Nigeria Content Online

Egypt’s gross
domestic product (GDP) accelerated to an annualised 5.9 percent in the
three months to end-June, indicating the country had rebounded from the
global crisis, a cabinet statement said on Wednesday. Growth for the
entire financial year to end-June rose to 5.3 percent from 4.7 percent
in 2008/09, the statement said.

“This
indicates a near full recovery from the global crisis and a return to
the path of rapid economic growth similar to the period before the
global crisis,” the statement quoted Economic Development Minister
Osman Mohamed Osman as saying. Government officials have forecast that
in the fiscal year that began on July 1 the economy could grow by 5.8
to 6.0 percent.

South Africa’s
consumer inflation slowed more than expected in June, official data
showed on Wednesday, leaving the door open for another rate cut before
year-end.

Statistics South
Africa said on Wednesday, consumer inflation slowed to 4.2 percent
year-on-year in June from 4.6 percent in May, beating forecasts of 4.5
percent. Inflation slowed for the sixth consecutive month.

The central bank
said although the local economic recovery was continuing, signs pointed
to a less favourable growth outlook in the second quarter, after the
economy exited its first recession since 1992 in Q3 2009.

The rand was
trading at 7.36 against the dollar at 0956 GMT, from 7.3650 before the
data was released at 0930 GMT. The yield on the 2015 government bond
dipped to 7.635 percent from 7.69 percent.

Crude oil exports
are set to top 2 million barrels per day (bpd) for the third month
running in September, trade sources said on Wednesday, as Nigeria
improves output reliability. Nigeria will export an average of 2.10
million bpd of crude oil in September, up slightly from a revised 2.08
million bpd in August, according to data from oil companies and
traders. Nigeria will again far exceed its crude production target
agreed with the Organization of the Petroleum Exporting Countries,
which has been set at 1.67 million bpd, trade sources said.

OPEC
agreed on output curbs in 2008 to support falling oil prices, which
dropped from a high of nearly $150 a barrel in July 2008 to below $33
in December the same year. With U.S. crude oil trading mostly between
$70 and $80 per barrel, OPEC members have said they are happy and that
there is little incentive to adhere to output targets.

The nation’s
economy grew by 7.68 percent in the second quarter, the Central Bank of
Nigeria Governor, Sanusi Lamido Sanusi said on Wednesday, up from 6.68
percent the previous quarter. “The economy has maintained a steady
sustainable growth of 7.68 percent, especially in the non-oil sectors
led by agriculture, retail trade, services and construction,” Mr Sanusi
told reporters after a cabinet meeting. The Central Bank forecasts
sub-Saharan Africa’s second biggest economy to grow by 7.53 percent
this year, up from 6.66 percent in 2009. Mr Sanusi gave a bright
outlook for the OPEC member’s economy, with moderate inflation and a
stable foreign exchange market.

“The Nigerian economy remains resilient and the near to medium-term outlook is positive,” he said.

The Nigerian naira
strengthened to 150.30 to the dollar on the interbank market on
Wednesday, from 150.41 the previous day, due to weaker-than-expected
demand for the greenback at the official window, traders said.

The Central Bank of
Nigeria sold $190 million at 148.60 at its bi-weekly forex auction on
Wednesday, less than the $200 million offered and compared to $200
million sold at 148.67 on Monday. Dealers said weaker demand and the
inflow of an unspecified amount of dollars from the Nigerian Liquefied
Natural Gas (NLNG) company helped boost the naira. Oil companies
operating in Africa’s top energy-producing nation regularly sell
dollars toward the end of each month to meet their local funding
obligations. Traders said the naira could appreciate slightly before
the end of the week if more energy firms sell dollars as expected.

No director has been changed or reassigned in the
Nigerian Communications Commission (NCC), the acting executive vice
chairman of the commission disclosed last night.

“NCC has 11 directors and they are still directors,
only one of them, Fayomi, is on leave,” said Bashir Gwandu, the vice
chairman.

Mr. Gwandu added that only junior officers, among
which were a protocol officer and store keeper, were changed. “Most of
those changed were redundant,” he claimed.

Mr. Gwandu denied categorically that directors were changed.

The commission has been in the public eye since the
exit of Ernest Ndukwe, its first executive vice chairman. The
reassignment of its staff came after President Goodluck Jonathan last
Thursday, forwarded Eugene Ikemefuna Juwah to the senate as the
commission’s new executive vice chairman.

But an internal memorandum, allegedly issued by Mr.
Gwandu last Friday, ordered a reassignment of eight staff, saying this
was “necessitated by the absence of key management staff in some
sections of the NCC and the lack of adequate manpower in some units.”

Those affected include Sikiru Ibitoye, an assistant
director in the public affairs department, who was moved to the
Universal Service Provision Fund, an NCC subsidiary, as acting
secretary/chief executive.

Mr. Ibitoye took over from Funsho Fayomi, a director,
who commenced his annual leave on Monday. Mr. Fayomi has been head of
USPF since 2007. Felicia Onwuegbuchulam, an assistant director and
head, funding and subsidy, USPF, was moved to finance department. M. B.
Dari, a senior manager, takes over as head, funding and subsidy, USPF.
He was in the internal audit department.

Other postings are Basil Okoye, who moved from USPF
to public affairs, and Austin Odo, formerly of the Lagos zonal office,
who was moved to the office of the acting executive vice chairman as
special assistant.

Usman Mamman and R. Ramalan, both of corporate
planning department, were moved to legal/licensing. Phoebe Danyi moves
to USPF audit, from the compliance, monitoring and enforcement
department.

The Nintendo game in Japan has unveiled its latest game called
the Nintendo 3DS, expected to offer more immersive gaming experience than never
before.

The game, unveiled on June 15 at the E3 Expo event, held at Los
Angeles, California, United States. The Nintendo 3DS is a portable game console
that allows users experience and enjoy intense 3D games with a complete new
look and feel, without the need of special glasses.

The easily pocketable device also makes it convenient for
enjoying gaming experience while on the go.

Along with the phone launch is a substantial list of upcoming
games that would be played on it, and these include Metal Gear Solid, snake
eater 3D, Resident Evil Revelations, Samurai Warrior and others.

“The additional dimension of depth in 3D makes it easier for
players to judge distances while giving developers a new tool to create games
and experiences that play with both height and depth,” said Nintendo video game
designer, Shigeru Miyamoto, who pioneered the fully rendered 3D video game
world with Super Mario 64TM .

Game Design

Nintendo 3DS has a 3.53 inch top screen and a 3.02 inch bottom
touch screen. It also has three cameras – one inner and two outer – to deliver
the 3D effect and take 3D pictures. It includes a motion sensor, a gyro sensor,
and even a Slide Pad that allows 360-degree analog input.

The portable game comes with approximate dimensions of 5.3
inches wide, 2.9 inches long, 0.8 inches tall, and an approximate weight of 8
ounces.

For game control, there are A/B/X/Y face buttons and control
pad, L/R buttons, start and select buttons, and a “Slide Pad” that allows
360-degree analog input.

The console’s 3.53 inch widescreen LCD display top screen
enables 3D viewing without glasses, has 800×240 pixel resolution (400 pixels
are allocated for each eye to enable 3D viewing).

It has a touch screen of 3.02 inch LCD with 320×240 pixel
resolution. For fun picture taking, it comes built with cameras, one inner
camera and two outer cameras with 640×480 pixel resolution.

Gaming power

It enables wireless communication in the 2.4 GHz band. Multiple
Nintendo 3DS systems can connect via a local wireless connection to let users
communicate or enjoy competitive game play. Systems also can connect to LAN
access points to access the Internet and allow people to enjoy games with
others.

Nintendo 3DS hardware is designed so that even when not in use,
it can automatically exchange data with other Nintendo 3DS systems, or receive
data via the Internet while in sleep mode.

It has a game card of 2 GB Max at launch, embedded microphone,
stereo speakers positioned to the left and right of the top screen, and lithium
ion battery.

It has a port that accepts both Nintendo 3DS game cards and game
cards for the Nintendo DSTM family of systems, an SD memory card slot, an AC
adapter connector, a charging cradle terminal and a stereo headphone output
jack.

Parental controls will be included for underage users.

Pricing

Its price has not been announced yet.

The end may yet not be in sight in the lingering effort by the
Central Bank to sell off the eight banks that were rescued last year.

After injecting N620 billion to resuscitate the banks, the
Central Bank plans to sell the institutions to foreign and local investors in a
bid to keep them afloat and ensure that they are better run.

However, shareholders of the affected banks insist that the
banks will only be sold on their own terms and not according to whims of the
regulator.

After a meeting held with the shareholders in Abuja two weeks
ago, Lamido Sanusi, the Central Bank governor, cautioned that should the
on-going process to recapitalise the affected banks be frustrated, the CBN
would have no other option than to go for liquidation as provided by the
existing legal framework.

Central Bank cannot sell
banks

In what amounts to double speak, Mr. Sanusi said recently that
the Central Bank would not sell the banks as it is not its business to do that.
He said the Bank only recommended some reputable financial advisers, who are
working with the board and management of these banks to source, and negotiate
with any of such investors that can create some value for the affected banks.

But Sunny Nwosu, national
coordinator of the Independent Shareholders Association of Nigeria said the
shareholders cannot trust the executive directors appointed by the CBN.
According to Mr. Nwosu, shareholders will prefer to negotiate with the non
executive directors not appointed by the CBN.

He insisted that the CBN cannot sell any bank because it does
not have the power to sell what does not belong to it. “The only instrument is
for the CBN to liquidate and transfer to the Nigeria Deposit Insurance
Corporation and these two options will be too heavy considering the current
condition of our economy,” he said.

Boniface Okezie, chairman of the Progressive Shareholders
Association of Nigeria said the shareholders should be the ones to decide how
the banks will be sold, stating that a sale supervised by the CBN may not be
transparent. “If the CBN says it has no agenda, then it should allow the
shareholders to recapitalize the banks,” Mr. Okezie said. Mr. Okezie wanted the
CBN appointed directors need to be withdrawn in order for the negotiation for
the sale of the bank to be transparent.

Depositors’ safety

Mr. Nwosu said since the CBN has already guaranteed the safety
of depositors, then the shareholders should be allowed to salvage what is
remaining of the banks. “We have opted for recapitalisation but the CBN is bent
on getting its friends outside the country to buy these banks. The governor
said if any shareholder comes up with N100 billion, he will hand over the bank
to the person,” he said, adding that from the foregoing, the shareholders no
longer trust the CBN to be fair in its dealings.

He said shareholders would need to be given ample time in order for the
shareholders to come up with the funds to recapitalize the banks. “CBN is
saying three months but we need between 12 to 18 months to recapitalize these
banks, after all, most of the problems emanated from the CBN action,” he said.

Mr. Okezie said since Wema and Unity banks were given extension of eight to
nine months, then the rescued banks should be given more than a year for them
to recapitalise. “We all agree that there is need to recapitalise,” he said.
“The banks cannot raise funds now from the capital market or rights issue, so
the only option is to bring in core investors. If you are bringing in core
investors, you must insist that they have a track record of good corporate
governance.”

Some finance experts have said that universal model of banking
is not the main cause of the current global financial crisis.

While the Central Bank is ready to adopt the narrow model
banking practice, following the stress test it carried out on the banks,
analysts at a public lecture organised by the Association of Corporate Affairs
Managers of Banks (ACAMB) in collaboration with The Banker, a banking and
finance magazine, on Tuesday, in Lagos, said such action does not necessarily prevent
future crisis.

Brian Caplen, managing editor of The Banker Magazine, a
subsidiary of the Financial Times of London, said the future shape of the
financial system shows that each country will have to take the best choice on
which banking practice suit its economy.

Mr. Caplen, who spoke on the ‘Challenges facing banks globally;
how Nigeria stakeholders should respond,’ said the current global financial
crisis saw many universal and narrow banks collapsed, while some stood the test
of time.

He said banks globally got into trouble because of “lending to
poor credits and insufficient capital.”

He added that the search for profits and shadow banking also
contributed to the depth of the crisis:

“National asset bubbles were responsible for the financial
crisis in countries like Nigeria, Spain, Ireland, and the US, while too much
leverage and wrong funding model led to the fall of other countries.”

He said the crisis also occurred because regulators were not
looking out for how risk was building up in the financial system.

Lessons learnt

Meanwhile, Kingsley Moghalu, CBN deputy governor, financial
system stability, said the lesson learnt during the current crisis has shown
that “in order to ensure financial stability, finance must be connected to the
real economy.”

Speaking on ‘The global redesign of banking; the stake for
Nigeria,’ Mr. Moghalu said, “The challenge that faces the whole world is that
of whether or not we can ever prevent another financial crisis. We have seen
the rise of financialisation over the last 15 to 20 years.

“All sort of instruments have come into the market and they have
been trading to make a profit. In the process of profit making, I think a lot
of people have lost sight of what finance should be. They have seen finance has
an end in itself and, therefore, created some quite dangerous bubbles which
bust recently.

“When you have a bank that is into insurance, stock broking,
asset management, pension, and all sort of things, then that is a financial
supermarket; it’s no longer banking. And when you have financial supermarket,
it increases leverage, and that is a huge exposure to risk. You have much more
risk with the universal banking model than when a bank sticks to its core
business of banking,” he said.

Mr. Moghalu said to achieve global stability, “the macroeconomic
environment, business models, risk management, and enhanced regulations must be
paid attention to.”

The major
ingredient that can sustain any progress in the banking sector is the
return of investor confidence, which finance analysts say has now been
shattered.

“We firmly believe
that a sustainable recovery in Nigerian equities will only come with a
return in investor confidence in the banking sector,” Kato Mukuru,
director, head of African Research at Renaissance Capital, an investing
banking firm said.

“This is
particularly important because when you glance at the solvency
yardsticks of healthy banks, one does not get the sense of crisis, but
we have been living a crisis – a crisis of confidence”

“Investor
confidence in this once exemplary industry was shattered by the Central
Bank / NDIC audit led by Governor Sanusi last summer. During this
forensic audit we saw former banking giants, like Intercontinental and
Oceanic fall spectacularly.”

“When I read about
the CBN’s recent revisions to its previously published prudential
guidelines, I finally began to appreciate what had happened in the
Nigerian banking system during the audit process” Mr. Mukuru said in a
report.

“The differences
between the likes of an Oceanic and GTB before the audit were the same
as the differences between a terminally ill patient (with no clear
symptoms) and a healthy one going into a physical examination. When
pushed and prodded, the healthy patient may still walk out of the
examination with a couple of bruises, while the terminally ill patient
may never make it out of the examination centre.

“With the benefit
of hindsight, this is exactly what the Central Bank did to the Nigerian
banking system last year. Actually, the Central Bank even went a step
further by prescribing medication to the banks before the examination.
The purpose of this medication being that, it would help the auditors
identify the problems regardless of how well the patient thought it was
at concealing them.”

The firm says so
far, the Central Bank governor has asked the banks to disclose all data
related to any loans to Transcorp and Virgin Airline, which were two
systematically important non-performing loans; bring all commercial
papers and bankers acceptances on-balance sheet, which stopped the
banks from repackaging bad loans; disclose all data on energy loans to
define the extent of all exposures to oil and gas, particularly
downstream; and cap all government exposures to 10 per cent, which
forced some banks to de-risk rapidly and expanding the discount window,
which was the primary liquidity support for the ailing banks.

Mr. Mukuru however
said he is optimistic that investors have lots of reasons to patronise
the market. “In this regard, we believe that there are still reasons
for investors to make conviction calls on the market”. The Central Bank
also said investor confidence has started creeping into the industry.

On Monday, the
international Finance Corporation announced that it is increasing its
support to major financial institutions in Nigeria.

Mr. Sanusi said in
a Reuters report on Tuesday that there was still interest from
potential investors in all of the banks rescued in a $4 billion bailout
last year.

“I can confirm that there are parties interested in combining with
each and every one of the banks,” Mr Sanusi told a news conference in
the capital Abuja, “but at this point, it is about interest. Whether we
will link up these deals depends on the negotiations. So far things are
looking positive.”