Rand Merchant Bank Nigeria (RMBN) has challenged businesses respond with agility and adaptability in an ever-changing business climate.
The bank gave the charge in its second webinar series themed Turbo-charging Beneficiation and Value-addition.
This year, through a series of webinars, RMBN’s Economic and Business Conference has turned its focus on how Nigerian businesses can embrace value addition for economic growth.
In his introduction, Michael Larbie, CEO and MD of RMB Nigeria, and regional head of West Africa said, “Beneficiation could transform Nigeria’s competitive advantage, increase economic growth, industrialization and create jobs in the country. We need to embrace value addition as a nation in Agriculture and mineral resources to promote the export of finished products and simultaneously reduce imports.”
The session was moderated by Ngover Ihyembe-Nwankwo – head, coverage, RMB Nigeria. She noted that as economies begin the gradual removal of restrictions to jump-start economic activity, there is widespread recognition that the pandemic will cause nations to reassess the status quo where comparative advantage forms the basis of international trade and move towards self-reliance and sustained surplus trade balances.
Yinka Adelekan, CEO, Agusto & Co, provided the macro-economic context. She highlighted that although the economy is moderately diversified across various sectors there is a need to significantly improve Nigeria’s fiscal position particularly in the areas of export earnings and beneficiation & value addition across key sectors including agriculture and mining. Nigeria has several opportunities to refine raw products, adding value to local producers, communities and the economy.
Olukayode Pitan, managing director/CEO, Bank of Industry, elaborated that Nigerian businesses need to make the most of Nigeria’s internal resources, as opposed to exporting them as raw materials. However, in order to achieve this, there needs to be skills, infrastructure and access to finance. He noted that some of the impediments to business are Inflation and Interest rates on borrowing for capital projects being high, and some inconsistencies in policies. He affirmed that the BOI, in addition to providing single digit and long tenured facilities, is also committed to advocating for policies that support Nigeria’s Industrialization to create easier access to infrastructure for businesses, create jobs and promote inclusive growth.
Alex Osho, CFO, Waltersmith, highlighted negative mismatch between the revenue the country receives from crude oil exports vs the cost of importation of refined products and the pressure it puts on the Naira. He noted that, as a business, they identified leakages in the import/export supply chain over time and this was one of the motivations for setting up the refinery.
By refining locally and creating import substitution to support the regional market, Nigerian business can create a means of insulating themselves against the ups and downs of the global market. He emphasized it is time to break through boundaries and start working together to create solutions. Beneficiation and value addition are the bedrock for a thriving economic ecosystem.
Oluyemisi Iranloye – Founder, Psaltry International Company Limited, highlighted the challenges of breaking new ground in the field of adding value to raw agricultural products as she worked with local farmers to produce cassava and refine it into value-added products fed into multi-national value chains. However, once the processes were in place, they were able to increase manufacturing in rural areas and produce all year round. It is important to note that the farmers also grow with the business in the pyramid and gain the knowledge on how to increase production for a wider market. This is an example of a local business playing a large, sustainable role in import substitution and creating inclusive growth.
In closing, Ngover Ihyembe-Nwankwo – Head, Coverage, RMB Nigeria emphasized that while the process adding value to raw products requires some challenges in terms of infrastructural setup and investment, the economic and social benefits are significant. The COVID-19 crisis, paired with the fall in the oil price, is a call for us to innovate with the resources Nigerians have within reach.
The RMBN webinar series continues until July 9, 2020. The registration details are available on their website www.rmb.com.ng and you can email email@example.com for more details. RMB Nigeria is a subsidiary of FirstRand, one of the largest financial services groups in Africa.