Business opportunities in our import, export data

Data made available by the National Bureau of Statistics reveals that in the first quarter of 2012 (Q1 12), Nigeria’s bulk import of just fifteen items cost N389 billion (that is equivalent to 74.68% of the funds shared by the three tires of government in July).

In the second quarter (Q2 12), the figures which may be officially released later this week are not better than Q1 12 data. As a matter of fact most of the commodities in the Q1 12 are in the Q2 12 major import list.

Importation of food items like soya beans and sugar cane, in solid form, cost Nigeria N43.7billion and N36.8 billion respectively while frozen mackerel (fish) cost Nigeria N32.2 billion in Q1 12 (this is just official data which does not account for all items brought into the country).

The single highest consumer of forex in the first quarter was used passenger motor vehicles. Nigeria spent N63 billion on importing used cars. While imported motorcycles and tricycles (Keke na pep etc) brought in by established manufacturers cost us N19.74 billion. Over all, the data on import in Q1 12 underscores the fact that the growth in local manufacturing of some food items and transportation gear has been outstripped by demand for them hence the need to bridge the gap with import.

Imports in the category of goods already stated still accounted for a significant chunk of Nigeria’s external purchase. If Nigeria spends so much to get these commodities why are Nigerian businessmen not taking advantage of the economies of scale which the country possess to produce them locally, especially the agric based ones.

Though Q2 12 data have not been officially released, some sources have strongly indicated that used vehicles, some other transport paraphernalia and some food items again gulped most of Nigeria’s forex.

A disaggregation of imports by country last year shows that, imports from Asian countries (excluding Japan) were dominant source and accounted for 39.6 per cent of Nigeria’s total import. China ranked highest in the group, with a share of 20.0 per cent of the total.

Imports from industrialized countries accounted for 35.5 per cent with the USA topping the list with a share of 11.4 per cent. The share of imports from African countries was a mere 2.1 per cent in 2011; casting doubt on the progress Nigeria has made at regional integration.

But last year, Nigeria made some gains in closing the gap between what it pays for import and what it is paid for export. According to the Central Bank, in 2011, the overall Balance of Payments position swung from a deficit in 2010 to a surplus of N47.1 billion, but the gains were primarily because of the performance of export trade in oil (the price of Nigeria’s reference crude, Bonny Light, grew on an annualized basis from an average of US$81.6 per barrel in 2010 to US$113.8 in 2011 an increase of 39.5 per cent.)

There are a few companies in Nigeria, both indigenous and foreign, that have taken advantage of the opportunities and have not only produced for local consumption but for export. Olam Nigeria Limited was ranked first last year at the company raked in $444.0 million, largely through the export of sesame seeds and cocoa beans to Japan and Europe.

Bolawole Enterprises Nigeria Limited earned $146 million from export of cocoa beans to the Netherlands also; Unique Leather Finishing Company raked in US$124.1 million through export of leather to Italy.

While Imoniyame Holdings Limited and Saro Agro Allied Limited which ranked fourth and fifth with US$97.8 million US$79.5 million, respectively did so on account of exporter of Nigerian Processed Crumb Rubber and cocoa which they specialized in exporting.

The intelligence in the data is of two folds. First, there is a large market of soya beans and sugar cane which is yet to be filled. Nigerian businesses can take advantage either through investing in growing these products or processing for domestic consumption, in the long run, export may be a forex earner too.

Secondly, it is clear that there are some commodities which have export capability in Nigeria. Production may not have export as its primary target, so businesses who are discerning can galvanize their processes to buy in bulk for export.

An affair with pirated software

If Nigeria is to replicate the success of India in software development and outsourcing, there has to be a recalibration of the way we apply copyright law. Our survey reveals that for every ten Nigerian software users, eight use non-genuine or pirated copies.

The most widely used pirated software include the Microsoft Office Suite (85%), Microsoft’s Operating System (91%) and various software used for editing pictures (40%) (See chart 1).

Furthermore, students are more likely to copy and share pirated software than any other class of software users in Nigeria. Though they have an assortment of software they typically do not buy originals. They meet their software needs by copying from friends (63%), buying non-genuine copies from shops (14%), downloading trial versions and cracking them (20%), or buying originals (3%).

The general population is not much different; the minor difference lies in the fact that a number of working individuals get original software from their work places. Our research also revealed that specalised, professional software, especially for fields like facility management, accounting and engineering are less likely to be pirated than general use software.

It is gladdening to note that most of our respondents indicate that they prefer originals because of the many challenges with security checks and other difficulties they experience with non-genuine copies.

They also indicated readiness to buy original copies At Computer Village, Nigeria’s busiest computer and software market, an original copy of the Microsoft’s Office Suite (home premium, single user) costs between N15,000-N20,000, while a pirated copy costs between N150-N200. An original copy of Microfit for Windows, an econometrics software, costs N130,000 and sometimes you need to place an order before you get a copy, but a pirated version costs just N700 or less. But pirated copies often fail during installation, but that has not deterred those who buy.

Our survey revealed that for every single shop that offers original software there are five others which offer alternative pirated copies at Computer Village. Some shops even sell both. When we spoke to pirated copy marketers, most saw no reason why their trade should be interfered with; they attributed their persistence in the trade to the low capital required for the business and high patronage.

But different institutions are working to see that the tide is reversed. Earlier this year, Microsoft (which has suffered most of the piracy, according to our survey) organized a roundtable discussion to commemorate World Intellectual Property Day; the gathering drew attention to how the use of non-genuine software threatens legitimate businesses and creates a negative impact on both global and local economies.

Microsoft is not alone in its condemnation of piracy. The Institute of Software Practitioners of Nigeria (ISPON), a body set up to facilitate business and trade in software and related services, has as part of it mandate to a goal to “develop rules and regulations that will discourage software piracy and ensure that software products and services are used in accordance with intellectual property rights”. How far the body will go is ultimately a function of government’s commitment and support through effective legislation.

There is business intelligence in all of this data. Over half of respondents say if prices were lower they would change (53%) to originals, nine percent stated that they would switch to originals if there is regulation of intellectual property which punishes violation, while 24 percent say they will buy originals if fakes have negative impact on their computers (see chart 2). All of these factors are variables which a proactive software producer can creatively affect to suit its markets.

What Nigerians think of the cash-less economy policy

Another big leap in CBN policy?
No doubt, the cash-less economy policy initiative of the Central Bank of Nigeria (CBN) is a move that will improve the financial terrain but in the long run, sustainability of the policy will be a function of endorsement and compliance by end users.

The level of endorsement can be effectively gauged by research that bears the minds of the end users. In the light of this, we conducted a survey to determine among other things:

• The extent to which Nigerians understand the cash-less economy initiative,
• Its level of acceptance,
• The extent to which they perceive the policy will ease business for them , and
• Changing attitudes towards ATM and online banking.

It’s all about the people
To achieve objectivity, respondents were randomly selected from the Top/middle segment of society as well as the Lower segment (Please, refer to footnote for definition of Top/middle and Lower segment as used in this research). They were reached through various channels, including: focus group discussions, online questionnaires and one-on-one interview.

Overall, 200 respondents from the Top/ middle segment and 150 respondents from the Lower segment participated in the survey. They include teachers, doctors, traders, artisans, researchers, media personnel, bankers and students drawn from the six geopolitical zones. A kaleidoscope of information was gathered at the end of the analysis.

Policy masked by information asymmetry
From the analysis, it was discovered that there is a very wide disparity between those who know what a cash-less economy is and those who do not between the two segments. When the different groups were asked if they know what a cash-less economy is, only 34.6 percent of the Lower segment said, yes, in the Top/middle segment, 91 percent said, yes.

If these responses are combined with responses to the question: “Will the cash-less economy policy make business easier for you?” One can reasonably conclude that the whole essence of the policy has not be effectively disseminated across the strata.

Fifty-two percent of the Top/middle segment said, yes, when they were asked if the policy will make business easier for them, 21 percent said, no, while 27 percent said “I don’t know”. Most respondents in the Top/middle segment know what a cash-less economy is, but don’t know if it will make the way they spend money remarkably easier.

It is said that if gold rusts, what will iron do? If 27 percent of the Top/middle segment of the society is ignorant of the effect the policy will have on their businesses, one need not look into a crystal ball to know that ignorance on this subject is still endemic. Those in the lower segment are the most ill-informed about how the policy will affect their businesses.

When they were asked if the policy will ease businesses for them, 55 percent in the Lower segment said, no, while the remaining 45 percent said, yes, I do not know or did not respond to the question at all. So, if the CBN fully implements the policy tomorrow, almost half of those in the Lower segment and a fraction of those in the Top/middle will take it with jaundiced view.

We therefore asked the respondents if they are ready for the policy, again we saw disparity among the groups. Those in the Top/middle segment were more affirmative than those in the Lower segment, 61.2 percent in the Top/middle segment said they are ready, while 38.8 percent said they are not. In the Lower segment, only 26.9 percent said they are ready. Amazingly, during one of the focus group discussions, a respondents in the Lower segment said she is not interested in a policy that will require her to collect cheques in return for her tomatoes!

It must be said that not all the findings of the survey, which was responded to by mostly individuals within the 25-50 years age bracket, were grey as the analysis confirmed a positive commonality in attitudes towards ATM usage between the two groups. Before now, research had pointed to decline in patronage of ATM machines, but as things stand currently, the figures on usage are growing across the segments.

Respondents were asked if they have ATM cards and use them. Most respondents said they do.  84.4 percent of those in the Top/middle segment said they have and use their ATM cards while only 2 percent said they don’t trust the technology. 8.1 percent said they have ATM cards but do not use.

For the Lower segment, 61.2 percent said they have ATM cards and use them. Only 10 percent said they don’t have and don’t want. This change in attitude may not be unconnected with the trend of improving security in the technology, its time saving capacity and the fact that there is more education on usage now. In the same vain, there is a warmer attitude towards online banking among the Top/middle segment. The lower segment is almost oblivious of what online banking is.

Finally, it was discovered that it is more likely for a Top/middle segment individuals to have more than one account (70 percent of those in this segment have at least three) than for a Low segment individual. Marketers looking to increase their clientele base should take heed: conveying messages of better customer centric packages and more “less-educated people’s” products can win those in the Lower segment to your banks.

Some more recommendations
Since the cash-less economy project will effect major changes in the way money is spent in Nigeria (the challenge is accentuated by the level of illiteracy), it will naturally take some time to gain general acceptance. Indeed, a change of this magnitude should be preceded by a more aggressive public enlightenment campaign.

Though there have been attempts to drive the message across, our research indicates that information has not really tickled down to the grass root. Even those at the Top/middle segment do not fully understand how the policy benefits them. The CBN and other stakeholders should invest in creatively bridging this information gap. In time past, government sold ideas using jingles in various languages and through different media; why has that not been done here?

Then again, there should be adequate time between now and when the policy will be fully operational in the pilot cities. This will allow retail outlets deploy necessary technology, teach their staff and customers. The thinking that power supply will disrupt the implementation of this policy is rebuffed by our findings. It is clear that the policy is in the right direction; however, acceptance by the generality will determine its success or failure.

NOTE: In this research, Top/middle segment refers to highly educated individuals who have a minimum of HND education. In most cases these individuals are acquainted with and use the internet. The lower class is made up of those with lower educational qualifications.

Welcome to China-town in Lagos

It is visible from the top of the Ojota Bridge in Lagos; its walls are redish and easily pass for those of an industrial estate. But on entry into the large compound, the sophisticated cars parked outside and the goods on display, give it away as a large shopping hub. This is China-town, the Nigerian version of the hundreds of “China-towns” scattered across the world.

Three things make China town, Lagos stand out. Firstly, it offers an assortment of quality goods made in China and similar climes. The variety of goods available in China town cuts across clothing (lace, casual and official outfits), weave-on of various nationalities, children toys, shoes, bags and decorative ornaments from across the world.

Secondly, in China town, price and quality are seriously correlated but ultimately, prices there are more competitive. According to a big shop owner, some traders come all the way from Idumota to buy from us for resale.  The thirds and most amazing part of the China town experience comes from listening to Asians speak impeccable Pidgin English. They bargain in naira, know that being an “Igebu man” means being stingy among Lagosians and that most Nigerians like cheaper commodities. Customers who are ready to pay premium get the best of quality which China has to offer.

In terms of the composition shoppers, it is common to see, Indians, Lebanese as well as Europeans in the often crowded parking lots. When they come they often do so as a whole family. Of course Nigerians make up the bulk of shoppers.

There are several China-towns across the world one of the largest is in America. According to Wikipedia, with an estimated population of 90 thousand to 100 thousand people, Manhattan’s Chinatown is also one of the oldest ethnic Chinese enclaves outside of Asia, with most of its residents now Mandarin, Min, or Cantonese-speaking and originating from various regions of China.

Nigeria does not have a monopoly of China towns in Africa. There are China towns in Ghana, South Africa, and most of the countries on the West African cost.

A nation and its pensioners

Four months ago, we were shocked by the biazzer drama that played out at the pension probe. When the dust settled, what came through was that we had been fleeced of billions of naira. As if that was not enough, just last week, retirees of the Nigeria Postal Services (NIPOST) shut down major post offices in Lagos and Benin City in protest of non-payment of 3 years pension arrears.
The NIPOST protesters, most of them septuagenarians, vowed to continue with the protest until it became evident that their entitlements would be paid. These are the realities of our day and if we do nothing, those who are gainfully employed today will repeat history in this bad light.

Nigeria has a population of 15 million people (almost equall to the number of people living in Lagos) within the 50-85 years age bracket, not to talk of the 13 million people between the 40-49 years age bracket who will be due for retirement in a few years. Given the structure of the population, there is a growing need to bring pension matters to the fore of national discuss. Dying on a queue, while waiting for entitlements, is not an honour to Nigeria. These recent events have engendered a lot of disillusionment in the pension system.

When BusinessDay conducted a research recently, we sought the opinion of respondents on whether or not they believe they will receive pension benefits at old age and strange enough 19 percent of them said ‘no’. This is alarming because most respondents were drawn from backgrounds that cut across the private and public sector. Surprisingly, they work in companies which employ well over the number required for companies to subscribe to a Pension Fund Administration (PFA).

But though we may have recorded real fraud in the system, not the whole of it embroiled in controversy. Because there are Nigerians who currently enjoy the retirement funds they set aside during their working years. Indeed, Nigeria has achieved some measure of improvement as the country moved away from the old Defined Basic to the Defined Contributory system, in 2004.

Six years after the adoption of the new Pension Act, total pension contribution has grown remarkably to N289.91 billion in 2010, from N60.41 billion in 2006. A 380 percent appreciation. In the same vein, the number of contributors has increased astronomically, today, it stands at 4,542,250. But it is worrisome that less than 12 percent of the working population is involved in pension contributions.

No doubt, the Pension Act has done a lot to sanities the way pension funds are administered in Nigeria. From directing investments to managing the way funds are eventually distributed to retirees, there has been a continuous effort at making the system better. But there are a lot of areas still open for fine-tuning, otherwise these protests by pensioners will not be.

That the system may be better

It is clear that there is a task for all if the pension system is to move forward. On the part of the regulator, there is need to address issues like none remittance of pension contributions by corporations. There is need to address the issues that cause none payment of pensions and gratuities to older citizens like the NIPOST retirees.

There is also need to open up other safe investment ports to PFA (some Pension Funds Administratiors (PFAs) have said the law is somewhat restrictive). Also we must ask why is it that the Act makes little or no provision for Nigerians living abroad who may want to contribute to the retirement scheme in Nigeria. The openness of PFAs as is currently enforced by PENCOM is commendable and it should be maintained.

On the part of contributors, there should be effort to make their employers remit contributions. There are cases where employee contributions are not remitted to PFAs when due. It remains the responsibility of the regulator to enforce the relevant sanctions of the pension Act on defaulting employers. It is the sole responsibility of PFAs to ensure that they use the funds of these Nigerians who go the extra mile to save, wisely.

On the part of government, those who steal pensioners’ funds should be punished. PENCOM says that companies are complying but it is often when they need to get something from government that some of them go the extra mile to meet all the provisions of the law. This should not be the case.

Vanguard, BusinessDay Reporters Win Citi Journalistic Award

Lagos (INVESTADVOCATE)- Rosemary Onuoha of Vanguard and Ejiroghene Lucky Obodo of BusinessDay have been named winners of the 2013 Citi Journalistic Excellence Awards competition in Nigeria.

This is contained in a Statement from Ogochukwu Sylvia Ekezie Vice President Public Affairs Officer - Nigeria & Ghana Citibank Nigeria Limited  and made available to InvestAdvocate in Lagos Nigeria.

According to the statement, Onuoha was selected as a winner for her article titled “How Safe Is Armed Forces Pension Under Military Pension Board?” which was published in Vanguard on March 26, 2012 and Obodo was also selected as a winner for his article entitled “Where Banks Fear To Tread” which was published in BusinessDay on November 26th, 2012.

The Statement affirmed that for the 2013 competition, Citi Nigeria received sixteen (16) entries from business reporters across various media outlets, including: BusinessDay, Champion, Daily Sun, InvestAdvocate, National Mirror, Nigerian Compass, Nigerian News Direct, Punch, ThisDay and Vanguard.

Ekezie, Vice President Public Affairs Officer - Nigeria & Ghana Citibank Nigeria said four (4) finalists were selected by a distinguished panel of judges which included Ndidi Nwuneli, Founder of LEAP Africa and Forbes Magazine’s 20 Youngest Power Women in Africa in 2011; Rob Folley, Economic Officer of US Consulate General, Lagos and veteran media personality, Soni Irabor, Managing Director of SDI/Ruyi Communications.

“The Citi Journalistic Excellence Awards sends winning journalists to an elite seminar at Columbia University in New York. The International Journalists Seminar is a special program sponsored by Citi and administered by Columbia’s Graduate School of Journalism. For more than thirty years, the program has served to improve the quality of business journalism in the developing world by exposing leading local journalists to the issues and people that drive the global economy” the statement affirmed.

According to Ekezie, this year selected journalists from Argentina, Belgium, Brazil, Cameroun, Columbia, Ecuador, France, Greece, Hong Kong, Kenya, Korea, Netherlands, Nigeria, Peru, Russia, South Africa, Spain, and Tunisia will get to meet with leaders of the business community, government, media and academia in New York. In previous years, former NY Federal Reserve President; William McDonough, former NY Federal President; Timothy Geithner and Ambassador Felix Rohatyn have spoken to the group, as have Columbia professors; R. Glenn Hubbard, Jagdish Bhagwati, Joseph Stiglitz and Jeffrey Sachs.

Also, winners of the Citi Journalistic Excellence Awards are expected to play significant roles in shaping their countries’ perceptions of the international business environment. Meeting with the eminent and thought-provoking speakers on the agenda should enhance their ability to interpret the global economy for their readers and viewers.

The future of soft drinks

Factors like perceived and actual health implications of content, and changes in our demographic structure will determine the most profitable soft drink businesses in the future. As Nigerian consumers becomes more concerned about their sugar intake (see chart 1), those producers who effect the right changes to their existing products, packaging and marketing models will have first mover’s advantage.
A kaleidoscope of patterns emerged when we researched into the expectations, changing tastes and preferences of consumers. One of the most striking is that the Nigerian consumer is becoming increasingly averse to ‘normal sugar variants’ of the soft drinks he has consumed for decades. There is a growing preference for low sugar variants (see chart 2).

Changing tastes in a changing world

Whether it is from the point of view of gender or age, there is the overwhelming shift to low sugar brands (see chart 3 and 4). In terms of age, as individuals grow older; there is this bias for less sugar. The younger generation (which makes up about 42% of the population) has higher preference for low sugar variants.

Unlike in the United States where women are more favourable to low sugar brands, than men. Our research shows that more men (88%) favour low sugar brands than their female (60%) counterparts in Nigeria. In more developed and knowledge driven societies, the desire to maintain a svelte figure drives women to watch their consumption pattern more closely. This trend is yet to take strong root in Nigeria.

Like Selling snow to Eskimos?

We discovered that there is a strong awareness of the existence of low sugar brands in urban centers but an endemic drought in such knowledge in rural areas (see chart 5). Over 70 percent of urban city dwellers (like Lagos, port Harcourt, Benin and Warri) are aware of low sugar brands while less than 40 percent of consumers in less urban places know about low sugar brands.

When we visited Badagry, near Lagos city, even some sellers were ignorant of NBC’s Coca-Cola light. But the consumers were enthusiastic about the prospect of a Cola drink with less sugar. Amazingly, men in such places believe that sugar has negative effect on libidinal levels.

We are of the opinion that selling low sugar is much easier than selling snow to Eskimos. The missing link lies in supply and availability. Clearly, the rural market is largely neglected (see chart 6)
Emerging opportunities

As things stand currently, while most low sugar brands are packages in plastic bottles and sell for between N100-N200/50cl (depending on the location), most Nigerians are more familiar with normal sugar varieties which are packaged in glass bottles and sold for between N50-N100/35 cl. Producers who will act outside the box are those who will seize the moment by repackage low sugar variants into regular glass bottles and hence meet the need of a growing sugar-phobic Nigeria.

Advertising will do a lot of good to skew the market in the direction of this set of producers. In particular, some malt producers have done so already. But jingles which advertise these new brands of low sugar malts and soft drinks as “that malt when get less sugar” or “that mineral when get less sugar” will do a great deal at sensitizing ‘the not so educated consumer’.

Again, is the question of what particular drink has a low sugar variety? Currently, only cola drinks and some malted drinks have low sugar variants. NBC’s Fanta and Sprite do not have low sugar variants neither do SevenUp Bottling Company’s Mountain Dew or Mirinda. The evolution of the market may make it inevitable to produce low sugar variants of these brands in the future.

A few years ago, the United State’s Center for Disease Control linked “excessive intake of sugar drinks to poor diet quality, weight gain, obesity, and, in adults, type 2 diabetes”. Also, Term Life Insurance, an American insurance company published a report which highlighted the harmful effects of excess soda on various parts of the body these concerns will inevitably affect production and consumption in the future.

The identification of a gap in the market is the first inkling of an opportunity. It must not be mistaken that since respondents are willing to pay more for low sugar brands (see chart 7), then it makes business sense to maintain the status quo, the soft drink makers must satisfy changing tastes.

Listen to the king

The customer is referred to as king, so the research process gave room for consumers to bare their minds through an opened question. It must be pointed out that it is difficult to classify all responses to an open-ended question in a research that involved over 1050 respondents. Some of their answers to the question ‘Do you have any advice for the producers’ are below:

• As a health fanatic and fitness freak, I really don’t like carbonated drinks, mostly for their sugar content. But if it is possible to manufacture one with little or no sugar, I’d be grateful. Have you considered using sucrose? It is easily broken down by the body.

• We need to ensure the products are truly low sugar because consumers are often deceived with much noise about product content, what does low sugar mean really? Please tell us the level of sugar in the normal brand and the sugar in the so called low sugar brand.

• Ensure that these products contain what they claim

• Quality control should be taken seriously as particles are sometimes found in soft drinks

• If the drink is tagged low sugar then let them maintain it

• We want natural flavoured drinks with low sugar content and affordable prices

• Both high and low sugar should be produced so that people can enjoy both whenever they like

• Low sugar and normal sugar should be the same price. Coke had low sugar but it dried up in my area, we don’t see it anymore

• Please help me talk to the producers of soft drinks to produce more of low sugar because of my children, their teeth

• Too much sugar leads to hyperglycemia while low sugar in the body leads to hypoglycemia so the producers should come up with products that are with less sugar content

• They should be real when they say its low sugar it should be low sugar. If possible there should be none-sugar

• I prefer carbonated drinks that bubble in the mouth

• Increase the sugar contents in all the drinks

• Sugar is dangerous for adults above 30

• I m indifferent about sugar contents but most adults care, so produce low sugar

• Producers of low sugar versions should make versions of low sugar less expensive
Methodology

We sampled respondents which cut across Nigeria’s demographic stata and asked them questions which bother on the genre of soft drinks they preferred. Questionnaires were distributed via survey sites as well as on a face to face basis. Respondents were drawn from cities including Lagos, Porth-Harcout, Warri, Benin, Onitsha, Yola, Ibadan and Abuja. Rural dwellers were also sampled. Analysis was done using two statistical packages, SPSS and Microsoft Excel for Windows.

Blackberry, HP rule gadget market, BusinessDay Research Report

A report released by BusinessDay’s Research and Intelligence Unit (BRIU) indicates that social media platforms, e-mail service providing sites and local newspaper sites are the most patronised across Nigeria.

The report which goes further to detail the degree of usage of different online media platforms, revealed that more than three quarter of Nigerians who use the internet, visit facebook, 65% use the yahoo mail platform, 57% use Google or Gmail, while 44% visit newspaper sites on their phones regularly.

According to the report which also contains a nationwide survey, “Nigeria now has about 56 million internet users, most of whom have 24 hour internet access on their mobile phones. But offices remain major sources of internet access.

Other findings in the 42 page report which will be partially published in BuisnessDay , are that the HP brand dominates the market for desktop and laptop computers, ahead of Dell, Mac and Acer.

In the tablet market; Samsung is the most popular brand ahead of ipads, while Blackberry smart phones account for more than 50% of phones being used to access the internet by respondents. As of December 2011, information from senior personnel in the GSM industry showed that  as early as 2010 there over 2.4 million Blackberry devices on Nigeria’s four GSM networks MTN, Globacom, Airtel and Etisalat, and that the numbers were growing at the rate of about 30 percent per annum. From then till date, the number of Blackberry devices in circulation has continued to increase. The success of the brand is largely attributed to the prestige it bestows and additional features which it offers.

These features, including pinging,  have endeared the brand to many users since they allow communication at almost zero cost. But some Android phones have also incorporated some of these services and on the back of this, have gained significant market share.

Nokia, Samsung and Sony Ericson are used by a distant 24%, 19% and 2% respectively.

On opportunities open for further expansion, the report says, “we believe that the market from access bundles which are tailored for multiple users at home, presents an exciting opportunity for Internet Service Providers, which can still take advantage of the market of internet users who are not satisfied with the amount and quality of access they get at work.”

The report has recommendations for advert agencies, Internet Service Providers and other institutions which are interested in the way Nigerians use online media. It is available on request.

Slow down, Seme border ahead

The remodelling work being done by JDP Construction, the level of human and vehicular traffic and the volume of commodities moving through the Seme border is a spectacle. On a normal day, commodities worth several millions of Naira go in and out of Nigeria through the place.
Data from the Nigerian Customs Authority shows that government received an average of N22 million daily from Seme Border between January and October 2012. If on average, duty collected on each consignment was 5 percent of value (which of course is impossible since duties are often above 5%), then merchandise valued at more than N440 million must have passed through the Seme Border daily between January and October 2012. This is apart from those unaccounted for.
For a country which has over six ports operating at different capacities, why would Nigerians choose to bring things in through Benin? In response, some importers say the cost and speed of clearance is different, in favour of Benin Republic.
A cocktail of transfers
Like most international borders, a striking feature of the border is the huge, often overloaded, 18 wheeler trucks, which pull into Nigeria from Benin Republic. They not only tell of the massive importation activities of an import-dependent country but give an inkling to what Nigerians can profitably produce domestically.
The trucks bring in food items like fish and other frozen foods; light and heavy machinery like cars, trucks and other manufacturing equipments and production equipments; and products like footwear and domestic items. Given the necessary condition, most of Nigeria’s imports can be produced locally, especially food items.
Some of the rice which comes into Nigeria through Seme is from Thailand. Thailand has a population of 67 million; in terms of land surface it covers 514 thousand square kilometres, of which 0.4% is wet lands. On the other hand, Nigeria has over 166 million people, 924 thousand square kilometres of land surface of which 1.4% is wet land.
Clearly, in the case of rice, Nigeria has comparative advantage in production but production (cultivation and processing) is concentrated in the hands of local farmers not institutional producers; which is the problem. We need institutional investors in rice production. This is a business opportunity. This scenario is similar with other commodities Nigeria imports.
According to the Central Bank, “analysis of Forex utilisation by sectors revealed that US$6.47 billion or 66.72 percent of Nigeria’s Forex was spent on the importation of oil, industrial equipments, food and manufactured products in the third quarter of 2012. Food and manufactured products accounted for 19% and 16% percent of the total amount utilised.
The gladdening aspect
From the Nigerian side of the border, a sizable amount of commodities flow into the West African sub-region. Indeed, there are opportunities to export a variety of consumables for sale.
Every day, Nigerians exports consumables like soft drinks and wines, bread, plastic materials, vegetable oil and in some cases, raw leather through Seme Border. Once a trader or manufacturer is attuned with the procedure, business across the border becomes fluid. Possibilities of expansion exist for new entrants in the inter-border trade.
A tale of two countries
While Seme is a hub of activity, there is a draught of government assistance for the communities surrounding it. In the midst of the economic activities which they host, communities on the Seme border, which is Nigeria’s most lucrative land border, say they are neglected by government.
There are signs to prove this. For instance, the location of the Seme Border which is home to over seven banks, government agencies and an indigenous community has been without electricity for over two years.
Residents say, electric supply was distrusted when a truck ran into electric poles which supply them electricity. However the situation is different on the other side of the border as communities and businesses in that axis have power supplied to them by the Benin Republic government.
In the last two years, Nigerian banks operating in the Benin axis of the border have enjoyed electricity from the government of Benin Republic while their branches on the Nigerian side run generators. Major banks operating there include First Bank, Union Bank, Zenith Bank and Diamond Bank.
“Our government does not behave as if we are part of Nigeria; we see daily the amount of money custom officers and other government operatives collect from this border which is our ancestral home, while we do not even have good roads or government schools for our children,” says Abiola Ogundipe, a trader who runs a small eatery at the border.
A commercial bus driver who pleaded anonymity said “in those days it used to take 40-45 minutes to travel from Mile 2, in Lagos, to Seme Border. But these days it takes between 3-4 hours or more to do so.”
Between Mile 2 and Seme, there is no single kilometre of road which does not have several potholes or weeds encroaching into it; in some cases, the road is so bad that motorist have to cross to the other lane to continue their journey. The result has been an increase in cost of transportation and vehicular damage.
It costs twice to travel per kilometre in Nigeria than in Benin Republic. The Beninoise tolled their roads which lead to the border with Nigeria. So while a Nigerian travelling to Benin Republic will pay for use of their roads, his counterparts travelling into Lagos does not pay for using Nigerian roads.

Read, download, share

The World Bank has opened its database for public use, the benefits are unquantifiable

Seated on his magnificent chair at the University of Benin, Professor Izua Obaze logs on to a website and delightfully smiles as the figures which he would have had to comb several sources to assemble are displayed in beautiful graphs and downloadable spreadsheets.

The ease with which the professor navigates the site gives the impression that he is not a first timer. On it, he is able to access data and content that helps him compare countries’ performances along indicators, analyze the effect of specific policies, and teach his students. This kind of access is what the World Bank’s data base website is giving researchers, academics and policy maker around the world.

Last year, the Bank announced that it is adopting an open access policy that requires its research and knowledge products and the associated datasets that underpin them to be deposited in an open access repository and that these works be released under a Creative Commons license. A Creative Commons license allows the distribution and free use of copyrighted works as long as the Bank is acknowledged.

Within the same period, the Bank launched a new version of its data query system, DataBank, thereby offering users a platform to create custom reports with tables, charts, or maps. These live reports can then be saved, shared between users, and embedded as widgets on websites or blogs. As a stup to further its openness, there were steps to make data base multilingual. It now offers a multilingual interface across the different databases and fully-translated data from the World Development Indicators.

The journey to really open up its content really began in the fall of 2009, when Robert Zoellick, former World Bank President gave a speech at Georgetown University in which he advocated for an environment of more openness at the World Bank.

According to Zoellick, “Knowledge is power…making our knowledge widely and readily available will empower others to come up with solutions to the world’s toughest problems. Our new Open Access policy is the natural evolution for a World Bank that is opening up more and more.” Indeed, this level of openness has made a huge impact already.

“It’s a miracle” Professor Izua says, a few years ago; it was a herculean task to get updated data for even countries as popular as Nigeria, not to talk of less popular countries”. We had to wait till the end of each year before getting new data” he added.

But the professor is not alone. In the past two years, the site has attracted some 19 million visits, with an average of 740,000 visits monthly. About 1.7 million file downloads have been recorded while the number of abstracts viewed is 1.5 million in the past year.

In July 2013 alone, there were 187,821 file downloads while 102,805 abstracts were viewed. In the first two weeks of this month, 66,722 data files have been downloaded while 45,251 abstracts have already been seen. But the beauty of what has happened does not only lies in the number of those that have used the site but on their locations.

Though the United States, dominates usage, countries like Vietnam, Rwanda, Afghanistan and Somalia have recorded a fair share of downloads. The United States accounts for 39% of all views and downloads over time, while Vietnam accounts for 6%, the second highest for any country in the world.

In Africa, Nigeria and South-Africa have the highest number of views and downloads; accounting for 1% of views and downloads respectively. Both countries are ahead of The Netherlands, Japan, Switzerland and a number of other countries in European.

The picture is clearer when the absolute numbers are considered. South Africa has recorded 32,150 views and downloads while Nigeria recorded 30,911 download. Other African countries recorded interesting number of views and downloads as well. Ethiopia, Egypt and Ghana have had 27 thousand, 14 thousand and 15 thousand downloads or abstract views respectively.  Rwanda recorded four thousand.

Whether in Europe, Africa or America, the primary driver of visits to the site has always been what it offers says Gloria Valencia, a reporter with SEMANA Magazine, Colombia. According to Gloria, “the World Bank provides good amount of information and updates; I frequently use their information for my job”.

“Using data provided by the World Bank has proven pivotal for my journalistic research. The amount of information, the validity and the ease of access have made the World Bank and its services a vital tool in my professional endeavors says Dimitris Pefanis, Financial Journalist, with Ta Nea Newspaper, Greece.

Of all the data available, the full dataset of World Development Indicators, in English and in Excel format, is the most popular download. Most users look for data on China, the United States, India, Mexico, Brazil, Argentina, Colombia, Indonesia and Nigeria.

Basically, the data repository has annual reports and independent evaluations; books; journals; serial publications; working papers and economic; sector work studies and raw data. It has over 8,000 time series indicators, 850 data-sets on government finances, data on over 11,000 Activities in Projects & Operations and 700 Surveys in Microdata. All of which can be accessed easily.

But it is not only professors, data journalists and policy makers that the project has affected. There have been moves to include those who would traditionally not use the material. According to Caroline Anstey, World Bank Managing Director, “Anyone with Internet access will have much greater access to the World Bank’s knowledge. And for those without internet access, there is now unlimited potential for intermediaries to reuse and repurpose content for new languages, platforms and media, further democratizing development by getting information into the hands of all those who may benefit from it.”

In the East Asia Pacific, workshops are being held to encourage more people to use data, research and information, provided by the Bank to tackle development challenges.

For the time being, the most popular indicators are GDP and its derivatives, other macroeconomic statistics such as foreign direct investment (FDI), imports and exports, measures of poverty and inequality (like Gini), and key social indicators such as life expectancy and population estimates.

Greater access to data and information is empowering people around the world. “The World Bank’s data leads policy makers to carry out panel data analysis which informs better national policies. In a nutshell, better informed decisions improves lives says Ikechukwu Kelekume, a lecturer at the Pan African University, Lagos. “But the bank has to do more since some data points are missing for some countries, it helps to have complete information all the time” he added when asked about what the bank can do to improve its offering.

Professor Izua says “ this is an asset which if the World Bank funds a hospital, it benefits mainly those in that locality but with this data initiative everyone around the world benefits while it also gives us the right insights to even determine where particular humanitarian projects should be sited”.

This is confirmed by Iryna Kuchma, Open Access Program Manager for EIFL, “the sharing of new knowledge can be vital – even life saving”. Kuchma pointed out the example of Malawi where promising research results related to AIDS in one hospital were not shared with colleagues in another. “With Open Access, this kind of thing wouldn’t happen,” she says.

Where banks fear to tread

That the Nigerian economy is among the fastest growing economies in the world is not in doubt. OBODO EJIRO writes that in the midst of this growth, high interest rates and bank apathy to lending have made credit to small businesses lean

The squeaking sound of manual sewing machines and the hum of generators can be heard as you approach the place. 

Though there is no crowd outside, when you step in, you are greeted by a fully functional and tightly packed factory. Its major product offering is clothes. There are over fifty separate businesses, all under one roof, that make various types of male, female and children clothes, singlets and lingerie in this factory located in Lagos, Nigeria’s commercial capital. In terms of employment, well over three hundred adults work in the place.

For the small businesses which operate in the factory, desired scale of operation differs, most of them want to expand their businesses and establish new branches but lack of finance, high lending rates and lack of financial advisory services constrain them to the small cubicles they operate.

According to Mrs. Regina Udeh, who specializes in making children cloths, “I opened an account with a microfinance bank four years ago and constantly deposited small amounts with them, when eventually I needed their help, they turned me down.

I was to go for an exhibition in Accra, Ghana and approached the bank for an overdraft of less than fifty thousand Naira ($333)”. She ended her narrative by saying “I closed the account a few days later”. This is a common experience for Small and Medium Scale Enterprises (SMEs) in Nigeria.

Though some banks have maintained that lack of proper record keeping and viability of business models is responsible for low lending to (SMEs), most SMEs operators have said these excuses are not tenable.

In the case of the businesses in the Lagos factory, the level of patronage, quality of designs and acceptance of what they produce makes them a good bet any day. And the clothes makers in that place know the value of what they produce.

“The clothes we make here are sold at different markets alongside those imported from China” says Chief O.J. Chukwu, a chief task force officer at the factory; I went to Cotonu, Benin Republic, to sell some of my wares recently. To further clarify his point he added, “Our products go to different countries on the West African coast, in some cases; we even export to countries in Southern Africa.

You can see some students from the University of Lagos work among us; they know that there are few already-made jobs in the labour market, so they are learning to do this business while they continue with their education so that they can have something to fall back on after they graduate.

It is sad that poor lending to SMEs is pervasive across Nigeria as the case is not different in Aba, one of the manufacturing hubs of eastern Nigeria. Home to all types of footwear manufacturing businesses, textile and bead-ornament makers, Aba’s small manufacturers are starved of capital just like anywhere in the country. According to local businessmen, “most of the capital used to establish and sustain businesses in Aba is either from personal savings, loans from unregistered lenders or relatives”.

Indeed, most Nigerian banks have built arm chair banking models around lending to big businesses which major in oil deals, importation of goods and stock brokerage transactions. The banks are also addicted to lending to government at rates which sometimes exceed 11 percent. The implication of which is that when they have to give loans to SMEs interest is as high as 20-25 percent. The consequences have been very negative, according to Mr. Matthew Obeh, a big shoe manufacturer who supplies his wears to Northern Nigerian communities, “there are cases when businesses have had to be closed down because the owners had minor cash flow problems”.

But small manufacturers have the capacity to grow the economy and employ many. SMEs have done this in Europe and America. The long term benefit for banks is that when the small businesses become major players, they will be loyal to banks which stood by them in their formative years.

In other climes like Australian, South Korea, China, USA, and Switzerland, SMEs are encouraged in several ways; including through funding by banks. This has helped them grow. Recently, the OECD reported that SMEs contributed 45 percent and 79 percent employment in the manufacturing sector in Australia and Switzerland respectively. In India, SMEs account for about 40 percent of industrial output and 35 percent of export.

Germany and Britain have over 8,000 medium-sized enterprises, which employ close to 41 people each. In France, there are close to 4,000 medium-size enterprises which employ 14 employees on average. These concerns receive incentives from banks in the form of finance and advisory services which help them grow. Those services are luxuries in Nigeria.

Though, the Central Bank of Nigeria (CBN) has continued to say that the private sector and small businesses should be the focus of lending, there is little evidence that it will change the situation. The apex bank has continuously acted in a way that suggests that factors that could change the situation are not in its purview. The Bank has continuously emphasized that the prospect for lower lending rates is low since Nigeria’s baseline inflation and cost of production has remained high.

Baseline inflation has hovered between 10.5 and 12 percent for almost a decade and CBN has kept its Monetary Policy Rate (the rate at which it lends to commercial banks, which in turn determines the rate at which commercial banks lend) at between 9.25percent and 12percent for almost two years.

The CBN believes that, a drop in MPR could spike lending which will in turn increase money in circulation and thus fuel inflation; a situation which the economy is not suited to handle. The general thought is that since the Nigerian economy is constrained by electric supply problem, it is not prepared for a sporadic increase in demand occasioned by a rise in the volume of money in the economy. In essence, the production machinery cannot cope with a sporadic increase in demand.
 

The CBN has consistently maintained that if the price level drops (that is when electricity becomes stable and manufacturers can produce at cheaper rates), then inflation and lending rates would also drop. This promise has lingered for almost a decade, so, the general climate among SMEs is that of an endless struggle for funds for survival.

But if banks are really interested in developing small businesses, they can devise ways to improve financial access. Banks have been accused of lending at discretionary rates to big businesses. Since it is cheaper to make money off government, oil companies and stockbrokers, banks tend to shy away from simple moves that could help smaller businesses.

Government’s unfinished business As you go around the clothes factory in Lagos, you notice that a section is devoted to generators. It is clear that the statistics released by electric power authorities still mean nothing to these manufacturers, as each of them has at least one generator which supplies electricity.

Indeed, basic infrastructure should be available from government to SMEs. The unavailability of infrastructure has made the love between SMEs and government cold.

Except for financial institutions which can boost their businesses, the small manufacturers are not interested in government; they provide everything to ensure their own success. That is why they were not eager to have the name of their factory splashed on newspapers. “We are content with the progress and contribution we are making to the economy, we do not want to be levied out of business by government all we want is financial help to scale up our operations” the small producers say in unison.