Monday, February 12, 2024 6:11 pm
In this interview with journalists, Dr Olumide Emmanuel, CEO, of CommonSense Group and a wealth creation coach states how Nigerians can survive in the present economy
Nigeria is currently experiencing a rising inflation. How do you think the galloping inflation currently being experienced can be tamed?
What are the things that affect inflation, it is when you have so much money pursuing so little products. The inflation we are seeing now is a further validation that we are not a productive economy, but a consumption economy. The only way you can be able to do that is to do a lot of things at the same time. Number one, become more productive. But how can you be more productive with the price of diesel and power with many production factories shutting down. Monetary and fiscal policy also has a part to play in inflation. We keep talking about this multiple exchange rate. We need to ensure that we just focus more on production. You know that there are so many good things that we have talked about over the years, but the courage to implement them has not been there. We need to continue to produce. When we say buy Nigeria, when its time to buy car, you go to buy Toyota instead of Innoson. When its time to dress, you prefer foreign clothes, and when its time to eat, you eat foreign products. So, the inflation aspect is more of a production and fiscal policy issue. It is also an opportunity for those that know how to play the money game.
The Exchange rate has been at the center of discussion and a major concern for the economy. How can this be addressed?
We have to look at quick wins. We should go back to production. It will be that everything that we are importing which we have control over, we will have to stop it. Whatever you are spending dollars on, you just stop it immediately. So, we will not need the dollars. The only source of dollars now is from our crude oil sales and the money is going to the NNPCL and doesn’t come out. The second source of dollar that will help us is remittances from Nigerians in diaspora and we are not annexing that aspect. The third source of dollars that will help us is foreign investment. The fourth source is the proceeds from the privatisation exercise. When we focus on locking those leakages, within six months, you will see a lot of changes. I will suggest that every domiciliary account where dollars and pounds are sitting idle in Nigeria should be audited and let them tell us where they got the money from. And when people are bringing dollars to transact anything and dollars is moving in cash in a cashless society, let us begin to investigate our prognosis. You will see that within 90 days, a lot of things will sanitise. But when the people who are supposed to be making the law are also guilty of the law, they can’t shoot themselves in the leg. So, it’s a combination of complex webs that require a group of selfless people that are really interested in transformation of the nation because national transformation is a function of patriotic citizenship and visionary and transformational leadership. But you see, it is the chicken and egg situation. The citizens are waiting for the leaders to be visionary and transformational while the leaders are waiting for the citizens to be patriotic first.
About six years ago, Nigeria signed a currency exchange deal with China which has not been implemented. Just about five weeks ago, the House of Reps said the deal needs to be revisited. Do you think this is a good step?
It is feasible and is also a very fantastic idea. Globally, the dollar is the unit of transaction and the American government is benefitting from that massively, but China is richer in the sense that all the debts that America has is being owed China. So China is now fighting to make the Yuan the global currency. That battle between China and America is what we are seeing playing out in Africa. It is a good thing, its only that we are dependently independent, that is why we keep listening to the IMF and World Bank which are all pawns in the hands of the USA and the Western World.
I can guarantee you that majority of the goods that come from that port are not declared. If they declare all the goods that are coming and they pay the normal duties, that money will come in. Don’t forget that ex President Goodluck Jonathan’s administration started what we call the Treasury Single Account (TSA) and the former President Muhammadu Buhari administration carried it over. Don’t also forget that those Customs and Port authorities you are talking about have several accounts some of which does not even belong to government, while majority of those accounts are for different individuals. But the TSA has settled a lot of these things even though we are beginning to see that a lot of those things are beginning to come back. They are not going to squeeze anybody. If every goods that come in is declared and they pay the normal duties, the money will come. The challenge is corruption and manual labour. If everything is automated, you will see that money coming in and nobody will complain. Automating a lot of things will settle many things in this country. All these manual involvement in the process is giving room for human beings to play the game that messes up everybody.
Last year subsidy was removed on petrol, but this year, government will pay subsidy on electricty to the tune of N1.6 trillion. Does this add up?
There is nothing wrong in subsidy. Anywhere in the world, subsidy is an economic principle for ensuring that the citizens do not suffer needlessly. Nations subsidise different products and services globally. The challenge with our kind of subsidy is that when it is done, most of the times, the people you claim to be subsidising for are not the ones enjoying the benefits of the subsidy. There are a group enjoying it because of this same corruption issue. So, subsidy has never been the issue. If you expect everybody to pay the exact value for everything that the government is giving them, then you just be seeing dead bodies on the streets. There is nothing wrong with subsidy. Lets go to the issue of power. There is no reason why we should be having power problem. In power, there are three levels. There is generation, transmission and distribution. The government decided they were going to hold on to transmission and that is why we are having the problems we are having and the truth is the transmission infrastructure is over 40 years old. One of the reasons why they don’t want to let go totally is because power is so important, if you hand over the entire transmission to the private sector, they can sabotage it and hold the entire nation to ransom. We understand that but you see the lawyers and Generation Companies (Gencos) that sit to sign things on behalf of the government are not thinking of the people, they are only thinking of what they can get. So you sign with the Gencos that whatever power you generate, we are going to take it. Right now, the Gencos are generating more power than we can transmit. So, you are paying for a power you are not using. You are generating 8,000MW while our grid can only carry 3,800MW or 4,000MW, implying that we are paying for 4,000MW that we are not using. And because you have generated 8,000MW but only sending 4,000MW, the people on the other side will be paying for the unused 4000MW because you have to pay the guy for the 8,000MW he has generated. They are not educating the people to know the problems. Everybody in Nigeria today is complaining about the electricity supply and they all have generators. Is it not better that we let go of the noise and pay for the electricity? We are complaining that they are increasing the tariffs. No, they did not increase it, there was something signed- the Multi Year Tariff Order (MYTO). The situation was that every six months, it will be increased. It has been signed years ago. They are only following what they have signed. Don’t forget that these are the people that also borrowed monies from banks and they are investors. If you don’t take care of them they will go and then we will now say that investors are not coming. So it is a combination of a lot of things. When they said they are subsidising, what are they subsidising? Have you noticed that till date they have not been able to give us prepaid meters? Let us pay the real money and have the light but let everybody be metered. If you make one decision, there are a lot of ancillary decisions that you need to make concurrently to ensure that you can get the result that you are supposed to get.
Nigerians are feeling the heat, how can we survive this period?
The principles of survival are universal. But the application of those principles are personal, contextual and geographical. So, the principle of savings is a universal principle but in order to apply it, you look at your personal life, you look at your personal context and you look at your geography. The principle of delayed gratification is universal. So, when it comes to surviving hard/complex economic terrain like we are in right now, the principles have not changed but how we apply them is what we have to now look into. Personally, as an individual or family, we should look at our context and the geography of where we are and then we begin to know how we will navigate it. Again, it is reduce your expenditure, and increase your income. Simple, it has not changed. There is always a level you can operate from. You also have to note that wealth is not sexually transmitted and marriage is not an economic empowerment. Both the husband and wife has a responsibility to the home and none should be a liability. The economy is tough and its going to get tougher but we need to make adjustments where necessary. Like I said before, this present administration is doing the right thing, taking the right steps, but the result of the steps they are taking will take a while because there is what is called the gestation period for policies. And if all the right things are done, then those policies will produce the right results. But the challenge is the fact that most of those right decisions are being taken without putting in place the right modalities to ensure that those decisions don’t have the kind of adverse effects that it is having on people now. The problem of Nigeria is that we keep talking about this octopus-hydra headed syndrome. It is not just one thing that will solve the problem. It is a combination of right policies being carried out concurrently that will produce results. What we are seeing right now is that while some good things are being done here, some negative things are still happening and all in all, we are not seeing the desired results. But, I am very hopeful because the policies are actually sending the right signals to the international investors. In fact, the directive that all the monies generated from crude oil will now go to the CBN instead of going to the NNPCL is a very correct policy because NNPCL is just like one secret cult that they are using to steal our money.