INNOSONKEEPING NIGERIA MOVING

ADIRE PAYS

NEW BOARD. NEW MD. SAME MANDATE

AN ENTREPRENEUR TO WATCH

P E O P L E P E R F O R M A N C E P O S S I B I L I T I E S

IMPACTBOI

V O L U M E 1 N O 1 S E P T E M B E R 2 0 1 4

21 Q&A WHAT WE NEED TO DO TO GET TO WHERE WE WANT TO Interview with BOI Chairman Alhaji Abdulsamad Rabiu

28 Q&A GIVING BACK. CREATING JOBS. BAKING BIGGER CAKES. Interview with BOI MD Mr. Rasheed Olaoluwa

35 FOCUS UNCOMMON ENTREPRENEURSHIP Ocheni Simon, a rising star

37 INSIGHT DOING IT LIKE CHINA

R E G U L A R S

3 ROUND-UP

39 LOOK

Editor Hadiza Olaosebikan

Editorial Adviser Kola AdewoleEDITORIALGbenga OyesanyaSolomon TommyAyo Oluwatuyi

Toyin OyekanmiADMINISTRATIONKehinde Alade

LEGALAbdullahi Sadat

cont

ents

8 LEAD THE INNOSON TESTAMENTThe story of Chief Innocent Chukwuma’s quest to keep Nigeria moving through the manufacture of vehicles, motorcycles, plastics and other products at Nnewi and Enugu14 SPECIAL REPORT ADIRE MARKET TRADE SECRETS (JUST A FEW) An insight into how the tie and dye industry works and how BOI helps

18 Q&A WHERE THE JOBS ARE Interview with Dr. Olusegun Aganga, Minister for Trade, Industry and Investment

ForewordBY THE MD/CEO

Orchestrating Development Impact at BOI

A very warm welcome to this in-augural issue of the BOI Impact magazine.

We have begun a journey towards transforming the Bank of Industry into a world-class Development Finance Institution and the most impactful in Africa.

As you are aware, BOI’s mandate is crucial to the success of the various government policies aimed at revamping and transforming the Nigerian economy. The Nigeria Industrial Revolution Plan (NIRP) and the National Enterprise Development Programme (NEDEP), were launched early 2014 by President Goodluck Ebele Jonathan, GCFR, as integral parts of the Federal Government’s Transformation

Agenda. Under these plans, BOI has been assigned very important roles with respect to the provision of the required development finance.

In cognisance of this huge responsibility, we are re-focusing on our core mandate of providing low-cost, medium-to-long term finance to large industrial projects as well as to small and medium industries. For instance, we recently launched the N5.0 billion Cottage Agro Processing (CAP) Fund to address the post-harvest agricultural value chain. By so doing, we are supporting the real sector in wealth creation and reducing unemployment in Nigeria.

We are also adopting global best practices for the management of development banks, and to this end, we have initiated a number of projects designed to improve the efficiency and effectiveness of our operations and processes. We expect our improved practices to result in significant cost savings and better service delivery to our customers.

BOI Impact seeks to orchestrate BOI’s efforts, activities and results in our ongoing quest for developmental impact and global best practices. In this issue the Honourable Minister of Industry, Trade

and Investment, Dr. Olusegun Aganga and the Chairman, Board of Directors of BOI, Alh. Abdulsamad Rabiu, share some very interesting perspectives on Nigeria’s development agenda and the role of BOI. We also highlight the activities and achievements of some of our exemplary customers. It is our hope that these stories will inspire millions of other Nigerian businesses and entrepreneurs.

My colleagues and I are working extra hard (and smart too!) to deliver result in terms of better practices and greater developmental impact. I commend their efforts and urge them to sustain the current tempo, as it is in our national interest to achieve the set goals and objectives.

We have printed limited hard copies of this issue, consistent with our objective of making the publication 100% online by the third issue. For now, the online edition is available at www.boinigeria.com/Impact

I invite you all to please sit back, relax and enjoy BOI Impact.

Warm regards

Rasheed OlaoluwaManaging Director and

Chief Executive Officer

2 | BOI IMPACT

TO BE THE CATALYST Catalyst (noun): a person or thing that pre-cipitates an event or change

That’s what the new Board of

Directors of the Bank of Industry

(BOI) has been charged to

become; in respect of funding

of Medium, Small and Micro Enterprises

(MSMEs) in Nigeria. The charge came

from the Minister of Industry, Trade and

Investment, Dr Olusegun Aganga, at

the inauguration of the Board, in Abuja.

It’s indeed the Board’s first priority as IT

has been asked to achieve this within a

“reasonable timeframe.”

Aganga described the MSMEs, with

a workforce of over 35 million, as a

group the Federal Government could

not ignore. He stressed that an upward

review of the bank’s loan portfolio

could not be over-emphasised in view of

the multiplier effects of MSMEs on the

nation’s industrial base, employment

generation’s drive and its potential

contribution to the GDP.

“I would like to use this occasion to

remind BOI that the future of MSMEs

rests squarely on how responsible you

are to their funding needs. The current

arrangement where less than 15%

loanable funds is being set aside for

MSMEs’ need is unacceptable and must

be reviewed upwards having regard to

the potential of the sector to create jobs

and generate wealth.

“The practice in China and Indonesia

where significant portion of loanable

funds in most cases without collateral

is extended to MSMEs with close to

97% repayment rate should encourage

you to emulate and do even more for

Nigeria’s MSMEs,” he said. (See: “Doing

it like China,” p37)

He added that on its part, the Federal

Government is already repositioning the

ministry as a major driver of President

Goodluck Jonathan’s Transformation

Agenda through the full implementation

of the National Industrial Revolution

Plan, NIRP and the National Enterprise

Development Programme, NEDEP, both

recently launched by the President.

He urged the Board to actively

support the NIRP and NEDEP to stimulate

the Federal Government’s quest for rapid

industrial development in the country,

and the bank’s mission of wealth

creation and employment generation.

Just to let the Board knows that he

takes this seriously, the minister told

them:

“I expect your board to forward to

me quarterly progress reports showing

performance in the quarter and year

to date with details of analysis of loan

book by gender, by sector, impact on

NIRP and NEDEP, jobs created, and

contribution to national development.”

The Minister reiterated that the bank’s

mission is to transform Nigeria’s industrial

sector, integrate it into the global economy

and provide financial and business support

services to existing and new industries to

enable them attain modern capabilities to

continued on page 6

From left: Minister of Trade, Industry and Investment, Dr Olusegun Aganga; Chairman Bank of Industry, Alhaji Abdulsamad Rabiu; and the new Managing Director/Chief Exec-utive Officer, Bank of Industry, Mr Rasheed Olaoluwa, at the inauguration of the 4th Board of the Bank of Industry

BOI IMPACT | 3

Meet the Board• Alhaji Abdulsamad Rabiu CON is the Chairman/CEO of the BUA Group of Companies, and two-time Chairman of the Bank of Industry’s Board of Directors. He was Chairman of BOI’s third Board of Directors up till 2011. Over a period of 25 years he has grown BUA Group into a world-class conglomerate with interests in manufacturing (sugar, cement, flour and oil mills), ports and terminals as well as real estate. He was recently ranked by the influential international Forbes Magazine, as one of Africa’s billionaires. Alhaji Abdulsamad sits on the Boards of several companies. In the past, he served as the Chairman of the Board of the defunct Tropical Commercial Bank Ltd from 1993-1999 and was a member of the board of Transcorp Hilton Plc. He currently sits as the Chairman, Board of Directors, Cement Company of Northern Nigeria Plc. Alhaji Rabiu has won many prestigious awards, both locally and internationally, as a testimony to his hard work, leadership, excellent business acumen and indefatigable entrepreneurial spirit. He studied economics at Capital University, U.S.A and holds an honorary

doctorate degree from the Crescent University, Abeokuta, Ogun State, Nigeria. He was also awarded with the Nigerian national honour of Commander of the Order of the Niger (CON) by the Federal Government in 2012. He is happily married and has children.• Mr. Rasheed Adejare Olaoluwa has over 26 years experience in banking and financial services sector, playing senior and executive level roles in Commercial and Investment Banking, Treasury Management, Financial Control and Strategic Management gained at reputable institutions such as KPMG, GTBank, Ecobank and UBA.

He was the pioneer Group CEO of UBA Capital Plc, a leading financial investment services company. Prior to this, he was an Executive Director at the United Bank for Africa (UBA) Plc, where he led the largest strategic business directorate in the Banking Group. He was also the pioneer CEO of UBA Africa from 2007 to 2011, during which time he extended UBA’s operations into 18 countries in Sub-Saharan Africa.

round-up

Standing from L-R: Waheed Olagunju, ED (Small and Medium Enterprises); Kenneth Effa, ED (Corporate Services); *Ahmad Abdullahi, former Director (representing Central Bank of Nigeria); Mohammed Alkali, Executive Director (Large Enterprises); Omoniyi Ezekiel Fagbemi, Director (representing Ministry of Finance Incorporated, MOFI). Sitting from L-R: Uju Aisha Hassan Baba, OON, Director (representing Min. of Industry, Trade and Investment); Rasheed Olaoluwa, Managing Director/Chief Executive Officer; Abdulsamad Rabiu, Chairman, Board of Directors; Lawrence Osayemi, Director (representing Manufacturers Association of Nigeria, MAN). *Olufemi Fabamwo (not in picture), now represents Central Bank of Nigeria on the Board

4 | BOI IMPACT

round-up

He holds a first class honours degree in civil engineering, an Associate Membership of the Institute of Chartered Accountants of Nigeria (ICAN) and an Executive MBA from International Graduate School of Management (IESE), Spain.• Mr. Waheed A. Olagunju who joined the Bank of Industry’s precursor institution, the Nigerian Industrial Development Bank (NIDB) in 1990, was appointed Bank of Industry’s Executive Director (Business Development) in 2012. Over the past 24 years, he has served as Company Secretary of NIDB/BOI for more than 15 years between 1997 and 2012 in addition to being General Manager, Strategic Planning, Corporate Secretariat and Corporate Communications of BOI between 2007 and 2012. He was recently made the Executive Director (Small and Medium Enterprises) following the reorganisation of the Bank in 2014. Mr Olagunju bagged his first and second degrees in 1981 and 1984 respectively from the University of Lagos and holds a professional certificate in Investment Appraisal and Risk Analysis from the Queen’s University, Canada. • Mr. Mohammed G. Alkali holds a first-class Bachelors Degree in accounting from Bayero University Kano (1983) and a Masters Degree in economics from the London School of Economics (1986). He started his working career in 1983 as a lecturer with the University of Maiduguri and joined the banking industry in 1988. During the span of 25 years in banking, he has garnered composite experience that cuts across commercial, investment and development finance. Prior to his appointment as Executive Director, Operations at the Bank of Industry in 2010, he served as BOI’s General Manager, Large Enterprises (2002 to 2005) and General Manager, Small and Medium Enterprises (2005 to 2010). Following the restructuring of the bank in 2014, he was re-designated Executive Director, Large Enterprises. Alkali is also an alumnus of Harvard University, the University of Chicago, the Stanford University and the Columbia University, amongst others• Mr. Kenneth N. Effa who bagged a Bachelors degree in economics from the University of Maiduguri in 1980 is a fellow of the Institute of Industrialists and Corporate Administrators (IICA) and the Chartered Institute of Management Accountants (CIMA). He had spent 30 years in the Central Bank of Nigeria, where he rose to the position of Assistant Director and was appointed Executive Director representing the CBN on BOI’s Board in January, 2014. • Mr. Omoniyi Ezekiel Fagbemi (FCA, mni) is a 1988 accountancy graduate from the Obafemi Awolowo University, Ile-Ife. He has an MBA from the same university in 2000, and is a member of the National Institute for Policy and Strategic Studies, Kuru having completed the Senior Executive Course 35 in 2013. He has 25 years working in both the private and

public sectors, starting as an Internal Auditor at a private firm to becoming the Director, Revenue and Investment, Office of the Accountant-General of the Federation. He has also served as an Assistant Director, Deputy Director, and Director in the Federal Ministry of Health, the Office of the Secretary to the Government of the Federation, and the Office of the Accountant General of the Federation. He is a fellow of the Institute of Chartered Accountants of Nigeria (ICAN), the Chartered Institute of Taxation in Nigeria (CITN), and the Nigerian Institute of Management (NIM).• Mrs. Uju Aisha Hassan Baba, OON has more than 30 years’ post-bar experience in Nigeria’s legal system. She was one-time Attorney-General of Anambra State, Director General Legal Aid Council of Nigeria and current Director of Legal Services, Federal Ministry of Industry, Trade and Investment. She is a Law graduate of University of Nigeria, Nsukka and attended the International Law Institute, Washington D.C, as well as the University of London where she bagged a certificate in Legislative Drafting. She is a member of the Nigerian Bar Association and has served on various committees. She is also an Officer of the Order of the Niger (OON).• Mr. Olufemi Adeoye Fabamwo holds a Master of Business Administration (MBA) from the University of Lagos. He has worked with the Central Bank of Nigeria since 1982, rising from Senior Supervisor, Development Finance, to Director, Other Financial Institutions. He has served on the boards of several FG establishments, including the Nigeria Export-Import Bank (NEXIM) and the National Insurance Commission (NAICOM). He is an associate member of the Chartered Institute of Bankers (CIB) UK, a member of the British Institute of Management, and a fellow of the Chartered Institute of Bankers of Nigeria (CIBN).• Chief Lawrence Ayinde Olakunle Osayemi who is the National Treasurer of the Manufacturers Association of Nigeria (MAN) represents the Association on BOI’s Board of Directors. He is an alumnus of the London Business School, the Harvard Business School, and was one-time Managing Director of Thomas Wyatt Nigeria Plc. Chief Osayemi, who is a lawyer and also a fellow of the Institute of Chartered Accountants of Nigeria (ICAN), also holds a Bachelor’s degree in Economics and was a member of the Steering Committee for Vision 20:2020. He was also the Pro-Chancellor of the Federal University of Agriculture, Abeokuta and was awarded a Member of the Order of the Niger (MON) by the Federal Government based on his contributions in the Organised Private Sector.

BOI IMPACT | 5

round-up

produce goods that are competitive in both

domestic and external markets.

Speaking for himself as the Board Chair-

man as well as his members, Alhaji Abdul-

samad Rabiu, who is also Chairman/CEO

of BUA Group of Companies, expressed his

appreciation to the president for imposing

confidence in them. He equally commended

the minister for the people-oriented policies

and programmes he has set for the econom-

ic development of the country.

BOI’s Managing Director/CEO, Mr. Rash-

eed Adejare Olaoluwa, affirmed that that

the management would work hand-in-hand

with the board with a view to strengthening

the bank’s operations for global competi-

tiveness and to be at par with some of the

world’s leading development finance insti-

tutions.

Olaoluwa noted that he would work

closely with other relevant stakeholders

towards addressing the non-financial issues

facing the manufacturing sector and MSMEs.

“Urgent steps,” he added, “would have to be

taken to improve on BOI’s service delivery to

enable it meet the unemployment challeng-

es facing the country especially in the areas

of wealth and job creation.”

BOOST FOR AGRIC

The Bank of Industry (BOI) believes with the Federal

Government of Nigeria that agribusiness can change

the nation’s fortunes. Therefore, the bank is committed

to helping move Nigerians from farming to small-scale

enterprises, food processing and industrialised agriculture.

BOI’s Managing Director/Chief Executive, Rasheed

Olaoluwa revealed this plan to members of the Senate

Committee on Investment who were on an oversight visit to

the Bank’s Corporate Headquarters in Lagos. It’s simply keying

into the government’s Industrial Revolution Plan as well as

the National Enterprises Development Programme. Thus, the

bank would be creating job opportunities in the agricultural

sector. Its success in the Solid Minerals sector –where the

bank has been focussing on the identified commercially-

viable 44 solid minerals deposits available in the country – will

serve as template. Olaoluwa said the bank has entered into

partnerships with many microfinance banks, which are very

close to the grassroots and communities.

The Chairperson, Senate Committee on Industry, Senator

Nenadi Usman, assured the MD/CEO of the Senate’s partnership

because “we believe that the Bank is one of the strongest

agencies that the government has been using to ensure that

the industrial sector in Nigeria is being properly positioned to

absorb the nation’s manpower,” adding, “I believe that if small,

medium and even large scale industries are assisted in Nigeria,

we would have most of these people who have no work today,

fully employed.” It’s a win-win situation for everyone: the bank,

the Government, the unemployed.

CATALYSTcontinued from page 3

L-R: ED (Corporate Services and Commercial), BOI, Mr Kenneth Effa; Sen. Chris Ngige; Managing Director/CEO, BOI, Mr Rasheed Olaoluwa; Sen. Nenadi Usman, Committee Chair; Sen. Ahmad Maccido; Sen. Ahman Zannah; Sen Ibrahim Musa; Sen. Gbenga Obadara and Mr Niyi Olorishade, Committee Secretary

6 | BOI IMPACT

In his younger days, Chief (Dr) Innocent Ifediaso Chukwuma, OFR, took to the moniker, Innoson, with glee. So much so that when the time came to incorporate his first business, no other name clicked. Innoson Nigeria Limited (INL) Nnewi, registered with

the Corporate Affairs Commission in 1981 to trade in tyres and motorcycle spare parts, has now grown into the conglomerate, Innoson Group (www.innoson-group.com), not only manufacturing motorcyles but also plastics - Innoson Technical and Industrial Company Limited (ITIC) Enugu; motor vehicles – Innoson Vehicle Manufacturing Company Limited (IVM) Nnewi; and tyres – General Tyres and Tubes Company Limited (GTT) Enugu. With its total workforce of 7,200, the group has a projected turnover of more than N50b per annum.

“I was into buying and selling

like everyone else,” the Nnewi-born

gentleman explained to BOI Impact in

his spaciously appointed office at ITIC

along the Enugu-Abakaliki Expressway.

The ambulatory schedule occasioned by

the growth of his business has him on

occasion shuttling to meet contingencies

in his other offices in Nnewi, Abuja and

Accra in Ghana when he is not travelling

abroad.

“My senior brother apprenticed me

to our townsman Pius Emeka Maduka,

elder brother to Cosmas Maduka

of Coscharis, under whom I learnt

the buying and selling of tyres and

motorcycle spare parts at the Nkwo

Nnewi Market.

“At the end of the apprenticeship

I started on my own; buying from

importers and selling to the final

consumers. In fact, I was doing so well

that my brother left his original business

to join me. When I was ready to start on

my own, my brother settled me as was

the practice and I registered my own

company.

“In no time we started importing

and selling to wholesalers as well. From

1984, we started importing motorcycles

THE INNOSON

TESTAMENT

lead

8 | BOI IMPACT

whole. Then we moved into bringing

the motorcycles completely knocked

down and assembling them there in

Nnewi. From very slow beginnings

our sales volume rose to over 600,000

units per annum following which some

Chinese companies granted us sole

distributorship of their brands.”

In this meteoric rise, Chukwuma is

however quick to remind you that it took

a proper look at the field to convince

him – and in good time too – that

manufacturing was not just the way out

but the only way forward. Thus, while his

competitors wallowed in the success of

their trading exploits, he had his eyes set

ahead.

We did the local assembling by

ourselves for about 10 years before

entering into an agreement with

Chongquing North Jianshe Import and

Export Company Limited, a Chinese

motorcycle manufacturer to establish a

manual plant in Nnewi where top quality

motor cycles were produced. When this

did not make for enough production

volume to achieve agreeable economies

of scale, the next year we installed a

fully automated assembly line making

us the first fully indigenous motorcycle

manufacturers in Nigeria.”

Eventually, it was this determined

drive for comparatively low prices and

transfer of production technology that

pushed him into plastic production.

“Following our production of

motorcycles, we discovered that most

of the parts of the motorcycle apart

from the tank, frame, exhaust pipe and

engine were all made of plastic – the

fenders, tail, headlight casing, front and

rear bumpers, side covers and even the

very helmet worn for protection, name

them.”

Apart from the motorcycle parts, ITIC

– arguably the biggest plastic industry in

Nigeria – was incorporated in 2002 with

technical support from Cretec Industries

Company Ltd Hangzhou, China. It is

capable of producing injection, blowing

and rotational moulds; metre boxes and

accessories; melamine tableware, roof

ceiling and foam products. Courtesy of

upgraded production lines featuring

state-of-the-art injection moulds, it has

the capacity to produce 10,000 plastic

seats per day at full tilt.

With expertise acquired in the terrain

of motorcycles, and with his mind

set on “keeping the nation moving,”

Chukwuma ventured into the automotive

industry. IVM, also the first indigenous

motor manufacturing industry in Nigeria,

produces cars and commercial vehicles,

making use of substantial local content –

70 per cent, for now. Built in conjunction

with a consortium of Chinese

automakers, it now produces intra- and

inter-city buses with various seating

capacities, Sports Utility Vehicles (SUVs),

trucks, pick-up vans, refuse collectors/

compactors and tricycles.

Officially commissioning the factory

on 15 October, 2010, President Goodluck

Jonathan commended Chukwuma’s

resilient spirit, crediting it to the fact that

though Anambra was one of the smallest

states in the country by land mass, its

people have “high brain density.”

Nonetheless, there is a commendable

motive. “When we ventured into the

production of motorcycles we were

able to make brand-new motorcycles

affordable to needful Nigerians who

hitherto patronised the tokunbo

(used) ones. Nothing can stop us from

replicating it in the automotive industry.”

With a projected roll-out programme

of 5,200 vehicles per month IVM started

at 300 a month but manages about 600

a month as yet. However, Chukwuma

believes that they are on course to

meet the 1,200 vehicles a month target

they have set for year’s end. Part of

the conviction for this, according

to him, comes from the fact that –

unlike with motorcycles – they never

assembled vehicles. They started with

manufacturing outright.

“We shall stop at nothing till

we achieve total local content,” he

submitted. “Assuming Ajaokuta (Steel

Company) was working, the story would

have been drastically different. To

further achieve this is one of the reasons

why with some Nigerian partners we

moved into the manufacture of tyres at

GTT. With all the tyre companies in the

country moribund and Nigeria boasting

of very good rubber, we have decided to

take the bull by the horns. It’s our hope

to play a leading role in the tyre supply

chain for both motorcycles and vehicles

in no distant time.”

He concluded the latter rather too

self-assuredly. Reminded that cynics

could still see it all amounting to buying

and selling in the long run, he took a

deep breath and threw in a clincher: “I

don’t know about others but I would

rather buy raw materials and sell my

own finished products at the most

competitive of prices than buy another

man’s finished products to sell to my

people at exorbitant prices.”

“Apart from the price difference that

it will visit on the goods like I have said,

what of the jobs manufacturing will

make available for our people? Instead

of the youth parading the streets jobless,

they are given means of livelihood. In

turn, this makes the country safer as it is

joblessness that will push them to crime

and nefarious acts that’ll make them

constitute a burden to the society.”

A commendation of the wisdom

in his analysis brought a twinkle of a

smile flashing across his face. He let the

compliments sink in well enough before

amplifying that it all goes back to his

roots. According to him, the eponymous

progenitor that begat the four villages

that constitute his hometown was

wisdom writ large. He capped the

lead

BOI IMPACT | 9

ensuing lesson in their ancestral history

with a popular Igbo proverb -“the

foolishness of an Nnewi man amounted to

wisdom in neighbouring towns.” Invariably

an overstatement as the late Chinua

Achebe would have said, some truism

appears to lurk in it judged by the decision

taken by his second-bite-shy townsfolk

to domesticate their businesses in Nnewi

after the experience of the Nigerian

Civil War (1967-70). Very strong in the

automotive parts trade, Nnewi, no sooner

after, became the hub of the trade in the

country; attracting customers from as far

away as the west and east coasts of Africa

– a happenstance that undoubtedly played

a major part in the emergence of Innoson

Group when and where it did.

Born on 10 August, 1961 to a junior civil

servant Mr Godwin Chukwuma Mojekwu of

Uru-Umudim Village and his wife Martina,

Innocent Chukwuma surmounted a stack

of odds to become this entrepreneurial

statement of our time. An indubitable child

of destiny, the story of how he was left for

dead after being run over by a hit-and-run

driver at the tender age of six years is now

a reporter’s delight. “I strayed back onto

the road for my toy watch that had slipped

from my hand as I crossed the road in the

grip of an elder brother,” he recounted.

“As God would have it, just before burial

obsequies could commence after the close-

to-three-hour interlude it took to hunt the

erring driver down, I woke.”

Relationship with Bank of IndustryIt started when he ventured into

manufacturing. Admittedly, as a “buyer

and seller” he had been stuck with the

commercial banks like most people else.

“The first loan I ever took way back

then,” he recounts with nostalgia, “was

N5,000 from the old United Bank for Africa

(UBA) repayable in one year. I paid it back

on schedule - with the accruing interest -

and they doubled it for the next year... They

have been doubling and doubling it so for

me year after ever since.”

According to Chukwuma, he was

attracted to BOI because the terms and

conditions of the commercial banks would

be difficult to meet for an industrialist who

needed better understanding from his

creditors to raise his head in the slippery

waters of manufacturing.

“The Bank of Industry is tailor-made for

manufacturers,” he enthused. “You see,

every manufacturer needs enough time

and space to operate so as to be able to

‘BOI is tailor-made for manufacturers. With-out them, I wonder how I would’ve managed.’ - Innocent Chukwuma

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10 | BOI IMPACT

pay back any loan. The money has to go a

full cycle that takes more time than when

one is just trading with it.”

Like he opined in a YouTube testimonial

posted on BOI’s website, the bank assists

him primarily in the buying of equipment.

“Without them,” he posits now, “I wonder

how we would have been managing. The

first loan they made available to us was for

N600m with a four-year tenor. We finished

repaying it in two years and took another

for N300m. This one took us two and a half

years to repay. The third one for N600m

was also repaid in record time and we are

now paying back the fourth tranche worth

N1.4 billion. God willing, we shall also meet

with that and keep ploughing on.”

Any wonder that in 2011 he won the

bank’s Best Customer Award for Loan

Repayment and Contribution to Nigeria’s

Economic Development.

Though admittedly he had to sell

virtually all the property he had acquired

across the country as a trader to meet their

initial start-up requirements, Chukwuma

upon hindsight still thinks the effort was

more than worth it. Given his experience

with the bank, his advice to would-be

industrialists is to look the bank’s way and

no other for financing as nowhere else

would suffice if they wanted to get a loan

that will enable them sleep with their two

eyes closed.

By him, accessing loans from BOI is

also not as difficult as people are made to

think. The onus, he says, is on the would-

be industrialist to write transparently

feasible and concise project proposals;

that are clear and to the point and not

unnecessarily outsized and unmanageable

at first sight.

“The thing is to take it step by step,”

he elucidated. “Like in my own case, I buy

equipment one after the other. I don’t

want to buy another one when I have not

finished paying for the outstanding one.”

He is however quick to point out that

the most important aspect for a rapid

industrialisation of the country is the

prevalence of favourable government

policies. Such that made a BOI possible in

the first place. A member of the committee

overseeing the Federal Government’s

National Industrial Revolution Plan (NIRP)

launched in February 2014, he sees it as

well as the rest of the Transformation

Agenda of the Federal Government as

capable of leading Nigeria to the Promised

Land in record time.

“We (the committee) have started

work in earnest,” he stated. “The effect

will start being felt much sooner than

later. I strongly believe that with the input

of people like my humble self from the

private sector, the country would have

come a long way in industrial development

within the projected period. A case in point

is the power aspect. Most of the money

we would otherwise have used for R&D

(Research and Development) is invested

in power supply instead. But with the

privatisation of the power sector this will in

no time become a thing of the past.”

A member of the Nigerian Automotive

Manufacturers Association (NAMA), he

sees this playing out in the automotive

sector also. “Take the Nigerian Automotive

Industry Development Policy (NAIDP) for

instance,” he continued, happy to return

to home turf. “With its coming into force

things are beginning to happen. Car plants

are opening again and the drive for local

content is enhanced. Rather than import

a finished foreign car at a high duty of 70

per cent, you make original equipment

or import from other Original Equipment

Manufacturers (OEMs) at zero duty. Once

you import only very few components as

CKDs at the very reduced import duties of

between 5 and 10 per cents, not only will

the price of cars come down but people

will also have jobs like I have explained

and we can raise our heads high in the

committee of nations.”

Reminded that this could also imply

throwing the floodgates open to all

manner of competitors for them at

Innoson, he demurred; dismissing it with

a mere wave of hand. “My brother,” he

implored, “it is no longer about profit. One

lead

‘I don’t see myself as a rich man. I’m not in this for the money per se.’

BOI IMPACT | 11

is not here for money any longer. Now

it is mostly about leaving your footsteps

on the sand of time. When I would have

made vehicles in Nigeria affordable to the

common man, there would be nothing

else to ask for.”

He compared the situation to what

used to obtain before they veered into

the local manufacture of motorcycles.

Brought in crates, only 40 motorcycles

filled a container. Sensing that more would

fit into a container dismantled, INL ended

up importing a total of 200 motorcycles

in one container. With the reduction

achieved from freight charges alone, the

price of brand new motorcycles reduced

by as much as 40 per cent.

“The only problem then,” he

expatiated, “was in winning the confidence

of would-be customers who thought the

motorcycles were substandard or inferior

because they knew we assembled them

with just the little experience we gained as

traders. For this the first container took a

whopping three months to sell. But by the

time the second shipment of 10 containers

arrived, it was sold in less than a month.

The third consignment of 20 containers

was sold out before it berthed at the ports.

That is Nigerians for you. Once you win

their confidence, the sky is the limit.”

So confident is he that this is in the

offing at IVM that he dismisses the shrugs

of the remaining folk who still doubt the

durability and otherwise of their vehicles.

“There are standards set for the

manufacture of vehicles throughout

the world,” he clarified. “What we do

not manufacture here like engines and

gearboxes we buy from where others

buy theirs. The same way, we source the

other components from where they source

theirs. Also, we end up using the same

equipment they use to assemble theirs to

assemble ours and so on till a car is made.

Now you be the judge. Or is there a law

that vehicles cannot be made here?”

With hindsight acquired from his

staggering experience on the field he sees

straightforwardness

as the only way

out for any

businessman: “If

you are innovative

enough, backed

by truth and if you

don’t venture into

areas not too clear

to you, you’ll make

it. I’ll personally

never do a business

because it has the

promise of a very

high percentage

profit. I have never.”

Still Chukwuma

sees the future

as even more

daunting: “We

started in Nigeria

and are slowly

spreading to

the West coast.

Expression of

interest in our sweat

has come from as

far as Ghana and Cameroun. We’ll stop

at nothing until we take over the entire

African continent with our brands.”

Indeed, a trade delegation from Ghana

had visited IVM shortly before it was

commissioned by President Jonathan.

It was led by Deputy Transport Minister

Hon (Mrs) Dzifa Attivor. In a speech at the

occasion she expressed happiness that

with what she saw at Innoson Group the

wishes of their late first leader President

Kwame Nkrumah of Africans harnessing

local resources which amounted to 50

per cent of the world’s total was coming

true. On behalf of their government, she

pledged that they would patronise the

project.

Asked whether his continued

expansion doesn’t translate to more and

more money accruing to an already made

man, Chukwuma answers in the negative:

“I don’t see myself as a rich man,” he

said, his face creased in a smirk that

accentuated the scar and suture marks left

on them by that accident at six. “Not when

I do owe the banks so much. I told you that

I’m not in this for the money per se. I’m

just another busy man and my belief is that

once someone is as busy as he should be,

he will never pass for poor. It is only a lazy

man who does not work that can be said

to be poor. My situation is as a result of my

work rate and it is the Lord’s doing.”

But life is not always about work for

Chukwuma who has in his kitty many

garlands including the Officer of the

Federal Republic (OFR) awarded him in

2011 and the Nigeria Centenary Honour

Award, in 2014; both by President

Jonathan. When he is not relaxing at home

with the wonderful family he is raising

with his beautiful wife, he could be caught

outdoors playing tennis with other big

boys at the club.

lead

‘When I would have made vehicles in Nigeria affordable to the common man, there would be nothing else to ask for.’ - Chukwuma

12 | BOI IMPACT

lead

Nnewi: Nigeria’s manufacturing town

Any first time visitor to Nnewi town will be astounded

by the sheer population of motorcyclists of both

genders on the roads. In fact, you would not have

entered the town long from the Oba bypass on the Onitsha-

Owerri expressway to associate it with motorcycles of all

makes and colours. As you approach the Nnamdi Azikiwe

University Teaching Hospital junction, they would swarm

around you with their riders perched on them as if they were

created on them – some of the females had their infants

strapped on their backs with wrappers! Then you head in

their brood towards the roundabout at the centre of the

town adorned with the statue of the late former President

of Nigeria’s First Republic Senate, Akwaeke Nwafor Orizu, a

prominent indigene. When en route after beholding rows

upon endless rows of them lined up for sale at the Nkwo

Market, it wouldn’t turn your head as on later enquiry you

realise that the biped is the prime instrument of the town’s

crowning glory.

Welcome to Nnewi , dubbed since the late 20th Century,

the Japan of Africa –when by dint of their toil the indigenes

transformed it from an automotive parts trading haven to its

industrial manufacturing mecca. Any search engine deployed

to probe the town on the Internet won’t mince words in

telling you that where you stood has well over 30 small and

medium-scale industries within its bowels. Yes, owned by

private individuals.

One of the leading urban towns in the present-day

Anambra State of Nigeria’s South East – the third, in fact,

after Awka, the capital, and Onitsha – it boasts an ancient

habitation that dates back from the early 15th Century. Back

then a mostly agrarian community would gather in the Nkwo

Market square to trade their surpluses for their needs. Initially

done by barter, various forms of currency including copper

and cowries were to come into play as civilisation wore on.

Things were to come to a head at the turn of the 19th

Century when the Europeans joined the fray. Even before

their arrival proper in the town towards the end of the

century, the introduction of their items of commerce saw

the town assume its own shape. From the early 20th century

customers to the burgeoning market from the town and its

environs now had various foreign items being traded as well.

In no time, the town became the place to go for many brands

of automotive spare parts.

How this came to pass is now all lost in the nebulous

lines of unwritten history. One school of thought, though,

believes it could be explained by the emergence from the

town of foremost Igbo transporters – from late Sir Louis

Odumegwu Ojukwu’s Ojukwu Transport Company (OTC) in

the late 50s down to late Chief Augustine Illodibe of Ekene

Dili Chukwu Limited (EDC) of more recent memory. These

and a whole lot of other similar concerns and their emerging

fleet easily provided a ready clientele for spare parts back

then when Nnewi was yet a hot trading post on the busy

Onitsha-Owerri highway.

The circumvention of Nnewi by that busy road rather

than diminish the town’s hold on the trade ended up

boosting it somehow. When following the aftermaths

of the Civil War those of them in the trade without their

town’s borders decided to stay put and operate from home

base, Nnewi virtually took over the trade in its entirety.

Customers now came not just from within the country but

the entire West and East coasts of Africa. It did not take time

for these entrepreneurs to grow to the level of setting up

manufacturing concerns in numbers to produce those parts

that they had hitherto sourced abroad.

While automotive spare parts accounted for the

majority of the industries that were initially set up, it is with

motorcycle spare parts variety that they began to make

more positive history. From trading in them, industries

manufacturing them started springing up as well. So much so

that in no time people from all towns else journeyed to buy

not just spare parts but also whole motorcycles from Nnewi.

So commanding did Nnewi become in the motorcycle trade

that it was its traders who crashed the price of brand new

motorcycles when the country had been bound to their used

varieties imported from all around the world. It did not take

long for the first indigenous motorcycle assembly as well as

manufacturing company to be set up on the land. It is also on

record that the first wholly Made-in-Nigeria motorcycle was

manufactured in Nnewi by the National Agency for Science

and Engineering Infrastructure (NASENI).

Following on the heels of this an industry that

manufactures motor vehicles with as much as 70 per cent

local content has also come on board. The way things are

shaping, the Japan of Africa may yet become the Germany of

the Southern Hemisphere.

BOI IMPACT | 13

A customer steps into Michael Ogunfidodo’s fabric store, a space tucked away at the end of an alley that winds through rows and rows of similarly-sized fabric shops.

“Madam, how’s Canada?” he asks,

warmly.

One of those Nigerians who

frequently travel abroad carrying with

them local merchandise – everything

from food to Nollywood home videos

to fabric – which are in high demand

by Nigerians in the Diaspora - she

complains about how business in

Canada is nowhere near as good as in

the United States; because there are

many more Africans and Nigerians in

the US than in Canada.

While they settle accounts she

asks for a “stone-black” fabric she

had seen the last time she visited.

“Bring me that tablet,”

Ogunfidodo tells his assistant. He

goes through the pictures saved onto

the device, in search of the design.

No luck. He asks for his smartphone.

No luck. He’s nonplussed, and asks

the customer to send it to his phone

“on Whatsapp or Facebook”, to rejig

his memory.

Welcome to the Kenta Adire and

Kampala Market in Itoku, Abeokuta,

one of a handful of cities in western

Nigeria famous for the production

of “tie-and-dye” fabric, known in the

Yoruba language as adire – literally

meaning “to tie and dip (in dye).”

Ogunfidodo is not your typical

adire merchant. For one, he’s

male – the business is dominated

by women - and, secondly, it’s

genealogical - passed down from

one generation to another, typically

along matrilineal lines. He inherited

the business from his mother, who,

he says, “is old now.” In one 2013

ADIREMARKET:

TRADE SECRETS (JUST A FEW)

14 | BOI IMPACT

special report

study of 80 randomly-selected

“adire entrepreneurs” in Abeokuta,

researcher Zakaree Saheed found

that only one in four was male.

Ogunfidodo is also youngish, in

his “late 30s”, he allows – and has a

University degree in economics, from

the University of Science and Applied

Mathematics (USAM) in the Republic

of Benin.

He had the option of looking

for a salaried job; his interest lay in

Information Technology. And then

fate intervened. After graduation he

spent some time helping his mother

out at her store, in the same market.

When he left, she was inundated

with queries about the whereabouts

of her son. “People liked the way I

related with them.” It was enough

to nudge him to abandon his other

dreams and return, for good.

He brought his University

education to bear on the job.

“They’ve been doing this business in

an old way; there’s lots of ways we

can repackage it.” He rebranded his

mother’s ‘Jesutofunmi Enterprises’

into ‘Ibile Apparel Limited’ and

started labelling his fabric with

branded stickers. He also says he

introduced the plastic film packaging

in which fabrics are now sold –

people had to overcome their

reluctance to spend more buying

the firm rolls of film, instead of the

flimsier ‘bread loaf’ bags they were

used to.

And while many people continue

to use wood fuel to generate the

heat for boiling the water used in

adire-making (to dissolve the dyes,

and to de-wax), he now uses the

cleaner and more efficient liquefied

petroleum gas.

Before the emergence of social

media, adire makers depended

on word of mouth or user

recommendation. Today Facebook,

Whatsapp and Blackberry Messaging

are important marketing channels.

“I have a page on Facebook, to

which I upload most of our designs,”

Ogunfidodo says. He also has a

database which he uses for SMS

blasts.

Like many of the other adire

dealers, he makes everything he

sells. In that sense their vocation

goes beyond merchandising – they

design, produce, and brand as well.

On the day we visited the market,

Ogunfidodo had spent the entire

morning at home producing new

stock to meet a customer order,

from Benin City due for pick-up the

following day.

If your notion of tie-and-dye

is about dye-pits at which elderly

women sit all-day long and work

then you are behind the times.

Ogunfidodo reveals that everyone

now uses large plastic basins.

He works out of his home.

Capital-intensiveThe adire business is capital-

intensive, Ogunfidodo illustrates by

pointing to a modest-looking stash

of fabric: three piles sitting side-by-

side, collectively worth half a million

naira. It’s easy to underestimate

just how much value is locked up

on those shelves; a full store could

easily be worth millions of naira. An

investment that might be substantial

in some other business would

produce only a modest impact in

an adire store. According to the

2013 study quoted earlier, less than

a quarter of the entrepreneurs

surveyed had invested more than

N100,000 in their businesses. Against

this backdrop, it is clear that the

majority of the entrepreneurs are

able to operate only very small

businesses, because of funding gaps.

Like many other small Nigerian

businesses, the adire makers depend

mainly on personal savings. They

organise themselves into “Co-

operative Societies” (“Co-operatives”

consisting of between 10 and 15

persons per unit. Members contribute

regularly (usually monthly), and then

BOI IMPACT | 15

special report

take turns to receive a payout worth

twice the contribution. The difference

between contribution and payout then

has to be repaid. Co-operatives are a

popular means of informal capital-raising

in Nigeria, providing interest-free funds

and repayment schedules less stringent

and punitive than those offered by banks.

The alternative would be bank

debt. But many business-persons see

them as unreasonable, on account of

the high interest rates associated with

commercial bank loans in Nigeria. Not

even microfinance banks are able to offer

anything markedly different.

Enter the Bank of Industry, with its

loan scheme targeted at the adire dealers.

“Only BOI has given us loans at single-

digit interest rates,” says Ogunfidodo.

The BOI loan comes at 7%. The merchants

apply for the loan as cooperatives, not as

individuals. Ogunfidodo’s cooperative,

of which he’s secretary, got N8m. The

money was paid into the cooperative’s

bank account, and then shared by the

members, according to need. Repayments

are done monthly; members pay into

the bank account, which BOI debits by

cheque. (The cooperative pre-issued 30

monthly post-dated cheques to BOI, to

cover the payments).

“The essence is to empower women

and youth, to create wealth, and reduce

the level of unemployment and crime,”

says Monday Ejigbo, Manager, Lagos

Zone, at BOI.

BOI operates a “matching fund”

loan scheme with interested state

governments, in which it matches the

amount of money the state offers to

allocate. Currently there are about 18

states across the country that have

launched BOI matching fund schemes.

In December 2011, Ogun State signed a

five-year contract with the bank to create

a one billion naira fund –each party

contributing N500 million.

The partnership allows the various

state governments to subsidise BOI’s

standard interest rate of 10 per cent. The

Ogun State Government’s subsidy ensures

that cooperatives in the state can take

loans at 7 per cent.

Loans from the fund go to a total of

128 cooperatives in the state, says Mr.

Ejigbo. Forty-one of those are groups of

adire merchants; the rest are of dealers in

other goods such as dried food products,

fish and poultry. The adire co-operatives

have received a total of N230 million in

loans since the scheme started.

The matching funds programme

started in 2008. At that time the loans

were solely to buy equipment, not as

working capital; and full repayment

was expected in 15 months. The bank

learnt from that early experiment and

modified it by doubling the tenor, and

also loosening the application restrictions

so that it could be deployed as operating

capital.

“The rate of default reduced when we

increased the tenor,” says Mr. Eji-gbo. The

repayment rate in Ogun State, according

to the bank, is in excess of 90 per cent.

He adds that the loan scheme has helped

create in excess of 2,500 jobs along the

adire value chain, from manufacturing to

sales and distribution.

“If people are given the opportunity, if

you believe in them, they can turn things

around,” Ejigbo says. “And that’s what

BOI has done. So far the bank has no

regrets.”

Family mattersAnother adire-maker, Oluwakemi

Somuyiwa, says her cooperative – with 15

members – also got N8m. BOI gives them

30 months to repay – another difference

between a BOI loan and a commercial

or microfinance bank loan, for which

repayment tenor averages 12 months.

Today, Somuyiwa is in one of her two

stores, along a row of stores facing the

busy street, above which a flyover has just

been completed by the state government.

(The construction led to the demolition of

dozens of shops; Somuyiwa lost the four

she owned and the two she now owns

are fairly recent acquisitions.)

She’s babysitting for her daughter. The

four-month old is restive, and crying.

Her store is six feet by six feet; the

floor covered in rug; ceiling a stretch of

cardboard from which a single energy-

saving bulb dangles. The walls are stacked

ceiling-high with fabric. On the concrete

floor which serves as a porch sits a table

also piled with fabric.

She’s Otun Iyaloja, second-in-

command in the market’s administrative

hierarchy. Soon, a small group of women

pays a visit. From their conversation, it

seems they are fellow traders reporting a

colleague’s misdeeds to her.

“I was born into this industry,” she

begins to tell her story. “This business is

inherited. See my daughter, she was born

into it. They go to school, get jobs, and

come back (here). I’ve got children with

Master’s degrees, they may not sit here

with me, but they all know about the

business.” Somuyiwa’s son, Ekundayo,

says this embroidery process – usually

‘Only BOI has given us loans atsingle-digit interest rates,’ says Ogunfidodo.

special report

16 | BOI IMPACT

commissioned by clients for special

celebrations - can produce fabric that

sells for as much as N25,000 for five yards

of material; four to 10 times the average

prices

Sometimes, however, people come

into the trade outside of the family lines

– by an apprenticeship system common

across many artisanal vocations in

Nigeria. The apprentices have to spend a

minimum of six years with a “master”. The

first year is spent “serving” – no tutoring,

strictly errands and menial tasks. The next

five years are spent actively learning the

trade, which, in the adire industry covers

production and marketing. Apprentices

typically pay for the learning they receive.

Upon “freedom” – the term applied to

completion of learning – the student gets

a certificate, and can launch his or her

own business.

In his study, Zakaree Saheed

also found that a little over half (45

respondents) got into the business

by inheritance, while the rest came in

through apprenticeships and other

forms of formal and informal vocational

training.

Changing timesMaking adire involves “resist-dyeing”

of fabric – a technique known as “batik”

and designed to ensure that the applied

dye only selectively penetrates – to

produce striking uni- or multi-colour

patterns. Various methods are used to

achieve the selective “resistance” to the

dye; ranging from the use of cassava

starch or melted paraffin wax (applied

using stencils), to seeds and stones (tied

to the fabric using string), to stitching

(by hand or machine, using local thread,

iko). The most complicated – and by

extension, expensive – methods involve

painstaking “tracing” and embroidery

techniques applied after dyeing has been

completed.

From the start the craftspeople have

a design in mind for the material, which

the series of processes – starching,

waxing, tying, threading – is supposed

to help realise. “There are some designs

you can’t know if you weren’t born into

this trade,” says Somuyiwa. “Every now

and then I dig up old designs from my

childhood, and re-introduce them.”

Ogunfidodo on his own part says

he sometimes creates completely new

designs for his material.

The adire industry in Abeokuta dates

from the early 19th century, but reached

its apogee in the 1920s. The earliest adire

makers used indigo dye and salt; the

indigo dye creating a trademark blue-

and-white output (one well-regarded

book-length study of the early decades

of rise of adire-making, by American

academic Judith Byfield, is titled: “The

Bluest Hands” – evoking an image of the

dye-stained of the artisans).

But technological breakthroughs in

the early 20th century quickly rendered

the traditional raw materials and

methods obsolete. “New ingredients

– caustic soda and synthetic indigo –

transformed the technology of indigo-

dyeing, making it an easier and more

stable process,” writes Colleen Kriger

in her 2006 book, Cloth in West African

History. “By the 1930s, adire production

relied heavily on materials that were all

imported: factory-made cloth as well as

the caustic soda and synthetic indigo for

the dye vat.” (The import-dependence

of the industry, dating back to the first

half of the 20th century, continues to

pose a challenge. Most raw materials –

from the ‘guinea brocade’ fabric to the

dyes and paraffin wax – are not locally

manufactured).

Starting in the 1960s, Kriger adds,

synthetic dyes began to be available in

many colours. (The original indigo dye,

derived from the leaves of a local plant, is

still sometimes used.)

According to Somuyiwa, the

finished products that are today sold

as ‘Kampala’ – as opposed to adire –

are the product of new designs and

production techniques introduced as the

artisans developed greater confidence

in expressing contemporary design

sensibilities. But they were careful to

ensure that the innovation did not

tamper with the production values that

set the art apart – the painstaking work

that goes into selecting fabric and dye

and design, and the handcrafted essence.

Now, however, there is a strong

threat from abroad – China. Somuyiwa

says Nigerians buy the original local

samples, and take them to China where

unscrupulous manufacturers replicate

them using cheap fabric and assembly-

line mechanisation. But the differences in

quality are obvious. “If you sweat while

wearing (the Chinese products), that’s

the end,” says Somuyiwa. “The colour will

powder you.”

She and Ogunfidodo both insist they

‘There are some designs you can’t know if you weren’t born into this trade,’ says Somuyiwa.

continued on page 34

special report

BOI IMPACT | 17

WHERE THE JOBS AREMinister for Trade, Industry and Investment, Dr Olusegun Aganga in this interview gives us some insights into how he’s making the difference in Nigeria’s industrial development.

BOI IMPACT: Unemployment is really serious here. How can it be tackled.AGANGA: Unemployment is not just a Nigerian issue, it is a global

one. When the (Jonathan Administration) came on board, despite

that our average growth hasn’t been

about 7% over the last 10 or 12 years,

we emphasised that the quality of

growth was far more important

today than ever before. That is why

our emphasis today is on inclusive

economic growth, which means that we

are focusing more on job creation.

Our focus on agriculture is part of

where you have a large number of

employment. We are also focusing on

the housing sector where jobs can be created. Our focus on the

MSME is why we launched the National Enterprise Development

Programme.

When you look at our Industrial Revolution Plan, one of the

criteria for identifying the sectors is that they are labour-intensive.

So, when I talk about sugar cane to sugar, a lot of jobs are created

in that sector. Cement supports about 1.6 million people today. So,

overall our strategy is about job creation and we are making very

good progress; although some would say that we could move faster.

But what gives me hope, what makes me think that this is

a problem that can be resolved very quickly, is that, given the

nature of my job, being responsible for industrial development,

investment, trade and enterprise, I face the business community, I

face the Nigerian people. And everywhere I have gone, I have seen

jobs. We complain and say we have high level of unemployment

and yet, when you look at the housing project, you see (the

artisans) are not from this country. If there are no jobs, why are

these jobs being done by non-Nigerians? So, there are jobs but we

need to fix the skills’ deficiencies.

If you look at the internship programme in Germany (or) the

Senai structure in Brazil, the first thing that they all have in place is a

national skills gap survey which tells you the skills gap in each of the

sectors. With that the schools can produce people that are relevant

to the economy. Secondly, it allows those who are responsible,

like Industrial Training Fund for vocational training to now make

sure that they train people for the economy as well. So, for the first

time ever, ITF is now working with UNIDO under my supervision to

create the first national skills gap survey in the country. When that

survey is available, it will be used by different ministries to plug the

gap. But we want a situation also where, it is not only the public

sector, it is an investment opportunity also for the private sector to

go into it.

Their bankable proposals in other countries have proven to be

one of the many profitable areas you can go into. If you look at

Senal, in Brazil, they train at least 1.5 million, if not 2 million people

a year. And about 90 per cent of them are in full employment

within three to four months; because, they have used that skills gap

survey effectively in their country. ITF and the Simeth institute are

working together to create additional

skills in the six geopolitical zones to,

at least, address issues in the housing

sector as quickly as possible.

What is government going to do about addressing the issue of high interest rates?

I think the issue is about affordable

finance. There are reasons why they

have been as high and part of it has to

do with the environment, the risks in

the environment and all that. But (BOI has a different template).

Indeed, there are people who swear by BOI, any day. If you ask

one of our celebrated pioneer industrialists in the East, Innocent

Chukwuma, for the secret to his success, he will tell you it is the

patronage of his state governor, Governor Peter Obi, but more

importantly, the support he got from BOI. (See: The Innosons

Testament, p14).

He tried the commercial banks, he failed woefully and owed a

lot of money until he came to BOI and the difference was clear. And,

BOI is now looking more at the small and growing businesses or the

micro businesses. Through such schemes as cooperatives lending,

bottom of the pyramid and working with micro finance institutions.

But as a country, we need to look beyond that. We need a

finance reform programme. Some businesses require short term

lending while some others require long term money. So, there

is a team working on the financing value chain now so that the

Industrial Revolution plan can work.

Standard Organisations of Nigeria is another area. Selling to

Nigerians or you want to export, it is important that you meet the

international standards. You know that the president has made it

very clear, that we must consume what we produce and we must

What gives me hope (is that) everywhere I have gone, I have seen jobs,

we simply need to fix the skill deficiencies.

- Olusegun Aganga

18 | BOI IMPACT

q&a

BOI IMPACT | 19

produce what we consume and government is there to make sure

that they buy those products.

How far has the National Enterprise Development Programme (NEDEP), launced on 11 February progressed?

NEDEP is one of the many programmes we have, not only to

grow the small and growing businesses and the SMEs and the

micro businesses, but it is also the opportunity to create jobs. It is a

unique and special sector in any country. When you have a sector

that is about 17.25 million in terms of the entities there, and the

sector is employing 32 million people, accounting for 70 per cent

of our workforce, it is a very important sector. It is the only sector

that, regardless of whether the economy is doing well or not, it

continues to employ people.

Because, if things are not going well in the big companies, they

make you redundant, you sit down at home for a week or two, you

try to apply but after a while, you set up a business. So, it is a place

that people come to all the time. But unfortunately until now, no

government has taken it as a sector

on its own. Yes, we had SMEDAN but

you know, when we had SMEDAN, it

was only in 13 states of the federation.

Today, under NEDEP, SMEDAN is now in

the 36 states of the federation.

Secondly, we treated and made

policy for everything from the centre.

The SMEs, micros are in the states and

local governments so, the idea is to set

up state councils, state MSME councils

where the issues are discussed and addressed. We have done that

in many states now and then, to have a national MSME council that

will be chaired by the vice president, have the necessary ministries

and agencies that will be relevant, the private sector in the same

place, addressing the issues affecting that sector.

The good news is that we have had significant interest from

the private sector. A lot of them have come into many of the

programmes because, part of what we are doing is to address the

problems they have. The commercial banks are also joining up.

Stanbic IBTC, First Bank have each dedicated a certain amount for

NEDEP. So, if we have good entrepreneurs, business plans, it is not

just to BOI, we are sending them to FirstBank, to Stanbic IBTC and

other banks. Fidelity and Diamond Bank are very interested.

We even have some companies that have money dedicated

to SMEs that are willing to make their funds available for any

entrepreneurial programme. In terms of market access, we have

been very encouraged by the response from the private sector

where the private sector agrees that the SMEs that come under

them become part of their supply chain and in some cases, not just

the supply chain, they can be end users of their products.

If you look at Lafarge, for example, they do cement. They are

now working with block makers and they want to set up block

makers all around the country, fully trained so that they can deal

with the issues of collapsed buildings etc and, we will work with

them, they will be funded, they will be trained and they will set up

their own businesses and run their own businesses at that level.

I am actually going to markets very soon to deal with traders,

they are micros. I need to make sure that we address their concerns.

So, we have been going around, doing different things but we

are very encouraged by what the private sector is doing and the

support we have received from them today and, of course, the last

thing is to have the virtual market place where SMEs who want to

sell their products advertise their products and those who want to

buy their products, go there to buy as well. So, there are a number

of initiatives which we are working on but you will see more action

also once a council is in place because, anyone can bring a memo

through SMEDAN on ‘what do we need to do to improve the

environment’? Our job is to create the enabling environment for

them and we are very determined to

address that. We have reduced the cost

of starting a business. If you go to CAC

for example, the cost of registering a

business, we have reduced it by about

50 per cent from last 1 October.

Any new plans to make small businesses tap into the opportunities AGOA avails?

Unlike other countries that have

done well (Ethiopia, Kenya, Lesotho),

we didn’t have a strategic plan for AGOA but now we do.

Most people are not aware that AGOA is a pact between Africa

and the United States where you can export about 6000 wines to

America, duty free, quota free. We had focused too much, on to

some extent on exporting, just in our normal way, exporting raw

materials, agric produce and all that.

But it is a lot easier when you are actually exporting processed or

completely processed food items or manufactured products and that

is what other countries have done better. So, instead of just sending

pepper, if it is dried pepper, well ground, it does better. And then, if

you look at the items that have higher duties for example, and you

export those items to America, your goods are far more competitive

because of the duty rates in the United States. If you look at Kenya

for example, they have a garments sector there, where they are

producing all the garments for McDonalds in the United States and

in that factory in Kenya, they are exporting everything under AGOA,

they are employing about 3000 people there.

America is reviewing the AGOA now. We hope that it will be

reviewed and approved in the same manner, we are willing to work

with them to make it a better product but now, we should be in a

better position to take advantage of AGOA.

q&a

NEDEP is not only to grow the small and growing businesses and the SMEs and the micro businesses, but also to create jobs

20 | BOI IMPACT

q&a

WHAT WE NEED TO DO TO GET TO WHERE WE WANT TOHe leads one of Nigeria’s highly diversified and successful groups, BUA, and has been the chairman of a publicly quoted company – the Cement Company of Northern Nigeria Plc - for many years.

He was re-appointed for a second term by President Goodluck Jonathan as the Chairman of the Board of the Bank of Industry.

Quite a busy person, he found time to talk with a team led by Editor Hadiza Olaosebikan to answer questions on diverse issues including whether he would have time for the Bank.

You should find this interview a delight.

BOI IMPACT: How do you feel on your coming back as the chairman of the bank?

ALHAJI ABDULSAMAD RABIU: I am really honoured. The

fact that somebody is being appointed as the chairman of this

great institution, I believe, is an important thing. And that, I

also believe, is an indication that one was appreciated by Mr.

President and I think we should do whatever it takes to ensure

that we do not fail Mr. President. It is an important thing for

me - the fact that I have been called upon to come and serve as

the Chairman of Bank of Industry. So, it is a great honour and

privilege to come back to serve at the Bank of Industry for the

second time.

What impact do you think your returning to BOI would have on the bank?

The fact that one is abreast of the workings, the issues, the

challenges of the Bank and its internal structures, I think, will

definitely be a positive thing in the sense that we, as a board,

will not waste a lot of time to learn the system, because a lot

of us are coming back to the board. So I think it is a good thing

because we are familiar with the terrain. Similarly, the fact that

I have been the chairman of a publicly quoted company for

many, many years puts me in a unique position to work with the

board and management of the Bank; to use it as a vehicle to try

and further promote and sustain Mr President’s Transformation

Agenda to make sure that the economy of this country is moved

forward. So, I think there are quite a few advantages to the fact

that we have been appointed to the Board.

Considering your vast business operations and tight schedule, will you have time to discharge your obligations to the Bank?

It is true. It is not easy, I know. Definitely, it will have some

impact on my time management, but I see this as a national

assignment, and I believe that every Nigerian should be proud

to serve their country when called upon. So, to me, I see this as

a national service and I am honoured. I will make time and do

whatever it takes to ensure that I give as much time to the Bank.

Like I said, every Nigerian must feel proud to be called upon, so

for me, there is a sense of fulfilment in these kinds of things. I

am really proud, and I will make the time.

Let’s look at Vision 2020, whereby Nigeria is supposed to be industrialising. How are you going to help the President in achieving these objectives through the Bank of Industry?

First of all, the issue of job creation is very crucial, so we will

ensure that the bank partners with Mr. President’s job creation

agenda, without a doubt. I’m sure you are aware, just last week,

he inaugurated the Job Creation Board (JCB) to be chaired by

the Vice President, and the Vice Chairman is Tony Elumelu. I also

happen to be a member of that job creation board with other

such prominent Nigerians as Atedo Peterside, Aliko Dangote,

Bisi Onasanya. And the mandate of that board is to create three

million jobs in the next 12 months. So, the bank is going to work

with JCB to help it meet that target. We will also work together

with other agencies of government to see that this agenda is

achieved.

During the inauguration of the BOI Board, you said that high ethical standards and professionalism will be upheld at the bank, especially during your tenure as chairman of BOI. Can you expatiate on this?

I believe that in an institution like the Bank of Industry, one

must make sure that the highest ethical standard is maintained,

and we would do whatever it takes to ensure that we adhere

strictly to the corporate governance principles, and I will give

you an example. I am in business, and we do a lot of business

with so many banks. Just before I was re-appointed as the

chairman of the Bank, my company applied for a facility for one

BOI IMPACT | 21

q&aq&a

22 | BOI IMPACT

q&a

of our projects here in Lagos, and it was being processed.

And the moment it was announced that I was re-appointed

the chairman, I called my people and told them, “Look, I have

now been appointed the chairman of this bank, and I do not

believe that we should have any facility whatsoever with the

Bank of Industry. I would want a situation where none of the

members of the board in fact has that kind of relationship.” So

I directed my people to withdraw the application immediately.

There were some protests, and I let them know that I believe

there would be conflict of interest. I do not want a situation

where I will be chairing a meeting where my company

submitted an application and I would have to take a decision on

that. So I told them immediately to withdraw the application.

So, that is one of the things that I think we need to be doing.

And as far as I am the chairman of this bank, I will not have

any facility with the Bank, even though I believe I am entitled

to get a facility from the Bank, given the fees, the rates, which

are much cheaper than commercial

banks; you are talking about 4-10%,

which is not the case with commercial

banks, which range from 14-18%.

They made a case that the application

is for our cement project under the

Cement Fund, but I still said ``No,’’

that we would not go ahead with the

application.

SMEs are known as the engine of growth and they have their challenges. What should they expect? How are you going to ensure that their challenges are addressed?

One thing that I am going to say first of all is that most of the

companies/individuals usually expect more financial advisory

services from the Bank because BOI is really good when it

comes to that type of thing. Secondly, efficiently run credit

administration from the Bank and also access to the Bank’s

market intelligence report that will aid and guide businesses to

making sound business decisions. Also, the way things are now,

we ensure that there is efficiency in the reduction of downtime

in terms of loan application, review and disbursement to some

of the bankable projects.

You know there are lots of projects, some of them are good,

some are not. But a lot of them are good. But then, we will not

be able to address all the bankable projects because we get a

lot of applications. But we will ensure that we do whatever it

would take, within reason, to ensure that we address some of

the bankable projects. But again, I must emphasise that BOI is

one of the best-run banks in the country. So, while there are a

lot of issues to address, there are also a lot of advantages that

these SMEs and businesses can come to expect from the Bank of

Industry.

Power remains one of the factors affecting manufacturers. As someone who wears the shoes and knows where they pinch, what is the way out?

In fact, power is one of the biggest challenges in our country.

With a population of 170 million people, with 4,000 to 5,000

MW capacity, it is not acceptable. That is the honest truth.

Again, I must commend the government for doing what they

are doing right now in terms of the privatisation of the power

sector. I think the government is on the right path, doing quite

well, but we still have issues. For example, 4,000MW is not

enough for a state. But what government is doing now is good.

But one thing I must add is that the government must invest

heavily in the gas infrastructure because I think that is the next

big thing.

And I will give you an example: there is no country in the

world that is developed without steel

development. But for you to be in

that kind of sector, you would need

a lot of power and gas, and those are

two key ingredients that must be in

place before you can really develop.

So gas is an area where, since we

already have it, I think we just need

government to invest very heavily. If

you want to do steel, for you to be

able to put up a steel plant, you must

have gas and iron ore. We have iron

ore in Nigeria and we have the gas.

For example, if you’re setting up a steel plant of about 1

million tonnes, you would need about 200-250MW of power,

you would need between 150,000 to 200,000 cubic metres of

gas per hour to be able to have your fully integrated steel plant,

which is from quarry, mining to domestication, palletising, right

down to the downstream of the steel production. So for you to

achieve this, you must have power and you must have gas. We

have gas, it is just for us to have the infrastructure to benefit

from it. Today, if you are looking to have 200,000 cubic metres

of gas per hour, that is over 6 million standard cubic feet per

hour and for you to have that, I think it is going to be really

challenging.

So I think government should invest heavily in gas

infrastructure before we would be able to get to the promised

land and I am happy to note that the government is working

quite hard with this hybrid project, AKK, that is the Ajaokuta-

Kaduna-Kano pipeline project, which is going to cost quite a

lot of money, but I think if that is done, it will reduce a lot of

the pressure on the power infrastructure in the country. Yes,

Just before I was re-appointed as the BOI

chairman my company applied for a facility from

the bank. I directed my people to withdraw the

application immediately.

BOI IMPACT | 23

it is true that we have challenges, but I think government will

definitely do a lot more. If you look at all the state governments,

especially Lagos, we have quite a bit of gas here in Lagos, most

of the industries/factories here, you find them having their own

captive power plants, which is not good.

We have a cement plant in Edo, which we are

commissioning either by the end of this year or early next year.

It is costing us almost $100 million just for power, because we

are putting up a power plant and we are building a pipeline to

enable us to get the gas ourselves to our site which is about

32km of pipeline…so the challenges and the issues involved in

putting up that pipeline, I must tell you, it is crazy!. We have all

sorts of issues. But we have to do it, because if you don’t do it,

there is no way we will have the power. So these are some of

the issues, which is why the government must do something

because without it, there is no way we can develop. But I am

happy to say that government is giving it the desired attention

and maybe very soon, that is will be taken care off.

Should this be driven by government or the public sector? Well, it depends on how you look at it. Infrastructure is

quite an expensive aspect of this kind of thing (because of

funding), and I agree because it is possible for the private

sector to be involved, but then again, the government needs

to look at issues, because the pricing of the gas is an issue. A

lot of people do not want to invest because they believe that if

they do and with the price being regulated by the government,

they feel that they may not be able to make any money out of

it, so they are dithering. But I think the government is doing

something about it. But now, I think more people are in gas

infrastructure. We just have to do it. Otherwise, it would be

chaotic for us in the real sector.

Considering your wealthy background, how are you going to help more Nigerians to become entrepreneurs, self-employed, job providers instead of job seekers? I am sure a lot of Nigerians just look at you and they think you started wealthy. How will you assist such people, even though they may not come to you, but by reading what you are going to say now, how are you going to help them?

First of all, let me say that it is not easy and again, this is

not a task that BOI can solely handle. But then again, what we

can do is try and support most of these aspiring companies/

individuals by assisting them, by advising them, by ensuring that

we give them facilities to support them in a bid to ensure that

we support local content, and boost local patronage of Nigerian

q&a

I think more people areinvesting in infrastructure.

We just have to do it. Otherwise, it would be

chaotic for us in the real sector.

24 | BOI IMPACT

companies, because you know, one of the problems that we

have is that sometimes you see a lot of disparity between local

and foreign goods in terms of pricing.

For example, if you look at the issue of cassava, the

government through the Minister of Agriculture is trying to

get companies, especially flour mills, to use cassava flour as a

strategy to boost the purchase of our cassava. But if you look

at the pricing, you see the price of the cassava flour which is

locally produced is almost double the price of wheat which

is imported. So there are issues there, which we must look to

address so that we can encourage most of the producers and

promoters here. So I think we need to do more so that we

can patronise Nigerian companies and encourage them. It is

quite a bit of work, but I think we are getting there. You know,

quite a bit of the agencies in government are really trying

hard to achieve this. So it is not just BOI, but I think agencies of

government in Nigeria need to sit down together to see that we

address some of these issues.

If you have to advise a young person who wants to become an entrepreneur, what would you advise that person?

Work very hard. It is not easy right now, because you see,

access to funding is the issue. Even if you have a good, brilliant

idea all set up, for you to get access to funding in Nigeria

today is very difficult, especially if you are a start-up. So to me, I

believe that one must really work very hard. And then the good

thing is that we have banks like BOI and other banks that are

thinking like us are there to help, but it is not easy. Despite this,

one must have to work very hard. But I believe that if you have a

good idea or talent in Nigeria, you should be able to make it.

How is doing business in Nigeria?Nigeria is probably one of the best countries in terms of

doing business – and even though this is my personal opinion, I

am sure that there are a number of people who will agree with

me. Nigeria is one of the best countries to do business in terms

of return on investment. And most of these companies, look

at MTN, for example. At the time MTN came to Nigeria 10, 11

or 12 years ago, companies like Vodafone and others were not

even interested to come to Nigeria. But a few years after, they

were ready to pay more than double what they would have

gotten the licences for, and today, Nigeria is probably MTN’s

biggest revenue market. They are making a billion and a half,

two billion dollars from Nigeria. Nigeria, because of the sheer

number of people, we have 170-180 million people, we have a

growing middle class, and purchasing power is increasing, so

any foreign investor that knows about Nigeria will want to be

in Nigeria. So for me, I don’t even need to tell you, those who

know they know.

For example, look at cement. We have 170-180 million

q&a

Even though this is my personal opinion, I am sure that there are a number of people who will agree: Nigeria is one of the best countries to do business in terms of return on investment.

BOI IMPACT | 25

q&a

people. In Nigeria today, there are three main companies that

are into cement production: Dangote Group, Lafarge and BUA

Group. Out of these three companies, Dangote is by far still

the largest in terms of production, but it still is not enough

because of the capacity that we have in Nigeria today. We have,

maybe – and I am talking in terms of production capacity, not

installed capacity – 23 to 25 million tonnes in total. Compared

to our population, where we need about 150 kg per head, we

have probably the lowest rate of consumption anywhere in

the world. This is the reason why cement is selling at N1,400 to

N1,500 per bag ex-factory.

And I can tell you today, the cost of production of cement

in Nigeria is about N700 per bag, because the biggest problem

you have today in Nigeria in terms of production is power. That

is why you can go and import cement for $50 a tonne from

Europe or from China or anywhere else; $50 a tonne is N400 per

bag, because one tonne is 20 bags, and $50 times 160 is about

N8,000, and the companies doing this are making money. And

if you are able to buy cement at N400 per bag in Europe, with

all their high cost of production, high labour cost, etc, imagine

how much it would cost in Nigeria.

Fine, we have problems with power, infrastructure and what

have you, which is why the cost is as high as N700. I am saying

this because I want to see a situation where, more investors will

come - and I have been saying to my business colleagues - when

cement prices will come down to N1,000 or below and we will

still be making money. But we need more and more investors.

The only issues we have is appropriate funding. To set up a

standard plant, which is about three million tonnes per annum,

you need a minimum of $500 million. That is part of the issue.

But if you are able to access $500 million to set up a plant, in

two years, you will get your money back.

And this is going to continue for the next 10 years. Don’t

mind what people are saying. If you look at the demand and

you look at the population that we have in Nigeria, you will see

that the minimum in terms of consumption should be about

300 kg per head. Three hundred times 170 million, we will be

looking at about 50 million tonnes or thereabouts. So, we need

to double our production capacity. We have 25 million tonnes,

may be by the end of the year we add five million tons, so we

still need 20 million tonnes. This will probably take us three to

four years, by which time the demand will be a lot more than

Look at cement. We have 170 million people. In Nigeria today, there are three main companies that are into cement production, but it still is not enough...

26 | BOI IMPACT

q&a

that because demand is increasing.

There are so many areas. This is just one area. If you go

to agriculture, it is the same thing. If you go to steel, it is the

same thing. If you go to other industries, there are so many of

them, and foreigners know. We don’t have to tell them. The

only good thing about in Nigeria is that Nigeria is one of the

few countries in Africa that we have our indigenous people

in control of our economy. If you go to any of these other

countries, you will see that they have the Lebanese, Indians and

others in control. In Nigeria, yes we have foreigners and we

want them to come and invest, but we Nigerians are also part of

it and I tell you, the opportunities are amazing.

Challenges?The challenges are also there, there is no doubt about that.

The security issues are there but you know, high risk, high

reward. It is just that we have a lot of people. If you look at the

resources that we have...for instance, Kogi State, the entire state

is sitting on iron ore and limestone,

billions of tonnes. Look at iron

ore for instance, I mentioned steel

earlier, do you know that the two key

ingredients you require to set up a

steel plant, iron ore and gas, we have

them in Kogi State, or at least one of

them, iron ore, we have in Kogi State

and the gas can come from other

states.

As a country, we have those

two major ingredients. Not many

countries in the whole world have

those two ingredients. The largest

steel producer in the whole world, which is China (they produce

half of the world’s production [output]), worth over a billion

tonnes or thereabouts, they import all their iron ore.

In Nigeria, we have the iron ore and the gas, so if we are a

bit more serious about harnessing these resources, we will get

there. But I appreciate that some of these projects are quite

capital intensive. To put up a steel plant with the production

capacity of one million tonnes will cost you about $1.5 billion,

but then again, these are things that we must do in order to get

to where we need to get to. But if you are able to get the raw

materials, you should be able to get the funding.

As I said, Nigeria imports today, on the average, about $3-$5

billion of steel every year, because of the oil industry. So if you

are able to set up a steel plant in Nigeria, even if you spend $1.5

billion, you should be able to cut down on your foreign usage

by about 50% every year. So in no time, we could even stop

importing steel. And I am talking about specialised steel, such

as pipings, you know the oil industry uses that type of steel, but

we can do them, because the quality of the steel (because for

you to get that required type of steel), it must be from a fully

integrated plant. You cannot be using steel that you made from

scrap and most of the steel plants in Nigeria are mainly for long

products and they use mainly scrap to make the steel. There

are some that are importing billets but what you need is a fully

integrated plant that can take the process from iron ore to the

finished products.

These are some of the things that we need. So the

opportunities are there, but access to funding is key. That is why

it is important for government to assist by ensuring that there

are enough intervention funds for most of these major projects

because they are key and there are so many others that we can

also talk about. Back to your question, I believe that foreigners

know that Nigeria is a good investment destination. That is

why they are here all the time. And that is not just with the oil

industry. Anything to them; they know.

Let’s now know more about you....Abdulsamad is just an ordinary

Nigerian businessman, working

hard, striving to put up industries

and factories as his contribution to

the economic development of this

country. And I believe in Nigeria, and

again, this is a place that I know that

opportunities are so many. If you can

have the idea and access to funds,

there are so many things that you can

do. So I am just here, trying my best

to see that I put up industries and

set up companies to be able to get

people to work.

What is your life mantra?First of all, to be honest, I am a shy and quiet person. I shun a

lot of publicity. I believe that all of us should work really hard to

help our people, our country, and do whatever we can to make

sure that our country or people succeed.

How about your views about life, your mentors, favourite books? Parents?

Maybe the likes of our founding fathers, the late Sardauna

of Sokoto, Obafemi Awolowo, Herbert Macaulay, Nnamdi

Azikiwe…I appreciate those people a lot because they lived and

died for this country.

And I must add that my father is somebody I still appreciate

a lot. Thankfully, both my parents are alive at my age. There are

not many people of my age who still have both parents alive. So

I want to appreciate my dad, he has really tried for us and he is

one of my greatest motivation.

Abdulsamad (Rabiu) is just an ordinary Nigerian

businessman, working hard, striving to put up industries and factories as his contribution to the economic development

of this country.

BOI IMPACT | 27

q&a

28 | BOI IMPACT

GIVING BACK. CREATING JOBS. BAKING BIGGER CAKESA consummate banker, Mr. Rasheed Olaoluwa was until 19 May 2014, when President Goodluck Jonathan appointed him Managing Director/Chief Executive Officer of Bank of Industry (BOI), the Group Chief Executive Officer of UBA Capital Plc. In fact, he led the expansion of UBA from a one-country institution to 19 countries over a three and a half-year period.

His appointment was hailed by financial and economic experts as an example of a “round peg in a round hole.” (See profile at “MEET THE BOARD”).

BOI Impact’s Editor Hadiza Olaosebikan and her team, engaged him for a Q & A on his plans for BOI. Sit back, relax and enjoy the interview.

BOI IMPACT:L Let’s start by asking you what your appointment as the managing director of the Bank of Industry meant to you when it was announced.MD/CEO: Thank you very much. It means a lot. After having

spent over 26 years in banking, I believe that it’s time to give

back to Nigeria – in which I have thrived over the years. I see

the platform of the Bank of Industry as a veritable one to really

add value to the society. And the way I am going to do that is to

bring the totality of all the experience I have gathered over the

years to bear on running of BOI with a view to helping to create

millions of jobs for Nigerian youths.

Creating millions of jobs sounds like a vision that you have.

How do you plan to achieve that? Well, in a number of ways. For instance, one of the areas I am

really going to focus on under this administration is agricultural

processing because I believe very sincerely that’s an area where

Nigeria has very tremendous advantage. We have many crops

that we harvest at different times of the year.

Essentially, what we need is to organise ourselves for

processing these commodities into different products. Right now

we pay a lot of money importing food that we could actually

process locally in Nigeria. A lot of the raw materials used in

our industry can also be obtained locally; we only need to add

value to the agricultural products. Then, I think some of the

basic ingredients are beginning to fall in place, for instance,

the Federal Ministry of Agriculture and Rural Development has

identified a number of veritable locations for people to cluster

for agricultural processing.

These are the kinds of initiatives we will like to follow on.

I believe that through this we can actually create hundreds of

thousands of jobs in every state. And luckily for Nigeria, every

state has got three, four, five products that they can focus on. So

even at BOI, what we can do is, let’s even identify the top three

products for every state and there is so much that we can do.

Most banks shy away from agric funding or anything that has to do with agriculture. And that’s the area you say you want to focus on. Do you see any threat to this?

I understand where the banks are coming from. Agric

processing, call it a large farm, there is a style to doing it. I think

that what we have leant in the last four years or so since the

appointment of the current minister of agriculture is that the

style to doing agric is professional and I believe that if you follow

the value chain, if you follow the value-added process, there

are ways to which you can add value to agric products. It can be

successful; it can increase the chance of success, and that’s what

we are trying to do.

Let’s take a single crop and look at the value chain.For instance, let’s say cassava. I know that people have

spoken a lot about cassava bread. We can process raw cassava

into cassava flour, which can then go into the flour milling

process. In addition to just cassava flour, even if we take gari

that we eat, right now it is produced by these women who are

in rural locations, who use large frying pans to produce at very

micro scale. There are complex plants that we have identified

at BOI that you can procure at five million naira. So you can

do it on a bigger scale. So we can actually produce a lot of

products from cassava, so there is cassava flour for bread; there

is gari, which is a staple in Nigeria; there is syrup, which is a raw

material that we can use in industry. So we can identify a lot of

farm products and derivative products that can be made by just

small-scale industries in rural locations.

q&a

BOI IMPACT | 29

Cassava Bread development is one of the areas where the president will be expecting monumental results. How far have we gone on this?

Yes, we’ve gone very far. The Federal Ministry of Agriculture

put together a N3 .4 billion fund for the Cassava Bread initially.

There is a N1.1 billion for grant and the balance of N2.3 billion

loan. We’ve actually more or less approved most of the loans

to many beneficiaries. But what we are doing is to complete

the documentation so we can complete the disbursement

of the loan. I think in another month or two, we would have

fully disbursed on that particular initiative and I believe it is an

initiative that is commendable in the sense that all the money

we’ve been spending in terms of foreign exchange to import

wheat, it will help reduce such expenditure in foreign exchange.

You come across as being very passionate about ensuring that BOI’s impact is felt in all sectors of the economy, especially in the agricultural sector (that’s what you are talking about now). What drives this passion?

Passion is

energy. You know,

when you focus

on something

that gives you

excitement,

something you

are excited about,

it’s almost second nature to me. I have always been a very

passionate, professional banker right from day one. If you

believe in what you are doing, if it’s worth doing, and you have a

strong passionate view about the picture, it’s just …

During the inauguration of the Board by the Honourable Minister of Trade and Investment, he challenged the Board to consider new funding models, particularly in the areas of access to finance. What are your thoughts on this?

Yes, we are doing so in many ways. First, in terms of the

approach to lending to SMEs, we have looked at what we have

internally, the current process and (we have seen that) there

is an obvious need for improvement, in terms of making the

process more seamless, making the process more efficient,

cutting down a lot of the red tape. I believe in the next few

weeks or maximum a couple of months, our stakeholders, or

customers will begin to see the impact of what we are doing to

improve that process. Also in terms of engagement, one of the

things we found out is that the bulk of applications we receive

MSME’s do not usually meet our standards. So we spend quite

a bit of time, going back and forth, trying to ask questions here

and there, trying to fill the gaps, and so on and so forth. This

is why we decided to shortlist a number of people in all the

states of the federation, who will serve as what we call Business

Support Service Firms. These are people who are engaged with

the MSMEs in the various Local Government Areas in the state,

people who are closer to the (prospective customers); who will

help them package the proposals so that by the time they get

to BOI, they have what we call a bankable proposal. We believe

that will hasten the process. That will also increase the chance of

success for the MSMEs.

But will it not increase the costs they incur? Since these people are coming in as consultants , will that not affect their income?

That’s an issue that has come up in our discussions of late.

And the way we are looking at it is two-fold. First, in terms of the

overall cost to the SMEs, we will take certain steps to ensure that

overall cost does not increase. But beyond that, the advantage

to the SMEs is that by using those firms you are increasing your

chances of success. Rather than come

directly to us and having the risk

of having your proposal declined,

or having to go through a lengthy

process of six months and more, you

can have to go through this one to

package a proposal that can have a

good chance of success.

Currently, BOI has seven Zonal Offices including Lagos, and you have always spoken about

deepening the bank’s credit delivery process and increasing access to its loans, but feedback from customers indicate that seven offices are insufficient. Would locations be a stumbling block? And wouldn’t increasing zonal offices impact on overheads?

Well, as you are aware, Bank of Industry is a national

development institution. And when you say ``National’’ in

Nigeria today, you mean the 36 states of the federation. So

it’s quite obvious that having six or seven zonal offices is below

the mark. One of the corporate strategies we want to have is to

have offices in state capitals. Eventually we are going to be in

every state capital, but I think we are going to start with those

states where we already have partnerships. We have signed

MOUs with a number of state governments and will like to start

with those and by the time we are done with the ones we have

now, a lot more states would have signed MOUs with us and

then eventually we will be in all the state capitals. That’s the only

way to stay in touch with our customers in all the states of the

country.

What happens if some governors refuse to sign the MOU?That will be very unfortunate. We believe that the state

q&a

(Banking is) almost sec-ond nature to me. I have always been a very pas-sionate, professional banker right from day one

30 | BOI IMPACT

government has the federal government agenda as well. We

have the same objectives. We want to grow the industry. We

want to support them. That’s the only way to create jobs; that’s

the only way to create wealth. And I would be very surprised

if any state government would not really align with these

objectives. So I am hopeful that we will have a scenario where

every state government would be represented. However,

whether or not every state is represented, at the end of the day,

BOI will like to be in every state capital.

What advantage will this give to BOI to be in every state capital?

First is staying close to our number one stakeholder: our

primary constituency is the SMEs and the small-scale industries.

So, by being in every state capital, we are staying closer to them.

Secondly, it is also in our enlightened self-interest. When we

give out loans to people in all these states, and we have offices

in state capitals, we are closer to them. So we can monitor

what is going on, how the loans are

being utilised, how the loans are

being collected so we can ensure that

performance is guaranteed.

Development Finance Institutions are usually set up to drive government’s agenda . Bearing this in mind, Mr. President recently launched NIRP and NEDEP. How can BOI make this work efficiently?

I think those two documents -

the National Industrial Revolution Plan (NIRP) and the National

Enterprise Development Proramme (NEPED) –are well-crafted.

I think the NIRP supports the industrial sector, and NEPED

supports the MSMEs. Those two documents are our focal points

of our drive to transform ourselves as the Bank of Industry. The

role of the Bank of Industry as enshrined in those documents ,

providing finance for the SMEs and so on, and that’s why we are

putting in our best. And we are engaging all the stakeholders,

engaging in collaborative efforts: there is the NRC, there’s the

Industrial Training Fund, there is there Capacity Building, there

is the Small and Medium Enterprises Development Agency of

Nigeria that is also involved in capacity building and also some

kind of access to market initiative. So we are working together

to ensure that we achieve success.

We recall also that the new Central Bank of Nigeria governor at the start of his tenure said he would give priority to development banking on the front burner. What are your expectations in working together with the CBN to accelerate the nation’s development. Analysts would wonder if there would be duplication of resources. What are your thoughts?

I have had to discuss this matter with Governor Godwin

Emefiele. He has very laudable development agenda, which he

put forward in his maiden address. I believe that our roles are

actually complementary in the sense that whereas the CBN can

set up a fund for intervention in a critical sector, where the BOI

properly manage those funds to make sure they are secure, they

are disbursed and properly channelled to ensure that they come

back in terms of recovery.

How should the Bank of Industry lessen the burdens borne by industrialists and SMEs, particularly power and access to finance, as it were, while ensuring that its investments are not at risk?

There are always challenges in the environment. And I think

that BOI as an institution cannot even dare to address all of

them. But what we can do is to engage with other arms of

government in collaboration to address some of the issues. For

instance, the issue of power that you raised, I was at a meeting

of the Presidential Advisory Committee on the Nigerian Industrial

Revolution Plan,

where there were

two items on the

agenda of the

meeting. One

was power, the

other was access

to finance. That’s

how do we fund

the Plan? And we

had several parties,

several stakeholders, including the Minister of Power. These are

forums that we can really use to address some of these issues.

You also have the other forum where you have an engagement

between the organised private sector and the government, in

terms of the Nigerian Economic Summit Group. That’s another

area where we can discuss and engage and look at ways we can

solve these problems for the business environment.

How do you hope to address the perception of BOI funds as `national cake,’ especially since this has potential implication on quality of the bank’s risk assets and eventual implication vis-à-vis non-performing loans?

First, I think we all agree that BOI is a development finance

institution. And development finance banks are all about

promoting the real sector of the economy, making its long-term

loan at very low interest rates, helping to create jobs, helping the

pace of industrialising the country, so that the developmental,

social impact can be felt. At the same time, we must ensure

that the institution is sustainable. And one of the ways to kill

an institution is, you grant loans and you cannot collect them

because the customer refused to pay. We must make it clear that

when we lend, those loans will be repaid.

q&a

I would be very surprised if any state government would not align with (our) objectives to create jobs...to create wealth.

BOI IMPACT | 31

I believe that if we play our role in terms of collection, in

terms of loan recovery and our legal department does their job

well in terms of proper documentation, people will not come

with those kinds of expectations you are talking about. But, if

people have come and they displayed those attitudes you are

talking about and they’ve gotten away with it, well they will be

entitled to think, `Oh, this is one way to share the national cake.’

But Bank of Industry is not a forum for the sharing of national

cake. There is no such cake here. We are actually here to help

Nigerians bake bigger cakes for us to enjoy.

At your media briefing on 11 July, 2014, you highlighted ``Domestic and International bond issuance’’ as one of the options available to BOI to raise long-term capital to meet its funding requirements. When are you planning to do the first tranche or a bond sale, locally or internationally?

When I mentioned the possibility of us having a domestic

and international bond, it is borne out of what is the best

practice. If you

look at successful

development

finance institutions

all over the world,

at the initial stage

they are 100 per

cent government-

funded, but as they

grow and develop

and became bigger

in size, they’ve always found other ways of funding themselves

. It’s like you are a child and your parents feed you, but as

you grow up and graduate and you get a job, you begin to

fend for yourself. That’s how it should be. So, a development

finance institution is not meant to be spoon-fed forever by the

government. At some point in time, we should become semi-

independent and ultimately we should become independent.

Now, it wouldn’t happen automatically. There a lot of

things that we must do, to become able to raise funding from

other sources. So, our risk management has to be grand. Our

governance practices have to be the best; we must be well-

rated- both international and domestic ratings. Now, these are

the key steps that we are taking before we begin to talk about

raising fund through a bond (sale). Hopefully in the next one to

two years, we will be closer to that point.

Do you have any specific plans for women and youth population, seeing they are at a disadvantage?

Thank you for the question. As of today, we have the

Women Fund , which is very small indeed – N90 million and

it’s fully utilised. But right now we are in discussion with the

Federal Ministry of Women Affairs with a few to establishing a

bigger fund for women. So we are engaging with the Ministry

of Women Affairs, we are engaging with the Central Bank to

see how we channel these funds. But I must warn that being

a woman in itself is not a sufficient qualification for getting

a loan at BOI. So, if you are a female entrepreneur and you

demonstrate that you have a good business model, I think

that is more important. With a good business model, we will

support you, whether there is a women’s fund or not. So you

don’t need to worry if there is no women’s loan like the N90

million; it’s very small and already exhausted. But don’t worry.

If you have a good business model, and you are a female, you

have nothing to worry about. We will support you.

What about the youth?Yes, especially about the fresh graduates. We are actually

in the process of developing something for them to actually

take off right from their NYSC time so that it will be more like

from university to business. It used to be from university to

employment market. But it will be

a gradual process of taking them

through capacity training programme,

entrepreneurial training. We are still

packaging and I believe it’s too early

to talk about it. At the right time we

will make a public announcement.

There are usually different expectations from the rank and file when a new person assumes the helm of affairs of an organisation.

What should the staff of BOI expect from you?That’s a very interesting question, in that I believe that what

they should expect from me is what they should expect from any

CEO. We have a mandate at Bank of Industry and at any point

in time I want to be sure that we are focused on that mandate.

If whatever they are doing is in alignment with that mandate,

we have no issues and I believe we will work very well together.

The only time that we can have a problem is if people are

working against that mandate. As long as people are working to

realise this vision, we are ok. That is what I am working for 24/7.

At the first meeting you had with the staff, you asked a question about the number of books someone had read in the last four weeks. You seem to be an avid reader. Tell us the kinds of books that you read, and which of these books have influenced your career, your professional life.

Wow! Interesting. Yes, I read a lot of books. And that’s

because I have worked with people who also read a lot of books

and so if you don’t also read a lot, you are going to be left far

behind. Let me try and cast my mind far back to some books

that really made a lot of impact on me. But before I do that

let me say that I don’t usually like motivational books. Okay.

q&a

BOI is not a forum for the sharing of national cake. There is no such cake here. We are actually here to help Nigerians bakebigger cakes for us to enjoy.

32 | BOI IMPACT

I like books that talk of hard subjects. Books that talk about

entrepreneurship; books that talk about economic development

issues, that talk about customers and customer service,

innovation, and technology. Those are the kinds of books that

get me very excited. I read a book in 1995, called Competing for

the Future. That’s one of the best books ever that I have read.

Competing for the Future. It’s a bestseller. Essentially, it’s a book

that summarises what happens in our environment and we see

it every day. The summary of the book is that as a business, you

don’t compete based on today’s scenario. You should try and

project what’s going to be the scenario five, 10, 15 years down

the line and get yourself ready to compete in that environment.

So, for instance, companies that fail to do that, end up

becoming obsolete. May be I can give an example.

I remember in the late 1970s and early 1980s, we had the

Polaroid camera , where you snap a picture and you get it

instantly, right? That was the in-thing in those days. But it was

soon overtaken by Kodak. And then

Kodak started with 16 exposures ,

then it got to 32 and they got to the

peak of their innovation, they kept

thinking. I remember in those days,

it was the 32 exposure tape, after

30 exposures, you started hoarding:

I have three exposures left, I don’t

want to use them yet.

But some other people came up

with a digital camera. You can snap

endlessly. With 1000 exposures, you can delete and re-use it.

That’s how the camera business has progressed over time.

So, if you are operating in that vegetable mode, today you are

a dinosaur. That was something I learnt from that book and I

have applied it since then up till today. I can tell you about a

number of other books I have read, but you get the point I am

making.

Why do you say you don’t read motivational books?I believe we have enough motivational books. If you are a

Moslem you can read the Quran, if you are a Christian you

can read the Bible.

We want to know who is Rasheed Olaoluwa? Well, My name is Rasheed Adejare Olaoluwa. I studied civil

engineering from the University of Ife, now Obafemi Awolowo

University. I am a chartered accountant. I have Executive MBA

from the International Business School in Barcelona, Spain. I

have worked for about 26 and a half years and the bulk of this

was in banking, with about four years in professional services.

I have done almost everything in banking, from consumer

bank to retail bank, commercial banking corporate bank, to

treasury, to financial control, to asset management, to currency

trading. I have done almost everything. And I have worked in a

number of banks, including GTBank, where I served six years;

Ecobank where I served four years, and most recently, UBA

, where I served over eight years and I was a member of the

board at UBA as an executive director. I was the pioneer CEO

of UBA Africa. I led the expansion of UBA from a one-country

institution to 19 countries over a three and a half-year period.

I was also the pioneer CEO of UBA Capital Plc, which was the

asset banking division of UBA and later become independent,

and then was listed on the Nigerian Stock Exchange.

I am married and we have two boys and two girls. My first

daughter graduated just two months ago.

From engineering to banking, why? How did you do that?It’s a long story, but the long and short of it was that after

my first year in the university, I stopped having interest in

engineering. I actually wanted to change my course, but I

couldn’t because my results were so good that my department

didn’t want to

release me. They

were willing to

take me in other

departments, but

they were not

willing to release

me where I was

so I got to a point

I said let me just

finish it. So even

as I was in that department, I knew I was not going to practise

engineering. And so I was looking for the first opportunity to

be able to do something else.

Why I didn’t want to do engineering? Don’t ask me. I don’t

know. It’s a matter for another day.

How do you relax?How do I relax? That is if I relax at all. Well, I like cycling –

that’s bicycle. That’s what I have done from my school days.

That’s the type of sports that I like to do. But I like football also.

I don’t play it as actively as I used to when I was in school. I

support Arsenal. Yeah! Gunners for life! (General laughter).

Is anything else that you want us to know?I just want Nigerians to know that I am here to get their

backs. Am here to support them. I am here to fulfil the

mandate of Bank of Industry. The only reason we come to

work at Bank of Industry is to support small-scale industries; to

support manufacturers, and from morning when I resume till

evening when I close, that’s the only thing that goes through

my mind. And they should rest assured that we are pursuing

that objective and will deliver by God’s grace.

q&a

I like cycling. That’s what I have done from my school days. That’s the type of sports that I like to do. But I like football also. I don’t play it as actively as I used to.

BOI IMPACT | 33

do not and will never sell the Chinese

imports. “I won’t do that,” Somuyiwa

says, outlining an interesting business

philosophy. “If my customers can’t find

the original here they shouldn’t be able

to find it anywhere else.”

“Everything I sell is 100 per cent dyed,

and I can guarantee the durability,”

says Ogunfidodo. “The imitations are

cheaper, and tend to earn greater profits

for merchants. But for me it’s not about

the money, it’s about professionalism.”

But the disruptions from China and

Customs hurdles pale beside local

problems – electricity, the government’s

import policies, and the terrorist

insurgency in parts of Northern Nigeria.

Somewhere outside every merchant’s

store is the obligatory power generator

that keeps the lights and fans on,

and drains operating capital. Nigeria

continues to generate only a fraction

of the electricity it needs, necessitating

lengthy spells of load-shedding. Even as

Government may have considered this

protective, a ban on the importation

of textiles deprives the adire makers of

easy access to a critical raw material –

the bales of white fabric that go into

dyeing and emerge as adire. There’s, of

course, a thriving smuggling industry

that fulfils local demand, but the

unpredictability around it is unhealthy

for business. The adire makers note that

if local production were substantial,

a ban on the importation of the input

fabrics would be justified.

During the 1970s and 1980s, Nigeria

teemed with textile factories that

supplied the local and West African

market. The late 1980s were “the golden

period” of Nigeria’s indigenous textile

industry – comprising cotton farmers

(cotton being the primary raw material)

and textile manufacturers – according to

a report by the National Association of

Nigerian Traders (NANTS). During those

years, the industry grew at a yearly rate

of 67 per cent, and was believed to be

the second largest employer of labour

in the country, after the government

bureaucracy. Its 250 factories accounted

for a quarter of the workforce in

Nigeria’s manufacturing industry.

A difficult economic spell in the late

1980s – characterised by a tightened

liquidity regime, massive devaluation of

the naira, and an aversion for subsidies

– however shuttered most of them;

by 2007, those factories were down to

fewer than 30.

In recent years, there have been a

number of government efforts aimed

at reviving the industry, by providing

“intervention” funding which has

enabled the re-opening of some of the

closed factories, and provided a lifeline

to cotton farmers.

If electricity and the hostile policy

and economic conditions can be said to

be historical challenges, the problem of

terrorist group, Boko Haram, is not. It

first flared up enough to attract national

attention in 2009. After what seemed

like a decisive victory on the part of

the Nigerian government, it simmered.

And then in 2011, shortly after the

general elections, it emerged in an

incarnation far more virulent than the

first. It has claimed thousands of lives,

and displaced hundreds of thousands

of persons. In the worst hit regions (in

Borno State), life has ground to a halt

– farming, trading, schooling have all

been badly hit.

Many of the adire merchants’ biggest

customers are from Northern Nigeria,

regularly making the journey of several

hundred kilometres down south to buy

bundles of fabric for resale at home.

Since the insurgency started, “sales have

dropped drastically,” says Ogunfidodo.

“Most of our customers from Maiduguri,

Adamawa, they no longer come. Boko

Haram is not a Northern problem –

that’s a lie. It affects most people in the

market.”

However, business has to go on. One

way or the other.

How to Make Adire A 9-STEP GUIDE FOR AMATEURS

1. Soak the (white) fabric in cold water to soften it.2. Apply the design to the fabric using one of the available

‘resist’ techniques. 3. Dissolve the dye in hot water to which has been added

caustic soda.4. Repeatedly immerse the waxed cloth in the soda-and-dye

solution, to allow the dye to take effect. 5. Dry the cloth. (Many of the artisans dry in the open air)6. Remove the material used to create the ‘resist’ patterns –

string, thread, stones, seeds, paraffin wax, etc. (If paraffin wax is involved, immerse the dyed cloth in hot water or petrol to dissolve and remove the wax).

7. Dry the de-waxed cloth, and starch it to stiffness.8. ‘Plank’ the dried and starched adire into smoothness. This

process traditionally involves laying it out on a wooden surface and beating it with a piece of wood. (An easier method may be ironing)

9. Carefully fold the planked material.

ADIRE PAYScontinued from page 17

special report

34 | BOI IMPACT

If you had asked Ocheni Simon about 13 years ago what he’d like to become, his answer would be: to do something great in the IT world. As a child, he recalls in

a chat with BOI Impact, he would disman-tle electronics and reassemble them. He also constructed toy cars with cartons and cans for children alongside well-designed art. Then entered “Uncle Charles” into his precocious life. Uncle Charles was Simon’s computer studies teacher at Saint Charles College in Simon’s native land in Ankpa Local Government area of Kogi State. Even as his Senior Secondary School didn’t offer computer studies, his enthusiasm didn’t waver. For his university education, he chose only computer science. In 2011, at age 23, Simon was graduated in computer science from the University of Abuja.

Today, computing has taken a back seat: Simon is now a micro-entrepreneur in food processing; precisely processing cassava into gari, a Nigerian staple crop made from cassava tuber.

What happened? In a way, it still has to do with Simon’s

love of bringing the imaginary into reality. During his mandatory one-year national youth service at the headquarters of the Ni-gerian Army in Abuja, he imagined himself as an entrepreneur and then went ahead to become one, based mainly on a hunch. Simon also wanted to guarantee that after his service year, he would not be financially stranded. What better way to do that than invest his N19,800 allowance in a profitable business. Selling gari, packaged in nylon sachets with kulikuli (a peanut snack popular in northern Nigeria) and sugar; peanuts and sugar and powdered milk added, depending on the taste of the consumer, his hunch told him, was the business. His customers would be the soldiers and their families and civilian

staff. Where to get the finest and highly demanded gari? Ijebu-Ode in Ogun State. Ijebu gari is known to have higher swelling capacity than the other varieties consumed in Nigeria. So, he took the trip to Ijebu Ode and came back with one bag. Back to Abuja, he turned his residence to a packaging cen-tre. He would add the extras and so began the business. On each bag, he allowed re-luctantly, he was making a profit of N10,000. The sale of each 50k bag took two weeks. Note, however, that Simon did what every serious person going into business does: tri-al. His first seed capital was N1,250, for four mudu of gari. A mudu will contain approxi-mately 200 grams of gari. It was after he was satisfied that the market was there, that he began to invest his NYSC allowance. He, of course, started with buying the 50kg bag.

“People were impressed, so I took it took it very seriously and even developed a pas-sion for the business,” said Simon. The Skills Acquisition and Entrepreneurship Department of the NYSC took notice of him during an entrepreneurship training. To celebrate its one year anniversary, it invited Simon and nine other youth corps members from other states to exhibit their products. For good effect, he branded his product. So, was born KASSO FLAKES “Soaking Wakkis.” At the awards for participants later, he and his co-awardees were advised to take the notch higher. The advice came from Mr Sun-ny Ekedayen, who was then the Northern regional head of the Bank of Industry (BOI) and had been at the event to represent the bank. (See: Why BOI is involved)

Now, Simon’s vision is to “feed the world.” As he put it, “my country is so rich in agriculture and if food can be taken care of, other aspects of the economy will be able to function better. I hope to be able to em-bark on the exportation of my products to

overseas, refugee camps, military troops on peace keeping mission etc.”

His company, Chenix Enterprises, was registered to carry out food production, supply, sales, consultancy and general con-tracting. Its primary business for now is gari processing and packaging. “We have plans to expand into other food products such as plantain flour and pure corn flour. These would require special machines for process-ing. Generally, we will go into commercial faming. But, these will come after paying up the loan of N3.8million that we got from BOI,” noted Simon. Tenor is 36 months, run-

UNCOMMONENTREPRENEURSHIP

focus

BOI IMPACT | 35

Why BOI is involvedBY SONNY EKEDAYEN

I met Ocheni Simon in 2013 at an awards ceremony organised by the headquarters of the National Youth Service Corps (NYSC) in Abuja where I represented the bank in my capacity

then as the Regional Head (North), during the burgeoning stag-es of the partnership between the NYSC and BOI.

The ceremony was to recognise and celebrate corps mem-bers who had distinguished themselves ‎ during the service year by dint of hard work and through the display of uncanny entrepreneurial skills. Simon was one of five recipients at the ceremony.

‎During my speech on behalf of BOI, I congratulated all the awardees, three of whom (Simon inclusive) were already employers of labour and encouraged and invited all of them to apply to the bank for funding assistance under the Micro Cred-it Scheme, pledging the Bank’s support. Of all the awardees, only Simon saw it through. Two others

came, made in-quiries and never showed up again. Under the bank’s guardianship, he was advised to reg-ister an enterprise. He would later meet all the other loan appraisal require-ments of the Bank including providing two acceptable guarantors (by the way, this proved a

daunting challenge for him because of his circumstance but he prevailed) be-fore he was availed funding under Kogi State Government/ BOI MSME Fund.

It must be said that Simon is a very determined young man who believes in what he is doing, it’s prospects and the opportunities. He also listens to advice and always ready to learn and make amends. Along the way he overcame a lot of obstacles and challenges that ordinarily could have put off average individuals but not Simon!

There is also something about his product: it is simple, not necessarily unique but uniquely packaged,‎ it is affordable, a necessity, resonates with most people and authentically Nigeri-an! The Bank of Industry is therefore very happy to be associat-ed with Simon and his pet project and we wish him well, fame and fortune as he follows his dreams.

Permit me to use this opportunity to reach out to the mil-lion other Simon Ocheni in this country to take a cue from his adventure to also follow and harness their dreams as the Bank of Industry is waiting to support and partner with them to their

destinies.

EKEDAYEN IS BOI’S AGM INTERNAL CONTROL AND AUDIT

ning till 2017. The enterprise, as at end of July, had 15 employees.

So, what will now happen to that IT world greatness? “I have not left the IT world,” Simon submits, “In fact I am planning towards digitalising my company. One good thing about com-puting is that you can always go for profes-sional courses at your time and get yourself equipped. So, I am not out of IT at all. Let’s just say that I am exploring agriculture in order to upgrade it to meet the global standard via IT experience.”

We believe.

Sonny Ekedayen

Ocheni Simon

36 | BOI IMPACT

Chances are that the tooth pick you

just used to untangle the stubborn

fish bone stuck in the crevice of

your molar was made in China.

Confirmed: it is. Is there really anything that

is not “Made in China?” Or, how else would

the country be known as the “Manufacturer

of the World?” Hold your breath and read

this extract from a piece on China in the

Royal Geographical Society: “About 80 per

cent of China’s exports are manufactured goods - textiles

and electronic equipment, and include toys, DVD players,

mobile phones, shoes, clothes, food products, sea food,

body jewellery, kitchen wares, etc. 50% of cameras, 30%

of air conditioners and televisions, 25% of washing ma-

chines, and 20% of refrigerators in the world are now be-

ing produced or assembled in China. China also produces

agricultural products and chemicals. China makes half of

the world’s cement and flat glass, and about a third of

its aluminium. In 2006, China overtook Japan as the sec-

ond-largest producer of cars and trucks after the United

States. Out of the world’s five busiest ports in the world,

three are in China.” You can now exhale.

To be sure, China didn’t get here overnight.

China’s industrialisation began on a significant scale

only from the 1950s, in the disastrous, yet economically

significant Great Leap Forward. This was the plan used

from 1958 to 1961 to transform the People’s Republic of

China from a primarily agrarian economy full of peasant

farmers into a modern society through agriculturalisation

and industrialisation.

Economic reforms along market principles later intro-

duced in 1978, and undertaken in two stages, proved that

China had learned from its past failures.

The first stage, in the late 1970s and early 1980s, in-

volved the decollectivisation of agriculture, the opening

up of the country to foreign investment, and granting

permission to entrepreneurs to start up businesses. The

second stage, which bears similarities to Nigeria’s current

state, involved the privatisation and contracting out of

much state-owned industry and the lifting of price con-

trols, protectionist policies, and regulations, although

state monopolies in sectors such as banking and petrole-

um remained.

Access to capitalThe private sector grew remarkably, accounting for as

much as 70 per cent of China’s gross domestic product

by 2005. From 1978 until 2013, unprecedented growth

occurred, with the economy increasing yearly by 9.5 per

cent. At the heart of this private sector-powered growth

was a focus towards lending to SMEs by the largest Chi-

Doing it like

China

insight

BOI IMPACT | 37

nese banks, coupled with a tight scrutiny on new bank

lending growth as banks were required to report new

lending growth every month to the China Banking Regu-

latory Commission(CBRC); as against quarterly reports in

previous years.

The SMEs gained competitive advantage by gaining

access to cheap loans with flexible securitisation, meaning

that though collateral was a key requirement, its defini-

tion gave room for more businesses to have access to key

growth capital.

Moody’s Investors Service, a leading global credit

rating agency, stated in a weekly credit outlook report

in March 2011, that the total amount of loans to small

businesses at the end of 2010 stood at 7.27 trillion yuan

($1.12 billion), or 24 per cent of total corporate loans.

Moreover, the loans to small business grew by 33.9 per

cent in that same year, while overall loan growth was a

more muted 19.6 per cent.

In Nigeria, the Jonathan Administration’s Transfor-

mation Agenda has seen quite a few policies pushed by

several institutions charged with executing Nigeria’s In-

dustrial Revolution Plan. In a similar stance with the 1950

and 1978 industrialisation drives of China, Nigeria’s Trans-

formation Agenda, powered by the NIRP, is premised

on the success of building four key sectors: Agro Allied,

Metals and solid minerals, Oil and gas industrial activities,

and Construction, light rail and construction services. The

Plan has been designed to focus on intensive low and me-

dium technology manufacturing with a hope to building

up core base industries that will form the base for more

advanced industries to thrive.

Like China, Nigeria plans to use its large market capac-

ity to deepen industrial capacity of local firms by using

the aforementioned sectors as technology drivers within

the economy. Like China also, there are several ongoing

drives to bridge the capital gap with MSMEs in Nigeria.

Recently, the Bank of Industry set up a micro credit

committee to solely consider MSME credits that are less

than N10 million, as the bank is largely focused on fund-

ing specific MSMEs that can add value to the economy

through manufacturing. Most encouraging of this effort

is the BOI’s value added proposition of appointing service

support firms, attached to microfinance banks, which help

MSMEs to repackage their loan applications, such that

when those applications get to BOI, they will be bankable

proposals, Call it a win-win for everyone involved – and

ultimately Nigeria.

In a separate but similar drive, the Central Bank of

Nigeria has instituted a N220 billion Micro Small and Me-

dium Enterprises (MSMEs) Fund that could be accessed

by entrepreneurs without the conventional collaterals

to make it easier for them to fund their businesses. In a

move set to open more MSMEs to this and other such

funds, the CBN is in the process of establishing the mov-

able collaterals system, in line with global best practices.

Like the BOI initiative, the CBN’s primary focus are MSMEs,

and as such has channelled most of the funds through

microfinance banks which have a more MSME focus.

If all these policies and plans are well-aligned, then in

no distance time, you should be holding your breath for

a dazzling report on Nigeria’s industrialisation in well-re-

spected journals. In no distant time.

insight

38 | BOI IMPACT

J O K E S

MPcstasyHR OFFICER: What is your name?MUZO: M.P SirHR OFFICER: In full, pleaseMUZO: Muzo PhiriHR OFFICER Your father’s name?MUZO:M.P sirHR OFFICER: What does that mean?

MUZO: Melvin PhiriHR OFFICER: Your native place?MUZO: M.P sirHR OFFICER: What’s that?MUZO:- Muchinga ProvinceHR OFFICER: what is your qualification?MUZO: M.PHR OFFICER: (angry) What is thaat?!!!MUZO: Mathematics Pro-fessorHR OFFICER: So, why do you

need a job?MUZO: It is because of M.P sirHR OFFICER: Meaning?MUZO:-Money ProblemsHR OFFICER: Would you explain yourself and stop wasting my time? What’s your personality like?MUZO: MP sir.HR OFFICER: And what is that?MUZO: Marvelous Person-ality

HR OFFICER: I see... I will get back to you.MUZO: Sir, how was my MP sir? HR OFFICER: And what’s that again?MUZO: My Performance.HR OFFICER: I think you have an MPMUZO: M.e.a.n.i.n.g?HR OFFICER: Mental Prob-lem!!!

SOURCE: FACEBOOK

M I L E S T O N E SBIRTHDAYSJuly • Bilikis A. Ayodele

– Finance• Sunday Ogundele

– Internal Control & Audit

• Yetunde Akamo – Strategic Planning

August• Lolo Kadafa –

Agribusiness • Seye Ologunja -

Internal Control & Audit

• Taiye Emagha - Treasury

• Ruseh Oghenekaro – UNDP AtRE Project

• Promise George - Strategic Planning

• Onome Imonyin-Omene – Human Resources & Administration

Nuptials• Amechi Nwanna

Akwari – Saturday, 30th August, 2014

B I R T H D A Y SJ U LY

A U G U S T

Onome Imoyin-OmeneRuseh Oghenekaro Promise George

Taiye EmaghaSeye OlogunjaLolo Kadafa

Yetunde AkamoSunday OgundeleBilikis Ayodele

BOI IMPACT | 39

PARTNERS: Kaduna State

Governor Alhaji Mukhtar

Ramalan Yero, left, and

BOI MD/CEO Rasheed

Olaoluwa, at the signing

of the MoU of N1b BOI/

Kaduna State Micro Small

& Medium Enterprises

counterpart fund for

the development of

MSMEs in the State at

the Government House,

Kaduna.

YES, WE AGREE: L-R:

BOI Company Secretary

Emmanuel Onoji, Man-

aging Director/Chief

Executive Officer Rash-

eed Olaoluwa, Kaduna

State Commissioner for

Finance Alh Samaila Aliyu

and the State Commis-

sioner for Commerce and

Industry Dr Joshua Sheka-

rau signing the MoU.

NASME VISITS

40 | BOI IMPACT