Nigeria Content Online

Just 24 hours after
gaffe-prone Chief Executive Tony Hayward’s head rolled from the
chopping block, candidates for the auction block hit the headlines, as
BP aims to slim down to recover from the thumping losses racked up in
the 100 days since the start of the environmental disaster.

Sources with direct
knowledge of the matter said BP was in talks with India’s Reliance
Industries and Essar to sell retail assets in Africa with an estimated
price tag of $500 million. Its Indonesian unit rushed to pre-empt
speculation its assets there might be for sale. “In Indonesia, there is
no change to our strategy and plans. Indonesia is an important area for
BP,” The company’s Indonesia president, William Lin, told Reuters.
Investment bankers said the assets BP could sell include its stake in
Alaska’s huge Prudhoe Bay oil field and its interest in Pan American
Energy in Argentina, as well as smaller assets in Vietnam, Pakistan and
Colombia.

Lawsuits

More than 5 million
barrels of oil have spilt into the Gulf of Mexico since the undersea
leak began in late April, according to U.S. government estimates. The
spill, caused by an explosion that killed 11 people, has devastated
communities and fragile ecosystems along the Gulf Coast and killed or
injured countless sea creatures and coastal birds. It has also prompted
a moratorium on deepwater oil drilling. The leak was plugged two weeks
ago, and later on Wednesday BP is scheduled to provide an update on
when it could begin the final procedure to permanently seal the well.
With private lawsuits piling up, attorneys hoping to lead the fight
against BP are heading to Boise, Idaho, as a special panel considers
how to handle the cases.

A group of seven
federal judges is convening on Thursday to consider which court, or
courts, should oversee the hundreds of spill-related civil suits
brought by injured rig workers, fishermen, investors and property
owners. The list of investigations surrounding the spill is also
growing. The Washington Post said several government agencies were
preparing a criminal probe of the action of at least three companies
involved in the spill, citing law enforcement and other sources. The
U.S. Securities and Exchange Commission and Department of Justice have
also launched “informal enquiries” into securities matters related to
the spill.

BP shares down

BP’s London-listed
shares were down 1.7 percent at 399.1 pence at 1:54pm, as investors
digested Tuesday’s news of a second-quarter loss of $17 billion,
including $32 billion in charges related to the oil spill. The company
has lost about 40 percent of its market value since the explosion. “The
critical question remains what BP will look like two years from now,”
analysts at Morgan Stanley said. “Investors will need more clarity on
the impact of asset sales and further reassurances of a cultural change
regarding safety … before BP can regain a multiple in line with its
industry peers.”

Industry executives said it was a good time to sell assets as
relative stability in the oil price in the past nine months makes it
easier for buyers and sellers to agree terms. BP agreed to a $7 billion
sale of oil and gas fields to Apache Corp last week, which valued the
assets at around $19.40 per barrel of oil equivalent. Bob Dudley, who
will replace Hayward as CEO on October 1, on Tuesday called the Gulf
oil spill a “wake-up call” for the entire industry and said safety
would be among his top priorities as the first American to lead BP
tries to patch up the British oil company’s battered reputation. Image
repair wasn’t helped when BP pointed out the cost of the spill would
reduce its taxes, leaving U.S. taxpayers $10 billion worse off.

A month after the
screening exercise to verify the exact number of NITEL workers has been
concluded, no salary has been paid to the workers, they said on Monday.

Some of the NITEL
workers, who spoke in Lagos, said they were made to think that the
screening exercise was carried out by the federal government to help
ease the payment of their 27 months’ salary arrears. A NITEL worker,
who spoke under anonymity said, “We had thought that by now we would
have received some payment of our salaries but right now nothing has
happened. This is so unfair and the worse human treatment to keep
people for over two years and don’t pay them. I have said this before;
the federal government should let us go than keeping us here to
suffer.” The worker added that the only service on NITEL that is
functioning is the South Atlantic (SAT-3) which the government still
gain some certain revenue from.

In his reaction,
Sule Shehu, NITEL spokesperson said, “Nothing has come out from that
exercise; we only carried out the screening exercise to ascertain our
strength and weaknesses. Nothing has been done about the workers up
till now, no salaries have been paid and no news about when government
would pay the workers or not.” “I know that when the NITEL management
was carrying out the screening exercise, a committee from the federal
government was carrying out its own assignment and they were also
looking at the labour restructuring, preparing ground to pay workers
salary and lay off some workers that I know,” added, Mr. Shehu.

Absenteeism at the workplace

Since last year,
only few workers resume for work in NITEL offices across the country as
the staff regularly complain over unpaid salary arrears. Consequently
NITEL management has turned a blind eye to the development as they
understand the difficult situation the workers experience.

“To be honest not
all of us are coming to work, it’s only some workers that are able to
and we don’t frown at those who don’t come to work,” said Mr Shehu.
“But, if there is any emergency and one of the workers needed is not
around we usually send a token to the workers to come and do their
assignment. We can’t be too hard on workers that don’t come to work
because they have not been paid for over 24 months. Right now, there
are very few workers around and we stay till about 4.00pm to 5.00pm
before closing for the day and this is the same situation in all NITEL
offices around the country.”

In December 2009 the federal government had promised to pay off five
months arrears before the end of January 2010. A total sum of N3
billion was taken from NITEL staff pension fund by Olusola Adekanola
& Co, the liquidator of NITEL which was used to pay their salaries
for one month as opposed to five months that was planned for. Some
workers were paid one month salary in December, while junior staff was
paid two months’ salary. The payment process failed as the liquidator
decided in February 2010 to stop all payment because of alleged
harassment by some NITEL workers.

A
transformation of the Nigerian banking landscape is imminent in the
next few months as banks get set to adjust to the review of the
universal banking model unveiled by the Central Bank of Nigeria (CBN)
in March.

The
reforms, for which the Central Bank expects inputs from operators, were
designed as part of its strategic initiatives for reforming the
Nigerian financial system to “enhance the quality of banks, ensure
financial system stability, and promote the evolution of a healthy
financial sector.”

The
guidelines, which were outlined in a circular signed by J. O. Ajewole,
acting director of banking supervision of the CBN, stated that the new
universal banking licence would be issued to institutions to operate
monoline banking and specialised banking operations.

For
the monoline banking, there would be national and regional banks, while
for the specialised banks, institutions would be allowed to operate
non-interest banking, microfinance banking, and primary mortgage
institutions.

Categorisation

National
banks would operate in Nigeria only with a minimum capital of N25
billion, while those with an eye on the international market would need
to muster N100 billion. Regional banks with a minimum capital of N15
billion, will only operate in minimum of five, and maximum of 10
contiguous states, in addition to having the word ‘regional’ in its
name.

Both
categories of banks are to have, as part of capital adequacy, a minimum
qualifying capital to risk weighted assets ratio of 10 percent, with a
single obligor limit of not more than 20 percent of shareholders’ fund.

National
banks will also be permitted to take current, savings and term
deposits, provide finance or credit facilities, deal in foreign
exchange, and act as a settlement bank. Regional banks can also perform
all these functions, except that they cannot act as settlement banks.

So
far, only First Bank, with N337.4 billion minimum capital, UBA with
N336 billion, Diamond Bank, with N104.8 billion, Guaranty, with N195.1
billion, Zenith, with N337.8 billion, and Access, with N185 billion,
have qualified to operate international banking licence based on the
current minimum capital base.

Banks
with foreign affiliation may naturally fit into this category. Stanbic
IBTC, with a shareholders’ fund of N80.5 billion, is part of the
Standard Bank Group of South Africa, while Standard Chartered Nigeria
is part of the Standard Chartered Group based in the United Kingdom.
Ecobank Nigeria will leverage on the strength of its holding company,
Ecobank Transnational Incorporated with headquarters in Togo, while
Citi will also bank on the strength of its parent company based in New
York.

Other players

Only
Wema had so far indicated interest to obtain a regional banking
licence. According to Tunde Olofintila, the head of corporate
communications, the bank, which has had its recapitalisation deadline
extended to 30 September, said it will shrink the size of its
operations to reflect that status. “A few of our branches will have to
go. Maybe 16 or 17 out of 154 branches,” Mr. Olofintila said.

Unity
Bank, the other bank with a similar deadline extension, has said it
will retain its national banking licence. The bank is currently raising
funds from the primary market through a rights issue, while it plans to
get additional funds from the Asset Management Corporation of Nigeria
(AMCON).

Currently, other banks, including the eight rescued banks, have
shareholders fund below the requirements to operate as international
players. The Central Bank said the banks would be given 12 to 15 months
transitional period within which to adopt a new holding structure that
would incorporate the unbundling of the current banking structure. This
will entail the breakup of the activities of banks under the universal
banking regime into distinct and separate financial business lines, for
which specific licences must be obtained.

Zambia’s largest
mine workers’ union said on Wednesday it aimed to block Brazilian firm
Vale’s planned development of a $400 million copper mine because of
concerns about its bad labour relations record.

Mine Workers Union
of Zambia’s President Rayford Mbulu said Vale, which plans to develop
the Konkola North copper project, had been involved in a standoff with
steel workers in Canada for almost a year and should not be allowed in
Zambia.

Vale and the union representing striking workers at its Voisey’s Bay
nickel mine in eastern Canada last week broke off talks aimed at ending
the year-long stoppage, the United Steelworkers said.

South Africa’s
consumer inflation slowed more than expected in June, official data
showed on Wednesday, leaving the door open for another rate cut before
year-end.

Statistics South
Africa said on Wednesday, consumer inflation slowed to 4.2 percent
year-on-year in June from 4.6 percent in May, beating forecasts of 4.5
percent. Inflation slowed for the sixth consecutive month.

The central bank
said although the local economic recovery was continuing, signs pointed
to a less favourable growth outlook in the second quarter, after the
economy exited its first recession since 1992 in Q3 2009.

The rand was
trading at 7.36 against the dollar at 0956 GMT, from 7.3650 before the
data was released at 0930 GMT. The yield on the 2015 government bond
dipped to 7.635 percent from 7.69 percent.

Egypt’s gross
domestic product (GDP) accelerated to an annualised 5.9 percent in the
three months to end-June, indicating the country had rebounded from the
global crisis, a cabinet statement said on Wednesday. Growth for the
entire financial year to end-June rose to 5.3 percent from 4.7 percent
in 2008/09, the statement said.

“This
indicates a near full recovery from the global crisis and a return to
the path of rapid economic growth similar to the period before the
global crisis,” the statement quoted Economic Development Minister
Osman Mohamed Osman as saying. Government officials have forecast that
in the fiscal year that began on July 1 the economy could grow by 5.8
to 6.0 percent.

The nation’s
economy grew by 7.68 percent in the second quarter, the Central Bank of
Nigeria Governor, Sanusi Lamido Sanusi said on Wednesday, up from 6.68
percent the previous quarter. “The economy has maintained a steady
sustainable growth of 7.68 percent, especially in the non-oil sectors
led by agriculture, retail trade, services and construction,” Mr Sanusi
told reporters after a cabinet meeting. The Central Bank forecasts
sub-Saharan Africa’s second biggest economy to grow by 7.53 percent
this year, up from 6.66 percent in 2009. Mr Sanusi gave a bright
outlook for the OPEC member’s economy, with moderate inflation and a
stable foreign exchange market.

“The Nigerian economy remains resilient and the near to medium-term outlook is positive,” he said.

Crude oil exports
are set to top 2 million barrels per day (bpd) for the third month
running in September, trade sources said on Wednesday, as Nigeria
improves output reliability. Nigeria will export an average of 2.10
million bpd of crude oil in September, up slightly from a revised 2.08
million bpd in August, according to data from oil companies and
traders. Nigeria will again far exceed its crude production target
agreed with the Organization of the Petroleum Exporting Countries,
which has been set at 1.67 million bpd, trade sources said.

OPEC
agreed on output curbs in 2008 to support falling oil prices, which
dropped from a high of nearly $150 a barrel in July 2008 to below $33
in December the same year. With U.S. crude oil trading mostly between
$70 and $80 per barrel, OPEC members have said they are happy and that
there is little incentive to adhere to output targets.

The Nigerian naira
strengthened to 150.30 to the dollar on the interbank market on
Wednesday, from 150.41 the previous day, due to weaker-than-expected
demand for the greenback at the official window, traders said.

The Central Bank of
Nigeria sold $190 million at 148.60 at its bi-weekly forex auction on
Wednesday, less than the $200 million offered and compared to $200
million sold at 148.67 on Monday. Dealers said weaker demand and the
inflow of an unspecified amount of dollars from the Nigerian Liquefied
Natural Gas (NLNG) company helped boost the naira. Oil companies
operating in Africa’s top energy-producing nation regularly sell
dollars toward the end of each month to meet their local funding
obligations. Traders said the naira could appreciate slightly before
the end of the week if more energy firms sell dollars as expected.