BY Lekan Fatodu
As someone who is usually attracted to issues surrounding development and entrepreneurship, any public conversation in that direction becomes a ready meal for me. And the reason is not far-fetched. I have taken special interest in global development since my school days. Thus, I’ve waded through several relevant literature and attended seminars offering better and more practicable ways to solve the problem of poverty and inequality in our world.
Beyond my personal arduous undertakings in the entrepreneurial world, literary encounters and the experiences of others have proven that entrepreneurship is not a gun for the gutless. “No one said building a company is easy. But it’s time to be honest about how brutal it really is – and the price so many founders secretly pay”, is a line from one of the foreign online-opinions on the agonies of many startups I’ve come across. The brutality therein, I am convinced, is more pronounced and at a greater degree in Nigeria.
Few days ago, I came across the public statement made by the Chief Executive Officer of AMG Petro-Energy Ltd, Abba Murtala-Muhammed. In it, Abba -the only surviving son of late former Nigerian head of state, the iconic General Murtala Muhammed- talked about his travails in business. And I couldn’t help but wonder: if Abba could feel such heat in our business world, wouldn’t the rest of us be ripped apart?
Before seeing that statement, I had gleaned some news materials about the challenges faced by the Kano-born businessman. In one of the reports, it was alleged that Abba had gone bankrupt due to failure to pay his lenders, two leading Nigerian banks. Hearing the lamentation from the horse’s mouth, more than anything else, underscores the severity of the situation entrepreneurs find themselves in Nigeria. Even though Abba had fobbed the tale around bankruptcy off, and had stated that his company’s financial nightmare was actually caused by an oil giant, Total Nigeria Plc, which didn’t play by the rule, the truth is there exists an issue or several issues. These issues run so deep that they have swallowed, albeit prematurely, a lot of budding ventures in Nigeria. Many potentially great startups and enterprises have folded up under dangerous circumstances similar to Abba’s AMG Petro-Energy Ltd.
With interest rate on borrowing running between 27% and 30%, adjudged the highest in the world, one must have a heart made of steel or magic wand to drive business to stability and profitability in Nigeria. Quite naturally, this has deterred a number of genuine business people and creative innovators from participating and unlocking opportunities in various areas of the economy.
Chief Audu Ogbeh, a ministerial nominee, gave a poignant portrayal of the scenario during the senate ministerial confirmation hearing. He said, “Nigeria’s interest rate is the highest in the world. How can you do business and make money. Except you’re into cocaine or some very harmful drugs, you can’t make profit with Nigeria’s high interest rate”.
However, I doubt that Chief Audu Ogbeh thought that Nigeria’s abundant crude oil is a type of “harmful drug” for some people in Nigeria. It yields worthy (or unworthy as the case may be) dividends regardless of the interest rate that is on offer to begin the trade. The more reason the industry is filled with many mediocre operators, unscrupulous regulators, conniving lenders and scornful international oil companies who cart away all the goodies while the genuine players in the infamous circle are made to suffer unjustly with little or no effective framework to safeguard their operations and investments. The industry itself is at the mercy of these scavengers.
According to Abba, his company’s predicament with its bankers was a fallout of Total Nigeria’s failure to remit, to his company, an additional income it realized from sales of petrol it supplied to Total based on certain agreements. He has since gone to court to seek redress, and also called on a relevant regulator to come to his aid. “Notwithstanding the suit, we still appeal to the PPPRA, as industry regulator, to come to our aid in addressing the issue with Total and ensure that justice is made to our company and, ultimately, Guaranty Trust Bank is reimbursed by Total”, he pleaded.
Even though the matter has gained considerable attention in the public, Abba will never cease to renew his call for support to save his company. Amongst other things, he is compelled to protect his company’s reputation, family name and assert himself as a competent business manager who unfortunately is confronted with avoidable arduous circumstances. And he needs to respond decisively.
But then, imagine a lot of founders and business owners in similar conditions as Abba. And they abound across the country. Many of them are without names that ring a bell that could stimulate public sympathy towards their plights. As such several are held down by the whims and caprices of some “almighty” entities, particularly the behemoth in the oil and gas industry.
On the strength of the foregoing, there has never been a better time for the passage of legislations and implementation of policies that will sanitize, and further strengthen the sector than this moment. All such legislations and policies should seek to protect not only the investments in the oil sector but also in other critical areas of the economy.