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Nigeria will soon be exporting cement to neighbouring states – Idris

By on September 24, 2013

Alhaji Shuaibu Idris is an erstwhile governorship aspirant in Kaduna State under the Peoples Democratic Party (PDP), Council member, Kaduna State University, former Deputy Managing Director and acting MD/CEO, Dangote Flour Mills, serving Board member Mainstreet Bank and Chairman, Advisory Board of Time-Line Consults Ltd. In this interview with   Business Editor, ANDY NSSIEN, the quintessential politician, banker, farmer, industrialist and philanthropist provides an in-depth insight into some major issues plaguing the economy.

What is Time-Line Consult all about?

Two like minds, myself and a good friend of mine still working in the banking industry saw the need  to set up a consultancy outfit that would basically  cater for the needs  of small and medium scale enterprises  on issues such as  feasibility studies,  business plans, etc and also sourcing of potential partners  to do business in Nigeria  from  outside the country as well as sourcing of market  outlets for  agric produce or what have you. It is easier for an average Nigerian enterprise.  We saw a challenge and we saw a gap needed to be filled, and what is that gap?  The wealthy and the mighty, the large and the big organisations can afford the fees of consultants such as Mckenzie, Accenture, KPMG, Delloite and the rest of them. Today, if every Nigerian organisation  has to sit down and say he or she has to go to such organisations, it may be a little impossible for  them to pay such fees. We saw that gap and said let’s set up an organisation that could fill that gap and be able to cater for the needs of micro, small and medium enterprises, be it on areas of tomato paste, be it on production, marketing, strategic partnership and alliance or IT as the case may be. That’s how Time-Line came into being and to God be the glory, we are celebrating 15 years of our live as consultants.

You donated a 30-room housing estate for staff of a secondary school in your community, how do you assess the housing problems in Nigeria?

It is difficult for me as a financial professional to claim the knowledge and every bit and piece of the Nigerian economy. But of course, I do have a working knowledge of virtually all arms of the economy. Indeed, for a developing country like Nigeria one of the major challenges of any developing economy is infrastructure. Also, shelter which is accommodation or housing. It is reputed that Nigeria has close to about 30 million houses in terms of gap which we should meet. Now, obviously for a country that up to last year was a net importer of cement at prohibitive cost, you can see why the housing gap continues to be increasing almost at geometric progression.

secondly, we also have a growing population.  Our demographic population is on the increase at an average of three per cent per annum. How much is the increase in the number of houses on annualised basis? It is neither in tandem with the increase in population nor is it higher to accommodate the gap.  So, by the year, every time the housing gap is increasing. You stated the obvious fact that I donated block of flats to house secondary school teachers in my community.  I would say, that is not targeted to address the housing needs of Nigerians. No that is not the idea. The whole idea is that I come from a very humble background, a village where getting a rented accommodation is a near impossibility.  Now, I was faced with two options.  There is a secondary school, there is a primary health centre and it is also a development area or a quasi local government which is a unit of administration in the village. There is also a police station, the court, and majority of these institutions are staffed by workers who are not from that locality.  Now if they come there, where would they live with their families should they choose to live with their families in that locality? . Another challenge was, if they post Youth Corps members there, there is no where for them to stay. And I said, one of the basic things to do is to either build house, a block of one bedroom apartment or even room and parlour to rent to this people coming into that community. And I said, notwithstanding my capitalistic inclination, I would rather contribute my token quota to the development of the society by building this block of houses and donating to the community so that staff of government posted to the area can comfortably live in decent houses, in spite of their being posted to the rural areas.

How is the present administration addressing the housing needs in the country?

I think, the government has done fairly well in that regards, but not directly per se. Government has taken two or  three major actions that I think are in the right direction to address the housing needs of Nigerians. One, the Federal Mortgage Bank has been reorganised, revamped and re-capitalised to be able to extend mortgage loans to those that need houses. This is by no means a small step in addressing the housing needs of Nigerians.

Two, following closely to that, the Central Bank of Nigeria has been working tirelessly to nurture the mortgage banks or the savings and loans associations, where in organisations  such as Union Homes, Aso Savings and Loans, and quite a number of other organisations are now coming in to lend to potential house owners. Nigerians who are working are able to take mortgage loans and repay after a certain time.  I think these are two key policy actions the government took and it could help in alleviating the housing needs of Nigerians.

Thirdly, and I think even more important, the efforts government has taken in nurturing the cement production plants in Nigeria and the incessant  demand by government that cement producers who were initially given licence to import certain quantities of cement were given a timeline within which to stop the importation and to produce cement locally. Three years ago, as I said, Nigeria was a net importer of cement, we were producing maybe  six million metric tones  or less per annum, but today Nigeria is producing close to about 25million metric tones of cement per annum. Our average national production annually was in the region of six million metric  tones, we were consuming 15 million, we had a gap of  nine million.  Today, with installed capacity, if fully operational, we could be said to be a net exporter of cement and indeed, very soon Nigeria will be supplying cement to neighbouring countries such as Togo, Niger, Ghana, to mention but a few. Without a reasonably government policy that entice investors to sink in billions of dollars to produce cement locally, maybe, there would not be those factories to produce cement locally. So indeed, I think  government has done fairly well along these lines so that the housing challenge could be addressed sooner or later.

However, there is still much to be done by government, for example, the price of cement is still very high. What is the cost of producing a 50kg bag of cement and what is the street market price? There is no correlation. Government needs to come in to teleguide where the prices should be. And unless we are able to address that, the solution to our housing problem might be a mirage. Today as we speak, the price of the 50kg bag of cement is cheaper in Lome, Togo and is cheaper in Ghana, Benin Republic than Nigeria.  These are issues which government needs to address so that the common man can indeed have an opportunity to own a house sooner rather than later.

What are major challenges facing manufactures in Nigeria?

The problems of manufacturers, no need to over-flock the issue are many, but chief among them is the issue of electricity generation, no enough power. Everybody talks about the electricity being not regular, not being sufficient, not being effective.

Another issue is that of manpower, human capital  development is a huge challenge.  The Nigerian universities have a huge challenge.  There is a huge gap from the employer’s perspective of what they require to recruit into their employment table from what the universities are producing. This is a complete disconnect.

Do you think the Federal Government has done enough to solve these problems and is there any light at the end of the tunnel?.

Well, I have told you before that, yes,  in terms of policy, they have done fairly well to attract an insist that cement importers must produce locally. If there is no light at the end of the tunnel, would we say that we have moved from cement importing country to cement exporting country? I don’t need to say that. I  also told you that there has been a policy in reorganising the Federal Mortgage Bank, recapitalising it, and of course, if you go to the airport today, you can see some level of transformation in the aviation sub-sector. If you are coming in, the ambiance is so good, so we can’t say that there is no light at the end of the tunnel, to say that will be economical with the truth. I think some developments are being done, we are Nigerians, we are impatient, we want  to see our country  become  United States of America or  United Kingdom overnight, today and not tomorrow and we don’t have the patience to wait. We are right to demand this, because we see our country is rich, and is economically buoyant for our politicians to perform magic. They have done the best they can, maybe their best is not good enough for us, this is a matter of perception and individuals have their own opinion.

You have a big farm in your community, what do you think are the challenges of farmers in Nigeria?

I told you when you asked questions  on challenges of manufacturers, it goes without saying the challenges in agriculture.

However, there are three main challenges associated with farming in Nigeria. First is the cost of input. Generally, if you go to  the United States of America, Austrialia, Canada, France, or any other parts of the world, agriculture is a subsidised business by government. But the mechanism of handling the subsidy is what differs from one country to another. Today in Nigeria, we subsidise fertiliser, but the fertiliser subsidy ends in the pockets of the few. The common man does not have it. Most of the countries that give subsidy do so in form of guaranteed price. A bag of rice can cost N2,500  to produce,  government can guarantee you a market at N3,000 to do that. So, head or tell, you never lose, as opposed to subsidising the inputs. And even if you want to subsidise the input, one of the best ways to subsidise the input is removal of customs duties, freight charges, taxation so that when it comes in, it is needless to add more charges to the product so that you can get it at a fairly cheap rate. Again following closely to that is funding.  Not withstanding the existence of the Bank of Agriculture and the intervention of the CBN to give Bank of Agriculture money to lend, farmers have serious challenge of getting funding. Even when the funds are available, it is a bit expensive.  When you get loans at two digits, double digits loan, 20 perb cent or higher it is practically impossible to be able to till the soil and accommodate the cost of financing. Following closely the cost of funds, is the issue of technology. Up till now we are still using mundane technology, cutlass, hoe, to till the soil for you to be able to grow, say cash crops or foodstuff.

Last but not the least is the perishable. Government did a lot in terms of having strategic grain reserves scattered all over the country to accommodate and store grains, such as maize, millet, sorghum or what have you during the boom season. But government has not addressed the challenges of say tomato producers. You know the season of tomato, you will pity the tomato producers because it can’t last longer than seven days, ten days. There is need for strategic processing plants that government can construct and give out on lease basis to potential companies that would want to man them. The same thing goes to other perishable items like mangoes, oranges, cashew nuts etc. During the season you see the enormous amount of it being  wasted  arising from the inability of the marketers or producers to be able to find outlets for the produce and at the end of the day, they lose their money. To these is added the challenge of transportation. I would give you an example. In my one thousand hectare farm in Kaduna, I produce a fruit called passion fruit. It is an exotic fruit, very expensive, a kilo can go as high as $50. But to transport it from my farm at Birnin Gwari to Ibadan, the cost of transporting was almost the same as the cost of the good itself. Imagine if there is a rail network that can go from Birnin Gwari to Ibadan at a  cost of one third of the cost of hiring a truck. I had to stop producing it because it was not making  sense.

What role can the regulator play to enable banks lend more to the real sector?

It is difficult for the regulators to insist or to direct banks to lend to a particular sector because we are running a market driven economy. What the regulator has been able to do of recent is incessant intervention. They have intervention in agric, textile, aviation- they came up with nearly N220billion intervention funds for medium, small and micro enterprises. Those are ways and means the regulator has been able to direct  credit to the real sector. But to insist that for example, XYZ bank must lend money to sugar manufacturing sector?  No, it can’t do that because it would be abnormal to do that in a market driven economy. But for the intervention of the CBN  which is appreciated, the situation would have been different. Maybe, but for the intervention of the CBN in the aviation sector with N70 billion to the aviation industry, maybe we would not have had the airlines that are operating in Nigeria today.  Without intervention in textiles industry, probably some of the few textiles industries operating in the country would have long closed down. The interventions have indeed saved jobs and the real economy in no small measure.  But we are no  where near there.   The reason why intervention is helping is because it comes with some level of subsidy on imports. Instead of the market determined interest rate of 24 to 25 per cent, intervention funds come with 9 – 10 per cent which is 50 per cent of what  the market  charges. The regulator and indeed the government has done  reasonably well in  helping the real sector to still maintain the few employment opportunities that they are able to provide. But they can do more and they should do more subject to the availability of funds. Imagine if instead of N70 billion, they had N700 billion intervention fund for aviation, maybe, the much talked about Nigeria being the aviation hub would have materialised by now.

 

 

[Daily Independent]