Business & Economy
FinancialVanguard BRIEFS Augusto & Co rating agency upgrades banks (In stablEI outloo.1
Potential grows for food crisis as prices surge -
environment .Ud not get any riskier. Nigerian banks have staged a sharp Tee< V ! ry in earnings during the lint hall of 2012. with mid·tier l.!nder. Diamond
'T"'he world could face a .1 food crisis 01 the kind seen in 2007/08 if countries restrict exports on concerns about a drought·fuelled grain price rally, the UN's food agency warned on Thursday, after reporting a surge in global food prices in July. A mix of high oil prices, growing use of bio fuels , bad wl!alhl!r, soaring grain futures markl!ts and restrictive export policies pushed up prices of food in 2007/08, spar king violent protests in couutties including Egypt, Cameroon a nd Haiti. Concern about extreme hot and dry weather in the U.S. M i rtwest sent corn and s oybean prices to record highs last month, driving overall food prices higher again and reversing the Food and Agriculture Organisation's forecast for declines th.is year. "There is potential for a situation to deVelop like we had back. in 2007/08," the FAO's senior economist and grain analyst, Abdolreza Abbassiafi told
Bank post:.ng a fou r - fold
ReuleJ'S .
profit rue, while First Bank and UBA dcubled proJits
this time around,
N agent:),
i9l!riu'!l main ratings Agusto & Co.
upgraded the country's banking sectur on Thursday by one notch to Bbb from Db, with a stable ouUook. citing
improved earnings a nd capital I ati~!. In a ratings report on Ni l(!rian banks, the agency said crMitgrowth was gradually n:tuming and risk
aversion w3.lu ng as bank s recovered fNl.l the shock of a $4 billloll b.,d .out in 2009. It
said the uPHt:lde was based on the hI! oks' financial condition alld their capacity to meet th!lr obligations,
assuming
the
political
during the pi!riod . Banking
sector capitE.! 'atio was 25 per cent in 2008 .
Nigeria auctions N172bll ln Tbills, tightens liquidity NTigerla sold N172 . 1 b1Hioll in treasury bills, more than expected, and increased tte yield it oUered on the sho~t •.jated paper to mop up UqbHity to s upport the cunenql, the central bank said. The ban]:: said last week. it would ~uctio n N142 . 1 billion of t]: ' uwy bills with maturities I between three months an one year. It gave no reason ~)r tbe additional N30 billion o~ issuance. The naira surged :..1 per cent to 4 morl! tha n ~.vl).week. high on the inle ~·bank market following tt.e sale and after NNPC sold! .450 million to banks in liuhange for the local cu rrepc y. The central bank sa id . t had sold N50 billion o f 1 8:~ .day Treasury bills at a yield of 15.30 per cent. h.igher :han 14.94 per cent at its llrevious auction last month. it ! ~old N90 billion of 364.da y hUs at a yield of 15.38 per cellt, compared with 15.60 per cent a month ago, and N32 .06 blllion or 91·day bills at a yield or 14.5 per cent. higher than 13.94 per cent at the last f 'lch t uction a month
1~
10
~ere is an expectation that WI! will not pursue bad policies and intervene in the market by restrictions, and if that doesn't happen. we will not see s uch a serious situation as 2007/08. But if t hose policies get repeated, anything is possible." A number of major producers imposed various restrictions on exports in an attempt to control domestic prices in the 2007/08 cruis, including outright bans as well as quotas or higher tariffs on exports of foods includfng rice, corn and
wheat. The restrictions reduced supply on international markets, helping to drive prices even higher. Grain markets have been boosted recently by speculation that Black Sea grain producers, particularly Russia, might impose export restrictions after a drought there hit crops : Markels drew a little comfort from official Russian comml!nts on Wednesday that the country · saw no grounds to ban grain exports this year but did not rule out protective export tariffs after the I!lld of lhl! 20 12 calenda r year.
UN
The FAO Food Price Index. international wheat prices had which measures monthly price foUowed, rising about 19 per cbanges for a food basket of cent amid worsening output cereals, oilseeds, dairy, meal prospects. and sugar, averaged 213 Although below a peak of points in July, up 6 per cent 238 points in February 2011, from 201 points in June, the when h!gh food prices helped FAO said in its monthly index drive the Arab Spring update . The rise, which uprisings in the Middle East followed three months of and North Abica, the index is declines, was driven mainly still higher now than during by a surge in grain and sugar the food price crisis in 2007/ prices, while meat and dairy 08. Higher food prices mean prices were little changed, the '-higher i mport bills for the FAO said . It said thl! U .S. poorest countries, which do drougbt, which is the worst to not produce enough food hit the Midwest in 56 years, domestically, and A strong had pushed up com prices by dollar would deepen that almost2J percent in July, and impact.
'Mr. Akin/ola Williams. doyen of Accoun lancy profession and Doy1n Owolabi at th e doyen's g3rd birthday on Aug g, 2012.
Channel funds to sectors with high potentials for productivity -NACCIMA I
By NAOMI UZOR 'T"be Nigerian Association "L of Chambers of Commerce, Industry, Mines and Agriculture {NACC1MAJ has urged the Federal Government to channel funds to sectors wi.th high potentials for productivity. Speaking ata meeting with stakeholders on CBN intervention funds the National Presiden t of NACCIMA, Dr. Herbert Ademola Ajayi, said that the funds should be channeUed to sec tors with hi gh potentials for productivity
and more money should be allocated to existing funds while new funds are created for other sectors considered relevant. "The top ten sectors the government should focus on indudl!. Agriculture, SMEs, Manufacturing/lnfrastructure, Power/PHCN, Education , Hl!alth, Entertainment, Transportation, Land & Housing and Security, ~ he said . Acco rding to him, there is a need La create more awareness of available funds, ' including detailed in formation on the
requirements . The proposed tenure of intervention funds should be between 1· 10 years and funds should be disbursed through appropriate channels such as Apex registered assodations, Cooperatives, Unions , etc, adding tba t intl!rvention funds are created to stimulate businesses, which will in turn impact economic growth . Hence, the process for accessing funds should be madl! easier, while the collateral requirem ent s should be reduced . He said government should do more to manage funds
efficil!nUy. There should be transparl!ncy in the manag e ment and disbursement of the funds, with the private sector s takeholders duly carried along . Infrastructure and power supp ly should be attended to urgently as this hinders business perfonnance and negates the who le essence of the funds and GovernmenVPrivate Sector need to device means of encouraging/empowering the feminine gender to attempt accessing intervention fund s based on existing/generated modalities.