In this morning’s cut-out of our core strategy document – The Nigeria Strategy Report, we focus on the major themes that steered consumer prices over H1 19 and delineate our outlook for inflation over H2 2019.
Consumer prices ticked up by 5bps to 11.32% over the first half of 2019, mirroring the conflict induced increase in food prices in Q2 19. For the first three months, inflation maintained a downward trajectory, followed by an unanticipated rise in farmers-herdsmen conflict which changed the inflationary trend in April and May. Eventually, the tide calmed in June as the anticipation of a favorable harvest season drove an increase in market supplies. Consequently, inflation declined in the month of June. Looking at the components, food inflation ticked up by 34bps to 13.58% YoY mirroring the telling impact of conflict in the north and seasonal increase in food prices. At the other end, the core basket maintained a downward trajectory, declining by 53bps to 9.39%) following NNPC’s drive to leave petrol prices unchanged at N145/litre.
Over the rest of the year, we foresee the current administration would retain its socialist modus operandi, limiting the downside risk to core inflation. That said, we shift our focus to heightened tensions in the north which took a toll on food inflation over the first half of the year. Continued efforts to resolve the tensed security condition in the Northern region and reduced risk of flooding relative to the prior year, limits the downside risk to food inflation in coming months. According to FEWSNET, markets are expected to remain well supplied during the lean season through September. Further amplifying the market supplies is the main harvest season which will begin in October with favorable harvest expected in the last two months of the year. That said, we expect average inflation rate to print at 11.2% YoY (2018: 12.2% YoY).
Competition gradually blighting the Food business.
• Central to the Q2 19 earnings of Nestle and Unilever is the telling impact of increased competition in the food business and improved input cost management. For Nestle, EPS grew 4.3% YoY to N16.90 due to gains from increased local sourcing of raw materials and higher sales. On the flipside, having restated its Q2 18 financials, Unilever reported 30% YoY decline in EPS to N0.35 reflecting increased input and finance cost following exchange rate differentials relative to prior year.
• Over the rest of 2019, we expect normalization in margins for both companies while we expect the competition from other brands to remain drag on sales. However, after adjusting for the improved cost management over H1 19, we raised our NESTLE FVE to N1,447.39 which translates to an OVERWEIGHT rating. Nestle trades at a 2019P/E of 23.01x, relative to Bloomberg MENA peers of 15.49x. Elsewhere slow recovery in revenue guides our downward revision of Unilever FVE to N31.95 (previously: N35.82), which translates to UNDERWEIGHT rating. Unilever trades at a 2019 P/E of 26.1x relative to Bloomberg MENA peers of 16.1x.
• Food business faces increasing challenge: Amidst flat pricing, competition in food business from smaller seasoning brands (Ginomax, Terra cubes, Onga cubes) became more apparent over Q2 19, with both companies recording low to mid-single digit growth in revenue, relative double digit recorded in prior years. To begin, Nestle’s revenue from the food business grew by just 1.6% YoY over the review period. However, support from its beverage business drove the 4.6% YoY expansion in its overall revenue. Elsewhere Unilever’s revenue recovered from a downbeat in Q1 19, with food business expanding by 6.3%, following the measures put in place to drive topline. To clarify, we recall management’s guidance during its Q1 19 conference call to drive sales by partnering with banks to provide liquidity to its distributors. However, persistent struggle in the HPC segment drove overall revenue lower by 1.7% YoY to N23.4 billion.
• We are positive on Nestle: Nestle still posted a modest performance notwithstanding the tensed environment, due to savings from its cost. Elsewhere, exchange loss worth N219.5 million, recorded in Unilever’s finance cost coupled with input cost pressure drove earnings lower. In coming quarters, we expect the competitive environment to remain unchanged, albeit with a normalization in gross margin. That said, gains from improved sales and lower cost is expected to support growth in Nestle FY 19 EPS by 26.5% YoY to N68.7. On other hand, Unilever’s EPS is expected to decline by 22.9% YoY to N1.23 due to struggling sales, impact of currency convergence on its input cost and less shield from its finance income, given its lower cash balance.
It feels good when it rains and the atmosphere looks fresh and exciting As much as the rainy season brings joy and freshness, there is also a healthy impairment of people.
Due to excessive moisture in the rainy season, the biggest fear of the spread of flu, malaria, bacterial, and viral diseases remains. However, there are some tips which help you to stay healthy, away from these diseases in the month of this rain.
1. Wash your hands properly
It is very important to wash hands regularly in the month of rain. We go to many places, meet many people, touch many things.
Someone else may have some infection, and you have contaminated with them, or you may have been sitting on a bench with bacterial or viral infection or someone affected by disease touched that thing. So regularly wash your hands with lukewarm water and soap.
2. Do not touch your face repeatedly
Most bacteria and viruses penetrate our body through the mouth, nose, and eyes, so do not touch your mouth again and again in the rainy season.
Do not wander on your head repeatedly, or turn your hands on the face, keep a napkin or handkerchief with it and use it.
3. How to avoid dirty water
It is normal to see filling gutters and pits with water in the month of rain. Due to the accumulation of water, diseases related to water are generated, such as diarrhea, influenza, cholera, and fungal skin diseases.
Always drink boiled water in the month of rain. Use raincoats and umbrellas as soon as possible. Do not get too wet in water and if possible, use rubber shoes to avoid dirty water.
4. Do not eat outside
If you are afraid of getting the disease, they never think to eat outside. Do not even think of eating food on the road side this month. Those who are fond of eating fast food know that most bacteria and viruses are produced in the month of the rain in hotels and canteen food.
Eat fresh and clean food made in the house as long as possible and stay agile in the month of rain.
The Entrepreneur Betting On A Billion Industry From His Quiet Town
Every week, Zikoko seeks to understand how people move the Naira in and out of their lives. Some stories will be struggle-ish, others will be bougie. All the time, it’ll be revealing.
This week’s story pulled off in collaboration with Payday Investor. Before you start to make plans about your next salary, click here.
When was the first time you made any money?
That’s an interesting question because I didn’t make money until I was in my final year at school. I had this friend that cared very little about money, and life, so he drank a lot. But he was a really great artist.
So I got the info that one government house where I had a friend was renovating, and somehow, I managed to make a case for an artist to come make murals across the government house.
On the other end of things, my dad gave me ₦50k to pay my school fees. And what did I do, I carried that money and used it to buy materials for my friend.
He went on to do the work. In three months, we got paid – ₦2.5 million.
₦50k to ₦2.5 million. That is quite the start.
I gave my guy one million. Paid my school fees. Then I spent about ₦800k on getting people to make noise about it – PR in some of the right places. That fetched us other gigs that brought in about ₦1.9 million.
Woah.
Some people at the Government house took an interest in me. The best thing about working with people in government is the access it gives you. Meanwhile, I started looking for what to do with all that money, so I invested some of it in stocks and acquired some land. Pushed that into Agric.
Sounds robust. What happened next?
I applied for YouWin in 2014 and got a grant of ₦6.5 million. It was actually a partner and me.
My partner was the admin and comms guy while I was away, and I was the technical guy.
How did the Fonio business go?
First of all, Fonio, or what we call Acha locally, is a kind of grain. It used to be really popular, but it didn’t get all the love that Sorghum, millet and co have gotten. What we wanted to do was experiment with Fonio in more consumer-friendly forms. We tried it in baking and different recipes. So we developed a packaged product.
Interesting
We got the money in tranches, and the first one was about ₦1.9 million. The first thing we bought was some equipment. There was a kind of dryer we wanted to buy, but it would have cost us about ₦1.5 million locally to bring it here. So I carried my mechanical engineering sense, and we fabricated locally. That cost ₦500k.
We didn’t want to wait for all the money, so we got started immediately. Took the rest of the money buying tons of Fonio from local women, dehull, wash and package.
The value we were trying to add was taking it quicker to consumption.
What’s the demand for Fonio?
It’s a resilient crop, and it requires no fertiliser. People use it for various things, like pudding, swallow, and even baking. People also tend to encourage it as a healthy alternative for diabetic people. But, Fonio doesn’t get as much love as you’d expect. It’s not so popular in Nigeria, so while we believed we had a great product, there was one problem – advocacy.
Now, to make a product popular, you need to make a lot of noise about it. When you make noise about it, your increase demand. But that costs a lot of money and resources.
What came next?
I started to experiment with other stuff and gently ease out of full management of Fonio. Somehow, I found my way back to an old obsession – Coffee.
I live in Jos, and because our climate is unique, coffee grows here. I had a coffee tree from about 15 years ago. I’d roast the beans for my dad, and he’d give feedback and I’d improve it.
In 2017, I decided to give it a shot. I actually tried to go at it from scratch – so I threw in one careless ₦5k.
Then I started going to people who had farms and buying berries from them. Buy, process, roast, sell. And slowly, it grew. By October, we’d done about 800k in revenue. The profit was just about 380-something-k.
The biggest struggle that year though, was that when I started buying coffee, a lot of them were bad. So I started researching more about how to properly treat coffee better, and transferring whatever I learned to farmers.
₦380k? I’m not sure that was enough to sustain you.
So, because I was researching more than most people, that also created another opportunity. I started consulting for other farmers, and someone even asked me to help him co-manage his plantation. It’s sitting on about 50 hectares of land.
I believe there’s a growing coffee culture in Nigeria, and I want to be a part of that. Especially because the coffee we brew is not only fresh – a lot of imported coffee is stale – and it’s homegrown.
If you ask me about numbers, I can assure you that I know very little about those things. My wife was the one managing my finances, while I just focused on making my roast better.
Ask my wife, please.
Fair enough.
Hello, your partner asked me to ask you about money, because he doesn’t seem to know much about it.
Hahaha. Very good. I actually started keeping records in July 2017, because there needed to be a system that showed progression and tracked growth or something. There was no evidence that there was growth, because we weren’t tracking anything. He’s passionate, but passion is not always enough to run a business. If you have passion but no skills, it dies.
Word.
In August 2017, it was ₦50k. These days, it can fetch many times that amount on very good months. In March, for example, we made up to ₦400k in profit.
That is interesting.
Yes, that’s more than the entire 2017 from selling coffee alone. We tend to re-invest a lot of it in materials, from the coffee beans to the packaging. Also, because you don’t harvest all year round, we invest in buying a large amount of coffee beans.
So, what’s the most important lesson as an entrepreneur?
First of all, hunger is super important. I think entrepreneurship forces you to improve, make things better, and do things differently.
It is also forcing me to work on my personal discipline; in finance, in relationships, and everything –
Her: – he still needs to hire someone to manage his books. I can no longer do it because my 9-5 job is taking my time. There needs to be someone to actually pay him a salary. That forces him to be more accountable.
How much salary do you think you’d earn as an entrepreneur in 5 years?
Him: Using today’s value, maybe ₦100k?
Her: Add more.
Him: Okay, ₦250k. I think what is most important for me is that we have a strong place in the new coffee culture in Nigeria in the next 5 years.
Entrepreneur or not, bills need to get paid. How’s that going?
First of all, the most important one is rent, and ₦250k per year fetches us a really good 2-bedroom. I hardly go out much, except I have to go and get materials. That means I don’t spend a lot on transport. Last-last, ₦50k is enough for a good month in Jos.
Minus your business, what other investments do you have?
Her: Right now, we’re actually looking into doing mutual funds, my sister is a heavy investor in mutual funds. I’m considering it too though. Aside from that, I also invested in a farm with my parents. It’s about 9 hectares of Rice and Soya Beans.
When do you think you’ll retire?
Her: My husband said he wants to die at 85, so that he doesn’t turn to anybody’s problem. Hahaha.
Him: It’s too much?
Her: Too small. Anyway, you’ll be too troublesome then. Him: By 60, I’m done with work. Then I’ll be travelling, and having the time of my life.
What was the last thing you paid for that required serious planning?
A van – to be honest, it’s still in the works. My farm is quite far from the house, so buying a van will help me move produce fast.
What’s the most annoying thing you’ve paid for recently?
We paid for coffee, and they gave us bad coffee beans. We had to return it, and they didn’t pay back for up to a year. A loss.
Do you have an emergency plan for weird things like health emergencies?
Her: We were actually talking about that yesterday, I think we’re going to do it with one of these apps.
Happiness levels, 1-10.
Her: To be honest, we’ve not reached where we want to go.
Him: Yep. But I really don’t feel like I’m struggling, I even have room to give a lot. So, I’m really good.
Every week, we ask anonymous people to give us a window into their relationship with the Naira – their secret Naira Life.
This week’s story pulled off in collaboration with ARM Investment Managers. They have a diverse range of Mutual funds for everyone looking to give investments a shot, from the beginners to the veterans. Find out more.
When was the first time anyone paid you money for work?
200-level. I used to sell cooked noodles in the hostel. I wasn’t really keeping track of the numbers, but I just needed extra cash to add to my pocket money from home – the money my dad was giving me wasn’t enough –10k. Then I started looking for what else students needed but couldn’t get. Our school was remote, so I started selling headphones and memory cards because everyone needed it and couldn’t travel far to get it.
This was 2009. I had outlandish dreams of what University was supposed to be; a place where everything was possible and all that. Well, that was the year that dream died. I just focused on the practical courses and coasted through the abstract shit.
First Semester in 300-level, I first saw Photoshop on someone’s computer in an Entrepreneurship class. Not too long after, I went to meet this guy in my hostel and asked for the full Adobe Suite. Next thing, I’m installing. Next thing, I’m looking for tutorials.
By the next morning, I was going round the hostel, showing everyone what I’d just designed; my first logo ever.
By 400-level, I was just about that selling phone life. I sold up to 20 phones then, most of them Blackberries. I tried to pick out fancy Blackberries – the white ones, the purple ones, the red ones. Just the colourful fancy stuff that I knew they’d like. Everyone wanted to stand out.
What came next?
I went for NYSC in the Southeast in late 2012, but I was getting gigs from Twitter, a logo here, a poster there. I even helped a rapper design the cover art for his song. One of your faves. It was a hit too.
How much did he pay?
EX-PO-SURE.
That wasn’t what I asked for though.
Anyway, NYSC was giving me ₦19,800, my place of assignment was giving me ₦10k. Those random gigs were probably giving me ₦5k per month. I remember that time, I’d send the logos and everything to the clients from the really bad Internet on my phone. I lived in a village so ₦10k a month was enough. I saved the rest and bought two budget smartphones – one for myself and one for my mum.
Post-NYSC?
I was jobless for like 6 months, in the true sense. Then one day, my dad came and said his friend wanted someone to take photos and design flyers for his hotel. The man paid me ₦10k, it was also the first time I saw my work in print.
Around that time, my mum was like “why don’t you apply at a bank or something instead of staying at home? What if you never get a job with this your design thing.”
Mummy, I’ll get.
You can’t work in a bank?
I can. But getting hired in a bank back then mostly meant you had to sit all day at the desk attending to deposits and withdrawals. I didn’t want that.
I had one more cousin staying with us who was also unemployed, so that kind of took away some of the pressure. One some days, I was focused on becoming a better designer and not staying idle. On other days, I was sleeping for the entire day.
To be honest, I was purposely not applying for jobs that she wanted me to apply for. I was looking for advertising agencies. Since Uni, I was really obsessed with having my work on a billboard one day.
So, your first full time gig?
Late 2013. I applied to this music blog, and the owner offered ₦40k in the first month. By the second month, he told me “guy, I honestly can’t afford to pay you. These ads don’t seem to be coming. I’m sorry.”
And that one ended. He was a nice guy though.
After that, I was jobless again for a few months. Then a friend introduced me to this small agency that needed a graphic designer. I took the test, got in, and they started me at ₦50k. About four months into that gig, I went to a small Ad school, and in our final branding task, an agency saw my work and they made me an offer.
So I joined this new agency in late 2014, for ₦150k a month. Payroll issues and they had to shut down business after about 6 months of joining, while still owing two months of salary.
Did they pay up?
They did, a year and a half later. In the time being, I was back to just random freelance gigs after they couldn’t pay, but that lasted for about 2 months. Another friend called and said a Food Processing Company was looking for a Graphic Designer. He told me the offer was ₦200k. I jumped on it straight up.
I went to the interview with my deadbeat laptop, and these guys needed to see my work. The question was, how quickly can I show them all my work before this laptop goes off like a TV. The laptop managed to come on, and you know what they were most interested in?
What?
My personal experiments. I knew I’d gotten that gig the moment they saw those. Oh, and just as we were wrapping up, my laptop tripped off. Hahaha.
Sha, they made an offer of ₦150k for my probation period. I said I wanted ₦170k at least, but they told me I’d get a 200k bump after probation.
First of all, HR delayed, and when my raise finally came, it was ₦170k I received. And I’m like what’s this nonsense?
That’s when I learned the difference between net and gross salary.
Anyway, I’d already gotten into the job, designing all kinds of things for cartons, to buses, and even the one I’d always wanted, billboards.
One year into the gig, I asked for another raise. I legit wrote a list of everything I’d been doing:
When the brand manager left the company, I had to stand in as Brand manager, working with them to create jingles and all that.
I got that raise. ₦250k, net. Can’t fool me twice.
This was 2016. All this while, I was still doing freelance gigs, but they weren’t as intense, because I was putting everything into the work at the time. So there wasn’t really time for me to actually do them.
Still, freelancing was bringing in another ₦50k every other month.
By 2017, I started learning animation. Besides that, the year was pretty meh workwise. Also, I started learning how to shoot properly in 2017. I actually picked up shooting at work the previous year, but 2017 was when I was experimenting in the wild. I interned on the set of a movie – it never got released though
2018?
I got another raise towards the end of the year – ₦300k. Worked on another film set. I really just wanted to learn. Then I directed a short film. I actually planned to shoot two short films, but I didn’t have the time – work, relationship. Generally, I think relationships are emotionally, physically, and financially expensive.
Fast forward to 2019, I started getting better at animation and getting more freelance gigs. So to get better, I started an internship. One class a week. Add Youtube tutorials to that. Add two other online courses. 2019, I’m also going to learn code, because if you’re going to animate for web, you need to learn code.
What’s your most important perspective on money, between 2009 and now?
Money is the bread and butter of this world, and there’s no living without it. People are in denial of how important money is. People will tell you to follow your passion, but they won’t teach you how to make money. We go to school to learn about everything, everything but money, which is like the most important thing, post-school. They teach Entrepreneurship, but they should also be teaching personal finance. It’s why we’re all so shit with money.
People shouldn’t be shy talking about money. If you need help on how to make money, say it.
How much do you feel like you should be earning every month?
₦700k, at least. That’s the value I’ve put on my diverse skills at this point in this market.
Let’s breakdown that monthly income.
My monthly income is at about ₦450k if you add side hustles. This is what an ideal month looks like:
We haven’t accounted for ₦36k.
Eh ehn? Wait, what am I using this money for? Omo, I dunno o. Maybe that’s my own lau-lau.
When was the first time you sent money to my parents?
I used to send money to my mum, but you see my dad, he’s a very proud man. I assumed he was getting his pension, then my mum told me “he hasn’t started receiving his pension. They keep postponing and postponing, but really, nothing is coming in.”
So I sent him money. ₦30k. He was so emotional and thankful, and told me how it was going to go a long way with some family stuff. This was in 2017, and since then, I’ve made it a duty. It’s been everything from car trouble to school fees. I’m just thankful that I don’t have any other responsibility.
Then there’s the random ₦30k’s to people who are really in a tight spot. Whenever I’m in a position to help, I just step up.
Explain this savings things for me please.
My ₦250k first lands in my savings. I tend to save for stuff I need to pay for, or stuff I need to get. Like rent, or a laptop. My rent is actually fair, ₦300k. So there’s that.
I tried investing in an agric business, but I missed the window. I also have some other long term investments, like stocks. I haven’t tried any other investments.
Why haven’t tried any other investments?
I wanted to try Mutual Funds. But I was unsure about it.
You know how Mutual Funds work?
Not really.
How much do you imagine you’ll be earning in 5 years, and how did you arrive at that number?
1.2… 1-point… ₦1.2 million at the very least (using today’s estimates). It’s mostly because of the skills I have and I’m trying to acquire. And the confidence to even call this amount is because with the skills I’m looking to acquire, there is global demand.
Wait, how much is $6000?
About ₦2.2 million.
Yes. That’s the amount, at least. There’s a price chart for motion designers in the US. The pros earn like $300k a year. On average, I should be looking at $7000 per month, but that -1k is to solve for X, where X is the Nigerian factor.
What’s something you really want but can’t afford?
A beach house. I won’t say a car, because I really don’t find driving as a necessity. An efficient life for me will be Ubers, and Taxifies. Or carpooling. But I never get the money reach that side, so I dey jump bus.
What’s the last thing you paid for that required serious planning?
I would have said rent, but I already programmed it somehow. It didn’t really require serious planning actually. I just have this thing where I just keep rent money aside.
But serious planning would be my laptop. I paid ₦500k.
When was the last time you felt really broke?
Really broke? How broke?
What is broke for you?
Broke for me is when you’re down to your last ₦50k. Last time I felt like that was two years ago. There’s an amount of money my bank account dwindles to, that I just start to feel sad. When you have money, you’re calm. That’s why people’s voice changes when they’re rich. They take their words slowly. Because money is a nerve calmer.
Actually, this sadness starts to kick in for me when I’m down to my last ₦200k. Rock bottom is now ₦50k.
What’s the most annoying miscellaneous you’ve had to pay for?
My laptop charger. ₦30k. A bloody Macbook. It scattered. It’s one of the things that triggered me to dump my Mac. Those things are ridiculously expensive. That was also my third charger. Anyway, if you must buy a Mac, buy a surge protector.
What’s your greatest fear, right now?
It’s something coming up that I can’t afford, like a family emergency. This fear has never reared its head in any form, but I’ve had hints. Like the health from one of my parents. I’m expecting it to become a problem in the future, so I’m doing my best to delay it as much as I can, by taking as much burden as I can now, whenever I can.
Let’s talk about happiness. On that 1-10 scale.
About my finances? I’m at a 6-7, because I don’t have grand needs. I can afford the simple things; food, clothing, shelter, Internet, transportation. I can even afford to take a holiday. Then my family, I can afford to take care of
People tend to ignore the things they could be grateful for in the present because they want to aim higher. I get that, I also like to aim high. But I also like to pay attention and be grateful for the present. I have awesome friends. I have an awesome family. Those things are priceless.
What’s something you want me to ask but I didn’t?
“How many children will you haveee?”
Depends on how financially buoyant I am before I start popping, and after I start popping. But also, that depends on how many my wife is willing to pop. Because no be me get the bẹlẹ́. But if I could, I’d have a lot of children. I’m definitely going to be adopting too.
This week’s story was made possible by ARM Investment Managers. They want you to ask any questions you have about Mutual Funds. If you have any, ask them here by clicking; Someone always answers. On time.
Every week, we ask anonymous people to give us a window into their relationship with the Naira – their secret Naira Life.
This week’s story pulled off in collaboration with ARM PENSIONS. Tomorrow is looking good. How’s it looking for you? Start making tomorrow look good by making the right calls today, by clicking here.
When was the first time you earned money?
A scholarship when I was in 100-level. The money wasn’t coming to me – it was going to my dad’s account – but it was in my name. That’s the first money that’s ever come in my name. 220k a year.
But besides that, I didn’t make any money in Uni or anything like that. No businesses and all that.
But my first salary was in NYSC – ₦9,775 – in 2009. Then the state I served was paying us ₦40k quarterly.
After NYSC, I travelled for Masters and so I was also working. This was 2012. My first job was paying £7/hour and I worked and I worked 8 hours a day – 40 hours per week. I was a cold-caller at a Utility company. Also, students were restricted to 40 hours a week. I changed jobs twice after, but by the time I was coming to Nigeria, I had about £3,000 in cash. I already invested £1,200 of the money in Nigerian stocks, mostly oil company stocks.
Why did you come back?
Marriage noni. I actually proposed not coming back, but my fiancee didn’t want to relocate. My family was like “Oh come back, don’t worry you’ll get this and that.” So I came back.
Marriage plans kicked off immediately. I think only the bridesmaids’ dresses and my wedding gowns. But I really didn’t have to spend much. My family paid for the whole thing.
After marriage, I was just chilling and getting into the job hunt vibe, then one morning, two things happened.
What?
I got an email from an auditing firm – one of the biggest in the world – emailed But then, something else popped.
Whatttt?
Bẹlẹ́. I found out I was pregnant. I really wanted to continue with the application, but when these guys interview you, there’s always the screening exercise where you run all kinds of tests. The tests were definitely going to come back with a positive for pregnancy. So I just let it go.
Also, there was some comfort in the fact that I hadn’t exactly run out of my small stash of money, so I focused on carrying my baby full term. The baby came in 2015. When my baby came, I wanted to give the baby some time before going back to job hunting.
I committed the next year and a half, and so I started job hunting in mid-2016 again. Then the recession hit.
What was your biggest struggle at this point?
First, I was doing the usual blind applications online, sending in CVs and all. My partner hustled for jobs and opportunities too. The ones that invited me for interview were like, “you’re married. How are you going to manage both? Will your husband be comfortable with late nights?”
Tragic. How were you getting money to get by all this time?
I was throwing the little money I had into a bunch of things. I invested in a family member’s poultry farm that brought in some stipends. For every ₦200k I invested, I got a profit of ₦80k in 4 months. Then allowances from my partner.
I tried experimenting in stuff. For example. I started helping small businesses with their bookkeeping and projections. Only 3 gigs came that year, 2016, and they were at ₦30k each. I tried starting a business to keep busy, but the margins weren’t good enough to earn anything from it. It really was just to keep me busy.
2017 was a drought for me. There was this company – a small financial services company – they hired me on a contract basis. So I only got paid when there was work, but I really just wanted the experience. There was a lot of free time, and I was like, “might as well drop another baby since I’m at home.”
Another one.
I kind of knew how many children I wanted to have, so might as well. I went on to have my second baby in 2018. Some months after my second baby, I got a fulltime job now paying ₦60k.
What’s happened to your perspective between 2014 and now?
Not like marriage is bad, but growth might be harder when you have to carry people along, somehow. If I wasn’t married I wouldn’t have had a child. If I didn’t have a child, I’ll most likely be earning more.
The job market, especially at entry level, has a prejudice against married women and mothers because they assume you’ll be making excuses for family and all that.
That period also showed me that I’m not a “buying and selling” person. I’d rather spend my time providing services. There’s also the part that I grew up really comfortable – there was always money. But you see this period? I learned frugality.
Let’s break down that monthly ₦60k.
First, because I’ve started working, I’m having to restock on work clothes. My partner provides for most of the big bill needs, but he still gives me money for the kids’ care. He pulls in all his weight, but to be honest, baby care money is never enough.
Then there are small debts from when I didn’t have a job. Transport is cheap because my workplace is not too far from where I live, so it’s almost negligible.
How much money do you feel like you should be earning right now?
Hahaha. ₦400k, at the very least. And that’s because of the experience I would have gained between then and now. Plus the qualifications I now have – ICAN.
Okay, realistically how much money is good money right now?
As per Frugal Master now, I’ll have enough to meet my needs and have enough to save at ₦200k.
What’s something you want but can’t afford?
A good phone, a powerful computer, and a good watch.
Do you have a pension?
Hahaha. Pension ko, pension ni. The company I work at is really small. To be honest, they can’t even afford it.
What’s the last thing you paid for that require serious planning?
My ICAN induction. I had to plan for that ₦100k because it’s not like I had any money at the time. Also, I’m currently paying for graphic design classes – ₦70k.
Design?
Yeah. I love design, video games, animation and all of that. I’ve been enthusiastic about them for as long as I can remember. When I was Abroad, I spent a lot of my money on buying game CDs – GTA V, Far Cry, God of War, Assassins Creed, Driver, etc.
Anyway, paying for it took a big hit on my finances.
Sounds like an important investment. Tell me about your other investments.
I invested in stocks, and although it made some decent dividends, it took a hit in 2016 during the recession. At some point, I had to liquidate the stocks for an emergency.
Also, there’s that farm that the family member has. But Oga farmer is no longer receiving outside investment. So I have no active monetary investments.
What’s the most annoying miscellaneous you paid for recently?
A bridal shower. Ugh. It was ₦10k, but that money was unexpected at the time.
Do you have an emergency plan for health and all that stuff?
My father. My father is my 9-1-1. I mean, my partner always comes through, but I can also be sure of my father.
What’s the scale of your happiness looking like right now?
7/10, and it’s mostly because of my kids. They’re the reason I still keep fighting and pushing to be better. They are the reason all those years don’t feel wasted.
What do you think you’d have done differently about the last few years?
I’ll use protection, first of all. I don’t regret my first child, but I’d have conceived that baby much later when I’m already working. In fact, this is the order I would have done it; get a job, then marry, then have kids.
Still grateful.
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The guy in this story has literally been trained all his life for one purpose; to fight and defend the sovereignty of his country. Doesn’t mean he doesn’t think about money or worry about it sometimes.
When did you first earn a salary?
My first salary was ₦2500 per month.
Huh?
Oh, it was 2000 when I entered JSS 1. I was 11 years old. Every boy soldier received a salary – there was the extra ₦5,500 transport allowance. It increased as we climbed classes, but somehow I can’t remember how much it was increasing by.
What school was this?
N.M.S. – Nigerian Military School.
I think NMS ingrains this spirit of independence in you, because the moment I entered NMS, I never really depended on my parents for money again. Also, it’s like they started grooming us for manhood at such a young age.
At that time, even though I was still tiny, people said I behaved like a 20-year-old.
Right after NMS, I gained admission to a regular University. But that’s not where I wanted to be.
Where did you want to be?
The NDA – Nigerian Defence Academy. I got admitted in 2009 eventually. I remember my first salary – they gathered our money for a few months and paid us ₦120k. When you resume at the NDA in October, you don’t get paid till December.
What happened next?
Moving forward, they paid us ₦28k, then they did a compulsory savings of ₦14k per month for us. When you’re passing out, they give you all the money they saved for you. While passing out, past administrations used to give fresh officers a Peugeot 206. But they were no longer giving that when I graduated.
Anyway, by the time I was graduating, I was given close to a million naira.
Mad. Freshly minted Soldier. One million bucks in the bank. What did you do with it?
Omo, I no know o. I have no idea exactly what I used that money for. I was just buying and buying and buying. I later regretted it sha. I felt I could have used that money productively.
How?
Maybe invest in property? Even if it’s to buy land in one village or something. Then maybe it would have grown in value. I was just buying wristwatches, perfumes and rubbish-rubbish things. But if it happened now, ah man done sharp.
If you no get sense for Nigeria, you no fit get sense for this life.
When did you graduate from the NDA?
2014. I remember looking at my decorated shoulder like, oh boy na me be this? Best day of my life. There’s this sense of joy I feel by just being an officer and the prestige that comes with it. There’s some access you get that even people with money don’t get.
They gave us a two-week break, and the next thing, we were at the frontlines. I was 25.
Ehn?
Yes. In the Northeast, fighting Boko Haram. I’ve spent my entire time as a soldier there. I can’t remember the last time I spent a celebration or festive season with my family. In fact, there was one festive season we were out on an operation. The town we went to was one of those towns that was once captured by Boko Haram before we recaptured it. I’ll tell you what we did: We got a goat, killed it, made barbeque, then danced, and sang. We had a really good time.
To be honest, I think not being dependent has made being away for long periods easy – it’s a mindset.
That’s interesting – the independent part. Especially since the military forces you to conform to a routine.
One thing about the military is that you have to love it. You need to train yourself to love it, irrespective of the outcomes. There will be good days, and there’ll be bitter days.
Talking about bitter, I’m curious, what’s your most bitter experience?
Ah, there’s this superior I respect a lot. We eat together and gist together. He’s also one of the soldiers who trained me – we were really close.
One time, we went on an operation. I can’t give you the full details, but there was Boko Haram, and there was heavy gunfire.
This senior officer got hit 5 times. Like, 5 actual bullets to the torso and thigh. I was watching him bleed out, and was willing to donate, but our blood groups didn’t match. In the end, he got airlifted and made a recovery. Those moments, knowing he could have been dead any moment, were really heavy for me.
Another officer I knew; they went out, and their truck got blown away by an IED. Just like that.
Personally, there’s something about constantly hearing or expecting someone to say “them dey come, them dey come” – Boko Haram that is. It stresses your mind.
In a scenario where he’d died – grateful he didn’t – what would that have meant for his family?
Someone would have made a call to his wife to tell her; the person would tell her how he fought well and died.
Then arrangements would begin for all his benefits.
What are the benefits?
When someone dies, there are different allowances they pay:
Group life insurance
Death benefits
Burial expenses, can’t remember the rest.
Also, there are educational benefits – I can’t remember all the details – for his first three children up to tertiary level. The Nigerian Army pays.
In the end, about five different allowances are accrued to your next of kin. Even if a person gets injured in battle and they have to be dismissed on medical grounds, they still get insurance benefits
You know, I think I know these things because I have a good sense of how the army works, including a lot of the administrative work that many people don’t care for.
So when I hear people say the Army doesn’t take care of the families of the deceased, I know it’s mostly lies and ignorance.
I’ve helped a friend’s family process their benefits after he died in battle.
Okay, back to you about money, what was the first salary the Nigerian Army paid you?
₦165k net. Everything else is deducted – tax, pension and health insurance. I also get an operation allowance of ₦45k every month. It’s an allowance for serving in the Northeast.
There are also other allowances – for example, if you go for a language course, that’s an additional ₦20k. I’m going to learn Spanish.
Spanish? Does this have anything to do with Barca?
Hahaha. No, I just like the language. I’m not really a football fan like that.
How could you be a football fan when you’re constantly out fighting or preparing to fight?
Ah, forget o. Some people go dey frontlines, still dey watch match, dey argue who play pass. Some people even have cable dishes hanging out of their tents when they’re camping out for long periods. You’ll see people finding all sorts of ways to hang their dishes, still watching, still buying subscriptions.
You have to make yourself happy somehow. It’s yours to defend.
Completely random, but what’s your body count?
Seriously, I dunno. I’m in the artillery, and we fire from long distances. So the orders come like, they are in so and so place, drop two there, drop one there, drop three there. My own job is to calculate the ranges and fire and make sure we hit our targets.
There was this time when Boko Haram was advancing towards a town. There was going to be a lot of fighting; we had to evacuate civilians from the place first. In trucks. It had to be quick. We told them to get on the trucks we brought before a particular time. Missing that truck was as good as missing out on life.
Because when the fighting started, artillery first, anyone who was still there after the evacuation: boom, boom, boom. Na one chance.
Wait, I need to take a call. It’s my babe…
…Okay, where did we stop?
Let’s start with her, how does she feel about you being a soldier?
I made her understand that this is my life. This has been the only life I’ve known. And she seems to be fine with it.
Okay, back to money; how has your salary increased every year?
It’s +8k every year, all things being equal.
So you already know what you’ll collect in 10 years time?
Yes. But then this minimum wage conversation might change that. So allowances are where income becomes slightly different.
Let’s talk about your current net?
Currently, my salary is ₦205k, add my operation allowance and that brings it to a total of ₦250k.
Here’s the fun part: How do you spend the money?
The first thing is, the more time you spend on the frontlines, the less money you spend. So now, the expenses tend to be the recurring things: Subscriptions, phone calls, family, and just baby boy stuff. For my savings, my babe was telling me about one of these savings apps, but for now, I use a separate account.
So money doesn’t come in from anywhere else?
Oh, I farm. Let me tell you how it started. A few years ago, I was like, what else can I do besides this my usual salary? So I started a fish pond at my base. But the problem was that, even though I made a profit on my investment, I couldn’t give it the time it needed. My time is not my own.
So I switched to crops and went to get land. I invested 200k in the whole thing: labour, seedlings, fertiliser – minus land, the Local Government gives you land if you want to farm.
I got 3 acres, and in less than 6 months, I harvested 90 bags of corn. Sold it at 8k per bag. Calculate it.
I didn’t even maximise the farm to the max, again because of time.
To be honest, my own was even small. Someone I know – a superior – harvested 150 bags of rice and 200 bags of corn a few years ago. I know a hunter who was sleeping in his farm during planting season. When he came back, he’d harvested 800 bags of beans (35k). Over 4000 bags of corn.
Eventually, I’m going to just buy more land and pay more attention to it. The Bank of Agric has made these things way easier than they were a few years ago.
There’s just so much money that can be made from Agriculture. Take for example, I bought three really big rams before Sallah season – one died – but how much did I buy them each? 10k. I’m going to put them on a trailer to Lagos. Do you know how much each of them will sell for during Sallah? Up to 60k. Remember that I’m not spending a dime on food. They’re just roaming around, eating grass.
Farming looks difficult to start, but when you get a hang of it and put things in place to minimise risk, you go blow.
What’s the last thing you bought that required serious planning?
I did Ajo for 10 months with a few people and bought a car for ₦1.5 million. I generally don’t have big expenses, well until I started planning for marriage.
Ah, Bae and Baello, how’s that going?
It’s really expensive. It’s a constant struggle because one family member makes a decision, and that decision will cost you extra money.
For example, the hall we might be using will cost ₦450k. The photographer is going to cost ₦250k. I’m trying to budget and the money just keeps increasing and increasing, meeting after meeting.
For example, when we did Introduction, her family wanted to do big things like getting an outdoor space, and calling crowd. But we resisted and all that. Do you know how much it cost? ₦500k.
₦500k for ‘Hello?’
Oh boy, it’s not easy. The lifesaver is that my babe is taking care of most of her own expenses, like bag, shoes, makeup and all that. And I’m just grateful because she’s paying for all of these from her own hustle. She told me she wanted to start selling stuff, so I gave her some money to start.
Interesting. How much did you give her to start?
₦50k. And now, na she dey reign. Whenever I need money now, she’s the one that bails me out. It’s funny how it all started. She was in school when she said she dreamt that she was selling stuff. I told her to do her research, and when she was sure she wanted to do it, I was like, I have this ₦50k I’m not using. Oya take. And that’s how it all started.
You know, I’d love to talk to your wife sometime.
Whenever you’re ready. One of the reasons I like her is that for every money she spends, she’s constantly thinking of how she can earn it back. Whenever I’m getting reckless financially, she just says Oga, you done dey do pass yourself.
It doesn’t mean she doesn’t like enjoyment, her discipline is just on point.
If you had to rate your financial happiness now, over 10.
Oh boy, 8 over 10. I can buy anything I want to buy at any time. I pay all my bills. I can afford all my needs. To be honest, the only thing that I really want that I can’t afford is a house.
When do you think you’ll retire?
I’m doing this day by day, I don’t think about it too much. That’s all.
Nobody wants worst-case scenarios, but what happens to your family if disaster strikes on the frontlines?
I think it just feels good to know that my family will be fine.
I hope you don’t have any more questions. I have to leave now. It’s a long night ahead.
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A trust is an arrangement in which an individual’s assets are transferred to a trustee to hold for the benefit of named beneficiaries. With a trust, you can not only ensure that your wealth is preserved for your son, you can even pass this wealth down through generations.
Hello Shade,
Is it wrong to name my son as a beneficiary in important documents instead of my wife? It’s not like I don’t trust my wife, it’s just that I can’t gamble with the future of my only son. What’s your professional advice please?
– Dr. Duke, Calabar.
***
Hello Dr. Duke,
I must commend your eagerness in ensuring the future of your son, rather than leaving fate to decide.
The subject of naming beneficiaries to one’s assets is one that can neither be judged as right or wrong. However, your choice of beneficiaries should not only be influenced by the prevailing state of affairs of your family, but the probabilities of such benefits extending to your actual beneficiary.
Although there are no restrictions on naming your son as a beneficiary of your assets, it is important to note that certain measures can be taken to ensure that your son does not squander assets appropriated for his welfare as a result of his level of financial maturity, especially if your son is still a minor (although not stated in your text).
I also recognise your concerns with naming your wife as beneficiary of your assets for onward transfer to your son, as this could jeopardise the chances of these assets being eventually passed to your son in a situation where your wife either remarries or is unable to complete the asset transfer during her lifetime.
Therefore, in such cases of uncertainty, a trust would be most appropriate in ensuring that your assets are effectively transferred to your son when you deem it necessary and in what proportion you may prefer.
A trust is an arrangement in which an individual’s assets are transferred to a trustee to hold for the benefit of named beneficiaries. With a trust, you can not only ensure that your wealth is preserved for your son, you can even pass this wealth down through generations.
It is my advice, therefore, that you carefully assess both options and choose which best suits your intention and family.
Derick and Raymond have been best of friends from their university days as they shared similar vision and life aspirations. This bond is evident in their career aspiration as they both gained employment in the same organization. Tenacious in realizing their ambitions, they pursued their career goals with every sense of commitment and were consequently rewarded with accelerated promotions and attractive salary packages.
Derick was advised of voluntary contributions by his Pension Fund Administrator (PFA) as an additional means of investment towards retirement. He was fascinated by the attractive benefits of having voluntary contributions asides from his statutory monthly contributions, being remitted into his Retirement Savings Account (RSA) by his employer. Basking in excitement, he decided to share the information with his bosom friend Raymond who immediately committed to the idea without further enquiry with the PFA having heard of the contingent 50% withdrawal of each lodgment retained in the RSA for a minimum of two years.
Derick unlike Raymond sought for details to understand voluntary contributions better, as an investment opportunity. The PFA official exposed Derick to the voluntary contributions tax benefit, emphasizing that as an active contributor, tax would be applied on the income earned when withdrawal is less than five years from the date the voluntary contributions was remitted into the RSA. However, voluntary contributions clocking five years and above in the RSA would be exempted from tax deductions. The possibility of tax exemptions, the option of using voluntary contribution to augment pension at retirement and other gainful benefits of voluntary contribution aided Derick in making an informed decision to sign up.
Four years down the line, Raymond was eager to withdraw from his voluntary contributions as he had dreamt of owning another luxury car and the contingency portion of his voluntary contributions would afford him enough funds to translate his dream to reality. He approached his PFA requesting to withdraw and was presented with the voluntary contribution consent form that highlighted the value eligible for withdrawal. Raymond having sighted the huge sum eligible for withdrawal, signed the consent form and applied without raising any concerns despite the PFA official’s attempt to educate him on the imminent tax benefit he would enjoy if he retains the voluntary contributions for a minimum period of five-year remittance.
Moments after the purchase of Raymond’s dream car, he embarked on a cruise with his bosom friend Derick. While on the cruise, he briefed Derick on the withdrawal of his voluntary contributions and how he expended it towards the purchase of his new car. Thereafter, Derick updated him of his plan to retain his voluntary contribution for a longer period in order to enjoy the full benefit of retaining his voluntary contribution beyond five years and possibly till retirement.
At this point, Raymond resigned to his thoughts thinking of the further benefits of voluntary contributions.
Key Highlights:
Voluntary Contributions equal or more than five years are exempted from tax.
Voluntary Contributions can serve as a viable investment option
Due consultation with your PFA would aid informed decision regarding your RSA
Embrace the voluntary contribution self-service portal for a seamless service delivery
To learn more about Additional Voluntary Contribution, visit this page.
