Nigeria Content Online

As
the financial industry awaits modalities for the Central Bank’s
decision to help banks in power generation, the move has been described
as unnecessary and off the track of functions of the regulator.

Toyin
Dawodu, managing partner, Capital Investment Group, a United States of
America based investment company, said the Central Bank should instead
focus on its primary function of managing the monetary policies of the
country.

Lamido
Sanusi, the CBN governor said recently that it was working at reducing
the overhead cost of banks by 30 per cent by working towards
establishing an independent power project for power supply to all banks
operating in Lagos as a pilot cluster. All these initiatives, Mr Sanusi
said,

would lead to drastic reduction of overhead costs and ultimately reflect positively on the cost of funds.

Not Central Bank’s responsibility

Mr
Dawodu, however, said it is not the responsibility of the CBN to make
sure commercial banks have power, nor its responsibility to reduce
commercial banks’ overhead.

“That
is between the banks and their shareholders. How does the Central Bank
intend to distribute the power it generates to these banks? The current
road map does not allow for direct private distribution to end users.”

He
added that the new power reform agenda which allows for private
participation in power generation and distribution means that each
company still has to sell to the proposed bulk purchase company and
distribute through one of the independent distributing companies.

“It is not part of the road map to pick out selected private companies by the government to supply them with power,” he said.

He
said sector specific power generation amounts to discrimination as
there are no criteria for determining which sector deserves more power
supply than others.

“We
should be planning to supply power to all Nigerians and all industries.
This is why the government should give incentives to attract private
investors, and if you look at the road map, there is no single
incentive in the roadmap besides tariff liberalization.”

Mr
Dawodu said instead, the Central Bank should be more concerned about
getting power for all of Lagos State, which will be of benefit to the
banks since most of them are located in the state.

Establish participatory system

The
Social and Economic Rights Action Center (SERAC), a non-governmental
organisation for the protection of social and economic rights in
Nigeria, believes that the foundation for sustainable power reform in
Nigeria rests on the establishment of adequate participatory system. In
a concept paper to its forthcoming roundtable, with the theme ‘The
Right to Access Stable Electricity’, scheduled to hold on October 27 in
Lagos, it said there was need to strengthen the accountability
structure in order to create an efficient system for power generation
and distribution.

SERAC
added the shortage of indigenous manpower to deal with the
sophistication involved in modern power production is a clear and
present danger.

“There
is no guarantee that local skills and resources will be available for
installing, managing and sustaining the services planned.”

The
body said growth in the power sector over the years has been stymied by
the absence of platforms that allow for broad-based participation of
the majority of the population in issues affecting electricity
generation. According to the organisation, this “puts a big question
mark on the reform programme’s promise to improve the delivery of
electricity supply, and bolster socio-economic services that advance
wellbeing and quality of life.”

‘Make or break’ factor

Razia
Khan, head of macroeconomic research, Standard Chartered Bank, United
Kingdom, said power supply was the single ‘make or break’ factor
driving growth in Nigeria. “Powerful vested interests have so far
resisted any meaningful change, and with elections on the way, many
observers will want to see evidence that ‘reforms’ go beyond the
near-term opportunity for increased political patronage.”

Nigeria’s cocoa grinding capacity has slumped over 75 percent to
about 25,000 tonnes per annum in the last two years due to falling
demand for processed products from Asia and the West, an industry body
said on Thursday.

The Cocoa Processors
Association of Nigeria (COPAN) said capacity utilisation has dropped
from over 100,000 tonnes since 2008, with only eight factories
partially operational.

The world’s fourth-biggest
cocoa grower had about 18 grinders processing around 230,000 tonnes a
year in 1986 when the sector was deregulated, but the industry has
since fallen on hard times.

Before the global economic
meltdown, the biggest problems cocoa processors in Nigeria faced were
erratic power supply from the national grid and the high cost of
fuelling generators.

“Nigeria’s processing capacity
is now down to about 25,000 tonnes per annum due to a lot of issues,
including the bad global economy,” COPAN secretary Felix Oladunjoye
told Reuters in an interview.

The global credit crisis had
led to a big cut in demand for cocoa products — butter, liquor, powder
and cake — from Western and Asian markets, Oladunjoye said.

He said most European chocolate
makers had changed their buying strategies. Instead of stockpiling
products as in the past, they now prefer to buy raw beans to crush in
their own factories.

“Most factories have now
changed their buying strategies because there is not enough money to
tie down stocks. This is affecting demand for products and also
international orders,” Oladunjoye said.

Lack of EU trade hits sector

The failure of Nigeria to sign
a trade deal with the European Union since 2008 has also all but
crippled local processing, he said.

The EU imposed tariffs on cocoa
products and other exports from Nigeria after Africa’s top oil and gas
producer declined to sign an economic partnership agreement, EPA, by a
Dec 31, 2007 deadline.

This has badly hit the Nigerian
cocoa sector’s ability to compete with regional rivals Ivory Coast,
Ghana and Cameroon, all of whom had signed trade deals with the
European trade bloc to maintain preferential access for their products.

Local processors are losing a
minimum of $400,000 (N60million) monthly or nearly $5 million a year in duty
liabilities, a burden Oladunjoye said was too heavy for COPAN members
to carry.

Nigeria has held fast in its
refusal to sign an EPA, which the EU demanded to make its
long-preferential trade with Africa, Caribbean and Pacific former
colonies compliant with the World Trade Organisation.

Nigeria argued that its fragile
manufacturing industries were simply not ready to compete on a more
equal basis with imported European goods under EPA.

But the Common External Tariff
of the Economic Community of West African States (ECOWAS), which allows
duty-free cross-border movement of goods, seems to have eroded whatever
benefits Nigeria had hoped to derive by rejecting the EPA.

Another factor that has nearly
killed domestic cocoa crushing is the long delays in the payment of the
Export Expansion Grant (EEG) by the government, Oladunjoye said.

The EEG is an export promotion
incentive that seeks to promote local industry by offsetting 30 percent
of production costs on all processed exports.

“The late payment of the EEG is
causing a lot of problems. That of 2008 has just been released, nobody
knows when that of 2009 will come, not to talk of 2010,” Oladunjoye
said.

The COPAN secretary said
because of the numerous challenges confronting the sector, most
Nigerian grinders had turned to the export of raw cocoa beans, which is
more profitable.

REUTERS

Four months ago,
news broke of the deaths of 163 children in Zamfara State, Nigeria.
Interestingly the cause of death, attributed to lead poisoning, was not
ascertained by Nigerian health officials but by an international
humanitarian NGO, Medecins Sans Frontieres (Doctors Without Borders).

Since that
announcement we have received reports of the death toll rising to about
400 kids. This is a tragedy of monumental proportions.

So far the
responses of government have been twofold: a quick announcement
reiterating the banning of illegal mining, and also that the area was
being decontaminated. What has been termed illegal mining is actually a
demonstration of unseriousness on the critical issue of resource
management as well as environmental management and protection. Mining
of any sort is a hazardous activity. This includes legalised oil and
gas exploitation that grimly sends many Nigerians to untimely graves
through pollutions and through violence. This suggests that the issue
is more fundamental that the legality or otherwise of the activities.

We are also
concerned about claims relating to the decontamination of the
environment of the polluted communities. The sort of reported casual
announcements give a sense of false security to the hapless local
people and also a false impression suggesting the existence of
acceptable government action. With years of unregulated artisanal
mining in Zamfara State and other mineral rich areas, there is an
urgent need for relevant government agencies to conduct serious
environmental investigations with a view to mitigating the impacts.
Outlawing artisanal mining without provision of employment to the army
of the unemployed will neither stop the activity nor detoxify the
environment.

The tragic
decimation of the children of Dareta Village in Anka LGA and Yar Garma
in Bukkuyum LGA must be treated with the seriousness it deserves and
steps taken to halt it. It should also be understood that simply
closing down artisanal mines does not mean that the environment is not
longer toxic. In fact, the impacts being noticed now could have
resulted from historical lead poisonings in the area. This also
suggests that disaster possibly lurks in those poor and neglected
communities.

Some community
people do not even believe that the deaths are results of lead
poisoning or any other fall out of mining activities. Muazu Marafa, a
community spokesperson at Yar Garma, for instance, told environmental
monitors in June that they do not belief that lead used in the mining
process was responsible for deaths in the community because they had
been using it for over many decades. In a nation where post mortems are
rare and where people are content to say that their relatives died
after a brief illness, we see that much work needs to be done to
realign attitudes to the realities of available modern knowledge.

Where are the regulatory agencies?

Besides struggling
with the National Agency for Food and Drug Administration and Control
(NAFDAC) over who has oversight over what territories, it is essential
for the Standard Organisation to take a serious look at an existing
threat to public health from further lead poisoning in Nigeria. For
one, many countries have phased out leaded petrol and in Nigeria the
toxic product is the norm. This means that apart from the visible smoke
bellowing from the ancient automobiles on our streets, people are
inhaling invisible toxins from even the clean exhaust pipes.

Another sore area
that needs the focus of the SON is the unacceptably high level of lead
in the paints manufactured, sold and used in Nigeria. A recent study by
some non-governmental organisations revealed that Nigerian paints
contain levels of lead several times above acceptable limits set by the
World Health Organisation and that they rank among the highest levels
of lead in paints in the world. The paints tested in the exercise
include samples from the biggest multinational paint manufactures in
Nigeria. What this means is that the threat of lead poisoning is
everywhere in Nigeria, on the streets, in our schools, homes,
hospitals, everywhere. We have heard of the death of over 400 children
in Zamfara State. It is known that lead can absorbed by ingestion,
inhalation, and via the skin. Its impacts range from minor irritations
and fatigue to others such as gastrointestinal disturbances,
neuromuscular dysfunction, personality changes, cerebral oedema, renal
failure, and gout.

How many more kids are on the throes of death? How many more are
still being poisoned even today? How about the adults who are more
resistant to the poison and so remain alive but have their mental
capacities severely compromised? Decontamination of the polluted
communities requires more than simply closing the mine pits and carting
away top soils from obviously impacted areas. There is urgent need for
deeper examination of even the soil strata to ascertain the reach of
the elements. The fact that water ponds on which the local people
depend are also impacted means an urgent need for safe water supply.
Shallow wells will simply spread the deaths further. The communities of
Zamfara State require proper pipe borne water supply as life saving
measures that go beyond political party logos painted on crumbling
walls of community huts. Indeed, with the level of pollution and the
deaths recorded and still expected, it would not be a radical idea to
relocate the communities to safer locations. No effort should be spared
in tackling the lead menace and save the lives of the kids of Zamfara
State.

The value of
equities at the Nigerian Stock Exchange (NSE) improved marginally
yesterday as 0.03 per cent recovery was made on the market measuring
indices.

The NSE market capitalisation closed at N5.988 trillion from Tuesday’s figures of N5.986 trillion, reflecting N2 billion gains.

The market had gained N55 billion or 0.93 per cent on Tuesday.

The All-Share Index also gained 0.03 per cent or 9.17 units yesterday, up from 24,430.20 basis points to close at 24,439.37.

The NSE sectoral
indexes recorded mixed sentiments as the NSE-30 Index, which basically
measures the performance of blue chips in the market, dropped by 0.71
per cent. The Food/Beverages subsector gained the highest points by
1.80 per cent; the Insurance gained 1.57 per cent, followed by the
banking sector which reclined by 0.64 per cent while the Oil/Gas
subsector closed flat.

David Adonri, chief
executive officer of Lambert Trust and Securities Company Limited, a
stock broking firm, said the market performance has been “improving
because some investors are beginning to return to the banking sector”
which usually drives market activities.

Mr Adonri said
investors’ confidence in the sector “is not unconnected with the recent
victory the Central Bank had over Oceanic bank.”

Low volume, high value

At the close of
yesterday’s trading, a total of 268.36 million shares valued at N2.654
billion were traded in 5,903 deals as against the 274.82 million shares
worth N2.508 billion exchanged in 5,716 deals on Tuesday.

The banking
subsector maintained its lead on the most active subsector chart
yesterday with 198.59 million shares worth N1.65 billion traded. The
shares of Access, United Bank of Africa,

Diamond, First Bank, and Guaranty Trust were the most active in the subsector in terms of volume.

The Insurance
subsector followed, trading 17.12 million shares valued at N18.44
million. Transactions in the subsector were largely driven by the
shares of Continental Reinsurance which accounted for 60 per cent of
the subsector’s volume.

The Food/Beverages subsector came third with investors trading 10.21 million shares valued at N249.60 million.

Investors in Dangote Flourmill and Cadbury enhanced activities in the subsectors in terms of volume.

More gainers The
prices of 32 equities appreciated in value on Wednesday while 24
depreciated. Nestle led the price gainers, appreciating by N17.95 to
close at N377.05 per share. Cadbury gained N1.43 to close at N30.32 per
share while African Petroleum grew by N1.26 to close at N26.53.

UACN topped the
price losers’ chart, depreciating by N2.58 to close at N75.55 per
share. Conoil shed N1.96 to close at N37.39 per share while Nigerian
Bottling Company lost 99 kobo to close at N34.01 per share.

Meanwhile, Custodian and Allied Insurance yesterday notified the
Exchange that the closure date for the payment of its interim dividend
of six kobo is October 14, while the payment of the dividend will
commence on October 20.

Port operator APM Terminals, a unit of Danish shipping and oil group A.P.

Moller-Maersk, said on Wednesday it had signed a 25-year concession agreement to run the Port of Monrovia in Liberia.

APM Terminals was named the preferred bidder for the port management and modernisation project last March, it said.

“The now formalised agreement for the port’s privatisation will
result in the investment of $120 million in the facility over the
course of the contract term,” APM Terminals said in a statement.

Barclays Bank of
Kenya has entered a partnership with telecoms firm Safaricom offering
its mobile phone-based money transfer service M-Pesa to the bank’s
clients, both firms said on Wednesday.

M-Pesa is the main
way of transferring small cash amounts in Kenya, mainly because it does
not require users to have a bank account. Millions of people in east
Africa’s largest economy do not have access to banking services and the
deal is seen as a way of addressing this.

“This partnership is in tandem with our strategy of stretching
M-Pesa’s footprint beyond the regular agent outlet,” said Safaricom
Chief Executive Officer, Michael Joseph.

Ghana’s inflation
eased for the 15th month in a row in September, data showed on
Wednesday, but analysts put much of the latest fall down to seasonal
effects and were cautious on prospects of fresh interest rate cuts.

Annual inflation
fell to 9.38 percent from 9.44 per cent in August, extending a run that
has seen consumer price growth more than halve from its June 2009 level
and confounding market expectations of a slight rise.

But, weeks before
the scheduled start of oil from Ghana’s Jubilee offshore oilfield and
with concerns growing over the West African country’s public finances,
future price pressures were hard to call.

“It is difficult to
forecast inflation for the next month — all depends on how the
government handles the pressures,” government statistician Grace
Bediako said of moves to implement a new public sector wage structure
seen as raising spending.