All wealth comes from adding value, from producing more, better, (different), cheaper, faster, and easier than someone else.

• Brian Tracy

A few months ago I came across a funny cartoon picture of the globe showing the countries of the world and what each offered – from manufacturing in China, IT related products in America to electronics in Japan…and what caught my eye was seeing Africa lumped together under the tag RAW MATERIALS.

Funny but sadly true.

This begs the question, what value do we add.

In the mid 1980’s, Michael Porter, a world renowned academic with the Harvard Business School, postulated the concept of value chain analysis.

A value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product (i.e., good and/or service) for the market.

Value chain analysis first takes a product, breaks down the different steps or processes leading up to the manufacture of that final product, listing out the various intermediary products and their value.
Companies review this intermediary products and steps with the aim of identifying areas of improvement in terms of quality, most profitable intermediaries products or even areas to make an entry in terms of creating a new line of business.

In the context of our productivity as a country or even as a state, a value chain analysis of the produce shows that we are greatly shortchanging ourselves.

For example – as a country our major source of revenue is from crude oil sales.

A barrel of crude oil is about 159 liters in volume, and it goes for ~$80 (~N65,000) based on average November 2021 prices.
Refine that barrel at a cost of ~$33 (N13,500) and you get about 70 liters of gasoline (petrol), 34 liters of diesel, 12 liters of jet fuel (kerosine), 6 liters each of LPG (cooking gas), heavy fuel oil and heating oil, and 25 liters of other products. Cumulatively these by-products are sold for about $185 (N76,000); effectively a loss of value of ~$72 (~N29,000) per for every barrel of RAW crude oil we sell.

Let’s come close to home, Plateau State is one of the few places in Nigeria, and infact Africa that supports the growth of ‘Irish’ potatoes. With the state accounting for more than 60% of the Nigerian output, a major factor of what in our ranking of 7th in Africa. However we are not maximizing optimum value from this product.
From a value chain perspective, we average a yield of ~3.1 tonnes/hectare as against a potential 12-17 tonnes/hectare obtained more properly managed farming communities, this shows that even the ‘raw material’ output is underutilized.
Now lets reference the mile 12 market in Lagos, a bag of potatoes goes for N55,000-N60,000. Add a 20-30% production cost, and that bag can produce chips (pringles, lays etc) worth over N250,000 or the new product gaining traction, poundo potato flour worth upwards of N160,000. And add to that the potential jobs such a processing facility will create as well.

Do this same value chain analysis for Yam – poundo yam or starch filler for pharmaceuticals, Maize – corn syrup or starch, Tomato – tomato paste or ketchup, and so on, and you will realize the huge loss of value we bear from not making the effort to add some level of processing to our agricultural products.

This is not only endemic to the agric sector, zoom in on mining and you will see that almost all the minerals extracted from the state (legally or illegally) are sold as raw materials, these days mostly to China. From Kaolin to tantalite, from Cassiterite to the different gemstones. All these products leave as raw materials and return to us as paint, cosmetics, electronic components and bling-bling.

A former football coach once said – “the difference between ordinary and extraordinary is that little extra”.

Earlier in the year, President Nana Akufo-Addo of Ghana, proclaimed that his country will no longer export raw cocoa beans to Switzerland, opting to rather produce and export raw black chocolate.

And why did he have to take this radical decision? Ghana produces about 21% of the world’s supply of cocoa, but in a chocolate retail industry that is worth ~$170B, the country makes on approximately $2B.

Value addition to products needs to go beyond mere government rhetoric from every elected administration and transit to practical policies, incentives provision and actions taken to ensure semi-processing of raw materials becomes a minimum standard for goods leaving the state.

We as a people also need to extend this concept of value addition to ourselves.

A quote I saw says – “The key to becoming relevant in the marketplace is to add value. The more value you can add the more relevant you will become.”
As citizens of Plateau what value do we bring to our land and country, we have some of the brightest minds in different fields of endeavor in the country, some of the best entertainers, produce outstanding footballers… We are known for having hospitable and likeable personalities, and in the business world – have a reputation for contentment and integrity. However how have we added value to this to make us relevant and increase our sphere of influence…at the least nationally.

This is a mindset that we need to task ourselves with and I believe we will witness its results from the level of governance in the form of increased revenue and decreased unemployment, to the individual by seeing an uptick in personal productivity.

Alfred Dapal Damiyal (A.D.D)

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Opinion: A World in Transition: What value do we bring? – By Alfred Dapal Damiyal