The
Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) Wednesday frowned
at the closure of the bid process for the sale of companies created from the unbundling of Power Holding Company of
Nigeria (PHCN), saying it is an attempt to deprive genuine Nigerian investors
and their companies the opportunity to invest in the designated companies. The
union argued that the hurried closure of the sale of the PHCN companies by the
Bureau of Public Enterprises (BPE) is not in the best interest of the power sector
reforms in which a lot of funds had already been committed.
The
union, in a statement issued by its Acting Secretary, Mr. Isaac Aberare, called
on the Federal Government to prevail on the BPE and the power ministry to
extend the date in order to allow other interested parties and Nigeria
investors participate in the bidding. This, the union said will allow the
transformational agenda of President Goodluck Jonathan’s administration on power to be more transparent
and workable.
“NUPENG protests the untimely closure of the bidding
process for the companies in the power Holding Company of Nigeria (PHCN). “The union believes that the closure of the bids is
to allow the cronies and fronts of the powers-that-be to buy up the PHCN
companies at ridiculous prices.
“NUPENG calls on the Federal Government to intervene
quickly in the closure of the bidding by prevailing on the BPE and the Federal
Ministry of Power for an extension of time to allow other interested parties
and Nigeria investors to participate in the bidding.
The
Central Bank of Nigeria (CBN) has barred Deposit Money Banks (DMB) and Discount
Houses from accessing the Wholesale Dutch Auction System (WDAS) window throughout
the term of a repurchase or Standing Lending Facility (SLF) transaction with
the CBN. This is a follow-up on the early prohibition of these authorized
dealers from accessing the WDAS and the SLF on the same day.
According
to a circular signed by E. U. Ukeje, director, financial market department,
CBN, authorized dealers that have entered into repurchase or SLF with the CBN
prior to the issuance of the circular, which takes immediate effect, will not
be affected as the transaction would be allowed to run its full course.
Part
of the circular on ‘Review of the
Revised Guideline for Accessing CBN Lending Window and Repo Transactions’ reads: “Further
to the prohibition of authorized dealers from accessing the WDAS and the
Standing Lending Facility (SLF) on the same day, authorized dealers are
henceforth not allowed to access the WDAS window throughout the term of a
repurchase or SLF transaction with the CBN.”
Last week, the CBN prohibited DMBs enjoying facilities from the CBN from
interbank transactions. The circular, which also affected Discount Houses, also
bars actively financial institutions engaged in interbank transactions from
accessing funds from the CBN window.
The
circular signed by A. O. Idris for director of banking supervision, according
to the CBN, is part of its process of unwinding stringent measures put in place
in the wake of the global financial crisis. This, the apex bank believes, is to
ensure effectiveness of its monetary policy. The circular to all banks and
Discount Houses on ‘Revised
Guideline for Accessing CBN Lending Windows and Repo Transactions’ reads in part: “Any
institution that contravenes any provision of this circular will be suspended
from CBN’s money market window.
The
Nigerian Electricity Regulatory Commission (NERC) has said it would no longer
issue power generation licences without clear evidence that all necessary inputs
are in place to guarantee project would actually deliver electricity. NERC has
repeatedly come under fire for the many non-performing power licences issued by
it. The licensees often blame their inactivity on inability to access gas or
finances, among others.
Sam
Amadi, chairman of NERC, made this declaration Wednesday during a press
briefing in Abuja, where he also informed of the commission’s final approval of the revised methodology of
estimated billing and methodology for connection charges. He said, “Many of the licensees have not been able to develop
or produce power four to five years after receiving the licence. Many have
their projects in places where they can’t
access gas supply or where there are no transmission facilities for evacuation.
Going
forward, with the bulk trader now in place, the changes going on in the
transmission component of the sector, we are now building a system that allows for
systematic planning of power. This means that we are no longer going to be
licensing people except where the gas, feedstock, transmission and everything
is in place. “And the system
operator would have indicated that there is capacity to receive this amount of
power or there is need to procure x amount of power and therefore there would
be public option. So, the regulation which we are putting out, which we have advertised
for public comment and we are going to have a public consultation with all
industry stakeholders, is to streamline a bulk procurement guideline, and that
guideline will now tell us how to procure power at the least cost in a
competitive way.”
NERC
has so far issued over 40 licences to potential independent power producers for
the supply of new electricity on-grid generation capacity of more than 10,000MW.
All the proposals were unsolicited, an un-orderly approach which is said could
significantly cost the Nigerian power system and consumer.
The
NERC boss is confident this new regulation to streamline procurement of power
would particularly solve two major problems, one of which is allowing for cheaper
cost of power as licences would be granted only to the entity with the most
efficient plan of procuring that power.
The
Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, on Wednesday dismissed the
report by Fitch Ratings on Nigerian Deposit Money Banks that their assets
quality was at risk. Sanusi said in an investment conference in London that he
was not worried by the report, but, pointed out that the banks should be
increasing their lending to small and medium-term enterprises. Reuters quoted
Sanusi as saying, “In my job, I
have more information on the banks than Fitch has, and I don’t have the concerns that Fitch has.”
Fitch
Ratings, an international financial rating agency, had said on Monday that the
recent rapid credit growth or lending by Nigerian banks might lead to weakened
assets. It said in a special report that the development could give rise to
weakened asset quality and higher impairment charges if left unchecked. A
director in Fitch’s Financial
Institutions team, Denzil De Bie, said, “There
was a marked improvement in banks’
asset quality during 2011, following the sale of problem loans to the Asset
Management Corporation of Nigeria. However, rapid underlying credit growth of
30-66 per cent was evident in most of the Fitch-rated banks in 2011, which the
agency considers will be a negative credit driver if it continues.
“Fitch considers that many Nigerian banks have thin
levels of Fitch Core Capital, which are lower than is appropriate for Nigeria’s difficult operating environment. Sustainable
Fitch Core Capital ratios will be a key rating driver for any future positive
action on the banks’ Viability
Ratings.” However, the CBN governor pointed out that falling
oil prices and domestic energy output due to declining global demand were the
concern for Nigeria’s economy. He
added that the worsening situation in the euro zone and rising global food
prices might also push inflation higher, noting that the country’s slower growth and tighter fiscal discipline could
counterbalance those upward effects.
To help address the huge infrastructure
deficit in Nigeria, the World Bank is poised to provide $200 million as a seed
fund to set up a Financial Intermediary Loan (FIL) scheme under the Public
Private Partnership (PPP) initiative. Head, Legal and Governance,
Infrastructure Concession Regulatory Commission (ICRC), Mr. Joe Ohiani,
disclosed this at the inaugural ESQ Project Finance Summit, held in Lagos, and
stated that some other development finance organizations have also agreed to
contribute to the scheme.
He added that eligible participating
financial intermediaries, particularly commercial banks with Africa Finance
Corporation (AFC) as the lead, will lend to qualifying private sector partners
in a Public Private Partnership (PPP) project at the financial intermediaries’ risk. He however emphasized that the objective of
the scheme is to provide long term funding for infrastructure development in
the country.
He stressed that in selecting eligible
projects, priority would be given to public investment programmes which are in
accordance with the national policy on PPP and captured in the federal
government Medium Term Sector Strategies and the National Infrastructure Plan
of the Vision 20:2020.
Presenting a paper titled, ‘Governmental Promotion of Infrastructure
Development,’ Ohiani bemoaned the
deplorable state of infrastructure in the continent as revealed by a recent
report of the World Economic Forum. The report showed that though annual
investment in infrastructure in Africa doubled from $17 billion to $35 billion
between 2001 and 2009, the overall infrastructure spending needs for
sub-Saharan Africa is estimated at $93 billion annually over the next decade.
He noted that the annual infrastructure investment gap of $31 billion offers
huge opportunities for private sector finance in infrastructure developments in
Africa. “Governments in Africa are taking active steps
towards addressing the state of infrastructure in the region,” he added.
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Index Summary
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BusinessDay
Afrinvest-30 Index
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|
1-Aug-12
|
31-Jul-12
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change
|
|
|
Index
Points
|
1,170.03
|
1,162.40
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0.66%
|
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P/E
|
12.0x
|
11.8x
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|
|
P/BV
|
1.6x
|
1.6x
|
|
|
Dividend Yield(%)
|
4.2
|
4.3
|
|
|
BA-30
|
NSE ASI
|
||
|
YTD change
|
18.14%
|
12.54%
|
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