Nigeria Content Online

The sum of $500m
(about N75m) has been provided to the Bank of Industry to boost access
to funds by small and medium-scale enterprises(SMEs) as well as small
growing businesses (SGBs).

The minister of
finance, Olusegun Aganga, who spoke in Abuja during the formal launch
of the initiative last week at the unveiling of Federal Government
support plan for SMEs and small growing business, said 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.

“These sectors have
the potential to become a major contributor to our gross domestic
product and productive capacity. We must leverage the entrepreneurial
strengths of our people to help them to become successful,” he said.

Though government
has been investing in the promotion of the SMEs and SGBs, the minister
identified lack of business training and capacity, which constituted a
major constraint to access to business credits, as the bottlenecks to
the growth of the sectors.

Holistic development

To reduce the high
cost of business, increase the quality of training and capacity
building for businesses, and the access to credit and other finance for
SMEs and SGBs, he said the launch of the three-pronged programme would
act as catalysts for their holistic development.

Mr. Aganga said the
Enterprises Development Services of the Pan-African University, an
affiliate of the Lagos Business School, would coordinate the capacity
development programme in liaison with other centres nationwide to
provide business-practicals, classroom-based trainings, and business
advisory support services to improve the managerial capability and
bankability of businesses.

He warned that
government will have zero tolerance for non-performance of loans by
businesses, stressing the importance of paying back on time monies
borrowed from banks to enable others benefit from the scheme.

Besides, the Bank
of Industry (BoI) would collaborate with international development
partners, like the United Nations Development Programme and the United
Nations Industrial Development Organization to fix some of the market
infrastructure failures in industrial parks, including shared amenities
and services, such as access roads, electricity, water, sewage,
telecoms, and security.

Nationwide support

The national
coordinator of the programme, Peter Bankole, said a website that will
call for applications from businesses from all the geo-political zones
in the country is to be launched in two weeks, while the applications
are to be processed within four to six weeks for the commencement of
management training for the small and growing businesses.

“We will continue
to support them on an ongoing basis for about a year. Alliances with
various centres nationwide have already started. We hope to work with
the IDCs around the country as the focal point of the programme. We
will leverage upon the comparative advantage of each geo-political
zone, which has already been identified by the World Bank,” Mr. Bankole
said.

Managing director,
BoI, Evelyn Oputu, who identified the existing capacity gap as one of
the most difficult aspects of doing small business in Nigeria, said the
bank would strive to make access to fund for business possible at
single digit rates to help realise government objectives.

“BOI has in the
last five years tried to dedicate more than 85 percent of its resources
to support the small and medium-scale business sector.

“Government’s
decision to provide support through the programme will go a long way to
change the landscape of business in the country. There is no point the
country growing in double digits if the people continue to be poor,”
she said.

Financial
Derivative Company, a finance and research firm, in its bi-monthly
economic and business update, says the upward adjustment in interest
rates have helped to reduce pressure on the nation’s reserves.

“The
nation’s external reserves declined for the 12 consecutive months in
November to $33.1billion from $43billion a year ago, representing 23
percent depletion. Year to date, reserves have dwindled by 21 percent
from $42.1bn. However, the rate of depletion has slowed, thanks to
upward adjustments in interest rates that indirectly helped to reduce
the pressure on the reserves”.

The
report stated that the rate of decline started to slow down in
September when the Central Bank of Nigeria increased the benchmark
interest rate from 6 percent to 6.25 percent.

“On
a month-on-month basis, reserves declined by 1.3 percent in November,
compared to 3 percent and 5 percent decline in October and September
respectively.”

This is in spite of high oil price prices (averaging $87pb) and high oil production (above 2.1mbpd) in November.

“Also, forex demand and CBN intervention in the forex market dropped significantly during the period,” the report stated.

According
to the firm, the Central Bank, which had earlier stated that, “the
continued dependence of the country on imported food and energy is one
of the main sources of erosion of our foreign re-serves”, should move
fast to rescue what is left of the reserves.

Way out

According
to the report, high interest rates will encourage capital inflow which
will further reduce forex and reserve pressures.

“If
an increase in interest rate can have the effect of slowing the pace of
depletion, it could also be supportive of accretion and increase the
propensity to save, as most economic agents would prefer to delay
consumption and earn interest on their income, as long as the interest
rate is higher than the rate of inflation”.

Nigeria’s
foreign exchange reserves fell by almost a quarter to just under $33
billion by December 2 from $43 billion a year ago, the Central Bank
said on Monday. The figure was also around 4 percent down on the $34.3
billion recorded in mid-November. Increased government spending in the
nation’s economy has put pressure on reserves.

Dollar
demand at the bi-weekly forex auction has also forced the Central Bank
to dip into the reserves to defend the local currency for months.
According to the report, compared to last month’s trading values, the
naira has depreciated marginally against the US dollar by 30K to
N148.6/$ at the official market. At the inter-bank market, it
depreciated by 43k to trade at N150.71/$. The naira, however,
appreciated marginally in the parallel market by 50k to sell at N153/$.

Samir
Gadio, emerging markets strategist, Standard Bank, said the growth
money supply continued to decline to 13.2 percent year-on-year in
October, from 18.7 percent year-on-year in September and 21.6 percent
year on year in August, reflecting a sharp contraction in net foreign
assets and sizeable deceleration in Net Domestic Credit growth in
annual terms. “Broad money was broadly flat in October, at
N11.2trillion ($74.7billon), down from N11.5trillion ($76.7billion) in
August.

Net foreign assets shrank 13.9 percent year-on-year in October, from
negative figures of 7.5 percent year-on-year in September and 13.1
percent year-on-year in August. This probably primarily mirrors the
downward trend in the Central Bank’s foreign reserves,” he said.

South Africa will
start a much-delayed plan to buy electricity from green energy plants
next year under a new subsidies programme to help boost private
investment in renewable power, a senior official said on Monday.

Africa’s biggest
economy is struggling to meet fast rising demand for power, and
state-owned utility, Eskom, said supply would remain tight until 2015,
and especially over the next two years, until its two new power plants
come on stream.

Private producers
and industry have long said they could supply thousands of much-needed
megawatts – either through greenfield projects or via cogeneration at
their plants – but have been blocked by a lack of power purchase deals.

Renewable energy
feed-in-tariffs have long been anticipated to stimulate large-scale
investments, but the country has yet to sign a deal with one of the
independent producers already putting money into renewable projects
after the first phase of subsidies was announced in March last year.

“We are targeting
the first quarter of 2011 for the release of the procurement
documentation,” Ompi Aphane, acting deputy director general at the
energy ministry, told a media briefing.

The tariffs set out
the price per unit of electricity to be paid for energy from renewable
sources. They cover the cost of power generation and allow for a
reasonable profit to tempt private developers to invest in renewable
energy.

South Africa is
increasingly looking towards renewable energy sources to help plug a
chronic power shortage and decrease its dependence on the coal-fired
power stations that provide most of its electricity.

The country expects
to have 7,200 MW of electricity supplied by renewable projects over the
next two decades under a new energy resource plan currently under
development.

South Africa’s power demand is expected to more than double from levels of around 37,000 MW by 2030.

Unseasonal rain
mixed with lengthy spells of sunshine last week in most of Ivory
Coast’s cocoa growing regions augured well for healthy development of
the 2010/11 main crop, farmers and analysts said on Monday.

Ivory Coast is in
the dry season when rains are normally scarce. Farmers welcomed the
latest precipitation, saying it will strengthen the development of
flowers and small pods to pave the way to an abundant crop compared
with last year.

Ivory Coast’s cocoa
regulator projected 800,000 tonnes of output during the main crop, down
100,000 tonnes from last season due to black pod disease, but analysts
think the forecast is low and see good weather pushing volumes above a
year ago.

“Weather conditions
are favourable to growing lots of cocoa this year. There has been
abundant rainfall in December, and it is rare to see that,” said Lazare
Ake, a farmer in the western region of Soubre, which accounts for about
a third of Ivory Coast’s cocoa output.

“There are many
more pods than last year. This means that we’ll have more cocoa this
year,” said Labbe Zoungrana, who farms near San Pedro.

About 43 mm of rain
fell in the town of Soubre, and 13 mm fell in Sassandra, the southern
part of the Soubre region, analysts said.

In the southern region of Aboisso, analysts reported about 36.3 mm of rain last week mixed with sunshine.

“We have a mix of
sun and enough rain for the dry season. The volumes of large beans will
be higher this year compared to last,” said one analyst.

In the centre-west
region of Daloa, which accounts for 358,000 tonnes of Ivory Coast’s
roughly 1.2 million tonnes of yearly output, farmers were happy with
one abundant rain during the last week.

“The farmers are
happy with this rain. It will help the trees ahead of the harmattan
(seasonal wind),” said farmer Attoungbre Kouame, adding fewer trees
were likely to die during the dry season.

In the region of Abengourou, which produces about 75,000 tonnes a
year, an analyst working for an industrial plantation reported about
8mm of rainfall.

Investors at the
Nigerian Stock Exchange (NSE) recorded additional losses at the close
of trading session on Monday, in spite of the extension of trading
hours aimed at improving market performance.

The Exchange market
capitalisation of the 201 First-Tier equities closed yesterday at
N7.918 trillion, after opening the day at N7.925 trillion, reflecting
0.08 percent decline or over N7 billion losses. Meanwhile, the market
recorded N43 billion losses last Friday after gaining about N28 billion
the previous day.

The NSE All-Share
Index also shed 0.08 percent or a loss of 21.48 units on Friday’s
figures of 24,807.04 basis points, to close on Monday at 24,785.56. Law
Union and Rock Insurance, Guaranty Trust Bank, and First City Monument
Bank were the most traded stocks yesterday, followed by First Bank and
Skye Bank.

Profit taking

Market watchers
said the Exchange witnessed a decline on account of weakness observed
in bargain activities due to profit taking tendency recorded across the
sectors. The NSE Exchange sectoral indexes closed negative as NSE 30,
which basically measures the performance of blue chips in the market,
dropped by 0.12 percent.

The NSE Oil &
Gas shed the highest point by 1.21 percent; Food & Beverages
declined by 0.76 percent; NSE Insurance declined by 0.29 percent while
Banking, the only gainer, reversed the previous negative outlook to
gain by 0.60 percent.

The number of
gainers at the close of trading session on Monday closed higher at 24
positions, as against the 22 gainers recorded previous session, while
losers closed lower at 36 stocks compared with the 37 losers recorded
on Friday.

Most active

The Banking sector
led the market transaction volume today with 161.80 million units
valued at N1.34billion exchanged in 3,527 deals, as against 93.66
million units valued at N651.29million exchanged in 2,763 deals
recorded on Friday. The volume recorded in the sector was driven by
transaction in the shares of Guaranty Trust Bank, FCMB, First Bank,
Skye Bank, and Oceanic Bank.

The total volume of
94.49 million units valued at N980.70 million traded in the shares of
the five stocks accounted for 30.56 percent of the entire market volume
and their value represented 40.76 percent of the market’s
value.Transaction volume on the Exchange grew by 57.31 percent to close
at 309.20 million units exchanged in 6,212 deals, as against a decline
of 11.02 percent recorded at previous trading to close at 196.55
million units exchanged in 5,126 deals.

Meanwhile, the
management of NSE lifted off technical suspension on Crusader Nigeria,
Intercontinental Wapic Insurance, Staco Insurance, The Tourist Company
of Nigeria, and Arbico Plc.

The extension

The Capital Market
Committee had last Monday approved the extension of the trading hours
from 9.30 am to 2.30 pm, as against the former 9.30 to 12.30 pm. The
Interim Administrator of the NSE, Emmanuel Ikazoboh, the extension “was
a right step in the right direction,” adding that “it was one of the
strategic moves by the leadership of The Exchange to reposition the
market for enhanced competitiveness.”

Mr. Ikazoboh said the extension would give foreign investors,
especially those in the United States of America, an opportunity to
participate in the Nigerian market.

The World Bank group yesterday assured
Nigeria of its continued support to realise its quest for validation as
Extractive Industries Transparency Initiative (EITI) Compliant Country
come January 15.

The bank’s EITI programme manager,
Anwar Ravat, told NEXT at the end of the World Bank team’s working
visit to the Nigerian Extractive Industries Transparency Initiative
(NEITI) in Abuja that he is satisfied with the level of progress so
far, to meet the deadline set by the EITI Board for Nigeria last
October.

He said he was in Nigeria to work with
the NEITI chairman, Assisi Asobie, and the secretariat, to ensure that
all outstanding issues that needed to be resolved are sorted out, as
part of the partnership between NEITI and the World Bank over the last
several years.

“From my interaction, the NEITI process
so far is on track, and I assure you the world will continue to support
the process, which is ongoing. The support is not about the $3 or
$4million funding we have given over the last several years. The
important thing is the partnership. So, I am in Nigeria to work with
the National Stakeholders Working Group and the NEITI Secretariat, as
part of the process, as is the case in the last several years,” Mr.
Ravat said.

Prior to the meeting, the NEITI
executive secretary, Zainab Ahmed, highlighted the tremendous progress
made so far, pointing out that the report of the ongoing 2006-2008 oil
and gas audit is expected to be ready by January 2011, while the
process to procure auditors for the 2009 oil and gas audits as well as
the first solid minerals audit covering 2007-2009 has already begun.

“NEITI is concerned that implementation
has been slow because an Inter-Ministerial Task Team made up of the
relevant government agencies set up to monitor the remediation and
implementation of recommendations on remedial issues in the 2005 Audit
Report has not been quite active,” Mrs. Ahmed said, adding that the
immediate priority is to reconvene the Task Team before the end of this
month.

On reconvening, the inter-ministerial
task force, which is a standing committee comprising representatives of
all major government agencies, including the Nigerian National
Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR),
Central Bank of Nigeria (CBN), Office of the Accountant General of the
Federation (OAGF), and Federal Inland Revenue Service (FIRS), would
look at those issues, including discrepancies on signature bonuses and
the inadequate data from the metering system.

Metering infrastructure

On the metering
infrastructure, she said a report on the study received from the
consultants is being reviewed, while the recommendations are to be
forwarded to the Inter Ministerial Task Team for consideration when it
reconvenes.

She said the FIRS
has already designed a template for Petroleum Profit Tax (PPT) returns
and estimates, which have already been reviewed by the Oil Producers
Trade Section (OPTS) of the Lagos Chamber of Commerce and agreement
arrived at on the cost component for implementation.

On processes to
ensure revenue flow interface among government agencies, the NEITI
scribe said the CBN has deployed new IT applications to enhance their
operational efficiency, while the NNPC now provides advance information
on financial flows to all affected agencies prior to Federation
Accounts Allocation Committee (FAAC) meetings.

Similarly, OAGF
receives from CBN credit advices in respect of all the oil revenue
receipts, in addition to all revenue bank statements, while CBN reports
on revenue receipts from crude sales, PPT, royalty, gas flaring penalty
and others.

</

Nigerian interbank
interest rates climbed to 9.91 percent on average this week from 5.83
percent last week, on a liquidity crunch triggered by a big cash
withdrawal by state energy firm, NNPC, traders said on Friday.

The secured Open
Buy Back rose to 8.25 percent from 5.0 percent, 200 basis points above
the Central Bank’s 6.25 percent benchmark rate and 4 percentage points
higher than the Standing Deposit Facility rate.

Overnight funds closed at 10.5 percent from 6.0 percent, while call money traded at 11 percent from 6.5 percent.

“We expect
interbank rates to climb further because there are going to be more
cash outflows from the system next week,” one trader said.

The office of the Millennium Development Goals has established 60 community farms in the Federal Capital Territory.

Nancy Narthen, the
MDGs Task Manager, Women and Youth Empowerment in the FCT, said in
Abuja on Sunday that 10 farms were established in each of the six area
councils in the territory.

“We know that most
of the youth in the rural areas cannot access vocational training in
the city centres. And because of the absence of these vocational
centres and with the support of the MDGs, we decided to start the
community farms.

“Since their main occupation is farming, we decided to find a way of
making it attractive for the youth so that they can come back to
farming,” she said.

Tanzania’s coffee
prices fell at the latest weekly auction in line with global trends,
but traders said on Monday that prices were likely to rise in the
coming weeks.

“The decline in
coffee prices … followed the international markets. But coffee prices
in Tanzania remain very high,” said a trader at a leading coffee
exporting company.

“The outlook is
that there is not a lot of coffee left to sell, so the volumes are
going down. The prices in the auction should maintain their current
high levels,” he added.

World oil prices are at a good level, Algerian energy minister, Youcef Yousfi, said on Monday.

Oil ministers from
members of the Organization of the Petroleum Exporting Countries are to
meet on December 11 in Ecuador. Several member states, including
Algeria, have said there is unlikely to be a change in production
quotas at the meeting.

“They are good.
They will stay at their current level, God willing,” Mr. Yousfi told
reporters when asked about oil prices. Algeria is the world’s eighth
biggest exporter of crude oil.