Scores of firms in other industries have already relocated
from Nigeria in the last five years citing poor infrastructure,
erratic power supply, excessive bureaucracy and multiple
taxation among the factors that make business uncompetitive.

Nigeria’s cocoa processing capacity has slumped by about 90
percent in the last two years due to these problems and a weak
global demand for products, the Cocoa Processors Association of
Nigeria (COPAN) said at a news conference late on Thursday.

The world’s number four cocoa grower had about 18 grinders
crushing over 200,000 tonnes a year in 1986 when the sector was
deregulated, but only a few are now partially operational,
processing less than 40,000 tonnes.

Many have closed due to the rising cost of beans, which have
hit an all-time high at the farmgate of 550,000 naira ($3,570) a
tonne, compared to $3,775 in the international market on Friday.

Nigerian industry depends largely on generators because
power supply from the national grid is at best unpredictable.
The price of gasoline has also climbed 33 percent to 150 naira a
litre in the last three months.

Cocoa processors have invested over 100 billion naira in the
Nigerian sector over the last five years, industry experts say,
but the return on investment has been weak. Cocoa is Nigeria’s
biggest non-oil foreign exchange earner.

“The Nigerian cocoa industry faced its worst moment in 2010.
But we have gone from bad to worse in the last one year,” COPAN
national chairman Akin Olusuyi said.

“In my factory, we’ve been on generators since Monday last
week. There has not been a minute of public power supply,” said
Olusuyi, adding the same applied to other cocoa plants.

WHY PROCESS COCOA?

Olusuyi said though his plant can crush 10,000 tonnes of
beans a year, he only managed to process 4,000 tonnes last year
and will be lucky to grind a few hundred in 2011.

“When you factor in…that the cost of your raw materials is
not determined by you and the cost of your final product is not
determined by you either, then you ask yourself why are you in
operations at all,” he said.

COPAN blamed the sharp rise in domestic cocoa bean prices on
deregulation, which has allowed exporters to buy beans directly
at the farmgate where they out-price local crushers, who have to
pay interest rates of up to 22 percent to borrow at local banks.

Another major obstacle stifling the sector is long delays in
the payment of the Export Expansion Grant (EEG) by the
government, Olusuyi said.

The COPAN chairman said grants for 2007-09 had not been
paid, while applications for 2010 have not even been processed,
denying the plants much-needed funds.

The EEG is an export incentive that seeks to promote local
industry by off-setting 30 percent of production costs on all
processed exports.

Three years ago, top producer U.S.-based Cargill CARG.UL
became the first cocoa firm to relocate from Nigeria to nearby
Ghana, the world’s number two cocoa grower, where it has set up
a 50,000 tonnes per year plant, COPAN said.

More grinders are mulling relocation unless the government
intervenes, COPAN vice chairman Akin Laoye said.

“The way things are, if care is not taken, people will be
inclined to get out of the country. The government must realise
that the way cocoa machines are, they can migrate. You simply
pack them in boxes and relocate,” he said.
(Editing by Nick Tattersall; editing by Keiron Henderson)

The race for president of Africa’s most populous nation is expected to be wide open since many believe the ailing President Umaru Yar’Adua, a northerner, will not seek re-election.

Acting President Goodluck Jonathan, who is from the south, has assumed executive powers for Yar’Adua, who remains too sick to govern and has been out of the public eye since November.

But Jonathan is unlikely to stand in 2011 because of an unwritten agreement among the political elite that the presidency rotates between the north and south every two terms.

Following are some of the northern names being mentioned within the PDP and in Nigerian media as possible successors to Yar’Adua:

IBRAHIM BABANGIDA

Babangida, a 68-year-old northerner from Niger state, seized power in 1985 in a bloodless coup, ruling the oil exporter for nearly eight years.

Babangida was forced from power after cancelling an election generally regarded as fair, and this still colors his political reputation. His departure ushered in another army coup and the dictatorship of Sani Abacha.

Even though the next president is expected to serve only one term before making way for a southerner, analysts say his age could also be a concern to voters who have seen Yar’Adua’s health fail in mid-term.

Babangida said he would significantly reduce the powers of the federal government if elected, and transfer them to states and local councils.

ALIYU GUSAU

Gusau is a retired general and former National Security Adviser to Yar’Adua’s direct predecessor, Olusegun Obasanjo, and remains a powerful kingmaker in the ruling party.

Gusau was the main contender alongside Yar’Adua to be the candidate of the ruling PDP in the 2007 election, coming second in the primaries. He is seen as a favorite among powerful northern generals.

SULE LAMIDO

Lamido, the populist governor of the backwater state of Jigawa, was foreign minister under Obasanjo. He is said to enjoy the support of the former president and of Jonathan, whom he backed to come to power.

But analysts say Lamido is seen by his northern kinsmen as politically weak and too heavily influenced by Obasanjo, who is unpopular for helping to bring Yar’Adua to power despite knowing of his health problems.

ABBA RUMA

Ruma was Yar’Adua’s agriculture minister and has been his confidant since serving as governor of the remote northwestern state of Katsina. He was also education minister under Obasanjo.

Ruma is a member of Yar’Adua’s inner circle, which includes Yar’Adua’s wife Turai, and is seen as one of the candidates most likely to protect the interests of Yar’Adua and his allies.

BUKOLA SARAKI

Saraki, the ambitious governor of the central state of Kwara, is another close confidant of Yar’Adua. He is a trained medical doctor and was director of Societe Generale Bank (Nigeria) for 10 years up to 2000, when he took up a post as special assistant to the president on budgetary matters.

Saraki, who is serving his second and final term, is the chairman of the Governors’ Forum, a powerful grouping that is influential in selecting presidential candidates.

He is also close to James Ibori, the former governor of Delta state and one of Nigeria’s most influential politicians, who was instrumental in Yar’Adua’s rise to power.

He is the son of Kwara state’s political “godfather” Olusola Saraki, who vied for the presidency in the 1990s and is an influential senior figure in the PDP.

MAHMUD YAYALE AHMED

Yar’Adua appointed Yayale secretary to the federal government in 2008, a powerful position that co-ordinates between ministries and the presidency. He had previously served as defense minister.

Yayale was also head of service under Obasanjo, the most powerful civil servant, but is reported to have fallen out with the former president.

ISA YUGUDA

Yuguda, governor of the northeasterly Bauchi state, is Yar’Adua’s son-in-law and a member of his kitchen cabinet. He spearheads the president’s economic think-tank, set up to steer Nigeria through the global economic downturn.

Once a bank managing director, and aviation minister during Obasanjo’s first term, he was among those tipped to take over as governor of the central bank earlier this year.

Yuguda won the 2007 Bauchi governorship election on the platform of the opposition All Nigeria People’s Party (ANPP), but has since switched to the ruling party.

JIBRIL AMINU

Aminu, a second-term senator from northeast Adamawa state, served as oil minister under Babangida, and narrowly missed becoming vice president in 1999 when Obasanjo selected Atiku Abubakar instead.

The erudite politician was compensated with an appointment as ambassador to the United States from 1999-2003.

Though Aminu also enjoys Obasanjo’s support and that of the National Assembly, he is disadvantaged because he is in his 70s and is known to have medical problems of his own. (Editing by Randy Fabi and Kevin Liffey)

Nigeria announced its preferred bidder for Nitel on Tuesday,
naming China Unicom and the Minerva Group from Dubai as part of
the New Generation Telecommunications Ltd consortium, whose bid
valued Nitel at five times what many thought it was worth.

Doubts surfaced over the planned deal two days later when
Unicom <0762.HK>, China’s second biggest carrier, denied
involvement and there was uncertainty over the identity of the
Dubai company.

The Bureau for Public Enterprises (BPE) said it stood by the
bid process for a stake in of one of the world’s fastest growing
telecoms markets and sent out a copy of what it said was a
letter from Minerva Group in Dubai pledging financing.

The letter, signed by Minerva Group chairman Ahmed Abdullah,
states that the Dubai firm intends to acquire 68 percent of the
bid consortium, equivalent to 51 percent of Nitel.

“Additionally we can also provide a loan up to and in excess
of $5 billion as and when due following Minerva procedure,” the
letter, dated Jan. 19, says.

The letter, on Minerva Group headed notepaper, gives
telephone and fax numbers as well as a P.O. Box in the United
Arab Emirates, along with email addresses including public Gmail
and Yahoo! accounts.

Previous efforts by Reuters to identify the Minerva Group
involved in the bid proved fruitless.

The BPE also published excerpts from a letter it said was
from China Unicom (Europe) Operations Limited accepting to be
technical partner in the bid and saying it would consider an
equity participation of at least 20 percent.

“The letters in reference were immediately sent to our
advisers, BNP Paribas, for conduct of due diligence and
confirmation of the validity,” the BPE statement said.

It said BNP Paribas <BNPP.PA> had called the signatory on
the China Unicom letter, named as Williams So, by phone and that
he had subsequently confirmed his involvement by email.

Nigeria has been trying to sell Nitel for almost a decade
and the controversy over the latest effort to do so is
embarrassing for sub-Saharan Africa’s second biggest economy.

“We want to reassure Nigerians that our commitment to an
open and transparent reform and privatisation process will not
waiver,” the BPE said in its statement.
(For more Reuters Africa coverage and to have your say on the
top issues, visit: af.reuters.com/ )
(Writing by Nick Tattersall; Editing by Matthew Tostevin and
Louise Heavens)

The Bureau for Public Enterprises (BPE) said on Tuesday it
had extended its Aug. 28 deadline following requests by
investors for more time to sort out issues with their proposed
technical partners. It was the government’s first update on the
tender since the deadline passed.

“The new deadline is now Oct. 26. Some investors say their
partners are from overseas so they need more time to get things
done, to get their partners ready,” BPE spokesman Joe Anichebe
said.

“Because of the delicate nature of the transaction, we need
to accommodate their suggestions.”

The BPE invited bids in July for a 75 percent stake in Nitel
and each of its subsidiaries, which include mobile unit MTEL,
the South Atlantic Terminal underwater cable (SAT-3) and
analogue cellular phone units STAC and CDMA.

The agency said that 14 potential investors, including the
Nigerian arms of South Africa’s MTN Group <MTNJ.J> and Emirates
Telecommunications Corp (Etisalat) <ETEL.AD>, MTNL India
<MTNL.BO>, a group involving Spain’s Telefonica <TEF.MC> and
local firm Globacom, had expressed interest.

Nigeria is one of the world’s fastest growing markets,
adding 7 million new subscribers in the last quarter of 2008
alone and has overtaken South Africa to become the biggest on
the continent.

That could make Nitel more attractive to foreign investors,
particularly if its mobile unit can be bought at the right
price. But the government has struggled to sell Nitel, mainly
because of the shambolic state of its fixed line infrastructure.

Its fixed lines have fallen to less than 100,000 from five
times that number in 2001 and MTEL subscribers have dropped to a
few thousand from over 1 million.

Nigeria ended Nitel’s monopoly in 2001 and tried to sell the
operator the same year. However, preferred bidders failed to pay
the $1.3 billion price tag by the deadline, leaving it in state
hands.

Local conglomerate Transcorp <TCNP.LG> later bought a
majority state in the firm but the government took back control
in June, citing a lack of investment and unpaid debts.
ID:nL1639247]

Nigeria came close to selling Nitel in late 2005 to Egypt’s
Orascom Telecom <ORTEq.L>, but the government rejected the $257
million offer as too low.
(For more Reuters Africa coverage and to have your say on the
top issues, visit: af.reuters.com/ )
(Editing by Randy Fabi and Karen Foster)

The political elite in Africa’s top oil producer are rolling out the drums to celebrate the milestone.  And why not?

Olusegun Obasanjo, a former military ruler who won elections in 1999, ended Nigeria’s pariah status and brought Africa’s most populous nation back into the international fold, helping secure an $18 billion debt write-off in 2005.

Power was then transferred to President Umaru Yar’Adua in 2007 – the first successful transition from one civilian leader to another since independence from Britain in 1964 – although the election was condemned by observers for widespread rigging.

Soldiers have so far stayed put in their barracks during the historic decade, despite mounting frustrations among ordinary people – most of whom live on less than $2 a day – that their lives are not changing quickly enough for the better.

Cause for celebration, given Nigeria’s post-independence history, when the army exploited such frustrations to truncate the First Republic in 1966 and the Second Republic in 1983.

But while the great and the good celebrate, many ordinary Nigerians feel indifferent about the landmark.

The poorest say democracy has done little to change their standard of living. The huge earnings from Nigeria’s mainstay oil and gas industry are still not improving their lives.

There is much greater freedom of speech and of association, but some say the only tangible change in their daily lives over the past decade has been the arrival of the mobile phone.

Critics say Obasanjo’s high-profile campaign against corruption – the monster that had held Nigeria back for decades – was little more than a weapon against his enemies.

Initial optimism over his tenure gave way to a feeling that he was just as overbearing and kleptocratic as his predecessors.   

Yar’Adua’s assumption of power two years ago was seen as a breath of fresh air, but again Nigerians have been left wondering whether their optimism was misplaced.

 Economic reforms have slowed, infrastructure remains shambolic in large parts of the country and electricity supply remains as intermittent as it was a decade ago, despite Nigeria being the world’s eighth biggest exporter of crude oil.

In moments of desperation, some even wonder if the country was better off under military rule. So where does the truth lie?

How much has Nigeria really changed in the decade since military rule?  Has the country come too far for it to be conceivable that the military could one day take power again, or does democracy still have only a fragile hold on the giant of Africa?