Nigeria Content Online

The
federal government anticipates an average of $18billion (about
N2.7trillion) as savings from its total annual budget for the nation’s
oil and gas industry as a result of the Nigerian Content Law.

At
the formal unveiling of the new law to industry operators yesterday in
Abuja, Dieziani Alison-Madueke, Minister of Petroleum Resources, said,
coming more than 50 years since the commencement of oil and gas
operations in the country, the law will serve as “major enabler for
building the relevant capacities that will guarantee the long survival
of the industry”.

The
Nigerian Content Act was initiated in February 2005 to give legal teeth
to government’s aspiration to ensure that about 70 percent of the
nation’s oil and gas operations are domiciled in-country, to boost the
sector’s contribution to the gross domestic product (GDP).

Mrs.
Madueke, who described the Act as a “significant milestone”, said all
operators and service companies in the industry are henceforth required
to comply with the designated scope of work performance spelt out in
the law signed last week by Acting President Goodluck Jonathan.

Scope of work

The
work scope spells out about 23 domiciliation guidelines covering
engineering design, fabrication and construction as well as material
and procurement services to be provided by local firms to facilitate
the achievement of government’s target of 70 percent of local content
by 2010.

Besides,
the Act guarantees access to prospective foreign investors in the
industry; provides privileges for indigenous companies as well as
creates employment and training opportunities for Nigerians.

Acknowledging
similar requirements in other oil producing nations like Brazil,
Venezuela, Kazakhstan, Qatar, Malaysia, Indonesia and Norway, which
have local content development models, the minister said this will give
special attention to indigenous participation in the industry,
facilitate technology transfer and drive linkages to other sectors of
the national economic development.

“In
the past, to address local content, over 90 percent of all goods and
services used in the industry were actually imported from overseas,”
she said, pointing out that despite government’s continuous investments
of resources, the impact from the industry on the wellbeing of the
people is still not at par with international benchmarks.

Implementation

Mrs.
Alison-Madueke noted that the implementation of the Act, will be a
major investment opportunity for local and international investors that
will benefit from the commercial incentives it guarantees.

“It
will certainly create employment for our teeming youths in the Niger
Delta and other parts of the country as well as set the template for
expanding the concept into other sectors of the economy,” she said,
adding that the unveiling of the new law, marks the formal kick off of
the new implementation framework, beginning with the creation of a
Nigerian Content Development and Monitoring Board (NCDMB) charged with
the responsibility of regulation of all Nigerian Content activities.

Ernest
Nwapa, the Group General Manager, Nigerian Content Division of the
Nigerian National Petroleum Corporation (NNPC), was appointed the
acting executive secretary of the board.

Responding,
Mr. Nwapa acknowledged the tremendous progress recorded since 2003 in
government’s effort to promote local content in the industry through
collaboration approach of domiciliation, saying that if government does
not sustain the momentum in the pursuit of the policy, it risks going
back to the pre-2003 era.

He
said that prior to the introduction of the policy, the industry was
faced with the challenge of low capacity, resulting in the importation
of virtually all goods and services used by the operators, saying that
currently the country accounts for 35 percent.

The target

“The
target is to quickly focus on those capacity-enhancing issues that have
kept us from making the gigantic strides necessary to achieve the 70
percent target by government,” he said. “We need to focus on the
development of the nation’s shipyards, heavy industries, pipelines,
equipment manufacturing, local service training institutes, vessel
ownership, research and development to attract international service
companies to set up and do business in-country.”

Also
speaking, Shehu Ladan, NNPC’s Group Managing Director, said with the
new law, which defines and delineates the role and responsibilities of
institutions Nigerian Content Board, the corporation is committed to
operating like other oil companies, with a focus on the integration of
the law into its corporate business and operational strategy.

“The number one
benefit of information technology is that it empowers people to do what
they want to do. It lets people be creative. It lets people be
productive. It lets people learn things they didn’t think they could
learn before, and so in a sense it is all about potential” – Steve
Ballmer (Microsoft Plc)

“Information
technology and business are becoming inextricably interwoven. I don’t
think anybody can talk meaningfully about one without the talking about
the other” – Bill Gates (Microsoft Plc).

Let us analyse both
quotes above from two individuals who have contributed immensely to the
current information technology revolution in our time.

With the advent of
the personal computer, smart phones (including blackberry phones) and
the internet especially; the way we work, study, communicate,
collaborate, and even the way we live over the last 20 years has
witnessed a metamorphosis of incredible dimensions or magnitude.

Information technology strategy

As a matter of
urgency, It is very crucial that developing countries such as Nigeria
clearly invest in creating and implementing an effective information
technology strategy that would cover the following;

>>Provide ICT
centres equipped with computers that have high speed internet
connectivity across all primary, post primary and all tertiary
institutions across the country.

>> There must be at least one computer system in use for every 7 pupils or students.

>> Implement a basic computer literacy curriculum across the whole educational system.

>> Provide suitable scholarships to individuals who excel in the area of ICT across primary and post primary institutions.

>> Provide
exchange programmes that will allow deserving students and pupils in
Nigeria to visit other countries and gain further knowledge.

>> At
University level, specifically for computer science and IT
undergraduates seek to revamp their existing curriculum to provide them
with better hands on experience.

>> Provide
ICT training centres which will provide free of charge (or at
discounted rates) to civil servants, business owners and other private
sector workers specific training to cover basic computer literacy in
Microsoft Word, Excel, PowerPoint, and Microsoft Project etc

>> Make
available discounted computer systems for individuals to purchase and
pay for it in instalments from their salaries or regular income.

Investing in
producing a more computer literate workforce is absolutely crucial and
will assist in raising productivity, efficiency, provide better for
value for money in the products and services available to us as a
society.

Partnership

The government
should work in partnership with Internet Service Providers (ISP’s),
provide them with incentives (implementing the relevant policies) to
encourage and assist them in providing fast, cheap and reliable
internet access to the public.

In addition the
state needs to own and run its own ISP as an efficient concern to
further assist in providing the required competition.

This might all seem
like a long shopping list but we can certainly afford it based on our
sizeable oil revenue over the years and it is very crucial indeed, if
we are to partake and not be left behind in the current geometric
progression of information technology.

We need to equip
our society with the basic computer literacy skills to ensure that even
the electronics dealer in Alaba Market (Lagos) or the recharge card
seller in Uyo (Akwa Ibom State) has basic skills to capture their
profit and loss or their daily sales or stock inventory in a simple
spreadsheet.

In capturing such
data even on a small scale as advocated, buying patterns and trends can
easily be established assisting such Small and Medium Sized Enterprises
(SME), in providing a more competitive, effective, and responsive
service to their customers which will make for an all round better
consumer experience.

Information
technology can enhance our everyday life experiences; from ensuring
that a complete comprehensive health record of every individual is held
electronically and is easily retrievable when required, to being able
to track and audit products that we purchase on a daily basis
(especially when the product malfunctions or there is a need to recall
such a product for whatever reason) and the list goes on and on.

We must seek to use
information technology to improve our standard of living as a whole, as
an aid to education, better healthcare, in the provision of goods and
services in general. We must use IT to improve all aspects of our daily
life and fully automate processes in our society to include vehicle
registration/licensing, personal and investment banking, personal
identification & validation, computerised land registration,
provision of utility services, implement directional – navigational GPS
systems and even in entertainment etc.

In a nutshell we can use IT to improve our everyday lives and ultimately assist in raising our overall life expectancy etc.

As Nicholas
Negroponte (a professor at MIT – founder of the one Laptop per child
scheme) rightly puts it “Computing is not about computers any more; It
is about living”.

The writer is an international IT and Business Process Consultant.

Niger’s food crisis
is already worse than the last emergency in 2005 but the West African
nation is better prepared to face it, in part due to better government
cooperation, the U.N. aid chief said.

John Holmes was
speaking on Wednesday at the end of a trip to uranium-producing Niger,
where at least 7.8 million people, or nearly 60 percent of the
population, will be threatened with severe food shortages this year.

“My impression is
that (the food crisis) is worse but the good thing is that the alarm is
sounded earlier and we are better prepared than in 2005,” Mr. Holmes
told Reuters.

In 2005, President
Mamadou Tandja played down the significance of the crisis until media
reporting on the scale of the hunger made his position untenable.

Abubakar Mohammed,
Minister of Tourism, Culture and National Orientation, on Wednesday
urged the National Council for Arts and Culture (NCAC) to engage in
activities that could generate revenue. The minister, who gave the
charge in Abuja while on an official visit to the council, urged the
management to evolve self sustaining festivals.

“If you explore
festivals and expositions that can generate funds for the council, it
will assist you in accomplishing your mandate. The legal unit of the
ministry is looking into the laws establishing parastatals and agencies
that are under the ministry for proper review of the laws,’’ he said.

The Pipelines and
Products Marketing Company (PPMC), has raised an alarm over the
increased activities of vandals on its pipe lines in Cross River.

Alex Oghogho,
Acting Depot Manager at the NNPC Depot in Calabar, made the disclosure
on Wednesday in Calabar when media professionals visited the depot.

He said the depot
had lost many pipelines in the state through the activities of vandals,
assuring members of the public of steady supply of petroleum products
in the state.

According to him,
mobile police men and other security agents have been drafted to the
depot to secure the five kilometres pipe line. He appealed to members
of the public to assist the company in protecting the pipe lines
against vandals in the interest of Nigerians at large.

The Katsina State Government has spent more than seven billion naira on agricultural development between 2007 and the present.

The state
commissioner for Agriculture and Natural Resources, Sani Fago, stated
this on Wednesday in Katsina at an interactive session with the Peer
Review team of the Nigeria Governors` Forum (NGF) Secretariat.

Mr. Fago said that
the money was spent on the procurement and distribution of fertiliser,
irrigation activities, livestock services, counterpart funding for
Fadama projects, seed production and the resuscitation of extension
service centres.

He said that it was
also used for forestry activities, the purchase of grains for buffer
stock, Agricultural Service Guarantee Scheme and the vaccination of
livestock.

Diamond
Bank Plc yesterday released its 2009 common year results, revealing a
loss before tax of N12.4 billion for the period, owing to large one-off
provisions, compared to profit before tax of N17.3 billion for the
comparable prior year period (December 2008).

Emeka
Onwuka, Managing Director of Diamond Bank, while commenting on the
results in a report made available to NEXT, said the period under
review has been challenging for the entire Nigerian banking sector.

“Diamond
Bank’s results before exceptional provisions have proved resilient in
the face of these challenging conditions, with the group continuing to
grow deposits at a sensible rate and with operating income holding up
well. However, our profits have been impacted by large one-off
provisions which we have provided for in accordance with the CBN’s
guidelines for the period,” he said.

Loss before Tax

While
the bank’s loss before tax was N12.4 billion, its after tax losses were
put at N8.2 billion during the period in review. Provision for losses
was valued at N24.7 billion, far above the N1 billion provisioned in
December 2008.

A
gross earning of N67.7 billion was also below 2008 records of N67.8
billion. But its net interest during the period rose by one per cent
from N25.6 billion to N25.8 billion year on year.

Also
commenting on the results, Uzoma Dozie, Executive Director, Corporate
Banking, said the drop in profitability was the significant rise in
provisions. “The challenge ahead is to reduce our NPL concentration and
to grow our risk assets in a slower growth environment than before,
while complying with our new risk management framework.

Access Bank too

Similarly,
Access Bank’s year end common results for December 31, 2009 showed a
loss before tax of N3.5 billion, even as it issued a bonus of one for
every 10 shares held.

Aigboje
Aig-Imoukhuede, the bank’s Chief Executive Officer, in a report made
available to NEXT, said the bank’s nine-month financial year “coincided
with a tumultuous period for the Nigerian banking sector, accounting
for the bank’s performance. Our earnings were impacted by the necessity
for large exceptional provisions which we were unable to absorb fully
in the nine-month period.

“Notwithstanding
the resulting net loss, we closed the year in a very strong financial
position, with levels of capital and liquidity far higher than required
by both local and global standards. We have made tremendous progress in
reducing our levels of classified loans and are confident that our
strengthened risk management framework will ensure earning resilience
to any future stress factors,” he added.

Gross earnings stood at N66.1 billion with exceptional provisions of N21.5 billion and recoveries at N14 billion.

Obeahon
Ohiweri, Executive Director, Commercial Banking, said the growth in the
bank’s gross earnings, combined with a reduction in its operating
expenses meant it delivered positive operating profitability in a year
marked by rising cost of funds and heightened credit risk.

“Our
one bank strategy helped us gain market share across geographies and as
our new branches began to gain momentum in 2009, collections of lower
cost deposits accelerated. We are also delighted that our efforts to
recover non-performing loans (NPLs) produced a significant improvement
in asset quality in the last quarter of 2009.”

Going forward

Ebenezer
Olufowose, Access Bank’s Executive Director, Investment Banking, noted
that despite the underwriting losses, “Going forward, we intend to
focus on the emerging opportunities in project and debt finance markets.

Victor
Etoukwu, General Manager, Retail Banking, said the bank will make
significant marketing investment in its savings products and card
services that should emerge as leaders in its extensive product range.

Diamond
Bank’s Mr. Onwuka, however, believes that all hope is not lost on the
bank. “We have taken substantive measures to improve our risk
management and this is borne out by a substantial reduction in our
provisions post year-end, and a return to profitability which is
reflected in our Quarter One (Q1) results.

The Nigerian
Communications Commission (NCC) and telecom operators have expressed
optimism over the commencement of the Sim card registration from May 1.

In a telephone
interview with NEXT, Reuben Muoka the spokesperson for the commission
said, “Any new sim card bought subsequently from May 1, 2010 must be
registered for life.”

The commission
announced in December that the sim card registration is part of efforts
to curb crime in the country, but the exercise will, however, begin
with new sim cards purchased by new subscribers.

Mr. Muoka explained
that the registration will be done online, adding that “operators are
expected to put all machinery in motion for the commencement of the
process. We suspect that they will sell what is called partially
activated lines, whereby, you may get a line but can only receive calls
or Short Message Service (SMS) but not able to make calls or send
texts. So, you must now go to a particular place where you will have
your sim registered before you can begin to enjoy these services,” said
Mr. Muoka.

MTN is ready

In an email
response to NEXT, Funmilayo Omogbenigun, the General Manager,
Communications, MTN Nigeria said, “Yes, MTN Nigeria is ready to
commence its Sim cards registration come May 1, 2010. We have installed
equipment that captures bio-metric and demographic data.”

Ms. Omogbenigun noted that the registration exercise will not affect the prices of Sim cards in the market.

Registration requirements

However, there are some basic requirements from new subscribers to ensure a successful exercise.

Visafone Nigeria
explained, “We need to capture subscriber’s name, phone number,
address, digital photo and biometrics (thumb & index finger print).
These are the specific requirements needed from the subscriber at no
cost to ensure the smooth flow of the process.”

Existing subscribers

The Communications
Commission, the industry regulator said it will handle the registration
of the active subscribers sims estimated in excess of 70 million, even
as it has not yet decided on the commencement date.

“We hope to start
within the next three months. The duration for the process will depend
on when we start, because we need to review when we begin and know what
kind of deadline is appropriate in this circumstance,” said Mr. Muoka.

Price Cap

Ahead of the Sim
card registration, the commission has also announced the introduction
of a price cap system for the benefit of subscribers.

Stephen Bello, the
acting vice chairman of the commission, in a recent statement said, the
regulator has developed a policy of price cap regulation, “where we
give a price and the competition can make you to operate within this
degree of freedom, but not beyond it.”

He argued that the
measure became necessary to forestall a situation in which operators
may “cooperate and try to maximize their profit”.

“Now we know for a
fact that the number of lines has increased, there is economy of scale
and you know that as you have advantages of economy of scale the unit
price comes down. We believe that the competition in the industry will
control prices,” added Mr. Bello.

Mr. Muoka
expantiated, “In order to make tariff to come down further just as the
interconnect rate came down last year, the expectation is that the
retail price will also come down. In order to actually make it happen,
we put a price cap that is, a price at which no operator will charge
above.”

He, however said
the price cap has not yet been determined, as such a judgment will be
based on “the market situation, what the competition is, the
interconnect rate and say no operators can charge above a certain
amount. We are going to review it, get more data from the operators
about their current rate and also do this in other services like SMS
etc., before implementing.”

The Minister of
Science and Technology, Mohammed Ka’oje Abubakar, tasks two agencies in
the ministry to exploit the possibilities of the local production of
solar cells and solar panels as key to solar energy supply.

The Minister who
said this when he visited the Sheda Science and Technology Complex,
Kwali and the National Agency for Science and Engineering
Infrastructure, Idu , both in Abuja, lamented that the agencies are not
proactive in research and development, which has potential for
commercialisation.

“There are some
good research works carried out by the technology complex, some of them
are ongoing and all of them have potential for commercialisation. But
unfortunately, very little commercialisation of these works have taken
place,” he said.

Solar cells and panels

In line with the
commercialisation efforts, the minister charged the complex to produce
solar cells in the laboratory. “You have all it takes to produce solar
cells. You have all the machines and the testing equipment for
production of solar cells. I am sure you will understand that solar
cell is critical to solar energy generation. This is your major
challenge now, to produce solar cells for the benefit of Nigerians.”

He said their
production will be complemented by the efforts of the engineering
infrastructure agency, which he said already produces solar panels,
adding that the agency has the requisite technical and human capacities
to execute the project.

Thomas Oberafo, the
Director General of the technology complex, said the agency is
determined “to use science and technology to contribute to the
development of our country.”

Anthony Oberafo,
Director of Physics Advanced Laboratory, disclosed that they have
produced samples of solar cells, adding that “what is left is to
improve on the efficiencies of these samples and once we are satisfied,
we try to work on the economics then bring in entrepreneurs who will do
the mass production,” adding that Nigerians will have solar cells in
commercial quantities by 2012.

The laboratory boss
argued that “depending on fossil fuel alone for energy is not too good.
For now, they may be sufficient because we have them all over the place
but eventually it will be a scarce resource. But the sun is there
forever. The percentage of energy mix attributable to solar is very low
all over the world but it is going to go up when people are able to
produce cheaper solar cells.”

Also, Olusegun
Adewoye, Director General of the engineering infrastructure hinted that
the agency will commence the production of solar panels in the third
quarter of 2010. “The building is ready, the equipment have been
imported and the human capacity is built. We are only waiting for the
Chinese contractors to install the equipment so that production can
start.”

European stocks
rose modestly and the euro halted its decline Thursday, a day after the
International Monetary Fund promised to increase the 45 billion-euro
aid package for Greece to as much as 120 billion euros over three years
to quell the fund’s biggest crisis since the Asian woes of 1997.

The fund is racing
to conclude an agreement for more painful austerity measures from
Greece by Monday, clearing the way for the government to receive
funding and reassuring investors worldwide that European debt is safe.
On Wednesday, Dominique Strauss-Kahn, the I.M.F.’s forceful managing
director, made the higher aid pledge in a private meeting with German
legislators. The package would be the equivalent of up to $160 billion
and would come from both the I.M.F. and from other countries using the
euro.

But as has
frequently been the case during Europe’s debt crisis, the promise of
help was overshadowed by more disturbing news – in this case a cut in
the debt rating of Spain by a major agency just a day after downgrades
for Portugal and Greece.

The growing fear is
that the fallout from Greece and even Portugal – which together compose
just 5 percent of European economic activity – could be a mere sideshow
if Spain, with its much larger economy, has difficulty repaying its
debt.

In European morning
trading, the euro was at $1.3237, up slightly from $1.3220 late
Wednesday in New York. The Euro Stoxx 50 index, a barometer of
euro-zone blue chips, rose 0.8 per cent, and the FTSE-100 index in
London rose 0.5 per cent.

Trading in U.S.
index futures suggested Wall Street stocks would open slightly higher,
after the Dow Jones industrial average rose 53 points Wednesday to
close at 11,045.27.

Most major Asian
markets fell, with both the Hang Seng index in Hong Kong and the
S&P/ASX 200 index in Sydney dropping 0.8 per cent. Tokyo markets
were closed for a holiday.

In many ways, the
current troubles in Europe go to the heart of the fund’s new mission to
serve as a firewall in the financial crisis – an objective that was
bolstered by $750 billion in fresh capital from Group of 20 countries
last year.

Unlike its previous
efforts in smaller, emerging economies in Asia in 1997, and more
recently in Hungary, Romania, Latvia and Iceland, the fund has been
hamstrung in its efforts to act quickly and decisively by political
concerns within the European Union, which insists on assuming a leading
role.

“It is a problem,”
said Alessandro Leipold, a former acting director of the I.M.F.’s
European department. “It should not be that difficult – they did it in
Hungary and Latvia. But the egos are different in industrialized
countries.”

A stitch in time

A case can be made
that if Greece had sought help from the fund late last year after the
forecast for its budget deficit doubled, the amount of support needed
to reassure investors would have been much less than the 120 billion
euros that even now might not be enough.

In that vein, Mr.
Leipold said Portugal and Spain should ignore any stigma associated
with an I.M.F. program and make the case to the European Commission in
Brussels that asking proactively now for aid would soothe skeptical
markets and save Europe billions in the future.

“The market has seen its worst fears come true,” he said. “What it needs is a surprise on the upside.”

Concerns have
already surfaced in Congress that the broad demands of the sovereign
debt crisis will quickly exhaust the I.M.F.’s reserves and leave the
United States, the fund’s largest shareholder, with the bill.

Representative Mark
Kirk, a Republican from Illinois, said such a drain could occur if
Portugal, Ireland and Spain sought I.M.F. aid at the same time. Mr.
Kirk worked at the World Bank during the 1982 debt crisis in Mexico,
which came close to depleting the fund’s reserves.

“We have seen this movie before,” he said. “Spain is five times as big as Greece – that would mean a package of 500 billion.”

Mr. Kirk sits on
the House Appropriations Committee that oversees I.M.F. funds and said
that he had already asked for hearings on the fund’s ability to handle
a European collapse.

In Athens, the
Greek government had no choice but to seek an I.M.F. solution after its
costs of borrowing skyrocketed, but that has not made the negotiations
for aid any easier.

The fund has sent
one its most senior staff members, Poul Thomsen, who has overseen
complex fund negotiations in Iceland and Russia, to assist Bob Traa,
the official responsible for Greece, to work out a solution.

According to people
who have been briefed on the talks, the aim is to secure from Greece a
letter of intent for even deeper budget cuts than the tough measures
imposed so far, like reductions in civil service pay, in exchange for
emergency funds.

With Greece now
shut out of the debt markets, it has little leverage to resist –
especially in light of the 8 billion euros it needs to repay
bondholders on May 19. Analysts expect a deal by next week at the
latest.