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The other day, tbere was a discussion about entrepreneurship and someone mentioned Dangote. He has become the metaphor for great wealth like Da Rocha , that man of mythic wealth in the historic past. Yorubas used to say one was as rich like Da Rocha. Dangote is the name for this age.
When people talk of Dangote, the remember the successes of the Group. Most people are unaware of the still born projects, the ones that languished for decades before they were cancelled. It is over a decade since Dangote got into making Tomato puree, we are yet to see the product in the market. It was involved in juice and gum Arabic, I heard. Those business operations have been rested. Yes, Dangote has had more wins that failures , by far, but imagine for a minute how much the story would have changed if the losses came earlier rather than later when his business was big enough to handle it.
We romanticize business owner too much. From a distance, anything can look beautiful. It is at a macro level that you life as it is. As the saying goes, you find money in the wilderness . Real success is manufactured far away from prying eyes, not the glamorous shark tank packaged competition like this is some form of reality television.
And if you look closely, it is easy to appreciate how hard it is to add value. Consider a going concern business that declare a loss after a year of operations; do you know how many things you have to get right to make a loss? How much hard work goes in to just building a business that is alive and self sustaining ? Four out of every five startups doe before their fifth year. Over that period, the venture would be burning cash millions of shareholder cash and haemoraging capital
A young lawyer I know has, for the past four years or so been dabbling in food processing with the intention of killing it on the export market. Four years of trying different juice products, over forty million naira down the drain. But nobody is advising him to throw in the towel. But I will.
This is the story you don’t hear often enough; some times the best next decision is to give up. Tiredness is not Laziness.
A long time ago, I had the good fortune of being at an event where the eminent doyen of manufacturing industry in Nigeria, Dr. Michael Olawole Omolayole, was to address a group of young professionals. We were mid career hires in a conglomerate. My Group Chairman belonged to his generation and Dr Omolayole was invited to advise us as part of the ceremony. The first thing he said, right in front of my Chairman was that only a fool will try to invest in manufacturing in Nigeria. He gave us many gems from his store of wisdom that day but I can never forget that first statement.
Every developing country should be focusing on it’s manufacturing sector because of its many benefits. It is the one sector that has the largest potential to add value and provide sustainable jobs, directly and indirectly. It is the one industry that any country with cheap labour and abundant population can excel in. Once production can be profitably started, wealth accumulated would be further invested in capital goods and research to improve production capabilities. And if such country is a able to crack the export code, that is the beginning of prosperity. Virtually aIl the asian countries ; Indonesia, Vietnam, Singapore and Malaysia have exploited this formula.
But as the elderly doyen noted over a decade ago, the game here is structured differently . You can not use land outside metropolitan areas for a bank loan. The rate at which banks lend can only be viable for highly speculative trading. The extent to which government at all levels levy businesses, you would think manufacturing is a criminal enterprise. The Naira is perennially being devalued which means purchasing power keeps falling for the tiny middle class..
Unfortunately , the Nigerian economy has always been designed to encourage short-term rent seeking behaviour. In the face of all these challenges, the industrialist has to BYOG ( bring your own government) ; that is, generate your own power, source your own water, initially train your own staff, provide security ,invest in your own extra legal justice systems, even sometimes build your own roads . Government only shows up to levy taxes and extort bribes.
In the light of this scenario where it is clearly obvious that it is saner to migrate abroad, cheaper to import from Asia , more rewarding to focus on government contract, more profitable to seek government office, what does one say to the struggling young man who is trying to do the impossible and extract value from ” this land that destroys capital”?
When such an intrepid venturist says he is tired of trying and failing, when he says he has lost his capital , his self confidence and pride along with other people’s money, when he can not take it anymore, what would be your advice? As for me, I will tell the young man, your have done your best here, it is okay to move on to other things before it is too late. I hear Canada is still accepting immigrants. Tiredness is not laziness,