Dec. 12th-16th_ 05 by welcomegong2


									Summary of business and economic news Dec. 12th-16th, 05

Monday, Dec. 12th


FT names Soludo global bank governor of the year - The Governor of the Central Bank
of Nigeria (CBN), Prof. Charles Chukwuma Soludo, has been named the African and
global Central Bank Governor of the Year by The Banker magazine; the world's leading
magazine on global banking published by the Financial Times of London. In a letter to
Prof. Soludo, dated December 8, 2005, the editor of The Banker, Mr. Brian Caplen, stated
that the award was in recognition of the latter’s considerable efforts to reform the
Nigerian banking system. The judges, he explained, particularly took notice of the
prescription of new minimum capital requirements for banks which has led to an
unprecedented and successful consolidation in the banking sector in barely one year.
Among the main highlights of Prof. Soludo’s notable achievements are a fundamental
restructuring and reorientation of banking business in Nigeria within a record period of
one year. The judges were also stated to have been swayed by the enormity of investment
inflow into the banking sector as a result of the consolidation which has been expected to
hit the US$3 billion mark by the end of this month; about US$500 million of which
originated from abroad.

It was disclosed that no policy had raked in so much investment into Nigeria's non-oil
sector within a period of one year in the country's entire history. The impact on the
capital market has also excited foreign observers of the Nigerian economy. As at the
beginning of the banking sector consolidation in July 2004, the share of the banking
sector in the market capitalisation of the Nigerian Stock Exchange, (NSE) was about 24
per cent, but by September, it had risen to almost 50 per cent, making banking sector
stocks the preferred stocks on the exchange. The Soludo-inspired consolidation
programme is also reputed to be the least-cost, industry-wide restructuring of the banking
system anywhere in the world, having cost, as at the beginning of December, a paltry one
per cent of Gross Domestic Product (GDP). The Malaysian experience which until now
held the world record cost four per cent of the country’s GDP. A less appreciated impact
of the consolidation exercise has been the boost in the savings and investment habits of
the average Nigerian. Artisans, market women, civil servants, members of the armed
forces and students have become shareholders in Nigeria's consolidating banks. This has
had the double effect of bringing into the formal sector, large funds that were hitherto
trapped in the infamous informal sector, and further boosting financial and investment
awareness among Nigeria's informal sector operators. The Central Bank of Nigeria under
Soludo's leadership is also applauded to have successfully delivered on its commitment to
businessmen and investors to maintain a stable naira exchange rate within a tight band of
three per cent announced at the beginning of 2005.


'Nigerian economy has entered high-growth phase' - Managing Director/Chief Executive

Officer of Prudent Bank Plc, Mr. Akinsola Akinfemiwa, has stated that the Nigerian
economy has entered a high-growth phase as indicated by the impressive economic
performance between 2001 and 2004. Whilst analysing Nigeria's economic performance,
the Prudent Bank’s boss disclosed that the Gross Domestic Product (GDP) has been on
the upward trend, rising from 3.3 per cent in 2001 to 6.1 per cent in 2004. He noted that
the growth was driven by the high price of crude oil at the international market.
Similarly, he revealed that the income per capita increased by 43 per cent to US$443
while year-end inflation decreased from 20.5 per cent in 2001 to 9.5 per cent in 2004.
The decrease was driven by exchange rate stability and fiscal prudence in government
spending. Mr. Akinfemiwa also stated that the development in the Nigeria's
telecommunication sector evidenced by the entrance of new networks, has led to the
reduction in the unemployment rate in the country. All these indicators, he noted, have
translated into the re-emergence of the middle class and better income distribution. He
believed that the ongoing reforms in the financial sector of the economy will help set the
stage for the revitalisation of the country's manufacturing sector. He also affirmed that
that the crusade against corruption, if well implemented, will enhance good corporate
governance both in the public and private sectors. He remarked that the ongoing
privatisation exercise, particularly of major utilities in power and telecom sectors, was
expected to stimulate a private sector-led economy that would drive economic growth
and development. He also stressed that the implementation of the National Economic
Empowerment and Development Strategy (NEEDS), would also improve international
ratings and attract foreign investment, given the improved political and economic climate
of the country. Mr. Akinfemiwa added that if the government was committed to prudent
spending; to sustaining low inflation; as well as to keeping budget deficit below 3 per
cent of GDP, interest rates in the economy would significantly reduce, thereby increasing

Tuesday, Dec. 13th


Nigeria’s oil production may drop on OPEC’s .3mbpd cut - The Organisation of
Petroleum Exporting Countries (OPEC), has decided to cut production for next quarter by
300,000 barrels per day (bpd); a decision that would see a reduction in Nigeria’s
production quota. The decision to cut production was reached at the end of the
conference of ministers’ meeting yesterday in Kuwait. This means that Nigeria’s
production level, which is currently 2.4 million barrels per day, will now drop a notch
which is yet to be determined by the organization. The situation has probably left the fate
of Bonga, which came on stream with about 250,000 bpd, on the balance. According to
the OPEC’s President, Sheik Ahmad al-Sabah, the conference considered the outlook for
2006 and noted that the ceiling of 28 million barrels taken during its 136th extraordinary
meeting would be adequate if fully observed to balance the market for the first quarter of
the year. He added that OPEC was determined to take all measures deemed necessary to
keep market stability and maintain prices at reasonable levels through adequate supplies.

The Guardian

N1.9b handset factory takes off in Abuja - About 5,000 mobile handsets are to be
produced locally on a daily basis when a mobile handset factory officially takes off in
Abuja. The handsets, which are expected to inundate the Nigerian market from January,
2006, will be manufactured by a company owned by ZTE Nigeria Limited. Inspecting the
factory at the weekend, the Executive Secretary of the Nigerian Investment Promotion
Commission (NIPC), Mr. Mustafa Bello expressed satisfaction at the quality of the
prototype handsets already produced by the company. Calling on investors to consider
Nigeria as the preferred investment destination to set up their businesses, he stressed that
many returns existed on investments made in the country. In his remarks, the President of
ZTE International Marketing Division, Mr. Zhang Peng noted that his company was
happy to invest over US$30 million in Nigeria. Announcing that the company's factory
would be commissioned this month, he stressed that the company would soon be
producing about one million handsets per annum. Mr. Peng reiterated that the handsets
would 'flood' the Nigerian market from January, 2006, adding that the quality of the
handsets would be comparable to those manufactured by other companies across the

Consolidation: banking sector records N13b capital inflow, says CBN – As the banking
sector consolidation exercise in the country cruises to an end by December 31, 2005, the
Central Bank of Nigeria (CBN), on Friday stated that the exercise had attracted foreign
capital investment inflow to the sector to the tune of US$86 million (about N12.4 billion)
The Director of Financial Sector Surveillance at the CBN, Mr. Ignatius Imala made the
disclosure at the 7th CBN Seminar for Finance Correspondents and Editors in Calabar,
the Cross River State capital. He indicated that as at December 8, 2005, 84 banks in the
country had fused into 22 banks group, while an estimated N359.1 billion was raised by
the banks from private placements and public offers. The apex bank’s director explained
that as a result of the consolidation exercise, some of the unemployed bank chief
executives whose banks were going to loose their licenses by end of December, were
currently jostling for general manager and even non-executive positions in capitalised
banks. He noted that the CBN has carried out additional capital verification of 41 banks
and efforts were being made to ensure that capitalised funds did not originate from people
who have been blacklisted by the CBN and banned from operating in the financial sector;
or from non-transparent sources. CBN’s Governor, Prof. Charles Soludo has stated that a
vibrant banking industry played a major step towards the overall development of the
economy. He also stressed the need to maximise the God-given potentials and fast track
the processes of revolutionalising the economy by making the banking sector work

SMEDAN board assures on SME development – A newly-constituted board of the Small
and Medium Enterprises Development Agency of Nigeria (SMEDAN) has pledged
assistance to the Agency to realising its mandate for SME development in Nigeria.
Chairman of the Board, Chief Cletus Ibeto who made the pledge during the its inaugural
meeting, believed that the SMEDAN as a facilitator of small businesses, would
definitely move the nation towards attaining the long-awaited and much-desired

revolution in the nation's industrial sector. He stated that SMEDAN would not only help
small-scale entrepreneurs remain in business, but would also encourage more Nigerians
to venture into business activities as it would allay the fears that so often deter
prospective entrepreneurs. Chief Ibeto noted that because of the importance the President
has attached to micro, small and medium enterprises, the new Board was determined to
support and rally round the Agency. In her welcome address, SMEDAN’s Director-
General, Mrs. Modupe Adelaja stressed the need for the support of the Board to enable it
to achieve its objectives of facilitating and promoting the growth of SMEs. She also
reiterated the need to expedite action on the issue of National Policy on Micro, Small and
Medium Enterprises (MSME). Mrs. Adelaja revealed that the Nations Development
Programme (UNDP) country officials, as well as consultants appointed by UNDP, would
assist SMEDAN develop a national policy for the sustainable growth and development of
the industrial sector. She added that the UNDP would also assist SMEDAN in other
priority areas which include: core skill upgrading and knowledge enhancement in
SMEDAN; development of management information system; assessment of support
services needs for improving identified SME clusters; and formulating a baseline study
for the establishment of SME cluster in the states. Expressing confidence in the team of
consultants that were selected, the Director-General encouraged them to work closely
with SMEDAN in order to select and achieve the common goals of the Federal
Government of Nigeria and the UNDP.

Telecoms operators list terms for unified licensing - If the unified telecommunications
licensing policy slated for February, 2006 is to achieve the desired results, the Nigerian
Communications Commission (NCC) must address certain anomalies; private
telecommunications operators (PTOs) have stated. High on the lists of issues the PTOs
want the NCC to urgently address are : the recurrent unfavourable interconnect regime to
the advantage of the Global System of Mobile Communications (GSM) operators;
alleged traffic dumping by bigger operators; as well as high pricing by GSM operators.
The private telecommunication operators have stated that unless the stated anomalies
were addressed and corrected, the planned unified licensing or multi-service licensing
policy may suffer a still birth. In an articulated working paper sent to Dr. Ernest
Ndukwe, the NCC’s Chief Executive Officer, by Mallam Bashir el-Rufai, the CEO of
Intercellular Nigeria Plc, on behalf of PTOs, he urged the Commission to urgently
address the bottlenecks, in order to create a more viable operating environment before
introducing the new licensing system. Under the current interconnect regime, PTOs pay
N11.52 per minute to GSM operators, while the latter pay N5.52 to PTOs per minute for
any call terminated. The PTOs also want the NCC to provide an enabling environment
for all operators through the provision of stable and constant power supply; low tax
regime; zero import taxation on telecommunications equipment; as well as the reduction
and moderation of interest rates in bank borrowing and lending, which presently stand at
25 per cent.

The NCC had in October disclosed that the country had attained 17 million lines and was
capable of meeting the United Nations’ Millennium Development Goals target of
providing 50 per cent of the population with telecommunications services by the year
2010. With the unified licensing or multi-service licensing regime, any operator could

offer various services across the board, with no restriction on the type of services or
technology the operator deploys.

Wednesday, Dec. 14th

The Guardian

Gas to fetch Nigeria N1.3tr by 2010, says Kupolokun – Nigeria is expected to earn
US$10 billion (about N1.28 trillion) from the sale of liquefied natural gas (LNG) by 2010
despite the delay in the commissioning of trains 4 and 5 of the Nigeria Liquefied Natural
Gas on Bonny Island in Rivers State. The Federal Government and its oil industry
partners have concluded arrangements to establish a nodal architecture for gas while de-
emphasising project-specific gas developments. Dr. Funsho Kupolokun, the Group
Managing Director of the Nigerian National Petroleum Corporation (NNPC), made the
disclosure in London at the weekend while speaking with newsmen before the meeting of
the board of the Brass LNG. He pointed out that government was encouraged by the
returns on investment in gas monetization, noting that a number of expected gas projects
would come on stream before the turn of the decade. The projects are expected to yield
good returns. He attributed the delay in the commissioning of the NLNG trains 4 and 5 to
issues relating to gas supply which have since been resolved.

Shell Exploration, Sunlink sign development pact on OPL 238 – Sunlink Petroleum
Limited and Shell Nigeria Exploration and Production Company Limited (SNEPCO)
have formally finalised and signed a joint operating agreement in respect of oil
prospecting license OPL 238. Earlier this year, Sunlink and SNEPCO entered into a
Heads of Agreement and Farms-In Agreement which culminated in the Joint Operating
Agreement formalised recently. By virtue of the Farm-In, SNEPCO, which holds 40 per
cent equity interest in the block, will have primary responsibility for operations in the
block in its capacity as technical partner to main license holder, Sunlink. Dr. Olumide,
Sunlink's Chairman/Managing Director has expressed delight in the partnership, stating
that his company looked forward to working closely with Shell on all aspects of oil and
gas operations. He hoped that in the longer term, the company will develop into a fully
independent operator in Nigeria. Mr. Chima Ibenechi, SNEPCO's Managing Director, has
stated that his company’s priorities were to effectively leverage the company’s
technology and expertise; as well as to develop and produce the hydrocarbon resources in
the concerned block to the benefit for all stakeholders. Sunlink Petroleum, the original
license holder OPL 238, is an indigenous exploration and production company with a
long standing presence in the Nigerian oil and gas industry. OPL 238 is mainly an
offshore gas block in water depths of about 100 metres, which upon development, will
likely have its production of gas commercialised through one of the planned Shell LNG
projects at either Olokola or Bonny. The development is expected to create value to both
stakeholders in the license.

Nigeria needs about N2 trillion to meet MDGs in telecoms – About US$15 billion (about

N2 trillion) is needed as investment in Nigeria if it must meet the Millennium
Development Goals (MDGs) in telecommunications’ penetration. The United Nation's
MDGs, among others, listed ways and means of making telephones available to the 50
per cent of the global population by 2015. However, according to the chief regulator and
boss of the Nigeria Communications Commission (NCC) , Dr. Ernest Ndukwe, Nigeria's
ambition is to meet the target by the year 2010, considering its current growth rate. He
explained that in order to surpass the goal in developing countries, the following points
must be considered: efficient use and deployment of wireless technologies particularly
mobile networks; forward-looking government policies with respect to market
liberalisation, competition, and taxation; appropriate regulatory approach to spectrum
allocation, pricing and management; as well as an appropriate regulatory approach to
reducing barriers to market entry by eliminating onerous licensing processes. The Private
Telecommunications Operators (PTOs) have stated that they agreed with the NCC’s
growth index and the proposed unified licensing due for February, 2006. However, they
have requested that NCC addresses grueling issues negatively affecting their operations
such as the anti-competition antics of GSM operators and traffic dumping.


Nigeria has little gain at WTO - Nigeria has little to gain from the sixth ministerial
conference of the World Trade Organisation (WTO), taking place in Hong Kong, as
agriculture becomes the key issue at the gathering of 148 countries. It is estimated that
the share of sub-Saharan Africa in global trade is about one per cent, with Nigeria having
about 0.2 per cent of global trade. The continuous subsidy provided by the developed
countries of Europe and America to their farmers so that they could export their farm
produce at below market prices, has been a point of constant disagreement between
developed and developing countries. Developing countries insist these subsidies should
be removed to create a more level playing field for all farmers of the world. The
developed world has however stated that they need the subsidies to protect their farmers.
While the developed world is insisting on these subsidies, they are simultaneously
discouraging such subsidies in the developing countries like Nigeria, even as they are
requesting that developing countries like Nigeria reduce their tariffs, in order to allow
greater access to their (developed countries’) hi-tech products. For most developing
countries, the stance of the developed countries of Europe and America is unfair. Mr.
Pascal Lamy, Director-General of the WTO has disclosed that decisions had been
reached on increased market access for agricultural products, as well as on the removal of
domestic supports and subsidies. He noted that export subsidies on agriculture would
soon be completely eliminated. Analysts are quick to point out evidence of the lack of
capacity for sub-Sahara African countries to take advantage of any positive deal on
agriculture. In fact, the textile firms in Nigeria are still comatose and are also struggling
with heavy competition on textile imports from China and most of South East Asia. It has
also been reiterated that gains from the removal of subsidies on agriculture, as well as
increased market access are expected to be enjoyed mainly by China, India, Brazil and
other faster developing countries.

Oceanic Bank’s shareholders funds now stand at N31bn - Oceanic Bank has put the issue

of re-capitalisation well behind it, with its shareholders' funds standing at N31.1 billion;
at the close of its 2005 financial year, on September 30, exceeding the N25 billion capital
base requirement set for banks by the Central Bank of Nigeria (CBN). Moreover,
measured by all major indicators; from turnover to profitability; as well as returns on
capital employed; Oceanic Bank posted superlative performance, consolidating its
position in the league of top five banks in Nigeria. The bank's asset base plus
contingencies, recorded a leap of over 167 per cent to N281.14 billion from N105.38
billion in the preceding year. Investors are certain to benefit from the bank’s posting of a
profit before tax of N7.3 billon, a 111 per cent leap from the previous year's N3.4 billion.
Profit after tax stood at N5.9 billion; as against N3.3 billion in the 2004 financial year. Its
turnover for the year also grew by 93 per cent to N24.3 billion; as against N12.6 billion
of 2004 financial year. Oceanic Bank's returns on shareholders investment, in terms of
dividend payout was also further enhanced; rising to N2.98 billion as against N1.5 billion
in 2004. The dividend translates to 32 kobo per share as against N25 kobo that was paid
in the preceding year. Its deposit base also increased by over 143 per cent to N167.4
billion, up from N68.9 billion recorded in the preceding year. The bank's liquidity
position also got a good boost in the financial year as its cash at hand and short-term
funds increased significantly to N119.53 billion from N51.4 billion recorded in the
corresponding period of 2004. To further increase its revenue base and also enhance its
retail operations, the bank increased its business offices in the country during the year to
over 100; compared to 53 in 2004. The bank's funding of the real sector of the economy
also increased to N35.39 billion as against N12.93 billion of 2004. Oceanic Bank's great
run on all financial indices over the years, has been attributed to its sound management;
continuous quest for innovation; robust ICT platform; and human capital development;
on which insiders have stated that it depends for a guaranteed place among the leading
banks in the post-consolidation era.


Steel sector fully privatised, says Imoke - Minister for Power and Steel, Senator Liyel
Imoke, yesterday stated that government has successfully completed the divestment of
its stakes in the sector, having transferred management of the former parastatals to private
hands. The affected parastatals include: Ajaokuta Steel Company Limited (ASCL); the
Nigerian Iron Ore Mining Company (NIOMCO); and Delta Steel Company
Limited (DSCL), Aladja, Delta State, (the latter) whose concession bids were won by the
Indian firm, Global Infrastructures Nigeria Limited. Moreover, the biding processes for
the Inland Rolling Mills based in Jos, Katsina and Osogbo have almost been concluded.
Inaugurating members of the boards of the National Metallurgical Development Centre
(NMDC); the National Steel Raw Materials Exploration Agency (NSRM-EA); and the
Metallurgical Training Institute (MTI); the Minister disclosed that the decision of the
government to privatise all the steel companies was to save the sector from total collapse.
He revealed that ASCL and NIOMCO have been concessioned; that DSCL has been
privatized; while the three inland rolling mills were being liquidated. He also explained
that the three parastatals whose boards were being inaugurated have been assigned the
crucial role of providing the necessary support and ancillary services required by the
privately-run steel plants.

Commenting on the approved refocusing of the programmes of the Metallurgical
Training Institute, Onitsha, Senator Imoke noted that the exercise was meant to achieve
wider application and recognition of the Institute's diplomas and certificates by
expanding the scope of coverage of courses being run by the establishment.

Thursday, Dec. 15th

The Guardian

Governor savours partnership with private sector - Governor Chimaroke Nnamani of
Enugu State has described the private sector as a major partner in the government's step
towards sustainable socio-economic development of the state. The Governor, who made
the statement while commissioning a multi-million naira hotel, Roban Hotels Limited, in
Enugu recently, noted that the success story of economic development of the state was
made possible by the organised private sector and artisans. He explained that his
administration was committed to providing all the necessary facilities that would improve
the investment climate of the state. He disclosed that the on-going infrastructural
development projects embarked upon by his administration in recent times were targeted
at restoring the state to its past economic and social glory. Whilst thanking Sir Rob
Anwatu, the proprietor of the hotel, for his contribution to the economic growth of the
state, he promised to rehabilitate the access road to the hotel complex as the government's
contribution to Sir Anwatu’s investment in the city. The Governor noted that the stream
of new investments were a vote of confidence and trust in his administration. He also
stressed that the establishment of the hotel would serve as an inspiration to other potential
investors, adding that government would continue to make Enugu a home for all. He
added that his administration would ensure that all established investments were
adequately protected.


Afribank, NNPC take over AP - Afribank Nigeria Plc. and the Nigerian National
Petroleum Corporation (NNPC), have emerged core investors and largest stakeholders in
African Petroleum (AP) Plc. The shareholders of AP passed the resolution at an extra-
ordinary general meeting held yesterday in Lagos. Afribank, through Asset Management
Nominees Limited (ASEMA), its wholly owned subsidiary, acquired a 34 per cent equity
stake in AP, making the bank the core investor in the oil marketing company. (Sadiq
Petroleum had originally held the shares having emerged as core investors following the
privatisation of AP and the divestment of government interest). NNPC also holds a 28 per
cent stake, representing N10.195 billion debts owed it by AP, which have now been
converted into equity interest. The staff of AP holds 10 per cent, while other Nigerians
hold the remaining 28 per cent. ASEMA had stated that its decision to invest in AP was
based on the confidence it had in the management of the company, as well as the
potentials of AP. Beside ASEMA, other substantial shareholders of AP that are related to

the Afribank Group include: Fidelity Finance company Limited; Nigeria Social Insurance
Company Limited; Long-term Ventures Limited; AIL Securities Limited; Osa Osunde;
Patrick Akinkuotu; and Sebastine Adigwe. All shareholders of AP at the meeting gave
their support for the conversion of the NNPC debt into equity stake. They also proposed
that the future sale of the underlying shares by NNPC should be offered to ASEMA as
contained in the agreement between NNPC and AP Plc. The development, they opined,
would help to ensure the future stability of the management and board of AP Plc. Market
observers believe that this latest development would stabilise the company and prepare it
for smooth operations that would significantly improve shareholder’s value. AP has been
plunged into controversy since the discovery of undisclosed debt profile of about N20
billion which it had accumulated prior to its privatisation and sale to Sadiq Petroleum, the
original core investor.


'Alamieyeseigha's arrest, victory for anti-graft war' - The arrest of the Bayelsa’s State
Governor, Diepreye Alamieyeseigha, preceded by his impeachment by the State House of
Assembly is a victory for anti-graft and rule of law, a US-based group, Vision For
Nigeria (VFN) has stated. Reacting to the development of the Governor’s arrest, leader of
the group, Mr. Elvis Ndubueze noted that the administration of President Olusegun
Obasanjo has again proved to stand for truth; the rule of law and good governance; by
ensuring that any issue that would bring ignominy to the country was addressed
accordingly. Specifically, regarding the removal and subsequent arrest of Governor
Alamieyeseigha, Mr. Ndubueze explained that the manner in which the Governor had left
London was such that if not handled by the government, it would have earned the country
a lasting stigma. He however advised the new Governor of the state, Mr. Goodluck
Jonathan, to be wary of the circumstances that got him to office and advised him not to
fall in similar manner. He opined that the plight of the people should be paramount to
Governor Goodluck and added that he should work assiduously to ensure that the state’s
citizens receive the basic needs of life, comparable to other parts of the country.

M.T African Pride: 15 expatriates convicted; freed - Fifteen expatriates standing trial
before a Federal High Court, Lagos, over illegal oil bunkering were yesterday jailed for
six months. The accused persons, 11 Russians, two Romanians and one Georgian, had
pleaded guilty to a one-count charge of unlawful possession of 11,300 metric tonnes of
crude oil in a vessel, M.T. African Pride, after their fresh arraignments yesterday before
two different judges of the Federal High Court. They were, however, freed on the
grounds that they had served their jail terms in Kirikiri prisons, where they were detained
for about 23 months. The judge, who stated that the period already spent by the accused
in detention was taken into consideration in giving the verdict, also ordered the
immediate release of their passports. Worried by the delay in the trial of the expatriates
before the Nigerian court, the Russian government had written the Nigerian government,
expressing dissatisfaction in the conduct of the trial. The letter which was signed by
Russian Foreign Minister, Sergei Lavron, who had noted that the continued detention of
its citizens in Nigeria on the unproven charge of oil contraband, had impacted negatively
on Nigeria's democratic principles and did not contribute to cooperation between Russia

and Nigeria. The development prompted the Presidency to direct authorities of the court
to hasten the trial. Consequently, the Chief Judge of the Federal High Court, Justice
Roseline Ukeje, who presided over the matter in August, admitted the accused persons to
bail. They were released on bail on September 12, after they had met their bail
conditions. The foreigners had subsequently been attending the trial until yesterday when
they were finally released.

Friday, December 16th


CBN sets N1bn capital base for micro-finance banks - The Central Bank of Nigeria
(CBN) has set the minimum paid up capital for microfinance banks at the state level at
N1 billion as it rolls out policy framework for the sub-sector. The policy launched by
President Olusegun Obasanjo, also sets the minimum paid-up capital for this category of
banks that will operate at local government level, at N20 million a branch. The policy has
also mandated the state and local governments to dedicate one per cent of their yearly
budgets to support lending activities of microfinance banks in favour of their residents.
With this new policy, all community banks operating in the country now have two years
to raise their capital to either operate as a unit bank or at the state level. Charles Soludo,
Governor of the CBN, at the public presentation of the policy, noted that it was prompted
by the dissatisfaction of the government with the present situation in the country. He
expressed regret at the low level of micro-credit in the country and stated that micro-
credit as a proportion of Gross Domestic Product, was only 0.2 per cent; and as a
proportion of total credit, was only 0.9 per cent. He acknowledged that the policy had the
capacity to generate two million jobs yearly, adding that microfinance was the engine for
poverty reduction.

President Obasanjo, while launching the new policy, stated that it would ensure the
coverage of more than 40 million economically active Nigerians who were not currently
served by the existing formal financial system. He explained that credit or finance was
the lubricant of every economy and asserted that any economy without a stable
macroeconomic environment and a sound financial system, could not meet the needs of
the nation in the contemporary global system. Whilst assuring that the government would
continue to provide the enabling legal, macroeconomic and regulatory environment, he
emphasized that much of the micro-level interventions should be at the state and local
government levels. He added that the policy would help the poor to become more
involved in economic activity, thereby raising their level of well-being and prominence in
society. The microfinance policy seeks to create microfinance banks that will provide
capital to the 65 per cent un-served populace.

Mortgage: FG raises N230bn from capital market - The Federal Government announced
yesterday that it has raised N230 billion from the capital market for the reinforcement of
its secondary mortgage financing initiative. The disclosure was made by the Minister of

Housing and Urban Development, Mr. Olusegun Mimiko in Abuja at a ministerial press
briefing, who stated that the sum was an over-subscription of the proposed bond. He
explained that the Ministry had earlier proposed a total of N100 billion bonds for a two-
phase issue at N50 billion each, as mortgage-related securities traded on the nation’s
capital market. Mr. Mimiko also revealed that the Ministry, by October, had refunded
over N100 million to 5,350 ceding contributors into the National Housing Fund (NHF),
bringing the cumulative refund to N318 million to 27,128 depositors. Between January
and October 2005, over N3 billion was collected as NHF contributions from the N5
billion target for 2005; raising the cumulative collection to over N18 billion as at
October, representing about 77 per cent of the targeted sum (up from N4 billion for
2004), and an increase of 97.4 per cent over the total collection of about N2 billion within
the same period. The Minister explained that the cumulative collection before the current
reforms was N10, 359, 236, 380 but that in comparison, the NHF collection has grown by
78 per cent in less than three years of the housing reforms. He also remarked that
concerning the Public Private Partnership (PPP) estate initiative, loans amounting to
about N20 billion were approved for the development of 11,216 housing units across the
country. He added that all federal government estates nationwide would soon be disposed
off in order to achieve full participation of the private sector in the housing sector while
government would provide the enabling environment for the private investors.


NNPC, Chevron to build 30,000 bpd refinery - The Nigerian National Petroleum
Corporation (NNPC), yesterday stated that it had concluded plans to build a new refinery,
in joint venture partnership with US oil major Chevron, which will have the capacity to
process 30,000 barrels per day (bpd) of crude oil. The Group Managing Director (GMD)
of the NNPC, Mr. Funsho Kupolokun disclosed that the contract for the construction of
the plant, which would be sited in the Escravos area in the Niger-Delta region, would
soon be awarded. He stated that production from the refinery was to be skewed towards
more diesel and fuel oil volumes, adding that the Corporation planned to use the venture
as a launch pad for its engagement into “the business of legal and licensed bunkering".
Commenting on the state of the existing refineries, the GMD affirmed that all the four
refineries were performing at above 75 per cent output and were meeting the
requirements of the nation. He explained that the recent acute shortage of petroleum
products that have hit certain states was due to a one-day sympathy strike by tanker
drivers over the loss of two of their members during the recent MASSOB protest. The
NNPC boss noted that the country had more than a month's worth of product reserve. Mr.
Kupolokun also noted that the government hoped to adopt a price modulator to ensure the
sustenance of steady supply of products in the country next year. He revealed that details
of the proposed mechanism would be worked out between the Petroleum Product Pricing
Regulatory Agency and other stakeholders. Giving a progress report on government's
strategy to monetise the nation's abundant gas resources, he added that construction work
on the West African Gas Pipeline Project had been progressing rapidly while the report of
the feasibility study on the Trans-Saharan Gas Pipeline have been submitted to sponsors
of the project.

Obasanjo: Globacom has redeemed Nigeria’s investment Image - President Olusegun
Obasanjo yesterday expressed the nation’s gratitude to second national operator,
Globacom, for redeeming the nation’s investment profile, declaring that the
telecommunication giant has proved that Nigeria was a country in which it was worth
investing. The presidential encomium was showered on Globacom at the Aso Villa when
the Globacom Board led by its Chairman, Dr. Mike Adenuga Jnr., presented free SIMS
and telephone directories to the President on behalf of the Federal Government. Whilst
stating that most telecom subscribers in Nigeria were reasonably satisfied with the
services of the telecommunications company, the President advised Globacom to
consider how its operations could have a multiplier effect in terms of job creation, as well
as explore other areas in telecoms and ICT in which it could invest and create additional
value and employment. Earlier, Globacom’s Chief Operating Officer, Mr. Mohammed
Jameel, had stated that as a national proposition, Globacom was focussed on supporting
any initiative that would enhance good and responsible governance. He added that
Globacom believed that the free SIMS and directories donated to the Federal Government
would enhance productivity; facilitate intra-government communication; as well as
increase bonding among government officials. Globacom had launched a similar
initiative with the Bauchi, Imo, Edo, Ogun and Kwara state governments.


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