Nigeria Content Online

The use of the .ng domain for online
business transactions with other countries is said to be affecting
business negatively, due to the high level of cyber crimes in the
country.

Bunmi
Akindele, a business woman, said, “Considering the way those in Europe,
United States, and Asia, among others, see Nigerians as a fraudulent
people to do online business with, using the .ng domain for your
business will certainly affect your business with organisations abroad.

“I
cannot register my company name with the .ng domain because it will
ruin my business as I cannot order for goods with that domain’s name
because it exposes my identity. The country has been portrayed in a bad
image because of the yahoo yahoo deals (Internet fraud) in Nigeria,”
added Ms. Akindele.

IP address, not .ng

However,
in a telephone interview with NEXT, Lanre Ayaji, the president of
Nigerian Internet Group (NIG) explained that the .ng domain name is not
the cause of failed online transactions, but the Internet Protocol (IP)
addresses from Nigeria.

“I
don’t really think that is the major reason why people are not using
it. I have been using the .ng domain for over 10 years now, and I have
not had any serious problem with it. People abroad who are scared of
doing business with Nigerians online are not using the domain name to
discriminate; they usually use the IP address to discriminate. The
discrimination is not done manually; it is done by the application
system that is operated abroad, and it is on that system that they list
the IP address which they don’t want to accept.

“The
moment an IP address is identified to be that of a Nigerian, that
person is barred from doing business online with that organisation. So,
it is not the domain name that causes the problem. Anybody that has a
perception that if he or she uses .ng, they will have problem doing
business online may have to re-examine that view. I think that is just
a mere perception, and not the reality,” said Mr. Ajayi.

Blame it on cybercrime

However,
operators agree that the high incidence of cybercrime is a major issue
that has also affected online transactions with Nigerians.

Mr.
Ajayi said, “I will encourage people to take up the .ng domain as it
may not affect their online transactions. But that is not to say that
the incidence of cybercrimes have not affected online transactions from
Nigeria.”

The
absence of policy to tackle cyber crime is a major problem. Jimson
Olufuye, the president of Information Technology Association of Nigeria
(ITAN), called on the federal government and regulators to put in place
appropriate legislations on cyber security to mitigate crimes. Mr.
Olufuye urged government to key into the toolkit recently launched by
the International Telecommunication Union (ITU) to reduce cybercrime
globally.

Benefits of .ng domain

Ugo
Akiri, an official of the Nigeria Internet Registrations Association
(NIRA), said the benefit of using the .ng domain are enormous,
particularly with regard to cleaning up the country’s image.

“The
.ng domain is a good instrument that will help to clean up Nigeria’s
image in terms of the negative use of the Internet these past years.
This will also help us to generate enough resources to invest in the
new generic top-level domain name (gTLDs) before foreigners overrun us
by taking up viable Nigerian geographical names for their new gTLDs.

“Access
to information is very important, as the world is developing daily by
new technologies and better ways of doing things. So, this would impact
on our access to information generally, and on education specifically,
as more Nigerian content will be available on the web,” she said.

Mr.
Ajayi also added that if Nigerians can register their businesses with
the .ng domain, it will help to improve the country’s economy without
the attendant capital flight.

“For
Nigerians, it saves foreign exchange. If you are not registered with
.ng, you would be registering with another gTLD and would be paying
dollar to the other country, but when you register with .ng, you are
paying naira to the registrar and you are saving money for the country,
instead for another country,” he said.

Transparency International, the global
corruption watchdog, wants member nations of the Group of 20 (G20) to
step up their efforts towards sustained financial sector reforms
against the background of growing corruption and negative impact on
economic recovery efforts.

Ahead of the
group’s two-day annual Finance Ministers and Central Bank Governors
meetings, which begins today in Washington D.C., United States of
America, the global anti-corruption body stated that reforms would
entrench ethical corporate governance in the face of growing prevalence
of financial frauds in the financial institutions of most members of
the group.

Good corporate
governance, according to its Chairman, Huguette Labelle, is critical to
sustainable financial institutions, adding that the integration of good
governance and anti-corruption measures are critical to the
sustainability and effectiveness of the reform measures.

“The time to act is
now to entrench good corporate governance culture. It is two years
since the onset of the financial crisis and the critically needed
reforms to protect the general public from fraud must be fully
implemented. The current scandals underline the need for better
oversight and efficient law enforcement,” he said.

Group’s resolutions

Mr. Labelle
recalled the group’s resolution calling on G20 members to ensure that
they implemented the financial regulations outlined at the end of its
meeting in 2008 as the main structural solutions to averting future
economic crises, warning that the complexities in new regulations on
derivative trading, hedge funds, “too big to fail” institutions or
prudential standards should not be a reason for any delay.

Stressing the need
for regulatory agencies to strengthen the transparency of all financial
products marketed to investors, the global body said this would ensure
clear requirements for comprehensive disclosure, and prevent abuses of
off-balance sheet instruments, while individuals and firms would be
sanctioned for fraud.

“Lack of corporate
governance, weak ethics and poor regulation was at the heart of the
financial crisis. This should not be allowed to happen again. Any
corporate communication to investors and to the general public should
be designed to inform them, and not to purposely sell weak products or
publish dressed up quarterly figures.

“If anyone has any
doubt about the urgent need for the G-20 to make integrity a crucial
issue in global financial reform, then they just have to look at
today’s newspaper headlines,” Mr. Labelle said.

World Bank statistics

Available World
Bank statistics, according to Mr. Labelle, indicates that the global
financial meltdown last year directly prevented over 50 million people
in the developing world from escaping abject poverty, adding that the
Finance Ministers and Central Bank Governors should use the occasion of
this week’s meeting to consider a comprehensive analysis of the G20
Action Plan to forestall a repeat of the global economic crisis.

As part of efforts
to entrench corporate governance in the nation’s financial system, the
Board of Directors of the Central Bank of Nigeria (CBN) late last week
rolled out an amendment of prudential guidelines on loan loss
provisioning first issued in 1990, prescribing a set of minimum
requirements for banks and other financial institutions.

The apex bank’s
governor, Sanusi Lamido Sanusi, said the review became necessary
bearing in mind the current dynamics in the industry to provide
measurement for loans, establishment of loan losses allowances, credit
risk disclosure and related matters.

The approved
amendment recognizes ‘Specialized Loans’ and ‘Other Loans’ as the two
provisioning categories, with the former using time-based approach,
while the current prudential guidelines for specific loans loss
provisions shall continue to be applied to other loans type.

According to Mr.
Sanusi, the time-based approach establishes longer time lines for
measuring asset quality, based on the gestational periods for projects
in sectors of the economy such as small and medium enterprises (SMEs),
agriculture and infrastructure.

The ‘Specialized
Loans’ comprise mortgage loans, margin loans, object finance, project
finance, real estate loans, SME loans and others, including corporate,
commercial and retail loans, advances, overdrafts, commercial papers,
bankers acceptances, bills discounted, leases, guarantees and other
contingencies connected with a bank’s credit risks.

First Bank of
Nigeria Plc, suffering from huge post-audit losses like every other
bank in the country, refines growth strategy for the current fiscal
year.

First Bank in its
financial report for the nine month period ended December 31, 2009, in
line with the common year end required by the Central Bank of Nigeria,
reports 29 percent increase in gross earnings and 15 percent increase
in operating income.

However, profit before and after tax nose-dived deeply by 72.64 percent and 90.5 percent respectively.

Nonetheless, the
bank appears to be already making up for the losses as its first
quarter 2010 results recorded a 62 percent quarter on quarter increase
in profit, before tax and capital adequacy of 16.6 percent.

Although gross
earnings stood at N62.4 billion for the three months ended March 3,
2010, showing a year on year decrease of 10.6 percent, from N69.8
billion in March 31, 2009, profit before tax was put at N15.4 billion,
following a loss of N9.8 billion in March 2009. However, this is an
increase of 62.1 percent quarter on quarter (N9.5 billion December
2009).

On the other hand, shareholders’ funds stood at N310 billion, a decrease of eight percent from N337 billion in March 2009.

Stephen Olabisi
Onasanya, Group Managing Director of First Bank, while commenting on
the year end results, in a statement made available to NEXT, said: “We
have also refined our strategy based on four strategic themes and
priorities: growth via the diversification of assets and revenue
streams; service excellence by developing world class processes,
systems and capabilities; performance management to create a culture of
individual accountability at all levels; and developing talent with a
view to becoming the hub for the best talent in the industry.”

Financial highlights

The group’s
financial highlights show gross earnings of N196.4 billion during the
period in review, or an increase of 29 percent compared with N152.5
billion recorded in the corresponding period of 2008.

Operating income
was put at N130.5 billion (N113.2 billion December 2008), an increase
of 15.3 percent; profit before tax of N11.6 billion (N42.4 billion
December 2008), 72.64 percent fall impacted by an increase in
provisions for loan-losses post CBN-audit.

Profit after tax
stood at N3.2 billion (N33.9 billion December 2008), representing over
90.5 percent decrease, while shareholders’ funds fell to N310 billion,
a decrease of six percent from N331 billion year on year.

Also, full and
conservative provision against loans and advances rose to N40.6
billion, as at December 31 2009, compared to N18.9 billion a year ago.
Loan-to-deposit ratio fell to 81 percent, down from 84 percent during
the period in review, while non-performing loan ratio rose to 8.2
percent from 2.1 percent in December 2008. Also, cost/income ratio rose
to 60 percent, up from 56.4 percent in December 2008.

Basic earnings per share was put at 10.99 kobo for the nine month period, compared to N1.36 as at December end 2008.

Speaking on the
result, Mr. Onasanya said, “As highlighted in our results, 2009 has
been a tough year for the Nigerian banking sector as a whole and this
is reflected in our performance. We have also made full provisions in
compliance with the CBN requirement and I am pleased to say that our
operating performance and financial stability remain solid, with
operating income up 15.3 percent, against the prior year period and a
risk weighted capital adequacy ratio (CAR) of 15.8 percent, well in
excess of the regulatory minimum.”

Strategic Themes

Despite the huge
losses, Alex Otti, Executive Director, South, noted that total deposits
for the Group continued to grow over the period, albeit at a slower
pace. “However, since the year end, there has been a flood of liquidity
into the system, which has brought fixed income yields to record lows,
dragging deposit rates down with them, and potentially lending rates as
well, albeit at a much slower rate.” However, the bank is anticipating
a pick-up in mergers and acquisition activities, in the banking sector
with further growth in infrastructure funding.

The bank also said
it will focus more on investment banking, asset management, insurance
and international expansion, and plans “to consolidate our subsidiaries
within five business groups (First Bank of Nigeria, FBN Bank
International, Investment Banking & Asset Management, Insurance,
and Emerging Ventures),” which will be overseen by a new Group
Management Committee.