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The market capitalisation of equities at the Nigerian Stock
Exchange (NSE) appreciated marginally by 0.08 percent at the close of trading
session last week, as against a decline of 0.06 percent recorded in the
preceding week.

The NSE market capitalisation of the 194 First-Tier equities
closed last Friday at N8 trillion after opening the week at N7.994 trillion,
reflecting N6 billion gains.

Meanwhile, about N5 billion was lost in the previous week. The
NSE All-Share Index in the week under review also rebounded by 0.08 percent or
21.6 units to close at 25,041.68 basis points from the 25,020.08 recorded at
the beginning of trading during the week. The Exchange has attributed the
marginal gains recorded to the reduction in the number of trading days. “The
stock market opened for three days as last Monday was declared a public holiday
by the federal government to commemorate Easter Monday celebration and Tuesday
was selected to hold the rescheduled State Governorship and House of Assembly
elections,” it said.

Analysts at GTI Capital, a stock broking firm, said the market
witnessed a two day upward rally last week while the rally came to a halt on
Friday “as portfolio investors balance their accounts for the usual month end
reports.” They said despite the significant loss in value in the NSE market
capitalisation, “other subsector gauges remain active.” In the mean time,
market watchers have advised investors to maintain value investing approach in
the coming weeks.

Gainers and Losers

The number of gainers in the week closed at 39 stocks compared
with the 56 stocks recorded in the previous week. Nestle Nigeria topped the
gainers chart for the week with five percent appreciations or N18.39 to close
at N386.22 per share. On the losers’ side, a total of 44 stocks recorded price
decline in the week compared with the 34 stocks that declined in the previous
week. Chemical and Allied Products topped the losers chart for the week with
49.9 percent depreciation to close at N20.99 per share.

A total of seven equity prices were adjusted during the week for
dividend and bonuses as recommended by their board of directors.

The total volume traded in the week closed at 0.92 billion units
valued at N9.72 billion compared with 2.26 billion units valued at N14.15
billion recorded in the previous week.

The banking subsector was the most active during the week,
measuring by turnover volume, with 626.41 million shares worth N6.01 billion.
Volume in the banking subsector was largely driven by activity in the shares of
Zenith Bank, United Bank for Africa, Guaranty Trust Bank and Access Bank.

Trading in the shares of the four banks accounted for 412.2
million shares, representing 65.80 percent and 44.57 percent of the subsector’s
turnover and total volume traded during the week, respectively.

The insurance subsector, boosted by activity in the shares of
NEM Insurance Company and AIICO Insurance followed on the week’s activity chart
with a subsector turnover of 77.61 million shares valued at N55.41 million.
Trading on NEM Insurance Company accounted for 49.03 percent of the insurance
subsector.

By most accounts, agriculture is the mainstay of most African
economies, as experts insist that Africa has what it takes to produce food for
its population of about one billion people and even export food to other
regions of the world. The continent, which is blessed with good weather and
geographical conditions, has the capacity to produce food to feed its
inhabitants, all things being equal.

Agricultural experts, however, note that some regions of the
world, including Africa, have been experiencing a food crisis, as global food
prices spiralled upwards, partly because of rising fuel prices, among other
factors.

The rising food prices have elicited a lot of concern from
observers and agencies such as the World Bank, whose Food Price Index is
currently around its 2008 peak.

Since June 2010, an additional 44 million people fell below the
1.25-US-dollar poverty line as a result of higher food prices, says the latest
edition of World Bank’s Food Price Watch.

The situation may even get worse, as simulations show that a
further 10-percent increase in the food price index could lead to 10 million
people falling into poverty, while a 30-percent increase could increase poverty
by 34 million people.

African economies

However, the situation varies from country to country. The World
Bank publication indicates that low-income and lower-income countries are
experiencing an average 5 percent points’ higher food price inflation, when
compared to better-off countries. A special focus on the Middle East and the
North African region in the publication reveals a double-digit food price
inflation in Iran,

Egypt and Syria, with more moderate levels in other parts of the
region. In spite of the gloomy picture, experts, nonetheless, insist that
Africa has the wherewithal to produce abundant food, attain food security and
even export food to other continents. Calestous Juma, a professor of the
Practice of International Development, Harvard Kennedy School in the US,
belongs to this school of thought.

He stressed that agriculture remained the strength of most
African economies, adding that if agriculture was given priority attention in
Africa, the region had the capacity to withstand the vagaries of rising global
food prices.

Mr Juma, who said this at the recent IMF/World Bank Spring
Meeting at Washington DC in the US, stressed that African leaders should focus
their attention and energy on how to use agriculture to foster the region’s
development.

“Agriculture and economy are one and the same, in the sense that
the African economy is driven by agriculture,” he said, adding:

“Therefore, the countries’ ministers of agriculture ought to be
the presidents to enable them to effectively coordinate agricultural activities.”
Mr Juma reiterated that the rising food prices in Africa could be effectively
curtailed if there was a pragmatic focus on agriculture.

Develop agriculture

Sharing similar sentiments, Ngozi Okonjo-Iweala, the managing
director of the World Bank, urged African leaders to focus more attention on
developing their countries’ agricultural sectors, while making pragmatic
efforts to boost food production.

“I think African countries really have to sustain their efforts
to use agriculture funds to ensure food security,” she said.

Mrs Okonjo-Iweala stressed that the global food crisis had been
haunting the world, adding, however, that virtually all the African leaders had
come to realise the pivotal roles of agriculture in efforts to boost the
economy.

Agnes Edmond, an agriculturist, supported Mrs Okonjo-Iweala’s
sentiments but insisted that greater efforts should be directed at expanding
the people’s access to credit facilities for agricultural ventures.

She noted that most African farmers were hamstrung by their lack
of access to agricultural funding, adding that issues regarding the land tenure
system should also be examined.

“Africa has a lot of contentious issues. Corruption should be
checked, the land tenure system should be properly managed, while farmers
should have little difficulties in accessing credit for farming activities,” Ms
Edmond said.

Oil prices fell more than 3 percent on Monday after U.S. forces
killed al-Qaeda leader Osama bin Laden after a decade of military operations
across central Asia and the Middle East.

ICE Brent crude futures for June fell $4.22 to a low of $121.67
a barrel before recovering some ground to trade around $122.85 by 0942 GMT.
Last month Brent hit a 32-month high above $127.

U.S. crude slid $2.40 to $111.53. Early futures market volume
was depressed by a public holiday in Britain and several other countries, which
may have added to price volatility, oil brokers said.

The oil market focused on whether the news would help unwind the
risk premium attached to prices because of war in Libya and unrest in the
Middle East and North Africa.

“There’s probably a knee-jerk reaction to the extent that part
of the geopolitical risk has been supported by al-Qaeda, so there will be an
initial sell-off,” said Jeremy Friesen, commodity strategist at Societe
Generale.

Economists including David Cohen from Action Economics warned
that in the near term, Mr bin Laden’s killing might trigger a violent response
by al-Qaeda, but analysts said it was unlikely the network would succeed in
disrupting oil supplies.

The closest al-Qaeda has been to hitting the oil industry was on
February 24, 2006, when Saudi forces repelled a suicide attack on the Abqaiq
oil-processing centre, the world’s largest.

The U.S. Department of Homeland Security (DHS) and the FBI have
not issued any warning of a credible or imminent threat, but President Barak
Obama warned Americans to remain vigilant.

“Temporary”

Thorbjørn Bak Jensen of Global Risk Management suggested the
initial sell-off was unlikely to last.

“We regard the reactions as temporary as nothing fundamentally
new is really on the table. If anything it might be a good idea to secure oil
costs,” he said.

Oil was already down before the bin Laden news, after NATO air
strikes over the weekend killed one of Libyan leader Muammar Gaddafi’s sons and
industry sources said Saudi Arabia raised output in April.

Mr Gaddafi’s youngest son and three grandchildren were killed in
a NATO air strike, the Libyan government said on Sunday. Britain said that
while it was not targeting the leader, it was homing in on the regime’s
military machine.

“What’s happening in Libya is probably an event that will see
Gaddafi moved out of his position, so the risk premium which relates to Middle
East concerns will start to erode,” said Jonathan Barratt, head of Commodity
Broking Services.

Saudi Arabia’s crude oil output edged back up in April to around
8.5 million barrels per day (bpd) from roughly 8.3 million bpd in March as
demand picked up, Saudi-based industry sources said on Sunday.

The dollar strengthened by around 0.2 percent on Monday
following last week’s slide, deterring investors from piling into commodities
this week and triggering a 10 percent plunge in spot silver prices.

Money managers increased their bets on higher U.S. crude oil
prices to a combined record level in New York and London in the week to April
26, data from the CFTC showed on Friday, as U.S. prices rose to their highest
level since September 2008.

Volatility and uncertainty due to the pan-Arab protests and
Libya’s conflict have tempered oil trading. The U.S. 30-day average volume was
down by nearly 130,000 lots compared with the 250-day average at the end of
last week, Reuters data showed.

You’ve probably heard of the world’s
most popular classified site, Craigslist and UK’s Gumtree. Both sites offer
buyers and sellers an opportunity to engage in a free and open market.

With the success of these sites in
their respective countries and beyond, Nigerian entrepreneurs are keying into
the online classified market. Today there are probably more than 50
classified sites in Nigeria offering the same service, but with different
business models and technical functionality.

Some of the local classified sites
include Nairalist.com, Dealfish, Txtoweb.com, Chukslist.com, Gbogbo.com and WhoGoBuy.
Others are Kalahari, Flegz, Buyright, YesideFashionStore.com and Shopaholic. On the other hand, some other Nigerian sites offer online classified ad
listings in addition to their other products and services. Just like other
classified ads sites, they all have one thing in common: offer buyers and
sellers an opportunity to engage in a free and open market.

Some of these classified ads sites
were launched due to the success of the leading classified sites such as
Craigslist, Gumtree and Kijiji. Their success can be measured in terms of the
great value they provide to local businesses and individuals who wish to buy
and/or sell their items online from cars to phones.

In terms of revenue, we can say that
the online classified market has seen tremendous success. In 2007, reports
estimated Craigslist’s revenue at $150 million, with its sole source of
revenue from paid job ads in selected cities.

On the other hand, Craigslist has
witnessed a great deal of criticism, notable among which is an appeal in August
2007 by Atlanta’s Mayor, Shirley Franklin to take steps to avoid unwittingly
enabling child prostitution through its classified ads.

There have also been allegations by
several US states that the “Erotic services” ads on Craigslist were being used
for prostitution. On May 13, 2009, Craigslist announced that it will close the
‘Erotic services’ section, replacing it with an ‘adult services’ section where
the postings will be reviewed by Craigslist employees, while postings to the
new category cost $10 and can be renewed for $5.

In Nigeria, classified ads sites
have their own stories to tell. Some have packed up shop because of a lack of
the right business/marketing strategy and/or sustainable business models. Other
reasons have been due to a breach of trust from buyers and sellers as well as
third-party clients.

Others have had issues with using
the right programming languages and the right functionality, spam-resistance
and security features needed to sustain such sites. For example, WhoGoBuy
(launched in late 2005) built their site using ASP initially, then
migrated to ASP.net about a year later, and then moved over to PHP a few months
after.

In March 2010, the founder of Nairalist.com,
Seun Osewa asked some very interesting questions: Should Nairalist have
been packaged as a software product and not a new website? How many
Craigslist(s) can Nigeria (or the world) accommodate?

The Google Buzz topic generated a
lot of reactions which provided suggestions on how Nairalist can be improved.
One of the best suggestions was that Nairalist should be turned into a Facebook
application that allows people to put stuffs they want to sell and share it
with their friends and their friends can share it with their own friends too.

Despite these challenges, these
online classified sites still offer this service all for FREE, unlike some
Nigerian newspapers and WASEET, Nigeria’s first weekly classified ads
publication that charge a fee for posting classified ads.

Perhaps one of the biggest
challenges that the online marketplace faces is the issue of trust. According
to Fritz Ekwoge, founder of Kerawa.com, one of the leading
African classifieds site: “The Nigerian classifieds business is a business
of trust. And trust takes years.”

He also stated that when Craig
Newmark started Craigslist in 1995, it took him about five years to open in
another city. Being the first to market, he is benefiting from the fruits of
his labour. Ekwoge believes that the Nigerian classifieds market is growing and
will boom financially too as it has done in other developed countries.

But the question is: How trustworthy
can it get? Are there any trustworthy classified sites out there? Share your
experiences.

Gold surged to a
record high on Friday for the third straight day, as investors kept up
a buying frenzy fuelled by the outlook for low U.S. interest rates that
has propelled bullion to its seventh consecutive weekly rise, its
longest winning streak since 2007.

Bullion jumped to
$1,569.30 an ounce as U.S. consumer spending rose for a ninth straight
month in March with inflation at its highest in nearly a year.

Platinum group metals also rose about 2 percent but silver fell 1 percent after soaring to record high in the previous session.

Option traders
reported strong buying of call options and call spreads, reflecting
bullish market expectations. A gauge of bullion market volatility also
spiked in response to a sharp price rally.

“What has been
driving gold is an abundance of liquidity of Fed policy that remains
exceedingly accommodative, which is going to work against the U.S.
dollar,” said Mark Luschini, chief investment strategist of
broker-dealer Janney Montgomery Scott, which manages $53 billion in
client assets.

“There is worry
that inflation, which is not a problem right now, could escalate to
become one. And once it does, it becomes very difficult to put the
genie back into the bottle,” he said.

The CBOE gold volatility index, which measures bullion investor anxiety, rose 6 percent to its highest level in five weeks.

Spot gold was last
up 1.8 percent at $1,563.30 an ounce by 5 p.m. EDT (2100 GMT), having
earlier hit an all-time high $1,569.30. The metal notched a 9 percent
monthly gain, its strongest since November. Bullion also posted its
seventh consecutive weekly rise, its longest winning streak since 2007.

U.S. June futures
settled up 1.7 percent at $1,556.40 an ounce, with trading volumes
about one-third below its 30-day average due to a public holiday in
London.

On the options
front, heavy buying of outright call options and bull call spreads of
June 2012 calls with strikes $1,800 and $2,000, said COMEX gold options
floor trader Jonathan Jossen.

Bull call spread is
an option play involving the buying of calls at one strike price while
selling them at a higher strike with the same expiration date.
Investors often expect prices to rise moderately with the strategy.

A slight drop in
the dollar also contributed to bullion’s gains. Earlier in the week,
expectations of further weakness in the dollar were the biggest drive
for gold and silver rallies to records.

Silver retreats from record

Silver retreated
from the record high it set Thursday, but was still by far the
best-performing commodity in April and so far in 2011. It posted a near
27 percent rise in April, its biggest monthly gain since April 1987.

Silver was last down 0.8 percent at $48.03 an ounce.

Silver gained 3
percent this week, although analysts say its robust performance against
the other precious metals may not be sustainable.

“If silver doesn’t
make a new high and sustain above that, it may go through a more
vicious correction here. So, gold in the short term could go down in
sympathy of that,” said James Dailey, portfolio manager of the TEAM
Asset Strategy Fund.

Speculators scaled
back their bullish bets in COMEX silver futures and options to the
lowest level since early February, even as prices neared the
psychological $50 an ounce, regulator data showed Friday.

The CME Group Inc,
parent of the Chicago Board of Trade, said on Thursday it would raise
maintenance margins for silver futures by 13.2 percent, its second time
this week, making it more expensive for silver speculators to trade in.

Reuters

Some African and global leaders will be participating in the 21st World Economic Forum (WEF) in Cape Town, South Africa to chart a new course on Africa’s development.

The Forum, to be hosted by South Africa’s President, Jacob Zuma, between May 4 and 6, will feature more than 900 participants from over 60 countries, including Nigeria, deliberating on the theme: “From Vision to Action, Africa’s Next Chapter.”

Business leaders and government and civil society representatives would explore opportunities and risks facing the continent’s development, with primary focus on three thematic pillars: Shaping Africa’s Role in the New Reality; Fostering Africa’s New Champions of Growth; and Building Partnerships for Inclusive Development.

Apart from the formal launch of ‘The Africa Competitiveness Report’ by the World Bank to highlight the continent’s progress over the past year as well as identify major recommendations to African leaders and its international partners, participants will examine the region’s position in the new reality and identify opportunities to accelerate and sustain its transition to inclusive, investment-driven growth.

Others who have also confirmed their interest in the forum include, former Nigerian President, Olusegun Obasanjo; Faure Gnassingbé of Togo; Armando Emilio Guebuza (Mozambique); Jakaya Kikwete (Tanzania); Raila Amolo Odinga (Kenya); Ali Bongo Ondimba (Gabon) and Morgan Tsvangirai (Zimbabwe).

Those expected

Regional and international leaders expected to feature include former Secretary-General, United Nations, Kofi Annan; Deputy Prime Minister and Minister of Foreign Affairs of Ethiopia, Hailemariam Desalegn; Vice-President, Africa Region, World Bank, Obiageli Ezekwesili; President, African Development Bank (ADB), Donald Kaberuka, Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi and Minister of Commerce and Industry of India, Anand Sharma.

“Africa is poised for take-off. Sub-Saharan Africa is already one of the top performing regions in the world. Having come through the economic global crisis with resilience, the international community is interested in its growth opportunities. The World Economic Forum on Africa will be an opportunity for key leaders from the region and beyond to discuss how this growing confidence in Africa’s potential can be translated into action and results,” Director, Head of Africa, WEF, Katherine Tweedie, said.

Seven young social activists from South Africa, Tanzania, Ethiopia, Kenya, Uganda, Switzerland, and the United Kingdom, under the aegis of the British Council’s Global Changemakers initiative are expected to join other in creating awareness among decision-makers’ on the key global agenda, to help spread best practices in youth-led development.

Global Changemakers is a network of young social entrepreneurs and community activists from 110 countries world-wide who come together to build their skills, share ideas, and work together on projects that directly impact the lives of those in their communities.

Managing Director, Nigeria Export-Import Bank, Robert Orya, said in Abuja at the weekend that the Nigerian contingent hopes to utilise the opportunity to build on the country’s rising investor rating on the heels of positive outcome of the recent elections by unleashing an aggressive drive for foreign investments in key sectors of the economy.

Over the long
Easter weekend, I dwelt in the cusp of several dilemmas. There was the
undeniable challenge of the national political choice. But it was with
a lower order problem that I did the greater battle. Riven between, on
one hand, the modern day understanding of the role of the public sector
in an economy, and on the other, a vivid recollection of a
not-too-long-ago past, when all services were provided by the public
sector, I tried to imagine an agenda for the sector’s reform.

The first horn of
this particular dilemma is an argument in favour of a small state. Here
the private sector provides everything within a competitive market
economy. In this context, the state is allowed free rein only in those
areas where a natural monopoly exists, the positive externalities
arising from the provision are too vast to lure private providers, or a
market failure exists.

Otherwise, the
state is most efficient as a regulator of the market: ensuring free
entry and exit, and protecting consumers against price-fixing and
related collusive practices by industry.

The second horn
seemed nostalgic. Or, was it? Add the Tuesday break from work for the
governorship elections, and the whole Easter break was of five days
when electricity from the mains was noticeable by its absence. In the
teeth of the obvious incompetence of PHCN (the yet-to-be-privatised
public monopoly that provides electricity nationwide) it was kind of
difficult persuading my teen daughter that time was when NEPA (that’s
what the monopoly provider used to be called) announced power outages
days in advance; and when the light was turned off as announced and
turned on on cue. A lot less credible in the light of today’s
experiences, is the fact that it was our practice as teens to report
unannounced electricity outages to NEPA; and that having logged the
fault, the service operator would inform that a “fault vehicle” will be
“there” in 30 minutes. Invariably, the service vehicle arrived on
schedule. It was important, growing up, that we knew by heart the
number on the poles that brought light into our homes, and NEPA’s fault
complaints phone lines.

There was therefore
a time when the public sector “delivered”. Now, there may have been
issues with its balance sheet. In other words, the services we enjoyed
in those days may have been provided below the rate at which the market
would ordinarily have cleared the demand for and the supply of such
services (were these to have been left in the hands of private sector
providers). This difference between the rate at which the public sector
provided its services and the putative private sector rate (the
now-famous “subsidy”, which every public policy neophyte would want
removed in today’s thinking) was not without its uses. It would have
helped if all that time these costs were properly captured in the
national accounts and the choices we made happened because we’d
compared their implications for the budget with the intended gains.

Despite the current
narrative, the haemorrhage from such “subsidies” did not lead to the
subsequent incapacitation of the public sector as a service provider.
Indeed, the emergence of millionaire civil servants belies this
possibility. The services failed for less honourable reasons. The point
was reached where public investment in new capacity tailed off, even as
ill-focussed public policy choices drove a phenomenal growth in demand
for these services. As the debate in the US over how to keep public
spending within limits has shown, key parts of the services enjoyed
there is the result of public provision. To some extent, therefore, the
public sector is not as remiss as we want to depict it. Tony Blair,
writing on his tenure as prime minister of the UK, put it most
graphically: “The truth was that the whole distinction between public
and private sector was bogus at all points other than one: a service
you paid for; and one you got free. That point is obviously central –
it defines public service. But it doesn’t define how it is run, managed
and operated. In other words, that point is critical, but at all other
points, the same rules apply for public and private sector alike, and
those points matter enormously.”

Bank lending should rise significantly in the second quarter of the financial year once the April 2011 elections, which have prompted a slowdown, are over, according to Bisi Onasanya, group managing director and chief executive officer of First Bank Nigeria.

Mr Onasanya told Oxford Business Group (OBG), a consultancy firm, that financial risk exercises undertaken last year by the Central Bank of Nigeria (CBN) and the April elections had both contributed to a dip in loan growth.

Figures show that lending growth turned a corner to reach 5 percent by the end of last year after plummeting in the wake of the 2008 global financial crisis, which was exacerbated in Nigeria by troubles in the domestic banking sector.

“Lending growth was suppressed last year, partly due to a conservative response from banks following the stress test which the CBN conducted in 2010,” he said. “The elections are slowing loan growth for the first half of 2011, but there will be a major increase after elections in April. I expect loan growth of 10 percent in 2011, which is double the 5 percent figure for 2010.”

Businesses face challenges

Mr Onasanya acknowledged that businesses in Nigeria still faced an uphill struggle to obtain credit from banks, despite CBN Governor Lamido Sanusi’s high-profile campaign to encourage growth by stimulating Small and Medium Enterprise financing. He believes banks are unlikely to increase lending to smaller businesses, which are viewed as a higher risk than big corporations, unless lending rules are relaxed.

“Although SMEs have access to some credit, the risk tolerance limit is too high,” he said. “The banks can’t be blamed since they have to meet provisions when the CBN tests their portfolios. The government and the Central Bank should consider implementing risk sharing to increase the flow of credit to higher risk areas.” With bidding for Nigeria’s unhealthy banks drawing nearer, Mr Onasanya highlighted the importance of ensuring that the selling process was clearly laid out in a framework if legal wrangles and lengthy court cases were to be avoided.

Ten of Nigeria’s banks are up for sale after they failed to meet standards set out in an audit undertaken by the CBN in the wake of the 2008 crisis. The move is set to bring consolidation to the sector, with observers expecting the process to reduce the number of players to 15.

“Due process must be followed involving the boards of directors and shareholders,” he said. “Otherwise, if the distressed banks are sold by the CBN rather than by the actual owners, each acquisition will go into irreconcilable litigation.”

Customers of First Bank and GTB yesterday had hard times
transacting business at the banks as their networks broke down. Normal services
were not resumed until after midday, leading to frayed tempers in the banking
halls across Lagos.

The banks have been showing signs of network challenges, either
technology migration induced or just service breakdown. Visits to branches of
the banks showed that the challenges faced by the banks before the long Easter
breakstill persisted, as both had their banking halls filled with aggrieved
customers.

Tough business day

The network challenges made it difficult for customers to
transact business. Mostly affected were those who wanted to withdraw money from
their accounts through the Automated Teller Machines (ATMs), as the banks
continued to accept deposits but could not post them immediately.

Funmi Adekoya, a customer said, “Last Thursday, I was here and
they officially announced to us that they were having network challenges; that
we should bear with them, because their services would be below expectation. I
initially thought it was because of the rush for withdrawals by customers
because of the long break ahead, but a week later, I am surprised that am
starring at even a worse situation.”

Some of the customers were so frustrated they refused to switch
off their phones while some picked their calls, despite caution from the bank
attendants.

“How do you expect me to switch off my phone? Do you know how
long I have been here? So I should not pick my calls? If you don’t want me to
pick my calls, then give me my money and let me go. It is only when you are
rendering your services efficiently that you can expect me to obey your rules,”
a customer told an official in anger.

First Bank, in some of its branches, could not carry out any
transactions for its customers till noon yesterday.

“The network was just restored a few minutes ago,” a bank
attendant at First Bank, Oba Akran branch, said, around 12.20 pm. “It has been
down since morning. We have not been able to make any payments or perform other
transactions,” she said, looking at the crowded hall.

According to her, there was no need heading for another branch.
“The truth is that it is everywhere; it’s affecting all our branches” she
added.

The bank’s hall was filled to capacity, despite the fact that
some customers were turning back, as soon as they sighted the queue. At the
GTBank, it was no different. At 12.30pm however, the banks had begun responding
to customers.

On Wednesday, GTB on Facebook apologised to its customers for
the downtime experienced with its challenges during the Easter holidays.

The bank had said, “We want to sincerely apologise for the
downtime experienced with our Internet Banking Service during the Easter holidays.
We recently migrated to our Superdome Servers, which will provide our e-Banking
Channels with a more robust, secure, stable & reliable platform.

“Over the next few days, you may notice some service disruptions
across certain branches and e-Banking Channels. This is also a result of
Internal Migrations and Platform Reboots. Please be rest assured that our other
e-Channels (ATM, Mobile & GTConnect) will continue to function throughout
this upgrade/ migration. Thank you for your understanding and know that we do
this because we want to serve you better,” the statement said.

The spokesperson for the First Bank, when contacted on phone,
said he was out of Lagos and could not speak on the problem.

Service breakdowns are not totally avoidable. It is not known
when the banks service breakdown would be fully addressed, but customers say
banks should devise a more effective way to address their internal challenges,
without having to put their customers through such extreme discomfort.

To discourage the use of raw cash in economic transactions in
the country, the Central Bank of Nigeria (CBN) has taken steps to promote the
use of electronic payment systems.

The CBN yesterday in a circular to all banks, Cash-in-Transit
(CIT) operating firms, payments system service providers, as well as money card
acquirers, issuers and processors, said that the new policies, including
payment of increased penalties for cash transactions by individual and
corporate bank account holders, are to help reduce the high usage of cash as
well as moderate the cost of cash management among operators in the country’s
financial system.

The CBN’s director, currency operations department, Muhammad
Nda, said in the circular that the increasing use of cash in transactions has
dire consequences on the overall economy, particularly concerning cost of cash
management to the banking industry, security, and money laundering.

To limit the negative impact on the economy, Mr Nda said the CBN
has directed all deposit money banks (DMBs) in the country to ensure that,
effective June 1 next year, daily cumulative free cash withdrawals and
lodgements by individual and corporate customers do not exceed a maximum
ceiling of N150,000 and N1 million respectively.

Cut down on cash
transactions

Consequently, he said the CBN has imposed a penalty of N100 per
N1000 on all individual cash transactions in excess of the limit, while
corporate customers that go contrary to the new policy are to pay a fee of N200
per N1000 withdrawn above the stipulated cumulative limit.

The circular added that, “Contravention of this policy shall
attract a fine of five (5) times the amount that the bank waives as a first
offender, while the bank shall, subsequently, pay ten (10) times the charges
waived.”

Though commercial banks are allowed to charge their customers at
least an interest of N5 per N1 million as cost of transaction (COT), there is
no approved rate stipulated by the CBN for overdrawn accounts, as the customers
are allowed at the discretion of their bankers.

With effect from June 1,this year, operators of card payment
schemes, processors, switching companies, service providers, and banks risk
being suspended for a month or licence revoked by the CBN, for not acquiring
approved operational agreements/contracts for local currency Point of Sale
(POS) card scheme.

“All financial institutions, including Deposit Money Banks (DMBs),
Savings and Loans, Mortgage and Microfinance Banks shall comply accordingly.
Compliance with the policy shall be monitored by the Banking Supervision
Department and the Other Financial Institutions Supervision Department with
appropriate sanction applied to erring institutions,” the CBN warned.

Similarly, in line with the new policy, third party cheques by
individual customers in excess of the N150,000 limit would no longer be
eligible for encashment over the counter, as the value for such cheques will be
required to go through the clearing house.

Besides, the CBN said where a bank allows a third party cheque
encashment in violation of the stipulated regulation, such a bank would be made
to pay higher than the sanctions between 10 per cent of the face value of the
cheque and N100,000 fine.

On cash-in-transit (CIT) lodgement services rendered to
merchant-customers, the CBN ordered its immediate stoppage, effective June 1,
2012, adding that customers interested in such services should engage the CBN
licenced CIT operators to aid cash movement to and from their banks at agreed
terms and conditions.

The new arrangement, which is to be operational initially in
some major cities, including Abuja, Lagos, Port Harcourt, Kano, and Aba,
attracts a fine of N1 million per specie movement for violators.

This step, many believe, would help curb incidents of violent
robberies which have become common because people move huge volume of cash
around.

However, there are concerns about the implementation of this new
policy, especially as it would mean transiting from a cash-based economy to a
near cashless one in just one month. A medical equipment supplier who gave his
name as Monday, said the policy would cause some distortion in the economy in
the short term.

“For instance, some of my customers always insist on cash
payment before they would release their goods. How do we make this change all
within one month,” he asked.

He said the CBN ought to have carried out sensistisation
programme to prepare Nigerians for the transition.

Currency outside the banking system is currently put at over
N1.025 trillion, as at February, according to the latest official figures
released by the Central Bank.

The figure stood at N927 billion as at December 2009, due
largely to skepticism about the efficiency of the Nigerian banking system.

The latest move is expected to reduce the amount of currency
outside the banking system.