An African Business Special Report Insurance in Nigeria The insurance survey was written by Niyi Obaremi Following hard on the heels of Nigeria s banking reforms, came the equally thorough reform of the insurance industry. The country s 104 insurance companies, many undercapitalised, were given until 28 February this year to raise their capitalisation thresholds by factors of over 1,000%. This led to a spate of mergers and acquisitions but when the dust had settled, 71 stronger companies emerged. Potentially Nigeria has the biggest insurance market in Africa but weaknesses in the industry meant that most of the large insurance business was underwritten by foreign companies. Now the domestic industry is poised not only to penetrate deeper in the domestic market but to expand to other regions of the continent. To mark this historic transformation in Nigeria s finance sector, African Business is publishing two Special Reports on the country s insurance industry. This is the first Special Report; the second will appear in the May issue. African Business April 2007 51
Big is beautiful Insurance companies in Nigeria proved to be their brothers keepers during the financial sector s re-capitalisation with no outright casualty emerging from the exercise. However, there is still a long way to travel for the long-dreamed of emergence of mega players in Africa s biggest insurance market. Things are looking up at last for Nigeria s insurance industry. Renowned for its under-performance and low capacity, the industry came out of an 18-month recapitalisation phase on 28 February this year appearing trimmer and raring to shake off decades of institutionalised lethargy. Industry capitalisation exceeded N200bn ($1.62bn) from a preconsolidation level of N30bn ($243m). Transformed overnight by its strengthened financial capacity, Nigeria s insurance companies are set to become dominant players in the African market where South African companies have held sway for decades in virtually all the vital performance statistics. Emmanuel Chukwulozie, chief executive of the National Insurance Commission (Naicom), which regulates insurance business in Africa s most populous country, grinned broadly as he handed out fresh certificates to the last batch of the 71 firms which achieved the recapitalisation requirements set by government in September 2005. Emmanuel Chukwulozie, chief executive of Niacom: 'The insurance industry is on the threshold of a new era.' Chukwulozie s decision to adopt a piecemeal announcement of the successful companies contrary to earlier repeated assurances that results would only be known after the 28 February deadline had threatened to mar the conclusion of the first official capital level increase. This capitalisation directive was the first ever imposed in the industry s history with any semblance of regulator enforcement. Yet company officials who arrived at Naicom s headquarters in Abuja just hours before the expiry of the deadline were only too happy to be recertified and adjudged fit and qualified to continue in business in an industry with huge untapped potential and opportunities. The 71 companies that had increased their capital to the required level comprised 43 non-life underwriting firms, 26 life insurers and two reinsurance companies. In reality, only 51 players are left on the Nigerian insurance landscape post-consolidation, until, that is, the inevitable arrival of fresh entrants (see box). Twenty of the primary insurance companies had both General Business and Life portfolios which Naicom had recertified as distinct corporate entities in line with a requirement of the reform programme. Prior to the commencement of the industry s consolidation programme, there were 104 registered insurance and four reinsurance companies. And, going by the make-up of the 71 survivors, Chukwulozie had achieved a zero-liquidation consolidation exercise. He had stated shortly after the announcement of the consolidation that he would not be an undertaker for the industry. Savouring the euphoria of this historic moment, Chukwulozie said the insurance stakeholders are now at the threshold of the new era where industry will be able to meet the dreams and aspirations of the Federal Government for the insurance sub-sector in Objectives of the insurance sector reforms To increase the industry s low retention capacity, which had stunted its growth. Government was especially concerned about low local underwriting capacity for big ticket risks in the oil and gas, aviation, marine and other special risk sectors and was determined to dam the huge foreign exchange outflow engendered by the situation To attract foreign capital infusion into the industry for enhanced premium growth and profitability Achieving a consolidation that will produce companies capable of meeting claims obligations and compete at the continental and global levels To enable operators to attract the wherewithal for strategic investments in human capital development ie, to attract, train and retain professionals able to utilise new technologies for greater efficiencies Creating a competitive environment which leads to brand activities, increased investment and better public awareness of the benefits of insurance to society at large Achieving the necessary economies of scale that will make insurance affordable and accessible Encouraging the industry to leverage on synergies from mergers and acquisitions and other alignments to achieve superior product innovation, deeper market penetration and product distribution African Business April 2007
Nigeria s insurance companies are set to become dominant players in the African market Nigeria. Claiming his Commission had been transparent, firm and fair throughout the process he nevertheless cautioned that the list of successful companies was provisional. Sounding like a fellow-traveller of the Federal Government s beleaguered anti-corruption crusade, the Naicom chief said he would withdraw the reissued licence of any company found to have falsified figures or made dishonest claims. Naicom expected that all sources of funds for the exercise complied with the Federal Government s anti-money laundering legislation and its due diligence guidelines. Our teams of inspectors and verifiers are still working on all submissions and any infractions of the law will be dealt with accordingly. Chukwulozie s threat of licence withdrawals in the face of established infractions has not dampened the upbeat mood of the industry. The word mega is on every lip as operators confidently assert that the longed-for era of mega insurance companies had come at last and that the industry is set to raise its dismal performance record as a net contributor to the GDP. The reform programme itself was initiated in September 2005 by former Finance Minister Ngozi Okonjo-Iweala as part of President Obasanjo s government s wide-ranging reform of the financial sector of the economy. The powerful banking industry was undergoing a long overdue reform programme under the Central Bank of Nigeria s governor Charles Soludo and the Finance Ministry. It was only a question of when, not if, the reform process would tackle the insurance sector, the banks poor relation in the financial sector. The insurance sector s consolidation process was considered inevitable by the industry, but many were astounded by the size of the recapitalisation pill they were expected to swallow. Varying degrees of minimum capital level increases were prescribed for the three categories of business. For Life Business the minimum capitalisation was raised by 1,233% from N150m ($1.2m) to N2bn ($16.2m), while General Business operators were required to jack up their capital from N200m ($1.62) to N3bn ($24.3m). The country s four re-insurance companies were required to make greater capitalisation increases than the combined increases for Life and General businesses. They were required to raise N10bn ($81m) to be re-certified an increase of 2,757% from the previous level of N350m ($2.83m). The banking sector s consolidation had required 1,110% minimum re-capitalisation but each bank was required to capitalise to at least N25bn ($202m), five times the capital level of insurance companies with licences for General and Life businesses. Whilst the industry accepted the rationale for the consolidation, many insurers were not only concerned at the magnitude of the capitalisation increases, they felt that the timing was unfair to the sector as it came during the final period of the banking sector s consolidation reform and thus after the capital markets had been repeatedly drawn upon by the banks. They feared market fatigue compounded by the grim reality of investor apathy for insurance stocks and the huge cost of taking capital levels to what some operators regarded as stratospheric heights. They believed that government had sounded the death knell for many insurance companies. Some leading industry players like Industrial And General Insurance Company Ltd (IGI), Nicon Insurance plc and Leadway Assurance Ltd appeared unperturbed by the capital increases. IGI, the leading private insurer in Nigeria for the past decade and an international player (for example, it owns 60% of the National Insurance Corporation of Uganda), was already looking beyond the N5bn ($40.5m) minimum capital for composite operators a level African Business October 2006 53
which IGI had attained as far back as December 2004. The industry s umbrella trade group, the Nigerian Insurers Association (NIA) moved quickly to advise its members on what the recapitalisation exercise required. It organised a two-day Insurance Directors and Investors Workshop on Capitalisation some weeks after the consolidation agenda was unveiled. Carefully selected professionals and stakeholders were invited to present papers on topics covering a whole spectrum of issues involved in consolidation. They included Options and Prospects for Recapitalising the Industry, and Critical Success Factors for Profitable Management of Insurance Institutions, among other themes. Welcoming participants to the forum, the then NIA president and managing director, Leadway Assurance s Oye Hassan-Odukale said the NIA was determined to prepare and thoroughly educate our members on the critical issues involved in the consolidation and to sensitise prospective and existing investors of investment opportunities in the insurance industry and the need to increase investment level in the industry. The finance minister also sent the industry a message of encouragement, but made it clear there was no going back on the measures. In the weeks following the workshop, the industry took tentative steps towards signing several memoranda of understanding (MOUs), as small players jostled for would-be merger partners whilst the likes of IGI, Nicon and Leadway Assurance waited in the wings for acquisition pickings. A number of the MOUs were aborted as corporate alliances were dissolved because of critical merger issues. Royal Exchange Assurance, the oldest player in the market, teamed up with Phoenix of Nigeria Assurance and African Prudential Insurance. IGI merged with its subsidiary Postal Life and General Insurance Company and also acquired Nasal Insurance Company (formerly the insurance arm of the Dangote Group, the manufacturing and trading conglomerate). Nicon, formerly government-owned and a market leader for many years, bought out the non-life business of UBA Insurance, owned by the giant United Bank for Africa group. Sovereign Trust Insurance plc consolidated a merger with three companies (Confidence Insurance plc, Coral International Insurance Company Ltd and Prime Trust Insurance Co Ltd), bought two companies (ACEN Insurance plc and Guardian Trust Insurance Ltd) and then sold off Guardian Trust Insurance to PHB Bank the latest entrant from the banking sector on the eve of the recapitalisation deadline. Leadway Assurance, AIICO Insurance, Niger Insurance, Cornerstone Insurance plc, Crusader Insurance, Goldlink Insurance, Prestige Assurance, Law Union and Rock Insurance, and the bank-owned Guaranty Trust Assurance (GT Bank), Zenith General Insurance (Zenith Bank), WAPIC Insurance (Intercontinental Bank), Heirs Life Assurance (UBA Group and South African partners) and Union Assurance Co Ltd (Union Bank) easily also made the list (see table). It is early days yet, but some critics are already bickering about the size of the market. Many had expected the market to shrink to about 20 mega companies just as Charles Soludu s banking sector consolidation exercise had cut down the industry size from 85 to 25 banks. The insurance industry may be further trimmed during the second wave of consolidation which, going by recent statements from leading operators like IGI and Leadway and Crusader, may have started already. List of recapitalised Insurance companies non-life insurance Industrial and General Insurance Company ltd NICON Insurance plc AIICO Insurance plc Leadway Assurance Co ltd Niger Insurance plc Cornerstone Insurance plc Custodian And Allied Insurance Co ltd Equity Indemnity Insurance Co ltd Law, Union and Rock Insurance plc Goldlink Insurance Co ltd Guinea Insurance plc Oceanic General Insurance ltd Prestige Assurance plc Standard Trust Assurance Co ltd Zenith General Insurance Co ltd Unitrust Insurance Co ltd Guaranty Trust Assurance Co ltd Sovereign Trust Insurance plc WAPIC Insurance plc Standard Alliance Insurance plc Great Nigeria Insurance plc Royal Exchange Assurance (Nigeria) plc Crusader Insurance plc ADIC Insurance Co ltd LASACO Assurance plc International Energy Insurance Co ltd Regency alliance Insurance Co ltd Fortune Assurance Co ltd Consolidated Hallmark Insurance plc Mutual Benefits Assurance plc NEM Insurance plc Sterling Assurance Nigeria ltd Linkage Assurance Co ltd Anchor Insurance Co ltd Kapital Insurance Co ltd Universal Assurance Co ltd Yankari Insurance Co ltd Nigerian Agricultural Insurance Co ltd Union Assurance Co ltd Oasis Insurance Co ltd Investment and Allied Co ltd Guardian Trust Insurance Co ltd life insurance NICON Insurance plc IGI Life Insurance Co ltd AIICO Insurance plc Goldlink Life assurance Co ltd Leadway Life Assurance co. ltd Niger Life Insurance plc Oceanic Life Assurance plc Zenith Life Insurance Co ltd Capital Express Insurance Co ltd UNIC Insurance plc Equity Life Insurance Co ltd Alliance & General Life Assurance Co ltd GT Life Assurance Co ltd WAPIC Life Insurance plc Standard Life Alliance Assurance plc GNI Life Assurance ltd Royal Prudential Life Assurance plc Crusader Life assurance plc Lasaco Life Assurance Co ltd ADIC Life Assurance plc Guardian Express Assurance plc Heirs Life Assurance plc Mutual Benefits Life Assurance plc African Alliance Insurance ltd Cornerstone life Assurance plc Union Life Assurance plc reinsurance Nigerian Reinsurance Corporation Continental Reinsurance plc 54 African Business April 2006
Selling the message Just a week after the insurance regulator, the National Insurance Commission (Naicom) announced the result of the mandatory recapitalisation exercise, a headline in the one of Nigeria s newspapers read Insurance Stocks Dominate Price Table. According to the report, a dozen insurance stocks had made the 36-strong price-gainers list during the previous day s trading. This was a rare occurrence for Nigeria s insurance industry, but these are new times for an industry with a long history of chronic investor apathy. The recapitalisation exercise saw the industry shrink from 104 companies and five re-insurers to 71 insurers, made up of 49 companies, and two re-insurers. Naicom s measures had also boosted industry capitalisation by 666% from N30bn ($244m) to N200bn ($1.62bn). Investors seeking decent returns had previously shied away from insurance stocks, earning the industry the reputation of being a perpetual under-performer. Insurance services have historically not been popular with the Nigerian public. Less than 1% of the country s population of 140m, according to the available statistics, has any form of insurance policy. Poor public awareness regarding the principles of insurance has not helped, and even among those Nigerians that do know the benefits of insurance cover, there remains a widespread perception that Nigerian insurers are reluctant to settle claims. According to the Swiss Re Global Report for 2004, the Nigerian industry had only 0.02% of the global market. The report ranked Nigeria 62 out of 88 countries in terms of annual premium volumes; 69th on life funds and a dismal 86th on insurance density. With such a low insurance penetration level, it is hardly surprising that the industry s contribution to the country s GDP has remained below 1%. While South Africa s industry s premiums as a percentage of GDP amounted to 15.8% in 2004, Nigeria s was just 0.77%. Previous efforts to raise the industry s capacity through increased capitalisation had barely achieved anything. Most insurance companies seemed to believe that remaining a small operator was the preferable strategy and organic growth through mergers and acquisitions was generally avoided. In the past, the regulatory framework had had little effect with scant compliance with recapitalisation directives. Many companies adjudged to have met the 2004 mandatory capital increase had, in reality, attracted little or no fresh injections of funds into their operations. Not so the latest capitalisation exercise. It had dawned quickly on the fringe players that the merger option was the surest way to avoid imminent liquidation. As frontline players such as IGI, Leadway, Cornerstone, AIICO, Niger and others embarked on private placements, rights issues and IPOs to meet the new capital requirements, merger arrangements mushroomed. A dozen merger deals were concluded, with the groups usually adopting the name of the lead brand in the merger. Encouraged by the seriousness of the insurance companies to transform themselves into key players, investors responded with enthusiasm. Official figures have not been revealed but consensus feelers from the industry have revealed that a couple of IPOs were greatly oversubscribed whilst most rights issues and private placements recorded high success rates. Even the international financial community gave its endorsement to the reform process. The International Finance Corporation (IFC), the private sector arm of the World Bank, injected $14m as equity investment into the top player, Leadway Assurance, saying that the investment would enhance the insurer s institutional building programme. According to IFC s director for sub-saharan Africa, Thierry Tanoh, IFC s investment in Leadway is our first in a composite primary insurer in Nigeria and it signifies our belief in the country s insurance industry and on-going reforms in the sector. He added: It is becoming increasingly important for primary insurance companies in Nigeria to reach globally competitive levels and we believe that our investment in Leadway will be a catalyst for such growth. The industry itself is responding to the momentum of this flurry of investment. Many companies are planning a fresh round of capitalisation. Remi Olowude, executive vice-chairman of IGI, believes the biggest insurance company must not be smaller than the smallest bank and has outlined his strategies for the company. IGI was the first Nigerian insurer to operate offshore with the company s June 2005 acquisition of a controlling interest in the National Insurance Corporation (NIC) of Uganda. Olowude forecasts his company s capitalisation reaching N25bn ($203m) the minimal capital for Nigerian banks by year end 2008. A number of players (Leadway, AIICO, Royal Exchange, Cornerstone, Crusader and others) who, like IGI, have exceeded capitalisation levels may also be planning return trips to the capital market. Even so, insurance operators are very much aware that fatter capital will not necessarily herald the era of mega companies that can compete at the global level. The industry s future will be determined largely by what it makes of the enormous growth potentials at home and on the continent and the post-consolidation challenges it faces in its immediate operating environment. The challenges for insurers in Nigeria in the post-consolidation era are as formidable as the vista of opportunities awaiting exploitation. Nigerian insurance companies are aware of the need to grow most rights issues and private placements recorded high success rates 58 African Business April 2006
their contribution to the country s GDP and assume a leadership role in the African market. Some of the challenges and opportunities include: The deepening of insurance penetration for premium growth Insurance penetration in Nigeria, with its 140m population, remains very shallow. The recapitalised primary insurers are now equipped with the wherewithal to achieve exponential growth in personal lines through massive branch expansion and the development, distribution and marketing of low-priced life products which will deepen the market and expand the premium base of operators. Strategic increases in their bricks and mortar presence across the country will assist insurance companies to take advantage of the government s pension reform act which requires employers with five employees or more on their payroll to take out a Life Policy in favour of each employee to the tune of three times the total annual emolument of the employee. The subsequent expansion in group life policies across the economy will yield a huge quantum of funds which will support investments in the economy and improve the bottom line of insurance operators. Improving product distribution The economies of scale arising from the consolidation should boost product distribution. More insurance companies will borrow a leaf from the channel marketing strategies of bank-owned insurers such as Guaranty Trust Assurance plc and Heirs Assurance which have tapped into the banks large branch profile for the marketing and distribution of life insurance and investment-linked personal insurance products. Optimising the oil & gas local content policy A key objective of the insurance reform agenda is the strengthening of poor local retention capacity in the underwriting of big ticket risks, mainly due to historically poor capitalisation. Company profiles Industrial & General Insurance Co Ltd (IGI) Industrial & General Insurance Co Ltd (IGI) is Nigeria s biggest insurer post-capitalisation with a capital base in excess of N10bn ($81.42m). As Nigeria s leading provider of risk management services and financial security solutions for more than a decade, IGI is the insurer of choice for many major players in the key sectors of the Nigerian economy including oil and gas, energy, construction and engineering, telecoms, aviation and marine delivering professional services in life and general insurance and related financial services. In recent years, IGI has embarked on a global presence strategy that has seen the establishment of offshore presence in other African countries and strategic business co-operation alignments with top insurance and reinsurance firms in Europe. IGI became the first Nigerian insurance company operating offshore with its acquisition of 60% equity in the National Insurance Corporation (NIC) of Uganda in June 2005. Established in 1992, IGI earned its commanding profile in West Africa s largest economy from a consistent record of strong financial capacity, high earnings and growth, consistent profitability, professionalism and technical expertise and a reputation for client service of the highest quality. These, in turn, were achieved through IGI s policy of employing and developing performance-driven staff at all levels of the organisation and a deliberate fostering and nurturing of the company s core values of excellence, integrity and passion. Only four years after it commenced operations, IGI became, in 1996, the first Nigerian insurance company to earn N1bn in annual premium income, having established market leadership through the demonstration of technical expertise and exceptional competence in the underwriting of specialised risks. Today, IGI is the largest and fastest growing privately-owned insurance company in Nigeria, with shareholders funds in excess of N10bn ($8.14m) and assets of over N15bn ($122.12m). IGI s special risks division includes the construction and engineering department manned by specialists and professionals with strong international experience and project exposure. This division also has a marine and aviation department that has handled and managed several big ticket risks, providing effective and competitive solutions for public and private institutions. Leadway Assurance Co Ltd Founded in 1970, Leadway Assurance has been a leading player in the Nigerian insurance market priding itself for its close attention to relationships, including strong brokerage ties. The company attracts 80% of its business from Nigeria s broker network. The company emerged from the recent recapitalisation exercise greatly strengthened, attracting an equity injection of $14m from the International Finance Corporation (IFC). It recently won the prestigious THISDAY Insurer of the Year Award. The pivotal point at Leadway is the customer and the company has enjoyed a steady growth in its commitment to providing integrated insurance and financial services to its numerous clients. The company has substantial investments in key sectors of the economy including the major banks (it has a seat on the board of First Bank) and the telecommunications sector. The company s remarkable success has been possible because of its sound professional and business standards backed by the integrity of its directors. An uncompromising commitment to the integrity of service at Leadway was instilled by its late founder, Sir Hassan O Odukale. As an astute businessman, the founding managing director and later chairman of Leadway nurtured the company to achieve an enviable position in the Nigerian insurance industry. His vision of a dedicated service to all customers remains a guiding principle that shapes the policies of the company. Leadway remains a private company with 28 shareholders, five of whom are corporate investors, and one a trust corporation. 60 African Business April 2006
Company profile Sovereign Trust Insurance plc Sovereign Trust Insurance plc commenced business in January 1995 with an authorised share capital of N30m ($231,000) and a fully paid-up capital of N20m ($154,000) following the acquisition and recapitalisation of Grand Union Assurances Ltd. Currently the authorised share capital is N3.5bn ($28.45m) with a fully paid-up capital of N1.12bn ($9.1m) with ownership made up of 441 shareholders out of which a board of eight directors was constituted. The company is licensed as a composite insurer by the Federal Government with authority to underwrite all classes of Life and Non-Life business. The company operates through a network of offices, with the head office on Victoria Island, Lagos, and four branches in Apapa, Port Harcourt, Ibadan and Abuja. Its vision is to be the best global provider of insurance services, striving to be a highly professional and innovative company by providing the best forms of insurance protection and risk management services to its various policyholders. Sovereign Trust has assembled a management team made up of highly experienced professionals. The company is fully computerised and operates as a composite insurance company. The products and services offered cover Marine and Aviation, Motor, Fire, Theft, Personal Accident, Consequential Loss, Money, Workmen s compensation, Goods-in-Transit, Public Liability, Fidelity Guarantee, Professional Indemnity and other miscellaneous forms of insurance. The company also specialises in packaging combined all-risks policies for various segments of the economy and comprehensive risk management services carrying out risk surveys and making appropriate recommendations to minimise loss impacts. Adequate reinsurance treaties, arranged by Glanvill Re and UAIB Re and placed with a consortium of reputable reinsurance companies. provides necessary support in the event of large claims. Some of Sovereign Trust s major corporate customers include Celtel Nigeria (formerly VMobile Nigeria), MTN Nigeria, Shell Petroleum Development Co, First Bank Nigeria plc, Alcatel Nigeria Ltd and the Nigerian Civil Aviation Authority. In December 2006, Sovereign Trust Insurance plc officially listed with a successful rights issue and private placement, also implementing a four-way merger, absorbing Coral Insurance, Confidence Insurance and Prime-trust Insurance. Having complied with the Naicom regime on capital adequacy to underwrite non-life risks, Sovereign Trust s corporate strategy is to grow its competencies, expand its offerings, and drive new markets while consolidating old ones. It also intends to rapidly expand operational capacity through new investments in technology and is entering into partnership intended at building a strong non-life insurance franchise in Nigeria. The industry is set for intense competition as companies face unaccustomed returns With improved financial strength, insurers are well-positioned to take advantage of the government s local content policy (LCP) on the underwriting of oil and gas risks. The LCP grants local insurers the opportunity to insure 45% of oil and gas business in the economy (this will increase to 70% in 2010). The LCP is designed to end the era of premium leakage occasioned by patronage of offshore insurers and re-insurers by the oil multinationals operating in the country. However, without the required level of underwriting capacity and financial strength, the LCP remains only a potential premium and capacity grower. IGI, a leader in the Nigerian market on special risks underwriting, has been the first in positioning the industry for this challenge through its development of an oil and energy treaty. Supported by Lloyds, IGI s Energy treaty offers capacity in excess of $200m. Boosting marine and maritime business The Cabotage Law provides the opportunity for high premium earnings for insurers in the marine sector, but operators must develop technical capacity to benefit fully from the incentives this law presents. Increased competition The industry is set for intense competition as companies face unaccustomed returns on investment mandates from shareholders whilst battling for a share of a market already transformed by the exploitable opportunities which had hitherto been beyond the reach of most players (oil and gas, marine, aviation, branch expansion, ICT acquisition, etc). Emerging frontline players will raise the bar in product development, branding and corporate governance. The challenge for the industry and its regulator Naicom is to prevent a return to the practice of rate-cutting and other unethical business practices which stunted the industry s growth. Integration issues Merged companies face the challenge of achieving a smooth and effective integration of varied technical and human capital capacities arising from the differing business models and cultures. This will achieve the best utilisation of resources. Furthermore, the acquisition of the right ICT infrastructure to deliver fast and efficient customer-centric services, staff restructuring, skill development and re-orientation and attraction of skilled manpower are key integration issues. Claims settlements The bane of the insurance industry has been its poor image due, in the main, to a negative claims payment reputation. Apart from the imperative of improving the claims performance of individual members and to regain public confidence, the reputation problem must be tackled at industry level through strategic and intense awareness and branding campaigns to create a positive industry image. Armed with stronger finances, more Nigerian companies are expected to seek offshore opportunities across the continent and further afield. Consequent international acquisitions and corporate alliances will lift the industry s status at the global level. 62 African Business April 2006