Thursday, 31 May 2012


Most Pension Fund Administrators (PFAs) in the country are struggling to meet the N1 billion recapitalisation requirement set by the National Pension Commission (PenCom). The deadline for the exercise expires at the end of next month.
The Commission last year gave a June 30 deadline to all the PFAs for the attainment of the new capital base, which the Commission considers adequate to absorb unforeseen losses and improve the financial condition and business processes of the PFAs .
The PFAs have been operating with a capital base of just N150 million.
BusinessDay Investigations can reveal that as at last week, some of the PFAs were yet to conclude arrangements for mergers or raising funds through rights issues, an indication that some of the 24 PFAs currently operating, might lose their licenses to revocation by PenCom.
The Commission is insisting that the only passport to the continued existence of any PFAs is meeting the new capital base, as anything short of that would mean inability to absorb unforeseen losses, in which case the revocation law would be applied.
The Commission has asked PFAs to update it with their efforts to meet the re-capitalisation requirement. For those that are unable to meet the requirement before the deadline, which is 30th June 2012, the Pension Reform Act (2004) provides steps which the Commission will take in dealing with them, Mohammad Ahmad, director general of the Commission told BusinessDay recently.
Further investigations have revealed that the development is causing anxiety in the industry, particularly with those PFAs owned by banks, whose operations are paralysed on account of divestment of staff and other interests by the parent banks, from the institutions, in line with the Central Bank of Nigeria (CBN)s directive for them to focus on strict banking activities.
Similarly, other corporate owners of the PFAs, such as insurance companies, are facing challenges which are having spillover effects on the operations of the subsidiary PFAs.
Consequently, most of the affected PFAs are being operated at sub-optimal level, a development that is negatively affecting their merger talks with their potential investors in the industry.
The PFAs are AIICO Pension Managers Limited, Amana Capital Pension Limited; APT Pension Fund Managers Limited; ARM Pension Managers Limited; Citi Trust Pension Managers Limited; CRIB Pension Fund Managers Limited; CrusaderSterling Pensions Limited; Evergreen Pensions Limited and Fidelity Pension Managers
Others are First Guarantee Pension Limited; Future Unity Glanvils Pensions Limited; IEI-Anchor Pension Managers Limited; IGI Pension Fund Managers Limited; Leadway Pensure PFA Limited; Legacy Pension Managers Limited; NLPC Pension Fund Administrators Limited; OAK Pensions Limited; Penman Pensions Limited; Pensions Alliance Limited; Premium Pension Limited; Royal Trust Pension Fund Administrator Limited; Sigma Pensions Limited; Stanbic IBTC Pension Managers Limited and Trustfund Pensions Plc.
Justifying the new capital base in a memo to the operators, the Commission said, Furthermore, it is expected that the improved financial condition of the PFAs after the implementation of the reviewed capital requirement, would lead to improved service delivery and product development resulting from automation (timely payments).
Some analysts said yesterday that the much awaited improvement in service delivery would be championed by the few that are seeking to form alliances through mergers and or acquisition and some that have met the minimum requirement, that are seeking to acquire others in order to increase their market share.
One of the PFAs told Business Day last week that it was planning to raise funds through rights issue and offer for subscription which are expected to be concluded by the middle of June, 2012.
However, Bismark Rewane, chief executive, Financial Derivatives Company Limited, recently expressed optimism that the new guidelines requiring a minimum of 10 percent investment in equities and other variables would bring succour to the embattled equities market.
Already some stock broking firms and other players in the capital market have commenced repositioning strategies through strategic alliances with the Pension Fund Administrators (PFAs) and the establishment of mutual funds subsidiaries to benefit from the new direction towards equities market.
PFAs are the licensed managers of the contributory pension scheme that manage the largest pool of long-term investible funds.

'Project Aquila' will curb malpractices in petroleum distribution - PEF

The Petroleum Equalisation Fund said on Wednesday that the ongoing monitoring of petroleum product distribution electronically would curb malpractices in the system.
Goddy Nnamdi, the fund's General Manager (Customer Services), said that the monitoring, tagged `Project Aquila', would help to forestall fake claims by some marketers.
Aquila is a Latin word for eagle, a bird known for its strength, speed and swiftness.
Nnamdi said that the fund would give priority to marketers who had keyed into the project.
``The electronic loading will guaranty accurate information on movement of petroleum products from one destination to the other and help government in policy planning and analysis," he said.
He said that when the project was fully implemented, payment of bridging claims by marketers would only take two weeks.
Nnamdi said that processing of claims was done manually in the past which had caused delays and impacted adversely on the marketers.
He said that the new device would automatically provide details of all transactions and automatically raise an invoice in favour of the marketer.
He said that the agency had trained and deployed its officials to more than 80 depots being operated by the fund to implement the project.
He said that the movement of petroleum products were not monitored in the past, thereby making it difficult to either confirm or certify deliveries at designated depot areas.
Nnamdi advised marketers to ensure that their trucks were tagged, adding that any truck not properly tagged would not be allowed to load products in any depot.

Private Sector Key to Africas Growth, AFDB report

Most African countries have come to recognise the critical role that the private sector can play to help the continent reach its full economic and social potential, according to the 2011 African Development Report of the African Development Bank (AfDB) launched in Arusha.
Focused on private sector as the engine of Africas economic development, the report examines the challenges facing the sectors development and highlights ways to address these challenges, taking country differences into account.
After being hamstrung for decades by difficult political and economic conditions and burdensome government policies, it is now poised to become the main engine of growth for the African continent, says AfDB president, Donald Kaberuka in the report. The report ends with a discussion of the AfDBs role in support of private sector development in Africa.
The African Development Bank is committed to addressing the constraints on private sector development.
We believe that private sector development is fundamental for creating inclusive growth through employment creation.
The private sector is also a provider of essential goods and services to the public, and a key source of the revenues that African countries need to meet their development challenges, he adds.
Having promoted development of the sector for more than 40 years, the AfDB has made private sector development one of the four priorities of its Medium Term Strategy for 2008-12, along with infrastructure, governance, and higher education.
In order to generate a greater developmental impact, the AfDB is integrating private sector development across all its operations with threefold objective.
According to the report, they are: supporting regional member countries in improving business enabling environments, and strengthening their international competitiveness; broadening participation and inclusion in the private sector and supporting local enterprise development for spurring robust employment creation and improving social well-being; and encouraging the embedment of social and environmental responsibility, sustainability, and good corporate citizenship in private sector development.
Though the private sector helps reduce poverty, reliable statistics on private sector activities in African countries are scarce. Most of the activities are informal, carried out by micro, small and medium enterprises. Among its other findings, the report says laws and regulations critical for private sector development and corporate governance were undermined by poor monitoring and enforcement.
Developing Africas infrastructure at the pace necessary to unleash its economic potential requires a concerted effort to improve planning, preparation, and procurement capacities in line ministries and relevant sector units; mobilize financial resources; and adopt a regional approach to infrastructure development, says the report.
Africas private sector accounted for more than 80 percent of total production, two-thirds of total investment, and three-fourths of total credit to the economy over the 1996-2008 period. It was also responsible for 90 percent of formal and informal employment.
Although the private sector in African countries faces common challenges, the impact of these constraints varies according to the stage of economic development. Fundamentally, the constraints include insufficient transport networks and lack of access to power and finance.
Challenges also differ by type of firm, with large companies being more concerned about corruption, skill shortages and labour regulations, while export-oriented businesses place tax administration at the top of their list.
These systemic factors are of less importance for small firms, which find the lack of access to (and high cost of) finance, insufficient collateral, and the business owners limited technical, management, and accounting skills to be more binding. The most severe challenge for microenterprises is access to finance, with those in AfDB countries also constrained by business licensing procedures, the report points out.

Oil/gas stocks loss of 12.81% takes toll on investors portfolio

Majority of equity investors in the oil/gas subsector of the Nigerian Stock Exchange (NSE) are now rebalancing their portfolio in order to cushion the impact of the recorded losses so far on stocks, particularly in the five top capitalised stock of this segment.
While the stock market has recorded 7.24 percent rise, the stocks in oil and gas-5 index have recorded 12.81 percent year-to-date (ytd) loss.
The oil and gas-5 is designed to provide an investable benchmark to capture the performance of the oil and gas sector, this index comprises the top-5 most capitalised and liquid companies in oil and gas marketing. The index, which is based on the market capitalisation methodology, comprises of stocks like Chevron, Conoil, Mobil, Oando, and Total.
Analysts say due to uncertain market direction, as equity waved between intermittent gains and losses, supply for most heavily capitalised stocks overtook demand, leading to drop in prices across board.
Just last week, the NSE Oil/Gas Index depreciated by 4.74 points or 2.41 percent as the NSE All-Share Index (ASI), which opened last week at 22,381.11 points depreciated by 148.75 points or 0.66 percent and closed last Friday at 22,232.36.
Explaining the current bears dominance, market analysts note that investors have continued to remain cautious towards equity investments in view of high stocks supply amid recent profit-taking activities. This is even in the face of the robust market liquidity position, in addition to the recent decision by the Monetary Policy Committee (MPC) to retain rate at 12 percent.
Taking a look at the equities market this week, analysts at Partnership Investment Company plc, say the activities of profit takers that have prevailed in the last three weeks are expected to give way to bargain hunting.
According to them, the market may have bottomed out as it reached its lowest level in nearly three weeks. We believe that improved liquidity, especially with the release of funds from the Federation Account will boost the market this week.
It is important to maintain the right portfolio mix in order to mitigate the effect of market volatility. Equities market may get a boost with the drop in lending rates. Picking stocks with good fundamentals will ensure that the negative effects of market movement are mitigated.
Consolidating this outlook, Access Bank analysts, state that the recent pronouncement that Pension Fund Administrators could be compelled to invest a minimum of 10 percent of their fund on equities may help restore confidence and boost market performance.
To Cowry Asset Management in their equities outlook, this week, we expect to see more bargain hunting activities following the retention of the monetary policy rate at 12 percent (cumulating in a reduction in real returns given the increase in inflation to 12.9 percent) as portfolio managers rebalance their portfolio more in favour of equities.

Lagos, emerging cities hold promise of 50% world growth

The world in the next 15 years anticipates about 50 percent economic growth from cities in emerging markets such as Lagos in Nigeria, Johannesburg in South Africa and Rio de Jenairo, in Brazil, among others, following rapid urbanisation, experts have said.
Experts say urbanisation is happening faster in Africa than anywhere else in the world, while cities are driving the continents economic growth.
The experts who spoke yesterday at The Economist Conference on Future Cities, with the theme Managing Africas Urban Transformation, noted that economies of African countries are growing exponentially, giving instance of Lagos, Nigerias commercial nerve centre, where urban growth is second to none in Sub-Saharan Africa. Urban growth has strong correlation with the growth in the construction industry, especially in Nigeria, where it is expected that the industry will witness bout 15 percent growth by 2020.
Dougal Thomson, Head of Conference Programmes, CEMEA, The Economist Group, said in his introductory remark at the conference, that Africas population was going to surpass that of China by 2050, citing the International Monetary Fund (IMF) projection which says that African GDP growth at the moment is 5.4 percent per annum.
This lends credence to the latest 10-year forecast from Global Construction Perspectives and Oxford Economics, which says construction growth in Nigeria will be the fastest of all markets, predicting that China will overtake the US as the worlds biggest construction market by 2018.
The report sees Nigeria as the market where the fastest growth will happen, adding: Nigeria will be the global hotspot from here to 2020 because the nations construction growth is even faster than Indias, which reflects increased wealth.
Thomson who spoke on The World in 2020: Understanding the Drivers of Change however, pointed out that Africans were still struggling to get going, noting that so much money was needed to transform cities in the continent. There is need for job creation to cope with the growing population; the continent anticipates growth of the middle class and the emergence of people with purchasing power, he said.
Robert Neuwirth, in his presentation titled The Dynamism of Street Savvy: The New Growth Driver? highlighted some of the economic potential of cities in what he called street opportunity, stressing that urban city development was an opportunity.
Neuwirth, the author of Nations and Shadow Cities: A Billion Squatters, a New Urban World, said that in Lagos, there are lots of economic activities going on, ranging from the very micro to macro businesses, disclosing that trading activities alone in the city generate about $10 trillion a year.
Credit Suisse, in a report released last month, noted that urbanisation continues to provide one of the most significant drivers of growth for the global economy, and Lagos will be the 6th fastest growing city in the world, between the periods of 2010 and 2025.
The banks analysts also highlight that for growing cities like Lagos, access to deep capital markets is essential for financing and encouraging private investment and enterprise.
The most successful global cities have anticipated the significant necessary public and private funding growth required, rather than responding to population growth and being constantly behind the curve they said.
Babatunde Fashola, Lagos State Governor, during an interview session at the conference, disclosed that the state has developed an annual household survey which forms the roadmap for planning the states budget.
There has been a gap in planning, especially during the military regime, where a governor stayed in office on average, less than 24 months. Today, we have changed that, as we have developed master plans for eight independent towns in Lagos, which are all to be linked by transport infrastructure.
According to Fashola, the state government is currently employing the public-private sector model in a number of sectors, such as the light rail, Bus Rapid Transit (BRT), Eko Atlantic city project and the Lekki Epe expressway.
The size of the Lagos economy put at $50 billion at the end of 2011, currently accounts for 20 percent of Nigerias GDP. Lagos has a population of 20.19 million (UN Habitat) that is growing at a rate of 3.2 per cent per annum, while its urbanisation growth rate is a rapid 16 percent. Lagoss share of Nigerias urban population is also a hefty 27.4 percent.

Experts disagree on CBNs retention of cash reserve ratio

SOME financial experts have expressed divergent views on the retention of banks cash reserve ratio at 30 per cent by the Central Bank of Nigeria (CBN).
They gave their views in separate interviews with the News Agency of Nigeria in Lagos, yesterday.
The CBN Governor, Malam Sanusi Lamido Sanusi, announced the retention of 30 per cent cash reserve ratio after the Monetary Policy Committee meeting, last week.
A former President of Finance Houses Association of Nigeria (FHAN), Eddie Osarenkhoe, said that the retention of the cash reserve ratio at that rate was a step in the right direction.
He said that the apex bank was working towards ensuring stability in the financial system and also to restore investors confidence, adding that the move would make the banks more efficient in the management of funds at their disposal.
Osarenkhoe explained that there was need for CBN to also increase the cash reserve ratio above 30 per cent since banks prescribed minimum paid up capital had gone up.
But as soon as stability is achieved in the financial sector, the apex bank should bring down the ratio so that more funds could be available for banks to do business, he said.
But the immediate past President, Association of National Accountants of Nigeria (ANAN), Dr. Samuel Nzekwe, said that retention of the 30 per cent cash reserve ratio would not have any effect on the economy.
According to him, no reasonable investor would be willing to borrow funds at high cost even with a lower cash reserve rate and more capital.
He said that many banks were giving only-short term loans that that had little effects on the economy.
What will stimulate the economy are long-term loans  at low interest rates, rather than short-team loans the banks give to customers, he said.
The General Manager of the Standard Alliance Insurance Company, Olumide Adegoke, faulted the cash reserve ratio, saying that it was too high.
According to him, this might affect some banks, as they might not have sufficient funds to do business.
Adegoke said that the banks were in business to make profits for the shareholders who put their money into the banks.
The CBN should concentrate more on providing functional regulatory framework that will curb the excesses of the banks managers, rather than putting pressure on the financial system, he said.
Adegoke noted that this would exert further pressure on them and the banks might not effectively carry out their financial intermediation roles to customers.
Also, the General Manager of the Regency Assets Management Limited, Adewale Adeniyi, said that the apex banks action was supposed to be a corrective measure and not punitive.
He said that the retention of banks cash reserve ratio at the rate was necessary to save the financial sector from another around of financial crisis.
Adeniyi said that the banks had no choice than to comply with the directive since it was CBNs mandate to strengthen the banking sector.

Lateral Links to raise N64bn for SMEs

LATERAL Links Nigeria, a private sector initiative for the development of Small and Medium Scale Enterprises (SMEs), has unveiled plans to raise $400 million (N64 billion) for the development of the sub-sector.
The company described it as a private sector initiative, through collaboration with the government and some global fund managers.
The Managing Partner, Yetunde Allen told journalists at a workshop organized by Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) that Lateral Links, has mapped out strategies that will ensure it meets its objective towards creating a new economic landscape for the SMEs sector in Nigeria.
Allen explained that Nigeria has been identified as a growing market with the Micro, Small and Medium Enterprises (MSMEs) sector being a major player towards exploring the potentials of Africa.
The trend towards boosting a greater economy universally has always been through the empowerment of the entrepreneur. This vital group has always been the engine room towards creating change in any national economic growth.
It is the realisation of the need towards localising international standards that has led to the vision of collaborating with government and some global fund managers to come up with this initiative, Allen said.
She said that the government cannot develop the SMEs sector with N170 million in one year.  This is not realistic.  No government can develop its SMEs sector with that amount.  This is exactly what spurred up our desire to embark on this project.  We are planning to raise quite a lot of the money abroad. We are not financers but we are only consultant to the initiative, she added.
The Lateral links boss lamented that banks were still not enthusiastic to assist SMEs operators, saying that despite the important role of the SMEs in the overall economy, banks are still reluctant to support the sector.
According to her, one of the problems facing entrepreneurs in Nigeria is lack of access to information on where and how necessary tips on business could be got.
She stressed the need to put in place appropriate platforms across the nation to encourage more Nigerians to invest their money in SMEs activities.
One of the biggest headaches faced by most entrepreneurs is the proper capture, reporting and analysis of financial information. We have been developing various means of helping entrepreneurs overcome these challenges cheaply, simply and efficiently, she added.

NSE, Courteville, others to woo foreign investors at Olympics

AS part of measures to woo more foreign investors, the Nigerian Stock Exchange (NSE) has concluded plans to participate in 2012 Olympic scheduled to hold between July 27 to August 12, 2012, in London, United Kingdom.
The NSE disclosed yesterday that it has invited 20 companies to be part of the investment drive during the Olympics.
Already, according to the NSE, Courteville Investment Plc has indicated interest to be part of the ceremony.
He also used the opportunity to commend the management of Courteville for their contributions to the development of the country.
In his presentation, the Managing Director/ Chief Executive of Courteville Plc, Mr Bola Akindele explained that the company has concluded plans to extend its operations to more African countries in the next 18 months.
The services, he added, has become a household name in Nigeria where it has been in operations in 18 states, adding that the product has been accepted as a form of motor vehicle documentation and administration.
According to him, under the AutoReg franchise, Courteville Investment provides services for vehicle licensing, Hackney permit, Road Worthiness Certification/Vehicle Test and a couple of others.
Also, Akindele explained that the company had partnered the National Agency for Food and Drug Administration and Control (NAFDAC), to ensure easy registration processes for all NAFDAC-regulated products.
NAPAMS, he said, would also facilitate the remote verification and authentication of information on all NAFDAC approved products in Nigeria.
He explained that NAPAMS was an Enterprise Resource Planning system (ERP), which would allow NAFDAC to provide its services for the seamless registration of products, adding that the solution came in three modules.
According to him, the first module is the front-end module, which allows the clients of NAFDAC to go online, purchase registration forms, fill in all the required information for the registration of products and submit the application online.
The African Economic Outlook 2012 (AEO 2012) has said, despite Nigerias robust economic growth, it has failed to generate decent employment while poverty has remained high and persistent.
The GDP growth rate was estimated by the AEO 2012 at 6.7 per cent in 2011, even though 7.36 per cent was reported by National Bureau of Statistics (NBS) at the end of 2011.
The growth rate is projected by the outlook, to move up to 6.9 per cent at the end of this year. The growth rate was as high as 7.8 per cent in 2010. Also, according to the report, the unemployment rate is currently at 23.9 per cent as against 21.1 per cent in 2010.
The AEO 2012, launched at the on-going Annual Meetings of the African Development Bank (AfDB) in Arusha, Tanzania, gave the figure of unemployment rate among the youth in Nigeria as 37.7 per cent. The figure, it pointed out, was one of the highest in sub-Saharan Africa.
The AEO 2012 was jointly prepared by the AfDB, the OECD Development Centre, United Nations Economic Commission for Africa (UNECA) and the United Nations Development Programme (UNDP).
Besides, the report cautioned that the nations economy remained vulnerable to global economic shocks that weigh on the fiscal position and macroeconomic stability, threatening growth prospects.
It added that to mitigate the negative impacts of the global economic crisis, the Federal Government pursued an expansionary fiscal policy to maintain growth and social sector spending that led to pressure on consumer prices.
The report nevertheless, stated that, a major challenge to increasing the absorptive capacity of the Nigerian economy was the dilapidated state of infrastructure, in particular power, road transport and railways; and the overdependence of the economy on the oil and gas industry.
These, it noted, were priorities for the transformation agenda of the current administration and were being addressed through the creation of an enabling environment for private sector participation in infrastructure development, and through the development of the non-oil sector.
The AEO 2012 also found that, in spite of the dominance of the oil sector, agriculture played a significant role in the national economy, accounting for the largest single share of GDP. Sustainable growth in the agricultural sector is a principal factor in promoting inclusive economic growth, reducing poverty and ensuring the nations food security, it pointed out.
Continent-wise, the AEO 2012 advised that with the number of youths in Africa set to double by 2045, countries across the continent should boost job creation and help young people acquire new skills. The youth, it posited, were an opportunity for future economic growth.
Creating productive employment for Africas rapidly growing young population is an immense challenge but also the key to future prosperity, said the report.
According to the report, between 2000 and 2008, despite improving economic growth rates, and a better educated youth, Africa created only 16 million jobs for young people aged between 15 and 24.
It stated:  The youth currently represent 60 per cent of the continents unemployed, and of these 40 million youths, 22 million have given up on finding a job, many of them women.
Chief Economist and Vice-President of AfDB, Prof. Mthuli Ncube said:   “The continent is experiencing jobless growth. That is an unacceptable reality on a continent with such an impressive pool of youth, talent and creativity.
The report argued that youth unemployment figures would increase unless Africa moves swiftly to make youth employment a priority, turning its human capital into economic opportunity.
On the other hand, it added, youths could present a significant threat to social cohesion and political stability if they did not secure decent living conditions. The report also declared that high growth alone was not sufficient to guarantee productive employment,
In low-income countries, most young people work but are poor nevertheless. In African middle-income countries, on the other hand, such as South Africa or the Northern African countries, despite better education, more youth are inactive than working, said Director at the OECD Development Centre, Mario Pezzini.
The AEO 2012 recommended that African countries should design better coordinated strategies to effectively tackle youth employment, focusing on job creation in the private sector while providing the right conditions for businesses of all sizes to grow and expand their work force.
MasterCard Worldwide recently unveiled the MasterCard Mobile Payments Readiness Index (MPRI), an analysis of 34 countries and their readiness to use three types of mobile payments: person to person, mobile web commerce and mobile contactless payments at the point of sale.
The MPRI found that while no two markets are the same, consumer readiness is the critical success factor to drive mobile payments adoption around the globe.
Nigeriascored 31.3 on the MPRI, with the global average being calculated at 33.2. Singapore, which scored highest on the index, achieved a rating of 45.0. According to Country Manager, West Africa, MasterCard Worldwide, Omokehinde Ojomuyide, It is early days for mobile payments globally.
Even the most advanced country in the survey did not achieve 50 points, and the spread of the 34 countries surveyed is only 22 points.
There are nearly100 million active SIM cards in Nigeria, Ojomuyide said adding that although currently only 5 percent of these are smart phones that could access the Internet, a sub-$50 smart phone was expected in African markets in the next three years.
The high penetration of mobile usage already in the market shows that Nigerians are accustomed to communicating via their mobile devices, and the step to mobile payments will be a natural one, once these devices are more accessible.
The MPRI identified Singapore, Canada, the United States, Kenya and South Korea as the most prepared markets. The Index indicates that while its early stages for mobile payments adoption, all markets globally either highly scaled and integrated ones like the United Kingdom or compact and technology-driven ones like Singapore, are making progress towards reaching an inflection point where mobile devices account for an appreciable share of the payments mix.
A move towards mobile payments is in line with the Nigerian governments Cash Policy, which actively encourages Nigerians to reduce the amount of cash circulating in the local economy.
MasterCards vision is a world beyond cash, says Ojomuyide. By moving to non-cash payment mechanisms such as those offered on mobile phones, Nigerian banks, businesses and consumers will avoid the costs, risks and inefficiencies associated with carrying and handling cash. The MPRI shows that Nigerians are realising the benefits of mobile payments, although there is still much potential for growth in this field.
The Index also found that in some markets, young affluent consumers between the ages of 18 and 34 years old were the most willing to engage in mobile payments as they recognise the value of using mobile payments instead of cash or payment cards.
In addition, findings of the MPRI reveal that partnerships among the key players in the mobile payments ecosystem were essential to accelerate the commercialisation of mobile payments. Cooperation and collaboration among financial institutions, telcos, governments, technology providers and others can foster an environment that enables a market to reach critical mass, the statement said.
As a way to brainstorm on the negative effects of corruption in the country, the Africa Network for Environment and Economic Justice (ANEEJ), headed by Mr. David Ugolor, recently organised a one-day roundtable on the enforcement of the House of Representatives Ad-Hoc Committee Report on petroleum subsidy. Abimbola Akosilepresents the findings of the crucial forum
A one-day roundtable on the enforcement of the House of Representative Ad-Hoc Committee Report on petroleum subsidy, which exposed the high level of corruption associated with petroleum subsidy regime in Nigeria, was held recently in Abuja.
The forum was organised by the Africa Network for Environment and Economic Justice (ANEEJ) was designed to provide a platform for CSOs to engage relevant agencies and other stakeholders in Nigeria to ensure that the recommendations contained in the House of Representatives Ad-Hoc committee probe report are diligently implemented in the overall interest of Nigerians.
Participants at the roundtable which were drawn from the NGOs, NLC, TUC, academia, the Media and the International Development Agencies among others, commended ANEEJ and the British Council for the timely organisation.
Setting the Tone
In his welcome address, the Executive Director of ANEEJ, Mr. David Ugolor, said the purpose of the gathering was to carry out a detailed analysis of the House of Representative ad-hoc committee report on fuel subsidy.
The meeting, he said, should also proffer specific ways the recommendations contained in the report should be implemented by relevant government agencies in a policy briefing document, and draw up a civil society action plan on how to engage various departments and agencies of government to enforce the recommendations of the House report.
According to him, you may be aware, following the release of the report of the Ad-hoc committee on fuel subsidy led by Hon. Farouk Lawan, it was found among several other things that the subsidy regime, as operated during the period  under preview (2009- 2011), were fraught with endemic corruption and entrenched inefficiency.
Over N1.06 trillion was discovered to have been paid out through corrupt means. Most unfortunate was the finding that the NNPC, a government agency, was found to be unaccountable to no body or institution.
The committee went ahead to make some specific recommendations, which include: unbundling of the NNPC, to make its operations more efficient and transparent through the passage of a well drafted and comprehensive petroleum industry bill, auditing of the NNPC to determine its solvency, overhauling of the management of the NNPC and those found in various infractions should be investigated and prosecuted by relevant anti-corruption agencies.
It is unfortunate that despite the huge fraud in this sector and its impact on the Nigeria people, the civil society organisations have not taken lead in mobilising the public against corrupt leadership of the NNPC, PPPRA, the Petroleum Ministry and the Accountant Generals office.
To this end, it is expected that we will be able to come up with a civil society position policy brief providing clear cut suggestions on how to enforce the recommendations of the House of Representative Report on fuel subsidy and civil society action plan on campaign on the recommendation of the oil subsidy recommendation, Ugolor added.
Implementation Strategies
In a detailed paper presentation, the National Coordinator of Procurement Observation and Advocacy Initiative (PRADIN), Mohammed Bougei Attah, focused on identifying ways in which the recommendations in the Farouk Lawan Committee on the Subsidy Probe Report could be implemented.
To him, the Fuel Subsidy Probe Report in its present form is a huge 210-page document that requires deep understanding and interpretation by elite for the common man to understand.
Attah urged the roundtable organiser to engage experts or seasoned administrators to simplify and summarise the Report in pamphlet form for easy reading and application; design messages for posters and handbills; develop pull outs from the Report that could be used in newspaper articles, media releases; translate the summary Report into local dialects; and carry out extensive media advocacy.
Traditionally the media and NGOs are partners in development. And in most cases, NGOs have remained the best source of information channels for media outlets and thus they enjoy a reasonable partnership in working for the good of the people. NGOs should therefore use this opportunity to engage the media extensively.
The primary work of NGOs evolves around advocacy while serving as pressure group to ensure good policies are implemented. Therefore, we should consider strongly of being partners with the government in ensuring that the recommendations in the probe report are considered.
The biggest challenge that will be faced by the anti-corruption agencies and other independent organs mentioned above is the political will to take action against persons of high authority that are indicted in the Report. As such NGOs can serve as pressure group by mobilising themselves and using available channels to meet with those concerned with the implementation of the Report, he added.
On the twin issue of monitoring and evaluation, Attah said there are certain lapses in the application of the nations laws that give room for executive high-handedness.
Every government bodies that are established by law have Governing Council that monitor their activities and policies daily. And the Councils are headed by government appointees which in some instances do not create room for independence. It is often difficult for a body such as an anti-corruption agency to prosecute their Board members.
Adequate monitoring by NGOs can help expose these issues while at the same time such sentiments can be introduced to assist the larger public to be interested in the issue, he added.
Commending the efforts of the House of Representatives Committee on the Probe Report, Attah also observed that similar reports were made available in the past through concerted efforts that were not implemented.
This is dangerous to our economy and for the survival of our democracy. Therefore ANEEJ should as a matter of necessity set up an ad-hoc coalition to help in monitoring and evaluating the progress. This also will demand for the creation of a listserv among CSOs in this thematic area for the purpose of harmonising the activities, he added.
Observations and Recommendations
Participants observed that the roundtable was very strategic at this time because corruption has eaten deep into the fabric of the Nigerian society and that has denied Nigerians the opportunity to enjoy the full benefits of their natural resources.
They noted that there had been mixed reactions on the petroleum subsidy report of the House of Representatives and other official statements made by notable public officers like the Attorney General of the Federation, which necessitate proper understanding;
To them, At the moment, the report contains mere fact findings or allegations, hence, the need to seek veritable ways of enforcing the report through the instrumentalities provided by the Nigerian law. In view of the present directive of Mr. President that the AGF should formally present the report to the EFCC for appropriate action, it is difficult to determine when the EFCC will act on the report.
The participants noted that the report failed to capture the relevance of the Public Procurement Act and the Bureau on Public Procurement (BPP) in the entire process and that the BPP presently lacks the capacity to conduct the procurement audit of all the MDAs and lay same before the National Assembly as required by law.
At the end of the meeting, participants unanimously agreed that June 23rd 2012 be observed across the country as a national day of action on the implementation of the recommendations of the fuel subsidy committee report.
They expressed absolute disappointment about the high level of corruption, inefficiency and serious breach of the procurement law and processes as exhibited by some highly placed institutions and individuals that were involved in the petroleum subsidy contracts in Nigeria.
To the forum, the report by the House of Representatives Ad-Hoc Committee was very commendable; and it thereby called on all stakeholders to make tireless efforts to ensure that the report was ventilated by all parties concerned to ensure its proper enforcement.
CSOs urged the EFCC, ICPC and the Police, as the law enforcement agencies that have the legal powers to enforce the report, to urgently act on the report and exercise their legal powers to investigate and prosecute all those found culpable.
They called on the FG and development partners to ensure that anti-corruption agencies are provided with adequate resources and capacity to carry out proper investigations and prosecution of those indicted by the report.
Participants further urged the House of Representatives to as a matter of necessity see to the full implementation of the recommendations of the report through their oversight functions.
They commended the President and the Attorney General of the Federation for the urgent attention given to the report and emphasised the need for the executive arm of government to respect the social contract it has with the people of Nigeria by ensuring that the committees report is enforced.
In view of the present perception which Nigerians have about the judiciary, participants urged the judicial arm of government to enhance the confidence which the people have on it by making sure that justice is seen to have been done when those indicted by the report are eventually brought before it for prosecution.
To them, there is need to urgently pass the PIB into law to bring about sanity in the Nigerian petroleum industry.
Participants agreed that removal of subsidy from petroleum products would not benefit poor Nigerians in a corrupt system. It was therefore advocated that concerted and sincere efforts be made by all Nigerians to curb the corruption presently associated with the process rather than removing the subsidy.
They called on the Federal Civil Service Commission, the Code of Conduct Bureau (CCB), Federal Character Commission, etc to take urgent administrative actions against public officers that have been indicted by the report as the enabling public service laws empower the various institutions to discipline or sanction public officers that are found wanting without waiting for any further investigation by other authorities.
Also, to avert increase in poverty, anger and high level of crime and insecurity in Nigeria, CSOs and the media were urged to sensitise all Nigerians to rise up to the challenge and fight the ongoing massive looting and monumental corruption which is no longer sustainable in Nigeria.
There is need to move from the present import dependency system of petroleum products and work towards local production by taking steps to revamp existing Nigerian refineries and build new ones. CSOs and International Development Partners should collaborate to conduct independent assessment or review of the report to enhance its implementation, the forum recommended.
The participants endorsed the resolution by the two arms of the National Assembly as well as calls by CSOs and professional bodies for the Executive to inaugurate the National Council on public Procurement as a means of addressing the present myriad of corruption in the procurement process. All those occupying political and technical offices that are being investigated were urged to step down from office in the course of investigations.
Signatories Galore
Signatories to the communiqué include Ugolor of ANEEJ; Executive Director, African Centre for Leadership Strategy and Development, Dr. Otive Igbuzor; National Vice-President, NLC, Comrade Isa Aremu; TUC chairman, FCT chapter, Comrade Aliyu Musa; Andy Ogbuigine of Acord for Development; and Sam Ishaya of CRUDAN.
Others include Ezekiel Jamaka of CHAN; Dr. Tola Winjobi of CAFSO-WRAG for Development; Akpobari Celestine of Social Action; Adebiyi Olusolape of WANGONeT; Ikechukwu Okoli of Centre for Social Justice; Ugherughe Uyoyoghene of Centre for Democracy and Development; Edem Edem of Green Concern for Development; Nnanna Nwafor of FENRAD; and Jaye Gaskia, National Convener, United Action for Democracy (UAD).
For the Wise
ANEEJ and other stakeholders have set the stage for a long-drawn struggle to combat and eventually overcome official corruption in the country. But beyond the civil society advocacy, the onus is also on the three arms of government to display the required sincerity in flushing out a national malady.
Corruption has set Nigeria back very much in her quest for development and citizens empowerment and emancipation. The time to make amend is now, no matter whose ox is gored. Kudos to ANEEJ and other stakeholders; posterity will fondly remember this fight.
Index Summary
BusinessDay Afrinvest-30 Index
30-May-12
28-May-12
change
Index Points
1,098.51
1,100.64
-0.19%
P/E
12.2x
12.2x
P/BV
1.9x
1.9x

Dividend Yield(%)
4.3
4.4

BA-30
NSE ASI
YTD change
10.92%
6.95%


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