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Brymedia
West Africa Limited, one of the companies that emerged frontrunners in
the bid for the national telecoms carrier, Nigerian Telecommunications
Limited (NITEL) and its mobile subsidiary, MTel, is said to have
commenced strong moves to realise its ambition.

During
the financial bid exercise held February 16 last year, Brymedia, which
has a technical partnership pact with Telecom New Zealand, emerged
second runner-up with an offer of about $551million, excluding the Code
Division Multiple Access (CDMA) network system, after Omen
International Limited (BVI), which emerged the reserve bidder with a
$956.996million.

However,
following indications that New Generation Consortium, which was
announced the preferred bidder by the National Council on Privatization
(NCP) could not pay the $750million (about N112.5billion) initial bid
security at the expiration of the extended deadline of December 23,
2010, the management of Brymedia, NEXT gathered at the weekend, is said
to have indicated interest to move in and take over the company.

A
senior Bureau for Public Enterprises (BPE) official had told NEXT in
confidence during the week that another extension is not likely to be
granted the preferred bidder, as it was clear it was either not serious
about paying the $2.5billion offer it made or it does not have the
capacity to do so.

The
official, who said the management of the privatisation agency is
already looking beyond the New Generation offer, indicated that the
option open for consideration when they resume from holidays today
(Monday) is to formally inform the NCP chairman and vice president,
Namadi Sambo, on the latest development and solicit his approval to
cancel the bid.

Though
the official did not say what step the BPE would take next, it was
gathered that options may include adopting the proposal by the
Adetokunbo Kayode-led 8-member ad-hoc committee constituted March last
year to review the sale in the wake of the initial confusion that
trailed the bid, by either inviting the reserve bidder to come forward
and take up the bid, or for the bid process to start afresh.

But
authoritative sources close to the BPE, who pleaded anonymity, confided
in NEXT that Brymedia has already written to the authorities of the
privatization bureau indicating his interest to raise its former offer
to about $600 million, which it considers the current realistic value
for NITEL.

The
issue of appropriate valuation of NITEL had been one of the issues that
generated a lot of interest and debate among investors during the bid
exercise, as most analysts described the $2.5 billion offer then by New
Generation Consortium as overambitious and unrealistic.

When
the offer by New Generation was first announced, Lanre Opayemi, an
Abuja-based finance analyst, had dismissed it as unrealisable, saying:
“If the U.K.-based IILL could not mobilise $1.3billion to pay for 51
per cent stake in NITEL in 2001, what magic would an almost anonymous
company like New Generation Telecommunications Limited perform to be
able to raise a whooping N350 billion to pay for 75 per cent equity in
the company at a time the state of the nation’s economy is having one
of the worst security guarantee ratings to prospective investors?”

Though
Brymedia management wants to keep its interest under wraps till they
receive a response from the federal government, it was gathered that it
was committed to mobilise its technical expertise of its international
partners to facilitate the turnaround of the moribund national telecoms
company.

The
first attempt at privatising NITEL and its mobile subsidiary, MTEL, was
in 2001, when Investors International London Limited (IILL) emerged the
preferred bidder with an offer of $1.317 billion for 51 per cent equity
stake in the company. IILL’s failure to meet its commitment with the
payment for the bid offer at the expiration of the agreed deadline
resulted in the termination of the bid.

Another
attempt in 2003 to bring on the first strategic investor sale through a
management contract ended in a flop, as Pentascope failed to meet its
contractual obligations.

A
third attempt with Orascom, the Egyptian telecom firm, which emerged
the front bidder with a $256.53 million offer, did not go the distance,
as the bid was duly turned down, because it fell below the reserve
price for 51 per cent stake in the company.

Following
the valuation of 100 per cent of NITEL’s equity at over $1 billion in
2005, government thought the $750 million offer the following year by a
consortium of Nigerian investors under the aegis of Trasnnational
Corporation of Nigeria (Transcorp) PLC for 75 per cent equity
stake-holding was attractive enough to end the nightmare of endless
search for a reliable core investor in the national carrier.

Less
than three years of Transcorp’s management, NITEL’s fortunes plummeted,
with connected lines dropping from over 400,000 to less than 100,000,
while working lines declined from over 296,000 to about 5,000.

Last
year’s bid exercise, which threw up New Generation Consortium as bid
winner, was expected to be the last. But, with the company’s failure to
pay for its offer at the expiration of the deadline last December, the
journey for NITEL appears endless, as the search for a new owner is
about to commence again soon.

What if someday,
the choice over who should occupy the highest elected office in this
country should come down to a decision between two disparate types?

The first sort, a
relatively honest candidate with sufficient resolve, a stiff upper lip,
and a perception of government’s role in the development process
constructed around the belief that personhood is only possible through
the people or community. The second, a person, flawed in many respects,
but who understands the limitations of insisting on the public
provision of every conceivable service in today’s much changed
environment; one, in other words, who sees the individual in society.

Admittedly, the
choices before the national plebiscite are rarely this facile. But
until a couple of weeks ago, I was minded to plump for integrity as the
non-negotiable minimum for national leadership, if we are ever to
escape the cul-de-sac in which we find ourselves. I would thus have
voted for integrity in political office, over competence with
demonstrable flaws. Five decades after independence, it is clear that
corruption is a much more complex phenomenon than we are wont to
concede. There are the obvious economic costs to it.

The private
benefits from sordid dealings and authorised thieving are more than
compensated for by the huge costs imposed on society as a whole in
terms of opportunities foregone (including from the facility with which
beneficiaries of the corrupt system repatriate their loot and the
reluctance of foreign investors to put their money here). Corrupt
practices also lower the quality of life, since society bears generally
higher costs across every department on its account.

But now, I realise
that corruption’s moral burden is the more insidious one. This is not
solely a matter of being forced to take positions behind concepts of
right and wrong. It is more about the way these positions then force a
template of values on us. Because the inequities generated by a corrupt
environment force fundamental convictions, through these convictions,
corruption erodes the middle ground that is so essential to agreement
on the consensuses needed to move an economy like this out of the rut
that it is in.

You are either in
support of individuals feathering their nests, on the argument that
such actions are inevitable until a responsible state emerges which
then goes ahead to render such “private insurance” unnecessary. Or you
are firmly against irregular access to the public till, convinced that
the process of generating this “private insurance” is the short leash
that reins in the emergence of a responsible government.

There is no in
between. Or so I was persuaded until recently. Even in the choice of a
president for the country, the attitude to sleaze and access to public
funds I’d felt is the most important. But supposing this indignation
with the sad and bad effects of corruption in all spheres of our
national life joins (as it seems to have) with a crypto-left wing
aversion to all forms of wealth, and instead of a programme of economic
development and social progress based on the release of individual
entrepreneurial skills, decides instead to democratise poverty?

Put differently,
rather, instead, than conceive of government as an arbiter of the
extremes of wealth and want that a free enterprise system generates,
supposing our quest for a less corrupt leadership leads us to vote for
a mindset that imagines government as necessary for collectivising
agriculture, nationalising factories, and expropriating the emergent
(and “thieving”) entrepreneurial middle class.

We’d be doomed!
There is strong evidence that a culture of private provision is
superior to that of public provision. And this evidence is not from
1989 when the Berlin Wall collapsed. Nor from a bit earlier, when
Margaret Thatcher showed how powerful the individual becomes once shorn
of the constraints of the state. Instead, it comes from observing the
mercantile leaning of our people.

Better therefore,
to support a known thief who would, after having gorged his or herself
at the trough, have the good sense to leave private enterprise alone.
Nay, have the good sense to create conditions that help entrepreneurs
thrive. Undoubtedly, there’s so much that is wrong with having to
choose between South Korea under Syngman Rhee, and Tanzania under the
Nwalimu Nyerere, when other less unsightly examples (especially
Singapore) recommend themselves so strongly.

However, if ever this particular push should come to shove, we should look to the policy outcomes as we choose.

The U.S. government
Millennium Challenge Corporation has given Malawi a $350 million grant
to overhaul its energy sector, whose dire condition is a major brake on
the African state’s economic growth.

A U.S. statement
said the five-year grant should help improve Malawi’s erratic power
supply, which economists say costs the country about $215 million a
year and deters new investment.

According to its
energy ministry, Malawi had 63 days of power outages in 2009, one of
the worst performances in the sub-Saharan region.

Its current
installed electricity capacity is 282.5 MW compared to estimated demand
of 344 MW, and only seven per cent of the 13 million population have
access to electricity, with the rest relying on firewood and charcoal
for energy.

South African
resource-heavy stocks slipped on Friday, as a stronger dollar induced
investors to take profit from firmer mining shares.

The rand reversed
earlier losses against the greenback, despite data showing the Central
Bank took advantage of its gains in December to build up foreign
currency reserves.

The JSE Top-40
index of blue chips was down 0.68 per cent to 28,415.54, while the
broader All-share index dropped 0.58 per cent to 31,929.72.

“It’s just the miners that have brought us down,” David Shapiro, a trader at Sasfin said.

The JSE gold mining indices fell 0.97 per cent, bringing its decline in the year-to-date to 5.1 per cent.

Transactions at the
equities segment of the Nigerian Stock Exchange closed for the week on
a depressed note on Friday, with the market capitalisation sliding by
N106 billion.

The News Agency of
Nigeria (NAN) reports that the market capitalisation closed at N8.361
trillion from the N8.467 trillion recorded on Thursday.

The All-Share Index
also depreciated by 1.26 per cent or 334.90 points to close at
26,169.86 against 26,504.76 recorded on Thursday.

Shares totalling
673.13 million and valued at N5.99 billion were exchanged in 8,034
deals on Friday, compared with the 701.73 million shares worth N8.30
billion traded in 7,471 deals on Thursday.

The banking
sub-sector continued to dominate other sub-sectors with 543.73 million
shares valued at N4.99 billion traded in 506 deals.

At least 18
consortia are working on bids for Nigerian oil rights being sold by
Royal Dutch Shell and partners, the Sunday Times newspaper said, citing
unidentified sources close to the process. Sources reveal that Nat
Rothschild, scion of the banking dynasty, was backing one group of
bidders, while Russian gas group, Gazprom, was leading a bid with
Nigerian resources firm, Equinox Group.

London-listed oil
industry services group, Petrofac, has joined forces with Nigerian gas
firm, Seven Energy, to bid for one of the blocks being sold, while
London-listed oil group, Afren, also plans to make an offer, it added.

Shell, which is selling four onshore fields along with partners Total and Eni, declined to comment.

Nigeria plans to go
ahead with its delayed $500 million debut Eurobond in two to three
weeks and expects a bill to create a sovereign wealth fund to pass
under the current administration, the finance minister said on Friday.

Africa’s top crude
oil exporter first announced plans to borrow in the international bond
market in September 2008 but has put the issue on hold for several
times, most recently in December, citing adverse market conditions.

“Very soon, in the
next two to three weeks, we will be going … to the market with the
$500 million Eurobond,” finance minister, Olusegun Aganga, told a
briefing with journalists, adding that roadshows were planned in the
United States and Europe.

The aim of the
10-year bond is to set a benchmark in the global market for Nigeria
rather than to raise funds, meaning the pricing is considered more
important than the timing. Nigeria, last year, appointed Deutsche Bank
and Citigroup as bookrunners for the Eurobond and named Barclays
Capital and FBN Capital, a subsidiary of Nigeria’s First Bank, as its
financial advisers. It had planned to take a roadshow to the United
States in December but postponed the issue due partly to volatility in
global markets caused by the Greek and Irish debt crises.

Analysts have grown
increasingly concerned about the state of the public finances in
Africa’s third-biggest economy, particularly as presidential and
parliamentary elections in April approach and costly campaigns get
under way. But most analysts say the relatively small size of the bond
issue, combined with appetite for high-yielding assets and a paucity of
West African debt issues, means investors would be ready to shrug off
those short-term risks. Mr. Aganga and Citi’s chief executive, Vikram
Pandit, have said they expect significant demand for the issue.

Wealth fund

President Goodluck
Jonathan has come under criticism from his main election rival, former
vice president, Atiku Abubakar, over the state of Nigeria’s finances
and plans for “excessive borrowing” in this year’s budget.

Despite higher oil
prices and output, Nigeria’s foreign reserves of $33 billion were down
almost a quarter on a year earlier by the start of December and the
2010 budget deficit is expected to have topped 6 per cent of GDP.

The Excess Crude
Account (ECA), into which Nigeria is meant to save oil revenues above a
benchmark price, has fallen to $300 million from $20 billion four years
ago.

Mr. Aganga defended
the 2011 budget – which represents a drop in approved spending over
2010 – saying the government was already taking steps to rein in
recurrent expenditure and that comprehensive audits of bodies including
state-run oil company NNPC were underway to ensure leakages were
plugged.

He said the lower
reserves were a result of maintaining a stable exchange rate in the
face of increased forex demand, spending on power projects, and the
allocation of $1 billion of seed funding for a sovereign wealth fund to
replace the ECA. A bill before parliament to create the fund should be
passed before the April elections, he said.

“I expect and hope
that we will get the bill passed before the end of this administration
… I think it will be one of our major achievements as a country,” Mr.
Aganga said.

The fund is meant
to divert more of Nigeria’s revenues towards badly needed
infrastructure development, save for future generations, and establish
a financial reserve to weather economic downturns.

It is hoped that
the fund will create a much firmer legal framework for the management
of Nigeria’s oil wealth than the ECA, disputes over whose
constitutional legality make it difficult for the federal government to
defend the savings from the country’s 36 cash-hungry state governments.

REUTERS

Leaders of bank
workers unions have insisted on carrying out their planned picket of
banks on Tuesday, even though they have started negotiations with the
management of the affected banks towards a possible resolution of the
issue.

Sunday Salako, the
president of the Association of Senior Staff of Banks, Insurance and
Financial Institutions, who confirmed that the leadership of the
affected banks (Oceanic, Intercontinental, and Unity banks) have begun
talks with the union, said the beginning of negotiations does not mean
the scheduled picketing has been called off.

“It is true that we
have started negotiations and we are trying to resolve the issue, but
that does not mean that we have called off the scheduled picketing.
Right now, we are discussing with the affected banks. What if we put
pen to paper and realise that we cannot reach a compromise? That we are
discussing definitely does not mean we have reached a conclusion” he
said in an interview yesterday.

Statements from the
affected banks over the weekend had stated that none of the banks would
be picketed and that customers should continue their normal banking
transactions as negotiations are going on between the banks and union
leaders.

Intercontinental
Bank, in a statement made available on Sunday, stated that “Given these
developments, the managements of the three banks have advised customers
to go about their businesses as none of the banks’ branches would be
picketed.”

John Aboh, the
Group Managing Director, Oceanic Bank Plc, in a statement issued by the
bank on Friday, also said there would be no picketing in any of the
bank branches.

“Oceanic Bank has
the highest regards for its workforce and has always involved relevant
Labour Unions in its activities. We are working closely with the
Association of Senior Staff of Banks, Insurance and Financial
Institutions (ASSBIFI) to set the records straight. We want to reassure
our customers that there will be no picketing in any of our branches
and urge them to remain calm and go about their normal businesses with
the bank,” the statement read.

Seeking a solution

Investigations
reveal that the management of the three affected banks met with the
bank union on Friday with a view to resolving the planned industrial
action.

Last week, the two
unions in the banking sector – ASSBIFI and its junior staff
counterpart, National Union of Banks, Insurance and Financial
Institutions Employee (NUBIFIE), had threatened to shut the three
affected banks on Tuesday over the controversial exit of some of their
staff.

Intercontinental
Bank had recently relieved 165 staff of their duties while Unity Bank
had, also two weeks ago, asked some of its staff to leave.

The banks claimed
that the layoffs were on grounds of non-performance and disciplinary
actions which they said is based on the terms of their employment,
which states that underperforming employees would not be retained by
the organisation.