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It is the desire of every parent, to educate their children and to see them move on to become self-sufficient. With today’s challenging global economy, however, there is a huge increase in the number of grown ups having to depend on parents when the real world becomes too tough to cope with. Described as ‘the worst job market in a generation’, huge numbers of graduates face more economic uncertainty than their parents who were born at a time of relatively greater opportunity and promise.

A challenge of 21st century parenting is the sheer number of dependent adult graduates. The question is, have today’s parents raised a generation of spoiled young people who are unable to cope with the real world? Are we perpetuating the ‘Boomerang Generation’ phenomenon, which has seen parents welcoming adult children back home after university, paying off their debts, keeping their mobile phones funded, and paying all their bills? Or, is today’s world just so difficult that they are unable to make their way without our assistance?

What stage are your children at? Have they completed their education? Are they looking for jobs? Have they started work? How much do you continue to support them? Do you give all that they ask for or just a part. Will the money help them to become more self-sufficient or will it just lead to more and more requests for help? The answers will vary from family to family. Consider these scenarios and see where you fit:

• You feel that your financial obligations end when your children graduate

• You support your children financially, and expect to do so for the rest of your life

• You will give your child the first few month’s rent and a security deposit for a new apartment and then they are on their own

• Your child can continue to live at home rent-free and doesn’t need to contribute to any of the household expenses.

• You will set them up in an apartment which you will fund until they are on their feet

• You have educated your child and will not give any further financial support, either because you cannot afford to, or you choose not to.

When should you step in and when should you hold back?

Take the time to analyse the request carefully, particularly if a significant sum is required. Is there a genuine need? If they desperately need the money for an important, legitimate need and you can afford it, then there is no harm in giving or lending as the case may be. Most parents would not mind stepping in during a true emergency, such as if a child or grandchild needs medical care, or school fees must be paid to keep children in school.

The implications for your retirement

It is wonderful to be able to support your children but, at what cost to yourself? For many parents, continuing to financially support adult kids who return to the empty nest could have serious consequences for your financial future, particularly your retirement. If you sit down to actually assess the numbers in terms of how much longer you must continue to earn, it puts it into perspective. Remember you need to look after yourself so that you do not become dependent on them in later years.

Family dynamics

Every child is different. Take a good look at each of your children’s money personalities. In the same family, you will discover that various children deal with money matters differently. You find one child has been frugal from their earliest years, whilst another who is a spendthrift and extravagant, feels that you owe them a living. Some children are simply unwilling to accept that they may need to take a step down on the economic ladder when they leave home. Indeed, many young adults seek to imitate their parent’s lifestyle that has taken nearly a half-century to build.

Emotional and psychological aspects of financial aid

Be aware of the emotional repercussions for the whole family, of financial aid. If the handouts are jeopardising family relationships and family finances, then things need to change. When adult children constantly demand and receive money, there may be feelings of dependency that this creates, which can lead to resentment. Parents too may feel resentful, about being constantly pressured to provide.

The psychological dynamics get even more complicated if some adult children are getting help while others aren’t. You find families where for example two self-sufficient sons deeply resent the hundreds of thousands of naira being given to their spoilt sister; the brothers may have concerns that they are being penalised for being financially responsible.

Does helping do more harm than good?

There is a fine line between helping and spoiling your children. How much are you really helping by keeping them dependent on you? If your children know that they can always come back to you for a bail out, they may never learn how to deal with financial setbacks or how to manage their own money. Studies show that the more dependent children are on their parents, the less able they are to be economically self-sufficient.

Of course it makes smart economic sense for a child to move back home where life is comfortable and rent is usually nonexistent. But by allowing adult children to live at home free of charge so they can spend more money on travelling and eating out is not teaching them financial responsibility. At a minimum they should be encouraged to cover some basic expenses whilst putting away some savings to prepare them for the realities of starting out on their own.

Help your child to be self-sufficient

Even if money is no object for you, make an effort to wean your child off you financially, and consider ways to help them become more self-sufficient. If you are going to help a child pay off mobile phone or other debt, put something in writing clearly stating the terms including interest and repayment schedule. Clear expectations and definite limits are always better for all parties involved. Adult children also need to know in advance when financial aid will begin to be withdrawn and may eventually stop.

Saying no is one of the most difficult things for a parent to do, but sometimes you have to step back, take a deep breath, and let whatever happens, happen. Even if some pain results, your child may just learn some valuable life lessons before its too late. They might not appreciate it now, but remember that your efforts to make them financially self-sufficient will ultimately result in more balanced, more purposeful and more empowered adults; the alternative can be grim.

Nigeria’s
effort at domiciliation of the petroleum industry operations through
the Nigerian content policy appears to be yielding the desired
dividend, as key multinational operators have started deploying locally
manufactured pipes in their fields.

American
energy giant, ExxonMobil, has pioneered the use of made-in-Nigeria
pipes in its operations, with plans to deploy Helical Submerged Arc
Welded (HSAW) pipes fabricated by SCC Pipe Mills for its Usari-Idoho
pipeline replacement project in Akwa Ibom State.

The
pipes will be used for the replacement of the 24-inch oil pipeline
connecting the Usari and Idoho platforms, located in the company’s
shallow water oil fields in water depths of 21 metres.

The
feat, which would pave the way for made-in-Nigeria pipes to be used for
an oil and gas project in the country by any international or local
operating company, is expected to unlock investments in pipe mills and
other oil industry support facilities.

Executive
Secretary, Nigerian Content Development and Monitoring Board (NCDMB),
Ernest Nwapa, said at the weekend at a meeting with representatives of
China’s major welded line pipe maker, Jiangsu Yulong Steel Pipe, led by
its director of sales, M. A. Abbas, that a number of investors have
already firmed up plans to establish pipe mills and related facilities
in Calabar in Cross River, as well as Koko and Gbaran Ubie in Delta
State.

What
is delaying the Final Investment Decisions (FID) of these investors,
Mr. Nwapa said, were concerns by SCC that products from its pipe mill
in the country was not being patronised by the industry.

He
described the use of SCC pipes by Exxon Mobil as a breakthrough in the
implementation of the Nigerian Content Act and a strong signal that
government, assuring that investments in the country’s oil and gas
industry in support facilities, would be protected and patronised.

Nwapa
urged serious investors to speed up the pace of execution of their
projects by taking advantage of the Nigerian Gas Master Plan (NGMP)
infrastructure project and the Calabar-AKK pipeline project being
promoted by the Nigerian National Petroleum Corporation (NNPC) on
behalf of the Federal Government.

Minister
of Petroleum Resources, Deziani Alison-Madueke, said two weeks ago, at
the inauguration of the NCDMB governing council by President Goodluck
Jonathan, that the steadfast implementation of the Nigerian Content Act
would lead to the establishment of three to four new pipe mills and
other ancillary manufacturing plants in the next four years to service
the demands of the industry.

According
to Mrs. Alison-Madueke, the Federal Government’s vision is to retain
over $10 billion out of an average annual oil & gas industry
expenditure of $20 billion in the Nigerian economy, compared to the
current sum of less than $4 billion.

The
Usari-Idoho pipeline replacement project is being executed by Saipem
Nigeria for ExxonMobil, with extensive tests carried out on the pipes
both locally and overseas to confirm that they met all required
technical specifications.

With
the confirmation that the pipes fabricated by SCC met all international
standards, the Executive Secretary pointed out that there was no reason
why other operating companies in Nigeria would not join in sourcing
their pipes from the company and other proposed pipe mills across the
country.

Nwapa
also noted that NCDMB had insisted that any of the proposed Nigerian
pipe mills with the capacity to meet the project schedule of the
Calabar-AKK pipeline project or any other project in the petroleum
industry would be fully utilised before any quantity could be imported.

Although
the SCC pipe mill has a capacity of producing 30,000 tons at a time and
an annual capacity of 100,000 tons, the only order placed in the
factory since it was upgraded was three years ago, with about 6,000
tons by Exxon Mobil in 2007.

Though
Shell Petroleum Development Company (SPDC) and Nigerian Agip Oil
Company (NOAC) are reportedly processing orders for supply of line
pipes from the SCC mill, Mr. Nwapa charged other operators to toe the
same line in order to encourage keen investors to progress their pipe
mill construction.

At
the meeting between NCDMB and representatives of Jiangsu Yulong Steel,
it was gathered that an agreement was reached to set up a joint
NCDMB/Julong project team that will work on the proposed movement of
the company’s 250,000 tons longitudinal submerged arc welded pipe mill
to Nigeria.

Consumer inflation
rose to 13.7 percent year-on-year in August from 13.0 percent the
previous month, the National Bureau of Statistics said on Friday.

Growth in food
prices, which form the bulk of the inflation index basket, also rose to
15.1 percent year-on-year from 14.0 percent in July. The Monetary
Policy Committee (MPC), which has repeatedly voiced concern about
inflation, is due to meet on Tuesday to review the country’s benchmark
interest rate, which has been on hold at 6.0 percent for more than a
year.

Central Bank Governor, Lamido Sanusi, told Reuters, on Thursday,
that weak bank lending was a “major worry,” and that although he wants
single-digit inflation by the end of the year, the central bank will do
nothing to jeopardise economic growth. He noted, however, that higher
government spending, with elections due next January, and the
establishment of the Asset Management Company to soak up bad bank loans
should help put more money into the system, meaning the inflation risk
was not zero.

Professionals in
the telecommunication sector have frowned at the killing of six staff
of MTN Nigeria at the firm’s Base Transceiver Station (BTS) site in
Aba, Abia State.

A project manager
of MTN in Aba, one Valentine, explained that the incident took place
last week while the staff went to work at the site.

“This is to inform
you that our team of engineers went out to work at Gabby Oil, Aba Road,
Aba, Abia State, and while working on the generator, four gunmen walked
into the BTS site while the team of engineers were waiting for the RBS
to load after bringing up the generator and held them at gunpoint,” Mr.
Valentine said in a report to the company’s head office.

“One Petrolseal
engineer, two Mopol men, the rigger, and the security man were killed
outright while the second Petrolseal engineer died on arrival at the
hospital,” he said.

Titi Omo-Ettu, the
president of the Association of Telecommunication Companies of Nigeria
(ATCON), said in an email message that the murders are shocking.

“Nobody living in
Nigeria can pretend that this is a new development, but this certainly
is one murder too callous to be regarded as one of the usual stories.
We commiserate with MTN and with the families of the murdered persons,”
he said.

Government must act now

Mr. Omo-Ettu,
however, said the increase in criminal activities in the country shows
that the government is helpless and must act now before it loses its
relevance.

“We invite
attention of the Federal Government to these murders and kidnappings,
which is now blatantly portraying government as helpless. The essence
of governance is now appearing to be meaningless while living and
investing in our country may be becoming anathema to all peoples of the
world,” he said.

“Our association
pledges to do all things possible to assist the police in investigating
this incident and we invite the attention of the new Inspector General
of Police to the need to see this as one case which requires speedy
investigation and prosecution of those found culpable, as this will
determine where we go from here. Criminal acts of this nature have been
encouraged because perpetrators are hardly ever caught and prosecuted,”
Mr. Omo-Ettu said.

Enough is Enough

Telecom operators
have reported that security is a major challenge to them, as their BTS
sites are constantly vandalised by hoodlums.

In a press
conference last week, Gbenga Adebayo, the president of the Association
of Licensed Telecommunication Operators of Nigeria (ALTON) said apart
from the recent shutdown of some BTS sites around the country, some
equipment at the sites are constantly vandalised and stolen. He said
this affects national security as well.

“Peace, investment,
life, and living, have now been threatened to a level that makes it
necessary to invite the president, Goodluck Jonathan, to please
intervene urgently,” Mr. Omo -Ettu said.

“Enough is enough, and a country that seeks the loftiest theme of vision 20-2020 cannot continue to go on like this,” he said.

Only two personnel
survived the armed attack at the BTS; one Ericssion engineer and his
driver hid behind the RBS units in the site, so the fired bullets
missed them.

Mobil Producing
Nigeria (MPN) has dragged some members of its host communities to an
Eket High Court for failure to meet repayment obligations under a micro
credit scheme initiated in 2002.

Media investigation
revealed that N132 million was advanced to 50 cooperative societies and
19 individuals by Mobil in its area of operation.

The investigation also revealed that N92.6 million remained outstanding in the 73 loan applications approved.

The micro credit
scheme funded by Mobil was aimed at stimulating economic development in
agriculture-related fields like fishery, poultry, and animal husbandry.

The benefitting communities included Eket, Esit Eket, Ibeno, and Onna council areas in Akwa Ibom.

Libya’s two
state-owned airlines, which have been spending millions of dollars
expanding their fleets, hope to win government approval next month to
merge, the head of the carriers’ parent company told Reuters.

Libyan Airlines and
Afriqiyah Airways have been in negotiations about a merger for several
years, but the plan has been repeatedly delayed.

“The decision will
be announced by around mid-October … Afriqiyah and Libyan Airlines
will be one company,” Sabri Shadi, chairman of the Libyan African
Aviation Holding Company (LAAHC), told Reuters in an interview.

Egyptian garment
maker, El Nasr Clothing & Textile Co. (Kabo), is targeting sales of
180 million Egyptian pounds in the fiscal year 2010-11, the firm said
in a statement to the bourse on Sunday.

The statement
reiterated that the sales target for the new fiscal year, which begins
on July 1, is a 15 percent increase on the company’s sales in fiscal
year 2009-10. Chairman, Amr El Sharnoubi, had previously told Reuters
sales were expected to rise by that amount, but he did not provide a
specific sales figure at that time.

Kabo, one of the
earliest Egyptian companies to be privatised, makes underwear,
nightwear, and outerwear for men, women, and children in the middle-end
market.

Kabo reported a net
loss for the year to the end of June of 13.3 million Egyptian pounds.
The firm’s shares were trading 3 percent lower by 0956 GMT.

Zambia will make
fuel prices uniform across the country, to cut the cost of doing
business in remote areas and boost rural development in Africa’s
largest producer of copper.

The southern
African nation’s energy regulator said on Saturday that petrol will
cost 7,639 kwacha per litre, regardless of where it is sold.

Previously, the
price of petrol and other fuel was higher in remote areas, due to the
distance from the country’s only petroleum refinery.

The changes, which
go into effect at midnight, will mean an 8.9 percent decrease in the
price of petrol in the regional capital furthest from the refinery, the
regulator said.

Zambia in May
raised the price of fuel by an average 13 percent following another
increase of 15 percent in January, which the ERB attributed to higher
global prices.

Although the market
attempted a recovery during the week, the bear still ran off with good
portion of what it snatched from the market. The index opened the week
on a bearish note and continued through the second trading day while a
weak recovery of the bull returned 0.22% back to the market on
Wednesday. The bear strongly returned on Thursday taking another 1.39%
and went flat on the last trading day of the week. Putting the week’s
opening and closing figures side by side, NSE ASI closed in the red by
3.44% or 809.02 points from 23,802.79 points to 22,993.77.

The market
capitalisation of the listed equities equally closed low at N5.634
trillion. NSE-30 Index shed point equivalent to 3.20% from 994.19 to
962.77 points. All the four sectoral indexes depreciated.
NSE-Food/Beverages moved from 770.54 to 719.45 losing 6.81%.
NSE-Banking dropped 4.30% of the opening figures of 344.50 and wrapped
the week’s transactions up at 329.89. NSE-Insurance closed in the red
by 6.25% at 161.25 points against the opening 171.74 points.
NSE-Oil/Gas closed at 337.90, having dropped 6.96% from the opening
337.90 points.

Technical view

On 9/17/2010, NSE
closed below the lower band by 5.8%. Although prices have broken the
lower band and a downside breakout is possible, the most likely
scenario is for the current trading range that NSE is in to continue.
Bollinger Bands are 62.00% narrower than normal. NSE is currently
experiencing very low volatility as compared to its normal range. The
probability of volatility increasing with a sharp price move is likely
in the near future. The current trough of R-squared is greater than the
previous trough. This indicates strength of the long term trend. NSE
closed down by 809.0195 at 22,993.7695 on volume of 24.48% below
average.

Performance for the week

The market recorded
a turnover of 1.334 billion shares valued at N16.01 billion in 29,656
transactions for the week. The banking sector emerged the most active
during the week with 867.40 million units of shares that was chiefly
boosted by volume on the shares of Guaranty Trust Bank Plc, First Bank
of Nigeria Plc, First City Monument Bank Plc, and Zenith Bank Plc.
Volume in the sector accounted for 65.01% of the volume on all equities
through the whole week. The insurance sector’s volume was boosted by
trading on the shares of AIICO Insurance Plc, Intercontinental Wapic
Insurance Plc, and it followed on the week’s performance with 86.61
million shares in 1,006 deals. Recall that volume in the insurance
sector was topped by AIICO Insurance in the previous week.

Percentage gainers and losers for the week

A total of 70
stocks shed from their opening prices while only 19 equities gained and
112 closed on a flat note. Rating in terms of percentage gain/loss,
Afromedia Plc, tops the gainers’ chart with 15.69%, followed by Vono
Products with 13.64%. Ashaka Cement closed at N25.26 having gained
8.88%, Lafarge Wapco, Ikeja Hotel, and Berger Paints followed with
8.57%, 6.19%, and 4.99% respectively.

Due to price
adjustment for dividend and bonuses (as applicable), Academy Press and
7-Up top the losers’ chart with 26.00% and 22.65% respectively. Profit
taking activities further dipped the price of Intercontinental Bank by
21.51%, while Spring Bank, Oceanic Bank, and Dangote Flour followed
with 20.83%, 19.15%, and 18.44% respectively.

Corporate action for the week report on the over-the-counter market for fgn bonds

A total of 193.3
million units of bonds worth N186.61 billion exchanged in 1,801 deals
were transacted in the concluded week in contrast to 141.71 million
units valued at N129.01 billion crossed in 1,257 deals during the week
ended Tuesday, September 7, 2010.

Measured by
volume/turnover, the 10% FGN July 2030 series was the most active with
a traded volume of 44.1 million units worth N39.185 billion and
exchanged in 387 deals. It was followed by 4% FGN April 2015 series
with a traded volume of 421 million units valued at N35.98 billion in
275 deals. Eleven (11) of the available thirty-seven (37) FGN Bonds
were traded in the week covered against ten (10) recorded in the
previous week.

Dangote flour mills plc

The milling heavy
weight, Dangote Flour last week reported its belated Q4 ‘09, Q1 ‘10 and
Q2 ‘10 results to the market. Indicators revealed improved performance
over comparable periods in 2008 and 2009. Lead measurable indexes
recorded double digit growth (see below table). For Q4 ‘09,
profitability index grew by 26.96% resulting in FY EPS growth of 85% at
111k. Latest Q2 ‘10 results show a low PE multiple of 15.9 at market
price of N14.60 last week Friday.

The board of
Dangflour are recommending dividend of 50k per share to shareholders
resulting to a dividend yield of 3.42%. Recall that an interim dividend
of 30 kobo was paid earlier in the year. The company book closes on
September 20, 2010 while payment date is fixed on October 25, 2010. The
Annual General Meeting (AGM) is scheduled to hold at Tahir Hotel, Kano,
on Wednesday, October 6, 2010.

Conoil PLC

The directors of
Conoil Plc reported its overdue FY 2009 results to the market last
week. The performances index showed mixed growths. Sales revenue within
the period plunged by 18% while PBT and PAT grew by 15.3% and 26.96%
respectively. Shareholders funds equally went up by 13.6%.

Despite the fact
that the company faced challenged business environment in 2009,
performance ratios showed appreciable improvement against 2008 figures.
EPS and net profit margin grew moderately at 27.1% and 2.3%.

A dividend of 150 kobo per share has been recommended to
shareholders. Shareholders’ register closes on October 4, 2010 while
payment date is November 2, 2010.

When last week the
Central Bank of Nigeria (CBN) announced changes to the relationship
between banks and their external auditors, the best interpretation of
this development was that the apex bank was continuing its re-design of
the nation’s financial system. By requiring banks to replace external
auditors that have been with them for more than 10 years (“including
years spent with constituent legacy banks”), the CBN aims to upset the
cosy relationship built up over the years between the banks and their
auditors. On any account, it is safe to assume that the familiarity
that would have arisen because of such long-term relationships would
engender levels of complacency inconsistent with the need for banks’
books to truly and fairly reflect the state of their operations.

By compelling banks
to regularly change their external auditors, hope is that the
industry’s statements of its activities will be useful inputs into
policy-making, and that we may be spared a repeat of the shock that
attended the result last year of the CBN’s special audit of the
industry. As part of the process of strengthening corporate governance
practices elsewhere, other authorities further require that external
auditors may not provide, contemporaneously, with their audit
assignments any non-audit services. The idea being that considerations
of the larger fees from this non-audit work may not blind the audit
function to its need to be fair to investors in these businesses.
Indeed, in the United States, it is unlawful for the lead (or
coordinating) partner in an audit firm (i.e. one responsible for the
audit) to remain in this role with respect any one client for more than
five years.

Arguably, practice
in matters of this nature (laws/regulations and the enforcement
mechanisms designed to guard the electorate/consumers/shareholders
against abuse by their respective agents) will depend on local
constraints. Nevertheless, it is a great advance that local statutes,
rules, and regulations are being elevated to the levels obtainable in
other places where things appear to work better. This is important,
because rule-governed behaviour, together with efficient enforcement
structures will be indispensable to the collective efforts at moving
this economy forward.

Or isn’t it?
Something about the CBN’s directive on external auditors raised
hackles. It matters that the directive was made consistent with the
“provisions of paragraph 8.2.3 of the CBN Code of Corporate Governance
for Banks”. This code, which came into effect on April 3 2006, provides
that “The tenure of the auditors in a given bank shall be for a maximum
period of ten years after which the audit firm shall not be reappointed
in the bank until after a period of another 10 years.” The key question
is why it has taken the apex bank the better part of four years to
implement a sub-section of what was then considered a key advance in
the nation’s corporate governance space.

Those who are
familiar with the evolution of this code might find an answer of sorts
in section 5.3.10 of the code. When this code first came out as an
exposure draft on January 5 2006, this section read thus: “The tenor
for directors should be defined. In order to ensure
continuity/injection of fresh ideas, it is recommended that no director
should remain on the board of a bank continuously for more than 3 terms
of 4 years each, i.e. 12 years”. Within the context of the central
bank’s argument, in the same document, that the overbearing influence
of chairmen or MD/CEOs (especially in family-controlled banks), and
sit-tight directors (even where such directors fail to make meaningful
contributions to the growth and development of the bank) was a major
corporate governance worry, this was considered a useful provision.

However, by the
final incarnation of the code, this provision had mutated to read: “In
order to ensure both continuity and injection of fresh ideas,
non-executive directors should not remain on the board of a bank
continuously for more than 3 terms of 4 years each, i.e. 12 years”.
Obviously then, some directors were able to persuade the central bank,
that at the root of this particular problem were the non-executive
directors, and not the fat cats of the executive variety.

How much of enforcement in this country is the result of such
special interest advocacy? And how many other provisions of the code
(the need for two independent directors, for instance) has the CBN been
remiss in enforcing?