BUSINESS

Let me tell you a story of a man-whose father died when he was four years old. His father’s death deprived him the benefit of formal education, but with only
N200 as investment capital way back in 1975, he built a conglomerate with impactful presence in many countries around the world.





His story may not be entirely strange or unique, but it clearly signposts the thorny path which many courageous men tread in their determination to make meaning out of life. This person I am talking about born to a struggling father that died suddenly has a mother that was a bean cake seller, this woman single-handedly raised him and three other siblings.

At first, his mother struggled to keep the family, him and his other brothers, providing the needed support, selling Akara. This they did for some time until it became more and more difficult for his mother to cope with the financial burden of raising the family.thus he had to drop out of school. He was sent to live with his grandparents when his mother couldnt cope with the four of them. The grandparents supported him till elementary three when they themselves could no longer cope.

At that stage, just a little above eight years old he joined his uncle who lived somewhere in Ebute-Metta, Lagos selling spare parts. While in Ebute-Metta as an apprentice with his uncle, he started out sleeping in the store. For six years under the tutelage of his spare parts dealer uncle, he worked without salary or any form of remuneration, though he was clothed and fed.

With N200 handed over to him by his boss for his stewardship,his seven year apprenticeship came to an end.

This youngman at that stage teamed up with his elder brother to start a business at Nnewi.

They later relocated to Lagos. By then, his elder brother had also completed his apprenticeship and they bought motor parts from Leventis motors in Lagos, which they sold at Nnewi.in 1977, he teamed up with a friend called Dave, with a start-up capital of N10,000 which they both contributed equally.

They worked so hard such that by 1978, they had about N300, 000 capital to trade with. Two years after, by 1980, the figure had shot up to over a million naira.

He invested time in being excellent at what he did. Customers discovered his excellence in the vocation and were drawn to buy from him. In 1982 came the turning point, He floated a company formed from the combination of his name and his wife’s, between late 1982 and early 1983, the Federal Government introduced the import license regime. At that time, very few companies had import licenses issued by the Federal Government, and whoever wanted to import anything into the country had to go through the import license holders. His, was the seventh company, among 10 motor companies, that were given import license by the Ministry of Trade. The returns were astounding and he made loads of cash.

Today, this Group has about ten subsidiaries and it is regarded as the numero uno in the Nigerian automobile market.You would be right to call him a billionaire.This man I just talked about, his Dr.Cosmas Maduka of the Coscharis Phenomenom,the coscharis group.That is our investor of the week.

If Cosmas Maduka can create the Coscharis phenomenom despite the inherent challenges of his background.you too can do it take action now.

BOI Tasks SMEs on Bankable Proposals

By Franklin Alli

The Bank of Industry (BOI) has enjoined operators of Small and Medium Enterprises (SMEs) in Nigeria to have well- packaged bankable proposals before seeking funding supports from development finance institutions.

This is in addition to equipping themselves with enough information about any funding agency they intend to approach for support so that they are fully armed and abreast with questions that may follow suit.

Ms. Evelyn Oputu, Managing Director of the bank, gave the advice during a programme organised by Enterprise Development Center (EDC) of the Pan Atlantic University (Lagos Business School) for business executives, entrepreneurs and start-ups. She observed that the inability of most SMEs to secure funding for their businesses lies in their inability to present proposals that are rich and convincing enough for banks to fund.

Oputu said entrepreneurs are not adequately equipped with the necessary information needed to secure loans, saying some who have approached the bank in the past are not even aware of the mandate and objectives of the bank. She assured that the bank will continue to support the SMEs sector, which she described as the engine room of growth of any economy because of the potentials of the real sector to generate massive employment.

In his presentation, General Manager, BOI, Mr. Mohammed Abdul-Ganiyu, informed the gathering of entrepreneurs that the bank which has managed series of intervention funds aimed at repositioning the industrial sector, has so far saved about 8,070 jobs in the textile sector.

According to him, this has led to the turnaround of 38 textile firms from imminent collapse. He advised that entrepreneurs who are into similar line of production could form themselves into a kind of cooperative group to access funding from the bank, saying it is easier for them to have cheap access to infrastructure through the industrial cluster initiative.

Abdul-Ganiyu said as a way of increasing funding to the SME sector, the bank in 2006 through its paradigm shift initiative, dedicated 85 percent of its resources to the funding of the SME sector.

Source: Vanguard

Interest rate is killing businesses in Nigeria – Yusuf

By Dotun Ibiwoye

In this interview, Muda Yusuf, Director General of Lagos Chambers of Commerce and Industry, LCCI, speaks on salient issues affecting the industrial sector of the economy. He also noted that foreign investors  are having a better advantage here in the country. Excerpts:

The LCCI has been an ardent critic of the ‘tight monetary policy’ stance of the Central Bank of Nigeria (CBN), why?

You have a situation where it is very difficult to assess credits first because of the tight monetary policy that is in place and second, because of the high risk management condition. So all this and other factors has made it very difficult for business operators and entrepreneurs to get credits for their business.

Like I said, first the interest rate is very high. It is about 25 percent and by the time you sum up all the charges and the main interest rate, you will discover that it will come close to 30 percent and for somebody who is into agriculture, it is going to be almost impossible for him to survive with such rate of interest.

So the source of fund is a big issue basically arising from the tight monetary policy and of course the channel of fund is also very short because you cannot get long term loan in this economy. The longest you can have is maybe six months or one year. And for the real sector, investments or production investments you need long term loans. Let’s say five years, ten years and preferably at single digit, that is the way we can get domestic entrepreneurs to be actually productive.

If you are not having long term loan at an affordable rate, you cannot operate in the real sector, and we need the real sector to transform our economy because what we are seeing currently is that our economy is short of production.  Not with goods mainly, trading or what we call rent-seeking to act as a broker, make your money through the bank or fly to China bring in some consumer goods, pay the custom and get it into the market, make your money and go away.

But the economic indices indicate that there is a tremendous growth?
All these activities are not adding much value to the economy and even to the life of the people, that is why despite all the good economic fundamentals that are mentioned, we still have a very high rate of unemployment. We still have a very high rate of poverty because we have an economy that need goods in the face of it.

In terms of GDP ranking,our economy is ranked the 36th in the world; this is not a bad ranking because the economy is worth over $270 billion. We are the second largest economy in the African continent. We are next to only South-Africa which is about $400 billion.

So it is a very big economy but the citizens are not in the main stream of the economy because they don’t have what it takes to be there. So you have a big market only in the face but you cannot take advantage of it because you are not having the resources. The resources in the country flows from the government, either the state or at the federal level and also to the hand of the people who are not having much knowledge about investment and that is a major issue for the economic effect.

So the economy is viable and attractive to foreign investors?
The structure of investment is now such that foreign investors are taking better advantage of the market than home based investors. So we have a situation where Nigerians have been turned to spectators in their economy because people come from all over the world and they come with very cheap funds and many of the foreign countries are encouraging their citizens to go invest and sell their products in other countries.

As part of incentives, they even get grants to embark on such investment. So as a local investor, even if you try to raise some fund from the banks, you cannot compete with those who have access to offshore funds, so that puts the domestic investors at a great disadvantage.

We are not so much present for instance in oil and gas, and that is because that is highly capital intensive.

Source: Vanguard

Cassava’s Huge Potential As 21st Century Crop

The Food  and Agriculture  Organisation, FAO, has disclosed that  global cassava output has increased by 60 percent since 2000 and  can sustainably increase cassava yields by up to 400 percent.
Save and Grow , an environmentally-friendly farming model promoted by FAO that revealed this  recently said the growth of Cassava can  help turn the staple from a poor people’s food into a 21st Century crop.
In a newly-published field guide detailing Save and Grow’s applications to Cassava  smallholder production, FAO noted that global cassava output has increased by 60 percent since 2000 and is set to accelerate further over the current decade as policymakers recognize its huge potential.

But using the inputs-intensive approach pioneered during last century’s  Green Revolution to boost cassava production risks causing further damage to the natural resource base and increasing the greenhouse gas emissions responsible for climate change.

Cassava farm

The solution, says FAO, lies in the Save and Grow approach which achieves higher yields with improved soil health rather than with the heavy use of chemical inputs.  Save and Grow minimizes soil disturbance caused by conventional tillage such as ploughing, and recommends maintaining a protective cover of vegetation over soil.

Instead of the monocropping normally seen in intensive farming systems, Save and Grow encourages mixed cropping and crops rotation, and predicates integrated pest management, which uses disease-free planting material and pests’ natural enemies to keep harmful insects down,  instead of chemical pesticides.
Spectacular results
Cassava is a highly versatile crop grown by smallholders in more than 100 countries. Its roots are rich in carbohydrates while its tender leaves contain up to 25 percent protein, plus iron, calcium and vitamins A and C.  Other parts of the plant can be used as animal feed, and livestock raised on cassava have good disease resistance and low mortality rates.

One reason driving increased demand for cassava is the current high level of cereal prices. This makes it an attractive alternative to wheat and maize, particularly as cassava can be processed into a high-quality flour than can partially substitute for wheat flour.  Food security

But, together with its importance as a source of food and food security, cassava also has a range of industrial uses that give it huge potential to spur rural industrial development and raise rural incomes.
Cassava is second only to maize as a source of starch and recently-developed varieties produce root starch that will be highly sought after by industries.

Demand for cassava as a feedstock for the manufacture of bioethanol is also growing rapidly.
Another important consideration is that of the major staple crops in Africa, hardy, resilient cassava is expected to be the least affected by advancing climate change.

With Save and Grow developing countries can thus avoid the risks of unsustainable intensification while realizing cassava’s potential for producing higher yields, alleviating hunger and rural poverty and contributing to national economic development.

Source: Vanguard