Obudu Ranch, Another Bermuda Triangle?

The Hausa/Fulani aircraft engineer, who had been lamenting the death of Nigeria Airways at the hands of military and civilian ex-presidents in some our past editions, is now here lamenting the sheer complacency that had led to two air-crashes en route Obudu Ranch, Cross River State. “This reminds one of Bermuda Triangle…,” he says.  Jonah Etufunwa reports the chat between FORTUNE & CLASS Weekly and the retired engineer.


Is Obudu Ranch, now a kind of Bermuda Triangle?

Out of sheer complacency, we are creating one. Planes do not fly in the sky (in the void) Take-off and landing of any plane go with some fundamentals: predicting the weather, the control tower, aerial navigation, etc. For safe flight (take-off and landing), all the fundamentals are non-negotiable.

Do our airline operators, civil and military observe these fundamentals?

To their best, they do, because they value their lives and that of the passengers. Mind you, the first law in aviation is safety, like we used to say in school of aviation. There are brave young pilots; there are no brave old pilots’

What do you mean?

You can’t defy nature. The mind may be  willing, but the reflex may not be there because of age. In spite of modern technology, man has to be in the cockpit for passenger confidence to be there.

At what age should a pilot retire, does it mean it is the younger the better?

Medicine and good living have improved life-span from 60 to 65 now…

How do all these affect the two aviation tragedies at Obudu Ranch?

Ours is a need neglected

What need had been neglected at Obudu Ranch?

Obudu is nature’s beauty charming the elite, yet like several other airstrips, the necessary things have not been done. And this negligence has proven expensive. Cream of our generals lost their lives to this national odious negligence.

Were the aviation professionals not aware of these facts before the ill-fated flight of the generals from Abuja to Obudu?

Our generals were gathered from all over the country at Abuja and finally, Makurdi. The military air-flight operators were aware. But you see, in Nigeria, orders from above sometimes would demand you doing the impossible. And familiarity can breed contempt.

What do you mean?

Here, presumptuous familiarity with the weather can just be misleading. In spite of all the instrumentations in the aircraft, bravery and acumen of the flight group, God’s mercy, often save the day, but it wasn’t so with the two tragedies at Obudu; these incidents make it look like Bermuda Triangle where anything on air or sea disappears without trace at this spot. The ability to find way around the skies, pilots need to know their position and their direction. Finding direction using simple magnetic compass, is easy and there is, at least, one of these on every flight deck. Other kinds of aircraft use gyroscope (rotating wheel, the axis of which is free to turn in any direction and which can be set to rotate in any place independently of forces tending to change the position of the axis).

The modern aircraft compasses are complex and highly efficient. You see, finding position is more difficult for a pilot than finding direction, hence the need for complex aids on the ground to air.

What went wrong with the generals’ flight?

The pilot must have flown there severally without mishaps. You see, oldest and simplest form of aerial navigation is still used by pilots of light aircraft that depends on ground recognizable landmarks. The pilot pilots his track on the map before take-off and using his compass, will simply fly in the right direction.

Knowing his speed can enable him calculate when he should fly over certain landmarks and so he can check his progress.

But wind, carrying the aircraft off course, or possibly causing sudden speed ups of slowdowns, can upset such simple navigation. However, by relating to last known position, to the direction he has flown, than the speed, the pilot is able to determine an approximate position several times during the course of the flight.

This then creates a kind of circle called ‘circle of uncertainty’ whose radius is said to be about ten per cent of the distance flown since the last landmark. A seasoned captain in that ill-fated air-flight, who must have flown that route severally, must have encountered adverse weather phenomenon of some sort that is avoidable if only radar coverage was accorded that air-strip.

Was lack of radar coverage a cause of the air-crash?


Right now, is there radar coverage at Obudu Ranch?

There are several air-strips nationwide without radar coverage, but the potential of Obudu Ranch, should accord it that little privilege.

Is radar coverage financially prohibitive that Nigeria cannot afford it?

This only reminds me of a statement created to Collin Powell that ‘Nigerians are basically scammers.’ You’ll recall that N300billion was budgeted for road repairs sometime ago, but only a 100 and something billion was eventually released. A case of neglect on the part of government to see that our roads are repaired! What happens on the ground in Nigeria also happens in the air, because we have lost value for human life; which is really tragic.

Talking about negligence of our roads, do you think Ore to Benin Road, does not need an urgent declaration of state of emergency?

It’s like something is wrong with us black people south of the Sahara. We’re caged by land, see and air. And we cannot develop without ease of transportation in those areas. Talking about air, where is Air Afrique, Ghana Airways, Cameroun Airways and Nigeria Airways. In spite of the endowed human and natural resources of the respective nations, such vital colonial legacies could not be sustained, let alone be improved upon. Glaring economic trapping by seas, land and air, in whose interest? Certainly, not national interest!  Surreptitiously, the Nigerian National Shipping Line eventually disappeared, and to date, Nigeria Railway is on the verge too. They all died at the hands of civil war heroes who would have appreciated transport system without which they would not have won the war. They killed the system with their own economic warfare against Nigerians. IBB with his SAP; Obj with his belt-tightening as military head of state and with his reforms as a democratically elected president with tacit backing of IBB, both contributed to our present economic malaise.


Despite continued assurances made by Central Bank of Nigeria’s Governor, Prof. Chukwuma Soludo restating the healthy state of Nigerian banks, reliable banking industry sources have indicated otherwise.

The sources warn that many commercial banks’ risks exposure is quite high, this, the sources averred is responsible for the growing tension in banking operations in the country.

“Of course, most banks keep issuing spectacular financial results, declaring huge profit after tax. But we can tell you that all you see are mere accounts engineering for which financial sector regulatory authorities should be held responsible.

“It is unfortunate that the auditing processes of companies have not been criminalized, if they are, all the shenanigans happening in the banking sector would have been exposed. We can tell you that several banks have lost there shareholders funds. The same capitalised funds that the CBN Governor is hailing as the proactive measure of consolidation that have supposedly saved the Nigerian banking industry.

“But have you ever imagined to the dividends several banks declare at their year-end? If you look at their books properly, they morphed the supposed dividends in their assets account. Yet what the requirement is that funds attributable to dividend should be set aside and, indeed, forwarded to the registrars for onward delivery to shareholders.

What some of the banks do, however, is to transfer some funds to the registrars, which usually are under their direct supervision because they are the banks’ subsidiaries. The registrars just make a show of posting dividends, but then, what you will soon hear is unclaimed dividends. The truth is that the dividend warrants were not dispatched in the first sense.

“Again, So many concerned Nigerians are looking to commercial banks exposure to the stock market as the next likely cause of distress in the Nigerian banking industry, yes, we agree that the stock market may be a possibility, but more than the eventuality we expect from continued worries arising from banks’ risk exposure in the capital market is the heavy exposure to fraudulent credits granted to some highly rated Nigerian and foreign businessmen that have become more or less moribund.

“We can tell you of a celebrated businessman who owes several banks a total of about N412billion debt and as the days pass it is becoming increasingly impossible to recover the sum from him. Besides, there is another gentleman who recently stormed the petroleum products marketing sector. He secured a facility of more than N50billion to finance his diesel supply business and joined other top players in the market to slash price for competitive advantage. But now, the situation have turned bad for him, again it is becoming increasingly bad for him.

“A Nigerian branch of the group of companies owned by an Asian ranked in the list of the world’s ten richest people had on the strength of the track record of the wealthy individual behind the company wracked up about N92billion facility form different Nigerian banks. For this individual, the slide in the global financial market has badly affected his business empire that he is to talking about official bankruptcy. With such a situation what is obvious is that it would become near impossible to repay the facilities secured from Nigerian banks.

“We qualify most of the facilities so secured by these businessmen as fraudulent because the processes of securing are often compromised. We have investigated how conniving accounts officers of some of these banks compromise the whole process of risks and collateral valuation. These account officers are usually promised a percentage of the amount to be loaned out; they forward favourable reports to the management, again, there are members of the management who are insiders to these compromised processes; they easily approve the reports for their personal gains.

“What all these boil down to is that if the CBN Examiners properly conduct the review of the books of most of these banks as required, the revelations will be shocking. On this basis, we want to warn that depositors’ funds with several Nigerian banks are at risk. People should start becoming cautious as they relate with their banks. Just a small slip could cause a lot of damages to depositors’ funds.


Who holds the Ace?

Who holds the Ace?

When the Federal Government approved licenses for 13 Nigerian firms to import bagged cement into

Nigeria, the Government’s stated intension was to put an end to short supply and ensure the crash of price of the product in the country. Yet, most Nigerians would not still believe the prospect of a crash in price of cement, because, according to cross section of Nigerian residents in Lagos State, when prices of commodities go up in the country they don’t often come down.

Some suggested that a cartel had perfected its stranglehold on the supply side of cement that no matter what measure the government puts in place, as it had over the years, the strong cartel had always found a way to undercut supplies thereby sustaining high prices for the essential building material.

This state of helplessness may, from next week, start changing with the direct involvement of Mr. Femi Otedola to get involved on the supply side and manufacturing of cement. According to a source close to the Epe-Lagos State born businessman who had made a name for himself in the petroleum downstream sector, Otedola’s first shipment of his Otedola Portland Cement (OPC) would be launched sometime next week with a strong identification with Nigerians desires to be able to buy cement at affordable price.

“I can surely tell you that OPC is about being offered to Nigerians and in the character of chairman (Otedola) the product has to be affordable. I think the retail price that is been considered for the 50kg bag of cement is N700. That is about 40 percent slash from the current market price. Chairman believes that this price slash will help break the backbone of the monopolistic cartel that had dominated the cement market for a long time.” The source that is directly involved in the landing of OPC confided in FORTUNE & CLASS.

Otedola has a record of price dumping, a business model that another source in his Zenon Oil & Gas Company said, has by and large, impacted on the mass of Nigerians.

“For Otedola, a little profit is better than huge gains. You remember he blazed diesel price slash in Nigeria when the petroleum product became so scarce and expensive. It is simply about adding value for Nigerians who are in dire needs of products that are, otherwise, common goods but had now turned essential because of the activities of monopoly inclined operators.” The source said.

“I can tell you that we are planning an elaborate launch of Otedola Portland Cement starting from Mushin, the densely populated suburb of Lagos which would symbolize the populism appeal of the cement.” The source directly involved in the cement landing explained.   

 “Even beyond this, I can also reveal to you that Chairman is putting finishing touches to selling petrol at his AP stations for N59. You can expect this in the next six weeks. This would naturally force competitors to also reduce price for the benefit of Nigerians.”

Coming on the heels of recent rapprochement between Otedola and Barrister Jimoh Ibrahim, Chairman of the NICON Group, might have also persuaded the lawyer businessman to consider diversifying into cement manufacturing in the country.

“The idea is to flood the Nigerian market heavily.” The source informed. “What Chairman told Barrister Ibrahim is that if he comes into the supply side he would also be helping to make cement available to Nigerians at affordable prices. I am aware that very soon Barrister Ibrahim will be announcing the arrival of NICON Cement.”


The nation’s stock market regulatory authorities and the money market counterparts have said for the umpteenth time that Nigerians need not lose sleep over the crisis wracking the membranes of global financial and stock markets. Of course, those that should know have acquiesced to this persuasion, except with the notification of the caveat of a more resistant strain to market rejuvenation that may likely afflict the Nigerian market for a while.

Ours had commenced a free tumbling in the early days of March, emitting in the initial tentativeness of fall, enough warnings of the Ides of March in the intensity of the momentum it intends to gather on its way down. The nation’s regulators merely talked of an early revival couching the hope of the market come-back on needed correction, the process after which the market will regain its sheen. Seven months after, regulatory authorities’ excuses for a market fall that has become protracted, are still tongue in cheek.

 The market, so far, has lost 35 per cent capitalization year to date, and that’s just by making a review of the All Share Index, fact is that the ASI, rather innocuous basis points, covers the attrition that had blighted some stocks prices.

FirstBank Plc, the doyen of Nigerian banking stock commanded a market price of N50 on 3 March, 2008 but the price as of 23 October was a miserly N23.72. now, that is more than a 50 per cent chunk off the all-time darling of investors. FCMB, FirstBank’s peer in the financial sector, exhibited peak price performance at N20 on 3 March, the stock price was, however, a delinquent N9.66 as of N24 October, showing a 50 per cent plus depreciation.

The rage of the bears is also consuming other once upon a time glamour stocks in other sectors. Food and beverages one-time investors’ delight, Dangote Sugar, is a sniveling picture of its old buoyant self at N19.07 as of 24 October down from N46.60 on 6 March, another 50 per cent wrench to the stock investors. LASACO, a leading light in the insurance sector, has lost all the shine at N1.76 as of 24 October, you can imagine that some investors bought the stock on 6 March at N5.15, I leave the percentage lost to your imagination. Evans Medical was on bid on 6 March when the market committed to it at N14, since then, it has descended the morbid curve to N4.91 as of 24 October, again percentage lost is left for he that knows where the shoe pinches. 

Even as the these stocks cascade in price, Warren Buffet’s primordial logic of buying cheap and selling high is not persuading once excited investors, they would rather look the other way. This, in my consideration, has to do with the confusion in the ranks of regulators. Since March 2008, investors have been assailed with some inconsequential policy measures, said by regulators to inspire market confidence. But no investor seems to dare place his/her faith on the confusing torrents of policies that regulators throw at the market in their condescension of understanding of what ailment afflicts the market but turning the market place into a pariah stage good enough for a nickel melodramatic performance. 

  The truth of present reality is that investors, veterans, old and neophytes, have lost confidence, and, if I dare say, absolutely, in the market and those that are responsible for managing it. Which investor wants to bother with the panacea of regulators that say one thing in the morning only to throw incomprehensible tantrums of the truth of the policy the afternoon of the same morning?

The market lacks a conscience in the mold of an individual regulator that investors believe is willing and ready to mitigate the hell storm that envelops the market. A regulator or collective community of regulators that are respected for their depth and selflessness, these are the individuals we require at this moment in the travails of the market.

My take, however, aligns with veteran Buffet. It cost N5million to acquire 100,000 units of FirstBank in March this year, some seven months after, it is just about N2.3 million to acquire the same stake in the storied stock, on the face of it, this is a great bargain. But only if one is sure of those regulators and their double speak.

The Nigerian macro-economic environment has given a good account of itself, holding steady in the face of the traducing of the global economy, this should be encouraging, but again, all things are not certainly equal here, there is so much suspicion of regulators and to an extent, some influentials in government. I do not think much can be achieved in market revival until investors see that some people who had actively contributed to the racy speed to a yet to be identified southward destination of the market, either by their actions or lack of it, are removed.  

But while we wait, I look forward to when the market bottoms out, hoping that this forsaken one per cent limit to downward movement of stock price is removed by those regulators, and pray fervently that luscious 100,000 units of luscious FirstBank, among other great picks, can be mine for a million naira. That would be the day. I am willing to go in before the band of down time pessimists and make their entries.

No curbs on Wall Street workers big pay despite meltdown

Now, can we do a snap shot on the foreign scene as the financial meltdown is still melting (that can describe ill temper of the international financial and stock market)

News has it that despite the Wall Street meltdown, United States of America’s biggest banks are preparing to pay their workers as much as last year or more, including bonuses tied to personal and company performance.

So far this year, nine of the largest U.S. banks, including some that have cut thousands of jobs, have seen total costs for salaries, benefits and bonuses grow by an average of three per cent from a year ago, according to an Associated Press review.

“Taxpayers have lost their life savings, and now they are being asked to bail out corporations,” New York Attorney General Andrew Cuomo said of the AP findings. “It’s adding insult to injury to continue to pay outsized bonuses and exorbitant compensation.”

Banks will decide what to pay out in bonuses in the coming months. Just because they’ve been accruing money for incentive pay doesn’t mean they will pay it out in full.

That there is a rise in pay, or at least not a pronounced dropoff, from 2007 is surprising because many of the same companies were doing some of their best business ever, at least in the first half of last year. In 2008, each quarter has been weaker than the last.

“There are, of course, expectations that the payouts should be going down,” David Schmidt, a senior compensation consultant at James F. Reda & Associates. “But we haven’t seen that show up yet.”

Some banks are setting aside large amounts. At Citigroup, which has cut 23,000 jobs this year amid the crisis, pay expenses for the first nine months of this year came to $25.9 billion, four per cent more than the same period last year.

Even if you subtract what the bank has shelled out in severance pay and other costs related to the job cuts, overall pay is only slightly lower this year.

Typically, about 60 per cent of Wall Street pay goes to salary and benefits, while about 40 per cent goes to end-of-the-year cash and stock bonuses that hinge on performance, both for the individual and the company, said Brad Hintz, a securities industry analyst at Sanford Bernstein and a former chief financial officer at Lehman Brothers.

“The fundamental goal of the compensation plan is to allow an employee to get wealthy,” Hintz said. He also pointed out that the workers’ pay is supposed to be “exposed to the risk of the parent company.”

This should be the year where that structure is tested. The financial crisis, brought about by mountains of bad mortgage-related assets, caused banks to falter or fail and lending to dry up and prompted Congress to pass a $700 billion bailout package. As part of that, government is pouring $125 billion through stock purchases into the nine large financial companies cited in AP’s review of compensation.

Besides Citigroup, those include Bank of New York Mellon, Goldman Sachs, Morgan Stanley (MS), JPMorgan Chase, Bank of America, Merrill Lynch, Wells Fargo & Co. (WFC), and State Street. Another $125 billion will be made available to other banks.

Those taking cash from Uncle Sam must follow guidelines limiting executive pay, including a ban on golden parachutes for departing executives. No restrictions are placed on across-the-board pay.

In total, those nine banks had pay-related costs of $108 billion for the first three quarters of the year. The average increase came to three per cent, according to AP figures.


They say the Nigerian banking industry has some of the finest brains in the whole of the black African continent. Nobody should dispute this, if those white goons of the departed apartheid regime had not stayed longer than required, those South African banks that strut around telling who cares to listen of their grand size all would have paled into insignificance.

Okay, concede size and operating finesse to the South Africans, for Nigerians, our banks are getting bigger so much that account books sniffing sheriffs at the Nigerian Accounting Standard Banks, would informally tell you that it’s a most exerting task reviewing the books of the banks.

One tells of how some banks usually play the smart card on auditors:

“The bankers know that auditors can only work on figures provided for them, so besides traducing the figures, they may even confuse the entire process for the auditors. This they do by suddenly changing accounting software.

“We have seen banks that were using Globus, a banking accounting package, over the best part of a year only to suddenly change their software to Finnacle weeks before the external auditors assume. What the auditors meet on ground is certain to be absolute chaos because of the incompatibility of these two softwares. Eventually, the auditors are left to the mercy of the figures the banks wished them to see and treat.

You won’t believe which institution holds the banks in greatest suspicion? The Central Bank of Nigeria!  It is said that the CBN is so circumspect of banks’ figures that it makes a tradition of slashing the figures presented under some account headings. For instance, the CBN has over the past years made it a rule to slash any figure presented by banks under its total assets column by 70 per cent because the CBN believes that such figures are always over-inflated.

A case of connyman dies connyman bury am. (a dead dubious person would be buried by an equally dubious person)


The successes of business entities are model dependent, and to every business concern is attributed a peculiar way of doing things. That is exploiting opportunities for profit, at least, this is what entrepreneurship is all about; make money the way it suits you. So which of these two identified business models would you rather adopt? The two models are cheekily referenced in the corporate enclave as the Shell Model and the Chevron Model.

By the way, Shell and Chevron are two of the nation’s multinational big players in the oil and gas upstream sector. Upstream sector translates to oil and gas exploration and production.

First, the Shell model: this is predicated on big pay and a consequent bigger responsibilities profile. Industry sources explain that Shell employs a staff to collect the salary of two but is given the work of three staff on the same responsibility scale.

The Chevron Model: Simple, lease everything from teaspoon to vessels. Industry insiders account claim that Chevron is ready to go. I don’t know if you know what I mean. It means that with a little ruffling up, Chevron is nimble enough, not being burdened with acquired assets in Nigeria, to just jump on the next flight out of the country.

Now, you can go, think out your own exploitative model. It’s all about making money, isn’t it?


You heard of petroleum marketing companies being investigated for round tripping petroleum products and still fleecing the nations of billions of naira through deceptive request for refund from the Petroleum Support Fund?

Yes, investigation is on-going and as we go to press, we have it on good source that six smalltime marketers have been fingered for detailed investigation, and well, for your ears only a former top notch in the Federal Government recently relieved of his high office, plus another one, who was part of the regulatory agency.

The six companies were said to have found influential moles at the Nigerian National Petroleum Corporation and its marketing arm, the Petroleum Products Marketing Company (PPMC). Know how the deal works? Here is an abridged detail; these six secure product allocations from PPMC, move in vessel to load products that were already imported into the country, make a foray to the high sea, then turn around, head for Nigeria and berth at designated PPMC ports as if they just brought in fresh supplies from wherever. The scheming round trippers off-load and well, after processing their paper, apply for fund from the PSF. For that effort, the former big man in government goes home with N25million on every successful returns made by his sea farer round tripping marketers.

Avail yourself a brief on what PSF is all about:

 The Federal Government established a petroleum support fund effective January 2006 to stabilise the domestic prices of petroleum products against volatility in international crude and products prices. A substantial amount of that by government schedule will go for kerosene subsidy, thereafter, whatever is left on a monthly basis will go for petrol.


The fund, which is domiciled in the Central Bank of Nigeria (CBN), available for companies and depot owners licensed by the Department of Petroleum Resources (DPR), the disbursement of the fund to marketers importing petroleum products follow collation of product figures in all refineries, jetties and depots located in various parts of the country.


Now, let’s do some comparison: None of the six companies,  prime suspects, are importers, “they don’t even have loading bays,” our very knowledgeable insider says.


Perhaps some ETB staff that were in the know of the negotiation of the acquisition of the bank by FirstBank were excited at the prospect of changing boss from the authority of Otunba (Dr.) Mike Adenuga to the structured management of FirstBank. Feelers from the bank owned by Adenuga indicated that some staff members were really perturbed when months after the very discreet discussion between ETB and FirtBank hit the dirt.

Background sourcing indicated that Adenuga is intent at concentrating on his money spinners, the telecom and oil and gas ventures in his vast business empire and considered the relinquishing what they claimed to be the troubles of running his ETB to the banking giant.

Some of the staff considered this a momentary set back though.