This country profile was published in November 2010 in our annual 'Africa in 2011' issue. The next edition, 'Africa in 2012' will be on sale in November 2011.

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Tension rise ahead of polls 

The car bombs that marred Nigeria’s 50th anniversary celebrations in Abuja on ­?1 October 2010 were a vivid reminder of some of the contested issues the country faces. The bombings heightened a sense of foreboding, happening as they did at a time of uncertainty over the country’s management over the next several years.

?Along with the contest in the upcoming elections, rebel groups in the Niger Delta and the far north are mobilising again. Powerful politicians grouped in the ruling People’s Democratic Party (PDP) face the challenge of coming up with a consensus candidate following the controversial opening bid made in September 2010 by President Goodluck Jonathan.

?Several heavyweights also hoped for the party’s presidential nomination, among them former military ruler General Ibrahim Badamasi Babangida, former security chief General Aliyu Mohammed ?Gusau, former Vice-President Atiku Abubakar and Kwara ­State governor Bukola Saraki. The most likely showdown within the ruling party will be between one of these prominent northerners and Jonathan himself.?

The struggle for the top ?office could be prolonged if one of the losers felt sufficiently unloved by the PDP to abandon it for another party, as Atiku did in 2007. The principal procedural dispute within the PDP has been over the practice of ‘zoning’, which northerners have interpreted to mean that 2011 is still ‘the north’s turn’, as it was in 2007 when the late President Umaru Musa Yar’Adua stepped in the shoes of his southern predecessor, Olusegun Obasanjo, who had served two terms.

?But as the southerner on the Yar’Adua ticket in 2007, Jonathan can argue that he represents the continuation of that presidency and has yet to finish its work. His case is helped by his relative dynamism, especially after the agonisingly slow pace of life under Yar’Adua, who died from an illness that was already apparent when he first took office. The benefits of incumbency are always strong, and the Jonathan camp seems confident that it has already secured the support of the majority of PDP state governors.

?If the most important achievement of the Yar’Adua years was the ceasefire in the Niger Delta, Jonathan appears to be the man best able to keep the peace in the oil-producing region. ? 

On the reform of the oil sector and the improvement of the dire electric-power situation, progress has been halting. And on the overall quality of governance, the PDP’s rivals are likely to make a lot of noise in their campaigns. The debates, with the participation of candidates like General Muhammadu Buhari, Wole Soyinka and Nuhu Ribadu, promise to be lively. The wide field should count in President Jonathan’s favour, should he survive the primaries.?

The new Independent National Electoral Commission (Inec) boss, Attahiru Jega, has the challenge of ensuring that the 2011 elections are more credible than those of 2007, when fraud and misconduct were apparent at every level. Despite the Inec’s insufficient budget of $569m and the postponement of the polls until April 2011 (rather than January as previously planned), the logistics are daunting, especially cleaning up the register of around 70 million electors and ensuring the absence of political influence at the state level, where elections are won and lost in Nigeria.

?If things go wrong in the electoral process or there are serious disputes over the results, there is an outside possibility of intervention by military officers in the service of disgruntled ­politicians. For now, the signs are broadly positive for the country to settle on an acceptable result. ?

An open and combative election could help build on the cumulative democratic gains made since Nigeria was freed from military rule in 1999. Weak and corruptible the politicians may have been, but coup-makers would no longer be welcomed. The points of social and religious friction, especially those in the Delta, the Middle Belt and the northeast (where there has been a rise of Islamic extremism), can always become inflamed again, but it would not be in the military’s interests to aggravate these kinds of tensions.?

The Nigerian economy has shown some resilience since calm returned to the oil-producing region and the government’s rescue of several threatened banks in 2009. The real GDP growth rate, which fell to below 5% in 2009, is forecast by the IMF at above 7% for 2010 and 2011.

?Oil output has been rising steadily, reaching an average of 2.2m barrels per day (bpd) in October 2010, far above ?Nigeria’s quota of 1.67m bpd authorised by the Organisation of Petroleum Exporting Countries (OPEC). Several billion-dollar offshore developments should push national production capacity above 3m bpd in the year ahead, despite oil company fears that the Petroleum Industry Bill, which would impose more rigorous terms for international companies, will prove a deterrent to further expansion.?

There are dangers of slippage in economic management during the lead-up to the election and in its aftermath. Analysts are particularly concerned that there could be a reduction in ?essential capital expenditure which drives investment and job creation, and that capital budgets have not been fully spent.?

Further grand visions for the economy have been spelled out under the leadership of finance minister Olusegun Aganga, a former Goldman Sachs executive. He unveiled the sale of a $500m Eurobond in September, to be managed by Barclays Capital and Lagos-based FBN Capital, partly to serve as a benchmark so that local companies can price their bonds accordingly. The government will use the funds to develop infrastructure and reduce dependence on oil exports. Aganga has also resolved to ensure that the modalities of a sovereign wealth fund are established before the elections.

?Central bank governor Sanusi Lamido Sanusi has stoutly defended his 2009 bank reforms against the criticisms of his predecessor, Chukwuma Soludo. He noted that as a result of weak regulation and supervision, the banking system had lost 66% of its capital through margin lending and exposure to fuel imports, and that reforms to the financial system were long overdue. He has also supported the unlocking of N400bn ($2.6bn) to bolster investments in electricity generation, pointing out that funds of this magnitude should be borrowed locally to avoid exchange-rate risks.?

With the support of World Bank credit, the country was able to maintain confidence in its financial markets, although its sovereign rating slipped a notch to B-. Credit to the real sector increased following the July 2009 crisis as eight banks were recapitalised. ?

The financial sector is still working towards adopting international financial reporting standards. The jailing of former Oceanic Bank CEO Cecilia Ibru in October 2010 and the surrender of assets worth $1.2bn was perhaps the most important signal of cultural change.

 

Playing it tough on oil-sector reform

Oil minister Diezani Alison-Madueke may be the first-ever female minister to sit in the councils of OPEC, but she is not someone to be intimidated by male chauvinism. She has become used to playing tough oil politics in her battle with reluctant legislators to pass the Petroleum Industry Bill, which is intended to be the cornerstone for a new era of investment across Nigeria’s energy sector. She has also had to cajole the world’s biggest oil companies, not to mention facing down militants both in the creeks of the Niger Delta and the oil-workers’ unions.?

Shell and the other oil majors have proved the toughest of all to win over. They claim that the proposed changes would increase taxes and royalties to a point that it would be unprofitable to invest in deepwater fields. The fact that Alison-Madueke previously worked for Shell also draws sharp criticism from activists who want the Niger Delta communities to have a greater stake in oil operations. The search for a compromise now includes a plan to give communities a 10% stake in oil and gas investments. Perhaps a deal can be reached after all.

 

 

 

Nigeria's Top Companies

 

Rank 09	Rank 08	Company name	Country	Sector	Turnover (Thds $)	Turnover change	Net profits
35	41	MTN NIGERIA	NIGERIA	TELECOMS	3334102.7	11.21%	0
47	76	OANDO	NIGERIA	PETROL. SERVICES	2406148.38	60.22%	59143.53
77	101	ZAIN NIGERIA	NIGERIA	TELECOMS	1643700	40.26%	20500
93	99	TOTAL NIGERIA	NIGERIA	PETROLEUM	1257588.6	6.19%	31191.6
100	131	AFRICAN PETROLEUM	NIGERIA	PETROLEUM	1152635.96	31.02%	36175.17
111	119	NIGERIAN BREWERIES	NIGERIA	BEVERAGES	1031180.12	7.01%	182.19
129	127	FLOUR MILLS NIGERIA	NIGERIA	AGRIBUSINESS	904988.83	-0.61%	45107.31
145	166	JULIUS BERGER NIGERIA	NIGERIA	CONSTRUCTION	808344.49	18.55%	17779.21
152	154	CONOIL*	NIGERIA	PETROL. SERVICES	748881.68	-	22359.44
196	193	PZ CUSSONS NIGERIA	NIGERIA	PHARMACEUTICALS	574024.69	1.41%	37784.37
197	161	DANGOTE SUGAR REFINERY	NIGERIA	DIVERSIFIED	571876.72	-17.77%	155043.52
198	190	NIGERIAN BOTTLING CO.	NIGERIA	BEVERAGES	567687.12	-3.93%	15461.11
217	203	GUINNESS NIGERIA	NIGERIA	BEVERAGES	490367.4	-8.67%	84075.54
226	218	MOBIL OIL NIGERIA	NIGERIA	PETROLEUM	473119.86	0.60%	12178.9
258	259	AFRICAN REINSURANCE CORP.	NIGERIA	INSURANCE	393463	6.48%	20406
268	332	UAC OF NIGERIA	NIGERIA	CONSTRUCTION	379183.52	39.69%	48127.22
277	255	NESTLÉ NIGERIA	NIGERIA	AGRIBUSINESS	366799.04	-3.38%	59065.55
291	180	CHEVRON OIL CO. NIGERIA	NIGERIA	PETROL. SERVICES	345142.14	-44.89%	-1598.07
312	295	LAFARGE W. AFRICAN PORT. CEMENT CO.	NIGERIA	CONST. MATERIALS	306769.39	-2.97%	79247.93
319	322	DANGOTE FLOUR MILLS	NIGERIA	AGRIBUSINESS	299155.8	-	3981.18
324	314	GROUPE CFAO NIGERIA*	NIGERIA	DIVERSIFIED	295095.28	-	0
351	317	UNILEVER NIGERIA	NIGERIA	CHEMICALS	265128.6	-9.54%	18431.4
370	422	SOC. NIGÉRIENNE DE PROD. PÉTROLIERS	NIGER	PETROL. SERVICES	247611.51	35.11%	8660.93
373	-	STARCOMMS	NIGERIA	TELECOMS	244579.1	-	-56769.31
412	366	SEVEN-UP BOTTLING CO.	NIGERIA	AGRIBUSINESS	216724.91	-7.97%	11406.2
466	-	CADBURY NIGERIA	NIGERIA	AGRIBUSINESS	172262.7	-	-19849.2

2008 RESULTS IN THOUSANDS OF DOLLARS - *IN ITALICS 2007 RESULTS - ND: NO DATA

 

Nigeria's Top Banks

 

Rank 09	Rank 08	Company name	Country	TOTAL ASSETS	NET EARNINGS	CREDIT	DEPOSITS
12	21	ZENITH INTERNATIONAL BANK	NIGERIA	15193995	1314691	3878030	10078379
13	10	FIRST BANK OF NIGERIA	NIGERIA	14248280.35	1547436.54	5248674.33	8467498.58
15	11	INTERCONTINENTAL BANK *	NIGERIA	12005026.83	0	3754945.71	9115192.22
16	15	UNITED BANK FOR AFRICA	NIGERIA	11859833.2	890456	3173164	9451685.72
20	16	UNION BANK OF NIGERIA *	NIGERIA	9343443.03	637248.32	2019411.75	6130978.87
21	18	OCEANIC BANK INTERNATIONAL NIGERIA	NIGERIA	8834184	1334274	4173292	5920806
24	50	BANK PHB	NIGERIA	8145839	443516	2278709	5245668
30	26	DIAMOND BANK *	NIGERIA	7245906.9	0	0	3619073.1
32	31	GUARANTY TRUST BANK	NIGERIA	6827549.37	350023.69	2989949.92	3326512.56
36	13	ACCESS BANK NIGERIA	NIGERIA	5736022.04	427667.23	2940905.84	2875702.86
38	45	SKYE BANK	NIGERIA	5605329.01	246519.98	1734898.06	3546002.87
53	118	FIDELITY BANK	NIGERIA	3796014.49	157387.04	1624488.89	2683494.85
60	60	ECOBANK NIGERIA	NIGERIA	3093000	-	1112000	2232000
61	53	AFRIBANK NIGERIA *	NIGERIA	3037624.21	0	0	0
63	58	STANBIC IBTC CHARTERED BANK *	NIGERIA	2717168.53	195041.65	685223.29	615602.39
71	68	FIRST CITY MONUMENT BANK *	NIGERIA	2263842.02	82573.43	719101.54	1618286.96
84	92	STERLING BANK	NIGERIA	1771164.11	257334.55	474130.18	1254158.54
108	-	CITIBANK NIGERIA	NIGERIA	1116709.94	142272.52	413307.83	692137.73
152	143	FIRST SECURITIES DISCOUNT HOUSE *	NIGERIA	592710.25	0	0	0

Taken from the Top 200 Banks

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