The Nation Newspaper

Tag: capital

  • Oyedepo to govt: sell intellectual capital not national assets

    Oyedepo to govt: sell intellectual capital not national assets

    •Covenant Varsity clocks 14

    Nigeria has enormous intellectual resources that can be marketed globally and the profit can help save the economy, rather than sale of national assets, Founder of Covenant University Ota, Ogun State, Bishop David Oyedepo has said.

    The cleric said this in a keynote address at the university’s seventh inaugural lecture series, entitled: “Deconstructing the national development agenda: The role of Information and Communications Technologies (ICTs)”, at the weekend.

    The lecture was presented by a professor of Computer Science and immediate past Vice Chancellor of CU Charles K. Ayo.

    The lecture also formed part of activities marking the university’s 14th anniversary.

    Bishop Oyedepo, in his address, themed: “Sell intellectual capital, not national asset”, said Nigeria’s penchant for foreign goods and services, regardless of the quality, would continue to soar, except both the leadership and the led remain committed to the Nigerian project.

    He emphasised that God has blessed Nigeria with enormous intellectual resources that could be marketed rather than the proposed sale of assets.

    The cleric noted that governments have demonstrated lack of interest in funding public education, adding that the citizenry too have lost interest.

    According to him, those who could not send their wards to study overseas, now choose neighbouring African countries, some which he said, were poles apart from Nigeria in standard of education.

    “I have been to Ghana. Many of the schools they have there are glorified secondary schools; but Nigerians still go there because many have lost interest in our education and government is not helping matters,” Bishop Oyedepo said.

    “We must admit that we have problems from education to health to governance. However, problems are like a sore, which keep enlarging if they are not attended to.

    “The problems are obvious but God has deposited adequate resources to deal with them.  Let us see these challenges as potentials to leap into the future that we all anticipate.”

    “It is about time governments in Nigeria redirects their energies to education. Like the guest lecturer said, we need to open up more opportunities to Nigerians through Open Distance Learning. An educated citizenry can add more value to the economy.

    “Even if government does not have up to N40 billion, let’s know what they have. But if they claim they have nothing, then there is no value because every developed society thrives on education that is well-funded,” the cleric said while alluding to Ayo’s recommendation of N40 billion to each public university annually to make them globally competitive.

    He assured that CU would continue to set a benchmark in the deployment of ICT, financial efficiency and good governance.

    Praising Ayo for the lecture, Oyedepo lauded him for espousing through his various researches and deployment of ICT solutions in addressing challenges of governance in Africa.

    In his lecture, Ayo lamented that education has suffered perennial underfunding and resulting in vices such as cultism, examination fraud, system abuse and corruption.

    Ayo alleged that today, “Nigeria produces less leaders, but mass produces miscreants”.

     

  • N5b capital market development fund coming

    N5b capital market development fund coming

    The Securities and Exchange  Commission (SEC) is planning a N5 billion Capital Market Development Fund (NCMDF) to promote infrastructural development of the capital market.

    A source said the regulator would provide the cash to demonstrate its commitment to the special fund.

    Earlier, SEC provided N5 billion initial capital for the Nigerian Investor Protection Fund (NIPF).

    The source said the NCMDF was conceived as a trustfund to enhance the development of the market.

    The source added that the proposal for the NCMDF to take custody of statute-barred and unclaimed dividends of 12 years and above was part of efforts to ensure that the seemingly “free funds” were put to the collective use of the market to enhance future returns to investors, adding that the NCMDF will be managed by a board and an  independent fund manager without interference from SEC.

    SEC had last week launched the plan for NCMDF. In a circular  to capital market stakeholders, the regulator called for a consideration of a new rule that will set up the NCMDF, which will take custody of all unclaimed dividends that are 12 years old and above. SEC estimates unclaimed dividends to be about N80 billion, with nearly half of the money unclaimed for  years.

    Under the laws, unclaimed dividends will remain available for collection by beneficiaries up till 12 years when they become statute-barred and are returned to the companies that paid them. The  rule seeks to change the return of the unclaimed dividends to companies that issued the dividends.

    According to SEC’s proposed “rule on application of 12 years and above unclaimed dividends”, companies and registrars in custody of dividends which remain unclaimed by shareholders 12 years after the date of declaration or subsequently attain the 12 years threshold shall upon the coming into effect of this rule transfer such monies into the Nigerian Capital Market Development Fund (NCMDF).

    “All companies and registrars shall not later than 30 days after the end of every calendar year forward to the Commission a report of unclaimed dividends in their custody, which shall specify compliance with Sub Rule (1) of this Rule. Companies shall disclose details of compliance with this Rule in their annual reports,” SEC stated.

    Major retail shareholders’ groups have risen against the plan to return statute-barred unclaimed dividends to NCMDF, describing it as a ploy to divert private funds into the control of the regulator.

    Shareholders’leaders across the groups said they would resist the transfer of statute-barred unclaimed dividends to any NCMDF, describing the plan as a wrong move and a volte face from the recent campaign by SEC for the removal of the 12-year limit to enable shareholders and their beneficiaries collect their dividends at any time.

    Independent Shareholders Association of Nigeria (ISAN) National Coordinator, Sir Sunny Nwosu, said his group would mobilise shareholders to resist what he described as “very offensive” attempt to take their private monies.

    Shareholders’ activist and  Nigeria Shareholders Solidarity Association (NSSA) Co-founder, Alhaji Gbadebo Olatokunbo, said the plan would lead to corruption and discourage investors from the domestic market.

    Constance Shareholders Association of Nigeria Coordinator, Mallam Shehu Mikhail, said the rule on return of statute–barred dividends to companies should be retained.

    He criticised the plan by SEC for lack of details on benefits of such initiative to shareholders and the quoted companies.

    However, the Association for the Advancement of Rights of Nigerian Shareholders (AARNS) President, Dr. Faruk Umar, described the plan by SEC as a healthy development, noting that the trustfund would discourage sharp practices around the unclaimed dividends.

  • Wema Bank to raise N50b Tier-2 capital

    Wema Bank to raise N50b Tier-2 capital

    Wema Bank Plc is raising N50 billion tier two capital through bonds to enable it deepen its market penetration and profitability, its Managing Director, Segun Oloketuyi, has said.

    Speaking at a briefing at the weekend, in Lagos, the bank chief said N20 billion would be raised in the first few weeks while the remaining N30 billion would come in the near future.

    “We will increase the drive of the ongoing cost containment initiatives and leverage on technology to increase efficiency across our channels and platforms. The bank will also be raising additional debt capital in the next few weeks to further give it the necessary leverage to drive growth,” he said.

    Continuing, he said: “We are doing debt capital. It is a tier two capital and it is a bond. The bond will open very soon, it is a N50 billion issuance programme, but we are doing it in two tranches. The first tranche is N20 billion, and the second tranche is N30 billion. So, we are taking N20 billion first, and sometimes in the near future, and as the need arises, we will take on the balance of N30 billion,” he disclosed.

    Oloketuyi said the bank has witnessed a turnaround since the new management took over in June 2009, adding that before the coming of the new management, the lender had a negative capital position of N45 billion, with the lender virtually on its knees. He said the new management has grown the bank’s shareholders’ funds to N46 billion.

    Explaining further, he said the lender previously had less than one per cent market share, and ran on obsolete technology, while non-performing loans (NPLs) stood at 89 per cent. But with the new management, the NPLs have dropped to 2.9 per cent while profitability has risen to new heights.

    “So, we had to start to look at what to do with the bank and therefore, developed a containment strategy focusing on how to stabilise the bank. The periods of 2010 to 2014 was largely used to give life back to the bank. So, the first major assignment we had to do was to secure the regulatory capital. We had to recapitalise the bank, which we did,” he said.

    Wema Bank boss said the lender received the Central Bank of Nigeria’s (CBN’s) final approval to convert from regional to national bank. The bank, he added, is also driving its growth with new products and technology.

    For instance, it unveiled the card control platform, which gives customers absolute control of their cards both in Nigeria and abroad. The bank has received lots of testimonials based on the introduction of the product.

    “The bank equally launched the Buxme platform, a social account that allows people to transfer money using their email or phone numbers, and has over 4,000 registered users as at August 15.

    The lender also introduced the *955#, which enabled it to increase customer acquisition and makes banking convenient for users. The product has enabled the lender to reduce its cost of service with over 3,539 accounts opened on *945#”.

    Speaking further, he said in spite of the challenges in the economy and in the industry, the lender remains optimistic about its future. “Our retail focus is beginning to yield good numbers and we are already ramping up efforts to ensure that we deliver on the promises to our stakeholders. In addition, the journey to lead the digital landscape is critical as it will propel us to the front of the industry,” he said.

    He said the bank has also received final approval from the CBN’s to convert its banking license from regional authorisation to national authorisation. “The bank now operates as a full-fledged commercial bank in all geo-political zones and the Federal Capital Territory (FCT). The bank is fully prepared to scale up its operations to cover locations in the north and eastern parts of the country. We expect to re-open five branches in the next three months in Kaduna, Lokoja, Minna, Aba and Enugu,” he said.

  • ‘We’re using NSIA capital to catalyse other investors’

    ‘We’re using NSIA capital to catalyse other investors’

    Two weeks ago, the Nigeria Sovereign Investment Authority (NSIA) entered into partnership with Old Mutual Investment Group and UFF African Agri Investments, two foreign companies, in a $700million joint venture in agriculture and real estate development, that NSIA’s Managing Director Uche Orji views as catalyst to opening up the untapped potential in those sectors as never before. He spoke with Group Business Editor, SIMEON EBULU.

    It’s not quite easy to strike this kind of deal in a recession. How were you able to pull this through?

    It’s not recent, the discussions have been going on for some time. The timing is largely by design and also by coincidence. There are two ways you view every recession, it’s either you run away or you take advantage of the opportunity. For investors of like minds, who can see through the cyclical downturn, it’s a cycle. Things go up, they come down, almost every economy is in cycles. And we are going through a cycle. As the government has admitted, we are in a recession, there are challenges in the economy, but that is also a buying opportunity for people. It’s an opportunity to come in and invest, and take advantage of the relatively lower prices for assets. Frankly, I see this as an opportunity that its time has come. And we will move very quickly in terms of the deployment of the capital.

    And, if I may use a football parlance, form is temporary, class is permanent, and it very much applies here. The cyclical downturn is temporary and smart investors use that as an opportunity to buy into the market and buy into assets.

    There are two classes of investors, there are real investors and there are momentum traders – people who come in and when things are moving, they just buy something. Those are hot money investors, those are not the kind of investors we are looking for. So, if you believe the economic potential that brought people into this country is past, if you believe that in this one cycle (the recession) it is  completely reversed, then you can leave, but if you believe – longer-term that this is just a temporary patch, that there is longer term opportunity and if you have liquidity, then you invest. And that’s what we have done with this.

    The NSIA thus have the liquidity and our partners have liquidity, and we both believe that this is a great opportunity to buy into assets in the country.

    So, I’m happy that this happened, and as I’ve said before, we are using NSIA capital to catalyse other investors.

    This is agriculture, real estate, and you’ll see next, hopefully before September is out, you will see us announce a Social Impact Fund – similar catalytic fund that will raise huge amount of capital, with NSIA providing some catalyst.

    We have spoken about doing something in power, healthcare. We will commence our healthcare projects this year.

    There will be groundbreaking of the projects and we will start to build in Kano, and Umuahia. Our LUTH project is also starting.

    There is a remarkable opportunity for us now to invest, and I think other investors we are planning to work with, see it the same and that is why this is quite groundbreaking.

    What informed your decision to invest in real estate and agriculture?                           

    For real estate, it took us a period of working together – people don’t know this, but we’ve been working together with the Old Mutual Investment Group  since February, 2014. And most of it, we’ve been looking through assets. And over time, we’ve learned how to work together and through the process, we said, why don’t we form a joint company, we put capital in, you put capital in and we form a team, and we start investing.

    The same thing with agriculture. The first meeting with the Agriculture Team was in early last year. And that has now evolved. We saw what they did in South Africa. They came to Nigeria – two, three times. We saw the opportunity in the country. We surveyed a few things and built up a reasonable pipeline of what we can do together, and then we said, why don’t we do it as a joint venture, a joint company. So, these things didn’t just happen.

    You know raising money is not an easy thing. People need to get to know you, trust you and be comfortable with your processes. We did due diligence with each other, we had to be comfortable with their processes. We went to see them, they came here, back and forth, and then we had to go through the documentation process.

      What are the terms of engagement?

    For each of these partnerships, there are three agreements signed.

    One is an investment company which is registered in Mauritius, because their jurisdiction is amenable for foreign investors. That investment company structure is mirrored in Nigeria. The reason it is in Mauritius is just to receive the capital, but the management company that does the actual investment is in Nigeria. So, it’s money for Nigeria. We replicated an investment company agreement and a management company agreement for Mauritius as well. All of that was done so as to receive the capital and bring it here to invest. We did that also for the agriculture side. The management company is 50/50 owned by NSIA and Old Mutual Investment Group.

    And what follows?

    The next stage of work after we made the first phase of investment is to put the money to work, and now go to bring the other third party investors to join. And we have enough expression of  interest to be very comfortable to say we can do $500 million and $200 million in real estate and agric apiece.

    Agric practice in Nigeria does not have a good history of success. What gives you the confidence you’ll succeed?

    Our partners have a very good track record of success. They said they have invested over $200 million in agriculture in various countries and they said they have made returns in dollars ranging from 14 per cent to 20 per cent. There are three, or four things we need to note with agricultural investment in Nigeria. The first thing missing obviously, is the skills in farm management, the second is equity. Most people go and borrow money (debts) and they fund it and they can’t withstand any hiccups, and from day one, your debts starts clocking 22 – 23 per cent and even with the intervention fund, it’s still nine per cent. It’s the wrong kind of capital. Agriculture needs patient capital.

    And then there is the infrastructure problem. You grow something  -and you can’t store it in good enough condition that you can then sell it in the future!  We lack cold storage. Those are the three challenges we have in agriculture.

    Skills is one of the most important thing they are bringing. Collectively we are putting together the right capital now. The infrastructure aspect, we are still going to invest in at the NSIA.

    How will you go about it?

    We have expressed interest to take the Commodity Exchange and that process is ongoing. The Commodity Exchange is just a trading platform, but it’s really going to help us now to create all the necessary platform for storage necessary to make all these things work.

    Very recently, the Vice President inaugurated a committee to steer the privatisation of the rail network, and most of it is aimed at freight-carrying goods. The infrastructure is being put in place, but there are three ways we are going to play.

    This investment we’ve made with Old Mutual and UFF African Agri Investments, (which are actually the specialist farm managers), is going to be in direct agriculture, agric processing, animal husbandry… I’ve seen what they’ve done and I feel comfortable that we can replicate that in Nigeria.

    Two, we will invest in the infrastructure  –  in the. And if you’ve noticed, we have signed a Memorandum of Understanding with the River Basin Authorities to look at their sites with a view to taking the land they have by the rivers which they have not developed, to now do proper farming. So, I believe that we have the right skills and the right capital to do the right thing and we will succeed.

    A lot of the things we make in Nigeria are good for exports, we just need to get it right, build the right skills, build the right extension services that are consistent, make sure the farmers have the right seeds and extension services that will enable the knowhow to use the fertiliser, so it doesn’t become toxic, make sure the processing is done properly with the rice milts, so it’s a lot. And I’m quite excited about the lots of opportunities that this presents.

    Will you be directly involved in this, or NSIA is just going to put money there ?

    It’s a joint company and we are going to put some people there. It’s going to be a skill transfer, to be honest. We are going to have some people there who’ll have the necessary skills, but as I have said, these are the experts who have done it successfully.  And most of what they have done is taking failing farms and turning them around.

    Are you looking at specifics, in terms of crops?

    Everything. It’s a whole process of deal selection, deal origination and they’ll look at the right opportunities, the right infrastructure. That is what they are bringing to the table.

    If I understand you very well, you are not just going to put money there, you are also going to be involved?

    This is a joint company, so obviously we are going to put some people there. This is just a skill transfer to be honest, we are going to have people who are reasonably skilled. But these are the experts who have done it successfully. Like I said, they’ve invested $200 million with equally high returns and most of what we have done is stake some funds and turn them around.

    We are looking at everything. So, there is a whole process of selection going on right now and then we look at whether it is the right opportunity, whether we have the right infrastructure. So that is what we are bringing to the table.

    Let’s talk about the housing aspect.

    It’s real estate, not housing.

    Real estate.

    Yes, housing is a subset of real estate. We will look at office towers, we will look at logistics. Logistics are very important and that is like warehouses. Warehouses are very important, they are like distribution centres with the right infrastructure- power, properly conditioned warehouses where NAFDAC can come and check and certify products with respect to quality and expiry dates, and so on. This is not just renting a shop and stuffs like that. We are looking also at hospitality.

    It’s like you want to tie products from your prospective farms to this warehousing idea?

    Yes, yes, but not just that. There are products being made already in the country that are not being properly handled. The issue really is, we have not really seen a proper logistics centre. Lagos has a few in Agbara and all those areas, but these are the kind of investments we need to make across the country. Also there are a lot of states assets that are abandoned. We are willing to talk to the states.

    The joy of Nigeria is that it’s a big country, the opportunities are incredible. People shouldn’t look at this as the only solution. This is just one of several solutions.

    Agriculture in Nigeria needs billions of dollars in investment. This is just a $200 million fund. There’s the tendency for everyone to gravitate towards one solution. This is just one of many solutions out there.

    How much bigger is the NSIA willing to play in the agricultural sector?

    At NSIA a lot depends on how much capital we receive. We are watching the space, but if we catalyse it, and we deploy the $200 million successfully, my sense is that we would have provided the platform for fresh investors to come in, and we might just want to see our role as catalytic, help people get started. But if we get more capital, we will expand. There are 15 possible areas of investment in NSIA. We have just started with five. The reason we just started with five is because of limited pull of capital, but as we use them to sow seeds to get other people to bring in capital, then we’ll expand.

    In what sense will the ordinary Nigerian benefit from these investments?

    You know when these investments are made, everybody is going to work. If you build an Office Tower, Logistics Centre, bricklayers will be employed, electricians and several others will be employed. Nothing creates jobs more than real estate. You can’t strengthen the weak by weakening the strong. We’ve got to get that philosophy right. For some of these people we are inviting into this country to invest, it will take all of us to support them. We’ve come to the conclusion that for every $1 billion you invest in infrastructure, you empower about 240, 000 people.

    What’s in this initiative for small-holder farmers?

    If you build an agro- processing plant, which is one of the investments the Agro- investment fund will be meeting, a lot of the suppliers will come from small stakeholder farmers. Your job will be to ensure they have the right seeds and that they produce consistently for you. One of the things we hear from these guys is that they have improved the quality of life of farmers in their own network.

    Today the farmer has three issues- even when he has the seeds, he is not consistent, sometimes he doesn’t know how to apply fertilizer and pesticides, and so at the end of the day, there’s no consistency in quality. But more importantly, if there was, who off-takes from him? If he knows he has an off- taker who takes the product from him, then you’ve raised his quality of life. He just sells it to you. His quality of life, earnings/ incomes come up. When he knows he has somebody who’ll off-take from him, he can now go to the bank and borrow money. The amazing thing is, there’s something here that says agriculture is investable.

    Are you satisfied with what you’ve done so far?

    With the NSIA!

    Yes!

    No.  There’s so much we need to do. I’m disappointed we haven’t made credible size of investment in power, not for lack of trying but the environment is contrary. We’ll look into that. I’d like to show case our health care projects, there’s the refinery and other gas sector projects, so there’s a lot that can still be done, but we are limited by the size of capital we have. But hopefully, what we’ve done here today becomes an example where we can catalyse even more, with less of our own capital and create the platform for seven or 10 times more with the capital that we have. Then I can be happy.

    Have you had downturns?

    At the NSIA?

    Yes.

    No. We have had moments when we did not earn as much as I thought we should do. Last year was one of those. But this year, so far so good.

  • Osogbo is Osun capital, not Ede

    SIR: On August 11, a news story in The Punch newspaper was titled ‘Don’t pit us against Osogbo people, Ede warns Aregbesola’. It contained a press conference held at the palace of Timi of Ede where an indigent group alleged that Ede’s land was being annexed to Osogbo. The group, Federation Council of Ede Descendants Union, through its leader, Chief Moshood Adeleke, alleged that Governor Rauf Aregbesola directed the General Manager of the Osun State Capital Development Authority to rename all government establishments, settlements and communities within the capital territory as belonging to Osogbo.

    To begin with, there is no way any government establishment can be said to belong to Osogbo. If it belongs to government, then, it cannot belong to Osogbo. It is one thing for someone to make a claim, it is another matter for a respected newspaper to slam it on its pages. Happily, other newspapers, including The Nation, did not report it from this adversarial and malicious angle.

    This editorial gaffe notwithstanding, there has been dispute over boundary between Osogbo and Ede, dating back to the precolonial era. When Osun was created in 1991, this rivalry was renewed when Osogbo became the capital.

    The dispute was accentuated when the then governor, now Senator Isiaka Adeleke, who is from Ede, built the state secretariat and the office of the governor in Abeere. This small community is one of the disputed land with Osogbo but which has acquired Ede identity. This gesture gave the people of Ede the false notion that since the seat of government is on Ede land, therefore, Ede is the de facto capital of Osun and should be referred to as being in Ede. They want the seat of government to be referred to as being in Ede and not Osogbo.

    However, this is a constitutional matter. Osogbo is the capital of Osun, it cannot be taken to Ede by a sleight of hand.

    Then came the state capital development authority which by law designated an area as capital territory. This area covers parts of eight Local Governments of Osogbo, Olorunda, Boripe, Ifelodun, Obokun, Atakumosa West, Ede North and Egbedore.

    Apart from the secretariat, other government institutions or government supported projects like Omoluabi Garment Factory have been established in the Ede part of the Capital Territory but the concern of some atavistic elements in Ede is the location name.

    For crying out loud, these elements should be reined in by the Timi of Ede who is a very peaceful man and certainly cannot give his royal blessing to the false accusation against Governor Aregbesola. Our royal father should tell these agitators to stop contending with the law. The state capital is Osogbo and eight local governments are in the capital territory, not Ede alone. The others are happy and praying that development projects will be sited in their land.

     

    • Mike Ogundele,

    Osogbo, Osun State.

  • N40b capital issue: Flour Mills mulls rights, debt

    N40b capital issue: Flour Mills mulls rights, debt

    Flour Mills of Nigeria Plc is considering selling new ordinary shares to existing shareholders and issuance of new debt securities to raise some N40 billion as part of efforts to bolster the capital base of the country and cushion the adverse impact of Naira devaluation on its balance sheet.

    Flour Mills’ share price rose by N1.98 to close at N21.98 at the weekend at the Nigerian Stock Exchange (NSE). It has traded within a high of N34.05 and a low of N15.93 in the past 12 months.

    While details of the new issues remain sketchy at the weekend, chief financial officer, Flour Mills of Nigeria Plc, Jacque Vauthier, confirmed that the flour-milling company has already secured the approval of the Securities and Exchange Commission (SEC) to raise some N40 billion in new equity funds over the next three years.

    During analysts’ conference on the full-year results of the company, Vauthier said the company had opted for a shelf plan for the new fund raising, which allows the company to raise the fund in many tranches as it deems fit.

    He said the market condition at the stock market would determine the timeline for the commencement of the issuance.

    He said the company was considering several options to include equity issue, short-term debt issue and refinancing to manage its leverage and ensure that its balance sheet supports the growth and profitability of the company.

    According to him, Flour Mills will use the net proceeds from the new issues to reduce its debt and bolster working capital.

    It should be noted that shareholders had earlier approved the planned new issue at the 2015 annual general meeting, but the decline at the Nigerian capital market had frustrated several proposed new issues.

    Flour Mills had sold its stake in the United Cement Company of Nigeria (Unicem) to the Lafarge Africa Group as it restructured its businesses to focus on the food industry.

    The group had restructured and increased investment in its sugar company, which led to successful commissioning of a 750,000 metric tons per annual sugar refinery built at a cost of $250 million in April 2013. In furtherance of the its long term business model and growth strategy, Flour Mills had embarked on group restructuring, strategic business acquisitions and investment in its core food business and backward integration programmes.

    Flour Mills had invested in large scale commercial farming to support its food processing units with locally produced raw materials. It had invested about N41 billion in capital projects including key projects such as flour capacity expansion in its Apapa mills, completion of Golden Snacks facility in Agbara, completion of Golden Sugar Refinery, establishment of new flour mill in Calabar, expansion of pasta & noodles lines and many major agro allied projects such as investments in Sunti Golden Sugar Estates and new animal feed mill and acquisition and development of large scale commercial farming.

  • Law Union and rock woos foreign investors for capital

    Law Union and rock woos foreign investors for capital

    Law Union and Rock Insurance Plc is wooing foreign investors to inject capital into the firm to make it be among the top five in the country, the new Chairman of the company, Remi Babalola has said.

    He made this known to reporters in Lagos.

    Babalola said the company decided to woo foreign strategic investors to improve product distribution, upgrade processes and platforms, and deepen participation in oil and gas, power and transportation segments.

    He said the outlook for the industry is positive while the company it is very bright.

    The truth is the stage at which Law Union is now, the capital is small compared to the brand value that the company has, as well as the opportunities.

    He said: “The Law Union used to be among the best five in the industry even when we had over 110 insurance companies. Now we have fewer than 50. We need to take the company to where it used to be and probably better than that and the only way we can do that is to inject capital.

    “It is to bring in skills, capacity, and technology, enhance description platform. We also want to ensure that our staffs are well trained such that they will be attracted to outsiders but we will motivate them so much that they will remain inside. The only way we can do that is by partnering with foreign strategic investors. And they are coming with non-life, reinsurance agency, and collaborations with technology companies, among others. By the time they come in, they will be significant shareholders in the company and the face of the industry will change.”

    On the Minister of Finance, Mrs Kemi Adeosun’s call for recapitalisation, he stressed that change was inevitable in the industry and the time was right for insurance operators to grow the industry.

    “If we do not take the positioning in-house and recapitalise, external forces will take the positions for us. So shareholders are taking the right decision to recapitalise now. We must not wait until we are being forced to take the decision. We have an industry that is less than 0.4 per cent contribution to the GDP and this is not good. Even Nollywood contributes much more than that. So it’s something that the operators and regulators need to sit down and talk about the fundamental problems. Why would the insurance penetration in Benin Republic be higher than that of Nigeria? Our economy is stronger.

    “It is not because we are more religious then them, or our culture doesn’t favour sharing risk and if we say that there is recession, I think that is when people need insurance more. When there is no recession, if they steal your car you can buy another one because you have too much money to play around with, you will simply buy another one.

  • I ‘ll focus on human capital development, says Obaseki

    I ‘ll focus on human capital development, says Obaseki

    The governorship candidate of the All Progressives Congress (APC), Mr. Godwin Obaseki, yesterday commended the Oshiomhole administration for building roads and infrastructures in the last seven and half years. He said if voted in as governor his administration will focus more on human capital development.

    Addressing APC supporters at Afuze and Sabongida Ora, Owan East and Owan West Local Government Areas, Obaseki said: “The College of Physical Education is now a degree awarding institution, I will make sure we put more money into the college to make it a world class institution in terms of physical education.

    “As part of our job creation, we will create jobs even from sports. Governor Oshiomhole has done well in the last seven and half years, but we have a lot to do.

    “We focused on education, health, roads and water, but the incoming administration will now focus more on human development. We want to create 200,000 jobs for our youths. The jobs we will create in Owan is not only from agriculture, we will create jobs through mining. They are over 25 mining licenses in Owan East and we are collaborating with the Minister of Solid Minerals to make sure we invite investors here. In the next one year we will bring investors to Owan East.”

    In his remark, Oshiomhole said beating the governorship candidate of the Peoples Democratic Party (PDP), Pastor Osagie Ize-Iyamu, will be the easy for the APC.

    Oshiomhole added, however, that the PDP may adopt a new message in the event that Matthew Iduoriyekemwen becomes its flag bearer, following the recent Federal High Court ruling that recognized, Ali Modu Sheriff as the authentic national chairman of the PDP.

    He pointed out that the founding fathers of the PDP are dumping the party every day for the APC, due to the emergence of Ize-Iyamu.

  • I ‘ll focus on human capital development, says Obaseki

    The governorship candidate of the All Progressives Congress (APC), Mr. Godwin Obaseki, yesterday commended the Oshiomhole administration for building roads and infrastructures in the last seven and half years. He said if voted in as governor his administration will focus more on human capital development.

    Addressing APC supporters at Afuze and Sabongida Ora, Owan East and Owan West Local Government Areas, Obaseki said: “The College of Physical Education is now a degree awarding institution, I will make sure we put more money into the college to make it a world class institution in terms of physical education.

    “As part of our job creation, we will create jobs even from sports. Governor Oshiomhole has done well in the last seven and half years, but we have a lot to do.

    “We focused on education, health, roads and water, but the incoming administration will now focus more on human development. We want to create 200,000 jobs for our youths. The jobs we will create in Owan is not only from agriculture, we will create jobs through mining. They are over 25 mining licenses in Owan East and we are collaborating with the Minister of Solid Minerals to make sure we invite investors here. In the next one year we will bring investors to Owan East.”

    In his remark, Oshiomhole said beating the governorship candidate of the Peoples Democratic Party (PDP), Pastor Osagie Ize-Iyamu, will be the easy for the APC.

    Oshiomhole added, however, that the PDP may adopt a new message in the event that Matthew Iduoriyekemwen becomes its flag bearer, following the recent Federal High Court ruling that recognized, Ali Modu Sheriff as the authentic national chairman of the PDP.

    He pointed out that the founding fathers of the PDP are dumping the party every day for the APC, due to the emergence of Ize-Iyamu.

  • Dogara’s quest to deepen the capital market

    Rt. Hon. Yakubu Dogara, Speaker of the House of Representatives, made history on Friday, July 8, when he became the first ever presiding officer of the National Assembly to visit the Nigerian Stock Exchange (NSE) and to sound the closing gong to signal the end of the trading on its floor.

    But while his visit was a new development, it is well known that since his emergence as the Speaker last year, Dogara has been very active in championing calls for the revival and deepening of Nigeria’s capital market.

    The NSE is not in its best of times. The market is yet to recover from the global financial meltdown of 2008 which resulted in over N10 trillion being lost by hapless Nigerian investors. Sadly, efforts to investigate and bring all those responsible for the crash to book for their actions or inactions have been frustrated by powerful forces, leading many Nigerians, especially the middle class, to stay away from the NSE after losing their savings and pensions to insider abuses and other infractions by some operators.

    A 2010report by the National Bureau for Statistics puts over 100 million Nigerians below the poverty line. With the dwindling revenue from oil resulting in non-payment of salaries by 27 out of 36 states, and almost 500 local government councils, more Nigerians are being daily plunged into poverty.

    This calls for desperate and urgent measures by political institutions to diversify the economy, create wealth, and reduce income inequality. There is therefore the urgent need to deepen the capital market and make it attractive to the ordinary Nigerian to make living.

    Not new to the happenings in the stock market, having served in the committee of the House that investigated the events that led to the crash of the market, Dogara has continuously advocated for measures that will deepen the market and return investors’ confidence. It is his conviction that democracy, the best system of government ever to be invented by mankind, can only function effectively and deliver on its promises of life, liberty and the pursuit of happiness when wealth is created and deliberately allowed to trickle down to the ordinary people. He believes strongly that this can be achieved through the capital market.

    For him, a situation where a large chunk of the nation’s resources or capital is heavily concentrated in the hands of few chief executive officers, CEOs,  would further widen the inequality gap, eliminate the middle class and plunge more people into abject poverty, thereby posing serious threat to the sustenance and survival of democracy. He has made it known in different fora that the skewed distribution of wealth is even more worrisome because the flow of resources from Nigerian citizens to multinational companies operating in the country that makes them rich but unfortunately, these same companies, rather than invest in the NSE and grow the economy of Nigeria, would rather repatriate their profits 100 percent to their own countries without investing a dime back to the system.

    On many occasions, the speaker has made his position on this sad trend clear, sounding it out to all that care to listen that major extra-ordinary measures will have to be taken by the parliament and indeed all political institutions in the country to compel these large multinational companies with interests in oil and gas and telecommunications to get listed on the NSE.

    His argument is simple: foreign telecommunication companies who have been operating in the country since 2001 have not only been declaring huge profits, but are also listed in their countries’ stock exchanges yet have continued to rebuff calls for them to list in the NSE, even though they make most of their profits here.

    Dogara has noted that ironically, it  is only from the patronage they get from Nigerians that they make this huge profit, which explains why even though Nigeria is the largest economy in Africa, its capital market ranks third – a very big anomaly.

    No wonder when he sounded the closing gong of the Nigerian bourse on July 8, he said that the parliament would strengthen capital market laws to empower regulators to sanction erring operators. The Speaker told the market operators that his visit underpins the fact that the House pays serious attention to the Nigerian capital market and that for the capital market to take its rightful place, drastic measures must be adopted. He said that having rebuffed calls for them to list on the stock market, it was now time to get the multinational companies to comply by adopting the carrot and stick approach.

    Dogara also charged the capital market regulators on the need to be on top of their responsibilities in order to boost investors’ confidence in the market. To make them more efficient, he suggested that the regulators be empowered to sanction operators that arbitrarily abuse the market so as to regain investors’ confidence. He said it was important to regain investors’ confidence and give them the needed assurance that anyone who perpetuates infractions in the market would be dealt with. According to him, this will also serve as deterrent to others who may want to scam investors in the future.

    Said he: “We need to deepen the market, we need to create and sustain confidence in the market and for confidence to come back, we need to do more. When we start sanctioning, confidence will come back to the market.”

    The speaker received a standing ovation when he told operators on the floor of the NSE that the House would soon pass laws that would compel multinationals, oil and gas companies, telecommunication firms and privatised companies to list on NSE to deepen the market as part of efforts to engender economic prosperity.

    One thing that emerged from the speaker’s visit is that unknown to many, most of the public enterprises that were privatised were actually mandated to list certain percentage of their shares on the NSE as part of the sales and purchase agreement. Regrettably, none of the companies is listed, in contravention of the sales and purchase agreement they signed with the Bureau for Public Enterprises (BPE).

    Dogara however, assured that the House, through its committee on Privatisation and Commercialisation will investigate these cases of abuse with a view to getting them to stick to the terms of agreement they had with BPE.

    Describing Dogara’s visit as historic, NSE’s council president, Aigboje Aig-Imoukhuede, noted that the House under his leadership had shown concern about the economy and the capital market. While assuring the speaker that market operators will not relent and would do everything to ensure that the market becomes the best in the continent, he said it was very gratifying that Dogara is leading moves to create a conducive environment for the market.

    Of course, the speaker needs the support of all men and women of goodwill to bring his dream of deepening the capital market to fruition. Here, his colleagues and senators alike must, as a matter of necessity and urgency, consider and treat proposed legislations related to this purpose with the seriousness and urgency they deserve and for the President to assent to the bills when they are eventually passed into law.

     

    • Hassan is Special Adviser on Media & Public Affairs to Speaker Dogara.