Nigeria Content Online

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.

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.

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.

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.

Mauritius’ offshore
sector countered the global downturn with a 15 percent increase in
revenues in 2009 but the sector’s profit fell slightly, the Financial
Services Commission (FSC) said on Wednesday.

The remote Indian
Ocean island is keen to develop itself as a leading financial hub and
pitches itself as a platform bridging Africa, the Indian sub-continent
and Asia.

“Total turnover of
$158.53 million dollars was generated in 2009 compared to $ 137.75
million in 2008. That is an increase of 15 percent over the previous
year”, the FSC said in a statement.

Global miner Rio
Tinto’s Zimbabwe unit expects to resume diamond exports in a few days
after a government ban on sales in May, the company’s managing director
said on Wednesday.

Zimbabwe banned all diamond exports until stones
from the government’s controversial Marange fields, where it operates
two joint venture mines, were certified by industry regulators. “We
have been in communication with the government and we expect to resume
(exports) in a few days,” Neils Kristensen told Reuters.

The
Central Bank of Nigeria (CBN) has said its intervention in some sectors
of the economy is not going to cost the federal government money since
the funds are fully provided for. This clarification comes amidst
concerns about the legality of the CBN disbursing such huge funds
without legislative approval.

Lamido
Sanusi, the CBN governor said recently that the funds which would be
disbursed through commercial banks would be recovered at the end of the
day. “We are lending to BOI (Bank of Industry) and BOI is lending to
banks and the lending is secured by government security,” said Mr.
Sanusi.

“So
for a power project to benefit from this, the bank has to be convinced
that it is commercially viable and that it can repay the loan. If it is
a bad loan the bank makes the provision. All we do is sell the
government bond and recover our money.”

The
Central Bank is releasing N500 billion to companies in power, aviation,
and manufacturing sectors in its bid to encourage economic growth and
infrastructure development to refinance their loans. On Monday, it also
announced plans to intervene in the agricultural sector with the
signing of agreement with the Alliance for a Green Revolution in Africa
(AGRA) to develop a mechanism for unlocking billions of naira of
financing to serve the needs of all farmers, especially smallholder
farmers, agro-processors, agribusinesses and input suppliers in the
agricultural value chain.

CBN needs to do more

Razia
Khan, Regional Head of Research, Africa at Standard Chartered Bank said
the Central Bank would need to do more in order to encourage banks to
lend their money to the real sector of the economy. Ms. Khan said there
is little prospect of a meaningful rise in credit until the non
performing loans constraining new credit growth have been removed from
banks’ balance sheets. “Given the imminent establishment of an Asset
Management Company to do precisely this, Nigeria may not have to wait
too much longer to see this excess liquidity transformed into
private-sector credit,” she said.

A
treasury manager in one of the banks who spoke on condition of
anonymity said the CBN intervention though laudable, was tantamount to
rewarding companies that have not been prudent in managing their
resources.

“What
you are saying is that those whose assets are performing are being
punished since those who have not managed their funds well now have
access to cheap funds,” he added.

Haphazard approach

He
added that the manner the Central Bank was going about it suggests a
haphazard approach to tackling economic issues. “Initially it was power
alone, then aviation, then manufacturing. It does not suggest that it
is part of a coherent economic policy at the macro level. So the
criticism is that it is adhoc instead of situating it as part of a
broader policy,” he said.

He
however explained that the move was in line with the CBN mandate as
lender of last resort and does not require the consent of the National
Assembly to appropriate such funds.

This
tally with the view of Bamidele Aturu, a lawyer, who said the Central
Bank intervention was akin to rewarding government cronies. “If the
government is serious about stimulating the economy all it has to do is
to create jobs, fix the infrastructure, mechanise and support farming
and farmers and of course fight corruption. No country can develop by
giving free money to a lazy and dissolute class,” Mr. Aturu said.

But analysts at Afrinvest West Africa Limited, an investment banking
firm said the banking industry would benefit from the intervention.
“With specific reference to the CBN/BOI N500 billion infrastructure
fund, our understanding is that the CBN seeks to stimulate credit to
real sectors of the economy while immunizing its balance sheet from
credit risks.”

The value of
equities at the Nigerian Stock Exchange (NSE) which plunged on Monday,
the first day in office of the newly appointed interim administrator of
the NSE, Emmanuel Ikhazobo, further depreciated at the close of
Tuesday’s trading.

The Exchange market
capitalisation closed yesterday at N6.199 trillion after opening the
day at N6.262 trillion, reflecting a one per cent decline or over N63
billion loss. The market also lost over N32 billion on Monday while
about N5 billion was gained last Friday on the announcement of Mr.
Ikhazobo as the new head.

The All-Share
Index, on Tuesday, shed one per cent whic was a loss of 255.11 units
from Monday’s figures of 25,606.09 basis points, to close at 25,350.98.

Mr. Ikhazobo, a
former managing partner of Akintola Williams Deloitte, who rang the
Exchange’s trading bell on Monday, said he’s in the market to foster
restoration of investors’ confidence.

However, Femi
Awoyemi, the chief executive officer of Proshare Nigeria Limited, an
investment advisory firm, said the need for the recent intervention by
the Securities and Exchange Commission should not be confused with the
means by which it was achieved.

“There are a few
missing links which I understand those responsible for the market are
seriously looking at and I understand that those affected have also had
time to reflect on developments and recognise that things needed to
change,” Mr. Awoyemi said.

Gainers and losers

At the close of
Tuesday’s trading, a total of 22 stocks appreciated in value, lower
than the 30 recorded on Monday; while 48 stocks depreciated in value,
higher than the preceding day’s 37.

Julius Berger and
Northern Nigeria Flour Mills topped the price gainers’ table with an
increase of N2.61 and N1.76 on their initial prices of N52.28 and
N35.25 per share. Ashaka Cement and UAC Nigeria followed in the chart
with an increase of 60 kobo each, to close at N20.00 and N44.00 per
share.

On the flip side,
Nigerian Breweries and Benue Cement Company led the price losers’ chart
with a loss of N1.50 and N1.00, from their opening prices of N74.00 and
N65.00 per share. Despite leading among top traded stocks on Tuesday,
Guaranty Trust Bank and Zenith Bank followed in the losers’ chart with
80 kobo and 53 kobo losses, to close at N16 and N13.77 per share.

Financial accounts

At the Exchange’s floor yesterday, Skye Bank and Oando presented their financial accounts to market operators.

Skye Bank Plc’s
unaudited financial result for the second quarter ended 30 June shows a
1.21 per cent increase in gross earning, from N51.334 billion to
N51.953 billion. However, the bank’s profit after tax fell by 32.44 per
cent from N7.531 billion to N5.088 billion and its total net asset for
the period in review appreciated by 8.09 per cent, from N88.086 billion
to N95.210 billion.

In its second
quarter result ended June 30, Oando Plc recorded a turnover of N172.859
billion from N165.036 billion; representing a 4.74 per cent increase.
The profit after tax, however, dipped by 2.43 per cent from N6.737
billion to N6.573 billion, just as net asset for the period went up by
46.24 per cent from N53.520 billion to N78.268 billion.

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.

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.