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The issue of unclaimed dividends is one
that operators continue to grapple with in the Nigerian stock market.
Dividends are classified as “unclaimed” if they remain so 15 months
after being declared. After this period, the dividend is returned to
the issuing company. Security and Exchange Commission regulations
stipulate that an investor can still make a claim for up to 12 years
after which they will be deemed to have forfeited the dividend.

Unclaimed dividend trust fund

The proposed Unclaimed Dividend Trust
Fund that was opposed by capital market operators and eventually
rejected by the National Assembly in 2005 is being looked at again. The
Senate Committee on Capital Market is currently scrutinising a bill
that seeks to establish a government agency that will be responsible
for managing the billions of naira from unclaimed dividends of listed
companies quoted on the stock exchange.

There is much mistrust from people who
are not convinced that a government agency can efficiently manage and
account for what according to the Securities and Exchange Commission
now stands at well over N20 billion in unclaimed dividends and they are
determined to fight against the passing of the bill. Dividends remain
unclaimed for several reasons including the following:

No bank account

Operating a current account is a basic
prerequisite for cashing dividend warrants, yet some investors such as
students and low-income earners do not have bank accounts; whilst it
may be possible for a shareholder to endorse a dividend warrant to a
current account holder who can then release the cash but this is not
ideal.

Lost in transit

As shareholders addresses change they
often fail to notify the company registrars. In addition, due to
inefficiencies within the postal system and non-functional post office
boxes, some dividend warrants do not get to their destinations within
their validity period. All this contributes to the late or non-receipt
of dividend warrants.

Too meagre to cash

Often, investors ignore their dividend
warrants because they believe that the tiny amounts involved, are not
worth the effort of cashing. Yet it is the sum of thousands of such
warrants that have accumulated to the billions of naira outstanding
today.

Deceased shareholders

A vast number of unclaimed dividends
belong to shareholders who have died. Indeed millions of family members
are unaware that they are entitled to collect unclaimed assets of
deceased relatives who died intestate or without leaving updated
financial records.

In the event of the death of a
shareholder, if he has not referred to his shares in a will or has died
intestate, shares and dividends may be lost. Even when this information
has been provided, the somewhat cumbersome processes involved in making
the claims, are sometimes a deterrent. Several cases exist where
protracted legal battle over the administration of the estate of a
deceased shareholder has resulted in dividends remaining unclaimed for
several years.

Stale cheques

A dividend warrant, like a normal
cheque is valid for period of six months. A stale dividend warrant can
be revalidated by the registrar by issuing another dividend warrant
where the beneficiary meets some basic requirements such as providing
some proof of identity or making a physical appearance at the
registrar’s office.

Some have advocated that dividend
warrants should be regarded as special cheques which should be exempt
from the stipulated six-month period for cheque expiration; this could
reduce the incidence of unclaimed dividends.

Embrace e-dividends

In the wake of increasing complaints
arising from the issue of unclaimed dividends in the Nigerian stock
market, in February 2008 SEC launched the e-dividend payment system. It
has urged investors to embrace this system as one of the ways of
finding a lasting solution to the problem. Through this system,
dividends are credited directly into shareholders bank accounts within
24 hours of their being declared and approved. It saves investors much
time and energy spent depositing physical cheques into their bank
accounts and from bottlenecks in the postal system.

What do you have to do?

All that you need to do is to complete
an e-dividend form with your bank account details and forward this to
the respective registrars to facilitate payment of dividends into your
account when they are due. It is a very useful mechanism with which you
can manage your dividends, but be sure to complete the form properly
with your bank account details recorded correctly and legibly.

Take responsibility for your investments

It is useful to have a general idea of
the dividend history of the companies in which you hold shares
particularly those that you intend to keep for the long term. The
websites of the NSE, the various registrars and quoted companies are a
repository of information on corporate events such as the declaration
of dividends and bonus shares. This way you can forecast the likely
period of payment and look out for the credit to your CSCS account and
thus plan ahead for this income.

Take an interest and try to improve
your general knowledge of investing by browsing through finance columns
of daily newspapers and the electronic media. You have worked hard to
build your wealth and it is your responsibility to be more engaged and
monitor your investments to a degree. Unless you are a significant
investor, no one will do this for you.

The e-payment system has been pivotal to the development,
strengthening and deepening of Nigeria’s capital market. If fully
embraced by all, it should enhance the ability of shareholders to
immediately enjoy access to the proceeds of their investments. This
should provide a much required boost in investor trust and confidence
that the Nigerian capital market so badly needs.

The group of 20 major economies agreed on Saturday to shun competitive currency devaluations, but stopped short of setting targets to reduce trade imbalances that are clouding global growth prospects.

At a meeting in South Korea, G20 finance ministers recognized the quickening shift in economic power away from Western industrial nations by striking a surprise deal to give emerging nations a bigger voice in the International Monetary Fund. A closing communique contained no major policy initiative after a U.S. proposal to limit current account imbalances to 4 percent of gross domestic product, a measure aimed squarely at shrinking China’s surplus, failed to win broad enough backing. Indeed, the United States itself came under fire from Germany and China for the super-loose monetary policy stance it has adopted to try to breathe life into the sluggish U.S. economy. German Economy Minister, Rainer Bruederle, said he had made clear that easing was the wrong way to go. “An excessive, permanent increase in money is, in my view, an indirect manipulation of the (foreign exchange) rate,” he said.

Heading for China

The main aim of the two days of talks, which precede a G20 summit in Seoul on November 11-12, was to ease currency strains that some economists feared could escalate into trade wars. Developing countries are worried that Washington, by flooding the U.S. banking system with cash, is pumping up their asset prices and exchange rates, thus undermining the competitiveness of the export industries on which they rely for growth. China, among others, frets that the U.S. policy stance will debase the dollar, the lynchpin of the global economy.

The 16th Nigeria Economic Summit (NES 16) ended on a high last Thursday. Participants from across all sectors of the economy, private and public, converged on the Federal Capital Territory (FCT), Abuja for to discuss a common national concern: “Nigeria at 50: The Challenge of Visionary Leadership and Good Governance”.

Specifically, the summit was to help identify the connection between politics and economy, and how it affects Nigeria’s attempt to emerge as a strong, prosperous nation; encourage debate on the country’s leadership challenge and set an agenda for transformation and change; develop ways to realise the vision of becoming one of the world’s 20 leading economies by 2020, as well as awaken the consciousness of the people to their responsibility as good citizens.

At the presidential policy dialogue session, President Goodluck Jonathan identified greed as the greatest challenge the country is facing, pointing out that his dream is “to build a system where people would be less greedy” and “a nation that all Nigerians would be proud of”.

No youth, No vision 20-2020

At the Emerging Leaders forum, the consensus emerged that Nigeria cannot achieve its Vision 20-2020 objectives if the youth are not encouraged to be involved in productive work, and to build their character and value system on trust and sound moral principle.

For youth to dream audacious dream, participants emphasised the significance of role models in the present leadership. People who are expected to lead by example as well as ensure that they bequeath to the next generation and educational system that will enable them drive and live their dreams.

The submission of most of the discussants was that the current 6-3-3-4 educational system should be reviewed and that a reliable electoral system should be established, and corruption tackle. Most discussants also said the rule of law should be promoted.

“To inspire the youth to dream audaciously and come to terms with reality, meritocracy should be the principle in our educational system by ensuring that only the best and brightest excel, while entrepreneurship should be included in the nation’s educational curriculum. Building strong men without strong institutions will not lead the country anywhere. We should address the values among the youth by cultivating in them a sense of dignity in labour,” Fela Durotoye said.

Sector leaders appraise performance

At the oil and gas dialogue, stakeholders expressed concern that the delay in the passage of the Petroleum Industry Bill (PIB) as a result of disagreements on the provisions between the Nigerian National Petroleum Corporation (NNPC) and multinational oil companies was taking a negative tolls on the economy, with oil production declining from an average of 4-5 per cent in 2004 to about 2per cent at the present.

The consensus was that there will be no new investment in the industry unless there is stability and certainty in the investment terms contained in the proposed petroleum law.

The way forwards was that all stakeholders must resolve to come together and dialogue on areas of conflict in the PIB to ensure that the final document will serve the general interest of stakeholders.

No credit for job done

At the financial regulators forum, the Central Bank of Nigeria (CBN) governor, Sanusi Lamiso Sanusi, observed that Nigeria has done more, in terms of enforcement of guidelines and regulation among operators of the financial system, than it has been credited for. He noted that though most advanced countries lost huge sums of money as a result of the manipulation of the system, no culprit has been sent to jail.

“We have removed eight executives of banks. We have put one of them in jail. We are going to (get) more of them in jail. We have 260 people before Investments and Securities Tribunal. Nigeria has done more to hold people individually accountable than any country in the world,” he said.

World class capital market

The Director General, Securities and Exchange Commission (SEC), Arunma Oteh, acknowledged that the capital market is an enabler for any economy, and that the challenge is to build a world class capital market which has the highest level of integrity – one in which investors will feel confident and protected.

Mrs Oteh said the Commission is committed to building a capital market where investors will know that their decisions or consequences of their decisions are not based on issues of market abuse, and that investors are protected against anything that happens, whether it be global financial crisis.

Helping people accumulate resources

For Muhammad Ahmad, the Director General, National Pension Commission (PENCOM), the focus has been to help the people accumulate resources, so that they will have some savings, which they will have access to when they retire. He said as at the end of September, 2010, about $14billion has been accumulated by contributors in the last three to four years for that purpose.

At the close of the summit, Director General, NESG, Frank Nweke, said participant identified lack of clear political ideology, vision and will of successive governments as reflected in inconsistent policies, and disjointed planning in the last 50 years of the country’s independence as bane to national development and growth.

He said apart from the existence of a disconnection between leaders and the people, there exists a culture of impunity in the polity, gross abuse of the rule of law as well as high level of incompetence as a result of lack of preparedness by successive leaders for the challenges of the positions.

Call for credible leadership

The majority of participants at the summit said inorder for the country to have credible leadership, the three tiers of government should uphold the rule of law, and that judicial procedures should be simplified to guarantee speedy administration of justice.

“Government must create a rallying point for citizens to buy into the Vision 20-2020; deliver set targets in the next 12 months in the areas of power generation, deregulation of the downstream sector of the petroleum industry, commence education reform process; ensure sustained economic growth to create employment; address the security challenge and conduct credible elections in 2011,” participants said.

At the close of the summit, President Jonathan, who was represented by the Minister of Finance, Segun Aganga, reminded participants that all Nigerians are leaders, irrespective of whether they are in government or not.

“It is our country; it is our economy. We have a shared responsibility for the failures of the past. When we talk about failure of leadership, all Nigerians have failed. It is time we took action. Government will provide the enabling environment, but the private sector has to take leadership,” he said.

One
menace that investors in the Nigeria capital market have had to contend
with over the years is fraudulent stockbrokers. Many shareholders have
been victims of share sales without authorisation, share price
manipulation and failure to execute orders among others.

The
2003 case which became known as the Bonkolans Scam, involving Lawrence
Okwufulueze and his co travellers, readily comes to mind. Mr
Okwufulueze, then dealing clerk of Bonkolans Investment Limited, cloned
over 3.1 million units of Nestle shares worth over N314 million which
was sold to unsuspecting public. Since then, the major culprit has been
on the run. A more recent case was in 2005 when Kingsley Ikpe, chief
executive officer of Thomas Kinsley Securities Limited collected N135
million from Tony Ezenna, CEO of Orange Drugs Limited for the purchase
of shares of Nigerian Breweries which was not executed. Mr Ezenna
reported the case to the Securities and Exchange Commission (SEC) when
his stockbroker could not provide evidence that his buy-orders were
executed. Mr Ikpe was eventually jailed for 165 years.

Complaints against stockbrokers

Arunmah
Oteh, director general of SEC said recently that as at June, the
commission had received 220 new complaints against stockbrokers which
ranged from unauthorised/fraudulent sale and purchase of shares, to
falsification of clients’ accounts. The drive to mitigate investor risk
prompted the commission to propose the Straight through Processing
(STP), by which transactions in the stock market will be fully
automated and thus eliminate any incident of direct monetary
transaction between the client and the stockbroking firm. This is
designed to get rid of settlement risk and ensure that all trades
settles cash versus securities and will help restore investor
confidence and create a more efficient market. The Central Securities
Clearing System (CSCS), the clearing house of the stock market will
play a more prominent role under the proposed arrangement. The process
is being fine-tuned before its eventual unveiling.

Victor
Ogiemwonyi, managing director of Partnership Investment Plc, an issuing
house and stockbroking firm, said with the proposal, there will be no
failed trade and all trades ideally will settle same day. “The most
important feature of this will be that all cash settlement will go
straight to Investor bank accounts, thus eliminating once and for all,
the nagging issues of rogue brokers, who sell their client’s shares
without authorisation.” Mr Ogiemwonyi said the activities of a few
rogue brokers has created credibility and confidence issues in the
capital market community, “and has contributed to labeling all brokers
as fraudulent even though, the records show that the brokers involved
in these condemnable acts are few and far between,” he added. He said
the fact that this can happen at all, is reason why a solution like
this is desirable.

Improving market efficiency

Joshua
Omo-Kehinde, managing director of Marimpex Finance and Investment
Limited, a stock broking firm said investors under the new platform,
will now be required to open bank accounts which would be one of the
requirements before share accounts are opened for them. “This will
create a custodial so that once shares are sold on behalf of clients,
it would be paid directly to the client’s bank account.” He said this
new approach would go a long way in improving market efficiency.

According
to Mr Ogiemwonyi, the requirement for Investor bank accounts that will
be tied to a CSCS account for every investor will enhance the ‘Know
Your Customer’ ( KYC) rule, as it will be another check for knowing who
the account holder is. “It will eliminate mystery investors who launder
money through the stock market, since all bank accounts receiving money
from stock market trading can be traced to match CSCS accounts of
owners.” He said the implementation will have minimum disruption, since
all that will be required will be for clients to submit their bank
accounts to their brokers who will cross check their validity with the
banks.

The
Chairman, Association of Stockbroking Houses of Nigeria (ASHON),
Rasheed Yussuf, said the issue which dominated discussions at
conference of the Chartered Institute of Stockbrokers which ended in
Abuja at the weekend. According to him, the advantages of such a
venture are enormous. “It will bring us in line with the rest of the
world. It will increase liquidity and confidence and will reduce cost
for stockbrokers.” He said since the brokers were unanimous in
endorsing the new arrangement, it is left for the regulators to
implement it as soon as possible.

David Adonri, managing director of Lambeth Investment and Trust
Limited believes that when the new method is implemented, it will
elevate the Nigerian capital market to world standard. He said a lot of
problems in the market such as buying shares for clients when they have
not paid, or when brokers sell on behalf of their clients and do not
pay or under pay will be discouraged. “Through this method, it will
overcome all the malpractices and crude methods of doing things,” he
said.

It is nearly
impossible, discussing options for rapidly growing this economy without
encountering the link between growth and poverty alleviation. Often,
however, this connection is made in less than direct ways. Three
important documents on the prospects for frontier economies on the
sub-continent make this point differently. The Commission for Africa
Report quotes US President John F. Kennedy (“If a free society cannot
help the many who are poor, it cannot save the few who are rich”) in
making its point that “reductions in poverty do not come without
economic growth”. The NEEDS paper sought to “lay a solid foundation”
for the domestic economy on a platform that combined “sustainable
poverty reduction, employment generation, wealth creation, and value
reorientation”. On the other hand, the NEPAD Framework Document argued
for the design of “effective poverty reduction programmes” because
there is nothing inherent in the process of global growth “that
automatically reduces poverty and inequality”.

New background

These
sub-narratives have become important as we prepare to choose leaders
across the country for the next four years. Besides, there’s new
background to the discourse. China snuck in on the world. Several years
after Deng Xiaoping took their collective foot off that economy’s gas
pedal, most references still described the Chinese achievements as
miraculous. India, almost 20 years after its government began
dismantling the “licence Raj”, proves this lie. There is something done
well by governments that changes permanently the lives of their people.

In our case, it is
increasingly looking like the question to answer is “How do we put
money in the pockets of our people?” In its October 2010 World Economic
Outlook, the IMF argued that the world economy can only move down the
recovery trajectory on the back of “two fundamental and difficult
economic rebalancing acts”. One of the legs of this high-wire act
requires “Many emerging market economies, most notably China, which
relied excessively on net exports” to “now rely more on domestic
demand”.

In the domestic
instance, positive trade balances provide plenty of room for this
rebalancing. The central deliverable is to move spending away from the
external sector and the traditional emphasis on oil exports in favour
of increased spending on final consumption. How? The easiest way is to
do this, as is attested to by just about every “expert” on this economy
is to remove infrastructure constraints. This way, capacity increases
in manufacturing, for example, could drive new labour needs, and the
necessary growth in consumer spending. But here, there is a further
problem! No matter how competent and well meant, any investment in
physical infrastructure will require considerable lead-times before the
final projects come on stream. And a further lag between then, and when
industry begins to build inventory, as the prospects of new capacity
become real. Add to this China’s obvious dominance of production in the
real sector. It apparently has all the comparative advantage now, which
might argue against any prospects of real immediate gain from investing
in these sectors. So, rebuilding physical infrastructure is a
medium-term agenda: way beyond the ken of the four-year electoral cycle.

Resolving the dilemma

Where, then, may we
find the low-hanging fruits, and the quick-wins that can be delivered
over the next four years? It is important we do this, because only then
can we hold the next administration to a clear set of time-bound
deliverables. One way towards resolving this dilemma would be to
respond to the question: “Could reforms to our social infrastructure
(removing archaic laws, improving the criminal justice system, etc.)
help kick-start a transition from the agrarian foundations of the
economy to a service-based economy?” We would obviously have to by-pass
the manufacturing stage (where China currently has such a compelling
dominance).

Alas, there is nothing by the way of tested answers to most of these
questions. But that reforms along these lines are necessary, no one can
deny. Nor can anyone contest the urgent need for their implementation.
Similarly, neither import restrictions designed to protect “domestic
industries”, export promotion initiatives to advance the interests of
the latter, nor import waivers (from arcane rules) granted to political
cronies would do. Government has proved inept at these tasks since
independence, and more so in the last four years.

The Nigerian
Customs Service (NCS) appears pitched against the inter-ministerial
committee on the implementation of the Export Expansion Grant (EEG) for
the country’s trade facilitation.

The Manufacturers
Association of Nigeria (MAN) recently raised alarm that the NCS was
sabotaging the Federal Government’s efforts to promote the country’s
non-oil exports after the agency expressed concerns about the negative
impact the use of the Negotiable Duty Credit Certificate (NDCC) by
manufacturers, agricultural producers, and exporters for settlement of
custom duties has on its revenue generation capacity.

Other members of
the committee, consisting Central Bank of Nigeria (CBN), Nigeria Export
Promotion Council (NEPC), federal ministries of finance, commerce and
industry as well as the Special Adviser to the President (Manufacturers
and Private Sector), are accusing the NCS of issuing directives
countering the EGG guidelines capable of frustrating government’s
efforts to grow the country’s non-oil export base.

The certificate,
which serves as alternative to cash payment on export incentive claims
under the Manufacturer-In-Bond Scheme, could either be used by the
beneficiary recommended by the inter-ministerial committee, or
transferred by special negotiated endorsement to a third party,
subject, however, to three transfers.

Though Abdullahi
Dikko, the Comptroller General, said recently that the NCS is not
opposed to the use of NDCC as an instrument of trade facilitation in
the country, he added that the agency is not comfortable with any
arrangement that would not allow it realise its revenue targets.

As a self-funding
agency, Mr. Dikko said its survival depends on the revenue it generates
on a monthly basis, out of which it earns seven percent as cost of
collection to take care of its operations, including remuneration
packages and allowances to cater for the welfare of its staff, whose
take home pay was recently reviewed by 100 per cent as an incentive for
better performance.

Yearly, the
inter-ministerial committee, on behalf of the Federal Government,
considers and recommends some companies in manufacturing and
agricultural produce sectors for incentive in the form of discounted
duty certificates used exclusively for duty payment on in-puts to their
operations when they cannot be sourced locally.

The convertible
certificate, which is issued based on export performance, comes in
various denominations, ranging from N50,000, N100,000 and N1milion to
N5million, N10million, N100million and above, to be tendered in
exchange with the collecting agencies in lieu of duty charges on
imported in-puts in the form of machineries and accessories.

The Federal
Government is said to have allocated N50billion for discounted duty
certificates for the first quarter of this year.

Under the EEG, the
criteria for selection of eligible beneficiaries include the company
possessing products exports capacity of a minimum of N5billion per
annum, apart from its capacity to keep a minimum of 500 Nigerians on
its employment, promotion of export growth, capital investment and
local content.

The support is crucial

Immediate past
President of the Manufacturers Association of Nigeria (MAN), Bashir
Borodo, recently said that exporters of local goods cannot survive
without government support.

Statistics from the
Central Bank shows that since the introduction of the EEG in 2006, the
country’s non-oil sector, as reflected in the total annual repatriated
value of exports, grew from $1.3billion in 2007; $1.8billion in 2008,
and $1.9billion last year, owing to increased trade facilitation.

Mr. Borodo added
that the certificate was supposed to be for the settlement of duties on
imported raw materials, pointing out that considering that the bulk of
the exporters’ business depends on raw materials sourced within the
country, the percentage of the foreign raw materials to the total value
addition in their production process is minimal, beneficiaries often
discount their allocations to other importers.

Ordinarily, the
NDCC is supposed to facilitate the exportation of products from
Nigeria, by saving beneficiaries the agony of sourcing for foreign
exchange from the open market to facilitate importation of in-puts
(machineries, pesticides, chemicals, etc.) that would help improve the
local production process.

But the practice is
for beneficiaries to transfer their allocations at discounted rates to
third parties, who are hardly in the manufacturing and agricultural
produce sectors of the economy, and they in turn use it to pay for
duties on imported luxury items, like cars, electronics, household
furniture and office equipment, that have nothing to do with their line
of production.

Reluctance generates controversy

However, the
reluctance by the Customs to accept the convertible certificate in lieu
of payment for duties on certain imported goods by beneficiaries has
triggered a controversy that has brought it at daggers drawn with other
members of the inter-ministerial committee.

According to the
NCS boss, the problem in accepting NDCC in lieu of the duties its
agency should have collected on imported items is not only with losing
a sizeable percentage of revenue that could have accrued in the
federation account, but also because the certificate is a negotiable
instrument that could be discounted and transferred to a third party.

Besides, the EEG
implementation guideline is fraught with loopholes that beneficiaries
have been exploiting to the disadvantage of the government, as there is
no specification about the kind of goods a beneficiary can use the NDCC
for import duty payment; neither is there any timeframe or expiry
period for its utilization. It does not attract any tax also.

Though import duty
belongs to items that form the federation account, allocation for NDCC
is not captured as part revenue generated into it, neither is it given
out with the consent of the other tiers of government in line with the
provisions of the country’s constitution concerning the management.

The Customs’
argument has been that, as a self-funding revenue generating agency, it
should be allowed to collect duty on all imported items, and all
earnings from such collections paid into the federation account, from
where government can draw any incentive it considers necessary for any
group to promote export activities, for accountability purposes.

On the other hand,
the agency is arguing that if convertible certificate must be given to
any category of operators in the economy, government should make it a
non-negotiable instrument issued to specific beneficiaries, who cannot
transfer it to any third party for any purpose, while specific items
that the instrument can be used to pay for import duties should be
expressly stated, and subject to an established expiry period, to avoid
abuse.

But a senior
official of the Nigerian Export Promotion Council (NEPC), who asked not
to be named, said in Abuja that the government cannot do anything to
remedy the anomaly, irrespective of what the NCS is claiming.

“The NCS is a
member of the seven member EEG implementation committee, including
representatives of the ministry of agriculture. It is improper for it
to issue any other guideline on NDCC usage without the consent of other
members. The issuance of NDCC cannot be restricted to the importation
of machineries, because most companies do not retool or overhaul its
machinery in several years,” he argued.

It was gathered
that a recent meeting of the committee presided over by Yabawa Wali,
the minister of state for finance, had asked the NCS to withdraw its
directive that commands should reject discounted certificates. But it
was gathered that the issues raised by the NCS were not addressed at
the EEG inter-ministerial committee meeting a fortnight ago.

The focus of this
column last week was on customer service and brand image. It was stated
that a customer-centric approach is important to maintaining a good
brand image.

A major imperative,
which also has a linkage with brand image, is negative perception. A
brand that does not focus on its perception by the target audience will
surely suffer in the market place. It is thus very crucial for brands
to measure, test, and evaluate the perception of the target audience on
a consistent basis.

Several millions of
naira is spent on marketing communication without a consistent
evaluation of consumers perception. This is a critical issue that
should be given a utmost priority by companies.

Based on
interactions with people and on the street insights generation, I have
discovered over time that several consumers are disenchanted with some
brands. Sometime ago, telecom companies and banks were identified as
the culprits in this column. The way customers are treated by banks
leaves much to be desired. Some customers have stopped their patronage
with such banks due to poor service delivery. The proprietor of a
renowned school in Lagos has a negative perception of a particular bank
and this has resulted in stoppage of business with the bank.
Ultimately, this creates negative perception for such brands.

Some salient
questions were asked last week based on how to deliver effective
customer service. One major one is, “what have you done to enhance
customer satisfaction?” It has been discovered that some organisations
do not have a coherent approach to retain brand loyalty. This
eventually leads to negative perception against the organisation and
its brands. It is important that concrete steps are taken to identify
grey areas that need immediate attention.

It is also
important to evaluate the perception of the target audience about a
specific brand. Some organisations do not even go the extra mile to
observe the values and belief system of their consumers. The consumer
who stopped patronage did not just stop suddenly; it is an accumulation
of complaints, murmurings, and discontentment.

When such situation
occurs, there is the need to observe change in the consumer’s behaviour
and purchase decision, while urgent measures are taken to address the
situation. The goal of some brands is just to sell, without even
feeling the pulse of their end users. Consumer insights come in useful
here. This to a large extent helps brands gain an inroad to determine
the level of acceptability of the brand in the market place. Insights
provide value to the brands as the objective voice of the consumers.

When these insights
are generated and thoroughly analysed, negative contents should be
given utmost priority. This will help the brand to contain such before
it becomes a full blown perception crisis.

Consumer insights
allow brands to improve service delivery, review perceptions, and open
new perspective on attitudes, behaviours, and consumer expectations. To
eliminate negative perception, there should be a consistent consumer
perception survey to serve as a feedback mechanism on the performance
of such brands.

Some organisations
do not realise the enormous damage of negative perceptions of their
brands. Some brands have been taken to publics’ opinion court and this
poses service threats to such brands; some consumers have even gone to
publish negative articles on some brands. When there is a structured
feedback mechanism in place, consumers, even though aggrieved, believe
their interest are receiving the deserve attention.

Brands will always
have negative consumer perception when they do not align with public
good, and receive a favourable perception if they serve public
interest.

It is important
that concrete efforts are made to establish an enduring relationship
with the consumers. The thinking here is to subtly appeal to them and
know the way they feel, think, and perceive a brand. Through this, any
negative perception about the brand can be noticed and quickly
eradicated.

Negative perception
can be further eliminated where brand is also transparent in its
dealing with consumers, who, on seeing such open mindedness, refrain
from spreading negative news about the brand.

Online business
operators say they are always working on improving technology to curb
fraud and protect their customers, which may be one of the reasons
e-payment is emerging as a thriving business in Nigeria.

From clothing and
accessories, to shoes, bags, and services like satellite television
payment fees, telephone and blackberry charges, utility bills payment,
flight tickets, and books, more Nigerians are making purchases online
thereby signing on to a worldwide trend. It is also erasing the unfair
stereotype of Nigerians as online fraudsters.

The number of
people purchasing goods and paying for services through the internet
has continued to rise over the years. Operators say there are certain
levels of guarantee given by the online stores for customers who wish
to purchase goods and pay for services.

Damien Azu, a banker, says if one is careful and follows instructions, e-payment for goods and services is relatively safe.

“I order for books,
games for my kids and some other stuff within and outside the country
and they get delivered. It is convenient,” Mr. Azu said.

Scepticism remains

However, despite
assurance by operators, some people are still sceptical of the thought
of letting their details out on the internet.

“Anything cards,
you can count me out,” Segun Adewale, an investment consultant said. “I
don’t believe in the use of cards, whether ATM or otherwise, not to
mention [posting] my details on the internet. I would rather do without
these cards. The frauds related to these things (cards) are more costly
when they happen than what it would cost me to do all I have to do
manually” Mr. Adewale said.

Despite efforts to
curb fraud, experts say e-payment system risks still abide both on the
part of the payer and the payee which include, on the part of the
customers; stolen identification or password, dealing with a dishonest
merchant, arising disputes over transactions, inappropriate use of
transaction details, among others, while on the merchant’s side, the
fear of forged or copied instruments, disputed charges, insufficient
funds in customers account and unauthorised redistribution of purchased
items still remain.

Business experts
urge operators to be ahead of cyber crime by thinking ahead and
innovating technology that would knock down any improved attacks by
fraudsters.

eTranzact, a
multi-channel electronic transaction switching and mobile payment
processing platform company says it is continually seeking to develop
new technology that would strengthen security and surmount fraud
threats to e-payment.

“We were recently
granted a patent in respect of an invention, the eSA – eTransact Strong
Authentication, described and claimed in complete specification
deposited at the patent office in the Republic of South Africa” Kumbi
Olorun-rinu, Business Development manager, eTranzact International said.

“It is a two factor
authentication for automated teller machines, point of sale terminals,
mobile and web transactions. This generates one time PIN for use on any
electronic payment channels. The utilisation of static PIN as the
singular parameter for electronic transactions is increasingly becoming
fraud prone” Mrs Olorun-rinu added.

She said card cloning and PIN disclosure have been, and are still, threats to card transactions.

“By leveraging on the dynamic PIN generation, which the company has acquired, this threat can now be surmounted” she added.

The technology
leverages on using customers everyday tool, the mobile phone. It is a
solution that allows the user’s mobile phone to generate a secure
token, a dynamic pin as opposed to the static pin issued to the issuer.

Mrs. Olorun-rinu
said even if a customer falls for a phishing scam or cloned website and
gives away both user name and password a third party can never defraud
the customer because they wouldn’t have the dynamic PIN which has to be
generated from the mobile phone.

More sites

A source at Kalahari, another online shopping site, says it has not had cases of fraud till date.

“Up till now, we
have not had any cases of fraud, since we started this and I hope we do
not, as days go by. It’s not like we have any hidden strategy for this,
it’s all about being careful” the source said.

Kalahari is one of
Nigeria’s online retailers which offer books, music, DVDs, games among
others. It has top-selling products, local payment options,
door-to-door delivery, wish list facilities, vouchers, and free
gift-wrapping among other convenient shopping packages.

Deliveries range
from seven to 24 days, according to the products purchased, while costs
range from N2500, for a five kg product to as much as N7500 for a 10 kg
product.

Information on the
website states that customers not satisfied with their products may
return it within 14 days of receipt and that faulty or wrong product
could be exchanged.

Also, the site says
that if you are not satisfied with your choice and the product is still
in mint condition, you may return it and we will refund you the
purchase price (excluding delivery costs).

Quick teller is another e payment website that deals mainly in
payment of services, utility bills, booking of flights, mobile recharge
among others. The site which is powered by Interswitch says payments
would be acknowledged by the respective organisation immediately.

Prospective
investors in real estate have been advised to go for “house hunting”
during rainy season to ensure their desired properties are not prone to
flooding.

Some project
managers said the recent floods in some parts of the country call for
proper investment education on real estate acquisition, particularly
landed properties.

Olayemi Shonubi, a
quantity surveyor and project development consultant at DWAB
CostPrudence Company, a project management firm, said it is difficult
to get a signpost on flood levels for a particular neighbourhood unless
one has a friend or relations who is familiar with the place to ask
necessary questions as to level of flooding.

Proper inspection

Mr. Shonubi, who is
also the spokesperson for the Nigerian Institute of Quantity Surveyors,
Lagos Chapter said, “I have always jokingly though advised people that
the best time to go house hunting is at the peak of the rainy season,
which used to be the second week in June; that period will reveal areas
prone to flooding. But I reckon maybe with the benefit of hindsight,
the best time might be October after the release of water from Oyan
Dam.”

“It is my humble
opinion that prospective buyers should always, in course of their
viewing and inspection of any property prior to signifying interest in
same, look out for signs of rising damp as well as tell tale signs of
mark of previous flooding on walls -both in the interior and exterior
of the house as well as the fence,” he said.

Mr. Shonubi said if
the buyer is in doubt, the person should engage a competent
professional, preferably a building surveyor, to checkout for property
hunting clues and other defects before making any commitment on price.

Climate change

A building
consultant at TeeA Investment, a real estate management company, Toyin
Adedoyin, also said that the best time for investors to buy property is
during raining season.

Mr. Adedoyin said,
“We often tell our clients to be patient before paying for any
property, particularly those who like highbrow areas that are prone to
flooding. Because you like a water viewing house does not mean you
should risk your life.”

He said a proper
inspection and evaluation of the property must be carried out by
professionals before, during, and after raining season to assure safety
for the owners.

However, Mr.
Adedoyin said, “Some clients still don’t mind buying properties in
areas that are prone to flooding probably because those areas are
highly valued,” adding that “to those clients, flooding is not a new
phenomenon because they believe it’s a seasonal occurrence that will
soon pass away.”

Meanwhile, a recent
study by the Intergovernmental Panel on Climate Change (IPCC), an
organisation established by the United Nations Environment Programme
and the World Meteorological Organisation for the assessment of climate
change, shows that as the global temperatures continue to rise, many
cities will be threatened by flooding.

“As global
temperatures rise, oceans get warmer. And when water heats up, it
expands and sea levels rise. Densely populated, low-lying areas, such
as large river deltas and small islands, are at the greatest risk from
flooding,” IPCC warned.

Manageable situations

Jamiu Fatomi, a
retired real estate agent and a landlord in Lagos State, said areas
with flooding that occurs as a result of drainage problem are good for
prospective investors because such flooding is rectifiable.

Mr. Fatomi said
flooding in areas with drainage channels resulted from clogging of
those drainages. He said when people do not do the needful to ensure
the free flow of drainages in their areas, such attitude come back to
hurt them in the form of environmental problems like erosion and
flooding which will eventually result in loss of valuable property.

He said in many
part of the country, most drains are more than half full with refuse
from homes and shops, adding that when the rain comes the water has no
path through which to flow; it eventually takes over homes and roads as
pathways.

Mr. Fatomi said, “For such problem to be controlled, landlords must
ensure that their houses have the proper soak-away or septic system
that guarantees that every waste from the kitchen and bath goes into
the system.”