AND THEN CAME RECESSION - Nigerian Business Day
This is a Consumption growth chart, is for from economic
growth chart.
In a country where land borders are closed cement sector is
growing?
With less than 10 individuals actively involved in the
sector?
Quarry/ Mineral that, its proceeds and activities are not
accessible (with illegal mines) to the common man talk less of SMEs the real
economic drivers. I would really like to see the extractive companies doing
this magic and the market thrillers.
This report is a clear indication of a looming economic
crisis.
If this 5sectors are the ones seeing to this growth, then
the economy is a shadow of itself and goes a long way to suggest that
government policies has not favoured Realtime economic drivers. Especially the
FX market.
It's a clear reflection on poor economic research and
Development, Steaming from poor policy on disaster management.
if in just 8months the success recorded in the; Argo-allied
processing, light manufacturing, and Agriculture has been eroded by covid-19
pandemic.
It means the government priority is wrongly placed.
I didn't expect anything better; no country grows more than its
research and Development Capabilities.
It's a pity, that while postal services, port operations of
better managed climes are seeing positive exponential growth, that of Nig. Is
nose-diving.
Who is the head of Nigeria economic management team, that
fellow need to step back.
Written By
Chinedu Eze
Ben Iyke
ReplyDeleteBoss if you go back and check my first post after the report you will see where I said a way out is to approach the real sector through services EXCEPT one is ready to work as hard as A DANGOTE.
Let's face it. You and I know that Dangote Group is mostly responsible for the growth in No's 1 and by extension 3. That is our reality. He operates at a higher level of efficiency. Sadly it's mostly in the extractive industry.
Growth also comes with efficiency. You can't compare the level of operations in Dangote with that of all SMEs put together in Nigeria. Most SME's struggle in Nigeria and that's mostly because of their processes. Even when you want to help optimize their processes with technology, they can't trust you. I don't know how we got here though but it's a hard sell.
You'll see a small business in the fashion space with just the owner and an assistant (maybe family member). They source the fabrics, sew the fabrics, market the fabrics, deliver it nation wide and they also manage their books. Imagine doing all these things effectively without a technological system to manage the entire process. Now imagine the level of inefficiency when over 1million SMEs operate like this?
Now compare it with how the likes of Dangote are using Indians and their technologies to run his operations. Or how the likes of MTN and Glo manage their operations. If you want the to see SNE's grow to top 10 it's possible but they too must be ready to collaborate. I personally don't think it is something that government will come and do for us. We must learn to understand scales economies and leverage.
Even when we bleed cash and offer free services in some of our projects to SME's, they discredit it. "We are all waiting for the government to act and revive the economy"😀
Collins Opara
Deleteince the govt began to get involved in NBS reports and amend it , I have been taking strong look at the reports they publish.
And this is evident here.
They want us to see growth in sub sectors than to look at overall sensible insights around main sectors.
We should have main sectors. Then they drill down to the contributions of the subs. Then we know what to take serious.
Let me try to make it clear without being too academic. An industry is a collection of firms clustered around similar activities locations. An industry is not a factory or a workshop.
That said...
If as a people and country we struggle to understand these, then how do we align resources for the growth of any sector or any industry?
We won't!
We will rather scatter our energies around our thoughts. And the sector players won't see any gain in the published supports.
E.g is the Food industry same as the Agro Industry? Does the Agro Industry have subs? And where does the Food and the Agro overlap?
Also, how can the Quarry sub sector not be under the construction industry? Do we Quarry for minerals or we Mine (Extract) for Minerals? In short, we Quarry for stones and rocks for the construction industry and we Mine our minerals for various sectors after beneficiation. Therefore, it's curious to see us arguing for a classification
of Quarry/Mining. I don't see the link yet.
Let me add another angle to these. Is the mining industry not a sub of the Extractive Industry as Crude oil mining is?😃 So where did we demarcate the difference? And isn't that causing us problems now as Zamfara is extracting to sell while Niger delta is extracting to share.
So we see how such confusion is making us run on one spot in this country?
In closing for now,
I will rely on the GDP sector classification of 2014. It made more sense for govt intervention than what BusinessDay is struggling to tell us.
Chinedu Eze
DeleteIts very Good we face reality the way it is!
Motivational kick off is Good but all over the world, government incentives triggers economic growth more than spirited individual efforts.
You will not like to hear the monetary Bonuses given to businesses during this pandemic in EUROPE to ensure sustainability, do you want to hear?
You will not also want to hear the employee and unemployment funds in form of bonuses to keep businesses afloat.
Let's not joke with reality, is very very near to futility to plug in under this current business environment.
Let me ask, have you visited Manufacturing SMEs to understand why they are not coping fine with this climate? (Power, roll up VAT, banking cost, licenses)
Someone is proposing B2C services from which company do you source supply that is not imported. My supplier has just hiked prices and MOQ for one of my production variables, I have to decide either to change or plough in fund to maintain my brand. Note I can't transfer this short term change to the direct consumer, except I want to consume it myself. The big question ⁉️ is where comes the funding for the excess cost? My profit,
do you know why I am faced with this?
FX fluctuation impacting their import of polycarbonates.
Look there is nothing the private sector can do without thriving economic policies. Talent and Commercial products are diverse economic Variables.
Sure your talent can get you a product but to scale and commercialize it you will come with economic realities.
Tell me what I should be doing in Nigeria when Malta can guarantee me save capital investment with all factors of production readily available, with Dual taxation policy and zero restrictions to repatriation of profit.
This data can not be motivated by emotions, except you have good liquidity you can't play.
I am not just demoralizing anybody but to be honest with you the fierce policy will sofucate your moral.
If today was 2015 I doubt if I could float my business considering the current tide.