Many prospective investors in the export business and trades in crops like cashew and cocoa beans have regretted the apparent apathy by the Federal Government to assist local businessmen.
The Federal Government has been promoting trade in cash crops that are highly sought after across the globe. But it has been observed that only a few Nigerian buyers are fully into the business.
Some of the stakeholders identified lack of or low access to adequate capital as a major setback militating against Nigerian investors. They also bemoaned the frustrating bureaucracy that a prospective borrower is subjected to before he or she is given a loan.
Indeed, many Nigerians interested in the business have lamented the frustration they have been serially subjected to. They have also raised the alarm that foreigners, especially from Asian countries, have put many Nigerian businessmen out of the business.
These and other issues were the major points of discourse at a recent edition of ‘Journey Thus Far,’ a weekly interactive forum of the Christ’s School Alumni Association, Class of 87. The edition featured an eminent businessman and retired teacher, Mr Odunayo Adebiyi, also known as Kolopin.
Other participants include Mr Demola Olubayo, a United Kingdom based businessman, Ayo Owolabi, and Mr Tayo Adelaja, among others.
The speakers lamented that foreigners come into the country with millions of dollars and are always ready to buy the commodities in large volume. But any Nigerian investor who thinks in the same direction will have loan with high interest rate to contend with, they noted. In the words of the stakeholder, the interest rates charged by some banks is high enough to scare away the potential borrower. Over time, the business has become saturated by foreigners
Adebiyi stated: “When I was working with an Indian firm years ago, there were farmers back then that we gave up to N20 million. It is a business that is capital intensive. If the Federal Government is sincere about this, then it should make access to loans very easy. When these foreigners enter Nigeria, they come with huge sums of money for purchases and logistics.
“Sometime last year, I was at the Bank of Agriculture to process a farming loan, but you need to see the bottlenecks that I encountered here and there.
“When I worked with the Indiana, what they did was that before coming to Nigeria, they would have sourced for the market over there. In fact, some of the prospective buyers give them dollars to come to Nigeria to buy and export cashew nuts.”
Maintaining that any policy without implementation was dead on arrival, Adebiyi said Nigeria’s problem was not lack of policy, but absence of effective implementation. He believed that if policies were implemented, Nigeria would have been far more advanced than it is.
From personal experience, Demola Olubayo saideven armed with the knowledge that the best place to source cashew is Ogbomoso and Kwara, getting Local Purchase Order (LPO) in the international market was the first barrier. He also faulted the aspect of Nigerian laws that allows foreigners unfettered access to buy directly from the country’s farmers. He noted that this indirectly empowers the foreigners to monopolize the market because of their financial resources and LPO that they get easily from their home countries.
To create middlemen, Olubayo suggested that government should make it difficult for foreigners to access Nigeria’s farms. He posited that doing so would create more jobs, which would be more beneficial to the country.
While concurring with other speakers, Ayo Owolabi said: “I think it’s something worth looking into. I know some other persons in the house have done similar things in the past and hence have some experience in this line of business.”
Tayo Adelusi, who is also into the business, lamented that the foreigners even dictate the price. “This year alone, if not for COVID-19, Indians, not even the Chinese, would have been everywhere. This is too bad.”
He explained that unless an investor had already secured a ready market that would even finance the supplier even before delivery, there would be problems.
Adebiyi explained how most of the foreigners operate: “They don’t go to farms directly. What they do is to provide the farmers with what the government can’t give them in terms of fertilizers, farming equipment, and so on.
“They will wait for the crops to ripe and they will buy it off the farmers. The farmers of course are more than happy to sell and make money.
“The produce price is not stable, just as the dollar rates are not stable. Since we are talking of millions of naira involved, then there must be a ready market for the produce over there or else it will be an exercise in futility.”
He insisted that the government could not do much. “Government can not control what they don’t have an input in. The farmers are the ones who know how they finance their farms so no government can legislate who they will sell their farm produce to. The Chinese come with good money and they buy from the farmers in their farms and pay for transportation to the ports.”