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As Nigerian coys move to Ghana

By Amaka Agwuegbo

Some countries are obviously handling the economic meltdown better than others. One good example is the sudden and gradual exodus of companies from Nigeria to Ghana.

Some close shop totally in Nigeria while others do so as gradually as they can manage without rasing alarm. Some notable companies that have moved are Dunlop, Michellin and Prilleri

Mr. Bola Olayinka, Managing Director
Mr. Bola Olayinka, Managing Director

Yet, DN Meyer, like a few others, seems to believe in the Nigeria economy still. Recently, the paint manufacturing company entered into an agreement with Prismo Ennis, the biggest road marking paints manufactures in the world, thereby bringing needed investment while others are fleeing the country. Mr. Bola Olayinka, Managing Director and Chief Executive of DN Meyer, who said the company maintains the 22 airports in Nigeria, explained some knotting issues about the economy, paint business and education.
On the movement of companies in Ghana’s favour, he proposed a critical look at the sequence of events. “Before now, some Nigerians have relocated their businesses to Ghana and then we see a lot of investment moving from Nigeria to Ghana. The biggest banks, IT and other investments in Ghana are owned by Nigerians,” he said.

The economy of Ghana, he believes, has suddenly picked up which is driven by investments coming from Nigerians. He also said Nigerians would be treated as very high cadre of people so that those who have tasted can share the benefits of Ghana with others who have the desire to relocate due to the challenges of operating in Nigeria.

Be that as it may, to some people it doesn’t make a difference if they operate in Ghana or Nigeria. However, it does because beyond the issue of ECOWAS treaties and operating within the same economic region, there are things to consider. Factors like the cost of doing business in a particular country and the issue of satisfying your shareholders This is so because at the end of the day, the name of the game is the return on investments.

Most companies, after paying through their noses to be able to operate, have to contend with providing their own source of power and water which should have been provided by government whose subject (the company) has done its part of the social contract.

But Olayinka feels the Ghana craze and recent frightening statistics published by the Minister of Industry about dead companies in Nigeria ought to be a wake-up call for government to review our policies and kick-start the manufacturing and investment sectors.

“Nigeria is huge, and at the end of the day, consumers of products coming from Ghana are equally in Nigeria. So it would be double jeopardy for investments that should be sited in Nigeria be taken to Ghana and the eventual products sold in Nigeria.”

Anticipating the next question, Olayinka restated DN Meyer’s strong belief in the great opportunities in Nigeria. “Firstly, shareholders would tell you it doesn’t matter where you operate as long as you continue to attract the right interests. But beyond that, relocating is something that has to be properly strategised, and not acting just for the sake of it. Because DN Meyer believes very strongly in this country, we will continue to seek for the understanding of the public sector who has the authority and power to make a difference in the enabling environment so that we can create a Nigeria that people will dream to invest in.”

To companies that are already operating, he urges them to continue looking to the future for benefits to the various stakeholders. “What is driving this basically is the new level of consumerism – people are beginning to spend money and governments world over are creating opportunities to increase the flow of money in the wallets. For instance, in the UK, the interest charged on borrowed funds is one per cent, so you can borrow money to spend for mortgage or any other consumption. Other economies are also kick-starting through what they call stimulus package.”

Being an operator in the stock market, DN Meyer’s shares are vibrantly traded and are well known by operators in the stock market. Despite the recent downturn, Olayinka believes that the stock market would bounce back and play its role of being a distributor of wealth and a veritable opportunity for investors and companies to raise fresh funds.

“Investors must not lose faith but should continue to look out for opportunities. One clear message which we need to pass on to those who are looking at the situation is that, substantially, majority of the companies listed on the NSE have very strong fundamentals and most of them are still operating. The fundamentals are strong, businesses are still operating and there are opportunities to be harnessed. Panicking would not solve what is happening in the stock market “Until the benefits are passed on to the manufacturing sector, it is going to be very difficult to assess the effects of the reduction of the MPR on the sector. For now, the manufacturing sector is paying interests of between 20-35 percent, depending on the borrowers’ negotiating powers. We want to believe that those regimes of interest rates will not augur well for an organisation to be able to cater for its entire stakeholders unless government does something about it.”

He alleged that part of the stimulus package in other economies is the reduction of the interest rates so that people can have access to money and be able to stimulate purchasing which would enable the economy to grow. “In Nigeria, we are going in the other direction-  while others are bringing the rates down, ours is on the increase. Now that the CBN has reduced the rates, the manufacturing sector can only access the benefits when the lower rates are passed on to us which, up till now, has not been done.”

Some years ago Nigeria launched Ghana-Must-Go. If things continue to nose-dive economially, Nigerians will follow where the companies and jobs lead. This will further swell the number of Nigerians all over the world. At the risk of sounding pessimistic, some countries, and definitely Ghana, might just launch Nigeria-Must-Go a few years from now.


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