Nigeria Content Online

Splitting the atom
was a major technological feat for humankind. Releasing energy from it
for electricity production was yet another major step towards
supporting the unfolding path of civilisation.

The worst memories
of the deliberate unleashing of the power of a nuclear device remain
the exploding of atomic bombs over Japanese towns of Hiroshima and
Nagasaki in 1945, towards the end of the Second World War.

In terms of nuclear
accidents of monumental disaster, the 1986 Chernobyl disaster in
Ukraine (then in the former Soviet Union) has no match. Many deaths and
severe health problems followed this accident. The radioactivity that
accompanied the Chernobyl accident was several times higher than what
was unleashed by the atomic bombs dropped on Japan during the Second
World War.

The radiation
spread as far as Belarus, Russia, Ukraine, and parts of France and
Italy. The Chernobyl accident was adjudged to have resulted from human
error, including design defects. It was also accompanied by a series of
attempts to cover up the impacts, as well as a shrouding of the
exploded reactors in defective concrete.

Today, the world is
alarmed by the massive impacts of the 8.9 or 9.0 magnitude earthquake
that struck off the coast of Honshu Island in Japan. The combined
effect of the earthquake and the ensuing tsunami has astonished a
watching world, brought great misery to the people of Japan, and raised
a huge question mark about how prepared we can ever be for natural
disasters.

Everyone accepts
that Japan is well equipped and prepared to handle earthquakes, with
building codes and other emergency infrastructure set to deal with such
happenstance. What has added a new twist to the current situation is
the impact that the earthquake and tsunami has had on Japan’s nuclear
power plants.

An explosion at the
Daiichi plant near Fukushima on March 12 raised anxieties. The
explosion blew off the upper exterior walls of the plant. The standby
diesel generator that would have pumped water to cool the plant failed
one hour after the earthquake struck, leading to the overheating of the
water and resulting in the explosion.

The authorities
announced that the reactor core of the plant was safe, and that there
wasn’t a huge radiation leak. Nevertheless, over 100, 000 people had to
be moved, owing to fears of radiation impacts. The evacuation zone
stretched over 20 kilometres radius of the plant. Over the next few
days, the radiation kept below acceptable official levels, although
anxiety levels remained high.

A more severe
explosion early on March 15 raised radiation levels, increasing fears
that the containment vessel of reactor 2 had been damaged. The
evacuation of emergency workers from the power plant signified the
possibility of a nuclear catastrophe.

The nuclear game is
getting a link to soccer in Brazil where there are plans to bring a new
nuclear power plant on stream, early enough to provide electricity for
the 2014 FIFA World Cup fiesta the country would then be hosting. The
country already runs two nuclear power plants that came into use in
1985 and 2000, meeting 50 per cent of the electricity needs of the
state of Rio de Janeiro. Environmental concerns are being addressed
through pledges to adhere to rules. But pledges are not so reassuring
in these matters.

Closer home in
Africa, the drive towards nuclear power is gathering momentum. South
Africa already invests huge sums in this mode of energy generation and
produces 5 per cent of its electricity from nuclear plants. Uranium
rich countries such as Namibia believe that this is a way to boost
economic development. There have even been talks of the possibility of
building floating nuclear plants off the coast of Namibia.

Although Namibia is
not earthquake prone, this does not sound like an exciting or safe way
to go. Apart from the risks involved in operating nuclear power plants,
it is not quite clear to whom the country plans to export the surplus
electricity that would be generated by this plant. One could venture to
say that floating nuclear plants would be dynamic power generators and
may be moved closer to export markets, possibly as far away as energy
starved Nigeria.

The incident from
Japan also underscores the need to move away from mega power
infrastructures that depend on extensive distribution grids. It
suggests that nations should invest in the development of renewable
energy sources from abundant solar, wind, and other resources, rather
than embark on high-risk technologies that we cannot quite control.

It is also a time
to realise the viability of localised energy provision on the basis of
energy autonomy for discrete zones and communities. This would be
cheaper to deliver and ensures better energy supply, including during
crisis situations.

Considering
Nigeria’s emergency response preparedness and capacities in simple
areas like fires, oil spills, and industrial accidents, as well as the
quality of maintenance of our hydropower and other plants, venturing
into the nuclear power arena here is nothing short of courting
disaster.

Nigeria’s crude oil output dropped 3.8 per cent in February at
2.098m barrels per day (bpd), though it remained Africa’s top oil producer,
outperforming Angola (1.704m bpd), Libya (1.347m bpd), and Algeria (1.261m
bpd).

In its March Monthly Oil Market Report released this week, the
Organisation of the Petroleum Exporting Countries (OPEC) estimated the nation’s
crude oil output at 2.098m barrels per day (bpd) in February, from 2.181m bpd
in January, and 2.192m bpd in December.

Samir Gadio, Emerging Market strategist, Standard Bank, says
these statistics seem to suggest that a sizeable increase in production in the
short-to-medium term looks somewhat unlikely, until new oil fields come on
stream and the existing infrastructure operates at a higher capacity.

“Although last month’s output was still up 7.4 per cent year on
year, the annual growth rate in the data flattened further, in line with our
expectations, given the sharp rebound and subsequent stabilisation in output
since November 2009, as the security situation in the Niger Delta region
broadly improved. Additionally, the average crude oil production (2.139m bpd)
has edged up 8.5 per cent year on year said,” Mr. Gadio said.

“Overall, the turnaround in output since late 2009 as well as
the rally in the Bonny Light oil price in 2011 should theoretically translate
into a significantly positive trade balance and robust current account
surplus,” he added.

Foreign reserves
accretion

Experts believe that the surge in the oil price (and a somewhat
stable output) is translating into an increase in foreign exchange reserves,
which reached $35.9 billion on 10 March 11, up from $3.6 billion.

“Although it is difficult to estimate the breakdown in the
accumulation of foreign exchange reserves between Central Bank’s monetised
proceeds and the Excess Crude Account (ECA), it is worth stressing that the
finance minister, Olusegun Aganga, indicated in February that oil-related
savings had resumed this year.

“In this case, we should see a rapid rebound in the ECA balance,
given the substantial differential between the current oil price and the
proposed oil price benchmark in the draft of the 2011 budget ($65 per barrel),”
Mr. Gadio further said.

World economic growth remains robust and continuing improvements
have led to improved growth expectations for 2011, which have been adjusted 0.1
per cent higher to 4.0 per cent, according to the OPEC report, though inflation
is beginning to pose a challenge for policy makers in both the OECD and the
developing countries.

Afrinvest, a finance research and analysis firm, said the
government has offered to increase its crude oil production, on OPEC’s request,
to cool soaring oil prices.

“Oil prices last week rose to their highest point in more than
two years, as the social unrest in Libya reduced global supply by as much as
1.0 million barrels per day. Nigeria’s Bonny Light is similar to the type of
oil produced by Libya and would be a good replacement for refiners, who are
currently lacking adequate supplies because of the North African crisis.

“Nigeria has a combined crude oil and condensate output of
around 2.4m bpd, with a production capacity of around 3.0m bpd,” the firm said.

The Nigeria Export Import (NEXIM) Bank plans to spend about $40
million (N6 billion) within the next two years to support potential buyers of
Nigerian products in order to boost the country’s export market.

Managing director and chief executive, Roberts Orya, told
reporters in Abuja on Wednesday that the aim is to make Nigerian products more
competitive within the sub region.

“As part of our mandate to facilitate and promote Nigeria’s
trade, NEXIM has engaged consultants in the region to develop a sea-link
project, which is expected to culminate in the establishment of a company to be
owned by investors from all ECOWAS sub-region, to facilitate sea transportation
of goods across the region,” Mr. Orya said.

Potentials and opportunities

According to him, the bank has set an ambitious target on how to
deepen cross border trade and payment system within the Economic Community of
West African States (ECOWAS) sub-region and Africa, to make it the traditional
market for exporters, as is the practice in most EXIM (Export Import) banks
around the world.

“What we have in the ECOWAS or the Central African region is a
non-traditional market, which nobody wants to go and do business, while we
allow other countries’ EXIM banks to take advantage of the huge potentials and
opportunities.

“If trade in the sub-region is deepened, it will help create
jobs and halt capital flight within the region, while every benefit that go
with deepening of trade would come to the region,” he said.

In order to discontinue the current scenario of huge non
performing loans among its clients, he said the institution has resolved to
follow stringent conditions in approving fresh facilities to prospective
beneficiaries.

Out of a total portfolio of over N10 billion recorded in its
books as non-performing loans to various groups since 2009, the bank has been
able to recover less than N1billion.

Tackling non performing
loans

“Loan recovery is usually a challenge in Nigeria. As at August
2009, the total amount of non-performing loans that had 100 per cent provision,
based on the grading of the prudential guidelines, was only N10.03 bilion.
NEXIM was able to recover about N540 million that year; less than N300 million
was recovered between January and December last year,” Mr. Orya said.

A special remedial management department, he said, has been
established charged with the responsibility of following up on customers on a
daily basis to help reduce the high level of non-performing loans, while
stricter conditions are to be adopted in approving future loans facilities.

“We have decided to carry on this transformation, knowing that
going forward, any credit to be created must be of good quality. Apart from the
one per cent general provision that the prudential guidelines require the bank
to make, we do not want to create any bad loans. We have taken time to
establish the pillars necessary to ensure that the bank does not go the same
way in the next two to three years, in terms of bad loans.

“We have learnt from our mistakes. We must ensure that any money
that is given is judiciously used. Any exporter that is not prepared to comply
with our conditions would not be attended to, as there are no political loans
in NEXIM. Any project that the bank must support must be bankable and viable.
Such projects must not only be able to pay back itself, but must also be seen
by all that the capacity is there to do so,” he declared.

He said the bank would henceforth be more concerned with its
ability to generate more foreign exchange for the country as well as facilitate
jobs creation, pointing out that only businesses with healthy balance sheets as
well as those with proven capacity to make sufficient returns to their
shareholders and those in a position to approach the international capital
market to raise money and have good relationships with other EXIM banks around
the world enjoy its patronage.

According to him, Nigeria, with a population of over 150
million, is well-placed to control the political and economic advantages within
the ECOWAS sub-region, pointing out that NEXIM, as Nigeria’s trade policy bank,
is poised to take up the challenge.

The planned
commercialisation of the Nigerian National Petroleum Commission, NNPC,
is expected to increase the efficiency and effectiveness of the
corporation.

Some finance
experts believe that the move would aid the corporation, which is
presently a public organisation that manages government’s interests in
the Nigerian oil industry, while also generating funds for the
government.

“The
commercialisation of the NNPC should translate to a reduction in
regulatory controls on the NNPC – thereby opening it up to engage
freely in petroleum business activities,” Fola Onasanya, a petroleum
industry analyst at Ciuci Consulting, a management consulting firm,
said.

According to him,
this move should increase the efficiency and effectiveness of NNPC
operations – which would in turn improve the overall quality of service
it offers to all relevant parties (the federal government,
multinationals, and Nigerians).

“It is also
expected that this would promote the development expansion of the
nation’s oil and gas assets. This is especially in the building of
Greenfield refineries, pipelines, and other downstream infrastructure.

“It would also help
in increasing the value of the NNPC by making it not only
self-financing, but also a revenue generating corporation. According to
the PIB, a commercialised NNPC will pay the government royalties and
taxes like other oil companies,” Mr. Onasanya said.

The Petroleum Industry Bill is a merger of 16 different laws with very stringent guidelines for environmental remediation.

Fear of rise in commodity prices

Mr. Onasanya,
however, added that “Worker’s Unions (such as PENGASSAN) fear that the
move may lead to a significant downsizing of the corporation,
increasing unemployment.”

He further said
that there is also a concern that with the commercialisation (and
deregulation), prices of petroleum products (e.g. PMS, diesel and
kerosene) would rise – as they will be entirely determined by market
forces.

Which PIB is being passed?

Recently, workers
in the oil and gas industry, through the organised labour union,
PENGASSAN, called on the Federal Government, especially the National
Assembly, to engage relevant parties again before the passage of the
bill, to forestall industrial crisis in the sector.

Babatunde Ogun, the
spokesperson of the union, said the workers had made several
correspondences to the government and the National Assembly on the need
for further engagement on the PIB before its passage, but that the
legislative arm had bluntly refused to honour any of the letters.

He also raised
concerns that the union would like to know the version of the PIB that
is being passed, as there is every tendency that the original bill may
have been substituted.

“We have written
many letters on the need for the National Assembly to be transparent
and follow due process in the passage of the bill. Conducting just a
public hearing is not enough, more so when there have been so many
insinuations, including the Wikileak’s online reports, that the
National Assembly had substituted the original bill that had inputs of
all stakeholders,” Mr. Ogun said, adding that it is only proper for all
relevant parties in the nation’s oil and gas industry to have a final
look at the PIB.

Diezani
Alison-Madueke, the minister of petroleum resources, stated that the
expected passage of the all important oil industry reform legislation
will change the face of the petroleum industry in Nigeria.

Mrs.
Alison-Madueke, while confirming that the PIB will usher in a new vista
in the oil industry in the country, said she would not be able to
freely talk on the impact of the commercialisation of the NNPC since
the bill was already at the domain of the National Assembly.

She said it was
expected to be run as a normal company, in terms of royalties,
dividends, and taxes, adding that other benefits that would be derived
from the passage of the bill includes the availability of over 300, 000
jobs in the industry, the implementation of corporate social
responsibility, the discontinuing of gas flaring, among others.

The Nigerian Stock
Exchange (NSE) yesterday officially commissioned a Contact Centre to
improve its interface with capital market investors, as the world
celebrates Consumers’ Rights Day.

Located on the 13th
floor of the NSE’s building, the Contact Centre is a facility that
allows interface of information between the Exchange and investors, as
well as other market operators.

Emmanuel Ikazoboh,
interim administrator of the NSE, said, “Despite the dwindling income
of the Exchange, we have gone this far to improve on the communication
between us and our investors because we know the importance of
information to the growth and development of the market.

“The market, we
know, is information driven; hence, nothing would be spared in our
desire to further bridge information gap between us and the investors
on our Exchange,” Mr. Ikazoboh said.

He said investors
are expected to phone in to make enquires on important issues about the
market as they affect them from 7:45 am to 6:00 pm Monday to Friday on
07002255673. Callers are free to use any of the three major Nigerian
languages of Hausa, Igbo, and Yoruba to make enquires or launch
complaints.

“Within 24 to 48
hours, you (customers) will be aware that efforts are been made to
respond to their enquiries. We may not have the answer at hand, but at
least you will know that action is been taken,” he added.

When our reporter
put a call to the number yesterday, the call went through, even though
it terminated before much information could be exchanged.

Mr. Ikazoboh said
there are other things that the Exchange is trying to put in place to
win back investors’ confidence. However, he said, “We thought by today
(Tuesday) we are going to have price kickers around the building.
Unfortunately, most of the items are stock in the port. But we’ve been
given a concrete assurance that by the 25th March, it will be
everywhere in the building.

“We are also going
to change the kicker in our trading room to be able to give real-time
online performances of each of the companies that are listed in our
Exchange,” he further said.

No account yet

Asked how much it
cost the NSE to set up the Contact Centre, Mr. Ikazoboh said, “I will
ask the account department because I don’t have the figures with me
now. Once the account department is able to collate everything, I’ll
pass that to the public.”

He, however, assured that his administration was “very prudent” in managing the cost.

At the event,
Arunma Oteh, director general, Securities and Exchange Commission
(SEC), said, “We are delighted at this initiative. The SEC believes
that there will be no capital market without the investors. It is
therefore, important that we continue to enhance investors’
confidence.”

Ms. Oteh said the
commissioning of the Contact Centre is also significant because “it is
happening on a day that all over the world consumers’ rights are being
celebrated and consumers are being appreciated. We at SEC believe that
if we are able to protect investors, our market will flourish and truly
be transformed for our country.”

Bisi Onipede, one
of the supervisors at the Contact Centre, said several calls have been
made by investors to the Contact Centre since operation began recently.

Ms. Onipede said,
“We’ve had people calling to know whether some stockbroking firms have
been suspended, reinstated, or not. We’ve had people calling to know
about the status of their shares; dividends; branch location of the
NSE; how they can log on to our website; how they can be stockbrokers;
etc.”

She said calls have
been received from Nigerian investors in Hausa, Igbo, and Yoruba
languages, adding that people have also been calling from French
speaking countries, South Africa, Europe, and America.

Olu Odejimi, the
spokesperson for stockbrokers, who is also the chief executive officer
of Clearview Investment Limited, a stockbroking firm, said the Contact
Centre is an initiative which will “promote the business of
stockbrokers,” adding that it will help the investing public not to
rely only on stockbrokers to get good information about the market.

Mr. Odejimi, who is
the oldest stockbroker at the NSE with 38 years experience, said
although stockbrokers are currently facing hard times, the initial
suspicion that Ms. Oteh might be operating an undisclosed agenda has
been corrected.

“There is order now in the market,” he said, adding that “change is
the only thing that is permanent,” while charging Ms. Oteh to “go on
and change everything as long as it is for our good.”

The National Agency
for Food Drug Administration and Control (NAFDAC), on Monday, sealed 15
drug stores in Calabar for selling counterfeit, expired, and banned
drugs.

The closure was effected in a surprise raid by a team led by Abisola Adekoya, the agency’s deputy director of Ports Inspection.

Mrs. Adekoya said
she raised six groups to carry out checks against non compliance with
NAFDAC requirements in patent medicine stores and pharmacies in the
city.

She said NAFDAC had
invested some millions of naira to buy anti-counterfeiting devices like
the Truscan machine, to detect fake drugs.

“With the aid of
this newest technology, we were able to detect fake drugs, including
those that were banned and this has led to the sealing of the 15 shops
in Calabar,” Mrs. Adekoya said.

AngloGold Ashanti,
the world’s third largest gold producer, said on Tuesday heavy rains in
Australia have affected output at its Sunrise Dam mine.

The company said in
a statement that while open pit mining has resumed, underground
operations remained suspended for safety reasons.

AngloGold said it
expects that Sunrise Dam, located 56 kilometres (35 miles) south of
Laverton in Western Australia, would achieve normal mining rates in the
June quarter.

“AngloGold Ashanti
is, therefore, expecting that first quarter guidance of 1.04 million
ounces will be negatively impacted by approximately 20,000 ounces with
a consequential impact on unit total cash costs,” the company said.

Africa’s top gold
miner, which has operations across four continents, also said the
group’s full year production guidance of 4.55-4.75 million ounces
remained unchanged.

A former employee
of the Intercontinental Bank Plc was on Monday arraigned before an
Igbosere Magistrates Court in Lagos over alleged forgery and theft of
N554, 200.

Twenty-six-year-old
Ajayi Oluwasegun is accused of forging the signature of a bank customer
and withdrawing the sum from his account. Mr. Oluwasegun, who is
standing trial before Magistrate A. A. Famobiwo, pleaded not guilty to
the two-count charge.

The prosecutor,
Haruna Ibrahim, a sergeant, submitted that the accused forged the
signature of one Mr. Kelvin Nwaosisi and withdrew N554,200 from his
account. He said that the alleged theft and forgery occurred between
August 2010 and February 2011 at the Agege branch of the
Intercontinental Bank.

An Abuja High Court
on Monday granted the ICPC “one last leave” to arraign a former
treasurer of Kwali Area Council, Dauda Musa, over his alleged
complicity in a N140 million fraud.

Mr. Musa is
supposed to have been arraigned with the former chairman of the
council, Musa Saleh, since 2009 over their roles in the alleged fraud.

The ICPC had
arraigned Mr. Saleh over allegations that he allegedly perpetrated the
fraud through fictitious contracts, dubious training programmes, abuse
of office, and diversion of public funds into personal use.

Justice Hussein
Baba, in granting the leave, warned that if by March 23 the commission
did not arraign the accused, he would strike out the case.

The judge took this
decision after counsel to ICPC, Edward Okagogo, told the court that the
commission had been unable to track down the accused since the last
five adjourned dates.

“If by March 23 you
are unable to arraign the accused, I will strike out the case from my
list. Whenever you are ready you can come back,” the judge said.

South Africa is
talking to the Democratic Republic of Congo to revive a stalled $8-$10
billion 5,000 megawatt hydro power project on the Congo River, South
African energy minister, Dipuo Peters, said on Tuesday.

Last year, the DRC
rejected a proposal by the Western Power Corridor (Westcor), a joint
venture between five southern African governments and power utilities,
that would have led to exports of up to 3,000 MW to South Africa and
another 1,000 MW to neighbouring countries by 2015.

“We are engaging
with the government and department of energy in the DRC so as to make
it possible that the initiative that we put on hold can be able to be
resuscitated,” Mr. Peters told an African energy conference.

Sub-Saharan Africa
needs an extra 7,000 MW of capacity a year to meet the demand of its
800 million people, who currently have access to the same amount of
power as Spain, which has a population of 45 million.