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Nigeria’s Agro Allied Industry: A Starting Point for Enterprise Revolution

In Western Africa, agriculture accounts for an estimated 40% of combined GDP and employs up to 70% of the available working population. Agricultural commodities are the second largest export from the region to the European Union, although most goods are traded without any local value addition. This represents a significant failure to produce high-value products that can enhance profitability in agro-operations and provide much-needed employment. Exports to newer markets are often held back by concerns over compliance with international production standards. Further, the region’s high transportation costs inflate the price of agro-products in local markets and lower export competitiveness. The gross outcome of these conditions is that developing economies in West Africa and elsewhere generate only $40 by processing one ton of agricultural products against $180 in developed countries.

Fortunately, this persistently bleak outlook for agriculture across sub-Saharan Africa is gradually beginning to change and Nigeria is poised to take the lead in reversing the trend. In the first decade after its independence in 1960, the traditionally agrarian Nigerian economy contributed 60% of GDP and more than a third of total export revenue. The country was the world’s top exporter of palm oil and had commercialised production of several cash crops including cocoa, cotton, rubber, groundnut and kola nut. The situation changed radically when the oil boom of the ’70s shifted focus away from cropping and petrochemical exports became the primary national obsession. Agriculture was marginalised into a labour-intensive, low-productivity subsistence activity that eventually plunged large parts of rural Nigeria into abject poverty. Despite several resuscitation attempts over the decades – including the 1972 National Accelerated Food Programme, the 1976 Operation Feed the Nation and the Green Revolution initiative of 1980 – the steady descent of agriculture continued till the very end of the last century.

The redirection of agricultural policies affected since the return of democracy in 1999 proved more successful. Under a radical reforms programme, Abuja targeted rural development with integrated plans for agriculture promotion, rural industrialisation and infrastructure development. This integrated approach has yielded tangible results: Agriculture now leads the country’s economic recovery, bouncing back to contribute 42% of GDP by 20084.

Perhaps the most significant thought arising out of this recovery is Nigeria’s natural inclination towards farming. Traditional involvement with agriculture and the existence of diverse ecological conditions across the country offers tantalising potential for growth of a flourishing and suitably interlinked agro-allied industry. Nigeria’s ambitions for accelerated and inclusive economic growth are contingent on achieving a vibrant agriculture sector that can support extensive down-the-line enterprise development and employment. In fact the UN Conference on Trade and Development (UNCTAD) expressly recommends the adoption of a national investment policy to diversify the economy with strong focus on agro-allied industries. The fact that this sector is primed to spark off rapid enterprise development in Nigeria is simply undeniable.

Enterprise potential exists in almost all areas of local farm production. Nigeria currently produces over 100,0006 metric tonnes of kola nut, which finds use in the manufacture of beverages, liquor and confectionaries. Yet, local processing units are rare and exports are largely limited to fresh and dry nuts with little value addition. Cassava, likewise, has emerged as a major cash crop with untapped potential in industrial use and bio-fuel development. With adequate private sector involvement, commercialised agriculture can not only aid industrialisation and employment generation but also breach the productivity gap and reduce food costs.

In terms of broad parameters, policies for effective development of the agro-allied sector in Nigeria must focus on a number of key considerations:

* Ensuring food security by increasing supply and lowering prices with the specific aim of curbing inflation.

* Enhancing credit access to small farmers and agro-based enterprises at low rates of interest.

* Providing information, support and training for emerging agro-industries and promoting best practices.

* Increasing productivity through promotion of high-growth models in food processing enterprises.

* Prioritising locally available raw materials over extravagant imports.

* Removing informal barriers to trade and streamlined manufacturing of agricultural products.

* Promoting greater regulatory cooperation among West African neighbours to increase regional trade.

* Reducing tariff on goods and services that support the agro-processing sector.

* Enforcing relevant safeguards for agricultural and value-added food products to guard against import surges.

* Building capacity in the private sector and promoting public-private partnership in agro-processing industries.

Abuja’s intervention in the agro-allied sector must essentially be aimed at creating the right environment for rapid expansion of locally-owned enterprises. However, there are serious challenges in this direction. Industrial processing of agricultural products is almost negligible, existing standards being very basic and often incomparable with export requirements. Post-harvest losses are also very high in the region, averaging up to 50%7 for fruits and vegetables and 25% for grains. In many instances, losses due to customs delay and complicated documentation exceed applicable tariffs. Labour saving production and advanced harvesting and processing technologies are therefore critical for sustained revival of the Nigerian agriculture scenario. Moreover, efficient production and marketing systems will prove vital in ensuring high quality standards and competitive prices for both domestic industries and export markets.

In terms of Nigeria’s long term growth prospects, perhaps the most important consideration of all is simply the realisation that future prosperity depends not on the yield from its oil fields, but on the harvest of its land.

Hindi EBooks, India and the EBook Market Revolution

Market potential for eBook sales in India is immense but are Indians embracing eBooks and how is this influenced?

As at June 2011 a reported 850 million Indians were mobile phone subscribers with a projected rise to 1 billion by 2013 which will rival China.

Reports suggest that approximately 100 million Indians were internet users at the beginning of 2011 which represents a mere 8% of the population but still placed India 3rd in the world league table of users but with one of the world`s lowest internet penetration rates. At June 2011 less than 1% of the population were Broadband users.

Clearly, on a simplistic numbers analysis, the potential for manifold growth of Indian internet consumers is vast but how does this sit with the evolving e-book market?

To date, the volume of Indian eBook purchases has been steady and developing rather than explosive, in line with many other countries who have been slow starters. There have been limiting factors such as prohibitive cost and inaccessibility to e-reading devices, the lack of a broadband service with adequate internet speeds to service fast download and scarcity of published eBook titles due to squabbles between authors and other vested parties and publishers slow to convert their catalogues to the digital version. However, these market dynamics are changing as competition intensifies and more platforms to download and read eBooks are introduced. PC tablets, smartphones and a variety of specialist e-readers are bringing consumer choice to market which can only benefit pricing. As India rolls out its broadband program, faster internet speeds are being integrated. A much wider selection of eBook titles will come to market as eBook publishing houses,authors,agents and retailers reach agreement on the financial fundamentals.

Indians generally have become conversant with developing e-commerce in the form of e-newsletters,e-marketing,e-newspapers and aspects of e-learning. The concept of an eBook presents a different dilemma as it is a personal choice reading medium which does not offer the physical `feel` of a paperback book and, to some, will sit uncomfortably with their traditional reading habits and rationale. Some will be reticent to change and others will embrace. In many respects the eBook revolution mirrors that of the music industry a few years back when it would have been unthinkable to consider that downloading a song or album to an mp3 player could essentially replace the music CD.Could the eBook replace the paperback?

If we examine a sector of the current market say Hindi eBooks you will find a wide range of subject matter both in English and the native Hindi language word covering categories such as Hinduism for children, The Holy books of Hinduism, Hindi early stage learning eBooks for children and a multitude of Hindi verses, poems and scriptures. Educational eBooks download is a particular favorite where medical, accounting and engineering eBooks are popular. The entertainment and leisure industry is also well represented with eBook titles covering Bollywood, cricket, autobiographies, an array of Indian cooking recipe eBooks, fiction and non-fiction, to name just a few.

The current `eBook India` market is being driven by young Indian students, professionals and parents, who recognise that modernity in the shape of digital reading for learning,education and entertainment can co-exist or enhance traditional methods without compromising cultural values, beliefs and faiths. Their recognition of the eBook age lies not only in their thirst for keeping pace with technological advancement (and parity with their children’s development) but also that e-reading passes the practicality and immediacy test-crucial for today’s fast paced world. They see value in the merits of a portable lightweight reading device that can store a whole library of books and can be topped up with a download in minutes. These groups are discerning and driven and will continue to be the catalyst for growth in the eBook market.

Currently the US and UK markets lead the way. Amazon.com reports that the US business has sold 3 times as many eBooks in 2011 as the same period in 2010 and that eBooks are now outselling paper and hard backs combined. Since April 2011, Amazon.co.uk reports that for every 100 hard backs it sells 240 eBooks.

As the ingredients fall into place for the Indian eBook market, the expectation is of rapid consumer growth and whilst there will always be a place for traditional means, digital advancement is unrelenting and all absorbing.

The Mobile App Revolution: Why You Should Be a Part of It

If you have a business, then you must be aware of the fact that mobile apps are bringing great changes in how people do their work, shop or connect. Applications are becoming the bridge between the customers, employees and the products or services. And the rise of smart phones has created a thriving market for the mobile apps and this has in fact helped businesses to increase their productivity by effectively mobilizing their resources and enhancing the user experiences. Though the process is gradual and iterative, mobility has brought in a huge change in the way businesses operate.

Here is why you should be a part of the mobile app revolution

Simplicity in the front end:

Having a mobile application for your business would result in giving easy access opportunities to your customers. It helps them to reach out to you any time of the day and even on the go. The easy front ends of enterprise apps are often attractive and intuitive so that people can enjoy while availing various services. Not only shopping, people can also play, watch movies, listen to music and do various other works without having much trouble. Mobile app brings with it the freshness that today’s business can no more afford to miss.

Keeps the users more engaged:

Building an app is easy, but creating something that can keep your customers engaged may be difficult. Mobiles have become an integral part of human life and so it is the best device through which you can keep your audiences engaged. It is by developing a mobile application that you can help employees become more productive and keep your customers hooked to your business. Offering personalized information or message is easy with such apps and this increases the chances of conversion.

Mobile centric business

If online business owners want to develop a revolutionary app, then they must adopt a mobile centric approach. They need to think of mobile first and if they can adopt a long term mobile centric vision, then they can easily develop applications that ensure great experiences and are also integral to all their applications. The trend of BYOD (Bring Your Own Device) environment has also changed the way business owners think today. If they want to be at par with the latest trends and technologies, then it is a must to develop a mobile app for the business.

Reach out to a wider market base:

For making a business successful, it is important to have a huge market base. And this is possible by developing a mobile application that can be accessed from any device and OS. The mobile app can easily be accessed even on the go and people can gather information about the products and services anytime and from anywhere. It also helps to target a huge market base as there is no geo limitations. People can easily access your app and get the desired information.

Mobile centric strategies are the ultimate future of all enterprises and it is very important that businesses realize the importance of leveraging mobile platforms that helps them to effectively address the varied challenges that includes integration, scalability, security while enhancing the user convenience.

Women Empowerment And Entrepreneurial Revolution

Women have generally been looked upon with contempt for centuries with various strictures inflicted upon them reducing their status to the mercy of men.

They have been confined to hearth and home. But now the perspective of the society has changed and a general thinking to work for the emancipation and empowerment of women is being developed so that they could also contribute in the advancement and welfare of the society.

Women constitute almost 50% of the world’s population. According to the last official Nigerian census in 2006, women comprised almost half of the then 140 million populace at 68.3million. United Nations updated figures for 2010 put Nigeria as Africa’s most populous, as well as most densely populated nation, at 155 million in 2010, the New-York based Centre for Reproductive Rights and the Women Advocates Research and Documentation Centre (WARDC) reported that 600,000 women die in the world annually and Nigeria accounts for 10% of this figure; 60,000 Nigerian women are dying annually due to pregnancy and child-birth related complications. In more comprehensible terms, the number translates to 164 women per day.

According to the Nigerian Minister of Women Affairs and Social Development, the latest Nigerian census revealed that women constitute 49.9% of the nation’s population; the under representation of women (2%) in the nation’s development processes in finance, business and investment fronts, renders 40% of the population inadequately positioned to contribute to the economic growth of the country.

As long as recorded history has lasted, so too has women’s oppression. To many people, it just seems natural that women are worse off, because of their smaller size or their capacity to bear children. Men comfort themselves with the thought that women need looking after. Not just the capitalist system to blame but also in feudal society, women occupied second place to men.

Early anthropologists began to speak of an earlier time when women, not men, ruled society.

The history of class struggles shows the continual effects of the “world historic defeat of the female sex” interweaved with and subordinated to class relations of exploitation.

The woman is an indispensable part of the family, for children are an economic necessity, but her role is a secondary one.

Women, though their economic activity was more centered on the home, played a large role in social life.

Why women are poor/oppressed

Women face many challenges both at home and in the marketplace when they decide to seek employment or engage in entrepreneurial activities.

Religion discouraged women status

Low literacy of women in the world: over 640 million of the women in the world are illiterates (UN Secretary General).

Amongst the world children, 121 million are not in school, most of them are girls.

Two-thirds of the world’s 774million illiterates adults are women (UNICEF statistics)

Girls represent nearly 60% of children not in school.

Educating a girl child is life saving for the world.

Women are more vulnerable to exploitation.

Uneducated girls are more at risk to be marginalized

Women’s rights and access to land, credit and education are limited; not only due to legal discrimination, but because more subtle barriers such as their work load, mobility and low bargaining positions in the household and community prevent them from taking advantage of their legal right.

Women status/employment- 90% of the world female labour are called housewives and excluded from the formal definition of economic activity.

Women work more hours than men and they are unpaid. The paid ones are paid 17% lower than men.

U.K, Germany, Italy, France- women are paid 75% wages. In Vietnam, Sri-lanka and Australia they are paid 90%

Women perform 66% of the world’s work, produce 50% of the food, but earn 10% of the income and own 1% of the property.

However, in some regions, women provide 70% of agricultural labour, produce more than 90% of the food and yet are nowhere represented in budget deliberations.

Women occupy only 24% of senior management positions globally, 34% of privately held businesses globally have no women in senior management. Managerial position- 39% in developed country, 15% in Africa, and 13% in Asia.

In Arab States, only 28% of women participate in the work force.

Women and society laws

First stage of discrimination begins with women when parents about. In Nigeria, most of the small-scale farming enterprises are owned by men. Women by nature have creative abilities, are blessed with ability to persist and pursue their desires, are good and patient nurtures of children, and this tenacity is usually transferred into business, are good innovators, have ability to develop passion for what they believe in.

Many researchers have shown that poverty is a malady that incapacitates its victim economically and indirectly subject him/her to a state of destitution, voicelessness, powerlessness and even violence (World Bank 2000; Okojie, 2002) Unfortunately, the most affected sex by the above incapacitation are women and children. Statistics show that women are poorer than men. The UNDP (2008) estimated that, about 70% of the world-poor are women. Women are poorer because they are more vulnerable economically.

The findings of Thane (1978), Showalter (1987) and Lewis Piachered (1987) cited in Magaji’s Introduction to Project Evaluation (2004) showed that women have been the poorest sex throughout the 20th Century and have formed a substantial majority of the poor since poverty was first recognized. On why women are the poorest sex, the physical strength of women and various challenges limit them to specific soft duties making it difficult to be enterprising.

Entrepreneurship development therefore is a crucial tool for women’s economic empowerment.

The benefits derivable from empowering the women folk are farfetched, starting with family advancement and eventually touching on the national and global economic advancement.

If women are empowered to do more and be more, the possibility for economic growth becomes apparent; eliminating half of a nation’s work on the sole basis of gender can have the detrimental effects on the economy of that nation. It is the nation that blends the strengths of women and men that will lead the world in development (Kiyosaki 1993) in the field of agriculture and other sectors.

A study found that of fortune 500 companies, “those with more women board directors had significantly higher financial returns, including 53 percent higher returns on equity, 24 percent higher returns on sales and 67 percent higher returns on invested capital (OECD, 2008).” This study shows the impact women can have on the overall economic benefits of a company. If implemented on a global scale, the inclusion of women in the formal workforce (like a fortune 500 company) can increase the economic output of a nation.

Entrepreneurship or investing is not an exclusive reserve of any gender. Both women and men generate the same result provided they follow the principles of investment. Kiyosaki (1993) proves with statistical data in Unites States, that women are better investors than men. Also, a study of National Association of Investors Corporation (NAIC), found that women- only clubs achieved average annual returns of 32% since 1951 versus 23% for men-only investment clubs. The verdict is; women know how to handle money and can be greater entrepreneurs than men if the various obstacles to development is removed or minimized.

Furthermore, entrepreneurship will give women opportunities of owning businesses, thereby increasing their personal wealth. Women’s entrepreneurship will of course generate the needed employment in developing economies in Africa and bring in the long excluded population of women into the labour force thereby empowering them.

The best way to fight poverty and extremism is to educate and empower women.

The Limitations holding back women from achieving much like men in entrepreneurship development.

Finance

Manpower and Education

Culture and Tradition

Technology

Erroneous Ideas about Women

Entrepreneurial Attitude

Gender inequality

Venture Capitalism and Enterprise Revolution in Nigeria

The African Capital Alliance (ACA), a private equity fund manager in western Africa, announced the raising of $200 million from investors in July last year. The third installment of the Capital Alliance Private Equity (CAPE) fund will target important sectors such as power, oil and gas, communications and financial services in Nigeria and across the sub-Saharan region. The ACA is confident of eventually raising a total of $350 million for the fund from aid agencies, international banks and Nigerian institutional investors. The development reflects mounting confidence in Nigeria’s resurgent economy, considering the country’s fist such fund that started out in 1998 with a capital of just $35 million.

While there is no conclusive data on the size of the Nigeria equity market, estimates for the whole of Africa put it over $6 billion in 2000; South Africa, the continent’s largest economy, accounting for half the share. High economic growth fuelled by an enthusiastic reforms programme has seen Nigeria’s growth scale to almost double the figure for developed markets in recent years. The country’s GDP growth rate in 2006 stood at 5.6%, significantly higher than the US (3.2%) or the UK (2.8%)1. Although the private equity market is still in its infancy here, increasing opportunities to invest in high-growth businesses have succeeded to some extent in eroding the conventional insistence on public equity and debt. However, there continue to be significant risks attending investment in Nigeria due to unhealthy policies, a volatile security situation and massive infrastructure shortfalls. Much of this holds true for the continent at large and explains why it receives only a fragment of global foreign direct investment (FDI). Out of the estimated $250 billion in global FDI to developing countries in 2001, Africa received only $11 billion2.

For many international investors, venture capital and private equity in Nigeria are risky propositions because of political instability, violence, social unrest and corruption. Progress in this direction has been impeded by several other reasons as well:

* Poor corporate governance and lax regulatory mechanisms.

* Red tape, legal restrictions and hostile investment policies.

* High trading costs in the primary market for equities.

* Market volatility and the resulting high-risk perception.

* High exit risk for investors because of low liquidity.

* Difficult and often confusing ownership and property rights.

Over the last decade, Nigeria has displayed a steady commitment to reforms. The Investment and Securities Decree was passed into law soon after the return of civilian rule in 1999, opening up the economy to foreign investment. The government of former president Obasanjo also established the Investment and Securities Tribunal for speedy resolution of disputes arising out of investment deals. More recently, the Securities and Exchange Commission slashed transaction rates for equities from 6.9% to 4.2%. International venture capital investors have shown increasing interest in Nigeria after the liberalisation of several important markets like telecommunications, transport, and oil marketing. The fact that fresh policies have persuaded at least some investors to overlook the high cost of doing business in Nigeria is a significant achievement in itself.

Its large population and market size bestow tremendous potential on the Nigeria economy – Africa’s third largest and among the most rapidly growing. The country’s ambitious Vision 2020 programme and the UN Millennium Development Goals together represent considerable challenges in terms of economic revival. Past experience favours strongly against big businesses, which have had a dismal track record and a high-failure rate under both private and public operation. Undeniably, the fate of Nigeria’s long term goals rests on rapid proliferation of SMEs and their ability to drive an enterprise revolution that will sufficiently diversify the economy away from oil and reverse decades of stagnation. The objective is to use SMEs to deliver sustainable development, employment creation and most importantly, poverty alleviation.

This is where venture capitalism derives its significance in the context of Nigeria’s long-term ambitions. Private equity investment has been responsible for some of the most notable economic success stories across the globe. Entrepreneurs starting out with angel loans turned India around into the largest software exporter in the world. In South Korea, booming small high-tech businesses bypassed larger firms to lead the country’s recovery from the Asian economic crisis. Equity funded enterprises have likewise recorded high growth figures in developing countries from Asia, across Europe and in South America. The global experience with venture capitalism throws up a number of important considerations in terms of providing the right environment for rapid growth. The following are some of the most important challenges and considerations facing Nigerian policy makers in this regard:

* Establishing a venture capital technical assistance programme to enhance SME performance in diverse economic sectors.

* Institutionalising tax benefits for equity investment to attract foreign investors.

* Providing risk guarantees to create strategic venture capital industries that improve self reliance and curb import quotas.

* Enhancing venture capital capacity to stimulate and promote the industrial expansion.

* Focusing equity investment on SMEs that optimise resource utilisation and assist local raw material development.

* Promoting innovative business ideas, processes and techniques that boost both productivity and profitability.

* Hastening industrialisation through equity infusion in high-growth areas like telecommunications and tourism.

Nigeria’s reforms process prompted a unique voluntary initiative at the turn of the last century when the Nigerian Bankers’ Committee launched the Small and Medium Enterprise Equity (SMEEIS) scheme. Billed as an attempt to promote entrepreneurial expansion, the scheme required all locally operating commercial banks to earmark 10% of pre-tax profits for equity investment in small and medium enterprises. Even though more than Naira 18 billion had been set aside by 2003, utilisation of the funds remained abysmally poor at less than 25%. The Nigerian Central Bank owed it to a lack of viable projects and general reluctance toward equity partnership. If poor managerial and business packaging skills are areas of concern, the prevailing mindset against venture capitalism in both existing and emerging enterprises is even more so.

To quote former Central Bank governor Joseph Sanusi (29 May 1999-29 May 2004), accelerated economic development is not possible until Nigerian entrepreneurs learn to appreciate that “it is better to own 10% of a successful and profitable business than to own 100% of a moribund business”.