Archive for Money

‘Declare emergency in West Africa energy sector’

‘Declare emergency in West Africa energy sector’

Participants at the
3rd Economic Community of West African States (ECOWAS) Business Forum
in Abidjan, Cote d’Ivoire, have asked the ECOWAS Commission to declare
a state of emergency and focus on the development of their energy
sectors, as a strategy to facilitate speedy regional development.

The state of emergency will be for a decade, to push governments in member states to work on the energy sector.

The forum, which
focused on the theme ‘Harnessing energy resources for the competiveness
of West Africa’s economy’, said these measures will enable the region
address the supply-side constraints hampering access to energy in the
region, where only 30 percent of the population have access to energy,
with demand expected to grow by 7.6 percent from 6,500 mega watts (MW)
in 2003, to 22,000 MW in 2020.

The measures
proposed at the forum were expected to help the region address the
challenge in a holistic manner through initiatives that will promote
energy self-sufficiency, address the business and policy environment
issues, as well as the project financing mechanism.

The proposal
reinforced calls for the expeditious implementation of the priority
projects of the West African Power Pool (WAPP) in the areas of power
generation and the interconnection of national grids, the adoption of a
regional energy mix that exploits all the region’s energy resources to
meet the fast growing demand, the development of minimum renewable
energy targets, as well as the strengthening of the Cape Verde-based
Centre for Renewable Energy (CRE).

Other proposals
will enable the region address the business and policy environment, and
calls for the creation of a regional framework to guarantee private
sector investment, the implementation of capacity building programmes,
the development and enforcement of local environmentally-friendly and
energy efficient materials, the unbundling of the energy sector to
private sector investors, the strengthening of mechanisms for public
private partnerships, and the ratification of the ECOWAS Energy
Protocol.

On ways to address
the fund constraints against investment in the sector, including ECOWAS
facilitation of donor support for such projects, participants suggested
the injection of funds in the rehabilitation of maintenance of existing
infrastructure, the mobilisation of local resources, and the
development of financing mechanisms for energy projects, particularly
for rural electrification, as well as the provision of incentives to
encourage investment in independent power projects.

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‘Nigeria’s economic risks are exaggerated’

‘Nigeria’s economic risks are exaggerated’

“Its
challenges notwithstanding, the outlook for Nigeria financially remains
positive and investors should see most of them as opportunities, as
they reflect significant underinvestment in the past.

“Most
of the challenges Nigeria face can be seen as opportunities.
Infrastructure spending would clearly be a strong gateway to unlock
substantial economic development opportunities, and we believe this is
a strong case for seeing the economic environment as an enabling one
for private sector investment,” Afrinvest, an investment banking firm,
said in its assessment of the nation.

It
says the government’s willingness to improve its economic management
can be seen from the reforms targeted at various sectors.

“Power
reform is a key priority for the present administration, according to
its latest economic action plan. We believe the execution of this
detailed reform plan will result in the revival of the country’s power
sector.”

Other
positive initiatives, Afrinvest said, include the Asset Management
Company of Nigeria, the Nigerian Local Content Programme, the Petroleum
Industry Bill, and electoral reforms (with the appointment of a
credible respected electoral head, a drive for credible voter
registers, and biometric machines for accurate vote counting).

“Our outlook for Nigeria remains positive from a political standpoint, as we expect successful elections in 2011.”

A long way to go

However, the firm says the nation has a long way to go.

“Nigeria
is still battling acute infrastructure deficiencies, particularly with
power supply (where it remains one of the lowest-ranking countries,
with insignificant urban and rural penetration), the lack of good
roads, poor health and education systems, low broadband penetration,
low air penetration, high corruption levels, and high import levels.

“However,
the country has great potential yet to be unlocked, and a wealth of
natural resources yet to be explored. Even though corruption remains a
major concern, we have seen a noticeable improvement, as illustrated by
the Corruption Perception Index.”

Fundamentals remain strong

The
overall economy grew 6.7 percent in 2009, while non-oil growth was 8.3
percent. Growth has been largely underpinned by the agriculture sector,
which accounted for 43 percent of Nigeria’s GDP. While oil is a major
contributor to government finances, it only accounts for 17 percent of
GDP. The average inflation rate peaked at 13.7 percent in August 2010,
up from 12.4 percent in 2009, and 11.6 percent in 2008. Although it was
primarily driven by exogenous factors, such as food inflation,
expansionary fiscal policies have yet to translate into serious
inflationary pressures.

Foreign
and domestic debt remain relatively low, following the write-off of a
significant amount of external debt by the Paris and London Clubs of
creditors in 2005 and 2006 – although domestic debt is on the increase,
rising to 12.4 percent of GDP in 2009 from 9.3 percent in 2008.
Nigeria’s external debt in 2009 was 2.0 percent of GDP.

Putting into perspective where Nigeria was and where Nigeria is today, Afrinvest concluded that the time to invest is now.

“Now is the time, time to buy Nigeria, time to buy Nigerian banks. The
Nigerian market remains very cheap from a valuation stand point when
compared to its emerging market peers. The capitalisation of the
Nigerian Stock Exchange is back to 2006 levels, despite its GDP being
1.5 times bigger in 2009. After peaking at 62 percent of total market
capitalisation, the banking sector ended 2009 with a contribution of
only 42 percent.”

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OIL POLITICS: Mending MEND

OIL POLITICS: Mending MEND

Nigerians have been
subjected to several years of autocracy, misrule, and serial abuses
these past 50 years of flag independence. The Movement for the
Emancipation of the Niger Delta (MEND) and other groups have said that
Nigeria has no reason to mark this “jubilee.”

MEND did not only
make the point that there should be no celebration, they went ahead and
set off bombs that snuffed the lives of over a dozen Nigerians and
maimed many others. That was certainly a strong way to make a point –
in broken bodies, spilled blood, shattered families, and stunning the
nation to boot.

People have reacted
in different ways to the Abuja bombings, a remarkable escalation of the
sense of insecurity in a nation where kidnapers do not care a hoot
about taking kids, journalists, pastors, oil workers, and just about
anyone into captivity. This is a nation where citizens are abandoning
their homes, villages, and towns for armed groups to take control and
turn them into camps for their “armed struggles.” Meanwhile, the
security organs are out on roadblocks asking “wetin you carry?”

The idea of not
marking national days in the country crept into the national psyche
from the years of military misrule when the dictators did not wish to
promote the assembly of peoples to discuss the national state of
affairs. It became fashionable to tell Nigerians that occasions such as
independence anniversaries, children’s day celebrations, and others
were moments for sober reflection.

This was actually a
way of camouflaging the fact that the leaders were utterly bereft of
any ability or inclination to reflect on much other than their piles of
loot. Over the years, this neglect became accepted as times to stay in
our homes, mourn and recriminate the death of dreams built on the
“labours of our heroes past” that are now threatened to have been in
vain.

By neglecting to
mark days such as that of national independence, the remaining threads
that give citizens a sense of nationhood kept being pulled out of our
multicoloured national social fabric. Soon, we consolidated our sense
of apartness, each looking more to our ethnic nations, regional
cleavages, and political cabals.

It is in that
trajectory that we read the unfortunate order from MEND that no one was
to go to the Eagle Square for the national day celebration. They were
kind enough to say that people should avoid dustbins and cars. Pray,
where were those who eat out of dustbins going to get their meals from?
Or had MEND dropped extra packages for them to gather?

Of all the
responses, the one that is perhaps the most poignant is that of
President Goodluck Jonathan. In the chorus of voices condemning the
assault on all of us, our president reportedly said “What happened
yesterday was a terrorist act and MEND was just used as a straw; MEND
is not a terrorist group.”

By his leadership
position, Mr. President certainly has more information on security
matters than us ordinary citizens. Two disturbing issues arise from his
assertion. The first is his conclusion that “MEND was just used as a
straw.” The first assertion is more alarming than the second one which
claims “MEND is not a terrorist group.”

Perhaps, MEND is a
political party or an extension of the Nigerian Army, Mr. President? Or
is this an exercise in socio-political engineering to mend MEND?

Straw or pawn?

We return to the
first assertion, which suggests that MEND is naive and lent itself to
be used as a straw. In trying to read the president’s lips, we assume
that he was using the word straw here to mean “pawn”, referring to
someone used or manipulated to further someone else’s purposes.

If MEND is being used to further the purposes of someone else, then we have reasons to raise more concerns.

The first is that
that someone has to be unveiled. Another concern would be to
fundamentally question the rise of armed groups in the Niger Delta
allegedly fighting for a number of things, including more oil and gas
revenues for the region. Have there always been puppeteers behind the
scene if the armed groups do not have agenda for their activities? This
is disturbing because many came to see MEND as one of the more
politically coherent groups that chose the way of violence to make
their points.

If MEND is a straw,
can we assume that scenario planners, who have predicted that Nigeria
will blow into pieces within a short space of time, have an interest in
the escalation of violence and insecurity in Nigeria? Are we to say
that the violence in the oil fields has not secured sufficient foothold
for foreign armed assistance and this needs to be extended to the
entire nation and possibly put Nigeria on the path to becoming another
Somalia or even Sudan to a degree?

If MEND is a straw,
at what point did they metamorphose into this, or were they straws
right from start? If the group is a straw or can be used as a straw,
what are/were the several others who embraced the amnesty programme of
the government? It is time to rethink the amnesty programme and extend
it to the damaged environment of the region and indeed of the nation
through a national environmental emergency plan.

The president’s
assertion requires serious interrogation. With the background that some
armed groups began as bands of political thugs, we need to know if this
assault on poor Nigerians is linked to the fight for space and
displacements in the run for the forthcoming elections. In other words,
were these explosions the hands of politicians but the voice of MEND?

What we have here
is a deep failure of our security systems and this requires quick
action by Mr. President, and not quaint definitions of what constitutes
terrorism.

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Stock market measuring indices plunge

Stock market measuring indices plunge

The parameters for
measuring trading activities at the Nigerian Stock Exchange (NSE), the
market capitalisation and the All-Share Index, plunged on Wednesday, as
0.94 percent decline was recorded at the close of trading session.

The Exchange market
capitalisation of the 198 First-Tier equities closed yesterday at
N5.889 trillion after opening the day at N5.945 trillion, reflecting
N56 billion losses. The All-Share Index lost 227.09 points on the
previous day’s figures of 24,263.01 basis units, to close at 24,035.92
units.

Market operators said the rush for profit taking by investors could be attributed to the downturn recorded on Wednesday.

Detola Olukorede,
an equity analyst at Investment Option, a business advisory firm, said,
“One cannot rule out profit taking activities in the market since the
trend has been positive in the past one week. Profit takers, like
portfolio managers, will always want to get return on their
investments, even if it’s low.”

Mr. Olukorede said operators should expect mix market performance this week.

Top gainers

At the close of Wednesday’s trading, a total of 32 stocks appreciated in value while 30 stocks depreciated.

Guinness Nigeria
and Glaxo Smithkline consumer topped the price gainers’ table with an
increase of N8.65 and N1.10 on their initial prices of N173.00 and
N22.49 per share, respectively. Flour Mill Nigeria and Dangote Flour
Mills followed in the chart with an increase of 70 kobo and 68 kobo
respectively, to close at N60.70 and N14.41 per share.

On the loser’s
table, Nigerian Breweries and Conoil led on the chart with a loss of
N3.71 and N1.97 respectively, from their opening prices of N82.21 and
N39.45 per share. UAC Nigeria and Lafarge Wapco Cement followed with
N1.50 and 91 kobo losses respectively, to close at N41.40 and N38.09
per share.

Banks maintain lead

The banking
subsector on Wednesday maintained its lead on the most active
subsectors’ chart with 338.991 million volumes of shares, valued at
over N2.805 billion. Volume in the subsector was driven by shares of
Diamond Bank, First City Monument Bank, Access Bank, First Bank, and
Guaranty Trust Bank. The five banks also ranked as the most traded
stocks for the day.

The food/beverages
subsector followed in the chart. Investors in this sector exchanged
25.965 million shares worth N431.622 million. Volume in the subsector
was largely driven by shares of Dangote Flour Mills and Dangote Sugar
Refinery, followed by Cadbury Nigeria, and National Salt Company.

Trading activities
in the maritime subsector was third with 16.672 million shares valued
at N19.994 million. Deals in shares of Japaul Oil and Maritime Services
largely boosted the subsector’s volume.

Meanwhile, to avoid
been sanctioned for failure or late submission of its financial
accounts, the management of Aso Savings and Loans on Wednesday notified
the Exchange that its audited accounts for the year ended March 31,
2010 is currently being audited.

The company said it “expects the completion of the audit exercise,
as well as the approval by the Central Bank of Nigeria to take place
before the end of November 2010, after which the accounts will be
submitted for presentation to the market.”

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‘Economic empowerment of women indispensable to poverty reduction’

‘Economic empowerment of women indispensable to poverty reduction’

A female
entrepreneur in Akwa Ibom, Esther Eka, has said that economic
empowerment of women is indispensable to the country’s poverty
reduction efforts.

Mrs. Eka, who is a
member of the steering committee, International Cooperative Alliance
for Africa and Gender Equality, and president of the Nigeria
Cooperative Women Alliance, made the assertion in an interview with the
News Agency of Nigeria (NAN) in Uyo.

She said that women
were mothers and care givers, hence their empowerment would ensure that
children were well brought up and given proper training, adding that
her organisation had assisted women in Akwa Ibom to form more than 400
producers and consumers cooperative groups.

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Foreign investors show interest in Rivers

Foreign investors show interest in Rivers

The Rivers State
government said businessmen from Germany, Thailand, and South Africa
have indicated interest to invest in various sectors of the state’s
economy.

The commissioner
for commerce and industry, Ogbonna Nwuke, disclosed this in an
interview with the News Agency of Nigeria (NAN) in Port Harcourt.

He said that apart
from oil and gas, the investors showed interest in commerce, tourism,
and agriculture sectors, adding that investment opportunities also
abound in the Greater Port Harcourt City, currently under construction.

“The Greater Port
Harcourt City project is a masterful investment opportunity. In it, we
need to provide sewage, housing, roads, water, and electricity. These
are windows of opportunities for would-be investors, who want to invest
in an area where there can be return for their money,” he said.

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Nigeria to benefit from Fund

Nigeria to benefit from Fund

The Peers Mentoring
Programme (PMP), Nigeria, and Peers Mentoring Programme International,
in collaboration with the NEPAD Business Group, have inaugurated a
development fund, the PMP Promotion and Business Development Fund, to
help informal sector businesses in Nigeria.

Robert Aniebo,
chief executive officer, NEPAD Business Group Nigeria, told the News
Agency of Nigeria (NAN) in Abuja on Sunday that the collaboration would
help to improve the economy.

“This fund will
help to employ and coach at least 1 million mentors to sensitise,
mobilise, and formalise at least 1,000,000 informal sector businesses
in Nigeria,” Mr. Aniebo said.

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Egypt trains authority mulling bonds

Egypt trains authority mulling bonds

Egypt’s National
Railways Authority is considering issuing 10 billion Egyptian pounds in
bonds to finance projects over the next 10 years, a newspaper reported
on Sunday, citing unnamed authority sources.

The bonds, which
would fund projects worth 60 billion pounds, would be secured by the
assets of seven companies belonging to the state authority, Al-Mal
newspaper said.

The authority’s Chairman Mohamed Hegazy said by telephone he had no information to confirm or deny the newspaper report.

Egypt changed its laws in December to allow utilities and other
quasi-government organisations to issue bonds directly, a move designed
to expand the country’s debt market.

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First Morocco solar unit to be thermal

First Morocco solar unit to be thermal

Morocco, which
plans to invest $9 billion to build five solar power stations, had
opted for solar thermal technology for the first unit, to be set up in
the southern Ourzazate area, its solar energy agency chief said.

The North African
country’s government had previously not revealed which solar technology
it would choose, with officials saying they were open to all types.

“The first stage of
the $9 billion solar project will be achieved to satisfy the needs of
the country’s electricity operator ONE, which required the storage of
power,” Moroccan Agency for Solar Energy (MASEN) chief executive
officer, Mustapha Bakoury, said on Friday.

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Ivory Coast cocoa crop to drop by 11 percent

Ivory Coast cocoa crop to drop by 11 percent

Ivory Coast’s main
cocoa crop is likely to drop 11 percent to 800,000 tonnes in the new
2010/11 season due to black pod disease, the official marketing body of
the world’s top grower said on Friday.

“We expect there
will be a deficit in the main crop of at least 100,000 tonnes compared
with last year,” said Gilbert Ano, president of the country’s cocoa
sector management committee and head of the Coffee and Cocoa Bourse
(BCC), at the official opening of the new cocoa season.

“Last season, we
saw 900,000 tonnes. This year, we expect 800,000 tonnes as a result of
the rains, which provoked an outbreak of black pod disease,” he added.

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