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MARKET SEGMENTATION AND BRAND POSITIONING AS AN EFFECTIVE TOOL FOR CONSUMERS SATISFACTION

MARKET SEGMENTATION AND BRAND POSITIONING AS AN EFFECTIVE TOOL FOR CONSUMERS SATISFACTION

                         (A case study of Unilever Nigeria Plc. Abuja)      

ABSTRACT

This research work entitled Market Segmentation and Brand Positioning as an Effective Tool for Customers Satisfaction (A Case Study of Unilever Nigeria Plc.) has shown how useful market segmentation is in respect to customer’s satisfaction. The ineffective marketing segmentation has prompted the researcher into this study. Hence, the population of this study comprises of the staff and customers of Unilever Nigeria Plc. In collecting data fifty eight (58) questionnaire was distributed and fifty (50) was filled and returned. The method of investigation applied was sample survey; the study was executed by using statement of problems from which the research question and hypothesis of the research were formulated. Secondary source of data were collected from related books, journals, newspaper, archival records. The data gathered were segmented according to the problems then analyzed using chi-square test.

CHAPTER ONE: INTRODUCTION

1. BACKGROUND OF THE STUDY

Marketing segmentation and branding have become important areas in marketing research. A proper understanding of these concept and procedures involve in identifying market positioning of the product on brand in the target of the market is of profound importance to market management.

It enables the company to design most suitable strategies to improve the market share earnings. The need for market segmentation arises because a company with limited resources cannot cater for the demand of the total market. Hence the company has to identify the segment where the product will be most profitable.M. Ode, BDuru, Nnebue (2002).

The most important striking concept in modern marketing is market segmentation which is a customer oriented philosophy. Consumers want is the most vital reason for any form of business operations.

The philosophy of market is aimed at best to reach the consumers with the goods produced and service provided. In this study, the product referred to is the service provided by the company. This calls for a thorough and continuous study for consumers as well as product positioning to satisfy efficiently their numerous needs from time to time; forcing the marketer to a lot of fundamental marketing strategies.Fullerton R. et al (2016).

The market is heterogeneous in nature and consumers are widely difficult to reach. No business can produce and serve the whole market entirely. Therefore, it is more effective and efficient for any company to identify its supermarket from the whole elected and reach with distinct marketing mix within it available service resources.

Company business entails investment in a lump sum running to millions and billions of naira. In segmented eviction should be addressed by the manager such as:

Who are the customers?

Where are they?

When and why do they buy and so on?

Market segmentation can be defined as the act of dividing the total entire market into distinct units or segments so that meaningful group of customers might merit separate products within a given market. Michel wedel (2002) Madhavaram S., & Hunt, S. D., (2008)”.The might of market segmentation pushes a company or any business organization to place its product using unique marketing programs suitable for market segment. The dynamism of marketing system and a competitive business by any customer require a continuous refinement and increase in product positioning through market segmentation by management scholars, authors and professionals have illustrated many times the unlimited need and diversity of customers that necessitate marketing philosophy.

Philip Kotler (2004) defines market segmentation as a meaningful group of buyers who might merit separation of products and marketing mix. He stressed that market segmentation requires the company to identify different basis for segmenting the market, develop profit of the resulting market segment attractiveness.

Market can be segmented based on different variables and then considering which of the variable reveals market opportunities. However, a particular variable can be used or the entire variable to individually determine the best with a view to restructuring the market.

1.1    STATEMENT OF THE PROBLEMS

1. Understanding what market segmentation and brand positioning means is one of the most preventing problems in most organization today.

2. Another problem is to know the extent market segmentation and brand positioning affects consumer satisfaction. 

3.  This project will attempt to bring both ways of which an organization could adopt an effective segment action strategy that would be help to serve the numerous needs of the different target market or improve in its services for better result.

1.2     OBJECTIVES OF THE STUDY

          The objective of embarking on this project is given as follows:

The main objective of this study is: To examine the company policy and goals in relation to market segmentation and brand positioning as a tool for effective consumer satisfaction.

The specific objective is:

1. To examine how the company has implemented and carry out the market segmentation and brand positioning in the market.
2. To examine to what extent the workers of the company are aware of market segmentation and brand position in the company.
3. To make recommendation based on the findings of the study.

1.3     RESEARCH QUESTIONS

1. How does market segmentation have impact on the economic development of the company?
2. How does market segmentation and brand position satisfy the consumers?
3. How does market segmentation improve the company among competitors?

1.4     STATEMENT OF THE HYPOTHESIS

Ho: There are no significant influence between market segmentation and brand positioning in the market.

Hi: There is significant influence between market segmentation and brand positioning in the market.

HYPOTHESIS 11

 Ho: Quality produce dose not promote consumers satisfaction

Hi: Quality produced may promote consumers satisfaction

HYPOTHESIS 111

Ho: Segmentation and brand positioning are not effective tools in consumer market

Hi:Segmentation and brand positioning are effective tools in consumer market

1.5     SIGNIFICANCE OF THE STUDY

The study is hoped to help Unilever Nigeria Plc. Abuja to be effective and segment the market to meet the various needs of its target customers.  By marketing product that appeals to customers at different life cycle, a business can retain customers who might switch to competing product and brand.

It hopes that the recommendation made in this research work will facilitate the improvement of the existing system. Finally, the work will be useful to the library which keep the work in their references section for the benefit of users like students, lecturers etc.

1.6     SCOPE OF THE STUDY

The study mainly involved market segmentation and brand positioning as an effective marketing tool for consumer satisfactory with particular references to Unilever Nigeria Plc. Abuja. 

1.7     LIMITATION OF THE STUDY

There are many constraints and factors that were encountered by the research during the research work. The prominent once are:

1. Financial Constraints: The cost of materials necessary to aid in carrying the research are very expensive, a lot of field work ought to have been done, but for inadequate finance, a limited coverage of the company understudy was embark upon.
2. Time Constraints: Lack of time contributed greatly affected the quality of work, the academic session very short and the time given to submit the project work also short. Most of the information needed by the researcher in that information needed by the researcher in that company was not accessible for the sole reason of short notice. The study is limited to Abuja bottling company or plant because of time constraint.
3. Biased Response: Biased response by the respondent was a problem encountered by the research when collecting data.

1.8     OPERATIONAL DEFINITION OF TERMS

Market segmentation is the activity of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics. Philip Kotler (1997).

Branding:  Is a general term describing the establishing of brand name mark or brand name or trade name of a product.

Product: Can be defined as any commodity that has a monetary or commercial value. However, Philip Kotler (1997)

Brand positioning: Has been defined by Kotler(1998) as “the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market”. In other words, brand positioning describes how a brand is different from its competitors and where, or how, it sits in customers’ minds.

A brand positioning strategy: Therefore involves creating brand associations in customers’ minds to make them perceive the brand in a specific way.

REQUEST FOR PROJECT MATERIALS

AN EVALUATION OF OPERATIONAL STRUCTURE OF INSTITUTIONAL CONSULTANCY SERVICES IN FEDERAL POLYTECHNIC NASARAWA

AN EVALUATION OF OPERATIONAL STRUCTURE OF INSTITUTIONAL CONSULTANCY SERVICES IN FEDERAL POLYTECHNIC NASARAWA

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

Education plays a very crucial role in the development and overall growth of any nation. In fact the attainment of high industrial growth and the general improvement of the living standard of citizens of a nation depend to a large extent on the quantity and quality of education. This is because, education increase people’s capacity to harness their environment for the betterment of their condition. Thus, nations the world over have continued to expend their resources toward the funding of education. Nigeria, like any other nation has not been left out in this quest.

It is in pursuit of this objective that the Federal Government decided to establish more tertiary institutions after the civil war in the early 70’s. Using oil revenue (oil boom), eight new universities were established in Benin, Maiduguri, Kano, Jos, Sokoto, Ilorin, Port Harcourt and Calabar. Before the war, there were only a few institutions which were regionally owned, these institutions were later taken over by the Federal Government. However, the take-over turned out to be a false sense of optimism because shortly after, the issue of the responsibility for funding education became a perennial question, especially tertiary education.

According to Professor Jibril Aminu (1988) “The funding of higher education became a subject of regular discussion since 1979 when the Federal Government decided that education, particularly tuition, should be free at all levels. Soon thereafter, it became obvious to all that the Federal Government alone could not cope and provide free education at all levels given the upsurge of demand each passing year. ”1 The struggle to cope with the number of student’s in-take against available facilities has over the years become more telling at the tertiary level of education. Facilities have been overstretched, equipment, where available, were obsolete, and there is lack of adequate and qualified lecturers. All these are attendant problems of inadequate funding. (Jibrin Aminu, 1988:8).

According to Professor Jibril Aminu, (1988) “One will only be begging the question if he says that the time has come for a serious search for alternative funding of tertiary education.”(Jibril A. Op cit :8) . One of the recommendations of the Abioye panel then was that tertiary institutions should look for alternative sources of funds to complement the efforts of the Federal Government. The panel recommended among other sources the creation of Consultancy Service Centers, Endowments such as establishing professional Chairs, establishment of active alumni associations etc. it was soon after the release of the government white paper on the findings and recommendations of the panel that witnessed the beginning of formal consultancy services in our tertiary institutions.

A few of these outfits are now registered as limited liability companied with broad objective such as:

(i) To serve as a complementary revenue source for institutions, and

(ii) To provide a legitimate avenue for the staff of such institutions to exploit their talents and expertise in providing the much needed support services to public and private organization.

It was in reaction to this that the Federal Polytechnic, Nasarawa decided to set up its own consultancy outfit on the 13th October, 1992 as a Consultancy Committee. Later the Committee was converted to a full-fledge Consultancy Unit by the Management Committee which was named Consultancy Services Unit (C. S. U.), the name was later changed to Naspoly Consult Limited, under the headship of a Coordinator. It is a unit under the office of the Rector and is overseen by the Rector. The consultancy services unit has been incorporated into the structure of the Polytechnic Administration. (Federal Polytechnic Nasarawa, op.cit)

1.2 Statement of the Problem

It was established at the background of this study that the genesis behind introduction of institutional consultancy services in the Nigerian tertiary Institutions was to augment the revenue sources in respective institutions and enable the staff to exploit their talents and expertise, thereby complementing the effort of funding provided by the Federal Government and development of staff in general.

Of course, this is crucial, especially when evidence proved by Professor J. Aminu (1988) and subsequently the rationale for setting up Abisoye Panel entails that the Federal Government of Nigeria alone can not sustained the over-increasing number of higher institutions of learning. It was on these bases, that the Nasarawa Polytechnic Consultancy Service (Naspoly Consult) was established in 1992 with simple structures, clearly specified objectives, human and material resources necessary in meeting up the bases of its establishment. yet the out puts yielded so far from this outfit is quite below expectation in most of these area of its objective, which includes provision of alternative sources of revenue to the Polytechnic, development of staff, provision of technical, professional and other expert services to individuals, public and private organizations. Is it the structural and operational guidelines of the outfit affect its service delivery or the composition of manpower across all levels? Is it the mode of relationship that exists between management and subordinate that constitutes the problem or lack of motivation and dynamism among the motivational factors? The data that will be generates shall place us on the truth of the whole.

1.3       Objectives of the Study

The main objectives of this study are to examine the operational structures of Nasarawa Polytechnic Consultancy Services (Naspoly Consult) and identify areas of difficulties with the aim of improving the situation. However, the specific objectives include:

1. To examine the operational structure of Naspoly Consult
2. To know the composition of manpower in the outfit.
3. To ascertain the nature of relationship that exists between management and workers.
4.  To identify the major problems which have hampered the effective functioning of the Naspoly and to recommend some ways of remedying the situation.

1.4       Research Hypotheses

This study hypothesized that “clearly spelt out and rationally designed operational guidelines will result in more efficient performance in the outfit”.

1.5       Scope And Limitations Of The Study

This study will cover the operational structures of consultancy services in Federal Polytechnic Nasarawa between 1988 to 2007. Federal Polytechnic Nasarawa was chosen for one, is a federal establishment worth of emulation by others state Polytechnic, two, its operation and structural composition differs with some Federal Polytechnic and the assurance the researchers has in-terms of accessibility to data ( both primary and secondary).

Other minor constraints, especially time will be considered as a factor that limited the scope of this study. However, it is expected that the outcome from this findings will tremendously help in addressing issues on operational structure of institutional consultancy services in Nigerian Polytechnics.

1.6       The Significance Of The Study

The study will attempt to provide a proper structure and defined functions of Consultancy outfits which will bring about greater performance and attainment of organizational objectives. Also this study will identify the various consultancy services rendered in Federal Polytechnics Nasarawa Consult and the procedure involve for this services. In addition, manpower composition across all consultancy units will be identify. All in an attempt to provide comprehensive analysis in regard to this research topic.

1.7       Definition of Terms.

The following concepts require necessary explanation. They include: Structure, Organization, Function, Consultancy, Institution, Services, Unit, Power, Autonomy, Coordination and Performance.

Structure: Refers to an arrangement in a definite pattern of an organization showing the inter relationship of posts within the organization.

Organizations: This involves the systematic arrangement of men and materials in the accomplishment of a common goal in order to achieve the desired objectives with the least friction and maximum satisfaction for all concerned.

Function It refers to the characteristics action of a person or thing performed on a regular basis which contributes to a larger action.

Consultancy: Consultancy is an activity, where consultants offer assistance by taking/facilitating some action to help Client resolve complex difficulties they face or anticipate to face in the near future. Therefore where this professional or expert advice is rendered on commercial basis, a certain financial payment is made to the consultant for the services rendered.

Institutional:  This is derived from institution which refers to an establishment or an established organization for example, University or Hospital. It becomes institutional when it has certain peculiar characteristics.

Services: This is derived from service which refers to work or duty performed for somebody. Services on the other hand, refer to a piece of useful work that does not produce a tangible commodity.

Unit: Relates to a single thing or a group, which is a constituent of a whole part of an establishment that has a special function to perform within a whole.

Power: This means having controlling influence or having authority over something. That is, having the authority to take decisions as they affect an organization.

Autonomy: It is a situation or condition in which an organization acts independent of another organization. That is, having powers to take decisions without requiring the opinion of another person or group.

Performance: This is to carry out a accomplishment of a task .In other words, the accomplishment of set objectives or goal of organization.

IMPACT OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ON EARNINGS

IMPACT OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ON EARNINGS

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

Globalization of the world’s capital markets has brought the increasing need for comparable and reliable financial information to support these markets’ varied transactions and operations. Transparency and relevance are attributes of financial reporting. Accounting information that meets these attributes increases investors’ confidence, leading to enhanced capital flow. The recent financial crisis has been partly blamed on the erosion of investors’ confidence, owing to the perceived lack of transparency in financial markets. Devalle et al. (2010) posited that opaque markets aggravate information asymmetry between insiders and outsiders, impeding the efficient allocation of resources. The International Accounting Standards Board (I.A.S.B.) has equally acknowledged the need to improve financial reporting quality globally. Consequently, the I.A.S.B. promotes the application of a common set of financial reporting standards as a solution.

Further, extant literature suggests that applying diverse accounting standards worldwide often results in different criteria for resources accounting (I.A.S.B., 2009; Lorchir, 2015). Analysts view that this creates inconsistencies in global investors’ investment information, which was narrowed by the worldwide application of IFRS. In this regard, complying with IFRS is expected to facilitate informed trading and reduce adverse selection in the market. Information asymmetry puts small investors less likely than their sophisticated counterparts to generate financial information from alternative sources at a disadvantage in the market (Ball, 2006). The notion behind promoting a common set of high-quality standards worldwide is that the risk and cost of processing financial information to investors reduce.

Shehu (2015) opined that in Nigeria, the information disclosure requirements in the financial statements under Nigerian Generally Accepted Accounting Principles (N.G.A.A.P.) were grossly inadequate to effectively bridge the information asymmetry between companies and the users of the financial statements. He further posited that financial information quality in Nigeria remains weak compared with many advanced jurisdictions. As a result, they were hampering the growth of efficient equity markets. A common complaint among investors in Nigeria is that financial information on company performance is either unavailable or, if provided, lacks reliability. Hence, he conceived that companies would disclose more of their financial information with the transition to IFRS. However, small profit earning through manipulation of the accounting information revealed, otherwise known as earnings management, has hampered the financial disclosure quality to the shareholders and other stakeholders of the listed conglomerates in Nigeria.

Earnings could be used to tell the truth and in cheating or misleading. Therefore, the difference between real and reported earnings impacts earnings quality, described by the capital markets as a summary indicator of financial reporting quality (Francis & Schipper 2008). Corporate scandals like Enron, WorldCom, Parmalat, and, more specifically, Afribank Nigeria P.L.C., Cadbury Nigeria P.L.C., and other corporate fraud in Nigeria have continued to raise questions about earnings quality in Nigeria and the world at large.

As the debate on the effects of global IFRS adoption continues, little is known about Nigeria’s outcome despite IFRS adoption, hence creating a gap. Studies like those of Houge et al., 2014; Jeweher et al., 2014; Umobong et al., 2015, Priscilla et al., 2015; Yasas et al., 2019) have continued to submit empirical shreds of evidence supporting and refuting the capability of IFRS to enhance earnings quality. However, a consensus is yet to reach the efficacy of mandatory IFRS adoption’s impact on earnings quality in developing countries. This realization suggests that the debate remains unsettled, and there is a need for further empirical evidence on different jurisdictions to enrich the discussion (Bruggemann et al., 2013). Specifically, current studies have not looked at Africa closely in this accounting research area, even as African countries have adopted the IFRS and set timelines for mandatory adoption (PwC, 2014). This study supports the existing literature in developed economies with few in developing climes to include Nigeria. Thus this study makes an attempt to examine the impact of International Financial Reporting Standards on Earning.

1.1       STATEMENT OF RESEARCH PROBLEM

Although many countries have faced challenges n their decisions to adopt IFRS, its wide spread adoption have been promoted by the argument that the benefits outweigh the costs. Recently there has been a push towards the adoption of IFRS developed an issued by the International Accounting Standards Board (IASB). The organization should enable regulators and other key players to gauge the effectiveness of the financial reporting system in place such has training and development for practitioners and new members, due diligence for accounting standard and the overall institutional and professional organization conducive for effective standards application. Therefore, implementation of IFRS would reduce information irregularity and strengthens the communication like between all shareholders and also reduces the cost of preparing different version of financial statements where an organization is a multi-national. It is against this problem that the study seek to examine the impact of international Financial Reporting Standard on earning.

1.2       OBJECTIVE OF THE STUDY

The general objective of the study is to examine the impact of International Financial Reporting Standard on Earning with particular interest in First Bank of Nigeria

The specific objectives include the following:

1. To examine the impact of IFRS on quality of financial statement in First Bank of Nigeria Plc.
2. To examine whether the International Financial Reporting Standards (IFRS) in Nigeria has impact on earning of First Bank of Nigeria Plc.
3. To find out the role IFRS play in banking institutions in Nigeria.
4. To determine whether IFRS adoption and implementation has been made Positive impact in Nigeria.
5. To find out the problems confronting the staff of First Bank of Nigeria Plc in adopting IFRS into system.

1.3       RESEARCH QUESTIONS

1. Does IFRS aid quality of financial statement in First Bank of Nigeria Plc?
2. Does International Financial Reporting Standards (IFRS) in Nigeria has impact on earning of First Bank of Nigeria Plc?
3.  Does IFRS play any significant role in banking institutions in Nigeria?
4. Has there been effective implementation in adoption of IFRS in First Bank of Nigeria Plc?
5. Is there any problem confronting the staff of First Bank of Nigeria Plc Lagos in enhancing quality financial statement?

1.4       RESEARCH HYPOTHESIS

HYPOTHESIS 1

H0:      International Financial Reporting Standards does not have significant impact on financial earning in First Bank of Nigeria Plc.

H1:      International Financial Reporting Standards does not have significant impact on financial earning in First Bank of Nigeria Plc.

HYPOTHESIS 2

H0:      IFRS does not play any significant role in banking institutions in Nigeria.

H1:      IFRS play any significant role in banking institutions in Nigeria.

HYPOTHESIS 3

H0:      There is no significance relationship between effective implementation and adoption of IFRS in First Bank of Nigeria Plc.

H1:      There is a significance relationship between effective implementation and adoption of IFRS in First Bank of Nigeria Plc.

1.5       SIGNIFICANCE OF THE STUDY  

International Financial Reporting Standards (IFRS) are accounting principles and guidelines formulated by the International Financial Accounting Committee (IFAC) for global acceptance by countries’ local accounting bodies and institutions. In a world of global warming where international businesses and trade is on the rise, thus, a global standardized accounting method is prominent.

The findings of this research study will be significantly relevant and applicable in so many areas; first and foremost adoption of IFRS will promote transparency and accountability among in the Nigeria business environment (both public and private firms) and the economy at large. It will benefit the shareholders, investors, management, etc. of organization in ensuring credible accounting quality and overall true picture of the company’s performance for investors and general public decision making.

The ultimate goal of every industry or organization including banks is to quality financial reporting (statement) information is issued to public. This goal can be achieved in the banking sector adopting IFRS for effective financial reporting.

This study is necessary because it would enable the managers of First Bank of Nigeria Plc, and other banks to improve on their implementation of the standards. It would also help the employers, employees and the potential investors who may want to invest on the company.

Finally, it would serve as a reference source to students or others researchers who might want to carry their research on similar topic.

1.6       SCOPE OF THE STUDY

The study concerns about the impact of Internal Financial Reporting Standard on earning with a particular reference to First Bank of Nigeria Plc.

1.7       LIMITATIONS OF THE STUDY

The limitation of this study was the inability of management to divulge certain information which they consider sensitive and fear of publication which might be detrimental to their operation. Another limitation to the study is time constraint. The period within which the study is conducted is short for a thorough research work, hence gathering adequate information becomes very difficult.

Also, finance is one of the limitations of study. The researcher is facing financial constraint to meet all the needed educational requirements including this research study. This caused the researcher to restrict his research to one company for possible completion of the study.

Finally, lack of materials on the topic. This is new in the area of quality of financial statement in Nigeria. Therefore, the researcher resolved to seek friendly approach in order to obtain the needed materials or information from the organization under study through the administration of questionnaire.  

1.8       BRIEF HISTORY OF FIRST BANK OF NIGERIA PLC.

First Bank of Nigeria Plc was established in the year 1894 and headquarters in Marina, the heart of Lagos. It is Nigeria’s largest financial services institution by total assets and gross earnings. First Bank has over 750 branches providing a comprehensive range of retail and corporate financial services.

Since its establishment in 1894, First Bank has consistently built relationships with customers focusing on the fundamentals of good governance, strong liquidity, risk management and leadership.

In 1894 First Bank of Nigeria Plc:

Incorporated in Liverpool as the Bank for British West Africa.

Acquired African Banking Corporation, which was established in 1892.

In 1896:

Opened first international branch in Accra, Ghana.

In 1963: Operates 114 branches across West Africa, when Nigeria became a Republic. Partly because of desire for service; commitment to financial inclusion with over 100 branches as far back as 1963.

In 1969:

• Incorporated locally as the standard Bank of Nigeria Ltd.

In 1971

• Listed on the Nigeria Stock Exchange. Allows Nigerians to buy/own a part of First Bank heritage, into the huge potential of the financial services powerhouse.

In 1979:

• Changes name to First Bank of Nigeria Limited

In 1982:

• London Branch established to foster international banking relationships for Nigerian and foreign businesses alike

In 1991:

• Changes name to First Bank of Nigeria Plc following the Bank and other Financial Institutions Decree (BOFID). Alongside with currency reforms and other initiatives to enhance the payment structure
•  First ATM introduced in Marina as part of ease of convenience, round the clock banking.

In 1999:

• A former MD of First Bank is appointed CBN Governor

In 2002

• Establishes the FBN Bank (UK), regulated by the FSA, the first Nigerian bank to own a full- fledge bank in the UK.
• Established first subsidiary of a Nigerian owned bank in the UK.

1.9       DEFINITION OF TERMS

IFRS: International Financial Reporting Standards

IAS: International Accounting Standards

GAAP: Generally Accepted Accounting Principles

ACCOUNTING: This is defined as the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information

FINANCIAL STATEMENT: Financial statements are a collection of reports about an organization’s financial results, conditions and cash flows.

INCOME STATEMENT: Income statement is a financial statement that measures a company’s financial performance over a specified period

STATEMENT OF CASH FLOW: Statement of cash flow is a financial statement that shows changes in the balance sheet (financial position) accounts and income affects cash and cash equivalents and breaks the analysis down to operating, investing, and financing activities.  

RECOVERY OF RENT ARREARS AND TREATMENT OF DIFFICULT TENANTS IN RESIDENTIAL AND COMMERCIAL PROPERTIES

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RECOVERY OF RENT ARREARS AND TREATMENT OF DIFFICULT TENANTS IN RESIDENTIAL AND COMMERCIAL PROPERTIES

ABSTRACT

The study assessed the recovery of rent arrears and treatment of difficult tenants in residential and commercial properties The specific objectives include to examine the causes of rent defaults in Nasarawa town, identify the methods of rent recovery adopted in the study area, assess the factors influencing rent default and determine the effects of recovery of rent and treatment of difficult tenants on residential and commercial property management The research method used was survey design. The sampling techniques adopted for this study is the random sampling techniques. Statistical tools such as tables, percentage and descriptive methods were used to presents and analyzed the data. The study revealed that the causes of rent default are general economic conditions in the country, Non-payment of salaries as at the time their rent expired, Irregular flow in tenants’ income, un-foreseen circumstances on the path of the tenants’ and finally, some tenants bad characters and that rent default have negative impact on property management. The study recommended that Real Estate firms and landlords must clearly and unequivocally stipulate the consequences of refusing to pay rent and enforcement of relevant laws and regulations.

CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

The management of real estate investment for optimum returns is one of the fundamental areas in real estate profession. These returns may come either as regular income streams, or a lump sum; depending on whether the subject property is put for letting or is sold outrightly. In order to achieve this sole objective of the investor, an adequate property management schedule must be put in place for such real estate investment. Property Management, according to Wikipedia, is the operation, control and oversight of real estate as used in its most broad terms. The word Management indicates a need to be cared for, monitored and accountability given to its useful life and condition. This is more akin to the role of management in any business.

One of the fundamental roles offered by Estate Surveyors as professionals is Property management. Other roles include valuation for all purposes, estate agency, facilities management, property marketing, property development appraisal, and environmental management. In practice, the estate surveyors carry on property management services which include selection of tenants, acceptance of rent, responding to and addressing maintenance issues, advertising vacancies for letting, reviewing rent and representing the landlord before courts of competent jurisdiction in ejecting defaulting tenants, amongst other services. In addition to managing income and expense related activities, estate surveyor manages construction, development, repair and maintenance of a property.

However, there are a couple of challenges in which property managers generally faces when discharging their professional duties. One of these many problems is tenants’ inability to pay their subsequent rents. This is known as Rent Default. Default occurs when a tenant does not pay the rent specified in the tenancy agreement. The default can also pertain to other breaks in the terms of the lease (for example, by adopting a dog when pets are not allowed). However, failure to pay rent is the most frequently committed breach by tenants and is the most common cause of eviction.

According to Oni (2010), the rate of default in rent payments amongst the tenants in Ikeja metropolis is high. In a survey of 120 estate surveyors, 12 (representing 10%) stated that tenants usually fall into arrears for up to six months; 86 (about 72%) stated that default is between seven and twelve months; and 22 (about 18%) were of the opinion that rents are owed for more than twelve months. In other words, the study revealed that 90% of the respondents had the experience of default in rent for more than seven months.

Moss (2003) identified factors responsible for rent default to include: affordability, disputes over quality of housing units; confusion over the type of tenure and the prevailing culture of entitlement on the part of tenants amongst others. Also Salleh, Yosof, Johari and Talib (2014) in a study conducted in Malaysia indicated that only ethnic group significantly influenced the ability to pay rent in the study area. Similarly, Dabara, Ankeli, Oluwasegun and Odewande (2014); Ankeli, Dabara, Oyediran, Guyimu, and Oladimeji (2015); and Sani and Gbadegesin (2015) identified poor housing facilities, breach of tenancy agreement, unemployment, retrenchment, poor property maintenance, bad landlord/tenant relationship and harsh landlord’s policy as the major factors responsible for rental default. Without any iota of doubt, rent defaults often affect the nature of returns on real estate investment  

Recovery rent arrears and treatment of difficult tenants has been identified as a major set-back in property management. These aspects of management functions are being confronted with many problems because rent payment depends mostly on income earn from business carried out in the property. Alluding further to this, Maxwell (2003) stated that developing and maintaining good working relationships between property owner and tenant is one of the responsibilities and priorities of a property manager, this being crucial to successful achievement of the aspirations and objectives of all parties. Consequently, understanding the relationship between the property owner and tenant is germane to successful management of real estate without which the stakeholders may not derive maximum benefits from their investments. It is against this background that this study seek to  examine recovery of rent arrears and treatment of difficult tenants in residential and commercial properties

The process of rent collection in residential property has a lot of challenges. One of such challenges is delay in the payment of rent. Some tenants fail to meet up with the agreed deadline for payment. This could be as a result of delay in the payment of wages by their employers, increase in rental price, the effects of inflation, among other factors. Delay in the payment of rent often results  in some significant impacts on return on investment and could also lead to legal battles between the landlord and the tenant, which may lead to the forceful eviction of the tenant. The failure to pay rent and as when due is a major and the most frequently committed breach which rocks the landlord-tenants’ relationship. This accounts for the cause of most eviction in Nigeria (Oni, 2011). In a bid to forestall this, rental property owners as well their agents engage in scrutiny of prospective tenants within a set criteria through an adequate tenant selection process. As much as certain tenants’ characteristics are historical, there is possibility of change in behaviour over a period of time in some aspects, thereby making it difficult to blindly rely on past records of prospective renters. Olukolajo and Ojo (2016) identified rent related issues such as default in rental payment and its associated cost of recovery as a major contributor to conflicts between landlords and tenants and a risk to property investment. It is on this note that the research seek to assess the effects of rent default on return of residential property investment.

1. Statement of Problems

It has been observed that in recent times rental defaults on leasehold properties are on the increase. The process of rent collection in both commercial and residential property has a lot of challenges. One of such challenges is delay in the payment of rent. Some tenants fail to meet up with the agreed deadline for payment. This could be as a result of delay in the payment of wages by their employers, increase in rental price, the effects of inflation, among other factors. Delay in the payment of rent often results  in some significant impacts on return on investment and could also lead to legal battles between the landlord and the tenant, which may lead to the forceful eviction of the tenant. The failure to pay rent and as when due is a major and the most frequently committed breach which rocks the landlord-tenants’ relationship. This accounts for the cause of most eviction in Nigeria (Oni, 2011). In a bid to forestall this, rental property owners as well their agents engage in scrutiny of prospective tenants within a set criteria through an adequate tenant selection process. As much as certain tenants’ characteristics are historical, there is possibility of change in behaviour over a period of time in some aspects, thereby making it difficult to blindly rely on past records of prospective renters. Olukolajo and Ojo (2016) identified rent related issues such as default in rental payment and its associated cost of recovery as a major contributor to conflicts between landlords and tenants and a risk to property investment. It is on this note that the research seek to examine recovery of rent arrears and treatment of difficult tenants in residential and commercial properties.

1.3       Aim and objectives of the study

Aim

The aim of this study is to to examine recovery of rent arrears and treatment of difficult tenants in residential and commercial properties.

            Objectives

            The specific objectives of the study include:

1. Examine the causes of rent defaults in Nasarawa town
2. Identify the methods of rent recovery adopted in the study area
3. Assess the factors influencing rent default in Nasarawa town
4. Determine the effects of recovery of rent and treatment of difficult tenants on residential and commercial property management

1.4       Research Questions

1. What are the causes of rent defaults in Nasarawa town?
2. What are the methods of rent recovery adopted in the study area?
3. What are the factors influencing rent default in Nasarawa town?
4. What is the effects of recovery of rents and treatment of difficult tenants on residential and commercial property management?

1.5       Significance of the study

This study focused on the recovery of rent arrears and treatment of difficult tenants in residential and commercial properties. This is especially significant considering the rising wave of tenancy cases in law courts and the high rates of rent default in the country. This study will help to reduce tenancy cases by identifying the incidence of default in rental payment and proffering solutions to address these problems. By reducing the number of rent-related issues, there would be better and higher return on investment. Thus, further encourage investment in real estate.

The significance of this study will also be found in the area of reduction in forceful eviction of tenants. This will result from a better understanding between landlords and tenants. Furthermore, since rent collection and payment is an important aspect of property management, this study will enable property owners to assess the best possible way of collecting rent. This will help to save time spent on litigations and as well save resources which are scarce.    

This study will contribute to the body of knowledge that is available in public document, literatures, book, magazines and journals. Also it will serve as a reference material for students, scholars and other researchers.

1.6       Scope and limitation of the study

The scope of this study is limited to the examination of the effect of rent default on return on investment of residential property. Emphasis is placed on residential properties in Nasarawa town alone because of the importance of residential properties and it serve as a source of housing and also has the highest percentage of land use. This is because rent collection covers a wide range of property types, and delving into these will make the study too broad.

Limitations

The researcher faced various problems when carrying out this field study. Some of these challenges included:

1. Some respondents were unwilling to fill the questionnaires since they were suspicious about the study. Many perceived it as sharing very vital information which they were not ready to furnish the researcher with.
2. Delays were experienced from the respondents who took very long to complete the questionnaires and constant postponement of the picking date proved to be very frustrating to the researcher.
3. At times some of the respondents did not fill in the questionnaires adequately and ignored certain sections that required the giving of opinions which made it difficult for the researcher to make adequate conclusions.

Irrespective of the various challenges encountered, they did not limit the achievement of the stated aim and objectives of the research as well as the validity of the research.

1.7       Definition of Term

Landlord: A person or organization that owns property that is rented to tenants

Tenant: Somebody who rents a building, house, apartment, plot of land, or piece of property for a fixed period of time.

Real Estate: land including all the property on it that cannot be moved and any attached rights

Property Management: It involves managing landlords-tenant’s relationship

Covenant: a formal and legally binding agreement or contract such as a lease, or oneof the clauses in an agreement of this kind.

Lease: A Lease is an agreement that creates an estate in land.

Lease Agreement: It is a legal entitlement or agreement. Tenants and Landlords arebound either by an oral or written agreement in a lease.

Landlord- Tenant Covenants: A lease is a form of contract and so will contain aseries of undertakings by the parties which are known as covenants because it is by deed.

1.8       The study area

Nasarawa Emirate in Nasarawa State is located in the Central region of Nigeria. It is flanked by Keffi and the Federal Capital to the North. To the South, it is bounded by Benue River and to the west; it bordered the present Gadabuka and Toto Local government area which are of course, part of the Emirate. To the East, it is bordered by Doma, Lafia and Keana Local Government Areas all of Nasarawa State.

Physical Characteristics: The major things considered under physical characteristics of Nasarawa are, geographical location, temperature, rainfall, geology, wind, vegetation, humidity, soil.

Temperature: The temperatures are generally high during the day, particularly between the months of March and April. The main monthly temperatures in the state range between 20⁰C and 34⁰C with the hottest months being March/April and the coolest months being December/January.

Rainfall: The study area experience dry season without or little’s rainfall from November to March of about 95mm, which is wet season is from April to October of about 1.30mm,

Geology: From the Jos Plateau, this comprises of basement complex metamorphic rocks, granite and basalt of two or more ages. The basement complex is covered by shadow soil.

Wind: Nasarawa local government is determined by the seasonal movement on inter-tropical convergence zone [ITCZ], which represents the moving frontier between the moist Atlantic air from the south and the dry air from the north. In the dry season from November till March the north east wind are dominant. For the remaining of the year, the south-western winds are prevailing. Generally, the wind velocity is relatively low.

Vegetation: Nasarawa is situated in the Benue valley between the Benue river and Jos Plateau. This area lies within the part of southern guinea savannah. The vegetation of Nasarawa has, to a large extent resulted from extensive agricultural use of the land, the predominant vegetation type is partly savannah which is characterized by a discontinuous canopy, shrubs and grasses many areas are affected by man through bush burning during the dry season. Among the common trees are oil bean trees, locust bean free and isoberline trees.

Relative Humidity: The relative humidity is the measurement of deepness of the atmosphere which varies from place to place and different time of the day. The level of humidity in Nasarawa state in January is quite less that 40% which rises as from February to July to about 88%. By April when the steady rain commences it will be about 75% by August when the inter-tropical discontinuity is at it northern part, most position of the entire state will experience tropical marine wind and continues till December.   

Soil: The major soil units of Nasarawa belong to the category of oxisols or tropical ferruginous soils. The soils are derived mainly from the basement complex and old sedimentary rocks. Lateritic crust occurs in extensive areas on the plains while hydro orphic soils (limbic incept sols) occur along the flood plains of major rivers (Nyangba, 1995).Socio-Economic Characteristics: Nasarawa main economic activity is agriculture; cash crop, such as yam, cassava and egusi (melon). Production of minerals such as salt is also another main economic activity of people in the state; Nasarawa produces a large proportion of the salt consumed in the country.

ASSESSMENT OF QUACKERY PRACTICE ON REAL ESTATE TRANSACTIONS IN ABUJA

ASSESSMENT OF QUACKERY PRACTICE ON REAL ESTATE TRANSACTIONS IN ABUJA

ABSTRACT

This project assesses the effect of quackery practice on real estate transactions in Abuja. The study specifically seek to examine the activities of quackeries or quack estate agent,  evaluate the effects of quackeries practice on real estate transactions in Abuja and identify the challenges affecting real estate agency in Abuja.  The research method used was survey design. The sampling techniques adopted for this study is the random sampling techniques, the techniques give every member of the population the opportunity to be selected without any form of preferential treatment. A total of one hundred (100) copies of questionnaires were administered, and out of these, 80 copies of the questionnaires were correctly filled and returned.  The researcher make use of statistical tools such as tables, percentage and descriptive methods to presents  and analyzed the data gathered from the field survey which was considered appropriate for the research.  The findings of the study shows that several quackeries are involved in real estate transactions in Abuja, this quackeries are mostly involved in fake list of properties excessive charges on the services there rendered among others, the study also shows that quackeries practice have significant negative impact on real estate transactions among which are black mail genuine estate agents, general negative impact on the real estate  market, create lack of trust in real estate profession as client will generally see real estate agent and agency activities as fraudulent. Finally the study recommends that the capacity of the Estate Agents Registration Board should be enhanced to enable it better regulate the profession and unregistered and quack agents currently practicing should be tracked down and made to either go for training in the diploma or degree of Real Estate, work under a registered estate agent.

Key Words: Quackery, real estate, transactions, Agents.

CHAPTER ONE

INTRODUCTION

Background Of The Study

Real estate agents obviously perform a middleman function in that they bring buyers and sellers together. They build the bridges between people in search of landed properties and estate owners. Real estate is a special type of asset that almost everyone desire to own. Real estate agency was introduced by the British during the colonial era, although before then, there were middlemen in land transactions. Estate agency grew from the old auctioneers who were chattlemen attracted by the exciting prospects of selling large estates. These auctioneers were mainly the lawyers who had easy access to the available properties in the market and kept the lists of estates for sale and prospective purchasers. These real estate practices became visibly lucrative during England’s Industrial Revolution of the nineteenth century. During this period, new wealth and employments were created. The desires for homeownership were largely satisfied. New lands were explored and built-upon or bought and developed. The market for property development widened considerably and the property markets grew exponentially. Then as more lands were developed, more properties enlarged the market base, and property experts were needed as people began to realize the complications that arose from marketing or buying properties (Ajayi, 2017).

Notwithstanding, more self-styled or quack estate agents also emerged, and over time, the real estate business became marred by incompetence and unwholesome behaviors. Due to lack of control over the quack estate agents, there were many victims of obtaining and fraud. To safeguard public interests against unscrupulous practice of estate agency by quack estate agents and rogues in the 1970s and eagerly 1980s, the Nigeria government and the professional bodies governing estate practices have enacted the guidelines and laws guiding the practice of estate agency in Nigeria (Oni, 2010).

The law establishing the profession of estate surveying and valuation in Nigeria included the estate agency as part of the functions of estate surveyors and valuers in Nigeria. Notwithstanding, presently in Nigeria it is all comers affair and there is an association of estate agents (NIESV, 2011). Entering the real estate market is easy, and requires neither qualification nor previous experience, this gives every rank and files (quackeries) opportunities to practice or become estate agent without the requisite educational qualification and registration with the right professional bodies.

Real estate market is not dominates with one particular profession, although there can be no doubt that some of practicing estate agents are members of the Nigerian Institution of Estate Surveyors and Valuers, there have been increase in the number of quackeries with or without requisite educational background. One needs to comment on the cut-price estate agent. Many believing that estate agency was a way to make easy money and believing that existing charges were too high in which perhaps they were encouraged by the media and such bodies sought to set up business charging in a variety of ways, but at a level significantly below the charges by the established agents in the area. Some charged lower rates of commission, others set fee for a specific service (Akomolede, 2016). It is against this background that this study seeks to assess quackery practice on real estate transaction in Abuja.

1.2       Statement of the Problem

Estate agency should be conducted by men and women with a background of professional knowledge who acknowledge and follow ethical standards prescribed by the leading professional bodies of the land (The Nigerian Institution of Estate Surveyors and Valuers NIESV) and the regulatory board the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON). The fundamental problem is that the term – Estate Agent is not statutorily defined in the context of real estate agency practice in Nigeria. The Nigeria real estate market is overwhelm with increasing number of quackeries who are victims of circumstances and have to change their careers informally, they neither have formal training, educational qualifications, nor professional expertise in the art and science of real estate agency, and have taken advantage of an apparent lax in the system to encroach into the landed profession. Due to their numerical strength and lack of awareness on the part of the people, they are widely consulted and fall victims of several fraudulent practices and cheats which end up given the profession a bad image in the eyes of the public.

1.3       Aim and Objectives of the Study

The aim of this project is to carry assessment of quackery on real estate transaction in Abuja.

To achieve this aim, the following specific objectives shall be pursued:

1. To examine the activities of quacks in estate agency in Abuja
2. To evaluate the effects of quackeries practice on real estate transactions in Abuja.
3. To identify the challenges affecting real estate agency in Abuja.

1.4       Research Questions

This study arose from the need to answer the following research questions:

1. What are the activities of quackeries in real estate transactions in Abuja?
2. What are the effects of quackeries on real estate transactions in real estate transactions in Abuja?

1. What are the challenges affecting real estate agency in real estate transactions in Abuja?

1.5       Significance of the Study

The need for this study arose because estate agency as a profession in this country has seen an influx of numerous quackeries because there exists a conflict between professionalism and commercialism in the practice. Quackeries people come in to provide agency services in the real estate market yet they have no knowledge of either real estate or the market within which it is traded. As a result, the real estate market and particularly in Abuja Municipal Area Council, is plagued by inefficiency and a lack of transparency. Transactions involving great sums of money are carried out in secret which keeps shrouding real estate in mystery and prevents many people from getting into such investments for fear of being defrauded.

The study therefore seeks to serve the needs of investors who may want to venture into the real estate market in Nigeria and particularly in Abuja. The needs of the professionals in the practice of estate agency will be addressed therefore contributing to the practice of real estate agency professionally and if the research findings are implemented, estate agents will understand better their job descriptions and cope with the changing needs of a more vibrant real estate market.

Developers/landlords and tenants will also benefit from this study since it will be brought to their attention why they should only do business with professional estate agents and therefore protecting them from fraudulent practices.

1.6       Scope and Limitations of the Study

This research is undertaken to carry out an indepth assessment of quackery practice on real estate transaction in Abuja. The study is limited to Abuja Municipal Area Council, the study seeks to understand how estate agency in Abuja can be made more professional and make the real estate market more accessible to investors by reducing the activities of the increasing number of quackeries in the study area.

Limitations

The researcher may face various problems when carrying out this field study. Some of these challenges include:

1. Some respondents were unwilling to fill the questionnaires since they were suspicious about the study. Many perceived it as sharing very vital information which they were not ready to furnish the researcher with.
2. Delays were experienced from the respondents who took very long to complete filling the questionnaires and constant postponement of the picking date proved to be very frustrating to the researcher. This could be attributed to busy schedules and had both cost and time implications on the researcher since the set timelines had to be changed and many follow-up calls and visits had to be made which was quite expensive.
3. Landlords were hostile and very suspicious of the research.
4. At times some of the respondents did not fill in the questionnaires adequately and ignored certain sections that required the giving of opinions which made it difficult for the researcher to make adequate conclusions.

1.7       Operational Definition of Terms

Assessment: According to Cambridge English Dictionary assessment is the act of judging or deciding the amount, value, quality, or importance of something, or the judgment or decision that is made

Quackery: Quackery is the characteristic practice of quacks or charlatans, who pretend to knowledge and skill that they do not possess, particularly in medicine. The quack makes exaggerated claims about his or her ability to heal disease, generally for financial gain.

Estate: Cambridge English dictionary define estate as a property or a large area of land in the country that is owned by a family or an organization and is often used for growing crops or raising animals: It’s a typical country estate with a large house for the owner, farm buildings, and estate workers’ houses.

Estate agent: Collins Dictionary define estate agent assomeone who works for a company or clients that rents or sells houses and land for people.

Real estate: According to Investopedia Real estate is property comprised of land and the buildings on it, as well as the natural resources of the land, including uncultivated flora and fauna, farmed crops and livestock, water and mineral deposits.

Market: According to business dictionary a market is an actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services, or contracts or instruments, for money or barter.

1.8       Background of the Study Area

Abuja was formally a town under traditional emirate of Suleja in Niger state, north central of Nigeria. The town is situated along the river Iku, a minor tributary of the river Niger at the foot of the Abuchi hills and lies at the intersection of several roads. The emirate’s savannas areas of approximately 2,980sqkm originally included four secondary Koro Cheifdoms that paid tribute to the Hausa kingdom of Zazzau. In the period 1804, Zaria, the capital of Zazzua (220km North-Northeast) was captured by warriors of the Fulani jihad (holy war). Muhamman Makau, the king of Zazzua (Sarkin Zazzua) guided a large section of the Hausa nobility to the Koro town of Zuba (10km southwards)

Abu Ja (Jatau) the brother of the king and later his successor, founded the town of Abuja in 1828 and a year later started the construction of the town wall. Abu Ja then proclaimed himself the emir of Abuja and withstood Zaria’s attacks, allowing Abuja emirate to remain an independent Hausa refuge. During the reign of Emir Abu Kwaka (1851-77), trade with the Fulani emirate of Bida (Westwards) and Zaria began. But the trade route between Lokoja (160km South-Southwest) and Zaria was disrupted by Abuja’s leaders, resulting in the British occupation of the town. During the reign of Emir Musa Angulu (1917-44) alluvial tin mining began.

A Hausa emir who retains advisory role oversees the traditional emirate, with its predominate Gbari (Gwari) and Koro population. During the administrative reorganization in 1976, Abuja town became the headquarters of a local government council. The town was renamed Suleja in the late 1970’s after development began on the urban area of federal capital territory of Nigeria (FCT). The new Federal capital adopted the name Abuja.

ECONOMY AND POPULATION OF ABUJA.

Abuja although is said to be bless with natural endowment such as; its rolling hills, isolated highlands and other endearing features which makes it a delight. The savannah grassland of the north and the middle belt, the riches of the tropical rain forest of the south and equable climate all combined make the city a soil rich agricultural and tourist heaven.   But despite all this, the city is not economically buoyant due to absent of industrial activities.

Projection called for a population of more than one million early in the 21^st century, the population estimate as at 2006 stand for a four million with annual growth rate of 2.8

PHYSICAL DEVELOPMENT OF ABUJA

Abuja created in 1976 by the federal military government of the late general Muritala Mohammed via decree No. 6 of the same year; it officially replaced Lagos in December 1991after fifteen years of planning and construction. The city was divided into two zones; central zones contains the national assembly, the city hall, national cultural institution, government related offices that include the administrative headquarters of all federal government ministries and parastatals, also major private sector organizations and foreign missions. The second zone provides housing, shopping facilities and other urban amenities.  

GEOGRAPHICAL LOCATION

The federal capital is located in the geographical center of Nigeria.it has a land area of 8,000square kilometers.it is bounded on the north by Kaduna state, the West by Niger state, the East and Southeast by Nasarawa state and Southwest by Kogi state. It falls within latitude 70^o20”north of the equator and longitude 60^o45”and 70^o39’.

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ASSESSMENT OF VACANCY AND OCCUPANCY RATES OF RESIDENTIAL PROPERTY

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ASSESSMENT OF VACANCY AND OCCUPANCY RATES OF RESIDENTIAL PROPERTY

ABSTRACT

This study assess vacancy and occupancy rates of residential property in Tammah, Nasarawa town. The specific objectives of this are to ascertain the extent of vacancy of properties in the Nasarawa town, to evaluate the causes of vacancy of properties and to examine the implication of vacancy of occupancy rate to property investment market in Nasarawa town. The research adopted the survey design which offers the opportunity to gather information through the use of questionnaires, personal interview and observation. A Sample size of 143 respondents was using which  was drawn from landlords and estate surveyors and valuers residents in Tammah. A structured questionnaire was administered to the respondents to gather relevant data for the study. Data were presented and analysed using simple statistical tools such as tables and percentage. The study revealed that the housing stock in Nasarawa is very adequate and that the extent of vacancy and occupancy rates of property is on the positive side. The study also shows that the vacancy and occupancy rate can affect the return on property investment. Finally, the researcher recommend that property investors should invest more in Nasarawa real estate market since the market has a positive indicator of making higher return on investments as it exhibited low vacancy rate and higher occupancy rate and that the investors and property developers should be very conversant with the forces of demand and supply of the real estate market so as to make investment decision that will not adversely affect their investments.

Key words: Vacancy rate, occupancy rates, Residential Property

CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

A vacancy rate serves as an important indicator of the health of a real estate market. But we cannot draw sound inferences about a market just by observing the rate alone because many factors contribute to a vacancy rate. The same rate may tell different stories, and different rates may tell the same story. The vacancy rate is the percentage of all available units in a rental property, such as a hotel or apartment complex, that are vacant or unoccupied at a particular time. It is the opposite of the occupancy rate, which is the percentage of units in a rental property that are occupied. High vacancy rates indicate that a property is not renting well while low vacancy rates can point to strong rental sales (Smith, 2015).

The vacancy rate is calculated by taking the number of vacant units, multiplying that number by 100, and dividing that result by the total number of units. The vacancy rate and occupancy rate should add up to 100%.In real estate, the vacancy rate most often represents units that are vacant and ready to be rented, units that have been turned off upon the exit of a tenant, and units that are not currently rentable because they are in need of repairs or renovations. A property owner can use vacancy rates as a metric for analysis. Changes in the percentage of vacant units versus occupied units, the length of time occupied units are remaining active, or other rental conditions can provide guidance regarding how competitive a property owner has made the property. If a property owner is charging significantly more or less than the rest of the rental market, this may be reflected in the overall vacancy rates. It can also provide information regarding the effects of price changes or advertising on unit occupancy.

While vacancy rates are commonly used to assess an individual property’s performance, such as a hotel monitoring its nightly vacancy rate, aggregate vacancy rates are also used as economic indicators of a real estate market’s overall health. Many firms servicing the residential and commercial real estate space gauge the strength of the overall industry using metrics such as vacancy rates, rental rates and construction activity. According to the natural rate hypothesis, fluctuations in apartment rents are driven by deviations in the vacancy rate from equilibrium or “natural” levels. One reason to estimate natural vacancy rates is to confirm this hypothesis. Beyond that, however, estimates of the natural vacancy rate for a rental housing market provide information that is potentially useful for investors, lenders and other real estate professionals. Comparing the natural rate at a point in time to the actual vacancy rate provides some indication of future rent movements in that market. In addition to its effect on the movement of rents, the level of the vacancy rate has direct implications for the return on property investment. In long-run equilibrium, the lower the natural vacancy rate, the greater the amount of rent generated by a given rental property, everything else held constant. If the natural vacancy rate declines over time, the return on rental property investment will rise, ceteris paribus.

Housing markets are often modeled as a series of separate but related submarkets, with differing supply and demand conditions in each. In the case of a rental market, there may be separate submarkets for different apartment types (one-bedroom, two-bedroom, etc.), and for different geographic locations. If submarkets exist, it is possible that natural vacancy rates will vary by submarket. In that case, information on natural vacancy rates is made more useful if available at the submarket level.

Empirical support for the existence of a natural vacancy rate in rental housing dates back to Smith (2015). Since then, a number of studies have focused on variations in the natural rate across both space and time. For example, Gabriel and Nothaft (2018) provide evidence of substantial variation across major U.S. metropolitan areas. In a more recent paper, Gabriel and Nothaft (2018) find the duration and incidence of vacancies, and the natural vacancy rate, to vary across metropolitan areas with a number of factors including housing costs, heterogeneity of the housing stock, tenant mobility, and population growth. This has necessitated the need to carry out an assessment of the impact of vacancy and occupancy rate on residential property in Nasarawa town; a case study of Tammah. 

1.2       Statement of the Problem

The vacancy rate is the fraction of rental properties not let at a point in time. This captures pressures in the residential property investment market. It becomes important to understand the balance between supply and demand, future pressures on rental prices and the typical duration of vacancy for a landlord’s budgeting purposes. The relationship between the vacancy rate and the housing production rate is expected to be negative as well. If the vacancy rate is high, the supply of residential property will be higher than the demand for residential property, which means that the property prices are stable or decreasing. Consequently, developers won’t have much stimulus to engage in residential property development and the housing production rate will be relatively low. This study seeks to assess the impact of vacancies and occupancy rate on residential property in Nasarawa town with particular reference to Tammah.

1.3       Aim and Objectives of the Study

The aim of this project is assess the impact of vacancies and occupancy rates on residential property in Nasarawa town.

The specific objectives of this are as follows:

1. To  identify the vacancies rate of residential property in Nasarawa
2. To ascertain the extent of vacancies rate of residential property in Nasarawa
3. To examine the causes of vacancies of residential properties in the study area
4. To assess the impact of vacancies and occupancy rates on residential property in the study area.

1.4       Research Questions

            The following research questions will serve as a guide to the researcher:

1. What is the vacancies rate of residential property in Nasarawa
2. To what extent are vacancies rates of residential properties in Nasarawa town?
3. What are the causes of vacancy of properties in the study area
4. What are the impact of vacancies and occupancy rates to residential property in the study area?

1.5       Significance of the Study

The findings of this research “Assessment of the impact of vacancy and occupancy rate on residential property in Nasarawa Town” will serve as a guide for investors to be able to make reliable investment decision that will ensure high return on investment.

The result of this study will serve as a guide to other researchers who are interested in further research into the impact of vacancy and occupancy rate on residential property investment market in Nasarawa and Nigeria at large.

1.6       Scope of the Study

The scope of this study covers the assessment of vacancy and occupancy rate on residential property in Tammah. The study is further limited to both side of Tammah that is, from Federal Polytechnic Nasarawa Junction to overhead tank and from Federal Polytechnic Nasarawa Junction to Polytechnic Staff School.

1.7       Operational Definition of Terms

Vacancy: Dictionary.com define vacancy as the state or condition of being vacant or unoccupied; emptiness.

Occupancy Rate: A measurement expressed as a percentage of the total amount of occupied space divided by the total amount of existing inventory. Occupied space is defined as space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant.

Vacant Space: Vacant space is defined as space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available.

Percent Leased Rate: A measurement expressed as a percentage of the total amount of leased space divided by the total amount of existing inventory. Leased space is defined as space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease.

Investment: An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in the future.

Real Estate: Real estate is the property, land, buildings, air rights above the land and underground rights below the land. The term real estate means real, or physical, property.

Property: In common law, real property (immovable property) is the combination of interests in land and improvements thereto, and personal property is interest in movable property. Real property rights are rights relating to the land.

Investor: An investor is a person that allocates capital with the expectation of a future financial return. Types of investments include: equity, debt securities, real estate, currency, commodity, token, derivatives such as put and call options, futures, forwards, etc.

Availability Rate: A measurement expressed as a percentage of the total amount of available space divided by the total amount of existing inventory. Available space is defined as the total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date, although it excludes space available in proposed buildings.

1.8       The Study Area

Nasarawa Emirate in Nasarawa State is located in the Central region of Nigeria. It is flanked by Keffi and the Federal Capital to the North. To the South, it is bounded by Benue River and to the west, it bordered the present Gadabuka and Toto Local government area which are of course, part of the Emirate. To the East, it is bordered by Doma, Lafia and Keana Local Government Areas all of Nasarawa State.

The founding of Nasarawa Emirate in 1835 AD was the consequence of palace tussle that arose in Keffi between Umani Makama Dogo then Madaki of Keffi and Jibrilu, son of Abdu Zanga (first Emir of Keffi).

 On the sick bed of Abdu Zanga, He gathered his brothers and sons and told them to appoint Umaru Makama Dogo as the Emir of Keffi which was never realized after the death of Zanga due to the betrayal to one Albarka. However, Makama Dogo was advised to move Westward of Keffi where the Kwato (Igbira) resides, fought then and established his own kingdom but he kicked against the idea and moved Yankardi, where he camped about ten kilometer South of Keffi.

Makama left his sons Ahmadu Manman Galadima and Manman Sani in Keffi as a flash back. He later left Yankardi where he arrived at a place occupied by Bassa speaking people called TAMMAH, met Bagobiri known as Kasimau, who assisted him in the establishment of a kingdom called Nasarawa (meaning victorious). Makama Dogo fought many wars in the course of his Islamization, fought Afo speaking people, conquered Ubbe, Usheni, Agwadama, Itta and Gwaffa.

Makama Dogo also conquered Panda due to some misunderstanding between him and Ohimege (the ruler of Panda). Makama Dogo fought the people of Toto (Igbira people) because of the combination of Islam and traditional way of worship by the people. After fighting other kingdoms like Dogo, Agaza and Udeni, Umaru told Madaki Ahmadu his eldest son to continue leadership after his death and should please be buried in Nasarawa town.

Physical Characteristics: The major things considered under physical characteristics of Nasarawa are, geographical location, temperature, rainfall, geology, wind, vegetation, humidity, soil.    

Temperature: The temperatures are generally high during the day, particularly between the months of March and April. The main monthly temperatures in the state range between 20⁰C and 34⁰C with the hottest months being March/April and the coolest months being December/January.

Rainfall: The study area experience dry season without or little’s rainfall from November to March of about 95mm, which is wet season is from April to October of about 1.30mm,

Vegetation: Nasarawa is situated in the Benue valley between the Benue river and Jos Plateau. This area lies within the part of southern guinea savannah. The vegetation of Nasarawa has, to a large extent resulted from extensive agricultural use of the land, the predominant vegetation type is partly savannah which is characterized by a discontinuous canopy, shrubs and grasses many areas are affected by man through bush burning during the dry season. Among the common trees are oil bean trees, locust bean free and isoberline trees.

Relative Humidity: The relative humidity is the measurement of deepness of the atmosphere which varies from place to place and different time of the day. The level of humidity in Nasarawa state in January is quite less that 40% which rises as from February to July to about 88%. By April when the steady rain commences it will be about 75% by August when the inter-tropical discontinuity is at it northern part, must position of the entire state will experience tropical marine wind and continues till December.   

Soil: The major soil units of Nasarawa belong to the category of oxisols or tropical ferruginous soils. The soils are derived mainly from the basement complex and old sedimentary rocks. Lateritic crust occurs in extensive areas on the plains while hydro orphic soils (limbic incept sols) occur along the flood plains of major rivers (Nyangba, 1995).

Socio-Economic Characteristics: Nasarawa main economic activity is agriculture; cash crop, such as yam, cassava and egusi (melon). Production of minerals such as salt is also another main economic activity of people in the state; Nasarawa produces a large proportion of the salt consumed in the country.

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AN ASSESSMENT OF THE ROLE OF GOVERNMENT IN ADULT LITERACY PROGRAM IN SULEJA LOCAL GOVERNMENT OF NIGER STATE

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

Literacy of the citizens is one of the concerns of many countries and the world at large. Literacy is the ability to read and write at a specific age. The literacy level of any country is one of the indices of its national development. Literacy is fundamental to information dissemination, socio-economic development and poverty alleviation among other things (National Bureau of Statistics (NBS), 2011). Low level of literacy and education in general can impede the economic development of a country in the current rapidly changing technology driven world (Indexmundi, 2012).

Education as the whole process of the development of an independent and integrated personality, it entails training and acquisition of special skills, knowledge, attitudes and values needed by an individual to be responsible and which would enable him to contribute his own quota, to the growth of the society of which he is a member ( Jekayinfa and kolawole 2010).Education is a process whereby the adult members of a community help the young ones to learn, as Nduca (2010) stated that, education is the process of cultural transmission and renewal, it is a three- way process of inheriting a culture, changing that culture for better or worse, and passing it to the younger generation.

Therefore, the worthy development of an individual for self comfort and control to some extent is a function of education. Both developed and developing nations have acknowledged that education empowers and engages the mind for the development of human and natural resources.Hence education is an inevitable instruments that catalysis national development(Heclans 2001).

The provision of adult education, including reading, writing, numeracy skills, and  information communication technology (ICT) for adults who wish to improve their literacy and numeracy  competencies to enhance their participation in personal, social and economic life, Adult literacy programmes should be primarily focused on learning outcomes.(Heclans 2001).As observed by (Igbo 2008) adult education is an instrument for helping the active population worldwide with information communication technology (ICT), which is a decisive tool for the smooth integration of economy in the global economy. It is concerned not with preparing people for life, but rather with helping/assisting people (adults) to live more successfully as useful and acceptable members of their societies and contribute meaningfully to the development of those societies. (Fasokun 2006).Farley (2010) also put forward that people who are more educated know why they are not supposed to make prejudice comments and consequently disguise their prejudices.  However, the poor public image of adult education field as an area of study for the old people is undoubtedly partly responsible for its low patronage as a discipline in Nigerians Universities (Aruma 2011).

Adult education was defined by UNESCO (United Nations Educational, Scientific and Cultural Organization), in Nzeneri (2008). As  the entire body of organized educational process, whatever the content, level and method, whether formal or otherwise, whether they prolong or  replace   initial education in schools, colleges and universities as well  as in apprenticeship, whereby persons regarded as adults by the society to which they belong, develop their abilities, enrich their knowledge, improve their technical or professional qualifications or turn them in a new direction and bring changes in their attitudes or behavior in the twofold perspective of full personal development and participation in balanced and independent social, economic and cultural development. Adult education is an aspect of basic education.  Nigeria as a developing country is concerned about the literacy level of its citizen and as such embarked on mass literacy campaign by the use of a programme known as “literacy for all” in the year 2020. (Heclans 2001). Therefore, Access to education is an important concern to nations all over the world. In Nigeria, it is observed that many sections of the population have no access to literacy education or the life skills necessary for their economic and social well-being. Nigeria has an adult literacy rate of 59.2% and adult illiteracy rate of 40.8% (UNESCO 2015). This represents about 40 million Nigerians.

Government has realized that unless aggressive measures are taken to scale up literacy, the Education for All (EFA) goals III and IV relating to learning and life-skills for all young people and 50 per cent improvement in levels of adult literacy by 2015, especially for women, and equitable access to basic and continuing education for all adults and youth by 2015 will not be achieved(NFE Policy Guideline 2012)). This has made the Federal Ministry of Education to launch the revitalization of youth and adult literacy programmes in March 2011 in order to help increase the literacy rate and ultimately contribute towards the achievement of EFA and Millennium Development Goals as well as the nationaldevelopment goals of empowering the people on wealth creation and economic growth.

It is against this background that this study seek to assess the role of government in adult literacy program in Suleja local government of Niger State.

1.2       Statement of the problem

Following the background given above, there is a great concern over the illiteracy rate in the world population, although 3^rd world countries have experienced increase in literacy rate over the past few decades. Illiteracy is a great hindrance to the promotion of national development.  It is not only an obstacle to the social-economic and political transformation of the country, but its eradication will also quicken the tempo of development.  Due to illiteracy many adult Nigerians, especially the populace at the grass root level, in Ilorin West Government Area seems not able to participate meaningfully in the development process of the district.

It has been proven over time that Adult Education is a major tool for eradicating illiteracy and its adverse consequences, this might have led to the consideration given to it by the National Policy on Education, but this study intends assessing level of Niger State Government towards achieving this.

2.3       Purpose of the Study

The main rationale of this study is to assess the role of government in adult literacy program in Suleja Local Government area of Niger State.

Specifically the study intends to:

1. Investigate the level of involvement of Niger State Government in adult literacy education in Suleja Local Government
2. Find out the strategies and innovations that government has put in place since the inception of adult literacy programme in Suleja Local Government.
3. Find out impact of adult literacy education on the indigenes of Suleja Local Government.

1.4       Research Questions

1. What is the level of involvement of Niger State Government in adult literacy programme in Suleja Local Government?
2. What innovation has the government initiated since the inception of adult literacy programme in Suleja Local Government?
3. What are the resultant effects of the implementation of adult literacy programmes on the adult learners in Suleja Local Government?

1.5       Scope of the Study

This study is an assessment of the role of government in Adult Literacy program in Suleja Local Government of Niger State. The population for this study is all adult literacy learners, organizers, instructors and facilitators in Suleja Local Government.

The targeted population for this study will be ten (10) adult literacy centres in Ilorin west, all the ten (10) centres were chosen and all the learners, organizers, instructors and facilitators in the centres were all chosen for this study. To elicit information from the respondents, questionnaires were administered to the respondents. The close- ended questionnaire to use comprises of two (2) sections; A and B. section A comprises of respondents demography data. Section B comprises, of questions on the impact of government on adult literacy programme.

The data collected form the respondents were quantified using descriptive statistic (frequency count and percentage) for both demographic data and to answer the research question.          

1.6       Significance of the Study

The findings of this study could be of benefit to the government, Adult education instructors, general public, adult literacy centers, Adult education unit in local governments, and adult learners.

Findings of this study will enable government to know the level of her involvement in adult literacy programme and adjust if need be. Also findings of this study will enable the instructors of adult education to insert more effort to their activities and source more from the government and other agencies for adequate material needed for the performance of their duties diligently and effectively. Findings of this studywill equally helpAdult literacy centers to make proper amendment and follow up.

More so, findings of this study willenlighten the staffs in adult education unit to be aware of the necessary things which are to be provided by the government for the recruitment and proper delivery of the classes to the adults. This finding will also benefit the adult education learners in literacy and numeracy skills associated with higher earnings, improved workplace productivity, better workplace safety and increased chances of stable employment.  The skills support success in higher level qualifications and attainment of other workplace skills; and provide adult learners with social benefits such as: improved personal well-being, social development of individuals, communities, better health and better parenting.  

1.7       Operational definitions of terms

• Adult: a grown up person, who has attained full maturity and is fully developed.
• Illiterate:an uneducated person, who lacks the ability to read or write.
• Literate: An educated person with competence in reading and writing also in counting and ability to do simple calculations.
• Adult education: This refers to the general enlightenment programme that is put together to develop the adults or matured citizens of the society.

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