Nigeria Reforms Boost Oil Output, Economy

Seven years after
returning to civil-
ian rule, Nigeria
has left behind its reputation as a
pariahstateandmadehugestrides
in rebuilding its standing among
the community of nations.
Its enormous oil resources
make the West African state a
significant player on the inter-
national scene, and—as the fifth
largest source of U.S. oil im-
ports—its general election re-
sults in 2007 will be of close in-
terest to Washington.
Having replaced military dic-
tatorship with elected govern-
ment, Nigeria is an important
symbol of African democracy,
and has also made key contri-
butionstothepreservationofre-
gional stability. A country with
undoubtedly huge potential, but
also major problems stemming
from its recent past, it has been
undergoing a process of trans-
formationunderPresidentOluse-
gun Obasanjo, now in his final
term of office.
The Obasanjo administration
has had to battle against a legacy
of environmental damage, eco-
nomicinjustice,andcorruptionas
ithasworkedtoimprovethelives
of a rapidly rising population of
130 million—most of whom live
on less than a dollar a day.
ImprovingNigeria’simagehas
been, and remains, a priority—
notleastinordertoattractthefor-
eign investment needed to de-
velop the economy. Under the
watchful eye of the IMF, Presi-
dent Obasanjo has introduced
economic reforms, and his ef-
forts to impress international
donorspaidoffin2005whenthe
ParisClubofcreditornationsap-
provedadealtoeliminate$30bil-
lion worth of Nigeria’s total $37
billion external debt.
Releasing the country from
suchaheavyburdenisoneofthe
administration’sgreatestachieve-
ments, improving Nigeria’s in-
ternational standing and credit-
worthiness,andfreeingfundsfor
This supplement to USA TODAY was produced by United World LTD.: 4410 Massachusetts Ave NW, Washington - DC 20016 - Tel: 1-202.347.9022 - Fax: 1-202.347.9025 - www.unitedworld-usa.com
THURSDAY, FEBRUARY 1, 2007
A world-class
business and
tourism resort is
taking shape in
Cross River State
Leisure Page 2
Nigeria’s banking
sector has benefited
from years of reform,
and is now ready for
the world stage
Finance Page6
On the way to
becoming
the largest
mobile telephony
market in Africa
Telecom Page 4
The oil-rich West
Africanstateisimprov-
ingitsinternationalrep-
utation through reform
and a campaign pro-
moting national pride
Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content
A more extensive version
of this report is
available at
www.unitedworld-usa.com
UNITED WORLD
TEAM, NIGERIA
Project Director:
Oliver Harold-Harrison
Promotional Directors:
Marta Mendonça
Valentine Charles
Maria Mathews
increasedspendingonpovertyre-
duction.
Akeyelementinthecampaign
to build a new image for Nige-
ria is the government’s Heart of
Africa project, which aims to
change not only the way the
country is perceived interna-
tionally, but also how Nigerians
see themselves.
“With the many socio-eco-
nomic reforms that have been
implemented, we needed a pro-
gramtotelltheworldthatthings
are changing,” says Frank
Nweke,MinisterofInformation
andNationalOrientation.“Nige-
ria used to be regarded as a pari-
ah nation, ruled by a military
dictator.Thepresentgovernment
has deregulated and liberalized
our economy, and is allowing
the private sector to do what it
has the capacity and resources
to do. Nigeria now has a higher
return on investment than any-
where else in the world.”
In addition to improving the
country’s international image,
the campaign aims to instill a
sense of pride among Nigerians,
both at home and in the huge
Nigerian Diaspora spread across
the world. Relying heavily on
civil education and the role of
the mother in the Nigerian fam-
ily to get its message across, a
national reorientation program
seeks to tackle corruption, ad-
vanced fee scams, and violence,
and to restore traditional val-
ues, such as patriotism, re-
sponsiblecitizenship,discipline,
and hard work.
Nigerians already have much
to be proud of, says Mr. Nweke.
“We might have some people
who have been involved in ad-
vanced fee fraud, but we also
have millions of Nigerians who
are disciplined, highly educat-
ed, and skilled who are con-
tributing to the cause of human
history, and to development in
major countries of the world
like the United States. We have
Nigerians in NASA, we have
Nigerians who have won the
Nobel Prize, and are in the
World Bank and IMF.These are
the new Nigerians and the au-
thentic Nigerians.”
I INCREASED investment
in exploration and production
has given a sizeable boost to
Nigeria’s oil and gas reserves
since the Obasanjo adminis-
tration came to power.
Crude oil reserves grew
from 28 billion barrels in
1999 to 35 billion barrels in
2005, and production capac-
ity rose to 2.6 million barrels
per day (bpd).
Government incentives
have encouraged exploration,
particularly deep offshore,
and discoveries have been
made in more than a dozen oil
fields, raising the national oil
and condensate reserves by
almost 10 percent to 35 bil-
lion barrels.
New fields have been com-
ing on stream, such as Bonga,
currently producing at a rate
of 180,000 bpd, and Erha, with
a capacity of 210,000 bpd.
Investor confidence has been
boosted by a package of re-
forms and incentives that the
government has introduced,
leading to significant im-
provements in competition, ef-
ficiency, and transparency in
the industry.
FRANK NWEKE
Minister of Information and
National Orientation
Continued on page 2
NNiiggeerriiaa
Overlooked by the impressive Aso Rock,
Abuja is the seat of government, while Lagos
remains the commercial capital.
Building a
better image
‘A rewarding
business
environment’
On course for production targets
Our World
ITheWashington,D.C.-based
Corporate Council on Africa
(CCA)isdedicatedtostrength-
eningtradeandinvestmentre-
lations between U.S. busi-
nesses and the 53 countries of
Africa.WebelievethatAfrica's
future success depends upon
the ability of its entrepreneurs
and business people to create
and retain wealth through pri-
vate enterprise.
Nigeriaispoisedforinvestment
byentrepreneurswithwell-de-
signedbusinessmodelsandthe
mettletoenterthemarketplace.
The potential rewards, both in
termsofprofitsandsocialben-
efits, are unmatched.
Dedicated to expanding its
members'profilewiththeNiger-
ianbusinesscommunity,CCA
organized an investment con-
ference in Abuja during 2004
focused on Nigeria's agricul-
ture, minerals, ICT infrastruc-
ture, energy, housing, and fi-
nancial services. The confer-
ence proved to be a successful
venueforAmericanandNiger-
ian businesses to discuss their
needs. CCAalso recently pub-
lishedaguideondoingbusiness
in Nigeria that is an informa-
tive and highly useful tool for
potential investors.
CCAwillcontinuetofosterre-
lationships betweenAmerican
and Nigerian businesses by
seekinginnovative,diverse,and
viable investment opportuni-
ties, as well as providing fo-
rums for the exchange of in-
formation and ideas. Nigeria
represents a rewarding oppor-
tunity for American business-
es in a country where business
success and development go
hand in hand.
STEPHEN HAYES
President of the Corporate
Council on Africa
OIL AND GAS
NIGERIA usat 1-4.qxd ok sergio.qxd 15/1/07 10:45 Página 1

thing had to be done, and estab-
lished the Niger Delta Develop-
ment Commission (NDDC) the
yearitcametopower.TheCom-
mission is tasked with working
to reverse the impoverishment
ofthelocalcommunitiesbycater-
ingtotheregion’seconomicand
social development. The major
multinationaloilcompanieshave
also launched their own com-
munity development programs.
Inevitably, change has been
gradual,andnotasrapidassome
mighthavewished,butmuchhas
been achieved in terms of build-
ing of infrastructure, human de-
velopment, empowerment, and
environmental improvement.
EmmanuelAguariavwodo,the
NDDC’sManagingDirectorand
CEO, says the Commission has
received N210 billion ($1.6 bil-
lion)infunding.AfurtherN57.4
billion ($450 million) has been
allocated for this year.
Approximately2,000projects
have been completed, 670 are
close to completion, and a fur-
ther140areongoing.Newhigh-
ways, bridges and culverts are
being built across creeks and
swamps, opening up rural areas
I NEWS from the Niger Delta,
the huge area of wetlands that
are the source of most of Nige-
ria’s oil-wealth, almost invari-
ablyfocusesonattacksonoilfa-
cilities, violence, and kidnap-
pings. However, behind the
scenes steady progress is being
made to address the depravation
that causes the disruption.
Comprised of nine states, the
Delta area has suffered not just
fromyearsofneglectandlackof
development, but also from the
degradation of its environment
caused by the oil industry. This,
in turn, has destroyed the liveli-
hoods of large numbers of local
people in the rural economy.
Disruptionofoilproductionin
the Delta impacts not only on
Nigeria itself but—because of
the country’s importance as a
producer—also on world oil
prices.
The Obasanjo administration
was quick to realize that some-
I LOCATED on the Calabar
River in Nigeria’s Cross River
State,inthesouthernpartofthe
country, the ambitious Tinapa
shopping, entertainment and
leisure complex is intended to
become a global trading hub
along the lines of leading in-
ternationalfreezoneslikeHong
Kong and Dubai.
Thecomplexwillincludein-
ternational standard wholesale
emporiums, integrated shop-
ping complexes and product
distribution elements, support-
ed by business tourism and en-
tertainment facilities.
Itslocation,alongsidetheCal-
abar Free Trade Zone on the
east-west trading routes, will
enableTinapa to serve as a dis-
tribution point into Nigeria as
it becomes the economic hub
for West Africa. It is also ex-
pected to become the ultimate
center for retail and wholesale
activity within the Economic
Community Of West African
States (ECOWAS), taking ad-
vantage of the international
agreement on free movement.
Tobedevelopedasaprivate-
public partnership, Tinapa will
be constructed in four phases.
Phase One will include a shop-
ping and entertainment com-
plex, restaurants, warehouses,
a hotel, indoor and outdoor
leisure facilities, a movie stu-
dio, a man-made lake, and a
golf range.
SamAnani,theresort’sChief
ExecutiveOfficer,saysthatover
the next few years Cross River
Statewillbecomethepreferred
tourism destination not only in
Nigeria, but also in the whole
of West Africa.
“Our target is to ensure that
Africans,especiallywithinWest
Africa,haveadestinationtogo
to,”hesays.“Onlyabout5per-
cent of Nigerians have the ca-
pacity to travel internationally,
the other 95 percent represent
pent-up demand.”
The aim is to attract global
brandstosetupshopinthecom-
plex.“WeareinvitingtheAmer-
ican retail industry to look at
Tinapa very closely. I see op-
portunities for mega retail out-
letslikeWalmarttocomeinand
develop anAfrican strategy.”
Tinapa, says Mr. Anani, of-
fersalltheadvantagesavailable
elsewhere in the world. “It is a
tax free zone, all the facilities
are world-class and all the con-
straints that exist in the rest of
NigeriaarenotfoundinTinapa;
theeaseofentryandtheprocess
itself are seamless.”
Thursday, February 1, 2007 2Distributed by USA TODAY Our World
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Tinapa is set to become the new trading hub of West Africa,
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Over 80,000 m2
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leisureland, a hotel, an eight-screen digital cinema, a casino, a movie studio and other
world-class infrastructure, Tinapa will satisfy over 300 million brand-hundry consumers
with more to spend than ever before.
The Niger Delta Development Commission is
striving to make the troubled region one of
Africa’s most peaceful and prosperous by 2020
LLeeiissuurree
Tinapa complex aims
to become a mecca for
business and leisure
in WestAfrica
The wetlands of the Delta are a major source of oil.
Meanwhile, the national cof-
fers have been filled as high in-
ternational oil prices have in-
creased the petroleum sector’s
contribution to Nigeria’s for-
eign exchange earnings. Crude
oil exports have risen by more
than 25 percent since 2002 to
over 2.5 million bpd.
“The targets set by the gov-
ernment are on course and be-
ing pursued conscientiously,”
says Edmund Daukoru, Minis-
ter for Petroleum Resources
and President of OPEC. By
2010, the government wants to
see oil reserves rise to 40 bil-
lion barrels and production in-
crease to 4 million bpd.
The government also intends
to harness Nigeria’s vast natur-
al gas resources. Gas reserves
have increased from 176.4 tril-
lion cubic feet (tcf) in 2002 to
around 188 tcf—the eighth
largest deposit in the world. Gas
production has risen by almost
14 percent, from 1.8 tcf to more
than2tcfannuallyoverthesame
period, and gas flaring is due to
be eliminated by 2008.
As natural gas becomes an
increasingly important energy
source, Nigeria is on the way
to becoming a significant pro-
ducer of liquefied natural gas
(LNG) for export.
Nigeria Liquefied Natural
Gas Limited (NLNG) now has
five LNG production lines in
operation at its Bonny Island
plant in Rivers State, raising
output to 17 million metric tons
per year. When a sixth train
comes on stream in 2007, Nige-
ria will be able to export 8 mil-
lion tons of LNG per year to
U.S. markets.
Further LNG plants are
planned and, according to Fun-
sho Kupolokun, Group Man-
aging Director of the Nigerian
National Petroleum Corpora-
tion (NNPC), the capacity of
the Nigeria LNG project is ex-
pected to grow to about 30 mil-
lion tons per annum by 2012.
TheWestAfricanGasPipeline
project, scheduled for commis-
sioning towards the middle of
2007,willenableNigeriatosup-
ply natural gas to markets in
Benin, Togo, and Ghana. Two
other regional pipeline pro-
jects—the Equatorial Guinea
Gas Pipeline and the Trans-Sa-
haran Pipeline—will provide
access to the European market.
wherepreviouslytheonlymeans
of transport had been by water.
New health centers and schools
are improving the lives and op-
portunitiesoflocalpeople.Mean-
while, a comprehensive master
planhasbeendevelopedtoserve
as a blueprint for the long-term
transformation of the area.
Recentlycommencedprojects
and initiatives include the con-
structionofahighwayandbridge
linkingAbiaandImostates,open-
ing up the food producing areas
tourbanmarkets,andtheplanned
cultivation of a 27,000-hectare
cassava farmland across the re-
giontoprovideemploymentand
launch non-oil exports.
Visiting the area recently for
the opening of a new hospital,
President Obasanjo paid tribute
to the work of the Commission,
saying, “There is no state of the
Niger Delta region I have visit-
ed where the impact of the ND-
DC is not felt.”
Continued from page 1
SAM ANANI
Chief Executive of Tinapa
Business Resort
EMMANUEL
AGUARIAVWODO
Managing Director and
CEO of the Niger Delta
Development Commission
On course for production targets
A first for Nigerian
developers
Developing
the Delta
OOiill && ggaass
EDMUND DAUKORU
Minister for Petroleum
Resources and
President of OPEC

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IINARECENTstatement,the
Nigerian PortsAuthority (NPA)
has stated that it intends to ex-
pand Lagos, the country’s com-
mercial capital, into a port hub
for cargo traffic in the Central
West African Sub-region. This
announcement followed on the
heels of another great NPA
achievement earlier this year –
thefirstofficialhandoverofvar-
ious terminals in Lagos’Apapa
Port to private concessionaires,
thusmarkingtheculminationof
fiveyearsofreforminthecoun-
try’s port sector.
In line with its aim to convert
the country into a regional hub,
these reforms will be ongoing.
ManagingDirectorofNPAChief
AdebayoSarumihassaidefforts
have begun to expand container
stacking and handling facilities
in Lagos from its current capac-
ity of 450,000 containers to one
million containers by 2012.The
modernizationofcargohandling
equipment and other related fa-
cilities is also underway. Mr.
Sarumi also expects to increase
theport’scurrentannualvolume
of 45 million tons of cargo to 60
million tons in three years.
Although Nigeria already ac-
countsforroughly68percentof
totalseatradeintheWestAfrican
region,thereisstillhugegrowth
potentialgiventherelativelyun-
derdevelopedstateoftheregional
economy. Favorably positioned
in the heart of the oil-rich Gulf
of Guinea, the Nigerian econo-
my stands to gain a great deal
from further development of its
port sector. In total, the NPA is
responsible for eight ports, in-
cluding Lagos, 11 oil terminals
and 128 private jetties.
TheNPAhasbeenthedriving
forcebehindthemajoroverhaul
of the maritime sector taking
place in the country, including
playing an instrumental role in
preparing for privatization. Pri-
vatesectorgroupsthathavewon
concessionstodateincludeship-
pinggiantA.P.Moeller-Maersk,
which bid $1 billion to run the
largestcontainerterminalatApa-
pa.OtherwinnersincludeSifax,
Tin Can Island Container Ter-
minal Ltd and Joseph Dam and
Sons. The concessions include
management of critical opera-
tions, such as stevedoring, load-
ing and unloading, berthing and
cargo management, for periods
of between 10 and 25 years.
I NIGERIA’sboomingmilling
industry is the largest customer
forU.S.wheat,overtakingthetra-
ditionalleaders,JapanandEgypt,
and importing more than 3 mil-
lion tons last year, according to
U.S. Wheat Associates.
“Our U.S. associates visit us
every three months to see how
we are doing and to see what
they can do for us,” says Chief
Emmanuel Ukpabi, Managing
Director of the country’s fore-
most milling firm, Flour Mills
of Nigeria (FMN). With pro-
duction of approximately 6,000
tons of flour per day, the com-
pany ranks as the world’s sec-
ond largest single mill.
Despite growing competition,
FMN achieved record-breaking
results in 2005. Turnover rose
byabout27percent,fromN50.9
billion to N64.8 billion ($521
million),whileprofitbeforetax-
ation was N4.3 billion ($34 mil-
lion)—almost twice the pro-
jected figure.
Turnover for the FMN group,
whosebusinessactivitiesalsoin-
clude pasta production, cement
and fertilizer importing, manu-
facture of polypropylene sacks,
andashippingagency,increased
from N66.8 billion to N86.6 bil-
lion ($696 million). Group prof-
its before tax saw a remarkable
increasefromN2billiontoN6.3
billion ($51.5 million).
Chief Ukpabi puts customer
satisfaction high on the list of
the company’s competitive ad-
vantagesinmilling.“Wearestill
at the top because our quality is
the best and our service deliv-
ery is also the best,” he says.
FMN continues to upgrade
and renew its production facil-
ities, making huge investments
innewmills,andinstallingstate-
of-the-art equipment to improve
quality and reduce costs. There
are also plans to renovate the
packaging and loading plants,
wheat storage handling silos,
and ancillary facilities.
Recently, FMN has been ex-
panding its cement importation
and distribution business into
full-scale cement manufactur-
ing. $450 million is being in-
vested in the construction of a
cement plant near Calabar in
Cross River State.
Annual production capacity
will be 2.5 million tons, and the
plant is expected to begin oper-
ations towards the end of 2007.
The company’s technical part-
ners in the project are Holcim
Trading of Spain and Egypt’s
OrascomConstructionIndustries.
Meanwhile, a new gas plant
has been acquired to boost pow-
er supply and enhance opera-
tions at FMN’sApapa base fac-
tory complex in Lagos, where
the conversion from the use of
diesel to natural gas is starting
to bring immense benefits.
FMN is also eager to part-
ner with U.S. companies in
food and fertilizer ventures.
As an importer of fertilizer,
FMN already holds 40 percent
of the market, but Chief Uk-
pabi wants to produce it lo-
cally. “That is one of our pro-
jects that will be coming on be-
fore long,” he predicts.
CHIEF EMMANUEL
UKPABI
Managing Director of Flour
Mills of Nigeria
The Nigerian Ports
Authority is set to
capitalize on five
years of reforms
Afocus on customer
satisfaction drives
Nigeria’s primary
milling company
Skypower Aviation Handling Company Limited (SAHCOL) provides quality and efficient
Passenger, Ramp and Cargo Handling Services in line with best practices at the highest
international standards for the benefit of customers and stakeholders,
utilizing state-of-the-art equipment, procedures, skills and facilities through
the efforts of a dedicated workforce.
3rd Floor, Murtala Muhammed International Airport, Ikeja, Lagos, Nigeria
P.M.B. 21768, Ikeja, Lagos, Nigeria
Tel: +234-01-4934857, 4937790, 4960264, 7939256, 8922565, 4973767 Fax: +234-1-4935298
Email: info@sahcol.com, www.sahcol.com
G Passenger Handling G Ramp Handling G Cargo Handling
G Unit Load Device Control G Flight Control and Crew Administration
G Aircraft Servicing-Cleaning and Toilet Services G Haulage G Hajj Handling
G And other related Aviation Services.
Seeking partnership with U.S. firms
A new port of call
for privatization
AAggrriiccuullttuurree
TTrraannssppoorrtt
Flour Mills of Nigeria is continuing to improve its technological and human resources capabilities, resulting in increased productivity.

Determined to make a difference
NIGER DELTA DEVELOPMENT COMMISSION 167 Aba Road, Port Harcourt, Tel: +234-84-235250, www.nddconline.org
Touching lives
...making a difference
Touching lives
...making a difference
HEALTH EDUCATIONSKILL ACQUISITION
PROGRAM
ROADSWATER
By facilitating the rapid,
even and sustainable
development of the
Niger Delta..., the NDDC is
working hard to offer lasting
solutions through the
implementation of programs
and reforms.
“... the success of the NDDC will be a fulfillment of my promise to the good
people of the Niger Delta region: to bring to them sustainable and even
development; to establish for them a region that is economically prosperous,
socially stable, ecologically regenerative and politically peaceful”.
President Olusegun Obasanjo,
at the inauguration of the first NDDC board on December 21, 2000.
1 - ONDO, 2 - EDO
3 - DELTA, 4 - BAYELSA
5 - RIVERS STATE, 6 - AKWA IBOM
7 - CROSS RIVER, 8 - ABIA, 9 - IMO
1
2
3
4
9
5
6
78
NIMET
Weather information provides clarity for economic planning
I METEOROLOGICAL ser-
vices in Nigeria date back more
than 100 years to the British
colonial days, and until recent-
ly were provided from a de-
partment in the Federal Min-
istry of Aviation.
Three years ago, however,
the importance of accurate
weather information for all ar-
eas of the economy was rec-
ognized with the establishment
of the Nigerian Meteorological
Agency (Nimet) as an au-
tonomous body.
Serving both the public and
private sectors, and with a man-
date to generate its own rev-
enue, Nimet’s brief covers
everything from agriculture and
aviation to marine meteorology,
sports, tourism, oil, construc-
tion, energy, telecommunica-
tions, and commerce.
“Weather affects all other sec-
tors,” says Chief Lihwu Akeh,
Nimet’s Director General. “Re-
liableandtimelyweatherandcli-
mate information and services
are crucial for successful eco-
nomic planning, particularly in
a rural economy like ours where
the agriculture is still rain fed.
We interface the weather with
our national economy.”
Under Chief Akeh’s leader-
ship, the meteorological service
has been modernizing its infra-
structure and facilities, and de-
veloping as an income earner.
The agency is continuing to in-
stallsophisticatedcomputerized
and automated equipment in its
network to improve the collec-
tion, processing, and dissemi-
nation of data.
“We have assistance from the
U.S. government, the UK, and
the European Union, and from
our own government. We be-
lieve that in five years time the
services and products of Nimet
will rank with any other mete-
orological office in the world,”
says the Director General.
Forty-eight of a projected 50
automatic weather stations
(AWOS) have been installed
across the country, with modern
equipmentthatmeasuresweath-
er characteristics in digital for-
mat with fewer errors and en-
hanced reliability.
Backed by donations from the
African Center for Meteoro-
logical Application for Devel-
opment (ACMAD), the agency
has also been developing a rur-
al radio internet (RANET) ser-
vice to provide meteorological
information to farmers.
“Such information assists
farmers plan their planting,
weeding, application of fertil-
izers and pesticides, thus re-
ducing losses and maximizing
benefits of favorable weather
conditions to improve outputs,”
says Chief Akeh.
Serving the aviation sector
remains a primary function, and
Nimet has a crucial role to play
in restoring public confidence
in the industry, after recent air
disasters by contributing to the
safety and security of air trav-
elers.
The agency recently opened
a 24-hour pilot weather brief-
ing center at the domestic wing
of the Murtala Mohammed In-
ternationalAirport,Ikeja,Lagos,
to give pilots personal briefin-
gs on weather conditions be-
fore take-off, en-route, and on
landing. More centers are being
planned for other designated
Category III airports at Abuja,
Port Harcourt, and Kano.
New equipment and technol-
ogy is being introduced at air-
ports across the country, in-
cluding analogue and digital
barometers and anemometers to
aid landing in very poor visi-
bilityandprovidewindspeedin-
formation. Integrated control
towersystemsincorporatingme-
teorological information are al-
so being installed.
“You can never do too much
to save lives, and with what has
happenedrecentlyweneedtore-
double what we have done. We
were in Paris recently to buy ad-
vanced work stations, software
and satellite systems. All the
equipment we are buying now
has to be computer satellite
basedsothatwecannetworkit.”
says Chief Akeh.
SAHCOL
Aiming to join the
industry’s high flyers
I ESTABLISHED ten
years ago as a sub-
sidiaryofNigerianAir-
ways, Sky Power Avi-
ation Handling Com-
pany (Sahcol) is a ma-
jor player in Nigeria’s
aviation handling in-
dustry.
In October it was an-
nounced that Sahcol
hadwonthecontractto
provide full ground
handlingservicestothe
new Nigerian airline,
Arik Air. The contract covers
all Arik’s departures and ar-
rivals for domestic, regional
and international operations.
Covering four operational
zones—Abuja, Kano, Lagos,
andPortHarcourt—Sahcolop-
erates at almost every airport
in the country.
It became an autonomous
company—thoughfullyowned
by the federal government—in
1999. Currently under the juris-
dictionoftheMin-
istryofAviation,it
is slated for even-
tual privatization
by the Bureau of
PublicEnterprises.
The company’s
core areas of ac-
tivity are passen-
gerhandling,cargoservices,and
ramp handling services.
In pursuit of its ambition to
become one of the three lead-
ing aviation handling firms in
Africa by 2008, Sahcol has ac-
quired state-of-the-art equip-
ment and instills its staff with
acommitmenttoefficient,safe,
and speedy service.
Its VIP services include ex-
ecutive premium lounges for
airline customers, who wish to
escape from the usual hustle
and bustle of busy airport ter-
minals. Prominent customers
includetheNigerianPresident.
Sahcol Aviation
Security provides a
wide range of ser-
vices,includingcon-
trol and supervision
of access in check-
in zones, passport
control, and super-
visionandcontrolof
cargo operation, including es-
cort to aircraft.
Among the leading air-
lines served by the compa-
ny are Air France, Egypt Air,
Air Gabon, Middle East Air-
lines, Virgin Atlantic and
Virgin Nigeria.
IDEREGULATIONandliber-
alizationhavegivenNigeriaone
of the most dynamic and rapid-
ly developing telecommunica-
tionsindustriesintheworld.With
the recent privatization of na-
tional carrier NITEL, the sector
isheadingforanothermajorleap
forward.
Telephones are used by ap-
proximately 23 million Nigeri-
ans, on the face of it a large num-
ber, but representing a teledensi-
ty of only 18.3 percent in a na-
tion of 130 million people. That
meansthereisahugemarketwait-
ingtobedevelopedandpotentially
huge profits to be made as the
economy grows.
TheObasanjogovernmentwas
quick to recognize the impor-
tanceofestablishinganefficient
andreliabletelecommunications
infrastructure to promote eco-
nomic, political, social and cul-
tural development in Nigeria,
and has played a major role in
facilitating the sector’s growth,
bringing in a revised National
Telecommunications Policy
(NTP) and the New Nigerian
Telecommunications Act of
2003.
Liberalizationofthesectorhas
led to a multi-operator environ-
mentandthereplacementofmo-
nopolies with healthy competi-
tion. Investment has increased
substantially, and the public ben-
efits from more widely available
and better quality services.
Whenthegovernmentcameto
power in 1999, there were fewer
thanhalfamilliontelephonelines
inNigeria,ofwhichonly300,000
were live and active. By 2005,
the number of fixed lines was
headingtowards1.4million.Even
more strikingly, the number of
mobile phones rose from 1.56
millionin2002toaround20mil-
lion in 2006. By the year 2010,
NigeriaisexpectedtobeAfrica’s
largest mobile phone market.
Foreign direct investment in
the sector has rocketed to more
than $9 billion, from $50 mil-
lion six years ago. Massive ex-
pansionprogramsbythetelecom-
munications service providers
have created jobs and new eco-
nomic opportunities.
Cornelius Adebayo, former
Minister of Communications,
acknowledgesthereisstillagreat
deal to do, but says tremendous
progress has been made. “From
being one of the worst on the
continent, in terms of commu-
nications, we are getting to be-
come one of the best in Africa
today. It is our hope to be on a
par with the best in the world,
by the year 2010.”
A $200 million rural telepho-
nyprogramsponsoredbythegov-
ernment of China is being rolled
out to extend access more wide-
ly across the country.
A recent major development
has been the successful privati-
zation of the leading fixed line
operator NITEL, after several
failedattempts.A75percentstake
inthecompanyhasbeenacquired
by Transnational Corporation
(Transcorp), a wholly Nigerian-
owned conglomerate. The re-
maining 25 percent of NITEL
will be sold to Nigerians through
a public offering.
Aspartofthe$750milliondeal,
Transcorp also acquires MTEL,
NITEL’s fully owned subsidiary
and the country’s fourth largest
mobile telephony operator, with
around one million subscribers.
Over the next two years,
Transcorpplanstoinvest$1billion
upgradingNITELwiththeaimof
creating a world-class telecom-
munications network. The com-
pany says it intends “to wake NI-
TEL from its deep slumber, and
turnthesleepinggiantintoamore
effectiveandefficientproviderin
the wireless, broadband, video,
voice, and data markets.”
Nimet assists Nigeria’s agrarian economy by providing accurate and timely data.
Autonomous but owned by
the state, Sahcol will even-
tually be privatized.
By 2010,
Nigeria is
forecast to
become the
largest
mobile phone
market in
Africa.
TTeelleeccoomm
Rapid growth and
huge potential
Liberalization of Nigeria’s telecommunications sector
has led to healthy competition and increased investment
CORNELIUS
ADEBAYO
Former Minister
of Communications
LIBWU AKEH
Director General of Nimet
A major player in
Nigeria’s aviation
handling industry,
Sahcol was
recently chosen
by Arik Air

MTN
I MTNNigeriaisthecountry’s
leading telecom company with
acurrentsubscriberbaseofnear-
ly ten million customers, repre-
senting a 45 percent market
share. Celebrating its fifth an-
niversary this year, the compa-
ny has a network roll out of
1,400milesofopticcablereach-
ing all 36 states in the country
andcoveringademographicarea
of 54 million people. Part of
South Africa’s MTN Group,
MTN Nigeria forms a compo-
nent of the Group’s vision to be-
come the world’s largest emerg-
ing market player in telecom-
munications – an aim that was
significantly boosted this year
by the Group’s acquisition of
Investcom, increasing its pres-
ence to 21 countries in Africa
and the Middle East
and raising its sub-
scriberbaseto30mil-
lion.
This has not dimin-
ished,however,theim-
portance of Nigeria in
the Group’s strategic
plans, according to
Corporate Services
ExecutiveAminaOy-
agbola. She com-
ments, “Realizing
Nigeria, as it were, is
keyasacontributorto
theperformanceofthe
entire group. The re-
cent acquisition of In-
vestcom may change
the dynamics slightly,
butNigeriawillalways
be important.”
While Ms. Oyag-
bola says the compa-
ny’s pre-eminent po-
sition in Nigeria was helped by
the financial weight, knowledge
and experience of the MTN
Group, allowing the Nigerian
subsidiary to roll out its network
before the competition. Ms. Oy-
agbolaalsosaysthatMTNNige-
ria will fight to maintain its lead.
“I see a lot of opportunities and
scopefordevelopmentforNige-
ria, and from an MTN perspec-
tive we are grateful for all the
opportunities,” she states. “We
are not resting on our oars. I
thinkwehaveanadvantage,and
I think the advantage we have
is that we know this business,
weknowtheterrain.Wearehere
for the long haul, and we are
positioningourselvesfortheop-
portunities before us.”
Nigeriaalsorepresentsanother
step in the Group’s vision of
leading emerging
countries into a new
age of economic de-
velopment using
telecommunications
as a springboard.
MTN Foundation is
theGroup’scorporate
social responsibility subsidiary,
and is perceived by the compa-
ny as an integral part of their
business strategy. The Founda-
tion invests in health, education
and social empowerment pro-
jects,whichfromabusinessper-
spective, leads MTN to believe
they will definitely
benefitinthelongrun.
Ms. Oyagbola notes,
“The statistics are
clear about the corre-
lation between tele-
comandGDPgrowth.
They are there for
everybody to see. At the end of
the day, it may appear not to
bring profit today but ultimate-
lyitempowerspeople,andthose
are your future customers.”
MTEL
Championing the drive for a mobile nation
IWHENNigerianmega-corpo-
rationTranscorpacquiredthema-
jority share of state-owned tele-
phone giant Nitel this summer, it
also acquired Nitel’s mobile sub-
sidiary,NigerianMobileTelecom-
munications Limited (Mtel), and
manybelievethatthiswasthere-
al meat of the deal. The fourth
largestplayerintheworld’sfastest
growing telecoms market, Mtel
nowdominatesa10percentmar-
ket share in Nigeria despite the
obstacles inherent in being, until
now,astate-ownedentity.Withthe
injectionofprivatecapitalthatpri-
vatization will bring, the sky is
the limit, according to CEO Ed-
win Moore Momife.
“WhenIcametothiscompany
two years ago, we had only
110,000 subscribers. Today, we
have 1.2 million. Revenues in
2003 were $39 million. We just
closed last year with about $116
million,”hestates,notingthatthe
company has managed to do this
on an investment of only $140
million, while the other private
players have been operating with
investments of up to $1.5 billion.
He adds, “In terms of the vision
forthebusiness,thiscompanyhas
the makings of becoming a sig-
nificant player in Africa because
wehavecoverageinall36states,
andifwearenumberfourinNige-
ria, which promises to be the
biggest market in the continent,
thereisnodoubtthatweareama-
jor mobile operator.”
Mtel is targeting an increase in
its subscriber base to five million
customersbytheendofthisyear,
a completely realistic projection
according to Mr. Momife, who
says that the company has been
careful to balance its expansion
withacontinuationofqualityser-
vice. The company has already
moved past GPRS technology to
employthelatestEDGEtechnol-
ogy,andTranscorphasbeenquick
toemphasizethatrenderingglob-
ally competitive services is a top
priority for the com-
pany.
In addition,
Transcorp is taking
over a company that
has in the past year
undergone a com-
prehensivecorporate
restructuring in anticipation of
its upcoming privatization. Mr.
Momife says that not only have
theimmediateneedsoftheircus-
tomers been addressed but that
measures have also been imple-
mentedtoensurethesustainedde-
velopment of the company in
post-privatization through max-
imizingefficiency.This
guaranteesanexcellent
return on investment
for Transcorp. It also
offers enticing oppor-
tunities for investors
interested in the re-
maining 25 percent of
the company that is still in gov-
ernment hands, which Mr.
Momife believes will eventual-
ly be offered on the Nigerian
Stock Exchange.
With the successful completion of this
year’s roll out, MTN will have a demo-
graphic coverage of 54 million Nigerians.
In less than two years, Mtel has increased its subscriber base to
1.2 million and boasts coverage in all of Nigeria’s 36 states.
Mtel is target-
ing an increase
in its subscriber
base to 5 mil-
lion by the end
of the year
‘The advantage
we have is that
we know this
business, and
we know the
terrain’
Meeting the
demands of a
liberalized market
NITEL
I THESUCCESSFULsalethis
summer of Nigerian Telecom-
municationsLimited(Nitel)tothe
newly emerged Nigerian con-
glomerate Transcorp marked a
new era in the Nigerian govern-
ment’s privatization program.
Thesinglelargestentityslatedfor
privatization under the govern-
ment’s reform program, Nitel is
thecountry’smainfixedlineop-
eratorandtheonlycarriertoboast
full coverage throughout Nige-
ria by either copper, fibre optic
orsatelliteconnection.Transcorp
secureda75percentshareinthe
company for $750 million, with
the fate of the remaining state-
owned 25 percent to be deter-
mined at a later date.
Formedasaresultofthemerg-
er of the former Posts and
TelecommunicationsDepartment
andNigerianExternalTelecom-
municationsLimitedin1985,Ni-
tel has struggled
throughout the past
twentyyearstokeep
pace with industry
developments and
national demand
whilelumberedwith
the restrictions and
mentality of a state-
owned enterprise.
CEOA.J.Mashisays
that a large impedi-
ment has been the
company’s inability
to access financing
for the rapid roll out
ofitsdigitalnetwork.
As a government entity, Nitel
was until recently barred from
obtaining funding from the cap-
ital markets, which placed the
company in a disadvantageous
position,especiallywhenthesec-
tor was liberalized in 2000.
“In one year not less than 40
companies had been registered
andallofthemwereenteringthe
market. This really presented a
greatchallengeforNiteltocom-
pete in an environment where
theprivatesectorhadmorefree-
dom to make quicker decisions,
and to access the money market
for funding,” comments Mr.
Mashi. “These things really af-
fected us and it took a very long
time for us to move ahead. Oth-
erwise, today, we would be in a
comfortable position in the in-
dustry, given the infrastructure
we have built over the years.”
Although a further challenge
arose when the government de-
cided to privatize the company,
Nitelwasabletoconvincethose
in charge that the company had
to continue developing. It re-
ceived authorization to access
private funding and Mr. Mashi
says the company has been able
in the last few years to move
ahead with plans to increase its
market penetration and upgrade
itsinfrastructure. Ni-
tel has taken advan-
tage of its extensive
transmissioncapaci-
ty, which is being
used by many GSM
operatorsinthecoun-
try,tointroducehigh
speed Internet con-
nectivity in various
parts of the country.
In Lagos, the com-
pany has used SAT-
3 to provide an In-
ternet gateway for
other providers. The
companyhasalsobe-
gunsalesoffixedwirelessprod-
ucts,targetingdeliveryof295,000
lines,andhascommencedapro-
ject to deploy an additional
250,000 land lines in Lagos.
This has positioned the com-
pany strongly for its privatiza-
tion,andMr.Mashibelievesthat
Transcorphasfounditselfagold-
mine. “They do not need more
than a year to turn this compa-
ny around and make it highly
profitable.Nitelisaverystrong
business entity and our sub-
sidiary Mtel is also expanding.
With the business might, oper-
ational resilience and corporate
toweringstatusofthecombina-
tion of Nitel and Mtel, we have
great potential.”
The privatization of
state-owned Nitel
has paved the way
for unprecedented
full nationwide
coverage
A.J. MASHI
CEO of Nitel
EDWIN MOORE MOMIFE
CEO of MTEL
‘With the busi-
ness acumen
and operational
resilience of
Nitel, we have
great potential’
AMINAOYAGBOLA,
Corporate Services
Executive, MTN
Extending network coverage to the 36 states
The Nigerian Meteorological Agency (NIMET) was established in 2003 to monitor
weather conditions and climate in Nigeria and to provide meteorological, hydro-
logical and oceanographic services to support national requirements in the fields
of human and environmental sustainability, agriculture, tourism, health, defence,
the safe running of air, land and sea transportation and the management and
mitigation of natural disasters.
NIMET's roots stretch back to 1892 when the British Colonial Government
founded The Nigerian Meteorological Services Department. Modern day NIMET
is therefore the oldest institution in Nigeria.This wealth of experience allows the
agency to carry out its tasks with efficiency and accuracy, providing up-to-the-
minute climatic predictions for the benefit of Nigeria's citizens, environment,
economy and infrastructure.
P l o t 5 0 7 , Po p e Jo h n P a u l I I S t re e t , M a i t a m a D i s t r i c t , A b u j a , N i g e r i a
Te l : + 2 3 4 9 4 1 3 0 7 0 9 , F a x : + 2 3 4 9 4 1 3 0 7 1 0 , w w w. m e t e o - n i g e r i a . c o m

I DETERMINED to create a
strong banking sector that de-
positors can trust and investors
can depend upon to usher in a
morerobusteconomy,Governor
of the Central Bank Professor
Charles Soludo took the Niger-
ian financial sector by storm up-
onhisappointmentin2004.Faced
with a banking sector in disarray
andripewithpoorcorporategov-
ernanceaswellasunhealthybal-
ance sheets, Professor Soludo
took immediate action to con-
solidate the sector and improve
its efficiency. Just two years lat-
er, the Nigerian financial sector
is a different ballgame altogeth-
er,andProfessorSoludohassaid
that within ten years, Nigerian
banks will be among the top 50
to 100 banks in the world.
In the past two years, the sec-
tor has shrunk from an original
89 banks to 25, with ten of these
accountingformorethan50per-
cent of the industry’s total assets
andliabilities.Withinamonthof
hisappointmentin2004,theSolu-
do-ledCBNhadproposedanew
policy aimed at eliminating the
decayinthebankingsystem.This
policyimposedarecapitalization
requirement obliging banks to
raise their capital base from $15
million to $200 million by the
end of 2005 or fold.
The policy also stipulated that
all banks would be expected to
incorporatebest-practice,corpo-
rategovernance,improveonself-
regulation,instituteIT-drivencul-
ture and seek to be competitive
inthe today’sglobalbankingin-
dustry.Inaddition,withinthefirst
quarterof2004,theCentralBank
had classified 14 banks as mar-
ginal and 11 as unsound. In to-
tal, these banks accounted for
nearly 20 percent of total assets
anddepositsintheNigerianbank-
ing system.
Today, the sector is showing
healthysignsofgrowth.Although
thenumberofbankshasbeenre-
duced by nearly three quarters,
capitalinflowsintothesectoraf-
tertherecapitalizationpolicyfrom
bothdomesticandforeignsources
have been significant. As of Ju-
lythisyear,thetotalliquidassets
of the banks in the country stood
at $18 billion, 10 times higher
than in 2004. The Central Bank
hasalsobeencarefultocarryout
apost-consolidationduediligence
exercisetoensuretheabsenceof
bubblecapital,andismonitoring
post-consolidationintegrationof
processes, systems, operations,
IT and products.
For their part, banks are ag-
I ONE of Nigeria’s emerging
financial powerhouses, Bank
PHB(Platinum-HabibBank)has
managed in the space of a few
years to become one of the top
tenbanksinthecountry,andaims
tobeoneofthetopsevenbynext
year. The result of a merger be-
tween two institutions – Plat-
inumBankandHabibBankNige-
ria,BankPHBpridesitselfonits
customer-oriented strategy and
has emerged as one of the banks
likely to lead Nigeria into a po-
sitionofdominanceintheAfrican
financial markets.
The bank has targeted a broad
range of corporate and institu-
tionalmarketsegments,fromoff-
shore companies and SME’s to
governmentministriesandparas-
tatals. A full service financial in-
stitution, Bank PHB provides a
range of services including cor-
porate , international trade and
projectfinance,loansyndication,
correspondent banking, discount
brokerage,securitiestrading,pri-
vate and public equity, financial
advisory, wealth and funds man-
agement, insurance brokerage,
consumer loans and mortgage fi-
nance. The bank also offers mul-
ti-channel payment systems and
full e-banking solutions, includ-
ingInternetandcellularbanking.
With a client base of over one
millioncustomerswhoareserved
at 105 branches in the metropol-
itan areas of the country, Bank
PHB boasts total assets of nearly
$1billion,andregistered372per-
cent growth in revenues last year
with a pre-tax profit growth of
418 percent over the same peri-
od. The bank attributes this phe-
nomenal success to the harness-
ing of its merger synergies, opti-
mal asset deployment and rigor-
ousportfoliomanagement.Inad-
dition, Bank PHB has anchored
thisacceleratedgrowthinastrong
riskmanagementstructurethatis
guided by compliance with the
BaselIIinternationalcapitalframe-
work.CEO Francis Atuche has
been the mastermind behind one
of the most flawlessly executed
mergers in the Nigerian banking
sectorconsolidationprocess.Cre-
atingaseamlessoperatingplatform
aswellasasharedvision,culture
and value system for the new en-
tity,Mr.Atuchewasnominatedlast
year as one of Nigeria’s most re-
spected CEOs by a PriceWater-
HouseCoopers’BusinessDaysur-
vey.Mr.Atucheisnowdesigning
thestrategytoensureBankPHB’s
successfulpan-Africanexpansion.
Before the merger, Platinum
Bank was already
oneofthemostheav-
ily capitalized banks
inthecountry.Habib
Bank began opera-
tionsin1993andhad
approximately 70
branches.Nowcom-
biningforcestoformBankPHB,
the banks have taken advantage
of their former market strength
and experience to launch a new
range of PHB products that res-
onatewiththebank’sserviceori-
entedphilosophy.Theseinclude
Paytime Salary Advance
Scheme, the Phuture Account,
the Partners Account, Possibili-
ties and the Bank PHB Presto
service for money transfers
throughout the country.
Bank PHB also recently un-
veiledanarrayofproductsforthe
Nigeriandiasporathatallowsex-
patriate citizens to open and op-
erate a bank account at home – a
first in the Nigerian banking sec-
tor.Asafurtherexam-
pleoftheirinternational
aspirations and inno-
vation,BankPHBwas
the first corporate in-
stitution in Africa to
participateintheWorld
Business Forum held
recently in New York. Among
such luminaries as Bill Clinton,
Jack Welch and Rudy Guiliani,
Mr. Atuche highlighted the need
forinvestorsinEuropeandAmer-
icatotakeafreshlookatNigeria.
“Oureconomicreforms,abun-
dant resources, versatile work-
force and the business parame-
ters obtainable in Nigeria make
theregionworthyofseriouscon-
sideration.”Mr.Atuchesaid.“We
have a lot more to offer than just
oil. Investors and international
capital need to move into the
market in order to benefit from
the growth stage of its econom-
ic life cycle. That is what strate-
gicthinkingisallabout,theabil-
ity to see opportunities before
they become obvious.”
I ESTABLISHED in 1990, Di-
amond Bank has shown itself to
bethegemoftheNigerianbank-
ing industry.Arguably the coun-
try’s most technologically ad-
vancedbank,DiamondBankhas
prided itself on providing real
time transactions since its incep-
tion,andisnowmovingfullsteam
ahead with new electronic pay-
mentmethodsaimedatcapturing
alion’sshareofthemorethan80
percent of the population in the
countrywhodonotyethavebank
accounts.Meanwhile,thebankis
continuingitsthrusttobeadom-
inant player in the commercial
sectorandincreasingitscorporate
business,especiallyintheoiland
gas industry.
“Diamond Bank from the first
sought to identify itself with the
deploymentoftechnologyforser-
vices.Thatiswhywhenwestart-
ed, from day one, all the branch-
esofthebankwereonline,”com-
mentsCEOEmekaOnwuka.“In
terms of telecommunication in-
frastructure, we’ve always used
the best. Also in terms of bank-
ingapplications,wedon’tcutcor-
ners.”
Inadditiontopioneeringonline
bankinginthecountry,Diamond
Bank has also spearheaded the
drive towards a cashless society
with the introduction of its Pay-
card. This summer, Diamond
launched SmartSwitch Nigeria,
an electronic payment company
that will provide those without
bankaccounts(estimatedatsome
112 million people, representing
roughly N500 billion ($3.9 bil-
lion)outsidethebankingsystem)
to make flexible and secure on-
line and offline e-payments. Di-
amondBankitselfwillemploythe
technology in eight new finan-
cial products.
A partnership with South
Africa’s Net1 Universal Elec-
tronic Payment Technologies,
SmartSwitchwillalsoallowcom-
panies to tailor their products for
Nigeria’smassmarketwhilemin-
imizing the cost of delivery and
product management. Since it is
operated offline, it reduces com-
municationcosts.Thesmartcard
system also provides the highest
levelsoffingerprintsecurity.The
commercial banking sector has
traditionallybeentheprimaryfo-
cusforDiamondBank,and,with-
in this field, it strives to improve
the lot of Nigerian companies in
general and boost the devlope-
ment of SMEs in particular.
“We are very dominant in the
enterprisemarket,orwhatwecall
the middle market. We have a
very good share of that business
and that has been our major
strength,”commentsMr.Onwu-
ka. “We also have a good pres-
ence in the corporate sector but
not as much as we have in the
middle market. There are very
few local enterprises that don’t
have something to do with Dia-
mond Bank. What we are doing
right now in terms of strategy is
enhancing our position in corpo-
rate banking as well as a making
a major push in retail banking.”
Partofthebank’sdriveintore-
tailbankingwasthelaunchofits
DiamondMinibrancheslastyear.
Designed to support Diamond
Bank’smainbrancheswhilepro-
vidingcost-effectivechannelsof
customer service, the Minis are
smaller banking stations with
ATMs and Internet points. An-
other boost to retail banking was
Diamond’s merger with Lion
Banklastyear.Intotal,Diamond
postedastaggeringgrowthinper-
sonal accounts of 228 percent in
2005, of which Lion Bank, with
its22branches,accountedforjust
over 50 percent. Diamond also
registeredanincreaseinpost-tax
profitsof58percentandagrowth
in assets of 75 percent last year.
While regional expansion is
definitely on the agenda for Di-
amondBank,whichalreadyhas
a subsidiary in the Republic of
Benin and is licensed to operate
throughoutWestAfrica,Mr.On-
wukasaysthattheNigerianmar-
ket,withitsenormouspotential,
willremainapriorityfocus.“Our
vision is about banking Niger-
ian businesses and what is dri-
ving our expansion into other
markets are the interests of
Nigeriancompanies,”hestates.
“But then again we know that a
lotishappeninghereinNigeria.
Intermsofthefutureofthebank-
ing industry, it holds a lot of
promiseandisdefinitelyunder-
banked. The Nigerian market is
our major focus right now.”
gressively pursuing market ex-
pansion by expanding their
product lines, improving ser-
vice and working to bring new
customers into the mainstream
banking system. The sector is
registering new highs for the
number of new mortgages,
small business loans, credit
cards and deposit accounts that
are being issued. In 2005, there
was a 20 percent increase in
the use of debit cards, a 40
percent increase in the use of
checks, and a 41 percent in-
crease in interbank transfers in
the country.
FFiinnaannccee
Sectorial shake-
up pays dividends
Nigerian banks are on
the rise, with
predictions that they
will they break into
the top 50-100
worldwide in ten years
Platinum Bank and Habib Bank Nigeria have
joined forces to form the vanguard of Nigerian
banks entering the pan-African arena
PHB registered
revenues and
profit growth of
372 and 418
percent respec-
tively last year
Flour Mills of Nigeria PLC
Flour Mills of Nigeria Plc, 2, Old Dock Road Apapa, P.O. Box 341 Apapa, Nigeria, Tel: +2341 5803370-9, Fax: +2341 5870717, www.fmnplc.com
After more than 45 years in the business, it's no surprise to us at all that Flour Mills of Nigeria has grown into the biggest flour mill in the country, and the second largest in the
world. In fact, our Golden Penny brand is one of the most recognizable in the region, known for the highest quality flour, semolina and pasta products. Although we are
experts in flour milling and related food products, our business activities today extend well beyond our historical roots. We are now also involved in the production of bulk
and bagged cement, the blending and distribution of fertilizer and the manufacture of woven polypropylene sacks. Our environmentally friendly gas generation plants
power our manufacturing facilities and our fleet of owned trucks covers all of Nigeria.
Over the years, our vision and investments have paid off. Flour Mills has experienced an extraordinary growth, securing our current position as a giant in every industry in
which we compete. We now provide food for all Nigerians, enable the infrastructural development of Nigeria and support the agricultural economy so critical for the future
of our country. But we remain convinced that our past success pales when compared to our potential for the future. And we are harnessing this potential with our greatest
assets: an unwavering dedication to a quality product, superior customer service and our committed employees. All this makes us anything but run-of-the-mill...
We believe
in Nigeria’s tomorrow
A successful merger places PHB in pole position
PLATINUM-HABIB BANK
A bank with a consistently polished performance
DIAMOND BANK
Bank PHB
has 105
branches
nationwide,
serving its
client base of
over one
million people.
Diamond Bank aims to extend its services to the estimated
80 percent of Nigerians who do not have a bank account.
EMEKA ONWUKA
Managing Director and CEO
of Diamond Bank
ThetotalliquidassetsofNigeria’s
banksreached$18billionin2006,
a tenfold increase over two years.

I THE FEDERAL Mortgage
Bank of Nigeria (FMBN) has
been supplying the country’s
mortgage markets with sustain-
able liquidity since 1977, with
the aim of developing the na-
tion’smortgageindustryandgiv-
ing Nigerians access
toaffordablehousing.
Thestate-ownedbank
operates as a viable
androbustsecondary
mortgage institution
thatiscurrentlyacting
inpartnershipwiththe
country’s most prestigious insti-
tutions. FMBN’s decision to ac-
cess the capital markets with
MortgageDebtSecurities,Mort-
gage-Backed Bonds and Mort-
gage-Backed Securities has ef-
fectivelylinkedthemortgagein-
dustry with the capital market,
increasing both its critical mass
and its lending potential.
FMBN Chairman Professor
Akin L. Mabogunje was asked
to join the bank by President
Obasanjo himself, who was
aware of the professor’s exten-
sive experience in housing is-
sues, through his involvement
with the United Nations and the
World Bank. Professor Mabo-
gunje’sfirststepwasthecreation
of the National Housing Fund
(NHF), which has been active
since 1993. He explains, “When
the President asked me to come
andhelpseewhatcouldbedone,
Ipointedoutthattherealcruxof
thehousingindustryislong-term
savings. If a country can’t put
together substantial long-term
savings,thenreallyithasn’tstart-
ed on the road to affordable and
durable housing.”
Not long after the creation of
the NHF, according to Prof.
Mabogunje, FMBN saw that
there was a serious lack of hous-
ing available in the country for
fund contributors. As a result,
thebanktookitssecondstepand
openedthefundtorealestatede-
velopers so they had access to
lower interest rates. Conse-
quently, they were able to build
housing within a financial range
that was accessible to
the average Nigerian
worker.
The bank took its
next major step when
NHFcontributionsbe-
gan to stall. Prof.
Mabogunje says that
he realized that the bank needed
access to a greater pool of funds
so he approached the President
with the idea of using a nation-
alpensionfundasasourceofcap-
ital. He explains, “It took a lot
more time to establish the Pen-
sion Fund. But after more than
ten years of contributions to the
NationalHousingFund,whatwe
hadcollectedwasstillunder$150
million. Once the National Pen-
sion Fund was created, within
six months over $264 million
had been collected.”
From this step, it was a natur-
alprogressionforFMBNtohead
tothecapitalmarkets,anditspent
much of last year working on
this process. Results have been
promising. The bank decided to
float a $780 million Mortgage-
Backed Bond to refinance the
acquisitionofstate-ownedhous-
ing, and was subsequently reg-
istered as an issuing house with
the Securities and Exchange
Commission. To date, 14 finan-
cial institutions have committed
to underwriting the bond to the
tuneof$2billion,morethandou-
ble the amount needed.
ProfessorMabogunjesaysthat
things are now on the right track
in the development of a robust
housing sector. Since housing
sector reforms were implement-
ed in 2003, including the liber-
alizationofthemortgagemarket
for primary loan providers,
FMBN’s lending has increased
byastaggering800percent,and
this is contributing to general
economic growth.
“The President’s reforms are
not only just about privatization
but really about how to encour-
agetheprivatesectortobeinthe
driver’s seat to grow the econo-
my,” he states. “The consolida-
tion in the banking sector, the
promotion of the capital market,
the movements in housing and
infrastructure development are
all calculated to give the free
market economy fertile soil in
which to grow.”
‘The real crux of
the housing in-
dustry is long-
term savings,
which lead to af-
fordable housing’
SKYE BANK
The Skye’s the limit
for industry newcomer
I THE RESULT of a merger
between five former banks in
thecountry,Nigeria’snewestar-
rival on the financial scene is
Skye Bank, which opened its
doors in January of this year.
With a branch network spread
over 160 locations throughout
thecountry,SkyeBankisadom-
inant player in the retail bank-
ing sector. It is also one of the
top five banks in the country in
termsoftotalshareholderfunds.
CEO Akinsola Akinfemiwa
says that Skye wants to be the
friendly,neighborhoodbankthat
Nigerians know and trust, and
that in addition to its number of
branches, the bank is now ex-
panding its automated banking
points and offering a range of
new consumer products. “We
want to serve the people. We
wanttobethebanknextdoor.A
bank that is accessible to every-
one.Itdoesn’thavetobeinterms
of the numbers of branches that
we have, we’ll also be leverag-
ingonITandtelephonebanking.
WearepushingATM,andweare
pushing e-channels,” he states.
Among the new consumer
productsbeinglaunchedareSkye
Rainbow, a savings account for
children and teenagers; Skye
SalaryExpress,asalaryadvance
product; Skye Support, a finan-
cialproductforSMEs;SkyeSec-
onds, a strategic product for fi-
nancing the purchase of second
hand cars, the country’s largest
automarket;andSkyeLifestyle,
a consumer lending product for
home and lifestyle purchases.
Mr.Akinfemiwasaysthatthe
bank is focusing on providing
productsthatmeettherealneeds
of Nigerians, while providing
themwithabanktheyfeelcom-
fortableinapproaching.“What
wedowillbebasedontheneeds
of the people and one way to
do this is to go and find out
what they need from us,” he
comments.
AKINSOLA AKINFEMIWA
CEO of Skye bank
AKIN L. MABOGUNJE
Chairman of
FMBN
TANIMU YAKUBU
Managing Director
and CEO of FMBN
In under a year Skye Bank has spread to 160 locations nationwide.
Following housing reforms, FMBN has increased its lending by 800%.
The Federal Mortgage Bank of Nigeria opens
the door to first-time buyers by connecting
the mortgage industry to capital markets
Focused on customers feeling at home
FEDERAL MORTGAGE BANK OF NIGERIA

IVOTEDthisyearasBestBank,
BestTradeFinanceBankandBest
ForeignExchangeBankinNige-
riabyGlobalFinance,FirstBank
is the country’s premier financial
institution and now the highest
capitalizedcompanyontheNiger-
ian Stock Exchange. Established
in 1894, the bank has evolved in-
to the country’s leading financial
services solution provider and a
major contributor to the develop-
ment of the economy. With pre-
tax profits of $155 million last
year, and a consistent equity re-
turn of 27 percent for its share-
holders, First Bank is Nigeria’s
most profitable financial institu-
tion, and has proven true to its
motto: ‘Dependably Dynamic.’
“Inthepast,ourspecialappeal
was always our strong balance
sheet, financial strength, bank
network and increasing deposi-
tory. What we have going for us
now, like other banks that have
mergedandthathavethesizeand
reach,isthatwehaveaverystrong
brand,” states CEO Jacob
Ajekigbe,whoaddsthatthebank
launched its new logo in 2004.
“So our brand, which is com-
prisedoftheservices,theculture
andthecustomerserviceweren-
der,isofaverystrongbank.Then
there is the issue of corporate
governance.FirstBankisknown
forgoodcorporateculture,which
also impacts positively on the
brand.Inaddition,wehavecom-
petitivestrengthinthenumberof
branches we offer.”
One of the most pioneering
banks in the country, First Bank
waschosenfortheGlobalFinance
awardsonthecriteriaofitsgrowth,
strategic relationships, customer
service, competitive pricing and
innovative products.At the heart
of the bank’s ‘Dependably Dy-
namic’brandisanopenpledgeto
continuouslyinnovate
and adapt to market
trends,whileretaining
its tradition of excel-
lence and prestige. In
2002,thebankwasthe
first in the country to
includecorporategov-
ernance in all its operations, at a
timewhenthatlevelofdisclosure
was unheard of in the Nigerian
bankingsector.Thisyear,thebank
unveiled a suite of 15 new con-
sumerproductsunderthenameU-
First, aimed at tapping into some
of the opportunies in consumer
finance in the country.
2006 has also seen the bank
commenceintegratedBureauxde
Change (BDC) operations in line
with changing legislation in the
sectorandincreasingliberalization.
TheBDCwillallowcustomersto
have access to foreign exchange
inallthemajorcurrenciesaswell
as the ability to perform overseas
transactions. With its successful
post-consolidation integration
processnowcompleted,thebank
can now deliver on-line real time
servicesthatwillbein-
valuable in the opera-
tion of the BDC win-
dows.
Another initiative
implementedthisyear
is First Bank’s part-
nership with Ecobank
TransnationalIncorporated,apan-
WestAfricanbankinggroup.The
merger will result in the largest
banking group in West and Cen-
tral Africa with a presence in 13
sub-regional countries, and also
one of the largest inAfrica. “Our
first attempt to enter WestAfrica
was in 1982 when we partnered
with another bank,” comments
Mr. Ajekigbe, adding that when
thisbanklaterbegantoshowsigns
of distress, First Bank attempted
anunsuccessfultakeoverinorder
to try to save it.
“Whenthatfailedwelookedat
our options and narrowed them
down to two – one was to partner
withanotherexistingbank,which
iswhywearetalkingtoEcobank.
The other option would be to go
it alone,” explains Mr. Ajekigbe.
“Either eventually invloves ac-
quiring another bank, but we still
believewecandothatinaddition
to our plans with Ecobank.”
On a more general level, Mr.
Ajekigbe believes that things
are on an upswing in Nigeria,
and that the government is tak-
ing positive steps to boost the
economy and move forward.
“Reforms are taking place at
the moment in Nigeria, and they
are working.” he says. “What
happened in the banking sector
took a lot of guts on the part of
government. In addition, the
process of securing the debt re-
lief should be commended.
There are lots of things hap-
pening that must be commend-
ed so that we can do better.”
‘Reforms are
taking place in
Nigeria at the
moment,
and they are
working’
Nigeria’s most
profitable financial
institution is
pioneering foreign
exchange services and
expanding its
consumer-based
products
Leading Nigeria’s financial sector from
the front and opening pan-African ties
FIRST BANK FIRST BANK INTERVIEW
‘We were a perfect fit
for the reform agenda’
I FIRST BANK CEO Jacob
AjekigbespeaksabouttheCen-
tralBank’sconsolidationpolicies
in the Nigerian banking sector,
and how the country’s number
one financial institution, First
Bank,hassuccessfullydealtwith
these changes.
This is an exciting time in the
Nigerian banking industry.
What is your perspective on
the changes in the industry
and has the Central Bank’s
recapitalization policy af-
fected you?
I would say that we at First
Bank had a vision
before[Governorof
the Central Bank]
ProfessorSoludoan-
nounced his pro-
gram.Wehadacor-
porate strategy in
place to grow our
balancesheettoaboutN1.3tril-
lion($10.1billion)by2008.We
also wanted to grow our branch
network to about 500 by March
2008,andwehadalreadythought
that we could not achieve this
alone. We had previously con-
cluded that we needed to grow
inorganically.WhentheGover-
norannouncedthereformagen-
da, it was just a perfect fit.
How was First Bank posi-
tionedtodealwithcapitaliza-
tionrequirementsof$200mil-
lion at that point in time?
Wehadnocausetoworrybe-
cause we already had a capital-
izationofN38billion($300mil-
lion)bythetimehemadethean-
nouncement. But having said
that,wewerequietlyconcerned
that he might compel us to take
on some banks. Fortunately he
did not do that, and the process
hasbeenmarketdriventhrough-
out.Bankswerefreetopicktheir
partners, so there was no oblig-
ation from anybody.
Which criteria did you use in
choosing your partners?
We decided that we are go-
ing to look at three areas of
possibility. Firstly, we said
we were going to combine
with banks that would enable
us increase our branch net-
work, so we were targeting
banks with a minimum of 50
branches. Secondly, we want-
ed to combine with banks that
would enhance our invest-
ment banking scheme. Third-
ly, we were looking at the
Delta sub-region, and we
wanted to merge with a bank
that had interests in
that region. When
we took a serious
look at the market,
however, most of
the banks did not
meet these criteria,
and those that did
had already made a decision
of their own and were look-
ing for their own partners. So
at the end of the day we took
only two banks – our own
merchant bank in which we
already held an 80% securi-
ty holding, and MBC Inter-
national Bank.
JACOBS M. AJEKIGBE
CEO of First Bank
‘People worked
over Christmas
so we were able
to rebrand MBC
branches from
day one’
Established in 1894, First Bank is today the highest capitalized company on the Nigerian Stock Exchange.

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