E-Report! - UNBELIEVABLE: I Have 168 Kids, Says African China

And we thought Tuface was the champ.

This may sound incredible but popular music artiste, Chinagorom Onuoha, better known as African China, insists he had 168 kids from different women before he got married.

Speaking with P.M.NEWS Sunday in FESTAC Town, Lagos, western Nigeria, Onuoha disclosed that he is not a sex-freak but he was unable to turn down sexual advances from his teeming female fans.

Onuoha, who sometime ago was involved in a sex scandal in the United Kingdom, said he decided to accept the pregnancies because he did not want the ladies to abort the pregnancies.

“It is not that I enjoy running after the opposite sex, but as a star, I always find them around me and there is no way I can just chase them away. As a matter of fact, I have an option of telling the ladies to abort the pregnancies but I know the Holy Bible is against such.”

Raised in the slum of Ajegunle, Onuoha said he wonders why people castigated hip hop artiste, Innocent Idibia, better known as Tuface, for having children from different women.

With the sex scandal still haunting him, Onuoha warned people who may want to bring his hard earned reputation into disrepute to be prepared for war.

“My brother, some people may want to use the sex scandal against me but they do not know that they may incur the wrath of the law because I have been certified clean by a competent law court in the United Kingdom. Such people would pay through their nose,” he said.

Commenting on how he is being perceived by his fans for fathering 168 kids, he noted that he bears no grudge over their reactions as he owes them no apology.

On his sudden disappearance from the music scene, he said he didn’t go off the music circuit but had been in the studio working on a new album that is about to be released.

According to him, “I’m not finished yet, I am still in the music industry. My fans who want to see more of me can come to Ibiza Nite Club where I anchor a show.”

He urged his fans to be prepared for his latest album as it would rock their world and the entire music industry.

“It is not as if I’m boasting but I have dedicated so much of my time and energy to it because I have already set a standard and that standard will not drop but will continue to rise because I am born to sing and entertain people.”

—Adebobola Alawode

E-Report! - Woman quits her job via youtube video.

Woman quits her job via youtube video. Watch.

Watch her boss's response.

Please don't try this at work!

Nigeria's ruling party, Things fall apart.

Nigeria's ruling party

Things fall apart

The ruling party and the country’s president face their greatest-ever challenge

GOODLUCK JONATHAN, Nigeria’s president, was visibly stunned when a former vice-president, Atiku Abubakar, and seven state governors recently walked out of a convention of the ruling People’s Democratic Party (PDP) in open rebellion against his leadership. The party has won every election since it took power after the end of military rule in 1998. But it is bitterly divided over whether Mr Jonathan (pictured above) should run for a second full term in 2015. As a result, there is a chance—most analysts are wary of putting it more firmly—that, whether or not Mr Jonathan stays at its head, the PDP’s mighty cash-laden machine may lose power. And that could turn Nigerian politics upside down.

Mr Abubakar and the rebel governors have broken away to declare a “new PDP”. “We have taken it upon ourselves to rescue the party from its dictatorial leadership,” says Kawu Baraje, the new outfit’s chairman, who has accused Mr Jonathan and the rump party’s chairman, Bamanga Tukur, of allowing “political repression, restrictions of freedom of association and arbitrary suspension of members”.

The breakaway faction has a distinctly northern flavour. Six of the seven rebel governors are from the north or the middle belt, exposing faultlines that have widened under Mr Jonathan, a southerner from the oil-rich Niger Delta. Only one rebel governor, Rotimi Amaechi, from Rivers state, is a southerner. Mr Amaechi, who is said to hanker after the vice-presidency in 2015, has been embroiled in an acrimonious row with Mr Jonathan and his wife. 

In May Mr Amaechi was voted in as chairman of the powerful Nigeria Governors’ Forum, beating the president’s favoured candidate, Jonah Jang of Plateau state—an embarrassing defeat for Mr Jonathan. The forum is divided, with 19 governors backing the rebel governor and the other 16 sticking with Mr Jang. “I am concerned for my safety,” says Mr Amaechi, who has apparently taken to driving alone, with non-government number plates.

On September 1st 57 PDP members of the 360-seat House of Representatives, the federal National Assembly’s lower chamber, pledged their loyalty to the rebel PDP; 22 of the 50 sitting PDP members in the 109-strong Senate then followed suit. Several others are said to waver. The rebel caucus, known as the G7, may be able to swing the votes of delegates from their states at the PDP primary election next year, when the party is due to choose its presidential and vice-presidential candidates. The G7 includes the governors of Kano and Rivers states, two of the most populous. Unless Mr Jonathan squelches the party rebellion, he could lose the primary.

In an effort to regain the initiative, the president has sacked nine of his ministers. It is no coincidence that four are from states whose governors have defected, while another two were originally nominated by Olusegun Obasanjo, a still powerful former president (1999-2007), who helped Mr Jonathan into the top job but has more recently been making trouble for him. A PDP insider says there is a growing mood of paranoia in the party as leading figures seek to dodge Mr Jonathan’s axe.

Mr Jonathan may now put close allies in ministerial posts to limit the influence of governors, especially in states such as Kano and Rivers. On September 16th the rump PDP announced that Mohammed Abacha, son of the late General Sani Abacha, Nigeria’s notoriously greedy military dictator (1993-98), had been brought back into the party from the opposition. It is speculated that Mr Abacha, who is himself vastly rich, may run for governor of Kano under the auspices of the old PDP in 2015.

It is also possible that Mr Jonathan will get the Economic and Financial Crimes Commission (EFCC), an agency that is supposed to snuff out corruption, to probe the PDP’s defectors, some of whom have already been targeted by it. A weighty northern senator, Bukola Saraki, had already been questioned by the EFCC before holding meetings for the rebel faction in his grand house in Abuja, the capital. “Jonathan will do anything to win,” says a senior PDP man. “But he will struggle in the north where the mood is very anti-Jonathan and anti-PDP.”

One result of the in-fighting in the ruling party is that the momentum for economic reform, already flagging, has slowed even more. Few people now expect the long-stalled Petroleum Industry bill, which is meant to bring clarity to Nigeria’s oil industry, to pass. Nor will the PDP’s rows help the president to end violence and sabotage in the oil-rich south, where billions of dollars of oil money still fall into the hands of criminals and corrupt politicians, or to win the campaign against terrorists in the north. On September 28th militants from Boko Haram, a jihadist group, killed around 50 students at an agricultural college in the northern state of Yobe.

The PDP’s feuding factions are to meet for talks on October 7th. Mr Jonathan and his PDP rump may have enough oil money to buy their way out of trouble. But for the moment the pendulum has swung in the PDP rebels’ favour. Moreover, the opposition in the shape of the All Progressive Congress, a recently formed coalition of three main parties, has also been getting its act together—and will surely try to lure some of the PDP rebels onto their side. The president, who often seems a hapless (but rarely hatless) figure on the national stage, has a real fight on his hands to keep his job.

On October 1st he handed licence certificates to 14 private companies that have been allowed to buy chunks of Nigeria’s dismally incompetent state-owned electricity behemoth. If a lot more people had reliable electricity by 2015, that might win him some crucial votes.

-       Economist

E-Report! - Halle Berry gives birth to a son

Actress Halle Berry and husband, Olivier Martinez, welcomed the birth of their first son Saturday.

A representative for Berry would not share any other details about the boy -- Berry's second child -- including where he was born or his name.

The Oscar-winner has a 5-year-old daughter with ex-boyfriend Gabriel Aubry.

Berry, 47, married Martinez, 47, in a private ceremony in France in July. It is the third marriage for the Berry, who revealed in April that she was expecting a baby with the French actor.

Berry and Kors fight world hunger

Berry and Martinez began their relationship last year after meeting on the set of the film "Dark Tide."

Martinez was by her side through the last months of her bitter custody battle with Aubry, the Canadian model who fathered daughter Nahla.

They reached "an amicable agreement" over custody in November, a week after a Thanksgiving Day fistfight in Berry's Hollywood driveway between Martinez and Aubry.

Berry was previously married to former pro baseball player David Justice -- from 1993 until 1996 -- and singer Eric Benet -- from 2001 to 2004.

"This has been the biggest surprise of my life, to tell you the truth," Berry told CNN when discussing her pregnancy in April. "I thought I was kind of past the point where this could be a reality for me. So it's been a big surprise and the most wonderful."

- Alan Duke CNN

Secrets to getting business loan with ease

Most of the time, getting to start a business can be daunting when one considers the financing aspects. And when the hope of getting one is next to non-existent, starting up a business can be quite challenging. Those who started their businesses during the economic crisis would testify to the fact that they didn’t find it so easy, getting financing for their business. But with the shift to SMEs and the offer of a helping hand that comes with it (although some may reason that the helping hand come with some noose attached), some business owners can actually get some respite for their business launch. So, to answer the question to whether or not you can get a business loan, yes, you can get that business loan. You’ve just got to know some things first.

Most of the times, when small business owner go to get a loan, they go with something like: business plan? Check! Unmitigated charisma? Check! Vision and unchecked passion? “Come on, I have a dose of those that could feed the universe, so check! But the thing is, as great as these attributes are, they alone can get you through a bank’s door, but won’t help you get a loan out of it.

Bankers say that most young business owners make the mistake that they could get a loan from the bank once they meet the already mentioned criteria. A potential loan applicant to a bank needs to follow some guidelines and meet some prerequisites before getting a loan from the bank, bankers said. But what are they? That was what Entrepreneurship+ went to find out. Here is what was found:

Have an existing account with the bank
The bank you are approaching expects that you have an existing relationship with them before you approach them for a loan – that is, you must have an account with the bank. And when they say an account, they mean a business account. Investigation reveals that at Wema Bank for instance, the first rule of the thumb having a business account running for a minimum of six months to one year before you can approach them for a loan.

According to a source within the bank, the turnover from the account will go a long way in determining the eligibility for a loan and how much one gets. The turnover here means how much is deposited into the bank on a daily basis.

To open a business account, some basic guidelines must be met. For a Limited Liability Company, these documents must be supplied: Photocopy of Certificate of Incorporation of your company, Certified true copy of Memorandum & Articles of Association, Certified true copy of Form C07 (particulars of Directors), Certified true copy of Form C02 (Allotment of shares) and Board resolution authorising the opening of the account with nominated signatories, which must be signed by two signatories. For public company, a director and secretary (who will serve as signatories) must sign the document while two directors are needed to sign for private company. The board’s resolution must be on the company’s letterhead, with the executives listed on the company’s seal. Additionally, passport photographs of the signatories must be included.

To open a proprietorship business account, certified true copy of application for business registration and certified true copy of certificate of registration of a business name are required; while copy of notarised partnership deed, certified true copy of certificate of registration, partnership resolution authorising the opening of account and nominating signatories to the account are required for opening a partnership business account.

For Heritage Bank, prospective applicants must have a six months running business account and the account must be verified registered Limited Liability Company. To open a business account with them, which they said is Commission of Turnover (COT) free, the following documents are required: certified true copy of application for business registration and certified true copy of certificate of registration of a business name. To stand a chance of getting a loan from the bank, an application must show a true reflection that the account is indeed a business account and is making a daily turnover. Once this is done, the applicant gets a chance of getting 25 per cent of his turnover as loan.

Zenith Bank’s reserve for investment in small scale enterprises stands at over N3.7 billion and as such, small business owners could take advantage of this to get funding for their businesses, a source in the bank said. An applicant’s loan eligibility is based on qualifying for the criteria for SMEEIS funding, according to the bank’s website, http://www.zenithbank.com/smallbus.cfm. The  prospective business must be a limited liability company duly registered with the Corporate Affairs Commission (CAC) and should have an account with Zenith Bank Plc; tenor of investment is minimum of three years and maximum of five years, the Bank’s equity investment in an SME shall be N20 million (minimum) and N500 million (maximum). Another criterion is that the prospecting company must not be involved in any pending litigation case instituted against it or by itself.

Provide security
Security in this context means collateral for the loan which the applicant must bring to the bank. This collateral is part of what will be evaluated  for the eligibility for a loan. Wema Bank requires that small scale business owner must have a turnover, which could be used as collateral for loan. To qualify for commercial lending, an applicant will get 75 per cent of loan granted as collateral and the collateral must yield the company at least 80 per cent of the amount got from the bank, in case the bank is forced to dispose off of the collateral.

For Heritage Bank, once the turnover from the account gets to a certain requirement, the applicant could get 25 per cent of the total sum. But for those who are seeking a loan to funding their start-ups, but do not have access to make turnovers, the bank said there’s an arrangement for a collateral-free loan of N1million, although if some other requirements are met, an applicant could get as much as N4million without a collateral.
Aside meeting the afore-mentioned demands to ensure applicant’s eligibility to a loan, Zenith Bank has the following conditions for funding. “The bank shall have a seat on the Board of the SME, the bank will be involved in the appointment of a suitably qualified Financial Controller, the company will execute an Equity Investment Agreement and Domiciliation of Sales Proceeds Agreement prior to disbursement, the funds shall be tied to a project cause preferably acquisition of specific fixed assets and/or working capital support” and lastly “promoters of the company should not be current directors or employees of banks,” as was written on the bank’s website.

Have a business plan 
Some financial institutions require that an applicant comes armed with a solid, realistic business plan and great, but honest financial documents. It is advisable that you take the time to prepare a business plan – that is something that will show you have a good understanding of your business and market, a high-level strategy, and a financial projection.

Get your personal finances in order
Minda Zetlin of Inc wrote that Sabrina Parsons, CEO of Palo Alto Software, which makes software tools to help small businesses track their finances, told her that if you want to launch, expand, or help finance your business, you need to get your personal finances in order. According to Parsons, personal background is often a problem. And why is that? Zetlin wrote that it is “because the bank is betting on you just as it would be for a personal loan, so your past credit performance will matter. If there are delinquencies or other negative information that doesn’t belong, dispute them, and try to pay off any outstanding loans, including credit cards. Or try another option: Bring in a business partner with better credit than yours.”

Try a community bank
The difference between community banks and big commercial banks is that loan officers are likely to have more decision-making power, and are less firmly bound by algorithms than they would be in a large bank, Zetlin said. To get a loan, go for a community bank that actively pursues small business customers, she added. Go to their marketing department to get information, check out their marketing materials and the financial information on its website to get a clue.

Whether you’re planning expansion or improvements of an existing small business, or you’re just now getting a new business off the ground, a small business loan can give you the financial support you need. Not all businesses can get a small business loan, so you need to take special care in applying for one. By ensuring that everything is as accurate as possible and by putting your business in the best possible light, you will improve your chance to get the loan.

Get some help
Meet the business loan consultant of the bank you’re applying to and bring all the requested documents and information with you to the meeting. Once there, go over the documents with the consultant to ensure that they are all in order. This is a good idea, especially if you have not applied for a business loan before.

Wait to hear from the bank
Once you have submitted the application and all supporting documents to the correct person or address; wait to hear from bank. Do not bombard them with calls or sound desperate.

• By Ruth Olurounbi 

Electricity consumers should not expect improvements soon —NERC

Electricity consumers in the country should not expect a rapid improvement in power supply any time soon despite the privatisation of the sector, the Nigerian Electricity Regulatory Commission has said.

The commission made it clear that the distribution of meters to consumers as well as the improvement of technical issues in the power business would not be achieved in the short term.

The Chairman, NERC, Dr. Sam Amadi, said private investors in the sector would need time to settle down, understand the details of the business and strategise better to service their debts.

According to him, the investors will also need time to work out how to efficiently manage the electricity networks and installations to benefit their customers.

He said, “These issues, of course, cannot be achieved rapidly. So, in the first few months, there will not be so much significant or rapid improvement, and electricity consumers should not expect magic.

“That the Federal Government sold these companies to private investors does not mean that the problems with the power sector will be over overnight.”

Amadi spoke at a workshop organised by the commission to discuss issues pertaining to yearly increase of electricity tariff and the privatisation of the power sector.

The privatisation of the power industry took a step closer to completion last Monday with the handing over of share certificates to 13 investors, who had earlier paid for the 14 electricity generation and distribution companies.

President Goodluck Jonathan had stated that with the scheduled handover of the electricity companies to the private sector operators, things could only get better.

“Going forward, this administration is committed to providing all elements that are necessary for our private sector partners to succeed in providing Nigerians with uninterrupted power supply,” the President had said.

But Amadi told journalists that uninterrupted power supply would not just happen, stressing that the new owners would need to get enough money not only to repay their debts, but to run the companies efficiently.

“This, however, does not mean that there won’t be speedy improvements in some aspects of the business. Customer care can be improved upon in the short term, but improvements in technical issues will be in the long term,” he said.

The NERC boss, however, gave an assurance that the commission would keep the new owners of the electricity firms committed to their respective targets, adding that it would not hesitate to penalise defaulters.

On fears that the Disco Roundtable, an umbrella body for the power distribution companies, would form a cartel that would dictate electricity tariff, Amadi said the Federal Government would dissolve the body once the handover was completed.

“We have made them understand that once they take over the business, we will deal with them individually and not as a group,” he said.

On why metering of electricity consumers was still a huge problem, the NERC chairman said, “The corruption and racketing in metering is inhibiting the process. However, the Discos will meter their customers, but this will take some time for it to go round.”

BY OKECHUKWU NNODIM, ABUJA 

Bank CEO sees stronger SME sector boosting next generation corporate

Ifie Sekibo, managing director/CEO of Heritage Bank, has said concerted promotion and protection of small and medium enterprises (SMEs) is the first step in building the next generation of African corporate.

He said this at the second US-Africa Trade and Investment Forum/Africa Investment and Development Awards at St. Regis Hotel, New York, USA, while speaking on “Small and Medium Enterprise Funding in Africa – a banker’s experience.”

According to the Heritage Bank helmsman, in sub-Saharan Africa, SMEs are more credit-constrained and this typically affects growth possibilities as significantly low numbers of start-ups who apply for financing actually succeed.

Studies, he noted, indicate that more than 70 percent of the SMEs lack access to medium-longer-term finance, creating an SME funding gap of more than $140 billion in Africa alone.

“Using Nigeria as a case study, between 2003 and 2009, SME loans as a percentage of total credit, decreased from 7.45 percent to 0.18 percent.

Yet by 2012, Nigeria had about 17.6 million MSMEs employing about 32.4 million people.

“Although it is generally accepted that SMEs enhance competition and entrepreneurship, and their development has a positive impact on innovation and productivity growth, policy and infrastructure factors to mitigate risk

and costs that SME sector cannot internalise needs to be seriously worked upon by all relevant stakeholders,” he said.

He further revealed that in Nigeria, most SMEs die within the first five years of existence while another smaller percentage goes into extinction between the sixth and tenth year, with only 5 to 10 percent surviving,

thriving and growing into established corporate status. He listed the leading cause of such sub-optimal output to include – poor access to funds, weak institutional support, unstable macro economics, complicated and

unstructured legal framework/regulation, inadequate business information, infrastructure and business environment and human capital factors,among others.

Sekibo particularly lauded recent response to financing SMEs in Africa by development finance institutions that were engaging partnerships with commercial banks and other SME focused lenders to initiate advisory and innovation interventions to promote diverse SME funding windows. He listed these as including the African Development Bank (AfDB), ECOWAS Bank for Investment and Development (EBID) and the relatively new African Guarantee Fund, which was officially launched in June 2012, as a focused intervention fund to enhance international funding access to lending institutions with strategic and demonstrable focus on the SME space, among others.

“5 out of the top 10 fastest growing economies in the world are in Africa. The 39 fastest growing economies in 2013 have an average size of $78

billion. Growth in these countries is largely driven by SGBs – Small Growing Businesses such as agriculture, solid mineral, and retail distribution. “Small is no longer risky, it is the way to building the Next Generation of African Corporates,” he said.

- BusinessDay

Naira volatility seen ahead as Fed taper nears

The naira which has bucked the recent sell-off in emerging markets’ currencies so far this year may be in for some volatility near term as the imminent tapering of quantitative easing by the United States Federal Reserve nears.

Emerging markets, which helped pull the world out of a recession after the global financial crisis, face heightened volatility after an exit of cash and falling currencies in anticipation of the US Federal Reserve’s eventual tapering of its $85 billion in monthly bond purchases.

Nigeria’s relatively sound macroeconomic fundamentals and liquidity tightening measures by the Central Bank of Nigeria (CBN) had helped to shield the local currency year to date.

“The naira (NGN) has actually held up well relative to mainstream EM currencies, which reflects the policy-determined nature of USD/NGN,” Samir Gadio, emerging markets strategist at Standard Bank, London, said in a note released recently.

The naira has lost 4.3 percent versus the dollar on the interbank market this year closing at N163.40 per dollar on September 5.

The local currency has outperformed the South African Rand which is down 18 percent, Egyptian pound down 12 percent, Ghana cedi down 11 percent, Indian rupee down 16 percent, and Indonesian rupiah down 12 percent per dollar, respectively, data compiled by BusinessDay show.

The Nigerian economy grew by 6.72 percent in the second quarter of 2013, while consumer prices in rose 8.7 percent in July from a year earlier as inflation touched a four-year low, according to data from the National Bureau of Statistics (NBS).

The current account surplus – a measure of trade in goods and services – may widen to $20.1 billion or 6.9 percent of GDP in 2013 while the budget deficit should fall to 1.8 percent of Gross Domestic Product (GDP) this year, according to Renaissance Capital’s estimates. Total debt to GDP is 30 percent, including AMCON bonds, well below the EM average.

The country also raised $1 billion – which was four times oversubscribed – through a Eurobond sale in July despite financial market turmoil.

The CBN has supported the naira by squeezing liquidity from the system with its policy of a 50 percent cash reserve requirement (CRR) on public sector funds, and intervening periodically to support the currency by selling dollars.

Foreign portfolio inflows have also helped to boost naira resilience this year as the high interest rate environment ensures an incentive to hold NGN assets domestically, while making the carry trade attractive.

The yield on 16.39 percent Nigerian naira government bonds due January 2022 closed trading in the secondary market at 13.52 percent on September 5, 2013, prices from the Financial Markets Dealers Association (FMDA) show. Foreign investors’ holdings in FGN fixed income securities amounted to $5.112 billion at the end of December 2012, according to the Debt Management Office (DMO).

“Inflows should continue on the bond side as investors are tending to favour countries with good fiscal and current account ratios. Nigeria has both,” Charles Robertson, global chief economist at Renaissance Capital, said in response to BusinessDay questions.

However, with US Treasury 10-year note yields rising to 3 percent last Friday – the first time in two years – on the strengthening US economy, market speculation is increasing that the Federal Reserve will announce plans to slow its bond-buying programme this month, which should pressure the naira in the medium term.

By: Patrick Atuanya 

Nigeria SWF (Sovereign Wealth Fund) makes maiden investment

Nigeria’s sovereign wealth fund has made its first ever investment, handing over $200m to UBS, Credit Suisse and Goldman Sachs to manage a fixed income portfolio.

(The Nigerian SWF, which is the brainchild of former Minister of Finance and current Minister of Trade and Investment, Olusegun Aganga, was signed into law via the Nigerian Sovereign Investment Authority Bill on Thursday, May 26, 2011, by President Jonathan. And based on the Santiago Principle, the SWF comprises three investment baskets – the Nigeria Infrastructure Fund; the Future Generations Fund and the Stabilisation Fund. Specifically, the Infrastructure Fund is expected to be used in bridging the nation’s infrastructure gap by investing in the development of critical facilities across the country. Notably, 10 per cent of this fund will be devoted to agriculture and regional government-sponsored development projects that will promote economic development in under-served sectors or regions in Nigeria. Whereas the Future Generations Fund will be used to build an inter-generational savings base by investing in longer term assets that generate returns to accumulate wealth for future generations of Nigerians, the Stabilisation Fund will be used to protect the country’s budget by providing a stable, last-resort source of finance during periods of fiscal deficit. Also, the Stabilisation Fund will ensure the smooth functioning of government and delivery of key services during periods where revenues from petroleum sales are less than the level anticipated and approved by the National Assembly. Explaining his reason for initiating the establishment of the SWF, Aganga had said that, as a fundamental component of Nigeria’s macro-economic management framework, the SWF, which will be managed by the NSIA, would help to reduce Nigeria’s susceptibility to the unintended consequences that might arise from the volatility of crude oil price at the international market.)

The first investment, even if relatively small, adds Nigeria to the small cadre of commodity-rich countries that over the past decade have become one of the most powerful forces in global financial markets through their sovereign wealth funds.

 Uche Orji, chief executive of the $1bn Nigerian Sovereign Investment Authority (NSIA), told the Financial Times the fund gave UBS $50m last week to invest in US Treasuries. A further $150m is being transferred this week to Credit Suisse and Goldman Sachs to build a US corporate bond portfolio.

“This is a major milestone for us,” Orji, a former banker who was recruited to set up the fund last year, said in an interview in Abuja, the country’s capital.

Orji said in June that he had delayed making any initial investments due to the volatility in global markets. But on Monday he said that he felt the bond market was now “fairly valued”. The first investment comes ahead of this week’s crucial meeting of the Federal Reserve. The US central bank is likely to start phasing out its bond buying programme that has kept interest rates at ultra-low levels. “There is more optimism now,” Orji said.

The Nigeria sovereign wealth fund is the third largest in sub-Saharan Africa, after the $6.9bn Botswana and $5bn Angola funds, though tiny compared to those of oil producers such as Saudi Arabia, Norway and Abu Dhabi, which have more than $600bn in assets each.

The sovereign fund was set up to safeguard oil revenues for future generations, provide a buffer against external shocks and spur infrastructure development in Nigeria. Despite decades of oil production, the country has never previously had a sovereign wealth fund or any ring fenced method of saving. Nigeria’s government wants to grow the fund by about $1bn a year, but faces opposition from state governors, who receive a share of national revenues. Orji acknowledged that new inflows were not guaranteed, but said that the seed capital was enough for now. “$1bn is not inconsequential,” he said. “Not many sovereign wealth funds have started out with that amount.”

Under the investment policy approved by the NSIA earlier this year, the fund is split into three pools. The stabilisation fund has a 20 per cent share – the $200m handed over to banks this week. Capital preservation is the main aim, with the fund acting as a buffer against short-term economic instability.

The future generations and infrastructure funds will each receive 32.5 per cent, or $325m, with 15 per cent unallocated. The NSIA has drawn up a long list of financial institutions to manage the future generations fund, which aims for a long-term return of US inflation plus 4 per cent. Investment options include listed stocks, hedge funds, private equity and real estate.

Orji said he hoped this fund would be running by the end of March 2014. But he expressed concern about rising valuations in the developed world stock markets. “We find quite a few asset classes, such as US equities, to be a bit rich at the moment,” he said. “We see more value in emerging markets.”

For the infrastructure fund, which will invest in Nigerian projects in sectors including power, healthcare, transport and agriculture, the NSIA has signed memorandums of understanding with the Africa Finance Corporation and International Finance Corporation to work together on transactions. It also has an agreement with GE, and is in talks with Power China about a possible electricity investment.

- FT.

US federal government Closed until further notice!

US federal government Closed until further notice!                                                              

The Shutdown is bad enough. What follows maybe far worse.

BACK down, or shut down? America would probably have preferred the former. But Republicans and Democrats in Congress are so entrenched in their positions that it got the latter. When lawmakers failed to agree on a deal to fund the federal government by midnight on the last day of the fiscal year, it duly shut down on October 1st. Both parties then loudly blamed each other.

The economic damage will at first be modest. Each week the government remains shuttered will knock an estimated 0.1-0.2% off the annualised fourth-quarter growth rate—nasty, but not a calamity.

Until some agreement can be reached, all government functions deemed non-essential are suspended. To get a sense of where that line is drawn, consider NASA. The agency is closed but the people supporting the astronauts currently on the International Space Station are going to work. Panda-loving members of the public are shut out of the National Zoo, but the pandas will still be fed. In all, 800,000 federal workers are staying at home with no pay. A further 1.3m are expected to work but will not be paid on time. The position of a large number of workers contracted to work for the government is uncertain.

As a condition of passing a budget, Republicans insist that Barack Obama’s health reform be defunded or delayed. Some threaten to apply the same conditions to raising the debt ceiling (the limit of how much money the federal government may legally borrow) later this month.

Many Republicans believe that this is their last chance to stop Obamacare, a big part of which started operating on October 1st (see article). The most ambitious shake-up of America’s health-care system since the 1960s involves, among other things, big subsidies for the impecunious and the sick. History suggests that such entitlements, once granted, are politically impossible to take away. So many Republicans think they cannot afford to wait until 2017, when they might (perhaps) control the White House and the Senate and be in a position to repeal the law through normal legislative means.

Republicans are sure that they are on the right side of a long-term trend. Support for the idea of government providing a safety net is declining. Towards the end of Ronald Reagan’s presidency, 71% of Americans agreed that it is the government’s responsibility to take care of people who cannot take care of themselves, according to the Pew Research Centre. By last year this had dropped to 59%. Some House Republicans believe that the hostility to Obamacare that shows up in opinion polls gives the party a mandate to kill the thing by any means necessary, even if that means closing a national park or 59.

Democrats are equally sure they are right. Their opponents have just asked them to blow up the most important reform of the Obama era in exchange for an agreement to fund the government for a little bit longer. They are inclined to tell their opponents to get stuffed. Some Democrats may be worried that Obamacare will hurt them electorally, but they also think that to allow House Republicans to rule by intimidation would set a terrible precedent.

“Imagine”, said Barack Obama, “if you had a Republican president and a Democratic Speaker, and the Democratic Speaker said, well, we’re not going to pass a debt ceiling unless we raise corporate taxes by 40%; or unless we pass background checks on guns; or whatever other list of agenda items Democrats were interested in.”

Furthermore, Democrats remember the previous government shutdown, which lasted for 26 days in 1995-96, with some fondness. In 1994 President Bill Clinton looked in a weak position after a huge swing to Republicans in the mid-term congressional elections. But by 1996 he had recovered sufficiently to thump Bob Dole and win a second term in the White House. Now, as then, Democrats think voters will blame Republicans for the kerfuffle.

Rather than negotiate an end to the shutdown, both parties are therefore putting a lot of energy into explaining why it is the other side’s fault. Harry Reid, the Senate majority leader, denounced “banana Republicans”. John Boehner, the House Speaker, described the president’s position as: “I’m not gonna negotiate. I’m not gonna negotiate. We’re not gonna do this.” To make their point, some House Republicans posed for the cameras sitting on one side of a table, opposite eight empty chairs.

House Republicans have proposed mini-bills to fund some things for which money is currently frozen, including the national parks and bits of the Department of Veterans’ Affairs, daring Democrats in the Senate to keep them closed. On October 2nd Mr Obama met Republican leaders to discuss the stalemate, but neither side budged.

Continuing irresolution

How does Congress extricate itself from this swamp? One possibility is that polls conducted in the wake of the shutdown will reveal which side is getting the blame. If a clear loser emerges, then one party will have a powerful incentive to back down. Alas, that seems unlikely to happen soon. Before the shutdown, most polls showed that voters would lean towards blaming Republicans, but not by much. Many people see two sides unable to reach an agreement, each blaming the other for intransigence, and conclude that they must be equally at fault.

This is troubling because the longer the fight continues, the greater the chance that the modest economic harm of the shutdown will turn into something much worse. Around October 17th the federal government will hit the debt ceiling. This ceiling has been raised 74 times before, and raising it again should be routine. But what if no one backs down?

America has never before found itself unable to meet its obligations. If the debt ceiling is breached, the government will have to rely on tax revenues, which currently cover a mere 84% of its expenditures, to pay for everything. It may be able to stiff pensioners while still paying interest on the national debt, thus avoiding a cataclysmic default. But no one has tried this before, so no one knows if the Treasury’s systems would cope. In any case, slashing federal spending by 16 cents on the dollar would fairly swiftly cause a recession, and no politician wants to explain to Grandma why he stopped her Social Security cheque. So the odds are that none of this will happen. But looking at the mood in Congress, it is hard to be sanguine.

- The Economist