Nigeria Police Force (NPF), security trust funds of states, grassroot sports development, health institutions and schools have emerged the highest beneficiaries of corporate social responsibility (CSR) projects in 2017, the analysis of the CSR donations and sponsorships of 63 firms by BusinessDay Research and Intelligence Analysis (BRIU) has shown.
The combined CSR expenditure of the 63 firms in 2017 amounted to N10.64 billion, representing 35 percent increase over N7.91 billion spent by the same firms in 2016. All the 63 firms are listed on Nigerian Stock Exchange (NSE) except the food and beverages giant, FrieslandCampina WAMCO.
Among the highest beneficiary is the Nigeria Police Force as well as institutions such as the police cooperatives, hospital, Police College and states’ security trust funds. They all received N1.08 billion as CSR donations for boosting their capacity for effective crime control, and that represented 10.17 percent of the total CSR donations by the firms under consideration.
CSR projects in the education sector gulped N884.56 million or 8.34 percent of the total CSR budget in 2017, while sports development at the grassroot and supports to health institutions attracted N603.62 million and N602.06 million respectively, representing 5.69 percent and 5.68 percent of the total CSR spend last year.
By implication, security, education, sports and healthcare topped CSR projects in 2017. And that corporate institutions are now supporting the security formations in the country may not be unconnected with the rising cases of murders by Boko Haram insurgents and suspected Fulani herdsmen, kidnapping and bank robberies.
While this gesture towards the police is for the benefits of all Nigerians, it is also in the interest of the corporate organisations in the country to continue to support the Nigeria Police and other security formations in the country as this has the tendency to raise their brand values.
In 2015, CSRHub-Brand Finance, a global leader in evaluating the impact of CSR projects across the world, found that executing projects in areas such as community development, energy and climate change, as well as training, health and safety have the capacity to increase the brand values of corporate organisations.
“The strongest relationships between sustainability and brand were for compensation and benefits, diversity and labour rights, training, health and safety, and environment policy and reporting. All of these relationships were positive—better performance on these indicators seemed related to higher brand values”, the 2015 CSRHub-Brand Finance Study shows.
The five highest spenders on CSR were Zenith Bank, FBN Holdings, Dangote Cement, Guaranty Trust Bank and Lafarge Africa. Zenith Bank committed N2.61 billion to different CSR projects in 2017, representing an increase of 2 percent over N2.56 billion spent in 2016.
First Bank and other institutions within FBN Holdings spent N1.26 billion on CSR last year as against N914 million expended in 2016, representing an increase of 38 percent. Cement giant, Dangote Cement spent N1.02 billion in Nigeria in 2017 compared with N474.41 million in 2016, meaning that its CSR budget increased by 115 percent within a year.
Guaranty Trust Bank (GTB), a household name in grassroot sports development, increased its 2017 CSR budget by 93 percent to N867.11 million up from N449.62 million in 2016. Lafarge Africa spent N661.63 million on different communities in around its areas of operations in 2017, however, its CSR spend fell marginally by 1 percent when compared with N669.08 million spent in 2016.
The top five aforementioned CSR firms collectively expended N6.42 billion last year, translating to an increase of 26.8 percent over N5.06 billion they spent in 2016. They accounted for 61 percent of the total CSR budgets of the 63 firms under consideration.
When classified by industry, firms in the banking sector accounted for the bulk of the 2017 CSR expenditure as they committed N8.11 billion to donations and sponsorships compared with N5.45 billion in 2015. In other words, N76 out of every N100 spent last year on CSR was given by an institution involved in the provision of banking services.
Also, firms in the brewery industry spent N79.29 million last year as against N147.17 million in 2017. Cement manufacturers spent N1.70 billion last year as against N1.21 billion in 2016. Construction firms committed N68 million to CSR last year up from N56.9 million in 2016. Insurance firms committed N105.66 million to CSR in 2017 as against N95.36 million in 2016.
Oil and gas firms spent N305.19 million in 2017 in contrast to N501.10 million in 2016. Firms in the healthcare sector spent N52.92 million in 2017 as against N173.16 million in 2016. Agro allied firms spent N114.31 million last year in contrast to N155.36 million expended in 2016. Further details are in the forthcoming CSR and Banking Reports 2018 by BRIU.
