NCC collaborates with stakeholders on Telecoms services

The Nigerian Communications Commission, NCC says it is collaborating with stakeholders for efficient usage of Forex allocation to avoid capital flight on Telecommunications Services.

The Executive Vice Chairman of NCC, Professor Umar Danbatta stated this at the Stakeholders’ Forum on Framework of Service Request in Abuja.

Professor Danbatta said that since telecommunication’s business was capital intensive and the demand for Telecommunications services is on the increase.

He said it has become important to further expand telecommunications coverage through network elements to shore up the capacities of existing infrastructure.

“To this end overseas vendors are often engaged to provide network element and services required to support national telecommunications operators where such services cannot technically be sourced locally. These services are priced by the overseas vendors/partners in foreign currencies and Nigerian telecommunication operator are required to pay for such services in these currencies thereby creating significant demand for foreign exchange to cater for such services,” he stated.

The NCC sought the assistance of the Central Bank of Nigeria (CBN) to address the demand for foreign exchange by Nigerian Telecom Industry.

According to Professor Danbatta, “By the virtue of collaboration, the NCC provides expert advice and vets invoices and international payment to oversee vendors by the Telecom companies in Nigeria in order to ensure efficient usage of the forex allocation, prevent capital fight and round tripping amongst other things. This ultimately led to the development of appropriate rule and procedure for the processing of confirmation of reasonableness of service request/applications submitted by Commercial Banks to the Commission on behalf of Nigerian Telecom.”

Professor Danbatta, who was represented by Head of Competition and Tariff Unit for Policy, Competition and Public Analysis Department of the NCC, Mr. Bashir Idris, noted that the forum was an avenue to revise the guideline for processing reasonable service request.

“What we mean by that is that there are tangible and intangible accesses being put together by operators. The Commission is in charge of accessing the pricing of the intangible access like: software, bandwidth which the operators often have to pay overseas vendors. Now it is a collaboration between the NCC and the CBN so as to prevent capital flight and all manners of infringements on our foreign exchange and reserve to make sure that whatever the operators are paying out their vendors outside the country are actually what they should be paying out, so that the country is not short changed,” he further stated.

Benefits to subscribers
If an operator is paying more that it is supposed to pay, it adds to its cost. It is important that payments are paid overseas and then we are able to ensure that they are actually putting their real cost of their services in the pricing mechanism. Secondly is the fact that we will be able to prevent the erosion of our foreign exchange reserve through this exercise.

On the status of the current review of the guidelines, Mr Idris said that “the guidelines are currently on-going and being presented as we speak now. We give them the opportunity to critic it and make their own suggestions in areas that we did not probably see problems they might see and we will resolve it. Once it is being resolved, we will circulate the final document to everybody and it will become binding on everyone with guidelines and penalties for violation.”

He said the realistic pricing would be based on realistic costing “where costing is not realistic and our foreign exchange being depleted, it has an overbearing effect on the consumers ultimately. It may not appear immediately on the pricing per say, but it ultimately affects them in the sense that their country reserve is being shipped out illegally. We are trying to prevent all manner of practices that will erode Nigeria’s foreign exchange.”

Penalties for possible defaulters
The Head of the Project explained that, “We have specified several penalties not necessarily financial because when we know that probably someone presents an inflated invoice and it is declined, first and second time; the commission may suspend further processing of that company’s claims. Which means they will not be able to pay their overseas vendors and when they are not able to pay their overseas vendors they (overseas vendors) will withdraw services from them and you know the implication on their operations.”

It is hoped that by the end of the meeting, the NCC, principal stakeholders Banks, operators and their overseas vendors would come up with ways to address the challenges so as not to put any of the parties in a difficult situation and for convenience.

‘Lower purchasing power, fund costs, credit risks challenge economy’

It is not yet over , according to the officials of the International Monetary Fund ( IMF ) , who came to Nigeria on economic assessment , as the touted non – oil sector and consumer purchasing power were rated low , while risks against banks ’ lending and interest payment on debts remain elevated .
Led by the Senior Resident Representative and Mission Chief for Nigeria, Amine Mati , the officials said the relative stability is driven mainly by higher oil prices and portfolio flows, also known as “ hot money ” , which have helped strengthen fiscal and external buffers .
“ Higher oil prices and short- term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging … activity in the non – oil non – agricultural sector remains weak , as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending , ” he said .
Admitting that corporate tax collection efforts improved , he warned that revenue shortfalls and the late adoption of the 2018 budget will impede its implementation , with attendant implications .
According to him , revenue from higher oil prices is limited by net losses from retail fuel sales , while non – oil revenue remains below expectations , with yields from tax administration measures — including the Voluntary Asset Income Declaration Scheme ( VAID ) , and increased tax audits — yet to fully materialise.
But a statement from the Ministry of Finance, signed by the Director of Information , Hassan Dodo, affirmed that the country is making steady progress in domestic revenue mobilization in efforts to close the assessed gap in terms of debt service – to – revenue ratio .
According to him , a report on the revenue performance by the Federal Inland Revenue Service ( FIRS ) , showed about N 2 . 53 trillion collections between January and June 2018 , an increase of N 746 billion , representing 42 per cent , against N 1 . 78 trillion realised in the corresponding period in 2017 .
The amount also showed that the FIRS had already realised 75 per cent of its total target for the year , which is an improvement over what was realised in the corresponding period of 2017 .
Mati maintained that although lower cost of borrowings have kept interest payments within the budgeted envelope , the Federal Government’ s interest- to – revenue ratio is expected to take more than half of revenues this year .
“ Under current policies , the outlook remains challenging . Growth would pick up to about two per cent in 2018 , weighed down by lower than expected oil production and relatively weak agriculture growth .

Dutch firm plans 400 hectares textile park in Nigeria

A Dutch firm, Vlisco yesterday expressed readiness to invest on 400 hectares of land for the establishment of a textile park in the country.
The representative of Vlisco Mr. David Suddens stated this on the sidelines of President Muhammadu Buhari’s official Visit to The Hague, Netherlands where he met with Chief Executive Officers of Dutch companies.
This was contained in a statement by the Special Adviser to the President on media and publicity, Chief Femi Adesina.
Adesina in the statement said Mr. Hein Schumacher of FrieslandCampina described Nigeria as “a most important country to us,” adding that the conglomerate would invest about 11 million euros in a “ready to drink project, using 100% locally sourced milk.”
He also pledged continuous training for dairy farmers, and provision of fortified milk for school pupils.
Mr. Andrew Brown of Shell, which has done business for over 60 years in Nigeria, with over 3,000 local employees, said the company would maintain its emphasis on oil and power generation, while Mr. Roland Pirmez of Heineken commended the government for “stability in exchange rate for the past six to eight months.”
He added that the company was also planning to use renewable energy for its power needs,
Mr. Klaus Struilesma of a company called Connexion indicated the interest of the organization in building cattle ranches in Nigeria.
Over 20 CEOs of Dutch-owned companies were at the roundtable meeting.
President Buhari had earlier assured them of a safe and secure Nigeria, where their investments would be safe, and yield handsome returns.
He said “stability was the first thing in our campaigns. You have to secure a country first before you can effectively manage it. Before businesses can thrive, security is paramount. That is why we lay so much emphasis on securing the country.
“After security, our next emphasis is reviving the economy, and then, fighting corruption,” the President said.
He commended the many Dutch-owned companies operating in Nigeria for dealing fairly, noting that with many of them, “the relationship dates back more than two generations, and it is now almost a blood relationship rather than commercial.”
Urging the businesses to build factories in Nigeria, and source raw materials locally rather than wholesale import, President Buhari said he was impressed with the economic cooperation between Nigeria and Netherlands.
Speaking specifically about Royal Dutch Shell and the harnessing of Nigeria’s gas potentials, the President said: “We are more of a gas than petroleum producing country. We should be making more money from gas today than we make from petroleum, but the plans we made were scuttled.
“When I was Petroleum Minister (in the 1970s) for three-and-a-quarter years, the plan we had was to have 12 LNG trains by 1983, but more than a generation later, we are just on the 7th train. This was because some people came, and did just what they liked. If they knew what they were doing, we would have gone very far by now.”

Entrepreneurship is national service by John James

Entrepreneurship is national service by John James

Chief Executive Officer, Sunesis Farms, 27-year-old John James, in this interview with FEYISAYO POPOOLA says Nigeria is in desperate need of entrepreneurship

What crops or products does Sunesis Farms focus on?

At Sunesis Farms, we produce palm oil and rice paddy.

When and how did you learn farming?

Being a business-oriented person, I left the university with the mind-set to become an entrepreneur. As a result, I started learning about palm cultivation and processing in 2016 while going through the national youth service scheme.

I learnt a lot about the business online, joined a few groups of palm oil producers online and apprenticed with one of them at his business site for six months.

In May 2017, I joined the Rice Farmers Association of Nigeria, Lagos Chapter, in order to diversify my business by plugging into the rice cultivation, which has a shorter gestation period compared to my palm cultivation. Hence, I am never out of business now as we produce palm oil in large quantity in its seasons and cultivate local rice round the year.

For how long have you been in business?

I’ve been in business for two years now.

What is your educational background?

I am a graduate of accounting from the University of Lagos, Nigeria. Also, I’m currently pursuing a degree in law.

Challenges facing MSMEs in Nigeria

Challenges facing MSMEs in Nigeria

It is the responsibility of government to provide employment and security for the people, among other things. However, since government cannot provide full employment for the people, what it does is to provide the enabling environment for non-state actors to bridge the gap. These non-state actors include small and medium scale enterprises, among others.

Small and medium scale enterprises are the “engine of growth and catalyst for socio-economic transformation of any country, especially in a developing country like Nigeria. They are a veritable vehicle for the achievement of national macroeconomic objectives in terms of employment generation at low investment cost and enhancement of apprenticeship training.

But running small and medium scale enterprises in Nigeria is a most difficult thing because of the harsh economic environment. It is as a result of the harsh economic environment that many Small and Medium Scale Enterprises collapse or are operating on the margins. The increasing demand for consumer products has created a large market for small and medium enterprises in the country.

Small and Medium Enterprises have contributed immensely to the growth of Nigerian economy, adding that the sector also contributed to the national objective of creating employment opportunities, training entrepreneurs, and generating income and providing a source of livelihoods for the majority of low-income households in the country.

However, a major challenge facing small and medium enterprises operators is lack of finance. Lack of capital has been identified as the most serious problems of establishing and running small and medium enterprise as other problems can be solved with adequate capital.

The federal government through the CBN introduced Microfinance Policy in 2005. The policy provided the legal and regulatory frame work for microfinance banking in Nigeria so as to create sustainable and credible micro finance banks that is capable of mobilizing and channelling funds to the MSME sub – sector. However, this policy led to the introduction of microfinance banks. Today, the microfinance banks provide partial financing medium to address the inadequate access to finance confronting the Micro and Small Enterprises in Nigeria.

The Small and Medium Enterprise Equity Investment Scheme (SMEEIS)

This scheme is a voluntary initiative of the of the bankers’ Committee approved at its 246th meeting held in 1999 but started operating in 2001. The initiative was in response to the Federal Government’s concerns and policy measures for the promotion of Macro Small and Medium Enterprises (MSMEs) as a vehicle for rapid industrialization, sustainable economic development, poverty alleviation and employment generation.

The scheme requires all banks in Nigeria to set aside 10 % of their profit After Tax (PAT) for equity investment and promotion of small and medium enterprises. The 10% of the profit After Tax (PAT) to be set aside annually is to be invested in small and medium enterprises as the banking industry’s contribution to the Federal government’s efforts towards stimulating economic growth, developing local technology and generating employment.

The funding, to be provided under the scheme shall be in the form of equity investment in eligible enterprises and or loans at a single digit interest rate in order to reduce the burden of interest and other financial charges under normal bank lending, as well as provide financial, advisory, technical and managerial support for the banking industry.

However, the scheme did not achieve the desired impact as most MSMEs were not interested in the equity participation for fear of losing control of their enterprises.

Even then, most of them lacked the 60% equity contribution which resulted in delay disbursement as the borrowers were deemed to be uncooperative. In addition to this challenge, most MSMEs lack proper bankable business plan, marketing strategy, thorough accounting systems and do not run their transactions through the banking sytem.

Other challenges include: Management problems which include lack of manpower and training Inadequate infrastructure. Socio-cultural problems, Unstable policy environment, Multiple taxation

Program Management is an Area to Realize Value by Tuoyo Omatsuli

Program Management is an Area to Realize Value by Tuoyo Omatsuli

Tuoyo Omatsuli said Sophisticated program management and program advisory services help deliver consistent, cost-eff ective results at scale by combining a rigorous, quantitative approach with deep expertise and qualifi ed professionals. More than just delivering on time and budget without sacrifi cing quality, it can help unlock business value with improved reporting, industry insight and value management. Given project management’s ability to “make or break” business change programs or IT implementations, Accenture has a dedicated, industry-leading practice with specialized skills and strong methodologies. Tuoyo Omatsuli regularly advise on four areas to bring complex projects or programs to a successful conclusion; they form the foundation for robust, mature program management .

  1. Governance and design authority: An eff ective governance framework establishes documented terms of reference, empowered and engaged steering groups with increasing levels of seniority up to C-level, resource prioritization processes, and a project management offi ce (PMO) to supervise quality and cost. A design authority engages the right people in key user groups, helps teams understand the implementation’s impact and safeguards solution integrity.
  2. Consistent and comprehensive standards: With consistent standards, organizations can track and manage dependencies, address issues and risks with appropriate governance, gain early insights, and fl ag departures from plan. Since no project runs without issues, early insights are key to taking corrective action.
  3. Delivery model and methodology: Most large enterprises now require a combination of Agile, Waterfall and other delivery methods to successfully juggle the range of projects and technologies in play. Experienced professionals and advanced methodologies tailored to multi-speed IT help support multiple implementation methodologies across suppliers, technologies, projects, front- and back-end, and support and development.2
  4. Release planning and management: A well structured demand management funnel helps to prioritize projects, support sound investment decisions and monitor the business case. Eff ective release planning identifi es optimum project sequencing to deliver incremental/early benefi ts. Ongoing release management maintains technical health and production routes across the enterprise, including resource planning, environments, and development operations (DevOps).3
  5. Underpining all these areas is the right tooling; without a consistant and eff ective set of tools for managing day to day program activities, productivity will be impaired, gaps will appear and ultimately quality will suffer.

DOLLAR LITTLE CHANGED DESPITE DATA DELUGE

Image result for DOLLAR LITTLE CHANGED DESPITE DATA DELUGE

The dollar turning in a mixed performance against its major rivals Thursday afternoon, but remains little changed overall. Traders were confronted by a high volume of economic reports this morning and are preparing for another data deluge tomorrow. Durable goods orders, personal income, new home sales and consumer sentiment are all slated for Friday morning.

Economic activity in the US unexpectedly grew at a slightly slower than previously estimated rate in the third quarter, according to a report released by the Commerce Department on Thursday. The report said real gross domestic product surged up by 3.2% in the third quarter compared to the previously estimated 3.3% jump. Economists had expected the pace of growth to be unrevised.

A report released by the Labor Department on Thursday showed a bigger than expected increase in first-time claims for US unemployment benefits in the week ended December 16th. The report said initial jobless claims climbed to 245,000, an increase of 20,000 from the previous week’s unrevised level of 225,000. Economists had expected jobless claims to rise to 234,000.

After reporting a bigger than expected slowdown in the pace of growth in regional manufacturing activity in the previous month, the Federal Reserve Bank of Philadelphia released a report on Thursday showing the pace of growth unexpectedly rebounded in the month of December.

The Philly Fed said its diffusion index for current general activity climbed to 26.2 in December from 22.7 in November, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to drop to 21.5.

Suggesting solid economic growth will continue into the first half of 2018, the Conference Board released a report on Thursday showing a slightly bigger than increase by its index of leading US economic indicators in the month of November.

The Conference Board said its leading economic index climbed by 0.4% in November after jumping by 1.2% in October. Economists had expected the index to rise by 0.3%.

The dollar has climbed to around USD1.1870 against the Euro Thursday afternoon, from an early low of USD1.1889.

French manufacturing confidence declined unexpectedly in December, survey results from the statistical office Insee showed Thursday.

The business climate in manufacturing remained very favorable in December, although the composite index dropped to 112 from 113 in November.

Meanwhile, economists had expected the index to remain stable at 113.

The buck rose to an early high of USD1.3330 against the pound sterling Thursday, but has since retreated to around USD1.3380.

The UK budget balance showed its smallest November deficit in a decade, largely due to higher tax income.

Public sector net borrowing excluding public sector banks, decreased GBP 0.2 billion to GBP 8.7 billion in November, data from the Office for National Statistics showed Thursday.

This was the lowest November net borrowing since 2007. The expected level was GBP 9 billion.

UK consumer confidence fell to a four-year low in December as Brexit uncertainty, higher inflation and interest rate hike by the Bank of England weighed on the assessment of personal finance, survey data from GfK showed Thursday.

The survey suggested that the confidence level is set to drop further next year.

The consumer confidence index dropped one point to -13, the lowest since December 2013. The score was forecast to remain at -12.

The Bank of Japan maintained its aggressive monetary easing, as widely expected, as inflation remains well below the 2% target.

Governor Haruhiko Kuroda and his board members decided by an 8-1 majority vote to hold its target of raising the amount of outstanding JGB holdings at an annual pace of about JPY 80 trillion, the bank said in a statement on Thursday.

The bank will purchase government bonds so that the yield of 10-year JGBs will remain at around zero %.

The board also decided to maintain the -0.1% interest rate on current accounts that financial institutions maintain at the bank.

The greenback reached a high of Y113.637 against the Japanese Yen Thursday morning, but has since eased back to around Y113.365.

Copyright RTT News/dpa-AFX

Opinion: Here’s why U.S. stocks will likely be higher in December 2018

Market history favors stock investors every year

There is precisely at 65.5% chance that U.S. stocks will be higher one year from today. Many investors will be happy with those odds, given that the stock market has been unexpectedly strong so far this year. But what they might not realize is that the odds of an “up” market in 2018 would be the same even if equities had been terrible performers this year.

In fact, the odds of a positive year are the same regardless of the conditions that prevailed in the previous calendar year.

That at least is what I found upon feeding into my PC’s statistical package the yearly returns for the Dow Jones Industrial Average DJIA, +0.29%  since it was created in 1896. Of the 119 calendar years since then, the stock market has risen 78 times — or 65.5% of the time, on average. Following calendar years in which the stock market rose, in the next calendar year it rose in a statistically equivalent 65.4% of the time.

And, as you can see from the chart below, these are exactly the same odds that apply following years in which the Dow fell.

Why are the stock market’s odds of rising so impervious to what happened in the previous year? Actually, it would be surprising if this weren’t the case, according to Lawrence Tint, a chairman of Quantal International, a firm that conducts risk modeling for institutional investors. In an interview, he argued that what emerges from the data is exactly what we should expect from an efficient market — a market whose level at any given time reflects what is already known and therefore has incorporated past history.

If, instead, the stock market’s future direction was a function of what had come before, Tint continued, it would suffer from “unnecessary and unhealthy turmoil. We can be comforted by the fact that reasonably efficient markets always base their level on anticipated future returns, and do not include history in the calculation.”

This is particularly illustrated by the right-most bar in the chart, which reflects the market’s historical odds following years in which stocks gained more than 20%. That’s relevant to today’s situation, since the Dow’s year-to-date gain is around 22%. As you can see, however, the odds of the market rising in the years subsequent to such gains are no higher or lower than in any other year.

A good way to understand these results is to think of coin flipping: What are your odds of flipping a heads after flipping, say, five heads in a row? Those odds are no different than if you had flipped five tails in a row, of course. To think otherwise is to be guilty of what is known as the “gamblers’ fallacy.”

This isn’t to say that the stock market and coin flipping are equivalent. But playing the stock market over the short term is essentially gambling. It’s only over many years that considerations like valuation start to play a statistically significant role.

The bottom line? Optimists will latch on to the two-out-of-three odds of the market rising next year, and pessimists will focus on the one-out-of-three odds of its falling. Regardless of what does happen, the outcome will have nothing to do with how well stocks have performed this year.