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Business
THE NATION ON SUNDAY NOVEMBER 4, 2012
How NASSI can create five Beyond million jobs, by Wachuku Talent
By Adetayo Okusanya
The National Association of Small Scale Industrialists (NASSI) which has been idling for about 35 years has come alive recently under the headship of Chief Chuku Wachuku. A renowned development finance expert, Chuku and his colleagues at NASSI in collaboration with First Bank have worked out a scheme that will provide capital to about 500 small businesses in every local government area of Nigeria at single digit interest rate. He spoke with Steve Osuji
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INCE you left the National Directorate of Employment (NDE), it has been a shadow of itself; now that you are at NASSI, what do you hope to do to make it play the role it was set up to play? Well, thank you very much for the compliment. I cannot say too much about my former organisation, they are there and I believe they are doing their very best under the circumstance. But to the extent that Nigeria need to move forward, needs to create the jobs, needs to create the wealth, and needs to grow the economy, I don’t think it should be left to the public sector alone. I have always said that government cannot create employment; it must be private sector driven. So the extent that poverty level is too high in the country, unemployment level is rising everyday; as a matter of fact, somebody drew a scenario that 40 per cent of Nigeria’s population is 30 years and below and 90 per cent of this unemployed so that leaves us with a terrible problem in our hands. So do we sit around and wait for government? Government cannot do it. Yes government is making efforts which are commendable but take some of the venture capital programmes going on, how can you create a dent in the 40 million unemployed population with a programme that caters for about 100,000 people a year? So you need a massive approach. Now government needs to learn something from the private sector and this is what we are doing: if we NASSI went cap in hand to government they would probably tell us this or that. But we decided to take our fate in our hands. We partnered with an institution, we know that there is a lack of understanding of the small and medium scale business, the financing institution do not understand the culture of small businesses, the banking industry create a problem for this country. They source funds at cheap rate and they want to turn it around very quickly so that they can attract more funds. So they do short term financing – 3months, or they restrict themselves to that 2 per cent which they call the blue chip companies who themselves are losing because they are not producing. Now that lack of production is creating an import stream in the country because there is a huge demand gap which nobody is filling. But we all know that the economy can only rest on small and medium scale enterprises but they are not doing anything about it. At NASSI we are doing something concrete about it and fortunately we have a willing an illustrious partner in First Bank. And as the group managing director made it clear, they are not doing it for profit motive but as an investment in Nigeria. Being oldest bank in Nigeria and having a corps of technocrats on their team, they now want to invest in Nigeria. And what better organisation to partner with
• Wachuku
INTERVIEW than NASSI, a reinvigorated NASSI that has the wherewithal, that has the national spread, the personnel, the vision and the drive. And of course you know my background and my work in driving entrepreneurship in Nigeria. What exactly does NASSI want to achieve in this partnership with First Bank? You know that a major problem of developing small scale industry is access to finance. No matter the quality of ideas you may have, if you don’t have capital, there is little you can do. That is why I said earlier that the banks in Nigeria do not understand the culture of small scale business because they do not have collateral, they do not have the technical know-how and even if they had all those things in quantum, they don’t have the finance. And they cannot compete on the market determined rate; it is not possible. So what we have done is a major break through in this country. By partnering with First Bank, small scale industrialists will now have access to finance at an unprecedented single digit of 9%. NASSI in our MoU with FBN, called for an initial membership drive of 500 members per local government. Now if we drive it to one million strong membership per annum and each member employs five people, you have created six million jobs right away. Now outside the job creation, these jobs are earning wages, which will trigger demand which will in turn trigger consequential supply and the economy grows. We want government to look at it this way, when you have triggered that supply, how are you going to meet it? You have to go to the small-scaler to meet it. And extending it further, NASSI industrialist will be feeder to the big manufacturing companies because raw material source will now be from us. How do you hope to secure these credits so that people don’t use the loans to simply marry more wives? (Laughter)You know we coined those phrases about mar-
rying more wives, throw owambe parties and take chieftaincy titles and all that. Now NASSI has a membership profile and besides, the responsibility to screen ab initio, the loan beneficiaries and the primary responsibility of recovering the loans though rests with the bank, but we, knowing our members are going to ensure that the money returns because it is going to be recycled, thirdly, I am handling the one billion naira agriculture fund for Abia State. And I often tell them: I am not as interested in recovering the money as I am interested in making sure that you who took the money is a successful business person because when you are a successful business person, you pay your loan. So in answer to your question, we are going to put all those elements into play – advisory, added-value to make you become successful so that you can pay your loan. In fact we expect them to keep migrating to larger scale. The question of recovery therefore is very paramount because those loans must be recycled. We intend call meetings, to have sensitization tours in all the 36 states plus Abuja where we will let the governors know that the responsibility of securing their state rests with them as enshrined in the constitution and factors creating a secured environment include providing employment so we will ask them to put some money as collateral to secure these loans for these people are their citizens. How far has NASSI gone with this scheme and what are the milestones? What we have been able to do is to have structures in all the states. As a response to our drive, to our vision, structures are coming up in many local government areas; the people are vibrant, they eager. Last week we advertised the advent of the affordable finance to Nigerians and the response has been overwhelming. The forms will be in all the branches of the FBN by early November. All that prospective participants need to do is to pickup this forms, fill them and return them state or local government chairmen of NASSI who goes through the propos-
als with some consultants before they are sent to the head office where will also screen them again working with our consultants because I will hate to send ill-prepared proposals to the bank and become the laughingstock of the world. So only project that meet the test will be submitted to First Bank. The bank is willing and able to fund and NASSI will also make its own contribution as part of the collateral. And how we brought the interest rate to a single digit is our ancient Chinese secret. I am fascinated by the idea of activating 500 entrepreneurs per local government of the country. How is that feasible? It is our concept and we are working hard at it. We will be presenting a paper to the government on that score, not with the intention of going cap in hand for money, no; we are leading this change and not government or any of her agencies. Why? Because if you give a government agency N500 million you know what is going to happen to it? They will make budget to buy new houses, cars, domestic servants. But not so with NASSI; I will give you an example of the N1 billion agric loans I am handling for the Abia state government. The fund goes from the bank and direct to the bank account of the beneficiary for productive purposes and when they produce, they sell and you get your money back. I know another state where they have the same N1 billion, they have not loaned the money to anybody yet they have only N300 million left. I know a state where the same amount was shared by 150 people and yet another state in which not up to 20 people benefited. But in Abia State we have over 2,500people so far who are direct beneficiaries. So if government keeps funding certain agencies, they are funding the overheads. But with us, the funds go directly into the accounts of the beneficiaries. We have no overheads, no pensions to pay, no unions to negotiate with, etc. it is direct production. We are also going to ask government to play its roles in areas of allowing free movement of goods and services along the West Coast of Africa that has a population of about 300 million people. There are huge opportunities to be tapped there in terms of earning foreign exchange. We are also going to ask the government to look at the tax issues. We want to ask for tax breaks for a number of years for our members to allow for gestation. We are also discussing with the South African small scale manufacturers who can supply genuine equipment so that if we have financing, it can go direct to tangible and quality asset. What it means is that a toilet roll manufacturer, candle manufacturer can be sure of quality machinery. These are some of the things we are working on.
Email: adetayookusanya@hotmail.com
A look in the rear view mirror was below preset targets. They were usually asked to return with an updated plan that would get them back on track to achieving agreed targets and their businesses were placed on a monthly review schedule for close monitoring. Many corporations implement a similar quarterly accountability framework HIS is the first Sunday that consists of (i) a review in the month of No- of the results of the past quarvember. In less than 60 ter, (ii) a discussion on key days the last quarter of the result drivers, trends and calendar year will come to risks, (iii) a revision of the an end. Three hundred and outlook for the rest of the nine days are behind you, year with emphasis on the approximately seven thou- next quarter, and (iv) a pressand, four hundred and six- entation of the strategies and teen hours, which is almost plans for improving busieighty five percent of the ness performance. This prochours that make up the year. ess helps corporate execuIt is a good time to pause and tives maintain the integrity take a hard look in your rear of their plans and commitview mirror. A time to re- ments to shareholders by visit your plans for the year, holding those who are reevaluate how well you have sponsible for devising and done in achieving your de- implementing such plans sired results, and reflect on and strategies accountable. the lessons you have As the CEO of your own learned thus far. destiny, you too must demAs a finance professional onstrate a high degree of working in the corporate personal accountability if world, I looked forward you want to meet or exceed each quarter with excite- the commitments you have ment. I was excited about made to yourself and your the opportunity to be in key stakeholders. Accountbusiness review meetings ability means acknowledgwith corporate executives ing, reporting on and takdiscussing the financial and ing responsibility for your operational performance of actions (or inaction), decithe business. The flip side sions, communications, of this opportunity was the outputs and the conseincredibly intense workload quences that result from that accompanied the end of them. It means having the a quarter, which involved courage to confront yourthe preparation of robust self, the honesty to refrain management reports and fi- from making excuses and nancial forecasts that would the determination to do give corporate executives a what it takes to achieve your good understanding of the set goals. Take a moment health of the business. It this week to look in the meant triple checking every REAR VIEW MIRROR. data point in the manage- How have you fared in your ment reports for accuracy adventure so far, traversing and liaising with business the ROAD CALLED SUCunit leaders to capture key CESS? Have you set your competitive, market and BIG, BOLD and AUDAoperational factors that CIOUS but SMART goals or caused variances between fallen prey to procrastinaquarterly business targets tion? Do you have a VISION and actual results, especially of where you will be when those that were likely to im- the clock strikes midnight pact future business out- on December 31, 2012? Have comes. you determined which I learned a lot about ac- cards you will PLAY, LOSE countability in those meet- or HOLD? Are you spendings. I watched senior ex- ing your TIME and LIFE on ecutives hold business unit the things that are imporleaders responsible for their tant to you? Do you still performance outcomes. An- have your eye on the ball nual financial targets were or have you allowed the vabroken down into manage- garies of life to distract you? able monthly plans making Are you SELF-ACTUALIZit easy to monitor perform- ING or living according to ance on an ongoing basis, someone else’s agenda and rather than wait until the time table? Are you THRIVend of the year when it ING or just surviving? Are would be too late to take you consciously writing the corrective action. Each busi- HISTORY that you desire? ness unit leader was reAs you hold yourself acquired to give an account of countable for the outcomes how he had used and man- you achieved so far in 2012, aged corporate resources in celebrate your successes and accomplishing business learn from your failures. goals. It was especially a Most importantly, stay comtough discussion for busi- mitted to your goals and do ness unit leaders who had to not give up on yourself. You explain unfavorable per- still have two more months formance variances and pre- to achieve some, all or most sented a revised outlook that of your desired outcomes. • Okusanya is CEO of ReadinessEdge
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