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Amidst concerns,
the Central Bank has issued a review of the guidelines for the proposed
specialised banking, and announced plans to discontinue the issuance of
universal banking licenses to operators in the nation’s banking
industry.

Last week, the
Central Bank published a review of the guidelines for the proposed
specialised institutions – in pursuance of its objective to promote a
sound financial system in the nation.

“In furtherance of
the strategic imperatives being implemented by the Central Bank to
reform the Nigerian financial system, the Central Bank is conducting a
comprehensive review of the guidelines for the licensing of Specialised
Institutions which include Non-interest banks, Primary Mortgage
Institutions, Microfinance banks, Development banks and Discount
Houses” the bank stated in a circular on its website.

“Accordingly, the
minimum paid-up capital requirement for the following specialised
institutions shall, by applicable regulations and guidelines soon to be
issued by the Central Bank, be revised.

Non interest bank
(Regional) N5 billion, Minimum paid-up capital, non- interest Bank
(National) N10 billion and primary mortgage institution N5 billion” the
Central Bank said.

As part of
transitional arrangements, the Central Bank says it will provide
guidelines for the recapitalisation of existing specialised
institutions that will be affected by an increase in minimum capital
requirements.

It also said that
following the recent repeal of the universal banking guidelines, and
the imminent exchange of universal banking licences by banks for
licences permissible under the Banks and Other Financial Institutions
Act, the Central Bank deemed it necessary to expound upon licensing
conditions for merchant banks, with the aim of providing clarity to the
market on the terms on which merchant banking business may be conducted.

The Central Bank
also added that the draft framework for the regulation and supervision
of Non-interest banks which was issued in March 2009 is being finalised
based on feedback received from industry operators. In addition, the
framework for primary mortgage institutions is being reviewed and
finalised in terms of operations and funding for the mortgage sector.

It said primary
mortgage institutions, microfinance banks, development banks and
discount houses shall continue to perform their specialised roles
within the framework of existing guidelines pending the issuance of
revised guidelines by the Central Bank.

Concerns abound

Even though some
finance experts say doing away with universal banking is a positive
move, bank officials say the move would not address any of the
challenges that caused the banking crisis last year and that it is not
really a realistic project at this point in time, nor will it improve
proper regulation and /or good corporate governance.

“By creating three
tiers of commercial banks alone, the Central Bank might have worsened
the regulatory space” a senior staff of the First Bank said. He added
that the major problems of the banking industry were poor corporate
governance and inadequate regulatory monitoring, which led to the
crisis.

“And because we
cannot prove that the absence of these tiers was the problem with the
industry, it is hard to understand how they may be a response to it” he
said.

However, some
finance experts say that the embargo on universal banking is not likely
to have adverse effects on Nigeria’s banking climate if the
requirements for such transitions are met appropriately.

Akinbamidele
Akintola, a finance analyst at Renaissance Capital, an investment
banking firm said that “I do not think this (specialised banking)
should adversely affect the banking industry but the concern is that
does the Central Bank of Nigeria have the man power, efficiency and
capacity to really execute this? That is the concern” he said.

Better Regulation?

In March when the
policy was announced, some finance experts said it was a good idea.
Gamaliel Onosode, a leading boardroom player in Nigeria’s corporate
environment said the policy was a welcome one as he did not think it
was a good idea that universal banking was introduced in Nigeria.

Mr. Onosode said
the practice had weaken transparency in terms of effective management
and control of the banking sector. He added that if the regulators had
improved on the quality of supervision and regulation, without
compelling all banks to comport to a business mode in terms of size, it
would have been better.

In March, the
Central Bank said it would soon discontinue the issuance of universal
banking licenses in line with the ongoing reforms in the banking sector
aimed at supporting the stability recorded so far.

Under this new
policy, operators would apply for separate licenses for each model of
banking operations, including commercial banking, micro-finance
banking, mortgage banking, and investment banking.

The Central Bank will spell out the details of the policy in a
transitional period that would last between 18 and 24 months to ensure
that normal banking operations are not disrupted.

When you are writing or updating your
will, it is important to carefully consider your choice of an executor.
This role, a largely administrative one, comes with huge responsibility
and can be extensive and time consuming. The work begins at the time of
death, from locating the will, and continues until taxes and debts have
been paid and what is left has been distributed in accordance with the
will. The objective is to ensure that all the deceased person wishes
are properly carried out.

It is important to pick someone whom
you know will be committed and wiling to accept the legal
responsibility and of course, someone you feel able to trust.
Naturally, you also want your executor to be someone who is quite
healthy and likely to survive you; for this reason it makes sense to
consider someone younger than you.

Should you choose a family member?

There are some advantages to choosing
an executor with whom you have a close personal relationship and many
people nominate a close relative to perform this role. One must be
conscious of the fact that a trusted family member is likely to be
emotionally affected by the loss and may find it unduly stressful to
handle executive responsibilities so soon. There will be a need for
absolute objectivity and impartiality without the emotional drain of
being at the centre of any potential family feud.

Where you decide to nominate one of
your adult children, you should be conscious of the fact that the
appointed child will have more power than his or her siblings; you want
to ensure that this doesn’t end up creating conflict instead of
ensuring that your family stays united after your death. An executor
should not have any conflict of interest and ideally a beneficiary to
an estate should not be the sole executor as the position can be used
to gain advantage in the distribution of property.

A common choice for many is a relative
who happens to be a lawyer. Whilst being a lawyer does have advantages
in performing an executor’s role, it is by no means absolutely
necessary. The most important thing is that it is someone that is
intellectually capable, financially responsible, and has the time to
pay attention to what could be the administration of extensive
financial and legal matters and has the respect of family members.

Or should you choose a professional?

An alternative to choosing a relation
or close friend is to engage the services of professionals that have
some expertise in estate planning such as a trust company or a law
practice; they would assign an individual or team to handle your estate
matters. There are stories abound of weaknesses in the role so it is
important to seek out a strong, credible company that comes
recommended, to protect your family from the possibility of an
unscrupulous or incompetent executor mismanaging their inheritance.

It can be expensive to hire the
services of a professional executor; indeed many will only deal with
estates above a certain value; this is appropriate for someone with
complicated intentions or a very large estate but largely out of the
reach of most people. If you choose to engage the services of a
professional, agree their fees in advance. Some will charge an up-front
fee, whilst others may arrange to take their fee from estate
distributions or a percentage of the value of the estate.

One of the benefits of a professional
executor is the existence of a somewhat formal relationship. In our
society where family relationships are so intertwined, whilst it does
help to have a little distance to make for objective decision-making, a
deep personal knowledge of the vagaries of a particular family is often
required. The family would value fairness, flexibility and sympathy
particularly where there are complex arrangements. It is important that
your executors should work closely with you during your planning stage
to develop an in depth understanding of your intentions so that they
are more able to carry out your wishes in accordance with your
instructions.

Naming multiple executors to provide
checks and balances on the decision-making process makes sense, but
remember that the executors must usually agree on all decisions and
sign off on all paperwork, which can become cumbersome.

Have a backup

Revisit your choice of executor once a
year to make sure you still want them to perform this role. Often there
might be reason why you think they may no longer be appropriate. If you
do decide to make a change, don’t forget to have the documents amended
as early as possible to reflect this to be sure that your wishes are
indeed carried out. It is also wise to have a backup in case your first
choice is unable or unwilling to perform the tasks when the time comes.
An advantage of engaging an institution to act as executor for your
estate is that it offers continuity.

Trust, Trust, Trust

Because your executor would be party to
intimate knowledge of your family’s assets, and their actions can have
far reaching consequences on the future of those assets, your primary
consideration should be to choose someone or an institution that you
can trust totally; if they disregard your wishes, they can be sued,
along with your estate, and tie it up in litigation for several years.
In the final analysis, it won’t matter to you what happens since you
will not be there, but you do owe it to your loved ones to try to leave
things as orderly as possible.

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When was Preon founded and what has it accomplished?

I started the
company about 15years ago. We started working mostly with users of
critical power for an application called data-serve, which is basically
on computers. So through that experience I had to understand the
concept of generation of power because that was what data-serve had all
through the United States.

In 2000, four years
after I started the company, being a chemical engineer, I became very
fascinated with the cutting edge like jet-engine. It produces power
that is very clean, quiet, and economical to run, so I thought I’m
going to develop a part of pre-odd that promotes the generation of
power on site but will be generating power continuously.

First, we will be
generating power on a stand-by mode which was what we were doing for
Data-centres. I started promoting this concept globally. The city of
Chicago was our largest client with a lot of people in the city, we
were providing them with stand-by generators and for the Chicago
Housing Authority, we provided power for the CTA, (Chicago Treasury
Authority) and we also provided all the other back-up power for the
Chicago public schools. So we know a lot of people and its being a
great door opener for us and that is really how we cut our teeth. It
took us about four years of meetings with the city of Chicago to get
them to finally accept this crazy concept of acid-generation of power

Your company is involved in the generation and distribution of power, how do you do this?

We are into
generation by using micro turbines which are quite easy to manage and
transport and we use them as cells to provide power. The advantage of
this is that if you use micro turbines you can easily manage any
problem if they arise and apart from that you don’t need a large and
expensive one to work efficiently.

The other
technology we use both in the United States and in other places where
we are involved in power generation is called Gasification. Basically,
what happens here is that you are applying heat to the garbage and it
gives off gas; t gives 10 times more gas out and converts them to
energy to keep the whole process going. It kind of sets-up a chain
reaction and as you keep taking out the heat, you keep storing it as
the process is going its gives-off a gas called bio-gas or syn-gas
(synthetic gas) then you can take that gas and burn it again, in a
micro-turbine to generate more electricity.

This concept is
really being developed right now in the United States. We are working
in Puerto Rico, which has a lot of land-fills as an Island. They’ve got
nowhere to send the garbage and this is a serious problem for them so
we are educating them to let them know that you are necessarily
restricted to bio-gas because a lot of these land-fills. There is no
gas collection system at all, so we are educating people that even the
land-fills that people thought cannot be recovered, you can just go
there, and either literally take the fresh garbage and process them or
use another technology where you can actually go into an old land-fill
and dig up. All the old garbage is sorted out to take out recyclables
and this process could be very applicable to Nigeria because those
processes are very labour intensive. It is a great process that will in
turn provide lots of jobs for people in a country like Nigeria. It’s
good for the environment, it’s got bio-energy, renewable energy.

These technologies
are available today and that’s what I spend a lot of my time on,
explaining to people that on these land-fills, there is a lot of
potential. Nigeria can get a lot from this. The fact that Nigeria is
flaring gas; is such an extreme thing that we also need to make good
use of that first. And once we (Preon international and Nigeria) are
there, with our business and personnel in there, we plan on addressing
this through a number of initiatives like dealing with land-fills
issues in Nigeria and all over the place including the US but island
countries are really-really bad because there is nowhere to go. It all
burns out itself. It’s the same combustion energy, its bio-gas so it is
very synergistic to what we are doing now.

Apart from
the US, which other country have you being able to reproduce this kind
of technology and do you have plans for others?

We really are more reactive than
pro-active as to where to go with this. If Sam hadn’t liaised with us
we wouldn’t be in Nigeria. I will wait till we find the right personnel
and atmosphere to work in any country. Your business processes is as
good as your people. We were recently approached by a company in
Croatia and we have met with some governors and mayors there who wanted
us to help address issues of land-fills, and what to do with municipal
solid waste. They have a very expensive electricity and huge gas cost.
I will not underrate the opportunity in Nigeria because of this
gas-flaring phenomenon going on. So we are going to go smart and go to
where we know we can make money and wait for the right people.

The Central Bank of Nigeria (CBN) has said it is working with
the Securities and Exchange Commission (SEC) towards creating a single
registrar for all securities in the capital market.

Samuel Oni, CBN Director for Banking Supervision, who stated
this at a workshop in Benin, Edo State capital, said this is part of effort at
ensuring stability of the Nigerian financial system.

Registrars are
institutions that keep the register of shareholders of a company and coordinate
the payment of dividends and other fiduciary benefits that come with owning
shares in such companies.

There are currently over 10 registrars handling the register of
the over 200 listed equities on the Nigerian Stock Exchange as well as several
other public companies in the country.

Pillars of reforms

Mr. Oni said this is part of the four pillars of the banking
system reforms which the Central Bank started on 14 August last year when it
intervened in some banks that were deemed to be weak. The four pillars,
according to him, are; ensuring the quality of banks, establishing financial
stability, enabling healthy financial sector revolution, and ensuring that the
sector contributes to the real sector. “To ensure financial stability, the CBN
would champion the development of the capital market through the improvement of
its depth and accessibility as an alternative to bank funding,” he said.

The CBN director also
stated that the single registrar would allow for better coordination and
regulation of market activities. “To restore public confidence and credibility
in the banking system, the CBN carried out an exercise to review, evaluate and
determine the quality of bank portfolios especially their exposure to margin
lending,” he said.

Arumah Otteh, the Director General of SEC, recently stressed the
need for close collaboration with all other regulatory agencies in the
financial sector towards maintaining close monitoring and regulation of
operators. Ms. Otteh said the Financial System Regulatory Coordination
Committee (FSRCC), which comprises the CBN, Nigerian Stock Exchange, National
Pension Commission, National Insurance Commission, Corporate Affairs
Commission, provides the platform for the regulators to do a better job. Mr.
Oni explained the Central Bank was working at reducing the informal sector and
ensuring greater financial inclusion as the economy size not captured by
official data is too large to be ignored. “Enhanced financial inclusion would
result in more accurate measurement of economic outputs, increase the tax base
and tax revenue as well as more effective policy development and more efficient
use of financial infrastructure,” he said.

Late intervention

Biodun Adedipe, managing partner of Biodun Adedipe and Co. said
the intervention of the CBN in the banking sector last year that resulted in
the injection of N620 billion to rescue eight distressed banks was inevitable.
“As far back as 2006/2007, I expected the Central Bank to have conducted a credit
audit which should have been the major plank of the stress test that the CBN
did between July and August last year,” he said. “So clearly, the fault was on
both sides of the divide not only on the part of operators alone.”

Mr. Adedipe added that the CBN should give current shareholders the right of
first refusal before inviting other interested parties to pick up the eight
rescued banks. “The CBN should engage operators more in dialogue and ensure
that its policy initiatives are inclusive rather than creating the impression
that the ideas are lacking here or that everyone around is a rogue,” he said.

Just 24 hours after
gaffe-prone Chief Executive Tony Hayward’s head rolled from the
chopping block, candidates for the auction block hit the headlines, as
BP aims to slim down to recover from the thumping losses racked up in
the 100 days since the start of the environmental disaster.

Sources with direct
knowledge of the matter said BP was in talks with India’s Reliance
Industries and Essar to sell retail assets in Africa with an estimated
price tag of $500 million. Its Indonesian unit rushed to pre-empt
speculation its assets there might be for sale. “In Indonesia, there is
no change to our strategy and plans. Indonesia is an important area for
BP,” The company’s Indonesia president, William Lin, told Reuters.
Investment bankers said the assets BP could sell include its stake in
Alaska’s huge Prudhoe Bay oil field and its interest in Pan American
Energy in Argentina, as well as smaller assets in Vietnam, Pakistan and
Colombia.

Lawsuits

More than 5 million
barrels of oil have spilt into the Gulf of Mexico since the undersea
leak began in late April, according to U.S. government estimates. The
spill, caused by an explosion that killed 11 people, has devastated
communities and fragile ecosystems along the Gulf Coast and killed or
injured countless sea creatures and coastal birds. It has also prompted
a moratorium on deepwater oil drilling. The leak was plugged two weeks
ago, and later on Wednesday BP is scheduled to provide an update on
when it could begin the final procedure to permanently seal the well.
With private lawsuits piling up, attorneys hoping to lead the fight
against BP are heading to Boise, Idaho, as a special panel considers
how to handle the cases.

A group of seven
federal judges is convening on Thursday to consider which court, or
courts, should oversee the hundreds of spill-related civil suits
brought by injured rig workers, fishermen, investors and property
owners. The list of investigations surrounding the spill is also
growing. The Washington Post said several government agencies were
preparing a criminal probe of the action of at least three companies
involved in the spill, citing law enforcement and other sources. The
U.S. Securities and Exchange Commission and Department of Justice have
also launched “informal enquiries” into securities matters related to
the spill.

BP shares down

BP’s London-listed
shares were down 1.7 percent at 399.1 pence at 1:54pm, as investors
digested Tuesday’s news of a second-quarter loss of $17 billion,
including $32 billion in charges related to the oil spill. The company
has lost about 40 percent of its market value since the explosion. “The
critical question remains what BP will look like two years from now,”
analysts at Morgan Stanley said. “Investors will need more clarity on
the impact of asset sales and further reassurances of a cultural change
regarding safety … before BP can regain a multiple in line with its
industry peers.”

Industry executives said it was a good time to sell assets as
relative stability in the oil price in the past nine months makes it
easier for buyers and sellers to agree terms. BP agreed to a $7 billion
sale of oil and gas fields to Apache Corp last week, which valued the
assets at around $19.40 per barrel of oil equivalent. Bob Dudley, who
will replace Hayward as CEO on October 1, on Tuesday called the Gulf
oil spill a “wake-up call” for the entire industry and said safety
would be among his top priorities as the first American to lead BP
tries to patch up the British oil company’s battered reputation. Image
repair wasn’t helped when BP pointed out the cost of the spill would
reduce its taxes, leaving U.S. taxpayers $10 billion worse off.

The struggle over
the location of a refinery in Kogi State has caught the attention of
many Nigerians. The governor is accused of taking the refinery away
from Lokoja to his hometown.

The submission of
this article is that the governor, and all those who made the deal with
the Chinese to build three refineries, should actually be forced to
locate these refineries in not just their villages, but on their own
private land as well.

Why?

Refineries are not
industrial installations that people should wish to be located even in
their enemy’s community. They are extremely toxic and poison everything
and everyone around them. This is well known in the communities close
to refineries in Warri, Kaduna, and Port Harcourt.

Apart from the
release of toxic gaseous emissions into the atmosphere, the liquid
effluents from these refineries are scarcely treated, and are dumped
into water bodies on which local communities depend. The case of Ubeji
community, behind the Warri Refinery, is particularly pathetic.

The community river
and their mangrove swamps were severely polluted and engulfed in flames
in July 2007. Till date, no remediation exercise has been carried out.
You may hear that some compensation has been paid, but what is that
pittance compared to the danger to which the community is permanently
exposed to? What would such minor compensations do when the livelihoods
of most of the citizens have been more or less permanently curtailed?

Other countries examples

The toxic impacts
of refineries are just as bad in other parts of the world. In South
Durban, South Africa, the refineries (owned by Shell/BP joint venture)
were located according to the dictates of the apartheid political
system.

A visit to these
communities today reveals a high incidence of cancers, blood disorders,
and respiratory diseases such as asthma. Indeed, the prevalence of
cancers and asthma is so high that you would hardly find a family
without members that have died from these diseases, or who are
suffering from them. One of the things kids pack as they head to school
is the pumps to use in suppressing asthmatic attacks.

The difference
between the refineries of South Africa and the ones in Nigeria is that
the communities there are organised against pollution and work to
produce evidence through the use of means such as the Bucket Brigades
(who use bucket-like equipment to collect air samples for measurements).

There have been
charges of environmental racism with regard to the location of toxic
factories in the USA. However, one of the most spectacular incidents
involving a refinery in the USA was the huge explosion that occurred at
the Shell refinery at Norco, Louisiana, in May 1988. The fire from that
explosion lasted for eight hours before it was contained. The blame was
placed on rusty pipelines and inadequate preventive maintenance
procedures.

There are several
examples around the world of the negative consequences of siting
refineries in neighbouring communities. One peculiar case is an aged
Shell refinery in Curacao (near Venezuela) now being run by the
Venezuelan state oil company, after Shell sold the refinery to the
Curacao government in the 1980s for less than one dollar. They sold the
refinery because they were faced with the need to clean up toxic dumps
they had created at a cost of about 400 million dollars.

Back to Nigeria, it
is mindboggling to find people fighting to have these installations in
their localities. Those from whose localities they are moved away from
should actually be engaged in thanksgiving and celebrations, rather
than blocking highways in protests! The Chinese have found a business
opportunity because the NNPC has been inept at managing the four
refineries in Nigeria. Must the need to meet increasing demand for
petroleum products force us to open ourselves to be ripped off?

The Chinese are to
build and run the refineries until they recover their investments.
Without terminal dates of when CSCEC would hand over the facilities to
the NNPC, there is a wide room for corrupt practices and unmitigated
exploitation.

Moreover, placing
the refineries on the banks of the River Niger in Kogi State, as well
as on the shores of the Atlantic at Lekki may be ways of democratising
pollution, but these are moves we can ill afford at this time.

Besides, we need
public debates and examination of environmental impact assessments for
these projects before they proceed further.

Nnimmo Bassey is
Executive Director, Environmental Rights Action/Friends of the Earth
Nigeria. He is also chair of Friends of the Earth International.

Rising oil prices and increased production are expected to drive
the nation’s economic growth higher this year although headline inflation is
seen remaining in double digits, a Reuters poll showed on Thursday.

Sub-Saharan Africa’s second-biggest economy, which grew 6.66
percent in 2009, is expected to grow 7.0 percent this year and 7.3 percent
next, according to the median of forecasts from nine analysts who took part in
the survey.

Nigeria is expected to export an average of 2.1 million barrels
per day (bpd) of crude oil in September, up slightly from an anticipated 2.08
million bpd in August, trade sources said this week. “The latest national
accounts data from Nigeria reinforce our view that the economy will expand
strongly in 2010,” said Alan Cameron, sub-Saharan Africa analyst for Business
Monitor International (BMI). “Although seasonal factors related to agriculture
have historically seen growth dip in the first quarter of the year, a sharp
rebound in the oil sector helped lift the overall reading well above the 4.5
percent recorded in Q1 2009.”

Headline inflation was expected to reach 11.5 percent for 2010,
but dip to 9.5 percent in 2011, the survey showed. Consumer inflation eased to
10.3 percent year-on-year in June, its lowest level for more than two years.
Nigeria’s benchmark interest rate has been on hold at 6 percent for more than a
year as the central bank prioritises stimulating growth despite the
inflationary risks.

Higher spending

Nigeria’s fiscal deficit is expected to widen to 3.5 percent of
GDP this year from 3.02 percent last, the second year in a row it will breach a
3 percent target set under a 2007 fiscal responsibility act, according to the
polls. The deficit was seen narrowing to 2.4 percent in 2011.

The National Assembly, last week, approved N445 billion in extra government
spending for 2010, including pay rises for civil servants, doctors and
professors. The supplementary budget was partly offset by a separate bill
trimming the original spending plans by N200 billion to 4.4 billion, but the
net result is still a significant rise in spending over last year.

“Inflation is expected to continue to register in double digit territory; on
the one hand benefiting from a good agricultural performance, but on the other
hand bearing the brunt of expansionary fiscal policies,” said Thalma Corbett,
chief economist at NKC Independent. “The current account surplus is forecast to
remain sizable on the back of a robust trade surplus.” The median forecast for
Nigeria’s current account surplus was 10.4 percent of GDP in 2010 and 10.8
percent next year, according to the Reuters poll.

A
transformation of the Nigerian banking landscape is imminent in the
next few months as banks get set to adjust to the review of the
universal banking model unveiled by the Central Bank of Nigeria (CBN)
in March.

The
reforms, for which the Central Bank expects inputs from operators, were
designed as part of its strategic initiatives for reforming the
Nigerian financial system to “enhance the quality of banks, ensure
financial system stability, and promote the evolution of a healthy
financial sector.”

The
guidelines, which were outlined in a circular signed by J. O. Ajewole,
acting director of banking supervision of the CBN, stated that the new
universal banking licence would be issued to institutions to operate
monoline banking and specialised banking operations.

For
the monoline banking, there would be national and regional banks, while
for the specialised banks, institutions would be allowed to operate
non-interest banking, microfinance banking, and primary mortgage
institutions.

Categorisation

National
banks would operate in Nigeria only with a minimum capital of N25
billion, while those with an eye on the international market would need
to muster N100 billion. Regional banks with a minimum capital of N15
billion, will only operate in minimum of five, and maximum of 10
contiguous states, in addition to having the word ‘regional’ in its
name.

Both
categories of banks are to have, as part of capital adequacy, a minimum
qualifying capital to risk weighted assets ratio of 10 percent, with a
single obligor limit of not more than 20 percent of shareholders’ fund.

National
banks will also be permitted to take current, savings and term
deposits, provide finance or credit facilities, deal in foreign
exchange, and act as a settlement bank. Regional banks can also perform
all these functions, except that they cannot act as settlement banks.

So
far, only First Bank, with N337.4 billion minimum capital, UBA with
N336 billion, Diamond Bank, with N104.8 billion, Guaranty, with N195.1
billion, Zenith, with N337.8 billion, and Access, with N185 billion,
have qualified to operate international banking licence based on the
current minimum capital base.

Banks
with foreign affiliation may naturally fit into this category. Stanbic
IBTC, with a shareholders’ fund of N80.5 billion, is part of the
Standard Bank Group of South Africa, while Standard Chartered Nigeria
is part of the Standard Chartered Group based in the United Kingdom.
Ecobank Nigeria will leverage on the strength of its holding company,
Ecobank Transnational Incorporated with headquarters in Togo, while
Citi will also bank on the strength of its parent company based in New
York.

Other players

Only
Wema had so far indicated interest to obtain a regional banking
licence. According to Tunde Olofintila, the head of corporate
communications, the bank, which has had its recapitalisation deadline
extended to 30 September, said it will shrink the size of its
operations to reflect that status. “A few of our branches will have to
go. Maybe 16 or 17 out of 154 branches,” Mr. Olofintila said.

Unity
Bank, the other bank with a similar deadline extension, has said it
will retain its national banking licence. The bank is currently raising
funds from the primary market through a rights issue, while it plans to
get additional funds from the Asset Management Corporation of Nigeria
(AMCON).

Currently, other banks, including the eight rescued banks, have
shareholders fund below the requirements to operate as international
players. The Central Bank said the banks would be given 12 to 15 months
transitional period within which to adopt a new holding structure that
would incorporate the unbundling of the current banking structure. This
will entail the breakup of the activities of banks under the universal
banking regime into distinct and separate financial business lines, for
which specific licences must be obtained.

A month after the
screening exercise to verify the exact number of NITEL workers has been
concluded, no salary has been paid to the workers, they said on Monday.

Some of the NITEL
workers, who spoke in Lagos, said they were made to think that the
screening exercise was carried out by the federal government to help
ease the payment of their 27 months’ salary arrears. A NITEL worker,
who spoke under anonymity said, “We had thought that by now we would
have received some payment of our salaries but right now nothing has
happened. This is so unfair and the worse human treatment to keep
people for over two years and don’t pay them. I have said this before;
the federal government should let us go than keeping us here to
suffer.” The worker added that the only service on NITEL that is
functioning is the South Atlantic (SAT-3) which the government still
gain some certain revenue from.

In his reaction,
Sule Shehu, NITEL spokesperson said, “Nothing has come out from that
exercise; we only carried out the screening exercise to ascertain our
strength and weaknesses. Nothing has been done about the workers up
till now, no salaries have been paid and no news about when government
would pay the workers or not.” “I know that when the NITEL management
was carrying out the screening exercise, a committee from the federal
government was carrying out its own assignment and they were also
looking at the labour restructuring, preparing ground to pay workers
salary and lay off some workers that I know,” added, Mr. Shehu.

Absenteeism at the workplace

Since last year,
only few workers resume for work in NITEL offices across the country as
the staff regularly complain over unpaid salary arrears. Consequently
NITEL management has turned a blind eye to the development as they
understand the difficult situation the workers experience.

“To be honest not
all of us are coming to work, it’s only some workers that are able to
and we don’t frown at those who don’t come to work,” said Mr Shehu.
“But, if there is any emergency and one of the workers needed is not
around we usually send a token to the workers to come and do their
assignment. We can’t be too hard on workers that don’t come to work
because they have not been paid for over 24 months. Right now, there
are very few workers around and we stay till about 4.00pm to 5.00pm
before closing for the day and this is the same situation in all NITEL
offices around the country.”

In December 2009 the federal government had promised to pay off five
months arrears before the end of January 2010. A total sum of N3
billion was taken from NITEL staff pension fund by Olusola Adekanola
& Co, the liquidator of NITEL which was used to pay their salaries
for one month as opposed to five months that was planned for. Some
workers were paid one month salary in December, while junior staff was
paid two months’ salary. The payment process failed as the liquidator
decided in February 2010 to stop all payment because of alleged
harassment by some NITEL workers.

The Central Bank of Nigeria (CBN) has said it is working with
the Securities and Exchange Commission (SEC) towards creating a single
registrar for all securities in the capital market.

Samuel Oni, CBN Director for Banking Supervision, who stated
this at a workshop in Benin, Edo State capital, said this is part of effort at
ensuring stability of the Nigerian financial system.

Registrars are
institutions that keep the register of shareholders of a company and coordinate
the payment of dividends and other fiduciary benefits that come with owning
shares in such companies.

There are currently over 10 registrars handling the register of
the over 200 listed equities on the Nigerian Stock Exchange as well as several
other public companies in the country.

Pillars of reforms

Mr. Oni said this is part of the four pillars of the banking
system reforms which the Central Bank started on 14 August last year when it
intervened in some banks that were deemed to be weak. The four pillars,
according to him, are; ensuring the quality of banks, establishing financial
stability, enabling healthy financial sector revolution, and ensuring that the
sector contributes to the real sector. “To ensure financial stability, the CBN
would champion the development of the capital market through the improvement of
its depth and accessibility as an alternative to bank funding,” he said.

The CBN director also
stated that the single registrar would allow for better coordination and
regulation of market activities. “To restore public confidence and credibility
in the banking system, the CBN carried out an exercise to review, evaluate and
determine the quality of bank portfolios especially their exposure to margin
lending,” he said.

Arumah Otteh, the Director General of SEC, recently stressed the
need for close collaboration with all other regulatory agencies in the
financial sector towards maintaining close monitoring and regulation of
operators. Ms. Otteh said the Financial System Regulatory Coordination
Committee (FSRCC), which comprises the CBN, Nigerian Stock Exchange, National
Pension Commission, National Insurance Commission, Corporate Affairs
Commission, provides the platform for the regulators to do a better job. Mr.
Oni explained the Central Bank was working at reducing the informal sector and
ensuring greater financial inclusion as the economy size not captured by
official data is too large to be ignored. “Enhanced financial inclusion would
result in more accurate measurement of economic outputs, increase the tax base
and tax revenue as well as more effective policy development and more efficient
use of financial infrastructure,” he said.

Late intervention

Biodun Adedipe, managing partner of Biodun Adedipe and Co. said
the intervention of the CBN in the banking sector last year that resulted in
the injection of N620 billion to rescue eight distressed banks was inevitable.
“As far back as 2006/2007, I expected the Central Bank to have conducted a credit
audit which should have been the major plank of the stress test that the CBN
did between July and August last year,” he said. “So clearly, the fault was on
both sides of the divide not only on the part of operators alone.”

Mr. Adedipe added that the CBN should give current shareholders the right of
first refusal before inviting other interested parties to pick up the eight
rescued banks. “The CBN should engage operators more in dialogue and ensure
that its policy initiatives are inclusive rather than creating the impression
that the ideas are lacking here or that everyone around is a rogue,” he said.