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The Air Transport
Services Senior Staff Association of Nigeria has expressed worries that
Nigeria may not attain the much coveted Category One status as a result
of “the high level of deficiencies” in the country’s aviation sector.

Speaking to
aviation correspondents during a press conference at the Murtala
Mohammed Airport (MMA), Lagos over the weekend, Benjamin Okewu,
president of the union said government’s failure to provide a national
carrier for the country will inhibit the attainment of the status.

“As far as my own
understanding is concerned, we can’t have category one, no matter how
we paint it to the world that Arik is a national carrier. We have told
them that we are in the International Travel Federation (ITF), and we
have told them that we don’t have a national carrier,” he said.

Mr Okewu argued
that the Nigerian Civil Aviation Authority (NCAA) should have carried
out a thorough certification of airlines in the country before it
invited officials from the International Civil Aviation Organisation
(ICAO) and the United State Federal Aviation Authority (US FAA) to
Nigeria last week as regard the issuance of the Category One Status.

The association’s
president said Arik Air is a flag carrier, adding that no country in
the world had attained the much coveted qualification with a flag
carrier.

“They are
positioning Arik as a national carrier but the truth of the matter is
that Arik is not a national carrier. It is a flag carrier and there is
no way you can attain Category one without having a national carrier
and we have made it known to the government. This is actually painful
no matter how they look at it,” he said.

Last week, the
civil aviation regulatory body in the presence of officials from US FAA
at the authority’s headquarters annex in Lagos, issued the first Air
Operator Certificate (AOC) to Arik Air, on the grounds that the carrier
has met all details requisite for the qualification.

On attainment of
Category One status, indigenous carriers in the country will be able to
fly directly from Nigeria to the United States of America, hence saving
travelers the stress of flying from Nigeria to another country before
getting a flight to America.

Aviation Minister interfering with sanctions

Commenting on the
minister of aviation’s 90 days in office, Mr Okewu said the minister,
Fidelia Njeze, came into office with appreciable zeal to work, but is
currently going the way of her predecessors by interfering with
sanctions to erring airlines by the NCAA.

According to Mr
Okewu, airlines that fail to remit prescribed charges to designated
aviation authorities are defrauding the sector, as he called for the
invitation of the Economic and Financial Crimes Commission (EFCC) to
investigate the matter.

“Passenger Service
Charge (PSC) is collected on behalf of NCAA by the airlines and when
you collect you don’t remit, the word is fraud. That is why we said the
government should look at it and the EFCC should come in because this
has been ongoing and people are not doing anything about it,” he said.

The issue of
airlines indebtedness to various agencies in the aviation sector has
been ongoing, with some of the carriers showing reluctance in the
prompt and accurate remission of charges meant for the agency.

Mr Okewu, however,
frowned at the inability of the Federal Airports Authority of Nigeria
(FAAN) to install air field lightings at the 18L (18left) runway of MMA
for over three years, stressing that it is unfortunate for the
authority to have a lot of engineers in its workforce but keep
employing the services of contractors.

“Go to FAAN today, they have more than ten qualified engineers; but
why is it that for every project they want to execute, they give it to
contractors?” he asked. “It is in the process of giving out these
contracts that they have all these political implications and these are
the major issues that are affecting to the operations of FAAN.”

Ahead of today’s
meeting of the central bank’s (CBN) rate setting committee (MPC), we
couldn’t have had a more useful intro, than the comments recently
attributed to the governor of the central bank on the likely direction
of the policy rate.

In an interview
with Bloomberg News in Basel, Switzerland, last week, Sanusi Lamido
Sanusi apparently saw scant new economic evidence in support of a
change in the policy rate.

According to the
CBN’s governor, “A rate cut at this particular moment in time doesn’t
appear to be necessary. There is no compelling imperative at this point
to review the interest rate stance”.

My first reaction
was to wonder at the rationale for the Monetary Policy Committee’s
meeting today. If a rate change is not imminent, and the CBN had gone
ahead to let this be known, how much of today’s meeting will be useful,
and how much just plain beautiful?

In respect of the
latter portion of this question, the meetings of the rate-setting
committee are statutory. So, there will always be a beautiful aspect to
its being convened. It helps that someone is attentive to the letter of
the law. How helpful such attention is to the spirit of the law is of
another level of difficulty altogether.

Here, there is a
sense in which the CBN governor’s utterance may have been antithetical
to the thinking behind the MPC being statutorily required to meet
regularly. One of the reasons for a regular meeting schedule, and its
advertisement, is the role that such certitude plays in anchoring
market expectations.

On this basis, it
is moot, whether by anticipating the result of this meeting the
governor has introduced a level of uncertainty into the policy-making
environment.But that he has introduced a fair level of confusion into
the process, there can be no doubt.

Are we now to look
to catching the central bank governor ahead of the rate-setting
committee’s meeting to get a sense of the policy direction? Or may we
still await the release of the communiqué after each MPC meeting? It
helps to remember that the communiqué was not always about the decision
on rates.

Of late, the
central bank has tried to use the rate-setting committee’s platform to
address the challenges of liquidity confronting the financial services
industry. And at its last meeting, it even went ahead to join the
ongoing debate over responsibility for kick-starting the economy, by
clarifying the distinction between monetary and fiscal policies, and
the effects of these on the process of credit creation.

Ordinarily, the MPC
meeting’s communiqué is a lot more useful for the insight it provides
into the thought processes behind its decisions. Arguably, the
communiqué could be a lot more useful down this path, including for
example by letting the public know who voted for and against the
respective decisions. But to the extent that one obtains a sense of
where the economy is at, and might be headed from reading the
communiqué, it has been handy.

As it is, the most
recent official data on the economy is for April this year. Against the
fact that in an economy where near-term volatility is a fact of daily
life, three months old data doesn’t even have a mantelpiece value, some
of us still look to the communiqué for its use of more recent economic
data.Then, there’s the chore of making sense of the economy.

Talking to those
who know, I’m told that two things matter here. The fact that
agriculture contributes a big chunk of domestic output; and the huge
weight of food in the inflation basket. These two dimensions of our
national life are so distant in their dynamics from the financial
services sector, that it does not help for an understanding of the one,
to look too hard at the other.

Consequently,
despite some of the loosest monetary and fiscal policies in recent
times, inflation is trending downwards. Some of us had also thought
that by now we ought to have started seeing signs of new lending. The
Banks’ need to repair their loan books was always going to be a let on
new loan book growth.

But it was almost
certain that in an election year, the fiscal account would have come
under pressure from the need to spend. It was inevitable thereafter
that some of this new infusion of cash would have driven demand for
credit.

Unfortunately, none of this has happened and we look to the MPC for useful explanation.

It
is tempting for companies to imagine that once they push financial
results, earnings releases and announcements of strategic moves out in
the public domain, their job is finished. The trouble with such
‘do-this-and-other-other-things-shall-be-added-unto-thee’ mind-set is
that when the anticipated results fail to manifest, companies blame
investors for not getting ‘it’. They insist that investors must fit
into their mold or nothing. All they want to do is ram information down
investors’ throats without bothering to learn how they react to that
diet. To aggravate the problem, on the few occasions they admit that
feedback is important, those saddled with responsibility for investor
communications at most public companies, often lack structured
processes for monitoring it. In fact, they are often unclear on what
feedback should be. But our discussion today goes much beyond the
creation of dashboards with fancy line and pie charts for the sake of
it. It drills right down to value of investor relations to public
companies from the board of directors’ point of view.

In the past year,
companies on the Nigerian Stock Exchange have taken important steps to
improve how they communicate with investors. No doubt, there is still a
long way to go but things are improving. In my interactions with
companies, I sensed a genuine interest among executives to facilitate
the flow of information to investors. Although, this has not always
translated to instant action, I put that down to the administrative
bogs that are normal in big organisations. One thing that has struck me
is the urge to push out more information to investors. There is a good
reason for this. In the past, investors had very little information of
relevance with which to assess companies on a prudent basis. Normally,
the momentum of a rising share price, enthusiasm of friends and the
slick marketing of their stock brokers was all the convincing they
needed. Few bothered to ask the hard questions or knew what those
questions ought to be. So it is not unexpected that after their
post-meltdown Damascene conversion, companies would be willing to go
the extra mile in providing information to investors.

This is a good
thing. But is it everything? When I look around, I see companies eager
to launch investor relations programs with a sole focus on pushing
information out to shareholders. This conception of investor relations
as information fulfilment probably almost guarantees that they will not
reap all the benefits they anticipate because there is no loop for
returning information on how the company ought to adapt behaviour to
better match investor expectations. It also explains why investor
relations is rarely accorded an appropriate position in the corporate
organisation chart. The US National Investor Relations Institute (NIRI)
definition of investor relations as ‘a strategic management
responsibility that integrates finance, communication, marketing and
securities law compliance to enable the most effective two-way
communication between a company, the financial community, and other
constituencies, which ultimately contributes to a company’s securities
achieving fair valuation,’ is very instructive.

Investor relation is a serving board

The point is that
the investor relations function should be serving boards as much as
investors with reports, analysis and research on what investors are
doing and thinking. A CFO needs to be able to call up his head of
investor relations and ask, ‘Why is our sector down this week?’ or ‘On
a scale of 10, how do investors in our sector rate revenues in
comparison with margins?’ The person responsible for investor relations
must know every analyst covering her sector and have all the research
they have published going back 12 months at least. She needs to know
why some analysts that cover her sector do not cover her particular
company. She has got to understand their valuation methodology and
influence among investors.

When woken from
sleep, the investor relations officer should know names of her top 50
shareholders, their investment styles, what other companies in the
sector they own and their orientation.

They also need to
know the top investors in their peers and if they do not own the
company’s shares, know the reason why. She needs to know how much time
management has to meet with investors three months in advance and
schedule meetings accordingly. These are just the beginning. There is
so much more.

Doing all this is no mean task. It takes time and resources to
produce results. Quite frankly, successful investor relations has the
two faces of Janus: one looking out serving investors and the other
looking in serving internal clients. Getting all As in pushing out
information but not sitting for the paper in providing boards with
invaluable insight is still a flunk. For companies, the message is
clear: in all thine giving information, be getting intelligence.

In spite of its enormous advantages, insurance is
still something that many Nigerians ignore, that is, until they need it. If you
rent a house, an apartment, or just a room, you might be assuming that your
landlord’s property insurance should cover damage to both the building and its
contents.

The typical home insurance policy will cover
damage to the actual building and its structure, that is, the bricks and
mortar; this is what a landlord is obliged to have in place to cover his
property. It will not protect your belongings though; it is for you to protect
your possessions.

Take an inventory of your
belongings

Estimate the value of your personal possessions
at current prices. This is the amount it would cost for you to replace them
with new items if they were damaged or destroyed. It is a good idea to take an
inventory, particularly of the expensive items, so that you can set a coverage
limit. Among the things to include in the inventory are electrical appliances,
indoor and outdoor furniture; musical instruments, laptop computers, and other
electronic equipment, camera, some recreational or sporting equipment; valuable
china, and silverware.

Some people go as far as to photograph or make a
video recording of their rooms and contents. This might be a little tedious but
a good photograph of furniture, electronic appliances and any significant
individual items such as a piano or other musical instrument a special CD, or
old record collection makes sense.

Keep receipts of items of significant value along
with your records as they may come in handy in helping you prove value should
you need to. It is useful to write down the brand names and model numbers of
the appliances and electronic equipment. Store the list, photos and any other
records away from the premises so that it isn’t destroyed if there is some
damage at your home.

Bear in mind that the values of your personal
belongings will change so you should revisit your policy each year when it is
due for renewal and adjust as necessary to ensure that you are always properly
covered

Is your jewellery
insured?

You might have some personal possessions that are
particularly valuable; list these specifically and consider paying for
additional cover on them. This could include jewellery, artwork, and camera
equipment. Many insurance policies offer very limited coverage for such items
so you should consider them specially.

Do you have adequate coverage for your jewellery?

Read your homeowner’s or renter’s insurance
policy carefully to find out the amount of coverage it provides for your jewellery;
what you need is insurance that will cover loss, theft and damage.

If you don’t list your jewellery specifically, it
will be included in your basic household policy under a blanket coverage, which
usually comes with a limit. You may choose to add a rider to your homeowner’s
policy to cover jewellery that is above a certain value. If your jewellery is
extremely valuable, it makes sense to opt for a separate policy that covers
significant pieces, this way you can insure such items for higher amounts than
you would ordinarily be able to do under a basic household policy. Naturally
you would be paying a higher premium for such items.

Sentimental value

We all have some possessions that no money can
replace; these are things that have sentimental value as opposed to monetary
value, such as the memories found in family photographs, certificates of
achievement and so on. Your insurance policy will not cover these but for some
of such items, you can take some practical steps to protect them by scanning
and saving such documents and photographs electronically.

You sometimes hear people say that they don’t have anything worth
protecting; yet imagine the cost of furnishing, replacing appliances and having
to purchase a new wardrobe? Do a rough calculation of how much all your
possessions are worth and you will probably find that the premium is a small
price to pay for the peace of mind from having your belongings insured. Whether
you are a landlord or a tenant, home insurance is an important part of your
personal financial management, particularly if the worst does happen. And, make
sure you know where you kept the policy.

Ghana achieved an
economic landmark on Wednesday as annualised June inflation fell to
9.52 percent, the first time the key indicator dipped into single
digits since April 2006.

That was down from
10.68 percent in May and was the 12th consecutive monthly fall,
prompting hopes of a further cut in the 15 percent prime rate on Friday
after the Bank of Ghana holds a rate meeting.

“A rate cut of at
least 100 basis points is very much on the cards. We would not be
surprised if we saw a lot more,” said Razia Khan, head of Africa
research at Standard Chartered bank.

The government of
the world’s No. 2 cocoa producer said it hoped the pace of inflation
would continue to slow in the coming months, adding that it expected
little impact from a hike in utility prices and public sector wages.

“Presently we don’t foresee anything that will offset this trend,” said Grace Bediako, government statistician.

The utility price
and wage hikes were not fully reflected in the June inflation data, but
would likely show up in the July figures which will be released next
month, a source at the statistics office said.

Finance Minister
Kwabena Duffuor said the decline in the pace of inflation was a “major
achievement” and added the government was committed to policies that
would allow for further decreases in interest rates.

Outlook clouded

Ghana, which is
also Africa’s second-biggest gold miner and due to become an oil
exporter by the end of the year, is eager to transform its
aid-dependent economy and is hoping that a low prime rate will spur
more business activity.

Fiscal
belt-tightening and a stabilisation of the cedi currency has
contributed to steep declines in the pace of inflation from peaks over
20 percent in 2009, and paved the way for the central bank to trim
rates three times since November.

Six out of seven
analysts polled by Reuters said they expected the Bank of Ghana to cut
rates by another 50 to 100 bps this week, though several noted concern
about potential inflationary pressures in the second half of the year.

Bediako said a 42
percent hike in electricity prices and 21-135 percent hikes in water
rates, which started to roll out across the country last month, were
unlikely to affect inflation because utilities make up only a small
part of Ghana’s consumption.

“The weight is about 3 percent and overall it cannot make any significant impact,” she said.

She added a 10 percent pay rise for public sector workers set for this month was also unlikely to push up consumer prices.

Analysts have said
both the utility hike and the public sector wage increase have the
potential to reverse the disinflationary trend.

“We see inflation
rising sharply over the second half of the year, not just due to base
effects, but also owing to currency weakness as well as recent
increases in electricity tariffs and public sector pay,” said Lisa
Lewin at Business Monitor International.

Analysts said oil revenues could also boost consumer prices.

Zambia plans to
boost its exports to the Democratic Republic of Congo to more than $2
billion this year from $1.2 billion in 2009, taking advantage of the
flexible trade terms, Trade Minister Felix Mutati said on Thursday.

Mr. Mutati said
exports to the DRC, Zambia’s largest trading partner in the African
trading bloc COMESA, had continued to increase because there were no
restrictions on goods it could export to its neighbour.

“The advantage of the DR Congo is that the range of exports is from
agricultural products through to processed items, machinery and
literally anything we can produce in Zambia,” he said at a media
briefing.