A Publication of TELL Communications Limited

Editor-in-Chief: Nosa Igiebor Reporter: Abiola Odutola

Deputy Editor-in-Chief: Dele Omotunde Copy Editor: Adebayo Sowemimo
Managing Editor: Onome Osifo-Whiskey Principal Reader: Oluchi Ugboaja
Executive Editors: Ayodele Akinkuotu, Ademola Oyinlola
AGM, Production: Emmanuel Bodemeh
Editor: Salif Atojoko Assistant Manager, Production: Godwin Alozie
Photo Editor: Sunday Adedeji
Associate Editor: Tony Manuaka Photographer: Paul Kuyoro
Senior Assistant Editors: Muyiwa Lucas, Raymond Mordi,
Chikodi Okereocha

27 Executive Opportunities
Double Honours for Dangote
Aliko Dangote and his group of companies
are accorded international recognition for
excellence in business in Africa by the African
Business magazine in collaboration with the
Commonwealth Business Council and Businesss
in Africa Events

28 Banking
Feasting on Depositors’ Greed
As depositors of self-acclaimed fund managers,
otherwise known as wonder banks continue to
count their losses, many more Nigerians, driven
mostly by greed, warm up to patronise new
ones gearing up to commence operations

31 Government &
Policies
An Eye on Youth
Development
The 17th Nigerian Economic
Summit seeks sustainable
means of tackling growing
unemployment in the
country

32
Commerce
Making Fortunes in
Cover Story: 34 Women’s World
Male hairstylists earn big
money plaiting, braiding

The Politics of Cement

and weaving hair for
female customers, thereby
becoming the rave of the
moment
Experts attribute the 30 per cent reduction in the price
of cement to the lull in construction activities rather than
deliberate efforts of government and manufacturers * News Briefs * Stock Charts

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BSJ Website: www.bsjournal.com Email addresses: newsroom@bsjournal.com; advert@bsjournal.com

ISSN: 0794-4101 Cover design by Xstrata Consulting (Olu Ogunye)

BSJ, July 11, 2011 26 www.bsjournal.com

 NEWS BRIEFS
Osibodu: Attributes
performance to major
progress recorded
Union Bank
Records N118
Billion Profit
U nion Bank of Nigeria, UBN,
has recorded a pre-tax
profit of N47.4 billion and a post-
tax profit of N118 billion for its
2010 financial year that ended in December 31, 2010. For a bank
that recorded a loss of N286.1 billion in December 2009, this is a
significant achievement, which has been attributed to deferred tax
credit as a result of huge losses sustained in the previous year.
According to the audited results released to the Nigerian Stock
Exchange, NSE, recently, the UBN group recorded a post-tax profit
of N106.5 billion for the period under review, indicating a recovery
from a loss after-tax of N281.3 billion posted in 2009. For the period
under review, the group recorded gross earnings of N130.4 billion,
while the bank accounted for N114 billion of the total earnings,
signifying that the group was able to grow its businesses during
the review period.
In addition, the strategy of the bank towards improving the
quality of its risk assets and improving liquidity paid off as the
group reduced its non-performing loans significantly largely
through sales of such loans to the Assets Management Company of
Nigeria, AMCON.
Funke Osibodu, group managing director/chief executive, UBN,
attributed the performance to the major progress recorded in
recoveries, the credit from the AMCON and other recoveries and
write backs pursued and executed vigorously by the management.
Lafarge WAPCO
Launches Health
and Safety Month
L afarge Cement WAPCO Nigeria, a
Nigerian cement manufacturing
company, recently launched its annual
Health and Safety Month in Lagos,
Sagamu and Ewekoro, Ogun State. The
2011 edition of the initiative tagged
“Transport Safety” covers activities
linked to the movement of vehicles,
equipment and pedestrians on or off Abdelkader: Health
the plants. The activities were designed and Safety, Lafarge’s
to create awareness among the number one priority
company’s stakeholders on the necessary precautions required in
order to operate transport in a safe manner.
The Health and Safety Month, which is observed in all the 78
countries where the cement manufacturing company operates,
focuses on three key areas: mobile equipment, people transport
and logistic safety. Samy Abdelkader, managing director of
the company, explained that the scheme would also focus on
occupational and public health. He explained that activities at the
country level for the month include: training of stakeholders on
safety standard and procedures, defensive driving and journey
management techniques. It will also feature roadshows on safety
driving campaigns at some motor parks in the three locations of
the company. This will be done in conjunction with Federal Road
BSJ, July 11, 2011
Safety Commission.
Spouses and children of the company’s staff were not left out
of the programme as the company organised a family open day to
share staff commitment to health and safety with them. Abdelkader,
said: “Health and Safety is Lafarge’s number one priority. The safe
operation of transport is a key element of our operations. We are
organising road safety events at our site to reflect the importance
of this issue to everyone at the site. Across the world, it is estimated
that 50 million people are seriously injured in road incidents each
year, demonstrating that this is a subject that applies to everyone.’’
The campaign, behind Health and Safety Month, centres on
making choices that can eliminate risks for drivers and pedestrians.
The importance of transport safety has also been recognised by the
World Health Organisation and United Nations.
All for Hair Care
C
hika Ikenga, founder, Recare
Cosmetics International, RCI,
caters for African skin and hair by
designing and developing unique
personal style products suitable for
them. For 14 years, the institute has
empowered several Nigerians in
the art of hair maintenance, thereby
making them likely entrepreneurs.
For Mojisola Bakare, a Computer
Economics graduate, who opted to
study at the institute after remaining
unemployed several years after
graduation, coming to the institute Ikenga: We are more than
has been a blessing. “I’ve always been a hair-care company
interested in hair styling since I was
a child. I started with weaving, but I wanted where I could get
professional knowledge,” said Bakare, who is now an instructor at
the institute after completing her eight-month training there.
Impressed by the acceptance of her outfit, and realising
the yearning gap yet to be filled in the beauty industry, Ikenga,
in 2006, set up Natures’ Gentle Touch Hair Institute, NGTHI.
Interestingly, although this
is also related to hair styling
and beauty treatment, it has
been positioned as a vehicle
that would assist in achieving
some of the United Nations
Millennium Development Goals
by providing education and
vocational skills to individuals.
According to Ikenga, this will go
a long way towards empowering
a section of the country’s
dependent population,
especially women, and in turn Lecture time at the Institute
help reduce unemployment and poverty. “We’re a lifestyle; a culture
and our corporate philosophy says it all; we are more than a hair-
care company,” intoned Ikenga, himself a graduate of Industrial
Chemistry from the University of Nigeria, Nsukka, Enugu State.
As part of its corporate social responsibility, CSR, the institute
also offers scholarship to students who are in need of financial
help. Clara Anyasike, the institute’s administrator, enjoined other
corporate organisations and foundations to partner with them on
their CSR projects to achieve similar milestone as has been recorded
with Recare Limited.
38 www.bsjournal.com
 NEWS BRIEFS

Grand Cereals off of the long-haul flights. He stated that Akinkuotu’s

excellent leadership qualities and competence
Re-Launches demonstrated in previous roles in the airline would be
invaluable in the discharge of his mandate.

Grand Pure
Soya Oil Propertymart Creates
G rand Cereals Limited,
makers of Grand Pure
Model Estate
Soya Oil and Grand Pure
Groundnut Oil, a subsidiary
of UAC of Nigeria, has Ettah (right) and Orhii at the launch
W
ork has started on a new residential estate in
Arepo, Ogun State, which seeks to reinvent the
concept of the old government reservation area, GRA.
unveiled its newly improved The signing of an agreement involving the firm of
and repackaged Grand Pure Soya Oil into the vegetable oil market. property developers, Messrs Propertymart Real Estate Investment
Bode Emmanuel, chairman, Grand Cereals Limited, explained Limited, and PW Construction Company Limited recently in Lagos
that Grand Cereals Limited believes in adding value to the economy signalled the commencement of work at the estate known as The
of Nigeria by producing world-class brands from local grains Grenadines.
and oils seeds right from inception. Larry Ettah, the company’s The Grenadines, a residential estate bordering the popular
group managing director, said that in 2005, the Nigerian Heart Journalists Estate, Arepo, according to its promoters, would set a
Foundation, NHF, endorsed Grand Pure Soya Oil as the only heart- high benchmark in service delivery, infrastructure and environment.
friendly oil in Nigeria, the first given to any brand in Nigeria. Adesope Adeyinka, managing director, MD, Propertymart, said the
Paul Orhii, director-general, National Agency for Foods Drugs estate would display functional and loft style individual houses of
Administration and Control, NAFDAC, lauded Grand Cereals contemporary Victoria architecture. “It is at the same time modern
Limited for adhering to high ethical and health standards in the while also offering a peep into the post-modern, varying in concept
production of their products. Orhii assured Nigerians that the and facades that eliminates the barrack-like look; a sort of mosaic
newly repackaged Grand Pure Soya Oil has been duly certified by bespoke architecture,” he added.
NAFDAC as fit and healthy for consumption for all Nigerians. According to Arosanyin Olaolu, marketing services manager,
Propertymart, aspiring beneficiaries are at liberty to purchase the
property by paying outright or by installment. Alternatively, he said
Air Nigeria the beneficiaries could access a mortgage facility being packaged

Launches Daily
London Flights
I n line with its route expansion plans, Air Nigeria is set to
recommence daily direct flights to London Gatwick using an
Airbus A340-300 series aircraft by September 2011. The long-
haul flight service is coming as the airline consolidates after the
full implementation of its turn-around strategy in the last one year
and has also completely reappraised its product offering on the
international routes.
Kinfe Kahssaye, the chief executive officer, CEO, of the airline said
that Air Nigeria is delighted to announce the re-commencement of
the daily flight to London, which will offer passengers seamless
onward international connectivity
as well as strengthen the existing
socio-economic activities between
both nations. In preparation for the Walsh (left), Adesope and Obat Olowu at the contract
re-launch of the long-haul flight signing ceremony
operations, Kahssaye disclosed that
by the company in partnership with Resort Savings and Loans.
the company would acquire three
Adam Walsh, group contract manager of the company, said PW
state-of-the-art Airbus A340-300
was partnering with Propertymart to ensure that a “good job” is
series aircraft.
done. Egbeyemi Sultan, a director at Propertymart, described the
He also said that the board of the
development as a benchmark on how to execute the development
airline had approved the appointment
of an estate. According to him, Propertymart is utilising private
of Folayele Akinkuotu as the director
funds to execute the project and possessed the facilities to promote
of international operations to oversee
the construction.
the day-to-day administration of the
international arm of the airline in By Raymond Mordi, Chikodi Okereocha,
addition to working with a team that Arukaino Umukoro, Abiola Odutola,
Kahssaye: Delighted will deliver feasible plans for the take- Boye Ajayi and Tomisin Oyelere

BSJ, July 11, 2011 39 www.bsjournal.com

 COMMERCE

Making
Fortunes
In Women’s
World
Male hairstylists earn big
money plaiting, braiding
and weaving hair for
female customers,
thereby becoming the
rave of the moment
Male hairdressers,
some claim, are
more professional
By Folake Olagunju

T
hree years ago, when he made his
way into hairdressing from welding,
Dare Ogunsan had his mind set on
running a small business to cater for
himself and save enough money in
order to travel to the United States, US. He
promptly joined two other friends to open a
small shop in Ikotun, Lagos, from where he
keyed into a trade that is largely dominated
by women.
Ogunsan has never looked back since
making as much as N25,000 at peak period
(weekends) and an average of N10,000
on working days from plaiting, fixing or
braiding hair for women. From a modest
start-up capital of N50,000; he now makes
an annual turnover of N1,000,000.
Blessing Okorigwe is another male
hairdresser that has carved a niche for
himself in a female-dominated world. He
charges his clients based on their financial
status and hairstyle. “If you come into the
salon looking classy and rich, then I will give
you high charges, if you look average then
I do not charge high. Also if your hairstyle
is complicated and will take a long time to
complete, you get to pay more,” Okorigwe
told the magazine.
Hairdressing, once an exclusive
preserve of women, is now attracting
more male specialist. Nowadays, male
stylists like Bobby Eke, managing director,
Bobby’s Signature Salon and Ugo Igbokwe,
managing director, Make Me Beauty Place,
are only few out of several male stylists
in the country that are adding a touch of
creativity to the profession.
According to Okorigwe, the male
hairdressers have a field day during
weekends and public holidays. “During
these period, the traffic is usually high.
There are times the demand is more
than supply while we have to ask some
customers to come back because we will
not be able to attend to them,” he said. Male
hairstylists use this period to build their
customer base. They are believed to charge
special fees during such peak periods.
According to Okorigwe, fixing a weave on
comes at an average price of N1,000, “while
other complicated styles like bonding could
go as high as between N2,500 and N4,500.
As a result of this, a serious stylist could
make nothing less than N25,000 on a good
day.”
Why do customers flock around male
hairdressers, abandoning their female
counterparts? Bunmi Kanmodi, a student
of Ondo State Polytechnic, explained that
male hairdressers are more professional
than their female counterparts, and as such
justifiably charge higher for their services.
Her words: “I go all the way to Ikotun from
Iyana Ipaja for my hair because the boys
give me the perfect look I deserve and
always work to my satisfaction. I like them
because they take their job seriously unlike

BSJ, July 11, 2011 32 www.bsjournal.com

 COMMERCE
women who spend their time
talking and gossiping, making
them slower. The guys want
to finish your hair quickly so
they can move to the other
person.” Taiwo Oluyinka, a
300-level student of Lagos State
University, LASU, also prefers
male hairdressers. “Apart from
being fast and efficient, they are
also better than the females at
concentrating on their jobs.”
Her own notion is that there is
no big deal in a male hairdresser
styling a female’s hair so long as
it is kept strictly professional.
While the male hairdressers
are smiling to the bank,
they have had to cope with
the antics of their envious
BSJ, July 11, 2011
Ogunsan: Reaps bountifully from haircare
Eke: Brought creativity to hairdressing profession
Okorigwe: Charges according to appearance
33
female counterparts. Most times, the
male hairdressers have been embarrased
by their female counterparts who feel
intimidated by their presence, often chasing
them from one location to another after
several clashes. The way out, according to
Ogunsan, is for the male hairdressers to
join the Association of Hairdressers so they
can operate freely.
W
hile some women prefer male
hairdressers, others detest even
the thought of it. Cecilia Omoyeni,
a businesswoman in Isheri, Lagos,
argues that it is culturally and
morally wrong for a man to style a woman’s
hair. According to her, hairdressing is an
art, which may require bonding and some
sense of familiarity between the stylist and
the customer, mainly because of the long
hours it takes to complete it. “With some
hairstyles like braiding taking as long as
three to four hours, how then is it possible
for a bond not to be formed when a male
fiddles with a female’s hair this long?” she
asked.
Omoyeni believes such acts encourage
adultery and fornication especially among
the unmarried ladies, as they may get
emotionally attached to the stylists who
spend long hours doing their hair. “I don’t
know why some women pay exorbitant
prices like N1,500 to these boys when they
can make their hair as cheap as N800 with
female hairstylists?” she asked.
The female customers may love the feel
of male hands on their hair, but how do their
spouses feel about this? Segun Ogundiran, a
banker, says: “The bible says the hair is the
crowning glory of a woman, so why would
another man, apart from the husband,
touch her hair? I do not support it and my
wife cannot even try it because she knows
my stand about it.” To him, those who
patraonise male hair dressers should make
their hair with women like themselves and
the men should stick strictly to barbing.
But Ogunsan claims he keeps his
work strictly professional and does not
get involved with any of his customers
emotionally. “I concentrate on my job and
only my job alone. I don’t have time for any
relationship with any of my customers,”
he said. Similarly, Kanmodi explained
that other professions require touching
more intimate parts of women. “Doctors,
for instance, do this and spouses do not
complain,” he observed.
As the rank of male hairdressers swells,
their female counterparts are green with
envy, and spouses are more than ever
before paying atttention to what goes on
between the male hairdressers and their
ever so willing clients.
www.bsjournal.com
 GOVERNMENT & POLICIES
An Eye on Youth
Development
The 17th Nigerian Economic Summit
seeks sustainable means of tackling
growing unemployment in the country
By Tony Manuaka
T
he implications of growing youth
population and unemployment in the
country are some of the major issues
that will engage the attention of
delegates at the 17th Nigerian Economic
Summit, NES. For many observers, the issue
could not have come up at a better time
than now that youth restiveness is gaining
ground in the country. President Goodluck
Jonathan will lead the Presidential
Policy Dialogue on a documentary titled:
Nigeria’s Wasted Youth – The Crisis of
Unemployment. Namadi Sambo, Vice
President, Ayim Pius Ayim, secretary to the
government of the federation, ministers,
leadership of the National Assembly,
Lamido Sanusi, governor of the Central
Bank of Nigeria, CBN, and other financial
regulators, captains of industry, emerging
BSJ, July 11, 2011
Monye and Nweke Jr.: Tackle
Nigeria’s unemployment crisis
young leaders,
members of the
diplomatic corps and
heads of multilateral
agencies will also be
in attendance.
Ignacio Lula Da Silva, former president
of Brazil, has also been invited as keynote
speaker to discuss the social policies, which
underpinned his growth acceleration
programme, transformed the Brazilian
society, lifted 25 million Brazilians out of
poverty and saw the middle class rise from
37 per cent to 50 per cent of the population
during his eight-year administration.
“We believe that our leaders at the
public and private sectors need to share
his visionary and selfless leadership
qualities that led to the transformation
of Brazil,” said Sylvester Monye, professor
and executive secretary, National Planning
Commission, NPC, as he explained the
rationale behind inviting the former
Brazilian president to the summit.
Tagged, Putting
Nigeria to Work:
Reinforcing Partnerships
for Political and
Economic Development,
the summit holds
between September 6
and 8, 2011 at Transcorp
Da Silva: Hilton Hotel, Abuja.
Invited as Frank Nweke jnr,
keynote director-general, Nigeria
speaker Economic Summit
Group, NESG, said, “The
17th summit will seek
to build consensus on
the appropriate strategy
for tackling Nigeria’s
unemployment crisis and
the role of both the public
and private sectors in
this endeavour”.
A recent World Bank
31
study observed that in order to harness
Nigeria’s demographic dividend, the
federal government would need to create
15 million new jobs over the next 10 years
just to keep employment at current levels.
If Nigeria aims to halve unemployment, it
will need to create 24 million new jobs,
expanding the labour market by almost
50 per cent. Yet, if unemployment is to
be brought to seven per cent by 2030, the
labour market needs to nearly double in
size, creating almost 50 million jobs.
Of grave concern is the predominantly
young population of people under-30 in
Tunisia (51 per cent), Egypt (61 per cent)
and Syria (67 per cent) compared to 64.5
per cent in Nigeria. Youth unemployment
rate in the Middle East and North African
countries is said to be at an average of
25 per cent by the World Bank while in
Nigeria the National Bureau of Statistics
reports as high as 32 per cent, a situation
which calls for urgent action. In the face of
this threat to development government is
expected to take urgent steps to diversify
the Nigerian economy by directing its
attention to sectors with high growth and
employment potential such as agriculture,
housing and construction, manufacturing
as well as developing small and medium
enterprises.
This could be achieved through
investments in critical infrastructure,
targeted policy initiatives and special
financial services for specific sectors.
At the same time, development experts
believe that significant investments will be
required in health and education in order
to bridge skill gaps and improve access to
technology.
www.bsjournal.com
 STOCK MOVEMENT CHARTS
22/06/11 — 29/06/11

Compiled by Abiola Odutola

TOP GAINERS
Sub-sector Company Opening Closing
Value Value Change Change Dividend Date EPS P.E Year
N N N % Paid Paid Ratio End

Banking Union Bank 2.20 2.79 0.59 26.81 0.25 — 1.23 10.41 Dec

Building Dangote Cement 127.00 129.99 2.99 2.35 7.50 23/05/11 2.24 17.19 Dec

Breweries Guinness 239.50 245.00 5.50 2.29 0.40 02/11/09 9.78 19.07 June

Food and Beverages Flour Mill 91.00 93.00 2.00 2.19 — 05/10/09 9.53 8.50 Dec

Dangote Flour 15.60 16.00 0.40 2.56 — — — — Dec

TOP LOSERS
Sub-sector Company Opening Closing
Value Value Change Change Dividend Date EPS P.E Year
N N N % Paid Paid Ratio End

Banking UBA 5.70 5.60 0.10 1.75 0.35 19/5/11 1.23 11.27 Dec

Access 7.29 7.20 0.09 1.23 0.35 19/5/11 0.63 0.00 Dec

GTB 15.48 15.16 0.32 2.06 0.75 — 1.23 11.42 Dec

Zenith Bank 14.85 14.11 0.74 4.98 — — — — Dec

CBN Exchange Rates (June 29, 2011) Black Market (June 29, 2011)
Currency Buying (NGN) Central (NGN) Selling (NGN) Location Currency Buying Selling

CFA 0.3109 0.3209 0.3308 Lagos £ 243.50 252.00

DANISH KRONER 29.143 29.2393 29.3356 $ 151.00 153.50

EURO 217.48 218.2024 218.9208 € 219.50 220.10
POUND STERLING 241.8861 242.6836 243.4858
Airport £ 243.00 252.50
RIYAL 40.2053 40.3386 40.4719
$ 151.50 153.50
SDR 240.8569 241.6556 242.4542
€ 219.00 220.50
SWISS FRANC 180.5436 181.1423 181.7409
Allen Avenue £ 244.00 252.00
US DOLLAR 150.79 151.29 151.79

WAUA 240.3542 241.1512 241.9482 $ 151.50 154.00

YEN 1.86 1.8662 1.8723 € 220.00 221.50

BSJ, July 11, 2011 40 www.bsjournal.com

 BANKING

Customers of Pennywise
Wonder Bank ponder
over their fate

Feasting on
Depositors’
Greed
As depositors of self-acclaimed
fund managers, otherwise
known as wonder banks
continue to count their losses,
many more Nigerians, driven
mostly by greed, warm up to
patronise new ones gearing up CAP Wonder
to commence operations Bank, Abule-Egba:
Depositors wait in
vain for their money

By Abiola Odutola

T
he way and manner the investment proposal
was dangled before him left him with no iota
of doubt over its prospects for bountiful
returns. It was at a chance meeting between
Tobi Opaleye, a prospective investor, and
Abimbola Ajewole, a self-acclaimed fund manager,
in front of M & F Filling Station, along Igbogbo Road,
Ikorodu, Lagos. Time was 1 pm, June 21, 2011.
Ajewole, who said he was on the verge of floating
Wealth Solution, a new finance company, informed
Opaleye that he would reap a profit of N5,000 over
a period of two weeks on every N20,000 deposited
in the soon-to-be-launched finance company.
Wealth Solution, he added, would also grant a loan
of N1 million to small-scale entrepreneurs who
met the company’s requirements, noting that the
company had successfully offered such schemes in
South Africa and Ghana for two years where the
underprivileged were empowered with funds to
do business.
As Ajewole reeled out other numerous benefits
of the scheme, Opaleye, an unemployed graduate
from Ogun State, made a quick mental calculation of
how the offer could transform his life. He reasoned
that if an investment of N20,000 could yield as
much as N5,000 in two weeks, which represents
25 per cent of the deposit, it meant that he could

BSJ, July 11, 2011 28 www.bsjournal.com

 BANKING
smile home with as much as N25,000 in
two weeks if he invested N100,000. This,
to him, was indeed a chance in a lifetime.
Amidst the excitement, he quickly put a
call through to his friends and relatives,
begging them to assist him in mobilising
funds to invest in the business. “There is a
new business in town we can make lots of
money from. If we invest N500,000 twice
in a month, we will reap N250,000 at the
end of the month,” he announced to them
triumphantly.
It was in the course of soliciting for funds
from friends and relatives that Akinwole
Raji, an auto mechanic, also got hooked.
On further enquiries by Raji, who said he
Umanah:
‘Father’
of wonder
banks
got attracted by the loan offer, he was told
that the loan policy required all applicants
to first make a deposit of N50,000 with the
company after which officials of the firm
would visit the proposed site of the factory
or workshop for site inspection and to
confirm all the details provided by the
applicant. “If you are interested put down
your name with contact details in the book
so that you can be among the first category
to be considered when the premium
commences next month,” Ajewole said.
By the time he was through, about 12
passersby had entered their names in the
register.
For Raji, it was not the first time,
having invested an initial N20,000 in
Confederation of African Philanthropists,
BSJ, July 11, 2011
CAP, another self-acclaimed fund manager
located in the Abule Egba area along the
Lagos-Abeokuta Expressway. Encouraged
by the N45,000 he made from his
investment in CAP sometime in January
2010, Raji is eager for Ajewole’s Wealth
Solution to come on stream.
F
elicia Adesanya, a teacher with the
Lagos State government, is also
eager to invest in Wealth Solution
or any other outfit that promises
mouthwatering returns on
investment. According to Adesanya, who
was one of the depositors in NOSPETCO
Oil & Gas Limited, another wonder bank,
which operated between 2005 and 2007
before it went under, there is no better
time to invest in such scheme than now
when it is new before several people rush
in. “Now that they are still new, they will
pay all the returns promised. In such
schemes, one can build up his portfolio
to a reasonable extent before terminating
the contract with the company,” she told
the magazine, noting however, that with
similar experience in NOSPETCO, she
would examine the authenticity of the
Certificate of Incorporation of the outfit
before injecting her funds. “As a teacher
of accounting, I have evaluated the risks,
checked the annuity and payback period
and I came to the conclusion that within
three months I will get back my principal
29
fund,” she said.
Opaleye, Raji, and Adesanya are just
three out of millions of Nigerians who are
eager, if not desperate, to invest in such
schemes despite the dubious nature of
such wonder banks or fund managers as
most of them would prefer to be called.
Their desperation once again brings to the
fore the penchant of Nigerians to patronise
wonder banks that dangle the proverbial
carrot in the form of juicy returns on
investments to fleece unsuspecting
depositors. Many Nigerians who never
bothered to crosscheck the profiles of the
so-called finance houses or wonder banks
had in the past got their fingers burnt
when they lost several millions of
naira to illegal fund managers.
Indeed, such finance houses
or wonder banks have never been
in short supply in the Nigerian
financial landscape. Apart from
NOSPETCO and CAP, there was
also Trade Masters, Easy Money,
Mega Wealth, Success Point,
Pennywise, Treasurelink Fund,
Fortune Assets, Pot of Wealth,
Positive Movement and Sefteg
Company Nigeria Limited, among
other wonder banks that have at
one point or the other swindled
people of their hard-earned money
in major cities across the country.
Perhaps, the most celebrated case
was Resources Managers Nigeria
Limited, a Port Harcourt-based
money brokerage firm, promoted by
the notorious Umanah E. Umanah.
Sometime in 1991, Umanah, who
was the chief executive officer of
the firm, had carefully crafted a
scheme through which he swindled
countless number of unsuspecting
Nigerians. The unscrupulous activities of
the self-styled fund manager upended the
investing climate not only in the Rivers
State capital but also across the entire
country.
In the case of NOSPETCO, the company
took the scheme a notch higher. While
commercial banks were paying a paltry six
per cent per annum as interest on deposits,
its investors, known as Joint Venture, JV,
partners, got N40,000 per month on a
minimum investment of one slot valued at
N450,000. The rate is 100 per cent more
than what the banks offer their customers
and by far outpaces the rate of returns in
the capital or property market. Although,
some initial depositors reaped bountifully
before the bubble burst, the activities
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 BANKING
of the company left sour
tastes in the mouths of
hundreds of thousands of
depositors who later joined
the scheme.
The Central Bank of
Nigeria, CBN, rounded
up officials of Planwell
Watershed and Arise and
Shine/AME Trust Company
(both in Benin, Edo State).
The customers of the two
rogue finance houses were
promised huge interests,
sometimes up to 60 per
cent on their fixed deposits.
Invariably, the companies
could not pay both the
interest and the principal
on maturity, amounting
to N100 million. Forum
Business Finance, FBF, a
finance company located in
Lagos similarly defrauded Nigerians to the
tune of millions of naira in 1993. In all the
cases, the CBN had blamed the depositors,
explaining that only licensed commercial
banks, mortgage financial institutions and
microfinance banks are authorised to take
deposits from the public and pay interests
through their money market products.
The apex bank made it clear that finance
houses are not allowed to collect deposits.
As at last year, about N107 billion
Owoeye: Most of
the depositors are
thieves too
BSJ, July 11, 2011
Esho: Many
Nigerians
are greedy
belonging to a total of 560, 882 Nigerians
was trapped in about 500 illegal banks.
Out of the total claims made by the public,
Muhammed Abdulahi, head, corporate
affairs, CBN, confirmed recently that
NOSPETCO accounted for 48 per cent of
total claims. Till date, victims of these
wonder banks are still gnashing their
teeth. Yet, this has not stopped Nigerians
from patronising such wonder banks.
“Greed.” That was how Ayodele Esho,
30
an accountant, summed up
the factor responsible for
the increasing rate at which
Nigerians patronise such
fund managers despite the
dangers. He explained that
the self-styled fund managers
still enjoy continuous
patronage despite strings of
losses incurred by previous
depositors due to the fact
that many Nigerians are
greedy and they believe
that the higher the risk,
the higher the return. “The
victims are only twisting
genuine financial theories to
suit their selfish objectives,”
he said, noting that poverty,
which many people adduce,
as reason for involvement
cannot be sustained.
According to him, even
enlightened and wealthy Nigerians are
lured into the unhealthy act.
F
or Sola Owoeye, former lecturer,
Department of Economics, Lagos
State University, the problem
goes beyond greed. As far as he is
concerned, those who patronise
wonder banks are thieves. Hear him: “Most
of the depositors are thieves too. They only
want to reap where they did not sow. How
can someone promise you about 100 per
cent returns or more every month without
disclosing the details of the business? Or
can you deposit N25,000 with a bank only
to get a loan facility of N1 million without
any interest? That is absurd. You don’t
just put your money anywhere because
the returns are good. For all you know,
the acclaimed philanthropists behind
these schemes might be making so much
money with your money and you are here
rejoicing that you are getting high return
on investment.”
To Esho, only a total change of
orientation by Nigerians can stem the
tide. “There is no such thing as a free
lunch. Always believe in yourself and seek
advice from experts who would assist
you in making wise investment decisions.
We must desist from engaging in any
unhealthy investment in whatever guise,”
he advised. But whether Nigerians are
prepared to heed such advice is an entirely
different issue. What is certain, however,
is that until they do so, operators of such
wonder banks would continue to have a
free reign.
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 EXECUTIVE OPPORTUNITIES

Dangote:

Double Honours
Can’t stop advantage of the socio-
winning economic revolution
on the continent,

for Dangote
which offers one of
the highest returns on
investment. “Reforms
are changing the face of
doing business on the
continent. Over 84 per
Aliko Dangote and his cent of economies in
group of companies are sub-Saharan Africa have
implemented regulatory
accorded international reforms making it easier
to do business,” he
recognition for excellence explained.
in business in Africa by the According to the
philanthropist, “There
African Business magazine are still challenges to
in collaboration with the doing business in Africa
but there is hope. This is
Commonwealth Business a new Africa. Governance
is much better. Yes, there
Council and Businesss in is corruption and it is
Africa Events caused a revolution in
still an issue. But looking
at where we started
the cement industry from, things are getting
when he consolidated his better and faster.”
By Abiola Odutola cement company across While NedBank, a
Africa. “He has a great South Africa bank, won
vision of creating a pan- the award for Good
African conglomerate. Corporate Governance,

A
liko Dangote, president, Dangote The exciting news story Etisalat of United Arab
Group of Companies, cannot stop today is the expansion Emirate and mPedigree
winning. It was not surprising when, of Dangote Group into Network of Ghana
yet again, he mounted the podium to other neighbouring received the Investor of
claim the 2011 African Business Leader and far-away African the Year and award for
of the Year award in London last week. countries. The companies Innovation, respectively.
Dangote defeated continental business are paving the way in Other winners include:
titans like Phuthuma Nhleko, managing creating African giants Buchanan Renewables,
director, MTN Group in South Africa, the world will no longer Liberia, for Green Award
Nizar Juma, a Kenyan and owner of Jubilee be able to ignore,” he Yedder: Dangote caused a of the Year; Microsoft,
Holdings Limited, James Mwangi, another testified. Mohan Kaul, revolution in cement industry South Africa and Olam,
Kenyan and owner of Equity Bank, and director-general, CBC, Nigeria, won the award
Vimal Shah of Bidco Oil Refineries to win emphasised the role for Best Corporate
the laurel. Dangote Group also won the of the private sector in Social Responsibility;
African Business of the Year award ahead driving growth of Africa. and Bethlehem
of Bidco Oil Refineries, Kenya; Citadel He added that the awards Alemu of SoleRebels,
Capital, Egypt); Ecobank, Togo and Oando, go beyond the measure Ethiopia, emerged
Nigeria. of growth and profits but the Outstanding
African Business magazine, also encompass values Businesswoman of the
Commonwealth Business Council, CBC and service delivery that Year.
and Business in Africa Events, organisers “make a difference to The African Business
of the award, disclosed that the business ordinary people’s lives.” Awards has become a
mogul won the award based on his efforts Dangote commended key annual event for
to drive change in Africa with courage and the organisers for African businesses as
imagination to make difficult decisions presenting the new face it serves as a platform
with long-term value and sustainability in of African champions to to celebrate excellence
mind, which has ultimately transformed the world. He described and recognises business
the economies of many African countries. Africa as a global leaders who have driven
Omar Ben Yedder, publisher, African business destination to Kaul: Emphasises role of private the continent’s rapidly
Business magazine, confirmed that Dangote investors who are taking sector in driving growth of Africa transforming economy.

BSJ, July 11, 2011 27 www.bsjournal.com

 COVER STORY

The
Politics
of
Cement
Experts attribute the 30
per cent reduction in the
price of cement to the lull
in construction activities
rather than deliberate
efforts of government and
manufacturers

By Stella Sawyerr

W
holesale distributors and retailers
of cement across the country have
been incurring losses occasioned
by the high cost of the product, and
many of them had hoped that by June
the nightmare would be over. Their
hope was partly hinged on the May 16 directive
by President Goodluck Jonathan to cement
manufacturers to slash the price of the product
from between N2,300 and N2,500 to N1,000
within a month.
However, rather than N1,000 as directed by
Bags of cement: Price Jonathan, a 50-kilogramme, kg, of cement is now
reduces by 30% sold at between N1,700 and N1,950 in Lagos,
Abeokuta, and Sagamu, both in Ogun State. In
Akwa Ibom State, a bag of cement now goes for
N1,950 and N1,600 in Calabar, Cross River State.
The 30 per cent reduction in the price of
cement is attributed partly to the activities of

BSJ, July 11, 2011 www.bsjournal.com

 COVER STORY
and 100 bulk cement
trailers to ameliorate
the problem of haulage
of cement to all parts
of the country. Dangote
identified difficulties with
distribution as one of the
major reasons why cement
is scarce in some areas, and
with the scarcity comes
price hike. According to
him, “The new trucks
and bulk cement tankers,
which will be deplored
for the haulage of cement
from the factories and
various bagging plants is
expected to significantly
reduce the time lag
between production and
delivery to end users.” He
Makoju: Middlemen contribute to high cost of cement added, “The new vehicles
were part of measures
manufacturers after the stakeholders’ introduced by Dangote Cement, a subsidiary
meeting with President Jonathan. At of the group, to crash the high transportation
that meeting, some of the manufacturers costs, which was partly responsible for the
promised to tackle certain problems increase in the price of cement across the
responsible for the soaring price of country.” He also explained that “the trucks
cement such as activities of middle men shall be used to augment our existing fleet for
and transportation. According to Joseph direct intervention in the transport sector,
Makoju, chairman, Cement Manufacturers while the bulk tankers will be placed at the
Association of Nigeria, CMAN, “middlemen disposal of the construction companies for
along the supply chain are too many, direct delivery to their sites or silos.”
contributing to the high cost of the Dangote currently controls about 58
product.” That prompted Dangote to start per cent of the cement market in Nigeria,
selling cement directly to retailers, closely followed by Lafarge WAPCO Nigeria,
enabling them to buy as little as one truck with about 37 per cent share of the market.
as part of moves to bring down the price Lafarge WAPCO has since completed its
of cement. second plant known as Ewekoro II, adding
Dangote also ordered 5,000 trucks 2.5 million tonnes of cement annually
Dangote: Identifies
distribution as part of
reasons for scarcity
Vehicles provided by
Dangote to reduce time
lag between production
and delivery
BSJ, July 11, 2011 35
to the cement market. With that
addition, Lafarge Cement WAPCO now
produces 3.5 million tonnes of cement.
That, according to Samy Abdelkader,
managing director of the company,
translates to a contribution of about
12,000 tonnes of cement daily. “Our new
plant will be a further testimony to our
company’s leadership in innovation as
it has capacity to produce four different
qualities of cement to better serve
customers special requirements,” he
said. The new plant, a multi-billion naira
project, has its own 90 megawatts, MW
power plant, with its own dual-firing
system, so it can use both gas and liquid
fuel, AGO/LPFO.
W
ith its acquisition of Sokoto
Cement and Edo Cement,
BUA Cement Group, which
owns and operates Nigeria’s
first floating cement
terminal, has launched
itself into full-scale local manufacturing
of cement. The company has recently
built a cement factory, which will be
commissioned soon in the last quarter
of the year. It has also employed
modern cement-making technology
in the design and operation of the
plant to meet international standards.
Currently, there is a cement-bagging
plant being reconstructed inside BUA
ports and terminals. Abdulsamad Rabiu,
chairman, BUA Group, had promised
Nigerians in 2008 that he was poised to
drive down the price of cement prices
in the country. He explained, “The total
cost of production of a bag of cement in
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 COVER STORY

Nigeria is between N300 to N400 per bag,

but with the attendant challenges being
faced by manufacturers, this price is no
longer realistic, and that is why we are
all doing all in our powers to produce at
minimal cost to the consumers”.
Although the efforts of the
manufacturers have been commended,
experts believe they are not enough to
bring about a price reduction within a
short period of time. Indeed the marginal
reduction in the price of cement achieved
so far might soon be a thing of the past, as
it is feared that the price might assume an
upward dimension again very soon.

S
ome experts believe that current
reduction in the cement price
was occasioned by the rainy
season. “It is no news that price
of cement falls during the rainy
season, because not many people
are engaged in construction works,” says
Charles Anyadufu, a building contractor.
But he is quick to point out that the fear
that the price may fall as low as N1,000,
necessitated the reduction of the price to
about N1, 700 now. Ferdinand Aniagbaso,
a major cement dealer in Sagamu,
supported his view. He too said everybody
is waiting to see the effect of the directive
of the President, and as such are not buying
cement, as they may have wanted to. “This
is a classical case of demand lower than
supply. Many of those currently engaged in
construction have put a hold on it, pending
Bad road: Nightmare to truck
drivers and haulage companies
Okubena: Faults inconsistency in
government policies
the effect of the government’s directive,
and that is why the price has come down
a little bit. Even those who are selling are
complaining that they are selling at a loss,
because they bought the products at a
time when the price was high,” he added.
Ayo Oni, chairman, Portland Paints
and Products Nigeria, PPPN, has also
reiterated that construction activities
have dipped to an all-time low because
Ulvmoen: Government should quickly
address high cost of diesel
of government policy that does not
encourage primary mortgage institutions
to fund development.
Curiously, after the stakeholders’
meeting and the presidential directive on
the price of cement, the federal government
went to sleep. Nothing concrete has been
done by the government to alleviate
the challenges faced by manufacturers.
Stakeholders are, therefore, not surprised
that the price of cement has not
fallen to N1,000 because all the
challenges earlier articulated by
the manufacturers as reasons for
the price escalation, are yet to be
addressed by government.
For example, the issue of
reliable energy supply. The
estimated power requirement
for manufacturers of cement
is between 25,000 MW, to
30,000MW. However, the Power
Holding Company of Nigeria,
PHCN, generates only about one-
tenth of this requirement for the
entire country. That particular
challenge has been the bane of
manufacturers all over the country,
and the cement manufacturers
are the worse for it. “Tell me, how
do you operate maximally in an
atmosphere where everything
you use in the factory is operated
with power (electricity),” laments
Jide Mike, director-general,

BSJ, July 11, 2011 36 www.bsjournal.com

 COVER STORY
Manufacturers Association of Nigeria,
MAN.
“Your input will determine your
output because you still want to remain
in business. You cannot say because you
want cement price to go down, therefore,
you run at a loss. Price of cement will fall
if the country had a stable power supply”,
he laments.
In other words, the expectations of a
drastic reduction of the price of cement
by government, without recourse to
provision of power, which accounts for
half of production cost, is not realistic.
Mike: Price of
cement will fall
if there is stable
power supply
That is why, Olajuwon Okubena, chief
executive officer, Health Forever Living
Products, says government is only playing
politics with the price of cement. “I don’t
know what truly transpired between the
President and the cement manufacturers
at their meeting last month, but I do not
see how his directive will be adhered to
since infrastructure still remain moribund,
and no one has told us the incentives
government has put in place to help the
manufacturers achieve their aim,” he said.
Apart from the challenges of epileptic
power supply, the manufacturers still have
to contend with deplorable condition of
the roads across the country. The bad
BSJ, July 11, 2011
state of the roads is a nightmare to truck
drivers and haulage companies that
transport cement across the country. The
transporters are also contending with the
non-availability of diesel. “The high price
of diesel has hiked distribution cost, and
we are praying that government should
quickly address the issue of high cost of
diesel,” says Knut Ulvmoen, managing
director, Dangote Group. The high price of
diesel has taking a toll on manufacturers
who have to contend with high production
costs. For instance, MAN recently stated
that its members spent N37 billion on diesel
yearly. Breaking this down,
Reginald Odia, chairman,
Infrastructure Committee,
MAN, said members of the
association utilise 8.68
million litres of diesel weekly
to run their generators, while
N955 million is spent on
maintenance monthly, adding
that N3.12 billion is spent on
fuel costs. In all, he said a total
of N49,038 billion is spent
for both maintenance and
purchase of diesel.
Temitope Ogundokun,
head of communications,
Lafarge WAPCO Cement,
expressed similar concerns.
She told the magazine that the
increase in price of diesel was
having a negative effect on
the distribution chain of the
company as it added to the
cost of logistics. The cement
manufacturers have taken the
matter up with Pipeline and
Product Marketing Company,
PPMC, but all they got is a
promise that the body will
look into the problem. At the
moment, diesel price still
stands at between N155 to N165 per litre
in Lagos.
A
nother pressing challenge which
cement manufacturers face is
the exorbitant duties paid on
imported raw materials, and that
is why Isaac Agoye, chairman,
MAN Ikeja branch, is calling on
the federal government to implement
concessionary duty rates on raw materials
not available locally to cushion the effect
of the seemingly intractable business
environment.
There are those too, who are wary that
with the failure of government to address
37
Ogundokun: Increase in price of diesel
is affecting the distribution chain
some of the challenges that necessitated
the increase in the price of cement, the
manufacturers may try to cut cost by
reducing the quality of their products.
That same fear was expressed by the
Nigerian Institute of Architects, NIA.
According to the members “the attempts
by firms to maintain a profitability ratio
that will be additionally battered by other
equally unstable factors are likely to
translate into cost-cutting measures. This
will undoubtedly result in poorer quality,
unsafe structures that have less real value,
which is a recipe for disaster.”
But why is it difficult for the government
to address the extreme infrastructural
deficit, which feeds an even more extreme
production environment. Okubena gave
an insight. “When I say the government is
playing politics with its recent directive to
the cement manufacturers, I am actually
referring to all sectors of the economy.
There is inconsistency in government
policies, there are constant policy
reversals, and government is not sincere
in addressing some of the challenges
because it is not putting the right people
in the right place.”
For now, the price of cement has gone
down by about 25 to 30 per cent, but it is
not yet Uhuru for the users. Experts believe
that unless concrete measures are put in
place to address the myriad of challenges
faced by manufacturers, there will not be
any sustainable reduction in the price of
cement. So, the ball is in the court of the
federal government.
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