On the sideline of the inauguration of Akarigbo Corporate Council and Remo Distinguished Corporate Citizens award ceremony at Radisson Blu Hotel, Ikeja GRA, Lagos last week, chairman of Kotco Energy Limited, Dr Kola Oyefeso, a member of the Council, took time to share his views on the nation’s business climate and the Oba Babatunde Adewale Ajayi’s initiative to boost investment in Remoland, among other issues with SULAIMON OLANREWAJU.
What are your views on the economy?
You have asked a tough question. The problem is that we are just not ready for serious business as a country. As long as you spend over 70 per cent of your budget on overhead, you have less than 30 per cent to run the economy, so what do you get? Look at Lagos-Ibadan expressway, it is taking them decades to have it completed. The same goes for many other projects in the country because the bulk of the money goes to recurrent expenditure.
Another major problem we have is that our legislators that are supposed to be our servants are now our masters. Until we are able to reverse that, no good thing will likely happen. The National Assembly is not supposed to be a full-time job; it is supposed to be part time, legislators are supposed to be paid based on the number of days they sit. But that is not the case, they go there to do all sorts of things, and there is no accountability for that. We have to get it right.
The bottom line is that our budget on capital must be higher than the overhead.
What are the challenges facing the business community in the country?
The major challenge is high cost of funding. There is no company that can break even by going to bank and getting a loan at 23 per cent, and that loan is compounded. If you don’t pay in a year it is about 35 per cent. By the second year, if you don’t pay back it is about 40 to 50 per cent. By the third year it is 100 per cent. So, how do you break even? That is the problem. Once they can access money, at little or no interest, they will fly.
One of our major challenges in the country is unemployment, how can we combat it?
It is not only unemployment, we have unemployable graduates all over the country. We need a reorientation. Nobody is doing real core engineering. We need to take the youth off the streets, create the training centres of those days, to teach them what they can do on their own – crafts, carpentry, masonry, so many things like that. We have to train our youths to be productive. If we are able to do that, we will control the economy of the entire Africa.
How is Kotco Energy doing?
KotcoEnergy is the pioneer transformer company in Nigeria and the entire West Africa sub region.
Kotco was initially importing transformers into this country. From where we were importing those days, they were merely assembling. Even in England they only do the tank there, they get the core unit either from China or India. And they brand the transformers ‘made in England’ or made in anywhere.
We thought if they could do that there why can’t we do same here in Nigeria? That is what propelled us to do what we have done. What we have done is to establish a factory here so that we can be engaged in manufacturing and repairing of power and distribution transformers. With that, we are creating employment, we are servicing the energy industry that is the business sector, and we are happy.
I am over 74 years, and I am happy that I am giving back to the society. At my age, I should have no business going into manufacturing; I can put my money in a fixed deposit account and play golf every morning. But we set up Kotco Energy Limited with a view to creating jobs and improving the society. We thank God that He has been very faithful to us.
How can we overcome the challenge of epileptic power supply?
To overcome power challenges, you need a stable government for a minimum of 20 years, so that no government comes and truncates what the previous government has done. That is the problem we usually face in this country, policy somersault. When Obasanjo was there, he did a lot. When Yar’Adua came, he changed everything. Look at what we are getting today. The problems of that sector are too many. If you generate now, the transmission lines cannot carry it. The bottom line is for government to hands off. If government hands off there will be constant power.
But the government has already privatised generation and distribution…
What you have is semi-privatisation. If you say the sector has been privatised and you are still controlling the tariff, what have you privatised? Look, people are ready to pay more if the power is available.
What you use to run your generator in a month will pay your electricity bill for six months. So, if I can pay twice of what I am paying now as energy bill, and I don’t need to use my generator, I will embrace it. So, privatisation is the government handing off completely. If you control the tariff, investors won’t be enthusiastic to put their money in the sector. That is the truth.
What is your impression of the inauguration of Akarigbo Corporate Council?
Beautiful. It is a rapport with the business community in Remoland. The purpose is to create a council to interface with the companies that operate in Remoland in a manner that can improve the community relationship. That is the key, not to get them to donate anything but to help them overcome their challenges so that they can run more profitably because their success is our success. We want to work in harmony with them to facilitate their growth.
What is the motivation for any investor to come to Remoland?
One, the environment is friendly, security is okay unlike what obtains in many other places. Then again, it is cheaper to start a business in Remo. You can get an acre for N4-5 million. An acre in Lagos is about N200 million. If you come to Remo, you don’t need as much capital, so this is a key factor. Then, we have the manpower. And Remo is just 20-30 minutes from Lagos. So, in Remo, we have the conducive environment for businesses to thrive.