How We will Improve Manufacturing Contribution to Nigeria’s Economy – Engr Mansur Ahmed

Interviews

 

Engr Mansur Ahmed recently took over the helm of affairs at Manufacturers Association of Nigeria (MAN) , as its President overseeing over 3000 member companies across the country. 

In this interview, he gave insights into his childhood, professional career, his vision for the manufacturing sector among other economic issues that are of national and regional concerns.

 

Looking at your professional profile, what other things should we know about you? 

You must have noticed from my CV that my background is in engineering, principally Mechanical Engineering and Industrial Engineering.

What you may not know is the fact that I started work in the education sector as a lecturer at Ahmadu Bello University before I went to the manufacturing sector.
Education has been part of my passion largely because I was born into a family that was involved in education; many of my uncles were educators so I grew to like it.

I have since been very much interested in education, particularly at the basic level, because I believe that the education a person receives at the youngest age majorly from age 5-18 determines to a large extent the trajectory of his/her life and career.
Currently, I am involved in some educational projects. I have been privileged to be the Chairman of the Governing Council of a primary school in Kaduna State for about 40 years and what really gratifies me is that the school has remained one of the best schools in Kaduna.

The interesting aspect is the fact that members of the Governing Council don’t get paid, what drives us is our passion and interest to support the school.
Apart from that, I run a small school with about 150 pupils which is totally free for those who can’t really afford to send their children to school. I consider this project to be my personal corporate social responsibility , CSR.
I also belong to a number of organizations that participate in promoting development in the education sector. One of such group is “Teach for Nigeria” which has been in operation for over 5 years now.

The major goal of the group is to support schools especially through the improvement of the quality of teaching and learning. The group operates by engaging graduates of any discipline, give them intensive training on how to teach and execute leadership role and then send them to these schools for a period of two years. In the past 3 years, it is amazing the level of impact we have recorded.

Tell us what growing up was like?

Well I grew up in a large family, my father had about 22 children and my grandfather had 10 children. My father being the oldest assumed the role of a second father for all his siblings, and so obviously has this oversight function over the larger family.

The 10 families operated like one huge family and because of the relationship between our parents; ten children of my grandfather expanded to over a thousand i.e. children, grandchildren and great grandchildren. Growing up in that kind of atmosphere you learn a lot of things about life, for instance, you will get to learn that ‘success is not what you do for yourself, but what you’re able to do for other people’.

You cannot be happy if everyone around you is unhappy. This upbringing helped me because wherever I go, I find it easy to work and relate well with people irrespective of who they are. I think this is one of the things that I find extremely important in my life.
I went to a public school and of course in those days, the public schools were better because they were well managed quite unlike today.

Today things have changed, public schools are like nobody’s business, people who are engaged in it feel like it’s just to earn a living, they don’t feel like it is a part of them.
People who are saddled with the responsibility of running these schools have their children in private schools and hence would not take the management of these schools as personal.

Obviously, overtime the public sector system has deteriorated tremendously which to a large extent, can be attributed to population increase and unfortunately facilities have not expanded in the same pace, and the overcrowding of schools have helped to weaken them.
When I went to secondary school back then the total number of pupils was not more than 500, today the same school, my Alma mater has probably about 4,000 pupils. but the school infrastructure did not expand five times.
For my tertiary education, I benefited from a scholarship by Shell Nigeria Limited through a competitive selection process. During my set in 1968, I think we were about 21 participants selected from all over the Country, so it was a very competitive thing. After the interview, we were sent to universities both in Nigeria and Abroad and I was one of the fortunate ones who went to the United Kingdom, Nottingham University precisely.

Before your emergence as President of MAN, you have held series of leadership positions, kindly take us through your journey of growth?

In October 1969, after 9 months of internship with Shell at Ughelli in Delta State as part of their scholarship requirement, I went to the University of Nottingham where I studied Mechanical Engineering.

The Shell scholarship says when you have done your first degree you have to come back and work with them for a minimum of 3 years. After my first degree, I became very interested in a subject called ‘Industrial Engineering’ because it was part of the subject we took during the undergraduate studies, so I wanted to do my masters in Industrial engineering.

I applied to the University of Birmingham and was offered admission but because I had not worked for Shell for three years as stipulated in the contract, Shell refused to release me for that study and because I could not finance my Masters programme at the time, I lost the admission and then returned to Nigeria.
Back home in 1973, I got a job at Ahmadu Bello University as an Asst. Lecturer in the Mechanical Engineering Department. NYSC started in 1972 but when I came back, I tried to enroll for the National Youth Service, I could not participate because part of the eligibility process then was that you must attend a Nigerian University.
In 1974, I got a scholarship for a Master’s programme from the Ahmadu Bello University to study Industrial Engineering at Cranfield University. Upon my return, I decided to resign because I wanted to move into the industrial sector.
I got my first job in the industry with Dunlop Industries Limited in 1976, they were into the manufacturing of vehicle tyres, and I was there for about a year before I resigned to take on a higher challenge.
I got an appointment with the Northern Nigerian Textiles (NORTEX) Nigeria Limited and was there from 1977 – 1979. Thereafter, I worked with the Bagaudau Textile mill located in Kano as the General Manager from 1979-1982.
Also, in 1982 I worked as the Managing Director of Kaduna Textile Mill, a subsidiary of the New Nigeria Development Company (NNDC), which was like ODUA Company in Western Nigeria.

You would recall that after Independence, each of the region in a bid to develop their regions established investment companies to drive investment in their various regions; Western Nigeria had ODUA, Northern Nigeria -NNDC while Eastern Nigeria -EDC. NNDC at the time owned the largest Textile Mill in Northern Nigeria with a workforce of about 3,700.
My leadership growth continued in the textile industry where I got to face a lot of challenges. During the period I was the Managing Director at Kaduna Textile Ltd we had serious problem with cotton supply and most of the textile mills were forced to close.

We did not close down but we had to reduce staff salaries which was a difficult decision to take. I had to personally meet with the Labour union to bring the information to them and it did not augur well with them. It was during this trying time I met Adams Oshimole who was then the Secretary General of the Union and with whom I subsequently became very good friends.
Following my stint at Kaduna Textile Ltd, in 1984 I was appointed as the Divisional Director of NNDC when the position became vacant as head of the Construction Products and Real Estate Division.
As the Division Director, I represented NNDC on the boards of various companies in which NNDC had investment such as Benue Cement company, Nigalex, and others.
In 1988, I was appointed the Managing Director of Kaduna Refinery & Petrochemicals Company, a subsidiary of NNPC and I was there from 1988- 1991. Thereafter, I was transferred to Port Harcourt as the Managing Director of Port Harcourt Refining Company where I was from 1992- 1999. One of the interesting experiences I had then precisely in 1993-1994 was when the Abiola election was annulled, there were several unsuccessful attempts to shut down the Port Harcourt refinery after they had already shut down the Kaduna and Warri refineries.
I was there till 1999 when I was promoted to the Headquarters in Abuja as the Group Executive Director, Refining and Petrochemical, then I was responsible for the refineries and petrochemicals under the company until 2003.

At that time, I was involved in the process of setting up a platform to advocate for change in the Nigerian economy which led to the establishment of the Nigerian Economic Summit Group (NESG).
Upon my retirement from NNPC at the level of Group Executive Director in 2003, the NESG then Director General had also retired, and I was invited to serve in that capacity in 2004. In 2008 I became the Director General of the Infrastructure Concession Regulatory Commission (ICRC) which was set up to help develop a framework for infrastructure development using private sector participation.
During the four-year term, I was able to put the commission together and develop all the process and procedures for Public-Private Partnership. We made tremendous progress in that regards, but I resigned in 2012 after my first tenure.
In 2013, I started work with Dangote Group where I became more familiar with the activities of the manufacturers Association of Nigeria (MAN), although to be honest, I had been involved with MAN as far back as 1982 when I was a member of Council for one year representing Kano branch.

Given your wealth of experience and vast exposure in the manufacturing sector, what should member-companies look out for in your administration?

My vision is to “increase the contribution of the Manufacturing sector to the National Economy”.
Today, as you are aware the manufacturing sector is contributing less than 9% of the Nation’s Gross Domestic Products (GDP), that is not good enough. In countries that are even less developed than Nigeria, we have seen higher rates of contribution by the manufacturing sector and at any rate, for any country to be regarded as industrialized, the manufacturing sector being the productive sector that produces the goods that generate value and wealth, must be contributing significantly to the growth of the economy.
For instance, in many of our peer countries; Malaysia, Indonesia, Brazil, South Africa, you see manufacturing sector contributing something in the range of 30% of their countries GDP, now here we are contributing less than 9%. So clearly, we have a long way to go to raise the level of contribution of the sector to the GDP.
Part of the contribution comes from, not only the scope or depths of the sector, but also from the operational efficiency of the productivity i.e. the capacity utilization. Consequently, we need to make sure that we eliminate those things that on a day to day basis tend to impede the operations of members and therefore reduce their capacity utilization.
Therefore, under my administration, members should expect expansion of the sectors i.e. bringing more manufacturers into the fold and ensuring that sectoral groups are made vibrant.

We have about ten sectoral groups, but if you look at the relative contributions you will observe that not more than 4 or 5 sectoral groups are responsible for most of the contribution of the manufacturing sector to the economy and for most of the employment as well.
The textile sector used to be very vibrant, but it has declined significantly. So, we must broaden the sector to ensure that sectors that are not adequately functioning are restored to good health.
In leather and footwear there is tremendous capacity but today it is not being fully exploited, we are stopping at the production of wet leather. Value addition is the key to success in manufacturing, for instance, if you take the process from hide to finished leather and compare the value that is added from that finished leather to a pair of women’s handbags, the difference is huge.
Hence, there is need to deepen the sectors. The same scenario is applicable to food processing; you produce cocoa, turn it into cocoa butter and you export it, what you get from that cocoa butter and they convert it into chocolates, for the same quantity of cocoa butter the manufacturers of chocolate will make literally a thousand times more than you do.
One of my goals is to work with the National Council and Government to ensure that we continue to grow the manufacturing sector both in depths and scope through increase in value addition and thereby better the contribution of the manufacturing sector to the Nation’s GDP.

There is also, the need to constantly improve on the technology of our manufacturers particularly today with growth in technology.

It is not enough to have a factory you must also watch what technology is doing to that factory, if you don’t update your technology very soon your processes will become obsolete and therefore your products will not be competitive.
To state specifically, these are some of the issues my administration hopes to bring to bear, this means of course we have two responsibilities which include:
• To make sure that the economic policies the Government put in place are policies that will enable us achieve our goal; and
• Also, we ourselves must be willing to take advantage of policies, creating the right interface between sectors and the policy makers in Government and ensuring that there is some level of understanding.

What policies do you consider paramount to catalyze industrial growth?

First, we must consider what policies will make this vision feasible. When you are manufacturing, the first step is making an investment, so you want to look at the conditions that will make that investments worthwhile. The investment climate is key, and I think we all know this over the years. This Government has been working on improving the business environment as there have been several initiatives to improve the investments climate and thereby making investments and businesses easier for investors.
The second are policies governing the development of infrastructure because as manufacturers depend on basic infrastructures such as electricity, water, transportation etc. the poorer the infrastructure, the higher the cost at which they can produce and deliver products to the market.

So, building infrastructure is one of the most critical responsibilities of the Government for industries as a whole to be more competitive.
The third is improving the spending power of the ordinary people because the higher the spending power, the more demand for products. So, putting more money in the pocket of ordinary Nigerian clearly creates more market for the manufacturers. Policies that help improve the income of the ordinary person is very important.
The fourth is policy against trade malpractices, such practices undermine the market and part of our major task is to ensure that Government continues to make laws and regulations that discourage these practices particularly smuggling, counterfeiting, dumping.
There is also the issue of finance. One major constraints of the manufacturing sector in Nigeria is that the cost of financing which is very high.

For instance, if you borrow funds to invest at 20% interest rate, you must make more than 20% for that investment to yield benefit. In other countries, it is less than 10% interest rate for investments, this means that you will have problem competing with manufacturers from those countries. Cost of financing is very important and we must continue to work with Government to encourage the financial systems to continue to bring down cost of finance.
Again, given our current status in the manufacturing sector where a huge amount of manufacturing resources is spent importing inputs such as raw materials, spare parts, components, machinery etc, another area that is important to the manufacturing sector is the Foreign Exchange not only in terms of rate but whether it is steady or fluctuating.

As much as possible we want a competitive foreign exchange rate and also to remain reasonably stable, if it fluctuates it makes it difficult for you to plan your operations.

‘I believe that government has tried to some extent to alleviate some of the pains we suffer, such as by creating special windows for manufacturers for FOREX’

 

Manufacturers have constantly clamored for a strong campaign against smuggling, counterfeiting, cloning and piracy which bedevils their businesses, what strategies would you recommend to Government to curb the menace?

We are already engaging government on this, there are initiatives that have been started under President Buhari’s administration which tries to focus on taking necessary measures to discourage all these malpractices.

I think that one thing is having the regulations and policies; the other is making sure that people who are engaging in these things are identified and dealt with according to the law.

Therefore, the implementation of the regulation is key. We have been pushing and working with the key regulators that are involved in ending these malpractices such as the Customs Services, NAFDAC, SON, and will continue to work with all these regulatory agencies to ensure that the regulations put in place are effectively implemented.
I also believe that we have our own responsibility as manufacturers, our members ought to know that you can’t eat your cake and have it so we must ensure that we don’t get involve in these malpractices.

Second, we must also be watchful because we are out there in the market and so we know what comes into the market and what goes on and we must therefore help government by ensuring that when we see these malpractices taking place we don’t just fold our hands and say this is not our responsibility, we must take steps to make sure that the culprits are identified and arrested, therefore we must work hand in hand with the Government to curb this menace

The cost of funds and lack of long-term loan affect manufacturers, particularly the Small and Medium Scale Industries (SMI), how do you hope to address this yearning?

The Small and Medium scale Industries (SMIs) are very critical to the growth of the manufacturing sector because the more successful they are, the more the larger industries can rely on them to do a lot of the things that they themselves are having to do.

This way the value chain will be stronger and will help both the larger and the smaller industries. We will continue to advocate for initiatives that will put more funds in the hands of the Small and Medium industries at lower cost or lower interest rate and on a longer-term basis because investments in manufacturing is on a long-term basis. So long term funding is important. It is indeed lack of long-term funding that also tends to keep our industries small and at tertiary levels.

On the lingering subject of African Continental Free Trade Agreement (AFCFTA), what views do you hold on the matter?

Our position, is that ultimately trade is good and that there are opportunities for Manufacturers to grow if trading is expanded and made easier. However, in the context of the ‘Continental Free Trade Agreement’ what we have said is that before you go into an agreement you must access your capability to benefit from that expanded trade and your readiness to go into that kind of agreement. I think this is just the fairest thing to ask in any situation like this.
Once you know what the opportunities are and what are the risks, then you will know what you need to do to mitigate the risks and to exploit the opportunities and this was what we said at the beginning of the conversation on the African Continental Free Trade Agreement.

I think, to some extent, we were misunderstood by people who thought we are saying ‘No don’t sign’, but what we are saying is first understand what the agreement is going to mean in reality to your industry, to your economy, and so on and be prepared to mitigate the risks and to take advantage of the opportunities that arise.
This is what we asked for and I think this is what is now clearly being recognized by Government when it set up a committee to assess the readiness and to also investigate the pros and cons i.e., the costs and benefits of the agreement.

This is important because by the time we clearly understood what we are going into, then we will be in a stronger position to know how to negotiate. Don’t forget, an agreement is something that is negotiable so if you don’t know what your goals are in the negotiation it’s impossible to negotiate effectively and that is what is happening.
We are very satisfied with the position government has taken which has provided time for this subject to be properly evaluated and also, necessary information for successful negotiation.

What is your scorecard of the current administration with respect to the manufacturing sector?

The manufacturing sector has been fragile for quite some time, so you really can’t blame this administration which has just been in the power for three years. The overall economy has been affected by factors which are way beyond this government. .

The crash of oil price in the international market has tremendously impacted negatively on the economy that its effect spread across every sector particularly the manufacturing sector.

I believe that government has tried to some extent to alleviate some of the pains we suffer, such as by creating special windows for manufacturers for FOREX, setting up of the Presidential Enabling Business Environment Council (PEBEC), and the Industrial Council to monitor what is happening to manufacturing as well as other sectors and recommend what needs to be done to ensure there is improvement.
You are aware that as a result of the collapse of the oil price we went into a recession, and although we are out of that recession things are still fragile, the manufacturing sector is still up and down.

But we are beginning to see at least in terms of current government decisions possibilities that can help the manufacturing sector to grow but the execution of these policies is very important.

As stakeholders, we will continue to monitor this and raise alarm if need be, when things are not being executed when they should. I believe that the position in a nutshell is that yes, the sector is too fragile, and a lot more needs to be done to strengthen it and sustain its growth trajectory.

Culled from MAN News

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