 Welcome back from That's One. I am now being joined by the Director-General of the Manufacturers Association of Nigerian Man, Shegun Ajayi Kadeu. Many thanks for joining us on Business Insights, Mr Ajayi Kadeu. Thank you for having me. It is indeed our pleasure. Let's just dive straight into it. Tell us about the impact on this higher electricity tariff vis-à-vis the cost of productions for manufacturers. Yes, I think to start is to place it within the context. Manufacturers like most Nigerians rely on electricity to do business. For us in the manufacturing sector, the electricity is like the blood is to the body. You require it for all your operations, be it on the factory floor or in the offices. And that explains why, like you rightly mentioned in the year 2022, manufacturers had to spend $144 billion to provide alternative source of electricity because the national grid was not offering sufficient supply of power. So what we have seen with this anticipated or imminent increase in electricity tariff is anxiety. A 40% increase in electricity tariff will be clearly unbearable for the sector. Having seen that we enjoy only between six to 12 hours of electricity and also seeing that the cost of providing alternative energy has constituted a toll on manufacturing competitiveness, profitability, and our capacity utilization. Manufacturers are now very anxious as to how the year we end. Having seen that in the early part of the year, we have had the currency transition making us to record unprecedented low sales. We have seen how the removal of oil subsidy in recent times has led to a reduction in purchases due to low disposable income of the average Nigerian. We have seen how the unification of the forex rate has meant that our cost of production will rise. Even though some of most of these policies of the new administration are positive and the team to do, they had led to our strategize in our reposition in our operations in order to be able to weather the storm. What we are not expecting is this hike, particularly because it is not based on any assurance or any indication or any anticipation of improved services. It will appear that in all this conversation what is being put on the table is just a hike and not how we are going to witness improved services. Okay, that is actually a very sad tale if you ask me, but let's talk more about the impact really on manufacturing vis-a-vis if we compare ourselves to the world. In your latest release, you noted that the unfavorable situation that is on the power issue has positioned the country among the worst countries to do business. Tell us more about that and where do we stand on that list really. Competitiveness is the key in all manufacturing efforts because once a manufacturer produces, he is interested in selling because you have no business manufacturing if only you are going to keep it on the shelf. And so when you compare yourself with countries, and that is basically what determines the ease of doing business. When you compare yourself with the countries that produce similar products that come into your country to compete or you aspire to compete within their own market through export, how you stand in terms of price essentially will determine your competitiveness. So in the ease of doing business and in choosing where to do business around the world, what you look at is how favorable that economy is, how welcoming that economy is. Elijah Alucudangute was credited to have said in a crap that we were just last week that he wouldn't go to invest in a country that makes life difficult for him. That's essentially what we have. And our ranking has placed us in the rock bottom of the pyramid where you have nations that have not paid adequate attention to reducing the cost of doing business and ensuring that it makes a place, a welcoming place for capital to flow. Some people have said that capital is very shy and it's a coward. It will not go to a place where it will not be able to freely operate, where it will not be able to produce at competitive rates and where it cannot predict what policies are going to govern the operating environment. That is the scenario that we have found ourselves and we are saying that we should not compound it by increasing those pain points that have led us to rank in those categories. All right, stay with the last release from Man that is manufacturers I expect in the federal government and the regulator that is a neck to ensure improvement in electricity generation transmission and distribution rather than increasing the tariff on the mere 4,000 megawatts. Okay, what do you think really can be done differently from the generation stage to eventual distribution? Okay, you know the power sector reform has actually laid down a lot of processes that should allow us to have a seamless operation along the value chain. What we have always had is that we do not have so much problem with generation and transmission that what we have with distribution at some other times we have been informed about how inadequate our infrastructure has been to support the transmission. So government over the years has invested heavily in the first two stages as a generation and the transmission. Then we had a game that in terms of distributing the power that the discourse have lacked the capacity, probably the, I do not want to say the competence, but maybe the capacity to effectively distribute. At a time we were able to generate 7000 megawatts, but the discourse was only able to weigh 5000. Now I believe we are down to 4000. So efficiency in the value chain is key. But more importantly is the ones that you have been able to generate, the ones that you have been able to transmit, you should be able to distribute. There is a lot of investment that is required, especially between generation and transmission. And I believe that the government that plays heavily in that sector should be employed upon to allow flow of investment into that segment, such that we will be able to generate enough. I mean Nigeria we are 200 million plus people and we are generating only 7000, we are distributing only 4000. You put a place like South Africa, the population is not up to 50 million, but they generate more than 45,000 megawatts of electricity. I believe that if government should invest heavily and allow private sector to participate along the value chain, happily the newly signed electricity act is going to help us in that regard, because it's going to allow more players to come in, it's going to generate a lot of competition, it's going to bring innovation into even other sources of power, and it's going to ensure that if you are inefficient, you will see a rapid replacement. I believe this is what the value chain requires, because if you have a monopoly operation, you are not likely to witness the kind of progress that you will have made. Alright, let's just talk about the new act which you have mentioned in passing, and of course you have said in previous releases that it is a welcome development. My question right now is that, is it Uhuru for the Nigerian Empower situation with this new act, and judging by the fact that empower supply is very capital intensive, and looking at the economy of most of them states, do you really think that they can actually meet up with all of the demands, not that power hasn't been devolved so to speak? Well, if you are talking of the sub-national, that's the states. I think let's look at the states for instance. Many of them have had to rely on the federal government for revenue. As a matter of fact, it's been said at some point that some states are not viable in the sense that they are not able to generate enough revenue to be able to meet their operations. Now you have huge population, and almost everybody in Nigeria requires power. So if the states are smart and they should be, power going into power, into playing in the power sector is going to give them a very huge opportunity to generate revenue internally. Because they would be able to augment whatever they get from the federal government, which has continued to dwindle in view of the downward trend in federal government revenue. If they are able to effectively partner with well-equipped, liquid and experienced players in the power sector to establish power, to engage in power generation and distribution as they've been empowered by the new law that everybody is applauding. So it would be a very good opportunity for them, apart from ensuring that they are able to generate a lot of economic activities that would generally bring income in payee and in terms of other fees and levies and all sorts of fees that they collect. It would, as a matter of fact, boost the economic development. It will boost even government operations and it will allow for the inflow of investment from all segments of the economy. So I believe that it is a huge opportunity for them. The only thing that they need to do is to be pragmatic and to focus on avoiding those challenges that we have seen that has plagued federal government operations in that sector. It should not be a license to bring in people that are not competent. It should not be a license to bring in people that do not have capacity, but just because of political connections and the advantages that they are able to derive. I mean, power is kept intensive like we said, so due diligence must be done to get people involved to support these things to do it. And it has also given opportunity for diverse investments in other non-sustainable means of generating power. The labor energy is there. We have some in abundance in most parts of the country. So there's a huge opportunity for investment in those areas. I still want to talk about the investment opportunities that you have mentioned because one would say that it brings about a thing of the public-private participation in all of this, even as much as most states of the economy are not really well. I want to understand really, maybe you can break it down for me, where the Manufacturers Association of Nigeria can play in terms of the value chain. You also mentioned renewable energy, maybe prepaid and metering and all of that. Where is man playing in all of this? Okay, so man as an organization has always been concerned with power supply to our members because I've indicated that it's between 28% and 40% of the cost structure of an average manufacturing industry. So you know that if we get it right in this area, we are likely to do well. So now what we have done is to establish a special purpose vehicle that we call Manpower Development Company, which basically interfaces with power providers and make it available to our members in clusters and in various industries. Because for us, the new law would empower us to make rapid progress in this regard. It then means that we're able to partner with effective power producers in our various industrial clusters so that we are able to have captive power that we'll be able to deliver to our members. At the same time also is going to give us an opportunity for power sharing because we have industries that are big and they generate their own power, but they are not able to share it with people within their vicinity. So I believe this will be a very good opportunity for us. It also opens room for us to directly engage those who can supply power and agree with them on how they can do something in the form of a bulk purchase or bulk supply to existing manufacturers. What I think is critical where we are able to play very well in this value chain is for us to be able to overcome the impediments that has continued to limit private generation of power. I think that is the major issue because for us, if we are able to get it right, it will tremendously increase our competitiveness. And I think now there is a lot of conversation that is going on between our members and us as to how we can best maximize the opportunities that have been offered by the new law. Alright, we must say a very big thank you to you, Mr. Shergo Ajai Khadri, Director General of the Manufacturers Association of Nigeria for spending time to break down all of the effect of the new proposed tariff and of course the new electricity act and how it will impact on manufacturers. Would you appreciate your time, sir? Thank you for having me. Thank you. Alright, and that's the size of the show for today, but just before we go, I'll leave you with this issue of brain drain, specifically in the medical sector, medical choice and how it has impacted on labor and Nigerians economy. Business Insight will return to your screen again tomorrow. My name is Justin Akadoni. Many thanks for watching. See you again next time. The Nigerian Medical Association says the country is now battling with its worst situation of brain drain as no fewer than 10,000 Nigerian trained doctors are currently practicing in the United Kingdom. To utter this dilemma, Nigerians seem to have a trust issue with getting medical services in the country. At this gathering, the focus is to provide an avenue for Nigerians to get world-class healthcare at affordable cost. So that when we talk about the standard of healthcare in Lagos, we're talking about access to all spectra of the society from low to middle to higher socioeconomic groups. And that we have put in place these kinds of standards where we are talking about one standard of care. Today's prevailing economic climate, both in Nigeria and abroad, the idea that individuals can simply jet off abroad is becoming an increasingly unrealistic prospect. Never mind the millions of the 200 million Nigerians who never had that option in the first place. So all of that plus what happened over COVID has forced us to look inwards. And that's where the story of reversing medical tourism begins. Many Nigerians have lost confidence in the country's health system because of the poor service delivery. Some, however, believe the challenge can be solved from top-bottom. The vice president, Professor Yamio Shibajo, may have walked in that direction. However, the Lagos State Government says it is imperative to have a strategic initiative to make the city a medical tourism hub. We need to begin to think very carefully, very creatively about how we ensure that we incentivize doctors, healthcare professionals to stay in this country and to return to this country. We need to begin to think also about how we use our allied healthcare professionals. And so our job in Lagos is to make sure that there's a standard of care across both private and public. And that when people talk about healthcare delivery in Lagos, that they speak with confidence, you know, that if I receive my treatment in Lagos, I know I'm going to get international best practices in that particular discipline. Interestingly, apart from lack of equipment and technical expertise, poor sanitation and disrespectful latitude of health workers and a perceived lack of confidentiality have been the sad narrative. This regardless, experts are confident that the tide is changing.