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Performances on the
floor of the Nigerian Stock Exchange (NSE) during the week were mixed,
as the NSE All-Share Index (ASI) had three bullish days and two days
bow to the bear’s call. The bull(s) return during the previous week was
strong and boosted investors’ portfolio to appreciable profit levels.
This in-turn led to short profit taking activities, which saw the
market down between the third and fourth trading day of the week.

In all, NSE ASI
wrapped up the week slightly above the opening point by 3.17% or 721.81
points to close at 23,772.40 points, from 23,050.59. Market
capitalization closed at N5.825 trillion.

Four of the five
sectoral indicators closed the week above their various opening
figures. NSE-Food/Beverages were up by 17.28 points or 2.43% and close
with 735.30. NSE-Banking appreciated by 17.35 points or 5.2%,
NSE-Insurance headed north by 13.63 points or 9.3% at 154.87.

NSE 30 gained 30.54 points or 3.19% to close at 1,007.34, while NSE-Oil/Gas dipped by 4.96 points or 1.51% to close at 154.87.

Activities review

The stock market
recorded a turnover of 2.05 billion shares valued at N18 billion. The
said volume was moved in 28,785 transactions. The banking sector top
volume performance with 1.15 billion shares that were boosted by volume
on the shares of Diamond Bank, Access Bank, Guaranty Trust Bank, First
Bank of Nigeria Plc, and First City Monument Bank Plc. The insurance
subsector followed on the performance chart with 372.43 million shares
traded in 971 transactions.

The 47 stocks that
appreciated traded a total of1.277 billion shares, same as 62.33% of
market volume, 31 equities dipped and they moved 325.58 million units
of shares that accounted for 16% of total volume traded on all equities
through the week. Meanwhile, 123 companies ended the week’s
transactions on a flat note; volume traded by those stocks is
equivalent to 21.78% of the total market volume.

Technical view

R-squared, a
measure of portfolio performance, is currently at an extreme low. This
indicates that there is no strong trend in-tact. This value should
increase soon. When it does, there is likely to be a new short term
trend. The current slope of the close is positive, moving higher,
indicating strength of the medium term uptrend.

The standard error
is 565.237; at this level, there is much higher than normal volatility
around the current trend and traders are probably not in general
agreement, not allowing the indicator to trend easily. The price is
probably not following the regression slope well.

Report on the OTC market for FGN Bonds

A total turnover of
248.9 million units valued at N243.41 billion in 1,940 deals was
transacted last week, in contrast to a total of 332.8 million units
worth N317.95 billion exchanged in 2,864 deals during the week ended
Wednesday, September 29, 2010.

The most active
bond (measured by turnover volume) was the 10.00% FGN July 2030 series,
with a traded volume of 44.9 million units valued at N37.78 billion in
383 deals. This was immediately followed by 10.5% FGN May 2012 series,
with a traded volume of 43.3 million units valued at N46.65 billion in
388 deals.

Seventeen (17) of
the available thirty-six (36) FGN Bonds were traded last week, compared
with eleven (11) recorded a fortnight ago.

Corporate actions reported in the week ended

In the week under
review, the market witnessed avalanche of reported audited results for
belated period ended December 31, 2010. Few were for the periods ended
March 31, 2010 (Neimeth Int’l Plc & Chellarams Plc) and July 31,
2010 (Ellah Lakes Plc).

These results were
released in an effort to beat Nigerian Stock Exchange (NSE) hammer on
quoted companies that are yet to report their audited results for
period ended December 31, 2009. Analysis of few of the results is shown
below, while lead operations figures are reflected in the table below.

NIEMETH INT’L PLC

Neimeth Int’l Plc,
a healthcare company with specialty in production and marketing of
pharmaceutical products released its Q4 results for FY ended March 31,
2010.

Close observation
and computations of figures revealed that the company remained in the
wood. Gross revenue (TO) only managed a fractional growth of 1.2% at
N1.89 billion, against N1.87 billion in comparable period 2009.

On the profit line,
all other indicators returned negative figures. Both PBT and PAT
declined by 71% and 72.3% respectively. This resulted to negative
earnings, meaning the company will recourse to its reserve to finance
its major activities in the current fiscal year (2010/2011). Figures
computed at this instance were: loss per share (LPS) 7 kobo, loss
(profit) margin of 6.67%.

Shareholders’ equity equally lost 11.3% from N1.072 billion, in a similar period 2009.

Observation: This is a poor corporate performance. It has been consolidated for the second time in a row.

Dividend payment will not be considered here. We do not expect price appreciation on this stock in meantime.

STACO INSURANCE PLC

Indemnity covering
company, Staco Insurance Plc, joined league of companies that made
their corporate files available in the market last week. Though this
belated Q4 report saw manageable growth at the top line, it turned
mixed and docile at the bottom line. Turnover recorded improved growth
of 15.6% at N5.06 billion over N4.38 billion posted in similar period
2008.

Profitability
indexes returned lower figures, compared to 2008. PBT dipped by 13.6%
at N538.41 million, so was PAT with 20.1% dip over N546.42 million in
2008. As the bottom lines dipped, computed earnings ratios equally
reflected lower figures. EPS lost 25% of its 10 kobo in FY 2008 at FY
2009’s 8 kobo. This resulted to earning yield of 16%.

PE multiple of 6.25 appears attractive. Return on stakeholder equity (ROE) is 9% while profit margin stood at 8.6%.

Observation:
Performances wise, bottom lines fared poor against FY 2008 figures.
Recall that in FY 2008, the company paid 2 kobo and 1 for 10 bonus
incentive. If at all anything will be paid here, it will be cash
dividend. But the directors have not disclosed anything yet.

The stock looks attractive at its current price, only that the insurance industry remains a skeptic zone for now.

In the four years
to 2003, output growth in Nigeria averaged about 4% (then considered a
significant increase on the 2.8% rate of growth recorded in the 1990s).
Some of this increase came from a more stable environment, as the
economy adjusted to the new democracy. With a parliament looking over
the shoulders of the executive arm of government, most economic units
were at least assured that the policy environment was going to be less
volatile than was the case under the opaque workings of military rule.

Therefore, even in
the absence of new entrepreneurial effort, growth could and did feed
off the new optimism. Still, this was nowhere near the dividends we had
been told would accrue to us from the transition to democratic rule.
The NEEDS document duly argued in 2005, that in order to reduce poverty
in the country, the economy had to grow by “at least 7-8% annually”.

This was before a
rash of reforms by the Obasanjo administration boosted entrepreneurial
activity in certain sectors of the economy. The telecommunications
sector is arguably the poster child of that period. By the time the
Obasanjo administration left office, the NEEDS growth target had been
breached.

But instead of the
new growth levels being driven by inflows of new capital and investment
funds, revenue over-performance (with oil prices nudging new highs)
drove the new output levels.

A democratic
caudillo imposed his will on fractious sub-national governments, and
through the “excess crude account” threatened to address the volatility
that has dogged public expenditure management in the country, since the
economy became addicted to crude oil-based revenues. Unfortunately, the
absence of policy coherence between sub-national political units and
the government at the centre required institutional responses, if the
national plan and budgeting processes were to have any meaning.

It is fair to
assume that at some point, the Obasanjo administration reached its
frontiers as an agent of reform, for even it could not find the
political will to follow through the logic of its new policy choices.
Ought the electorate to hold this failure against that government? Yes;
and no!

Yes, because owing
to the popular nature of the processes by which that government came
into office, even the stars were aligned in its favour. The people were
worn to the bone from the epic effort that was needed to oust the
military. The “forces of reaction” were even worse off. With their
backs to the wall, we awaited with baited breath our new government’s
administration of the coup de grace. This didn’t happen, however,
because the Obasanjo administration was handicapped by a congenital
defect. The selfsame circumstances of its birth were a real and present
constraint.

Thus, we were still
waiting for the telling blow to the interest groups whose choices had
held back the commonweal for decades, when the Yar’Adua government
assumed office. Upside claims for this administration notwithstanding,
it remains something of an enigma. History may yet judge it well, but
it only managed stasis everywhere.

Bereft of a real
change agenda, it was able to maintain growth rates at the 7% level
reached by the Obasanjo administration only by drawing down on the
savings set aside by the latter. The more ravenously it dipped into the
pool of savings, the more aggressively it drove up government
consumption as a share of domestic output; and at the expense of both
private consumption, and investment by businesses in expanding or
building new capacity.

Consequently, we
have had four years of growth without new jobs being created. Nothing
wrong with all of these in a democracy. If nothing else, the four-year
cycle affords the electorate the opportunity to turf out perspectives
that they find incongruent with their needs.

Surprising
therefore, that the stories coming out of the campaign headquarters of
would-be candidates in next year’s presidential elections
unconscionably rehash old platitudes. From IBB, through Nuhu Ribadu, to
Goodluck Jonathan, we hear of projects to return Nigeria to its past
(?) glory.

Nothing, alas, is
said about the particulars of these projects. How much of it would be
because of new funding initiatives in education? How much because we
would be investing in new infrastructure? And how much because we would
change the way government is run?

How would the projects be sequenced? And where will the much-needed funding come from? Not a squeak from anybody!

Nominee Managing Director, Asset Management Company of
Nigeria, ( AMCON) Mustafa Chike Obi, speaks exclusively to NEXT on his
nomination, the sexual harassment allegation against him, and the company he
has been nominated to manage. You can aslo watch the full interview. Excerpts:

How would you compare
Wall Street and the Nigerian capital market?

The Nigerian capital market is a developing capital market.
It is not as fully developed as the United States capital market. But it has
some of the essential ingredients that would make it successful. There are a
lot of intelligent people, a lot of active interested parties and I think that
the regulators have spent some time taking what is best from a lot of capital
market in the world. It is not yet complete but it is young and I think it is
moving in the right direction.

How does it feel
leaving your practice to come back to Nigeria?

I did not come back here to make money. My kids are grown. I
have a consulting firm. In fact, just before I came, I had a contract that
would have paid me $4 million by the end of the year. I started it but I
gave it up. So this is all about doing something to make a difference in the
country. It sounds grandiose people don’t believe that but that is the truth.
There is a sense of guilt that we have over there that other people are
building this country and we are not. It’s there. We may find ways to subdue t
but it’s there. And so when somebody gives you opportunity to serve, you are
happy. My wife asked me if I am sure I want to do this. I told her I have no
choice.

What should Nigerians expect from AMCON which many believe will
salvage the situation at this point?

Let me first make it clear that I don’t have a job as
managing director of AMCON. I am a nominee at this point. The process needs to go
through the Senate for confirmation and nobody especially me is taking the
Senate confirmation for granted. The Senate has a role to play and it must play
it fully. Having said that, my thought as a nominee for AMCON is that AMCON was
necessary. It was necessary because some of the things that happened all over
the word also happened here. The Nigerian banking system was no worse than
anywhere else. The mistakes that were made were made everywhere else including
the United States of America. So I think that we should not spend too much
energy beating ourselves up because of what happened. It happened everywhere
else. So AMCON is necessary because it is useful to put al the non performing
loans in one place and manage them. It creates economies of scale. AMCON is
going to be able to have long term financing which will enable it hold on to
these non performing loans for longer period of time and dispose of them
gradually. So what should Nigerians expect from AMCON. Nigerians should expect
that AMCON will relieve the banks of some of the burdens that they currently
carry. It would encourage them to do what they are supposed to do to give loans
to the real economy and hopefully, through good management, AMCON would be able
to dispose of the assets it acquired at the right time. From my part, I expect
that AMCON would be a world class institutions that Nigerians can be proud of.

In line with your
brief, how do you intend to drive this process considering that you are almost
going to build an institution from scratch?

I don’t know how to answer your question about briefing, but
I will tell you that it is not an institution from scratch. A lot of people
have been working very very hard to make AMCON a reality. Those people are the
Central Bank, the National Assembly, they have spent a lot of time on this
Bill. In my opinion this is a very well crafted Bill. The ministry of finance
has worked hard. The Presidency has been involved, the ministry of justice
ensured that the bill conformed to all the legal requirement of the
constitution. So I think that a lot of work has been done. Nigerians will be
very pleasantly surprised that when AMCON starts to operate, it will move very
quickly to relieve the banks of non performing loans and recapitalise them to
the point when they are fully functioning again.

Some people think
AMCON is taking too long. It is still at the stage of confirmation of nominees
after several months and the economy is heamorrhaging. How fast should
Nigerians begin to expect action?

You asked one question but you have made a statement before
the question. You said AMCON has taken a long time. It depends on your point of
view. This Nigerian AMCON Bill, and I have studied a lot of AMCON; including
America, is in my opinion, the model that takes in all the best features of
what all the other asset management companies that have operated in the past.
It necessarily required study and deliberation. It is taking sometime but I
think that the product is the best product we could have got. It is necessary
in a democracy for every body who is involved to have their say. The banks, the
representatives of the people and the enabling institutions like Central Bank
and ministry of finance. These are busy people. They have other things to do.
So it has taken time to get them all together at the same place. But I will
repeat; once this process is complete, Nigerians will be pleasantly surprised
at how fast AMCON will move. I can’t give any timetable because I cannot
preempt the Senate confirmation process. But once that is done, I think that
within 30 days, we will see definite action.

The central bank has
directed banks to reduce their capital market exposure to 10 per cent. The
question then is what will be left for AMCON to do if the banks have reduced a
huge chunk of the bad loans which is exposure to the stock market

There are several things to this. Central Bank is the
regulatory body for banks. I am not privileged to go through the deliberation
that led to the Central Bank coming up with the 10 per cent. But from my point
of view, it makes sense that banks are primarily focused on lending to the real
economy. That is what banks are supposed to be doing. So if the central bank in
its wisdom decides that 10 per cent is a good number, I will not second guess
that. Your assumption that most of the non performing loans are based on
capital market lending, I can tell you that is not correct. There is
significant amount of non performing loans, more than the majority, that is not
capital market related. So there is still a lot of work for AMCON and the
banks.

One issue of
contention is how these assets are going to be priced. Have you contemplated
the issue of pricing?

Yes. A lot of work has been done on pricing of these assets.
There is a methodology of pricing assets. If you have all the correct
information and all other input, you can price a lot of these assets. One thing
I have heard is people talking about toxic assets. There are no toxic assets in
Nigeria. There are a lot of non performing loans. Toxic assets refer to highly
structured derivative securities that require tremendous pricing
sophistication. We don’t have those here. We have non performing loans with
more or less complete to incomplete documentation.

These loans can be priced and there are various ways of
pricing these loans. I am not going to tell you all the work that has been done
on these loans but I can tell you this; It is going to be a negotiation between
AMCON and the banks. AMCON is there to resolve problems not to create them.
AMCON will give the methodology it wants to use. It will be very transparent,
it will be published. Everybody will understand what AMCON is trying to do. We
will negotiate with the banks and we will come to such agreement. But the pricing
valuation method will be public and be published very quickly after AMCON
starts work.

So what should the
financial market expect about price?

Once AMCON publishes its valuation method, one can have
valid discussion as to which method would be best. Until then, the concept of
AMCON is one of helping, resolving a crisis. There should be no objection to
the AMCON concept. Now we can all discuss various things about its operations
when it starts operating and by law it must publish how it is going to operate.
But until then, I would advise people not to be anxious because the concept is
to provide solution, not to create problems.

Stockbrokers feel
that their interest was not adequately covered by AMCON. How do you address
this?

The Central Bank by law determines eligible institutions and
determines eligible assets. That is the duty of the central bank. AMCON doesn’t
decide who it has to deal with or what assets it has to buy. Central Bank
decides that. So if there is an issue about that, it should be directed at
somewhere else but AMCON, because AMCON is very well defined. AMCON in
consultation with the central bank and the institutions comes up with the price
and everybody is happy. If stockbrokers have a concern, I suggest that
they should wait and see what central bank directs us.

Tell us about your
stint at Kidder Peabody and the circumstances that led to your leaving

It is difficult to talk about my stay at Kidder Peabody
without talking about why I went there in the first place. I will address this
issue and leave it to you to do the research you need to do to validate what I
have said. I left Goldman Sachs where I was a very senior position where I ran
the mortgage trading desk. I was offered a job at Kidder Peabody where I was
promised a tremendous increase in my compensation. I accepted the offer. Within
a very short while, it became clear to Kidder Peabody that they could not pay
me what they had promised. I was called into an office and I was told, “We
cannot pay you this because you would be earning more than the chairman of
General Electric. We are sorry about this. Lets renegotiate.” My response was,
“I left a good situation based on what you promised me. I don’t think there is
anything to renegotiate at all.”

And subsequently, I was accused of sexually harassing an
employee of Kidder Peabody and fired. I filed a law suit against the lady and
Kidder Peabody. Get me clear. I filed a law suit for defamation of character
against both parties. Before the lawsuit could be resolved, I was offered a
very attractive position at Bear Sterns. It was suggested to me that I had to
drop the law suit because they didn’t want a senior member of Bear Stearns
having a lawsuit against another investment bank. After discussing with my
family, I decided to drop the lawsuit. Let me reiterate. Nobody has ever sued
Mustafa Chike Obi for sexual harassment. Nobody. The only suit was filed by me
against my accusers. I will say this again; the financial industry in the
United State is very highly regulated, as in anywhere else in the world.
People who are bad actors tend to be banned in the financial services industry
or given sanctions by the regulatory authorities. There has been no blemish on
my regulatory record. I have never been sanctioned by any regulator and I have
continued to get jobs from serious firms, subsequent to that event and those
firms did all the due diligence they could do and there was never any negative
story associated with my name since the Kidder incidence. I address that
because it is important that people deal with facts and not rumours. And all of
this can be verified by going to the National Association of Securities Dealers
website. You can request for the regulatory record of any individual who is a
registered representative. It is public information and I invite anybody to go
do that and if they have any questions about any records as an investment
banker.

Background checks
revealed that you filed a $10 million suit against the lady in question. So was
it on this basis that you had to withdraw the case?

It was on the basis that I either had to continue with the
lawsuit or continue with my career and my family strongly advised that I
continued with my career. That’s why I dropped the lawsuit.

You seem enthusiastic
to serve the country. What can you say about Nigeria at 50?

I have the privilege of looking at Nigeria from oversea and
I focus a lot on what has happened. There is a long way to go but we have come
a long way as well. Some years ago we couldn’t attract people like the minister
of finance, to name one, the director general of the SEC (Securities and
Exchange Commission) to name another. We couldn’t attract a lot other people
that are back. This country has come a long way and I think that if we focus on
what we have accomplished as a country, we can make the steps necessary to get
to where we want to. I am very optimistic about Nigeria. I am very happy to be
given a chance to serve and I think that this is the place where people of
talent and good intentions can make a big difference and my hope is that I can
make a big difference to Nigeria. I feel sad at being away for so long and
other people have brought it to this point. But better late than never. I hope
I can be able to add my effort.

Tell us about your
work experience in the financial market in Nigeria?

I will give you some background first. My father, Professor
Chike Obi was an academician and my older brother followed in his footsteps. He
had a PhD in physics and was professor in University of Ilorin. I was supposed
to follow in their footsteps but I realised very quickly that my love was for
the finance industry. So I abandoned that path and I came and I worked for
Chase Merchant Bank, one of the three initial merchant banks in this country at
a time when the merchant banking industry was being formed. I worked for two years
in the treasury department.

I rose to become the head of the treasury department. And I
am proud to say that we were the ones who made treasury department become an
important profit centre in banks because at the time it was a vibrant function.
So I spent two years first as an analyst in the treasury department, we were
selling bankers acceptances and commercial papers to pension funds and
insurance companies. Later on the function grew to managing the bank’s
liabilities, making sure the bank’s excess funds are well invested and managed
in such a way that the bank functioned adequately. So it became a profit
centre. I did that for two years and I left to go to Princeton University. So I
did spend two years in Nigeria. Many of my colleagues are now senior members in
that industry and I am still in touch with them. I have been aware of all the
development over the years through my colleagues.

So you think that
sufficiently positions you for this new role?

I think that the AMCON job needs more than experience. I
think it needs thorough understanding of the financial market. It needs an
international exposure. It needs a thorough knowledge of international
financial theory. It needs knowledge of the Nigerian people and Nigerian market
and situation. I think that if it was a one man job, nobody will be qualified
to do it. But luckily, there are other people that are going to be involved
that would bring in other aspects of leadership and skills so that when you
have a team you have a team that can cover all the various aspect. We need
somebody the international market can respect. We need somebody the domestic
market can respect. So we are trying to create a team at AMCON. I wish there
was just one person with all the qualities but it’s difficult to have it.
That’s the idea.

There is renewed
interest by Nigerians in the Diaspora to come back home to contribute their
quota. How do they fit into a system which is different from what you are used
to in the developed economies?

I think that the most important thing in anything you do in
life is passion. It is not skill. I know people who are skillful at things and
they have no passion and don’t get anywhere with it. If you have passion and
love for anything, everything else will come to pass. You will follow it to the
end. What I would tell people who are coming from anywhere, Diaspora or not,
who are given important responsibilities in Nigeria, I will tell them that if they
don’t have the passion and love for what they are about to do, they should not
do it. Because once you have the love and passion for what you are doing, it
doesn’t matter if you don’t have electricity for four hours, it doesn’t matter
if you in traffic jam for four hours. You are consumed with what you want to do
and how you can contribute. For me, I am like a little boy now. I am excited. I
want to do something. I want to make a difference. And do I notice that it is
warmer here than it is in New Jersey. Do I notice that generators are humming
in the background and they don’t in New Jersey? I notice that but they are
background noise. I’ll rather be here than anywhere else in the world.

How did you come
about your name Mustafa

My father Professor Chike Obi was a nationalist. He named my
elder brother Balogun to show that once you are a Nigerian, it doesn’t matter
which name you get. So I got lucky with Mustafa and my brother got lucky with
Balogun. For your information, my wife is Itsekiri, I grew up in Lagos and I
live in the United States. We have been married since 1982 and we have two
children.

It should be fairly obvious that people
who do not have jobs need to be particularly cautious about spending
whatever money they have, yet, surprisingly, many people in this
predicament have difficulty curbing their spending and end up making an
already dire situation even worse.

Maintaining a budget is difficult under
normal circumstances, but the idea of budgeting when you are unemployed
is an even greater challenge. One of the first things you should do to
protect yourself financially at a time like this is to draw up a budget
and try to stick to it.

Do you have an emergency fund?

Hopefully, you have an emergency fund
in place that can support you for at least a few months. Experts have
traditionally recommended a three-month emergency fund but nowadays,
with the length of time it takes to find work, it is prudent if you
can, to look at setting aside between six months to a year of expenses
saved, in the event of job loss.

Even if you are one of those who
managed to build a decent emergency fund, find ways to cut back on
utilities, groceries, entertainment, etc., to make sure it can last as
long as possible. If you do not have any emergency savings, make this a
priority when you get a job so that you are better prepared for any
future financial crisis.

Track your expenses

Gather your bank statements and find
out how much money you have and where it is all going. List your daily,
monthly, weekly, and yearly expenses from your daily newspapers to your
mobile phone bills. Try to do this for a month, writing down as much of
your spending as you can.

This will help you to identify areas
where you can cut back. Involve your spouse if you are married; it is
important that the family is fully aware of the situation and fully
engaged in the plan, but without alarming the younger family members.

Are you in debt?

If you are having difficulty paying
your bills on time or you are in debt, contact your creditors
immediately. It may be possible, if you have had a good track record,
to restructure the loan and they may offer you a modified payment plan
that will reduce your payments to a more manageable level. Don’t wait
until they give up on you and decide to foreclose; you could lose your
car or even worse, your home.

Insurance

If you received health insurance
benefits for you and you family from your former employer’s group
health insurance plan, you will have to find a way to get medical
insurance in place as soon as possible. You cannot afford to be caught
without insurance should you or a family member suddenly falls sick.
Shop around for a policy that will cover at least the basics.

Luxuries versus necessities

Look critically at what you absolutely
must have and what you can do without. It will be quite surprising to
find that there are several items that you do not really need and can
forfeit for at least a while, without altering your lifestyle
significantly.

Here are a few examples of things that many families tend to ignore when they need to cut back on luxuries or non-essentials:

Food and housing should always be
priorities in your essential spending. However, if you are in the habit
of eating out often, you will save some money by eating at home more
regularly. Many of us eat far too much anyway, and losing some calories
might well be one of the advantages you reap from your budgeting
exercise! Whilst there may be ways to cut back, do not jeopardise yours
or your family’s health.

Many people consider cable television
to be a necessary utility and spend quite a lot on subscriptions. This
might be a good time to reconsider and scale back your multichannel
package, considering the fact that you watch less than half a dozen
channels on a regular basis.

As soon as you get a job or your
finances improve, you can re-evaluate those non-essential services and
renew your subscription accordingly. This also applies to other
subscriptions including multiple club memberships and magazine
subscriptions.

Your mobile phone is an essential
expense, but one can carelessly run up outrageous phone bills if you
don’t carefully monitor your usage. Set yourself a spending limit and
try to use it just for essential calls. Likewise, if you have a
generator, limit its usage, as fuel costs can be exorbitant and
unpredictable.

Introducing practical solutions, such
as energy saving bulbs and invertors, and encouraging the family to
turn off the lights when they leave a room should reduce your bills
considerably.

Do you have any other sources of income?

Do you receive any passive income from
dividends or rent from time to time? If so, now is the time to look at
such income critically and see how much it adds up to and when you
actually receive it, so that you can plan accordingly.

Maybe you have enough coming in to explore other options, such as furthering your education, or starting your own business.

Today, a job search can take some time,
with thousands of people out there looking for the same job openings.
Even if you have to take a job that requires minimal skills to keep you
afloat until something more appropriate comes in, remember it is only
temporary; you will still be looking for a job that matches your
background and skill set.

What skills and hobbies can you put to
good use now? Be creative and consider flexible part time, freelance,
or voluntary work to help you get a foot through the door and leave
enough time for your interviews and earning you some money at the same
time.

The hardest thing about budgeting is
sticking to your plan. Even if you fail miserably the first month,
don’t be discouraged. Just make some adjustments and keep trying.
Learning how to budget in trying times can be a blessing in disguise,
as it gives you a clear view of where you are over spending and where
there is excess waste.

Even when you are out of this rough patch and earning again, such
habits will have a lasting impact on your finances and you would have
learned some timeless lessons in money management.

The Nigerian Extractive Industries
Transparency Initiative (NEITI), the promoter of transparency and
accountability in the nation’s extractive industries, said it has taken
steps to reorganise its secretariat to effectively deliver on its
mandate.

The agency came
into the negative limelight recently following reports of an internal
wrangling among some of its top officials, which appeared to have
threatened Nigeria’s quest for validation among the 31 countries that
are due for re-assessment as EITI Compliant countries by the Extractive
Industries Transparency Initiative (EITI) when its validation committee
meets later this month.

The roots of the
wrangling, which earned the chairman National Stakeholders Working
Group (NSWG), Assisi Asobie, a query from the Secretary to the
Government of the Federation (SGF), Mahmud Yayale Ahmed, was traced to
reports of corruption charges against the then executive secretary,
Haruna Sa’eed, and the former director of services, Stan Rerri.

Both were accused
of “abdication of responsibility and ineffectual leadership”, as well
as “inaction” in preparations towards the 2009 Civil Society (CS)
training programme, involving a controversial disbursement of about N15
million to two hotels in Lagos and Kaduna, before it was initially
postponed, and later cancelled.

Mr. Sa’eed, as head
of the secretariat, had denied authorising the disbursement of the
money, while Mr. Rerri, who reportedly colluded with the former
accountant, Sunkanmi Adeoti, and former procurement officer, Tony
Onyekweli, to make the payment without the knowledge of the ES
(Executive Secretary), ignored all entreaties to recover the money and
pay back to the NEITI coffers.

Mr. Asobie, in his
response to the SGF’s query, said the trio have been relieved of their
positions, after the Leke Alder-led ad hoc investigative committee
constituted by the board had recommended “overhaul of the
administration of NEITI Secretariat for efficiency and effectiveness.”

Roots of the crisis

Mr. Asobie also
traced the roots of the crisis to the NSWG resolution two years ago to
engage the services of human resources consultants to examine the
structure of the NEITI Secretariat; evaluate existing staff and their
official positions; develop new terms of reference for all roles within
the secretariat; design suitable managements system that fits the
requirements of NEITI; and construct recruitment guidelines and
recruitment plan for NEITI.

Though Mr. Rerri
reportedly participated actively in the recruitment of the consultants
and supported them till they completed their assignment, he, however,
rejected the recommendation that he be relieved of his position as
director, support services, or show proof of being a chartered
accountant if his wish to be a director would come to pass.

Despite the board’s
acceptance of the consultants’ recommendations, neither Mr. Sa’eed nor
Mr. Rerri took it seriously, with the latter not only continuing to
identify himself with the unofficial designation of “director
(administration/finance)”, but also going ahead to issue a letter
appointing one Garba Saidu Yakawada as ‘head of internal audit.’

Though the board
took exceptions to the disregard to its resolution, and ordered
immediate reversal, Mr. Rerri, in his petition to President Goodluck
Jonathan, alleged massive fraud in NEITI, describing his removal as “an
attempt to “silence the whistle blower.”

But, Mr. Asobie,
who accused Mr. Rerri of allowing “unprincipled bureaucratic politics
to undermine Nigeria’s interest” by mobilising groups to lobby for the
non-validation of the country by the global EITI, said he was only
“opportunistically blowing the whistle as a protective manoeuvre.” He
also said the process to appoint a new executive secretary has
commenced.

Mr. Asobie added
that work is progressing well on the conduct of the 2006-2008 audit
report, while the final report is expected between December and January
next year, while advertisements are out for expression of interest
(EOI) for the fourth oil and gas sector audit and solid minerals sector
audit.

The Central Bank
has come down hard on directors of rescued banks who have insider
related loans, in a renewed crackdown on those that have contributed to
the terrible state of some of the banks.

As part of efforts
to recover the loans, the Central Bank has placed some of the affected
directors on suspension with an ultimatum to repay the loans or face
prosecution.

Specifically, the
regulator on September 27 suspended four non-executive directors of
Finbank for 90 days for failure to pay their debts. They are Ernest
Orji, proprietor of Southern Sun Hotel, Ikoyi; Ezelue Efobi;
Iheanyichukwu Anyadiegwu; and Agnes Ebubedike.

The suspended
directors together owe the bank N20 billion, out of about N25 billion
of insider related loans. Mrs. Ebubedike is also standing trial
alongside Okey Nwosu, the former chief executive officer of the bank;
Danjuma Ocholi; and Dayo Famoroti, both of whom are former directors of
the bank.

The Economic and
Financial Crimes Commission (EFCC) had in 2009 taken them to court on a
90-count charge, bordering on money laundering and granting of reckless
loans, amongst other offences.

Outstanding indebtedness

The CBN gave each
of the directors an ultimatum to repay their outstanding indebtedness
to the bank within that period, failing which, they shall be prosecuted
and blacklisted from holding any position in any bank or financial
institution, under the purview of the CBN.

It had earlier
issued letters of query to the recalcitrant directors, who failed to
heed the warning. This latest action by the bank became inevitable,
since the affected directors did not pay back their loan.

It was gathered
that the CBN may have moved against the affected officials in order to
recover the funds from them before their final exit from the bank. The
Central Bank recently released tenure guidelines, which stipulate that
non executive directors would only serve for two years after which
their terms may be renewed for another two years, but will be subject
to the approval of the apex bank.

A source at Finbank
said the CBN onslaught is also a moral issue as directors who are
indebted to the banks have no justifications to decide on actions
against other debtors.

“It is not proper
that directors who are indebted would now sit at meetings where
decisions are taken against other debtors. This is a corporate
governance issue. It is part of the sanitisation process,” the source
said.

Only Finbank

Mohammed Abdullahi,
the Central Bank spokesperson, said the action was taken against the
directors of Finbank, and not to directors of other rescued banks. He
added that the move against the directors was in fulfillment of the
code of conduct of bank directors, which stipulates that directors
should not have non performing insider related loans.

Sola Oni, the Nigerian Stock Exchange spokesperson, said he was not aware of the development.

Finbank officials refused to comment on this development. They did not respond to enquiries on the issue for nearly a week.

But Susanne Iroche,
its chief executive, told shareholders at a forum in Lagos recently
that the bank is operating with negative capital, as 88 percent of its
loans are currently non performing.

“We have taken
deposits and shareholders fund up to N88 billion, which is yielding
nothing for us but that is costing us money. We can’t continue to
operate like that. We have to resolve this as quickly as possible,” she
said.

Only N2.7 billion
has been recovered from insider related loans, putting the total amount
of non performing loans at N156 billion, while the bank expects to
recover between N10 to N15 billion before year end.