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Some
of the rescued banks are silent on how far they have gone with their
recapitalisation effort and the fate of their subsidiaries, especially
those outside the country.

Oceanic
Bank, one of the banks closed down its outlet in The Gambia last week,
citing inability to meet the capital requirements of 150 million dalasi
(about US$ 5.6 million) demanded by that country’s authorities. Thomas
Quayson, the bank’s spokesperson in the country, said that the bank
headquarters in Nigeria could no longer subsidise its foreign branches,
and as a result are returning deposited money to customers.

At
the bank headquarters in Nigeria, staff refused to talk about the
issue. “All we can say now is that we have opted to go from
international banking to national” a source said. “Details of what will
happen to our subsidiaries cannot be given now until the whole process
is over, right now, it is still a work in progress” he added.

Following
the sale of some non-performing loan portfolio to the Asset Management
Corporation of Nigeria (AMCON) and receipt of bonds worth over N200
billion in exchange, John Aboh, the bank chief executive, said it is
now operating with an enhanced liquidity ratio that is above the 25 per
cent level required by the Central Bank of Nigeria (CBN).

Like
Oceanic Bank, officials at Intercontinental Bank too were reluctant to
talk about the progress of their subsidiaries. “When we conclude our
own recapitalisation locally, we would now issue a press statement
stating emphatically on what was bought or acquired and by whom. Until
that is done, we really don’t want to talk on this” a source who did
not want to be quoted officially said.

Intercontinental
Bank’s chief, Mahmoud Lai Alabi has however said that regardless of the
outcome of the on-going recapitalization process, the bank will remain
an international bank. The bank has branches in the United Kingdom and
Ghana presently.

Tunde
Olofintila, Wema Bank’s spokesperson said the bank has no worries as it
has no subsidiary issues to address so it is focussing on restructuring
for regional banking.

Unity
Bank also disclosed on its website that its banking operations are
limited to five zones of Lagos and South West, North West, Central,
North East, South.

Despite
receiving over N200 billion in consideration bonds from AMCON last
year, Nigeria’s sixth largest lender by total assets, Oceanic Bank, is
not out of the woods just yet.

Adesoji
Solanke, banking analyst, Renaissance Group, an investment bank, says,
“While we understand that Oceanic Bank is still carrying out its
valuations and holding discussions, we believe significant progress is
being made. This is on the back of the bank’s decision to dispose of
its Gambia operations which we believe is a decision that would have to
be taken in cognizance of the strategic direction of the acquirer”.

Over the last two years the National Assembly made attempts to
enact laws that would bring about needed changes in the oil and gas sector and
in the overall socio-economic environment. Somehow, both the Senate and the
House of Representatives slipped into deep sleep over the salient issues.

The first bill that comes to mind is the highly talked about
Petroleum Industries Bill (PIB). Oil and gas companies operating in Nigeria
have generally been happy to continue business as usual, riding on the tracks
set by various military dictators who held sway over the powers of state in the
past. The PIB, with all its imperfections, attempts to bring some level of
sanity into the sector and allows for some form of integration as well as
enabling the nation to derive more financial and socio-economic benefits from
the sector.

Expectedly, the oil companies have fought the bill. They have
openly said that they would not accept any law that is not favourable to them
and have often twisted statistics to suggest that Nigeria is attempting to
drive them into bankruptcy if the bill is passed into law without being watered
down.

Similarly, the government seems to be bending back and doing the
donkey work to ensure that the oil companies are happy. Having been in bed
together for so long, the necessary social distance needed for serious
negotiations between the government and the companies is difficult to create
and so they continue with their pillow talk away from public view.

While the oil companies kick and scream over who gets to pocket
how much money, the issues that really concern the local communities living in
the oil fields were largely overlooked by the PIB. For example, there are no
concerns about the impacts of the sector’s activities on the environment.
Neither did the first draft make any allowance for community consultations and
participation.

This writer fully appreciates the difficulties that governments
have when it comes to communities. I often recall a conversation I had with a
Mines and Energy minister of another country over serious agitations from
communities who feared that mining activities in their communities would
destroy their livelihood. They demanded a consultation with the government and
the government would not agree to hold one because, according to the minister,
the national constitution did not say anything about popular consultations and
as such the government could not say what it meant, how it should be held, and
who would pay for it.

Even when the community folks were ready to hold the
consultation at no cost to government and insisted that this was a right under
the International Labour Organisation’s covenant, the government would not
budge. The only promise our meeting left with was that the government would not
proceed with the mining projects until a suitable agreement was reached with
the affected people.

Consequently, violent conflicts deepened in the area and it does
seem that this is the sort of dialogue that some governments would prefer to
have. Conflicts in Nigeria have similar roots.

The PIB has the possibility of making environmental and
community concerns central in the sector. The environment has been trashed for
long enough and there is need for a cease-fire now. And if we like, we can
extend an amnesty to the oil companies too.

Sleepy chambers

The Gas Flares Prohibition Bill of 2008 is another critical bill
that has been sleeping in the chambers of the House of Representatives. The
Senate passed the bill and going by it, gas flaring would have been outlawed
again by the end of 2010. Gas flaring has been illegal in Nigeria since 1984
and a High Court sitting in Benin City affirmed in November 2005 that the
activity is indeed illegal and a flagrant abuse of human rights.

Shell informed the world about the origins of gas flaring in
Nigeria in a May 2010 document on their website. “When The Shell Development
Company of Nigeria Limited (SPDC) built many of its first production facilities
in the 1950s, there was little demand or market for gas in many parts of the
world, including Nigeria. So, Associated Gas (AG) was usually burned off safely
– a process called flaring. This remained accepted industry practice as SPDC
established a major oil operation across the Niger Delta.”

As you can see, this dastardly act goes back five decades! Gas
flaring may have been a practice accepted by Shell and their co-travelers in
the pursuit of ecocide, we can loudly say that the practice was never
celebrated by the suffering people of the oil region. Neither will communities
elsewhere in Nigeria accept it if oil is found in their territories.

The gas flare prohibition law for the first time proposes
sanctions that should deter the companies from engaging in the destructive
activity. Apart from prison terms proposed, offenders would pay fines
equivalent to market value of the flared gas. The bill also proposes that no
company should be given any lease for oil and gas exploitation without an
accepted gas utilisation plan.

Now the slumber of the House of Representatives over this matter
has allowed the 2010 deadline proposed by the bill to slip by. Added to dinner
party deadlines set and ignored by past governments, this one has been swept
under the carpet and no future deadline is even hoisted to keep hope alive.

Gas flaring is an abuse that cannot be tolerated for any reason.
We have allowed it for long enough. We do not need new deadlines. And the farce
of presenting projects with regard to existing gas flares for carbon credit
under the United Nations Framework Convention must be halted.

The slippery terrain of the oil sector has dulled the outgoing
NASS into sleep and given room for continued abuse and pillage. If
electioneering will allow governance to proceed, it is not too late in the day
for the legislators to rouse from slumber and do the right thing.

Nigeria’s Central
Bank expects a drop in foreign reserves to end due to higher oil
prices, tighter monetary policy, and stronger capital markets, and sees
no need to let the naira weaken, Governor Lamido Sanusi said. “The
Central Bank is convinced that a stable exchange rate is crucial both
for maintaining price stability and attracting foreign investment as it
provides a transparent anchor,” Mr. Sanusi told Reuters late on
Wednesday.

Nigeria sold 60 billion naira in 5-year and 3-year sovereign bonds at
its first debt auction of the year, the Debt Management Office (DMO)
said on Thursday. The debt office sold 30 billion naira each in the
5-year and 3-year instruments at Wednesday’s auction with marginal
rates of 11.13 per cent and 10.40 per cent respectively, slightly lower
yields than at the previous auction in December. The bonds were issued
at 12 per cent each last month.

Stronger-than-expected
Chinese growth data spurred concern on Thursday about tighter monetary
policy, prompting a sell-off in equities led by emerging markets.

The euro dipped on
profit-taking after reaching two-month highs in the previous session
but then trimmed losses as speculation grew that the euro zone’s rescue
mechanism for fiscally troubled peripheral states might be strengthened.

Chinese growth
soared past forecasts and inflation slowed less than expected in the
fourth quarter, prompting worries that the government may intensify
tightening. Disappointing U.S. earnings added to the mix.

Plans for a
delayed 300 MW wind farm in Kenya can now proceed after lenders agreed
to rely on the government’s assurance that it backed the plan, instead
of proper guarantees, the chairman of the project said. “Guarantees, we
are not being given. What we are getting is a letter of comfort, or
support, from the ministry of finance. This has now been agreed with
the lenders as an acceptable format so we can move forward,” Carlo van
Wageningen, chairman of LTWP, told Reuters in an interview. Kenya’s
government has been scratching its head over how to deal with demand
from lenders for financial guarantees. Kenyan law does not allow the
Treasury to put down a security for a private venture.

South Africa’s rand
gained slightly against the dollar on Thursday, coming off six week
lows ahead of the central bank’s interest rate decision later in the
session. A Reuters poll forecast the Reserve Bank will keep its key
repo rate at 5.5 per cent, taking the view that 650 basis points of
cuts since December 2008 is sufficient stimulus to help lift growth
after the economy contracted in 2009. Government bonds firmed,
recouping some heavy losses that pushed yields to multi-month highs
this week.

The rand fell to a
six week low of 6.9978 in the previous session, inching close to the
key psychological level of 7.00/dollar that could indicate further
losses if breached.

Some years ago, I
read about the pathetic story of a young man in the South Eastern part
of the country. He had participated in the promotion of a drinks
company. He had a winning number and he approached the company
representatives. However to his chagrin, he was told the winning number
was a fake. Through this, he suffered several forms of humiliation and
harassment by the company. The end result, he lost out completely.

The above story is
a true life experience and there are several others whose stories were
not published in the media. Consumers are treated with so much disdain
and disrespect by companies. It is disheartening, to note that the
aphorism ‘In Nigeria, everything goes’ has had adverse effects on the
rights of an average consumer. Some companies even go to the extreme
extent of using security agents to intimidate harmless citizens. The
rights of consumers are being eroded on a daily basis and very soon,
consumers will pick the gauntlet against offending companies.

Consumer Protection Council’s roles

A major function of
the Consumer Protection Council (CPC) is to provide speedy redress to
consumer complaints through negotiations and reconciliations. It is
also expected to ensure that offending companies provide compensations
to aggrieved consumers.

CPC needs to
intensify its efforts and create engagement sessions to interact
directly with consumers. Though it has succeeded in handling thousands
of cases through its enlightenment campaigns, a lot needs to be done.
It should embark on a mass media campaign with the sole objective of
educating consumers on their rights. The consumers need to see CPC more
as a vibrant and dynamic organisation championing their rights and
defending their cases.

While CPC has not
been totally dormant, it needs to give its activities a huge bite to
make companies treat consumers with respect and there should be
awareness in the media about what CPC is doing to protect consumers.
This to a large extent will instil consumer’s confidence in the
organisation.

The implication of
this is that when consumers see such, they will have no doubts that
their cases will be treated with utmost importance.

The organisation
can also achieve success when it connects directly with the consumers.
The connection here may be in form of a consumer research and consumer
insights generation, wherein it sets up a veritable platform to gauge
the feelings of consumers; the result will assist it in discharging its
roles effectively.

Consumer forum is
also a potent tool to address the grievances of consumers. CPC should
set up such across the country. It is also expected that CPC publishes
cases against offending companies and penalties imposed. This will
serve as a deterrent to others.

Consumer groups
should also be encouraged to promote the interests and rights of
consumers. This is part of the roles of CPC and its support for such
organisations will serve as a buffer for CPC activities and programmes.

This is why the
activities of Consumer Advocacy Forum (CAFON) led by Sola Salako needs
to be commended. This organisation has risen to the defence of consumer
rights and has remained a viable instrument to champion the causes of
an average consumer. CAFON also needs to touch base more with consumers
and publicise its activities. It has remained a vibrant advocacy group
by focusing on several sectors.

Challenges to consumers

This comes with
serious challenges to consumers not to be docile again. It is expected
of consumers to challenge any infringement of their rights. We need to
use all available legal avenues to express our grievances. When there
is consistency, our case will receive attention. It is no longer a time
for consumers to sit in despair. Let everyone begin to shout from the
roof top to register their complaints. The onus is also on the media to
assist such consumers. The media needs to set the agenda and protect
the rights of consumers.

I foresee a
consumer revolution in the very near future. This is because any
company that maltreats consumers will face dire consequences. The
situation cannot remain like this for too long.

The Nigerian
Extractive Industries Transparency Initiative (NEITI) wants erring oil
companies identified in the 2005 oil and gas industry audit report
sanctioned by the appropriate government regulatory agencies.

Assisi Asobie,
NEITI chairman, called on the reconstituted Inter-Ministerial Task Team
(IMTT) handling the implementation of the 2005 audit report to ensure
that all remediation issues raised in the document, including sanctions
against erring multinational oil companies, are implemented.

Some of the issues
included revenue flow interface between the oil companies and the
government agencies involved in their collection and management, need
to improve Nigeria’s oil and gas metering infrastructure, determination
of the cost component of calculating the barrel, human capacity
development, and general improvement of extractive sector corporate
governance practices.

Mr Asobie added
that since it was established in 2006, the task team has little to show
in clear advice on handling the issues identified in the report,
particularly those bordering on enforcement of sanctions against
indicted multinational oil companies that failed to remit appropriate
revenues and taxes to government.

At a workshop
yesterday in Abuja organised by the Coalition for Accountability and
Transparency in Extractive Industries, Forestry and Fisheries in
Nigeria (CATEIFFN) on ‘NEITI’s Road to Validation: Key Issues and
Challenges’, Mr Asobie said he was certain that Nigeria will attain
Extractive Industry Transparency initiative (EITI) compliant status
either by March 1 or latest mid-April.

He said Nigeria,
which is currently designated ‘candidate country’ and ‘close to
compliant’, has met virtually all the six remedial actions requested by
EITI during its Board meeting last October in Dar es Salam, Tanzania,
including publication and dissemination of the 2006-2008 audit report
and development and agreement on the National Stakeholders Working
Group (NSWG) Charter to strengthen the EITI process.

NEITI Executive
Secretary, Zainab Ahmed, said a draft report of the 2006-2008 audit has
already been discussed by the NSWG during its meeting last week, adding
that an enlarged meeting of all entities involved in the process is
scheduled for January 31 to approve give approval to the final draft,
to be disseminated to the public on February 1.

The Association of Senior Staff of Banks, Insurance and
Financial Institutions (ASSBIFI), has said that it is helpless in the travails
of the staff of Union Bank as they are not members of the association.

The president of the association, Sunday Salako, said yesterday
that the it cannot do anything in respect of the general protest by the bank
staff and the recent layoff reported this week.

“Union Bank members of staff are not under us. They left our
camp since 2004 and have since been on their own. When they were here, they
used to have the highest number of staff members here then so there was this
thinking that they must produce the president of the association during any
elections and then there was a fall out. They say they are with NLC, and we are
not. So that is what happened” he said.

NLC to the rescue

However, the Nigeria Labour Congress (NLC) to which the Union
Bank ASSBIFI chapter is affiliated to has stated that it will not allow the
situation in the bank to degenerate. The labour union had on Monday directed
the bank’s management to reverse its decision not to recognise the union within
seven days.

Denja Yakub, the assistant secretary of the NLC said yesterday
that the union’s decision on the matter still stands. “Yes, that still stands,
and we are also aware of the 13 people that were laid off on Monday. We have
added that also to part of our demand. All these must be done with the given
time otherwise we are going to shut down the bank nationwide when the time
given elapses” he said.

“Workers have to be unionised, that is what the International
Labour Organisation (ILO) says” Mr Salako said. “If you read through ILO
papers, you will see that all workers have the right to be in Unions. Nigeria
is a signatory. The members of staff of some banks have been saying that they
want to join the union but the management did not allow them. Is there any
staff who will not want to join the union given what they are facing in the
industry now? Access Bank, GTB, Diamond, Stanbic, all these banks are not
unionised and the staff want to.”

“When we call for meetings and dialogues, the management would
be speaking on behalf of the staff; they won’t let them speak for themselves.
We are coming up with our own strategy now” he said.

On Monday, the management of Union Bank again laid off 13 of its
members of staff. Francis Barde, the spokesperson of the bank, in a text message
response, said the bank had 13 staff dismissed on Monday due to violations of
bank rules.

On December 15, Union Bank workers shut down operations
nationwide. Among the reasons adduced by the workers as listed on the handbills
they distributed were that the management was undermining workers’ solidarity
and constantly deducting workers’ salary for no specific reason, deducting tax
from salaries without no evidence that they are being remitted to the tax
office, putting wages of workers under assault, as well as moving deposit to
competitors, among others.