Nigeria can assemble 150000 new vehicles by 2015– NAC

While the federal government is determined to return Nigeria to its old glorious days as an automobile manufacturing nation under the new automotive policy, this move has been greeted with a lot of altercations especially from franchisees. Recently, MIKE OCHONMA raised a number of issues before Luqman Mamudu, director, policy and planning department National Automotive Council onboard South African Airways Johannesburg-Lagos bound flight.

Where are we presently in terms of duty and duty regimes

Used vehicles import will continue to attract 35 percent duty only without levy till December 2014. This has been the case since January 1st 2014, being the effective date of fiscal measures.

What were the reasons for extension?

In the implementation schedule of NAIDP, it was anticipated that by July 1st 2014, the existing local assembly plants and new entrants into the industry would have ramped up sufficient capacity to meet the expected upsurge in demand if the importation of used vehicles is restrained by imposition of 35% levy.

 But evidence on ground suggest that this had not happened due to bureaucratic constraints which impacted negatively on investors’ confidence and therefore limited investment commitment or hesitation to invest at all by OEMs. Equally anticipated was the establishment of a National Automotive Credit Purchase Scheme for made in Nigeria vehicles, especially for budget or popular vehicles expected to compete effectively with used vehicles. This had reached advanced stage but not ready for launch.

What happens if the low volume is low to feed the market after extension?

Evidence on ground suggests that stock of new vehicles is appreciating reasonably. For example, the entire new vehicle stock in 2013 was 50,000 units, but between January to May 2014, over 37,000 stock of new vehicles has already been recorded under NAIDP. Apart from existing assembly plants, 15 new automotive assembly plants have all signed technical agreements to commence operations before year end.

 Some of them actually have significant volume of knocked down (KD) kits on the high seas bound for Nigeria. Given the estimate of their projected output, 150,000 units of new vehicles and more may be delivered by year end under NAIDP. 

 The National Vehicle Purchase Scheme (NVPS) should be ready to provide low co st automotive finance scheme to individuals and cooperate entities before year end as well. Given the foregoing, it is unlikely that another extension will happen although the minister of industry, trade and Investment has the prerogative to extend by another six month if it becomes absolutely necessary.

Even then, there might be a moderation of the age of vehicles to be imported. At the moment, cars of below 10years and commercial vehicles below 15 years are allowed but this will definitely have to be scaled down. Don’t forget that apart from being a disincentive to new vehicle assemblers, used vehicles are environmentally undesirable. Age of vehicles is closely correlated to death rates on our roads and a resource drain on foreign exchange which denies Nigerians Jobs.

Medical fund will reduce debt: Govt

The government is again defending its proposed GP co-payment, saying the policy is an essential structural reform that will reduce net debt.

Finance Minister Mathias Cormann says the fund will stay as an asset on the governments balance sheet in perpetuity, reducing debt by the $20 billion once it has accumulated.

Only the investment returns are spent on medical research, he says.

The government is facing backlash over the policy, with Labor, the Greens and key crossbenchers opposed to the amount and the scope of the charge.

The Australian Medical Association has proposed a Medicare co-payment of $6.15, and says concession card holders and those under the age of 16 should be excluded.

But Senator Cormann says a price signal is necessary for the healthcare system to support an ageing population, and excluding pensioners would defeat the purpose.

The truth is that those most likely to need access to high-quality healthcare services in the future are also those who most need this reform package to successfully pass the Senate, he wrote in an opinion piece in The Australian.

Lanco Infratech to sell 3000 MW capacity to reduce debt

(Follow @PowersGuru on Twitter for important updates)

Economic Times reported that Lanco Infratech is aiming to raise INR 20,000 crore by selling power plants with capacity of 3,000 MW, stepping up efforts to liquidate assets just days after selling an electricity generating station in Karnataka for INR 6,000 crore.

People aware of the development said that the Hyderabad based company has appointed investment bankers to help it with the sale, which could be Indias biggest such, and potential buyers have started due diligence.

For Lanco, shedding electricity assets will help it reduce debt, which was at around INR 38,000 crore before it sealed a deal to sell its coalfired 1,200 MW Udupi Power Corporation to the Gujaratbased Adani Power. For the Indian power sector, it will mark an intensification of consolidation after the election of a new government in May.

Only last month Jaypee agreed to sell 3 hydel power plants to Reliance Power for INR 12,000 crore.

An investment banking source said that Lanco Infratech has also appointed bankers to help it raise at least INR 2,000 crore in equity through an IPO and INR 1,000 crore more in the form of private placement of hares of the holding company to financial institutions.

Lanco, like many other infrastructure companies, borrowed heavily to finance rapid expansion but ran into trouble when the economy slowed and infrastructure projects stalled because of lack of availability of fuel.

Mr Lagadapati Madhusudhan Rao, chairman of Lanco group, when he was contacted to confirm details, said that The immediate plan is to sell power assets of at least 3,000 MW, which should give us INR 5,000 crore of cash and help lessen INR 15,000 crore in debt.

Lanco Infratech said that it will receive INR 2,000 crore in cash and transfer debt of about INR 4,000 crore to Adani. The companys loss during the year to March 2014 was INR 2,300 crore on revenue of INR 10,700 crore.

Macquarie, SBI Capital Markets, Edelweiss, ICICI Securities and EY are among the bankers appointed by Lanco Infratech for the sale of assets from its power generation portfolio of 17,200 MW.

Apart from domestic strategic investors like the Adani group, JSW, TATA group and Reliance Power, global strategic investors including Power Tech and multinational private equity firms have initiated due diligence.

Mr Rao said that after Udupi, Lanco is left with 3,600 MW of operating assets, 4,600 MW of assets under construction and close to 9.000 MW of assets under development where some are attached to coal mines.

He was of the view that selling more power assets at remunerative prices may not be easy in the current environment.

Source Economic Times

Get latest updates through Twitter Follow @PowersGuru



Americas love affair with debt is starting to be a problem.

Consider: Average total debt per American with a credit file stood, in September 2013, at $37,952 in mortgage debt and $15,898 in non-mortgage debt, according to a new study by the Urban Institute, a nonpartisan think tank in Washington, DC And if that wasnt bad enough, more than one in three Americans have debt in collection.

No doubt many of these and other Americans, young and old, are wondering whether it make sense to use a credit counseling agency, or to seek other ways to reduce their debt. But how should they go about finding such help? Experts recommend the following.

Same process for young and old. The process of evaluating and selecting a legitimate agency would be, with one exception, the same for those 65 and older as it would be for those under age 65, says Gail Cunningham, a spokesperson for the National Foundation for Credit Counseling (NFCC), a financial counseling organization based in Washington, DC

Whats the exception? If debt is the issue that prompted them to seek help, a person approaching retirement might want to set his or her goal to be debt-free by the time they retire, says Cunningham. Of note: It usually takes a maximum of five years if a person goes on a debt management plan or DMP.

Whats in a name? Eleanor Blayney, a certified financial planner and the consumer advocate of the Certified Financial Planner Board of Standards, suggests learning the differences between debt management, debt consolidation, and debt settlement when thinking about getting help. And when evaluating any firm to help you with your debt, make sure that debt management, which includes credit counseling, and a payment plan to reduce debt, is a major feature of the service provided, she says.

In the main, experts recommend working with a nonprofit agency. But remember this. Nonprofit doesnt mean free or even low cost, says Erik Carter, a senior resident financial planner with Financial Finesse, a financial education company based in El Segundo, Calif. Make sure you understand all the fees you may be charged and ask what support they can offer if you cant afford them.

What to avoid. Avoid debt settlement companies, says Carter.

Others agree. Debt consolidation is just one debt management option and generally involves refinancing your unsecured debt with a new loan, says Blayney, who is also president of Directions for Women, a McLean, Virginia firm that teaches women about money. Beware of companies that say they are debt consolidators, but are in fact in the debt settlement business. This last service is of dubious value, usually comes at a high price, and often leaves the debtor in worse shape than before.

How so? According to Blayney, debt settlement involves negotiating down the amount owed, and the debtor is usually advised not to pay anything on the debt or to contact creditors while these negotiations are going on. This service does nothing to stop the harassing phone calls, which is often why people are considering some form of debt relief service in the first place, she says.

In good company. Search for credit counseling agencies associated with reputable organizations such as the NFCC and the Association of Independent Consumer Credit Counseling Agencies, says Carter.

An initial evaluation is generally free, and additional services, such as a debt repayment plan, are very reasonably priced, says Blayney. You may find you do not need to go further, to a debt consolidation firm, she says.

Carter also recommends checking whether the agency is included in the United States Trustee Programs list of credit counseling agencies approved to provide pre-bankruptcy counseling. Also, he suggests checking with your states Attorney Generals office and local consumer protection agency for any complaints filed against them.

In-person best. Debt issues can be emotional and are often best handled face-to-face, says Carter. Try to find a local one in your area that offers in-person counseling.

Carter says this is especially important when youre older. Retirees should find someone they can work with face-to-face, he says. They may also want another family member involved if theyre at all cognitively impaired.

Of note: Cunningham says those already retired will have to tell their credit counselor about all sources of income, many of which will be fixed, and that they may have limited opportunities to increase income for debt resolution purposes.

What services are offered? Once youve narrowed down your search, ask what services are offered and how theyre delivered, says Carter. Do they just consolidate debt or will they help you develop a more comprehensive cash management plan to avoid falling back into debt? Are the counselors accredited by a non-affiliated third party? Are they paid more if you sign up for certain services? Will all information be kept confidential and secure? Whats in the written contract?

Go it alone. Consider too that there may be a lot you can do yourself to lower your debt burden, says Blayney. Contact your creditors directly, and ask if they will consider a lower interest rate, or if they will modify the amount outstanding, she says. You could also take advantage of offers by lower interest-rate credit card companies to accept transfers of outstanding debt on other higher rate cards.

Beware, however, of teaser rates that are good for only a limited time, and then revert to high rates once again, says Blayney.

Consider a reverse mortgage. For retirees who need debt relief, a reverse mortgage is an option, though you do have to pay off any existing mortgages on the home before getting one. These loans have become more consumer-friendly: Lower fees, and now available as lines of credit, in addition to upfront loans, says Blayney, Because the house will secure the mortgage, the rates are almost certainly going to be lower than unsecured personal debt, which is a plus for seniors.

Still, a reverse mortgage is not something to use without consulting with experts and family. There are other features that retirees, and their children and beneficiaries, need to carefully consider before going this route, Blayney says. One negative is that refinancing through a reverse mortgage is not accompanied by an overall look at the existing debt, and the reasons why it exists in the first place.

Robert Powell is editor of Retirement Weekly, a service of Email him at


Elizabeth Warren’s Bold Plan to Reduce Student Debt

By Tim Dickinson |

As a first-term senator from Massachusetts, Elizabeth Warren is advancing her fight for middle-class families with a legislative agenda focused on college affordability and student debt. Rising student-loan debt is an economic emergency, she says. Forty million people are dealing with $1.2 trillion in outstanding student debt. Its stopping young people from buying homes, from buying cars and from starting small businesses. We need to take action.

Puerto Rico Should Reduce Debt to 2000 Levels, NY Fed Says

Puerto Rico, the junk-rated US
commonwealth, needs to reduce its debt levels, end deficits and
broaden its tax base, according to recommendations released
today by the Federal Reserve Bank of New York.

The island should lower the ratio of public debt to its
gross national product to 60 percent — the level of 2000 –
from 100 percent last year, the New York Fed said in its first
report in two years on Puerto Rico, which is part of its
district. The ratio and the commonwealth’s speculative-grade
ratings raise borrowing costs, which the report said can impede
economic growth.

The self-governing territory of 3.6 million, which has $73
billion of debt when including its agencies, lost its investment
grades this year. The commonwealth is contemplating
restructuring some of its public-corporation borrowings.

“While these adjustments can be difficult, the experience
of New York City suggests that it is possible to tackle fiscal
pressures head on and come out stronger,” William Dudley,
president of the New York Fed, wrote in a foreword. “Puerto
Rico clearly has the assets and attributes to do so.”

Governor’s Progress

The island’s economy has struggled to expand since 2006.
Its population has declined for eight straight years as
residents leave for the US mainland, according to Census data.
The report cites New York, which was on the brink of bankruptcy
in the 1970s, as an example of economic turnaround and fiscal

In response to the report, Governor Alejandro Garcia Padilla, who took office in January 2013, said that his
administration has reduced the commonwealth’s deficit, attracted
businesses and created 50,000 jobs.

“There is more work to be done, and we continue to execute
on a comprehensive plan to drive economic growth and fiscal
stability,” he said in a statement.

Debtor Ranking

Puerto Rico and its agencies, including the Electric Power
Authority and the Highways amp; Transportation Authority, have
borrowed over the years to help balance budgets. The
commonwealth is the third-largest municipal debtor behind
California and New York. The bulk of its obligations are tax-free nationwide, leading 66 percent of U.S municipal mutual
funds to hold the securities.

Borrowing by public corporations accounts for almost 85
percent of the increase in the island’s debt ratio, according to
the report.

While those agencies have benefited from Puerto Rico’s
ability to borrow through capital markets, “they have now
harmed that access, threatening the delivery of the
commonwealth’s core public services,” according to the report.

Going Private

Those entities need to improve their finances and become
more efficient, and may benefit from changes in “governance and
ownership structures, including implementing selective
privatization,” according to the report.

Lawmakers last month approved a measure allowing certain
public corporations to negotiate with bondholders to reduce
their debt.

To gain investors’ confidence, Puerto Rico needs to
eliminate budget deficits and implement multiyear spending
plans, build reserves against economic shocks and improve its
financial reporting, according to the New York Fed, whose
markets desk implements monetary policy and monitors financial

The report also suggests expanding Puerto Rico’s tax base
and reducing rates across a range of levies to stimulate growth.

The report follows a speech by Dudley last month in San
Juan, the Puerto Rican capital, where he outlined steps the
island should take to address financial challenges.

To contact the reporter on this story:
Michelle Kaske in New York at

To contact the editors responsible for this story:
Stephen Merelman at
Mark Tannenbaum, Mark Schoifet

Countrywide co-founder said to face US suit

NEW YORK o Countrywide Financial Corp. co-founder Angelo Mozilo hasnt escaped the wrath of prosecutors for his companys role in inflating the U.S housing bubble that preceded the financial crisis.

More than 12 months after a deadline passed to file criminal charges, US attorneys in Los Angeles are preparing a civil lawsuit against Mozilo and as many as 10 other former Countrywide employees, according to two people with knowledge of the matter.

The government is making a last-ditch effort to hold him accountable for the excesses of the past decades subprime- mortgage boom, using a 25-year-old law that has helped the Justice Department win billions of dollars from Wall Street banks, said the people, who werent authorized to discuss the case publicly.

Until now, the harshest penalty imposed on Mozilo, 75, has been a $67.5 million accord with the Securities and Exchange Commission from 2010 to resolve allegations that he misled Countrywide investors. He earned $535 million from 1999 to 2008, according to compensation-research firm Equilar Inc.

The size of the sanction in the SEC case, in which Mozilo didnt admit or deny wrongdoing, compared with his pay has fueled public anger that financial executives walked away from the housing bust enriched and mostly unscathed.

David Siegel, a partner at law firm Irell amp; Manella in Los Angeles who represents Mozilo, had no immediate comment on a suit against his client. Thom Mrozek, a spokesman for the US attorneys office in Los Angeles, declined to comment.

Government attorneys plan to sue Mozilo, Countrywides former chairman and chief executive officer, and other individuals using the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), said one person with knowledge of the probe. The law, approved by Congress in 1989 in response to savings-and-loan scandals, gives prosecutors 10 years to bring cases and has less stringent liability requirements than criminal charges.

While US prosecutors have notified lawyers that their clients are targets of civil cases, any suit against Mozilo and other individuals may be more than a month away, one of the people said.

The Justice Department has been focused on wrapping up a FIRREA settlement with Bank of America for about $17 billion over mortgage bonds inherited from its 2008 acquisition of Countrywide and 2009 purchase of Merrill Lynch amp; Co. The accord, which may be announced as soon as Thursday, will penalize the Charlotte, NC-based bank for how securities were marketed to investors, people familiar with the matter have said.

Mozilo said he has no regrets about how he ran Countrywide, according to a June 2011 deposition he gave in a lawsuit between the mortgage lender and bond insurer MBIA Inc.

The financial crisis was a cataclysmic situation, unprecedented in the history of this country that Countrywide did not cause, Mozilo said in the deposition. Mozilo said he settled the SEC lawsuit to protect his family from negative publicity.

Mozilo, known for his tanned visage, became an American success story after co-founding Countrywide in 1969 and building it into the nations largest mortgage lender. His fortunes turned in 2007 during a surge in defaults of loans the company made to borrowers with inadequate credit profiles. Countrywide, based in Calabasas, Calif., reported its first annual loss in more than two decades that year.

By March 2008, lawmakers tried to make Mozilo a poster child of Wall Street greed as the US economy slumped. They beckoned him to Washington, where he testified before a combative congressional committee about his pay along with the ousted CEOs of Merrill and Citigroup. 

Bank of America, trying to solidify its mortgage business by snatching a stumbling competitor, completed the Countrywide acquisition in July 2008. The purchase turned into an albatross. Bank of America has absorbed almost $55 billion of fines and charges since 2010, mostly attributable to Countrywide.

US prosecutors dropped a criminal probe of Mozilo in early 2011, a person with knowledge of the matter said at the time. Since then, President Barack Obamas administration has faced a wave of criticism from public-interest groups, the media and lawmakers who say the government hasnt held enough individuals accountable for causing the financial crisis.

The Citizens for Responsibility and Ethics in Washington, a watchdog group, sued the Justice Department in June to try to obtain its records detailing investigations of Mozilo and Countrywide. The group faulted the government for failing to prosecute either Mozilo or the company despite substantial evidence of wrongdoing.

Mozilo agreed to settle the SEC case in October 2010 by paying a $22.5 million fine and disgorging $45 million of gains from stock sales at what the regulator said were inflated prices. Bank of America covered a portion of his penalties.

The SECs lawsuit, filed 16 months earlier, accused Mozilo of reassuring Countrywide investors about the quality of the companys loans, while knowing that its underwriting standards had deteriorated.

The SEC, which banned Mozilo from serving as an officer or director of a public company, also said he sold Countrywide shares based on inside information.

Schoenberg reported from Washington. Hugh Son contributed from New York.

League group investors push for criminal probe

It took less than a minute for the phrase “Ponzi scheme” to spill into the question-and-answer portion of Thursday’s conference call between the monitor overseeing the restructuring of the League Group of companies and its disgruntled investors.

Wondering how a Ponzi scheme is defined and who has the mandate to push for a criminal investigation, investors peppered monitor Mike Vermette of PricewaterhouseCoopers and League chief executive John Parkinson with questions during a call to discuss Vermette’s scathing report into the demise of League.

The report pointed out that League has amassed $233 million in liabilities and owes $369 million to investors, and noted that the company will cease to exist by the first quarter of next year as it is being liquidated to satisfy secured lenders.

The 4,280 investors have been told that, on average, they have lost 90 per cent of their money.

Citing that report, one investor suggested Vermette already described League’s activities as akin to a Ponzi scheme — a fraud using new investment money to pay off earlier investors in a situation where no investment is actually made.

The investor noted Vermette’s report said cash distributions to League’s equity-unit holders exceeded cash flow and were not sustainable, while the shortfall was funded by new capital from high-interest loans and from new investor money.

Vermette would not be drawn into saying whether or not he believed League operated like a Ponzi scheme, but he didn’t hold back in criticizing League founders Adam Gant and Emanuel Arruda for their business practices.

“It is absolutely factually true, money from a new investor was used to support an old investor. Where people want to take that fact, what they want to do with it goes to another element of your question [what is the monitor's mandate],” he said.

“I don’t believe it’s anyone’s mandate in this process to deal with criminal activity. I don’t even want to suggest that we are of the view that this is criminal activity.

“I can tell you the actions that were done, the conduct that was done breaches an awful lot of good business practices. In many people’s minds, it will, in absolute black-and-white terms, breach moral duties and ethics,” he said.

“It is a terrible thing that happened. Is it criminal? I don’t know. It violates all kinds of moral standards, no question.”

As for the question of an investigation, Vicki Tickle of law firm Fasken Martineau, which acts as representative counsel for the investors in League’s restructuring process, told investors on the conference call that she had met with the BC Securities Commission and that body may be best placed to act.

Tickle said the commission has a copy of the monitor’s report and has expressed interest in hearing from investors who believe they have evidence of nefarious activity.

Commission spokesman Richard Gilhooley confirmed the BCSC is reviewing the report and investor complaints.

“We will pursue any evidence of misconduct. We urge investors to contact us if they have such evidence,” he said.

Gilhooley said he could not comment on whether or not the BCSC has approached the RCMP.

Rob Vermeulen, the RCMP’s senior media relations officer, said they do not typically confirm or deny investigations.

The 90-minute conference call also dealt with the harsh reality most investors must face — losing everything they put into League products.

Vermette said the $37 million they expect to be able to distribute to investors at the end of the liquidation process will mean some get all of their money back, some will get a small return but most will get nothing.


Foxwoods owners straining again under heavy debt

FILE – In this Nov. 11, 2010 file photo, buildings of the Foxwoods Resorts Casino, the country’s largest resort casino, rise over the landscape in Ledyard, Conn. The Mashantucket Pequot tribe said it had to review its options with senior lenders as a slump continues to batter the income at the casino. To reduce debt, the tribe sold off 371 acres of mostly vacant land in North Stonington, Conn., in July 2014, and is looking to shed land holding in additional towns.
Photo: Jessica Hill, AP