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The Central Bank of
Nigeria (CBN) disbursed N8.281 billion during the fourth quarter of
2010 under the Commercial Agriculture Credit Scheme (CACS).

According to data
on the Bank’s website, a total of N96.811 billion has so far been
disbursed to 86 projects/promoters and 18 state governments in the
second tranche since the scheme began in 2009. This brings the number
of beneficiaries to 104, out of 347 projects that applied to benefit
from the scheme.

The CBN in 2009 set
aside N200 billion for onward lending to farmers under the scheme
towards boosting agricultural production in the country. The balance of
CACS funds as at December, 2010 stood at N103.189 billion.

In a memorandum to
the National Economic Council, the Central Bank said that under the
second tranche, 18 state governments: Adamawa, Anambra, Bauchi, Enugu,
Gombe, Kebbi, Kogi, Imo, Kwara, Nasarawa, Niger, Ondo, Sokoto, Taraba
Zamfara, FCT, Akwa Ibom and Rivers accessed N1billion each for
on-lending to farmers’ co-operatives and other areas of agricultural
interventions in their various states.

Food security

The initiative is
expected to enhance food security, reduce cost of credit in
agricultural production, and increase output and employment in the
sector. Target commodities under the scheme include the cultivation of
target crops (rice, cassava, cotton, oil palm, wheat, rubber, sugar
cane, fruits, and vegetable); livestock (dairy, poultry, piggery); and
fisheries.

As at December,
2010, 11 banks: Access, Fidelity, First, Guaranty Trust, Oceanic, Skye,
Stanbic IBTC, Union Bank, UBA, Unity and Zenith are participating under
the scheme. UBA has the highest disbursement of N35.162 billion
followed by Zenith with N13.835 billion, Union, N10.903 billion, First
Bank, N9.135 billion and Skye Bank with N6 billion. Also, N13.934
billion, comprising N11.353 billion from UBA, N2.00 billion from Skye
Bank and N0.581 billion from GTB has been withdrawn in respect of
undisbursed funds.

Eligibility

Under the
eligibility guidelines released by the Central Bank, borrowers under
the scheme shall be a limited liability company, with asset base of not
less than N350 million, and with prospect to grow the net asset to N500
million in the next three years and comply with the provision of the
Company and Allied Matters Act (1990). This, however, is not applicable
to loans taken by state government for on-lending.

Such companies must
also have a clear business plan, provide up-to-date record on the
business operation, if any, and satisfy the entire requirement
specified by its lending bank. According to the CBN, “interest on loan
shall not exceed nine per cent, inclusive of all charges.

To ensure safety of
the funds, the banks bear the credit risk of the loans, while state
government have to sign an irrevocable standing payment order (ISPO) in
favour of the CBN to deduct at source the total amount in default from
the states on monthly basis of State revenue allocation.

The Nigeria National Petroleum
Corporation (NNPC) is to commence marketing of refined oil to U.S., Brazil and
other parts of the world to boost the revenue base of the corporation.

The Group Managing Director of NNPC,
Austen Oniwon, made this known to the News Agency of Nigeria (NAN) in
Brasilia on Wednesday.

Mr Oniwon said already the
Corporation, which hitherto had been exporting crude oil to the U.S., had
concluded arrangements with Brazil’s Oil company, Petrobras, toward
the realisation of this objective.

He said the NNPC had since
indicated its interest to invest in Petrobras’s plan to expand its
refinery in Texas, U.S., from 100,000 barrels to 200,000 barrels per day.

“We indicated to them our interest
to partner with the company to have an outlet into American market instead
of exporting just crude to the American market.

“We can take Nigerian crude, which
is also going into American market anyway, into this refinery,
process and sell as value added product into the American
market.

“This is something that is going to
be beneficial to NNPC and Nigeria as a country,” he said.

Mr Oniwon further told NAN that the
NNPC and Petrobras had concluded discussion to enter into a relationship in the
areas of oil exploration and production, refining and petro-chemical, oil
marketing and trading, gas and power development as well as research and
development.

He said officials of Petrobras
would be coming to Nigeria in February to sign a Memoranda of
Understanding (MOU) with the NNPC for the take off of the partnership.

“They (Petrobras) hope that we
will be able to jointly explore the vast hydro carbon deposit in Nigeria
especially in the deep offshore since the MOU is going to
embrace worldwide operations.

“As partners we will be
able to join Petrobas to operate in their businesses and share their
assets outside Nigeria,” he added.

The GMD said he hoped that the MOU
would also enable Nigeria to develop its gas sector for the smooth operation of
the various power plants being constructed in the country.

According to him, President Goodluck
Jonathan has focused on the development of power plants in Nigeria and most of
these would be driven by gas.

He, therefore, stressed the need for
Nigeria to develop its gas sub-sector, primarily for domestic consumption to
power the power sector.

Mr Oniwon also said he was
optimistic that the MOU would address the challenges of infrastructural
deficiencies in the nation’s oil and gas sector.

“We need partners because the
infrastructure that is going to deliver this gas to the various power
plants is inadequate at the moment and their provision is going to cost a lot
of money.

“But with the new government
policy whereby the cost of power has been reviewed upward, it has made
business and investments in gas project very lucrative

“We believe that Petrobras
will be eager to join with NNPC to develop the gas resources primarily for
domestic use and for export because they are also short of gas in
Brazil,” he said

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NAN

The Central Bank of
Nigeria (CBN) has extended the deadline for the revalidation of
accounts by customers of commercial banks to January 31.

A statement by
Mohammed Abdullahi, the bank’s head of corporate communication, said in
Abuja on Monday that the extension followed public response to the
exercise.

“Having reviewed
the progress made so far and the response of the banking public, the
Central Bank has extended the deadline for the information update of
bank accounts from December 31, 2010 to January 31, 2011,” it said.

The apex bank had
earlier directed that any customer who failed to comply with the
directive would have his or her account(s) suspended with effect from
January 1.

Nigeria will export
around 2.06 million barrels per day (bpd) of crude oil in February,
down from about 2.13 million bpd scheduled in January, trade sources
said on Tuesday.

Africa’s largest
oil exporter will ship 64 full or part cargoes in February, loading
programmes showed, compared with 72 in January. The biggest stream will
be Qua Iboe, which will load 12 cargoes, one less than in January.

Nigeria’s total daily exports in February will be the lowest since June 2010, according to Reuters data.

Even so, supply is
expected to remain far above the production target Nigeria set through
its membership of the Organization of the Petroleum Exporting
Countries. Nigeria’s OPEC output limit is 1.67 million bpd.

The dollar edged
higher on Tuesday after upbeat U.S. data suggested the world’s biggest
economy will accelerate in 2011, helping it hold gains against the yen
and the Australian dollar.

But the dollar
eased against the euro with the single currency moving higher on steady
buying by Asian central banks and comments from a Chinese official, who
said on Monday the country would continue buying Spanish debt.

The euro had
slipped earlier, with some traders citing talk of euro-selling by
investors related to euro zone bond redemptions. The single currency
was up 0.37 per cent from late U.S. trading on Monday to $1.3400, but
traders and analysts remained sceptical about the euro’s bounce.

South Africa’s 2010
coal exports rose nearly 4 per cent to 63.43 million tonnes, boosted by
demand from China and India, the Richards Bay Coal Terminal (RBCT) said
on Tuesday.

South Africa
exported 61.14 million tonnes of coal last year, and state-owned
logistics group, Transnet, said it could ship up to 65 million tonnes
in 2010 despite a three-week strike that crippled ports and railways in
May.

“The significant changing factor is the major economic development
happening in China and India, requiring more electrical power and coal
inputs into their major factories,” chief executive, Raymond Chirwa,
said in a statement.

OPEC member Algeria’s foreign exchange reserves reached $155 billion at the end of 2010, an official said on Wednesday.

That level of
reserves would allow the government to pursue its economic programme
sustainably, finance ministry director, Abdelmalek Zoubeidi, told state
radio, chaine 3.

“There is also a margin of security for the coming years,” he said.

The programme to put Algeria’s economy back on track is worth $286 billion over five years.

The North African country has sharply reduced national debt and
relies increasingly on its own resources to fund its development, with
oil and gas sales abroad accounting for 97 per cent of exports.

The
Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has
constituted a committee to review petitions on the presidential
concession granted Bayelsa State last year to enable it earn derivation
revenue from nine oil wells.

The
Commission is constitutionally empowered to determine the revenue
allocation formula, including indices for the disbursement to all tiers
of government.

Though
the committee, constituted late last week during the emergency session
of the Commission in Abuja, is yet to be inaugurated, its terms of
reference might include findings on the legality of the concession in
line with the constitutional provisions on derivation revenue earnings
by oil producing states.

Though
a senior official of the Commission, who pleaded anonymity, said
yesterday that it would be preemptive to suggest the outcome of the
committee’s findings and recommendations, it was, however, gathered
that Bayelsa State may be asked to make some refunds if found that
about N20billion excess revenue earned so far was without any
constitutional basis.

“The
issue has to be followed constitutionally,” the source said.
“Derivation revenue is paid to oil producing states on the strength of
the relevant provisions of the constitution. If in the course of the
committee’s work, it is found that Bayelsa State earned revenues which
the Constitution did not provide for, the government would be asked to
make some refunds. But, it would be preemptive to say exactly what
would happen now, particularly as the committee was inaugurated only
last week on the eve of the last day of last year,” the senior official
said.

He,
however, disclosed that the meeting presided over by its new Chairman,
Elias Mbam, had agreed that further disbursement of revenue on the
principles of the concession be suspended to afford the committee the
opportunity to complete its work and make appropriate recommendations
to the Commission.

Controversial concession

The
concession, which has already lifted Bayelsa State to become the
highest derivation revenue earner among the oil producing states, was
sequel to a request by Governor Timipre Sylva for approval for the
attribution of nine oil fields to the state to assuage negative impact
of the delineation of maritime boundaries of littoral states by the
National Boundary Commission (NBC) in the wake of the promulgation of
the Offshore/Onshore Dichotomy Abrogation Act 2004.

The
delineation was to establish the maritime boundaries of littoral states
located beyond the 200-metre isobaths, to produce data for the
attribution of 13 percent derivation to states.

Prior
to the controversial concession, allocation of derivation revenue was
based on the volume of oil production figures attributable to each oil
producing state, with Akwa Ibom topping, followed by Rivers, and Delta
States, while Bayelsa brought the rear.

However,
with the revised 13 percent derivation indices, payment of derivation
since last July based on the concession raised Bayelsa State’s total
oil production to about 15,995,773 barrels, making it the highest
derivation revenue earner ahead of Rivers (13,317,840 barrels), Akwa
Ibom (12,796,954 barrels) and Delta (11,163,493 barrels).

At
the end of last Friday’s controversial disbursement of $1billion (about
N150billion) end-of-year bonanza from the Excess Crude Account by the
Federation Accounts Allocation Committee (FAAC) shared by the three
tiers of government, Bayelsa State went home with the highest
allocation of $40million among the nine oil producing states.

Accordingly,
Akwa Ibom was allocated $30million; Rivers, $28million; Delta,
$21million; Ondo, $4million; Abia, $1.3million; Imo $1.26million; Edo
$1.2million and Cross River, $1million.

The Central Bank of
Nigeria (CBN) has said the main thrust of its focus in the new year is
to ensure stability in the foreign exchange market.

Lamido Sanusi, the CBN governor, said the position held in 2010 would continue.

“We remain
committed to stability in the forex market. We are pleased that we had
stability last year,” Mr. Sanusi said in a text message. He added that
the bank has made its stance clear at the last Monetary Policy
Committee (MPC) meeting held on November 23, 2010.

At the end of the
meeting, the MPC expressed belief that the relative stability in the
foreign exchange market is likely to be sustained in the near term.

“The committee
would continue to monitor developments in the market to ensure that
measures are taken to eliminate speculative demand and exchange rate
volatility. The committee continued to urge greater fiscal
responsibility and commitment to reforms that will enhance the
effectiveness of monetary policy,” it stated in a communiqué.

The Central Bank
deployed massively from the country’s foreign reserves to maintain
foreign exchange stability in 2010. This led to its depletion, dropping
from $42.4 billion at which it opened the year, to $32.35 billion as at
December 31, 2010.

Dutch auction continues

The Central Bank also stated that it will continue to adopt the Wholesale Dutch Auction System (WDAS) in 2011.

In a circular to
all authorised foreign exchange dealers last December, it informed that
minimum bid amount by an authorised dealer at the bi-weekly auction
shall be $500,000.

Meanwhile, the
naira is expected to be under a short term pressure until the WDAS
auction resumes next week. Some experts, however, say they expect the
naira to correct itself once auction resumes. Central Bank carried out
its last auction on December 15.

“The Central Bank
carried out its last auction on December 15 and it would not be
returning to the market till January 8 so what we expect is see short
term pressure on the naira,” stated Renaissance Capital, an investment
banking firm.

“But we would
expect the currency to correct in the new year and possible inflow of
dollars by the oil majors. This is a cyclical process rather than
structural,” it added.

Bismarck Rewane,
managing director, Financial Derivates Company, a financial advisory
firm, however, said exchange rate stability would remain as the Central
Bank continues to intervene the naira using interest rates as anchor.

“The naira
maintained exchange rate stability throughout 2010, though it moved
with the acceptable limit of three percent (plus and minus),” Mr.
Rewane said.

He added that this stability was achieved at the expense of foreign reserves.

“Slight pressure on
the naira would continue, though our projection is for a rate on
N153-N154 per dollar by June 2011,” he said.

The Standards
Organisation of Nigeria (SON) destroyed sub-standard goods worth N10
billion imported through the country’s borders in 2010.

John Akanya, the
director general of SON, told the News Agency of Nigeria (NAN) on
Tuesday in Abuja that of the sub-standard goods, fake drugs alone
accounted for N8.9 billion.

The other goods
destroyed include food products, household items, computers, television
sets, antennas, ball pens, cables, gas cylinder, and building
materials, among others.

Mr. Akanya deplored
the situation, and said that the continued destruction of sub-standard
products was hampering the economic development of the country.

He called for the
cooperation of other relevant agencies to tackle the menace of fake
products, “which are not only dangerous to the lives of the citizens,
but have succeeded in giving the country a bad image.”

He also said there
was the need to monitor and track products coming into the country
because more than 90 per cent of goods available in the country were
imported.