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.
The World Bank is yet to approve a Partial Risk Guarantee (PRG) that will be counter-guaranteed by the Federal Government Sovereign Bond to enhance the sale of electricity in bulk to the 11 distribution companies unbundled from the Power Holding Company of Nigeria (PHCN), THISDAY has learnt.
Under the PRG arrangement, the bulk trader, a newly-created entity, which will remain government-owned after the privatization of PHCN successor companies in October 2012 will buy power from the generation companies and sell to distribution companies.
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.
“The PRG is an instrument that says that if all the revenue collected is insufficient to pay the generating company, then the bulk trader will step in and pay the difference. However, if the bulk trader is unable to pay the difference, the World Bank PRG will pay. So, the PRG is simply a letter of credit counter-guaranteed by Federal Government Sovereign Bonds,” he said.
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.
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.
Meanwhile, the president of Dangote Group, Alhaji Aliko Dangote, has taken over as the President of the Nigerian Stock Exchange (NSE), following the ruling of the Court of Appeal in Lagos last Friday upholding his three appeals against cases that led to the nullification of his election. Dangote was elected the 17th president of the NSE in August 2009.
Announcing Dangote’s election, the then Director-General of the NSE, Prof. Ndi Okereke-Onyiuke, had said he was elected based on a unanimous acclamation by the council members immediately after the conclusion of its 48th annual general meeting.
However, Dangote’s election was nullified by the Federal High Court in Lagos in March 2010 following the application made to the court by some shareholders of African Petroleum Plc (now Forte Oil Plc), who had sued him, Nova Finance and Securities Limited, NSE and others, over alleged manipulation of AP shares.
But Dangote challenged the suit and filed appeals which were upheld by the Appeal Court presided over by Justice Helen Ogunwumiju last Friday.
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.