Ayo Alonge, [email protected]
The Managing Director/Chief Executive Officer of Kresta Laurel Limited, Engineer Dideolu Falobi, believes that small business owners and investors alike can be better encouraged with certain incentives which include access to funding, especially for startups that have continued to thrive despite the lingering local and global economy crises.
Manning the affairs of an engineering and construction firm which installs, repairs and maintains escalators, industrial UPS, generators and all kinds of power systems, may have, however, exposed Falobi to the challenges that greet both small and large scale firms, as he fields questions bordering on manufacturing and its attendant happenstance. He also spoke on the business prospects in the mines and steel industry.
Background
Actually, we have partners from different companies in Europe who manufacture them. We are authorised distributors for those partners. We partner with the best all over the world and if you are not the best, you are one of the best. On a yearly basis, one of the companies called Kone looks at 57 countries and they have seen that we are among the best three. It is not just in terms of volume but also in the way things have been executed. We were also recertified.
Local manufacturing
Yes, it bothers me and it does not, at the same time. It bothers me by the perspective that we should have been able to manufacture some of them, if not all. It doesn’t bother me on the basis that it is not every country that is expected to be manufacturing these machines. There are some factors that play in terms of manufacturing them. One is the available market. Even in Europe, there is a lot of outsourcing. If we cannot manufacture, we should be looking at the direction of outsourcing. There has been the outsourcing aspect that has added into the system and we are working hard. The challenge we are likely to face is the cost of financing such. Power supply problem and also steel, which is the backbone of these products, should also be considered. If our mine and steel industry is not buoyant enough to give the raw materials needed for the production of these products, what would happen is that you are transferring the importation somewhere. It is what you should know. We have the Ajaokuta Steel, Delta Steel, Osogbo Steel, and the rest. The same thing that happened to our Nigerian Railway Corporation and textile, happened to our steel industry. Do I need to add anything? I think that is it. We have not got things right. Until the Ajaokuta Steel and the rest keep manufacturing, we can’t get it right. Fundamentally, we know we have the issues of corruption, poor power supply, technology, and the rest. I am a fellow of the Nigerian Society of Engineers (NSE), and I know this.
Addressing challenges
Stakeholders should first move away from discussing the problems with the plants and start to make a move forward. We have had several reports on what went wrong. What we should be doing now is to address how we can move forward. Without the steel industry, which is the backbone of industrialisation, there is bound to be problems because you can’t achieve a lot of things. You must get the steel industry right and unfortunately, it is capital intensive. You may not even be able to get replacement for the damaged parts of these equipment any more. We can attract investors to put up new plants but let us first address the challenges that we need to address to move on. A major challenge is that the purchasing power of the average man on the street is dropping drastically daily. It impacts on the country’s image and reputation. These are the reasons government should come in and help those of us who, despite the last recession, have kept our staff. Most companies are spending their capital to remain in business and very soon, the companies may fold up.
Government intervention
It is at all points. The first is that you know the way Nigeria is structured. Even if you are a private sector person, if you don’t have the support of government, you are likely to run into problems. Any investor coming in will first gauge the mood of the government from the beginning and at different stages, they begin to measure unimpeded progress. Except government takes it serious that they really want to attract investors, we may not achieve the goal. We also need to come with good policies and back them up with major actions.
We have been battling with power for a very long time. You can’t work on diesel. Even there is no longer adequate supply of gas. The government has to holistically solve these issues. We also have to deal with illegal tax issues. All forms of people come into your premises to request so many forms of taxes and we need to address that. We are keeping people in employment and what has the government done to encourage us? We see how government encourage the private sectors of the economy, in different countries around the world.
Supporting the private sector
I am saying that the government of the day should look at how they can support us. There are different reasons the private sector has to be supported, despite that they are profit-making. The private sector is operating where there is no power and even Forex is not friendly. How do you survive? So, the tendency is there for you to lay off your staff. When you do. There are multiplier effects because you create crime. We are a Nigerian company and we are here to stay. We have been here for 23 years. Our dream is to be in business forever. We don’t want to consider relocating from Nigeria or closing shop. We are very lucky we have a lot of projects ongoing. So, we are surviving with many streams of income. If a project is not funded, it is going to be abandoned. I don’t have a problem with a project being abandoned based on scarcity of funds but if it is about a new government coming in and abandoning what the old is doing, then I have a problem with that. We have a situation where an old government leaves and the new comes in and abandons the project.
Prospect
It is very bright and possibly the best. Nigeria is a very open market because we don’t have good roads and our dams are not working. Any developing country that is to develop would be talking about engineering because engineering in itself is development. The reality is that if you want to engender a rapid growth and development in the sector, power supply, water, everything is engineering. Unfortunately, our rate of development has been opened to being influenced by politicians which shouldn’t be so. We need to get it right. I believe the future of engineering in Nigeria is going to be negatively influenced.
Nigeria’s borrowings
We don’t have a history of managing the funds borrowed. Before we go and borrow, we must have a proper documentation of how to pay back. However, there is a fundamental point to note. You can refuse to borrow but bring in the investors to pump in the money into the economy. Nigeria is a country blessed with a very good return on investment. I am of the view that to fund your projects for you, you need to convince me on how to pay back. We need to think out of the box because when you borrow, you have to come up with a well planned avenue on how to pay back; otherwise, you are only transferring the dooms day to generations yet unborn. So, you have to think deep before you go about borrowing.