Pax Herbals, situated a two-hour drive outside of Benin City, in the Ewu-Esan local government area of Edo State is, perhaps, not the location you would expect to find one of the state’s largest private sector employers. But from a wooden hut, constructed adjacent to the neighbouring monastery in 1996, Pax Herbals has evolved to employ more than 120 full-time staff across the supply chain—from growers and factory workers, to biologists and engineers. Factor in more than 1,000 distributors who help sell the products in over two-thirds of Nigeria’s 36 states and the scale of the enterprise becomes clear. It’s a made in Nigeria success story and one that has prospered along with the local community rather than at its expense.
The role and importance of the local community is underpinned by a theory of “communitalism” developed by Pax Herbals’ founder and director, Father Anselm Adodo. A framework in which he argues capitalism must do more to have a conscience; to care for the local environment and community. This philosophical grounding has driven the running of the company when it comes to issues such as staff welfare. Employees are entitled to paid sick leave; incentivised by individually tailored bonus schemes; and have regular dialogue with senior management to air any grievances. Recognition that profits still need to be made is balanced against that happening at the expense of workers. “The challenge we have moving forward is that consumer demand is greater than our supply capacity” says Adodo, who is exploring avenues for expansion but cautiously, “we won’t be rushed into finding investors. To be the right fit they will, first and foremost, have to buy into our philosophy of doing business”. That means ensuring the viability, sustainability and quality of the product is not compromised.
PARTNERSHIPS THE KEY
Encouraged by the government’s sustained “Made in Nigeria” campaign, Adodo has continued to make overtures towards state and federal government stakeholders to discuss possible collaboration. So far, he has been disappointed, not just by the lack of fiscal support forthcoming, but also the attitude towards partnership he has encountered. “The response I get from government officials I have spoken to, and from Governor of Edo State, Godwin Obaseki, [who visited the facility earlier this year] is that there is no money available,” but this is a problematic way of thinking about partnerships. “Development is not just about cash; in fact, it’s more about building capacity and planning ahead;” a view that does not appear to be shared by government officials who think “throwing money at the problem is akin to doing development,” says Adodo.
Capital investment is important but works better when it builds on well thought-out, collaborative partnerships. In March 2016, the conglomerate of Africa’s richest man, Aliko Dangote, established a state-of-the-art factory in Kano. Dangote intended the factory to domestically manufacture tomato paste, a product that Nigeria had previously imported up to 400,000 tonnes of annually, until that item’s importation was banned. But a Reuters report in August 2017 found “a lonely cleaner mopping the floor is the only sign of activity in Nigeria’s biggest tomato factory…There aren’t enough tomatoes to run it”. The initial outlay of N4 billion (£10 million) is only likely to rise as efforts are made to make the plant profitable by importing tomatoes. However, with greater community consultation, particularly with prospective growers, these challenges could have been better negated. For Adodo, it is an example of the wrong attitude to building rural enterprise in Nigeria: an approach designed elsewhere and implanted on a community rather than built on a mutual understanding of partnership with the local community and with an appreciation of local context. “From my experience, community-led enterprise is the only sustainable enterprise in Nigeria,” he says.
At Pax Herbals, contracts with local growers to obtain the necessary raw materials have been agreed; in turn, training is provided in ways that harvesting of herbal plants and roots can be done as sustainably as possible. Long-term thinking around ensuring the sustainability of the enterprise is a very important consideration when it comes to herbal medicine. So, too, is creating an environment that allows wealth to circulate in the local economy. Too often, in Nigeria, raw materials are exported out the country without the full benefits being felt by citizens. But the approach of Pax Herbals, which seeks to keep as much of the wealth as possible in the local community, has created associated business opportunities. Having learnt that the plastic bottles used for packing products were being brought in from outside the state a local businessman, with the support of Pax Herbals and the Ewu community, established a small manufacturing plant, creating a handful of jobs in the process. “Even if the costs are greater, my preference is always for a local supplier over a more distant one,” says Adodo, “it ensures the wealth is retained and circulates within the community”.
So can the Pax Herbals model work in other parts of Nigeria? Should the strategy for improving domestic manufacturing in the country start with rural communities and build towards urban centres, rather than the other way round? And could greater localisation of the processing and value-addition components, where skills and knowledge already exist, allow for greater equitable economic growth?
In Ghana, efforts to promote localised manufacturing are taking shape. During his successful campaign to become president in 2016, Nana Akufo-Addo promised to build a “factory” in each of the country’s 216 districts. Questions have been raised about the financial viability of this project. But imagined as factories in the sense of small processing plants, which draw on the competitive advantage of a local area, the project may prove to be effective in generating jobs and tangible economic growth at the district level. Implemented correctly, and with the proper community consultation, it might serve as an example for Nigeria argues Adodo, who would like to see local government areas become known for certain goods and products. “We already know that a particular area produces the best sweet potatoes for example, so I would like to see efforts to build on those competitive advantages and to ensure that the processing and value addition is done there”.
But, so far, the Nigerian government, at federal and state level, has taken a different approach to economic development; one that is, perhaps, not entirely harmonious with its “Made in Nigeria” agenda. The import ban, coupled with difficulty in accessing foreign currency has presented challenges for many businesses including Pax Herbals—and not a competitive advantage. Machinery used in the production of teabags, which had previously been imported from China, is now being built by local artisans and labelled “made in Ewu”. Adodo admits that this has “undoubtedly hindered” operations and while locally manufactured machinery “might not be as good as the imports” they are “serving a purpose in the interim”. And he is happy that the challenge to innovate has been met “with local creativity”.
“MADE IN EWU”
Nigeria needs domestic manufacturing to help support economic growth and create jobs. In June 2017, the National Bureau of Statistics pegged the official unemployment rate at 14.2%; this figure has risen for 9 consecutive quarters and, when broken down, shows youth as the least likely to be employed. After several quarters of recession, the economy may be gradually turning the corner but Adodo is skeptical that gross domestic product indicators mean anything for local communities. He points to the Commitment to Reducing Inequality Index, which placed Nigeria outright last of a 152 countries surveyed in 2017 and SBM Intelligence’s Jollof Index as better capturing the economic reality for most Nigerians.
“We need a measure of development that factors in how, and if, people are able to live comfortably,” Adodo says, and looked at from that point out view “we are not yet out of recession”. To that end, he advocates not just for a rethinking of the way economic realities are captured by government but also for a similar reconstituting on the way enterprises are built in Nigeria. By creating more community-focused businesses that are relevant to the local context in which they operate, and draw on its expertise, Adodo is in favour of going beyond “Made in Nigeria”, to “made in Ewu”. Local communities, he contends, hold the key to more equitable growth in Nigeria⎈