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The African SME story: LPG for Nigeria’s growth

The African SMEs Story, hosted by Linda Ochugbua, aims to propagate hope, telling stories of businesses across Africa and sharing from their knowledge and experience on how their businesses run and how they are surviving through the COVID-19 pandemic. It is an initiative of Support4AfricaSMEs, in partnership with Business Day, Clarke Energy, Sun Group and more.

The latest episode features Gboyega Olokunbola, CEO of Habitat Group, Nigeria. Gboyega has had a long-standing interest in the environment, despite his accountancy degree. Habitat Group began in 1998 as an environmental advocacy and management company, and had a television show called Environment Live. The company has since encouraged interest in environmental management, trained local government workers in environmental protection and management, and diversified into construction. Habitat Group promotes sustainability to save the planet from carbon emissions and greenhouse gases, with a vision also to support SMEs in Africa to be sustainable.

The company also works to break down sustainability concepts to help educate Nigerians, because Gboyega believes we have this decade to mitigate against the urgent climate crisis. It is connected to world class brands, tailored to protecting the planet, that manufacture environmentally friendly air conditioners and gas generators, and is also currently seeking distributors for Ecomask, a new brand of masks from partners from Italy, to ensure safety during the COVID-19 period.

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Gboyega emphasizes that Liquefied Petroleum Gas (LPG) has the potential to be the biggest energy generator in Nigeria, and gas generators reduce carbon emissions. Habitat Group is looking to develop the biggest digital platform for LPG usage in Nigeria. Despite Nigeria being the 9th biggest gas producer in the world, the country’s LPG adoption rate is about 10%. The main market for LPG adoption, he notes, should be low-income Nigerians. The widespread adoption of LPG in Nigeria will also greatly contribute to environmental conservation and will improve air quality and overall health. The use of firewood and charcoal for cooking, mainly by low-income Nigerians, are major sources of carbon emissions into the atmosphere, and are derived from deforestation. Forests house greenhouse gases that are released into the atmosphere when they are cut down and burnt.

Many cannot afford gas stoves, and cannot afford to refill cylinders as often as necessary either. Hence, there is a need for a model that makes it easier and more affordable to scale up LPG adoption for these Nigerians. Habitat Group is partnering with other companies and telecommunications firms, to design a model together to help Nigerians access prepaid gas services that can be paid for with USSD codes, allowing a user to pay as little as ₦100 for metered LPG.

The LPG model run by Habitat Group works with agents all over the country, who need to be trained, because there has never been a properly designed supply chain for LPG in Nigeria, just apprenticeship and word-of-mouth. Entrepreneurs interested in setting up gas plants will need full certification from the Department of Petroleum Resources at every stage, but Gboyega notes that it is more important now to invest in LPG distributors. Habitat Group tries to support many small businesses, and is playing their part by making available affordable tricycles for efficient distribution, which can be a major business opportunity for SMEs to work with gas plant owners to assist in the value chain. However, it is not a business with a large turnover, and is based on client numbers. If SMEs are willing to put in the work, Gboyega notes that the LPG sector can create two million jobs within two years, especially with collaboration and digital innovation in the sector.

Speaking on the role of government, Gboyega acknowledges that the government clearly has several projects they are working on to help various sectors recover faster, and notes that their role is to provide an enabling environment that the private sector can capitalise on to help the economy bounce back after the COVID-19 crisis.
His advice to African entrepreneurs is to be resilient, to look inwards to develop themselves, and be innovative, as the continent has potential and much to offer the world.

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