Nigeria Loses N156 Billion Annually to Foreign Software

The Institute of Software Practitioners of Nigeria (ISPON) has estimated that Nigeria is losing about N156 billion annually, due to heavy patronage of foreign software by Nigerians and multinational companies operating in Nigeria.

According to ISPON, the amount is spent to purchase and import foreign software, to the detriment of indigenous software that could do the same function.

The President of ISPON Mr. Chris Uwaje, blamed the loss on the inconsistent version upgrade of indigenous software, which he said, had over time, led to failed software products, project implementation and services.

He also blamed the unregulated state of foreign software products in Nigeria; non-existent national policy and legislation on software, slow implementation of e-government, e-education, tele-medicine and the non-protection of cyberspace for national security and survivability, as other factors militating against the growth of Information and Communications Technology (ICT) industry in the country.

The annual capital flight to software licensing, delivery services and technical support in the nation’s economy has been valued at N156 billion ($1 billion) annually by ISPON.

The Minister of Communications Technology, Mrs. Omobola Johnson, argued that for Nigeria, software strategies must not only be about improving productivity but helping promising software developers and software engineers to become entrepreneurs.

The minister said Nigeria’s software industry landscape needed two things – innovation process which will be tailored towards the process of creativity that will ultimately result in the successful development of software solutions and secondly, focus on companies not code and to keep tab to the fact that “brilliantly written lines of code must still be considered as building blocks for successful software companies.”



If You Like a Star Athlete, Now You Can Buy a Share

Peter Lattman and Steve Eder, write that first, there was old-fashioned gambling on football; then, the fantasy leagues. And now, thanks to Wall Street, fans can buy a stake in their favorite player.

On Thursday, a start-up company announced a new trading exchange for investors to buy and sell interests in professional athletes. Backed by executives from Silicon Valley, Wall Street and the sports world, the company plans to create stocks tied to an athlete’s financial performance.

After considering a number of possibilities for its inaugural initial public offering, the company found a charismatic candidate in Arian Foster, the Pro Bowl running back of the Houston Texans.

Investors in the deal will receive stocks linked to Mr. Foster’s future earnings, which includes the value of his playing contracts, corporate endorsements and appearance fees.

The company, Fantex Holdings, has grand ambitions beyond a Foster I.P.O. — it hopes to sign up more football players and other athletes, as well as celebrities like pop singers and Hollywood actors.

If such an investment sounds speculative, that is because it is. In a filing for the Foster deal with securities regulators, Fantex laid out 37 pages of risk factors, including a possible career-ending injury or a performance slump.

Risks aside, the offering is intended to capitalize on the mammoth popularity of the National Football League and fantasy football, where fans draft players and score points for touchdowns, yardage and other notable plays during the season.

If thousands of fans are willing to pay as much as $250 for an Arian Foster jersey, the thinking goes, why wouldn’t they pay up for a few shares of Arian Foster stock?

A market of star athletes calls to mind other unusual investments tied to entertainers. In the late 1990s, a financier created Bowie Bonds, a small bond issue that paid interest from the current and future revenue of 25 albums by the rock musician David Bowie.

The brokerage firm Cantor Fitzgerald runs the Hollywood Stock Exchange, a marketplace for bets on the fortunes of movies and their stars, but participants use only play money.

Fantex wants its venture to be anything but make-believe. Investors can now register with the company and place orders for the I.P.O. The company will market the I.P.O. in the coming weeks, offering 1.06 million shares at $10 a share, or $10.6 million worth of stock. If demand is insufficient, the company may cancel the deal.

Mr. Foster will receive a $10 million payment from Fantex upon consummation of the offering. (The balance of the I.P.O. covers the deal’s costs.) In exchange for the payment, Mr. Foster has promised to pay Fantex 20% of his future earnings.

The company is effectively financing the $10 million payment to Mr. Foster by raising money from retail investors in an I.P.O. In its filings, Fantex says it believes that the stock is intended to track the economic performance of Mr. Foster’s future brand income.

Still, shareholders will not have a direct investment in Mr. Foster or any control over his brand. The company did say it expected to pay a dividend to holders of the Foster stock.

Shares will trade exclusively on an exchange operated by Fantex. The tracking stock will increase in value if Mr. Foster raises his earnings potential with standout play or increased sponsorships.

Then, the investor can try to sell his shares at a higher price. Fantex will make a 1% commission from both the buyer and seller on the trades.

Buck French, the company’s co-founder and chief executive, demurred when asked to predict how the stock might behave in a secondary market.

“We don’t know how it will trade,” he said.

Mr. French made a fortune during the dot-com boom when, in 2000, he sold OnLink, a software company he founded, to Siebel Systems for about $600 million. One of his Fantex co-founders, David M. Beirne, was a general partner at Benchmark Capital, the venture capital firm that was one of eBay’s earliest investors.

Mr. French said Mr. Beirne conceived of the Fantex concept more than a decade ago when working on a sports-related venture with John Elway, the former Denver Broncos quarterback.

“Fantex represents a powerful new opportunity for professional athletes, and I wish it were available during my playing days,” Mr. Elway, a member of Fantex’s board, said in a statement.

Wall Street executives have also joined the company. Fantex’s president is John Rodin, co-president of the hedge fund Glenview Capital Management and a Goldman Sachs alumnus. Its chief technology officer is Joshua S. Levine, a former senior executive at E*Trade and Deutsche Bank.

A big question is whether other athletes are on the sidelines for a Fantex I.P.O. Mr. French declined to discuss future deals.

On one hand, athletes and their agents could view Fantex as a compelling proposition, providing athletes with a large upfront payment for giving up a certain percentage of their future earnings. Such a payment could act as a hedge against an unexpected downturn in a player’s career.

But advisers could counsel against trading a piece of their future earnings for a big lump sum, as some athletes are notorious for squandering money.

Other considerations are the specter of insider trading violations, and complying with the federal securities laws. Mr. Foster, his friends and his financial team will have to be especially circumspect when discussing issues that might affect his earnings.

A fifth-year veteran from the University of Tennessee, Mr. Foster, 27, has led all running backs in rushing touchdowns two of the last three seasons, while racking up well over 1,000 yards each year. In March 2012, Houston signed Mr. Foster to a contract worth up to $43.5 million over five years. He has a handful of endorsement contracts, including with Under Armour and Kroger Texas.

“We see Arian as a unique, multidimensional individual, a trailblazer,” said Mr. French, who added that Fantex cold-called Mr. Foster’s agent to pitch the idea.

Yet during the first six weeks of this season, Mr. Foster’s production has flagged. He has just one rushing touchdown. Heading into the year, there was concern over various injuries. Off the field, Foster admitted in a documentary released in September that he potentially violated  N.C.A.A rules by accepting money when he was a college player.

Those issues underscore the risk of betting on Mr. Foster’s brand, or that of any professional athletes, especially N.F.L. players. Unlike some other sports, N.F.L. contracts often are not fully guaranteed, meaning players are often cut and forced to find a new team, sometimes for a lesser contract.

For investors, the long-term outlook for a player will be difficult to handicap. If a player’s fortunes suffer and the tracking stock declines, there will be no rescue financing from a Private equity firm — or an investor like Warren E. Buffett — to stabilize the share price.

And unlike a stockholder of a public company, investors have no corporate governance rights.

There are no plans to hold annual meetings with the athlete, or quarterly conference calls.

Despite all the risks, some football fans seem poised to buy in. As one tweeted on Thursday after reading the news:  “Wow! This is awesome.”

Culled from the NYtimes Dealbook via

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Infrastructure to Boost Syndicated Loan in Africa

The increasing infrastructure boom in African countries will probably draw increased interest from investment banks and commercial lenders, underpinning growth in syndicated loans, the Loan Market Association (LMA) has said.

The annual amount of credit in Africa organised by groups of lenders grew to $17.7 billion last year from $11.2 billion in 2011, according to data compiled by Bloomberg. Syndicated loans totalled $19.6 billion year-to-date, the data showed.

African nations are spending $45 billion annually upgrading roads, ports, electricity plants and other infrastructure, according to the African Development Bank. The continent needs to spend $93 billion a year to accelerate economic growth, leaving a financing gap of about $50 billion, the Tunis-based lender said in May.

“There is a lot of requirement for infrastructure investment,” the Managing Director of the London-based LMA, Clare Dawson said in an interview in the Kenyan capital, Nairobi.

Dawson added: “Many international banks see that there are very good opportunities for investing particularly in infrastructure projects.”

Inadequate infrastructure reduces economic growth across the continent by at least 2% a year and lowers the productivity of companies by as much as 40% or $40 billion in lost output annually, according to the bank. International lenders’ interest in the continent is also being driven by a growing population and expanding consumer base, Dawson said.

African industries receiving the most funding include telecommunications and commodities such as cocoa, oil and gas, Dawson said. “Some of the African banks are also becoming more active on a regional basis rather than just in their own countries,” she said.

Almost all the Nigerian banks, the Ecobank Transnational Incorporated (ETI), Standard Bank Group Limited of South Africa and Union Gabonaise de Banque SA of Gabon are among African lenders that have participated in syndicated lending this year, according to Bloomberg data.

Over the next decade, seven out of the 10 fastest growing economies will be African nations, led by Ethiopia, Mozambique and Tanzania, with an average growth rate of 7% per annum, while the continent’s population is forecast to reach 1.4 billion by 2025, according to the LMA.

As African companies expand, their demand for syndicated loans is expected to increase as businesses seek larger amounts of capital that may not be provided by a single lender, Dawson stated. Pricing for loans is already declining as more lenders enter the market, according to the LMA.

The Dangote Group recently raised a $3.3 billion syndicated loan from nine Nigerian lenders and four international banks including Standard Bank, Rand Merchant Bank and Absa Group Limited.


Ecobank, seven others sign $7.5bn MoU with Total

Ecobank and seven other local banks have signed a Memorandum of Understanding with Total E&P Nigeria Limited and Total Upstream Nigeria Limited for a $7.5billion Nigerian Contractors’ Initiative.

The seven other banks are Zenith Bank, Diamond Bank, GT Bank, United Bank for Africa, Standard Chartered Bank, Access Bank and Fidelity Bank.

Under the arrangement, the accredited banks would finance Total’s local contractors and there would be domiciliation of payments to the banks.

The Managing Director/Chief Executive Officer, Total, Mr. Guy Maurice, said that the essence of the initiative was to bridge the funding gap among the company’s local contractors.

According to Maurice, the MOU provides for sustainable funding relationship between the selected banks and Total’s indigenous contractors, adding that, the initiative is in line with Nigeria’s Local Content laws.

The Managing Director, Ecobank Nigeria, Mr. Jibril Aku, explained that the programme was put together by Total to effectively manage its value chain, including suppliers and distributors.

According to him, the essence is to make the local contractors play a more active role in the oil and gas sector through sustainable funding.

Aku promised the bank would remain a major player and add value to the initiative.



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The President has approved the takeover of the management and control of the National Economic Reconstruction Fund by the Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation.

The Permanent Secretary, Ministry of Finance, Mr. Daniel Kifasi, who disclosed this in a statement, said the ministry had also appointed a new management team from the two organizations for the Fund.

The new management team is headed by Mr. Muhammad Kollere of the NDIC as Managing Director and Mr. Ihua Elenwor of the CBN as Executive Director (Operations).

The joint special examination team of the CBN and NDIC that examined the books and affairs of the Fund had in its report recommended the takeover by the two regulatory agencies.

According to the report, the capital invested in the Fund by the Ministry of Finance had been completely eroded with gross losses, which stood at N5.7billion.

The Fund, the report added, had not been able to service loans taken for on-lending from the African Development Bank, the Ministry of Finance and other sources.

The new team would oversee the affairs of the institution for an initial period of one year, it stated.

The team is mandated to, among other things, embark on an aggressive recovery of all outstanding loans, overhaul the Fund’s records, reconcile all accounts with correspondent banks and render quarterly reports to the board of the Fund, headed by the Permanent Secretary, Federal Ministry of Finance.

NERFUND is an intervention fund established by Decree No. 2 of 1989 to ensure the speedy rise of micro enterprises in the country through the provision of medium and long term loans.


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NSE indicts 92 companies for accounts audit default

A total of 92 companies fell short of the Nigerian Stock Exchange’s minimum listing standards between December 2012 and September 2013.

The companies operated below the listing standards of the NSE for failure to disclose their audited annual financial statements and interim quarterly accounts on time and for non-disclosure of information, according to the latest X-Compliance report published by the NSE.

The report, a transparency initiative of the NSE for maintaining market integrity and protecting the investors by providing compliance related information on all listed companies, showed, among other things, that 51 companies defaulted in filing their audited accounts.

A breakdown of the figure revealed that as of September 6, 2013, 41 companies had not rendered their audited financial statements for 2012.

Two more companies – G. Cappa Plc. and Jos International Breweries Plc. – did not render their audited accounts for three years.  While Jos International Breweries was indicted for the non-rendition of audited accounts for 2010, 2011 and 2012; G. Cappa Plc. defaulted for 2011, 2012 and 2013.

In addition to this, Afrik Pharmaceuticals Plc. and Nigerian Wire Cable Company Plc. had not filed their audited accounts for 2011 and 2012; Nigerian German Chemicals Plc. and Union Homes and Savings Plc. failed to render their audited accounts for 2012 and 2013.

Four other companies have defaulted due to regulatory issues. For instance, the NSE suspended the trading of Goldlink Insurance Plc.’s shares with effect from November 2, 2012 following the appointment of an interim management by the National Insurance Commission to oversee the affairs of the company.

According to the NSE, quoted companies are required to file their quarterly accounts within 45 days after the end of the quarter in accordance with Appendix 111 of the Listing Rules.

The X-Compliance report, however, showed that a total of 66 companies failed to file their interim quarterly accounts for the first quarter of 2013; 30 of them had also defaulted in rendering their audited accounts.

In the second quarter of 2013, 13 companies defaulted, according to the report, with five of them having defaulted in other areas.

Rokana Industries Plc. and West African Glass Industries Plc. reportedly defaulted in filing their audited accounts for 2012 and interim quarterly accounts for the first and second quarters of 2013.

The report also showed that as of September 6, 2013, Sterling Bank Plc., Union Bank Plc. and Dangote Cement Plc. were operating below listing standards for non-disclosure of information.

Dangote Cement and Union Bank were said to have violated guidelines for non-rendition of free-float compliance report, while Sterling Bank was listed for non-disclosure of material information to the regulator.

The NSE, which had initially fined Sterling Bank N1.323million for non-disclosure of bond issuance to the NSE, said in the report that the bank had yet to comply with the NSE directives, consequently, “the financial sanction will continue to run until the bank complies.”

Although many companies operated below listing standards in the period under review with some still doing so, the X-Compliance report showed that many other companies filed their audited accounts and interim quarterly accounts early.

For instance, the report showed that a total of 25 companies filed their interim accounts for the first quarter of 2013, while 49 quoted companies filed their interim accounts early for the second quarter of 2013.




Lagos set to turn vast trash into scarce power

Reuters reports that Nigeria’s megacity, Lagos, plans to turn its abundant trash deposit into electricity which the city desperately lacks.

The equation is simple. In one day Africa’s sprawling metropolis of up to 21 million people, according to official estimates, produces more than 10,000 metric tons (11,023 tons) of waste. In the same day it will get barely a few hours of power, forcing many inhabitants to rely on diesel generators.

Yet the methane from all that rotting waste is latent power.

“Energy is in demand, waste is a headache. If Lagos is able to convert its headache to feed that demand, then it’s becoming a smart city,” Ola Oresanya, managing director of the Lagos Waste Management Authority (LAWMA) told Reuters at the Olusosun dump site.

Oresanya aims to complete the project in around five years, by which time it will have a 25 megawatt (mw) capacity, he said. That is only 1% of the 2,000 – 3,000 mw that he estimates Lagosians demand, but it is a start.

A pilot project to get power using methane extracted from rotting fruit has helped clean up a local plantain market and enables traders to switch off their generators when it is on, manager Tolu Adeyo said, demonstrating its power by lighting up the gas coming out of a hose connected to the project tank.

The scheme, modelled on similar ones in Norway and Sweden, is part of broader efforts to clean up a city that had become known as the ‘garbage capital of the world.’

The Olusosun dump site, spread over 100 acres, rising up to 25 meters high, and, in some places, extending 35 meters under the ground, has created its own geography of jagged hills and gorges of plastic bags, old clothes and boxes.

“There was a time when Lagos was sinking under its waste. We moved the waste, but it is still just being buried. Now waste is an asset,” Oresanya said.

He declined to put a price tag on it, but said the project is solely funded by the Lagos state government.

There are other benefits too: methane is a greenhouse gas 25 times more potent than the carbon dioxide emitted by burning it.

The site is going to be buried in dirt and a green park with grass and trees built over it, Oresanya said. Pipes in the ground will harness the methane bubbling underneath for the power plant.

“By the time we’re done, you won’t see a single scavenger, because there won’t be anything to scavenge,” he said, walking along a graded road covering a 25 meter depth of trash.