MANUEL: Our Economic Focus Should Shift To Solid Minerals, SMEs

Mr. Ibifiri Bob Manuel is president of the Rivers Entrepreneurs and Investors’ Forum. He told KELVIN EBIRI that the crash in oil price makes it imperative for President Muhammadu Buhari’s administration to articulate an economic blueprint with the intent to diversify with prime focus on SMEs, the solid mineral sector, manufacturing and agriculture.

Does the slump in global oil price make it imperative for Nigeria to diversify its economy?
IT is imperative, because crude oil and the revenue it generates for the country has taken a nosedive, so, the only smart thing for any right thinking government is to think of how to diversify its economy. The direction we are taking is crashing, and whenever a ship is crashing, you jump overboard. If you are in a flight, you look for a parachute. The golden parachute is in the diversification of our economy. And what direction we want that golden parachute to take should ordinarily be the next and most important question for our policy makers. They need to change their focus from where it is, to other areas that had been viable in the past.

In the past, Nigeria spent a lot of time on agriculture and it was doing well and agriculture is one currency that will never fail you. We should begin to see how we could get the agricultural sector to work well, and most importantly, the Small and Medium scale businesses (SMEs). We need to see how we can grow the SMEs businesses very consciously and also, how to put up conscious policies that engender the growth of that sector.

The past administration came up with the You-Win product, which I felt was well thought out, but not well implemented. There was a lacuna in the implementation, as they did not follow it through. In that same administration, we wrote to the Central Bank telling them of why they need to consciously fund the SMEs businesses. Those small and medium industries that needed funding were always vulnerable to the banking public. The banking public don’t look out for the small and medium scale, because they feel they don’t have the right collateral to access loans in the banks; they don’t provide the kind of risk that the banks are looking out for. To the banks, big risk equates big collateral and big profits. That is what they are looking at. But the SMEs don’t give them that opportunity. The banks just forget about that part of the economy that is the engine room and look out for those simple fast means of making the money.

The Central Bank came up with N220billion product, which was called the SME fund. That fund was directed to the SMEs, to see how they could use that to stimulate and grow that sector, but unfortunately, it was rather given out to governors. They cannot stimulate SMEs through the governors and that is what they did, and that is why that particular project failed, because they turned it out to begin to look as if it was meant to coerce governors to come to their fold. I think the Central Bank needs to go back and begin to look at all of these ingredients, which are organic.

They need to get a way to fund the SMEs. They should set up mechanism that will monitor the growth of those SMEs. In all the statistics that are available, the SMEs loans that you give out tend to proffer you with more than 90 per cent returns of those loans. So it is a win-win situation. We cannot afford to do a quick fix, we have to start up an organic product that will work through the system and grow the economy of the country.

If the Federal Government has its interest in developing the solid minerals, each of them is capable to take care of our needs. You simply need to come up with proper policies. You go to countries such as, South Africa and many others, and you discover they merely depend on one small item. For instance, in Ghana, the industry centred on gold has been able to develop in such a way that it generates real income. Talk about bitumen, we have a whole lot of bitumen. I was fortunate to go for a seminar where I was embarrassed by the kind of questions they asked me about our bitumen and what we intend to do with it. We have so much bitumen that we don’t seem to understand how important and blessed we are. In Rivers State, you have a whole lot of clay. We are richly blessed with clay.

Do you consider the development of the solid mineral sector key to diversify the economy?
We ordinarily should be in a hurry to think of how we are going to develop the solid mineral sector, because there is no point where we have to put all our focus on oil, when we have so many other areas we should develop. I think the earlier we began to think of how we could holistically develop those solid minerals, the better. It will help us, because those solid minerals portend a lot of growth areas, which we have not looked at. Solid minerals are scattered in the North, the East and the South of this country. I hope the new minister should develop this sector. We have gold, bitumen and virtually everything.

If the Federal Government has its interest in developing the solid minerals, each of them is capable to take care of our needs. You simply need to come up with proper policies. You go to countries such as, South Africa and many others, and you discover they merely depend on one small item. For instance, in Ghana, the industry centred on gold has been able to develop in such a way that it generates real income. Talk about bitumen, we have a whole lot of bitumen. I was fortunate to go for a seminar where I was embarrassed by the kind of questions they asked me about our bitumen and what we intend to do with it. We have so much bitumen that we don’t seem to understand how important and blessed we are. In Rivers State, you have a whole lot of clay. We are richly blessed with clay.

What should be done to boost the industrial sector?
They need to set up industrial clusters to encourage start-ups. When you begin to encourage the SMEs you will begin to grow your economy and on the path of industrialisation. The National Assembly will have to come out with a proper economic blueprint that will encourage the growth of commerce and manufacturing, because in one breath, talk about setting up policies to grow industries, you are coming up with another policy checkmating the growth of the industries.

The government should be able to come up with a blueprint on how it intends to grow the economy, and that is, what we, as industry watchers, are looking at from government to know what they want to do. The economy is in a state of comatose and this makes diversification imperative.

The last government came up with an auto policy, but this government needs to come good by saying this auto policy we are going to follow up on this policy or we are not going to follow it for XYZ reasons. So that will inform the manufacturers that are intending to set up auto plants. But as you could see now, they have not made any pronouncement towards that direction. So, the people that would have procured land or loan to set up auto plant in the country have gone cold. We are waiting for the government to come up with a policy, as it will give us a direction. Businesses, basically, waits for direction so that when it comes they don’t fall prey to the laws of the land.

You cannot wake up one night and you say you want to shut your doors and you want to start producing internally. You still need raw materials to come in to be able to assist you to produce internally. But at the same time, you say you want to shut your doors, because you want to produce internally when you don’t have the raw materials and technology, so how do you do all of that?