Nigeria Content Online

Diezani Alison-Madueke, Minister of Petroleum Resources, at the
weekend defended the Nigerian Content Policy of the Federal Government. She
said the policy was not designed to nationalise the assets of multinational oil
and gas companies operating in the country.

The minister, who spoke at the first anniversary of the
commencement of the implementation of the Nigerian Oil and Gas Industry Content
Development Act 2010 in Abuja, said the policy is aimed at promoting increased
participation of Nigerians in the operations of the industry, as is the
practice in industries around the world.

“Nigerian Content Act is not designed to nationalise foreign
assets or to completely indigenise the investment interests of foreigners, as
is erroneously perceived in some quarters. The important thing is that the
implementation of law would be guided by a framework that has been put in place
to help balance the interest of the investors and the country’s national
interest in the oil and gas industry,” Mrs. Alison-Madueke said.

According to her, since the approval of the Act early last year,
it has become clear that the industry needed to work towards building capacity
in critical areas to ensure that requirements of the law do not impede the
growth of the industry, pointing out that the collaboration with all
stakeholders must be sustained to erase the suspicion in some quarters that
there is resistance by multinationals in the implementation of the law.

Targets to be achieved

Some of the targets set by the government for the Nigerian
Content Development Monitoring Board (NCDMB) include retention of $10 billion
out of $20 billion average annual industry expenditure; creation of over 30,000
direct employment and training opportunities; and establishment of three to
four new pipe mills to service the demands of the industry and coating, valves,
fittings and components.

Other targets include the development of one or more dockyards
for maintaining marine vessels operating in Nigeria; transformation of ownership
profile of marine assets supporting industry activities and integration of
indigenes and businesses, as well as capturing 50 to 70 per cent of banking
services, insurance placements, and legal services in the country.

Group managing director, Nigerian National Petroleum Corporation
(NNPC), Austen Oniwon, disclosed that with the recent launching of the ‘gas
revolution’ by President Goodluck Jonathan, about $53 billion is expected to be
spent in the next three to four years on the establishment of strategic
industry infrastructure in the country, including Greenfield refineries, world
class petrochemical plants, fertilizer complexes, methanol plants, gas
processing facilities, and other gas related infrastructures in the country.

The challenge for stakeholders, he explained, hinges on ensuring
that significant percentage of the amount to be spent is in-country, by
supporting the capacity building initiative for local operators through the
Nigerian Content Development programme, to enable them compete with
multinationals, who set up facilities in Nigeria in order to make them take
full advantage of the existing opportunities.

Executive Secretary, NCDMB, Ernest Nwapa, said the take off of
the Act was threatened by the confusion about the necessity to either pass it
separately or be joined with the Petroleum Industry Bill, as it was
increasingly becoming apparent that government was no longer interested in
pursuing the policy of achieving 70 per cent local content in the industry.

Since the take off of the NCDB, Mr. Nwapa said a number of
achievements have been recorded, particularly building its executive and
operational capacity, underscoring the importance of continuous engagement with
stakeholders to reassure them that the Nigerian Content Act is not a punitive
law, but a confirmation of what is done in other jurisdictions they are
operating in.

Trading activities at the Nigerian Stock Exchange (NSE) were characterised by varied performances this week as market indicators continued their unsteady movements.

The market capitalisation appreciated in value at the close of trading on Thursday after it declined the previous day. The market capitalisation of the 194 First-Tier equities closed yesterday at N7.906 trillion after opening the day at N7.862 trillion, reflecting 0.56 per cent or N44 billion gains. The Exchange had recorded gains also on Tuesday before plunging the following day.

Stockbrokers at GTI Capital, a stockbroking firm, said: “Uncertainty pervaded the equity market because the oscillatory trend continued to hold sway in the market amid political uncertainty. The market had failed to attain a steady rally in succession for five days in the past one month. This shows strong weakness in the economic space burden with political uncertainty.”

A total of 32 stocks appreciated in price on Thursday higher than the 28 recorded the previous day, while 21 stocks depreciated in value higher than the 18 of Wednesday. First Aluminium Nigeria and Ecobank Transnational Incorporated topped the price gainers’ table with an increase of five per cent and 4.97 per cent, to close at 63 kobo and N16.27 per share, respectively. On the flip side, Union Bank of Nigeria and Cement Company of Northern Nigeria led on the price losers’ chart with a loss of 4.95 and 4.94 per cent respectively, to close at N3.07 and N10.78 per share.

Financial results

Meanwhile, despite the fact that more quoted companies released good results, market capitalisation remains wobbly. Dangote Cement, on Wednesday, posted significant improvement in its audited financial result for the year ended December 31, 2010. The company, which was listed at the Exchange last October after acquiring Benue Cement Company, posted a profit after tax of N106.605 billion in 2010, from a profit after tax of N47.251 billion in 2009, reflecting a 125.61 per cent increase. Dangote Cement’s turnover in the period in view also increased by 56.06 per cent, from N129.797 billion to N202.565 billion.

The company’s board of directors proposed a dividend of N2.25 per share for its shareholders. The bank’s share will be marked for payment on the 27th of April while the cash will be disbursed on the 25th of May. The stock price of Dangote Cement remained unchanged yesterday at N125.50 per share after the announcement.

Fidelity Bank posted a 2010 pre-tax profit of N8.65 billion, more than four times the N2.05 billion pre-tax profit it made in 2009. Turnover in the period rose to N56 billion from N35 billion a year earlier.

“Mama do good oh! E do good, Mama Give me Indomie, E do well….” This is the beautiful song that brings out the innovative and creative approach to Indomie noodles visibility. It exemplifies the benefits of the brand to its core target consumers. The woman in the commercial delivered the brand that the children desired so much and, as a result, deserved to be praised. Indomie is one brand that has consistently evolved several channels to build positive perception, especially with the children.

The importance of brand building cannot be underestimated. A brand needs to build a positive image in order to gain an inroad into the minds of consumers. It is indeed true that strong brands exist in people’s hearts and minds. The stronger the brand identity in the market place, the more consumers make informed decisions to purchase the brand. The perception of the brand is beyond the name and logo. It is what the brand stands for in the minds of the consumers. A brand should represent something concrete in the consumers’ mind.

The Bournvita Teachers award is a great idea and a tangible way to build favourable perception for the brand. There has never been a brand that seeks to recognise the laudable role of teachers. Bournvita came up with this award and even though not all teachers can win, they still identify with a brand that offers them prominence and recognition.

It has become important to truly build a brand that leaves an indelible imprint on the heart and mind. When it is done this way, it leads to deeper consumer engagement.

Building a positive brand impression also requires the building of trust and relationship. The brand needs to be trusted to deliver on its offerings in order to forge a relationship with the consumers. Brands need to engage, interact and immerse the audience in its benefits and values to bolster positive perception. I believe this is one major way that Indomie as a brand has leveraged its values to the children. The brand has, through several platforms, built a relationship with school children who now believe in the brand as giving them the desired nourishment.

The most effective way to think of a brand is as an image that the audience remembers. The brand perception must be positive, relevant and memorable for the consumers. That is why Indomie has been the generic name for noodles in the market.

A brand is killed on a gradual basis if it fails to build positive perception in the minds of the consumers. Brands should maintain a positive image to remain relevant with the consumers.

To build positive perception, brands should focus on “what I stand for” and not “what I am”. There should be that compelling brand promise that resonates with the target consumers. Brands that build positive perception continually enjoy consumers’ loyalty.

Indomie has been a remarkable brand in the food industry. The brand has evolved to dominate the noodles market place due to its brand building activities. Indomie previously was a brand associated with children but has become a strong unifying brand for the family.

The Indomie brand evolved over the years as it has distinguished itself through favourable brand perception. The brand has consistently engaged in CSR and educational activities to position its distinct image. One major area is the sponsorship of activities in schools to build a strong relationship with the children. The Heroes award has also placed the brand on a pedestal, rewarding children who embark on heroic endeavours. Indomie became the generic name for noodles due to its strategic brand building efforts to promote a favourable brand image.

Brands should also evolve proven and tested brand building strategies to remain relevant to the consumers. Brand custodians should also make conscious efforts to find out what their brands represent in the minds of consumers. Consumers should be asked about their expectations and whether the brand delivers on its promise. Through this, the brand can align with the aspirations of the consumers to build a positive perception.

The economic problems of Nigeria are easily identifiable. These are power, decrepit infrastructure, social amenities, agriculture, and absence of conducive environment for businesses to thrive. Not a few citizens believe that once these critical aspects are taken care of, other pieces will begin to fall into place and thus guarantee an improved quality of life. As expected, nearly all the political parties seeking elective positions have highlighted in one way or the other how their parties would tackle these redoubtable issues.

For Muhammadu Buhari, presidential candidate of the Congress for Progressive Change (CPC), his strategy is to build on what is already on ground and to expand the scope further. On the economy, the party promises to make Nigeria one of the fastest growing emerging economies in the world with a real GDP (gross domestic product) growth averaging 10 per cent annually and integrate the informal economy into the mainstream. Nigeria’s GDP currently thrives on an average seven percent annual growth.

The party also promises to embark on export and production diversification including investment in infrastructure; promote manufacturing and balance the economy across regions by the creation of six new Regional Economic Development Agencies (REDAs) to act as champions of sub-regional competitiveness. It plans to put in place a N300 billion regional growth fund (average of N50 billion in each geo-political region) to be managed by the REDAs, encourage private sector enterprise and provide support to help places currently reliant on the public sector, among other lofty plans for the sector.

On agriculture the party says it has plans to modernise the sector and change Nigeria from being a country of subsistence farmers to that of a medium- and commercial-scale farming nation and net producer of food. It also plans to create a nationwide food inspectorate division with a view to improving nutrition and eliminating food-borne hazards as well as inject an extra N30 billion into the agricultural sector to create more agro-allied jobs by way of loans at nominal interest rates for capital investment on medium- and commercial-scale cash crops.

The housing challenge

The party also proposes, without being specific, to amend the Constitution and the Land Use Act to create freehold/leasehold interests in land along with matching grants for states to create a nationwide electronic land title register on a state by state basis. To tackle the housing challenge of the country, it plans to create additional middle-class of at least two million new home owners by 2015 by enacting a national mortgage system that will lend at single digit interest rates for purchase of owner occupier houses. Managing director of Pison Housing Company Limited, a commercial real estate and housing finance advisory firm, Roland Igbinoba believes that successive governments have talked too much about the housing and finance sector and the claim by the CPC may not be different. “The pronunciation smacks of a lack of understanding of the housing and finance sector. They cannot provide two million units of housing by 2015.” According to him, the supply side value chain of housing and the demand side coupled with the absence of a housing policy makes such projections unrealistic. “These politicians need to engage experts who will develop a strategic framework and approach for housing as is being done in other emerging countries. Can they tell us how they will enact a national mortgage system? What procedure will they take to amend the Land Use Act?,” Mr Igbinoba asked.

Agriculture and power

For a country that has already spent N200 billion on the agriculture sector in the last two years, earmarking another N30 billion may just be an overkill. Yinka Odumakin, spokesperson of the Buhari/ Bakare Campaign Organisation said the difference this time is that the full amount would be disbursed judiciously. “PDP (People’s Democratic Party) has spent N200 billion on agriculture but much of this has been wasted. In our case, if we spend N30 billion, there will be a difference because the money will get to the people that actually need it.” On power, the CPC says it will generate, transmit and distribute from the current 5,000 – 6,000 MW to at least 15,000 MW of electricity by 2015, increasing to 50,000 MW by 2019 with a view to achieving 24/7 uninterrupted power supply by 2019 whilst also simultaneously ensuring the development of sustainable/renewable energy sources.

According to Mr. Odumakin, while the current government has spent huge sums on the power sector, the country is yet to record any appreciable progress in that area. “In our case, a contractor will not take government funds and have nothing to show. The major problem in this country is lack of fiscal discipline.” However, many Nigerians are still sceptical about the sincerity of politicians to deliver on their campaign promises. “If you ask me, I can’t see anything different,” said Mr. Igbinoba.

According to Mr Odumakin, with the CPC, Nigerians should expect the desirable change needed to make progress. “Nigerians have been getting promises from politicians who don’t mean well for the country. The difference this time is about trust of leadership, which Mr. Buhari offers. Nigerians know about his track record.” With barely a week to the presidential election, Nigerians would have to rely on the promises made during the campaigns to decide on their choice of candidate.

African immigrants sent home over $40 billion (N6 trillion) in remittances last year, according to a new joint report by the World Bank and African Development Bank. The figure is down from $41 billion in 2008 and just over US$38 million in 2009, according to a similar report last year.

The report which covers r e m i t t a n c e s f r o m t h e Organisation for Economic Co-operation and Development, known as OECD, which comprises Eastern and Western Europe, advanced Asian and South American economies, and transfers from other African countries such as South Africa, also shows the pattern of disbursement of these transfer of funds. “Data from household surveys reveal that households receiving international remittances from OECD countries have been making productive investments in land, housing, businesses, farm improvements, agricultural equipment, and so on.” The report added that many migrants transfer funds to households in their countries of origin for the purpose of investment – 36 percent in Burkina Faso, 55 percent in Kenya, 57 percent in Nigeria, 15 percent in Senegal, and 20 percent in Uganda.

Investing significantly

According to the report,” households receiving transfers from other African countries are also investing a significant share in business activities, housing, and other investments in Kenya (47 percent), Nigeria (40 percent), Uganda (19.3 percent), and Burkina Faso (19.0 percent).” Education was the second-highest use
of remittances from outside Africa into Nigeria and Uganda, the third highest into Burkina Faso, and the fourth highest into Kenya.

The report, titled ‘Leveraging M i g r a t i o n f o r A f r i c a : Remittances, Skills, and Investments’, added that the annual estimated saving, usually held in foreign countries, by Africans exceeds $50 billion. “African governments need to strengthen ties between Diaspora and home countries, protect migrants, and expand competition in remittance markets,” said Dilip Ratha, main author of the report and lead economist at the World Bank.

The report estimates that Nigerian emigrants saved about $3.5 billion annually, as at 2 0 0 9, a f i g u r e w h i c h represents about 2 per cent of the country’s gross domestic product. “Most of these savings are invested in the host countries of the Diaspora.,” the report added.

Diaspora bonds

According to Ratha¸ Sub- Saharan African countries can potentially raise $5-$10 billion a year in Diaspora bonds. Countries with large diasporas in high-income countries that can potentially issue its bonds include Ethiopia,
Ghana, Kenya, Liberia, Nigeria, Senegal, Uganda, and Zambia in Sub-Saharan Africa and Egypt, Morocco, and Tunisia in North Africa.

“Diaspora bonds can be sold globally through national and international banks and money transfer companies.
They can be marketed through churches, community groups, ethnic newspapers, stores, and hometown associations in countries and cities where large numbers of migrants reside,” according to Ronan McCaughey of the Laferty Group, a United Kingdom-based financial research and advisory services firm, remittances are important determinants of growth in West African countries”

The United States ambassador to
Nigeria, Terence McCulley, has revealed that his country, through the
U.S Agency for International Development (USAID), and the British
government, through the DFID, has committed $35 million (N5.25 billion)
to help support credible national elections through the provision of
technical support to INEC.

Mr. McCulley, who spoke at a forum on
democracy and good governance jointly organised by the US embassy and
its UK counterpart in Abuja, yesterday said free, fair, and credible
elections are an important part of the process.

He urged Nigeria to take the necessary
steps towards achieving its potential by embracing democracy and
strengthening the institutions, practices, and values of democratic
governance.

He, however, acknowleged Nigeria as an
emergent force on the world stage, demonstrating its economic capacity
and engaging the world as a leader in ECOWAS and at the UN.

“Democratically governed nations
deliver safer, more just, more prosperous lives to their citizens,
which if strong, are more likely to secure, deter aggression, expand
markets, promote development, and combat terrorism and crime,” he said.

He said his country is not seeking for
a particular formula for a democratic construct, because “democracy is
as diverse as the global community.”

Mr. McCulley, who noted the challenges
faced in the botched National Assembly elections, said the underlying
challenge remains to conduct peaceful, free, fair, and transparent
elections.

The ambassador, who said the national
elections present a golden opprtunity for Nigeria to demostrate lasting
commitments to democratic values and institutions, warned the political
leadership and all those who aspire to lead, to refrain from engaging
in inflamatory, rhetoric, or supporting acts of intimidation.

“Violence has no place in a democratic
society,” he said, calling on all political parties to respect the
results of these elections.

The naira may not
necessarily come under uncontrollable pressure due to the delayed
elections, according to some finance experts.

Victor Ndukauba,
investment research analyst on banking and infrastructure, Afrinvest, a
finance research and analysis firm, said though there has been an
accumulating pressure on the naira, “the delay in elections would not
translate to an uncontrollable pressure on the naira.”

Afrinvest had
earlier stated in its outlook that it expects strong pressure on the
naira to persist in the coming weeks, as speculative demand for the
dollar becomes heightened by current political uncertainties
surrounding the forthcoming elections.

Gali Suleiman
Kabiru, a bureau de change operator in Lagos, said the naira has
strengthened to N157 to a dollar today from N159 last week, at the
black market. He said he cannot explain the factors behind this
appreciation, especially during this election period.

“We cannot say that
this is why this is happening. The commercial banks, to a large extent,
determine the movement of the naira, and we know that it is also an
effect on demand and supply at the forex market,” Mr. Kabiru said.

He also said it is
a possibility that most of the politicians that used to speculate on
the naira and play some other funny tricks on it are busy with the
elections and have less time for speculations. “So, we think that the
naira would even strengthen during this period,” he said.

The Independent
National Electoral Commission (INEC) on Sunday postponed by a week the
parliamentary elections initially scheduled for last Saturday.

“Interestingly,
markets have not significantly reacted to this development. On the
Forex side, the inter-bank rate actually appreciated to 154.0 on
Monday, driven by increased dollar supply from oil companies, even as
demand remained high at the WDAS auction (USD525.8m),” Samir Gadio,
emerging market strategist, Standard Bank, said.

According to Mr.
Gadio, the naira actually appreciated to some extent in recent days to
about 153.9 as at 6 April because of Forex sales by oil companies, but
the exchange rate still remains relatively under pressure, ahead of the
forthcoming electoral cycle.

“On the upside, we
have not seen a depreciation following the postponement of the 2 April
2011 parliamentary elections, but there is still a possibility that the
naira could weaken over the next two weeks on the back of speculative
pressures, rather than structural factors.

“That said, we
expect the currency to ultimately appreciate as political risk eases in
late April, but also because of the tighter monetary policy stance,
which means going long naira at this stage remains an attractive
opportunity,” he added.

Telling on the naira

Renaissance Capital, an investment bank, however, says the naira’s performance will reflect protracted uncertainty.

“Elections,
particularly in Sub-Sahara Africa, are typically accompanied by
increased levels of uncertainty. The prolongation of the electoral
period only adds to the levels of anxiety amongst all stakeholders
including the electorate, business and investors, who all want to see
the completion of successful elections,” the bank said.

The firm says the
naira, which has already been weighed down in recent weeks by
electioneering, weakened further earlier in the week to N155.2 per
dollar, as nervousness prompted some to sell-off their local currency.

“The naira is
expected to continue to come under pressure during April. Once the
elections are behind us, fundamentals are expected to play a stronger
role in determining the value of the naira. Postponed poll delays the
return to ‘business as usual’. This postponement of the polls not only
protracts the period of uncertainty, but also delays the
decision-making process, both in the private and the public sector,” it
further said.

Industry watchers
say it is better to run a delayed-but-credible poll rather than rush
and compromise the integrity of the electoral process, with the results
being almost immediately challenged in court even though new government
administrations usually take a while to settle into their respective
offices before the business of government resumes, the implication
being a delay in the economic activity.

“We expect the
one-week delay to have a modest effect, given the short time period, on
the resumption of economic activity,” Renaissance Capital said.

The Central Bank in
its last Monetary Policy Committee held in March reiterated that it was
keen to preserve exchange rate stability around the 150 naira to dollar
level, as any substantial currency depreciation would have a negative
impact on other macroeconomic control variables such as inflation.

Goodluck Jonathan,
the presidential candidate of the ruling Peoples Democratic Party
(PDP), has promised to consolidate his administration’s achievements on
the economy, particularly in ensuring that the country attains stable
power supply, while agriculture is commercialised and mechanised to
provide employment to the youth as well as build a stable economy.

His manifestoes,
called ‘Agenda for Transformation’, launched as part of his political
campaign, hinges on a commitment to build an inclusive society where
job creation constitutes a major pillar for economic growth; provision
of cheap and long-term capital for businesses; removal of barriers to
increased productivity; as well as improvement on the environment for
doing business.

He is convinced
that the expansion and development of the downstream sector of the oil
and gas industry would provide about one million jobs for Nigerians,
while the continued expansion of the production capacity in the
upstream sector of the oil and gas industry would earn more revenue to
the country through increased crude oil exports.

Access to development

“Nigeria needs to
build a more inclusive society where every Nigerian would have equal
access to economic and developmental opportunities,” Mr. Jonathan
declared in his blueprint for economic transformation, which also
promises additional economic benefits, including safeguarding the
country’s macro-economic stability.

To ensure that the
improvement in domestic economy impacts on poverty, Mr. Jonathan has
pledged to provide adequate access to economic resources, to help small
businesses grow.

Through the
instrumentation of the Presidential Committee inaugurated last year to
devise ways of enhancing government’s programmes on job creation and
poverty reduction, a N5 billion Business and Development Fund was
established by the Bank of Industry (BOI) in collaboration with the
Dangote Foundation (DF), to provide soft loans to entrepreneurs engaged
in micro, small, and medium scale businesses in the country.

The fund, which
would grant entrepreneurs access at overall single-digits interest rate
of 5%, will be utilised for term loans, working capital loans, leasing
of industrial/business equipment, and trading and allied businesses.

“The provision of
cheap funding to SMEs will come as a great relief to entrepreneurs who
need to reduce their financial costs as they try to deal with high
production costs for generating power and providing other operational
infrastructure,” the president said.

Besides, he said
his administration will continue to support infrastructure for the
development of Small and Growing Businesses (SGBs) by boosting the $500
million intervention fund already in place to enable the BOI and
Nigerian Export-Import (NEXIM) Bank continue to lend at single-digit
interest rates, to facilitate increased access of small businesses to
finance, as well as develop Nigeria’s enterprise culture.

Enterprise
Development Centres, Industrial Clusters, and Job Centres are to be
established to collaborate with the Small and Medium-scale Enterprises
Development Agency of Nigeria (SMEDAN) and 23 Enterprise Development
Centres (EDCs) across the country, to provide business skills training
aimed at improving the managerial capability of entrepreneurs.

At the Job Creation
Summit he hosted last week, Mr. Jonathan reiterated his determination
to initiate various intervention programmes in the key productive
sectors of the economy in all states of the federation, based on their
comparative advantage, to provide incentives for the flow of capital to
the real sectors, to increase productivity and achieve widespread
employment generation, especially for urban and rural youth nationwide.

This is aimed at
creating about 1.5 million income generating employments in the labour
intensive sectors of the economy, namely agriculture, manufacturing,
and building and construction.

Consolidating reforms

In broad terms, Mr.
Jonathan says he hopes to build on the momentum in the
telecommunication sector reform, by replicating the open competition
philosophy in the power sector, where a roadmap has already been
unfolded to drive his administration’s policy option at achieving set
targets.

In the process, the
PDP flag bearer says he has already made it clear to the private sector
operators (formal and informal) as well as local and foreign investors
that he will not hesitate to clear all vested interests that would pose
a threat to quick policy implementation and rapid economic
transformation.

Other proposals
include the consolidation on the Public Works Programme (PWP) to create
1.5 million jobs this year, while a Growth and Employment Pact (GEP)
would enable public-private partnership to enhance growth in
construction, ICT, hide and skin, tourism and entertainment sectors.

Besides, he
believes the power sector roadmap launched last August is on course and
would help improve significantly the country’s electricity supply level
within the next six months when most of the National Integrated Power
Programme (NIPP) projects come on stream, and the transmission and
distribution aspects of the electricity chain are repositioned.

He has also given
assurances that the reforms in the petroleum industry through the
Petroleum Industry Bill (PIB) would lead to the diversification of the
sector’s capacity to generate more jobs and create wealth for Nigerians.

At the launch of
what he calls a ‘gas revolution’ in Abuja, Mr. Jonathan said his
government hopes to partner with the private sector to invest over $25
billion to help transform Nigeria into a petrochemical hub in Africa,
with particular emphasis on stimulating the economy to create over one
million direct and indirect jobs in the country.

Are all these campaign rhetoric or well planned agenda? Time will tell.

TOMORROW: CPC Buhari’s agenda

Following the
misgivings arising from the strategic investment in Transcorp Plc, the
Nigerian Stock Exchange (NSE) is to mediate truce between the two
disputing parties.

A statement by the
Exchange yesterday by its senior manager corporate communications, Wole
Tokede, assured the investing public of the safety of the transaction.

“We wish to assure
the investing public that the parties involved in the transaction have
been issued letters to attend an all-parties meeting, consistent with
our desire to forge a ‘free market’ bound by rules and best practices,”
Mr. Tokede said.

Heirs Holdings
Limited, a private investment vehicle, had on Tuesday said it has
acquired a strategic stake in Transcorp Plc, but the company is
disputing this. However, the Exchange stated that investors are free to
take any investment decision, so long as it conforms to the rules of
the market.

“The Exchange
respects the right of investors in the market to enter into commercial
transactions as they deem fit and within the rules and ethics of the
bourse,” the statement said.

According to the
NSE, HH Capital Limited, through its brokers – BGL Securities Limited,
informed the bourse of its desire to cross 1,970,754,364 units of
shares from willing sellers on March 31, 2011.

“In the course of
the review of the transaction, the Exchange realised that one of the
willing sellers was legally not in position to engage in such a
transaction and this was immediately cancelled,” it stated.

Transcorp’s petition

Last week,
Transcorp sent a petition to the Securities and Exchange Commission
(SEC) claiming that the huge volume trading on its shares on March 31,
2011 was not consistent with market rules.

The firm stated
that a total of 2.51 billion units of its shares representing 10 per
cent of the company’s issued share capital were traded in a single day,
and were shocked at how the transaction was approved by the Stock
Exchange, without information and consent of shareholders and the
company.

“The board and
management hereby object to such a transaction and request that due
process and the provisions of law be allowed where an individual or
group of individuals are interested in a controlling stake in the
company,” the management of Transcorp said.

Heirs Holdings
Limited, in a statement by its director of marketing and corporate
communication, Jenika Mukoro, said that Transcorp shareholders will
benefit from the transaction.

“Our chairman, Tony
O. Elumelu, who was a founding director and investor, believes strongly
in the founding vision of Transcorp as a means for Nigerians to access
the abundant economic opportunities present in the country through the
capital markets,” the statement said.

Shareholders benefit

Victor Ogiemwonyi,
the managing director of Partnership Investment Company Limited, an
investment banking and brokerage firm, said the move would benefit the
shareholders.

“There is nothing
wrong with the transaction. Somebody has bought the shares and he
disclosed his interest. That is all the law requires,” Mr. Ogiemwonyi
said.

According to him, the entrance of a new investor would bring fresh ideas into the company.

“My hope is that
they will rid the company of its bad assets and invest massively in the
tourism and hospitality sector. Tony (Elumelu) has a track record of
turning things around and I hope he will continue with Transcorp,” he
said.

Following the
botched purchase of the national carrier, Nigeria Telecommunications
Limited (NITEL) in June 2009, shareholders of Transcorp had been
waiting on the sidelines, as its share price slumped from a high of
N9.70 to the minimum 50 kobo.

However, hope was
rekindled when Transcorp entered into a joint venture agreement on
March 1 with SacOil Holdings Limited of South Africa (SacOil) to
develop its oil field in collaboration with Energy Equity Resources
Limited (EER).

Sacoil paid $30
million to acquire 20 per cent of the lucrative OPL 281. Since then,
the company’s shares have been on the increase.

However, the firm’s
shares began to record tremendous upswing when information filtered
into the market that a new entrant was taking position. Since then, the
price has risen steadily, closing on yesterday at N1.33, a growth of
166 per cent in less than five weeks.

Transcorp has interests in hotels, agriculture, oil and gas sectors.

The
Nigerian Export-Import Bank (MEXIM) says it is considering a credit
guarantee scheme for local small-scale industrialists. This is to
ameliorate the difficulties they encounter in securing credit
facilities from commercial financial institutions for their operations
and products exports.

The
bank’s managing director, Robert Orya, told NEXT in Abuja yesterday
that Export Credit Agency (ECA), which is mandated to provide risk
bearing and credit facilities in support of the country’s non-oil
export trade, is already in talks with top officials of the Nigerian
Association of Small Scale Industrialists (NASSI) to explore prospects
of developing a memorandum of understanding (MoU) for mutual support,
particularly as it concerns exportable goods, export and import
financing, capacity building, and strengthening of strategic alliances.

“We
hope to explore all avenues to build and strengthen the capacity of
small-scale industrialists and other categories of businesses by
guaranteeing credits to those that lack the requisite collateral to
secure loans from DFIs.

“But
the support would come only after the prospective beneficiary has met
all the requirements set by the Central Bank of Nigeria (CBN) for such
facilities,” Mr. Orya said.

Succour to industrialists

According
to Mr. Orya, a recent meeting with the NASSI officials had revealed
that most small-scale industrialists who neither have technical
capacity nor the requisite collateral to obtain loans and other
facilities from Development Financial Institutions (DFIs) often end up
being frustrated out of business, in total negation of government
objective to boost the country’s Small and Medium-scale Enterprises
(SMEs).

NASSI
president, Chuku Wachuku, said recently that problems often encountered
by manufacturers of exportable products in the country are usually
associated with the dearth of export incentives, lack of export-related
loan facilities to enhance the capacity to produce for exports, to earn
foreign exchange for the country, as well as absence of credits for the
acquisition of relevant machineries to manufacture value-added export
products.

Other
problems include the difficulty in establishing Letters of Credits
(LCs) to facilitate international trades, inability to enter into
bilateral and multilateral agreements for cross-border deals with
small-scale industrialists in other countries, and difficulties in
creating windows for the collateralisation of loans on special
facilities granted to industrialists.

But
the NEXIM boss, who described small-scale industrialists as the engines
of the private sector as well as catalysts for Nigeria’s economic
growth towards achieving the Vision 20:2020 goals, said the bank is
ready to commit its resources into any activity that would help achieve
its mission through the diversification of export-oriented investments
in the manufacturing, agriculture, solid minerals, and services
sub-sectors of the economy.

Acknowledging
the relationship between NEXIM’s mandate and that of NASSI,
particularly regarding the development of SMEs as well as facilitating
more investments in the identified sectors, Mr. Orya said that the
provision of adequate funding for export-induced value-added activities
for small scale industries would boost government’s effort in this
direction.

He
also said strengthening the Start-Your-Own-Business (SYOB) programme,
NEXIM’s self-employment initiative in partnership with the National
Directorate of Employment (NDE) for unemployed graduates and retirees,
would help in checking the high rate of unemployment in the country,
while NEXIM/NEXPORTRADE House Limited (NHL), a public-private
partnership initiative, would facilitate formal cross-border trade and
investments among member states of the Economic Community of West
African States (ECOWAS) and other African countries.

“NEXIM
has always supported SME start-up/green fields projects in various
sub-sectors of the economy, most of which have grown to be amongst
CBN’s top 100 exporters.

“From
inception in 1991 to date, we have intervened in the major sectors of
the economy, by disbursing over N60 billion and $273 million through 52
participating banks to over 400 beneficiaries, including 150 industrial
projects, in the manufacturing, agriculture/agro-allied, solid
minerals, oil & gas, and services sectors. Also, the bank has over
the years purveyed funding,” Mr. Orya said.