Nigeria Content Online

Following the
misgivings arising from the strategic investment in Transcorp Plc, the
Nigerian Stock Exchange (NSE) is to mediate truce between the two
disputing parties.

A statement by the
Exchange yesterday by its senior manager corporate communications, Wole
Tokede, assured the investing public of the safety of the transaction.

“We wish to assure
the investing public that the parties involved in the transaction have
been issued letters to attend an all-parties meeting, consistent with
our desire to forge a ‘free market’ bound by rules and best practices,”
Mr. Tokede said.

Heirs Holdings
Limited, a private investment vehicle, had on Tuesday said it has
acquired a strategic stake in Transcorp Plc, but the company is
disputing this. However, the Exchange stated that investors are free to
take any investment decision, so long as it conforms to the rules of
the market.

“The Exchange
respects the right of investors in the market to enter into commercial
transactions as they deem fit and within the rules and ethics of the
bourse,” the statement said.

According to the
NSE, HH Capital Limited, through its brokers – BGL Securities Limited,
informed the bourse of its desire to cross 1,970,754,364 units of
shares from willing sellers on March 31, 2011.

“In the course of
the review of the transaction, the Exchange realised that one of the
willing sellers was legally not in position to engage in such a
transaction and this was immediately cancelled,” it stated.

Transcorp’s petition

Last week,
Transcorp sent a petition to the Securities and Exchange Commission
(SEC) claiming that the huge volume trading on its shares on March 31,
2011 was not consistent with market rules.

The firm stated
that a total of 2.51 billion units of its shares representing 10 per
cent of the company’s issued share capital were traded in a single day,
and were shocked at how the transaction was approved by the Stock
Exchange, without information and consent of shareholders and the
company.

“The board and
management hereby object to such a transaction and request that due
process and the provisions of law be allowed where an individual or
group of individuals are interested in a controlling stake in the
company,” the management of Transcorp said.

Heirs Holdings
Limited, in a statement by its director of marketing and corporate
communication, Jenika Mukoro, said that Transcorp shareholders will
benefit from the transaction.

“Our chairman, Tony
O. Elumelu, who was a founding director and investor, believes strongly
in the founding vision of Transcorp as a means for Nigerians to access
the abundant economic opportunities present in the country through the
capital markets,” the statement said.

Shareholders benefit

Victor Ogiemwonyi,
the managing director of Partnership Investment Company Limited, an
investment banking and brokerage firm, said the move would benefit the
shareholders.

“There is nothing
wrong with the transaction. Somebody has bought the shares and he
disclosed his interest. That is all the law requires,” Mr. Ogiemwonyi
said.

According to him, the entrance of a new investor would bring fresh ideas into the company.

“My hope is that
they will rid the company of its bad assets and invest massively in the
tourism and hospitality sector. Tony (Elumelu) has a track record of
turning things around and I hope he will continue with Transcorp,” he
said.

Following the
botched purchase of the national carrier, Nigeria Telecommunications
Limited (NITEL) in June 2009, shareholders of Transcorp had been
waiting on the sidelines, as its share price slumped from a high of
N9.70 to the minimum 50 kobo.

However, hope was
rekindled when Transcorp entered into a joint venture agreement on
March 1 with SacOil Holdings Limited of South Africa (SacOil) to
develop its oil field in collaboration with Energy Equity Resources
Limited (EER).

Sacoil paid $30
million to acquire 20 per cent of the lucrative OPL 281. Since then,
the company’s shares have been on the increase.

However, the firm’s
shares began to record tremendous upswing when information filtered
into the market that a new entrant was taking position. Since then, the
price has risen steadily, closing on yesterday at N1.33, a growth of
166 per cent in less than five weeks.

Transcorp has interests in hotels, agriculture, oil and gas sectors.

Goodluck Jonathan,
the presidential candidate of the ruling Peoples Democratic Party
(PDP), has promised to consolidate his administration’s achievements on
the economy, particularly in ensuring that the country attains stable
power supply, while agriculture is commercialised and mechanised to
provide employment to the youth as well as build a stable economy.

His manifestoes,
called ‘Agenda for Transformation’, launched as part of his political
campaign, hinges on a commitment to build an inclusive society where
job creation constitutes a major pillar for economic growth; provision
of cheap and long-term capital for businesses; removal of barriers to
increased productivity; as well as improvement on the environment for
doing business.

He is convinced
that the expansion and development of the downstream sector of the oil
and gas industry would provide about one million jobs for Nigerians,
while the continued expansion of the production capacity in the
upstream sector of the oil and gas industry would earn more revenue to
the country through increased crude oil exports.

Access to development

“Nigeria needs to
build a more inclusive society where every Nigerian would have equal
access to economic and developmental opportunities,” Mr. Jonathan
declared in his blueprint for economic transformation, which also
promises additional economic benefits, including safeguarding the
country’s macro-economic stability.

To ensure that the
improvement in domestic economy impacts on poverty, Mr. Jonathan has
pledged to provide adequate access to economic resources, to help small
businesses grow.

Through the
instrumentation of the Presidential Committee inaugurated last year to
devise ways of enhancing government’s programmes on job creation and
poverty reduction, a N5 billion Business and Development Fund was
established by the Bank of Industry (BOI) in collaboration with the
Dangote Foundation (DF), to provide soft loans to entrepreneurs engaged
in micro, small, and medium scale businesses in the country.

The fund, which
would grant entrepreneurs access at overall single-digits interest rate
of 5%, will be utilised for term loans, working capital loans, leasing
of industrial/business equipment, and trading and allied businesses.

“The provision of
cheap funding to SMEs will come as a great relief to entrepreneurs who
need to reduce their financial costs as they try to deal with high
production costs for generating power and providing other operational
infrastructure,” the president said.

Besides, he said
his administration will continue to support infrastructure for the
development of Small and Growing Businesses (SGBs) by boosting the $500
million intervention fund already in place to enable the BOI and
Nigerian Export-Import (NEXIM) Bank continue to lend at single-digit
interest rates, to facilitate increased access of small businesses to
finance, as well as develop Nigeria’s enterprise culture.

Enterprise
Development Centres, Industrial Clusters, and Job Centres are to be
established to collaborate with the Small and Medium-scale Enterprises
Development Agency of Nigeria (SMEDAN) and 23 Enterprise Development
Centres (EDCs) across the country, to provide business skills training
aimed at improving the managerial capability of entrepreneurs.

At the Job Creation
Summit he hosted last week, Mr. Jonathan reiterated his determination
to initiate various intervention programmes in the key productive
sectors of the economy in all states of the federation, based on their
comparative advantage, to provide incentives for the flow of capital to
the real sectors, to increase productivity and achieve widespread
employment generation, especially for urban and rural youth nationwide.

This is aimed at
creating about 1.5 million income generating employments in the labour
intensive sectors of the economy, namely agriculture, manufacturing,
and building and construction.

Consolidating reforms

In broad terms, Mr.
Jonathan says he hopes to build on the momentum in the
telecommunication sector reform, by replicating the open competition
philosophy in the power sector, where a roadmap has already been
unfolded to drive his administration’s policy option at achieving set
targets.

In the process, the
PDP flag bearer says he has already made it clear to the private sector
operators (formal and informal) as well as local and foreign investors
that he will not hesitate to clear all vested interests that would pose
a threat to quick policy implementation and rapid economic
transformation.

Other proposals
include the consolidation on the Public Works Programme (PWP) to create
1.5 million jobs this year, while a Growth and Employment Pact (GEP)
would enable public-private partnership to enhance growth in
construction, ICT, hide and skin, tourism and entertainment sectors.

Besides, he
believes the power sector roadmap launched last August is on course and
would help improve significantly the country’s electricity supply level
within the next six months when most of the National Integrated Power
Programme (NIPP) projects come on stream, and the transmission and
distribution aspects of the electricity chain are repositioned.

He has also given
assurances that the reforms in the petroleum industry through the
Petroleum Industry Bill (PIB) would lead to the diversification of the
sector’s capacity to generate more jobs and create wealth for Nigerians.

At the launch of
what he calls a ‘gas revolution’ in Abuja, Mr. Jonathan said his
government hopes to partner with the private sector to invest over $25
billion to help transform Nigeria into a petrochemical hub in Africa,
with particular emphasis on stimulating the economy to create over one
million direct and indirect jobs in the country.

Are all these campaign rhetoric or well planned agenda? Time will tell.

TOMORROW: CPC Buhari’s agenda

The naira may not
necessarily come under uncontrollable pressure due to the delayed
elections, according to some finance experts.

Victor Ndukauba,
investment research analyst on banking and infrastructure, Afrinvest, a
finance research and analysis firm, said though there has been an
accumulating pressure on the naira, “the delay in elections would not
translate to an uncontrollable pressure on the naira.”

Afrinvest had
earlier stated in its outlook that it expects strong pressure on the
naira to persist in the coming weeks, as speculative demand for the
dollar becomes heightened by current political uncertainties
surrounding the forthcoming elections.

Gali Suleiman
Kabiru, a bureau de change operator in Lagos, said the naira has
strengthened to N157 to a dollar today from N159 last week, at the
black market. He said he cannot explain the factors behind this
appreciation, especially during this election period.

“We cannot say that
this is why this is happening. The commercial banks, to a large extent,
determine the movement of the naira, and we know that it is also an
effect on demand and supply at the forex market,” Mr. Kabiru said.

He also said it is
a possibility that most of the politicians that used to speculate on
the naira and play some other funny tricks on it are busy with the
elections and have less time for speculations. “So, we think that the
naira would even strengthen during this period,” he said.

The Independent
National Electoral Commission (INEC) on Sunday postponed by a week the
parliamentary elections initially scheduled for last Saturday.

“Interestingly,
markets have not significantly reacted to this development. On the
Forex side, the inter-bank rate actually appreciated to 154.0 on
Monday, driven by increased dollar supply from oil companies, even as
demand remained high at the WDAS auction (USD525.8m),” Samir Gadio,
emerging market strategist, Standard Bank, said.

According to Mr.
Gadio, the naira actually appreciated to some extent in recent days to
about 153.9 as at 6 April because of Forex sales by oil companies, but
the exchange rate still remains relatively under pressure, ahead of the
forthcoming electoral cycle.

“On the upside, we
have not seen a depreciation following the postponement of the 2 April
2011 parliamentary elections, but there is still a possibility that the
naira could weaken over the next two weeks on the back of speculative
pressures, rather than structural factors.

“That said, we
expect the currency to ultimately appreciate as political risk eases in
late April, but also because of the tighter monetary policy stance,
which means going long naira at this stage remains an attractive
opportunity,” he added.

Telling on the naira

Renaissance Capital, an investment bank, however, says the naira’s performance will reflect protracted uncertainty.

“Elections,
particularly in Sub-Sahara Africa, are typically accompanied by
increased levels of uncertainty. The prolongation of the electoral
period only adds to the levels of anxiety amongst all stakeholders
including the electorate, business and investors, who all want to see
the completion of successful elections,” the bank said.

The firm says the
naira, which has already been weighed down in recent weeks by
electioneering, weakened further earlier in the week to N155.2 per
dollar, as nervousness prompted some to sell-off their local currency.

“The naira is
expected to continue to come under pressure during April. Once the
elections are behind us, fundamentals are expected to play a stronger
role in determining the value of the naira. Postponed poll delays the
return to ‘business as usual’. This postponement of the polls not only
protracts the period of uncertainty, but also delays the
decision-making process, both in the private and the public sector,” it
further said.

Industry watchers
say it is better to run a delayed-but-credible poll rather than rush
and compromise the integrity of the electoral process, with the results
being almost immediately challenged in court even though new government
administrations usually take a while to settle into their respective
offices before the business of government resumes, the implication
being a delay in the economic activity.

“We expect the
one-week delay to have a modest effect, given the short time period, on
the resumption of economic activity,” Renaissance Capital said.

The Central Bank in
its last Monetary Policy Committee held in March reiterated that it was
keen to preserve exchange rate stability around the 150 naira to dollar
level, as any substantial currency depreciation would have a negative
impact on other macroeconomic control variables such as inflation.

The
Nigerian Export-Import Bank (MEXIM) says it is considering a credit
guarantee scheme for local small-scale industrialists. This is to
ameliorate the difficulties they encounter in securing credit
facilities from commercial financial institutions for their operations
and products exports.

The
bank’s managing director, Robert Orya, told NEXT in Abuja yesterday
that Export Credit Agency (ECA), which is mandated to provide risk
bearing and credit facilities in support of the country’s non-oil
export trade, is already in talks with top officials of the Nigerian
Association of Small Scale Industrialists (NASSI) to explore prospects
of developing a memorandum of understanding (MoU) for mutual support,
particularly as it concerns exportable goods, export and import
financing, capacity building, and strengthening of strategic alliances.

“We
hope to explore all avenues to build and strengthen the capacity of
small-scale industrialists and other categories of businesses by
guaranteeing credits to those that lack the requisite collateral to
secure loans from DFIs.

“But
the support would come only after the prospective beneficiary has met
all the requirements set by the Central Bank of Nigeria (CBN) for such
facilities,” Mr. Orya said.

Succour to industrialists

According
to Mr. Orya, a recent meeting with the NASSI officials had revealed
that most small-scale industrialists who neither have technical
capacity nor the requisite collateral to obtain loans and other
facilities from Development Financial Institutions (DFIs) often end up
being frustrated out of business, in total negation of government
objective to boost the country’s Small and Medium-scale Enterprises
(SMEs).

NASSI
president, Chuku Wachuku, said recently that problems often encountered
by manufacturers of exportable products in the country are usually
associated with the dearth of export incentives, lack of export-related
loan facilities to enhance the capacity to produce for exports, to earn
foreign exchange for the country, as well as absence of credits for the
acquisition of relevant machineries to manufacture value-added export
products.

Other
problems include the difficulty in establishing Letters of Credits
(LCs) to facilitate international trades, inability to enter into
bilateral and multilateral agreements for cross-border deals with
small-scale industrialists in other countries, and difficulties in
creating windows for the collateralisation of loans on special
facilities granted to industrialists.

But
the NEXIM boss, who described small-scale industrialists as the engines
of the private sector as well as catalysts for Nigeria’s economic
growth towards achieving the Vision 20:2020 goals, said the bank is
ready to commit its resources into any activity that would help achieve
its mission through the diversification of export-oriented investments
in the manufacturing, agriculture, solid minerals, and services
sub-sectors of the economy.

Acknowledging
the relationship between NEXIM’s mandate and that of NASSI,
particularly regarding the development of SMEs as well as facilitating
more investments in the identified sectors, Mr. Orya said that the
provision of adequate funding for export-induced value-added activities
for small scale industries would boost government’s effort in this
direction.

He
also said strengthening the Start-Your-Own-Business (SYOB) programme,
NEXIM’s self-employment initiative in partnership with the National
Directorate of Employment (NDE) for unemployed graduates and retirees,
would help in checking the high rate of unemployment in the country,
while NEXIM/NEXPORTRADE House Limited (NHL), a public-private
partnership initiative, would facilitate formal cross-border trade and
investments among member states of the Economic Community of West
African States (ECOWAS) and other African countries.

“NEXIM
has always supported SME start-up/green fields projects in various
sub-sectors of the economy, most of which have grown to be amongst
CBN’s top 100 exporters.

“From
inception in 1991 to date, we have intervened in the major sectors of
the economy, by disbursing over N60 billion and $273 million through 52
participating banks to over 400 beneficiaries, including 150 industrial
projects, in the manufacturing, agriculture/agro-allied, solid
minerals, oil & gas, and services sectors. Also, the bank has over
the years purveyed funding,” Mr. Orya said.

Oil prices rose to fresh two and a half year highs on Tuesday,
with Brent crude topping $122 a barrel as unrest in oil exporting countries in
the Middle East and Africa outweighed China’s fourth interest rate hike since
October.

The prospect of a stalemate prolonging the loss of 1.3 million
bpd of exports from Libya loomed amid unsuccessful efforts to end the war and
clashes over the oil town of Brega intensified. Brent crude for May LCOc1 was
84 cents up at $121.90 barrel after closing at $121.06 a barrel on Monday, the
highest settlement since August 1, 2008.

United States of America crude fell 42 cents to $108.05 a barrel
after settling at $107.78 on Monday, the highest since Sept. 22, 2008. “The
path of least resistance remains higher on account of both Middle-Eastern
headlines, as well as the watch-and-wait status coming from Nigeria,” said
Edward Meir at MF Global in a note. “The whole commodity complex seems to be on
the boil again, with precious metals, many of the base metals, and some of the
agriculturals, (like corn), all hitting record or recent highs.”

The fourth Chinese interest rate increase since October briefly
triggered a decline of around $1 a barrel in oil prices earlier in the session,
but oil pared losses as bloodshed continued in Yemen and anger brewed in
Nigeria over delayed elections. “The market doesn’t seem that bothered about
Chinese interests rates any more, which seems totally crazy to me,” said David
Morrison, a strategist at GFT.

Tight supply

Worries about oil supply turned to Nigeria after elections that
was postponed by a week due to logistical problems, sparking fury among voters
who were promised a break with a history of flawed and violent polls. Nigerian
militants have previously hit supplies of the country’s oil, a sweet crude that
has jumped to a premium as a result of the Libyan outages. “We have already
lost good grades in Libya, and now the elections in Nigeria are providing
further potential upside,” said Rob Montefusco, an oil trader at Sucden
Financial.

However, production was restarting in Gabon, which produces a
similar grade of oil, after energy worker strikes completely cut off the
country’s near 240,000 bpd of output.

Total and Royal Dutch Shell, key producers in Gabon, both said
they were working to restore normal production as soon as possible. Saudi
Arabia has raised supply and introduced lighter grades of oil to help fill in
for missing Libyan output, but traders question how much more room for output
increases remains. “Spare capacity is eroding together with the geopolitical
backdrop where Nigerian outages are very much on the cards with the upcoming
elections, upward pressure on prices could well continue,” said Amrita Sen, an
analyst at Barclays Capital.

Former Saudi oil minister Sheikh Zaki Yamani told Reuters oil
prices could leap to $200 to $300 a barrel if the kingdom is hit by serious
political unrest.

In this interview, the director general of the National Office
for Technology Acquisition and Promotion (NOTAP), says billions of naira are
spent annually not only on imports but also on technology transfer agreements,
adding that indigenous technologies can be veritable job creation tools.
Excerpts:

Educational institutions
should give Nigeria better technologies

No country that is modern, productive and has got visibility
that is not strong in science and technology. Nigeria cannot be different. All
the classification you have like first world, second, third world countries or
least developing countries is actually geared on the energy of science and
technology. Poor countries are those that cannot utilise their mental capacity
to take advantage of the opportunities available to them.

In our hospitals most medicines are imported, the equipment are
imported; in the banking sector most of our software is foreign software from
Oracle, Microsoft, Finacle and based on the work of others. Also if you look at
our industries, nearly one hundred per cent of the facilities, the machinery,
the know-how, the processes are all based on foreign technology. Therefore, it
is important for us to ensure that internally too, we domesticate these things.

We have the knowledge
infrastructure

Nigeria has a lot of universities, about 104 universities, 125
polytechnics and 500 research, development and implementation institutions at
federal government level, alone with over 100 colleges of education, yet we do
not have the technological capacity to drive our industries. We are not able to
feed our country with our own rice. We have land; we have water but do not have
the technology to produce our own rice. Even if we have, we are not using the
skill and know-how we need to look at our own herbs medicinal roots and process
it to drugs is what we do not have. So this office (NOTAP) is the one that
looks at all these.

If you open your gate as a country for people to bring in their
technology, money and know-how to come and make more money in your country and
depart, you are not doing well. What you should do is to use a magnate to
capture their technology and managerial know how and be made better. The
graduates from our institutions are those magnates, but if the magnates are bad
what can we do? So the education system has to push it. By now it should be Nigerians
exploring our oil, designing our refineries. By now we should not allow one
drop of crude to leave; let us refine them in this country. That is where the
jobs are but we are not taking this opportunity. NOTAP tries to reduce the gap
between our industries and our knowledge system. As we speak now, the gap is
too wide. Industry is looking at a different direction; hardly will you go to
our industries and see they are employing PhD holders. Here we are on the
consuming mode, consuming the research and output of other people. We have to
reverse.

NOTAP-Industry Research
Fund

NOTAP has this year made it absolutely clear to industries that
every industry operating in Nigeria, local, multinational, enterprises having a
fair amount of shareholding by foreigners must also have the interest of
Nigeria technologically. And therefore, I am happy to report to you that after
the conference we had in Lagos with manufacturing industries, we have decided
to establish NOTAP-Industry research fund. This is fund whereby industries will
now contribute money into so that we can use it to train PhDs. We believe that
is the innovative population that we need: practical, highly skilled manpower
for Nigeria, so that we too can start looking at technology we require to move
our country forward.

I have gotten commitment of about N200 million. With this we can
train more than 400 PhD holders. We are targeting first class honours that will
research in areas that are important to industries. Contributions have started coming
gradually. Secondly, for every manufacturing company that we are working with,
we have also an attempt to narrow the gap between the industry and the academia
and launched what we called Industry Educational Technology Programme. One of
the things we would do on this is to go to an industry, understudy what they do
and then produce a process graphics.

For example, we all eat Maggi from Nestle but do not know what
it is made of. The major ingredient for Maggi is soya beans. Our children know
soya beans, on the other side they see Maggi but do not know the link so we
told Nestle (Maggi producers) to give us the process pictorially from cleaning
the soya beans using machines, to formation, drying, grinding, mixing and
wrapping. These pictures are taken to primary schools and we will use them to
educate our children. The same we did with Nido. Children cannot connect cow
with Nido. We are doing the same with cement companies, the plastics,
Friesland, all the branded companies in Nigeria, we have requested the
companies to produce them for us. We will produce one million copies of each
and distribute to our primary and secondary schools free of charge. We make
sure that we train the teachers, so that we can now breed them from the bottom
that science is the way to go. We want to see kids in primary school say I want
to be a rich man because I can produce Maggi. I know how it is being done.

Technology transfer
agreement costs

Based on our registration process for these technology transfer
agreement, we have saved this country N25bn in ten years. There are some
companies that will come and would want to operate in Nigeria and take hard
currency for technology in a very shoddy manner. Sometimes the technologies are
not that costly but they are charging Nigeria high, so in this office we cut
it. There are some technologies that are old that we are not even supposed to
pay for and when we see it in the agreement, we cancel those agreement. Through
this process of reduction and cancellation, in the last ten years alone we have
saved this country billions, monies that would have left Nigeria to pay for
technologies we don’t even need. We are continuing on refining this process,
that we can only pay for technology that we require and we can gradually ensure
that as Nigerian engineers become better, this agreement will be less because I
can tell you that by law, any job that can be done by Nigerian is not supposed
to be done by anybody coming from outside.

From our record Nigeria has also spent over N300bn on technology
transfer agreement fees in the past 10 years also. This is primarily on
consultancy and software transferred to Nigeria. We are trying to digitise the
whole process so that at the punch of a button I can tell you not just what has
been remitted and how much but only sector by sector.

The economic plans of the presidential candidate of the All
Nigeria Peoples Party (ANPP), Ibrahim Shekarau, for Nigeria, as stated in the
party’s manifesto, are clear and developmental initiatives, but while some
finance analysts believe that those plans are achievable, others say they are
unrealistic and are mere campaign proposals.

According to ANPP’s manifesto, Mr. Shekarau, who is the current
governor of Kano State, will provide for Nigerians social and infrastructural
development through “good and well-managed economic policy” which will lead to
a developed society.

The ANPP said it will manage with enhanced transparency the
foreign exchange earning potentials such as petroleum, solid minerals and other
capital yielding products in other sectors, adding that commercialisation and
privatisation of mining operations will be encouraged while joint venture
arrangements between local and foreign investors will be vigorously pursued.
“Proper economic management includes giving priority attention to economic
resources development, diversification and protection,” it said.

Akinbade Ibisiola, a finance analyst at Resource Cap Company, a
fund management firm, said although he really did not know much about Mr.
Shekarau before the recent debate in which the candidate participated, “but he
won my heart that day. He spoke confidently and eloquently on his plans and
appeared like a man of his words who is prepared to rule this country with some
level of knowledge of the system. I think, if given a chance, he can give the
kind of leadership Nigeria needs and improve on the sorry-state of the
economy.”

Meanwhile, David Amaechi, a market analyst and an executive
member of the Shareholders Association of Nigeria, said Mr. Shekarau’s plans
for the economy is not “convincing.” He added that “With the current state of
development in Kano, the state he (Mr. Shekarau) led since 2003, it is obvious
that he has little to offer Nigeria as a whole. You cannot compare what is
happening in states like Lagos and Cross River with Kano in terms of
development,” he said.

However, Magret Asinobi, a jewellery dealer, who travels to Kano
occasionally for businesses, said Mr. Shekarau has done a lot for the people of
the state as against what some people believe. “He has really tried to reduce
poverty there and made going to school attractive for his people; may be
because he was once a teacher,” Ms. Asinobi said, adding that Mr. Shekarau has
also improved the level of social reorientation and security in Kano.

Energy sector

In the mean time, the ANPP said the chaotic state of the energy
sector has forced the national economic growth into a state of inertia thereby
stalling productivity and creating an unprecedented state of unemployment. The
party believes that the development of the industrial sector is the only answer
to the high cost of essential goods even in areas of food, medicine and
textile. “Conscious that a functional energy sector is the foundation of
sustainable development of our economy, ANPP in government would prioritise and
pursue a very aggressive result-oriented energy policy with a view to improving
upon the current state of electricity supply within six months of inception,
and achieving at least seventy-five percent steady power supply within two
years of inception,” the party said.

The ANPP also said it will wage a total war on corruption and
indiscipline through internal scrutiny of elected and appointed political
officers in order to lead by example. It added that it will also launch a war
against hunger and close monitoring of the application of Agricultural credits
and subsidies. The party, however, failed to give strategies on how it intend
to achieve housing issues as it only said it “will strive to provide a housing
policy that is common man friendly.” Beyond these promises, analysts say Mr.
Shekarau and his party have not adequately provided enough facts and figures as
to how to achieve the goals stated in the manifesto.

TOMORROW: Jonathan’s
economic agenda

The Central Bank of Nigeria, yesterday, said it is closer to
achieving its target ratio of less than 5 percent of nonperforming loans in the
country’s financial sector, with the successful acquisition of all bad debts of
the 21 banks by the Asset Management Company of Nigeria.

The bank’s deputy governor, Banking Supervision, Sam Oni, told
journalists at the end of the 302nd meeting of the Bankers’ Committee in Abuja
that “the purchase of all nonperforming loans of all the banks has effectively
restructured the balance sheets of all the banks, making them healthy and
competitive.” “The quality of the banks’ balance sheets is very high,” he said.

“Our target is to ensure that by the time the second round of
the exercise is completed, the nonperforming loans ratio in the country’s
financial sector should not exceed five percent. The CBN is encouraging banks
to fully charge off all those nonperforming loans that have been fully
provisioned to make their balance sheets very healthy and competitive. This is
a good development to further de-risk the financial system, make it stable and
ensure that the confidence that has been restored is sustained, to propel the
industry to greater heights.”

During the first round of the purchase, the asset company
restricted its attention to margin lending by the intervening banks from where
acquired over N1.036 trillion bad debts. However, in the second phase of the
exercise, the company issued additional N500 billion (about $3.3 billion) in
zero-coupon bonds to clear up the remaining bad debts by March 31.

The committee, which also reviewed progress by the various
interventions programmes by the Central Bank to strengthen the economy,
indicated that the percentage contribution, in terms of loans to the
agricultural sector to total industry loans, has doubled from 1 percent to more
than 2 percent in recent times. This was attributed to the commitment
demonstrated by all the banks to be more supportive to the growth of the real
sector, through the establishment of an agriculture desk to handle agricultural
loans in line with an action plan established two years ago for economic
development.

The criticisms

Two years ago, the banks came under serious criticisms that they
were not doing enough to support the real sector, particularly those critical
to the growth of the economy, particularly agriculture, transport, aviation,
railway, power as well as small and medium enterprises. Managing Director,
First City Monument Bank, Ladi Balogun, said that the industry would witness
rapid growth in banks’ participation in lending to the agricultural sector once
the central bank commences the Nigerian Incentive-based Risks Sharing System
for agricultural lending in the country.

Mr Balogun said several key projects have taken off in the power, and
transport sector as well as the SMEs through the various intervention funds
channelled through the Bank of Industry, in line with the objective of the
banking sector to support the real sector and ensure that those critical to the
growth of the economy received adequate funding. On the industry shared service
projects, indications were that significant progress in the various areas,
including industry-wide cash handling and electronic banking services as well
as IT standardization system by encouraging more of electronic banking, to
facilitate greater efficiency and help manage costs as well as reduce the use
of cash in transactions.