 Okay, we are back and it's time for what we had earlier said will be our second hot topic because a guest for the first hot topic is not available. But nevertheless, our second guest is available, Basil Abiyah, he's a research associate, Basil, good morning, it's good to have you join us on the breakfast. Good morning, it's always my privilege to be on the breakfast show on Closty. Okay, so Nigeria risks U.S. market over uneven Agoa utilization as the African Growth and Opportunity Act. And there are concerns that upon its aspiration in 2025, it may not be renewed. Talk to us about this development. Well, first of all, this is a background context. The Agoa Act is actually a product of some very good thinking by George Bush during his presidency. And George Bush wanted an avenue where products manufactured and processed in Africa would find their way in the American consumer market. And it's a very large consumer market, undoubtedly not the largest in the world right now before discounting the consumption market of China. And so that was a huge opportunity for African countries to take advantage of and be able to jumpstart their own respective domestic manufacturing industries. Unfortunately, very few African countries are taking advantage of that particular act. I know for a fact that Ethiopia doing very well in terms of closing an apparel manufacturing and they are taking full advantage of their Agoa Act by shipping most of those produce over to the U.S. consumer market. For Nigeria and a number of African countries, we have not been able to utilize. Utilization has been low average over the last 10 years, according to the statistics that are available. And when I mean by we, what I mean by we is basically the African continent were very, I wouldn't say lucky, but it was almost as if we're going to lose out on the Agoa Act not being renewed in 2018. Due to some certain overtures by then as well, American President, President Donald Trump, but of course he lost the election and Biden took over and of course the Agoa Act was renewed again. And that would definitely elapse by 2025. And even before then that elapsed in a couple of African countries that are risking just losing out on the act itself. So there are lots of problems as to why Nigerian manufacturing companies processing goods processing companies and people who are in the agro processing industry in Nigeria have not taken advantage of that Agoa market. One part for me, I think major thing is the quality control problems that we have a lot of stuff. Yeah, branding, poor research and branding have been listed as part of the barriers. I mean, that's what the experts say and I agree with that. But I think for me, moving further is actually quality control because a huge chunk of the goods that we're allowed to be able to to to sheep over to the American consumer market. Are actually food produce and there are certain standards that the US FDA Food and Drug Administration, Food and Drug Agency have very high standards with regards regulations that were not meeting those food safety standards. You know, for instance, I know for instance that we're supposed to be able to ship seafood our seafood, especially the very large shoreline that we have with Atlantic Ocean. But we know we have structural issues like storage, for instance, where's the cold storage infrastructure to be able to do that. And for you to be able to carry out cold storage, you need power. And we're doing less than 5000 megawatts every day. You know, in terms of power, people have to be able to spend decreased amounts of money to be able to power the diesel power gen so that they can be able to provide cold storage if they are indeed in that particular soft sector. So I want you to look at your unique economics and your profit margins. You're not even making even and when you're not making even where the incentives for you to say, OK, I want to engage in processing seafood so that I can be able to take advantage of the I go out and then ship my processed seafood from the shores of the Atlantic Ocean. To the food consumer market, for instance, in New York or in Florida. So these safety standards are an issue. And we see that. I know you have heard of those who do not know. There are a couple of times when we have shipped tonnage, massive tonnages of beans, for instance, and the European Union into Europe. And you know, basically rejected it because it had more than normal quantities of. Insecticide. Yes. You know, it's interesting. I totally agree with you. I'd spoken with the farmer, Bridgette of one ago, I remember, who said these same things. You're saying. And it does look like these problems may not be going away anytime soon. I mean, there was a threat in 2018 that may not be renewed. It got renewed. And here there is also still the concern that come 2025, it may not be renewed. With the kind of power that we have and all the situations if narrated. Does it look like we're going to move forward from this? I mean, we are talking about how to move from consumer nation to a producer nation. Yet these problems persist and governments come and governments have been going. And these problems are not fixed. Which way in Nigeria is the next question? Basil, do you have an answer to that? Well, there are always answers. I think what we have to look at is first and foremost, look at the incentive structure for manufacturing. The incentive structure for manufacturing. Look, it's not rocket science. We're not talking about something very difficult and esoteric subject. No, it's what are the modalities that are available to enable people in those industries have more intentionality about producing and exporting. First and foremost, they need power. Secondly, they need very friendly tax rates. Thirdly, they need access to foreign exchange because they are a couple of the raw materials that they need, even for the processing. For instance, the chemicals do need for some of the possessive, the industrial machinery to be able to expand their production unit when they are processing these produce. Don't forget the core raw material is home. It is home. If you are into seafood processing, the core material is basically the fishes by our water side or by our waterways. If you're into closing your core material, core raw material is the cotton that you're producing in your cotton plantation in Katena or in Adama stage. So we have the core raw material and obviously expand the production numbers so that we have higher tonnage, but we need certain structural issues to be sorted out. And one of them is power. We need to be able to generate as much power as possible to meet the very high demand. We have a demand rate of about 100,000 megawatts. Domestic demand for power is already about 100,000 and we have found a way to plug back those numbers. Just about 80,000 megawatts is what we produce every day from diesel and fuel-powered cell generation. So we're producing over 80,000 megawatts of cell generation, but it's not sufficient because the raw material to power those cell generation units are the PMSs and the diesel and the elasticity of the pricing is very volatile for your planning if you're manufacturing. I mean, you make up one morning and a liter of diesel moves from over 119 to over 860. It happened last year. So imagine you being the accountant of that manufacturing company. You have to do a lot of downsizing 14 years. It hemorrhages your production units because you have to sack some people, right? And when you sack some people, you have to also reduce the units that you're using, the raw materials that you're accessing to be able to produce. And we had the situation where there was data from the Manufacturing Association of Nigeria sometime last year where they said over 80% of their members downsized by 50%. And that downsizing might be sacking. It might be reduction in production hours. It might be saying, okay, we're only producing from 8 a.m. to 2 p.m. because there's only a limit to which we can buy our diesel and power. So all of these structural issues, we need to look at these and sort out the supply side constraints. When we're able to sort out the supply side constraints, I have promised you, government has no business giving money to manufacturers or saying we're doing tax rebates. No, once there's a unified tax rate for manufacturers and industries, they are not paying as much as 40 taxes, local government taxes, state government taxes, even they go outside and tax them. When they are not having to face these issues, when they have power that meets their demand, they are ready to pay. They are ready to pay. I was a researcher in 2019 for a particular project, the willingness to pay for electricity project in Abuja. And our findings were very overwhelming. 80% of our respondents said they were willing to pay more for electricity. So Nigeria's actually willing to pay more for electricity. Now unfortunately, it's not just Nigeria that is not taking full advantage of this Agoa window. Other countries in Africa have also been said to be failing in this. This huge appetite for import and lack of the willingness and tenacity to be able to produce our own in such a way that we can also go out there and sell and make revenues. Why are we having this so much in Africa? Yes, again, it boils down to my initial question, energy poverty power. With my initial contribution, we have, Africa is energy poor. More than 60% of Africans do not have access to reliable electricity. We have the highest rates in the world of people that are not connected to an electricity grid, you know, the African continent residents. Manufacturing industries. Yes, we have enough to give ourselves more than enough power, energy and even export. Why haven't we been able to make the most of it? Structural issues again, you know, we have to look at these things from a holistic perspective. For you to be able to provide the governance needed to structure all the boats, all the units for electricity to be reliable. You need structural governance and we don't have that. Look, even the biggest, the most industrial African country, South Africa has serious electricity issues. You know, one of the, currently they are going to their worst energy crisis ever in their history. You know, there's what they call, when we in our etymology as my insurance, we call it blackouts. I forgot there's a particular one that they call it, but they're going through that right now, where the, you know, setting regions have to go sometimes 12 hours, sometimes as much as 18 hours without electricity. It's unfortunate what's happening to South Africa because we used to use South Africa as a reference point that they had more, they generated more than they could use and our population was much larger than theirs. And here we are seeing them having the same problems. Yes, again, because they're not, they're not working on improving their infrastructure, their power infrastructure. They have very obsolete power infrastructure, by the way, is largely coal powered. And as you know, even with the coal powered infrastructure that they have, most of these plants are no longer functioning at optimal capacity. So they're not building newer power plants, the speed in which they're building newer plants is not enough to meet demand. They have a larger population now than 20 years ago. And if you look at it, if you look at their numbers, they're still producing a lot of power. They produce more power than every single African country, but it's just that their demand levels are super high. So their demand supersedes the supply side for their electricity provisions. So a lot of these, again, still back again to the structural issues and it is not rocket science what I'm explaining. I'm just saying that all of the impediments towards having optimal supply capacity are there. They're still existing. Once you remove all of these impediments or these hurdles, things will move faster. Things will move more optimal in terms of capacity. And then you would now start to see expansion of productivity. Unfortunately, because we're not concentrating on solving these issues, we're still going to talk about this for years to come. Yeah, which is quite unfortunate. Bringing it back to Nigeria, as I said, I had spoken with a female farmer who told me some of the problems that the agric sector in Nigeria is going through and how that oftentimes in trying to export produce from Nigeria, farmers encountered problems because the pesticides used were either too much and all of that. And then you begin to ask yourself, in fact, you did say that the African shops, the African supermarkets you have outside of this country, the most of the goods you find there are not even from Nigeria. And I was quite alarmed. Yes, quite agree. You go to these African shops and you will see things, almost everything we use here in Nigeria. And you will think that it came from here, the yam, the goosey and the rest. And then to learn from Bridget, when I did, that they were not from Nigeria. You can talk about many produce. For instance, I carried out a project for a private client. I decided to invest in a processing plant for share butter. Permit me to say that most of the share butter that you get in Europe, even though they're actually produced in Nigeria, because we're the largest producer of share butter, for instance, in the world, that is the fact. However, because we have very poor process and safety standards, food safety standards, we have very poor process for share butter, which is a very sensitive produce because you're using it on your skin. And you know the regulations in the EU are very, very tough and stringent. Everything has to pass through Ghana, because Ghana has more infrastructure for that particular share butter processing ecosystem. So they have a very good share butter processing ecosystem. What they do is they have folks in Nigeria, particularly in Kuala state and in Kudistit and in Majesty, where they ship the raw produce of share butter and send it over to Ghana. In Ghana, they do the processing and the packaging, and then they send it over to the European markets. And the demand for share, Nigerian share butter is very high. But again, we're losing more than 80% of the potential profits that we're supposed to get, because we don't have the infrastructure for processing. And it's because of the structural issues. The YAM, for instance, in your average African shop in Europe, the YAM actually comes from Ghana, but the YAM is actually planted in Nigeria because they don't have enough production capacity for YAM. We are the largest producers of YAM in the world. We are also the largest producers of cassava in the world. But most of these things have to pass through Ghana, where there's some semblance of processing, meeting up with the EU pesticide level standards, food safety standards that these countries have. And the EU, of course, has this block of bureaucratic structure where they are in charge of the produce quality that comes into their markets, and they do not relent on that. And we already have a notoriety. Nigerian produce, food produce, we have a notoriety for not meeting those standards. So nobody wants to be able to get the commodities from Nigeria. Instead, they prefer if they get the commodities from Benin Republic or from Ghana because they have better standards, adherence systems that we do not have. So we have a lot of work to do. Basile, you know, when listening to you, one begins to wonder, who are those who are supposed to have fixed these things? We have the Ministry of Agriculture and other ministries that should be in charge. You know, I'm speechless right now. Can you please pick up from where I stopped? I mean, we have a serious elephant in the room. And the elephant in the room is not going to be solved by private sector interventions. I'm sorry to say it. We need governments to be able to carry out a lot of these adherence systems. And we have new ministers. I think the ministerial list, the first half of the ministerial list just dropped yesterday. We're going to have potential new ministers in the next one month or two months that we'll be swanning. Their first point of action, especially if you're the minister of trade and investment, and you're also the minister of agriculture, the first point of contact is to meet up with standard organizations in Nigeria and finally we're to overhaul and revamp our safety standards adherence structure. And we already have very good laws. The laws that we already have are very good, the legislation that we have are very good. Just ensure that there is a very high adherence system. I think the starting point would be to see to it that those who are put in charge of those ministries know that they should be there, that they are qualified to be there. Not the same things that we've seen in the past. The former minister of education who knew nothing about education that was there. Yes. Mr. Erebushala also said the same thing of himself, that he knew nothing about the portfolio he was given. So we need people, the perfect people in the right positions who know what that position or that office requires of them, who are qualified, who are in that field. We need square pegs for square holes. We need round pegs for round holes. We just need to be able to do the right connection, the bolts and holes and connect them. They're not hard, they're not hard. We just need people who have the political will and the know-how and once they have the technical know-how and the political will, they would structure it. For instance, imagine the context where someone really wants to revamp how we do our exports and he takes charge of the trade and investment ministry. First thing you're doing is overhauling the operations of the NEPC, Nigerian Export Promotional Council to make sure that all of the modalities needed to make exportation very easy in the Nigerian market are fixed and when they are fixed, we know know-how people who are working for NEPC but have never actually come in contact with exporters or food manufacturers or even our farmers. They have a lot of people in the NEPC and I don't know if that's intended for the NEPC but we have a lot of them who have spent maybe 8, 9, 10 years in their very lost office here in Abuja but have never actually come in contact with these actual exporters to find out what are the impediments to why they are not exporting the volumes that they should export, why their produce are being rejected in the European Union or in the American consumer market and then fix those impediments. When you are able to fix those impediments then I mean we would have our exportation numbers higher than they are and we should be doing far much better than we currently do. Yes, it is important that we are having this discussion at this point in time as the first list of ministers are coming. The portfolios are not yet known but now that we are talking about the need to have square pegs and square holes, it is very critical that if we are going to move forward, there is just no other way else. We can't continue business as usual. We need to fix this country. I mean we can't continue business as usual but still thank you so much for being a part of this discussion this morning. It is always a pleasure to have you discuss with us. It is always a pleasure to be on close to you Africa. Thank you very much for the time. Alright, so we will take a break now and come back for sports. Mudashi Rishitu is standing by to take you through the world of sports. Stay with us.