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SPECIAL REPORT: How Away and Home Football Matches Affected Nigeria’s GDP in 58 Years

By
Mutiu Iyanda
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1
fans

Sports is one of the industries that unites people throughout the world. During local, national, regional and international competitions, people of different races do come together to engage in physical activity that benefits everyone. Apart from the personal benefits to individuals, sporting activities have been found as part of activities that enhanced socioeconomic development and strengthen governmental relations. Out of the numerous sporting activities, people and countries participate in football than other games.

From club football to national football competitions, the king of sport [football] has greatly contributed to the national GDP of governments in Europe, North America and other continents, when a conducive atmosphere is provided. In its report on the growth and contribution of football to the UK’s, the Ernst & Young notes that “the League and its 20 member clubs contributed a gargantuan figure of £2.4 billion to the British economy in the 2013/14 season.”

In 2019, apart from the direct participants in the league, the British government also earns over £800 million in tax from Premier League players. In our checks, we have also seen how the economies of countries that hosted World Cup improved and suffered. For the countries that experienced positive economic growth, it emerged that the governments managed the preparation for the competition effectively, removed wastages and blocked corrupt system ahead and after the competition. For instance, in 2002, South Korea recorded a strong real GDP growth of 7%.  After hosting the 1998 edition of the championship, France attained a higher GDP growth rate of 3,4% than what it had in 1997 [2.3%]. Spain, the United States of America and Italy also had higher GDP growth rates. In the history of hosting global fiestas, South Africa remains the only African country that has hosted the World Cup competition of national teams. The country hosted the competition in 2010. In its preparation for the championship, $3 billion [US] was spent on infrastructure [stadia, recreational centres, hotels among others].

Despite this, a number of citizens believed that a contribution of 0.1% to the GDP growth  was insignificant. This view is not quite different from Nigeria after hosting several regional and global competitions such as junior World Cup. While on global competition, the Nigerian Football Federation [NFF] budgets substantial amount without bringing expected results. During the 2018 World Cup, the Federation spent N6.4 billion on its activities for the competition.

Beyond hosting and spending, Nigeria is one of the countries that is yet to consider a place for the measurement of sports in the Gross Domestic Product calculation. This affirms the fact that sporting activities remain insignificant economic activities to the Nigerian government. Over the years, sporting activities have been measured within the arts, entertainment and recreation sector.

Exhibit: Arts, Entertainment and Recreation in Gross Domestic Product at Current Basic Prices (=N=Million)

Source: NBS, 2020; Infoprations Analysis, 2020

Exhibit 2: Arts, Entertainment and Recreation in Gross Domestic Product At 2010 Constant Basic Prices (=N=Million)

Source: NBS, 2020; Infoprations Analysis, 2020

Exhibit 3: Arts, Entertainment and Recreation’s Average Contribution to the GDP growth in Current and Constant Prices [%] 2019-2020

Source: NBS, 2020; Infoprations Analysis, 2020

In this piece, our analyst notes that Nigeria needs to consider football as part of ‘objects’ that would increase its economy. This is necessary considering the citizens’ love for the game and the country’s place in it globally.

Our Data and Measures

Five hundred and sixty-one matches played between 1960 and 2019 [with the exception of 1964] and the country’s Gross Domestic Product growth rates during the period were our data. In 2019, report has it that Nigeria’s GDP in purchasing power parity was $1.2 trillion. Our period of analysis is 58 years. During the period, the national team’s friendly, qualifications and the main competition games were analysed along with the GDP growth rates.

In our measurement, we follow gravity model framework, which proposes that playing home and away matches [during friendly, qualifications and competitions] have the tendency of attracting socioeconomic opportunities to the teams’ countries. We also examine the extent to which Nigerian team played away games when the GDP growth rate contracted in a year. Before using the GDP growth rate data, we categorised it into positive and negative. When the rate had 0 and – as starting number and symbol, we classified it as negative GDP growth. Rates with 1 and more than 1 were categorised as positive GDP growth.

Emerging Insights

Looking at our insights, it is clear that Nigeria can benefit from playing and hosting football competitions. Our first analysis shows that a strong association exists between the GDP growth rates [positive and negative] from 1960 to 2019 and the years of playing the matches. In spite of this, our analysis did not establish a strong association between the rates and outcomes of the matches. By outcomes, we looked at the number of matches won, draw and lost by the national team. In our analysis, we discovered that 0.4% of outcomes of the matches could be determined from the GDP growth rates. However, the outcomes influenced the GDP growth rates more than 1.3 times during the period.

A total of 137 matches were played when GDP growth rates were negative. During the negativities, 58.4% of the matches were played by the Nigerian team as an away team and 41.6% as a home team.  Being an away and a home team cuts across the categories of competitions participated in. Four hundred and twenty-four matches were played when the GDP growth rates were positive. Out of these matches, the Nigerian team was an away team in 51.9% and played as a home team in 48.1% of the matches.  When the GDP growth rates were negative, the national team was more than 2 times, losing and almost 3 times winning their matches. Also, when the rates were negative, the national team was more than 1 times draw their matches.

Examination of the matches by tournaments  indicates that 48.2% of the 561 matches were friendly matches and played when the GDP growth rates were negative. More than 15% of the matches were played during the African Cup of Nations. When the GDP growth rate was positive, friendly matches [39.6%] were played more than African Cup of Nations [21.2 %] and FIFA World Cup qualification [20.0%] matches. When GDP growth rates were negative and positive, they played away matches 2.1 times than home matches.

In our analysis, we found a clear differentiation between playing away and home matches during economy dwindling.  One of the surprising insights that emerged from our analysis is that home and away scores when the economy was dwindling were the same. When the growth rates were negative, the highest home score was 1 followed by 0. This is not quite different from when the team played during the negative economic situation. The highest score was 1 followed by 2.  During positive and negative economic situations, the team’s highest score was 0 followed by 1.

What does play away and home matches mean to the GDP growth rates in 58 years? In our analysis, we found that home matches impacted the growth more than the away matches. On average, away matches contributed 3.35% to the GDP growth rate, while home matches made a 3.88% contribution. In 58 years, both the away and home matches made a 3.59% contribution, on average, to the GDP growth rates. Analysis further shows that playing away matches and having a score indicated 2.7% increase in the GDP growth rates, whereas home matches increased the rates by 2.2% when the team scored one goal.

Exhibit 1: GDP Growth Rate Versus Away Score

Source: FIFA, 2020; CAF, 2020; World Bank, 2020; Infoprations Analysis, 2020

Exhibit 1: GDP Growth Rate Versus Home  Score

Source: FIFA, 2020; CAF, 2020; World Bank, 2020; Infoprations Analysis, 2020

The Way Forward

These insights have indicated that the Nigerian government needs to take football serious if truly it intends to improve its economy and diversified from the oil industry. Sports, especially football, need to be treated as a business before substantial contribution to the GDP could be realised from it.

“In the football league, we can count about 28 sub businesses across associated value chain that can stimulate growth in the economy, drive employment and reduce youth delinquency in the society but we need to harness the potential of our football as a business to open these opportunities,” Shehu Dikko, Chairman of the League Management Company, said during a recent interview.

What Nigerian FM Companies Can Learn from Mitie Group, the British Strategic FM Company

By
Mutiu Iyanda
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0

Nigerian facilities management companies have many strategies and tactics to learn from the players in the developed markets. Likewise, those in the developed markets have many things to learn from Nigeria, especially how they are coping during uncertainties situations. This piece examines brand portfolio management and shared value creation from the perspective of Mitie Group. This becomes imperative as our previous analyses indicate that Nigerian players cannot do without co-create value and capture it together as the industry grows.

Mitie is a household name in the United Kingdom’s facilities management industry. Over the years, the Group has been delivering FM solutions and offering products to businesses, governments and individuals in the UK and other countries in Europe and North America. In recent times, it has undergone a series of merger and acquisition.

Brand Portfolio Management

The clear difference between a brand and a product is that a product evolves from a brand. A brand is an entity that entails people, material resources and financial capital that produces or manufactures a product. As clear as this, in our experience, we have seen how marketing and communications professionals in the Nigerian FM industry are muddling communicating a brand with communicating a product.

This reminds us of the place of brand portfolio management. BPM stresses the use of communication playbook for effective and sustainable communication. The playbook encompasses the ways and approaches to communicating values, culture and personalities of people ad brand to the targeted markets. As a rulebook, it explains how logo, font, colour, photography among others, must be used in written communication engagement. The key strength of communication playbook otherwise known as brand style guide is its ability to help businesses maintain consistency in voice and character (personality). When it is used properly, it has the tendency of enhancing brand equity, identity and loyalty.

However, the success of using it largely depends on the extent to which employees are carried along. Among the brand experts, employees should be considered as the recipients and expressors of brand identity. This is necessary because clients see employees before experiencing products or services. This explains the reason that evaluation of the employees fit with the playbook has to be done in relation with companies’ strategic intents. Companies have to constantly ensure that the manners and channels being used to present products’ personality, status and voice are consistent with the vision and mission statements including functional level strategic objectives.

Mitie cannot communicate its personality and culture exceptionally without having a guiding style or plan. As espoused earlier, the company must interact with the internal and external publics by informing them of its history, vision, personality traits and core values. On a specific note, it has to tell the publics why and how it is a business that is receptive to feedback, new ideas and always on the lookout for innovation in its markets. To communicate the vision, personality traits and core values effectively, Mitie devised brand guidelines that encompass the way to place texts, images, illustrations and communicating core attributes associated with services, personnel and customer engagement. In 2014, it commissioned “a special cut of the Megallanes font to ensure a unique brand image.

The new brand carries the Mitie name in lower case lettering beneath pink, purple and orange spheres, which it claims ‘reflects the company’s vision to inspire change in the way people live and work’. The new logo and brand identity are said “to be more in keeping with the shift in Mitie’s labour force from a largely blue-collar manual workforce to a modern service employee base. Reflecting Mitie’s desire to see the brand at the heart of every employee and customer”.

Shared Value Creation

As one of the FM companies with the intent of creating and capturing value sustainably, Mitie’s culture has been built the ‘exceptional, every day’ mantra with the focus on being committed to customers, professional colleagues in the industry and other stakeholders.

For instance, it initiated Project Helix with the intention of consolidating its share, enabling investments in employees, customers and emerging technologies. Mitie’s commitment to the emerging technologies could be discerned from its the Connected Workplace project. With the project, the company is capitalising on the new technologies towards ensuring exceptional value delivery every day for people and any environment it found itself. To make the purpose sink in people’s minds, especially top executives in sectors being served, Mitie made a film that captures essence of the concept.

Mitie has demonstrated that it has robust and sound HR policy and practices. It has stressed that the brand standards must be maintained at all times to ensure a consistent and impactful message. In addition, employees must think like a customer. This could be gleaned from its strategic vision and mission statements.

On the employee development and management practices, Mitie states that “Financial and non-financial remuneration must reflect the capability, skills and experience of the individual and incentivise behaviours in line with our principles. We will provide access to wellbeing support for our people, such as occupational health and an Employee Assistance Programme.”

In our journey of studying the Group in the last one year, we have realised that sustainable value positioning is being pursued consistently. A big lesson for the Nigerian players. Having created value collectively, our analyst proposes that customer positive experience can evolve in FM industry when companies initiate sustainable value sharing. Like Shared Value Creation, Shared Value Sharing should also be formed and used by considering clients’ inputs. Both value creation and sharing should not be the main responsibility of companies. Clients’ voice must be heard. Without this, customer positive experience will remain elusive in Nigeria.

In our analysis of Mitie’s messages, we found that employees and partners were more targeted than clients and professional bodies. This does not indicate that the Group does not prioritise other publics. How do the brand guidelines state in the playbook manifest in the messages? From the messages mined and analysed by our analyst, it emerged that the messages were developed around the key services and connected workspace project. The rules of usage regarding crafting content were discovered to be prominent in the messages.

However, it is glaring that the rules were not followed properly while employing photography, typography, colour and logo elements. Many factors could account for this. It could be linked to the media platforms used by the marketing and communications department and the kind of messages disseminated to the stakeholders.

Exhibit 1: Fully Supported and Engaged Connection with the Group’s Core Words

Source: Mitie Group, 2020; Infoprations Analysis, 2020

Analysis reveals that employees are receiving adequate support and engagement from the management of the company. It could also be deduced that collaboration is in existence among the employees and between the management and employees. Analysis further indicates that be the best every day and having a sense of belonging are being perceived by the employees. A great number of the employees also indicate that they are connecting their values and traits with the company’s success pursuit.

Though, we did not analyse the link between employees’ views and revenue or profits in 2019, our analyst notes that the company is expected to have substantial revenue or profit from its superior employee engagement and support for application of the rules in the playbook. One of the successes of support for application, according to our analysis, is the reflection of fully supported and engaged in the way employees crafted messages about the company and products. We found more than 14 times reflections of the company’s watchwords.

N3,000-N6,000 Lagos-Ibadan Train-fare: A Transport Alternative Nigerians Don’t Want

By
Samuel Nwite
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1

The Federal Government on Friday announced the approved charges on the new Lagos-Ibadan rail standard gauge which is billed to commence operation in January 2021.

The announcement was made by the Minister of Transportation Rotimi Amaechi during the inauguration of the Governing Council of the Chartered Institute of Transport Administration of Nigeria in Abuja.

Amaechi said the transport fare from Ibadan to Lagos will cost from N3,000 to N6,000, a replica of the Abuja-Kaduna model.

“I have received the mandate of President Muhammadu Buhari to inaugurate the Lagos/Ibadan rail project by January 2021, which will make Nigerians see the way the standard gauge railway looked like.

“Today I approved the charges on passengers from Lagos to Ibadan, we just transfer how we charged from Abuja to kaduna. We charge N3,000 per Economy seat, N5,000 for Business class, and N6,000 for first class, the same is applicable to Lagos to Ibadan.

“It should have started running by now before Mr. President inaugurates it by January,” the Minister said.

He added that there will be collaboration between the Ministry of Transport and the Chartered Institute of Transport Administration of Nigeria (CIOTA) to achieve the objective.

However, the announcement has not gone down well with Nigerians, who took to social media to register their displeasure.

“How can rail transport cost 3,000 from Lagos to Ibadan, who are the people advising these oga dem sef, your closest competitor is road transport. How much does it cost to move with that from Lagos to Ibadan, half the price then you’re in business,” a Twitter handle wrote.

Amaechi said the goal of the Transport Ministry is to bring the Lagos-Ibadan fares in tandem with the Abuja-Kaduna model, even though the distance and circumstances differ.

Abuja-Kaduna road is a distance of 189.4 km that takes about 2h 55 min to cover by road. Given the current security situation on the highway, there is willingness to pay among commuters as the fare is way cheaper than potential ransom. Kidnappers have overrun the highway, making rail transport and flights the only safe alternative for travellers.

On the other hand, Lagos-Ibadan is a 132km trip that can be covered in less than 3 hours, depending on the highway’s traffic. Therefore, the announced train charges seem unacceptable because the road transport to Ibadan is operational and cheaper.

“I know some blockheads will still come and defend it but the train ticket from Lagos to Ibadan shouldn’t go for anything more than 1,500 for the economy class. What then is the essence of the railway if it’s not affordable? How much is the minimum wage that one would pay 6k to & fro?” Wale Adetona wrote on Twitter.

With a commercial 18-seater bus, the cost of transport from Lagos to Ibadan ranges from N800 to N1,500, while smaller vehicles that offer more comfort charge from N2,000 to N3,000.

Globally, rail transportation offers ‘cheaper’ alternatives to road transport, a reason believed to be behind the federal government’s move to reintroduce trains to Nigeria’s transport sector. Therefore, Nigeria’s minimum wage of N30,000 monthly defies the logic behind N3,000 for 132km train ride.

Upon the conception of the Lagos-Ibadan light rail gauge initiative, many workers in Lagos began to entertain the idea of working in Lagos while living in Ibadan to save them the crazy cost of accommodation. But following this development, that idea seems more like the many dreams Nigerians have that would never come to pass.

“Lagos to Ibadan train services prices are out. It is 3k economy seat, 5k business seat and 6k first class. If you do economy and plan to live in Ibadan and work in Lagos, that means N6,000 a day and N180,000 a month. On transport alone. There’s no hope for the poor,” Dr. Olufunmilayo wrote on Twitter in response to the development.

Nigerians believe the exorbitant ticket charges are as a result of the Transport Ministry’s desperation to generate fund for the repayment of the Chinese loan used to fund the rail project, and it would cause more harm than good.

The Central Bank of Nigeria (CBN) Had A Great Week On Policies

By
Ndubuisi Ekekwe
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14
Nigeria Naira US Dollar

The Central Bank of Nigeria (CBN) team just ended a great week on policies. I think they deserve our commendations. I understand that the economy is still hurting. But over the last few days, the CBN is recalibrating. I am reversing my projection on the continuous deterioration of Naira against the US dollars at scale; the marginal loss remains due to our poor productivity quotient and overall poor balance of trade. 

The CBN under Governor Emefiele ran a solid good monetary policy under President Jonathan. But at the inception of the President Buhari administration, he cannibalized what was working. It was very strange and I have written here to show my frustration on the evolution of these policies.

But today, they are getting back to the fundamentals. I expect more funding for startups. I also expect more remittance hitting Nigeria. In short, the biggest export Nigeria has run for years now is the human capital. And those citizens reward the nation via remittance. I estimate about $1.8 billion – $2.2 billion monthly remittance into Nigeria. If that happens, that means more foreign currency will be in circulation, giving Naira a breathing space.

Our total remittance as a nation is always at parity with the total executed national budget. In other words, even though we may have a budget of $30 billion, the execution is never 100%, and by the time you look at the percentage of execution, the number is always around the amount remitted into the economy from Nigerians living abroad. That remittance froze because the deal was not there: if you had sent $1,000 via Western Union last week, they would pay your family N384,000!

Hopefully, in two weeks, after they have adjusted to the new policy, Western Union will ask your bank to pay you $1,000 in cash or put the money in your dorm account. With that, more forex enters into Nigeria and more Nigerians in diasporas will have incentives to wire more.

“We are leaving no stone unturned to ensure that our customers instantly receive their transfers as cash (USD) or transfers into their domiciliary accounts. Our customers have the flexibility to choose the mode of receipt that suits them. It is strictly on their terms,” said a leading bank in Nigeria.

Central Bank Governor, Nigeria

This new policy will attain a full steady state in late Q1 2021 as there are many backlogs for foreign currency that any immediate supply would be swallowed up quickly. Also,  due to Christmas holiday coming, economic activity will slow down. But from March 2021, Naira will stabilize with the official and black rates fairly closer, provided Covid-19 does not add another shock in the crude oil market which may rattle the world oil demand. As I write, crude oil prices are hitting to close a 5th week of gain; a $50 per barrel on Brent crude is just around the corner.

That it took CBN this long to do this is unfortunate. But we have to be happy because it has been done. Well done CBN.

Arik Air Fires 300 Workers – Harsh Harmattan Coming To Labour

By
Ndubuisi Ekekwe
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1

Nigeria has done well in managing and curtailing Covid-19 biological pandemic. Yes, to a large extent, our healthcare experts have overperformed. But the economic pandemic is about starting. This could become a really harsh harmattan for labour. You would expect that, as paralyses are coming from multiple fronts and some sectors remain severely under water. Today, Arik Air has drawn the first blood: “Arik Air management declares 300 staff redundant”. That is another way of saying that Arik has fired 300 people. Very painful!

The statement, titled ‘Arik Air management declares 300 staff redundant’, noted that a redundancy package would be provided for the affected workers with the help of the aviation unions.

“Arising from the devastating impact of the COVID-19 pandemic, leading to the constrained ability of the airline to complete heavy maintenance activities and return its planes to operations, stunted revenues against increasing operational costs, the management of Arik Air (In Receivership) has declared 300 staff members redundant to its current level of operations,” the statement said.

“The leadership of the impacted unions has been contacted to negotiate a redundancy package for the affected staff.”

The statement said over 50 per cent of Arik Air’s workforce of over 1,600 staff have been on furlough in the past six months on a base allowance.

“Decisions to let go of staff is naturally a difficult decision. Arik Air wishes the impacted staff well in their future endeavors,” the airline said.

As written there, a few months ago, Arik noted that it had put 50% of its workers on furlough. This sack is taking that redesign to a steady state which is a calamity for the families involved. As you count airlines, remember restaurants and private schools: most are not re-opening.

One quick thing, if Nigeria has data of its citizens, is to re-ignite the economy through consumption, by sending N10,000 to every citizen. If you do that, we can spend ourselves out of this while structural adjustments are done across sectors with growth-focused policies. But of course Nigeria does not have data and cannot send cheques to the citizens. I have called for sustained tax changes to stimulate venture funding in Nigeria. As population continues to rise, this economy cannot afford to shrink!

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