Nigeria Content Online

The management of
Oceanic Bank International plc has said continuing to disburse funds to
Aero Contractors on their expired credit facility with the bank will
amount to putting depositors’ funds at risk.

The bank’s
management explained that the aviation company had a series of
short-term facilities at an interest rate of between 17 and 19 per cent
per annum with the bank. The facilities expired in September 2009.

According to the
management, a renewal offer from the bank, which substantially
increased the tenor of the facility from between three months and one
year to a 10-year period at a reduced interest rate of 12.5 per cent,
has been on the table for Aero since December 15, 2009. It said the
offer has not been accepted by the board and management of Aero to date.

“Whilst Oceanic
Bank remains committed to supporting Aero, the absence of a valid
contractual loan agreement will put depositors’ funds at risk,” the
bank’s management said.

This follows what
the bank describes as “insensitive statements” in the media by Aero
Contractors including a spate of reports portraying Oceanic Bank as
starving Aero of operational funds.

“Our transaction
with Aero is transparent and indicative of our commitment to supporting
businesses in a manner that provides equity and mutual benefit to the
Bank and its customers.

“We have bent over
backwards to support Aero and have been waiting for an acceptance of
our credit renewal since 15 December, 2009. We are very certain that
the level of positive support given to Aero by Oceanic will be very
difficult to replicate by any bank in this environment.”

“However, it would
appear that Aero just wants access to credit facilities without
provision to pay back. The way forward is for Aero to pay down the
facility or accept the renewal offer.”

Confirming the
mediatory role of the Minister of Aviation, Fidelia Njeze, in ongoing
negotiations, Oceanic Bank’s GMD/CEO, John Aboh, said he was optimistic
of an amicable resolution of the issues at the end of the process.

Meanwhile, Aero’s
account with Oceanic Bank remain operational across its branches
nation-wide as against media reports that their accounts had been
frozen.

Flying on low funds

Aero Contractors,
one of Nigeria’s oldest commercial airlines involved in domestic and
regional transport business, is facing challenges following accumulated
debts of about $200m.

In April, the
airline, which has been in regular negotiations with its banker
(Oceanic Bank Plc) for about six months, disclosed that it has now
reached a point where it is difficult to operate on the terms of
discussions with the financial institution.

The airline had
alleged, in a statement, that the bank, on April 23, froze its accounts
effectively preventing it from paying its suppliers and lessors,
including the Canadian Helicopter Company (CHC).

“The dilemma
centres on the allocation of historical debt. The management teams at
Oceanic Bank and Aero have been in constant dialogue about this matter
for the previous six months. However, they have been unable to agree on
a resolution that will allow Aero to continue trading as a going
concern,” said the carrier in a statement.

The airline is
noted for the introduction of online booking by passengers and recently
introduced an advanced pricing strategy and price optimisation
application called Aviator, which has a capacity of making available 26
different types of fare on every flight for passengers.

The
governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi,
has said that the banking sector will feel the death of late Umar Musa
Yar’Adua more than any other sector.

Mr. Sanusi made this assertion when he paid a visit to the Kano State governor, Ibrahim Shekarau, over the weekend.

“My
hope is for our new president, Goodluck Jonathan, to continue from
where late president Yar’Adua stopped so that there will be sanity in
the banking sector.” He said that late Yar’Adua was a dogged fighter
against corruption, which virus has eaten up the entire system,
stressing that his death has created a negative impact that can’t be
quantified.

Mr. Sanusi added that the banking reform will go a long way in reviving our country’s economy.

He
added that late Yar’Adua was one of the few leaders in Nigeria that has
done well within the short time that he was in leadership.

No major policy shift

Finance
experts, however, stated that there is likely to be no major policy
shift in sight, following the demise of the president of Nigeria.

Renaissance Capital, an international finance firm, said no major policy course shift is being expected.

“Nigerian
authorities will continue to pursue a countercyclical macroeconomic
stance, as illustrated by the expansionary 2010 budget that was
recently approved by Goodluck Jonathan. We believe some of the key
reforms initiated under the Yar’Adua administration are likely to be
implemented and executed going forward.”

“Last
week, the Senate adopted the asset management company bill, which has
to be signed by Mr. Jonathan and will be a critical step to help
restore confidence in the banking system and the real economy as a
whole. Added to this, the petroleum industry bill is being discussed at
the parliamentary level and could be passed into law at some stage,
boosting the relevance of the oil sector in Nigeria’s domestic output.

“Furthermore,
Mr. Jonathan has promised that the 2011 general elections will be free
and fair, and recent and forthcoming changes at the Independent
National Electoral Commission are likely to be monitored closely in
this regard. The tackling of corruption also remains a top priority for
the new administration. Additionally, the sustainability of the peace
process in the Niger Delta region is seen as a fundamentally important
issue by top officials, notably as oil production has rebounded to
1.95-2.0mn bpd since Dec 2009.

Finally,
we do not expect the markets to be volatile post the passing of the
president, as the recent political environment has already been priced
in.

Indeed,
Jonathan has asserted himself incrementally, especially after
appointing a new cabinet, and has emerged as the country’s leader
domestically and internationally (following his trip to the US) amid
indications that key reforms in the pipeline would be addressed, in
areas such as the financial system, the petroleum industry and
electoral reforms.”

State of the economy

Afrinvest
West Africa, a finance and research analysis firm, said Nigeria’s
economic performance, in line with the late president’s policies, in
the first quarter of 2010, proved remarkably resilient.

In
a report, Afrinvest says provisional data provided by the National
Bureau of Statistic (NBS) indicates that real Gross Domestic Product
grew by 6.7 per cent in first Quarter 2010, up from the 4.5 per cent
recorded in the corresponding period in 2009.

“External
reserves stood at $41.0bn at the end of March, compared to $42.4
billion in January 2010; this is expected to cover imports for the next
three quarters. Oil production peaked at 2.4million barrels per day
(mbpd) in the last quarter of 2009 and remained relatively stable
around the 1.9-2.1mbpd range throughout Q1, following the return of
stability to the Niger-Delta through the federal governments amnesty
program.”

The
report also added that “Oil prices also rebounded, largely trading
around the $80.0 per barrel mark. The 2010 budget had initially been
predicated on a conservative oil price estimate of $57.0 per barrel; we
believe oil prices will remain around the $80.0 mark in the near term
as the global economy firms up”.

Nigeria’s
President Yar’Adua passed away on May 5 in Abuja. His health worsened
last year, forcing him to seek medical treatment in Saudi Arabia in
late November. While he returned to Nigeria in February 2010, he did
not publicly address the nation in the weeks afterwards, fuelling
speculation about his condition.

The
controversial reforms in the banking sector, endorsed by the late
president and carried out by the Central Bank Governor, who was also
nominated by the president, can be said to be the hallmark of the
president’s economic reforms.

The
reforms, which started mid last year, have seen the exit of about eight
bank chiefs, a bailout package of N620 billion (about $4 billion) and a
declaration of losses by majority of banks who have released their 2009
common year end results, running into billions of naira, but of course,
have achieved better transparency in the books of the banks and the
presentation of more stable banks.

Nigerian IT
distributors won five out of 12 RITA Awards, the first-ever initiative
for African channel partners last week, in a further acknowledgement of
Nigeria’s increasing importance as a world-class IT market.

Three of the
country’s leading resellers of IT products from the African nation took
home the majority of the 12 Redington IT Africa (RITA) Awards, during
RITA’s inaugural event held in Dubai recently.

Nigerian
distributors, Park N Shop, Ajatech Computers Limited, and Systemtech
Services Limited shared between them five of the 12 RITA Awards, after
beating off fierce competition from their counterparts in other African
countries.

Redington Africa is
the leading IT distributor and supply chain systems provider and boasts
of an impressive client portfolio including Acer, Canon, HP, IBM,
Samsung, Toshiba, and Western Digital, among others.

In his address at
the RITA Awards, Raj Shankar, Managing Director for Redington Gulf,
said: “Emerging markets in Africa will continue to drive our expansion
strategy due to the strong demand for quality IT products and economies
keen to implement the most sophisticated solutions.” More than 60
leading channel IT partners from 12 countries from Africa were
represented at the awards function which took place in Dubai.

Redington Gulf,
part of the Bombay Stock Exchange (BSE) listed Redington India Ltd, is
one of the leading and fastest growing IT distributors in the Middle
East and Africa region.

Introduced in 2010,
RITA is a Redington IT Africa initiative to reach, relate, reward and
recognize channel business and performance while allowing vendors to
promote their brands & products.

The Institute of
Brand Management of Nigeria has awarded ‘Milcow’, a milk brand on the
stable of Rofico Limited, as the West Africa’s Finest Quality Milk
Brand. The award was presented to Milcow Milk at The West African
Branding Excellence Awards ceremony which took place at the Lagos
Sheraton Hotel & Towers, Ikeja recently.

According to
Desmond Esorougwe, Technical Committee Chairman/Registrar of the
Institute of Brand Management of Nigeria, Milcow won the award purely
on merit. He also said that a high powered award technical committee
considered nominations from within its fold and views advanced by West
African consumers.

According to him,
the West African Branding Excellence Award is aimed at identifying,
recognizing and rewarding companies that apply branding culture and
brand management best practices to the analysis, planning,
implementation and control, of policies, designed to achieve corporate
objectives in both profit and non-profit organisations in West Africa.

The award was
therefore conferred on few West African companies, brands and
individuals who have made impact on the lives of West African consumers
positively through their innovations, inventions and ideas.

Rofico Limited is a
part of a large group operating in different parts of the world. The
Group has been in existence in Africa for the last four decades apart
from its existence in the Middle East, Europe and other continents of
the world.

Isa Vatsa, Niger
State Commissioner for Water Resources, says the government has spent
N284 million on water pumps to ease the water shortage in Minna and its
environs.

Mr. Vatsa said this in Minna on Friday while speaking to newsmen.

‘’About N284
million was spent by the state government to buy 16 low lift water
pumps for Chanchaga water works to ease the problem of water shortage
in Minna and its environs,’’ he said.

The commissioner said that the pumps would supplement the four water pumps bought by the government earlier in 2010.

He said that
construction works were already on to provide mini water schemes in
Lemu, Kataregi, Madaka, Kuta, Mashegu and Agwara areas. According to
him, each of the water schemes will cost N30 million.

As at today,
Nigerians spend millions of dollars on importation of solar panels and
solar cells. This is because of growing acceptability of solar energy
as an alternative and efficient source of energy. Nigeria is still in
the throes of inadequate power supply problem, which has been a major
bottleneck to industrial development in the country. Small and medium
scale enterprises are being crippled, even as power supply for domestic
consumption is near-absent.

The National Agency
for Science and Engineering Infrastructure, NASENI, is therefore set to
blaze a trail in the local manufacture of solar panels. Before the end
of 2010, the agency promised that there will be locally produced solar
panels in commercial quantities in Nigeria.

Ready to take off

Olusegun Adewoye,
the Director General of NASENI, said in an interview that the
infrastructure required for the take-off of the project is in place.

“So far the agency
has a building in Karshi, Federal Capital Territory, which we have
refurbished for this purpose,” Mr. Adewoye revealed.

“All the equipment
for this has arrived. We imported solar cells from China. Everything
that is supposed to be done is in place: equipment, cells, training
people, and the building. We are waiting for Chinese suppliers of the
equipment to come and install them and after that, they will start.”

He said the plan is
to produce 1000 panels initially. “The idea is to showcase that this
technology can work and that it is profitable. After this, we will have
what is called an investment forum at the plant site,” adding that when
they produce up to 3000 panels for people to see that these things
work, then they will start to sell it.

“We are hoping
that government, represented by NASENI, will not hold more than 25
percent share of this plant. The rest will go to the private sector.
The Chinese are interested. They have offered to buy up to 60 percent
equity in this plant. In order words, it will be private sector driven.
We hope that, in few years time, this plant will start giving money to
government.”

On the take time for the power plant, he said, “If it doesn’t take place by the end of June (2010), I will be surprised.

“It is solar panel,
and whatever solar panels can do anywhere this will do the same thing.
In this room (his office) there are two kinds of power (sources). One
is from my generator, the other is from my solar panel out there. The
light from the solar panel is full and bright and can carry every
electrical appliance.

The only thing is that the solar panel system can last for 20 years, as long as the sun shines and there is light.”

He said that having
seen this work with imported solar panels in most of their institutes,
they are to start producing panels and “we will use locally made panels
to generate electricity in this country” and queried why it has become
impossible to have police telephone on the highways, which will be
powered by solar panel, adding that the Agency will propose to the
police, work with them to have telephones power generation panels. It
can also be used in powering street lights, traffic lights, etc.

Large market for solar panels in Africa

The solar power
plant is going to be the first in Africa. “The one in Kenya is owned by
the Britons and we can never produce enough for the Nigerian market.
There is a huge market for solar energy all over the world and the
demand is rising.

“It will be a
profitable business and by the third year you would have recouped your
investment. When it eventually becomes operational, we will invite the
private sector and give them a workable document, which is our business
plan, so they can subscribe to it. Then a company will be set up as a
subsidiary of NASENI, but run on public private partnership basis. It
will have its own Managing Director, who will be paid industry wages
and its own staff. They will be expected to turn profit to us. The
company would later be quoted on the Nigerian Stock Exchange. The
company will be called NASEMCO Solar. The first leg is what we are
doing now: do a 7.5mega watt plant, next one do a 20 megawatt plant in
the same company.

The next is actually producing solar cells locally.”

However, the
Director General also warned that solar energy is not the cheapest
option, but that the bulk manufacturing of energy is either from water
or from gas or nuclear, and that no society can get away with without
utilising any or all of these sources.

He said solar
remains an alternative, but very useful in off grid areas like riverine
areas, deserts, and rural areas. “It is additional in most societies
and it is not meant to supplant the usual sources of energy,” Mr.
Adewoye added.

Goodbye to power problems

“Currently, 29 out
36 states use solar panels to run their states; at least we got to know
this in our pre-investment study. The market is inexhaustible. These
1000 units is nothing. They will buy them up in no time. So this area
is a growth area that can compete with the IT and telecoms.

“But this plant we are building is to demonstrate that it is
possible to work on it and get profit in using it. It costs money to
own it; that is why in most countries, government subsidises it for the
citizens. Once you get one, you bid power problems good bye for about
20 years. In most cases, you don’t need more than an hour of sunshine a
day in order to charge the batteries properly because the thing goes
from generating voltage to storing them in accumulators. This is a very
good source of power for the Niger Delta area where you find it
difficult to erect PHCN poles and in the deserts.”

The borrowing
community continues to express serious concern about the prevailing
credit crunch and the seeming reluctance of banks to lend. It is argued
that bank managers have become so risk-averse that they would rather
invest in secured short-term securities rather than lending money to
borrowers that are badly in need of financing.

Indeed banks are
accused of looking for every reason not to give loans, which defeats
the primary purpose of their financial intermediation role, the very
reason for their existence.

In 2009, The
Central Bank of Nigeria (CBN) licensed three Credit Bureaux: CRC Credit
Bureau, Credit Registry, and XDL Credit Bureau to enable financial
institutions access information on borrowers.

In the absence of a
robust credit bureau infrastructure, banks relied primarily on
information provided by their customers, which made it possible for
“serial defaulters” to continue to gain access to credit from several
banks simultaneously without full disclosure of their financial
transactions and without the ability or intention to repay.

A credit bureau
collects and collates detailed financial data on individuals and
companies from public sources and lending institutions with whom they
have a borrowing relationship. It then makes this information available
on request to subscribers for the purposes of credit assessment and
scoring. By its very nature, the credit bureau infrastructure should,
as it develops, make the environment more conducive to lending; it
should reduce loan-processing time, enhance informed lending decisions,
and ultimately, reduce the level of non-performing loans.

Banks are more
conscious than ever in ensuring that they grant credit only to those
whom they believe have the intention, and indeed, the capacity to repay
such loans.

Before you consider
applying for a loan, it is important to understand what lenders look
for in arriving at their decision to extend or withhold credit. “The
Three Cs of Credit” – character, capacity and collateral are just some
of the considerations.

Character

Character, is the
most important of the C’s. A borrower of good character will make every
effort to fulfill his or her obligations as they fall due. Creditors
will take into account your current salary, credit history, and current
debt. They will also consider how often you borrow, whether you usually
settle your debt obligations and on time, and whether you live within
your means. Signs of stability such as how long you have lived at your
present address, whether you own or rent your home and the length of
your present employment are also important factors.

From your credit
history, personal background, and borrowing behaviour, a lender may
decide whether you possess the integrity, honesty and reliability to
repay your debts.

Capacity

Capacity refers to
your ability to repay a loan and how much debt you can comfortably
handle. The lender will look to see if you have been working
consistently in a job that is likely to provide enough income to
support your borrowing. Income streams are analysed along with any
other obligations that could interfere with repayment.

For example, if you
are asking for a loan that requires you to make a payment of N200, 000
each month, do you have enough income or assets to make the payment
along with your other monthly obligations?

Lenders use the
debt-to-income ratio to measure how likely you are to repay the loan.
They want to know what your monthly income is and any supplementary
income from bonuses, dividends or rental income. The debt-to-income
ratio is calculated by summing up all your existing monthly debt such
as your rent or mortgage payments, car loan payments, or credit card
payments, including the monthly payment for the item you are trying to
finance. This total number is then divided by your income. Most banks
would be uncomfortable if more than 35 percent to 40 percent of your
income is spent on debt servicing.

Most lenders have
stipulated minimum requirements for loan applications. The more you
earn in a year, the more qualified you are likely to be. But even if
you are a high income earner, if your debts are equally large, lenders
may hesitate to lend you more money.

Collateral

A creditor also
wants to know what collateral or assets you have, other than your
income. This will include your bank accounts, investments such as
stocks, mutual funds, bonds, property, and other assets. An asset-rich
borrower has a better chance of getting a loan as lenders feel more
secure in the fact that such assets can be liquidated should the
borrower fall into any financial difficulty.

There are several
reasons why an application might be declined. If your loan request is
turned down, ask the loan officer what actions you could take to
qualify in the future. Bear in mind that just because one lender turns
down your loan doesn’t mean another lender will do the same. Different
creditors may reach different conclusions based on the same set of
facts. Where one creditor may find you an acceptable risk, another may
adopt a more conservative stance and deny you a loan.

Your borrowing behaviour largely determines your credit worthiness.
Today, there is a great premium placed on this. It is expected that as
the credit bureau infrastructure becomes well established, responsible
borrowers will find it easier to access credit. It is thus important to
build a good credit history and repayment culture, always committing to
honour all your obligations as they fall due.

In primary school,
the playground scene of children contesting ownership of a
lost-and-found item was a familiar one. ‘It’s mine.’ ‘No, it’s mine.’
‘I found it first. Hand it over.’ So it went. Normally, it was easy to
ascertain ownership. A secret marking here, an etched name there, and
that was that. If you really think about it, we lost the economy in
2008. Now it is found, a few grownups with fat cheque books and thin
identities have decided that rather than savour the cooling relief of
an easing economy, they should quarrel over its antecedents.

When the economy
began its downward tilt in 2008, no one owned up to the role they
played in the excesses that spiraled out of control. The bankers,
regulators, stock brokers, portfolio managers, central bankers, and
government officials joined in one accord to say,

“Mea culpa? Not
me.” The crisis, they unanimously concurred, was caused by the
global-this-and-global-that. “It had no local causes and we had no hand
in it,” they chorused.

Then the recovery
started, and the stock market picked up. Suddenly, the worst is over
and the optics far too tempting. Two groups of claimants have now
stepped forward to contest its ownership.

On the one side,
critics of the government’s policy interventions claim that the rescue
efforts, especially those that imposed changes in corporate control,
were done in bad faith as the situation was never as dire as initially
presented. On the other side, supporters of the government’s direct
involvement in corporate management argue that the bounceback is
evidence of the investor confidence that the government has
successfully restored.

I find it amusing
that had the economy never flickered back to life, would both groups
have justifiably excused themselves? While the government’s partisans
would hold it up as proof that the situation was so far gone nothing
could save it, its antagonists would counter-argue that the very act of
intervention panicked investors and transformed amber beeps to scarlet
alarms.

In the past eight
months, these two groups, the Renaissance Professionals and the Vision
For Greater Nigeria (V4GN) have spent several millions running full
page advertorials on the economic results of the government
intervention. While the former have attacked the government’s
intervention in the banking sector as ill-thought out and
counterproductive, the latter has celebrated the Central Bank of
Nigeria’s actions as timely and lifesaving.

Responding to a
statement by the CBN governor that the frothy valuations enjoyed by
many stocks will not return in the near term, the Renaissance
Professionals branded him an ignoramus.

According to the
group, “the performance of stocks since the beginning of the year only
shows that Mallam Sanusi is a doomsday Prophet, prophesying over what
he has limited knowledge of. It is on record that the banking index has
returned 14.3 percent in just three months. . . Even the banks that the
CBN took over . . . have gained an average of 16 percent to 43 percent
in the last three months. . . This trend only shows that Mallam Sanusi
was absolutely wrong when he said that these stocks have no chance of
recovery. It only shows that he knows nothing about how the capital
market works.” (‘Central Bank of Nigeria (CBN) Governor’s Statements:
Showcase of Pedestrian Knowledge’).

Repelling this, the
Vision for Greater Nigeria, asserted that “the stability we are
enjoying now in the financial sector did not just happen. It is the
result of well-thought out monetary policies put in place by the CBN to
achieve its clearly spelt out objectives . . . the emerging conducive
atmosphere engendered by the financial stability achieved over recent
times, especially in the first quarter of 2010, has fuelled steady
growth in both the banking sector and capital market.” (‘Central Bank
of Nigeria Banking Reforms: Stabilising the Financial Sector’).

I may be getting ahead of myself, but maybe V4GN should be renamed the Lamido Sanusi Fan Club.

There is an old
proverb that success has many family members, but failure is an orphan.
At this rate, a DNA test may be in order. To do that, we need blood
samples, not from the disputed child this time, but from the contending
fathers. Wouldn’t it be nice if the Renaissance Professionals and
Vision for Greater Nigeria appear on TV for a public debate to set the
record straight? These two paragons of opacity, whose only contacts are
mobile phone numbers and email addresses, should forget who the
recovery’s daddy is. What I want to know is who their own sugar daddies
are. I suspect they will be hiding their birth certificates for a long
time to come. Legitimate children do not conceal the circumstance of
their birth.

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

The
death of President Umaru Musa Yar’Adua will usher in stability to the
nation’s economy, some finance analysts and capital market operators
said on Thursday in Lagos.

Martin
Oluba, a professor of economics and President of ValueFronteira
Limited, a consulting firm, said Mr. Yar’Adua’s demise “may not really
make any additional impact” on the economy apart from stabilising the
system which the new president, Goodluck Jonathan, has been trying to
achieve while acting as president.

“I
think people in business, before now, have come to terms with the
reality of Yar’Adua’s inexistence within the system,” Mr. Oluba said.

“People
have since seen Jonathan as the man in charge. The only thing that has
happened now is that it has concretized the fact that those who had
tried to create some disequilibrium or frictions within the system can
now go and rest permanently and leave the current government to achieve
some stability in the polity,” Mr. Oluba said.

More positive impact

On
the reaction of the capital market to his death, Mr. Oluba said, “I
think we would expect some more positive impact at the capital market
because the distractions faced by the current government would have
been put to an end. People will have more confidence in the market
because we are not going to expect any change again.” He added that a
lot of things depend on expectations.

“We
are not going to expect now that Yar’Adua’s wife is going to create
problems when it comes to getting a new president as we approach 2011.
We are not going to expect again that some people who are allies of
Yar’Adua and had been very loyal to him would come back and begin to
forment trouble. His death actually put to an end to such ripples that
would have come from that quarter,” said the economist.

On
the crisis that may erupt in the appointment of the nation’s vice
president, Mr. Oluba said, “I don’t think there is going to be much of
a problem if the president appoints who will be his vice. Troubles can
only evolve if he appoints a candidate that is not very acceptable to
the people.”

Greater stability

Also
commenting, Rasheed Ola Yussuff, chief executive officer of Trust
Yields Securities Limited, said the economy will soon start to reflect
the new development.

“I believe the capital market will also start reacting from tomorrow (Friday),” Mr. Yussuff said.

“The
man has been ill for quite some time and there is this uncertainty in
the economy, but now that God has put finality to it, hopefully that
will bring some stability,” said Mr. Yussuff, who is also the chairman
of the Association of Stockbroking Houses of Nigeria.

Tunde
Oladapo-Dixon, chief executive officer, StockPicks Consulting, another
stock broking firm, said President Goodluck Jonathan now has the power
to act fully. Nigerians should see, in the economy, more actions from
the presidency and activities in the ongoing reforms in all sectors.

“Those
actions in the long run will affect the capital market because the
psychology of investors would have change to the fact that this is a
new era. Very soon everybody will want to be a major player in the
market,” he said.

Meanwhile,
Sola Oni, the spokesperson of the Nigerian Stock Exchange, said trading
activities will resume today at the Exchange after its operators
“complied with the public holiday declared on Thursday by the federal
government as corporate citizens.” The late president remains the only
Nigerian president who had visited the nation’s stock Exchange. He
visited the NSE on 7 November, 2007, barely six months in office.

The announcement on
23 April 2010 by Greece’s Prime Minister, George Papandreou, that his
country would draw on emergency aid from the IMF and the EU confirmed
fears about the toxicity of that country’s sovereign liquidity, and
solvency issues.

The subsequent
downgrade by Standard & Poor’s, a rating agency, of Spain’s
sovereign debts reinforced concerns that one consequence of Greece’s
incontinence might be what the IMF referred to in its April 2010 Global
Financial Stability Report (GFSR), as “a full blown and contagious
sovereign debt crisis”. Together with the EU (contributing €30 million
into the rescue fund), the Fund is expected to provide €15 million to
help the Greeks deal with the output-depressing effects of a budget
deficit clearly in excess of 15% of GDP.

The derision with
which the Greek government’s decision was greeted in certain quarters
in Greece was understandable when you remember that until recently, the
IMF was perceived in certain quarters, especially outside that country,
as a tool in the hands of imperialists and allied colonialists bent on
keeping Africa and Africans in perpetual bondage. Within the context of
the “Cold War”, this made plenty of sense. Africa is (still) home to
some of the most important mineral deposits in the world, and Western
strategists and their spooks would have been loath to have these fall
under what was then the Soviet sphere of influence. The Mobutu Sese
Sekos and Jean Bedel Bokassas were thus no accidents. Their buffoonery
was okay, so long as it guaranteed Western access to their countries’
primary resources. This was in the sixties and seventies.

Much later,
conspiracy theorists in this country, baffled by the domestic economic
crawl, and aware more than most of the tremendous potential of this
country, approached the 1980s debate over accessing the Fund’s bridging
facilities in the knowledge that it could not be a good thing. After
all, the same Western economists behind the Fund had persuaded
successive governments in the country to borrow massively against our
crude oil earnings. The heavy hand of the West was evident once again;
its agents and privies scarcely concealed themselves, and the IMF’s
nostrums were the blunt instrument with which we were to be bludgeoned
financially. In the end, this economy made the painful transition from
being under-borrowed to debt peonage, without anything to show for it,
besides the fat Swiss accounts of our leaders – elected and usurpers.
To the argument that the country was mismanaged by its indigenous
rulers, you got told that these were “comprador bourgeoisie” in cahoots
with “Western imperial circles”. Somehow, for “western imperial
circles”, Africa, and not Asia, had to be restrained from developing if
the global balance of forces was not to be disturbed. So while South
Korea, Taiwan, Malaysia, Singapore, Chile, etc. all under the heavy
hand of the West, saw material increases in net welfare, Nigeria, and
places like Indonesia saw a sad reversal of fortunes.

Cleaving to this
logic, what are we to make of Greece and its recourse to the IMF’s
bridging loan? Clearly, the Fund cannot mean thereby to under-develop
the Greek economy? The Greeks are not just Caucasians. Theirs is the
cradle of much of the West’s intellectual heritage. Unfortunately, they
share some bad habits in common with some of our best leaders on the
continent. Over the years, Greece has spent its way into trouble. Not
just spending more than it earned, but spending unsustainably. Sadly,
the €45 billion loan package might just help repay some of Greece’s due
debt, and finance its budget deficit until December.

Over the
medium-term, Greece will have to restructure: cut down on spending and
find ways of increasing its revenue stream without hampering the
outlook for output. The people will have to bear much of the cost of
any such adjustments.

Governments will
struggle to remain popular, as they define growth paths that take full
cognisance of the need to meet debt obligations as they fall due. The
IMF will of course insist on Greece meeting all its debt obligations,
and pursuing policies that place public financing on a sustainable
basis. There will be much pain, but it would not have been caused by
the Fund, or by its strong medicine. It would, instead, as with us, be
the result of inept rule by past governments in Greece.