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THE NATION WEONFSOAY. JULY 25. 2012
BUSINESS NEWS Shell dismisses Niger Delta exit report
Govt to import $l.2b cassava, rice processing plants
By £me. . Ugwuanyl
HE Shell Petrol!!um Development CompMy of NiS""' Umited (SPOC) has again clarified thllt divestment of its interesl5 from some a55eI5 in the weltern Ni~er Ihlta does not mean it 1! pulling out of the area Of Nigeria.. In a statement,. its spokesm.. n Tony Okonedo, dispelled ~ that it planned
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HE Feden\ Govern-
ment l5 10 Import 18 cassava anJl 100 rice processif18 plants worth 51 .2 bilUon from the Rl!public of China. The Minister of Agricullure and Rutal Development, Dr. Akirwunmi Adesinill. Mid this tvu part of the govemmert's eJforts to add mote "'ilut 10 the value chairu. epoeeially for cassava and lin! production. In a statement by the ministry, its DltKtOf (If Informalian, 5 .. II,u N.'inna, stilled tNt Nif;t"nJ'Il"Xror'Import bilnk and ChiN" export-import b • .,~ hIve begun negotiations on the 3eal. The President of China Development nank. Mt Wang W,idong. ~id China OUld Nlglma Ire agro-based countrlel and as,<;ured that his country would render the ~uired as5l.~ltnce \ll1I"1I)ong Idenldj·!d fann-
land development nnd production of ferllli;u and their U~ 15 othel .ru5 the two countriH COIJld partner just like the Clun>Se lute System. Meanwhile A<.'e,lna ha. pledged to ,upport and upgrade olboul 15. cl.lIsava processing Small lind Medium Enlnpn5e:S ($MEsI m the country Adeslna made 'h-> pledge yesterda)' during ,In • visit of cauava value-<hain sta.keholder5 to hIS office In 1.bup.. The President d "ahoMI C ..ssava Proce~,.,rs and Marketers M5OCUltion, Mr 1.yo Olubumi, 'uged the ministe' to 1001.. nlo the ~ndlbon of Ihe SJ..1Es' IUdit, Including other challeng6 r-.dng the m
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Borrowers to pay more as CBN raises bank's reserve T CI
HE cost of borrowingisex to~ a, Ihe Bank Nigeria's (CBN's) Mooe~ry Policy Committee (MPCl yesterday look measures to lighten liquidity to support tlie weilining naira. It, howt'Yer,left Its benchm~rk interest rate (Monetu)' Policy Rate), which it had kept on hold siner November, afler six sUCCl5Slve hikes last year, al 12 per cent. Bul the the baitking watchdog raised banks' Cash Rt'serve Req~t:nl (CRR) to 12 per ~nt from eight per cent and reduced net open foreign exchange positIOns 10 one per cent from three ~cent.
The CRR refers to a porlion of Nel Ihmand and Time Uabilities (NOn) of banks with the CBN. It fixes thl, percenlage of NOn. Central bankS Coln change thl! percentage u a monetary, measurt' to control the Ivalla.bility of funds in the economy Le. to in}ec:t liquidit}" or to 5u.ck liquidity, The lilst time the cf{R was raised by thi.!! magnitude, in Oclober, la51 year, about NBOObillion was withdrawn from the domestic banking .sector. The MPR is the interest rate at which the CBN lends to commerdal banks. It Indirectly mirrors the d~ lion of other interest rales in
s, ~d~:r:.c~~ljnU, Ind the KOnomy
ti~n~!~lfi'~'CBiNf~I~~: coura.ging pt'Ople to Ave. Ultimate.iy, this abo meal\! that the cost of credil from banks I! expected to go up a, their lending rites are moderated by the CBN Abo, bAnk.5 an! expected to .5GI.Ie down lpec:ufation on forex.. (ollowlng Ihe reduction irt fOle!: open position. Addressmg reporters at the etd of the MPC meetmg in Abuja, the CBN Governor MaIWn Simusi lamidoSenusi justified the renon for tn~ theCRR.5iI~ that
economy." Instead, bank.!;, he said, "have contmued to take advantageofhigh ~onJO'V emmt'fll 5eCUntie to dfrect credit away from Ihe~pri vate 5«IOT. In addition, the liquidity has provided ilInmumuon for Speculative aclivlty lJl ~ f~~ ~~ market WIth unplicatbts lOr inflaliooary expectation.Sanusi .. Iso said Nigeri.. was unprepared for a potential oil price $lump because the goverrunent was spend-
~~i:~~0~::2?insa.heinE:
Crude Account (ECA). The governor sUd the external resev\'S as ..1July 19, this year stood at USS37.16 billion.
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bil.!ttecannot OOIllInue to TUn down our ~ In order to have a stable exchange rate and the primary concern of the MPC 15 priCt'5lilbility," he said Srutusi said th.! increMe in eRR will nol nddress the
~n:~i~~~~~b~~~! inflation and exdutnge rale do not go out of control He.dnutted. "'The significant liqu.idity on the bOOb of banks has not ~ to inh!rmediationand lendlflg to the real
billion at l'fld-May_ The ECA held $2{1 billion prior 10 the 2fXJl gIobitl eo>nomic crisis, helping cushion Nigeria again,t sl~":'~~ growlh, bul despite nigh oil prices in recent ~ the ECA !'lOW' contains arOund 56 btllion. This is not enough 10 support the economy frciin f;tlling oil pnces.. Sanusi said. He said govemo~ have started mounting ~ on the Federal GoYemmenl to withdraw 52 billion from ECA. lJS$36.83
He ll!O highlighled the risks posed 10 the economy from the wor.;enmg insecu-
ri~il theft has Increased sharply this year in the Niger
~:,= =~I$; ~lriC:~ ~r~~s;;rlr':te~!: ~~~i~no~ i:!kt~ly, oil companies have AnalysIS sud the stance 01
the barilun&
wa~ ~A5
to
strengthenlhe f'\il1Ta., w'hich has been lui by in oil prit;'r.
ran
"This is huge and a clear statemenl of resolve on the part of the authoriliel on then detemunauQn to IUpport the naJl"ll despIte consKI.e-abk- exlemaJ threats." said Rana Khan, head 01 Africa Reearch al Siandud Char-
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-We expect Ihe nalra 10 5trengtheri on the interbank market on the back of thiS," Khan .dded. The Mira has been hit by a fall in the pri,," of oil, Nigeria'! main export, and glObal risk. aversion and has weak.· ened by nlmO!lI three percent
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agam5t the United States' dolI.. r ye,terday, oul~ide the CBN's NI50-t60 target tradin. "'''''. The naira fell 4.5 per cent agamst the dollar Ia!I year.
Fed Govt targets $50b foreign reserves by Dec. HE Federal Government is targeting S50 billion forel,n re-
T ~de~~1.ci~:b:rr!s ford:
KOnomy, Fmance Minl!ter, Dr Ngou OkonJo-lweala has said. Speaking yesterday lit the Nigeria Economic Summit Group conference on the Konomy, Mrs Okonlo(weala, who 15 also the eo.. ordinahng Min!!ter for the &utomy, !aid !here are lots d gkbal economk uncertainties
~I~~~~~rkfur ~!
ecunomy. Sh~ s.nid the nation's regel'Ve T1lSI.': from m9 billioo at ~ end of last year to m.7 billion in June, thi! year, but has dedJned remntJy because
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""The re:serve Stand at Sl6.J7
- To launch SWF in August s, Colllni Nw.a billion,. bUI our target is S50 billion by IN: md of the )"iV. With tlW YClYtility III oil pna!!I Jmd thr:~JrOWth"in the n::st ~ Ihr wnrid, we need to. As it ~ Nigeria tkleI not hOIve suffioenl buffen," she
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SllI' o~ dWlt when she ",me IAIo omce l;15t year, l'lI(e!IJ crud!!' had been depleted toS4.22billlcn 8uI thereisalso need to build It to SIO billion. She Silid ~ Ihis f!!ill is diffi:ult heroiUSIt' tile gm'emoo; nave Slid there was no need for SilVU1g5"And we are ~ymg no; If we keIep spending. wlllit if IIUfTle'~ haJlPl'lS in the worid7 I am ...~ proud. ~ at July 23,
v.~ had $6.98 billion an:J ifkeep png thai "''''y, maybe by diend 0I1hr year, we will have the 510 billion. We also wanl the foretgn reerves to nse 10 S50 bilbti\... she SlId. The Minister who spoke on the theme: l",pI~t,"g Nlgrrl" 's Tr_ns/ormIlIUIn Agmd,,-An updillt, 5ilid the governme.nt is slowly, but steadily making progT!'S5 to launch the 5;)vereigrtWealth Fund (SWF). She said the government has beer1 busy recruiting the prindpal officers. "We are doing due dillgen~ on them and thai IS suppOSed 10 end by the end or this week.. So, with !Orne luck, beause we still have to ne&,oliate salaries, maybe 6y fiist week of Au-
assets, especW1y onshme oil fill'ld5 in the IlreOI_ The comJMny's Maruliging Director, Muiiu Sunmonu 5ilid: "Weare not le..ving the western Niger Delta becituse of U\5l'CUOty or l'JlYlJ'"O(UIlt'J'Ital issues. '"We art' also not leaving Nlgena. I ha ....!! C'IJI\tinued to streu the point th~t tht' divestment of our equity hom some oil blocks in lhe Niger Delta 15 .. 5tr.IIeXIC refocusutg of our pot!folio .Sunmanu was reactmg 10 medii repor!.s Ihat SPDC was ending its operations in Weslern Niger Delta because of rising insecwityand unfavourable operating enyironment. The Shell chIef s.lud: ~Our asset sales are aimed at 51rengl~e_nin8 our I~ng term ~Ibon In Nlg!!na Tn 'act, what thiS means is that
gust, we can aclually .nnounce," she slud. She lamented the hi&.h mterest I"llte charged on loan!. saying thai the maximum mten5t rate in the eronomycan
~ t:k~ ,rrrb=~'t
is vf!r'j difficult to borrow The MinIster said for Small
and Medium Scale Enter~ (SMEs) to thrive, there IS the n~ 10 look at the struclure of inte.rest rate in this economl:. and i, being dOllC" by the mtra! Bank. 01 Nigeria. .., don't know many C'OWltries where 1I'e real rille olinteresi, which i.!! the rate between the nominaIl'<lie;mel Inftatim. is $ hidt 15 six or seven percent. UsuJilly, it is between one and two per cent. But Ifl Nigena. it is ~ as lugh ~ six per cent. ~ she siid
indIgenous independenl compames in support of governmenl's policy of encoura.sing Ihe growth of Nigen.. n compilme5 in the oil and 8u sector .and will deliver many opporturuti6 for Ihem It does nol mean we are lellving For voampie, SPOC conlinu6 loopI!'ute the Forcados Tennlnal in Western Niger Delta ~
NERCends electricity market rules
review From John 011k.henu., "-blip HE Nigerian Electricity Regula lory CommIssion (NERC) has complt'"led a forensic review of tfle Electricj.tj' Industry Market Rules (ElMR). According to NERc"s As1IIIani Gener.. 1 Manager, Medi., M .. ryam Yaya Abubakar, the commission emb .. rkt"d on Ihe review durlRg .. Ihre~ily work,hop of the Imtlal Stakeholder Advlll?')' Panel (lSAP) In AbuJA. whiCh held from July 13 -15 She explained that the review beame Rl"CeSSary to addrt'55 the enon and inconSISI~ m the market rules. and 10 harmon1St' the rules
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w~te~d~~ C:=t
the observed enon and inconsistencies an! due, in part,. to the
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have been in I!Xl5tence slllCt' February 2010, w!!re no
!:!~~~ r~~Ii:i:dem with She !aid- "The Eleclric Power Sector" Reform (EPSR) Act provides for a pre and posl priyatisahon stage in the evolulIDll of the electncily muk.el, and priVlltisation was 10 commern duro ing the latter ,tage of the transition market.