Nigeria Content Online

The debate on Nigeria’s debt debacle
appears an endless cycle. Available statistics on the spiralling
figures do not add up with reasons adduced in government circles. While
government claims the various loans, both domestic and foreign, were to
facilitate the provision of basic socio-economic infrastructure that
would make for qualitative living standard for the people, Nigerians do
not seem to feel the impact, except in the huge repayment baggage they
have to bear.

Poor in riches

As the world’s
sixth highest exporter of oil and gas, it is natural to expect that
Nigeria should have no business with poverty. Between 1999 and 2009,
Nigeria earned about $200.34billion (about N30.051trillion) from
exportation of about 4.56 billion barrels of crude oil.

The recent United
Nations Development Programme’s (UNDP) Human Development Report (HDR)
for 2010 ranks the country among the poorest among the developing
economies, along with Chad, Vietnam and Yemen, with less than $1,500
per capita income, based on the 2007 World Bank country income
classification.

Though the
country’s life expectancy ratio for last year nudged a marginal
improvement from 46.9 years to 48, the human development index (HDI)
leaves Nigeria stranded in the 158th position out of 182 countries
included in the quality of life ranking. This leaves her behind such
less natural resource-endowed countries like Swaziland, Angola,
Madagascar, Kenya, Ghana, Cameroon, Djibouti, Lesotho and Uganda.

Depleted Excess crude revenue

Accumulated revenue
in the Excess Crude Account (ECA) as at 2008, with an average crude oil
benchmark price of $108 per barrel, was N1,728.48 billion, according to
the Office of the Accountant General of the Federation’s (OAGF)
records. This excluded the sum of over N706.03billion earned from
payments for petroleum profit tax (PPT) and N247.56billion for
royalties by multinational joint venture oil companies. As at December
2009, the account had been depleted to less than N72.74billion.

As at December last
year, Minister of State for Finance, Yawaba Lawan-Wabi, said the
balance in the ECA is about $3million, after the Federation Accounts
Allocation Committee (FAAC) held a secret emergency meeting in the
twilight of last month to disburse $1billion (about N150billion) to the
three tiers of government.

But, it appears the
more government earned money over the years, the more it is sinking
deeper into the cesspit of debt, though without much to show for it, in
terms of a corresponding impact in the quality of life of the people.

(Please see the fact boxes) DMO justifies

The Debt Management
Office (DMO) allays the fears of Nigerians about the continued clime of
the country’s debt profile, claiming the size of the domestic debt
stock reflects largely the cumulative effect of financing of the
country’s deficit budgets over the year, apart from investments in
public sector capital expenditure needs.

“The increases are
accounted for by different sets of factors, reflecting a shift towards
market-based funding of government deficits, borrowing for
developmental purposes and on-lending to institutions such as Nigerian
Agricultural and Rural Development Bank (NARDB), Bank of Industry (BOI)
and the Federal Mortgage Bank of Nigeria (FMBN),” the DMO explained in
its National Debt Management Framework (2008-2012) publication.

Director General,
DMO, Abraham Nwankwo, said last Tuesday in Abuja that the country’s
domestic debt profile is growing as a result of a deliberate policy by
government to focus more attention on raising funding for its
activities and services from domestic sources, rather than relying on
external sources.

“It was deliberate
for government to depend more on domestic sources, rather than
external, so that we develop other aspects of our economy, including
the bond market, the habit of long time savings and investment as well
as developing the skills by our local entrepreneurs. Nigeria now has
the capability to manage various bond markets,” he said.

Where are all the billions?

A senior lecturer,
Department of Economics, University of Calabar, Desmond Ukut, said “in
as much as it is a common practice for most developing countries to
take advantage of some of the concessionary facilities from such
international lending organisations as the Word Bank, African
Development Bank (ADB), International Monetary fund (IMF) and other
such organisations for developmental purposes, Nigeria appears to be an
exception.”

Mr Ukut said
successive governments, both military and civilian, have run the
country into debt under the pretext of utilising such loans to provide
basic amenities that would cater for the good life of the people only
for them to divert same into private pockets.

“The country is
replete with abandoned projects for which past governments collected
loans to execute, only for successor administrations to abandon them on
grounds that the money had been diverted by their predecessors,” he
noted.

</

The current
scenario playing out in the telecomm sector is a welcome development
for consumers. This is because the companies have for a long time
exploited consumers, who have been forced to part with their hard
earned money without getting the commensurate service delivery.

The recent slash in internet tariff and call rates are evidence of the intense competition among the telecomm companies.

To verify the claim
of poor service delivery, all you need do is to attempt to call the
customer care line of any network. You will meet frustration without
your enquiries being attended to. This has been the agony and painful
experience that consumers have had to cope with all these years. But I
believe with the stiff competition going on, telecom companies should
have a rethink and reposition their services for maximum impact.

I remember vividly
the statement credited to a former CEO of MTN who said per seconds
billing was not possible in Nigeria. He went further to say that as at
then, it would take five years for per seconds billing to happen in
Nigeria. It was immediately after this that Globacom crashed the call
rates and introduced per seconds billing in the country.

Through this,
consumers heaved a huge sigh of relief as this marked a dramatic change
in the telecomm industry. Globacom challenged the status quo to become
a formidable threat to competition then and it clearly won the heart of
Nigerians.

Competition is one
that is very critical to the survival of any industry. It needs to be
emphasised that never again will consumers be exploited for no just
cause. I have seen cases where consumers have dumped the sim cards of a
network for another.

The major issue
that informed this write-up is the 35 per cent and 40 per cent
reduction in the cost of internet connection. The telecomm companies
also reduced the tariff on Blackberry. The tariff reduction also
applies to the cost of voice call services.

The competition between the telecomm companies has been more pronounced as they outwit one another to win consumer loyalty.

One glaring fact
that should not be overlooked is that consumers now have a better
choice to abandon any network that does not serve their interest
better. The situation can no longer continue like this as the telecomm
companies should brace up for the challenges ahead.

Like I mentioned
last week, I foresee a consumer revolution sooner than expected. This
is due to the fact that despite the population of Nigeria and the size
of the market, there is no price advantage. Some other smaller African
countries pay less for telecomm tariffs.

Further tariff reduction is needed

I believe that just
like the recent crash in internet tariff and call voice rates, one of
the telecomm companies should take a bold step and embark on further
reduction in tariffs. This will send others napping while its gains the
upper hand in the market. This was the strategy adopted by Globacom on
the per seconds billing.

Without intense
competition, brands will not have a rethink of their strategy in line
with market realities. It places so much burden on the telecomm brands
to either feel the pulse of consumers or face the dire consequences.
Competition keeps brands on their toes, as any brand that slow paces
with the needs and aspirations of consumers will suffer in the market
place.

What is most
painful is that telecomm companies focus more on the profit without the
value and service quality. Despite all the huge profits being declared,
the interests of consumers are not adequately taken care of.

This is also a
wake-up call to telecomm consumers to be ready to challenge the
exploitation they suffer. Consumers can also utilise the competition as
a springboard to showcase the distinctive features of a network over
the other.

Whenever telecomm
companies are not responsive, consumers have the right to protest and
fight for their rights. The present competition can only be meaningful
when there is a strong focus on value and service delivery.

Only two small
scale enterprises in Bauchi State have met the CBN guidelines for its
intervention loans to operators in the sector, an official has said.

The chairman of the
National Association of Small Scale Industries, Tijjani Jallaba, on
Thursday, named the two enterprises as Gambo Marafa and Baba Buba,
adding that Fatima Idris Enterprises was in the final stage to qualify
for the loan.

“If you see what is
encompassed in the scheme, you will realise that the CBN has introduced
a good programme that will help to transform small scale businesses
into profitable ventures,” Mr. Jallaba said.

The Ebonyi State
commissioner for agriculture and natural resources, Emmanuel Echiegu,
has urged donor agencies to focus attention on programmes that directly
address the needs of farmers.

Mr. Echiegu made the call in an interview with the News Agency of Nigeria in Abakaliki on Wednesday.

“Most of the funds approved by these agencies for agricultural
endeavours are channeled into administration, capacity building, and
training of agricultural personnel, instead of actualising the needs of
farmers,” he said.

More cocoa beans
are being smuggled from Ivory Coast to Ghana, farmers told Reuters on
Thursday, as exporters halt shipments from the world’s top grower and
global prices hit a one-year high.

Top exporters are
complying with presidential claimant Alassane Ouattara’s call for a ban
on exports, in a bid to starve incumbent Laurent Gbagbo of revenues.

Mr. Gbagbo has
refused to quit despite United Nations-certified results of a November
28 poll showing rival, Alassane Ouattara, won.

While the overall
amount of contraband cocoa crossing into Ivory Coast’s eastern
neighbour was hard to establish, farmers in border regions cited
evidence of increased activity.

Cameroon awarded a
diamond mining licence to South Korea’s C&K Mining, requiring the
company to begin development of its Mobilong concession within a year,
according to state television on Thursday.

The Mobilong
concession has probable reserves of 736 million carats of gem quality
and industrial diamonds that could make the Central African state a
leading world diamond exporter, according to drilling results.

C&K signed a
mining convention for the deposit with Cameroon in July 2010, setting
out duties and obligations of both parties and paving the way for a
licence. C&K Mining is a joint venture between Cameroon and South
Korea, which holds the majority share.

East Africa-focused
exploration firm, Centric Energy, said it had completed an agreement to
farm out to Tullow Oil Plc a 50 per cent interest in Centric’s Block
10BA in north-western Kenya.

The deal brings to
four the number of farm-in agreements that London-listed Tullow has
closed this week after acquiring 50 per cent states in another two
Kenyan blocks and an Ethiopian exploration area.

Tullow paid $961,000 in historic costs and will finance 80 per cent of future expenditures to a limit of $30 million.

Kenya has yet to discover any commercial oil deposits, but interest in its exploration blocks has grown.

Profit
taking activities by some investors have been attributed to the current
decline in market capitalisation of the Nigerian Stock Exchange (NSE).

The
Exchange market capitalisation of the 201 First-Tier equities closed
lower on Thursday at N8.811 trillion after opening the day at N8.875
trillion, reflecting 0.72 per cent decline or N64 billion losses. The
market had lost N9 billion after Wednesday’s trading session.

Bola
Oke, a finance analyst at WealthZone Company, an investment management
firm, said profit taking was expected following the recent upturn
recorded in the market. “Investors will always take the little profits
on their investments once there is a bullish trend,” Mrs. Oke
said.Meanwhile, GTI Capital, a stockbroking firm, said, “The ongoing
profit taking activities is a good move as it is bound to create
several entry opportunities. Traders are expected to hold cash for
timely positioning at the end of the pull back.” In the mean time, the
management of Wema Bank, at the presentation of its facts behind
figures to market operators yesterday, said it is confident that the
bank’s general performance this year will improve better than last year.

Wema Bank forecast

The
bank presented earnings forecast of N4.881 billion in gross earnings
and N285.762 million profit after tax (PAT) for the first quarter of
the year. It also forecast, for the second quarter, gross earnings of
N5.346 billion and PAT of N312.977 million; for third quarter, gross
earnings of N6.044 billion and PAT of N353.801 million, while last
quarter gross earnings is N6.973 billion and PAT of N408.232 million.

Wema
bank had in its audited third quarter accounts for the period ended
September 30, 2010 recorded a 4.74 per cent decline in turnover, from
N25.286 billion to N24.085 billion. The PAT inched up by 105.50 per
cent from a loss of N29.727 billion to a gain of N1.635 billion.

With
“long term investors seizing the opportunities to position in Wema Bank
stock at the market price” on Thursday, according to GTI Capital, the
bank led as the most traded stock with 38.551 million shares
transacted. It was followed by First Bank, FinBank, Unity Bank and
BankPHB.

David
Adonri, chief executive officer of Lambert Trust and Securities Company
Limited, said other quoted companies should ensure they present their
facts behind figures to the Exchange to enable investors and analysts
take informed decision on investment.

However, at the close of Thursday’s trading, African Petroleum
gained 4.98 per cent to lead on the gainers’ chart while C&I
Leasing followed on the chart with 4.83 per cent; Champion Breweries
gained 4.70 per cent. On the losers’ side, market forces slashed 4.95
per cent off the opening price of Costain; Presco followed with 4.80
per cent while UBA shed 4.12 per cent.

The Federal
Government is working towards issuing a harmonised minerals and mining
regulations law for the country before the end of the year, the
minister of mines and steel development, Musa Sada, has said.

Mr. Sada said
yesterday at a forum on the draft Minerals and Mining Regulations in
Abuja that this is part of the ongoing reform initiative by the
government to create a conducive environment necessary for the
development of the nation’s solid mineral resources.

The forum was to
provide the opportunity to review the draft document and make inputs
that would assist the ministry produce a final draft to be submitted to
the Ministry of Justice for vetting and its production for the
country’s mining industry.

Mr. Sada identified
a strong, consistent, and investor-friendly legal regulatory framework
based on international best practices as the anchor of the sector
reform, pointing out that this provided the guide to the decision by
the National Assembly to enact the Nigerian Minerals and Mining Act
2007, signed into law in March of the same year.

Noting that the
legal framework for the mining industry would be incomplete without the
Minerals and Mining Regulations to give full effect to the Act, the
minister said the regulations are required to spell out in precise
terms the modalities for its enforcement as well as the procedures
mining operators have to follow in procuring minerals titles, licences
and permits for mining purposes.

Past efforts to
regulate operations in the industry, the minister pointed out, led to
the production of several versions of the draft document, saying the
ministerial committee constituted by government last July to study and
harmonise the different versions was an attempt to ensure that they
conformed to the provisions of the Act.

The ministerial
committee last October submitted the draft copy of the regulations,
categorised in chapters based on the relevant official technical
departments, including general provisions, mining cadastre, mines
inspectorate, mines environment compliance as well as artisanal and
small scale mining.

The regulations,
which define the rules and processes for giving full effect to the
effective implementation of the Act, provide for the procedures and
processes for exploration and mining operations, including the
acquisition of titles as well measures to enhance the general
protection of the mining environment and safety of workers in mining
operations.

A fact finding team
of the Oslo, Norway-based Extractive Industries Transparency Initiative
(EITI) is currently visiting Nigeria to find out how the country is
progressing in becoming compliant with goals and objectives of the
initiative.

Arne Disch, head of
the EITI team, said on Wednesday Nigeria was one of three countries
selected for the study, among the 33-member-countries in the EITI, to
show how the EITI transparency process can be made to function better.
It is also meant to enable government become more accountable in the
exploitation and management of the natural resources in their domains.

Gabon and Mongolia
were also selected for the study whose report would be presented and
discussed at EITI Conference in Paris between February 28 and March 4.

“Nigeria was
selected for the survey because of her diversity, complex nature of its
extractive sector, and Nigeria’s standing in the EITI global community.
The report will reflect how the EITI process has played itself out in
Nigeria, achievements, challenges, shortcomings, expectations,
disappointments, and hopes.

“It is important to
note that the more attention oil and gas industry operators pay to
issues of accountability and transparency, the more the citizens would
see the benefits of the exploitation of the natural resources in their
lives,” Mr. Disch said.

He visited the
Secretary to the Government of the Federation (SGF), Yayale Ahmed;
group managing director, Nigerian National Petroleum Corporation
(NNPC), Austen Oniwon; and director, Federal Inland Revenue Service
(FIRS), Ifeko Omoigu-Okaru, to intimate them of his visit to Nigeria.

Mr. Ahmed
reaffirmed the commitment of the Federal Government to the continued
embrace of the EITI principles and objectives in the management of the
country’s extractive industries, saying that “the independence of NEITI
to enthrone transparency and accountability in the management of oil,
gas and solid minerals revenues cannot be compromised under any
circumstance.”

At the NNPC, Mr.
Oniwon said the corporation is ready to collaborate with NEITI on a new
study aimed at evaluating its performance across the globe, adding that
the NNPC has no alternative than to work with the transparency agency
since Nigeria voluntarily submitted itself to the principles espoused
by EITI.

Meanwhile, the
Nigeria Extractive Industries Transparency Initiative (NEITI) has
forwarded a request to EITI Board for review of Nigeria’s transparency
compliant status in the international group.

Zainab Ahmed, the
NEITI executive secretary, said in Abuja that the request is to
indicate that Nigeria is ready to subject its processes to the
assessment of the EITI validation tests ahead of the April deadline,
having fulfilled all the six remedial conditions set out last October
to enable the country attain full compliant status.