Nigeria Content Online

You’ve probably heard of the world’s
most popular classified site, Craigslist and UK’s Gumtree. Both sites offer
buyers and sellers an opportunity to engage in a free and open market.

With the success of these sites in
their respective countries and beyond, Nigerian entrepreneurs are keying into
the online classified market. Today there are probably more than 50
classified sites in Nigeria offering the same service, but with different
business models and technical functionality.

Some of the local classified sites
include Nairalist.com, Dealfish, Txtoweb.com, Chukslist.com, Gbogbo.com and WhoGoBuy.
Others are Kalahari, Flegz, Buyright, YesideFashionStore.com and Shopaholic. On the other hand, some other Nigerian sites offer online classified ad
listings in addition to their other products and services. Just like other
classified ads sites, they all have one thing in common: offer buyers and
sellers an opportunity to engage in a free and open market.

Some of these classified ads sites
were launched due to the success of the leading classified sites such as
Craigslist, Gumtree and Kijiji. Their success can be measured in terms of the
great value they provide to local businesses and individuals who wish to buy
and/or sell their items online from cars to phones.

In terms of revenue, we can say that
the online classified market has seen tremendous success. In 2007, reports
estimated Craigslist’s revenue at $150 million, with its sole source of
revenue from paid job ads in selected cities.

On the other hand, Craigslist has
witnessed a great deal of criticism, notable among which is an appeal in August
2007 by Atlanta’s Mayor, Shirley Franklin to take steps to avoid unwittingly
enabling child prostitution through its classified ads.

There have also been allegations by
several US states that the “Erotic services” ads on Craigslist were being used
for prostitution. On May 13, 2009, Craigslist announced that it will close the
‘Erotic services’ section, replacing it with an ‘adult services’ section where
the postings will be reviewed by Craigslist employees, while postings to the
new category cost $10 and can be renewed for $5.

In Nigeria, classified ads sites
have their own stories to tell. Some have packed up shop because of a lack of
the right business/marketing strategy and/or sustainable business models. Other
reasons have been due to a breach of trust from buyers and sellers as well as
third-party clients.

Others have had issues with using
the right programming languages and the right functionality, spam-resistance
and security features needed to sustain such sites. For example, WhoGoBuy
(launched in late 2005) built their site using ASP initially, then
migrated to ASP.net about a year later, and then moved over to PHP a few months
after.

In March 2010, the founder of Nairalist.com,
Seun Osewa asked some very interesting questions: Should Nairalist have
been packaged as a software product and not a new website? How many
Craigslist(s) can Nigeria (or the world) accommodate?

The Google Buzz topic generated a
lot of reactions which provided suggestions on how Nairalist can be improved.
One of the best suggestions was that Nairalist should be turned into a Facebook
application that allows people to put stuffs they want to sell and share it
with their friends and their friends can share it with their own friends too.

Despite these challenges, these
online classified sites still offer this service all for FREE, unlike some
Nigerian newspapers and WASEET, Nigeria’s first weekly classified ads
publication that charge a fee for posting classified ads.

Perhaps one of the biggest
challenges that the online marketplace faces is the issue of trust. According
to Fritz Ekwoge, founder of Kerawa.com, one of the leading
African classifieds site: “The Nigerian classifieds business is a business
of trust. And trust takes years.”

He also stated that when Craig
Newmark started Craigslist in 1995, it took him about five years to open in
another city. Being the first to market, he is benefiting from the fruits of
his labour. Ekwoge believes that the Nigerian classifieds market is growing and
will boom financially too as it has done in other developed countries.

But the question is: How trustworthy
can it get? Are there any trustworthy classified sites out there? Share your
experiences.

Over the long
Easter weekend, I dwelt in the cusp of several dilemmas. There was the
undeniable challenge of the national political choice. But it was with
a lower order problem that I did the greater battle. Riven between, on
one hand, the modern day understanding of the role of the public sector
in an economy, and on the other, a vivid recollection of a
not-too-long-ago past, when all services were provided by the public
sector, I tried to imagine an agenda for the sector’s reform.

The first horn of
this particular dilemma is an argument in favour of a small state. Here
the private sector provides everything within a competitive market
economy. In this context, the state is allowed free rein only in those
areas where a natural monopoly exists, the positive externalities
arising from the provision are too vast to lure private providers, or a
market failure exists.

Otherwise, the
state is most efficient as a regulator of the market: ensuring free
entry and exit, and protecting consumers against price-fixing and
related collusive practices by industry.

The second horn
seemed nostalgic. Or, was it? Add the Tuesday break from work for the
governorship elections, and the whole Easter break was of five days
when electricity from the mains was noticeable by its absence. In the
teeth of the obvious incompetence of PHCN (the yet-to-be-privatised
public monopoly that provides electricity nationwide) it was kind of
difficult persuading my teen daughter that time was when NEPA (that’s
what the monopoly provider used to be called) announced power outages
days in advance; and when the light was turned off as announced and
turned on on cue. A lot less credible in the light of today’s
experiences, is the fact that it was our practice as teens to report
unannounced electricity outages to NEPA; and that having logged the
fault, the service operator would inform that a “fault vehicle” will be
“there” in 30 minutes. Invariably, the service vehicle arrived on
schedule. It was important, growing up, that we knew by heart the
number on the poles that brought light into our homes, and NEPA’s fault
complaints phone lines.

There was therefore
a time when the public sector “delivered”. Now, there may have been
issues with its balance sheet. In other words, the services we enjoyed
in those days may have been provided below the rate at which the market
would ordinarily have cleared the demand for and the supply of such
services (were these to have been left in the hands of private sector
providers). This difference between the rate at which the public sector
provided its services and the putative private sector rate (the
now-famous “subsidy”, which every public policy neophyte would want
removed in today’s thinking) was not without its uses. It would have
helped if all that time these costs were properly captured in the
national accounts and the choices we made happened because we’d
compared their implications for the budget with the intended gains.

Despite the current
narrative, the haemorrhage from such “subsidies” did not lead to the
subsequent incapacitation of the public sector as a service provider.
Indeed, the emergence of millionaire civil servants belies this
possibility. The services failed for less honourable reasons. The point
was reached where public investment in new capacity tailed off, even as
ill-focussed public policy choices drove a phenomenal growth in demand
for these services. As the debate in the US over how to keep public
spending within limits has shown, key parts of the services enjoyed
there is the result of public provision. To some extent, therefore, the
public sector is not as remiss as we want to depict it. Tony Blair,
writing on his tenure as prime minister of the UK, put it most
graphically: “The truth was that the whole distinction between public
and private sector was bogus at all points other than one: a service
you paid for; and one you got free. That point is obviously central –
it defines public service. But it doesn’t define how it is run, managed
and operated. In other words, that point is critical, but at all other
points, the same rules apply for public and private sector alike, and
those points matter enormously.”

Some African and global leaders will be participating in the 21st World Economic Forum (WEF) in Cape Town, South Africa to chart a new course on Africa’s development.

The Forum, to be hosted by South Africa’s President, Jacob Zuma, between May 4 and 6, will feature more than 900 participants from over 60 countries, including Nigeria, deliberating on the theme: “From Vision to Action, Africa’s Next Chapter.”

Business leaders and government and civil society representatives would explore opportunities and risks facing the continent’s development, with primary focus on three thematic pillars: Shaping Africa’s Role in the New Reality; Fostering Africa’s New Champions of Growth; and Building Partnerships for Inclusive Development.

Apart from the formal launch of ‘The Africa Competitiveness Report’ by the World Bank to highlight the continent’s progress over the past year as well as identify major recommendations to African leaders and its international partners, participants will examine the region’s position in the new reality and identify opportunities to accelerate and sustain its transition to inclusive, investment-driven growth.

Others who have also confirmed their interest in the forum include, former Nigerian President, Olusegun Obasanjo; Faure Gnassingbé of Togo; Armando Emilio Guebuza (Mozambique); Jakaya Kikwete (Tanzania); Raila Amolo Odinga (Kenya); Ali Bongo Ondimba (Gabon) and Morgan Tsvangirai (Zimbabwe).

Those expected

Regional and international leaders expected to feature include former Secretary-General, United Nations, Kofi Annan; Deputy Prime Minister and Minister of Foreign Affairs of Ethiopia, Hailemariam Desalegn; Vice-President, Africa Region, World Bank, Obiageli Ezekwesili; President, African Development Bank (ADB), Donald Kaberuka, Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi and Minister of Commerce and Industry of India, Anand Sharma.

“Africa is poised for take-off. Sub-Saharan Africa is already one of the top performing regions in the world. Having come through the economic global crisis with resilience, the international community is interested in its growth opportunities. The World Economic Forum on Africa will be an opportunity for key leaders from the region and beyond to discuss how this growing confidence in Africa’s potential can be translated into action and results,” Director, Head of Africa, WEF, Katherine Tweedie, said.

Seven young social activists from South Africa, Tanzania, Ethiopia, Kenya, Uganda, Switzerland, and the United Kingdom, under the aegis of the British Council’s Global Changemakers initiative are expected to join other in creating awareness among decision-makers’ on the key global agenda, to help spread best practices in youth-led development.

Global Changemakers is a network of young social entrepreneurs and community activists from 110 countries world-wide who come together to build their skills, share ideas, and work together on projects that directly impact the lives of those in their communities.

Managing Director, Nigeria Export-Import Bank, Robert Orya, said in Abuja at the weekend that the Nigerian contingent hopes to utilise the opportunity to build on the country’s rising investor rating on the heels of positive outcome of the recent elections by unleashing an aggressive drive for foreign investments in key sectors of the economy.

Gold surged to a
record high on Friday for the third straight day, as investors kept up
a buying frenzy fuelled by the outlook for low U.S. interest rates that
has propelled bullion to its seventh consecutive weekly rise, its
longest winning streak since 2007.

Bullion jumped to
$1,569.30 an ounce as U.S. consumer spending rose for a ninth straight
month in March with inflation at its highest in nearly a year.

Platinum group metals also rose about 2 percent but silver fell 1 percent after soaring to record high in the previous session.

Option traders
reported strong buying of call options and call spreads, reflecting
bullish market expectations. A gauge of bullion market volatility also
spiked in response to a sharp price rally.

“What has been
driving gold is an abundance of liquidity of Fed policy that remains
exceedingly accommodative, which is going to work against the U.S.
dollar,” said Mark Luschini, chief investment strategist of
broker-dealer Janney Montgomery Scott, which manages $53 billion in
client assets.

“There is worry
that inflation, which is not a problem right now, could escalate to
become one. And once it does, it becomes very difficult to put the
genie back into the bottle,” he said.

The CBOE gold volatility index, which measures bullion investor anxiety, rose 6 percent to its highest level in five weeks.

Spot gold was last
up 1.8 percent at $1,563.30 an ounce by 5 p.m. EDT (2100 GMT), having
earlier hit an all-time high $1,569.30. The metal notched a 9 percent
monthly gain, its strongest since November. Bullion also posted its
seventh consecutive weekly rise, its longest winning streak since 2007.

U.S. June futures
settled up 1.7 percent at $1,556.40 an ounce, with trading volumes
about one-third below its 30-day average due to a public holiday in
London.

On the options
front, heavy buying of outright call options and bull call spreads of
June 2012 calls with strikes $1,800 and $2,000, said COMEX gold options
floor trader Jonathan Jossen.

Bull call spread is
an option play involving the buying of calls at one strike price while
selling them at a higher strike with the same expiration date.
Investors often expect prices to rise moderately with the strategy.

A slight drop in
the dollar also contributed to bullion’s gains. Earlier in the week,
expectations of further weakness in the dollar were the biggest drive
for gold and silver rallies to records.

Silver retreats from record

Silver retreated
from the record high it set Thursday, but was still by far the
best-performing commodity in April and so far in 2011. It posted a near
27 percent rise in April, its biggest monthly gain since April 1987.

Silver was last down 0.8 percent at $48.03 an ounce.

Silver gained 3
percent this week, although analysts say its robust performance against
the other precious metals may not be sustainable.

“If silver doesn’t
make a new high and sustain above that, it may go through a more
vicious correction here. So, gold in the short term could go down in
sympathy of that,” said James Dailey, portfolio manager of the TEAM
Asset Strategy Fund.

Speculators scaled
back their bullish bets in COMEX silver futures and options to the
lowest level since early February, even as prices neared the
psychological $50 an ounce, regulator data showed Friday.

The CME Group Inc,
parent of the Chicago Board of Trade, said on Thursday it would raise
maintenance margins for silver futures by 13.2 percent, its second time
this week, making it more expensive for silver speculators to trade in.

Reuters

Bank lending should rise significantly in the second quarter of the financial year once the April 2011 elections, which have prompted a slowdown, are over, according to Bisi Onasanya, group managing director and chief executive officer of First Bank Nigeria.

Mr Onasanya told Oxford Business Group (OBG), a consultancy firm, that financial risk exercises undertaken last year by the Central Bank of Nigeria (CBN) and the April elections had both contributed to a dip in loan growth.

Figures show that lending growth turned a corner to reach 5 percent by the end of last year after plummeting in the wake of the 2008 global financial crisis, which was exacerbated in Nigeria by troubles in the domestic banking sector.

“Lending growth was suppressed last year, partly due to a conservative response from banks following the stress test which the CBN conducted in 2010,” he said. “The elections are slowing loan growth for the first half of 2011, but there will be a major increase after elections in April. I expect loan growth of 10 percent in 2011, which is double the 5 percent figure for 2010.”

Businesses face challenges

Mr Onasanya acknowledged that businesses in Nigeria still faced an uphill struggle to obtain credit from banks, despite CBN Governor Lamido Sanusi’s high-profile campaign to encourage growth by stimulating Small and Medium Enterprise financing. He believes banks are unlikely to increase lending to smaller businesses, which are viewed as a higher risk than big corporations, unless lending rules are relaxed.

“Although SMEs have access to some credit, the risk tolerance limit is too high,” he said. “The banks can’t be blamed since they have to meet provisions when the CBN tests their portfolios. The government and the Central Bank should consider implementing risk sharing to increase the flow of credit to higher risk areas.” With bidding for Nigeria’s unhealthy banks drawing nearer, Mr Onasanya highlighted the importance of ensuring that the selling process was clearly laid out in a framework if legal wrangles and lengthy court cases were to be avoided.

Ten of Nigeria’s banks are up for sale after they failed to meet standards set out in an audit undertaken by the CBN in the wake of the 2008 crisis. The move is set to bring consolidation to the sector, with observers expecting the process to reduce the number of players to 15.

“Due process must be followed involving the boards of directors and shareholders,” he said. “Otherwise, if the distressed banks are sold by the CBN rather than by the actual owners, each acquisition will go into irreconcilable litigation.”