Nigeria Content Online

Damilola Adegoke, a
writer, says he was discouraged by the procedure he was told to go
through before he could obtain a mortgage.

“I was asked to
first open accounts and save with the bank. They said after that, I
would be entitled to a mortgage of N5 million. I was told it was a 60
year repayment plan, and that you deduct your present age from the 60
years, within which you must finish the payment, so for instance, if I
am 30 years, I must repay the N5 million within 30 years. The
percentage they told me to pay annually, I think 20 per cent of the
borrowed sum, when I added it up, I saw that it amounted to about N12
million or more.

“That apart, I was
told categorically by the managing director of the bank that there was
no guarantee I would get the loan, I would just submit the form and
hope that it would be granted. I was told everything is based on
probability” Mr. Adegoke said.

Such is the tale of
about 80 per cent of mortgage applicants in Nigeria, a nation with a
weakening mortgage sub-sector which can barely create 10, 000 housing
units per annum. The nation is short of about 15 million housing units
to meet the demands of its citizens and would have to create about 700,
000 housing units in 20 years, if it would address her housing
challenges, according to Kola Ashiru-Balogun, an investment officer at
ARM, an asset and investment firm in Lagos.

Mr. Ashiru-Balogun at a recent conference added that banks have no appetite to lend to the mortgage sector.

However, in
recognition of the importance of the housing sector, and considering
that banks have ready access to cheap sources of funds through retail
deposits as well as the infrastructure to process real estate loans
efficiently and the skills to manage the risks involved, the Central
Bank has encouraged banks to support the development of the housing
sector in Nigeria.

Inadequate Funding

The Central Bank
has through its credit policies, required the erstwhile commercial and
merchant banks to allocate a stipulated minimum proportion of their
credit to the housing and construction sector.

According to the
Central Bank, available information reveals that the supply of credit
by the Federal Mortgage Bank of Nigeria is grossly inadequate to meet
the growing demand.

“With regard to
cooperative societies and state/municipal governments, evidence seems
to suggest some increase in the level of funding although, there
appears to be a lull in recent times owing to inadequate funds.

The lingering
challenges of mortgage financing in Nigeria includes low interest rate
on National Housing Fund, the hitherto high inflation rate negatively
affecting the macroeconomic environment, non-vibrancy of some primary
mortgage institutions, cumbersome legal regulatory framework for land
acquisition, The structure of bank deposit liabilities, among others.

“We need long term bond in this mortgage sector, I strongly believe Lagos State can champion this,” Mr. Ogunniran advocated.

Kelechukwu Mbagwu,
an executive member, Real Estate Developers Association of Nigeria,
(REDAN) said if builders can build with cheaper funds, it would be more
suitable for them to approach lenders.

Borrowers have
issues too Some experts say all the blame should not be put on the door
of the banks or lenders as some borrowers do not meet the requirements
to access such loans.

“The reality of the
matter is that for access to mortgage finance, usually, you would be
required to have a part funding. Most people who want to access
mortgage in this country do not have the capacity to provide the bank
part funding, so that is a major constraint. The second is collateral.
It poses very serious challenge to lenders” Abimbola Olayinka,
President, Primary Mortgage Institutions, (PMI) Association said.

Mr. Olayinka added
that unless the right environment is created to have the level of best
practice as seen across the world, the sector cannot really attract
investors.

“As it is now, the
system that we run is people driven, we have to get to a level where
mortgaging will be process driven. It should get to a stage where it
would no longer be, I know a friend who can help get this done within
the shortest time. All those long procedures must be cut down” he said
adding that there are so many bottlenecks in this present procedure,
“We have to create a smooth, formal transparent system”.

Another issue is
acquisition of land which takes a longer period in Nigeria. Processing
title and getting the required papers, especially certificate of
occupancy is not a simple matter. Hakeem Ogunniran, managing director,
UACN Property Development would be happier if it does not take more
than three days to acquire land and finish the processing of papers.

Striving forward

Some experts say
the financing of national housing programmes should be viewed primarily
as a national responsibility while the private sector should be
encouraged to provide actual investment funds for housing middle income
and upper income groups.

A Central Bank
report says empirical evidence shows that private sector participation
in housing is the most assured way to induce stability in the market.

“The housing fund
contribution should be integrated into the personal income taxation
system such that a defined proportion of taxes paid are allocated to
the housing fund pool, as it is done in Singapore. There is need for
constant re- engineering of the capital and money markets in order to
cope with the renewed challenges of provision of some mortgage
financing. In this regard, the restructuring and strengthening of the
FMBN becomes imperative for it to remain a viable financial institution
with the capacity to enhance efficient housing finance development in
Nigeria” Joseph Sanusi, a former Central Bank governor, said in a
report titled Mortgage Financing in Nigeria, Issues and Challenges of
2003.

A recent World Bank
report on the ease of doing business in Nigeria paints a picture of an
economy that is in dire need of reforms. According to the report, there
are several constraints to local business activities in Nigeria, chief
of which are the limitations for small to medium-size domestic firm to
thrive. The report focused on the aspects of starting a business,
dealing with construction permits, registering property, and enforcing
contracts.

In these areas,
Nigeria is still a long way behind. In enforcement of contract, it
requires 40 procedures and 457 days to achieve, while it takes up about
32 per cent of the income per capita of the population. To set up a
business for instance, would require about N118, 557. The report
however singled out Jigawa, Borno, and Gombe as states where there have
been improvements in the ease of doing business index. Doing business
was most difficult in Imo and Ogun states.

Improving
regulations Empirical research by the World Bank shows that improving
these regulations has positive effect on economic growth. “If Nigeria
adopted nationwide all of its states’ best practices identified in this
report, it would rank 72nd out of 183 economies globally, 53 places
ahead of Nigeria’s position in the global Doing Business 2010 report,”
the reported stated.

According to the
report, “Doing Buisness 2010 Nigeria” our country slipped in the global
ranking from 134th position last year to 137, behind South Africa,
Botswana, Tunisia, Rwanda, Ghana in Africa, on the grounds that it is
increasingly more difficult doing business in the country. The report
is supposed to engender reforms economic competitiveness among
countries. “But for reform-minded governments, how much their
indicators improve matters more than their absolute ranking,” the
report stated.

It challenges
countries to strengthen and add to regulations to protect investor and
property rights and find more efficient ways to implement existing
regulations and cut outdated ones. “One finding of Doing Business:
dynamic and growing economies around the world continually reform and
update their regulations and their way of implementing them, while many
poor economies still work with regulatory systems dating to the late
1800s.” Olusegun Aganga, minister of finance said recently that
government was concerned about the condition of doing business and that
is why it met with key operators to find out what their problems are.
“What we are trying to do is to find out what the issues are and what
government can do. We met with the banks and asked what we need to do
in order for them to start to lend to the real economy. There are a
number of things we need to do. One is legislative that we need to
change the Land Use Act, Evidence Act and Bankruptcy Act. Second thing
is establishment of commercial courts.” Mr. Aganga said two of these
documents are already with the National Assembly for deliberations in
order to help improve the ease of doing business in the country.

Manufacturing
challenges are many David Kliegl, general manager of the Federal Palace
Hotel and Casino, said in a recent interview that Nigeria is a
difficult environment to do business. Mr. Kliegl said, “It’s difficult
to do business in Nigeria. We run our generator 24 hours of the day and
that is very expensive. We have to estimate that in the cost of doing
business since we can’t cry about it.” “If you want to do business
here, you just have to live with these challenges,” he added. He would,
however, love to see a better Nigeria. “We’ll love to see stable power.
We believe that by being good corporate citizens, paying the taxes that
are due to the authorities, those funds will be used for the quick
provision of power and other basis infrastructure which would enhance
business and investments opportunities in the Nigeria.” “We are
investors in Nigeria and we understood what it took to do business
here. We are happy doing business in the country and we also want to be
a part to ensuring that infrastructure continues to get rectified
hereby attracting more investors,” Mr. Kliegl added.

Doyin Salami, a
member of the Monetary Policy Committee (MPC) of the Central Bank of
Nigeria (CBN) said there is need for synergy between the various
sectors of the economy. One way of doing this, according to him, is to
remove the Land Use Act out of the constitution so that it becomes a
policy issue rather than a constitutional matter which is cumbersome to
review. “The Land Use Act must be reorganized such that it makes
verification and transfer of title easy. Currently, farmers cannot
pledge land which is why banks are not willing to finance agriculture.”
Mr. Salami said it is ironic that agriculture, which contributes about
42 per cent of the GDP, does not attract credit from banks due to the
distortion in the Land Use Act which requires the consent of the
governor before deed of title is issued.

The end to the fall
of Nigeria’s foreign reserves may not be anytime soon as factors such
as strong demand for foreign exchange, year end expenditure, and
elections are predicted to still take a toll on the funds.

“A nation’s
falling foreign reserves has two levels of influence on the economy”
Biodun Adegboye, an economist and lecturer at the University of Lagos
said.

“It affects both
the external and the internal economic situation of a nation. Anytime
we have depletion, a country loses its credit worthiness, both
externally and even internally. Countries that would otherwise have
borrowed such an economy funds would become jittery and reluctant to do
so.” Mr.Adegboye also said such a country loses its confidence in
economic viability.”Look at China; they are seeking ways to grow their
foreign reserves. It’s over $1 trillion already. The advantage and
significance of a strong and solid foreign reserve base is to be able
to contain any external shock that may affect the smooth running of the
system. Let’s assume that there is an external shock and the country
cannot generate funds, how do we then push the budget demands and
balance its forecast?”

“In recent times,
we were told the existing foreign reserves can cover about nine months
of imports but at this rate, we cannot say this is what will happen.
The lower the months that can be covered however, the worse for an
economy.”

No cause for worry

A source at Eco
Bank however says there is no cause to worry or panic at this stage.
“The government have been embarking on some high revenue projects. Take
the power initiative for instance. We cannot say that because we want
to save money, we cannot invest in projects that would better the lives
of Nigerians. We must use our money to achieve these things. The issue
is that they should just be fair and sincere in their approach.

“The oil price is
high and encouraging. The country would always make money. Personally,
am not really worried about this. I believe that if indeed this money
is invested wisely,even if the accounts are down now, in a few months,
we should be able to build it up, to any reasonable level we desire” Mr.

Adegboye further
said that, “internally, what those funds are spent on is very
important. If they are spent on consumer goods, increase of salary, or
any such that increases the purchasing power of the residents of such
economy, it can overheat the economy and then lead to inflation and we
all know the implication of that”.

“On the other hand,
if such funds are spent on critical infrastructure, like creating good
roads, power, transportation, human empowerment, education and the
sort,then it would have a long run positive impact on the economy so
the question is what has the government been spending these funds on?”
he said.

Nigeria’s external
reserves have been falling at a rate at which experts say calls for
caution. In October, the nation’s foreign exchange reserves fell 15 per
cent to $34.57 billion compared to $40.75 billion at the same time a
year earlier.

Plans by Nigeria’s
“bad bank” to issue bonds in tranches to absorb bad loans from the
banking system will help limit the impact on the fledgling debt market
but yields and interest rates could still rise.

The newly formed
state Asset Management Company (AMCON) plans to issue zero-coupon bonds
in five tranches to absorb bad loans from nine banks rescued last year
in a $4 billion bailout. The aim is to help recapitalise the rescued
lenders and restore lending in sub-Saharan Africa’s second-biggest
economy. AMCON will issue bonds through the Debt Management Office
(DMO) to buy non-performing loans with a face value of 2.2 trillion
naira ($15 billion), although it has told bankers it expects to pay
around 800 billion naira for the assets.

It will also bring
the lenders’ negative shareholders funds to zero by injecting 1.7
trillion naira, before new investors come in to restore them to minimum
capital adequacy levels.

AMCON plans to
issue a 3-year zero-coupon bond, the first tranche of the series, by
the end of the year and replace it at maturity with a 7-year bond.
AMCON bonds will have the characteristics of sovereign bonds and can be
discounted by the central bank for cash. “The first 25 percent of the
bonds issued to the banks can be discounted with central bank, and the
balance traded for liquidity at the over-the-counter market (OTC),”
Vetiva Capital said in a note to investors following a meeting with
AMCON. Brokers said AMCON had consulted on the impact of issuing such a
large amount of bonds. The decision to issue them in tranches will
stagger the impact on the debt market, which is still largely dominated
by government bonds. “Actual asset purchases will only be in the region
of 0.8 trillion naira, so liquidity impact once the AMCON gets going
(is) more muted,” said Razia Khan, head of Africa research at Standard
Chartered Bank. Nigeria has raised just over 1 trillion naira in
government bond issues over the past 10 months.

Pressure on yields

Some analysts see
the impact on the debt market as limited because AMCON will raise bonds
to buy non-performing loans from banks which could then sell the bonds
for cash, meaning that the liquidity remains within the banking system.
“Even though money is being raised from the system, the bulk of that
money would go back to the system,” said Sonnie Ayere, head of
Lagos-based investment bank, Dunn Loren Merrifield.

But other analysts say AMCON’s activities could raise bond yields
and interest rates, with pension funds and banks lacking the levels of
liquidity needed to absorb such a large issuance. “If all the banks
decide to sell AMCON instruments to the market at once, it remains to
be seen whether the absorption capacity would actually exist,” said
Samir Gadio, emerging markets strategist at Standard Bank. If the
supply of bonds increases sharply without a corresponding increase in
liquidity to absorb, yields and interest rates could rise. “In the
absence of the central bank increasing liquidity in the system, an
increase in bonds through AMCON in the market place will increase
interest rates,” said Malcolm Gilroy of investment firm Afrinvest West
Africa.

An assessment of
the administration of the interim head of the Nigerian Stock Exchange
(NSE), Emmanuel Ikazoboh, after 100 days in office, produced mixed
results amongst some market operators.

While some analysts
said Mr. Ikazoboh’s administration may not have done much, it has
however, continued to challenge quoted companies on quick submission of
their financial results, which helps investment decision.

Meanwhile, some shareholders said his 100 days in office “has not been merrier” to them.

Olugbenga Emmanuel,
a finance analyst at WealthZone Company, a fund management firm, said,
“One thing you cannot take away from his tenure is the rate and manner
in which (quoted) companies are presenting their quarterly and annual
financial accounts to the investing public. Even those that cannot meet
up have had to write the Exchange for permission.”

Mr. Emmanuel said
in the past, companies abuse such, adding that “portfolio managers
don’t see reports until we cry and shout on these companies. And such
delay in results ends up affecting our investment decisions.”

Market experiment

But a stockbroker,
who pleaded anonymity, said some of the current decisions taken by Mr.
Ikazoboh’s administration “suggest that he is only experimenting with
the market and taking orders from the Securities and Exchange
Commission (SEC).”

Sunny Nwosu, the
national coordinator of the Independent Shareholders Association of
Nigeria (ISAN), said the Stock Exchange has continued to work in
phobia.

“They don’t know
whether they are doing the right thing or the wrong thing. So as a
result of that, they’ve been very jittery, and that is why they
continue to make more mistakes,” Mr. Nwosu said.

He said it is a
mistake on the part of the NSE to plan the introduction of a 10 percent
appreciation or depreciation in equity prices.

“All they are
trying to do is to say during our period we were able to move the
capitalisation of the capital market to the greater height; whereas, on
the same line, it could pull down and erase every gain that the stock
exchange is presently enjoying,” he added.

Shareholders not happy

Mr. Nwosu said the
other negative side of Mr. Ikazoboh’s tenure is the merger of Benue
Cement Company (BCC) with Dangote Cement.

“BCC was consumed
by a company not known on the list of quoted investment in capital
market. In doing that, the shareholders of BCC were all cheated,” he
said.

He said
shareholders were never informed about the merger at the company’s
annual general meeting two months after Dangote Group got a court order
for a merger with BCC.

“The process simply was manipulative and a breach of the normal merger procedure,” he added.

“It was unfortunate
that the Stock Exchange led by Ikazoboh allowed that to happen. He has
compromised every standard trying to achieve a higher capitalisation.
Even the almighty SEC also allowed that to happen. It’s a very bad
example of his tenure. His 100 days has not been merrier to us,” Mr.
Nwosu further said.

Market down

Meanwhile, the
value of equities at the capital market, which plunged last Friday,
further depreciated at the close of Monday’s trading. The Exchange
market capitalisation closed lower at N8.079 trillion, after opening
the day at N8.100 trillion, reflecting 0.25 percent decline or N21
billion losses.

Investments
in projects to boost deepwater oil production in West Africa have grown
by more than 10 fold in the last decade, from about $1.5 billion in
2000 to the current level of about $15.6 billion (N2.34 trillion).

Oil
industry operators noted yesterday at the opening of the 3rd Regional
Deepwater Offshore Conference and exhibition organised by the Nigerian
Association of Petroleum Explorationists (NAPE) in Abuja that the
significant growth exceeds the combined investments for onshore and
continental shelf areas.

Mark
Ward, chairman/managing director, Mobil Producing Nigeria, said the
level is expected to climb even further, with ongoing new deepwater
projects being developed in Nigeria, Angola, and Ghana.

Mr.
Ward, however, bemoan the high cost of executing deepwater projects,
pointing out that the declining oil prices significantly contrasts with
the limited local construction capability, which, he said, has been
identified as a major feature of the high cost profile of deepwater
projects in West Africa.

With
over 25 billion of oil equivalent barrels discovered in deepwater West
Africa since the early 1990s, Nigeria and Angola, the ExxonMobil boss
said, have achieved the biggest exploration success, with discoveries
in fields like Erha, Bonga, Bosi, and Agbami in Nigeria, and Girassol,
Dalia, Kissange, and Kizomba in Angola.

In
spite of increasing discoveries and basin maturity, he said discovery
size and reserve per well has decreased, with average discovery for all
of West Africa reducing significantly between 2000 and 2004 when
compared with the level before 2000.

“Since
2005, the average discovery size trend for West Africa has increased,
while average Nigeria discovery size has continued to decrease,” he
said, adding that the trend goes with increase in operational cost,
with unit capital cost for projects put at about 50 percent higher than
unit capital cost of existing fields.

Operating cost is essential

He
underlined the need for fiscal terms to take into consideration the
unique attributes of fields and the high cost of operating them. Mr.
Ward said this was the only way to avoid deepwater oil discoveries from
being stranded.

He
listed other facilitators to include technology, stable fiscal terms,
as well as balancing Nigerian Content Development initiative with
efficient project development processes, arguing that “while Nigerian
Content Development is important, it needs to be paced, realistic, and
collaborative,” as imposition could stifle both the total in-country
projects and pace of project development.

Diezani
Alison-Madueke, petroleum resources minister, acknowledged deepwater as
a critical frontier for the West African region and Nigeria in
particular, when the country’s aspiration is to increase its oil
production capacity and national reserves, saying this has informed
government’s focus on the development of the country’s deepwater assets.

“Despite
the recent exploration decline, Nigeria has done an aggressive work to
ensure that going torwards the fiscal terms for Nigeria’s deepwater
assets are attractive enough to enable progressive growth in the next
couple of years.

“The
Petroleum Industry Bill (PIB), which encompasses the fiscal regimes for
deep offshore production sharing contracts (PSCs), is currently being
debated in the National Assembly, to ensure that by the time it is
promulgated into law, the interest of all would have been
accommodated,” Mrs. Alison-Madueke said.

The theme of the conference, co-hosted by the American Association
of Petroleum Geologists (AAPG), was: ‘West Africa Deepwater: Successes,
Challenges and Future Prospects.’

Everyone knows that
traffic in Lagos is becoming more and more of a serious problem. I
learnt that it is also a problem in Abuja as well. This brings to
question the point of having to go to the office each day, especially
on days when you do not have any meetings scheduled.

In Western
societies, a whole lot of people opt to work from home. Working from
home on days when your presence at the office is not essential is very
easy using a variety of remote access software, one of which is LogMeIn.

LogMeIn uses their
website as a bridge between two computers, which may be on opposite
sides of the planet. Simply go to their website (www.logmein.com) and
create an account, then download the client software onto the computer
that you want to connect to. It is very easy to install on either
Windows or Mac platforms, and it is light on system resources. (In my
Windows XP virtual machine, it uses just 8MB of memory).

Once you have the
client software installed, using the computer from another location is
a breeze. Simply go to the website, log into your account, and you will
see the names of all the computers on which you have installed the
client software. Simply click on the name of the computer you want to
connect to, and you will be taken to that computer’s desktop. Change to
full screen mode, and it would be like you are right in front of that
computer.

Because LogMeIn
connects to your remote computer over the Internet, there’s no need to
change the firewall settings on any of your computers.

LogMeIn works with
Internet Explorer, Firefox, Chrome, or Safari. It has Windows and Mac
OS clients available for download, and there is a free version which
allows you do everything you need to do while working away from the
office, except to print. It is also very secure.

If your boss is one
of those who insists on productivity over eye-service, and you have a
reliable Internet connection at home (or in a cafe near you), then
forget about killing four to six hours a day in Lagos traffic. Just
LogMeIn.

Plans by Nigeria’s
“bad bank” to issue bonds in tranches to absorb bad loans from the
banking system will help limit the impact on the fledgling debt market
but yields and interest rates could still rise.

The newly formed
state Asset Management Company (AMCON) plans to issue zero-coupon bonds
in five tranches to absorb bad loans from nine banks rescued last year
in a $4 billion bailout. The aim is to help recapitalise the rescued
lenders and restore lending in sub-Saharan Africa’s second-biggest
economy. AMCON will issue bonds through the Debt Management Office
(DMO) to buy non-performing loans with a face value of 2.2 trillion
naira ($15 billion), although it has told bankers it expects to pay
around 800 billion naira for the assets.

It will also bring
the lenders’ negative shareholders funds to zero by injecting 1.7
trillion naira, before new investors come in to restore them to minimum
capital adequacy levels.

AMCON plans to
issue a 3-year zero-coupon bond, the first tranche of the series, by
the end of the year and replace it at maturity with a 7-year bond.
AMCON bonds will have the characteristics of sovereign bonds and can be
discounted by the central bank for cash. “The first 25 percent of the
bonds issued to the banks can be discounted with central bank, and the
balance traded for liquidity at the over-the-counter market (OTC),”
Vetiva Capital said in a note to investors following a meeting with
AMCON. Brokers said AMCON had consulted on the impact of issuing such a
large amount of bonds. The decision to issue them in tranches will
stagger the impact on the debt market, which is still largely dominated
by government bonds. “Actual asset purchases will only be in the region
of 0.8 trillion naira, so liquidity impact once the AMCON gets going
(is) more muted,” said Razia Khan, head of Africa research at Standard
Chartered Bank. Nigeria has raised just over 1 trillion naira in
government bond issues over the past 10 months.

Pressure on yields

Some analysts see
the impact on the debt market as limited because AMCON will raise bonds
to buy non-performing loans from banks which could then sell the bonds
for cash, meaning that the liquidity remains within the banking system.
“Even though money is being raised from the system, the bulk of that
money would go back to the system,” said Sonnie Ayere, head of
Lagos-based investment bank, Dunn Loren Merrifield.

But other analysts say AMCON’s activities could raise bond yields
and interest rates, with pension funds and banks lacking the levels of
liquidity needed to absorb such a large issuance. “If all the banks
decide to sell AMCON instruments to the market at once, it remains to
be seen whether the absorption capacity would actually exist,” said
Samir Gadio, emerging markets strategist at Standard Bank. If the
supply of bonds increases sharply without a corresponding increase in
liquidity to absorb, yields and interest rates could rise. “In the
absence of the central bank increasing liquidity in the system, an
increase in bonds through AMCON in the market place will increase
interest rates,” said Malcolm Gilroy of investment firm Afrinvest West
Africa.

Sadly in our consumption driven
society, many of us have come to believe that all our worries will be
solved if we have more money. Indeed, wealth has become the ultimate
measure of who we are, and we have become defined by it. When we chase
after money for its own sake, we can damage our value system and we pay
for it in time, health, and stress.

What does money mean to you?

Do you have a healthy relationship with
money? Do you worship it? Or do you use it as a tool to achieve your
goals? Does your life depend on it? What really matters to you? What
really does make you feel happy and fulfilled?

It is important to understand your own
money personality and to put it in the right perspective. The ways in
which we make money and how we spend it reveal a lot about our
personality. This relates to the emotional aspects of money such as
needs, values, relationship choices, feelings about earning and career
choices, spending, saving and investing. Issues of control, security,
self esteem, and sense of well-being are always evident when money
matters come up.

Maslow’s hierarchy of needs

What do we need? Abraham Maslow was an
American psychologist best known for establishing his theory of the
“hierarchy of needs” which he developed in the mid 1900’s.This model
served as a tool for understanding human motivation and development. He
identified five levels of human needs that must be satisfied by a
person’s environment in order for him or her to attain full potential.
Maslow’s pyramid illustrates human needs stacked in layers with
physiological needs at the base of the pyramid and self-actualisation
and fulfilment at the highest level.

The first and lowest level involves the
most basic needs; that is, what a person needs to stay alive, such as
air, water, food, sleep, warmth, shelter and hygiene. At the second
level, Maslow places safety, security, employment, money and financial
stability, and good health. By the fifth level the human being seeks
self-actualisation and fulfilment. He has the desire and ability to
grow; doing something that makes life complete such as, supporting a
cause, taking up a calling to realize personal potential, or seeking
personal growth.

Relationship between money and happiness

Why doesn’t the lucrative promotion or
the brand-new five-bedroom house keep us swathed in a permanent state
of happiness? We like to think that if we just had a little bit more
money, we would be happier but when we get there, something is still
missing. It appears that the more money you have, the more you want and
that buying the car, boat or bike of your dreams, brings you transient
joy rather than a deep lasting sense of fulfilment. We tend to
overestimate how much pleasure we will get from having more money.

Certainly, earning more makes you happy
in the short term, but you quickly adjust to your new lifestyle and all
it brings. Naturally there is that thrill of the shiny new car but soon
you get used to it and start wanting the newer, more powerful model.
Having made a special purchase, we immediately dream of acquiring the
better, “latest” version. Scientists call it ‘the hedonic treadmill’ –
and many people spend far too much time on it.

The Hedonic Treadmill

Professor Emeritus Richard Layard,
LSE’s Director of The Centre for Economic Performance, in “Happiness:
Lessons from the New Science” discusses the relationship between
happiness and rising standards of wealth. A critic of consumer society
and the all-consuming pursuit of money, he suggests that we eventually
get trapped on the “hedonic treadmill”. Our happiness begins to wane as
we start to take the new positive changes in our life for granted.

Money brings temporary happiness. A
dramatic change in wealth such as the move from abject poverty to
financial security can significantly increase happiness, but the
satisfaction will be transient; its effect will only last until the
beneficiary gets used to their new status. He argues that once poverty
and discomfort have been eliminated, extra income is much less
important than human relationships. So how do we step off the hedonic
treadmill?

What brings more lasting happiness?

Having spent several years interacting
with people with various levels of wealth, I am convinced that money
does not in itself create or sustain happiness. It certainly buys
things and improves the quality of life and a standard of living. Yes,
money is important, as it helps us to pay our bills, educate our
children, support our families, but if we rely on it as the key to
happiness, it can be illusory as it does not usually address the real
issues such as, concern for their families, problems in relationships,
and work related stress.

Money can buy food, shelter, education,
and pays for healthcare and day-to-day comforts. Of course if you don’t
have enough money to send your children to school, can’t provide for
your elderly parents, or can’t afford an expensive surgery that would
alleviate the pain from an old injury, it would be hard to be happy. In
that sense, money can buy happiness by eliminating some worries and
bringing quick relief to financial concerns.

Beyond that, longer-term happiness is
dependent upon one’s personality and how fortunate one is to have the
truly important things in life: a strong relationship with God, a
loving family, good reliable friends, good health for yourself and your
loved ones, a fulfilling and secure job, a safe environment, moral
values and freedom.

Happiness comes from giving

Having money is a great responsibility
because it enables one to do things. Material possessions eventually
lose their sparkle then beg to be replaced. Yet, one can make
transformational gifts by helping others and even shaping or saving
lives. It is through generosity that we attain the best relationship
with money. By deciding to make a difference in someone else’s life,
you give more meaning to your own. The joy that this brings is a
lasting form of happiness.

The constant message that is relayed in our society that money is
the most important thing in our lives and the constant desire for more
has far reaching consequences for our value system and morals. This
unending pursuit of money has damaged family relationships, our
environment and our country. If you earn your money in a healthy,
honest way, and spend it wisely, you have a better chance of being and
staying happy.

A recent World Bank
report on the ease of doing business in Nigeria paints a picture of an
economy that is in dire need of reforms. According to the report, there
are several constraints to local business activities in Nigeria, chief
of which are the limitations for small to medium-size domestic firm to
thrive. The report focused on the aspects of starting a business,
dealing with construction permits, registering property, and enforcing
contracts.

In these areas,
Nigeria is still a long way behind. In enforcement of contract, it
requires 40 procedures and 457 days to achieve, while it takes up about
32 per cent of the income per capita of the population. To set up a
business for instance, would require about N118, 557. The report
however singled out Jigawa, Borno, and Gombe as states where there have
been improvements in the ease of doing business index. Doing business
was most difficult in Imo and Ogun states.

Improving
regulations Empirical research by the World Bank shows that improving
these regulations has positive effect on economic growth. “If Nigeria
adopted nationwide all of its states’ best practices identified in this
report, it would rank 72nd out of 183 economies globally, 53 places
ahead of Nigeria’s position in the global Doing Business 2010 report,”
the reported stated.

According to the
report, “Doing Buisness 2010 Nigeria” our country slipped in the global
ranking from 134th position last year to 137, behind South Africa,
Botswana, Tunisia, Rwanda, Ghana in Africa, on the grounds that it is
increasingly more difficult doing business in the country. The report
is supposed to engender reforms economic competitiveness among
countries. “But for reform-minded governments, how much their
indicators improve matters more than their absolute ranking,” the
report stated.

It challenges
countries to strengthen and add to regulations to protect investor and
property rights and find more efficient ways to implement existing
regulations and cut outdated ones. “One finding of Doing Business:
dynamic and growing economies around the world continually reform and
update their regulations and their way of implementing them, while many
poor economies still work with regulatory systems dating to the late
1800s.” Olusegun Aganga, minister of finance said recently that
government was concerned about the condition of doing business and that
is why it met with key operators to find out what their problems are.
“What we are trying to do is to find out what the issues are and what
government can do. We met with the banks and asked what we need to do
in order for them to start to lend to the real economy. There are a
number of things we need to do. One is legislative that we need to
change the Land Use Act, Evidence Act and Bankruptcy Act. Second thing
is establishment of commercial courts.” Mr. Aganga said two of these
documents are already with the National Assembly for deliberations in
order to help improve the ease of doing business in the country.

Manufacturing
challenges are many David Kliegl, general manager of the Federal Palace
Hotel and Casino, said in a recent interview that Nigeria is a
difficult environment to do business. Mr. Kliegl said, “It’s difficult
to do business in Nigeria. We run our generator 24 hours of the day and
that is very expensive. We have to estimate that in the cost of doing
business since we can’t cry about it.” “If you want to do business
here, you just have to live with these challenges,” he added. He would,
however, love to see a better Nigeria. “We’ll love to see stable power.
We believe that by being good corporate citizens, paying the taxes that
are due to the authorities, those funds will be used for the quick
provision of power and other basis infrastructure which would enhance
business and investments opportunities in the Nigeria.” “We are
investors in Nigeria and we understood what it took to do business
here. We are happy doing business in the country and we also want to be
a part to ensuring that infrastructure continues to get rectified
hereby attracting more investors,” Mr. Kliegl added.

Doyin Salami, a
member of the Monetary Policy Committee (MPC) of the Central Bank of
Nigeria (CBN) said there is need for synergy between the various
sectors of the economy. One way of doing this, according to him, is to
remove the Land Use Act out of the constitution so that it becomes a
policy issue rather than a constitutional matter which is cumbersome to
review. “The Land Use Act must be reorganized such that it makes
verification and transfer of title easy. Currently, farmers cannot
pledge land which is why banks are not willing to finance agriculture.”
Mr. Salami said it is ironic that agriculture, which contributes about
42 per cent of the GDP, does not attract credit from banks due to the
distortion in the Land Use Act which requires the consent of the
governor before deed of title is issued.