Conoil Plc, Mike Adenuga’s Oil Coy, in trouble!

With the public chastising of Conoil Plc last Wednesday by members of the Senate Committee on Public Account, an uncanny connect was established between the arrest and brief detention of Dr. Mike Adenuga by the Economic and Financial Crimes Commission in November 2006 and the culpability of his oil company, Conoil Plc in withholding statutory remittance of bridging fund to the Petroleum Equalisation Fund (PEF). Here.

ANOTHER FIT OF RANTING AT OFFICIAL INANITIES OF 2008

ULD by ol’Victor Ojelabi

No year had compared with the cataclysmic datelines in economic history since the great depression until the year 2008 came along. Global economic growth had skyrocketed over the last 20 years engendering a new measure of comfort and access to luxury as the population of the wealthy ballooned by the day. By the end of the first quarter of 2008, the stock market in Nigeria and those across the world had recorded mirthful growth, that the Nigerian bourse was rated the highest most profitable stock exchange in terms of returns on investment in the emerging market segment this is just as other investors around the world celebrated returns on their investment.

But by the beginning of the second quarter of the year, economic metrics started showing stressful signs of falling decimals on the statistics of economic performance measurement, this, soon engulfed news emerging from all sectors of the economies across the globe. Nigeria had capitulated even before the formal announcement of the global financial meltdown; the nation’s institutional regulators had frantically talked our stock market into a crisis, obviously, since non of these regulators were instrumental to the buoyancy of activities in the market either by deliberate planning or policy thrusts, they can’t, even up till now, fathom why the market took a dive from pronouncements that they apparently considered innocuous.

It is an enduring hall mark of the profligate characterization of the managements of the Central Bank of Nigeria, Securities and Exchange Commission and the Nigerian Stock Exchange that they still explain away the N3.2trillion lost to investors lose of confidence in the market as mere market correction. These institutions responsible for the state of health of the Nigerian Stock Exchange decidedly got inebriated with the unplanned success of the Exchange and having a lack of the knowledge of the growth trajectory of the Exchange they riotously claimed right of proprietary authority over the Exchange resulting in regulatory agencies brick bats that added to scaring investors in the country: A CBN outlawing margin loans by commercial banks, a SEC increasing by more than 1000 per cent the capital base of stock brokers, and an NSE that encouraged white collar daylight robbery by allowing dead companies to trade and did not see the need to investigate the moribund stocks when their prices galloped into the north by more than 5,000 percentage point. When the reality dawned on gullible investors, the stock market became an atrocious platform for losing money for eternity. Simple, no hope of recovering lost investments.

This is the sorry commentary on the nation’s stock exchange, unfortunately, the larger macro economics is the worst for it. Again, finance ministry officials and their alter egos in the CBN, those, who, up till this moment, cannot provide in logical sequence, reasons crude oil price shot to a high of $148 before its sudden dive for the dirt as last year prepared its curtains down, are busy in reassuring the nation that it would not be affected in the consequence of the global financial meltdown.

In an import dependent country where even toothpicks are imported into the economy, is it not logical that all the malignancies that diseased the exporting economies from which we import our goods and services are certainly imported into the country. The naira had since crashed against the benchmark dollar in the foreign exchange market; crude oil price is yet to settle at its economic natural point on the downward drive in the face of present realities and the nation profiles an infrastructure deficit that threatens to kill off any wealth sustaining or creating initiative. Yet the experts in Abuja talk flippantly of a national economic that can withstand the onslaught of the consequences of the global financial meltdown. Noting can be more rubbish.

It all adds up to a year that once again underscores the deficient capacity for planning and projection by Nigerian officials. If this limitation is restricted to plannessness perhaps we could have found succor in the fact that all the needed to be done to rehabilitate our ramshackle economic thinking space is to provide officials the incentives appropriate to thinking for tomorrow. Unfortunately, this won’t change anything, government officials have turned economic initiatives and policy thrusts into glib political maneuvers as if the business community has become object of conquest. This was very much underscored when the Governor of the Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo, after denying any inappropriate policy resulting in the crashing naira for upward three weeks was forced to confess to members of the House of Assembly that were concerned enough about the turbulent engagement of the economy that they invited the governor to come and explain the direction of his monetary policies. The Professor of Economics had tongue in cheek told the House of Representatives panel that it was a deliberate policy of the CBN to let the naira depreciate.

Sadly, because Nigerians have become so shell-shocked to inanities of government and its officials nobody picked bones with the CBN Governor. In other more decent climes, the CBN Governor would have been asked to resign his office. Is it not reasonable for the purpose of planning and budgeting both by policy makers in the public and private sectors for the CBN to release a public statement informing the country of the CBN’s intension to allow the naira to depreciate and give a minimum two weeks notice. This would allow decision makers to know to plan and have an implementation procedure in response to the planned currency depreciation.

Rather, the CBN let loose the depreciation as if it was a war strategy on the business community. Really bad. Would things change in 2009? Hardly, despite President Umar Musa YarAdua’s commitment to realizing the potential of Nigeria in the New Year through the empanelling of a new federal cabinet, the fact of the matter is simply about lack of quality consciousness and sense of responsibility of government officials to Nigerians and project Nigeria. When other countries are engaged in strenuous efforts to rescue their economies, there is no outward sign by government in Nigeria of a serious effort to salvage an economy that may be inexorably headed for the sewage.

As published in the January 11th Edition, Issue 49, Vol 1.

NIGERIAN ENTERPRENEURS SCARE: GOVERNMENT POLICIES THAT DESTROYED BIG-TIME BUSINESSES

Only the naïve entrepreneur in Nigeria is excited with the contemplation of floating a manufacturing concern. The wise ones, schooled in the experiences they have had to contend with in the ever changing dynamics of manufacturing and other investments tasks in the production lines have fled the scene to the shelter of trading and merchandising. This, for good reasons. The challenges of conducting manufacturing and related production activities in the country, though, besetting, are however benign when compared with the ease with which government oft volte-face on policies and action stamp out the promises or existence of a once upon-a-time manufacturing plant.
In this review, we track some of the celebrated industrial concerns that had been heckled into non-existence by government policy summersaults over the years, official actions or inaction that have become the scare of entrepreneurs.
Presidential Initiative on Cassava Production
In 2002, cassava suddenly gained national prominence following the pronouncement of a Presidential Initiative. The intent of the Initiative was to use cassava as the engine of growth in Nigeria. In the ordinary sense, the perception is that cassava is indigenous to the country, official statistics claim that Nigeria grows more cassava than any other country in the world with a production capacity of about 34 million metric tones a year.
The Presidential Initiative on Cassava production and export was initiated in the year 2002. The goal of the initiative was to promote cassava as a foreign exchange earner in Nigeria as well as to satisfy national demand. The challenge of the initiative was to make Nigeria earn 5 billion US dollars from value added cassava exports by 2007. The objectives of the Presidential Initiative on Cassava was to expand primary processing and utilisation to absorb the national cassava production glut, identify and develop new market opportunities for import substitution and export stimulate increased private sector investment in the establishment of export oriented Cassava industries, ensure the availability of clean (disease free) planting materials targeted at the emerging industries, increase the yield, productivity and expand annual production to achieve global cassava competitiveness, advocate for conducive policy and institutional reforms for the development of the Nigerian cassava sector and integrate the rural poor especially women and youths into the mainstream of the national economy.
The federal government under Chief Olusegun Obasanjo backed the initiative with funding support while encouraging banks and other government and multilateral agencies to drive the initiative through funding support.
Suffice to say that in response to the government drive, an industry revolving around cassava plantation and processing started emerging. Opportunity seekers were encouraged to invest because of the obvious outward flourish of government. The signs were obvious too, under the Presidential Initiative on Cassava, Nigeria mandated millers to integrate 10 percent cassava flour to wheat flour in making bread, a percentage mix of ethanol in refined petroleum motor spirit (petrol) in the nation’s refineries. These were moves aimed at increasing the utilization of the tuber crop.
Other statistics pointed to the profitability of entrepreneurial engagement in cassava related activities; the domestic demand for cassava starch is about 130,000 tonnes per annum and 200,000 tonnes per annum for high quality cassava flour. The domestic demand for ethanol is 180 million litres – all ethanol is imported In Nigeria. None of these markets are being satisfied by local supplier even till today in Nigeria.
Individual entrepreneurs were attracted into the field and the buzz made the rounds of great things happening in cassava production in Nigeria. Unfortunately, the fancy was just for a time, even before the exit of the Obasanjo’s regime, there were obvious signs of government distancing itself from the clarion call to cassava farming and processing, soon after the assumption of office of President Umar Musa Yar’Adua, immediate successor to Obasanjo, federal government articulation of the cassava initiative lost its din.
The lacklustre enforcement of the policy of mandating flour millers to integrate 10 percent cassava flour to wheat flour in making bread and other confectionaries were altogether abandoned. Of course, the idealism of the refinery blend of ethanol with petrol had been a mirage according to entrepreneurs that had found their ways into cassava processing. “The nation’s refineries only functioned epileptically, rather, the bulk of refined products are being imported from foreign refineries, so the idea of the ethanol could not have worked out at all.” A cassava processor said
The government of Yar’Adua nailed the fledgling sector by abandoning the ethos of the Obasanjo initiated presidential initiative on cassava initiative. Importations of cassava processed by products and all have been allowed in the country with import tariff of 20 percent value.
“Apparently, this has sounded the death knell for that endeavour.” Another cassava processor said. “Local conditions have made it difficult to produce and process cassava, the thinking was to protect the industry until such a time that it would be able to compete favourably with importation but I understand that government decided to make this reversal because of the need to mitigate increased food prices. But then, we think that it would have been better to strengthen cassava production and processing in the country to boost food supply and to earn more income for government through export.
In the final analysis, the fact is that most entrepreneurs have had their investment and efforts gone up in smoke, another promise subverted by inconsistent government policy shift.
NIGERIAN LAMP PLC
One of the outstanding business endeveavour the recently demised Chief Beyioku Adebowlale of the Adebowale Store fame would be remembered for is his Nigerian Lamp Industry Plc. A courageous indigenous effort to play in the main stream manufacturing sector, when Adebowale built the Nigerian Lamp plant in his native Epe in Lagos State, it was reported to be the first of its kind in Africa. The plant was equipped to manufacture light bulbs and fluorescent.
It is reported that Adebowale was encouraged to make a foray into the manufacturing effort away from his electronic products trading concern in the Adebowale Electronic Store by the positive outlook of government incentive for indigenous manufacturers to commit to the economy in the 1980s.
Unfortunately, by the time the plant came on stream, it was like hitting dirt on first day of commission, government had made a reversal on policy, rather than protect local industries, government lifted the restricted importation of bulbs and fluorescents tube and other lamp forms. The market place was immediately flooded with Asian and Far East Asian countries bulb brands, which were cheaper though low in quality.
Nigerian Lamp, unfortunately, had become a publicly quoted company, Nigerians had subscribed to is initial public offer, but with the influx of cheaper products and brands into the market, the company’s operation became blighted and soon after became literally comatose. The company that never took off for operation eventually was placed under a receiver manager. This officially announced the demise of the once upon a Time promising company.
ROKANA INDUSTRIES PLC
Rokana Industries, had, back in the late 1980s caught the attention of the dentistry world with its production of the uniquely styled Jordan tooth brush. The market penetration of the Rokana brand of tooth brush was fast and quite domineering. It is reported that in its first year of introduction, the Rokana brand had pushed other imported brands to the back of the shelves. Jodan tooth brush was, considered the authentic Nigerian brand though the brand is a British franchise.
The dominance of the brand won’t endure for long however, because the Federal Government felt no need to specifically outlaw the activities of importers who would rather import fake Jordan tooth brush into Nigeria than to import other brands.
This more or less killed the vibrancy of the brand in the market place, it is however to the credit of the endearing qualities of the brand that it still subsists till day despite the continuous import of its counterfeit. The limitation is that Rokana, the producing company which is also a publicly quoted company floated by the immediate past commerce minister in the Yar’Adua’s cabinet Mr. Charles Ugwuh, has remained more or less moribund on the stock exchange’s price listing as investors ignored it even when the stock market was upbeat.
DOYIN INDUSTRIES
Doyin Industries is still a flourishing concern, this would not have been so if the man behind the manufacturing concern had not been well grounded in the ways of manufacturing in Nigeria. Of course he had been badly burnt from his engagement with manufacturing.
Samuel Adedoyin, the man behind Doyin Industries started out in business as a trader and he made quite a success of it that he diversified into manufacturing of household and food items and body care products. By 1996 he mobilized credit to build an awesome factory to manufacture his company’s range of products, and he was daring enough to take on multi-national companies. Travails soon ensued, electricity limitation to power the factory and the credit sourcing for funding the factory project became a burden, the market was also flooded with cheaper products from Asian countries.
The operations of the company soon became hamstrung, credit issues from City Express Bank became a public embarrassment for the Kwara State born industrialist, eventually, a production line of the industry had to close down and workers lay off.
DUNLOP
Dunlop Nigeria Plc is the latest of once buoyant companies to hit the dirt. The company had endured the harsh economic environment and had over the years returned impressive earnings to investors in the company being a public quoted company a greater majority of 95 per cent of the company’s shares belongs to several state governments, public companies and no fewer than 93,000 private Nigerians.
In 1991, it acquired majority shareholding in PAMOL (Nigeria) Limited, a rubber producing company to ensure uninterrupted supply of the right quality natural rubber, a major raw material in tyre manufacturing.
The company pioneered the radial car tubeless tyres in West Africa; produced the first crossply tyre in tubeless in Nigerian market; was the first Nigerian tyre company to hold the E.C.E 30 Certificate, an export requirement for car tyres to Europe; and first manufacturing company in Africa (beside South Africa) to hold the ISO 9002 certification.
It would soon be revealed during the former minister of commerce visit to Dunlop factory late last year that the company was merely struggling to stay afloat. The managing director of the company had complained about infrastructural deficiency, especially energy (electricity and recently, gas outages) and import duty regimes, inconsistent tax regimes which combine to place local manufacturers at significant disadvantage.
A major gripe of the company was its N8 billion expansion into the Heavy Truck Radial segment which was frustrated by reversal of government policy on tariff for imported truck/bus tyres from 40 per cent to 10 per cent at the beginning of 2007. This according to the company’s officials, created unfair and inequitable advantages for importers of finished tyres.
The dichotomy between tariff for car tyres (50 per cent) and Truck/Bus tyres (10 per cent) is said to have been abused by importers, both in terms of tariff and haulage evasion.
The situation confers undue advantages on importation rather than local manufacturing, now, the company has declared its incapacity to continue manufacturing activities in the country. Unofficial source said it would resort to tyre importation with grave implications for the rubber from its subsidiary, Pamol.
FAMAD (FORMERLY BATA) PLC and LENNARDS NIGERIA PLC
Before the introduction of the Structural Adjustment Programme, Bata’s ubiquitous outlets were the ultimate in foot wear shopping for all ages, Bata with its lesser cousin, Lennards Nigeria Plc. After 1986, the promise of flourishing was effectively shut out of the footwear manufacturing outfits. Government could not stem smuggling activities.
Synthetic shoes from Dubai and other Asian countries and high quality leather foot wear from Europe smuggled large scale into Nigeria particularly suffocated indigenous production. Ironically, the nation’s export in their raw forms the materials needed for footwear manufacturing. The products are exported, refined, recycled and packaged abroad to be sent back to Nigeria as import.
Till date, no appropriate government policy has addressed the inadequacy in the sector that has turned FAMAD (BATA) and LENNARDS into moribund companies.
VOLKSWAGEN AND PAN NIGERIA
In the 1970s Nigerian was the centre of attraction in the African continent with its hosting of the Volkswagen and Peugeot Automobile Nigeria plants. Nigerians, before the economic deluge of the last quarter of 1986 were sure of brand new cars proudly assembled in Nigeria. The assembly plants were supposed to be transitional in the nation’s march to becoming a full fledged vehicle manufacturing country.
The dream was cut short by government policy. Government steel rolling mills could not produce an ounce to support the desire to attain full production capacity, just as the value of the naira had suddenly depreciated in the years running to the close of the 1980 decade, and government back in the days, unofficially gave the go ahead for the importation of second hand vehicle (Tokunbo) at outrageously low tariff without consideration for age of vehicle to be imported.

Promoting smoking habit?

What do we do with a drag of smoke? Perhaps, Nigeria’s President, Umar Musa Yar’Adua is convinced we need a smoke filled lung to clear our heads. I read in the papers the past week a new Nigerian Federal Government directive reducing duties payable on cigarettes imported into the country by 20 percent while retaining the 40 percent band on other imported goods the country frowns at.

With the universal outcry against smoking and processed tobacco, one would expect a retraction of the story hours after it was made public but till now, I am yet to get a retracted update. While I am not a dye-in-the wool anti tobacco crusader, I still strongly holds that the persuasive arguments of the unhealthy consequences of cigarette smoking should be enough to make any government castigate any effort that could tempt the use of cigarette by any member of the Nigerian populace. Certainly, a reduced price for a unit of cigarette is a tempting option.

Perhaps, the Nigerian government is calibrating a new path to ascendancy of the powerful and wealthy British American Tobacco Company that had established a strong outpost in the country, no one near government that I discussed with would affirm that. Or perhaps still, it is an imposition of the President habit on the nation. As improbable as this may sound, my private crosschecks seem to confirm that this may be the case. I understand from reliable sources that the President used to delight in cigarette smoking, nobody would dare confirm that he still does, of course for fears of federal reprimand. But there seem to be a connect, an ex (?) smoking president and a 50 per cent reduction in duties charged on cigarettes. Is somebody tallying the connect out there?  

I do not think it is appropriate to officially emblemize Nigeria as a nation of nicotine addict. The cost to us in the near future would be unbearable; we have enough of troubles than to contend with hefty health consequences of a habit that is dying out around the world, even as smokers in Nigeria are fervently in discourse with their makers to save them from the addiction.

WHEN THE ZEAL IN A CRUSADER DIES OUT

Mr. Niyi Akinsiju

There must be something decidedly derelict about the civil service. I have seen several otherwise distinguished professionals that impacted their operating industries in the private sector turned hapless, loud talking caricature of their old selves.

 

 

In the instant domain of my observation is the Federal Minister of Finance, Shamsudeed Usman, a former Deputy Governor at the Central Bank of Nigeria. Though the CBN is not a private sector based concern, the apex bank has over the years bathed off the lethargy that usually counts in the characterization of the labourous working of the civil service. So we might as well assume that any one that had the privilege of working in the CBN had a quasi private sector orientation.

 

Not a few Nigerian were exhilarated when Usman was announced as the lead Minister at the Federal Ministry of Finance in the early days of President Umar Musa Yar’Adua’s government. Usman is now helped by Mr. Remi Babalola, a professional banker nurtured and nourished in the culture of the private sector. Nobody could have questioned the good judgment of the President, at least, it represented a continuation of the second term disposition of the presidency of Olusegun Obasanjo, who made away with the historian and politicians that held sway in the ultra sensitive Finance Ministry during his 1999 to 2003 first term in the presidency.

 

The appointment of Usman and Babalola revived the hope of furthering the modest economic gains recorded during the stay of World Bank chief, Ngozi Okojo Iweala, at the Ministry of Finance.

 

And I must say that the duo at the Ministry of Finance started well, that is, if you are one of those that gets easily enamoured oral rendition of what government wished to do and a generalized critique of current state of things the new officials met on ground.

 

This certainly seems to be the trend, newly appointed officials raged righteously at how heinous the responsibilities of the office they just resumed had been criminally abandoned by successor, and he shows his zeal, a candid reformist one at that in the manner of his outcry to the public. Unfortunately, this hysterical reaction merely last some few months, at best, a year. The newly appointed officials seem to get swallowed into the civil service vortex and thereafter fall into the now obvious description of furious motion without movement.

 

I recall the near radical presentation of the Ministry of Finance team to the public as presented by Usman when the administration was barely four months old. The presentation tagged The New Road Map To Economic Reforms succinctly captured the work load of the new helmsmen at the Ministry of Finance. Usman said of his intention to accelerate institutional reform and I quote him here.

 

“While it is acknowledged that the Federal Ministry of Finance is one of the pilot ministries under the first phase of the public sector reforms implementation, the evidence on the ground suggests the need to broaden and intensify the reform and restructuring, both within the Ministry and in a number of its agencies.

 

“In a number of its Departments and Agencies there is a fundamental lack of focus and strategic direction. A few examples will help to illustrate the point. the Economic Research and Project Management (ERPM) Department seems to have drifted from its core mandate of research and planning to supervision of the Ministry’s capital projects, a function for which it lacks the necessary expertise. As a result, the quality of the research reports produced by the Department leaves much to be desired.

·         the Home Finance Department (HFD), in addition to its many critical functions, is still granting approvals to government MDAs for foreign exchange transactions. In an era where foreign exchange transactions have been virtually fully deregulated, such approvals are completely anachronistic and, therefore unnecessary.

·         the National Board for Community Banks is still around, somewhere under the Ministry, ostensibly supervising the Community Banks, long after the CBN, where such responsibility squarely rests, has replaced community banks with microfinance banks.

·         A Budget Monitoring Department exists in the Ministry. It currently, however, has only one functional Division, which is somehow, still performing the functions of debt servicing and monitoring, which have since been effectively taken over by the Debt Management Office (DMO), itself being supervised by the Ministry. There is the need, furthermore, to reconcile the functions of the Budget Monitoring Department with similar functions performed by other MDAs of government, such as the BMPIU (now Bureau for Public Procurement), the National Planning Commission and NEIC, so as to avoid unnecessary duplication.

 

Thus, we intend to undertake a major restructuring of the Ministry, in order to avoid the overlapping of functions across Departments, eliminate outdated functions and redundancies and refocus the Departments and Agencies towards their core functions. The reform will also address the glaring problem of inadequate IT infrastructure knowledge and functionality. We also intend to resolve the serious delay in the completion of the second phase of the Ministry’s Headquarters project. The construction is already about 18 months behind schedule due, essentially to serious disagreement between the main contractor and the consultants to the project.

 

Working with other relevant agencies in the reform agenda also, such as the Public Sector Reform Bureau, we intend to champion reforms not only in our Ministry but also in the wider, public sector as well.

 

Well said, it was an obviously outraged Usman that presented the parlous state of his Ministry to the public. And to imagine that a World Bank chieftain once administered that den of rots as described by Usman. Anyway, I still thank the Minister for providing an insight into the cesspit of government in his early days in office when he still, obviously, burn with the redeemer’s passion.

Yet a review of the ministry’s activities still underscores the fact that nothing has changed, in fact, under Usman, what Nigerians have been regaled with are those genuflecting, ill explained seven-point agenda. I personally can’t yet discern a direction for the economy, fact is that I always have this feeling of journey back to the helpless economic drift of the 1980s God Forbid.  

 

Beyond the dump site that his Ministry can be compared with when he gave that presentation, Usman also talked about what he would do with other segments of the larger economy and related agencies. His words: “The most critical objective in the reform of the Nigeria Customs Service, however, is the reduction of the delay in the clearing of goods through the Nigerian ports of entry. Currently it takes an average of two weeks to clear goods through the Nigerian ports. The procedure is so cumbersome and frustrating that it engenders two events: The first is that it forces even the legitimate importer either to divert his imports to neighboring countries’ ports, or to succumb to unholy corrupt practices, in order to clear his goods. The second is that it creates a fertile ground for the illegitimate and or corrupt importer to undertake brisk business, at great cost to the Nigerian economy.

 

“Arrangements are therefore on, in consultation and conjunction with other key stakeholders engaged in the Nigerian ports of entry, to reduce this delay considerably. The target is to reduce the average clearing period from two weeks to two days. It is tough, but with the support and cooperation of all other stakeholders, it can be done. If other countries can get goods cleared through their ports in as little as six hours, Nigeria should be able to do it in 48 hours.

 

“It is a well accepted fact that a good tax system can be a major pillar of support for democracy. It can be posited, for example that one reason why the electorate has been so non-chalant in the face of the apparent fiscal mismanagement by some public officials, is the weakness in the personal income tax system, where the electorate does not directly feel the pinch of such transgressions. Considerable attention will be paid therefore to a broad range of efforts to improve tax administration all over the country, including the establishment of an efficient, computerized system of tax payer registration, working with other relevant agencies.

 

“Sustaining the Capital Market Reforms. It is important to acknowledge the growing confidence in theNigerian capital market arising from the recent reforms undertaken by Nigeria, including the banking sector consolidation and the repayment of the London and Paris Clubs debts. This has led to a substantial portfolio investment inflow into the Nigerian capital market. In 2000, the foreign portfolio investment inflow into the market stood at N51.1 billion compared with N1.0 billion in 1999. Since then the market has witnessed a tremendous increase in the inflow of funds from overseas, with a record high of N375.9 billion in 2005 and N117.2 billion in 2006. In this regard, it is very important to continue with measures that will strengthen and sustain confidence in the market. It is equally important to provide safeguards that will minimize the risk of the kind of meltdowns that have happened in the capital markets of some emerging market countries and the markets of some more developed countries. Such strengthening will be assisted by the following measures: a) the plan to broaden and deepen the market by, among others, the use of more instruments. In this regard the SEC will work closely with the DMO in the development of the bond market and its greater use by the Federal, States and Local Governments, as well as by corporates.b) Developing stronger mechanisms to check insider dealings and other forms of market abuse. c) Creating greater public awareness and utilization, of the capital market, especially the Abuja Commodities and Securities Exchange and d) The SEC will liaise with other key stakeholders to try to reduce further the cost of doing business in the Nigerian capital market”.

 

That was the Minister back then. Now, if you ask my opinion of the promises all that, and I guess it would tally with yours, I think the Minister’s speech writer is gifted with a lot of imagination and audaciousness.

 

So, what has changed with the Customs and goods clearing time from the ports? Is there an appropriately working tax collection and dispersal platform at work? And worst of all, the Minister actually saw into the future when he talked about averting a possible market melt down in the Nigerian capital market but It seems soon after those tough talks, the civil service packed him up, fed him the bland officious indulgence that others before him had got inebriated with…and well, as they all did, Usman drowled into complacency only to wake into the shocking reality of the sludge in the civil service. Shame!

AFTERMATH OF FALL-OUT WITH DANGOTE:FEMI OTEDOLA SEEKS ALLIANCE WITH JIMOH IBRAHIM

A re-alignment of business interests and affiliation is believed to be in the offing and it involves three of Nigeria’s most celebrated billionaires. In recent times, the news have made the rounds of a business skirmish between Alhaji Aliko Dangote and Mr. Femi Otedola, both had been known to be buddies and have been reported to have jointly engaged in business ventures over the last five years.

The chummy relationship between the two, however, is believed to have been embroiled in suspicion and a brickbat of sort on account of Dangote pitching his support for his kinsman, Sayyatu Dantata over the acquisition of the majority shareholding in downstream Chevron Nigeria Plc, a shareholding in which Otedola had confided his interest in Dangote.

Reports close to Otedola and Dangote indicated that on the heels of Dangote’s preference for Sayyatu, Otedola might have to go his way in matters of business relationship with Dangote, the officially profiled richest man in Nigeria.

But then, in the context of doing business in Nigeria where government influence is all pervading, a businessman must understand the act and intricacies of balancing power plays by networking with power players.

“Of course, you know that political power and influence determine a lot of things in business in Nigeria,” a source told FORTUNE & CLASS Weekly. “So to survive in business at the level these people operate, you have to know the right people and understand how to continue to pander to their needs. The relationship between Otedola and Dangote was principally predicated on this kind of facilitation. For instance, during the presidency of Chief Olusegun Obasanjo, the two had enjoyed some privileges of state support because Otedola enjoyed the favour of Obasanjo. Obasanjo extended his favour to Dangote because he was friend to Otedola, who is his Yoruba southwest kinsman. And since Nigeria’s democracy has a peculiar command structure, everybody within the circle of the Obasanjo’s presidency had to extend all the courtesies of power to the two businessmen,” the source explained.

With the shift of power to Northern Nigeria, our source reasoned that the centre of power influence revolves around a core group of Northerners and until the disagreement that unravelled the relationship between Dangote and Otedola, the two had farthered their business interests by acting together to relate with individuals that influence the power structure.

“With the parting of ways with Dangote, Femi must naturally form new alliances because he has grown quite massively in the business sector. And if I must tell you, the fact is that not many people are happy with big time players if they are not within the circle of the influential,” FORTUNE & CLASS source reasoned.

According to reports gathered last week, there are strong indications that Otedola, who owns Africa Petroleum, one of the country’s largest downstream sector operations and other long list of A-class business entities, might be gravitating towards Barrister Jimoh Ibrahim, the billionaire core investor in the nation’s biggest insurance concern, NICON Insurance.

“I understand that the two have started talking and I think it is natural. Barrister Ibrahim has survived a most violent onslaught by some adversaries in business and government. Do not forget that his business troubles started during the presidency of Obasanjo despite the fact that he, like Obasanjo, is from the Yoruba speaking southwest. This did not stop the presidency from contending with him on a number of issues that culminated in his sacking from NICON where he had invested so much. But as it turned out, he was able to resolve all the contentious issues and regain control of the company. And to top it all, he became quite friendly with the current president, Umar Musa Yar’Adua,” another source gushed.

“I think the two would find common ground to relate,” the source further asserted. “This is because the two of them are involved in the downstream sector of the oil and gas sector and are adventurous enough to pursue their business expansion dreams vigorously. I can say that very soon, the two of them would become a pair if the effort of elders facilitating the alliance is successful,” the source said.