“The programme is to bring to the awareness that the brain is very important and the brain is you because everything about the human body is controlled by the brain,”  she said.

The programme, which  was sponsored by the IBRO, enlightened teachers  on the general introduction of neuroscience, the different parts of the brain and their general functions and exhibition of the different parts of the brain.

Speaking to The Nation after the programme, Favour Iyen of Brainfield College noted that she learnt a lot about the brain and its functions, adding that the programme was enlightening and educative.

Louis Aderomose of St. Philips Academy, Maraba, said she learnt of the dangers of drugs to the brain and how to counsel students who may be going through problems of mental health.

After three years of revamping the first six years of basic education in Edo State, through the introduction of the Edo Basic Education Sector Transformation (BEST) project, the Edo State Universal Basic Education Board (SUBEB) is planning to extend the initiative to junior secondary schools. KOFOWOROLA BELO-OSAGIE reports on the changes it brought to teaching and learning.

The Edo State Basic Education Board (SUBEB) has announced  plans to extend the Edo Basic Education Sector Transformation (Edo BEST) to government-owned junior secondary schools.

This follows three years of implementation of the technology-based initiative which provides teachers with standardised lesson notes programmed into tablets, and pedagogical and classroom management skills, to enhance learning outcomes in 870 of 1,056 public primary schools in Edo State.

In an interview on the sidelines of activities to mark the third anniversary of Edo BEST, the SUBEB Chairman, Dr. Joan Osa Oviawe, said the decision to extend the initiative to secondary schools was informed by its success at the primary school level.

Before Edo BEST, she said, little was happening in public schools in terms of teaching, learning and co-curricula activities. She said there was high rate of absenteeism, dereliction of duties and lopsided deployment of teachers in favour of the urban centres.

She said: “In an environment where accountability and transparency were not the typical norm, trying to introduce those two important attributes into any system,you are bound to face resistance and backlash. For instance, when we came in, the distribution of teachers across the 18 local government areas was very lopsided. We had the bulk of our teachers in the urban centres. We had up to 40 excess teachers in one school. So they will just create arms of classes and, in each class, they don’t have more than 10 to 15 pupils. There was a massive waste of resources.

“Another thing we encountered when we came in, was the practice of having multiple schools in one compound, so a compound will have four different schools and four different sets of uniforms and teachers and four sets of administrations and so in trying to do a more wholistic transfer of teachers, we discovered that in pushing the teachers to semi-urban areas, there was still resistance.

“Another challenge that we faced was their general attitude to work and there was a certain kind of deception that it was the remnant that attended public school, so therefore, their learning was expendable. So you found that any teacher could just take off for weeks without going to school and still collect their salaries.”

Though Edo BEST started as a pilot in a few schools, Oviawe said scaling up to cover most schools happened early because the situation was so bad.

She said the baseline assessment revealed that many pupils could not read – with some in Primary Four at pre-primary reading levels.

Oviawe said: “Before Edo BEST was launched in April 2018, between February and March 2018, we carried out what we called pupils’ diagnostics to be able to determine where our pupils were in terms of learning. In 2017 between October and November, we also did a school census across the state to determine the number of pupils and teachers we had in our system because it was the intention of Governor Obaseki that if we don’t know the number of pupils and teachers we won’t be able to plan well . Through that initial census, we were able to discover quite a number of anormalies that we needed to rectify to ensure that a reform programme would begin on a strong note. From the pupils diagnostics we carried out across the three senatorial districts in both urban and rural schools, we discovered that on the average our pupils were behind. In some cases there were pupils in Primary Three and  Primary Four below the level of Primary One.”

To remedy the situation, the SUBEB chair said Edo BEST introduced a cross grade reading programme that grouped the pupils according to their reading abilities rather than their grades, and learning took off from there.

The evidence of improvement was tested as part of the activities commemorating the Edo BEST anniversary through a reading and fluency competition involving pupils from rural and urban schools across the state.

The winner of the competition was 10-year- old Florence Patrick, a pupil of Owina Primary School, Idunmwowina in Ovia North East Local Government Area of Edo State, a rural school.

The Primary Five pupil achieved the highest speed and fluency of 189 words per minute – a feat Oviawe said was worth celebrating as she noted that children from developed countries achieve an average of 180 words per minute.

Florence’s teacher, Mrs. Roseline Eke-Ebiyo, told The Nation in an interview, that the pupil who joined her school two years ago from a private school had improved tremendously.

She said the introduction of the Edo BEST had led to general improvement in learning outcomes of public school children and boosted their confidence in relating with their private school counterparts.

“It is just like telling someone that black can become white and he begins to imagine how possible it is. And gradually flashes of white begin to show. That is the innovation that Edo BEST achieved. In those days, public school children could not express themselves. But now, our children have learnt a lot in English and Mathematics. That shyness has been eradicated due to what Edo BEST has taught them. I am giving 90 per cent from what we had before. The difference is clear,” she said.

Mrs. Eke-Ebiyo said the introduction of Edo BEST led to the depletion of the population of three private schools in her community.

“Those of them that came from private schools saw the difference. The girl that won the award came from a private school two years ago; she said there was a difference. A lot of things she did not know when she was in private school, she clearly understands now.”

For teachers, Mrs. Eke-Ebiyo said Edo BEST transformed them from analog to digital teachers.

“It moved us from analog to digital. Now we don’t write lesson notes. The pattern of teaching is quite different; there is a close monitoring of pupils in class now.

She, however, appealed to Edo State Governor, Mr. Godwin Obaseki, to expand the classroom facilities as the school had become over-populated – having over 100 pupils in classes that once had 55.

“The school needs at least a block of six classrooms. I know at least three private schools that do not have population because of Edo BEST. The governor should please provide more facilities,” she said.

Chairman School Based Management Committee, Adesuwa Primary School, GRA, Benin, Mr. Albert Iyamu said Edo BEST had restored parents’ confidence in public schools.

“Edo BEST impacted greatly on schools.  Parents who hitherto could not afford good education for their children could now attend good government schools wehre the right norms are in place.  The teachers, pupils, they do what is right as per teaching and learning.

“Before this time public schools were seen as places where you go to do things that are not necessarily right.  Private schools were what are in place.  But now because of Edo BEST, people now take their children from private schools to public schools and the desired results, they get,” he said.

As the government addresses the need to expand infrastructure in its schools because of Edo BEST, it still has186 primary schools yet to begin implementation of the initiative.

When asked how SUBEB was addressing the lacuna, Dr. Oviawe said the board sent Quality Assurance officers to schools regularly, who ensure there is no dereliction of duty. She assured that the remaining schools would join soon.

On the extension of Edo BEST to secondary schools, Oviawe said Obaseki had approved the extension, which would start with the JSS1 classes in the state’s 305 secondary schools.

She said the secondary school teachers would be trained like their primary school counterparts who now use standardised lesson notes programmed in tablets to teach.

Oviawe, who has a doctorate degree in Primary and Secondary Education reforms, said many of the 3,000 teachers the state newly hired to resume in May, would be posted to fill in the gaps in the schools.

 

 

In its effort to promote financial literacy and early saving culture, Keystone Bank Limited recently tutored over 3000 secondary school students across Nigeria as part of its activities to mark this year’s Global Money Week and The Financial Literacy Day themed, “Take Care of Yourself, Take Care of Your Money”.

The Financial Literacy Day is set aside by the Central Bank of Nigeria (CBN) with the aim of instilling healthy financial practices and skills in children for them to have a secure future.

To commemorate this year’s anniversary, senior employees of the Bank visited 37 schools across the states to empower students with knowledge on how to manage their finances, the importance of acquiring and earning money, creating livelihoods, becoming entrepreneurs, budgeting, and tips to imbibe the culture of saving.

Read Also: How I escaped death covering the Civil War, by Sobowale

Acting Divisional Head, Marketing and Corporate Communications, Keystone Bank, Izore Bamawo, said that the programme would help drive financial inclusion and promote a healthy saving culture amongst children.

“Keystone Bank is committed to continuously encouraging financial inclusion and supporting financial literacy amongst children as it will help enhance their financial acumen thereby producing financially sound individuals,” she said.

Bamawo further noted the initiative which aligns with the bank’s Corporate Social Responsibility (CSR) pillars on education and youth empowerment would help young people gain financial freedom through prudent money management and clear differentiation of needs and wants.

The Nigerian Communications Commission (NCC) has reviewed the financial health of its licensees as a result of the systemic crisis associated with huge indebtedness and huge deficits in shareholders’ funds. The outcome of the review was worrisome. LUCAS AJANAKU writes on steps to ensure liquidity and strengthen corporate governance.

 

 

Establishing an optimal capital structure is one of the critical decisions that the managers of an organisation have to make.

Capital structure depicts the manner in which a licensee finances its operations and growth by using various sources of funds, the two major sources of finance are debt and equity.

Debt can be in the form of long-term loans, bonds and long-term notes payable, while equity is in the form of retained earnings, preferred stock and common stock. Therefore, capital structure is the mix of different securities used in financing a firm’s investment and each of these sources of finance is associated with different levels of risk, return and control. Licensees can use either debt, equity or both to finance their operations and in the balance sheet, the capital structure is represented as the ratio of debt instruments, common stock and preferred stock. Yet, a key part of this is that company structure involves making a decision on the proportion of equity and debt a firm uses to finance is operations. Another key part also involves a decision on the level of long-term to short-term debt that a firm uses to finance its operations.

According to a new report entitled: Consultation Paper on Determination of Capital Structure for Licensees in the Communications Sector in Nigeria, the NCC in March, last year set up a committee to review the  capital structure in the sector and determine whether there is a need to set any benchmarks or parameters. The Committee conducted a Technical Review (TR) the result raised concerns and accentuated the widespread issues on capital structures and unsustainable debt to equity ratios of a substantial number of the licensees. This requires a mechanism that will pre-emptily set parameters and monitor compliance; this is both imperative and a necessity that will protect the market.

“It is clear from the outcome of the TR that the Commission needs to act in a timely manner, to forestall a systematic and sector-wide collapse and its possible impact on the economy and national security of Nigeria. Clearly the outcome of the TR of the sampled licensees supports the need for a consultation process that will facilitate a determination of an ideal capital structure that will protect and sustain the communications sector in Nigeria.

According to the regulator, there are many premises for determination of capital structure of its licensees as envisaged by Section 4 (q) of the Nigerian Communications Act 2003. First, such determination will ensure the market stays stable and fairly competitive with tangible assets that provide both liquidity and sustainability. “Tangibility in this context refers to the durable noncurrent asset of a licensee. The tangible assets can serve as collateral and thus can be used by a licensee in obtaining long term debt. This implies that a licensee with tangible asset can utilise more of debt in its capital structure because the tangible asset will serve as collateral for the security of the loan. This has made it very easy for tangible firms to access long-term debt as against firms with low tangible assets. Thus, this is a key premise for the Commission to set parameters for the sector.

“The second premise is that a high degree of liquidity implies a lower degree of debt. An optimal level of liquidity presumes less requirement for borrowing and external funds,” the document said.

Based on this premise the licensees should ensure an optimal level of liquidity in order to fulfill their engagement and the Commission will be conscious of the sizes of the licensees in making such determination. This demarcation will ensure that the parameters will differ based on the nature of licences and company sizes, this will ensure efficiency and fairness in determining compliance.

The third premise, it added, is that the Commission can determine the borrowing capacity of its licensees and ensure that the debt-to-equity ratio is sustainable and the licensees remain financially healthy through proper leveraging. This leveraging will protect licensees and guide the sector to avoid any systematic debt crisis that may impact on other licensees that may have leveraged their ratios adequately. Therefore this determination will be key as the market keeps maturing and its revenue sources are stretched by competition and market saturations.

Negative equity positive equity context refers to the durable noncurrent asset of a Licensee. The tangible assets can serve as collateral and thus can be used by a licensee in obtaining long term debt. This implies that a licensee with tangible asset can utilize more of debt in its capital structure because the tangible asset will serve as collateral for the security of the loan. This has made it very easy for tangible firms to access long-term debt as against firms with low tangible assets. Thus, this is a key premise for the Commission to set parameters for the sector.

The second premise is that a high degree of liquidity implies a lower degree of debt. An optimal level of liquidity presumes less requirement for borrowing and external funds.

Based on this premise the licensees should ensure an optimal level of liquidity in order to fulfil their engagement and the Commission will be conscious of the sizes of the licensees in making such determination. This demarcation will ensure that the parameters will differ based on the nature of licences and company sizes, this will ensure efficiency and fairness in determining compliance.

The third premise is that the Commission can determine the borrowing capacity of its licensees and ensure that the debt-to-equity ratio is sustainable and the licensees remain financially healthy through proper leveraging. This leveraging will protect licensees and guide the sector to avoid any systematic debt crisis that may impact on other licensees that may have leveraged their ratios adequately. Therefore this determination will be key as the market keeps maturing and its revenue sources are stretched by competition and market saturations.

The Commission, in determining the capital structures of its licensees, will consider several elements which will provide the guidance for setting the parameters and benchmarks. It will also facilitate the building of a sector-specific approach to determination of capital structures of its licensees. Accordingly, the following elements will be considered.

The Commission in determining the capital structure of its licensees will look at paid up share capital, capital reserve, general reserve, revaluation reserve (tangible assets) and retained earnings which are all  components of a licensees’ shareholders’ fund.

The Commission will review reserve as a credit balance and refer to a part of shareholders’ equity, a liability for estimated claims, or contra-asset for uncollectible accounts. “A reserve can appear in any part of shareholders’ equity except for contributed or basic share capital. There are different types of reserves used in financial accounting like capital reserves, revenue reserves, statutory reserves, realized reserves, unrealised reserves.The Commission’s focus will be on equity reserves created from several possible sources such as reserves created from shareholders’ contributions, the most common examples of which are:  Legal reserve fund – it is required in many regulatory instruments issued by the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC). This reserve is required to be paid as a percentage of share capital. This is referred to as paid up share capital under the Companies and Allied Matters Act 2020 in Section 383,” the report added.

Others are share premium – amount paid by shareholders for shares in excess of their nominal value; reserves created from profit, especially retained earnings, i.e. accumulated accounting profits, or in the case of nonprofits, operating surpluses.

However, profits may be distributed also to other types of reserves, such as the general reserves created to be utilised for meeting any unknown liability. The Commission will review general reserve, which is created by appropriation of profits. It is created without any specific or particular purpose. The aim of creating a general reserve is to provide additional working capital or to strengthen the cash resources of the business, out of profits of the company, from profit and loss appropriation account, any available additional working capital for the licensee from other sources, equalizing the rate of dividend in the years in which profits are inadequate.

However it will be used for the purpose only when separate dividend equalisation reserve is not created.

Revaluation reserve

The Commission will consider revaluation reserve as a non-cash reserve created to reflect the true value of the asset when the market value of the certain category of asset is more or less than the value of such asset at which it is recorded in the books of account. Any increase in value will be credited (increase the reserve a/c) to this account and any decrease in value will be debited (decrease the reserve a/c) to the account.

This reserve’s purpose is to reflect and account for in the books, the real and fair value of an asset. It is expressly excluded from free reserves, and hence this reserve is not available for distribution of dividends to shareholders.

The Commission will consider retained earnings as a representation of a useful link between the income statement and the balance sheet, as they are recorded under shareholders’ equity, which connects the two statements. The purpose of retaining these earnings can be varied and includes buying new equipment and machines, spending on research and development, or other activities that could potentially generate growth for the company. This reinvestment into the company aims to achieve even more earnings in the future.

If a licensee does not believe it can earn a sufficient return on investment from those retained earnings (that is earn more than its cost of capital), then it will often distribute those earnings to shareholders as dividends or share buybacks.

“The main tool for determination of capital structure is the valuation of shareholders’ funds yields, which is an approximation of theoretically how much the shareholders would receive if a licensee were to liquidate. The amount of shareholders’ funds can be calculated by subtracting the total amount of liabilities on a company’s balance sheet from the total amount of assets. Likewise, shareholder equity also referred to as shareholders’ equity is the licensee’s owners’ residual claim on assets after debts have been paid. Equity is equal to a firm’s total assets minus its total liabilities. Shareholder equity can be either negative or positive. If positive, the company has enough assets to cover its liabilities. If negative, the company’s liabilities exceed its assets; if prolonged, this is considered balance sheet insolvency. For this reason, many investors view companies with negative shareholder equity as risky or unsafe investments. Shareholder equity alone is not a definitive indicator of a company’s financial health; used in conjunction with other tools and metrics, the investor can accurately analyze the health of a licensee. All the information needed to compute a company’s shareholder equity is available on its balance sheet. Total assets include current and non-current assets. Current assets are assets that can be converted to cash within a year (cash, accounts receivable, inventory). Long-term assets are assets that cannot be converted to cash or consumed within a year (for instance investments; property, plant, and equipment; and intangibles, such as patents),” the report noted.

Total liabilities consist of current and long-term liabilities. Current liabilities are debts typically due for repayment within one year (e.g. accounts payable and taxes payable). Long-term liabilities are obligations that are due for repayment in periods longer than one year (e.g., bonds payable, leases, and pension obligations). Upon calculating the total assets and liabilities, shareholder equity can be determined.

Shareholder equity, it pointed out,  is an important metric in determining the return being generated versus the total amount invested by equity investors. For example, ratios such as return on equity (RoE), which is the result of a company’s net income divided by shareholder equity, is used to measure how well a company’s management is using its equity from investors to generate profit.

On debt-to-equity ratio, it said it is a financial ratio indicating the relative proportion of entity’s equity and debt used to finance an entity’s assets. This ratio is also known as financial leverage. Debt-to-equity ratio is the key financial ratio and is used as a standard for judging a company’s financial standing. It is also a measure of a company’s ability to repay its obligations. “When examining the health of a company, it is critical to pay attention to the debt/equity ratio. If the ratio is increasing, the company is being financed by creditors rather than from its own financial sources which may be a dangerous trend. Lenders and investors usually prefer low debt-to-equity ratios because their interests are better protected in the event of a business decline. Thus, companies with high debt-to-equity ratios may not be able to attract additional lending capital.

“Optimal debt-to-equity ratio is considered to be about 1, liabilities = equity, but the ratio is very industry specific because it depends on the proportion of current and non-current assets. The more non-current the assets (as in the capital-intensive sectors), the more equity is required to finance these long-term investments. In general, a high debt-to-equity ratio indicates that a company may not be able to generate enough cash to satisfy its debt obligations. However, a low debt-to-equity ratio may also indicate that a company is not taking advantage of the increased profits that financial leverage may bring.

“Debt to equity ratio is a capital structure ratio which evaluates the long-term financial stability of business using balance sheet data. It is expressed in term of long-term debt and equity. Investors, creditors, management, government etc view this ratio from their different angles influenced by their objectives.

“Therefore, the meaning and interpretation of this financial ratio vary with the objective with which it is looked at. Debt equity ratio, a renowned ratio in the financial markets, is defined as a ratio of debts to equity. It is often calculated to have an idea about the long-term financial solvency of a business. A business is said to be financially solvent till it can honor its obligations viz. interest payments, daily expenses, salaries, taxes, loan installments,” it stressed.

On the borrowing capacity of licensees, the report said the current regulatory prescriptions of the communications sector as it relates to borrowing by licensees is hinged on general licensing conditions that are reactive in most instances.

“First, it is a key licensing condition that where a licensee is changing its shareholding structure up to 10 per cent, it is required to obtain prior written approval of the Commission. This in many ways regulate any injection of equity, whether as an investment or debt related placement.

“Secondly, it is a general licensing condition that a licensee cannot assign or pledge its licence without a prior written approval of the Commission. This is to forestall the arbitrary use of the licence as a collateral or security for untenable loan facilities. The third licensing condition states that the inability of a licensee to pay up its debts is a ground for suspension or revocation of the licence.

“The determination of capital structure will create a requirement to approve borrowing by licensees, this is to ensure a pre-set parameter is not breached and a financial standard maintained. Therefore, a determination of capital structure will create a regulatory need to have an oversight over indebtedness in the sector, through prior approvals and continuous monitoring,” stated the report.

The acceptable computation of capital base, it explained can be arranged in a sequence that facilitates a review of a licensees’ current capital structure as well as determination of any parameters set for the capital structure.

The Commission will look at assets mix ratio which will be based on a minimum capital base as will be prescribed by the Commission for different licensing categories. The liquid assets are cash, bank deposits, treasury bills, collective investment schemes, bonds, quoted/unquoted securities and related investments. The Commission will set the ratio based on the different parameters that may be set based on licensing categories. This will also take into cognizance licensees that are already listed on the Nigerian Stock Exchange (NSE).

“Furthermore in this determination, the Commission will use different methodologies to determine the asset mix of a licensee. This will be an approach for analysing investments and determining appropriate allocations based on risk preferences and risk management objectives.

“Asset allocation portfolios are a blend of both equity and fixed income asset classes. The historical risk and return of these two asset classes will guide the Commission to achieve a balance of risk and potential return using both equity and fixed-income investments benchmarks. This will be a guiding principle in determining the asset mix of a licensee,” it said.

Another is capital injection by shareholders. The Commission will set the rules for determination and confirmation of capital injection by shareholders of a licensee, this is to ensure fair assessment and transparency in the investment. This will also set the foundation for determination of the actual equity and allot it properly to the shareholders.

A shareholder injection occurs any time a company’s existing shareholders put cash into the business. In return for this cash they receive either additional shares or if the injection takes the form of a shareholder loan, a promissory note. A shareholder redemption occurs when the company takes cash out of its accounts to buy back shares or repay a shareholder loan. When shareholders receive additional shares for their injection, the company’s total shareholder equity account increases and the debt-to- equity ratio improves because the company has increased its amount of equity while its debts remain the same.

When shareholders provide a shareholder loan and receive a promissory note, the company’s total liabilities increase and its debt-to-equity ratio worsens. This can be avoided if the shareholder signs a subrogation agreement that that technically reclassifies the debt as patient capital.

When this is done, the injection is looked upon as equity. The Commission will review this in line with any parameters it may set.

On transfer of landed assets, the report said the Commission will set the standards for transfer of landed property as an investment by a shareholder in a licensee, whether individual or corporate. This will provide guidance on valuation of the property, location of the property, nature of instrument supporting ownership and consent of relevant authorities.

The Commission will set the standards for transfer of quoted securities as an investment by a shareholder, whether individual or corporate, in a licensee. This will provide guidance on valuation of the securities, location of the stock market, nature of instrument supporting ownership and consent of relevant authorities.

The Commission will set the standards for transfer of other tangible (non- current assets) as an investment by a shareholder, whether individual or corporate, in a licensee. This will provide guidance on valuation of the assets, location of the assets, nature of instrument supporting ownership and consent of relevant authorities.

On the mechanism for determination and compliance, the Commission will rely on review of financial statements and audited accounts

The Commission understands that capital structure is a mixture of debt and equity that is utilized by a company’s operations and there is a close relationship between that mixture and the actual performance of its licensees. This identified relationship between capital structure and corporate performance will facilitate the review of a determined and optimal model capital structure. The review of financial statements and audited accounts of licensees will facilitate the determination of an ideal capital structure and subsequently serve as a fulcrum for confirmation of compliance with the set parameters for each category of licensees.

It said the Commission will set compliance benchmarks for different category of licensees with clearly defined parameters. This will ensure that impacted licensees have adequate information that will guide their development of compliance processes to meet the requirements of any regulatory prescriptions that might be issued by the Commission.

The Commission will develop an implementation approach that will rely on the ‘bucket list’ strategy, this will ensure that licensees are aggregated into separate lists based on types of licences, company size and current performance. Hence the implementation will be piloted, staggered and finally adopted across board. This approach will ensure that the impact of the possible regulatory requirement will be managed and licensees will have adequate timelines to build compliance capacity.

“The reporting requirements and any changes to existing processes will also tow the same line and such requirements will be phased and properly aggregated to ensure fairness in implementation of any regulatory instrument in that regard. Reporting requirements will be set out with timelines and guidance notes that will outline what will constitute adequate compliance and remedial procedures where necessary,” it said, adding that there will be regulatory implementation timelines which would start with consultation process and stakeholders engagement. This would be followed by the development of a draft framework/guidelines; issuance of a regulatory instrument; commencement of a pilot implementation process; commencement of a staggered and structured implementation process; and compliance review and implementation audit.

By Nsa Gill, Calabar

Five officials from the Nigeria Erosion and Watershed Management Project (NEWMAP) and the Federal Ministry of Environment assisted by the World Bank on assignment to verify claims in a petition by some group of persons over the Ikot Nkebre Erosion project sites in Calabar, Cross River State on Monday escaped attack by suspected hoodlums.

The officials, who arrived the project-site office of the contractor AKPAVEN Nig. Limited, handling the $3million World Bank sponsored Ikot Nkebre Erosion management project, fled after policemen had cause to release teargas canisters to disperse the hoodlums who stormed the site office of the contractor.

Eyewitness said the hoodlums stormed the contractor’s office around 10am in two hillux trucks and five motor bikes.

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“What I heard them saying was that they (thugs) came to warn the company not to allow any of their trucks outside their premises until they settle their problem with the government.

“They said, otherwise if any truck is seen outside the company premises, it will be impounded and the driver will be beaten up.

“As they were issuing the threats, the World Bank assisted officials of NEWMAP drove in. One of the Special Adviser to the Governor on NEWMAP who was around the scene and tried to take pictures with her phone was accosted with slaps by the thugs and forced to delete the pictures from her phone. That was the point the Police shot teargas to disperse the thugs,” an eyewitness said.

Commissioner for International Development and Cooperation whose Ministry is overseeing the NEWMAP office and projects in acting capacity, Dr. Inyang Asibong, confirmed the attack.

She said: “You know the communities have, two factions or there about, so it’s possible for them to be fighting themselves”.