Many poultry farmers complain that middlemen involved in the marketing of poultry products make it difficult for them to make optimum profit from their products. Yet they do nothing about it. This is because most poultry farmers feel helpless against the domineering influence of the middlemen. However, this needs not be so. With careful planning, a smart farmer can counterbalance the powers of the middlemen, and even when he has to deal with them, it is from a position of strength.
What are the strengths of the middlemen?
*They are aware that your products are perishable, so if they can hold you to ransom by delaying a little, you will be forced to sell.
*They often have cash to pay, and they know that you desperately need the cash in their wallets.
*They are the ones who KNOW who the consumers are, where they are, what they buy, when they buy, why they buy (or will not buy), and how they prefer to buy. So they are convinced that without their help, your products will perish on the farm.
So, what do you need to do? You need to stop romancing with the idea that you are a producer, and not a marketer. Of what use is your production if it does not get to the market, and bring back value to you in form of profitable returns? If we agree that production is useless in the absence of marketing and sales, then we should all get interested in the marketing end of our respective vocations. Even if we are not going to be actively INVOLVED, we must at least be actively INFORMED about marketing trends, and the factors that impinge upon the marketability and profitability of our products. I suggest just a few thought starters:
- Adopt production and storage practices that elongate the shelf life of your poultry products. This implies that the feeding, the drinking water, the biosecurity protocol, and egg collection practices must be such that contribute to longer shelf life of your eggs. The same token applies to broiler farmers. In fact, flock hygiene is extremely important for carcass quality and shelf life in broilers, and we can only neglect it to our financial peril. Then, we come to storage. Optimum ventilation, maintaining appropriate temperatures, avoiding contaminants, and getting rid of pests are some of the ways to do this during storage.
- Don’t Get Broke. Adopt cash flow policies and practices that enable you to have reserve cash all the time. Do not depend on today’s inflow for tomorrow’s recurrent expenditure – you may not be able to hide your desperation for cash from a smart middleman. This loops back to farm capacity. Limit your farm size to a capacity that you can run efficiently with available working capital. Stocking way above your available capital and relying on “faith” to meet up with recurrent expenditure will compromise your bargaining power. Don’t do it!
- Get to know the market intimately. In your area, get to know who the consumers of your farm products are. Where are they? Are they clustered or diffuse? Knowing where they are may in fact inform your decision to boycott middlemen and reach out to your consumers by yourself (i.e. become a retailer, especially if your farm is small / moderate sized), or to select your middlemen with greater precision. What do they buy? Do they prefer medium sized eggs or large eggs? When will they buy? When will they not buy? (so that you can adjust your expectations, and avoid planning important expense outlays for low seasons). Are there other factors that could make them better inclined to buy your products (e.g. will more buyers come if someone is standing by to help them cut the chicken into pieces for free? Will more buyers come if we open on Sunday evenings and public holidays?). Etc.
These are a few of the things that you can do to get a grip on your market. The point being made is this – do not surrender to the middleman. The middleman is primarily a knowledge worker – not a “labourer”. You can get acquainted with what he does by seeking to become equally knowledgeable about the market. As a producer who is knowledgeable about the market, even if you choose to work with the middleman, he can no longer hoodwink you; because you know.
For optimum profit therefore, please get to know your market intimately.
The Bank of Agriculture (BOA) has said that it will assist the Agro-allied Agricultural Commodities Cooperative to access loans from the Central Bank of Nigeria.
The N220 billion loan is set aside by the Federal Government to be disbursed through the Central Bank of Nigeria to Nigerian farmers.
During a meeting with agro-allied farmers in Abuja, the Representative of the BOA, Mrs Attimah Rufina, appreciated the efforts of the farmers to partner BOA in accessing their loans.
“We appreciate your struggle to make BOA your partner. BOA is part of the N220 billion loan; we are part of the committee that the Federal Government set up for the loan.
“We are prepared to go with you to the CBN. They are still the one to bring out the money for us in the BOA to give to you farmers.
The BOA representative, however, noted that one of the challenges of the bank is recovery of loans from the farmers. She urged the leadership of the agro-allied to partner with the bank in order to help recover the loans from the farmers.
In her response, the Coordinator of the Agro-allied Cooperatives, Professor Victoria Adesuyi, pledged the support of the cooperative to recover any loan taken by its members. [SOURCE; TRIBUNE]
The Jigawa Government on Tuesday said it has recorded three cases of bird flu outbreak and has culled over 5, 000 birds in the state.
Dr Abdullahi Birniwa, the Director, Veterinary Service, State’s Ministry of Agriculture made this known in an interview with the News Agency of Nigeria (NAN) in Dutse.
Birniwa said the outbreaks were recorded in three different farms in Hadejia, Taura and Dutse Local Government Areas of the state.
He explained that when the symptoms were noticed in the affected farms, the ministry took a sample to the National Laboratory, Vom in Jos, where it was confirmed.
The director said that the ministry was directed to cull all birds in the affected farms.
According to him, over 5, 000 birds have been culled in the operation.
Birniwas said the affected birds included Turkeys, Ducks, Chickens and Geese.
He further explained that all the affected farms were sprayed with disinfectant to prevent further spread of the disease.
The director said that the operators of the affected farms were directed not put another birds until further notice. (SOURCE:NAN)
The Nigerian Agricultural landscape is opening up very rapidly so much so that the international investing community cannot but notice. A lot of improvements have taken place under the current Minister of Agriculture, Mr. Akinwunmi Adesina. Farmers now have direct access to fertilizers as opposed to what it was when a few persons acting as middlemen through corrupt practices denied these farmers access to fertilizers.
Government has also put a number of measures in place to encourage young and agile people, especially graduates to take to farming as a career option instead of waiting for jobs that are not available and where they are, cannot go round everybody.
So are there really prospects in this industry?
Let us look at 9 Career prospects in Agriculture in Nigeria.
1. Small Scale Farming
Now it is easier for intending small scale farmers to get involved in the farming sector and enjoy government support so long as they can be registered with appropriate bodies within their locality and necessary government regulatory agencies. This way, access to necessary support from government becomes easy. More so, if the farmer teams up with other farmers as a member of the farming community in that area.
2. Fish Farming
Like never before fish farmers are increasing by the day. More and more people are going into this line of farming as a stream of financial income. And the beauty here is that you don’t need so much of mass of land to do it. Many people do this in their backyards and compounds. The Catfish is the type of fish that most people rear and it has high patronage. You can bet there is a ready market for it should you decide to go into this.
3. Farm Produce Transportation
This is one area where a lot of farmers still have difficulty. Transporting their produce from the farm to the warehouses and markets is a big challenge to many farmers. And that leaves an opening for anyone who is interested to step in and fill. The farm produce needs to be moved from the villages to the cities in time to prevent the perishable ones from getting bad.
Another major need for farmers. Do you have the space and facility that can be used for storage of farm produce at harvest? This could become a source of income for you. Just do your necessary fittings for the purpose and register appropriately, then you are ready to go into business and make a lot of money.
5. Exportation of Farm Produce
Cassava and other farm produce are in high demand in places like China and other European countries. Even if you are not a farmer directly, you can buy these farm produce and package them for exportation. And the sure thing here also is that it enjoys a lot of government support. Then if you can now go into some form of partnership with other exporters it makes it all more lucrative as your combined effort will yield more profits.
Another lucrative farming business that has been around for a very long and which is still helping people smile to the banks. It will amaze you that though there are some religions that do not support the eating of pigs, yet some of these religion’s practitioners still flout this injunction and eat pork – pig meat. Or how else will you explain why the trade has thrived for ages? So if this is an area of interest, the market is there waiting for you.
Maybe the most popular aspect of farming apart from actual cultivation of lands. There is no point arguing whether animal farming is more popular than poultry, after all, it’s the same family. The caveat here is that going into poultry has its downside. The business thrives more during the festival seasons and that of course for some families is the only time they get to eat chicken. Also, an outbreak of diseases such as bird flu could be devastating. But by and large, it is a good business option in the Agric sector.
8. Land Leasing for Farming
A big challenge for some desiring-would-be farmers is non-availability of farming land. Do you have a piece of land you are not using at the moment and can be leased for farming? That could be a stream of financial income. You can collect money upfront or share profit at the end of each farming season. Whichever way it is a win-win both all parties involved.
9. Agric-extension Worker
There was a time that the government took it as a point of priority to send Agric-extension workers to farms to help farmers by teaching them modern techniques of farming. But these days it is not common to see that happening. However, if you have knowledge of modern ways of farming, maybe as a result of what you studied in school, there are farmers out there that will be willing to have you teach them and pay for your services.
With the way the Nigerian economy is being positioned, there is no doubt that very soon we will become the food basket of Africa just as Egypt was to the entire world at a point in history.
You have the opportunity now to join the train and begin to harvest your own portion in the Agricultural sector of the Nigerian economy. The opportunities are limitless and indeed endless.
Image source: wealthresult.com[SOURCE: NIGERIAN BULLETIN]
Unarguably, the recent release of N26 billion by the Federal Government for the 2015 dry season farming programme in the country is a boost to agricultural sector.
President Goodluck Jonathan, who announced the release during the 2015 Agrifest in Abuja, said that the funding was to further empower farmers to produce more food for the nation.
He also said that government would expand irrigation facilities across the country, observing that dry season farming had changed the fortunes of farmers, especially in the northern parts of the country.
Jonathan observed that the Federal Government had transformed agriculture as the country was producing more food than ever before.
According to him, Nigeria’s national food production has expanded by 21 million metric tonnes within the past three years while the food import bill has declined from N1.1 trillion in 2009 to N634 billion in 2013.
To further boost food production in the country, Dr Akinwumi Adesina, recently said that the grassroots had been sensitised to the current advocacy by the government to create wealth via viable farming.
He said that the Federal Ministry of Agriculture and Rural Development would work closely with all states government to ensure capacity-building for the farmers at the grassroots.
Attesting to this assertion, some farmers at the grassroots said that they had benefited immensely from the Federal Government’s Agricultural Transformation Agenda (ATA).
Malam Mustapha, a cotton farmer in Katsina State, said that the Federal Government had tremendously supported farmers in the state.
“In the first year of the ATA, farmers were getting three bags of fertiliser per hectares,’’ he said.
This feat notwithstanding, Mustapha observed that the rural farmers did not have enough market for their produce.
“Our problem is that we have the cotton but nobody is interested in buying it; this is the biggest worry of any farmer,’’ he said in an interview.
Sharing similar sentiments, another farmer, Malam Sulaiman, called on government to support farmers in creating market for their produce.
Apart from these challenges, observers note that in spite of the success of ATA, prices of foodstuff have continued to increase.
A trader in Abuja, Mr Henry Igwe, attributed the increase in the prices of foodstuff to the inability of youths to embrace full scale agriculture and poor access roads to grassroots farms.
In perceptible response to this, Akinwumi said: “Today, our youths are busy on the farms, growing food in the wet season and the dry season.
“We have improved food security of 40 million persons in rural farm households. There is new lease of life and vibrancy all across our rural areas.
“Between 2012 and 2014, Nigerian farmers produced an additional 21 million metric tonnes of food, exceeding the 2015 target of 20 million metric tonnes.
“More than three million farm jobs have been created as youths who used to go from the north to work in the south, often as labourers’ or night guards, don’t do that anymore.’’
In his view, Dr Abdu Omar, the Director for ATA in Katsina, said that the bureaucracy in government activities was becoming a big challenge to the success of the programme.
According to him, the programme is threatened by bureaucracy that causes delayed delivery of inputs, especially in the seed and fetiliser sector of the programme.
“Inputs that are supposed to get to farmers in February or March may not come till June or July, long after farmers may have used alternative resources,’’ he said in an interview.
Irrespective of complaints, agricultural and industrial analysts commend Nigeria’s ATA programmes for stimulating awareness about the existing potential of Nigeria’s food and agricultural value chains.
They observe that Nigeria requires major sustained investment and a longer period to fix its infrastructure and modify its agricultural policies to grow a world class agricultural sector.
They also commend the activities of the Growth Enhancement Support Scheme as one of the many critical components of ATA.
According to them, the scheme is to provide affordable agricultural inputs such as fertiliser and hybrid seeds to farmers to increase their yields.
They observe further that the thrust of the scheme is to enhance the capacity of the farmers who cannot afford a bag of fertiliser and seedlings.
“ With good planning and the needed resources, Nigeria has what it takes to multiply its Gross Domestic Product (GDP) just with cassava products alone,’’ they observe.
All in all, concerned stakeholders in agriculture hold the belief that if the Federal Government continues in solving the problems of farmers, by 2020, the country will witness a gross decrease in the importation of foodstuff.
Sharang writes for News Agency of Nigeria (SOURCE: NAN).
EXCEPT the security situation improves in the North-Eastern part of the country within the next few weeks, Nigeria may continue to lose out in the benefits of ECOWAS sub-regional trade, especially with the commencement of the Common External Tariff (CET).
Already, informal sub-regional trade with neighbouring countries like Niger, Cameroun, Chad among others has suffered a huge blow with many manufacturing firms shutting down operations in the region as a result of growing insurgency by Boko Haram.
With the commencement of the CET among ECOWAS member countries on January 1 this year, implementing the provisions of the tariff has remained unrealistic in the North-Eastern region of Nigeria.
Specifically, assaults from the terrorist group have affected the free movement at the borders between Nigeria, Chad, Niger and Cameroun; thereby undermining the provisions of the ECOWAS free movement protocol.
The Financial Action Task Force (FATF) noted that most of the borders in West Africa are porous and there are many ungoverned spaces around the vast boundary lines.
Despite enjoying huge informal trade within the borders, the FATF noted that all the countries lack the capacity to effectively monitor the borders and boundary lines which is a vulnerability that can be exploited by terrorist groups to establish training bases for their members, and to transport and distribute weapons, across the sub-region.
Hitherto, the National President, Nigerian Association of Chambers of Commerce of Commerce, Industry, Mines and Agriculture (NACCIMA) Alhaji Mohammed Abubakar, described the growing insecurity in the Northern region as one undermining the growth of industrial firms in the country as many firms have had to cease operations in the region.
Indeed, the National Consortium for the Study of Terrorism and Responses to Terrorism had expressed concerns on the need to address the security issues through multilateral cooperation as part of efforts to address cross-border vulnerabilities.
Research Associate for the Centre, Scott Menner, said, “despite the May 2014 Paris Summit for Security in Nigeria where Nigeria and its neighbours agreed to cooperate on security issues, all of the parties have a long history of failing to establish clear measures for multilateral cooperation to address cross-border vulnerabilities. Some also hold historical grudges from border conflicts. The two major issues preventing effective cooperation are the right of pursuit across international boundaries and intelligence sharing.”
A former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, recently noted that “…the security situation has affected farmland production and that has led to increase in food prices.”
Last year, it was not a surprise that Nigeria statistics Bureau raised alarm that food prices escalated to 9.8% in June, and inflation hit 8.2 per cent, the highest in the past 10-month.
In a recent publication too by US base independent research body, Brookings, titled The Impact of Conflict and Political Instability on Agricultural Investments in Mali and Nigeria, the effects of conflict on the agricultural sector are largely due to the risk of being attacked by insurgents.
“People across all value chains feared movement outside protected areas because of attacks by the insurgents, farm workers feared attacks while grazing animals, processors lost workers when families left the conflict zone, and traders began limiting their movements,” it stated.
Without mincing words, the agricultural sector has become a primary target for militants in need of supplies, as Brookings’s data showed that cash, food and equipment were more likely to disappear. It also added that the danger has made other things like transportation more risky and therefore more expensive, which again put pressure on the economic output.
Though the authors stated that the impact of Boko Haram on the Nigerian economy is still localized, the instability has had an effect on the agricultural products from the north and has severely reduced cross-border trade with Cameroon, Chad and Niger, Brooking noted.
Also, it should be pointed that Niger, Cameroon and Chad are yet to survive the serious economies threat posed by the crisis in Central Africa Republic (CAR), Mali, Libya and South Sudan. The series of attacks earlier distrusted trade activities in the various borders. Niger which is currently experiencing food scarcity and ranked one of the lowest nations (187th in 2013 by the United Nation’s Human Development Index) is faced with shaky economic situation and limited basic social services, leaving serious negative impacts on the locals.
According to the World Integrated Trade Solution (WITS) however, Niger ranked Nigeria’s 4th export partner with partner share of 11.08% in 2010 and 5th in 2011 with 5.00% partnership share.
Though recent figures are updated, movement of goods between Niger and Nigeria remains slow as the region’s landlocked position, desert terrain, poor infrastructure and environmental degradation pose serious challenge in a clime dependent on subsistent farming.[SOURCE: THE GUARDIAN]
Stakeholders harped on the economic importance of jatropha plant as a source of bio-fuel during a two-day conference organised by the Bio-fuel Development Farmers Association in Ibadan, recently.
According to Mr Olarinre Adeniji, Chairman, Itesiwaju Local Governmernt Area, Oyo State, Nigerians who partook in the second World War saw how crude oil from jatropha plant was used to power vehicles abroad and they came back home with a song of the plant’s economic value.
He, however, noted that the plant, known as “ewe lapalapa” in Yoruba, abounded sufficiently in Nigeria and had many uses.
The local government boss said jatropha seed and oil could be used to produce bio-kerosine, aviation fuel, diesel, gas, organic fertiliser, briquette, medicine and body soap, among many others.
The world’s attention is shifting from oil to jatropha, according to Adeniji, urging the government to provide land and capital to assist farmers.
In his welcome address, the national president of the association, Mr Kayode Adebiyi, said the world currently demands new ideas, new ways of doing things, new invention and new leadership.
He explained at the conference that the meeting was to promote bio-fuel in the nation and introduce the link person between the Japanese government and the local farmers, Dr Ben Egboh, to the participants.
He said: “The Japanese demand of 5,000 metric tonnes of jatropha crude oil monthly is not a joke, but attainable.”
He, however, added that at the last Global Climatic Conference, over 15,000 bishops converged to say no to carbon emissions, even as he noted that that was positive for African continent if its leaders would explore the potential of the green vegetation and supply bio-fuel to the world.
To make the task easier, the president urged the government to enact a 10 per cent inclusion on the jatropha oil into the bio-fuel bill, especially during its second reading.
He also vouched on behalf of his members that they would not default and use judiciously whatever capital the government sources for them.
In his address, Dr Egboh said there would be no any lapse in his dealings with the farmers as all issues and transactions would be documented and legally carried out.
Hajia Bola Muse, a farmer, urged her colleagues to be determined, focused and trustworthy to be able to benefit from the many available opportunities, especially from financial institutions. [SOURCE: TRIBUNE]
Olam International, unveiling a drop in profits, forecast a continuation of the currency market volatility which fuelled the decline – although said that another headwind, soaring hazelnut prices, had been “contained”.
The Singapore-based agricultural trading house, unveiling a 12.0% decline to Sing$118.7m in earnings for the October-to-December quarter, said that the drop reflected “the adverse impact of currency devaluation” on takings in many of the countries in which it operates.
The impact of falling currencies had hurt particularly the food import businesses in Nigeria, where the naira lost 10% against the dollar over the quarter, and Russia, where the rouble plunged by one-third.
Indeed, Olam’s food staples division saw earnings before interest, tax, depreciation and amortisation (ebitda) drop by 27% to Sing$70.3m, leading the decline in group profitability.
The division also includes the Uruguay dairy operation which showed “continued underperformance”.
Hazelnut problem cracked
And Sunny Verghese, the Olam chief executive, forecast that the “current macro-economic uncertainty and currency volatility… will continue through 2015”.
Furthermore, the group’s Uruguay dairy operation, at which Olam has attempted to improve returns by arranging a sale-and-leaseback land deal, is also “likely to underperform in 2015”, Olam said.
However, the group was more upbeat over a better performance in hazelnuts, in which it was forced to cover obligations at elevated prices after crop damage from a late frost in Turkey, the top producing country, put a squeeze on world supplies.
“The negative impact… is now contained and behind us,” Olam said.
Mr Verghese said that the group would be protected somewhat from world market “uncertainties” by the variety of its operations, which extend from Russian wheat exports to Australian almond production.
“Olam believes its diversified portfolio with leadership positions in many segments provides a resilient platform,” he said.
He added that the “long-term trends in the agri-commodity sector remain attractive, and Olam is well-positioned to benefit from this”.
Nonetheless, Olam shares closed down 1.5% at Sin$2.00 in Singapore.
Singapore-based broker Maybank restated a “hold” rating on the shares, with a target price of Sing$2.07, saying that there was a “lack of catalysts” to spur a rally in the stock.
“Short-term, foreign exchange volatility could weigh on Olam’s earnings,” the broker added. ]SOURCE: AGRIMONEY.COM]
Diversifying Nigeria’s economy from its over-dependence on crude oil has been described as the only strategy to effectively resuscitate and bring stability to the ailing economy, says Ifeanyi Okoye, President of the Enugu Chamber of Commerce, Industry, Mines and Agriculture (ECCIMA).
Okoye, in an exclusive interview with Daily Sun recently said the recent crash in crude oil prices, with its dire consequences on the value of the naira, foreign income earnings, and the federal and state budgets was a clear pointer to the dangers of operating a mono-product economy.
According to him, it was high time the government took seriously the constant call for the diversification of the economy by working assiduously towards making the required investments that will boost growth of other non-oil sectors.
He listed agriculture, manufacturing and the transport sectors as holding greater prospects of yielding huge revenue to the economy if the government showed the commitment in creating the right environment to assist, particularly existing and prospective investors in these sectors.
ECCIMA will be hosting the 26th edition of the Enugu International Trade Fair next month (March 13-23) and Okoye in this interview spoke on the importance of the fair to governments, investors, consumers and the people of the South East, in particular. Excerpts:
The Nigerian economy in the last 14 years under democratic rule has been extra-dynamic. The way things have been moving so fast has been quite impressive. You have to agree with me that the stability of any government has a lot to do with the stability of the economy and the stability of the economy cannot be separated from the stability of the government in place.
I can say that the Nigerian economy has been thriving. There has been a growth; at least a growth in the volume of investments that has been attracted into the country. The economy has attracted a lot of Foreign Direct Investments (FDIs). Many businesses have sprung up in almost all parts of the country and we have had more entrepreneurs in the country than before, creating jobs for citizens. Maybe such growth has not affected the majority of individual homes and families as should be expected. Maybe the impact on individual companies has been that of low returns, but certainly no one can say the economy has been stagnant.
The sad thing, however, is that in recent months the naira has been getting weaker and weaker everyday and the lending, borrowing and interest rates are getting higher. And that is a huge challenge. Therefore, speaking purely as a businessman, the major challenges, which confront us right now remain the interest rates, the next is energy. I don’t think the key infrastructure, which we need and, which is energy, to power our businesses is getting better.
And the crisis over the naira is directly linked to the fact that we have a mono-economy, which depends largely on crude oil and we know we have been badly affected by what has happened to the prices of crude oil at the international market. I want to believe that the people managing the economy are working on this.
The other is that electricity is not where it should be. All investors, manufacturers, entrepreneurs, small business owners need stable and uninterrupted electricity to remain profitable.
I cannot really blame the government for this because I am also aware that the government has set up goals to improve power generation such as the privatisation of PHCN – both the generation and distribution companies are now in private hands. However, what remains is for the government to continue to supervise or regulate the system and ensure the full implementation of the terms the core investors entered into or agreed upon with the government so that the privatisation exercise can yield the required dividend to electricity users. Because if they allow the investors in this hitherto owned government firms get loose and do what they like, then it will be worse than ever. Let me give you an instance; just this January, the electricity tariffs charged by the distribution companies suddenly shot up all over the country. In some areas by 100 per cent; in some areas by more than 100 per cent. And this is not good for businesses. You cannot say you want to encourage new and existing businesses to remain active, and at the same time you are introducing such electricity tariffs that will be harming those businesses.
What has happened to the naira and the economy in recent months as a result of the crash in crude oil price calls for an action by federal and state governments to break the over-reliance on crude oil. The greatest headache Nigeria has is the issue of this mono-product economy where crude oil has remained the major source of income or revenue generation for all tiers of government. The Federal Government feeds on the petroleum industry. The states and the local governments also rely on this same source. If it rises, everybody rejoices that we are progressing and getting richer. And if price falls, as it recently did, then it exposes us as being poor, some say broke. I don’t think this is a good way for us. Only the pursuit of a committed diversification programme away from this over-dependence on crude oil will help bring stability to the economy. We need multiple and strong sources of earning.
So, speaking specifically about the South eastern part of the country, I think there is need for government to work hard and get the right infrastructure that will enable a speedy divestment away from crude oil. In the South East, we have a lot of prospective entrepreneurs who won’t wait for whatever is happening in the oil and gas sector before unlocking their potentials to create wealth for the economy.
Good road is the number one among the other infrastructure that the government needs to fix to realise this diversification in the South East. The government knows that it has not really done everything it should have done to put the right road network in the South East. Work is ongoing in some areas, but the requisite federal roads that link up the states to the highways are still absent. A typical example is the road that runs from Asaba through Onitsha, Enugu to Port Harcourt.
Between Onitsha and Port Harcourt, the road has been an eyesore up till today. And we are talking of diversification of the economy. You can’t do this when the roads to evacuate goods and services are not there. Bad roads impair investments. It works against the localisation of industries in certain areas that are even vibrant. The palm oil that gave Nigeria the riches it had in the 60s came from the South eastern part of the country. And with the right environment and infrastructure, this can still be reactivated to create massive jobs and the end products exported to generate revenue for the country. Other countries of the world rely on this as a source of foreign exchange. But for now, no matter how you reactivate this sector, the products will be hard to move out for exports because the transport infrastructure to ease the investors’ evacuation of the goods is just not there.
And if I have to go back to the issue of electricity, one also finds a situation where, after the privatisation of the Enugu Electricity Distribution Company (EEDC), businesses in the South eastern part of the country are so disadvantaged because the EEDC tariff is closing down many businesses. In fact, I can tell you that the tariff is the second highest in the country after that of Jos, which is the highest. As at January this year, the rate was raised to N46.66kobo per kilowatts. The original rate as at December 2014 was N26.97kobo per unit that is being charged manufacturers, industrialists and business owners within the South East. And you ask, why is this so? If the increment has to be made, the tariff should be what everyone, including the consumers, will accept as realistic. For Lagos, it is about 25 per cent. But in Enugu it is about 100 per cent increment. And as soon as payments are not made, the EEDC cuts off electricity supplies to the affected companies. Currently, some businesses have shut down. Why we are complaining is that this company had assured consumers and even the government that the next tariff increase will be about June 2015. But for them to suddenly increase tariff by January 2015, it is so strange to us. The agreement was for the increment to be adjusted bit by bit so that consumers can adjust and not a sudden and astronomical increase. But they negated this. We are badly affected. And you know very well how this can hurt businesses in the South East because outside Lagos, the next area in Nigeria that you will find businesses and manufacturing firms, medium and small scale businesses springing up, is in the South East. So I often ask myself, is the Enugu Disco trying to run us out of business? Because I don’t think what they are doing is very fair.
Corruption, both in government and the private sector, affects businesses and the economy seriously. And when you talk about corruption, you are referring to situation where you find some people liaising with government agencies to default in the payment of taxes due to the government. You also find situation where the taxes collected are not judiciously used. You also find situation where people are not paying the right tariffs they ought to pay for government services or utilities and they are covered up. And then there is also one where manufacturers produce sub-standard goods and pump them into the market for consumers and the regulators are not there. And then importers also bring in inferior goods into the country to deceive the people. And there is adulteration and all manners of such cheating going on in the country. So this is the type of corruption I’m referring to because it cuts across both public and private sectors and it is inimical to the economy. And the harm it does is that it blocks the genuine businessmen from getting across the right quality of goods and even services to the end users. The market is being robbed by such acts of corruption and the economy also loses. So everything has to be done to stem corruption in the country.
As business owners, we are not comfortable with the fact that interest rates are getting so high. The government started a process that could have assisted businesses a lot better. Like trying to marry the Bank of Industry (BoI) with the CBN to assist industrialists and businessmen, and I think it was working well. For example, through the intervention of the CBN and BoI some entrepreneurs were able to get facilities at 10 per cent interest rates and with long term period, some six years, some seven and some even eight and 10 years. But it is not consistent. It comes and goes, and never a stable policy. It was like they were testing the water to see how it would work. And the business community asked them to make it a continuous process. Let it be a rule. A single digit interest rate is the rule all over the world, especially in developed countries and the developing economies are doing the same thing. That is the best way to grow businesses. And we are saying why can’t this happen also in Nigeria.
Before Jonathan became the President of Nigeria, remember that President Obasanjo did promise us a single digit interest rate. He never did it and he was gone. The cost of funds remains a problem for businesses in Nigeria and the sooner the government realises this and does something, the better for all of us. Those in government must begin to understand what business is done. That is the only way out.
We have to open up a better business interaction between Nigerian banks and business owners first and see how we can assist each other before we even talk about going outside to source for foreign funds.
The unemployment facing us can be solved if we can fix our manufacturing and agricultural sector well. These two sectors hold the prospect of massive job creation for citizens. There is no need to pretend. If the government is able to create the right environment in terms of stable electricity, access to single digit credit, good road network, and security in all parts of the country, I tell you that in the two sectors you will witness speedy progress in the manufacturing and agriculture sectors. And they will keep employing people. Anywhere you go in Nigeria, the first set of businesses you are likely going to meet are farmers. So, if agriculture is well funded and managed, and farmers are able to access markets both international and local, so that they rise above subsistent farming, there will be lots of job created in the country. A lot of youths roaming the streets due to joblessness would be engaged only if we have a vibrant manufacturing and agricultural sector. And then one other sector that holds a great potential for job creation is the railway system. If we have functional trains running from one part of the country to another, you will see the level of people it will employ, both directly and indirectly. The absence of the rail system in countries as populous as Nigeria is keeping many of our citizens unemployed.
Once there is stability in all key aspects of the economy, banking, insurance, telecommunications, sports, entertainment, health, among others, then people will always find jobs to do. It is a task that must involve both the government and private sector.
Enugu Trade Fair
I like to say that the preparations and planning for the hosting of this 26th edition started as far back as the beginning of the second quarter of last year. The idea is to boost technological advancement by bringing researchers, business people and industrialists together. This remains one of the core focal points and cutting edge of the Enugu Trade Fair. This trade fair is coming in an election year and we are holding it prior to the elections. We want to do our best to ensure that we grow the economy of the South East and by extension, the economy of Nigeria, through this trade fair. We want to bring in the experts, research institutions, creditors, banks, insurance, entrepreneurs, among others. The economy is very vital. And this is the right time to create the platform where the politicians, investors and the people can meet or interact to the benefit of the economy. People aspiring to take care of the people should be made to know that the economy is very vital to the people. They should have a fair grasp of the happenings in the business environment. And in the South East, we want a situation where our politicians can come out and tell us what they plan to do to grow the economy. So we have been very strategic in the timing of this year’s trade fair. Like I said earlier, we are aware of the current focus on political campaigns and rescheduled elections in March. We have strategically designed our action plan for the fair so that the current campaign and upcoming elections would not affect the fair in any negative way.
We are very much concerned on the issue of deepening our democracy as we are also aware that it is only with a thriving economy and free enterprise that our democracy would be well sustained.
A good number of corporate bodies/business organisations as well as government agencies have made very serious indication and commitments to participate in this fair. Also, the level of enquiries and interest made by companies and associations is quite reassuring. I am quite confident that the trade fair would be successful based on the following indices and factors.
The fair has been packaged to have meaningful and positive effects and outcome for all stakeholders, particularly exhibitors and participants. And we are expecting over 500 corporate participants, including foreign firms and 1.3 million visitors to the fair.
Part of the value addition to this fair is the erection and availability of over 100 square meters marquee air-conditioned dome for corporate and international exhibitors. We have equally put in place measures to ensure stable and quality supply of electricity and water. Being conscious of the state of the power supply from EEDC and without prejudice to the genuine efforts to improve supply, we have commenced the repairs and maintenance of the stand-by generating sets in the fair complex in event of power failure. [SOURCE: THE SUN]