Kright Global Trading (KGT) is a company that is using all the available resources at its disposal to tapping into the Nigeria robust economy. In an interview, the opportunities and challenges of firms operating in the sector were expunged by the company’s top shot.
Can you please tell us about your company?
Kright Global Trading is a general commodity trading company with interest spanning over 35 general products. There’s a lot to be done to help fix the imbalances currently facing the international trade market in Nigeria, and we simply want to be part of the solution. What we are bringing to the table is improved technology solutions. Global economy is in a state of continual change, and, as it develops, so must all its participant. Kright Global Trading is involved in a wide range of business globally that includes, buying, selling, import, and export.
What are the challenges of commodity trading companies in Nigeria?
Commodity trading is a broad category where the players range from individual ranchers through to multi-national trading house. From our end, I think mainly it’s in soft demand for locally produced commodities. And the government, they complicate things for traders. Easy processes and a scalable technical infrastructure that can navigate today’s challenging fiscal and regulatory environment would help better position commodity trading companies.
Is government doing enough to support Small Scale and medium Scale Business in Nigeria?
No. They are not doing their best. There’s a lot that can be done to improve small businesses. Barriers to market entry remains high. Businesses rely on government to create an enabling regulatory environment. Bureaucracy can spanner to work. We need functionality processes that work
A lot of firms complain there are difficulties accessing loans from lenders as most times they demand high interest on such loans, are banks giving loans to support your business?
We haven’t approached them yet. But we heard the processes are being made easy and they are excited to offer loans to business owners.
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Do you see the devaluation of the naira driving costs of Fast Moving Consumable Goods Companies (FMCG) firms since most raw materials used by these firms are imported?
Of course there is panicky over the ripple effect of naira devaluation because these raw materials are mostly imported. Importation of these materials would be slowed right now because cost of production has increased and this will retard productivity. Customers too, they are being affected by the downturn and they presently may not be able to purchase these products, leading to increased inventory in factories. High inventory of finished goods will result to cut in production, lay-off of workers and massive unemployment. And that’s really bad for the economy.
How can government fix the imbalances or ameliorate the sufferings of international market operators in Nigeria?
First off, the government plays a huge role in this market. I must say international trade plays a vital role in shaping the economy of every country. No developed country has grown without trade. Import & export plays a key role in the international trade market
The local manufacturers are not encouraged. Now, the ratio of international trade market in Nigeria sits at 92% import to 8% export as the container market is being dominated by imported items. Given that, most of these commodities are within our production capacity. It doesn’t make economic sense to have a nation import commodities that are within its production capacity.
Huge amount of money is being spent on the importation of rice annually. How do we encourage local manufacturers?
The government should encourage local manufacturers and not strangle them out of business. There are a lot economic gains in manufacturing. There are also vast natural resources based exports potential out the oil sector that can provide huge employment opportunities and sustain the non oil economy. It is not only in the rice sector that the government has showed non interest to grow the economy. Nigeria used to be one of the largest exporters of cassava, groundnut. According to research, before the oil boom many, many years ago, the economy of Nigeria was relatively balanced with each principal economic sector, namely agriculture, manufacturing and services, contributing its fair share of development to the total national GDP. Then, the dominant role of agriculture in Nigeria’s economy was such that with very little support from the government, agriculture was able to grow at a sufficient rate. The little support given by the government to agriculture development was concentrated on export crop and natural resources like cassava, timber, yam, cereal etc.. Evidently, Nigeria had a vibrant rural economy. Apart from oil & gas, Nigeria has vast deposits of solid minerals such as iron ore, coal, zinc, barite etc. Now, the Nigerian export of agricultural produce has steadily declined, as many, even the government now relies on oil & gases hence the absurd imbalances in the statistics. the international trade in Nigeria resolves around the oil and gas sector because of the abandonment of other sector by the mass and the government. Agricultural activities however still remain the main activity of the majority of people country wide. The federal government of Nigeria needs to put more effort in encouraging local manufacturers to produce more.
With the rising population in Nigeria and a burgeoning middle class that crave for consumption, do you see these opportunities as driving growth of your firm?
In the long run, yes. The demands are really high and you can guess the future. It’s no surprise that a nation with over 170 million people has a high consumption rate. The market is saturated; however demand for better and cheaper product remains high. There is market space for anyone who can meet the growing demand of consumption in Nigeria.
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