Minister of National Planning, Dr. Shamsudeen Usman

The Minister of National Planning, Dr. Shamsudeen Usman, has expressed fear that the country may not attain its developmental aspiration as outlined in the Vision 2020 document.

Usman said the desire for Nigeria to be among the top 20 most developed economies in the year 2020 was unlikely to be achieved as planned.

The minister made this observation in Abuja late on Tuesday while presenting  his scorecard to the Peoples Democratic Party’s  National Working Committee.

He also blamed the  crisis in the power sector on the over 30 years of military rule, which he said relegated planning to the background.

The minister said when the government started the documentation of Vision 2020 in 2009, Nigeria was number 44 on the list of developed economies, adding that if by 2020 the nation rose to number 25, he would be a proud man.

Usman said, “Where were we in 2009? We were number 44. By the end of 2011, we were number 39; by the end of 2012, we were in number 36; this is progress.

“We made quite a lot of progress. In other areas, we did not. I don’t want any of you to meet me in 2020 and say you are the one telling us that we are going to be among the top 20.

“But what I am saying is that even if we are not among the 20 by that time, we were number 44 in 2009. If by 2020 we are number 25, I will be a very proud man.

“The reason is because we are consciously moving and doing all the necessary things to move up there.

“It is not saying we must be there. What it is saying is if we get there, then, these are the actions we must need to take as a country.”
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Minister of National Planning, Usman Shamsudeen

The Federal Government, yesterday, shifted blames for the problem of power in the country on the 30 years of military rule, just as it said that planning was relegated to the background during the period.

Speaking when he presented his scorecard to the National Chairman of  Peoples Democratic Party, PDP, Alhaji Bamanga Tukur and other members of the National Working Committee, NWC, Minister of National Planning Commission, Dr. Shamsuddeen Usman was pessimistic on achieving the set goal of becoming one of the top 20 most developed economies by the year 2020.

Shamsuddeen Usman said: “During the military era planning was relegated and for more than 30 years we neglected the power sector”.

The minister also disclosed that the National Integrated Infrastructure Master Plan, NIMP, designed for the next 30 years will be ready in July, even as he said 50 percent of the nation’s bilateral agreements were presently not functioning as some of them were already dead.

50% of bilateral agreement not functioning

He added that the Commission at the moment had reviewed 488 of such agreements, noting that it was quite unfortunate that Nigerians were not getting the full benefit of the signed agreements.

On Vision 2020, Shamsuddeen, who noted that Nigeria was number 44, said if by 2020 the nation rises to number 25 he would be a proud man.


President Goodluck Jonathan
According to him, “Where were we in 2009? We were number 44. By the end of 2011, we were number 39, by the end of 2012, we were in number 36, this is progress. We made quite a lot of progress. In other areas we are not.

“I don’t want any of you to meet me in 2020 and say you are the one telling us that we are going to be among the top 20. But what I am saying is that even if we are not among the 20 by that time, we were number 44 in 2009.

“If by 2020 we are number 25, I will be a very proud man. The reason is because we are consciously moving and doing all the necessary things to move up there”.

He added: “It’s not saying we must be there. What it’s saying is if we get there then these are the actions we need to take as a country. We must do this and that in governance, in human development, in infrastructure. That is what the document is saying and we are actually taking those steps”.

The minister explained that the Federal Government was on its way to transforming the power sector as the telecom sector had already been handled.

Explaining the challenges facing the Commission, Shamsuddeen, however, lamented inadequate funding of programmes and projects as well as capacity gaps in Ministries, Departments, Agencies, MDAs, due to high turnover of staff, the pooling system and current subjective training and performance measures.

Other challenges include “late feedback/communication from MDAs which hinders prompt delivery of actions; many MDAs not using officials NBS statistics; absence of strategic plans in some MDAs; inadequate Information Technology hardware for MDAs networking; National Planning and projects continuity Bill dormant in the National Assembly; absence of a legal framework for the performance contracting system,” among others.

Earlier, the National Chairman of PDP, Alhaji Bamanga Tukur said through planning the party could navigate its manifesto and that planning must go with implementation, adding that the idea behind the interaction was for Nigerians to know that the PDP-led government was doing the right thing, as Nigerians expect rehabilitation of infrastructure.

Tukur who charged the minister on implementation, said, “besides this presentation, I hope you connect with your colleagues on implementation.”

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EFCC Chairman, Ibrahim Lamorde

The controversy surrounding the management of the Aluminium Smelter Company of Nigeria has assumed a different dimension as BFI Group is set to invite the Economic and Financial Crimes Commission to investigate the N16.4bn loss in the company’s asset.

Chairman of BFIG, Dr Rueben Jaja, confirmed the development to our correspondent in Abuja on Friday during an interview.

Jaja said, apart from instituting a $2.8bn suit against RUSAL, the Russian firm currently managing the plant, the EFCC would also be invited to look into the books of ALSCON.

“We will soon be inviting the EFCC to investigate the mismanagement of the plant,” Jaja said.

He said BFIG was aware that the company was being mismanaged, adding that, “It is obvious the money was not used in upgrading the organisation, otherwise the value of ALSCON should have been growing.”

He also said, “It is clear ALSCON is in severe financial difficulty. That explains why production was shut down recently and workers had to be sacked, since there was no money to pay salaries, pay for gas and the repair of the machines and power generators.”

The Supreme Court had in a judgment of July 6, 2012, ruled that the Bureau of Public Enterprises should return ALSCON to BFIG, an American company.

The Russian company had been earlier disqualified by BPE from the financial bid process after it submitted a conditional bid in contravention of the bidding guidelines.

Despite the disqualification of the firm, the Federal Government under former President Olusegun Obasanjo decided to give ALSCON to RUSAL, thereby setting the stage for the preferred bidder, BFIG, to take BPE to court.

ALSCON, which has been managed by the Russian firm for about five years now, is currently facing liquidity crisis owing to huge liabilities in its accounts.

The company’s financial statement, covering 2007 to 2011, which was audited by KPMG Professional Services, showed a sharp decline in the company’s total asset value.

The audited five- year account, a copy of which was obtained by our correspondent in Abuja, put the total value of the company’s net assets as at December 31, 2011 at N14.574bn.

The December 2011 figure of N14.57bn shows a huge decline of N16.40bn or 53 per cent over its total asset value of N30.97bn in 2007.

An analysis of the company’s five year account between 2007 and 2011 showed that the aluminium firm lost N5.79bn of its asset value in 2008; N5.83bn in 2009; N4.50bn in 2010 and N274m in 2011.

Apart from the decline in asset value, the account showed that the company had suffered persistent losses within the period under review.

It recorded a loss before tax of N5.79bn in 2008; N5.83bn in 2009; N4.50bn in 2010 and N274.25m in 2011.

Apart from the loss, KPMG in its audit report of ALSCON identified some discrepancies in the way some items were handled in the account.

For instance, the report said, “Included in stocks are storeroom supplies carried out at N5.9bn as at 31 December, 2011. We were not provided with sufficient appropriate audit evidence as to the need to recognise a provision for stock obsolescence, irrespective of the fact that some of the items have remained unused for several years.

“We were also unable to carry out alternative audit procedures to obtain sufficient appropriate audit evidence due to the inability of the company to determine stock obsolescence. Consequently, we were unable to determine whether any adjustment to this balance is necessary.”

KPMG further stated that it was provided with sufficient appropriate audit evidence about the physical quantities of butts. We were also unable to carry out alternative audit procedures to obtain sufficient appropriate audit evidence due to the inability of the company to physically verify the quantity of butts.

“Consequently, we were unable to determine whether any adjustment to this balance is necessary,” he added.
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Minister of Works, Mr. Mike Onolememen

The Federal Government is currently shopping for about N921.4bn to complete 195 ongoing road projects scattered all over the country.

The Minister of Works, Mr. Mike Onolememen, said this on Wednesday while briefing State House correspondents on the outcome of the weekly Federal Executive Council meeting presided over by President Goodluck Jonathan.

Onolememen addressed the journalists in company with the Minister of Information, Mr. Labaran Maku; Minister of State for Works, Ambassador Bashir Yuguda; and Managing Director, Federal Roads Maintenance Agency, Mr. Gabriel Amuchi.

Onolememen had earlier presented the challenges and achievements of his ministry in 2012 to the council.

He said all the ongoing road projects had a total portfolio of N1.3tn.

The breakdown of the ongoing projects as given by the minister showed that 31 are located in the North Central; 30 in the North East; 23 in the North West; 40 in South East; 34 in South-South; and 37 in South West.

“Out of this total portfolio size of ongoing projects that has been put at N1.397tn, a total of about N523.6bn has been certified and only about N475.5bn has been paid, leaving a balance of about N921.4bn of that portfolio; which means that cumulatively unto the time that the portfolio is completed, we will be requiring about N921.4bn to complete all the 195 ongoing projects in the country,” he said.

Onolememen said N143.5bon was budgeted for capital projects for his ministry in the 2012 budget, out of which N111bn was cash-backed and N110bn was spent.

He said out of the 195 projects, the ministry had prioritised 80 and succeeded in completing 32.

The minister said the ministry got N85.5bn from the Subsidy Reinvestment Programme during the year under review, adding that the sum was expended on six projects.

Onolememen added that since it had become obvious that the nation could not fund all the projects from only budgetary provisions, the ministry had come up with a new initiative with multilateral agencies to join in funding the projects, in addition to the Public-Private Partnership arrangement.

The minister said, “Nigeria has a total road network of 200,000 kilometres owned by federal, state and local governments. Only about 65,000 kilometres of the 200,000 kilometres are paved, mostly in bituminous layers.

“Of these, the Federal Government owns about 35,000 kilometres, representing 54 per cent of the entire bituminous road network in Nigeria. The balance is shared between the 36 states and 774 local government areas. A total of 651 kilometres of roads was paved in bituminous layers in 2012.”

Onolemenen observed that despite the increase in the number of vehicles plying Nigerian roads from 150,000 in 1983 to 1.3 million in 2000 and nine million in 2012, the total kilometres of bituminous roads in the country did not witness any appreciable increase to meet the demand.

This, he said, had led to increased pressure on the nation’s roads coupled with the non-availability of rail transportation for haulage in the past 20 years.

Meanwhile, Maku said the Federal Government had commenced moves to reconcile all professionals in the nation’s health sector.

The minister said the council discussed the outcome of a ministerial committee set up for that purpose.

He said the government was concerned about the acrimony among professionals in the health sector, which oftentimes led to disruption of work and antecedent loss of lives.

Maku said, “A ministerial committee was set up to look at the problem. The Minister of Health presented the report and council discussed the recommendations. After looking at the report critically, FEC felt there was the need for more work because government’s intervention must be broad based and result-oriented.

“The council decided that a committee of a highly experienced people should work on the report. The committee, which will soon be composed, will have its members visit different countries that have similar format with that of Nigeria.”
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The investment drive of the Federal Government has received a boost as a team of foreign investors has indicated their intention to invest $100bn (N15.8tn) in key sectors of the Nigerian economy.

This was disclosed by Chief Tony Hicks of Anita Energy Limited, when he led a 10-man delegation on a visit to the Deputy Governor of the Central Bank of Nigeria, Mr. Kingsley Moghalu.

A statement from the CBN on Tuesday stated that Hicks informed the CBN deputy governor that the purpose of the team’s visit was to bring massive investment that would add value to the transformation agenda of the Federal Government.

The key areas where the fund would be invested, he said, were oil and gas infrastructure, power generation, fast speed train, telecommunications and the establishment of a merchant bank.

He added that the investment would be done in partnership with APEC Logic Investment Limited, an Australian funding investment partner, and SINOPEC, one of the largest oil and gas corporations in China.

The statement further stated that Moghalu informed the delegation that foreign investment in Nigeria could only be meaningful if it addressed skills and infrastructural development.

He explained that the CBN had undertaken reforms of the banking sector to make it strong, resilient and able to serve the needs of the real economy.

This, he noted, was a total departure from the past where some individuals enriched themselves to the detriment of the economy.

Moghalu informed the team of investors that there was a confluence between the banking reforms and the desire of the investors to establish merchant banks expected to facilitate concrete investment in Nigeria.

This, he observed, would strengthen the relationship between the financial sector and real economy, adding that the CBN, as economic adviser to the government, had advocated structural reform of the economy.

He promised the delegation that the bank would provide the needed support to ensure that the planned investment bore fruits and process the banking licence application, provided the necessary requirements were met.

Moghalu reiterated that one of the four pillars of the banking reform was enhancing the quality of banks and financial stability through the creation of the Assets Management Corporation of Nigeria, which absorbed the toxic assets of Deposit Money Banks.

He observed that the banks now had a clean balance sheet and were able to lend to the economy again.
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Dagogo Jack, Chairman, PTFP

The Chairman, Presidential Task Force on Power(PTFP), Dagogo Jack, has alleged that beneficiaries of the public sector-led Power Holding Company of Nigeria (PHCN) management are still strategising against its the privatisation.
Jack, who was fielding questions from reporters after the Presidential Power Transactions Signing ceremony at the Banquet Hall of the State House in Abuja on Monday, added that the beneficiaries have the potential to upstage the exercise.
He said the outgoing management and staff of the PHCN were accused of foul play.
Jack said: “Some people are even saying they are doing something negative because they know they are going.”
According to him, the Federal Government has been secretive about its plans for the settlement of labour severance packages because some of the opponents could incite the workers to oppose the exercise.
The chairman submitted that it is preferable for the Federal Government to be strategic in its labour relations.
His words: “There are too many forces. Let me share something with you. And I think you need to go away from here with that. There are a lot of forces that are not interested in this game. And sometimes when we talk about it, they think we are being defensive. But I wish you guys will at some point make it for you to be on this side of the table to know what I am talking about.
“There are some people who benefitted from the fact that there is no reform; that there is no privatisation they benefit from it. And they have been benefiting from it for years, so they have more potentials to upstage it than the people that are just trying to come inside.
” So ,when you are saying you are going to discuss labour issues on the pages of newspapers, people will go in there and sensitise labour to take another position. And you won’t know how that happens and suddenly, you are very close to closing a deal and the deal gets open again and you will not know how. So, it is better to be strategic in labour relations. That is all I will say.”
Jack also explained that it would be better to allow the investors to state their investment projection in terms of power generation and transmission capacity instead of government rolling out plans for them.
He said the electricity market is shifting ownership; when it is completed, the new owners can release their projections.

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Nicky Newton-King, CEO, JSE

Africa’s 24 stock markets should cooperate if they are to seize high levels of investor interest, Nicky Newton-King, Chief Executive Officer, Johannesburg Stock Exchange (JSE), has said.
The leader of Africa’s biggest securities exchange, told AFP that global investors have their eye in Africa and the continent’s stock market leaders should seize the opportunity.
“The appetite for Africa is very, very high. I think everybody is trying to find their way, to participate meaningfully in that. All of us who are privileged enough to run exchanges, need to figure out that these waves of investor appetite aren’t yours by right. Once they come, you have to be able to ride them properly. We should not be taking this as business as usual, this is a business opportunity,” she said.
Newton-King said allowing South Africans to more easily place orders into Nigerian stock markets, or by allowing Kenyans to invest in joint-listed South African stock in KES shillings, would attract more foreign investors.
She added that there are benefits from cross-listing, as the JSE learned when its leading shares moved to London. “When Anglo-American cross-listed in London, the amount of trades in Anglo-American increased.
“South Africa’s percentage of trade in Anglo-American decreased, but the decreased percentage was worth more. In those cases you have to think quite bravely,” she said.
She explained that the International Monetary Fund’s (IMF’s) forecast that the aggregate economy of sub-Saharan Africa will grow at 5.7 per cent this year, presents an opportunity for the continent, adding that the one way to channel the investor interest through African markets would be to make it easier to invest across borders and to improve liquidity in small markets so that assets can be bought and sold quickly.
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MasterCard Incorporated posted fourth quarter profit that beat analysts’estimates as customers made more purchases. Net income excluding litigation charges increased 18 per cent to $605 million, or $4.86 a share, from $514 million, or $4.03, a year earlier, the Purchase, New York-based company, said in a statement obtained by Bloomberg.
“It was a solid quarter capping a really solid year despite the economic challenges,” MasterCard Chief Financial Officer Martina Hund-Mejean said.
Chief Executive Officer Ajay Banga is fending off competitors Visa Incorporated and Shanghai-based China UnionPay as he seeks a larger share of the electronic payments processing market.
Banga is targeting developing countries, such as Myanmar, Ghana, Nigeria and Angola for growth amid a global consumer shift from cash to plastic. “We are gaining traction in our United States credit business with some recent wins, continuing to experience momentum in our mobile initiatives around the world, and securing important business in emerging markets like Africa and Brazil,” Banga said.
Profit comparisons were skewed by a $770 million expense tied to settling litigation with merchants taken in the fourth quarter of 2011. Including that cost, earnings a year earlier were $19 million, or 15 cents a share.
MasterCard’s total revenue increased 9.7 per cent to $1.9 billion, beating the Bloomberg forecast of $1.89 billion. Worldwide spending on MasterCard- and Maestro-branded cards climbed 13 per cent to $727 billion, based on local currencies, the company said. Processed transactions jumped 20 per cent to 9.2 billion.
 The Nation

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Bismark Rewane, MD/CEO, Financial Derivatives

Credit to the private sector dropped by 8.1 per cent to N15.2 trillion last month, from nine per cent decline in February, the Managing Director and Chief Executive Officer, Financial Derivatives Company Limited, Bismack Rewane, has said.
The drop has been linked to the 10.5 per cent rise in bond yields in March as against 9.42 per cent the previous month.
Rewane, in a report by the company last week, said indicators that determine the direction of the benchmark rate, including rates cut from 12 per cent, appear positive except for the continuous weakening of the naira.
He said the national inflation rate slowed to 8.6 per cent year-on-year in March from 9.5 per cent in February. The 0.9 per cent decline in the inflation rate makes the Consumer Price Index the lowest since April 2008 when it was 8.2 per cent.
“Credit to the private sector growth slowed to 8.1 per cent equivalent of N15.26 trillion year-on-year in March from nine per cent year-on-year in February, due to the rise in debt yields to 10.5 per cent in March from the previous month’s 9.42 per cent,” he said.
He argued that since the inflation is below the nine per cent benchmark, the interest rate debate will become more acrimonious and controversial, adding that it will also lead to short position taking by fixed income traders and portfolio managers until May 21, the date of the next Monetary Policy Committee (MPC) meeting.
Rewane said the depreciating value of the naira could be linked to falling oil revenue, resulting from the state of the oil sector, where oil output is plummeting and global oil prices are falling below estimates. Nigeria’s oil production has been declining steadily due to widespread oil theft and pipeline vandalism.
In March, Nigeria’s production declined to 1.97mbpd according to the Organisation of Petroleum Exporting Countries (OPEC). Recently, the Shell Petroleum Development Company of Nigeria (SPDC) declared a force majeure on its production of Bonny Light crude, effectively shutting down 150,000bpd worth of crude.
He said weak global market sentiment and soft demand for oil have played a key role in the downward trajectory of oil prices, adding that the decline in oil prices and production are pointers to the risks posed to Nigeria’s revenue framework, forex inflows and external reserves. Consequenty, he said, the Federal Government might be forced to make necessary adjustments that could be fiscal, monetary and/or structural.
He said interest rate moderation was mainly attributed to base year comparison, adding that there seems to be some fundamental downward drift in prices. He said inflation could rise in April due to the wearing off of the impact of the fuel subsidy strike on the base year.
“Anticipated inflation is more important in determining the direction of monetary policy, especially under an ‘inflation targeting’ policy framework. However, several other factors, such as the growth rate, exchange rate, and external reserves are also considered in monetary policy decisions,” he said.
But Razia Khan of Standard Bank Research, Africa, said the drop in inflation was due to a substantial base effect. She said the figure, which reflects in part, the stability in the forex rate seen in recent months, will lead to new calls for interest rate cut. “Should the improvement in inflation be sustained, then the risk of any easing is certainly higher. However, the recent decline in the oil price remains a key risk factor,” she said.
For her, a second risk factor relates to the price outlook once the substantial base effect has run its course, saying the case for sustained easing may not yet be that clear-cut.
Analysts at Renaissance Capital (RenCap), an investment and research firm, said downward adjustment of the Cash Reserve Requirement would be more effective at relaxing the interest rate, than a rate cut.
The CBN had at its last meeting retained the interest rate at 12 per cent with a corridor of plus or minus two per cent, Standing Deposit Facility at 10 per cent and Standing Lending Facility at 14 per cent. It also maintained the Liquidity Ratio (LR) at 30 per cent and Cash Reserve Ratio (CRR) at 12 per cent.
The firm explained that the decision means that other forms of monetary policy, such as Open Market Operations (OMO), will continue to be the preferred method for managing liquidity.
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The Coordinating Minister for Nigeria’s Economy, Dr Ngozi okonjo-Iweala says the nation’s tax to Gross Domestic Product (GDP) ratio of 7 per cent of GDP Is not sufficient to build a strong economy.
Okonjo-Iweala disclosed this during a presentation at the Spring meeting of the World Bank Group and the International Monetary Fund (IMF) in Washington DC.
The Minister spoke on the topic “Fiscal Policy, Equity and Long-Term Growth in Developing Countries”.at a forum of  the World Bank.
“In my own country, Nigeria, tax to GDP ratio is an unacceptable 7 per cent of GDP as we depend mostly on government’s direct share of oil revenue.
“This has to change,’’ she said.
According to her, the fundamental observation is that for low-income countries, more resources need to be mobilised from domestic sources given the anticipated decline in Official Development Assistance (ODA).
She noted that the IMF estimates that many low-income countries still have tax revenues which fall below the generally accepted threshold of 15 per cent of GDP.
“For example, low-income countries in Africa are below the 15 per cent of GDP.
“Overall, we know that a further increase in tax revenues of about 2-4 per cent of GDP is attainable in many low-income countries.
“Interestingly, investing ODA in building strong tax systems in developing countries can yield excellent returns.
“Some research by the OECD indicates that one dollar of ODA spent on building tax administration capacity results in another 350 dollars in increased tax revenues,’’ she added
Okonjo-Iweala said that in developing countries, policy-makers must first take responsibility for reviewing how resource mobilisation in their economies would be improved.
She said that a complete diagnostic had been carried out, with the help of McKinsey consult, to see how to improve compliance in the tax system.
She noted that about 75 per cent of registered firms were not in the tax system.
“When we looked more closely at our tax payers’ database, we discovered that about 65 per cent of registered tax payers had not filed their tax returns in the past two years.
“The main culprits tend to be this intermediate group of medium-sized professional service providers, contractors, and landlords.
“This non-compliant group fall in the grey area between the informal sector and large companies and I think, from an enforcement viewpoint, we can get a good `bang for the buck’ by focusing on this sector,’’ she said.
Okonjo-Iweala said that the estimated tax leakages due to unpaid real estate rentals in Nigeria amounted to about 250 million dollars per annum. (NAN)

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Manchester United are expanding their marketing activities in the United States to cash in on the interest generated by a new deal for NBC to screen English Premier League soccer, according to the club’s chief executive.
United, owned by the American Glazer family, have proved adept at selling sponsorship deals both globally and nationally, to help fund a team that won a record 20th English league title on Monday night.
The club is looking at adding a sales office on the east coast of the United States later this year, to complement existing operations in London and Hong Kong.
“NBC has the Premier League rights for next season. We should be able to feed off the back of that enhanced and wider coverage,” David Gill told Reuters in a telephone interview.
NBC has paid a reported $250 million to wrest the rights to Premier League games from Fox and ESPN for the next three years.
Interest in soccer is growing in the United States where it has traditionally struggled for media exposure in the face of competition from baseball, basketball and American football.
United, who claim to have more than 650 million followers worldwide, have already attracted sponsorship from General Motors.
The team will have GM’s Chevrolet brand on their red shirts from 2014 in a seven-year deal worth $559 million – the most lucrative of such sponsorship in soccer.
United, listed on the New York Stock Exchange last August, are also negotiating a new agreement with their Kit supplier, Nike.(Reuters/NAN)

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SaharaReporters has learned from sources close to President Goodluck Jonathan that Aigboje I. Aig-Imoukhuede, the controversial head of Access Bank Plc, has been tipped to succeed current Governor Sanusi Lamido Sanusi at the helm of Nigeria’s Central Bank.


“If all goes as planned, Aigboje Aig-Imoukhuede will become the next Governor of the Central Bank,” one of our sources said.

Mr. Aig-Imoukhuede, the Group Managing Director of Access Bank Plc, also enjoys the support of Nigeria’s Finance Minister, Ngozi Okonjo-Iweala, said one source.

The banker, whose closeness to both Mr. Jonathan and Ms.Okonjo-Iweala is well known, is regarded within Nigeria’s financial circles as a controversial figure who has remained unscathed because of his high-powered political contacts. Mr. Aig-Imoukhuede’s ties to Mr. Jonathan and Nigeria’s Finance Minister have helped him obscure his bank’s widespread and obscene involvement in the $6 billion oil subsidy scam that rocked Nigeria last year.

A top level Nigerian financial analyst with deep knowledge of the oil sector told SaharaReporters that Mr. Aig-Imoukhuedeand his bank “should have been on the hot seat over their role in the fuel subsidy fraud.” Instead, the analysts said, President Jonathan appointed the banker to a committee that enabled Mr. Aig-Imoukhuede and Access Bank to escape critical searchlight.

A source told SaharaReporters that current CBN governor, Sanusi Lamido Sanusi, has expressed a desire not to seek a second term at the end of his current five-year tenure. Mr. Sanusi’s term as Nigeria’s current governor of the CBN is due toexpire in April, 2014.

Last year, President Jonathan appointed Mr. Aig Imoukhuede to chair a committee on fuel subsidies. The appointment helped the banker to cover up his bank's involvement in the oil subsidy scam.
Saharareporters.

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Nigerian firms are becoming too big to ignore as recent economic reforms being undertaken in the country are boosting investor confidence. Major fallout of the reforms is the growth of Nigerian companies, with sizes large enough to be included in indices of the world’s biggest stocks.

In 2008, no listed Nigerian firm was large enough to be included in the FTSE 100; a share index that tracks the 100 companies listed on the London Stock Exchange (LSE) with the highest market capitalisation.

By 2013 however, barely five years later, two Nigerian firms can conveniently make it to the FTSE 100. Nigerian Breweries (NB) with a market capitalisation of $7.8 billion (N1.2trn) would be number 62 if it were on the FTSE 100, while Dangote Cement at $16.8 billion (N2.6trn) would be number 39 on the index in terms of market capitalisation.

Analysts say the growth of Nigerian firms highlights the recent raft of economic reforms undertaken by the Federal Government, which has boosted growth and a growing realisation of the investment opportunities present in the country.

“The rise of Nigerian stocks reflects both the boom in GDP, from $46 billion in 2000 to $284 billion in 2012 (IMF estimates), but also the growing appetite to invest in Nigerian stocks. Globally, investors now see the opportunity,” Charles Robertson, economist and head of macro strategy at Renaissance Capital, tells BusinessDay.

“In the Fastest Billion, we estimate that, combined with the GDP revision expected in 2014, Nigeria will be on course to $673 billion by 2020. As a result, many more Nigerian companies would (and probably will) feature on the London Stock Exchange,” Robertson says.

Nigerian equities rallied by 37 percent in 2012, and have risen 18 percent year-to-date.

The Nigerian Stock Exchange (NSE) hopes to see its market capitalisation reach $1 trillion by 2016, which if attained would echo an even bigger rise than that seen in Russia in the 2000s.

“Nigeria is clearly capable of producing business giants and global investors are waking up to the huge potential of the Nigerian economy and its entrepreneurs,” Carl Franklin, head of investor relations, Dangote Cement, says in an email response to questions.

Analysts say the regulators - the NSE, the Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN) and the Ministry of Finance (MOF) - have all strengthened their tool-boxes, by changing the rules of engagement, and insisting on stricter compliance by players.

“Although many of the reforms needed to unlock growth potential are micro in their focus (agriculture, banking, power, oil, etc.), the broad macro underpinnings of the reform environment should not be ignored,” Razia Khan, regional head of research, Africa, at Standard Chartered Bank, says in note released last October - entitled ‘Nigeria - reforms that will change the world.’

The Nigeria economy expanded at an average of 7.2 percent per year for the past five years, according to International Monetary Fund (IMF) estimates.

A new rail link between Lagos in the South to Kano, the main city in the North, has been restored, boosting trade and helping to move agricultural products and cargo more efficiently across the country.

In its assessment released in March, the IMF notes that Nigeria’s low level of external debt, calculated at $6.5 billion, and overall debt-to-GDP ratio of just 17 percent.

The extra yields investors demand to hold Nigerian dollar debt as opposed to US benchmark 10-year Treasury bonds have narrowed since 2012, a reflection of investors’ positive perception of the country’s political and economic stability.

Nigeria’s inflation rate eased to 8.6 percent in March from 9.5 percent in February, the lowest in almost five years, the National Bureau of Statistics (NBS) said last week, partly as a result of CBN reforms of the bond market and tight monetary policy.

Barclays Bank in April added 10 Nigerian sovereign bonds to its $1.7 trillion local currency emerging market bond index, following the addition of Nigerian government bonds last year to the JP Morgan Government Bond Index-Emerging Markets (GBI-EM), after the CBN in 2011 set aside the minimum one year hold period for government bonds by foreign investors.

“It is very unlikely that foreigners would be showing the interest they currently show in Nigeria’s bond market in the absence of reassurance on these reforms,” Khan notes.

Earnings and profit are rising for many Nigerian companies, especially the banks, after their balance sheets were cleaned up following the financial sector reforms.

With the bad debts off their books, the lenders received a new lease of life to restart credit creation.

Guaranty Trust Bank plans to almost double loan growth to 20 percent this year from about 11 percent in 2012, Segun Agbaje, its CEO, said April 8.

Zenith Bank, Nigeria’s third largest lender by market value, reported this month that net income for full-year 2012 rose to N100.68 billion ($636m) from N48.7 billion a year earlier.

The rolling out of wide-ranging reforms across Nigeria’s economy is prompting investors to take a “fresh look” at the country, according to Ed Fast, Canadian Minister of International Trade.

Fast had words of praise for the Nigerian government’s privatisation and anti-corruption reform efforts, telling the global publishing, research and consultancy firm Oxford Business Group that changes introduced in the banking sector, in particular, should enhance the investment climate.

“These ongoing changes will create better opportunities for all Nigerians and for investors from around the world,” Fast said, saying “Canadian businesses are taking a fresh look at Nigeria and the opportunities it presents. They see that the environment is good for business, including a fair and strong regulatory framework to support and protect them.”
Businessday

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Story Highlights
Eurozone factory activity slows to four-month low in April in key business survey
Markit purchasing managers' index falls to 46.5 in April
Index reading below 50 indicates contraction
Germany, eurozone's largest economy, saw index reading fall to six-month low

(Financial Times) -- Signs of weakness clouded the world economic outlook on Tuesday after a leading business survey indicated the contraction in eurozone manufacturing activity gathered pace this month, while industrial expansion also slowed in the US and China.
The closely-watched flash -- or initial -- Markit purchasing managers' index for euro-area manufacturing dipped to a four-month low of 46.5 in April, far below the 50 level that separates growth from contraction. The composite index for Germany, the bloc's largest economy, fell sharply to 48.8, a six-month low.
Separately, Spain's central bank estimated the Spanish economy contracted by 0.5 per cent in the first three months of the year despite a pick-up in exports.
With top eurozone officials increasingly concerned that the bloc has hit the political limits of austerity in the face of growing opposition in recession-hit countries, the gloomy data add to pressure on the European Central Bank to cut rates next week.
 Is Slovenia next eurozone problem? Millions out of work in the eurozone European leaders frosty on Eurozone future
The manufacturing PMIs also suggested manufacturers in the world's two largest economies were suffering from a slowdown in global economic activity.
Julian Callow, economist at Barclays, a bank, said: "The conventional wisdom was that the global recovery would gain momentum as the year rolls on. But if you look at what has happened to manufacturing confidence in recent months, it's looking a little more doutbful that the world economy will pick up in the second quarter."
Last week, the International Monetary Fund called for more economic stimulus after shaving its estimate for global growth this year from the 3.5 per cent forecast in January to 3.3 per cent. The fund also cut its estimate of eurozone output, forecasting that the bloc's economy will shrink by 0.3 per cent this year, rather than the 0.1 per cent contraction predicted at the start of the year.
Even the hawks on the ECB's governing council have signalled they would consider a rate cut from 0.75 per cent if macroeconomic indicators continued to worsen. If the governing council acts next Thursday, analysts say it is most likely to chop a quarter percentage point off the main refinancing rate and leave the zero per cent deposit rate untouched.
But some are sceptical that such a step would have any impact on companies based in the credit-strapped southern euro-area countries. The ECB has acknowledged that the "transmission mechanism", whereby its rates translate into real-world borrowing costs in countries such as Spain and Italy, has broken down.
The flash PMI for the US fell to 52 in April -- the weakest level since last November -- from 54.6 last month.
The manufacturing PMI for the US showed the weakest rise in new orders for six months, although new export orders grew at a stronger rate than last month, indicating a slowdown in domestic demand as part of a delayed reaction to last year's fiscal tightening.
The HSBC/Markit manufacturing flash PMI for China dipped to a two-month low of 50.5, from 51.6 the previous month.
Both the US and Chinese PMIs are relatively new and untested. The manufacturing ISM figure -- the most closely watched barometer of manufacturing activity in the US -- is out on May 1.
 The Financial Times

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The worth of goods imported into Nigeria from Asia in 2012 is estimated to have hit N2.3 trillion, according to a report released by the National Bureau of Statistics (NBS). The figure from Asia, the NBS said, represented 41.2 percent of the country’s imports, when viewed against the total of N5,624.9 trillion worth of cargoes imported into the country in 2012 globally. According to the report, Asia topped the list of regions where Nigeria’s major imports came from, and was followed by Europe and America, which accounted for N1,490.4 billion or 26.5 percent and N1,421.9 billion or 25.3 percent, respectively.

“Within the continent of Africa, Nigeria imported goods valued at N245.6 billion or 4.4 percent out of which Economic Community of West African States (ECOWAS) accounted for N33.8 billion or 13.8 percent,” said the NBS report. Nigeria’s imports at the end of 2012, according to broad economic classification, revealed that goods not elsewhere specified accounted for N1,929.0 billion or 34.3 percent, followed by industrial supplies with N1,321.8 billion or 23.5 percent, and capital goods and parts with N957.9 billion or 17.0 percent.
The structure of import trade was still dominated by the imports of machinery and transport equipment, manufactured goods and commodities. Other major imports of Nigeria during the period under review include vehicles, aircraft and parts, vegetable products, base metals and associated articles, products of chemical and allied industries.
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Yep, it's really starting to look like the bull market is back.
Last week markets were going really wobbly, and everyone was talking about DEFLATION and all that.
Now: Markets are gaining and things are back on course.
Japan rallied to a new five-year high, gaining over 2.3%.
China added 1.5%.
Europe is green across the board, and US futures are higher.
All the commodities have a bid as well.
This comes after a 150 point up day on the Dow yesterday.
BusinessInsider

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The Federal Government is planning to impose a form of luxury tax on owners and operators of private jets in the country, top officials of the Ministry of Aviation have confirmed.

The plan, currently being fine-tuned by the Aviation Reform Committee, which is also looking into certain areas of the aviation sector, will be perfected very soon.

According to the top government officials close to the move, the plan to impose the luxury tax will be preceded by the new general aviation policy, which is currently being drafted by the government.

Ahead of the release of the general aviation policy, the Aviation ministry has reviewed the 2006 Civil Aviation Act, which will lead to the promulgation of a new Act.

It was learnt that the ministry was planning to send the draft Civil Aviation Bill to the National Assembly.

However, the ministry is currently taking the draft bill to some stakeholders for their input and comments.

In the proposed general aviation policy, the government is also planning to stop private jet owners from making use of the Air Operators Certificate. An AOC is a permit that allows aircraft owners and operators to do commercial flights.

Government, it was gathered, reasoned that since private jets owners did not operate commercial flights, it was needless to continue to require them to possess the AOC.

However, sources close to the situation said the proposal to exempt the private jet owners from possessing the AOC before they could be permitted to fly under the policy would be followed up with the introduction of the luxury tax.

A source privy to the plan explained that the luxury tax on all private jet owners. “is patterned after what is in operation in Brazil and most European countries.”

The source said, “You know the government is exempting private jet owners from possessing AOC in the proposed general aviation policy that will be unveiled very soon. As soon as this is implemented, the government will start asking all private jets to pay the luxury tax.”

The official added, “The idea is that since chartered aircraft operators and regular commercial airlines are already paying ticket sales tax and passenger service tax to the government, private jet owners should also pay a form of tax, which most countries of the world called luxury tax. The plan to exempt private jet owners from possessing an AOC before they can fly is just part of the whole policy proposal.

“All these foreign private jets coming into the country must either come under an AOC and be mandated to pay ticket sales charge and passenger service charge, or you stay under private category and pay luxury tax. Once you are flying within the country for some time, you must fall in one of the categories.”

When contacted, the Special Assistant (Media) to the Minister of Aviation, Mr. Joe Obi, said there was the need to wait for the government to unveil the new general aviation policy.

In a text message response sent to our correspondent, Obi said, “Let’s wait for the new policy to be released first.”

If the government implements the luxury tax policy, popular business moguls, bank executives and religious leaders who own private jets will be mandated to pay the tax.

They are the President of Dangote Group, Alhaji Aliko Dangote; Chairman, Globacom, Dr. Mike Adenuga; Chairman, Zenon Oil, Mr. Femi Otedola; General Overseer, Redeemed Christian Church of God, Pastor Enoch Adeboye; and General Overseer, Living Faith World Outreach, Bishop David Oyedepo.

The government had suspended the importation of private jets for some months now, owing to the new general aviation policy being put together by the Aviation ministry.

Top ministry officials said the new policy had been completed, except for some legal details relating to the Civil Aviation Act, 2006.

Private jet ownership in Nigeria grew by 650 per cent from 20 in 2007 to over 150 jets in 2012.

Some wealthy Nigerians had acquired at least 130 private jets with a sum of N1.02tn ($6.5bn) in the last five years, it was gathered.

Some stakeholders, however, reasoned that the new general aviation policy was part of government’s plans to grow Nigeria’s private jet sector, apart from building more private jet terminals at various airports across the country.
The Punch.

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The Pension Reform Bill when amended and passed into law would address some or all of the challenges earlier expressed by the Nigeria Police and other paramilitaries that were making them consider pulling out of the Contributory Pension Scheme, analysts have said.

 Also expected in the reform Bill will be giving the National Pension Commission (PenCom) like the Federal Inland Revenue Services (FIRS) legal powers to seal office or premises of any organization not complying with the Pension Reform Act.

The Presidency last week sent two Bills to the National Assembly, including the Pension Reform Bill for amendment, which is expected would ensure smooth operations of the scheme.  

The Presidency it was would be recalled had directed the Nigeria Police Force to remain under the CPS rather than striving to exit from the scheme, while directing the Pension Regulator, The National Pension Commission to look into their issues and accommodate them in the existing CPS.

Following the exit of the military from the CPS, the Nigeria Police Force, the State Security Service, the Nigeria Customs Service and other paramilitary organisations began threatening to exit the scheme, which analyst said posses great danger to the success achieved in the .

Rather than being permitted to exit the pension scheme, The Presidency advised that while the issues raised by the police authority were valid, efforts should be made by the National Pension Commission (PenCom) to address these concerns within the system.

Analysts maintained that if these institutions are allowed to pull out of the contributory pension scheme, the integrity of the scheme will be hurt and more organisations may pull and could lead to the death of the scheme.

The nation’s Contributory Pension Scheme established under the Pension Reform Act 2004, which was threatened by exist of military and planned exit of police as well as other paramilitary forces, would now see more consolidation as Federal Government has closed the door for such exit.

 This development industry analysts are happy would bring about consolidation in the sector, increase market size, enhance service delivery, ensure overall protection of retirees future and in all, achieve the key objective of the pension reform in the country.

 Total pension assets under management as that end of last year stood at about N3 trillion with 5 million employees both in the public and private sector already registered in the scheme, where the pension assets was growing at an average N20 billion monthly.
BusinessDay

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Nigerians may have spent about N344.34bn on petrol in the first quarter of this year going by consumption figures supplied by the Petroleum Products Pricing Regulatory Agency.

The Executive Secretary, PPPRA, Mr. Reginald Stanley, had during an interactive session with journalists in Lagos on Monday said Nigerians consumed 38.298 million of litres per day between January and March, 2013.

“In terms of quantity, the average daily provisional PMS supply of 38.298 million litres was recorded as at March 2013,” Stanley had said.

Going by this, 3.446 billion litres of petrol on the average must have been consumed in the country in the first three months of the year, which had 90 days.

At the official pump price of N97 a litre, the sum of N334.34bn must have exchanged hands between consumers and oil marketers within the period.

While N115.16bn must have been spent in January, investigation revealed that the February and March figures must have been N104bn and N115.16bn, respectively.

According to the PPPRA boss, the 38.298 million litres daily petrol consumption is 36.41 per cent lower than the PMS daily supply of 60.259 million litres per day for 2011.

Analysts said the 60.259 million litres per day of PMS figure in 2011 was a clear reflection of the pervasive malpractices prevalent in the downstream sector before the bubble burst in November of the same year.

Stanley said the current fuel consumption in the country was a great deviation from what obtained as of November 2011.

“Some of the challenges of the government as of November 2011 were continuous crude oil price volatility and its effect on products cost; and high and rising government exposure to subsidy under the Petroleum Support Fund Scheme,” he said.

PPPRA records had shown that daily fuel consumption was 25.924 million litres per day in 2006; 26.385 million in 2007; 33.527 million in 2008; 36.812 million in 2009; and 46.906 million in 2010.

But the consumption pattern recorded a sharp increase to 60.259 million daily in 2011, an import and consumption volume, which Stanley said, was unparalleled in the nation’s history.

The 36.41 per cent drop in daily fuel consumption in the first quarter of 2013, according to the PPPRA boss, reflects that the downstream oil sub-sector has undergone massive sanitisation.

As part of the sanitisation, Stanley said the PPPRA had restricted downstream participation to only owners of coastal discharge/depot facilities.

This strategy, he explained, had helped the agency to bar 99 briefcase oil marketers from the industry.

He said, “The petroleum subsidy scheme management system has now been so drastically reformed that there is now greater transparency in the scheme.

“There has been improvement in compliance levels by marketers to PPPRA’s guidelines, instructions and policies, especially by the Nigerian National Petroleum Corporation.”
The Punch

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MTN Nigeria on Tuesday obtained a medium-term loan facility of N470 billion ($3bn) from a consortium of 17 local and seven foreign banks. According to Brett Goschen, CEO of the telecoms company, the facility consists of $1.8 billion in additional facilities and $1.2 billion in restructuring and rollover of existing facilities.

The facility, arranged by the firm itself, had Guaranty Trust Bank as co-ordinating bank for the local lenders. The facility is meant to strengthen its capital base and re-align its operational and marketing strategies to meet the growing demands of its teeming subscribers, Goschen says.

The local banks are – GTBank, FirstBank, Zenith Bank, UBA, Access, Keystone, and FCMB. Others include Standard Chartered, Citibank, Diamond, Ecobank, FSDH, Rand Merchant Bank, Nigeria,  Mainstreet, Union, and Fidelity.

The foreign banks are – KFW Bankengruppe (Europe), RMB – SA, EDC of Canada, Nedbank, ICBC, China Development Bank, and China Construction Bank.

Andrew Bing, chief financial officer of the company, says 70 percent of the total loan amount is in local currency - the naira, while the remaining 30 percent is denominated in the US dollar, saying  though borrowing in local currency is more costly, but the company had to hedge against risk and volatility, as “we needed to manage our currency risk profile.”

The mobile network company also discloses at the loan-signing ceremony that it had reached the 50 million subscriber mark, controlling over 42 percent of Nigeria’s vibrant telecoms market, noting it will deploy the proceeds to various network expansion initiatives across Nigeria.

But industry analysts tell BusinessDay that the telecoms firm is also bracing up for the heightened competition the commencement of number portability scheme will pose.

With the launch of the scheme, Nigeria’s 114 million mobile phone lines can now retain their phone numbers when changing from one network to another. “The power and freedom of choice now rests with the subscriber. If a customer is dissatisfied with the service quality on a particular network, he or she can port to another network,” Eugene Juwah, executive vice chairman, Nigerian Communications Commission (NCC), said on Monday, at the launch of the service.

Mobile networks in the country will all be gunning for more market share as they jostle to either lure new subscribers onto their respective networks or retain existing subscribers. As at the third quarter of 2012, according to Renaissance Capital, South Africa’s MTN still dominated the telecoms market with 42.5 percent market share.

India’s Airtel and Globacom have 19.7 percent and 20.7 percent market share, respectively, while UAE’s Etisalat has a 13.4 percent market share.

Market analysts envisage that there would either be an upward or downward movement in market share of mobile network operators. This is even as telecoms subscriber earnestly search for better quality of service, reduced phone tariffs and innovative products and services.

But industry analysts say that MTN, as the market leader, fully understands the implication of the mobile number portability. The telecoms company will however be looking at channelling significant portions of the medium-term loan facility toward innovative product development, improved customer contact centres, mobile data and broadband infrastructure deployment - all in an attempt to cement its position as the dominant player in the telecoms market.

Speaking at the formal signing of the loan agreements in Lagos on Tuesday, Goshen, the CEO, describes the development as “another successful landmark in the history of MTN and the Nigerian financial services industry in collaboration with international banks.”

This record-breaking deal, according to him, follows the raising of a $2 billion facility in 2010 from 15 local banks and two international lenders, which was adjudged as the largest corporate financing deal in the whole of sub-Saharan Africa. At the time, it was the largest facility granted to a single country operator in Africa.

MTN Nigeria also won the award for its maiden financing in 2003. “The restructured and additional facilities will enable us to continue with the aggressive investment in our network... over $1.5 billion in 2013 alone, to take advantage of the demands of our customers and the growth opportunity,” he says. The naira tranche of the facilities has a tenor that has been revised from five to seven-year repayment profile.

“The debt mix is substantially driven by the local market. The total debt profile is $3.3 billion. The funding will be used for general purposes and capital expenditure on network expansion. The funding is insecure because the lenders have strong confidence in MTN,” Andre Bing, chief financial officer, MTN, says.
Businessday

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