Folohunso: Costly funds, unfavourable tax policies hampering entrepreneurship
Muyiwa Folohunso, the Chief Executive Officer of Divergent Enterprise, promoters of one of Nigeria’s biggest pig farm, PorkMoney, in this interview with LEO SOBECHI examines the challenging investment climate in the country, as well as the diversification of the economy, among other issues.
What do you make out of the Federal Government’s efforts at diversifying the economy? How feasible and achievable is it?
It is definitely achievable. Diversifying the economy is probably the only option left for development, because the economy continues to rely so much on crude oil. The numbers speak for themselves. Oil accounts for about 80 per cent of government’s revenue and 90 per cent of foreign exchange earnings. And no country, especially one that is blessed with a lot of natural resources like Nigeria, can totally depend on one economic sector.
I believe there are great opportunities for non-oil sectors to grow, and the growth potential has been visible since 2001. However, the changes cannot be very quick and the transformation cannot happen overnight. But the Federal Government can develop different sectors by taking important steps necessary for growth to take place. We can no longer be a mono-economic country.
Does that explain your move into pig farming?
The idea of PorkMoney grew out of the desire to tap into a neglected sector of the livestock farming that has the potential to create value and change the agricultural ecosystem for good. Long ago before PorkMoney was launched in 2018, I visited a pig farm in Ogun State, one of the biggest in the country, and realised how fast the pigs grew and the viability of pig farming system in general. I knew this was something I needed to be a part of and I’m glad for the decision that I took. We are currently the leading pig farming enterprise in West Africa and our achievement speaks for itself.
Are there inherent bottlenecks in pig farming?
My visit to that farm was definitely a turning point. Before then, I was oblivious of the untapped goldmine that is pig farming. Every business comes with its challenges. One of the challenges we constantly face is the need to micro-manage casual workers from farm handlers, managers, production managers and other workers. Many of them compromise on set standards by cutting corners, especially in meat processing and livestock welfare.
Another challenge is the religious sentiments in this part of the world towards pigs and pork products. However, this was a more pronounced problem at inception and it is dissipating with time.
You were not deterred by religious sentiments regarding pig farming?
Not at all, in as much as there is a religious proscription of pork consumption, we cannot ignore its usefulness and benefits to our health and nourishment and just how lucrative pig farming is. I mean, Nigeria is a major consumer of pork, with 80 per cent of it imported. This means that a lot of people enjoy this animal protein. All we are doing is localising its production.
Can the negative public perception about pig farming be erased?
Definitely; one of our key responsibilities is to enlighten the general public about the great side to pig farming and communicate the many benefits of pork consumption. Somehow, our environment and the kind of information we were exposed to as a people have influenced our idea of certain things.
There are a lot of things we might need to unlearn as time goes on. So, by using all our platforms, including social media, our website and even our adverts, we have ensured that we always show the good sides of pig farming because they are much.
Are there possible health challenges in pork breeding?
We ensure that we take the appropriate steps to mitigate any possibility. We also take proper hygienic measures like vaccination, quarantine and bio-security, which keep our weaners very healthy.
With the current outcry over corona virus, would you say there are no associated diseases?
Livestock farming comes with a risk of epidemics; but if managed properly, they can be prevented. The great thing about pigs is just how resilient they are, compared to any other livestock, to farm. They are simply incredibly disease-resilient. Vaccines and disease surveillance have always been the bane of animal husbandry…? Livestock are very prone to diseases; hence the need to constantly take precautionary measures such as administration of vaccines and disease surveillance activities across the farm to prevent outbreaks. Very recently, China witnessed its biggest animal disease that claimed livestock and cost the country billions of dollars because of its flawed surveillance.
So it’s important for other pork-producing countries to take adequate disease surveillance and testing programmes to detect these diseases early enough and prevent a fast spread.So far, our farm partners under our management have taken adequate measures that have seen us not witness any outbreak since our launch in 2018. We expect that with our measures, this would continue to be the case.
What would you outline as the most limiting factors to entrepreneurship, especially for Nigerian youths?
Lack of initial capital is one of them. Aside that, the Nigerian environment is not too conducive and encouraging for budding entrepreneurs. Access to funds is one of the biggest challenges for youths in business. Another is the unfavourable tax policies, poor management, corruption, lack of training and experience, poor infrastructure and lack of specialised skills to scale one’s enterprise, none of which is insurmountable for a determined person.
Would you rate Nigeria’s Small and Medium-sized Enterprises favorably, compared to other countries like Malaysia?
The SME sector is the backbone of major developed economies and an important contributor to employment and economic growth. Malaysia is doing remarkably well when it comes to the business scene. About 98.5 per cent of business establishments in Malaysia are SMEs, which contribute 36.5 per cent to the country’s Gross Domestic Product and 65 per cent of the employment. This is impressive.
Despite the significant contribution of SMEs to the Nigerian economy (48 per cent), challenges still persist to hinder the growth and development of the sector. Some of the overriding issues are access to funding, lack of skilled manpower, multiplicity of taxes, and high cost of doing business. This proves that there is still much to be done.
As an entrepreneur, how did you overcome initial apprehensions, especially funding, and what areas have you exerted your ideas so far?
When I was starting out in business, I had no capital, training or resources to start my journey. The brilliant ideas were there. All that was needed to execute them was finance, which was lacking, but I had to start small and grow multiple businesses over the years, till I was able to afford the capital needed to start my current pursuit.