₦airaland Forum

Reuters) - Bomb blasts, gun attacks, airline crashes, kidnappings, industrial-scale oil theft, armed robberies and fraud costing billions of dollars.

Such things might give pause to anyone thinking of opening a business. In Nigeria, they happen with alarming frequency, and yet investors just keep coming.

Now The reasons are many: alluring returns in this high-risk frontier market; a huge and growing population with latent potential for a consumer boom; light crude oil ideal for making motor fuel; and sophisticated financial markets.

"We know it's not risk free," says Charles Robertson, global Chief Economist at Renaissance Capital. "But look around the world and find another economy with 160 million people growing at 7 percent with such potential. It's a struggle to find them."

Nigeria can look like it's teetering on the cusp of chaos, but it is also Africa's second biggest economy and top oil producer.

"Nigeria is the best kept secret in the world. Anybody who doesn't invest in Nigeria only has himself to blame, going forward, if he misses out," industrialist Aliko Dangote told Reuters in an interview at his Lagos office.

"I don't really know of any place where you can make as much money as you make in Nigeria."

As Africa's richest man, he should know. Last year, the cement tycoon's Nigeria investments boosted his personal fortune more than fivefold - a bigger rise than anyone else on the Forbes list of world billionaires - to $13.8 billion.

Dangote is from northern Nigeria, where Islamist insurgents of the Boko Haram movement have killed hundreds in daily gun and bomb attacks this year in a bloody anti-establishment offensive.

Dangote, whose interests are mostly in the south, with some exposure to the north, does not let the violence affect his business decisions.

"Boko Haram have not destroyed any business here. They have not gone to any factory and planted a bomb," he said.

"Because of drugs barons fighting with the Mexican government, does it mean no one will go and invest in Mexico? No. People are rushing there."

"DEMOGRAPHIC DIVIDEND" TRUMPS INSTABILITY?

Still, if you want an example of how violence and political instability in Nigeria can slice millions of dollars off your profit margin, look no further than PZ Cussons (PZC.L).

The soap maker announced two profit warnings in the first quarter of this year, blaming a hit to sales from social unrest in Nigeria, its biggest market, where it makes a third of its revenue.

The country erupted into strikes and protests in January when President Goodluck Jonathan's government made an abortive attempt to end a popular fuel subsidy. The strikes lasted only a week, but the central bank said they cost $617 million (393 million pounds) a day.

The violence in the north also worsened around that time.

"Insurgency in the north clearly had a detrimental impact on PZ's business, and on (food maker) UACN (UACN.LG), which has distribution hubs there," Matthew Pearson, Standard Bank's head of African Equity Product, told Reuters on a visit to Lagos.

But in the longer term, both firms are betting Nigeria's big population will turn into a massive consumer market.

"The demographic dividend is colossal," Pearson said.

A failure to recognise such long-term opportunities in emerging markets astounds Stephen Jennings, CEO of investment bank Renaissance Group.

"Whether we are talking about political evolution in Russia, or economic development in Africa, there remains a clear overemphasis on current difficulties and constraints, and an under-appreciation of the pace and magnitude of modernisation and structural change," he told an investor conference this week.

Some clearly appreciate it. The CEO of South Africa's Shoprite (SHPJ.J), Whitey Basson, said in February he saw scope for 700 stores in Nigeria, up from two now, arguing that even if 60 percent live in poverty, the other 40 percent still outnumber South Africans.

And oil companies like Shell (RDSa.L) are making enormous profits in Nigeria - and renewing onshore licences - despite the fact that armed gangs steal a growing portion of their oil.

Foreign direct investment into Nigeria has hovered between $6 billion and $8.5 billion since 2007, World Bank figures show, apparently unresponsive to its various crises.

FEAR OF OFFICIALDOM

Business people say the risk from such insecurity pales compared with that of government interference.

Jonathan's administration says it is working to remove impediments such as corrupt officials and onerous bureaucracy, but they admit it is a huge task.

"Look at the port. That's a bigger investor concern than bomb blasts or plane crashes," said Tony Elumelu, chairman of Lagos-based Heirs Holdings, a fund that invests across Africa.

Corrupt officials at Lagos port - one of the busiest in Africa - slow down deliveries to extort money from importers, a bottleneck to growth and cause of Nigeria's high living costs.

"For many businesses, the difficulty of getting goods cleared ... is their biggest complaint," Elumelu said. "The good news is the government is now taking action to improve it."

Such "official risk" is what oligarchs like Dangote can use political ties to mitigate. Not everyone has such connections, but players with dominant positions in markets that don't require much government cooperation can still fare well.

"If you look at Nigeria Breweries (NB.LG), short of expropriation, it's going to continue to effectively print money, because of the size of the market ... irrespective of the management of the country," said Fola Fagbule, Vice President of Origination and Coverage at Africa Finance Corporation.

Other sectors, such as infrastructure, face daunting hurdles from obstructive officials. Telecoms firms need licences. They need land to put up masts. They need permits to set up base stations.

All complain of extortion by officials to keep stations open.

The downside was enough to persuade Vodacom (VODJ.J) to pass up investing in Vmobil - now owned by Bharti Airtel (BRTI.NS) - in 2005, citing an "inappropriate level of risk".

Yet telecoms is now one Nigeria's most profitable sectors, and Nigeria is Bharti's most profitable African market.

In his last year as Vodacom CEO in 2008, Alan Knott-Craig said he regretted the decision not to set up shop in Nigeria. Vodacom is now making moves to come back.

Rival MTN (MTNJ.J) had no such qualms, and today it is Nigeria's leading operator.

Among the risks it faces are "poor infrastructure, lack of security, vandalism, multiple taxation, over-regulation ... unlawful interference with telco infrastructure by government agencies and ... prejudicial court judgments," says Funmilayo Omogbenigun, MTN Nigeria's corporate affairs manager.

Despite that discouraging litany, Nigeria remains MTN's biggest cash cow, making $2.5 billion in core profit in 2010 and again in 2011.

The telecoms success has raised hopes for Nigeria's moribund power sector, if the government gets round to privatising it.

"Nigeria's often surprised on the upside, and telecoms is a classic example. People are looking at power in the same way," Fagbule said.

"It looks messy, it looks difficult, but if you sit on the sidelines and it turns out to be this massive honeypot, you'll live to regret it."

http://uk.reuters.com/article/2012/07/02/uk-nigeria-risks-idUKLNE86101Z20120702

The Lagos State House of Assembly on Monday directed the state Commissioner for Finance to stop further payments in respect of Joint Account Allocation Committee (JAAC), except the payment of salaries of members of staff.

The decision was taken at a plenary session, sequel to a motion moved by the Leader of the House, Ajibayo Adeyeye, following non-compliance with the provisions of the Lagos State Joint Account Allocation Committee Law, 2003.

According to Adeyeye, Section 162 ( of the 1999 Constitution of the Federal Republic of Nigeria, as amended, states that the amount to the credit of Local Government Councils of a state shall be distributed among Local Government Councils of the state in terms, in such manner as may be prescribed by the House of Assembly of the state.

He said: "Section 4(b) of the Lagos State Joint Account Allocation Committee (JAAC) Law, 2003, states that the Committee shall consider the resolutions of the House of Assembly in respect of the allocation formula for the account".

He added that Section 9 of the same law stipulates that “not later than 30th June of a subsequent year, the Accountant-General shall submit to the House of Assembly of the state a report in respect of payments made to each Local Government Council in the state for the preceding year ending 31st December”.

Adeyeye observed that the modalities for the distribution of funds to local government councils were not streamlined with the constitutional provisions and extant laws of the state.

The House in its resolution, however, resolved to call on the Accountant-General of the state to furnish it with the reports in respect of payments made to each Local Government Council in the state from year 2009 till date, in compliance with Section 9 of JAAC Law 2003.

The Speaker of the House, Mr Adeyemi Ikuforiji, informed the house of a petition he received from a group alleging several illegalities of the local government council chairman in the state.

Ikuforiji, however, set up an eight-man ad hoc committee to work on the motion and the petition.

The Committee has one week to submit its report.

Members of the committee include the Chief Whip of the House, Rasaq Balogun; Deputy Whip, Rotimi Abiru; Saka Fafunmi; Moshood Oshun; Mudashiru Obasa; Adebimpe Akinsola; Ramota Akinola-Hassan; and Adeyeye as its chairman.

http://www.businessdayonline.com/NG/index.php/news/111-politics/40529-lagos-assembly-stops-payments-to-lgs

The periodic Presidential Media Chat is a worthy idea that precedes President Goodluck Jonathan. It is a live television interview show in which senior journalists take on the President on diverse and usually current issues affecting the nation. It provides a great opportunity for the number one citizen to face the people, talk to them and with them. It is a perfect platform to show the people other vistas of the administration and insights only the President can provide. It is such snippets that often lift the people and imbue them with fresh belief that indeed, someone is truly looking after their collective affairs.

Unfortunately, this elevated public relations tradition may have become President Jonathan’s albatross. On the few occasions it has been held in the last one year, it has always ended on a sour note, with the President making a meal of it each time. When it is not his elocution and body language, it is his lack of a good grasp of the core issues. When he is not making a rankling statement that jars the sensibilities of the populace, it is simply that he lacks presidential gravitas.

The last chat held last Sunday however takes the cake. Apparently arranged hurriedly upon the President’s return from his ill-advised trip to Brazil, and designed to assuage the frayed nerves of the critical populace who berated the President for jetting off to Brazil when Nigeria burned and death and destruction were pervasive. But the remedy seemed to bring more trouble as the chat came just short of being a debacle. The President came a cropper on nearly all the questions thrown at him, to the point of incoherence on a particular question about assets declaration.

The President fielded nearly a dozen questions on issues ranging from the trip to Brazil, the sacking of his security adviser, dialogue with Boko Haram, sacking of former anti-corruption chief, Mrs Farida Waziri, the renaming of the University of Lagos, the Femi Otedola\Farouk Lawan saga, 2015 election and his assets declaration issue, among others. While President Jonathan’s outing showed miniscule improvements in his elocution and carriage in this chat, he was stumped by what may be described as his credibility quotient which has declined drastically since last January petrol subsidy protests. Thus, hardly any answer the President proffered on these issues seemed to cut the ice with the people.

For instance, shuttling off to Brazil when churches were being bombed in the North, bodies of innocent Nigerians still littered the place and a wave of reprisals that could bring a tragic deluge upon the nation seemed to loom, can never be justified. While the President reasoned that shelving the trip would signify victory for the terrorists, Nigerians say that it would portray the President as compassionate, responsible and responsive. In fact, it would show him as being appreciative of the magnitude of the problem.

It is the same refrain that runs through all the other issues raised. However, it is in the matter of public declaration of assets that we witnessed what may be described as the ultimate presidential faux pas. The President had been asked why he would not make his assets declaration public. An innocuous question; a harmless and legitimate question that could have been nicely and quietly dismissed were the President a man with a gift of the gab and were he not already unduly irritated and belligerent. The President simply unravelled over this question and lapsed into a detailed rambling that left him exhaustively diminished and vulnerable. The sum of his answer being that since he is not under any constitutional obligation to make a public show of his assets, if the people talked about it from “morning till night” or from here to “heaven”, he would not be moved an inch to let them into his world. He even suggested that it is against his principle to show such level of transparency and in fact, his former boss, the late President Umaru Yar’Adua, compelled him to do so when he was vice-president.

This episode has brought us to one chilling realisation that we have a President whose much vaunted fight against corruption is only skin deep, who would not lead by example and who is not capable of deploying the awesome force of moral rectitude to lead his people. Plain dealing, unimpeachable moral high ground and crystal clear transparency are the qualities high leadership is anchored upon. We wish to caution that no army, no quantum of resources can make a leader succeed whose people cannot trust.

While we urge that the Presidential Chat be sustained, we advise the President and his handlers to make a duty of it by preparing hard and well for the show. On a final note, if the people earnestly want President Jonathan to make his assets public, he should go beyond that by making all his aides follow suit. This is especially so, because the gesture is unlikely to bring him any harm. On the other hand, it will do him and his administration a world of good.


http://www.thenationonlineng.net/2011/index.php/editorial/52233-presidential-faux-pas.html

media chat get levels - some can be comparable to Obama or Cameron like enagements or comparable to Basketmouth comedy .

People like Beaf and co like to give themselves mental masturbation that gej is the best thing to happen to Nigeria. Nigerian will surely be doomed when the last of good men keep silence.

No comment

It is so sad - Very primitive way of building - The structure is very unpleasant to eyes - is the building even straight?

You people will soon allow Nigeria give you high blood pressure As for me and my household any news coming out Nigeria is classied as comedy.

Beaf: We are now used to the usual id!ots manufacturing "delegates" each time GEJ travels.
The desperation of election losers and pathetic mud-munchers in Nigeria is really scary.

Mr Beaf - abeg post that your famous Saharareport picture " the one with man with talking drum replicated twice " lol

Hopefully them take along special assistance for cleaning sh1t yan5h

Abeg please NLanders no wound me abeg - Man with no shoes mut now behave like man wey fit buy many shoes - were you expecting anything otherwise

It is all part of the GEJ corruption empire to find a way of halting the necessary. It is high time Nigerians wake up and agree that GEJ is so compromised and would only protect the interests of corrupt elites. Can you imagine a plaintiff denying their own case - never heard that one before except in Nigeria , where is the due dilligence from the government said if they have nothing to hide.

werepeLeri: Why do people limit their hatred for GEJ to the internet? If they are no hypocrites, why dont they extend their hatred to killing him instead? I just wonder - if you hate GEJ so much and you limit your rants to the internet - then you are a damn looser - people who hate and hate real good dont rant on the internet, they take action.

Hate is too strong a word, I wonder why opposition to incompetency is now classed as hate.

Gej says he knows the sponsors of BK - the question is wtF HAS he done - do you not think he is compromised , can you imagine an Obama or Cameron saying they know the sponsors of al qeida and yet the killings continue from the little evidence we have clearly confirm that pdp is boko haram hence we might be able to conclude that GEJ has a signed a pact with devil

A man who said we should learn to live with bombings, so why are you surprised he went to Brazil. Obama cut short a similar trip cause of a hurricane disaster in Texas. That is a real president

Pro Gej vs Anti gej. Wey my popcorn

I am in total support of BA are. The leadership selection process in nja is morally bankrupt

Gej is totally compromised , anyone expecting any positive news should get their head checked

una no dey tire - stuff fluffing - all these Yoruba people sef

It is not Nigeria - Another mumu presido will come and seize the land for the next mumu first lady - wetin concern Nigerians - let dogs continue to eat dogs

what a dumb thread

bull sh1t meeting

If i was Nigerian criminal - I would always be rest assured that anytime this President utters the statement " we will deal with whoever is culpable " I am gurantted nothing will happen.

What a joke setup.

Had the same dilemna a year ago. Check out my thread

https://www.nairaland.com/766004/recommend-suv-nigerian-road

PDP must drink blood - I thought Government awarded the same road contract to Babalakin and part of the deal was to provide petrol tankers parking space rather than them parking on the motorway .

I repeat is it not shame on the part of GEJ - 1 hour speech and the only thing that stuck is University name change - was it ploy to masquerade incompetency .

Akanbi_edu: My mistake. That was not meant for you. I am sorry.

corrected.

Accepted - Thanks

Akanbi_edu: A scum like you needs to be shot before you lead many into their untimely death.

I can only laugh - will dismiss the above rant as that from a malnourished child.

It is also a sad day for the Nigerian democracy - if the only thing that stuck out of 1 hour presidential speech is " University name change " - Is that how democracy is celebrated.

Propaganda from the pit of hell. Thank God for other sources of credible news. This morning a representative of unilag students was on channels tv and he was repeatedly asked the question " Who organised or instigated the protests “ He replied nothing to do with any third party or the student union - it was merely a case of individuals deciding that they weren’t going to accept the name change forced upon the university without the appropriate consultations or due process.

Anyway the name change at this point in time is still a mere“ STATEMENT “ it needs to be ratified by the House of reps -

All hail the president of the Ijaw Nation -

Standing5: lAEDERCHIPS PROBLEM

Nigerian education gone to the dogs