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A month after the
exit of both the chairman and chief executive of the Nigerian
Communication Chairman (NCC), there has been no board meeting as only
the chairman is authorised to call board meetings. This has prevented
the commission in discharging its functions.

An official of the
NCC who spoke under anonymity as he is not authorised to comment on the
matter said, “Based on the Nigerian Communications Act of 2003, a
chairman can summon a meeting on his own or if notice is given to him
by at least four members demanding for a meeting.” The official added
that there was no provision for any other person to call for board
meeting.

The tenure of the
last executive chairman, Ernest Ndukwe, ended on April 2 while the
chairman, Ahmed Joda, also retired at the same time; just as another
board member, Patrick Kentebe, left. The federal government has not
appointed anybody to fill the vacant positions. But Stephen Bello, the
executive commissioner for licensing and consumer affairs, has been
acting as the chief executive.

Kenneth Ugbechie,
secretary, Africa Telecoms Development Initiative, a pan-African
non-governmental organisation committed to the development of telecoms
in the continent, said in a telephone interview: “The internal
operation in the NCC as a body has been slowed down because it is
difficult for the acting executive vice chairman to be definitive when
taking decisions. Mr. Bello is acting executive vice chairman without
the full complement of a board, so there are certain decisions he
cannot take now because those direction might be upturned by the
incoming executive vice chairman. So, instead of making a decision that
would be upturned, he may have to shelve that decision and I think that
is not good enough for the telecom sector.

“What the
presidency has done by changing the headship without a substantive vice
chairman is to create a state of anomie. In the state of anomie
anything is possible, there is confusion, and laxity. For the sake of
the sector, I think it is time for President Goodluck Jonathan to do
something,” he said.

Some market
analysts have identified education of investors as a way out of the
wobbly rebound recorded at the Nigerian capital market.

Gbenga Emmanuel, a
finance analyst at WealthZone Company, an investment advisory firm,
said the efforts of relevant capital market authorities towards
investors’ education is still low. “Authorities should devote more time
to investors’ enlightenment in order to boost market performance,” he
said. Gbenga Idowu, managing director of the Centre for Shareholders’
Enlightenment Limited, said investors, being the main drivers of
performance at the Nigerian Stock Exchange, should be well “informed
and involved” on market activities.

More enlightenment

Citing an example,
Mr. Idowu said investors need more enlightenment especially from the
Central Bank and the Ministry of Finance on the much anticipated Asset
Management Company of Nigeria (AMC) targeted at cleaning toxic loans of
banks.

“Even when you put
the AMC in place and you put money there, it will still be run as a
purely profit concern. You do not expect the managing director in
charge of the company to come out and say they have failed because they
have given the money out to Nigerians,” he said, adding that people
only know that the AMC will clean banks’ books.

Tunde
Oladapo-Dixon, chief executive officer, StockPicks Consulting, a stock
broking firm, said real investors are still shying away from the market.

“Real retail
investors are not investing yet in the market. Institutional investors
are the one playing the market and because they will always want to
take their profits, market performance is bound to be unstable,” Mr.
Oladapo-Dixon said.

Commission assures

Meanwhile, the
director general of the Securities and Exchange Commission (SEC),
Arunma Oteh, has promised that her administration will focus more on
investors’ education.

At a seminar last
weekend, Ms. Oteh said the greatest asset of any capital market, and
indeed financial market, is its investors. “It is investors, whether
retail or institutional, who provide the savings which are needed for
productive investment. Therefore, if investors lose confidence in the
capital market, the ability of the market to mobilise and channel long
term funds, which are very vital for economic development, will be
marred,” she said.

The SEC’s boss added that a market would lose its essence without
the confidence of investors. “To build a world class market therefore,
the SEC would focus considerably on investor protection and the
restoration and sustenance of investors’ confidence in the market. No
doubt, investors will feel protected and confident to participate when
a market is perceived as fair, efficient, and transparent with a strong
enforcement regime. The SEC is committed to building a market which
displays such internationally recognised characteristics.”

The Federal
Government said it is determined to take advantage of improving the
business environment in the country to attract more foreign direct
investments, particularly from Europe, in the hope of growing the
nation’s economy into one of the world’s 20 biggest economies by 2020.

An international
business forum is being planned for Dublin, Ireland, early next month,
as part of efforts to mobilise European investors to participate in the
development of the different sectors of the nation’s economy.

The 2nd Business
Forum of the International Gateway Partnership (I-GEP 2010)Summit,
according to Nigeria’s Ambassador to Ireland, Kema Chikwe, will provide
political leaders and business executives from Nigeria, Ireland, and
other countries, the opportunity to come together to share ideas on new
partnerships and investment destinations in the country.

The three-day
summit will feature a bankers’ financial forum and exhibition, as well
as a tour of business and industrial sites across Ireland by Nigerian
business delegation.

It will also
feature sessions on a wide range of investment opportunities and
businesses, including power and energy, agriculture and agro-allied
industries, construction and property development, transport, solid
minerals, education, health, tourism, ICT, and manufacturing.

Opportunities for networking

“Building on the
successful forum held last year, I believe that I-GEP 2010 will yield
practical ideas on enhancing trade, mobilising investment, and
strengthening economic links between the participating countries. I am
confident that the opportunities for commercial networking through the
forum will be highly valuable to facilitate the continued growth in
trade relations between Nigeria and Ireland,” Mrs. Chikwe said in Abuja.

“It will highlight
new global economic partnership arrangements to promote trade and
investment in key market sectors in the Nigerian economy, while the
business forum will present the useful platform for fostering
partnerships and collaborations among participants. It is predictable
that sustainable recovery and development of the regions, especially
post-global meltdown, will depend greatly on the strength of these
collaborations.”

The forum, which
the ambassador said will help in the liberalisation and deregulation of
the country’s economy, will be hosted in collaboration with the
Nigerian Investment Promotion Commission (NIPC) to stimulate domestic
investment and attract direct foreign investment.

Key participants in
quest for funding, equity share, and regional business partnerships are
also expected to take advantage of the forum to exchange proposals on
portfolio of investment, while countries and financial institutions in
the emerging markets would find common grounds for collaboration.

Bamanga Tukur, the
chairman, African Business Roundtable (ABR), added that the forum would
provide opportunity for networking and business partnership. It would
also serve as business exchange centre for delegates to engage with
potential investors, investment bankers, and knowledge partners in
sharing business ideas.

“The summit will provide the option where project and business
summaries can be made available in advance to interested investors and
partners, while all project holders will be made available and
accessible for one-on-one meetings,” Mr. Tukur said.

General Electric’s
(GE) South African unit said on Wednesday it was awarded a 500 million
rand contract to supply state power utility Eskom with equipment for
its new Medupi plant.

The World Bank
granted Eskom a $3.75 billion loan last month to help finance the
Medupi plant, which is just one of several new power stations planned
by the utility to ease South Africa’s chronic power shortages.

Eskom is in a race
to build new generating capacity to meet fast-rising demand for
electricity in Africa’s biggest economy, and the 4,800 megawatt Medupi
coal-fired power station — the first new station built by Eskom in two
about decades — is expected to help ease the country’s power crunch.

SABMiller’s
Zimbabwe unit will spend $112 million in the next two years to ramp up
output, the chief executive said, as it bets the recovery from economic
crisis will boost demand for beer and soft drinks.

Delta Corporation,
in which SABMiller has a 36.8 percent stake, was one of the companies
hardest hit by Zimbabwe’s economic meltdown in 2008, which sent
inflation to 5 billion percent and left the currency worthless.

Joe Mutizwa told
Reuters the company will spend $56.4 million of its own cash in the
year to March 2011 for capital expenditure, including the completion of
a beer plant in the city of Bulawayo.

The idea behind the establishment of the Economic Community of
West African States (ECOWAS) over 30 years ago has not been fulfilled,
Josephine Tapgun, the Minister of State for Commerce and Industry, said
yesterday in Abuja. Ms. Tapgun said the objectives of achieving trade and
economic integration within a borderless sub-region remain largely unfulfilled.

Speaking at the opening of the 3rd West African Monetary Zone
Ministers of Trade Forum in Abuja, Ms. Tapgun stated that external factors have
contributed a great deal to this problem, hence the need for a review of the
existing infrastructural policy of ECOWAS, to increase the volume of trade
across the member nations.

“Issues that need to be addressed urgently include the policy
and regulatory environment that will ensure transparency, predictability, and
business and investment friendly environment,” Ms. Tapgun said.

“There is, therefore, the need to critically examine our
infrastructural policies with a view to enhancing intra-West African Monetary
Zone trade,” she said, insisting that ECOWAS members need to trade more among
themselves to foster economic integration and ensure regional development.

For this to be achieved, she said, member countries have to
demonstrate a strong political will to carry out the necessary social and
economic reforms that will bring about effective regional integration,
socio-economic growth, and development within the sub-region.

Developing the infrastructure both in hard and soft forms is
germane for a credible settlement system. The soft infrastructural challenge is
visible in the fact that dispute resolutions across borders, like payment
problems, are nonexistent and there is no institutional framework for it.

No free movements

Also, capital movements are not free across borders, with all
countries applying exchange controls; membership in monetary groupings and
trade groupings pose problems, as there about 30 such groupings with an average
of each country belonging to about four; markets are restricted to local banks;
while economies of scale from regional single market is not available.

Equally, Temitope Oshikoya, Director General of West African
Monetary Institute, remarked that the institute is assisting some African
countries in developing trade policies, insisting that a good trade policy is
of particular importance to promote trade integration in the region and enhance
economic growth.

“WAMI, with support from its development partner, has developed trade policy
for the Gambia. It is my fervent hope that when fully implemented, business
will expand, jobs created, more revenue for government generated, and greater
income for the people,” Mr. Oshikoya said.

As the present
Nigerian government is focused on ensuring that the relevant
infrastructure for stable power supply is in place, since stable and
affordable power supply effectively is the bedrock of the society, let
us this week analyse the role that private business, public sector and
information technology as an enabler need to play in achieving this
objective.

Stable and
affordable electricity which we crave for as a nation can be discussed
under the broad headings: generation of adequate power capacity,
effective distribution/maintenance of the infrastructure, marketing and
sales, and implementing accurate billing/payments mechanism or process.

So in ensuring that
we have stable power supply, it makes sense to rely heavily on the
private sector, since it is a proven fact that when a service is based
on competition, profit making, and investors monies are at stake, the
likelihood of maintaining continuity, reliability and efficiency in the
service provision is more likely to be achieved and the consumer is
better served.

In more advanced
countries, particularly in the United Kingdom, every stage of power
supply is privatised and I accept that this model has inherent
disadvantages, as there is clearly a junior role for the state to play
not only as a regulator but in the crucial role of power generation,
distribution, and maintenance of the underlying transmission
infrastructure.

Generation of adequate power capacity

Since we don’t have
an efficient power infrastructure base in Nigeria it makes sense that
both the state and the private sector are involved as partners in
ensuring the establishment of such infrastructure.

The state or its
agencies steer this partnership in ensuring that the objective is
achieved from a holistic point of view whilst the private sector
organisation whose primary objective is to provide an efficient service
and return profit to its shareholders has no choice than to deliver.

In such an
arrangement, even if it is just one company providing this service such
as is obtained in the UK where the National Grid performs this role, it
is must be target driven and based on clear, enforceable service level
agreements with built in severe monetary penalties.

Distribution and maintenance of the power transmission infrastructure

Again the relevant
infrastructure needs to be implemented and maintained to ensure power
is effectively distributed and clearly managed as a part, private and
public initiative (PPP) for the same reasons highlighted earlier.

The electricity
transmission network which includes cables and poles that ensure that
power is transmitted from where it is generated into our homes,
offices, shops must be maintained and looked after.

Marketing and sale

To ensure that a
competitive service is provided to the consumer, the actual sale of
power to the end user ought to be fully privatised and there should be
a minimum of five companies providing this service, just like in other
developing nations.

The consumer can
decide to choose any supplier based on price, quality of service,
customer service and responsiveness among others. If necessary it may
be best to invite foreign based electricity supply companies to get
involved but with a strict requirement to ensure that Nigerians over a
defined period of time dominate the management cadre and work force of
their organisations.

Implementing accurate billing/payments mechanism

The consumer must
be provided with the confidence that whatever billing process is
implemented is accurate and based on his consumption which will
encourage prompt payment. You are more likely to pay for a service
promptly when you are confident that you are paying the correct amount
for what you have used. The billing process must be transparent to the
consumer (available online) and should be able to withstand any manner
of scrutiny or audit.

Information Technology role

From the power
generation stage, to distribution and sale, accurate computerised meter
reading records need to be maintained, accurate computerised records of
wholesale purchase of power from the generating company by electricity
suppliers, consumer details and monitoring application systems need to
be implemented.

Online billing
systems and connectivity between systems used by competing electricity
supply companies must also be maintained so that a consumer can
seamlessly move over to another supplier based on their preference. All
the mentioned systems need to be in place to ensure that every stage in
the power supply chain is effective, accurate and auditable which will
provide all round confidence on all sides.

Competent IT
literate administrative staff and IT professionals will all be required
to enhance the application systems. For example, Centrica PLC, an
electricity supplier in the UK requires over 500 IT professionals to
support and maintain all the relevant electricity application systems
that automate every stage of the electricity supply process from
purchasing bulk electricity from the National Grid to supplying it to a
consumer, through to billing and receiving payments.

As Information Technology is the enabler of all sectors in our
society, not just the power sector, the better the IT infrastructure in
place and the more computer literate our society becomes, the more
efficient all other sectors can become, certainly in my view.

Sanusi-watching has become Nigeria’s most popular spectator
sport. Every other week, the Central Bank governor beams his searchlight at a
dark corner of the banking attic to expose a mangled mass of cobweb. Oddly, his
admission at a seminar last week that the regulator does not know the
identities of owners of significant blocs of shares in ‘a very large number of
financial institutions’ has been received with indifference. In typical
fashion, the gallery has latched on to his other announcement at the same event
that the CBN would limit the tenure of non-executive directors of banks to two
years subject to renewal only at CBN’s instance.

The CBN’s authority to impose a ceiling on non-executive
director tenure and the propriety of announcing a major policy decision at a
public forum aside, I think that companies should applaud Sanusi for
championing transparency in shareholder identification. However, my reasons for
urging their interest diverge sharply from the Central Bank governor’s who
asked ‘Who owns the banks? Are they money launders or drug barons?

In fact, it baffles me that there has never been any public
advocacy on the subject of shareholder identification. There may be a good
reason why it has been kept off the agenda. Could it be because quoted company
boards of directors, stock brokers, issuing houses and registrars are complicit
in freezing the trail that leads to some beneficial owners? Or might it be that
they have been so busy covering up their own tracks that they are missing the
significance of the tracks being laid by non-insider investors? Their covert
ambition has been to ensure that control never slips out of their hands. Did
anyone say ‘hostile takeover’? Not in your dreams, not in my time. They and
their proxies are in firm control. Why would they bother about any shareholder
identification when the free float is laughable and they have a maze of
interlocking ownerships that would make any Byzantine emperor proud? With that
kind of moat, they can flick away any interloper’s unsolicited interest like a
dead insect.

Anyone who has followed global markets in the last few years
knows that shareholders can wield influence far in excess of their ownership
stakes. Activist investors with absolutely no interest in taking over the
company have become a fixture of the governance universe. From retail investors
like Eric Jackson who with only 45 shares launched a widely covered shareholder
campaign against the board of Yahoo! using YouTube in 2006 to the Roman
Catholic Sisters of Charity of St. Elizabeth who pushed for the publication of
risk management policies in plain English at Bank of America’s 2010 annual
general meeting and went on to win 39 per cent of votes in support, there is a
trend for proposals to stand on their merit and not on the number of shares
owned by a shareholder.

The bulky ledgers of tiny print with columns of names and
holdings in registrars’ offices contain a wealth of intelligence for every
company’s investor relations (IR) efforts. Companies are fond of mistaking
blasting ego-propping communications of corporate accomplishments to
shareholders as IR. That is mass communications and useful as it may be, it
does not build relationships, which is the operative goal of IR. Boards need to
closely monitor the geographic breakdown, composition, concentration,
investment styles and turnover of their shareholder base to craft effective
investor relations strategies. Anything else is akin to throwing spaghetti on
the wall.

In a paper calling for improved disclosure in shareholder identification,
‘Shareholder ID: The Resounding Silence of Non-disclosure,’ prepared by PR
Newswire’s Disclosure Advisory Board, the writers lamented the ‘thunderous
silence’ on hidden ownership. They argue that it is unfair to demand full
disclosure from companies while permitting investors who may have hidden
agendas from disclosing their interest in a timely fashion. Transparency is a
two-way street.

In banking, there is the policy of Know Your Customer. Companies
must now institute a policy of regular Know Your Shareholder audits. While
board members with vested interests will want to see Mr. Sanusi’s latest
comments as another round of witch-hunting about to begin, he is doing them a
big favour by indirectly fighting for their right to know buyers of their shares.
At least, now the law would ensure that no one comes from behind them to spring
a hostile takeover. However, the whole point of shareholder identification is
not about stealing the company from its owners. It is about giving them an edge
in their capital market relationships.

The writer is the managing
director of a full service investor relations firm based in Lagos.

South Africa’s economic outlook has improved, although growth
should stay below potential output for “some time”, posing little threat to
domestic inflation, its central bank said on Thursday.

Developments in the euro area – a major trading partner where
sovereign debt worries are growing, sparking global risk aversion – are a risk
to growth and may also hit the rand currency, the Reserve Bank (SARB) added in
its latest Monetary Policy Review.

Africa’s biggest economy pulled out of recession in the third
quarter of last year and the recovery appears to be gathering pace, with data
this week showing annual retail sales rose for the first time in more than a
year, signaling households are starting to spend again.

Consumer spending was the main driver of average 5 percent
annual growth in the five years before the credit crisis, but it has been the
slowest to rebound as banks cut lending and more than one million jobs were
lost, hurting households’ finances.

The central bank said in the review – released twice a year –
that domestic expenditure appeared to be recovering, while manufacturing output
continued to improve.

This, though, did not pose a threat to inflation, as firms
continue to produce below maximum capacity.

“Despite the more favourable growth outlook, the output gap is
expected to remain positive for some time,” it said. The bank has in the past
estimated potential growth at 4.5 percent.

The SARB forecast the economy would grow by 3.7 percent
quarter-on-quarter and annualised in the first three months of this year, and
by 3.2 percent in the second quarter.

It recently raised it prediction for expansion in 2010 to 2.7
percent from 2.6 percent – roughly in line with economists’ expectations.
Statistics South Africa is scheduled to publish first quarter growth data on
Tuesday.

Euro risks

The bank warned the recovery could be damaged by the debt
problems in the euro zone, with austerity measures dampening growth in some
economies and, ultimately, trade.

“The growth performance will also be affected by the performance
of the global economy and the risks posed by developments in the euro area,” it
said.

Another global crisis, and accompanying risk aversion, may hit
the rand, lessening the impact its relative strength has had on containing
inflation.

The central bank said its policy committee had considered the
rand a major contributor to the favourable outlook for inflation, but
recognised it was volatile and subject to external factors, such as risk
appetite.

“The reaction of the rand to the developments in the euro area
demonstrated that the positive impact of the rand on the inflation outlook was
contingent on developments in the euro area and general risk aversion,” the
central bank said in the review.

The rand had held onto last year’s nearly 30 percent gain
against the dollar, supported by strong gold and platinum prices and the lure
of high interest rates. It has weakened sharply this month as fears Greece’s
sovereign debt woes may spread to other European countries prompted investors
to cut back on riskier investments in emerging markets.

The rand fell to 8.0806 versus the dollar on Thursday, a
six-month low and a fall of almost 4 percent, compared with around 7.30 in
early May. At the height of the global financial turmoil in late 2008, it fell
to 11.88 to the dollar.

The SARB reiterated its favourable outlook for inflation, forecasting
targeted CPI to trough at 4.7 percent in the third quarter, and stay inside the
3 to 6 percent band until the end of 2012, when it is seen at 5.3 percent.