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With pre-tax profit at N13.5 billion in the financial year ended December 2010, Stanbic IBTC Bank, a member of the Standard Bank Group, maintained its impressive performance for the year, with total assets increasing to N384.5 billion.

According to the audited results for the year just made public, the profit before tax grew by 31 per cent to N13.5 billion, compared to the N10.3 billion recorded in December 2009; gross earnings eased by 5 per cent to N56.7 billion, compared with prior year’s N59.8 billion, while total assets went up 13 per cent from N340.5 billion in December 2009.

Chief Executive Officer, Stanbic IBTC Bank, Chris Newson, emphasised that the bank is strategically primed to achieve higher growth in the years ahead, despite the tough operating conditions.

“Despite the testing operating environment, we have grown our business responsibly and have made good progress in expanding our loan book. We recorded a 41 per cent increase on December 2009’s levels of gross loans, with a corresponding 24 per cent reduction in our non-performing loans portfolio.

“This is testament to our ability to unlock profitable investment outlets in the face of significant market liquidity and efficiency of our risk management systems,” Mr. Newson said.

The newly launched code of corporate governance for quoted companies at the Nigerian Stock Exchange has been welcomed by investors.

While some market watchers say the various regulations by the Securities and Exchange Commission (SEC) to restore confidence in the market have not yielded the intended results, some investors who spoke to NEXT yesterday said the new code initiative, if well enforced, will further boost investors’ confidence that has been eroded in the system.

Albert Edun, an executive member of the Nigerian Shareholders Solidarity Association, said that with the reviewed code of corporate governance, “I believe that companies will now be run in a transparent manner.”

“We, the investors, can then get accurate and reliable information that will allow us make informed decision on investment,” Mr. Edun said.

David Amaechi, an investment analyst and a member of the Shareholders Association of Nigeria, said the new code will boost investors’ confidence in quoted companies, “because the code now mandates companies to state in their annual financial results a corporate governance report detailing how they are complying with the corporate governance.”

“SEC and the review committee should be acknowledged because of this initiative,” Mr. Amaechi said, adding that enforcement of the code should be priority for the Exchange Commission to further boost confidence in the market.

A review committee, established September 2008, headed by Balarabe Mahmoud, was set up to review and update the 2003 code of corporate governance for public companies in Nigeria.

International best practice

At the official launch of the new code on Monday, Udoma Udo Udoma, chairman of SEC, said the corporate governance code was reviewed in the international best practice.

“In Nigeria, it became particularity important because of some of the unethical practice that was revealed in the administration of some companies,” Mr. Udoma said.

“The new code is formulated to guide corporate companies in the conduct of their affairs. While the application of the new code is limited to public companies, other companies are encouraged to use the principles set out in the code to guide their own activities. While the code sets out best practices, it allows companies to determine which one best suits them.

“Take for instance the issue of committees; while the code prescribes and describes the sort of committee each company should have, it leaves to the board of such company the power to determine which one and how many they need for their particular business; because it is clear that one type does not suit all,” Mr. Udoma said.

Christopher Kolade, a former ambassador to the United Kingdom, said at the occasion that every company must bring up to its board a kind of competence that is required to run a successful business.

Mr. Kolade said companies’ boards must also communicate with various operators in their organisations.

“Communication is key to the success of the organisation. Communication, not just in giving accurate information in good times, but also in giving accurate information in times that are not so good because that is the way to be transparent,” Mr. Kolade said.

The African Leadership Academy, based in South
Africa, is a world class school committed to grooming a new generation of
leaders that would be catalysts for transformation change on the continent. In
this interview, the founder, Fred Swaniker from Ghana, talks on the challenges
of development in Africa and how the academy is contributing to bring change to
the continent. The interview was conducted via email.

Fred, 34, had the idea of the academy while on
internship in Lagos. Since 2007, the African Leadership Academy has been at the
forefront of changing the fate of the continent by training young Africans who
are passionate about making a difference in the community

What are the criteria for
eligibility and your process for recruitment?

Recruitment begins with a number of Admissions officers working
throughout Africa to advertise ALA and encourage young people between the ages
of 16 and 19 with leadership potential to apply. The preliminary application
form asks them to write essays describing themselves and how they have changed
or influenced their communities. Our dedicated admissions team reads every
application and narrows around 3,000 initial applicants to a shortlist of
roughly 400 finalists.

We then invite these finalists to participate in “finalist
weekends”, which we hold in a variety of countries across the continent. During
these weekends we interview each applicant, test their academic readiness, and
take them through their paces with various group activities that give us a
sense of how they lead in group settings. Finalists then submit several more
essays and letters of recommendation. After this, we select approximately 100
young leaders who are invited to attend the Academy. We are looking for
leadership potential, entrepreneurial spirit, passion for Africa, dedication to
service, and academic potential.

How do you raise funds
for the academy?

We have a number of supporters and sponsors around the world who
contribute to our cause. We firmly believe that financial means (or lack
thereof) should not be a barrier to entering the academy. Our supporters are
both individuals and companies that offer varying levels of support from once
off donations to long term annual commitments or larger project-specific
grants.

We do also have a small contingent of fee-paying students that
covers some of our costs and every student (even those receiving significant
financial support) is expected to make at least a small contribution toward the
cost of the program.

So far, how would you
assess your journey at the ALA?

My journey at the Academy has been a very fulfilling one. Being
one of the founders, I am in the fortunate position of having been present from
the very beginning of the Academy’s development and I have been so thrilled to
watch it grow from strength to strength. It is consistently amazing to me how
something which started as an idea in business school has developed into an
institution that houses some of Africa’s most talented future leaders. I have
enjoyed every new step in the growth of ALA and I look forward to it continuing
to develop the next generation of African leaders.

When will the school
become a fully-fledged secondary school?

At the moment we do not have plans to develop into a
fully-fledged secondary school. ALA is supposed to be a pre-university program
providing the very best education and opportunities to develop Africa’s most
outstanding leaders. One of the things that make the ALA experience so
meaningful is the extraordinary sense of community our young leaders experience
on campus. Smaller numbers allow us to be dedicated to each young leader and to
develop their particular brand of leadership for Africa’s future.

While we have not ruled out expanding our initial two-year
full-time program to say 3 or 4 years, we do not have plans to do so at the
moment. We are however developing systems and an infrastructure to support our
young leaders after they leave our initial 2-year program and go on to
university and beyond.

Are there plans for a
primary school?

At the moment we have no plans to expand the Academy into a
primary school. The idea behind the academy is to source young people who have
shown potential for leadership within their own communities and so if we
recruit at too young an age, candidates would most likely not have had
opportunities to demonstrate the concrete acts of leadership we are looking
for.

What, in your view, is
the most serious issue facing the educational system in Africa?

One of the main problems we have identified is that African
schools often do not teach students about Africa. In a number of countries on
the continent, students are taught much more about European history, the geography
of the Americas, Western literature and very little or nothing about African
history, African geography, African politics and African literature. But how
can we solve our problems if we do not understand our history and our context?

So at ALA, we try to encourage an understanding for Africa as a
continent. We believe that with passion and a good understanding of the
dynamics of Africa, our young leaders will be more effective in bringing about
significant change on the continent. The other issue facing the educational
system in Africa is the “rote” learning that takes place in most schools. This
method encourages students to simply memorize facts as opposed to developing
their ability to think independently and solve problems in a creative manner.

We cannot develop Africa without developing our young people as
innovators, entrepreneurs, and creative thinkers. So at ALA, we adopt a much
more participatory approach to learning, in which students do not simply get
lectures from their teachers, but they are pushed to think for themselves and
to challenge conventional wisdom.

One thing that is
interesting is your concept of ethical leadership in Africa. Can you throw more
light on this?

Ethical leaders are committed to doing what is best for the
people of their country and continent – even if they must make personal
sacrifices to do so – and they have a strong moral compass which allows them to
steer clear of corruption and self-serving behaviour. Ethical leaders put the
needs of their people before their own. Ethical leaders understand the rich
diversity that makes Africa so unique and are willing to co-operate and
collaborate to create a future which is positive for the continent. Ethical
leadership is about doing your best, every day, to institute policies and
systems which uplift the downtrodden and promote equality, diversity and basic
human rights.

Your dream is to groom
6000 young African leaders within the next 50 years. Is this an ambitious
project or do you believe that this number is enough to bring about the kind of
change you desire and which is needed on the continent?

We believe that a critical mass of 6000 leaders will set in
motion a self-reinforcing cycle of transformative change across Africa. These
leaders will implement systems and design policies that will, in turn encourage
the development of more ethical leaders. It is a very ambitious project, and we
are conscious of the enormity of the task. We know that what this Academy seeks
to achieve is daunting in its scale but we firmly believe that we can achieve
our goal: The goal of a peaceful and prosperous Africa.

We have seen effort by
the MO Ibrahim foundation to encourage responsible leadership in Africa and how
nearly improbably this has been. Do you sincerely believe that the problem of
Africa is just leadership or more the absence of strong institutions?

There are many problems facing our continent and there are a
variety of projects we could involve ourselves in, which seek to solve those
problems. While ethical leadership might not be the most visceral or tangible
challenge facing the continent today (in contrast to something like poverty or
HIV/Aids), we believe that leadership is the key to finding the solutions to
all of Africa’s other problems.

If we train leaders in politics, they will help implement the
policies that create work and alleviate poverty and debt. If we create leaders
in health care, they will help solve the problems of infectious diseases like
HIV/AIDS. If we create entrepreneurial leaders, they will build companies that
can create jobs for the millions who are unemployed on the continent. It is
true that the lack of strong institutions is problematic in the African
context; however, we believe that the right leaders will be able to develop new
institutions and redesign ineffective ones. Leadership is a catalyst for
positive change in all segments and sectors of business and society – and it is
for this reason that it is our overriding focus.

Some people believe that
Africa’s problems can only be solved by home grown solutions. To this group,
how would you justify still sending your products to universities outside of
the continent?

I believe that the only way Africa will develop is through the
resourcefulness and ingenuity of its own people. Africa needs African leaders
to create uniquely African solutions to its uniquely African problems. At the
same time, I believe that our young leaders can benefit tremendously from
exposure to institutions, organizations, and networks that are rooted outside
the continent.

Our students are mature enough to benefit from world-class
educational resources in countries such as the United States and Europe without
losing their passion and commitment for the continent, and our curriculum
reinforces this framework. We would love to send more of our students to top
universities around Africa but, unfortunately, the students struggle to get
scholarships and financial aid to these institutions. We have found foreign
institutions – particularly those in the United States – have tremendous
financial resources that enable our young leaders to benefit from outstanding
educational experiences they might not otherwise have access to.

For this reason, while some of our students will continue to
attend outstanding universities in Africa, others may find it more economically
viable to attend universities outside the continent. I also want to emphasize
that our customized approach to leadership development – in combination with
our forgivable loan program – is designed to ensure that our leaders do indeed
return to the continent to leverage the skills and network they built abroad to
drive change across Africa.

It is taken that one of
the biggest problems of the continent today is corruption. How are you looking
at this in ensuring that your products can uphold the highest standards of
integrity?

Our leadership curriculum focuses on the importance of ethical
leadership to the overall success and prosperity of the continent and
highlights the extraordinary damage that is caused by corruption and
mismanagement. These lessons are further reinforced by guest speakers who
inspire our young leaders with stories of achieving extraordinary social impact
in the face of overwhelming institutional corruption. When our students see
tangible examples of how ethical leadership can truly transform countries and
communities, they are motivated to combat the endemic corruption which has
plagued the continent for so long.

I am curious to know why
this academy is not cited in Nigeria, being the most populous country on the
continent. Is there any special attraction in South Africa, or rather, is there
something that makes it difficult for Nigeria to host this academy?

We decided to found the Academy in South Africa because it
serves as the economic and transportation hub of sub-Saharan Africa.
Johannesburg’s highly developed transportation infrastructure – combined with
its highly diverse and truly pan-African population – made it the ideal city in
which to locate our Academy.

I understand that the
students who go through your academy on a scholarship are expected to return
and work in the continent for at least ten years after their studies abroad. Is
this bonding necessary given that this is the era of globalization and your
students should be able to give back to their societies and also humanity no
matter the country they decide to reside?

Our mission is simple: to transform the continent by developing
future generations of African leaders. In our view, the most effective way to
achieve this mission is by ensuring that the young leaders we develop are fully
committed to the continent, and that they are not using ALA as a “ticket out”.

For this reason, we make it very clear to all our applicants
that any scholarship aid they may receive is contingent on living and working
on the continent for a period of 10 years following their 25th birthday. This
policy serves two important purposes: (1) It ensures that those young people
who choose to attend the Academy are genuinely and wholeheartedly committed to
Africa and its development; and (2) it ensures that the 6,000 leaders we are
developing and supporting will be located in Africa, where they are best
positioned to devise innovative solutions to the continent’s most pressing
social and economic challenges. While we acknowledge that those living outside
the continent can contribute to its empowerment, we believe those living on the
continent can effect change in a more compelling and impactful fashion.

So would you like us to
believe that you are doing this as a service, but I am curious, is this venture
profitable? Do you make lots of money? How much?

ALA is a non-profit organisation. All the money we raise goes
towards providing scholarships for our students and covering the operating
costs of the Academy. Employees, including myself, receive salaries, but most
of us could earn far more if we were to work in the corporate sector. We are
doing this because of our passion for Africa and desire to see it prosper.

Are we likely to see ALA
set up in other countries?

At this point, we are focused on fully institutionalizing the
Academy in South Africa, and we do not have immediate plans to open other
branches in other countries.

The Nigerian Communications Commission (NCC) is to begin sim card registration in Lagos next week, Demola Aladekomo, MD/CEO, Chams, a global technology company and the authorised firm assigned to carry out the sim card registration by the NCC, said at the ennovators breakfast series event organised by Financial Technology magazine, a financial technology news portal in Lagos yesterday.

Mr. Aladekomo said for the past two weeks, the firm had carried out a pilot exercise, registering a few people to test run its efficiency.

The sim registration is coming amid criticism by many that the commission had no business doing that since the communication companies had earlier registered their customers.

He, however, said, “Sim card registration is not a strange process. It is happening in some other countries in the world too. It is not such a strange activity to be carried out,” adding that some countries such as Kenya, South Africa, and Botswana are among the series of other countries carrying out the activity.

The conflict of interest

Some Nigerians have condemned the exercise, following the supposed disconnect between the operators and the regulator on who to carry out the Sim registration exercise.

Mr. Aladekomo said there was a clear directive initially so that there would be no conflict in data gathering between the regulator and the operators of the telecoms industry.

“It was pretty clear initially. The NCC was to register all old sim cards because they were to use it to create a data base for the nation so that the nation can benefit, including serving as a database for the national identity, while the operators were to register new sim cards so that no one is excluded.

“Unfortunately, because of competition, the operators decided to register the old and the new sim cards and that created a lot of confusion in the industry,” he said.

According to him, from the way the operators were going about it, it was almost like the operators did not actually want the regulators to know all the number of sim cards they operated.

Some finance experts say the sim registration would help address some of the challenges of customer identification in the banking industry, which has to battle with identifying its customers especially when it comes to e-payment, mobile payment, and all the related banking activities.

The Central Bank too, has in the last few years, been seeking ways to help banks properly identify their customers’ at the most affordable means, to reduce cases of fraud in the industry.

Abayomi Atoloye, director, banking and payment system department, Central Bank of Nigeria, who gave the keynote address at the event, expressed optimism that the event will provide an opportunity for participants to discuss the “burning issue on multiplicity of SIM Card Registration” and the know your customer ‘KYC’ for efficient financial services delivery, as well as touch on developments in e-payments, and electronic banking in the past one year.

“I will, therefore, attempt to summarise the efforts of Central Bank of Nigeria in the development of Payments System in the last one year and the Regulatory Outlook for the Nigerian Payments System – especially, payments through the electronic cards,” he said.

According to him, the Central Bank of Nigeria had been making efforts under the Payments System Vision 2020, to promote and entrench electronic payments as the major channel for payment and settlement, by all economic agents, away from the current dominance of cash-based transactions.

“In this regard, mobile phone was identified as a channel for effecting electronic payment between person-to-person. Recently, the Central Bank gave approval-in-principle to 16 mobile payments scheme operators to enhance the person-to-person payments services in Nigeria,” he said.

As part of its policies to minimise the level of card fraud in the Nigerian Payments System, the regulatory body had directed banks to migrate all their cards from magnetic stripe technology to chip+PIN, otherwise known as EMV, due to the weaknesses of the former.

Also, the development of Guidelines for Credit Bureau Operations in Nigeria gave rise to the approval of three credit bureaus which have significant influence in promoting credit cards operations in the country.

The way forward

Mr. Atoloye said over the next few years, the Central Bank’s focus will be on strengthening the institutional and regulatory frameworks that would encourage financial inclusion of the unbanked and promote more usage of electronic payment, as clearly enunciated in the Payment Systems Vision 2020.

He added that some factors in particular are expected to drive the usage of electronic payments in the near future.

These include the application of mobile technology for financial services, especially in rural areas, which is expected to ensure that a large percentage of the population outside the formal banking system have access to financial services using one of the three scenarios of card-based, account-based, and virtual account. The draft National Payments System Bill, which is undergoing approval process and is expected to address legal barriers to electronic payments such as the admissibility of electronic evidence in the law court.

Also, the adoption of National Identity Number (NIN) as part of the requirements for opening of accounts is expected to address the challenge of unique identifier that affects the widespread of credit cards in Nigeria, while the adoption of electronic payments by organisations for payment of allowances to employee, pensioners, and social beneficiaries is expected to also boost card payment in Nigeria.

South African
construction firm, Group Five, may construct a 5 billion rand solar
plant to supply power utility, Eskom, with first power seen in two
years, a company official said on Tuesday.

“We hope to be
producing power in 2013, when it starts to come on line,” Greg Heale,
director of engineering and construction, told Reuters on the sidelines
of an African refinery conference.

He later said the
project would supply energy to power utility, Eskom, and not mining
firms, and would go ahead only if it was selected as part of South
Africa’s renewable energy procurement process.

Mr. Heale said
Group Five, South Africa’s fourth-largest construction firm, is
expected to conclude all contractual arrangements, including off-take
agreements, within the next nine months.

The project, to be
located in the sun-drenched Northern Cape province, is hopefully the
first of a number of phases that could be constructed on the site,
eventually producing up to 450 MW, Mr. Heale said.

Africa’s largest
economy is rapidly moving away from a reliance on coal, which supplies
more than 90 per cent of the country’s energy needs, to energy sources
such as solar, wind, and nuclear.

South Africa could
produce its first solar power from a proposed $21 billion dollar solar
park by 2012, eventually supplying 5,000 MW of power.

The country wants
to accelerate its renewable energy programme to meet a target of 10,000
gigawatt hours by 2013. Shares in Group Five traded 0.65 per cent
higher at 26.47 rand by 1059 GMT, slightly outpacing a 0.5 per cent
firmer JSE all-Share index.

Last month, Group
Five said diluted headline EPS for the six months to end-December fell
21 percent to 198 cents, compared with 249 cents in the same period a
year earlier. The group said its total secured construction order book
stood at 9.3 billion rand, little changed from the end of June.

The South African
construction industry, which avoided the worst of the global economic
crisis due to big projects ahead of the 2010 World Cup, is now having
difficulty finding new projects as both the government and the private
sector hold back on spending.

The industry is also the target of a sweeping bid-rigging probe by competition authorities.

Reuters

Cell phones have become such a major part of our existence and for most people, our telephone bills have become a large monthly expense.

Have you ever returned from abroad to find a shocking mobile phone bill awaiting you? When you use your phone abroad, as soon as it is detected on a roaming partners network, expensive international roaming rates and charges kick in.

Roaming costs have tarnished the wonderful memories of many vacations, but fortunately, there are practical steps you can take to stay in control of your phone bill and still stay connected with family, friends, and business associates.

Know before you go

Do you know what you are being charged for? Before you leave your country, ask your service provider about roaming fees for both phone and data use so that you have at least a rough idea of the cost of using your phone abroad.

When travelling internationally, you are typically charged both for receiving as well as making calls, for sending text messages, accessing e-mails, voice mail messages, surfing the web, and downloading videos, music, and images in the countries you are visiting.

What services do you really need?

Do you need to be able to make and receive calls? Do you need real time Internet access, or other data services on your device? Do you really need to check your e-mail instantly? This will determine how you should use your device on your trip.

Send and receive text messages

It is free to receive texts abroad, but there are significant charges to receive calls, so if you are having regular conversations with people in Nigeria, try to encourage them to make your interaction text based.

Use Skype

By using a web-based phone service, you can keep your bills down. Service providers such as Google and Skype, offer free calling at relatively low rates on international calls.

If you are travelling with your laptop, you can use Skype at any wireless hotspot or from your hotel room.

Be careful of your voice mail

Even if you are careful with your mobile phone use and avoid making unnecessary calls, do you know that if someone leaves a message on your voicemail, you are billed as though you were receiving an international call? Even worse, you will be charged again to listen to those messages.

Buy a local SIM card

Buying a local SIM card can be the cheapest way of using your mobile abroad, particularly if you plan to spend an extended period in the same country. Replace the SIM card in your phone or buy a cheap GSM-enabled phone as an alternate phone.

Switch data roaming off

The new-generation smart phones such as the iPhone and the Blackberry have become hugely popular devices providing access to your emails and the Internet, a world of shopping, and social networking applications just a touch away. We thus unwittingly leave ourselves open to international roaming charges on our smart phones as soon as we switch them on.

The continuous activity utilizes data bandwidth and this leads to constant charging and huge bills in accidental roaming fees. If you do not need data services on your trip and can’t resist the temptation to sneak a quick e-mail check on your smart phone, then turn off the data service when you are roaming.

The good thing about smart phones is there are options and you can choose which services to cut off. After disabling data services, you will still be able to make and receive calls and text messages. In addition, you can turn this feature on and off at will so you can still check your emails periodically.

Use wi-fi

If you will have access to wi-fi hotspots, business centres, or Internet cafes at your destination, you won’t have to use your mobile phone all the time and can use your laptop.

However, be cautious and only connect to wi-fi hotspots that you feel you can trust. Use ‘free’ hotspots with extreme caution; they may be convenient but are not always safe as there is always a danger of hacking or snooping.

To at least reduce your vulnerability, use strong passwords and install some security software. Wi-fi access, whilst it may not be free, is usually much cheaper than paying data roaming costs.

As a mobile phone user, you must take some responsibility for staying informed of the cost of services that you subscribe to.

It is also important that mobile phone operators are more proactive about providing cost information for users rather than for subscribers having to stumble on information after a bad experience. Much of the information on the service provider websites is confusing and not that easy to understand.

Clearly, what subscribers want, need, and deserve is more transparency, so that they can confidently use data services when roaming, as well as some sort of control mechanism to ensure they do not incur excessively large bills when roaming and without even realising it.

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.

A triumvirate of
reformers – Central Bank governor, Lamido Sanusi, AMCON chief
executive, Mustapha Chike-Obi, and SEC director, Arunma Oteh – has
turned Nigeria’s financial markets inside out over the past 18 months.

A $4 billion
commercial bank bailout in 2009 and the sacking of eight bank chiefs
for reckless lending, engineered by Mr. Sanusi, was thefirst strike,
shocking a corporate elite that was unused to close oversight.

Ms. Oteh, who took
office in January 2010, pursued stockbrokers with equal vigour, taking
260 individuals and entities to a special tribunal over alleged price
fixing and insider trading. AMCON, established last year to soak up
non-performing loans in exchange for government bonds, is hoping to
rebuild commercial banks’ balance sheets after the bailout and deepen
the fledgling debt market as it does so. The reform drive has pleased
foreign investors.

But by demonstrating the importance of a few individuals to
financial reforms, the triumvirate’s success indicates the reforms’
vulnerability. Next month’s national elections could cut the political
support that the reformers enjoy, particularly if a new cabinet is less
willing to give them free rein.

To cut leakages in
the system and ensure efficiency in the utilisation of capital
expenditure, the federal government will soon sign up to be a member
nation of the Construction Sector Transparency Initiative (CoST).

This is a
multi-stakeholder initiative to increase transparency and
accountability in the construction sector. Finance minister, Olusegun
Aganga, who disclosed this, said the way public construction projects
are handled in Nigeria is inefficient and allows for corruption to
thrive.

Speaking at the
sidelines of the one-day interactive session with the organised private
sector in Lagos on Tuesday, he said the initiative would allow local
communities to monitor projects in the area and help to plug wastage in
the system.

“One other way to
make it transparent is to join the CoST. Only a few countries, United
Kingdom taking the lead, have actually established that process and I
want us to join. That way, we bring public and private sector involved
in how we monitor our project. It introduces accountability and
transparency,” Mr. Aganga said.

He said the
process, when fully established, would allow independent committee to
monitor ongoing government projects across the country.

Constituency monitor

“The projects will
be on the internet so if there is a road construction in Nnewi to
Umuahia, you will know the roads that are being constructed in an area
and the constituents will know when the project is supposed to start
and end, and they will be able to report back at that local level,” he
further said.

He said the
independent committee would investigate and challenge projects which do
not meet the time lines. The minister said this is part of ways of
ensuring fiscal discipline. Observers are however wondering when this
would come into operation when government contracts are shrouded in
mystery.

CoST is already in
operation in seven countries: Ethiopia, Malawi, the Philippines,
Tanzania, United Kingdom, Vietnam, and Zambia.

Explaining the depletion in the foreign reserves, he said government is making effort to reduce the trend in the 2011 budget.

“In overhead, the
proposal which we sent to the National Assembly was reduced by 30 per
cent. The whole of last year we were shouting about borrowing, but we
really should have shouted when the budget was being put together.
Really, when you have an unnecessarily expansionary budget, that
deficit has to be funded and the only way is from your savings or from
borrowing,” the minister said.

Sovereign fund

Mr. Aganga said
there was need to reduce the level of expenditure and the level of
borrowing and the government is ready and prepared to introduce
discipline in how public finances are managed. Part of this, he said,
is the push to establish the Sovereign Wealth Fund to be managed by an
agency of competent professionals, some of whose services would be out
sourced.

“The Sovereign
Wealth Fund will have three boxes. One will be inter-generation fund
for future generation, and that will be invested in fixed income
securities and equities. The second box will be stabilisation box which
will be made available when there is a fall in revenue,” Mr. Aganga
said.

The third component of the fund, he said, is the infrastructure fund
which will invest in local infrastructure such as rail, roads, power,
and ports.

Last week, Goodluck
Jonathan signed what has been described as binding memoranda of
understanding (MoUs) with petrochemical companies from Saudi Arabia and
India as well as with Chevron, AGIP, and Oando. According to the
president, this step signalled the start of a Gas Revolution in Nigeria.

Coming a week
before general elections, we cannot fail to note the political
undertones in the timing of the launch. Past governments have made
pronouncements on their determination to halt the heinous acts of gas
flaring over the past decades. These have amounted to nothing but hot
air.

Administrative
measures to curb the menace started in 1969. Ten years after the
initial moves, the 1979 Gas Reinjection decree set 1984 as the
essential date when gas flaring became outlawed in Nigeria. However,
the penalty for flouting the law was a slap on the wrist to the oil
companies so that they continued flaring, poisoning the environment and
maiming the people.

The last set dates
for ending gas flaring were given by the late Yar’Adua in December
2008. Towards that deadline, Odein Ajumogobia, at that time the
minister of state for petroleum, announced that a new flare out formula
was being worked out to end gas flaring without hurting government
revenue.

When an earlier
target date of December 2007 was getting close, the same minister
announced that zero gas flare was a moving target.

The gas revolution
announced by Mr. Jonathan is replete with figures on how much money
would be spent on the various projects, but as far as news reports go,
we have seen very little of the volumes of associated gas currently
being flared that the projects would take up.

The drums are very
loud that foreign direct investments will bring in $10 billion and an
aggregate investment of $25 billion over the next three years, with
activities in fertilizer production, petrochemicals, and methanol
manufacturing.

All these will add
up to create about half a million jobs directly and indirectly. But
statistics can be colourful, especially when they are of the Nigerian
variety.

Except for Chevron,
which says it would start by delivering 175 million cubic feet of gas a
day “once the pipelines and infrastructure are in place”, we don’t see
concrete gas utilisation figures associated with this revolution.

Undoubtedly,
efforts have been made in the past by some oil companies to reduce the
amount of gas flared. For example, the Nigerian National Petroleum
Corporation (NNPC) and Mobil’s East Area Natural Gas-to-Liquid (NGL II)
project initiated in 2006 was completed ahead of schedule in 2008 and
was designed to utilise 950 million standard cubic feet of gas daily.

Chevron also
announced that the West African Gas Pipeline project (WAGP) would
significantly dent the amount of gas being flared in the oil fields.

It turned out that
this was not the case because, according to some estimates, less than
20 per cent of the gas on this pipeline is associated with crude oil
production. The bulk of the gas comes from gas fields, rather than oil
fields.

As for the oil
company AGIP, their notoriety in the area of gas flaring is marked by
their seeking to claim carbon credits for utilising some of the gas
they have been flaring at Kwale in the face of the fact that the
activity has not ceased to be illegal in Nigeria.

The same can be
said of Chevron and their claims of the WAGP as well as of other
companies such as Pan Ocean, which is making strides towards obtaining
carbon credits through this route dotted with ethical and moral
questions.

Nigeria’s huge gas
reserves, easily accessible in new gas fields, have made the stoppage
of gas flaring unattractive to an industry that has admittedly taken
the act as a routine matter since the 1950s, despite public outcry.
Nigeria is said to have proven gas reserves of about 187 trillion cubic
feet.

The 2005 estimates
by the World Bank indicated that Nigeria flares about 812 billion cubic
feet of gas daily. We can argue all we want on whether this figure has
increased or reduced with the passage of time.

Oil companies
sometimes make curious claims about how much reduction they have
achieved in their flaring binge. Some have claimed up to 30 per cent
reduction, but the reality on the ground has not backed up such claims.

The gas revolution
also has an anchor on the stomach, as marked by the proposed fertiliser
plants. Obviously, the existing fertiliser plant in Nigeria has not
made a significant dent on supply of the product in the country and
this has left the field open for above and below board games.

While launching the
gas revolution project, the president declared, “We can only be
successful if our actions impact on the common man in Nigeria. The
agricultural revolution arising from the fertilizer and blending plants
will create affordable food for Nigerians and a lot more for export.
The LPG agenda will touch the lives of many households, as cheaper and
cleaner LPG displaces kerosene. The disposable income that arises from
the savings will result in the purchase of more goods and services,
boosting GDP.”

Good lecture, Mr.
President. However, when it comes to wholesome food provision for the
present and in the future, it has been shown that this will come
through farmers who cultivate using agro-ecological methods, and will
not be dependent on the use of artificial fertilisers that are climate
changers and ultimately harm soils and water bodies.

Let the Gas
Revolution roll, but let it begin by the release of the figures of
associated gas to be used in the project, as well as the schedule for
the environmental and other impact assessments for the project.

And, of course, the
question remains, Mr. President: when will gas flares be quenched? Do
we take that the revolution will begin to snuff some flares out in
three years and continue over indeterminate years into the future?

The
management of the Nigerian Stock Exchange (NSE) yesterday suspended
Binos Yaroe, general manager, Listing and Quotation Department.

He
was placed on indefinite suspension over what was described as
“indiscipline act”. However, no further explanation was given as to the
nature of the indiscipline.

Mr. Yaroe, who was suspended on Tuesday, has been asked to stay off work from the following day (yesterday) till further notice.

Wole
Tokede, the NSE’s spokesperson, confirmed the suspension and said the
sanction was “an internal discipline of the Exchange” measured against
the offender.

The
development has been generating various comments from some market
operators. A stockbroker, who spoke to NEXT on the condition of
anonymity because of the sensitivity of the issue, said he believed
that Mr. Yaroe’s suspension was not unconnected with plans by the
interim administration of the NSE to “further clear away all the old
members of staff to give Oscar Onyema, the chief executive officer
designate, a fresh start.”

An
official of the NSE, who also pleaded anonymity, said, “His (Mr.
Yaroe’s) suspension was the outcome of the Exchange’s effort to
practice what it preaches on enforcement of good corporate governance.”

However,
Mr. Tokede said, “I know that he (Mr. Yaroe) has been suspended but I
don’t know whether definite or it has a time dimension,” adding that
the suspension was “an internal discipline of the Exchange, as it does
not have anything to do with the insinuation that they (the NSE) are
cleaning the road for the incoming chief executive officer.”

Emmanuel
Ikazoboh, the interim head of the NSE, had sacked 95 staff of the
Exchange few weeks after he assumed office, following the sack of Ndi
Okereke-Onyiuke last August on allegations of financial mismanagement.

Also,
while some of the senior staff with insider knowledge of the system had
to resign because of pressure from some quarters, Mr. Yaroe, one of
those supposedly pencilled down to head the Exchange if Mrs.
Okereke-Onyiuke had retired, remained in the market until his
suspension.

Some
market watchers said that the report on the investigation of the
affairs of the NSE under the leadership of its former director general,
Mrs. Okereke-Onyiuke, may indict some of its general managers,
including Mr. Yaroe.

NEXT
had reported that the yet-to-be officially released forensic report
showed that in 2008, the NSE expended a total of N186 million in
purchases of Rolex watches for long serving employees.

In
the mean time, the Federal High Court, Ikoyi, has adjourned judgment
till April 4, on the suit filed by Mrs. Okereke-Onyiuke, challenging
her sack as the director general of the NSE.