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Nigeria Plans 10-Year Bonds in First Foreign Sale (Update3)
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By Paul Okolo and Jason Webb


Jan. 17 (Bloomberg) -- Nigeria will start meeting investors in London tomorrow to build support as President Goodluck Jonathan’s victory in a primary election boosts confidence in the political stability of Africa’s most-populous nation.

Nigeria will seek to raise $500 million after Finance Minister Olusegun Aganga meets with investors, his spokesman Bayo Adeniji said by phone from Abuja today. The proposed bonds will mature in 10 years, said Jeremy Brewin, who helps manage $2.5 billion at Aviva Investors in London and was among the investors who received notice of the meetings.


The continent’s biggest oil exporter is pushing ahead with its bond sale plans, first announced in September 2008, as crude trades near the highest level in two years and before the final presidential election scheduled for April 9. Jonathan won the nomination of the ruling People’s Democratic Party on Jan. 14, ending uncertainty over his candidacy.

“Jonathan has just had a resounding victory in the PDP primaries, so that element of political risk will for the moment at least not be at the forefront of investors’ minds,” Razia Khan, head of Africa regional research at U.K.-based Standard Chartered Bank, said by phone today. “Top of everyone’s concerns would be the political risk, and that’s simply because of the extent it had been ignored by holders of the Eurobonds in Cote D’Ivoire.”

Ivory Coast missed an interest payment Dec. 31 on its $2.3 billion of dollar-denominated bonds amid a political standoff over disputed results of the Nov. 28 election between incumbent Laurent Gbagbo, who refuses to step down, and internationally backed winner Alassane Ouattara.

Ivory Coast Record Low

Ivory Coast’s Eurobonds fell to a record low today as the country said it would pay the interest if creditors recognize Gbagbo as president.

The bonds of the world’s biggest cocoa producer declined 0.2 percent to 37.667 cents on the dollar as of 1:38 p.m. in Abidjan, the commercial capital, according to data compiled by Bloomberg. That drove the yield on the 2.5 percent debt due 2032 up 3 basis points to 16.876 percent.

Nigeria is rated B+ by Standard and Poor’s, four levels below investment grade. Senegal, a similarly rated West African country, has $200 million of dollar bonds due in 2014 that yield 8.543 percent, according to prices on Bloomberg.

Nigeria may get a lower yield at 6 to 6.5 percent for 10- year notes, Stuart Culverhouse, chief economist at Exotix Ltd., a London-based brokerage, said in a phone interview today.

Liquidity

“Investors would prefer a larger issue say of $1 billion or $750 million,” Culverhouse said. A $500 million issue may not be “particularly liquid,” he said.

Nigerian officials will meet investors in two cities in the U.S. after London, Adeniji said, without providing further details.


The country’s credit quality may suffer if it is drawn into any military conflict resulting from the political crisis in Ivory Coast, said David Damiba, managing director of London- based Renaissance Asset Managers, with $150 million of assets in Africa.

Leaders of the Economic Community of West African States pledged on Dec. 24 to use military force to remove Gbagbo from power if he refused to step down. Military leaders from the region are due to meet this week in Mali to discuss possible intervention plans.

An eventual Ivory Coast default would be “an independent event” that shouldn’t affect the pricing of other regional bonds, Damiba said.

Nigeria, sub-Saharan Africa’s second-largest economy, plans to use the Eurobond as a benchmark for local companies to price debt and fund development projects, Aganga said in September. The country appointed Citigroup Inc. and Deutsche Bank AG to manage the bond sale, helped by Barclays Capital and FBN Capital Ltd.
 

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Nigeria Stocks to Gain Further 13.7% in 2011, CSL Says (Update1)
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By Vincent Nwanma

Jan. 17 (Bloomberg) -- Nigerian stocks, Africa’s best this year, may gain a further 13.7 percent in 2011 as President Goodluck Jonathan was named his party’s candidate for the April election, raising chances that reforms in the banking, oil and power industries will take place, CSL Stockbrokers Ltd. said.

The measure is expected to reach 31,000 by the end of the year, and 39,000 by end-December 2012, analysts including Guy Czartoryski said in an e-mailed note to clients dated today.


Jonathan won the nomination on Jan. 14 of the ruling People’s Democratic Party to compete in the April 9 presidential election, easing concern that infighting in the party would destabilize the nation. The opposition Action Congress of Nigeria named Nuhu Ribadu, the former head of Nigeria’s anti- graft agency, as its candidate.

The events “have reduced political risk,” wrote the analysts at the brokerage, which has offices in Lagos and London. “The election this April of President Goodluck Jonathan, and with him the reform program, appears more likely now. We still see further upside potential but we expect things to cool off in the short term now that the news is out.”

Nigeria’s All Share Index climbed for eight straight years, gaining 75 percent in 2007. In 2008, it plunged 46 percent in 2008 and 34 percent in 2009 amid a banking crisis sparked by loans to equity speculators.

The gauge increased 19 percent last year after the state company set up to buy bad debts from banks began its purchases, signing agreements with 21 of Nigeria’s 24 banks on Dec. 31. Asset Management Corp. of Nigeria sold 1.04 trillion naira ($6.8 billion) of bonds on Dec. 31 to fund the purchases.

The 215-member index snapped four days of gains, retreating 0.5 percent to 27,121.72 at 2:33 p.m. in Lagos, according to data compiled by Bloomberg. It has risen 9.5 percent this year, compared with a 1.7 percent increase in the MSCI Frontier Market Index over the same period. The MSCI Emerging Market Index has gained 0.3 percent this year.
 

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Golden Sugar of Nigeria Gets $143.3 Million Loan (Update1)
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By Vincent Nwanma

Jan. 27 (Bloomberg) -- Golden Sugar Co., a unit of Flour Mills of Nigeria Plc, secured a $143.3 million, multi-currency syndicated loan to fund the construction of a refinery in Nigeria’s Lagos State, Standard Bank Group Ltd. said.

Stanbic IBTC Bank Plc and Standard Bank of South Africa Ltd. managed the sale together with Standard Bank (Mauritius) Ltd., First Bank of Nigeria Plc and Zenith Bank Plc
, the lender said in an e-mailed statement today.

The complex will include a refinery that can produce 750,000 metric tons of sugar annually, a storage facility for 60,000 tons and a 12 megawatt gas-fueled power plant. Sugar production capacity will be doubled, it said, without providing a period.

Golden Sugar plans to expand the project to include growing, milling and processing the sweetener in within 7 to 10 years, according to the statement.

Nigeria is expected to import 1.4 million metric tons of raw sugar in 2010-11, up from 1.3 million tons in 2009-10, according to an April 13 2010 estimate by the Foreign Agricultural Service of the U.S. Department of Agriculture. Local production is less than 5 percent of total consumption, according to the agency.

The debt raised by Golden Sugar also included a $13.3 million Commercial Agricultural Credit Scheme facility to partly finance the development of the sugar farm, and a naira commercial-bank standby facility to hedge against foreign exchange risk, Standard Bank Group said.

Flour Mills last year raised 37.5 billion naira ($247 million) in a bond sale to finance existing bank loans, expand the company’s milling business and invest in a sugar refinery, it said Dec. 9.

The stock retreated for the first time in seven days, losing 0.3 percent to 81.8 naira by the 2:30 p.m. close in Lagos.

To contact the reporter on this story: Vincent Nwanma in Lagos via Accra at [email protected].
 

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Nigerian Growth Accelerated to 8.29% in Fourth Quarter

Nigeria’s economic growth accelerated to 8.29 percent in the fourth quarter, boosted by agriculture and higher oil prices.

Growth picked up from 7.86 percent in the previous three months, Information Minister Labaran Maku told reporters today in the capital, Abuja. Lamido Sanusi, governor of the Central Bank of Nigeria, had presented the growth figures to the Cabinet earlier.

Non-oil industries, led by agriculture, grew 8.87 percent and may continue to fuel expansion as the government encourages banks to lend more to farmers, Maku said, forecasting growth of 8 percent in the first quarter of this year. The country’s 24 lenders have agreed to triple their lending to agriculture to 3 percent of loans, Phillips Oduoza, chief executive officer of United Bank for Africa Plc., said yesterday.

“Without support for agriculture, it’d be very difficult to develop the economy,” Maku said. Agriculture is the largest provider of jobs in the country, accounting for 60 percent of all employment, he said.

Fourth-quarter growth surpassed the expectation of some analysts, including Gbadebo Banmeke of Renaissance Capital in Lagos, who had forecast 8 percent.

Oil Production

Nigeria, Africa’s most populous country and top oil producer, has seen crude production stabilize at 2.16 million barrels a day as a result of the relative calm in the Niger River delta, the hub of the country’s oil industry, according to Maku.

Attacks by armed groups targeting the oil industry cut more than 28 percent of the country’s oil output between 2006 and 2009, according to data compiled by Bloomberg. Assaults subsided after thousands of militants campaigning for more local control of the delta’s energy resources accepted a government amnesty and disarmed in 2009.

Crude oil for March delivery rose 52 cents, or 0.6 percent, to $91.29 a barrel at 10:31 a.m. today on the New York Mercantile Exchange.

Nigeria’s economy, surpassed only by South Africa in sub- Saharan Africa, will grow about 7 percent this year, compared with 7.8 percent in 2010, President Goodluck Jonathan said on Dec. 15.
http://www.businessweek.com/news/2011-02-02/nigerian-growth-accelerated-to-8-29-in-fourth-quarter.html
 

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2011-02-04 Nestle inaugurates N12bn factory in Ogun State


Nestle Nigeria Plc, a scion of Nestle Worldwide, on Thursday at the Flowergate Industrial Estate, Ogun State, inaugurated a new factory.

According to the company, with an investment of N12bn (CHF 87m), the Flowergate factory is key to Nestle’s growth in Nigeria and in Africa as a whole, and will be initially dedicated to the production of Maggi products.


This new factory is Nestle’s 27th in Africa and has been projected to further strengthen Nestle Nigeria’s role as the largest culinary manufacturing operation on the African continent.

The inauguration was attended by Vice-President Namadi Sambo; Governor of Ogun State, Otunba Gbenga Daniel; and Nestle Worldwide Chief Executive, Mr. Paul Bulcke.

Spread over an area of 36.3 hectares, the new 12-hectare facility, according to the company, will specialise in the production of Maggi products, and more specifically, in Popularly Positioned Products varieties of this popular brand. Nestle’s PPPs are products adapted to meet the specific requirements of emerging consumers in terms of price, accessibility, format and nutritional benefits.

They are regarded as a key driver for the future growth of Nestle’s operations in Nigeria. Many of the MAGGI products in Africa are iodine-fortified in order to help combat iodine deficiencies among the local population.

Bulcke said, “Nestle has been operationally present in Nigeria for 50 years, bringing meaningful value to society at large by sourcing locally, creating new local employment, offering nutritious products and helping in further development of the region. By opening our new facility in Ogun State, we will be closer to our consumers and can better adapt our products to their needs and preferences.

“This latest investment is proof of our commitment to Africa in which we will invest CHF one billion over the next two years.”

The Managing Director, Nestle Nigeria, Martin Woolnough, added, “Today is a major milestone in the history of Nestle in Nigeria and we are proud to see that our operations in Nigeria are not only measurable in length of time, but also by our positive impact on our stakeholders and our positive visible impact on the Nigerian industrial landscape.”

With this new facility, Nestle will double its production of culinary products in Nigeria and meet the growing demand for MAGGI products in Nigeria and other countries in the Central and West African Region. The factory will offer direct employment to 180 people and indirect employment to hundreds more.

Nestle’s activities in Nigeria amount to around N59bn (CHF 457 million). Since 2009, Nestle has invested N42bn (almost CHF 300 million) in its factories to help sustain its growth in the country.
 

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Nigerian Wealth Fund to Save at Least 20% for Future Generations
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By Paul Okolo

Feb. 10 (Bloomberg) --

Nigeria’s sovereign wealth fund, currently under debate in parliament, will set aside at least 20 percent of its assets accrued from crude oil exports for future generations.

The Nigeria Sovereign Investment Authority will be split into the Nigeria Infrastructure Fund, the Future Generations Fund and the Stabilization Fund, according to a draft of the bill obtained by Bloomberg. Each component will represent at least 20 percent of the total fund.


The fund is designed to ensure some of Nigeria’s oil wealth is saved and that it can’t be tapped on a regular basis to finance the government’s running costs. The government of Nigeria, Africa’s most populous country and top oil producer, has pledged an initial sum of $1 billion for the fund.

Each of the three components will create a “ring-fenced portfolio of investments,” the document says.

The finance minister can only withdraw money from the stabilization segment, “upon a proper demonstration of urgency,” in order to shore up the economy whenever lower crude prices curb government revenue,
the document says.

The West African country relies on crude exports for about 95 percent of its foreign currency earnings. It’s the only member of the Organization of Petroleum Exporting Countries without a sovereign fund, according former Information Minister Dora Akunyili.

Oil is currently trading at about $86.15 a barrel, compared with the $65 anticipated in Nigeria’s 2011 budget.

Depleting Reserves

The creation of the sovereign wealth fund comes after Nigeria depleted its current excess crude account from more than $20 billion in 2007 to less than $1 billion last year, according to a report in Abuja-based Daily Trust on Jan. 27.

Fitch Ratings lowered its outlook on Nigeria’s BB- credit rating to “negative” from “stable” on Oct. 22, saying it was concerned by withdrawals from the account and a drop in foreign currency reserves.

The sovereign fund, to be based in the capital, Abuja, will have a governing board headed by the president. Other members of include governors of the 36 states, the ministers of finance, justice and planning, the governor of the central bank and the chief economic adviser.

Finance Minister Olusegun Aganga said on Jan. 7 he expected the lawmakers to approve the bill before the end of the tenure of the administration in May.

To contact the reporters on this story: Paul O
 

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UK projects Nigeria’s post- election economic growth at 12 per cent .

NIGERIA’S economy has the capacity to grow by 12 per cent this year, if the Federal Government could conduct a free and fair election and address economic-retarding issues within the system.

This postulation was made on Tuesday in Lagos by the British Parliamentary Under Secretary of State at the Foreign and Commonwealth, Henry Bellingham.
Bellingham, who spoke during a courtesy visit to Leventis Motors at Apapa, Lagos, stressed that Nigeria needed to resolve the lingering crisis in the Niger Delta region, fix the power sector and boost infrastructure, “because the world was looking forward to the country as the economic power in Africa.”

He pointed out that Nigeria remains one of the fastest growing economies in the world and with its economic growth being at seven per cent now, the country could be at the verge of attaining 12 per cent growth after the transition programme, when there would have been stability in governance, adding that successful transition to democratic elected government, would send a ‘positive signal of business investment to the world.’

According to him, bilateral trade between Britain and Nigeria has spanned for decades so the United Kingdom was closely watching events happening in Nigeria, adding that was the reason why he came to Nigeria to deliver the message of Britain’s Prime Minister, David Cameron to President Goodluck Jonathan that the British government was impressed with the stability in the nation’s economy and was ready to assist Nigeria in her transition programme to a democratically elected government.

Bellingham noted that his mission also in Nigeria was to identify how British firms could be encouraged to invest more in Nigeria, and how Nigerian entrepreneurs could also come to Britain and invest, adding that boosting trade investment in Africa and Nigeria in general was one of the priorities of David Cameron’s administration.

He said that global trade has gone nuclear as countries are now looking for new grounds to explore business opportunities, stressing that Nigeria still remains the ideal place for business trade, because of the enormous business opportunities in the country.

“When I was appointed by our Prime Minister, David Cameron as Minister for Africa and the United Nations, I was told that one of my main responsibilities in Africa is to help boost trade and investments. I was to get to Africa, do what I could do to help UK’s businesses and also to encourage African businessmen to invest in UK, because trade is a two-way flow.

“Trade is about wealth creation; creating excellent and; is about moving your country forward. So, there is no country like Nigeria for entrepreneurial drive and shared enterprise. This is a country that her economy is growing at seven per cent. That’s absolutely incredible compare to European ways of growth. And I believe that when the power sector in your country is reformed and when better governance comes in as well, hopefully, after the elections, then your country will even grow faster, may be 10 or 12 per cent. And I think what that means is that there are very bright future for your young people. That is both already with jobs and those without jobs,” Bellingham added.

Speaking on terrorism, he said that there were already some British experts on security in Nigeria assisting the government on how to combat the spat of bombings in the country.

He however stressed that the Niger Delta crisis needed to be resolve urgently by government as the crisis is costing the country to lose about $10 million daily as revenue, adding that the loss revenue could be used and channeled at boosting infrastructure in the country.

“I think the key thing in Nigeria is you need stronger government. You need a completely transparent government that practices good governance. It is essential that a new government after the elections remove corruption. And it is also very important that the government sorted out the problem in the Niger Delta. Everyday, over $10 million is going missing from oil revenue in the Delta. That money should be used for building schools and hospitals, roads and helping young people in skills education,” he added.

On Leventis Motors partnership with British JCB firm, the UK’s minister said: “The Joint Venture partnership is a new chapter for JCB. JCB enormously would be making a big impact in this country because you got a growing economy. You are spending a lot of money on infrastructure. You got a lot of civil engineering projects taking place here. So it’s a huge opportunity for JCB and for me.

He continued, “the visit to Nigeria here today is to celebrate this joint venture and his part of my trade diplomacy in Africa, because am doing my possible best to boost UK’s trade in Africa, in Nigeria, which is possibly the most popular country in Africa and one of our most economy allies in the world,” Bellingham disclosed.
 

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Cashew Prices Double in Nigeria, Lifted by Ivory Coast Tensions
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By Sam Olukoya

Feb. 18 (Bloomberg) -- Cashew prices doubled in Nigeria in the last few months as political tensions in Ivory Coast, Africa’s second-biggest producer, curbed supply of the nuts, an industry official said.

“The price of a metric ton of cashew from Nigeria to the international market has gone up from about $600 to $1,200 since November,”
Olatunji Owoeye, president of the National Cashew Association of Nigeria, said in a phone interview yesterday.

Ivory Coast is in the midst of a standoff as incumbent President Laurent Gbagbo refuses to cede power to Alassane Ouattara, the internationally recognized winner of a Nov. 28 election. Ouattara and the Cotton and Cashew Monitoring Committee, which tracks Ivory Coast’s cashew industry, have called for a halt in exports of the nuts to cut off funds to Gbagbo.

“The situation in Ivory Coast has reduced access to the country’s cashew nuts, so there is pressure on countries like Nigeria,” Owoeye said. “Buyers who fear that the political crisis in Ivory Coast would get worse are quickly scrambling for Nigeria’s cashew.”

Declining production in countries such as Vietnam and higher world food costs also helped to boost cashew prices on the global market, he said.

The nuts are among the main non-oil export commodities from Nigeria, Africa’s top oil producer, along with cocoa, leather and rubber, according to the country’s Export Promotion Council.
 

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Nestle Nigeria Rises Most in Four Months on Profit (Update1)
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By Vincent Nwanma

Feb. 18 (Bloomberg) -- Nestle Foods Nigeria Plc, the country’s biggest food company by market value, rose the most in four months after saying full-year profit jumped 29 percent.

The stock gained 20.55 naira, or the maximum daily limit of 5 percent, its biggest advance since Oct. 15, to 431.55 naira by the 2:30 p.m. close in Lagos, Nigeria’s commercial capital.

Net income increased to 12.6 billion naira ($82 million) as sales climbed to 82.7 billion naira, according to a statement e- mailed by the Nigerian Stock Exchange today. A dividend of 10.6 naira was proposed.

The stock has gained 17 percent this year, compared with a 7.4 percent increase in the Nigerian Stock Exchange All-Share Index over the period
 

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Libyan crisis threatens global crude supply

Libyan crude oil production output may drop by as much as a quarter as Africa's third largest producer faces daunting civil unrest.


Beneficial for Nigeria

However, there is optimism that the spike in oil prices will be beneficial to Nigeria, the world's seventh largest producer. With a 2.3 million bpd output, experts say this is a good time for the country to build up her foreign reserves.


"It is worth noting that elevated Bonny Light prices could also help re-build the excess crude account and/or launch the planned sovereign wealth fund, although this would be conditional on the authorities' willingness to effectively resume the implementation of the oil fiscal rule and save oil-related proceeds for the rainy day," said Samir Gadio, emerging market strategist at Standard Bank.

According to him, this would improve the ability of the Central Bank of Nigeria to meet demand for dollars at the official foreign exchange market. He nonetheless said as an import dependent country, Nigeria should prepare for the downside: "The downside risk is, however, that higher energy prices could have an impact on imported inflation."

The series of uprising sweeping through the Middle East in the last few weeks has heightened fears about the possible slip into another round of global economic crisis.

Tunisia, Egypt, and now Bahrain, Yemen, and Libya have come under unprecedented civilian protests against the authoritarian rule that were hitherto in place. The fear is that this could spread to larger producers like Saudi Arabia. For a region which accounts substantially for global crude oil supply, major economies have cause for worry.

Intense volatility

Brazilian state oil company, Petrobras, has said it will not change its gasoline prices in Brazil despite volatility in global oil prices caused by Middle East turmoil, its president was quoted as saying by Brazilian media on Wednesday.

"We won't pass on the volatility of international prices to Brazil," Sergio Gabrielli told reporters on Tuesday, according to the Valor Economico newspaper, adding he expected months of "intense volatility" in commodity prices, according to Reuters.

Meanwhile, in America, economists are warning that the rising cost of crude could dent consumer confidence and stifle economic recovery. Experts fear that a rise in petrol prices could force businesses and consumers to spend less on other things, slowing both the economy and the pace of hiring.

Although Saudi Arabia has promised to make good any shortfall in global oil supplies, the concern is how much calm this would achieve in an already volatile oil market.
 

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Foreign investors maintain interest in Nigerian capital market

By Stanley Oronsaye


Still smarting from their losses in the wake of the stock market crash in 2008, many local investors are yet to regain confidence in the Nigerian capital market. As a result, foreign investors now account for a larger share of transactions on the Nigerian Stock Exchange (NSE).

Interim administrator of the NSE, Emmanuel Ikhazobor, who confirmed this, said the major challenge facing the Nigerian capital market regulators was to build confidence and put in place systems that would enhance efficiency and transparency.

He was speaking yesterday at the annual capital market conference organised by Business Day Newspaper with the theme, ‘Can Nigeria Lead Again?'

"It is true. As at yesterday (Wednesday), foreign investors accounted for 68 per cent of the volume and value of market transactions. Confidence has not grown among local investors, who are interested in taking profit; while the foreign investors are taking longer position in the market," Mr. Ikhazobor said.

Total market capitalisation, which peaked at about N12.6 trillion in March 2008, shed about 70 per cent in value as investors moved to alternative windows. The market has, however, been on the recovery, rising by about 18 per cent in January from the previous month's figures.
Increase trading hours

Mr. Ikhazobor said as part of efforts to improve liquidity, the NSE extended the trading period by two hours from 9.30am to 2.30pm in order to attract more foreign participation. He said the extension resulted in the increase in volume, value, and the number of deals in the market.

He further disclosed that the extension, which became effective December 6 last year, was to be reviewed in less than six months.

"From the result we have achieved, we may not wait for six months. We may need to increase the trading hours again in order to increase trade on our market," he said.

Mr. Ikhazobor also said the regulators were looking at removing the five per cent cap on share price: "We are looking at scenarios. If we discover that it will increase liquidity, we will tamper with that also."

Director general of the Securities and Exchange Commission (SEC), Arunma Oteh, said there was need for more institutional investors to play in the market: "Traditionally, our market has been retail driven. What will enhance liquidity in the market is if there are more institutional investors."

She said rather than investing directly, retail investors should be encouraged to pool their funds together under registered investment scheme for fund managers to invest on their behalf.

Increase investor confidence

Ms. Oteh said as part of plans to increase investor confidence in the market, it was putting in place effective regulation and good corporate governance code.

"A world class market is one that engenders investor confidence, has breadth and depth in terms of product offering, is characterised by market integrity, a strong and transparent disclosure and accountability regime, fosters good corporate governance, and is fair and robust, and efficient market place," Ms. Oteh said.

On his part, managing director of the Asset Management Corporation of Nigeria (AMCON), Mr. Mustapha Chike-Obi, said the challenge was to get investors back to the market and create more products to deepen the market.

"I think we must have securities lending to encourage investors to express themselves. Luckily, AMCON is going to end up with a large portfolio of securities which we pledge to hold for two years at the minimum. I want to tell you, if you want to borrow AMCON's portfolio of shares, you have those already. That will be a start," Mr. Chike-Obi said.

He said operators need to rise up to the challenge of creating products that would suit the investment needs of Nigerians.
 

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Libyan crisis threatens global crude supply

Libyan crude oil production output may drop by as much as a quarter as Africa's third largest producer faces daunting civil unrest.


Beneficial for Nigeria

However, there is optimism that the spike in oil prices will be beneficial to Nigeria, the world's seventh largest producer. With a 2.3 million bpd output, experts say this is a good time for the country to build up her foreign reserves.


"It is worth noting that elevated Bonny Light prices could also help re-build the excess crude account and/or launch the planned sovereign wealth fund, although this would be conditional on the authorities' willingness to effectively resume the implementation of the oil fiscal rule and save oil-related proceeds for the rainy day," said Samir Gadio, emerging market strategist at Standard Bank.

According to him, this would improve the ability of the Central Bank of Nigeria to meet demand for dollars at the official foreign exchange market. He nonetheless said as an import dependent country, Nigeria should prepare for the downside: "The downside risk is, however, that higher energy prices could have an impact on imported inflation."

The series of uprising sweeping through the Middle East in the last few weeks has heightened fears about the possible slip into another round of global economic crisis.

Tunisia, Egypt, and now Bahrain, Yemen, and Libya have come under unprecedented civilian protests against the authoritarian rule that were hitherto in place. The fear is that this could spread to larger producers like Saudi Arabia. For a region which accounts substantially for global crude oil supply, major economies have cause for worry.

Intense volatility

Brazilian state oil company, Petrobras, has said it will not change its gasoline prices in Brazil despite volatility in global oil prices caused by Middle East turmoil, its president was quoted as saying by Brazilian media on Wednesday.

"We won't pass on the volatility of international prices to Brazil," Sergio Gabrielli told reporters on Tuesday, according to the Valor Economico newspaper, adding he expected months of "intense volatility" in commodity prices, according to Reuters.

Meanwhile, in America, economists are warning that the rising cost of crude could dent consumer confidence and stifle economic recovery. Experts fear that a rise in petrol prices could force businesses and consumers to spend less on other things, slowing both the economy and the pace of hiring.

Although Saudi Arabia has promised to make good any shortfall in global oil supplies, the concern is how much calm this would achieve in an already volatile oil market.
just a quick question....
the money we get when the oil is over the benchmark budgeted it goes to the ECA Excess rude Account now that it has been wiped and killed to be replaced by Sovereign Wealth fund which has not been passed by the legislature.. this excess crude money goes where?

if it is foreign reservers after some months when the foreign reserves are announced am SURE it would still be no reasonable change -- but neva mind


where is the money kept ?
 

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just a quick question....
the money we get when the oil is over the benchmark budgeted it goes to the ECA Excess rude Account now that it has been wiped and killed to be replaced by Sovereign Wealth fund which has not been passed by the legislature.. this excess crude money goes where?

if it is foreign reservers after some months when the foreign reserves are announced am SURE it would still be no reasonable change -- but neva mind


where is the money kept ?
The money goes to the Excess Crude Account. . . . until the SWF is passed
The ECA is not killed until its replaced by the SWF. . .

Hopefully the Legislators do the right thing and pass the bill quickly
 

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Tougher than BRICs

The 11 "3G" Countries That Will Win The Future


Karen Maley

The global economy is poised to enjoy decades of robust growth, as a number of poor countries play "catch-up" to the rich industrialised countries in terms of income and living standards, according to Citigroup’s global chief economist, Willem Buiter.

In a major new report, Global Growth Generators, Buiter nominates 11 countries that are most likely to drive global growth – and generate profitable investment opportunities – over coming decades.

These '3G' countries are Bangladesh, China, Egypt, India, Indonesia, Iraq, Mongolia, Nigeria, Philippines, Sri Lanka and Vietnam.

The six components of the index are (1) a measure of domestic saving/ investment, (2) a measure of demographicprospects, (3) a measure of health, (4) a measure of education, (5) a measure of the quality of institutions and policies, and (6) a measure of trade
openness.


Read more: http://www.businessinsider.com/willem-buiter-3g-countries-2011-2#ixzz1F7Afbk00


As well, Buiter says that other countries, such as Mexico, Brazil, Turkey and Thailand, will likely enjoy rapid growth. But these countries need to make some economic adjustments, including boosting their domestic savings and investment levels, before they qualify for the 3G list.


Despite his relatively upbeat outlook for the global economy, Buiter warns that the path ahead will be "bumpy".

"There will be busts as well as booms. Beware of any proclamations of an end of volatility. Poor policies, conflict and natural disasters will change the growth equation for some countries in a negative way."
 

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Dangote Invests $1 Billion in Senegal

Chris Ugwu

3 March 2011

Lagos — The senior adviser to the Senegalese president on foreign investment, Serigne Mbacke says Dangote Group has over one billion dollar (N150 billion) investment in cement manufacturing and sugarcane refinery in Senegal.

Mbacke who disclosed this to journalists in Senegal during a facility tour of the factory, said that the Senegal government gave about 8,000 hectares of land to the group for the cement manufacturing and sugar refineries.

According to him, the group's investment was one of the biggest Foreign Direct investments by an Africa company in Senegal.

Mbacke said that the investment was an indication of a strong believe in the future growth of African economy.

He said Dangote's target production of about 45 million tonnes of cement was feasible with the level of massive investment in the expansion of old plants and construction of new plants in African countries.

The senior adviser said that Senegal, with a population of about 16 million, was becoming one of the fastest growing economies, adding that the demand for cement was high, because of the demands to meet housing needs.

He said that the country has all the raw materials to produce enough cement and export to other continents.

Also speaking at the forum, Mr Ganapathy Balasubrahanian, General Manager, Project, Dangote Industries in Senegal said that the cement plant had installed capacity of one million metric tonnes per annum.

"We are hoping to have more than 1,500 direct workers and 7,000 indirect workers at the site.

"Before the end of 2011, that is, between November and December, we will start operation.

"We are hoping that Dangote's investment in the country will complement the government's efforts in stimulating economic growth and creating jobs," he said.

According to Balasubrahanian, at the moment only two cement manufacturing companies, SOCCOSIM and SEHEM are operating in Senegal.

He said that the companies produce 2.5 million tonnes per annum as against the local demand of 3 million tonnes per annum.

"The investment marked a significant milestone in Senegalese quest to be self-sufficient in cement production.

According to him, the plant is being constructed by SINOMA, a Chinese company in a site with abundant raw materials that can last for 50 years life span.

He said that in spite of the availability of power in the country, the company would build a coal power of about 30 mega watts to power the plant.

On why the choice of coal, he said "it was chosen because of lack of adequate water to build hydro power and insufficient gas in the country for now

"For now going hydro or gas will not be prudent but one thing about the group cement plants is that they are built in such away to ultilise different types of power ," he said

Balasubrahanian noted that the investment was strategic, adding that Senegal with a population of about 16 million was becoming one of the fastest growing economy with it attendant need for more housing.

He added that Dangote's target of producing about 45 million tonnes of cement in Africa was very feasible with the level of massive investment in old and new plants in some African countries.

Lauding Senegalese investment and trade policy, he said that the land was free and the company also enjoyed tax holiday for about 10 years and free duty for all imported equipment for the construction of the factory.

On challenges faced in distribution of the cement being a bulking product, he said "there is rail system from the factory to the various parts of the country and Mali.

He said that Dangote presently had cement manufacturing firms in 14 countries in Africa
Balasubrahanian, who have over eight years experience in cement manufacturing and had worked as plant manager in India Bilia Cement Group said the company had increased its stake in South Africa's Sephaku Cement (Pty) Limited, from 19.76 per cent to 64 per cent in October 2010.

He said that the investment was worth R779 million ( about $113 million), making it the largest foreign direct investment by an African company into South Africa.

Besides, he said the firm would soon invest over $100 million in building a new cement manufacturing plant in Cameroon.

According to him, the move was to ensure that African remains self-sufficient in cement production and making the product available and at an affordable cost to the end users.
allAfrica.com
 

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Nigeria’s Billionaires Plan to Conquer Africa
Mar. 9 2011

This year, Nigeria adds a new billionaire Mike Adenuga, and sees Aliko Dangote’s fortune skyrocket.

Alike Dangote

In the past year Aliko Dangote’s fortune surged 557% to $13.8 billion, up from $2.1 billion, after he consolidated all his public and private cement holdings throughout Africa into the continent’s largest cement manufacturer and took it public on the Nigerian stock exchange in October. Dangote Cement now has a market value in excess of $13 billion, and accounts for a quarter of the Nigeria Stock Exchange’s total market capitalization.

The dearth of native suppliers to meet increasing cement demand is driving the stock price. Dangote projects demand at 72 million metric tons and growing because of the drive to build infrastructure in Nigeria, Africa’s most populated nation, as well as other countries; current supply is 67 million metric tons, a shortfall of 5 million metric tons.

For perspective, he is now richer than longtime white South African billionaires Nicky Oppenheimer of Debeers and Johann Rupert of luxury goods group Richemont, which owns Cartier, Dunhill and other premium brands.

For now he’s gearing up to introduce Dangote Cement to foreign investors. Companies listed on the Nigerian stock exchange are required to have a minimum free float of 25%, Dangote initially listed 5% of shares. According to analysts at Thaddeus Investment Advisors, the Nigerian market is too shallow for a stock of Dangote Cement’s size to be listed on the exchange; this is why the balance of the free float will be listed outside of Nigeria. Dangote, who recently bought himself a $45 million Bombardier aircraft for his birthday, has been shuttling back and forth to London for months, in anticipation of a public offering in London later this year.

He is certainly one to watch. After a lucrative career in trading, Dangote ventured into manufacturing pasta, salt, sugar, and flour in 1997, in part encouraged by the policies of former president Olusegun Obasanjo. Eventually Dangote went from importing and rebagging cement to production as well; he was awarded the government’s then state-owned cement business and began building his own plant in 2003. Cement revenue which has been primarily based on imports grew 15% a year between 2001 and 2005; once the Obajana plant was fully operational in 2007, revenue quadrupled; in fiscal 2009 revenue was $1.2 billion.

Dangote Cement now owns three cement plants and two terminals in Nigeria where he both produces and still imports cement. The Obajana plant is Dangote’s largest to date and controls the largest market share in Nigeria; Dangote terminals at Lagos and Port-Harcourt have the highest import quotas of all local companies. With additional capacity coming on line this year, total capacity is expected to reach 26 million metric tons by the end of 2011. (also helping boost profits: Dangote’s newly combined entity is tax exempt through 2017.)

But he won’t stop there. Dangote has started building investments in cement plants and terminals across Africa including Senegal, Zambia, Tanzania, Congo, Ethiopia, Cameroun, Sierra Leone, Ivory Coast, Liberia and Ghana.

Mike Adenuga

Meanwhile his compatriot Mike Adenuga who founded Globacom, the mobile, fixed, broadband, and international gateway carrier, joins Forbes’ billionaires list with a net worth of $2 billion. Globacom launched services in Nigeria in 2005, in the Republic of Benin in 2008 and has licences to operate in Ghana and Cote d’Ivoire (with Togo and Senegal next). He took a big gamble laying a $1 billion undersea fibre optic cable, Glo-1, to link Africa with the rest of the world. (partnered with Alcatel-Lucent) The connection will help lower prices for customers as well as help Adenuga expand more quickly.



http://blogs.forbes.com/tatianaserafin/2011/03/09/nigerias-billionaires-plan-to-conquer-africa/
 
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