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The Capital Market
Committee (CMC) has approved the proposal of The Nigerian Stock
Exchange (NSE) for extension of the trading hours on the floors of The
Exchange by two hours from 9.30 am to 2.30 pm, as against the current
time of 9.30 to 12.30 pm. The extension takes effect from tomorrow.

Speaking on the
issue yesterday, the interim administrator of The Nigerian Stock
Exchange, Emmanuel Ikazoboh, said the approval was a right step in the
right direction, stressing that extension of the trading hours was one
of the strategic moves by the leadership of the Exchange to reposition
it for enhanced competitiveness.

He further said
that the extension would give foreign investors, especially those in
the United States of America (USA), opportunity to participate in the
Nigerian market.

The CMC, which meets every quarter, is an industry-wide committee
comprising members of the Securities and Exchange Commission (SEC),
NSE, representatives of capital market operators, and other capital
market operators.

Egypt’s current
account deficit widened to $802.2 million in the July-September
quarter, from a deficit of $493.4 million in the same quarter a year
earlier, the Central Bank said on Tuesday.

The balance of
payments registered a surplus of 14.7 million versus a surplus of $2.05
billion in July-September 2009. Direct foreign investment during the
quarter fell to $1.60 billion from $1.73 billion.

Kenya’s Central
Bank said on Tuesday it would be revising its monetary policy targets
after signs that two years of monetary easing had lowered commercial
lending rates and increased loan volumes.

Central Bank of
Kenya governor, Njuguna Ndung’u, said that although the financial
sector was deepening, there was scope for banks to raise credit
further. The bank’s Monetary Policy Committee (MPC) cut its benchmark
lending rate by 300 basis points between late 2008 and July this year.

It has since left
the rate unchanged at 6 percent, saying growth is on track,
inflationary risk is minimal, and credit is growing.

“The market is
deepening very fast. Everybody is bringing back money into the market,
it is improving the transmission mechanism of monetary policy. We have
to revise our framework in line with that,” Mr. Ndung’u told a press
conference.

Nigeria’s private sector credit is gradually improving, according to the latest data released by the Central Bank.

Data from the
regulatory body says private sector credit growth rebounded marginally
in October, reaching 6.9 percent year-on-year, from 5.3 percent in
September and 4.5 percent in August.

In nominal terms,
credit to the private sector reached N10.5 trillion in October, from
N10.3 trillion in September, N10.1 trillion in August, and N10.2
trillion at the end of 2009.

Finance experts say
while it appears that private sector credit has only moved up 3.2
percent year to date, its month-on-month growth rate has been in
positive terrain for three consecutive months (for the first time since
December 2009), at 1.9 percent in October, from 2.2 percent in
September and 2 percent in August.

Samir Gadio,
emerging markets strategist, Standard Bank, said one of the reasons
behind the substantial decline in annual growth rates is the high base
effect in the data.

“Private sector
growth expanded 84.8 percent year-on-year in 2008, predominantly due to
margin lending-related activities. The combination of a high base
effect and the continued deleveraging in the financial system since
2009, as well as a sharp deceleration in lending associated with the
structural issues in the banking system and increased risk aversion,
could only result in a sustained fall in annual credit growth figures,
until the end of the first half of the year,” Mr. Gadio said.

Experts say some technical reforms will be needed to boost retail lending, despite the significant improvement.

Mr. Gadio says the
tightening in monetary conditions by the Central Bank, following the
Monetary Policy Committee held on September 21 has not helped the
private sector credit outlook, adding that Sanusi Lamido Sanusi, the
Central Bank governor, recently indicated that he did not expect an
improvement in lending in 2010, at least until the banks are
restructured.

Yes, more loans are available

Bashir Borodo,
president of the Manufacturers Association of Nigeria (MAN), confirmed
that access to loan in the sector has improved.

“Yes, I must say
that access to loans has improved. This is because there is more
liquidity in the system, partly because of the direct intervention of
the Central Bank in terms of its guaranteed loans. Right now, we are
very optimistic that this change would continue this year and in 2011,”
Mr. Borodo said.

A source at
Intercontinental Bank said the improvement could be traced to the
special funds deployed by the Central Bank to the private sector.

“We should remember
that the Central Bank gave money for loans for those sectors, and they
are guaranteed. The banks have no option than to put these funds up for
loans. Also, this is the year’s end, many companies have to produce
more to meet year end demands and this means they would have to make
more demands for loans and fortunately, there are more guaranteed funds
from the regulatory body,” he added.

“Risks are better
evaluated now. Because of what banks have faced, they have strengthened
their risk management departments with better and more hands. Also, the
cost of money is reducing. There are now more willing deposits, current
and savings account, and this encourages the banks to lend now,” the
source said.

Nigeria expects its
budget deficit to widen to 6.1 percent of GDP this year, more than
double the level set under a fiscal responsibility act three years ago,
as government spending rises ahead of elections next April.

Revenue shortfalls
from the oil and gas sector, unexpected wage increases, and election
costs will contribute to the widening deficit, Finance Minister,
Olusegun Aganga, said in an annual briefing on sub-Saharan Africa’s
second biggest economy.

Government revenue
is projected at 3.18 trillion naira, with expenditure expected to be
5.16 trillion, Mr. Aganga said in the review, released on Monday.

Analysts have
expressed concern about the state of public finances in Africa’s most
populous nation, as presidential, parliamentary, and state governorship
elections approach.

Recurring
expenditure accounts for more than half of the country’s overall
spending, meaning it is paying more to keep government running than it
is investing in badly-needed infrastructure and other capital projects.

Government
borrowing has risen sharply, increasing by more than 50 percent since
the start of the year, compared to private sector credit growth of just
three percent over the same period.

The government has
said it will also issue bonds to pay workers at former state telecoms
company, Nitel, and to fund part of the electoral commission’s budget,
further increasing domestic debt.

Still, the head of
the debt management office has pointed to a debt-to-GDP ratio of 16
percent that is expected to remain stable next year, depending on the
rate of economic growth, suggesting Nigeria could easily raise more
debt if needed.

But authorities
have also spent billions of dollars of oil savings since the start of
the year alone, and seen foreign exchange reserves fall 20 percent
year-on-year by mid-November to $34 billion.

Ratings agency,
Fitch, last month, cited those factors when it cut its sovereign credit
outlook for Nigeria to negative from stable.

Oil savings dwindle

The Excess Crude
Account (ECA), into which Nigeria saves revenues above a benchmark oil
price, has dwindled from $20 billion at the start of late President
Umaru Yar’Adua’s term in 2007, to around $4.4 billion when President
Goodluck Jonathan took over in May, and less than $1 billion now.

The government says
the ECA has served its purpose as an account to be used to protect
Nigeria against a fall in commodities prices or a global downturn.

But analysts say
the reduction is alarmingly sharp during a period of relatively high
oil prices – Thursday’s price of $85 a barrel is a 40 percent premium
on the $60 assumption in the 2010 budget – and a recovery in Nigerian
oil production.

Mr. Aganga said
last week Nigeria’s foreign reserves were well below where they ought
to be, and that a plan was in place to restore them.

He has also said
spending for next year will be capped at 4.56 trillion naira, as the
government seeks to rein in expenditure over the next three years.

Parliament approved spending of more than 4.8 trillion naira for 2010, up more than 50 percent on the previous year.

The much awaited
sale of seven rescued banks is gradually unfolding, as the various
parties put finishing touches to the deal. While some prospective
financiers, particularly foreign investors, don’t want to stake their
funds, some local entities are making efforts to tidy up loose ends.

After injecting
N627 billion to resuscitate Intercontinental, Oceanic, Finbank, Union
Bank, Afribank, Bank PHB, and Spring banks last year, the Central
Bank’s plan is to allow new core investors that would entrench a new
culture of corporate governance, which the regulator said was lacking.

After several
months of negotiation, Lamido Sanusi, the Central Bank governor, said
recently that bids have been received for the affected banks from two
foreign institutions and some local banks. However, no foreign
institution has made its intention pubic. FirstRand, the South African
bank, regarded as one of the bidders, has said it is not bidding.

No foreign interest

Sam Moss,
spokesperson for Firstrand, said the institution is not interested in
any of the rescued banks, even though it has already registered its
presence in the country’s financial sector. JP Morgan, another foreign
financial institution, has also said it is not interested in any of the
rescued institutions.

“While we are not
purchasing a local bank, we do have relationship with some of them and
helping to build capacity,” said Tosin Adewuyi, JP Morgan’s senior
country officer in Nigeria.

However, the
International Finance Corporation (IFC), the investment arm of the
World Bank, may be backing the sale of the rescued banks, with the
recent signing of cooperation agreement with First City Monument Bank
(FCMB). The agreement, which comes with a $70 million investment in the
bank, also includes a clause for future partnership. A statement by the
bank says the areas of partnership include “acquisition finance of a
distressed bank.” FCMB is one of the bidders for Finbank.

IFC support

IFC’s country
manager for Nigeria, Solomon Adegbie-Quaynor, said, “IFC is committed
to supporting the full recovery of Nigeria’s banking system, and our
investment in First City Monument Bank reflects this strategy.”

“The CBN cannot
sell any bank because it does not have the power to sell what does not
belong to it. The only instrument is for the CBN to liquidate and
transfer to the Nigeria Deposit Insurance Corporation and these two
options will be too heavy considering the current condition of our
economy,” said Sunny Nwosu, coordinator of one of the numerous
shareholder groups recently.

Boniface Okezie,
another shareholders’ group coordinator, said pending court cases would
stall any attempt by the CBN to sell the banks. He said CBN has not
disclosed how much each of the banks require to recapitalise, which is
why the shareholders are in court to prevent the sale.

Mohammed Abdullahi,
CBN spokesperson, said so far, the banks were making appreciable
progress in reaching agreement with potential core investors.

“Individual banks
can tell you how far they have gone. They are talking with people, and
it has reached advanced stage,” he said.

He, however, said the banks are in a better position to talk on how far they have gone with the various bidders.

The
Federal Government yesterday defended its performance in implementing
the 2010 budget, saying that only 46.9 percent of the total
appropriation for its ministries, departments, and agencies has been
utilised till date.

Ibrahim
Dankwambo, the Accountant General of the Federation (AGF), said in
Abuja that this translated into only about N351.59 billion, out of
about N749.74 billion that was cash-backed for various projects
embedded in the 2010 budget.

Atiku
Abubakar, former vice president and Peoples Democratic Party (PDP)
presidential aspirant, recently stirred the hornet’s nest when he took
a swipe at the country’s economic health, accusing the present
administration of not implementing the 2010 budget.

Olusegun
Aganga, the finance minister, while debunking Mr. Atiku’s claims, noted
that the budget performance in the ministries, departments, and
agencies is expected to reach about 64.6 percent level by the end of
the third quarter of the year.

Notwithstanding,
the utilisation rate under the 2010 budget is generally considered very
low when compared to the N913.36 billion, or 76.6 percent achieved
under the 2009 budget last fiscal period.

Details
of the N4.6trillion 2010 budget, which was signed into law by President
Goodluck Jonathan on April 22, following a protracted disagreement with
members of National Assembly over certain inclusions in the original
appropriation, provided for a capital vote of over N1.7trillion (about
30 percent of the total budget outlay), with the balance meant to take
care of overheads.

Improved performance expected

But,
according to Mr. Dankwambo, government was optimistic that the
performance, in terms of the utilisation of the capital vote by the
ministries, departments, and agencies, would improve significantly
before the end of the year, pointing out that the low utilisation rate
was attributable to the political crisis that engulfed the country in
the wake of the ill-health of former President Umaru Yar Adua, which
culminated in his demise late last year.

“The
sum of N1.19 trillion was cash-backed in year 2009, of which N913.26
billion, or 76.6 percent was utilised. For 2010, the sum of N749.74
billion was cash-backed, of which N351.59 billion was utilised as at
30th October, 2010. This translates to a capital performance of 46.9
percent,” Mr. Dankwambo said.

He
described 2010 as a special year, considering, he said, the enormous
challenges government encountered in the course of inaugurating a new
president and reconstitution of a new Federal Executive Council (FEC),
arguing that the type of budget utilisation rate is not too bad,
considering the peculiar political challenges the country had.

On
the capacity of the ministries to utilise these balance of the funds
before the end of the year, Mr. Dankwabo said the issue was not in
their capacity to use the money, but on the type of projects the
appropriations were for, adding, “We are just entering the period of
dry season, with more companies awarded various contracts. So, in the
next few weeks, we will see improvements in the utilisation rate of the
capital votes.”

Also,
he said that the statutory allocation released by his office to the
three tiers of government between January and September totaled N2.7
trillion.

The Federal
Executive Council (FEC) has commended the Central Bank of Nigeria (CBN)
for the prompt release of a N199.67 billion credit facility to 516
manufacturers across the country.

The minister of
information and communications, Dora Akunyili, made the remark while
briefing State House correspondents at the end of the council’s weekly
meeting in Abuja on Wednesday.

Mrs. Akunyili said
the council made the commendation after the CBN governor, Sanusi Lamido
Sanusi, had briefed it on the performance of the nation’s economy in
the third quarter of 2010.

She said the credit
facility will be disbursed under the manufacturers’ SMEs Loan
Restructuring Refinancing Scheme, at a fixed interest rate of seven
percent.

The minister said
the CBN governor told the council that N130.99 billion of the amount
was disbursed through the Bank of Industry. She said the council was
also informed that there had been a steady growth in the nation’s GDP,
which continued to be driven largely by the non-oil sector,
particularly agriculture.

“The inter-bank rates and other money market rates, including
lending, also moderated. The foreign exchange market was substantially
stable, while the slow and steady recovery in the capital market
continues,” Mrs. Akunyili said.

InMobi, a fast
growing mobile ad network, has announced African results from its
study, ‘A Global Consumer View of Mobile Advertising’.

InMobi provides
advertisers and publishers a display mobile advertising platform,
reaching 50 million Africans through nearly three billion ad
impressions monthly. As a committed player in Africa, InMobi recognised
the need to provide the mobile industry a data-driven, distinctly
African consumer perspective on the state of mobile advertising. This
includes focus on Nigeria, where acceptance of mobile advertising is
the highest in the world at 76 percent; a key factor making Nigeria,
Africa’s fastest growing mobile market.

The survey, done in
partnership with digital marketing intelligence agency, ComScore,
interviewed 2,500 consumers in Nigeria, South Africa, and Kenya, and
discussed overall comfort with mobile ads, perceived benefits,
willingness to have ads, and interest in major brands across four
categories of automotive, travel, consumer electronics, and
entertainment.

James Lamberti, VP, global research & marketing at InMobi, said,
“Africans are among the most progressive in the world when it comes to
mobile advertising, and clearly ahead of consumers in Europe and the US
when it comes to adoption. As smart phone technology, 3G networks and
cost effective data plans take hold of the continent; a healthy market
today becomes an explosive market in the future,” Mr. Lamberti said.

Sterling Bank is
collaborating with Clickatell on CardGuard Fraud Protection Service. A
statement from the bank explained that the partnership emerged
following complaints of fraud by users of electronic payment systems –
debit cards and Automated Teller Machines (ATMs).

It said that
Sterling Bank is partnering Clickatell, a global leader in mobile
communications, which specialises in SMS messaging, to introduce
CardGuard Fraud protection service. The Sterling Bank’s CardGuard
incorporates a customer’s mobile phone into its network of services.

Banks across Africa
have tapped into the ubiquity of the mobile phone to interact with
their customers and enlist their help in monitoring card activity for
fraudulent charges, the statement added.

“With Sterling
CardGuard, Sterling Bank customers can now use their mobile phones to
freeze their account should they note a fraudulent withdrawal,” the
statement said.

“The mobile phone is a powerful customer service channel that helps
us respond immediately to our customers while providing an extra layer
of protection for them and for us, against fraudulent activities,” said
Davendra Puri, executive director, operations and technology.