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Chairman of Blue Diamond Logistics, Festus Mbisiogu, met with some journalists and bared his mind on how Nigeria can correct its trade imbalance with The Peoples Republic of China. Mbisiogu, who is based in China, also outlined the strengths of each geo-political zone and how they can leverage on limitless opportunities in the Asian country, which can impact on the country’s GDP to come out of its economic downturn. ADETUTU FOLASADE-KOYI was at the parley.
What’s your take on substandard goods coming into Nigeria from China?
Eighty per cent of Africans in China live in Guangzhou and statistics have shown that Nigerians in Guangdong Province contribute about 20 per cent to that economy. Statistics, too, show that $10 – $20 million comes in from Nigeria into Tanzuo market, on a daily basis.
Igbo are guru with businesses so, the Chinese are getting closer to us, get to know our modus operandi so that they can learn the trade from us.
We contribute a lot to their economy, yet, we are not recognised. Before now, we were like sheep without shepherd, but, with the Nigerian consular office here in Guangzhou, things are better. No Nigerian, who wants to move up the ladder here would like to mess it up. Some of the problems we have here are when an order is placed in Chinese, we go, because we have no knowledge of what they are producing. Just with a sample, they can produce anything in the world; after looking at it. They are creative. NAFDAC and SON deserve praise for carrying out factory tours on some products before shipment. Most of the substandard goods imported are not our fault. We have no knowledge of how they are produced. When the goods arrive, we can’t send it back. So, for my company, we do pre-inspection before shipment.
Can you assess the trade relations between Nigeria and China in 13 years?
When (former President Goodluck) Jonathan visited China some time ago to know investors, so many memoranda of understanding were signed, especially on power, agriculture, mining and some major constructions, such as airports and many more. But, there was no follow-up. This has been a major challenge for Nigerian businessmen here. I have witnessed several MoUs signed between the Nigerian government and the Chinese government. I was involved in some of these MoUs and some of these investors came through me but there were no follow-ups.
That was why I insisted that, for Nigerians, there is more to coming to China to woo investors. What next after the discussion because implementation of the MoUs are not there? We invited Chinese investors to Nigeria but there is no conducive environment for them to go into areas we want them to; areas like industrialisation of the country, in Greenfield investment, where they bring their own plant, install it on Nigerian land and employ our people, training them and through that, allow skills and technology transfer. In this area, I can tell you it is zero. The only area the Chinese are concentrating on are roads and airport construction. According to statistics, 90 per cent of previous contracts were awarded to foreign companies, alongside Chinese companies. The remaining 10 per cent go to indigenes. I am not so comfortable with that and it gives me great concern. The only way we can have a win-win approach between the two countries is when we allow the Chinese to have the contracts while we gain through skill and technology transfer. The Chinese, too, are not to blame because of unsteady power supply and not too conducive environment in Nigeria. The environment is harsh and the North is no-go area because of insecurity in the North East. So, they are now into construction. As for me, I believe Nigerians can hire them, as expatriates so that they can train us. One of the factors causing this not too conducive environment is in the power sector. No wise investor would like to invest in a country where there is no steady power supply. Eighty per cent of profit in companies goes to power. When some of our state governors came here in April, I made them understand that 80 per cent of what the world uses is from China. They are growing fast and will soon take over the world. There are lots of things we need to learn from them. On their last trip here, I made them, the governors, understand that they should focus on industrialisation of their states by identifying potential businessmen and women and try to create an industrial zone, lend them money and help them get machinery to work. It’s a no-brainer that that will work! For instance, furniture and fruit juices are imported from China. So many things used in Nigeria are from China, including toothpick! I am a shipper here and I know these things, first hand. Why can’t they think in such direction by mapping out money and, for example, share processing plants among the states?
For example, Benue State can go into cassava and soy beans processing, get the processing line and then, get Chinese to work on it, through public private partnership. The entire North should concentrate on agriculture. The South East, with particular emphasis on Abia State, should concentrate on production of shoes, textile, bags, car spare parts or car assembly while the South South should focus on building materials like ceramic tiles, furniture, and many more. A particular region should focus on drugs factory while the Federal Government should allocate funds to procure the production lines of the above-mentioned items and get foreign experts to train our people. With that, it will create opportunities for transferring of skills and technology that we badly need. Foreign investors veer towards constructive because of poor power supply and high interest rates, among others. From there, the country will have enough to feed from and still export to other parts of the world. This way, no state in Nigeria will be unable to pay salaries instead of waiting for federal allocation from Abuja. It beats me that each time they are here in China, their only focus is on construction. Nobody talks of industrialisation. We should also talk of transfer of skill and technology, or else, we gain nothing from them and that win-win approach becomes a futile mission. No one should take advantage of our inability to think beyond the areas they are playing on. Even when they bring money into Nigeria, they demand for Sovereign Guarantee, which our government does not have. They saw this wasn’t possible to finance projects, thus, they switched to construction! Bids tendered for projects are always won by the Chinese. No local construction company ever gets contracts when the Chinese are bidding with them. This, too, is a problem!
How can Nigeria attain trade balance with China?
Look, I, in partnership with others, went to Nigeria with more than five delegations and I saw that the relationship between both countries was not balanced. I was the only Nigerian representative of the Belt and Road Initiative. So, I tell you that, that is one solution Nigeria needs to come out of our economic woes. See how to understand the Chinese culture, the business environment and clear misconceptions of their mission in Nigeria; to experience China and take the word back. To partner with any investor, they need that partnership in a conducive environment. I run a non governmental organisation (NGO) on steady power supply. If we fix power, we don’t need to advertise for investors to come because we have the manpower and human resources, as the largest population in Africa. As it is now, all profit goes to diesel and generator maintenance, which is really not good for businesses to thrive. Analysis shows that if a unit cost of an item produced in Nigeria is 1000, it will be 800 in Ghana and 600 in China. Why? It is because of unavailability of power supply. Bathroom tiles and all the likes are produced in China. How is it that we can’t even produce any? After an extensive market research, I found that it is better I buy products from China than produce in Nigeria. The cost analysis shows that it is one digit interest rate and other incentives, such as 10 per cent rebate on every export. There are other incentives that make them conquer the world, including giving you accessibility to factories and other supports in its fullness. There is no magic about it. Daily, I ship loads of containers of goods and we private businessmen find it difficult to woo them into the country because of the factors I’ve been talking about. Only few succeeded…The rate at which China is growing, a city here can give Nigeria light within six months. But, I still don’t know why our governments are not thinking in this positive direction. The only thing we bring into China is wood and mahogany, which is a major market here. They use it and sell back to us. Oil, too, is another product exported to China. We should export a lot, but, to be able to import so that the country can generate foreign exchange. It can only be done through industrialisation and taking the youths off the streets. Look at the South West, it is close to the seaport and Lagos can concentrate on building materials and furniture so they can export through the seaports. Let them not focus on agriculture. One hundred and two containers of metrotiles go into Nigeria from China. Aba and other eastern states can focus on shoes and bags. Let them start to feed the nation rather than buy from China. Are we deaf and dumb that we cannot see what is going on?
The North can focus on agriculture because they have arid land and the Federal Government should, when doing their annual budget, allocate funds for production and look for serious partnership to drive it. They have incentives and zero tariffs that are good for us to export to china, yet, we are not making use of it. Cassava processing is peculiar to the Chinese and they are beginning to like it but, there is no enabling environment. Expertise should be the wisdom we should apply.
