Tag: policies

Dr. Olumide Emmanuel is the Chief Executive Officer, CommonSense Group. In this interview with select journalists, the leadership coach and entrepreneur shares interesting insights on the nexus between policies and their implementation strategies on the one hand, and how individuals can navigate the current economic impasse to build sustainable wealth. Muyiwa Lucas was there. Excerpts:

The inflation rates keep rising and currently at 34.19 per cent. Is there no way of curbing it?

We are not a productive economy and when you are not a productive economy, what do you have to back your money with? When you talk of market forces, it’s a force of demand and supply. There is no way there will not be inflation because due to a potpourri of expenses the cost of production locally is higher than imported goods. The solution is to come back home. Let us lock ourselves in and go indigenous. Put a high level of duty on anything imported, including on food. When you say “eat Nigeria”, you will begin to see Nigerian products coming on. Then we need to cut the cost of governance. Many nations that have succeeded have to first lock themselves in and shut out the world so that they can focus on themselves and their strength. When they now discover themselves they can now open up and begin to welcome the world. We have seen many nations that have done that. But as long as we are following all these IMF and World Bank policies and bowing to their colonial bondage, we will go nowhere. If we get just one single policy, then you will see the economic boom it will produce. Also, what are all these senators doing? If you want to be a senator, be a volunteer. No more payment, no more salary. If you truly love Nigeria, come and serve voluntarily, we need people who have made money in the secular world and the market place who will volunteer and who will give us just three of their days once in a month. Whatever needs to be done, they will do it in the three days.

So with all that is going on, how will you assess the economic policy of the current administration?

Almost all the policies of this administration are the right policy. But one answer does not fit all. They do the right policy but for that policy to work there would be other things that need to be in place. Ironically, those other things, they are not doing. Take for instance the Oronsaye Report on reform of the civil service; it is a good move. But while they are implementing that, they are also setting up other parastatals, thereby negating a good policy. Removal of subsidy is also good. But all those doing bunkering should also be called to book. You are floating dollar and still buying cars in dollars. The implementation of the policies and other supporting policies are not being done.

When do you think the gestation period of these policies will expire and results be seen?

Normally the gestation period of a policy, if well implemented, is supposed to give results within six months and two years maximum, depending on all other factors being equal. So, it is those ‘factors being equal’ that we are on right now. For instance, we know that we need to produce to bring dollar and the only thing that brings dollar to our economy is the crude oil; but we keep borrowing money in advance against our crude oil. So there is no income from there. Right now we are borrowing money to pay salaries and borrowing money to run government. Well, we have seen one year of these policies so let us still watch what happens in the next one year. If you eat your tomorrow today, you are going to be dimensionally poor. We have so many illegal refineries everywhere. In political leadership, there is what we call the psychology of leadership, sometime it is not black or white but grey. So the principle of amnesty, whistle blower and plea-bargain are all principle of grey area leadership. Let us legalise the illegal refineries. These illegal refineries exist everywhere, especially in Port Harcourt and that is the oil that many people are using for their cars and generators and everything is working. When we legalise them, we will begin to collect taxes from them.

The federal government recently approved N70, 000 as the minimum wage. How does this amount hedge against inflation in view of the economic realities?

If you look at it from the point of the exchange rate, you will realise that even though it has increased at the naira level, it is a reduction at the dollar level. In the last few months that this debate has been going on, we have been having true vocabularies that have been pushed simultaneously, minimum wage, living wage. Right now the minimum wage has been increased, but the living wage has still reduced. So, in naira terms, the minimum wage has been increased but in living terms, peoples’ quality of life has reduced. Even if you have N100, 000 now, it cannot buy what N30, 000 could buy a year or two ago.

Can you shed more light on what it means for the purchasing power of the people?

The United Nations has defined living below $2 a day as poverty and living below $1 day as extreme poverty. 75 per cent of Nigerians live in poverty because at the present exchange rate the new minimum wage amounts to $43 meaning it is less than $2 per day. So when you talk about peoples’ purchasing power, it is becoming weaker and weaker because their take home cannot take them home. What they are earning, when taken to the market, cannot get them basic needs and the basic requirements of life. If you look at what has happened, you will discover that everything around us has increased and inflation is at the highest it has ever been. It is not going to get any better except the people at the helm of affairs, the policy formulators do all that is required for things to change. What happens in this country is that we always look for one solution that fits it all, but it doesn’t work like that. You may bring in a good policy, but in order for that policy to work and produce a good result, there are many other things that you may also need to do simultaneously that will work in tandem with that policy that you formulated. But most of the time, we only do one and expect that it would be the magic wand that will produce the miracle. But it doesn’t work like that.

What measures do you advice the government to take to regulate the impending minimum wage-triggered rise in the cost of commodities in the market?

Price control is a very dicey thing to do, especially, when you are not giving any form of subsidy, palliative or alleviation in the value chain.

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In view of all these, what are the chances of Nigerians creating wealth for themselves and what measures can an individual deploy to survive?

The principles are always the same and ever the same. Why because crises create opportunities. But most of the time when people are in crises, they are in despair. They are not in a mental state to be able to see, seize and maximise opportunities. The question should be, what value are you bringing to the market because money flows in exchange for value (goods and services)? So any individual can thrive if they just identify the source of value they can create for money to flow. No matter how terrible the economy is, money will continue to flow. Those who are solving problems will continue to make money. People enter into a state of despair and they don’t offer any value and think that emotions and sentiments will attract money to them. But it doesn’t work that way.

How can financial growth be measured and sustained?

Everything begins with knowledge. If you know better, you will do better. Anyone that wants to change their lives should start learning. Begin with financial education. Know what you need to know and then begin to apply it. Now between the knowledge and application, something would have happened. You have become a different version of yourself because you must become rich to attract riches, you have to become wealthy to attract wealth. You also have to give it time because it is not a get-rich-quick thing. Once you realise you know what you need to know and have become who you want to become, don’t be distracted by lack of results or physical progress because anything that will grow will first and foremost be planted. Everything you are doing, you are planting your efforts. Signs take time but conviction must always be there. Just keep doing what you are doing, with time, it will show.

What is your message to Nigerians in view of the country’s situation?

Don’t give up. It looks so simple but when you see people committing or attempting suicide, it’s because of hopelessness because they cannot see light at the end of the tunnel. But there are many truths that life has made available to us that we don’t see. When there is life, there is hope. It takes a man to be alive to be tired. For you to be tired, you are alive. For you to be tired, you are not mad, you are able to analyse that the situations are challenging. Those are already assets. For you to be tired, you are able to compare your past and your present and able to visualise that your future may not look like what you expect, it implies there are a lot of faculties of success that are at work in you, because to succeed, you need imagination, confession and expectation. All these are intangibles that you already possess but you are using it in the wrong direction.

With a rising inflation, a weakening naira and a general, the federal government is faced with a herculean task of stabilising the economy. “The steps and policies being taken by the present administration are ones in the right direction… it is sending positive signals to international investors,” says Dr. Olumide Emmanuel, CEO, CommonSense Group. Dr. Emmanuel, who is also a wealth creation coach in this interview with journalists, said there is a gestation period for policies to take effect. He also gives tips on how to survive in the present economy, among other issues. Muyiwa Lucas was there. Excerpts:

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.

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The Nigerian Customs Service has set a target of N5.1trillion revenue this year, implying that they will squeeze businessmen and importers. How is that going to encourage businesses?

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.