Guinness Records N1.7 Billion Profit in Q1

Guinness Nigeria Plc, one of the leading breweries, has announced a profit after tax (PAT) of N1.743 billion for the first quarter ended September 30, 2013, showing a marginal decline of 3.5 per cent compared with N1.807 billion recorded in the corresponding period of 2012. Considering the performance of the company for the full year ended June 30, 2013, where Guinness recorded a decline of 17 per cent in PAT, the Q1 results have been seen as an improvement.
Guinness reported revenue of N22.409 billion in Q1 of 2013, showing a decline
of 5.4 per cent from the N23.692 billion in Q1 of 2012. Profit before tax fell by 20 per cent from N2.657 billion in 2012 to N1.868 billion in 2013. However, a 85 per cent reduction in tax payment, from N850 million to N125 million, improved the bottom- line of the company. As a result, PAT recorded a marginal fall of 3.5 per cent from N1.807 billion to N1.743 billion. A further analysis of the results, showed that the company also reduced its financing cost marginally by 3.5 per cent from N777 million to N747 million in 2013.
Realising that the company’s performance for 2103 was affected by high interest charges, the Managing Director of the Guinness Nigeria Plc, Mr. Seni Adetu, had promised that the company would work to reduce its interest expenses. He said: “Our growth was bolstered by the strength of our brands, our successful innovation launches and our
continued investment in capacity and improving route to market strategy. Having said this, our profitability and margins were being impacted by higher finance charges arising from the current interest rate environment. In addition to this, the market remained challenging with continued decline in beer volumes. “We are also positive that our improving interest expense management will be reflected in a more efficient net interest margin in the coming period. Guinness Nigeria is a business with strong fundamentals and growth strategy and we will continue to focus on our route to market and delivering great consumer experiences to strengthen our position going forward,” he said.

GTBank Records N82bn Profit in 9 Months

Guaranty Trust Bank Plc (GTBank) has announced a profit before tax of N82.36 billion for the nine months ended September 30, 2013, indicating a 7.12 per cent increase over N76.89 billion recorded in the corresponding period of 2012.

The bank’s profit after tax stood at N69.24 billion as against the N63.734 billion earned in the comparable period of 2012.

The results released by the Nigerian Stock Exchange (NSE) yesterday showed that the bank’s gross earning rose to N181.96 billion from N166.48 billion the previous year.

A further analysis of the results showed that the bank’s total assets stood at N1.875 trillion in the review period, compared to the N1.73 trillion it stood as at December 2012. Also, its customers’ deposit increased to N1.271 trillion in the period under review, compared to N1.148 trillion as at the end of December 2012.

Also, GTBank’s earnings per share increased to N2.44, from N2.25.
The Managing Director/Chief Executive Officer, GTBank, Mr. Segun Agbaje had attributed the bank’s success to the continued support of its customers, hard work and strong corporate governance standards.

Agbaje stressed that a major objective for the bank this year was to add value to its stakeholders through excellent customer service delivery, innovative products and value adding services.

"It is the bank’s belief that success on these fronts would enable it deepen its share of market across all sectors and improve profitability, despite today’s extremely challenging business environment, "he had said.

GTBank recently acquired 70 per cent stakes in Fina Bank of Kenya to enable it extend its reach to East Africa.

The bank’s recent service introduction were the GTBank social banking platform - a service offering, which allows people on social networks such as Facebook have banking relationships as well as perform basic banking transactions every day.

Access Bank Declares N20.7 Billion Half-year Profit

Access Bank office

Access Bank Plc Wednesday announced a profit after tax of N20.7 billion for the first half of the year ended June, 2013.

The amount however represented a decline by 22.5 per cent compared to the N26.7 billion recorded in the comparable period of 2012.

The unaudited financial report obtained from the Nigerian Stock Exchange (NSE) also showed that the bank’s profit before tax also fell by 13.9 per cent to N26 billion as at June 2013, compared to the N30.2 billion it stood in the comparable period of 2012.

Its gross earnings also dipped by 5.3 per cent to N104.1 billion, as against the N109.9 billion it realised as at June 2012.

Access Bank’s interest income also declined by 13.9 per cent to N72.6 billion as at the period under review, from N84.3 billion as at June 2012.

While Access Bank’s total assets stood at N1.719 trillion as at the period under review, its total deposit also declined marginally to N1.29 trillion.
However, it declared a dividend of 25 kobo per share to its ordinary shareholders.

Commenting on the bank’s financial performance, Banking Analyst at Renaissance Capital, Mr. Adesoji Solanke, said the “year-on-year earnings weakness was expected and largely driven by the lower net interest income (NII) on higher funding costs and asset yield pressure; and higher costs.”

Access Bank share price on the NSE fell by 10 kobo to close at N10.90 per share yesterday, from N11 per share on Tuesday.

World Bank, WAIFEM Move to Ensure Nigeria’s Debt is at Sustainable level

Director General, WAIFEM, Professor. Akpan Ekpo

The World Bank and West African Institute for Financial and Economic Management (WAIFEM) have announced collaboration between them, which may result in measures that will help keep Nigeria’s local and foreign debt within sustainable levels.

The Debt Management Office (DMO) statistics reveal that the country currently owes local and international creditors a total of $50.91bn (about N7.93tn). As at June 2013, the nation’s external debt stood at $6.92bn (about N1.08tn), while the domestic debt component stood at N6.85tn ($43.99bn).

The move, according to the two international bodies, is to ensure that the nation’s debt burden does not rise to a level where it begins to impede the growth and development of the economy.
Nigeria recorded a Government Debt-to-GDP ratio of 18.30 percent in 2012 and economists consider it ideal for governments to keep their debt-to-GDP ratios below 60 per cent.

Director General, WAIFEM, Professor. Akpan Ekpo said recent evaluation of debt management practice in countries in the West African region and some sub-national entities using the Debt Management Performance Assessment (DeMPA) had indicated divergent results in meeting the criteria for sound public debt management practice in many functional areas.

Speaking during the opening ceremony of a one-week WAIFEM, World Bank regional training on DeMPA tool for public auditors, Ekpo recalled that between 2007 and July 2013, both institutions jointly conducted 15 national, sub national DeMPA and reform plan missions in WAIFEM member countries, where Debit Performance Indicators (DPIs) of the 15 countries revealed that public debt management had the worst result.

“It will give Nigeria’s public auditors the opportunity to understand the World Bank debt assessment performance tool to advise our leaders to ensure that our debts are sustainable. This is the first time we are bringing more public auditors to understand debt management. This course has been offered before in other countries where Nigerians attend, and now it is here in Lagos where the World Bank funded more auditors than debt managers,” he said.

Ekpo stated that the DeMPA tool developed by the World Bank had been designed to be user-friendly, which undertakes an assessment of the strengths and weaknesses in government debt management practices.

According to him, the training programme was meant to develop the competencies of the participants in the application of the DeMPA tool as a catalyst to strengthen national and sub-national debt management.

He said at the end of the course, the attendees would have acquired a thorough understanding of the scope and methodology of the DeMPA tool including the inter-linkages between the DPIs.

“The participants will also be trained in the use of evidence-based information for assessing debt management and the associated scoring techniques,” he added.

He said considering the DeMPA missions in WAIFEM constituent countries, coupled with the growing demand by countries to build capacity of auditors in public debt management, the institute found it necessary to give more slots at this course to auditors in order to address the identified capacity gap.

He therefore urged all participants to take advantage of this opportunity to build their capacity by participating actively in the proceedings of the course in order to internalise the DeMPA methodology and hands on exercises.

Earlier, Debt Specialist, World Bank, Mrs. Lilia Razlog, said the partnership between the World Bank and WAIFEM was to further disseminate the knowledge of modern modalities of debt management practices and performances at the federal government level maintaining that this knowledge would improve the audit performances in areas of debt management.

“I understand many of you are coming from the audit entities, so we do hope this is going to help you in your activities which you are envisaging while auditing the investment activities,” she added.

She pointed out that the DeMPA tool, which is designed for accessing the debt management practices and institutions, was developed by the World Bank in consultation with international institutions in order to give the countries the opportunity to identify existing gaps in the area of debt management and promote necessary reforms.

She said the methodology so far has been deployed in more than 60 developing and developed countries in the world.
She pointed out that as a result of these activities, the DeMPA evaluation was followed by a series of reforms at the institutional and regulatory level in these countries.

Samsung Introduces Bottom-Mounted Freezer Refrigerator

Samsung Electronics West Africa, a global player in digital home appliances has announced the introduction of its new Bottom Mounted Freezer refrigerator. The new refrigerator, which automatically adjusts cooling speed in response to temperature fluctuations for more energy efficiency and to strengthen durability, affirms Samsung’s dedication to providing appliance innovations that deliver unparalleled performance, greater flexibility, superior organisation and more convenience for today’s busy families. With the new Bottom Mounted Freezer, Samsung brings powerful technology innovations into the home, empowering families to get more out of their appliances and enabling households to run more efficiently and harmoniously. The new refrigerator features Samsung’s superior Digital Inverter Compressor that strengthens durability and improves energy efficiency and cooling performance by automatically adjusting across five speeds of RPM in response to cooling demands. Whether due to frequent door openings, a hot plate of food or outside temperature changes, the compressor reacts to either rapidly provide cold air or slow down to reduce unnecessary energy consumption. Samsung’s compressor operates only in case of need, producing less noise. Announcing the new refrigerator, Product Manager, Refrigerators, Samsung Electronics West Africa, Manmohan Chandroth, said: “In many ways, the refrigerator is at the heart of the kitchen, experiencing a lot of physical demands and activity throughout the day,” He said “In addition to small temperature changes that come from frequent door openings, we also thought about situations in which a home’s electricity supply may be unstable with spikes and power cuts. This will damage a refrigerator over time. And if it breaks, it causes a huge amount of stress and takes significant time, money and effort to fix or replace." At Samsung, we pride ourselves on always thinking ahead to what our consumers will need, and our new Bottom Mounted Freezer Refrigerator thoughtfully delivers on providing real solutions with unprecedented technology, durability and design, he added. Samsung’s new Bottom Mounted Freezer Refrigerator offers several other category-first features that highlight convenience.

Glo Unveils New Product for Youths at 5k per second

Globacom has unveiled a new product called 'Bounce', a specially customised to deliver value to the youths and the young-at-heart.
It is targeted at meeting the needs and expectations of millions of youths on the Globacom's network. Designed as an exclusive proposition to youths all over the country, Glo Bounce comes as a full package to excite youths and addresses their unique interests as it offers multiple benefits such as special pricing, freebies and promotions, all in one package. Speaking at the launch of the product in Lagos, recently, General Manager, Consumer Marketing at Globacom, Mr. Ashutosh Tiwary, said the new product would offer many benefits to youth subscribers on the Glo network. Such benefits according to him, included special call rates on campuses, free data, free ring back tunes, zero Facebook and unlimited free SMS. He said the product was developed based on extensive research which zeroed down on the “passion points” of the youth of Nigeria. Their basic needs and their desired benefits were taken into consideration before coming up with the product which has everything for everyone. Tiwary explained that customers on Bounce could call other Bounce customers at a discounted rate of 5k/sec and send SMS at the low rate of N3 per SMS. Bounce customers also stand to enjoy the Campus Zone rate of 5k/sec to any Glo line and a flat rate of 10k/sec to all other networks. Other benefits include free data of 30MB on every recharge of N200 and above, one free SMS for every SMS sent by the subscriber, free browsing on Facebook, free ring back tunes for one month and free night calls from 12 am to 5 am for every subscriber who uses a minimum of N30 before midnight. “Glo Bounce is a special package with unrivalled benefits that takes into consideration the lifestyle needs of the youths and ensures that they get the best from the Glo network. Glo Bounce provides the youths with unlimited opportunities and the right tools to achieve their dreams”, he said. “As a result of the youth target for the product, the campus zone rate of N5k/sec will be available in all tertiary institutions across the country. This is a big opportunity for youths everywhere to interact with their peers on the Glo network and enjoy these unlimited benefits”, Tiwary said. He urged Nigerian youths to migrate to Bounce in order to enjoy the superior benefits it offers. He stated the product was targeted at all existing and new prepaid customers on the Glo network, especially those who are youthful or young-at- heart. “With Bounce, our target is to create the largest youth community in Nigeria. It is a great platform for the youth to express themselves and reach the heights of their aspiration. With Campus zone, the students will now want to ‘live’ on the campus because they are able to connect with anybody, anywhere on Glo at 5k/sec which is the lowest call rate in Nigeria”, he said. “We foresee that Glo Bounce will have a transformational impact on the youth of Nigeria and on the way they use their phones and other services and features for far reaching impact”, he added. To register for the Glo Bounce tariff, subscribers are required to dial *170*4#, then *170*9# to opt in for the Campus Zone rate.

Dangote Cement Mounts Campaign against Building Collapse

Aliko Dangote

The disturbing incident of building collapse can be checked if government recognises and trains artisans (block moulders), regulate their activities and put in place a technical unit that will be monitoring block manufacture and usage in the building industry. Regional Manager, Sales and Marketing of Dangote Cement Plc, Mr. Johnson Olaniyi, who stated this in an interview THISDAY shortly after addressing Block Manufacturers Forum in Calabar, Cross River state, said the carefree manner in which blocks are produced in the country and the sharp practices in the real sector were to blame for the recurring incidence of building collapse. He said factors responsible for houses collapsing were multidimensional as it was discovered that engineers were not doing their jobs; while government was yet to institutionalise guidelines that those building in swampy or marshy areas must observe, as some develop their property without expert advice and technical supervision. Besides, Olaniyi accused estate developers, especially those building on contract for government or real estate firms, of being too eager to build 500 to 1,000 houses within a short time without carrying out soil analysis; not using genuine materials; building on faulty foundation while beams and pillars may not be strong enough to withstand the vagaries of weather. According to him, property developers in the country would become careful once other state governments take a cue from the government of Lagos State, which now confiscates both the house and piece of land of any building that collapses; leaving the owner with nothing. He also blamed those who want a higher yield (number of blocks per bag) for contributing to building collapse because they do insist on the use of more sand which the quantity of cement in
the bag cannot match, and advised that the right quantity of sand per bag be used in preparing blocks. “The Dangote Cement Group wants to put an end to the unfortunate incident of buildings collapsing in our nation; hence we are mounting this sensitisation campaign across the states of the federation. We are doing this in collaboration with artisans, property developers and cement dealers. We are going around the country. “Dangote Cement wants these stakeholders to know what is right and doing what is right. Building collapse has become almost a daily occurrence in Nigeria. This is embarrassing to a country that boasts of technical know-how in almost every field. The lives that are lost and property destroyed are always monumental”, he said. Olaniyi revealed that the sensitisation exercise has
so far been carried out in all the states in the South-south, South-east, North-east, North-west, North-central, and has only the South-west left; stressing that the geo-political zone left would soon take its turn as his company was eager to see building collapse become history. At the forum, the regional manager told the stakeholders how to test to get good quality blocks, the number of days blocks should be allowed to become strong before being used, noting that blocks for sucking take seven days and those for building 28 days, adding that if blocks are hurriedly used after moulding, such a house risks collapse especially if the weight of the roof is heavier than that of the walls.

Farming without Rain in Katsina

Farm land In Katsina state, there is no seasonal punctuation of planting. This is due to the Jibia Dam project, an irrigation social investment with reservoir capacity of 140.0 mcm, connected to an area of cultivation of 3,500 hectares, reports Zacheaus Somorin Rain is crucial to agriculture because crops require water to be nurtured and nourished and to grow to maturity. That is the reason most crops, in the Southern part of Nigeria, are planted during the rainy season, that is, between October and May. But there are societies where virtually all crops are planted all-year round regardless of whether it is rainy or dry season. Katsina State perfectly fits into this category of societies. No Interruption “There is no seasonal interruption in the planting of crops here”, one of the farmers in Jibia, who simply identified himself as Umaru, boasted. Indeed, the uninterrupted farming in Jibia and environs has been made possible by Jibia Dam, an irrigation project with a reservoir capacity of 140.0mcm and area of cultivation of 3,500 hectares. Upward Trend As at 2007 when Governor Ibrahim Shehu Shema took the mantle of leadership in Katsina State, farm yield in the state, as a result of the intervention of the irrigation project, was a mere 100 hectares. Shema not only developed the dam to increase the yield by several percentages, and by 2011 when he was rounding off his term in office, about 12,000 hectares of land had been committed to irrigation state-wide. Principal crops grown in the Jibia sector include beans, groundnut, maize, pepper, wheat, onion, lettuce, cabbage, sweet potato, Irish potato, pumpkin, and sweat melon. Projects Galore THISDAY gathered that there are at least nine other irrigation projects scattered across Katsina supporting farming system with human- controlled moisture environment regimes, leading to the growing of almost any type of crop depending on market demand throughout the year. “The attention Governor Shehu Shema has given to irrigation underscores his determination to take Katsina to the level whereby the state can contribute significantly to the food needs of the nation”, Abdulsalam, a guava farmer in the area of the state served by another irrigation project located in Zobe, said. The reservoir capacity of the dam is 177.0mcm and area of cultivation of 5,000 hectares. Investors’ Search Following the expansion of the irrigation farming system in the state, the Shema government is looking for investors to partner in the establishment of commercial scale plantation estates for food produce, as well as the allied industries for packaging, value addition processing and international marketing of the products. The air cargo facilities of Katsina International Airport offer much credence to the proposal. Obviously, the Shema administration’s agricultural initiatives are geared towards addressing food security and job creation in the agro-allied sector. Major cash crops produced in the state are millet, guinea corn, groundnut (cowpea), cotton, maize, beans, rice, and wheat. Katsina is Nigeria’s largest producer of cotton. Available Fertiliser Procurement of fertiliser for farmers is another area Shema is making the difference. As at August 2010, barely three years into the governor’s tenure, 61,418 metric tonnes of fertiliser were supplied to rain- fed and rainy season farmers in the state at a cost of N5.2 billion, and a subsidy support of N3.2 billion. In 2013, the figures would have gone up significantly as the fertiliser procurement exercise is a continuous one. The Shema administration also established four fertiliser blending plants at Batsari, Safana, Mai’dua, and Bakori to make fertiliser available in different parts of the state. Friendly Farming And to make farming expertise services readily available to farmers, the Katsina government rehabilitated the 15 farm centres it met on ground and constructed two others at Katsina and Charanchi, while area offices were established in Daura and Funtua. Clearing of the bush and cultivation of the land are two areas where farmers encounter grave difficulties in operating large scale agricultural projects. The Shema administration is easing farmers’ challenges in the two areas. “No fewer than 400 tractors and other implements have been distributed across the state to help farmers overcome the challenges of bush clearing and land cultivation,” a government official said. Focus on Livestock Due to its long history and tradition of rearing livestock dating back to antiquity, Katsina state is one of the nation’s leading suppliers of live animals and animal-related products. Under Shema, the state excels in ruminant animal production with capital asset of over one million heads of cattle, three million goats and two million sheep. Allied to the livestock is the production and conservation of fodder crops which constitute a significant component and contribute to the aggregate commodities and agricultural productivity of Katsina state. Fodder production and conservation is also a lucrative income-generating vocation for the state’s inhabitants and indigenes. Katsina has an ambitious focus, to produce enough crops for local consumption and thereafter for export. With the way things are going on in the state, that is not a tall dream.

Kuku: Oil Theft, Threat to Nigeria's Economic Growth

Special Adviser to the President on Niger Delta, Hon. Kingsley Kuku

The Special Adviser to the President on Niger Delta, Hon. Kingsley Kuku, has raised the alarm that the level of oil theft in the Niger Delta painted a gloomy picture, lamenting that the nation was on the way to ‘economic perdition’ if the scourge is not frontally tackled through collaborative effort.

He stated that besides the heydays of militant agitations in the Niger Delta, when oil production nosedived to about 700,00 barrels per day, never in the history of Nigeria did it suffer the kind of loss posed by the current oil theft.

Kuku, who spoke in Abuja Tuesday, while playing host to the national executive of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), noted that stealing of about 400,000 barrels of crude per day was an economic crime against Nigeria and had reached an alarming proportion for full military might and the collaboration of all stakeholders.

While applauding the strides of the Navy and the Joint Task Force (JTF) in combating the scourge, he described the magnitude of the current oil theft in the Niger Delta as “oil “blood oil crisis” only matched by the notorious Sierra Leonean “Blood Diamond.”

He noted that at the rate the perpetrators were going, the nation could get to a point where the government wwould not be unable to fund any activity.

“If we get to a point of between 800,000 and one million barrels per day, it will ground the economy. What they are stealing is higher than Ghana’s total oil production,” he said, adding that two-third of global economies were not having anything close to what is being stolen to keep their countries going.

He pointed out that unlike a  force majeure where there was a shut-in of oil which is later recovered, oil theft is an outright loss to criminal elements and their collaborators.
Kuku, who solicited the collaboration of PENGASSAN, other oil workers and stakeholders to stem the tide, reiterated his call for the multinational oil companies in the region to review their pipelines protection contracts.

While advocating that such review should be done in a very transparent manner to enthrone a credible procurement process, Kuku said the most potent way of checking pipelines vandalism and oil theft was to make Niger Delta indigenes actively involved in securing oil infrastructure as well as part owners of oil of oil resources.

Kuku, who is also the Chairman of the Presidential Amnesty Programme (PAP) also called for an effective collaboration between oil companies and states in the Niger Delta to check oil theft, arguing that oil theft was too sophisticated and expensive for an average Niger Deltan to prosecute.

He traced oil theft to the doorsteps of rich oil cartels and very wealthy individuals from within Nigeria and outside, who have the wherewithal to bear the attendant high costs, including demurrage.

“Nigerians must see oil theft as a war against Nigeria, and those behind it must be treated as economic criminals,” he said.

Earlier, the Deputy National President of PENGASSAN, Adamu Emmanuel Umoru, noted that Nigeria would not have occupied its present position if not for its god-given oil and gas resources, adding that such should be protected.

He said as oil workers, they were as disturbed as any well-meaning Nigerian concerning the current oil theft.

Umoru said oil workers were apprehensive that the current oil theft was a threat to them, and called for a collaborative action in addressing the menace.

Oil theft, he said, was too sophisticated and beyond the capacity and competence of the workers, stating that his association had continued to seek and proffer ways of tackling the problem.

He expressed regret that the theft had already caused a negative impact on government revenue.

NEITI, PPPRA Trace 'Missing' N4.4bn Subsidy Money to CBN

CBN Building


The Nigeria Extractive Industries Transparency Initiative (NEITI) and Petroleum Products Pricing Regulatory Agency (PPPRA) have finally found the allegedly missing N4.423 billion petroleum subsidy money that was recovered as over-payment to 10 oil marketers.

Following the protracted dispute between the two organisations over the said fund, both agencies yesterday in a joint statement signed by their Executive Secretaries, Mrs. Zainab Ahmed for NEITI and Reginald Stanley for PPPRA, stated that the missing fund had been reconciled and traced to the Petroleum Support Fund (PSF) account domiciled with the Central Bank of Nigeria (CBN).

Both agencies had been at loggerheads over the funds, which findings from NEITI’s oil and gas audit report for the years 2009 to 2011 disclosed could not be accounted for by PPPRA.

The audit report had asked PPPRA to account for the money, which it recovered from the marketers as over payment but did not show evidence of remitting to the federation account, while PPPRA on the other hand denied knowledge of such fund and asked NEITI to among other things clarify information in its audit report before presenting to the public.

The statement confirming the new development, stated that the money was traced to the PSF within the CBN, stating that PPPRA had also agreed to subject itself to further discussions to address other outstanding issues in the 2009 to 2011 audit report.

“Following the sustained media engagement between PPPRA and NEITI, over the recently released 2009 to 2011 industry audit in the oil and gas sector, and the findings as they affect PPPRA, a joint meeting between the two agencies was held today, August 13, in Abuja, with the managements of the two agencies in attendance.

"The joint reconciliation meeting, after exhaustive and useful deliberations, resolved as follows; that the sum of N4.423 billion in dispute has been reconciled and traced to the PSF account domiciled with the CBN. That there is nothing outstanding against PPPRA on the said amount,” the statement read.

Stock Market Remains Bearish

Trading session in NSE The Nigerian stock market trended further downward yesterday as investors’ risk appetite remained weak. The Nigerian Stock Exchange (NSE) All-Share Index (ASI) declined by 0.59 per cent, from 38,038.79 to close at 37,813.43, while market capitalisation shed N72 billion to close at N11.975 trillion. Market analysts said the decline in share prices, which is for the fourth day running might continue for more days as equities market saw temporary funds flow to fixed income market were yields are appreciating due to the implementation of the 50 per cent cash reserve requirement (CRR) on public sector deposits. The ASI had declined by 1.00 per cent last week that the market opened for only three days. Analysts had said the spike in interbank rates would boost demand for fixed income instruments, a development that would attract funds from equities market. Despite assurance from regulators that the policy will not negatively affect banks on the long run, investors have been cautious in demanding for banking stocks at the market. Consequently, only three banking stocks appreciated while 10 depreciated. Zenith Bank led the banks on the gainers’ table with 17 kobo to close trading, trailed by Sterling Bank Plc with 10 kobo, while Unity Bank Plc managed a one kobo gain. On the losers’ table, Guaranty Trust Bank Plc led the banking stocks with 67 kobo, followed by United Bank for Africa Plc with N43 kobo. Union Bank of Nigeria Plc and FBN Holding Plc shed 37 kobo and 30 kobo respectively. Commenting on the market outlook for the week, analysts at Meristem Securities Limited said they expected market direction to be influenced by the perceived impact of increased CRR on banks' earnings going forward. “With spikes in interbank rates and the likely impact on yields on fixed income instruments, we may see temporary funds flow from equities market as investors move to benefit from high yields,” they said.

Economy: Dangote Makes Case for Private Sector Operators

‘Government Should Address Housing Supply Problems and not the Symptoms ‘

The nation’s housing sector is ruled by landlords. They compel prospective tenants to pay for the agency and legal documents they draw up. The President of Nigerian Institution of Estate Surveyors and Valuers, Mr. Emeka Eleh, believes tenants will have a better deal if the supply of homes increases. He presented what an ideal situation should be in this interview with Bennett Oghifo

Why must prospective tenants pay fees to agents and lawyers landlords contracted?
We must address the issue holistically. There is no need addressing the symptom without addressing the issue. The major issue is a supply issue. Supply in the sense that we know that every available data indicate that there is a deficit 16-20 million housing units, which means that demand by far outstrips supply. The aspect of the housing supply that is inadequate is the low and medium income; the aspect of this that is even more pronounced is the rental sector and this is very bad, because the number of openness in Nigeria remains very low and, therefore the bulk of the people trying to move forward within the middle and low income end up leasing.

They are the ones that fall within this sector and that is where the supply falls below par, because the bulk of the deficit is not in Victoria Island or Ikoyi or Maitama or in any other highbrow area of Nigeria. It is in the area where the low income earners live and the reasons are many. One is that there are many issues we talk about in housing such as high growth rate, no mortgages, poor infrastructure, among others. Beyond this, is also the issue of our own laws that do not make investment in that area attractive to the investors. Why is everybody rushing to Lekki and Victoria Island to build? Why are they not building bungalows in Agege and Iyana Ipaja for people to let? It is because of the foreclosure/repossession laws. You could be in Court for as long as forever.

It may not sound populist but those laws that favour the tenant more that the investor, who has put down his money to build for an income ends up being counter-productive. The average investor will not go there to build and therefore that under-supply remains very profound. So, when you come to Lagos State tenancy law, it is a good law for the government but you have to address the supply end. In England and in other developed countries where it works, the government has a portfolio of real estate they can give out. Even in England where they have council flats they still have to go out to get accommodation from private investors and give out to their people, who cannot operate in the market. The truth is that you cannot control the market in the way the government is trying to do. Same way you cannot legislate naira exchange rate without allowing the market to find its level; same way you cannot legislate about a product you don’t have control over. So, the government must address the main issues that affect housing delivery and they must address the issue of our laws, which are not investor-friendly for that category of investment.

How do you react to the fact that some property in highbrow areas are without tenants for long periods?
Let us look at areas where it is more prevalent. The economy is very bad. The default rate is high everywhere, but it is higher in the low income area than the high income area. That is the challenge.

Give us your idea of the solution to the problem in the short and long term.
I believe the solution to our housing problem may not even be short term. We have to deal with the problem: access to suitable and title land on which people can build. There are statistics on how badly we are doing in that area. Records show that for ease of titling of land all over the world, Nigeria is number 180 out of 183 countries. Only about three per cent of land in Nigeria is registered, the bulk of the land is just there for farming and residential accommodation. Land can play parallel roles if there is title. The person who owns it could have borrowed money from ABC Mortgage Bank, a mortgage bank could have refinanced that land for somebody somewhere. That is what deepens the financial system. But beyond the issue of titles, there is also the issue of mortgages, because you can’t solve the nation’s housing problem without a proper mortgage system. We don’t have mortgage systems in this country as presently constituted and the government must address the issue of mortgages. It is only when you have proper mortgage that you can borrow for long term. With mortgages, developers’ work will be a lot easier because so long there is mortgage backup for the scheme they are developing people can buy and people can take up the housing units. It is common to see companies abroad building many housing units because of the viable mortgage system. These homes are taken up at inception because interest is indicated at the very beginning. We appeal to the government to resolve the issue of mortgages.

My worry is with the startup date. Right now interest rate is above 20 per cent. Even if the mortgage scheme is able to takeoff over time with the supply of funds, but for me it has always been doubtful because we know the income level of Nigerians. How many Nigerians have an income of N2 million annually? The income level is very low. Assuming you earn N2 million annually and you want to borrow N5 million, at 20 per cent interest your interest is N1 million a year. Meanwhile your annual salary is N2 million. Is it possible? There is need for a quasi-government move to bring down the rate and it is important for the government to do so because we know that real estate is key to economic development. Right now, the entire real estate sector contributes only about 3 per cent of our GDP. In developed countries, that figure is about 50 to 55 per cent. In the developed world, housing development is a good measure of how the economy is performing. Very often in the US and UK, they publish the rate of sale of housings because they know that if people are investing in the area, then it means they have confidence in the system. There are many multiplier effect that arise from housing development. For instance, if you’re building a bungalow, over 70 people will be employed.

Imagine how many people will be employed if you are building another project like the 1004 flats in Victoria Island, Lagos. Imagine the boost it will give to the economy. Look at the other benefits of the whole property sector; what it will do to our employment level, economy, and the financial sector, which needs other economic measures. Whatever is invested in the sector even at a subsidised rate, will pay off over time and not necessarily about giving back to the government but other areas will be improved. There must be a form of intervention to bring down the rates. I’ll give an example. Government is there for the people and it is a continuum. Let them set up a bond of N500 billion or more just for housing and domicile it with the Federal Mortgage Bank of Nigeria (FMBN) and then give N10 million to every mortgage applicant and let this be domiciled through the retail banks and not just the primary mortgage institutions. It means all the banks in all parts of the country can give mortgage loans. It means that a housing developer can build a thousand units somewhere and go to a retail bank there and ask for mortgage for prospective buyers; states government can provide homes for their staff. The effect it will have in the economy will be enormous. The N500 billion will be revolving. Government can say the loan should be given to borrowers at 10 per cent and should be taken from FMBN at 8 per cent. That way, the banks take the risks because they will be the ones to take the money from FMBN and they will be the ones to identify those they are giving the loans. The risk to the government is minimal; the economic benefit will be enormous. The only loss to the government ‘is the difference between what they are giving to the bank and the market rate’.

Have you been able to communicate these views to government?
We have said it on several occasions and at different fora. We are not asking the government to subsidise housing forever. What we are saying is that housing must be in the preferred sector as part of the real sector because a boost in the housing sector is a big boost in the economy. It is same way the government has intervened in the aviation, and some other sector that it should intervene in the housing sector. It is not expected to build houses directly but to create a mortgage environment that will enable developers build and to make it easier for buyers to purchase these housing units.

What is to be done in the issue of property documentation?
We know the government is already addressing the land title issue. The Committee on Land Reform is working seriously to make it faster. Part of the challenge we have with the Land Use Act is that regulations were meant to be made from time to time for the running of the Act but since its inception no regulation has been made. So, the Technical Committee on Land Reform is working on the mortgage issue. We believe the government must work in some way to fast-track the growth of the mortgage sector. A third issue the government must address in housing supply is infrastructure. Infrastructural development also creates a boom in the economy. Federal government’s projects are usually massive. For real estate, infrastructure is very important. In the suburbs, about 40 per cent of the money charged for buildings end up as infrastructure cost.

A developer will have to construct a road to the site, extend electricity, water, and at the end of all these the cost of the project will increase. Lack of infrastructure creates overcrowding of cities. It is the reason people are crowding the city centre in Lagos like Surulere, Ikeja, Yaba where there is a semblance of infrastructure. Imagine what will happen when they finish the dualisation of the Lagos-Badagry and Lagos-Ibadan roads. People will be able to live in far-flong areas like Ibadan and come to work in Lagos because they can travel to Lagos in less than one and half hours. At present, even those of us who live in Lagos leave home at 5.00am and barely make it to work at 8.ooam. If people are able to live in far-flung areas that are easily accessible then why should they pay so much money to live in FESTAC, Surulere, Yaba, Ikeja, among others. These are the challenges that we face in addition to the issue of absence of the right laws.

What is this request for a local content bill in the housing sector?
We have a serious issue in the construction industry, regarding manpower. Before now, the challenge was about high caliber manpower but that is substantially alright for now because it is being plugged but now we have problem with having low-level manpower such carpenters, tillers, masons, plumbers, all artisans. When there is a project to be executed in the country, we get artisans from Cotonou or Ghana. It is problem because our young people, who will ordinarily should go through the training are not bothered. Some are motorcycle riders, traders, among others. The challenge is how to meet the local manpower for the kind of development that we are proposing. Our 6-3-3-4 education system has cut off our former system that placed emphasis on technical education. Everybody now wants to be a white-collar worker or a trader. There is need for a construction industry bill that will insist on local content to solve this problem. It will state the number of Nigerians to be engaged in a construction site but I must say that the manpower is not as readily available as it used to be and, that is a problem.

Samsung Electronics Infringes Apple Patents

 Samsung  iPhone

(Reuters) - South Korea's Samsung Electronics Co Ltd infringes on portions of two Apple Inc patents on digital mobile devices, the U.S. International Trade Commission said on Friday.

The panel issued orders prohibiting Samsung from further importing, selling and distributing devices in the United States that infringe certain claims on the patents.

The ruling was the latest in a battle between Apple and Samsung that has spread across some 10 countries as they vie for market share in the lucrative mobile industry.
The case at the International Trade Commission was No. 337-796.

Ekiti SURE-P Chairman Hails FG over Payment of N120m to Beneficiaries

Chairman, State Implementation Committee (SIC) of the Subsidy Reinvestment and Empowerment Programme (SURE-P) in Ekiti State,  Hon. Femi Akinyemi has hailed the Federal Government over the prompt payment of the N10,000 monthly stipend to 3,000 beneficiaries in the State.

Akinyemi, who spoke with journalists in Ado-Ekiti, yesterday said he was particularly happy that the beneficiaries were paid on Wednesday,  so as to enable Muslims among them to enjoy the Eid-el-Fitr.

He said; "As at today, N120 million has entered Ekiti State through the SURE-P  Community Services, Youths and Women Employment Scheme, and one can imagine its effects on the economy of the State."

Speaking further, Akinyemi said; "On Wednesday, our 3,000 beneficiaries received what is now known as 'Goodluck Alert' and that was less than three weeks after they received their second and third month allowance through e-payment," he said.

Each of the 3,000 beneficiaries of the SURE-P Community Services, Youths and Women Employment Scheme is paid N10,000 per month for carrying out the community services like vigilante, clearing of drainages, sewage disposal, filling of pot-holes on township roads, cleaning of markets, palaces, schools and other public places.

"I am appreciative of this kind gesture from President Goodluck Jonathan and the beneficiaries have asked me to thank the president on their behalf.

"I also wish to urge the beneficiaries to continue to reciprocate the good gesture of the President Jonathan-led Federal Government by rendering diligent services.

"As for critics of the programme, I am sure that those who said it was not real must have swallowed