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Nigeria’s foreign
exchange reserves fell 15 percent to $34.57 billion by October 5,
compared to $40.75 billion at the same time a year earlier, the central
bank said on Thursday.

It said the
reserves have been declining, shedding 7 percent from the middle of
last month to the end of the month, as it tried to defend the local
naira currency.

“The current
external reserves level is still adequate and is expected to remain
robust in view of the favourable outlook for oil prices and output,”
central bank governor, Lamido Sanusi, said at the last monetary policy
meeting.

Forex reserves in
Africa’s top energy producer have been under pressure since last month,
with strong local demand for the U.S. dollar by gasoline and rice
importers, leading to a depreciation of the naira currency.

A finance expert
has said that the fraud allegations, which the Securities and Exchange
Commission (SEC) levelled against some staff of the Nigerian Stock
Exchange (NSE) and its 25 council members, demand more explanations.

Femi Awoyemi, the
chief executive officer of Proshare Nigeria Limited, an investment
advisory firm, said the SEC’s statement raised some salient questions
which should be tackled.

“The press release
raised some salient questions which suggested a rushed response to a
matter one would have otherwise considered under their (SEC) control,”
Mr. Awoyemi said.

He said that one of
the salient questions include the fact that the Exchange Commission
said “the accrued sum of N1.2 billion was distributed to employees and
council members as bonuses and share of surplus respectively in the
current year. It then went on to provide a list, setting forth payments
to 25 members of the Council from 2006 to 2008. But the list showed a
total payment of N1.380 billion, as against the N1.2 billion claimed.”

Meanwhile, Hauwa
Audu, one of the accused council members for the financial years of
2005 to 2008, has questioned both the intent and appropriateness of the
SEC publication.

Mrs. Audu, chief
executive officer of Amyn Investment Limited, a stock broking firm,
said she is “convinced that a line must be drawn between those for whom
the SEC intends to hold accountable for actions considered as
infractions; and those who received monies to aid the performance of
their fiduciary duties as council members.”

Mrs. Audu, in a
statement, posted on Proshare website, said, “I, Hauwa Audu, never
partook in the alleged sharing of surpluses at the NSE. The money given
and received was specific as to the purpose each time – to undertake
global travel to stock exchange events globally in the year to acquaint
myself with developments in the market in order to be able to
contribute effectively as a council member.”

The fraud

The SEC, in a
statement on Wednesday, signed by Lanre Oloyi, head of media, said the
fraud, which was perpetuated between 2006 and 2008, was discovered in
the NSE 2009 audited financial statements.

The statement
explained that the NSE Council recently approved the audited accounts
of the Exchange for 2009, and as mandated by the Investment and
Securities Act, the interim administrator of the NSE, Emmanuel
Ikazoboh, submitted the approved accounts to the SEC, from which the
discovery was made.

The SEC said the
accounts, which were audited by the NSE’s External Auditors, Messrs
Akintola Williams Deloitte, showed that “accrued sum of N1.2 billion
was distributed to employees and council members as bonuses and share
of surplus in the current year.

“This is contrary
to Section 26(3) of Companies and Allied Matters Act, Cap C20 LFN 2004
and section 6 of the Memorandum and Articles of Association of the
Exchange, which stipulated that the income and property of the Exchange
shall be applied solely towards the promotion of the objects of the
Exchange, and no portion thereof shall be paid or transferred directly
or indirectly by way of dividend, bonus or otherwise,” it said.

The statement said that SEC had directed Mr. Ikazoboh to recover all
the shared bonuses from the council members. However, it added that
Aliko Dangote, one of the beneficiaries, had returned N40 million,
being his own share of the distributed surpluses.

The
Central Bank has said that work is going on between regulators and
operators for the smooth running of the Asset Management Company
(AMCON), just as legislative process is progressing too, said Mohammed
Abdullahi, the bank’s spokesperson. This is coming shortly after
confirmation hearing by the Senate for the corporation board members.

Mr.
Abdullahi said that even without the constitution of the board
management of the company, work is going on and a lot have been
achieved in the area of confirming and verifying non performing loans,
discussions on parametres for the non performing loans of the rescued
banks to be taken over or absorbed, and other issues that are crucial
for the initial take off of AMCON.

“Like you are aware, the AMCON bill has been passed by the National
Assembly a couple of months ago and the Central Bank, together with the
federal Ministry of Finance, have worked on the nomination of the
leadership of AMCON, which has been passed to the president, and the
president has passed the nominees to the National Assembly to screen,”
he added.

“The
latest development we got on Tuesday was the screening of the nominees
by the committee set up by the Senate and based on the information
available to us, they have scaled through. So what remains now is for
the committee to submit the report to the Senate and then as soon as
the approval is granted, they could now be sworn-in to take over their
respective offices,” Mr. Abdullahi said.

Experts still hopeful

Experts
said the steady progress of AMCON, a resolution trust vehicle primed to
purchase toxic assets from banks, will provide the basis for any
meaningful merger and acquisition talks and the eventual
re-consolidation of the Nigerian banking sector.

Renaissance
Capital, an investment bank, said the bill will bear heavily on the
outlook of the equity market and the Nigerian economy at large.

“We
believe that a certain level of confidence will be restored in the
Nigerian financial system following this new development,” it said.

As
stated in the AMCON Bill 2010, its objectives are to assist eligible
financial institutions to efficiently dispose of eligible bank assets,
in accordance with provisions of the Act; and obtain the best
achievable financial returns on eligible bank assets or other assets
acquired by it in pursuance of the provisions of the Act.

The
move to create an Asset Management Corporation was imminent, following
shocking revelations by the Central Bank special audit of toxic assets
estimated at over N2.0 trillion in the banks’ books resulting in
startling levels of loan loss provisions on account of stock market
losses, oil trading, and real estate.

In
July, President Goodluck Jonathan signed into law legislation creating
the company. With bad loans off their books, banks are more likely to
resume lending in an economy where credit has been tight since last
year’s bail-out of nine undercapitalised lenders.

The president and
council head of the Chartered Institute of Bankers of Nigeria (CIBN),
Laoye Jaiyeola, has urged the Federal Government to come up with
effective measures to check inflation.

Mr. Jaiyeola told
the News Agency of Nigeria on Thursday, in Abuja, that for the economy
to be strong, inflation must be checked.

“You will recall
that a lot of money has been in circulation, and if you look at the
policy that the CBN has released, it is aimed at controlling inflation.
Our expectation is that even as we have more money being released, our
concern is that manufacturers will start doing business, and so goods
will come,” he said.

He said the measure
would go a long way to reduce inflation in the country, adding that
inflation could be checked if money would be channeled into proper
avenues for development.

A total of 658
farmers in Zamfara State, on Thursday, received N21 million loan under
the National Programme For Food Security (NPFS).

The special adviser
to the governor on Zamfara Agricultural Development Authority (ZARDA),
Yahaya Abubakar, said the beneficiaries were drawn from nine local
government areas.

Mr. Abubakar said
the programme was aimed at enhancing agricultural productivity in the
state and guarantee food security in the country.

He said the state
government had distributed more than 5,000 improved seeds of economic
fruits to increase the income of farmers.

Responding on
behalf of the beneficiaries, Sani Kaura thanked the government for
giving priority attention to agriculture, and promised that they would
use the money for the purpose intended.

Shares in Orascom
Telecom jumped 4 percent on Thursday after Vimpelcom was reported to
have said around $8 billion was a fair price for Orascom Telecom’s
Algerian unit.

“If the Algerian
side voices the readiness to buy Djezzy at a fair price, we’ll be ready
to sell it then,” Vimpelcom CEO, Alexander Izosimov, was reported to
have said by Russia’s ITAR TASS.

A person familiar
with the matter said the comment should be interpreted as Vimpelcom
setting out its initial position for further talks on the matter with
the Algerian government.

“This is a starting point, the two sides only met for the first time this week,” the person said.

The Kenyan shilling
firmed against the dollar on Thursday, backed by inflows from the tea
sector and a weaker U.S. currency on the world markets, while the
Nairobi Stock Exchange’s main share index edged lower.

At the market’s
close at 1300 GMT, commercial banks quoted the shilling at 80.50/60 to
the dollar, compared with Wednesday’s close of 80.60/70. The shilling
traded at the slightly stronger level for most of Thursday, traders
said.

Traders said the shilling got a lift from dollar selling by the farm sector late on Wednesday.