Happy Easter

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April 1, 2018

Happy Easter, it is the day of resurrection. It is that day when that big unsolvable equation has a meaning.

Yes, [All Things]/ 0 = Infinite Grace.

Anything and all things, under that miry clay of life burdens, sorrows, pains, and hopelessness turn into infinite grace of hope after our Christ experienced death (the zero).

I experienced the rising of Christ this morning. Let the resurrection power catapult you into His pastures, out of the miry clay.

“He drew me up out of a horrible pit [a pit of tumult and of destruction], out of the miry clay (froth and slime), and set my feet upon a rock, steadying my steps and establishing my goings.”

Happy Easter!

New Classroom of the Ghana’s Teacher Who Drew Microsoft Word on Blackboard

By

Ndubuisi Ekekwe

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March 31, 2018

4

Remember that Ghana’s teacher that drew Microsoft Word on blackboard? He has a new classroom.

It is hard over there for our teachers in Africa. A teacher in Ghanahas to draw a word processing window on blackboard to teach his students. I commend this teacher and I would be happy to send his class a laptop if anyone knows him [Possibly the kids would see how a real Word Processing Window looks]. He is genuinely built to teach for investing such an effort for something that may be wiped out after 3 hours since he would need the same board for other things.

This was the old classroom.

THIS IS THE NEW CLASSROOM

Never doubt what one person can do in the lives of many.

The Risk of Herding Strategy

By

Ndubuisi Ekekwe

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March 31, 2018

0

bitcoin — Bitcoin is flawed but NairaCoin offers promise in Nigeria

In your business, do not do “herding” where everyone does the same thing. As I noted in Tekedia [had a long piece on that in Harvard Business Review print around 2011], when you do that, a new entrant has only one strategy to annihilate your industry. Yes, since everyone is doing the same thing, conquering the market is easier by a newcomer.

The same analogy above applies in many modern industries. Companies increasingly congregate in their competitive strategies. They tend to do similar things in order to self preserve themselves. In the era of Yahoo and AOL, they provided similar services. Cell phone companies provide services and pricing models that are largely the same. Everyone wants to eat from the same pot and let the help offer assured preservation or total destruction whichever flips.

Even the network televisions are not spared this effect. From casinos to airline industry, we can see an ordered communality across industries. They mutually agreed, though never admitting it, to move in features, services and prices alike. The airline industry was notorious for it about fifteen years ago. In most developing markets where Internet has not penetrated deep enough, the media empires move in tandem on their stories, prices and distribution networks.

I call this communal competitive strategy because it simply means that these firms in their respective industries form communal ties and agree to provide services that will preserve them with lesser disruption to their industries. They may not band together because that could be illegal but the outcome shows they watch one another. Many have called this win-win strategy. It has also been seen as co-opetition where, especially in banks, they cooperate though competing against one other in other to keep the industry healthy

This applies to how we grow wealth. When it seems like everyone is making profit with no apparent bleeding for some, it is probably MMM and will turn out bad. And when everyone seems to believe it will be all parties for everyone, hello cryptocurrency and Bitcoin.

Simply, any business or sector where there is no obvious risk of loss or gain by different participants in short term, it is probably not based on sound economics. If MMM says everyone would win, that is against the laws of markets. When Bitcoin promises same, it is an illusion.

This is the Bitcoin price today (see the plot below): around $8,000. From Google to Facebook to Twitter, they are caging it. Now, the fraternity that did not want government is asking for government to come and regulate it. It wants legitimacy because the ICT utilities are indeed regulating it.

If you are banned by Facebook, Google and Twitter, you probably do not belong in this world. You are irrelevant. If you do not reverse it, the only destination is oblivion. You can see that from the price of Bitcoin. (Advertising on crypto-related products including ICO (initial coin offering) are banned by these ICT utilities. Simply, the ICT utilities have decided that they are not important for the real economies).

All Together

Just hope you did not buy Bitcoin at $22k because unless government can regulate it, it may be in deep trouble. Facebook, Google and Twitter are banning adverts on it. If you are banned from the ICT utilities, you do not belong in this world.

Dealing with Long-Profit Gestation in Nigerian Startups

By

Ndubuisi Ekekwe

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March 30, 2018

4

The gestation period to profitability in a typical Nigerian startup is long. That long gestation is also the reason why many startups or small businesses collapse few years of founding. Typically, one way to deal with this is to raise capital, ramp up market entry to grow fast enough to attain profitability. But in our extreme volatile economy, if the timing is off by months, the company can collapse. You just run out of cash.

This is one problem we deal with in my Practice as we work with clients: how do you invest without getting into a trap where one sneeze in Saudi Arabi or Iran [America coming with shale gas] can kill your business because Nigeria’s economy would be affected due to its dependence on crude oil.

According to a report by Pearl Mutual, a consultancy, an average of 5.7 million Nigerians are considered to spend within US$10 to US$20 per day. The country has an estimated $115 billion annual consumption spending.

That is a big one but the market is extremely fragmented that economies of scale rarely happen due to lack of infrastructure. Kano and Osogbo have little in common except that Osun and Kano states go to Abuja to collect cheques monthly. So the average national statistics has little meaning in the real execution of business strategy in Nigeria. We have heterogeneous markets making things more challenging.

While you may think that raising capital may help you, most people have noticed that you can raise capital and still crash. Think of Efritin which just gave up on Nigeria. It happens daily. They think that market growth is the solution when the path to profitability is what matters [path to profitability may not matter to a U.S. founder because they have massive sources of new capital. We rarely have here].

Yes, your new business problem in Nigeria is not just capital but the long gestation period required for profitability, affected by many factors at scale.

We have refined a strategy on this problem for consumer facing startups and companies. We have noticed that when clients deploy that model, they attain better outcomes. We ask firms to discover “anchors”. And when they do, they always do well.

Advisory Services: Most times, after our presentations and workshops, clients usually engage us for Advisory Services. This is totally decoupled from the first two. In other words, you can engage us for either the presentation or workshop without the advisory services. Yet, we always welcome the moments when clients ask us to come and lead the implementation. Because we are already practitioners, making things happen is always the most exciting part of our works.

Opportunities in Nigeria’s Expanding Asset Financing Sector

By

Ndubuisi Ekekwe

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March 30, 2018

0

Across global markets, information and communication technology (ICT) is facilitating the process of socio-economic developments of nations. ICT has offered new ways of exchanging information, and transacting businesses, efficiently and cheaply. It has also changed the dynamic architectures of financial, entertainment and communication industries and provided better means of using the human and institutional capabilities of countries in both the public and private sectors.

The impact has been consequential: ICT is rapidly moving nations like Nigeria towards knowledge-based economic structures and information societies, comprising networks of individuals, firms and states that are linked electronically and in interdependent relationships. From Lagos to Abuja, Kano to Owerri, and indeed across the nation, ICT has provided enormous productivity gains, anchoring efficiency in production and business processes. Indeed, the penetration of ICT has driven efficient allocation of the factors of production, powering and enabling new industrial systems.

One major change is the capacity to enumerate and validate the identity of citizens through the highly successful Bank Verification Number. Every Nigerian citizen that wants to operate a bank account is required to obtain this number which involves capturing biometrics data along with other personal data. This number is evolving a new credit system which would support the growth of asset financing through verifiable sources of income for both public and private sector customers.

Our data shows that asset and equipment financing sector (without SME funding) will hit N2.2 trillion by 2020 in Nigeria.

As Africa’s largest economy and the most populous with GDP of $510 billion and excess of 180 million people, Nigeria is poised for growth in finance, energy, telecommunications, entertainment and indeed all key sectors of modern commerce and industry. It has fully recovered from recession, and as the global crude oil price accelerates, government spending would improve. The consumer confidence is already high and the sentiment generally from IMF to World Bank is that Nigeria is poised for long-term growth.

One sector would follow this trajectory: asset financing sector as Nigeria redesigns towards a credit-based economy. One of our clients, Amaecom, is a national leader in this space. You can manage your cashflow better by giving it a call. It does the following:

Provision of mechanism to enable workers acquire equipment even as they pay with interests over time.
Transparent asset financing across different equipment categories including electronics, vehicles, etc.
Helping workers and SMEs manage their cashflow challenges through trusted asset financing system.

Paying cash up front for brand new equipment, electronics or even cars can be expensive and can lead to cash flow problems. Individuals simply do not have the capital for a big purchase that’s where we come in, we make things easy and stress free.

Amaecom global limited was incorporated in 2004 as a asset financing Company. Today, we are Africa’s leading asset financing company with operations in Nigeria, with presence in Cameroon, Ghana and China.

Our expertise in manufacturing, professional services, logistics, engineering and asset financing, has earned us numerous awards and recognition, both locally and internationally.

We have 25 branches in various state capitals and 3 sub branches in three states, our headquarters in Abuja, Nigeria.

Happy Easter

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