Nigeria Content Online

Desperate
to see the end to the controversial sale of the Nigerian
Telecommunications Limited (NITEL) and its mobile subsidiary, MTel, the
Presidency has granted another extension to the deadline earlier
granted bid winner, New Generation Consortium, to make the initial bid
security payment for the national telecoms carrier.

Following
Presidency’s approval last October for the Bureau for Public
Enterprises (BPE) to take steps to conclude the privatization process,
New Generation was, on October 25, asked to pay the initial bid
security of $750 million (about N112.5billion) within ten calendar days
from the date of its receipt of a demand letter conveying its
acknowledgment as winner.

But,
following a request for 30 days extension to enable it mobilise funds
for the transaction, the National Council on Privatization (NCP) on
November 5 granted the consortium 20 days extension, which BPE
spokesman, Chukwuma Nwoko, said was to help the consortium “clarify all
compliance and due diligence issues and also to remit the funds into
BPE’s account.”

However,
contrary to high expectations that the payment would be done on or
before the deadline yesterday, NEXT gathered that the consortium was
granted another extension till December 23 to pay up.

Extension granted

The
director general, BPE, Bolanle Onagoruwa, said in a telephone interview
in Abuja that the extension was granted by the vice president and
chairman of the privatization council, Namadi Sabo, based on the
recommendation of the management technical committee of the NCP “so as
not to fall into any technical trap.”

“They
(New Generation Consortium) have an extension from the Presidency till
22nd of December, 2010. The issue is that the letter that they got was
dated 19th of November. But, we (BPE) immediately announced the
extension on the 5th of November based on a verbal approval from the
vice president as the chairman of the National Council on Privatization
(NCP). The formal approval did not come until the 19th of November, and
they collected the letter approving the extension on the 23rd of
November.

“Basically,
what they (New Generation Consortium) were saying was that their
bankers wanted a written confirmation, as they could not rely on verbal
directives, to continue the process. That is why they wanted the
extension to start counting from the 23rd of November, when they
actually received the letter.

“Everybody
is anxious to see the transaction come to an end, so that we can pay
NITEL staff who have been pressurising for their entitlements,” Mrs.
Onagoruwa said.

Too long a transaction

Executive
secretary, Africa Telecom Development Initiative (ATDI), Kenneth
Ugbechie, told NEXT that most Nigerians are anxious for the transaction
to be brought to a close as soon as possible.

“Everybody’s
expectation is that they (New Generation) take advantage of the
deadline and pay up. The transaction has dragged on for far too long,
to the point that it has become an embarrassment to everyone, including
the government itself,” Mr. Ugbechie said.

According
to him, the negligence NITEL has suffered over the years has inflicted
grievous injuries on the workers in a manner that has affected their
families, psyche, and personality, adding that apart from not getting
any other jobs since they lost the ones they had in NITEL, many of the
workers are entitled to some unsettled benefits.

“What most people are asking for is government to ensure that the old
NITEL workers are paid off, so that the new owners can start on a clean
slate; so that tomorrow nobody can carry placards to the gates of the
new owners protesting their unpaid benefits,” Mr. Ugbechie said.

Bank customers are still worried at returning queues to the banking halls and the pace at which they are attended to.

The apprehensive
customers who spoke to our reporter expressed irritation that despite
the efficiency that technology brings, banks are yet to get it right in
rendering swift service. The introduction of Automated Teller Machines
(ATM), e-banking, and all other banking alternatives have done little
to decongest the banking halls.

Dayo Aribigbe, a bank customer, said he stood in a queue in one of Nigeria’s banks for hours.

“Our banking system
in Nigeria is so poor. There is a need for a change. I can’t imagine
myself standing for hours in the bank’s branch at Abule Egba. Please,
we need solution providers,” he said.

“I thought they
said all this e-payment stuff would help reduce these queues? I can’t
seem to see how much these have helped. Besides, is it the e-payment
stuff that would also train the bank staff to be polite? asked Mercy
Atoyebi, another bank customer.

Cecelia Babatunde said she dreads doing transaction with a particular new generation bank.

“The thing is I
don’t know what the problem is. To me, I think they are just not
efficient, or maybe it is shortage of staff, I really don’t get it. GTB
too is another bank that is struggling to manage its customer turnout,
but I think they are better. I think their own case is that of having
to manage increasing customer base,” Ms. Babtunde said.

Visits to some banks in Lagos confirmed customers’ complaints of longer time spent in performing transactions.

No need to trade blame

While some
customers said the massive bank layoff may have been responsible for
the queues, some finance experts are of the view that these
organisations would have to rise up to the challenge of efficiently
utilising the available hands working with them at the moment.

A source at Zenith
Bank said the pressure on the available staff is much, as new customers
patronise the banks and no other employment is made to balance the
additional customer flow.

“In some instances,
some people even go on maternity leave, some on their usual annual
leave, and no one is brought to cover in for them,” the source said.

Experts say
employers and decision makers in human capital management functions
must seek new ways to build successful organisations with high
performing employees, amidst declining training budgets, wages and
remuneration packages.

Performing employees

Emmanuel Tarfa, a
human resource manager with Ciuci Consulting, a management consulting
firm, said the ability of a company to develop high performing
employees is a direct function of the company‘s human resource strategy.

“In order to
improve the productivity of employees within organisations, we have
identified three areas that companies in Nigeria should focus on. They
include continuous training and development, improving working
conditions and the atmosphere of the work environment, implementing the
appropriate performance management system, among others,” Mr. Tarfa
said.

According to him,
banks and other organisations facing performance challenges must focus
on personal development of employees, cultivating a culture of good
leadership and mentoring in the workplace, and a fair compensation plan.

“From the CEO, to
the managers, down to the other supervisors and managers, there should
be an understanding of what is required at each level, including
subordinate levels, and training programmes should be designed based on
this,” he added.

Akinbamidele
Akintola, a research analyst at Renaissance Capital, an investment
bank, said banks need to ensure that they deploy robust information
technology facilities to support an increase in customers’ activities
in the banking halls, and adequate human capital development for its
staff, in terms of skills.

“I don’t believe these long queues are here to stay. They would
disappear in the near future, as high standard customer service is what
would become a distinguishing factor, especially for end users of
banking products and services,” he added

Wearing sunglasses,
a gold necklace, and sitting outside his home in a village in the Niger
Delta, ex-militant leader, Ateke Tom, is happy for the army to take
over what were once training camps for his fighters.

Along with other
former gang leaders who accepted a government amnesty last year, Tom
now finds himself working with the security forces he long fought in
Nigeria’s southern oil region, trying to persuade those still carrying
arms to surrender.

“They are
criminals, and I heard that those boys that were disturbing (things) in
Rivers State have been arrested,” Tom said, referring to a gang leader
who had been holding 19 hostages until they were freed by the army last
month.

“I thank God they have been arrested. They were just criminals, nothing more,” he said.

Tom was a field
commander for the Movement for the Emancipation of the Niger Delta
(MEND), the main militant group responsible for years of deadly
attacks, which at their peak, shut down more than a quarter of
Nigeria’s oil output.

Oil production has
partially recovered, as infrastructure remains damaged and Nigeria is
now pumping more than 2 million barrels per day compared with lows of
1.5 million in early 2006 when MEND burst onto the scene. Crude output
is still well below the 2.4 million bpd averaged in 2005.

Along with fellow
MEND commanders, Farah Dagogo and Boyloaf, who helped the armed forces
secured the release of the 19 hostages last month, he accepted an
amnesty brokered last year partly by President Goodluck Jonathan.

Security experts
working to protect Africa’s biggest oil and gas industry say the
involvement of former rebel leaders in the military efforts to flush
out remaining armed gangs in the creeks of the delta could be a turning
point.

But they also
caution it is virtually impossible to secure hundreds of kilometres of
exposed pipeline which criss-cross remote communities in the vast
wetlands region, meaning supply disruptions are likely to persist.

Much is at stake

Jonathan is the
first head of state from the Niger Delta and resurgent unrest risks
undermine his credibility ahead of elections next April. His
administration is keen to show it has the security situation under
control.

But disputes
between international oil companies and local youth demanding security
contracts, jobs, or simply trying to siphon off stolen oil, are common
and it takes little more than home-made explosives to rupture a
pipeline.

The Niger Delta
Liberation Force (NDLF), a newly emerging faction run by gang leader,
John Togo, said on Monday it had sabotaged a pipeline belonging to
state oil firm, NNPC, although there was no independent confirmation.

Royal Dutch Shell
declared force majeure last month on its Bonny Light oil exports –
freeing it from contractual deliveries due to actions beyond its
control – after a pipeline was damaged by oil theft.

The amnesty had
brought more than a year of relative peace, until the recent spate of
kidnappings, but critics question whether it is sustainable, saying
those who surrendered weapons are only happy while they are being paid.

The
director-general of the Budget Office of the Federation, Bright Okogu,
yesterday, blamed ministries, departments and agencies as well as the
National Assembly for delaying annual appropriations. Speaking at the
second Economic Policy and Fiscal Strategy Seminar in Abuja, Mr. Okogu
said that the MDAs focused more attention on revenues allocated to them
than the value to the people. Mr. Okogu also noted the difficulties in
operating fiscal federalism in the country, saying that it has been
hard for the government to implement the provisions of the Fiscal
Responsibility Bill the way it was conceptualized because of states’
insistence that the federal government cannot make laws for them,
particularly on issues that have to do with revenue allocation.

“The
deterioration in the fiscal discipline in recent times could be
attributed partly to the insistence by the states on the constitution,
particularly that all monies collected must be paid into the federation
accounts, that even savings in the excess crude oil account belongs to
them, and they should be allowed to share it as and when they feel the
need to,” he said. According to Mr. Okogu, in an environment where
stakeholders always have to restructure and reconcile the difference in
figures between what the executive proposed in the Appropriation Bill
sent to the National Assembly and what comes out as the final figure
included in the Act.

Challenging limit

Former
minister of finance, Mansur Mukhtar, also said that political
pressures, particularly from states, to share monies from the excess
crude account and to raise the benchmark oil price, as well as the
strong interests of the lawmakers to promote constituency projects,
also affected the budget process.

“Even
within the ministries, the budget process has always been characterized
by competition in the allocation of resources,” he said. “It is
difficult to insulate the system from these pressures. But it is all
about the ability to reach a consensus through interaction and dialogue
that is important.”

Defective structure

The
chairman of the House Committee on Finance, John Enoh, called for the
engagement of the lawmakers in the budget preparation process to avoid
discrepancies that resulted in long delays in appropriation.

Following the
recent extension of trading period at the Nigerian Stock Exchange (NSE)
to improve market activities, analysis showed that some sectors of the
NSE have improved significantly in their performances.

A market assessment
carried out by finance experts at Proshare Nigeria Limited, an
investment advisory firm, on Thursday, revealed that five sectors of
quoted equities at the Exchange witnessed growth in value.

The figures traded
in the following sectors, when compared with the average figures
recorded before extended trading hours, showed that the Foreign
Listings sector had 2,799 percent value growth; Engineering Technology
sector, 1,150 percent; Breweries, 935 percent; Food/Beverages, 541.51
percent; and Mortgage, 327 percent value growth.

The Interim
Administrator of the NSE, Emmanuel Ikazoboh, had on Monday, when the
new trading period started, said the extension “was one of the
strategic moves by the leadership of the NSE to reposition the market
for enhanced competitiveness, which would give foreign investors,
especially those in the United States of America, opportunity to
participate in the Nigerian market.”

Decline continues

Meanwhile, the
decline in equities’ market capitalisation at the Exchange continued on
Thursday as about N26 billion was lost, reflecting 0.32 percent
downturn. It had on Wednesday gained over N14 billion.

The market
capitalisation closed yesterday’s transaction at N7.859 trillion from
Wednesday’s figure of N7.885 trillion. The NSE All-Share Index also
shed 79.89 units or 0.32 percent, down from 24,681.17 basis points to
close at 24,601.28.

Ecobank
Transnational Incorporation, the only traded stock in the Foreign
Listings sector, ranked as the most traded stock on Thursday with
29.511 million units, followed by Dangote Sugar, Guaranty Trust Bank,
and Aso Savings and Loans.

The research team
at Access Bank said the recent wobbly performance been witnessed in the
stock market “can be partly attributed to decline in investors’
optimism about a recovery, as well as poor financial results of some
blue chip companies.” They said that the capital market can still
exhibit a “coiled market” tendency, with the current low equity prices
capable of pushing the index to a higher level.

“We are cautiously
optimistic that the recent drop in share prices to relatively low
levels may stimulate another round of purchase of stocks and then cause
the All-Share Index to appreciate, amid expected improvement in banks’
balance sheets as AMCON commences operation,” they added.

Low gainers

The number of
gainers at the close of trading session closed lower on Thursday at 21
stocks, as against the 24 gainers recorded previous day; while losers
closed higher at 41 positions, compared with the 37 recorded on
Wednesday.

The Banking sector
led the market transaction volume yesterday with 126.29 million units
valued at N1.08 billion, as against the 155.56 million units valued at
N1.25 billion recorded the preceding day.

The volume recorded
in the sector was driven by transaction in the shares of Guaranty Trust
Bank, Zenith Bank, First Bank, FinBank, and Fidelity Bank. The total
volume of 68.35 million units valued at N774.84 million traded in the
shares of the five stocks accounted for 27.38 percent of the entire
market volume.

Promoters of some
microfinance banks whose licences were recently revoked by the Central
Bank of Nigeria (CBN) want their customers to hasten the process of
verification to enable their being paid on time.

Some of them who
spoke to our reporter said the payment of insured deposits to their
customers would depend on how fast the verification is completed. The
Nigeria Deposit Insurance Corporation (NDIC), the nation’s deposit
insurer, would only pay affected customers who have been verified.

Ayo Akinleyure,
chairman of Allover Microfinance Bank located at Agege, Lagos State,
said depositors need to take the issue of account verification
important, to hasten the receipt of their funds. “Bring your papers for
verification. Once it is verified, payment can be made,” he said.

A staff of Allstar
Microfinance Bank located at Ijeshatedo, also in Lagos, said the bank
has started its verification exercise. According to him, the major
requirements include customers’ bank documents, passbook, cheque books,
identity cards, and all other documents that would be required to
verify the authenticity of the customers.

“I do not think
they are paying this week, but the process right now is that customers
should come to the bank and have their accounts verified. We have to be
certain that you have an account with the bank,” he added.

Last week, the
spokesperson of the NDIC, Hadi Birchi, said the payment of funds to
depositors of the affected microfinance banks would begin on Monday,
6th of December.

“We would begin
payment on Monday. That is all I can say for now,” he said, even though
he didn’t specify the procedure for the payment.

The Central Bank of
Nigeria in October, revoked the operating licences of 224 microfinance
banks that were found to be ‘terminally distressed’ and ‘technically
insolvent’ and/or had closed shop for at least six months, after a
target examination was conducted on 820 micro finance banks across the
country.

Shortly after that,
it stated that it had granted provisional approval for new licences to
about 121 of the 224 microfinance banks whose licences were earlier
revoked, subject to the fulfilment of some specific requirements within
three months.

According to the
Central Bank, “Those granted these provisional approvals are those that
had made fresh injection of capital and made significant loan recovery,
as confirmed by a recent capital verification exercise.”

Prevention, instead of cure

The Central Bank
has stated that it is putting in place other measures to ensure that
microfinance banks in Nigeria live up to the overriding objectives of
fostering financial inclusion, fighting poverty, and empowering
low-income and vulnerable groups.

“Microfinance
banking is a regulated activity and only those that are prepared to
play by the rules and comply with the appraisal guidelines, prudential
requirements, and extant laws will be allowed to remain in the field,”
Mohammed Abdullahi, the spokesperson of the Central Bank said.

According to Mr.
Abdullahi, no depositor would lose their money in the banks that were
closed down. He stated that even though the NDIC guarantees a payment
of not more than N100, 000 to each depositor, as provided by its
insurance scheme, the Central Bank would assist the banks to
aggressively recover their portfolio of nonperforming loan exposure
amounting to about N20 billion, which may also be used to offset their
debts to customers.

It is expected that
the Central Bank would progress on its promise to review the
microfinance policy framework, the introduction of a new operational
template to benchmark microfinance banking, capacity building to
develop a critical mass of knowledge and skill, human resources, as
well as examining the possibility of introducing a Micro, Small and
Medium Enterprise (MSME) fund to catalyse a sustainable development of
the microfinance space.

Investors at the
Nigerian Stock Exchange recorded a total loss of N74.175 billion at the
close of trading activities in November. The drop in value was
attributed to the decline in equity prices as investors sought to take
quick profit.

Meanwhile, the
research team at GTI Capital, a stock broking firm, attributed the
decline to the price valuation process to be adopted by the Asset
Management Company of Nigeria (AMCON).

“The bull’s pace
immediately slowed down and almost all stock, especially those in the
banking sectors, and trading above the calculated rescue price, have
dropped below the said prices, while those trading below the calculated
rescue prices find it difficult to hit such prices,” the team said.

According to the
report, “the market may not do any good return until AMCON takes off.”
The market value of the 216 listed equities, which opened the month at
N7.982 trillion, closed on the last trading day of November at N7.908
trillion, reflecting N74.175 billion losses or a 0.93 percent decline.
The value of the listed equities accounted for 79.04 percent of the
total market capitalisation of the 263 quoted securities value
(including bonds) at N10.015 trillion.

Also, the Exchange
All-Share Index (ASI), which opened at 25,042.16, closed at 24,764.65.
This shows a decline by 277.54 points or 1.11 percent during the month.

The Exchange’s
strategy and business development department said, “The stock market
performance in November was largely unsatisfactory,” adding that the
decline in market capitalisation “can be attributed largely to the drop
in equity prices and the delisting of one matured Federal Government of
Nigeria bond.”

High turnover, low value

The market recorded
a high turnover of 7.43 billion shares, valued at N60.34 billion in
121,531 deals during November, in contrast to a total of 6.71 billion
shares, valued at N90.6 billion, exchanged during October in 117,203
deals.

Hence, traded
volume and number of deals increased by 10.8 percent and 3.7 percent
respectively, while the value traded dropped by 33.4 percent. Last
month, volume and value of trades rose by 39 percent and 92 percent,
respectively.

Aggregate stock
market turnover between January and November 2010 were 86.43 billion
shares, valued at N730.8 billion, exchanged in 1,799,081 deals. In the
comparable period during 2009, the market recorded turnover of 95.3
billion shares, valued at N638.11 billion, in 1,619,385 deals.

Active subsector

Measuring by
turnover volume, the Banking subsector was the most active in November
with traded volume of 4.95 billion shares, valued at N35.51 billion,
exchanged in 70,864 deals; while the Insurance subsector was second
with traded volume of 801.52 million shares, valued at N580.2 million,
exchanged in 5,707 deals.

The Information
Communication Technology subsector was third with transaction volume of
254.7 million, valued at N498.4 million, traded in 472 deals, while the
Mortgage Companies subsector was fourth with transaction volume of
224.4 million shares, valued at N156.9 million, traded in 998 deals.

The Maritime
subsector was fifth with transaction volume of 186.62 million shares,
valued at N238.32 million, traded in 2,377 deals.

The five subsectors
accounted for 6.42 billion shares, valued at N37 billion, exchanged in
80,418 deals. In October, the five most active equity subsectors
accounted for 5.65 billion shares, valued at N44.31 billion, exchanged
by investors in 86,292 trades.

Bond Trading

Over-The-Counter
(OTC) bond market, a turnover of 730.82 million units worth
N750.91billion in 5,524 deals was recorded in November 2010, in
contrast to a total of 1.1 billion shares, valued at N1.036 billion,
exchanged during the preceding month in 8,004 deals.

The most active
bond, in terms of volume, was the 10.00 percent Federal Government of
Nigeria (FGN) Bond July 2030 (formerly 7th FGN Bond 2030 Series 3) with
traded volume 205.56 million units, valued at N155.8 billion, in 1,595
deals.

This was followed
by 4.00 percent FGN April 2015 (Formerly 7th FGN Bond 2015 Series 2)
with a traded volume of 151.7 million units, valued at N113.1 billion
in 1,250 deals. Only 26 of the available 34 FGN Bonds were traded
during the month, compared with the 29 in the preceding month.

Between January and
November 2010, total transactions on FGN Bonds through the OTC were
13.33 billion units, valued at N14.91 trillion, in 134,684 deals.
During the same period in 2009, total transactions on FGN Bonds through
the OTC were 15 billion, valued at N15.95 trillion, in 109,588 deals.

Following the
recent extension of trading period at the Nigerian Stock Exchange (NSE)
to improve market activities, analysis showed that some sectors of the
NSE have improved significantly in their performances.

A market assessment
carried out by finance experts at Proshare Nigeria Limited, an
investment advisory firm, on Thursday, revealed that five sectors of
quoted equities at the Exchange witnessed growth in value.

The figures traded
in the following sectors, when compared with the average figures
recorded before extended trading hours, showed that the Foreign
Listings sector had 2,799 percent value growth; Engineering Technology
sector, 1,150 percent; Breweries, 935 percent; Food/Beverages, 541.51
percent; and Mortgage, 327 percent value growth.

The Interim
Administrator of the NSE, Emmanuel Ikazoboh, had on Monday, when the
new trading period started, said the extension “was one of the
strategic moves by the leadership of the NSE to reposition the market
for enhanced competitiveness, which would give foreign investors,
especially those in the United States of America, opportunity to
participate in the Nigerian market.”

Decline continues

Meanwhile, the
decline in equities’ market capitalisation at the Exchange continued on
Thursday as about N26 billion was lost, reflecting 0.32 percent
downturn. It had on Wednesday gained over N14 billion.

The market
capitalisation closed yesterday’s transaction at N7.859 trillion from
Wednesday’s figure of N7.885 trillion. The NSE All-Share Index also
shed 79.89 units or 0.32 percent, down from 24,681.17 basis points to
close at 24,601.28.

Ecobank
Transnational Incorporation, the only traded stock in the Foreign
Listings sector, ranked as the most traded stock on Thursday with
29.511 million units, followed by Dangote Sugar, Guaranty Trust Bank,
and Aso Savings and Loans.

The research team
at Access Bank said the recent wobbly performance been witnessed in the
stock market “can be partly attributed to decline in investors’
optimism about a recovery, as well as poor financial results of some
blue chip companies.” They said that the capital market can still
exhibit a “coiled market” tendency, with the current low equity prices
capable of pushing the index to a higher level.

“We are cautiously
optimistic that the recent drop in share prices to relatively low
levels may stimulate another round of purchase of stocks and then cause
the All-Share Index to appreciate, amid expected improvement in banks’
balance sheets as AMCON commences operation,” they added.

Low gainers

The number of
gainers at the close of trading session closed lower on Thursday at 21
stocks, as against the 24 gainers recorded previous day; while losers
closed higher at 41 positions, compared with the 37 recorded on
Wednesday.

The Banking sector
led the market transaction volume yesterday with 126.29 million units
valued at N1.08 billion, as against the 155.56 million units valued at
N1.25 billion recorded the preceding day.

The volume recorded
in the sector was driven by transaction in the shares of Guaranty Trust
Bank, Zenith Bank, First Bank, FinBank, and Fidelity Bank. The total
volume of 68.35 million units valued at N774.84 million traded in the
shares of the five stocks accounted for 27.38 percent of the entire
market volume.

Promoters of some
microfinance banks whose licences were recently revoked by the Central
Bank of Nigeria (CBN) want their customers to hasten the process of
verification to enable their being paid on time.

Some of them who
spoke to our reporter said the payment of insured deposits to their
customers would depend on how fast the verification is completed. The
Nigeria Deposit Insurance Corporation (NDIC), the nation’s deposit
insurer, would only pay affected customers who have been verified.

Ayo Akinleyure,
chairman of Allover Microfinance Bank located at Agege, Lagos State,
said depositors need to take the issue of account verification
important, to hasten the receipt of their funds. “Bring your papers for
verification. Once it is verified, payment can be made,” he said.

A staff of Allstar
Microfinance Bank located at Ijeshatedo, also in Lagos, said the bank
has started its verification exercise. According to him, the major
requirements include customers’ bank documents, passbook, cheque books,
identity cards, and all other documents that would be required to
verify the authenticity of the customers.

“I do not think
they are paying this week, but the process right now is that customers
should come to the bank and have their accounts verified. We have to be
certain that you have an account with the bank,” he added.

Last week, the
spokesperson of the NDIC, Hadi Birchi, said the payment of funds to
depositors of the affected microfinance banks would begin on Monday,
6th of December.

“We would begin
payment on Monday. That is all I can say for now,” he said, even though
he didn’t specify the procedure for the payment.

The Central Bank of
Nigeria in October, revoked the operating licences of 224 microfinance
banks that were found to be ‘terminally distressed’ and ‘technically
insolvent’ and/or had closed shop for at least six months, after a
target examination was conducted on 820 micro finance banks across the
country.

Shortly after that,
it stated that it had granted provisional approval for new licences to
about 121 of the 224 microfinance banks whose licences were earlier
revoked, subject to the fulfilment of some specific requirements within
three months.

According to the
Central Bank, “Those granted these provisional approvals are those that
had made fresh injection of capital and made significant loan recovery,
as confirmed by a recent capital verification exercise.”

Prevention, instead of cure

The Central Bank
has stated that it is putting in place other measures to ensure that
microfinance banks in Nigeria live up to the overriding objectives of
fostering financial inclusion, fighting poverty, and empowering
low-income and vulnerable groups.

“Microfinance
banking is a regulated activity and only those that are prepared to
play by the rules and comply with the appraisal guidelines, prudential
requirements, and extant laws will be allowed to remain in the field,”
Mohammed Abdullahi, the spokesperson of the Central Bank said.

According to Mr.
Abdullahi, no depositor would lose their money in the banks that were
closed down. He stated that even though the NDIC guarantees a payment
of not more than N100, 000 to each depositor, as provided by its
insurance scheme, the Central Bank would assist the banks to
aggressively recover their portfolio of nonperforming loan exposure
amounting to about N20 billion, which may also be used to offset their
debts to customers.

It is expected that
the Central Bank would progress on its promise to review the
microfinance policy framework, the introduction of a new operational
template to benchmark microfinance banking, capacity building to
develop a critical mass of knowledge and skill, human resources, as
well as examining the possibility of introducing a Micro, Small and
Medium Enterprise (MSME) fund to catalyse a sustainable development of
the microfinance space.

Wearing sunglasses,
a gold necklace, and sitting outside his home in a village in the Niger
Delta, ex-militant leader, Ateke Tom, is happy for the army to take
over what were once training camps for his fighters.

Along with other
former gang leaders who accepted a government amnesty last year, Tom
now finds himself working with the security forces he long fought in
Nigeria’s southern oil region, trying to persuade those still carrying
arms to surrender.

“They are
criminals, and I heard that those boys that were disturbing (things) in
Rivers State have been arrested,” Tom said, referring to a gang leader
who had been holding 19 hostages until they were freed by the army last
month.

“I thank God they have been arrested. They were just criminals, nothing more,” he said.

Tom was a field
commander for the Movement for the Emancipation of the Niger Delta
(MEND), the main militant group responsible for years of deadly
attacks, which at their peak, shut down more than a quarter of
Nigeria’s oil output.

Oil production has
partially recovered, as infrastructure remains damaged and Nigeria is
now pumping more than 2 million barrels per day compared with lows of
1.5 million in early 2006 when MEND burst onto the scene. Crude output
is still well below the 2.4 million bpd averaged in 2005.

Along with fellow
MEND commanders, Farah Dagogo and Boyloaf, who helped the armed forces
secured the release of the 19 hostages last month, he accepted an
amnesty brokered last year partly by President Goodluck Jonathan.

Security experts
working to protect Africa’s biggest oil and gas industry say the
involvement of former rebel leaders in the military efforts to flush
out remaining armed gangs in the creeks of the delta could be a turning
point.

But they also
caution it is virtually impossible to secure hundreds of kilometres of
exposed pipeline which criss-cross remote communities in the vast
wetlands region, meaning supply disruptions are likely to persist.

Much is at stake

Jonathan is the
first head of state from the Niger Delta and resurgent unrest risks
undermine his credibility ahead of elections next April. His
administration is keen to show it has the security situation under
control.

But disputes
between international oil companies and local youth demanding security
contracts, jobs, or simply trying to siphon off stolen oil, are common
and it takes little more than home-made explosives to rupture a
pipeline.

The Niger Delta
Liberation Force (NDLF), a newly emerging faction run by gang leader,
John Togo, said on Monday it had sabotaged a pipeline belonging to
state oil firm, NNPC, although there was no independent confirmation.

Royal Dutch Shell
declared force majeure last month on its Bonny Light oil exports –
freeing it from contractual deliveries due to actions beyond its
control – after a pipeline was damaged by oil theft.

The amnesty had
brought more than a year of relative peace, until the recent spate of
kidnappings, but critics question whether it is sustainable, saying
those who surrendered weapons are only happy while they are being paid.