Nigeria Content Online

The federal government is committed to applying biotechnology for improved fish production, said Mohammed Abubakar, minister of science and technology, in Abuja last week.

Speaking at an open forum for agricultural biotechnology organised by the National Biotechnology Development Agency (NABDA), Mr. Abubakar said it was worrisome that the country still spends huge sums of money annually on the importation of aquatic products, despite its vast fresh water resources.

“It is unpleasant to note that the United Nations Food and Agricultural Organisation reported that between 1996 and 2001, Nigeria spent a total sum of $11.42 million to buy 25,934 tons of aquatic products.

“In our desire to achieve food sufficiency and alleviate poverty among our people, this state of affairs cannot, therefore, be allowed to continue,” Mr. Abubakar said.

He added that while the contribution of fisheries to the Nigerian economy is significant, the nation’s domestic production, estimated at 0.16 metric tonnes, had fallen far short of the demand of 1.55 million metric tonnes.

Biotech to the rescue

Mr. Abubakar suggested that the application of biotechnology in aquaculture and fishery would improve food security and enhance the income of the farmers.

“It is clear that to achieve the much deserved fish food sufficiency, aquaculture development is the solution. We at the federal ministry of science and technology will ensure that all parastatals and agencies under us deploy all their energies and expertise to lead the light in utilising science and technology to solve the myriads of challenges that confront us as a people,” he said.

Obadiah Ando, minister of water resources, agreed with the minister. Mr. Ando, who was represented by Mike Magaji, his special assistant on technical matters, said that the ministry plans to expand the use of dams in Nigeria to include aquaculture, irrigation, and fisheries.

“The imperatives of food security are compelling us, not only to move away from conventional modes of agricultural production, but also to embrace a deeper appreciation of modern biotechnology,” he said.

Bamidele Solomon, director general of NABDA, said that the issue was of growing importance, as fisheries production is stagnant and many wild fish stocks are declining while the population grows.

“The gap between fish supply and fish demand in Africa will grow dramatically unless we do something about it,” he said.

First Bank, on Monday, posted significant improvement in its unaudited financial result for the third quarter ended September 30, 2010.

The bank, which recorded a loss after tax of N7.992 billion in 2009, posted a profit after tax of N32.562 billion this year, reflecting a 507.43 per cent improvement. First Bank also recorded a 20 per cent growth in its total asset during the quarter, from N2.0 trillion to N2.4 trillion. However, the bank’s gross earnings for the period declined by 10.57 per cent, from N197.988 billion to N177.065 billion.

Balance sheet strength

Commenting on the results, Bisi Onasanya, the Group Managing Director for First Bank, in a statement, said the brand and the strength of the bank’s balance sheet continued to give the bank the flexibility to maximise market opportunities and play a major role in financing key strategic sectors of the economy. “In spite of the tough lending environment, we were able to grow our loan book across different sectors, supported by our robust risk management policies,” he said. “As a result, we are well positioned to increase our market share and profitability in coming periods as we further deploy our balance sheet towards higher yielding assets.”

Other companies

Also, on Monday, nine other companies posted their financial results. Conoil, in its third quarter report, recorded negative turnover of 26.11 per cent and loss after tax of 27.66 per cent.

In its third quarter report, Afribank, one of the rescued banks, recorded negative gross earnings of 50.01 per cent and profit after tax of 103.42 per cent. May & Baker, in its audited report, posted negative turnover of 4.66 per cent and loss after tax of 42.38 per cent.

Market cap hits N8tr

Meanwhile, the market capitalisation of equities at the NSE, on Monday, hits N8.012 trillion following the listing by introduction of 3.72 billion ordinary shares of Multi-Trex Integrated Foods. As a result, the equities’ capitalisation recorded an increase of 0.37 per cent yesterday from last Friday’s figures of N7.982 trillion. The NSE All-Share Index appreciated by 0.23 per cent on Monday to close at 25,102.20 basis points from the previous day’s figures of 25,042.16.

The banking subsector led the market transaction volume for the day with 157.48 million units valued at N1.28 billion, as against the 278.98million units valued at N2.35 billion recorded on Friday. The volume recorded in the sector was driven by transaction in the shares of First Bank, IBTC, Zenith Bank, Access Bank, and Sterling Bank. The total volume of 95.58 million units valued at N952.70 million traded in the shares of the five stocks accounted for 42.38 per cent of the entire market volume.

Google has always
claimed that one of its goals is to ensure the provision of relevant
content to all of its users, regardless of where they are and where
they may come from.

I am the first to
admit that they have done a very good job of mapping Lagos, such that
Google Maps has become a very useful tool. Some of the company’s
critics believe that so much data in the hands of one entity is
dangerous, but for end users faced with certain challenges, that is a
moot point. What we want is for things to be done efficiently. We can
worry about semantics afterwards.

One of the key
challenges that we have in the Nigerian online space is a lack of data
about our part of the world. Searching out “natural wonders of nature
in Nigeria”, as an example, does not give the feeling of a complete
search. Indeed, the fifth top result is actually about the Grand Canyon
in the USA! This void is one that Google aims to fill with a new
product, Baraza.

According to Lola
Masha, Google’s Business Development Manager in Nigeria, Google Baraza
is a Question & Answer solution for English and French users. Its
three key advantages are its structure, the fact that it is powered by
Google’s search engine (I agree that that is a strong advantage), and
that it offers reward points for users.

The word ‘Baraza’
is a Swahili word that is close in meaning to the English word ‘forum.’
Actually, it is an expression for ‘collaborative space’, a place where
people can come to work together and share ideas and information.

At the moment,
Google Baraza is mainly a web-based application, with a strong focus on
desktop users. What must be taken into account, though, is that in
Nigeria, and the African continent as a whole, most new Internet users
are coming on board with the aid of mobile phones.

Ms Masha’s response
to that point was that Baraza already has a mobile platform in the
works, and that those mobile features would be integrated into the
platform shortly. Pressed for a definite timeline, she declined to
answer that, as it is company policy not to tell.

I asked if users of
Google products such as the Android operating system would have some
advantages over users of other platforms. The response disappointed me
a little. Google Baraza is meant to provide a strong focus on user
experience.

As a result of
that, all Google’s products, and not just Baraza, are focused on
efficiency across all platforms so that the user will get the best that
s/he can get, regardless of what platform s/he chooses.

All well and good, but in the meantime, the team at Baraza would do well to answer my question.

The tone of things to come in the banking industry may have been set with the report at the weekend of the emergence of First City Monument Bank (FCMB) as the preferred strategic investor for Finbank.

Finbank, last Friday, sent notice to the Nigerian Stock Exchange that it was in negotiations with a potential strategic investor, but gave no further details.

Kenny Aliu, group head, corporate communications at FCMB, refused to confirm the bid.

“Once there is an official position on this matter, we will make it public. For now, we have nothing to say,” Mr. Aliu said.

Strong bids are also in the pipeline for Bank PHB and Union Bank. The three banks are among the nine banks rescued last year by the Central Bank of Nigeria (CBN), which has canvassed new core investors to acquire the bailed out institutions. The others – Afribank, Oceanic Bank, Spring Bank, and Intercontinental Bank – are expected to announce new investors in the weeks ahead.

Lamido Sanusi, CBN governor, said recently that among institutions that have indicated interest in acquiring the banks are two foreign banks, along with local banks and private equity firms in partnership with foreign banks.

This is coming, however, amid threats by some shareholder groups to challenge the propriety of the Central Bank to negotiate the sale of the banks without due process. Sunny Nwosu, coordinator of one of the shareholders group, said shareholders will fight the acquisition of Finbank by FCMB.

“Let the court decide. There have been advertorials alleging non-transparent and unprofessional bidding process by FCMB. If that is the case, it means the emergence is questionable. It should be subjected to interpretation and court adjudication,” Mr. Nwosu said.

However, Godwin Anono, another shareholder activist, said the takeover by FCMB was the best thing to happen to Finbank.

“I don’t think there is anything unprofessional about the way FCMB went about its bidding,” he said.

Other bids

Access Bank and Fidelity Bank are also bidding for Afribank. Austin Edoja-Peters, Access Bank spokesman, did not confirm his bank’s interest. He, however, said the bank will make bids in line with CBN regulation.

Emma Esinne, Fidelity Bank’s spokesman, affirmed the bank’s bid, saying, “We are interested in the bank in question. At the appropriate time, when it becomes necessary, we will make it open.”

But a source at Bank PHB said the bank has not had any bid from local banks.

“We have only received bids from Habib Bank Pakistan so far,” the source said.

Habib Bank Pakistan was a shareholder in Habib Bank Nigeria, which eventually merged with Platinum Bank to form Bank PHB.

Union Bank has also settled for one bidder, out of about a dozen bidders that indicated interest in acquiring the 93 year old bank.

“We narrowed it down to four and now we have zeroed in on one, and it is not a bank,” said Francis Barde, the bank’s spokesperson.

Asked to confirm speculation that African Capital Alliance, a private equity firm, was the preferred bidder, he declined.

“It will not be ideal to disclose at this stage. Until we conclude all negotiations and agree on the details, we cannot disclose,” Mr. Barde said.

New Generation Telecommunications Consortium, winners of the bid for the Nigerian Telecommunications Limited (NITEL) and its subsidiary, MTEL, has given the assurance that it would pay the $750 million (about N112.5billion) bid security on or before the expiration of the deadline on Wednesday.

The consortium was issued a demand letter last week by the Bureau for Public Enterprises (BPE), to formally inform it of its emergence as the preferred bidder during the bid exercise held last February 16 in Abuja.

The letter, signed by Bolanle Onagoruwa, the director general of the Bureau, indicated that the consortium has 10 calendar days from the date the letter was issued to pay up, in accordance with the provisions of the Requests for Proposal (RFP) issued to all bidders at the inception of the process.

The payment of the bid security is a pre-condition for the issuance of the formal offer letter for the consortium to go ahead to complete the process to acquire the national carrier and its subsidiary.

Chukwuma Nwokoh, BPE spokesman, had, in a statement early last month, conveying the presidential approval to bring the transaction to a close, indicated that, “The balance of the bid amount of $1, 750 million should be paid within 60 days from the date of the issue of an offer letter.”

But, amid heightened anxiety over renewed attempt to end the delay in NITEL sale, which has suffered several failures since 2001, an official of the consortium said over the weekend that initial payment would be made before Thursday, despite the challenges they are facing.

“We are leaving no stone unturned to meet the 10 days deadline set by the Bureau for Public Enterprises (BPE), despite the long time it took the Federal Government to approve the transaction, and in spite of the recent happenings in the global financial market, which have exposed us to a lot of considerable pressure,” Usman Gumi, chief executive of the consortium, said on phone from Abuja.

Long negotiation

Kenneth Ugbechie, the executive secretary, Africa Telecom Development Initiative (ATDI), said yesterday that the expectation of the average Nigerian is for New Generation Consortium to make good its promise to meet the payment deadline.

“The transaction has dragged on for far too long, to the point that it has become an embarrassment to everyone, including the government itself.

“What most people are asking is for government to ensure that the old NITEL workers are paid off, so that the new owners can start on a clean slate; so that tomorrow, nobody can carry placards to the gates of the new owners protesting their unpaid benefits,” Mr. Ugbechie said.

When Fitch Ratings,
one of the world’s better-known Credit Rating Agencies (CRAs), was
reported in the papers last week as having downgraded its outlook on
the Nigerian economy, my initial reaction was “So what?” A negative
credit warning should increase the price of the country’s sovereign
risk. But how to measure this in the absence of a sovereign debt
instrument?

Besides, the credit
rating function is the most damaged franchise to have come out of the
recent global crisis. Indeed, after Greece nearly succumbed to the
market’s panic over the sustainability of its near-term fiscal outlook,
and the deluge of sovereign rating downgrades that followed the
European sovereign debt crisis, the big question has been over the
accuracy of the CRAs’ credit risk assessments.

One of the most
important recent contributions to the debate over the continued
relevance of credit ratings, the IMF’s Global Financial Stability
Report (GFSR) for October 2010, finds the key strength of the CRAs in
their ability to “provide information, monitoring, and certification
services.”

This way, the CRAs
even out the information asymmetries between debt issuers and
investors, provide (through their rating downgrades) continuous
assessments of these securities, and because most countries insist on
credit ratings as part of most financial contracts, they also provide
an assurance function.

Consequently,
countries cannot readily and cheaply “access global capital markets and
attract foreign investment”, if they have not been rated first. Few
investors will touch fixed-income securities that do not have credit
ratings.

And it would seem
that the originate-to-distribute model of bank lending (which replaced
the traditional originate-and-hold variety, and which has been
described as complicit in the underestimation of risk that aggravated
the current financial crisis) could not have happened if the CRAs did
not start lending their imprimaturs to structured products.

Did these functions
also destabilise financial markets? How much of the impact of the
sovereign debt crisis in Europe was because holders of some countries
debt instruments felt pressured by adverse credit rating news in other
countries to demand stricter repayment covenants?

The IMF concludes
that “CRAs do have an impact on the funding costs of issuers and
consequently their actions can be a financial stability issue.”
Accordingly, the GFSR October 2010 recommends, amongst others, for
policy-makers to redouble efforts at reducing “their own reliance on
credit ratings, and wherever possible (removing) or (replacing)
references to ratings in laws and regulations, and in central bank
collateral policies.”

The Fund also
counselled regulators to strengthen their supervision of CRAs if they
had to use the latter’s ratings for their regulations.

Significantly, the
Fund also found that the informational value of sovereign ratings
occurs not through “actual rating changes,” but because of “outlooks”,
“reviews” and “watches”, which show the possible future trajectory “and
timing of future rating actions.”

On this count, the
response of the Nigerian authorities to Fitch’s review was risible.
Splitting hairs over whether this was a rating or an outlook downgrade
doesn’t quite make the grade. The point is that according to the IMF,
“CRAs use a negative ‘outlook’ notification to indicate the potential
for a downgrade within the next two years (one year in the case of
speculative-grade credits)”. And that between June 26, 1989 and March
31, 2010, the 212 negative outlooks published by one of the leading
CRAs were followed by 118 downgrades within an average of six months.

So, the possibility
of a rating downgrade is high, if over the near-term, government fails
to address the public expenditure management framework in a way that
significantly assuages public concerns.

For, it is not only
the rating agencies that are concerned at the rapid decline of the
country’s foreign reserves, even as demand pressure continues to mount
in the foreign exchange markets; or the country’s rising external debt,
in the face of constricting domestic capacity use. Government may be
persuaded of the usefulness of its planned reforms: proposed
establishment of a Sovereign Wealth Fund (SWF); and its intent to
address the infrastructure deficit in the power sector.

The truth, though,
is a wee bit different: in the absence of sustained and identifiable
welfare gains from government’s sundry activities, the electorate does
not care (nor can it subsist) on the ideas (for reform) that reside in
their leaders’ heads.

Angola wants OPEC
to raise the country’s oil output quota, as the southwest African
country depends on its natural resources for “social economic
recovery”, oil minister, Jose Botelho de Vasconcelos, said on Sunday.

Mr. de Vasconcelos,
who is in New Delhi to attend industry conference, Petrotech, said the
country was producing 1.8 million barrels per day, which is more than
its OPEC quota.

He said the country would like OPEC to raise its output quota, as oil significantly contributes to its growth.

Asked if he seeks a higher quota for his country, he said: “We are trying to do that…”

Orascom Telecom
must settle all its liabilities before Algeria will conclude a deal to
nationalise the Egyptian firm’s local mobile phone unit, Algerian Prime
Minister, Ahmed Ouyahia, said on Sunday.

Orascom Telecom has
reluctantly agreed to negotiate terms for the nationalisation of its
Djezzy unit and now wants the deal concluded as quickly as possible,
but the new conditions imposed by Algeria are likely to delay the
process.

Some analysts say
prolonged uncertainty over Djezzy – Orascom Telecom’s biggest source of
revenue – could jeopardise a $6.6 billion deal for Russia’s Vimpelcom
to acquire Orascom assets, creating the world’s fifth-biggest mobile
operator.

Egypt’s Arabiyya
Lel Estithmaraat investment firm said on Sunday it agreed to pay 320
million Egyptian pounds for a majority stake in the historic Omar
Effendi department store chain.

Egypt had sold the
chain to Saudi Arabia’s Anwal for 589.5 million Egyptian pounds in
2006. The sale attracted public attention in Egypt, where the media
have repeatedly accused the state of selling its assets too cheaply.

Arabiyya announced
the deal on Thursday, but had declined to say what it had agreed to pay
for the 85 percent stake. The firm’s shares, which soared 9.6 percent
after the announcement, were trading up 3 percent by 0929 GMT on Sunday.

An Egyptian member
of parliament had asked Egypt’s general prosecutor to stop the sale,
saying the state’s deal with Anwal restricted the resale of the chain’s
assets, Egypt’s state news website egynews.net reported on Sunday.

The Federal
Government has assured the people of Borno State of adequate power
supply to boost economic activities in the state and beyond.

Vice president,
Namadi Sambo, gave the assurance on Saturday when he paid a courtesy
call on the Shehu of Borno, Abubakar Umar, in his palace in Maiduguri.

He said that the government had taken measures to address the problem of power supply in the country.

Mr. Sambo noted
that the five megawatts of electricity being allocated to the state was
grossly inadequate, and said that efforts to extend a 330 KVA
transmission line to the state had reached an advanced stage.