The Nation Newspaper

Tag: Experts

  • Experts inspect science equipment

    Two science equipment experts, Prof. Abiodun Ogundaisi, a former Director, Central Science Laboratory, Obafemi Awolowo University, (OAU), Ile-Ife and Mr. Samuel Adisa, a retired Chief Technician and a staff at an event of the Bowen University, Iwo, Osun State, have visited the Adeyemi College of Education (ACE), Ondo to inspect the science equipment just acquired in the institution.

    The equipment installed in two of the rooms in the new Agricultural Science building, was procured through the Science and Technology Education Post-Basic (STEP-B) programme, which is supported by the World Bank.

    Ogundaisi said the duo was invited to offer professional advice on the requirements needed for setting up a good science laboratory.

    The Deputy Provost of the College, Dr Olufemi Olajuyigbe, accompanied by the College Librarian, Dr. Rotimi Egunjobi, commended the team for honouring the invitation and expressed appreciation on behalf of the Provost, Prof. Adeyemi Idowu.

     

  • Why naira is on decline, by experts

    Why naira is on decline, by experts

    Experts are blaming the current downward spiral of the Naira on high political patronage among other factors.

    The Naira, which is the second most-traded currency on the continent, fell 2.4% this year as the governor of Central Bank of Nigeria (CBN), Mallam Lamido Sanusi, warned of increasing demand for dollars for political patronage in the build-up to 2015 elections.

    Sanusi spoke of “non-imported related demand” for dollars due to “the build-up in political activities.”

    He added: “We should be able to maintain the naira within our target band. We’re committed to the stability of the exchange rate and we’ll not unless we’re forced to allow the naira to weaken.”

    An analyst at Asset & Resource Management, Wale Okunrinboye, said: “In the run-up to 2015, we’re going to see a lot of investors using that as an excuse to just exit the market.

    “Given the current state the ruling party’s in, there might be more spending next year ahead of the elections.”

    Echoing similar sentiments, Registrar/Chief Executive, Institute of Credit Administration (ICA), Dr. Chris Onalo, said the rise and fall of the naira are largely influenced by the domestic and international frontier markets.

    Onalo, an economist and credit expert, said: “The way the currency breathes is a function of domestic and international factors.

    “If the naira is breathing well, it means its value appreciate in comparison with other currency out there if it is doing badly too, it also means we are not getting things right.

    “Normally judicious use of money by exporters and importers is either demand is going high or demand is low. If you have a regime where monetary policy is stable, it will impact on the strength of the naira ultimately and vice versa.

    “If naira’s sudden a downward trend in terms of value is definitely interplay of political events, which may dampen spending enthusiasm of the spenders or the investors based on those volatility surrounding the climate of the country.”

    He added: “It is not just for the CBN to say we are pegging naira at this level because it hardly ever has control on the market forces that weigh in on the currency on the long run.

    “Fine, the CBN may have good intention to say look this should be the strength of the naira but it has no power to control the vagaries because the political class and their cohorts who largely bring in personal, party interest could send a negative impact to the Nigeria world.

    “If you are proposing a multi-billion investment you might want to place a hold on it because attention is being diverted from economic pursuits for the time being and that is not good for the economy.”

    While Onalo doesn’t consider the trend a misnomer, he however called for caution.

    “If the naira is down this week, it doesn’t mean it will remain so for all time. No. But again, we must be very careful not to sustain the vagaries that have allowed the naira to get weaker and weaker these past weeks.”

    He stressed that the vagaries responsible for the slide in the naira should not be allowed to persist, especially because political factors may undermine investors’ interest.

    The naira weakened to 163.9 against the dollar on September 10, its lowest since December 2011 based on closing prices and was at about 159.90 last Tuesday.

    The CBN has already tightened controls at twice-weekly auctions to manage the naira since October 2.

    Banks can now only buy dollars with proof of requests from customers and the reasons for the purchases, Lagos-based Forward Marketing Bureau de Change CEO Abubakar Mohammed said.

    “Elections tend to support a weakening of the local currency as the demand for dollars increases significantly,” said Morten Bugge, the Kolding, Denmark-based chief investment officer at Global Evolution, which manages $2bn and holds Nigerian debt.

    Higher currency market volatility risks hurting carry trades in the naira, where investors borrow cheaply in one country to invest in others where returns are higher.

    Nigeria’s main rate compares with a range of zero to 0.25% for the US and Switzerland and 0.5% for the euro region.

  • Why babies should not make babies, by experts

    Why babies should not make babies, by experts

    Determining the right age for a girl to marry is a topic that generates heat. It recently did at the National Assembly. Experts believe that girls, who marry before their early 20s, are five times likely to die during pregnancy or childbirth, or suffer from Vesico Vaginal Fistula (VVF), low birth weight and Utero-Vaginal Fistula (UVF), write OYEYEMI GBENGA-MUSTAPHA and WALE ADEPOJU

    In her life, nothing, perhaps, had been more shocking. She was not the only one stunned. Many who witnessed the discovery at the same time with her were also shocked. They all kept wondering how a woman could live for over 60 years with Vesico Vaginal Fistula (VVF) . Wife of Adamawa State Governor Dr Halima Nyako said she was alarmed by her discovery. Mrs. Nyako said: “It is unfortunate to find an aged woman living with VVF for the past 60-years in the state and the development is quite alarming.”

    She said records from the Ministry of Health shows that VVF infection is on the increase. Mrs. Nyako said the records also indicated that about 218 women in the state were infected with the disease last year.

    “Following the alarming infection rate of the disease, very soon the state government will establish VVF treatment centre in the state, ’’ she said.

    Commissioner for Health Mrs Lilian Ishaku said the government was concerned about the high rate of VVF infection.

    The Adamawa situation is just a fraction of the between 15,000 and 20,000 new cases of VVF , which the country records yearly, according to consultant surgeon, Dr Kess Valdek, at Gambo Sawaba General Hospital in Zaria, Kaduna State.

    Programme Manager, USAID Fistula Care Project in Nigeria Chief Iyeme Efem said more than 200,000 women in Nigeria are suffering from VVF.

    The VVF patients, according to Efem, represent about 40 per cent of cases of the scourge in the world.

    He told the News Agency of Nigeria (NAN) in Calabar, the Cross River State capital that the disturbing magnitude of VVF prevalence in the country made the Federal Government order care for 66,000 patients in 2013.

    “The prevalence of the scourge in Nigeria is worrisome and President Goodluck Jonathan has ordered that 66,000 persons living with VVF conditions should be given free repair surgery in 2013,’’ he said.

    Efem said a National Strategic Framework for the Elimination of Obstetric Fistula in Nigeria, covering 2011 to 2015 was currently in place, adding, however, that the President’s target might not be attained in 2013.

    He attributed his fear to lack of funds, saying that due to inadequate funding, USAID was only able to carry out repair surgeries on not more than 8, 000 patients in its centres across the country in 2012.

    “Federal Government’s budgetary provision for the care of VVF patients in 2011 and 2012 were N300 million and N250 million, respectively; but the money was not released and no one could account for it,’’ he said.

    He said the cost of repair surgery on a VVF patient was 250 dollars (about N39,000), adding that an additional N50,000 was required for the rehabilitation of the patient after surgery.

    He urged the relevant authorities to release all approved funds for the handling of the scourge.

    “It took us a lot of time and energy to convince the Federal Ministry of Health to provide and pursue budget for VVF treatment in the country.’’

    The USAID programme manager said dearth of professionals in the field was another drawback to meeting the target.

    “In Nigeria, we are still in dire need of trained medical personnel on VVF. Only a few Nigerian doctors and nurses have ventured into the treatment of VVF and this will affect the government’s programme in that area, this year.

    “Repairing VVF is time-consuming because the disease is often complicated. It means that only few sufferers can have their cases repaired in two weeks or a month, if the patient is not to suffer a relapse.’’

    One of the causes of VVF is early sexual intercourse, usually experienced by under-aged brides. The President, Paediatric Association of Nigeria (PAN), Prof Adebiyi Olowu, described early marriage as an abuse of the right of the child.

    Olowu said: “The medical consequences of girl-child marriage, which includes development of Vesico-Vaginal Fistula (VVF) and Utero-Vaginal Fistula (UVF), low birth weight baby delivery, birth asphyxia among others should strongly be a deterrent to this act that is universally condemnable. The United Nations and several other conventions to which Nigeria is a signatory affirms 18 years as the age of maturity. It is no surprise that the age of 18 years is also the age that adulthood begins and the age at which an individual is allowed to vote and permitted to drive and own bank account among others.”

    The association’s National Secretary, Dr Jerome Elusiyan said: “PAN expresses shock over this development and calls for the immediate reinstatement of the clause. The attention of the Paediatric Association of Nigeria (PAN) has been drawn to the clause in the new constitution proposal to the effect that the age of marriage which has been traditionally put at 18 years has been removed. It is totally wrong in all ramifications. Our association rejects that amendment to age.”

    Adjunct Professor of the University of Illinois at Chicago and Chief Medical Director, Medical Art Centre, Ikeja, Prof Oladapo Ashiru, said victims of early marriage risk damaging their uterus.

    He said: “The next issue has to do with the process of delivering the baby. There is a very high proportion of damage to the uterus and the vaginal as a result of the head of the baby compressing these structures while coming out because of the narrow under developed passage. This can result in a communication between the womb passage and the bladder called the Vesico-Vaginal Fistula and Utero-Vaginal Fistula as well as several other complications.”

    Ashiru said: “Globally, according to UNICEF, 36 per cent of women aged 20 to 24 were married or in a union, forced or consensual, before they had reached 18. Girls, who marry between the ages of 10 and 14, are five times as likely to die during pregnancy or childbirth as women in their early 20s. And an estimated 14 million girls between the ages of 15 and 19 give birth each year. They are twice more likely to die during pregnancy or childbirth than women in their 20s.

    “The facts also show that these children are denied any form of self-reliance. They are exposed to poor nutrition and inadequate health care. Even when the husband is wealthy, the stigma of marring a young child does not enable him to get good hospital for the young child thereby making use of traditional herbalist. Taken together one would suggest that on health grounds, early marriage is a very major problem and this is the view of the global population.”

    Consultant Obstetrician and Gynaecologist Dr Lateef Akinola also shared a similar view. He said: “The implications of the girl-child marriage are many. Girls married off early soon after menarche about age 9 to 11 years are deprived of education.

    “They will go into forced marriages and child bearing at this tender early age with lack of education. With poor earning power they will be dependent on their spouse or families. They are poor and thus faced with poor nutrition, serious health risks, and curtailed access to healthcare such as antenatal care in pregnancy. Lack of education and decent employment further brings little or no income to them and family.

    “And when pregnant, often they are unaware of the physiological consequences of pregnancy and what care needed and how to access such care. If they live far away from town or hospitals with little or no money or easy access to transport, they therefore end up having little or no antenatal care. Some of them will eventually be delivered by traditional birth attendants (TBA) in their rural or local communities, who lack good knowledge of care of women in labour and cannot carry out needed obstetric interventions like assisted vaginal births or emergency caesarean section (CS) when necessary. These young girls are thus prone to having prolonged labour lasting several days with resultant obstetric fistula involving holes connecting the vagina, the urinary bladder or the rectum; and their consequences.”

    The consultant added that sexual intercourse by an underage has other implications: “The consequences are physical, social and economic. Physical health consequences leakage of urine, faeces, tissue infection, bad smelly vaginal discharge and odour around them. Severe debilitating pelvic and or systematic infections occurs frequently as result of this. They are most times confined to their houses consequently and wearing permanent sanitary towels. Those without money to buy the towels leak urine and faeces wherever they go, going about with the stench of urine and faeces. They are thus despised by family, husbands and friends. They live in isolation with its psychological effects.

    “Eventually they become outcast from society and live a reclusive lives. The risks here are early deaths from disease, attempted suicide and suicide and malnutrition. Thus a wasted live and opportunity.”

    On best way to prevent these sad turn of events of girl-child marriage, Dr Akinola said: “Societal awareness of the sad implications of short or long term consequences of forced girl/child marriage should be highlighted. There should be free access to compulsory education at such early age. Health education should be taught. Treatment should be free for those already affected, with proper physical therapy and socioeconomic support, that is pre and post treatment.

    “Support groups and VVF health champions to form the bastion of needed pillar of support for those already afflicted. There should be laws to discourage and ban girl-child marriage and such forced practices.”

    Another Consultant Obstetrics and Gynaecologist, Dr Ayodeji Oluwole, said early sexual intercourse for an under-aged could lead to Vesico Vaginal Fistula (VVF) or Recto Vaginal Fistula (RVF).

    “Vesico Vaginal Fistula (VVF) or Recto Vaginal Fistula (RVF) is caused by ‘unrelieved’ obstructed labour. It is common in the North and Southsouth of the country. VVF results from the breakdown in the tissue between the vaginal wall and the bladder or rectum caused by unrelieved obstructed labour. It can be prevented by allowing expectant mothers have a caesarian section (C and S) than having their babies through normal deliveries.”

    But, Dr Halliru Idris, a VVF surgeon in Katsina State, said early marriage does not cause VVF once the woman attends ante-natal care.

    Idris said: “Early marriage does not cause VVF, provided that a pregnant woman attends ante-natal care. Majority of women don’t go for anti-natal care.

    “There is need for women to attend ante-natal care as part of the measures to prevent VVF and reduce the maternal and child mortality.

    “It is often caused by childbirth (in which case it is known as an obstetric fistula), when a prolonged labour presses the unborn child tightly against the pelvis, cutting off blood flow to the vesicovaginal wall.”

  • Experts back CBN directives on off-shore branches

    The decision of the Central Bank of Nigeria (CBN) to re-strain banks from using local funds to finance their off-shore subsidiaries will help in protecting depositors, experts have said.

    The former director, Banking Supervision, CBN, Mr Titus Okunronmu, said the apex bank stopped banks against taking such funds abroad for investments to protect depositors.

    He said depositors had lost huge funds to the liquidation of banks, arguing that the apex bank does not want a recurrence. He said the ideal thing is for banks to make money where they are operating and not to repatriate funds generated locally to international markets.

    The moment Nigerian banks start complying with the corporate governance issues of their host countries, they would survive offshore, he said.

    According to him, depositors are crucial to the growth of the industry and any attempt to gamble with their money would have dire consequences.

    He said it would amount to uncalculated risks if banks use local funds to finance foreign subsidiaries, stressing that CBN has taken a good decision. He said banks have demonstrated capacity to succeed by taking some proactive measures, adding that such efforts would improve the economy.

    Former President, Association of National Accountants of Nigeria (ANAN) Dr Samuel Nzekwe cautioned banks against flouting rules relating to raising funds at the international market.

    He said if banks got cheap funds, the tendency to mismanage the cash would be, adding that depositors’ fund are cheap money because banks do not pay special interest on them. He advised them to raise money for investments in countries where they operate subsidiaries.

    Chief Executive Officer, Dunn Loren Merrifield, Mr Sonnie Ayere, said the CBN directive was to prevent banks from using local funds to fund offshore operations.

    “While we cannot blame CBN for warning banks against using the local funds to finance offshore subsidiaries, it is pertinent that the apex bank monitor the banks well to avoid crises,” he said.

    He added: “What CBN is saying is that banks should CBN raise the money in international markets to finance their subsidiaries. Raising capital is a task in the country. If for instance, bank A or B has taken most of its capital abroad, this implies that the bank must raise fresh capital to make its balance sheets look good. To avoid immediate and future problem, CBN has directly puts a safety valve on depositor’s money by issuing the directive.”

     

  • Experts flay creation of another regulatory body  

    Experts in the aviation industry have picked holes in some sections of the Nigeria Civil Aviation Policy ( NCAP), including the proposed creation of an economic regulatory body for the sector other than the Nigeria Civil Aviation Authority (NCAA).

    They insisted that taking over the statutory function of the NCAA would bring about infraction on air safety as experience has shown in other countries, including the United Kingdom.

    The experts are Captain Dung Pam, chairman, Nigerian Aviation Safety a initiative ( NASI), and Mr Olumide Ohunayo, an aviation analyst and Head of Strategy, Zenith Travels.

    They spoke in separate interviews in Lagos.

    Capt Pam argued that withdrawing the statutory economic regulation functions of the aviation sector from the NCAA, and giving to another autonomous body would create communication gaps between the economic and safety components of the industry.

    He said: “The danger with this proposal is that it will introduce a communication chasm between safety and economic regulation as both bodies may tend to display their autonomy. This will make prompt coordinated remedial action almost impossible.

    “The outcome will dilute the effectiveness of the NCAA in performing its statutory functions with regards to aviation safety, consumer protection and anti-trust matters.”

    Corroborating Capt Pam, Ohunayo said some aspects of the policy need to be reviewed and taht an independent search and rescue agency with offices in the six geo-political zones would only over burden the system with attendant cost implication.

    “Why do we want to protect a new group of private investors at the expense of investors using the banner of a national carrier? The government is starting another flag carrier not national, so the carrier should be free to compete rather than seek government protection?” he asked.

     

  • Use experts in key posts, Sanusi tells banks

    Use experts in key posts, Sanusi tells banks

    Central Bank of Nigeria (CBN) Governor Lamido Sanusi has advised banks to use only qualified and competent hands in key positions.

    Speaking at the annual risk management conference in Lagos, he said banks should start assessing their staff in key roles, especially risk managers, auditors, compliance officers, treasurers, chief finance officers and others in controlled functions in line with the CBN’s competency framework.

    The framework shows that the recent global financial crisis exposed the inadequacy of skills and the dearth of executive capacity in the banking industry.

    The skill gap, it explained, manifested in, among others, the lack of indepth knowledge of core banking functions and poor understanding of basic banking operations; poor understanding of banking regulations and poor risk management and corporate governance practices.

    Sanusi said the CBN would soon send out questionnaires to banks for information on their staff competency.

    He advised the banks to begin to think of hiring new managers should the current ones fall below the CBN requirement. The CBN boss said this has become exigent following the regulator’s commitment to sustain the stability of Nigeria financial system.

    He said there is need to assess skills, qualifications, experience and competencies of staff currently occupying controlled functions in banks. This, in essence, implies that continuous strengthening of intellectual resources and capabilities must be undertaken to create a pool of talented and high calibre professionals in the banking industry.

    In a circular tagged: “Assessment of competencies in the Nigerian banking industry” signed by Y.B Duniya for Director, Financial Policy and Regulation, the CBN said the exercise would enable the Bankers’ Committee identify at the preliminary stages, gaps that would impede the effective implementation of the Competency Framework for the banking industry being appraised by the apex bank.

    It said the list of controlled functions was not exhaustive as other important roles and responsibilities may be added.

    The framework is expected to address the competency challenges in the industry, explore growth opportunities and facilitate improvement in the quality of human capital.

    “Under the framework, successful banks will be those that distinguish themselves by according high priority to continuous enhancement of human capital and lifelong learning,” the apex bank had said.

    The apex bank also said it will maintain a central database for approved persons. Banks are expected to update the database with details of approved persons and access it as part of their due diligence before the appointment of such persons.

    The framework leverages on the practices in other jurisdictions, such as Singapore, Hong Kong, Malaysia and Dubai, which provide a useful guide and template for the banking industry.

     

  • Experts advocate breastfeeding

    Men have been warned to leave their wives breasts for their babies whenever the women are breastf-eeding.

    An associate professor from the University of Ghana, Legon, Prof. Matilda Steiner Asiedu, spoke yesterday at the International Institute of Tropical Agriculture (IITA) in Ibadan, the Oyo State capital, while delivering a lecture on the importance of breastfeeding at the second edition of the CWAR Advanced Nutrition Programme for Anglophone Countries in Central and West Africa.

    She said a man’s role in the breastfeeding process is to ensure that milk was always available for the baby, instead of sucking it up.

    Prof. Asiedu said breast milk is superior to cow milk, adding that it is readily available, easily digestible, free and boosts immunity.

    She said: “Cow milk is best for baby cows and human breast milk is best for human babies.”

    The scholar said breastfeeding is not only beneficial to the baby, but reduces the risk of postpartum depression and helps the mother to regain weight after pregnancy.

    She said exclusive breastfeeding has a contraceptive effect because it delays ovulation.

    Encouraging women to use less of substitutes, such as cow milk, except for replacement purpose, Prof. Asiedu urged politicians, health workers, social workers and husbands to be part of the breastfeeding campaign.

    She said: “In Ghana, we are using volunteers in communities to promote health, nutrition and exclusive breastfeeding.”

    The event was organised by the Nestle Nutrition Institute Africa (NNIA), a multidisciplinary organisation dedicated to nutrition.

    Prof. James Kweku Renner, an Executive NNIA Board member, said neonatal resuscitation was part of the workshop because malnutrition and asphyxia neonatorum are major contributors to infant mortality.

    Participants were drawn from Anglophone West African countries, including Ghana, Sierra Leone, Cameroun and The Gambia.

  • Experts flay new aviation regulation policy

    Aviation experts have criticised the new policy by the Nigeria Civil Aviation Policy ( NCAP), especially the proposed creation of a regulator for the aviation sector.

    According to experts, giving the functions of the Nigeria Civil Aviation Authority (NCAA) to another body could bring about some infraction on air safety as experience has shown in other countries, including the United Kingdom.

    The experts are a pilot, Captain Dung Pam, who is Chairman, Nigerian Aviation Safety a initiative (NASI), and Mr Olumide Ohunayo, an aviation analyst, Head of Strategy, Zenith Travels.They spoke in separate interviews in Lagos.

    Capt Pam said withdrawing the functions of NCAA, and giving them to another body could lead a communication gap in the industry.

    “The outcome will dilute the effectiveness of the NCAA in performing its statutory functions with regards to aviation safety, consumer protection and anti-trust matters.

    “The prevalence of issues, such as abuse of market dominance, predatory pricing, unreasonable discrimination between classes of users, allegations of monumental fraud, in FAAN, NAMA, NIMET, are clear indications that the industry in Nigeria is suffering the consequences of loss of economic efficiency” he said.

    Also, Ohunayo said: ”Some aspects of the policy need to be reviewed, an independent search and rescue agency with offices in the six geo-political zones will only over burden the system with attendant cost implication.

    “Why do we want to protect a new group of private investors at the expense of investors using the banner of a national carrier?

    “The government is starting another flag carrier not national, so the carrier should be free to compete rather than seek government protection.

    “ The same protection Virgin Nigeria signed with the government only to repudiate to the consternation of the investors.

    “Also, the Fly Nigeria Act that would have aided our commercial airlines was again bypassed by the policy, a phased implementation starting with charter flights and some regional routes would have been appropriate.”

  • Stock market primed for profit-taking,say experts

    The stock market may witness pronounced profit-taking transactions in the days ahead as investors seek to cash in on substantial capital gains. The profit-taking transactions may lead to price correction, an inference to possible decline in market benchmark indices.

    The market opened this week with average year-to-date return of 28.25 per cent but several equities carry three-digit returns.

    Analysts in latest reviews of the market outlook said several market-determining equities garnered substantial capital gains to entice speculative investors to sell their holdings.

    They, however, remained optimistic about the medium to long-term outlook of the market with most pundits projecting continued rally through the second half.

    Managing Director, Financial Derivatives Company (FDC) Limited, Mr Bismarck Rewane, said the market outlook suggests stock market correction and may begin with profit-taking transactions.

    According to him, while portfolio investors remain long in the equity market, bargain-hunting retail investors have induced price volatility, which may further become pronounced as investors monetise recent capital gains.

    Analysts at FSDH Merchant Bank also indicated possibility of price correction, citing the prices in the market.

    Rewane said expected price correction may however, provide entry opportunity for portfolio investors as the market medium to long-term outlook remains strong.

    “Our forecast for the market to hit the 38,000 points by end of the year remains intact provided there are no exogenous risks,” Rewane said.

    He said large-cap stocks would continue to be market drivers as investors prefer the safety offered by the easily predictable sectoral leaders to the extreme volatility of penny and mi-cap stocks.

    He noted that though there had been echoes of possibility of an asset bubble, the Nigerian equity market still has substantial intrinsic values, pointing out that average dividend yield of selected listed companies in Nigeria is still higher than frontier market peers at 4.1 per cent.

    According to him, the first quarter results released so showed that banks and building materials, which have domineering influence on the market, would continue to outperform expectations.

    He noted that though consumer goods sector may struggle with flat sales and tough operating environment, future earnings power of the companies remain strong.

     

  • Poor returns may mar $100m Diaspora bond, say experts

    Poor returns may mar $100m Diaspora bond, say experts

    The proposed $100million Diaspora bond by the Federal Government may be marred by poor returns, experts at FBN Capital have said.

    Billed as part of an ambitious plan to get the Nigerian Diaspora to invest in the country’s infrastructure, the measure is aimed at tapping into the healthy remittance market. There are about two million Nigerians in the United Kingdom (UK) and remittances from the Diaspora worldwide are thought to make up about three per cent of Nigeria’s Gross Domestic Product (GDP).

    Finance Minster and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala, had told reporters at the recently concluded World Bank/ International Monetary Fund (IMF) Meetings in Washington D.C, United States, that the Diaspora bond will be concluded in December.

    But FBN Capital – a research and investment firm it latest report entitled: Untapped potential of remittances, noted that the main challenge to the Diaspora bond would be poor returns on such investment.

    “The FGN plans to follow its forthcoming US$1billion Eurobond with an issue for the Nigerian Diaspora. It has a modest US$100million in mind and argues that it does not have the track record in this field of, say, Israel or India.

    “In our view the main challenge will be not the unfamiliarity of the product but the poor return: the first Eurobond yields just above four per cent and the shrewd investor will do better in other asset classes.

    “The FGN and also the state governments could tap the Diaspora more often and more substantially for their financing needs,” the report said.

    Latest official data by the Central Bank of Nigeria (CBN) showed that 91-day Nigerian Treasury Bills carry a yield of 10.35 per cent while three-month tenor deposit rate of banks stand at 7.99 per cent. Average inter-bank call rate stands at 10.68 per cent.

    The Nation’s market intelligence shows that bonds have coupons of between four per cent and 16 per cent, indicating the yield spread within the fixed-income segment.With inflation rate at 8.6 per cent, the low coupons indicate marginal adjusted returns on fixed-income securities.

    The average year-to-date return of 25.04 per cent for the equity market underlines the low return in the fixed-income market.

    The thinking of the government is that the huge savings kept by Nigerians resident abroad could be invested in the country through bonds for infrastructural development. According to the FBN Capital report, remittances to Nigeria were the second largest foreign exchange inflow last year after crude petroleum.

    A recent World Bank report had stated that Nigerians and other residents in the country received a total of N33.6bilion or $21billion last year in remittances from their relatives, friends and business associates abroad.

    The report noted that Nigeria accounted for 67 per cent of the $31billion total inflows to Sub-Saharan Africa last year, followed by Senegal and Kenya.

    Noting that remittance flows to Sub-Saharan Africa have been recovering from the contraction associated with the global financial crisis, the report said growth has been modest.

    The World Bank said: “In 2012, the region is estimated to have received about $31 billion in remittances, only about one per cent increase over 2011. Nigeria is by far the largest recipient of remittances in the region, accounting for about 67 percent of the inflows to the region in 2012, followed by Senegal and Kenya. Zero growth in flows to Nigeria in 2012 is partly attributable to the feeble labour market recovery of its major remittance source countries in Europe, the UK in particular. Remittance flows to Nigeria and the rest of the region are expected to grow significantly in the coming years to reach about $39 billion in 2015.”

    The report put stated that officially recorded remittance flows to developing countries grew by 5.3 per cent to reach an estimated $401 billion in 2012. It added that remittances to developing countries are expected to grow by an annual average of 8.8 per cent for the next three years and are forecast to reach $515 billion in 2015.