…Says investor who supported subsidy removal
Nigeria is in the straights and hyper-inflation today because President Bola Ahmed Tinubu failed badly in two actions, so said a Port Harcourt-based mega investor and president of the Rivers Entrepreneurs and Investors Forum, Ibifiri Bonmanuel.
In an interview in Port Harcourt to review the runaway inflation after fuel subsidy removal, the man who heavily supported the removal said the president was very wrong to return to import licensing for a commodity that had just been deregulated.
The next, he said, was instant floating of the dollar against the naira, thus massing pressure on the naira.
Bobmanuel, the CEO of Nigeria’s tractor manufacturing company, Bobtrack Tractors, said Nigeria cannot deregulate and regulate at the same time, he said the havoc it caused will never be solved easily.
He said: “Deregulation is a simple thing. It simply means remove your hands from regulation. Allow the forces of demand and supply to decide things and take preeminence.”
When this is happening, he noted, do not go to the back to manipulate things as we have done now.
“We say we are deregulating, you don’t go back to start awarding licenses to people to import fuel, thereby deciding who imports and who does not. When you introduce licensing, you have simply introduced monopoly. This builds up into a cartel. You have allowed monopolistic tendencies to play out, and you can’t determine what happens at that point.”
Bobmanuel said Government intentions are good. “You want to deregulate, good. Allow market forces to take preeminence, and when this happens. Government does not need to know those who want to import fuel (PMS).
“Government only sets standards of quality and type. Finish! You must bring fuel that will meet this standard. The importer does not need to come to your office or to know the president to import. Wherever I get cheaper premium motor spirit (PMS), I bring in. This is real competition. The masses gain.”
In this case, he went on, you said you have deregulated, but you have provided bottlenecks that would not allow the market forces to work. “It is the cronies that have the licenses and go ahead to import. When cronies import, they monopolise the market. And its this monopoly that we are fighting against. We destroy it at downstream (pricing), we erect it at upstream (importation).
“If I want to import a shirt or car, I do not need any license? So, do I need license to bring fuel, what is special about it?
“Immediately he took out subsidy, I jumped for joy. One week after, I was shouting against licensing system. That is anti-regulation. Why give with one hand, and take back with another, now with devastating effect?”
He said because all of that has happened, Nigeria has gone to a new clique, and this new clique is worse. “They call themselves ‘deregulated clique’. That clique is the one causing this.
“We say we will not pay subsidy on pms but when you have such a clique, you go back to what you rejected, especially in an environment such as our. Monopoly will always dictate.”
Another major policy failure that caused havoc is that before you lift subsidy, you were going to look at all the factors around it, the shocks, how to mitigate them, etc. But this was not done, he added.
“Government began to promote gas (cng) but gas is also about hydrocarbon. Nigeria got some funds on subsidy removal but the funds and processes were not managed well; alternative means for everyday commuters. The downtrodden of the society affected are about one per cent. If you look at the grading. Impact on them is the most but the effect is less. The extremely poor can’t survive the removal of subsidy. So, government would have addressed their number one impact being transportation.”
Path not taken:
Still talking on the path not taken, Bobmanuel said government would have looked at what would affect their source of livelihood, transportation. “Railway will be too expensive and long term, so look at immediate action. It would have been to invest in electric cars, not cng. “CNG has some characteristic as byproduct of refining, something Nigeria has proved ineffective on. Government should have gone into partnerships with local investors to go into mass production of electric cars. This is turnkey.
The China example:
I was one of the guests in China where TunTun had a flag off with Uzbekistan who bought 20,000 units of the cars. If government had done such a thing, in three months, everything would be ready.”
He said the price of transportation would have remained so, or less. “It would have been a win-win. The other 90 per cent would have to take care of themselves with their many cars. The car owners can face the fuel price while the lowest of the society would ride at normal price. This would allow the subsidy removal to settle and stabilize.
“I wrote to the government on this. If government had taken this route, the result would be different today. Nobody would be talking of fuel. Ideally, the pump price is N1200. Govt is subsidizing it. Now, they have gone back to subsidy, even at higher levels and costs. It is policy flipflop. When you don’t do the right policy, you pay for it manyfold. Think before you act. That is where we are.”
He maintained that the two policies were good: subsidy removal and floating of naira. “If they were well implemented, Nigeria would be flying today. Transportation is big inflation factor. The two policies bombed Nigeria. The government needs to understand what it takes to think out policy and steps of implementation.”
Tractor boom but woes:
Nigeria is celebrating mass deployment of tractors in Niger State, but Bobmanuel said it is not all glory and celebration.
“I really weep. In a country where we have few jobs and you got the opportunity for 1000 tractors, and you took that money to another country to buy tractors that are not built for your env, and you come to celebrate.
“I think that is why Nigeria will remain this way. I commend heroes like Paul Kagame of Rwanda and other African leaders that are looking at creating jobs at home instead of exporting value and importing items. That money might have bought more tractors if they had worked with a local manufacturer. Also, the maintenance package would have been great. This would have deepened the mechanization and tractorisation process in Nigeria.”
He said whatever one says, one must know that only massive tractorisation will save Nigeria. “The records show that Nigeria’s greatest asset is arable land. So far, Nigeria is indicated to have 60 per cent of Africa’s arable land. Africa has 70 per cent of world’s arable land and for Nigeria to have 60 per cent of that, it means that Nigeria is a potential global agric powerhouse. That amount of arable land means that the chunk of world arable land is in Nigeria.
“Some people clap for it but I see it as rather a challenge. If America can exhaust their share of arable land while we are here clapping that we have 60 per cent. If you go to America, you will find that we are two different worlds apart.
“Our climates are not the same at all. So, their tractors are designed for their environment and not for our land. If you bring theirs for temperate climate to our environment, how do you expect it to work.”
It will never give you the service, he stated. He added that countless governments in Nigeria have spent billions of Dollars on tractors that packed up soon after. “Most of the huge debts recorded against Nigeria is from such loans especially on tractors. They were used to procure tractors they knew would not serve us. They just dumped them on us. It cannot serve us because it was not built to serve us.
“We have ours that designed and built to serve us, create jobs for us, etc. So, as a government CEO, you should rather be marketing your product from Nigeria here to America. You should be telling them to buy some of your tractors. We are exporting tractors from Port Harcourt here to Kenya, to Rwanda, to Ghana, and you are importing tractors to Nigeria, and you say you want to stabilize the naira, how? You cannot stabilize the naira with this kind of mentality.”
Bobmanuel believes the current administration is working round the clock to see that they make ends meet and turn the trajectory in Nigeria. “The first step is that the government be it the president, governors or local government chairmen, they need to identify those businesses within their domains and see them as their number one priority and partner and make themselves as the number one marketing agents of those businesses. This way, this kind of flaw would not happen.”
How Nigerian tractors sold out in China trade fair in minutes
Bobmanuel said government officials should have known that they have tractors from Nigeria that are global beaters. He said Bobtractors were taken to China for an agric exhibition but they sold out in in minutes. “We were working the papers to bring in more but government officials there got the wind. They said, wait a minute, is this a Chinese tractor? We said no, we are from Nigeria. How did you make your way into the Chinese market? We said, well, we were invited for an exhibition. They said; no, no, no. We have Chinese tractors here, we are going to be selling Chinese tractors.”
He said that is why China is like this. “Today, China and America are having a back-and-forth. It is basically a trade war. They want America to buy as much of their products, America wants them to buy as much. What stops Nigeria to begin to promote Made-In-Nigeria? You are travelling to America to buy tractors, carry the representatives of Made-In-Nigeria tractors along. You don’t need to ask for tractor, tell them to give you loan to buy Nigerian tractor. They will give you. That is the seismic shift we need to address. Not until we get leaders that will get to this level, we won’t know what we are doing.”
He mentioned Innoson doing motor, NOD doing cars, and Bobtract doing tractors. “When have you carried Innoson, NOD, and Bobtract on your delegation to your trade meetings? Those other countries come with their real manufacturers or investors in their locally made products to talk to you, but we Africans come empty-handed to the table with our cheques. That is why we worry. At any opportunity you buy home tractor, you have created opportunity for jobs, for taxes, etc. We must begin to get our leaders to see the dream of our country, which is when we begin to see these things happen.”
He however gave Niger State the path on the back they deserved for the brave mind to invest massively in Agriculture or tractorisation. “But on the other hand, I weep over the opportunity lost to boost local mechanization and investment. Many other countries are buying Made-in-Nigeria but you are buying from outside.
“If we didn’t have any tractor company in Nigeria, you would ask them to come and invest in Nigeria. You will tell them that since there is no other manufacturer here, that they would have the exclusive market. That’s how it is done. It works. That’s the way to go.”
