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The Miners
Association of Nigeria (MAN) has said that its members’ inability to
access loans was a major challenge to the growth and development of
sector.

The national
president of the association, Sani Shehu, in Abuja on Sunday, said that
none of the association’s members had accessed the one billion naira
solid mineral credit facility offered by three commercial banks in the
country.

It will be recalled
that Oceanic, First Bank, and Wema had in 2006, established Solid
Minerals Desks with an initial capital of one billion naira, to boost
mining activities.

Mr. Shehu said the conditionalities stipulated for the loans were stringent for interested miners.

According to him,
the requirements include huge collaterals, short period for repayment,
and huge interest rates. He noted that mining was a capital intensive
activity with long gestation period, pointing out that the
conditionalities had defeated the aim of setting up the loan.

A senator from
Bauchi Central, Mohammed Muhammed, has said that the National Assembly
will approve 60 per cent of the 2011 budget for capital expenditure.

Mr. Muhammed of
ANPP made this known at the weekend in Darazo, headquarters of Darazo
local government Area of Bauchi State, in an interview with the News
Agency of Nigeria.

He said that the
National Assembly was taking the measure to reduce the huge funds that
were spent on recurrent expenditure. Mr. Muhammed noted that in
previous budgets, meagre funds were allocated for capital expenditure,
adding that the development made the execution of some vital projects
difficult.

He said that the
recurrent expenditure in the nation’s budget was always more than the
capital expenditure, adding that this had affected the implementation
of many projects.

“There is the need
to either balance the budget to the ratio of 50:50 for both capital and
recurrent expenditure, or 60:40 in favour of capital expenditure,” Mr.
Muhammed said.

The
federal government at the weekend received the interim report on the
audit it ordered last year on the accounts of the Nigerian National
Petroleum Corporation. Chairman, Finance Commissioners’ Forum, Rebo
Usman, who disclosed this in Abuja on Friday at the end of the January
meeting of the Federation Accounts Allocation Committee (FAAC), said
the report was submitted to the Federal Ministry of Finance late on
Thursday.

The
report came just as the committee, consisting of commissioners of
finance and accountant generals of the 36 states of the federation and
the Federal Capital Territory resolved to share the sum of
N410.78billion (including VAT) from the federation account to the three
tiers of government.

Details
allocation shows distributable statutory revenue for the month of
N349.166billion, a decrease of N15.474billion, or 4.24 percent,
compared to the allocation for November, 2010, while the gross revenue
available from the Value Added Tax (VAT) was N47.461billion. Besides,
there is a proposal for the payment of augmentation of N16.051billion
as a result of shortfall in distributable revenue, though there was no
exchange gain because of the prevailing exchange rate of N147 per
dollar, which is lower than the N150 per dollar set as exchange
benchmark in the budget.

The
gross revenue of N581.561billion for the month is higher than
N557.839billion from the previous month by N23.722billion, attributable
to higher crude oil prices in the international markets above the $60
per barrel used in year 2010 budget. The allocation is coming barely
one week after the committee held a secret emergency meeting in the wee
hours of last December to approve the release of $1billion (about
N150billion) from the excess crude account for distribution among the
same tiers of government.

Most
observers had said the withdrawal was meant as an a new year bonus to
state governors for their acceptance to trade their support for
President Goodluck Jonathan, who emerged the ruling People’s Democratic
Party flagbearer in the forthcoming April presidential elections.

Mr
Usman, who is also the Taraba State commissioner for finance, said the
audit report would, however, not be made public until the ministry has
studied and digested the various recommendations contained in it to
guide government’s next line of action.

He
disclosed that the committee however resolved during the meeting not to
wait any longer for the formal release of the report before reiterating
its demand for the management of NNPC to move quickly to settle the
N450billion outstanding debt to the Federation Accounts.

“During
the meeting, we discussed extensively about the N450billion debt to the
Federation Accounts by the NNPC. We have taken a position that the FAAC
does not have anything to do with the interim audit report, since
agreement has since been reached that the NNPC is owing the N450billion.

“It
was also resolved that what should come to the Committee at its next
meeting should be the payment schedule by the NNPC. If the NNPC has an
issue with the federal government on reconciliation of its accounts,
they should find a way to sort themselves out, as the states and local
governments are not going to listen to any stories anymore,” Mr Uman
said.

The
issue of the corporation’s indebtedness to the Federation Account has
remained contentious since last year when the then Minister of state
for finance, Remi Babalola, alleged that the NNPC was not only broke,
but incapable to meet its current liabilities. Its group managing
director, Austen Oniwon, had said in a letter he sent to the committee
explaining why the corporation would not be able to pay the debt,
saying: “the corporation is insolvent, as its current liabilities
exceeded its current assets by N754billion as at December 31, 2008,”
adding that it would be able to pay the money only when the federal
government agreed to reimburse it the N1.156trillion spent on subsidy
expenses incurred for petroleum products supplies and distribution
since 2003.

Though controversy later culminated in the sack of Mr Babalola, the
government decided to order the comprehensive forensic audit of the
accounts of the corporation.

Of late, prices
have dominated discussions amongst our talking heads. One price in
particular has been most knotty: electricity tariff. Before the
“clarification” by the Nigerian Electricity Regulatory Commission
(NERC) last Wednesday, the Presidential Task Force on Power (PTFP) had
complicated this major domestic worry.

According to the
PTFP statement, after a new tariff regime, which the NERC will announce
in April this year, “average cost-based tariff (for electric power)
will fall (to) between N21 and N23 per kilowatt-hour (kWh), that is,
about a third of what Nigerians actually pay for electricity”.

Now, for most of
us, the effective electricity tariff is the one we pay to NEPA (sorry,
PHCN). And this is currently between N6 and N8 per kilowatt-hour (kWh).
So, it is a tad disingenuous for the PTFP to have forecast a fall in
tariff later this year, if the new tariff is in multiples of the old
rate. However, when you recall that electricity supply from the mains
is more absent than “live and current”, then, the nominal rate we pay
for this cannot be the effective rate.

Other sources of
power there are aplenty in these parts: the kerosene-powered bush
lantern, fuel wood, candles, and assorted generating capacity. All of
these at some cost to the individuals using them. Add these costs to
the nominal rate we pay to the monopoly supplier, and it’s self-evident
that the effective electricity tariff in the country is a lot more than
the PHCN charges.

But is it in the
range indicated by the PTFP? For industry, the answer to this is a
straightforward “Yes”. For urban middle class households, an
“undoubtedly” will do just fine. We could bicker endlessly about what
the effective tariff is for the poor and the vulnerable in the rural
areas; and we could build a case around these burdens for first
improving the infrastructure for electricity supply before a tariff
hike.

This is what most
newspaper leader writers on this subject have done. But this misses
another important point; and this is where scepticism over the NERC’s
rebuttal of the PTFP’s statement must be admitted into the discourse.

As a monopoly
supplier of electricity, government could charge anything it liked. As
government, responsible for economic development and social progress,
it was likewise minded to charge below cost. However, this means that
over the investment horizon cost of maintenance and new investment
would have to come out of other sources.

These models are
needed for government to have been seen as very responsible: to have
assessed the growth drivers that required such subsidies, to have
estimated the net gain from these growth drivers in excess of the
opportunity cost of the income losses arising from non-commercial
tariffs, and to have been sure how long these growth drivers will need
the support from low input costs.

All of this is
history now. Instead, we are going through a business model transition
that would see government hand off the supply of electricity in the
country. Private suppliers are insisting on being paid at least N18 per
kilowatt-hour (kWh) if they are to cover their costs. Therefore,
despite the NERC’s claim, the nominal tariff for electricity supplied
from the mains must go up at some time. If this brings about regular
supply of electricity, it should make our current other supply sources
unnecessary. In which case, the average cost-based tariff and the
nominal tariff will become the same.

On the assumption
that this should lead to a lowering of the effective rate on power
consumed by the average urban household, one question remains. How do
we address the peculiar cases of the poor in our rural areas, and urban
households below the average? Definitely not by putting the horse
behind the cart.

Rather than
advocate a delay in the price hike until all necessary infrastructure
for supplying power properly are in place, we should aim to strengthen
the industry’s competitive dynamics, so that a price increase by any
supply type should lead to a migration of custom to alternative power
sources.

In other words, we should not, for instance, tolerate a ban on the
importation of generating sets as part of an argument that independent
power providers need this “moratorium” to start up. For the biggest
threat to the poor and the vulnerable amongst us is the creation of new
monopoly suppliers.

One of the biggest
pitfalls in personal finances is being disorganised. Have you ever
thought of organising your finances electronically?

If you are
comfortable with technology, and are fortunate enough to have access to
it, one of the easiest ways to maintain your records, is to use
technology and personal finance software.

Advances in
personal finance software have made it possible for anyone with a
computer and regular internet access to create budgets, pay routine
bills, manage bank accounts, track every day finances, and monitor
their investments. Assuming you have already registered with your
bank’s electronic banking facility and most of your regular
transactions are handled electronically, you can take things even
further. Microsoft’s Money and Quicken are just two of the more popular
solutions.

Getting started

Perhaps, the
hardest part of organising anything, including your finances, is
getting started. Take the trouble to learn the basics of your software
by completing any online tutorials. If you do not make an effort at the
onset, the experience will be tedious, and this might defeat the whole
purpose of the exercise.

It can be a
daunting task to set up all the relevant accounts, extract information,
and then input it on your personal finance software. We often have far
too many accounts that we don’t need so this might be a good time to
streamline your accounts. Start with your current account, and then set
up accounts for your loans and investment accounts.

Most personal
finance programs can be downloaded from the company’s website and are
relatively easy to use, even for those who are not technology savvy. As
the leading software is usually compatible with the more common banking
platforms, with the click of a mouse, you should be able to download
your bank account and investment information directly, which makes it
much easier for you to reconcile your accounts. No matter how companies
try to simplify the process, however, you cannot avoid having to input
some account information manually.

Personal finance
software can be a great tool for financial planning. You can print out
reports that will help you analyse your income and expenses, and
spending categories are often in place so that you can at a glance
determine where your money is going. Most programs include a budgeting
tool, which even helps you track how well you are sticking to your
budget.

Scan your documents

Are you swamped by
paper? Paperwork consumes our offices and homes and our lives. All
those paper bills and statements tend to pile up, and they need to be
stored somewhere. One of the best ways to store and backup your data is
to scan your critical personal and financial documents. Invest in a
document scanner. By scanning many of your sensitive documents and
storing them online or at least on a hard drive you can reclaim some of
your space.

Many smart phones
have applications that you can use to “scan” documents using the
integrated camera; some of these produce very good digital mages. An
electronic version well protected from fire, theft or other loss, is
easily accessible and will also be legible long after ink has faded. It
doesn’t take up any space, except on your computer hard drive or your
flash drive.

Once you have made
an electronic copy of the documents you wish to store, you will be more
confident shredding the documents that you don’t need to keep to reduce
the clutter. There are always critical financial documents that must be
retained all your life in their original form for verification
purposes; these include birth certificates, passports, insurance
policies, title documents. These should be kept securely in a secure
fire proof cabinet or safe, but it is useful to retain scanned copies
of these documents as well.

Don’t forget to back up regularly

It is not advisable
to maintain your most sensitive financial documents on your personal
computer or laptop, as saving all your data locally leaves you
vulnerable to corrupt files and data loss, which can be very difficult
or often impossible to retrieve. Even worse, as if you lose the device
or it is stolen, hackers may gain access to your sensitive information
and use it fraudulently.

Store your
documents on a removable USB storage device or on a CD as additional
back up. It is a good idea to back up your hard drive and keep a copy
of your data off site in a different location from your computer as an
additional precaution.

Avoid a backlog

Once you are
organised, try to take some time, if possible, weekly, or at least
monthly or at least quarterly in order to scan, file and shred
documents. If you allow the documents to accumulate beyond this, it can
become overwhelming. When you manage the process in smaller chunks you
are less likely to become discouraged and leave things to pile up.

Most people have challenges making the transition from paper to
technology. Over time, paper accumulates and becomes a major
organisational problem. By migrating from paper to electronic document
storage you can save both time and space. Once you start organising
your finances electronically, you will wonder how you ever coped
without technology, and an added bonus is that it is good for the
environment.

As Sudanese vote
this week on staying as one nation or becoming two, my mind goes back
to when civil war broke out in Nigeria in 1967. I recall that when
Biafra was announced, I leapt in celebration at the novelty of suddenly
being a citizen of a new country under a new flag and with a bearded
man at the head of state. What my young mind could not fathom, and did
not question, were the reasons for the emergence of the new nation.
What were the announced reasons and what were the unspoken ones?

Before we could
settle to savour the change expected from the split, things took a
different turn. The war drums sounded, and bullets began to fly.
Streams of refugees flooded through our village and soon enough, we
were on the move. I still recall seeing starving kids, rotting corpses
by the roadside, and I can hear the screams of young ladies who were
captured and forcibly married by rampaging troops.

We see the great
mobilisations by the peoples of Southern Sudan for a split and when the
result of the referendum is announced, we can bet that the result is
like a dream long foretold.

There are many
reasons why the South should be eager to drift away. Indices of
development from the country are severely skewed against the region.
Reports have it that over 80 per cent of the inhabitants of Southern
Sudan have no sanitation facilities.

While almost 70 per
cent of the people living in Khartoum, River Nile, and Gezira states
have access to pipe borne water, the people in the south depend on
boreholes and rudimentary water wells. They and those in the Darfur
area depend largely on food aid for survival on account of the
dislocation of the agricultural sector by entrenched violent conflict.

Certainly, all will
agree that oil is a major factor in the political fortunes of Nigeria.
We may squabble and bicker under the cover of ethnic or regional
differences, but beneath the surface, the struggle is over who controls
the massive oil and gas resources and revenues of the land. The
struggle for power at the centre was set the moment a unitary system of
government was decreed in 1966 and has since coloured the sort of
federal system that the nation runs on.

Oil is a principal
factor in the current political situation in Sudan. Exploration
activities started in the 1960s by AGIP, the Italian oil company, which
found natural gas in the Red Sea. The American oil giant, Chevron,
followed suit but never revealed what they found, according to reports.

Like Nigeria, like Sudan

As time went on, a
number of Chinese and Asian companies jumped in and finally oil was
produced from the Muglad Oil Basin, Blocks 2 and 4. Sudan is divided
into 17 oil concession blocks with SUDAPET, the government owned
company, working in joint partnership with the various Asian and
European oil companies.

As aptly captured
by a Sudanese academic in a recent Oilwatch Africa meeting, “Sudanese
oil has been developed against the background of war, international
sanctions, and political isolation. It has been developed at a time of
imposing demand by emerging economies like India and China and a time
of unprecedented soaring prices of both food and oil and the
controversial use of agricultural crops as a source of bio-energy.”

Quite like Nigeria,
oil produces over 75 per cent of the foreign exchange earnings of
Sudan. Other production sectors have equally been almost completely
neglected. Before oil, over 50 per cent of Sudan’s revenues came from
the agriculture sector, contributed 95 per cent of the export earnings,
and employed a high percentage of the total labour force in the country.

With oil as a major
economic factor, and seeing that the bulk comes from the South,
developments nevertheless eluded the region. An example can be seen in
the first refinery which was sited about 70 Km north of Khartoum. Crude
export pipelines runs northward and amount to about 5326 km in length.

The reality is that
with the available infrastructure, the South cannot export its oil
except through the North. In addition, as the date of possible
separation drew nearer, new oil blocks that transverse northern and
southern areas were being allocated.

Oil companies
operating in Sudan are exempted from paying taxes. The contracts were
mostly negotiated when the price of an oil barrel of oil was less than
20 US dollars. Surely, the companies operating here could not hope for
a better space for reckless exploitation and incredibly high profit
margins. Added to this is the fact that the regulatory regime is
largely non-existent and even the conduct of environmental impact
assessments are selective.

With Sudan having
about five billion barrels of oil in reserves and currently exporting
billions of dollars worth of oil per year, it must be painful for
Khartoum to let the oil rich South go. About 80 per cent of Sudan’s oil
exports come from the southern states. Only 50 per cent of revenue
accruing from oil goes to the South, a factor that undoubtedly stokes
the embers of discontent in the area.

As the peoples of
Sudan vote for the emergence of a new Southern nation, dreams of the
desperately poor and those traumatised by war and cruelties will run
high. Children who never experienced peaceful environments will be
marvelling at great possibilities. Oil has certainly greased the
engines of exploitation, oppression and war in Sudan. It is oiling the
machines of separation today. What will it lubricate next?

These are questions we must mull over, but a bigger question is over
the implication of continued fragmentation for Africa as a whole. At a
time when the continent should be coming together and erasing the
arbitrary boundary lines drawn by colonialist adventurers, we continue
to fragment. Certainly, this cannot be the only way to overcome poor
and parasitic governance.

The
Nigerian Electricity Regulatory Commission (NERC) has said that it does
not plan to introduce higher electricity tariffs in the country.

Sam
Amadi, the Commission’s chairman, said in Abuja yesterday that the
reported impending hike in electricity tariffs under the multi-year
tariff order (MYTO) is untrue.

Mr. Amadi further assured consumers that no such action was being contemplated by the commission.

“No
decision has been taken yet by the government on new electricity tariff
in the country, contrary to speculative reports making the rounds in
some media in recent times. If there is any such plans, NERC, which is
the only agency mandated through the provisions of the Electric Power
Sector Reform (EPSR) Act 2005 to regulate the Nigeria Electricity
Supply Industry (NESI) and take decisions on tariffs, should know,” Mr.
Amadi said.

He
added that the EPSR Act 2005 mandates the Commission to, among other
responsibilities, set end-user electricity tariffs, utilising the
methodology of the Multi-Year Tariff Order (MYTO) to arrive at
cost-reflective tariffs for different categories of consumers.

The
MYTO scheme, which came into effect in 2008, was adopted to allow
fixing of electricity prices for up to five years in place of single
year tariff order previously in operation, which limited tariffs to be
set only for the in-coming year.

Under
the plan, provisions are made for limited tariff adjustments each year,
according to prevailing inflationary trend and changes in fuel costs,
with major reviews conducted at five year intervals to allow the
evolution of appropriate tariff template within a projected time frame
of 15-years.

At
present, government-approved electricity pricing per kilowatt hour
(KWH) averages between N4 and N6 for single-phase customers as well as
N6 and N8 for industrial users, while maximum demand users pay between
N8 and N12 per KWH.

Subsidy provisions

To
reduce the impact of regular tariff adjustments envisaged under MYTO on
consumers within the low income bracket, government resolved to make
annual provisions for subsidy to take care of the difference in the
tariff template.

In
the 2009 budget, about N40.31billion was appropriated for the scheme,
as against a provision of N65.78 billion last year, and an allocation
of N67 billion in the 2011 budget.

Though
the major review of tariffs under the MYTO scheme designed to help
reduce some of the risks associated with high electricity price for
consumers and investors in the industry was to have fallen due in 2013,
NERC recently brought the deadline forward from 2013 to 2011 in order
to incorporate other sources of electricity generation, considering
recent major policy decision in the section.

The
MYTO review involves a number of stages, including the ongoing data
collection from relevant agencies, valuation of existing industry
assets liabilities, and consultations.

“These critical regulatory processes are ongoing. NERC expects that
these processes will culminate in the publication of a new MYTO by the
beginning of second quarter of 2011. It is, therefore, presumptuous at
this time to suggest what the tariff will be,” Mr. Amadi said.

Recent trading
activities at the Nigerian Stock Exchange (NSE) revealed that some
investors are currently showing more interest in Zenith Bank’s shares
as over 1.050 billion units of the stock have been traded in the last
one week.

Zenith Bank,
according to the NSE, was the most active stock in 2010 with 6.302
billion shares traded while it also ranked as the third most
capitalised stock with N471.3 billion after Dangote Cement and Nigerian
Breweries.

While some market
watchers say the motivation behind investors’ interest in the bank’s
stock may be connected to government’s intervention in the banking
industry, others say some investors may have information about the bank
that is not known to the public.

Dimeji Akintayo,
analyst at Resource Cap, a business advisory company, said it was
obvious that investors are positioning themselves in banks’ shares
generally because the Asset Management Corporation of Nigeria (AMCON)
is already buying toxic assets in the banking sector.

Mr. Akintayo,
however, said, “The funds been invested in Zenith Bank are actually
coming from portfolio managers who are the main profit takers in the
market.”

Emmanuel Ikazoboh,
interim administrator of the NSE, during a media briefing on Monday,
also said that investors’ pessimism that was widespread after two
consecutive years of losses has “gradually given way to cautious
optimism.”

“The various
confidence building measures initiated by the regulatory authorities
such as the introduction of AMCON, zero tolerance for market
infractions, and compliance with post listing requirements, have begin
to yield results,” Mr. Ikazoboh said.

Market rebounds

Meanwhile, at the
close of Wednesday’s trading, the NSE’s market capitalisation, which
recorded N44 billion gains on Tuesday, further gained over N121 billion
or 1.45 per cent increase to close at N8.471 trillion from N8.350
trillion.

The number of
gainers at the end of trading session on Wednesday closed higher at 47
stocks as against the 41 gainers recorded the previous session, while
losers also closed higher at 21 stocks when compared with the 18 losers
recorded on Tuesday.

The Banking
subsector maintained its lead as the most active with 492.883 million
units valued at N4.706 billion as against the 483.696 million units
valued at N4.981 billion recorded the previous trading day.

The volume recorded
in the subsector was driven by transaction in the shares of Zenith
Bank, Wema Bank, Diamond Bank, First Bank, and Intercontinental Bank.
The total volume of 308.34 million units valued at N3.62 billion traded
in the shares of the five stocks accounted for 52.58 per cent of the
entire market volume. Trading in Zenith Bank’s shares, yesterday, was
168.319 million units, worth N2.684 billion, and it accounted for 34.15
per cent of the banking subsector’s volume.

Investors are
likely to pour more funds into Egypt in 2011 as a strengthening economy
and attractive yields outweigh a fragile social backdrop and
uncertainty ahead of a presidential election.

Egypt’s main stock
index rose 20 percent in the past six months even as soaring food
prices hit the poor, sectarian tension grew and the country held
parliamentary elections marred by accusations of fraud and bullying. A
church bombing in the northern city of Alexandria killed 23 people at
New Year and sparked angry protests by Egyptian Christians demanding
more protection from Islamist extremists. Egypt’s benchmark index
wavered in the days after the attack before rallying to an eight-month
high on January 5.

A strengthened economy

Explaining that
strength, analysts point to accelerating economic growth and a broader
shift to emerging market risk prompted by quantitative easing in the
United States and lingering uncertainty over economic recovery in
developed nations. That also seems to override uncertainty over whether
President Hosni Mubarak, 82, will run for a sixth term in office in
September. He has no deputy or obvious successor. “We do not believe
that either the run-up to the presidential elections or any overhang
from the parliamentary elections will impact economic policy – focusing
on supporting growth,” said EFG-Hermes in a research report. The
investment bank gave Egypt an “overweight” rating, saying domestic
demand should continue to strengthen this year due to faster credit
growth and rising investment.

Election rules and
the opposition’s weakness make it virtually impossible for anyone but
the ruling National Democratic Party’s (NDP) candidate to win in
September. Mubarak has not said if he will run for another term that
would take him to 89, but ruling party officials say he is their
natural candidate. Mubarak has no clear successor and has denied talk
that his son Gamal is being groomed for power. His three decades in
office have fostered a stable business environment but the strength in
a system that revolves around one man is viewed by some as a weakness
as post-colonial Egypt has no precedent of a voluntary handover of
power. “Uncertainty over the succession is a source of real concern for
overseas investors,” said HSBC Economist Simon Williams. “But while
this will wensure they stay cautious, I think Egypt’s economic
fundamentals are too good, and the yield on offer is too high, to push
them away from the trade.”

Inflation concerns

Egypt’s government
estimates the economy grew 6-6.2 percent in the final quarter of 2010
after gaining gradually from 4.7 percent in the year to June 2009. It
is aiming for 7 percent in the 2011-2012 fiscal year. The central bank
has held its main interest rate steady since September 2009 as the
government seeks to push growth high enough to create enough jobs for a
fast-growing population. That means prices, not politics, could pose
the biggest risk to the inward flow of portfolio funds, say some
economists, who forecast inflation could accelerate in the first half
of 2011. “It’s mainly about inflation – politics will be secondary as
long as there are no major political shocks related to the presidential
election,” said Brahim Razgallah, Middle and North Africa Chief
Economist at J.P. Morgan.

Core inflation,
which excludes subsidised goods and volatile items, rose in November to
8.58 percent from 7.65 percent in October. High prices hurt the poor in
Egypt, where about a fifth of people live on less than $2 a day
according to the United Nations. Inflation can also dampen demand for
treasury bills, which soak up the biggest chunk of foreign portfolio
investments. Foreigners’ share of Egyptian T-bills went from 14.6
percent in July to around 23 percent in early November, according to
J.P. Morgan. Razgallah said he expected it to remain stable in coming
months as inflation accelerates further but may rise to around 30
percent once inflation stabilises and slows.

Encouraging signs

The yield on
Egyptian 182-day T-bills rose to 10.3 percent this month from around
9.5 percent in late October, an appealing return as developed nations
hold interest rates low in an attempt to kick-start their recession-hit
economies. “I think another 0.5-1.0 percent rise in yields is
possible,” said Monette Doss, senior analyst at Prime Securities in
Cairo. “This will result in stable exchange rates because I highly
believe that if it were not for the high yields the Egyptian pound
would have depreciated more.” Economists see the Egyptian pound – which
has been testing five-year lows above 5.8 against the dollar –
strengthening to around 5.7 in coming months and say that prospect
could bolster inflows into Egyptian bonds and equities. “The FX is
quite important. As long as it remains stable with a bias to
appreciation, that will encourage foreign investments,” said Razgallah
at J.P. Morgan.

Analysts are recommending stocks likely to benefit from a stepped-up
infrastructure drive and growing spending by Egypt’s expanding middle
class after the period of low interest rates spurred consumer lending.
HSBC has “buy” recommendations on Ezz Steel and Orascom Telecom. Among
buys for EFG-Hermes are drugmaker Eipico, Maridive, Credit Agricole
Egypt, National Societe Generale Bank El Sewedy Electric and Palm Hills
Development.

Heineken N.V. has
announced that it has strengthened its platform for growth in Nigeria
via the acquisition of two holding companies from the Sona Group.

The two acquired
businesses have controlling interests in each of the Sona Breweries,
International Beer & Beverages Ind., Benue Brewery, Life Breweries
Co., and Champion Breweries.

The acquisition provides Heineken with an additional technical capacity of 3.7 million hectolitres.