Interviews

A MAN with a cause

Engr. Charles Ugwuh
President, Manufacturers Association of Nigeria (MAN)

Does the current national policy embody the expectations and aspirations of MAN?

The National Policies on Industries, there are several of them that have been put forward by various Ministers. Every Minister of Industry that comes on tend to set one up and they claim that the focus is on Small and Medium Scale Industries as a strategy to create a strong industrial base. But I would say that the relevant policy today is the National Economic Development Strategy (NEEDS). That is what is relevant because that is what outlines the commitment and vision of the current leader. The industrial policies as enunciated by the previous ministers of Industries and previous governments have not really been implemented. Most of them were enunciations, good wishes and outlines of what they would like to do but they haven’t really done them. Yes we mouth it, we speak about them, we make the statements, but we are not really implementing because it is not just saying that the focus is on small and medium scale industries, we ought to create a whole environment that promotes entrepreneurship that have to look at so many things. So in summary, yes, we ourselves accept today that NEEDS is real. Government has put out a document in which they outlined their thoughts. We participated in fashioning it and we now trying to work in line with that policy as the major Driver to the new economic direction, and economic success we need.

But even for the previous ones fashioned by the ministers of previous regimes, did they embody the aspirations of MAN?

No, not necessarily, in some cases we are consulted, and in others we don’t get consulted, government outlines what they think are feasible within their resources and they go ahead and do it. But we subscribe ourselves to the concept of promoting economic development through small and medium scale industrial focus, because at the level that we are, given out limited capital formation, given our low level of entrepreneurship, the level of skills and technology, we have to bring industrial development at the level that our people can play in, otherwise we end up having pools of foreign activities, like you can have striving brewery but that brewery every thing in it is supported from outside whereas if you have small and medium scale industries surrounding these breweries, they can supply them packaging materials, as part of there inputs. So we were in some cases consulted in developing the policies but there are many factors that government ought to have integrated together in making the policy coherent in giving it the highest chance of success. I talked about training, entrepreneurship and funding. We are talking about so many like linkage, networking with small and medium scale industries around the areas in a kind of cluster to enable them support each other and enable them target finished products because every product has a supply chain around it. So you build this supply chain. So, yes we endorse the concept of small and medium scale industrial cluster as a strategy for economic development and industrial cooperation. But the way government has done it has not been fully integrated in a way that brings better success.

So you think that is the niche that this government wants to create in the area of industrialization?

Yes they changed their tag some-how, saying that they will focus on small and medium scale industries. They will aim to establish clusters of these activities, where possible clusters of similar and supportive endeavours. For example, if you take Imo State, they are looking now at developing an industrial cluster; that cluster will look at furniture making, wood works, small engineering assembly and maintenance, welders. Welders are needed in the oil industry to provide platforms and pipelines. So there is a focus on fabrication, slight engineering.

There is also the issue of food processing because in that area, there is a lot of food crops that can be processed and packaged in the way you can export them. You see Ogbonu, egusi; all those things are being consumed outside. Ghana is the main supplier now to Africans in Diaspora. There are opportunities in there. So Imo State is developing theirs now as a small cluster of these small fabrications, small maintenance, semi-assembly, furniture making, garment making. Like in Aba, there is one that has been developed already on shoe making, or leather goods. Aba is the biggest producer of shoes leather goods all over the West African regions. You know, leather belts all sorts of things, garments, Aba is farmous for that.

So gradually, clusters are coming up and may be very soon, pharmaceuticals might develop, who knows, around Enugu, may be food also. So the concept of clusters as the main strategy is correct. But you need to support it with a lot more things. You need to build the infrastructure; you need to do a number of things to realize the objectives.

Does MAN feel a sense of adequate consultation by this present government?

Not adequate, they consult us sometimes. But this government is resentful of opposition. Governments tend to resent contrary opinion and that is not the right thing because contrary opinion enables you to fashion your thoughts and clean out your act in a way that ensures success.

In this particular government, they are resentful of contrary opinions. They consult us when it suites them. When it doesn’t suite them, they ignore us and carry on. Ostensibly they make a statement that private sector anyway is small; they contribute only 6-7 per cent of the GDP, so what the hell doing this? But thats wrong. There ought to be a full consultation with the private sector. For example, the highest platform that used to be available to consult with the government is no longer there and that is why we are having the crisis we have, because in that earlier organization, we used to have government, labour, private sector, all sectors, banks, financial institutions, shipping companies, manufacturing, they were all together.

What was the platform?

I can’t remember the name exactly. But it was at the highest level, the president and vice president were members but the highest authority in the land is the National Economic Council. Private sector is not there. It is mainly the president and a few ministers and the governors and this not correct. If you are going to have an economy that is growing, you have to have all stakeholders there. National Economic Council should be made up of the government, private sector, labour and other stakeholders, so that the commitments you make there applies to everybody. That is why you have the strike, because you are not given the opportunity for the voices to be heard.

Reading through some of yours books, I see that MAN as a body is represented in quite a number of government agencies. I was wondering whether such representations have been very useful.

Actually, in the last few years, some of those bodies have not been constituted. I mean, you take for example, the board of Polytechnics. MAN is supposed to be represented in the educational board of these institutions. The main objective is to link or get the private sector input into the developing the curricular that are applied. And also to ensure a proper link between the operators of the private sector and the educational institutions so that at least you also bring the training home in a practical way. But in the last seven years, manufacturers have not been members of the polytechnic boards. Manufacturers are also supposed to be members of the board of import-export bank of Nigerian (NEXIM) and several other institutions of government. Often, the political maneuvering robs us the opportunity to serve but the concept is correct. The concept is one that is true and should be implemented in the way benefits the economy. Because the idea is to have shared ideas, vision that everybody subscribes to so that as you move forward you do the cost corrections that you need to improve economy and implement the policies that will work and move the economy forward. So my answer is that the basic idea is good, is workable but it has not been implemented over the past few years.

Reading also through your literature, I heard a lot of complaints about industrial policy implementation, efficient implementation of policies. What is the situation of things?

There are a number of areas that are troubling. One is in the area of funding; for example, you make a policy that you are going to fund a bank of industry that will be the channel for generating long term funding to the economy. You set it up; you make all the rigmarole of it. You have done all the fan-fare but you don’t fund it, you are supposed to have a N50 billion capital, you don’t give the capital, so the bank ends up having request for N150 billion or more demands. But all it has is N5 billion to do work. So things like that tend to really create problems, unnecessary frustration for such policies. Funding is one, there are several others? There are several other issues in the area of skills acquisition, the one of training, the area of providing grants, for example, the ITF, you create an ITF (Industrial Training Fund) and they do very little and yet industries subscribes and pays into it but nothing is happening in the mean time. There are a number of other issues like the issue of smuggling, faking, counterfeiting where the government is supposed to have taken certain position to try and prevent and eradicate the smuggling and the evasion of import duties by smugglers because this places the local manufacturers at tremendous disadvantage. So these are some of the areas that government has not been able to do all that needs to be done to support local industrial developments.

Having established that as a major problem area, did MAN develop on action plan to deal with poor policy implementation?

Yes, we tried to engage the government all the time. Recently the issue of the strike, you can see that we intervened. You looked at the papers you saw that we intervened. MAN and NECA are intervening strongly to try and engage government, in persuading government, in persuading labour. There are several other areas that we intervened, for example, on the excess crude funds, we have made proposals to government, and we have suggested what can be done with such money. In the area of infrastructure, we have made proposals as to what should happen. But you know, we are quite positive, we are quite pro-active in trying to reach out to the government but if they don’t want to listen to you, you can’t do much and when you don’t have any force of law you can only persuade. So, there is some weakness within that. If there was a plat-form where we could argue with much more vehemence it will be easier to implement. So, yes, we engage the government in discussions. We try and get them to follow the right part. Infrastructural development for example, you can only make suggestions to the government, look, power is inadequate, why not we do this or that. The same thing with refining today, we have been crying to the government about petrochemicals for a long time now. The plant they have in Port Harcourt is not working. The investment that needs to be made is not being made, but government will make statements of how they want to grow industries but you can’t grow industries without the basic raw materials. So these are some of the weakness in the current interactions with the government, that there is very little success. Unfortunately, the government is taking some steps to disengage from business. Correct, yes disengagement. You also see some abdications of the responsibility. You will not operate the refineries, you would not operate them efficiently but you get involved importing fuel. You get involved in spoiling the environment for those who want to operate. We ask you, okay privatize NEPA. You agree, you will privatize it but three years down the line, nothing has happened. Yet we are constrained with no power available. We are still talking about 4000 mega watts or 3000 mega watts instead of talking about 8000 to 10000 watts per day. These are some of the areas that the government although enunciate a statement of policy, a statement of action plan but in terms of actually executing these plans, to achieve that results, it has not been done.

I will come back to that point, but let me immediately ask you, how powerful and influential is MAN?

MAN is influential; I mean we have today 2602 members with us. They provide employment to Nigerians and they are very organized group. They are very articulate and they are knowledgeable about what they are talking about. They are influential, their opinion is important. Over the next few years, MAN will become more influential because MAN and Nigerian Employers Consultation Association NECA are going to integrate and fuse together. The two councils have reached an understanding about that and we are now at the joint committee stage.

Will that include NACIMA too?

No, it will include certain parts of NACIMA. We are trying to bring the productive sector together, that is, what we call the real sector as against just the general traders. So we are trying to bring those together. Those that offer logistics services will be part of what we are doing. The banks will be part of what we are doing. So in this part of platform, the private sector organized in this way will have a very strong powerful voice, articulate voice, a resourced voice, voice with a lot of resources that will be used to project the vision and ideas that we have. So we expect that over the next few years, the level of influence, out-reach and impact will be quite strong.

Was this what you mentioned at the summit? I read through the report on the summit and you talked about using a bigger business Association. Is that the same thing?

Yes, and it is coming up now. NECA and MAN are going integrate and merge together and is going to come. Eventually NACIMA will joint it, most of NACIMA will join it quite apart from the general trade because in NACIMA now, off course you have the banks and banks are also belonging to NECA. The oil companies will be part of it. All the various services that are related to the real sector will be part of it. We are talking about integrating the entire real sector together and that will be a very powerful voice.

Let me digress a little bit, I will still come back to industrial issues. Well, in the 16th and early 18th centuries, the industrial and mercantilist class in Europe spearheaded the struggles against feudalism. In Nigeria, the organized private sector distanced itself from the pro-democracy and Human Rights struggles of the 80s and 90s centuries. Why was this so?

You have to understand the history of industrial development in Nigeria. The industries we had here in the early days came as factors of foreign companies that were operating here and were targeting entirely Nigerian markets. It was based on import substitution. We are selling soap in Nigeria, let’s go and set up a small factory making soap in Nigeria so that we will now use local raw materials especially oil. We buy the perfume; we buy the caustic soda and make it in Nigeria that is how industries started in Nigeria as local factors of foreign companies. Indigenous people played vary little part. The highest they did was to transport the goods, provide the services, provide the general labour, provide where available the some local raw materials – palm oil and all those things. So, the indigenous people have only now started coming on to industries and they are coming from a very weak platform where the capital formation is very weak. If you now look at the industrial growth of Nigeria, you have these industrial poles of activities like the Heneikhin Breweries, Guinness Breweries, Cadbury and all those, and you are looking at business that are entirely in the area of food and beverage. Whereas local manufacturers, local industries are supposed to focus on furniture, all sorts of production, it mixed variety of products, so in this kind of environment, the local industries are fighting for survival and are affected drastically by the same agonies that you feel with regards to democracy, with regards to privileges and all that, so they are coming from a very poor environment, trying to rise the scale. So, in that situation you can’t expect them to accumulate enough resources to champion courses, you can’t expect that. You can’t expect that they will have a do good mentally. In Europe, there was a moneyed class. They started from doing some trading, in spices, from shipping, from all those things and now became rich, wealthy, processing, exporting, exploiting also the colonies that brought all the best raw materials which they transformed and shipped back. So there concepts in terms of the society structure was different. They needed stability; they needed an entire stable environment to be able to do their business. In our place, we are trying to migrate from a poor background and take a jump into starting and controlling means of production and services. So, we completely fully exercised by this. Nobody has time to make gestures of freedom fighters at that particular point. The main thing was hunger, the main thing was poverty. That had been the fight of indigenous people. They are poorly capitalized; they are weak in resource base. Most of them who are throwing money around today are those who draw the money from government coffers. They are not money that is earned, so you must understand that. So what does that mean? It means that industrial associations, their focus have been ways to help their members. Not to help them to exploit the society, no, but to help them strengthen their business to raise capital, to improve the environment, to improve infrastructures. My brother, this is full work, it is a lot of efforts. Still, by being able to maintain production, they support the society, they create jobs which sustains the economy quite to a large extent, so in a way, even though they did not carry they flag championing democracy on the surface, by and large their activities tended to prop up the economy and provide stability to enable those who are political to move forward.

In that case, what do you consider to be the relationship between democracy and industrialization?

If you look at every environment where there has been prosperity, it is always based on a free society that is able to exercise its skills and entrepreneurship and cooperative spirit. A democratic environment provides this platform, provides a free environment, a plural society that has basic freedoms that you can operate and give free reign to your vision, to your idea to the concepts. That is what democracy does. And therefore, in a democratic environment, industries, businesses are supposed to strive as against repressive environment. Market economy is the key. It has been proven for what has happened in China, what has happened in Russia. So it is in our interest to promote democracy and MAN does in the sense of educational area. People give scholarships; companies promote activities within their social environment. There is social responsibility disposition.

Yes, democracy and industry create a synergy together. You know, you cannot have it if you have a repressive environment. In the Abacha years, for example, industry was ventrally dead. There was de-industrialization during Abacha time.

Were you more consulted during military time than this civilian time?

No, civilian time is much better not because you are consulted but because you can speak out. You speak out, you can make your views known, you can take a phone and call a minister and if you want to abuse him, you can abuse him. There is that freedom that is there that you can exercise. You can see a minister in a private program, you say, look what you are doing is not right. Okay if you challenge him, nobody will call the police; nobody will ask the police to pick you up. So in that frame we try and force ourselves into the main stream even though formerly they don’t invite use. We edge our way to it and stake our claim in the environment because we are as concerned as they are. In fact we are more concerned than they are because we are the investors in the economy. So in that way, a democratic environment affords us a platform to challenge policies and to articulate our view points, and to market those view points.

How do you access the disposition of the legislature visa viz the executive to your organization?

The legislature so far has really played ignorance. They tended to pursue mundane issues. The last cycle you saw what happened. They were fighting about their allowances, about where they will live. Increasingly, they are focusing on issues, focusing on laws. Prodded by the private sector they are beginning to ask questions why we are not refining. The companies that are supposed to be prospecting for oil, when they get the oil, do they ship out all of it? No, they must now refine 50 percent for the start. If you have license to prospect for oil, when you find the oil, you must refine 60 percent. So gradually questions are coming up, people are worried about safety. What is the fire safety requirement in this building? What are the safety codes? People are looking at laws on medicine, pension reform, tax reforms. Things are beginning to happen. People are beginning to see now the legislature are becoming more alive their responsibilities. They are asking critical questions. They are confronting the people for accountability to some extent. You saw what happened last week when somebody had a contract to service a refinery. He did not perform. Then he was pulled in the legislature. So, the legislators are now waking up. Before now, they did not do that. Opposing the government, the government itself opposing the legislature, tended to see the legislature as a militant. So the environment is beginning to open up. People are now beginning to open up and this is the right thing. It is healthy for economic development and prosperity. If we don’t like what they are doing, any of them, the government and the legislature, we go to court. We went to court in Lagos State. Lagos State was trying to impose a tax on us where the governor was working in cohort with the legislature and we want to court and challenged the government and the matter is still being dragged in the court now. They where trying to impose what we felt was double taxation because federal government was already taking BAT. So this is one of the reasons these thing are happening. The environment is open, the space is widening for all of us to play and play in accordance with the rule of law. There are of course other weaknesses, the area contract enforcement, and the area of property rights, copyrights and the areas of faking and counterfeiting. There is a lot to be done. There is a whole gamut of laws that need to be improved.

In terms of attention, who gives you more attention between the executive and the legislature?

I don’t think you can compare them. They are two different windows. With the executive, we deal with aggressive issues like tariff, fiscal policies. With the legislature, you look at long term issues, long term direction, what should the law be, what should we do with regard to electricity, security and all those things. That’s the focus The legislature tends to listen more because they are not familiar with those areas and they wait on us to provide the technical information they need to build their case. So, there is a great deal of interaction and discussion of issues with the legislature. With the government, they are the executive force and therefore you deal with them logically putting your points, trying to market your view points and try and get them to see the long term benefits that will accrue to the nation if they follow such line of action. So it is a matter of negotiation.

What is the programme of MAN for promoting poverty eradication in Nigeria? You tried to hint about creating jobs. May be you need to further elaborate on that?

Yes, we recall that in the area of training, areas of skills, the manufactures are the key driving force. They provide the motivation. In every industry, the big ones tend to run apprenticeship schools. They try and run skills training both in management in terms of middle level, in terms of technical. This is the first step towards dealing with poverty. When you equip a man with a skill, he can market this skill to earn. If the man is not knowledgeable, with no skill, he remains poor, disadvantaged, and vulnerable. So, to the extent that manufacturers not only create jobs that provide daily living, they also provide enhancements of capacity, of competence that enables a man to rise. So, they are doing quite a lot in that regard. Every place where industry starts, you will see a growth there. My small company went to Nekede to start there some years ago. There was no street, there was no road. It was a track road from where the villagers went to church on Sundays. We opened it up, in a matter of 10-15 years; the place is now built up. Development has come now. So industries do act as energizer of activities both in terms of supply chain development because people earn in supply chain, selling the goods or supplying the materials. So in another point of view, I will say that industry is a key vehicle and that is why if government is talking about poverty eradication the way is not to go and give handout to people. They way is to provide an activity to empower the people. That activity can create products that can be exported. It can create products that can be sold locally. So, that is the way to go and we are working squarely in that sector.

At times, it is not always that growth and industrialization automatically reduces poverty. At times it increases the divide between the poor and the rich and it seems that in occasions it becomes necessary to develop some specific poverty reduction policies to cushion the effect.

I don’t think so, my own view particularly in the urban areas; because the urban poor will be far worse off if they didn’t have the chance to take up small jobs in the various factories that are located around. Surely, industry does contribute substantially to poverty eradication. They do that, but still giving a handout by industries is not the right way. We think the right way will be through skills, through training, through direct employment and championing of certain social services that might also help to reduce poverty. For example, in the area of health, most of the companies provide some level of health facilities and that is why you see in the cities private hospitals develop to provide that. If government was the main provider of all the health services, things will be worse.

Transportation, you have seen that company buses provide services to people. In fact, I will say that most of Mass Transit systems are related to company subsidized activities, whether it is Mobil or whether it Cadbury or whether it Coca-Cola. They all part of enabling factor in solving the problem of urban poverty.

Does MAN have a policy on corporate social responsibility profile? I read some of your literature, the only place I saw something on corporate responsibility was a mention in the annual report of 2001 and 2003 and then in the summit report.

Not MAN as an organization. What we do is to encourage our members in whatever areas they operate to play a major role and to take seriously their corporate social responsibility in the areas in which they operate. You take for example, Nigeria Tobacco Company, not only do they take health programs down the line to villages that supply them Tobacco leaves, they provide training, they provide scholarship, they provide road network, they provide even television viewing centres. Also we talk about Guinness Brewery that went to places to provide eye hospitals; they provide water services in Osisi-Oma, Ngwa. They go to many places, they provide in out-line areas. Nigerian Foundries sponsors migrant education for the cattle rearers migrant children. They sponsor teachers to provide schools for them so that they can read and write. NBL of course, you know not just in the poor areas but in the University they promote research and education funds and all that. Yes the manufactures are doing quite a lot relative to the circumstances at home because if you know the level of taxes at every level is very high. You know that. Though I don’t have the figure to give you as to what I regards as the budget, what the companies spend annually, we are right now doing something to try and catalogue. We have brought in a consultant to catalogue some of the specific things we have done and display it and show the public what we have done.

What is the view of MAN on Nigeria’s policy on environment visa vie the ability of industries to grow?

MAN is supportive of the government policies, for example, on the issue of frion (fluorocarbon), depletion of the ozone layer we were frontal in it. Most of the companies were involved in assembly of refrigerators; air conditioners complied with the requirements. It is requires a lot of investments, we have made those investments. In all the areas, we complied with the necessary laws that have been put in by FEPA in Nigeria. We also do quite a lot in the area of residual products; I am talking about the plastics area. We are unhappy with the situation with regards to pure water. We ourselves are unhappy and indeed we are discussing with the state governments particularly in Lagos to see whether we could create a ban, first of all try what we call scavenging system to collect the pure water sachets. And if that does not work, we ban it as a vehicle for delivering water. It is inappropriate. It is doing more damage because those things are not bio-degradable. We are sensitive towards the environment. Nigerian industries endavour to comply with the current rules on environmental protection. The Kyto Round of treaties on Co2, there are very few companies that are involved. The steel companies here are secondary heaters. They are not primary melting. So the level of c02 that they are emitting here is very small. Logging is also now very much reduced. Timber and plywood factories, most of them have now started replanting processes. So, there is quite a bit happening in that regard.

What is the relationship between MAN and other members of the organized private sector like NACCIMA?

Okay, we have very good relationship. As you know, in addition to each of us pursuing our own interest like MAN, NECA, NACCIMA, NASSI, we collaborate with NACCIMA and indeed we have a joint organization called the OPS committee. Currently, I am the coordinating chairman for this year. Each year, we rotate. The last was done by NECA. So NECA holds the forte to coordinate the three of us for one year. So, there is a lot of collaboration. We submit joint memorandum to government on fiscal policy. There are at times we have to meet to reconcile our divergences on tariff and all that. But that is normal, no disagreement on that at all. The meetings I am now, I attend with the president of the NACIMA and we almost have identical views on issues. So, the collaboration is at a very high level. At the highest level of administration, there is collaboration all the way down. In fact, most of the activities, we are joint members; some of our members are also members of NACCIMA.

What of other groups like Labour, I see nowadays you people work with labour on the issue of oil subsidy.

Labour, there is a new thinking in this matter of labour relations, human relations. The view is that there ought to be what is called labour market dialogue. The idea is to have the employer, labour, the government, in a tripartite arrangement so that they talk about their problem. Indeed, it is a result of this harmony that exists, this shared ideals now began to come up that we were able to diffuse the last strike. Three months ago we were in Sweden with Labour (NLC) together with Sweden officers. I was there. The Director General NECA was there and ministry of labour was also there. And we shared experiences of what Sweden has done that enabled them to revamp there economy, like a united front, like a national vision. So, instead of saying I want this, I want that, there will be a national commitment to the development. We believe in it. It is very important and increasingly there is clear collaboration between labour and us. I talk to Oshimole regularly. With his team they talk to us, we write to them, he writes to us. So, there is good cordial relationship going on much more to the discomfort of the government but it is correct. Issues are no longer issues of just wages. NLC is taking posture of what is in the best interest of Nigeria. And once you have that kind of question, your answers will be clear. It is not just wages; it is the well being of the economy, it is the environment, if it is successful it will improve the economy. When manufacturers succeed, you will pay wages, you employ more. So, it is no long narrow like when it was them the industries and us. The industries are now local industries. They are here now. Our own people are owners. Is now a national view point that MAN has to go into dialogue with labour to fashion the best policies for our nation are.

Has that platform been created?

It is coming. Yes, we are working all the time. We are in this committee now on cushioning the effect of increase in the pump price of fuel. Labour is there, Civil Society is there, all of us are there and we are looking to solve the problem of fuel and energy crisis. And you will be amazed by the quality of the presentations and the honesty and the zeal that is reflected in those committees.

How adequate is the current regime of incentives to industries?

You asked the wrong question today. Government two weeks ago suspended all incentives. Suspended everything, all the elements, about four or five elements that they used to grant. The one about the export grantee, exports expansion grant. So all the schemes that government put in place were suspended because they alleged some abuses to the scheme. That manufacturers abuse the scheme We are discussing that with the government. There were abuses but what had happened was that those who were inside, who were administering the policies, were creating their own ideas. They create documentation and use it to defraud the government. But the government was slack in its own monitoring of the various schemes. So unscrupulous people probably took advantage of this but we believe that this will stop soon. Incentives are critical in any democratic environment, where government has to privatize; the only known scheme to promote investment to promote development, to promote growth is by giving incentives that drive those things. So incentives are critical whether they are tax reliefs or whether they are grants or whatever.

We feel that today, it is inadequate but we always talk with the government on what can be done. For example, if you look at the refinery or lack of local capacity in refining, it is because government has not provided adequate incentives for people to come and invest in these refineries. So, we say that incentives are critical and necessary. They are today inadequate. They should quickly try and deal with the issue of abuses as being alleged so that we can now improve the system, clean out any abuses and try and sustain and maintain these things, instead of having policy summersaults. Stop-go; you do it today, the next day you stop doing it, you create instability, you create suspicion, nobody will trust you any more and you frighten investment.

Do you draw a demarcation between incentives for foreign companies and indigenous companies; because I see MAN seems to have open door now for foreign investments.

Yes if a person wants to invest his money in Nigeria, he should have access to whatever incentives we are offering. There should be no discrimination. Growth is growth. Employment is available for everybody. So if there is a new investor coming in, we should give him all the opportunity and all entry points. There will be no discrimination at all. What we say is that the rule should apply to everybody in a uniform manner. If there are restrictions on remittance of capital or whatever, then it should apply to everybody. So far, government is promoting local investment, but there is still a lot to be done in the area of infrastructure. The main problem is infrastructure, which creates a handicap. And currently, we estimate that the handicap created by lack of infrastructure is of the order of 35, 38 percent. That is the cost of it, you know what I mean. If you don’t have electricity, you have to have your own, you have to have your own security, and you have all sorts of things, your own bore-holes. This creates enamours handicap and that is what should be focused upon very quickly to eliminate. Once you have the infrastructure around, and reliable and steady power supply, things will improve accordingly.

It seems to me again that MAN really shares the view that foreign investment is the key to industrialization and growth.

No, I am not implying that; remember that we are in a very low technological environment. Technology is foreign to us and therefore, if you are going to make any product, you will need some developed experts and knowledge. All of what you have to try and attract by getting the incentives for them. But we are by no means encouraging foreign direct investments only. We are saying Nigerians should invest. Unfortunately Nigerians who have money tend to try and take it abroad. But the whole efforts of government is to encourage foreign direct investments that will help Nigerians to be part of the production chain in the areas they can, providing a network for them to enter a supply chain and provide the various goods. That is what the focus is.

Is MAN now totally against direct economic activities by the state, if not, in which areas does MAN still think that the state can engage in economic activities?

The state should be able to participate in infrastructural development. States are not capable of running commercial ventures and responding promptly and appropriately to the factors that guide those areas. But government can create indirect investment in large ventures where capital is required. Let me give an example, if you are trying to bring petrochemical plant, it is proper for government to say, I will provide 2 billion dollars to you, long term money, ten year money, fifteen year money, to build this because the benefit of building this is enormous on the economy; it provides the raw material for all industries to work. This investment, government can put money without participating in operating and running the industry. So, what we are saying is that government should be an indirect investor in the capital, in the resources that will fire industries. They do not have to be operators of the business. Anywhere in the world, government is a big mobilizer of capital and if you want to push for development, government has to provide the capital but it doesn’t have to run the enterprise.

Government can provide this debenture and say okay, I am giving you this fifteen-year money which you pay the interest at three percent or four percent. The company is run on efficient platform; generating the raw materials, deliver the benefits and be accountable to share holders. Yet when the government wants to sell its shares, it can now sell the shares to nationals without being involved in the day to day running of the business. The problem is that the government is incapable of direct participation at least in our own country. In other countries, Malaysia and other places, government companies run efficiently because the leadership is able to exhibit performance, able to call people to account, able to hire and fire quickly. So, performance is measured on measurable criteria within the establishment.

I was in a meeting sometime, either 2002 or 2001 where a government official said that MAN has ran out of ideas on how to develop the manufacturing sector. What do you think?

No, I don’t think so. In fact it is the government sector that we feel is short of originality and ideas. Certainly we are encouraging them to take initiative in the areas that I mentioned, infrastructure and all those and also in providing training, anticipating the needs of manufacturing sector and planning towards that very early. If you go to some countries, you find technical skills acquisitions highly developed because you cannot build industry unless you have that. Here what do you do? You abandon your schools. You don’t pay teachers salaries, you don’t provide any instruments or equipment in schools, your Polytechnics are better than just a chicken farm. So this is what we are complaining about. We have the ideas. Infact we are the ones feeling disgruntled and saying that government is not following the right policy. But by and large, some of these things have to be done in collaboration with the private sector. But the government has to come up. Government is abdicating. We don’t want abdication. We are saying government should withdraw from public ventures, but to concentrate in providing infrastructures, providing the enabling environment, providing the capital, providing the training, providing the healthy work force, health institutions, providing the regulatory frame-work to enable the system to run efficiently.

What is happening now is that government is not providing the capital?

They are abdicating, they sell this crude and get the money and share it among the tiers of government and then go to sleep.

Corporate Nigeria seems to have hijacked the government of Obasanjo. Is that correct?

No, no such thing. There are a number of people that are working in the government that were obviously private sector people. This is as it should be. In every economy, you draw from your national resource manpower to run your key areas. In fact we feel that we don’t have enough private sector people in government. There should be more private sector people in government and; also to expand the horizon of the public sector, people in the public sector should come to private sector to work.. I will like to take a man who is a permanent secretary to come and work in my company as my Executive Director in charge. Spend six months, spend one year, then go to the Port and understand what is happening in the Port. If he goes to the Port he will understand why the ship has to go. Here in our country they will keep a platform of fruits on the tarmac rotten because they need a paper stamped in few places. So it is important that the national objective is very understood that when you damage this product, it is not the man that owns it that you damage, you damage the whole nation because we loose. So we are hoping that the environment will improve to a point that we can have an interchange. It happens in the USA very much; the president comes in, goes for the best man and brings him in.

What is the relationship between MAN and corporate Nigeria?

Corporate Nigeria is really a jargon. Corporate Nigeria is a small group that started working with the Stock Exchange to promote Obasanjo’s interest. It started during Abiola’s time when the corporate world felt that Abiola was a corporate mogul that people should participate. So when the time came Ndi Okereke Onyiuke mobilized members of the Stock Exchange to go and support Obasanjo. Somehow, it is selfish a bit but it has happened. We have no quarrel with them. It is a free environment. But I think what is important is that the government that is operating our country must be one that have people of experience, people of integrity, people of honesty, people of honour. That is how to create the kind of stimulus we need to attract the people coming here to invest. And systems work, not in a place that is riddled with graft and corruption as it is today. We don’t want it; we want an improvement within that.

Who are the enemies of the manufacturing sector in Nigeria? Who are those that constitute menace to industrialization?

Smugglers, fakers, counterfeiters, these are the guys who are doing damage. In every product you see, you find people, unfortunately, most of them are from the East who are faking counterfeiting, smuggling.

Eastern Europe or Eastern Nigeria?

Eastern Nigeria. The counterfeit trade is supported by them and this evil. People develop their products and achieve market dominance and the next day people go and make substandard products, call it the same name, come and create confusion in the market. This is a retrogressive step. It is one of the biggest sins. Another problem that is very pervasive is corruption. The day we begin to reduce corruption, just reduce it.

And who are those that are corrupt?

In both private and public sectors there are people in both sides that are corrupt, because government says that if there is no giver, there will be no taker.

Do you consider the bureaucracy an obstacle?

Bureaucracy is a big obstacle. But a trained bureaucracy, an efficient bureaucracy is a spur to development. France is one, France has a very efficient bureaucracy and if you see it, their institutions work. USA is also a very big bureaucracy but they work. They don’t lose sight of their objectives. The national interest is the premium, it is the major element.

Do you consider what they call comprador class a major problem?

Yes, even today they give the wrong view of wealth and what to do with wealth. Their wealth is not anchored on productivity. It is a fruit of corruption and therefore misleads the community, misleads the people and that’s the point we are making.