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And now, Algeria

And now, Algeria

So, on Saturday, the wind finally blew Algeria’s way.

Bordered by
Tunisia, where it all started, the so-called People’s Democratic
Republic of Algeria found itself shutting down Internet providers and
deleting Facebook accounts across the country as thousands of
protesters were arrested following street demonstrations.

No doubt taking
their cue from the people of Egypt and Tunisia, the citizens took to
the streets in the capital Algiers, demanding that the president –
Abdelaziz Bouteflika, who has been in office since 1999 – leave office;
this despite the fact that the government had initially banned the
gathering and warned citizens against joining the protest.

The conditions
that led to this final action are strikingly identical to those in
other parts of North Africa where protests have threatened the status
quo since the new year began: long-standing governance by state of
emergency, and a ban on public protest in Algiers. In response, an
estimated 26,000 riot police were set up to battle the demonstrators.
There were reports of 400 people detained, others stopped from coming
into cities, state-sponsored officials harassing journalists, and
plastic bullets and tear gas being used to disperse those arrested
during the five-kilometre-long march to 1 May Square in the capital’s
centre.

The Algerian
government decided to wage a concerted battle against the Internet, and
in a move to handicap the organisers and shut down their ability to
communicate with the rest of the world the authorities closed down
online access and stifled the demonstrators’ ability to organise
through Facebook.

Evidently,
something is happening across North Africa that the governments
couldn’t have imagined – a people pushed to the wall and pressed to the
ground have finally risen up to say enough of oppression and a
government that has continually refused to acquiesce to the wishes of
the citizens.

This is despite
the fact that these are a people who have been scarred by conflict
through their experience with the extremist Islamic insurgency in the
1990s that left hundreds of thousands dead. Indeed, Algeria has been a
hotbed of political crises, defined by the decade long battle for power
that lasted from 1992 to 2002.

But it was bound
to happen. An oil rich nation, Algeria has the eighth largest reserves
of natural gas in the world, yet the majority of the population –
especially its young people suffer from mass unemployment, a housing
crisis, debilitating poverty, all underpinned by political corruption.

The demands of the
protesters are for an end to the government of Bouteflika and its
19-year state of emergency. Mounting grievances over the spiralling
cost of food and unemployment finally exploded in the riots that began
early this month, no doubt encouraged by public protests in Tunisia
that forced its president Zine El Abidine Ben Ali to flee on January 14.

The Algerian
government tried to respond by reducing the prices of oil, sugar and
other basic necessities, and promising continued subsidies. Still the
people remain angry and in the past two weeks, almost 10 martyrs have
set themselves on fire.

This happens to be
the second time this year that ordinary Algerians are taking their
destinies into their hands. In January, at least five people were
killed and 1000 arrested as citizens took to the streets. Now the
February 12 Revolution – and the overflowing police cells – make an
eloquent statement: when a people decide that they have had it, there
are not enough army tankers to hold back the momentum.

Without a doubt,
what is happening is a people-power uprising that comes from years and
years of sitting down and taking it. As one of the protest leaders
noted, “Algerians want their voices to be heard too. They want
democratic change.” Right now, the rally has been disbanded and a
surface calm has returned to the country’s capital, but as another
protest leader told the media, in an ominous sign to dictators all over
the continent: “The fear is now gone,” he said.

Algeria’s
president should pay attention to these words. If not, he will soon
find out what Mr. Mubarak did too little too late – that the change
this time, is inevitable. Resistance is futile.

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Egypt: The next step

Egypt: The next step

When I was a young
man in Cairo, we voiced our political views in whispers, if at all, and
only to friends we could trust. We lived in an atmosphere of fear and
repression. As far back as I can remember, I felt outrage as I
witnessed the misery of Egyptians struggling to put food on the table,
keep a roof over their heads and get medical care.

Half a century
later, the freedoms of the Egyptian people remain largely denied.
Egypt, the land of the Library of Alexandria, of a culture that
contributed groundbreaking advances in mathematics, medicine and
science, has fallen far behind. More than 40 percent of our people live
on less than $2 per day. Nearly 30 percent are illiterate, and Egypt is
on the list of failed states.

Under the three
decades of Hosni Mubarak’s rule, Egyptian society has lived under a
draconian “emergency law” that strips people of their most basic
rights, including freedom of association and of assembly, and has
imprisoned tens of thousands of political dissidents. While this
Orwellian regime has been valued by some of Egypt’s Western allies as
“stable,” providing, among other assets, a convenient location for
rendition, it has been in reality a ticking bomb and a vehicle for
radicalism.

But one aspect of
Egyptian society has changed in recent years. Young Egyptians, gazing
through the windows of the Internet, have gained a keener sense than
many of their elders of the freedoms and opportunities they lack. They
have found in social media a way to interact and share ideas,
bypassing, in virtual space, the restrictions placed on physical
freedom of assembly.

The world has
witnessed their courage and determination in recent weeks, but
democracy is not a cause that first occurred to them on January 25.
Propelled by a passionate belief in democratic ideals and the yearning
for a better future, they have long been mobilising and laying the
groundwork for change that they view as inevitable.

The tipping point
came with the Tunisian revolution, which sent a powerful psychological
message: “Yes, we can.” These young leaders are the future of Egypt.
They are too intelligent, too aware of what is at stake, too weary of
promises long unfulfilled, to settle for anything less than the
departure of the old regime. I am humbled by their bravery and resolve.

Many, particularly
in the West, have bought the Mubarak regime’s fiction that a democratic
Egypt will turn into chaos or a religious state, abrogate the fragile
peace with Israel and become hostile to the West. But the people of
Egypt – the grandmothers in veils who have dared to share Tahrir Square
with army tanks, the jubilant young people who have risked their lives
for their first taste of these new freedoms – are not so easily fooled.

The United States
and its allies have spent the better part of the last decade, at a cost
of hundreds of billions of dollars and countless lives, fighting wars
to establish democracy in Iraq and Afghanistan. Now that the youth of
Cairo, armed with nothing but Facebook and the power of their
convictions, have drawn millions into the street to demand a true
Egyptian democracy, it would be absurd to continue to tacitly endorse
the rule of a regime that has lost its own people’s trust.

What needs to
happen instead is a peaceful and orderly transition of power, to
channel the revolutionary fervour into concrete steps for a new Egypt
based on freedom and social justice. The new leaders will have to
guarantee the rights of all Egyptians. They will need to dissolve the
current parliament, no longer remotely representative of the people.
They will also need to abolish the constitution, which has become an
instrument of repression, and replace it with a provisional
Constitution, a three-person presidential council and a transitional
government of national unity.

The presidential
council should include a representative of the military, embodying the
sharing of power needed to ensure continuity and stability during this
critical transition. The job of the presidential council and the
interim government during this period should be to set in motion the
process that will turn Egypt into a free and democratic society. This
includes drafting a democratic constitution to be put to a referendum,
and preparing for free and fair presidential and parliamentary
elections within one year.

We are at the dawn
of a new Egypt. A free and democratic society, at peace with itself and
with its neighbours, will be a bulwark of stability in the Middle East
and a worthy partner in the international community. The rebirth of
Egypt represents the hope of a new era in which Arab society, Muslim
culture and the Middle East are no longer viewed through the lens of
war and radicalism, but as contributors to the forward march of
humanity, modernised by advanced science and technology, enriched by
our diversity of art and culture and united by shared universal values.

We have nothing to fear but the shadow of a repressive past.

Mohamed El Baradei is a Nobel Peace laureate and former director general of the International Atomic Energy Agency

© 2011 The New York Times

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Stock market closes on negative note

Stock market closes on negative note

Investors
at the Nigerian Stock Exchange (NSE) on Monday recorded more losses on
the value of their equities, as market closed trading on a negative
note.

The NSE market
capitalisation of the 201 First-Tier equities closed yesterday at N8.501
trillion after opening the day at N8.528 trillion, reflecting 0.31 per
cent decline or N27 billion losses. The market had lost over N168
billion during last week’s trading session.

Commenting on
Monday’s trading performance, analysts at GTI Capital, a stockbroking
firm, said the same growth that was recovered in the market last trading
day of the previous week was again “snatched back by the bear
(downturn) at the end of Monday’s transactions.” They said investors
watched market activities yesterday with close attention wondering if it
would bounce back.

Low gainers

The number of
gainers at the close of trading session on Monday closed lower at 19
stocks while losers closed higher at 31 stocks.

Custodian &
Allied Insurance and Nigerian Bags Manufacturing topped the price
gainers’ table with an increase of five per cent and 4.95 per cent, to
close at N3.36 and N3.18 per share, respectively. Wema Bank and RT
Briscoe followed on the gainers’ table with an increase of 4.83 and 4.71
per cent, to close at N1.52 and N2.89 per share.

On the flip side,
Livestock Feeds and Skye Bank led the price losers’ chart with a loss of
five per cent each, to close at 57 kobo and N9.50 per share,
respectively. Fidson Healthcare and Intercontinental Bank followed with a
loss of 4.92 and 4.88 per cent, to close at N2.51 and N2.73 per share.

Active sectors

The Banking
subsector led the most active subsectors’ chart with 158.807 million
volumes of shares, valued at over N987.093 million. Volume in the
subsector was driven by Unity Bank, Sterling Bank, Finbank, and First
Bank.

Trading activities
in the Media subsector followed with 65.004 million volumes of shares
valued at over N32.502 million. Deals in shares of Daar Communications,
the most traded stock on Monday, largely boosted volume in this
subsector.

The Building
Materials subsector was third in the chart with 13.408 million volumes
of shares worth N567.048 million. Volume in the subsector was driven by
Lafarge Wapco, Ashaka Cement, and Cement Company of Northern Nigeria.

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International banks suspend Ivorien operations

International banks suspend Ivorien operations

Two
large international banks suspended operations in Cote d’Ivoire on
Monday as a power struggle following a disputed presidential election
tightened its grip on the economy of the world’s top cocoa grower.

French bank, BNP
Paribas’s Ivorian unit, the second biggest banking operation in the
country, was closed due to security concerns, an official said.

Citibank also said
it would be closed on yesterday, giving no official reason but saying it
would continue to monitor the situation.

BNP Paribas and
Societe Generale have around two thirds of the Cote d’Ivoire market.
Citibank is a smaller operation with no retail arm but is the largest
corporate financer for Cote d’Ivoire’s oil and gas operations, the main
creditor of its 80,000 barrel a day refinery and the third biggest cocoa
exporter financer.

The West African
nation has been in turmoil since a disputed November 28 presidential
election between incumbent Laurent Gbagbo and rival Alassane Ouattara.
Gbagbo’s planning minister condemned the bank closures and said they
were breaking the law.

United
Nations-certified election commission results named Ouattara the winner,
but the result was reversed by a pro-Gbagbo legal body and the
incumbent remains in power despite international sanctions and threats
of military force.

“The entire BICICI
network is closed until further notice. The head office in Paris
informed us of this decision yesterday at around 2300 (GMT). I’m staying
home today,” the official, who could not be named because of death
threats against other banking staff, told Reuters.

A spokesperson for Citi in Paris said the bank was closed on Monday and the bank was monitoring the situation.

The power struggle
has hit the banking sector as Ouattara, backed by western nations and
regional bodies, try to cut Gbagbo’s access to funds to force him from
power. West Africa’s monetary union last month cut off his access to
state accounts at West Africa’s BCEAO central bank.

“It was becoming
very difficult for those banks to operate in Ivory Coast because they
can’t use the BCEAO platform any more,” Standard Bank analyst, Samir
Gadio, told Reuters.

Gadio said that
procedures that usually took an hour were now taking up to eight days,
and added that there was a “reputational risk if they continue to
operate in Ivory Coast … (and are) seen as allowing Gbagbo’s regime to
survive”.

Endgame?

Western nations have slapped travel bans and sanctions on a range of individuals and organisations backing Gbagbo.

Cocoa exporters have
stopped registering new beans for export as a result of the sanctions,
and a ban called for by Ouattara. Cocoa futures touched their highest
levels in over a year on Monday as fears grew that the ban, initially
put in place on January 24 for one month, would be extended.

But Ouattara remains
trapped in a lagoon-side Abidjan hotel, protected by U.N. peacekeepers
while Gbagbo, who has the backing of the military, remains in control of
government buildings.

“The government
condemns the illegal character of this decision … By proceeding with
their closure, BICICI and Citibank are … seriously contravening their
obligations under banking law. (We) will not tolerate these acts of
defiance,” budget minister, Kone Katinan, said on state TV.

After being cut off
from the regional bank, Gbagbo sent soldiers to seize its Abidjan unit
and appropriate local reserves, forcing the bank to close its Cote
d’Ivoire operations completely and causing problems with liquidity and
cheque clearing.

Banking sources say
the military has since intimidated banks into participating in a new
clearing system set up in the building Gbagbo seized. Some have received
death threats.

“Gbagbo is not going
to leave just because the banking system has shut down … he will
leave the day his life is at stake,” Gadio said.

“But this is going to speed up the endgame. I don’t see how the salaries are going to get paid,” he added.

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Consolidating stockbroking firms can derail market growth

Consolidating stockbroking firms can derail market growth

Ordinarily, consolidation makes a position of power or success stronger so that it is more likely to continue.

Several enterprises
have utilised consolidation by way of mergers, acquisitions, and
combinations to avert failure or grow their businesses. However, it is a
risky double-edged sword that could mar the fortunes of enterprises if
improperly conceived.

The case of
Nigeria’s banking industry is a vivid illustration of how forced
consolidation can derail the orderly growth of an entire industry.
Experience has shown that consolidations that work are those driven
internally by enterprise peculiar needs rather than industry wide
imposition by external forces.

In context of free
market economy, consolidations are treated with utmost suspicions as
they could engineer emergence of monopolies or oligopolies which stifle
competition to the detriment of consumers. For economic sectors where
unfettered competitions precede the attainment of perfect market,
anti-trust regulators resist combinations that could breed monopolies.

Soon after
consolidation of Nigeria’s banks and emergence of 25 mega banks out of
the 89 that hitherto existed, monetary regulators were forced to
introduce Microfinance Banks (MFBs) to fill the void that arose from
constriction. Today, there are over 400 MFBs servicing the neglected
needs of Small Scale Enterprises that generally had no access to credits
from the mega banks.

A similar fate
awaits retail clients in the stockbroking industry if consolidated into
fewer numbers of firms. The few emergent large firms will set
prohibitive minimum requirements which retail investors cannot meet,
thus denying a large segment of Nigerian investors’ direct access to
investment opportunities in the nation’s capital market. It is common
knowledge that before global meltdown, several large stockbroking firms
set N5 million as minimum investment entry requirement to open
investors’ stockholding accounts.

The stock market is a
mass market. Its capital formation power is derived from mass
participation driven by investors’ confidence which stockbrokers work
strenuously to cultivate. Large number of stockbroking firms in a
country as populated as ours constitute the vital bridges that connect
an equally large number of diverse investors who are remotely located to
the capital market. With fewer stockbrokers, the bridges will also be
fewer.

Odife reform panel
on the capital market even advocated multiple stock exchanges and
capital trade points to bring capital formation mechanism close to the
grass root in Nigeria. Had his recommendations been implemented, several
more stockbroking firms would have been required to trade on those
platforms. Odife’s expansionary reform, geared towards growth of the
capital market and the economy at large, remain superior as remedy to
challenges that beset the market today, rather than moves to consolidate
into monopolies and elitism.

In recent past,
consolidation of Stock Exchanges was a popular reform theme in the
global capital market. This worked against establishment of multiple
stock exchanges in Nigeria. However, to date, all major European stock
exchanges and Asian stock exchanges have failed to consolidate into one
entity.

As a result, global
competition among stock exchanges has continued with undiminished
intensity. China is even establishing more stock exchanges with
fanatical zeal. Major stock exchanges including London, Frankfurt,
Paris, Hong Kong, Tokyo etc have maintained their individual identities
because the cultures and structures of capital markets and economies
they serve differ from place to place.

Between banking and stockbroking

Renewed threat by
government after previous hesitation to consolidate capital market
operators in Nigeria with possible increase of minimum capital base of
stockbroking firms from N70 million to N1.5 billion, has stimulated
public debate about desirability of the move at this time when the
capital market is just recovering from a major catastrophic meltdown.

In spite of the now
evident disaster consolidation wreaked on the banking sector,
stakeholders are surprised that the bandwagon effect continues to haunt
other sectors of the finance industry, fundamental differences between
banking and stockbroking notwithstanding.

For clarity, banking
is a trade in which the relationship between the banker and his
customer are Debtor and Creditor respectively. In contrast, stockbroking
is a profession in which the relationship between the stockbroker and
his client is Agent and Principal respectively.

The capital base of a
bank is security required to mitigate the risk of non performance of
risk assets created from customers deposit liabilities because the risk
assets are owned by the bank. Whereas, in stockbroking, the assets
purchased for investor clients are owned and registered in names of the
investors.

Because stockbrokers
do not create risk assets, their need for capital is only limited to
infrastructure they require to efficiently deliver their professional
services. All over the world, professional service providers including
stockbroking firms, carry unlimited liabilities and mitigate their risks
with fidelity guarantee insurance. It is for this reason that the
highest capital requirement for stockbroking in India prescribed by
Bombay Stock Exchange is equivalent of N2 million. Other 22 stock
exchanges in India prescribe lesser amounts. India is about the fifth
largest economy in the world. The country has a large population and
similar neo-colonial economic heritage as Nigeria, yet its capital
requirement for stockbroking firms is so infinitesimal compared to
Nigeria’s current N70 million.

Although
consolidation could lead to large entities and economies of scale up to
the point of diminishing returns, there is no concrete evidence that
size alone is panacea for cost effectiveness, efficiency of service
delivery, and profitability.

Today, Nigeria’s
finance industry is replete with several distressed large stockbroking
firms, failed rescued big banks, succeeding and strong small banks and
stockbroking firms.

The competitive
future of Nigeria can only materialise if market mechanism determines
free entry and free exit of economic enterprises under effective market
friendly regulatory framework.

Adonri is the CEO, Lambeth Trust & Investment Company Ltd, Lagos

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South Africa index

South Africa index

Johannesburg’s
All-share stock index hit a record high on Monday, helped by a rise in
some resource-related companies such as BHP Billiton.

Stocks in Africa’s biggest economy have been helped by investor appetite for commodities and emerging market equities.

The All-share, the
broadest measure of South African stock performance, touched 33,334.55
in early trade, surpassing a previous high of 33,309.82 set in May 2008.

“I don’t think it
will go aggressively higher from here in the short term. Normally what
happens if you get a market that tests an all-time high, it won’t bust
through it and move up higher,” said Andrew Todd, a trader at Imara SP
Reid.

“It normally pulls back a bit and consolidates for a couple of days, or even a couple of weeks,” he added.

The benchmark Top-40
index of blue chips was up 0.61 per cent at 29,994.56 after earlier
hitting 30,195.81, its highest since June 2008.

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Kenya shilling weakens on energy demand

Kenya shilling weakens on energy demand

Kenya’s shilling was
slightly weaker against the dollar on Monday, pressured by dollar
demand from the energy sector and traders said they see the shilling
gaining once tea exports start flowing to Egypt.

At 0815 GMT, commercial banks quoted the local currency at 81.35/55, from Friday’s close of 81.40/50.

“The shilling has
been under a lot of pressure for a while from oil sector dollar demands
and handicapped inflows from tea exporters due to the Egypt crisis,”
said Kennedy Butiko, deputy head of treasury at Bank of Africa.

East Africa’s
biggest economy, which heavily relies on hydropower for its electricity,
has been suffering a drought since late last year and meteorologists
warn that the dry spell could extend into the first half of this year,
spurring demand for diesel to power generators to plug the expected
electricity shortfall.

Egypt’s president,
Hosni Mubarak, stepped down on Friday, bowing to pressure from the
citizens who protested for over two weeks.

During the duration
of Egypt’s protests, Kenya was affected as it couldn’t export tea into
the countries of its leading buyers. Traders said they are expecting the
turn of events to get the sales moving again, offering relief to the
shilling.

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Fadama groups receive N2.8m farm implements

Fadama groups receive N2.8m farm implements

Fadama user groups
in Aragba-Orogun, Ughelli North local government area of Delta State,
have received farming tools worth N2.8 million.

The coordinator of
the Fadama III Project in the state, Anthony Abanum, told the News
Agency of Nigeria (NAN) in Asaba that the items were given to the groups
to enhance their members’ productive capacity.

Mr. Abanum listed
the farm implements handed to the Fadama groups to include 88 bicycles,
cutlasses, knapsacks, sprayers, cans of herbicides, and files.

He named the
benefitting Fadama groups as Oyevwerhi Farmers, Efe Maize Farmers,
Mudiaga Cassava Farmers, Ufuoma Cassava Farmers, and Ese-Oghene Cassava
Processing Association.

The coordinator
added that the Akpoesiri and Ofuobi Fadama Community Associations also
benefited from the gesture which, he said, was part of measures to boost
agricultural production in the state.

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Abuja market to have pre-paid meters

Abuja market to have pre-paid meters

The Garki Model
Market in Abuja would soon have pre-paid electricity meters, an official
of the market told the News Agency of Nigeria (NAN) on Monday in Abuja.

The market has been without electricity since January 2010 because of a N23.7 million debt owed the PHCN.

Innocent Amaechina,
head, corporate affairs, Abuja Markets Management Ltd. (AMML), managers
of the market, told NAN that arrangements had reached advanced stages
for the installation of the meters.

“We are looking for a
lasting solution and that is why PHCN is partnering with us to see that
prepaid meters are brought in. It will be pay as you go. Your billing
will be independent of mine, so that if you don’t pay, it will not
affect mine,” Mr. Amaechina said.

He also said plans were on to offset outstanding debts.

“Graciously, PHCN
offered that the debt be spread over months, so that the burden will not
be so much on the traders. So, as you are paying your current bill, you
are also making provision for the outstanding debt,” he said.

NAN reports that traders in the market had been depending on power
generators since 2010 when they had been at loggerheads with the traders
association on the one hand and the AMML on the other.

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Sokoto State donates N80m to flood victims

Sokoto State donates N80m to flood victims

The Sokoto State
government has donated the sum of N80 million to the 681 flood victims
in Gwadabawa local government area of the state.

The state
commissioner for water resources, Umaru Walin-Isa, disclosed this on
Sunday in Huchi village while addressing the victims before the
commencement of the disbursement of the money to them.

Mr. Walin-Isa said
that the beneficiaries were drawn from Huchi, Kagara, and Kaura-Daudu
villages and that majority of them lost their houses and farmlands in
the September 2010 flood disaster that affected the state.

He said that any
victim who lost a room or a fence would receive N10,000 while each
hectare of farmland lost would attract N20,000.

“The minimum amount
to be given to a beneficiary is N10,000 while the maximum is N230,000.
The money is not a compensation but a gesture aimed at alleviating the
suffering of the flood victims,” he explained.

He urged the beneficiaries to use the money for the purpose it was meant, to reduce some of the hardship caused by the disaster.

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