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Anyone wanting to
understand the interest generated by the harmonised version of the 2011
appropriation bill recently passed by both houses of the National
Assembly will do well not to look too hard at the numbers.

Until we
comprehensively reform the framework for managing public expenditure in
the country, budget numbers would not be worth the fancy paper on which
they are written. Notwithstanding, the numbers in question tell quite a
story.

The executive bill
for this year’s appropriations, which went to the National Assembly,
was for N4.2tn. At N4.9tn, the National Assembly’s appropriation bill
thus represents a 17 per cent increase on the version sent in by the
executive.

In addition, the
N1.3tn deficit included in the National Assembly’s bill is equivalent
to 4.3 per cent of the economy’s total output. Against this, the fiscal
responsibility act recommends a 3 per cent limit on the annual budget
deficit as a share of GDP.

Consider, however,
that in the period between when the executive sent the appropriations
bill to the National Assembly, and when the latter agreed on the
harmonised version, the price of the major financial driver of our
national budget, hydrocarbon exports, had moved from around US$85 per
barrel (pb) to a little under US$120pb.

With the crisis in
the Middle East and North African region expected to dominate the oil
price outlook all through this year, crude oil prices should remain
elevated well into the first quarter of 2012. Therefore, there is
enough on the revenue side to support higher public spending figures.

Running on this
argument, the harmonised version of the 2011 appropriations bill pushed
the oil price benchmark for the budget up from the US$65pb with which
the executive made its calculations to a more robust US$75pb.

Then, there is the
huge public infrastructure problem with which a country that has the
development rhetoric spot-on must contend with. I do not believe that
the new consensus around the public-private partnership (PPP), being
the new route to plugging the nation’s infrastructure hole, absolves
government of further spending in this regard.

Even if one
concedes that the burden of national provision of physical
infrastructure is now private, that still leaves us with the need to
meet the generally accepted indicative ratios for public spending on
health and education, if the millennium development goals are to make
any sense. Even the much talked about transition in the role of the
public sector from service provider to regulator has to be funded.

Then there are the
gaps in social infrastructure with which we have had to contend. The
rot here is no less severe than with our roads, railways, etc. Except
of course the intent ultimately is to add the police and the judiciary
to the PPP framework, the spending needed over the medium-term to bring
the criminal justice system up to scratch is large, and would come
entirely from the public budget. We could do with a police force with
fewer officers, but a lot more technology. The judiciary too would
benefit from having at least a functioning and networked personal
computer in every courtroom in the country.

On this reasoning,
if we are to spend money on these as part of our development
aspirations, why does the finance minister think the harmonised version
of the 2011 appropriations bill “un-implementable”? Certainly, not
solely because a budget on this basis is likely to be expansionary or
inflationary.

To begin with, the
original bill sent by the president to the National Assembly also
included its own deficit: equivalent to 3.6 per cent of GDP. So, it is
not just the fact of a deficit that flaws the National Assembly’s
spending argument.

Admittedly, the one
deficit is larger than the other, but at what point is a deficit
expansionary, or capable of driving inflation pressures? At 3.0 per
cent, 3.6 per cent or 4.3 per cent of GDP?

Evidently, in
cavilling at the budget numbers that have come out of the National
Assembly, government’s number crunchers are splitting hairs.

More so, this is a
government whose budget figures for last year represented a 50 per
cent-plus increase on the 2009 appropriations, notwithstanding the fact
that the deficit for last year was anywhere between 5 per cent and 6
per cent of GDP.

It is obvious that
we must look for more sophisticated reasons to object to the National
Assembly’s version of the appropriation bill.

The new chief
executive officer (CEO) of the Nigerian Stock Exchange (NSE), Oscar
Onyema, said his agenda for the market will soon be unveiled to the
public.

Mr. Onyema, 43, who
assumed office officially yesterday, as the fourth CEO of the NSE, told
NEXT that he has developmental plans for the market but “will soon
address the general public” on his various plans.

The new CEO opened
business activities at the trading floor on Monday by ringing the
opening bell, he then proceeded to have a closed-door meeting with the
management and staff of the Exchange.

Sam Ailenbuade,
deputy general manager and head of operations, Foresight Securities
& Investment Limited, a stockbroking firm, said he expects Mr.
Onyema’s agenda for the market to “bring positive changes.” “Looking at
his age, he is a young man. So we expect positive changes; nothing more
nothing less,” Mr. Ailenbuade said.

Brief from meeting

Meanwhile, Wole
Tokede, the NSE’s spokesperson, in a statement, said Mr. Onyema, at the
maiden staff meeting, “charged them to rededicate themselves to work in
order to build an Exchange that would be a pride of all.” “He praised
the efforts of the interim administration led by Emmanuel Ikazoboh for
doing a good job at repositioning the Exchange and laying a solid
foundation to build upon. He told the staff members that what was left
for them was to take The Exchange to the next level, and promised that
productivity, hard work and dedication to duty would be rewarded,” the
statement said.

Mr. Ikazoboh, who
will still continue to carry out his activities in the market as
directed by the Securities and Exchange Commission (SEC), explained at
the meeting that the executive management of the Exchange would be
complete when the executive director, listing directorate, as well as
that of market operations and information technology, resume.

Mr. Onyema joined
the NSE from the American Stock Exchange, where he was a senior vice
president and chief administrative officer. He is currently a council
member of Gerson Lehrman Group, a marketplace for expertise.

Meanwhile, the
sacked director general of the NSE, Ndi Okereke-Onyiuke, is still in
court challenging her “unlawful removal” from office.

The Federal High Court in Lagos on Monday adjourned judgment on the suit she filed till April 15 for arguments.

Transcorp’s case

The management of
Transnational Corporation of Nigeria (Transcorp) has written an
objection letter to the Stock Exchange over the recent volume movements
in its shares traded last week.

The letter read in part that “a total of 2.51 billion units of
Transcorp shares representing 10 percent of the company’s issued share
capital were traded in a single day. The board of directors and
management of the company have expressed shock at how such a
transaction was approved by the Stock Exchange without information to
and consent of shareholders and the company.” The company said a
transaction showing more than a five per cent interest in the shares of
the company should ethically (as provided by trading rules) have been
disclosed to the company and the SEC, “but this was not done in this
case.” Transcorp has, therefore, requested that due process and the
provisions of law be followed.

South Africa’s new
vehicle sales rose by 22.8 percent year-on-year in March to 53,478
units, the National Association of Automobile Manufacturers (NAAMSA)
said on Monday.

When sales from
Associated Motor Holdings and Amalgamated Automobile Distributors —
which report separately — are stripped out, sales increased by 24.9
percent to 47,747 vehicles compared with March last year, NAAMSA said.

Zambia’s
Copperbelt Energy Corp. Ltd (CEC) and Liquid Telecom of Mauritius on
Monday announced a joint venture company that will provide
telecommunication services in Zambia. CEC and Liquid Telecom will each
own 50 percent of the venture, to be called CEC Liquid
Telecommunications Ltd. The company will provide wholesale fibre optic
Internet services. “The transaction has been approved by the boards of
both companies,” a statement said. CEC, the largest supplier of power
to mines in Zambia, Africa’s top copper producer, owns and operates 540
km (335 miles) of optic fibre on power lines and 250 km in trenches.

The Uganda shilling
continued its recent resurgence on Monday, expanding its gains against
the dollar, and traders said the unit would be strong against the U.S.
currency due to lackluster greenback demand.

Commercial banks in Kampala exchanged the shilling at 2,380/2,385 against the dollar, up from Friday’s close of 2,383/2,388.

“We have weak
demand in the market and liquidity (for the shilling) is also tight and
these are both energising the shilling,” said Faisal Bukenya, head of
market making at Barclays Bank, Uganda.

The local currency
has been resilient against the greenback since UK explorer, Tullow Oil,
announced that it had sold two thirds of its exploration properties in
Uganda.

The south-west zone
of Independent Petroleum Marketers Association of Nigeria (IPMAN) will
soon acquire a storage facility to ease distribution, Olumide Ogunmade,
the south-west chairman of the group, said.

He told the News
Agency of Nigeria (NAN) in Lagos on Monday that the aim of IPMAN owning
a facility was to reduce difficulties often encountered by members in
times of fuel scarcity.

According to him,
the facility would enable IPMAN members to get petroleum products at
cheaper prices, considering that the zone consumed two thirds of the
country’s fuel supply.

“The essence of
this is that the association doesn’t want to be part of the factions
that are fighting over positions and selfish interest at the detriment
of consumers and our members,” he said.

The naira and its
$500 million Eurobond could come under pressure in the coming days as
the postponement of national elections unnerves investors, traders and
analysts said on Monday.

Africa’s most
populous nation postponed parliamentary and presidential elections by a
week on Sunday, after failing to get logistics prepared in time, a
major embarrassment for a nation hoping to break with a history of
chaotic polls.

The naira traded as low as 155.00 to the dollar on Monday morning, weaker than Friday’s close of 154.10.

“It will definitely
have an impact on the perception of foreign investors … This is bad
for the external image of Nigeria. On the currency, you would expect a
bit of a sell-off,” said Coura Fall, a frontier African analyst at Citi
in Johannesburg.

Nigeria may have foreclosed any plans to explore nuclear energy as an alternative source of electricity power generation.

Minister
of state for power, Nuhu Wya, who gave this hint in Lagos, said the
country would explore other means of power generation in which it has
comparative advantage.

Responding
to a question at the power conference held in Lagos last week, he said
with the inherent danger in nuclear power, the country had no business
pursuing that source.

“Why
do we have to be talking about using nuclear power? If we have so many
other sources of energy that are untapped, why do we have to be talking
of one that is not readily available and is a long term development
plan? For you to put a nuclear plant and get it working, you are
talking about eight years,” Mr. Wya said.

Minister
of environment, John Odey, had said the use of nuclear energy for
electricity generation is no longer an option but a necessity, if
Nigeria is to meet her energy needs. According to him, the grid
capacity built around oil, natural gas, and hydro is not only grossly
inadequate but cannot meet the country’s current and future energy
demand.

Nuclear emergencies

However,
with this pronouncement, the government may have jettisoned the idea.
Following the earthquake in Japan, its nuclear plants, which accounts
for about 29 per cent of the country’s electricity power supply, were
badly affected, raising global concern about the dangers of nuclear
plants, especially for developing countries like Nigeria.

Though
the country has a watchdog, the Nigerian Nuclear Regulatory Authority,
which is supposed to regulate and ensure safety in the use of nuclear
energy, its state of preparedness to handle such emergencies is still
in doubt.

Mr.
Wya said the country has abundant capacity in other energy sources such
as hydro and thermal, which have not been fully utilised.

“We
have received expression of interest from firms that want to invest in
the power sector in hydro, gas, wind, coal, and solar power plants.

“We
must remember that Nigeria is gas and oil economy and already has
enough gas to potentially power the whole of Africa. In the same
manner, government has commenced effort to balance the energy needs
with the development of new sources of power from naturally evolved
resources. Already, pilot scheme for solar and wind projects are
ongoing,” Mr. Wya said.

Potential impediments

Mr.
Wya said potential impediments to the entrance of private sector
investment in every facet of the power sector will be totally
eliminated, in order to make it attractive to investors.

Chairman
of the Nigerian Electricity Regulatory Commission (NERC), Sam Amadi,
said government would guide against the emergence of monopolies and
manipulations in the power sector once it is privatised.

“It
is normal to find collusion. A market participant can be so powerful
that it can consistently act independently in keeping price above
competitive level. Electricity market can lend itself to manipulation,”
Mr. Amadi said.

He
said the commission will strive to protect consumers while ensuring
that electricity tariff will be competitive enough to encourage
investment in the sector.

“We
will protect consumers by ensuring just and fair pricing, carry out
social policies, and prevent anti-competitive practices by active
participants,” he said.

Cote d’Ivoire’s
weather last week was ideal for the development of the
April-to-September mid-crop with both rain and sunshine, but political
instability has disrupted the harvest, farmers and analysts said on
Monday.

This year’s
mid-crop cocoa was expected to be larger compared with last season. But
a violent political standoff in the world’s top cocoa producing nation
after a disputed election that has rekindled a civil war is stopping
farmers from going to their farms and many have fled the cocoa
producing regions.

In the western
region of Soubre, at the heart of the cocoa belt, one analyst working
for an industrial plantation reported 22 millimetres of rain mixed with
sunny spells adequate for the ripening and the proliferation of small
pods.

However, farmers said the political trouble has prevented them from harvesting pods already ripe on trees.

“There are lots of
ripe pods. We want to harvest them, but we cannot because there is no
means of travel,” said farmer Lazard Ake, who farms on the outskirts of
Soubre.

Soubre is one of
the towns in the cocoa producing region of Cote d’Ivoire, seized by
forces loyal to presidential claimant, Alassane Ouattara, in their
southward push. The forces now control over 90 per cent of the country,
including the cocoa exporting port of San Pedro.

“There is
insecurity and some of the fighters are seizing people’s cars and
trucks. The quality of the cocoa will degrade if the ripe pods remain
too long on the trees without being harvested,” Mr. Ake said.

In the
centre-western region of Daloa, producing a quarter of the country’s
national output, farmers reported three good rains which would help
cocoa beans. They said many growers have fled the town for the
campaign, fearing for their security.

“The rain is good
and all is well with cocoa,” said farmer Marcel Aka. He added the many
farmers have fled the city to go to the forest where they can find food
easily.

In the southern region of Aboisso, analysts reported 37.7 millimetres.

“The weather is
good, but there is no one to buy the cocoa,” said farmer Etienne Yao,
who added that many growers are not bothering to harvest.

Similar weather
conditions were reported in coastal regions of Sassandra and San Pedro,
in the eastern region of Abengourou, in southern regions of Agboville
and Divo, and in western regions of Meagui and Gagnoa. Reuters

Eni’s chief
executive has contacted rebels in Benghazi about energy cooperation, as
the Italian oil and gas group moved to protect its role as the leading
foreign oil operator in Libya.

Eni’s efforts were
supported on Monday by Italy giving Libyan rebels its full backing. CEO
Paolo Scaroni had phone contact with representatives of the rebels’
National Transitional Council in recent days, Italy’s foreign ministry
said. Eni declined to comment.

That corrected an
earlier comment by minister Franco Frattini who said Scaroni visited
Benghazi two days ago and had meetings on restarting cooperation on
energy with the council. There had been concern that state-controlled
Eni’s position in Libya could be undermined by Italy’s hesitant backing
for the rebel movement, paving the way for a greater say for French
group Total and maybe British firms.

Britain and France led the drive for intervention in Libya to protect rebels from strongman Muammar Gaddafi.

Italian premier
Silvio Berlusconi, long Gaddafi’s closest European ally, was subdued in
supporting rebels at first, while key coalition partner the Northern
League opposed intervention.

Eni dominance

Eni,present in Libya since the 1950s, is the biggest foreign oil company there,

producing 270,000
boed (barrels of oil equivalent per day) in 2010 . Its contracts are in
force to 2042 for oil production and 2047 for gas.

Early in March,
Scaroni called on Europe to abandon sanctions against Libya, adding
relations with Tripoli had not been hurt and Lybia’s National Oil
Corporation (NOC) was its main interlocutor.

Before the air
strikes, NOC head Shokri Ghanem said Eni’s contracts were safe. Since
then, Ghanem has said Libya was considering offering oil block
contracts directly to China, India and other nations it sees as
friends. “Eni is sitting pretty. The gas pipeline from Libya goes to
Italy and the rebels will need that. They will also need the group’s
oil experience,” said Stefano Casertano, senior fellow at German
think-tank BIGS-Potsdam.org.

At 1510 GMT, Eni shares were up 0.7 percent, with the European oil and gas sector up 0.3 percent.

Reuters