Ayo Alonge, [email protected]
The challenge of double digit interest rate on borrowings by small businesses remain insurmountable as many small businesses continue to struggle to keep head above the waters of Nigeria’s truamatic business terrain
In this interview, Olanrewaju Alade, the Chief Executive Officer of a fast growing telecoms venture, LT Telecoms, bares his mind on issues relating to how the key challenges faced by Small and Medium-scale Enterprises (SMEs) in the IT sector can be mitigated. Alade also commented on the need for government to make good and effective policies for business growth.
I did not just decide that I was going to start my own company. Let me talk about my employment life. I am a Civil Engineering graduate from Yaba College of Technology, Lagos.
With the advent of the satellite technology, towards the end of the twentieth century, I was introduced to a South African firm which came to partner with Nigeria and they started deploying Vsat technology. They took me up as a trainee and I happened to be the first Nigerian to join them. That was how I ventured into telecomunications. My employment was with the Nigerian firm. Gradually, my employment moved from the Nigerian outfit to the South African operation and I worked with them for about seven years. I grew through the ranks and became the Country Manager with operations spreading through the West Coast of Gambia to Cameroon. Later on, I decided to see what I could do for myself and that was how I started LT Telecoms. I must give credit to the South Africa firm for making me leverage on some of their assets when they were leaving the country. I took over some of their clients and that made business easy because we had a ready set of customers to service.
As I said, we leveraged on the opportunity given to us. But we didn’t fold our hands and go to sleep. With my experience, we plunged in and forged ahead. I am someone who believes in relating well with the environment. You must open yourself to new relationships. We were able to enter into a new partnership with some international companies. One in the US, another in Netherlands and another in South Africa. One of the companies have their major customer in Nigeria as MTN. We were appointed a partner to manage telecoms equipment for major companies and we also do that for MTN Nigeria.
The challenges are enormous as in every business. In terms of management, I could have some challenges but we all know how the business terrain of the country since the last ten years. The sector has it own challenges, not talking of the general challenges. You talk about overhead cost for power, security, and the rest. These are supposed to be taken care of by the government but you are left to provide all that yourself for your business to thrive. In advanced countries, all these things are there. I don’t have businesses outside but my friends abroad would always say they get a good support from the government of their host countries. Interest rate is single digit over there while we are paying a double digit here. You cannot do without borrowing in any economy. The level the economy is now needs a lot of stimulation and there must be a way of pumping huge funds into the business arena. If we keep producing and consumers don’t have the purchasing power, of what use is the production? The major thing is the ability to be able to produce and to buy. If I don’t have, I must borrow. If government goes to borrow because we don’t have enough, they spend and also create avenues for people like us to have access to funds. They have bailed out some sectors and even some states. Money must just flow. If they don’t have, then they have to borrow.
The telecoms industry is very big. Apart from telecoms equipment sales and services, we are also into internet service provision. If you look at the internet market now, the market is very large and the penetration is still very low. It is a case of having the sky wide enough for all birds to fly freely. We still have a long way to go though. Success is relative. It depends on where were you are coming from and where you are going. We are not doing badly compared to some other companies.
We all want to create a niche for ourselves and the business world is very competitive.
As much as we are all competing, we must also be very careful of how we compete. What I have been championing lately is this issue of pushing someone down to go up. I must run you down and destroy your brand by telling lies about your brand so that my own brand can be well known. God has so blessed this country with the population but the issue is that we all want to serve the same set of people. Nobody wants to break the new grounds. Basically, we want to break new grounds and look at where penetrations are not well spelt out. Our kind of business is capital intensive so you sometimes depend on loans. That makes it difficult for businesses to grow because it is like we are just working for financial institutions. You have your overheard. Soon, people may have to start looking for unconventional ways of doing business. I remember that there was a time we were trying to assess a loan to acquire a particular property and it was so difficult. I have friends in saner climes who would say it is never like that elsewhere. Once your input and output are measured as a company, you should be able to access loans freely. We just make things so difficult for ourselves in this country.
When I was to start the company, I was properly trained to be able to deliver according to the culture of my former company. My former boss would say we have two ways of doing things – the Nigerian way and our way. They believe that we have this careless way of doing things, whereas they pay attention to details. I can recall that one of my colleagues was fired simply because he didn’t do a neat job while sent to a site. For us, we train and retrain. We have our culture of doing things and you are taken through that training. Our system is self-cleansing. On you own, you can feel if you can meet up or not.
Policies for business development
Basically, our lives as Nigerians are overpriced. Consumers in this country are overpriced. Telecoms services are not adequately reaching people and people are paying so much, yet, not adequately being serviced. For example, you place a call and it keeps dropping and nobody compensates you. In saner climes, as mundane as that seems, it is important. Here, our psyche has been accustomed to make us think that that is too trivial. That is what consumer protection does. People should be compensated for that. If one million people place a million calls daily and it keeps dropping, you still pay for it without any compensation. We must also try to bring down the cost of purchasing technology in this country. That is the problem with penetration. Government must create a means of having people access technology easily and that would aid penetration.