Stockbrokers
Monday welcomed the reinstatement of business mogul, Alhaji Aliko Dangote, as
the president of the council of the Nigerian Stock Exchange (NSE), saying it
would impact positively on the nation’s capital market
going forward.
Dangote, whose election of August 2009, was nullified in March
2010, was reinstated as the stock exchange’s president last
Friday following three rulings by the Court of Appeal in Lagos upholding his
appeals against cases that led to the nullification of his election. He is
expected to take over from Mallam Ballama Manu, who has been the interim
president of the council of the exchange since August 5, 2010 when Securities
and Exchange Commission (SEC) literarily took over the running of exchange.
Reacting
to the news of Dangote’s reinstatement, stockbrokers who spoke with THISDAY said it was
a good development for the market because it had cleared many hurdles which had
hitherto affected investors’ confidence and the
development of the market.
Past President of the Chartered Institute of Stockbrokers (CIS),
Mr. Dipo Aina, said the resolution of the cases which had cleared most of the
issues were used to perpetuate illegality in the Nigerian stock market. “With
the court ruling, the picture is now clearer. The cases have been cleared and
this is a good development because the cases have been impeding so many issues
that could have helped in the recovery of the market. Now that the cases are
over, we should learn from our past mistakes,”
he said.
Aina,
who is the managing director of Signet Securities and Investments Limited,
added he liked what Dangote said that he would accord stockbrokers their
appropriate place in the council of the exchange. “We
can now move forward because there are no more inhibiting factors again,”
he declared. Another broker and managing director of Partnership Investment
Company Limited, Mr. Victor Ogienwonyi, said he was confident in Dangote
because he is “doer and not a talker.”
“He
has set his own agenda, so let us see how far he goes from here. You know
Dangote is a doer and not talker. I have confidence in him,”
Ogienwonyi said. Speaking in the same vein, managing director of Crane
Securities Limited, Mr. Mike Ezeh, said Dangote’s
return was a good omen for the market. Reacting to the court
judgments that reinstated him, Dangote informed THISDAY that he was very happy
with the rulings, as they had vindicated his position; all along that he should
not have been removed as president of the stock exchange’s
council. He promised
He said his first priority would be to continue with the reforms
started by the present chief executive of the NSE, Mr. Oscar Onyema, improve
governance and transparency, and restore confidence in the market.
Power: World Bank Yet to Approve Partial
Risk Guarantee
The PRG is an instrument by the World Bank that provides
that if a distribution company is unable to pay for the electricity purchased
from a generating company, the Bulk Trader will step in and pay. The PRG stemmed from growing concern among investors that
distribution companies lack credit worthiness to purchase power directly from
the generating companies.
A source within the Ministry of Power told THISDAY at the
weekend that though the bulk trader has been created and a chief executive
officer appointed, the World Bank board was yet to approve the PRG. He said the delay in securing the approval of the board
was due to the prevailing inefficient revenue collection system in the power
sector, adding however that the approval would come by the end of this year
when the privatisation process has been concluded.
He attributed the delay in the approval of the PRG to the
current inefficient revenue-collection system in the power sector, adding that
the situation will change after the privatization exercise. According to him, the new private investors would deliver
more efficient services with better revenue collection mechanisms put in place.
He further stated that the newly-created bulk trader had
commenced negotiation with private investors for bankable Power Purchase
Agreement (PPA), in anticipation of the final approval of the PRG. The official noted that the bulk trader was the primary
guarantee of continued acquisition of new distribution capacity.
Dangote Resume Construction of $115m Cement plant in
Cameroon
The construction of Nigerian cement giant, Dangote Cement
Plc's $115 million (N18.2 billion) new plant in the Cameroonian economic hub of
Douala has restarted after a land dispute was resolved. Work on the 1.5 million tonnes-a-year plant began last
September and was due to last 18 months. But it was halted earlier this year
after the ethnic Sawa people filed an injunction against the project,
complaining it violated their sacred site on the banks of the Wouri River,
reported reuters.com.
"Following instructions from the Presidency of the
Republic, work has resumed at the Dangote cement factory," the Governor of
the Littoral Region, Joseph Beti Assomo said. He added: "Let me seize this opportunity to inform
you that the mix-ups surrounding the site of the Dangote project have been
entirely dissipated to enable work resumption which must not be interrupted
again.”
Sawa representatives were not immediately available for
comment but several Douala residents confirmed that construction work was going
ahead last Monday.
Nigerian billionaire Aliko Dangote is aiming for a
valuation of up to $40 billion for his rapidly expanding cement company at its
London listing next year, several times that of top global rival Lafarge.
Power, transportation hindering real sector growth, says CBN
For
the full benefits of the opportunities created with the reforms in the banking
sector to crystallize, a number of lingering challenges in the real sector
would need to be addressed. The most critical of these is the huge
infrastructural deficit comprising of power and transportation”.
This was the view of the Central
Bank of Nigeria's (CBN) Governor, Lamido Sanusi, during the presentation of a
paper on the recent banking reform and opportunities for real sector growth in
Nigeria, at the fourth memorial lecture of the Clement Isong Foundation in
Lagos, at the weekend.
He however stated that though
outcomes on financial sector reforms in Nigeria over the years which were aimed
at repositioning financial institutions for effective mobilization and
utilization of financial services for economic development have been mixed and
some challenges still persist, concerted efforts are being made to overcome
them.
Sanusi who was represented by his
Deputy, Suleiman Babarau, noted that the prospect of the real sector growth is
bright given the various reforms in the financial sector aimed to unlock the
credit potentials of deposit money banks, the lingering challenges of
infrastructure deficit, has continued to limit the full realization of the
reforms for the sector.
“What is clear however,
is that the growth of credit to the real sector, though still relatively not
very impressive, has been rising over time and it is expected to improve further
as the effects of the current reforms permeate the banks. Similarly, the
performance of the real sector in the face of the banking sector reforms has
been impressive and we hope to improve funding to the sector”,
he added.
On the way out for the nation’s
economy, Sanusi stressed that though still fragile, financial markets have
recovered faster than expected, urging greater efforts in accelerating reforms
in the other sectors of the economy and protect depositors’/shareholders
fund.
In addition, he added: the rebound
in international commodity prices is expected to further support economic
growth in commodity producing regions, including Nigeria. Sanusi said a major
fall-out of the global financial crisis fostered the need to strengthen
regulation and supervision, engage in better risk management practices in
financial institutions and restore confidence in the financial system.
According
to him, the regulator is committed to enhancing the quality of banks through
regulatory framework reform, risk based supervision, consumer protection,
corporate governance and disclosure and transparency.
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