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Quest Means Business
Nigeria Faces the Future; Nigeria's Economy Pressured by Oil Price Collapse; Repairing Abuja International; Nigeria Launches First Smart Phone; United Settles with Passenger Dragged Off Plane; Nigerian Government Raised Tariffs on Imported Cars
Aired April 27, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN ANCHOR: Hello and welcome to "Nigeria at a Crossroads." I'm Richard Quest in Lagos, Nigeria. Behind me Tinubu
Square, the heart of the central business district, where I find the Central Bank of Nigeria and all the big towers of the large companies.
This is one side of Nigeria as it moves into the 21st century. But the challenges can be seen on the other side. Yes, there are stalls with lots
of mobile phones for sale, and no doubt about it, technology is rapidly moving into the economy here. For example, this is a common sight. People
on computers everywhere. But then this is also a very common sight, power generators, just about everywhere. The supply of electricity is
intermittent at best. Keeping the lights on is one of the biggest challenges facing companies big and small and just about every consumer.
Put it all together, yes, Nigeria has a new government. Just some two years old, with an ambitious reform plan and program. But it's a sign of
how big the challenge is that whichever way they turn, there are obstacles, seemingly insurmountable.
It doesn't matter if it's day or night, it is warm. Tonight, it is hot. We are in Lagos, Nigeria, for tonight's edition, and tomorrow's, of QUEST
MEANS BUSINESS. A very good evening to you from Nigeria's largest city. I'm Richard Quest in Lagos. And we are delighted to be in Africa's most
populous country and largest country.
It has been a rough 2016 for Nigeria. The country went through a recession. That much is known. But now things are back on track. Growth
has returned, albeit modestly. The IMF has given its blessing to the economic plan. And the president, President Buhari, announced he's seeking
$7 billion in investment from China and the World Bank. The goal is to improve the nation's rail infrastructure, to help economic recovery in the
northeast, and some of the steps out of recession.
There are three principal roots that we're going to talk about tonight, because we are not here to harp on about the problems and the difficulties,
the issues of which they are well-known. In these editions of QUEST MEANS BUSINESS, we're going to be talking about the potential, the future, and
what needs to be done to realize it.
The president's plan, the diversification for the economy away from oil. Create a domestic industry that will help manufacturing and infrastructure,
the improvement to move it all around. In this hour, you're going to meet the king of African oil, Wale Tinubu, who will be with me next. Funke
Opeke, the cyber revolutionary connecting the country. We'll talk to the head of Nigeria -- the head of Toyota in Nigeria. We'll show you the
manufacturers of Nigeria's literally home-made cellular phone.
It's a population and an economy that is powered by oil, 70 percent of government revenues come from oil, 90 percent of experts. So, when the oil
price fell sharply in 2015, Nigeria was well and truly clobbered. To the extent, it drove the economy into recession. Just look at the price of
Brent crude. Brent over the past three years, in 2014, $108. 2016, $27 a barrel. Today it's at $51 a barrel, better than it was, but not good
enough. One group rallying despite the falling oil pricing, joining me now is Wale Tinubu, the chief executive of Nigeria's largest independent energy
conglomerate. Good to see you, sir.
WALE TINUBU, CEO, OANDO: Good to see you, Rich.
QUEST: How serious was the energy crisis and how much better is the situation today?
[16:05:00] OANDO: I think the energy crisis took everybody by storm. Nobody expected the price to collapse. Nigeria is an extremely resilient
place. We all took the shocks, prepared ourselves for it. A year and a half, two years down the road, we're back to rising.
QUEST: Back to $51. What is the price ideally? We look at OPEC, with production cuts. Ideally, what would you like to see a price at? What's a
satisfactory price both for the government and the private sector?
OANDO: I think a $70 price is --
QUEST: Good luck. It ain't gonna happen.
OANDO: Well, you never know. One thing you need to understand is there's a national decline of approximately 15 percent. And there is growth, there
is at least 900,000 barrels a year by oil growth coming from the developing world, particularly Africa, Asia. And what you will find is that the oil
price will rise because there's been very little investment in the last three years.
QUEST: If we talk about -- at the beginning of my report I pointed out, everybody's got a generator. This hotel has five generators. There's
generators galore. Why does Nigeria have an electricity problem? Is it the generation problem in terms of generating power or is it a transmission
problem and distribution of it, what needs to be done?
OANDO: No, I think it's a philosophy. It's really not about generation or transmission. It's about the fact that as the population exploded, we
failed to privatize electricity early enough that shocked the capital. The government can't do it alone and we need for public/private initiatives to
be able to drive the sort of investment in infrastructure Nigeria needs. Unfortunately, there's been too much reliance on government spending. And
that's really what has slowed us down in terms of developing infrastructure.
QUEST: The government is two years -- two or three years into, another two years, next election is 2019. Are you satisfied with the rate of reform
that they've managed to introduce?
OANDO: I don't think anybody is satisfied, period, about anything. The issue is that this government came on the principles of corruption,
security, and the economy. The truth of the matter is they've dealt with corruption first. The security of the country. And the economy was
potentially the third thing they started tackling. I think there's an economic recovery plan. There are several big winds we are facing in the
oil industry. That's a move towards encouraging the public sector and private sector towards driving more. Plus, the diversification as you
mention.
QUEST: Let's just finished on diversification. Saudi has its 2030 plan. Qatar, which has vast funds, you know, is diversifying. Everybody is
diversifying or attempting to diversify. How realistic -- Nigeria, it should be possible. You've got 170 million people. You've got industry in
various parts. You've got agriculture. You have the potential for diversification, don't you?
OANDO: Yes, but also, we've got the resilience of showing we can do things. If you look at the fact that -- this is the largest telecom market
in Africa, 130 million lines. This is the largest markets of the oil sector. This is the largest industrial center by virtual of the production
we have in terms of what we can achieve. I have no doubt about the fact that we can do it. The real issue really is to have the right economic
policies.
QUEST: Finally, sir, you would recommend that we should be optimistic?
OANDO: Without a doubt. I think that one thing the country has shown is its capacity to reinvent itself. We're into four years of terrible
corruption in the last administration. It was reversed. We had an election, OK? No guns, shots were not fired. We changed our president.
Democracy is in place. Institutions are working. And I see a great future for our country.
QUEST: And we're grateful you came to see us this evening, sir. Thank you very much indeed. Many thanks for joining us.
To the markets and how they traded during the session. A slew of earnings that took place after the bell. Alphabet, I still can't get used to
calling it Alphabet, it's Google for me. Amazon, Microsoft, Intel. We have the tech NASDAQ which is rising to a new all-time high. The Dow Jones
finished pretty much flat at the close. Paul La Monica is with me to put the numbers together. Paul, earnings season and tech numbers that we've
had, how are they looking?
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: They are looking for newer tech companies to be pretty strong. Google -- I'm with you, Richard, I can't
call them Alphabet with a straight face -- their stock is up after hours. Because earnings and sales beat Amazon, very strong results and that stock
is surging. People are now going to be wondering, it might not be long before Amazon shares hit $1,000 a share, which is amazing. And Microsoft
and Intel, they were not fantastic. Those stocks are down a little bit. So, it will be interesting to see how the market reacts tomorrow. Those
four companies I mentioned combined have a market valuation of $1.75 trillion.
[16:10:05] QUEST: Ok. In that scenario, you know, the NASDAQ is at an all-time high, riding on the back of those numbers. But the Dow and the
broader market, the S&P, that is still being buffeted by the economic issues and the -- I mean, the tax plan from the president, the trade talks
from NAFTA, which we'll talk about later in the program. We are having I won't say a bifurcation of the market, but there's certainly seemingly a
split.
LA MONICA: Bifurcation was a fancy word a lot of people used in the late `90s to describe tech and the new economy outperforming the old economy. I
think here what's interesting, is that politics, ironically enough, is boosting tech. Because everyone is expecting a tax reform plan from
President Trump that allows all those tech companies to bring cash back to the United States and use it to invest. Whereas some of those older
companies that had thought to have been Trump favorite, energy and financials in particular, they have actually pulled back. Oil stocks were
among the worst performers in the Dow this year, and big bank stocks aren't faring all that well either.
QUEST: Paul La Monica in New York, thank you. Paul, never mind the closing bell on Wall Street. You can stick your closing bell for tonight.
Today, here in Lagos, I got to ring the closing gong.
Yes, they hit a gong at 2:30 in the afternoon. I didn't want to give it a good thumping at the gavel like they do at the New York Stock Exchange, I
was rather fearful I would break the gong. I was a great honor today, to be asked to do it and I was very grateful to do it. The market was up half
a percentage point, and one trader even went as far as to suggest that yours truly might be responsible for the gains.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Maybe, on the lighter side, the boisterous character of Richard Quest, is also reacting positively on the markets.
(END VIDEO CLIP)
QUEST: So, there you have it, Paul La Monica, you may be our guru on QUEST MEANS BUSINESS, but these emerging markets like Nigeria, which is very
heavily down from its all-time high, showing progress, reforming the market, and seemingly doing well, Paul.
LA MONICA: You're like a central bank chief. People talked about the Greenspan put, the Bernanke put, the Yellen put. We've got the Quest put
now, I'm jealous. There's no La Monica put. No one's talking about that. But all the joking aside, I think there are hopes that emerging markets
like Africa and larger emerging markets such as China and India will help lead the global economy higher. And even though there's tension between
many countries and President Trump, the pragmatists in the Trump administration hopefully will win out and realize you can't ignore all
these markets with all their consumers and a burgeoning middle class.
QUEST: Paul La Monica, we will have the La Monica effect, I promise you, before the day or the week is over or the week is over. Thank you, sir.
LA MONICA: Thank you.
QUEST: Thank you, sir.
As we continue tonight, when we come back, from railways to airport infrastructure, Abuja International has cleared for takeoff. The planes
are flying there again. But what does it say about this country's ability to do these large-scale infrastructure projects?
Also, two phone calls that changed President Trump's mind when it came to NAFTA. He says he's staying with NAFTA for the time being. It's QUEST
MEANS BUSINESS. We're delighted tonight to be in Nigeria.
[16:15:00] (COMMERCIAL BREAK)
QUEST: Welcome back. QUEST MEANS BUSINESS. delighted to be in Lagos, in Nigeria tonight.
Getting trains and planes at Abuja International airport. Investment is needed for rail infrastructure. The government announced it would seeking
some loans up to $7 billion from the Chinese to help pay for it all. However, Abuja International airport has become perhaps a watchword not
only for what's going on wrong, but how to put things right. An airport that had to be out of commission for six weeks, because long delayed
repairs had finally made the airport dangerous.
(BEGIN VIDEOTAPE)
QUEST (voice-over): This is what happens when you wait too long to fix a runway. After years of bumpy landings and complaints from airlines, Abuja
International was forced to shut down completely for six weeks this spring, while urgent repairs were carried out.
LARS RICHTER, JULIUS BERGER PROJECT MANAGER: The possibility was that maybe by the end of the rainy season, we have to close the airport
completely.
QUEST: The work was completed a day ahead of schedule. Still, this sort of carrying on is unheard of. The capital of Nigeria was without its main
airport for more than a month. Officials say the aging infrastructure just couldn't handle the strain.
HADI SIRIKA, NIGERIAN AVIATION MINISTER: This airport was designed for 100,000 passengers per annum. Today it's doing 6 million.
QUEST: This runway was designed to last 20 years. It's been in operation now for nearly 35 years. A second runway is badly need. It's a prime
example of how Nigeria is struggling to provide key services to its people.
JOHN CAMPBELL, FORMER U.S. AMBASSADOR TO NIGERIA: It's the result of chronic underinvestment. The infrastructure problems are far more than
runways. The road network, for example, requires massive new investment. The deferred maintenance and underinvestment in infrastructure is
longstanding.
QUEST: China is sinking money into some infrastructure projects. Nevertheless, with a population expected to more than double to nearly 400
million people by mid-century, Nigeria's growing pains will only get worse. The country remains heavily reliant on volatile oil and gas. And the
collapse in oil prices plunged Nigeria deep into recession.
The economy is barely growing again. And the government has a new policy to diversify its economy and to aid the more than 60 percent of its
population living below the poverty line. At the same time, inflation is on the rise. The ever-present specter of corruption is everywhere.
CAMPBELL: Corruption is a fact of life. It runs through the economy in much the same way the east runs through dough.
QUEST: There are many hopeful signs. The IMF believes Nigeria's economy will grow by over half a percent this year as oil revenues rise. At Abuja
International, planes are finally taking off again. Passengers are happy to have their airport back.
UNIDENTIFIED MALE: Very sweet. Better than what we used to know.
QUEST: Repairing the Nigerian economy will be a much tougher task than repairing a runway.
(END VIDEOTAPE)
QUEST: Now let's put all this into perspective. My next guest is the woman behind Nigeria's cyber revolution. Good to see you. Thank you so
much for coming. Funke Opekei is the founder and chief executive of the MainOne Cable Company. You are putting fiber both regionally and
connecting Nigeria to the rest of the world. Tell me more.
[16:20:00] FUNKE OPEKE, MAINONE CABLE COMPANY: Indeed. We started the company in 2008, and laid a submarine cable linking Nigeria in Ghana with
Europe and interconnecting with networks across the rest of the world.
QUEST: How bigger challenge is it to get the investment necessary to first of all, to connect the country to the rest of the world and then to connect
within West Africa and domestically?
OPEKE: I thought what would be most difficult was the international part, which is the first part we took on to start the company. But what has
proven more difficult is actually getting additional funding to deploy infrastructure within the country, and the cost of that funding to do that.
QUEST: If you think you've got problems with the cost of your loans, you better have a stiff drink close by. How much are interest rates here for
loans?
OPEKE: Nibor, which is the Nigeria interbank rate, is currently 21.4 percent.
QUEST: So, if your pain over Nibor, you could be paying 25, 26 percent and above.
OPEKE: Indeed, and that's a going rate for commercial loans.
QUEST: Nobody, no company can for very long withstand that sort of pressure on their balance sheet on capital-intensive projects like yours.
OPEKE: And indeed, it is putting pressure and slowing down our ability to invest in domestic infrastructure to get the capacity we have in
international waters out through all of Nigeria and indeed West Africa.
QUEST: How important is it, though? I can see the obviousness, chicken and egg, which is better to connect, Nigeria with the rest of the world,
which would give you large commercial contracts from big companies, or Nigeria domestically, which would increase domestic production?
OPEKE: Both are equally important.
QUEST: Ah.
OPEKE: The thing is, the international bit gets Nigeria connected to the internet. And you cannot be separated from the global economy in this age
of globalization. However, the networks to distribute that in Nigeria are simply not growing fast enough. The infrastructure is not growing fast
enough to support the effective distribution and the reach of that infrastructure.
QUEST: I need to drill down on this point of infrastructure, because everybody says it. Whether it's the road to Apapa, whether it's fiber
between the various cities here, whether it's airports that we've just been hearing about in my report. Whose responsibility is it, and what needs to
be done to break the Gordian knot on infrastructure?
OPEKE: With regards to communications infrastructure, we need to find more cost-effective ways of deploying that infrastructure, more viable
frameworks. If we look at advanced economies, as data has proliferated, you've had different sets of regulations going in to facilitate sharing of
infrastructure and unbundling by the large wholesale companies, so that other companies can ride on that same infrastructure. And people are not
deploying proprietary infrastructure, which is expensive. Here, we deploy proprietary infrastructure, it is expensive, and it's not bringing services
to the people fast enough.
QUEST: So finally, I'm going to ask you the same question that I asked my previous guests, I asked them all. Is there room for optimistic in all of
this?
OPEKE: Yes, there's room for optimism, if you look at what we've achieved over the past seven years despite the odds. Then clearly, we see a lot of
appetite, addressable demand in this market and capacity to utilize what we have.
QUEST: Good to see you. Thank you for coming out on a hot night tonight and talking with us.
OPEKE: Thank you, Mr. Quest.
QUEST: No, thank you. Very kind of you to be with us tonight.
Today we are in Nigeria. We're talking about a country for in transmission and transformation. All this week we've been exploring another country
that's going through a similar, perhaps more advanced but at least well- approached. The position of course in Malaysia. Now, there the business community is having to balance cultural sensibilities with commercial
realities. And as I discovered on a recent visit to Kuala Lumpur, Halal tourism and Halal hospitality, you can have both.
(BEGIN VIDEOTAPE)
QUEST (voice-over): Halal is now a growing and important part of the hospitality industry. Step away from the iconic Petronas Towers and I
discover one of Kuala Lumpur's Halal certified hotels. Now, I'm curious to see, what does that mean in practice?
ISMAIL HISHAM AHMAD ZAMBRI, GENERAL MANAGER, PNB PERDANA ON THE PARK: This is going to be a Halal breakfast.
QUEST (on camera): I'm nervous. The fact you tell me I'm having a Halal breakfast.
AHMAD ZAMBRI: Yes, is the same.
QUEST: It looks remarkably normal.
AHMAD ZAMBRI: Yes.
QUEST (voice-over): As you might expect, all the restaurants and the kitchens on the property go through the process of being Halal-certified.
[16:25:00] AHMAD ZAMBRI: Processors meaning, who supplies the eggs, where do we get the sausage from, where do buy the hash browns from. So, this is
done by our Halal officer. He goes around and checks and make sure all of these are certified-Halal and we purchase.
QUEST (on camera): If the Koran is your basic operating procedure -- or the principles in Koran -- how far does the Islamification of the guest
process go?
AHMAD ZAMBRI: We don't go and check the room if they bring alcohol.
QUEST: You don't?
AHMAD ZAMBRI: No, we don't go to the extreme. It's normal. It's like a normal hotel.
QUEST: Throughout the property, there are subtle and tactful reminders that the hotel adheres to Islamic principles. For instance, at the
breakfast buffet, this sign, "Eat and drink: but waste not by excess, for Allah loveth not the wasters."
We could all agree with that. There's no need for long winded lists with rules and regulations, with a shariah law executive on staff, all the
business operations and the staff adhere to the same principles with Islam in mind.
MUHAMMAD AZHARI JOHARI, SHARIAH COMPLIANCE EXECUTIVE, PNB PERDANA ON THE PARK: I'm not just focused on kitchen and this is Halal. For example, we
are looking for training for staff and prayer with staff, housekeeping. So, how to make sure the housekeeping knows how to make a bed. And for
example, the amenities it provides must have Halal standard.
QUEST: The hotel may be Halal but that doesn't mean they're watching every move you make. Some guests do bring alcohol into the property. Now,
there's only one thing left to do. Retire to my room.
(on camera): Malaysia's best restaurant, 2015.
QUEST: As a non-Muslin, I arrived at this Halal branded hotel perhaps a little prejudiced, wary about what the experience would be like. And then
I realized it's like any other hotel. There's a lobby, a lounge, a restaurant, a gym. And with the exception of no alcohol, when it comes to
the bedrooms, there are only subtle differences. The core remains making sure I get a good night's sleep.
(END VIDEOTAPE)
QUEST: From could Kuala Lumpur in Malaysia to Lagos in Nigeria. No other business program give you such a worldwide preview.
And when we come back, we continue that preview.
President Trump now says he's not going to get rid of NAFTA. It would be a shock to the system. He's going to give it one more time. The building we
are in tonight, the intercontinental hotel, you can pretty much see it anywhere, the fairy lights. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:30:33] QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS from Lagos, Nigeria in just a moment.
Where going to also talk about President Trump says he will stay in NAFTA for the time being.
And were going to meet the two entrepreneurs here in Nigeria who have created and manufactured the country's first smartphone. Why on earth
would they bother to do that when there are so many coming from China?
But before all of that, this is CNN, and on this network, the news always comes first.
United Airlines has reached a confidential settlement with a passenger who was dragged off a plane on April the 9th. I'll have more details, we'll
talk about it after this news bulletin.
In London, British police have arrested a man on suspicion of planning an act of terrorism. The 27-year-old suspect from London was carrying knives
near the Prime Minister Theresa May's office and near the parliament building. A security source says the man was on the radar of
counterterrorism, before his arrest. No one was injured.
The Pentagon has opened an investigation into the former national security adviser, Michael Flynn. He's accused of receiving payments from a Russian
TV station without disclosing it. New documents also show Flynn was warned by the defense intelligence agency in 2014 not to accept foreign payments
as he entered retirement.
U.S. President Donald Trump has met with Argentina's president, Mauricio Macri, at the White House on Thursday where they discussed trade, security,
and Venezuela's deteriorating political situation. Trump described Macri as "my good friend for many, many years," referring to their past
relationship when both were in business.
The German chancellor Angela Merkel is warning Britons not to delude themselves about what Britain means for its future. She says the country
will not have the same rights as a member of the EU. And insists the block would only agree on future ties with London after they've agreed on a deal
to divorce.
(BEGIN VIDEO CLIP)
ANGELA MERKEL, GERMAN CHANCELLOR (through translator): Dear colleagues, you might think this is a matter of course, but unfortunately you have to
say clearly that I have the feeling some people in Great Britain still have illusions. However, this would-be time wasted.
(END VIDEO CLIP)
QUEST: United Airlines has with remarkable speed reached a settlement with Dr. David Dao, the doctor who was dragged off the United Airlines plane
from Chicago to Louisville. No financial details have been disclosed. The statement issued by Dr. Dao's lawyers say United has taken full
responsibility for what happened on flight 3411 without attempting to blame others. For this acceptance of corporate accountability, United is to be
applauded. Ryan Young joins me from Chicago. Ryan, I read the statement, and come on, Ryan, everyone wants to know how much. I realize the
statement says that number will not be disclosed. But what are the rumors and what is the leaking number?
RYAN YOUNG, CNN NATIONAL CORRESPONDENT: Wow, what a big conversation here. Of course, we talked about this several weeks ago, and everybody thought at
that time we were talking about millions of dollars when it came to a settlement or a lawsuit. And now we'll never know that number. We do know
that United has taken a hit in terms of not only PR but their stock price in terms of the global financial market in terms of how people even view
United. That is a conversation. Every time you bring up United, you look at the memes across social media and the internet, you know they were
taking a beating. Today, overnight, United released some information about their investigation and moves they were going to do going forward to stop
something like this from ever happening again. On the same day, you have a settlement. This seems very coordinated and well done to pick the pieces
back up after the beating they've been taking in public because of this nasty, nasty PR nightmare.
[16:35:00] QUEST: I read the report, Ryan. And not only does it say we accept responsibility. There's a particular line early in the report which
says, these were the policies that failed, these were the actions that went wrong, or words to that effect. Far from now trying to deny what took
place, that report is very specific about how they failed, isn't it?
YOUNG: And I think that's a great point here. They talked about four things that they considered failures in that report. One was calling in
law enforcement when there was no security or safety issue. The other was rebooking employees at the last minute. Another was not offering enough
compensation or convenient transportation options to get customers to willingly give up their seats. And failing to give the employees training
and authority to resolve the situation. We now see moving forward they've actually authorized ticket a little bit agents and people at the gate to
offer up to $10,000 before someone is removed off a flight like this. You already see the words of customer service being reinserted into the
conversation, so in the future they can de-fuse the situation. The Chicago Department of Aviation still has four suspended officers that they'll be
reviewing in terms of their own investigation. This might not be the last settlement that Dr. Dao gets, because there is some pending litigation
going on with the city of Chicago. And there are other passengers who were on that plane who also may claim emotional distress. This might not be
over for United as well.
QUEST: But the speed, Ryan, at which they seem to have settled suggests they'll move sharply across all fronts. Ryan, thank you for that. Look,
Ryan, if you find out that number, just whisper it into my ear at some point, I promise you it will go no further. Ryan, joining me from Chicago.
Gridlocked no more. NAFTA will stay for the time being, says President Trump, as he attempts to renegotiate and modernize the treaty between
Canada, the U.S., and Mexico.
(COMMERCIAL BREAK)
QUEST: President Trump now says that he will give NAFTA more time before backing off the threats to pull the U.S. out of the trade treaty with
Canada and Mexico. Now, sources told CNN on Wednesday that a pullout was a distinct possibility. Now President Trump says he will work to make NAFTA
work instead.
(BEGIN VIDEO CLIP)
[16:40:00] DONALD TRUMP, U.S. PRESIDENT: Rather than terminating NAFTA, which would be a pretty big, you know, shock to the system, we will
renegotiate. Now, if I'm unable to make a fair deal, if I'm unable to make a fair deal for the United States, meaning a fair deal for our workers and
our companies, I will terminate NAFTA.
(END VIDEO CLIP)
QUEST: Now, President Trump changed his mind after speaking on the phone to the president of Mexico and the prime minister of Canada. NAFTA, you'll
be aware, the treaty between the three countries, it's $1.2 trillion in cross-border activity that is at stake. The estimates say some 14 million
U.S. jobs depend on trade with NAFTA. Joining me with thoughts on the future, the former Canadian ambassador to both the U.S. and Mexico.
Ambassador, were you surprised at this about-turn which seems to be in line with other things the U.S. president has said, when seemingly he gets the
facts rather than the campaign rhetoric?
RAYMOND CHRETIEN, FORMER CANADIAN AMBASSADOR TO U.S. AND MEXICO: I was certainly surprised, because the position has kept changing in the last a
couple of weeks. We'll have to wait and his what his next position is.
QUEST: How realistic is it -- I'm sorry, forgive me. How realistic is it to undergo this renegotiation when there are very different goals and
ambitions? Some want modernization but the U.S. wants wholesale renegotiation.
CHRETIEN: Nobody knows exactly what renegotiation means at the moment. Is the president talking just about a tweaking of the agreement? Is it a
major renegotiation? Is it the modernization of the agreement? Nobody knows. And until we see what exactly will be in that notice from the White
House to congress about what the Americans would like to put into this negotiation, we'll have to wait and see. In Canada I guess we'll adjust to
whatever emerges from your side. We don't know.
QUEST: So, in that scenario, well, we don't know, but let's just take -- because you also represent lumber. Let's take this decision to impose
tariffs on lumber, and at the same time the U.S. loses a dairy WTO action with Mexico. The disputes are there. And the U.S. seems to be turning up
the rhetoric. Certainly, when you start imposing tariffs on a friendly country like Canada.
CHRETIEN: Of course. On the lumber issue, I'm very familiar with what has happened in the last couple of days. Clearly, we were very upset with the
imposition of those preliminary duties, subsidies, a couple of days ago, of about 20 percent. That's certainly not justified, in our view. And now we
have to wait to see what the antidumping rules will be in June. This means thousands of jobs lost. It is not a happy time in the trade relationship
between our two countries. But we'll have to wait and see how it's going to evolve. The way I see it, following the anti-dumping duties in June,
towards the end of this year, November, December, we will have a definite ruling on the subsidy and Canada will have to decide what to do about it.
Clearly, I think it will have to go to the world trade organization, where Canada has won in the past all those cases. But it's unfortunate, because
if we take that route, it's a very long and arduous route.
QUEST: Sir, good to talk to you, thank you for talking to us tonight. Put in that perspective, I know we'll talk again, as the NAFTA issue gets
further along.
Now, as the recession took hold here in Nigeria, businesses are now looking to the recovery to help them grow their business. Auto industry sales fell
over the last 12 months, largely on the back of not only a recession but also a weakening currency, which has become devalued quite considerably.
The government also raised import duties. So, we're talking about tariffs with Canada and the United States. Nigeria has its own tariff issues with
the rest of the world. The managing director of Toyota in Nigeria, good to see you.
KUNLE ADE-OJO, MANAGING DIRECTOR, TOYOTA NIGERIA: Thanks for having me.
QUEST: This issue of tariffs, import tariffs, it's a very real problem for people like yourselves.
ADE-OJO: Yes, it is. If you add the tariff with the devaluation of the naira, it creates a double impact. By virtue of that, people are not able
to buy as much as they used to buy in the past. So, it causes a major issue. Considering that businesses are down, their profits are low, so in
terms of getting revenue to buy additional, you know, commodities, people have prioritized a lot more now.
[16:45:00] QUEST: So, your choices in that scenario, I mean, you obviously either take a hit on number of sales, you just don't sell as many cars, or
you take a hit on the margin and perhaps lose money on the cars you sell, or you try a balance of the two. Which is it?
ADE-OJO: Well, we try to prioritize which vehicles are still important for -- you know, that are still in demand, especially the commercial vehicles.
Those were the kinds of things that we tried to do last year. We realized that it was not possible for us to spread out wings and bring in all the
different models that we used to push and market in the country. So, we've shrunk it down and prioritized and ensured that we're focusing on the
models that will give us the best revenue and returns.
QUEST: That model, that strategy, is it working? Or, frankly, have you just got too many headwinds, that it's almost insurmountable until economic
growth picks up again?
ADE-OJO: OK. Well, so in Nigeria, we have been putting in place risk management in the past three years. And when the recession hit last year,
we were prepared. By virtue of that, sustainability was key. We ensured that we must maximize our returns on each vehicle. So, last year, even
though the economy was bad, because of the preparation that we had made, we ended the year in a good, even better financially than the previous year.
And this was because of the op optimization we had.
QUEST: The way that global companies know they have to be in Nigeria but at the same time struggle with the domestic problems, it's this catch-22.
You've got to be here because the market is so big, but managing it is difficult.
ADE-OJO: It is very difficult. In Nigeria, like in other countries, you have to be pretty much hands-on. If you have your business and you're not
taking care of -- you know, people don't sometimes know what is required of them. And you have to be very, very hands-on and ensure that your staff --
you know, communications is one of the things that's helped us as a company. Communicating, letting everybody know what is required of them,
and by virtue of that, we're able to get good runs, good results. And between us, our customers, and the people who patronize our products.
QUEST: Good to see you, sir.
ADE-OJO: A pleasure.
QUEST: Thanks very much indeed. It's a warm tonight, isn't it?
ADE-OJO: Yes, it is.
QUEST: Thank you very much indeed.
Let's stay in Nigeria, where 25 percent of the world's food supply goes to waste globally. That's the number globally that takes place. In Africa,
big businesses work with local producers to reduce the problem of exactly how much food goes to waste. In reality, there's a simple solution. And
it all comes down to a piece of paper.
(BEGIN VIDEOTAPE)
KAVITA SHUKLA, FOUNDER FRESHPAPER: For me, I think professional success is living a life where your work is your calling. I'm 32 years old and the
founder of fresh paper. Fresh paper is a really simple concept. It's a piece of paper infused with organic spices. You can drop the sheet
anywhere where you store produce to keep it fresher, longer. It was inspired by a home remedy my grandmother in India gave me to drink. I had
been warned to avoid drink tap water. So, my grandmother gave mow this homemade spice tea and I ended up not getting sick. I was thinking of
people like my grandmother who grew up without access to a refrigerator. I never imagined that fresh paper would be something that's used by people
all over the globe. I started out by just making fresh paper in the kitchen of my studio apartment. I had very little funding. I actually
started with like less than $500. And I was doing everything by hand. I had no idea that food waste is such a massive global challenge. For me, it
was exciting when fresh paper really took off. We're working with food banks across the United States, working with NGOS, to bring this
technology, this very simple technology to people that can truly benefit from it. I would love to hear that my story inspires others, that there is
more possible for them than they may even realize.
(END VIDEOTAPE)
[16:50:00] QUEST: When we come back after the break, this looks like an everyday phone. I've got an interesting fact for you. It's made in
Nigeria, made in this country. The two founders who are making it explain why this is a crucial part of a strategy. After all, who wants to make
mobile phones? QUEST MEANS BUSINESS, live in Lagos.
(COMMERCIAL BREAK)
QUEST: QUEST MEANS BUSINESS live in Lagos. Made in Nigeria is part of the strategy of the government, part of its diversification policy. With me
are two gentlemen who have made a phone, a smartphone in this country. They're founders of AfriOne. Show us the phone, you've both got one.
ROHEEN BERRY, COFOUNDER AFRIONE: Here is the smartphone, it's made locally, we launched our first factory one week ago. It's a 20,000 square
feet state of the art facility based in Lagos.
QUEST: Why build a phone in Nigeria when frankly there are no shortage of factories making phones?
SAHIR BERRY, COFOUNDER AFRIONE: The parent company is called Contact Global. We do a lot of IT projects across Africa. We found a gap, we
think we can meet it. We're coming in at a much cheaper price and a better product.
ROHEEN BERRY: Basically, you have 110 percent mobile penetration rate. Only 30 percent of that is smartphones. With the youth population of
Nigeria being almost 50 percent, nobody is coming in to buy a feature phone in the years to come.
QUEST: How do we know your phone is a decent phone, not just a me-too of a Huawei or one of the Chinese phones? At the end of the day, the
aspirational phones are the Samsung's and the iPhone.
ROHEEN BERRY: We do it because we want to create a recurring revenue on the phone through our e-ecosystem, which is e-education, e-learning. Smart
identification.
QUEST: Because that's what your company is about, isn't it? It's about running the e-identification for everybody in this country. And frankly,
what you're building here is the Gillette razor, you know the syndrome, you'll virtually give away the phone and charge people for the razors.
SAHIR BERRY: As long as everybody gets a Gillette razor, we're good. It will be a platform for learning, doing so many things in the future. We're
jumping the barrier right now of having a tech infrastructure that is a little bit weak. We're empowering the people.
[16:55:00] ROHEEN BERRY: As long as we recognize Gillette to be a superior brand and affordable price, we're happy to be the Gillette of phones in
Nigeria and Africa.
QUEST: I can honestly say when I heard about this story, I thought the last thing I was going to find is somebody making a mobile phone in
Nigeria. How is the sales going, in a word?
SAHIR BERRY: Phenomenal.
ROHEEN BERRY: We're sold out, completely sold out. We would love to invite you to the factory.
QUEST: I thought he was going to say I would love to give you a phone. All I got was an invitation to the factory. Great. Story of my life.
Thank you, gentlemen.
We'll have a Profitable Moment from Lagos after the break. QUEST MEANS BUSINESS, live in Nigeria.
(COMMERCIAL BREAK)
Tonight's Profitable Moment from Lagos. It is tempting when you arrive in Nigeria to pretty much focus on the bad things, whether it's the
infrastructure, the corruption, the issues of safety in the Niger delta. That would be a serious and grave mistake. The reality is, although they
can't be ignored, they're only part of the story. The way the government is trying to turn things around isn't enough, of course it's not, but at
least it's a start. Most important of all, as we'll introduce to you over the next day or so, the young people. Vibrant, exciting, educated,
intelligent, willing to work, and most important, as the entrepreneurs you've met tonight, determined to see their country move into the first
league. A long way to go, to be sure, but at least they've begun the process. And as we always say, we'll be here tomorrow night. That's QUEST
MEANS BUSINESS for tonight. I'm Richard Quest in Lagos, Nigeria. Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you
tomorrow.
END
