Nigeria Content Online

Nigeria’s Foreign
Direct Investment (FDI) inflows fell from six billion dollars in 2009
to 2.3 billion dollars in 2010, a new United Nation report says.

The fall represents
a 60.4 per cent decline. The latest UN Conference on Trade and
Development (UNCTAD) Global Investment Trends Monitor (GITD) was
released on Monday at the UN office in Geneva. The report notes that
inflows into Africa, which peaked in 2008, is on the decline, despite
an increase in developing and transition economies, which rose by 10
per cent in 2010.

“Estimates show
that FDI inflows in the continent fell by 14 per cent to 50 billion
dollars in 2010, although there are significant regional variations,”
the report stated.

China’s Sichuan
Hongda Co. Ltd. will invest $3 billion in a coal-fired power plant and
two iron ore mines in Tanzania, the state-run National Development
Corporation (NDC) said on Tuesday.

Sichuan Hongda is
in advanced talks with senior Tanzanian government officials to sign a
contract for the projects after it beat bids from more than 20
international companies including Rio Tinto and BHP Billiton.

“The Chinese firm was picked from a long list of bidders as the
preferred investor after winning an international bidding process. We
are now negotiating final details before a contract can be signed,”
said NDC’s board chairman, Chrisant Mzindakaya.

Nigeria began a
series of investor roadshows for the planned multi-billion dollar
privatisation of its power sector on Tuesday, soliciting interest in
electricity distribution companies and power stations.

The Bureau of
Public Enterprises (BPE), the country’s privatisation agency, met with
investors in the commercial hub Lagos and will hold similar events in
Dubai, London, New York and Johannesburg over the next three weeks.

Africa’s most
populous nation, plagued by blackouts, wants to privatise power
generation and distribution. Government will continue to own the
national grid but its management will be privatised.

The investor
meetings come ahead of a February 18 deadline for expressions of
interest in 11 distribution companies, two thermal generating firms and
two hydropower stations.

They also come
ahead of presidential and parliamentary elections in April. Some
investors have said they are reluctant to commit themselves until the
political uncertainty has cleared.

“The idea of this
is that it enables investors to gain some confidence. Even if we don’t
complete it before the handover of government, no harm is done,” BPE
Director General Bolanle Onagoruwa said.

“From the response
you have seen here, power is something that has attracted the interest
of most people in Nigeria. I don’t think any administration will come
in and not take the issue of reforms in the power sector seriously.”

Election

Goodluck Jonathan
unveiled the privatisation plans last August. Nigeria estimates it will
need $10 billion a year of investment over the next decade to meet its
energy needs.

Power blackouts are
a major brake on growth in sub-Saharan Africa’s second-biggest economy
and Mr Jonathan has made ending them one of the cornerstones of his
election campaign.

Some executives
said while the elections may be delaying things on the Nigerian side,
with minds focused on campaigning, they had little impact on long-term
investment decisions.

“The election is
not holding us up … We will evaluate every opportunity and if it
makes sense we will invest,” said one Asian executive, asking not to be
named.

He said his company
felt “more comfortable” since Mr Jonathan’s victory in the ruling
party’s primary last week, which increased his chances of victory in
April.

Investors have praised the blueprint for reform but say its implementation, and regulation of the sector, will be key.

The 11 distribution
companies up for grabs are in the capital Abuja in central Nigeria, the
cities of Benin, Enugu, Eko, Ibadan, Ikeja, and Port Harcourt in the
south and those of Jos, Kaduna, Kano, and Yola in the north.

The thermal power
stations are Ughelli Power Plc, in Delta State in the southern Niger
Delta oil region, and Geregu Power Plc in Kogi State in north-central
Nigeria.

The hydro power
companies, for which concessionaires are sought, are Kainji Power Plc
— comprising power stations in Niger and Kwara States in north-central
Nigeria — and Shiroro Power Plc, also in Niger State.

Wema Bank said it has got N15.2 billion from the Asset
Management Corporation of Nigeria (AMCON) as sales of some non-performing loan
portfolio of the bank.

“We have got 15.2 billion from AMCON, in addition to the N7.5
billion we raised from bonds last year. These we have, in addition to about 30
billion we have recovered from our non-performing loans. We have applied for
and we have obtained our licence to operate as a regional bank. We would be
operating in South South, South West, Lagos and so on,” Tunde Olofintila, the
spokesperson of the bank said in an interview yesterday.

He explained that the bank had operated domestically all along,
so it had no worries about addressing subsidiaries outside the country.

“Going regional will not affect our operations in any way,
neither will it affect our customers. There is nothing major that can be done
with a bank with international licence, national licence that we cannot do,
except clearing at the interbank market, which does not affect our customers.

“Wema bank has about 150 branches. We would close down 17
branches that we have deemed to be non-profitable, maybe due to their location
or other factors. In the areas where we want to operate, our profit margin is
high, our deposits are high, and there is federal allocation to those states
every month, which helps”.

“For our customers who patronise some of the branches that would
be unfortunately affected by our reforms, we have made provision for online
banking. They don’t need to go to the banking halls. All our customers can
reach us online and transact their businesses like nothing has changed, which
would actually be easier for them.

“We are aware that not all of our customers may follow us when
this is done, but after we have done the cost-benefit analysis, it is the best
decision for us, to operate in the region where we make profit,” he said.

He said the amount was received based on the level of
nonperforming loans in its books.

“It depends on the quantum of their delinquent loans. The money
we get from AMCON is based on the value of delinquent loans that we have. We
have recovered about N30 billion of our non-performing loans already, as at
December ending. It is a continuous process and I think we are doing well,” he
said.

At the expiration of the deadline for capital raising last year,
the Central Bank stated that Wema Bank Plc was able to raise the sum of N7.5
billion from the Special Placement Offer, approved by the Securities and
Exchange Commission (SEC), and was formally authorised during the bank’s
completion meeting, held on Tuesday, October 28, 2010, while its full
recapitalisation would depend on its receipts from AMCON.

According to the Central Bank’s guidelines, commercial banks authorised to
conduct business on a regional basis shall “maintain a minimum paid-up share
capital of N10 billion or such other amount as may be prescribed by the CBN
from time to time.”

Research and Marketing Services (RMS), a leading marketing
research company not only in Nigeria but also within the West Africa region,
recently released a survey tagged ‘Pulse of the Nation’, which reflected the
opinions and views of Nigerians on socio- economic and political issues.

The survey is an eye opener as it revealed the desires of the
people with specific regards to governance, citizen empowerment, elections, and
leadership. It is one survey that reflects the wishes of the people for a
government to focus on delivering value to the citizenry.

The importance of such perception surveys cannot be
underestimated, especially in an environment such as ours. The survey comes as
a critical reference point in this column due to the recent decision of
government to close schools for over three weeks because of voter registration
exercise.

Even though RMS is a private entity, I think government
parastatals saddled with information and civic orientation should, on a
consistent basis, engage in public perception research to touch base with the
citizens. The recent uproar resulting from the schools’ closure bears testimony
to the fact that we do not have a listening government. A key ingredient of the
re- branding campaign is the desired need to re-tool government machinery to be
more virile and responsive to the needs of the citizens.

I find this a very commendable effort because perception is a
key and Nigerians are living up to their civic responsibilities. Some other
bodies like a group of educators went to meet the education minister while
others utilised media to publish their grievances.

It thus becomes crucial for Nigerians to embrace every channel
of communication to make their opinion and perception count on key government
policies. The media also has a critical role to play in ensuring that the
public perception and views on key issues of national discourse are given
prominent attention. The same was accorded the public outcry that greeted the
legislators pay.

Public perception should not also be taken with levity, as it
constitutes a groundswell of public opinion on issue. Gauging public perception
on a consistent basis helps in moulding and reshaping government policies for
better impact. Public perception helps the government to perform better and
focus on key parameters to provide good governance.

It thus becomes essential for government to embark on public
perception survey to assess people’s response to government policies and
initiatives. This is due to its effectiveness in evaluating the thought pattern
of the people as it enables government to focus on areas that can improve the
lot of the entire citizenry.

It has become expedient for government to attach high importance
to public perception.

This sounds strange in our clime and it should not be so. It is
high time the government do away with unpopular policies.

There should be a sustainable and consistent process to gather
opinions, feelings and views of the people. When the government fails to do
this, it meets with resistance from the people and thus reverses unpopular
decisions.

This is also a clarion call to Nigerians to shed all garments of
docility when it comes to public issues. We should also make our opinion count
and let the government listen when we talk.

Ayopo, a communication
strategist and public relations practitioner, is the chief executive of
Shortlist Limited.

The African Network
for Drugs and Diagnostics Innovation (ANDI), at its inaugural meeting
in Addis Ababa, Ethiopia, announced the joint emergence of Beth Mugo,
minister for public health and sanitation in Kenya, and Naledi Pandor,
minister for science and technology in South Africa, as co-Chairs of
the Board of ANDI.

The innovative
co-Chair governance structure was created in recognition of the
critical need to integrate public health research and policy with
Science and technology in order to develop a holistic approach to
sustainably address Africa’s health challenges through the discovery,
development and delivery of drug, diagnostics, vaccines and other
health products within Africa.

Board members
representing North, South, East, West and Central African regions,
leading health experts, the African Diaspora and key institutional
partners – the United Nations Economic Commission for Africa (UNECA);
legal hosts for ANDI, the World Health Organization (WHO); and the
African Development Bank (AfDB) discussed the strategic plans for ANDI.
The European Commission has also provided support for the establishment
of ANDI.

Speaking at the opening of the Board meeting, Jennifer Kargbo, the
deputy executive secretary of UNECA, stressed the importance of the
private sector participation in ANDI activities, especially in
translating R&D outputs into useful products and services that
benefit the people. She emphasised that “ANDI’s success should be
measured in terms of numbers of lives saved, jobs created, and firms
created.”

The quality
management system NIS ISO 9001:2008 award certificate will be presented
to Dangote Cement, Obajana plant; and Dangote Cement, Benue plant at a
ceremony in Lagos on January 20, 2011.

Dangote Cement,
Apapa plant will also receive the occupational health and safety
management system NIS BS OHSAS 18001:2007 in recognition of its good
manufacturing practice (GMP) and significant contributions to the
economic advancement of Nigeria.

The awards are
coming after a verification of Dangote Cement plants at Obajana, Gboko
and Apapa by a team of auditors from the Standards Organization of
Nigeria (SON).

Conveying the news
of the awards to Dangote Cement, director general, Standards
Organization of Nigeria (SON), John Akanya, wrote:

“I have the
pleasure to inform you that the quality management system (QMS) of
Dangote Cement is hereby adjudged by the Standards Organization of
Nigeria to conform to the requirements of NIS ISO 9001:2008 standard
and your facility is consequently certified.” Dangote Cement has,
however, emerged the biggest out of the 55 rated companies in Nigeria
at N1.86 trillion capitalisation, according to a report of ‘Stakes 55 –
Largest Companies in Nigeria’ just released by International Corporate
Research (ICR).

The report, which
measured companies by market capitalization for the 4th quarter of
2010, indicated that with the emergence of Dangote Cement, the Stakes
55 gained 43.19 per cent rising from N5.14 trillion to N7.36 trillion,
its highest value since inception.

International shea
industry stakeholders will come to Accra, the capital of Ghana, for the
sector’s fifth annual conference, April 6-7, 2011.

The Global Shea
Alliance announced that ‘Shea 2011: Sustainable Solutions’ will feature
the launch of the world’s first international private sector shea
alliance and expert information on virtually every aspect of the
business.

“The conference
facilitates connections,information exchange and business among
stakeholders from across West Africa and around the world,” said Peter
Lovett, shea sector advisor at the USAID West Africa Trade Hub, which
organises the event with sponsorship from across the industry.

From the women’s
groups that collect shea nuts to the world’s major buyers of nuts and
butter, the conference is the only event of its kind for the industry.
Researchers, civil society, public sector officials, service providers,
financial institutions and transport companies will also participate.

“This event is the
most significant of its kind to date, for the global shea industry,”
said Peter Stedman, Senior Buyer at The Body Shop International.

Operators will formally launch the Global Shea Alliance at the conference, which they formed in October.

“An international
alliance will allow stakeholders to work together to promote shea in
international markets,” said Kadijatou Lah of Mali’s National Shea
Federation and CEO of Lawal International, a shea exporter.

The Central Bank of
Nigeria (CBN) has signed a Memorandum of Understanding (MoU) with the
24 banks in the country on the establishment of the Banking Sector
Resolution Cost Sinking Fund.

At the signing
ceremony in Lagos at the weekend, deputy governor, financial system
stability, Kingsley Moghalu, said the fund is to cover the cost of the
bailout of the banking sector.

“The CBN and the 24
Nigerian banks (Participating Banks) realised that funds from the
management and realisation of the eligible bank assets to be acquired
by the Asset Management Corporation of Nigeria (AMCON) might turn out
to be insufficient to meet the resolution cost of restoring financial
stability.

“In furtherance of
this, the CBN shall contribute N50 billion annually to the fund, and
each participating bank shall contribute an amount equivalent to 30
basis points (0.3 per cent) of its total assets as at the date of its
audited financial statements for the immediately preceding financial
year,” Mr. Moghalu said.

N45 billion annual contribution Mr. Moghalu was silent on the total amount the CBN hopes to galvanise through this process.

“I don’t want to go
into specific figures because 0.3 per cent contribution from the banks
and banks have different asset level from each other. So that cannot be
calculated by me now,” he said.

But with the total
assets of Nigerian banks currently put at between N14 trillion to N16
trillion, it is estimated that the banks will make an annual
contribution of about N45 billion.

According to him,
the gesture is part of the support of the institutions involved in
stabilising the economy. This is in order to block any shortfall in the
funds that would be realised from the management of eligible bank
assets to be acquired by the Asset Management Corporation of Nigeria
(AMCON).

“Therefore, the
(banks) resolved, in the national interest, to establish a Banking
Sector Resolution Cost Fund to meet any shortfalls and to ensure
financial stability and the soundness of the banking system,” he said.

The fund would be managed by AMCON.

Ingenuity of government

He said the fund is
part of ingenuity of government to reduce the burden of the banks’
bailout on Nigerian tax payers. Through this fund, a substantial part
of the cost will be borne by banks. He said Nigerian banks deserve
commendation for agreeing to be part of the fund.

“This is because in
most jurisdictions, it is the national governments alone, through their
treasuries, that bear the cost of stabilising the banks and preventing
bank failures. In other words, the tax payers in those countries almost
exclusively bore these costs,” he said.

He said in
Nigeria’s case, the burden on the national treasury is significantly
reduced as it will be borne by the commercial banks themselves in
addition to the CBN and AMCON.

To avoid taking
regrettable decisions in real estate investment, experts in property
management said it is necessary for real estate investors to do
critical asset analysis prior to any form of purchase.

When Adebisi
Akanni, a banker with one of the new generation banks, moved with his
family to his newly built three-bedroom apartment at Agboyi, Ketu area
of Lagos State three years ago, he never imagined he would go back to
tenancy level, or squat with a friend.

While admitting
that he paid less attention to warnings that the house he spent
millions of naira to build was located in an area prone to flooding,
Mr. Akanni said the recent flood that displaced over a 1,000 people in
Lagos, which also affected his property, took him by surprise.

“I really can’t
believe this happened to me. I bought that land years ago when it was
affordable. We waited to see if there will be any serious flood
occurrence before we built, but we never experienced any. That was why
I went ahead to build,” Mr. Akanni said, adding that after three years
of been called a landlord, “flood has turned my family to squatters
with a pastor family.”

Proper asset analysis

Experts said that
with proper asset analysis, prospective investors will know the most
common mistakes usually made and how to avoid them, adding that such
assessment will also help limit risk and ensure a good return on
investment.

Olusegun Oriade, a
business development executive at Pison Housing Company, a real estate
firm, said the persistence of the economic downturn calls for decisive
investment analysis before any business is done. He said a clear
understanding of market trends is essential to property investment.

“The credit crunch
persists and this calls for critical investment analysis prior to any
form of investing. This involves taking time to conduct market needed
analysis. It is about understanding government’s master plan for
specific area of interest.

“Location or
geographical considerations which deal with political happenstances,
policies, land administration, ecological matters, development control,
and physical planning are issues to be considered,” Mr. Oriade said.

He said most of the
flooded areas of Lagos State are government acquisition lands which
mean that these lands are without certificate of occupancy.

“The irony is that
some of these lands have building plan approval, and a larger
percentage of these are informal development,” he said.

He added that while nothing is wrong with informal development, many risks are attached to such development.

Mr. Oriade said an
investor must patiently conduct an in-depth search on any property. The
search must go beyond land registry and it must include physical
planning by the ministry of environment to determine its viability.

“It is profitable to commit resources to these searches than to suffer losses that are preventable,” he said.

‘Engage professionals’

A building
consultant at TeeA Investment, a real estate management company, Toyin
Adedoyin, said not doing due groundwork “can cost an investor a lot of
money or loss of lives at time.”

Mr. Adedoyin said a
proper inspection and evaluation of the property must be carried out by
professionals before, during, and after raining season to assure safety
for the owners.

“We often tell our
clients to be patient before paying for any property, particularly
those who like highbrow areas that are prone to flooding,” he said.

Nduese Essien, the
minister of lands, housing and urban development, also said prospective
investors should engage qualified professionals in the building
industry.

“If real estate
investors adhere to established procedures, there would be drastic
reduction in the recurrent cases of collapsed buildings in the
country,” Mr. Essien said.