The Nation Newspaper

Tag: consolidation

  • Consolidation of cheapening era

    Gone are the days, and they appear gone for ever, when, as the saying goes, women were women and men were marrying them. It is really funny that I, even I, could reminisce on those days which to me were glorious. Oh, I find myself getting much older than I really am.

    What a wonderful thing to be immersed in the current happenstance and yet be able to take hindsight of the recent past that seems to be yesterday and yet the present generation could not see the very things that gnaw my effervescent mind?

    I sincerely hope I could become a video of sort, posted on the ever suffusing social media for all to watch without limitation. This, in itself, portraits me as a modern man though deeply rooted in what looks like some dark old days. I wish I could communicate better without rigmarolling. True, I feel so young as a septuagenarian and at the same time older than my actual age by about the same years of my sojourn on the earth. Condescending and yet broaching the haughtiness, yes, pride that goes before a crash. I need some respite.

    Briefly, I sat for the General Certificate of Education examination, ordinary level, at age 29 and the advance stage at 30. Got a diploma in journalism two years after and began prospecting for a degree almost immediately after the Daily Times training. But then there were halls of residence at the University of Lagos – El-Kanemi, Henry Carr, Amina, Moremi and others. That glorified nomenclature has caved in under the heavy buffeting of its secondary school status – hostels. The Unilag parents’ association even planned a multi-storey ‘hostel.’ Students attend lessons instead of tutorials and write their names as their primary school teachers did – i.e Owolabi Akin – without setting the surname off with a comma. The known tradition of name writing has been discarded for the pedestrian primo-secondary genre and the corruption has percolated the entire system like a cardiovascular seizure. The capillarity is such that university professors, I am not saying there are professors outside the four walls of the university system, have been bitten by the wrong name-writing bug. Would Professor Wole Soyinka condescend to casting his golden name as Soyinka Wole?

    This may appear trite but it is true. A deputy vice chancellor (academics) of a prestigious university distributed his business cards to visiting journalists with his name grotesquely written – surname donning the garb of first. A former college of education provost would take serious aversion to the re-jig of his name to the normal sequence. The surname must come first and other names follow in a way that says the surname is the first. The reversal in this sense is becoming almost total and national among the present generation. Enter the era of ‘carry-go.’

    In our days, though contemporary, secondary education prospecting pupils were entirely on their own. The largely unlettered parents just worked hard to provide the money. In 1961, I can recall travelling from my hometown – Ikare Akoko – to Ado Ekiti to write a secondary school entrance examination, unaided and unaccompanied. Today, the scenario is appallingly different. Rich or otherwise parents ferry their university admission seeking younger ones (kids, sort of) across the city to write the Joint Admissions and Matriculation Board’s Unified Tertiary Matriculation Examination and the post-UTME tests accordingly.

    Such rabidity is encapsulated in these two instances. A semi-literate parent accompanied his first son from Ota, Ogun State to Ile Ife, Osun State to write UTME during the era of crazy assignment of computer based test centres, CBT. The parent relished his paternal care when he had to ginger the candidate at zero examination hour. The following year, it was the turn of caring mother to lead the way to the Covenant University CBT, some five kilometres away, for another year’s UTME.

    Another instance – an illiterate mother had to accompany her daughter to Ilorin, Kwara State from Ota to write the post-UTME at the University of Ilorin. The candidate, who could have conveniently written the test at near-by Ikeja, Lagos State centre, failed the examination. No qualms. In both instances, the candidates could not sail through.

    Do we then blame parents who would drive round the school premises while their prospecting little ones write entrance examinations? Who would convince such over protective parents that there are no hawks and lions lurking around to prey on their extra-vulnerable young ones?

    University degree holders in my early years were a rarity. One could count those who ascended the academic Mount Everest in a big city on one’s fingertips. In the 1940s, legendary Nnamdi Azikiwe stowed away to the United States of America and returned with a degree (in what?) to become an instant celebrity. He pointed the way to some others who also returned to Nigeria to rule and romp and reign.

    In Zik’s West African Pilot newspapers, Higher School Certificate (HSC) holders had their mention bestowed, rather blessed with the prefix of inter, meaning intermediate Bachelor of Arts or inter-BSc depending on whether the attainment was in the arts or in the sciences.

    Sundays at the University of Lagos were always carnival-like of sorts as the cafeterias served a quarter of extra large chicken to each undergraduate at the presentation of a 15kobo meal coupon. Before my admission into this elite caste at age 32, it was five kobo per meal and when the Murtala Muhammed/Olusegun Obasanjo regime jerked the meal ticket to 15kobo; hell was let loose. Students went berserk with nationwide unrest and the Gestapo – police- laid a couple of them to permanent rest in the engulfing Ali-Must-Go rumpus. It was then an unmitigated national disaster and shame.

    The blood of any fallen undergraduate was precious in national eyes, as it was and still is in the omnipotent eyes of the Almighty. Akintunde Ojo Hall at Unilag and Kunle Adepeju Hall at the Obafemi Awolowo University, then University of Ile Ife (Unife) are grim effigies of trigger-happy security agency – the police – in addressing students’ unrest. In very recent times, students relish spilling co-students’ blood in the name of cultism.

    Conversely, students are very restful today while the academics (lecturers) in government-owned tertiary institutions have taken the citadels to the brink of total collapse in the guise of incessant trade disputes – strikes – that are hardly justifiable. The end result is the production of half-baked graduates who are maladjusted for the labour market. In my days, job was not as rarefied as oxygen with great height. Few lecturers could afford the car luxury. They hardly peonise the lecture and tutorials with wishy-washy hand-outs. Yet, they were contented. The situation is now reversed in the favour of ever truculent lecturers – who joyously populate the middle class and wreak unmitigated havoc on the education system. Gone too, for good, is the academic calendar with the month of academic fireworks. Then the October rush was real.

    The value of higher and even highest academic attainment in the present dispensation has nosedived. The story has changed completely, drastically, graphically and tragically too. The parody of the highest university degree (PhD) is exemplified in the assertion of a school proprietress in Ilorin, Kwara State capital to the effect that she could not engage PhD holders as primary school teachers, charging that they were appalling in the spoken English Language. She further charged that they, using the generic they, could not pass primary school tests in English Language. Has education crashed so ruinously?

    Call this the peak of arrogance and perfidiousness on the part of that nouveau riche school owner.

    Nevertheless, gone are my pre-days when brilliant primary school leavers got ploughed back as auxiliary teachers in their alma mater and their secondary school counterparts enrolled at the junior secondary schools as tutors. That was not the best of times but still better than the new era in which professors are hard put to arrange their names neatly. The plain truth is that these are not the best of times when jaded septuagenarians are politically sprinting and sparing with the much younger generations cheering and watching excitedly from the sidelines.

     

    • Owolabi, a journalist, writes from Lagos.

  • Political fragmentation and consolidation

    The changing of parties in the National Assembly in Abuja has created some kind of crisis and depending on who you are, Nigeria seems to be entering a long dark tunnel while optimists feel it is a good thing for birds of the same feather to flock together rather than political parties being an all-comers affair without any ideological or moral cement binding members of political parties together and separating each party from the other.

    The leaders of the APC have said the party will come out of this dark tunnel and that there is light at the end of the tunnel. Cynics may even say the light at the end of the tunnel may be that of an onrushing train to create a serious crash. Whatever the case may be, it is better that real parties evolve from the present chaos. There is a need for the emergence of broad ideological parties that can  either be identified with people oriented party  as opposed to those who believe the people should eat from the crumbs falling from the rich men’s tables. There is a need for parties to be identified with the principle of political and economic restructuring of the country in a broad sense to give more powers to the periphery or what in Europe is referred to as subsidiarity and those who believe in the status quo that is not working.

    Even within parties it will not be strange to have left wing and right wings of the parties as one finds in the Labour and the Democratic parties in the United Kingdom and the USA respectively. The parties of the left usually agree on social democracy which most right thinking people would ordinarily subscribe to. Opposed to this political tendency will be the Republican and Conservative parties of the United States and Great Britain respectively with their beliefs in cut throat capitalism and survival of the fittest. Although this soulless political tendency is moderated by a sense of noblesse oblige in which rich and aristocratic people feel they have a responsibility to bring up the less fortunate people in the society.  This is why even Conservative and the Republican parties in the UK and USA respectively subscribe to payment of the dole and welfare cheques to the poor and the unemployed. I am sure we can find these tendencies in Nigeria for people to coalesce around rather than around ambitious people who are just using the people to get power with which they loot the treasury and rob the people.

    We need to build political parties around ideas rather than the ambitions of money bags who made their monies by ripping off the system and appropriating what belongs to the people and putting it in individual pockets. If both the APC and the PDP can organize themselves around well-articulated visions and specific missions, then something positive may yet come out of the current political shenanigans going on in Abuja.  Perhaps after this consolidation of parties, a case can then be made against carpet-crossing that has become the bane of Nigerian politics which now present politicians as commodities for sale and for purchase. These politicians may not know this, but the people are watching. There is a growing cynicism in the country that politicians are all the same and are all looking for regimes of “food is ready come and eat” without any consideration of where the food is from and how it was prepared. The ordinary people are beginning to join the “share the gari” politics during voting for candidates at election time and this tendency is captured in the saying of “Dibo ko se obe” meaning vote and get money to make stew. This tendency was carried to an extreme when the current governor of Ekiti who had not paid salaries for eight months on the eve of the last gubernatorial election, sent each civil servant and teachers N3,000 before the election and  gave N4,000 each on day of election to those who voted for the PDP. The APC would have been foolish to allow lightening to strike it twice by not rising to the occasion and be fooled again. This reminds me of the judge in the commonwealth of Massachusetts in the USA who publicly declared that he usually receives bribes from any two opposing parties in litigation before him but will then go ahead to give judgement correctly according to the law. He says he could not be bought! There is some logic in this case.

    Permit the digression. I blame the president for what has happened to the APC. He came in saying he belongs to “nobody but to everybody”. He surrounded himself with people of little or no political value. For six months, he refused to appoint his cabinet. He has not even finished constituting the boards of parastatals more than three years of coming into office. He has thus left in the cold politicians who made his victory possible. He publicly said politicians were unserious noise makers and distanced himself from the people who know the game of politics and have successfully played it at state and federal levels. The engine of politics everywhere in the world is oiled by what is referred to as pork barrel politics which means spending to benefit constituents for their political support. Rather than do this, Buhari has surrounded himself with his ethnic cohorts there by opening himself to charge of nepotism and parochialism. On top of this is his general lassitude and non-effective handling of the rampage of the killings by herders in the country. I sympathize with him a bit on the chaos in the country because he is not the one to do the fighting and if his security people are not performing what can he do? He can change them of course but I suspect the problem is so deep rooted that a clinical diagnosis would be required.

    As the Yoruba would say – the calabash is intact while the watered has been split .This means we can fill the calabash again with water. The president now knows his job is cut out for him and there can be no prevarication. If I were him, I would change the cabinet in consultation with the APC governors. Give Oshiomhole marching orders to build a closely knit party and find money for serious party bureaucracy either by surcharging all political appointees or soliciting for material support from government contractors. He should also form a committee of party leaders from all the different zones of the country to advise him on the way forward. Above all he has to deal ruthlessly with all those killing fellow Nigerians whether they are herders, cattle rustlers, farmers and all other kinds of brigands and kidnappers. He also has to spend more on the poor and the disadvantaged. He must ensure the ongoing infrastructural development and roads construction gather pace to make a difference in people’s lives. In other words, he must recover the lost good will of the people. He also needs to show more result in his war on corruption which appear to have consumed most of his time and attention these three years.

    I personally do not see any of these people running around in the National Assembly capable of solving the problems of Nigeria because many of them are the problems. These are the same people who led us to this deadlock in our developmental trajectory by doing nothing especially when we had money .They left the roads in dilapidated state and kept the country in darkness while purporting to spend billions on the power sector. The insecurity now tearing the country apart reared its ugly head during their time in government and in power. What is now needed is a strong government backed by a strong party with well-articulated and well-argued principle and programme and it will be left to the people to choose between  going to the promised land or going back to Egypt as my pastor would say. Our people would have to choose between transparency and honesty of political leadership and going back to “come and eat” ideology of the recent past.

  • Another consolidation?

    Another consolidation?

    •IMF’s recommendation that our banks should be recapitalised seems sensible

    Last week’s call by the International Monetary Fund (IMF) on Nigerian banks to raise fresh capital to shore up their operations brings back memories of the 2005 banking consolidation. At the 2017 Chartered Institute of Bankers of Nigeria’s (CIBN) investiture in Lagos, IMF Senior Resident Representative and Mission Chief for Nigeria, Amine Mati, admonished the Central Bank of Nigeria (CBN) to consider asking the country’s lenders to recapitalise. His words:  “We believe the banking sector should be strong to support the economy. So it is important we recapitalise the banks to make sure that they are very strong”.

    Twelve years after the CBN-ordered consolidation which shrunk the motley assembly of lenders from 89 to 25, it is a measure of how far the financial services sector is yet to come to its own that the same pill is being proposed. However, if the call is any window into the state of the nation’s existing 21 commercial, four merchant and one non-interest banks, that the IMF is the one drawing attention to what should ordinarily be a routine regulatory action can only imply that the regulator is either unaware or is, for whatever reasons, unable to do something about the situation.

    Truth is that the exigencies cannot be any clearer. Nigeria’s macroeconomic environment has undergone dramatic changes since that 2005 capitalisation exercise to merit a review of the structure of the industry. For instance, the naira then exchanged for N130 to the United States dollar as against the current exchange rate of N305. As if the quantum of depreciation in asset quality is not grave enough in an industry that is at best fragile by global standards, it would appear that the lessons from the gale of sanitisation which swept the industry in 2008/9 have largely gone unlearned few years down the road.

    We refer here to the industry-wide abuses of credit guidelines, particularly the insider-related credit which resulted in the unprecedented build-up of the toxic loans portfolios of the banks, and which threatened to take the entire industry down. Presently, the surge of non-performing loans continues to represent an ever present danger to the economy. Only in August, the IMF had found that: “non-performing loans increased from six percent in 2015 to 15 percent in March 2017” – a development largely blamed on the banking system’s exposure to the oil and gas sector. One other revelation by the IMF is that four of our banks are actually undercapitalised.

    To the extent that the banks represent a critical pillar without which the economy cannot function, we cannot agree more with the IMF on the need to keep them adequately capitalised. What is debatable is whether what the industry needs now is another frenzied, industry-wide exercise like the 2005 one as the IMF appears to be suggesting, particularly so when regulatory challenges remain daunting.

    Moreover, we see the issue of adequacy as a relative thing. Yes, the CBN might consider raising the threshold for players who choose to play in the big league – and we see nothing wrong with the apex bank encouraging some of our banks to play in that cadre; due consideration however must be given to regional players to develop and grow their niche markets.

    The point really is that raising banks’ share capital guarantees nothing. If anything, it is only a means to an end – which is banks’ ability to avail businesses of credit. Merely from our experience, we have seen that capital adequacy does not guarantee improved access to credit let alone cheap one; nor does it curb banks’ propensity to grant questionable loans, otherwise we would not be talking of the huge non-performing loan portfolio. Without adequate and effective regulatory oversight, a well-capitalised bank may be no more than a gambling house in the end.

  • When Edo gathered for continuity and consolidation

    The occasion was the third edition of Mayaki’s Roundtable with theme: Continuity for Consolidation. Venue was Bishop Kelly Pastoral Centre, Benin City. Activist Professor and Secretary to Edo State Government – Julius Ihonvbere, guest discussant would leave the well-set-podium to join his well-seated-audience on the floor – driving the message of continuity for consolidation into the blood-marrow of carried-away-participants.

    Ihonvbere’s industry and delivery – the type that allows caged birds to sing, no doubt, came with applause – it resonated with the capacity-filled-hall where the Esogban of Benin Kingdom, Chief David Edebiri was the Father of the Day, and Rt. Hon. Speaker, Dr. Justin Okonoboh, Chairman of the occasion.

    Though, Professor Eddy Eragbe, the University of Benin Orator and Professor Festus Imuetinyan agreed – unanimously, the depth and complete dissection of the theme by Ihonvbere, and why Godwin Obaseki – the All Progressives Congress (APC) candidate should continue from where Governor Adams Oshiomhole would stop – they, nevertheless, took turn to drive home the message – and it sank deeper – capping the sermon by the University of Toronto trained professor.

    He, Obaseki was the issue. I’m not being precipitous – the next governor of Edo State is going to be no-less-a-personality since the Peoples’ Democratic Party cannot supply the credentials and quality needed – the gifts of an Obaseki, especially those needed in these days of hopeless recessions and economic downturns.

    Beside Ihonvbere at the indoor-event, was Professor Eragbe who delivered a spell-bound-speech tingling the ears and giving hope to the hopeless – among the mammoth crowd that turned-in for the all-important roundtable discussion

    “At a critical time like this”, Eragbe opened his speech, “our state, few days from now, would be engaging in a critical exercise. Democracy is not all about elections but you can’t run a democratic system without elections, and that’s what we are trying to engage in come September 28. I believe this platform is an interactive one. It’s meant to avail us the opportunity to appraise and look at how the incumbent government has performed in the last seven and half years. Itis also enable us to point out what he has done and the ones that have not been done”.

    Said he: “if anybody wants to be realistic, no single government can totally meet all the needs of its people. The critical question is whether the foundation has been laid, whether there is genuine commitment, whether there are tangible results to show whether that leader is really for the people and if he’s delivering the dividends of democracy”.

    Eragbe went down memory lane saying: “whether you like it or not, all we are saying historically is that if we look at where we are coming from as a state and look at the expectation as a nation, the last seven years plus has shown in terms of vision, in terms of meeting the expectation of the people, in terms of accountability, in terms of relating with persons that the government of Adams Oshiomhole has excelled. He may not have met all the needs of the people but within the available resources of any government, I think he has a clear pass mark.

    “One good thing that has happened about our state which many of us are not appreciating, is Edo State and Lagos are now almost the foremost states in Nigeria that other states are supposed to copy.

    “My take now on the issue of continuity, is that the man that has had the vision, that has delivered so far to raise Edo state to where it’s today has looked around and has endorsed a person to say I believe that this one has a capacity, the capability and the wherewithal to build on what has already been established.

    “Therefore, I believe, to consolidate is the right thing to do; there must be continuity in delivery the dividends of democracy to our people, there must be continuity to achieve a new vision in terms of how to get our youths employed. There must be continuity in bringing about economic development, there must be continuity in trying to deal with the scarcity of funds”, Eragbe said of the man who emerged taking charge of his own image after his name emblazoned the political space – Godwin Obaseki.

    Prof. Festus Imuetinyan was clear and direct in his contribution: “the Comrade Governor has done well”, he declared. “Edo state citizens now understand that it is important that whoever is going to take over from him should be a man who is forth coming and prudent”.  “I stand on continuity”, he averred.

    As if to warn, Imuetinyan said, “Edo State people would not make any mistake. I stand for continuity for two reasons. First, certainly because a man that has done well should be appreciated; one way, Edo citizens can show appreciation for the good works that the Comrade Governor has been doing in the last seven and half years is to vote for continuity so that all his good works will be consolidated.

    “Secondly, we need to vote for continuity so that others have reasons to do very well; in showing appreciation, he will be encouraged to do same. The entire world is currently facing economic crisis, the Nigerian economy is not immune including the state governments are not also immune. This is the time we need individuals and men that can stand up; that understand the economy and to be able to move whatever segment of the society that he is saddled to lead. I am convinced that continuity is the way out”, he explained.

    “Edo has done well; the man that really ignited the progress in Edo State is Samuel Ogbemudia”, Speaker Justin Okonoboh said in his remark. He added: “we have seen infrastructural development in the state. We have a duty to commend Comrade Adams Oshiomhole. The man that is coming – Godwin Obaseki – and when he comes, he will continue from where the comrade stops”.

    Chief Edebiri was just as blunt and direct: “I know many of us know all the good works Oshiomhole has been doing in the state. Oshiomhole came to Edo State to save us. He came as messiah. He took us from the land of Egypt and successfully brought us to the promise land.

    “The first election that took place in the country apart from Lagos and Calabar, I took part in that election since that time, I have voted in every election. But I want to assure you none of those governments have done as much as Oshiomhole has done. Everything he told us he would do when he emerged, he has done all of them hundred times over.

    “So, why must he bring somebody now with a testimonial signed by him – why must I refuse such a person? Why must the people of Benin refuse anybody recommended by Comrade Adams Oshiomhole? Have you not gained from the administration of Governor Oshiomhole? I believe they will all accept the testimony signed by Adams Oshiomhole. The battle is very clear. We all know where the pendulum is swinging to”, the Bini Chief popularly known as the Oracle declared.

  • ‘Travel agencies’ consolidation can generate over $2b’

    ‘Travel agencies’ consolidation can generate over $2b’

    The Chief Executive Officer of Travel Investment Company Limited (TICO), Mrs Irene Uti-Egbeogu, has said the merger of travel agencies could contribute over $2 billion annually.

    She said without consolidation, the market share would be small for travel agencies who need to explore wider segments and product initiatives to enhance profitability

    In an interview, she said the coming together of four travel agencies: Touchdown, Quantum, Finchglow and Dees Travels in TICO has triggered a revolution in the travel agency sector, with economies of scale for the partners .

    She said the firm was favourably disposed to discussions on partnership with travel management companies to expand the business.

    Mrs Uti-Egbeogu said:”Indeed, we are open to more travel management companies interested in partnering with us in our quest for best practices. Interests within our scope include training and networking opportunities.

    ‘’We like to believe that travel agencies that have indicated interest in joining us are equally motivated by the same passion that informed this consortium, which is the overall advancement of the Industry.”

    She said the government should assist by providing infrastructure to facilitate travel business at airports nationwide.

    “The government can aid the industry’s growth by providing better infrastructure – good roads, power and truncating the red tape in getting through regulatory bodies.

    “This would be with a view to making Nigeria a prime destination for travellers and tourists; even beyond recreating Nigeria as a tourist attraction to the international business community, we need to build an enabling environment for investors in the hospitality business.

    “It takes funds to build hotels and refurbish or repackage tourist centres and facilitate electronic platforms that enable smooth logistics or accessible hospitality. The prospects in the industry is huge, the reason is that Nigeria has a unique history and character that somehow seems to defy the norm. Even during the economic downturn, people were still travelling as high traffic in travel transactions were recorded.”

    Mrs Uti-Egbeogu went on:“With better standards of operations and customer service, we can indeed defy any circumstance of “shrinking resources” as you put it.”

    Mrs Egbeogu said consolidation has advanced the travel agency business with higher profitability and more visibility.

    Her words:“We have recorded some milestones, particularly in areas where we have explored wider segments and product initiatives which our partners can tap into for more visibility and higher profitability.

    “Industry trend reports reveal that the travel market generates close to $2 billion annually. Clearly, you can see that even at N36 billion, which is about $200 million, this is just scraping the surface.

    “While we are making progress in leaps and bounds, we are identifying new areas to make a foray into and widen our market share.”

    Mrs. Mrs Egbeogu said the travel agencies that came together still retained their individual identities to enhance efficiency.

    “ They purely see themselves as partners. There is a common goal here, which is to enhance the efficiency of the Nigerian travel industry.

    ‘’This cannot be achieved by a singular body or agency but by cohesive action by a league of extraordinary travel agencies with that single vision to transform industry’s standards of operations and customer service.”

    She said the National Association of Nigeria Travel Agencies (NANTA) would continue to strive to ensure that it harmonises the needs of travel agencies before airlines and government agencies to comply with local and international regulations and standards .

     

  • Massive consolidation looms in share registration

    Massive consolidation looms in share registration

    The train of consolidation in the financial services industry may move next to the share registration business as registrars adjust to the divestment and consolidation in banking, stringent supervisory framework, capital requirement and intensive information and communication technology.

    Industry sources estimated that the number of share registration firms which is about 30, may reduce by almost half following ongoing mergers and acquisitions from banking consolidation induced business combinations and competition-induced restructurings.

    When asked about the possibility of consolidation in the share registration industry, both Managing Director, First Registrars Nigeria Limited, Mr Bayo Olugbemi and Chief Executive, Institute of Capital Market Registrars (ICMR), Dr David Ogogo, answered in the affirmative.

    Olugbemi said the consolidation might start from 2013 and it could be due to competition or regulations. Ogogo said well-run registrars would stand good chance to in consolidation period.

    Most banks are selling off their share registration businesses while the consolidation in the banking industry has reduced the size of share registration business. Banks were, and still, the largest customers for most registrars.

    Central Bank of Nigeria’s (CBN’s) Scope of Banking Activities and Ancillary Matters No 3, 2010 requires banks to concentrate on core banking functions. The new model requires banks to either sell 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.

    Five banks including First City Monument Bank (FCMB) Plc, First Bank of Nigeria (FBN) Plc, Stanbic IBTC Bank Plc, United Bank for Africa (UBA) Plc and Union Bank of Nigeria (UBN) Plc have opted to form holding companies and keep their subsidiaries while other banks including Access Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank (GTB) Plc, Skye Bank Plc, Sterling Bank, Zenith Bank and Wema Bank, among others, are pursuing divestments from non-banking subsidiaries.

    Besides being the largest registers, banks own the largest and most active registrars. More than half of the industry operators, which account for more than two-third of the industry activities, are owned directly or indirectly by banks.

    A reliable source said banks that had acquired share registration businesses have started exploring possibilities of merging the businesses.

    First City Monument Bank, which has interest in CSL Securities (Registrars), recently acquired Fin Registrars through acquisition of Finbank Plc.Ecobank Transnational Incorporated (ETI), which has interest in EDC Securities, also acquired Oceanic Registrars through its acquisition of Oceanic Bank International. Access Bank also recently acquired Intercontinental Registrars through its acquisition of Intercontinental Bank Plc.

    Besides linear integration due to acquisition of a share registration company by a bank with subsisting share registration business, industry sources indicated that spin-off of share registration businesses and divestments by banks may induce consolidation as newly independent registrars strive to build their businesses.

    First Bank of Nigeria (FBN) Plc has sold its iconic share registration business- First Registrars Nigeria Limited, the largest share registration company in Nigeria, as part of the banking group restructuring into a holding company structure. United Bank for Africa (UBA) Plc has gotten all approvals to spin off its share registration business- Africa Prudential Registrars, to its shareholders. Africa Prudential Registrars is billed to list on the Nigerian Stock Exchange (NSE), a feat that will make it the first registrar to be quoted on the stock market. Guaranty Trust Bank has sold its share registration business- GTB Registrars, to new core investors.

    Industry sources indicated that the spun-off and divested registrars would come under pressures to build and sustain profits and dividends to investors, a possible game changer in the industry where many registrars were retained to protect the interests of their parent companies.

    Many industry sources also feared that a new capital base for share registration may lead to mergers and acquisition.

    Besides, the changing landscape of the share registration business, which has seen most activities now automated and online, may reduce the quantum of operations and incomes of registrars as companies seek to reduce costs of share management.

    Several companies have opted for online delivery of annual reports and accounts to shareholders, as part of efforts to reduce cost of bulky printing and postal costs. Other initiatives such as electronic dividend, dematerialization, electronic bonus, electronic offer and electronic allotment among others being promoted by capital market stakeholders are expected to increasingly reduce physical operations of registrars and also attendant incomes.

     

  • ‘2013 budget may fail fiscal consolidation tests’

    ‘2013 budget may fail fiscal consolidation tests’

    There are possibilities that the proposed 2013 budget may not achieve its fiscal consolidation and growth objectives, the managing director, Financial Directives Company Limited, Bismark Rewane has said.

    Speaking at the October Business Bi monthly Economic Report for October, he said President Goodluck Jonathan may be compelled to submit to the wishes of the legislators and increase the benchmark oil price to $80.

    By this, spending will increase and should oil price drop, savings obtained from crude oil sales would reduce and external reserves accretion. This he said, would be negatively affected, making it difficult for the government to respond adequately to an economic crisis.

    In addition, he said the proposed oil production level of 2.53 million barrel per day mpbd for 2013 is too optimistic considering the level attained so far in 2012. “Production is currently about 2.16 mbpd and it is not likely to increase if the problems of oil theft and pipeline leakages are not addressed. Besides, revenue would be adversely affected if weakness in the global economy causes disruption in output levels. In that case, the deficit gap is expected to be larger and domestic borrowing would increase,” he said.

    It said the proposed 2013 budget seems promising in its quest to promote fiscal consolidation and growth. Nevertheless, the poor performance of previous budgets makes it difficult to believe that the proposed 2013 budget would be any different.

    The budget highlights showed aggregate expenditure is estimated at N4.92 trillion, an increase of 4.7 per cent from the 2012 expenditure of N4.7 trillion, and total revenue is put at N3.89 trillion, an increase of 9.3 per cent from the 2012 revenue of N3.56 trillion. Noticeably, aggregate expenditure is greater than revenue which implies that the government intends to run a deficit budget.

    Rewane explained that the percentage of aggregate expenditure spent on capital expenditures increased from 28.53 per cent in 2012 to 31.34 per cent while that spent on recurrent expenditures decreased from 71.47 per cent in 2012 to 68.66 per cent.

    Indicators in the proposed 2013 budget that demonstrate the commitment to fiscal prudence are the reduction in fiscal deficit to 2.17 per cent of Gross Domestic Product (GDP) from 2.85 per cent to N1.15 trillion in 2012, which is within the threshold stipulated by the Fiscal Responsibility Act, 2007.

    Also, the reduction in domestic borrowing by 2.3 per cent to N727 billion, from N744 billion in 2012, is to ensure that debt stock remains at a sustainable level.

    Government said it would repay maturing debt obligations through the establishment of a sinking fund of N100 billion . It also increased the benchmark oil price to $75 for 2013 from $72 in 2012