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INNOSONKEEPINGNIGERIA
MOVING
ADIRE
PAYS
NEWBOARD.
NEWMD.
SAME
MANDATE
AN
ENTREPRENEUR
TOWATCH
P E O P L E  P E R F O R M A N C E  P O S S I B I L I T I E S
IMPACT
BOI
V O L U M E 1 N O 1 S E P T E M B E R 2 0 1 4
21 Q&A WHAT WE NEED TO DO TO GET TO
WHERE WE WANT TO Interview with BOI Chairman
Alhaji Abdulsamad Rabiu
28 Q&A GIVING BACK. CREATING JOBS. BAKING
BIGGER CAKES. Interview with BOI MD Mr. Rasheed
Olaoluwa
35 FOCUS UNCOMMON ENTREPRENEURSHIP
Ocheni Simon, a rising star
37 INSIGHT DOING IT LIKE CHINA
R E G U L A R S
3 ROUND-UP
39 LOOK
Editor
Hadiza Olaosebikan
Editorial Adviser
Kola Adewole
EDITORIAL
Gbenga Oyesanya
Solomon Tommy
Ayo Oluwatuyi
Toyin Oyekanmi
ADMINISTRATION
Kehinde Alade
LEGAL
Abdullahi Sadat
contents
8 LEAD THE INNOSON TESTAMENT
The story of Chief Innocent Chukwuma’s quest to keep
Nigeria moving through the manufacture of vehicles,
motorcycles, plastics and other products at Nnewi and
Enugu
14 SPECIAL REPORT ADIRE MARKET TRADE
SECRETS (JUST A FEW) An insight into how the
tie and dye industry works and how BOI helps
18 Q&A WHERE THE JOBS ARE Interview with
Dr. Olusegun Aganga, Minister for Trade, Industry
and Investment
ForewordBY THE MD/CEO
Orchestrating Development Impact at BOI
A
very warm welcome to this in-
augural issue of the BOI Impact
magazine.
We have begun a journey towards
transforming the Bank of Industry into
a world-class Development Finance
Institution and the most impactful in
Africa.
As you are aware, BOI’s mandate
is crucial to the success of the various
government policies aimed at revamping
and transforming the Nigerian economy.
The Nigeria Industrial Revolution Plan
(NIRP) and the National Enterprise
Development Programme (NEDEP), were
launched early 2014 by President Goodluck
Ebele Jonathan, GCFR, as integral parts of
the Federal Government’s Transformation
Agenda. Under these plans, BOI has
been assigned very important roles with
respect to the provision of the required
development finance.
In cognisance of this huge
responsibility, we are re-focusing on our
core mandate of providing low-cost,
medium-to-long term finance to large
industrial projects as well as to small
and medium industries. For instance, we
recently launched the N5.0 billion Cottage
Agro Processing (CAP) Fund to address
the post-harvest agricultural value chain.
By so doing, we are supporting the real
sector in wealth creation and reducing
unemployment in Nigeria.
We are also adopting global best
practices for the management of
development banks, and to this end,
we have initiated a number of projects
designed to improve the efficiency and
effectiveness of our operations and
processes. We expect our improved
practices to result in significant cost
savings and better service delivery to our
customers.
BOI Impact seeks to orchestrate
BOI’s efforts, activities and results in our
ongoing quest for developmental impact
and global best practices. In this issue the
Honourable Minister of Industry, Trade
and Investment, Dr. Olusegun Aganga
and the Chairman, Board of Directors of
BOI, Alh. Abdulsamad Rabiu, share some
very interesting perspectives on Nigeria’s
development agenda and the role of
BOI. We also highlight the activities and
achievements of some of our exemplary
customers. It is our hope that these stories
will inspire millions of other Nigerian
businesses and entrepreneurs.
My colleagues and I are working extra
hard (and smart too!) to deliver result
in terms of better practices and greater
developmental impact. I commend their
efforts and urge them to sustain the
current tempo, as it is in our national
interest to achieve the set goals and
objectives.
We have printed limited hard copies of
this issue, consistent with our objective of
making the publication 100% online by the
third issue. For now, the online edition is
available at www.boinigeria.com/Impact
I invite you all to please sit back, relax
and enjoy BOI Impact.
Warm regards
Rasheed Olaoluwa
Managing Director and
Chief Executive Officer
 | BOI IMPACT
TO BE THE CATALYST
Catalyst (noun):
a person or thing that pre-
cipitates an event or change
T
hat’s what the new Board of
Directors of the Bank of Industry
(BOI) has been charged to
become; in respect of funding
of Medium, Small and Micro Enterprises
(MSMEs) in Nigeria. The charge came
from the Minister of Industry, Trade and
Investment, Dr Olusegun Aganga, at
the inauguration of the Board, in Abuja.
It’s indeed the Board’s first priority as IT
has been asked to achieve this within a
“reasonable timeframe.”
Aganga described the MSMEs, with
a workforce of over 35 million, as a
group the Federal Government could
not ignore. He stressed that an upward
review of the bank’s loan portfolio
could not be over-emphasised in view of
the multiplier effects of MSMEs on the
nation’s industrial base, employment
generation’s drive and its potential
contribution to the GDP.
“I would like to use this occasion to
remind BOI that the future of MSMEs
rests squarely on how responsible you
are to their funding needs. The current
arrangement where less than 15%
loanable funds is being set aside for
MSMEs’ need is unacceptable and must
be reviewed upwards having regard to
the potential of the sector to create jobs
and generate wealth.
“The practice in China and Indonesia
where significant portion of loanable
funds in most cases without collateral
is extended to MSMEs with close to
97% repayment rate should encourage
you to emulate and do even more for
Nigeria’s MSMEs,” he said. (See: “Doing
it like China,” p37)
He added that on its part, the Federal
Government is already repositioning the
ministry as a major driver of President
Goodluck Jonathan’s Transformation
Agenda through the full implementation
of the National Industrial Revolution
Plan, NIRP and the National Enterprise
Development Programme, NEDEP, both
recently launched by the President.
He urged the Board to actively
support the NIRP and NEDEP to stimulate
the Federal Government’s quest for rapid
industrial development in the country,
and the bank’s mission of wealth
creation and employment generation.
Just to let the Board knows that he
takes this seriously, the minister told
them:
“I expect your board to forward to
me quarterly progress reports showing
performance in the quarter and year
to date with details of analysis of loan
book by gender, by sector, impact on
NIRP and NEDEP, jobs created, and
contribution to national development.”
The Minister reiterated that the bank’s
mission is to transform Nigeria’s industrial
sector, integrate it into the global economy
and provide financial and business support
services to existing and new industries to
enable them attain modern capabilities to
continued on page 6
From left: Minister of Trade, Industry and
Investment, Dr Olusegun Aganga; Chairman
Bank of Industry, Alhaji Abdulsamad Rabiu;
and the new Managing Director/Chief Exec-
utive Officer, Bank of Industry, Mr Rasheed
Olaoluwa, at the inauguration of the 4th
Board of the Bank of Industry
BOI IMPACT | 
Meet the Board
•	 Alhaji Abdulsamad Rabiu CON is the Chairman/CEO of
the BUA Group of Companies, and two-time Chairman of the
Bank of Industry’s Board of Directors. He was Chairman of BOI’s
third Board of Directors up till 2011. Over a period of 25 years
he has grown BUA Group into a world-class conglomerate
with interests in manufacturing (sugar, cement, flour and oil
mills), ports and terminals as well as real estate. He was recently
ranked by the influential international Forbes Magazine, as one
of Africa’s billionaires. Alhaji Abdulsamad sits on the Boards
of several companies. In the past, he served as the Chairman
of the Board of the defunct Tropical Commercial Bank Ltd
from 1993-1999 and was a member of the board of Transcorp
Hilton Plc. He currently sits as the Chairman, Board of Directors,
Cement Company of Northern Nigeria Plc. Alhaji Rabiu has won
many prestigious awards, both locally and internationally, as
a testimony to his hard work, leadership, excellent business
acumen and indefatigable entrepreneurial spirit. He studied
economics at Capital University, U.S.A and holds an honorary
doctorate degree from the Crescent University, Abeokuta, Ogun
State, Nigeria. He was also awarded with the Nigerian national
honour of Commander of the Order of the Niger (CON) by the
Federal Government in 2012. He is happily married and has
children.
•	 Mr. Rasheed Adejare Olaoluwa has over 26 years
experience in banking and financial services sector, playing
senior and executive level roles in Commercial and Investment
Banking, Treasury Management, Financial Control and Strategic
Management gained at reputable institutions such as KPMG,
GTBank, Ecobank and UBA.
He was the pioneer Group CEO of UBA Capital Plc, a leading
financial investment services company. Prior to this, he was an
Executive Director at the United Bank for Africa (UBA) Plc, where
he led the largest strategic business directorate in the Banking
Group. He was also the pioneer CEO of UBA Africa from 2007 to
2011, during which time he extended UBA’s operations into 18
countries in Sub-Saharan Africa.
round-up
Standing from L-R: Waheed Olagunju, ED (Small and Medium Enterprises); Kenneth Effa, ED (Corporate Services); *Ahmad Abdullahi, former
Director (representing Central Bank of Nigeria); Mohammed Alkali, Executive Director (Large Enterprises); Omoniyi Ezekiel Fagbemi, Director
(representing Ministry of Finance Incorporated, MOFI). Sitting from L-R: Uju Aisha Hassan Baba, OON, Director (representing Min. of Industry,
Trade and Investment); Rasheed Olaoluwa, Managing Director/Chief Executive Officer; Abdulsamad Rabiu, Chairman, Board of Directors;
Lawrence Osayemi, Director (representing Manufacturers Association of Nigeria, MAN). *Olufemi Fabamwo (not in picture), now represents
Central Bank of Nigeria on the Board
 | BOI IMPACT
round-up
He holds a first class honours degree in civil engineering, an
Associate Membership of the Institute of Chartered Accountants
of Nigeria (ICAN) and an Executive MBA from International
Graduate School of Management (IESE), Spain.
•	 Mr. Waheed A. Olagunju who joined the Bank of Industry’s
precursor institution, the Nigerian Industrial Development Bank
(NIDB) in 1990, was appointed Bank of Industry’s Executive
Director (Business Development) in 2012. Over the past 24
years, he has served as Company Secretary of NIDB/BOI for
more than 15 years between 1997 and 2012 in addition to being
General Manager, Strategic Planning, Corporate Secretariat and
Corporate Communications of BOI between 2007 and 2012. He
was recently made the Executive Director (Small and Medium
Enterprises) following the reorganisation of the Bank in 2014.
Mr Olagunju bagged his first and second degrees in 1981 and
1984 respectively from the University of Lagos and holds a
professional certificate in Investment Appraisal and Risk Analysis
from the Queen’s University, Canada.
•	 Mr. Mohammed G. Alkali holds a first-class Bachelors
Degree in accounting from Bayero University Kano (1983) and
a Masters Degree in economics from the London School of
Economics (1986). He started his working career in 1983 as a
lecturer with the University of Maiduguri and joined the banking
industry in 1988. During the span of 25 years in banking, he has
garnered composite experience that cuts across commercial,
investment and development finance. Prior to his appointment
as Executive Director, Operations at the Bank of Industry in
2010, he served as BOI’s General Manager, Large Enterprises
(2002 to 2005) and General Manager, Small and Medium
Enterprises (2005 to 2010). Following the restructuring of the
bank in 2014, he was re-designated Executive Director, Large
Enterprises. Alkali is also an alumnus of Harvard University, the
University of Chicago, the Stanford University and the Columbia
University, amongst others
•	 Mr. Kenneth N. Effa who bagged a Bachelors degree in
economics from the University of Maiduguri in 1980 is a fellow
of the Institute of Industrialists and Corporate Administrators
(IICA) and the Chartered Institute of Management Accountants
(CIMA). He had spent 30 years in the Central Bank of Nigeria,
where he rose to the position of Assistant Director and was
appointed Executive Director representing the CBN on BOI’s
Board in January, 2014.
•	 Mr. Omoniyi Ezekiel Fagbemi (FCA, mni) is a 1988
accountancy graduate from the Obafemi Awolowo University,
Ile-Ife. He has an MBA from the same university in 2000, and
is a member of the National Institute for Policy and Strategic
Studies, Kuru having completed the Senior Executive Course
35 in 2013. He has 25 years working in both the private and
public sectors, starting as an Internal Auditor at a private
firm to becoming the Director, Revenue and Investment,
Office of the Accountant-General of the Federation. He has
also served as an Assistant Director, Deputy Director, and
Director in the Federal Ministry of Health, the Office of the
Secretary to the Government of the Federation, and the Office
of the Accountant General of the Federation. He is a fellow
of the Institute of Chartered Accountants of Nigeria (ICAN),
the Chartered Institute of Taxation in Nigeria (CITN), and the
Nigerian Institute of Management (NIM).
•	 Mrs. Uju Aisha Hassan Baba, OON has more than 30
years’ post-bar experience in Nigeria’s legal system. She was
one-time Attorney-General of Anambra State, Director General
Legal Aid Council of Nigeria and current Director of Legal
Services, Federal Ministry of Industry, Trade and Investment.
She is a Law graduate of University of Nigeria, Nsukka and
attended the International Law Institute, Washington D.C, as
well as the University of London where she bagged a certificate
in Legislative Drafting. She is a member of the Nigerian Bar
Association and has served on various committees. She is also
an Officer of the Order of the Niger (OON).
•	 Mr. Olufemi Adeoye Fabamwo holds a Master of Business
Administration (MBA) from the University
of Lagos. He has worked with the
Central Bank of Nigeria since 1982, rising
from Senior Supervisor, Development
Finance, to Director, Other Financial
Institutions. He has served on the boards
of several FG establishments, including
the Nigeria Export-Import Bank (NEXIM)
and the National Insurance Commission
(NAICOM). He is an associate member of the Chartered Institute
of Bankers (CIB) UK, a member of the British Institute of
Management, and a fellow of the Chartered Institute of Bankers
of Nigeria (CIBN).
•	 Chief Lawrence Ayinde Olakunle Osayemi who is the
National Treasurer of the Manufacturers Association of Nigeria
(MAN) represents the Association on BOI’s Board of Directors.
He is an alumnus of the London Business School, the Harvard
Business School, and was one-time Managing Director of
Thomas Wyatt Nigeria Plc. Chief Osayemi, who is a lawyer
and also a fellow of the Institute of Chartered Accountants of
Nigeria (ICAN), also holds a Bachelor’s degree in Economics and
was a member of the Steering Committee for Vision 20:2020.
He was also the Pro-Chancellor of the Federal University of
Agriculture, Abeokuta and was awarded a Member of the
Order of the Niger (MON) by the Federal Government based on
his contributions in the Organised Private Sector.
BOI IMPACT | 
round-up
produce goods that are competitive in both
domestic and external markets.
Speaking for himself as the Board Chair-
man as well as his members, Alhaji Abdul-
samad Rabiu, who is also Chairman/CEO
of BUA Group of Companies, expressed his
appreciation to the president for imposing
confidence in them. He equally commended
the minister for the people-oriented policies
and programmes he has set for the econom-
ic development of the country.
BOI’s Managing Director/CEO,  Mr. Rash-
eed Adejare Olaoluwa, affirmed that that
the management would work hand-in-hand
with the board with a view to strengthening
the bank’s operations for global competi-
tiveness  and to be at par with some of the
world’s leading development finance insti-
tutions.
Olaoluwa noted that he would work
closely with other relevant stakeholders
towards addressing the non-financial issues
facing the manufacturing sector and MSMEs.
“Urgent steps,” he added, “would have to be
taken to improve on BOI’s service delivery to
enable it meet the unemployment challeng-
es facing the country especially in the areas
of wealth and job creation.”
BOOST FOR AGRIC
T
he Bank of Industry (BOI) believes with the Federal
Government of Nigeria that agribusiness can change
the nation’s fortunes. Therefore, the bank is committed
to helping move Nigerians from farming to small-scale
enterprises, food processing and industrialised agriculture.
BOI’s Managing Director/Chief Executive, Rasheed
Olaoluwa revealed this plan to members of the Senate
Committee on Investment who were on an oversight visit to
the Bank’s Corporate Headquarters in Lagos. It’s simply keying
into the government’s Industrial Revolution Plan as well as
the National Enterprises Development Programme. Thus, the
bank would be creating job opportunities in the agricultural
sector. Its success in the Solid Minerals sector –where the
bank has been focussing on the identified commercially-
viable 44 solid minerals deposits available in the country – will
serve as template.  Olaoluwa said the bank has entered into
partnerships with many microfinance banks, which are very
close to the grassroots and communities.
The Chairperson, Senate Committee on Industry, Senator
Nenadi Usman, assured the MD/CEO of the Senate’s partnership
because “we believe that the Bank is one of the strongest
agencies that the government has been using to ensure that
the industrial sector in Nigeria is being properly positioned to
absorb the nation’s manpower,” adding, “I believe that if small,
medium and even large scale industries are assisted in Nigeria,
we would have most of these people who have no work today,
fully employed.” It’s a win-win situation for everyone: the bank,
the Government, the unemployed.
CATALYST
continued from page 3
L-R: ED (Corporate Services and Commercial), BOI, Mr Kenneth Effa; Sen. Chris Ngige; Managing Director/CEO, BOI, Mr Rasheed Olaoluwa; Sen. Nenadi
Usman, Committee Chair; Sen. Ahmad Maccido; Sen. Ahman Zannah; Sen Ibrahim Musa; Sen. Gbenga Obadara and Mr Niyi Olorishade, Committee Secretary
 | BOI IMPACT
boi impact vol 1 no 1 final (1)
I
n his younger days, Chief (Dr) Innocent Ifediaso
Chukwuma, OFR, took to the moniker, Innoson,
with glee. So much so that when the time came to
incorporate his first business, no other name clicked.
Innoson Nigeria Limited (INL) Nnewi, registered with
the Corporate Affairs Commission in 1981 to trade in
tyres and motorcycle spare parts, has now grown into
the conglomerate, Innoson Group (www.innoson-group.
com), not only manufacturing motorcyles but also plastics
- Innoson Technical and Industrial Company Limited (ITIC)
Enugu; motor vehicles – Innoson Vehicle Manufacturing
Company Limited (IVM) Nnewi; and tyres – General Tyres
and Tubes Company Limited (GTT) Enugu. With its total
workforce of 7,200, the group has a projected turnover of
more than N50b per annum.
“I was into buying and selling
like everyone else,” the Nnewi-born
gentleman explained to BOI Impact in
his spaciously appointed office at ITIC
along the Enugu-Abakaliki Expressway.
The ambulatory schedule occasioned by
the growth of his business has him on
occasion shuttling to meet contingencies
in his other offices in Nnewi, Abuja and
Accra in Ghana when he is not travelling
abroad.
“My senior brother apprenticed me
to our townsman Pius Emeka Maduka,
elder brother to Cosmas Maduka
of Coscharis, under whom I learnt
the buying and selling of tyres and
motorcycle spare parts at the Nkwo
Nnewi Market.
“At the end of the apprenticeship
I started on my own; buying from
importers and selling to the final
consumers. In fact, I was doing so well
that my brother left his original business
to join me. When I was ready to start on
my own, my brother settled me as was
the practice and I registered my own
company.
“In no time we started importing
and selling to wholesalers as well. From
1984, we started importing motorcycles
THE INNOSON
TESTAMENT
lead
 | BOI IMPACT
whole. Then we moved into bringing
the motorcycles completely knocked
down and assembling them there in
Nnewi. From very slow beginnings
our sales volume rose to over 600,000
units per annum following which some
Chinese companies granted us sole
distributorship of their brands.”
In this meteoric rise, Chukwuma is
however quick to remind you that it took
a proper look at the field to convince
him – and in good time too – that
manufacturing was not just the way out
but the only way forward. Thus, while his
competitors wallowed in the success of
their trading exploits, he had his eyes set
ahead.
We did the local assembling by
ourselves for about 10 years before
entering into an agreement with
Chongquing North Jianshe Import and
Export Company Limited, a Chinese
motorcycle manufacturer to establish a
manual plant in Nnewi where top quality
motor cycles were produced. When this
did not make for enough production
volume to achieve agreeable economies
of scale, the next year we installed a
fully automated assembly line making
us the first fully indigenous motorcycle
manufacturers in Nigeria.”
Eventually, it was this determined
drive for comparatively low prices and
transfer of production technology that
pushed him into plastic production.
“Following our production of
motorcycles, we discovered that most
of the parts of the motorcycle apart
from the tank, frame, exhaust pipe and
engine were all made of plastic – the
fenders, tail, headlight casing, front and
rear bumpers, side covers and even the
very helmet worn for protection, name
them.”
Apart from the motorcycle parts, ITIC
– arguably the biggest plastic industry in
Nigeria – was incorporated in 2002 with
technical support from Cretec Industries
Company Ltd Hangzhou, China. It is
capable of producing injection, blowing
and rotational moulds; metre boxes and
accessories; melamine tableware, roof
ceiling and foam products. Courtesy of
upgraded production lines featuring
state-of-the-art injection moulds, it has
the capacity to produce 10,000 plastic
seats per day at full tilt.
With expertise acquired in the terrain
of motorcycles, and with his mind
set on “keeping the nation moving,”
Chukwuma ventured into the automotive
industry. IVM, also the first indigenous
motor manufacturing industry in Nigeria,
produces cars and commercial vehicles,
making use of substantial local content –
70 per cent, for now. Built in conjunction
with a consortium of Chinese
automakers, it now produces intra- and
inter-city buses with various seating
capacities, Sports Utility Vehicles (SUVs),
trucks, pick-up vans, refuse collectors/
compactors and tricycles.
Officially commissioning the factory
on 15 October, 2010, President Goodluck
Jonathan commended Chukwuma’s
resilient spirit, crediting it to the fact that
though Anambra was one of the smallest
states in the country by land mass, its
people have “high brain density.”
Nonetheless, there is a commendable
motive. “When we ventured into the
production of motorcycles we were
able to make brand-new motorcycles
affordable to needful Nigerians who
hitherto patronised the tokunbo
(used) ones. Nothing can stop us from
replicating it in the automotive industry.”
With a projected roll-out programme
of 5,200 vehicles per month IVM started
at 300 a month but manages about 600
a month as yet. However, Chukwuma
believes that they are on course to
meet the 1,200 vehicles a month target
they have set for year’s end. Part of
the conviction for this, according
to him, comes from the fact that –
unlike with motorcycles – they never
assembled vehicles. They started with
manufacturing outright.
“We shall stop at nothing till
we achieve total local content,” he
submitted. “Assuming Ajaokuta (Steel
Company) was working, the story would
have been drastically different. To
further achieve this is one of the reasons
why with some Nigerian partners we
moved into the manufacture of tyres at
GTT. With all the tyre companies in the
country moribund and Nigeria boasting
of very good rubber, we have decided to
take the bull by the horns. It’s our hope
to play a leading role in the tyre supply
chain for both motorcycles and vehicles
in no distant time.”
He concluded the latter rather too
self-assuredly. Reminded that cynics
could still see it all amounting to buying
and selling in the long run, he took a
deep breath and threw in a clincher: “I
don’t know about others but I would
rather buy raw materials and sell my
own finished products at the most
competitive of prices than buy another
man’s finished products to sell to my
people at exorbitant prices.”
“Apart from the price difference that
it will visit on the goods like I have said,
what of the jobs manufacturing will
make available for our people? Instead
of the youth parading the streets jobless,
they are given means of livelihood. In
turn, this makes the country safer as it is
joblessness that will push them to crime
and nefarious acts that’ll make them
constitute a burden to the society.”
A commendation of the wisdom
in his analysis brought a twinkle of a
smile flashing across his face. He let the
compliments sink in well enough before
amplifying that it all goes back to his
roots. According to him, the eponymous
progenitor that begat the four villages
that constitute his hometown was
wisdom writ large. He capped the
lead
BOI IMPACT | 
ensuing lesson in their ancestral history
with a popular Igbo proverb -“the
foolishness of an Nnewi man amounted to
wisdom in neighbouring towns.” Invariably
an overstatement as the late Chinua
Achebe would have said, some truism
appears to lurk in it judged by the decision
taken by his second-bite-shy townsfolk
to domesticate their businesses in Nnewi
after the experience of the Nigerian
Civil War (1967-70). Very strong in the
automotive parts trade, Nnewi, no sooner
after, became the hub of the trade in the
country; attracting customers from as far
away as the west and east coasts of Africa
– a happenstance that undoubtedly played
a major part in the emergence of Innoson
Group when and where it did.

Born on 10August, 1961 to a junior civil
servant Mr Godwin Chukwuma Mojekwu of
Uru-Umudim Village and his wife Martina,
Innocent Chukwuma surmounted a stack
of odds to become this entrepreneurial
statement of our time. An indubitable child
of destiny, the story of how he was left for
dead after being run over by a hit-and-run
driver at the tender age of six years is now
a reporter’s delight. “I strayed back onto
the road for my toy watch that had slipped
from my hand as I crossed the road in the
grip of an elder brother,” he recounted.
“As God would have it, just before burial
obsequies could commence after the close-
to-three-hour interlude it took to hunt the
erring driver down, I woke.”
Relationship with Bank of Industry
It started when he ventured into
manufacturing. Admittedly, as a “buyer
and seller” he had been stuck with the
commercial banks like most people else.
“The first loan I ever took way back
then,” he recounts with nostalgia, “was
N5,000 from the old United Bank for Africa
(UBA) repayable in one year. I paid it back
on schedule - with the accruing interest -
and they doubled it for the next year... They
have been doubling and doubling it so for
me year after ever since.”
According to Chukwuma, he was
attracted to BOI because the terms and
conditions of the commercial banks would
be difficult to meet for an industrialist who
needed better understanding from his
creditors to raise his head in the slippery
waters of manufacturing.
“The Bank of Industry is tailor-made for
manufacturers,” he enthused. “You see,
every manufacturer needs enough time
and space to operate so as to be able to
‘BOI is tailor-made for manufacturers.With-
out them, I wonder how I would’ve managed.’
- Innocent Chukwuma
lead
 | BOI IMPACT
pay back any loan. The money has to go a
full cycle that takes more time than when
one is just trading with it.”
Like he opined in a YouTube testimonial
posted on BOI’s website, the bank assists
him primarily in the buying of equipment.
“Without them,” he posits now, “I wonder
how we would have been managing. The
first loan they made available to us was for
N600m with a four-year tenor. We finished
repaying it in two years and took another
for N300m. This one took us two and a half
years to repay. The third one for N600m
was also repaid in record time and we are
now paying back the fourth tranche worth
N1.4 billion. God willing, we shall also meet
with that and keep ploughing on.”
Any wonder that in 2011 he won the
bank’s Best Customer Award for Loan
Repayment and Contribution to Nigeria’s
Economic Development.
Though admittedly he had to sell
virtually all the property he had acquired
across the country as a trader to meet their
initial start-up requirements, Chukwuma
upon hindsight still thinks the effort was
more than worth it. Given his experience
with the bank, his advice to would-be
industrialists is to look the bank’s way and
no other for financing as nowhere else
would suffice if they wanted to get a loan
that will enable them sleep with their two
eyes closed.
By him, accessing loans from BOI is
also not as difficult as people are made to
think. The onus, he says, is on the would-
be industrialist to write transparently
feasible and concise project proposals;
that are clear and to the point and not
unnecessarily outsized and unmanageable
at first sight.
“The thing is to take it step by step,”
he elucidated. “Like in my own case, I buy
equipment one after the other. I don’t
want to buy another one when I have not
finished paying for the outstanding one.”
He is however quick to point out that
the most important aspect for a rapid
industrialisation of the country is the
prevalence of favourable government
policies. Such that made a BOI possible in
the first place. A member of the committee
overseeing the Federal Government’s
National Industrial Revolution Plan (NIRP)
launched in February 2014, he sees it as
well as the rest of the Transformation
Agenda of the Federal Government as
capable of leading Nigeria to the Promised
Land in record time.
“We (the committee) have started
work in earnest,” he stated. “The effect
will start being felt much sooner than
later. I strongly believe that with the input
of people like my humble self from the
private sector, the country would have
come a long way in industrial development
within the projected period. A case in point
is the power aspect. Most of the money
we would otherwise have used for R&D
(Research and Development) is invested
in power supply instead. But with the
privatisation of the power sector this will in
no time become a thing of the past.”
A member of the Nigerian Automotive
Manufacturers Association (NAMA), he
sees this playing out in the automotive
sector also. “Take the Nigerian Automotive
Industry Development Policy (NAIDP) for
instance,” he continued, happy to return
to home turf. “With its coming into force
things are beginning to happen. Car plants
are opening again and the drive for local
content is enhanced. Rather than import
a finished foreign car at a high duty of 70
per cent, you make original equipment
or import from other Original Equipment
Manufacturers (OEMs) at zero duty. Once
you import only very few components as
CKDs at the very reduced import duties of
between 5 and 10 per cents, not only will
the price of cars come down but people
will also have jobs like I have explained
and we can raise our heads high in the
committee of nations.”
Reminded that this could also imply
throwing the floodgates open to all
manner of competitors for them at
Innoson, he demurred; dismissing it with
a mere wave of hand. “My brother,” he
implored, “it is no longer about profit. One
lead
‘I don’t see myself
as a rich man.I’m
not in this for the
money per se.’
BOI IMPACT | 
is not here for money any longer. Now
it is mostly about leaving your footsteps
on the sand of time. When I would have
made vehicles in Nigeria affordable to the
common man, there would be nothing
else to ask for.”
He compared the situation to what
used to obtain before they veered into
the local manufacture of motorcycles.
Brought in crates, only 40 motorcycles
filled a container. Sensing that more would
fit into a container dismantled, INL ended
up importing a total of 200 motorcycles
in one container. With the reduction
achieved from freight charges alone, the
price of brand new motorcycles reduced
by as much as 40 per cent.
“The only problem then,” he
expatiated, “was in winning the confidence
of would-be customers who thought the
motorcycles were substandard or inferior
because they knew we assembled them
with just the little experience we gained as
traders. For this the first container took a
whopping three months to sell. But by the
time the second shipment of 10 containers
arrived, it was sold in less than a month.
The third consignment of 20 containers
was sold out before it berthed at the ports.
That is Nigerians for you. Once you win
their confidence, the sky is the limit.”
So confident is he that this is in the
offing at IVM that he dismisses the shrugs
of the remaining folk who still doubt the
durability and otherwise of their vehicles.
“There are standards set for the
manufacture of vehicles throughout
the world,” he clarified. “What we do
not manufacture here like engines and
gearboxes we buy from where others
buy theirs. The same way, we source the
other components from where they source
theirs. Also, we end up using the same
equipment they use to assemble theirs to
assemble ours and so on till a car is made.
Now you be the judge. Or is there a law
that vehicles cannot be made here?”
With hindsight acquired from his
staggering experience on the field he sees
straightforwardness
as the only way
out for any
businessman: “If
you are innovative
enough, backed
by truth and if you
don’t venture into
areas not too clear
to you, you’ll make
it. I’ll personally
never do a business
because it has the
promise of a very
high percentage
profit. I have never.”
Still Chukwuma
sees the future
as even more
daunting: “We
started in Nigeria
and are slowly
spreading to
the West coast.
Expression of
interest in our sweat
has come from as
far as Ghana and Cameroun. We’ll stop
at nothing until we take over the entire
African continent with our brands.”
Indeed, a trade delegation from Ghana
had visited IVM shortly before it was
commissioned by President Jonathan.
It was led by Deputy Transport Minister
Hon (Mrs) Dzifa Attivor. In a speech at the
occasion she expressed happiness that
with what she saw at Innoson Group the
wishes of their late first leader President
Kwame Nkrumah of Africans harnessing
local resources which amounted to 50
per cent of the world’s total was coming
true. On behalf of their government, she
pledged that they would patronise the
project.
Asked whether his continued
expansion doesn’t translate to more and
more money accruing to an already made
man, Chukwuma answers in the negative:
“I don’t see myself as a rich man,” he
said, his face creased in a smirk that
accentuated the scar and suture marks left
on them by that accident at six. “Not when
I do owe the banks so much. I told you that
I’m not in this for the money per se. I’m
just another busy man and my belief is that
once someone is as busy as he should be,
he will never pass for poor. It is only a lazy
man who does not work that can be said
to be poor. My situation is as a result of my
work rate and it is the Lord’s doing.”
But life is not always about work for
Chukwuma who has in his kitty many
garlands including the Officer of the
Federal Republic (OFR) awarded him in
2011 and the Nigeria Centenary Honour
Award, in 2014; both by President
Jonathan. When he is not relaxing at home
with the wonderful family he is raising
with his beautiful wife, he could be caught
outdoors playing tennis with other big
boys at the club.
lead
‘When I would have made vehicles
in Nigeria affordable to the common
man, there would be nothing else to
ask for.’- Chukwuma
 | BOI IMPACT
lead
Nnewi: Nigeria’s manufacturing town
A
ny first time visitor to Nnewi town will be astounded
by the sheer population of motorcyclists of both
genders on the roads. In fact, you would not have
entered the town long from the Oba bypass on the Onitsha-
Owerri expressway to associate it with motorcycles of all
makes and colours. As you approach the Nnamdi Azikiwe
University Teaching Hospital junction, they would swarm
around you with their riders perched on them as if they were
created on them – some of the females had their infants
strapped on their backs with wrappers! Then you head in
their brood towards the roundabout at the centre of the
town adorned with the statue of the late former President
of Nigeria’s First Republic Senate, Akwaeke Nwafor Orizu, a
prominent indigene. When en route after beholding rows
upon endless rows of them lined up for sale at the Nkwo
Market, it wouldn’t turn your head as on later enquiry you
realise that the biped is the prime instrument of the town’s
crowning glory.
Welcome to Nnewi , dubbed since the late 20th
Century,
the Japan of Africa –when by dint of their toil the indigenes
transformed it from an automotive parts trading haven to its
industrial manufacturing mecca. Any search engine deployed
to probe the town on the Internet won’t mince words in
telling you that where you stood has well over 30 small and
medium-scale industries within its bowels. Yes, owned by
private individuals.
One of the leading urban towns in the present-day
Anambra State of Nigeria’s South East – the third, in fact,
after Awka, the capital, and Onitsha – it boasts an ancient
habitation that dates back from the early 15th
Century. Back
then a mostly agrarian community would gather in the Nkwo
Market square to trade their surpluses for their needs. Initially
done by barter, various forms of currency including copper
and cowries were to come into play as civilisation wore on.
Things were to come to a head at the turn of the 19th
Century when the Europeans joined the fray. Even before
their arrival proper in the town towards the end of the
century, the introduction of their items of commerce saw
the town assume its own shape. From the early 20th
century
customers to the burgeoning market from the town and its
environs now had various foreign items being traded as well.
In no time, the town became the place to go for many brands
of automotive spare parts.
How this came to pass is now all lost in the nebulous
lines of unwritten history. One school of thought, though,
believes it could be explained by the emergence from the
town of foremost Igbo transporters – from late Sir Louis
Odumegwu Ojukwu’s Ojukwu Transport Company (OTC) in
the late 50s down to late Chief Augustine Illodibe of Ekene
Dili Chukwu Limited (EDC) of more recent memory. These
and a whole lot of other similar concerns and their emerging
fleet easily provided a ready clientele for spare parts back
then when Nnewi was yet a hot trading post on the busy
Onitsha-Owerri highway.
The circumvention of Nnewi by that busy road rather
than diminish the town’s hold on the trade ended up
boosting it somehow. When following the aftermaths
of the Civil War those of them in the trade without their
town’s borders decided to stay put and operate from home
base, Nnewi virtually took over the trade in its entirety.
Customers now came not just from within the country but
the entire West and East coasts of Africa. It did not take time
for these entrepreneurs to grow to the level of setting up
manufacturing concerns in numbers to produce those parts
that they had hitherto sourced abroad.
While automotive spare parts accounted for the
majority of the industries that were initially set up, it is with
motorcycle spare parts variety that they began to make
more positive history. From trading in them, industries
manufacturing them started springing up as well. So much so
that in no time people from all towns else journeyed to buy
not just spare parts but also whole motorcycles from Nnewi.
So commanding did Nnewi become in the motorcycle trade
that it was its traders who crashed the price of brand new
motorcycles when the country had been bound to their used
varieties imported from all around the world. It did not take
long for the first indigenous motorcycle assembly as well as
manufacturing company to be set up on the land. It is also on
record that the first wholly Made-in-Nigeria motorcycle was
manufactured in Nnewi by the National Agency for Science
and Engineering Infrastructure (NASENI).
Following on the heels of this an industry that
manufactures motor vehicles with as much as 70 per cent
local content has also come on board. The way things are
shaping, the Japan of Africa may yet become the Germany of
the Southern Hemisphere.
BOI IMPACT | 
A
customer steps into Michael Ogunfidodo’s fabric
store, a space tucked away at the end of an alley
that winds through rows and rows of similarly-
sized fabric shops.
“Madam, how’s Canada?” he asks,
warmly.
One of those Nigerians who
frequently travel abroad carrying with
them local merchandise – everything
from food to Nollywood home videos
to fabric – which are in high demand
by Nigerians in the Diaspora - she
complains about how business in
Canada is nowhere near as good as in
the United States; because there are
many more Africans and Nigerians in
the US than in Canada.
While they settle accounts she
asks for a “stone-black” fabric she
had seen the last time she visited.
“Bring me that tablet,”
Ogunfidodo tells his assistant. He
goes through the pictures saved onto
the device, in search of the design.
No luck. He asks for his smartphone.
No luck. He’s nonplussed, and asks
the customer to send it to his phone
“on Whatsapp or Facebook”, to rejig
his memory.
Welcome to the Kenta Adire and
Kampala Market in Itoku, Abeokuta,
one of a handful of cities in western
Nigeria famous for the production
of “tie-and-dye” fabric, known in the
Yoruba language as adire – literally
meaning “to tie and dip (in dye).”
Ogunfidodo is not your typical
adire merchant. For one, he’s
male – the business is dominated
by women - and, secondly, it’s
genealogical - passed down from
one generation to another, typically
along matrilineal lines. He inherited
the business from his mother, who,
he says, “is old now.” In one 2013
ADIREMARKET:
TRADE SECRETS(JUST A FEW)
 | BOI IMPACT
special report
study of 80 randomly-selected
“adire entrepreneurs” in Abeokuta,
researcher Zakaree Saheed found
that only one in four was male.
Ogunfidodo is also youngish, in
his “late 30s”, he allows – and has a
University degree in economics, from
the University of Science and Applied
Mathematics (USAM) in the Republic
of Benin.
He had the option of looking
for a salaried job; his interest lay in
Information Technology. And then
fate intervened. After graduation he
spent some time helping his mother
out at her store, in the same market.
When he left, she was inundated
with queries about the whereabouts
of her son. “People liked the way I
related with them.” It was enough
to nudge him to abandon his other
dreams and return, for good.
He brought his University
education to bear on the job.
“They’ve been doing this business in
an old way; there’s lots of ways we
can repackage it.” He rebranded his
mother’s ‘Jesutofunmi Enterprises’
into ‘Ibile Apparel Limited’ and
started labelling his fabric with
branded stickers. He also says he
introduced the plastic film packaging
in which fabrics are now sold –
people had to overcome their
reluctance to spend more buying
the firm rolls of film, instead of the
flimsier ‘bread loaf’ bags they were
used to.
And while many people continue
to use wood fuel to generate the
heat for boiling the water used in
adire-making (to dissolve the dyes,
and to de-wax), he now uses the
cleaner and more efficient liquefied
petroleum gas.
Before the emergence of social
media, adire makers depended
on word of mouth or user
recommendation. Today Facebook,
Whatsapp and Blackberry Messaging
are important marketing channels.
“I have a page on Facebook, to
which I upload most of our designs,”
Ogunfidodo says. He also has a
database which he uses for SMS
blasts.
Like many of the other adire
dealers, he makes everything he
sells. In that sense their vocation
goes beyond merchandising – they
design, produce, and brand as well.
On the day we visited the market,
Ogunfidodo had spent the entire
morning at home producing new
stock to meet a customer order,
from Benin City due for pick-up the
following day.
If your notion of tie-and-dye
is about dye-pits at which elderly
women sit all-day long and work
then you are behind the times.
Ogunfidodo reveals that everyone
now uses large plastic basins.
He works out of his home.
Capital-intensive
The adire business is capital-
intensive, Ogunfidodo illustrates by
pointing to a modest-looking stash
of fabric: three piles sitting side-by-
side, collectively worth half a million
naira. It’s easy to underestimate
just how much value is locked up
on those shelves; a full store could
easily be worth millions of naira. An
investment that might be substantial
in some other business would
produce only a modest impact in
an adire store. According to the
2013 study quoted earlier, less than
a quarter of the entrepreneurs
surveyed had invested more than
N100,000 in their businesses. Against
this backdrop, it is clear that the
majority of the entrepreneurs are
able to operate only very small
businesses, because of funding gaps.
Like many other small Nigerian
businesses, the adire makers depend
mainly on personal savings. They
organise themselves into “Co-
operative Societies” (“Co-operatives”
consisting of between 10 and 15
persons per unit. Members contribute
regularly (usually monthly), and then
BOI IMPACT | 
special report
take turns to receive a payout worth
twice the contribution. The difference
between contribution and payout then
has to be repaid. Co-operatives are a
popular means of informal capital-raising
in Nigeria, providing interest-free funds
and repayment schedules less stringent
and punitive than those offered by banks.
The alternative would be bank
debt. But many business-persons see
them as unreasonable, on account of
the high interest rates associated with
commercial bank loans in Nigeria. Not
even microfinance banks are able to offer
anything markedly different.
Enter the Bank of Industry, with its
loan scheme targeted at the adire dealers.
“Only BOI has given us loans at single-
digit interest rates,” says Ogunfidodo.
The BOI loan comes at 7%. The merchants
apply for the loan as cooperatives, not as
individuals. Ogunfidodo’s cooperative,
of which he’s secretary, got N8m. The
money was paid into the cooperative’s
bank account, and then shared by the
members, according to need. Repayments
are done monthly; members pay into
the bank account, which BOI debits by
cheque. (The cooperative pre-issued 30
monthly post-dated cheques to BOI, to
cover the payments).
“The essence is to empower women
and youth, to create wealth, and reduce
the level of unemployment and crime,”
says Monday Ejigbo, Manager, Lagos
Zone, at BOI.
BOI operates a “matching fund”
loan scheme with interested state
governments, in which it matches the
amount of money the state offers to
allocate. Currently there are about 18
states across the country that have
launched BOI matching fund schemes.
In December 2011, Ogun State signed a
five-year contract with the bank to create
a one billion naira fund –each party
contributing N500 million.
The partnership allows the various
state governments to subsidise BOI’s
standard interest rate of 10 per cent. The
Ogun State Government’s subsidy ensures
that cooperatives in the state can take
loans at 7 per cent.
Loans from the fund go to a total of
128 cooperatives in the state, says Mr.
Ejigbo. Forty-one of those are groups of
adire merchants; the rest are of dealers in
other goods such as dried food products,
fish and poultry. The adire co-operatives
have received a total of N230 million in
loans since the scheme started.
The matching funds programme
started in 2008. At that time the loans
were solely to buy equipment, not as
working capital; and full repayment
was expected in 15 months. The bank
learnt from that early experiment and
modified it by doubling the tenor, and
also loosening the application restrictions
so that it could be deployed as operating
capital.
“The rate of default reduced when we
increased the tenor,” says Mr. Eji-gbo. The
repayment rate in Ogun State, according
to the bank, is in excess of 90 per cent.
He adds that the loan scheme has helped
create in excess of 2,500 jobs along the
adire value chain, from manufacturing to
sales and distribution.
“If people are given the opportunity, if
you believe in them, they can turn things
around,” Ejigbo says. “And that’s what
BOI has done. So far the bank has no
regrets.”
Family matters
Another adire-maker, Oluwakemi
Somuyiwa, says her cooperative – with 15
members – also got N8m. BOI gives them
30 months to repay – another difference
between a BOI loan and a commercial
or microfinance bank loan, for which
repayment tenor averages 12 months.
Today, Somuyiwa is in one of her two
stores, along a row of stores facing the
busy street, above which a flyover has just
been completed by the state government.
(The construction led to the demolition of
dozens of shops; Somuyiwa lost the four
she owned and the two she now owns
are fairly recent acquisitions.)
She’s babysitting for her daughter. The
four-month old is restive, and crying.
Her store is six feet by six feet; the
floor covered in rug; ceiling a stretch of
cardboard from which a single energy-
saving bulb dangles. The walls are stacked
ceiling-high with fabric. On the concrete
floor which serves as a porch sits a table
also piled with fabric.
She’s Otun Iyaloja, second-in-
command in the market’s administrative
hierarchy. Soon, a small group of women
pays a visit. From their conversation, it
seems they are fellow traders reporting a
colleague’s misdeeds to her.
“I was born into this industry,” she
begins to tell her story. “This business is
inherited. See my daughter, she was born
into it. They go to school, get jobs, and
come back (here). I’ve got children with
Master’s degrees, they may not sit here
with me, but they all know about the
business.” Somuyiwa’s son, Ekundayo,
says this embroidery process – usually
‘Only BOI has given us loans at
single-digit interest rates,’says Ogunfidodo.
special report
 | BOI IMPACT
commissioned by clients for special
celebrations - can produce fabric that
sells for as much as N25,000 for five yards
of material; four to 10 times the average
prices
Sometimes, however, people come
into the trade outside of the family lines
– by an apprenticeship system common
across many artisanal vocations in
Nigeria. The apprentices have to spend a
minimum of six years with a “master”. The
first year is spent “serving” – no tutoring,
strictly errands and menial tasks. The next
five years are spent actively learning the
trade, which, in the adire industry covers
production and marketing. Apprentices
typically pay for the learning they receive.
Upon “freedom” – the term applied to
completion of learning – the student gets
a certificate, and can launch his or her
own business.
In his study, Zakaree Saheed
also found that a little over half (45
respondents) got into the business
by inheritance, while the rest came in
through apprenticeships and other
forms of formal and informal vocational
training.
Changing times
Making adire involves “resist-dyeing”
of fabric – a technique known as “batik”
and designed to ensure that the applied
dye only selectively penetrates – to
produce striking uni- or multi-colour
patterns. Various methods are used to
achieve the selective “resistance” to the
dye; ranging from the use of cassava
starch or melted paraffin wax (applied
using stencils), to seeds and stones (tied
to the fabric using string), to stitching
(by hand or machine, using local thread,
iko). The most complicated – and by
extension, expensive – methods involve
painstaking “tracing” and embroidery
techniques applied after dyeing has been
completed.
From the start the craftspeople have
a design in mind for the material, which
the series of processes – starching,
waxing, tying, threading – is supposed
to help realise. “There are some designs
you can’t know if you weren’t born into
this trade,” says Somuyiwa. “Every now
and then I dig up old designs from my
childhood, and re-introduce them.”
Ogunfidodo on his own part says
he sometimes creates completely new
designs for his material.
The adire industry in Abeokuta dates
from the early 19th
century, but reached
its apogee in the 1920s. The earliest adire
makers used indigo dye and salt; the
indigo dye creating a trademark blue-
and-white output (one well-regarded
book-length study of the early decades
of rise of adire-making, by American
academic Judith Byfield, is titled: “The
Bluest Hands” – evoking an image of the
dye-stained of the artisans).
But technological breakthroughs in
the early 20th
century quickly rendered
the traditional raw materials and
methods obsolete. “New ingredients
– caustic soda and synthetic indigo –
transformed the technology of indigo-
dyeing, making it an easier and more
stable process,” writes Colleen Kriger
in her 2006 book, Cloth in West African
History. “By the 1930s, adire production
relied heavily on materials that were all
imported: factory-made cloth as well as
the caustic soda and synthetic indigo for
the dye vat.” (The import-dependence
of the industry, dating back to the first
half of the 20th
century, continues to
pose a challenge. Most raw materials –
from the ‘guinea brocade’ fabric to the
dyes and paraffin wax – are not locally
manufactured).
Starting in the 1960s, Kriger adds,
synthetic dyes began to be available in
many colours. (The original indigo dye,
derived from the leaves of a local plant, is
still sometimes used.)
According to Somuyiwa, the
finished products that are today sold
as ‘Kampala’ – as opposed to adire –
are the product of new designs and
production techniques introduced as the
artisans developed greater confidence
in expressing contemporary design
sensibilities. But they were careful to
ensure that the innovation did not
tamper with the production values that
set the art apart – the painstaking work
that goes into selecting fabric and dye
and design, and the handcrafted essence.
Now, however, there is a strong
threat from abroad – China. Somuyiwa
says Nigerians buy the original local
samples, and take them to China where
unscrupulous manufacturers replicate
them using cheap fabric and assembly-
line mechanisation. But the differences in
quality are obvious. “If you sweat while
wearing (the Chinese products), that’s
the end,” says Somuyiwa. “The colour will
powder you.”
She and Ogunfidodo both insist they
‘There are some designs you can’t know if you
weren’t born into this trade,’says Somuyiwa.
continued on page 34
special report
BOI IMPACT | 
WHERE THE
JOBS ARE
Minister for Trade, Industry and
Investment, Dr Olusegun Aganga in this
interview gives us some insights into how
he’s making the difference in Nigeria’s
industrial development.
BOI IMPACT: Unemployment is really serious here. How can it
be tackled.
AGANGA: Unemployment is not just a Nigerian issue, it is a global
one. When the (Jonathan Administration) came on board, despite
that our average growth hasn’t been
about 7% over the last 10 or 12 years,
we emphasised that the quality of
growth was far more important
today than ever before. That is why
our emphasis today is on inclusive
economic growth, which means that we
are focusing more on job creation.
Our focus on agriculture is part of
where you have a large number of
employment. We are also focusing on
the housing sector where jobs can be created. Our focus on the
MSME is why we launched the National Enterprise Development
Programme.
When you look at our Industrial Revolution Plan, one of the
criteria for identifying the sectors is that they are labour-intensive.
So, when I talk about sugar cane to sugar, a lot of jobs are created
in that sector. Cement supports about 1.6 million people today. So,
overall our strategy is about job creation and we are making very
good progress; although some would say that we could move faster.
But what gives me hope, what makes me think that this is
a problem that can be resolved very quickly, is that, given the
nature of my job, being responsible for industrial development,
investment, trade and enterprise, I face the business community, I
face the Nigerian people. And everywhere I have gone, I have seen
jobs. We complain and say we have high level of unemployment
and yet, when you look at the housing project, you see (the
artisans) are not from this country. If there are no jobs, why are
these jobs being done by non-Nigerians? So, there are jobs but we
need to fix the skills’ deficiencies.
If you look at the internship programme in Germany (or) the
Senai structure in Brazil, the first thing that they all have in place is a
national skills gap survey which tells you the skills gap in each of the
sectors. With that the schools can produce people that are relevant
to the economy. Secondly, it allows those who are responsible,
like Industrial Training Fund for vocational training to now make
sure that they train people for the economy as well. So, for the first
time ever, ITF is now working with UNIDO under my supervision to
create the first national skills gap survey in the country. When that
survey is available, it will be used by different ministries to plug the
gap. But we want a situation also where, it is not only the public
sector, it is an investment opportunity also for the private sector to
go into it.
Their bankable proposals in other countries have proven to be
one of the many profitable areas you can go into. If you look at
Senal, in Brazil, they train at least 1.5 million, if not 2 million people
a year. And about 90 per cent of them are in full employment
within three to four months; because, they have used that skills gap
survey effectively in their country. ITF and the Simeth institute are
working together to create additional
skills in the six geopolitical zones to,
at least, address issues in the housing
sector as quickly as possible.
What is government going to do
about addressing the issue of high
interest rates?
I think the issue is about affordable
finance. There are reasons why they
have been as high and part of it has to
do with the environment, the risks in
the environment and all that. But (BOI has a different template).
Indeed, there are people who swear by BOI, any day. If you ask
one of our celebrated pioneer industrialists in the East, Innocent
Chukwuma, for the secret to his success, he will tell you it is the
patronage of his state governor, Governor Peter Obi, but more
importantly, the support he got from BOI. (See: The Innosons
Testament, p14).
He tried the commercial banks, he failed woefully and owed a
lot of money until he came to BOI and the difference was clear. And,
BOI is now looking more at the small and growing businesses or the
micro businesses. Through such schemes as cooperatives lending,
bottom of the pyramid and working with micro finance institutions.
But as a country, we need to look beyond that. We need a
finance reform programme. Some businesses require short term
lending while some others require long term money. So, there
is a team working on the financing value chain now so that the
Industrial Revolution plan can work.
Standard Organisations of Nigeria is another area. Selling to
Nigerians or you want to export, it is important that you meet the
international standards. You know that the president has made it
very clear, that we must consume what we produce and we must
What gives me hope (is
that) everywhere I have
gone, I have seen jobs,
we simply need to fix the
skill deficiencies.
- Olusegun Aganga
 | BOI IMPACT
q&a
BOI IMPACT | 
produce what we consume and government is there to make sure
that they buy those products.
How far has the National Enterprise Development Programme
(NEDEP), launced on 11 February progressed?
NEDEP is one of the many programmes we have, not only to
grow the small and growing businesses and the SMEs and the
micro businesses, but it is also the opportunity to create jobs. It is a
unique and special sector in any country. When you have a sector
that is about 17.25 million in terms of the entities there, and the
sector is employing 32 million people, accounting for 70 per cent
of our workforce, it is a very important sector. It is the only sector
that, regardless of whether the economy is doing well or not, it
continues to employ people.
Because, if things are not going well in the big companies, they
make you redundant, you sit down at home for a week or two, you
try to apply but after a while, you set up a business. So, it is a place
that people come to all the time. But unfortunately until now, no
government has taken it as a sector
on its own. Yes, we had SMEDAN but
you know, when we had SMEDAN, it
was only in 13 states of the federation.
Today, under NEDEP, SMEDAN is now in
the 36 states of the federation.
Secondly, we treated and made
policy for everything from the centre.
The SMEs, micros are in the states and
local governments so, the idea is to set
up state councils, state MSME councils
where the issues are discussed and addressed. We have done that
in many states now and then, to have a national MSME council that
will be chaired by the vice president, have the necessary ministries
and agencies that will be relevant, the private sector in the same
place, addressing the issues affecting that sector.
The good news is that we have had significant interest from
the private sector. A lot of them have come into many of the
programmes because, part of what we are doing is to address the
problems they have. The commercial banks are also joining up.
Stanbic IBTC, First Bank have each dedicated a certain amount for
NEDEP. So, if we have good entrepreneurs, business plans, it is not
just to BOI, we are sending them to FirstBank, to Stanbic IBTC and
other banks. Fidelity and Diamond Bank are very interested.
We even have some companies that have money dedicated
to SMEs that are willing to make their funds available for any
entrepreneurial programme. In terms of market access, we have
been very encouraged by the response from the private sector
where the private sector agrees that the SMEs that come under
them become part of their supply chain and in some cases, not just
the supply chain, they can be end users of their products.
If you look at Lafarge, for example, they do cement. They are
now working with block makers and they want to set up block
makers all around the country, fully trained so that they can deal
with the issues of collapsed buildings etc and, we will work with
them, they will be funded, they will be trained and they will set up
their own businesses and run their own businesses at that level.
I am actually going to markets very soon to deal with traders,
they are micros. I need to make sure that we address their concerns.
So, we have been going around, doing different things but we
are very encouraged by what the private sector is doing and the
support we have received from them today and, of course, the last
thing is to have the virtual market place where SMEs who want to
sell their products advertise their products and those who want to
buy their products, go there to buy as well. So, there are a number
of initiatives which we are working on but you will see more action
also once a council is in place because, anyone can bring a memo
through SMEDAN on ‘what do we need to do to improve the
environment’? Our job is to create the enabling environment for
them and we are very determined to
address that. We have reduced the cost
of starting a business. If you go to CAC
for example, the cost of registering a
business, we have reduced it by about
50 per cent from last 1 October.
Any new plans to make small
businesses tap into the opportunities
AGOA avails?
Unlike other countries that have
done well (Ethiopia, Kenya, Lesotho),
we didn’t have a strategic plan for AGOA but now we do.
Most people are not aware that AGOA is a pact between Africa
and the United States where you can export about 6000 wines to
America, duty free, quota free. We had focused too much, on to
some extent on exporting, just in our normal way, exporting raw
materials, agric produce and all that.
But it is a lot easier when you are actually exporting processed or
completely processed food items or manufactured products and that
is what other countries have done better. So, instead of just sending
pepper, if it is dried pepper, well ground, it does better. And then, if
you look at the items that have higher duties for example, and you
export those items to America, your goods are far more competitive
because of the duty rates in the United States. If you look at Kenya
for example, they have a garments sector there, where they are
producing all the garments for McDonalds in the United States and
in that factory in Kenya, they are exporting everything under AGOA,
they are employing about 3000 people there.
America is reviewing the AGOA now. We hope that it will be
reviewed and approved in the same manner, we are willing to work
with them to make it a better product but now, we should be in a
better position to take advantage of AGOA.
q&a
NEDEP is not only to
grow the small and
growing businesses and
the SMEs and the micro
businesses, but also to
create jobs
 | BOI IMPACT
q&a
WHAT WE
NEED TO DO TO
GET TO WHERE
WE WANT TOHe leads one of Nigeria’s highly diversified
and successful groups, BUA, and has
been the chairman of a publicly quoted
company – the Cement Company of
Northern Nigeria Plc - for many years.
He was re-appointed for a second term
by President Goodluck Jonathan as the
Chairman of the Board of the Bank of
Industry.
Quite a busy person, he found time to
talk with a team led by Editor Hadiza
Olaosebikan to answer questions on
diverse issues including whether he would
have time for the Bank.
You should find this interview a delight.
BOI IMPACT: How do you feel on your coming back as the
chairman of the bank?
ALHAJI ABDULSAMAD RABIU: I am really honoured. The
fact that somebody is being appointed as the chairman of this
great institution, I believe, is an important thing. And that, I
also believe, is an indication that one was appreciated by Mr.
President and I think we should do whatever it takes to ensure
that we do not fail Mr. President. It is an important thing for
me - the fact that I have been called upon to come and serve as
the Chairman of Bank of Industry. So, it is a great honour and
privilege to come back to serve at the Bank of Industry for the
second time.
What impact do you think your returning to BOI would have
on the bank?
The fact that one is abreast of the workings, the issues, the
challenges of the Bank and its internal structures, I think, will
definitely be a positive thing in the sense that we, as a board,
will not waste a lot of time to learn the system, because a lot
of us are coming back to the board. So I think it is a good thing
because we are familiar with the terrain. Similarly, the fact that
I have been the chairman of a publicly quoted company for
many, many years puts me in a unique position to work with the
board and management of the Bank; to use it as a vehicle to try
and further promote and sustain Mr President’s Transformation
Agenda to make sure that the economy of this country is moved
forward. So, I think there are quite a few advantages to the fact
that we have been appointed to the Board.
Considering your vast business operations and tight
schedule, will you have time to discharge your obligations
to the Bank?
It is true. It is not easy, I know. Definitely, it will have some
impact on my time management, but I see this as a national
assignment, and I believe that every Nigerian should be proud
to serve their country when called upon. So, to me, I see this as
a national service and I am honoured. I will make time and do
whatever it takes to ensure that I give as much time to the Bank.
Like I said, every Nigerian must feel proud to be called upon, so
for me, there is a sense of fulfilment in these kinds of things. I
am really proud, and I will make the time.
Let’s look at Vision 2020, whereby Nigeria is supposed to be
industrialising. How are you going to help the President in
achieving these objectives through the Bank of Industry?
First of all, the issue of job creation is very crucial, so we will
ensure that the bank partners with Mr. President’s job creation
agenda, without a doubt. I’m sure you are aware, just last week,
he inaugurated the Job Creation Board (JCB) to be chaired by
the Vice President, and the Vice Chairman is Tony Elumelu. I also
happen to be a member of that job creation board with other
such prominent Nigerians as Atedo Peterside, Aliko Dangote,
Bisi Onasanya. And the mandate of that board is to create three
million jobs in the next 12 months. So, the bank is going to work
with JCB to help it meet that target. We will also work together
with other agencies of government to see that this agenda is
achieved.
During the inauguration of the BOI Board, you said that
high ethical standards and professionalism will be upheld
at the bank, especially during your tenure as chairman of
BOI. Can you expatiate on this?
I believe that in an institution like the Bank of Industry, one
must make sure that the highest ethical standard is maintained,
and we would do whatever it takes to ensure that we adhere
strictly to the corporate governance principles, and I will give
you an example. I am in business, and we do a lot of business
with so many banks. Just before I was re-appointed as the
chairman of the Bank, my company applied for a facility for one
BOI IMPACT | 
q&aq&a
 | BOI IMPACT
q&a
of our projects here in Lagos, and it was being processed.
And the moment it was announced that I was re-appointed
the chairman, I called my people and told them, “Look, I have
now been appointed the chairman of this bank, and I do not
believe that we should have any facility whatsoever with the
Bank of Industry. I would want a situation where none of the
members of the board in fact has that kind of relationship.” So
I directed my people to withdraw the application immediately.
There were some protests, and I let them know that I believe
there would be conflict of interest. I do not want a situation
where I will be chairing a meeting where my company
submitted an application and I would have to take a decision on
that. So I told them immediately to withdraw the application.
So, that is one of the things that I think we need to be doing.
And as far as I am the chairman of this bank, I will not have
any facility with the Bank, even though I believe I am entitled
to get a facility from the Bank, given the fees, the rates, which
are much cheaper than commercial
banks; you are talking about 4-10%,
which is not the case with commercial
banks, which range from 14-18%.
They made a case that the application
is for our cement project under the
Cement Fund, but I still said ``No,’’
that we would not go ahead with the
application.
SMEs are known as the engine
of growth and they have their
challenges. What should they
expect? How are you going to
ensure that their challenges are addressed?
One thing that I am going to say first of all is that most of the
companies/individuals usually expect more financial advisory
services from the Bank because BOI is really good when it
comes to that type of thing. Secondly, efficiently run credit
administration from the Bank and also access to the Bank’s
market intelligence report that will aid and guide businesses to
making sound business decisions. Also, the way things are now,
we ensure that there is efficiency in the reduction of downtime
in terms of loan application, review and disbursement to some
of the bankable projects.
You know there are lots of projects, some of them are good,
some are not. But a lot of them are good. But then, we will not
be able to address all the bankable projects because we get a
lot of applications. But we will ensure that we do whatever it
would take, within reason, to ensure that we address some of
the bankable projects. But again, I must emphasise that BOI is
one of the best-run banks in the country. So, while there are a
lot of issues to address, there are also a lot of advantages that
these SMEs and businesses can come to expect from the Bank of
Industry.
Power remains one of the factors affecting manufacturers.
As someone who wears the shoes and knows where they
pinch, what is the way out?
In fact, power is one of the biggest challenges in our country.
With a population of 170 million people, with 4,000 to 5,000
MW capacity, it is not acceptable. That is the honest truth.
Again, I must commend the government for doing what they
are doing right now in terms of the privatisation of the power
sector. I think the government is on the right path, doing quite
well, but we still have issues. For example, 4,000MW is not
enough for a state. But what government is doing now is good.
But one thing I must add is that the government must invest
heavily in the gas infrastructure because I think that is the next
big thing.
And I will give you an example: there is no country in the
world that is developed without steel
development. But for you to be in
that kind of sector, you would need
a lot of power and gas, and those are
two key ingredients that must be in
place before you can really develop.
So gas is an area where, since we
already have it, I think we just need
government to invest very heavily. If
you want to do steel, for you to be
able to put up a steel plant, you must
have gas and iron ore. We have iron
ore in Nigeria and we have the gas.
For example, if you’re setting up a steel plant of about 1
million tonnes, you would need about 200-250MW of power,
you would need between 150,000 to 200,000 cubic metres of
gas per hour to be able to have your fully integrated steel plant,
which is from quarry, mining to domestication, palletising, right
down to the downstream of the steel production. So for you to
achieve this, you must have power and you must have gas. We
have gas, it is just for us to have the infrastructure to benefit
from it. Today, if you are looking to have 200,000 cubic metres
of gas per hour, that is over 6 million standard cubic feet per
hour and for you to have that, I think it is going to be really
challenging.
So I think government should invest heavily in gas
infrastructure before we would be able to get to the promised
land and I am happy to note that the government is working
quite hard with this hybrid project, AKK, that is the Ajaokuta-
Kaduna-Kano pipeline project, which is going to cost quite a
lot of money, but I think if that is done, it will reduce a lot of
the pressure on the power infrastructure in the country. Yes,
Just before I was re-
appointed as the BOI
chairman my company
applied for a facility from
the bank.I directed my
people to withdraw the
application immediately.
BOI IMPACT | 
it is true that we have challenges, but I think government will
definitely do a lot more. If you look at all the state governments,
especially Lagos, we have quite a bit of gas here in Lagos, most
of the industries/factories here, you find them having their own
captive power plants, which is not good.
We have a cement plant in Edo, which we are
commissioning either by the end of this year or early next year.
It is costing us almost $100 million just for power, because we
are putting up a power plant and we are building a pipeline to
enable us to get the gas ourselves to our site which is about
32km of pipeline…so the challenges and the issues involved in
putting up that pipeline, I must tell you, it is crazy!. We have all
sorts of issues. But we have to do it, because if you don’t do it,
there is no way we will have the power. So these are some of
the issues, which is why the government must do something
because without it, there is no way we can develop. But I am
happy to say that government is giving it the desired attention
and maybe very soon, that is will be taken care off.
Should this be driven by government or the public sector?
Well, it depends on how you look at it. Infrastructure is
quite an expensive aspect of this kind of thing (because of
funding), and I agree because it is possible for the private
sector to be involved, but then again, the government needs
to look at issues, because the pricing of the gas is an issue. A
lot of people do not want to invest because they believe that if
they do and with the price being regulated by the government,
they feel that they may not be able to make any money out of
it, so they are dithering. But I think the government is doing
something about it. But now, I think more people are in gas
infrastructure. We just have to do it. Otherwise, it would be
chaotic for us in the real sector.
Considering your wealthy background, how are you going
to help more Nigerians to become entrepreneurs, self-
employed, job providers instead of job seekers? I am sure a
lot of Nigerians just look at you and they think you started
wealthy. How will you assist such people, even though they
may not come to you, but by reading what you are going to
say now, how are you going to help them?
First of all, let me say that it is not easy and again, this is
not a task that BOI can solely handle. But then again, what we
can do is try and support most of these aspiring companies/
individuals by assisting them, by advising them, by ensuring that
we give them facilities to support them in a bid to ensure that
we support local content, and boost local patronage of Nigerian
q&a
I think more people are
investing in infrastructure.
We just have to do it.
Otherwise, it would be
chaotic for us in the real
sector.
 | BOI IMPACT
companies, because you know, one of the problems that we
have is that sometimes you see a lot of disparity between local
and foreign goods in terms of pricing.
For example, if you look at the issue of cassava, the
government through the Minister of Agriculture is trying to
get companies, especially flour mills, to use cassava flour as a
strategy to boost the purchase of our cassava. But if you look
at the pricing, you see the price of the cassava flour which is
locally produced is almost double the price of wheat which
is imported. So there are issues there, which we must look to
address so that we can encourage most of the producers and
promoters here. So I think we need to do more so that we
can patronise Nigerian companies and encourage them. It is
quite a bit of work, but I think we are getting there. You know,
quite a bit of the agencies in government are really trying
hard to achieve this. So it is not just BOI, but I think agencies of
government in Nigeria need to sit down together to see that we
address some of these issues.
If you have to advise a young person who wants to become
an entrepreneur, what would you advise that person?
Work very hard. It is not easy right now, because you see,
access to funding is the issue. Even if you have a good, brilliant
idea all set up, for you to get access to funding in Nigeria
today is very difficult, especially if you are a start-up. So to me, I
believe that one must really work very hard. And then the good
thing is that we have banks like BOI and other banks that are
thinking like us are there to help, but it is not easy. Despite this,
one must have to work very hard. But I believe that if you have a
good idea or talent in Nigeria, you should be able to make it.
How is doing business in Nigeria?
Nigeria is probably one of the best countries in terms of
doing business – and even though this is my personal opinion, I
am sure that there are a number of people who will agree with
me. Nigeria is one of the best countries to do business in terms
of return on investment. And most of these companies, look
at MTN, for example. At the time MTN came to Nigeria 10, 11
or 12 years ago, companies like Vodafone and others were not
even interested to come to Nigeria. But a few years after, they
were ready to pay more than double what they would have
gotten the licences for, and today, Nigeria is probably MTN’s
biggest revenue market. They are making a billion and a half,
two billion dollars from Nigeria. Nigeria, because of the sheer
number of people, we have 170-180 million people, we have a
growing middle class, and purchasing power is increasing, so
any foreign investor that knows about Nigeria will want to be
in Nigeria. So for me, I don’t even need to tell you, those who
know they know.
For example, look at cement. We have 170-180 million
q&a
Even though this is my
personal opinion, I am
sure that there are a
number of people who
will agree:Nigeria
is one of the best
countries to do business
in terms of return on
investment.
BOI IMPACT | 
q&a
people. In Nigeria today, there are three main companies that
are into cement production: Dangote Group, Lafarge and BUA
Group. Out of these three companies, Dangote is by far still
the largest in terms of production, but it still is not enough
because of the capacity that we have in Nigeria today. We have,
maybe – and I am talking in terms of production capacity, not
installed capacity – 23 to 25 million tonnes in total. Compared
to our population, where we need about 150 kg per head, we
have probably the lowest rate of consumption anywhere in
the world. This is the reason why cement is selling at N1,400 to
N1,500 per bag ex-factory.
And I can tell you today, the cost of production of cement
in Nigeria is about N700 per bag, because the biggest problem
you have today in Nigeria in terms of production is power. That
is why you can go and import cement for $50 a tonne from
Europe or from China or anywhere else; $50 a tonne is N400 per
bag, because one tonne is 20 bags, and $50 times 160 is about
N8,000, and the companies doing this are making money. And
if you are able to buy cement at N400 per bag in Europe, with
all their high cost of production, high labour cost, etc, imagine
how much it would cost in Nigeria.
Fine, we have problems with power, infrastructure and what
have you, which is why the cost is as high as N700. I am saying
this because I want to see a situation where, more investors will
come - and I have been saying to my business colleagues - when
cement prices will come down to N1,000 or below and we will
still be making money. But we need more and more investors.
The only issues we have is appropriate funding. To set up a
standard plant, which is about three million tonnes per annum,
you need a minimum of $500 million. That is part of the issue.
But if you are able to access $500 million to set up a plant, in
two years, you will get your money back.
And this is going to continue for the next 10 years. Don’t
mind what people are saying. If you look at the demand and
you look at the population that we have in Nigeria, you will see
that the minimum in terms of consumption should be about
300 kg per head. Three hundred times 170 million, we will be
looking at about 50 million tonnes or thereabouts. So, we need
to double our production capacity. We have 25 million tonnes,
may be by the end of the year we add five million tons, so we
still need 20 million tonnes. This will probably take us three to
four years, by which time the demand will be a lot more than
Look at cement.
We have 170
million people.
In Nigeria
today, there
are three main
companies that
are into cement
production,
but it still is not
enough...
 | BOI IMPACT
q&a
that because demand is increasing.
There are so many areas. This is just one area. If you go
to agriculture, it is the same thing. If you go to steel, it is the
same thing. If you go to other industries, there are so many of
them, and foreigners know. We don’t have to tell them. The
only good thing about in Nigeria is that Nigeria is one of the
few countries in Africa that we have our indigenous people
in control of our economy. If you go to any of these other
countries, you will see that they have the Lebanese, Indians and
others in control. In Nigeria, yes we have foreigners and we
want them to come and invest, but we Nigerians are also part of
it and I tell you, the opportunities are amazing.
Challenges?
The challenges are also there, there is no doubt about that.
The security issues are there but you know, high risk, high
reward. It is just that we have a lot of people. If you look at the
resources that we have...for instance, Kogi State, the entire state
is sitting on iron ore and limestone,
billions of tonnes. Look at iron
ore for instance, I mentioned steel
earlier, do you know that the two key
ingredients you require to set up a
steel plant, iron ore and gas, we have
them in Kogi State, or at least one of
them, iron ore, we have in Kogi State
and the gas can come from other
states.
As a country, we have those
two major ingredients. Not many
countries in the whole world have
those two ingredients. The largest
steel producer in the whole world, which is China (they produce
half of the world’s production [output]), worth over a billion
tonnes or thereabouts, they import all their iron ore.
In Nigeria, we have the iron ore and the gas, so if we are a
bit more serious about harnessing these resources, we will get
there. But I appreciate that some of these projects are quite
capital intensive. To put up a steel plant with the production
capacity of one million tonnes will cost you about $1.5 billion,
but then again, these are things that we must do in order to get
to where we need to get to. But if you are able to get the raw
materials, you should be able to get the funding.
As I said, Nigeria imports today, on the average, about $3-$5
billion of steel every year, because of the oil industry. So if you
are able to set up a steel plant in Nigeria, even if you spend $1.5
billion, you should be able to cut down on your foreign usage
by about 50% every year. So in no time, we could even stop
importing steel. And I am talking about specialised steel, such
as pipings, you know the oil industry uses that type of steel, but
we can do them, because the quality of the steel (because for
you to get that required type of steel), it must be from a fully
integrated plant. You cannot be using steel that you made from
scrap and most of the steel plants in Nigeria are mainly for long
products and they use mainly scrap to make the steel. There
are some that are importing billets but what you need is a fully
integrated plant that can take the process from iron ore to the
finished products.
These are some of the things that we need. So the
opportunities are there, but access to funding is key. That is why
it is important for government to assist by ensuring that there
are enough intervention funds for most of these major projects
because they are key and there are so many others that we can
also talk about. Back to your question, I believe that foreigners
know that Nigeria is a good investment destination. That is
why they are here all the time. And that is not just with the oil
industry. Anything to them; they know.
Let’s now know more about you....
Abdulsamad is just an ordinary
Nigerian businessman, working
hard, striving to put up industries
and factories as his contribution to
the economic development of this
country. And I believe in Nigeria, and
again, this is a place that I know that
opportunities are so many. If you can
have the idea and access to funds,
there are so many things that you can
do. So I am just here, trying my best
to see that I put up industries and
set up companies to be able to get
people to work.
What is your life mantra?
First of all, to be honest, I am a shy and quiet person. I shun a
lot of publicity. I believe that all of us should work really hard to
help our people, our country, and do whatever we can to make
sure that our country or people succeed.
How about your views about life, your mentors, favourite
books? Parents?
Maybe the likes of our founding fathers, the late Sardauna
of Sokoto, Obafemi Awolowo, Herbert Macaulay, Nnamdi
Azikiwe…I appreciate those people a lot because they lived and
died for this country.
And I must add that my father is somebody I still appreciate
a lot. Thankfully, both my parents are alive at my age. There are
not many people of my age who still have both parents alive. So
I want to appreciate my dad, he has really tried for us and he is
one of my greatest motivation.
Abdulsamad (Rabiu) is
just an ordinary Nigerian
businessman, working
hard, striving to put up
industries and factories
as his contribution to the
economic development
of this country.
BOI IMPACT | 
q&a
 | BOI IMPACT
GIVING BACK.
CREATING JOBS.
BAKING BIGGER
CAKESA consummate banker, Mr. Rasheed
Olaoluwa was until 19 May 2014, when
President Goodluck Jonathan appointed
him Managing Director/Chief Executive
Officer of Bank of Industry (BOI), the
Group Chief Executive Officer of UBA
Capital Plc. In fact, he led the expansion
of UBA from a one-country institution to
19 countries over a three and a half-year
period.
His appointment was hailed by financial
and economic experts as an example
of a “round peg in a round hole.” (See
profile at “MEET THE BOARD”).
BOI Impact’s Editor Hadiza Olaosebikan
and her team, engaged him for a Q & A
on his plans for BOI. Sit back, relax and
enjoy the interview.
BOI IMPACT:L Let’s start by asking you what your
appointment as the managing director of the Bank of
Industry meant to you when it was announced.
MD/CEO: Thank you very much. It means a lot. After having
spent over 26 years in banking, I believe that it’s time to give
back to Nigeria – in which I have thrived over the years. I see
the platform of the Bank of Industry as a veritable one to really
add value to the society. And the way I am going to do that is to
bring the totality of all the experience I have gathered over the
years to bear on running of BOI with a view to helping to create
millions of jobs for Nigerian youths.
Creating millions of jobs sounds like a vision that you have.
How do you plan to achieve that?
Well, in a number of ways. For instance, one of the areas I am
really going to focus on under this administration is agricultural
processing because I believe very sincerely that’s an area where
Nigeria has very tremendous advantage. We have many crops
that we harvest at different times of the year.
Essentially, what we need is to organise ourselves for
processing these commodities into different products. Right now
we pay a lot of money importing food that we could actually
process locally in Nigeria. A lot of the raw materials used in
our industry can also be obtained locally; we only need to add
value to the agricultural products. Then, I think some of the
basic ingredients are beginning to fall in place, for instance,
the Federal Ministry of Agriculture and Rural Development has
identified a number of veritable locations for people to cluster
for agricultural processing.
These are the kinds of initiatives we will like to follow on.
I believe that through this we can actually create hundreds of
thousands of jobs in every state. And luckily for Nigeria, every
state has got three, four, five products that they can focus on. So
even at BOI, what we can do is, let’s even identify the top three
products for every state and there is so much that we can do.
Most banks shy away from agric funding or anything that
has to do with agriculture. And that’s the area you say you
want to focus on. Do you see any threat to this?
I understand where the banks are coming from. Agric
processing, call it a large farm, there is a style to doing it. I think
that what we have leant in the last four years or so since the
appointment of the current minister of agriculture is that the
style to doing agric is professional and I believe that if you follow
the value chain, if you follow the value-added process, there
are ways to which you can add value to agric products. It can be
successful; it can increase the chance of success, and that’s what
we are trying to do.
Let’s take a single crop and look at the value chain.
For instance, let’s say cassava. I know that people have
spoken a lot about cassava bread. We can process raw cassava
into cassava flour, which can then go into the flour milling
process. In addition to just cassava flour, even if we take gari
that we eat, right now it is produced by these women who are
in rural locations, who use large frying pans to produce at very
micro scale. There are complex plants that we have identified
at BOI that you can procure at five million naira. So you can
do it on a bigger scale. So we can actually produce a lot of
products from cassava, so there is cassava flour for bread; there
is gari, which is a staple in Nigeria; there is syrup, which is a raw
material that we can use in industry. So we can identify a lot of
farm products and derivative products that can be made by just
small-scale industries in rural locations.
q&a
BOI IMPACT | 
Cassava Bread development is one of the areas where the
president will be expecting monumental results. How far
have we gone on this?
Yes, we’ve gone very far. The Federal Ministry of Agriculture
put together a N3 .4 billion fund for the Cassava Bread initially.
There is a N1.1 billion for grant and the balance of N2.3 billion
loan. We’ve actually more or less approved most of the loans
to many beneficiaries. But what we are doing is to complete
the documentation so we can complete the disbursement
of the loan. I think in another month or two, we would have
fully disbursed on that particular initiative and I believe it is an
initiative that is commendable in the sense that all the money
we’ve been spending in terms of foreign exchange to import
wheat, it will help reduce such expenditure in foreign exchange.
You come across as being very passionate about ensuring
that BOI’s impact is felt in all sectors of the economy,
especially in the agricultural sector (that’s what you are
talking about
now). What drives
this passion?
Passion is
energy. You know,
when you focus
on something
that gives you
excitement,
something you
are excited about,
it’s almost second nature to me. I have always been a very
passionate, professional banker right from day one. If you
believe in what you are doing, if it’s worth doing, and you have a
strong passionate view about the picture, it’s just …
During the inauguration of the Board by the Honourable
Minister of Trade and Investment, he challenged the Board
to consider new funding models, particularly in the areas of
access to finance. What are your thoughts on this?
Yes, we are doing so in many ways. First, in terms of the
approach to lending to SMEs, we have looked at what we have
internally, the current process and (we have seen that) there
is an obvious need for improvement, in terms of making the
process more seamless, making the process more efficient,
cutting down a lot of the red tape. I believe in the next few
weeks or maximum a couple of months, our stakeholders, or
customers will begin to see the impact of what we are doing to
improve that process. Also in terms of engagement, one of the
things we found out is that the bulk of applications we receive
MSME’s do not usually meet our standards. So we spend quite
a bit of time, going back and forth, trying to ask questions here
and there, trying to fill the gaps, and so on and so forth. This
is why we decided to shortlist a number of people in all the
states of the federation, who will serve as what we call Business
Support Service Firms. These are people who are engaged with
the MSMEs in the various Local Government Areas in the state,
people who are closer to the (prospective customers); who will
help them package the proposals so that by the time they get
to BOI, they have what we call a bankable proposal. We believe
that will hasten the process. That will also increase the chance of
success for the MSMEs.
But will it not increase the costs they incur? Since these
people are coming in as consultants , will that not affect
their income?
That’s an issue that has come up in our discussions of late.
And the way we are looking at it is two-fold. First, in terms of the
overall cost to the SMEs, we will take certain steps to ensure that
overall cost does not increase. But beyond that, the advantage
to the SMEs is that by using those firms you are increasing your
chances of success. Rather than come
directly to us and having the risk
of having your proposal declined,
or having to go through a lengthy
process of six months and more, you
can have to go through this one to
package a proposal that can have a
good chance of success.
Currently, BOI has seven Zonal
Offices including Lagos, and
you have always spoken about
deepening the bank’s credit delivery process and increasing
access to its loans, but feedback from customers indicate
that seven offices are insufficient. Would locations be a
stumbling block? And wouldn’t increasing zonal offices
impact on overheads?
Well, as you are aware, Bank of Industry is a national
development institution. And when you say ``National’’ in
Nigeria today, you mean the 36 states of the federation. So
it’s quite obvious that having six or seven zonal offices is below
the mark. One of the corporate strategies we want to have is to
have offices in state capitals. Eventually we are going to be in
every state capital, but I think we are going to start with those
states where we already have partnerships. We have signed
MOUs with a number of state governments and will like to start
with those and by the time we are done with the ones we have
now, a lot more states would have signed MOUs with us and
then eventually we will be in all the state capitals. That’s the only
way to stay in touch with our customers in all the states of the
country.
What happens if some governors refuse to sign the MOU?
That will be very unfortunate. We believe that the state
q&a
(Banking is) almost sec-
ond nature to me.I have
always been a very pas-
sionate, professional
banker right from day
one
 | BOI IMPACT
boi impact vol 1 no 1 final (1)
boi impact vol 1 no 1 final (1)
boi impact vol 1 no 1 final (1)
boi impact vol 1 no 1 final (1)
boi impact vol 1 no 1 final (1)
boi impact vol 1 no 1 final (1)
boi impact vol 1 no 1 final (1)
boi impact vol 1 no 1 final (1)
boi impact vol 1 no 1 final (1)
boi impact vol 1 no 1 final (1)

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boi impact vol 1 no 1 final (1)

  • 1. INNOSONKEEPINGNIGERIA MOVING ADIRE PAYS NEWBOARD. NEWMD. SAME MANDATE AN ENTREPRENEUR TOWATCH P E O P L E  P E R F O R M A N C E  P O S S I B I L I T I E S IMPACT BOI V O L U M E 1 N O 1 S E P T E M B E R 2 0 1 4
  • 2. 21 Q&A WHAT WE NEED TO DO TO GET TO WHERE WE WANT TO Interview with BOI Chairman Alhaji Abdulsamad Rabiu 28 Q&A GIVING BACK. CREATING JOBS. BAKING BIGGER CAKES. Interview with BOI MD Mr. Rasheed Olaoluwa 35 FOCUS UNCOMMON ENTREPRENEURSHIP Ocheni Simon, a rising star 37 INSIGHT DOING IT LIKE CHINA R E G U L A R S 3 ROUND-UP 39 LOOK Editor Hadiza Olaosebikan Editorial Adviser Kola Adewole EDITORIAL Gbenga Oyesanya Solomon Tommy Ayo Oluwatuyi Toyin Oyekanmi ADMINISTRATION Kehinde Alade LEGAL Abdullahi Sadat contents 8 LEAD THE INNOSON TESTAMENT The story of Chief Innocent Chukwuma’s quest to keep Nigeria moving through the manufacture of vehicles, motorcycles, plastics and other products at Nnewi and Enugu 14 SPECIAL REPORT ADIRE MARKET TRADE SECRETS (JUST A FEW) An insight into how the tie and dye industry works and how BOI helps 18 Q&A WHERE THE JOBS ARE Interview with Dr. Olusegun Aganga, Minister for Trade, Industry and Investment ForewordBY THE MD/CEO Orchestrating Development Impact at BOI A very warm welcome to this in- augural issue of the BOI Impact magazine. We have begun a journey towards transforming the Bank of Industry into a world-class Development Finance Institution and the most impactful in Africa. As you are aware, BOI’s mandate is crucial to the success of the various government policies aimed at revamping and transforming the Nigerian economy. The Nigeria Industrial Revolution Plan (NIRP) and the National Enterprise Development Programme (NEDEP), were launched early 2014 by President Goodluck Ebele Jonathan, GCFR, as integral parts of the Federal Government’s Transformation Agenda. Under these plans, BOI has been assigned very important roles with respect to the provision of the required development finance. In cognisance of this huge responsibility, we are re-focusing on our core mandate of providing low-cost, medium-to-long term finance to large industrial projects as well as to small and medium industries. For instance, we recently launched the N5.0 billion Cottage Agro Processing (CAP) Fund to address the post-harvest agricultural value chain. By so doing, we are supporting the real sector in wealth creation and reducing unemployment in Nigeria. We are also adopting global best practices for the management of development banks, and to this end, we have initiated a number of projects designed to improve the efficiency and effectiveness of our operations and processes. We expect our improved practices to result in significant cost savings and better service delivery to our customers. BOI Impact seeks to orchestrate BOI’s efforts, activities and results in our ongoing quest for developmental impact and global best practices. In this issue the Honourable Minister of Industry, Trade and Investment, Dr. Olusegun Aganga and the Chairman, Board of Directors of BOI, Alh. Abdulsamad Rabiu, share some very interesting perspectives on Nigeria’s development agenda and the role of BOI. We also highlight the activities and achievements of some of our exemplary customers. It is our hope that these stories will inspire millions of other Nigerian businesses and entrepreneurs. My colleagues and I are working extra hard (and smart too!) to deliver result in terms of better practices and greater developmental impact. I commend their efforts and urge them to sustain the current tempo, as it is in our national interest to achieve the set goals and objectives. We have printed limited hard copies of this issue, consistent with our objective of making the publication 100% online by the third issue. For now, the online edition is available at www.boinigeria.com/Impact I invite you all to please sit back, relax and enjoy BOI Impact. Warm regards Rasheed Olaoluwa Managing Director and Chief Executive Officer  | BOI IMPACT
  • 3. TO BE THE CATALYST Catalyst (noun): a person or thing that pre- cipitates an event or change T hat’s what the new Board of Directors of the Bank of Industry (BOI) has been charged to become; in respect of funding of Medium, Small and Micro Enterprises (MSMEs) in Nigeria. The charge came from the Minister of Industry, Trade and Investment, Dr Olusegun Aganga, at the inauguration of the Board, in Abuja. It’s indeed the Board’s first priority as IT has been asked to achieve this within a “reasonable timeframe.” Aganga described the MSMEs, with a workforce of over 35 million, as a group the Federal Government could not ignore. He stressed that an upward review of the bank’s loan portfolio could not be over-emphasised in view of the multiplier effects of MSMEs on the nation’s industrial base, employment generation’s drive and its potential contribution to the GDP. “I would like to use this occasion to remind BOI that the future of MSMEs rests squarely on how responsible you are to their funding needs. The current arrangement where less than 15% loanable funds is being set aside for MSMEs’ need is unacceptable and must be reviewed upwards having regard to the potential of the sector to create jobs and generate wealth. “The practice in China and Indonesia where significant portion of loanable funds in most cases without collateral is extended to MSMEs with close to 97% repayment rate should encourage you to emulate and do even more for Nigeria’s MSMEs,” he said. (See: “Doing it like China,” p37) He added that on its part, the Federal Government is already repositioning the ministry as a major driver of President Goodluck Jonathan’s Transformation Agenda through the full implementation of the National Industrial Revolution Plan, NIRP and the National Enterprise Development Programme, NEDEP, both recently launched by the President. He urged the Board to actively support the NIRP and NEDEP to stimulate the Federal Government’s quest for rapid industrial development in the country, and the bank’s mission of wealth creation and employment generation. Just to let the Board knows that he takes this seriously, the minister told them: “I expect your board to forward to me quarterly progress reports showing performance in the quarter and year to date with details of analysis of loan book by gender, by sector, impact on NIRP and NEDEP, jobs created, and contribution to national development.” The Minister reiterated that the bank’s mission is to transform Nigeria’s industrial sector, integrate it into the global economy and provide financial and business support services to existing and new industries to enable them attain modern capabilities to continued on page 6 From left: Minister of Trade, Industry and Investment, Dr Olusegun Aganga; Chairman Bank of Industry, Alhaji Abdulsamad Rabiu; and the new Managing Director/Chief Exec- utive Officer, Bank of Industry, Mr Rasheed Olaoluwa, at the inauguration of the 4th Board of the Bank of Industry BOI IMPACT | 
  • 4. Meet the Board • Alhaji Abdulsamad Rabiu CON is the Chairman/CEO of the BUA Group of Companies, and two-time Chairman of the Bank of Industry’s Board of Directors. He was Chairman of BOI’s third Board of Directors up till 2011. Over a period of 25 years he has grown BUA Group into a world-class conglomerate with interests in manufacturing (sugar, cement, flour and oil mills), ports and terminals as well as real estate. He was recently ranked by the influential international Forbes Magazine, as one of Africa’s billionaires. Alhaji Abdulsamad sits on the Boards of several companies. In the past, he served as the Chairman of the Board of the defunct Tropical Commercial Bank Ltd from 1993-1999 and was a member of the board of Transcorp Hilton Plc. He currently sits as the Chairman, Board of Directors, Cement Company of Northern Nigeria Plc. Alhaji Rabiu has won many prestigious awards, both locally and internationally, as a testimony to his hard work, leadership, excellent business acumen and indefatigable entrepreneurial spirit. He studied economics at Capital University, U.S.A and holds an honorary doctorate degree from the Crescent University, Abeokuta, Ogun State, Nigeria. He was also awarded with the Nigerian national honour of Commander of the Order of the Niger (CON) by the Federal Government in 2012. He is happily married and has children. • Mr. Rasheed Adejare Olaoluwa has over 26 years experience in banking and financial services sector, playing senior and executive level roles in Commercial and Investment Banking, Treasury Management, Financial Control and Strategic Management gained at reputable institutions such as KPMG, GTBank, Ecobank and UBA. He was the pioneer Group CEO of UBA Capital Plc, a leading financial investment services company. Prior to this, he was an Executive Director at the United Bank for Africa (UBA) Plc, where he led the largest strategic business directorate in the Banking Group. He was also the pioneer CEO of UBA Africa from 2007 to 2011, during which time he extended UBA’s operations into 18 countries in Sub-Saharan Africa. round-up Standing from L-R: Waheed Olagunju, ED (Small and Medium Enterprises); Kenneth Effa, ED (Corporate Services); *Ahmad Abdullahi, former Director (representing Central Bank of Nigeria); Mohammed Alkali, Executive Director (Large Enterprises); Omoniyi Ezekiel Fagbemi, Director (representing Ministry of Finance Incorporated, MOFI). Sitting from L-R: Uju Aisha Hassan Baba, OON, Director (representing Min. of Industry, Trade and Investment); Rasheed Olaoluwa, Managing Director/Chief Executive Officer; Abdulsamad Rabiu, Chairman, Board of Directors; Lawrence Osayemi, Director (representing Manufacturers Association of Nigeria, MAN). *Olufemi Fabamwo (not in picture), now represents Central Bank of Nigeria on the Board  | BOI IMPACT
  • 5. round-up He holds a first class honours degree in civil engineering, an Associate Membership of the Institute of Chartered Accountants of Nigeria (ICAN) and an Executive MBA from International Graduate School of Management (IESE), Spain. • Mr. Waheed A. Olagunju who joined the Bank of Industry’s precursor institution, the Nigerian Industrial Development Bank (NIDB) in 1990, was appointed Bank of Industry’s Executive Director (Business Development) in 2012. Over the past 24 years, he has served as Company Secretary of NIDB/BOI for more than 15 years between 1997 and 2012 in addition to being General Manager, Strategic Planning, Corporate Secretariat and Corporate Communications of BOI between 2007 and 2012. He was recently made the Executive Director (Small and Medium Enterprises) following the reorganisation of the Bank in 2014. Mr Olagunju bagged his first and second degrees in 1981 and 1984 respectively from the University of Lagos and holds a professional certificate in Investment Appraisal and Risk Analysis from the Queen’s University, Canada. • Mr. Mohammed G. Alkali holds a first-class Bachelors Degree in accounting from Bayero University Kano (1983) and a Masters Degree in economics from the London School of Economics (1986). He started his working career in 1983 as a lecturer with the University of Maiduguri and joined the banking industry in 1988. During the span of 25 years in banking, he has garnered composite experience that cuts across commercial, investment and development finance. Prior to his appointment as Executive Director, Operations at the Bank of Industry in 2010, he served as BOI’s General Manager, Large Enterprises (2002 to 2005) and General Manager, Small and Medium Enterprises (2005 to 2010). Following the restructuring of the bank in 2014, he was re-designated Executive Director, Large Enterprises. Alkali is also an alumnus of Harvard University, the University of Chicago, the Stanford University and the Columbia University, amongst others • Mr. Kenneth N. Effa who bagged a Bachelors degree in economics from the University of Maiduguri in 1980 is a fellow of the Institute of Industrialists and Corporate Administrators (IICA) and the Chartered Institute of Management Accountants (CIMA). He had spent 30 years in the Central Bank of Nigeria, where he rose to the position of Assistant Director and was appointed Executive Director representing the CBN on BOI’s Board in January, 2014. • Mr. Omoniyi Ezekiel Fagbemi (FCA, mni) is a 1988 accountancy graduate from the Obafemi Awolowo University, Ile-Ife. He has an MBA from the same university in 2000, and is a member of the National Institute for Policy and Strategic Studies, Kuru having completed the Senior Executive Course 35 in 2013. He has 25 years working in both the private and public sectors, starting as an Internal Auditor at a private firm to becoming the Director, Revenue and Investment, Office of the Accountant-General of the Federation. He has also served as an Assistant Director, Deputy Director, and Director in the Federal Ministry of Health, the Office of the Secretary to the Government of the Federation, and the Office of the Accountant General of the Federation. He is a fellow of the Institute of Chartered Accountants of Nigeria (ICAN), the Chartered Institute of Taxation in Nigeria (CITN), and the Nigerian Institute of Management (NIM). • Mrs. Uju Aisha Hassan Baba, OON has more than 30 years’ post-bar experience in Nigeria’s legal system. She was one-time Attorney-General of Anambra State, Director General Legal Aid Council of Nigeria and current Director of Legal Services, Federal Ministry of Industry, Trade and Investment. She is a Law graduate of University of Nigeria, Nsukka and attended the International Law Institute, Washington D.C, as well as the University of London where she bagged a certificate in Legislative Drafting. She is a member of the Nigerian Bar Association and has served on various committees. She is also an Officer of the Order of the Niger (OON). • Mr. Olufemi Adeoye Fabamwo holds a Master of Business Administration (MBA) from the University of Lagos. He has worked with the Central Bank of Nigeria since 1982, rising from Senior Supervisor, Development Finance, to Director, Other Financial Institutions. He has served on the boards of several FG establishments, including the Nigeria Export-Import Bank (NEXIM) and the National Insurance Commission (NAICOM). He is an associate member of the Chartered Institute of Bankers (CIB) UK, a member of the British Institute of Management, and a fellow of the Chartered Institute of Bankers of Nigeria (CIBN). • Chief Lawrence Ayinde Olakunle Osayemi who is the National Treasurer of the Manufacturers Association of Nigeria (MAN) represents the Association on BOI’s Board of Directors. He is an alumnus of the London Business School, the Harvard Business School, and was one-time Managing Director of Thomas Wyatt Nigeria Plc. Chief Osayemi, who is a lawyer and also a fellow of the Institute of Chartered Accountants of Nigeria (ICAN), also holds a Bachelor’s degree in Economics and was a member of the Steering Committee for Vision 20:2020. He was also the Pro-Chancellor of the Federal University of Agriculture, Abeokuta and was awarded a Member of the Order of the Niger (MON) by the Federal Government based on his contributions in the Organised Private Sector. BOI IMPACT | 
  • 6. round-up produce goods that are competitive in both domestic and external markets. Speaking for himself as the Board Chair- man as well as his members, Alhaji Abdul- samad Rabiu, who is also Chairman/CEO of BUA Group of Companies, expressed his appreciation to the president for imposing confidence in them. He equally commended the minister for the people-oriented policies and programmes he has set for the econom- ic development of the country. BOI’s Managing Director/CEO,  Mr. Rash- eed Adejare Olaoluwa, affirmed that that the management would work hand-in-hand with the board with a view to strengthening the bank’s operations for global competi- tiveness  and to be at par with some of the world’s leading development finance insti- tutions. Olaoluwa noted that he would work closely with other relevant stakeholders towards addressing the non-financial issues facing the manufacturing sector and MSMEs. “Urgent steps,” he added, “would have to be taken to improve on BOI’s service delivery to enable it meet the unemployment challeng- es facing the country especially in the areas of wealth and job creation.” BOOST FOR AGRIC T he Bank of Industry (BOI) believes with the Federal Government of Nigeria that agribusiness can change the nation’s fortunes. Therefore, the bank is committed to helping move Nigerians from farming to small-scale enterprises, food processing and industrialised agriculture. BOI’s Managing Director/Chief Executive, Rasheed Olaoluwa revealed this plan to members of the Senate Committee on Investment who were on an oversight visit to the Bank’s Corporate Headquarters in Lagos. It’s simply keying into the government’s Industrial Revolution Plan as well as the National Enterprises Development Programme. Thus, the bank would be creating job opportunities in the agricultural sector. Its success in the Solid Minerals sector –where the bank has been focussing on the identified commercially- viable 44 solid minerals deposits available in the country – will serve as template.  Olaoluwa said the bank has entered into partnerships with many microfinance banks, which are very close to the grassroots and communities. The Chairperson, Senate Committee on Industry, Senator Nenadi Usman, assured the MD/CEO of the Senate’s partnership because “we believe that the Bank is one of the strongest agencies that the government has been using to ensure that the industrial sector in Nigeria is being properly positioned to absorb the nation’s manpower,” adding, “I believe that if small, medium and even large scale industries are assisted in Nigeria, we would have most of these people who have no work today, fully employed.” It’s a win-win situation for everyone: the bank, the Government, the unemployed. CATALYST continued from page 3 L-R: ED (Corporate Services and Commercial), BOI, Mr Kenneth Effa; Sen. Chris Ngige; Managing Director/CEO, BOI, Mr Rasheed Olaoluwa; Sen. Nenadi Usman, Committee Chair; Sen. Ahmad Maccido; Sen. Ahman Zannah; Sen Ibrahim Musa; Sen. Gbenga Obadara and Mr Niyi Olorishade, Committee Secretary  | BOI IMPACT
  • 8. I n his younger days, Chief (Dr) Innocent Ifediaso Chukwuma, OFR, took to the moniker, Innoson, with glee. So much so that when the time came to incorporate his first business, no other name clicked. Innoson Nigeria Limited (INL) Nnewi, registered with the Corporate Affairs Commission in 1981 to trade in tyres and motorcycle spare parts, has now grown into the conglomerate, Innoson Group (www.innoson-group. com), not only manufacturing motorcyles but also plastics - Innoson Technical and Industrial Company Limited (ITIC) Enugu; motor vehicles – Innoson Vehicle Manufacturing Company Limited (IVM) Nnewi; and tyres – General Tyres and Tubes Company Limited (GTT) Enugu. With its total workforce of 7,200, the group has a projected turnover of more than N50b per annum. “I was into buying and selling like everyone else,” the Nnewi-born gentleman explained to BOI Impact in his spaciously appointed office at ITIC along the Enugu-Abakaliki Expressway. The ambulatory schedule occasioned by the growth of his business has him on occasion shuttling to meet contingencies in his other offices in Nnewi, Abuja and Accra in Ghana when he is not travelling abroad. “My senior brother apprenticed me to our townsman Pius Emeka Maduka, elder brother to Cosmas Maduka of Coscharis, under whom I learnt the buying and selling of tyres and motorcycle spare parts at the Nkwo Nnewi Market. “At the end of the apprenticeship I started on my own; buying from importers and selling to the final consumers. In fact, I was doing so well that my brother left his original business to join me. When I was ready to start on my own, my brother settled me as was the practice and I registered my own company. “In no time we started importing and selling to wholesalers as well. From 1984, we started importing motorcycles THE INNOSON TESTAMENT lead  | BOI IMPACT
  • 9. whole. Then we moved into bringing the motorcycles completely knocked down and assembling them there in Nnewi. From very slow beginnings our sales volume rose to over 600,000 units per annum following which some Chinese companies granted us sole distributorship of their brands.” In this meteoric rise, Chukwuma is however quick to remind you that it took a proper look at the field to convince him – and in good time too – that manufacturing was not just the way out but the only way forward. Thus, while his competitors wallowed in the success of their trading exploits, he had his eyes set ahead. We did the local assembling by ourselves for about 10 years before entering into an agreement with Chongquing North Jianshe Import and Export Company Limited, a Chinese motorcycle manufacturer to establish a manual plant in Nnewi where top quality motor cycles were produced. When this did not make for enough production volume to achieve agreeable economies of scale, the next year we installed a fully automated assembly line making us the first fully indigenous motorcycle manufacturers in Nigeria.” Eventually, it was this determined drive for comparatively low prices and transfer of production technology that pushed him into plastic production. “Following our production of motorcycles, we discovered that most of the parts of the motorcycle apart from the tank, frame, exhaust pipe and engine were all made of plastic – the fenders, tail, headlight casing, front and rear bumpers, side covers and even the very helmet worn for protection, name them.” Apart from the motorcycle parts, ITIC – arguably the biggest plastic industry in Nigeria – was incorporated in 2002 with technical support from Cretec Industries Company Ltd Hangzhou, China. It is capable of producing injection, blowing and rotational moulds; metre boxes and accessories; melamine tableware, roof ceiling and foam products. Courtesy of upgraded production lines featuring state-of-the-art injection moulds, it has the capacity to produce 10,000 plastic seats per day at full tilt. With expertise acquired in the terrain of motorcycles, and with his mind set on “keeping the nation moving,” Chukwuma ventured into the automotive industry. IVM, also the first indigenous motor manufacturing industry in Nigeria, produces cars and commercial vehicles, making use of substantial local content – 70 per cent, for now. Built in conjunction with a consortium of Chinese automakers, it now produces intra- and inter-city buses with various seating capacities, Sports Utility Vehicles (SUVs), trucks, pick-up vans, refuse collectors/ compactors and tricycles. Officially commissioning the factory on 15 October, 2010, President Goodluck Jonathan commended Chukwuma’s resilient spirit, crediting it to the fact that though Anambra was one of the smallest states in the country by land mass, its people have “high brain density.” Nonetheless, there is a commendable motive. “When we ventured into the production of motorcycles we were able to make brand-new motorcycles affordable to needful Nigerians who hitherto patronised the tokunbo (used) ones. Nothing can stop us from replicating it in the automotive industry.” With a projected roll-out programme of 5,200 vehicles per month IVM started at 300 a month but manages about 600 a month as yet. However, Chukwuma believes that they are on course to meet the 1,200 vehicles a month target they have set for year’s end. Part of the conviction for this, according to him, comes from the fact that – unlike with motorcycles – they never assembled vehicles. They started with manufacturing outright. “We shall stop at nothing till we achieve total local content,” he submitted. “Assuming Ajaokuta (Steel Company) was working, the story would have been drastically different. To further achieve this is one of the reasons why with some Nigerian partners we moved into the manufacture of tyres at GTT. With all the tyre companies in the country moribund and Nigeria boasting of very good rubber, we have decided to take the bull by the horns. It’s our hope to play a leading role in the tyre supply chain for both motorcycles and vehicles in no distant time.” He concluded the latter rather too self-assuredly. Reminded that cynics could still see it all amounting to buying and selling in the long run, he took a deep breath and threw in a clincher: “I don’t know about others but I would rather buy raw materials and sell my own finished products at the most competitive of prices than buy another man’s finished products to sell to my people at exorbitant prices.” “Apart from the price difference that it will visit on the goods like I have said, what of the jobs manufacturing will make available for our people? Instead of the youth parading the streets jobless, they are given means of livelihood. In turn, this makes the country safer as it is joblessness that will push them to crime and nefarious acts that’ll make them constitute a burden to the society.” A commendation of the wisdom in his analysis brought a twinkle of a smile flashing across his face. He let the compliments sink in well enough before amplifying that it all goes back to his roots. According to him, the eponymous progenitor that begat the four villages that constitute his hometown was wisdom writ large. He capped the lead BOI IMPACT | 
  • 10. ensuing lesson in their ancestral history with a popular Igbo proverb -“the foolishness of an Nnewi man amounted to wisdom in neighbouring towns.” Invariably an overstatement as the late Chinua Achebe would have said, some truism appears to lurk in it judged by the decision taken by his second-bite-shy townsfolk to domesticate their businesses in Nnewi after the experience of the Nigerian Civil War (1967-70). Very strong in the automotive parts trade, Nnewi, no sooner after, became the hub of the trade in the country; attracting customers from as far away as the west and east coasts of Africa – a happenstance that undoubtedly played a major part in the emergence of Innoson Group when and where it did.  Born on 10August, 1961 to a junior civil servant Mr Godwin Chukwuma Mojekwu of Uru-Umudim Village and his wife Martina, Innocent Chukwuma surmounted a stack of odds to become this entrepreneurial statement of our time. An indubitable child of destiny, the story of how he was left for dead after being run over by a hit-and-run driver at the tender age of six years is now a reporter’s delight. “I strayed back onto the road for my toy watch that had slipped from my hand as I crossed the road in the grip of an elder brother,” he recounted. “As God would have it, just before burial obsequies could commence after the close- to-three-hour interlude it took to hunt the erring driver down, I woke.” Relationship with Bank of Industry It started when he ventured into manufacturing. Admittedly, as a “buyer and seller” he had been stuck with the commercial banks like most people else. “The first loan I ever took way back then,” he recounts with nostalgia, “was N5,000 from the old United Bank for Africa (UBA) repayable in one year. I paid it back on schedule - with the accruing interest - and they doubled it for the next year... They have been doubling and doubling it so for me year after ever since.” According to Chukwuma, he was attracted to BOI because the terms and conditions of the commercial banks would be difficult to meet for an industrialist who needed better understanding from his creditors to raise his head in the slippery waters of manufacturing. “The Bank of Industry is tailor-made for manufacturers,” he enthused. “You see, every manufacturer needs enough time and space to operate so as to be able to ‘BOI is tailor-made for manufacturers.With- out them, I wonder how I would’ve managed.’ - Innocent Chukwuma lead  | BOI IMPACT
  • 11. pay back any loan. The money has to go a full cycle that takes more time than when one is just trading with it.” Like he opined in a YouTube testimonial posted on BOI’s website, the bank assists him primarily in the buying of equipment. “Without them,” he posits now, “I wonder how we would have been managing. The first loan they made available to us was for N600m with a four-year tenor. We finished repaying it in two years and took another for N300m. This one took us two and a half years to repay. The third one for N600m was also repaid in record time and we are now paying back the fourth tranche worth N1.4 billion. God willing, we shall also meet with that and keep ploughing on.” Any wonder that in 2011 he won the bank’s Best Customer Award for Loan Repayment and Contribution to Nigeria’s Economic Development. Though admittedly he had to sell virtually all the property he had acquired across the country as a trader to meet their initial start-up requirements, Chukwuma upon hindsight still thinks the effort was more than worth it. Given his experience with the bank, his advice to would-be industrialists is to look the bank’s way and no other for financing as nowhere else would suffice if they wanted to get a loan that will enable them sleep with their two eyes closed. By him, accessing loans from BOI is also not as difficult as people are made to think. The onus, he says, is on the would- be industrialist to write transparently feasible and concise project proposals; that are clear and to the point and not unnecessarily outsized and unmanageable at first sight. “The thing is to take it step by step,” he elucidated. “Like in my own case, I buy equipment one after the other. I don’t want to buy another one when I have not finished paying for the outstanding one.” He is however quick to point out that the most important aspect for a rapid industrialisation of the country is the prevalence of favourable government policies. Such that made a BOI possible in the first place. A member of the committee overseeing the Federal Government’s National Industrial Revolution Plan (NIRP) launched in February 2014, he sees it as well as the rest of the Transformation Agenda of the Federal Government as capable of leading Nigeria to the Promised Land in record time. “We (the committee) have started work in earnest,” he stated. “The effect will start being felt much sooner than later. I strongly believe that with the input of people like my humble self from the private sector, the country would have come a long way in industrial development within the projected period. A case in point is the power aspect. Most of the money we would otherwise have used for R&D (Research and Development) is invested in power supply instead. But with the privatisation of the power sector this will in no time become a thing of the past.” A member of the Nigerian Automotive Manufacturers Association (NAMA), he sees this playing out in the automotive sector also. “Take the Nigerian Automotive Industry Development Policy (NAIDP) for instance,” he continued, happy to return to home turf. “With its coming into force things are beginning to happen. Car plants are opening again and the drive for local content is enhanced. Rather than import a finished foreign car at a high duty of 70 per cent, you make original equipment or import from other Original Equipment Manufacturers (OEMs) at zero duty. Once you import only very few components as CKDs at the very reduced import duties of between 5 and 10 per cents, not only will the price of cars come down but people will also have jobs like I have explained and we can raise our heads high in the committee of nations.” Reminded that this could also imply throwing the floodgates open to all manner of competitors for them at Innoson, he demurred; dismissing it with a mere wave of hand. “My brother,” he implored, “it is no longer about profit. One lead ‘I don’t see myself as a rich man.I’m not in this for the money per se.’ BOI IMPACT | 
  • 12. is not here for money any longer. Now it is mostly about leaving your footsteps on the sand of time. When I would have made vehicles in Nigeria affordable to the common man, there would be nothing else to ask for.” He compared the situation to what used to obtain before they veered into the local manufacture of motorcycles. Brought in crates, only 40 motorcycles filled a container. Sensing that more would fit into a container dismantled, INL ended up importing a total of 200 motorcycles in one container. With the reduction achieved from freight charges alone, the price of brand new motorcycles reduced by as much as 40 per cent. “The only problem then,” he expatiated, “was in winning the confidence of would-be customers who thought the motorcycles were substandard or inferior because they knew we assembled them with just the little experience we gained as traders. For this the first container took a whopping three months to sell. But by the time the second shipment of 10 containers arrived, it was sold in less than a month. The third consignment of 20 containers was sold out before it berthed at the ports. That is Nigerians for you. Once you win their confidence, the sky is the limit.” So confident is he that this is in the offing at IVM that he dismisses the shrugs of the remaining folk who still doubt the durability and otherwise of their vehicles. “There are standards set for the manufacture of vehicles throughout the world,” he clarified. “What we do not manufacture here like engines and gearboxes we buy from where others buy theirs. The same way, we source the other components from where they source theirs. Also, we end up using the same equipment they use to assemble theirs to assemble ours and so on till a car is made. Now you be the judge. Or is there a law that vehicles cannot be made here?” With hindsight acquired from his staggering experience on the field he sees straightforwardness as the only way out for any businessman: “If you are innovative enough, backed by truth and if you don’t venture into areas not too clear to you, you’ll make it. I’ll personally never do a business because it has the promise of a very high percentage profit. I have never.” Still Chukwuma sees the future as even more daunting: “We started in Nigeria and are slowly spreading to the West coast. Expression of interest in our sweat has come from as far as Ghana and Cameroun. We’ll stop at nothing until we take over the entire African continent with our brands.” Indeed, a trade delegation from Ghana had visited IVM shortly before it was commissioned by President Jonathan. It was led by Deputy Transport Minister Hon (Mrs) Dzifa Attivor. In a speech at the occasion she expressed happiness that with what she saw at Innoson Group the wishes of their late first leader President Kwame Nkrumah of Africans harnessing local resources which amounted to 50 per cent of the world’s total was coming true. On behalf of their government, she pledged that they would patronise the project. Asked whether his continued expansion doesn’t translate to more and more money accruing to an already made man, Chukwuma answers in the negative: “I don’t see myself as a rich man,” he said, his face creased in a smirk that accentuated the scar and suture marks left on them by that accident at six. “Not when I do owe the banks so much. I told you that I’m not in this for the money per se. I’m just another busy man and my belief is that once someone is as busy as he should be, he will never pass for poor. It is only a lazy man who does not work that can be said to be poor. My situation is as a result of my work rate and it is the Lord’s doing.” But life is not always about work for Chukwuma who has in his kitty many garlands including the Officer of the Federal Republic (OFR) awarded him in 2011 and the Nigeria Centenary Honour Award, in 2014; both by President Jonathan. When he is not relaxing at home with the wonderful family he is raising with his beautiful wife, he could be caught outdoors playing tennis with other big boys at the club. lead ‘When I would have made vehicles in Nigeria affordable to the common man, there would be nothing else to ask for.’- Chukwuma  | BOI IMPACT
  • 13. lead Nnewi: Nigeria’s manufacturing town A ny first time visitor to Nnewi town will be astounded by the sheer population of motorcyclists of both genders on the roads. In fact, you would not have entered the town long from the Oba bypass on the Onitsha- Owerri expressway to associate it with motorcycles of all makes and colours. As you approach the Nnamdi Azikiwe University Teaching Hospital junction, they would swarm around you with their riders perched on them as if they were created on them – some of the females had their infants strapped on their backs with wrappers! Then you head in their brood towards the roundabout at the centre of the town adorned with the statue of the late former President of Nigeria’s First Republic Senate, Akwaeke Nwafor Orizu, a prominent indigene. When en route after beholding rows upon endless rows of them lined up for sale at the Nkwo Market, it wouldn’t turn your head as on later enquiry you realise that the biped is the prime instrument of the town’s crowning glory. Welcome to Nnewi , dubbed since the late 20th Century, the Japan of Africa –when by dint of their toil the indigenes transformed it from an automotive parts trading haven to its industrial manufacturing mecca. Any search engine deployed to probe the town on the Internet won’t mince words in telling you that where you stood has well over 30 small and medium-scale industries within its bowels. Yes, owned by private individuals. One of the leading urban towns in the present-day Anambra State of Nigeria’s South East – the third, in fact, after Awka, the capital, and Onitsha – it boasts an ancient habitation that dates back from the early 15th Century. Back then a mostly agrarian community would gather in the Nkwo Market square to trade their surpluses for their needs. Initially done by barter, various forms of currency including copper and cowries were to come into play as civilisation wore on. Things were to come to a head at the turn of the 19th Century when the Europeans joined the fray. Even before their arrival proper in the town towards the end of the century, the introduction of their items of commerce saw the town assume its own shape. From the early 20th century customers to the burgeoning market from the town and its environs now had various foreign items being traded as well. In no time, the town became the place to go for many brands of automotive spare parts. How this came to pass is now all lost in the nebulous lines of unwritten history. One school of thought, though, believes it could be explained by the emergence from the town of foremost Igbo transporters – from late Sir Louis Odumegwu Ojukwu’s Ojukwu Transport Company (OTC) in the late 50s down to late Chief Augustine Illodibe of Ekene Dili Chukwu Limited (EDC) of more recent memory. These and a whole lot of other similar concerns and their emerging fleet easily provided a ready clientele for spare parts back then when Nnewi was yet a hot trading post on the busy Onitsha-Owerri highway. The circumvention of Nnewi by that busy road rather than diminish the town’s hold on the trade ended up boosting it somehow. When following the aftermaths of the Civil War those of them in the trade without their town’s borders decided to stay put and operate from home base, Nnewi virtually took over the trade in its entirety. Customers now came not just from within the country but the entire West and East coasts of Africa. It did not take time for these entrepreneurs to grow to the level of setting up manufacturing concerns in numbers to produce those parts that they had hitherto sourced abroad. While automotive spare parts accounted for the majority of the industries that were initially set up, it is with motorcycle spare parts variety that they began to make more positive history. From trading in them, industries manufacturing them started springing up as well. So much so that in no time people from all towns else journeyed to buy not just spare parts but also whole motorcycles from Nnewi. So commanding did Nnewi become in the motorcycle trade that it was its traders who crashed the price of brand new motorcycles when the country had been bound to their used varieties imported from all around the world. It did not take long for the first indigenous motorcycle assembly as well as manufacturing company to be set up on the land. It is also on record that the first wholly Made-in-Nigeria motorcycle was manufactured in Nnewi by the National Agency for Science and Engineering Infrastructure (NASENI). Following on the heels of this an industry that manufactures motor vehicles with as much as 70 per cent local content has also come on board. The way things are shaping, the Japan of Africa may yet become the Germany of the Southern Hemisphere. BOI IMPACT | 
  • 14. A customer steps into Michael Ogunfidodo’s fabric store, a space tucked away at the end of an alley that winds through rows and rows of similarly- sized fabric shops. “Madam, how’s Canada?” he asks, warmly. One of those Nigerians who frequently travel abroad carrying with them local merchandise – everything from food to Nollywood home videos to fabric – which are in high demand by Nigerians in the Diaspora - she complains about how business in Canada is nowhere near as good as in the United States; because there are many more Africans and Nigerians in the US than in Canada. While they settle accounts she asks for a “stone-black” fabric she had seen the last time she visited. “Bring me that tablet,” Ogunfidodo tells his assistant. He goes through the pictures saved onto the device, in search of the design. No luck. He asks for his smartphone. No luck. He’s nonplussed, and asks the customer to send it to his phone “on Whatsapp or Facebook”, to rejig his memory. Welcome to the Kenta Adire and Kampala Market in Itoku, Abeokuta, one of a handful of cities in western Nigeria famous for the production of “tie-and-dye” fabric, known in the Yoruba language as adire – literally meaning “to tie and dip (in dye).” Ogunfidodo is not your typical adire merchant. For one, he’s male – the business is dominated by women - and, secondly, it’s genealogical - passed down from one generation to another, typically along matrilineal lines. He inherited the business from his mother, who, he says, “is old now.” In one 2013 ADIREMARKET: TRADE SECRETS(JUST A FEW)  | BOI IMPACT special report
  • 15. study of 80 randomly-selected “adire entrepreneurs” in Abeokuta, researcher Zakaree Saheed found that only one in four was male. Ogunfidodo is also youngish, in his “late 30s”, he allows – and has a University degree in economics, from the University of Science and Applied Mathematics (USAM) in the Republic of Benin. He had the option of looking for a salaried job; his interest lay in Information Technology. And then fate intervened. After graduation he spent some time helping his mother out at her store, in the same market. When he left, she was inundated with queries about the whereabouts of her son. “People liked the way I related with them.” It was enough to nudge him to abandon his other dreams and return, for good. He brought his University education to bear on the job. “They’ve been doing this business in an old way; there’s lots of ways we can repackage it.” He rebranded his mother’s ‘Jesutofunmi Enterprises’ into ‘Ibile Apparel Limited’ and started labelling his fabric with branded stickers. He also says he introduced the plastic film packaging in which fabrics are now sold – people had to overcome their reluctance to spend more buying the firm rolls of film, instead of the flimsier ‘bread loaf’ bags they were used to. And while many people continue to use wood fuel to generate the heat for boiling the water used in adire-making (to dissolve the dyes, and to de-wax), he now uses the cleaner and more efficient liquefied petroleum gas. Before the emergence of social media, adire makers depended on word of mouth or user recommendation. Today Facebook, Whatsapp and Blackberry Messaging are important marketing channels. “I have a page on Facebook, to which I upload most of our designs,” Ogunfidodo says. He also has a database which he uses for SMS blasts. Like many of the other adire dealers, he makes everything he sells. In that sense their vocation goes beyond merchandising – they design, produce, and brand as well. On the day we visited the market, Ogunfidodo had spent the entire morning at home producing new stock to meet a customer order, from Benin City due for pick-up the following day. If your notion of tie-and-dye is about dye-pits at which elderly women sit all-day long and work then you are behind the times. Ogunfidodo reveals that everyone now uses large plastic basins. He works out of his home. Capital-intensive The adire business is capital- intensive, Ogunfidodo illustrates by pointing to a modest-looking stash of fabric: three piles sitting side-by- side, collectively worth half a million naira. It’s easy to underestimate just how much value is locked up on those shelves; a full store could easily be worth millions of naira. An investment that might be substantial in some other business would produce only a modest impact in an adire store. According to the 2013 study quoted earlier, less than a quarter of the entrepreneurs surveyed had invested more than N100,000 in their businesses. Against this backdrop, it is clear that the majority of the entrepreneurs are able to operate only very small businesses, because of funding gaps. Like many other small Nigerian businesses, the adire makers depend mainly on personal savings. They organise themselves into “Co- operative Societies” (“Co-operatives” consisting of between 10 and 15 persons per unit. Members contribute regularly (usually monthly), and then BOI IMPACT |  special report
  • 16. take turns to receive a payout worth twice the contribution. The difference between contribution and payout then has to be repaid. Co-operatives are a popular means of informal capital-raising in Nigeria, providing interest-free funds and repayment schedules less stringent and punitive than those offered by banks. The alternative would be bank debt. But many business-persons see them as unreasonable, on account of the high interest rates associated with commercial bank loans in Nigeria. Not even microfinance banks are able to offer anything markedly different. Enter the Bank of Industry, with its loan scheme targeted at the adire dealers. “Only BOI has given us loans at single- digit interest rates,” says Ogunfidodo. The BOI loan comes at 7%. The merchants apply for the loan as cooperatives, not as individuals. Ogunfidodo’s cooperative, of which he’s secretary, got N8m. The money was paid into the cooperative’s bank account, and then shared by the members, according to need. Repayments are done monthly; members pay into the bank account, which BOI debits by cheque. (The cooperative pre-issued 30 monthly post-dated cheques to BOI, to cover the payments). “The essence is to empower women and youth, to create wealth, and reduce the level of unemployment and crime,” says Monday Ejigbo, Manager, Lagos Zone, at BOI. BOI operates a “matching fund” loan scheme with interested state governments, in which it matches the amount of money the state offers to allocate. Currently there are about 18 states across the country that have launched BOI matching fund schemes. In December 2011, Ogun State signed a five-year contract with the bank to create a one billion naira fund –each party contributing N500 million. The partnership allows the various state governments to subsidise BOI’s standard interest rate of 10 per cent. The Ogun State Government’s subsidy ensures that cooperatives in the state can take loans at 7 per cent. Loans from the fund go to a total of 128 cooperatives in the state, says Mr. Ejigbo. Forty-one of those are groups of adire merchants; the rest are of dealers in other goods such as dried food products, fish and poultry. The adire co-operatives have received a total of N230 million in loans since the scheme started. The matching funds programme started in 2008. At that time the loans were solely to buy equipment, not as working capital; and full repayment was expected in 15 months. The bank learnt from that early experiment and modified it by doubling the tenor, and also loosening the application restrictions so that it could be deployed as operating capital. “The rate of default reduced when we increased the tenor,” says Mr. Eji-gbo. The repayment rate in Ogun State, according to the bank, is in excess of 90 per cent. He adds that the loan scheme has helped create in excess of 2,500 jobs along the adire value chain, from manufacturing to sales and distribution. “If people are given the opportunity, if you believe in them, they can turn things around,” Ejigbo says. “And that’s what BOI has done. So far the bank has no regrets.” Family matters Another adire-maker, Oluwakemi Somuyiwa, says her cooperative – with 15 members – also got N8m. BOI gives them 30 months to repay – another difference between a BOI loan and a commercial or microfinance bank loan, for which repayment tenor averages 12 months. Today, Somuyiwa is in one of her two stores, along a row of stores facing the busy street, above which a flyover has just been completed by the state government. (The construction led to the demolition of dozens of shops; Somuyiwa lost the four she owned and the two she now owns are fairly recent acquisitions.) She’s babysitting for her daughter. The four-month old is restive, and crying. Her store is six feet by six feet; the floor covered in rug; ceiling a stretch of cardboard from which a single energy- saving bulb dangles. The walls are stacked ceiling-high with fabric. On the concrete floor which serves as a porch sits a table also piled with fabric. She’s Otun Iyaloja, second-in- command in the market’s administrative hierarchy. Soon, a small group of women pays a visit. From their conversation, it seems they are fellow traders reporting a colleague’s misdeeds to her. “I was born into this industry,” she begins to tell her story. “This business is inherited. See my daughter, she was born into it. They go to school, get jobs, and come back (here). I’ve got children with Master’s degrees, they may not sit here with me, but they all know about the business.” Somuyiwa’s son, Ekundayo, says this embroidery process – usually ‘Only BOI has given us loans at single-digit interest rates,’says Ogunfidodo. special report  | BOI IMPACT
  • 17. commissioned by clients for special celebrations - can produce fabric that sells for as much as N25,000 for five yards of material; four to 10 times the average prices Sometimes, however, people come into the trade outside of the family lines – by an apprenticeship system common across many artisanal vocations in Nigeria. The apprentices have to spend a minimum of six years with a “master”. The first year is spent “serving” – no tutoring, strictly errands and menial tasks. The next five years are spent actively learning the trade, which, in the adire industry covers production and marketing. Apprentices typically pay for the learning they receive. Upon “freedom” – the term applied to completion of learning – the student gets a certificate, and can launch his or her own business. In his study, Zakaree Saheed also found that a little over half (45 respondents) got into the business by inheritance, while the rest came in through apprenticeships and other forms of formal and informal vocational training. Changing times Making adire involves “resist-dyeing” of fabric – a technique known as “batik” and designed to ensure that the applied dye only selectively penetrates – to produce striking uni- or multi-colour patterns. Various methods are used to achieve the selective “resistance” to the dye; ranging from the use of cassava starch or melted paraffin wax (applied using stencils), to seeds and stones (tied to the fabric using string), to stitching (by hand or machine, using local thread, iko). The most complicated – and by extension, expensive – methods involve painstaking “tracing” and embroidery techniques applied after dyeing has been completed. From the start the craftspeople have a design in mind for the material, which the series of processes – starching, waxing, tying, threading – is supposed to help realise. “There are some designs you can’t know if you weren’t born into this trade,” says Somuyiwa. “Every now and then I dig up old designs from my childhood, and re-introduce them.” Ogunfidodo on his own part says he sometimes creates completely new designs for his material. The adire industry in Abeokuta dates from the early 19th century, but reached its apogee in the 1920s. The earliest adire makers used indigo dye and salt; the indigo dye creating a trademark blue- and-white output (one well-regarded book-length study of the early decades of rise of adire-making, by American academic Judith Byfield, is titled: “The Bluest Hands” – evoking an image of the dye-stained of the artisans). But technological breakthroughs in the early 20th century quickly rendered the traditional raw materials and methods obsolete. “New ingredients – caustic soda and synthetic indigo – transformed the technology of indigo- dyeing, making it an easier and more stable process,” writes Colleen Kriger in her 2006 book, Cloth in West African History. “By the 1930s, adire production relied heavily on materials that were all imported: factory-made cloth as well as the caustic soda and synthetic indigo for the dye vat.” (The import-dependence of the industry, dating back to the first half of the 20th century, continues to pose a challenge. Most raw materials – from the ‘guinea brocade’ fabric to the dyes and paraffin wax – are not locally manufactured). Starting in the 1960s, Kriger adds, synthetic dyes began to be available in many colours. (The original indigo dye, derived from the leaves of a local plant, is still sometimes used.) According to Somuyiwa, the finished products that are today sold as ‘Kampala’ – as opposed to adire – are the product of new designs and production techniques introduced as the artisans developed greater confidence in expressing contemporary design sensibilities. But they were careful to ensure that the innovation did not tamper with the production values that set the art apart – the painstaking work that goes into selecting fabric and dye and design, and the handcrafted essence. Now, however, there is a strong threat from abroad – China. Somuyiwa says Nigerians buy the original local samples, and take them to China where unscrupulous manufacturers replicate them using cheap fabric and assembly- line mechanisation. But the differences in quality are obvious. “If you sweat while wearing (the Chinese products), that’s the end,” says Somuyiwa. “The colour will powder you.” She and Ogunfidodo both insist they ‘There are some designs you can’t know if you weren’t born into this trade,’says Somuyiwa. continued on page 34 special report BOI IMPACT | 
  • 18. WHERE THE JOBS ARE Minister for Trade, Industry and Investment, Dr Olusegun Aganga in this interview gives us some insights into how he’s making the difference in Nigeria’s industrial development. BOI IMPACT: Unemployment is really serious here. How can it be tackled. AGANGA: Unemployment is not just a Nigerian issue, it is a global one. When the (Jonathan Administration) came on board, despite that our average growth hasn’t been about 7% over the last 10 or 12 years, we emphasised that the quality of growth was far more important today than ever before. That is why our emphasis today is on inclusive economic growth, which means that we are focusing more on job creation. Our focus on agriculture is part of where you have a large number of employment. We are also focusing on the housing sector where jobs can be created. Our focus on the MSME is why we launched the National Enterprise Development Programme. When you look at our Industrial Revolution Plan, one of the criteria for identifying the sectors is that they are labour-intensive. So, when I talk about sugar cane to sugar, a lot of jobs are created in that sector. Cement supports about 1.6 million people today. So, overall our strategy is about job creation and we are making very good progress; although some would say that we could move faster. But what gives me hope, what makes me think that this is a problem that can be resolved very quickly, is that, given the nature of my job, being responsible for industrial development, investment, trade and enterprise, I face the business community, I face the Nigerian people. And everywhere I have gone, I have seen jobs. We complain and say we have high level of unemployment and yet, when you look at the housing project, you see (the artisans) are not from this country. If there are no jobs, why are these jobs being done by non-Nigerians? So, there are jobs but we need to fix the skills’ deficiencies. If you look at the internship programme in Germany (or) the Senai structure in Brazil, the first thing that they all have in place is a national skills gap survey which tells you the skills gap in each of the sectors. With that the schools can produce people that are relevant to the economy. Secondly, it allows those who are responsible, like Industrial Training Fund for vocational training to now make sure that they train people for the economy as well. So, for the first time ever, ITF is now working with UNIDO under my supervision to create the first national skills gap survey in the country. When that survey is available, it will be used by different ministries to plug the gap. But we want a situation also where, it is not only the public sector, it is an investment opportunity also for the private sector to go into it. Their bankable proposals in other countries have proven to be one of the many profitable areas you can go into. If you look at Senal, in Brazil, they train at least 1.5 million, if not 2 million people a year. And about 90 per cent of them are in full employment within three to four months; because, they have used that skills gap survey effectively in their country. ITF and the Simeth institute are working together to create additional skills in the six geopolitical zones to, at least, address issues in the housing sector as quickly as possible. What is government going to do about addressing the issue of high interest rates? I think the issue is about affordable finance. There are reasons why they have been as high and part of it has to do with the environment, the risks in the environment and all that. But (BOI has a different template). Indeed, there are people who swear by BOI, any day. If you ask one of our celebrated pioneer industrialists in the East, Innocent Chukwuma, for the secret to his success, he will tell you it is the patronage of his state governor, Governor Peter Obi, but more importantly, the support he got from BOI. (See: The Innosons Testament, p14). He tried the commercial banks, he failed woefully and owed a lot of money until he came to BOI and the difference was clear. And, BOI is now looking more at the small and growing businesses or the micro businesses. Through such schemes as cooperatives lending, bottom of the pyramid and working with micro finance institutions. But as a country, we need to look beyond that. We need a finance reform programme. Some businesses require short term lending while some others require long term money. So, there is a team working on the financing value chain now so that the Industrial Revolution plan can work. Standard Organisations of Nigeria is another area. Selling to Nigerians or you want to export, it is important that you meet the international standards. You know that the president has made it very clear, that we must consume what we produce and we must What gives me hope (is that) everywhere I have gone, I have seen jobs, we simply need to fix the skill deficiencies. - Olusegun Aganga  | BOI IMPACT
  • 20. produce what we consume and government is there to make sure that they buy those products. How far has the National Enterprise Development Programme (NEDEP), launced on 11 February progressed? NEDEP is one of the many programmes we have, not only to grow the small and growing businesses and the SMEs and the micro businesses, but it is also the opportunity to create jobs. It is a unique and special sector in any country. When you have a sector that is about 17.25 million in terms of the entities there, and the sector is employing 32 million people, accounting for 70 per cent of our workforce, it is a very important sector. It is the only sector that, regardless of whether the economy is doing well or not, it continues to employ people. Because, if things are not going well in the big companies, they make you redundant, you sit down at home for a week or two, you try to apply but after a while, you set up a business. So, it is a place that people come to all the time. But unfortunately until now, no government has taken it as a sector on its own. Yes, we had SMEDAN but you know, when we had SMEDAN, it was only in 13 states of the federation. Today, under NEDEP, SMEDAN is now in the 36 states of the federation. Secondly, we treated and made policy for everything from the centre. The SMEs, micros are in the states and local governments so, the idea is to set up state councils, state MSME councils where the issues are discussed and addressed. We have done that in many states now and then, to have a national MSME council that will be chaired by the vice president, have the necessary ministries and agencies that will be relevant, the private sector in the same place, addressing the issues affecting that sector. The good news is that we have had significant interest from the private sector. A lot of them have come into many of the programmes because, part of what we are doing is to address the problems they have. The commercial banks are also joining up. Stanbic IBTC, First Bank have each dedicated a certain amount for NEDEP. So, if we have good entrepreneurs, business plans, it is not just to BOI, we are sending them to FirstBank, to Stanbic IBTC and other banks. Fidelity and Diamond Bank are very interested. We even have some companies that have money dedicated to SMEs that are willing to make their funds available for any entrepreneurial programme. In terms of market access, we have been very encouraged by the response from the private sector where the private sector agrees that the SMEs that come under them become part of their supply chain and in some cases, not just the supply chain, they can be end users of their products. If you look at Lafarge, for example, they do cement. They are now working with block makers and they want to set up block makers all around the country, fully trained so that they can deal with the issues of collapsed buildings etc and, we will work with them, they will be funded, they will be trained and they will set up their own businesses and run their own businesses at that level. I am actually going to markets very soon to deal with traders, they are micros. I need to make sure that we address their concerns. So, we have been going around, doing different things but we are very encouraged by what the private sector is doing and the support we have received from them today and, of course, the last thing is to have the virtual market place where SMEs who want to sell their products advertise their products and those who want to buy their products, go there to buy as well. So, there are a number of initiatives which we are working on but you will see more action also once a council is in place because, anyone can bring a memo through SMEDAN on ‘what do we need to do to improve the environment’? Our job is to create the enabling environment for them and we are very determined to address that. We have reduced the cost of starting a business. If you go to CAC for example, the cost of registering a business, we have reduced it by about 50 per cent from last 1 October. Any new plans to make small businesses tap into the opportunities AGOA avails? Unlike other countries that have done well (Ethiopia, Kenya, Lesotho), we didn’t have a strategic plan for AGOA but now we do. Most people are not aware that AGOA is a pact between Africa and the United States where you can export about 6000 wines to America, duty free, quota free. We had focused too much, on to some extent on exporting, just in our normal way, exporting raw materials, agric produce and all that. But it is a lot easier when you are actually exporting processed or completely processed food items or manufactured products and that is what other countries have done better. So, instead of just sending pepper, if it is dried pepper, well ground, it does better. And then, if you look at the items that have higher duties for example, and you export those items to America, your goods are far more competitive because of the duty rates in the United States. If you look at Kenya for example, they have a garments sector there, where they are producing all the garments for McDonalds in the United States and in that factory in Kenya, they are exporting everything under AGOA, they are employing about 3000 people there. America is reviewing the AGOA now. We hope that it will be reviewed and approved in the same manner, we are willing to work with them to make it a better product but now, we should be in a better position to take advantage of AGOA. q&a NEDEP is not only to grow the small and growing businesses and the SMEs and the micro businesses, but also to create jobs  | BOI IMPACT
  • 21. q&a WHAT WE NEED TO DO TO GET TO WHERE WE WANT TOHe leads one of Nigeria’s highly diversified and successful groups, BUA, and has been the chairman of a publicly quoted company – the Cement Company of Northern Nigeria Plc - for many years. He was re-appointed for a second term by President Goodluck Jonathan as the Chairman of the Board of the Bank of Industry. Quite a busy person, he found time to talk with a team led by Editor Hadiza Olaosebikan to answer questions on diverse issues including whether he would have time for the Bank. You should find this interview a delight. BOI IMPACT: How do you feel on your coming back as the chairman of the bank? ALHAJI ABDULSAMAD RABIU: I am really honoured. The fact that somebody is being appointed as the chairman of this great institution, I believe, is an important thing. And that, I also believe, is an indication that one was appreciated by Mr. President and I think we should do whatever it takes to ensure that we do not fail Mr. President. It is an important thing for me - the fact that I have been called upon to come and serve as the Chairman of Bank of Industry. So, it is a great honour and privilege to come back to serve at the Bank of Industry for the second time. What impact do you think your returning to BOI would have on the bank? The fact that one is abreast of the workings, the issues, the challenges of the Bank and its internal structures, I think, will definitely be a positive thing in the sense that we, as a board, will not waste a lot of time to learn the system, because a lot of us are coming back to the board. So I think it is a good thing because we are familiar with the terrain. Similarly, the fact that I have been the chairman of a publicly quoted company for many, many years puts me in a unique position to work with the board and management of the Bank; to use it as a vehicle to try and further promote and sustain Mr President’s Transformation Agenda to make sure that the economy of this country is moved forward. So, I think there are quite a few advantages to the fact that we have been appointed to the Board. Considering your vast business operations and tight schedule, will you have time to discharge your obligations to the Bank? It is true. It is not easy, I know. Definitely, it will have some impact on my time management, but I see this as a national assignment, and I believe that every Nigerian should be proud to serve their country when called upon. So, to me, I see this as a national service and I am honoured. I will make time and do whatever it takes to ensure that I give as much time to the Bank. Like I said, every Nigerian must feel proud to be called upon, so for me, there is a sense of fulfilment in these kinds of things. I am really proud, and I will make the time. Let’s look at Vision 2020, whereby Nigeria is supposed to be industrialising. How are you going to help the President in achieving these objectives through the Bank of Industry? First of all, the issue of job creation is very crucial, so we will ensure that the bank partners with Mr. President’s job creation agenda, without a doubt. I’m sure you are aware, just last week, he inaugurated the Job Creation Board (JCB) to be chaired by the Vice President, and the Vice Chairman is Tony Elumelu. I also happen to be a member of that job creation board with other such prominent Nigerians as Atedo Peterside, Aliko Dangote, Bisi Onasanya. And the mandate of that board is to create three million jobs in the next 12 months. So, the bank is going to work with JCB to help it meet that target. We will also work together with other agencies of government to see that this agenda is achieved. During the inauguration of the BOI Board, you said that high ethical standards and professionalism will be upheld at the bank, especially during your tenure as chairman of BOI. Can you expatiate on this? I believe that in an institution like the Bank of Industry, one must make sure that the highest ethical standard is maintained, and we would do whatever it takes to ensure that we adhere strictly to the corporate governance principles, and I will give you an example. I am in business, and we do a lot of business with so many banks. Just before I was re-appointed as the chairman of the Bank, my company applied for a facility for one BOI IMPACT | 
  • 23. q&a of our projects here in Lagos, and it was being processed. And the moment it was announced that I was re-appointed the chairman, I called my people and told them, “Look, I have now been appointed the chairman of this bank, and I do not believe that we should have any facility whatsoever with the Bank of Industry. I would want a situation where none of the members of the board in fact has that kind of relationship.” So I directed my people to withdraw the application immediately. There were some protests, and I let them know that I believe there would be conflict of interest. I do not want a situation where I will be chairing a meeting where my company submitted an application and I would have to take a decision on that. So I told them immediately to withdraw the application. So, that is one of the things that I think we need to be doing. And as far as I am the chairman of this bank, I will not have any facility with the Bank, even though I believe I am entitled to get a facility from the Bank, given the fees, the rates, which are much cheaper than commercial banks; you are talking about 4-10%, which is not the case with commercial banks, which range from 14-18%. They made a case that the application is for our cement project under the Cement Fund, but I still said ``No,’’ that we would not go ahead with the application. SMEs are known as the engine of growth and they have their challenges. What should they expect? How are you going to ensure that their challenges are addressed? One thing that I am going to say first of all is that most of the companies/individuals usually expect more financial advisory services from the Bank because BOI is really good when it comes to that type of thing. Secondly, efficiently run credit administration from the Bank and also access to the Bank’s market intelligence report that will aid and guide businesses to making sound business decisions. Also, the way things are now, we ensure that there is efficiency in the reduction of downtime in terms of loan application, review and disbursement to some of the bankable projects. You know there are lots of projects, some of them are good, some are not. But a lot of them are good. But then, we will not be able to address all the bankable projects because we get a lot of applications. But we will ensure that we do whatever it would take, within reason, to ensure that we address some of the bankable projects. But again, I must emphasise that BOI is one of the best-run banks in the country. So, while there are a lot of issues to address, there are also a lot of advantages that these SMEs and businesses can come to expect from the Bank of Industry. Power remains one of the factors affecting manufacturers. As someone who wears the shoes and knows where they pinch, what is the way out? In fact, power is one of the biggest challenges in our country. With a population of 170 million people, with 4,000 to 5,000 MW capacity, it is not acceptable. That is the honest truth. Again, I must commend the government for doing what they are doing right now in terms of the privatisation of the power sector. I think the government is on the right path, doing quite well, but we still have issues. For example, 4,000MW is not enough for a state. But what government is doing now is good. But one thing I must add is that the government must invest heavily in the gas infrastructure because I think that is the next big thing. And I will give you an example: there is no country in the world that is developed without steel development. But for you to be in that kind of sector, you would need a lot of power and gas, and those are two key ingredients that must be in place before you can really develop. So gas is an area where, since we already have it, I think we just need government to invest very heavily. If you want to do steel, for you to be able to put up a steel plant, you must have gas and iron ore. We have iron ore in Nigeria and we have the gas. For example, if you’re setting up a steel plant of about 1 million tonnes, you would need about 200-250MW of power, you would need between 150,000 to 200,000 cubic metres of gas per hour to be able to have your fully integrated steel plant, which is from quarry, mining to domestication, palletising, right down to the downstream of the steel production. So for you to achieve this, you must have power and you must have gas. We have gas, it is just for us to have the infrastructure to benefit from it. Today, if you are looking to have 200,000 cubic metres of gas per hour, that is over 6 million standard cubic feet per hour and for you to have that, I think it is going to be really challenging. So I think government should invest heavily in gas infrastructure before we would be able to get to the promised land and I am happy to note that the government is working quite hard with this hybrid project, AKK, that is the Ajaokuta- Kaduna-Kano pipeline project, which is going to cost quite a lot of money, but I think if that is done, it will reduce a lot of the pressure on the power infrastructure in the country. Yes, Just before I was re- appointed as the BOI chairman my company applied for a facility from the bank.I directed my people to withdraw the application immediately. BOI IMPACT | 
  • 24. it is true that we have challenges, but I think government will definitely do a lot more. If you look at all the state governments, especially Lagos, we have quite a bit of gas here in Lagos, most of the industries/factories here, you find them having their own captive power plants, which is not good. We have a cement plant in Edo, which we are commissioning either by the end of this year or early next year. It is costing us almost $100 million just for power, because we are putting up a power plant and we are building a pipeline to enable us to get the gas ourselves to our site which is about 32km of pipeline…so the challenges and the issues involved in putting up that pipeline, I must tell you, it is crazy!. We have all sorts of issues. But we have to do it, because if you don’t do it, there is no way we will have the power. So these are some of the issues, which is why the government must do something because without it, there is no way we can develop. But I am happy to say that government is giving it the desired attention and maybe very soon, that is will be taken care off. Should this be driven by government or the public sector? Well, it depends on how you look at it. Infrastructure is quite an expensive aspect of this kind of thing (because of funding), and I agree because it is possible for the private sector to be involved, but then again, the government needs to look at issues, because the pricing of the gas is an issue. A lot of people do not want to invest because they believe that if they do and with the price being regulated by the government, they feel that they may not be able to make any money out of it, so they are dithering. But I think the government is doing something about it. But now, I think more people are in gas infrastructure. We just have to do it. Otherwise, it would be chaotic for us in the real sector. Considering your wealthy background, how are you going to help more Nigerians to become entrepreneurs, self- employed, job providers instead of job seekers? I am sure a lot of Nigerians just look at you and they think you started wealthy. How will you assist such people, even though they may not come to you, but by reading what you are going to say now, how are you going to help them? First of all, let me say that it is not easy and again, this is not a task that BOI can solely handle. But then again, what we can do is try and support most of these aspiring companies/ individuals by assisting them, by advising them, by ensuring that we give them facilities to support them in a bid to ensure that we support local content, and boost local patronage of Nigerian q&a I think more people are investing in infrastructure. We just have to do it. Otherwise, it would be chaotic for us in the real sector.  | BOI IMPACT
  • 25. companies, because you know, one of the problems that we have is that sometimes you see a lot of disparity between local and foreign goods in terms of pricing. For example, if you look at the issue of cassava, the government through the Minister of Agriculture is trying to get companies, especially flour mills, to use cassava flour as a strategy to boost the purchase of our cassava. But if you look at the pricing, you see the price of the cassava flour which is locally produced is almost double the price of wheat which is imported. So there are issues there, which we must look to address so that we can encourage most of the producers and promoters here. So I think we need to do more so that we can patronise Nigerian companies and encourage them. It is quite a bit of work, but I think we are getting there. You know, quite a bit of the agencies in government are really trying hard to achieve this. So it is not just BOI, but I think agencies of government in Nigeria need to sit down together to see that we address some of these issues. If you have to advise a young person who wants to become an entrepreneur, what would you advise that person? Work very hard. It is not easy right now, because you see, access to funding is the issue. Even if you have a good, brilliant idea all set up, for you to get access to funding in Nigeria today is very difficult, especially if you are a start-up. So to me, I believe that one must really work very hard. And then the good thing is that we have banks like BOI and other banks that are thinking like us are there to help, but it is not easy. Despite this, one must have to work very hard. But I believe that if you have a good idea or talent in Nigeria, you should be able to make it. How is doing business in Nigeria? Nigeria is probably one of the best countries in terms of doing business – and even though this is my personal opinion, I am sure that there are a number of people who will agree with me. Nigeria is one of the best countries to do business in terms of return on investment. And most of these companies, look at MTN, for example. At the time MTN came to Nigeria 10, 11 or 12 years ago, companies like Vodafone and others were not even interested to come to Nigeria. But a few years after, they were ready to pay more than double what they would have gotten the licences for, and today, Nigeria is probably MTN’s biggest revenue market. They are making a billion and a half, two billion dollars from Nigeria. Nigeria, because of the sheer number of people, we have 170-180 million people, we have a growing middle class, and purchasing power is increasing, so any foreign investor that knows about Nigeria will want to be in Nigeria. So for me, I don’t even need to tell you, those who know they know. For example, look at cement. We have 170-180 million q&a Even though this is my personal opinion, I am sure that there are a number of people who will agree:Nigeria is one of the best countries to do business in terms of return on investment. BOI IMPACT | 
  • 26. q&a people. In Nigeria today, there are three main companies that are into cement production: Dangote Group, Lafarge and BUA Group. Out of these three companies, Dangote is by far still the largest in terms of production, but it still is not enough because of the capacity that we have in Nigeria today. We have, maybe – and I am talking in terms of production capacity, not installed capacity – 23 to 25 million tonnes in total. Compared to our population, where we need about 150 kg per head, we have probably the lowest rate of consumption anywhere in the world. This is the reason why cement is selling at N1,400 to N1,500 per bag ex-factory. And I can tell you today, the cost of production of cement in Nigeria is about N700 per bag, because the biggest problem you have today in Nigeria in terms of production is power. That is why you can go and import cement for $50 a tonne from Europe or from China or anywhere else; $50 a tonne is N400 per bag, because one tonne is 20 bags, and $50 times 160 is about N8,000, and the companies doing this are making money. And if you are able to buy cement at N400 per bag in Europe, with all their high cost of production, high labour cost, etc, imagine how much it would cost in Nigeria. Fine, we have problems with power, infrastructure and what have you, which is why the cost is as high as N700. I am saying this because I want to see a situation where, more investors will come - and I have been saying to my business colleagues - when cement prices will come down to N1,000 or below and we will still be making money. But we need more and more investors. The only issues we have is appropriate funding. To set up a standard plant, which is about three million tonnes per annum, you need a minimum of $500 million. That is part of the issue. But if you are able to access $500 million to set up a plant, in two years, you will get your money back. And this is going to continue for the next 10 years. Don’t mind what people are saying. If you look at the demand and you look at the population that we have in Nigeria, you will see that the minimum in terms of consumption should be about 300 kg per head. Three hundred times 170 million, we will be looking at about 50 million tonnes or thereabouts. So, we need to double our production capacity. We have 25 million tonnes, may be by the end of the year we add five million tons, so we still need 20 million tonnes. This will probably take us three to four years, by which time the demand will be a lot more than Look at cement. We have 170 million people. In Nigeria today, there are three main companies that are into cement production, but it still is not enough...  | BOI IMPACT
  • 27. q&a that because demand is increasing. There are so many areas. This is just one area. If you go to agriculture, it is the same thing. If you go to steel, it is the same thing. If you go to other industries, there are so many of them, and foreigners know. We don’t have to tell them. The only good thing about in Nigeria is that Nigeria is one of the few countries in Africa that we have our indigenous people in control of our economy. If you go to any of these other countries, you will see that they have the Lebanese, Indians and others in control. In Nigeria, yes we have foreigners and we want them to come and invest, but we Nigerians are also part of it and I tell you, the opportunities are amazing. Challenges? The challenges are also there, there is no doubt about that. The security issues are there but you know, high risk, high reward. It is just that we have a lot of people. If you look at the resources that we have...for instance, Kogi State, the entire state is sitting on iron ore and limestone, billions of tonnes. Look at iron ore for instance, I mentioned steel earlier, do you know that the two key ingredients you require to set up a steel plant, iron ore and gas, we have them in Kogi State, or at least one of them, iron ore, we have in Kogi State and the gas can come from other states. As a country, we have those two major ingredients. Not many countries in the whole world have those two ingredients. The largest steel producer in the whole world, which is China (they produce half of the world’s production [output]), worth over a billion tonnes or thereabouts, they import all their iron ore. In Nigeria, we have the iron ore and the gas, so if we are a bit more serious about harnessing these resources, we will get there. But I appreciate that some of these projects are quite capital intensive. To put up a steel plant with the production capacity of one million tonnes will cost you about $1.5 billion, but then again, these are things that we must do in order to get to where we need to get to. But if you are able to get the raw materials, you should be able to get the funding. As I said, Nigeria imports today, on the average, about $3-$5 billion of steel every year, because of the oil industry. So if you are able to set up a steel plant in Nigeria, even if you spend $1.5 billion, you should be able to cut down on your foreign usage by about 50% every year. So in no time, we could even stop importing steel. And I am talking about specialised steel, such as pipings, you know the oil industry uses that type of steel, but we can do them, because the quality of the steel (because for you to get that required type of steel), it must be from a fully integrated plant. You cannot be using steel that you made from scrap and most of the steel plants in Nigeria are mainly for long products and they use mainly scrap to make the steel. There are some that are importing billets but what you need is a fully integrated plant that can take the process from iron ore to the finished products. These are some of the things that we need. So the opportunities are there, but access to funding is key. That is why it is important for government to assist by ensuring that there are enough intervention funds for most of these major projects because they are key and there are so many others that we can also talk about. Back to your question, I believe that foreigners know that Nigeria is a good investment destination. That is why they are here all the time. And that is not just with the oil industry. Anything to them; they know. Let’s now know more about you.... Abdulsamad is just an ordinary Nigerian businessman, working hard, striving to put up industries and factories as his contribution to the economic development of this country. And I believe in Nigeria, and again, this is a place that I know that opportunities are so many. If you can have the idea and access to funds, there are so many things that you can do. So I am just here, trying my best to see that I put up industries and set up companies to be able to get people to work. What is your life mantra? First of all, to be honest, I am a shy and quiet person. I shun a lot of publicity. I believe that all of us should work really hard to help our people, our country, and do whatever we can to make sure that our country or people succeed. How about your views about life, your mentors, favourite books? Parents? Maybe the likes of our founding fathers, the late Sardauna of Sokoto, Obafemi Awolowo, Herbert Macaulay, Nnamdi Azikiwe…I appreciate those people a lot because they lived and died for this country. And I must add that my father is somebody I still appreciate a lot. Thankfully, both my parents are alive at my age. There are not many people of my age who still have both parents alive. So I want to appreciate my dad, he has really tried for us and he is one of my greatest motivation. Abdulsamad (Rabiu) is just an ordinary Nigerian businessman, working hard, striving to put up industries and factories as his contribution to the economic development of this country. BOI IMPACT | 
  • 29. GIVING BACK. CREATING JOBS. BAKING BIGGER CAKESA consummate banker, Mr. Rasheed Olaoluwa was until 19 May 2014, when President Goodluck Jonathan appointed him Managing Director/Chief Executive Officer of Bank of Industry (BOI), the Group Chief Executive Officer of UBA Capital Plc. In fact, he led the expansion of UBA from a one-country institution to 19 countries over a three and a half-year period. His appointment was hailed by financial and economic experts as an example of a “round peg in a round hole.” (See profile at “MEET THE BOARD”). BOI Impact’s Editor Hadiza Olaosebikan and her team, engaged him for a Q & A on his plans for BOI. Sit back, relax and enjoy the interview. BOI IMPACT:L Let’s start by asking you what your appointment as the managing director of the Bank of Industry meant to you when it was announced. MD/CEO: Thank you very much. It means a lot. After having spent over 26 years in banking, I believe that it’s time to give back to Nigeria – in which I have thrived over the years. I see the platform of the Bank of Industry as a veritable one to really add value to the society. And the way I am going to do that is to bring the totality of all the experience I have gathered over the years to bear on running of BOI with a view to helping to create millions of jobs for Nigerian youths. Creating millions of jobs sounds like a vision that you have. How do you plan to achieve that? Well, in a number of ways. For instance, one of the areas I am really going to focus on under this administration is agricultural processing because I believe very sincerely that’s an area where Nigeria has very tremendous advantage. We have many crops that we harvest at different times of the year. Essentially, what we need is to organise ourselves for processing these commodities into different products. Right now we pay a lot of money importing food that we could actually process locally in Nigeria. A lot of the raw materials used in our industry can also be obtained locally; we only need to add value to the agricultural products. Then, I think some of the basic ingredients are beginning to fall in place, for instance, the Federal Ministry of Agriculture and Rural Development has identified a number of veritable locations for people to cluster for agricultural processing. These are the kinds of initiatives we will like to follow on. I believe that through this we can actually create hundreds of thousands of jobs in every state. And luckily for Nigeria, every state has got three, four, five products that they can focus on. So even at BOI, what we can do is, let’s even identify the top three products for every state and there is so much that we can do. Most banks shy away from agric funding or anything that has to do with agriculture. And that’s the area you say you want to focus on. Do you see any threat to this? I understand where the banks are coming from. Agric processing, call it a large farm, there is a style to doing it. I think that what we have leant in the last four years or so since the appointment of the current minister of agriculture is that the style to doing agric is professional and I believe that if you follow the value chain, if you follow the value-added process, there are ways to which you can add value to agric products. It can be successful; it can increase the chance of success, and that’s what we are trying to do. Let’s take a single crop and look at the value chain. For instance, let’s say cassava. I know that people have spoken a lot about cassava bread. We can process raw cassava into cassava flour, which can then go into the flour milling process. In addition to just cassava flour, even if we take gari that we eat, right now it is produced by these women who are in rural locations, who use large frying pans to produce at very micro scale. There are complex plants that we have identified at BOI that you can procure at five million naira. So you can do it on a bigger scale. So we can actually produce a lot of products from cassava, so there is cassava flour for bread; there is gari, which is a staple in Nigeria; there is syrup, which is a raw material that we can use in industry. So we can identify a lot of farm products and derivative products that can be made by just small-scale industries in rural locations. q&a BOI IMPACT | 
  • 30. Cassava Bread development is one of the areas where the president will be expecting monumental results. How far have we gone on this? Yes, we’ve gone very far. The Federal Ministry of Agriculture put together a N3 .4 billion fund for the Cassava Bread initially. There is a N1.1 billion for grant and the balance of N2.3 billion loan. We’ve actually more or less approved most of the loans to many beneficiaries. But what we are doing is to complete the documentation so we can complete the disbursement of the loan. I think in another month or two, we would have fully disbursed on that particular initiative and I believe it is an initiative that is commendable in the sense that all the money we’ve been spending in terms of foreign exchange to import wheat, it will help reduce such expenditure in foreign exchange. You come across as being very passionate about ensuring that BOI’s impact is felt in all sectors of the economy, especially in the agricultural sector (that’s what you are talking about now). What drives this passion? Passion is energy. You know, when you focus on something that gives you excitement, something you are excited about, it’s almost second nature to me. I have always been a very passionate, professional banker right from day one. If you believe in what you are doing, if it’s worth doing, and you have a strong passionate view about the picture, it’s just … During the inauguration of the Board by the Honourable Minister of Trade and Investment, he challenged the Board to consider new funding models, particularly in the areas of access to finance. What are your thoughts on this? Yes, we are doing so in many ways. First, in terms of the approach to lending to SMEs, we have looked at what we have internally, the current process and (we have seen that) there is an obvious need for improvement, in terms of making the process more seamless, making the process more efficient, cutting down a lot of the red tape. I believe in the next few weeks or maximum a couple of months, our stakeholders, or customers will begin to see the impact of what we are doing to improve that process. Also in terms of engagement, one of the things we found out is that the bulk of applications we receive MSME’s do not usually meet our standards. So we spend quite a bit of time, going back and forth, trying to ask questions here and there, trying to fill the gaps, and so on and so forth. This is why we decided to shortlist a number of people in all the states of the federation, who will serve as what we call Business Support Service Firms. These are people who are engaged with the MSMEs in the various Local Government Areas in the state, people who are closer to the (prospective customers); who will help them package the proposals so that by the time they get to BOI, they have what we call a bankable proposal. We believe that will hasten the process. That will also increase the chance of success for the MSMEs. But will it not increase the costs they incur? Since these people are coming in as consultants , will that not affect their income? That’s an issue that has come up in our discussions of late. And the way we are looking at it is two-fold. First, in terms of the overall cost to the SMEs, we will take certain steps to ensure that overall cost does not increase. But beyond that, the advantage to the SMEs is that by using those firms you are increasing your chances of success. Rather than come directly to us and having the risk of having your proposal declined, or having to go through a lengthy process of six months and more, you can have to go through this one to package a proposal that can have a good chance of success. Currently, BOI has seven Zonal Offices including Lagos, and you have always spoken about deepening the bank’s credit delivery process and increasing access to its loans, but feedback from customers indicate that seven offices are insufficient. Would locations be a stumbling block? And wouldn’t increasing zonal offices impact on overheads? Well, as you are aware, Bank of Industry is a national development institution. And when you say ``National’’ in Nigeria today, you mean the 36 states of the federation. So it’s quite obvious that having six or seven zonal offices is below the mark. One of the corporate strategies we want to have is to have offices in state capitals. Eventually we are going to be in every state capital, but I think we are going to start with those states where we already have partnerships. We have signed MOUs with a number of state governments and will like to start with those and by the time we are done with the ones we have now, a lot more states would have signed MOUs with us and then eventually we will be in all the state capitals. That’s the only way to stay in touch with our customers in all the states of the country. What happens if some governors refuse to sign the MOU? That will be very unfortunate. We believe that the state q&a (Banking is) almost sec- ond nature to me.I have always been a very pas- sionate, professional banker right from day one  | BOI IMPACT