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Egypt’s Central
Bank warned on Wednesday it was prepared to intervene directly in the
currency market again after purchases on Tuesday strengthened the pound
by more than one per cent.

The Egyptian pound
has been falling steadily since the eruption of political protests on
January 25, and traders and strategists expect more losses. UBS
analysts put the potential decline at as much as 25 per cent within a
month.

“We will intervene
when we see the market is not orderly. If it is not, we will use our
tools,” deputy governor, Hisham Ramez, said by telephone, adding that
the market so far on Wednesday was quiet and orderly.

He said the Central Bank was concerned that the market be based on “real supply and demand.”

On Wednesday, the
pound was trading at 5.8775 to the dollar compared to 5.876 after
Tuesday’s intervention, which boosted the currency as much as 1.4 per
cent after it hit a six-year low.

Dealers said traders were holding back on Wednesday after the intervention caught many players out.

“There is very
small volume and very small amounts. I think the banks are being
cautious until real activity starts,” said a currency dealer at a
Cairo-based bank.

“People are a bit scared so far,” said a dealer at a second bank.

Egypt’s banks and
treasuries reopened on Sunday after shutting their doors for a week,
and traders said the intervention seemed designed both to deter
speculators and to restore confidence before the stock market reopens
next week.

The fate of the pound could also play a big role in determining the extent to which shares are hurt by the crisis.

Analysts have
warned of a renewed sell-off by spooked investors once trading resumes
on the stock exchange after a two-week closure. The benchmark index
plunged by 16 per cent in the two days the exchange was operating after
anti-government protests erupted on January 25.

Egypt’s financial
regulator said the stock exchange will suspend trade for a half hour if
its broad 100-share index declines by 5 per cent after it reopens, and
even longer if it falls by 10 per cent.

Asked if he was
concerned about the resumption of share trading, Mr. Ramez said: “I
think we passed through the toughest time when we saw the bank
closure.”

Traders said the
Central Bank had intervened without dipping into foreign reserves, and
one trader estimated the size of the intervention at “not less than $1
billion and not more than $1.6 billion. This will make people think
twice before taking positions on the dollar,” the trader said.

The
market capitalisation of equities at the Nigerian Stock Exchange (NSE),
on Wednesday, recovered, ending the four trading days of negative trend.

The
NSE market capitalisation of the 201 First-Tier equities closed
yesterday at N8.53 trillion after opening the day at N8.44 trillion,
reflecting 1.03 per cent increase or over N87 billion gains. About N165
billion was lost in the last four trading days. However, some market
watchers have asked investors to trade cautiously.

The
number of gainers after Wednesday trading session closed higher at 23
stocks compared to the 18 on Tuesday, while losers closed lower at 33
stocks as against the 39 recorded the previous day.

Prestige
Assurance and Dangote Cement topped the price gainers’ table with an
increase of 4.95 per cent and 4.92 per cent, to close at N2.12 and
N128.00 per share. On the flip side, Livestock Feeds and Scoa Nigeria
led the price losers’ chart with a loss of five per cent and 4.95 per
cent, to close at 57 kobo and N7.87 per share.

The
Banking subsector led the most active subsectors’ chart with 169.301
million volumes of shares, valued at over N1.392 billion. Volume in the
subsector was driven by Zenith Bank, Sterling Bank, and Oceanic Bank.

Trading
activities in the Insurance subsector followed with 12.003 million
shares valued at N11.587 million. Deals in shares of Aiico Insurance,
NEM Insurance, and Lasaco Assurance boosted volume in this subsector.

New rules for the Exchange

Meanwhile,
the Securities and Exchange Commission (SEC), in a statement on
Tuesday, said it has enacted some new rules and amended some of its old
rules and regulations.

“Pursuant
to section 313(6) of the Investments and Securities Act, 2007, the
following new rules are made by the commission: rules on negotiated
settlement; conditions to grant waiver on bonds that are not backed by
an irrevocable letter of authority; custodial services for registered
collective investment schemes; securities lending and borrowing;
Exchange Traded Funds,” the commission said.

It also said that the rules and amendments became effective January 27, 2011.

It
noted that other sundry amendments include Islamic fund management,
payment of dividends, and investment in unlisted equities.

However,
SEC said it has approved the implementation of a new code of corporate
governance for quoted companies. It added that the code will become
effective from April 1.

An
executive member of the Shareholders Association of Nigeria, David
Amaechi, said the rules on payment of dividends “is one rule that will
benefit investors in the capital market.”

The
new rule stated that “a separate interest yielding escrow account shall
be opened pursuant to these rules and regulations by a company within
24 hours of the approval of dividend. The total dividend declared by
the company shall be paid en-bloc into the said account within 24 hours
after the opening of the account. The registrar shall be responsible
for effecting dividend payment within the time limit prescribed.

“The registrar shall forward a monthly statement of account
certified by the bank to the commission. Failure to open and fully fund
the account by the company shall attract a penalty of N1 million per
day and a further penalty of five per cent above the monetary policy
rate on the amount declared.”

The World Social
Forum kicked off on Sunday, February 6, with a march on the streets of
Dakar, Senegal. Among the thousands that marched under the careful
watch of the Senegalese military and police, were people calling for
support for the popular actions in Tunisia and Egypt. There was
palpable feeling of invigorated possibilities of globalising peoples’
power.

I walked behind a
banner with the phrase ‘Leave the Fossil Fuels in the Soil’ closely
followed by another that demanded, ‘Do Not Incinerate Africa’. A couple
of days later, I posted the photo with the banner on the web. Within
minutes, I got a response from a friend who asked, “If we leave the oil
in the soil, how would you fly to the United Kingdom?”

That question
required not just a response, but additional questions. Why must I fly
to the UK? Is flying the sole reason for the large-scale environmental
assault on poor communities that follow oil extractive activities? Does
the ease of my flying to the UK warrant the human blood embedded in
every barrel of oil that circulates around the world today from the oil
fields of Iraq, Nigeria, and elsewhere? Are we serious about combating
climate change if we are not ready to change ourselves, the way we
think, the way we produce, and the way we consume?

As I reflected on
these questions while participating in climate justice debates at the
ongoing World Social Forum, I could not help but ponder on the nexus
between crude oil extraction, dictatorship, the scramble for Africa,
and the unfolding events in Egypt and the global response.

We have seen the
hesitation of major world powers to denounce the clinging on to power
by the Pharaoh who has been ruling Egypt over the past three decades.
Should we expect support for the popular struggle for peoples’ freedom
to choose who leads them, or would the world powers merely move to
ensure that the crude oil movement from and through Egypt remains
unimpeded?

Although Egypt is a
major player in oil production in the Mediterranean Sea fringe, her
strength over the crude oil business globally is due to her control of
the Suez Canal, which provides a short link between the Arabian oil
fields and Europe.

While Nigeria and
Angola top the charts of oil production figures in Africa, Egypt has
had steadily rising oil reserves profile, especially with finds in the
deepwater off the Mediterranean coast. At a point, the country’s
reserve was said to reach 8.2 billion barrels of crude oil and some 60
trillion cubic feet of gas.

Up to 3000 oil
tankers are said to pass through this canal every year. Besides helping
oil vessels make a short ride to Europe and elsewhere through the Suez
Canal, Egypt also runs a 320 kilometre long oil pipeline that goes from
the Ain Sukhna terminal by the Red Sea to Sidi Kerir on the
Mediterranean coast which 2.5 million barrels of oil pass through daily.

Oil stokes fire

Among the many
mineral and other resources that Africa boasts of, and which have
stoked the fires of conflict on the continent, oil stands out. Many
African countries continue to suffer violent conflicts, human rights
abuses, and political instability because of forces struggling to
control the oil fields and the associated wealth.

Oil has played a
major role in the exploitation and suppression of the peoples of South
Sudan and so their eagerness to draw away from the North is
understandable. But even after political separation, the two Sudans
will nevertheless remain tied together by an umbilical cord of oil
pipelines and related infrastructure.

Ghana became an oil
exporter in 2010. For the first time, cocoa and gold will face a
serious challenge as top income earners. But, just as the government
expects huge revenues, the people of the territory where the oil is
being extracted are already worried about the expected impacts. Last
month, after the first oil export, at least four oil spills have been
recorded. Is Ghana echoing the Nigerian situation?

In East Africa,
Uganda planned to commence commercial extraction of crude oil in the
last quarter of 2011. The oil is drilled in protected areas along the
coast of Lake Albert in the famous Rift Valley area. It is a
potentially explosive enterprise as the lake is shared by Uganda and
the Democratic Republic of Congo; an oil spill here will likely affect
both countries.

Moreover, this lake
is the source of River Nile and an oil spill here will impact Sudan and
Egypt downstream. It has already generated human rights abuses such as
restriction of movement in the area and threats of detention by
security forces.

Africa is literally
awash with crude oil and crude oil addicts are strategising on how to
sink their teeth into the waiting veins of land.

How would I fly to
the UK if fossil fuels were left in the soil? What will the world do
when the oil runs dry? As a Saudi Arabian minister once said, “the
Stone Age did not end for lack of stone and the crude oil age will not
end for lack of crude oil.”

We must check our fossil fuels mentality for the future of humanity.

Ghana’s inflation
rate jumped to 9.08 per cent in January, the first increase in 19
months, due partly to a 30 per cent rise in petrol prices; but analysts
still expect the Central Bank to keep interest rates on hold next week.

The rise in
inflation from 8.58 per cent in December came after President John Atta
Mills’ government introduced an unpopular 30 per cent rise in petrol
and diesel prices last month to keep pace with rising crude oil prices
and to pay back public debts.

Inflation in Ghana,
the world’s second-largest cocoa producer and Africa’s No. 2 gold
miner, is set to reach double digits in coming months due to the fuel
price hike, together with a recent weakening of the cedi currency and
impending oil export revenues, analysts say.

“The fuel price will continue to impact on prices,” Ebo Duncan of the national statistics office told a news conference.

Non-food items,
including fuel, rose during January at an annualised rate of 11.83 per
cent, while food items rose just 4.84 per cent, data showed on
Wednesday.

Non-food items
account for just over half of the overall consumer price index. They
include transport costs, which surged 19.42 per cent on the year, and
utlity costs, which were up 14.79 per cent in January.

“I am certain that
inflation will increase to double digits in the near term if upward
utility and petroleum price expectations persist,” Sampson Akligoh of
Accra-based Databank Financial Services said.

The Bank of Ghana
has kept its key policy rate on hold since last July after cutting it
by a cumulative 500 basis points since November 2009 when inflation
peaked at nearly 21 per cent.

Lisa Lewin of
London-based Business Monitor International expects the Bank of Ghana
to keep its policy rate on hold at 13.5 per cent next week, avoiding a
hike that would saddle the economy with higher credit costs.

“Looking ahead to April, though, a rate hike is a distinct possibility,” she added.

Ghana began
producing oil last month, at its offshore Jubilee field, and says oil
production will help its economy grow 12.3 per cent this year, one of
the fastest growth rates in Africa. The government plans to increase
spending by 14 per cent, according to its 2011 budget. A strong cedi
helped bring down inflation last year.

The currency has weakened since late last year, hitting a record low against the dollar this month.

The Central Bank
was quoted last week as saying it was not worried about the currency’s
weakness, viewing it would counter the risk that oil exports will push
the currency up to a point where cocoa and other exports become too
expensive. This week, however, it intervened to support the cedi.

A collaborative
effort of the Nigerian Content Development and Monitoring Board (NCDMB)
and a Chinese company, Jiangsu Yulong Steel Pipe, will culminate in the
construction of a longitudinal submerged arc welding pipe mill, at most
by September 2012.

The mill capacity
will be 250,000 tons per annum. This initiative is part of the Board’s
efforts at increasing the local content capacity of the oil industry.

The schedule
comprises six activities and timelines agreed upon during a recent
visit by an NCDMB team, led by Ernest Nwapa, the executive secretary,
to Jiangsu Yulong’s facility in China. This was a follow up to the
meeting held in September 2010 between NCDMB and representatives of the
China company at the Board’s headquarters in Yenagoa, Bayelsa State.

The visiting team
inspected Jiangsu Yulong’s Longitudinal Submerged Arc Welding pipe mill
(LSAW), Helical Submerged Arc Welding pipe mill (HSAW), and the High
Frequency Resistance Welding Pipe Mill (HFRW).

The Board said the
initiative is geared towards meeting the targets set by the minister of
petroleum resources, Diezani Alison-Madueke, during the inauguration of
the governing council of the NCDMB by President Goodluck Jonathan last
year.

Mrs. Alison-Madueke
had declared that the implementation of the Nigerian Content Act will
in the next four years lead to the establishment of three to four new
pipe mills and other ancillary manufacturing plants to meet the demands
of the oil and gas industry.

The chairman of
Jiangsu Yulong, YongQing Tang, during the visit, reaffirmed the
company’s commitment to set up in Nigeria, pointing out that 80 per
cent of the equipment for the production line dedicated to the Nigeria
project had been manufactured and is awaiting testing and shipment.

Guarantees needed

Mr. Tang said the
proposed mill basic design had been completed and requested that the
Board provides guarantees that the Nigerian National Petroleum
Corporation (NNPC) and other major operators would patronise the mill
when operational.

He also said they
look forward to partnering with local companies and other Chinese
companies, like SINOPEC, operating in Nigeria, which are familiar with
the environment.

Mr. Nwapa assured
him that the Federal Government is actively promoting Foreign Direct
Investments (FDI), particularly in the energy sector, and will provide
all necessary support, approvals, and incentives to the company, adding
that government was committed to using locally manufactured pipes in
the construction of Nigerian Gas Master Plan infrastructure involving
over 2000 kilometres (km) of large diameter pipeline.

“The Nigerian
Content Law protects investors in any facility established in Nigeria
to manufacture industry inputs. So far, we have demonstrated our
ability to enforce the law by ensuring that oil majors now source
applicable line pipes from SCC Mill, the only manufacturer of pipes in
Nigeria today. When the Jiangsu Yulong pipe mill becomes operational,
NCDMB will not allow any operator in the industry to import
longitudinal submerged arc welded pipes until the capacity of its
facility and any similar plant is exhausted,” Mr. Nwapa said.

Details of the
project implementation schedule reveal that Jiangsu Yulong would work
with NCDMB between March and December this year to achieve milestones
like land acquisition, permits, environmental impact assessment,
detailed engineering, and early site works preparatory to moving the
mill.

There would also be
training and attachment of Nigerian operators to ensure that a
workforce is available when the plant is completed.