MANAGEMENT OF INVESTMENTS IN A DEPRESSED ECONOMY
A CASE STUDY OF THE CHURCH PRESENTED BY VENERABLE IFEANYI UMEH, DIOCESE OF AWKA AT GOSHEN ANGLICAN RETREAT CENTRE, OWERRI, IMO STATE.
His Lordship, Rt. Rev. Chidi C. Okparajiaku PhD
Chairman of Superannuation Fund
Venerable Christian Nwaka
The Fund Administrator of Superannuation Fund
Other Protocol duly observed
Introduction:
I am extremely grateful to the dynamic team of the Superannuation Fund for extending this invitation to us. The Lord shall continue to prosper His works in your hands in Jesus mighty name.
We thank God for the privilege to be trained by Superannuation Fund on Investment last year (2020) in Abuja by the recommendation of my Archbishop Most Revd. Alexander C. Ibezim PhD. Archbishop Province of the Niger and Bishop Diocese of Awka. It was as if Superannuation Fund Managers saw the future of the church with respect to the challenges of global economic quake promoted by the COVID-19 pandemic. Join us appreciate the visionary leadership of this body that invested heavily in training and empowering selected men and women from our dioceses. It reminded me of the advice of my HOD that I must run a Post-Graduate program in Business Administration and Management after my graduation as the Overall Best student in Mathematics and Statistics. Thank God that such trainings aided in modeling our lives and impacting the church of God.
As we consider the topic: Investments And Management Of Investments In A Depressed Economy: A Case Study Of The Church. We view each Financial Secretary and Accountant in this seminar as strong Financial consultant to our Archbishops and Bishops, dioceses and churches. We welcome you once more.
Definition of Terms:
Investment: The term investment is defined as the action or process of investing money for profit. To invest is to allocate money in the expectation of some benefits in the future. Such benefits in financial world are called return.
Likewise, an investment is an asset or item acquired with the goal of generating income or appreciation. Investments usually require the plunge in of money, time and efforts with hopes of greater returns of money and/ or other reward in the future.
Investment Management: Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, in order to meet specified investment goals for the benefit of investors. Management of investment therefore refers to the handling of financial assets and other investments of the investors aimed at achieving goals of the investors.
Depressed Economy: Economic depression is a sustained, long-term downturn in economic activity in one or more economies. It is a severe and prolonged downturn in economic activity. In economics, a depression is commonly defined as extreme recession that lasts three or more years or which leads to a decline in real gross domestic product (GDP) of at least 10% in a given year. Economic factors that characterize a depressed economy include: Consumer confidence decrease, investments decrease, substantial increases in unemployment, diminishing output and productivity and falling currency values. Nigeria is experiencing most of economic factors above.
Nigeria At Risk of Becoming A Failed State: A failed state is a nation or state where the government is no longer in control. The International Financial Times in her report of 22nd December, 2020 says Nigeria is at risk of becoming a failed state. It observed that our country is going backwards economically; carjacking, kidnapping and banditry are among Nigeria’s rare growth industries. It opined that Nigeria is on the brink of becoming a failed state, citing insecurity, stalled economic growth, higher poverty rate, high population growth rate and weak institutions (Judiciary, Electoral, health and education) as some of the country’s biggest challenges. It said that “Nigeria will become a problem far too big for the world to ignore if urgent and drastic measures are not taken by the Buhari administration”. We have great need for concerns as a nation.
Anglican Churches and Investments: The Church Missionary Society (CMS) advanced the gospel with education and agriculture. The Anglican mission in our time must be advanced with legitimate non-distracting investments that will sustain her missions for the present and the future.
The Executive Governor of Delta State, Senator Dr. Ifeanyi Okowa during the 3rd Session of the 14th Synod of the Diocese of Asaba urged Anglican churches to have investments that will reduce financial burdens on their members and boost evangelism. He stated, “I am glad that some churches are looking at alternative ways of generating funds for the church; these investments would fund church activities, thereby, removing financial pressure on members, encourage evangelism and create employment opportunities.
This view in a longer range represents the views of some of our members that should be ignored without due consideration.
We shall explore possible practical investments that are affordable and attainable. They are things that are already working for some dioceses and churches by the special grace of God, and they shall work for us in Jesus mighty name.
(a) Standard Crèche, Primary and Secondary Schools: The history of education in Nigeria and its subsequent developments clustered around the CMS (Anglican Communion). We have an established pedigree in administration of educational activities at all levels that can be explored in the light of investment platforms. Education has remained a prospering sector despite the dwindling of our economy. There are multiple church-owned schools in our dioceses that are serving the communities in their own local content along the public schools but investment in standard schools can give dioceses the needed financial return on investment.
Good Crèche, Primary School or Secondary School shall yield better results in training of manpower, discipleship and breakeven financially. Smartly, New Generation churches have jumped into educational sectors with rebranded mindset and are competing to dominate the private education sector. We need to stand up in this direction. Remember that investing in Standard Crèche and Primary School gives higher returns with lower investment. Standard schools built on good environment, with good transport system, seasoned teachers, good staff salaries and emoluments, and strict professional services and good school fees are heavy investments for the diocese. The standard of the school must be clearly visible from its structure to its ethics, let the people see that the school has unique taste that can attract its customers. We are talking about packaging. The schools can be International School, Memorial School, Seminary, or Convent. Packaging and full service delivery is the key.
(b) Tertiary Education: The number of students seeking admission each year is always very high with less than 50% gaining admission. Higher percentages are seeking for alternatives.
A Diocese can run an affiliation with existing University for sandwich and weekend programmes. Management and Social courses attract more candidates and higher patronage. Dioceses c an explore the use of her Primary schools within our churches. The NBTE has softer ground for Polytechnic Education for Prime Dioceses that can afford it.
(c) Trade and entrepreneurship skills: Trade and entrepreneurship skills are current needs of the society. Any church development in such direction shall attract patronage, partnership and possible sponsorship from governmental and non-governmental agencies. We can explore this opening in our dioceses.
(d) Health Institutions: There is expanded need for medical personnel and their supporting services. In Nigeria, Anglican Church has a good record in School of Nursing and Midwifery, school of Health Technology and Hospital Services. Dioceses can affiliate with each other in this direction. The Nursing and Midwifery councils regulate the number of students to be admitted in each session thereby creating continuous need for admission into the schools. In addition, the schools holds higher potentials in tuition payments and higher in returns on investment. The Diocesan can decide to develop a 6-Year Health Institution Master Plan that will incorporate training of 10-15 smart church workers in health fields such as Medicine, Nursing, Midwifery, Health Technology etc who will interplay the St. Luke ministry of health care and the gospel, exploring the sitting of the institutions in strategic areas, developing contacts for affiliation, building of structures and equipping them.
The trained workers shall serve the greatest need and challenge of manpower of the institution while maintaining the core drive of the gospel as church workers. Kindly note that Priests, Church teachers, Clergy wives etc should be our primary targets for such training for continuity and loyalty sake.
(e) Land Acquisition: It is a known fact that churches are used to receiving plots of land for her church building and other developments. Land is one of the assets that will continue to appreciate over time because land mass is almost constant while demand for land continues to expand with time. Investment on strategic land with all the right and lawful due processes followed is life transformation investment for the church. Dioceses can intentionally purchase lands in strategic locations with higher tendency of development for the purposes of reselling them with multiple profits in future. Land investment can double within the shortest time. Dioceses should invest in lands around proposed tertiary institutions, industrial areas, new markets places, new layouts, new GRA lands, and fast developing areas, airports sites and other population driven areas.
There are dioceses like Diocese of Ikwo where Federal Government located a Federal University in recent years, lands around the school will jump high and continue to jump higher now and in the future which opens investment opportunity. The land investment for business can be within or beyond the Diocese. Dioceses that invested in choice lands in Abuja and other bigger towns are receiving returns from such investments today.
(f) Development of Estate: The development of Estate is becoming a very lucrative investment. People are looking for accommodations around developed cities and towns. The church has a better capacity to acquire massive plots of lands (from 100 plots and above) with good access road and security. The process involves getting a massive land with attraction for residency. Develop a survey plan for the estate that your capacity can manage. Get the appropriate approvals and C of O from government. Set your committee and advance your vision. The Diocese can be the Estate Developer and the Estate Manager. Do not be discouraged, there is provision for a diocese to start small, even 20 plots of land can be used for a pocket estate. The estate can be developed by the diocese or the diocese may choose to lease the land out to individuals for development according to their design.
A well defined BOT (Build, Operate and Transfer) from trusted partners can be a starting point for a diocese in owing an estate. The Diocese can develop a policy for each Archdeaconry and selected churches to build a block in the estate while diocese builds the chapel, school, mini-markets, provide security and manage the estate. The estate services of security, cleaners, plumbers, and other amenities and maintenances shall provide jobs for church members and income for the Diocese. Estate Anglican Chapel shall serve and retain membership of our church. Estate canteen and mini-markets shall be source of income to the church as well.
(g) Mission Guest House: There are church lands that are also on choice places that can be developed into Mission Guest House. Guest House is a hospitality service that serves humanity and yields financial returns to the investors. Dioceses of Abuja, on the Niger, Awka, Niger Delta North, Lagos etc have Mission Guest Houses within the church. My friend used to say that the first consideration for siting a guest house is location, the second is location and the third is location. Fortunately, Anglican Churches are primly located in every city in Nigeria. The strength that our churches and Women ministries pump into 3-storey church hall building, that stays idle most of the time, can be transferred into 3-storey Mission Guest House building in a better location as church investment.
It is possible for Diocese of Mbaise to invest in Mission Guest House in Abuja. A 40-room Mission Guest House running at 75% occupancy at the lowest cost of #10000 per room shall monthly net about #9million and above #5million profit after expenses. It implies that the Diocese will be receiving about #60 million naira every year from that single investment. Additional services like restaurant, food and drinks services, snacks, Ice block production to utilize the steady electricity, Hair dressing and barbering saloons and other auxiliary services needed in the area can be accommodated as means of further financial returns.
(h) Shops and Business Complex: Anglican churches are usually located closer to business areas and market centres. There is need to tap from the investment opening around such areas. The Diocesan can set up an investment team to study and propose best ways of maximizing all our windows of opportunity around the church. It is possible for a Diocese to build and own market around her churches. Diocesan can decide to rent part of the church land for a shopping mall, and for bigger stores like Shoprite. Instead of using the church land beside the market as car park or dustbin or football field, it can be converted to a shopping mall. It can become a Filling Station, as we see in Uga Junction. There are investments around our churches that must be explored for the good of the diocese.
(i) Bank Deposits, Treasury Bills, Bonds and other investment in financial Institutions: There is a need for the diocese to retain certain level of liquid cash for emergency. Although the percentages of interest in commercial banks Treasury bills, fixed deposits, Savings accounts etc have fallen drastically under the current Nigeria administration, there is need to still retain some of the investment with banks for easier access of fund in case of urgent demand. Treasury bills are crawling up around one percent from its previous values of 15% and above. ARM Pension Managers and IBTC are holding some slightly higher returns that can be negotiated. It is better than nothing. There is also a great need to keep your money in the banks busy or the Federal Government under the current administration that is looking for idle money will dive at your deposits with their irrational policy. Do not allow church money to be idle anywhere.
(j) Agricultural Business: Agriculture has remained a huge capital investment base in Nigeria. Churches can be coordinated to yield into huge diocesan agricultural output. The Diocese can develop policy on agriculture. Such policies should include that diocesan lands should not be idle and fallow. It will save the diocese from encroachment and land grabbers, and turn all diocesan lands into profitable investment ventures. Possible Agricultural investments for churches includes:
(1) Production and Marketing of Agricultural Products: Dioceses can engage in production and marketing of Agricultural products. Short term products like vegetables, maize, cassava and rice can be farmed and marketed by the diocese. Medium term products like Paw-paw, plantain and banana can be produced and marketed by the diocese. Long term products like Palm tree, Ukwa, Udara etc can be produced and marketed by the diocese.
(2) Agricultural Processing Business: Processing of agricultural products is a huge investment with government supports and profits. Dioceses can invest in Rice Mailing, Cassava Processing, Palm oil Processing, Palm Kernel oil Processing, Fishery production and processing etc.
(3) Agricultural Products off-Take Business: Products are usually seasonal and needs coordination for them to be fully utilized. In addition, majority of the foods we consume in our diocese come from outside of the diocese. Diocese can buy in bulk foodstuff like beans from the North, transport them, preserve and store them to be marketed with good profits. They also buy from local farmers during harvest, process and preserve them for better market.
(4) Formation and Coordination of Co-Operative Societies: The Diocese can also coordinate the formation and coordination of Co-operative societies from the church levels in order to harness the potentials of the people as a team. The co-operative societies shall work with the diocese and help in opening up the diocese for Federal and State Government Agricultural interventions that will favour both individual farmers and the diocese at large. Through the co-operatives, diocese can give agricultural loans with minimal interests, monitor the progress of her members and help them accordingly.
(5) Agricultural Loan Providers: Diocese and Churches can become Agricultural loan providers to the local farmers around them. Farmers struggle to access loans for agricultural inputs like fertilizer, hiring of tractors, and farming in general. There are mission agencies that are offering loans that are up to 20% interest with reliable collateral often in co-operative society’s formations. Instead of keeping idle N10million in bank for 1.05 percent without appreciation from the commercial bank that uses your money for 30% interest loan to all manner of business, you can establish Diocesan loan scheme for farmers with the church as monitors on good agreement, adequate collateral and financial regulation at 15% interest. We can share more experience on that.
(6) The Centre can control what the Churches, Parishes and Archdeaconries are doing: The local churches in a local setting that cannot afford assessment in liquid cash can afford to mobilize her women to contribute a painter of Garri every Afor Sunday (Uka Afor). The monthly contribution of garri can then be mobilized in ratio to the Parish, Archdeaconry and Diocesan level according to the diocesan policy. The same program can be repeated with the major agricultural products in each of the dioceses such as Palm oil, Rice, Beans, etc. The Diocese becomes the centre for mobilization and optimal utilization.
Agricultural businesses can be started at any level of your financial capacity and availability of manpower and other resources. We can start this year.
(k) Crude Oil Business and other Mineral Resources Investments: Stronger Dioceses can explore oil businesses in Nigeria and in other African countries like Sudan. If an individual can own an oil block, a Diocese can own one with her registered trade name. Dioceses and churches can share information on business opportunities in other dioceses in the North, South East and West. We have gold mining business in the North but our churches around there are crying for money. Precious stones are being discovered every day in some part of this nation.
The church can be part of the legal process of these natural resources.
Finally, Avoid Networking and Online Currency Businesses. Seasons of harsh economy promote drives for quick investments with baseless higher returns. It makes the people vulnerable and imprisons the chances of recovery. Diocese should avoid networking businesses as it crushes God’s finance, Church integrity and believers’ trust in the Church. Little by little, legitimate investment with good moral and ethical foundation can give us the much needed financial support for the mission of the church.
As we look inward and around us, God gives us opportunities that will serve as spring of water for the church investment platforms in all seasons. May the LORD give us power to make wealth as we continue in the business of expanding His kingdom in our dioceses in Jesus name. Amen.
Thanks for your attention and participation.
