Nigeria could sell stakes in its joint ventures with Western oil firms to China

Minister of State for Petroleum Odein Ajumogobia said China would not be given all the reserves it was seeking but that Nigerian state oil firm NNPC could sell stakes in joint ventures with existing oil partners if Beijing offered the right price.

The Chinese made a proposal which Nigeria is considering. They are asking for 6 billion barrels of oil from our reserves, but according to Ajumogobia, Nigeria is not going to give them all of that.

Western oil firms including Royal Dutch Shell (RDSa.L), Chevron (CVX.N) and ExxonMobil (XOM.N), operate in Nigeria through joint ventures with NNPC.

Asked if the state firm could sell its stakes to China, Ajumogobia said:
"It's an option we are also looking at. Why not? If the offer is very good and very attractive why not? NNPC has the right to do whatever it likes with its own share."

Some analysts say the sale of stakes to China by NNPC would likely be challenged by other partners in the ventures and that the prospect of putting a greater proportion of Nigerian oil reserves in foreign hands would face huge political opposition.

Chinese state energy firm CNOOC has identified 23 licenses in Nigeria in which it would like to buy stakes.

Emerging Capital Partners Invests In ananchi Group Holdings, a telecommunications company

The Africa-focused private equity firm, Emerging Capital Partners has committed $25 million to Wananchi Group Holdings, a telecom company specializing in pay-television and Internet services in Kenya and Tanzania

The equity investment will be used to upgrade and expand Wananchi's network infrastructure, enabling the company to provide east Africa's first triple-play service of digital pay-TV, high-speed Internet and voice-over-Internet protocol services.

ECP disclosed that East Africa has been characterized by limited supply of pay-TV and Internet services due to high costs and inadequate infrastructure.

Virgin Nigeria dropping the U.K. company's brand, Virgin Atlantic and seek fresh funding

The carrier new brand will be known as Nigerian Eagle Airlines and plans a private placement.

Virgin Atlantic, which has a 49% stake in the Nigerian carrier, has been reassessing its ties in recent months. Nigerian institutional investors hold majority control.

Virgin Nigeria dropped all its international flights in January to focus on what it called its "profitable domestic and regional operations."

Virgin Nigeria was part of an array of international affiliates launched by entrepreneur Sir Richard Branson, including airlines in Belgium, Australia and the U.S.

Nigeria - Central Bank (CBN) is considering three options to recapitalise the country’s five troubled banks

The banks are: Intercontinetal Bank; Oceanic Bank; Union Bank; Finbank and Afribank.
The Central Bank is considering three local options aimed at acquisitions of the five troubled banks following the seeming collapse of its offshore investment mission.

The three options which the apex bank is considering are:

Option 1: Rights Issue

In which the apex bank hopes to execute a rights issue, converting the tier two capital (the amount injected) to 80 per cent stake in the affected banks’ shareholding, leaving the other shareholders with 20 per cent.

Option 2: Scheme of Arrangement

The CBN management is said to be considering the alternative of getting the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange NSE, to do a “Scheme of Arrangement”. The thinking in the CBN is that this option is the most viable now and if applied, it will involve a legal means of bringing shareholders of these banks to an extra-ordinary General Meeting to agree to a merger or acquisition arrangement.

Option 3: Acquisition

If the first two options fail, the apex bank would then go for the third option which is acquisition.

This involves nominating a bank in the country to acquire any of the five banks and then backing the action with statutory powers.

Emerging markets giant Actis is adjusting to life after the closing of its $2.9bn third fund by building up its IR and communications teams.

The appointments follow the closing of Actis’ $2.9 billion Emerging Markets 3 Fund in December 2008 – its largest-ever vehicle. Actis has raised smaller real estate funds, including its first dedicated property vehicle for sub-Saharan Africa in 2006, which had more than $350 million of investment capital with leverage.

In this newly-created position, Turtle will manage a seven-strong IR team and report to Actis partner Jonathan Bond, who has been responsible for the firm’s fundraising efforts since before it demerged from CDC Group in 2004. His immediate focus will be communication with the 100 existing institutional investors in Actis’ latest vehicle.

Actis has also revamped its external communications function with the hire of Tashi Lassalle as director of communications. Lassalle, formerly chief marketing officer for listed recruitment company Heidrick & Struggles, has replaced Actis’ incumbent external public relations agency and is mandated to build a permanent communications team.

Breaking News: CBN Appoints new CEO’s for 5 banks, reveals N2.4trn debt

Source: Proshare Limited

The CBN, this morning, at the Emergency Bankers’ Committee convened by the CBN in Lagos confirmed the rumour that has been making the rounds all week that the CEO and Executive Directors of the following five banks have been removed:

1. Erastus Akingbola (Intercontinental Bank);
2. Okey Nwosu (Finbank);
3. Sebastian Adigwe (Afribank Plc);
4. Mrs Cecelia Ibru (Oceanic Bank Plc); and
5. Bartholomew Ebong (Union Bank Plc).

The CBN Governor, Lamido Sanusi explains that the result of the special examination done by the joint team from CBN and NDIC reveals excessive credit lending in the following banks – Oceanic Bank Plc, Intercontinental Bank Plc, Afribank Plc, FinBank plc, and Union Bank of Nigeria Plc.

The CBN Governor says that the CBN today injected N400bn tier 2 capital into the 5 banks. This is to be repaid soon from their offer proceeds.

The CBN Governor ANNOUNCES the following appointments:

1. Mr. John Aboh to take over as CEO of OCEANIC BANK Plc
2. Mr. Lai Alabi to take over as CEO at INTERCONTINENTAL BANK Plc
3. Mr. Arah NEBOLISA to take over as CEO at AFRIBANK Plc
4. Susan Iroche to take over as CEO at FINBANK Plc
5. Mrs. Funke Osibodu to take over as CEO at UNION BANK Plc

Lamido says there will be no setting up of an asset Management Company or bad loan bank until full declaration of exposures by all banks.

Breaking News....

BREAKING NEWS: Dangote is the NSE PRESIDENT. A formal announcement to follow by the DG and new President within the hour.

African Capital Alliance raises $200 million

African Capital Alliance (ACA) announces the first closing of USD 200 million for Capital Alliance Private Equity III (“CAPE III”), a private equity fund which seeks to tap high potential opportunities in sectors such as financial services, oil and gas, power (electricity) supply, communications, manufacturing and services in Nigeria and the West African sub-region. African Capital Alliance mobilizes long-term capital from institutional investors to promote private sector led investments.

The investors in CAPE III include well-known international development finance institutions such as CDC Group, the European Investment Bank, the International Finance Corporation, and Netherlands Development Finance Corporation. In addition, commitments have been made by Nigeria-based institutional investors including First Trustees Nigeria Plc, AIICO Insurance Plc, Africa Re-insurance Corporation and some high net worth individuals.

Breaking News

ALHAJI ALIKO DANGOTE stepped down from the Council of Nigerian Stock Exchange.

Further updates will be provided next week.

CDC Group commits $50m to African Capital Alliance’s PE Fund III (CAPE III)

CDC Group, the UK government-backed, emerging-markets fund of funds, has committed $50m to African Capital Alliance’s Private Equity Fund III (CAPE III) as part of its new focus on investing in the world’s poorest countries.

CAPE III targets to make minority and majority investments between $30m and $50m in mid-sized Nigerian companies with growth potential. About 25 per cent of investments will also be in other West African countries and the Gulf of Guinea region.

The fund will back companies that operate in industries which will benefit from regulatory changes in Nigeria, such as electric power. Around half of Nigeria’s population does not have access to electricity, but recent reform in the sector is said to be providing an opening for new entrants to the market.

Actis assembled new Africa team

UK emerging markets buyout firm Actis has beefed up its Africa operations with the recruitment of a West Africa head, a move that comes after its largest investor, the Government-owned CDC Group, was told to increase its investments on the continent.

IFC acquires Tunisian airport project stakes

The International Finance Corporation has acquired a 15 percent stake in airport concession company TAV Tunisia for €28 million. The company is currently involved in developing the first two airport PPPs in North Africa.

Equitable Equity

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Bernard Madoff has been jailed for the rest of his life...

International fraudster Bernard Madoff has been jailed for the rest of his life for swindling investors out of billions of dollars.

The 71-year-old was sentenced to 150 years after he, 10 of his victims and lawyers on both sides had addressed the court.

Dozens of those who lost fortunes in his pyramid-based Ponzi investment fraud that lasted decades filled the New York courthouse having spent hours queueing to get seats.

Madoff, a former Nasdaq chairman, pleaded guilty to securities fraud and other charges in March and has since been held in jail.

Victims who lost millions of dollars had described their ruined lives to judge Denny Chin.

Madoff, wearing a dark suit, white shirt and a tie, sat and listened as they described how he wrecked their financial security, and urged he be sent to prison for life.

"Life has been a living hell. It feels like the nightmare we can't wake from," said Carla Hirshhorn.

"He stole from the rich. He stole from the poor. He stole from the in between. He had no values," said Tom Fitzmaurice. "He cheated his victims out of their money so he and his wife Ruth could live a life of luxury beyond belief."

Dominic Ambrosino called it an "indescribably heinous crime" and urged a long prison sentence so "will know he is imprisoned in much the same way he imprisoned us and others." He added: "In a sense, I would like somebody in the court today to tell me how long is my sentence."

Madoff's lawyer had asked a judge to give his client 12 years behind bars. Prosecutors sought the maximum 150-year term.

Merger and Acquisition Interest on Nigerian Banks by Foreign Banks Likely to Happen

Plans by Nigeria’s central bank to lift the cap on foreign ownership of banks and to encourage mergers and acquisitions will spur interest in the banking system, UBA Capital Research said.

“Speculating on which individual banks could be targets for foreign banks is of limited value, but we do believe that it is likely that banks in the mid-tier segment will attract attention,” said UBA Capital, the brokerage unit of Lagos-based United Bank for Africa Plc. It reiterated its buy recommendations on Access Bank Nigeria Plc, Diamond Bank Plc, First City Monument Bank Plc and GTBank.

Central bank Governor Lamido Sanusi, in his first interview since his appointment on June 3, told the Financial Times of London that he expected a further consolidation in the Nigerian banking industry to bring down the number of banks to about 15 from 24.

The Private equity face of infrastructure

Adebayo Ogunlesi is the Chairman and Managing Director of Global Infrastructure Partners and is based in New York City.

Bayo previously served as Executive Vice Chairman and Chief Client Officer of Credit Suisse’s Investment Banking Division with senior responsibility for Credit Suisse’s corporate and sovereign investment banking clients. From 2002 to 2004, he was Head of Credit Suisse’s Global Investment Banking Department, responsible for worldwide capital markets (debt and equity), mergers and acquisitions, corporate finance and advisory, industry, country and regional banking businesses.

Bayo was previously Head of Global Power, Utilities and Project Finance in 1994, and from 1997-2002, served as Head of the Global Energy Group (power, utilities, oil and gas, chemicals, mining and project finance).
Prior to becoming an investment banker, he was an attorney with the New York law firm of Cravath, Swaine & Moore. From 1980 to 1981, he served as a Law Clerk to the Honorable Thurgood Marshall, Associate Justice of the United States Supreme Court.

Ogunlesi, more commonly known as Bayo, holds a record that many in the private equity world would envy: the largest first-time fundraise for an independent fund manager. Even more impressive is the fact that he raised GIP's $5.64 billion war chest with a focus on an emerging asset class that was just beginning to be understood by investors. People familar with the native Nigerian credit the suscess to his laser-eyed focus on bringing operational efficiences to infrastructure assets. He is by far the loudest propenent of his strategy - a mainstay of the private equity sphere that is fast becoming mainstream in the infrastructure asset class, thanks in large part to his advocacy. His lean mean management of London's City airport, which GIP bought in concert with AIG affiliate in 2006 for £770 million, is the textbook example of this growing trend.

Five ways to grow the market and create value

After years of restructuring, reengineering, and downsizing many companies are now emphasizing growth. They are under pressure to do so from three directions: shareholders, competitors, and employees.

Shareholders have become more active and demanding in the US, but increasingly so in Africa, Asia and Europe.

Consider the number of companies that have fired or gently pushed out their CEOs in recent years. Shareholders demand value creation. This is closely linked to corporate growth. The obvious limits of value creation through cost cutting now make revenue growth essential.

Then there is heat from competitors, particularly in industries such as banking, pharmaceuticals, automotive, defense, airlines, and personal computers, which are undergoing consolidation. Here growth is essential if economies of scale in technology development, operations, capacity utilization, marketing, distribution, and network externalities are to be captures. Those companies that fail to expand as fast as competitors will lose competitive and enter a downward spiral. The only options then are expansion or a vicious cycle leading to oblivion.

Finally, employees are an important influence. Employees in an expanding company have greater opportunities for career advancement, financial rewards, job security, and job satisfaction. It is more fun to go work every day and the collective mood is more upbeat in growing company.

While growth is important, it is ot easy. Asked about their target growth, companies in the US and Europe will respond that on average it is between 10 and 15 percent. As the overall economic growth rate of the countries in which they trade is about 2 to 3 percent, there is no way all of them can achieve their targets.

Put differently: add up the five-year projected market shares of all the competitors in an industry and you get a figure well over 100 percent. For every company that achieves its growth target, another will be well short. To count among the successful, a company needs a wise growth strategy. Developing this involves two major decisions: the direction and the mode of growth.

There are five possible growth directions:
- from current business by gaining market share and increasing market penetration;
- in the same business, but in a different geographic location;
- by vertical integration, either backward or forward;
- in another related business;
- in a different, unrelated business.

A company does not have to pick only one such direction. However, it is unlikely that simultaneous pursuit in all directions is wise. Instead, given limited resources, a company should determine the relative emphasis to place on each chosen growth direction.

The most promising growth directions in today's environment are: market penetration, globalization (particularly where emerging country markets are concerned), and forward integration.

Zain Africa Mobile Networks up for sale...

Vivendi Universal has emerged as one of the suitors for Zain’s operations in Africa. The deal would be worth an estimated Sh936 billion ($12 billion).

If Vivendi succeeds, it would mark an ironical return of the company to the Kenyan market, after selling its 60 per cent stake in KenCell — the predecessor of Zain Kenya — to Celtel in 2005, for $230 million. Celtel in turn sold the business to the Kuwait-based company, Zain, in August last year, as part of the larger Celtel Africa, which spans 12 African countries, for $3.4 billion.

South Africa’s MTN is said to be another contender.

Vivendi is one of the largest European entertainment companies. It has a 56 per cent stake in a French mobile network — SFR — that offers mobile services in Re-Union Islands and Morocco, and it is likely that this is the brand the African operation will don.

MTN has operations in much of the region, but Kenya has remained elusive for it. It unsuccessfully attempted to buy KenCell in 2004.

Zain has grown the Kenyan operation.

It has, for instance, built the 13 per cent market share it had at the time of the takeover, to over 20 per cent currently.

However, it sill remains a distant second to Safaricom with a market share of about 70 per cent.

For Sh930 billion, Zain could make a handsome profit for the company it bought for $3.4 billon.

Zain Group has posted record results for the financial year ended December 31, last year, with revenues increasing by 26 per cent to reach $7.441 billion, although fourth quarter results were hit by currency fluctuations, according to an unnamed company official.

Zain, which has operations in 22 countries across the Middle East and Africa, increased its customer base by 50 per cent to reach 63.5 million subscribers, while net profit increased by 6 per cent compared with 2007 to reach $1.2 billion.

Call for higher education support fund

Writer: Karen MacGregor
University World News

In Africa, Sixteen African ministers attending a preparatory meeting for the Unesco World Conference on Higher Education, to be held in Paris in July, called for improved financing of universities and a support fund to strengthen training and research in key areas. The ministers also want improved governance and quality assurance, and diversification of programmes to enable the sector to meet a wider range of needs, according to a conference statement circulated last week.

Africa's Regional Conference on Higher Education, or CRESA, was held in Dakar from 10 to 13 November last year and was organised by Unesco's Regional Office for Education in Africa, in partnership with the government of Senegal. The theme was "New Dynamics on Higher Education and Research: Strategies for change and development".

There were 241 participants from 27 African countries including two prime ministers, 16 higher education ministers, 23 heads of universities and a range of international organisations including Unesco, the African Union, EU, Association of African Universities, Association for the Development of Education in Africa and World Bank.

Following a meeting held during the CRESA conference, the 16 ministers called for more efficient policies to support national and international cooperation, to boost the revitalisation of higher education in Africa.

They urged governments and partners to increase spending on higher education, expand the involvement of women and prioritise science and technology for Africa's development. A Support Fund for Higher Education was proposed, to bolster efforts to expand and improve the sector and to develop training and research in key areas like science and technology.

The ministers said good governance in higher education should be strengthened to achieve greater autonomy, transparency and accountability in management. Diversification of training programmes was needed along with efficient quality assurance mechanisms that would provide a basis for harmonising qualifications.

South African Minister of Education Naledi Pandor called on African states to ensure the autonomy of higher education institutions so they could fully perform their role of creating and disseminating knowledge at the service of an African renaissance.

The aim of the Dakar regional conference was to bring higher education decision-makers, stakeholders and partners together to provide Africa with some shared higher education benchmarks and produce guidelines for the 2009 world conference. The meeting reviewed progress made in the past decade and formulated strategies for the future.

Chair of the CRESA organising committee, Professor Ahmadou Lamine Ndiaye, said considerable improvements had been made in higher education in several areas, including access, equity - especially greater involvement of women - and good governance.

The report said there had been more awareness of the role that should be played by knowledge as the driving force of development. It said the will to reform higher education systems to achieve improvements in relevance and in quality, particularly by establishing monitoring and evaluation, quality assurance and accreditation mechanisms was also more evident.

Efforts to diversify provision and structures as well as sources of financing and to improve links between higher education, the state and private sector had occurred while increasing stress had been placed on information and communication technologies. Sub-regional and regional networks had been created to strengthen inter-African cooperation, exchange of experiences and harmonisation of policies.

But the stock-taking also revealed numerous challenges, said the conference report. One was that access to higher education remained generally very low and Africa was far from achieving the critical mass of skilled people needed to secure its development. The higher education participation rate fluctuated around 5% to 7% and was aggravated by a fairly low success rate, particularly in the first cycle of most universities.

In many countries there was persistent mismatch between the content of training programmes and needs of the market - reflected by high rates of graduate unemployment in some key economic sectors that woefully lacked qualified personnel. An imbalance also existed between numbers of students in the arts and humanities and those in science, technology and vocational streams - especially among women.

Further challenges were lack of reliable statistical data to inform policy and building an African higher education community, as well as the need to construct coherent education systems from pre-school to higher education and the inclusion of private education sas a fully-fledged component with the same demands as public education.

The conference reached conclusions in a number of areas, including: access; relevance, efficiency and effectiveness; quality assurance; research and innovation; partnerships and cooperation; creation of an African Higher Education Area; and funding.

Africa needed to increase and broaden student access to higher education with financial support for students from poor and marginalised communities and greater representation of women across broad fields of study, participants at the conference decided.

There was a call for a diverse range of institutions such as research-intensive universities, undergraduate universities, polytechnics, teacher training colleges and rural institutions. Also, private sector participation and open and distance learning should be encouraged, "with appropriate quality assurance mechanisms in place".

In terms of relevance, efficiency and effectiveness, the conference concluded that institutions should be supported to serve the priorities and needs of Africa's development through socio-culturally relevant curricula. According to the conference report:

"Development plans should match graduate output with national human resource needs in order to minimise graduate unemployment." Further, there should be technical, vocational and entrepreneurship training to prepare graduates for the world of work.

African indigenous knowledge should be included in curricula and disseminated widely, and values of democracy, sustainable development, peace, conflict prevention and resolution as well as ethical values, behaviours and attitudes should be "inculcated in students and staff".

The conference called for governance and management of institutions to be strengthened in ways conducive to "greater autonomy, transparency and accountability", for ICTs and open and distance learning to be used more widely, and for credible information systems and statistical databases to enable evidence-based planning and decision-making.

The meeting concluded that sub-regional and regional quality assurance networks should be established "to promote cooperation among African experts and common frames of reference for standards-setting and monitoring", that regulatory mechanisms for cross-border provision should be developed, and that capacity to deliver quality assurance should be strengthened.

Institutional and human capacity to generate quality research should also be strengthened through funding, training and collaboration with well-established researchers in and outside Africa. Also, quality documentary resources should be established, research and development should be promoted and rewarded - especially that targeting Africa's development problems - and innovation incubators and science parks should be created.

The report stated, that north-south cooperation should be based on strong structures and sustainable frameworks, research-driven cooperation should tackle shared regional cross-border challenges, and cooperation and partnerships should be mutually beneficial and structured to discourage the brain drain while strengthening links with the African Diaspora.

The conference called for the creation of an African Higher Education Area and regional centres of excellence to facilitate the exchange of experiences and expertise, regional student and staff mobility, joint degrees and mutual recognition of qualifications. African language teaching should be strengthened "to promote communication and regional integration".

Finally, the report said there should be a national commitment to fund higher education adequately with African governments giving priority to the sector and allocating more resources to it, while cost-sharing or cost-recovery as well as the diversification of funding sources should be encouraged.

"An African Higher Education Trust Fund should be established to supplement the efforts of African governments and institutions to expand and strengthen higher education institutions."

The conclusions of the conference helped to define a vision for, and the role and challenges facing, higher education, said the report. They would enable higher education and states "to make choices, opt for orientations and design plans of action for the development of post-secondary education in Africa in the years ahead".

Nigerian economy best for investment in Africa

ABUJA—In spite of the hype on the effect of the global economic meltdown on the nation’s economy, the Minister of Works, Housing and Urban Development, Dr. Hassan Muhammad Lawal has said the country’s economy was strong and offered the best investment opportunity in Africa.

Dr. Lawal who stated this while welcoming the proposal by the Turkish Construction Giant TASYAPI Construction Undertaking to participate in the construction industry in Nigeria, said the fact the country is enjoying stable polity glitters its fortune as investment hobnob in the continent.

Led by the General Manager and member of the Board of TASYAPI Construction Undertaking, Mr. Goksel Bodur, the Minister assured the Turkish Firm that Nigerian economy was strong and the polity stable and offered the best investment opportunity in Africa.

He recalled that Nigeria and Turkey have a very cordial bilateral relationship and told the Turkish delegation that they had nothing to fear.

He said the coming of the Turkish company into the Nigerian construction industry would strengthen the existing cordial bilateral ties between Nigeria and Turkey.

He urged the company to comply with legal stipulations for business operations in Nigeria, and explore their areas of interest with relevant officials in the Ministry.

The Minister also called on them to participate in joint venture schemes with the Ministry to provide beautiful and affordable housing schemes for Nigerians, noting that the sector was very viable and lucrative.

He said the Federal Government will welcome the injection of international capital and investment in the housing sector to ease the problem of affordable and decent housing in the country.

Addressing the Minister earlier, leader of the Turkish delegation Mr. Goksel Bodur said they were the third largest construction company in Turkey and were currently involved in construction projects in Europe, Asia and the Middle East.


Written by Chris Ochayi
Tuesday, 03 March 2009