Monday, November 18, 2013

Alhaji Remi Bello: Our products ’ll become competitive with stable power – Remi Bello, MD, Critall Hope Nigeria Ltd

Doing business in Nigeria, for those in the real sector of the
economy, is a herculean task. The challenges, according to Alhaji Remi
Bello, Managing Director, Critall Hope Nigeria Limited, are
multifarious and range from multiple taxation duplicity government
agencies; power problem, influx of substandard products, challenge of
business credit as well as manpower deficit. Bello, who is also the
Deputy President of the Lagos Chamber of Commerce and Industry (LCCI),
as well as President of Jericho Businessmen Club, could not hide his
feelings that Nigerian university system could be part of the headache
of the manufacturing sector as the graduates being produced by them
leave much to be desired.
For a man, who steers the affairs of a company that pioneered the
aluminium and steel products in the country in 1958, Nigeria is still
a hub for a genuine businesses to thrive despite all her challenges.
The LCCI boss, however, said that the success of the sector was
predicated upon the government creating an enabling environment for
the local investors, who he insisted could compete favourably with
foreign counterparts, if given the chance.
He speaks more on other issues affecting the sector. Excerpts:
It's been very challenging. The challenges have always been
multi-dimensional. We have the challenge of energy, which is now well
known to everybody. But I believe if it's well handled we would turn
things around. We have the challenges of funding, credit management,
getting funds from banks for the real sector. It's not easy getting
funds from banks especially with the latest policy on the 50 per cent
Cash Reserve Ratio (CRR) introduced by the CBN. But before then, we've
always been having challenges of credit from banks, especially those
of us in the manufacturing sector and this has its ripple effects on
This is not unconnected with the high cost of operation. But in
addition to funding crisis, we have mulitple taxes from related
agencies: We have the Standards Organisation of Nigeria (SON) and the
National Agency for Food Drug Administration and Control (NAFDAC) and
all these affect my own business lately. As a manufacturing company,
one has to deal with SON, and those agencies in the maritime sector
when you want to import each time one is importing from any country.
And without a certificate from the MANCARP, you need a waiver from
SON, so one would have to pay, though not a fixed sum. But if one is a
member of associations like LCCI, Manufacturing Association of Nigeria
(MAN), you would pay nothing less than N50,000 just to get a waiver,
for getting SONCAP waiving certificate.
The big question then is, what's the N50,000 being paid for? Is it for
the issuance of the paper or what value have they given that I should
pay the N50,000. This is a challenge. It is a kind of big task we are
facing. So also we have the challenge of infiltration from the Chinese
market and the issue of fake products, especially in the aluminium
line. The quality of aluminium brought into the country is
outrageously low, even though the unsuspecting public would not know
the difference.
It is a well known fact that the metal is sold by weight world over.
It is the content of the aluminium that determines the price of the
aluminium products. Gold, likewise, is sold in weight. But the fake
importers would sell hollow pipe to the unsuspecting consumers and
before you know it, it would start deteriorating.
These are some of the challenges we are facing and again we have that
of manpower and labour. Yes, we have men on ground, but the kind of
people being produced by our universities leaves much to be desired. A
situation where accountant will be thinking for an engineer is not
good enough. That is a great challenge we face in the manufacturing
Filling the gap
There is this great shortage of skilled artisans and technicians, that
our technical colleges are not producing again. Today everybody wants
to go to university. But Critall Hope has an agreement with Industrial
Training Fund (ITF) and Yaba Training Centre, where we send our
apprentices to have two days theoretical experience weekly and three
days of the week in our factory, all leading to certificate. Whatever
we spent, ITF would subsidise or reinburse us with 50 per cent of the
training cost. At the end of the programme, the trainees would be
given certificates which would be well recognised. That is how we have
been able to overcome some of these problems.
Expatriate quota
It is one problem that Lagos Chamber of Commerce has been trying to
address in recent past whereby some companies would bring in all
manners of staff under the expatriate quota. Some would even go into
the open market, not to buy but to engage in retail sales that are
meant for the local. This, we have been drawing the attention of the
immigration authorities to because that it is something that should be
addressed to protect the indigenous interest. Before you know it, they
would overrun the economy, hence it is a real problem that should be
addressed. Unfortunately, I am not sure if government is doing much
about it.
LCCI efforts
As far as I am concerned, the best LCCI can do, apart from carrying
placards, is to continue to advocate. We can't carry placards. So the
best we can do is to make our position known through quarterly press
briefing of the president, as well as when we have the opportunity of
hosting government agencies where we can equally express our views
about the matter. But on this one, I am not sure if much is being done
for now, the reason being that the economy is said to be open with our
involvement in WTO, we need to open our border. Those are the things
hampering effective combat of this issue.
Sub-standard products
It's one of the challenges we are facing, but it shouldn't have been
much of a challenge if we had got an enabling enviroment. There is a
limit to which we can continue to be protective, but we should have an
enabling environment. The world at large is becoming global and
smaller by the day. If a company fails to be effective because of
government protection, the internet can offer a better alternative.
But if the environment is right with effective power, companies here
can become competitive.
If Nigerian companies are competitive, we would not be against any
products coming in from abroad. Let them bring the products!
Experience has shown that local products are always better that those
imported products. We have seen it in the electricity industry, where
Nigeria cable is seen to be better than the imported cable, that is an
example of what can be achieved locally. The same thing in our metal
A consumer can always seek redress if there are problems with the
products bought in the recognised companies. For example, my company
has been around since 1958. We see people that have bought our
products 20 years ago still coming back. But if it has been imported
products by a trader, the moment the trader finished selling and
discover he does not make much profit, he would move to other
products. But this is a business we have invested so much in, the
entry is so difficult, you can't just vacate it that way.
What I am saying is that let there be an enabling environment,
definitely the infiltration will fizzle out on its own when there is
no patronage. If we are competitive in terms of price, the quality
will always be there because the products we are talking about are
inferior, they are not good products. That is what we are saying, but
we are not able to compete because we are standing at a disadvantaged
position. There are some costs that have nothing to do with our
operation that now have to be borne by us.
Think of all manners of levies and taxes that have nothing to do with
our operations. If we don't have to bear all these, we would be
standing at a vantage position. Whereas those imported products are
being brought in with laundered money, drug money, if it's a real
money like our own kind of money, I think with what government is
doing with regards to money laundering internationally, interpol and
the likes, I think there is a kind of reduction. What we are seeing is
genuine infiltration that can fizzle out by good enabling environment
for the locals. If we have good enabling environment, with power,
labour and security well attended to, our companies will be in better
position to fight all these infiltrations.
Foreign products influx
When we talk about losses, we should be talking of it as a nation, not
as individual or a sector. We can know the level of loss through the
level of our performance. Nigeria is supposed to be a rich country
with the abundant resources we have and the oil money we are making.
But the oil money is not giving us the kind of value it is supposed to
deliver. As a nation, unless and until we are able to get these things
right, the loss is unquantifiable. It's so huge. It's not something we
can say N1billion, N2billion, but it can be seen in the level of
poverty in the economy.
Over-reliance on oil
Any wasting asset is not a thing any nation should break her heart
over. Oil is a wasting asset. What we have been given that is a
natural endowment is our land. Agriculture, solid mineral resources
and our manpower.
Those three brought together, we can never run out of nature. The only
unfortunate thing is the way we've been talking of diversification
into agriculture with all manners of programme but with little to show
for it. That is where the challenge is, and we all realised it, we all
know that the economy should be diversified and Ministry of
Agriculture has been talking about this. The way out is our
agriculture and solid minerals combined. What I should expect is that
the money we are making from oil should be re-invested into
I always wonder what we are doing with such expanse of land we have in
areas like Lagos-Ibadan expressway and other parts of Nigeria. Is it
because there are no people to do it or we don't believe in it or
we've gotten so much land that we don't need all those? We keep on
talking about diversification, even if those lands should belong to
individuals, what stops the government from leasing the lands for
agriculture and return it to the owner whenever the owners want it
back. But I don't think there is anything like that. Under the Land
Use Act, the land belongs to the government and so far there has been
too much of talking with little action.

No comments:

Post a Comment