‘Buhari government is not engaging Nigerians enough’ – Shobanjo

The chairman of Troyka Group, Biodun Shobanjo is a happy man. He is growing his business to outlive generations. Shobanjo who loves spending time with his grandchildren, recently saw Troyka Group enter into equity partnership with Publicis Groupe, one of the world’s largest multinational marketing communications companies, headquartered in Paris in the bid to add more value to clients’ businesses. Shobanjo shed light on how government can take advantage of professional marketing communications to get public buy-in on its agenda. He spoke to Daniel Obi on a number of issues including the IMC industry, the economy and his company’s partnership with Publicis. Excerpts….

How would you describe business in the IMC industry in the last one year?

There has been growth in the industry, even if it is relative. When you take devaluation into consideration, then you feel in real terms it did not grow. You can feel that from the pulse of the players in the industry. It has been difficult to expand the market because the disposable income is low; therefore people are not able to buy as much as they would wish to. Prices have also gone up. Resultantly, it has been very difficult to expand the economy. Some people may say that the banks’ results didn’t seem to justify this position, but the IMC plays largely in the FMCG category and that is where a lot of clients did not meet their volume targets.  But all hopes are not lost. There has also not been growth in the media. This also seems to have constricted growth in marketing communications. If media rates are not high, advertising spend cannot be high. Though media rates cannot just jump because the publishers want it so, there should be empirical justification for any form of increase.

Apart from devaluation, what other challenges stunted the industry?

It is the general economy as in every country; government is usually the biggest spender. Today, government has not done that. The infrastructure that will help the economy to grow is also not there. Resultantly, the manufacturer who does not have electricity to drive his business cannot produce maximally as he wishes. If he relies on other sources of electricity, that would cost him a lot. This also makes the imported goods cheaper because the cost input for the local manufacturer is higher.

Some argue that the non-economic direction of the present government is also a factor. What is your view?

This government has not been in power for up to one year. I think the wobbling started before this administration and it has grown tougher because of what this government inherited. The reality check now shows that we are worse off due to dwindling oil price, decaying infrastructure, among other factors. What this means is that we have to hit the bottom before we go up again.

To you what are those solutions now?

We need to look inwards. If oil is selling marginally above $40 per barrel and government has benchmarked its budget on $38 per barrel, and oil is the major export earner contributing over 90 percent to revenue that tells anybody that we need to look inwards. The easiest way to climb up again is to focus on agriculture. That can contribute massively and absorb the human resources in the country in its value chain. There is huge opportunity for us in the agricultural sector, but we are a nation that likes to import things. We must change our attitude in the sense that those who currently eat foreign rice need to start consuming local rice. This will save us import bills. I commend Erisco for manufacturing tomato paste locally.

Do you think government is telling her story well enough?

Government is not telling the change attitude story enough. This is where our own industry comes in to it. If you want to motivate the consumer and change his/her habit, you must enlighten the consumer. The President and perhaps the ministers cannot reach everybody. There must be a way of reaching most people across all strata to change their attitudes and buy-in to the government’s agenda. It is not only about the agricultural policy but most of the things government is doing. Government is not engaging the people enough. This is not about propaganda but strategic communications.

Government is using forex to limit certain items from being imported instead of tax. Do you consider this the better route?

No. Dollar is not our currency, so why are we killing ourselves over it. Once we are able to add value to what we are doing, then you can ask people to pay the appropriate taxes. People see government’s move to increase VAT as punitive because government is not explaining why such action has become necessary. What government needs to do is to make the people buy-in to its policies. Government needs to reach out to the marketing communication professionals to help in making their communication understood. But government is rather waiting on communication industry operators to approach it first and the officials would regard them as begging for jobs. If government engages the professionals, they could even do the jobs on discounted fees in the interest of the nation.

Your company, Troyka remains strong, even in the face of challenging times, how do you do it?

The first thing is that we see opportunities where others see challenges. This is the secret behind the little success Troyka has achieved. Put in good context, 36 years ago, we started with one company and then all the challenges started coming but at each challenge, we saw opportunity. With this, we started establishing various organizations that will give value to clients in particular areas, so much so that in the marketing arm of our business, we have six companies. We are planning for the 7th one based on opportunities.  We need to help our clients to be ahead of the pack in this challenging time. That is why we are in business. We also take our time to find the right people to turn our dreams into realities. Growth is our number one priority. We started this business to be the closest partner to our clients, so that our clients can be the number one in whatever segments they play in.

Nigeria has been campaigning for FDIs but it appears they are not coming as expected. What is your take on this?

Foreign investors would like to come but they have their inhibitions.  With 170 million people, big economy, a government that is anti-corruption and democracy taking stronger root, Nigeria is an economy that cannot be ignored. But they are looking at certain other things like free economy and easy repatriation of their funds. But if we locals begin to add value and begin to export, the economy will bounce back and the FDIs will come. With what Erisco is doing, who said we cannot export our tomato paste?

If foreign investors are waiting on the fringes, then how did you manage to bring Publicis Groupe to invest in your company?

It is a reflection of the confidence Publicis Groupe has in this country, in our company and in Africa. This continent is waiting to take on the world. As a proof of that, today Publicis has representation in 50 African countries and in those countries, it has part ownership in 20 and total ownership in 11 and others are affiliate relationships. In 32 countries out of 50, Publicis has investments and it shows that the Groupe is preparing for tomorrow. They cannot look at Africa without looking at the largest country in the continent with the highest potential and finding people they can entrust things to. We struck this partnership after about three years of negotiations and due diligence. This is a symbiotic relationship.

Could you have allowed them more shares beyond 25 percent if not the APCON reform?

First we have to get the consent of the shareholders and comply with regulators requirements. But clearly Publicis wanted more.

Will your shareholders allow that in future?

Time will tell.

There have been mergers and acquisitions in the Nigerian economy, is that the level of confidence in the economy?

It makes sense to merge as it creates stronger entities. Acquisitions are happening globally and there is no reason that will not happen here. I think our attitude should change. Do you want a business that will survive or do you want to hold on to something that is small and remain small?

Why are Nigerians companies not merging with one another for strength?

Sometimes there is ego; sometimes there is ignorance. If we look at what is happening globally, then we must do away with these factors. Many businesses have died alongside the owners.  For us, we know where we are going to. As a private company we have chosen to partner with a global organization.

What are your expectations of this marriage on the IMC industry and the Nigerian economy?

With this partnership, we have become a part of over 76,000 professionals that work with the Publicis Groupe globally. We are the 109th country in the world where Publicis has operations. This gives us immediate access to tools, systems, processes and trainings that made Publicis such big organization. With those skills, it will impact on the service delivery to clients. I expect that this will impact the IMC industry because the skills will spread, one way or the other, as people and businesses are bound to take advantage of mobility of labour. The brands we work for will be the ultimate winners as they will be benefitting from this abundance of quality that our partnership with Publicis brings. This will definitely spread to the economy.

Daniel Obi