As Nigeria continues to grapple with its worst recession, two pressing concerns revolve around its struggle to diversify – the state of the local manufacturing industry and the level of government’s commitment towards industrialization.
Nigeria is sub-Saharan Africa’s largest economy which boggles my mind when I consider the abject decline in the real GDP, income, employment, manufacturing, and retail sales.
The Nigerian economy is chiefly governed by oil and natural gas. While the oil sector provides almost 30% of the GDP and accounts for 90% of the total export capacity, the manufacturing sector provides around just 4%.
The sector is undergoing industrial collapse. The Manufacturers Association of Nigeria (MAN) reported that 272 companies shut down in 2016, 50 of those were manufacturing companies. Other reports claim that more than 1,500 of the 2,500 registered manufacturing companies folded up while millions of employees have lost their jobs.
At the forefront of this decline is Nigeria’s reliance on oil and the failure to make hay while the sun was shining. This focus on oil derailed Nigeria’s progress to becoming an industrialized nation. The government’s recklessness is to blame for the industrial failure, such as power problems, infrastructural deficit, economic mismanagement, taxation discrepancies, policy uncertainty, weak investor confidence, restriction of foreign capital inflows, affixation to irrational importation, and, notably, the low income of consumers.
As commodity prices plummeted, the manufacturing sector has impressively emerged. Despite challenges, the huge demography and being the largest African market makes Nigeria ripe for investment. The United Nations had projected that Nigeria’s population will rise to 240 million by 2050. Also, Renaissance Capital and Frontier Advisory forecast that the country’s economy will grow to $1 trillion by 2025. These are signals of the potential of industrialization.
All that is needed to harness this potential is the willingness of the government to act. A robust manufacturing sector and a willful program for industrialization are equally crucial for the dream to be realized.
It is, therefore, unsurprising that the present government is jumping on the industrial horse to achieve economic reform that will replace the oil and gas with manufacturing and agriculture.
“My engagements with the organized and informal sectors has been mutually affirmative that we should work harder in partnership and disagree less, grow confidence with greater transparency by government, and accelerate actions rather than words, to build our capacities and secure development,” said Nigeria’s Minister of Industry, Trade and Investment, Okechukwu Enelamah, at the Nigeria &amp; Entrepreneurship Summit &amp; Honors in December.
Since then, however, not much has changed. Private businesses are still hindered by unfavorable laws. To this end, the National Assembly is working on legislative economic reform – with 30 bills, including the Petroleum Industrial Bill, Infrastructure Investment Protection and Regulation Bill, Railway Sector Reform Bill, and Tax and Revenue Law/Bill. If successful, such a revolution would be a shot in the arm for industrialization.
The hopes of entrepreneurs and local manufacturers are also bolstered by the Made in Nigeria campaign, which is receiving encouraging support from top to bottom. President Muhammadu Buhari has reassured Nigerians that his administration is working on enhancing the support of locally made goods as well as improving access to finance for small and medium-sized enterprises across the country.
Despite enduring hardship at the moment, Nigeria can be reassured that greater opportunities lie ahead.

Nigeria Needs Industrialization now

As revenue dwindles from Nigeria’s foreign exchange reserves, calls for the government to find alternative export revenue sources have never been as loud. A return to agriculture, once the biggest industry before the oil boom of the seventies, has been touted as the most viable solution. Mining has come to the fore as another potential revenue earner, though the drop in global commodity prices will have a bearing on investor appetite.
These alternatives can generate significant revenue for the nation but, as seen with oil, a robust and watertight system will be required to ensure that all revenue from mining is redeployed into states where there is mining activity.
There are many factors that have prevented mining in Nigeria being considered a real growth earner. Whereas Nigeria’s oil is internationally recognized, the grade and quality of the country’s minerals are not recognized as meeting international standards. This has led to questionable practices being carried out by miners and traders to ensure that they make a profit on their substandard material. Furthermore, testing centers and labs are few and far between, diluting the viability of finding a buyer.
The recently installed Minister of Solid Minerals and Mining, Kayode Fayemi, has already begun to develop strategies to ensure the development of the sector is maintained from federal to artisanal level. The fragmented nature of the mining sector in Nigeria allows for local cartels to take advantage of what is seen by many as a hostile business. Due to the lack of legislation, locals prefer to sell ores for quick gains to foreign buyers, rather than dealing with the bans and restrictions that come with the legal channels. Foreign buyers are able to get more for their money by capitalizing on the porous laws. The government in Congo is aware that the trace minerals, associated with the ores, amount to something valuable and have made it illegal to export them.
Confidence precedes investment and, with the global mining sector experiencing a downturn, the lack of protection given to mining in Nigeria risks deterring potential investors. Abundant natural resources should be a gift, not a curse. The lack of policy presents an opportunity for the ministry to develop the legislation that governs the sector. This will give confidence to mining companies who want to invest in a robust system. As with the Local Content Act in the oil and gas sector, there are policies that can protect the mining sector to keep the wealth in Nigeria. A ban on importing raw materials that could be mined in Nigeria is a start.
Today, a lot of Nigeria’s mining is at artisanal level. A workforce is usually made up of locals from surrounding villages. Armed with a spade, they get to work using crude techniques to extract the ore. This exposes toxins, leading to poor health and damage to the environment.
When visiting a mine, it is not uncommon to see the landscape punctuated by parcels of land ransacked for their minerals. In countries where mining is prominent, there is a synergistic approach with environmental and mining ministries working together to ensure that the environment and surrounding communities are not negatively affected by the excavation.
Unofficial tax collectors are also known to plague the routes on which the mined material is transported. While  companies have come to expect this in Africa, business will increase if this practice is eradicated in Nigeria. The mining ministry must engage with states and local governments to ensure that royalties and taxes reach federal accounts. With idiosyncratic systems catering to minorities, the fact that no major international mining companies are established in Nigeria is indicative of the lack of confidence they have in the country’s mining sector.
The general perception among Nigerians is that Minister Fayemi has the skills and intellect to successfully navigate his challenging post. During his term as Governor of Ekiti State, he attracted international finance. He is now expected to be just as bullish in Nigeria’s potentially lucrative mining sector.

Natural Resources A Gift Not A Curse

A hasty expansion to South Africa’s most popular tourist destination brought about some of the early business challenges entrepreneur Sola Owoloja had to face. After a successful launch of a concierge business, West Chauffeurs, in Johannesburg in 2008, opportunities for expansion to various cities in South Africa soon presented themselves to the company.
West Chauffeurs, based in Johannesburg’s swanky suburb of Sandton, was ready for business in Cape Town. In 2009, it secured the highly sought after travel desk contract to provide full concierge services to the African Pride 15 On Orange Hotel and African Pride Crystal Towers Hotel and Spa. It would offer concierge services from booking spur of the moment transportation, dinner reservations, impossible to book theater tickets, finding presents in a hurry and doing deliveries among many other things to guests of the prestigious hotels.
But it was a hasty expansion and move to South Africa’s international tourist city of Cape Town that turned Owoloja’s world upside down, ushering in his worst day.
“The Cape Town operations were not profitable and we didn’t see the possibility of that trend changing for the better,” says Owoloja.
Nigerian-born Owoloja, started his entrepreneurial endeavours in his early twenties in Lagos. It was here that he learned that there is no structure in doing business, even having a 20-hour working day becomes the norm.
He moved to South Africa with the hope of receiving a contract to run an oil services company, but that did not go well. He moved back home, but later returned to South Africa to complete his studies in business administration.
During his studies, Owoloja established the concierge business with little entrepreneurial experience.
It started off with only two luxury vehicles in May 2009, but soon added another five through financial assistance from the National Empowerment Fund. West Chauffeurs was doing well, servicing clients through a global luxury lifestyle company, Quintessentially. They’re known to have very high net worth clients who travel around the world and often stay at the best hotels. And they trusted West Chauffeurs with their clients, Owoloja says.
The empowerment fund and the vehicles West Chauffeurs had purchased bore fruit which helped the business make more than R1 million ($96,000) after only two years in the concierge industry.
They bought new cars for the expansion and even got into lease agreements to finance the rest of the cars to meet the requirements of their contracts in Cape Town.
“We hoped that the expansion to Cape Town would afford us the opportunity to scale the business and as a result be able to increase revenue and profits,” Owoloja says.
But they had entered into unfamiliar territory, an international tourist city that already had well established hotels and services. West Chauffeurs struggled to find its place in the market, and because it relied heavily on the hotel’s guests for business, the company experienced relatively low sales as the hotels were new and in the process of growing their own client base.
“For a small company, expansion should be managed very carefully. We were profitable in our first year, but we did not think that move carefully. We expanded very quickly without the structures to manage the expansion in terms of cash flow, record keeping, etc,” says Owoloja.
The revenue from the Cape Town branch was very low in comparison to the cost of running it. At the end of every month, West Chauffeurs was short by about 65% which they had to source from the profit made during the previous year.
“It dried up very quickly. We tried to get overdrafts to pay salaries, but it was quite difficult. We picked up heavy losses in Cape Town, but those are lessons learned. They were painful,” he adds with a chuckle reminiscent of the tough times.
“It was a very difficult time for me and as a matter of fact, all of us, including employees. I reckon it is so much more difficult to run a business that doesn’t make profits than one that is profitable.”
West Chauffeurs lost millions. Their biggest mistake, Owoloja says, was for the company to go without management accounts and financial statements for nearly a year.
“With the benefit of hindsight, negotiating better terms with our clients could have saved us the considerable losses we incurred in Cape Town,” he says.
But that’s all in the past now. In early 2011, West Chauffeurs packed up office in Cape Town after 16 loss-making months to focus on the business in Johannesburg.
“We decided to focus on our Johannesburg operations which were profitable. It remains profitable and we plan to make it more effective and hopefully be able to make a little more money without additional investments,” he says.
They relocated from Sandton to the affluent suburb of Melrose Arch to run African Pride Melrose Arch Hotel’s travel desk. It is one of Johannesburg’s trendiest hotels. The guests of the hotel are typically discerning travelers who are accustomed to world class services and that became an opportunity for the company to recover from the Cape Town setbacks and also further its growth prospects.
From then onwards, things started to look up.
“We went from nothing to quite a bit. There’s this very nice feeling that comes with making things work,” says Owoloja.
West Chauffeurs currently has 17 employees including drivers and consultants.
Their client base includes companies who use their services for visiting dignitaries. They include Commonwealth Bank of Australia, First Bank of Nigeria, Liberty Life, Musa Capital, Openwave, Union Bank, clients from Barclays and many other private patrons.
Now that Nigeria has bragging rights as Africa’s largest economy, after overtaking South Africa following the West African country’s rebasing of the gross domestic product data after 24 years, West Chauffeurs’ expansion plans can be accelerated.
“Many doors have been opened especially in the hospitality industry as a spin-off from our hard work and dedicated approach to tasks we were entrusted with. In the not too distant future, we will be partnering with an international hotel group on their expansion efforts into Africa, starting with Nigeria,” says Owoloja.
This time, he’ll be armed with the lessons learned from Cape Town.

The City Of Leisure That Brought No Pleasure

Côte d’Ivoire is back in the committee of nations after post-electoral violence plunged the country into civil war in December 2011. The commodity-rich West African country is the world’s largest cocoa producer and net exporter of crops including coffee, banana and pineapple to the European Union (EU).
Côte d’Ivoire is also a leading agricultural economy with oil deposits. It accounts for 45% of the gross domestic product (GDP) of the eight West African Economic and Monetary Union (UEMOA) countries.
The return to political stability and the economic optimism in the country have been great motivation for corporate high-flyers like Fabrice Sawegnon— Côte d’Ivoire’s brightest spark in advertising and CEO of Voodoo Communication. Now he, along with others, can dream and plan big about expanding enterprises and taking Africa to the next level of economic growth.
It almost did not happen though, for Sawegnon. His company was headed to the scrap-heap, along with many other casualties who also suffered in business, as a result of the post-election uprisings. Voodoo lost about 80% of its revenue in that period. A contract came just in time to avert the demise. The sizable deal was from President Alassane Ouattara’s office for the production of presidential campaign billboards.
“We won the contract to produce billboards during the campaign. The communication strategy deal for President Ouattara continues to date,” said Sawegnon.
Voodoo currently leads the pack in Côte d’Ivoire’s advertising industry with an annual revenue of $20 million. The company is expanding and recently opened offices in Benin, Cameroon, Gabon, Mali and Niger. Another office is due to open in the DRC.
On the day of his interview with FORBES AFRICA, Sawegnon—the pioneer of Afro-centric advertising concepts in Côte d’Ivoire—sits in a plush office fitted with all the décor suited to an executive’s taste. He is ebullient and speaks passionately about advertising. He cuts an image of a CEO on top of his game.
This is a long way from 1999 when, at 28, he set up office determined to be a non-conformist in an industry dominated by Western views and opinions. He used the name  ‘voodoo’, derived from fetish cult worship in Benin, to provoke and draw attention.
“I have always been an inveterate entrepreneur. The idea to start my own company came when I was an employee at McCann Erickson. Prior to 1999, the advertising and marketing industry was dominated by Europeans. The name ‘voodoo’ was meant to give a clear African cultural reference point, ostensibly to position the company in the industry. We believe that advertising hinges on two things: technique and cultural bias. Success did not come on a platter,” explained Sawegnon.
Several European advertising firms approached him for partnerships. He turned them down because he believed an Afro-centric ad company should guard its “independence jealously”.
Voodoo has 300 employees across Africa. The thrust of the engine is a crop of enthusiastic creative and artistic employees who, under the leadership of Sawegnon, have powered the company to its current success. Sawegnon, a quintessential ‘local’ breed businessman, is giving the multinational advertising giants, such as McCann Erickson, a run for their money. Voodoo holds big accounts such as France Telecom (Orange)—which operates both fixed land lines and mobile telephones in Côte d’Ivoire; Western Union; Castel beer and Attijariwafa bank—a subsidiary of a Moroccan bank.
Work teams are structured to achieve optimal effectiveness. A dedicated team of marketers and creative staff is assigned to each account. Sawegnon said the team approach had helped them to deliver sterling performance to clients across the continent. Adding, “I believe in using raw talent that can be molded to produce the desired results. Talent can be cultivated when the environment is conducive.”
To demonstrate his determined commitment to Africa, Sawegnon recounted how he queried “made in America” ad campaigns that promoted a soft drink company showing white children playing in the snow at Christmas while the target public in Africa did not necessarily identify with the cultural ethos.
“I was told that it was appropriate to show such ads in Africa since experiencing snow was considered to be an aspiration of African youths; and that African people dream of visiting countries that experience snow in winter. Of course, I did not believe a word of that assertion.
“I told my colleagues at Voodoo that if a Chinese firm beat us to the game in Africa, it would be because we had lost our cultural finesse. Foreign companies might have a capital base to play with, but they couldn’t know Africa better than us,” he said.
Sawegnon considers his high work ethic as central to his rise from humble beginnings to a successful entrepreneur. He also received personal satisfaction from seeing his staff enjoy the fruits of their labor, saying, “I feel proud to watch my executives drive sleek cars and living the dream.”
He lives by the philosophy of passion and teamwork. The latter because he believes “a person working alone cannot succeed”. Sawegnon encourages young entrepreneurs to participate in creative ventures, However, he concedes that, “although you need teamwork, you equally require visionary leaders capable to chart the course for the team.”
Sawegnon views the sharing of experiences as one way to encourage entrepreneurs to forge ahead in hard times. He is convinced that there is space for Africa’s emergence. He said that youths needed to “show ambition” and aim to reposition the continent. He believes that there was still hope that talent could still be cultivated and that a new crop of corporate leaders could be developed.
Formidable success in advertising has not been a cause for Sawegnon to take things easy. In 2009, he diversified into publishing, with two magazines titles: Tycoon, a soft sell magazine, and Life magazine, which spotlights Ivorian celebrities.
“Tycoon features profiles of business leaders. It is a qualitative magazine which does not touch on the monetary aspects as this is deemed to be culturally unacceptable in our country. Highlighting values is closer to my heart. I am the publisher but I sometimes write the preface or editorials,” he explained.
Sawegnon also invested in an event management company that specializes in billboard advertising. As if that were not enough, he is poised for his next project: the launch of Côte d’Ivoire’s first television station, Life TV, once the Ivorian government issues audiovisual licenses later this year. The plan is ready for him to branch into private television programming and production in a country ripe for business following 12 years of political and civil strife.
The success he has achieved in business makes Sawegnon more keenly aware of the responsibility to give back.
“Those of us who have succeeded owe it to society to give back, especially towards empowering youth and helping to spur micro development initiatives in Africa. As entrepreneurs, we create wealth through job creation and add value to the microeconomic effort. I sincerely believe that if all of us entrepreneurs played our part, our efforts would snowball into a powerful force that would propel Africa forward.”
Sawegnon is a graduate of the prestigious École Supérieure de Commerce of Abidjan, where he majored in marketing. He joined the ranks of Young &amp; Rubicam in 1994 as product manager at Metallivoire Jal Afrique (roofing materials, roofing sheets and paints).
The battle for the soul of advertising in Côte d’Ivoire is not yet over, but Sawegnon has made his intentions clear—to conquer the country and the rest of Africa.

A New Lease on Life for Advertising Bright Spark

<div id="attachment_162" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-162" class="size-large wp-image-162" src="/wp-content/uploads/2011/11/iStock_000013732621Large-1024x675.jpg" alt="" width="474" height="312" />Growth will be driven by government expenditure as revenues increase through higher oil production and prices</div>
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Following a remarkable run of double-digit growth, the Angolan economy took a hit in 2009 and 2010 due to a fiscal and balance of payments crisis. However, the signs of a strong recovery are in the offing and economic prospects are now looking brighter. Already all three main rating agencies, Moody’s, Fitch and Standard &amp; Poor’s, have raised the country’s sovereign rating. The International Monetary Fund (IMF) expects GDP growth of 3.7% in 2011, building on the 3.4% of 2010. The IMF expects growth to accelerate to 10.8% in 2012. Growth will be driven by government expenditure as revenues increase through higher oil production and prices. The IMF’s stand-by arrangement (SBA)—a credit line—which runs until February 2012, is likely to anchor macroeconomic policies in the medium-term at least.
<div id="attachment_134" style="width: 360px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-134" class="size-full wp-image-134" src="/wp-content/uploads/2017/04/angola.jpg" alt="" width="350" height="376" />Growth will be driven by government expenditure as revenues increase through higher oil production prices</div>
Government expenditure will focus on massive social and infrastructural gaps in the economy. The construction sector will continue to play a central role. The mining sector is likely to get a boost as the government plans to diversify the economy away from oil and gas production, as recommended by the IMF. Angola has substantial mineral deposits which include iron ore, copper and diamonds. The mining sector was deemed unviable during the civil war and neglected. After the civil war, the sector took a back seat to oil and gas production and attracted little investment. A major development in the mining sector will be the introduction of a new mining code that is aimed at boosting investment into the sector. The code was passed by parliament in July this year and is set to come into eff­ect by year-end. The state, through its mining company Endiama, aims to play a major role and to take 51% in all diamond mines.
Infrastructural bottlenecks and robust domestic demand are likely to keep infl ation elevated in the months ahead. On the political front, the ruling Movimento Popular de Libertacao de Angola (MPLA) continues to dominate.
<div id="attachment_161" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-161" class="size-large wp-image-161" src="/wp-content/uploads/2011/11/iStock_000015823770Large-1024x683.jpg" alt="" width="474" height="316" />Oil Platform offshore Angola</div>
It holds 191 of the 220 seats in parliament. The fractured opposition will only help the MPLA keep power. Elections are set for late 2012. The incumbent president, Jose Eduardo dos Santos, is expected to stay in power. In February 2010, the country adopted a new constitution whereby the president is no longer elected by popular vote; instead the president will be from the party with the most seats in parliament. The government has faced huge challenges since the end of the civil war. Poverty is still prevalent despite the country’s huge mineral wealth. Infrastructure remains poor following decades of civil war. There is discontent among the people, who feel they should be getting their fair share of economic prosperity. This discontent is unlikely to see a repeat of the “Arab Spring” on the south-west coast of Africa, though. Angolans are weary of conflict.
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Tag: Revenue

FORBES AFRICA SOCIAL MEDIA

Nigeria Needs Industrialization now

Natural Resources A Gift Not A Curse

The City Of Leisure That Brought No Pleasure

A New Lease on Life for Advertising Bright Spark

Angola Rising From The Ashes Of War