Nigeria Content Online

A female
entrepreneur in Akwa Ibom, Esther Eka, has said that economic
empowerment of women is indispensable to the country’s poverty
reduction efforts.

Mrs. Eka, who is a
member of the steering committee, International Cooperative Alliance
for Africa and Gender Equality, and president of the Nigeria
Cooperative Women Alliance, made the assertion in an interview with the
News Agency of Nigeria (NAN) in Uyo.

She said that women
were mothers and care givers, hence their empowerment would ensure that
children were well brought up and given proper training, adding that
her organisation had assisted women in Akwa Ibom to form more than 400
producers and consumers cooperative groups.

The Peers Mentoring
Programme (PMP), Nigeria, and Peers Mentoring Programme International,
in collaboration with the NEPAD Business Group, have inaugurated a
development fund, the PMP Promotion and Business Development Fund, to
help informal sector businesses in Nigeria.

Robert Aniebo,
chief executive officer, NEPAD Business Group Nigeria, told the News
Agency of Nigeria (NAN) in Abuja on Sunday that the collaboration would
help to improve the economy.

“This fund will
help to employ and coach at least 1 million mentors to sensitise,
mobilise, and formalise at least 1,000,000 informal sector businesses
in Nigeria,” Mr. Aniebo said.

Financial
experts are of the opinion that the recent tightening of the nation’s
monetary policy rates could worsen the already poor state of private
sector lending, given the persistent liquidity tightening that the
nation has been experiencing since banks started addressing their ‘red’
books last year.

They
said tightening liquidity through the monetary policy rates, in
anticipation of expected inflation due to election spending, is not
going to help private sector lending, which is already contracting due
to increase in government lending. This portends more difficult times
for manufacturers, the private sector, and the average person in the
near and long term.

“The
only component that has grown is credit to government, which has
affected credit to the private sector, because that has contracted over
the months. The way out is to hope that the confidence that seems to
have returned to the markets should stay. If it does, prices would rise
and then markets would rise,” Ayo Teriba, managing director, Economic
Associates, a finance firm, stated last week.

According
to him, the key demand side driver of the economy is interest rates,
especially interest rates on the treasury bills, and Nigeria remains
among the nations with lower interest rates, operating well above
average.

“However,
compared to where we were, liquidity has been tightening in Nigeria and
this could be felt even in the stock market. Even though the stock
market has been faring better, when compared to some other stock
markets, it has been worsening locally,” Mr. Teriba said.

“Figures
obtainable indicate that there is credit crunch, that credit is
tightening, and at the end, you say you want to tighten liquidity,
based on an expected inflation that would be as a result of anticipated
election spending. This is not really appropriate now,” he added.

Akinbamidele
Akintola, a finance analyst at the Renaissance Capital, an investment
bank, expressed hope that the Asset Management Company (AMCON) would
bring a turnaround in banks and help liquidity.

“By
and large, we expect a gradual turnaround in the bank, as the CBN
continues to make concerted efforts to stimulate the recovery of the
financial system by acquiring non-performing loans from the banks and
assisting them in improving their capital and liquidity. So, the AMCON
would definitely help speed up the process of rerating the banks going
forward,” Mr. Akintola said.

Caution in public sector lending

Credit
to the public sector has gradually been increasing, at the expense of
the private sector, experts say. Last year, the Central Bank warned
that commercial banks should follow laid down guidelines for lending to
all the three tiers of government and their agencies.

The
warning, which was contained in a circular by the CBN director of
banking supervision, advised commercial banks to be more cautious in
their lending to the public sector.

The
circular, which stated that “A maximum limit of 10 percent of the total
credit portfolio should be placed on public sector credits both
on-and-off balance sheet,” further reminded banks of the history of
non-performing public sector credits and, therefore, strongly advised
them to exercise caution and avoid the mistakes of the past.

“The
CBN will be constrained to reintroduce measures to curb public sector
loans if banks do not put in place appropriate measures to avoid the
excessive exposure to the sector,” it said.

Earlier
in the year, the Central Bank noted that financing conditions,
especially for businesses and firms, are likely to remain as they are
in the near term as financing institutions continue to maintain a
cautious approach to credit extension.

The
notice, which was drawn at the then special Monetary Policy Committee
(MPC) meeting, noted that the persisting tight credit conditions and
the continuing under-performance of key monetary aggregates, had
informed its earlier decision to embark on a quantitative easing policy
to be implemented through investment in debentures to be issued by the
Bank of Industry (BOI).

Bank
officials have stated that they are still trying to be careful in their
lending, given their recent experiences with margin loans, adding,
however, that while lending is challenging due to liquidity problems,
they are still doing some lending.

Experts
said the ability of the Nigerian banks to grow their loan portfolios
will be limited by their ability to grow their deposit base, which may
be undermined by deteriorating economic fundamentals.

Ivory Coast’s main
cocoa crop is likely to drop 11 percent to 800,000 tonnes in the new
2010/11 season due to black pod disease, the official marketing body of
the world’s top grower said on Friday.

“We expect there
will be a deficit in the main crop of at least 100,000 tonnes compared
with last year,” said Gilbert Ano, president of the country’s cocoa
sector management committee and head of the Coffee and Cocoa Bourse
(BCC), at the official opening of the new cocoa season.

“Last season, we
saw 900,000 tonnes. This year, we expect 800,000 tonnes as a result of
the rains, which provoked an outbreak of black pod disease,” he added.

Morocco, which
plans to invest $9 billion to build five solar power stations, had
opted for solar thermal technology for the first unit, to be set up in
the southern Ourzazate area, its solar energy agency chief said.

The North African
country’s government had previously not revealed which solar technology
it would choose, with officials saying they were open to all types.

“The first stage of
the $9 billion solar project will be achieved to satisfy the needs of
the country’s electricity operator ONE, which required the storage of
power,” Moroccan Agency for Solar Energy (MASEN) chief executive
officer, Mustapha Bakoury, said on Friday.

Egypt’s National
Railways Authority is considering issuing 10 billion Egyptian pounds in
bonds to finance projects over the next 10 years, a newspaper reported
on Sunday, citing unnamed authority sources.

The bonds, which
would fund projects worth 60 billion pounds, would be secured by the
assets of seven companies belonging to the state authority, Al-Mal
newspaper said.

The authority’s Chairman Mohamed Hegazy said by telephone he had no information to confirm or deny the newspaper report.

Egypt changed its laws in December to allow utilities and other
quasi-government organisations to issue bonds directly, a move designed
to expand the country’s debt market.

Update for September

NSE ASI opened the
month of September on a rather poor note; the bear had 16 of the 20
trading days in the month. The market experienced four black weeks of
the five trading weeks within the month. Month to date the market is
down by 1,217.65 points or 5.02% from 24,268.24 to 23,050.29.

Meanwhile, month to
date is up by 2,223.46 points or 10.68%. Recall that it opened the year
at 20,827.13. Market capitalization ends the week at N5.648 trillion.

The market traded a
total of 5.951 trillion shares within the month and the performance was
top by the banking subsector that moved 3.359 trillion shares. Only 22
equities closed above their month-opening prices and they accounted to
1.086 trillion shares or 18.26% of market volume for September.

85 stocks that lost
moved 4.051 trillion units of share; same as 68% of market volume. 94
stocks wrapped up the month activities on a flat note and they traded
813.03 million shares or 13.66% of market volume.

Afromedia led the
percentage gainers with 37.25%, as it closed at N0.70 from N0.51. Vono
Products gained 34.92% and First Alluminum, Nigerian Wire and Cable,
and Berger Paints followed. AIICO top the percentage losers with 37.74%
drop. Spring Bank shed 34.52% and Unity Bank, Custodian Alliance, and
Academy Press followed with 33.96, 33.73, and 30.83 respectively.

Market report for the week ended 30th September, 2010

The market recorded
a turnover of 1.1 billion shares, valued at N10.50 billion in 21,572
transactions within the week. Meanwhile, the stock market operated for
four trading days within the week, as Friday was declared public
holiday to commemorate the Independence Day.

The banking
subsector was the most active as it moved 673.50 million shares in
12,225 transactions. Performance was boosted by volume on the shares of
Stanbic IBTC, Guaranty Trust Bank, Zenith Bank, and First Bank of
Nigeria Plc. The insurance subsector was enhanced by volumes on the
shares of Guaranty Assurance Plc and Intercontinental Wapic, and it
followed on performance chart with 100.30 million shares in 923 deals.

Skye Bank top the
price percentage gainers with 21.61% gain, from N6.20 to N7.54. Afro
Media gained 18.64%, Diamond Bank was third with 17.78%, while
Starcomms Plc, Costain, and Access Bank followed in that order.
Meanwhile, Custodian & Allied tops percentage losers’ chart with
drop of 26.97%, RT.Briscoe lost 24.79%, and Ashaka Cement, UTC,
Guaranty Trust Ass. and AIICO followed in that order.

Ikeja Hotels

The Q4 scorecard
for the year ended December-2009 of Ikeja Hotels was released to the
market on the first trading day of the week. The company reported a
turnover of N7,169 billion, which was 11.08% over the N6,454 billion
reported in 2008. PBT was up by 30.97%, while PAT and Net Asset were up
by 34.32% and 21.16% respectively.

Earnings/ratios/proposed dividend

Estimates from the
released figures show that the EPS improved by 33.33% from 0.42 of the
previous year to 0.56. The said earnings yielded 42.27%. ROE stood at
0.176% while the profit margin was 16.35%. The management has proposed
a dividend of 10k, which will be paid on the 6th of December, 2010,
after the company would have closed its book between 15th-19th
November, 2010. The AGM has been scheduled to hold on 25th November,
2010, while the venue is yet to be announced.

CHAMS Plc, audited year end – December, 2009

The company reveals
its Q4 2009 results to the market yesterday. The figures revealed
dropped on its top and bottom lines, as the TO dropped by 58.81% and
both PBT and PAT closed low at 394.98% and 1,588.43% respectively. The
company could not reward its investors and all its performance indexes
are negative.

Observations

The company needs
to improve; there is need to strategically position and come in with
profitable investments decisions. The result will not attract traders
in both short and medium term.

Adswitch Plc, year ended 30th April, 2010

The audited report
for the above mentioned year was released to the market today. The
released figures revealed an almost double growth in both top and
bottom line. The turnover was up by 75.37% when put side by side with
the comparable period of 2009. PAT gallop by 84.81% to N10.181 million,
from N5.509 million. And it marginally grows its net asset by 12.21%.

The management has
proposed 2k dividend, which when approved, shall be due for payment on
the 29th November, 2010, to investors in the company’s book by 18th
-22nd October, 2010. Other details on the AGM date and venue are as
stated in the table below.

Ratio analysis

EPS doubled from 4k
of the previous year end to 8k this year and it yielded 4.29%, when
compared to the current market price. It currently controls a good
PE/Ratio within the market average. Comparing the TO and PAT, its
profit margin was fair at 6.85%.

Observations

The result is good
and very impressive, despite the current economic situation. We expect
the company to sustain its current market price.

Custodian & Allied Insurance Plc

Payment of Interim
Dividend – The company notified The Exchange that its board of
directors has approved an interim dividend of N0.06 per share. The
closure of register is October 14, 2010, while the payment date is 20th
October, 2010.

Report on the over-the-counter market for FGN bonds

A turnover of 332.8
million units bonds valued at N317,950.53 million in 2,864 deals was
recorded this week, in contrast to a total of 209.3 million units worth
N195,013 million exchanged in 1,875 deals during the week ended
Thursday, September 23, 2010.

Measured by
turnover/volume, the most active bond was the 10.00% FGN July 2030
series, with a traded volume of 97.12 million units valued at N82.7
billion in 799 deals. This was followed by 5.5% FGN February 2013
series with a traded volume of 54.85 million units, worth N51.98
billion in 443 deals.

Eleven (11) of the
available thirty-seven (37) FGN bonds were traded during the week,
compared with fourteen (14) recorded in the preceding week.

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Should we be
concerned that, lately, the stock of the nation’s foreign reserve is
being run down at rates that appear unsustainable even in the
short-term? The apprehension with which the newspapers reported last
week the fact that by Monday, our foreign reserves stood at US$35.66bn,
the lowest level since April 2006, and down from the May 2008 high of
US$62.24bn, seems to suggest that we ought to.

However, before
panic sets in, how do foreign reserves matter to the economy? The
relatively simple nature of our economy, depressed final demand, almost
non-existent local production of anything of value, abysmal levels of
domestic productivity, all these ensure that the quantum of reserves
directly affects the naira’s exchange rate. And in an economy where
everything is “made in China”, a volatile exchange rate could be a
problem indeed.

On the other hand,
our managed exchange rate regime also forces us to include inflation
considerations in the concerns associated with the rate of depletion of
our foreign reserves. Can the Central Bank of Nigeria (CBN) continue to
intervene in support of the national currency, even as its main
ammunition for this is depleted? Or put differently, how soon before we
are called upon to choose between an exchange rate crisis and devaluing
the naira? Most commentators imagine that this scenario would not play
out before the general election is done. Apparently, no central bank
governor would want to act in a way that hands victory to any opponent
of an incumbent president. If after the election, the naira begins to
buy fewer dollars than it was wont to, inflation figures may then trend
up, as the value of our imports rise relative to the value of the naira.

But then, isn’t it
the case that we worry too much. Lamido Sanusi, the central bank
governor, has re-assured to no end, all as might care to attend to him,
that his leadership of the CBN is not minded to devalue the naira.
Besides, apart from the muscle provided by external reserves, within
the context of a managed exchange rate regime, the central bank has a
slew of administrative controls with which it could impose costs on the
demand side of the official foreign exchange market. The tension that
will arise were it to resort to these tools, between appearing to
abandon market-based solutions, and seeming to act in the interest of
the domestic economy, should comfortably be resolved in favour of the
latter. In the end, the fear of the depreciation of the naira in an
import-dependent economy might be overdone. Moreover, the current
levels of the reserves can still support several months of imports.

Thus assured, the
next question is, aside from the sense of the naira’s value as somehow
reflective of the nation’s virility, how harmful is this loss of the
foreign reserve?

We will have to
borrow metaphors here. Recall that it did not matter that the balance
on the excess crude account was run down faster than any of us could
count the cents. Remember also, that nothing happened thereafter. And
although state governors had objected to the sterilisation of
relatively scarce foreign exchange earnings in the “unconstitutional”
excess crude account (at a time of extreme need in their respective
states) salaries are still owed public sector personnel in most states;
and the infrastructure deficit grows dire daily. Inflation,
interestingly, has remained unusually restrained. So once again, we
confront another uniquely Nigerian quandary. Where is the money?
Inflation isn’t up, because the infusion of cash into the economy from
monetising the excess crude account wasn’t expended on anything that
might drive local demand. And the CBN prefers to see a repatriation of
earnings as responsible for the spike in demand for foreign currencies
at the official market, rather than capital flight.

Admitting to the
logic of the central bank, one ought to ask, “how much was earned in
the economy last year?” By whom (it would help the argument if
non-resident economic entities were the most profitable)? And why
should the default response on the part of such economic entities be to
shop all such earnings out, rather than re-invest in an economy healthy
enough to have generated such rich pickings in the first instance?

Strengthened by these perspectives, the economy is clearly immune to economic logic!

The graduation ceremony had a touch of solemnity and nostalgia about it; the special day has come and gone. Your precious child has reached the milestone you set them so many years ago; they listened to you and stayed the course. Perhaps you preached that once they had that foundation of a solid education under their belt they could step out into the world and enter the career of their dreams and start to build their own future. That time has now come and they are set to go out on their own, but there is nowhere to go. Every day young, intelligent, articulate graduates, pound the pavements in search of work. This year’s graduates are probably the most unfortunate in decades in terms of finding work. For many of them and indeed their colleagues who graduated up to two to three years ago, having a degree has not translated, as expected into getting a job. With the increased competition for only a few jobs from last year’s graduates who are still unemployed, the job outlook looks grim for scores of graduates. Are you an unemployed graduate? Do you have a child that faces this predicament? Here are some suggestions that might be useful until things improve.

Network, network, network

Does everyone you know realise that you are looking for a job? Use all the contacts and connections that you have, including your parents, aunts and uncles, family friends and so on. Make sure they know what your skills and talents are, so that they keep you in mind when they hear of any openings. Stay in close touch with professional colleagues and actively seek to expand your network. Use the web to search for job opportunities; through company websites you will be able to send out several applications efficiently, but bear in mind that most great job opportunities are not advertised; they are often filled by personal contacts.

Don’t give up

Having your graduate child return home to unemployment is a depressing experience for any parent, but you must continue to motivate and encourage them to keep searching. Naturally it can be very tedious and disconcerting sending out several applications but don’t

focus solely on your area of study, be flexible and broaden your scope. Searching in related fields boosts your chances of finding something that is relevant and that will still utilise your training and abilities and may even give you new skills. Get tips on how to improve the presentation of your CV to make it flawless and perfectly tailored to the positions you are seeking. What qualities do you have that might make you stand out amongst literally thousands of applications and make you more appealing to a potential employer?

Be flexible

If you are broke and are not one of those that are lucky enough to be housed and fed by your parents or relatives for an indefinite period, you cannot afford to sit at home until you find your dream job. If you regard every other position as demeaning and ‘beneath you’ as you are in fact ‘a graduate,’ you could be in for a long wait. In this highly competitive world in recession, it is important that you are humble and accept the fact that you will have to start at the bottom and work your way up. There may be opportunities working at a restaurant, in a shop, baby sitting and lots of other temporary jobs that can keep you busy and give you some badly needed cash until something more in line with your expectations and credentials turns up. Try to avoid having significant gaps of unemployment in your CV to have to explain in interviews. A future employer will be impressed that you did not just sit at home doing nothing but you kept yourself occupied gaining experience and new skills.

Do you have a special skill or tal-ent?

Be creative and identify that special gift or talent that you might have ignored before now. Do people always comment on your painting, photography or writing skills? Are you good at public speaking or organising, web-design or programming? Can you design clothes or model them? If you can play musical instruments to a decent standard, there may be freelance work as a singer, pianist, organist or violinist in churches, clubs, music lounges or private receptions. There may be opportunities to offer tutorial services in a subject that you excelled in, to students in your area. There are endless options and not only will you be earning, but you will also open yourself to opportunities and contacts that may be of help in your job hunt.

Consider working for free

One good way to get your foot in the door with a company or organisation is to demonstrate to them what you can do. By working as an intern or volunteering, you have an opportunity to impress them by showcasing your skills, commitment, and professionalism. This might make them want to hire you. Do not assume that doing volunteer work will translate into a permanent position with an organisation or you might be disappointed. Even if it doesn’t you would have gained valuable experience. Of course if you have no assistance whatsoever from family or friends, it will be difficult to work for free.

Consider setting your business

What is it that you are passionate about and capable of doing relatively easily and well? When you are young and free of significant financial or personal commitments such as a family, a mortgage and other debt, you have a unique opportunity to take some risk and consider establishing your own business if you are so inclined. Do you have what you consider to be a great idea that you are passionate about and doesn’t have huge start up costs? You may be surprised at what you can accomplish.

Consider the fact that there may be comfort in numbers. Perhaps you could partner with a classmate or a friend whose skills complement your own and set up something together.

Improve yourself

Whilst no learning is wasted, avoid fleeing into an expensive and lengthy graduate programme that may not necessarily give you that added advantage, just to postpone the difficult period. As far as possible, seek continue training and experience
that can directly support your chosen career path. Professional qualifications or certifications, or shorter courses to improve your IT and other skills can sometimes be of greater value at this time. The hard reality is that being a graduate never guaranteed anyone immediate employment. As you await the ‘right’ job, open yourself to various opportunities and experiences. Above all, maintain a sense of optimism and keep your spirits and energy levels up through exercise. Despair
and depression will only make you less attractive to a potential employer. It is that strength of character and self-confidence that will make you stand out and help get you through an employer’s door or the door of your own
small enterprise.

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Seed fund for research

We are now looking at how we can use our coming together as directors of research institutes to solve the problem of decreased funding for the research sector. That is one area which we now articulating a position paper that can be sent to government. Already, some of us have worked during the crafting of Vision 2020 on how to have what is called the National Science and Technology Fund. In the past, we had this fund which is a quick intervention fund that people in science and technology and related areas can draw from.

It can be called the Foundation for Industrial Development, but we believe there is a need to have a mechanism that will enable research institutes to be able to have the kind of funding they require to be able to do the kind of research that can impact on industries. Almost every developed country has it. Its equivalent in the United States is the National Science Foundation. They use funds from that foundation to solve industrial problems. If problems from industries are given to research institutes, they draw money from that foundation. It can also be used for capacity building, for improving on laboratories so you can have centres of excellence for certain area of science and technology.

Minimum of N500 billion required

If you are an entrepreneur and you are interested in setting up a business based on the result of a new research, you can draw from this fund. Usually funds like this are not given as loans because sometimes people ask: ‘why you don’t go to a commercial bank?’ That kind of work is not something that profit will start coming in a year’s time. So it is something like venture capital. In other words, that fund can be taken to set up an industry using research result from Nigerian scientists and before the industry is developed they can be given five years before they need to start paying back the money. In paying back, it should be at no interest so they can stabilize, but once they start making profit they will be like any other company and begin to pay tax.

Government needs to absorb that gestation period of five or 10 years as a development process, because when you have 1000 of such industries established to utilise research outputs, of course they will start employing our school-leavers and that will solve social problems for government. That is what that kind of fund can do for this country so that any area that is a new venture area, a smart entrepreneur can develop with it. That was how all these countries did it and unless we do it in this country, we will continue to go round and round. Unless we energise the emergence of a critical mass of Nigerians who can produce and manufacture things within Nigeria we are not going anywhere.

We had recommended minimum of N500 billion to start this foundation. We are talking of changing the economy and it will cost a lot.

An example

When Peugeot Automobile Nigeria (PAN) was established in Nigeria, the government gave PAN a deadline that after 10 years they must move from completely knocked down parts to actual manufacturing of the parts in Nigeria. PAN was working with their French counterpart at that time. Some scientists were saying that if we give PAN this challenge we must also create an enabling environment within the research communities in Nigeria to be able to create vehicles parts. That didn’t happen here. Although RMRDC gave grants to people to work on auto bodies – that is, doing composites – they came up with a good result of a mixture of metals, plastics and fibre to do auto bodies. They could only make panels, but it showed that it was possible. The challenge we had was who will pick up that and begin to make auto bodies from it. If there was a national science foundation, a businessman can pick up that and begin to do auto bodies.

That didn’t happen, but Peugeot in France was also thinking ahead. We were looking at doing auto bodies within five or ten years in Nigeria, by the time we got to the five or ten year mark, the main manufacturers in France were no longer doing auto bodies with metal. The bodies are now made of fibre-enforced plastics, which is lighter and stronger. If you go to PAN today, they are still bringing in knocked-down parts, but if we had a national science foundation, companies can begin to manufacture even one component of a car using local raw materials. This is important because if you are making it in Nigeria, you can even get orders to supply in plants in Germany. Once you manufacture to standard, you can supply internationally.

Commercialisation will be possible

The other area of focus is on what we have observed in the past. Moving results of research from laboratories to marketplace has been a major challenge in this country. We find a situation where if you go to every research institute you see technologies coming up, research that has been done, gadgets and devices that have been developed are just sitting there. So we want to use this network to see how we can collaborate among ourselves. Working together will enable us to synergise more, work more closely with industries. So our main thrust now is commercialization.

Every year we will target a certain number of research results, whether they are ideas or machines, and apply them directly to industries either to use them to establish new industries or to use those results to solve existing problems in the industries. That means there will more collaboration with organised private-sector groups. So we hope to work more closely with the Manufacturers Association of Nigeria, the Association of Small Scale Industrialists and chambers of commerce.

Need to adjust our models

Moving research results from laboratories to the market place also implies looking at the entire model we had adopted. Today, people stay in their laboratories, imagine problems and attempt to solve them and then begin to look at who will adopt the results. But there are two models of development, when you are talking of manufacturing.

The Technology Push model adopted in even world-class institutions is when a researcher sits and thinks about a problem that doesn’t even exist and comes up with a solution. Because the solution exists, the technology for that solution exists, he begins to market it. Nobody may have thought about that problem before but because people are now seeing a solution, they begin to adopt it as long as that is going to make somebody’s work easier. Before the Wright brothers thought about flying, nobody thought about it. In addition to the Technology Push model, there will also be the Demand Pull model.