Nigeria Content Online

Nigerians’ embrace
of a single debit card to carry out transactions both locally and
outside the country would go a long way in transforming Nigeria into a
cashless economy. This is in line with the quest by the Central Bank of
Nigeria to reduce the quantity of cash in circulation by 2020.

At the conference,
held yesterday in Lagos, officials of Mastercard, the franchisor, said
the new card, which would be available through the banks from next week,
will provide Nigerians news levels of global debit card acceptance
while greatly reducing their need to rely on cash for everyday
purchases.

“We are aligning
with the Central Bank’s desire to reduce cash carried by individuals in
2020. The MasterCard /Interswitch alliance comes at a time when the
Central Bank of Nigeria is laying significant emphasis on its Financial
System Strategy 2020 (FSS 2020),” Charles Ifedi, director, payment
solutions and business expansion, Interswitch, said at the launch.

According to him,
the FSS 2020 seeks to advance the efficiency of the country’s e-payment
systems by reducing the reliance on cash and promoting interoperability
among financial institutions, an objective which would be realised by
the use of the new card.

Banking in recent
times has been undergoing radical transformation. Some obvious changes
like new products and service channels emerge daily. This transformation
is taking place across all aspects of the banking industry.

“Information
technology (IT) is one of the major issues banks have to deal with, as
it is more evident that only the banks that have and use their technical
resources effectively will be able to have a real competitive advantage
in this fast changing industry. IT in banks is used mainly for
improving business processes and reducing turnaround time,” Charles
Idem, a research analyst at Ciuci Consulting, a management consulting
firm, said.

According to him, Nigerian banks have to pay close attention to customer service processes and consid­er ways to improve them.

“They need to move
quickly with the new trends in technol­ogy that eliminate some of the
routine tasks. This will provide employees more time to deal with
customers. To avoid mediocre implementation of IT initiatives, solutions
need to be integrated or aligned with the bank’s overall strategy,” he
said, adding that Daniel Monehin, area head, East and West Africa and
Indian Ocean Islands, MasterCard Worldwide, said cardholders will have
the ability to use a single card for domestic and international
transacting.

“The MasterCard
Verve cobranded debit card is fully Nigerian and fully international.
The new debit card will also give cardholders peace of mind as it will
provide them with a secure and efficient way of using their debit card
for daily purchases and accessing their cash at over 12,000 point of
sale locations, 400 online merchants, and at 10000 ATMs throughout
Nigeria,” he added.

The move by the
Central Bank of Nigeria (CBN) to introduce derivative foreign exchange
products will eventually allow for a more stable national currency.

According to the
Financial Market Dealers Association (FMDA), the body of financial
instruments brokers, the commencement will be beneficial to the end
users of foreign exchange.

Akinsowon Dawodu,
president of the FMDA, said the framework, as released by the Central
Bank, would also help to check speculation on the products.

“The problem is
people may be carried away to speculate using the product. What the CBN
has done by tying the trade to underlying transactions is to reduce
speculation and reduce panic demand. It will keep demand within proper
tenor limits,” Mr. Dawodu said.

According to him, this will help in the long term to reduce fluctuations in the value of the naira.

On the introduction
of the product, he said, “The substance is what we wanted. It is good
for the market, for the end users, and the companies and for the
economy.”

He said though hedge
products do not guarantee stability, but used properly, can help to
reduce the volatility: “Futures, options, forwards, swaps; all these
products are originated as hedge products to mitigate risk.”

Given the current
state of the Nigerian financial market, Mr. Akinsowon said trading
forward instruments could begin anytime soon.

“Options will take awhile. But forward can start in a few weeks with the regular WDAS (Wholesale Dutch Auction System).”

The CBN on Monday
released guidelines for Foreign Exchange Derivatives and Modalities for
CBN foreign exchange forwards. The guidelines cover products, practices,
regulation, and supervision of the foreign exchange derivatives market.

“The objective of
the CBN is to make our financial markets global, organised, liquid and
diversified. The development of the financial markets will enhance the
transmission of the monetary policy and minimise the risk to financial
system stability,” the CBN said.

According to the CBN
governor, Lamido Sanusi, the move is to discourage currency
speculation, which has been blamed for the volatility in the value of
the naira.

“Part of what we are
trying to do in the Central Bank is introduce a forward market so that
people can hedge that risk and then don’t feel any urge to pre-liquidate
outstanding dollar exposure,” Mr. Lamido said.

As part of moves to
reduce volatility, the CBN, at the last monetary policy committee (MPC)
meeting introduced some measures to tighten liquidity in the system.

Analysts are, however, skeptical about how far this would help mitigate demand for foreign exchange.

According to Razia
Khan, Regional Head of Research, Africa Global Research at Standard
Chartered, London, “we question whether this will be sufficient to quell
FX market nervousness.”

“In view of the wider risks, more ‘complementary measures’ may be needed to calm FX-market sentiment,” she added.

The Executive
Secretary, Nigerian Investment Promotion Commission (NIPC), Mustapha
Bello, on Monday in Abuja decried the commission’s poor state of
funding and said it needs N2 billion annually to function effectively.

Mr Bello revealed
that the commission was not funded in 2010,and this has has not allowed
it to attract investment through awareness. He said that the agency
have had to rely on the support of the private sector to fund most of
its programmes and activities.

He said, ‘‘We have tasked the private sector so much since I came in here, but it appears they are getting tired of helping’’.

Jasper Uche, the
Transition Committee Chairman of Umunneochi Local Government Area in
Abia state, said that the council will soon open a cashew processing
industry in the area.

He revealed this on
Sunday in Umunneochi, that the industry will be sited in Mbala
community.Mr Uche explained that the industry will utilise the abundant
but neglected cashew nuts at Mbala, as the area has the largest cashew
farm in Abia state.

He said the abundant cashew nuts have continued to waste away
because of the non-availablity of industries to process and preserve
it. The chairman said ‘‘we want to take the bull by the horn to check
the wastages of the resources of the people.’’

South Africa’s
trade account recorded a 10.3 billion rand surplus in December compared
with an 8.4 billion rand surplus in November, the South African Revenue
Service (SARS) said on Monday.

Exports increased
by 10.4 per cent month-on-month in December while imports fell by 15.9
per cent. SARS said the December surplus was “buoyed by higher
commodity exports, specifically iron ore, precious metals, and base
metals.”

Ten economists surveyed by Reuters expected the trade account to register a 2.75 billion rand surplus in December.

Dutch brewer,
Heineken NV, said on Monday it had halted production in Egypt as
tension rises in the country in the face of ongoing street protests
against the rule of President Hosni Mubarak.

A spokesman for the
company revealed that it is not immediately clear when production will
be resumed or what the financial impact will be from the production
halt. Heineken had earlier repatriated 29 Dutch nationals from Egypt.

“Regional volumes
and profitability will suffer from the situation, but the contribution
to the group is limited, also implying a limited impact on Heineken’s
bottom-line earnings,” SNS Securities said in a research note.

Uganda’s inflation
rate rose for a third consecutive month to 5.0 per cent in January from
3.1 per cent in December due to seasonal food shortages, the
government’s statistics agency said on Monday.

Food prices rose
3.6 per cent in the year to January 2011 compared with a decrease of
1.1 per cent recorded for the year to the end of December 2010, the
Uganda Bureau of Statistics (UBOS) said.

“During the month,
the food prices index increased by 3.4 per cent due to increases in
prices of matoke (green bananas), sweet potatoes, oranges, sweet
bananas, cabbage, green pepper, bbugga (leafy vegetable), onion, maize
flour…,” UBOS said.

“The increase in prices of these food items is primarily attributed to low supply to the market,” it added.

NIPCO Plc, the
marketing subsidiary of the Independent Petroleum Marketers Association
of Nigeria (IPMAN), will work with the Nigeria Liquefied Natural Gas
(NLNG) for the development of the local gas market. This laid to rest
the long standing disagreement over others using NIPCO’s Liquefied
Petroleum Gas (LPG) storage terminal for the storage and evacuation of
products.

Lawal Taofeek, the
corporate affairs manager, said last weekend that the company will soon
sign an agreement as one of the off-takers licenced to participate in
the NLNG programme to promote the supply and distribution of natural
gas in the country, having fulfilled all conditions set by the NLNG.

During the
familiarisation visit of the 4,500 metric tons per annum (MTPA)
capacity LPG storage terminal located in Apapa in Lagos, NLNG managing
director, Chima Ibeneche, told his NIPCO counterpart, Venkatapathy
Venkatraman, that the agreement would go a long way in enhancing the
Federal Government’s aspiration to encourage more Nigerians in using
gas for domestic purposes.

Abundant gas resources

“With the abundant
gas resources in this country, Nigeria is not supposed to be among the
committee of nations still using firewood for domestic cooking,
considering the attendant effect of such activity on deforestation as
well as negative impact on the environment. There is no plausible
excuse to support this arrangement,” Mr. Ibeneche said.

Though he explained
that NLNG’s original business model was not along the line of domestic
gas supply, as the company was charged LNG production for export, Mr.
Ibeneche said the company ventured into local supplies in 2007 in a bid
to promote gas as a cheaper alternative domestic fuel for Nigerian
homes.

He foresees an
improving local LPG supply market in the horizon with the involvement
of private entities like NIPCO, that have committed substantial
investments in developing the requisite infrastructure for the
industry, adding that the approval of the company as one of its of
off-takers would enhance the growth of the market.

Mr. Venkatraman
said the company went into the country’s domestic gas supply market in
response to the Federal Government invitation for genuine investors’
involvement in providing necessary infrastructure to facilitate the
development of the domestic gas market.

Apart for the
investment in the fully automated 4,500 MT capacity LPG terminal,
considered to be the second biggest in the country, Mr. Venkatraman
said NIPCO has also invested in transportation with the procurement of
over 20 bulk tankers to facilitate evacuation of gas to consumers
across the country.

He disclosed that
as part of its effort to make gas easily accessible to consumers, the
company is currently deploying LPG skids for the cooking needs of
Nigerian homes, and promoting LPG use as auto fuel. LPG Skid is the
latest technology in mini filling stations for dispensing gas to
households and vehicles.

Similarly, the
company, in conjunction with the Nigerian Gas Company (NGC), has opened
three Compressed Natural Gas (CNG) filling stations as well as a
fitment workshop in Benin, Edo State, as part of its vision to
revolutionalise CNG use as a vehicular fuel in the country.

The Nigerian
Content Development and Monitoring Board (NCDMB) yesterday said
European Union’s support to the implementation of the Nigerian Content
Act will encourage investors from their countries to set up oil and gas
facilities in Nigeria.

Ernest Nwapa, the
NCDMB executive secretary, said this at a forum organised by the
European Union (EU) in Abuja. He noted the long-standing economic
partnership between Nigeria and EU countries, urging that the same
spirit of collaboration be extended to Nigerian Content implementation.

“The Act was not
conceived to drive away foreigners from the Nigeria oil and gas
industry, rather to facilitate participation of Nigerians as well as
increase the quantum of industry expenditure retained in-country,” Mr.
Nwapa said.

“One of
government’s strategies for pursuing its job creation agenda is to
bring Nigerian jobs back home by progressively reducing the volume of
Nigerian goods and services being procured from abroad,” he further
said.

By encouraging the
establishment of shipping yards and facilities in Nigeria, Mr. Nwapa
said the implementation of the Act will create employment for
Nigerians, link the industry with the wider Nigerian economy, increase
the nation’s Gross Domestic Product (GDP), as well as provide continued
access to the oil fields, especially when indigenes of the oil
producing areas are integrated into industry mainstream.

‘It is working’

He claimed that the
guidelines have resulted in the development of in-country capacity for
the oil industry and local service industry patronage from a dismal
five per cent in 2004 to 35 last year.

The NCDMB scribe
expressed regrets that the limited capacity of the local service
industry has resulted in over 65 per cent of industry work scope still
being done abroad.

He told the meeting
attended by ambassadors of three EU member states and diplomats of six
others that the Board is currently working towards reversing this
negative trend by collaborating with operators to set up heavy
industries, pipe mills and equipment manufacturing facilities, in
addition to the development of dockyards, to increase the utilisation
of existing shipyards for marine vessels maintainance.

“The Board intends
to leverage on the Nigerian Content Development Fund to support genuine
investors interested in developing capabilities, acquiring equipment,
installing facilities and infrastructure required to bridge critical
capacity gaps in the industry, so as to ensure the domiciliation of
work and spend,” Mr. Nwapa declared.

He said the Board
is monitoring compliance level of international oil companies (IOCs)
and multinational service companies with the provisions of the Act, and
also deploying monitors to ensure compliance.

The secretary,
Petroleum Technology Association of Nigeria (PETAN), Emeka Ene, noted
that the growth of his members’ businesses was tied to the effective
implementation of the Act, though he expressed regrets that exclusivity
was accorded to Nigerian service companies for jobs in land and swamp
fields, noting that most of the firms are constrained by lack of
capacity which can be bridged by partnerships.

After
the one month extension given by the Central Bank for customers to
update their account, queues were still seen at banks yesterday as
people tried to meet the deadline.

Bank
customers hurried to get their accounts updated yesterday at some of
the banks visited. In December, the Central Bank directed banks to
carry out updates on customers profile in furtherance of its
‘Know-your-customer’ requirement. It added that customers who fail to
comply will no longer have access to their bank accounts.

Customers
at First Bank on Olowu Street, Ikeja were on queues at the banking hall
trying to get their accounts updated. Due to the slow movement of the
queues arising from the cumbersomeness of making photocopies of some of
the documents required, some customers could not hide their
frustration. They lamented that the bank’s protocol was too much as
other banks did not require some of the items they requested for.“They
are asking for many things,like utility bill, passport photographs and
other things. I have been to other banks and their protocol is not like
this, maybe that is why this queue is not moving” Kemi Adeyemi, a bank
customer said.

Danjuma,
one of the security officials said the queue has been increasing since
last week. “Today being the last day, the queue is worse” he said.

More hassles

Guaranty
Trust Bank at Opebi, Ikeja was not better as long queues can be seen ,
even distracting other banking activities. Customers who had other bank
transactions to do frowned at the lackadaisical attitude of the people
on the queues. Bank officials had to bring the forms to customers
outside the banking hall to fill in a bid to decongest.

This
was made worse by the breakdown of the bank’s internet server, which
resulted in the banking hall being jammed by customers that wanted to
update the data and those for withdrawal, deposits and other banking
transactions, as even the ATM services broke down. At the bank’s Broad
street branch, an official, Adeyosola Johnson appealed to customers to
exercise patience while the bank works on its systems. “Please, our
server is down. Bear with us while we work to get our systems to
function again in the next 30 minutes,” she pleaded.

Also,
at Intercontinental Bank, Broad Street, the queues were long as
customers made effort to comply. An official who declined to be
identified, said updates cannot be done by proxy as only the account
holders’ signature will suffice.However, at some bank branches, it was
business as usual,Zenith Bank branch at Olowu, Ikeja had its operations
running smoothly without the hustling of people who wanted to update
their accounts.“There is no queue. If you want to update your account,
all you need is your valid Identity card and then you fill the form”
the customer care service official said.

The Central Bank said the customer data update is to enhance the
know-your-customer (KYC) requirement and also to check money laundering
and illicit funds in the system. It also said the deadline will not be
extended.