By Moses Nosike & Bashir Adefaka
Mr. Shex Oladipo, a vibrant figure in the organised private sector is the Managing Director/Chief Executive Officer of  70-year-old Lisabi Mills Limited, the manufacturing company that is reputed for being the first in the country to fortify processed foods with vitamins and minerals.

Oladipo

In this interview with Saturday Vanguard Business, he suggests ways towards achieving sustainable food security through agricultural boost and many more in the country.He was  one of the selected speakers that had a meeting with the Minister of Finance, Mr. Segun Agaga, during his last interactive session with the organised private sector in Lagos.
Excerpts:

What’s Lisabi doing in Nigeria?
Lisabi, as you probably know, is the pioneer indigenous food processing company in Nigeria and the company is 70 years old. Not only are we the pioneers for food processing but also we are pioneers in terms of food fortification. A lot of people don’t know that we were the first company to fortify our products with vitamins and minerals. Before any of the multi-nationals did it, we had done it and they are following our footsteps.

Having said that because of the environment that is prevailing, which has not helped manufacturers like any other manufacturing company, we have been a victim of that environment. I mean if you look at us from 1930s to now, you would see the landscape changing.

But up till the 60s, 70s things were in the right direction till the 80s when government lost focus completely. Since that time, policies that were killing industries came in place and it continues till today. Whereas, if we don’t encourage industries, our country will not grow.

Policies now that are killing industries, the other side of the coin that are encouraging trades and importation of products, what that does is that people have those products. They are meeting their needs but because those things are imported, you are creating the jobs off-shore. You are adding value to foreign economies at the expense of your own.

That’s what you are doing in this trading economy that they have created there and perfected here.
That must be changed. Government policy must address that. It must address that!

There must be some level of prohibition on trade such that if somebody is making something here in Nigeria – he may not be the best – but they are trying; if they’re importing, there must be some caution on importation because, it is coming from countries where they have power, everything, they will make it better.

If you give them open competition, this man here will never survive. His products can never compare and so, that industry will die normally and so you must do something to protect industries a little bit for them to grow. Those are some of the things that need to be done.

One major element for growth canvassed globally is food security. What is your attitude to this and would you say that government has done enough to support it?

I think this is one of the areas, if we must be frank, where government has a lot of work to do because, we are very insecure as far as food is concerned.

You would have noticed over the years that we have tended towards becoming a trading economy. So there are all kinds of food that are available in Nigeria. You can get anything you want.

The only problem is that most of them are imported and so we are not secure if we depend on food coming from outside. And of course because they are imported, they are not very affordable. Part of food security is not about how so much the food is available; it is also going one step further to say that people can afford to buy it.

The gap between the disposable income of the average person and the cost of this food is growing wider and wider everyday. So you can see, that is why poverty is becoming more prevalent. People can’t afford to buy. The food is there but they can’t afford to buy it.
But why is it so?

Because of two things: The high cost of producing it locally and then the high cost of importing those produced outside the country. So high cost, vis-a-viz lower disposable income because, it’s not relative. If I say high cost, it’s not hard but the person who has to buy it, if he doesn’t have much in his pocket to spend on food then, it’s hard.

So it is a relative thing, the inavailability of funds. A lot of people earn N5,000 in a month in this economy. When you calculate transport fare for a month, how much is left for food? Because if they don’t go to work, that N5,000 they wouldn’t even get it.

This is an area government needs to pay attention. There are several aspects to it. First of all is the need to discourage importation and encourage local production, not only food but other aspects. Of course, food first.

Government has not paid enough attention to that, they have not encouraged farmers over the years. In the past twenty, thirty years, all facilities and programmes that were set up to help farmers, a lot of them, if you like, the money was misappropriated.

So farmers are not enabled to do anything and then even farming as an occupation has not been encouraged. So there is a whole mindset that government needs to work on.

If you look at some of the developed economies, even in America today, farming is very important. If you are a farmer you are a millionaire because people have to buy the food that you are growing locally. People have to be encouraged, small and big farm holders have to be encouraged to go into farming. That’s only one step of it. There are some other complimentary infrastructures that have to go with it.

They tried to address that with Directorate for Food, Road and Rural Infrastructures (DIFRRI) under General Ibrahim Babangida’s regime. That was the idea of Structural Adjustment Programme (SAP); it’s just that they were not faithful to the implementation.  DIFRRI was supposed to complement that because the people who were growing these things in rural areas needed good access to roads to bring them out. But roads are not there.

The man who is doing it is not the one going to carry the things to the city centre. Some other people are supposed to transport it on the roads that are there, so that this just stops there at the farm gate and somebody buys it, he collects his own money and goes back with the money and farm again.

So we need to have roads to take these things to urban areas and then rural infrastructure; whether urban or rural, power is necessary. Water is necessary. In the rural area, may be water is more vital for cultivation of the plants than power but then, people use power there to pump water and so on and so forth. The power may not be as physical there as it is to you and I in the urban centre, but they do need power and they need water and then they need the roads to bring the things out.

Of course, in the whole country there must be a plan, because road transportation is very expensive. The most cost-effective mode of transportation for produce bulk is rail. Per unit cost, rail is the cheapest and that is why industrialists have been harping on this thing to government for years. Just give us that rail: the rail from East to West, North to South, then the roads will feed in as tributary to the rails. The rail will not be everywhere.

Just the main axis, the roads will now join. By the time we now have these together, we will have something that is cost effective such that the cost of transporting farm produce is not too high.

If the farmers are doing it at a low cost with their small margin and the cost of transportation is not too high, okay, the final cost to the consumer will be affordable.

Those are all the issues that are connected with achieving food security in Nigeria today.
Nigerian manufacturing companies were said to be closing down and moving to other countries, has there been any effort to win their confidence back to start investing in Nigeria again?

Things have been deteriorating. A lot of companies are going because of the conditions: the environment is not enabling, there is multiple taxation regime. You know the local government will pull you here, state government will pull you there and the Federal Government is pulling you. A lot of things is overlapping. People, who are not in industry or business, have the misconception about it.

If you hear that a company has a turnover of N500 million, the cost of achieving that turnover may be N490 million so that the profit may be N10 million.

I am just using it as an example. So people tend to think when they hear of big turnover that those companies are awash with money and that they should just go and meet them; charge them for this, charge them for that.

If you look on our wall outside, many years ago, we had paintings of our products there to promote what we produce. Then Lagos State came up with LASAA that charges you per inch, per square foot of what you put there.

Today if you go out there you only see our signboard ‘Lisabi Mills’ identifying our gate, finish! We are paying about N400,000 for just that one. All the paintings we have removed because, if we didn’t, we will have to pay so much money to LASAA and we are going to have to pass the cost to the consumer.  And if you pass the cost to the consumer, he won’t be able to afford to buy it and, of course, the more we keep adding cost to it and the door is open for importation from China, for instance, these products cannot compete.
The cost of generating power is there, all of it is inside these products and so, the products cannot compete. That’s why people are going to Ghana. Until something is done about these things, people will continue to go because they are in business to make money.

What are your complains about the activities of the regulatory agencies?
We have a great deal of complains.  A lot of the regulators, the agencies, have a wrong mind sets.  They think that their job is to trap down on manufacturers and make life difficult for them. No!  You are supposed to make life easier for them.

Their attitude is wrong.  They are there to regulate, yes, but it’s not a punitive thing; not punishment.  It’s to help.  So that mind set is different.

Have you been talking to government on these challenges in the manufacturing sector?
Government has not been listening I can say. When you are talking about these things it goes in here and comes out there. What they are really looking for is how can we supply this or import that? We have had round pegs in square holes and square pegs in round holes.

Until we have the right kind of people there in government, these things will not change and the people we have been getting there are political contractors; people who just want to go there, they are there to sell their influence here and there.

But things are changing. I mean the government we have now, I think, is better than most of the governments we have had in the past. I mean the current President, we know his profile.  Although he is still part of the political system and he is in the biggest party in Africa but, he is a man of some principles and so we know that some things will be done differently.

Of course it starts with the people he surrounds himself with and, more than any other government, I think he has a fair amount of level headed people.

The Minister of Finance and we, the private sector, had a roundtable on August 6, 2010. Mr Segun Agaga, the minister, is an accountant and was working in Lagos with an accounting firm, Coopers and Libra, before he relocated to London and then became the MD of Goldman…. I don’t think he is going to change his colour. I think he is interested in adding value, that’s why he is listening and consulting.

A lot of people who were there before were not doing that. It’s a clinical fact because, if one person is good and ninety of them are bad, you won’t get it right. But if you look at it, you have a few bright people there even the Minister of State for Finance, Remi Babalola, is from the private sector.

He’s a banker and we knew of his pedigree. These people can think and that is why they are thinking. They are out there to look at the problems, think about the solution and use economic means, apply it and get solution.

I think we have a few good people in the Ministry of National Planning, smart people. If the political will is there and Jonathan stays firm and say, look we are going to build Nigeria, we are going to do what is good for Nigerians and he hammers it at every exco meeting, we will be there.

I was very encouraged by this last Friday interaction that the minister had with the private sector. And the minister, as soon as he started, told us that most meetings he attends, he goes there to listen.

And he listened. And then, of course, we found out that infact some of the problems he has started addressing them because, he’s a very intelligent fellow. He’s already proactively looking at the issues there.

There is nothing really new, everybody knows what the issues really are and so there is no big deal.
What are your contributions to making the people in government perform?

That’s a very tall order. My people say there is a big gap between sleep and death. We are not in politics and some of us will not go into politics. Politics and industries are totally different things and they exist by different rules with different game play. You find that some of us are not going there.
The only gimmick that can help us is if the people in government start to liberalise governance, such that the private sector has more and more say in the management of the economy the way it supposed to be.
For years now they had been calling private sector the engine of growth and development but they don’t allow it any longer to be the engine.

How can they make private sector to be the engine?
It’s by listening to the private sector telling them policies. Obasanjo government, for instance, when they came in, private sector told them to face power and the problem will be solved.

They did as if they were facing the power but they were just playing magic, playing games with the money for the power.