Nigeria Content Online

Confronting China
and the United States in the debate over global imbalances and
currencies will not provide a solution, South Africa’s finance
minister, Pravin Gordhan, said on Thursday.

In a written
response to questions in parliament about a G20 meeting of finance
ministers last month, Mr. Gordhan said South Africa had called for
rebalancing the global economy by addressing monetary policy challenges.

“South Africa as a small, open economy, and faced with the problem
of a rapidly appreciating currency, called for a multilateral and
inclusive solution to the issues raised,” Mr. Gordhan said, reiterating
calls for the currency issues to be solved before escalating into a
trade war.

Two of Nigeria’s
nine rescued banks are in talks with foreign investors about
recapitalisation, but most of the others are more likely to be taken
over by local rivals, banking sources said on Thursday.

Sub-Saharan
Africa’s second-biggest economy rescued nine lenders deemed to be
dangerously undercapitalised in a $4 billion bailout last year. The
Central Bank has been trying to find new investors to help recapitalise
them since then.

Nigeria has set up
a state-run Asset Management Company (AMCON) to help absorb up to 2.2
trillion naira of bad bank loans, but this will only bring the rescued
lenders back to zero shareholder funds.

“AMCON will do the
non-performing loan purchase, but after that, there will still be a
hole, and that hole will have to be filled through mergers,” one senior
banking source said.

Banking sources said two of the lenders – Bank PHB and Union Bank – were in talks with foreign investors.

Four more are
talking to local banks, one has raised funds and will scale down to
survive, while two others have yet to find potential suitors, the
sources said.

A banking source
familiar with the negotiations said Habib Bank Ltd – one of Pakistan’s
biggest lenders, which is majority owned by the Aga Khan Fund for
Economic Development – was in talks with Bank PHB about increasing its
shareholding. Bank PHB was created in 2005 out of a merger between
Habib’s local subsidiary and Nigeria’s then Platinum Bank, and Habib
still has an interest in the bank. Bank PHB declined to comment.

Union Bank is in
talks with a consortium of private equity investors including local
firm, African Capital Alliance, World Bank private sector lender, the
International Finance Corp (IFC), and U.S. trade promotion agency, the
Overseas Private Investment Corporation (OPIC), banking sources said.

The consortium also
includes Botswana-based ABC, the parent company for several sub-Saharan
African banks, Keffi Capital, run by a former Goldman Sachs executive,
and London-based Auctor Capital Partners, the sources said.

Union Bank has said it is in exclusive talks with a potential suitor, but has made no further comment.

Central Bank
governor, Lamido Sanusi, has said foreign private equity investors and
banks are among those interested in the rescued lenders, but has given
no details.

Local consolidation

Four more rescued
banks – Afribank, Finbank, Oceanic Bank, and Intercontinental Bank –
are in talks with healthy local rivals about recapitalisation, the
banking sources said.

Afribank is
considering a bid by Fidelity Bank – which said last year it was
interested in a potential acquisition – several sources said. Fidelity
confirmed it had bid for a rescued bank, but made no further comment.

First City Monument
Bank (FCMB) is the preferred bidder for Finbank, which is less than a
tenth its size at current market prices, sources have said. Finbank has
said it is in talks with a potential investor, but made no further
comment.

Oceanic Bank and
Intercontinental, among the biggest of the rescued banks, are also in
talks with local competitors, but these are at an early stage, sources
said.

Spring Bank and
Equitorial Trust Bank (ETB), among the smallest of the distressed
banks, were yet to find suitors. Neither of the banks could be reached
for comment.

The ninth bank,
Wema, is restructuring into a regional bank, which has a significantly
lower minimum capital requirement than national banks. It raised 9
billion naira in a share placement in September, and has won approval
to raise 7.5 billion naira more to ensure its survival.

A tenth bank, Unity
Bank, was judged to have insufficient capital last year, but was not
given a capital injection because it had a healthy liquidity position.

It has increased its capital base to the minimum requirement, after raising 17.34 billion naira in a rights issue this year.

After
a meeting between top officials of Asset Management Corporation and
stockbrokers yesterday in Lagos, some stockbrokers said though they are
not totally satisfied with the current arrangement, the indication are
that the corporation was prepared to address their concerns.

The
meeting, which lasted for about an hour, was the first between the
Asset Management Corporation of Nigeria (AMCON) and the stockbrokers
since the Senate confirmed the appointment of the board members.

Operational guidelines

This
came as Mustafa Chike Obi, AMCON’s managing director, said it would
work within the contents of its operational guidelines, which are yet
to be made public.

“Only
the Central Bank has the prerogative to release these operational
guidelines,” Mr. Chike Obi told stockbrokers at the meeting, which was
preceded by another meeting with some bankers. He said based on the
guidelines, assets will be held for two to three years while “Central
Bank may change this time frame, but any sale will be announced
publicly.”

The managing director did not speak with journalists after the meetings.

A
source who attended the meeting said stockbrokers were, however, not
fully satisfied with how AMCON intends to address the issue of margin
loans, which remains a major impairment in their books.

“Mr.
Chike Obi was not specific on how margin loans will be treated. Brokers
were expecting a categorical statement that once AMCON takes up such
loans, it will discharge stockbrokers of their indebtedness,” the
source said.

Joshua
Omo-Kehinde, managing director of Marimpex Investment Limited, a
stockbroking firm, said there are various issues involved in each case
of margin loans, which is why it is proper for the corporation to
handle each situation on a case by case basis.

“What happens if some of the shares or none of the shares have been sold?” Mr. Omo-Kehinde queried.

“Also,
do not forget that there are contractual agreements on each of the
loans, which must be honoured. So it will not be easy to apply the same
set of rules for all the cases,” he further said.

No nationalisation

One of the assurances given by AMCON was that it had no intention to be active owners of companies whose shares are acquired.

“This is due to concerns about nationalisation of such companies,” the source added.

He
said AMCON intends to discuss with every debtor with a view to
providing forebearance or debt forgiveness, while the asset corporation
will help to recapitalise the banks by working with the prospective
buyers and merger partners.

As
part of the agreement, AMCON will be buying loans and not the
underlying assets of the non performing loans, while payments will be
made with zero coupon three year bonds, which will be refinanced with a
seven year bond to be determined by the market.

Victor Ogiemwonyi, managing director of Partnership Investment Plc, said AMCON has shown that it will take its job seriously.

“Their
actions to date and the speed and fair value given to assets they are
acquiring in the first phase have given them credibility. The
implication for the market is very positive,”Mr. Ogiemwonyi said.

He said once all the toxic assets are taken off the books of the banks, there will be room to resume lending to the economy.

AMCON,
however, said it will not acquire tainted assets, which were based on
insider related loans, or loans acquired with criminal intent.

Corporate Social
Responsibility (CSR) is an initiative of an organisation to engage in
the development of the community where it operates. It is aimed at
providing social amenities for public good, delivering value, and
showing respect for the people and community.

An organisation
sees itself as socially responsible when it adds value to the lives of
the community and its people. When an organisation intends to support a
community in its quest for development, such organisation and its
brands are perceived in good light. Subsequently, the consumers will
have a positive view of a brand that is making concrete effort to make
the community a better place.

The question is why
are corporate organisations shirking their responsibilities in
engendering development in their communities of operation? The reason
is not farfetched, as some organisations reap profits and do not see
the need to give back to the society. In this clime, it has been
observed that several corporate organisations have not deemed it fit to
support developmental projects.

One sees no reason
why a little percentage of their profit is not set aside to make life
more meaningful to the people. It may be argued that this is the
responsibility of the government, but government cannot do it alone. A
little support from corporate organisations goes a long way in solving
myriads of problem people face.

CSR indeed adds
value to the company and its brands, as the consumers believe their
communal interest are given attention. It focuses on the social well
being of the society, and this builds brand affinity and loyalty
amongst the consumers. There is a link between CSR and brand
perception, as any brand that seeks public good is perceived positively.

It has become
important for corporate organisations to conduct their businesses in
such a manner that adequately addresses the needs of the consumers. CSR
should be part of a corporate strategy and should receive support from
the top level management. Corporate organisations should seek long term
partnership between them and the communities they operate in.

Social responsibility is paramount

Perception is very
important. This is because CSR plays a role in consumer behaviour, as
consumers are CSR-sensitive. There is an increasing influence of CSR on
consumers purchase behaviour. This becomes crucial, as consumers
perceive such brands as responsible brands.

Corporate
organisations should develop a holistic approach to CSR and also
evaluate their social relevance to the community. When such evaluation
takes place, organisations should measure their impact against the
overall brand reputation.

If there is a
yawning gap, then such organisations need to take the right measures to
be seen and perceived as “a supporter” of the people. It needs not be
emphasised again that CSR positions companies in the minds of consumers.

When an
organisation focuses on impactful initiatives, the community is bound
to be loyal to the brand. For instance, a company went up in flames,
but the community mobilised themselves and the fire was extinguished.
CSR plays a dominant role in building customer loyalty, and these are
the differentiating factors. The value of any coporate organisation and
its brand is based on consumers’ experience.

CSR is not just a
PR exercise, and neither is it just an image booster, but a singular
act that can transform the society and position the company as socially
responsible and relevant to the society. It is, indeed, a cohesive
strategy which aims to reach out to all, and create touch points to
make consumers have memorable experience.

It yields enormous
benefits to the brand when it identifies with the yearnings and
aspirations of the consumers. It indeed makes consumers create
indelible associations with brands, as they believe the brand promotes
their interest.

It is also apt to
state that CSR activities should not be initiated because the
organisation wants to discourage consumers from raising ethical
questions posed by their operations. This adversely affects the
perception of the organisation by the consumers. If any organisation
embarks on CSR based on hypocrisy and insincerity, such brands will
suffer perception crisis. It is important that corporate organisations
measure their responsiveness to the community, and also proactively
promote the public interest.

CSR is not only to leverage visible brand image, but also to connect with the consumers.

Nigeria
is ranked first among the top 10 remittance recipients in 2010 in sub
Saharan Africa, according to the World Bank’s latest Migration and
Remittances Factbook 2011 released on Tuesday.

Nigeria
received $10 billion (about N1.5 trillion) from remittances, followed a
distant second by Sudan, with $3.2 billion; Kenya, $1.8 billion;
Senegal, $1.2 billion; and South Africa, $1 billion. The report also
listed Nigeria among the top 10 emigration countries in the region
alongside Burkina Faso, Zimbabwe, Mozambique, Côte d’Ivoire, Mali,
Sudan, Eritrea, the Democratic Republic of Congo, and South Africa.

The
report described remittances to developing countries as a resilient
source of external financing during the recent global financial crisis,
with recorded flows expected to reach $325 billion by the end of this
year, up from $307 billion in 2009. The report added that worldwide,
remittance flows are expected to reach $440 billion by the end of this
year.

The true size of remittances, including unrecorded flows through formal and informal channels, is believed to be larger.

Official
data for the months of January-August 2010 indicate that the Central
Bank supplied approximately 27.1 percent of the $52 billion of inflows
to Nigeria’s foreign exchange market, with “autonomous sources” oil
companies, international institutions, and remittances accounting for
the rest.

Source of financial support

“Remittances
are a vital source of financial support that directly increases the
income of migrants’ families,” said Hans Timmer, director of
development prospects at the World Bank.

“Remittances
lead to more investments in health, education, and small business. With
better tracking of migration and remittance trends, policy makers can
make informed decisions to protect and leverage this massive capital
inflow, which is triple the size of official aid flows,” Mr. Timmer
said.

Christian
Udechukwu, West Africa regional director, Money Transfer International
(MTI), a money transfer firm, said more remittances inflow into the
region can be achieved when regulators of countries, which have high
numbers of Diaspora population, lower barriers on remittances from
their countries.

“These
barriers are usually in terms of restrictions on minimum remittances,
stiff documentation requirements, and outright refusal of permission to
financial intermediaries to license companies who are keen to serve the
diaspora remittances market,” Mr. Udechukwu.

The
World Bank report stated that officially recorded remittance flows to
developing countries are estimated to increase by six percent to $325
billion in 2010. This marks a healthy recovery from a 5.5 percent
decline registered in 2009.

“In
line with the World Bank’s outlook for the global economy, remittance
flows to developing countries are expected to increase by 6.2 percent
in 2011 and 8.1 percent in 2012, to reach $374 billion by 2012,” the
report said.

The
top remittance sending countries in 2009 were the United States, Saudi
Arabia, Switzerland, Russia, and Germany. Worldwide, the top recipient
countries in 2010 are India, China, Mexico, the Philippines, and
France. As a share of GDP, however, remittances are more significant
for smaller countries – more than 25 percent in some countries.

Investors at the
Nigerian Stock Exchange (NSE) recorded additional gains on the value of
their equities on Wednesday, in spite of the nationwide strike that
affected many investments.

The Exchange market
capitalisation closed yesterday at N8.116 trillion, after opening the
day at N8.105 trillion, reflecting 0.13 percent upturn or N11 billion
gains. Meanwhile, about N209 billion had been gained on Tuesday,
following investors’ interest in some blue chip stocks.

The NSE All-Share
Index also appreciated on Wednesday by 0.13 percent or a gain of 32.84
points on the previous day’s figures of 25,383.37 basis units, to close
at 25,416.21 units.

Transaction volume
on the Exchange yesterday grew by 6.18 percent to close at 557.25
million units exchanged in 5,986 deals, as against a growth of 26.59
percent recorded the previous trading, to close at 524.83 million units
exchanged in 7,340 deals.

‘No selling pressure’

Olugbenga Emmanuel,
a finance analyst at WealthZone Company, a portfolio management firm,
said the market closed on a positive note because “there was no selling
pressure by investors,” a sign he called “‘the gradual return of
investors’ confidence in bourse.”

Meanwhile, a
stockbroker, who would not like to be mentioned, said the labour strike
would have stopped trading activities and subsequently affected stock
performance if some traders did not summon their staff to ignore the
industrial action.

“Initially, we
thought there won’t be trading because some staff refused to show up
early at work. But things got back to normal before the actual trading
period started,” he said.

More gainers

The number of
gainers at the close of trading session on Wednesday closed higher at
48 stocks, as against the 43 gainers recorded the previous day, while
losers closed at 21, compared with the 20 losers recorded on Tuesday.

Nigerian Breweries
and Lafarge Wapco topped the price gainers’ table with an increase of
N1.97 and N1.49 on their initial prices of N77.00 and N40.51 per share,
respectively. Cadbury and Oando followed in the chart with an increase
of N1.00 each, to close at N28.00 and N65.50 per share.

On the losers’
side, Dangote Cement and Conoil led the price losers’ chart with a loss
of N6.72 and N2.04, from their opening prices of N134.66 and N40.98 per
share. Flour Mills Nigeria and African Petroleum followed with 98 kobo
and 94 kobo losses respectively, to close at N70.02 and N24.00 per
share.

Active subsector

The banking
subsector led the most active subsectors’ chart with 300.927 million
volumes of shares, valued at over N2.395 billion.

The volume recorded
in the subsector was driven by transaction in the shares of Union Bank,
Zenith Bank, First Bank, United Bank for Africa, and Oceanic Bank.

The total volume of
224.79 million units, valued at N1.96 billion, traded in the shares of
the five stocks accounted for 33.03 percent of the entire market volume.

The world’s
addiction to fossil fuels put the hangman’s noose around the neck of
Ken Saro-Wiwa and eight other Ogoni leaders on 10 November, 1995. That
noose was tightened under the watch of Shell through a kangaroo
military tribunal rigged by the worst dictator Nigeria ever had. Today,
we can say that every oil rig that sucks oil in the Niger Delta is a
hangman’s noose around the necks of the suffering peoples and
communities.

Today, we all stand
before history. We stand in front of a backdrop of injustice,
oppression, and ecological genocide – not just historical, but current,
and it is the threat of its progressing into the future that we must
stand together to fight.

In his statement
after the verdict of guilt was passed on him, Ken Saro-Wiwa declared,
“We all stand before history… appalled by the denigrating poverty of
peoples who live in richly endowed lands.”

We stand distressed
by “their political marginalization and economic strangulation, angered
by the devastation of their land and their ultimate heritage.”

He went on to call
for “a fair and just democratic system which protects everyone and
every ethnic group, and gives us all a valid claim to human
validation.”

Ken Saro-Wiwa’s
words, though spoken fifteen years ago, still ring true in our ears
today. A man with a keen sense of history, he told the agents of the
military dictator that he and his colleagues were not the only ones on
trial. Hear him: “Shell is here on trial, and it is as well that it is
represented by counsel said to be holding a watching brief… The
company has, indeed, ducked this particular trial, but its day will
surely come, and the lessons learnt here may prove useful to it, for
there is no doubt in my mind that the ecological war that the company
has waged in the Delta will be called to question sooner than later and
the crimes of that war be duly punished. The crime of the company’s
dirty wars against the Ogoni people will also be punished.”

A man of history

Saro-Wiwa was
indeed a man of history. While shackled in one military jail or
another, the world recognised his worth and the validity of the Ogoni
struggles. In the last months of his life on earth, he won several
awards in recognition of his just struggles: the Fonlon-Nichols Award
for excellence in creative writing and the struggle for human rights;
the 1994 Right Livelihood Award or Alternative Nobel Prize for Peace;
the 1995 Goldman Environmental Prize, the most prestigious
environmental award in the world; the eight Bruno-Kreisky Foundation
Award for human rights; the 1995 British Environmental ad Media Special
Awareness Award; and the Hammett Award for Human Rights of Human Rights
Watch.

The Students Union
of the Ahmadu Bello University in Nigeria conferred on him the award of
Grand Commander of the Oppressed Masses. Surely, none of these could
have been given to a man of mean repute.

Standing on the
shoulders of history, we see clearly the beginnings of the trials that
were bound to expose those who have waged ecological wars against the
Ogoni people, the peoples of the Niger Delta and elsewhere in the
world. We continue to see a company like Shell bowing before courts and
before the Stock Exchanges in North America, accepting out of court
settlements, and paying fines to avoid prosecution on bribery and
corruption charges.

In 2005, they also
admitted to having falsified their crude oil reserve figures the
previous year, and paid some hefty fines to cover that up. Recent
reports have it that they are halting suits over bribery by paying some
fines. Last year, they agreed in a New York court to pay over $15
million to Ogoni litigants for human rights abuses.

In all these, we
are confident that the words of Ken Saro-Wiwa will come to pass. One
day, the eco devourers will have their day in the dock. And this is
already happening in The Hague, where three Niger Delta communities are
suing Shell for environmental degradation.

Perpetual death

The dominant
predatory production and consumption patterns in the world, and the
myth that crude oil is a cheap form of energy, has meant perpetual
death sentence on communities where there is crude oil and gas.

If good men like
Ken Saro-Wiwa had stayed silent and allowed the pattern of
environmental degradation by oil extractive activities to go on
unchallenged in Ogoni land, it is conceivable that things would have
been worse by now.

Today, on account
of the massive oil spills, gas flares, and careless handling of other
industry-related toxic pollutants, life expectancy in the Niger Delta
has plummeted to 41 years. If Ken Saro-Wiwa had not started the
struggle, perhaps life expectancy would have possibly nose-dived to 20
years.

We stand before
history and affirm that a sane future must be built on the platform of
solidarity, dignity, and respect for the rights of Mother Earth.

We demand an end to
fossil fuel addiction: be it crude oil, tar sands, or coal. We call for
a Sabbath of rest for Mother Earth. Over the years, she has been
abused, raped, and exploited and it is time to say enough is enough.

The blood of Ken
Saro-Wiwa and all those massacred in the ecological wars for crude oil
cry out today in demand for remaining oil to be left in the soil. With
less than 40 percent of crude oil still left in the soil, it is
foolishness to insist that we can go on driving on this dreg through
eternity.

Nigerian automobile
imports fell by more than a quarter in the first ten months of 2010,
compared to the same period last year, as cash-strapped consumers shied
away from big-ticket purchases, industry officials said.

Vehicle sales in
Africa’s most populous nation are a proxy measure for private
purchasing power, a leading economic indicator which is not formally
available in Nigeria.

Nigerian port figures showed new vehicle imports in the first ten
months tumbled 26 percent to 29,372 units, according to Mohan Sethi,
general manager at Nigeria’s Dana Motors, which imports Kia cars and
vans.

AngloGold Ashanti,
the world’s third largest gold miner, beat its guidance for
third-quarter output and costs on Thursday, sending its shares up more
than 4 percent.

Investors
overlooked the company’s adjusted headline loss for the July-September
quarter, which was largely due to the previously announced closure of
its hedge book.

AngloGold has
closed out instruments it used to hedge against the price of gold,
allowing it to sell at market prices, boost its cash flow and profit
margins, and to push ahead on some of its growth projects.

“I’m quite happy with the results. They are managing their costs and
the whole sector is also helped by very strong fundamentals,” said Abri
du Plessis, an analyst at Gryphon Asset Management.