Nigeria Content Online

South Africa’s
manufacturing output rose more than expected on an annual basis in
June, boding well for economic growth and supporting the case for the
central bank to leave rates unchanged at 6.5 percent. Statistics South
Africa said on Wednesday that output rose 8.8 percent year-on-year in
volume terms, up from a revised 8.1 percent increase in May and beating
forecasts for a 6.8 percent rise.

“(The data) reduces the case for an
interest rate cut. It is more in line with our long-term view that the
central bank will keep rates unchanged until about the third quarter of
next year,” said Johannes Khosa, economist at Nedbank.

Bharti
Airtel, a telecom services provider, has announced the appointment of
African professionals to its top management as it moves to entrench its
operations on the continent. The company said it would continue tapping
into the diversity of Africa’s world-class talent pool.

Fayaz King has been
appointed as the Managing Director for Zambia. Mr. King who has been in
charge of the Malawi operation will now be entrusted with the role of
driving the overall business strategy and successful implementation of
market leadership initiatives in Zambia.

Announcing the
appointments, Manoj Kohli, Bharti Airtel chief executive officer, said
the change in leadership was aimed at ensuring that the Zambia
operation which is the number one mobile communications provider in the
country continues to experience further growth.

The statement also
announced the appointment of Saulos Chilima as the Managing Director
for Malawi. Mr. Chilima formerly served as the Sales and Distribution
Director and has been on the Zain Malawi board for the last one year.
Bharti Airtel CEO, said the appointment was in line with Airtel’s
business strategy of developing human capital and empowering the local
operations.

Also going up the
corporate ladder is Michael Okwiri to head the Corporate Communications
docket for Africa. Mr. Okwiri will be responsible for building and
sustaining positive corporate reputation for Airtel Africa. Until his
appointment, Mr. Okwiri was the Corporate Communications Director at
Zain Kenya.

In
order to ensure the success of the federal government’s plan to provide
steady electricity, the Nigerian National Petroleum Corporation, (NNPC)
said it will provide adequate gas supply to power plants.

The Group Managing
Director of the Corporation, Austin Oniwon told the governor of Bayelsa
State, Timipre Sylva who visited him at the NNPC Towers, Abuja that
power is the benchmark of most developed industrial economies in the
world and the NNPC is doing everything to ensure uninterrupted supply
of gas to power plants.

“The NNPC is
determined and committed to the federal government’s Gas to Power
initiative and as the corporation saddled with the responsibility of
managing the country’s hydrocarbon resources, we have resolved to
ensure that the abundant gas resources in the country is channelled
into the power plants ,” Mr Oniwon said.

He added that the
corporation was undergoing rapid transformation in consonance with the
dynamic nature of the oil and gas industry and with the imminent
passage of the Petroleum Industry Bill by the National Assembly, the
corporation was fully prepared to adjust to the new dispensation which
would transform it to a commercially driven national oil company.

He reiterated
NNPC’s commitment to the completion of the Bayelsa Greenfield Refinery
and said that it was already negotiating with a world class company to
establish petrochemical plants in the country.

Mr. Oniwon said the corporation will continue to collaborate with
Bayelsa State government and other state governments to guarantee the
efficient management of the petroleum resources in the country.

There
is palpable excitement in the air for oil players with the expectation
that a new round of oil blocks bids is in the offing. From what
happened in the past, we learn that some of the bidders have always
been mere speculators who would not distinguish the smell of crude oil
from that of groundnut oil, but whose nasal acuity is precisely locked
into the smell of cash. We heard stories of one person sitting on the
board of a number of companies and landing on blocks on all fronts. We
also heard stories of bidders who would not pay the mandatory
application fees, but used their winning to covert and convert public
assets in what is sometimes called privatisation.

Bid rounds in the
past have been the padded beds of rampant corruption. There are
assurances being made that the upcoming round will be transparent and
devoid of corruption. We do not have to doubt those promises in this
piece. The question is whether we need any bid round at all.

The truth is that
we do not need a new bid round. Indeed Nigeria does not need to search
for new oil at all. We have enough going on to satisfy our projected
production as well as revenue dreams. It is an undisputed fact that oil
theft is a major issue in the oil fields of the Niger Delta. It is
rampant. It is entrenched. It pollutes in physical and social
dimensions. It needs to be uprooted. If it is true that as much as is
officially produced daily is also being stolen, then the plans to raise
oil production to five million barrels per day by the year 2015 can be
met by halting the rampaging international crooks in the oil fields.
The first move towards curtailing this robbery is for the government to
equip the Directorate of Petroleum Resources (DPR) with the equipment
and the authority to independently collect crude oil production data at
both the oil wells and the export terminals. The gaping hole between
those two ends of the pipe must be plugged. The second steps in the top
kill will be the immediate commencement of environmental detoxification
of the area. This can be accompanied by provision of infrastructure and
social safety nets. If leakages are sealed in the oil fields, by
halting oil thefts, that would liberate almost as much oil as we
project to produce in 2015. It saves money and contributes to a safer
environment by not expanding the scope for pollutions, gas flares and
further corruption. There are ways we can make up for the one million
barrels deficit going by 2015 projections.

Ecuador’s example

One way could be to
follow the Ecuadorian model where the government has proposed not to
extract $7 billion worth of crude oil in the Yasuni protected area. In
that proposal, the government of Ecuador is ready to sacrifice 50 per
cent of the projected revenue while demanding that the international
community contributes make up the other half. So far, information has
it that the government of a European country has offered to contribute
$50 million per year over 20 years towards this target. The advantage
of saving the Yasuni area from the harmful impacts of oil extraction is
many. They include the preservation of the rich biodiversity of the
area, and the protection of the health and cultural heritage of the
indigenous people who live in the area and do not want oil activities
there.

Leaving crude oil
in the soil is the best form of carbon sequestration. It is better and
surer than the technologies being developed for carbon capture and
storage with the aim of reducing greenhouse gas emissions and thus
combating climate change. Leaving the oil underground does not require
any technology transfer. It only requires an urgent rethink about the
harmful carbon civilisation that is threatening life on planet earth.

The other option,
which we recommend for Nigeria, is to allow Nigerians to buy into the
one million barrels per day deficit. What does this mean? Let Nigerians
pay to keep the one million barrels per day under the ground. It would
require each Nigerian to contribute less than N22, 500 ($150) per year
to achieve the level of income we project to derive from oil exports.
Not all Nigerians can afford that. We must discount for the children
and for the very poor. No doubt. But there are some Nigerians who can
pay for multiple barrels of crude oil to be left in the soil if they
understand that this would help secure the future liveability of our
planet. And the international communities can step in also.

The beauty of
having Nigerians pay to keep the oil in the soil is that we would all
recover the true meaning of collective national wealth. At present,
there is a serious disconnect between national wealth and the peoples’
wealth. We are seen as a rich nation of poor people. One way this has
crept in is through the non-payment of tax by a vast proportion of the
population.

This disconnect has
made it impossible for citizens to demand for accountability by the way
public officers spend public funds. You hardly hear of people
complaining about how “tax payers” money is being spent.

Halting the bid for oil blocks will place a demand for political re
engineering of our productive systems and relationships within the
federation. No more oil blocks. Enough is being extracted already. Stop
the oil thefts. Stem the corruption. We have gone drunk on crude for
too long. Let us get on the productive track. We have had enough of
voodoo economics and wealth without work.

The variance
between statistics given by finance organisations and the Nigerian
Bureau of Statistics is fast causing ripples between the organisation
and analysts.

Finance analysts
say the figures given by the Bureau of statistics do not tally with the
realities of state of the Nigerian economy.

Bismarck Rewane, an
economist and Managing Director, Financial Derivatives Company, an
investment finance firm said, “The Nigerian Bureau of Statistics, NBS
says the economy has grown by 7 per cent in Quarter 1 2010. If we are
going by 7 per cent, there should be some prosperity, everybody should
feel it, but most people we have spoken to are not feeling it. So we
are saying that there is a variance. Petrol consumption was flat;
cheques cleared were flat, so where is the growth coming from? When we
argued this, they said, No and even suggested it was a criminal offence
to disagree with them.”

“Analysts should not be confined to a certain or limited source of data. They should be free.”

The question of the
verification of data issued by the nation’s bureau of statistics came
to light again after analysts questioned and doubted the estimates of a
7.28 per cent growth in Q1, 2010.

“The proxies were divergent and did not validate the growth numbers. Prosperity cannot be disguised” he said.

Victor Ndukauba, an
investment research analyst for Afrinvest West Africa the firm
considers a number of data sources when drawing forecast.

“We have a number
of sources when it comes to getting data that relates to the nation’s
economy. The Nigerian Bureau of Statistics should be at the top of that
list, we get data from the Central Bank, and we try to balance this up
with other sources, the World Bank, and others. The sources of data we
use and place emphasis on usually depend on what issue we are looking
at in particular”.

“When it comes to
GDP, what we tend to do is to sometimes look at the various sources,
sometimes, three sources and then check for a mid-line, an average. I
think the reason why everyone is cautioning the bureau is particularly
about the 7 per cent growth they issued for the first quarter of the
year. The argument is where did the growth come from, given the fact
that banks books shrank especially in the last two quarters last year,
with the credit shrinking challenges?”.

However, he says the NBS figure should not be totally ruled out given the peculiar state of the nation.

“If one was to sit
back, you would see that it’s actually possible the economy did grow by
that much. I think higher oil prices and more stable oil production
might have helped buffer that growth. The argument is that people have
not been affected by the level of the said growth. The economy may be
growing indeed but there’s so much money being spent, especially by the
government and only a select few may feel the impact of such growth,”
he said.

The Bureau’s warning

In a publication
issued recently, the Bureau of statistics warned analysts to note that
the Bureau is the authorised custodian of Nigerian official statistics,
noting “with dismay the behaviour of some senior citizen and
respectable corporate bodies”.

It threatened to
invoke the relevant sections of the enabling law, the Statistics Act of
2007, which empowers it to prosecute anyone who releases data at
variance with official statistics produced by the NBS.

“Is it a crime to
question data? An objection is a request for further information,” Mr
Rewane said while presenting the August edition of Financial
derivatives Company’s Monthly Economic News and Views, adding that
Nigeria in 2010 is not a police state and that analysts can disagree
with published data as the Act does not empower the NBS to prosecute
persons who release data at variance with it.

Meeting expectations?

Mr Rewane added
that empirical evidence of data divergence exists as the EIU, IMF,
World Bank and AFDB have released data at variance with NBS over the
years.

Confirming the
publication warning finance organisations to be cautious of using data
which vary from the one issued by the organisation, Leo Sanni, a
contact officer at the Bureau said. “We are the only body authorised to
issue statistics as regards the country. We have all the statistics
they can need. Any statistics you want, you ask us and we give you” he
said.

The National Bureau of Statistics of Nigeria gets its information
from contributing bodies and organisations such as the National
Planning Commission, Economic and Financial Crimes Commission, Federal
Ministry of Health, National Population Commission, Nigerian Stock
Exchange, Nigerian Embassies and High Commissions, Federal Ministry of
Finance, Central Bank of Nigeria, Nigerian National Petroleum
Corporation, among others.

The
current market performance at the Nigerian Stock Exchange (NSE)
contradicts the projected positive outlook by some finance analysts.

Resource Cap
Limited, a portfolio management firm, in a report in July, forecast
that “performance at the nation’s capital market in the remaining
trading days of the third quarter of 2010 will be positive following
the signing into law of the Asset Management Corporation Bill.” The
company projected that the market All-Share Index, a measuring
parameter, will end the quarter at 30,000 basis points. Some
stockbrokers had also predicted the same trend for the third quarter.
However, since last week intervention by the Securities and Exchange
Commission (SEC), the NSE has recorded over N173 billion losses. At the
close of proceedings on Wednesday, the Exchange market capitalisation
which plunged on Tuesday by N63 billion further depreciated by N78
billion; reflecting a 1.25 per cent decline while it closed at N6.121
trillion from N6.199 trillion.

The All-Share
Index, yesterday, also shed 1.25 per cent or a loss of 318.89 units
from Tuesday’s figures of 25,350.98 basis points, to close at
25,032.09. A total of 23 stocks appreciated in value, higher than the
23 stocks recorded the preceding day; while 45 stocks depreciated in
value, lower than Tuesday’ 48. A stockbroker, who spoke under
anonymity, said the market may experience more downturn because
“investors are now shying away from the market since no one can predict
the outcome of the SEC independent investigators.” “Stockbrokers and
their firms are also cautious because we don’t know who is next to go,”
he said. The SEC, last Thursday, appointed independent investigators,
Aluko & Oyebode, a law firm; and KPMG, an accounting firm, to
investigate the allegations of financial mismanagement at the Exchange.
The jointly independent investigators have since commenced work.

‘Leadership imbroglio’

Commenting on the
current market performance at the close of Wednesday’s trading,
Analysts at Proshare Nigeria Limited, an investment advisory firm,
said, “The leadership imbroglio ravaging the Nigerian Stock Exchange
continues to have severe consequences on the equity performance. This
would be against expectations from some quarters that the assumption of
the Interim Administrator of the NSE will tame the consequential effect
that would follow; that is yet to be seen.” Meanwhile, they said the
downturn recorded on Wednesday could be attributed mainly to heavier
declines recorded in some blue chip and banking stocks. “We hope to see
the expected positive impact of the reported measures aimed at
restoring investors’ confidence in the market being put in place by the
interim management of the NSE, even as the team solicits for
cooperation of market operators for moving the market to stability,”
they said.

Unaudited results

At the Exchange’s
floor yesterday, Intercontinental Bank Plc presented its financial
accounts to market operators. The bank’s unaudited financial result for
the second quarter ended June 30, 2010 shows a 49.49 per cent decline
in turnover, from N85.065 billion to N42.968 billion. Its profit after
tax also fell by 102.07 per cent from (N109.333 billion) to N2.268
billion. Total net asset for the period in review depreciated by 0.71
per cent, from N380.344 billion to N377.628 billion.

President
Goodluck Jonathan has pledged his support to the ongoing effort by the
Securities and Exchange Commission (SEC) to cleanse the Nigerian
capital market. In his posting on Facebook, the social networking site,
he said he will give political cover to the commission in taking any
necessary measure backed by law to cleanse the stock market.

“I also extend that
same promise to all heads of Federal Government agencies and bodies in
charge of maintaining or… enforcing Law and Order be it in the civil
population, the military/paramilitary, anti corruption bodies or the
core civil service,” he said in his Facebook wall posting on Tuesday.
“I want you all to know that there will not be any negative
consequences to you for doing your job in accordance with the laws of
our land.” The comment attracted 1, 049 remarks while 158,587 people
followed the posting.

Social justice

According to the
president, there must be social justice without which there will be no
level playing field for the citizens to operate. “I personally do not
see the justice in sentencing to prison a man who steals because he is
hungry while the man who causes the hunger by misappropriating funds
meant to ease society’s burden is treated with kids gloves,” the
president stated. SEC last week sacked the director general of the
Nigerian Stock exchange, Ndi Okereke-Onyiuke, and president of its
council, Aliko Dangote on grounds of infighting, lack of corporate
governance and alleged fraud and bankruptcy. The commission
subsequently appointed an interim management led by Emmanuel Ikhazoboh,
the immediate past chairman of Akintola Williams Delloite, a firm of
chartered accountants.

The commission DG,
Arunma Oteh, said it has commenced investigations into the activities
of the stock exchange over allegations of financial irregularities in
the exchange. “The allegations purport that the exchange is insolvent
and may soon face bankruptcy and it will not be able to meet its
financial obligations,” she said.

Unethical practices

Also, on Tuesday,
Ms Oteh told the House of Representatives Committee on capital market
that about 260 persons and organizations are to face charges over the
crisis in Nigeria’s capital market, in continuation of its resolve to
purge the sector of unethical practices. She acknowledged the
widespread allegations of increasing insider dealings, share price
manipulations, of weakness in enforcement of excessive risk taking in
the market environment, which informed the plan to possibly bring
charges against those listed.

She said the intervention was to save the fragile capital market
that has already been hit by allegations of various malpractices,
including insider trading and share prices manipulation. “Like you
know, our call and mandate is to protect public interest and to protect
the investor, particularly what I will consider the voiceless masses of
people,” she said.

Afribank Nigeria
Plc has posted a profit before tax (PBT) of N5.52 billion for the
half-year unaudited financial account for the period ended June 2010.
The bank recorded a PBT of N3.52 billion in the second quarter, which
represents a growth of 77 per cent over the N1.99 billion recorded in
the first quarter of the year ended March 31, 2010. Gross earnings also
rose by 86 per cent from N25 billion in the first quarter to N46.56
billion in the half year period.

As part of strategy
to improve profitability, the bank’s management was able to reduce its
administrative overheads to N12.77 billion in the current half-year
from N19.28 billion in the corresponding period in 2009. Also, the
interest expense paid was reduced from N31.51billion in 2009 to
N26.97billion in the half-year ended June 2010.

“We expect that our
performance will continue to improve in the year. We will continue to
remain focused on our guided growth strategy and implement sound
corporate governance practices in all our operations,” the bank said in
a statement.

According to the
bank, the steady improvement in its fundamental performance ratios is
an indication that its growth strategies anchored on the Two-year
Turnaround Plan, is delivering on its promises.

“Our overall aim is
to continue to strategically grow our deposits liabilities, grant
quality loans to our customers in our identified target market; improve
our operations by leveraging on technology and upgrade the skill set of
staff in risk management, banking operations and relationship
management”, the statement added.

There are several factors that people consider in
choosing their next of kin. Here are some responses by Nigerians to the
question “Who is your Next of Kin?”

Florence Dottie A business woman (Married)

“I chose my husband as my next of kin because he
should be the first person to know whatever happens to me. The meaning of next
of kin is someone that can be reached quickly in case of any emergencies or
issues and that person to me is my husband. And he is the closest person to
me.”

Oluwatuyi Oluwole A business man (Single)

“My younger sister is my next of kin. I chose her
because we are very close and I think she is the only person I can trust for
now, as I am not married. All my documents such as my life insurance policy and
bank details have her as my next of kin although she is not aware of this.”

Mrs. Sobo A banker (Married)

“My first son is my next of kin because he is the
heir. If I choose my daughters, they will get married one day and their
husbands could take over all that they have and family property will then end
up in a strange family. I can never choose my husband; that’s how he will go
and marry again and the woman will use all my property to benefit her own
children and neglect mine.”

Chike (Trader)

“I will put my brother. I know him well – we grew
up together. I wouldn’t make my wife my next of kin, though I love her so much.
If I put one of her children, she will influence them. Women can change. It is
better to be safe than sorry.”

Mrs. Danlami (Teacher)

“My daughters are my next of kin. If you notice,
female children always look after their parents in old age. Your daughter will
never abandon you even if she marries and lives far away. Woe, betide you if
your son marries a wicked woman. You are finished.”

Mr. Johnson (Taxi driver)

“Ah! I will put my first son. I expect him to
take care of all the family if I am not there. I can never put my wife – that’s
how she will go and marry and then some other man will be enjoying all my sweat
and blood. Just the thought that she might be enjoying my money with another
man after my death puts me off.

Mrs. Erinle (Lawyer)

“It depends. I can put my husband down but I have
to watch him closely for some years. I will look at how he behaves. If I see
that he is unfaithful, and I can no longer trust him, I will take him off and
put my sister.”

Mr. Iyamabo (Teacher)

I have already put my father – he is very wise
and can only do what is right for me. He will make sure my wife and children do
not suffer.”

Ekaete A trader (married)

“My husband is my next of kin. We love and trust
each other and are building everything together. He was there before any
children came, so whatever affects me will affect him. I am sure he too will
choose me as his next of kin.”

The word ‘Kin” in the traditional sense means
family, which apart from a spouse and children goes on to include the extended
family, parents, siblings, cousins, uncles, aunts, and so on. The term
“Next-of-kin” is rather ambiguous and is usually used to describe a person’s
closest living blood relative. In its broadest sense it indicates the person
who should be notified in case of any eventualities of life such as an
accident, emergency or death. It also has implications as to who would be
legally entitled to a deceased’s property where there is no will.

At some time or the other, you have probably had
to fill a form or some other documentation where you had to clearly state your
next of kin. Many people don’t take this designation seriously and sometimes
even forget whom they designated as time goes by. This is an important issue
particularly where the documentation you are completing relates to money
matters such as investments in stocks, real estate, banking transactions,
insurance transactions and so on.

If you were to die intestate, that is, without
leaving a will, your property won’t simply pass to your spouse as you might
think; strict rules rank your next of kin and your property will be distributed
according to laws of intestacy.

If there is no will, or other credible document
in place, then this is likely to be the order: If you are married, it would be
your spouse. If you are a single parent or are widowed, your children will be
your next of kin. If you are unmarried and without children, your parents will
be legal heirs to your estate; your property will be distributed to siblings
and other close blood relatives, if your parents are deceased.

In Western culture, the choice of the spouse as
next of kin, is the most obvious one as the mother of his children is generally
the person in whom a man places the most trust. It is more common in Nigeria,
however, for a man to choose his brother as next of kin. In the event of your
death making your wife your next of kin will save her and your children a lot
of hardship given our extended family system where other family members often
forcefully claim their brother’s property. There are numerous examples of
widows having to cope with not only the loss of their spouse, but also of all
their personal possessions and property.

Bear in mind that the status of next-of-kin does not in any way imply that
those designated stand to inherit any of the individual’s estate in the event
of their death. It is only by having a valid will in place that you can protect
your immediate family including your wife and children and ensure that your
investments and property do not go into wrong hands after your death.

Beyond some crucial
first steps, the necessity for the regulator to define its message as
narrowly as possible, and keep to the message through the execution
phase, remains a major requirement for the success of the Central Bank
of Nigeria’s (CBN) reform of the financial services sector.

A sense that the
central bank knows what it is about is necessary if the aim is to
restore the markets’ confidence in the financial services sector to
pre-crisis level, at least. And the appropriate market responses are
vital if – the necessary lapses permitting – the bank’s intervention in
the economy is to have the desired result. This requirement is as
important for the task of linking deposit taking institutions’ retail
rates to the policy rate, as it is for reforming the domestic financial
system and returning the banking system to good health.

However, the
extensive deterioration in domestic financial conditions has provided a
poor background against which to judge the CBN’s work. This is of
course not about the central bank’s culpability for the poor state of
the country’s financial services sector. You do not need too much
hindsight to recall that the sector was already in freefall, long
before the CBN discovered its present reforming zeal.

Nonetheless, the
implosion of the market for bank credit has hindered the regulator’s
ability to maintain domestic financial stability. We have seen it worry
about the humongous liquidity in the financial system, only to see its
intervention in support of continued interbank transactions create more
of such liquidity. With any luck, another such panacea, the Asset
Management Corporation (AMCON), in addition to its beneficial effects
on the economy, will exacerbate the financial sector’s current battle
with low-earning funds.

The “credit crunch”
has had other less than helpful effects too: on urban unemployment;
final domestic demand; and national output growth. Until recently, all
of these have had the tendency to divert the CBN from its core task. It
was a relief therefore, when some months back, the rate-setting
committee of the bank made a clear distinction between domestic
responsibility for credit supply (the remit of monetary policy), and
the responsibility for ensuring that the domestic demand for credit
keeps ticking (fiscal policy, and government’s continuing pursuit of
reforms to the economy).

After all is said,
and not much is done, how does all of these sit with the central bank’s
recent claim that it has commenced an 18-month plan to address the
contraction of the credit supply pipeline in the nation’s financial
institutions? According to Kingsley Moghalu, the CBN’s Deputy Governor
in charge of Financial System Stability, the newly discovered process
will help allay investors’ concern over the banks’ credit allocation
process. If it knew of this nostrum all this while, why did the central
bank wait until the credit-creation infrastructure collapsed, before it
bestirred itself? And why wait 18 months before this process yields
results?

There is a certain
noxious, albeit familiar, odour to this new claim by the central bank!
Strange isn’t it, that after having described the process of
stimulating credit demand in the country as the sole preserve of
government, including issues with the domestic cost of doing business,
the CBN should want to turn that logic on its head, by accepting that
it has a magic wand that will allow us witness “significant growth in
credit in the banks” only because the reforms embarked on by it were
“in consultation with the stakeholders and players in the banking
sector”.

We do not need the
Power Holding Company of Nigeria to work again. We do not need
government to resume reforms to the domestic economy, including passing
on some of the service functions that it currently discharges most
inefficiently to the private sector. No! All that matters is that the
CBN has its reform architecture right, and in 18 months time, the
credit taps will open once again. “To who?” would have been such a nice
question to ask Mr Kingsley. And it is a wonder that his audience at
the Financial Institutions Training Centre function where he made these
assertions did not enquire thus.

One other query, how much of the central bank’s newly discovered
competence is a pandering to suggestions from the executive arm of
government, keen to deflect attention away from its competence deficits
in an election year? The 18 months implementation horizon appears very
significant within this context.