Why Not the ‘Jacob’ Model?
For quite some time, the story of Esau and Jacob as told in the Christian Bible has always remained a subject of curiosity to me especially on account of the many puzzles contained in it. For those who are not familiar with the narrative, here is an abridged version. A man named Isaac had two unidentical male twins: one, the senior, called Esau; and the younger one Jacob. As it turned out, both ended up with different lines of vocations. Esau was an experienced hunter while Jacob had the habit of staying at home, possibly thinking of how to invent things (not expressly stated).
One day, Esau was back from his usual game, hungry and was so desperate to quench his hunger that he was ready to do anything to make it happen. So, he approached his home-based brother who was eager to play ball as long as Esau was willing to enter into a deal: he would make available some measure of porridge in exchange for Esau’s birthright, a patriarchal blessing usually reserved for the eldest sons of Hebrew families. Deal sealed, food served, and everything went on as usual. But with time, their father became old, and he needed to bless Esau. He asked Esau to go hunt for the best game and prepare his favourite meal for him to invoke his blessings on him.
Somehow, their mother, Rebecca, overheard that and plotted a domestic coup by getting Jacob to prepare a home-based meal, serve his aged father and collect the blessing meant for his elder brother. The coup was executed with precision, as Jacob had prepared a hot delicious meal, served his father and collected the blessing, while Esau was still busy in the bush trying to hunt for the animals that fitted his father’s description. By the time he was back, it was too late.
Here are the questions that have always excited my curiosity: How come that it was the elder brother who was hardworking that was always begging for food? Where did Jacob get the animal he used in preparing the meal for his father? Why was Esau so desperate that he was willing to satisfy a temporary need without considering the long time implication of trading away his birthright? And many more.
A couple of years back, I stumbled on a video message and a book with the same title: BUY THE FUTURE, by a Ghanaian author, Mensa Otabil, that resolved most of the puzzles in the story. The author anchors his interpretation on a simple verse of Proverbs 12: 27: The lazy does not roast any game but the diligent feed on the riches of the hunt.
The author’s perspective that caught my attention is how he used the concept of “roasting” to explain the different value systems that influenced the decisions taken by both Esau and Jacob. Roasting, according to him, explains the process of not just recognising a primary raw material but going some steps further through innovations to extract secondary products which command higher value that what could possibly be obtained from selling primary product.
Extending it further, Otabil says that all countries of the world could be classified as either Jacob or Esau countries. Was it a possibility that while Esau was always going to the bush to kill animals every time he needed them, Jacob only went once, brought a pair of animals home, crossbred them, and created a thriving animal business in the compound where he could always go for any one without physical exertion? Jacob Vs Esau Mindset I will come back later with the implications for an individual or a country that adopts either of the mindsets as Otabil brilliantly articulated in his work. The reason I am fascinated by Otabil’s framework for analysis is its applicability to the situation in most African countries which take pleasure in selling their endowed raw materials without adding value to them. Take Nigeria, for example, where most raw materials are exported without being processed for value addition. Nigeria remains one of the oil-producing countries that still import petroleum products in large quantities. In spite of the various bans imposed, most companies in Nigeria still import the key elements of their production mix.
What would have happened if successive Nigerian governments had pursued very aggressively the policy of backward integration initiated decades ago? What would have happened if successive governments in the country had created the enabling environment to encourage companies that are keen on sourcing raw materials locally and also developing the capacity to process them into secondary products? When the Federal Government, following the Structural Adjustment Programme (SAP) of the 1980s, in an effort to conserve foreign exchange earnings and enhance domestic commercial production, started restricting importation of certain goods many people and companies kicked against the policy. Their opposition was premised on the ground that the restriction might stifle operations of most companies which depended on foreign raw materials. But a few perceptive organisations, especially Nigeria’s agro-industrial businesses and Fast-Moving Consumer Goods (FMCGs) companies began investing millions of dollars in backward integration projects, which request manufacturers to substitute some imported raw and packaging materials with local alternatives. Let us look at the strides by some of the companies that have continued to pursue this concept after the government blew the whistle on backward integration.
NIGERIAN BREWERIES
Nigerian Breweries (NB) Plc, the pioneer and largest brewing company in Nigeria, has specifically reaffirmed its commitment, and in the process, created about 250,000 new jobs which have also led to the successful introduction of two innovative hybrid sorghum seeds to Nigerian farmers. The company explained that the initiative is part of its “winning with Nigeria” project and in line with the current economic diversification process.
Available reports also suggest that the company is already consolidating its local sourcing of inputs for its operations as it announced that it has reached 55 per cent local input sourcing. It added that it has fast-tracked its plan to attain 60 per cent local input sourcing to 2018 as against the initial 2020 target. Besides, the company noted that currently, its product packaging is 95 per cent locally sourced.
Here are some other outcomes of such efforts: yield sorghum seedlings, raising farmers’ yield from 1 to 4.5 tonnes/hectare over a five-year period
and industrial utilisation of the tuber labels, crown corks, PET resins, nylon wrappers and wooden pallets Communications Agencies, Hotels, Distributors, have also been impacted N27 million, which is several times the GDP (Gross Domestic Product) per Nigerian worker
since 2012
jobs in the broader economy
of its employees
DANGOTE GROUP
Dangote Group, largest cement manufacturer in Africa, appears to be at the forefront of implementing the Federal Government’s policy, which was enacted in Nigeria in 2002.
During the groundbreaking ceremony of Dangote Cement plant in Okpella, Edo State, in 2016, Dr. Kayode Fayemi, Minister of Solid Minerals and Natural Resources, said that the greatest desire of the government was seeing Nigerian entrepreneurs working together with the government through backward integration to unlock the potential of the solid minerals sector.
Among other feats: in Okpella community. The factory that would feed 24,000 mouths directly everyday while over 100,000 people would benefit from education and health facilities that will come from the investment. plants that would provide electricity for the factory would depend on locally sourced coal. Dangote has set an example by manufacturing locally, using Nigeria’s abundant natural resources. of cement after the United States. However, today the former has become a leading exporter of six to seven million tonnes of cement, according to Alhaji Aliko Dangote. integration to emerge the largest producer of cement in Africa, with cement factories established outside Nigeria to complement the existing ones in the country. producers, led by Dangote Cement, are investing aggressively to raise their present combined installed capacity from 31.25million metric tonnes to 53.75mmt by end of 2018. the sector. local content, productivity and innovation.
These are besides what is being done in the other subsidiaries, especially Dangote Sugar. FLOUR MILLS OF NIGERIA PLC
Flour Mills of Nigeria (FMN) Plc, Nigeria’s largest flour milling company, says it has started reaping the fruit of backward integration which it adopted over a decade ago.
Here are some of the available results of that effort: projects to cultivate raw materials for most of its processes. Although, there are still challenges with meeting factory demand thereby necessitating importation, the company has been able to reduce importation of raw materials by over 50 per cent, according to the Group Managing Director, FMN, Mr. Paul Gbededo. its focus “will remain on developing competences and improving execution capacity to backwardly integrate its core value chains; Sugar sweeteners, edible oils, feeds & proteins and Cassava starches.” operations in the last five years, the Flour Mills of Nigeria Plc says it is set to plough an equivalent sum into its business in the next five years, to remain a top player in the sector and create more jobs. Niger State about 10 years ago and has grown to become the biggest mechanised maize farm in the country, where it uses 4,000ha for growing maize. for the poultry industry, while the soybean is used in the vegetable oil refinery with the soybean meal utilised in the feed mill.
Without any doubts, adopting the Jacob mentality is the way to go if the country truly desires to create wealth in the real sense of the word.
First, by focusing its searchlight on the raw materials available in different parts of the country, we would be eliminating one of the biggest problems faced by local high and unpredictable foreign exchange rates. Most companies that produce exportable goods are not able to profit much from the exercise because of the high cost elements embedded in their production which makes their products price uncompetitive.
Second, a Jacob country, according to Otabil’s analysis would not only identify and deploy its raw materials efficiently, it would also ‘roast’ it by investing in technological innovations that would enable it process the raw materials into valuable secondary products.
Third, at this period when reliance on oil as the only source of foreign earnings no longer makes economic sense, when the government creates and consistently implements policies that would enable companies operating in Nigeria to deploy local raw materials and process them into finished products, the potential to progressively expand the capacity of the government to earn additional forex increases. More jobs and other benefits would also follow.
So, the question is not which of the paradigms (Jacob’s or Esau’s) that would serve the country, the issue is for the government to recognise that remaining an Esau country is a way into the stone age. Aggressively pursuing the Jacob model would not only see the country creating more and lasting wealth, the unpredictability that has always trailed our efforts at national development would be greatly moderated. That is the way of the Eagle. That should be ours, going forward.