Nigeria Content Online

Last week, this
column addressed the issue of consumer promotion, which is to reward
consumer loyalty and sustain brand affinity. In that piece, the
differences between consumer and sales promotion were clearly
identified.

Sales promotion is
a direct inducement that offers extra values and incentives to the
consumer. Its major goal is to maximise sales volume and quicken the
sales process.

It comes through
reduction, discounts, commissions, and free sampling. It is an activity
that appeals more to the consumer’s purse, to make immediate purchase
decision of a specific brand.

Since it generates
sales that cannot be achieved by other means, it is important for brand
custodians to evolve a strategic action plan that deepens relationship
with the consumers. This is important because I have discovered
overtime that some companies embark on sales promotion without any
relationship with the consumer. I will give an example to illustrate.

I am a customer of
a highbrow fashion outlet, though I must state here that the outlet has
a good data base of customers, but it all ends there. My other details
such as birthdays, wedding anniversary, and others should have been
documented as well.

My case here is
that it should not only be during sales promotion that I receive text
messages. Sales promotion should be a coherent branding strategy that
is hinged on a beneficial relationship with the consumers. This way,
brand loyalty is sustained. When all these happen, sale promotion would
definitely achieve desired objectives, as the brand becomes the
property of the consumer.

Sales promotion and consumer insights

While it is true
that not all consumers can be captured, a sampling method could be
adopted which can represent the views of an average consumer.

The role of
consumer insights here is to generate leads that can make the sale
promotion succeed. Some of the key insights are to ask probing
questions about consumer preference in terms of incentives, the nature
of the promotion, timing, and brand perception. All these go a long way
to make the sales promotion succeed.

This is because
today’s consumers are more concerned about an offer or extra incentives
given by the brand, and not only a brand promise. The sales promotion
activity should build customer equity, deliver worthwhile experiences,
and deepen relationships. It is indeed a call to action to connect
directly with consumers.

The incentive in
any sales promotion should be one that would motivate the consumers,
who should derive maximum benefits. They feel the burden in their
purses and this should translate to enormous gains for them. They
should gain extra value for what they have invested in – the brand.

The issue of
negative perception should also be addressed right from inception of
the sales promotion. An error can occur along the line and this may not
be deliberate on the part of the company. It becomes important to put a
mechanism in place to proffer immediate response in order to avoid
negative perception. Several brands have been negatively projected due
to the lack of a pro-active communication.

Sales promotion
offers a veritable platform to build brand image and as a result, a lot
needs to be ensured to eliminate any form of negative perception. It is
also not a period to offer expired products for sale. Consumers have
been ripped off through such acts and that is why the Consumer Advocate
Forum has taken up the gauntlet to checkmate these act.

Any brand that
fails to live up to its promise will be dismissed and destroyed. The
only way to engage in genuine bonding and connection with consumers is
to develop long term relationship built on trust, respect, and mutual
benefit. Sales promotion is that springboard to build an enduring
relationship with consumers.

A new fellow of APCON

Tunji Olugbodi, a
versatile professional, is set to become a Fellow of the Advertising
Practitioners Council of Nigeria (APCON). Mr. Olugbodi is a credible
brand in the industry and one of the few professionals with integrity,
who practices according to the rules. Surely, he deserves the honour,
as he stands tall as a professional to the core. He has put in over two
decades in the marketing communications industry.

He started his own
agency, Verdant Zeal, in 2007, after 15 years with Prima Garnet Ogilvy,
where he was a factor in its success story, rising to become executive
director (brand management).

Congratulations to a worthy senior colleague and a professional par excellence.

Ayopo, a public relations specialist is the CEO of Shortlist Limited shortlistprspecialists@gmail.com

Since oil companies gained dominance of the world economic
system, literally driving the engines of industrialisation and modern fossil
civilisation, they have taken several steps that have endangered humanity. The
massive burning of fossil fuels, such as oil and gas, have contributed
immensely to the stoking of the atmosphere with greenhouse gases responsible
for global warming.

The sector is also known to have been responsible for environmental
and human rights abuses in the world. The presentation of their commodity as
the cheapest form of available energy has been sustained over a century by cost
externalization to the voiceless, whose environments have been heavily
assaulted. The energy wars that are sometimes masked as war on terror are also
well known. The contribution of oil companies to human misery is well
documented.

Although the leopard may not change its spots, the companies
have not been blind to the woes they generate. One of the steps they have taken
to cushion the impact of their harm has unfortunately been nothing more than
hogwash. One subtle way this has been done has been to plant into public minds
that they are not oil, but energy companies. The difference may be subtle, but
it seeks to erode the stink that the former name carries. We insist on calling
them by the name that best describes them and to avoid grouping them in the
same slot as clean energy producing companies.

Apart from change of nomenclature, the fossil fuel sector has
etched some oxymoron into public minds, making people accept clearly
contradictory terms as being logical. Take the example of clean coal. What is
that? There are others, but this is not our focus in this discussion today.

Voluntary Principles on
Security and Human Rights (VPs)

Some oil companies, including Shell and Chevron, have signed up
to what is known as Voluntary Principles, by which they solemnly declare how
they would change their corporate practices in the area of security and human
rights. See the principles at http://www.voluntaryprinciples.org/.

The question this raises is whether the endorsement of these
voluntary and non-binding principles has brought about any positive change. The
VPs are not even known to be in existence by many. We will touch briefly on
some key areas of the principles. You are urged to ask how those principles are
applied in Nigeria oil fields.

The companies say they will report payments made to security
forces or, in our case, to the Nigerian government for supply of security cover
for company operations. If such records were properly kept, it would be
possible for such companies to be held accountable where funds are tied to
incidents that resulted in human rights abuses. If a company pays money to the
military, for example, and the funds support an assault on a community, the
link should be transparently traceable for this clause to make sense.

A look at the Voluntary Principles appears to start from the
premise that oil company security depends on the actions of the country’s
security forces. This thinking has maintained the relationship with the
Nigerian military and police and continues to encourage abuse. It also often
precipitates clear acts of mayhem. Oil companies sometimes review their
security arrangements to determine if the relationship they have built with the
security forces has been a credit or a liability.

A review conducted by Chevron in 1999 found that Nigerian
security forces were actually more of a liability than a benefit, and that they
were prone to cause great harm both to Delta residents and company employees.
Shell, on its part admitted in a 2003 security review, that it had contributed
to the rise of conflict and corruption in the Delta region through its
relationship with security forces. The question is, what changes have they
made?

We submit here that if the official security forces provide a
safe atmosphere for ordinary citizens, corporate citizens would also enjoy the
same. Moreover, if oil companies maintain their equipment, operate with the
same standards they apply in their home countries, and respect community
rights, there would be no need for special security arrangements that must be
eating into their resources.

The voluntary principles also require that oil companies
communicate effectively on Human Rights Principles to security forces and
ensure proper training, and screening of known human rights abusers.

Security officers of corporations and public security forces are
often tied together in mutually dependent arrangements, whereby governments
take primary responsibility for security and the private entity provides
resources and logistical support. To what extent have the guidelines provided
in the Principles been used to ensure that the conduct of the forces abides by
human rights law?

Holding Individuals
Accountable

It is known that oil companies do keep security logs showing
records of security incidents as they occur at their facilities. They should
also be required to keep full records of incidents in which local residents are
injured or killed in confrontations with government security forces, acting to
secure the interest of the companies. Such incidents should also be reported
promptly and publicly. Individuals indicted should be held accountable.

The Voluntary Principles provide an opportunity for the Nigerian
legislative houses at the state and federal levels to take their provisions,
review, and enact them into law. The oil companies may have endorsed the
principles as a way of beefing up their public image and presenting the face of
companies that care about human rights.

Enacting same into law will encourage the companies to implement
them by making them mandatory principles. It will also help the companies to
bridge a part of the huge deficits they have accumulated in terms of
transparency in their activities.

In
a move to check currency speculation, the Central Bank of Nigeria (CBN)
has withdrawn the licences of the 50 Class A Bureau de Change (BDCs)
operating in the country.

A statement posted
on its website on Wednesday, and signed by Mohammed Abdullahi, the CBN
head of corporate communications, said the withdrawal, which takes
effect on November 8, is part of measures to stem the gross abuses of
the enhanced Class ‘A’ BDC, in line with its avowed commitment to
eradicate money laundering.

The Class ‘A’ BDCs,
whose licences have been withdrawn, are free to apply for Class ‘B’
licence, with the attendant privileges, by fulfilling the stipulated
licencing requirements, says the Central Bank.

“The CBN shall also, within 30 days, refund all mandatory caution deposits lodged with the Bank,” the statement added.

The Central Bank
had on February 26, 2009, restructured BDCs into categories A and B, in
order to further liberalise the foreign exchange market and enhance its
efficiency. The main objective was to facilitate end-user access to
foreign exchange supply from official sources in order to boost
economic growth by promoting productive efficiency of small and medium
scale enterprises.

Such BDCs were
expected to have a minimum capital of N500 million verifiable at all
times, a mandatory deposit of $200,000, non- interest bearing,
non-refundable application fee of N100, 000, licencing fee of N1
million, and annual renewal fee of N250,000.

Gross abuse

The CBN statement
said that the latest appraisal of the policy initiative has revealed
gross abuses of the enhanced official funding of the Class A category
of the BDCs and the negation of the expected benefits to the economy.

“Available
information also revealed that the target end-users have been
sidelined, while large transactions that should have been channelled
through the banking system have been carried out through Class ‘A’
BDCs,” the statement said.

The CBN said it has
also been inundated with complaints from foreign countries that some
Nigerian travellers indulge in cross-border transportation of large
sums of foreign currency in cash.

“Indeed, returns
from the Nigerian Customs Services on foreign currency declaration by
travellers show that large amounts, up to $3million cash, have been
taken out of the country by individuals in single trips.”

These, according to
the CBN, are worrisome developments that negate the expected benefits
from further liberalisation of the foreign exchange market.

Incidentally, the
CBN had said that the failure to fully comply with the anti-money
laundering law, among other laws and regulations and checking leakages
in the system, as reasons for classifying BDCs last year.

A
Central Bank deputy governor has said it is not true that the CBN gave
back licences to some microfinance banks after revocation, but only
gave them “provisional approval for three months.”

Kingsley Moghalu,
deputy governor, financial system stability, at an event in Lagos, on
Thursday, added that, “A revoked licence is a revoked licence, which is
impossible to amend. Microfinance banks licences were revoked, but
several of them complained saying that they have now recapitalised. We
know that about 99 percent of them recapitalised after the revocation,
not before.”

Mr. Moghalu added
that because the Central Bank wants to bring the industry into
compliance, “we said those who have recapitalised will be looked at and
given a provisional approval for a new licence. This has been the case
for about 121 microfinance banks. We’ve given them provisional approval
for three months.

“At the end of the
three months, we’ll do again a comprehensive review of their claims,
and if those claims are verified, we will issue them a new licence. And
they can maintain their names.”

The deputy governor
spoke at a business forum on ‘Global Perspectives on Financial
Inclusion’, organised by Enhancing Financial Innovation & Access
(EFInA), a non-profit research organisation, on Thursday.

Meanwhile, Lamido
Sanusi, the Central Bank governor, said in a paper at the event that,
“The Central Bank plans to focus on achieving a comprehensive financial
education and inclusion of unbanked Nigerians as a major strategic goal
beginning in 2011.”

In his paper, read
by Mr. Moghalu, Mr. Sanusi said the three important elements of
financial inclusion are education, products, and infrastructure; but
Nigerians should not “expect too much too soon”, because “financial
inclusion is a process, and not an event.”

Financial inclusion
is the delivery of financial services at affordable costs to vast
sections of disadvantaged and low income groups.

The governor added
that the Central Bank has set up a committee that will conceptualise a
framework for an effective financial literacy and consumer protection
programme in Nigeria.

“The committee has begun its work, and it is expected that a blueprint will be generated in the first quarter of 2011,” he said.

Banking beyond technology

At the forum, a
document, ‘EFInA Access to Financial Services in Nigeria -2010 Survey
Results’, was launched, with Modupe Ladipo, chief executive officer of
EFInA, disclosing that, “There are currently about 59 million unbanked
adults in the country. Banks should extend banking beyond branches
through technology,” in order to meet the unbanked population.”

She said the EFInA
survey is a nationally representative study of consumers’ perceptions
on financial services and issues, which creates insight to how
consumers source their income and manage their financial lives.

The EFInA 2010
survey covers the adult population across the 36 states and the Federal
Capital Territory, Abuja, with a target size of 22,200 households.

E-commerce, if given the right framework and infrastructure, has
the potential of aiding African countries and expanding the horizons of their
trading to a competitive level in the global village.

This was the consensus on Tuesday at the Kuramo Conference, an
international colloquium on trade, law, and economic development held in Lagos.

The conference participants agreed that with the right framework
and strategy, Africa can make a difference in her economic and trade climate if
she fully explored the benefits of e-commerce.

E-commerce is the buying and selling of products or services
over the Internet and other modes of computer networks.

Enver Daniels, the chief state legal adviser, South Africa, said
e-commerce has the potential to expand horizons of the African market.

Tackle infrastructural
challenge

However, for e-commerce to be successful, African countries must
address the attendant infrastructural challenges. Mr. Daniels said countries
must take up the responsibility of developing infrastructure locally, for trade
between countries to be successful.

“For instance, if you order for an item or items online from
Ghana, Ghana must have the right infrastructure in place that would aid the
movement of such orders to their destination, within the shortest time, and
Nigeria must in turn have the appropriate infrastructure to receive such
goods,” he said.

He added that countries must also develop their human capital,
adding that one of the major reasons militating against e-commerce success is
the lack of understanding of its attendant benefits.

Governor Babatunde Fashola of Lagos State said legislation must
also remove barriers to trade.

“A new legal order is now needed. There is the need to examine
the existing legal order for trade and commerce among nations,” Mr. Fashola
said.

He also challenged participants to set the agenda “here and now,
as regards the mechanism for a fair global regime.”

Emmanuel Ayoola, a retired Supreme Court justice and the
conference chairman, said it was a platform for the restoration of a nation,
and not another talk shop.

“It is a forum to define the path of a new national vision,
deploying application of knowledge and experience drawn from multifarious
disciplines as tools.

“It is the platform to launch the new order that is shaped by
right thinking, right values, right ideas and palpable commitment,” Mr. Ayoola
said.

The Nigerian Content Development and Monitoring Board says it is
determined to enforce provisions of the Nigerian Content Act for indigenous and
international oil companies operating in the country.

Ernest Nwapa, its executive secretary, said Monday, in Abuja, at
the 14th International Health, Safety and Environment (HSE) Biennial Conference
on the oil and gas industry in Nigeria, that this is part of government’s
imperative to realise the Nigerian content development agenda.

Mr. Nwapa said until 2004, there was very low local capacity in
Nigeria’s petroleum industry, with about 95 percent of goods and services
imported, while the introduction of the Nigerian Content Policy has improved
local capacity to about 35 percent.

He said government agenda is to identify and close all capacity
gap business opportunities in dry dock integration, shipyards, heavy
industries, pipe mills, equipment manufacturing, and service companies’
training in the industry.

Part of government’s expected impact on the national Gross
Domestic Product (GDP) in the next four years, the NCDMB scribe said, is to
ensure that at least $10 billion of an average annual petroleum industry
expenditure of $20 billion is retained within the local economy, while about
30,000 direct employment and training opportunities are domiciled in Nigeria
through the implementation of the policy.

To ensure that capacity building projects are not stifled by
lack of funding, he said government has launched the Nigerian Content
Development Fund (NCDF), a central pool of financing, in collaboration with the
Central Bank of Nigeria (CBN) and commercial banks, for certified beneficiaries.

Cost effectiveness

“Local capacity building will improve cost effectiveness and
certainty of supply by reversing the trend of 100,000 jobs currently created
abroad by the international oil companies, through the continued outsourcing of
service contracts to companies outside the country,” he said.

“Henceforth, government, through the provisions of the NCD Act,
would ensure that no other vessel is allowed to work if a vessel owned by a
Nigerian working in the nation’s oil and gas industry is not put to work first.
Any equipment working in Nigeria must be partly-owned by a Nigerian before it
is allowed to work.

“This is the only way to reverse the current practice where nine
out of 10 cents paid for equipment in the industry are not domiciled in
Nigeria,” he said.

However, John Mpi, manager, business development, Nigerian Agip
Oil Company (NAOC), however, expressed skepticism over the policy prospects, if
government does not pay serious attention to human capacity development issues.

Mr. Mpi said it is sad that the industry has nothing significant
to show for its 50 years of existence, saying there is need for the indigenous
companies to model their operations after the successful international oil
companies, in terms of setting key performance indicators to measure their
success and growth as well as strict supervision.

Leading economies should consider adopting a modified global
gold standard to guide currency rates, World Bank president, Robert Zoellick,
said on Monday in a surprise proposal before a potentially acrimonious G20
summit.

Writing in the Financial Times, Mr. Zoellick called for a
“Bretton Woods II” system of floating currencies as a successor to the Bretton
Woods fixed-exchange rate regime that broke down in the early 1970s.

The former U.S. trade representative, who served in several
Republican administrations, said such a move “is likely to need to involve the
dollar, the euro, the yen, the pound and (a yuan) that moves towards
internationalisation and then an open capital account.

“The system should also consider employing gold as an
international reference point of market expectations about inflation,
deflation, and future currency values,” he added.However, analysts were
cautious.

“Going forward, that would be something that we could look
towards, but it’s not going to happen within a short period of time,” said Ong
Yi Ling, analyst at Phillip Futures in Singapore, adding that gold prices
barely reacted to the comments.

Gold briefly hit a record high of $1,398.35 an ounce in early
trade on Monday on concerns of a continued weakening dollar trend, after the
U.S. Federal Reserve last week acted to resume buying treasuries.

Summit acrimony?

That policy has fed acrimony among leading economies in the
Group of 20 in the run-up to their summit in Seoul on Wednesday and Thursday.

China and Germany, major exporting nations, have both decried
the Fed’s quantitative easing – effectively printing money – which is weakening
the dollar.

Investors are pumping dollars into emerging markets in search of
higher yields, and the potentially destabilising impact of this, along with big
current account deficits and surpluses, as well as China’s reluctance to let
the yuan appreciate faster, are set to dominate the G20 debate.

France, which takes over the G20 chair after this week’s summit,
says it plans to work on a new international monetary system to bring greater
currency stability.

Beijing’s central bank chief has suggested an alternative
monetary system based on using the International Monetary Fund’s Special
Drawing Rights, a notional unit of value based on a basket of major currencies,
instead of the dollar as the sole global reserve currency.

Mr. Zoellick was a senior official in the U.S. Treasury at the
time of the 1985 Plaza and 1987 Louvre Accords on rebalancing currencies among
major industrialised nations. He noted that that phase of currency coordination
helped launch the Uruguay Round of world trade liberalisation negotiations.

While his opinion article in the Financial Times did not
represent either U.S. or World Bank policy, it may reflect a greater openness
in Washington than in the last two decades to some form of international
currency cooperation.

“The dollar is losing its relevance, especially with the
emergence of Asia economies, so a more neutral benchmark may be required. Gold,
amid all the recent uncertainty, is proving its worth,” said ANZ’s senior
commodity analyst, Mark Pervan.

Gold retreated to around $1,390 an ounce by 1000 GMT as
speculators booked profits.

Mr. Zoellick said a new monetary system would take time to
develop and should be part of a package approach, including possible changes in
IMF rules to review capital as well as current account policies, and linking
IMF monetary assessments to World Trade Organisation obligations.

The dollar rose sharply on Monday as unwinding of dollar short
positions that began with solid U.S. jobs data snowballed, pushing down the
euro to its lowest level since the Fed embarked on fresh easing last week.

The burden of monitoring how states disburse proceeds from the
bond market remains that of the citizens. This admonition is coming as more
states have approached the bond market in the last few months to raise funds
while others are lined up to also access funds from the capital market.

Abraham Nwankwo, the Director General of the Debt Management
Office (DMO), said even though the Securities and Exchange Commission (SEC) has
the primary responsibility to ensure that states utilize such proceeds for the
purpose they are meant for, the citizens are empowered by the Constitution to
question government on how state funds are utilised.

According to the figures from the Nigerian Stock Exchange, 12
states, from 1999 to date, have raised about N374.6 billion from the bond
market. In the last one year, Imo, Bayelsa, Kaduna, and Ebonyi have approached
the capital market to raise N18 billion, N50 billion, N8.5 billion and N20
billion.

The Act

“The Fiscal Responsibility Act gives you as an individual or
organisation the locus standi to go to court to ask a public officer or
institution to explain why he is in contravention of the law. We are tired of
Nigerians complaining in the air. Once you have your facts, go to court and
complain,” Mr Nwankwo said

Part 12 (52) of the Act states that “A person shall have legal
capacity to enforce the provision of this Act by obtaining prerogative orders
or other remedies at the Federal High Court, without having to show any special
particular interest.” Mr Nwankwo said no state can raise funds from the bond
market without meeting the guidelines of SEC.

Lanre Oloyi, spokesperson of the Securities and Exchange
Commission (SEC), however, said state governments that raise funds from the
bond market are expected to deploy the proceeds for that which they stated it
would be used for. “There have not been any issues about funds
misappropriation,” he said. “The market is rule based and due process must be
followed and complied with. If there are instance of states not acting
responsibly, they would have been so advised.” He added that SEC has the
responsibility to ensure that states use the funds judiciously, adding that the
commission conducts monitoring exercise and on-the-spot assessment.

Self regulation

Mr Nwankwo said there should be self regulation and self
monitoring. “That is why we are trying to help every state to have a capable
debt management office so that in the next two years instead of asking us, you
should ask the debt management office in your state,” he said. “It is the
responsibility of all of us to demand explanation of how funds are managed.”

He also explained that 13 states spread across the six geo-political zones
have completed their domestic debt data reconstruction (DDR) exercise working
in collaboration with the DMO. This provides a harmonized computerized total
debt data base which indicates total state debt obligations and other state
commitments at a specific period in time. He said the 13 states so far have a
cumulative debt profile of N200 billion. “By the end of December 2010, the DDR
exercise will have been completed for 16 states while by year 2012, the
exercise would have been completed by all the 36 states of the federation,” he
said.