Lowering The Risks In Developing Do-It-Yourself Software Projects

Mike Dunville* had a decision to make. As the new operations manager for Alpha Staffing, he wanted to make a difference at the dynamic staffing firm. The principals of the firm had charged him with making the day-to-day operations run smoothly and efficiently while they concentrated on growing the business in today's challenging economy.
With his background in operations and finance in the insurance industry, Mike had confidently and successfully translated some of those service practices into Alpha's daily staffing and recruiting operations. Now it was time to take the next step, and modernize the hodge-podge of computer systems that until now had been reasonably adequate for their three-office operation.
But where to start? He needed a real staffing software package. Mike knew that the custom system his former employer, an insurance giant, had implemented the year before had done wonders to improve efficiency and overall profitability. It had also taken three years to develop, and another to implement. In fact, when he had left, they were still making "customizations" -- a process he figured would go on forever.
Mike didn't think that Alpha could invest that kind of time or money. Could he could bring in some business software consultants and work with them to develop a tailored package in a shorter period of time? Mike knew that the continued success of Alpha Staffing, and its entrance into new markets and business lines would be greatly dependent on a successful staffing software system implementation.
This reinforced Mike's doubts that one of the "off-the-shelf" staffing software packages would fit their needs, even if it were quicker and easier to implement. The more he thought about it, the more Mike felt that his decision on business automation would be his biggest, and if wrong, his last. He reached for a bottle of antacid.
Mike's business is unique, like yours. Special. Unlike any other competitor in the whole wide world of staffing. Your business practices are equally different. As a result, your staffing business requires specialized information technology that addresses those unique needs. You are convinced that with the right IT infrastructure -- the right staffing software -- you will be more efficient, productive, and profitable. If you subscribe to this common belief, you, like Mike, have three options to achieve that end:
1. Develop your own custom staffing software and technology infrastructure;
2. Hire a consulting firm to develop the staffing software and IT for you;
3. Buy from a staffing software/IT vendor familiar with your industry.
Of these three options, which do you think is most likely to work the best, cost the least, and get implemented the fastest?
If you, like the high-profile public staffing firms of Norrell (now Spherion) and Manpower choose to develop your own software solution, you too may have a very expensive future write-off to enjoy. In fact, Manpower's write-off for its failed three-year software development effort in the late 1990's was pegged at $57 Million.
The right answer to this perplexing question is to buy from a staffing software vendor who is intimately familiar with the industry.
Surprised? After all, you're special, unique, different, right? Well, not exactly. Yes, it is very true that you and your competitors differ in a number of important areas, such as management styles and objectives. However, you and all of your competitors also share a wealth of common traits, such as tracking employees and candidates, performing the business transactions of orders and assignments, making payroll, and billing customers.
These shared business issues are at the core of your staffing and recruiting business, and it is these issues that a staffing software vendor familiar with your industry is best qualified to address. After all, such a vendor has researched the issues to develop the necessary technology. These industry-specific software vendors can often implement a solution that can handle 80 percent to 90 percent or more of your business operational needs. (It should be noted however, that vendor solutions may vary greatly in quality, efficiency, and cost-effectiveness, depending on their expertise and previous success in the marketplace).
But let's say that the "90 percent solution" that an industry-familiar vendor has to offer just isn't enough for you. You want it all. Or you want some features or functions that the vendors don't have.
Your options then are to either do the job yourself or hiring the project out to outside consultants. Both are similar in that you, the client, assume the overall project management risks, and, in the case of doing the job yourself, the programming chores for your unique staffing software. If you decide to take either of these routes, do so with extreme care -- as industry surveys indicate that there is nearly a 60 percent probability of its failure.
According to one survey of thousands of software projects, conducted by the Standish Group of Hanover, Massachusetts, four of 10 software projects failed outright. To make matters worse, an additional 33 percent of software projects were completed late, went over budget or were completed with fewer features and functions than originally specified. Can your staffing business afford to make that kind of risky investment?
In an even more unexpected finding, the study also revealed that the use of IT consulting houses -- even highly respected companies such as Andersen Consulting (now Accenture) and Lockheed Martin -- increased the risk of a project's failure. This is astonishing because such consulting firms have staked their reputations on and are hired for their claimed expertise at developing or implementing enterprise software from such giants as SAP and PeopleSoft.
But the reason for their poor results is not so surprising -- as it pointed to business practices that leave a lot to be desired, frequently at the considerable expense of their clients.
It should be no wonder then that dissatisfaction with IT contractors has reached an all-time high. A poll of 200 MIS managers conducted by Information Week revealed that 63 percent of them had either eliminated or rebid an IT service contract within a year. This was typically due to unacceptable performance or failure to deliver as promised.
Why the low success rate of home-grown "Do-It-Yourself" software projects?
With a success rate of only roughly 40 percent, you might be tempted to accept the premise that the very complexity of custom software would have a bearing on the success or failure of project. To a degree, this is true, however, the three main causes of software development failure, as determined by industry surveys, are not related to the technology itself, but to experience, management, and politics. They are:
1. Inexperience: Technologies and programming methods change rapidly. This means that both business-side and/or contract programmers and program managers are not always up to speed on the latest development technology. What is more important, IT-oriented program managers and programmers are rarely totally familiar with the business issues to be addressed, and so may not be able to make the connection to the best technology needed to address them.
Consulting companies, including the largest and most well-known of the accounting/IT consulting firms, often use novice talent, fresh out of school, to handle programming and management chores. This inexperience leaves clients open to potentially massive cost-overruns or, worse, a system that never works even after years of development.
You probably won't hear much about these consulting firm failures though; both the firms and their clients have a vested interest to keep such admissions of failure quiet. Only when it reaches the "public scandal" or "write-off" stage does such information become public knowledge.
2. Management mis-objectives: Any firm trying to develop a staffing software project for itself must first fully and clearly define the objectives for the project. Few do this to the extent needed.
Software development and implementation is an incredibly complex process, even for a moderately sized firm. Senior management must be involved from the get-go. End-user considerations are paramount if the technology is to be fully accepted. Questions regarding business practices, methods, and future business or technology possibilities must be answered.
Critical to the success of the project is both established accountability and an understanding that software development is inherently risky due to rapidly advancing programming technology. It's useful to remember that the billions of dollars allocated to correcting Year 2000 computer problems were the result of management and programming decisions made, in some cases, in the 1960's.
At a time when CEO's often focus on the performance of the next quarter, trying to plan and manage something that may take years and millions of dollars is difficult at best. Even with long-range planning and management, mis-steps are fairly typical. And it takes unusually strong and pragmatic business leadership to admit that they've taken the wrong development road and make any needed course changes.
3. CYA CIO's: The CEO who does not want to get involved in software or IT projects is often tempted to place all of his eggs in the basket of a trusted CIO or similar IT manager. Doing so may set the firm up for a humpty-dumpty fall.
Years ago, the MIS department was often referred to as the "glass house", where massive mainframes resided, presided over a technical priesthood whose mystic incantations were the interface between the "big iron" and the information needed to run the business. Today, business-savvy CIO's and networked computer systems are the rule.
However, the firm's CIO and the MIS department may still have a vested interest in the technology and methodology with which they are already familiar. They may want to protect their turf at all costs. As a result, their tendency is to do things "the way we've always done them", only bigger and more expensively.
At the other extreme are sometimes visionary CIO's who see a new IT project as an opportunity to bring in the latest and greatest technology, without fully understanding it or its applicability to the business. Here, they may apply an attitude that if the business sotware is "not invented here", it won't work right.
Either way, the firm loses, (although the CIO and MIS department staff may gain some new programming skills they can use on their next job).
Can you ensure the success of any "Do-It-Yourself" home-grown software project?
With so many variables -- technology, management, business practices, internal politics, competitive issues, and more, it is virtually impossible to predict the success of any custom software development project. At best, you've only got a 40 percent chance of success. You can, however, improve your chances somewhat by following a few simple guidelines:
1. Establish goals. The most important thing is to define, exactly, what you want to accomplish. What is your firm's business plan? How does IT relate and contribute to it? What should its objectives be? Be realistic in setting the goals, then document them. Get buy-in on these goals from senior management all the way to end-user.
2. Establish budget and time specifications. No matter how you cut it, software development is all about time and money. Working from your goals, consider the cost to develop the software, AND those areas where budget and time requirements can increase exponentially. This includes testing, documentation, implementation, and end user training. And don't forget ongoing support, development, and "bug" fixing.
3. Establish project milestones. Hand-in-hand with establishing your budget and time-frame -- determine what goals you have to achieve in the development process to complete the project on-time and on-budget. Some of these milestones should be, as NASA says, "GO--NO GO", milestones; that is, if not achieved, the project doesn't fly. Remember, 40% of all projects fail outright, so be prepared to cut your losses.
4. Obtain warranties and guarantees. When dealing with outside consulting firms, this is crucial. It is all too easy to point fingers after the fact, less so if clear communication between client and consulting firm spells out the expected results. And the consequences of failure. Have a "Plan B" that you can, if necessary, fall back on.
5. Avoid "mission creep". There is often a temptation to add features and functions beyond the scope or goals of the project as it progresses. This is especially true as new technology raises the "wow" factor of the possible. Stick to the established goals and avoid the quick-sand of the "never-ending" software development.
Can you succeed with the pragmatic alternative?
If all the preceding talk of the failure rates of custom software development makes you think it may not be worth the gamble, you've one viable option left. Go back and talk to those industry-specific staffing software vendors some more.
Find out exactly what they have to offer, and what they have on the boards for the future. Can their "90 percent" software be customized for the other five percent or ten percent you believe you just HAVE to have? Or, do you really need that five percent more?
Look at your own business with a critical eye to determine if your business practices can or should be adjusted to fit the available IT solutions. Remember that with any highly experienced staffing software vendor you're buying all the improvements they've made over the years for many, many clients. You may find that, while the software solution offered may not be exactly what you want, it will in all likelyhood measurably enhance the productivity of your current operations.
Above all, remember that you're in the staffing business, not the speculative, expensive, and time-consuming software development business. Stick to your own core business competencies, with the understanding that software and technology should support and enhance your business operations, efficiencies, services, and profits.
And what about Mike Dunville and Alpha Staffing? Well, he thought it through, had a lot of talks with everyone on the staff from top down, rated all of the staffing software vendors to find the one that met 80 percent of their expected needs and had the most experience and the best R&D and support capabilities, and bought it.
That was last year. So far this year sales are up 15 percent, billable hours per desk are up 20 percent, and net margin is up 12 percent. They'll add two more offices soon without a hitch, and staff retention is better as well. Mike really enjoyed passing out the big bonus checks to everyone. And getting one himself.
*Mike Dunville is a fictitious character, as is Alpha Staffing. His story, however, is fairly typical of the clients who have come to VCG, Inc. for their staffing software needs.
About VCG, Inc.
Our focus is your success. Since 1976 staffing firms have counted on VCG, Inc. for staffing software solutions that help them improve the productivity and profitability of their operations. Founded by staffing professionals and technologists intimately familiar with the business of staffing, VCG is the staffing industry's largest and most experienced dedicated staffing software development firm. VCG solutions today power hundreds of successful staffing companies and 12,000-plus staffing professionals throughout the U.S., Canada, Europe, Southeast Asia, and Australia. VCG, C-PAS, StaffSuite, TempWare-V, WebPAS, StaffSuite WorldLink, and WebPAS WorldLink are registered trademarks of VCG Inc.
VCG Staffing Software

Investing In A Developing Economy - A Possible Solution To Global Financial Crisis

INTRODUCTION

If there were security problems in Nigeria, no businessman would go to the country to explore opportunities, companies like Celtel, MTN, Etisalat, would not have ventured into security risk country to do business. Those who spread rumour about security and corruption problems in Nigeria are saying so to stop others from making money in the country. Figures don't lie. They are the biggest testimonies for how conducive Nigeria's environment for business and opportunities are. If you want to do business in Africa and record good returns on your investment, I welcome you to come to Nigeria. The political environment in Africa, particularly in Nigeria is tremendous.

Dr. Hamadoun Toure,

Secretary General,

International Telecommunications Union,

Cited in the Punch Newspaper, May 13, 2008)

What is happening currently with the Nigerian financial system is far from being affected in any way by the global credit crisis. At global level currently, the banks are under-capitalised, but Nigerian banks are over-capitalised. And I do not think this is a problem at all. I believe that Nigerian banks are under pressure from other economies within Africa continent that are affected by the credit challenges.

- Gordon Smith,

Head of Research, Africa and the Middle East, International Consilium,

(Reported in the Punch Newspaper, June 30th, 2008).

The foregoing statements aptly connote two understandings of the state of Nigerian economy. These understandings show that, the economy is one of the fastest growing economies in Africa and in the world. Although Nigeria has had hash economic history, it has undergone and still undergoing economic reforms, which are aimed at making Nigeria the Africa's financial hub and one of the twenty largest economies in the world by the year 2020. Needless to say that the country has experienced political instability, corruption, and poor macroeconomic management in the past, this was responsible for unpleasant and harsh economic situation. The government relentless efforts to reposition the economy have translated into a remarkable economic growth and development. Several mechanisms have been put in place to sustain this growth and development, capable of balancing the interests of stakeholders. Perhaps, this view must have influenced Gordon Smith submission. He described Nigeria as the most dynamic market in Africa, which is under severe pressure from some countries in Africa to serve as a cushion against the effects of global turbulence. He also noted that some countries like Ghana, Malawi, Mauritius, among others were depending on her at the moment due to global risk exposure and that the country's economy, led by the consolidated banks, was far from being affected by the global credit crisis currently rocking the world's financial giants. He stressed further that foreign investors, who will be patient enough to weigh the Nigerian financial system on the credit risk perspective relative to global events, will find the nation's financial sector more interesting to invest and raise capital from.

Faced with numerous challenges, Nigerian government is determined to strengthen, diversify and make the economy attractive and investment-friendly to both local and foreign investors. The government has adopted total liberalization and globalization as the economic policy, instituted privatization and commercialization programmes of public enterprises, provided total security for business and people, extended invitation to domestic and foreign investors, abolished laws inhibiting competition, embraced and fine-tuned policies to ensure quick realization of growth and development of all sectors of the economy. The effort is already paying off as Nigeria is now the focus for foreign investment thereby increased exponentially Foreign Direct Investment (FDI). Scores of economic missions and delegations from developed and developing countries have visited Nigeria, thus accelerating the growth of the economy at a very fast rate.

It becomes pertinent to direct the course of this discussion to embrace the second understanding of the above statements made by Hamadoun Toure and Gordon Smith. However, it becomes more pertinent to enumerate the inherent investment opportunities in Nigerian economy before discussing the issue of security as raised by Toure.

INVESTMENT OPPORTUNITIES AND SECURITY ISSUE IN NIGERIA

No doubt, Nigeria is an investment haven with countless and lucrative investment opportunities including oil and gas, solid mineral, agriculture, tourism, telecommunication, power and steel, transport, trade processing zone, financial sector, real estate / property, manufacturing, sport and entertainment, and fashion industry. Investors have a wide range of opportunities to choose from. It is important to note that the rate of growth of investment is fantastic and exponential in any of these sectors. Investors are at advantage of presenting their products and services to already-made market taking advantage of the population of over 140 million.

In telecommunication, statistics reveals that mobile phone users in Africa were about 280 million, overtaking United States and Canada with their 277 million users in the opening quarter of 2008. With 70 million connections in 2007, the Continent became the fastest growing region in the world, representing a growth of 38 per cent, ahead of the Middle-East (33 per cent) and the Asia-Pacific (29 per cent).It was also revealed that the fastest growing markets are located in northern and western Africa, representing altogether 63 per cent of the total connections in the region. The record showed that Nigeria, Zambia, Tanzania, The Democratic Republic of Congo, Kenya, Algeria, Tunisia, Ghana and South Africa are highly competitive markets in the Region. The record further contends that two-third of Africa's telephony are in their early phase of development, with penetration rates below 30 per cent at the end of 2007.In percentage terms, it was noted that Africa is the fastest growing market in the world, but also the second smallest in terms of connections after Middle-East.

As Nigeria accounts for 57 per cent of the West Africa mobile phones, the country is acknowledged as the leading and the fastest growing telecom market in Africa. With mobile phone users at 44,932,181 and 734,444 for GSM and mobile CDMA respectively, her contributions to West Africa and Africa's telecommunication growth can not be overemphasized. While the overall economic growth rate stands at 7% per annum, the mobile telephony is about 35-50%. Assuming that each of these connections was busy for a minute in a day, the country telecoms market has the capacity to generate over USD 16 million per day (USD16, 666,667) and close to USD 6 billion per year (USD 5,833,333,300). This is why telecom companies such as Visafone and Etisalat quickly joined the likes of MTN, Globacom, Celtel and other telecoms service providers in exploiting opportunities in the country.

Early this year, one of the main GSM service providers with a subscriber base of over 15 million announced a profit after taxation of USD650 million (78 billion naira) for the year 2007.Putting all these together, one can easily understand Toure's submission describing Nigerian telecoms market as the best investment destination in Africa.

Recognizing the fact that the Nigeria telecoms industry is enormous and there is need to further exploit the sector to its fullest, the Nigeria Communication Commission (NCC) and the Ministry of State for Information and Communications have made their positions clear by extending invitation to global investors for active participation in the sector as they are willing to grant pioneer status and license for prospective applicants for various undertaking such as Fixed telephony, Mobile telephony, Fixed satellite (VSAT),Paging, Payphone, Internet and other value added services.

With the above facts, one can safely conclude that Nigerian telecom sector offers fantastic and lucrative investment opportunities to global investors. And putting into consideration 40% GSM market growth rate in the first quarter of this year (2008), there is potential for high return on investment in this sector.

Agriculture, the dominant sector of Nigeria economy, engages about 70 per cent of the population directly and provides nearly 88 percent of non-oil foreign exchange earnings. It contributes about 41 per cent of the GDP of the country. The sector recorded an overall growth rate average of 7 per cent in the last three years, a major improvement from under 3 per cent in the 90's.

Statistically, 91 million hectares of the country's total land area of 92.4 million hectares is adjudged to be suitable for cultivation. Approximately half of this cultivable land is effectively under permanent and arable crops, while the rest is covered by forest wood land, permanent pasture and built up areas. Among the states, which have the most abundant land, areas are Niger (7.6 million hectares) and Borno (2.8 million hectares).

Agriculture crops in Nigeria are grouped into cereals, root and tuber crops, grains legumes and other legumes, oil seeds and nuts, tree crops, and vegetable and fruits. Governments and the Ministries of Agriculture have made land acquisition easy, encouraged agricultural practices, extended (still extending) invitation to foreign investors and have put in place several incentives to stimulate growth in the sector. Despite, the agricultural potential of Nigeria is barely being tapped and this explains the inability of the country to meet the ever-increasing demand for agricultural products and her rank as 55th in the world (although first in Africa) in farm output.

As the world experiences food crisis and persistent rise in fuel price, the country's agriculture offers unlimited opportunities for foreign investors and the world at large to provide solutions to these crises. Foreign investors will find investments in cultivation of sugar cane, sugar beet, sweet sorghum, starch (corn/maize), palm oil, soybeans, jatropha, and algae. These products are lucrative as they are potential for biofuels, a good substitute for fossil fuel. Presently, there is a very high demand for these crops from the developed economies.

Solid Mineral is another sector with great investment opportunities. Nigeria is endowed with numerous mineral resources. Recent policy reforms have brought the solid minerals sector to the fore. The emphasis is on encouraging massive foreign investors' participation in this sector as less than 0.5 per cent is contributed to the Gross Domestic Products from Solid mineral sector. However, the Ministry of Mines and Steel and the Ministry of state's focal attention in the last one year is to strategically place the country in a better position to explore and exploit just seven minerals in the plethora of minerals so as to increase Gross Domestic Product to 5 per cent within the next few years. The seven strategic minerals are coal, bitumen, limestone, iron-ore, barite, gold and lead / zinc.

Coal can be found in Enugu, Benue and Kogi. Within these three districts 396 million metric tones can be demonstrated using JORC classification criteria, while an additional 1,091 million tones of inferred and hypothetical coal resourced for the areas studied is 1481 million tones.

Knowing fully that development of coal will assist in the realization of energy, the Government and the Ministries are inviting foreign investors to participate actively in the exploration and exploitation of the mineral. Companies such as Denver Resources and Western Metals have already committed US$10 million and US$15 million respectively for two coal fields in the country. Another Chinese firm, Grid Xin Yuan International Investment Company that is providing more than half of China's electricity needs is also in the country, indicating their interest in the development of a coal field in Kogi State.

The Bitumen reserve in the country is estimated at more than 27 billion barrels of oil equivalent while iron-ore is estimated at over 5 billion inferred reserves with presence in Kogi, Enugu, Niger, Zamfara and Kaduna States. Gold in just 10 locations is estimated at 50,000 ounces, barites 10 million metric tones and limestone at 2.3 trillion reserves.

Talc with an estimated reserve of over 100 million tones can be found in Niger, Osun, Kogi, Kwara, Ogun, Taraba and Kaduna States.The colour of the Nigerian talc varies from white through milky-white to grey. The talc industry represents one of the most versatile sectors of the industrial minerals in the world. The exploitation of the vast talc deposits in Nigeria would therefore satisfy not only the local demands but also that of the international market as well.

The national demand for table salt, caustic soda, chlorine, sodium bicarbonate, sodium hydrochloric acid and hydrogen peroxide exceeds one million tones. A colossal amount of money is expended annually to import these chemicals. There are salt springs at Awe (Platue State), Enugu, and Uburu ( Imo State), while rock salt is available in Benue State. A total reserve of 1.5 billion tones has been indicated. Government, to ascertain the quantum of reserves, is now carrying out further investigations.

In the same vain, large bentonite reserves of 700 million tones are available in many states of federation ready for massive development and exploitation, over 7.5 million tones of barite been identified in Taraba and Bauchi states, and an estimated reserve of 3 billion tones of good kaolinific clays has also been identified.

Gemstone mining has boomed in various parts of Plateau, Kaduna and Bauchi States for years. Some of these gemstones include Sapphire, Ruby, Aquamarine, Emerald, Tourmaline, Topaz, Gamet, Amethyst, Zircon, and Fluorspar, which are among the best in world. Good prospects exist in this area for viable investment. Understanding that this sector requires urgent investment, the Ministry has directed miners who are still in small artisan levels to form cooperatives so as to benefit from World Bank US$10 million assistance. Apart from this, three Nigerian Banks have also established solid minerals desk with fund of over US$ 8 million each for the development of the sector.

Foreign investors will find this sector worth-investing on as Nigerian governments have put in place various incentives and strategies for investment such as 3-5 years tax holiday, deferred royalty payments, possible capitalization of expenditure on exploration and surveys, extension of infrastructure and provision of 100% foreign ownership of mining concerns.

Recognizing that only a sustained macroeconomic environment and a sound and vibrant financial system can propel the economy to achieve the country's desire to become one of 20 largest economies in the world by the year 2020, on the July 6, 2004 the Federal Government through the Central Bank of Nigeria (CBN), under the leadership of its Governor, Professor Charles Soludo launched a 13-point reform agenda to restructure, refocus and strengthen the Nigerian Financial System. To complement this agenda, another comprehensive long-term reform agenda for the Financial System (the Financial System Strategy 2020-FSS2020) was launched. The grand objectives of these agendas are substantially being achieved. The country financial system now comprises of strong, efficient and internationally competitive banks with an eye for global markets, a capital market with highest returns on investment, in dollar terms, a sound and rewarding insurance industry and other competitive financial participants.

Gordon was right in his submission to have described Nigeria as the most dynamic market in Africa. His view that "foreign investors, who will be patient enough to weigh the Nigerian Financial System on the credit risk perspective relative to the global event, will find the nation's financial sector more interesting to invest and raise funds from" x-rays the truth about the country's financial sector.

The country's banking system is the safest and the soundest it has ever produced in history. It is the fastest growing banking system in Africa and one of the fastest in the world. In fact, the most outstanding contribution towards realization of the country's dream came from this sub-sector. Economic analysts have observed that it has taken Nigeria less than 3 years to achieve what it took South Africa 20 years to achieve in the area of banking. In a short word, a world-class banking system has emerged in Nigeria.

Statistically, banking sector contributes 10 per cent to the Gross Domestic Product (GDP) and represents 60 per cent of the stock market capitalization, while there was a reduction in the number of banks from 89 to 25, the number of banks branches rose by 33 per cent from 3383 in 2004 to 4500 in 2007. The total asset base of banks rose by 104 per cent from $ 26.8 billions ( 3.21 trillion naira) in 2004 to $54.7 billion ( 6.56 trillion naira) by mid 2007; capital and reserves rose by 192 per cent from $2.72 billion (327 billion naira) to $7.98 billion ( 957 billion naira); capital adequacy ratio rose by 42.6 per cent, point from 15.18 per cent to 21.6 per cent and ratio of non-performing loans total loan improved massively by 51.3 per cent, point from 19.5 per cent to 9.5 per cent. The sector has also remained one of the most profitable in the country's capital market. It was noted that 13 out of 21 quoted banks on the Nigerian Stock Exchange recorded returns in excess of 100 per cent since January 2007.

According to the April 2008 edition of the African Business, (the best-selling Pan-African Business Magazine published in London) 18 out of 28 West African Companies with market capitalisation of more than $1 billion are Nigerian Banks. The magazine stated that First Bank Nigeria Plc with market capitalization of $7.4 billion remains the largest company in West Africa. Two other Nigerian banks namely Intercontinental Bank Plc and United Bank for Africa (UBA) remain the second and the third largest companies in the sub-region with market capitalization of $6.2 billion and $4.6 billion respectively.

Apparently, the rising tide of banks in the country from all indications has made the sub-sector very attractive, not only to local investors, but also to foreign investors, and in particular, foreign banks. For instance, the consolidation of Regent Bank, Chartered Bank and IBTC to form IBTC Chartered Bank attracted the interest of the Standard Bank Group, the largest financial institution in Africa with a market capitalization of $ 17.8 billion, whose subsidiary Stanbic Bank, also of South Africa has just sealed a Merger deal for the latest Merger in the country, Stanbic IBTC Bank Plc. In this direction, other foreign banks have started making enquiries with CBN of a possible Merger or take-over.

To further substantiate the opportunities the banking sub-sector offers the global investors, a cursory look into Intercontinental Bank Plc will reveal the success of banking system in the country. Intercontinental Bank Plc is known to be the second largest companies in West Africa to have recorded a phenomenal growth in gross earnings, which stood at $1.45 billion ( 173.5 billion naira) in 2008. This is an increase of 99 per cent over the $728 million (87.4 billion naira) in 2007, profit after tax grew by 102 per cent to $380 million ( 45.6 billion naira) as against $188 million (22.6 billion) in 2007, while the capital base rose to $1.67 billion from $1.31 billion. The bank deposit base soared to $8.75 billion ( 1.05 trillion naira), an increase of 126 per cent from $3.9 billion (468 billion naira) in 2007, while the total assets also recorded a quantum leap to $14.2 billion (1.7 trillion naira), representing a growth of 108 per cent from $6.86 billion( 823 billion).

The bank is also in strategic partnership with BNP Paribas, the world leading energy financing bank, Afrexim Bank; Export Development Canada (EDC); Finance for Development (FMO); China Exim Bank; Export-Import of United States; International Finance Corporation in financing projects in different sectors of the economy. However, it is relevant to say that the success recorded by Intercontinental bank is a good example of the Nigerian banks' strength and prospects, and a testimony to opportunities available to global investors in the country' financial sector.

Apart from the above, Nigerian Capital Market offers viable opportunities as it is positioned to help companies to raise capital, and to generate high returns on investment. Its total market capitalization has grown by over 4000 per cent to $100 billion (12 trillion naira) in March, 2008, up from $2.39 billion (287 billion naira ) in August 1999.Among emerging markets, the Nigerian Capital market remains one of the most viable in terms of returns on equity. Historically, the market has delivered 28 per cent returns.

Insurance industry is not an exemption to this growth and development the country's financial sector is witnessing. Although there are few black spots on the regulatory handling, the industry has equally recorded success in their reforms and operations. With the inflow of robust capital, insurance companies are now faced with the challenges of delivering returns to shareholders, maximizing value and exploring overseas markets. Their presence can be felt in countries like Ghana, Liberia, Sierra Leone, Sao Tome, South Africa among others.

Although Goldman Sachs' report titled "New Market Analyst" with issue number 08/09 released on March 13, 2008 (cited in the Thisday newspaper March 19,2008) posited that Nigeria is a better economy than South Africa, International Monetary Fund (IMF) reported that Nigeria and South Africa got close to 50 per cent of the $53 billion private equity and debt flow to Sub-Saharan Africa in 2007. This underscores the growing confidence of International bodies and foreign investors in country's financial sector and economy at large.

Furthermore, Fitch Rating Agency and the Standard and Poor rated Nigeria BB-(minus) in the area of sovereign credit, high in development of local currency debt market, and low in the areas of debt to GDP ratio and inflation. The opportunities for growth in Nigeria financial sector are still strong as the underlying fundamentals driving the growth are still present. All these and more, position the financial sector and the country at large as a leading and most dynamic market in Africa and present viable investment opportunities to global investors.

Needless to say that the opportunities presented above are typical examples and an evidence of opportunities awaiting foreign investors in other sectors of the economy.

Nigeria is the largest producer and exporter of oil in Africa (although recently placed second behind Angola in the latest OPEC report as a result of Niger Delta Crisis) with a production of 2.5 million barrels and above a day. Besides, the Nigeria is the 7th world's gas reserve holder and the highest flaring nation in the world, with the potential to become a major player in LNG export. It has annual gas flares' capacity to generate over 12000 MW of electricity needed to catalyze the growth of any economy. Although it currently flares an average of 1.2 TCF of gas annually, the sector has the potential to generate great returns on investment.

One of the greatest opportunities awaiting foreign investors is Real Estate / Property. For instance, Lagos Metropolis with a population of about 18 million has attained mega city status. The State has one of the highest urbanization rates in the world according to the World Bank. Consequently, there is an insatiable demand for housing delivery, which has necessitated the introduction of the New Private Estate Developers Scheme. Under the programme, the government will make large parcels of land ranging from 1 to 25 hectares available to corporate organizations capable of undertaking development and delivery of housing units. Such organization must however demonstrate that they have the financial capacity and technical expertise to deliver quality and affordable housing units.

Among other sectors of the economy that foreign investors will find viable and worth-investing on are Transport, Sport and Entertainment, Tourism, Power and Steel, Export Processing Zones, Privatization. And available records reveal that the rate of returns in these sectors is as high as in the sectors discussed above.

Apart from the opportunities mentioned above which our office is strategically positioned to maximize opportunities for the benefit of prospective investors. We also offer consultancy services in the areas of general management, manufacturing, marketing, finance and accounting, personnel, research and development, packaging, administration, international operation, specialized services and other value-adding services. And our strategic partnership with national and international companies put us in position to deliver quality service and high returns on investment.

Nevertheless, there have been fears raised by international observers, agents and bodies that Nigeria is a high-risk nation for investment and other business transactions. This development is attributed to security, multiple taxation, epileptic power supply, bad roads and poor work environment.

It may appear that doing business in Nigeria is challenging because of the activities of a few untrustworthy Nigerians who are unscrupulous. But such are simply characterization of human nature; as it can be found anywhere else in the world. It must be said emphatically that the world has been biased in their judgment and treatment of Nigeria security issue. There have never been terrorist attacks, suicide bombings or kidnapping until recently when the issue of Niger Delta came on board.

Niger Delta region-the source of nation's oil wealth- has become an area of perennial tension, agitation, and recently, militancy. However, a confluence of factors such as environmental damage by oil exploitation, failure to develop the region, lack of job opportunities and sense of deep deprivation from the low share of derivation revenue accruing to the states in the region, has led to the present situation. Acknowledging their situation, the Federal Government has organised a Summit, to be chaired by Professor Ibrahim Gambari, the United Nations Under Secretary General, to provide everlasting solution to the crisis. Frankly speaking, Nigeria is a safe and investment-friendly place and Nigerians are accommodating and industrious.

Cyber Crime is another fearsome crime, which often put-off prospective investors from involving or investing in the business opportunities in Nigeria. This crime was actually imported into the country by expatriates. It has never been part of Nigeria culture. It is perpetrated by a few section of the population. Their operations are carried out via Internet and their targets are people who transact business via the medium. They pose as government officials and sometimes as businessmen with United Kingdom identity who deal in digital products. However the list of their tricks and operations is not exhaustive. With the help of Economic and Financial Crime Commission (EFCC), Independent Corrupt Practices and Related Commission (ICPC), and other Anti-Criminal Agencies, Cyber Crime and their perpetrators are under control and disappearing.

The grand objective of the present administration, as encapsulated in VISION 2020, is to make Nigeria a major industrial and economic power, and one of the 20 largest economies in the World by the year 2020 by providing enabling investment and business environment and maximum security for active participation of local and particularly, foreign investors. The realization of these aspirations had informed the radical and pragmatic reforms designed to increase the attractiveness of Nigeria's investment opportunities and foster the growing confidence in the economy. In this direction, the Federal Government has provided incentives and strategies for investment such as 3-5 years tax holiday, deferred royalty, possible capitalization of expenditure and provision of infrastructures such as road and electricity, just to mention a few.

African economy is witnessing the strongest growth in 30 years; no doubt, Nigeria is one of the major contributors to this development. Most commentators have observed that the opportunities for business and investment in the country look increasingly rosy with GDP growth of 7 per cent in 2007 and 13 per cent in the next 12 years. The International Monetary Fund (IMF) forecast of 9 per cent growth rate for Nigeria in 2008 (which is second to India 10 per cent and ahead of China 8 per cent) lays credence to their observations.

Furthermore, the increase in Foreign Direct Investment, the entrance of multinational companies, the strong financial sector, the favourable and tremendous business environment, the government support, the abundant natural resources, and the population of over 140 million people, among others, put Nigeria in a comparative ( and possibly absolute) advantage over other African countries.

Just as it is difficult to ignore China as a market in the global arena, (one out of every five persons in the world is Chinese) so is it very difficult to ignore Nigeria as a market in Africa (one out of every three persons in Africa is Nigerian). With a population of over 140 million people and its economic potential, Nigeria still remains Africa most important market.

IMPACT OF GLOBAL FINANCIAL CRISIS IN A DEVELOPING ECONOMY

Unlike China and India, African economy(developing economies) is yet to be integrated into the world economy. This is as a result of slow rate of integration and globalization at which the economy is being fixed into the global economic and financial system. Consequently, developing economies will only suffer a limited financial impact from the credit crunch. However, this is not to say that developing economies are in isolation and totally free from the crisis.

To grant a point, this paper will continue to use Nigerian economy for its analysis as it represents a paradigm of a developing economy with valid and considerable variables.

According to the report from a recently concluded Bankers Committee Meeting, which ended on October 20 th, 2008 , the Nigerian banks are safe as they operate at 22 per cent capital adequacy ratio( 14 per cent above the world 8 per cent requirement) and the financial sector is far from being affected by the current global financial crisis. The report also posits that any bail-out scheme is unnecessary as the situation that warranted bail-out schemes in developed economies- poor quality assets and heavy loan losses resulting from exposure to inadequately collateralised mortgage loans- is absent in Nigeria. To underscore its point, the report noted that, as the Direct Foreign Investment in Nigerian banks is comparatively low and the banks connection with their foreign counterparts is loosely fixed, the impact of the crisis will be limited and indirect.

Conclusion

The words of Mr. Dominique Strauss-Kahn, the Managing Director of International Monetary Fund, at a meeting in Washington D.C are the corner stones of the concluding thoughts of this paper. He stressed as follow:

We meet at an extra-ordinarily difficult time- a time of uncertainty and insecurity, with a danger that those fears push us away from- not towards- a more inclusive and sustainable globalization....At its best, multilateralism is a means for solving problems among countries, with the group at the table willing to take constructive action together. When multilateralism is dysfunctional, globalization can be a Babel of Tower, with competing national interests colliding to benefit none. The new multilateralism, suiting our times, is likely to be a flexible network, not fixed system. It needs to maximize the strengths of interconnecting actors, public and private, profit-making and civil society Non-Governmental Organisations (NGOs). The multilateralism must respect state sovereignties while solving interconnected problems that transcend borders...The private sector cannot restore confidence on its own. Macroeconomic policy measures by governments cannot restore confidence on their own. Piecemeal measures on financial markets will not restore confidence on their own. What will restore confidence is government intervention which is clear, comprehensive and cooperative among countries..The world must act quickly, forcefully and cooperatively to contain the ongoing financial and economic downturn.

Thus, the position of this paper is that the confidence will only be restored if "government intervention which is clear, comprehensive and cooperative" is complemented with investment in developing economies with less or no crisis impact as "flexible multilateralism" and cooperative and sustainable globalization is solution that suits our time, not" economic isolationism".

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