As the Managing Director/Chief Executive Officer, Juhel Nigeria Limited and President, Enugu Chamber of Commerce, Industry, Mines and Agriculture (ECCIMA), Dr. Ifeanyi Eric Okoye understands the factors hindering the growth of the manufacturing sector and what must be done to make it globally competitive. In this interview with Assistant Editor Chikodi Okereocha, Okoye says if the sector must grow, the poor electricity supply across the country, particularly in the Southeast must improve. He speaks on other issues.
The devaluation of the naira because of the crash in oil prices is forcing companies to lay off workers. What is your take on this, and what is the situation in the pharmaceutical industry?
It’s a problem and we know where it came from. The nucleus of the problem actually is the fact that we have been operating as a mono economy, depending solely on oil. Because of that as the price of oil started coming down our naira started tumbling. This impacted the economy as people have to re-strategise. As far as the pharmaceutical sector is concerned, more than 98 per cent of raw materials used by the are imported. This has affected the prices of goods in the country. So, the prices of drugs will definitely go up a little bit. However, we believe it’s going to stabilise. Given the mono economy nature of Nigeria, the government’s effort to decentralise the economy will definitely take care of the problem. By the time this goes full circle the economy will become stronger. Nigeria, of course, has been trying to ensure that agriculture is not just about feeding ourselves but also exporting our products. The strategy of trying to make manufacturers stronger by making funds available at affordable cost is good; it is only that we have to encourage the government to go ahead with that and make it permanent, not bringing it as an intervention. It has to be a continuous process so that people can access funds at single digit interest not giving special funds at single digit and then going back to an expensive interest rate. So, we hope that when these things are taken care of, the economy will stabilise and every other sector, including pharmaceutical, will benefit.
How can the country contain the problem of raw materials import, which pushes up cost of production?
That is exactly what we are saying; Nigeria should remove its sole interest in oil so that people can go into agriculture and manufacturing. When they go into agriculture, it will affect some of the raw materials from our agricultural products. If they go more into manufacturing, importation will reduce because most manufacturers in Nigeria will start using raw materials that are locally available. This will definitely reduce importation.
The effects of importation appear to be felt more in the petroleum industry. What is NACCIMA’s position on the privatisation of refineries?
The government has no business in business. Every business must be privatised. The government can have a little share to protect its interest and not having sole ownership of the business. Any business the government has sole ownership of will, definitely, suffer because it’s nobody’s business. So, for us, privatisation of the refineries is very necessary. However, in the course of the privatisation, the process must be devoid of corruption in all ramifications. It has to be an open process because the right people who will operate the refineries profitably should be allowed to take them over.
Manufacturers still complain of poor electricity supply more than a year after the privatisation of the power sector. What is the situation in Enugu State and the Southeast?
The situation has not improved; it is even worse now than it has ever been. The worst part of it now is that the tariff has also changed, almost 100 per cent more than it was before January 2015. Before, we used to pay N23.97 kobo per unit of electricity, but from last January it changed to N46.66 kobo per unit and this is killing and really dangerous. The electricity availability has not improved; it is even getting worse and the cost is increasing. This is very dangerous, especially for businesses in the Southeast. The cost is not uniform. In Lagos they pay about N26 per unit of electricity, while in the Southeast we pay N46.66 kobo per unit. This is unacceptable; it is killing businesses.
How are your members surviving the electricity supply challenge?
We will dialogue with the federal and state governments; there is nothing we can do than dialogue.
With the way things are, do you still have confidence in the ability of the GENCOS and DISCOS to turn things around?
I don’t think the ones in the Southeast are going to achieve anything. However, we got information that they have been given some money; the Central Bank gave them over N200 billion recently. That might help them turn things around.
Are your members accessing the N220 billion CBN fund for Micro, Small and Medium Enterprises (MSMEs) and other similar funds domiciled in the Bank of Industry for the development of the industrial sector?
Very few have had access to the funds and we are talking to them and telling them to make the funds available to more people in the Southeast. So, we hope they will open up. We are also advising that they should educate the people more on how to access the funds, not just keeping the funds within themselves and asking people to come individually.
From the experience of your members, what are the issues hindering access to the fund?
I think it is information and collateral. If you want a company to grow, the company doesn’t have to invite its great, great grandfathers to sign for them to be able to access to fund. Collateral for the fund should be made easier.
But from the perspective of BoI, most operators seeking fund don’t have bankable business ideas to back their requests. What is your take on that?
It means that they would need to educate people more so that they will understand what bankable projects are. They don’t pass enough information to the people.
What is the chamber doing to assist members to address some of the challenges of accessing the funds?
What we have to do is to still press BoI and CBN to, if possible, send delegates to chambers when we are having functions to come and educate our members on how to access the fund and present their projects in a way that will be acceptable to them.
Where do you see the economy this year? What are your projections?
Except for the naira problem, which is because of falling oil price, there is hope. And I believe that other issues will be well managed. This year, I think there is hope for the economy. However, it has to be tight; people should really go for what they want; there is no room for unnecessary expenses. The economy will keep growing.
This Enugu International Trade Fair has been shifted to March 13-23, 2015. What should participants expect this year?
This year’s trade fair will be completely different from past editions because we have discussed with many foreign companies. We will have more foreign companies at the fair. Also, we want to introduce innovations. We are going to have a lottery, which means that any visitor to the fair may come with nothing and go home with something valuable and surprising just as in a lottery. We have also decided to establish a very big tent, about 1,000 square metres and fully air-conditioned for special organisations. We have also invited a strong business man, Chief Arthur Eze to chair the opening and he has accepted. We are expecting over 1.2 million people to visit the fair.
How many firms are expected at the fair?
We are expecting about 500 firms, 80 of which are foreign ones. We are visiting various embassies now. Asian, European, American and Chinese companies would exhibit at the fair.
Is the chamber collaborating with the Enugu State Government? What kind of support are you getting from the state government?
The Enugu State Government has been supportive as before. This year, at least, it had tried to make the venue of the fair more presentable. It has also before the fair resurfaced the road leading to the ground and the one in front of the fair which is completely tarred. The governor has made Enugu a different city. If you come into Enugu, there is nothing black out in the night. Generators power street lights, highly illuminating the town throughout the night. This has reduced crime within the city at night and allowed people to enjoy the city at night. Today, visitors are free to walk around without fear.
How has previous fairs impacted the economy of state and the Southeast?
If the fairs don’t impact the economy of the state and the nation in general, we will not continue what we are doing. Recently, from last year, Nigeria became the biggest economy in the whole of Africa. This is one of the results you are getting from fairs all over the country and Enugu Chamber of Commerce, Industry, Mines and Agriculture has assisted most of the South East, South-Southern states in terms of economic growth of the nation. So definitely we must have contributed to Nigeria’s being the biggest economy in Africa. If you look at some of the companies within the Southeast, you notice that some of them actually started business from the contacts the made during the fairs. We have a company like Innoson Group, which originated through its contacts from the fairs. The fair has been a fertile ground for business contacts and because it’s a regular thing people look forward to it to come and start new businesses. Entrepreneurs come every year to start new businesses and also grow existing ones. It contributes a lot to the growth of the nation’s economy.
Aside the state government, are you enlisting the support of organisations and private sector operators?
The support we expect from them, which we have got, is for them to be part of the fair. Many foreign companies are part of the fair already and indigenous companies are also part of the fair. So, they are coming and as they come, they have to make some payments for taking part in the fair; they also stand to do their businesses. After all, the trade fair complex belongs to the Federal Government, it’s not owned by the state, which means the Federal Government is really part of it. And it’s good to let you know that the President will declare the fair open.
The fair is holding this month. Did you factor in the coming general elections?
Actually, we changed the date because of the change in election dates. We were to have the fair from March 27 to April 7 but we had to change our dates to March 13 to 23.
What are the arrangements to ensure the security of lives and property of participants at the fair?
We have made necessary arrangements. Like I said earlier Enugu State is the safest state in the federation because of the way the governor had made it. Like I said there is nothing like darkness at night; crimes thrive where there is darkness. Crimes don’t thrive where you have light. The issue is that we have on our own provided some security around the fair. The Federal Government is involved, the Police are involved, and the state government is also involved so there is no problem at all with regards to security. We’ve never had problem of security since we started having fairs over 25 years ago and of course, we won’t have it this time.
