Nigeria economy decline
at its lowest rate in recent time in the third quarter of 2014, but Nigerians
still think the country could still have a great 2015 and beyond. While some
experts expressed fears that the multiplier effect of the crisis last year
would cause hardship and sluggish growth in the first quarter of 2015, others
advised the Federal Government to reduce the cost of governance in order to
reduce wastage in the system.
Advertising
As we are approaching
2015 election the mouth of major advertising practitioners in Nigeria has
started to salivate. Like in most countries where elections hold at an
interval, the advertising industry in Nigeria is planning on how to maximize
the billions of Naira that will be spend by political office holders or seekers
during the period. Already political maneuverings have become intense, a major
opposition political party with the power to rival the ruling party (APC) have
shown they are into the race for change. Like in the US the prospect of having
two near equal major political parties is good for the advertising industry, as
it will means piece competition in placing of advert not like before when the
weaker parties cannot march what PDP (the ruling party) normally spend on
advert.
As one of the important
dynamics that will determine the future direction of this industry, there is
currently a squabble going on between the major players in the industry. One of
the main issues at stake is that of allowing foreign advertising agencies to
invest their capital in the Nigerian advertising industry.
It could be recalled
that the outgoing board of advertising practitioners’ council of Nigeria
(APCON) has instituted a law banning foreign advertising agencies from owning
more than 25% stake in any advertising agency in the country. This single move
no matter on whose side you are will have a profound effect on the future
direction of the industry. There are those that belief the move will help
protect local advertising industry by protecting it from the predatory
practices of global advert agencies, thereby, allowing it to grow to a level
where it will compete with bigger global brands not only on Nigerian soil but
on the global scene.
As the economy continue
to grow so doe’s major companies’ effort to boost their image through branding.
Already major brands in the country in telecoms, FMCGs and banking sectors have
been spending billions of Naira in order to increase the strength of their
brand, what branding experts called ‘Brand Equity’.
Politics
Much of the fear
surrounding the economy is hinged on the outcome of the general election,
billed to take place in Nigeria on February 14 and 28, 2015. Its impact will
dwarf that of any other event as far as 2015 is concerned. This is because the
outcome of the elections and the immediate aftermath will determine what will
become of Nigeria and if any other issue or event will even matter.
News of defections were
widespread last year and has also continued even when the election is around
the corner. The defections are sure to continue after the elections, should
they be held successfully, as politicians lobby to be appointed into public
offices at different levels of government. Regardless of who or which party
emerges victorious in the elections, there will be changes in several key
positions across the three arms of government.
The elections (especially
the presidency) will be the most closely fought in the country's democratic
history, but the power of incumbency, wrangling in the opposition and the fact
that it remains the only truly national party means that the PDP is likely to
win.
Telecommunication
In 2015, regulators in
the Information and Communications Technology (ICT) have the huge tasks to
implement policies that would yield the dividends of technology and bridge the
digital divide among the citizenry.
A lot is expected from
the National Information Technology Development Agency (NITDA), Nigerian
Communications Commission (NCC), Universal Service Provision Fund (USPF),
Broadband Council, Ministry of Communications Technology as well as Computer
Professionals Registration Council of Nigeria (CPN) to drive Nigeria’s ICT
development beyond the realm of paperwork.
Issues of multiple
taxations, multiple regulation, right of way (RoW) for telecom infrastructure,
inadequate environment for telecommunication operators and value added service
(VAS) providers to operate, local content, software development funding,
quality of service by telecom service providers, auction of telecom licences,
etc, will dominate discourse in 2015.
Experts said that in
2015, the NCC should pay more attention to quality of service (QoS) of voice
and internet data services provided by telecom operators across the country.
While voice tariffs have come down over the years, internet data tariffs
fluctuates depending on the service provider. With sale of mobile towers by
MTN, Airtel and Etisalat, telecom consumers said the NCC should monitor the QoS
provided by the telcos to ensure they meet approved key performance indicators
(KPIs).
Though the telecom
sector has attracted over $32 billion investment in the past 13 years of the
launch of the Global System for Mobile Communications (GSM) in Nigeria, the
market still operates below potential. While strong, Nigeria’s mobile
penetration is still lower than a number of other African markets. Broadband
penetration remains low at less than 10 per cent, with the government setting a
target of 30 per cent by 2017.
Energy
Another issue that may
dominate discourse this year is the power supply situation and its cost
implications. With the recent privatisation of the power sector, there seemed
to be light at the end of the tunnel towards the end of last year.
If the energy situation
does not eventually improve, production cost will remain high (or higher in
situations of worsening gas supplies). Before now, experts too had advised
Nigerians to not expect regular power supply till 2016 or 2017, but many
Nigerians are yet to come to terms with this. However, if something beyond the
ordinary happens, resulting in improved power supply, manufacturers will have
cause to smile.
Apart from energy
costs, the issue of smuggling and influx of fake and substandard goods may also
dominate industrial debates within the year. Manufacturers are insistent that
unbridled imports are stifling the growth of their firms, especially infant
ones. They also complain that some of their products which compete in African
markets are cloned by Asian importers, in collaboration with their Nigerian
counterparts.
However, no matter the
direction of developments in Nigeria’s manufacturing industry, in 2015, it is
certain that Nigeria’s aspiration to be one of the top 20 economies by the
close of this decade will remain a mere dream if this critical industry remains
in doldrums.
To address the
uncertainties around the prices of oil, stakeholders, investors, service firms
(especially local firms) might need to adjust offerings to the new realities
but craft agreements that are flexible enough to benefit from the possibility
of price upsides or gyrations. We might still get $70/barrel in 2015, though
that might be too optimistic given the current situation.
A reduction of 10 Naira from fuel price in the country and expected reduction in the cost of kerosine in the country come as a sigh of relief to the people at the beginning of a new year.
Finance
Market observers
believes the poor performance of the 2014 financial year is as a result of the
outbreak of Ebola disease, unemployment, the devaluation of the Naira coupled
with the fall in crude oil prices and security challenges led to the decline of
the financial sector in the country.
In the banking sector,
the large gap between the lending and saving rates is indicative of
inefficiency in the money market. It is noteworthy that government borrowing
from the market increased immediately after the global crisis while credit to
the private sector declined.
The implication is that
government public domestic debt was increasing while the credit for production
was not forthcoming. Part of the borrowed money was used as intervention fund
to prop up businesses that were affected by the global crisis. These include
the textile industry and aviation sector.
The Nigerian Stock
Market in 2014 closed negative with the key market indicators, NSE All Share
Index, far below what was expected at the beginning of the year. The NSE market
capitalisation as at Dec. 30, 2014, closed at N11.49 trillion from the N13.20
trillion in the corresponding period of 2013. The decrease of N1.71 trillion
represented 12.95 per cent decrease already.
The Nigerian economy
thus entered 2015 on unstable economic conditions. The conditions are falling
price of crude oil and consequently falling revenue into the federation
account; the domestic currency is depreciating fast at $1 to over N180; the
foreign reserve hovering around $40 billion or less than six months import bill
at the current level; high cost of borrowing for investments; falling demand
for Nigeria’s oil in the international market; unbridled appetite for
corruptive activities; the bearish hold on the stock market, the declining
capacity utilisation in industries and the continued rising youth and adult
unemployment.
In general, the
Nigerian macroeconomic environment is expected to be mixed and highly
influenced by developments in the global oil and financial markets. However,
the medium and long term prospects of the Nigerian economy depend on
developments in the oil section, political events as well as enforcement of tax
compliance to boost revenue.
Consumer
Trends
Industry experts
projected that consumers are becoming more comfortable with ideas that once
seemed beyond imagination – like robots in the home and mind sharing. In 2015,
consumers will watch streamed video more often than broadcast television.
 |
| Mrs Anurika Azubuike |
According to the fourth
edition of Ericsson ConsumerLab’s annual report released recently, top 10
consumer trends to watch out for in 2015 and beyond include Streamed future;
Helpful homes; Mind sharing; Smart citizens; Sharing economy; Digital purse;
Information; Longer life; Domestic robots; and Children connect.
Mrs Anurika Azubuike of
Terragon Group Marketing & Corporate Communications, stated that the
concept of Mobile-first will be amplified as more people are spending their
time on their mobile more than any other device, and also access the internet
via that channel.
"Key to the coming
year also is that Content will continue to be king. Even more with how hard it
is to produce quality content in quantity. Content must be relevant,
meaningful, engaging and informative. 2014 witnessed a rise in viral videos and
the magic of using videos as a viable content marketing tool. Facebook
announced that it had more video views than YouTube this year. In 2015,
marketers need to be smart about how content can be leveraged and repurposed.
Find ways to use videos to tell the story. Social audiences themselves can be a
source of inspiration for authentic content when moderated and presented in a
creative way".
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