Nigeria Content Online

Standard Bank, South Africa’s largest bank by assets and
earnings, has said ongoing elections in Nigeria will not affect its willingness
to do business with the country. The bank’s director and head, Agricultural Banking,
will be moving to Nigeria to oversee its operations in the sector from next
month.

“Nigeria is currently our biggest investment at the Standard
Bank Group, outside of South Africa. We keep a close eye on elections as with
any African country, but the reality in Africa is business goes on, with or
without elections. I am actually relocating office in Nigeria in May due of
course to the size of the opportunity from an agricultural point of view,”
Jacques Taylor told NEXT at the weekend.

Speaking at a media forum on agricultural banking organised by
the bank in Johannesburg, South Africa, he said the bank expects agriculture to
contribute up to 40% of its asset growth in Africa in 2011.

Priority countries

South Africa’s Standard Bank Group acquired a majority stake in
Nigeria’s IBTC Chartered through a tender offer in August 2007 to become
Stanbic IBTC Bank Limited.

Nigeria is one of six priority countries that Standard Bank sees
as having the biggest opportunities in the agricultural sector in the short
term. The others are Ghana, Kenya, Namibia, Uganda, and Zambia.

“When we identify a country and try to access the market, the
three key things are natural resources, quality of infrastructure, and a stable
macroeconomic and political environment, because that will result in a stable
exchange rate,” Mr. Taylor added.

The group gave Nigeria a political risk rating of 2.2 on a scale
of 5, second only to Kenya, which has a risk rating of 2.1

“We are serious about that business, with a lot of support
coming from the Central Bank of Nigeria,” Mr. Taylor said.

Last year, Stanbic IBTC Chartered grew at the rate of two
branches per week in Nigeria.

“We have about 60 branches; we could be aiming for close to 300.
Nigeria is a big business for us,” Mr. Taylor concluded.

Diezani Alison-Madueke, Minister of Petroleum Resources, at the
weekend defended the Nigerian Content Policy of the Federal Government. She
said the policy was not designed to nationalise the assets of multinational oil
and gas companies operating in the country.

The minister, who spoke at the first anniversary of the
commencement of the implementation of the Nigerian Oil and Gas Industry Content
Development Act 2010 in Abuja, said the policy is aimed at promoting increased
participation of Nigerians in the operations of the industry, as is the
practice in industries around the world.

“Nigerian Content Act is not designed to nationalise foreign
assets or to completely indigenise the investment interests of foreigners, as
is erroneously perceived in some quarters. The important thing is that the
implementation of law would be guided by a framework that has been put in place
to help balance the interest of the investors and the country’s national
interest in the oil and gas industry,” Mrs. Alison-Madueke said.

According to her, since the approval of the Act early last year,
it has become clear that the industry needed to work towards building capacity
in critical areas to ensure that requirements of the law do not impede the
growth of the industry, pointing out that the collaboration with all
stakeholders must be sustained to erase the suspicion in some quarters that
there is resistance by multinationals in the implementation of the law.

Targets to be achieved

Some of the targets set by the government for the Nigerian
Content Development Monitoring Board (NCDMB) include retention of $10 billion
out of $20 billion average annual industry expenditure; creation of over 30,000
direct employment and training opportunities; and establishment of three to
four new pipe mills to service the demands of the industry and coating, valves,
fittings and components.

Other targets include the development of one or more dockyards
for maintaining marine vessels operating in Nigeria; transformation of ownership
profile of marine assets supporting industry activities and integration of
indigenes and businesses, as well as capturing 50 to 70 per cent of banking
services, insurance placements, and legal services in the country.

Group managing director, Nigerian National Petroleum Corporation
(NNPC), Austen Oniwon, disclosed that with the recent launching of the ‘gas
revolution’ by President Goodluck Jonathan, about $53 billion is expected to be
spent in the next three to four years on the establishment of strategic
industry infrastructure in the country, including Greenfield refineries, world
class petrochemical plants, fertilizer complexes, methanol plants, gas
processing facilities, and other gas related infrastructures in the country.

The challenge for stakeholders, he explained, hinges on ensuring
that significant percentage of the amount to be spent is in-country, by
supporting the capacity building initiative for local operators through the
Nigerian Content Development programme, to enable them compete with
multinationals, who set up facilities in Nigeria in order to make them take
full advantage of the existing opportunities.

Executive Secretary, NCDMB, Ernest Nwapa, said the take off of
the Act was threatened by the confusion about the necessity to either pass it
separately or be joined with the Petroleum Industry Bill, as it was
increasingly becoming apparent that government was no longer interested in
pursuing the policy of achieving 70 per cent local content in the industry.

Since the take off of the NCDB, Mr. Nwapa said a number of
achievements have been recorded, particularly building its executive and
operational capacity, underscoring the importance of continuous engagement with
stakeholders to reassure them that the Nigerian Content Act is not a punitive
law, but a confirmation of what is done in other jurisdictions they are
operating in.

Trading activities at the Nigerian Stock Exchange (NSE) were characterised by varied performances this week as market indicators continued their unsteady movements.

The market capitalisation appreciated in value at the close of trading on Thursday after it declined the previous day. The market capitalisation of the 194 First-Tier equities closed yesterday at N7.906 trillion after opening the day at N7.862 trillion, reflecting 0.56 per cent or N44 billion gains. The Exchange had recorded gains also on Tuesday before plunging the following day.

Stockbrokers at GTI Capital, a stockbroking firm, said: “Uncertainty pervaded the equity market because the oscillatory trend continued to hold sway in the market amid political uncertainty. The market had failed to attain a steady rally in succession for five days in the past one month. This shows strong weakness in the economic space burden with political uncertainty.”

A total of 32 stocks appreciated in price on Thursday higher than the 28 recorded the previous day, while 21 stocks depreciated in value higher than the 18 of Wednesday. First Aluminium Nigeria and Ecobank Transnational Incorporated topped the price gainers’ table with an increase of five per cent and 4.97 per cent, to close at 63 kobo and N16.27 per share, respectively. On the flip side, Union Bank of Nigeria and Cement Company of Northern Nigeria led on the price losers’ chart with a loss of 4.95 and 4.94 per cent respectively, to close at N3.07 and N10.78 per share.

Financial results

Meanwhile, despite the fact that more quoted companies released good results, market capitalisation remains wobbly. Dangote Cement, on Wednesday, posted significant improvement in its audited financial result for the year ended December 31, 2010. The company, which was listed at the Exchange last October after acquiring Benue Cement Company, posted a profit after tax of N106.605 billion in 2010, from a profit after tax of N47.251 billion in 2009, reflecting a 125.61 per cent increase. Dangote Cement’s turnover in the period in view also increased by 56.06 per cent, from N129.797 billion to N202.565 billion.

The company’s board of directors proposed a dividend of N2.25 per share for its shareholders. The bank’s share will be marked for payment on the 27th of April while the cash will be disbursed on the 25th of May. The stock price of Dangote Cement remained unchanged yesterday at N125.50 per share after the announcement.

Fidelity Bank posted a 2010 pre-tax profit of N8.65 billion, more than four times the N2.05 billion pre-tax profit it made in 2009. Turnover in the period rose to N56 billion from N35 billion a year earlier.

“Mama do good oh! E do good, Mama Give me Indomie, E do well….” This is the beautiful song that brings out the innovative and creative approach to Indomie noodles visibility. It exemplifies the benefits of the brand to its core target consumers. The woman in the commercial delivered the brand that the children desired so much and, as a result, deserved to be praised. Indomie is one brand that has consistently evolved several channels to build positive perception, especially with the children.

The importance of brand building cannot be underestimated. A brand needs to build a positive image in order to gain an inroad into the minds of consumers. It is indeed true that strong brands exist in people’s hearts and minds. The stronger the brand identity in the market place, the more consumers make informed decisions to purchase the brand. The perception of the brand is beyond the name and logo. It is what the brand stands for in the minds of the consumers. A brand should represent something concrete in the consumers’ mind.

The Bournvita Teachers award is a great idea and a tangible way to build favourable perception for the brand. There has never been a brand that seeks to recognise the laudable role of teachers. Bournvita came up with this award and even though not all teachers can win, they still identify with a brand that offers them prominence and recognition.

It has become important to truly build a brand that leaves an indelible imprint on the heart and mind. When it is done this way, it leads to deeper consumer engagement.

Building a positive brand impression also requires the building of trust and relationship. The brand needs to be trusted to deliver on its offerings in order to forge a relationship with the consumers. Brands need to engage, interact and immerse the audience in its benefits and values to bolster positive perception. I believe this is one major way that Indomie as a brand has leveraged its values to the children. The brand has, through several platforms, built a relationship with school children who now believe in the brand as giving them the desired nourishment.

The most effective way to think of a brand is as an image that the audience remembers. The brand perception must be positive, relevant and memorable for the consumers. That is why Indomie has been the generic name for noodles in the market.

A brand is killed on a gradual basis if it fails to build positive perception in the minds of the consumers. Brands should maintain a positive image to remain relevant with the consumers.

To build positive perception, brands should focus on “what I stand for” and not “what I am”. There should be that compelling brand promise that resonates with the target consumers. Brands that build positive perception continually enjoy consumers’ loyalty.

Indomie has been a remarkable brand in the food industry. The brand has evolved to dominate the noodles market place due to its brand building activities. Indomie previously was a brand associated with children but has become a strong unifying brand for the family.

The Indomie brand evolved over the years as it has distinguished itself through favourable brand perception. The brand has consistently engaged in CSR and educational activities to position its distinct image. One major area is the sponsorship of activities in schools to build a strong relationship with the children. The Heroes award has also placed the brand on a pedestal, rewarding children who embark on heroic endeavours. Indomie became the generic name for noodles due to its strategic brand building efforts to promote a favourable brand image.

Brands should also evolve proven and tested brand building strategies to remain relevant to the consumers. Brand custodians should also make conscious efforts to find out what their brands represent in the minds of consumers. Consumers should be asked about their expectations and whether the brand delivers on its promise. Through this, the brand can align with the aspirations of the consumers to build a positive perception.

The economic problems of Nigeria are easily identifiable. These are power, decrepit infrastructure, social amenities, agriculture, and absence of conducive environment for businesses to thrive. Not a few citizens believe that once these critical aspects are taken care of, other pieces will begin to fall into place and thus guarantee an improved quality of life. As expected, nearly all the political parties seeking elective positions have highlighted in one way or the other how their parties would tackle these redoubtable issues.

For Muhammadu Buhari, presidential candidate of the Congress for Progressive Change (CPC), his strategy is to build on what is already on ground and to expand the scope further. On the economy, the party promises to make Nigeria one of the fastest growing emerging economies in the world with a real GDP (gross domestic product) growth averaging 10 per cent annually and integrate the informal economy into the mainstream. Nigeria’s GDP currently thrives on an average seven percent annual growth.

The party also promises to embark on export and production diversification including investment in infrastructure; promote manufacturing and balance the economy across regions by the creation of six new Regional Economic Development Agencies (REDAs) to act as champions of sub-regional competitiveness. It plans to put in place a N300 billion regional growth fund (average of N50 billion in each geo-political region) to be managed by the REDAs, encourage private sector enterprise and provide support to help places currently reliant on the public sector, among other lofty plans for the sector.

On agriculture the party says it has plans to modernise the sector and change Nigeria from being a country of subsistence farmers to that of a medium- and commercial-scale farming nation and net producer of food. It also plans to create a nationwide food inspectorate division with a view to improving nutrition and eliminating food-borne hazards as well as inject an extra N30 billion into the agricultural sector to create more agro-allied jobs by way of loans at nominal interest rates for capital investment on medium- and commercial-scale cash crops.

The housing challenge

The party also proposes, without being specific, to amend the Constitution and the Land Use Act to create freehold/leasehold interests in land along with matching grants for states to create a nationwide electronic land title register on a state by state basis. To tackle the housing challenge of the country, it plans to create additional middle-class of at least two million new home owners by 2015 by enacting a national mortgage system that will lend at single digit interest rates for purchase of owner occupier houses. Managing director of Pison Housing Company Limited, a commercial real estate and housing finance advisory firm, Roland Igbinoba believes that successive governments have talked too much about the housing and finance sector and the claim by the CPC may not be different. “The pronunciation smacks of a lack of understanding of the housing and finance sector. They cannot provide two million units of housing by 2015.” According to him, the supply side value chain of housing and the demand side coupled with the absence of a housing policy makes such projections unrealistic. “These politicians need to engage experts who will develop a strategic framework and approach for housing as is being done in other emerging countries. Can they tell us how they will enact a national mortgage system? What procedure will they take to amend the Land Use Act?,” Mr Igbinoba asked.

Agriculture and power

For a country that has already spent N200 billion on the agriculture sector in the last two years, earmarking another N30 billion may just be an overkill. Yinka Odumakin, spokesperson of the Buhari/ Bakare Campaign Organisation said the difference this time is that the full amount would be disbursed judiciously. “PDP (People’s Democratic Party) has spent N200 billion on agriculture but much of this has been wasted. In our case, if we spend N30 billion, there will be a difference because the money will get to the people that actually need it.” On power, the CPC says it will generate, transmit and distribute from the current 5,000 – 6,000 MW to at least 15,000 MW of electricity by 2015, increasing to 50,000 MW by 2019 with a view to achieving 24/7 uninterrupted power supply by 2019 whilst also simultaneously ensuring the development of sustainable/renewable energy sources.

According to Mr. Odumakin, while the current government has spent huge sums on the power sector, the country is yet to record any appreciable progress in that area. “In our case, a contractor will not take government funds and have nothing to show. The major problem in this country is lack of fiscal discipline.” However, many Nigerians are still sceptical about the sincerity of politicians to deliver on their campaign promises. “If you ask me, I can’t see anything different,” said Mr. Igbinoba.

According to Mr Odumakin, with the CPC, Nigerians should expect the desirable change needed to make progress. “Nigerians have been getting promises from politicians who don’t mean well for the country. The difference this time is about trust of leadership, which Mr. Buhari offers. Nigerians know about his track record.” With barely a week to the presidential election, Nigerians would have to rely on the promises made during the campaigns to decide on their choice of candidate.

African immigrants sent home over $40 billion (N6 trillion) in remittances last year, according to a new joint report by the World Bank and African Development Bank. The figure is down from $41 billion in 2008 and just over US$38 million in 2009, according to a similar report last year.

The report which covers r e m i t t a n c e s f r o m t h e Organisation for Economic Co-operation and Development, known as OECD, which comprises Eastern and Western Europe, advanced Asian and South American economies, and transfers from other African countries such as South Africa, also shows the pattern of disbursement of these transfer of funds. “Data from household surveys reveal that households receiving international remittances from OECD countries have been making productive investments in land, housing, businesses, farm improvements, agricultural equipment, and so on.” The report added that many migrants transfer funds to households in their countries of origin for the purpose of investment – 36 percent in Burkina Faso, 55 percent in Kenya, 57 percent in Nigeria, 15 percent in Senegal, and 20 percent in Uganda.

Investing significantly

According to the report,” households receiving transfers from other African countries are also investing a significant share in business activities, housing, and other investments in Kenya (47 percent), Nigeria (40 percent), Uganda (19.3 percent), and Burkina Faso (19.0 percent).” Education was the second-highest use
of remittances from outside Africa into Nigeria and Uganda, the third highest into Burkina Faso, and the fourth highest into Kenya.

The report, titled ‘Leveraging M i g r a t i o n f o r A f r i c a : Remittances, Skills, and Investments’, added that the annual estimated saving, usually held in foreign countries, by Africans exceeds $50 billion. “African governments need to strengthen ties between Diaspora and home countries, protect migrants, and expand competition in remittance markets,” said Dilip Ratha, main author of the report and lead economist at the World Bank.

The report estimates that Nigerian emigrants saved about $3.5 billion annually, as at 2 0 0 9, a f i g u r e w h i c h represents about 2 per cent of the country’s gross domestic product. “Most of these savings are invested in the host countries of the Diaspora.,” the report added.

Diaspora bonds

According to Ratha¸ Sub- Saharan African countries can potentially raise $5-$10 billion a year in Diaspora bonds. Countries with large diasporas in high-income countries that can potentially issue its bonds include Ethiopia,
Ghana, Kenya, Liberia, Nigeria, Senegal, Uganda, and Zambia in Sub-Saharan Africa and Egypt, Morocco, and Tunisia in North Africa.

“Diaspora bonds can be sold globally through national and international banks and money transfer companies.
They can be marketed through churches, community groups, ethnic newspapers, stores, and hometown associations in countries and cities where large numbers of migrants reside,” according to Ronan McCaughey of the Laferty Group, a United Kingdom-based financial research and advisory services firm, remittances are important determinants of growth in West African countries”