The recession is biting harder. Several industries are closing shop, leading to an increase in the number of the unemployed. Manufacturers Association of Nigeria (MAN) Vice President, Princess Stella Okoli, takes a look at the development and submits that steps need to be taken to help the remaining operators in the real sector who are managing to survive. In this interview with MUYIWA LUCAS, Princess Okoli, also Chairman, Emzor Pharmaceutical Group, says the sector’s future is bright.
The Central Bank of Nigeria (CBN) forex policy pegged the naira at N282 to a dollar. This presupposes a ‘devaluation’ of the naira. How has this affected the manufacturing sector?
We were told that the naira must be floated and pegged. But there are quite a lot of things that I believe the CBN and Federal Government needed to sort out before this because there is no clarity to us yet as manufacturers. If you say that the dollar is pegged at N282, does it mean that if manufacturers submit their bids, that they are going to get forex at N282? When the floating started, we were all asked to submit our bids and there were all sorts of guidelines as to what rate it will be because that was the first time, and those that bidded about N280 got all their foreign exchange, while those that bidded less than N280 got forward rate of two months.
So, your money will be taken from you, and you now wait for the bid to have value, that is, they will confirm it after it is 30 days, whereas the money has already been taken off you. We (manufacturers) had a window known as “import finance facility.” It is a short-term loan that enables us to buy or import goods; the import circle is not more than three months, and it keeps revolving. We understand that the CBN has disallowed the use of such funds. There is need for articulated policy on how manufacturers should be encouraged; it has to be coordinated, and it needs a lot more effort and coordination. The government, including all the parastatals and regulatory agencies, should be thinking at the same time on how to move the country and manufacturing industry forward; this is so vital at this time.
Some experts say we are experiencing forex scarcity because the “future market” is a new concept here. Do you agree?
Everybody looks forward to a silver lining. However, you have to understand the future market takes six months before maturity. So, you wonder what happens to businesses during this waiting period. How do we get our raw materials; how do we pay the suppliers? Don’t forget that there are lots of foreign exchange pile-up for collection that have not been honoured; this is not right for business. There is need to involve a lot of expert around the world that can actually develop our country. We cannot argue that we do not need a lot of dollars in Nigeria and we can attract those dollars by using the expert that knows how to attract the dollars because we cannot afford to be starved of foreign exchange.
How has the real sector been surviving?
Industry is very difficult in third world countries because industries are not sometimes understood; it is the job of the government to make sure that the industries survive. There are so many ways to help manufacturers, including through government patronage and paying them. Right now, in the last three years, several industries have become cash strapped. For instance, three years ago when the government had no single anti-retroviral drug, they appealed to us to help produce these drugs for HIV/AIDS. We imported the materials and met the deadline; but till today, they have not paid us for the drugs. The government owes pharmaceutical industry billions of naira in the last three years. So, it is affecting us greatly as manufacturers. Some people have close shop; we need the government to help manufacturers; the government and regulatory bodies should work together; there should be no boundaries; we should work together for our common good.The regulatory body should make sure that the industry is competitive to compete abroad and make sure that export is smooth.
From what you have said so far, manufacturers are facing alot of challenges. What efforts have you made to reach out to the government on these?
We have gone to the various levels of government. If I take MAN pharmaceutical manufacturers group for example, we have gone to the Minister of Health, Minister of Industry and also the legislators. The energy that was put in was much but because we are patriotic Nigerians, if we take a bad step, what will be the future of pharmaceutical manufacturing and those that are studying pharmacy, or drug manufacturing in Nigeria? We should be talking of research, now is the time we need to move and get going.
More than N300 billion is said to have been lost to the distress in the economy by local manufacturers. How did this happen?
I have not seen the statistics that led to this figure, but I want to say that the N300 billion is an understatement. When you really look at it, you find out that more have been lost because we bought forex last year between N170 and N200; but now, technically, we are buying it for an average of N350, because it is no more a future market. So, you buy something at between N170 and N200, and now going to repay at a higher value because the money is not coming and you may even go to a private market. So, we have lost much and people have scaled down. But generally, some people have closed shop. So, we lost through forex, interest rate and manpower. Even though it causes us so much to produce, we can’t pass it on because customers would complain.
What is the future of the manufacturing sector?
The future is bright because there is a government that is not going to neglect the manufacturing industry. The government has made it clear that they are going to support manufacturing and we believe them. It’s just that maybe they need more time, but I am sure that our situation cannot get worse than where we are now. So, the future is very bright because without manufacturing, we are dead. We have to feed our people and fix our country, and I am very confident this will happen. Olusegun Obasanjo took over power in 1999 and the manufacturing sector contributed three percent to the gross domestic product (GDP) then. At the time he left in 2007, he had moved it to between 10 and 20 percent. The same thing happened when Muhammadu Buhari took over power in 2015, and I am sure Buhari is going to surpass that. The only thing is that there must be continuity, no matter what; if somebody has done something that works, then let’s build on it.
What is the most important strategy for businesses to survive?
The strategy is obviously cost cutting, streamlining the product lines and engaging with the government at all levels to ensure that companies and manufacturers are sustained. I also plead that everybody should come on board because coordination of the ministries and parastatals must be together, and to understand that the stakes are very high and work together.
You have mentioned patriotism about four times in this interview. How far can it last and at what point would you say I can’t go further in the face of all these challenges?
God will not make that day to happen, and being a strong Christian, I believe in God absolutely. I told you that Nigeria is God’s own country and it is loved by God otherwise there won’t be any Nigerian today. So, patriotism is what has kept us going and it is something that we should learn in Nigeria now. Patriotism is what we have been doing by God’s grace throughout my life, and that is why God has kept me. This is something that is very important, love your country please.
In this challenging economy, how have you been able to steer the ship of your firm? What succession plans have you put in place to ensure that Emzor Pharmaceuticals succeed after your exit?
We are weathering the storm of manufacturing because there is no place for us to go; this is our last bus stop, so we are very passionate about what we do, and what we teach people is passion. We like people to sing on their way to work and immediately you come, you will learn that there is dignity in labour; this is one of our daily practices. Performance management has become so very important and we are also talking to the banks, writing letters to see what they have. I learnt from my father that hard work does not kill, the only thing that kills is laziness. Succession planning is very difficult because all these young people are very wonderful. That is why it is very important that when you are running a company, everybody must be in line and also you should endeavour to teach people everything you are doing and run the company in a transparent manner. If we are talking about handing over to a family member, that is why we make sure that in a company people should believe in what you are doing. Trust people that are working for you and know what to do, whether you are there or not. I believe that’s how we are managing our own.
On global health funds, what has changed in the last 365 days?
Global health fund is a fund that Nigeria is participating in, which unfortunately, Nigerian manufacturers have not benefited from. It goes to India because of the World Health Organisation (WHO) qualification of products. It is something that even those that were told are pre-qualified get promises; so, I think they still need to qualify the product and it is more or less a very long road to attainment. This is another thing the government can do to help the sector. Actually, in India it is not WHO Geneva that qualifies drugs; they are using their own WHO, which is like our NAFDAC. But here, there is confusion about WHO Geneva from NAFDAC, and even those that are in charge sometimes get confused. But through the advocacy group which I belong to, we try to correct it. If you are not strong anything can happen; that is why I love the gift of patriotism the Lord gave me because who you are, where you are and who your friends are matters. Our money has been tied down for doing good; for over three years, they have not paid us the billions of naira they owe us.
Is Emzor into drug research? When will your firm be quoted on the Stock Exchange?
We are not researching now but aspiring to do so. However, the government has to have a research fund and fund it very well because that is where the future lies. For now, we do product development but not into core research; it will be good to have Phd holders in the factories. Quoting on the Stock Exchange is a step every company must take but the time must be right. If the company is not doing well and you are in Stock Exchange, somebody will just come and say this car you are driving was bought with our money, so I want it please.
Credit: The Nation