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Ghana is on track
to pump its first barrel of crude oil in December from total reserves
put at 1.6 billion barrels, vice president, John Dramani Mahama, said
on Tuesday.

The comments
reaffirmed its push to join the league of oil producers this year, and
the reserve estimate breaks from previous, more cautious forecasts, to
concur with a top-end figure given by operator, Tullow Oil Plc.

“In December this
year, Ghana will join the league of petroleum-producing nations as
commercial production begins in the Jubilee field,” Mahama told a
conference in Accra.

“Conservative
appraisal of the wells and available statistics based on credible
scientific findings indicate that the country holds potentially about
1.6 billion barrels of crude oil,” he added, updating previous official
forecasts of merely 800 million barrels – widely considered as overly
conservative.

Field operator,
Tullow, puts the upside potential of the core Jubilee Unit Area at one
billion barrels of crude, with the southeast section under appraisal at
a further 500 million.

Mahama said Ghana
could expect oil revenues on average to contribute seven percentage
points to annual gross domestic product, but warned it would not in
itself transform the fortunes of the country, a third of whose people
live in poverty.

“Ghana cannot see
the oil industry as a miracle wand to solve all problems. Rather, the
country can prudently use this resource to achieve significant economic
turn around,” he said, noting plans to base a nascent petrochemicals
sector on gas from the field.

Mahama stressed the
importance of ensuring local employment in the oil business, which has
typically been more capital than labour-intensive, and said oil revenue
management legislation aimed at ensuring transparency was before
parliament.

The field is due to
take four to six months to reach planned output of 120,000 barrels per
day – a level it will maintain for three years, Ghana’s energy minister
told Reuters in an interview last month.

Kosmos’ stake

Oil firm, Kosmos
Energy, said it had $350 million of extra credit to develop its assets
in Ghana’s Jubilee field and was committed to staying in Ghana, a week
after it said it cancelled an accord to sell its stake to ExxonMobil.

“The funds will
support Kosmos’ share of Jubilee Field phase one development, appraisal
of additional discoveries, and ongoing exploration activities on the
West Cape Three Points Block and adjacent Deepwater Tano Block offshore
Ghana,” it said in a statement issued in Dallas.

Ghana’s state
petroleum company, GNPC, a fierce opponent of the sale of the Kosmos
stake to ExxonMobil for what sources close to the deal put at $4
billion, last week reiterated its interest in the Kosmos assets.

But the Kosmos
statement noted the new funding was part of its plan to build on the
value of its assets and repeated that “the company will remain in
Ghana.”

Kosmos is backed by
private equity firms, Warburg Pincus and Blackstone Group LP. It is the
operator of the West Cape Three Points Block in which it holds a 30.875
percent interest and holds an 18 percent interest in the Deepwater Tano
block.

Trading
performances at the Nigerian Stock Exchange (NSE) got poorer after
Tuesday’s proceedings as investors record more losses, making it a
total loss of over N1 trillion since trading began this year.

The NSE market
capitalisation, which opened the year at N4.989 trillion, had
appreciated to N6.796 trillion during the second quarter of the year,
before it began depreciating at the start of the third quarter.

At the close of
Tuesday’s trading, the Exchange market capitalisation further plunged
to N5.992 trillion, after opening the day at N6.108 trillion,
reflecting 1.90 percent decline or over N116 billion losses. Meanwhile,
about N32 billion losses was recorded on Monday. The NSE All-Share
Index also shed 1.90 percent or a loss of 473.04 units on the previous
day’s figures of 24,976.65 basis points, to close at 24,503.61.

Some analysts said
that the negative market sentiments persist as a result of the gradual
fall of investors’ appetite for equities, which resulted to cut down in
investment activities for safety.

A chief executive
officer of a stockbroker firm, who pleaded anonymity, said, “We (stock
broking firms) are trading and treading cautiously because we are not
sure of what’s going to happen next in the market.”

He said until
Emmanuel Ikazoboh, the interim administrator of the NSE, achieves his
primary assignment of giving the Exchange a new head, “investor
confidence may not improve.”

Also, finance
analysts at Proshare Nigeria Limited said the present negative
performance serves as indications of continued reactions from the
investing public to the crisis, which has compounded the spate of
uncertainty in the market.

“It should be
apparent to all and sundry at this time that the present crisis, though
may be necessary for the paradigm shift needed for the kind of market
we deserve, the manner and how it is being handled may leave bitter
experiences for investors, at least in the short run,” they said.

Market performance

Meanwhile, the
number of gainers at the close of yesterday’s trading closed at 16,
compared with the 27 gainers recorded on Monday, while losers closed
higher at 57, compared with the 38 losers recorded the previous trading
day.

Nigerian Bottling
Company topped the gainers chart for the day with five percent price
appreciation, while Sterling Bank and Bagco topped the losers chart for
the day with five percent depreciations.

The banking
subsector led the market transaction volume on Tuesday with 158.783
million units valued at N1.275 billion, exchanged in 3,837 deals.
Transactions in the shares of Zenith Bank, Fidelity Bank, First Bank,
and UBA boosted the volume traded in the sector. The total volume of
82.807 million units valued at N774.595 million traded in the shares of
the four banks accounted for 52.15 percent of the entire sector volume.

The downward trend
also dominated trading activities in the banking sector yesterday as
the sector recorded two gainers to 18 losers, as against the four
gainers to 13 losers recorded the previous day.

At the Exchange’s floor yesterday, Airline Services & Logistics,
in its second quarter financial result of 2010, recorded 8.48 percent
decline in gross earnings and a 95.02 percent decline in profit after
tax.

Some
telecommunications companies in the country are missing out on their
income due to the activities of illegal software pirates. A major hub
of these pirates is the Computer Village at Otigba, Ikeja, in Lagos.
Welcome to the place where young men and some boys sell illegal
Internet connections by bypassing the Internet service providers.

A young man,
Taofik, said that selling illegal Internet connection was to enable
consumers spend less than what service providers charge.

“All I need is for
you to bring your laptop and any of the telecom operators modem. If you
don’t have, we can buy it around here. Then I would add software that
can allow you browse for two months, if you pay well,” said Mr. Taofik.

“I charge N4, 000
to install the connection for you, and it would bypass the service
provider and they would not know or disconnect your Internet
connection. It does not affect the modem; you can always pay to your
service provider anytime after the software I put in for you stops,”
added Mr. Taofik.

Adeola, who
identified himself as Mr. Taofik’s brother and partner in the business,
said that the selling point of their business is the rate and the
duration of their service.

“Let me ask, which
do you prefer? To pay N10, 000 for 30 days or to pay N4, 000 for up to
60 days. Now, you see the difference is clear and when you come back to
re-connect after the two months, you can give us less amount, like N1,
000”, said Mr. Adeola.

Cheapness does not justify illegality

However, Jimson
Olufuye, the president of Information Technology Association of Nigeria
(ITAN), said in a telephone interview that cheap rates or long duration
for illegal service does not justify the illegal business going on at
the Computer Village.

“The fact that a
rate is cheap or that the duration for the service is long does not
justify an illegal business,” Mr. Olufuye said.

“It does not help
the legitimate business owners because they have their business plan
and have invested a lot of money into their business.

“ITAN opposes all
forms of piracy, as that is a breach of intellectual property (IP) of
the business owners and it affects their business growth and the
economy, as it does not create room for other investors to come into
that business,” he said.

In an email on a
separate story, Serge Ntamack, IP manager for Microsoft Nigeria, had
said, “The federal government needs to set a vision to enable a
business-friendly environment, make IP a top policy priority, empower
the agency in charge of IP laws, Nigerian Copyright Commission (NCC),
increase penalties for IP-related offences, enforce IP laws, be vocal
at highest political level against piracy (awareness), commit
government funds to fight all sort of piracy (books, music, film, cable
TV, software), regulate the market, and close down piracy hot spots
across the country.”

A report from
Business Software Alliance/IDC Global Software Piracy Study this year
revealed that Nigeria lost $156 million in 2009 to software piracy.

Mr. Olufuye
explained that it is time for government and the copyright commission
to act fast as piracy is growing very fast in Nigeria.

“This issue needs to be addressed faster than we have done before.
The government and the copyright commission have to work harder,” he
said.

Shareholders are
split over plans by the Central Bank (CBN) to sell some banks that were
bailed out last year. The banks are Intercontinental, Oceanic, Finbank,
Union Bank, Afribank, Bank PHB, and Spring.

After several
months of negotiation, Lamido Sanusi, the Central Bank governor, said
on CNBC Africa last week, that bids have been received for the affected
banks from two foreign institutions and some local banks.

Shareholders agree that the Central Bank has no right to sell the banks, but for different reasons.

Timothy Adesiyan,
president of the National Shareholders Solidarity Association, a
shareholder group, said the Central Bank is not selling the banks
because it has no right to do so. “It is recapitalisation, not sale,”
Mr. Adesiyan said.

“It is only when
the shareholders are not able to recapitalise that the CBN can
liquidate. All the Central Bank wants to do is give out some percentage
to core investors, who will come in subject to the approval of
shareholders.”

He said the CBN was
doing the right thing to ensure that the banks do not go under. When
told that the entrance of core investors would change the ownership
structure of the banks, he said it did not amount to outright sale.

“When Actis went
into UAC as core investor, of course the ownership structure changed
but the company was better for it. What we want to change is the
recklessness with which the former directors were managing the banks,”
he said.

Riding roughshod

Boniface Okezie,
president of the Progressive Shareholders Association, another
shareholder group, said the Central Bank’s insistence on handing the
banks over to a new group of owners was in the manner of riding
roughshod over other interests.

“We have not struck
any balance. The CBN governor’s original statement was that the press
was misquoting him; that he never said he would sell the banks. What we
are saying is that the management appointed by CBN cannot midwife the
handover of the banks. Up till now, the Central Bank has not told us
how much is required to recapitalise each bank,” he said.

Mr. Okezie said
there is already a caveat obtained from courts in Lagos, Abuja, and
Ibadan warning investors to beware of taking interest in any of the
banks. “Even the local banks that are showing interest, how many of
them are sound? How much dividend are they paying their shareholders
now for them to muster enough resources to take over the banks?”

He said the Asset
Management Corporation of Nigeria (AMCON) Bill was unfairly lopsided in
favour of the Central Bank to take over troubled banks.

Timely intervention

Godwin Anono,
chairman of Nigeria Professional Shareholders Association said the CBN
action was timely and was intended to save the banking industry from
imminent collapse. Mr. Anono claimed that many of the shareholders that
are fighting against the sale of the banks were merely fighting for
their own selfish interest.

“Go to the register
of members, how many shares do they actually own in these banks? They
are the ones who were conniving with the sacked management who were
mismanaging the banks. Let these banks be taken over,” he said.

“Shareholders fund, depositors funds are wiped out once CBN calls back its funds.”

Mohammed Abdullahi,
CBN head of corporate affairs, said even though new investors will
alter the ownership structure of the banks, the move was in the overall
interest of the institutions. “The CBN is not selling. We are merely
inviting new investors. If a bank issues IPO, (initial public offering)
does that mean it is selling the bank?”

Mr. Abdullahi said shareholders who were not satisfied with the CBN decision were free to seek legal redress.

More than 600
workers at Exxaro’s mineral sands unit in South Africa went on strike
on Monday, a union said, while 1,700 planned to do the same at a Rio
Tinto-BHP Billiton joint venture.

The National Union
of Mineworkers (NUM) said workers at Exxaro’s KwaZulu Natal sand units
were demanding a 14 percent rise in wages. The company has offered an 8
percent increase.

“Our strike is
indefinite. With us, you either deliver on our demands or you go fry
eggs,” Bhekani Ngcobo, the union’s regional coordinator for the
province, said in a statement.

Trevor Arran, the
head of Exxaro’s mineral sands and base metals businesses, said the
company would ask the union to drop its wage demand as it was higher
than the below 8 percent pay settlements at its other units and core
businesses.

“We certainly think it is unrealistic,” Arran said.

Arran said the
strike would not impact Exxaro’s operations as production at the mines
had been suspended before the strike and the company also had enough
stockpile of slag, used to produce titanium dioxide, at the units with
a 200,000 tonnes annual slag output capacity.

Ngcobo said the
union was demanding that Exxaro phases out a certain grade in which
workers’ monthly net pay was 5,800 rand and place them in a grade of
over 7,000 rand.

“We further demand
that the company should ban the usage of labour brokers and offer a
housing allowance of 2,000 rand a month,” Ngcobo said.

NUM also said it
would on Tuesday give 48 hours’ notice to strike at the BHP-Rio Tinto
Richards Bay Minerals joint venture if Rio Tinto did not agree to its
demands by the end of Monday.

The union is demanding a 10 percent pay rise on a one-year deal. Rio Tinto has offered an 8 percent rise on a three-year deal.

The NUM is also demanding a rise in housing allowance to between 4,000 and 6,000 rand, depending on the employee group.

Rio Tinto said it would comment later on the planned strike.

South Africa, the
continent’s biggest economy, has been hit by a wave of strikes and
strike threats in both the private and public sector, which have led to
above-inflation settlements and stoked fears that the cost of living
will rise.

South Africa’s inflation rate slowed to 4.2 percent in June.

Shares in Exxaro were up 1.48 percent at 114.88 rand by 1349 GMT, compared with a 1.83 percent rise on the JSE’s Top-40 Index.

The Nigeria National Petroleum Corporation and LNG Japan Corporation have began discussion on strategic collaboration on the Brass Liquefied Natural Gas (BLNG).

This followed the visit of the LNG Japan Corporation team led by its President and Chief Executive Officer, Yasunori Takagi, to the corporation in Abuja.

The collaboration would provide the world’s most competitive finance and gas marketing opportunity in Asia, the petroleum managing director, Austen Oniwon, said on Thursday.

“This is part of efforts to fast track the exploration of the abundant gas resources in the country to increase Federal Government’s revenue from the oil and gas sector,” he said.

Mr Oniwon expressed the willingness and readiness of the NNPC to collaborate with LNG Japan Corporation in the value chain.

He also urged LNG Japan to expedite action as the Federal Government had given the NNPC a timeline for the Final Investment Decision (FID) on the LNG projects.

“Japan LNG Corporation is welcome into Nigeria and NNPC as a major stakeholder in all the LNG projects in the country, is willing to partner with you and do business that will be of mutual interest to both parties,” Mr Oniwon said.

He said when the Petroleum Industry Bill currently before the National Assembly is passed into law, the Corporation will transmute into a ring fenced organisation that will play in the international hydrocarbon market like other National Oil Companies.

He urged Japan LNG Corporation to serve as a vehicle that will help link the NNPC to other gas markets in the Asian Continent noting that there was room for expansion up to train 7.
Mr Oniwon congratulated the Japanese chief executive on his appointment and encouraged Mr Yasunori to brace for the challenges in the hydrocarbon industry.

Also speaking, the Group Executive Director (Gas and Power), Voka Mukoro, said NNPC is prepared to ensure the smooth take off of the transaction.

He called on LNG Japan to be frank and open as the business framework was being developed for the mutual benefit of Nigeria and Japan.
Earlier, Yasunori Takagi had lauded NNPC for selecting LNG Japan Corporation as a strategic investor.

The Nigerian Stock
Exchange said on Thursday, that it was cutting a third of its staff,
three weeks after, its director general was removed amid governance
concerns and auditors were called in to assess its state of health.

The Securities and
Exchange Commission (SEC) appointed a former top Deloitte accountant as
interim manager and appointed accountancy firm KPMG to audit the books
earlier this month, after removing Ndi Okereke-Onyuike, the director
general.

“In furtherance of
its goal to restore investor confidence in the Nigerian capital market,
the council of the Nigerian Stock Exchange (NSE) decided to reduce the
exchange’s staff strength by 32.5 per cent from 292 to 197 staff
members,” the bourse said in a statement signed by its spokesman Sola
Oni.

The new head of the
SEC, Arunma Oteh, who took over in January, has pledged tighter
regulation and surveillance as part of an overhaul of Nigeria’s capital
markets.

The SEC said
Okereke-Onyuike’s removal was aimed at restoring confidence amid
worries about inadequate market oversight, allegations of financial
mismanagement, ongoing litigation, and an unclear succession plan for
its leadership.

Ms Oteh said in May the reforms would ultimately involve the
demutualisation of the stock exchange, which would turn it into a
listed company, making it more globally competitive and giving it a
larger incentive to bring in profitable new products such as
derivatives or exchange-traded funds.

The United States
will provide financing of $45 million for a power project in mainland
Tanzania and Zanzibar, the U.S. embassy said in a statement on
Thursday.

The funding is part
of a $698 million grant to the East African country by the United
States in 2008 under the Millennium Challenge Corporation to fund
water, energy, and infrastructure. A total of $206 million has been
allocated for energy projects.

“The work involves
the construction and rehabilitation of 24 power substations throughout
the mainland and on Unguja (the main island of the Zanzibar
archipelago),” said the statement.

The financing agreement is scheduled to be signed in Tanzania’s commercial capital, Dar es Salaam, on Friday.

The contract has been awarded to a joint venture between the U.S. firm, Symbion Power LLC, and French company, Areva.

The agreement will
finance the manufacture and installation of a new 100 megawatt
submarine power cable between mainland Tanzania and Zanzibar, according
to the U.S. embassy.

In April, the
United States and Zanzibar signed a $28 million package to finance a
power project aimed at alleviating frequent electricity outages in the
semi-autonomous islands.

Erratic power
supply is the bane of the economy of the Indian Ocean archipelago,
which relies on tourism for more than 25 percent of its gross domestic
product and 70 percent of its foreign exchange.

Electrical power was restored to Zanzibar on March 8, three months after the islands were plunged into darkness.

Ever
since the introduction of Global System for Mobile Communication (GSM)
in 2001 in Nigeria, mobile phones have become ubiquitous that they
permeate every area of people’s lives.
But
the latest innovation is a novel one facilitated in South Africa by
Nokia, a global mobile phone manufacturer renowned for its user
friendly phones. Phone technology will become more innovative as
reported in the African Business August/September edition.
“A
South African-designed mobile application for smartphones is diagnosing
ailments via mobile technology aided by a panel of doctors,” the report
said.
It
was conceived by 20 four Labs’ Werner Erasmus, who won the first
position in Nokia’s Calling All Innovators Africa 2009 competition with
a prize money of $85, 000. The mobile application, called ‘Afridoctor’,
was designed as an alternative information service for people who have
limited access to health care.

Only smartphones can do this
An
engineer, Olusola Teniola, while commending this innovation, however,
expressed concern about the kind of phones that can perform such
serious operation.
In
an email, the chief operating officer of Phase3 Telecoms Ltd. said,
“The ability to identify innovative solutions that address local
problems is a probable cause for this clever application that can
reside on an open-platform operating system. Unfortunately, this is
limited to high end smart phones running a specific release of the
Symbian operating system.
“Any
application like this becomes so important, in the sense that it helps
the average man on the street to do what he wants to do in a most
convenient manner,” added Mr Teniola.
Chandra
Prakash, a radiologist at the Lagos State University Teaching Hospital
(LASUTH), Ikeja, Lagos, also commended the innovation.
“I
think this is a good idea, as it is a way of communication between
patients and doctors; but there are limitations,” Mr Prakash said.
“For
instance, it affects the privacy of the doctor and his duties at
hospitals and the service would not be good for some emergency cases,
where the patients would have to come in personally to see the doctors
and needs immediate attention.
“The
benefit is that it would definitely save the patients’ time waiting in
the hospital for minor routine cases and allow the doctors to focus on
important cases. Appointment to see a doctor might take a long time, so
that can be narrowed down through the use of this application,” added
Mr Prakash.
Rasaq
Giwa-Osagie, an estate agent and a Nokia mobile phone user, equally
commended it saying, “The innovation is a brilliant idea, but it is not
exactly better than going to the hospital for diagnosis. But it serves
as a substitute way for busy individuals to access their health
issues.”
Unfortunately,
no Nokia official in Nigeria was willing to comment on the application
or whether there is a possibility that it would be available in Nigeria
in the future.

The eight rescued
banks have started reaching out to its minority shareholders to support
the recapitalisaiton plans of the Central Bank of Nigeria (CBN).

The board and
management of Finbank met with various shareholders groups in Lagos
yesterday to forge a common ground. In the last few weeks, similar
meetings were held by Intercontinental Bank and Oceanic Bank. The bank
promised shareholders that they would have the final say on those that
would be approved as new investors in the banks.

Suzanne Iroche,
Group Managing Director and Chief Executive of Finbank, said there was
need to recapitalise the bank as quickly as possible. “If CBN takes
away the forbearances without adequate capital and liquidity,
immediately, we are failed institutions and we can’t afford that,” she
said. “An institution that operates negative capital is an institution
which loses value over time.”

State of the banks

She added that the
bank cannot continue to operate with negative capital as 88 per cent of
its loans are currently not performing. “We have taken deposits and
shareholders fund up to N88 billion which is yielding nothing for us
but that is costing us money,” she said. “We have to resolve this as
quickly as possible.” Mrs Iroche also explained that the bank’s toxic
assets is about N156 billion, while insider related loans totals about
N25 billion, out of which only N2.7 billion has been repaid since
August. She subsequently expressed the need to support the
recapitalisation plans of the Central Bank so that the institutions can
get new lease of life.

Shareholders who
spoke said the intervention by the CBN was timely as it saved the banks
from the brink. The Chairman of Onitsha Zone Shareholders’ Association,
Goodluck Akpore, said the intervention by the CBN is what has kept the
banks afloat. “What CBN has done is to save my investment and that is
why we pray for Lamido Sanusi,” he said.

Minority interest

Nona Awoh, another
shareholder, said the banks should make sure that the interest of
minority shareholders are taken into consideration. Mr Awoh said beyond
taking equity positions, the incoming investors must be made to make
long term commitments to the banks. “The new core investors should take
long term positions by also taking debenture,” he said. “It is
important for the board to reach an arrangement that would be in the
interest of the bank.”

Emmanuel Ikwe, the Chairman of Coordinating Committee of Zonal
Shareholders Association, said the shareholders would resist any
underhand negotiation that would hand over the banks to persons of
questionable character. “If you want us to support you, we need to know
those who are going to be the core investors,” he said. “You have to
find out as a board the credibility of these people. CBN has taken a
decision that is good.” Sunny Nwosu, the National Coordinator,
Independent Shareholders Association of Nigeria, however said only the
initial shareholders have a right to determine those that will
recapitalise the banks. “The Central Bank said it has guaranteed
depositors. So we say give our banks to us since you have guaranteed
depositors let us recapitalise it because we are risk bearers,” he
said, adding that the way the CBN was going about the recapitalisation
plans was in the manner of taking institutions away from those who have
toiled to build them over the years.