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  • Enhancing access to N220b MSMEs’ fund

    Enhancing access to N220b MSMEs’ fund

    Limited access to credit has been a major challenge to Micro, Small and Medium Enterprises (MSMEs). To get round the problem and unleash MSMEs’ potential to create jobs, boost production and reduce poverty, the Central Bank of Nigeria (CBN) created the N220 billion MSMEs Development Fund in August 2013. How can operators access the fund with ease? Assistant Editor Chikodi Okereocha reports.   

    The Federal Government, through the Central Bank of Nigeria (CBN), wet the appetite of operators when it launched the N220 billion Micro, Small and Medium Enterprises (MSMEs) Development Fund in August 2013. The lifeline, expectedly, offered hopes of closing the financing gap in the sector. It was acknowledged globally as the engine of economic growth because of its potential to create jobs, boost production, generate income and reduce poverty.

     

    MSMEs before the scheme

    Before the roll out of the scheme, about 80 per cent of MSMEs  had no access to the financial market, according to a survey by the International Finance Corporation (IFC) and Mckinsey & Company, a United States (US)-based multinational management consulting firm. Between 2003 and 2012, commercial bank loans to small scale enterprises dropped at an exponential rate. Analysis of the yearly trend in the share of commercial bank credit to small-scale industries indicated a decline from about 7.5 per cent in 2003 to less than one per cent in 2006 and a further decline in 2012 to 0.14 per cent.

    To make matters worse, commercial banks charge as high as between 22 and 25 per cent. Micro-finance Banks (MFBs) charge higher, insisting on between 30 and 40 per cent interest rates. The exorbitant interest rates charged by the commercial banks is said to be partly responsible for the shutting of many industries. Others simply relocated to neighbouring countries where they are sure of interest-friendly credit facilities.

    Despite the high cost of credit, Nigeria’s  MSMEs estimated at 17.6 million employed about 32.4 million people as at 2012. It also contributed about 46.54 per cent of nominal Gross Domestic Product (GDP), a figure which raised hope that the N220 billion would, perhaps, be a shot in the arm of operators in the MSMEs sector. CBN Governor Godwin Emefiele amplified this expectation when he described the intervention as an innovative way of improving MSMEs access to finance, shoring up their potential for job creation and enabling them reduce poverty in the country.

     

    Access becomes an issue

    However, MSMEs’ ability to play this critical role on the strength of the N220 billion lifeline has come under serious threat due to difficulties in accessing the fund. Some of the operators lamented that it is easier for the camel to pass through needle’s eye than to access the fund because of the stringent conditions and guidelines for accessing it.

    For instance, the Nigerian Association of Small Scale Industrialists (NASSI) lamented that accessing the fund has become extremely difficult. “The problem with funds like that and over the years, we have had so many funds like that, you cannot access them. So, they remain a mirage. And this N220 billion has continued to be a mirage, which means you can’t touch it. The CBN guideline as published makes it impossible for anybody to access that fund. That is what happened to all kinds of funds domiciled in the CBN, nobody can access them,” the National President of NASSI, Chief Chuku Wachuku said.

    Chief Wachuku, a Consultant Economist, told The Nation that by giving the fund and other similar funds to government agencies to administer instead of putting them directly into private sector organisations or development finance institutions, such government agencies would create bureaucratic empires.

    “You are going to have managing directors and deputy managing directors with all the attachments and appurtenances thereto and then the money will just go. But, the correct thing to do is to find a critical strategy to get these funds directly into the businesses to create employment and when you create employment you create wealth,” he argued.

    He also said putting the funds into development finance institutions would have been more ideal because they understand the concept of small scale enterprises. Noting that Deposit Money Banks do not understand the concept of short-term financing, he, however, urged the development finance institutions, such as the Bank of Industry (BoI) and Bank of Agriculture (BoA) to understand that they are intervention agencies of the Federal Government set up to give effect to the fiscal policies of government. “Their duty is not to make money or show increased balanced sheet; once they do that, we are going to call on the Presidency to scrap them,” he said.

     

    Operators call for invovement in fund’s administration

    Wachuku said putting such funds directly into private sector organisations, or development finance institutions, would mean getting the fund as quickly as possible without too many bottlenecks. He said this would be done by working with members of the Organised Private Sector (OPS), who would translate the interventions into real industrial growth. “I am using this opportunity to call on the Presidency to re-evaluate these huge sums of money pumped into public sector agencies and put them directly into private sector organisations,” he stated.

    He wondered why the government continued to pump more intervention funds into government agencies despite the fact that they he not lived upto expectation, pointing out that “the correct thing to do is to find a critical strategy to get these funds directly into the businesses to create employment and when you create employment you create wealth”.  He insisted that everywhere, the government cannot create employment rather; employment and wealth creation must be private sector-driven.

    Members of Enugu Chamber of Commerce, Industry, Mines and Agriculture (ECCIMA) are also kicking, saying that access to the fund has remained a challenge for close to two years after it was launched. To ease access to the fund, the Director-General (DG) of ECCIMA, Mr. Emeka Okereke, said OPS members should be brought into its administration. He argued that since the fund is a developmental initiative, OPS members should be involved in its administration. According to him, this would allow ECCIMA and other private sector organisations vouch for the integrity of their members wishing to access the fund.

    This, Okereke said, would go a long way in reducing incidents of loan default, as the OPS would be engaged in setting eligibility criteria for accessing the loans. The ECCIMA chief also said there was need for banks to create SMEs desk to help operators package their business proposals very well to attract the required funds. Noting that the N220billon MSMEs intervention fund is not charity, he said OPS members must possess all the basic criteria for accessing the fund including presenting a bankable proposal.

    The Director-General said most MSMEs lack the capacity to package their feasibility studies very well. Besides, they lack good management structure and accounting system to make them attractive to financial institutions for any form of assistance. Reminded that the Bank of Industry (BoI) had earlier signed a service agreement with Business Development Service Providers (BDSPs) to help operators package their loan requests, develop bankable business plans and proposals for to facilitate their access to finance, Okereke said most of the MSMEs don’t have the financial resources to hire experts or professionals to their feasibility studies.

    Also worried by lack of access to the fund, the Abuja Chamber of Commerce is canvassing the inclusion of the OPS in setting criteria for assessing the fund. Its Vice President, Public Relations, Jude Igwe, commending the N220billion scheme launched by President Goodluck Jonathan as a policy in the right direction, advised that the OPS should be engaged in setting eligibility criteria for assessing the loans.

     

    CBN’s guidelines

    Under CBN’s guidelines, the fund, which attracts nine per cent interest rate,would be administered through private or state owned Micro-Finance Institutions (MFIs), Finance Houses, and Cooperative Finance Agencies. Such MFIs or micro-finance banks must pass CBN’s competency and proficiency tests in order to certify them capable of distributing these funds to MSMEs. State governments will be able to access up to N2 billion each for lending to eligible beneficiaries through Participating Financial Institutions (PFIs) in their states.

    In other words, the CBN will not be lending directly to farmers or businesses. What the fund does is a wholesale fund. It provides funding to the PFIs. MFIs or micro-finance banks can also come to the fund. The CBN will assess them; give them the money at low interest rate. The PFIs would undertake that they will lend at low rate of interest to micro-entrepreneurs, the low-income earners, farmers, artisans and the active poor who operate in the informal sector.

    Also, PFIs can only finance agricultural value chain activities, trade and commerce; cottage industries, artisans, among others. The apex bank in a bid to ensure that productive sectors of the economy attract more finance necessary for employment creation and diversification of the country’s economic base, also said a maximum of 10 per cent of the commercial component of the fund should be channeled to trading and commerce.

    Although, CBN requests that 60 per cent of the fund, representing N132 billion, be earmarked for providing financial services to women-owned businesses, Emefiele said PFIs would be required to submit periodic returns on disbursements as well as an analysis of the social impacts of the fund. He added that the finance sector regulator will also undertake regular on and off site checks to ascertain the veracity of the reports received.

    That is not all. The CBN also demanded that borrowers provide 100 per cent near-cash cover in treasury bills or fixed deposit, a situation said to have made it difficult for most finance house operators to draw from the fund. Most of the finance house operators are therefore, reluctant to draw from the loan. In their own thinking, the CBN cannot force people to invest in treasury bills or keep fixed deposits because they want to borrow. Because of this, only commercial banks are said to be meeting the drawn-down policy and are accessing the loans. The snag however, is that this arrangement defeats the objective of setting up the fund.

    However, Wachuku argued that this should not be so, pointing out thatthe economy of the emerging nations or even developed nations appreciate, that economies must necessarily depend on MSMEs and the informal sector because it’s the engine of growth. He said 70 per cent of all new net jobs in the US are created by small and medium enterprises. He also said in Nigeria, SMEs contribute 90 to 95 per cent to GDP, but their only problem is that whereas they contribute this percentage to GDP, the wealth addition stands at only 46 per cent.

    Indeed, in developed economies of the world, the private sector is the engine of economic growth, propelling the economies of those countries by creating the bulk of job opportunities. Government only creates the enabling environment for the private sector to thrive through unfettered access to credit facility to MSMEs in those countries. Government also provides the necessary infrastructure, including guaranteeing the security of lives and property. But this is not the case in Nigeria where the government remains the largest employer of labour.

     

    Conclusion

    The hope was that the fund, seen by not a few stakeholders as a practical approach to boost the employment and wealth creation capacity of operators of MSMEs, would reverse this trend. But as things stand, OPS members believe that the initiative can still deliver on its promises if private sector players are brought into the administration of the fund.

  • ‘Bakers accuse bank of delaying release of N3.4b Cassava Bread Fund’

    The National Master
    Bakers and Catering
    Association of Nigeria has expressed worry at the unnecessary delay in the disbursement of the N3.4billion Cassava Bread Fund by the Bank of Industry (BoI).

    The Chairman of the Association, Simeon Abannlor, while reacting to claims by the Lagos Chapter of the Association that no Master Baker has benefited from the Cassava Bread Fund, said the BoI should be blamed for the delay in the release of funds and not government.

    Abannlor said the Federal Government has been sincere enough by allowing BoI to disburse the funds so as to ensure transparency, but regreted however since January 2014 when the first set of beneficiaries received the bakers equipment made up of 2000 capacity Rotary oven, Spiral Mixer, 80KVA Generator, deep Freezer and  working Capital of N1million, it was yet to process application of other beneficiaries.

    Basically, in an effort to scale up the production of cassava bread by the master bakers, the Federal government domiciled N3.4billion with the BoI to be disbursed to the Small Scale High Quality Cassava Flour Producer, Large Mills, and Master Bakers.

    The body admitted that N1.2billion of the said amount has so far being disbursed since 2013, while 2.2billion is still domiciled with the bank.

    The disbursement of the Cassava Bread Fund according to the National Chairman is in progress, as the ministry has so far trained 200 of its members out of which 177 members are beneficiaries.

    Against the backdrop of the allegation raised by the Lagos Chapter of the association, he disclosed that 96 master bakers across the country have received their equipment. He explained that for the first phase of the project, the bank selected 4 master bakers from each state

    He said each baker received 2000 capacity Rotary oven, Spiral Mixer, 80KVA generator, while the beneficiaries are still expecting deep freezers and a working capital of N1million.

    Commending the Agriculture Minister for taking decisive steps in ensuring the success of the project, and that the fund domiciled with the Bank of Industry gets to the intended beneficiaries, he expressed his reservation against the Lagos chapter of the association for staging protest against the policy, saying they are only trying to play politics with food security.

  • ‘Mining sector needs N100b intervention fund’ 

    ‘Mining sector needs N100b intervention fund’ 

    President, Miners Association of Nigeria, Alhaji Sani Shehu at the weekend said Nigeria needs N100 billion intervention fund to immediately start exploitation  of mineral resources to rescue the economy from the adverse impacts of  dwindling oil prices.

    The fund, according to him, could be spread within a period of two years for the provision of infrastructure in mine sites  to ameliorate the challenges of transportation in the sector.

    Shehu explained that the miners are in dire need of means transporting their minerals from site to the industrial areas for processing.

    Speaking with our Abuja correspondent on telephone, he said: “For instance, we can send a proposal for N100billion. And that money cannot be given at once, may be for two years. That money can be set aside for the minerals sector. “First of all, the infrastructural challenges can be addressed.

    “The mining site should have a dedicated railway line. Most of the industrial minerals are basically in the north, and the industries that need these minerals are concentrated in the south. And moving these minerals from the mines to the industry is a serious challenge.

    “The money can also be used to complete the generation of geological information data that government started over the years.”

    The miners boss said it would be a walk over for the local miners to produce the required coal for the generation of 1,000megawatts (Mw) targeted by the Federal Government if the government tackled the transportation challenge.

    Shehu said miners can meet the target if the infrastructure is available. He said: “One major challenge of coal-to-power is the transportation of coal from the mines to the power plants. There is supposed to be a railway line to link the two. If that is available, we have more than enough coal to produce the coal that Nigeria needs for power generation.”

    He said he was part of the presidential retreat on solid minerals where he presented a proposal  to President  Goodluck Jonathan to encourage  the production  of industrial  minerals so that the country could use it as  raw materials in order to discourage their importation.

    He lamented that there are industrial minerals scattered all over the country lamenting that “we are importing minerals like gypsum, barite and coal.”

    The Presidency, according to him, admitted that his proposal was in line with its import substitution initiative, which also identified funding and machinery as major challenges in the sector.

    On why Nigeria still import barite and coal, he said there is politics in the whole issue because the importers that own barite mines overseas would naturally prefer importing from their countries under the pretext that Nigeria’s is of poor quality.

    He called on the government to lift the waiver that allows importation of barite into Nigeria, especially now that it needs to boost the economy.

    Shehu said: “The truth is this: There is a politics in barite importation. Our barites are okay but those that process barite and supply to  end users have their barite mines overseas . So they would rather prefer importing from their mines to buying from Nigeria.”

  • ‘OPS yet to access N220b MSME fund’

    The Onitsha Chamber of Commerce has decried the inability of members of the Organised Private Sector (OPS) to access the Federal Government intervention fund for Micro, Small and Medium Enterprises (MSME). The President of the Chamber, Dr Tim Anosike, expressed this concern in an interview with reporters. “The OPS is still having difficulties in accessing the Federal Government’s N220b MSME fund,” he said.

    Dr. Anosike disclosed that the problems facing the sector included the complicated procedures in accessing the fund and lack of interest of many banks in the programmme. “The current N220 billion MSME intervention fund by the Central Bank of Nigeria (CBN) is a laudable initiative. This chamber believes that if the fund could be made available for the target groups, the national economy would received a significant boost at the end of the day.

    He said this is more, considering that 60 per cent of the fund goes to women entrepreneurs. He, however, expressed fears over the complicated

  • SEC, fund managers strike partnership on N152b mutual funds

    Securities and Exchange Commission (SEC) and fund managers would work together to enlighten the investing public and further develop the mutual funds industry. The total assets of mutual funds in Nigeria are estimated at N152 billion.

    At a meeting between SEC and fund managers under the auspices of Fund Managers Association of Nigeria (FMAN), SEC and FMAN agreed on the need to further collaboration in order to develop the potential of the fund management industry and the capital market. Members of FMAN visited the acting director general of SEC, Mr. Mounir Gwarzo in Abuja.

    Gwarzo said SEC would embark on intensive investors’ education to woo retail and institutional investors in order to improve the level of domestic participation in the capital market.

    He said one of the strategies of the new management is to embark on huge public enlightenment programme with other stakeholders to educate the investing public.

    “Fund management is close to our heart as it is directly under our purview. In dealing with others, we partner with other Self Regulatory Organisations (SROs). We will collaborate with you anytime we want to commence the enlightenment through the use of town hall meetings, radio jingles among others. We are ready to put in money for market development and that is one of the cardinal objectives of this management,” Gwarzo said.

    President, Fund Managers Association of Nigeria (FMAN), Michael Adebola, noted that Nigerians need to have a lot of understanding about what mutual funds is all about adding that the enlightenment will assist to boost the industry.

    “We have 52 funds in 10 different sectors with the largest being the equity based ones which presently stands at 45. Between 2008 and 2009, all we had invested in funds was about N19billion, but as at last week, we had N152 billion,” Adebola said.

    He assured that FMAN would work with the SEC on enlightenment of the investing public which would translate into a bigger fund market in the country.

    Director, Collective Investment Scheme (CIS), Securities and Exchange Commission (SEC), Mrs Louisa Eni-Umukoro, had recently said SEC was considering review of the cost structure and expenses of mutual funds with a view to ensuring that more returns accrue to investors.

    She said the Commission was concerned about the expenses and costs relative to fund management.

    According to her, SEC is considering introducing a multi-fee class structure for the mutual funds alongside other measures to reduce costs.

    “We are looking at introducing a multi-fee class structure whereby the more you subscribed, the less you pay. It’s something we are going to work out with the fund managers,” Eni-Umukoro said.

    She said SEC is considering reviewing downward the current expense ratio ceiling of 5.0 per cent to discourage frivolous expenses by some managers warning that the Commission will start to publish expense ratios of mutual funds on its website.

    Eni-Umukoro said the apex capital market regulator has amended its rules and regulations to cut down expenses relative to fund management.

  • Controversy over N21b PDP campaign fund

    Controversy over N21b PDP campaign fund

    There seems to be no end to the criticisms that have assailed the Peoples Democratic Party (PDP) campaign fund-raising that fetched a record N21.05 billion. The cash exceeds the mandatory N1 billion stipulated by the Electoral Act. Besides, the majority of donors are not identifiable. Group Political Editor EMMANUEL OLADESU examines the renewed push for monetisation of politics by the ruling party and its implications for the general elections.  

    The unprecedented Peoples Democratic Party (PDP) fund-raising is still generating ripples. Even, under the power loaded former President Olusegun Obasanjo, the ruling party managed to exercise caution, in utter sensitivity to wide condemnation and public outcry it would have provoked.

    On December 20, the Banquet Hall of the Presidential Villa, Abuja, the Federal Capital Territory (FCT), was aglow with festivities. The National Party leader, President Goodluck Jonathan, presided over a special meeting of political investors. With him were his deputy and co-beneficiary, Vice President Namadi Sambo, Senate President David Mark, House of Representatives Deputy Speaker Emeka Ihedioha, the National Chairman, Alhaji Adamu Muazu, the Board of Trustees (BoT) Chairman, Chief Tony Anenih, governors, legislators, and other party chieftains.

    Unlike the All Progressives Congress (APC) presidential campaign fund-raiser, which is moderated by the national mood, the PDP event, which observers have described as ill-advised, obscene, and aggressive campaign revenue drive, underscored the wheeling and dealing character of the party and its inept government, and their penchant for the abuse of the democratic process. While the PDP made donation to campaign fund the exclusive affair of government contractors and other Nigerians who have made money from government, the APC adopted the style of a mass movement. Through this approach, donors to the presidential campaign of the APC candidate, Gen. Muhammadu Buhari, is to a large extent, verifiable.

    APC National Vice Chairman Senator Lawal Shuaib called for sanction for those who may have stolen public money for political campaigns. He said the opposition party will be a marked departure from the fraudulent trend of campaign funding. “In our own case, we intend to do fund raising, which is going to be very transparent. Whoever donates money, we will publish it so that the whole world will see. People are making donations through the website and through the account number provided. We are going to publish everything because we want to make our source of funding as transparent as Nigerians may not even have expected because we are talking about change. We want to change the ayatems and the practices and what has been the norm,”he added.

    In a public advertisement, APC National Publicity Secretary Alhaji Lai Mohammed, said the party has yielded to the decision of Nigerians to make voluntary donation. He made the bank account name and number public. “Our party, the APC, has recently been inundated with calls and messages from Nigerians at home and in the Diaspora, who are seeking to confirm the bank account details of the Buhari Support Organisation so that they can make their own financial contributions to the campaign of the APC presidential candidate,” he said.

    According to reports, more than N21.05 billion was realised at the “gathering of few and wealthy friends of the PDP government.” The timing of the event has been faulted by many Nigerians. A legal luminary, Chief Niyi Akintola (SAN), said the huge sum was raised in the aid of President Goodluck Jonathan’s re-election bid at a time 14 state governments could not pay monthly salaries. Former Kaduna State Governor Balarabe Musa frowned at the act of perfidy, saying that there was a naira rain at the Aso Rock Villa at a time many Nigerians could not afford three square meals.

    Other critics said the flamboyant hunt for campaign funds smacked of indifference to the plight of the distressed people ravaged by terrorism. Irked by the gross insensitivity, human rights activist Nelson Ekunjimi said the PDP Federal Government is raising money for re-election when the country is passing through multiple crises, which the President has failed to tackle. He said the sole pre-occupation of the ruling party is the general election at a time two states are being annexed by terrorists, who hoist their flags in captured towns and territories, thereby challenging the national sovereignty. Ekunjimi, the Director of the Centre for Rights and Grassroots Initiative (CRGI), pointed out that money was being raised to sustain Dr. Jonathan in power when internally displaced persons suffering from the Boko Haram insurgency are denied succour. “How do you want the parents of the abducted Chibok girls to feel? Can they be happy and enthusiastic about fund-raiser when the fate of their loved ones hangs in the balance? The insensitivity and aloofness is even underscored by the fact that the President did not deem it fit to mention the plight of the abducted Chibok girls in his new year message to the nation,” he added.

    The pattern of scandalous donation is shrouded in secrecy and controversy. The question is: who are the donors? Beyond their broad description as fair-weather friends of the President, top party chieftains, government contractors and businessmen, the actual identities of the donors are concealed. Critics have alleged that the few, whose identities were revealed, are government contractors and those whose sources of money are traceable to government. But, since the PDP has also converted the electioneering period into a season of investment and brisk business, political investors, who hope to garner returns on their investment, also dominated the festival of strategic revenue generation.

    The ceremony was chaired by the wealthy Chairman of Skye Bank, Mr. Tunde Ayeni, one of the big names in the telecommunication sub-sector. His donation came in two parts. Apart from donating N1 billion on behalf of himself, he donated another N1 billion on behalf of friends, whose identities are not known. At that stage, the ceremony should have ended  because the N2 billion has exceeded the presidential election expenses anticipated by the Electoral Act.  A group, the Civil Society Network Against Corruption (CSNAC), pointed out that the PDP deliberately contravened Section 91 (2) of the 2010 Electoral Act (as amended), which states that “the maximum election expenses to be incurred by a candidate at a presidential election shall be N1 billion.”

    Other donors clearly have partisan motives. A PDP sympathiser from Kwara State, Mrs. Bola Shagaya, friend of the First Lady, Mrs. Patience Jonathan, donated N5 billion. She is an active player in the oil  and gas industry. The donation was on behalf of herself and her “unidentified friends.” Senator Jerry Gana, former university don, prominent politician and permanent friend of any government in power, donated N5 billion. The Niger State born politician has an enormous investment in the energy sector as a beneficiary of privatisation. Concern has been mounting over the fate of Power Holding Company of Nigeria, which has been sold to private operators. But, people were confused when the government that sold the edifice proposed to arrange out a controversial bail out for the power sector to the tune of N213 billion. The 15 states on the board of the Niger Delta Development Commission donated N15 million.

    Twenty-one PDP governors led by Akwa Ibom State Governor Godswill Akpabio coughed out N1.05 billion. Each of the governors donated N50 m.  In Musa’s view, this is scandalous. “If civil servants are agonising over the non-payment of salaries and their governors are participating in the donation jamboree in Abuja, it is worrisome,” he said. However, other donations by consortium of firms and operators in critical sectors are also scandalous. The motivation for a donation of N500 million by the power sector, which has generated more darkness than electricity in recent years, was unknown. So was the construction sector, which has contributed to the failure of government to adequately fight the infrastructure battle. The sector donated N500 million, despite the complaints by the operators that they could not complete the contracts awarded by governments because it has failed in its financial obligations. Sources said that pressures were mounted on other wealthy businessmen and big contractors who depend on the government for economic survival. Although many of them were not convinced, they yielded because they thought that non-compliance was risky for their business interest.

    In Musa’s view, the fund-raising reflected the monetisation of politics by PDP leaders, adding that it smacked of irresponsibility. He said the PDP has corrupted the electoral process by its plan to woo the voters with money. Musa said the motivation for raising the huge amount should be investigated by the anti-graft body. “It is money stolen from the government. The money could not have been donated by someone who earned it legitimately. They are monies stolen from the public fund. Can they say the money is from their pocket? My advice is that those who stole public funds should not go away with it,” he added. Besides, the long-term implications of the pre-election activities should not be glossed over. “Are they not donating because of what they hope to reap after the election? If a contractor is donating to the party of government in power, how can the government which accepts the donation frown when the contract is not executed? Can the government insist on contract execution by its corrupt ally, who is a contractor?”, he queried.

    Akintola, who shared this opinion, lamented that political leaders have elevated 2015 general elections over and above the collective survival of the country. He maintained that it is wrong for governors to donate huge sums to the campaign fund, when workers are protesting the non-payment of salaries. “My own concern is the way we elevate politics over and above the economy and security. Nigerians are suffering in millions. People are not living well. The standard of living has fallen. Twenty four states cannot pay salaries. They are begging workers to be patient. Yet, some people contributed N21 b. This amount can pay the salaries of workers in many states.

    “They should have human face. We are preparing for elections. We are nit concerned about the existence of Nigerians. Political parties are dancing on the grave of poor Nigerians.”

    For elder statesman Alhaji Lateef Jakande, the PDP’s penchant for monetisation of the electioneering is condemnable. The former Lagos State governor said the move to financially intimidate the oppositio is a bad omen for democracy. He said, if it is established that the money was not stolen from the public treasury, there is no cause for alarm. However, the former Works Minister said, if the source of the money is not clean, it is to the discredit of the government which is benefiting from questionable sources of money. “It is a dangerous sign for the future to monetise our politics to that extent. It is very bad,” he added. Jakande advised the opposition to avoid scandal during the electioneering. His words: “My advice is that other political parties should not emulate the PDP. They should do better. The masses are the most important people during elections. My appeal to the APC and other political parries is to mobilise the masses in a rational way without financial inducement.”

    APC chieftain Chief Rafiu Jafojo, who was Jakande’s deputy in the Second Republic, said it its wrong for the PDP to intimidate other parties with its capacity to raise huge money. He said the next election is not about “naira or dollar war,” but about issues. Predicting that the power of money will crumble during the election, he said Nigerians are now wiser.  Jafojo queried: “What do they need the money for? Where is the money coming for? Who are the donors? Nigerians need the full list of donors.”

    Afenifere Deputy Leader Senator Ayo Fasanmi frowned at the fund-raising, saying that the N21 b is scandalous. He queried: “N21 billion for what? Do you want to purchase the votes of the people? The naira is in shambles. What is the money for?.” Fasanmi chided the PDP for wasting public funds on trivialities, adding that no amount of financial power can stop power shift in next elections. The elder statesman added:  “It is scandalous in a nation that cannot pay monthly salaries to workers. They have monetised the process. It is not good for democracy. It is undesirable. People are taking notes. N21 billion for one person in a country where people can’t have three square meals? They are over-stretching people’s patience. “In 2015, their money cannot prevent progressives from taking power. Buhari and Osinbajo will rule this country. The next election is about the struggle for redemption, not about raining billions. No amount of billions can save the PDP from electoral catastrophe. People are ready. It will be one man, one vote.

    CSNAC asked Muazu to release the full list of donors. Its Programme Manager, Adeola Abiodun, said the group made the request under the Freedom of Information Act. He said the reports on the sources of the money donated and the identities of the contributors are vague. “Section 93 of the Electoral Act makes anonymous donation untenable,” he pointed out.  The rights activist said the concealment of the important information undermines the legality and legitimacy of the electoral and democratic process. “It is necessary to provide the information to curtail the risk of corruption during the campaign,” he added.

  • Oyo community launches N250m development fund

    A hose indigenous to Oke-Ogun of Oyo State, in their thousands stormed Okeho for the 5th Oke-Ogun National Day celebration to launch N250 million development fund and to canvass for state creation.

    Oke-Ogun community is made up of 10 local government areas. They include Irepo, Olorunsogo, Oorelope, Saki East, Saki West, Atisbo, Itesiwaju, Iwajowa, Kajola and Iseyin.

    The Oke-Ogun National Day was organised by Oke-Ogun Development Council (ODC).

    Among the many dignitaries that attended the programme was former Minister of Agriculture,  Chief Bamidele Dada, ýwho said the zone has been marginalised by past administrations in the state, stressing that they will not give up until their demands are met.

    Dadaý, who chaired the event, urged the people not to give up their demand on state creation and the establishment of a university in the area.

    “Some people are mocking us and marginalising us, saying that we are nothing. We are viable economically, socially and culturally. We are endowed with arable lands, cash crops, cultural heritage and man power.

    “Our population is about 1.5 million and it’s more than many states in the country. Creation of Oke-Ogun State is long overdue. I know our hope will be realised only if we do not give up in the pursuit of this course,” he said.

    Also in his remarks, the Registrar of the Joint Admissions and Matriculation Board (JAMB), Prof. Dibu Ojerindeý noted that to actualise their dreamed state, all hands much be on deck and there must not be an adversary, as have been noticed in some areas.

    The Asiwaju of Oke-Ogun land said they must be committed in the fight for the creation of their own state, which he said will ensure the development of their zone.

    Commenting on the proposed Oke-Ogun University, he said: “We need over N250 million as a deposit to enable us to start a university. This can only be achieved if we come together and contribute towards its kick off. We must work together and speak as one entity. That is the only way government and the National Assembly can consider our request. We are happy with the fully-fledged polytechnic given to us by the present administration, but we want it to be funded and not just abandoned.”

    Similarly, the Managing Director of the Nigeria Nationalý Petroleum Corporation (NNPC), Dr Seyi Ige who delivered a keynote address, urged the people to be united in their demand. He spoke on “Oke-Ogun: Journey towards Relevance in the 21st Century.”

    According toý him, Oke-Ogun region is the most populous in Oyo State and blessed with arable land, even as he said the area is the food basket with a prolific capacity to produce diverse agricultural products.

    Ige listed some key factors which he said must be addressed holistically in order to achieve the region’s aims and objectives. They are social order, peace and security, strategic economic emancipation and education.

    “Any aspiration of Oke-Ogun that is predicated on a divided people is dead on arrival. Divisions are manmade and can be overcome. Where there is division, investment does not flow.

    “We must break the walls of division if we want to overcome poverty and ensure a credible and sustainable region. We must figure out how best to leverage every possible tool at our disposal to transform our agriculture into wealth. Once our economy begins to boom at a global level, the world will be forced to reckon with us.

    “While university education is vital, the success of Oke-Ogun University will be as good as the intakes into the university. We must address primary and secondary education. Focus on critical subjects such as Mathematics, Science and English.

    “If we create social order, transform our economy a step at a time anchored on world-class scale and reach, if we establish our region to attain a world scale and reach, if we establish our region to attain above national average educational standard, there is no doubt that the aspirations of several decades for a sustainable, economically viable and political relevant Oke-Ogun will be achieved,” Ige said.

    Earlier in his opening address, the President of ODC, Prof. Jide Adeniyi, who was represented by Chief Oladoja Oladele, said there was need to actualise the Oke-Ogun agenda if the region wants to attain economic and social development.

    Among those honoured with award at the event were Deputy Governor of Oyo State, Otunba Moses Alkae Adeyemo, Okere of Saki, Oba Abimbola Oyedokun, ýthe late Sabiganna of Iganna who was honoured posthumously, Oba Atoyebi Folawuyo Alokolodo, Hon Sheik Mudachir Sekoni and all the Caretaker Chairmen of the 10 local government areas in Oke-Ogun zone.

    Other dignitaries present at the event included former Managing Director of First Bank, Mr Moyo Ajekigbe, Chief Judge of Oyo State, Justice M.O Abimbola, Commissioner for Land and Housing, Mr Isaac Omodewu, Commissioner for Education, Prof. Olaniyonu and Commissioner for Special Duties, Mr Bonuola Azeez.

     

  • Investor Protection Fund to compensate fraud victims

    The Investor Protection Fund (IPF) of the Nigerian Stock Exchange (NSE) may compensate investors who are victims of fraudulent activities by unscrupulous stockbrokers.

    The NSE on Monday said it has referred unresolved complaints against an expelled stockbroking firm to the IPF. The IPF rules allow the NSE to submit complaints made to it to the IPF while investors can also directly petition the IPF.

    The Nation had on Monday reported exclusively that the Exchange had revoked the licenses and expelled two stockbroking firms- Gosord Securities Limited and Lakesworth Investment & Securities Limited over fraud.

    While confirming the news report, the Exchange stated that the unresolved issues of settlement and restitution of investors who were victims of Gosord Securities has been referred to the IPF.

    “The unresolved complaints against Gosord which were either brought to the Exchange by complainants or referred to The Exchange by the Securities and Exchange Commission have been referred to the Investor Protection Fund,” the Exchange stated.

    The Nation had recently reported that IPF may soon begin payment of compensations to investors as the board of trustees of the scheme was finalizing operating groundwork to ensure smooth and continuous operations.

    An impeccable source in the know of the activities of the IPF had told The Nation that the board of IPF was rounding off operating structures and framework for the scheme and would roll out its maiden compensation soon to announce the commencement of effective operations.

    According to the source, after the approval of the IPF rules by the Securities and Exchange Commission (SEC), the board of trustees of IPF had gone back to the drawing board to ensure that it fashioned effective operating structure and framework that will sustain the scheme.

    SEC had in January, this year approved the rules for the NSE’s IPF. The rules empower the board of IPF to make payment of compensation based on the claim submitted to the NSE and verified by the NSE or claim submitted to the board of IPF and verified by it, according to relevant sections of the ISA.

    The IPF rules empower the board of IPF to have at anytime a written policy on the maximum compensation payable to an investor who has suffered a loss. The board can review this maximum compensation limit from time to time according to prevailing circumstances at the market.

    Compensation would be paid subject to conclusive decision of the board on the basis of evidence that the investor has a claim against a dealing member, duly applied for settlement of its claim from the dealing member; the dealing member was unable or likely to be unable to satisfy the claim within a reasonable period and the investor then, duly applied for compensation from the Fund.

    The board of IPF is also empowered to invest the funds with a view to grow the capital base of the IPF.

    Part XIV of the Investment and Securities Act 2007 requires the Exchange to establish and maintain an investors protection fund to compensate investors with genuine claims of pecuniary loss against dealing member firms resulting from insolvency, bankruptcy or negligence of a dealing member firm of a securities exchange or capital trade points; and defalcation committed by a dealing member firm or any of its directors, officers, employees or representatives in relation to securities, money or any property entrusted to, or received by the dealing member firm in its course of business as a capital market operator.

    The IPF rules indicates that an investor whose claim is within the maximum limit may be paid the full amount of the loss, after deduction of any amount or value of all monies or other benefits received or receivable by the investor from a source other than the Fund in reduction of the loss.

    Besides, where the board is satisfied that in principle compensation is payable but considers that immediate payment in full would not be prudent having regard to other applications for compensation, or to any uncertainty as to the amount of the investor’s overall net claim, the draft empowers the board to pay an appropriate lesser sum in final settlement or to make a payment on account.

    The board may also determine to make a payment on account or to pay a lesser sum where the investor has any prospect of recovery in respect of the claim from any third party or through an application for compensation to any other person or authority.

    Compensation would be paid subject to conclusive decision of the board on the basis of evidence that the investor has a claim against a dealing member, duly applied for settlement of its claim from the dealing member; the dealing member was unable or likely to be unable to satisfy the claim within a reasonable period and the investor then, duly applied for compensation from the Fund.

    According to the rules, an application for compensation may be rejected if it is not promptly made and in any event within the periods stipulated in the ISA or where the investor is responsible for, or has directly or indirectly profited from, events relating to the dealing member firm’s business which gave rise to the firm’s financial difficulties.

    In the event of multiple claims, person who claims in a double capacity for himself and as the personal representative of a deceased investor will be treated in respect of the representative claim as if he were the deceased investor without prejudice to his own personal claim.

    Also, where a person claims for himself and as a trustee, he will be treated in respect of the latter claim as a different person.

    But where two or more persons in partnership have a joint beneficial claim, the claim will be treated as the claim of the partnership; otherwise each of them would be taken to have equal shares in the claim unless the contrary is proved to the satisfaction of the board.

    According to the rules, where an agent has a claim for one or more principals, the principal or principals are to be treated as having the claim, to the exclusion of the agent.

    According to the Exchange, the two expelled stockbroking firms, which were indicted for “unauthorized sale of clients’ shares”, failed to restitute the shareholders as directed by the disciplinary committee, which investigated the two firms.

    Head, Legal and Regulation Division, Ms. Tinuade Awe explained that of all the penalties, expulsion and revocation of dealing license is usually viewed as a last resort where a dealing member fails to engage in conduct to rectify wrong doing or comply with the directives of the National Council of the Exchange.

    “NSE is committed to restoring investor confidence in the Nigerian capital market. NSE will not hesitate to bring the full weight of its regulatory powers to bear on any dealing member that commits regulatory infractions and does not take steps to address them as appropriate even after being given sufficient time to do so,” Awe said.

    NSE had received several complaints of unauthorized sale of clients’ shares against Gosord. The National Council among others found that Gosord breached Article 59(v) of the Rules and Regulations Governing Dealing Members of NSE by engaging in unauthorized sales of clients’ shares; Gosord failed to buy back clients’ shares and resolve all complaints against it, as directed by the Disciplinary Committee and that Gosord’s conduct was dishonorable, disgraceful, unprofessional and detrimental to the interests of NSE by destroying investors’ confidence in the market and eroding the goal of NSE to operate a fair, transparent and orderly market.

    NSE also received one complaint of unauthorised sales of a client’s shares against Lakesworth. The National Council found that Lakesworth breached Article 59(v) of the Rules and Regulations Governing Dealing Members of The Exchange by engaging in unauthorized sales of a client’s shares while the firm also failed to buy back the client’s shares and resolve all complaints against it, as directed by the Disciplinary Committee.

    “The general public should not deal with the expelled firms in relation to any transactions on NSE. Investors who hold stockbroking accounts in Gosord or Lakesworth should transfer their stocks to any active licensed stockbroking firm that is a Dealing Member of NSE,” the Exchange stated.

    The Exchange urged investors or clients of either of the two expelled firms who may have deposited funds or securities such as share certificates with Gosord or Lakesworth to go and collect such assets directly from the expelled firm.

     

     

     

     

  • Cabotage fund hits N36b as NISA clears NIMASA

    Cabotage fund hits N36b as NISA clears NIMASA

    The Nigerian Ship Owners Association (NISA) has absolved the Nigerian Maritime Administration and Safety Agency (NIMASA) of being responsible for inability to access to Cabotage Fund by ship owners. The fund as at end of September stood at N36 billion.

    The President of NISA, Capt. Dada Labinjo told The Nation that the fund is currently N36 billion, but  noted that contrary to reports that NIMASA has been responsible for not allowing ship owners to access the fund as provided in the Cabotage Act, the agency is only a custodian of the fund while directive for its disbursement as loans to ship owners resides with the Federal Government.

    There have been reports about ship owners that suffer dearth of funds to maintain their vessels but were unable to access the fund, which they are statutorily entitled to .

    The Cabotage law, which is the Coastal and Inland Shipping Act, was passed into law in 2003 and among the provisions in the Act is the Cabotage Vessel Financing Fund (CVFF), which is pooled from the two per cent deductions from all contracts awarded under the Cabotage regime. The essence of the Fund is to empower indigenous ship owners to be active in maritime sector by acquiring ships that have adequate tonnage to participate in coastal and inland trade and perhaps, with time, take over from foreigners currently dominate the coastal and deep sea shipping activities.

    However, 11 years after the law was passed the impact of the CVFF has not been felt either in terms of loans to ship owners or by increasing dominance of the coastal shipping by indigenous ship owners, stakeholders said.

    Also Labinjo debunked reports that 80 per cent of ships owned by indigenous players are substandard. He said: “I will never agree with that position. I don’t agree with it not because I’m saying that our ships are perfect. Substandard is not a good comment. Every ship is owned by the nation where it is registered. Every ship is owned by the flag it bears, which is the country. That is why they say flag your ship.

    “Yes I’m the beneficial owner of the ship but it is the country that owns it because in times of crisis, the country will convert it like it happened during the Falkland crisis, when Queen Elizabeth 2 (ship) was converted for military use. So that is why countries like to have their own  ships in their own register because in times of emergency and crisis you cannot leave Nigerian ships to call Cameroonian ships to come and help you, they will not answer you. But you can commandeer that of Captain Labinjo or that of any Nigerian.

    “That is the reason the country owns the ships. I’m not saying our ships are the best in the world. I’ve been to India, Indonesia and Singapore, among other countries and I have seen the way things are there. What I know is that we have a bad habit in Nigeria and that is maintenance issue. No doubt about it, but I’m assuring you and everybody that as the President of NISA, we will overcome that challenge.

  • Ebola: AU seeks fund from African billionaires

    Ebola: AU seeks fund from African billionaires

    The African Union (AU) has said it is seeking funding from some of the continent’s richest people, including Nigeria’s Aliko Dangote, to pay volunteer doctors and nurses fighting the Ebola Virus Disease (EVD) in West Africa.

    The continental bloc is seeking to raise $35 million in the first round and, eventually, as much as $100 million for the Business-to-Rescue Fund, said George Sibotshiwe, Executive Director, African Democratic Institution, which is coordinating a November 8 meeting in the Ethiopian capital, Addis Ababa, to encourage business people to donate.

    “A campaign to ask for contributions from “citizens” will follow,” he said.

    Dangote, the chairman of Dangote Group in Nigeria, and Patrice Motsepe, chairman of Johannesburg-based African Rainbow Minerals Ltd. (ARI) are expected to attend the meeting, the  AU said in an e-mail statement.

    According to AU, Strive  Masiyiwa, chairman of Econet Wireless International, Safaricom Ltd. of Kenya Chief Executive Officer (CEO) Bob Collymore, South Africa’s MTN Group CEO Sifiso Dabengwa and CEO of Standard Bank Group Ltd. Sim Tshabalala also plan to join.

    Among wealthy businessmen already committing money to curb Ebola are Microsoft co-founders Paul Allen and Bill Gates and Facebook Inc. CEO Mark Zuckerberg.

    The world’s largest Ebola outbreak has killed almost 5,000 people in Liberia, Guinea and Sierra Leone since December. AU member states have pledged to send at least 2,000 health workers to the three West African nations.

    The World Bank estimated that about 5,000 international medical, training and support personnel are needed in the coming months to respond to the outbreak, including as many as 1,000 foreign-health workers to treat patients. More than 200 local doctors and nurses have died since December from the virus, leaving the already-crippled health systems even weaker.