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Chief Executive Officer of Olatunde Prestige Limited and Bezaleel Manufacturing Company, Babatunde Ebidero, discusses with BANKOLE TAIWO some factors hampering the growth of small and medium-scale enterprises in the country, among other issues
How are manufacturers coping with the present economic realities?
The truth is that the current economic reality is a global challenge, but that of Nigeria is worse. Manufacturers are feeling the heat. Some people came together about 15 years ago and declared the business space volatile, but the volatility, uncertainty and even ambiguities have increased over the years because no operator can predict what happens next.
There is a lot of complexity; you cannot go to bed and close your eyes because of lots of disruption. The challenge is global, but it is more challenging in Nigeria because of our whole lot of other underdevelopment problems.
The song the government has been singing is that they are fixing the country, but the truth is that we really cannot see what they claim to be fixing. We, however, hope and pray that the present administration will be able to take us out of the woods. Having said that, I also want to add that whatever the challenges we are having should not be too strong to stop an entrepreneur.
An entrepreneur is someone who identifies challenges and provides solutions. He or she is a problem solver, so you cannot be a problem solver and run away from problems. This brings in the concept of agility, which is the ability to respond to a situation as it comes. The funniest thing is that before you finish responding to one challenge, another one is here.
It all started with the increase in fuel pump prices; later the foreign exchange joined the train, then the import tariff went up, and for the manufacturers, another big challenge we are having now is a scarcity of skilled manpower because of a mass exodus of Nigerians – the Japa syndrome.
By and large, we are trying to get along, believing that it would not be long before we put all of these unpalatable situations behind us.
Are you implying that Japa syndrome has significantly impacted the business world as well?
Very well. The queues are longer now in our banks because there are fewer hands.
The waves first hit the health sector, with our doctors and nurses leaving in their thousands; it is scary. It later became the turn for the people in IT to also follow suit. Some of the hitches we had not long ago in banks fell out of this challenge. I know some bank workers who, after relocating, were still begged by their banks to work for them from wherever they may be. Manufacturing is suffering the same, too.
In the past, we could afford to fill this factory up with workers from our neighbouring African countries like the Benin Republic and Togo, among others, but that has changed because these people do not want to come down and work in Nigeria again because their currencies are now much more valuable than our money. The heat is getting so much hotter every day.
How are manufacturers coping?
I have been trying to innovate to solve some of these challenges. Aside from the scarcity of manpower, another challenge is the skyrocketing cost of raw materials due to the increase in the dollar rate. One thing that I have also observed that some companies are lowering their quality, which is not good.
If you are quite observant, some bottled water containers cannot sit firmly on the table again because the micro-thickness of the bottles has been reduced very considerably just to survive.
How do you think local manufacturers can overcome the current challenges?
When the going gets tough, the tough also get going. The way out is not to quit.
When those analysts, about 15 years ago, said that the business space was becoming volatile, they equally said that to overcome this challenge, entrepreneurs must develop the agility to counter this hard time. We must tighten up our belts. It is not enough to shut down operations or to scale down; we should rather develop how we can work around these challenges.
There is one thing that I found out that we also lack in Africa, and that is resourcefulness. To cope during this period, entrepreneurs must be resourceful. There is a saying that if the desirable is not available, the available will become the desirable. This is the time for every entrepreneur to embrace prudence and management. The option will be to keep thriving.
There is a story that I heard from my mentor. The man of God said that during one of his travels outside the country, he met an Israeli, and they started discussing, and the man said there were only two nations in the world. The man said there were nations whose resources lie underneath the skulls, and there were nations whose resources lie underneath the earth.
He said Africa is rich with a lot of resources buried underneath the earth, but one thing we lack is resources underneath the skulls. He said the developed world is made of nations with resources underneath the skull; that is, their brains work.
When I was doing my research recently, I discovered that Africa is said to be home to 60 per cent of the world’s food reserve. That is why the Chinese are running into the country to get so much involved in farming that we have neglected for lots of reasons. They are doing this on a very large scale and exporting the farm produce to their country, processing it over there and then bringing it back to sell to us.
How can we reverse all of these?
We must get back to farming. We must be actively involved, and the government must play a good role here as the umpire.
For instance, a foreigner cannot set up a business in China without a very large percentage of it being owned by the Chinese. I remember we used to have something like this; it was introduced during the military administration of General Olusegun Obasanjo. If I am right, I think the foreigners will own 60 per cent, and Nigerians will hold 40 per cent, but I am not sure if that policy is still working.
How do we manage the drive for foreign investments and building local capacity?
Foreign investments are good, but they come with their rough edges, and that is why we talk about government policies to ensure that the citizens are protected from unnecessary exploitation by these foreign companies.
China experienced it. When Europe discovered that there was cheap labour in China, they migrated to China, but look at what President Donald Trump is trying to do now; he wants to bring the companies back to America. This was how China grew; the Chinese welcomed these companies, learnt some of these technologies and began to do those things by themselves.
But we have a problem here: I am beginning to hear that most of these big foreign companies are not allowing Nigerians to work at such a level where they can tap into some of these foreign technologies. They prefer to have Nigerians at the lower rungs. The government may have to do something fast about this if the allegations are indeed true.
To what extent have manufacturers benefited from the economic reforms initiated by the current administration?
Nothing so far. Energy rates are still very high, yet unavailable; this is a serious problem for the manufacturers. We have also not been able to stem the tide of our brightest minds relocating in droves to other parts of the world in search of better opportunities and a good life.
The forex crisis is still there. Yes, we have been able to peg it between N1,500 and N1,600 but it was around N400 about two years ago and now about four times higher. What about the skyrocketing price of diesel, which is our live wire? The import tariff that we pay for the raw materials is killing.
Are you advocating a bailout for manufacturers?
Yes, there should be. I remember that during the regime of former President Barack Obama, due to the economic crisis of that time, he gave bailouts. But the bailouts were not given to the government officials or the politicians but to the industries, the employers of labour.
Most Western countries give bailouts to industries. I am not aware if the Nigerian government has ever given a bailout to any company. If there is any, it always ends up in the hands of the government officials and we do not know what happened to it.
What do you think the government can do to help manufacturers?
The government must, as a matter of deliberate policy, create that ambience, the enabling environment for business to thrive. I must confess to you that these days the biggest challenge we have in the business environment is the government.
Are you talking about the issues of multiple taxation, the lack of infrastructure, etc.?
We cannot move our goods from one point to another with ease. If you order anything from Alibaba in China, you will have it at your doorstep in two weeks. Sometimes, it takes a week or one and a half for my chairs to be taken down to Abuja due to bad roads; this is a journey that is not more than seven hours.
There are lots of unnecessary unions and revenue collectors on the road, making untoward demands. What about security? We have to provide this ourselves.
In what form do you want the bailout to be?
I do not think a bailout should be in terms of cash that could be handled. Rather, let it come in terms of tax relief; it may also be that manufacturers will be getting the forex at a special rate, not that you will be giving such to people going on pilgrimage.
Of what economic importance are people going on pilgrimage to the country? So, this is the kind of bailout that I suggest.
What lessons can manufacturers learn from the current situation?
Very correct, and just like every other segment of the economy. We can, however, choose to mitigate the threat, and that is why I talked about resourcefulness earlier.
It is this lack of resourcefulness that makes us send our resources to other countries that have the resourcefulness to process them into finished goods. Our cocoa gets back to us as a beverage, our raw gold gets back to us as jewellery, and the crude is back as petrol, among others.
We must look inward. Most of those things we are going to get outside the country can be done here. For instance, I do not allow anything to be wasted in my company; even the cartons and nylon that come with any new spare parts that I buy, I sell them back and make good money.
These were things I would have thrown away in the past. For me, that is the beauty of the time we are in. It is not a completely bad situation; we have been comfortable in the past, and now we have been brought to a place of discomfort. If we manage this situation very well, it will launch us into a better Nigeria.
You just wrote another book, Grace and Grit. How are you able to combine this with your tight schedule as a manufacturer and entrepreneur?
I was ordained a pastor in one of these Pentecostal churches some years back. However, I am not a pulpit pastor; I am a pastor in the marketplace, that is, outside the conventional four walls of the church.
I am more passionate about shepherding people out there, providing counselling and guidance, rallying them to be problem solvers, and contributing to the growth of society while also attaining their goals in life.
And talking about my new book, I wrote it to address a problem among Africans, particularly Nigerians, and that has to do with our religiosity, talking about how excessive we can go sometimes with religion. It is good to be religious, but you must be careful not to be excessive about it. I have seen many people who are not where they ought to be, and they will be saying they are waiting on God, and I began to question why God continues to keep people on his waiting list.
So, when I began travelling to Europe about 15 to 20 years ago and found out how developed that part of the world has been, I began to challenge God, asking Him why we have also not witnessed that type of development in Africa, despite our being so religious and serving Him.
He said the Europeans were more hard-working than we were. God said there was a time when the people in Europe were also held down by religiosity, but they later set themselves loose from it.
