Nigeria Content Online

I have never been a snooker fan and was
never particularly interested in the sport but one couldn’t help but
notice the flamboyant star of snooker Alex “Hurricane” Higgins. After
turning professional, he became the youngest World Championship winner
at his first attempt in 1972. It is reported that Higgins earned and
lost a fortune to alcohol and a string of poor investments spending his
last years broke and living in homeless shelters in Northern Ireland
until sadly, he died last month from throat cancer.

This is only one more sorry tale that
graphically illustrates the far too common “riches to rags” saga. In an
interview in 1991 about the reasons why so many high earning
celebrities such as musicians, actors, and sportsmen go broke,
billionaire investor Warren Buffett told an audience that “liqueur and
leverage” were ever-present culprits in financial demise.

It looks like it’s never going to end.

Artistes and sportsmen are particularly
vulnerable when it comes to their personal finances as they face unique
challenges. When celebrity hits and the cheques start coming in, those
who find themselves in this daunting position of wealth don’t realise
that they may be earning a lifetime of income within a relatively short
time frame. Careers are often uncertain and brief particularly for
sports men whose careers come to an end in their 30s or sooner, and one
serious injury could cut short a career overnight. Musicians cannot
predict when their music will stop selling, and an actress or actor
doesn’t know when they will stop getting regular roles.

Don’t neglect your education

It is very easy
when the money starts rolling in to view education as a waste of
precious time that could be used making money. This is a huge mistake,
as the benefits of education will remain long after a career has ended.
Many celebrities shortchange themselves by dropping out of school to
pursue their career and many more fail to return to complete their
education. By getting a qualification, there is a better chance of
earning income even when their celebrity is waning.

Overspending

Excessive spending
is a big reason for celebrities suffering financial misfortune.
Regardless of whether someone is making N500,000 or N50 million a year
there is the possibility of going broke. There are reports of a
Hollywood star that lived a lavish lifestyle far beyond his earning
capacity; he had 22 cars, four yachts, and 15 expensive homes all over
the world some of which he never visited; all came with significant
bills and costs of upkeep.

Mike Tyson, earned
several millions of dollars from his boxing career. It is reported that
he was in debt to the tune of over £25 million including about $13
million in unpaid taxes and about $174,000 for a diamond-studded gold
chain. We are all familiar with Michael Jackson’s story and reports of
his spending over $6 million within a few hours. He eventually lost
Neverland Ranch to foreclosure in 2008.

Hangers on and overheads

Along with their
large incomes, celebrities, including some Nigerians, are no different.
They also have enormous overheads that include: large homes, managers,
agents, stylists, publicists, bodyguards, and other assistants; they
are besieged by family members and friends who regularly require
assistance. Some are naïve and as they become very popular, they fall
victim to those who are willing to pander to their celebrity for
financial gain. Many have entourage; these people constantly surround
them and insulate them from reality, feeding their egos. “Untidy”
personal lives are also a common feature with multiple relationships
resulting in multiple children.

Invest wisely

Their lack of
financial knowledge makes celebrities vulnerable to business owners,
financial advisors, bankers and stockbrokers some of whom may take
advantage of them and who are eager to help them “invest” their
fortunes. Most have never learned the basics of financial management
and end up making poor investments and lose millions.

George Foreman
appears to stand out from many sportsmen; he turned professional at 20
and displayed much financial acumen relatively early. He claims to have
learnt from the financial predicament of boxing legend Joe Louis and
put aside about 25 per cent of what he earned at every fight into a
pension plan. In spite of his commitment to investing he did expose
most of his assets to significant risk in poor investments losing a
fortune.

In later years he
was to become wealthier than he ever was during his boxing career. In
1999, he sold his name and image to the manufacturer of George
Foreman’s Lean Mean Fat-Reducing Grilling Machine for $137.5 million in
cash and stock. His earlier experience of nearly going bankrupt made
him a more cautious investor.

It is hard to cut back

When celebrities
are in their earning prime, spending rises to meet income levels. When
income falls, it becomes difficult to curb expenses quickly enough
either because they cannot break the spending cycle, or because they
have already committed to large purchases and cannot meet debt
payments. It doesn’t take long for one to be broke if income stops and
spending continues for another six months. Sometimes one may be in
denial and may be unwilling to accept the fact that the lifestyle must
change.

One watches with
rapt attention, the exciting growth of the Nigerian entertainment
industry, an increasing crop of outstanding musicians, actors and
actresses, comedians, producers and directors, sports men and women. A
word of caution is important, however. Artistes and sportsmen must plan
for what could be an uncertain future by diversifying earning streams,
investing and protecting the large sums of money earned today. Do not
be complacent. Learn from past examples and protect your future to
avoid the road from riches to rags.

Write to
personalfinance@234next.com with your questions and comments. We would
love to hear from you. All letters will be considered for publication,
and if selected, may be edited.

When
the story of the Obasanjo years is written, one bit that will stand out
is his alleged and much-debated tenure-extension bid. Not much has been
documented about it, due to the fact that it existed mostly in the
murky realms of conjecture, allegation, and strident denial. It will
however be impossible not to see the attempt in a new light after
reading a recent report by the international think-tank, Chatham House.
The report, “Thirst for African Oil – Asian National Oil Companies in
Nigeria and Angola”, published in 2009, and launched last Thursday at
the Nigerian Institute of International Affairs (NIIA), Lagos, examines
why Asian National Oil companies (ANOCs) largely failed in their
initial foray into Nigeria’s oil industry, while managing to succeed in
Angola. The report sheds light on the unprecedented strategy utilised
by former President Obasanjo in dealing with the Asians. Mr. Obasanjo
offered unprecedented ‘oil-for-infrastructure deals’ – characterised by
preferential, and sometimes discretionary, allocations of oil blocks in
exchange for investment pledges – to the Chinese, South Koreans,
Indians, Taiwanese, and Malaysians.

The Chinese for example signed a
deal to construct a double-track, standard gauge railway from Lagos to
Kano, and to construct a hydroelectric complex in Mambilla, Adamawa
state. “The concept of the ‘oil-for-infrastructure’ deal was novel but
its introduction compromised the much-proclaimed transparency of the
oil licensing rounds of 2005, 2006 and 2007,” the report states in its
introduction. “There is a widespread perception in Nigeria that the
timing of the deals had a strong political undertone… The unspoken
need to generate funds for President Obasanjo’s (ultimately
unsuccessful) bid to change the Constitution to allow him to run for a
third term is seen as the key to the unravelling of the deals.”
According to the report, the oil-licensing rounds of those three years
were manipulated to favour the Asians.

Relying on interviews with
“several cabinet ministers of the Obasanjo Government” the report
reveals that “oil matters were never discussed in cabinet.” Mr
Obasanjo’s role as petroleum minister guaranteed this utter lack of
transparency. On assumption of office, Mr Obasanjo’s successor, Umar
Yar’Adua ordered a comprehensive review of many of the Obasanjo-era
deals with the Asians, and eventually revoked most of them.

Asian investments in West Africa

The launch was
accompanied by a public lecture, “Asian Investments in West Africa:
Impacts and Opportunities.” The lecture was delivered by three
speakers: Markus Weimer, one of the authors (the others were Alex
Vines, Lillian Wong and Indira Campos), Charles Dokubo, research fellow
at the NIIA, and Tom Burgis, West Africa correspondent of the Financial
Times. In his introduction, the moderator, Osita Agbu, noted that in
the face of rising demand for energy in its various forms, Nigeria and
other resource-rich countries “must insist on the maximization of our
national interest.” Mr. Weimer, in his remarks, restated the report’s
findings regarding the mismanagement of the ‘oil-for-infrastructure’
scheme by the Obasanjo administration. In addition he blamed the “lack
of predictability” that characterises policy-making in Nigeria, as well
as the dismal security situation in the delta, which saw Nigeria
briefly lose its place as Africa’s largest producer of crude oil, to
Angola. He quoted a South Korean government official as saying (this
quote is included in the report): “In Nigeria we found that a change of
government results in a change of business partners… It’s more
difficult to get a foothold in Angola, but we now believe safer and
more profitable in the long term.”

The report chronicles the Angola
success story, highlighting the fact that oil-for-infrastructure deals
with China succeeded impressively enough in the country for the World
Bank to christen them “Angola-mode.” It also attributes the success of
China-Angola oil dealings to the familiarity that China built with
Angola in the aftermath of the civil war. China, according to it “has
played a particularly important role” in the Angolan post-war
reconstruction effort. Mr Weimer went on to confront the “emotional
image of Africa being recolonised” by Asia. “It is wrong to assume that
African states are weak; actually African countries are very much in
control of the relationship with ANOCs,” he said. He also noted that
China has “injected a sense of pragmatism” into the relationship
between the West and Africa.

In his remarks, NIIA researcher Charles
Dokubo, highlighted the problems that foreign investors have to deal
with in Nigeria. “The political terrain of Nigeria is not
straightforward,” he said; adding that it is an environment
characterised by “personalisation of authority”, “concentration of
power”, and “institutional problems.” Mr. Dokubo said that despite
Angola’s extensive civil war, its institutions are “a bit firmer on
ground” than Nigeria’s. Journalist Tom Burgis dismissed the ongoing
wave of “China-bashing” – accusations by Western governments and media
that China does not have the interest of African countries at heart- as
“complete nonsense.” Mr. Burgis pointed to the French record in Gabon
and Niger, and BP’s legacy in Libya as evidence that the West lacks the
moral standing to criticize the Chinese. “Everyone has primarily
interests, not friends,” he said, adding that “the Western-Eastern
standoff is exactly like the Cold War.” He suggested that African
countries take advantage of the rivalry to extract commitments from
both partners and “rewrite the rules for the benefit of the African
economy, not [the] elite.” A question and answer session followed. How
have we fared with our so-called traditional partners?” queried Ngozi
Ugo, Professor of International Law at the NIIA. “The time has come:
out of two evils we should expand our scope… I think we have been
used long enough.”Bolade Eyinla, International Relations expert and
Professor of History at the University of Ilorin, asked a pointed
question: “When the price of oil collapses again will this interest
still be there?” Mr. Eyinla also wanted to know why the Nigerian
‘oil-for-infrastructure’ deal failed with the Chinese but worked in the
case of the Germans, reminding the audience that much of Nigeria’s
Federal Capital Territory, Abuja was built by German construction firm
Julius Berger in exchange for oil concessions. Olubunmi Martins of
Petroland, an oil and gas industry consultancy, suggested the creation
of a Nigeria Oil and Gas Chamber of Commerce to serve as a “business
pressure group to articulate Nigeria’s interests” and to “drive private
sector engagement.” Ejike Onyia, pioneer Managing Director of the
Nigerian Liquefied Natural Gas (NLNG) Limited, called for a radical
reform of the Nigerian oil industry. “The problem we have starts and
ends in Nigeria.”

The Chatham House report essentially corroborates
this view. In the concluding part of the section on Nigeria, it states:
“The oil-for-infrastructure concept has succeeded elsewhere in Africa.
But in Nigeria it was poorly conceived and poorly implemented – and
above all, it was distorted by political considerations. What should
have been a ‘win-win’ situation turned into a ‘lose-lose’ situation,”
an apt description of a nation’s penchant for squeezing defeat from the
jaws of triumph.

Sanusi
Lamido Sanusi’s reform strives to cover the gaps left in a similar
exercise carried out between 2004 and 2005, under which banks were
required to embrace consolidation and raise their capital base to a
minimum of N25 billion.

To meet the
condition, there were series of mergers and acquisitions in a scale
considered unprecedented in global banking history. The significant
increase in banks’ fresh capital, boosted by a historic rally in stock
prices, raised banking sector asset as a percentage of the country’s
gross domestic product (GDP) from 30 percent in 2004 to 60.

With such
phenomenal leap in capital and liquidity growth, banks came under
serious pressure to create risk assets amid limited innovation and
products diversification, which worsened the poor risk management as
well as weak corporate governance structures.

This, according to
Uju Ogubunka, a former registrar of the Chartered Institute of Bankers
of Nigeria (CIBN), led to the concentration of assets, particularly
margin lending and trading in petroleum products, with total exposure
to these two sectors put at about N1.6 trillion by December 2008.

Specifically,
issues of inadequate economic and macro-prudential management; poor
corporate governance; lack of disclosure and transparency; poor
regulatory framework, and prudential regulation characterised banking
then.

But, the global
financial and economic crisis around the same period was what worsened
the impact of the decay on the country’s economy.

The injection of
N620 billion into the nine distressed banks last October, was part of
the effort to boost their capital base and provide the capacity for
them to provide normal banking services, while the removal of their
chief executives was to make them accountable for their misdeeds in the
abuse of depositors’ funds.

To enhance
improved supervisory framework, the Central Bank has reactivated the
Financial Services Regulation Coordinating Committee (FSRCC) in line
with the CBN Act of 2007, while prudential guidelines were reviewed to
enhance the capacity to handle risk management, corporate governance,
obligor limits and anti-money laundering, loan loss provisioning as
well as strengthen regulatory/supervisory framework.

Besides, fresh
guidelines on margin lending is expected to guide market operators and
enhance the oversight functions of regulatory agencies as well as limit
the risk inherent in margin lending.

To ensure that
real sector impact positively on the economy, a N500 billion
infrastructure development fund was established last April to provide
long term support to finance the development of critical infrastructure
projects, particularly in the power, agricultural manufacturing sectors.

The recent
establishment of the Asset Management Corporation of Nigeria (AMCON)
will help free the banks of the burden of toxic assets and provide them
a renewed vista to extend credits to the real sector of the economy.

To enable AMCON
meet any shortfall in its activities, the CBN has mobilized the
nation’s 24 banks to allocate 0.3 percent of the value of their balance
sheets into a common pool in the next 10 years.

“Anybody
can say anything against the way I handle the business, but the major
thing they need to remember is that I have a job to do to save the
banking system and protect depositors’ funds. Nigeria is one of the few
countries in the world that has had a banking crisis and is being
resolved without anybody losing a kobo. This is the first time it is
happening in the history of the Nigerian banking system.

“In the last one
year, there have been big issues, particularly under-capitalisation and
poor governance, yet not a single banker defaulted on its obligations
to either depositors or creditors. That, for me, overrides every other
consideration, because banks are supposed to hold depositors’ funds on
absolute trust. Would anybody deny that that has not been achieved?

“Many people told
us we would not be able to get legislation to support what we are
doing. But, we have proved them wrong. But we got it even at a time the
country was going through a most difficult political period. We now
have a rare opportunity through the AMCON Act to recapitalise the banks.

“Nobody is saying
there are no difficulties and challenges, but the important thing is
that we have been able to change the mindset of the entire banking
system, which people had thought their balance sheet was for
speculation than for activities that would boost the economy. We have
shown that if one is imaginative and bold enough, one can deliver
single digits long term money to the productive sector, as we have done
with the mobilisation of the 24 banks to pool together about
N130billion for manufacturers to access at the rate of about seven
percent. Before now, that could not be done in this country.

“We are providing
imaginative solutions to long term cheap money for the development of
critical infrastructure in the power sector. We are making significant
progress towards signing a memorandum of understanding (MOU) with
Alliance for a Green Revolution in Africa (AGRA) on unlocking the
agricultural financial value chain. We are working towards getting
finance into the different value chain to boost agriculture.

“My challenge is to
sustain the momentum, to lay a solid foundation for a new banking
system that actually does what it is supposed to do – lend to the real
economy and create jobs and employment and not just make money. If
there is anything we have achieved, it is that the bankers have started
thinking of themselves not as bankers, but as Nigerians.

“This means they cannot sit back to complain that the environment is
not conducive for them to lend to manufacturers because there is no
power and other infrastructure, or that is not profitable. The next
generation of bankers may not do all these. Our generation would have
to do them, so that the next generation would simply find the projects.
That is why we are doing what we are doing.”

Nigerian interbank lending rates climbed to 1.66 percent on average this week from 1.08 percent last week due to large cash outflows to forex and treasury bills purchases by commercial banks, traders said.

They said cash withdrawals by state energy firm NNPC from some retail banks to its central bank account also helped drain liquidity from the system.

The secured Open Buy Back (OBB) rose 45 basis points to 1.50 percent, 50 basis points above the Standing Deposit Facility (SDF) rate and 4.50 percentage points below the central bank benchmark rate.

Overnight placement and call money each climbed to 1.75 percent from 1.10 percent last week.

“The opening balance (of lenders) with the central bank fell to 226 billion naira on Friday (from 339 billion naira last week) due to funding pressure for forex and treasury bills purchases and the wihtdrawal by the NNPC,” one dealer said.

The central bank sold 96.7 billion naira in 364-day, 182-day and 91-day treasury bills this week, while it sold $339 million at its bi-weekly foreign exchange auctions.

Traders said the NNPC recalled about 50 billion naira, being local currency proceeds of the dollars it sold to some banks in the last two weeks.

Nigeria said on Friday it has distributed 704 billion naira from the central accounts to the three tiers of government — federal, state and local — for the month of July, but bankers about half of the amount is expected to hit the banking system on Tuesday to buoy liquidity.

“We expect the rates to crash immediately part of monthly budgetary allocations to state and local governments hit the system latest by Tuesday,” another dealer said.

REUTERS

Nigeria has distributed $4.7 billion in revenues and windfall oil savings to government for July, a massive disbursal which is likely to trigger a drop in bond yields and interbank rates next week, dealers said.

Africa’s biggest oil and gas producer shares its revenues among three tiers of government each month — federal, state and local — and tops the disbursal up with a withdrawal from its windfall oil savings if there is a shortfall.

Accountant General Ibrahim Dankwambo said Nigeria had distributed 404.27 billion naira in revenues and $2 billion from its crude oil savings for last month, making up one of the largest monthly disbursals ever.

Around 80 percent of the liquidity in sub-Saharan Africa’s second-biggest economy comes from public cash flows and the monthly allocations can trigger significant shifts in bond yields and interbank rates.

“We expect (interbank) rates to crash immediately part of monthly budgetary allocations to state and local governments hit the system, latest by Tuesday,” one money market dealer said.

The disbursal comes five months before presidential and parliamentary elections in Africa’s most populous nation. Government spending has traditionally risen in election years, leading analysts to question the quality of the expenditure.

Among the major recipients of the monthly revenue distributions are the country’s 36 states, whose governors form a powerful caucus within the ruling People’s Democratic Party (PDP) and who will be key to the outcome of the polls.

President Goodluck Jonathan, who is from the southern Niger Delta, has not yet announced whether he plans to contest but a bid would be controversial because a “zoning agreement” within the PDP dictates that power should rotate between the Christian south and Muslim north every two terms.

Jonathan inherited the presidency when northern President Umaru Yar’Adua died part way through his first term earlier this year, meaning the next term should go to a northerner.

The PDP said on Friday its national executive council had “unanimously endorsed the retention of the zoning principle” but also said Jonathan had the right to contest because he was on a joint ticket with Yar’Adua, effectively hedging its bets.

“FINANCIAL INDIGESTION”

Government spending is set to rise sharply this year.

Parliament last month approved 445 billion naira in extra spending on top of the main 4.4 trillion naira 2010 budget, likely to push Nigeria’s fiscal deficit beyond 5.4 percent of GDP, above a 3 pct target set three years ago.

“It raises eyebrows,” Bismarck Rewane, head of Lagos-based consultancy Financial Derivatives, said of the latest disbursal.

“Do we have the capacity to absorb this amount of spending in such a short period, what are the inflationary aspects of this? Apart from the propensity of government to waste, there is also the question of financial indigestion,” he said.

Cabinet this week approved the $150 million purchase of three new presidential jets and parliament passed an 88 billion naira budget for the electoral commission to overhaul voter lists, funds to be raised through a government debt issue.

Dankwambo said a further $1 billion had been withdrawn from the excess crude account, a pillar of IMF-backed reforms into which Nigeria saves oil revenues above a benchmark price, to be set aside for the creation of a sovereign wealth fund.

The withdrawal leaves just $460 million in the excess crude account, compared to around $20 billion in early 2007, the start of the current presidential term.

Finance Minister Olusegun Aganga, a former Goldman Sachs executive appointed in March, has said he wants a sovereign wealth fund to replace the excess crude account, which has no clear constitutional basis.

But the fund has not yet been created and it was unclear where the $1 billion would be held in the interim.

REUTERS

Youth unemployment
across the world has climbed to a new high and is likely to climb
further this year, a United Nations agency said Thursday, while warning
of a lost generation as more young people give up the search for work.

The agency, the
International Labour Organisation, said in a report that of some 620
million young people ages 15 to 24 in the work force, about 81 million
were unemployed at the end of 2009 the highest level in two decades of
record-keeping by the organisation, which is based in Geneva,
Switzerland.

The youth unemployment rate increased to 13 per cent in 2009 from 11.9 per cent in the last assessment in 2007.

There’s never been
an increase of this magnitude both in terms of the rate and the level
since we’ve been tracking the data, said Steven Kapsos, an economist
with the organisation. The agency forecast that the global youth
unemployment rate would continue to increase through 2010, to 13.1 per
cent, as the effects of the economic downturn continue. It should then
decline to 12.7 percent in 2011.

The agency’s 2010
report found that unemployment had hit young people harder than adults
during the financial crisis, from which most economies are only just
emerging, and that recovery of the job market for young men and women
would lag behind that of adults. The impact of the crisis also has been
felt in shorter hours and reduced wages for those who maintain salaried
employment.

In some especially
strained European countries, including Spain and Britain, many young
people have become discouraged and given up the job hunt, it said.

The trend will have
significant consequences for young people, as more and more join the
ranks of the already unemployed, it said. That has the potential to
create a lost generation comprised of young people who have dropped out
of the labor market, having lost all hope of being able to work for a
decent living.

The report said that young people in developing economies were more vulnerable to precarious employment and poverty.

About 152 million
young people, or a quarter of all the young workers in the world, were
employed but remained in extreme poverty in households surviving on
less than $1.25 a person a day in 2008, the report said.

The number of young
people stuck in working poverty grows, and the cycle of working poverty
persists, the agency’s director-general, Juan Somavia, said.

Young women still
have more difficulty than young men in finding work, the report added.
The female youth unemployment rate in 2009 stood at 13.2 percent,
compared with the male rate of 12.9 percent. The gap of 0.3 percentage
point was the same as in 2007.

The report studied
the German, British, Spanish and Estonian labor markets and found that
Germany had been most successful in bringing down long-term youth
unemployment. In Spain and Britain, increases in unemployment were
particularly pronounced for those with lower education levels.

Data from Eurostat,
the European Union’s statistical agency, showed that Spain had a
jobless rate of 40.5 percent in May for people younger than 25.

That was the
highest level among the 27 members of the European Union, far greater
than the 9.4 percent in Germany in May and 19.7 percent in Britain in
March.

New York Times

In any brand
communication campaign, knowing the pulse of consumers, gauging their
perceptions, and understanding their feelings are crucial to the
success of the communication process. Such insights thus become
imperative in building an enduring relationship between brand and
audience. An effective way to build relationship is by gaining insights
into consumer behaviour.

In this age, brands
need to connect directly with the consumers. Brands that warm their way
into the hearts of consumers are the ones that impact lives, because
they identify with the aspirations and yearnings of the consumers.

Some of the key
things to do is to focus on who is buying the product or service, what
their needs or goals are, key characteristics of the consumers, how
communication or brand messages should be tailored to fit consumer
preferences and how best to use that to capture their interest.

An incisive and
thorough knowledge of consumers may provide brands the complete
understanding of consumers about their reactions and responses to brand
messages.

A brand targeted at
children should make conscious efforts to touch base with the mothers.
This has become evident in the advertising of the various noodles
brands as they focus on the mothers and their children. Mothers play
influential role in purchase decisions and home keeping. A brand like
noodles for instance should stimulate the interest of mothers and
capture them to influence the eating habit of their children. Such
brand should also take cognizance of shopping pattern, spending habits
and lifestyle of the mothers.

Through consumer
insights, brands can build loyal and active consumer base as consumers
identify a true value from the brand. When consumer insights drive the
communications process, consumers are put in the driver’s seat and as a
result, valuable insights are gained that will ultimately translate to
success for the brand in the market place.

From research to insight

It has become
pertinent to move from the realm of market research to consumer
insights. Though market research is an indispensable tool but a brand
can maximize its understanding of the consumers to fully exploit growth
and build equity for the brand.

A dipstick research
recently conducted in some fast food outlets in Lagos show that some
brands have eroded consumer confidence. A large percentage of them have
not factored in the feelings, and purchasing habits of their consumers
into their service delivery. It is vital for brands to engage in
building and refining their consumer insights to secure a vantage
positions in the consumers’ mind.

The integration of
insights into key decisions such as marketing, product development and
service delivery to a large extent project the brand attributes and
this lead to success.

There should be
several touch points for the brand to interact with consumers. Every
interaction should impact on how customers think and feel about a
company and its brands. A brand is no longer identified by its name and
logo alone but it should be a total experience for the consumer. The
need to create actionable insights, go a long way in differentiating a
brand offering from its competitors.

Insights provide value to the brand as they are the objective voice of the consumer.

Consumer insights
allow brands to improve their service delivery, review consumers
perception and open new perspectives on attitudes, behaviours and
consumer expectations. Insights are also utilised to guide the creation
and evaluation of product concepts.

For any brand
communication to achieve the desired objective, it must through
consumer insights identify and know the most appealing message to
consumers, evaluation of key brand messages, perception of quality and
its effects on pricing and intent to purchase. “Now you are talking”,
the payoff of Etisalat, is one that has resonated well with the target
audience. With the latest TV commercial, it captures the whole essence
of bonding with consumers. That campaign is one that depicts the desire
of an average Nigerian to have access to affordable call rates.

Where do we go from
here? It is for brand custodians to focus on consumer insights and
ensure it is given a premium place to build brand equity. Consumer
insights and perception must align with the brand values and
attributes. Consumers can maintain both emotional and physical
attachment to brands through consumer insights.

AYODEJI AYOPO, a Communication Strategist and Public Relations Specialist, is the CEO of Shortlist Ltd.

The
continued delay in the takeoff of the Asset Management Corporation of
Nigeria (AMCON) is already taking a toll on the financial markets.
Since the signing of the AMCON Bill into law by President Goodluck
Jonathan on 19 July, the regulators concerned have been working to set
it running.

AMCON
was expected to stimulate the recovery of Nigeria’s financial system
from its recent crisis by boosting the liquidity of troubled banks
through buying their non-performing loans, helping their
recapitalisation, and increasing access to restructuring or refinancing
opportunities for borrowers. The Central Bank proposed its formation in
December 2009 as part of moves to revive the banking industry and
strengthen the financial market.

Analysts’ anxiety

However,
the uncertainty over its form and structure has continued to generate
anxiety among operators. Analysts at Afrinvest, a firm of investment
bankers, said the effect was evident in the bond market.

“PDMMs
(Primary Dealers and Market Makers) who usually take long term position
at the beginning of the month, have instead been selling off
securities. This may be related to the slow start in AMCON operations.”
According to the report, average yields for the three year, five year,
seven year, 10 year and 20 year bonds had dropped to 6.7 per cent, 6.9
per cent, 5.8 per cent, 7.5 per cent and 9.3 per cent respectively at
the end of a fortnight by 6 August.

Apart
from AMCON’s absence, other operators said recent developments in the
capital market have created uncertainties about the market’s direction.
Only last week, the Securities and Exchange Commission (SEC) intervened
in the stock market by sacking the director general of the Nigerian
Stock Exchange (NSE), Ndi Okereke-Onyiuke, and the council president,
Aliko Dangote. Since then, the market has been on a downward slide
though SEC immediately appointed Emmanuel Ikhazobor as the interim
administrator of the stock exchange.

Volume drivers

Joshua
Omo-Kehinde, managing director of Marimpex Finance, a stockbroking
firm, said the major problem with the stock market was beyond the issue
of who heads the stock exchange. Mr Omo-Kehinde said there was need to
stimulate demand and supply of equities by having institutions that
would be capable of driving volume in the market.

“It
does not matter whether they are appointed or unofficial, what this
market needs at this time are market makers that would be able to buy
huge volume of shares when available and sell huge volumes when there
is demand.” Another stockbroker, Davis Adonri, the managing director of
Lambeth Investment and Securities Limited, said it was difficult to say
precisely what was responsible for the market slowing down.

Mr. Adonri said that despite the good results declared by Guaranty
Trust bank and National Salt Company, shares of both companies were not
generating the kind of patronage that is expected. He said some
extraneous factors were responsible for the market lull, adding that
the liquidity position was a factor to consider. “It has almost become
a trend now that at the beginning of the month, the market slows down
and picks up once the FAAC allocation (Federation Accounts Allocation
Committee) starts to come in.”

Investors at the
Nigerian Stock Exchange (NSE) recorded additional losses at the close
of trading on Thursday, as the market measuring parameters plunged by
0.18 per cent, making it the fourth day that it had followed a downward
trend.

The Exchange market
capitalisation closed yesterday at N6.111 trillion after opening the
day at N6.121 trillion, reflecting 0.18 per cent decline or over N10
billion in losses. Meanwhile, about N183 billion has been lost since
trading started this week.

The NSE All-Share
Index also shed 0.18 per cent or a loss of 44.06 units on the previous
day’s figures of 25,032.09 basis points, to close at 24,988.03.

Union Homes Savings
& Loans, RT Briscoe, and Fidelity Bank were the most traded stocks
yesterday, followed by First City Monument Bank and Guaranty Trust Bank.

A finance analyst
said the changes in the Exchange’s management “might be a contributory
factor” for the recent downward trend in the market, but not the only
reason. Femi Awoyemi, the chief executive officer of Proshare, said,
“The market has really not had a significant up trend for over three
weeks. Although we reversed the original downtrend after the passage of
Asset Management Corporation Bill, it appears that market participants
are beginning to realise that the passage of (the) bill will not
improve liquidity issues confronting the NSE.” Mr. Awoyemi also said
that “it seems that there is not a lot of appetite for huge risks”
again in the market.

Gainers and losers

At the close of
Thursday’s trading, a total of 25 stocks appreciated, higher than the
23 stocks recorded on Wednesday; while 29 stocks depreciated in value,
lower than the preceding day’s 45.

Unilever and Okomu
Oil topped the price gainers’ table with an increase of N1.17 and 60
kobo on their initial prices of N23.50 and N12.20. Cadbury followed in
the chart with an increase of 50 kobo to close at N29.00 per share.

On the losers’
table, Nigerian Breweries and Access Bank led the chart with a loss of
N1.55 and 25 kobo, from their opening prices of N70.65 and N8.45 per
share. Despite leading as the second most traded stock after Union
Homes Savings yesterday, RT Briscoe followed in the losers’ chart with
19 kobo loss to close at N2.65 per share.

In spite of
investors’ low patronage in the market, the banking subsector still led
the most active subsectors’ chart with 79.484 million volumes of
shares, valued at over N520.752 million.

Financial accounts

At the Exchange’s
floor on Thursday, Flour Mills of Nigeria and United Nigeria Textile
presented their financial accounts to market operators.

Flour Mills’
unaudited financial result for the first quarter ended 30 June shows
11.94 per cent increase in turnover, from N38.882 billion to N43.524
billion. The company’s profit after tax also grew by 47.26 per cent
from N2.222 billion to N3.272 billion while total net asset appreciated
by 9.26 per cent, from N35.384 billion to N38.659 billion.

Last month, Flour
Mills in its audited year result ended March 31, 2010, proposed, to its
shareholders, a dividend of N2 per share and a bonus of one for every
10 units of share own.

The audited result
year ended December 31, 2009 for United Nigeria Textile shows a
turnover of N9.223 billion from 2009’s figure of N12.218 billion;
representing a 24.51 per cent decline.