Kikelomo Longe is an investment banker, a team lead at the world renowned African Capital Alliance who raised US $1.2 billion across private equity funds and real estate funds from local and international institutional investors prior to joining Ogun State Government last year. An Accounting graduate of the University Lagos (UNILAG) was brought from United Kingdom last year by Ogun State Governor Dapo Abiodun to be appointed as the Commissioner for Industry, Trade and Investment, having changed the name of the State Ministry from the Ministry of Commerce and Industry to further drive and attract more local and foreign direct investments to the State. In this interview with Razaq Ayinla, Southwest Bureau Chief, Longe spoke about several steps taken so far to ensure business-enabling environment for both existing and prospective investors as well as entrepreneurs in the State. Excerpts:
It is exactly one year of Dapo Abiodun’s administration in Ogun state and before, his government, Commerce and Industry was a major channel where revenue and foreign direct investments came from, one may want to know what you are doing in the last one year?
Let us look at fundamentals that drive economic growth in a State like Ogun. I will like to speak first on entrepreneurship in conjunction with MSME in which I define as business that employs less than 200 people which makes up of 90% of businesses in the country. His Excellency, the Governor of the State has always indicated the importance of this segment of businesses for our State. Very early in his administration, there were quite a number of initiatives that took a number of policies that he set the direction to that set up this MSMEs to a good start in our State, so much so that the Association of Small Business Owners gave him a national award as the most SMEs supportive Governor for 2019 and closely link to the that is that my ministry, the Ministry of Industry and investment in the State was given a National award of the most supportive State Ministry across the country and that is a testament of the importance we hold this particular sector given that we go extra mile to ensure they succeed. For policy perspective, we have also established an agency described as the Enterprise Development Agency and this agency’s role is largely how to provide business advisory services to this category of businesses to help them grow their network, to mentor them, to help them build capacity and also support them in the area of policy advocacy and ensure that the environment in which they operate be more friendly for them to thrive. These are some programmes we run during the course of the year that really evidences the passion of his Excellency for helping MSMEs succeed, we had a number of capacity building programmes and this capacity building programmes is aimed to train the entrepreneurs for various things, from the very basic things like writing business plans, how to access loan, how to improve the access to market and how to generally scale up their businesses for better success. Examples of this programmes are the MSMEs business clinic with over 5000 attendees across all three Senatorial Districts in which we brought them together with various the stakeholders, this include some of the regulatory bodies that they interact with, in the course of their business, like the Corporate Affairs Commission (CAC), National Agency for Food and Drug Administration Control (NAFDAC) and other regulatory agencies they we come in contact with, when doing their businesses quite frequently. We also invited business member organisations such as the Manufacturers Association of Nigeria (MAN), Chambers of Commerce, Mines and Agriculture and it was a nice avenue for these entrepreneurs to come in contact with various stakeholders that they come across in the course of their businesses. We also did have some partner banks who have supported the programme in which at the end of the programme we were able to register over 550 new businesses, some of these entrepreneurs who have been carrying on as sole proprietors and saw the benefit of becoming formal and then went ahead to register the businesses at the Corporate Affairs Commission Desk at the location. We also were able to get some of the businesses to open bank accounts at the financial institutions present and so over 2000 new business accounts were opened with these banks that came. The business member organisations also registered quite a number of assistants, over 4,300 members and the advantages of these business member organisations include just being able to speak with one voice, so you have homogeneous groups coming together and being able to present their concerns, their suggestions, their issues to member bodies and to the power of numbers, they are able to come together to solve issues, enhance their strengths just by coming together and this has proven quite effective and it is not just in Nigeria that you have these business member organisations, we have them all over the world. In September just a few months into this administration we had a training programme for entrepreneurs and about 159 entrepreneurs were trained and like the other one, it was a capacity building programme and it was in partnership with (SMEDAN) Small and Medium Enterprises Development Agency of Nigeria and on completion of that programme we issued certificates of completion to the various participants. In the area of Gender Empowerment, we have had a lot of programmes focused on women, in February the Office of the First Lady in Collaboration with the First City Monument Bank in which we trained a 150 women entrepreneurs in the State, the icing of the cake was that the women were able to access loan from First City Monument Bank in which 40 of them got loans and we about carrying out another programmes for 200 entrepreneurs in the private sector before the Covid-19 lock down and when the coast is clear we would run that programme and we would be working in partnership with one of the Central Bank of Nigeria (CBN) approved the Enterprise Development Institution where we would train business owners on various aspects of improving their businesses, including writing business plan and setting strategic direction for their respective businesses. In the area of women activities, the Office of the Deputy Governor working in collaboration with my Ministry had a programme that empowered 500 women in the rural areas across the State to support their retail businesses. What we did was to bring these women together in contact with some leading Industries who require distribution outlets for their products. Historically some of these women might have been retailers, i.e main distributors, sub-distributors, retailers and sub-retailers so that by the time it gets to them the margins are narrow. But this kind of programme, bringing the women in front of the manufacturers, was able to reduce the number of middlemen and improve the margins of the women and you can imagine what it will do to the psychics of these women, how motivated they will be that they are getting to meet some of these brands who then give them hints and tips on how to display their products, how to sell better and so on. Finally in the area of programmes, it is a factory tour that we have organised for Secondary Schools in the State. Really it again about entrepreneurship, how to expose them early, make aware on what entrepreneurship is, how can they get themselves to do it, it is just about giving them that entrepreneurship mind set, as you can also be a full time worker and have that entrepreneurship mindset, as you are working to achieve a purpose, so just start, all the things that have to do with entrepreneurship, planning, costing accounting, sales and how to bring all the elements together. Catching them young we call it and we did it for 150 students across all Senatorial Districts in the State, the plan was to do it for 150 students but we have only done 30 in the Ogun East Senatorial District, but we will continue with the other batches after this Covid-19 pandemic. Another key point I would like to talk about is improving the business-enabling environment in the State. As you know, it is good to develop entrepreneurs, it is good to attract investments into the State. What then happens when they arrive in our State, there is a ranking the World bank does periodically, it is called the ease of doing business and now it has been replicated in the sub national levels i.e State Level and it determines the ease of doing business in a State and one of the key routes to this, is the establishment of what is called the Ogun State Business Environment Council and the objective of the Council includes improving the States’ ranking in the sub-national World Bank Ease of Doing Business, the Council we also look at how to streamline regulatory processes and the timing it takes to do business in the State. Right from registering a business, paying taxes, getting construction permit and so on. Any moment from now the Council will be inaugurated, membership has already been confirmed an Executive Order was signed last year on the Ogun State Business Environment Council. As you know, the World Bank gave approval for the Ogun State Economic Transformation Project, that was February of this year and part of that project is improving the business-enabling environment and it is very much aligned with his Excellency’s vision for the State. Some of the programmes around improving the business enabling- environment includes a diagnosis programme, why I call it, diagnosis, is because the objective is to understand the perspective of the organized private sector in our dear State. And in 2019, His Excellency met with 139 CEOs across the State in a forum to dialogue directly with these CEOs (Chief Executive Officers) to understand their experiences, what are their concerns, how can we help, what are we doing right, what do they think we can do better and so on and it was a success as they spoke to the Governor and it was an opportunity to get feedback from them on some of our policies and programmes, what do they feel about it, what should we improve, what should we continue to do.
In the area of foreign direct investment, in January his Excellency made a delegation to the UK for the UK Africa Investment Summit, and it was successful as we did have a number meetings on the sidelines of that summit and on the back of that, a number of UK-based investors showed interests in coming to Ogun State, indeed one or two of them have visited us to prove their investment plans to State, but this pandemic has put things on hold and we are looking forward to re-igniting some of those discussions post COVID-19 and go back to normalcy. This FDIs are welcome because we can’t do it alone in Nigeria and when they come, they come with capital, skills, experience; experience from similar business environments around the World that they have invested in, some of those lessons learnt could help us hit the ground running, we just provide the local environment, and where necessary, we patch them up with local partners, we provide infrastructure, what they need to establish we provide for them. And when they do come to establish businesses, it creates jobs and the entire multiple effects of bringing investments into the State. We also started last year quarterly stakeholder engagement, this interaction is to just deliberate on issues that may be critical for operations of businesses across all sectors in the State. The ones we had in the past were attended by different government agencies, regulators and members of the private sector, we partner with business member organizations to run this because they have the membership and have access to the target audience. This includes the Manufacturers Association of Nigeria (MAN), National Association of Small Scale industrialists, Association of Small Business Owners and so on. All this is just about diagnosis and finding solutions to the identified issues. We want it to be interactive and a two-way feedback thing. Another area I would like to talk about when it comes to business enabling-environment improvement is the area of taxes and levies. At the beginning of this administration, we received feedbacks of multiple taxations, duplications in some cases and clearly we found the need to harmonise these taxes and so an inter-Ministerial Committee was set up to look at the revenues and taxes and eliminate duplications and multiple taxes. This Committee has finished its work and their report will be published soon and I would say confidently say that their report will create more transparency and will improve tax obligation situation in the State. The third area I would like to talk about is the trade promotion but before I mention like you to add this in your report is that our Ministry was changed from Commerce and Industry to Industry, Trade and Investment. From the two nomenclatures and first of all we are aligning with the Federal level because at the Federal level it is called Industry, Trade and Investment and if you look at commerce and trade, it’s the same, industry is industry we then added investment, investment is being able to attract capital, much needed capital to come into the State to then help the economic growth, recognising that we can’t do it ourselves, we can see that it was implied in commerce and industry but beyond that we wanted to make it more explicit, we need this investment. If you look at the sum of money we require to run this economy to help Ogun State achieve its goals, objectives, its vision, we need capital to do this, which is why the Governor is very keen on Public Private Partnership (PPP), we passed the PPP Bill and very soon we are establishing the PPP Office and announcement is coming soon on that. That investment aspect, we believe we should also include it in the name and also as part of our functions. We also set up the Investment Promotion Facilitation Agency and it is largely responsible for helping us attract these investments, creating a one-stop-shop and when those investors come, they are to handle them in the various processes, they need to do so, to establish their businesses in the State. The third area is around trade promotion as it is important to help showcase what we have as a State to the potential markets. Here in the State, we produce Adire, Agric produce and different things that are quite needed by different markets and so the Ministry champions the showcasing of these products to the extent that we can. When it comes to Trade Fair, we participated in the Lagos State International Trade Fair in 2019 that was held in November and we were there for about a week with different products and services from our State and it did expose our entrepreneurs to different markets and help their businesses grow. We don’t know how 2020 will play out, before Covid-19 we were planning on how to host our own Trade Fair in the State but with all that is going on, we are evaluating on how that will play out. We are also keen on supporting our traders as we have a number of markets in the State, sadly there was a fire outbreak at the Olabisi Onabanjo International Market in December last year and compassionately his Excellency did provide compensations for the traders that had losses during that fire outbreak and that shows we are quite supportive of our various stakeholders, be it manufacturers, be it traders we are really quite supportive and we are taken steps to ensure that we increase the risk mitigation which includes fire prevention activities in the various markets, dispensing a number of trucks, including strengthening the agency responsible for fire prevention and control and also advocacy, educating the traders on how to reduce this risk. The last area I will like to cover is the area of solid minerals. The State is one of leading solid minerals state and you know the State is blessed with huge deposits of limestone used in the manufacturing of cement and the State alone has three big cement producing companies, which is quite big for the economy of the State. We also have granite, other minerals, including precious stones, some of which have not been explored as we speak. We are working out a way for the State to benefit from its natural resources, two additional minerals were discovered last year and we hope to discover more and hope to get a lot more from this particular sector in the Ministry.
It is observed that the manufacturers in main industrial hubs in the state are being faced with three pronged problems which are decaying infrastructure, multiple taxation and indiscriminate closure of firms for alleged breaking of environmental rules and guidelines, what are doing in that regards?
Going back to your question in which you mentioned the challenges of industries in the State as decaying infrastructure, multiple taxations in which I have spoken about already and use of environment. Let me start with the last one on environmental challenges. The Ministry of Environment when they did their preliminary audits, realised that a lot of companies have been rather non-compliant with the standards that are expected of them. Sometime in February, a team went out led by the Commissioner of Environment himself to begin to check for their compliance and some companies were sealed off and that is just the beginning as we are going to be firmer now because it is right in the interest of the environment, the interest of the neighborhood and in the interest of the companies themselves and the employees of that company to ensure that you meet all the environmental protection guidelines and that is going to change, we have issued warnings to companies, we will be very stricter now with monitoring that, I will say that the members of the public should just give us some time and this will be addressed.
What about decaying infrastructure in places like Agbara, Igbesa, Sagamu, Ogijo and others?
In the area of infrastructure around industrial parks, that is also a key concern for us as companies ought to have access to their businesses, you have to be able to take your raw materials in and take your finished goods out to the market. There are a number of initiatives ongoing to address this, I mentioned earlier the PPP sector, this infrastructure the State cannot handle it alone and we will go into different arrangements that will find for the improvement of this infrastructure. Infrastructure requires a lot of money which the State cannot just drum up and so we are looking for creative ways to address the issue. As you know government is a continuum, we will paddle through what has been done in the past because it is still Ogun State Government, we are coming up with optimal solutions, we are going to take what is in the best interest of the State, the best interest of the people and what makes most sense under the circumstances but clearly our objective is to get this infrastructure improved at the best cost and hopefully the timing will also be attractive.
Remember that the State Government is taking concrete steps to ensure that he farmers and agriculturists are able to supply produce for industries with an aid from Government in form of arrangement which allows linkage between the farms and processing and manufacturing firms, are you still on this programme?
A. I am very happy that you raised that point because it is very fundamental indeed, the OSTECH project that I mentioned earlier has three components to it, we have the improving the business enabling environment component, upgrading skills that has to do with education and helping in skills development, it has also improving agricultural value chains. The farmers’ business will do better if whatever he/she grows he/she is able to sell at a good a price and it is somewhat predictable, and you know about the CBN’s Anchor Borrowers Programme and that just helps to strengthen the relationship between the various value chains, the farmer that is growing, knows who he is going to sell to, what price he is going to sell, and the appropriate time he is going to sell and so it is predictable. Just yesterday we had a session of all initiatives that we are planning post Covid-19 to help the teaming youths in State and it is still evolving, however a key component of it is agro processing, a lot of this produce from the farm. How can they be processed or semi – processed for the next users? Who will then add his own value and pass it on to the next users? We are excited about it, it is a game changer, it will create a lot of jobs, it will engage a lot people and we are quite happy to be in the middle of delivering this in collaboration with the Ministry of Agriculture but more details will be revealed and we are quite excited about that as we believe agro processing is one and we believe we can add value to this products, add value to the lives of the farmers, create jobs for our people and have produce for people to have access to.
Ogun State definitely has incubation centres and parks where young people can learn and acquire vocational skills needed to be independent, what are you doing in the area of skills acquisition?
We know we have a number of technology experts that are coming up with products and services, there one or two breakthroughs that you will get to hear about in the coming weeks, we trying to make sure that the cost make sense, once we find out and find it comfortable with the economics, those are things we can engage, quite a number of people and we are quite excited about them as the centre for technology incubation is doing quite a lot for us. It is an incubation centre and people come with a lot of ideas, they play around with it and out of the so many, you get a number of hit, breakthroughs, discoveries that can lead on to other things. You will get to hear more of this especially we are seeing more opportunities as China is not much of a favourite as it’s used to be giving all the favourite, because of some issues and so a lot economies are looking elsewhere, where can they get stuffs from and we think that we stand a good chance in this part of the world, once we can make them comfortable that we are reliable, trustworthy and the quality of what they need we can get, I think there is hope and apart from that the local market is so big anyway, there is a lot on ground, it is just to make sure that it is affordable, the prices make sense and you can get value from them.