Understanding the challenges for Nigerian businesses

Nigeria's infrastructure investments are vital for businesses to grow, says Global PFI's Dr Mko Balogun

Transcript

“Every time there is stability… there is growth,” says Dr Mko Balogun, CEO of Global PFI, a Nigerian facilities management company: “The result of the elections and the result of the leadership that is coming up in Nigeria will transform into great developments.” He explains the challenges Nigerian businesses face – from infrastructure to terrorism – and what is being done to address business needs.

European CEO: Nigeria has one of the most promising infrastructure markets in Africa with a rapidly growing population and expected growth rate of over seven percent, driving the country’s development. And with growth like this an equally burgeoning industry is that of business maintenance and management services.

With me now is Dr Mko Balogun from Global PFI: one of the leading companies in this industry.

Well Dr Balogun in terms of infrastructure, how has Nigeria developed over the past decade and what the challenges that are still there?

Dr Balogun: The infrastructure markets have been growing. Basically what has helped the economy and the country is the government is focus now on PPP, (Public/Private Partnership) we’ve seen a lot of states develop roads through PPP. We have an airport that is private; we have the maintenance management through PPP.

So basically the economy, the industry is growing. The infrastructure development of the economy is growing. The government spent a huge sum of money, trying to improve infrastructure. For the economy to grow at the level it’s growing – at seven percent plus – power is important.

Government is also spending heavily on power but at state and federal level, a lot of privatisation has gone on the power sector which is major infrastructure for the country to develop – on building up the power system – just like what happened to the telecoms. We have generating companies and distribution companies being privatised by the government, which is also helping the development in the country.

European CEO: And how has your industry grown alongside this and how popular would you say it is?

Dr Balogun: The industry in the last five years has grown tremendously. One of the indicators for us is the fact that there are more opportunities for players in the industry. There are also foreign players coming into Nigeria to play, which is positive, which is an indication that there is recognition that there’s growth in this industry.

Continuous stability of the Nigerian environment has helped the real estate development to continue to grow. We had more commercial buildings coming up. We have a lot of industries growing in the country.

Judging by the growth rate of the economy, we agree that the country is on the right track. We have had issues as a country. Luckily for us we had a successful election. We believe that will be continue to stabilise the way the country is run and also how the industries and other areas of the economy to continue to grow and that the industry is not left behind.

European CEO: So what services exactly do you offer and how does this correspond to value for money?

Dr Balogun: As a business we are one of the few organisations in the industry that offer integrated facilities environment on one site. By integrated I mean: providing end to end service for companies, which operate offices, commercial offices.

We typically provide from reception management to soft services to hard services. Soft services from reprographic, providing tea, providing other services for the office to run. To hard services: providing electrical, mechanical maintenance. Most of the organisations we work for, we go beyond just the definition of the service provision as agreed in our terms.

We focus on innovation for the organisations we work for, service improvement, environmental improvement in the way we work. Typically we look at how we can improve energy management, how we can improve environmental management.

How we can reduce the cost of running buildings. And we have successfully done that in a lot of organisations. We have contracts that are running five, seven, eight years -which is an indication of the companies we work for are getting value for money and that is why they continue to keep us and work with us.

European CEO: You actually work within many industries, what challenges does this represent, and how do you adapt to client’s needs?

Dr Balogun: Our business model is not cut and paste. We believe in sitting with our clients to understand what their challenges are, what their needs are. We provide solutions that meet their needs. That is why they accept us.

Yes, we do multiple industries. Challenges we don’t see that much challenges; we have to see them as opportunities. We’re a solutions company; we are not a fixed-service company.

By that I mean: we sit with you and try to understand how you want your business to run, what impact do you want us to have on your business. What areas of touchpoint you want us to have in your business, we work with you to achieve that. And, that’s as evidenced in the various industries in which we work.

European CEO: Well this must give you a really interesting insight into which industries are bullish – so what trends are you seeing?

Dr Balogun: Commercial industry is growing. There’s a lot of commercial development in Nigeria. There are opportunities also in industrial. We worked with an industrial company. There are opportunities in infrastructure, currently working on two projects, which are rail-related.

These are areas we believe will continue to grow. There are opportunities in the aviation sector; unfortunately it’s still completely dominated by the government. But we feel that in the future, these are areas that will open up for practitioners in our industry.

European CEO: So of course Nigeria is plagued with a lot of social unrest and terrorist attacks – so how do you deal with security issues?

Dr Balogun: From the fallout of the Kenyan mall attack that led to a lot of changes in the way security is managed in Nigeria. Nigeria is seeing growth in mall development, so for us, of course, security becomes very important. Also we have issues of kidnapping, we have issues of disappearance of people. For us security has become more important than never.

Not just on the physical security but also ensuring the electronic security of people with managed residencies. We secure people’s homes. We manage offices, we managing industries. So for us it’s important, it’s heightened.

We’ve changed the way we operate, the kind of vendors we work for in the security sector, to ensure that we have the best people to work with, who understand the environment and who can respond immediately to threats.

In recent elections, we created a system for all the businesses we worked with to ensure the security in their compounds and their buildings, in case of an emergency. And we were fine.

European CEO: Well, finally considering the change of power in the country, will this have any major effect on the property market?

Dr Balogun: A positive effect: Nigerians are looking forward to the new government. Because of the kind of person who is going to lead the country, there are already positive effects, generally, in the economy. Every time there is stability in any country, there is growth automatically and that we have with Nigeria.

We believe that the result of the elections and the result of the leadership that is coming up in Nigeria will transform into great developments within our industry and in all the sectors of our economy.