Nigeria Content Online

A recent World Bank
report on the ease of doing business in Nigeria paints a picture of an
economy that is in dire need of reforms. According to the report, there
are several constraints to local business activities in Nigeria, chief
of which are the limitations for small to medium-size domestic firm to
thrive. The report focused on the aspects of starting a business,
dealing with construction permits, registering property, and enforcing
contracts.

In these areas,
Nigeria is still a long way behind. In enforcement of contract, it
requires 40 procedures and 457 days to achieve, while it takes up about
32 per cent of the income per capita of the population. To set up a
business for instance, would require about N118, 557. The report
however singled out Jigawa, Borno, and Gombe as states where there have
been improvements in the ease of doing business index. Doing business
was most difficult in Imo and Ogun states.

Improving
regulations Empirical research by the World Bank shows that improving
these regulations has positive effect on economic growth. “If Nigeria
adopted nationwide all of its states’ best practices identified in this
report, it would rank 72nd out of 183 economies globally, 53 places
ahead of Nigeria’s position in the global Doing Business 2010 report,”
the reported stated.

According to the
report, “Doing Buisness 2010 Nigeria” our country slipped in the global
ranking from 134th position last year to 137, behind South Africa,
Botswana, Tunisia, Rwanda, Ghana in Africa, on the grounds that it is
increasingly more difficult doing business in the country. The report
is supposed to engender reforms economic competitiveness among
countries. “But for reform-minded governments, how much their
indicators improve matters more than their absolute ranking,” the
report stated.

It challenges
countries to strengthen and add to regulations to protect investor and
property rights and find more efficient ways to implement existing
regulations and cut outdated ones. “One finding of Doing Business:
dynamic and growing economies around the world continually reform and
update their regulations and their way of implementing them, while many
poor economies still work with regulatory systems dating to the late
1800s.” Olusegun Aganga, minister of finance said recently that
government was concerned about the condition of doing business and that
is why it met with key operators to find out what their problems are.
“What we are trying to do is to find out what the issues are and what
government can do. We met with the banks and asked what we need to do
in order for them to start to lend to the real economy. There are a
number of things we need to do. One is legislative that we need to
change the Land Use Act, Evidence Act and Bankruptcy Act. Second thing
is establishment of commercial courts.” Mr. Aganga said two of these
documents are already with the National Assembly for deliberations in
order to help improve the ease of doing business in the country.

Manufacturing
challenges are many David Kliegl, general manager of the Federal Palace
Hotel and Casino, said in a recent interview that Nigeria is a
difficult environment to do business. Mr. Kliegl said, “It’s difficult
to do business in Nigeria. We run our generator 24 hours of the day and
that is very expensive. We have to estimate that in the cost of doing
business since we can’t cry about it.” “If you want to do business
here, you just have to live with these challenges,” he added. He would,
however, love to see a better Nigeria. “We’ll love to see stable power.
We believe that by being good corporate citizens, paying the taxes that
are due to the authorities, those funds will be used for the quick
provision of power and other basis infrastructure which would enhance
business and investments opportunities in the Nigeria.” “We are
investors in Nigeria and we understood what it took to do business
here. We are happy doing business in the country and we also want to be
a part to ensuring that infrastructure continues to get rectified
hereby attracting more investors,” Mr. Kliegl added.

Doyin Salami, a
member of the Monetary Policy Committee (MPC) of the Central Bank of
Nigeria (CBN) said there is need for synergy between the various
sectors of the economy. One way of doing this, according to him, is to
remove the Land Use Act out of the constitution so that it becomes a
policy issue rather than a constitutional matter which is cumbersome to
review. “The Land Use Act must be reorganized such that it makes
verification and transfer of title easy. Currently, farmers cannot
pledge land which is why banks are not willing to finance agriculture.”
Mr. Salami said it is ironic that agriculture, which contributes about
42 per cent of the GDP, does not attract credit from banks due to the
distortion in the Land Use Act which requires the consent of the
governor before deed of title is issued.

Some capital market
operators have raised concern over the delay in the appointment of a
permanent head for the Nigerian Stock Exchange (NSE), despite the
initial promise by the Securities and Exchange Commission (SEC) that
the process will be done quickly.

Emmanuel Ikazoboh
has been functioning as an interim head of the NSE since the sack of
Ndi Okereke-Onyiuke, the former director general, three months ago.

David Amaechi, an
executive member of the Shareholders Association of Nigeria, said until
the Exchange gets a stable leader, “the market may not enjoy stability
and woo investors.”

Mr. Amaechi said the NSE management and its council need to be sorted out to ensure a smooth running of the Exchange.

A stockbroker at
the Exchange, who would not like to be mentioned, said the capital
market investment “is a long term investment that requires a long term
administrator.” “Investors, especially foreign ones, always look out
for a stable market to put in their money; just like no investor will
put money in a country that has no political stability,” he said.

No end in sight

Finance analysts at
Proshare Nigeria Limited, an investment advisory firm, said the recent
advertorial by Accenture, the recruiting company for the NSE, suggest
that there may be a further delay in the appointment process.

“The NSE today,
functions in effect under a sole administrator-ship of the SEC, without
a determinate date and milestone for delivering on its mandate. This
has its downsides, and it is believed that the administrator may find
himself bugged down with issues not concomitant with the rationale for
the changes that took place, no matter how lofty and altruistic the
natural intentions are,” they said.

After the initial
October 12 deadline for the post, Accenture placed another advert for
the offices of the NSE chief executive officer and three executive
directors.

The analysts said,
“If only for professional etiquette, Accenture should issue a statement
to clarify why it considered it necessary to republish the
advertisement for the (NSE) chief executive officer and executive
director positions.”

They said the Stock
Exchange is supposed to be “an entity, which provides trading
facilities for stock brokers and traders to trade securities, not
internal politics. The NSE has unfortunately found itself doing more of
the latter lately than the former. This ought to be expected and
accepted as a consequence of the way we choose to conduct business in
our clime; yet it does not make it an acceptable practice.”

However, Mr. Ikazoboh recently told journalists that he is not sure when his tenure will expire.

“How long my tenure
will take, I cannot clearly say right now. But I can only say that the
process has started for the selection of a new director general. As
soon as a new DG is in place, I’ll step aside. The process of the
recruitment of the DG is ongoing,” he said.

Meanwhile, Lanre Oloyi, SEC’s spokesperson, recently said that the
commission was no longer in the best position to talk on the NSE
recruitment exercise.

Damilola Adegoke, a
writer, says he was discouraged by the procedure he was told to go
through before he could obtain a mortgage.

“I was asked to
first open accounts and save with the bank. They said after that, I
would be entitled to a mortgage of N5 million. I was told it was a 60
year repayment plan, and that you deduct your present age from the 60
years, within which you must finish the payment, so for instance, if I
am 30 years, I must repay the N5 million within 30 years. The
percentage they told me to pay annually, I think 20 per cent of the
borrowed sum, when I added it up, I saw that it amounted to about N12
million or more.

“That apart, I was
told categorically by the managing director of the bank that there was
no guarantee I would get the loan, I would just submit the form and
hope that it would be granted. I was told everything is based on
probability” Mr. Adegoke said.

Such is the tale of
about 80 per cent of mortgage applicants in Nigeria, a nation with a
weakening mortgage sub-sector which can barely create 10, 000 housing
units per annum. The nation is short of about 15 million housing units
to meet the demands of its citizens and would have to create about 700,
000 housing units in 20 years, if it would address her housing
challenges, according to Kola Ashiru-Balogun, an investment officer at
ARM, an asset and investment firm in Lagos.

Mr. Ashiru-Balogun at a recent conference added that banks have no appetite to lend to the mortgage sector.

However, in
recognition of the importance of the housing sector, and considering
that banks have ready access to cheap sources of funds through retail
deposits as well as the infrastructure to process real estate loans
efficiently and the skills to manage the risks involved, the Central
Bank has encouraged banks to support the development of the housing
sector in Nigeria.

Inadequate Funding

The Central Bank
has through its credit policies, required the erstwhile commercial and
merchant banks to allocate a stipulated minimum proportion of their
credit to the housing and construction sector.

According to the
Central Bank, available information reveals that the supply of credit
by the Federal Mortgage Bank of Nigeria is grossly inadequate to meet
the growing demand.

“With regard to
cooperative societies and state/municipal governments, evidence seems
to suggest some increase in the level of funding although, there
appears to be a lull in recent times owing to inadequate funds.

The lingering
challenges of mortgage financing in Nigeria includes low interest rate
on National Housing Fund, the hitherto high inflation rate negatively
affecting the macroeconomic environment, non-vibrancy of some primary
mortgage institutions, cumbersome legal regulatory framework for land
acquisition, The structure of bank deposit liabilities, among others.

“We need long term bond in this mortgage sector, I strongly believe Lagos State can champion this,” Mr. Ogunniran advocated.

Kelechukwu Mbagwu,
an executive member, Real Estate Developers Association of Nigeria,
(REDAN) said if builders can build with cheaper funds, it would be more
suitable for them to approach lenders.

Borrowers have
issues too Some experts say all the blame should not be put on the door
of the banks or lenders as some borrowers do not meet the requirements
to access such loans.

“The reality of the
matter is that for access to mortgage finance, usually, you would be
required to have a part funding. Most people who want to access
mortgage in this country do not have the capacity to provide the bank
part funding, so that is a major constraint. The second is collateral.
It poses very serious challenge to lenders” Abimbola Olayinka,
President, Primary Mortgage Institutions, (PMI) Association said.

Mr. Olayinka added
that unless the right environment is created to have the level of best
practice as seen across the world, the sector cannot really attract
investors.

“As it is now, the
system that we run is people driven, we have to get to a level where
mortgaging will be process driven. It should get to a stage where it
would no longer be, I know a friend who can help get this done within
the shortest time. All those long procedures must be cut down” he said
adding that there are so many bottlenecks in this present procedure,
“We have to create a smooth, formal transparent system”.

Another issue is
acquisition of land which takes a longer period in Nigeria. Processing
title and getting the required papers, especially certificate of
occupancy is not a simple matter. Hakeem Ogunniran, managing director,
UACN Property Development would be happier if it does not take more
than three days to acquire land and finish the processing of papers.

Striving forward

Some experts say
the financing of national housing programmes should be viewed primarily
as a national responsibility while the private sector should be
encouraged to provide actual investment funds for housing middle income
and upper income groups.

A Central Bank
report says empirical evidence shows that private sector participation
in housing is the most assured way to induce stability in the market.

“The housing fund
contribution should be integrated into the personal income taxation
system such that a defined proportion of taxes paid are allocated to
the housing fund pool, as it is done in Singapore. There is need for
constant re- engineering of the capital and money markets in order to
cope with the renewed challenges of provision of some mortgage
financing. In this regard, the restructuring and strengthening of the
FMBN becomes imperative for it to remain a viable financial institution
with the capacity to enhance efficient housing finance development in
Nigeria” Joseph Sanusi, a former Central Bank governor, said in a
report titled Mortgage Financing in Nigeria, Issues and Challenges of
2003.

Sadly in our consumption driven
society, many of us have come to believe that all our worries will be
solved if we have more money. Indeed, wealth has become the ultimate
measure of who we are, and we have become defined by it. When we chase
after money for its own sake, we can damage our value system and we pay
for it in time, health, and stress.

What does money mean to you?

Do you have a healthy relationship with
money? Do you worship it? Or do you use it as a tool to achieve your
goals? Does your life depend on it? What really matters to you? What
really does make you feel happy and fulfilled?

It is important to understand your own
money personality and to put it in the right perspective. The ways in
which we make money and how we spend it reveal a lot about our
personality. This relates to the emotional aspects of money such as
needs, values, relationship choices, feelings about earning and career
choices, spending, saving and investing. Issues of control, security,
self esteem, and sense of well-being are always evident when money
matters come up.

Maslow’s hierarchy of needs

What do we need? Abraham Maslow was an
American psychologist best known for establishing his theory of the
“hierarchy of needs” which he developed in the mid 1900’s.This model
served as a tool for understanding human motivation and development. He
identified five levels of human needs that must be satisfied by a
person’s environment in order for him or her to attain full potential.
Maslow’s pyramid illustrates human needs stacked in layers with
physiological needs at the base of the pyramid and self-actualisation
and fulfilment at the highest level.

The first and lowest level involves the
most basic needs; that is, what a person needs to stay alive, such as
air, water, food, sleep, warmth, shelter and hygiene. At the second
level, Maslow places safety, security, employment, money and financial
stability, and good health. By the fifth level the human being seeks
self-actualisation and fulfilment. He has the desire and ability to
grow; doing something that makes life complete such as, supporting a
cause, taking up a calling to realize personal potential, or seeking
personal growth.

Relationship between money and happiness

Why doesn’t the lucrative promotion or
the brand-new five-bedroom house keep us swathed in a permanent state
of happiness? We like to think that if we just had a little bit more
money, we would be happier but when we get there, something is still
missing. It appears that the more money you have, the more you want and
that buying the car, boat or bike of your dreams, brings you transient
joy rather than a deep lasting sense of fulfilment. We tend to
overestimate how much pleasure we will get from having more money.

Certainly, earning more makes you happy
in the short term, but you quickly adjust to your new lifestyle and all
it brings. Naturally there is that thrill of the shiny new car but soon
you get used to it and start wanting the newer, more powerful model.
Having made a special purchase, we immediately dream of acquiring the
better, “latest” version. Scientists call it ‘the hedonic treadmill’ –
and many people spend far too much time on it.

The Hedonic Treadmill

Professor Emeritus Richard Layard,
LSE’s Director of The Centre for Economic Performance, in “Happiness:
Lessons from the New Science” discusses the relationship between
happiness and rising standards of wealth. A critic of consumer society
and the all-consuming pursuit of money, he suggests that we eventually
get trapped on the “hedonic treadmill”. Our happiness begins to wane as
we start to take the new positive changes in our life for granted.

Money brings temporary happiness. A
dramatic change in wealth such as the move from abject poverty to
financial security can significantly increase happiness, but the
satisfaction will be transient; its effect will only last until the
beneficiary gets used to their new status. He argues that once poverty
and discomfort have been eliminated, extra income is much less
important than human relationships. So how do we step off the hedonic
treadmill?

What brings more lasting happiness?

Having spent several years interacting
with people with various levels of wealth, I am convinced that money
does not in itself create or sustain happiness. It certainly buys
things and improves the quality of life and a standard of living. Yes,
money is important, as it helps us to pay our bills, educate our
children, support our families, but if we rely on it as the key to
happiness, it can be illusory as it does not usually address the real
issues such as, concern for their families, problems in relationships,
and work related stress.

Money can buy food, shelter, education,
and pays for healthcare and day-to-day comforts. Of course if you don’t
have enough money to send your children to school, can’t provide for
your elderly parents, or can’t afford an expensive surgery that would
alleviate the pain from an old injury, it would be hard to be happy. In
that sense, money can buy happiness by eliminating some worries and
bringing quick relief to financial concerns.

Beyond that, longer-term happiness is
dependent upon one’s personality and how fortunate one is to have the
truly important things in life: a strong relationship with God, a
loving family, good reliable friends, good health for yourself and your
loved ones, a fulfilling and secure job, a safe environment, moral
values and freedom.

Happiness comes from giving

Having money is a great responsibility
because it enables one to do things. Material possessions eventually
lose their sparkle then beg to be replaced. Yet, one can make
transformational gifts by helping others and even shaping or saving
lives. It is through generosity that we attain the best relationship
with money. By deciding to make a difference in someone else’s life,
you give more meaning to your own. The joy that this brings is a
lasting form of happiness.

The constant message that is relayed in our society that money is
the most important thing in our lives and the constant desire for more
has far reaching consequences for our value system and morals. This
unending pursuit of money has damaged family relationships, our
environment and our country. If you earn your money in a healthy,
honest way, and spend it wisely, you have a better chance of being and
staying happy.

Egypt’s Orascom
Telecom will not list its Zimbabwean arm until after the outcome of a
deal between an Orascom and Russia’s Vimpelcom, an executive for the
Zimbabwe unit said on Wednesday.

Anwar Soussa, chief
commercial officer at Telecel Zimbabwe, also said on the sidelines of a
telecoms conference, that the company expects a 20 percent increase in
customers by 2011, from about 1.5 million now.

Telecel Zimbabwe said in June it may issue new shares and list its stock, in order to meet regulations on local black ownership.

But Mr. Soussa said the company was in no hurry to seek a listing.