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The minister of
state for commerce and industry, Josephine Tapgun, has urged the Common
Fund for Commodities, an international financial institution
established by the United Nations, to pay more attention to rubber
projects in Nigeria.

She said this on
Tuesday when the organisation’s managing director paid her a courtesy
visit at her office in Abuja. Ms. Tapgun said that the Nigerian
government pays special attention to the organisation activities in
providing support to small scale enterprises and value addition to
commodities in Nigeria.

Ali Mchumo, CFC
managing director, said Nigeria is strategic to CFC programme
actualisation, and that Nigeria has shown political will and was the
only country among members of CFC from Africa that is making
contribution to the fund. Mr. Mchumo added that he hoped that Nigeria
would continue to play an important role in the institution’s
activities.

The courtesy call
was preparatory to the 22nd governing council meeting of CFC, holding
in Abuja. The governing council is the highest decision-making body
within the institution structure of the Amsterdam-based Common Fund,
which finances commodity development projects for small and medium
sized enterprises in commodity production, processing, and trade, in
developing and least developed countries.

The minister, who
also represented vice president, Namadi Sambo, at the opening of the
governing council meeting, expressed concern over the volatility and
instability of commodity markets with less than three percent of total
Official Development Assistance (ODA) to agricultural commodity sector.

She lamented the
continued restriction to market access of commodities from developing
countries to developed countries, and called for the abolition of such
practice. She challenged the World Trade Organisation (WTO) to remain
committed to development, as enunciated in the DOHA Round, with special
attention to the peculiar circumstances on developing and least
developed countries, and adopt an approach that would be fair and
transparent, with respect to trade in agricultural commodities.

The federal
government also promised to assist the CFC and strengthen its future
collaboration, as well as give both moral and financial support to the
organisation. Ms. Tapgun further said that recent economic and
political reforms embarked on by the government have drastically
improved the corporate governance and political climate of the country,
adding that it is not taking for granted the undeniable attraction of
the country to investors, and it is making efforts and striving hard to
improve the economic environment and introduce new incentives.

“We are taking
drastic measure to rebuild, overhaul, and considerably improve our
infrastructure, particularly power supply and transportation, in order
to increase the efficiency of our national economy and decrease the
cost of doing business. We have invested heavily in the provision of
steady power and have launched a road map on power.

“However, to
achieve quick and sustainable results, we are, among other measures,
privatising the provision of power and transport infrastructure,” she
stated.

JP
Morgan, a United States investment banking and securities firm, has
said it is still managing $500 million of Nigeria’s foreign reserves,
in collaboration with Zenith Bank.

Tosin
Adewuyi, the bank’s senior country officer in Nigeria, said the
collaboration, which has been on since 2006, is still ongoing.

“Zenith
Bank Nigeria joint venture is still very much on. Nothing has changed
since then,” Mr. Adewuyi said at the sidelines of a workshop between
the Nigerian Stock Exchange, the London Stock Exchange, Thomson
Reuters, and JP Morgan, held yesterday in Lagos.

The
Central Bank, in October 2006, gave 14 Nigerian banks, with their
international asset manager partners, $7 billion each, out of the
country’s foreign reserves, to manage on behalf of the country.

The
14 global asset managers and their local counterparts were Black Rock
and Union Bank; J.P. Morgan Chase and Zenith; HSBC and First Bank; BNP
Paribas and Intercontinental Bank; UBS and UBA; Credit Suisse and IBTC
Chartered Bank; Morgan Stanley and GTB; Fortis and Bank PHB; Investec
and Fidelity; ABN Amro and Access Bank; Cominvest and Oceanic Bank; ING
and Ecobank; Bank of New York and Stanbic Bank; and Crown Agents and
Diamond Bank.

Mr. Adewuyi said despite the drop in Nigeria’s foreign reserves, the arrangement still subsists.

Deepening presence

He added that JP Morgan may consider deepening its presence in the country.

“We view Nigeria as a key market for us in Africa. In Africa, pretty much Nigeria comes into number two,” he said.

He, however, said the bank is not considering buying into any of the rescued banks.

“While
we are not purchasing a local bank, we do have relationship with some
of them and helping to build capacity. We don’t run a retail bank in
Nigeria, at least not now. Not to say, in the next two or three years,
we don’t see that as a viable model. But so far, we support banks,
corporations, and government behind the scene internationally,” Mr.
Adewuyi said.

Ibukun
Adebayo, head of primary markets, Middle East, and Africa of the London
Stock Exchange (LSE), said it was collaborating with the Nigerian Stock
Exchange to enhance its development. He said the Stock Exchange has
performed as expected, considering the fallout of the global financial
crisis.

“The
Nigerian Stock Exchange is doing exactly what the London Stock Exchange
is doing, which is keeping interest in the market. We (LSE) get a lot
more support from our regulators. In the UK, we operate under a more
flexible environment. We don’t have rigid rules,” Mr. Adebayo said.

He said LSE operates under codes which need not be rigidly adhered to, provided there is proven effort to comply.

“That
flexible approach to regulation means that we have actually works very
well and that has attracted a number of investments,” he said.

He
explained that unlike Nigeria, investors in the UK capital market have
a responsibility to the companies in which they invest.

“We
have the investors’ stewardship code, which effectively means that
there is covenant between investors. We don’t want you here today and
gone tomorrow. You have to shadow a certain amount of dedication to a
company over a period of time,” Mr. Adebayo said.

This arrangement, he said, helped to mitigate the repatriation of
funds from the UK market during the global financial crisis in 2008.

South Africa’s
Tiger Brands, maker of food and consumer goods, agreed to buy 49
percent of the food business of Nigeria’s UAC, as it ramps up expansion
in fast-growing African markets to offset slack demand at home.

Tiger also said on
Wednesday it had acquired Deli Foods Nigeria, an unlisted biscuit
maker, and had formed a joint venture with Ethiopia’s East African
Group to manufacture and sell personal goods and food. It did not say
how much it paid for any of the transactions.

Tiger, which also
reported a slight decline in full-year profit, becomes the latest South
African firm to make a push into poor but rapidly growing sub-Saharan
frontier markets.

“Africa is a long
way from being developed, but fast-moving consumer goods such as food
will continue to be a staple consumption, and Tiger Brands wants to be
part of the action,” said Zaheer Joosub, an analyst at Citigroup in
Johannesburg.

Home to about 1
billion people, Africa’s population is expected to double by 2050. Many
frontier economies boast growth rates of 7 percent or more, far
outstripping the projected 2 to 3 percent in South Africa, the
continent’s largest economy.

In what may be the
biggest bet on the long-term outlook for the African consumer, U.S.
retailer, Wal-Mart Stores Inc., is in talks to buy a controlling stake
in South Africa’s Massmart, which also has a presence in some frontier
African markets.

Focus on Nigeria

Tiger Brands said Deli Foods and the Ethiopia business would initially add 500 million rand in annual sales.

The UAC deal will
give Tiger a big presence in Nigeria, Africa’s most populous nation and
sub-Saharan Africa’s second-largest economy, while for UAC, which is
struggling to fend off increased competition, the deal with Tiger is
“very positive”, said Akinbamidele Akintola, an analyst at Renaissance
Capital, in a note to clients.

“This strategic partnership might help turn around the operations of the business to regain market (leadership),” he said.

Tiger Brands, which
makes bread, breakfast cereal, and energy drinks, reported headline
earnings per share of 1.39 rand for the year to end-September, compared
with 1.41 rand last year.

Headline EPS is the main profit gauge in South Africa and excludes certain one-time and non-trading items.

Sales from
continuing operations fell 2 percent to 19.3 billion rand, hurt by
lower food prices and the weaker business environment. Tiger said that
while there was a steady increase in sales in recent months, it
remained cautious about the outlook for the first half of the new
financial year.

Shares of the
company were up 0.8 percent at 185.33 rand by 1018 GMT, compared with a
flat Johannesburg All-Share index. Tiger Brands shares have gained 8
percent so far this year, compared with a nearly 12 percent rise in the
benchmark.

Shares of UAC were little changed, outperforming a 0.7 percent dip in Nigeria’s All-Share index.

The Federal
Government is exploring prospects of enlisting the support of the
African Development Bank (ADB) towards the execution of some critical
projects in the country’s power sector.

Olusegun Aganga,
the finance minister, said this on Tuesday, when Donald Kaberuka, the
ADB president, visited him in his office in Abuja.

“We have to take
advantage of the opportunities in the ADB to solve problems facing
African nations. As Africans, we believe that we have to manage our
issues by ourselves through the partnership with ADB,” Mr. Aganga said.

The minister, who
identified the Independent Power Projects (IPPs) as one area that
requires some attention, expressed optimism that the ADB would be able
to join the World Bank in providing the partial risks guarantees to
interest the Independent Power producers.

The finance
ministers and Central Bank governors in five African countries (C-10
Committee) had in its last meeting in Washington to discuss how issues
affecting Africa’s development could be tackled, directed Nigeria,
Egypt, South Africa, and Kenya to get together to explore creative ways
to solve the infrastructural issues affecting the African continent.

The meeting with
the ADB boss, Mr. Aganga explained, was in furtherance of that agenda,
considering the continued supportive disposition of the bank to the
government’s development efforts, particularly with the ongoing reforms
in the country to check the infrastructure deficit in the power sector.

Ineffective institutions

Besides, the
minister said the Primary Mortgage Institutions (PMIs), like Bank of
Industry (BOI), Nigerian Agricultural and Cooperative Banks (NACB),
Nigerian Export-Import (NEXIM) Bank, and National Economic
Reconstruction Fund (NERFUND), which were established to provide
support to government in the execution of it policies, have not been
living up to expectation.

“All these
institutions were set up by government to help execute government
policies in the different sectors of the economy. But, unfortunately,
government is not seeing the benefits of these institutions at the
moment,” he noted, adding that government is working on ways to ensure
that they become more active in providing finance to the real sector of
the economy of the country’s economy.

“We will see a big
difference and change in how government execute works with the PMIs.
The ADB has worked in so many countries to promote this effort by
sharing ideas to empower them to deliver their mandate to the economy.

“Government has
decided to empower all the banks in the country to work closely with
all these institutions towards the empowerment of Small and Medium
Enterprises (SMEs) and the development of the power infrastructure, to
ensure that they are provided with the support they require to execute
government policies the way they should have been done,” he said.

The ADB president
said he was in the country to, among others, explore ways of working
with the Federal Government to handle the assignment handed by the C-10
in Washington, adding that he was of the conviction that Africa will
come out of the global economic crisis stronger, if its resources are
properly managed to the benefit of the people.

“We are here to
interact with the Federal Government on ways to consolidate on the
achievements so far and to accelerate efforts on the development of
infrastructure in the country,” he said.