Good day, Osuji Franklin here. You must have read my first blog post about doing business in Nigeria for you to be here.
There is nothing usual at all about doing business in Nigeria. Almost seems like Nigeria is in an alternate universe. The irony when “Ease of Doing Business in Nigeria” was released by this current administration, but there is nothing EASY! about it. From power to security, to inflation, to interest rates; where do I start to complain?
I will start with Power! Electricity! It is non-existent!!! As I have mentioned previously in my earlier posts, my factory is located along the Aba-Portharcourt expressway on the outskirts of the town and just opposite the EEDC office. But guess what? We no dey get light (dead).
The station is manned by corrupt thieving officials who demand bribes to give us power (which isn’t free by the way, we pay for meter tokens) and guess what again? The power is still not steady! The EEDC station still fails to deliver even after being heavily sensitized. In addition, there is always a report of one issue or the other which they always face that prevents them from maintaining a steady power supply. With the recent failures of the national grid and its underperformance/ underutilization, the woes of the power supply deepened. Switching to diesel usage has proven to be very costly to maintain, costing as much as =N= 800,000/ ton. In short, the power supply is highly erratic and it’s crippling our productivity as a manufacturing company.
Next up is Security. I really don’t know which is worse- the state of Power or Security in the country now.
You can imagine a sitting governor speaking on live TV that everybody should go and arm themselves. This simply means that the current government, both at the Federal and State levels, has failed. At a time when the Commander-in-Chief should take charge of soothing our security pains, he isn’t. Right along the Aba-Portharcourt expressway, a short distance from my factory, there have been several kidnapping activities going on. The police on patrol duty go missing whenever such incidences occur but are ever available to collect bribes along that same road when everything is calm. Makes one wonder, wetin dey really occur for this country. Our lives are constantly at risk of being lost. Just living on vibes and Insha Allah. Worse of it all is that our government is mute about all that is going on and worse of all our state government at home.
Inflation and interest rates are surging through the roof. Currently, Nigeria is in the top 10 worst inflation rate figures in Africa. Nigeria’s inflation rate has surged further to 20.77% in the month of September 2022, from 20.52% recorded in the previous month. This represents the highest rate since September 2005.
The inflation rate has affected our purchasing ability to purchase raw materials for production. For example, at the beginning of the year (January 2022), my company bought red oil at =N= 500,000, which is a major RM component of our soap production. As of November 1, 2022, the price of this same red oil is =N= 1,750,000; over 100% increase. Inflation is eating up all my profits and into my Cost price. Interest rates in Nigeria are not encouraging as well. Interest rates from CBN funds have risen from a single digit of 9% to double digits of 16.5%. Banks also have raised their interest rates from 17% to 33%. The mere sight of these figures is discouraging and crippling because no entrepreneur finds this easy to mitigate, considering all we pass through to build a successful business.
A great man once said “… our case would remain in spite of” all these challenges, I was able to succeed – Tony O. Elumelu, C.F.R.
That shall be my story!