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The NMC 2017 Octagon Panel Conversation – Audio and Transcription

Posted on: August 11th, 2017 by The Moderator No Comments

 

 

The Octagon: We’ve had about over 20 room conversations with topics spanning from the recession to even marriage issues. We have people who are experts in these fields who converse, and then we share that conversation. Today, we have half the number of people who have already been a part of conversations in our rooms but who we also believe will add value, and they would share with us knowledge that would raise the level of thinking when it comes to Digital Media and Digital Media Technology. So I’ll first introduce them, and then I will introduce the topic.

First we have Ezegozie Eze coming on stage. Ezegozie Eze is the country West Africa Manager for Universal Music.

Next we have Isioma Idigbe, she’s a legal practitioner with PUNUKA Attorneys and Solicitors.

Next we have Laolu Alabi who is so many things. He has been pushing the agenda for young people being a part of driving the economy.

Finally we have Dr. Lawal Bakare. I often say that Lawal Bakare is probably one of the reasons why a lot of us in this room do not catch Ebola because he was instrumental in running Ebola alert.

So, they’ll have a conversation and if there are any questions, we have a number of people who have post-it notes. You can ask questions based on some of the things you have heard, you can raise your hands, they will give you a sheet of paper and then you can write your questions and pass it on to me and I can help drive the conversation.

Alright, so now to begin. We’ve heard so much and I believe the people who are here have heard so much as well about best practice digital media. How to do it, how not to do it.  More so, how important it is to understand these things. But what we will focus on in this conversation; is the digital media as a potential contributor to the Nigerian economy? Now before I ask my first question, just a few stats. The IMF mentioned that in 2018, Nigeria’s GDP will grow at a faster rate than even South Africa. It is already picking it up. We look around the world and we find out that the digital media industry has, in parts of the world like the UK and in Europe, contributed to almost 21% of their own GDP.

Right now here in Nigeria, we’re happy to record that oil has now taken a back seat and the non-oil sector, specifically Agriculture, Information Technology, have contributed to 96% of our GDP which is exciting. I would like to just first ask, what do you think, in your opinion, and from your experiences is the potential that digital media technology can contribute to the Nigerian economy? First of all, before we begin to interject I’ll just like everybody to introduce themselves and then in your own opinion, express that.

Ezegozie: Good afternoon everyone (good afternoon), thank you guys first for being out here. My name is Ezegozie, as he mentioned I’m part of the Universal Music Group family. We’re launching here in Nigeria, September. And some of you may or may not know Universal is the largest label in the world and it’s now positioning itself as an entertainment company. So digital media is a very big part in focus including content creation, content generation, innovations and enterprise. There are so many amazing things that are happening in the media creative space in general and the digital media or what I call the digital currency is a big part of it. For me, I specifically think that digital media is the future, I mean, if you just think about how many people have built businesses and have literally created their own source of income from digital media. It’s the renewable way. Yesterday, I saw in the UK headlines that by 2040 they’re completely banning cars that are running on diesel and fuel. So if you think about where the world is going, where Nigeria is and where we need to go you realize that there are so many opportunities that people can create in their own homes. A lot of us play around Instagram, Twitter, Facebook and a lot of us use it for business. Whether it’s to network and to meet people, whether it’s to create or run our own business, it’s a big part of the new future and for Nigerians specifically, it’s our own private way of being able to contribute to make Nigeria what it should be. You know we can’t wait for private sector, we’re not waiting for government. It’s a private way for all of us to individually make sure that digital media and the digital space continues to grow. That people individually, no matter where you’re from, if you have access to the internet or any of those forms of communication you can create your own currency, your own income. So it is the way, the future. It is the way forward, it’s the only way that I feel all of us can individually create the future we want and also put Nigeria where it should be.

Isioma: Hi everyone. My name is Isioma Idigbe. I’m an Entertainment and Intellectual Property Lawyer with PUNUKA Attorneys and Solicitors which is a law firm based in Nigeria with branches across Nigeria. And going to the topic, I remember when I got the invite to speak on this panel, I was super excited because I am very passionate about the general entertainment industry and I consider Digital Media as part of a wider entertainment and creative industry, and we are already contributing to the GDP, as you could see with some of the statistics that the moderator quoted in the introduction. But the key thing for me in saying, yes we can, is that we are not reaching our full potential because of the infrastructural issues that we have. That’s going to be the way I will be approaching this conversation. That is, what are the infrastructural changes that we need to implement to support the growth of this area, and not just digital media because I think digital media is just an outlet for general entertainment and creative industries. When I was preparing for this panel, I ‘googled’ the meaning of media and digital media? And it’s basically the same thing. Digital media is just media publishing, videos, music, all these kind of intellectual property content with the word digital just added beside the media because this is now a different outlet through which all these creative content can be distributed and consumed. So the key thing for me when we’re looking at this is yes it can become a contributor to the GDP, only when people are able to generate the maximum revenue that they can from this. I agree with Eze in saying that this is the future of content consumption where people are able to leverage and get the most revenue that they can from digital media. So to me that’s going to be how I would address this conversation and then again, obviously, this is just an intro to obviously go into those infrastructural issues.

Laolu: Hi, good afternoon. My name is Laolu Alabi. I am an Architect. In my past time I do a few other things including an initiative called “Conversations with Damilare Baker.” I also run another initiative called eighteento35. Eighteento35 is an initiative developed for people between that age ranges. The idea is to attempt to build and celebrate individuals within that demography. My general thought is that any nation that despises the 18-35 age group is actually mortgaging its economic future. So yes, I’m a proponent for getting the young guys out there to do stuff, whether we’re prepared enough is another case entirely. Just before the session began, we were talking about the “not too young to run” and I’m thinking, maybe we should start considering as well, “the not prepared to run”. Because I’m not even sure that these guys that are catching this fever are actually old enough, not age-wise, to run. So that’s a few of the things I do. Coming back to the conversation, the new media and the contribution of digital media to the GDP, immediately I heard that the first thing that came to my head was data and how well we’ve been able to manage data as the case may be. Unfortunately, our society does not support data. Our culture does not support data. We are a culturally secretive lot. So if I ask my aunt when she’s traveling and she says, oh I should be travelling before the end of the week, she’s actually traveling that night.

So, and that’s how we grew up. There’s a Yoruba adage that says “if your yam sprouts, you have to cover it up”. We cannot talk about digital media without talking about data. We cannot talk about being able to evaluate the real effect and I think I’ll probably share more about this as we go along. So that was the first thing that came to my head. You know how you tell somebody you went for a psychiatric evaluation, which is just a regular thing, and the next time they see you, they’re crossing to the other side of the road because, as far as they are concerned it’s something else. So yes, that would be some of the angle that I’ll be looking at in terms of digital media and then its effect on the GDP and the economy as a whole. Thank you very much.

Lawal: I’m Lawal Bakare. I trained as a dentist at the University of Lagos. And very early in Medical School I realized that there were a lot of opportunities in ensuring that people know what is happening in their body well ahead before they come down with any disease. I schooled in Idi-Araba which is a slum and where the prestigious College Of Medicine is situated, which is also where we have the first dental school probably in West Africa. I realized during a physiology lecture, that if we could share a small percentage of what we were learning in that physiology lecture room with the people in Idi-araba, maybe the slum status might change overnight and that was the beginning for me. Today, I’m a Health Communications Scholar, I should be joining the North Western University at the end of August to start my Post Graduate Programme. Recently I had the opportunity to prepare a document on the idea of new media itself. Do you guys know that at a point in time television was the new media? So the idea of the new media is just well, “today media” which is the medium for transferring information from a place to the other. What channel we chose to pass it through is what makes it new from time to time. So maybe tomorrow it’s going to be some supersonic idea where we’re moving messages from Earth to Pluto, then we probably would have colonized all the planets, and that will be called the new media. So how does this now affect where we are going? Back when I was in marketing school, when I finished Med School, I went to marketing school, and I feel that the reason Nigeria’s economy is not where it should be is because our marketing communications is not as strong as it should be. So what makes the marketing communications strong and therefore the opportunities for economy? I searched online to know where the revenue comes from in the service of new media. Where the likes of the Hollywood make their money from. What I discovered is that there are channels alternative to television, there are alternatives to radio with which a big brand like Aquafina can reach the consumer. So, how well we are able to perform today can actually determine the opportunity in new media space. So what I perceive in the new media space today are first, the content development, content generating space. So, the better writers we get, the better animators, video producers, graphic artists and so on, will determine how big the market can be in terms of how well it performs, how well it does in marketing and the business it can generate. And I also feel that we have a big opportunity because it is an enabler to the market. It is not a standalone. New media should not be selling itself. We use this new media to support other causes like Agriculture. I’m from Ekiti, in my grandfather’s farm we’ve got some beautiful specie of banana. It is through new media that the guys somewhere in New York can find that out and connect to invest on that farm. It is new media that allows us connect people from those two ends. So I feel that this enabler of communication is a huge potential market. Each time I travel between Abuja and Kaduna, and look at the hills and rocks, I see tourism and when I see tourism it becomes how we can exploit these potentials. So those are the opportunities that are standing. Because what new media does for us is cost. It helps us bring down the cost of marketing and also increases the speed. You can imagine, Adobe dropped Flash some days back. Remember the days when macromedia flash was the animation tool of choice? Media became so beautiful and rich and from a desk you could animate, create cartoons and do a lot more. A lot of opportunities exist but it’s the new media that can really help to bring out the latent value. So I just really believe it’s the future. I feel it is actually here now, so that means we need to develop our capacities to a point that we become maximally efficient.

The Octagon: Alright, so from this point on, whenever anybody is saying anything that you think you can add or you want to interject, please go ahead. So I’ll just jump off from what you said, which is the fact that we need to develop capacity. Are you trying to stay capacity is a hindrance? Can you give some clarity on that?

Lawal: So, I trained as a dentist. It’s funny how I got into all this. I personally had to go to Ojuelegba to buy books on marketing and books on advertising when I was in marketing school. The guy who runs the bookshop, knew me since I was in primary 2. So he could tell you when I crossed through all the classes. So he knew when I got to med school then started buying advertising books. He once asked me, did you drop out of medical school? I said I didn’t. I had to do a lot of self-study. But that’s not appropriate. The school of communication in Rhode Island in New York is a school that MTV, Universal Music and the likes visit for students to showcase their work and ideas. They pick students right there from design school or school of communication. Today, the system Nigeria has to grow this talent is University of Lagos School of Communication. The schools that exist to grow the talent for us, follow curriculums that have not been developed and updated for years. Mass Communication schools have PRA (Public Relations and Advertising), journalism and broadcast. This is how the school of communication is divided. So in their department that’s where the PR and advertising students learn. And then they have a Design School down the street. My point is, the curriculum today does not even match all of these beautiful things we are talking about. So that’s ideal if I’m going to start an advocacy, I’m going to call the professors of Mass Communication and say you are not building the future for us. You’re wasting resources here, the channel of growth for us is there but we are not growing the people to even take advantage of it. And what I feel might happen down the line is, there’s going to be a vacuum and people are going to come from outside and they’re going to take this space. And I feel that is the big danger now.

Laolu: So talking about people coming from outside, there’s something that just popped into my head. Apart from the fact that I’m more about, “let’s leave the government a bit”. I feel like they’ve put our problems on the government. A guy goes to a bar to drink, he doesn’t have money he’ll say “it’s Buhari”. I think we’ve put too much already on the government and that our major problem in Nigeria is an oath for citizenship, the government are really just from us so when we talk about these things the government is not taking charge of this. It first starts with us we’re not demanding for what we should demand for. But let me go on your point on people coming from outside. New media itself can be an advantage and a big disadvantage to the GDP of Nigeria or our economy. As a matter of fact, we’ve seen more of the disadvantages of new media. New media basically right now is digital media because as you rightly said it is the latest form of communication. So take the EPL for instance, before now, none of us were football fans of maybe Leeds, maybe the older generation we have the 3SCs, you have all of that. Now what New Media did is that is what they call globalization, it makes the world a flat place. And the implication of that is the people that have developed their content are now going to take the potential fan of 3SC or the guy that should have become a fan of Kano Pillars , that guy now becomes an Arsenal fan through new media, because Arsenal has developed its content. Our local league is also suffering because of New Media because now people have access that they didn’t have to foreign clubs. I don’t know how many MFM FC fans we have in here right now. But I know what’s going on in the transfer market of my club and it does not in any way affect my financial bottom line. It does not affect the financial bottom line of my country. As a matter of fact, I’m buying jerseys for them, I’m adding to their GDP via this new media. So I think that as a country, as a people, we need to start to develop, if we don’t develop this content somebody else will develop it and new media will take your money away from you and will give it somebody else by this same avenue.

Isioma: Going from your point, I think that you both are basically saying the same thing in different ways and let me explain that. You’re saying that we don’t have capacity, we don’t have enough content producers, or the infrastructure to create content. I agree. And you’re saying because we don’t have content, it’s basically flight. Nigerian money, the money that should be contributing to our GDP is flying. Now, I was at a graduation recently and it was at Sheffield, University of Sheffield, and I was at a graduation for the Engineering, Civil Engineering department. About 60% of the graduating class was Chinese. What does this say? There’s a deliberate Chinese policy because they know that the future is infrastructure, they are ensuring that their young graduates are being equipped with the requisite skills. So my point is there is a role for government to play in terms of creating policies that encourage students to go into particular fields because you want to develop the capacity of that area. So if I’m going back to your point, yes there’s a problem that our mass communication schools are not teaching digital media. If you go to foreign countries now, and you go to their marketing department about 50% of the courses now are some kind of social media, you have search engine optimization courses, short courses and they are pushing that agenda because they have recognized the value. We have not. But, I still think, going to your story about self-study, that is also in itself another opportunity because there’s also free information on digital media that Nigerians, because we are knowledge thirsty, can have access to and that is even what has driven the growth of digital media right now. So we are at a point where we now need to take the next step which is to actually have a strong national policy on media and communications just the way we’re having with agriculture and all other industries, or the general entertainment industry, or the general creative industries and try to drive and create capacity within that area. So that’s one point. When you look at digital media, it’s not just about media itself in terms of publishing, film, television, traditional media things but the fact that you can leverage other industries. I totally agree that tourism is a massive one. In Ireland they conducted a survey, when people come to Ireland they ask them why they came to Ireland. And 15% of the people that went to Ireland said it was because they had seen Ireland in a film or television show and therefore it created an interest in them wanting to go and see Ireland. Now Ireland has a strong co-production treaty. They have a lot of co-production treaties at the moment with other countries. So basically, it’s cheaper for you to shoot a film with an Irish producer between 2 countries than for you to just shoot it in your country, the same thing is being done in Canada as well. These are government policies that are designed to develop capacity in those areas. Some of the terms of these treaties could be, for instance, you have to employ a certain amount of Nigerians on these kind of projects. Ireland is not a typical film place, it’s not Hollywood, it’s not Bollywood but yet they are getting a lot of impact because they’ve understood that we are not ready but we are going to develop policy to help develop capacity in our country to make us ready for this onslaught. So there is a role and government cannot be left out in the conversation. There’s an interest from government in the entertainment industry right now. But the thing is, they need to identify who the experts are in this area. That is why these conversations are important and they can lead to deliberate policies that affect this area.

Laolu: I think the interest of the government in the entertainment industry is simply because the people in the entertainment industry have taken the bull by the horn and they right now cannot be ignored. I’m saying again that I’m not such a fan of the government, the government this, the government that. You know because I think sometimes when we discuss these matters it almost sounds as though the government is one body from Mars, but the government is actually you and I. I probably know somebody here that knows somebody that is in the government. They come from us, they are amongst us, they are one of us, and they are reflecting us in actual fact. And I tell people that the problem is they’ve been pointing to something that does not exist for a long time. We get this feeling of satisfaction when we say the government. That feeling is the feeling of “I’ve pushed the blame on someone else” and these guys are responsible for my inadequacy and just merely pushing it to the government gives you satisfaction. The ailment on your body is not gone but the fact that you said the government, everybody understands, well, it’s the government. When you talk about new media, I think the new media and the digital media is going to be driven mostly by the youth. But then again, you only need to go on social media to see what digital media is about as far as the youth are concerned. I was speaking with a friend just before the session began, I said listen, if you have an intellectual conversation on social media, and it is going to fly over the heads of people. But immediately you start to say stuff that doesn’t add anything to anybody’s bottom line, you have 355,000 likes. So you see that it’s the comedians that are beginning to gain the traction. I mean laughing is good business. I have no issues with laughing. My point is our government realizing that this is the kind of thing we like will go on air and start to sing and put out a track. They know that these are the kind of things that appeal to this people. Then yesterday they came up with a bill that says “not too young to run” and I imagine in my head that when they were passing that bill they were thinking “look at them, it would not make any difference because these guys are not even prepared”. They don’t have what it takes to take over or to do anything tangible. For new media, as far as they are concerned, they are the ones running it. I mean we should be excited about new media, it’s democratization of media so nobody has the power again to hold information. But guess what, instead of using it as a tool to do all of that, we’re goofing and we’re saying we’re not too young to run.

Ezegozie: Government will not do anything for us until we move first. That’s the truth. That’s worldwide. We need to create and initiate that approach first. For example, it’s for you to go and say, you know what, let me go and buy advertising marketing books to empower myself, the next person may do the same thing. That’s how we build it, that’s how we build capacity. It’s individual, it’s not government. There’s nothing they would do for us because they cannot help what they don’t understand. We’re talking about a generation that is trying to just understand the internet. You now want to introduce twitter, we’ve not got that one and then Instagram comes on top, then after that Snapchat, other media forms. These are just social media platforms, it’s not even the entire new media space. So now, how do we expect these people to do anything for us? They can’t. So we need to build capacity ourselves. Like you said new media now, we have access to sites like coursera.org. We can actually go up and sign up and take courses from around the world, any universities in the comfort of your living room. Once we have now built the capacity individually, entrepreneurs’ people who are actually building locally can emerge. If we want the money to stay here, we need to build it so that the money can be rotating. What’s happening now is people come, they’ll school abroad, they’ll stay abroad because the structure exists and is supporting them. Something like the co-production treaty Isioma mentioned. Nollywood films have been trying to push those things individually for years but the government don’t understand it and they cannot support what they do not understand. For instance our government can say if you want to shoot a film in Africa, come to Nigeria. We’ll give you tax subsidizations, just make sure you hire “x” number of Nigerians, and use a Nigerian crew. This brings money into the country while also building capacity because once they’ve been to a few different production scenes the same way they do in South Africa, they’ll build schools, they’ll build things that will now start to build capacity locally because it’s actually cheaper for them not just from the tax deductions but also the fact that they don’t need to fly people in. So now they can build everything locally. Most of our big award shows, crews are flown in 30, 40, 50 people from other countries to do work that needs to be done here because we don’t have the capacity to do it here. That’s the problem and the people we have need to do more to transfer their knowledge and so it’s all of us here, it’s everyone in this room. If we don’t transfer it, someone else will not grow. We need it build it now. We need to do it ourselves. Forget government, forget anything that has to do with government because they will take too long and by the time they catch up, the next new media form is already out there and what do we do at that point?

Lawal: I think here what we are trying to do is think about the big idea. We can say we are thinking for the country right now. And so for me, it’s important that we do it very systematically because whether we like or not, when we are doing our business analysis, test analysis, the first thing we will need is political and legal framework. The point I’m trying to make is I am a believer in a system that works and how we can fix things. So in terms of fixing things, in public health they say educating the masses is the simplest thing to do so. Because I can just go across the street and shout “Hello, the government of Lagos has announced that there’s a new diarrhea disease in town, three local governments are affected, please do XYZ and you can be protected and if you see ABC, report to me”. By the way that’s a true story. So, you can understand that this is very easy to do. The toughest thing to do is shifting policies to support this but it is the most effective thing to do. This is a big conversation table, all the options we gave are easy to do. I can start a media school tomorrow. What I need to do is get a group of good friends, get good financing and then I’ve started a new school. But we have tons and tons of universities in Nigeria today, the hardest work to do is penetrating those systems to perform. That’s the creative work. It is the work even we must not run from. And that is my own opinion. That it is there, we must do what we need to do to get our school of communique, school of design, school of media to perform. Its hard work, it would mean partnership with those universities who may say no if you approach. Do you want to build a university? It’s a lot of money, but if you partner with a university you are already penetrating an existing system and we can achieve a lot more. That’s my concern about the skill gap because at the end of the day if we still continue to hire foreigners, it is still about the GDP. Every time that I look out, I see young men pushing water on the street, I just imagine in my head this guy could be a surgeon. But who captures his capacity on the street, what framework does Nigeria have for Nigerians as a country to put things together. It could be private sector led, it could be public sector led but it must be systematic. It cannot just be something happening on the side. The story of my organization, Ebola Alert, is that when Ebola happened in Nigeria, a lot of people did stuff, but we integrated with the system. Today we have an opportunity of shaping how diseases are being communicated in Lagos and across mediums in the whole of Nigeria because we worked with the system. If you work outside, it’s all well and good, but how sustainable is working outside? That’s why when you look at some of the major grounds in this work, they don’t deal with people that are just working, no, and they will have to impact the public sector. That is the real mandate that people should have expectations of. Nobody has expectations of me, but they have an expectation of their governor. Even if the governor does not perform today they know that tomorrow (I’m using the example of Lagos State governor) he’ll perform.

Isioma: I just wanted to say that that’s exactly the point I’ve been trying to make. See I’m all for private sector and I’m all for us building and going forward and not waiting for government but in reality, when I started this conversation I said: digital media will reach its capacity as a contributor to the GDP when you’re able to generate the maximum revenue that you can from digital media. And you can only do that with proper infrastructure there’s no two ways about it and like he explained, the government is an integral part of that structure.

Laolu: I don’t totally agree.

Isioma: No you don’t have to agree but it’s the fact. It is the painful fact. When the government decides to be intentional…

Laolu: Are you saying you can change culture with policy? You can’t change culture with policy. You’ll try. People are trying to change culture and there are things that are fundamentally cultural issues. The Oba is likely going to have a better positioning changing the perspective of the people than the government.

Isioma: But the government is not just the Presidency and the Senate. The government is also your local government. So when you have a policy even if it is generated at the House of Reps or at the Senate, there’s a systematic way it trickles down to the people. I think the mistake is that we’re thinking about the government as the president, No! The Government is the entire governmental structure. Which has the president, the ministers, the Senate, the house of reps, the state governments and the local government, it’s an entire structure and policies can be intentional and trickle down through that system.

Laolu: Do you know what OloriSupergirl earned last year?

Isioma: I don’t know what she earned. But it’s not about what she earned as an individual. You affect the GDP when you have a lot of people earning a significant amount of money, then you have a GDP contribution. Not a Linda Ikeji sole person and not an OloriSupergirl sole person. We’re talking about a global thing and not about individuals.

Laolu: Global comes from the individual, global does not just appear.

Isioma: Nobody said global just appears but if we want to talk about the industry we must talk about structure.

Laolu: But we must know what she earns, and what he earns and what they earn. But unfortunately, they are not going to talk about monthly earn because of our culture. But I’m saying that global is just a word. Meaning that its individuals that come together to form global. Let’s break it down. I don’t know how many businesses failed last year, nobody is likely ever going to know how many did last year in Nigeria. So as long as you cannot even tell your friend that you had a CS, if your mother catches you you’re done. You can’t say this is the number of CS you’ve had. There’s no policy any government wants to make that will change that culture.

Isioma: There is, and I’ll explain my point with a simple example. If we’re looking at digital media and we are saying this is an industry, and we want to capture this industry and know its capacity and we create a simple policy that might have to do with taxation or something like that, you’ll find out how much people are earning if you tax them. You have to. If you’re going to have tax paid. I do a lot of work with film. And this is one of the issues I’ve always had with film practitioners. I tell them, you don’t want proper businesses but you want the government to support you. In other countries, I can capture how a policy is working if for instance you do a production and I know how much the budget for the film was, I know how much all the people on the set were paid, if you are getting a tax break it will be based on those numbers. Now if you have a government policy that gives you tax breaks in Nigeria, people will come and submit their figures. Whether the figures will be 100 per cent accurate is a totally different conversation, but at least we have something. So I don’t agree that we’ll forever be in this shrouded cloud of mystery because it’s our culture that we don’t like sharing information. That’s a serious point for me.

The Octagon: One of the things I’ve heard come up here is that there isn’t any data to support anything right? How do we ensure we have data? Because even though it seems as though you guys are coming from opposite sides, it really is based on the fact that there’s no data at all. So my question would be– Are there ways that we can ensure and drive gathering of data?

Laolu: There’s hope, and hope never goes into recession. The reason we are still smiling is because hope never goes into recession.

But this our attitude, I meet people that keep saying that we have to talk about the citizens. Let’s leave the government out of it, let’s leave them for a while and let’s talk about us. Imagine the floods that happened, they turned it into mainland versus island issue and it was fun. And I read all that was said and I’m like, this is the best way we could actually capture it on digital media. And I’m like, nobody knows the depth of the rain, and at what depth can we not take it anymore and what we can do? If you go to Oceanography, it’s another infrastructure to siphon money. And the citizens are having a laugh and enjoying it. And I said, when this floods go and the conversation about the flood stops, then we have a big problem and it’s a citizen problem. Because we had something like this six years ago and immediately the flood stopped, the conversation ended. So I say it’s not the government but the people who are not ready to take their destiny into their hands but are willing to just live whatever will be will be and who ever can get to Canada, goes to Canada. So let’s leave the government alone and just talk about us.

Ezegozie: We are here to find the way forward, what is the solution? How do we as individuals create solutions to these problems? For me it’s two direct things and one is education. When we talk about tax breaks, are we sure everybody in this room understands what a tax break is? So it comes back to education and the fact that it’s each of our responsibility to educate those around us to understand why we need data, why we need to focus on these issues and why we should not let go of the issues when it passes because that’s why Nigeria is in the same place now because you deal with issues when it’s in front of you. The moment it’s not there you forget about it because there’s some other things in front and too many problems to face. So if we want to start solving these problems and following them up we need to educate people.

Secondly, I believe that as much as people are against centralizing these things, you mentioned data, yes we need it. But how do we get people to submit data that they do not want to submit? Where it is culture and/or lack of education, how do we get them to actually submit the data so that we can have a larger conversation on a national and African level as well as a global level? We can’t do anything without data. I give Universal as a perfect example. Universal has wanted to come to Nigeria properly for a long time. But there has been no data to support why Universal should invest in Nigeria’s music industry. So if you ask artistes how much they are making from one CD, they’ll not say instead they’ll inflate it just to make Africa’s Forbes top entertainers list when half of them should not even be there and the other half that are richer will not even give us the data. So yes, part of it is government policy but it’s also left for us to educate each other on why we need these data, and how it would not just impact you as an individual but the community as well. So we need to figure out what is the solution? How do we individually create ways and systems that will get this information that we need.

Lawal: When I was in school, I had the opportunity of interning with a Centre in the US, they were dealing in building a platform for health IT in the US, and it was purely government funded. And the reason they made it government funded I guess, is also because it reduces the cost for the citizens, but the private sector wanted a part of that deal. Recently I was opportune to run a research Centre in the University of Lagos with a private sector funding. I called some of the faculties and asked how we could work together? My goal was to see how we could make money from the knowledge economy. I found out that in a certain faculty, 65 faculty members published 67 papers in 365 days. That means that in one year, not less than one lecturer published a paper. You see the data we are looking for is out there. And the process of collecting data is open knowledge, it’s no more advanced now but the work of getting it done is probably what is missing. I think one of the places we can start from, which I believe is one of the low hanging opportunity which was part of what we did two years ago. We did what we called hand washing in marketplace and we went across Lagos to collect data on the use of toilets in Lagos. Was there water, a sink, do they have soil? And we collected the data across Lagos, and then filled it and concluded that in order to improve on the data output. If you look at Nielson, I don’t know where he got the data but for the likes of Nielson it’s intense work. Sometimes, I wonder what the incentive is for people just sitting down and collecting consumer data on use of hotels, the use of photography, or how many GB of data have been uploaded on YouTube this year. You’ll be wondering what the use of that data is. But those are the low hanging opportunities to start from. I met a group of ladies during the week, they use young girls, train them and get them to collect data on different issues. It is private sector led and there has to be commission. You need a lot of workers to go there. Data collection or data science is an open knowledge based you mentioned Coursera, I think guys can look it up, go on Coursera, learn about data science or even start basic understanding of recent methodology. I think those are things you can do. This meeting we have here is an opportunity for research. It is an opportunity for a group of people already in new media who can run samples of these issues. There’s something we call innovation diffusion period. When the first silicon chip was being built in Silicon Valley, it was not of interest to any human selling market anywhere in the US. Innovation does not get to the last man first, and as an innovator that’s the way you build. You don’t build with the mind-set that everyone is going to jump at you, it is your responsibility, and that’s the game. If you have smart content developers, they will sell this stories and people will buy. You see what I do with Ebola Alert is that I go to places, because health is not an issue in Nigeria. I was working in Nigerian Centre for Disease Control and I know when meningitis started in Nigeria last year. I know when it became an issue in Nigeria. It took about 3 months, people were not talking until people were just dying. So what I do every day of my life is that I wake up every morning and try to make the issue of health something people will move towards and make sense of. It is hard. The day it works I’m going to be a billionaire in dollars. It’s my business. It’s my headache to penetrate the university system, work with the government, learn, and go to school. People ask me how are you dealing with government, go to school and learn this thing better, it’s a new idea. My point is, what we are talking about we call it reciprocation. One person makes government but government began in government, but it’s also run by individuals, that’s social science. What I want people to understand is we that can solve this problem and there are methods to solve this problem. We’re here to learn, people just need to identify where these knowledge systems are. You go pick yours, and run with it. Data is tough, even in the US, it’s not something you easily find. So we need to be active about our own, how can you start? You are a young person and you’ve heard about it now. Data is a big problem in Nigeria, go out there. If you’ve not gone to the university, this is the time to go and study Math and statistics in the university. Pick up python, pick up R’s, start learning all those coding languages because these are the tools that are used to improve data all over the world today.

Laolu: The problem is not python and all of that because before those guys are done those things might have become obsolete but I hear you. I think the solution is actually about peer to peer sensitization. We should begin to leave the government out of it for now and we need to start with ourselves. We need those guys that are visible on the new media to start to put their weight on the ground and then get somethings out there because government is not going to do that for us. I mean we talked about Ebola. Ebola control was successful in Nigeria because it was a matter of life and death and it’s a cultural thing too, we don’t play with death. And even a Yoruba adage says “When we fight, there’s a limit; when death shows up, everybody is at peace”. I’m saying that arresting the spread Ebola was successful as a campaign, because it involved death and anybody will listen to you at that point. Immediately it left go and check the guys selling hand sanitizers, a lot of them began to sell other things. So what am saying is that we need to start to talk to each other. We need to start to change the way we see things, we need to stop liking some posts on social media so that people will begin to realize that this is the new media and realize what is important. That we can’t just put garbage out there and get retweets. I’m saying that the only way we can change culture is to begin to create interaction, it cannot be policy. In other words, I’m saying that we need to start within ourselves. Allowing what is good and what is right and disapproving of what is not good. What is not good is not good regardless of the time zone you are in. As long as people begin to say no, and we say this is Nigeria and anything goes. We say it and we go to the filling station to buy fuel and I say to the attendant I need a receipt and the attendant asks me how much do I write on the receipt. You need to immediately rebuke that behavior. You ask back what do you mean how much should I write on the receipt, how much fuel did I buy? And I found that we let these opportunities pass and we are saying the government needs to fix it. The government cannot fix it, the government comes from you and I. When you go into politics and you make money, your mother does not ask you where you made the money from and we say it’s the government. It’s not the government, it’s you and I. Gone are the days when you make money your parents call you and ask you where did you make this money from? Today you ride a Range Rover you put it on social media and everybody is happy for you. Nobody is asking questions anymore. So it is us because the senators that goes and started dancing on social media had likes, people put it there. In other words, we validated it by our likes and attention.

Isioma: You people are diverting a little bit.

Laolu: No! It is important that this is said because we put out culture on new media. Now this culture which should be making us money is actually eroding our revenue and we cannot say that this is what we have added to the GDP from Twitter last year and we cannot say that from Instagram, this is the number of businesses, this is what they sold and this is what they made. We cannot say some of those easy things partly because of our culture, the secretive nature of our culture. So some of those cultural issues we can only attend to on peer to peer level. I’m saying that the government cannot change it. So we need to start, you and I need to take a position and then we decide what we want to do and spread the message amongst our network.

Ezegozie: With every good, there’s bad. We can focus on the bad, but the fact is that it is actually each of our responsibility as well as this conference as well to say you know what? In addition to entertainment news expose, let’s also focus on the hard issues. We easily share, tweet, repost the soft issues that make us forget about the main issue. So it becomes a responsibility. So it’s platforms like the Octagon Room for example that have conversations about real hard topics but you’ll not see them on the platforms they should be on because people don’t want to talk about those things.  So you’re right, it’s sensitization in terms of peer to peer. So we need to start, we’re doing the same thing the government is doing, we’re having a conversation. But how do we actively now say, you know what, alongside every five posts that OloriSupergirl puts out on entertainment content, let’s put out two or three of our health issues, education, things that begin to put those issues on the fore front, that’s from a small business level. Now individual level as well we need to do the same thing. It’s beyond education. It’s about letting people know that these issues are just as important as the other. And you’re right, it’s not just eroding Nigeria, it’s a global issue. We now need to focus on the right things. That’s the only way it can change. So now digital media, all of us can sit here and attest to how digital media has allowed us to grow. It may have taken away, but it has added more than it has taken away, that’s the reason we have this conference. So it’s now to take that platform and begin to push individual, deliberate agendas around digital media. How do we empower people? How do we stay in the labor world now? Let’s bring them together? We need to have those conversations, because we can have these conversations for the next six to eight hours but it will continue.

We need to say what is the solution? Now what I will do as well is put everyone on the spot. Individually, figure out a way before this session ends, how we can individually find a way to empower people within the new media space. I’ll say now as we are setting up, let’s bring in people, let’s go to universities, let’s find people that are ready to intern, ready to work, and ready to learn in the space. Let’s talk to OloriSupergirl and say, you know what, as we are training them, let’s put them under your care as well. Let them learn part of the business they want to learn, let them grow as individuals. Those are things that we can individually say, you know what, this is what we want to do, and everyone can do the same thing. So we need to take the responsibility ourselves. Forget government, government will not do anything until we do it. We have to reach performance. At least it gets to the point like in the entertainment industry when Wizkid is doing this and doing that, now they’re taking interest because someone outside has said something. Not because they did the work they needed to do here. One of our ministers said that if they did not put the policy of 90% of Nigerian music on radio, that today there will be no P Square. It’s not about that. The policy happened because music was being created. Because they saw that, you know what? This is a good product. So in order to make myself look good, let me put this policy in place. That’s how that change came. It’s not an individual. We as a leadership made that happen. And it starts with an individual.

Isioma: I am very aware of the cultural issues. It was supposed to be about these are the things we need to do to move us forward. These are the kind of policies, or best practice things that we need to be doing to move us forward. I now went and started doing all this research about what have you done in this country and I came here and the whole conversation is about how we have been posting funny stuff, and we’re not been serious. I get that but like Ezegozie said that’s a non-conversation, like this is the real conversation. And one of the things I want you to talk about is the fact that there’s a copyright bill that has been pending since 2015 at the national assembly. And this bill will directly affect digital media because one of the sections of this proposed bill is saying there might be a responsibility on ISP (internet service providers) that if someone on their ISP, for instance if I’m using Smile and I’m a content owner and I’m able to show or prove that someone using Smile internet is consuming my content illegally without paying that the ISP then has the responsibility to send a demand notice to this user to stop them from doing that. That’s a very big deal for digital media. So those are the conversations, and this bill has been at the house since 2015. But the point is that that’s why we’re having this conversation. How many people even knew that the bill was there? How many even knew what the sections of the bill was? In America you have Digital Millennium Act, they passed this in 1998. What this Act does is it regulates digital distribution, how content can be used. And these are the type of policies and laws that will need to passed in Nigeria for us to be able to make maximum revenue. Whether you like it or not, you can do whatever you want as an individual. But for you to reach your maximum capacity to reach the maximum account and number of people to grow the industry, you need to have proper policies. Everyone go and read the copyright bill 2015 online. Break it apart, I think there are things that are a little sketchy and let’s talk about those conversations and let’s do a social media drive to get this bill to pass. These are the type of things we need.

The Octagon: Alright thank you very much. Let’s put our hands together for our panelists.

 

 

What is a recession and is there way out?

Posted on: February 6th, 2017 by The Moderator 3 Comments

The Octagon: Welcome to the Octagon Room. Thank you for accepting our invitation. Let’s begin with some introductions before going into the discussion. Can everyone let us know who they are and share a bit about what they do ?

Gbane: I am Ojogbane Okolo. I live in Liverpool England, and I work in the Banking Industry.

Muyiwa: Hi all,  my name is Muyiwa Oni,  I’m an equity research analyst with standard bank

Seju: Hello everyone, Seju Mike – Financial Analyst & Creative Entrepreneur.

Seun: I am Oluseun Onigbinde, Lead Partner, BudgIT.

Wilson: My name is Wilson Erumebor – Economist. Research & Policy Analyst. I work with Nigerian Economic Summit Group.

Rijo: My name is Rijo Shekari, chartered accountant and financial analyst

Tola: I am Tola Onayemi, I provide technical advisory assistance on industry, trade and investment within the economic team of the Vice President

The Octagon : In september 2016 the National Bureau of Statistics (NBS) reported that the nation was still firmly gripped by recession. It published that in the last Gross Domestic Product (GDP) report for Q3, 2016  Nigeria’s GDP contracted in the negative in third quarter of 2016. In response to this, the Minister of Finance, Mrs. Kemi Adeosun, on Wednesday admitted that Nigeria was in its worst possible time with the GDP but went ahead to say there is a strategic plan that will take us out of the recession and make it as short as possible.

The president in his independence day speech further shared with the general public the challenges saying. “Economies behaviour is cyclical. All countries face ups and downs. Our own recession has been brought about by a critical shortage of foreign exchange. Oil price dropped from an average of hundred USD per barrel over the last decade to an average of forty USD per barrel this year and last… But this is only temporary. Historically about half our dollar export earnings go to importation of petroleum and food products! Nothing was saved for the rainy days during the periods of prosperity. We are now reaping the whirlwinds of corruption, recklessness and impunity.”

In line with earlier claims by the minister of finance, he goes on further to mention that plans are being made to diversify the economy and shift from a dependence on oil and also focus on developing infrastructure.

With seemingly no visible change in sight, the average Nigerian has gotten increasingly panicky and wonders if government can truly handle this challenge.The former CBN Governor Lamido Sanusi in a session today stated the recent moves by Government to salvage the situation was a wrong move. He says that borrowing was bad because Nigeria’s foreign exchange rates lacked credibility and the federal government should embrace private sector investments as a way out of its recession.The monarch said oil revenue cannot bring the country out of its present economic downturn.

What does it truly mean when we say Nigeria is in recession? How much of this problem is oil based? Is the way out of this the solely the responsibility of the government?

Gbane : Well as defined by in your quote from the NBS recession is two consecutive quarters of economic contraction. Now the main metric of economic growth is the GDP which is the measure of the value of all goods and services in country ( Nigerian this case) within a given time frame. From all the news and facts on ground I can say that Nigeria is in recession.

Rijo: Recession has to do with a decline in economic activities, with symptoms ranging from increase in the rate of inflation, businesses closing.

Wilson: A few years ago, the Nigerian economy grew by about 7% per annum and many believed this growth was “jobless growth” and non-inclusive. This year we are experiencing negative growth rates. If at 7%, growth seemed to be “jobless growth”, what happens we experience negative growth? For me, recession means that the life of the average Nigerian has become a bit tougher than it was last year.

Gbane: Wilson, you are absolutely right, and there are grounds for the belief that our 7% growth was  a jobless growth. it is simply because it driven mainly by the price of crude oil. we all know that the oil exploration industry is not labour intensive and as such not a big employer of labour so while the value of a high price of crude oil meant a higher GDP it did not translate to high employment. In answering the 2nd question, I will say that Oil has a lot but not everything to do with it. You see we had low oil prices under Obasanjo but we didn’t have a recession under him…i personally believe that the reason for that was the liberalization of the telecom sector among other steps taken back then. We what we see now as stated by many people is a statist approach to the economic headwinds caused by low crude oil price. We sadly have a president that does not believe in free markets and we have a CBN governor ready to kowtow.

Seju: No I don’t believe deliverance from the recession is the sole responsibility of the government.  The government is just one piece of the collective puzzle. In my opinion recovery is primarily driven by entrepreneurial responses to the change in the availability of capital. People and businesses need to innovate and find more creative ways to manage the now even scarcer resources.

Muyiwa: Oil is clearly a big part of the problem given that it is a key FX contributor. In terms of the role of government ill say it is critical.

Wilson: How much of this problem is oil based? Well, the recent economic crisis has made it clear that the fundamental strength of the economy or the lack of it, hinges on movement of crude oil price. The decline in crude oil price affected government revenues which limited the ability government to meet its financial obligations (including payment of salaries). It triggered an FX crisis, arising from limited dollar inflows, lower external reserves and huge outflows via imports. I do not think crude oil is the problem. It is our over-reliance on crude oil for revenue and FX that is the problem. Secondly, Nigeria has a weak productive sector. The manufacturing sector currently accounts for 9% of GDP and this has to be improved. We currently import of 50% of manufactured and processed goods while non-oil export accounts for less than 20% of export earnings. Nigeria’s low non-oil export capacity and continued dependence on imports was never going to be sustainable for the economy. So if you look at the Kenya economy,  the level of FX reserves and import cover has historical been materially lower than ours  but they have managed to keep the currency relatively stable. The central bank has been able to maintain credibility and keep investors interested in the economy.

Seju: Yes Oil is a major part of the problem. Relying primarily on one major export is ALWAYS a problem in the long run for any countries economic growth. Diversification as a key infusion into Nigeria’s export culture is the ultimate key. For example some of Nigeria’s most successful exports in recent times have originated in our creative spaces – retargeting our resources to building these businesses in these spaces and focusing on increased consumption of home grown goods by improving the infrastructure that allows us produce said goods (thereby also improving the quality of said goods)…this is a possible path to recovery.

Gbane: The way out for me is Government first and foremost realising that a statist approach to economics has always led to ruins. We need people who can influence the president and make him a believer in market economics. (Ok less jargon) – The Govt should simply make being an entrepreneur as easy as possible: A few steps will be to:

  1. stop trying to reduce prices of goods and services by fiat as it is being mooted and done at the moment(we shouldn’t even be having this conversation).
  2. Improve the easy of setting up a business(it takes about 3-10 mins to register a company here in the uk).
  3. We currently have a FX regime that has 5 different exchanges and SLS mentioned this as well. A foreign investor will find it difficult to invest his/her hard earned currency when there is a CBN rate, there is an interbank rate there is parallel market rate and to be fair this has always been the case, it didn’t start with this government. We need one exchange rate that inspire the confidence in all the market players. Now the Naira might suffer a sharp downward pressure but eventually things will stabilize. I also appreciate that it not palatable politically but it has to be done.

Seun: These are my thoughts –

  1. Over-dependence on oil revenues will keep putting us in recession. Our history of boom and bust since 1973 has always been linked to oil. From boom of 1973, oil bust in 1981 & 86, rise in 1991 and so on. We will continue this cycle until our exports are diversified and we fix our revenue challenge linked to inability to take taxes off a huge population (highly poor).
  1. Lack of fiscal buffers: oil price surge has always tricked Nigeria and our leaders fall for it with Udoji bazar, 2010 salary increase.. our ability not to rein on our import volumes during price booms, continually depleted our reserves. We just don’t save.
  1. Lack of focus: immediately, Buhari won, there was a market bounce. It was an expectation but delaying Ministers by six months did not show captive understanding of the emergency. Confidence was eroded. We still don’t have a clear cut stimulus plan.
  1. Interference with CBN: we all knew the path of Emefile to the CBN. A compromise after whistle blowing by Lamido Sanusi. Buhari “command and control” approach accelerated Nigeria’s run into recession. If he was more open in the early days to devaluation, we might not face our current FX woes.
  1. In 2015, Nigeria did not spend on capital projects, shutting off public contracting for one year. Jonathan was caught up in elections and Buhari had wasted six months to shopping for Ministers. In a country where public finance matters, that put critical sectors in recessions.

Tola: I’d answer in series of points. So that some things I intend to point out are clear.

  1. Technically, a recession is two consecutive negative growth trend in a country’s economy
  1. The figures by the NBS confirm we are in a recession
  1. We should pay mind to the latest Q3 2017 NBS statistics that point out that the non oil economy is out of a recession and at 0.3% growth. Solid minerals grew to 5% and agriculture to 7%.
  1. According to Q3 NBS figures, financial sector also grew by 2.85%. Inflation though still high at 18.3% on a year on year basis levelled out on a month on month basis to as low as 1.70% in September. Ratio of investment to GDP also improved rising by 7.6%
  2. There is a major difference between a recession and a cash (or credit crunch). Both are currently going on within the Nigerian economy and people are mixing the effects. A recession is negative growth, a cash crunch is not enough money to meet all operational needs. Now, the oil price means reduced income for government who is a major spender both for employment and even general spending within the economy. So because government isn’t spending as much not as much trickling down is occuring, and everyone says recession but it’s mostly just reduced government spending leading to less money for people who depend on it in the long term

Wilson: Getting out of recession is a collective responsibility, but I strongly believe that the government must play the important role of providing a clear direction for the economy in terms of policies, plans and programs. We must rejig investor’s confidence (local and foreign) on the economy

The Octagon: Based on your comments , What other things affect this asides oil and how free markets assist in solving this.

Tola: How much is this oil based? Well as a major oil revenue earner, oil price decline was the trigger of an even more incipient problem -that of non diversification. However, oil is as much the cause as one can say sugar causes diabetes. In that while type 2 diabetes is mostly hereditary, sugar can lead to weigh gain and increase chances of developing the disease. Oil is Nigeria’s main revenue and when there is no oil capital, and little diversification, a negative growth in the economy is the most natural. Is getting out of a recession mainly the responsibility of the government. Well, No, that’s why the l stated the Q3 NBS stats first, which should the non oil sector was technically not in a recession, mainly because of a joint effort of government and private enterprise.

Gbane: Right, it is the approach of the current govt that has not helped for example when you create a distortion in the Forex market by offering a select few players in the private sector $1=199 while the street value or black market value is twice that amount..you are already creating and uneven playing field to smes that need access to this funds. We all know that smes are the life of any serious economy…in the uk for example we have about 300k smes that hire about 5-20 people..just do the math and you will see what i mean. Also when people are able to make 100% profit by arbitrage they are not going to be incentivized to use the funds for productive purposes.

The Government has to lead the way. The Government has to deliberately put in place polices that will encourage people to produce more. we are not seeing that at the moment, even if the non oil sector is out recession the question is how can it be encouraged to grow.

Tola: Now, both are triggered by the decline in oil prices which reduced government revenue. But because a recession has a bigger global implication, govt tend to invest more in sorting out – hence devoting more resources towards such efforts, and even spending less as it would in its normal course do spending. Now, for the man on the street, the immediate effect He feels is a cash crunch. It’s a cycle of trickle down cash inadequacy (coined term). The contractor doesn’t get a contract, and doesn’t employ the labourer, who doesn’t eat food on site, which means that the food seller doesn’t sell, and doesn’t buy a bag of rice, and means the rice importer has so much rice not sold. So it’s a chain, all everyone knows is it’s hard. The cause here is mainly the cash crunch not really the immediate recessionary effects of negative growth. So both are connected, but the immediate impact felt by a everyday persons is that of a cash crunch.

I totally agree. Govt has a vital role to play but the private sector has an even bigger role.

Wilson: Absolutely. The 2016Q3 GDP data showed that compared to 2016Q2, the economy grew by 9%. This suggest that on a quarterly basis, activities improved significantly. At least, that is what the data shows.

Tola: Now let me be controversial, and say a very unpopular opinion. The truth is most businesses in the private sector are scarce to invest because in the past, we have benefitted from very simplistic business profit systems. Banks do not do any real intermediating for SMEs but focus on guaranteed business. People who focus on doing government contracts rather than real credible mass manufacturing. Just plain easy business with large Return on investments.

I say this because even for foreign investments, this is one of the best times to come in. If you really want to invest in infrastructure or expensive investment, because of the currency issues, you are paying half the price because of FX advantages (for a foreign business). But most of the foreign investments that have come to Nigeria in the past are majorly focused around not long term sustainable growth but quick ROI and exit. That’s why capital flight was so easy as the earliest signs of trouble. We can’t continue as an economy this way. We need deepened investments in real sectors. Agribusinesses, telecoms, mining, manufacturing, ICT. Deepened investment that creates real value and adds back to the economic growth. I strongly think that we need to start to think of nationalism as a core value for our business. Can we move past just plain profit to actually investing in Nigeria’s potential.

Wilson: But you would agree with me that the government (working with private sector) must take the lead and set the direction for the economy. Private sector investments is all about cost, benefits and risks. If the environment makes it risky for businesses to survive, why would people invest? The government should not leave economic planning in the hands of the private sector but the government MUST take the lead, working with the private sector.

Gbane: With all due respect sir as a foreign investor I will not come into a country that has multiple exchange rates. A country where the presidents view and CBN governor’s seem to be almost the same which is control so the sake of it. why should i invest my hard earned money when CBN is going to determine how much the value of currency is?

Tola: Well, that only applies if you are a portfolio investor. But if it’s direct investment in say a factory or a plant – this are usually investment s that take between 5 to 10 years and many times even more. The FX plays to your benefit actually, because you have double the currently strength in Nigeria presently.

Wilson: Look at ease of doing business ranking. Nigeria is not doing well at all. Why can’t we simplify the business processes, make it easy for people to start businesses, register property, reduce tax bottlenecks and so many other reforms?

Tola: I totally agree with you. I am always first to say Government has a great work to do. Communicating better. Predictable policy. Frameworks that work etc. But I’m saying even the measures put in place would crash if no support accompanies it. We had years of an oil boom, and when we all claim Nigeria was the next China. How much of other sector growth happened during that time? Was it commensurate to what other similar economies got?

Rijo: Private sector has a major role to play but the government must create an enabling environment, on devoid of too much and unnecessary uncertainty.

Gbane: Let me just use ICT for example. If not for the outcry on social media Nigerians would have been paying more to access data today. This Government seems to fixated on price pegging. This is dangerous on the long run sir. in Agriculture, Forex ICT in all these sectors you hear Government officials talk about pricing. The NCC has no business determining pricing. it is to regulate quality of service and breach of contracts.

Tola: I agree. And from the statements of the entire government. It is a priority. The president approved the establishment of a presidential enabling business environment council (PEBEC) all focus on the ease of doing business. But let me point out, that the world bank ranking indicators aren’t entirely skewed to reflect every issue a Nigerian SMEs faces. Hence the govt has stated that its  focus on serious business ease. So for instance, even the world bank recognised improvements in the CAC system for registering companies and even generally electronic payment to government as well as reduction in costs, as well as even the collateral registry.

Seju: True but part of the problem with foreign investment is the monies aren’t primarily directed to production. Investors come in with the intention of accessing our markets. They import and we spend and this only exacerbates the FX problem.  Not enough foreign investment is spent on putting in place sustainable production infrastructure. Let’s produce the same goofs they would like us to buy and then levarage the experience learning from them to start creating our own brands that can compete on the international scene. China did this…we can too.

Tola: I couldn’t agree more. Which is why private sector who are usually the counterparts to this transaction types must begin to help play their bit by focusing on such value chain that pays the country in the long term.

Gbane: No sir. In investments price of purchase is everything…why should one pay 50% more due to distortions in the Forex that is avoidable. The fact that is long is the more reason why I wont invest, and thats why like you said earlier all we have in as foreign investors are speculators. But the Government that must lead the way has shown that they can be trusted for long term plan. Let me give you an example: live in England and many large companies and banks(I work with one of them) are angry with the uncertainty over direction of brexit talks.

Tola: Like I said previously, that’s a portfolio investment type scenario. Let me use clear examples to Marshall my point. If you want to build a 100 billion naira factory today in Nigeria, that is an FDI investment. If you are a foreign company, that means that due when you would have spent about 500 million dollars some 18 months back. Today you would need about 208 million dollars. THAT PAYS another foreign investor. So you actually pay less in dollars if you are a foreign direct investor.

Gbane: Look..maybe due to the number of my years of living here I have become a bit of a cynic, but if we want to become like China we are going to have to make things a whole lot simpler for EVERYBODY not just Dangote. If we want to unleash the animal spirit of entrepreneurship in Nigerians SIMPLY make registration easier, Digitize taxation and create a one stop shop for SME Funding. see if we will not grow in leaps and bounds!

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Octagon Survey Results – Starting a Business Partnershp

Posted on: November 8th, 2016 by The Moderator No Comments

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Our previous survey on partnerships give a picture of how businesses are gradually evolving in Nigeria. 138 people took part in the survey with 113 males and 26 females. The greatest number came in from those in the age group of 30 – 35 years and the lowest 50 – 60 years.

In this survey, we asked our participants if they would warm up to the idea of partnerships in business. 118 people said yes and 20 said no.

It is interesting to note that even though 62% said they have had bad experiences with partnerships in the past, over 85% still confirm that they warm up to the idea of partnerships. Other results in relation to choosing a partner suggest that this might mean that we attribute failure of partnerships to the character of people versus the business idea. Since 3/4 of our poll group are between the ages 20-35 and have been in business for only 0-5 years this suggests that most small business owners are continually open to collaborations even though they get increasingly cautious.

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The following results showed the percentage of key determining factors when choosing a business partner; 45% said values, 16% Business Development, Finance 14%, Creativity 12%, Management 5%, Marketing 2%, Logistics 1%, Technology 1%, Other 1%, Connection 1%, Friendship 1%.

76% of the participants said they would discuss long-term goals with their partner before commencing any sort of partnership, compared to the 24% who would discuss long-term goals after commencing partnership.

In this survey, we see 61% of participants saying the deal breaker for closing in on a partner would be lack of trustworthiness, 15% said lack of vision, 8% said incompetent execution, 7% for poor relationship skills, 5% for pride, 3% for lack of knowledge and 1% for family.

When asked which they would rather go for, 57% said investment, 30% would go for partnership, 12% for acquisition and 1% said none. This might suggest that more people consider that business financing is what they need rather than having another person/persons on board.

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How much equity would they give to investors and do they understand that this in itself is a form of partnership?

When it comes to partnership, there is always more than two or more people involved. 68% said they would be comfortable partnering with two people, 17% said three works for them, 13% stuck with one, 11% said 4 is a comfortable number for them while 9% said five and just 1% said 10.

The feedback on this question was a bit surprising to us. Until a few hours before compiling results, the role of COO was the most preferred option. How is it that people who are over 75% cautious of going into partnerships are not willing to jump at the opportunity of taking the role that gives the company direction.

Among the 139 participants, 97% (135) said they would have clearly laid out roles before starting a partnership compared to the 3% (4). Among the following roles, 35% said they would most likely be comfortable taking CEO (Chief Executive Officer), 33% said COO (Chief Operations Officer), 13% said Board Member, 12% said Team Member, 5% said CTO (Chief Technical Officer), 1% said CMO (Chief Marketing Officer) and the remaining 1% said CFO (Chief Financial Officer).

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The question we might also need to answer is, are more people running away from the hectic responsibility of steering a small business in todays economy? The above shows that a total of 45% are more concerned with the day to day operations of the business.

When asked what they would consider as top most for success in partnerships, 50% said trust, 19% said they consider vision as the top most, another 16% said passion, 8% said values, 4% said respect, 2% said relationship and 1% said knowledge.

If a partner acts unethical, how would you handle it? 64% of the participants said they would simply speak to their partner, 20% said they would go legal, 7% said they would seek the counsel of a mutual friend, 7% said they would work towards replacing them, and 1% said they would walk away. None of our participants considered reciprocating with an unethical act.

37% of the participants would approach a partnership to be innovative. While 26% said the focus was to make more money, 23% said their end goal would be to do more, 9% said save the world and 5% said conserve their energy.

In this survey, we had 47% who have been in business for 1 – 5 years, 37% 0 – 1 year, 105 5 – 10 years and 6% have been in business 10 years and above.

The Octagon Session – Nation Building with Joshua Ajitena

Posted on: November 8th, 2016 by The Moderator No Comments

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Our first Octagon session which held on the 10th October 2016 was on Nation Building with Joshua Ajitena.

This 2 hour session which is the first of many consisted of a key note address and a breakout workgroup. Joshua Ajitena, a management consultant and speaker based, with this session passionately spoke on prospects, challenges and solutions. Here are some clips from the event.

Along side Adaora Mbelu Dania and Akinlabi Akinbulumo, Joshua facilitated a conversation amongst the 20 participants as they suggested a roadmap to achieving desired results. The group broke into three groups and focused on thinking through problems and solutions facing 6 sectors. Here are the results of the exercise.

EDUCATION
Challenges:

  1. Disconnect between curriculum and real life issues/challenges
  2. The gap between public and private schools
  3. Outdated curriculum
  4. Poor quality of teaches and lack of availability
  5. Lack of infrastructure
  6. Lack of parent/teacher inter-phasing around quality education

Solutions:

  1. Revised curriculums and inclusion of new fields in schools
  2. Internship should be focused on learning vs attendance
  3. Private schools and public schools mentorship program
  4. Training programs for teachers with certification
  5. Mandatory donations and scholarships by organization

GOVERNMENT
Challenges:

  1. Lack of transparency
  2. Lack of enabling policies for businesses
  3. Inadequate provision of infrastructure
  4. Disconnect between the levels of Government
  5. Disconnect between the leadership and the people

Solutions:

  1. Mandatory interactions between constituencies and mystery shopping
  2. Frequent measurement of public offices and a public declaration of assets and savings
  3. Portal to submit petitions and changes faced by businesses
  4. Training on leadership and policy formulation and governance

RELIGION

Challenges:

  1. Lack of tolerance
  2. Too much messaging focused on making the people lazy
  3. Lack of education and information

Solutions:

  1. Inclusion of mixed studies in early secondary education
  2. Society focused campaigns on the valve of hard work

MEDIA

Challenges:

  1. Accuracy of information
  2. Distribution and dissemination of information
  3. Quality of information
  4. Control of information

Solutions:

  1. Staff training and orientation
  2. A strong regulatory body that checks the media companies
  3. A body overseeing the education curriculum in this profession
  4. Less government control
  5. Passing the Freedom of Information Bill

SECURITY:

Challenges:

  1. Inadequate training/training facilities
  2. Welfare
  3. Education
  4. Abuse of power

Solutions:

  1. Provision of adequate training facilities and trainings
  2. Improved welfare/welfare packages
  3. Proper orientation for security agencies/public
  4. Checks and balances for misconduct

COMMUNITY

Challenges:

  1. Tribalism
  2. Religion
  3. Inadequate town planning

Solutions:

  1. Build up adequate infrastructure
  2. More community service from the public
  3. Re-orientation

ECONOMY
Challenges:

  1. Heavy reliance on importation
  2. Devaluation of naira
  3. Overdependence of oil and specific industries
  4. Issues with economic policy
  5. Wealth distribution

Solutions:

  1. The need for diversification
  2. Encourage SMEs, Local Businesses
  3. Price control
  4. Enforcement of regulatory bodies
  5. Influence economic policies

INFRASTRUCTURE

Challenges:

  1. Absence/lack of maintenance
  2. Under utility of historic buildings
  3. Review and evaluated projects
  4. Insufficient health insurance policies and providence
  5. Technology as a key catalyst

Solutions:

  1. Preservation policies
  2. Sensitization campaign to the public
  3. Independent body to manage review
  4. Health insurance (vast network)
  5. Expanding and maintaining our transport networks.

EQUALITY
Challenges:

  1. Intolerance for religious differences
  2. Tribalism
  3. Gender inequality/gender roles
  4. Class stratification
  5. Sexuality

Solutions:

  1. Education/sensitizing the public
  2. Level playing ground e.g. sports
  3. Influencing legislature

Meet Joshua Ajitena. Also known as Mr. Genero or Mr. Speaker. Poised with a passion for creativity and impacting the minds of his generation. Josh is the mind behind GeneroLiving, i-Rock Seminars, and The Genero Brand.
Joshua as stood on several podiums in the UK to address audiences of various sizes, his message is clear, ‘Life is to be lived curiously, only then can we explore the good things that are hidden with each creative endeavor’.
Joshua has spoken in over 250 schools & colleges, universities, startup networking events, churches, and many other gathering in the UK.
His passion is infectious, his delivery is powerful, one can describe Mr. Genero as a force on stage. With Tact and Witt, he is able to convey a message so complex or simple in the most clear and understanding way.
Josh is highly sort after in the UK, with sold out seminars and workshops, he is set to have a very eventful year ahead. Currently anticipating his acclaimed book ‘100’, set to be released in 2017. There sure is allot to expect and from him. In his words, ‘every opportunity to stand and speak is a
treasured moment, no audience is too big nor to small, it’s all about serving.
Joshua has had his eye and heart set on his motherland, Nigeria, for a while. Now, we hope Lagos is ready for the storm that is Mr. Genero.

The Buy Nigeria Conversation

Posted on: August 29th, 2016 by The Moderator 2 Comments

Welcome To The Octagon. 

The Octagon: We appreciate you taking time out to Join this Chat Session which will end at 5pm (1 Hour). We have two moderators in the room who will only offer guidance where necessary. Please feel free to openly share your thoughts and experiences.  Let’s begin with introductions. Can everyone let us know who they are and share a bit about what they do?  

Ofili: I’m Okechukwu Ofili, a multipotentialite Addicted to Truth and Allergic to Bullshit! Founder ofilispeaks.com and okadabooks.com. Author of 4 funny books

Bolaji: My name is Bolaji Iwayemi and I’m the Marketing Team lead for Paga, Nigeria’s No.1 payments company.

Daniel: Hi, I’m Daniel Emeka … Digital and Marketing communications| Rookie Tech Entrepreneur.

Gbadebo: Gbadebo Rhodes-Vivour – Architect and Creative director for Literati clothing.

Lolade: My name is Lolade Fadoju. I work within Digital Marketing for GTBANK and Head the SME MarketHub. It’s a pleasure to meet you all

The Octagon: Thank you for the introductions.

Several studies have shown that when you buy from an independent, locally-owned business, rather than a nationally-owned businesses, significantly more of your money is used to make purchases from other local businesses, service providers, and farms — continuing to strengthen the economic base of the community.

Senator Ben Bruce recently started the #BuyNaijaToGrowTheNaira campaign. 

In his words, “Obviously we cannot cut ourselves off from the world. No nation is an island, but at least we can fly Nigerian airlines, eat locally produced food and patronise our football league. If we do this, not only will our economy grow and produce jobs for Nigerians, it will also make our goods and services improve in value such that they will be attractive enough to be imported.”

Understanding the need for Local content, Should we be creating localized versions of international businesses winning the Nigerian market.? How can we get Nigerians more comfortable with Buying Local and appreciating local businesses? 

Bolaji: Quality plays a huge part in buying Nigerian. No matter how much I love my country I will not excuse mediocrity. Another issue is the fact that little to no manufacturing occurs in Nigeria. So when we “buy Nigeria” are we actually buying Nigerian.

Gbadebo: Currently a £20 pound T-shirt now costs 10k. I think at the rate we are going it would no longer be a question of making people comfortable. It would be people actively looking for substitutes. The onus would be on the makers to be able to fill that gap.

Bolaji: @Gbadebo very true but we need to change your perceptions first.

Daniel: Understanding the consumer and insights that drive their purchase behavior  is key creating good enough content for them to buy. I started www.ethnikcity.com on the premise that, a lot of Nigerians complain about failed processes when dealing with Nigerian artisans and manufacturers.

Ofili: But can they? Is the Government doing enough to help us grow. Doing business in Nigeria is very hard. Legal Taxes are high and illegal taxes are higher aka omo nile.

Bolaji: @Ofili how do we by-pass the govt and “create our own destinies”?

Ofili: It’s difficult …with okadabooks we have minimum exposure to Government. We are a software, and our office exists in the cloud. But for manufacturing businesses it is difficult. I watched my Dad become a shell of himself trying to run a plastic company in Nigeria as an honest man. It killed him. The government took everything he had and gave him nothing. No light no power nothing. So it’s hard. Lindaikeji can thrive because it’s software same with Bellanaija. But when you start manufacturing physical products it’s impossible to dodge the government.

Bolaji: The cost of 3D printing is dropping. Imagine your Dad could running his company at about half the cost. For food and some elements of clothing “buy Nigeria” is very alive.

Ofili: Agreed. But you still have to deal with Government regulations. You have to transport. You need power. They will tax you etc. In the US you get tax breaks as a business. In Nigeria you get broken by taxes.

Bolaji: There are tax breaks in Nigeria. Pioneer status entitles you to 4 years without paying income tax

Ofili: Can you explain that term “pioneer status” I am not familiar with it.

Bolaji: Pioneer status – you’ve created something new in the market

Daniel: Nigerians will not buy from you because you are Nigerian. They will buy because your product feels a void. But from a branding perspective … the #BuyNaija causes trials. Retention is now what your product and service gives you.

Gbadebo: I think we need to separate consumers. The mass market does not care too much about where things are made. Mr Ofili wrote a brilliant piece about made in Aba once. There was a time that the made in Nigeria perception was a positive one.

The Octagon: Until recently when it became harder to purchase imported brands, it was difficult for Nigerian businesses to develop products to compete with these brands. The competition did gave them little or no chance to break in. If dollar rates where low how do we still convince the populace that buy Nigeria is important. Or this conversation only important for tough times.

Bolaji: This is a very good point because once FX stabilizes people will go back to foreign products.

Ofili: Buy Nigeria is key and logical. It’s just that the quality has been lacking. I printed books in Nigeria and now I give them out for free because the print quality was bad.  But hopefully companies like Printivo can break that cycle.

Gbadebo: Currently to stem the effects foreign exchange has on our business we have localized our production, especially the labor-intensive parts. Another thing to consider is the huge margins one can make by earning foreign currency with sales to the International  Diaspora.

Bolaji: The Government has a very important role to play to create a conducive environment to manufacture locally.

Ofili: I don’t think so. If the quality is good people will buy Nigeria. It’s quality. How do we get quality.  A handy man has done the same job in my house 2 times, each time it was poor. If we somehow get our people to understand quality it will help. And I feel it starts with our universities and technical colleges. The quality disrespect starts at that level.

Bolaji: I was watching NARCOS and thought that the model used was great to bring in Forex but the product was wrong.

Lolade: I believe every individual plays a role, not just government. Consumers demand good quality and competitive pricing. For a long time, several businesses survived by importing top quality to feed local demand. Of course, this has become more challenging with USD hovering around N400 and GBP north of N500 (would be north of N600 if not for Brexit ). Because of this, we are noticing some new trends with businesses trying to circumvent the FX challenge.

1) Some are importing MORE from other markets outside of the US and UK (eg, China, India, Canada, Turkey, Middle East).

2) Some are trying to start producing and sourcing locally.

Unfortunately, as everyone would agree, manufacturing is a major challenge. Seems a little like a chicken and egg problem, but my conscience still pricks me to support Nigerian businesses because I believe it is for the greater good. This means sometimes I will have stones in my rice or even a roughly finished seam in my clothing. But for me it is an ethical decision.

Bolaji: Very well said. However, Quality is relative. A brand like Polo by Ralph gives a distinct experience that no local brand can give.

Ofili: The other thing I see is that a lot of businesses look to create products for Lagos and not Nigeria. So the quality products are priced and branded for one market.

Gbadebo: What we did in our case was we set up a 5 month experimental phase, sourcing the fabrics washing and testing them, then doing several samples until the tailors stepped up to the quality of finishing we expect. It is a costly process but we also have to consider that the quality of finishing and workmanship is a direct reflection of the ‘anyhow-ness’ that pervades our society…and most Nigerians don’t actually see what we call poor finishing as normal. It’s

Bolaji: Hmmm research and development. Something that’s lacking here. Well done

Gbadebo: That’s what we did I don’t think it applies to every sector, but that was a solution in ours. Another thing is to go out of your comfort zone, I got that advice from The Octagon actually. So we went to ikorodu to set up.

Lolade: There is a woman by the name of Bethlehem Tilahun Alemu. She runs a company called Sole Rebels based out of Ethiopia. She has been used as a case study by the global trade community for her role in ethical manufacturing. She sells shoes that are made by marginalized communities in Ethiopia. Her products retail at Urban Outfitters in the US. Guess what…people buy them not because the finishing is perfect, but because they understand that there is an ethical obligation to supporting developing economies

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