11 August 2010

Nigeria: Public Private Partnership Will Grow Our Economy - Rabiu


Abuja — Alhaji Ahmad Rabiu is the President of both Kano Chamber of Commerce, Industry, Mines and Agriculture and Northern Chamber of Commerce.In this interview with BETRAND NWANKWO, he advised Nigerian businessmen to pull their capital together to form merger companies to take part in the development of the economy, insisting that it is only Public Private Partnership that can grow Nigeria's economy. Excerpts

What are your achievements as KACCIMA President?

My major achievement is that I kept the flag flying. Kano State Chamber of Commerce, Industry, Mines and Agriculture (KACCIMA) is driven by members. There are increasing challenges to businessmen on a daily basis and everyday a challenge rears its ugly head based on global challenges. So, running the chamber is a key thing because quite a number of chambers in Nigeria today are not functioning. Today, in my own chamber, l have very eminent and high profit individuals as members of the council and as members of the chamber and we have continued to work together to move the chamber forward. We have been able to partner with the government both at the state level and federal level and we have been able to have all stakeholders come together. All trade groups have been reformed now and so, we have brought all the interest groups together to discuss their problems and suggest ways to move forward. We have been able to educate everybody on the importance of partnership.For the first time, I have been able to address a lot of questions that have hitherto existed; we have not been able to really partner with government.In Kano State, we are interacting with government to see how interested they are in trying to move the co-operative to the next level. We have very responsible persons in the Chamber. We have His Eminence, the Sultan of Sokoto as the grand patron. There are people of repute from the Northern region that are members of board of trustees. Our Business Development Committee is led by the former director general of Nigeria Economic Summit Group. Virtually every professional from the Northern region is a member of the council of Northern Chamber of Commerce. We have kept the flag flying high on the account of the fact that we have been able to bring every professional together. You are aware that in 2008, we had a Northern Economic Summit that brought everybody together including representatives from oversea.

What is your Chamber doing to return Kano as the hub of commercial activities?

Kano is still the hub of commercial activities in the country and perhaps in the Northern region because it still has quite a number of inflows of people coming to buy or sell their wares in Kano. So, we still occupy the position of being the hub in our region and in the West Africa, and in Africa as a whole.We have appreciated. A very recent World Bank pronouncement which said that the economy of Nigeria is in the fore front, is the reason to virtually all the economies. It is discovered that government expenditure or government activities in economic intervention accounts for 85 per cent of all the economic activities in the country. So, when you talk of public private sector partnership, you have government playing all the roles and that is not the desired position. The desired position is that in public private partnership, if the minister comes with something substantial, another person will come with something substantial, but somebody comes with something small, you don't call that partnership. Nigerians cannot pull their capital together and that is why we have more limited companies in Nigeria than they were in the most developed countries of the world. I own one limited company, you have a limited, another person has another limited company, and every family has a limited company. But the idea of economies into conglomeration of activities is that you must be able to pull resources together. Entrepreneurship or sole proprietorship is not nice. Businesses in Nigeria have remained the form of sole proprietorship, because one individual is the chairman/chief executive who decides what to do or what not to do.

So, pulling resources together, which is the only organ that has raised economies is what Nigerians have never bought into properly. We have not been able to learn the attitude of pulling our capital together and form a company with large number of shareholders and professionals in terms of management, competent people with skills and a board that is able to drive the organisation according to the terms given by the shareholders. So, when Nigerians buy into conglomerating and pulling their resources together, our economy will improve. What government must do is to make sure that it provides sufficient support for this thing to happen; like giving appropriate rebate where it should give them. There should be water access when electricity will be generated though hydro and so many other things that government can do to make that responsibility competitive. The private sector should do the road,railway, generate electricity and should be able to do everything if the government will provide the structure.

How will the government's intervention in manufacturing sector benefit the masses?

The masses will benefit when companies enjoy support and are able to produce and make their products available to people at affordable prices.The masses start to benefit when the cost of doing businesses is reduced because the business will increase and they will employ more people. The advantage is improvement; the masses are the real beneficiary. If a company is assisted and the business it booming, it will be strong to employ more people. The multiplier effect is colossal, you get job created and there will be availability of their product.

Can the intervention in the manufacturing sector work under the present situation of inadequate power supply?

Public private partnership cannot succeed where everybody is looking up to the government to do everything. Partnership as defined in the dictionary is that the people that have formed partnership have brought something material to the box. Even the public private partnership does not say that government should do everything. You all aware that there is power reform Act which has a provision that private individuals can now generate electricity, hitherto, it was expected of the National Electric Power Authority (NEPA), now Power Holding Company of Nigeria (PHCN) to generate electricity. It was also expected of PHCN to distribute electricity. Power reform Act also allows the private individual to do the distribution of power. So, this is an instrument by government that people can generate their own electricity today. Like the projects that are going on in Kano, such as the road construction, railway construction, and others projects.Government has actually concessioned them out like the port. Nigerian businessmen are lacking in capacity to invest. The lack of capacity is what has made the private sector organ to be weak. And that is why we keep talking government this, government that. In Kano, we have a Chinese company, an Asian company. They generate electricity and they don't need anybody for electricity. They are able to allocate money for power generation and they are generating so much power and because they have so much activity, they have the benefit or economics of scale advantage. Though they have spent so much money to do it, by virtue of the use they put it to, the cost has relatively come down, they can afford to be in production. I gave you an inctance. I limited, you limited everybody is limited.

You have small companies all over the country. This is what should be discouraged.A lot of businesses die when the family founder becomes weak. The day he wakes up and can't go to work, his son drives his beautiful car to the office and tell his workers that their boss is not feeling fine and was taken to somewhere for treatment and before that man gets well, the business is dead. That is why there is no business continuity in sole proprietorship except very few. Once the business owner dies, the business will die. But if we come together, the death of one person will not kill the business. Once we have those things in place, you will have public private partnership succeeding. But when you have the private sector in the way it is in Nigeria, very little capital, the public private partnership will not succeed. When Obasanjo wanted to create TransCorp, he looked around and found that all the organisations in Nigeria are small organisations. The only big organisation in Nigeria were the organisations owned by the foreigners that were privatised. People were meant to buy shares, but the few people who own large shares call the shots there.

The large number of minority shareholders have little impute on how the directors are appointed. That was why Obasanjo decided to form TransCorp but because it was not formed properly, that was why it did not succeed. We did say that TransCorp cannot succeed because that is not how to form merger organisation. It was not formed naturally by people coming together and agreeing to form a company. I am not saying that TransCorp is dead, but it has not succeeded to the level that Obasanjo expected it or envisaged it, when he was setting it up. It has not gone the level is should have gone. It supposed to be a merger company that could go to any country and bid for any oil bloc or bid for the supply of security equipment, or bid for any construction work in any part of the world or any big project that Julius Berger or any other big company is doing. That was why it bided for NITEL.

Did it go well with NITEL?

But if TransCorp had grown properly, there is no way it will not succeed. So, such a company has to grow naturally with proper setting. That is what happened in the case of TransCorp and because also that we have not had that kind of mind, everybody hold up his small capital and is thinking he is rich. If we come together and have N1.5 trillion company in asset, and it has several trillions in terms of turnover, by the time you have that kind of company, you could generate that kind of income that can justify whatever cost the additional employment it will generate. The business community is lacking in that capacity of pulling their resources together to form a merger company. But let me also indict government because it has not done sufficient marketing to let people understand the benefits of coming together to form a multinational company.It is two sides of a coin. On the one side, the business community has failed to tap into this because they have not been able to generate large capital, sufficient enough to key into it because they do not know the volume of benefits that are there. Largely, it is only public private partnership that can sore up Nigeria's economy.

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