Nigeria Content Online

Barrick Gold Corp
said it had struck a deal to buy Australian copper miner, Equinox
Minerals, for more than C$7 billion, topping a takeover offer by
China’s Minmetals Resources by 16 per cent.

Already the world’s
largest gold miner, Barrick is looking to bolster its position in
copper, a primary industrial metal, while prices are near record highs.

Toronto-based
Barrick said Equinox had agreed to be acquired for C$8.15 a share, an
8.7 per cent premium over the company’s Thursday closing price.
According to Reuters data, Equinox has about 879.5 million listed
shares, which would make the deal worth nearly C$7.2 billion.

Minmetals earlier
this month offered to buy Equinox for C$7 a share, but the Australian
copper miner called that proposal a low-ball bid. Equinox said it
believes the Barrick bid is superior in terms of price and likelihood
of completion.

Barrick said its
agreement for Equinox prevents the Australian miner from soliciting
superior bids and gives Barrick the right to match any higher offers.
Equinox would have to pay Barrick C$250 million to walk away from the
deal, even if it accepts a higher bid.

Equinox has prime
copper assets in Africa and Saudi Arabia that make it attractive to
larger miners. Its Lumwana copper and uranium mine in Zambia is
Africa’s third-largest copper mine by production and the Jabal Sayid
copper development in Saudi Arabia is due to start production next year.

Barrick chief
executive, Aaron Regent, said the deal would improve the company’s
copper exposure in a strong price environment for the metal, which is
used in construction and industrial applications.

“Combined with our
Zaldivar mine and Cerro Casale project in Chile, this acquisition would
position Barrick with significant production growth potential in two of
the most prolific copper-producing regions of the world,” Mr Regent
said.

As part of its
agreement to be bought by Barrick, Equinox will pull its unsolicited
bid for Lundin Mining. Equinox had been trying to take over its rival
copper miner since February but conceded on Monday that its own
shareholders would not likely have supported the deal.

U.S.-listed shares of Barrick slid 1.4 per cent to $54.85 in premarket trading after the announcement.

Barrick said it has
committed cash and financing in place for the transaction. It expects
the deal to add to earnings per share and cash flow immediately.

Morgan Stanley and
RBC Capital Markets advised Barrick on the deal, while CIBC World
Markets, Goldman Sachs, and TD Securities acted as financial advisers
to Equinox.

Reuters

The Nigerian Stock
Exchange recorded a total loss of N449 billion on equities at the close
of trading activities in March, after recording significant losses of
N260 billion in the preceding month.

The market value of
the 217 listed equities, which opened the month at N8.315 trillion,
closed on the last trading day in March at N7.866 trillion, reflecting
a N449 billion loss or 5.39 per cent decline.

The Exchange
attributed the downturn in stock market activities to the decline in
investors’ confidence, but said efforts are being made to fully restore
confidence in the system.

Femi Oladehin, vice
president and managing director of BGL Limited, an investment bank,
said political risks in the country and the crisis in the Middle East
and North Africa region contributed to the withdrawal of funds by some
foreign investors from the market.

He said uncertainty
remains in the market this quarter because “significant contributors of
trading in the Nigerian market are foreign investors as against local
investors.”

In the mean time,
market watchers have predicted that if elections are peaceful, the
Exchange will start recording stable rebound early May.

Daisy Ekineh, an
executive commissioner at the Securities and Exchange Commission (SEC),
said recently that the SEC’s key plan this year is to deepen the market
by “promoting more listings in the oil and gas, telecom companies,
small scale enterprises, and privatised enterprises.”

Mrs Ekineh also
said that the commission is working on reducing transaction cost in
primary offering and secondary offering in particular to further
attract more companies to the market.

Market turnover

While the official
turnover of transaction for the month is yet to be released, the market
recorded a turnover of 6.5 billion shares valued at N60.61 billion
during February, in contrast to a total of 10.84 billion shares valued
at N104.1 billion exchanged during January.

Aggregate stock
market turnover between January and February were 17.334 billion shares
valued at N164.7 billion exchanged in 259,427 deals.

In the comparable
period during 2010, the market recorded turnover of 16.14 billion
shares valued at N100.8 billion in 429,306 deals.

Measuring by
turnover volume, the Banking subsector was the most active in February
with traded volume of 4.5 billion shares valued at N37.3 billion, while
the Insurance subsector was second with traded volume of 450.23 million
shares valued at N666.9 million. The Maritime subsector was third with
transaction volume of 218.41 million valued at N390.56 million.

Over-The-Counter
bond market, a turnover of 926.1 million units worth N841.05 billion
was recorded in February 2011, in contrast to a total of 875.62 million
shares valued at N801.134 billion exchanged during the preceding month.

Officials of both the World Bank and the African Union (AU) in Addis Ababa have launched the 2011 World Development Report, published by the World Bank.

Sarah Cliff, a World Bank Representative, and Ramtane Lamamra, the AU Commissioner for Peace and Security, represented the two bodies at the occasion.

Presenting the executive summary of the report, which was titled ‘Conflict, Security and Development’, Ms Cliff said it focused on peace, security, conflict, human rights violation, suffering of people, and violence.

“It focuses on development initiative and development in Africa, impact on development and violence, trends of violence and development, forms of violence as it affects development, increased crime, and drug trafficking in Africa,” she said.

Ms Cliff said the report also looked at internal and external pressures on society, among other issues.

“These are the high levels of unemployment, youth recruitment into rebel movements and gangs, and impacts of economic shocks, especially from high prices of food,” she said.

She added that some of the solutions identified by the report include violence prevention between states and citizens, and restoring confidence between groups, societies, organisations, nations and communities.

The report also identifies the role of organisations like the AU Commission which have a regional approach and solution to economic crises beyond individual countries.

Lessons from other lands

She said lessons learnt from Ghana, Liberia, and Mozambique, which recovered from economic shocks, include the use of a bottom-up approach.

“This approach is to empower citizens for economic growth, ensure security, justice reform mixed with traditional institutions, and job creation for the youth. Women agencies should also be incorporated in poverty reduction and eradication programmes, while the strengthening of anti-corruption agencies will ensure judicious use of state resources,” Ms Cliff said.

The World Bank representative said about 1.5 billion people were affected by violence and conflict.

“This means that children of those affected were deprived of schools, decent accommodation, adequate food and water, among other health issues.”

Earlier, Mr Lamamra had said the AU Commission would continue to collaborate with the World Bank, especially in the area of conflict prevention, management, and continental development in general. He gave the assurance that the AU would strengthen its partnership with the World Bank in order to reduce conflict on the continent.

The 58-page report is divided into three parts. Part one focuses on the challenges of repeated cycles of violence, while part two talks about a roadmap for breaking cycles of violence at the country level. The roadmap includes restoring confidence and transforming the instrument that provides citizen security, justice, and jobs.

Part three discusses the reduction of the risk of violence as a direction for international policy, which includes adopting community level programmes designed by country context.

This is the first time the report has been launched in Africa.

NAN

Bankers have expressed optimism that the sector would be better disposed to create new assets by increasing their loan facilities to more applicants this year.

This is because some of the banks in their 2010 year end books have demonstrated that with the intervention of the Asset Management Company (AMCON), they have been able to clear their non performing loans from their books.

This move, they say, would place them in a better position to create new assets, a responsibility they have been shying away from since the industry’s crisis about two years ago.

Investigation reveals that though the banks had sufficient liquidity in 2010, their hesitation to create new assets by granting loan facilities was of huge concern.

Better days ahead

For instance, Stanbic IBTC in its 2010 year end results presentation recently said, “There was significant market liquidity, with resultant reduction in interest rate.” It, however, added that there was “limited investment outlets to channel excess liquidity”.

First City Monument Bank (FCMB), in its presentation of its 2010 financial performance, said it is optimistic that “Asset quality should improve further retail lending, commercial banking, project and structured finance to drive loan growth in 2011.”

The bank said retail business is expected to achieve fully loaded profitability, driven by deposit growth, loan growth, and improved interest rate environment.

One of the major factors that contributed to unusually low yields of banks was the pervading risk averse attitude, such that instead of making loans available to the real economy, banks rather invested in government debt market.

Adesoji Solanke, banking analyst at the Renaissance Capital, an investment bank, is, however, optimistic that the “implementation of AMCON activities in 2011 will increase the ability of banks to provide credit to their customers and promises to reduce volatility in the market”.

Renaissance Capital, in a research note on the industry, said there is a gradual dissipation of banks’ asset quality concerns.

According to it, “Our Nigerian banks’ analyst expects an uptick in lending activity to impact positively on banks’ income in 2011.”

Asset quality concerns in the Nigerian banking space are expected to end soon, when AMCON should have purchased all non performing loans in the sector.

It is expected that the extension of the interbank money guarantee by the Central Bank would improve confidence in the money market, the marginal growth in private sector credits and competition for good quality assets, and the ongoing reforms in the banking industry would help the banks gain more confidence to lend to credible applicants.

The StanbicIBTC Bank has announced the appointment of Sola David-Borha as its new Chief Executive Officer (CEO).

The appointment, which was made today, is with effect from May 1. Ms. David-Borha, who is currently joint Deputy Chief Executive, succeeds Chris Newson, who is taking up a new role as Standard Banks’ Regional Managing Director for West Africa.

Improving
trade links within the African continent is opening new opportunities
for Nigerian businesses to leverage on as commercial activities among
Africans boost the airlines and banking industries.

Jibril
Aku, managing director of Ecobank Nigeria Plc, said trade, which was
formerly restricted to regional blocks, has expanded across the various
trade corridors on the continent.

“Rather
than trade with former colonial masters, we are beginning to see more
trade across regional trade blocks. More countries are trading even
outside their regions, as trade relations improve,” Mr Aku said.

Speaking
on the bank’s regional strategy, Mr Aku said its presence in major
countries on the continent is paying off, as trade between African
countries improve.

“African
economies are still commodity driven. There is a government to
government business between Nigeria and some West African countries
that own refineries. It makes sense to buy refined products from
Cameroun, Ghana, Cote d’ Ivoire, and Senegal rather than from others.
What the government has agreed is that we sell crude to them and import
refined products,” he further said.

Improving trade

He said there is also increase in tourism among African countries.

“People
now go to spend their vacation in some of these countries. But things
will begin to grow faster when raw materials from other countries can
come in as inputs into our factories here,” he said.

African
countries have struggled over the years to improve trade across the
continent and roll back several decades dominated by trade with their
former colonial masters.

The
International Monetary Fund in 1990 classified 75 per cent of countries
in sub-Saharan Africa as having “restrictive” trade policies. This
figure has improved as more African countries open up their economy for
expansion.

Over
the last six years, many Nigerian banks have established presence
across Africa, emerging as major players across sub-Saharan Africa ex
South Africa. Banks like UBA, Access Bank, Zenith Bank, and Diamond
Bank opened subsidiaries in various countries to support continental
trade.

Commodities trading

Ecobank
Transnational Incorporated (ETI), the parent company, has subsidiaries
in 30 countries across Africa. Mr Aku said as things begin to improve,
commodities trading will grow into the bedrock of African economy.

“Because
there are a lot of Africans in the diaspora within Africa, they make
money, which they send back to their families. These are things we
support from the regional trade. Today, movement within Africa is a lot
better”, he said.

Mr
Aku said while the bank works on branch expansion, it was also
exploiting mobile banking as a channel to bring banking closer to the
unbanked population.

“Ecobank
has a licence for mobile banking. So, very soon, you will do your
banking on your mobile phone.We are moving away from brick and mortar
banking,” he added.

He said many Nigerians are embracing alternative channels of banking, as shown by the increasing use of ATM cards.

The most haunting
words I have read on Facebook are the words penned by one of the
martyred youth corps members, Ukeoma Aikfavour, who had served in the
restive north of Nigeria. Thinking that the worst was over and perhaps
a few hours to the mindless termination of his life, he had written
these words:

“Na wao! This CPC
supporters would hv killed me yesterday, no see threat oooo. Even after
forcing underaged voters on me they wanted me to give them the
remaining ballot paper to thumb print. Thank God for the police and am
happy i could stand for God and my nation. To all corps members who
stood despite these threats esp. In the north bravo! Nigeria! Our
change has come.”

The stories that
continue to emerge from the post election violence reveal the depth of
depravity of the urchins, the rascals whose passion for human blood was
unleashed on innocent youth corps members and on persons of different
ethnic extraction and religious persuasion. The nation can, however,
take consolation in the heroic stories of Muslims who protected
Christians at a great risk to their lives. Such Nigerians should be
applauded for showing immense courage in the face of these acts of
barbarism.

If the report of
the refusal of the authorities of Yusuf Bala Usman College of Legal and
General Studies, Daura, Katsina State, to provide a bus to ferry youth
corps members to a secured camp is true, that marks another case of
insensitivity, an abhorrent behaviour, that could have exposed these
young Nigerians to harm had not a Good Samaritan stepped in to pay for
commercial buses to convey them to safety. The repeated inability of
our security forces as well as emergency agencies to help at this
critical moment illustrates a huge capacity deficit.

The low level of
care and security provided for these youth who served as ad hoc
personnel of INEC in the elections leaves much to be desired. These
youth were posted to northern Nigeria to serve the nation and not to be
hacked, brutally murdered and burnt on account of the electoral
process. It is nauseating to note that in Gombe State, one of the
earlier flashpoints, the mayhem began on the basis of the fact that the
margin of victory of the CPC over the PDP was not as wide as they had
wished. A similar trend equally emerged in Kaduna, shortly afterwards.

Apparently, for
these folks, victory or loss can provide convenient cover for
destruction. It is time for all parties to realize that in this season
of bloodshed, tears and sorrow, there will be a tomorrow. This is basic
wisdom if any party hopes to stay as a platform for national unity,
drawing support from across the nation.

The duty and onus
of responsibility for quelling the raging flames lie heavily on the
shoulders of our president. While it may be rather far-fetched to call
for a state of emergency to be declared in northern Nigeria, we cannot
overlook the fact that the dire situation warrants mobilisation of
military forces to check these violent outbursts before the nation is
engulfed in another senseless and unwarranted orgy of destruction.

Looking at the
electoral framework in our country, we must be thankful that for a
candidate to win the presidential poll, the person must secure at least
a quarter of the votes cast in two-thirds of the states of the
federation and the Federal Capital Territory, apart from securing a
majority of the aggregate votes cast. If victory were to be dependent
on just the winning of a majority of the votes cast, then it would have
been a different ball game.

The 2011 elections
may not be perfect, but it has clearly been seen as a huge improvement
over past efforts. Only a person to whom wrong is right and right is
wrong will refuse to acknowledge this.

My heart aches each
time a new story emerges from the sufferings of the victims of the post
election violence. When I recall that I have enjoyed living in and
making Edo State my base over the past three decades on account of
being posted there for National Youth Service, the essential usefulness
of the programme as a unifying force is real to me. Today, I begin to
have doubts, and do support the need for the evaluation and redesign of
the scheme. I am still pondering what my response would be if any of my
children is posted to serve in restive northern Nigeria. I know they
would have to decide for themselves, but a parent’s duty is also to
ensure that evil hordes and their sponsors do not kill the dreams of
our children who wish to serve their motherland.

Goodluck Jonathan’s call for all to step up to the rebuilding of the
nation is apt at this time when the smoke of battle can becloud our
sense of purpose. We urge the president to go beyond the promise of
compensation for the victims of the post election violence and take
steps to honour the youth who lost their lives while providing heroic
service to the nation in these hostile times.

The feud between
the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC)
over the two factions of the Association of Senior Staff of Banks,
Insurance and other Financial Institutions (ASSBIFI) is still pending
at the National Industrial Court.

The two unions are
embroiled in a battle of wits over where the union belongs. A faction
claims it belongs to NLC while another is claiming affiliation to the
NLC.

Sunday Salako,
president, ASSBIFI, under the TUC, said the NLC ASSBIFI faction,
especially those in Union Bank “left our camp since 2004 and have since
been on their own. When they were here, they used to have the highest
number of staff members then, so there was this thinking that they must
produce the president of the association during any elections and then
there was a fall out. They say they are with NLC, and we are not. So
that is what happened.

He said the workers
withdrew from the association when they anticipated that because they
had the largest unit of attendance, they should always produce the
president of the union and hence, there have been legal issues over why
they still maintained the name of the union, instead of getting a new
one.

The matter, along
with other subsisting disagreement, was referred to the Industrial
Arbitration Panel (IAP) for arbitration. The IAP confirmed the
existence of inter union dispute in ASSBIFI and advised both parties to
return to the 2007 agreement.

Obukese Orere,
general secretary of the NLC faction of ASSBIFI, had earlier said the
constitution allows people to belong to any union they choose and that
people who say TUC is the umbrella body for senior staff are not
totally right.

Delay not healthy

The delay in
resolving this issue, however, has been proven to be harmful to member
banks and ultimately, the welfare of bank workers.

In February, the
dispute between both parties reached its peak when Union Bank banned
its chapter of ASSBIFI on grounds that it was not properly affiliated.

At the height of
the bank’s misunderstanding with its workers, it issued a statement
that “Following the unlawful operations of UBASS (Union Bank
Association of Senior Staff) and ASSBIFI (Association of Senior Staff
of Banks, Insurance and other Financial institutions), Union Bank of
Nigeria Plc has withdrawn its recognition of the above named trade
union bodies with immediate effect. All concerned have been duly
advised. The general public should please take note.”

Following this, the
NLC embarked on a nationwide picketing of the 94-year old institution,
basically disrupting its operations for several days. The Congress said
it is not the duty of Mrs Osibodu to de-recognise ASSBIFI, its
affiliate, or any industrial union since there are statutory bodies in
place to regulate trade union activities.

“On the legality or
otherwise of ASSBIFI, we wish to unequivocally state that the dispute
is still pending at the Industrial Arbitration Panel (AIP) and no
judgement has been delivered up to this moment to warrant the
unfortunate and totally contemptuous decision of the Union Bank
management,” the labour union had said.

The matter was,
however, resolved after the minister of labour waded in and advised the
bank to accede to the demands of the union.

Industry watchers and banks have said they would not be part of what is happening until the issues are legally addressed.

A total of N5.85
billion was repaid as loans by Nigerian farmers under the Agricultural
Credit Guarantee Scheme Fund (ACGSF) last year. The highest repaid
amount of N769.15 million, representing 13.15 percent of the total, was
made by Delta State, followed by Katsina and Adamawa states with
N667.21 million and N532.64 million, respectively. Ekiti had the lowest
repayment figure of N15.7 million, trailing Abuja, which repaid N19.12
million, and Bayelsa, which repaid N19.18 million.

According to data
released by the Developmental Finance department of the Central Bank of
Nigeria (CBN), the funds were disbursed to finance 50,119 projects
across the country, with Katsina State topping the list at 7,184
projects, followed by Kogi and Sokoto states with 6,877 and 5,618
projects, respectively. Abuja had the least number of projects with 50
while Ekiti and Bayelsa had 111 and 120 projects, respectively.
Nassarawa State did not record any projects.

Since its establishment in 1978, the ACGSF has granted around 692,716 loans valued at about N41.34 billion.

The ACGSF was
formed solely to encourage financial institutions to lend funds to
those engaged in agricultural production and agro-processing
activities, with the aim of enhancing the export capacity of the nation
as well as for local consumption. The fund is set up with the sole
purpose of providing guarantees in respect to loans granted by any bank
for agricultural purposes.

Interest Drawback

Likewise, N694.67
million has been repaid to farmers under the Interest Drawback
Programme (IDP) of the ACGSF. The IDP was set up in 2004. Under the
IDP, farmers shall borrow from the lending banks at market-determined
rates and after the liquidation of the loan, they shall be entitled to
interest drawback at the pre-determined IDP rate. The IDP has an
authorised capital fund of about N2 billion and is funded jointly by
the federal government and the Central Bank of Nigeria (CBN) in the
ratio of 60:40.

Under the IDP, the
highest amount paid during the period was made last year when N227.44
million was paid out. According to the CBN, the repayment trend is
encouraging. “A trend analysis of the loan repayment performance of the
ACGSF over the years shows that the IDP has impacted positively on the
operations of the scheme as it induced clients to repay on time,” the
CBN stated.

To be eligible for
the loan drawdown, a farmer must have repaid both loan principal and
interest within the agreed tenure. However, a grace period of three
months for repayment may be allowed but drawback entitlement shall be
calculated only up to the scheduled date for the final repayment of the
loans. This means that interest accruing during the grace period will
not be part of the amount to be refunded.

“Farmers that liquidate loans after the expiration of the guarantee
certificate/grace period are not eligible and shall be disqualified,”
say the CBN guidelines. “A loan for which repayment period is extended
after the expiration of the original guarantee certificate shall not
qualify to benefit under the IDP.”

The
Central Bank of Nigeria (CBN) yesterday set end of June as deadline for
full compliance to the proposal for the implementation of uniform
customer bank account numbering system in the country.

By
that date, only banks with the Nigeria Uniform Bank Account Number
(NUBAN) codes and validation test pass would be allowed access into the
automated clearing system by the apex bank.

The
apex bank said yesterday the present account numbers and NUBAN codes
would co-exist in the electronic payment and cheque clearing systems
till June 2011, after which customers in all the 24 deposit money banks
(DMBs) are expected to be integrated into the new system.

The
apex bank had, in August last year, issued guidelines on the NUBAN
scheme designed to achieve a uniform customer bank account numbering
structure in the country, as part of efforts to help resolve the myriad
of problems observed with the current electronic payment system by
commercial banks, particularly those relating to specification of wrong
beneficiary account numbers.

Similarly,
it directed banks to provide the relevant information to their
customers in-clearing systems to enable them distinguish NUBAN codes
from old account numbers while processing inward cheque items and
electronic payment instruments during this transition period.

“The
deadline for full NUBAN compliance is June 2011. Therefore, only
instruments (paper and electronic) that carry NUBAN codes and pass the
NUBAN validation test (that is, instruments with correct check digit)
would be allowed in the automated clearing system as from this date,”
the CBN said.

Working to comply

But
there appears to be various levels of compliance by the banks to the
directive, as most of the banks spoken to yesterday either were
ignorant of the new numbering system or were yet to do anything about
it, while others said they had commenced the process and are on course
to meeting the deadline.

At
Afribank Plc, the spokesman, Moshood Isamotu, said its management had
since January this year complied with the directive, as all its systems
have been upgraded to accommodate the new digital platform required for
the effective operation of the NUBAN system throughout its network of
branches.

For
Udo Igwe, the head, brand management department of Springbank, it had
started the process already and hopes to complete it before the June
deadline.

However,
responses from officials in most other banks gave an indication that
they still have a long way to go in meeting the deadline, as some of
them said they were either not aware, or have not commenced action on
the directive.

In
its recommendation to facilitate the smooth implementation of the
scheme, the Cheques and Automated Clearing House (ACH) Working Group
(CAWG) recently recommended the issuance of a special NUBAN check
number code for all banks and customers accounts.

The
NUBAN account serial number, according to the apex bank, would be
preceded by a three digits code assigned by the CBN to the bank, with
the last number in the serial representing the NUBAN check digit
required for account number validation.

The
3-digit codes assigned by the CBN to the banks in the Bankers Clearing
System , according to the operational guidelines issued in Abuja
yesterday, include Access Bank (044), Fidelity Bank (070), StanbicIBTC
(221), Afribank (014), Finbank (085), Standard Chartered Bank (068),
Citibank (023), Guaranty Trust Bank (058), and Sterling Bank (232).

Others
include Diamond Bank (063), Intercontinental Bank (069), United Bank
for Africa (033), Ecobank (050), Oceanic Bank (056), Union Bank (032),
Equitorial Trust Bank (040), BankPHB (082), Wema Bank (035), First Bank
(011), Skye Bank (076), Zenith Bank (057), First City Monument Bank
(214), SpringBank (084), and Unity Bank (215).

The
NUBAN code of a typical customer bank account would be derived through
the summation of the bank’s assigned 3-digit code in the Bankers
Clearing System with the NUBAN serial number, less the last digit for a
module of 10 to arrive at the check digit for number validation.

“All
Deposit Money Banks (DMBs) are advised to adopt this uniform algorithm
to obtain the check digit component of the NUBAN codes of their
customer account numbers,” the apex bank said yesterday, urging bank
managements to communicate the NUBAN codes to their existing customers,
while all new bank accounts should henceforth be provided with the new
codes.

Under the new arrangement, only NUBAN numbers/codes are supposed to
be featured in place of the customer account number field in the cheque
Magnetic Ink Character Recognition (MICR) code line in all cheques
issued to customers.