Daily Review

Firm to Build 4000MW Power Plant – Businesday

Federal government’s bid to ensure regular power supply has received a boost as Sparkle Energy has said it planned  to build a $10 billion 4000 Gas-fired Power Plant called Sparkle Power Plant, which is to become the largest gas-fired power plant in Nigeria. Making the disclosure in a document made available to THISDAY, Groot Property Group Ltd said it floated the firm (Sparkle Energy) in partnership with some prominent Nigerian entrepreneurs and scholars based in the United States,  and a Nigerian consortium for the development of the power project. The company said the project, with a construction budget of $10 billion was designed to sufficiently power up to 5 million homes in Nigeria. Nigeria, with a population of about 155 million produces more than 22 billion of KWh and consumes more than 20 billion KWh, with a surplus of about 2 billion KWh of electricity, the company said. The Chief Executive Officer of Sparkle Energy, Julius Gbayange, said:  "Every well-meaning Nigerian understands the importance of clean, safe and constant power supply. This is the core of the development of our nation's economy because it addresses the question of industrialisation and the current high rate of unemployment. And we are glad that under this oriented Groot Property Group's technical mentorship and planning management, this power project is going to help rid Nigeria this illness. This is a new dawn for Nigeria.” The consortium also seeks to form a partnership with the federal government of Nigeria for the development and realisation of Sparkle Power Plant.

Subsidy Deductions Hit N1.264tr, Say Govs

The Nigerian Governors’ Forum (NGF) Monday said N1.264 trillion has been deducted from the federation account since January this year by Federal Government agencies as oil subsidy without authorisation. Speaking at the end of its meeting last night in Abuja, the Forum said the deductions were unacceptable as they went beyond the N240 billion appropriated for the purpose in this year’s budget. In a communiqué, the NGF said: “Members noted that the total deductions for last year were N500.6 billion which has been more than doubled to N1.264 trillion in the first nine months of this year suggesting erroneously that consumption has increased. It also rejected what it called illegal deductions to the tune of N1.079 trillion. “The Forum unanimously rejected all illegal deductions amounting to N1.079 Trillion for nine months in excess of the budgeted sum of N240 billion for oil subsidy for the year in clear violation of the provisions of the Appropriation Act 2011 and the Nigerian Constitution. The NGF further said: “The Forum commended the decision of the state commissioners of finance and accountants-general for rejecting the illegal deductions of N231.6 billion at the Oct, 2011 FAAC meeting, noting that the lawful deductions for the year have been met.

CBN Outlines New Agric Policy – Thisday

The Central Bank of Nigeria (CBN) Monday proposed to the National Assembly major policy and legislative reforms designed to reposition agriculture in the Nigerian economy. The proposals came just as the CBN disclosed that Nigeria's total food import bill has hit $4.2 billion (about N638.4 billion) annually due to the neglect of agriculture. The apex bank asked the parliament to review the Land Use Act and streamline the legislation to make transparent the process of obtaining designating land titles and specify patterns of land use across the country. It also sought the repeal of the Nigeria Agricultural Insurance Corporation (NAIC) Act to open up the sub-sector to other commercial insurance companies as a way of breaking the current monopoly and assisting farmers in bearing risks. CBN Governor, Mallam Sanusi Lamido Sanusi, who made these proposals at an interactive session with members of the House of Representatives Committee on Agriculture, observed with dismay the decline of agriculture as a revenue earner and the unwillingness of commercial banks to lend to farmers.

Excess crude account Governors urge Supreme Court to block withdrawals – Nation

Governors have asked the Supreme Court to restrain the Federal Government from making any withdrawals from the “Excess Crude Account” (or any account replacing same by any name howsoever) pending the hearing and determination of a suit they filed in 2008. They are bitter that the Federal Government, despite the suit, has continued to withdraw from the account, nearly depleted about N5.51 trillion balance on the account as at 2008 when the case was instituted. To check further withdrawal, the governors through their lead counsel, Chief Adegboyega Awomolo (SAN), urged the apex court to order that all sums standing to the credit of the contentious “Excess Crude Account” be paid into court or be otherwise secured as the court may deem fit. In the application, Awomolo said the Federal Government had announced its intention to withdraw, disburse and utilise another $1billion from the credit balance. In what they feared was “executive lawlessness” and “impunity”, the governors said unless the injunction was granted, the Federal Government would continue to disregard, disrespect and ignore the pending suits.

Ecobank completes Oceanic Bank’s acquisition

Ecobank Transnational Incoporated and Oceanic Bank International Plc have announced the completion of the recapitalisation of Oceanic Bank and the acquisition of 100 per cent interest in Oceanic Bank by ETI. The two banks during an official signing ceremony of Oceanic Bank’s takeover on Monday stated that all change control processes pertaining to the merger had been completed at the ceremony. In a related development, it was gathered after the meeting that a new board had been appointed with the Group Chief Executive Officer of ETI, Mr. Arnold Ekpe, appointed as the chairman of Oceanic Bank.It was also gathered that the Managing Director of Oceanic Bank, Mr. John Aboh, was retained as the managing director of the bank till further notice. Ekpe in his remarks at the ceremony said the bank would be merged with Ecobank Nigeria Plc before the end of the year. "The first stage as you know is the acquisition by ETI, of 100 per cent of Oceanic Bank. We expect that before the end of the year, Oceanic Bank will be merged with Ecobank Nigeria. In terms of customers’ accounts, we expect that customers of both banks should have access to their accounts in any of the two banks’ branches within the next three months," he said. He added that Oceanic Bank would retain its brand name for now, adding that the board of ETI would consult with the management of Oceanic Bank before taking any decision on the bank. Ekpe said, "I can assure you that we are not changing the name of Oceanic Bank immediately. I have had extensive discussions with top board members of the bank. Oceanic is a very strong brand in Nigeria and we recognise that, so I don’t think you would see us changing the name in a hurry. However, in the medium to long term, we would have to combine to become one entity.

Sanusi sees Naira reaching N155 to dollar – Businessday

CBN governor, Sanusi Lamido Sanusi, says he hopes to see the nation’s currency at the mid-point of N155 to the dollar, at the end of the financial system reforms exercise, as he reiterated the need for federal fiscal discipline. Sanusi, who also expressed determination to halt any likely run down on the foreign reserves, through  appropriate policies, emphasied the need for the fiscal side to complement their action, through fiscal consolidation. “We are determined to be in total control of the market and not allow speculators take charge and determine rates. By the end of the whole exercise, I think the mid-point of the naira should be N155 to the dollar. I’m not sure we will come to the level of N150 to the dollar,” Sanusi told BusinessDay, at the weekend. The naira, which at its peak, exchanged for N169/$ has appreciated of late to N162 at the parallel market, while the official rate is now N150.01/$, from N149/$, after a spate of rate reviews by the CBN.

NSE introduces ‘New Gold Exchange Traded Fund’ for investors – Guardian

AS part of its efforts to offer investors new windows to diversify their portfolio, the NSE, yesterday introduced New Gold Exchange Traded Funds to enable investors to invest directly in gold. Speaking during the official introduction of the new product, the Associate Principal ABSA Capital, A Southern Firm (liquidity Provider to the fund) Batsile Ngomane explained that the fund which is a cross boarder one, as it is currently traded on the Johannesburg Stock Exchange and other Exchanges of the world explained that the fund is an investment vehicle traded fund on a Stock Exchange, much like shares. According to her, most Exchange Traded Funds (ETF) are passively managed index funds, which normally track an index, adding that it provides the attraction of the returns of a traditional tracker fund like unit trust with the liquidity of a listed security. She added that ETFs are traded at prevailing market prices, which are approximately the same price as the Net Asset Value of their underlying assets over the course of the trading day.