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Diezani Alison-Maduekwe, the Minister of Petroleum has expressed optimism that the Petroleum Industry Bill (PIB) would be ready for the president’s signature by next month.Speaking at the eighth Aret Adams annual lecture series held in Lagos yesterday, the minister said, “We are very expectant. The Senate and the House of Representatives are passionate and eager to move this bill forward and they both want it out in the shortest possible time.”

Mrs. Alison-Maduekwe, who was the guest speaker at the lecture titled ‘Nigeria’s Petroleum Industry, its growth post PIB’, said she has been holding discussions with the chairmen of the committees and has been speaking with all concerned.

“We have to show the commitment necessary to the passage of the PIB. We are calling on all Nigerians to turn this aspiration to reality. The PIB has undergone various reviews and it is currently undergoing the final review by the legislators. It has undergone the first and second reading by the Senate and the House of Representatives. Right now, it is undergoing the chapter by chapter reviews by both houses before it is finally passed into law” she said.

She expressed optimism that a clear copy of the bill should be ready for the president’s assent next month. According to her, the passage of the PIB holds a lot of prospects for the country at large. “When this bill is passed, the gas sector will become the crux of our economy going forward. We have much more gas reserves than we have in crude.”

Prospects and benefits

Mrs. Alison-Maduekwe said the topic chosen for the lecture this year is one that is pertinent to the heart of many Nigerians. “The PIB is a long and in-depth bill, a historic, critical and extensive Bill encompassing the 16 hitherto existing laws with the oil and gas industry. One of the major benefits of this bill is that transparency in the oil and gas industry would be achieved.” “The oil and gas industry has been characterised by too much opaqueness, extreme level of confidentiality. This Bill would remove opaqueness in a scale that has never been seen. Data would be accessible for all interested individuals” she said.

Other benefits that would be derived from the passage of the bill according to the minister includes the availability of over 300, 000 jobs in the industry in the next 4-5 years, the implementation of corporate social responsibility would no longer be an option but compulsorily, gas flaring must be put to an end, and would hasten the commercialisation of the NNPC among other issues.

The government has repeatedly said the passage of the Bill is imminent, yet, revisions and debate have hindered the process since then.

Egbert Imomoh, the chairman, Board of Trustees, Aret Adams Foundation, said “Every year when the board of trustees meet to decide on a topic, we look at the industry, consider the issues which are current, topical and would attract a wide audience. Although the industry has set end of 2010, targets of a petroleum capacity of four million barrels a day, and reserves of 40 billion barrels, it was obvious that it could not be met for all kinds of reasons” he said.

“Secondly, the PIB has made so much progress in the National Assembly and attracted a lot of public and private debate, and based on assurances, we had expected it to be passed before the end of 2010. Apparently, not much investment was being made whilst the PIB was not yet passed. It was therefore obvious that the passage of the PIB was essential for the growth of the industry” he said.

Mr. Imomoh, who was Managing Director and Executive Chairman of Afren Energy Resources Limited and one time Deputy Managing Director of Shell Petroleum Development Company (Nigeria), said growth in the petroleum industry is absolutely essential to the Nigerian economy, given its position as the engine that drives economic expansion. Also, given the level of unemployment, a growth induced by the industry will contribute its own quota to job creation” he said.

The event was well attended by past and present managing directors and CEO’s of oil and gas companies and the NNPC, lawyers and dignitaries from all walks of life. The Aret Adams Foundation is founded on the ideals of the late Godwin Aret Adams, a one-time managing director of NNPC, among other positions in the oil and gas industry. Its major objectives include education and empowerment of Nigerians in the urban and rural centres. The foundation plans to organise seminars on topical issues of national importance aimed at empowering Nigerians.

The impact of brands in public education cannot be underestimated. This is due to the potency of strategies adopted to leverage brand visibility and positive perception. In such campaigns, even when the brand image soars, the ultimate goal of public education is given utmost priority.

I read the Dettol new health campaign several days back and in my own way, commended the thought process behind the campaign. I never thought the campaign could form a thrust of my column until events proved otherwise. However, the effectiveness of the campaign manifested through our children who started echoing one after the other, “We should wash our hands with Dettol soap”. I had not taken their comments seriously until they persisted. It was at that point I reminded them they use Dettol antiseptic to have their bath on a daily basis. I thought I had successfully calmed them, not until they reached for their school bags and brought out a manual on the Dettol Health Campaign. I was surprised because our first son had conveniently drawn the diagram in the manual on how to become a Dettol Health Champion. It was at this point that I realised that the children meant business. I had to take time to peruse the manual and it was a very enriching one.

It is important to state that brands that are dedicated to enhancing the quality of life build a sustainable image over a long period of time. Public education campaigns go the extra mile to connect directly with the public. It creates an instantaneous acceptability for the brands due to its advantage of knowledge sharing to the public. The Dettol Health campaign is indeed an eye opener to what brands can do to promote public good and influence them to take concrete steps to better their lives. I believe the strategic goal of the campaign has started achieving its results with my own experience already. This is because our children now want us to change to Dettol soap.

When brands enlighten and educate the publics, such brands remain in the hearts of the consumers. The functional benefits of such brands are also properly promoted to the consumers. There is no way such a brand will not occupy distinct advantage in the market. With the campaign which is targeted at the school pupils, the brand is being positioned to make them become influencers on their parents. Through the published educative manual, the school pupils have automatically become health champions.

The branding campaign is a well structured communication dedicated to public awareness in maintaining health standard. It exposes everyone and not only the pupils to harness the enormous benefits that come with proper hygiene.

One major fact that companies with consumer brands should realise is the need to embark on a long term investment on their brands. Some companies tend to focus on profitability alone without considering the interests of consumers. When brands are consumer driven, activities are embarked upon to promote public good.

Brands should seek to activate educational and enlightenment programmes that will impact positively on the brand’s image and on the long run benefit the public. When brands are consumer driven, the consumers will always be the focus of all brand activities and programmes.

In essence, brands should begin to adopt forward looking strategies to promote the general well being of the consumers. The path for a brand to be a champion in the market place is indeed to champion the causes of the consumers.

We need brands to educate and enlighten the consumers more on issues that affect them directly. This tells the consumers that brands are not only after their purchase alone but also their welfare. Brands can develop and thrive when they offer consumers something that they want and need which are beneficial and relevant to their lives. The ultimate result is that consumers will have intimate and powerful relationship with such brands.

The innocreative quick teller advert

If you have seen the Quick Teller advert of Interswitch, you will quite agree with me that it is both innovative and creative. It is one that has original thinking behind it. The advert projects the service providers with a lady’s earrings which exemplify creativity at its best. The other version of the advert had a lady’s finger nails with the service providers and it was published in a women focused journal. The print advert deserves commendation as it is one that is distinct. Coincidentally, the Communications Agency behind it Verdant Zeal clocked four years days back. This is to wish the guys at Verdant Zeal more years of innovation and creativity.

The Joint Tax Board (JTB) is to start the electronic
registration of tax payers through a project tagged, ‘Unique Tax Payer
Administration Number Project.’

The secretary of the board, Lawal Abubakar, disclosed this in
Bauchi State, when he led members of the committee on a courtesy call on the
Emir of Bauchi, Rilwan Suleiman Adamu, in his palace.

He said that the visit was to solicit for the traditional
ruler’s support in enlightening the people on the need to pay their taxes.

Mr. Abubakar said that the responsibility of the board was to
advice government on tax administration as well as how to generate more revenue
for the three tiers of government, adding that it would also provide a
comprehensive data base for all eligible tax payers.

“The purpose of the project is to ensure that each and every
taxable individual is captured through electronic system. Their names, places
of residence, and their 10 finger prints must be captured for easy
identification,” he said.

Consultants

Mr. Abubakar revealed that consultants were also involved in the
project, all aimed at providing equipment towards efficient data capturing
system.

“Our consultant is to provide services in terms of provision of
equipment that will allow modern way of capturing data as far as the tax payer
is concerned. The state, in conjunction with federal government agencies such
as states Board of Internal Revenues, Federal Inland Revenue Services, National
Bureau of Statistics, National Population, Federal Road Safety Commissions, as
well as the EFCC, among others, would serve as members of the steering
committee,” he said.

He further explained that one state in each geo-political zone
of the country would serve as a pilot to the exercise. The states are Bauchi,
Jigawa, Kwara, Delta, Abia, and Oyo. He said other states would follow
subsequently as the selection was based on counterpart funding, of which Bauchi
is the first to fulfill this requirement in the zone.

In his response, Bauchi’s traditional ruler commended the team
for its effort in reviving the tax system in the country. He said that tax
collection would generate more revenue, thereby bringing economic development.

He assured the team of his maximum support in getting the
cooperation of the people. “I know there are challenges when it comes to paying
of tax because when you mention tax to the people, it makes them feel as if you
want to collect all the little they are earning,” he said.

Twelve countries in the West African sub-region are to benefit from
a World Bank-assisted regional agricultural project under the West Africa
Agricultural Productivity Programme (WAAPP).

Nigeria is one of the countries to benefit from the $300 million
facility. Other countries under the scheme include Ghana, Mali, Senegal, Cote
d’Ivoire, Burkina Faso, Sierra Leone, Liberia, Togo, Benin, Gambia, and Niger.

The Economic Community of West African States (ECOWAS) is
expected to contribute $30 million of the facility, with the balance of $15
million to be contributed from the Nigerian International Development Agency
(IDA), and $6 million from free grants from the Global Food Crisis Response
Programme (GFPR). Nigeria contributes between 60-65 % of ECOWAS funds.

Boost for local farmers

Nigeria, which has already received the approval of the board of
the World Bank to participate in the programme, is expected to utilise the
facility to boost its productivity as well as create direct employment for
about 1.5 million local farmers, especially youth and women.

World Bank’s task team leader for the programme, Abdoulaye
Toure, leading a team of agricultural experts to Nigeria, said that the project
has started yielding results in some participating African countries, such as
Mali, where technologies developed for rice has helped raise farm productivity
from 2 to 9 tons per hectare, with Nigeria’s farm productivity currently at 2.5
tons per hectare.

Mr. Toure said Nigeria, which will share $51 million in WAPPP
package, will pay back only the interest-free $15 million to the IDA in 40 years,
with a grace period of 10 years.

“Nigeria is expected to play a key role in championing this
regional agricultural programme to scale up research and technology adoption to
enhance agricultural productivity in the West Africa sub-region. Many of the
participating West African countries are looking up to Nigeria for leadership
in the project,” Mr. Toure said.

The WAAPP project is expected to assist farmers in
agro-processing and value addition for agricultural products. The first phase
of the project, approved in 2007, has since provided Ghana, Senegal, and Mali
with agricultural research systems and regional research coordination and
monitoring through the West African Council for Agricultural Research and
Development (WACARD).

Nigeria’s agriculture sector has continued to remain the highest
contributor to the gross domestic project, with the federal government’s
aspiration to attain the Vision 20-20-20 objectives aimed at making the country
one of the world’s leading economies by the year 2020.

Available statistics from the National Bureau of Statistics
(NBS) show that Nigeria’s current food import bills are high, while
productivity of the country’s agricultural commodities remains comparatively
low against other countries in the sub-region.

The goal of WAAPP is to encourage integrated development of agricultural
research into the technology generation and dissemination continuum throughout
the region.

Equatorial Guinea sits in the heart of Africa and is the fourth
highest producer of crude oil in sub-Saharan Africa after Nigeria, Angola, and
Sudan. It has reaped huge revenues from crude oil sales since 1995 when
commercial export began, although discovery of the product was made in the
1960s. It is one country whose political experience will make the years of
brute military rule in Nigeria a mere child’s play in comparison.

The current maximum ruler of that country took over power in a
bloody military coup in 1979, eleven years after that country’s independence
from Spain. At that time, Teodoro Obiang Nguema Mbasogo was a Lieutenant
Colonel and his uncle, Francisco Macia Nguema, was the president. He is said to
have personally supervised the execution of his uncle by firing squad and has
reigned supreme over the country of less than a million people since then.

The nation’s GDP of about $37,900 is many times above that of
Nigeria. The truth, however, is that the high GDP does not translate to a
better life for the people. Since the ascendancy of crude oil as a major income
earner, other aspects of the economy, especially production of agricultural
produce such as cocoa, have suffered neglect. Does that not remind you of
Nigeria?

While looking up on President Nguema, one could not avoid
visiting the pages of Wikipedia where parts of the entry on this man reveals
the following: “In July 2003, state-operated radio declared Obiang to be a god
who is “in permanent contact with the Almighty” and “can decide to kill without
anyone calling him to account and without going to hell.” He personally made
similar comments in 1993. Despite these comments, he still claims that he is a
devout Catholic and was invited to the Vatican by John Paul II and again by
Benedict XVI. Macías had also proclaimed himself a god.’

Standing up to the despot

The president, his family, relatives, and friends are said to
own most businesses in the country. With the severe curtailment of freedom in
the country, it has come as a vent of fresh air when the writer, Juan Tomas
Avila Laurel, called for change and embarked on a hunger strike demanding an
end to the despotic reign in his country.

In a letter to Jose Bono Martinez, the president of Spanish
parliament, dated 11 February 2011, Mr. Laurel states among other things that,

“Since you believe so deeply in the moral solvency of President
Obiang, who has been in power since 1979, we fervently request that you exert
some influence and take steps towards the formation of a government of
transition; one in which those who have held positions in the last 32 years in
Equatorial Guinea must not take any part.

“This is not a political demand, as it might seem to you, but a
socially and morally driven one. We cannot continue living under a dictatorship
that eats away at our very souls.

“Mr. Bono, all we are asking is that you find asylum in a safe
country for Obiang, his son Teodorin, first lady Constancia, and his brothers
and cousins, the generals and colonels who maintain this unspeakable regime. We
believe that one-third of the money that any one of them has deposited in banks
abroad would be enough to support themselves for the rest of their days. The remaining
sum has to be returned to the country.”

The letter ends with a painful plea for intervention: “Mr. Bono,
it is not fair for me to put my life in your hands. I will not deny, however,
that whatever happens to me will depend in great measure on what you do.”

Gaddafi’s oily stand and
neo-philanthropists

The events in North Africa and in the Middle East clearly
highlight the fact that crude oil has been largely responsible for the
entrenchment of crude regimes in the region.

This is particularly visible in Libya where the man who has been
in power for over four decades clings on, threatens to cleanse the country of
protesters house to house and if necessary blow up the oil and gas fields of
the country.

This threat has introduced a new dimension to the volatility of
crude oil supply and threatens to push prices to record high. Call him what you
like, but Mr. Gaddafi and his cohorts have fed from the feeding bottle of crude
oil and taking that from them without a period of weaning is bound to result in
the slaughter and tantrums that is the hall mark of the regime in Tripoli.

A quick look back at the third week of February 2011 shows that
as we saw a fine being slammed on the oil giant, Chevron, for polluting the
Amazonian region of Ecuador, we heard of the company’s philanthropic move in
the Niger Delta.

The gesture is a clear case of philanthropic tokenism. It
appears that Chevron sought to draw attention away from the long-awaited
verdict from Ecuador by moving across the Atlantic and displaying a suspect
front of compassion in the bloodstained and oil soaked creeks of the Niger
Delta. The link and the timing are inescapable.

The company announced with much fanfare a splash of $50 million,
ostensibly to ignite economic development and tackle conflict in the region –
of which, it must be said, the company admitted to being a contributor in the
past.

The money is being funnelled through the company’s Niger Delta
Partnership Initiative and the United States Agency for International
Development (USAID) and will be spent over the next four years. The thrust will
obviously be to generate employment since the oil company hires only a tiny
fraction of the millions it has impoverished through the destruction of the
creeks, swamps, farmlands and forests that they depend on for their livelihoods
through oil spills, gas flares, and the dumping of other toxic wastes.

These are interesting days indeed. Without doubt, crude oil
business is not only volatile, but explosive. It is the stuff that oils the
machinery of despotism and it is the stuff that blinds the world to the bloods
that flow on the streets as people fight for liberty.

It is also the stuff that bluffs and seeks to blind us from
demanding environmental justice but accepting tokens.

The Federal Government would no longer enter into any fresh concession agreements at the country’s airports.

Henceforth,
it would rather undertake a comprehensive review of the existing ones
and plug the loopholes in revenue generation system in the aviation
sector.

The
minister of aviation, Fidelia Njeze, told reporters in Abuja yesterday
that all the existing concession agreements with the Federal Airport
Authority of Nigeria (FAAN) have issues that needed to be sorted out to
get them right.

According
to her, on assumption of office, studies of the agreements had revealed
that all of them needed to be reviewed, as their terms, which were
structured to assist the sector grow its revenue base, were “highly
skewed against government.”

“All
the existing concessions are not adding value to the aviation sector.
It is as if the aim of having them in place has been defeated. There
was need to take a critical look at the agreements and review them
thoroughly, so that it would be in line with the objectives of having
them, Mrs. Njeze said.

Getting things right

Mrs.
Njeze, who noted that she is the only minister in the history of the
ministry not to have entered into any concession agreement within one
year in office, said, “I want to review all the existing ones to get
things right. I have refused to enter into any new one, because all the
ones in existence have issues. But it is high time we started getting
things right. Somebody has got to do it someday, somehow, somewhere.”

Alluding
to the raging controversy between FAAN and one of the concessionaires
(Mevis) over alleged breach of terms of agreement, the minister said
that government is determined to get to the root of the issues
involved, because “an employee can never act like the employer.”

“It
has never been heard that one can engage a company to come and help
enhance revenue yield, yet one is not privy to what the company is
doing, because the company has turned to become a monster that cannot
even be managed,” she said.

According
to the minister, FAAN engaged the concessionaire to help boost revenue
generation, but the relationship reportedly turned sour after it was
alleged the concessionaire reneged on the terms requiring it to open
two dedicated accounts for all generated revenues.

It
was gathered that the agreement had benchmarked Mevis revenue
collection against the N700 million it generated in 2007, from where it
was entitled to 2 per cent as commission, while every revenue
enhancement effort was to fetch it additional 35 per cent commission.

Though
the concessionaire reportedly opened two dedicated accounts in two new
generation banks (Skyebank and Zenith) for its operations, it was
gathered that it had gone ahead to open a platform account, where it
lodged all revenues generated before transferring same to the dedicated
accounts, contrary to the concession agreement.

“FAAN
is meant to be paying Mevis, but Mevis is paying FAAN. From the
platform account, Mevis would transfer money to FAAN’s account after
deducting all its interests. Nobody knows what is happening in the
contentious Platform account,” the minister further said.

Fairness to all

“The
issue in question is not about money missing. All the money the company
has made has been paid into FAAN’s account. The issue is for government
to review the concession agreement to favour all parties. We want to
know the activities going on. The most important thing is that we want
to get things right,” the minister stated.

Though
the National Assembly committees on aviation described the concession
agreement with Mevis as fraudulent, and advised government against
keeping it, it was gathered that Mevis has resorted to the courts to
restrain government from going ahead with the planned review.

“Mevis
is only doing well on the international routes, because the revenues
are collected by International Air Transport Association (IATA) and
remitted to it. In the domestic route, Mevis is not doing well, because
the airline operators say its operation is fraudulent, and that they
are not going to pay money to it,” the minister said.

Reviewing
her activities in the past year, Mrs. Njeze said projects are ongoing
in five critical areas, including critical safety equipment, systems
upgrades, emergency response systems, travelers’ comfort, and
rehabilitation of infrastructures at the airports to meet international
standards.

“A
lot of training is ongoing. We are overhauling operations, without
compromising safety, by ensuring that all the airlines undergo
re-certification, to determine the state of the aircrafts that fly the
country’s airspace. This is one way to promote business and encourage
more investors to come into the country’s aviation industry,” she said.

When I read the
IMF’s public information notice on its executive board’s conclusion of
the Article IV consultation with Nigeria, Thursday, two weeks ago, I
thought it was a pretty decent report. It just about covered all the
bases on the economy: strong output growth on the back of “a recovery
in oil production and continued strong growth in other sectors”. It
also dwelt on government’s rationale for continuing the fiscal stimulus
last year in spite of this strong growth, and growing concern over
rising inflation. Apparently, the Fund also noted, consolidated public
spending rose last year by 37 percent, after having risen by 10 percent
the previous year. Thus, in 2010, according to the boffins at the IMF,
“the non-oil primary deficit increased by 5 percentage points to 32
percent of non-oil GDP”.

Given that none of
this stuff is new, the fury of the domestic response to the Fund’s
position has been baffling. This has ranged from the usual knee-jerk
“anti-imperialist” twaddle about the “immorality” of the Fund dictating
to a sovereign government through analysts who argue that government’s
over-spend is necessary to compensate for the nation’s infrastructure
dearth, to the CBN governor’s strident riposte over the value of the
domestic currency. The first of these concerns is easily met, and given
space constraints, properly ignored. Concerning fiscal excesses, again,
the arguments are well met, but slightly harder to discountenance.

Indeed, the most
touching bit of the president’s 2010 budget speech to the joint session
of the national assembly in December last year was the contrition
expressed on the budget over-spend. From a deficit-to-GDP ratio of a
little over 5 percent in 2009, government hopes to force the deficit
down to 3.62 percent of GDP in the 2011 fiscal balance. Although the
president had earlier in the same speech alluded to the “challenges
posed by the huge infrastructure deficit” confronting the country, and
his government’s intention “to give greater focus to optimising capital
expenditure to bridge the gap”, it is significant that last year’s
budget deficit was the “result of the exceptional outlays to meet wage
increases granted to civil servants, as well as some other exceptional
items such as the INEC voters registration exercise”. After the same
fashion, the deficit this year is the consequence of “the recent public
service wage increases”.

Moral of the story?
Plenty of money spent, but not on infrastructure. We do need fiscal
consolidation. And Aso Rock agrees! Is the naira over-valued? Sterile
debate! The key point is that there was a cost to keeping the naira
within the CBN’s reference band over the last one year. The “loss in
international reserves”, as the IMF delicately puts it, is the most
obvious such cost. Between December 2009 and December last year, we
spent about US$10bn from the balance on the nation’s gross external
reserve largely to keep the naira afloat. One account lays the blame
for increased demand pressure at the foreign exchange markets on the
repatriation of profits by multinationals doing business in the
country. Another blames it on the activities of speculators taking
“one-way bets in the foreign exchange market”.

Either way, the
Excess Crude Account was also wound down within this period – about
US$18bn of it. In between, crude oil prices for the Bonny Light blend
averaged around US$75 per barrel (pb) last year. The budget benchmark
for 2010 stood at US$58pb, yielding a net accretion to the domestic
economy, of some US$17pb of crude oil sold. Add to this, the fact that
domestic crude oil production also rose last year from around 1.8
million barrels per day (mbd), to circa 2.1mbd. The arithmetic that
follows is quite simple. An additional 300,000 barrels per day was
available at the new price.

Whichever way we look at it, therefore, the country must have spent
a prince’s ransom last year just to keep the naira “strong”. What were
the benefits to the larger economy? By keeping the naira “virile”, we
held imports up; and in an economy as dependent on imports as ours,
this is might just be highly estimable. Against this benefit we must
hold the fact that all of the revenue in question is from a wasting
asset with a trans-generational dimension; in addition, the dollars
earned are too important a resource to fritter away on maintaining our
appetite for imports.

It’s nice to have a decent steady salary
at last. Now it’s time to think about what to do with that income. For
most young people, the idea of saving and investing seems like a
lifetime away; most people don’t start thinking about saving or
investing for their financial future until they are well into their 30s
and even later. It is important to realise that the choices you make in
your twenties as you start to earn play a critical role in your future
financial security.

Build your knowledge of investing

Investing successfully has much to do
with knowledge. Unfortunately, personal finance is not part of the
curriculum in schools and colleges and young people step out into the
real world for the first time without the skills and knowledge to manage
the money that they earn. Indeed, they are just trying to acquire the
most basic financial skills when they need them the most.

Many young people ignore the financial
papers and as a result, they do not get to learn about investments or
money. Whether you take professional advice or not, you need to educate
yourself about money matters and become “financially literate.” Enhance
your knowledge by reading; there is a plethora of information out there,
in newspapers, books, magazines, and on the Internet.

Establish your short, medium and long-term goals

The first step in financial planning is
to identify your goals. Your short-term goals might include: Going back
to school, planning a wedding, buying a car, or taking a vacation. Think
about medium-term goals, such as, owning your own home and financing
your children’s education, whilst your long-term goals may include
planning for your retirement.

Live within your means

It is very tempting when you first start
earning, and particularly where you have few financial
responsibilities, for you to spend excessively on mobile phone bills,
clothes, accessories, gadgets and entertainment. Critically review your
income and expenses and create a budget so that you can see exactly
where your money is going and then make adjustments where necessary.

Manage your Debt

Once you start earning a regular salary,
you are likely to have access to some credit. Be cautious about
borrowing; it is better to borrow for things that have lasting value
such as your education or your first home rather than for consumables
such as the latest smart phone or clothes. Start to build a solid credit
history from now by paying your bills on time and systematically
reducing any expensive debt. The way you handle your debt from now will
be important when you need to borrow more significantly in the future.

Pay yourself first

Most young people feel that they don’t
earn nearly enough to even consider saving. Regular investing is the key
to building lasting wealth and even small amounts add up surprisingly
fast if you invest on a regular basis. Even when money is tight, try to
save at least 10 percent of your monthly salary. Your aim should be for
you to have enough cash to cover at least three to six months of your
expenses so that you have something to fall back on to take care of
unexpected expenses such as car repairs or other bills. These savings
should be kept in certificates of deposit or money market accounts to
meet short-term goals such as buying your first car or planning towards
your wedding.

Start investing to meet your goals

What will you do with your money? Will
you start a small business or commit to buying a small plot of land?
Have you been thinking about investing in stocks but don’t quite know
where to start? Perhaps you don’t have the time or know how to select
your own stocks and don’t have that much money to spare. If you are
young and do not make much money but want to start investing, a stock
market mutual fund may the ideal investment to meet your medium and
long-term goals.

Mutual funds usually set relatively low
minimum amounts for initial and subsequent subscriptions. In Nigeria,
you can invest from as little as N10,000 which makes it affordable for
smaller investors. Historically, the stock market has out-performed any
other type of investment over time, but it should be considered
carefully as it comes with greater risk.

It is important to spread your
investments over different asset classes, so that a loss in a particular
investment may be minimised by gains in another. Mutual funds offer
such diversification and help you spread your risk. Buy into an
established scheme that has an experienced fund manager and good
performance record. You need more knowledge and usually a larger amount
to invest directly in stocks and still build a diversified portfolio to
reduce your risk. But, whether directly or through mutual funds, the
important thing is to get a large portion of your investments into the
stock market as early as possible as you have the time to ride any
short-term volatility.

Start planning for your retirement

It may seem odd to talk about retirement
when you have barely got started with work. Naturally, you are more
concerned about your job and not the end of your working life eons away.
As soon as you start work, you will be eligible to contribute 7.5% of
your pre tax income to a Retirement Savings Account (“RSA”) with your
Pension Fund Administrator (“PFA”) this will be matched by your
employer. You have an edge if you start to invest regularly for
retirement from now. Setting up automatic contributions to either one of
these retirement vehicles at a young age will help you build wealth
effortlessly.

The luxury of time

When you are young, you may not have
much in the way of income or assets. However, you do have one of the
most valuable resources at your disposal. That resource is, time. The
day you start earning is the day you must start to save. At this time,
you tend to have fewer financial responsibilities; once you start
raising a family, responsibilities and expenses begin and that can be a
challenging time for most young families. But investing a significant
part of your earnings from the start gives you an advantage of a few
years.

One of the greatest failures of investing is procrastination. If you
are consistent and disciplined, your savings will be able to grow
considerably. The financial choices you make now, will largely determine
your quality of life in future. Time is on your side; so start now.