Nigeria Content Online

FinBank on Wednesday asked an Abuja High Court to dismiss an N850 million lawsuit accusing it of defaulting on a loan agreement.

The bank is being sued by Osino Holdings LTD, an indigenous company, for fraud and deceit over the non-payment of a loan.

At the resumed
hearing of the case on Tuesday, the presiding judge, Olasunbo Goodluck,
granted the bank an extension of time to file its statement of defence,
and a hearing fixed for September 28.

History of the case

Osino Holdings said
that on January 21, 2008, it applied for a loan of N130 million through
the bank so that it could buy the Goldstar Petroleum Station in Kaduna.
According to the chairman of the company, Emmanuel Osita Okereke, the
bank asked for a N30 million equity contribution and promised to pay
out the loan within a few days.

“I made several
trips to Lagos to hold meetings with the bank’s group head of private
banking, Chinwe Attanbansi,” said Mr. Okereke.

“It was in one of
such meetings that she assured me that as soon as the [my company] can
pay its equity contribution, the loan would be disbursed to it,” he
said.

Mr. Okereke said a
bank draft of N30 million was issued to the bank on May 13, 2008,
though it was not cashed until June 23 – over a month after the draft
was handed over. After the bank’s assurances of the disbursement of the
loan, the company started to invest in the Kaduna filling station.

However, he said
that after payment, the bank insisted on evidence of landed property as
collateral for the loan. The chairman said he complied with the request
for additional collateral, but said that as at December 2009, he had
still not received any money from the loan.

“The defendants’
refusal or neglect to disburse the loan as assured, has led to the
plaintiff’s heavy loss on investment in the said Goldstar Filling
Station in Kaduna,” read court documents.

Mr. Okereke accused
the bank of collecting the draft from his company for almost two years
to boost its profile. Osino Holdings LTD is now asking the court to ask
the bank to reimburse its N30 million equity contribution at the
current lending rate. The company is also asking the bank to pay it
N850 million as general damages for the loss it suffered during the
transaction.

Emotional appeal in advertising is known as Emotional Selling
Proposition (ESP). A brand thrives when it forges powerful emotional bond with
consumers. Emotional appeal makes consumers have intimate relationship with
brands. Since a brand comprises emotional and physical attributes that appeal
to the consumers’ minds and hearts, the use of emotional appeal inspires and
moves them into action.

Recently, brands tend to utilise emotional appeal more to
resonate with consumers. Though one does not have any empirical data to support
this claim, the way such communication campaigns inspire the audience cannot be
underestimated.

Over the years, some brands have deployed emotional appeal as a
platform to build connection and sustain brand loyalty. Through this, consumers
assume ownership of the brand and they build their lives around it. Such brand
provides desired emotional benefits for the consumers. This goes a long way in
making brands evoke feelings in consumers, which ultimately influence their
purchase decision.

Emotional appeal is a powerful thing and it creates a lasting
bond between the consumers and such brands. When the Skye Bank campaign broke
some years ago, it was one that made a unique connection with consumers. The
campaign was one that not everyone believed it revolved round a financial
institution. It was a total departure from selling service and products
offerings to the consumers. It was one that significantly leveraged emotional
appeal to arouse consumer’s interest.

It is also worthy of note that successful brands thrive because
they offer consumers something that they want and need, something that is
beneficial and relevant to their lives. This should be the thrust of any brand
campaign that is hinged on emotional appeal. This is because many consumers
increasingly use brands as a means of self expression. This was the scenario
when it was discovered that several people downloaded the Hakuna Matata song
used in the Skye Bank advert as ringing tones.

Resonance with audience

The Skye Bank campaign on Hakuna Matata, meaning ‘no worries’,
is one that resonates with the target audience, as it identified with the
yearnings and aspirations of the consumers. Hakuna Matata later became a slogan
for several people, even when they pass through life’s challenges. It is an
emotional appeal that clearly tells the consumers, ‘no matter what happens, do
not worry’. The bank hinged on this appeal to assure customers of its readiness
to make banking a stress-free activity for them. With this strong emotive
platform, the bank was able to capture the minds of the customers.

The bank, basking on the success of the Hakuna Matata campaign,
further reinforced its brand message through the ‘Say Yes’ campaign. This is
one that seeks to tell the audience in clear terms that they should be positive
in life. The bank positions itself as a worthy friend to the customers, sharing
their dreams, and telling them it is only Skye Bank that is a true friend. The
platform is hinged on Emotional Selling Proposition, which evokes feelings of
the consumers to have positive spirit all times. The radio jingle ‘I wish I
have a friend, saying Yes to My Dreams’ became a sing along for everyone.

Succinctly put, the consumer can have possibilities if only he
or she thinks about it. He should just believe everything about his life is
possible when he says YES – which means he should just believe in himself and
his potentials. The campaign, even though now rested, is one that really leveraged
on the impact of emotive appeal that can be forgotten in a hurry. The new
campaign tells the audience ‘How Can We Say Yes To You’. This also positions
the bank as a dependable friend that can shoulder the burden of the cosumers.

Diamond Bank is also joining the fray of leveraging on Emotional
Selling Proposition to reach out to all segments of the society.

Though Emotional Selling Proposition goes the extra mile in
building brand loyalty and creating emotional attachment with consumers, it
should also align with the brand promise. Such campaigns can only translate to
success when consumer experience of the brand brings satisfaction and
fulfilment.

The Nigerian Export Promotion Council (NEPC) will host Nigeria’s
first non-oil exports conference, exhibition, and awards.

It is designed to provide a forum for private-public sectors
dialogue on trade policies, export incentives, and challenges aimed at
facilitating the country’s drive to become one of the top 20 economies by the
year 2020.

The expo, which is expected to come in the mould of the now
popular annual Nigeria Oil and Gas (NOG) conference/exhibitions, would showcase
the opportunities in the non-oil sector of the country’s economy, with a view
to providing incentives to local investors, as well as attracting
export-oriented international firms to the country.

“As a country that has set for itself the target of becoming one
of the world’s top 20 developed economies by 2020, Nigeria’s ranking in the
global economic development index is not going to be oil and gas-based, rather
on the quantum of its participation in world trade activities,” Femi Boyede,
the chief executive, Koinonia Ventures Limited, the collaborating export
consultancy firm for the conference, said yesterday in Abuja.

With the theme: ‘Non-Oil Exports: the Road to Nigeria’s Vision
20-2020′, it will focus on training and human development, export management
services, export incentives processing, export development, impact assessment
of government policies, as well as government policy strategies and
implementation for the non-oil export sector.

The time is now

Mr. Aboyede said the time is ripe for a platform for local and
foreign investors on an annual basis to focus global attention on the country’s
non-oil export sector, describing it as the main driver of Nigeria’s economy
and the main road towards the achievement of economic vision in the next ten
years.

“This is the only way to show that Nigeria is actually charting
a course for the realisation of the Vision 20-2020 objectives. Every year,
Nigerians spend huge foreign exchange to attend such events as INDABA, the
minerals sector development event in South Africa, and the Offshore Technology
Conference (OTC) in Houston, for the oil and gas technology.

“It is time for Nigeria to also have an annual programme that
would attract the global community to gather and talk about its vast non-oil
sector potentials and opportunities,” he declared.

The exhibition, he said, will showcase not only existing export
products, but also potential export products and services that go out of
Nigeria to the world, including an array of Nigeria’s agricultural commodities,
ethnic crafts, herbal products, foods, as well as diverse range of goods
available for exports.

“The exhibition is not for the companies to beat their chest
that they have arrived, but also a capacity building exercise, where up and
coming exporters are able to see what the more advanced and technologically
equipped ones are doing, as well as to learn from the international
participants how to move the non-oil sector forward, particularly on how to
adapt their products to suit the international market place and enhance
competitiveness,” he explained.

He stressed the need for Nigerians to begin to accord
recognition and encouragement to those companies that defy all the challenges
of infrastructural inefficiency and deficiency as well as high cost of doing
business in Nigeria, to promote the country’s name in the global export map,
saying the awards to 20 indigenous firms during the event would be to recognise
them as performers in the export industry.

Agencies of government said curbing the menace of counterfeit
products in Nigeria is difficult, but they are thinking ahead of government’s
strategies to control the situation.

Speaking at an ‘Anti-counterfeit Media Roundtable’, organised by
Nokia in Lagos last Tuesday, Adewunmi Richard, group head,
electrical/electronics, Standards Organisation of Nigeria, said that
counterfeit problem is difficult for agencies to tackle because by the time
government sets up a way to control the problem, some Nigerians are looking for
another way to outsmart government.

“Counterfeiting is an imitation that is made usually with intent
or deceptively represents its content or origin. When you look at all its
features, it looks the same as an original,” Mr. Richard said at the event.

“The SON tried to devise other means to control counterfeit products
from coming into the country via its SONCAP certificate, but I am sorry to tell
you that as at today, we discovered two weeks ago some people opened an office
in Abuja to forge SONCAP certificate.That is their business, and they know how
to formulate all the security features for the dealers,” added Mr. Richard.

Technology is worst hit

Mr. Richard explained that counterfeit issues are very
predominant in the technology and electronic sector in the country.

“There are some mobile phones, if you make a call for five
minutes, the phone is placed far away from your ears because it is very hot.
The auto speaker in your handset is made of coil; if the quality of the coil is
not good, what it means is that the more you talk the more it heats up the
coil. The heat transmitted to the body from the handset could be harmful to the
user,” he said.

Ify Umenyi, the director general of Consumer Protection Council
(CPC), said, “The ill of counterfeiting is sometimes perceived by society as a
victimless crime, with ‘fakes’ simply constituting a cheap alternative
purchase. At times, consumers are constrained by ignorance, inability to detect
counterfeit products, and poverty.

“Incidentally, consumers opt for substandard or counterfeit
mobile handsets, often referred to as ‘China phones’, because they are
seemingly cheap and look exactly like the originals,” added Ms. Umenyi.

Also commenting on the issue, Timi Bomodi, the spokesperson for
the Nigeria Customs Service (NCS), said that counterfeiting is a major concern
to governments and institutions worldwide because of its implications.

The gathering agreed that government agencies and consumers must
come together to fight the menace.

“Where there is co-operation between the public and the private
sector, it becomes difficult for counterfeiters and the dealers in counterfeit
goods to thrive. We should, therefore, join forces to make Nigeria counterfeit
proof,” said Mr. Bomodi.

The Central Bank of Nigeria (CBN) said yesterday that banks’
overhead costs would go down by about 30 percent in the next three years if
their managements build independent sources of power supply for their
operations.

Lamido Sanusi, the bank governor, said at the 4th annual banking
and finance conference in Abuja that Central Bank will provide support and
encouragement to facilitate this initiative.

Mr. Sanusi, who spoke on the topic ‘Evolving financial
landscape: Strategies for economic resilience”, said:

“Given the criticality of efficiency to cost of funds, the CBN
has recently started a shared services project, in collaboration with banks,
aimed at centralising back offices and the industrialisation of common
processes.

“In the next three years, we will reduce overhead costs in the
banking industry by 30 percent. We are also working towards establishing an IPP
for independent power supply for all banks operating in Lagos as a pilot
cluster.”

The governor added that the recent decision to review the
universal banking model adopted in 2001, was to enable banks re-examine their
existing business models to identify their strengths and see what opportunities
they could apply to enhance maximum returns.

He told the participants, including vice president, Namadi
Sambo; president of the Chartered Institute of Bankers of Nigeria, Laoye
Jaiyeola; Accountant General of the Federation (AGF), Ibrahim Dankwaabo, and
managing directors of banks, as well as their counterparts in the financial
services sector, that the financial system is experiencing stability, pointing
out that Nigeria is the only country that witnessed a banking sector crisis
during the global economic crisis without a depositor losing money.

More efficient industry

Mr. Sambo noted the pivotal role of the Central Bank in the
implementation of the power sector reforms, pointing out that the Federal
Government will continue to support its efforts to ensure market discipline in
the financial sector.

“The Federal Government identifies with the CBN reforms at
repositioning the banking sector, and it is our hope that a more efficient
banking industry will emerge from the whole exercise,” Mr. Sambo said,
underscoring the need for all to continue to rally round the Central Bank to
support the sector by ensuring market-driven competition, as well as bringing
greater efficiency of the banking industry and the economy at large.

Mr. Sambo assured that government would give all the support
needed to encourage the real sector achieve single digit rate, adding, “We need
to address power to ensure that power is stable. We have expended N10 billion
on thermal plants for distribution to sub stations.”

He challenged participants to take the opportunity of the
conference to take a critical look at the country’s financial system and come
up with ideas to support its safety and soundness, pointing out that this would
not only help the system withstand both internal and external shocks, but would
enhance the confidence of both the depositors and investors.

Repairs to sabotaged oil facilities in the Niger Delta will help to push exports of Nigeria’s benchmark crude oil to the highest since early-2008, trade sources said on Friday.

According to preliminary loading programmes, Bonny Light output will average 285,000 barrels per day (bpd) in November, up from 245,000 bpd planned in October.

Production of the gasoline-rich crude has long been hampered by militant sabotage on vulnerable pipelines and platforms in the oil-rich wetland region, the heartland of Africa’s biggest oil and gas industry.

Sabotage attacks heightened in intensity in mid-2008 and operator Royal Dutch Shell (RDSa.L) has struggled to recapture prior output levels ever since.

But a government amnesty last year, which saw thousands of former militants hand over weapons in return for clemency, brought a halt to attacks, encouraging Shell to repair damaged infrastructure and build a new pipeline.

Bonny Light output reached a peak of nearly 500,000 bpd in 2005 when it accounted for nearly one-fifth of the total crude output from Africa’s most populous nation.

All efforts to stimulate direct foreign investment in Nigeria may not yield any fruit until the country adopts international standard for financial reporting, said the Association of National Accountants of Nigeria (ANAN).

The view was expressed at the association’s ongoing Mandatory Continuing Professional Development (MCPD) programme, holding in Lagos.

The theme for the programme, as disclosed by the association’s national president, Iyamide Gafar, is ‘Standardisation and Accounting Ethics’, where five topics will be discussed. The topics, according to the chairman of Lagos branch of ANAN, if ingrained as practice principles, will help checkmate corrupt practices in Nigeria.

The topics are: Financial Reporting Standards; The Process of Standards Setting and its Effect on Financial Reporting; Professionalism and Ethics in Accounting; Due Process Mechanism and Reporting, and Financial Reporting in the Public Sector.

Current reporting standards

While presenting a lecture on financial reporting standards, Paul Adejona berated current standards for reporting financial statements in Nigeria, describing it as fictional. Specifically, he said financial statements, as reported in Nigeria currently, are not capable of revealing the precise financial health of organisations because issues like inflation and risks, which matter a lot to business operations, are not reported.

“Other countries like Brazil and Netherlands have a way of reporting effect of inflation in their financial statements but in Nigeria, there is yet to be a provision for reporting inflation,” he said, attributing this backwardness to low influx of foreign investments in Nigeria.

“No wonder these foreign investors that are coming with their hard currencies are still finding it difficult to invest in Nigeria because they have concluded that our financial statement is not effective enough and it is porous,” he said.

He advocated the adoption of international financial reporting standards because the standard of reporting financial statements in Nigeria allows external auditors to post a clean bill of health on a company’s financial statement while in reality, calamity and failure are knocking.

“There is no proper time that we need to adopt this international reporting standard than this period we are now,” he said.

He found it ludicrous that there are different reporting standards, some of which are obviously obsolete, when in actual fact, credit and debit mean the same thing everywhere in the world.

Adopting the international standard, he said, will not only help Nigeria’s industry, but will also enable Nigerian accountants to practice their profession anywhere in the world.

Nigeria needs a radical leader

Benjamin Jenfa, the chairman of the event, said the role played by ANAN in the country exemplifies why Nigeria needs a radical leader.

He said late general Sanni Abacha labelled the association’s executives as radicals at a meeting with him.

“He told us we write too much and that as we write, he keeps dumping our reports under the table,” he said.

But the late president advised them to keep writing because “a day is coming when Nigeria will have a radical president that will implement your reports.”

While calling for greater boldness from Nigeria’s political leaders to implement stringent accounting practice principles, he was, nevertheless, grateful to former president, Olusegun Obasanjo, for implementing some of the recommendations of ANAN.

South Africa’s
retail sales growth quickened by 7.9 percent year-on-year in July at
constant prices, compared with an upwardly revised 7.6 percent increase
in June, Statistics South Africa said on Wednesday.

Stats South Africa
said retail sales grew by 6.5 percent in the three months to July,
compared to the same period a year ago, also at constant prices.

Economists polled by Reuters last week forecast sales growth would brake to 6.9 percent year-on-year in July.

Nigerian consumer
products firm, PZ Cussons, said on Wednesday its pre-tax profit rose
1.5 percent to 863 million naira in the first quarter to the end of
August.

Turnover fell to 12
billion naira in the period from 13.88 billion naira the year before,
the company said in a filing with the Nigerian Stock Exchange.

Some
finance experts say money and treasury bill rates are expected to rise
in the short to medium term due to the tightening in monetary
conditions.

This
is also because the government’s ability to inject substantial amounts
of liquidity will be limited, as the excess crude account has been
depleted, although recurring spending is still likely to remain robust
ahead of the 2011 general elections.

In
a move that took most industry watchers by surprise, the Central Bank
signalled a move towards a tightening of monetary conditions in the
country with its decision to increase the policy rate (MPR) by 25 basis
points from 6.0 percent to 6.25 percent, in contrast with market
expectations.

The
decision comes in the wake of indications last week by the bank
governor that the policy rate may remain neutral. However, the threat
of higher inflation rates as the nation enters into the early stages of
the 2011 general elections cycle may have persuaded the rate-setting
committee to move away from its previously accommodative position.

“Overall,
this means short-dated rates will incrementally catch up with
long-dated bond yields, which have been tilted to the upside given the
DMO’s incremental issuance needed to bridge this year’s rising fiscal
gap (N120 billion in September, from N126 billion in August and a
median of N80 billion in half year 2010)”, said Samir Gadio, emerging
markets strategist, Standard Bank Plc.

Afrinvest,
an investment firm, said while the upward revision to the Standard
Deposit Facility was largely in line with its expectations, it views
the revision to MPR as mildly surprising given the restated commitment
of the Central Bank towards growing credit to the real economy.

“The
magnitude of this change, however, reveals only a slight concern,
notably within the context of recent inflation data, which suggests a
gradual upward trend,” the firm stated.

Lending challenges may remain

The
benchmark rate had been maintained at a record low level of six percent
since July 2009, amid an accommodative monetary framework as the
Central Bank attempted to revive private lending and boost growth, even
as private sector credit expansion decelerated further to 9.8 percent
in July.

As
such, experts say a turnaround in lending to the real economy has not
materialised, despite systemic excess liquidity, which highlights the
weakness of the monetary transmission mechanism, especially given the
structural issues in the banking system.

“Accordingly,
we think AMCON’s role will be critically important to improve risk
perception across the board and progressively boost financial
intermediation and lending over the next few years. It will also
ultimately contribute to allaying fears of investors, which have caused
the recent poor performance of the Nigerian Stock Exchange, with the
banking sector weighting heavily on the index,” Mr. Gadio said.

Addressing Inflation

The
Central Bank also factored in a higher inflation environment, as it
reiterated its earlier position on the threat of inflationary pressure
arising from several other factors.

Mr.
Gadio, however, said that the MPC will probably revise its year-end
forecast given that single-digit consumer prices are highly unlikely in
the framework of the new CPI basket, released by the National Bureau of
Statistics.

“In
our view, this makes sense if one factors in the relatively weak money
multiplier and sluggish credit metrics. Additionally, the volatility in
inflation is still driven by its exogenous component, which would make
tricky the implementation of inflation targeting in the near future,”
Mr. Gadio said.

The
committee noted that the key policy challenges remained the continuing
sub-optimal growth in money supply, coupled with the negative growth in
private sector credit, as well as the subsisting high retail lending
rates in the face of substantially low wholesale inter-bank and retail
deposit rates.