Archive for nigeriang

Giving it up for Bankole

Giving it up for Bankole

Conceding defeat in an election is a
rare thing in our politics, especially when the loser is an incumbent
candidate. It, therefore, came as a pleasant surprise to many observers
when the speaker of the House of Representatives, Dimeji Bankole,
openly acknowledged his failure to get a return ticket to the House as
a reflection of the wishes of his people. Shortly after, Segun Williams
of the Action Congress of Nigeria, was declared the winner of the
Abeokuta South Federal Constituency seat in Ogun State. Mr Bankole
congratulated his opponent and said the ability of the people to elect
the leader of their choice is “a good omen in our national quest to
entrench democracy in our nation.” This prompted one publication to
describe the Speaker’s action as “unprecedented and the unthinkable.”

In more stable democracies, Mr
Bankole’s acceptance of the people’s verdict would not have earned so
much space in the news nor would it have been the subject of an
editorial. But in a country where it is almost impossible for those who
hold power to accept they are no longer popular, the Speaker’s action
has drawn significant attention.

We appreciate Mr Bankole’s courage in a
country where so-called elder statesmen, including one from his state,
have engaged in a battle over who laughs the most at losing opponents.
We praise him for not claiming victory, even though it was a close
race, in a country where candidates who clearly lost elections insist
they won.

Also, we commend the Speaker for not
unnecessarily causing tension in the already volatile Ogun State. We
acknowledge that his peers elsewhere would have acted differently under
the circumstances. Take for instance the governor of Kwara State,
Bukola Saraki, who went on social networking sites Facebook and Twitter
to announce victory for the PDP in three senatorial districts and five
federal constituencies of the state barely five hours after voting was
completed, and while citizen reports were showing an early lead for the
ACN. Of course, Mr Saraki’s arrogance angered many observers. By the
time he realised the folly of claiming victory when no official
announcements had been made and pulled down the posts, the damage had
been done. Protests have since erupted in his state with the opposition
claiming the parliamentary election was rigged.

After hurrying to announce himself
victor, it is hard to think that Mr Saraki would have accepted defeat
like Mr Bankole had he not been declared senator-elect by the electoral
body.

It is characteristic of our
politicians, whether in opposition or ruling parties, to imagine
themselves victorious in elections and force their self-awarded
victories on the rest of us, thereby causing chaos. But there seems to
be a break from this culture as Mr Bankole and others have shown.

Following in the Speaker’s steps, PDP’s
Iyiola Omisore, who chairs the Senate Committee on Appropriation, on
Monday conceded defeat to Babajide Omoworare of the ACN. Almost
plagiarising Mr Bankole’s words, the serving senator said, “The result
of the National Assembly elections should be regarded as the wish of
the electorate which we politicians must respect to safeguard the
nation’s growing democracy. In a true democracy, you don’t expect to be
winning every time.” It is also very interesting that Mr Omisore sees
the conduct of last Saturday’s poll “as a clear signal that our
democracy has come to stay and that our politicians are improving.”

Messrs Bankole and Omisore’s examples should be encouraged by
everyone who wants to see democracy grow in our country. This is not to
say those who have valid arguments that their mandates were stolen
should accept defeat and move on. By all means legal, they should
pursue their cases to logical conclusions. The act of seeking and
getting justice is indeed an integral part of the democratic process.
What we abhor is the culture of ‘do or die’ that plagued our politics
in the past. As Mr Omisore counselled, “Politics is a game of win and
lose. If you win, you take it; if you lost too, you should accept it in
good faith. That is how we can nurture our democracy into full
maturity.”

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The struggle to end gas flaring

The struggle to end gas flaring

After decades of
being challenged by local and foreign industry watchers, the Shell
Petroleum Development Company (SPDC) of Nigeria Limited yesterday
announced that it has signed a contract with Saipem Contracting Nigeria
Limited for a pipeline system that will gather associated gas from
being flared, thus utilising it for use in the domestic gas market.

According to the
firm, some 30MMscf/d of gas from Otumara and Saghara fields in Western
Niger Delta will be gathered, processed, and channelled through the
Escravos – Lagos Pipeline System (ELPS).

“This is an
extremely important project for SPDC in terms of our commitment to
ending routine gas flaring, and consolidating our leadership position
in the domestic gas market. Security and funding permitting, we will
continue to make good progress in bringing on the projects that will
reduce flares and boost gas supply to the domestic market,” the company
said in a statement yesterday.

However, Phillip
Jakpor, media officer of Environmental Rights Action/ Friends of the
Earth Nigeria, doubts the sincerity of the oil company to end gas
flaring.

“Shell cannot be
trusted to tell the truth on matters of flare out. We have heard over
and over again about gas gathering infrastructure that they have been
constructing to harness wasted gas while spokespersons continue to
justify why gas flare cannot stop.

“They have
consistently breached our deadlines since 1984 and even their self
imposed deadlines with impunity, so we do not believe their lies on
ending flares,” Mr. Jakpor said.

The project cost
$101million. In January, the Dutch parliament questioned Shell because
of its activities in Nigeria. A lot of criticism was voiced about the
company’s lack of transparency in its activities in Nigeria, and about
the major pollution in the Niger Delta.

Groups such as
Milieudefensie, Friends of the Earth International, and other
non-governmental organisations want Shell to clean the hundreds of oil
leaks it causes each year and to stop flaring gas, which has been
prohibited by Nigerian law since 1984. The associated gas now simply
burned off emits poisonous gasses and CO2, whereas it could be put to
good use, such as to generate electricity.

Deputy managing
director, Saipem Contracting Nigeria Limited, Davide Rossi, said, “We
are committed to executing the contract job and ensure timely delivery
of the project.”

The 42-kilometre
pipeline is of various sizes, ranging from 2” to 12”, passing through a
swampy terrain with a major river crossing.

Late last year,
SPDC Joint Venture awarded a contract for engineering, procurement, and
construction of the gas compression and processing plant to Daewoo
Nigeria Ltd. and it says this work is progressing.

SPDC Joint Venture
has already invested some $3 billion in Associated Gas Gathering (AGG)
facilities which helped it reduce its flaring significantly between
2002 and 2010.

It said militant
activity and funding issues brought many projects to a halt, but it is
now investing more than $2 billion in completing these projects,
repairing damaged equipment, and building new AGG facilities.

The firm says when
completed, these projects will extend AGG coverage to more than 90 per
cent of the associated gas produced in the Joint Venture operations.
The remaining 10 per cent will be covered by Nigerian investors who
would collect associated gas from flare sites for small-scale local
projects.

Ending gas flaring

Last month, the
Federal Government launched a ‘gas revolution’ project which it says
would, among other benefits, put paid to gas flaring in the country and
utilise natural gas reserves aimed at attracting foreign direct
investment worth $25 billion.

Fola Onasanya, oil
and gas analyst, Ciuci Consulting, a management consultancy firm, said
the gas revolution launched by President Goodluck Jonathan holds the
promise of inducing further development and growth in the country’s
domestic gas market.

“With the $3
billion Central Gas Processing Facility (CPF) by Nigerian Agip Oil
Company (NAOC) and Oando Nigeria Plc, a huge sink will be created for
storing and utilising natural gas resources which otherwise could have
been flared, thus providing a boost to the economy both in terms of
value generation and job creation,” Mr. Onasanya said.

Nigeria’s oil
assets have been exploited for more than 50 years. However, while oil
companies have profited from the resource, local communities in the oil
rich but conflict ridden areas live with the daily pollution caused by
non-stop gas flaring.

The country has
lost billions of naira on gas flaring, a process of burning off into
the atmosphere, surplus combustible vapours from oil wells, either as a
means of disposal or as a security measure to relieve well pressure.

Inability to solve the lingering problem has been increasingly
recognised as a huge environmental problem in the Niger Delta region of
the nation.

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Board seeks passage of financial reporting bill

Board seeks passage of financial reporting bill

The Nigerian
Accounting Standards Board (NASB) has called for the passage of the
Financial Reporting Council Bill by the National Assembly.

The passage of the
bill would empower the board to implement the International Financial
Reporting Standards (IFRS), which Nigeria has already adopted.

The IFRS is expected to be implemented over a three year period with effect from January next year.

Executive secretary
and chief executive of the NASB, Jim Obazee, said while the board
strives for global relevance in the country’s financial reporting
system, it is handicapped to enforce compliance.

“The right
equipment we need for the implementation of the IFRS in Nigeria
includes the passage of the Financial Reporting Council (FRC) Bill.
Otherwise, we may have to identify every piece of legislation, mostly
in the Companies and Allied Matters Act i1990 that are inconsistent
with the pronouncement of IFRS,” Mr. Obazee said.

Cumbersome process

The FRC Bill, which
was passed by the former National Assembly, was not accented to by
President Olusegun Obasanjo. The failure of the successor, the late
Umaru Yar’Adua to sign the Bill three months after assuming office
meant that the Bill had to go through fresh legislative process.

It was again passed
by the House of Representatives in 2008, while it awaited the Senate to
consider the committee report. Before the recess on March 9, the
committee report was listed thrice in the notice paper by the Senate
but it eventually did not come up for consideration before the
lawmakers vacated.

According to the
NASB, the passage of the Financial Reporting Council Bill will help to
address the current institutional weaknesses in the regulation,
compliance and enforcement of standards, and the development of robust
arrangements for monitoring and enforcing compliance with financial
reporting standards.

Mr. Obazee said
Nigeria stands to receive increased Foreign Direct Investment (FDI)
when the bill is passed. “Nigeria will be included in the list of third
country auditors, as unveiled by the European Union. As such, our
professional accountants shall be allowed to audit companies that have
subsidiaries in the EU without limit,” he added.

According to him,
the desired public sector financial management reforms will be realised
with the development of public sector accounting standards, which shall
be issued by Financial Reporting Council.

Enhancing market discipline

The Central Bank of
Nigeria (CBN) governor, Sanusi Lamido Sanusi, said recently that the
current accounting system by Nigerian institutions was not in line with
global standards, hence the introduction of the IFRS.

“This is expected
to enhance market discipline, and reduce uncertainties which limit the
risk of unwarranted contagion,” Mr. Sanusi had said.

IFRS are
principles-based standards, interpretations, and the framework adopted
by the International Accounting Standards Board (IASB). Nigeria is
implementing an agenda for the adoption of IFRS by all reporting
entities commencing in January 2012 through January 2014.

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Senegal plans $200m sovereign Islamic bond

Senegal plans $200m sovereign Islamic bond

Senegal will likely
launch a debut sovereign Islamic bond in 2011 of around $200 million,
said the chief operating officer at the Islamic Corporation for the
Development of the Private Sector (ICD).

ICD, a member of
the Islamic Development Bank, has been mandated to work on the Islamic
bond, or sukuk, and while the exact size has not been fixed yet, it
will be around $200 million, Ahmed Khizer Khan told reporters on the
sidelines of a conference in Dubai.

“The mandate has
been signed; you have to work with the government to see when the best
time is. It depends on the government but we’d like to do it the
sooner, the better,” Mr. Khan said.

Sources told Reuters in November Citibank is also serving as an arranger on the planned sukuk.

Senegal is one of a
number of African nations looking to enter the nearly $1 trillion
Islamic finance market. Nations from South Africa to Kenya are
revamping laws to accommodate sukuk transactions in a bid to attract
more Middle Eastern funds.

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Angola reserves hit $17.66b

Angola reserves hit $17.66b

Angola’s foreign
exchange reserves rose to $17.66 billion in December from $15.5 billion
in November, the Central Bank said in a statement posted on its website
on Tuesday.

Angola, the second
largest oil producer in Africa after Nigeria, depends on oil exports
for over 90 per cent of its foreign exchange earnings.

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Government pays 45% of NITEL workers’ entitlements

Government pays 45% of NITEL workers’ entitlements

The Federal
Government has paid 45 per cent of the entitlements of workers of the
Nigerian Telecommunications Limited, the National Union of Postal and
Telecommunications Employees (NUPTE) has said.

Sunday Alhassan,
president of NUPTE, told the News Agency of Nigeria (NAN) in Lagos on
Tuesday that the entitlements included outstanding salaries.

Mr. Alhassan said
that the government had also given an assurance that it would pay the
remaining 55 per cent of the entitlements in May.

He said that the government paid the entitlements in December, 2010,
although some affected workers did not see their money in time due to
the inability of their banks to promptly credit their accounts.

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Dangote to invest $3.9b on cement plants in Africa

Dangote to invest $3.9b on cement plants in Africa

The Dangote Group
says it will invest 3.9 billion dollars (N585 billion) in the expansion
of its cement plants in some Africa countries.

Aliko Dangote,
chairman of the company, disclosed this on Tuesday in Lagos while
signing an agreement between his company and a Chinese firm, Sinoma
International Engineering Co. Ltd.

He said that the
expansion project, expected to be completed in 2013, would produce
additional 16.5 million tonnes of cement to achieve a target of 50
million tonnes in the next two years.

Dangote, represented by Devakumar Edwin, the company’s group
executive director (Business Development), said that the projects
included installation of equipment, mining, quarry, power facilities,
among others.

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Petroleum marketers want development of rail system

Petroleum marketers want development of rail system

The Independent
Petroleum Marketers Association of Nigeria (IPMAN) has urged the
Federal Government to hasten the development of the rail system to
enhance effective petroleum products distribution across the country.

Olumide Ogunmade,
the chairman of south-west chapter of the association, told the News
Agency of Nigeria (NAN) in Lagos on Monday that rail system was one of
the best and cheapest means of haulage in the world. He said that a
trip by rail could take what 30 to 50 trucks would carry.

Mr. Ogunmade said
that high-speed trains have become important mode of transportation,
and advised the federal government to partner with private sector
operators to achieve the objective.

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India plans stronger trade ties with Nigeria

India plans stronger trade ties with Nigeria

The government of India has said it is looking into addressing the lopsided economic relationship between it and Nigeria.

Figures of trade
released by the country show that bilateral relations between both
countries for the year ended March 31, 2010 is $8.7 billion. Nigerian
export to the Asia country is around $7.3 billion, while that of India
to Nigeria is around $1.2 billion. The trade between the two countries
is greatly in Nigeria’s favour, thus making it enjoy the trade surplus
of $6 billion.

Vishnu Prakash,
India’s joint secretary and spokesperson of the ministry of external
affairs, told journalists on Monday that both countries have adequate
potentials to attract investment that will boost their economic
relations.

Important trade partners

“For India, energy
security is a very important consideration and we import almost 80 per
cent of our energy from the global market. In Africa, Nigeria and Sudan
are two key countries from which we import significant amount of
petroleum products.

“It is natural that
when we are importing hydrocarbons from Nigeria that the trade will be
in their favour. I can tell you categorically that we want more trade
with Nigeria,” Mr. Prakash said.

He also that there are a number of areas that India and Nigeria can work together to have more trade.

“Pharmaceuticals
are one of them because we are global leaders in production drugs which
are high quality and of cheap price, and I know that Indian drugs are
in high demand in Nigeria.

“Some other areas
are in the service sector like the information and communication
technologies, the automobile centres, equipment and machinery, and
textiles. Increasingly, I find Nigeria is figuring prominently amongst
other countries on the business ladder of the Indian companies in terms
of investments and trade. I am quite sure of the opportunities that we
have,” he added.

Already, there are
about 30,000 Indians in Nigeria, less than 1.5 per cent of the total
Nigeria population. On the continental scene, the external affairs
spokesperson said India had $45 billion of trade with the African
continent last year and there are similar number of investments, which
are more than $45 billion.

Growing partnership with Africa

$2.3 billion out of
the 5.4 billion credit earmarked for Africa in a five-year period has
been made available, according to Mr. Prakash. The credit is meant to
address the challenges of infrastructure, capacity building, and human
resources issues. The upcoming India-Africa Summit in Addis Ababa is
part of this collaboration.

The Indian
authorities said Africa now has a growing partnership with the country,
though it started long back, but acquired considerable substance and
momentum only recently.

“With the involvement of Indian business giants such as Tatas,
Mahindras, Kirloskars, Ranbaxy, RITES, IRCON, NSIC, TCS, OVL and
others, our bilateral ties have impoved a lot, making us the second
largest trading partner with them. The India Africa Conclaves and the
upcoming Summit in Addis Ababa in May are some of the additional
feathers in the cap,” Mr. Prakash said.

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Customers ignore many uses of ATM cards

Customers ignore many uses of ATM cards

A recent report has
shown that many Nigerians still do not know that their debit (Automated
Teller Machine, ATM) cards can be used for more than just withdrawing
cash from bank ATMs.

Over 74 per cent of
the respondents surveyed by ThinQThanQ, a research and database unit of
financial technology, a financial services technology publication that
circulates in 16 countries, said they have used their ATM cards for
only cash withdrawals.

The report also
shows that only 14 per cent of the respondents use their cards to make
purchases on the web or topped up airtime on the web, or at point of
sale (PoS) terminals or ATMs.

The publication
said data for the customer usage pattern for the ATM in 2010 were
collected from surveys conducted through random questionnaires applied
to 600 debit card holders across Nigeria. These were administered to
the survey population in Lagos, Abuja, and Port Harcourt, three leading
commercial cities in the country.

Lack of understanding

Temilayo Ojo, a finance consultant, said she was not aware that her card could perform various transactions.

“I just thought
that the options I had for the card were the ones at the ATM machines,
checking balances, topping up my airtime, and all that,” she said.

Key findings from
the survey are that the migration of the payment cards from the
magnetic stripe to chip and PIN EMV platform has been smooth and hugely
successful in Nigeria. Also, efforts of the CBN, banks, card schemes,
and other stakeholders have yielded positive results.

Sola Fanawopo,
editor-in-chief, Financial Technology Africa, said the drive towards a
cashless payment system in the country has yielded very poor results,
as very few bank customers use their ATM cards for end to end payment
transactions. Majority of the card holders said they only use their
cards to withdraw cash.

“No wonder most respondents referred to debit cards as “ATM cards”.

“Most card holders
in the country are unaware that they can use their ATM cards for
payment transactions on other channels from ATM withdrawals. Some of
the card schemes are also culpable as their cards are not acceptable on
some of the channels,” he said.

Seven per cent also
use their cards for funds transfer from one bank account to another.
However, only four per cent of the survey’s respondents used their
cards to make bill payment on touch points.

Network challenges

ATM downtime and
fear of fraudulent activities have been cited as major factors
inhibiting the frequent use of debit cards for payment transactions by
bank customers.

More than 52 per
cent of bank customers surveyed said ATM downtime was the major reason
that prevented them from using their cards more frequently for payment
transactions. Similarly, about 43 per cent of the respondents affirmed
that concerns about fraud posed another hindrance for using their cards
more regularly.

Only 52 per cent of
bank customers surveyed have actually used their debit cards for any
form of payment transactions, while 48 per cent have refused to do so.

To deepen the
culture of card usage, banks and card schemes need to focus on
marketing strategies that will encourage card holders to activate and
use their cards as frequently as the need arises for all relevant
transactions.

73 per cent of the
respondents actually feel more secure using the new chip and PIN EMV
cards. Incidence of payment card fraud was on the increase before the
change over to the PIN EMV platform. 19 per cent of the people surveyed
have actually experienced fraudulent activities with the use of their
debit cards for financial transactions.

Mr. Fanawopo said
awareness of the availability of loyalty and rewards schemes from usage
of payment cards is low. He, however, said that the assurance that Chip
and PIN EMV payment cards are not fraud-prone like the magnetic stripe
cards is gradually restoring the cardholders’ confidence over fraud
concerns.

A banker at Zenith
Bank, however, said a good number of customers are actually enlightened
about the various uses of their cards.

“Many of them
utilise their cards to an encouraging capacity, especially during
public holidays. In fact, we receive calls for directives as regards
internet banking and online transactions from customers. I can say out
of about 100 customers, about 20 or 30 of them actually know about the
other functions their cards can perform, like the payment of their
utility bills, DSTV, and all of that and more,” she said.

The Central Bank
has on several occasions stated its efforts to address card fraud. At a
recent event in Lagos, Emmanuel Obaigbona, who represented the
director, banking and payments, said apart from a migration directive
of card types, the apex bank has also mandated all banks to set up
effective help desks for handling card-related complaints.

He also said that
the regulatory body also ordered the issuance of relevant rules and
regulations in order to provide a level playing ground for all
concerned parties in the retail payment industry, which include the
electronic banking guidelines, guidelines on transactions switching,
stored value card and prepaid card operations, and others for the
operations of credit bureau.

“These guidelines are aimed at fostering consensus and cooperation
amongst a broad spectrum of payments service providers and increase
public confidence in the system, among others,” Mr. Obaigbona said.

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