Nigeria Content Online

Professor Maurice Iwu, the INEC Chairman, has disclosed that
there are plans to ensure that Nigerians in the Diaspora can participate in the
next general elections in 2011. This would initially be a pilot programme in
four participating countries, which will include Britain and the United States.

The Acting President of Nigeria, Jonathan Goodluck, during his
recent visit to the United States, had reiterated his determination to ensure
that next year’s elections will not only be free and fair, but fully
representative.

Implement Online/Internet
Electronic Voting System

Based on my research so far, I have not seen any article
confirming the manner in which the above will be achieved.

And so I advocate for an Online/Internet-based Electronic Voting
System, which will provide transparency, mitigate all challenges that may be
experienced in setting up polling booths, dealing with ballot boxes, and any
counting deficiencies, and a host of other issues.

An online electronic voting system is suggested for the
following reasons:

• Nigerians in the Diaspora are very active on the Internet from
  their usage of social networking sites, to news portals, online shopping, and
  many others, and so it makes sense to use the Internet as the host for any such
  voting infrastructure;
• In implementing this system, it will become a lot easier to
  independently moderate the elections and subsequently reinforce its
  transparency and fairness;
• Less capital, less effort, and less labour intensive, as the
  primary cost and effort will focus primarily on creating, managing, and running
  a secure online web voting portal;
• Increased number of voters as individuals will find it easier
  and more convenient to vote, especially in western societies where life is a
  lot more regimented and programmed;
• Voting registration and ID verification, counting and
  summation of votes can all be carried out using the online electronic voting
  system.

How secure is an
Online/Internet Based Voting System?

There are various applications, software utilities, and
techniques that can be implemented to secure online transactions; from correct
implementation of firewalls, encryption, elaborate login authentication
infrastructure, to fixed IP Address mapping and verification, and many more.
Even within the online software application itself, there are application
development techniques that can be implemented to repel any hacking attempts or
unauthorised access.

Such techniques and utilities, as mentioned, have successfully
been deployed in securing online banking transactions, online equities,
commodities or currency trading, and online lottery portals.

Incidentally, I know of an online lottery portal that
experiences over 200 hacking attacks each week, but they are all successfully
repelled by a combination of software utilities, firewalls, effective security
procedures, and a dedicated Internet security team.

Of course, like everything else, one will not get a 100 percent
foolproof guarantee when it comes to Internet security, but implementing the
best practise takes one a long way. There are fortune 500 companies who rely on
the Internet for over 80 percent of their income, and are able to ward off all
such intrusion and still make substantial profit. What is required is the
relevant expertise, the determination, and the will to make it happen.

Again, there are ways, techniques, and utilities in dealing with
large volumes of Internet traffic (10 million simultaneous hits per minute, for
example) to include obviously enough bandwidth and to implement a relevant
queuing system as may be necessary.

Who uses Internet Based
Electronic Voting Systems?

According to reliable news reports, “Internet voting systems
have gained popularity and have been used for government elections and
referendums in the United Kingdom, Estonia, and Switzerland as well as
municipal elections in Canada, and party primary elections in the United States
and France.”

And I dare suggest, that going forward in a world that is
increasingly reliant on the Internet for its news, entertainment (games, social
networking, gambling), real time communication, shopping, banking, etc, it is
only a question of time before the Internet starts to play an integral part in
such an essential aspect of our lives.

Voting is certainly an essential aspect of our lives in which we
make it count, in deciding our leadership or who rules us and how we are ruled,
in determining not only our destiny, but also the destiny of our next
generation.

The writer is an
international IT and Business Process Consultant.

The board of the Central Bank of Nigeria (CBN) on Friday rolled
out guidelines to regulate the operations and activities of banks relating to
granting of loans to investors trading in stocks in the nation’s capital
market.

The bank’s governor, Sanusi Lamido Sanusi, who was briefing
journalists on the resolutions of both the 69th Special Monetary Policy
Committee (MPC) meeting and the board of the bank, said that henceforth, bank
shares are no longer eligible for financing with margin loans.

Mr. Sanusi recalled the recent crisis in the nation’s capital
market, attributing the unprecedented decline in the share prices of most of
the banks’ shares and the resultant severe liquidity problems and shocks in
most banks to the huge losses by investors as a result of the loans collected
from various banks, stock broking firms, capital market dealers.

Loss of capital

Recently, he had attributed the loss of over 66 percent of
capital by the nation’s banking system between December 2008 and December 2009
to the reckless deployment of depositors’ funds by banks, including loans to
customers for investments in bank shares in the capital market in anticipation
of a windfall.

To forestall the recurrence of the crisis, particularly
concerning banks that were exposed to investments in the capital market and
energy sector, he said the apex bank’s Financial Services Regulation
Coordination Committee (FSRCC) resolved to adopt these guidelines to regulate
operations and activities relating to lending, specifically for trading in
stocks in the capital market.

The guidelines to regulate margin lending by banks and stock
brokers, he said, cover provisions for the minimum margin for all such loans,
eligibility rules for all operators, certification for banks and stock brokers
qualified to handle margin loans as well as shares eligibility.

According to the CBN boss, the approved guidelines are subject
to approval by the board of the Securities and Exchange Commission (SEC),
pointing out that, when approved in the next one week, the new regulation would
be jointly issued by the two regulatory institutions.

SME Credit Guarantee
Scheme

Other decisions of the Board, he said, include the establishment
of a N200billion Small and Medium Enterprises (SME) Credit Guarantee Scheme, to
promote access to credit by manufacturers and SMEs in the country.

The scheme, to be funded 100 percent by the CBN, is designed to
unlock the credit market in the country to complement the N500billion Energy
SME Fund recently established to facilitate the development of the infrastructure
in the nation’s power sector.

According to Mr. Sanusi, the primary objectives of the scheme
include the need to fast-track development of the SME manufacturing sector of
the nation’s economy as well as facilitate access to credit by providing full
guarantees to prospective beneficiaries, set the pace for industrialisation of
the nation’s economy, increase access to credit by promoters of SMEs and
manufacturers, as well as create employment opportunities.

Activities to be covered under the scheme include manufacturing,
agricultural value chain, SMEs with assets not exceeding N300 million and with
staff strength of between 11 to 300, as well as processing, packaging and
distribution of primary products.

Private educational institutions are also listed as potential
beneficiaries of the scheme in line with the apex bank’s commitment to human
capital development “The maximum amount to be guaranteed under the scheme will
be N100 million per obligor, which can be in the form of working capital, term
loan for refurbishment, equipment upgrade, expansion and overdraft, while the
guarantee of the facility shall cover 80 percent of the outstanding amount in
event of default, and shall be valid up to the maturity date of the loan, with
a maximum tenor of five years,” he said.

Injecting N500 billion

On the resolutions of the MPC, he said members considered
modalities for the injection of N500 billion into the real economy, pointing
out that, though economic reforms and human capital development remain key
ingredients for economic growth, the CBN would continue to focus on
macroeconomic and financial stability considering its strategic role in
achieving sustainable economic growth.

“The key concerns remain the speed and sustainability of the
recovery process, which is progressing at varying degrees across the different
regions,” he said. “The recovery in the advanced economies is still weak with
real output projected to remain below its pre-crisis level until late 2011.”

Whether you are
just starting out in your career, saving for your children’s education,
a new home, or approaching retirement, investing in bonds can help you
achieve your objectives.

“My name is Bond”

When you purchase a
bond, you are lending an amount of money to a company, a state or
federal government or other issuer for a set period of time. In return,
you are guaranteed a fixed income, a coupon, payable in two equal,
semi-annual instalments. The borrower also agrees to repay the face
value or principal of the bond when it matures.

For example, if you
invest a face value of N1,000,000 in a five year bond paying a coupon
rate of 10% per year, assuming you hold the bond to maturity, you will
receive ten coupon payments of N50,000 each, a total of N500,000. At
maturity, the issuer will pay you back your N1,000,000 face value.

Diversification

To reduce the risk
that any one asset-class may pose to an overall portfolio, it is
recommended that investors maintain a diversified investment portfolio
consisting of bonds, stocks and cash, depending upon the investor’s
particular circumstances and objectives. Bonds play an important role
in a well-balanced portfolio and it makes sense to include them in your
portfolio.

Bonds are issued in
a range of tenors, from short term issues with one to five year
maturities, to medium term of five to ten years, and over ten years for
long term bonds. One may opt to “ladder” your bonds, buying several
with staggered maturity dates timed for when a cash need arises for
say, children’s education or retirement.

Bonds offer flexibility

Although bonds are
issued for a specified period of time, investors do not have to keep
the bond until maturity. An investor may need cash for some purpose or
interest rates may have risen since the bond was issued. Indeed “call”
and “put” provisions make it possible for investors to buy and sell
them ahead of maturity, trading them like shares.

Individual Bonds versus Bond Funds

As an investor you
can choose between investing directly in a bond or in a bond mutual
fund. The main advantage of a bond mutual fund is its convenience. A
professional fund manager will usually make better investment choices
than the average individual investor. In addition, a bond fund offers
liquidity, competitive yields, and diversification across a range of
bonds including government and corporate bonds, euro bonds and money
market instruments. For smaller investors, a fund provides an
opportunity to invest, as individual bonds are usually sold with
minimum volumes.

Bonds and Risk

Even though they
offer reliable fixed income, bonds are not risk free. When you invest
in bonds, you face three risks, the risk of default, inflation, and of
interest rate fluctuations.

Default risk is the
chance that the issuer, be it a government or a corporation, will be
unable to repay your money. Bonds offer a wide range in choice from the
very safe Federal Government Bonds with an AAA rating, which are
virtually risk-free as they are backed by the full faith and credit of
the Federal Government, to corporate bonds.

Rating agencies,
such as Agusto & Co, Fitch and Moody’s assign ratings to bonds, are
based on in-depth analysis of the issuer’s financial condition and
management, as well as other criteria. Such ratings, which are
periodically reviewed, help to give investors an idea of how likely it
is that a payment default will occur. As risk and reward go hand in
hand, an investor that has an appetite for greater risk might select
high yield bonds for the ensuing higher returns.

The value of a bond
fluctuates with changes in market interest rates. When interest rates
fall, bond prices rise, and when interest rates go up, the prices of
bonds go down. If you are holding a bond issued at 6% and interest
rates increase to 8% on comparable, newly issued bonds, your bond
decreases in value, as there would be no incentive for anyone to buy
your bond at the price you paid. As with all fixed income securities,
inflation is a major risk as it erodes the purchasing power of future
coupon payments.

Are bonds for you?

If you are looking
for income rather than growth but need a better return than you get
from cash, then government or corporate bonds are a good option. Even
though stocks usually provide a higher return over the long-term, high
quality bonds, will offer safety and stability. This is particularly
useful for investors who have a relatively short time frame within
which to invest including those approaching retirement and whose
priority is for a predictable stream of income to meet living expenses
and the preservation of their principal.

There is no hard
and fast rule about how much to invest and which bonds to invest in.
Your needs and goals change over your life cycle reflecting your age,
your investment objectives, your investment horizon and your risk
tolerance level. Whether you are just starting out in your career,
saving for your children’s education, for a new home, or approaching
retirement, investing in bonds can help you achieve your objectives.
Visit a primary dealer, your broker or investment advisor who will help
you select a bond that best suits your needs.

Write to
personalfinance@234next.com with your questions and comments. We would
love to hear from you. All letters will be considered for publication,
and if selected, may be edited.

The World Bank’s Board of Executive Directors has approved a
$3.75 billion loan to help South Africa achieve a reliable electricity supply
while also financing some of the biggest solar and wind power plants in the
developing world.

The loan which was approved on Thursday – the bank’s first major
lending engagement with South Africa since the fall of apartheid 16 years ago –
aims to benefit the poor directly, through jobs created as the economy bounces
back from the global financial crisis and through additional power capacity to
expand access to electricity.

Access is essential

Obiageli Ezekwesili, World Bank Vice President for the Africa
Region, in a statement, said “Without an increased energy supply, South
Africans will face hardship for the poor and limited economic growth.”

According to her, “Access to energy is essential for fighting
poverty and catalysing growth, both in South Africa and the wider sub-region.
Our support to Eskom combines much-needed investments to boost generation
capacity for growing small and large businesses, creating jobs, and helping lay
the foundations for a clean energy future through investments in solar and wind
power.”

The loan is provided to South Africa’s power utility, Eskom, and
was brought about by unique circumstances including South Africa’s energy
crisis of 2007 and early 2008, and the global financial crisis that exposed the
country’s vulnerability to an energy shock and severe economic consequences.

Other projects

The Eskom Investment Support Project (EISP) will co-finance the
following blend of energy technologies: $3.05 billion for completing the 4,800
Mega Watt (MW) Medupi coal-fired power station, using for the first time on the
African continent the efficient supercritical technology used in the
Organisation for Economic Co-operation and Development (OECD) countries; $260
million for piloting a utility-scale 100 MW wind power project in Sere and a
100 MW concentrated solar power project with storage in Upington; $485 million
for low-carbon energy efficiency components, including a railway to transport
coal with fewer greenhouse gas emissions.

According to the statement, in approving the project, the World
Bank noted South Africa’s achievement in increasing energy access from around
30 per cent of citizens to more than 80 per cent since the fall of apartheid in
1994 and noted its Free Basic Electricity policy that provides 50 kilowatt
hours (KWh) of free electricity per month to poor families.

The bank also noted South Africa’s pivotal role as generator of
60 per cent of all electricity consumed on the African continent and the
importance of a functioning electricity sector for job creation, economic
progress, human welfare, and poverty reduction.

Ruth Kagia, World Bank Country Director for South Africa, said,
“The Eskom project offers a unique opportunity for the World Bank Group to
strengthen its partnership with the Government of South Africa, Eskom, and
other financiers and help South Africa chart a path toward meeting its
commitment on climate change while meeting people’s urgent energy needs.”

“As part of the project, Eskom will pilot 100 megawatts of solar
power with storage and wind power, the biggest grid-connected renewable energy
venture in any developing country,” said Vijay Iyer, World Bank Energy Sector
Manager for Africa. “We are optimistic that the lessons learned from these
projects will facilitate the scale-up of the renewable energy industry across
Africa.”

Government backing

The project has received strong support, both from South Africa
and other parts of the world.

In a letter to World Bank Group President, Robert Zoellick,
South African President, Jacob Zuma, stated that the energy sector in South
Africa is of “strategic national importance” and “achieving energy security
will be a critical factor for restoring economic growth, both in South Africa,
and the wider southern Africa sub-region.”

Mr. Zuma has also stated that his government is “committed to reducing the
country’s carbon footprint and broadening its energy sources in line with our
cabinet-endorsed Long-Term Mitigation Scenarios” and expressed appreciation
that the EISP includes “investments in cutting-edge, supercritical technology
being installed for the first time on the African continent as well as
substantial investments in renewable energy.”

Regulators failed for years to properly supervise the giant
savings and loanWashington Mutual, even as the company wobbled under the weight
of risky subprime mortgages, a federal investigation has concluded.

The two agencies that oversaw Washington Mutual, the
investigation found, feuded so much that they could not even agree to deem the
company “unsafe and unsound” until Sept. 18, 2008.

By then, it was too late. A week later, amid a wave of deposit
withdrawals, the government seized the bank and sold it to JPMorgan Chase for
$1.9 billion. It was by far the largest bank failure in American history.

The report, prepared by the inspectors general for the Treasury
Department and the Federal Deposit Insurance Corporation, is expected to be
released Friday. A draft was obtained by The New York Times. The release
coincides with hearings this week by the Senate subcommittee on investigations,
which is treating Washington Mutual as a case history of the financial crisis.

Based on research conducted from March to November 2009, the
report examines the conduct of the bank’s primary regulator, the Office of
Thrift Supervision, an independent arm of the Treasury that regulates savings
associations, and the F.D.I.C., which insured the institution’s deposits.

The thrift supervision office was supposed to ensure the
company’s safety and soundness, while the F.D.I.C. was tasked with assessing
risks to its deposit insurance fund.

The report found that Washington Mutual had failed primarily
“because of management’s pursuit of a high-risk lending strategy that included
liberal underwriting standards and inadequate risk controls.” The strategy
accelerated in 2005 and came to a crashing end in 2007 with the drop in the
housing market.

But the report also levelled unexpectedly sharp criticism at the
F.D.I.C., which by July 2008 concluded that the bank needed $5 billion in
capital to withstand future potential losses. The report said the F.D.I.C.,
which had questioned the Office of Thrift Supervision’s assessments of the
bank’s soundness, could have stepped in earlier and acted as the primary
regulator, but decided “it was easier to use moral suasion to attempt to
convince the O.T.S. to change its rating.” With more than $300 billion in
assets, WaMu was the largest institution regulated by the Office of Thrift
Supervision and accounted for as much as 15 percent of its total revenue from
assessments, the report found.

Problems with quality

Although regulators found problems with the quality of the
mortgages it had originated and with the wholesale loans it bought through
outside brokers and banks, the office consistently deemed WaMu “fundamentally
sound,” giving it a rating of 2, the second-highest on a five-point scale used
to assess a bank’s condition, from 2001-7. Moreover, the office relied on
WaMu’s own tracking system to follow up on regulators’ findings.

The office did not lower the rating to 3 (“exhibits some degree
of supervisory concern”) until February 2008, and to 4 (“unsafe and unsound”)
until September 2008, days before WaMu collapsed. “It is difficult to
understand how O.T.S. continued to assign WaMu a composite 2 rating year after
year,” the report found.

O.T.S. officials said the agency had accepted the findings; the
F.D.I.C. said it could not comment until the report was completed.

The report said it would be “speculative to conclude that
earlier and more forceful enforcement action would have prevented WaMu’s
failure,” but also said such actions, if taken in 2006 or 2007, might have
pushed managers to move aggressively to correct weaknesses and stem losses.

Stiff resistance

The report said the F.D.I.C. “met resistance” from the thrift
supervisor when it assigned additional examiners to look at WaMu from 2005-8
and when it challenged the 2 rating in 2008.

In the summer of 2008, as WaMu teetered on the brink of failure,
the two regulators still could not agree. “The O.T.S. as primary regulator
wanted to rehabilitate WaMu and keep it in business,” the report states. “The
F.D.I.C., on the other hand, as an insurer wanted to resolve the institution’s
problems as soon as possible to maintain the value of WaMu in order to reduce
the cost of any failure.” The inspectors general, Eric M. Thorson of the
Treasury and Jon T. Rymer of the F.D.I.C., concluded that the F.D.I.C. should
make its own risk assessments of institutions large enough to pose significant
risk to its insurance fund.

The chairman of the House panel holding this week’s hearings,
Senator Carl Levin, Democrat of Michigan, said in a statement that he hoped the
hearings would inform the debate over changes in financial rules, which the
Senate could take up as early as this week, after its return from a spring
recess. Two former WaMu executives, Kerry K. Killinger and Stephen J. Rotella,
are expected to testify Tuesday.

“The recent financial crisis was not a natural disaster; it was
a manmade economic assault,” Mr. Levin said. “It will happen again unless we
change the rules.” The WaMu report could also influence the work of the
Financial Crisis Inquiry Commission, created by Congress to investigate the
financial disaster.

© The New York Times

After almost two and a half years of sobering news, the head of
JPMorgan Chase raised his outlook for the rest of 2010 as first-quarter income
rose 55 percent.

Jamie Dimon, JPMorgan’s chairman and chief executive, said that
there were strong signs the economy was stabilizing as fewer borrowers fall
behind on their loans.

“While the economy still faces challenges, there have been clear
and broad-based improvements in underlying trends,” he said in a statement. “We
believe these improvements will continue and are hopeful they will gather
momentum.” Mr. Dimon’s upbeat remarks come as the bank had another strong
showing as a sharp reduction in loan loss reserves helped raise earnings. Hefty
trading profits in the investment bank once again helped offset the weaker
performance of its Chase retail banking and credit card units.

Over all, JPMorgan said its first-quarter income was $3.3
billion, or 74 cents a share. That compared with income of $2.1 billion, or 40
cents a share, a year earlier as profit surged in the months after following
the crisis. Revenue, at $28.2 billion, exceeded forecasts.

Emerging from recession

Analysts surveyed by Thomson Reuters had forecast income of 64
cents a share on revenue of $26.46 billion. As one of the first banks to report
this quarter, JPMorgan’s results could set a benchmark for the rest of the
financial industry.

Bank of America, Goldman Sachs, Morgan Stanley, and Citigroup
all report in the coming week. Investors will be looking for signs that fewer
borrowers are defaulting on their loans – and that the underlying business is
improving.

“We continued to see delinquencies stabilize, and in some cases
improve, in our credit portfolios,” Mr. Dimon said. Of course, Mr. Dimon noted,
the bank’s portfolio will track the health of the broader economy.

Even as the country emerges from a deep recession, the job
market has not yet rebounded. Demand for new loans is still weak. Meanwhile,
there are only tentative signs that home prices are nearing a bottom.

And JPMorgan’s problems are not yet over. The bank set aside
several billion dollars to cover future losses reserves – still a large sum but
a smaller amount than in prior quarters. It has now stockpiled a total of $39
billion, or roughly 5.6 percent of loans. The bank also set aside another $2.3
billion in additional litigation reserves as it deals with fierce legal fights
over faulty mortgages and a pitched battle with Washington Mutual bondholders
over that company’s remnants.

Surviving the crisis

JPMorgan has emerged from the crisis in better shape than most
of its peers, which suffered bruising losses or a devastating blow to their
reputation, or in many cases, both. Today, no bank – and no bank leader – is
showing more confidence on Wall Street or in Washington, where JPMorgan is
aggressively fending off a consumer protection agency and seeking big
exemptions from derivatives rules.

The investment bank unit posted strong trading revenue after a
first quarter rally in the fixed-income markets, though well short of the
blow-out profits during the first quarter last year. It did not fair as well in
dispensing merger advice, though that business was down across the industry.

Chase’s consumer businesses, however, are still hemorrhaging
money. And stealing a page out of the Citigroup playbook, Mr. Dimon divided his
Chase retail banking business into two segments for reporting purposes: its
existing operations, which will continue to grow; and a holding tank for its
most troubled loans.

© The New York Times

Trying again to halt a debt crisis that has hammered the euro, fellow eurozone governments tossed struggling Greece a financial lifeline Sunday, saying they would make euro30 billion in loans available this year alone — if Athens asks for the money.

The International Monetary Fund stands ready to chip in another euro10 billion, said Olli Rehn, the EU monetary affairs chief.

The promise — filling in details of a March 25 pledge of joint eurozone-IMF help — was another attempt to calm markets that have been selling off Greek bonds in recent days.

Markets viewed the March pledge as too vague and carrying such tough restrictions that Greece could not easily get the money. As a result, investors demanded high rates to loan to the government as it struggles to avoid default — rates the government says it can’t go on paying. Greece has some euro54 billion in debt coming due this year and a huge budget deficit.

In an emergency video conference, the finance ministers of the 16-eurozone nations agreed on a complex three-year financing formula that generates an interest rate of ”around 5 percent.”

This is less than commercial market rates — which have soared above 7 percent on Greek 10-year borrowing in recent weeks as the debt crisis dragged on — but more than beneficiaries of IMF usually pay. European Central Bank president Jean-Claude Trichet and German Chancellor Angela Merkel have insisted that Greece not get below-market interest rates amounting to an EU subsidy for its past bad behavior.

”This is certainly no subsidy” to Greece, Rehn told a news conference.

The test of Sunday’s announcement will be whether it restores confidence that Greece will not default and gives it a chance to borrow normally at lower rates. Under last week’s rates, Greece would have had to pay more than twice what Germany pays.

The danger is that interest payments themselves begin to sink the budget despite severe cutbacks imposed in recent days. A Greek default would be a serious blow to the euro, rattle markets and inflict losses on European banks that have bought Greek government bonds.

Greek Finance Minister George Papaconstantinou said Greece had not asked for the plan to be activated, and still hoped to borrow on markets rather than seeking a rescue.

”The Greek government has not asked for the activation of the mechanism, even though this is already immediately available,” Papaconstantinou said in Athens. ”The aim is, and we believe we will continue to borrow unhindered on the markets.”

Officials, speaking privately, told The Associated Press they first want to see how markets react on Monday.

European Commission President Jose Manuel Barroso said the pledge of cash for Greece showed the 16 euro-zone nations will defend Europe’s single currency and help a partner in trouble.

”It shows that the euro area is serious in doing what is necessary to secure financial stability,” Barroso said in a statement.

”I am convinced that it will help Greece to continue vigorously correct public finances imbalances and to deliver the necessary structural reforms.”

Rehn said the loan deal will be ”the clarification that the markets are waiting for.”

Those markets, however, have so far ignored repeated EU claims of support for Greece causing commercial lending rates for Athens to go to 7 percent and more in recent weeks.

At two summit meetings — one in February and one in March — the EU leaders made determined noises about their readiness to end the Greek debt crisis.

But the terms were tough, with Greece needing approval of all 15 other eurozone governments and only if it could not borrow any other way. German fears a bailout with soft loans will only rile German public opinion which already takes a dim view of Greece’s financial housekeeping.

EU and IMF officials will meet Monday to work out details of IMF and EU lending for 2011 and 2012, especially on amounts and loan conditions. Officials estimated that over a three-year period Greece was being offered a total of euro80 billion in financial aid by the EU and the IMF.

Greece has been spending beyond its means for years, leaving it with a 2009 budget deficit of 12.9 percent of economic output. The revelation of its statistics fudging has slammed the euro and gutted market confidence, fueling higher borrowing costs.

Athens plans to cut its deficit to 8.7 percent this year and has launched a euro4.8 billion austerity program cutting public sector wages, freezing pensions and hiking taxes.

The New York Times

Shakespeare’s Polonius offers the sage
advice to his son Laertes in Hamlet “Neither a borrower nor a lender
be, for loan oft loses both itself and friend.” Again, in “The Merchant
of Venice” the pitfalls of lending to friends are discussed.

Consider this scenario: A friend calls
you and needs to see you urgently. It can’t be discussed on the
telephone; she must visit you personally. You oblige and she explains
that she has run into serious financial difficulty and requires a sum
of N50,000 immediately to assist with her car repairs. She will
definitely be out of the woods by the end of next month as she is
expecting some money that she is being owed. This is just to tide her
over until then. She promises to pay back within two months.

You are touched by the sorry tale and
you oblige. She thanks you and visits promptly the next morning to
collect the cash. Then, you don’t hear from her for several months; she
doesn’t answer your calls or respond to text messages and she totally
disregards your e-mails. After many months, you see your “friend”. When
you ask her why she didn’t return your calls, she says she lost her
phone along with all her numbers.

We all know that such excuses hold no
water; your friend is just avoiding you like the plague because you
lent her money! Apart from all this, she has bought a new car, whilst
yours is long overdue for a change, and been on holiday to Dubai!
Another year passes and you have seen her several times at social
occasions and the debt has never again been mentioned. It’s like it
never happened. Sound familiar?

Have you ever borrowed money from, or
lent money to friends or relatives? I mean an amount that means a lot
to you. Whether a loan is the odd N10,000, or bigger loans running into
hundreds of thousands of naira, it is reasonable to expect to be
repaid. You lend the money because you are good friends and you trust
them to keep their word or perhaps they have helped you out in the
past.

Money “palaver” breaks up or at the
minimum can strain friendships and family relationships. Sometimes,
trying to collect it breeds awkwardness, resentment, guilt, and anger.
It isn’t that lending money is the problem per se; it is that money
changes the nature of personal relationships. However, while
Shakespeare’s tales recount the pitfalls of lending money to friends, a
loan to a friend does not always have to be an unpleasant experience if
a few issues are considered.

Just trying to help a friend in need?

Naturally one should consider
supporting a friend or loved one facing a medical emergency, or other
serious need following the death of a family member, a job layoff,
divorce or to assist with their rent or children’s school fees.

You should know what the money is
needed for. If it is a sudden illness or calamity or other serious
need, then you should consider it. After all, that’s what friend’s are
for. Are you loaning your daughter N50,000 to put groceries on the
table while your son-in-law is out of a job? Think twice before
supporting an indulgence if it is to finance a new plasma TV, to buy
jewellery, or for a vacation, no matter how long awaited.

Should you charge interest on a loan to a friend?

It depends on the amount of the loan
and for how long the funds are needed. If a large sum is involved, you
may wish to charge some interest. It is not about exploiting your
friend; the fact is that if you lend money for an extended period,
without interest, by the time you get it back its value would have been
eroded by inflation.

Is it a loan or an investment? Is the
money an investment in your friend’s new business venture or do you
expect to get your money back in full? It’s easier to charge interest
if you are lending for a business.

How much should you lend?

Only you can determine how much you can
afford to lend and for how long. If your friend ran into difficulty and
couldn’t pay you back, will this put you in financial difficulty?
Things happen, unexpected events occur that could mean that you need
money in a hurry. Can your own emergency fund accommodate your
unexpected need as well as your friend’s crisis?

Remember most “experienced” borrowers,
approach several people simultaneously and can end up raising a tidy
sum. Don’t feel obliged to put up the entire amount; a percentage would
help.

Put it in writing

Don’t be too casual about lending
money. It can be a bit embarrassing but it is only decent for a loan
request to come with a repayment proposal. What’s the borrower’s track
record like? Notorious borrowers become known for this, so don’t be the
one to get caught out.

Smaller amounts can be lent without any
documentation but for larger amounts, put something in writing.
Although such a written agreement or promissory note helps to lay out
the general terms of the loan, it is not usually necessary to involve
lawyers.

The name of the lender

The name of the borrower

The loan amount

The date of loan

The date or schedule of repayment

Rate of interest (if applicable)

Collateral (if any)

Penalty for late payment

Both of your signatures

Once you have lent money, try not to
dwell on it and make your friend feel obliged to you as this can strain
the relationship. Don’t change the way you treat the recipient, don’t
expect special favours or change your expectations of them. Be
discreet; the last thing your friend wants is for you to publicize the
fact that you lent them money.

How do you say “no”?

It is better to just say no than to
lend to someone who may not have the ability to pay you back. If you
can’t afford to part with any money at this time, or just feel
uncomfortable about lending, then just say no. Sometimes borrowers can
put you under so much pressure that you succumb. It’s far easier to say
no from the start than to have to hound your friend for the money.

GIVE instead

Borrowing and lending are business
transactions and should generally be treated as such. If this all
sounds too formal or too business like for you, then its best to just
give instead. That way, you are offering only what you can afford, and
have no reason for resentment. If you consider the loan to be a gift,
if it gets paid back, then it’s a pleasant surprise; if it doesn’t, you
weren’t expecting it back anyway.

The Central Bank of
Nigeria has announced its desire to work with the Bank Negara Malaysia
(Central Bank of Malaysia) to seek solutions to and share expertise on
a wide range of issues for the benefit of the banking industry.

Today, the bank
announced that it has signed a memorandum of understanding with the
Malaysian bank with the purpose of sharing skills expertise and
exchanging relevant information that pertain to the banking industry.
The information was revealed in a press statement issued by the Central
Bank of Nigeria yesterday.

The memorandum of
understanding covers the areas of Banking Supervision, Small and Medium
Enterprises (SMEs), Microfinance, Islamic Finance, Monetary Policy,
Development Finance Institutions, External Reserve Management,
institutional arrangement for financial crisis management and
resolution, Foreign Exchange Administration, Performance Management and
Corporate Strategy, Leadership Development and Talent Management.

Seeking direct relevance

The statement
signed by Mohammed Abdullahi, who is head, corporate affairs, of the
regulatory body, said the MOU was signed at the headquarters of the
Bank Negara in Kuala Lumpur during a one-week study tour of Malaysian
financial institutions by the Board of Directors of the Central Bank of
Nigeria between the 22 and 26 March, 2010.

“The study tour
enabled the team to understudy the success of the Malaysian regulator
in the area of financial crisis management which has direct contextual
relevance to the Nigerian situation,” the statement said. “Other areas
of interest to the Central Bank of Nigeria include the stimulation of
economic development through financing SMEs and effective supervisory
framework for microfinance banks.” Malaysia is a developing country
that has achieved widely acknowledged economic success and the Bank
Negara has had an effective financial stability framework since the
Asian financial crisis in the 1990s. Many believe that the banking and
financial reforms the country undertook successfully are the benchmark
for the current banking reforms of the Central Bank of Nigeria.

The team returned to Nigeria last weekend.

Palladium prices hit a two year high on Monday, with traders
citing strong physical buying of the metal for auto use in Japan also sweeping
its sister precious metal platinum to its highest since August 2008.

After volatile trade in Asia, gold prices were steadying above
$1,125 an ounce in sparse activity due to public holidays in some European
countries.

Palladium, used largely in the auto industry for catalytic
converters, rose to $492.50, its strongest since March 2008, and was at $488.50
by 1046 GMT.

“We are seeing strong demand from palladium from the industrial
sector in Japan.

There’s also buying in platinum but it’s not that strong,” said
a physical dealer in Tokyo.

Spot gold stood at $1,126.25 an ounce, compared with $1,124.50
quoted late in New York on Friday.

It had hit an intraday high of $1,126.70 an ounce on a firmer
euro — not far from a two-week high of $1,127.75 seen on April 1 — but could
face stiff resistance at a 6-1/2 week high around $1,144 hit in early March.

Dealers awaited the release of an ISM survey on the U.S.
services sector for March later on Monday, and a policy meeting by the Reserve
Bank of Australia on Tuesday, expected to raise rates by 25 basis points to
4.25 percent.

“We are likely to see a further strengthening of the dollar
ahead,” said Wong Eng Soon, an investment analyst at Phillip Futures in Singapore,
referring to recent economic data such as non-farm payrolls that supported the
dollar.

“All tightening measures, whether they come from Australia or
China, have the effect of lower commodity prices. I am looking at the topside
resistance at $1,140 and a very firm support at $1,110. Gold has more downside
risk.”

U.S. gold futures for June delivery were up 70 cents at
$1,125.80 an ounce. The New York market reopened on Monday after the Easter
holiday.

The euro stood at $1.3478, shedding some early gains, which also
kept a lid on bullion prices.

A solid rise in private-sector hiring in the United States has
raised talk that the Federal Reserve may raise the discount rate again,
providing support to the dollar.

The Fed surprised markets on February 18 when it raised the
discount rate by a quarter point to 0.75 percent.

On platinum, residual support remained after news on March 30
that Lonmin, the world’s third biggest platinum producer, had shut its No. 1
furnace after another incident at the troublesome smelter, with repairs
expected to take over a month.

“I guess the impact of the Lonmin spillage as well as concerns
over a power shortage in South Africa is still limited on platinum. Physical
demand is not so strong but at least funds have been buying continuously,” said
the Tokyo physical dealer.

Spot platinum stood at $1,677.50 an ounce, while silver firmed
to $17.91 Platinum started to diverge from gold in January after showing a
strong correlation with gold prices in the last quarter of 2009.

But physical dealers said some auto makers had shifted to using
more palladium in diesel and gasoline engines because the price was much
cheaper than platinum, while hopes for a further recovery in the global auto
sector also boosted demand.

Palladium and platinum ended the first quarter 17 percent and 12
percent higher respectively, surpassing the single-digit gains posted by gold
and silver.