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| Mr. Ganiyu Ademola Dada |
A Nigerian American, an International Trade Specialist and President/ Chief Executive Officer, Kofa International, Chicago, a USA based Nigerian firm, Mr. Ganiyu Ademola Dada, who is also the former Chairman of Nigerians in Diaspora in the Americas and former President of Continental Africa Chambers, USA believes that the Nigerian economy should be far better than what it has been for a while now. He is therefore not resting on his oars to ensure that business owners develop to a stage where they can compete effectively with Multinationals.
In this interview, he talks about why Nigerian’s economy has been dwindling for years, how his company is poised to facilitate low cost interest finances for Nigerian private and public sector in order to develop the economy of Nigeria as well as to ensure that Nigerian companies attain enviable heights in the world market, what government should do to rescue the almost crumpled private sector in Nigeria and more
Sir you just came into the country few days ago. Can you let us into what brought you this time?
We are to deliver a multipurpose dredge from DSC LLC to Japaul Maritime, Oil & Gas Plc, the only Maritime company in the Nigerian stock exchange. We have been supporting the company since 2004 by facilitating low cost single digit loan interest rate for the company from US for it to buy equipment in order to be able to compete with multinationals in Oil & Gas industry using EXIM Bank program.
So we have at the moment given Japaul multimillion-dollar equipment, which they are clearing and amongst which is the one of the best dredges in Nigeria, if not in West Africa as a whole. This equipment could be used for multipurpose needs in oil & gas, environment, mining, etc. The dredges are equipped with staff quarters that can take ten engineers with offices, kitchen and other essential compartments.
They are state-of-the-art equipment and we are here to deliver, assemble and commission with our engineers from DSC Dredge in USA. DSC LLC is the undisputable leader of cutter suction dredge in North America and not just in the United State. So Kofa has partnered with them for the development of dredging industry of Nigeria.
Can you put a value to the equipment you just brought in for Japaul?
We would not want to do that but these are equipment that are worth millions of dollars. That is one of the prides of Kofa. We want to develop many Nigerian companies to be like Coscharis group or Japaul group in the sense that we just don’t sell but help companies to grow and be credit worthy so that they can have access to low cost finance from USA, to level the playing field for everybody so that a Nigerian company can compete with UAC,
Chevron and any foreign or multinational company from anywhere in the world, by borrowing at the same rate and buying equipment at the same price to help them at International biddings for projects. So we are proud with our relationship with Japaul. The company managed itself professionally to qualify for EXIM Bank program and we have been supporting it since 2004 and it has been growing very rapidly.
Do you support other companies apart from Japaul?
Yes. We had worked with many companies in Nigeria in different industries like Wattcon in manufacturing in Kaduna, ABG in Telecom in Abuja, Ibile Holdings Ltd wholly owned by Lagos State in Lagos and many other companies in dredging industry like Azikel Group in Bayelsa and Land Dredging Ltd in Lagos to grow too.
All these companies are using DSC Dredges too. And because they are using DSC technology for dredging, they are growing too. The 24- 24-23 meter digging depth dredges that we have supplied to Japaul will be the largest in the country with every facility to work for any oil & gas, any construction company or any environmental or Port dredging services and so on. And it can do more about two thousand cubic meters per hour if it is pumping sand alone.
How do you help Small Scale businesses with such finance?
We are not only for big companies. Japaul was not big when we started with it. But we are proud to be part of its success because it is into many things. But critically, we are trying to help small, medium, and large companies to be credit worthy so that those credit worthy companies will be the ones that are considered first before any other for low cost finance and through them direct foreign investment will enter the country.
Every day, money is looking for where to go in the United States and the Western world as a whole but these monies can only go to those that are credit worthy and those who have been doing things in the way of the Western world and direct foreign investment {DFI} will come through them into the country and continent. Today, we have 60,000 US companies operating in China; we don’t have many with the exception with the few US oil and gas companies in Nigeria.
You cannot count a thousand US companies in Nigeria. That is why our economy is not growing because everything we do is cash-based whereas the rest of the world is doing business on credit. And our interest rate here is above 25%.
For the last 15 years of Kofa using Exim Bank in Nigeria, we have never done anything more than single digit interest rate and it has longer tenure in the sense that has 5-15 years tenure to pay back and that is what real business needs to grow and not the trading aspect that the Nigerian banks are doing whereby they give you two years to pay and charge you 25%-30%interest rate.
So we have program for both small and large businesses from US ECAs. We have credit insurance for small companies. We have Bridge loans for traders and manufacturers for importing raw materials, traders for importing finished products for all kinds of different industries. As it relates to loan tenure, companies may borrow from two years to as long as 18 years for repayment.
For example, if you are in water treatment, you may have up to 18 years to pay back; if you are in medical you may have up to seven years to pay back, if you are in renewable energy, you may have up to 15 years to pay back and if you are buying equipment for construction, you have about five years to pay back and if it is mortgage, you have up to 20 years to pay back and that is the kind of things we need to follow if we want to develop in this country. So what Kofa is doing is taking one company at a time and using EXIM Bank program and other ECA programs to develop credit worthy Nigerian companies.
How does the EXIM Bank program works?
EXIM is the Export/Import Bank of United States and Kofa provides Ancillary Services to the Bank’s Programs by working collaboratively with US Consulates and Embassies in every African country and here in Nigeria too to help facilitate loans that are guaranteed by EXIM Bank to qualified Nigerian government agencies and private companies like Japaul, Coscharis and all other companies we have helped in Nigeria. That is to show that we can do for government and we can do for private companies but we mostly focus more on private sector.
What is the main objective of Kofa International?
The main mission of Kofa is to develop African economy, Nigeria inclusive with US funds and technology so that our economy can grow like that of the USA.USA has been creating about 225,000 monthly in the last six years and Nigeria can adopt and customise these programmes to create at least 250,000 to 300,000 jobs monthly. In last six years it w has generated over 12 million quality jobs and for that to happen in Nigeria, there must be single digit interest rate capital for Nigerians.
This capital is the blood of business without which, whatever people are talking about remain only as ideas when there is no capital to do it. But the right capital with low interest loan with long tenure is what the economy needs and what Kofa is doing all over Africa but more importantly in Nigeria, is to create as many credit worthy Nigerian companies that can have capacity to leverage and borrow more money from abroad.
And more importantly to do business in the Western way whereby they would be credit worthy and be able to attract capital to expand the economy of Nigeria so as to be able to create jobs for youths that are coming out if schools. We wants to help Nigeria in the transformation of the economy from the current distributive and consumer economy to a manufacturing and export focused economy capable of producing enough for consumption and import less to be able create jobs opportunities for the youths and unemployed graduates in the country with the use USA Technology and fund.
Therefore Kofa provides global business and financial solutions to African government and private sector African Importers that are willing to take advantage of US quality products and low interest loans with long tenor for the development of Africa with the use of American ECA programs and Private Fund Lenders and Investors. All sectors of industry are qualified to benefit from the programs.
Why must Nigerian business owners go all the way to the USA to borrow funds for their businesses?
There are so many reasons they may have to go to the USA to borrow money. Number one is the cost of capital in Nigeria is so expensive because they do not have enough funds to meet the demand of the population–supply and demand. Two, for whatever reason, we unfortunately do not manage our economy very well because of so much leakages, which has brought so much austerity and kind of lack of sufficient foreign reserve for us. So serious business owners must have access to offshore line because the foreigners that come here, have advantage over local business owners.
For example, an American company coming to do business in Nigeria is getting his loan say for single digit interest rate – 5%, 7% intrest rates and so on while a Nigerian counterpart will get his Own for 20% to 25% interest rates. Now a foreigner who gets loan at 7% interest rate has got over 10% advantage over a local business owner here, so that local business person can never compete favorably and that is why Nigerian Economy is in the hands of the foreigners because they have advantage over local people.
So if you want to be able to compete with foreigners from all over the world, then you have to have access to the same type of loan they have access to because if you want to buy products from the same manufacturer and your cost of capital is different, you are already at a disadvantage. That is why only these companies that have access to foreign loans and have sacrificed to develop themselves to that level can compete.
So what does it entails for a company to benefit from this programme?
It entails financial discipline and literacy. EXIM Bank has made possible for US companies to facilitate finance for Africans, which Kofa is one of them.. Meaning that we market EXIM Bank programs to foreign byers all over the world. Kofa just choose to concentrate on Africa. What Kofa does is to identify the leading companies in each industry in United States and Kofa put money behind them to supply credit worthy African government and private companies in Africa.
And you grow them to the extent that they are continuously credit worthy. In Nigeria people do business on cash and carry basis and on the personality involved and therefore there is no succession program whereas in the Western world, when a company has established a credit worthy business when the leadership changes, the credit capacity still continues and increases progressively.
So when anybody has an international company profile and an international credit profile, you can borrow from anywhere in the world that is the fundamental requirements even though there are other thins more. So any company, organization or individuals coming for the first time must have a Nigerian Bank to guarantee them until they develop their credit worthiness abroad. Once they are credit worthy, they would remove guarantor and then they would be lending money directly to them like Coscharis and Japaul is enjoying today.
We want to develop over 10,000 Nigerian companies that will be credit worthy so that direct foreign investment can come through them from abroad into the country and then our private sector economy can expand because that is where we have problem today. The banks are running after public sector where they are making so much gain. Really, Nigerian banks are supposed to be educating people about this but are making it a privileged knowledge for a selected few because they do not want to lose their customers but that is the only way Nigeria economy can grow.
Have there been challenges trying to achieve Kofa’s objectives?
Well, there are lots of challenges. Credit culture is alien to Africans and Nigeria inclusive. People don’t want to incur debt. In the Western world, if you are not credit worthy, you cannot survive. But here in Africa we do not know the value of credit worthiness. So as a result, it is difficult to find many Nigerian companies that are credit worthy.
And when you find those that are ready to develop their credit worthiness, Nigerian banks make it difficult for them, because they do not give them the necessary support to succeed because they do not want them to get away from them, which is shortsightedness. We need to develop the private sector and get many people that are credit worthy because that is the only way that we can leverage on to get more funds into the country to develop our economy and grow the private sector in particular.
So Nigerians banks are problems too. The community too is a problem because a lot of people do diversions and frauds. They do not pay back unless you get a bank to guarantee them. A lot of people want to participate but they do not take enough discipline to qualify but fortunately enough, we are moving one at a time.
In other word, lack of credit worthiness is what is responsible for a lot of business that comes up but dies suddenly because they are unable to sustain themselves?
Yes. One of the ways we want to help Nigerians now is that since we have been very successful in using DSC Dredge in particular to help many Nigeria, we want to first of all have dredging equipment through credit program, so we are now using that because Kofa has been responsible for facilitating finances for all buyers of DSC dredges in Africa.
And at the same time, as they buy this equipment, we turn them to credit worthy companies and once they enter the world of credit worthiness, they would continue to use that forever and they can use it for other industries. DSC LLC is a reliable company and as a result of that we are working with them to make Nigerians credit worthy so as to be able to grow their businesses in the Nigerian dredging industry. We want to develop the Nigerian dredging industry through this.
What would be your advice to Nigerians, the government and business owners?
As far as Nigeria Economy is concerned and as a former chairman of Nigerians in the Diaspora for four years, that engaged the Government of Nigeria, Ministers and Commissioners who come to the United States, on how Nigerians in the diaspora can work with Nigerian professionals and government agencies locally for the development of Nigeria, we have realized that the Nigerians abroad and those at home must work to together.
Nigerians abroad have access to a lot of things they could bring into the country unfortunately, our politicians here are part of the problems of Nigeria because they put their salaries and emolument beyond any other country in the world when a lot of people are suffering out there. The politicians are not supposed to be competing with the business owners in Nigeria.
You find that the same people that are supposed to create laws and conducive environment for businesses are the ones competing with business owners in Nigeria thereby getting all the businesses and all the money. The politicians are struggling with business owners even when nobody in the world gets the kind of money they vote for themselves but the worst thing is that when they get these businesses / contracts, they would not execute them but they get the money on top of the excessive salaries they are getting.
So how can they create laws to control themselves? So that is why Kofa is focusing on the private sector, giving them capital so that they would be able to expand their businesses. Nigerian banks too have roles too play, which they are not playing, Bank have to educate Nigerians and at the same time pay attention to the private sector rather than focusing on government agencies alone instead of the private sector.
That vacuum is what Kofa and other diasporas are focusing on, to be able to educate individuals and private companies so as to grow as many business people that are credit worthy so that direct foreign investments will flow them into the country and they would be able to grow like other established companies in Nigeria. Nigeria must free up fund from the recurrent expenditure to use for development.
Conclusively, there is low cost finance from USA for every industry in Nigeria. Kofa is using this approach to integrate Nigerian Economy to the global western economy by turning our economy from cash based to credit based to have access to large capital from USA and the western world to grow Nigerian economy.
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