My grandmother was a fiercely independent minded woman, known for trading in fabrics. She didn’t know about feminism, but knew her rights as a human being and believed sternly that every woman must be the architect of her economic wellbeing. Every fortnightly, she could travel from Jamaare to Kano, in a lorry, a trip that we now do in less than two hours, usually took more than 10 hours. She could bring bags of beans, millet and groundnut to sell to grain merchants and comb the Kantin Kwari, Rimi and Kurmi markets, buying fabrics and associated materials to take back for her local store. At some stage of my primary school, I started to follow her on these trips during holidays and became fascinated with the labels of Made in Nigeria textile names such as Arewa, Gaskiya and the Dan Funtua, which we used for our school uniforms. In my class we used to compete as to who would produce the largest number of “Made in Nigeria” list from the fabric in local stores. When the Chinese descended with cheap fabrics, her business, went under with the collapse of the local textile industry. Today the local textile industry that provided employment for large number of people is still comatose. Instead, we have been trapped in what I call outsourcing in reversed mode, with its attendant negative consequences on the economy.
Outsourcing is the process of offshoring certain non-critical functions of a firm to another. Generally, globally outsourcing has flowed from countries with high labour costs to those that have lower labour costs. Yet, low labour cost with technology and advanced infrastructure are critical to leveraging outsourcing. This last condition provides a possibility for the flight of production from countries with poor infrastructure to countries with high technology for production. The trajectory of the textile industry and trade in Nigeria provides an opportunity to test a different type of outsourcing, that is Outsourcing in reverse mode. In this mode, we see firms (though mostly at the level of traders), partnering with Chinese manufacturers to produce textile and other related materials for them meant for Nigeria’s market. They exploit the availability of technology in contradiction to cheap labor to offshore production from Nigeria to China. This has seen the closure of many textile factories in the country as they are unable to compete with products imported from China in particular.
When the GSM network started to take roots in the country, the more visible names in the market were Nokia, Ericson, Samsung, Alcatel, etc. Before long, China came calling with cheap versions and took over the market. Again, we went for outsourcing in reversed mode, importing all manner of handsets meant specifically for Nigerian market and never developed the technological capacity to produce handsets locally.
This is in spite of the fact that Nigeria has the largest market for GSM phones in Africa. We also have the high level of utilization (what with our culture of long greetings, asking someone about his goats, dogs, etc), generating huge traffic for the network providers. The country has one of the top profits per line in the world, that is why companies like MTN could be pay huge fines and still love their Nigerian operations.
Instead of Nigeria, where conventional economics wisdom would argue about economy of scale, Rwanda on Monday 7, October, made a history by locally producing Africa’s first smartphones, Mara. On that day, President Paul Kigame of Rwanda commissioned the manufacturing plant of Mara Group which is producing two brands of smartphones: the Mara X with 16GB of storage, and the more advanced Mara Z with 32GB of storage. On that same day, there was a story that some company in Nigeria had started assembling GSM phones in the country.
As I sat in my hotel room in Kigali, Rwanda, that Monday afternoon after the commissioning of Mara facility, I could not but compare the trajectories of these two countries. Here is Rwanda, which only recently suffered a massive genocide and breakdown of society that saw millions of people killed, united and learning from the past, marching steadily, becoming the technology hub of African. And on the other hand, you have Nigeria, which suffered a devastating civil war many years earlier and still today wobbling to nowhere.
It is significant to note that there are important differences from the Rwandan feat to the reported assembly in Nigeria. First, Rwanda is not assembling: every part and component of the Mara smartphones are produced in Rwanda, meaning that is it 100% production. On the other hand, the effort in Nigeria is assembly, meaning that parts produced elsewhere are shipped into the country and coupled together. Second, we are not just talking about any GSM phones but smartphones. The Rwandan novelty offers not only technology learning, employment and business opportunities and cheaper smartphones but also an integration with other sectors of the technology complex in the country. Ours is a conduit for capital flight out of the country and never offers opportunity for learning and integration. If anyone doubts this, he can look at the experience from Volkswagen Nigeria and other similar assembly plants.
We are quick to say that Nigeria has the largest number of known African millionaires, including the number in Africa, Dangote. But we do not have the equivalent of Ashish Thakkar, the entrepreneur behind Mara Group, the company that has engineered the Rwandan smartphone revolution. Mara Group is a Pan-African multi-sector business services company, operating in about 24 countries in technology and financial services.
Ashish Thakkar who is now 38 years old founded Mara Group when he was 15 years old with a $5000 loan. Today Mara Group employs over 11,000 people. While it is good we have been advocating for Not too Young to Run, I thing it is not bad to have a similar campaign for Not too young to build, build in the sense that Ashish Thakkar has built Mara Group.
But there are a number of stumbling blocks that makes the emergence of technology mavericks like Ashish Thakkar difficult at the moment in Nigeria. We have an import mentality both in government and outside government circles that privileges foreign products and services. A country that is led by trader-mentality rather than industrial-mindset will always think of importation.
We cannot create companies like Mara Group when you have to run on generators. For years, we have been pushing money into the power sector and each year the harvest of darkness seems to be increasing, with energy situation going from bad to worse.
Above all, we are a country in which government officials see every private led business as a prey for their insatiable fingers for easy money to fleece the venture until it collapses. Corruption cannot allow business that are not based on contract or subsidized by government to survive.
In spite of President Buhari’s repeated statements of commitment to fighting corruption, the impact is negligible that it is not worth the chest beating. While in Abuja, media attention has made mega corruption to go underground (but still making a kill), in the state capitals, corruption is as visible as the darkness from PCHN. We see corruption every minute, in every aspect of public life and those people don’t even care there is some attention about it in some circles in Abuja.
But even in Abuja, it is public knowledge that some key government officials are guests of EFCC and honour will have meant that they are never appointed to these positions they now occupy until their court cases have proved them innocent.
Sometimes you feel it is time to give up the fight because you are not sure who is actually fighting corruption or profiteering from it. Will you trust the police officer to arrest and prepare a diligent prosecution of a corruption suspect (he will rather get his share of the loot and bangle the case), or the Judge to listen and deliver judgement on the basis of the facts and logic (he will provide ruling for money) or is it an election official (who will alter election results for money). But we can also find these in every sphere of our life (students pay in cash or body to pass examination), job seekers paying to buy job offers, employees paying for postings, etc. No, this is not how Rwanda nurtured its technology and we cannot be there.
In Nigeria, we usually launch our products even before we conduct feasibility studies about them. That is what Hadi Sirika, the Aviation Minster confessed to doing. With all the fanfare, he announced the relaunch of Air Nigeria last year only when he got his second term as Minster this year to say that now the feasibility for the national carrier has been completed. Cheeky enough, because no one cared, not even the man in Aso Villa who got his mandate by assuring people that he would run a government not of con men and women but that is essentially what we are getting.
Yet it is time that we got out of outsourcing in reversed mode. We cannot develop the economy when we are creating thousands of jobs for other countries while watching unemployment continue to rise and with, it increasing poverty, and its attendant consequences of all sort of insecurity.
Y.Z.Ya’u is with CITAD Kano
