• Monday, May 27, 2024
businessday logo

BusinessDay

‘I’ve not seen any significant sign showing that recession has subsided’

Second recession in 5 years causes heavy breathing for marketing communication industry

Sunday Ezeobiorah, chairman, Sunnchi Integrated Farms, Enugu, in this interview with REGIS ANUKWUOJI faults the claim that Nigeria was out of recession. He also says that the economic challenges of the country are as a result of poor implementation of policies and non-involvement of key players in policymaking. Excerpts:

Recently, it was announced that Nigeria was out of recession; as a manufacturer, to what extent has the said exit reflected on manufacturing and other business activities in Nigeria?

Based on your question on the economy regarding the recession whether it has subsided or not; as far as I am concerned, I have not seen any significant sign showing that recession has subsided. Nigeria is still in a difficult period. Any manufacturer that says that recession is over must be operating a government-owned company. That is my position.

Can you assess the present government’s policy as it affects manufacturers and other business activities?

Government policy is still against the survival of manufacturers in Nigeria. We have various government policies, but none is aiding improvement. Let me use electricity as an example; what I pay here is not what people in the same industry pay in Ikeja Disco. It is also
different from what people in Ibadan DisCo pay. I am paying 10 per cent extra from what Ikeja and Ibadan Disco pay and all of us end up in the same market. So, how can we say that the government has a good policy where we pay different rates on electricity and end up in the same market. There is no fairness, no level playing ground for healthy competition.

What have you to say about the stock exchange and what influence has it on the market?

I do not have any business with the stock exchange because when the economy is not healthy stock exchange will be fluctuating like every other thing.
This is because the stock is based on the stability of the economy and since the economy is not stable then it will affect the stock market.

READ ALSO: Recession looms with 47.15% of NSE 30 firms in decline

You talked about government policy as it relates to power; do we have any alternative?

Do we really have alternatives? For example, solar is not a cheap source of power unless the government is ready to subsidise it. The gas that is cheaper than diesel or electricity is not available within this region. There is no such gas in the South East and South-South that can serve as alternative source of power. It is only found in the south-west and other parts of the country, Southeast and south-south do not have much gas. So, we are disadvantaged in this part of the country. How do you empower your machines for effective management?
We are in a difficult environment, we find it difficult to even repay bank loans we collected because as I am talking to you now, gas is N225 and you can see that electricity keeps on dropping by the day. Look at the trend, I do not think this country generates up to 3000kw per day now and look at the size of Nigeria using it. So we end up using gas and paying N225. So, it is difficult for factories to operate with many operating at between 20 to 30 per cent just to keep on hoping for tomorrow. But we are yet to see the tomorrow coming.

May we have an estimate how much you spend in a day on diesel?

I cannot estimate the amount now, but it is a huge amount of money. Also in this part of Enugu, we don’t have water. When we started newly, taps were running, at least, two times in a week and we thought it would be sustained. However, six months before we started operation, the taps dried up and till today we have not seen any tap running. This also puts us in a very tight corner. To be fetching water from 9th Mile Corner is expensive which we did not budget for. It was in our budget to source water from the government tap but here we are today. Nobody cares or listens or wants to know how we get water to run the business.

How large is your workforce?

We have above 100 workers we pay salaries every month; it was more than this, but we downsized because of the hard government policy.
We are struggling to pay even the ones remaining, but when we look at the families attached to the persons we pay a small amount of money; we have no option than to pay them promptly, to enable them to take care of their families. I believe it is better than asking them to go which will be a disaster and the rate of unemployment will increase and that will also increase the crime rate which in turn will also increase the crisis in the state in particular and the nation at large and everybody will be affected.

READ ALSO: 51% annualised GDP drop set to worsen South Africa’s recession

What is your take on the privatization of government companies?

If we can privatise in the right way, I have no objection. It should not be a matter of giving it to our brothers and sisters that don’t have any knowledge about such companies.
For instance, out of the privatisation so far done, only NITEL (telecommunication) performed well. You can see when NITEL was in charge, it strangulated the economy but when Obasanjo liberalised telecommunication industry, things changed for good. It started booming up till today. Look at phone, one former minister once said that phone was not for the poor but today phone cannot be used to measure how rich or poor someone is. This is because the right people came in to
handle it. You can see that the number of people engaged by telecommunication companies is far higher than the number when it was NITEL alone. Telecommunication companies not only employees but also give better services. On the other areas of privatization like power; have you seen any change since then? Distribution was privatised; to me, nothing has changed and the government keeps on pumping billions of naira into that sector without any good result and it keeps on sinking. If you look at one of them in the western part of the country, the government took the management to court because it diverted the fund. In fact, one of them diverted the fund and the EFCC is running after it now.
That is the kind privatisation we are facing in Nigeria, most of them do not even know what is called power but it was allocated to them.
If they had sold the power to the right people, by now, Nigeria would have got adequate electricity. The number of power generated is not even enough for one state to have 24 hours of power supply.

What then is your advice to policymakers?

One of the challenges facing this country today is that people in the suit are sitting inside Air-conditioned rooms, making policies and passing them out and by the time it trickles down to the operators, it will crash because it will not be properly handled. You cannot sit in the office and formulate a policy for somebody that is inside a manufacturing house. You have to involve them while making the policy to know whether the policy can work or not because it will crash and when it crashes, it will affect every other sector.