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The Central Bank of
Nigeria (CBN) has stated that it is still in the process of verifying
the raised capital of Wema Bank, a month after the deadline set for the
bank to recapitalise. The CBN had set October 30 for the bank to
recapitalise after it failed to meet an earlier deadline of September
30.

Mohammed Abdullahi,
the spokesperson of the Central Bank, said the regulatory body is still
at the process of capital raising verification.

“That is what we
are still doing. Our update on the verification of the bank’s raised
capital and confirmation on the loans it is said to have recovered is
still valid,” he said.

In first week of
November, the Central Bank stated that it would embark on a
verification process on the N7.5 billion claimed to have been raised by
the bank and the loan of N4 billion it also claimed to have recovered.

The regulatory body
had in October stated that it had granted a 30-day extension to Wema
Bank Plc to enable it conclude its recapitalisation, which ended
October 30.

“At the expiration
of the deadline, the CBN is pleased to note that Wema Bank Plc was able
to raise the sum of N7.5 billion from the Special Placement Offer,
approved by the Securities and Exchange Commission (SEC), and was
formally authorised during the bank’s completion meeting, held on
Tuesday, October 28, 2010,” according to a CBN statement.

The regulator
stated that the total subscriptions of N7.5 billion had been received
in the offer proceeds account domiciled with the Receiving Bank to the
Offer, Skye Bank Plc. In addition, Wema Bank made recoveries of N4
billion on its outstanding loans within the same period.

“Consequently, the
CBN will embark on the verification of the capital raising exercise and
confirmation of the loan recoveries made by the bank,” the statement
said.

The Central Bank
spokesperson said the full recapitalisation of Wema Bank is expected to
be concluded with the sale of some of the bank’s non-performing loans
to the Asset Management Corporation of Nigeria (AMCON), when the latter
becomes operational.

“Meanwhile, Wema
Bank’s application for a regional commercial banking licence is also
receiving the attention of the Central Bank of Nigeria. All
stakeholders are to be guided accordingly,” the statement added.

Shareholders support

Wole Ajimisinmi,
the bank’s company secretary, said the bank has been carrying its
shareholders along in its recapitalisation process.

“The last time we
had our Annual General Meeting in June, we got approval by the
shareholders to issue new shares and embark on a special placing offer,
after given the go ahead by board of directors. Shareholders also
endorsed the decision of the Board to obtain a Regional Banking licence
when the proposed new licencing regime came up,” Mr. Ajimisinmi said.

The bank’s
management said its recapitalisation process includes recovery of
delinquent loans through internal efforts, and resolution of some of
the nation’s delinquent risk assets using the AMCON window, raising
additional equity through special placing, and application for a
Regional Banking Licence.

In the banks
unaudited balance sheet for the first half of the year released in
August, gross earnings of the bank stood at N14.6 billion, and profit
after tax stood at N1.07 billion. The bank still carries a long term
facility from the CBN of N87 billion, which the bank expects to clear
using the AMCON window.

The
Revenue Mobilisation, Allocation, and Fiscal Commission (RMAFC)
yesterday said no approval was given for the payment of enhanced
remuneration package for members of the National Assembly (NASS) to
warrant their accessing 25 percent of the country’s total Federal
annual expenditure profile.

Central
Bank of Nigeria (CBN) governor, Sanusi Lamido Sanusi, stirred the
hornet’s nest at the weekend when he blamed the country’s economic woes
on “wasteful politicians”, particularly the National Assembly, whose
members, he said, earn a quarter of the nation’s annual budget in
salaries and allowances.

As
the Federal Government banker, the apex bank, which is constitutionally
responsible for disbursing funds to agencies of government, as approved
by the federal ministry of finance and released by the Office of the
Accountant-General of the Federation (AGF), also keeps records of all
such disbursements for accounting purposes.

Huge disbursement

But
the Revenue Commission told reporters yesterday in Abuja that it was
wondering from where the quantum of disbursement to the NASS would have
come from, as alleged by the CBN governor, as the approved pay for the
lawmakers would hardly be sufficient to take care of such huge
disbursements.

Section
32(d) of Part One of the Third Schedule of the 1999 Constitution
empowers the Commission to “determine the remuneration appropriate for
political office holders, including the president, vice president,
governors, deputy governors, ministers, commissioners, special
advisers, legislators, and the holders of the office mentioned in
sections 84 and 124.

The
Commission yesterday provided its approved emolument, as enshrined in
the existing Certain Political, Public and Judicial Office Holders
(Salaries and Allowances, Etc) [Amendment Act, 2008, pointing out that
the lawmakers had, in January 2009, turned down an Executive Bill that
sought to cut-down all political officers’ emolument in the wake of the
global economic and financial crises between 2007 and 2009. The Bill
was perfected by the immediate past chairman of the Commission, Hamman
Tukur, who earlier raised alarm last year on the growing figure of N1.3
trillion total annual emolument, out of which allowances gulped the
lion share, with basic salaries accounting for only N90 billion.

Former
President Umaru Musa Yar’adua and members of the Federal Executive
Council (FEC) had volunteered to take a 20 percent cut in their basic
salaries before the enactment of the pay cut law, before it was aborted.

No pay cut

Under
the proposed pay cut, the president’s total annual emolument would have
dropped from N14.058 million to N11.598 million; his deputy, from
N12.126 million to N10.004 million; ministers, Secretary to the
Government of the Federation (SGF)/ Head of Service/ chairmen of
federal establishments, from N7.801 million to N5.471 million.

The
package was in addition to other benefits, including official vehicles
and fueling, personal assistants entertainment, utilities, and domestic
staff.

Similarly,
the Senate president’s current annual emolument of N8.694 million would
have come down to N5.589 million; the deputy Senate president from
N8.082 million to N5.195 million, while those of the senators would
have moved from N12.766 million to N8.206 million; Senate committee
cxhair/ vice, from N12.867 million to N8.308 million respectively.

The
Speaker of the House of Representatives, would have had his annual
emolument also sliced from the current N4.954 million to N4.334
million; his deputy would have had his packaged trimmed from N4.574
million to N4.002 million, while members would have had their current
N9.529 million slashed to N6.352 million and House Committee/ Vice from
N9.628 million to N6.541 million respectively.

The emoluments of the principal officers of the Legislature exclude other pecks of office that are not spelt out in the law.

The global
financial meltdown took its toll on investment banking business
worldwide, with a drop in the volume of transactions recorded during
the 2008 – 2010 period.

Managing director of Alexander Forbes, Femi Oyetunji, described it as “nothing short of catastrophic.”

He was speaking at
the press briefing held in Lagos yesterday to herald the ninth Nigerian
Investment Banking League (NIBL) upcoming awards ceremony, which is
scheduled to hold on 9th December, 2010, in Lagos.

Alexander Forbes is
acting as independent auditor of the results to ensure transparency and
credibility. The independent auditors are to thoroughly scrutinise the
process of scoring as well as the scoring criteria.

Managing director
and chief executive officer of SBA Research, Segun Akande, said the
last two years have been difficult for the financial markets.

“The global
recession has had a fairly devastating effect on the Nigerian capital
market,” he said. He, however, admitted that despite the strenuous
financial terrain, some companies have still managed to excel.
“Therefore, it would be a gross injustice not to reward those companies
with the credit and awards they deserve.”

Mr. Akande said
that NIBL has set up a scoring committee composed of senior
stakeholders in the investment banking sector, who themselves are
competing for the various award categories. He said that this would
help reduce any incidence of corruption in the scoring process.

He also said that
the Securities and Exchange Commission (SEC) is actively involved in
the whole process, as every transaction uploaded by the investment
banks would be verified by SEC before further scoring would proceed.

NIBL aims at
achieving complete transparency and total credibility by tallying up
the scores and sending the results to the independent auditor for
verification and confirmation. Mr. Akande explained that due to
financial constraints and a low volume of transactions in the last
year, the categories for this year’s award would be reduced to four, as
against eight categories in recent years.

The awards
categories are Best Equity House, Best Mergers & Acquisition, Best
Debt House, and Best Investment Bank 2009. Another category of Best
Equity Private Equity Deal would be personally given to the awardees
after the ceremony, due to financial constraints.

Biremo, senior
manager, sales & marketing, SBA Interactive Data, explained that in
order to accommodate the vagaries of the current financial crisis, the
minimum transaction value for scoring has been reduced to N1billion, as
against N5billion in recent years.

Previous winners of the Best Investment Bank include BGL Plc, Stanbic IBTC, and in 2009, Chapel Hill Denham Group.

Established in
2000, the NIBL was set up by SBA Research to create more transparency,
efficiency, and healthy competition in the capital markets. It has
become the parameter used by the Nigerian capital market to measure the
performance of domestic issuing houses in the country.

Small and medium
enterprises in Nigeria are still finding it difficult to access funds
from commercial banks to kick start their businesses, despite attempts
to aid the sector.

These are
enterprises with a maximum asset base of N500 million (excluding land
and working capital), as classified by the Central Bank of Nigeria.
They argue that compared to their foreign counterparts, they don’t get
the required financial support from Nigerian banks.

“Most commercial banks do not want to give loans to start-ups,” said a banker at Intercontinental Bank.

“The proof for a
bank is to know that you are specialised and focused in your business,
and if they give you the money, you know what to use it for. You must
have run the business for a period of time; that is why some banks
would demand to see your cash flow statement, and your certified
audited accounts for two years.

“That is the stand
of commercial banks towards small and medium enterprises. An average
commercial bank will tell you that you are just starting the business.
As such, they are not sure about your business. If the Central Bank can
actually implement their plan to support small and medium enterprises
in terms of finance, then there may be a way out for them,” he added.

Friends and family to the rescue

But some operators of these enterprises are finding ways around the banks hurdles.

“Right now, I source for funds from my friends and family,” said Ade Olatunde, an oil and gas supplier.

“It is even worse
for oil and gas SME’s. Banks are not ready to fund such businesses,
especially downstream. What I’m doing is that I’m running my account
properly, so that my bank can monitor it, pending the time that I would
again request for a loan,” Mr. Olatunde said.

He added that there are so many people with great ideas, but they do not have funds to turn such into budding enterprises.

Kemi Abiodun, a
university graduate who wishes to establish a fashion designing centre,
says she was advised by bank staff to source for her capital from
friends and relations.

Saying she does not
feel bad about the bankers’ comments, “but I think if the government is
really serious about creating jobs, there should be an institute or
set-up that would guarantee the funds that the banks will give us and
monitor our businesses, to ensure that the money is spent as proposed.
I do not think the guranteed Central Bank’s fund covers start-ups, so
it will be difficult for these banks to lend us money. How much am I
looking for?”

Plans and more plans

Meanwhile, the
federal government, last Wednesday, announced the provision of
N75million to the Bank of Industry (BoI) to boost increased access by
small and medium-scale enterprises.

Olusegun Aganga,
the finance minister, disclosed at the launch of the initiative to
ensure the viability of small and medium enterprises in the country,
that the National Economic Management Team has identified the two
groups as the best institutions for job creation and economic growth in
most economies around the world.

The Central Bank
too has not left small and medium enterprises to their fate. It
facilitated the Small and Medium Enterprises Equity Investment, a
voluntary initiative of the Bankers’ Committee approved at its 246th
meeting of December 21, 1999.

The scheme required
all banks in Nigeria to set aside 10 percent of their profit after tax
for equity investment and promotion of small and medium enterprises.
The question is, where does all the money by these banks go, and what
projects do they fund?

The Intercontinental banker offers a clue

“Banks would rather
lend to people who have already made their money, who are already in
business, with the view that they are more credit worthy. Do you know
how many bankers from various banks are sitting at Dangote’s office, or
some other top shot with proposals of loan facilities that he can
acquire?

“We all know what
happened during the audit, how many so called ‘top shots’ owe the
banks. If, for instance, you give someone like Dangote N50 billion, do
you know how many small and medium enterprises that money would have
funded? That is what is happening,” he said.

European regulators
will gain unprecedented powers to control commodity markets through
trade caps and heightened intervention if a draft EU document becomes
binding, specialist lawyers said on Friday.

Commodities are
being integrated into sweeping reforms to the European Union’s markets
in financial instruments directive (MiFID), which is due to be released
next week.

A draft version
seen by Reuters increases surveillance of market activities and
allocates new powers to set U.S.-style position limits to restrict
speculative trade.

“I think there are
some risks in this, and the framework of this paper seems to suggest a
fairly significant increase in regulatory intervention. Some is
foreshadowed at the G20 level and some of it isn’t,” said Chris Bates,
a partner at Clifford Chance with a focus on financial services
regulation.

France, Europe’s
largest grain producer and exporter in the EU, has been pushing for
more controls for commodity markets as the head of the Group of 20
economic powers.

Spikes in wheat and
cocoa prices this summer have given fresh impetus to the debate. Bates
said that the new Mifid in some ways is more stringent and likely to be
more controversial than proposed U.S. regulation under the Dodd-Frank
act.

“The real concern
about the whole European framework is that it’s quite rigid once it’s
set … and that is one of the big differences from the United States.
There are concerns that there are many regulators that don’t have a
close feel for these markets, so it is giving them powers to take
actions they are not well-equipped to deal with.

“In contrast, the
CFTC (U.S. Commodity Futures Trading Commission) is steeped in
commodity markets and commodity markets regulation, so while its powers
may be extensive, at least they are manageable or predictable in some
way,” Mr.Bates argued.

Debate has been
heated on the topic of position limits. Under the revised Mifid,
traders could be required to reduce their positions in the interests of
the market.

“They (regulators)
will have powers to impose position limits for whatever category of
participant, and that’s something the UK has never called for,” said
Jonathan Herbst, a partner at law firm Norton Rose.

Mr. Bates, at
Clifford Chance, said the draft law would give regulators greater
powers to selectively manage a party’s position after it has been taken.

“I think that this
sort of intervention power is quite a dramatic change. If you imagine
that in securities markets that regulators were given powers to ask why
you are holding a security and to make you sell it at their whim,
that’s quite a big intervention in markets,” Mr. Bates said.

He added that the
natural consequence of stricter European regulation was a loss of
liquidity in the EU, as investors shift to the growing commodity
trading hubs in Singapore and Switzerland.

“There’s very
little discretion to adjust the rules later. So what you would expect
is a certain amount of this business to move somewhere else. Some of it
can’t, like electricity, but oil probably doesn’t need to stay here,”
he said.

REUTERS

Nigeria’s private sector credit is gradually improving, according to the latest data released by the Central Bank.

Data from the
regulatory body says private sector credit growth rebounded marginally
in October, reaching 6.9 percent year-on-year, from 5.3 percent in
September and 4.5 percent in August.

In nominal terms,
credit to the private sector reached N10.5 trillion in October, from
N10.3 trillion in September, N10.1 trillion in August, and N10.2
trillion at the end of 2009.

Finance experts say
while it appears that private sector credit has only moved up 3.2
percent year to date, its month-on-month growth rate has been in
positive terrain for three consecutive months (for the first time since
December 2009), at 1.9 percent in October, from 2.2 percent in
September and 2 percent in August.

Samir Gadio,
emerging markets strategist, Standard Bank, said one of the reasons
behind the substantial decline in annual growth rates is the high base
effect in the data.

“Private sector
growth expanded 84.8 percent year-on-year in 2008, predominantly due to
margin lending-related activities. The combination of a high base
effect and the continued deleveraging in the financial system since
2009, as well as a sharp deceleration in lending associated with the
structural issues in the banking system and increased risk aversion,
could only result in a sustained fall in annual credit growth figures,
until the end of the first half of the year,” Mr. Gadio said.

Experts say some technical reforms will be needed to boost retail lending, despite the significant improvement.

Mr. Gadio says the
tightening in monetary conditions by the Central Bank, following the
Monetary Policy Committee held on September 21 has not helped the
private sector credit outlook, adding that Sanusi Lamido Sanusi, the
Central Bank governor, recently indicated that he did not expect an
improvement in lending in 2010, at least until the banks are
restructured.

Yes, more loans are available

Bashir Borodo,
president of the Manufacturers Association of Nigeria (MAN), confirmed
that access to loan in the sector has improved.

“Yes, I must say
that access to loans has improved. This is because there is more
liquidity in the system, partly because of the direct intervention of
the Central Bank in terms of its guaranteed loans. Right now, we are
very optimistic that this change would continue this year and in 2011,”
Mr. Borodo said.

A source at
Intercontinental Bank said the improvement could be traced to the
special funds deployed by the Central Bank to the private sector.

“We should remember
that the Central Bank gave money for loans for those sectors, and they
are guaranteed. The banks have no option than to put these funds up for
loans. Also, this is the year’s end, many companies have to produce
more to meet year end demands and this means they would have to make
more demands for loans and fortunately, there are more guaranteed funds
from the regulatory body,” he added.

“Risks are better
evaluated now. Because of what banks have faced, they have strengthened
their risk management departments with better and more hands. Also, the
cost of money is reducing. There are now more willing deposits, current
and savings account, and this encourages the banks to lend now,” the
source said.

Nigeria expects its
budget deficit to widen to 6.1 percent of GDP this year, more than
double the level set under a fiscal responsibility act three years ago,
as government spending rises ahead of elections next April.

Revenue shortfalls
from the oil and gas sector, unexpected wage increases, and election
costs will contribute to the widening deficit, Finance Minister,
Olusegun Aganga, said in an annual briefing on sub-Saharan Africa’s
second biggest economy.

Government revenue
is projected at 3.18 trillion naira, with expenditure expected to be
5.16 trillion, Mr. Aganga said in the review, released on Monday.

Analysts have
expressed concern about the state of public finances in Africa’s most
populous nation, as presidential, parliamentary, and state governorship
elections approach.

Recurring
expenditure accounts for more than half of the country’s overall
spending, meaning it is paying more to keep government running than it
is investing in badly-needed infrastructure and other capital projects.

Government
borrowing has risen sharply, increasing by more than 50 percent since
the start of the year, compared to private sector credit growth of just
three percent over the same period.

The government has
said it will also issue bonds to pay workers at former state telecoms
company, Nitel, and to fund part of the electoral commission’s budget,
further increasing domestic debt.

Still, the head of
the debt management office has pointed to a debt-to-GDP ratio of 16
percent that is expected to remain stable next year, depending on the
rate of economic growth, suggesting Nigeria could easily raise more
debt if needed.

But authorities
have also spent billions of dollars of oil savings since the start of
the year alone, and seen foreign exchange reserves fall 20 percent
year-on-year by mid-November to $34 billion.

Ratings agency,
Fitch, last month, cited those factors when it cut its sovereign credit
outlook for Nigeria to negative from stable.

Oil savings dwindle

The Excess Crude
Account (ECA), into which Nigeria saves revenues above a benchmark oil
price, has dwindled from $20 billion at the start of late President
Umaru Yar’Adua’s term in 2007, to around $4.4 billion when President
Goodluck Jonathan took over in May, and less than $1 billion now.

The government says
the ECA has served its purpose as an account to be used to protect
Nigeria against a fall in commodities prices or a global downturn.

But analysts say
the reduction is alarmingly sharp during a period of relatively high
oil prices – Thursday’s price of $85 a barrel is a 40 percent premium
on the $60 assumption in the 2010 budget – and a recovery in Nigerian
oil production.

Mr. Aganga said
last week Nigeria’s foreign reserves were well below where they ought
to be, and that a plan was in place to restore them.

He has also said
spending for next year will be capped at 4.56 trillion naira, as the
government seeks to rein in expenditure over the next three years.

Parliament approved spending of more than 4.8 trillion naira for 2010, up more than 50 percent on the previous year.

The much awaited
sale of seven rescued banks is gradually unfolding, as the various
parties put finishing touches to the deal. While some prospective
financiers, particularly foreign investors, don’t want to stake their
funds, some local entities are making efforts to tidy up loose ends.

After injecting
N627 billion to resuscitate Intercontinental, Oceanic, Finbank, Union
Bank, Afribank, Bank PHB, and Spring banks last year, the Central
Bank’s plan is to allow new core investors that would entrench a new
culture of corporate governance, which the regulator said was lacking.

After several
months of negotiation, Lamido Sanusi, the Central Bank governor, said
recently that bids have been received for the affected banks from two
foreign institutions and some local banks. However, no foreign
institution has made its intention pubic. FirstRand, the South African
bank, regarded as one of the bidders, has said it is not bidding.

No foreign interest

Sam Moss,
spokesperson for Firstrand, said the institution is not interested in
any of the rescued banks, even though it has already registered its
presence in the country’s financial sector. JP Morgan, another foreign
financial institution, has also said it is not interested in any of the
rescued institutions.

“While we are not
purchasing a local bank, we do have relationship with some of them and
helping to build capacity,” said Tosin Adewuyi, JP Morgan’s senior
country officer in Nigeria.

However, the
International Finance Corporation (IFC), the investment arm of the
World Bank, may be backing the sale of the rescued banks, with the
recent signing of cooperation agreement with First City Monument Bank
(FCMB). The agreement, which comes with a $70 million investment in the
bank, also includes a clause for future partnership. A statement by the
bank says the areas of partnership include “acquisition finance of a
distressed bank.” FCMB is one of the bidders for Finbank.

IFC support

IFC’s country
manager for Nigeria, Solomon Adegbie-Quaynor, said, “IFC is committed
to supporting the full recovery of Nigeria’s banking system, and our
investment in First City Monument Bank reflects this strategy.”

“The CBN cannot
sell any bank because it does not have the power to sell what does not
belong to it. The only instrument is for the CBN to liquidate and
transfer to the Nigeria Deposit Insurance Corporation and these two
options will be too heavy considering the current condition of our
economy,” said Sunny Nwosu, coordinator of one of the numerous
shareholder groups recently.

Boniface Okezie,
another shareholders’ group coordinator, said pending court cases would
stall any attempt by the CBN to sell the banks. He said CBN has not
disclosed how much each of the banks require to recapitalise, which is
why the shareholders are in court to prevent the sale.

Mohammed Abdullahi,
CBN spokesperson, said so far, the banks were making appreciable
progress in reaching agreement with potential core investors.

“Individual banks
can tell you how far they have gone. They are talking with people, and
it has reached advanced stage,” he said.

He, however, said the banks are in a better position to talk on how far they have gone with the various bidders.

While welcoming
delegates to the Conference of the Parties (COP) of the United Nations
Framework Convention on Climate Change (UNFCCC), President Felipe de
Jesus Calderon Hinojosa of Mexico said that climate change has been
driven by changes in human behaviour, and that a shift in another
direction is needed to reverse the trend.

He intoned that the
world must embark on the pursuit of “green development” and “green
economy” as the path to sustainable development. He also stated that
some of the steps to be taken to attain this ideal include progress on
the negotiations on Reduced Emissions from Deforestation and
Degradation in Developing Countries (REDD), as well as development of
technologies to reduce fuel emission.

These were nice
words. These were also very contentious ideas. There are several red
flags and concerns about REDD by indigenous groups and forest dependent
peoples, as well as mass social movements across the world. The idea of
canvassing the extension of financial assistance to the poorest and the
most vulnerable countries is also seen by critics as a possible way of
dividing them and making them pliable to suggestions and decisions that
may actually be contrary to their best interests.

Even before the
Cancun conference opened, there were concerns that efforts may already
be afoot to rig the outcome, as was the case in Copenhagen in 2009. One
concern is about a text for negotiation that is emanating from the
chair of one of the working group through an opaque process.

Another concern has
arisen from a decision of the Mexican president to invite selected
heads of states to the conference. The list is not openly available,
but already it is becoming clear that some uninvited presidents intend
to be in Cancun.

Last year in
Copenhagen, the COP began and ended under a cloud of doubts and
perceived undemocratic actions. At that meeting, many delegations from
developing and vulnerable nations believed that drafts of what would be
the final outcome document were being discussed and circulated within
privileged circles, away from the standard practice where such
negotiations took place on the open conference floor.

In Copenhagen,
there was a steady flow of leaked documents allegedly prepared by the
president of the COP. The anxiety in Cancun is being raised by the
texts prepared by the chair of the ad hoc working group on Long-term
Cooperative Action (LCA). The other major working group under the COP
is the one that deals with the Kyoto Protocol and another text is being
expected from the chair of that working group, also without a mandate
from the working groups, according to analysts.

The year between
conferences is spent in technical negotiations and preparations during
which delegations review texts prepared by chairpersons of the working
groups on the basis of the submissions made by the delegations or
members.

Variation in documents

The document
produced by the chair of the LCA appears to be something quite at
variance with what many delegates expected would be the outcome of the
negotiations and work done since Copenhagen. The document that
delegates are to debate is allegedly based on the ‘Copenhagen Accord’,
which some delegates insist was not an agreement at the end of COP15,
but was merely taken note of by that conference.

Questions are being
asked why such a document would now be legitimised and made the
foundation for serious negotiations expected to produce a fair and
ambitious agreement at the end of the conference in Cancun.

After the
Copenhagen conference ended without an agreement, the government of
Bolivia hosted a first ever World Peoples Conference on Climate Change
and the Rights of Mother Earth in Cochabamba in April 2010. The outcome
of that conference was the Peoples Agreement that the government of
Bolivia then articulated into a formal submission to the UNFCCC and the
secretary general of the United Nations.

The essential fault
line between those following the path crafted by the Copenhagen Accord
and those who do not accept it as the way towards fair agreement that
recognises the principle of common and differentiated responsibilities,
are quite serious, and the resolution has deep consequences for the
future of our planet and the species that inhabit it, including
humankind.

The draft text
circulated by the chair of the LCA puts forward the ambition that may
lead to an aggregate global temperature increase of up to 2 degrees
Celsius, as opposed to proposals made by a number of delegations that
the target should be between 1 degree and 1.5 degrees temperature rise
above pre-industrial levels. A 2 degrees Celsius temperature increase
would mean catastrophic alteration to some parts of the world, with
Africa being particularly vulnerable.

The text in
question has also disregarded the demand by vulnerable nations that to
ensure urgent and robust technology transfer for the purpose of
mitigation and adaptation, such transfers should not be governed by
subsisting intellectual property rights regimes.

Another sore point
in the text is that the financial commitment proposed does not step up
to the level of ambition needed to tackle the climate crisis, and is
even less serious than what was suggested by the so-called Copenhagen
Accord.

The immediate past
chair of the COP in her final statement indicated that the conference
must move in a way that would show that Cancun can deliver a good
outcome for tackling climate change.

At the end of the first day, the clear question on many minds was, can Cancun?

The World Bank
Group says it is working towards promoting the application of
international accounting standards in the country in a bid to
institutionalise greater transparency in financial reporting in the
banking and financial sectors of the economy.

The International
Finance Corporation (IFC), the investment arm of the World Bank, is to
collaborate with PricewaterhouseCoopers LLP, a corporate accounting and
finance consulting firm, to educate practitioners on the need to adopt
the accounting standards to enhance greater transparency in financial
reporting in the country, and allow Nigerian companies meet the
disclosure requirements of international investors.

IFC, which is the
largest global development institution focused on the private sector in
developing countries, is involved in efforts to create opportunities
for people to escape poverty and improve their lives by providing
financing to help businesses employ more people and supply essential
services.

Awareness and understanding

Managing partner,
PricewaterhouseCoopers, Ken Igbokwe, said in a statement that more than
80 banking and financial sector practitioners recently participated in
a one-day seminar in Lagos to help improve awareness and understanding
of the issues involved with adopting new International Financial
Reporting Standards (IFRS).

According to Mr.
Igbokwe, the impact of IFRS goes beyond reporting by accountants, and
covers all standards for measuring business performance, adding that
this makes it important that line managers understand its effect on the
internal and external reporting of the operations and performance of
the business.

IFC country manager
for Nigeria, Solomon Adegbie-Quaynor, said embracing the IFRS was
important to assist the financial market in preparing for the process
of change and to realise the importance and benefits to be derived from
increased transparency in financial reporting.

Removing subjectivity

Identifying the
benefits, Mr. Adegbie-Quaynor said apart from helping to remove some
subjectivity from financial reporting, the IFRS provides a consistent
basis for recognition, measurement, presentation, as well as disclosure
of transactions and events in financial statements, pointing out that
the challenge is in getting not only accountants, but other operators
in the banking and financial sectors, to adopt them in their operations.

“As more African
businesses operate internationally, it is important for investors to be
able to compare companies under similar standards in all countries
where they operate. Greater transparency, which these standards will
bring, is likely to attract increased investment into Nigeria,” he said.

Besides, he said,
local companies seeking dual listing in other countries will find IFRS
easier to comply with reporting requirements of overseas stock
exchanges, while governments will be in a better position to assess the
tax liabilities of multinational companies receiving income from
overseas, as well as for foreign multinationals setting up shop in
their own country.