Nigeria Content Online

The council of the
Nigerian Stock Exchange (NSE) has approved the acquisition of a new
trading platform, Emmanuel Ikazoboh, interim administrator of the NSE,
has said. Mr Ikazoboh said this on Monday during a media briefing on
his appraisal of the nation’s capital market performance in 2010. He
said discussion with global vendors on the need to upgrade the
Exchange’s trading platform commenced early last year. “An ad-hoc
committee of management and council including operators engaged with
various vendors to ensure that a new platform, which would address all
concerns relating to equities, derivatives, bond trading and
dissemination of data, was put in place. The committee completed its
job last year and I must say that council has finally approved that we
acquire a new trading platform,” Mr Ikazoboh said.

He said management
and the negotiating committees have been put in place to start
negotiating with the chosen vendor as to the costing and ensuring that
the nation gets the right trading platform in its Exchange. Mr
Ikazoboh, however, did not disclose the amount made available for the
purchase of the new trading platform.

Meanwhile, he
maintained that the exiting market infrastructure remains capable of
meeting the current needs of inventors, issuers of securities and
market operators. The total market value of 264 securities listed on
the Exchange increased by 41.12 per cent from N7.03 trillion to stand
at N9.92 trillion by year-end 2010. The NSE said the rise in market
capitalsation resulted mainly from new listings of equities and state
government bonds coupled with price appreciation by equities. Market
capitalsation had in 2009 declined by 26.5 per cent.

Foreign portfolio investment

On the extension of
trading hours, the Exchange’s head said, “I’m pleased to announce that
as a result of our trading extension one month after, we have an
increase in the number of deals by five per cent, an increase in traded
volume by 15.6 per cent and increase in traded value by 34.8 per cent.
This justifies that we should continue with our extended trading hours.
It also shows that our foreign investors have actually started trading
and increase the volume of our operation.” Mr Ikazoboh said some of the
erstwhile foreign investors are returning while new investors sought
opportunities considering the key attributes of high returns,

liquidity and
safety of investments. NSE statistics showed that purchases by foreign
investors during 2010 were N381.34 billion, representing 48 per cent of
the aggregate turnover. This is an increase when compared with the
N202.483 billion recorded in 2009.

“We have also put
in place strict enforcement of Exchange’s rules and post listing
requirements. As a result, we have suspended 74 dealing members during
the year for failure to submit audited accounts for 2008, 2009 and
2010. A total of 42 companies are placed on technical suspension for
infraction of listing rules; however, 17 are no longer on suspension.
Also, 15 companies are placed on full suspension for violation of
listing rules and seven companies are recommended for delisting,” Mr
Ikazoboh said.

Meanwhile, Binos
Yaroe, General Manager of NSE’s Listing Department, said non release of
financial forecasts by listed companies at the Exchange attracts no
sanction compared with non release of quarterly and annual results
which attracts various penalties.

CSCS performance

Onyewuchi Asinobi, Managing Director of the Central Securities Clearing System (CSCS),

said the CSCS made a turnover of N3.88 billion in 2010 as against a
turnover of N3.2 billion in 2009. This represents 21.25 per cent
increase in revenue. Mr Asinobi said a total of 437 shareholders used
their shareholding in CSCS depository as collateral to obtain loan in
year 2010 as against 1,550 shareholders in 2009 representing a decrease
of 71.8 per cent. Meanwhile, he said Thomas Murray, an International
Central Securities Depository (CSD) and Capital Market Infrastructure
Risk Rating Organisation, appraised CSCS’ operational processes and
performance in the year 2010 and rated it A- 2011 outlook The fiscal
injections relating to AMCON’s purchase of non-performing loans of
deposit money banks is expected to produce a twin effect in 2011. Mr
Ikazoboh said the move should provide further stability to the stock
market and inject significant liquidity into the banking system. “Asset
valuation of listed companies would likely improve with the
commencement of the operations of AMCON. However, the huge fiscal
injections may fuel further inflationary pressure,” he said.

What if someday,
the choice over who should occupy the highest elected office in this
country should come down to a decision between two disparate types?

The first sort, a
relatively honest candidate with sufficient resolve, a stiff upper lip,
and a perception of government’s role in the development process
constructed around the belief that personhood is only possible through
the people or community. The second, a person, flawed in many respects,
but who understands the limitations of insisting on the public
provision of every conceivable service in today’s much changed
environment; one, in other words, who sees the individual in society.

Admittedly, the
choices before the national plebiscite are rarely this facile. But
until a couple of weeks ago, I was minded to plump for integrity as the
non-negotiable minimum for national leadership, if we are ever to
escape the cul-de-sac in which we find ourselves. I would thus have
voted for integrity in political office, over competence with
demonstrable flaws. Five decades after independence, it is clear that
corruption is a much more complex phenomenon than we are wont to
concede. There are the obvious economic costs to it.

The private
benefits from sordid dealings and authorised thieving are more than
compensated for by the huge costs imposed on society as a whole in
terms of opportunities foregone (including from the facility with which
beneficiaries of the corrupt system repatriate their loot and the
reluctance of foreign investors to put their money here). Corrupt
practices also lower the quality of life, since society bears generally
higher costs across every department on its account.

But now, I realise
that corruption’s moral burden is the more insidious one. This is not
solely a matter of being forced to take positions behind concepts of
right and wrong. It is more about the way these positions then force a
template of values on us. Because the inequities generated by a corrupt
environment force fundamental convictions, through these convictions,
corruption erodes the middle ground that is so essential to agreement
on the consensuses needed to move an economy like this out of the rut
that it is in.

You are either in
support of individuals feathering their nests, on the argument that
such actions are inevitable until a responsible state emerges which
then goes ahead to render such “private insurance” unnecessary. Or you
are firmly against irregular access to the public till, convinced that
the process of generating this “private insurance” is the short leash
that reins in the emergence of a responsible government.

There is no in
between. Or so I was persuaded until recently. Even in the choice of a
president for the country, the attitude to sleaze and access to public
funds I’d felt is the most important. But supposing this indignation
with the sad and bad effects of corruption in all spheres of our
national life joins (as it seems to have) with a crypto-left wing
aversion to all forms of wealth, and instead of a programme of economic
development and social progress based on the release of individual
entrepreneurial skills, decides instead to democratise poverty?

Put differently,
rather, instead, than conceive of government as an arbiter of the
extremes of wealth and want that a free enterprise system generates,
supposing our quest for a less corrupt leadership leads us to vote for
a mindset that imagines government as necessary for collectivising
agriculture, nationalising factories, and expropriating the emergent
(and “thieving”) entrepreneurial middle class.

We’d be doomed!
There is strong evidence that a culture of private provision is
superior to that of public provision. And this evidence is not from
1989 when the Berlin Wall collapsed. Nor from a bit earlier, when
Margaret Thatcher showed how powerful the individual becomes once shorn
of the constraints of the state. Instead, it comes from observing the
mercantile leaning of our people.

Better therefore,
to support a known thief who would, after having gorged his or herself
at the trough, have the good sense to leave private enterprise alone.
Nay, have the good sense to create conditions that help entrepreneurs
thrive. Undoubtedly, there’s so much that is wrong with having to
choose between South Korea under Syngman Rhee, and Tanzania under the
Nwalimu Nyerere, when other less unsightly examples (especially
Singapore) recommend themselves so strongly.

However, if ever this particular push should come to shove, we should look to the policy outcomes as we choose.

Brymedia
West Africa Limited, one of the companies that emerged frontrunners in
the bid for the national telecoms carrier, Nigerian Telecommunications
Limited (NITEL) and its mobile subsidiary, MTel, is said to have
commenced strong moves to realise its ambition.

During
the financial bid exercise held February 16 last year, Brymedia, which
has a technical partnership pact with Telecom New Zealand, emerged
second runner-up with an offer of about $551million, excluding the Code
Division Multiple Access (CDMA) network system, after Omen
International Limited (BVI), which emerged the reserve bidder with a
$956.996million.

However,
following indications that New Generation Consortium, which was
announced the preferred bidder by the National Council on Privatization
(NCP) could not pay the $750million (about N112.5billion) initial bid
security at the expiration of the extended deadline of December 23,
2010, the management of Brymedia, NEXT gathered at the weekend, is said
to have indicated interest to move in and take over the company.

A
senior Bureau for Public Enterprises (BPE) official had told NEXT in
confidence during the week that another extension is not likely to be
granted the preferred bidder, as it was clear it was either not serious
about paying the $2.5billion offer it made or it does not have the
capacity to do so.

The
official, who said the management of the privatisation agency is
already looking beyond the New Generation offer, indicated that the
option open for consideration when they resume from holidays today
(Monday) is to formally inform the NCP chairman and vice president,
Namadi Sambo, on the latest development and solicit his approval to
cancel the bid.

Though
the official did not say what step the BPE would take next, it was
gathered that options may include adopting the proposal by the
Adetokunbo Kayode-led 8-member ad-hoc committee constituted March last
year to review the sale in the wake of the initial confusion that
trailed the bid, by either inviting the reserve bidder to come forward
and take up the bid, or for the bid process to start afresh.

But
authoritative sources close to the BPE, who pleaded anonymity, confided
in NEXT that Brymedia has already written to the authorities of the
privatization bureau indicating his interest to raise its former offer
to about $600 million, which it considers the current realistic value
for NITEL.

The
issue of appropriate valuation of NITEL had been one of the issues that
generated a lot of interest and debate among investors during the bid
exercise, as most analysts described the $2.5 billion offer then by New
Generation Consortium as overambitious and unrealistic.

When
the offer by New Generation was first announced, Lanre Opayemi, an
Abuja-based finance analyst, had dismissed it as unrealisable, saying:
“If the U.K.-based IILL could not mobilise $1.3billion to pay for 51
per cent stake in NITEL in 2001, what magic would an almost anonymous
company like New Generation Telecommunications Limited perform to be
able to raise a whooping N350 billion to pay for 75 per cent equity in
the company at a time the state of the nation’s economy is having one
of the worst security guarantee ratings to prospective investors?”

Though
Brymedia management wants to keep its interest under wraps till they
receive a response from the federal government, it was gathered that it
was committed to mobilise its technical expertise of its international
partners to facilitate the turnaround of the moribund national telecoms
company.

The
first attempt at privatising NITEL and its mobile subsidiary, MTEL, was
in 2001, when Investors International London Limited (IILL) emerged the
preferred bidder with an offer of $1.317 billion for 51 per cent equity
stake in the company. IILL’s failure to meet its commitment with the
payment for the bid offer at the expiration of the agreed deadline
resulted in the termination of the bid.

Another
attempt in 2003 to bring on the first strategic investor sale through a
management contract ended in a flop, as Pentascope failed to meet its
contractual obligations.

A
third attempt with Orascom, the Egyptian telecom firm, which emerged
the front bidder with a $256.53 million offer, did not go the distance,
as the bid was duly turned down, because it fell below the reserve
price for 51 per cent stake in the company.

Following
the valuation of 100 per cent of NITEL’s equity at over $1 billion in
2005, government thought the $750 million offer the following year by a
consortium of Nigerian investors under the aegis of Trasnnational
Corporation of Nigeria (Transcorp) PLC for 75 per cent equity
stake-holding was attractive enough to end the nightmare of endless
search for a reliable core investor in the national carrier.

Less
than three years of Transcorp’s management, NITEL’s fortunes plummeted,
with connected lines dropping from over 400,000 to less than 100,000,
while working lines declined from over 296,000 to about 5,000.

Last
year’s bid exercise, which threw up New Generation Consortium as bid
winner, was expected to be the last. But, with the company’s failure to
pay for its offer at the expiration of the deadline last December, the
journey for NITEL appears endless, as the search for a new owner is
about to commence again soon.

Our lives are
shaped by various events that come with financial consequences. Many
people get swept up in such events without being financially prepared.
Life events range from the significant milestones of getting married,
the birth of a child, buying a home, caring for aging parents, to the
loss of a loved one, planning for retirement and your estate. What are
the major life events you anticipate this year? Are you prepared for
them financially?

Getting married?

Are you planning to
get married this year? What a thrill to plan and prepare for a wedding
but far too often an important aspect of the marriage, the merging of
financial lives, is ignored. Money is an important aspect of marriage
and one of the most difficult topics to deal with. Whilst the time
leading up to the wedding is very busy, try to make time to discuss
money matters with your fiancé before the register is signed. Open
communication will help you both to align your goals, which ultimately
makes for a more successful marriage.

As you build
financial security together you will need consensus and compromise for
some money related issues. It may not sound terribly romantic, but
issues such as establishing joint bank accounts are important matters
that ought to be discussed. Home ownership, having children, and
funding their education naturally should be on the agenda for
discussion as well. Remember to review your important documents
carefully to ensure that they reflect your new marital status.

Are you the parent
who is expected to finance your son or daughter’s wedding? Quite often,
much of the financial burden of the actual wedding day is likely to
fall on the shoulders of parents already in retirement. Where will this
money come from? If your child’s wedding is imminent, plan ahead and
try to work within a budget appropriate for you so that costs do not
spiral completely out of control and jeopardise your finances. Do not
be in competition with your in-laws who may have far greater resources
than you do.

Are you expecting a new baby?

The birth or
adoption of a child is one of life’s most fulfilling events. New
parenthood naturally comes with new financial responsibility and
raising a family presents new budgeting challenges. Start to review and
estimate current and future expenses, from nappies to university fees!
An equity mutual fund would make an ideal savings vehicle for all the
early cash gifts that your child might receive as there are strong
prospects for long-term capital growth.

Child-care is
likely to be a major expense, especially as many mothers must return to
work. Even if you are able to stay at home with the children, bear in
mind that an extended absence from work, skills and training, could
limit your future career options, and therefore your lifetime earning
potential. If you do wish to pursue a career, consider part-time work
or pursuing training and education whilst the children are still young.

Although secondary
school and higher education are decades away for your new baby, costs
continue to escalate all over the world and the sooner you begin to
save for your child’s education, the better. You will have the benefit
of luxury of a wider variety of investment and savings options to
achieve your goals.

The birth of a
child is a good time to make a will, if you don’t already have one, and
review your insurance policies to include the latest beneficiary. The
will should make provisions for guardianship if both parents die while
the children are still minors.

Owning your own home

Are you planning to
buy or build your own home? A home is one of the most significant
purchases you will make in your lifetime. If this is on the horizon
this year do make sure it is within your budget and lifestyle and will
not become a burden.

If you know what
your budget limitations are you will not be tempted to look at
properties or houses outside of your price range. Location is
everything, and a wonderful home in an undesirable area may not be
worthwhile from the home value perspective.

Be careful with
whom you deal as the real estate market can attract some unsavoury
characters. Be particularly cautious and deliberate in ensuring that
all essential documentation is in place.

Is retirement on the horizon?

Retirement should
be a fulfilling and exciting time of life. If you plan to retire this
year or fairly soon, I hope you have been preparing long before now. We
should all begin to save for our retirement years as early as possible
in our working life. Time, consistency, and discipline are important to
accumulating enough wealth to sustain you during your retirement years.
This could end up being two decades or more.

How would you like
to live in retirement and how much is it likely to cost? Assess your
sources of retirement income, which should ideally include a pension,
rental, and dividend income. Then calculate how much you must save to
supplement it to be able to afford the lifestyle you envisage. There
are numerous online retirement planning calculators that should help
you in making these estimates. Your Pension Fund Administrator (“PFA”)
will also be able to assist in this regard.

Whilst many
financial advisors recommend shifting more of your assets from
growth-oriented stocks into more stable, income producing investments,
such as money market deposits and bonds, it is advisable to retain some
portion of your assets in stocks to increase your prospects for
long-term growth.

Your investing
style will of course depend on your risk appetite as well as your age
and circumstance and may shift towards less risk. Remember that to
achieve growth of any significance, you cannot afford to be completely
risk averse. Don’t forget to build in issues of aging, such as
provision for medical health care. Estate planning should be on the
front burner, as you age.

As life goes
naturally through its various stages, so too should your financial
planning. Review your financial objectives regularly to keep them in
synch with events that shape your life. Even if you have been fairly
consistent with your planning since your twenties or thirties, by the
time you are in your 50s or 60s you will need to adjust, revise, or
completely change the way you manage your money.

Write to
personalfinance@234next.com with your questions and comments. We would
love to hear from you. All letters will be considered for publication,
and if selected, may be edited.

The capital market community is waiting
with bated breath for the announcement of a substantive director
general for the Nigerian Stock Exchange (NSE). In the last one month,
names of shortlisted candidates have been bandied, the final stage now
drawn between Bola Onadele, Yvonne Ike, and Oscar Onyema.

A recent release by the NSE signed by
the Interim Administrator, Emmanuel Ikhazobor said that it has
completed a part of the multi- stage process for the selection of Chief
Executive Officer (CEO) for the Exchange while the name of the
recommended candidate has been forwarded to the Securities and Exchange
Commission (SEC) for approval.

The statement also added that the NSE
Council has reached an advanced stage in the selection process for each
of the three executive director positions. “It is expected that this
process will be completed in January 2011. The Council is currently
awaiting approval of its choice from the SEC.” This is the first time,
in the 50 year history of the stock exchange that the emergence of a
new DG is generating so much concern. But investigations revealed that
at no time has the choice of a DG been dependent on the approval of
SEC. The Investment and Securities Act 1999, from which SEC derives its
powers however grants the commission powers to disqualify unfit
individuals from being employed anywhere in the securities industry.

New approach

The new approach is of concern to some
capital market operators. Sunny Nwosu, national coordinator of the
Independent Shareholders Association, an investor advocacy group said
forwarding the name to SEC for another round of approval amounts to
playing to the gallery. “How can they send the name to SEC when SEC was
part of the interviewing panel, selection and shortlisting of the
candidates?” Mr Nwosu said in the case of the banking industry, banks
make public the names of a new helmsman and only forward the name to
the Central Bank for approval or disapproval. “Even if the CBN does
this, the NSE is not a government place. It is a private investment.
SEC cannot say it has not been involved in the process so why all the
drama?” An indication that the interim administrator of the Stock
Exchange was acting outside any statutory guideline is evident in the
statement. Mr Ikhazobor, rather than refer to a statutory provision
that mandates it to get SEC approval, pinned it down to an agreement
reached by both parties. “The position of the Exchange to get the
approval of SEC is in accordance with previously agreed procedures,
that the apex capital market regulator should give its approval to any
candidates the Exchange intends to hire prior to their engagement by
the NSE,” the release stated.

Mr Nwosu added that the interim
administrator cannot do otherwise since he was appointed by the
commission. “SEC cannot convince us that they have not meddled with the
appointment of a new DG.” He said rather than rush into appointing a
new DG whose tenure would be bogged down by legal battles; the parties
should ensure that all legal obstacles are removed. “We are in a
democracy which means that any major decision must get judicial input.”
He said the secrecy that has surrounded the appointment of the new DG
would in no way enhance investor confidence. “It shows the exchange is
unable to take decisions. Policy summersault affects investor
confidence.” At the 49th annual general meeting of the NSE held in
Lagos on November 23, 2010, the interim president of the NSE Council,
Balama Manu, said all formalities about the appointment of a new
helmsman will be concluded by December so that the candidate resumes in
January.

Successful candidate

He however said the assumption of
office of the successful candidate will depend on how soon he can
resume. “This depends on how they will disengage from their current
employment and indicate to us when they will formally resume. If you
are occupying a senior position in an organisation, usually you give a
three months notice. But if they are in a position to disengage as
quickly as possible nothing stops them from taking over office early
January 2011,” Mr Manu had said.

A senior stockbroker who did not want
his name mentioned said the whole procedure smacks of politics and
power game over who eventually becomes the new head. “The matter is
between NSE and SEC. However, for us stockbrokers it does not really
bother us as long as our trading platforms are up and running.” The
battle for who leads the Stock Exchange started last August when SEC
sacked the erstwhile DG, Ndi Okereke-Onyiuke on grounds of “inadequate
oversight of the Exchange, ongoing litigation, allegations of financial
mismanagement, governance challenges, and the inordinate delays in the
implementation of the succession plan for the Exchange,” according to a
statement by Lanre Oloyi, SEC’s spokesperson.

However, effort to get Mr Oloyi’s response on the ongoing choice of the new DG did not yield result.</

While the
management of the Nigeria Bottling Company, the bottlers of Coca Cola,
is still unyielding on its plan to delist its shares from the Nigerian
Stock Exchange, some operators have condemned the action saying it is a
bad omen for the market.

NBC had last month
announced that its parent company,Coca-Cola Hellenic Bottling Company
S.A., intends to invest up to N45 billion in Nigeria between 2011 and
2013 in order to strengthen its commercial base.

Consequently, the
proposed transaction will involve the cancellation of part of the share
capital of NBC, so that it would become a wholly-owned subsidiary of
Coca-Cola Hellenic.

The proposal includes a cash payment of N43.00 per NBC share as consideration to the minority shareholders.

For an investor who
has been a shareholder of the NBC for over a decade, the delisting plan
is “nonsense.” Albert Edun, an executive member of the Nigerian
Shareholders Solidarity Association, said, “I still don’t know why they
are doing that even with all the explanations they have given for the
action. I bought NBC shares longtime ago; over 10 years now. Yes, it is
true that the company paid its shareholders good dividend when the
going was good.

But we must not
forget that the same shareholders endured the pains of no dividend when
NBC could not reward its investors.” “Now they want to delist and pay
us ridiculous N43 per share. All that is nonsense and shareholders must
condemn such act. You see, all these Greek investors are funny.
Indirectly they are telling us they no longer have confidence in the
Nigerian stock market.

They want to delist their company but also want to continue to do business in our country without been listed,” Mr. Edun said.

He said this is the
time investors need government’s intervention. “Government must come to
our rescue and not allow this kind of thing to happen,” he added.

Negative impression

Tunde
Oladapo-Dixon, Chief Executive Officer, StockPicks Consulting, a stock
broking firm, said the delisting plan of the NBC “is a bad omen for our
capital market because the company is one of our defensive stocks. It’s
a blue chip stock.” Mr Oladapo-Dixon said, “For them to be leaving the
market, it creates a lot of negative impression to the likes of MTN,
Glo and other big giant companies that may be wooed to the market. The
delisting plan really does not give our market much reputation, ”
adding that “it will not be a good step if the Exchange and the
government allow NBC to be delisted from the stock market just like
that.” The National Chairman of the Progressive Shareholders
Association of Nigeria, Boniface Okezie, said with government’s
intervention in the matter, “confidence will return to the market and
the market in return can help the government to grow the economy.” Mr
Okezie said, “I think it is time for the government to discover the
importance of the capital market in wealth creation.

Blue chip companies
like NBC should not be lost. In fact, we even need more companies to
come on board.” Victor Ogiemwonyi, chief executive officer of
Partnership Investment Company, a stock broking firm, in an article in
NEXT last Tuesday said that the price of the NBC stock is well above
the N43 offer.

“A great majority
of analysts think investors should get more for their stock if they
sell at all. They put the value at anywhere between N67, an earnings
basis valuation and also closer to its peak price during the last bull
market, or around N105 using its book value before revaluation,” Mr
Ogiemwonyi said.

Profit declines

In its interim
financial result for the first quarter ended March 31, 2010, the NBC
recorded a 76.96 per cent decline in profit after tax of N243 million,
as against the N1.055 billion posted in the comparable period of 2009.
However, NBC’s turnover during the period shows an increase of 15.46
per cent; from N23.199 billion in 2009 to N26.787 billion in 2010.

The Coca Cola
bottler had, in its third quarter ended September 30, 2009
results,recorded a 135.21 per cent increase in profit after tax of
N2.291 billion,as against N974 million in 2008; while its turnover in
the period in view grew by 14.63 per cent from N56.474 billion in 2008
to N64.740 billion in 2009.

NBC last declared
bonus to its shareholders in April 2004 and only proposed a dividend of
50 kobo last year May following its 2009 financial year end. The
dividend was expected to be paid last year December 31.

Meanwhile, the
spokesperson of the NBC, Adeyanju Olomola, has refuted claims that some
Nigerian employees of the company were recently replaced by Greeks and
Europeans following the new investment plan of the company.Mrs Olomola
said, “We did not replace Nigerian employees with Greeks or Europeans.
The company reviewed its operations in a bid to optimise same and
embarked on a restructuring exercise last month (November). This
affected some of our employees; however,we ensured fair and equitable
compensation not only in line with, but beyond what is stipulated by
regulatory requirements.”

Mobile phone text
messages warning customers to withdraw their money from Oceanic,
Intercontinental and Unity banks, circulated last Friday, causing a
stir.

“If you know anyone
that has money in Oceanic, Unity and Intercontinental Bank, tell them
to go and withdraw their money because information reaching us is that
they may go in distress soon,” a version of the text message read.

Investigations
revealed that the text message probably went out because the three
banks reporteldy laid off a large number of staff without due process.

Oceanic Bank issued a press statement saying that the text message was the handiwork of mischief makers.

“The management of
Oceanic Bank has flayed misleading text messages on purported
liquidation notice served on some banks by the Central Bank of Nigeria
as the handiwork of mischief makers,” it read.

It stressed that
there was no truth in the purported liquidation notice as no bank
operating in the country was under any threat of liquidation by the
Central Bank. The bank’s management refuted claims of retrenchment,
adding that its inclusion among banks to be picketed as reported in the
newspapers was based on misinformation to labour leaders.

Mohammed Abdullahi, the Central Bank’s spokesperson, equally said that there is no truth in the text message.

“The Central Bank
wishes to state categorically that no such liquidation notice has been
issued and there is therefore no plan to liquidate any of the three
banks and members of the public are advised to disregard these
messages,” Mr. Abdullahi said. “All depositors and customers of
Oceanic, Intercontinental and Unity banks are hereby advised to
continue to conduct their business with the banks,” he added in a
statement issued last Friday.

In other news, the Association of Senior Staff of Banks, Insurance
and Financial Institutions (ASSBIFI) said it would continue on its
planned strike, expected to take off on Tuesday,

Leaders of bank
workers unions have insisted on carrying out their planned picket of
banks on Tuesday, even though they have started negotiations with the
management of the affected banks towards a possible resolution of the
issue.

Sunday Salako, the
president of the Association of Senior Staff of Banks, Insurance and
Financial Institutions, who confirmed that the leadership of the
affected banks (Oceanic, Intercontinental, and Unity banks) have begun
talks with the union, said the beginning of negotiations does not mean
the scheduled picketing has been called off.

“It is true that we
have started negotiations and we are trying to resolve the issue, but
that does not mean that we have called off the scheduled picketing.
Right now, we are discussing with the affected banks. What if we put
pen to paper and realise that we cannot reach a compromise? That we are
discussing definitely does not mean we have reached a conclusion” he
said in an interview yesterday.

Statements from the
affected banks over the weekend had stated that none of the banks would
be picketed and that customers should continue their normal banking
transactions as negotiations are going on between the banks and union
leaders.

Intercontinental
Bank, in a statement made available on Sunday, stated that “Given these
developments, the managements of the three banks have advised customers
to go about their businesses as none of the banks’ branches would be
picketed.”

John Aboh, the
Group Managing Director, Oceanic Bank Plc, in a statement issued by the
bank on Friday, also said there would be no picketing in any of the
bank branches.

“Oceanic Bank has
the highest regards for its workforce and has always involved relevant
Labour Unions in its activities. We are working closely with the
Association of Senior Staff of Banks, Insurance and Financial
Institutions (ASSBIFI) to set the records straight. We want to reassure
our customers that there will be no picketing in any of our branches
and urge them to remain calm and go about their normal businesses with
the bank,” the statement read.

Seeking a solution

Investigations
reveal that the management of the three affected banks met with the
bank union on Friday with a view to resolving the planned industrial
action.

Last week, the two
unions in the banking sector – ASSBIFI and its junior staff
counterpart, National Union of Banks, Insurance and Financial
Institutions Employee (NUBIFIE), had threatened to shut the three
affected banks on Tuesday over the controversial exit of some of their
staff.

Intercontinental
Bank had recently relieved 165 staff of their duties while Unity Bank
had, also two weeks ago, asked some of its staff to leave.

The banks claimed
that the layoffs were on grounds of non-performance and disciplinary
actions which they said is based on the terms of their employment,
which states that underperforming employees would not be retained by
the organisation.

Nigeria plans to go
ahead with its delayed $500 million debut Eurobond in two to three
weeks and expects a bill to create a sovereign wealth fund to pass
under the current administration, the finance minister said on Friday.

Africa’s top crude
oil exporter first announced plans to borrow in the international bond
market in September 2008 but has put the issue on hold for several
times, most recently in December, citing adverse market conditions.

“Very soon, in the
next two to three weeks, we will be going … to the market with the
$500 million Eurobond,” finance minister, Olusegun Aganga, told a
briefing with journalists, adding that roadshows were planned in the
United States and Europe.

The aim of the
10-year bond is to set a benchmark in the global market for Nigeria
rather than to raise funds, meaning the pricing is considered more
important than the timing. Nigeria, last year, appointed Deutsche Bank
and Citigroup as bookrunners for the Eurobond and named Barclays
Capital and FBN Capital, a subsidiary of Nigeria’s First Bank, as its
financial advisers. It had planned to take a roadshow to the United
States in December but postponed the issue due partly to volatility in
global markets caused by the Greek and Irish debt crises.

Analysts have grown
increasingly concerned about the state of the public finances in
Africa’s third-biggest economy, particularly as presidential and
parliamentary elections in April approach and costly campaigns get
under way. But most analysts say the relatively small size of the bond
issue, combined with appetite for high-yielding assets and a paucity of
West African debt issues, means investors would be ready to shrug off
those short-term risks. Mr. Aganga and Citi’s chief executive, Vikram
Pandit, have said they expect significant demand for the issue.

Wealth fund

President Goodluck
Jonathan has come under criticism from his main election rival, former
vice president, Atiku Abubakar, over the state of Nigeria’s finances
and plans for “excessive borrowing” in this year’s budget.

Despite higher oil
prices and output, Nigeria’s foreign reserves of $33 billion were down
almost a quarter on a year earlier by the start of December and the
2010 budget deficit is expected to have topped 6 per cent of GDP.

The Excess Crude
Account (ECA), into which Nigeria is meant to save oil revenues above a
benchmark price, has fallen to $300 million from $20 billion four years
ago.

Mr. Aganga defended
the 2011 budget – which represents a drop in approved spending over
2010 – saying the government was already taking steps to rein in
recurrent expenditure and that comprehensive audits of bodies including
state-run oil company NNPC were underway to ensure leakages were
plugged.

He said the lower
reserves were a result of maintaining a stable exchange rate in the
face of increased forex demand, spending on power projects, and the
allocation of $1 billion of seed funding for a sovereign wealth fund to
replace the ECA. A bill before parliament to create the fund should be
passed before the April elections, he said.

“I expect and hope
that we will get the bill passed before the end of this administration
… I think it will be one of our major achievements as a country,” Mr.
Aganga said.

The fund is meant
to divert more of Nigeria’s revenues towards badly needed
infrastructure development, save for future generations, and establish
a financial reserve to weather economic downturns.

It is hoped that
the fund will create a much firmer legal framework for the management
of Nigeria’s oil wealth than the ECA, disputes over whose
constitutional legality make it difficult for the federal government to
defend the savings from the country’s 36 cash-hungry state governments.

REUTERS

At least 18
consortia are working on bids for Nigerian oil rights being sold by
Royal Dutch Shell and partners, the Sunday Times newspaper said, citing
unidentified sources close to the process. Sources reveal that Nat
Rothschild, scion of the banking dynasty, was backing one group of
bidders, while Russian gas group, Gazprom, was leading a bid with
Nigerian resources firm, Equinox Group.

London-listed oil
industry services group, Petrofac, has joined forces with Nigerian gas
firm, Seven Energy, to bid for one of the blocks being sold, while
London-listed oil group, Afren, also plans to make an offer, it added.

Shell, which is selling four onshore fields along with partners Total and Eni, declined to comment.