The Chairman, Harvest Feeds Agro Processing, Goke Adeyemi, in this interview with COLLINS NNABUIFE, speaks on his experience on the lockdown of some parts of the country. He also shares his views on the post-coronavirus era and the need for government to intervene in manufacturing sector.
Since the government declared lockdown as efforts to contain the spread of Coronavirus, what has been your experience?
Remember that early January this year, we commissioned our brand new automated cassava starch processing line to produce 40 tons of food grade quality starch per day, so after commissioning, we were trying to ramp up production because we had orders, suddenly the issue of Coronavirus came in, and since the last 4 weeks we have been on almost complete shutdown of the factories both the old one and the new one.
The impact of that my business is that we are losing every month close to N180 million revenue, I have 170 staff that I paid March salary even though we did not do much work in March, I don’t know what will happen to them in April, every month I have a salary bill of over N11 million.
So the impact has been very huge, our cassava farmers whose farms are ready for harvesting, could not go to harvest their crops, and I have about 400 farmers whom some of their cassava are ready for harvesting, the rain has also started, so they are supposed to harvest that one, prepare the land again and prepare for this year, all those ones are put on hold. So the impact to us is massive.
However, there are always opportunities in calamities. This Coronavirus pandemic is a very big calamity for agro-processing in Nigeria, so the opportunity there now is that our government came up with some intervention programmes where they give the poor some money and some palliatives, that is good but they also need to think about structural intervention. Who are those directly impacting in the economy; agriculture, agro-processing, manufacturing, we need intervention also, and such intervention should not be rooted through commercial banks in Nigeria, because commercial banks are also profit oriented, they will be looking only on the profit angle of such intervention, whereas the government will be looking at the growth and development angle, not necessarily profit for somebody or some groups, they will be looking at the profit for the nation.
So, for me, the impact has been heavy, occasionally, we need to run the machine, otherwise something will happen when you don’t run it for too long, so we liaise with some farmers and they bring in some cassava maybe once in a week so that we can put the machine on. You don’t leave your processing line completely idle for too long, by the time you want to start again, it’s like you are starting a fresh line, and that can take up to 3 weeks before it can be ready.
What are your expectations for the post-coronavirus era?
If you look at the so called world as a global village, I think that right now we are beginning to see that while we want to be a global village, people should not forget their peculiarity. Nigeria should not forget the fact that we are still developing, we are not yet a developed country.
So, post-coronavirus era should focus on growing the indigenous companies in Nigeria, that should be the focus of the government.
We have several older countries in Africa that are not yet even in Nigeria standard, so we can use the fact that if Nigeria goes into massive production with indigenous technology and some benchmark technology from abroad, we can have our market in West Africa even in Africa, of course we can also go to ther parts of the world.
If you look at what is happening to oil for example, oil price in the world is crashing, it is less than $20 per barrel, what can that do for Nigeria? So, it means we just have to develop Nigeria.
So, post-coronavirus era, we should focus on indigenous companies in Nigeria, we can fill up the gap back home, all we need is to ramp up, and once the necessary encouragement is given directly focused to ramp up production, we will ramp up. Like I said, we have the capacity to produce food grade starch, every day, my factory produces 85 tons of starch, that means in a month we can give up to 3000 tons of starch to the economy of Nigeria, that is also good and there are several other companies that can do other things in terms of ethanol, flour and chips.
My own idea is that our leaders should focus on indigenous developmental manufacturing growth for Nigeria after COVID-19, start by giving electricity, start by mobilising manufacturers and farmers.
We have the capacity, we have the wherewithal, we have the knowledge, we need encouragement, we need infrastructure, we need the policies that will bring growth to Nigerian industry.
Currently, farmers find it difficult to access their farms, processors may not be getting raw materials, who would be the impact of this vacuum after the COVID-19 era?
It is like starting up a life, individuals that make up the community must survive, they need food, so we have to provide money and resources for people because when the COVID-19 era ends, prices of things will go up, because there will be very few items, and there will be a lot of people who would want to buy it.
So, Nigerian government should focus on how to make things balance, between what they are giving to people now as palliatives and what you need to give to the industry to come back to production, because when the industry come back to production they produce more goods for the economy, once goods are more than the demand, the prices will come down, but if the demand is more than the goods, the prices will go up.
So there must be a critical balance where the government will also encourage the industry to produce, provide power to them, finances and any other assistance they need to produce, and also the conditional cash transfer should also be there, the government must spend a lot of money, that’s the truth, this kind of crisis requires that government should spend far beyond their budget, that’s what will happen, we have to over spend our budget to be able to come out if the crisis, otherwise it will lead to serious endemic poverty.
So, my own advice is that what they are making efforts to help the citizenry, they should also do things to help the industry, so that there would be more production of items into the economy and there will be more money for people to buy the items, so there will be balance, but if they give the people alone and the industry don’t have the money to put things in the market, the little one they are producing will be so expensive that the money you are giving the citizens will make no meaning, but if you help the people in the industry, they will be put things into the market for the citizens to buy at cheap rate.
Highlight more things you need the government needs to do to cushion the effect of COVID-19 when it is eventually eradicated?
My own recipe for the processors is that as it is right now, every processor should not abandon their factories, we should have a way to run their machines so that when you want to start, your machines will be in good shape and good condition. This kind of thing can lead to a big crisis when you want to start the machine after the COVID-19 pandemic.
We have to ensure we leverage on the opportunity that is coming up to fill the vacuum by increasing our production to our economy.
Also, let us look inwards in building our human resources, imagine almost all the foreigners in the Nigerian economy have evacuated their people out of Nigeria. Those of us in the agro-processing industry should develop our internal human resources capability so that come rain come sun, we can hold our own.
For the government, the thing that we have been clamouring for, this time you have to do it, give us electricity, let energy be available, let gas be available, let there be money and resources, people who are talking about 20 per cent interest rate should stop it because it will not help any economy, this time, they should drop the interest rate for manufacturers to 2 per cent to stimulate growth quickly for us.
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