Category: THE CEO

 Horticulture is fast becoming agriculture’s fourth engine and may soon rival other major industries in export receipts. The demand for spices, fruits and vegetables is expected to keep supporting strong prices across the sector. In this interview with Daniel Essiet, the Chief Executive, National Horticultural Research Institute (NIHORT), Ibadan, Oyo State, Dr Abayomi Olaniyan, says he is banking on the industry to improve foreign exchange earnings, and diversify exports to boost the nation’s self-reliance drive.

Experts believe that for Nigeria to reecord a strong growth, it must revamp its economy. What can the govern-ment do to put the country on the path to a high income economy?

The precondition for economic growth is an enabling environment for economic activities. For the Nigerian economy to grow, we need quality structures and institutions to drive growth. There is a lot of potential in Nigeria. What is required is an enabling environment. We are taking in terms of resource allocation, inputs deployment into the economy. For instance in agriculture, we still import important components that can aid growth across the sector. If the government can assist stakeholders to get some of these resources, the sector would have gotten a booster to spur growth across the economy. There are a myriad of opportunities within the economy.

How do we address aging farming population and get more women and youths into the labour market?

We can’t grow the economy if we are relying on aging farmers population. We need youths and women. We cannot attract young people into farming to confront drudgery. Increased involvement of youths in agriculture will help reduce the problem of lack of farm hands caused by aging farm production. Youths would not be attracted to farming where we still witness the farming practice of how and cutlasses. The starting point should be mechanisation at various levels. We are talking about appropriate mechanisation. This will encourage youths to take to agriculture. We are still using old implements in agriculture. Mechanisation has become necessary in view of youths’ interest in agriculture. In an increasingly digital world, access to communication devices and to the internet is crucial if we are to lure young people to the farm. The government needs to support and finance availability of information and technology facilities in the rural areas to encourage the youths to return there. Digital transformation will have an impact on rural development and encourage more youths to go into agriculture.

By fostering economic opportunities in the sector, we will stem the flow of young people leaving the rural areas in search of jobs in the urban areas. The importance of increasing women participation in farming is clear, they work actively in agriculture. Reducing drudgery is key to attracting them to farming. An enabling environment is vital for agricultural development. Provision of facilities across the rural areas will encourage youths to pursue agro businesses. There must also be water electricity and roads. It will encourage young people. The government should revamp its rural development plan.

To what extent are infrastructure and development linked? Would you attribute this to why there are inadequate processing capacities?

Agriculture is infested with post-harvest waste problem – about 30 to 40 per cent losses in the horticulture industry. Wastage is caused by non-availability of facilities for processing agricultural produce. Food processing reduces losses. We have various levels of food processing. We have one that is hi-tech that enables the farmer not only to add some value to the produce, but also enhance shelf life.  At our level of development at some farms, farmers may not be able to handle hi-tech. This not withstanding there are basic things they can do to protect the value of the produce from deteriorating and keep the shelf lives of the crops. The government should put more money in research, especially to improve storage. They should support entrepreneurs with agricultural loans to acquire processing equipment. This discourages a situation where people export raw materials abroad without adding value. In most cases, the importers will take the same raw materials, process and send them back to us as finished products. The more the government makes processing equipment available to farmers and processors, the more job opportunities will be created because the industries will create jobs.

What does it take to transform rural farming communities, such as Iseyin in Oyo State?

There was a time the government was proposing collection centres for perishable farm produce. Such centres were to provide facilities for farmers to aggregate perishables. If the government will provide such facilities, including aggregate centres and farmers markets where they can sell produce in places like Iseyin, people can take their produce there and the buyers can also come there. Many food producing areas are hampered by infrastructural deficiencies from realising  their potential. With the right kind of rural infrastructure and farming, we can create food hubs where people can find jobs on farms and boost food security. To sustain growth, the agricultural sector needs significant investment in infrastructure. Rural dwellers need social infrastructure. Although we have urban agriculture, it is not extensive because land for urban farming is limited. It is in the rural areas where large scale agriculture is practiced. The areas need amenities.

Infrastructural amenities, agricultural support such as seeds, inputs, processing and storage are part of the empowerment efforts that will stimulate growth in the rural areas. We need infrastructure to encourage people to set up food processing units in rural areas. With adequate infrastructure, food processing has a future, provided adequate government support is there.

Would you recommend the establishment of food hubs in farming communities such as Iseyin?

 The existence of farm hubs in places, such as Iseyin, will link farmers to buyers, increase food security, income and reduce transactional costs. It will provide a platform where farmers can connect with consumers. For this to work, the government needs to provide a single point of aggregation for farmers who may not be able to travel long distances to sell their produce. We need to create local hubs small farmers can aggregate their produce. The project will essentially involve building storage infrastructure. Priority will be given to building roads to connect farms to rural markets. The food hubs allow aggregation and distribution facilities to be located near to the consumers.

What is the state of the horticulture industry?

As far as the 1930s, Nigeria has been exporting citrus. We have been exporting mango. Because of oil attention shifted from agriculture. Overall, the national contribution of horticulture to the Gross Domestic Product (GDP) is very low. Look at the case of tomato; we are spending a lot of money on its importation. This is a horticulture crop, which we have the capacity to produce locally. Generally, horticultural crops are perishables. They must be handled in a special way.  During their season, there is a glut. We have the produce in abundance. Once the season is off, they become scarce. There must be investment in research to turn such crops into derivatives and other products so they will be available in various useful forms for people to buy when the season is off. Globally, the value of horticultural crop is higher than that of arable ones. The value and volume of horticultural crops per unit of cultivation is higher than arable crops. Horticultural crops also have larger value chain activities and actors than other crops. Its value chain encompasses a lot of activities that can generate that will benefit Nigerians s driver of socio economic growth. They are higher in nutritional content, medicinal and export potential. Horticulture crops pay an important role in generating employment and improving livelihood for farmers and exporters. The potential for the horticulture industry is immense. It can contribute to sustainable development. By scaling up activities across the sector, we can boost job creation.

What contributions have local exporters of vegetables made to the total exports?

We have been exporting some horticultural crops such as citrus to England. They are farmers exporting mangoes. Others are exporting vegetables.

Do you think we have enough funding channels to support viable horticulture projects?

Funding is usually a challenge to farmers. Funding is a key problem when they want to get fertiliser, machines, inputs and improved seeds. Farmers have not been able to provide banks with collateral requirements. The government is working through the Central Bank of Nigeria’s (CBN’s) Anchor Borrowers Programme to address funding challenges. This will make it easy for farmers to raise funds to do their business.

Are you satisfied with measures taken to support agric exports, especially horticulture?

In recent years, the government has taken steps to build a sustainable horticulture industry. The Nigerian Exports Promotion Council (NEPC) is working to increase aggregate volume and value of exports from the country. It is working to promote and expand businesses in international markets for Nigerians in horticulture production. NEPC provides information that keeps the sector abreast of global business opportunities, trade facilitation and support to penetrate new and existing markets.

Horticulture industry has been identified as a sector that could improve the nations export’s revenue. What can be done to increase areas under flower pro-duction?

There must be increased research on how to preserve flowers in its original form until it reaches its destination. Most of these crops are airlifted. The transportation system must improve to meet the peculiar need of flower production from the farm to the airport.

Horticulture is a sensitive business with many challenges. What can be done to raise exports level in the next five years?

Dearth of infrastructure has to be tackled, training and skills building among farmers and reducing bottlenecks in the development of the sector. We have to implement horticulture programmes that grow the industry.

What is the mandate of NIHORT?

NIHORT is a research institute with mandates to conduct research to improve production, processing, storage, utilisation and marketing of fruits, vegeta-bles, spices and ornamental plants of nutritional importance. With the institute’s efforts, production areas of horticultural crops have been expanded and productivity increased. The additional production volume comes from application of improved farming practices, high value inputs and attention given to post harvest technology.

What have you done to deal with challenges, such as post-harvest losses and packaging to bolster the industry?

Horticultural crops play an important role in generally in employment creation, improving economic conditions o farmers and entrepreneurs. They typically have a high moisture content and high perishability and deteriorate rapidly. If not handled properly, producers record losses during post -harvest operations and it is a matter of concern. We train farmers to acquire new skills and technologies that will enable   them to ensure proper post-harvest to reduce losses and increase productivity and quality. Cold storage is an important component in the horticulture value chain, since the industry deals with perishable produce. We need cold chain facilities for transportation of fruits, flowers from the farms to their destinations. Cold storage slows down deterioration of fruits and vegetables before they reach their destinations.

Is your institute producing new varieties to boost the sector’s competitiveness?

We have been able to identify some varieties that are adaptable to various ecologies in Nigeria. Even though some of the varieties were brought from abroad, we try to adapt them to our ecology, in terms of resistance to disease and higher yield potential. For instance, we have varieties of Okra and garden egg, which we have developed with special qualities. We are encouraging diversification and introducing new varieties to boost the sector’s competitiveness. We consider market demand and climate adaptability in rolling out varieties. We have developed quality planting materials and facilitating farmers in the production of tomato and other horticultural crops. We support farmers through workshops and help the increase income while assuring quality produce for consumers. We train farmers to compete for quality, reliability and safety. Our training aimed at enabling farmers to understand opportunities in the horticultural value chain. I will like the public to know that we are not a flower specific research institute.We handle research on fruits, vegetables and spices. We are working on a number of vegetables, citrus such as mango, guava, pawpaw, pepper, pineapples, banana and plantains. We work on both indigenous and exotic vegetables. We have spices, such as ginger, tumeric, both local and exotic that we have worked on. Our mandate is not just flower production.

Is there any effort to bring together exporters to strengthen collaboration with players to ensure quality and boost competitiveness?

Raising awareness of the importance of the horticulture industry is critical. As part of our mandate, we facilitate exchange of best practices across the sector. We have undertaken trainings aimed at increased export capacities of farmers and producers, addressing the whole horticulture value chain challenges at each point from the farm to the market, bringing all players together in moving towards sustainable horticulture industry. We aim to achieve a more innovative approach to horticulture farming and business. We partner stakeholders to implement skills building among farmers and other players who have a role to play in the industry. We are focused on high standard that will enable our fresh produce to be embraced in both local and international markets. We have been able to give farmers improved planting materials. We have been able to address problem of wastage and value addition.

What is your primary goal as the chief executive of NIHORT?

Take horticulture to a new level and introducing better planting materials to stakeholders. I am keen on fostering best practices in horticultural crops production. We want to have a good food production system that addresses issues such as quality seeds, good farm practices among others. Horticulture is a very important economic sector in terms of foreign exchange earnings and job creation.

The importance of inland dry ports to economic development cannot be overemphasised. The Executive Secretary, Nigerian Shippers Council (NSC), Mr Hassan Bello, says a functional rail system is critical to the success of dry ports. He advises governors to invest in dry ports to create jobs and decongest Lagos ports. Maritime Correspondent OLUWAKEMI DAUDA met him.

What plans does the Nigerian Shippers’ Council have for the maritime industry?

We have automation and seamless transport programmes. We want the maritime and the transport sectors to make appropriate contributions to the economy. We want the maritime sector to generate wealth; we want it to create massive employment;  we want it to assist greatly in the diversification efforts of the Federal Government.

There is no sector that can assist in the diversification of the economy more than maritime. We want to assist Nigerians to own and operate ships. We want to change the carriage of our crude oil from free on board (FoB) to where Nigerians will carry the crude. We are looking at efficiency in our ports. We are looking at deep sea ports and a seamless transport system. In the next two years, transport would make appropriate contributions, in employment and generation of revenue, and we are going to have modern infrastructure because it is transport that drives the economy.

What roles does the Council play for terminal operators, shipping companies and others?

We consider the terminals and shipping companies as our critical partners. Ours is to provide the atmosphere where they can operate and make profit, when they don’t make profit then it becomes our failure as the Shippers’ Council

We are the umpire, we are neutral. Sometimes, we criticise the government for not providing the environment for them to operate. It is important that we guarantee their investment because it would translate to the contribution of the transport sector to the GDP in terms of new infrastructure. If you go to the port now, they are not as they were 20 years ago; we are also considering the employment content of what they can offer to our people. Now we are gearing the ports to be competitive in export, we are opening some inland ports; all these are economic activities that have multiplier effects and profound impact on the economies of these locations where they are sited. I can imagine that about five to six industries would spring up in Kaduna because of the dry port. If you translate this into employment, distribution of wealth, infrastructure, you will see that the economy would gain a boost. The same thing in Jos.

We should forget about trivial issues and begin to talk about economic issues, two shipping companies closed shop in Japan sometimes ago, what are the implication? The other day, there was a breach on the APMT systems and the next day we were already there to look at their operations to see how they are coping, we also negotiated that it should not translate into demurrage, this is the role to play because the world is global.

What do you think should be done to tackle Apapa traffic gridlock?

The situation in Apapa is really a very sad situation. It was a mistake to have only one mode of transport linking the ports. Ports are supposed to be linked with many modes of transport. Especially rail, which carries the bulk of the cargo and that is the consequence we are having. Here we depend on the road alone and which is the problem we are having. There is no way we can continue with only one mode without its problem. We should have pipe lines, we should have the rail, the road and I think that is why the Federal Government has made it a law that all ports must be linked with rail. And that includes the dry ports. There should be some interconnectivity and integration of infrastructure.

You don’t build a river port without considering how to link it with the sea port, with the dry port and the airport. All these things should be linked and the Nigerian Shippers Council is providing that role of achieving inter- modalism. Supposed you alight from the International Airport in Ikeja, you need to get another means of transport to the local airport. Modern ways of transportation is to have a seamless transportation system in operation; from one mode to the other. When one brings cargo from the sea ports, they either go by rail or the barges for appropriate transfer from one mode to the other. And that is what we are doing with the Truck Transit Parks and the dry ports.

Should tank farms be removed from port area to achieve 24-hour operation?

The question is not about moving the tank farms, but the mode of transporting petroleum products, the pipeline is a mode of transport, if the tank farms have pipelines which would pump outside Lagos so that the tankers would stay there and collect their products from there; the thing is that we have a unimodel connection to the port and this is by road mostly. Meanwhile access to the port should be multi modal; it should be by road and mostly by rail, inland waterways and by pipelines, which is why pipelines are considered as a mode of transport. However, we have the solution now, the International Finance Corporation (IFC ) which is the World Bank did a study for Nigerian Shipper’ Council on management of traffic on Lagos port corridor. What was found out was that 5000 trailers and tankers are always on the road, meanwhile what is needed is only 1000. The project is being done with the NPA where we are going to have modern traffic management, electronic gates, parking bays, staging areas so that only trucks that have business to do at the ports are allowed in, it would be electronic and you cannot even have access if you are not invited. This is already within the procurement process, it is going to be advertised and when it is done, we would solve the problem of traffic in Apapa. I hope this would also be duplicated where we have proposed ports in Lekki and Badagry.

How far has the Council gone with the execution of Kaduna Inland Dry Port project,?

We have good news to tell the world. We thank the Nigerian Customs Service (NCS) for its commitment. The Service has listened to the admonishment of Mr President. It has helped in many ways to boost the operationalisation of the Kaduna Dry Port. It has put operators of the dry port on its system and has also hooked it to the operations of the Kaduna Dry Port. Customs has also issued a station to Kaduna, which means it is a Port of Origin and port of discharge. That is extremely significant. The presence of Customs there now, as you see, means it is a Customs port. Last week, we were discussing with many institutions to have an office there. Agencies such as National Agency for Food and Drug Administration and Control (NAFDAC), Standards Organisation of Nigeria (SON) and so on. The volumes of trade have increased tremendously right now. In fact, they are doing about five containers per week, especially of export goods. Apart from the Customs, the shipping companies are ready to issue the bill of laden and that will make the transfer of cargoes very easy. The sea ports are not transit point, the cargoes are destined for Kaduna Dry Port. Kaduna Dry Port is a complete port in all sense of the world.

What is the relationship between the dry port and the Central Bank of Nigeria (CBN)?

The CBN has listed the Kaduna Dry Port in the Form ‘M’ for transactions. This is good. It was done by the CBN about few weeks ago. This is to tell you that things are happening in Kaduna.

What constraints do you have?

The only constraint we have is the railway. The whole essence of a dry port rests solely on the railway. Specifically, the Nigerian Railway Corporation (NRC) has allocated 20 wagons to Kaduna. However, it is the lack of the locomotives now that is worrisome. But we had meetings with the NRC last week. We have had series of meetings with them, and they are struggling to see that these locomotives are made available. If we have the locomotives and the 20 wagons in Kaduna, you will see that the volume of business at the port would increase geometrically. The Nigerian Shippers Council is also talking with NEXIM Bank because there are certain infrastructures that need to be provided for Kaduna Dry Port especially the refrigerated warehouses.

And we need a consolidated centre, a place where there would be some industries. An industrial park will assist for packaging and adding value to the agricultural products before export. So, I think within three months all our challenges would be met. But right now we are happy that it started like this.

What are the operators doing to attract cargo?

The promoter of the Kaduna Dry Port which are Inland Container Limited, are opening offices in China, London and some other places so that they can canvass directly for cargoes to be consigned to Kaduna. You can imagine the level of activities that will come up at the port. Right now, importers, agents and banks have started moving  to Kaduna, applying to open offices. By the time the operation starts, we would see the effect of the see port economy being replicated in Kaduna.

What are the prospects of the port?

There are very very good prospects for the country; they are sources of diversification of our economy. Export is very important. We would earn foreign exchange as part of what we need to move the country forward. We cannot be import dependent economy. We need to be exporting goods to other countries. Nigeria is so blessed. We have 925 square kilometers of land. What we need to do is to concentrate on export. Nigeria is so blessed with a large square kilometers of arable land for agriculture revolution. In Nigeria, we need agriculture and rail revolution. These are the two things that will  change dramatically and profoundly the fortunes of this country so that we can export our goods.

Apart from Kaduna, which other states are you looking at?

We are talking about Plateau State and that of Jos has reached a very advanced stage. Very soon, they will come on stream. The rail side is what is left. But the conces-sionaires of Jos, Duncan Maritime, is talking with the NRC so that they can start operation. What is important is the support of the state government. State governments must support the establishment of the dry ports. And we are happy to announce that we have got tremendous support from the Kaduna State government. Also, I must mention Plateau State government. Katsina and Abia states too. They are all pulling resources together to see that the dry ports are established in their states. The Kano State government has also shown tremendous interest. By the time we have all these dry ports, they will not only be for export centres, they will also be receiving goods and decongest the Lagos ports. On the transit cargo, you can imagine people in many places such as Republic of Niger, Funtua, Kano  bringing their goods to Kaduna and to the Eastern flank of the country. If there is dry port in Abia State, it will take care of the Eastern corridor and people there will just be for to Abia instead of coming to Lagos to clear their cargo.

What are the benefits of dry port to states and what is your advice to other states that are yet to key into the initiative?

State governments should show interest in the establishment of the dry port in their states because it opens up the economy. It will help the state government in revenue generation and it will help them in employment generation. For instance, we are talking about 2000 direct  jobs and 3000 indirect jobs in Kaduna dry port within the first two years. These are tremendous opportunities for the state governments to support the dry port.

What is the stake of the Nigeria Ports Authority (NPA) in the project?

The  NPA is a very important partner. There must be a transition, synergy between the sea ports and the dry ports. They are complementing each other and not rivals. This is very important. NPA has   good interest in the operation of  dry ports. What the NPA must do at sea port as a land Lord is to make sure that there is a dedicated space for transit cargoes. And I sure we will make the transition between the sea ports and dry ports extremely small.

What is the role of the Nigerian Maritime Administration and Safety Agency (NIMASA) in the project?

The role of NIMASA is also very essential. The dynamic nature of transportation makes it necessary for these agencies to contribute to the success of dry port. NIMASA has a big role to play in terms of security, its supervision of the sea port has now extended to the dry ports. And there would be a time when the Shippers Council would bring all the agencies together when we start operating fully, to know their responsibilities. But now, we have a meeting where all the shipping companies, terminal operators, NRC and many other agencies and NIMASA, we all came together a month a go, where we studied all the issues.

Aside customers and Shippers Council, which other agencies are at the Kaduna dry port?

We have SON, we are talking with NAFDAC and we are also talking with plant quarantine. They have to look at the standard. Some of the agencies may not be present at the port, they can do their regulatory exercise outside the port.

Why are the differences between dry ports and the sea ports?

The operation of the dry port must be a radical departure from what we have in the sea ports. We are conscious of not making the mistakes the seaport made in terms cumbersome procedure and congestion. The dry ports are technologically driven. They must be a automated. They have to operate 24 hours. Cargoes must be cleared within the shortest time possible. And there would not be congestion to and from the dry ports. This we told the government of Kaduna. They are building the roads; they are providing security, providing electricity, water and many other things we have asked which the  state government has done.

What are the promoters doing in terms of profit scanners?

The Customs and the operators are thinking of deploying scanners to the dry port and easy accessibility. And the investment in the dry port has been very very overwhelming

How are you going to protect the containers from being diverted?

What we are planning to do is also to track all containers destined for the dry ports. We have to track them so that we don’t see cargo diversion. Customs is rightly worried about the possibility of diversion. But we are producing a technology that would allow Customs to monitor the movement of each and every container so that there would never be no diversion of containers destined for the inland container ports so that Customs can collect their correct duty and other levies for the Federal Government.

How far have you gone with the Truck Transit Parks?

In about two weeks from now, we would have finished the procurement process. We will call for expression of interest. We have had deluge of investors. Right now, there is $3.5billion made available to be deployed to the Tuck Transit Parks which will create 128,500 jobs between 2018 and 2020. This is the contribution of the Truck Transit Parks to the economy. For us at the Nigerian Shippers Council, this is just the beginning. We are going to look for investment; we are going to bridge the infrastructure gap with modern infrastructure.

Which agency is providing the money?

It is a private sector firm. The private sector is leading the project under a PPP arrangement in terms of the dry ports and also, in terms of the Truck Transit Parks.

What is the Council doing to partner with other agencies to realise the Executive Order issued by the government?

We are partnering with the NPA and others. They have already done a lot of work, but what we studied was that there is need for a lot of infrastructure, security, attitudinal change and there is need for other institutions like the Customs to key into the directive. In terms of infrastructure, we need port lighting, the roads and security, there is no reason our ports should not work 24 hours, the terminals are ready, the customs are also ready, they have now devise shifting, so we need to talk to the freight forwarders so that they would go and clear, so everybody would be at the port without excuse, and we also need to talk to the security agents to ensure safe passage of the cargoes. If the airports can work 24 hours, why won’t Nigerian ports work 24 hours? So the ministry of transportation is coordination this, the NPA is looking at issues at the port, while shippers council is looking at the overall issues. Twenty four hours port operations have come to stay at our ports and it is achievable. It is already on. More importantly, the ports would be connected with the port master plan, the railway and the Inland waterways, NIWA is also working, we are also working with the Department of Petroleum Resources (DPR) to look into the issues of the tank farms.

Growth & Development Limited (GDL), a financial services group, is calling for the remodelling of the financial system, such that savers get more returns on their investments. Its Managing Director/CEO Kola Ayeye speaks with COLLINS NWEZE on how the firm seeks to create wealth for the middle class, the state of the fund market, foreign investors’thirst for profitability and why foreign firms should not be forced to list on the Nigerian Stock Exchange (NSE).

What role does Growth and Development Limited (GDL) want to play in the financial sector? Can you tell us about the company’s vision and what its priorities are?

At Growth and Development Limited, we take our visions, some what from our names. Our vision is creating wealth and transforming society. Our mission is to provide unique financial services solutions to strengthen and empower middle class. What GDL is saying is that a financial institution needs to create value for its customers. There are financial institutions that need to make money and impact society. So, essentially, GDL will do its best to ensure that in line with its asset management and finance house licences, it will create wealth that will expand the middle class, and thereby have a strong social impact that will transform society.

What will you be doing in the finance house and asset management units of the company?

The asset management company manages wealth with the intent of increasing the wealth of the customers in line with their investment objectives. The focus of most asset management companies will be the wealthy and the near-wealthy. We are not ignoring that market segment. But beyond that, we are interested in using our asset management licence to float funds which will offer investors average returns, but which, in addition, would channel funds towards the interventions  in the education and health sectors.

It is hard to give all of the details. By the time our first social funds is launched, it will give life to what we are saying. Our big vision is that our asset management segment will float funds that will seek investment from retail savers, large high net-worth investors with strong social conscience and from international social impact investment funds. Now, when we float these funds, we will offer them average returns, and we will channel returns from the funds into social services, but it will not be done as Corporate Social Responsibility (CSR).

These roles will be embedded in the core mandate of those funds. We are working on something on the employment stimulation area, and also a framework, that will be pitched in six states and focused on education. The details will become clearer once we conclude the launch of the funds. In simple terms, what is going to separate GDL from other financial services companies is that we are going to do a number of things, including moving funds and investment into the social sector, largely education and health.

Can we classify the funds as Mutual Funds?

There will be mutual funds. They will pull funds from all the people buying the units, and distribute returns periodically. But in addition, part of the objective of the fund will include what is done with some of their profits. Some of the profits will go into some of these courses.

How is the mutual fund market doing? Are the grassroots keying into it?

Markets run through cycles. Before the global financial crisis, there was almost 100 per cent interest in the capital market. After the crisis, I think the retail investors had left, and I do not think they have returned. Mutual funds define its market segment. There are mutual funds that are focused on equities. Those ones have not recovered. But there are mutual funds that are focused in the money market. I think, those are much more popular. And I think the success of each fund depends on its sales strategy, and areas you chose to do so. There are some of those funds that have continued to grow. And some of those growths are focused on investors. The money market funds invest in government securities. It offers diversification. Being under a better management, you should be able to achieve a better yield than if you invested alone.

Yields on government securities are coming down. Does it show there is no much future in that market?

I do not think so. We should be careful. Twelve to 13 per cent on government securities are extremely high. But because we are coming from 18 and 19 per cent yields, it is looking low. A healthy economy needs to achieve single digit interest rate. I think the question really is sustainability. When oil prices are high, it easier to stabilise economy and keep interest rates lower. The challenge is when oil prices go down. And they will at a point because that is the life of commodities. But if you ask me, where are interest rates are now? They are not low. If you want to grow economy, especially the real sector, we should not say these rates are low. It will take sometime and then the investors will adjust.

How are you handling foreign investors in the mutual fund market?

You know the foreign investors are looking for returns. And in some of the international markets, they will get two to three per cent. There are times in Germany when interest rate was negative. You keep your money in the bank and you pay the bank for keeping your money. We are not competing with foreign operators. They bring the money, and buy, and when it is matured, they take their money. There was a law that required foreign investors to keep their funds in Nigeria for at least two years before they can exit. Now, we are taking our eyes off those rules. It is hot money. We are saying now that reserves are approaching $50 billion, quite a significant of that amount has come in as hot money. The challenge with such money is that if you do not put a collar around their neck to make it difficult for all of them to exit, at the slightest smell of trouble, they leave. They create a run on your currency and create a crisis. The concern is that we are exposing ourselves to a potential run. Take for example, there is a problem around Iran, and oil prices are above $80 per barrel, if something happens and oil prices become $25 per barrel, you will be shocked at the speed those foreign investors will sell their instruments and exit. And that puts your currency at risk.

We ought to be much more deliberate to ensure that the downside of having portfolio investors in our market is managed. I do not think we are doing enough to curtail portfolio investors.

Do we have foreign fund managers in Nigeria and how are local operators competing with them?

Well, the market is regulated not by foreign institutions but by Securities and Exchange Commission. So, if you want to invest, you do not need any licence. You just bring your money, they will collaborate with us. You bring a local fund manager and they buy whatever instrument you want, or you ask him for an advice and you invest based on the advice. However, if you want to operate here not only as an investor but as a fund manager who has set up shop, you get a licence and play locally.

What we have seen is that the investment space here has a number of Nigerian institutions, and some have foreign shareholders. We have many of them that have registered here and have local affiliates. I do not think they are a threat to the market. Leading Nigerian players are holding their own. We do not need any protection, this market is matured. The skills to compete are resident here.

Previously, we were seeing a lot of new listings in Nigeria. What is holding the companies back from listing?

One of the key things in listing in the market is timing. If you go to the market when it is soft, you will be selling at a discount. So, I think, essentially, what you are seeing is that market capitalisation is back to pre-crisis era, but it is going to take some kind of strong pick up to have companies that have grown, and not listed to want to access the market. Recall, many periods of huge listings in the market have always been regulation or government-led. In the 70s, to some extent, early 80s, indigenisation and privatisation led to listings. In the 90s, you have consolidation of banks. And many banks in the process of capitalisation listed because of the N25 billion minimum capitals. In the absence of such policy-led moves, there are companies that have done very well, and the management decided, that in order to monitise their wealth, they have to list.

Are there other measures that can boost listing in the market?

If government were to decide that all the telcos should list, that will be policy-led. Or if they said that Joint Venture Companies should list. I do not think that people should be compelled to list. We should rather create incentives and make them attractive for them to do what we want them to do. On the finance house side, one of the things we are concerned with is that not only in the developing world, the failure rate of small companies is still high. A company starts small or micro, and then grows. Then they reach a stage where they stabilise. By the time they stablise, it means they are big. Maybe in Nigeria, you are talking about N3 billion turnover. By then, you are not struggling, you have the right cashflow, the future is predictable.

You meet your expenditure on time. Unfortunately, most companies do not progress beyond that stabilisation stage. When you see a number of companies built by their owners, instead of moving from this stage to next level, they collapse. One of the interests we have is to identify those companies that are stable, and encourage them on the route of stablisation, which include for them to contemplate listing on the Nigerian Stock Exchange. That is one of the roles we want to play in the finance side. What we will do will be good for the economy. I think it will be tragic for  you to name a dozen or two companies that have reached that level of stabilisation and disappeared.

I think Nigerian companies have to realise that after they have stabilised, the next state is to institutionalise. And one of the important variant of instutitonalisaion is getting listed.

Which segment of the market are investors likely to get the highest returns in the next six months?

You know, the market has to be watched very closely. My view has always been to try and stick with the best names. If you are looking at a short time horizon, 90 to 180 days you are really speculative. I think people who hop in and out may not make it. We are in for a long time investment.

What makes you think you can give the middle class more returns in a market where other players are giving them less?

The life of retail savers do not get transformed because of the yields they get. If you save N100,000 at three per cent, you get N3000. What does N3,000 do for you? At 10 per cent, you get N10,000. What does N10,000 do for you? Well, 10 is better than three, five is better than three. But you see, that is why we talk about three types of wealth: personal, transgenerational and the commonwealth. Personal wealth is the money the retail saver has in his house.Trans-generational wealth is about companies that have become institutions, so will last several generations. Common wealth are the things  we need. When we are dealing with wealth in GDL, we are not just talking about personal wealth,  we are also looking at trans-generational and commonwealth wealth. For those savers, the greatest thing you can do for them is to strengthen the common-wealth. Now, we are not a charity organisation, but we have agreed to create a framework where some of the savings come into our vault, and they get a little more than they are getting from other banks. We also want to invest and intervene in things that strengthen commonwealth. It is a new perspective and we are determined to make it work.

How do you want to do that? Are you going to partner companies already in the business? Or are you going to start businesses in that direction?

There are different classes of investors. There are governments,  internationally social impact investors and high networth individuals. We are going to put that into network and we will create a framework.

What portfolio size are you looking at in the next five years?

We expect to grow very, very big. We have just started, but the things we want to do are audacious and we want to take them bits by bits. We also want to have some of the parties already doing some of those things do them better. We cannot take over education and health, but we want to act as an important catalyst in getting thiose services to the people.

What are the products you have that will help you realise your goals?

We have the money market funds, which we are going to launch shortly. The approval is with the Securities and Exchange Commission. We are working on employment stimulation fund, which will be a private fund. We hope it will be listed before the end of this year. We have a transformation fund, which will focus on both education and health. We manage small pool of funds for our investors.

The finance business allows us to do normal lending business that finance houses do. So, those are the things that are keeping us busy. The things that will differentiate us are funds like the employment simulation and transformation. Our first transformation fund will close in 2019; we do not see it closing this year.

Finally, what are the measures you have put in place to ensure that investors’ money is secured with you?

I think the first thing is to look at the character of the people. I do not want to blow my trumpet. The investors with whom I have been associated with, my colleagues I have worked with in the past 30 years know that one of my most important defining cover is ethics. And it is  too late in the day to change. So, I am very big on character. I have strived hard to maintain a good name and I am going to continue to do that. The second thing is that we are a  licenced and supervised institution. The third thing is that in the structure of our funds, we will always put safeguards. For example, when we float funds, we have trustees and custodians. Which means that our role as managers will be separated from the custody of the assets.