The Nation Newspaper

Tag: Dwindling

  • Dwindling reading culture

    The World Culture Score Index recently released the result of its survey on world’s reading countries in which Nigeria was adjudged as unreading. Appalling as it is, it is not surprising to any keen observer of our social milieu. What is surprising, however, is how it has to take a seemingly obscure organization to get our media frenzied about our retrogression in that respect despite similar revelations by our local researchers.

    A couple of years ago (May 15, 2013), Mahmood Jega, the inimitable Daily Trust columnist, did an interesting piece about a young boy who opted to hang himself than read his books when his parents insisted. That poor lad is just a microcosm of how deep is the anathema among particularly young Nigerians. As an instructor and bitter complainant of our miserable reading habit, I nearly go to war with my students to get them read a few excerpted pages from a book. By God, sometimes out of rage you feel like breaking down to tears. For, these students will rather watch football and movies than read a book. Yes. They will rather worship P-Square and Justin Bieber. Yes. They will rather swing and swagger on the street with their bushy hair and comical sunglasses. Yes. They will rather go on 2go, Facebook and WhatsApp than of course, read a book! Nothing can therefore be axiomatic than the adage: if you want hide something from, actually northern Nigerian youths, then put it in a book.

    Sometimes out of consternation, you find yourself asking: When will this region produce another Muhammad Bello? Who will be the Zungur or Yusuf Bala Usman of this generation? When Prof. Ibrahim Bello-Kano told us in the privacy of his office that he had so far read more than 6,000 books and was aiming for 10,000 before he dies, we were astounded. But I was completely shattered when I later discovered that Muhammad Bello had read more than 20,000 books under the tutelage of his father, Shehu. Similarly, Zungur, according to his biographer, jilted his wife, Marka, because of persistently prolonged stay in the library. While in A Life of Commitment to Knowledge, Freedom and Justice: Tributes to Yusuf Bala Usman, the daughter of the late scholar told us that her father was terribly sick and could barely recognize those around him, but ‘a few hours, he became much better, he became himself again, asking for books, that they should bring his books’.

    In both their online and offline political engagement, the youths boil with revolutionary fervour. They want to be seen as prime movers of change without, ironically, minding what it takes. How one can be another Shariati or Fanon without the equipment remains a mystery to me. When you read the biographies and autobiographies of our founding fathers, for example, you find out that they were all voracious readers – Sardauna, Balewa, Aminu Kano and co. Sardauna used to sleep for not more than four hours! He was either reading or politically strategizing. The Honourable Gentleman, on the other hand, was said to have read virtually all the books in their library at Katsina College. Perhaps that informed his eloquence. And his fictional Shehu Umar further vindicates his unquenchable thirst for knowledge. What do I have to say with regard to Aminu Kano? If Gumi could attest to someone’s commitment to learning, we can only say sadaqallahul azeem.

    To be fair, I think people down here are generally dis-informed about the fact reading can be a form of entertainment, something that can be done in leisurely hour; which consequently stimulates the mind and enlarges one’s worldview. But sadly enough, even students think about it largely in the ‘precipice’ of test or exam where they grudgingly swallow instructor’s notes and regurgitate it verbatim. For this, they’re handsomely rewarded notwithstanding the paucity of originality and diversity of sources. A pedagogy that favours rote-learning, according to the Brazilian educator, Paulo Freire, can only oppress rather than liberate the mind. The mind thus neither be creative nor critically reason. In a word, our educational system does not help matters in this regard. This probably explains our dismal performance in regional and international university rankings as well as repeatedly massive failures in Senior Secondary Certificate Examinations.

    Our public libraries aren’t better either, as they suffer aeon of neglect due to the cankerworm of corruption permeating not only the political stratum but the administration of public institutions. Hence attractive, up-to-date materials for academic and recreational purposes are sadly lacking.  However, the few classics of world’s literature available in such libraries, can be complemented with contemporary ones by personal efforts were we the reading type. For, despite precarious economic situation, people are still buying clothes, jewelries and other ornamentals. One therefore wonders why compromises are hardly made for the sake of books.

    Our upbringing may be another factor. Quite a lot of us didn’t have the privilege of growing up under such mummies as Chimamanda’s friend who ‘bribes’ her child with five cents for every page read. Nor did we have daddies like the one mentioned in Aaidh Al-Qarnee’s Don’t be Sad – a dad who would tell his child while returning from market, he should only rest before the shops of booksellers or newspaper vendors. We did not, again, have brothers like John Bright, a brother who would tell us that his greatest lamentation in the face of library shelves is that life is too short to allow him enjoy the treasures before him. Above all, we did grow up watching on TV, leaders like Abraham Lincoln, who ‘was devoted to verse (and) could repeat from memory whole pages of Burns and Byrons and Browning’.

     

    • Bukar wrote in from Gashua and can be reached at aabukar555@yahoo.com
  • Dwindling oil prices: MainOne urges ICT deployment

    Dwindling oil prices: MainOne urges ICT deployment

    The Chief Executive Officer, MainOne,  Ms. Funke Opeke, has urged both the private and public sectors of the economy to deploy information communication technology (ICT), improve productivity and lower operating cost.

    She said the ICT sector is also important for the oil and gas industry as its deployment would result in optimum resource utilisation at lower cost.

    “The role of the ICT is particularly  critical in driving down costs and optimising operational efficiency in this period of falling oil prices. Oil and gas companies need to adopt ICT solutions to maintain profitability,” Opeke said during this year’s Oil and Gas Session in Lagos.

    She  added that  the slump in global oil prices has made fiscal belt-tightening measures imperative, stressing that with Federal Government reviewing 6,000 ongoing projects and proposing doubling of Value Added Tax (VAT) from five to 10 per cent, there is need for oil and gas companies to toe this line by leveraging available ICT infrastructure in Nigeria.

    Speaking on the expansion plans of the undersea cable company,  Opeke said Cameroon is one of  the countries the firm is looking forward to taking the sea cable to. She also said the firm will take services to the oil and gas producing Niger Delta region of the country.

    This, she believed, will significantly improve connectivity services in the Southsouth region and enable oil companies in this region access the internet more effectively by effortlessly interconnecting with their home offices.

    Specifically, Opeke noted the importance of enhanced connectivity of digital oil fields to MainOne’s Tier III Data Center, MDX-I cannot be overemphasised as it would lead to significant cost reduction.

    MainOne offers telecommunications services which include data center, co-location, global video center, metro ethernet, managed services, global internet services and global IP transit. The MainOne Tier III Certified Data Center, MDX-i, is TIA (Telecommunication Industry Association) 942 compliant with 600 rack space and ample work area space.

  • Dwindling revenue…How cocoa can help

    Dwindling revenue…How cocoa can help

    Dwindling oil revenue has led to a crushing cash crunch in the country, forcing government to announce austerity measures and taxes on luxury items. But experts say proper harnessing of cocoa resources will help, writes SINA FADARE

    As Consul-General of the United States Diplomatic Mission in Nigeria, Mr. Jeffrey Hawkins is no stranger to any part of the country. But one thing that has shocked him most is the failure of the country to take maximum advantage of its cocoa resources. His belief is that the country could shore up its earnings by billions from chocolate – a bye product of the cash crop.

    The envoy’s position will make more sense in the light of dwindling oil fortunes, a development which has made the Federal Government propose new tax regime next fiscal year.

    Coordinating Minister of the Economy and Minister of Finance Dr Ngozi Okonjo -Iweala, presenting the 2015 Budget proposal to the National Assembly, said : “Government is going to implement a sole charge on luxury goods; a 10 per cent import sole charge will be imposed on new private jets which are being brought into the country.”

    Mrs. Okonjo-Iweala added that a sole charge was also proposed on business and first class flight tickets and on luxury items.

    Hawkins feels cocoa has the potential to help the country out of oil-induced woes. The envoy told his audience at a conference on cocoa value chain that Nigeria has not positioned itself to take advantage of the opportunity of insatiable worldwide appetite for chocolate

    He regretted that despite the trend of technology in assisting massive production and processing of agricultural produce, Nigeria is still lagging behind.

    It was at a conference organised by Nigeria Expanded Trade and Transport, NEXTT, in collaboration with USAID and Olam to x-ray holistically the crises and forces that are militating against cocoa explosion.

    His words: “When I travel through the regions of Nigeria, I am struck by the fact that cocoa is still raised by hand, not by machine, and remains a very labour-intensive commodity to produce.  Cocoa production is still very much a family enterprise, from planting to carrying the bags of cocoa beans to the buyers, who may be far away from their farms. Despite the physical labour involved, farmers are realising very limited incomes from their efforts.”

    Hawkins pointed out that with the emerging trend in the demand of darker chocolate, especially in new markets such as China, international buyers were predicting a potential cocoa shortage by 2020. He challenged all the stakeholders to tap into the huge potentials by increasing the production level in the country.

    According to him, the way out is a holistic approach to the massive production of cocoa in terms of finance and investment, technology and technical assistance to raise quality and making cocoa a viable prospect for youth employment.

    But the Minister of Agriculture, Dr Akinwumi Adesina, believes the country is on the right track. He said Nigeria will soon witness an explosion in the cocoa industry due to the incentives introduced by the Federal Government to accelerate the expansion of cocoa production in the country has generated a lot of discourse among the industry stakeholders.

    Adesina, who spoke at a cocoa summit in Abuja, said the Jonathan administration had developed the Cocoa Value Chain, under the Agricultural Transformation Agenda (ATA), to shore up the country’s cocoa output which has been very low in the international market.

    The minister lamented that “While Cote d’ivoire’s cocoa has grown to over 1.4 million metric tons and Ghana at over 720,000 metric tons in the last decade, Nigeria’s had remained low at about 250,000 metric tons, until the recent efforts which are beginning to yield the desired dividends.

    Though, the minister argued that the production level has increased from 250,000 metric tons to about 370, 000 metric tons, stakeholders, comprising the producers, input suppliers, traders, exporters, indigenous and multinational companies, cocoa processors and cocoa farmers, disagreed with him. The stakeholders registered their opposition at a cocoa conference in Lagos, where they faulted the minister’s claim and insisted that the country has no concrete data on cocoa production.

    Speaking on the global trend in the industry and understanding Nigeria’s market share, Mr. Dimeji Filani, the former Managing Director of Armajaro, a major player in the cocoa industry and an officer with Barry Callebaut, another stakeholder player in the cocoa business, noted that the fortune of cocoa began a downward slide following heavy politicisation of policy on the crop.

    Filani lamented that Armajaro, a company that was shipping about 60,000 metric tons at its peak now struggls to ship about 10000 metric tons. He blamed the trend on the politicisation of the cocoa business. He noted that politicians, and not professionals, are often appointed as managers.

    He recalled that a lot of money earmarked for cocoa production under the administration of former President Olusegun Obasanjo, ended up in the pocket of politicians in farmer’s garment.

    Filani noted that Nigeria’s production figure was deliberately inflated from 200,000 metric tons to 400,000 metric tons just to cover up.

    He noted that the country may never get it right unless the government mustered the political will to wield the big stick against saboteurs and involve professionals, who have the passion for the cocoa industry.

    Filani challenged the government to always monitor the Export Expanded Grants (EEGs) given out to cocoa exporters so that at the end of the day, the votes will not be diverted.

    Speaking on how to boost production, the expert nobody needed a rocket science to understand the prevailing crisis. He said anything short of massive investment will amount to a waste of time.

    In a similar submission, the Managing Director of Multi-Trex Integrated Foods Plc and one of the pioneer cocoa processor in the country, Mr. Dimeji Owofemi, said the time has come for the government to go back to the drawing board and jettison the issue of monotonous conferences that would lead to nowhere.

    Owofemi urged the government to embark on aggressive enlightenment campaign on local consumption of cocoa to boost its production.

    He regretted that the production of cocoa by peasant farmers has been abandoned for a very long time, adding that it was necessary to replace the ageing trees with improved varieties that can yield within 16 months. This, he said, should be done in collaboration with youth empowerment scheme so as to raise a new generation of cocoa farmers.

    Besides, Owofemi said the youths must undergo re-orientation and re-training to re-focus their attention from non-existing white-collar jobs in other sectors of the economy. “You don’t invite the youths to a loose game, they will not come,” Owofemi said.

    He identified poor funding, policy inconsistency as the bane of the cocoa business.

    Perhaps the fundamental issue that gave the stakeholders serious concern was statistics which they put at zero level, a situation they agreed has contributed immensely to backwardness in the production of high grade cocoa.

    The Executive Director of the Cocoa Research Institute of Nigeria (CRIN), Prof. Malachy Akoroda, said the country has learnt nothing since 140 years ago, when cocoa was introduced.

    Akoroda said financial problem facing cocoa industry would end with the injection of the proceeds from if two and a half days oil drilling.

    The agronomist argued that massive production of cocoa can only be achieved with adequate funding of the CRIN, which he noted, can provide all the needed statistics on the crop.  He noted that the revolution in Cote d’Ivoire was attained by such intervention.

    He said: “Each of the 22 cocoa producing states would be well mapped and once that is done, the foundation has been laid and this can be build upon.

    “Research is the key to return cocoa to its lost glory in the country. All over the world, data is a global phenomenon on which new techniques and innovations are based. The sad story is that nobody knows the production statistic of cocoa and until we do that, we would not know where we are going.”

    He regretted that the farmers who toil all-year round gets between six to 10 per cent of the several billions being generated from cocoa annually.

    “The issue of raw materials, which is the cocoa beans, must be tackled with all seriousness with a back up consistent policy that will not short change the farmers at the long run. This will give room to address the issue of quality and packaging which will go a long way to improve cocoa explosion,” he explained.

    Akoroda said the country needed cocoa philosophers with passion absolute commitment for the crop to make a change.

    Advocating for a direct action and mobilisation of cocoa farmers, Dr Jibayo Oyebade, who is the chairman of Cocoa Revolution Project, a pilot programme being funded by the Ondo State government said the experiment of Oda Cocoa Farm in Ondo should be reference a point for the Federal Government to demonstrate its readiness to rescue the industry.

    Oyebade, who made a submission on how to attract youths to cocoa farming, noted that resuscitation of the Oda Cocoa Farm was was targeted towards the youths and that about 250 of them have been given

    Intensive training on pruning and maintaining of large cocoa plantations.

    He said: “We engaged the youths to prune the old coca tree and then plant another 100, 000 units on line and arable crops like tomatoes, banana are planted in the middle so that before  cocoa started fruiting, something will be fall upon by the new farmers. Government also gives them allowances so that they will not run away.”

    Speaking in the same vein, Mr. Kayode Faleti, the Senior Programme Manager in charge of the Southern Regional Office of the USAID, explained that a vibrant cocoa business will discourage youths from crime.

    Faleti urged the to go straight into action by involving those who can actually explore all the potentials in cocoa from primary production to end-users.

    According to him, lack of access to large parcels of land remained a major problem militating against commercial agriculture. He urged government’s intervention.

    “In terms of production, we are not there and more worrisomely we are not on the right track. Some of the farmers are not ready to lease their farms for commercial production and the old plantation needs re planting, therefore we need government intervention to arrest this situation,” he said.

    Allaying the fear that all hope was not lost, Dr Peter Aikpokpodion, who is the Team Leader, Cocoa Chain Development in the Federal Ministry of Agriculture and Rural Development, informed that government was working round the clock to turn the fortune of cocoa for the better.

    Aikpokpodion pointed out that there is a plan in the offing to include greater participation of the public sector in cocoa transformation, adding that a proposal has been sent to the presidency on the need to have a strong institutional framework for cocoa industry through a sustainable public-private partnership platform.

    He explained that cocoa farmers have been encouraged to organise themselves into cooperative societies to widen their asset to funds. Aipokpodion assured that government will do everything to strengthening the policy.

    He said: “We need to invest in the sector and to stimulate that we need a coordinating body in Cocoa Corporation of Nigeria, the strategy is to have everything relating with cocoa industry will be handled by this public and private sector.

    “The first step is to get this body establish , Cocoa Corporation of Nigeria and let government fund it and all other aspect of cocoa sector   from the upstream in terms of production, inputs, down to marketing and value addition would be coordinated so as to enhance grater production. It is capital intensive and the government is not shying away from this.”

  • NPDC and dwindling crude oil reserves

    SIR: Two breaking news in Nigeria in recent time should not go without comment. One was  news of the successful listings of Seplat on the Nigeria Stock Exchange (NSE) and London Stock Exchange (LSE).  The other was the disturbing news that Nigeria’s crude oil reserves had dropped to 35 billion barrels from the 37 billion barrels it stood in the last two years.  The reasons were linked to the lull in hydrocarbon exploration activities to replace depleted ones. This sorry situation was further confirmed with the recent rebasing of Nigeria’s Gross Domestic Product (GDP), showing that the share of crude oil and natural gas to the nominal GDP has declined to 17.52 percent, 15.89 percent and 14.40 percent for 2011, 2012 and 2013 respectively.

    I doubt that there is any Nigerian that would not  reflect on that news considering the harm that depleting reserves could do to Nigeria’s economy given that crude oil accounts for more than 90 per cent of the nation’s revenue. The question  that most people have demanded an answer to is, ‘what really is responsible for the dearth in the exploration and production of crude oil in Nigeria’? The answer lies in the inability to pass the proposed Petroleum Industry Bill (PIB) into law.

    But then, there is another issue.   And that has to do with the challenges that serious exploration and production firms partnering with state-owned firms like the Nigerian National Petroleum Corporation (NNPC) and the Nigerian Petroleum Development Company (NPDC) face in the quest to jointly bring on-stream, projects that would boost both Nigeria’s crude oil reserves and production capacity.

    Seplat’s success can be traced back to the period between 2010 and 2012, when Shell Petroleum Development Company (SPDC) in the bid to divest some of its onshore assets, sold about eight Oil Mining Licenses to some indigenous companies. Today, only Seplat has been in full production since it acquired these assets from Shell. The reasons have to do with undue delays from government bureaucracy.  It is one factor that has dampened indigenous companies’ ability to fund and develop the oil and gas sector, and to build a promising indigenous upstream industry. And one of the reasons why local banks are refusing to fund any project where NPDC is the operator is because of the inconsistency in government policy and bureaucratic delays and undue government interferences.

    Delays stifle investments; it is inimical to efforts to create jobs and curb rising unemployment; it diminishes the opportunity for human capital development and training opportunities for Nigerians; provides less or fewer contracts opportunities for local contractors, and thus contributing to militancy in the oil communities.

    •Chinedu Gregory,  

  • Japaul: Dwindling profit

    Rising incomes, steeply declining profit; Japaul Oil & Maritime Services Plc’s fundamental paradox appears to be worsening with every earnings report.

    Audited report and accounts of Japaul for the year ended December 31, last year showed a similar pattern of performance that had seen average profit before tax margin dropped consistently from a high of about 26 per cent in 2008 to a low of 4.2 per cent in 2012. First quarter report for the this business year has also indicated the same performance outlook for the current business year with average pre-tax profit margin dropping by 63 per cent within comparable three months o f operations.

    The unimpressive bottom-line has correspondingly affected returns, especially dividends to shareholders. While it had paid a paltry 2.0 kobo in previous year, Japaul could not declare any dividend for the 2012 business year as it struggled with rising financial leverage.

    Audited report of the oil and gas services company showed that while sales rose by about 20 per cent in 2012, declining cost efficiency undermined the top-down impact of the larger top-line. With 32 per cent increase in cost of sales, 29 per cent rise in total operating expenses and 560 per cent jump in interest expenses, pre and post tax profits contracted by 62 per cent and 70 per cent respectively. Besides, adjustments made in line with provisions of the International Financial Reporting Standards (IFRS) shaved 24 per cent off the intrinsic net assets value of the company.

    The balance sheet of the company underlined emerging concerns for performance outlook with the combination of negative working capital, declining liquidity, worsening indebtedness and generally weak financing structure.

     

    Financing structure

    Japaul’s shareholders’ funds dropped by 24.3 per cent from N22.56 billion in 2011 to N17.08 billion in 2012. While the paid up share capital had remained unchanged at N3.13 billion or 6.26 billion ordinary shares of 50 kobo each, re-examination of previously retained earnings left the company with negative reserves of N2.49 billion, which adversely affected the net assets base of the company. Total assets rose by 20 per cent from N27.27 billion to N32.66 billion. Current assets had declined by 24 per cent from N5.01 billion to N3.79 billion but it was counterbalanced by 30 per cent growth in long-term assets from N22.26 billion to N28.87 billion. Total liabilities however jumped by 230 per cent from N4.72 billion to N15.58 billion. Current liabilities had risen by 42 per cent from N3.41 billion to N4.83 billion while long-term liabilities leapt by 723 per cent from N1.31 billion to N10.75 billion.

    The financing structure of the company was generally weak. Debt-to-equity ratio stood at 17.4 per cent in 2012 as against 5.4 per cent in 2011. The proportion of equity funds to total assets dropped considerably from 83 per cent in 2011 to 52 per cent in 2012.

     

    Efficiency

    There were evident declines in underlying productivity and cost efficiency during the period under review. While the large top-line appeared to expand the frontier, the company struggled with less-efficient cost structure, which significantly eroded the underlying margins.

    The company undertook staff right-sizing, reducing average number of employees from 577 persons to 566 persons. Total staff costs thus dropped from N751.6 million to N588.6 million, representing average staff cost per employee of N1.04 million in 2012 as against N1.30 million in 2011. However, average contribution of each employee to pre-tax profit dwindled from N2.38 million to N0.92 million. Total cost of business, excluding finance charges, spiralled to about 95 per cent of total sales in 2012 compared with 87 per cent in 2011.

     

    Profitability

    Japaul saw a major contraction in profitability in 2012, further underlining the inability of management to halt sustained and considerable year-on-year decline in average profit-making capacity. Average pre-tax profit margin hit a low of 4.2 per cent in 2012 as against 13.4 per cent in 2011. It had dropped from 25.5 per cent in 2008 to 22.02 per cent in 2009 and closed 2010 at 15.02 per cent. Gross profit margin had set the downtrend in 2012 with loss of five percentage points from 46 per cent in 2011 to 40.7 per cent in 2012. With depressed bottom-line, both actual and underlying returns reduced considerably. Return on total assets slumped to 1.6 per cent in 2012 as against 5.0 per cent in 2011. Return on equity also dropped from 4.0 per cent to 1.6 per cent, underlining the double-end losses of shareholders who were not paid any dividend for the year.

    Earnings per share had slumped to 4.5 kobo in 2012 as against 15.7 kobo in 2011. The company had distributed N125 million to shareholders, on the basis of 2.0 kobo per share, as dividends for the 2011 business year. Net assets per share also dropped by 24 per cent from N3.60 in 2011 to N2.73 in 2012. Notwithstanding, the company’s net assets suggested a significant undervaluation at the stock market, where its shares have stuck around its nominal value of 50 kobo.

    Japaul witnessed appreciable growth in the top-line in 2012. Group turnover rose from N10.25 billion to N12.28 billion. Overall top-line performance was driven by impressive growth of 28 per cent in its largest business segment, offshore services, which recorded turnover of N7.24 billion in 2012 as against N5.66 billion in 2011. Besides, top-line performance was driven mainly by growth within the Nigerian market. Foreign incomes from the company’s operations in the United Arab Emirates dropped from N1.62 billion in 2011 to N1.25 billion in 2012

    . Nigeria contributed N11.03 billion to group turnover in 2012 as against N8.63 billion in 2011.

    However, cost of sales outpaced turnover growth with 32 per cent increase in 2012 to N7.28 billion as against N5.53 billion in 2011. Group gross profit thus inched up by 5.9 per cent from N4.72 billion to N5.0 billion. General and administrative costs ballooned to N3.66 billion in 2012 as against N2.93 billion in 2011. Sales and distribution expenses rose from N451.4 million to N680.6 million. Total group operating expenses thus stood at N4.35 billion in 2012 compared with N3.38 billion in 2011. While interest and other non-core incomes rose by 25 per cent from N62 million to N77 million, interest expenses jumped by 560 per cent from N32 million to N210 million. With these, profit before tax dropped from N1.38 billion to N521 million while profit after tax followed the downtrend with a drop of 70 per cent to N272 million in 2012 as against N908 million in 2011.

     

    Liquidity

    The liquidity position of the company weakened considerably during the period with negative working capital and significant decline in financial coverage and immediate response to financing obligations. Current ratio, which denotes the financial agility of a company by relating current assets to current liabilities, dropped below reassuring benchmark to 0.78 times in 2012 as against 1.47 times in 2011. Current ratio is accepted as one of the measures of solvency and going concern status. Also, the proportion of working capital to total turnover worsened in 2012 at -8.5 per cent as against positive working capital at 15.7 per cent in 2011. Debtors/creditors ratio stood at 400 per cent as against 475 per cent.

     

    Governance and structures

    Japaul was incorporated as a private limited liability company in 1994 and commenced operations in 1997. It converted to public limited liability status and became the first maritime company to be listed on the Nigerian Stock Exchange (NSE) in 2005. Japaul provides services to the upstream operators in the oil and gas industry including dredging, provision of offshore oilfield vessels, maritime logistics, pipeline construction and oil flow lines among others.

    There were no major changes in the ownership, board and management of the company. Mr. Jegede Paul, the main promoter of the company, who holds the largest single individual equity stake of 6.0 per cent, remains the managing director. Major General Joseph Omosebi (rtd) also still chairs the board of directors. Japaul is owned by some 229,000 shareholders with largest spread of ownership within the range of one to 100,000 shareholdings. The company’s corporate governance structure complies with extant code of corporate governance, although it sometimes fails to meet up its scheduled reporting and disclosure requirements.

     

    Analyst’s opinion

    The management of Japaul needs to demonstrate it has the capacity to halt the dwindling fortunes of the company and make commensurate returns to shareholders. Contrary to the key-man scenario that dominates the psychology of the company, Japaul is a retail stock owned largely by sundry shareholders whose concerns border not only on growth and investment but also sustained returns. While the company has made commendable investments in operations, it has failed to align the management structure, dividend policy and governance with the large retail ownership structure. This is the crux of the nominal valuation of its shares.

    Besides, with five executive directors-including the founding managing director and four general managers, Japaul appears to run a top-heavy management that looms larger than its actual size as a relatively small company. This also applies to its 11-man board of directors and its 6.26 billion outstanding ordinary shares. It needs to undertake considerable cost reduction strategy, starting from its corporate structure down to the operations. Financial mismatch or high gearing will also further complicate the outlook of the company.

    All these are underscored by early operational results for this year. First quarter report ended March 31, 2013 showed that while turnover rose modestly to N3.47 billion in 2013 as against N2.99 billion in first quarter 2012, general and administrative costs jumped from N784.64 million to N1.16 billion. Interest expenses leapt to N168.54 million as against N38.35 million. These depressed profit before tax from N892.99 million to N380.08 million while profit after tax dropped from N803.69 million to N334.47 million. Average profit before tax margin dwindled to 10.96 per cent as against 29.9 per cent in comparable period of 2012. Unless it tackles key fundamental changes, Japaul appears set for the downbeat again.

     

     

     

  • Dwindling fortune of Southwest PDP

    Dwindling fortune of Southwest PDP

    Southwest Peoples Democratic Party (PDP) is addicted to crises. Assistant Editor AUGUSTINE AVWODE writes on the dwindling fortune of the polarised party and implications for 2015

     

    These are trying times for the Southwest Peoples Democratic Party (PDP). Between 2003 and 2007, the party loomed large in the region. Little did its leaders guess that power is transcient.

    In the six states-Lagos, Oyo, Ogun, Osun, Ondo and Ekiti-the party has lost power.Thus, top party leaders are left in the cold. Also, crisis is tearing the party apart at the national level.

    Indisputably, PDP is back to its pre-2003 period in the zone when it only had one senator, Gbenga Aluko who defeated the former National Publicity Secretary of Afenifere, Prince Dayo Adeyeye, to the surprise of the Alliance for Democracy (AD), which produced the six governors in 1999.

    However, the emergence of General Olusegun Obasanjo (rtd) as the President was a plus for the zonal chapter, although AD floored PDP in his native Ogun State at the governorship and parliamentary elections.

    In 2003, the story changed dramatically four years later in 2003. The party displaced AD in five states. Only Lagos State survived the onslaught led by the former President. In 2007, the party maintained its hold on the region through massive rigging. Again, only Lagos State survived the desperation to capture the region.

    The reward for political relevance was not in short supply for the Southwest PDP chieftains. Many of them got plum federal appointments. The beat changed when the Appeal Court deposed the PDP governors in Ondo, Ekiti and Osun states.

     

    Reversal of fortune

     

    The April 2007 general elections marked the begining of the reversal of fortune for the Southwest PDP. The party went into the 2011 general elections with only two out of the five governors. After the polls, the party lost the Ogun and Oyo states. It also lost National Assembly seats.

    Now, the ACN has 14 senators and Labour Party (LP) has three, the PDP could only manage to produce a senator from Oyo North, Chief Hosea Agboola, a former Commissioner for Local Government and Chieftaincy Matters in Oyo State.

    Observers contend that the party faces an uncertain future in the region. Gone with the wind were influential positions held by the party chieftains. They include the Senate Majority Leader, Speaker of the House of Representatives, and chairmen of Senate Committees on INEC and Appropriation.

    The loss of the Speakership was dramatic. On June 6, 2011, House of Representatives member from the Northeast Aminu Tambuwal defeated Mrs. Mulikat Akande-Adeola from the Southwest to emerge as the Speaker. He polled 252 votes to defeat Adeola, who polled 90 votes. The election was significant in many respects. Adeola was the candidate endorsed by the PDP national leadership and the Presidency to ‘compensate’ the party in the zone, because it had lost other relevant positions to other zones. The emergence of Tambuwal dealt a blow to the party’s zoning arrangement. It also stopped the move by the Southwest PDP to produce three Speakers of the House in a row. Southwest PDP had produced Mrs. Patricia Etteh, who was forced out in controversial circumstances, and Mr. Dimeji Bankole, whose re-election bid failed. Interestingly, the opposition parties, including the ACN, insisted on Tambuwal.

    However, the Southeast zone produced the Deputy Senate President, Ike Ekweremadu, and House of Representatives Deputy Speaker, Mr. Emeka Ihedioha.The only position of note, which Southwest PDP could boast of in the aftermath of the 2011 general elections, was the Board of Trustees (BOT) chairmanship occupied by Obasanjo. But he resigned from the position on April 3, 2012. Now, Southwest PDP is pleading with the BoT to choose its chairman by consensus so that the position can be retained in the zone.

    Rising from the joint meeting of the BoT members from the Southwest and the zonal working committee members, in Abeokuta, Ogun State capital, the party urged the national leadership to compensate the zone with the slot.

    PDP Zonal Publicity Secretary Kayode Babade told reporters that the party should not choose the BoT chairman by election. “The leadership of the party should be encouraged to elect the chairman of the BOT by consensus in the interest of peace, harmony and cohesion of our great party at the highest level, he said.”

    Recently, the PDP National Secretary, Prince Olagunsoye Oyinlola, was deposed by a Federal High Court. Although he has appealed the ruling, the tragedy was felt by the zonal chapter. judger.

    Southwest PDP is not a cohesive body. The Ogun State chairman, Chief Adebayo Dayo, had filed a suit challenging the nomination of Oyinlola by the Southwest caucus on the ground that two court judgments had nullified the Southwest Zonal Congress where he was nominated. Defendants in the suit also included the PDP and the Independent National Electoral Commission (INEC).

    In his judgment, Justice Abdul Kafarati held that the actions of PDP and Oyinlola had violated the two court orders. He ordered Oyinlola to vacate the seat. Justice Kafarati stressed: “The conduct of the defendants constitutes flagrant disobedience to a subsisting court order and also constitutes a criminal contempt of court and any step taken thereafter by the PDP secretary is a null and void.”

    The party has obeyed the court ruling by naming the national deputy secretary, Solomon Onwe, as the acting national secretary.

    Analysts said Oyinlola’s sack portends grave danger to the Southwest PDP. Senator Lekan Balogun, a PDP chieftain in Oyo State, said Oyinlola’s sack was welcomed. But he lamented the attitude of the party leadership in the zone. He singled out former President Olusegun Obasanjo as the man to blame for the woes of the party.

    “The poor fortune of the party in the Southwest is unfortunate. It is a leadership problem. It shows that the leaders have mismanaged the enormous goodwill of the people, once they came into positions of authority. They are to blame. Whatever is bedevilling the party in the Southwest today is a creation of leaders who took the followership for granted.”

    Balogun however, said that, if the party could put its house in order and do the right thing, it could regain its lost ground.

    But Oyo State PDP chairman Yinka Taiwo said the party has not lost anything. He urged all to wait for the outcome of Oyinlola’s appeal. He also expressed optimism that the party would consider the zone for the BoT chairmanship. Taiwo was however, silent on the chieftain the zone would sponsor for the position.

    “I can tell you that the party’s fortunes have not dwindled and it has not lost anything because Prince Oyinlola has appealed the judgment. I would like to advise that we wait for the outcome of the appeal before we say anything.

    “As for the BoT chairmanship, we can still have it. You know it has not been elected and we believe that the zone would be considered by the party. I can’t tell you the person we would present now, but certainly we would make it”, he said.

    A chieftain of the party from Ogun state, who craved anonymity, submitted that the party needed a lot of soul searching. He said it is too early to conclude that it has lost it all.

    “I don’t want to say that we have lost it all. But the first question we should ask is how did we manage to get to this point? If the party works hard at solving its internal crisis in all the states of the Southwest, it can still make a reasonable impact. You see the showing in the last Ondo governorship election. That shows that, if we had worked as a united team in the zone, we could have taken the state. But many people have their own agenda, different from that of the party in the zone”, he said.

     

    Sunset for PDP?

     

    Notwithstanding the optimism being expressed in some quarters about the ability of the PDP in the Southwest to bounce back and reclaim what it lost in 2015, it is believed that the sun might have set for the party. The PDP national chairman, Alhaji Bamanga Tukur, is anxious to reposition the party. He had expressed deep concern for the troubled Southwest chapter, urging the warring members to close ranks.

    Tukur lamented the PDP’s electoral loss in the region. He said, if the trends persisted, it could affect the fortune of the party in the future.

    “In the Southwest, the image of the PDP had gone down to level zero and I don’t think there is anything it can do to redeem the image. And I don’t see any miracle it can perform between now and 2015 that would give it any in-road to the Southwest”, he added.