EDITORIAL TEAM - Zenith Bank Plc...(ZEQ) magazine’ which was received by the Mission on the 19 th October 2012. We cong ra tula te the Zenith Bank Plc f or a successful production

EDITORIAL TEAM

MARCEL OKEKEEditor

EUNICE SAMPSONDeputy Editor

ELAINE DELANEYAssociate Editor

IBRAHIM ABUBAKARSUNDAY ENEBELI-UZOR

OLUWASEUN OLAOYEAnalysts

SYLVESTER UKUTROTIMI AROWOBUSOYE

Layout/Design

EDITORIAL BOARD OF ADVISERS

UDOM EMMANUELNONYE AYENI

GIDEON JARIKREMICHAEL OSILAMA OTU

ZENITH ECONOMIC QUARTERLYis published four times a year

by Zenith Bank Plc.

Printed by PLANET PRESS LTD.Tel 234-1-7731899, 4701279, 08024624306,

E-mail:[email protected]

The views and opinionsexpressed in this journal

do not necessarily reflectthose of the Bank.

All correspondence to:The Editor,

Zenith Economic Quarterly,Research & EIG,Zenith Bank Plc

7th Floor, Zenith HeightsPlot 87, Ajose Adeogun Street,

Victoria Island, Lagos.Tel. Nos.: 2781046-49, 2781064-65

Fax: 2703192.E-mail:[email protected],

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FROM THE MAIL BOXThis contains some of the aknowledgements/commendation letters from our teeming readersacross the globe.

PERISCOPEThis contains a panoramic analysis of majordevelopments in the economy during the periodunder review and the factors underpinning them.

POLICYA focus on the operational guidelines for the NigeriaIncentive-Based Risk Sharing System for Agricul-tural Lending (NIRSAL), a CBN-led initiative designedto enhance productivity and development in the ag-riculture sector.

GLOBAL WATCHA review of the topical issues that could shape thedirection of the global economy in 2013 and aglimpse into what the year holds for the leadingeconomies.

ISSUES IIn this piece, the analyst insists on the need for afull and complete deregulation of the downstreamsubsector of the Nigerian oil and gas industry andgives an insightful analysis of his reasons for thisposition.

ISSUES IIReviews the strengths and areas of concern inNigeria’s 2013 Appropriation Act and the factorsthat could work against and in favour of the economythis year and beyond.

ISSUES IIIThe story of Nigeria’s privatization journey; the chal-lenges faced; the milestones achieved; the currentstrategies and the outlook for tomorrow.

FOREIGN INSIGHTSAn in-depth analysis of the better-than-expectedperformance of the global capital market in 2012and the prospects and fears for 2013.

DISCOURSEA recap of the crisis that erupted in the Nigerianfinancial services sector in 2009 and the lessonsfor banks from the ugly experience.

FACTS & FIGURESThis contains economic, financial and businessindicators with annotations.

2 Zenith Economic Quarterly January 2013

T

Mruption, less red tape, and/or quicker delivery. This, some stillargue, is not to say that everything should be privatized because,according to them, market failures and natural monopolies couldbe problematic.

But while these contentions go on ad infinitum, various formsof privatization had been applied in virtually all economic juris-dictions across the globe as integral part of overall economicstructural adjustment. Nigeria is no exception in carrying outthis process of transferring ownership of business, enterprise,

agency, public service or public property from the public sectorto the private sector, either to a business that operates for aprofit or to a non-profit organization. Indeed, it has also en-tailed some outsourcing of services or functions to private firms.Privatization was indeed a key plank of the Structural Adjust-ment Programme (SAP) in Nigeria in 1986—and has passedthrough various phases to become part of the current transfor-mation agenda of the Federal Government.

In our analysis therefore, of this close-to-three-decades ef-fort, under the title, “Privatization in Nigeria: Cause to Cheer?”,the author posits that Nigeria like most countries has had itsshare of disappointing experience with privatization. All saidhowever, the author believes that the process calls for politicalwill, stressing that government should pursue ongoingprivatization “with renewed vigour to a logical conclusion forthe greater good of the economy.” Related to this treatise is alsoan analysis of the current Appropriation Act, under the title“Budget 2013: From Economic Slow Down to Positive Out-look”.

From Nigeria as a microcosm of the global economy, wemoved our gaze to the world scene, in an article, “Economies:What Issues and Trends in 2013?” where the author identifies

the lingering and stubbornly high unemployment rate in virtu-ally all regions of the globe as a major challenge. Other issueswould include the stagnation of economic growth in most de-veloped economies; mounting sovereign debts and fiscal defi-cits; the realities of shifting balance of economic power, amongothers. To the author, these issues bring to the fore the need tostrengthen global governance structures and tackle socio-eco-nomic challenges in the different regions as global rather thannational issues.

In another article related to this position, we analyzed theimpacts of the recent credit crunch on banks’ strategy and liquid-ity management. In it, we identified the causes of the 2008 glo-bal economic meltdown—the excesses and exuberance of bank-ers and financial ‘wizards’ that led to the ramifications of the

crises as well as the policiesand strategies adopted intackling the issues. In sum,the article warns that theimpulse towards risk-takingcan cause banks to disregarddanger signals and run withthe crowds and bet onbubbles, taking too manydebts in the process.

Our man in London, ina piece titled “A Year to Fear

for Equities?” examines the global financial and commoditymarkets and their outlook in 2013 and beyond. Observing thatthe diversity of analyst predictions mirrors the uncertainty in theglobal market, he asserts that until the global financial problemsare truly resolved, “we can expect several more years of uncer-tainty, which might only properly end towards the end of thecurrent decade or may be the early 2020s.”

Also herein for your delight is “Agenda for Transformation:Petroleum Subsidy (2)”, a continuation of a series on the sub-ject matter. Our Periscope section is a treatise on the economytagged “Economy: Rounding 2012 on Positive Fundamentals”;while the ‘Facts & Figures’ completes this package.

Enjoy your reading!

ost economists argue that private market fac-tors can more efficiently deliver many goods orservices than governments due to free marketcompetition. They premise this stand on thefact that over time it tends to lead to lowerprices, improved quality, more choices, less cor-


My name is Bayo Olomodosi, the CEO ofBabot Global Ventures (BGV) and we oper-ate a current account for our company withZenith Bank Plc.

A couple of days ago, I had the good for-tune of stepping into your branch on IsaacJohn Street, Ikeja G.R.A. and was given a copyof your Zenith Economic Quarterly (Vol 8No 4) to peruse while waiting for my transac-tion to be concluded. I must confess that Ifound the scope and level of research & eco-nomic analyses of various sectors of the Ni-gerian economy highly extensive, profound &impressive.

To this end, it is obvious that we at BGVwill find information in this publication veryuseful to engender the positive growth of ourbusiness and also stimulate our mental facul-ties into finding various ways of bringing aboutgood & positive service delivery to our clientsand customers alike.

Therefore, we will appreciate if we canbe included in your distribution list of thosethat will be sent this ZEQ whenever it is pub-lished subsequently. We will also appreciate ifyou could kindly send us older copies & vol-umes of this publication for our library.

Looking forward to a positive responsefrom you accordingly.Best RegardsFor: Babot Global VenturesBayo OlomodosiMD/CEO

I wish to request for inclusion in yourmailing list for your richly informative andwidely circulated journal. It would be of im-mense help to me in the discharge of my job. Iwould appreciate greatly if you would approvethis request. Thank you.Yours sincerely,Nnamdi OkosiemeDirector of Research and Documenta-tionOffice of the Senior Special Assistantto the President on Public AffairsPresidency, Asokoro, Abuja

We receive with gratitude the July, 2012edition of ZEQ with the caption “Agric Trans-formation: Tackling Nigeria’s Food Import De-pendency” which you donated to our library.

We sincerely appreciate your continuousdonation of this incisive publication to ourlibrary. We are grateful to you for identifyingwith our cause.Yours faithfully,EGHAREVBA, EfosaHead, Readers Service DepartmentFor: University LibrarianIgbinedion University, Okada, EdoState

I would like to acknowledge with pro-found appreciation and thanks, the receipt ofyour letter dated September 25, 2012 on theabove subject matter.

The Embassy of the Federal Republic ofNigeria will indeed find the publication veryuseful as reference material for policy deci-sion. Please accept the assurances of HisExcellency’s highest regards.Olumide Olowo,For: AmbassadorEmbassy of the Federal Republic ofNigeria Paris, France

This is to acknowledge, with deep appre-ciation, the receipt of complimentary copiesof your publications: Zenith Economic Quar-terly (ZEQ), Vol. 8 No.2 April 2012 , ZenithEconomic Quarterly (ZEQ), Vol. 8 No.3 July,2012. The publication will definitely serve asa good addition to our library collection andour clients will find them of immense value.Thank you for the kind gesture. Yours truly,Sunday Adenipekun,Head, FITC Research

I am directed to acknowledge receipt, withthanks, a complimentary copy of your ‘2012edition of the Zenith Economic Quarterly(ZEQ) magazine’ which was received by theMission on the 19th October 2012.

We congratulate the Zenith Bank Plc fora successful production. Please accept the as-surances and esteemed consideration of theHigh Commissioner.O. M. Agboola (Mr.)For (High Commissioner)High Commission of the Federal Repub-lic of Nigeria Accra, Ghana.

I am directed by the Director-General,ASCON to acknowledge the receipt of a copyof your “Zenith Economic Quarterly (ZEQ)”,July 2012 edition which specifically focuseson Agriculture Transformation.

I am to add that, the Director-Generalappreciates your kind gesture in this re-gard, as he promises tomake the most judicioususe of the Quarterly jour-nal. Please accept as al-ways, the Director-General’s highest regards.Thank you.Ahmed Ojeifofor: Director-GeneralThe AdministrativeStaff College of Nige-ria (ASCON)

On be-half of theVice-Chan-cellor, Caleb

University, Imota, Lagos; I write to acknowl-edge with profound gratitude the receipt of acomplimentary copy of the April 2012 edi-tion of the Zenith Economic Quarterly fo-cusing on “Cashless Economy: Imperatives forLegal and Regulatory Framework”.

I wish to assure you that the journal willbe processed and shelved appropriately to fa-cilitate easy retrieval for our lecturers and stu-dents usage. The journal will no doubts be ofgreat value, especially to the finance relatedcourses of our university. Once again, I sin-cerely thank you for this invaluable donation.Yours sincerelyDiyaolu, A.MFor: University LibrarianCaleb University, Lagos, Nigeria

I have been directed to acknowledge thereceipt of a copy of the July 2012 edition ofthe above journal sent to our organization.We want to affirm that the journal is usefuland educative to our organization and users.We hope to receive subsequent copies of thejournal as it is published.Thank you.Yours faithfully,B. R. Agbede (Mrs.)For: Institute LibrarianNigerian Institute of Social andEconomic Research, Ibadan, Nigeria

January 2013 Zenith Economic Quarterly 5

*By Marcel Okeke

Aper cent (as against the 2011 level of 7.45 per cent), anexternal reserves growth of 33.30 per cent, huge rally inthe capital market and largely stable exchange rate, theNigerian economy outperformed analysts’ forecasts in sev-eral ways in 2012. This is in spite of security challengesand the flooding disaster incertain parts of the countrythat disrupted production andmovement of goods and per-sons at some points in theyear.

The cheery turn of eventsin the economy, especially inthe second half 2012 wasdriven by such factors as fis-cal discipline on the part ofthe Federal Government, ris-ing foreign capital flows intothe country and reducedspeculative demand for dol-lars at the foreign exchangemarket, among others. Indeed, increased portfolio flowssince mid August 2012—

largely owing to Nigeria’s inclusion in the JP Morgan Bondindex—proved a decisive factor in driving supply at theinter-bank forex market in the rest of the year. This wasfurther helped by the announcement in November ofNigeria’s inclusion in the larger Barclays Emerging Mar-kets Local Currency Government Bond Index effectiveMarch 31, 2013. Also, a World Bank report tagged ‘SendMoney Africa’ shows that among all African countries,Nigeria got the largest remittance (US$21Billion) in 2012,out of the US$60 Billion in remittances to about 120 mil-lion recipients in the continent.

midst a slowly recovering global economy,Nigeria’s exhibited resilience and positiveoutlook, with most of the macroeconomicindicators tilting to an upside by the closeof 2012. With an estimated Gross Domes-tic Product (GDP) growth rate of 6.61

By Marcel Okeke

PERISCOPE


At the same time, the country’s ex-ternal reserves experienced a boost,hitting a robust multi-year high ofUS$44.18 billion at end-2012, an in-crease of about 34 per cent fromUS$32.90 billion as at the end of 2011.In deed, within the last quarter 2012alone, the reserves level rose fromUS$42.167 billion in October to thenew higher level at the close of theyear—a value enough to cover aboutone full year of imports. This phenom-enal increase in the level of foreignreserves was driven mainly by proceedsfrom crude oil and gas exports andcrude-oil related taxes. Also, there wasreduced funding of the wholesaleDutch Auction System (WDAS) owingto the huge inflow of foreign portfolioinvestments, which accounted forabout 77 per cent of total inflowsthrough the Central Bank of Nigeria.All these manifested in Naira appre-ciation at the official foreign exchangemarket during 2012; with the local cur-rency gaining almost 100kobo to closethe year at N155.77/US$1. This trendwas particularly aided by the reductionin demand from oil marketers as a re-sult of the investigation in the down-stream sector of the oil industry, fiscaldiscipline on the part of governmentas well as favourable balance of trade,among others.

While the nation’s remittance fig-ures (inflow) and external reserves wererising, its external merchandise tradewas also favourable. According to theNational Bureau of Statistics (NBS)data, total value of Nigeria’s externalmerchandise trade for the fourth quar-ter of 2012 stood at N7.19 trillion—an increase of N6.40 billion over thefigure in the previous quarter. In deed,there was an increase of 15.5 per centin the value of exports, from N19.44trillion in 2011 to N22.45 trillion in2012. The increase in the value of ex-ports, according to the NBS, contrib-uted immensely to the visible tradebalance of N16.82 trillion in 2012 asagainst N9.55 trillion in 2011.

Some key planks of the FederalGovernment’s Transformation Agendaalso impacted the economy during theperiod under review in diverse ways.Specifically, in the area of agriculture,

PERISCOPE | Economy: Rounding2012 on Positive Fundamentals


the Federal Government of Nigeria(FGN) came up with a number of taxand import duty waivers and importsubstitution measures in order to boostproductivity in the sector and developother agro-allied industries to improvethe value chain. These fiscal measuresare targeted at rice, sugar, cassava,wheat, cocoa, and fertilisers; just as theCBN and the Bank of Industry (BoI)are collaborating in the area of pro-viding intervention funds for the sec-tor at softer terms than obtainable inthe open market.

Government’s efforts to improvetransportation network across the

country (roads, rail, sea and airports)during 2012 have all began to subtlyimpact on wholesale and retail trade inNigeria. This is reflecting in the rela-tively easier, more convenient and af-fordable ways in the movement ofgoods and persons. The Lagos-Kanorailway line, for instance, has beenopened while the Port-Harcourt-Maiduguri line is receiving an urgentupgrade. Also, the Abuja mass transitrail line is under construction whileover 80 per cent of the Ajaokuta-Itakpe rail is already completed. TheLagos State Government is also work-ing to interconnect the state with lightrail system while work is ongoing toopen up Nigeria to neighbouring West

African countries through rail.Also, the ongoing power sector re-

form has led to some noticeable im-provement in power generation anddistribution. This, to some degree, isalready reflecting in the reducing costof doing business in the country. Simi-larly, the local content initiative of theFGN has begun to create investmentopportunities in the oil and gas sectorfor Nigerians. This will further improvewhen the Petroleum Industry Bill (PIB)now being debated at the NationalAssembly is passed into law.

On the other hand however thenation’s public debt kept rising all

through 2012, including the last quar-ter under review. In deed, data fromthe Debt Management Office (DMO)show that Nigeria’s total debt stock (ex-ternal and domestic debts) as at De-cember 31, 2012 stood at N7.55 tril-lion, indicating an increase of about16 per cent from the December 31,2011 figure of N6.51trillion. A break-down of the debt figure shows thatthe external component accounted forabout 13.44 per cent of the total debtstock (that is N1.02 trillion or US$6.52billion at exchange rate of N155.77/US$1); the domestic debt accountedfor 86.56 per cent of the total debt(that is N6.54billion). The total publicdebt stock of the country as at De-

cember 31, 2012 is thus estimated atabout 19.40 per cent of the GrossDomestic Product (GDP). This impliesthat the country still enjoys a wide fis-cal sustainability space, since this levelof debt-to-GDP ratio is far below the40 per cent threshold for countries onthe same pedestal with Nigeria.

Similar to the public debt stock, theinflation rate remained high at double-digit level all through 2012, contraryto the policy objective of the CBN andFGN budget target of 9.5 per cent.Available figures show that year-on-year inflation rate stood at 12 per centat year-end, from 11.3 per cent in Sep-



tember 2012. According to the Monetary Policy Commit-tee (MPC) of the CBN, on the average, inflationary pres-sure remained elevated in 2012. A number of factors ac-counted for this trend, including the impact of the flooddisaster in many agricultural belts of the country as well asthe partial fuel subsidy withdrawal early in the year.

Early in October 2012, President Goodluck Jonathanpresented a N4.92 trillion budget for 2013 to the NationalAssembly; this figure represented a five per cent increaseover the previous year’s level of N4.70 trillion. This “Bud-get of Fiscal Consolidation with Inclusive Growth” waspremised on an oil price benchmark of US$75 per bar-rel—an assumption that the legislators moved up to US$79in the course of deliberations on the budget. In deed legis-lative debates on the Appropriation Bill dragged into 2013,leading to delayed take-off of the budget. This scenario,no doubt, impacted on the economy in the quarter underreview—and continued into the first quarter 2013.

THE CAPITAL MARKETThe Nigerian Stock Exchange (NSE) remained bullish allthrough the second half of 2012, recording the strongestperformance since 2008, by the close of the year. In deedall equities market indicators consistently trended upwardsthroughout the period. Market data show that the All-ShareIndex (ASI) increased by 35.45 per cent from 20,730.63points to28,078.80 points between December 30, 2011and December 31, 2012. Market Capitalization (MC) also



increased, by 37.38 per cent, from N6.53 trillion to N8.97trillion during the same period. This cheery performancewas driven by a number of factors including the com-mencement of ‘Market Making’ in September 2012, re-turn of institutional investors to the market, the inclusionof Nigerian government bonds in the JP Morgan Govern-ment Bond Index-Emerging Markets (GBI-EM) as well asrenewed appetite for equities by local investors.

The total value of equities traded on the NSE in 2012stood at N658.22 billion (US$4.23 billion), representing anincrease of N23.30 billion or 3.67 per cent over the N634.92billion (US$4.18 billion) recorded at the end of 2011. Also,average daily value of equities stood at N2.65 billion in2012, representing an increase of 2.71per cent over the

N2.58 billion recorded in the preceding year. Further analysisof the market shows that the NSE recorded a local par-ticipation of 44 per cent in 2012, while foreign participa-tion accounted for 56 per cent of activities during theyear. Although the market did not record any Initial PublicOffering (IPO) in 2012, it had two new listings—but de-listed four companies. Three banks were also de-listed andre-listed in compliance with the holding company structureinitiative of the CBN.

In pursuit of its transformation initiatives, the NSEduring the period under review appointed an executive di-rector for its business development division as well as thehead for the legal and regulation division. The NSE alsokicked off a financial literacy programme –the investor

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age on the margin loan debt of 84 bro-kerage firms. Both measures have thepotentials to further drive activities inthe market in the short to mid term.

OIL & GAS, POWER &ELECTRICITYThe Nigerian National Petroleum Cor-poration (NNPC) reported output av-eraging only 2.19 million barrels perday (mbpd) in fourth quarter 2012,compared to an average of 2.39mbpdin same period in 2011. There was alsoa slight contraction in production ofboth crude oil and natural gas duringthe quarter, the fifth situation of ayear-on-year slowdown in the past sixquarters. This is attributable to slow-ing investment as operators await a newlegal framework and continuing van-dalism and sabotage on oil pipelinesand installations. It is likely howeverthat low investment will be addressedshortly, with the passage of the Petro-leum Industry Bill (PIB), which seeksto modernise and clarify operations inthe sector.

During the last quarter 2012, highersupply growth and concerns regardingthe health of the global economy leftoil prices on a steady decline, particu-larly since mid-September. This down-ward pressure persisted as mountingconcerns of a global economic slow-down, a pessimistic future demandoutlook and significant crude stockbuild-up in the United States out-weighed supply worries due to geopo-

litical factors. Particularly, the US presi-dential election, China’s leadership tran-sition, the Israeli general election andIran’s threat to stop all crude exportswere some of the factors that influ-enced oil prices during the review pe-riod. Thus, Organization of PetroleumExporting Countries (OPEC) Refer-ence Basket (ORB) dropped in Octo-ber for the first time since June, tostand at US$108.36 per barrel. Itslipped further in November, despitethe increase in global crude oil prices,dropping to US$106.86 per barrel. ForNigeria however, the level of oil pricesremained far above its 2012 budgetbenchmark of US$70 per barrel—leading to the ‘boost’ in external re-serves and Excess Crude Account(ECA) that prevailed for a better partof the year.

In the power sector, efforts atprivatizing the generation companies(Gencos) and the distribution compa-nies (Discos) dominated all activitiesin 2012 and particularly in the lastquarter. Specifically, on September 5,2012 President Goodluck Jonathaninaugurated the re-constituted Presiden-tial Action Committee on Power(PACP) which he chairs and the Presi-dential Task Force on Power (PTFP)charged with the responsibility of de-veloping, monitoring, facilitating andfast-tracking the power sector roadmapdelivery targets, among other things.Privatizing the successor-companies ofthe PHCN which commenced in 2010led to the short-listing of 207 inter-

During the lastquarter 2012, highersupply growth andconcerns regardingthe health of theglobal economy leftoil prices on asteady decline,particularly sincemid-September.

clinic aspect of this was delivered inpartnership with Morgan Stanley andRenaissance Capital. In the area ofmarket development, two fiscal policyinitiatives that took place during thelast quarter 2012 also impacted the ac-tivities on the bourse. The FGN an-nounced the elimination of value-added taxes (VAT) and stamp dutieson all stock market transactions, toprovide investors relief on transactioncosts. Also, the Federal Governmentannounced a N22.60 billion(US$145.39 million) debt relief pack-




ested parties from the Expression ofInterest (EOI) exercise. Fifteen pre-ferred bidders emerged from the longlist during the last quarter 2012.

On September 25, 2012, the Na-tional Council on Privatization (NCP)announced the winning bids for five(5) out of the six (6) Gencos unbundledfrom the Power Holding Company ofNigeria (PHCN). Other winning bidsfor the other Genco and Discos werealso announced during the year. Ac-cording to the Presidential Task Forceon Power (PTFP) these winning bid-ders altogether raised bank guaranteesworth US$335,854,986, which wasmade available to the Bureau for Pub-lic Enterprises (BPE).

The PTFP also reported that addi-tional power from the National Inte-grated Power Producers (NIPP) andother Independent Power Producers(IPP) were distributed to key urban andindustrial centres during the year. Gen-eration from most power stations, thePTFP said, was maintained in 2012 withsignificant capacity increases recordedfor Shiroro Hydro. Generation duringthe year achieved a new peak of4517.6MW on December 23, 2012,while a record average energy sent outof 4,028.85 MWh/h was attained onDecember 4, 2012.

This increased level, according tothe Task Force, was due mainly to im-provement in fuel, favourable waterconditions for the hydro power plantsand some completed evacuation gapclosure projects allowing some of thepower from newly-commissionedNIPPs - Omotosho (+450 MW),Olorunsogo (+112.5 MW), Sapele(+225 MW), Alaoji (+225 MW) - andIPPs (Rivers) to contribute to thepower grid.

BANKING AND FINANCEThe plethora of initiatives adopted bythe CBN to achieve a balanced growthand development of the economy(many through the Bankers’ Commit-tee) played out all through 2012. Someof these initiatives include: the Nige-rian Sustainable Banking Principles(NSBP); Financial Inclusion Strategy;the Intervention Funds, etc. TheSustainability principles entail manag-

ing environmental and social risks inbusiness decisions, safeguarding humanrights, promoting women’s economicempowerment, improving governance,transparency and accountability. It alsoinvolves managing bank’s own environ-mental and social footprint, support-ing capacity building in the financialsector and promoting collaborativepartnerships to accelerate sectorprogress, among others.

In pursuit of all these, the NSBPand sector-specific guidelines (agric, oil& gas, power) have been developed andadopted for implementation while asustainability committee is already setup in the CBN to provide oversightfor the industry’s implementation. Simi-larly, the CBN and the Bankers’ Com-mittee launched in October 2012, thenational financial inclusion strategyaimed at reducing the number of adultsexcluded from access to financial ser-vices from about 46 per cent in 2010

to about 20 per cent in 2020. In orderto achieve this target, the strategy fo-cuses on increasing access to/take upof – credit, payment, savings and prod-ucts etc - and channels (ATMs, POS’,retail agents, DMB branch networks,etc).

A pilot implementation phase ofthe financial inclusion initiative hascommenced in Borno State, where theBankers’ Committee, Federal Ministryof Technology and the State Govern-ment are already putting up structuresfor tracking the performance of theprogramme. The effort is intended tosignificantly improve the rate of em-ployment in the state and provide asustainable platform for achievinggreater security of lives and proper-ties in the entire state.

Under the women economic em-powerment initiative aimed at promot-ing women into leadership and deci-


sion making roles, the Bankers’ Committee declared 2012the year of ‘Women Economic Empowerment’. In thisregard, the apex bank in 2012 appointed Some qualifiedwomen into key positions, and a number of DMBs havesince followed suit.

The CBN and the deposit money banks pursued vigor-ously the first major policy in 2012: the Cashless Lagos.The policy aimed at moving away from cash-based economyto electronic payment system saw a massive promotion ofthe various e-payment channels such as the AutomatedTeller Machines (ATMs), Point of Sales (PoS) terminals,mobile banking technology and internet banking, amongothers. The licensing of seven mobile money operators bythe CBN in September provided a boost to the entireprogramme.

Under its economic development intervention efforts,the CBN in 2012 led a team to float NIRSAL Plc—a Ni-gerian focused start-up, non-bank agric financial servicescorporation to drive the market for agribusiness in thecountry. NIRSAL is Incentive-based Risk Sharing for Ag-riculture Lending. NIRSAL has already launched multiple“Financing Guidelines” to support banks’ capacity build-ing and lending; it has also commenced some pilot “valuechain fixing” initiatives. Examples include the Lagos N30

billion aquaculture project to capture about 25 per cent ofNigerian fresh fish consumption; the N48 billion tomatopaste production and processing domestication project, etc.

The apex bank also pursued with commitment, theimplementation of the new banking model, as well as theadoption of the International Financial Reporting Stan-dard (IFRS) by all DMBs. Thus, a number of banks dur-ing the period under review, engaged in their transitionefforts to holding companies or other variants. A numberof new banks were also putting finishing touches to theirefforts to commence business. They include SocieteGenerale Bank which was preparing to commence opera-tions as Heritage Bank; First Securities Discount Housewhich was transforming into a merchant bank; Rand Mer-chant Bank which opened shop in Lagos, etc.

Telecommunications and ICTDespite increasing complaints from the telecoms industryregulator (Nigerian Communications Commission) andmobile phone users over poor quality of service (QoS) byoperators, telephone subscriber base kept increasing allthrough 2012, and particularly during the last quarter. Thus,the total number of GSM lines rose from 112.66 millionin January to 135.25 million at end-December, 2012, ac-cording to NCC data. The CDMA segment moved from13 million to 14 million during the same period. In deed,total connected lines grew from 128 million to 151.7 mil-lion in the same period. Similarly, active lines went up from96.15 million to 113.20 million. These translated to theteledensity rising from 68.68 in January to 80.85 in De-cember 2012, a development that further underscoresNigeria as the fastest growing telecoms market in Africa.

The issue of number portability also remained on thefront burner in the last quarter 2012. Specifically, the NCCwhich commenced industry stakeholders’ consultations onthe matter in July 2012, appointed a consortium of threefirms to operate the mobile number portability (MNP);and by November 2012, the body was already integratingits data with the NCC data centre, where data on all regis-tered SIM cards had been captured and stored. The fulloperation of the MNP scheme is expected to commencein the first quarter of 2013. Also, in the exercise of itsregulatory powers, the NCC early in November banned allpromotions by Telecommunications Network Operatorsas well as lotteries being carried out on such networks.The ban also affected all proposed and approved promo-tions and lotteries on which the Commission had givenapproval further to the Memorandum of Understanding(MOU) entered into with the National Lottery RegulatoryCommission (NLRC).

Justifying the measure, the NCC said the promotionsand lotteries had increased the number of minutes avail-able to subscribers for use within a limited period of timethereby creating congestion in the networks as subscriberstry to use up the available minutes within the stipulatedtime. It added that on-net calls were being offered by Op-erators at tariffs well below the prevailing inter-connect


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rates thereby introducing anti-competitivepractices and behaviour. The NCC said thetermination of calls had also become diffi-cult from one network to another and over-all consumer experience on the networkshad become very poor thereby making itextremely difficult for subscribers to makecalls successfully.

Also in November 2012, the NCCmade it mandatory for all telecoms opera-tors to provide an instant SMS billing ser-vice to all their subscribers at the end ofeach call, as well as provide full cost detailsof every call and available balances. Themove is aimed at curbing complaints overbilling irregularities. The commencementdate for the service, free for all subscrib-ers in the country, was November 1. Anyoperator that fails to introduce the servicewould be fined N5 million as sanction andan additional N500,000 for every day thecontravention persists, according to theNCC.

In 2012, each of the operators madesome developmental strides, further posi-tioning themselves for competition in thealmost ‘saturating’ telecommunications mar-ket. In October 2012, Visafone signed an agreement withResearch In Motion (RIM) to launch BlackBerry serviceson its CDMA network. The agreement made Visafone thefirst service provider to introduce CDMA-enabledBlackBerry smartphones in the Middle East and Africaregion, according to the company’s Chairman, Jim Ovia.The range of devices available on the network will includeCurve 9310, Curve 9370 and Bold 9930, all of which willrun on the BB7.1 operating system and can serve as mo-bile hotspots. The Bold 9930 and Curve 9370 are NFC-enabled and allow users to share information, documentsand multimedia content by simply tapping their phonestogether. On its own part, Globacom in November 2012,began connecting new residential estates in Lagos and othercities to its fixed-line network. The operator is offeringvoice and high-speed internet services via its GloBroadaccess infrastructure. In December 2012, Airtel Ni-geria successfully completed its first 4G LTE trial, accord-ing to the company’s CEO, Rajan Swaroop. This is towardsthe commercial roll-out of the LTE technology.

MTN Business launched a pilot project for its cloudcomputing service in six countries in Africa, including Ni-geria, on December 6 2012. MTN launched the CloudService Brokerage (CSB) model, which centralises accessto various services in the cloud ecosystem with a broker,in this case MTN, acting as a single point of contact forcustomers by aggregating, integrating and implementingcloud services from multiple providers. The operator istargeting small and medium-scale enterprises (SMEs) forthe pilot which runs until the end of January 2013. Ac-

cording to MTN Nigeria, participating firms will gain ac-cess to centralised services on the platform, includingMicrosoft Office Desktop, Mozypro, Dialcom, McAfee,Averiware, Microsoft Sharepoint and Microsoft Dynam-ics CRM.

MainOne Cable Company, also during the period un-der review, announced that it had formed a business part-nership with Phase3 Telecom to increase penetration ofbroadband internet in Nigeria and West Africa by bringingaffordable services to the region. Under the partnership,the pair will offer Nigerians high capacity broadband ser-vices using Phase3 Telecom’s aerial fibre network and MainOne’s bandwidth deployed through its undersea cable. Thepartnership requires the integration of the pair’s networksand collaboration in provisioning and service delivery.(* Marcel Okeke is the Editor, Zenith EconomicQuarterly)

MainOne Cable Company, also during theperiod under review, announced that ithad formed a business partnership withPhase3 Telecom to increase penetrationof broadband internet in Nigeria andWest Africa by bringing affordable ser-vices to the region.



Polic

y

1. NIRSAL Background1.1. The Nigeria Incentive-Based Risk Sharing System forAgricultural Lending (NIRSAL) is an initiative of the Cen-tral Bank of Nigeria (CBN), the Bankers Committee (BC)and the Federal Ministry of Agriculture & Rural Develop-ment (FMA&RD). Important design and structuring inputwas also provided by numerous stakeholders includingfarmer groups, other Ministries, Departments and Agen-cies (MDAs), processors, civil society groups, and financialservices providers.

1.2. NIRSAL is currently a project implementation of-fice (PIO) within the Central Bank of Nigeria’s Develop-ment Finance Department (DFD). NIRSAL intends toevolve into aprivate non-bank financial institution (NBFI)once all appropriate authorizations, registrations and docu-mentation are concluded.

1.3. The mandate of NIRSAL shall be to act as thecustodian of all credit guarantee schemes, interest drawback schemes, and commercialization initiatives related toan integrated value chain approach to agriculture andagribusiness in Nigeria. Policy formulation responsibilitieswill remain with the appropriate line ministries.

1.4. In order to ensure responsiveness of its overallguidelines to evolving market conditions, NIRSAL will pe-riodically meet with key counterparties and stakeholders todiscuss technical issues related to the optimal functioningof the guidelines.

1.5. All rights and responsibilities associated withNIRSAL prior to the creation of the NBFI will be auto-matically transferred to the NBFI and its successor entitiesonce legally formed.


POLICY | NIGERIA INCENTIVE-BASED RISK SHARINGAGRICULTURAL LENDING (NIRSAL)

2. Definition: NIRSAL and De-Risking theAgriculture Value Chain2.1. NIRSAL is a Risk Sharing Fund (herein after, “Fund”)designed to identify, redefine, measure, re-price and evolvestrategies for the risks of lending to the Nigerian agricul-ture value chain.

2.2. The intention of the Fund is to create incentivesand catalyze processes to encourage the growth of formalcredit (direct and indirect) for the agriculture value chain,as a mechanism for driving wealth creation among valuechain participants. NIRSAL is also expected to be

a catalyst for innovative risk management strategies,long term financing for agribusiness, and significant jobcreation by new entrepreneurs and established market par-ticipants in the agribusiness sector and broader Nigerianeconomy.

2.3. An increase in formal credit inflows into agricul-ture will be achieved by improving the capacity of finan-cial intermediaries to provide credit, refocusing credit pro-visioning on integrated value chains, and establishment ofa differentiated guarantee mechanism to share credit re-lated risks in the value chain. The net goal is creating con-fidence for additional counterparty balance sheet risks inagriculture. The anticipated net impact of the NIRSALframework is to improve the pricing, management and un-derstanding of risk in formal lending to agriculture relatedenterprises by a wide range of financial intermediaries andinvestors.

2.4. CBN in 2011 required that all deposit money banksestablish independent agriculture desks/departments andskilled teams whose knowledge base and expertise will growover time, and therefore expand their capacity to respondto the evolving needs of the agribusiness economy.

2.5. From the effective date of the guidelines, non-deposit money bank credit providers, trade finance pro-vider, debt capital market operators and other credit pro-viders who are direct counterparties of NIRSAL will haveto comply with the agriculture desk requirement. We alsoexpect that deposit money banks will also comply with therelevant sections of the Prudential Guidelines related toagriculture e.g. Sections 9 and 12 as prescribed by the Cen-tral Bank of Nigeria.

3. The NIRSAL Risk Sharing Fund3.1. The NIRSAL Risk Fund (“Fund”) in FY 2012 is com-posed of two parts: (i) a 45 billion Credit Risk Guarantee(CRG) component covering losses on loans per contrac-tual specification, and (ii) a 5 billion Interest Draw Backprogram (IDP) providing interest payment support on loansissued under NIRSAL guidelines.

3.2. The initial 50 billion capital pool will be furtherexpanded subject to ongoing discussions within CBN, asCBN intends to transfer additional funds to NIRSAL byrolling into NIRSAL certain existing programs managed bythe CBN.

3.3. NIRSAL will also work with relevant Federal MDAs,

State Governments and 3rd party capital providers (do-mestic and foreign, government and private) who want toco-invest in the Fund.

3.4. The Fund shall be self-sustaining as a result ofbeing periodically topped up by the cash proceeds fromclient subscriptions to the risk guarantee product, prudentprovisioning for non-performing loans, earnings on theFund’s investments, and net credit risk outlays.

4. Broad Operating Principles of the Fund4.1. The Fund refers to the capital base of NIRSAL dedi-cated to providing credit risk guarantees associated withthe agribusiness value chain. NIRSAL does not place capi-tal or credit lines with banks or other institutions for on-ward lending to borrowers.

4.2. The Fund and its guidelines shall be operationalwith effect as from April 1, 2012

4.3. Only loans issued after the effective date ofNIRSAL’s CRG launch shall be covered by the Fund. Suchloans must be fully compliant with NIRSAL’s Credit RiskGuarantee (CRG) Guidelines. However, loans issued priorto the effective date of NIRSAL’s Guidelines launch shallon a case by case basis be allowed to purchase CRGs, onlyif the terms of such loans match the lending requirementsof NIRSAL’s Risk Sharing Fund.

4.4. The Fund’s financial year runs from January 1 toDecember 31.

4.5. Counterparties of the Fund are to lend to theagribusiness value chain using their own and/or invested,deposited and/or aggregated 3rd party assets in the caseof assets managers.

4.6. Such lending can be secured against loss by pur-chasing a “Credit Risk Guarantee” product (CRG) fromNIRSAL over the life of the underlying loan or credit con-tract.

4.7. NIRSAL at its sole discretion reserves the right tore-guarantee the original CRG with a 3rd party e.g. a guar-antee provider or a reinsurance corporation, local or for-eign. NIRSAL also at its sole discretion can securitize ele-ments of its CRG portfolio in order to create additionalliquidity. Nothing in such liquidity creation actions shouldbe construed as a negation of NIRSAL’s primary guaran-tee obligation to its counterparties.

4.8. Only purchase of a CRG qualifies an underlyingborrower to access the IDP. Nonetheless, counterpartiesare free to lend without an IDP or a CRG.

4.9. The credit provided by counterparties to the Fundshall be in the form of loans, and/or debt instrumentssuch as short term notes, medium term notes, and longterm notes. Parties are free to lend and invest such capitalin any agribusiness value chain as they see fit.

4.10. The Fund will not guarantee equity instrumentsand investments. However, in the case of convertible debt,the guarantee cover will cease as of the effective conver-sion date of the debt instrument into an equity instrument.


5. Financing ActivitiesCovered by NIRSALGuarantee

All activities within the agribusinessvalue chain are covered with no ex-ceptions subject to the additional re-quirements defined in this document.Should conflict arise in the course ofa transaction, the Guidelines as of thedate of the original transaction shallbe the governing authority.

5.1. For the purposes of the Fund,the agribusiness value chain isdefined as any economic/investmentactivity, the supporting equipment, andthe specialized technical capacity and/or personnel required to execute suchactivity in the agribusiness and relatedvalue chain as articulated below:

5.1.1. The borrowings of State,Federal and Local Government enti-ties if acting as project sponsor on anagribusiness value chain barrier re-moval project e.g. infrastructure withclear governance and segregated cashflows using mechanisms such as a Spe-cial Purpose Vehicle (SPV) with an in-dependent board of directors.

5.1.2. Preparing land for live-stock breeding or preparing land forplanting i.e. clearing, treating soil, test-ing soil quality, etc.

5.1.3. Preparing water bodiesand irrigation programs for use bythe agribusiness value chain e.g. reticu-lation and dam construction

5.1.4. Developing cluster enablinginfrastructure to reduce cost and im-prove efficiencies e.g. local road,bridge, dam, or power plants dedicatedto agribusiness activities, and relatednetworks

5.1.5. Procuring inputs such asanimal feed, veterinary products (e.g.vaccines, artificial insemination andgrowth enhancers), embedded genera-tion, agricultural machinery and equip-ment, seed (hybrid, genetically modi-fied and open pollinated varieties), fer-tilizer (organic and inorganic), micro-nutrients (organic and inorganic), cropprotection chemicals (organic and in-organic), and related material requiredto generate optimal crop and livestockyields

5.1.6. Raising livestock (includ-

ing aquaculture) from infancy toproduction, harvesting, and prepara-tion for sale independent of the enduse of such livestock

5.1.7. Planting the seeds (includ-ing for replication purposes if breederor foundation seed), nurturing theyoung crops, and managing the over-all process through actual crop

harvest (including plantation man-agement including protective chemicalspraying, land based, aerial or other-wise)

5.1.8. Harvesting (manual, me-chanical, automated and equipmentbased), onsite cleaning, processing andwaste disposal

5.1.9. Storage and post-harvesthandling providers (farm gate pick-upand storage services, grain elevatorasset owners and managers, warehouseasset owners and managers, warehousereceipt operators, cold storage assetowners and managers, and other re-lated storage options)

5.1.10. Transportation, logisticsand maintenance specific toagribusiness and agricultural productstransport (at least 40% of freight vol-ume in past 6 months if existing pro-vider) including trucking, railroad, airfreight, freight and logistics manage-ment providers; activities covered in-clude agricultural mechanization initia-tives, including agro-service centersconducting leasing, hiring, and repair/replacement services for equipment aswell as providers of aerial plant pro-tection sprays etc.

5.1.11. Processors including pri-mary, secondary and tertiary proces-sors of harvested products (crops, live-stock, aquaculture, etc)

5.1.12. Packaging companiesserving the food, beverage and indus-trial markets with direct supply chainlinks to specified local agribusiness andcrop value chains in Nigeria e.g. tomatopaste brand owners who purchase andpackage paste from Nigeria based pro-cessors of raw tomatoes into paste

5.1.13. Wholesale downstreamdistributors serving only export andthe following domestic end customermarkets: hospitality providers (e.g. ho-tels, school lunch programs, fast foodproviders), supermarkets, and other

large institutional buyers.Trading companies and traders

who import final processed productsfor domestic distribution are excludedfrom guarantee consideration.

5.1.14. Specialized service pro-viders such as companies and traininginstitutions (academic and professional)dedicated to agribusiness skill develop-ment, provision of extension servicesand demonstration of optimal practicesin the value chain

5.2. The detailed breakdown of thevalue chain is hereby classified for pur-poses of monitoring and evaluation,as well as broad risk management asfollows (see table):

The definition of the value chainis subject to periodic refinement byNIRSAL with input from the CBN, theFMA&RD, and other market partici-pants. The definition in force at thetime of the original transaction shallbe the governing authority throughoutthe life of the underlying loan.

6. Eligibility to UtilizeGuarantee Facilities toSecure Borrowing (Under-lying Borrowers and Obli-gors)

6.1. Eligible borrowers under theNIRSAL guidelines shall be:

6.1.1. Group 1: Smallholder Farm-ers, Cooperatives and Farmer Groups(Single or Mixed Cropping): Farmerswhose individual holdings do not ex-ceed one of the following as appropri-ate in each credit cycle:

6.1.1.1. Land holdings of 10 hect-ares of land or less

6.1.1.2. Cattle (5 bulls or cows witha maximum of 10 cattle), or 8 rams or8 goats or 10 pigs (irrespective of mixof boar and sows)

6.1.1.3. 200 birds or less birds(broiler or layer)

6.1.1.4. 1,000 fingerlings/juvenilesor less

6.1.1.5. Each small holder is re-quired to belong to a registered farmergroup that is autonomous from politi-cal groups such as a state, local or fed-eral government; such groups need notshow a long history of existence in or-

POLICY | NIGERIA INCENTIVE-BASED RISKSHARING AGRICULTURAL LENDING (NIRSAL)


der to qualify. While new farmer groupscan be formed for purposes of bor-rowing but each group must submit todue diligence terms as prescribed bythe guidelines and their lender.

6.1.2. Group 2: Medium SizedFarmers, Cooperatives and FarmerGroups (Single or Mixed Cropping):Farmers whose individual holdings donot exceed one of the following asappropriate in each credit cycle:

6.1.2.1. Land holdings between 10.1and 20.4 hectares of land;

6.1.2.2. Cattle (10 bulls or cows witha maximum of 20 cattle), or 20 rams

must submit to due diligence terms asprescribed by the guidelines and theirlender.

6.1.3. Group 3: Large Coopera-tives, Corporations and Farmers (Singleor Mixed Cropping): Farmers whoseindividual and/or commercial/corpo-rate holdings equal or exceeds one ofthe following as appropriate in eachcredit cycle:

6.1.3.1. Land holdings exceeding20.5 hectares

6.1.3.2. Cattle (80 or more bulls or50 cows (milking or otherwise), or 100rams or 100 goats or 100 pigs (irre-


or 20 goats or 30 pigs (irrespective ofmix of boar and sows)

6.1.2.3. Between 201 - 500 birds(broiler or layer)

6.1.2.4. Between 1,000 - 5,000 fin-gerlings/juveniles

6.1.2.5. Such farmers if applyingas an individual entity should be regis-tered; if part of a farmer group, sucha group must be a legally registeredfarmer group that is autonomous frompolitical groups such as a state, localor federal government.

New groups can be formed forpurposes of borrowing but each group


spective of mix of boar and sows)6.1.3.3. Over 501 birds (broiler or layer)6.1.3.4. Over 6,000 fingerlings/juveniles6.1.3.5. Such farmers if an individual entity is required

to be a legally registered corporation, as well submit to duediligence terms as prescribed by the guidelines and theirlender.

6.1.4. Group 4: Agribusiness: Corporations focused onprocessing agribusiness produce/feedstock, primary, sec-ondary or tertiary with a clear purchase agreement or

supply chain tied to domestic producers in Nigeria6.1.5. Group 5: Logistics Providers: Providers of sup-

porting transport and storage assets to the farming andagribusiness markets; category also includes wholesale dis-tributors of agribusiness produce including hospitals, su-permarkets, hotels and large end buyers

6.1.6. Group 6: Integrated Farms, Processors and Lo-gistics: Enterprises whose business activities have explicitcategory overflows across crop production, processing anddistribution e.g. road based transport providers.

6.1.7. Group 7: Agro-dealers, Input and EquipmentSuppliers: Enterprises whose business includes the manu-facture, supply and distribution of inputs (wholesale and/or retail) and agribusiness and food processing equipmente.g. rice mills; categories also includes general service pro-viders at agro-service centers, as well as providers of main-tenance services on a range of agribusiness equipment.Category also includes any ‘outsourcing’/contractual ser-vices such as plant nurseries, aviation air sprays, meteoro-logical forecasting, market information systems, fee forservice database providers, and data analytics providersdedicated to the agribusiness community.

6.2. Irrespective of the source of the credit and theintended use, in order to be eligible for CRG and/or IDPsupport under the Fund, a prospective obligor/beneficiary/borrower shall:

6.2.1. Certify that the loan meets the guidelines pub-lished by NIRSAL, and commit to responding promptly toany questions raised by NIRSAL

6.2.2. Provide any additional documentation as maybe required by NIRSAL to process the guarantee

6.2.3. Agree to random due diligence, audit and in-

spection of business or farm premises by NIRSAL and/or its appointed agents

6.2.4. Comply with the governance provisions of itsapplicable regulator e.g. filing of audited annual returns.For example:

6.2.4.1. Cooperatives: State and federal Cooperative Lawas applicable

6.2.4.2. Corporations: the Companies and Allied Mat-ters Act (CAMA) and Investment & Securities Act (ISA)as applicable

6.2.5. Comply with all applicable state and federal taxlaws e.g. tax identification number, and regulations, as wellas render regular returns to the appropriate authorities

6.2.6. Pay appropriate monthly premiums as spelt outin the guarantee agreement

6.2.7. Agree to comply with NIRSAL’s filing and moni-toring requirements including electronic submission, port-folio management and loan monitoring

6.2.8. Comply with other reasonable requirements asmay be published by NIRSAL periodically

7. Eligibility to Operate As a NIRSALCounterparty (i.e. Lenders and Issuers)7.1. Eligible counterparties for NIRSAL shall be the fol-lowing entities legally registered and authorized to operatein Nigeria:

7.1.1. deposit money banks;7.1.2. other specialized banks e.g. merchant banks7.1.3. debt capital market issuers/underwriters/invest-

ment banks/advisers;7.1.4. discount houses;7.1.5. development banks7.1.6. specialized trade finance providers;7.1.7. pooled asset managers/investment fund manag-

ers/private equity funds;7.1.8. aggregated credit providers; and7.1.9. related credit management parties e.g. industry

associations or large farmer cooperatives who issue me-dium and long term bond financing on behalf of bor-rower pools

7.1.10. commodity and marketing corporations with


Enterprises whose business includes the manufacture, supply and distribution of inputs (whole-

sale and/or retail) and agribusiness and food processing equipment e.g. rice mills; categories

also includes general service providers at agro-service centers, as well as providers of mainte-

nance services on a range of agribusiness equipment. Category also includes any ‘outsourcing’/

contractual services such as plant nurseries, aviation air sprays, meteorological forecasting,

market information systems, fee for service database providers, and data analytics providers

dedicated to the agribusiness community.

“ “


sufficient governance safeguards7.1.11. farmer aggregation platform managers and re-

lated service providers registered as corporations7.2. To be eligible as a counterparty to the Fund, a

prospective obligor/beneficiary/borrower shall:7.2.1. Enter into a Master Agreement with NIRSAL7.2.2. Conduct proper due diligence on all loans and

credits issued, and at NIRSAL’s request, make the pro-ceedings of such reviews available for analysis

7.2.3. Apply for the CRG and/or IDP on behalf ofclients on NIRSAL’s designated form.

7.2.4. Certify that the form of credit issued meets theguidelines published by NIRSAL, and commit to respond-ing promptly to any questions raised by NIRSAL

7.2.5. Provide any additional documentation as maybe required by NIRSAL to process the guarantee

7.2.6. Agree to random due diligence, audit and in-spection of loan book, assets (pledge or otherwise), busi-ness premises, and/or premises associated with underlyinglending or

underwriting by NIRSAL and/or its appointed agents7.2.7. Comply with the governance provisions of its

applicable regulator e.g. filing of audited annual returns:7.2.7.1. Cooperatives: State and federal Cooperative Law

as applicable7.2.7.2. Banks and other Corporations: existing CBN pru-

dential and reserve guidelines as well as related regulationsgoverning financial institutions, the Companies and AlliedMatters Act (CAMA), and the Investment and SecuritiesAct (ISA)

7.2.8. Comply with all applicable state and federal taxlaws e.g. tax identification number, and regulations, as wellas render regular returns to the appropriate authorities


7.2.9. Agree to comply with NIRSAL’s filing and moni-toring requirements including electronic submission, port-folio management and loan monitoring

7.2.10. Comply with other reasonable requirements asmay be published and amended by NIRSAL periodically

8. Modalities of the Fund8.1. Purchase of a CRG from NIRSAL requires the pay-ment of a guarantee fee of 3.0% per annum or 25 basispoints per month (0.25% per month) on the outstandingbalance of the guaranteed portion of the loan, creditline, bond issue or related instruments.

8.2. The guarantee fee covers the credit related risk ofdefault related to the principal loan and interest accrued.

8.3. The fee will be used to partially cover NIRSAL’soperational costs and be invested in a reserve treasury ac-count from which loan and credit losses will be paid, aswell as a portion of the IDP provided from.

8.4. At NIRSAL’s sole discretion, the guarantee feemay be subject to revision by NIRSAL based on the pro-jected and actual portfolio losses NIRSAL faces each fi-nancial year.

However, once a contract is signed the guarantee feefor that specific contract remains fixed for the duration ofthe specific contract.

8.5. Counterparties to the Fund’s guarantee and re-lated schemes are required to lend based on projectcash flows and the protective value of NIRSAL’s creditrisk guarantee since parties are made whole up to thelevel of coverage.

8.6. Be that as it may, notwithstanding the provisionsabove, at their discretion in order to improve initial creditrisk comfort, counterparties are also allowed to require

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that borrowers make equity and collateral contribu-tions as follows:

8.6.1. Collateral: Subject to the specific credit risk in-volved, multiple forms of collateral shall be accepted in-cluding credit bonds issued by insurance companies or re-lated parties, title to farm land, an off-taker’s surety orcredit collateral or guarantee, off-taker contract, and inno-vative contract specific collateral acceptable to all the par-ties in the transaction

8.6.2. Equity: Between 0% - 20% equity based on thesize of the credit, the transaction’s specific risk conditionsand the specific terms agreed between the parties. Equity

contributions exceeding 20% will be grounds for rejec-tion of the CRG application and sanctioning of thecounterparty by NIRSAL.

8.7. NIRSAL encourages large off-takers whose capac-ity to borrow at the lowest cost of capital and implied col-lateral/equity requirements to become the borrower insteadof small and medium sized farmers (SMF).

8.7.1. In such arrangements, the off-taker borrows cashbut distributes primarily inputs or intermediate materialsto farmers or contractors via its supplier network, and isrepaid with product at a negotiated price or cash.

8.7.2. SMFs are encouraged to join such off-taker ar-rangements while building their credit history. In such ar-rangements, off-takers are required to share individualfarmer repayment history with banks and credit bureaus inorder to support overall risk pricing transparency.

8.8. In the medium to long term, cash flows associatedwith off-taker arrangements i.e. buyer agreements be-tween parties in the supply chain, off-taker contracts, for-ward purchase contracts, and related documentation willbecome the basis for a significant portion of lending underNIRSAL’s risk umbrella.

8.8.1. We strongly encourage counterparties to developthe capacity to structure such contracts while NIRSALcontinues to work with other stakeholders to eliminate or

minimize factors that constrain the full migration tomarket based risk e.g. availability of warehouses, reductionin side-selling, quality of collateral and existence of cred-ible off-takers.

8.9. In return, counterparties can require as a condi-tion for lending that cash proceeds from the underlyingtransaction be escrowed at a bank of their choosing and aright of first refusal to the proceeds granted by the bor-rower in return for lending without, minimal or nontradi-tional collateral.

8.10. Parties to an off-taker and/or credit supply agree-ment are expected to agree up front based on the econom-ics of the underlying business what the project or venture’scosts and revenues are, and what portion of cash inflowswill accrue to the lender as repayment on the loan, bond orcredit.

8.11. Underlying borrowers are also encouraged to adopta business model with their suppliers and parties to an off-taker agreement that replicates the arrangements with the

credit providers, in return for forward input supplies

and periodic maintenance stipends where applicable e.g.payments to farmer groups in between nursery or plantingand harvest periods

8.12. In the absence of off-taker contracts, NIRSALencourages lenders to explore creative ways of financingincluding taking a pledge over stocks being financed buttemporarily stored in warehouses.

8.13. Loans, credit lines, bond issuances and relatednon-equity instruments provided by counterparties shall beutilized as seen fit by the lender and borrower. Proceeds ofloans guaranteed by NIRSAL counterparties however can-not be used for equity instrument purchases.

8.14. Interest on loans, credit lines, bond issuances andrelated instruments shall be competitive and market deter-mined. NIRSAL will not specify minimum and maximum

interest rates. The rates will be commercially determinedbased on existing MPR, and risk assessment of the trans-action. NIRSAL’s IDP will be applied after a commerciallysound transaction is structured in order not to interferewith the orderly evolution of agribusiness finance markets.

8.15. NIRSAL’s counterparties are encouraged to workwith credit distribution partners such as microfinance insti-tutions, trade credit providers, mobile banking providersand related institutions as part of mechanisms to improveretail distribution and financial inclusiveness especially inrural markets.

8.16. For institutions without a sufficient footprint inkey agribusiness breadbasket regions, NIRSAL recommendsidentifying reputable local entities to provide distribution

partnership as well as act as a source of new businessleads. NIRSAL’s Technical Assistance desk will provide train-ing support for such parties to ensure optimal functioningof such partnership arrangements.

8.17. Participants who choose to partially outsource partof their loan origination and distribution should ensure thattheir partners sign a service provider agreement which ex-tends the rights and responsibilities of the NIRSAL Mas-ter Agreement to such parties.

8.18. When appropriate, distribution companies are alsoencouraged to sign Master Agreements directly withNIRSAL, allowing them to benefit from the upside andincentives afforded such primary entities.

8.19. NIRSAL will directly provide technical assistance,capacity building, training material and in-person coursesto all credit providers on a range of issues e.g. cash flowbased lending, management of risk, agriculture value chainopportunities, etc. in order to broaden overall market knowl-edge and understanding of agriculture.

(Continued next edition)

ISSUED THIS 4TH DAY OF APRIL, 2012BY CENTRAL BANK OF NIGERIAABUJA HEADQUARTERS FOR ANDON BEHALF OF NIRSAL


… several unanticipated developmentswill surface in the global economy thisyear. But a great deal of the criticalissues will be mostly fallouts orcarryovers from the previous year(s).

The lingering, stubbornly high un-employment rate in virtually all regionsof the world would definitely be oneof them. And so would the near stag-nant economic growth in the most de-veloped economies. Other critical is-sues world leaders and other stakehold-ers would worry about include mount-ing sovereign debts and fiscal deficitsand the realities of the shifting balance

of economic power. For the low in-come economies of this world, the fall-outs of unequal distribution of wealth,including high rate of poverty, armedconflicts, and socio-economic and po-litical unrests would again be the issuesto ponder.

Ravaging unemployment… which way out?Perhaps one of the biggest headachesworld leaders will face in 2013 is thehigh rate of unemployment that hasso far defiled solutions. For the firsttime in a very long time, unemploy-ment has become not just a problemof low income countries, but of theentire global economy.

According to the InternationalLabour Organization (ILO), unemploy-ment increased by a whopping 4 mil-lion in 2012 driven by an unimpres-sive global growth performance. Themost developed economies, especiallyin Europe, added the greatest numberto the list of the unemployed. Amongthe world’s biggest economies, sevenout of the ten countries with the high-est unemployment rate are in the Eu-ropean Union. The pack is led byGreece with unemployment rate of26.8% as at October 2012; followedby Spain with 26.1% as at December.Portugal ended the year with 16.9%unemployment rate; Ireland with14.6% and France with 10.6%. Un-employment rate in the Euro area as

By EUNICE SAMPSON

fter an eventful 2012, theworld is set to face the re-alities that 2013 will bring.There is no doubt about itA

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estimated by Eurostat ended in 2012at 11.70%. Outside the Euro area,unemployment in the United Kingdomincreased to 7.80% in December 2012from 7.70% in the preceding month.

But the unemployment worry is notpeculiar to the European economies.Since the 2007/2008 economic crisis,the US alone has shed over 8 millionjobs. Five years on, not up to half ofthis number has been recovered. Theproblem is already generating new con-cerns as we enter another year. Accord-ing to the Bureau of Labor Statistics,US unemployment rate ended the firstmonth of January 2013 at 7.9%, upfrom 7.80% in December 2012. De-spite its own throng of economic woes,the age-ravaged Japanese economy re-

mains about the least perturbed by thegrowing unemployment among thedeveloped economies. As at Decem-ber 2012, Japan’s unemployment ratewas an enviable 4.20%.

Perhaps the biggest problem pre-sented by the unemployment crisis to-day is the unprecedented rate ofyouth joblessness. The ILO estimatesthat 73.8 million young people are un-employed worldwide and that the per-sisting global economic slowdownwould likely push more into unemploy-ment in the next couple of years. Theglobal youth unemployment rate,which rose to 12.6% in 2012, is ex-pected to increase further to 12.9%by 2017.

At 23.3%, again the Euro zone topsthe list of youth unemployment amongthe developed economies with Greeceand Spain holding the records of over50% unemployment rate among youngpeople who are willing and able towork. Youth unemployment currentlystands at 20.5% in Britain, accordingto the Office for National Statistics;and 17.1% in the United States, ac-cording to the Bureau of Labor Sta-tistics. The average youth unemploy-ment rate across the G20 economiesis 20.4%. Surprisingly, youth unemploy-ment more than doubles the general

rate of unemployment in all theseeconomies … a worrisome trend in-deed.

According to the latest ILO esti-mates (Global Employment Trend2013; January 22, 2013), there will be74.2 million unemployed youth aged15 to 24 in 2013, an increase of 3.8million since 2007.

Another interesting dimension totoday’s labour market is its growing glo-balization. Employers and employeesalike now have a greater space to pickfrom. But whether this developmenthas helped to increase job availabilityin some regions at the detriment ofothers is a contentious issue.

Perhaps an even more controver-sial trend in the global labour marketis the growing automation of workprocesses. Machines are gradually tak-ing over the role traditionally playedby human workers. It could be arguedthat instead of humans against hu-mans, the greatest competitors thatworkers and job seekers now face areman-made software running on man-made machines. The more corporationsgo ‘live’, the less human hands they re-cruit.

So, from 2013, what efforts willpolicy makers be making to reverse theravaging unemployment trend? Analysts

Perhaps an even more controversial trend inthe global labour market is the growing auto-mation of work processes. Machines aregradually taking over the role traditionallyplayed by human workers. It could be arguedthat instead of humans against humans, thegreatest competitors that workers and jobseekers now face are man-made softwarerunning on man-made machines. The morecorporations go ‘live’, the less human handsthey recruit.


GLOBAL WATCH | Economies:What Issues & Trends in 2013?

have different advice for world lead-ers, some of them contentious or ex-ample, some have called for govern-ments to close their labour market tothe forces of globalization during toughtimes, to ensure that the locals do nothave to contend with job seekers fromother parts of the world for the fewavailable vacancies. But is this a sus-tainable option?

Others have suggested the adop-tion of the Germany-styled confron-tation with youth unemployment wherefirms are given tax incentives as re-wards for providing useful training forthe youths and reducing their workinghours during economic crisis ratherthan outright lay off. This model seemsto have worked in Germany whereyouth unemployment is currently atabout 8%, compared to the averageof 23.3% in the Euro zone as at De-cember 2012.

For the umpteenth time, world lead-ers would again go back to the drawingboard in 2013 in an effort to addressthe menace of skyrocketing unemploy-ment. The ILO suggests policy consis-tency on the part of policymakers andan increase in disposable income toboost consumption and encourage in-creased output and therefore job cre-ation. It also advocates banking sec-tor reforms and enhanced credit flow,especially to the productive sector ofthe economies, and debt easing for themost indebted households and sover-eigns.

Stimulus rather than austerity eco-nomic measures have also been pro-posed as a way of boosting growth andeconomic activities. For the low in-come regions, economic diversificationwith emphasis on agriculture and otherhighly productive sectors would signifi-cantly address the ballooning unemploy-ment problem.

Very importantly, the ILO advo-cates strongly for deliberate measuresthat would stimulate a reversal of thealarming rate of youth unemploymentacross the globe, including enhancingthe employability of young peoplethrough practical education, retrainingand entrepreneurial skills development.It also calls for policy measures thatwould ensure that the young and inex-

perienced are not discriminated againstin the ever competitive labour market.

As the landmark 2015 timeframeset by the UN to halve global povertyrate draws near, perhaps one of thebiggest handicaps to the realization ofthis goal is the growing rate of unem-ployment in all regions of the world.But experts are more optimistic aboutthe outlook for 2013, at least for someregions. Regions with a blossomingmiddle class population, strong GDPgrowth and robust investments in in-frastructure development would beable to recoup some of their lost jobsfrom 2013.

However, this optimism seemsmore likely in the developing regions.Current realities in the developed

world indicate that significant job re-coveries might not be achieved in thevery short term. Globally, the labourmarket outlook remains gloomy. TheILO expects a further rise in the num-ber of unemployed worldwide by anestimated 5.1 million in 2013 and an-other 3 million in 2014, taking thepopulation of the globally unemployedto more than 205 million that year.

Growth … now too slow!The sorry unemployment situation inmajor EU economies in 2012 does notcome as a surprise. Virtually all thecountries in that bloc either declinedor grew below 1% last year. Greecefor example contracted -6.9% in 2012;Italy by an estimated -2.0%; Portugal



by -0.9%; Spain, by -0.7%and Ireland, -0.2%. Francemanaged a 0.1% growthwhile Germany also grew by0.7%. After a surprise 0.9%growth in the third quarter of2012 boosted by the Sum-mer Olympic Games, the UKeconomy shrunk by -0.3% inthe last quarter of 2012 andended the year at around1.0% growth.

The world’s third largesteconomy, Japan fared evenworse with an estimated -0.4% contraction at year end2012. Among the world’s top5 economies (excludingChina), the US in 2012 wasthe top performer with aGDP advancement of 2.2%,a major improvement on its1.8% growth the previousyear.

The buoyant BRICeconomies did not achievetheir traditional growth paceeither. After a disappointing0.6% growth in the third

quarter of 2012, Brazilexpectedly achieved about1.0% growth in 2012. Rus-sia fared relatively better atan estimated 3.5% growthbut a limp performance com-pared to the over 4.0% re-corded in 2011. From 8.4%growth in 2010, 6.5% in2011, and an estimated near6% in 2012, India is forecastto advance by slightly over5% this year, an unimpres-sive performance by one ofworld’s fastest growingeconomies. Its forecast 2013growth would be India’s worstperformance in a decade.

China snapped out ofseven consecutive quarterlydrops in growth to record anencouraging 7.8% in thefourth quarter of 2012, farbeyond the expectations ofmany. But the 7.7% growthestimated for year end 2012is its slowest growth in overa decade and a far cry fromthe 2010 growth of 10.4%

and 2011’s 9.2%.The outlook for the BRIC

economies this year is how-ever mixed. While China ismostly expected to build onits fourth quarter 2012 im-provement to achieve a bet-ter growth in 2013, others likeBrazil and India are morelikely to experience slowergrowth. Russia on the otherhand, is forecast to sustain themoderate growth it recordedlast year. The World Bank ex-pects the Russian economy toadvance by 3.6% in 2013,3.9% in 2014 and 3.8% in2015.

Africa continues toweather the global economicstorm relatively well. After a4.9% growth in 2011, SubSaharan Africa sustained itsnow traditional near 5.0%annual advancement with anestimated 4.8% growth in2012. But the continent is notimmune to the crisis in theEuro zone and the worrisome

After a surprise 0.9% growth in the third quarter of2012 boosted by the Summer Olympic Games, theUK economy shrunk by -0.3% in the last quarter of2012 and ended the year at around 1.0% growth.

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“As the landmark2015 timeframeset by the UN tohalve globalpoverty ratedraws near,perhaps one ofthe biggesthandicaps to therealization of thisgoal is the grow-ing rate of unem-ployment in allregions of theworld. But ex-perts are moreoptimistic aboutthe outlook for2013, at least forsome regions.”



economic slowdown inChina, a growing economically. The continent’s five big-gest economies, (South Af-rica, Egypt, Nigeria, Algeriaand Morocco, in that order)witnessed mixed perfor-mance last year. South Africafor example was buoyeddown by weaknesses in theglobal economy and its ownstructural weaknesses, lead-ing to growth decelerationbelow 3.0% in 2012 after a3.1% growth in 2011. How-ever, outlook for 2013 seemsbrighter as several analystsproject up to 3.6% growththis year based on optimismabout global economic re-covery and a resolution ofthe Euro zone crisis.

Africa’s second biggesteconomy, Egypt was in 2012weighed down by its internalsocio-political unrests whichwere mostly fallouts of theArab Spring and the effectsof the global economic slow-down. A slow growth of1.5% was achieved in 2012with experts on that economyexpecting a rebound ofabove 3.0% this year. Nige-ria, one of the continent’sfastest growing economiesand its third largest also ex-perienced some growth de-celeration in 2012. Its esti-mated 6.6% growth last yearwas the slowest in three years,after recording 7.0% in 2009,7.8% in 2010 and 7.4% in2011. But its outlook for2013 remains bright.

The World Bank esti-mates that the globaleconomy advanced by 2.3%in 2012. By and large, theworld economy is expected tofare fairly better in growthprogression this year. But thepre-crisis average growthpace of around 5% wouldstill take some time to accom-plish. The World Bank putsglobal growth prospect at

2.4% in 2013, 3.1% in 2014and 3.3% in 2015. For econo-mies that have failed to im-prove, some stimulus mightbe in the offing again thisyear, while some, as we sawin 2012, would toe the pathof stringent economic mea-sures.

The struggle to reversethe trend of contractinggrowth in most of Europe,America, Asia and other partsof the world will no doubtoccupy the front burner ofglobal issues in 2013.

Debts, debts andmore debts!Demand and consumptionare slowing, the productivesectors are not producing atfull capacity, export earningsare dwindling and so is GDPgrowth. Not surprisingly, inseveral key economies, gov-ernments’ expenditures nowfar exceed the revenue gen-erated. The outcome ismounting fiscal deficits andof course, debts.Government’s deficit – thegap between how much

money it earns and howmuch it spends – has becomea major economic and politi-cal issue in most countries.

Mounting national debtand record fiscal and tradedeficits were a major head-ache for world leaders in2012. Unfortunately, theproblem, which does not havea quick fix solution, has beencarried over into 2013. Cur-rently, US public debt as per-centage of GDP is 74.5%;in Japan, it is 198%; Italy,119%; UK, 91.4%; Spain,74%; Germany, 95%;


Greece, 196%; France, 87%;Ireland,175% and Portugal,110%. Among the world’slargest economies, the leastindebted is Russia with pub-lic debt at about 10.3% ofGDP, followed by China with16%.

The U.S. government rana $1.089 trillion budget defi-cit in the fiscal year thatended September 30, 2012,about 7.0% of the country’s2012 GDP. Though an im-provement on the 2011 defi-cit of $1.297 trillion, or 8.7%of GDP and the deficit peak

of $1.413 trillion (10.1% ofGDP) in 2009, yet the fig-ures remain too high for com-

fort. In 2013, the UnitedStates government will con-tinue with the frustrating poli-

tics of tax negotiations andspending cuts to reign in es-calating debts and deficits.

The US situation reflectsthe realities in most advancedeconomies right now. Oper-ating at a current budget defi-cit of about 10% of GDP,Japan, the UK, the Euro zoneand some developing econo-mies are faced with tough fis-cal challenges. Brazil posteda trade deficit of $4.035 bil-lion this January, its biggestdeficit on record. The gapwas wider than the $1.3 bil-lion deficit in January of2012 and is an early indica-tion that the ghost from thepreceding year is yet to beput to rest.

Poverty and armedconflicts … ‘whobells the cat?’Poverty in the least devel-oped economies of the worldshould be a major cause forconcern for world leaders.The extent of globalizationthe world now enjoys goesbeyond technological diffu-sion and a common marketor information space. It alsoentails an easy proliferationof violence and armed con-flicts, by whatever specificnames they are called. Thereare more than enough empiri-cal evidence to buttress thepoint that poverty and hun-ger breed socio-political dis-content and uprising – andthese are not without their farreaching global consequences.The fact that world leadershave so far failed to makeany headway in significantlyreducing global poverty, de-spite all existing theories andprinciples on the issue, isenough reason to place it atthe fore front of issues totackle in 2013, especially asthe UN Millennium Devel-opment Goals set timeframe




is barely two years away.Beyond the usual lip ser-

vice to reducing poverty inthe low income regions is theneed to obliterate those fun-damental practices that per-sistently broaden the gap be-tween the rich and the poor,whether at the individual orsovereigns levels. Chief ofthese are the imperialisticweapon called foreign debtand global capitalists practicesthat undermine the progressof low income economiesand keep them perpetuallyunderdeveloped and theirnatural resources unfairlyexploited. On the domesticfront, corrupt self-enrich-ment among the politicalleadership and reckless fiscaland monetary policies areretrogressive syndromes inlow income regions that mustbe checked.

So, while the cyclical pre-occupation with resolvingeconomically induced socialunrests continues way into2013, whether any progresswill be made on the issue ornot will depend on the politi-cal will of national and glo-bal leaders to effect sustain-able changes.

Shifting balance ofpower … is theworld ready?The rising influence ofemerging economies, espe-cially the BRIC countries willoccupy a topical place in theprivate discourse of worldleaders this year. The worldeconomy is evolving at a his-toric pace, throwing up newissues and shifting the balanceof economic power graduallyin favour of the hitherto eco-nomic underdogs. Accordingto OECD estimates, Chinawill overtake the UnitedStates to become the world’sbiggest economy by 2016 …

barely three years from now.At the continental level,

the UK is expected to over-take Germany in the early2020s, to become the biggesteconomy in Europe. In Af-rica, Nigeria is forecast toovertake South Africa by2017 to become the biggesteconomic power in the con-tinent. In Asia, China at theend of 2010 leapfrogged Ja-pan to become the largesteconomy in Asia and the sec-ond largest in the world inGDP, PPP terms.

But what would be theimplication of these powershifts, especially among theG20 economies? And howwould these changes impactthe world, going forward?

With the changing economicparadigm, will the world seemore structured central gov-ernance in the years ahead?

For a world that nowseems to be evolving andchanging at the speed of light-ening, leadership, whether atthe national or global level willget ever more challenging anddemanding. Is China or theother fast emerging econo-mies ready for these seem-ingly swift changes and theleadership challenges theypose? Clear cut answers arenot readily available to thesedisturbing questions … agood reason why the certainshift in economic powershould be of grave concernto all.

US: from a ‘fiscalcliff’ to a sequester?Series of tax cuts introducedduring the George Bush (Jr.)administration were sched-uled to expire on December31, 2012 compelling the in-troduction of increases inincome tax, estate and capi-tal gains taxes, among others.In addition, automatic spend-ing cuts legislated by the Bud-get Control Act of 2011 willalso become effective onJanuary 2, 2013. This legisla-tion mandates the US gov-ernment to cut public spend-ing (defense and non-de-fense) by about $109 billionannually between 2013 and2021 in an effort to curbmounting debt and fiscal defi-

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cit. The expected negative fallouts ofthese stringent fiscal measures effec-tive 2013 is what have been describedas the ‘fiscal cliff ’.

A last minute deal was struck be-tween the US Presidency and Congresson January 1, 2013 to ‘temporarily’avert the ‘cliff ’. But this move hadfailed to avert what has become thenew buzzword in the global media thisfirst quarter 2013 - the ‘sequester’. Se-questration has been used to describethe automatic era of public spendingcuts (totaling $1.2 trillion over a ten-year period) that the US economy en-tered into from March 1, 2013. Thisfollowed the failure of the Presidencyand Congress to agree on ways to cir-cumvent the Budget Control Act of2011 which legislated it.

While President Barack Obamaagrees on the need for limited spend-

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EDITORIAL TEAM - Zenith Bank Plc...(ZEQ) magazine’ which was received by the Mission on the 19 th October 2012. We cong ra tula te the Zenith Bank Plc f or a successful production