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The Nigerian naira
eased against the U.S dollar on the interbank market on Monday after
the Central Bank sold dollars at a higher rate than last week at its
foreign exchange auction.

The naira closed at
155.85 to the dollar on the interbank market compared to 155.15 at
Friday’s close, although the sale of $400 million by state-owned energy
company NNPC helped prevent it from slipping further.

“We have NNPC funds
in the market, about $400 million, but those who received the dollars
are not selling, possibly covering their short positions with the
funds,” one dealer said.

Traders said some
of the banks were holding onto the funds in view of the closing gap
between the central bank’s official rate and the interbank rate.

The central bank
sold $300 million at 153.18 to the dollar at its latest bi-weekly forex
auction on Monday, short of the $352.54 million demanded and compared
to $350 million sold at 153.02 a dollar at the previous auction last
Wednesday.

A one percent
commission charged at the forex auction meant dollars effectively cost
154.71, narrowing the gap with the interbank rate.

NNPC is the largest
supplier of foreign exchange to the interbank market with its large
monthly dollar sales usually providing support for the local currency.

Some analysts said
continued weakness in foreign reserves compared to year-ago levels were
continuing to put pressure on the naira.

Nigeria’s foreign
exchange reserves fell to $32.66 billion by May 5 from $34.55 billion a
month earlier and remain significantly lower than a year ago. They
stood at $40.12 billion by May 5, 2010.

Dealers said the
naira could weaken further in the coming days unless the central bank
moves to reassure the market that it will continue to support the naira
at current levels.

REUTERS

Stakeholders in the
cement industry have expressed concern over the increasing prices of
the product across the country in the last four months.

Some have attributed the situation to problems of inadequate supply, high transportation cost and policy somersault.

A survey conducted
by the News Agency Nigeria (NAN) across the country showed that prices
of the different brands of cement have gone up by an average of 44
percent in the past four months.

A bag of cement, which was sold for an average of N1, 500 in December 2010 is now on the average of N2, 500.

The cost of cement has now become a sensitive issue like that of petroleum products and food items.

The major brands of cement in the country are: Ashaka, Ibeto, Burham, Bua, Elephant and Dangote.

They are
manufactured in different locations across the country although dealers
said the Dangote brand is the most popular as it is more readily
available in the market.

Abdulkadir Ibrahim, a civil servant in Kano, described the rising prices of cement as “painful and incredible.”

“I am just building a corner shop near my house and it is taking me years to actualise it because of high prices of cement.

“I used to buy a
bag of Dangote cement for N1, 800 just four months ago, but now it
costs N2, 350. Government must do something about this,” Ibrahim said.

Aliyu Mahmood, a businessman in Kano, also bemoaned the high and unstable prices of cement across the country.

Supply deficit

“If I buy a bag of
Ashaka cement for N2, 150 today, tomorrow they will increase the price
to N2, 250 because of the scarcity. This is traumatic,” Mr Mahmood, who
is building a duplex in Kano, said.

The survey showed that the rising prices are often market induced because of supply deficit.

NAN reports that
cement dealers in Akure, Ondo State, have confirmed the scarcity of all
the brands which, they said, had in turn affected the prices.

Funso Omotola, a
dealer on Idanre Road, Akure, told NAN that price of Elephant brand of
cement rose to as high as N2, 750 in late March due to short supply and
high demand for the product.

Stakeholders alleged that some cement manufacturers were taking advantage of the supply gap to increase prices arbitrarily.

An official of
Ashaka Cement depot in Kaduna, who pleaded anonymity, told NAN that a
bag was sold for N1, 500 in November last year, but since then, the
depot had not received any supply.

Some dealers have also blamed high transportation cost for the recent hike in prices of cement.

Abdullrasaq Usman,
a cement distributor at Kaduna North Railway Station, told NAN that it
used to cost them N80, 000 to transport 600 bags of cement from Obajana
in Kogi State to Kaduna.

Mr Usman said it now cost N300, 000 to transport same quantity to Kaduna due to the scarcity of diesel.

“The cost of a
trailer load containing 600 bags of cement is N912,000 while
transportation cost is N300,000, which makes the unit price N2,020 from
the manufactures,” he said.

Price fluctuations

Dele Ade-Ojo, an
engineer and Head of Works Department at a local government secretariat
in Akure told NAN that fluctuations in the prices of cement has greatly
affected construction works in the council.

To accommodate the
high cost of cement, the engineer said he had to come up with so many
cost variations on projects he was handling.

A report from
Cement Manufacturers Association of Nigeria (CMAN) and Renaissance
Capital on cement situation in Nigeria confirmed that there was a
supply deficit which local producers had not been able to meet despite
investments in new plants.

“The high costs of
doing business in Nigeria and other factors have helped to keep
capacity utilisation at an industry average of 68 percent over the last
five years,” CMAN said.

NAN

Trading activities
in Starcomms’ shares yesterday boosted market volume as the quantity of
shares transacted during the day rose by 26.11 percent as against a
marginal increase of 6.59 percent recorded last trading day. A total of
371.664 million shares were traded compared to 294.696 million at the
previous trading session last Friday.

Investors traded
69.569 million units of Starcomms’ shares worth N50.674 million on
Monday while the company’s share price, listed under the Nigerian Stock
Exchange’s Information & Communication Technology subsector, rose
by 2.74 percent to close at 75 kobo per share. The large traded volume
was followed by Zenith Bank, United Bank for Africa and FinBank.

Olugbenga Emmanuel,
a finance analyst at WealthZone Company, a portfolio management
company, said the investors’ confidence may not have been restored at
the nation’s bourse, “but some institutional investors are currently
buying some stocks at low prices; taking advantage of sellers’
enthusiasm despite the continuous decline in the entire market
performance.”

Decline continues

Meanwhile, the
market capitalisation of equities at the stock exchange depreciated by
0.16 percent at the close of trading session on Monday. The NSE market
capitalisation of the 194 First-Tier equities closed yesterday at
N8.071 trillion after opening the day at N8.084 trillion, reflecting
N13 billion losses.

The NSE All-Share
Index yesterday shed 0.15 percent or 37.96 units to close at 25,262.50
basis points from the 25,300.46 recorded at the beginning of the day’s
trading.

The number of
gainers on Monday closed lower at 33 stocks compared to the 35 stocks
recorded last Friday. UAC Properties topped the gainers chart for the
day with five percent appreciations or 80 kobo to close at N16.81 per
share. On the losers’ side, a total of 21 stocks recorded price decline
compared to the 19 stocks that declined in the previous trading day.
Diamond Bank topped the losers chart with 4.97 percent depreciation or
37 kobo to close at N7.08 per share.

At the close of
trading yesterday, the banking subsector led the most active
subsector’s chart with 195.526 million quantities of shares, valued at
N1.609 billion. Volume in the subsector was largely driven by Zenith
Bank, followed by United Bank for Africa and FinBank.

The Information
& Communication Technology subsector was second in the most active
subsectors’ chart with 69.599 million volumes of shares, valued at over
N50.689 million. Starcomms, the most traded stock for the day, largely
boosted volume in the subsector, followed by Chams Plc.

Trading activities
in the Insurance subsector was third in the chart. Investors in the
sector exchanged 33.653 million volumes of shares, valued at N19.661
million.

Deals in shares of Equity Assurance, NEM Insurance, Universal Insurance Company,

and Goldlink Insurance boosted volume in the subsector.

Some Nigerian
businesses that took part in the just concluded World Economic Forum
(WEF) in Cape Town, South Africa, have proffered suggestions they hope
would help facilitate inclusive economic growth, not only in Nigeria,
but throughout Africa.

Group chief
executive, Oando Group, Wale Tinubu, who featured as one of the
co-chairs at the three-day forum, called for the removal of all
artificial trade barriers in the way of businesses in Africa, while the
group deputy managing director, BGL Plc, Chibundu Edozie, sees the
expansion of the scope of businesses beyond the Nigerian market as the
way to build inclusive economic growth in the continent.

Strong African strategy

Mr Edozie said
Nigerians should abandon the fixation with the size of the Nigerian
market and focus attention on the entire continent, in view of the
increasing global interest in Africa’s potentials.

“As against the
Nigerian market of about 150 million people, the African market is a
billion people, with an already existing catchment of trades and
products. Though Nigeria should remain the core focus of their business
operations, Nigerians should start looking at very strong African
strategy, considering that the market is largely African, with the
world beginning to wake up to the reality of the need for Africa’s
economic integration,” he said.

Mr Tinubu, who was
invited to by the organizers to showcase the potentials of homegrown
companies that do business to world class standards and are identified
as emerging regional champions, said removal of all artificial
bottlenecks by governments to trade facilitation in the continent is
the fastest way to achieve economic integration in the continent.

He listed those
bottlenecks to include imposition of visa restrictions to citizens of
Africa; closure of national borders between countries in Africa, and
dearth of infrastructure, like roads and rail lines for easy movement
of persons and goods as well as protectionist policies by governments
barring African companies from doing businesses in other African states.

Inclusive economic growth

“The issue of
inclusive economic growth is all about regional integration. But, there
is the urgent need to open up the borders between countries in Africa
to facilitate movement of goods and services. If Africa is to create
one big market for goods and services, people have got to be able to
move around,” he said.

“There is also the
need for the rehabilitation of the infrastructure, like roads and
railway systems, to link the countries of Africa, to ensure easy
movement of persons and goods for business. One cannot create a global
market by erecting artificial barriers.”

While commending
the common passport by the Economic Community of West African States as
a big step in the right direction to achieve regional economic
integration, Mr Tinubu said governments in the region should move
quickly to consolidate on the gains of that policy by establishing a
common currency regime.

On the home front,
the Oando boss urged government to create a path for the growth of the
downstream sector of the country’s petroleum industry, by allowing full
deregulation policy, pointing out the plan to spend about $6 billion
this year on petroleum products subsidies will continue to hurt the
economy, as it will amount to merely managing the symptoms of the decay
in the economy, rather proffer concrete solutions.

Subsidy removal

“If $6 billion to
be used in petroleum subsidy is saved for one year, the country can
build a mass transit railway system that would help solve the
transportation problem of the country, which will serve the people for
a lifetime,” he noted.

Though he
acknowledged that the decision to quickly remove the subsidy would
create shock among consumers, Mr Tinubu suggested a two to three-year
plan by government, that can outline the achievement of demonstrable
capital-intensive infrastructure that Nigerians can identify with,
using the savings from the withdrawal of petroleum subsidy.

He identified Oando as a growth business that is continually
exploring new ways to satisfy the need of the economy, adding that the
company’s growth is driven by the demand for its services and products
in the different sectors of the economy, which is not going to be
satisfied by multinationals.

I readily confess
to a fascination with the “theory of unintended consequences”. But, a
small clarification before anything further is written. My interest is
not in the certainty that everything that may go wrong about a policy
choice/decision is bound to. Confronted by almost six decades of inept
and often cynical management of this economy, it is to be expected that
we have come to associate “unintended consequences” with “negative
outcomes”.

In truth, put this
way, my central narrative is but a variant of Murphy’s Law. Instead, my
enthralment is with the benefits, losses, or wrong signals arising from
a particular action, but which were not conceived of in or intended as
part of the original action plan.

Newspaper headlines
on workers’ day, May 1, were all of one flavour. In their addresses to
the different labour rallies, state governors all pledged to implement
the new minimum wage. Not too long ago, the same persons had argued
that their state government budgets could not bear the extra financial
burden from paying the new minimum wage. What had changed since then? I
could think of only one proximate explanation: the events of late
April, this year.

On balance, the
last polls in the country appear to have moved the social engagement
envelope several notches up. The “voice” of the people was heard loud
and clear, amidst the din of many a strong man’s battered ego. That was
the intended consequence of the clamour over the years for a democracy
in which every vote is counted, and every vote counts.

To the extent that
it acts as counter-weight to the dominant culture of impunity that has
come to define our polity, a representative democracy ought to improve
both the collective capacity to choose, and the different cabinet’s
will to execute.

Perverse results

However, to the
extent that politicians interpret “re-election” as the main challenge
of a democracy, then even the best voting process could have perverse
results. One such result is the rise of populist politics. Because the
masses may now have the power of the vote, what is to stop unscrupulous
politicians from pandering to its basest instincts? To take but a few
examples, a thin line separates the need for higher taxes on the
affluent in aid of society’s redistribution responsibilities from a
restraint on commerce as part of an ill-advised process of
democratising poverty; a no less blurred space sits between the need to
protect employment for locals and xenophobia.

A less than honest
treatment of the policy choices at the heart of these two examples
could lead politicians in a race to the bottom of the dump yard; more
so in a democracy where people have only just begun to savour the power
that rightfully belongs to them. Our best bet is a lot more conviction
at the top. For leadership is not solely about bending resources and
capacity to the discharge of the popular will. It is more about shaping
the choice space. Agreeing a desired destination, and selling this to
the electorate. It is, in this very narrow sense, a question ultimately
of shaping the popular will. Of leading it down paths where only
visionaries have travelled previously.

Again as between a
visionary leader and a demagogue, the thinnest of lines demarcate. So
we arrive at the point where we must agree that even under the best of
representative democracies, the threat of continued misrule in this
country does not evaporate overnight. This danger is heightened by the
prevalent low levels of education in the country, both of the classroom
variety, and of the civic one, which can only come from a long thriving
civil society.

In the absence of such a society, then, our hopes for a better
tomorrow, in the short-term, at least still depend on the quality of
leadership we get. In the absence of a functioning democracy, a
benevolent caudillo almost became a popular fancy. One, who,
understanding the need for progress along modern lines, a la Singapore
and Malaysia, rammed that vision through society. Once we change the
rules of the game through trying to run elections properly, we deny
this possibility. Instead, the new need is for conviction politicians,
prepared to argue their corner as strenuously as the most modern
constitution permits, while eschewing popular lines.