The Nation Newspaper

Tag: production

  • From engineering to flour production

    From engineering to flour production

    Mrs  Jane Kolawole, Director, Janeland Net-works Limited is  a chemical engineer.

    A product of Ladoke Akintola University of Technology(LAUTECH), Ogbomoso, Oyo State, she  became an entrepreneur a quirk of fate. She was given a contract  job instead  of a permanent one in a company  she served  as a Corps member.  Mrs  Kolawole realised that it was difficult for her  to keep the job and her home  as she had to leave early – sometimes at 5 a.m Lekki from her home at the mainland.

    Along the line, she  discovered  that her passion is in production. As she searched for ideas, she began to notice that many homes and small entrepreneurs use beans as an ingredient. The Janeland Networks boss decided to experiment with bean flour and started the  business from her kitchen. After some trials she produced a bean flour product acceptable by people making moin moin and akara.

    Her bean flour is made from beans, which has been cleaned, peeled and milled to a fine flour. The flour is used to prepare dishes such as moin-moin and akara.  Her experience in the chemical  industry along with her passion for good food has made her  a valuable asset in the creation and development of bean based products.

    Mrs   Kolawole started the business around 2010. In the beginning, business was slow. But she has been toughened by the highs and lows of the business.

    Some of the greatest challenges she faced at the beginning were economic. Mrs  Kolawole  started the business with little money. Then shwe bought a half  bag of  beans for  N8000. Now, it sells for between N10,000 and N12,000. She hopes  to run a successful business that will create jobs for friends and families. She has taken the risk, and proven that she has the courage to step up to the edge of the precipice and believes that she can make it. She is continuously look for ways to improve the way  the business  provides services to clients as a startup.

    She attributed growth of the business to her strong spiritual faith. The growth of the business is linked to good word-of mouth from satisfied clients, who continue to give her referrals and kept patronising her.

    Currently, the bean market is not oversupplied, so, she is going to benefit from increased demand, but needs funding to expand and support several products and initiatives to help small scale food producers.

     

  • How to boost food production, by Obasanjo

    At the lecture of the Agricultural and Rural Management Institute(ARMTI) in Ilorin, Kwara State,discussants examined ways to revamp the agric sector. Former President, Olusegun Obasanjo was guest speaker. DANIEL ESSIET reports.

    IT is a yearly event.Every year,the Agricultural and Rural Management Training Institute (ARMTI),Ilorin,Kwara State,picks a topic on agriculture and invites experts to dissect the subject. The 16th yearly lecture has been held with former President, Olusegun Obasanjo as the guest speaker. He was there in 1983 to deliver the inaugural lecture entitled:” Management in Agriculture and Rural Development: A practioner’s view.”

    Thirty years after,he was there again as an agribusiness man to speak on “Managing Agriculture as a business: A practitioner’s perspective.” It was a lively session. His presence added a lot of spark to the proceedings.

    In a citation to introduce him, the chairman,2013 lecture planning committee,Mr Gbenga Okeowo described Chief Obasanjo as “an embodiment and a personalification of atapatadide, a person who from a state of hopelessness, but through thick and thin,rose to become not just a success story, but a phenomenon and the pride of his race and generation.”

    Obasanjo urged the audience to work together in developing agriculture as a possible solution to grippling unemployment.

    H e said African governments and agro busineses have failed to take full advantage of the opportunities agriculture has presented the continent.

    This ,he explained, is the reason why the continent has witnessed stagnating or declining per capital incomes and agricultural output.

    1960 ,he said, saw more African countries achieve independence than any other year. Half a century later, millions of people on the continent still go hungry, despite agriculture’s huge potential there.

    He said after 1979 almost all gains in agriculture progress in Nigeria seem to have been destroyed through indiscriminate importation and dumping in Nigeria.

    His words:”I was skeptical if we could ever make it in the area of agriculture.But the progress we made between 2003 and 2007 when Nigeria grew its agricultural production by an average of seven percent per annum enhanced my optimism and enthusiasm. For instance,cocoa production increased from 150,000 metric tonnes to 400,000 metric tonnes; cassava production from 30 million metric tonnes to 50 million metric tonnes.”

    H said it was heartening that the present administration has put the gear back to forward in a number of essential commodities.

    According to him, for agribusiness to be embraced and upheld,a consistent and predictable policy is needed from the government.

    He also said there should be clear support in all areas of the value chain.

    He described how his training at Moor Plantation ,Ibadan , guided him to success in his poultry business.

    For him, agriculture may not make one an instant millionaire but can offer not only survival and a decent living but also a chance to rise above one’s circumstances.

    Obasanjo said investments in agriculture are difficult given the risks with it. He said climate change and natural disasters were also mitigating factors in the development of the sector.

    He said agriculture must be looked at in its entirety in order to make agricultural systems more resilient, thus improving crop diversity, which effectively “translates into a food security plan”.

    He said it is important to build agro industries based on comparative advantage and to develop them into knowledge industries supported by research and development.

    Obasanjo stressed the need to invest in agriculture while simultaneously strengthening the private sector.

    He also pointed to the crucial role of farmers’ market access in raising agricultural productivity.

    Congratulating Obasanjo,the Minister of Agriculture and Rural Development,Dr Akinwumi Adesina said the former President had an impressive contribution to agricultural development as head of state and elder statesmen.

    According to him, the ex-president’s Operation -Feed -the Nation(OFN) laid the foundation for agricultural growth.

    He said Nigeria would have had no reason to import major food products if all the past lofty agricultural programmes by successive governments had been implemented to the letter. He said Obasanjo’s OFN had the capacity to focus growth and expansion in the industry.

    He said agriculture in Nigeria has remained rudimentary and mostly in the hands of the resourcepoor in society.

    Besides,the returns in farming are marginal, while the social perception of a farmeris quite derogatory and unattractive for the younger generation.

    He said the present regime is ready to take corrective measures to repostion agriculture as a business .

    The minister said this can only be achieved if farmingbecomes attractive to investors, scalable and profitable and with less drudgery.

    H said the government will focus on furthering the productivity of farmers and their agricultural practices.

    To meet it, Adesina said a major increase in agricultural productivity will be required and thisincrease will have to be made in a context where the climate is changing, temperatures rising, soilquality degrading and water becoming scarcer.

    He said the government is working on a series of practical actions which will be implemented to have a positive impact on the problems.

    Adesina said agricultural growth is crucial to economic development and social progress. It is this growth h e said that would help to lift Nigerians out of hunger and poverty.

    The Acting Executive Director,Mr Samuel Afolayon ,said the institute was delighted to have Obasanjo as guest speaker.

    He said ARMTI is one of the leading institutions producing manpower for the agricultural sector.

    At the end of the programme, there was clear consensus Nigeria has the potential to achieve food security. Participants believe it is now Nigerians’ responsibility to realise this potential. Some 300 participants from around the country attended the lecture. They included politicians, agricultural development experts, scientists, business leaders and journalists.

    Each year, the institute presents an annual lecture that take place in its auditorium. The event encourages discussion and response on topics vital to sustainability in agriculture.

    The lecture is delivered every year by a leading figure in the industry who is invited to speak about issues regarded as most important in shaping the way food is produced, distributed, marketed, sold and consumed. On his arrival,Obasanjo was led on a guided tour of facilities by the management team of the institute.

  • Niger to boost rice production

    The Niger State government said it had entered into agreement with some commercial banks to inject N17 billion over the next three years in rice cultivation in the state.

    The state Commissioner for Agriculture, Alhaji Ahmed Matane, said this at Kuchin Woro village in Lavun Local Government Area during the disbursement of relief materials to victims of 2012 flood.

    He said 200,000 hectares of land would be cultivated with an expectant annual yield of one million tonnes of rice.

    Matane said that 100, 000 farmers are expected to participate in the project, with each farmer getting two hectares for rice cultivation.

    According to him, each hectare is projected to produce five tonnes as against the current yield of two tonnes.

    “The farmers are expected to cultivate the rice all-year-round, thus ensuring that farmers participate in dry season farming too instead of depending on rain water for their farming.

    “Each farmer will be provided high yielding seeds, fertiliser, herbicides, and harvesters among other farming inputs that will guarantee them higher yield, with the assistance of their extension officers.

    “The rice consortium project will not only improve the living condition of the farmers but will equally improve on the availability of rice for ordinary Nigerians and even for export to other countries.“

    Matane said the farmers would also be trained by experts to ensure compliance with modern farming methods.

    He gave the assurance that the state government would provide market outlets for the rice. The commissioner advised farmers to register their names under cooperatives in order to participate.

    Matana distributed 500 bags of rice, 1,200 bags of cement and 400 bundles of roofing sheets to the flood victims in 26 communities of the local government.

     

  • Tissue roll production

    Tissue roll is an essential sanitary commodity used in household hotels, hospitals, offices, etc. Its use cuts across political, religion, ethnic and geographical spheres.

    Most ladies now use toilet roll as sanitary pad during their monthly periods. It is also widely used during social gatherings, such as parties and ceremonies. Its greatest use, however, is in the water closet system where it is the only appropriate application for cleaning up after using the bath.

    Thus, tissue roll enjoys nationwide demand and patronage. Infact, it is one of the fastest selling consumer goods in the country today. It is made from wood pulp or recycled paper. The use of wood pulp for tissue roll production is not yet popular in Nigeria.

    The major raw material is the jumbo roll, which is already processed tissue paper wound round a big wooden or paper core. The jumbo rolls are obtained from dealers within the country.

    A small scale tissue plant consists of the following machinery. The core maker, roller unwinder, log cutter, packaging model, etc. At full capacity, the plant is capable of producing 12,000 pieces of tissue rolls daily. Production process begins with the use of the core maker for the production. The jumbo roll is fitted into the rewinding machine, which is connected to the core with necessary adjustments to determine the size, tightness and width of the rolls. As operation starts, the motorised machine starts a rewinding motion in the jumbo roll. It stops automatically when the size is reached. The long roll is now passed on to the band saw machine or log cutter that cuts it into 15 tissue rolls.

    Produced rolls are wrapped, counted and packaged in transparent polythene sheets containing 48 pieces ready for sale. The project is better sited in any of the urban or semi-urban town in the country. This is to provide close source of raw materials and ready market for disposal of finished goods. A small building with open floor will okay for the machinery. Alternatively, a three-bedroom flat of standard dimension or a warehouse may be rented. There should be separate rooms for raw materials, finished goods and administration. Staff required for running the plant is few. About nine personnel will be required for a start. Staff strength can be increased when the company expands.

    Estimated cost of a small tissue roll plant with the above stated capacity may cost between N970,000 and N1.5 million. This can be scaled down or increased depending on the financial strength of the promoter. Potential investors in need of capital for implementation of this or any of our listed small scale project may get in touch for assistance.

    The target markets are household, hotels, hospital, offices, etc. The investors should ensure that the product is of high quality and that standard specifications are met. The packaging materials should be attractive enough with a unique brand name for product identification.

    Well-known bulk purchasers should be appointed as distributors with attractive rebates. They would act as sales outlets for the product. The plant under consideration has a capacity for producing 12,000 tissue rolls per shift of eight hours/day of 250 days per annum. Turnover for the first year at 50 per cent capacity utilisation is estimated at about N21.26 million. Out of this amount, a conservative pretax profit of about 23 per cent is realisable. This project is an all season one. The raw materials and equipment are all sourced locally. The project can pay itself in the first year of operation. Investment in this project is a step in the right direction.

    This project stands a good chance of attracting finance from the banks, where individuals or corporate bodies are assisted with funds ranging from N500,000 to well over N50 million. A well packaged feasibility report is pre-requisite to securing finance for the project. This can be provided on request.

    For details on how to implement this project or any other, please contact the project consultant @ krisedbrilliant@yahoo.com

    Quote for entrepreneur

  • Laundry starch production, ‘a money spinner’

    Laundry starch production is a money spinner. Many Nigerians buy starch for laundry. Most consumers buy it from hawkers.Well-packaged starch in shops attract higher prices. Investing in the business is quite rewarding.

    Starch is produced from cassava. Several stages are involved in its production. These include peeling and washing of the cassava tubers; grating/pulping follows with the use of a rotary grater or a harmer mill.

    This procedure will reduce the tuber to a state whereby the starch from these tubers would be nearing extraction. To extract the starch from these tubers, water is added to the milled substance. Screening and sieving of the resulting suspension follows. This is allowed to settle for some time. Through the use of a mechanical or hydraulic press, dewatering and cake-breaking follows. The procedure is followed by drying through the pneumatic/tunnel dryer to a moisture content of about seven per cent.

    The next step is the grinding/ milling of the starch to fine particle sizes after which it is allowed to cool before being weighed and parked for sale to consumers.

    Machines and equipment required for all the stated process include peeling machine, grater, slurry tank, sieving machine, hammer mill, weighing and packaging machines. All operations can to be automated. These machines and equipment are available locally. This project will capitalise on the increasing social awareness of Nigerians, particularly those in the medium and high income earning categories, our ever- increasing population figures and finally the increasing number of laundry and dry-cleaning outfits and hotels in the country.

    Prospective investors should note that in as much as the project is viable, it is capital as well as labor intensive in nature. For this project, initial staff strength of seven will suffice. Staff strength will expand the moment the company consolidates itself in the market. In addition, the promoters should ensure that the finished products are packed in well designed and attractive labels to increase sales volumes.

    Cost of setting up this project on a small scale is estimated at N2.5 million. This amount can be scaled down or increased, depending on the financial strength of the promoters. The plant in mind is capable of producing two tonnes of finished products a day.

    Working for a minimum of 250 days in a year, the total production will be 500 tonnes, which is equivalent to 500,000 kilograms. It should be noted that finished products would be packed in grams sizes using the weighing machines. A unit, made of 250 grammes, is being considered in this analysis. This will give a total of two million units. At a wholesale price of N25/ unit, annual sales will be N50 million. A conservative pre-tax profit of 35 per cent or N17.5 million is realised in the first year of operation. The viability of this project is not in doubt considering its high turnover and envisaged profit margin.

    This project stands a good chance of attracting finance from the banks, where individuals or corporate bodies are assisted with funds ranging from N500,000 to well over N50 million.A well-packaged feasibility report is pre-requisite to securing finance for the project. This can be provided on request.

    For details on how to implement this project or any other, contact Kris-Ed Brilliant Limited, 395, Borno Way, Harbert Macauly Road, Sabo-Yaba, Lagos State. E-mail: krisedbrilliant@yahoo.com

     

  • Production from Port Harcourt refinery hits 17m litres daily

    With the maintenance work carried out by the Nigerian National Petroleum Corporation (NNPC) at Port Harcourt Refinery, it now produces 17 million litres of different products per day, it was learnt.

    The new production level was attained as a result of the rehabilitation of the nitrogen plant of the 210, 000 barrels per day refinery, which has been dysfunctional for over a year.

    However, the optimisation of the refinery is being limited by the incidence of vandalism of the pipelines that supply crude and evacuates products from the refinery.

    Spokesman of the company Mr. Ralph Ugwu, had told reporters that the refinery produces about 7.5 million litres of premium motor spirit (petrol), three million litres of dual purpose kerosene (DPK) and 6.5 million litres of automotive gas oil (diesel).

    Ugwu said production from the refinery now contributes to the nation’s petroleum products supply to guarantee availability of fuel Nigerians. The development, he added is part of NNPC’s plan to reduce the volume of imported fuel especially petrol as well as subsidy paid by the government.

    Ugwu noted that the management of Port Harcourt refinery have activated processes to bring the critical units of the plant back into operation adding that the fixing of the Nitrogen plant has also paved way for the maintenance and putting other vital sections of the refinery into operation, including the Catalytic Reforming Unit (CRU) and Naphtha Hydro-treating unit (NHU).

    He said that when the planned turnaround maintenance of the refinery is completed, production would increase by about 30 percent.

    The Group Executive Director, Refineries and Petrochemicals, NNPC, Tony Ogbuigwe, commended the management of the Port Harcourt refinery for the commitment to ensuring increased output from the refinery and assured them of NNPC’s support to sustaining operation of the plant.

    The Managing Director of the refinery, Ian Udoh, said the members of staff of the company are committed noting that the modest success achieved was due to the foundation laid by his predecessor Ogbuigwe. He urged the staff to sustain the tempo despite challenges resulting from crude supply disruptions by oil thieves and vandals.

    On attacks on the pipeline, he said that 199 incidents were recorded product line from the refinery to Okrika Jetty in 2012 alone. He also noted that challenges of pipeline vandalism including pollution of the environment and economic loss.

    He also pointed at other concerns over the pipeline breaks to include environmental pollution and degradation, huge economic loss and possible fire outbreak in contiguous local communities.

    In view of the above challenges, Ugwu said the company has embarked on massive enlightenment campaigns in its various host communities stressing the dangers and effects of pipeline vandalism and product adulteration to health, safety, environment, machinery and the economy.

    “The management of PHRC passionately appeal to opinion leaders and government agencies to come to its aid in curbing the activities of vandals through the enlightenment of the citizens to enable the company deliver on its mandate of ensuring optimal and sustainable production of refined petroleum products for the benefit of all Nigerians,” Ugwu said.

  • Stars to perform at Monlisa Chinda’s Xmas Dance Production

    Stars to perform at Monlisa Chinda’s Xmas Dance Production

    COME Monday, December 24 (Christmas Eve), the Oriental Hotel, Victoria Island will come alive as talented actress, Monalisa Chinda stuns Nigeria’s theatre and performance world with the maiden edition of her world class production titled ‘Project Help: A Dance for Life’.

    An enactment of contemporary dance powered by Bailamos Dance Company as directed by choreography wizard Bunmi Olunloyo, it promises to be a night that will parade the best of Nollywood stars in an amazing dance-style form that will leave the audience spellbound.

    The event is expected to feature an array of Nigeria’s biggest actors including Desmond Elliot, Kate Henshaw, Segun Arinze, Uche Jombo, Bimbo Akintola, Bovi, Monalisa Chinda and many more. The Nollywood stars will deliver electrifying performances and recitals expected to intensify the tempo of the Christmas dance production.

    Speaking about the inspiration behind the event, Monalisa said, “I’ve been nurturing the dance production idea for quite a while but my several engagements wouldn’t avail me enough time, so I kept developing it. I’ve always wanted a production, away from the norms, where people can experience classical recitals at its very best. While this remains a great way to celebrate Christmas with loved ones, I also see it as a powerful means of awakening the dwindling culture of theatre in Africa at large. We’ve been working on this for a while and it promises to be a memorable atmosphere of unlimited ecstasy, joy and bliss.”

  • Flooding: Jonathan approves N9.7b food production plan

    Flooding: Jonathan approves N9.7b food production plan

    TO support farmers in flood-ravaged states, President Goodluck Jonathan has approved N9.7 billion for execution of flood recovery food production plan.

    The plan, which involves the release of 40, 000 metric tons of food from the Strategic Grains Reserve to the affected families, will include provision of free seedlings and fertilisers to affected farmers.

    The Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, disclosed this during an emergency meeting with Commissioners for Agriculture and Rural Development on the National Flood Recovery Food Production Programme in Abuja.

    Adesina said: “The real issue is how we compensate for the losses incurred. We have already put in place a flood recovery food production plan to support famers in the flood affected areas.

    “As the flood recedes, we will embark on the intervention. Mr. President has approved N9.7 billion for us to implement this plan.”

    He added: “The plan has four components: first, we will release 40, 000 mt of food from the strategic grain reserve to the families directly affected by the floods.

    “Secondly, we will provide free improved seeds and fertilisers to farmers that are directly affected as soon as the water recedes.

    “Thirdly, in states that are affected by floods, but vast areas unaffected, we will give them improved seeds and fertilisers while the last group, which are states not affected will also benefit from the free seeds and fertilisers but through the Growth Enhancement Support (GES) scheme.

    Describing the disaster as a wakeup call for all stakeholders especially in the agriculture sector, the minister identified Taraba and Kogi States as the worst hit.

    He explained that the flood claimed 106, 400 hectares (ha) of 751, 540ha total cultivated area in Taraba while Kogi had crop loss of 72, 200 ha of 250, 670ha cultivated farmland.

    Adesina further put the total flooded areas as at 12th and 13th October, 2012 to 1.4 million as estimate for crop loss was 467,000 ha.

    Adesina dismissed imminence of food shortage next year adding that the mentioned data were outcomes of a sophisticated remote sensing and satellite imagery research conducted by the International Water Management Institute (IWMI) to determine extent of crop loss.

    He added that with the various intervention programmes and support schemes provided for the farmers, the country would not suffer food shortage.

    Kano Commissioner for Agriculture, Hajia Baraka Sani, lamented the flood had affected about 25, 485 ha of farmlands while the state is yet to examine losses incurred on the irrigation farms.

    She said a total of 31 out of 44 local councils were affected, asides from houses and properties washed away.

    Sani commended the Federal Government for the initiative, stressing that it will complement the state’s effort towards assisting the affected farmers.

    Her Kogi State counterpart, Dr. Olufemi Bolarin, lamented that about 20, 000 crops of small holders and confluence sugarcanes were swept off by the flood.

     

  • Boosting food production in Kebbi

    Agriculture accounts for a substantial aspect of Kebbi State’s economy. Food crops include guinea corn, rice and millet while cash crops include groundnut and cotton.

    Others are wheat, beans, tobacco, sugar cane, sweet potatoes and vegetables, such as onion, pepper and tomatoes.

    Almost 75 per cent of the population make their living from farming. Many factors give Kebbi its competitive advantage in the agri-food sector.

    The state boasts of rich a agricultural land. About 200,000 hectares of the land are fadama land, mainly on the flood plains of the Rima and Niger valleys.

    The rest is upland, where season cultivation by mainly small farmers dominate. Agriculture continues to dominate the state’s economy. It is also the largest contributor to the state’ s coffers. Farming is mostly based on indigenous techniques, using local inputs of seeds, family and animal labour and informal credits.

    Animal traction is used among the Kambari,Dukawa and Dakarkari. Indigenous forms of cultivation are, however, gradually giving way, as more farmers now use improved seed varieties, chemical fertiliser, formal credit facilities, ploughs and tractors. Due to migration of family members, indigenous forms of farm labour also are gradually being replaced by hired labour. Some farmers rear cattle, sheep and goats to augment their income.

    These animals are fed with the stalk of grains, and leaves of legumes.For the most part, animals are grazed in the open field around the village and in the fadamas. Animal wastes are in turn used to manure the field. Therefore, some form of mixed farming is practised. Most animal rearing is done by the Fulani who oscilate from north to south.

    There are nine forest reserves in Kebbi, and there are pockets of ‘natural’ forests in the south and southeast,which yield forest resources such as wood, thatches, fruits as well as being sanctuaries for wildlife.

    Already, the forests in the riverine areas of the state are exploited for wood, used in boat building at Yauri, while in the other parts of the state (around Zuru), the people use the wood in carving mortars, pestles and handles of various implements like hoes and knives.

    Existing forest resources are, however, undersevere threat by animal grazing, bush burning and sourcing for fuelwood. These have caught the t attention of the Kebbi State Ministry of Agriculture, and Natural Resources, the Kebbi State Afforestation Programme (KSAP) and the Kebbi State Environmental Protection Agency (KSEPA).

    These agencies have pushed through various edicts to curtail the wanton destruction of forest resources. Furthermore, they have undertaken campaigns to improve the quality and number of forest reserves in the state.

    Kebbi has abundant livestock which include cattle, sheep, goats, camels, horses, donkeys, pigs and poultry. A survey of livestock potential in the state.

    The state ranks among the five with the highest number of livestock. It exports quite a substantial number to other parts of the country.

    The importance of livestock in the economy of the state can be deduced from the number of slaughtered yearly. It is estimated that about 110,000, 152,000 and 211,000 cattle, sheep and goats are slaughtered yearly in the state. Thus hides and skins are an important livestock subsector.

    The government has invested N1.6 billion in the IFAD-assisted Community-Based Agricultural and Rural Development Programme (CBARDP) in the last three years. The programme is being financed by the International Fund for Agricultural Development (IFAD), with the federal, states and local government providing counterpart contribution.

    The programme has helped youths to be self-employed by providing them with water pumping machines and boreholes to irrigate their crops. An improved variety of cowpea and millet have been introduced to the beneficiaries by the Institute for Agricultural Research, Ahmadu Bello University (ABU), in collaboration with International Institute of Tropical Agriculture (IITA), Ibadan,with a view to attracting buyers from Niger Republic.

    The programme gave farmers improved varieties on cowpea and millet,which they call ‘wanke- IFAD’ and ‘dawa-IFAD’. The farmers tried it and found it to be high-yielding and they have abandoned the old variety.

    It has also boosted crop and livestock production with the provision of improved seeds and work bulls, among other support, he said. The focus of the government is to promote greater agricultural productivity, strengthen early warning and response systems and improve livelihoods.

    To achieve these, the government works to facilitate the necessary changes in the agricultural sector and facilitate the transfer of best practices and technologies.

  • ‘Nigeria needs to develop local production capacity’

    ‘Nigeria needs to develop local production capacity’

    Founder and Managing Director, The Capital Markets Academy, Mr Delme Thompson, is a financial expert. A former head of training at the London Stock Exchange (LSE), he has worked with top executives of various stock exchanges, regulators, government bodies and several FTSE 100 and global corporations across the world in designing and implementing major changes in the financial market and the economy. In this interview with Taofik Salako, Thompson speaks on the role of market makers, the place of efficient regulators and the need to lay a very solid foundation for the Nigerian financial market and the economy.

     

     

    What’s your first impression about Nigeria?

    Interesting! There are challenges and it’s not like any other country. But there are a lot of people here interested in learning and training, so we have like-minded people. But careful, gradual steps now will yield results in the months and years to come. It’s important we don’t rush in with a big initiative; it’s important we understand what the market wants and get all these together to build a solid foundation to be able to go forward.

    I have interacted with people from different backgrounds. The interest is high and that’s really great. It’s been really great; we have been talking about the Nigerian market and how things work around the world, not just the London or New York market. We have been looking generally at the principles – these are how things work. Why don’t you look at it from these perspectives? It’s been an interesting experience.

    Given your experience with other emerging markets, what do you think Nigeria needs to unlock the potential of its market?

    From what I have seen over the past few days, about the people, the processes and things going on, Nigeria is Nigeria. It’s not like any other country and it shouldn’t be treated like any other country. But there are similarities in terms of when you look at the sectors, the population of the whole business community; the ones who benefit most have always been the ones most willing to engage the process and they are willing to engage in conversation with people who are driving the change whether it’s the securities regulator, the central bank, the advisory community, the stockbrokers and others. The ones who benefit are the ones who make themselves available. You cannot sit on the sideline and expect growth; it comes with the responsibility to participate.

    From my experience, getting the right skills is very important to the growth cycle. Training goes first. You have to start educating and growing skills of the people. That comes down to the responsibility of the management to know what skills are required and what you need to acquire these skills, whether internally or externally. It’s the responsibility of the owners of the companies to ensure their staff are equipped just as it is the responsibility of the parents to guide their children. So, knowledge and skills come first, there is no good in having good roads when people don’t know how to drive.

    If you look at initiative such as market making, it provides liquidity for the market. The market making initiative in the Nigerian market has started well, the volume is still small but it’s going to grow. But initiatives like market making will work if people understand what market making is and have the confidence in the process. It all comes down to confidence. To increase volume you need confidence- confidence in the market making itself, confidence in the companies, confidence in the market operators; that’s one key element.

    How do you see the introduction of derivatives and other hybrid instruments?

    I think the key is about understanding the market itself. Sometimes you can be ahead of the game. You really have to be sure about the timing and understanding that there will be demand for these products in the marketplace. If we provide this initiative, how are people going to use it? What will stop people from using it? But what will facilitate acceptance is understanding. Whatever you are doing, it’s important to get the audience to understand it very well using all available means of communication. Then, there has to be proper regulations in place.

    For an emerging market such as Nigeria’s, which one is preferable, government-owned or private-owned stock exchanges?

    My experience generally is that if a stock exchange is privately owned, you see more of commercial mindset; where things are done based on business needs, business requirements. Quite often, things are quicker and clearer. You know what they stand for, there are clear strategies led by goal-driven people and they achieve what they are going for. I see some of these in Nigeria. I see clear strategies; a lot of efforts going on. I think if the Nigerian economy has a bright future, the stock exchange will be a central part of it.

    Looking at the economy, what do you think are needed to firmly place it as a leading emerging economy?

    I think you are on the way there. There are tremendous foreign interests in Nigeria. But I think the key is to create the middle class in Nigeria. Foreign investments help in growing the economy but there are also things that must backflow into local investments by creating opportunities for Nigerian businesses to engage with international businesses and create real jobs in Nigeria. By this, you are sowing seeds, you are using this year’s harvest to plant next year’s, we need to find balance between international money coming in to generate profits in Nigeria and what will create jobs and investments in Nigeria. We need to find that balance between international and local trades and have money plough back into the Nigerian economy. You will notice that you will have more people engage in such process, it won’t be a drive for profit repatriation, you are certainly engaging a lot of local people in the growth.

    It’s all about getting a model that ensures Nigeria’s wealth is ploughed back from years to years, for generations to come. Then, there is the need to develop the ability to produce in Nigeria; take your own raw materials and produce your own goods. Not just exporting cotton to import textiles but turning cotton into textiles. If we have the production base in Nigeria, that will help transform the economy.

    Talking about your own firm, what are your short, medium to long-term objectives in Nigeria?

    It’s always educating going to a country for first time. That enables you to fine-tune your plan. We are very proud of what we are offering as a firm, but we haven’t proved ourselves to Nigeria yet. So, the early engagement is about getting to answer a lot of questions that may be in the minds of the people- can we trust you? Are you here for the long term? Our plan is to work very discreetly, very carefully with the financial and business communities to identify things that the financial and business communities will like to see in Nigeria; to work with them to identify training needs and then build around these. Our plan is to produce training catalogue that will be made available to the Nigerian business communities so that people can choose which offerings they want and how they want these delivered to them.

    Ultimately, I will want to see a training academy, a world-class centre of excellence, established in Lagos. But the first thing is; we have to make sure our understanding of the Nigerian market is correct. We have to get credible feedback from the Nigerian community that what we have is actually what they are interested in. That will assure us that we have the right product. I will need to make sure little by little we build trust. I have lived all my life in London, taking the decision to come and invest in Nigeria is not what we made lightly; it’s not been an easy decision. There are sure to be bumps on the way, but we believe this is within the vision of our company, which was set up to help people change things for better. It’s not going to be easy, we know that from the onset, so we have to make sure we get things right.

    Several people are worried about the dominance of foreign portfolios, which account for nearly three-quarters of trades in the Nigerian market. How do we balance this to achieve stable and steady market growth?

    As I mentioned earlier, if you generate more internal wealth, there will emerge a viable middle class. Then, you can encourage the people to invest in their own market. But people are not going to invest unless they trust the market structures-the regulators, the companies, the brokers. If all the basic things are in place, they will invest. They also have to see the benefits. So, it’s all about creating the disposable incomes and also about educating people on how things work. Why should I invest my money in the capital market? You must show people why they need to invest in the market. Companies need to go out there and reaffirm their credentials, how their businesses work, their books and their strategies.

    What advice do you have for the securities regulators?

    The stock exchange is a market; it’s a market where people come to buy and sell shares of companies. It’s pretty much like the high-street market where people come to buy and sell a number of things. In building a great stock exchange, it’s really key to keep that simplistic summary in mind. So, if it’s a place where people come to trade, what will make them to come and do trades? Having the right control, keeping a safe environment, being transparent and efficient and getting all the right things in place. Given all these, people will come. Efficient regulation is key. Nobody is going to talk about regulator when things are going well, when everybody is happy. But when things go wrong, the first reaction is usually about where the regulator was when things were going this way. Regulations help to protect orderly market to ensure that individuals and companies behave themselves. Often times, when things go wrong, the first reaction may be bring in more rules. Yes, you may need more rules but it may also be that the rules are fine but you need more enforcement or you need better understanding of them by the regulator or within the community or both. I think it’s important people understands their roles and also that the community understand what they are doing.

    In Nigeria, we have more retail investors investing directly in the market rather than through collective investment schemes like mutual funds. But in most advanced and emerging markets, you see mutual funds playing bigger roles. How do you see this?

    For me, I am not for or against that. I think both form key parts. They are all key market participants. Again, it comes down to understanding and education. If you want people to invest through mutual funds, you have to show them the benefits in them; people have got to show their credentials and returns. Just the same if you want more retail investors to participate in the market. You need both to build a strong market.