Mazi Sam Ohuabunwa, a seasoned technocrat, has made his mark in the manufacturing sub-sector of the economy including serving in different capacities as founding President/Chief Executive, Niemeth International Pharmaceutical Plc, founding Chairman, Nigerian Economic Summit Group, among others. In this interview with Ibrahim Apekhade Yusuf and Ambrose Nnaji, he attempts a prognosis of the challenges besetting the economy as well as sets agenda for the incoming government. Excerpts:
Nigeria’s economy has been badly affected by the plummeting oil prices and the fall in the value of the naira. Do you see any hope for the country?
There is hope. This is not the first time oil prices have fallen, it’s cyclical. Every once in 10 years prices fall and we go through the same procedure. We will overcome it. It is so because we are dealing with a commodity, oil is a commodity so it is responsive to global supply and demand, when supply is high prices will fall and when supply is low prices will go high. We shall go back to where the price will be high, it may not get to $140 but it will probably get to $100. The problem is that when those prices come let us not go to sleep. We should be much more active and determined to diversify the economy and that’s the way so that we reduce our reliance because another cycle will come. We should not relax the efforts to diversify the economy, we should sustain development and this is where the efforts to have our excess crude account must -because it is from that excess account money was taken-and there could be other things that could be used to invest so that we diversify the economy for the excess crude account and that will help the country ultimately.
We should put more efforts on power, especially more investments because that would create a lot of industrial development, create enabling environment, issues that will speed up manufacturing generally. We can do a lot more in agriculture. Let us focus on SMEs. If you see somebody building a kiosk by the road side, encourage him because that kiosk he is building will create job for himself, the carpenter, the brick layer and the electrician who will wire it and may be one or two people who will stay in the kiosk. Let us have an enterprise culture whereby we should be thinking of production, what are you doing to create one, is anybody going to add value, that enterprise mentality and focus I believe is what we need. Let people be encouraged to get their own business. Here you find out that there is anti-enterprise development, you see one company developing, the local government will come, and area boys will come everybody will come to molest the company as if it is a crime to set up a business. That mentality has to stop.
As one of the think tank behind Vision 20:2020, do you think it is realistic?
I think it is very realistic because our vision is simply to be among the top 20 largest economy by the year 2020. After the rebasing of the economy last year, we came to number 26 and we have five years to 2020. I believe it is achievable irrespective of the fall in oil prices which I believe would not remain this low for too long. By 2016, we expect that there would be a rebound. As I said, it may not go back to high level but expect a rebound in a manner that would cause higher growth. We recorded growth between 6-7per cent for many years. The World Bank projected it is going to fall below 5per cent this year which is understandable. I think that there is going to be a rebound and Vision 20:2020 would be achievable.
Debt recovery remains a bane of the economy as many businesses renege on their commitments to financial institutions. What best practices would you suggest in tackling this?
I believe that it a problem of a political risk economy. People were not sure what would happen so they would prefer to owe than to be owed. But with the political and the uncertainty fairly moved, the normal course of activity will surely resume and people would require replenishment of the productive sector. So if you are owing your supplier, you would begin to pay them so that you can get fresh supplies unless you want a complete break in your supply. I think there is reduction in debt profile. Two, I think that we should begin to ensure that agreement and contracts are being respected because most of these things happen because we are not respecting agreement and thirdly, the issue of enforcing these contracts. Many issues arise from the ability to enforce a contract and if a contract is not working and you want to get a relief from court or from the judicial system, it would take much longer than you would find out. We need to improve our judicial system that people can enforce their rights including ability to recover.
I think, essentially it’s a contractual thing. If people breach contract, you should be able to enforce your own right. There’s no other way.
The Nigerian Economic Summit Group is supposed to serve as a think tank but their impact hasn’t been felt thus far. As a pioneer member of the group why do you think that NESG has been a lame duck of some sort?
It is not true. The NESG has been a partner in supporting the reformation of our economic policies. When we started we were running an economy that was a closed shop. While we were trying to drive on the left, others were trying to drive to the right. But through the economic advocacy of the NESG, the country has opened up. We have joined the global best practices in the economic management. Economy has opened up from the regimented system where foreign exchange rate was fixed; trade was fixed to where we are now market determined to government controls all the levers of the economy to where we have a high private sector in economic management of the nation-through privatisation and deregulation. These came from the economic group of NESG, which focused on anti-corruption, education, wellbeing and healthcare. So, it’s never a lame duck. The only thing you can say because changes have become institutionalised, nothing dramatic is happening. We have been preaching deregulation of the downstream sector we have gotten to a point where we were almost done. Until deregulation is completed, it would look as if nothing is happening. We have dwelt on education and that had a lot of impact on education policies and we have taken issues one after the other in areas where we think that additional efforts should be provided. We are continuing our dialogue of advocacy.
Unlike other advanced economies, Nigeria doesn’t have a fair share of what you can call legacy companies i.e. those who outlive their owners. Why is this so?
First is that we also have a young history of enterprise development because most of the enterprises were owned by foreigners. But starting from 1978 when indigenisation policy came, we find major enterprises that are locally owned by Nigerians. That’s one major reason overall. The other is the fact that many of the enterprises that were started much earlier didn’t adopt best business practices. A couple of them operated in informal sector, they didn’t adopt proper business perpetration principle. Some of them were run like family businesses and therefore best corporate governing principle were not applied. Things were done from one pocket to another. Structured planning was never made so that when the people die, struggle begins because no proper succession planning was made. Sometimes will were not properly written, we don’t have the best managers. As such, lack of managerial expertise, corporate governance principle and no structure planning have been responsible for the quick demise of these businesses. But I think that has been corrected now because more indigenous companies like Dangote are been run like global businesses so they will succeed their founders.
What are the quick wins you would suggest for the incoming government to drive the economy?
First is that they should maintain the momentum in deregulation, they should complete the outstanding deregulation that would save money. Secondly, continue the privatisation efforts in the entire economy, especially in the power sector, complete the privatisation and take it to the downstream in the total value chain to the power sector. The other is to maintain focus on the policies and programmes that are already increasing locally produced food such as rice, cotton, variety of our products are on the offspring. The other is to sustain some of the policy initiatives in the productive sector, especially manufacturing. The focus on sustenance on SME, a lot of products at agricultural level which are in the market should be sustained to give credit to small and medium scale enterprises. I think that our major focus should be on job creation. Every policy that would promote job creation should be -and in everything we do -we should ask this question, how many jobs can this initiative bring? If that remains, we cannot fall below where we are now.
The private sector was doing its business, there was loss of focus but the economy was not stagnant. Secondly, we may have lost in some areas. However, in the other areas where there was loss of focus, we also gained in other areas because the totality of the economy is to make sure that economic activities are going on. So, if printers were printing more posters and were doing more -they are boosting the economy moreorless. If Nigerians who were unemployed had temporary employment as party agents, wealth is being redistributed in all areas, as such, there is no major loss in the economy. It is a rearrangement of activities. A few areas may have faced some reduction but I don’t think the economy was stagnant and so we didn’t lose anything significantly.
If you had the opportunity of setting agenda for the incoming government what would be your focal point?
First is to heal the nation because it seems like the country is divided into two from the way the elections went. The country is politically-divided. So, the first is to unite the country under one banner. We should deemphasise political affiliation. Of course, all of us are one country, we must demonstrate, break the barrier right now and bring everybody under one umbrella not just by mouth but by action because you would be creating camps and wherever you have camps, unity is on the run. We should find a way to unite Nigerians under one umbrella. Secondly, not to waste too much time looking back, there’s so much work to be done. This is not the time to start saying what this person did and what the other person did not do, we should move forward because when you finish somebody will continue. Let us not waste time looking back, let’s look forward and let’s maintain momentum because lack of momentum kills momentum. I suggest that the incoming government should actively handle the economic issues and ensure that we don’t lose momentum, avoid policy reversal because that’s what is found to be wrong with Africans. You see a situation when one government comes, he says what the other government did is bad and wants to start afresh, that takes a lot of time. The good things the outgoing government has done, just build on that. Let us not waste time on unproductive inquest, let’s move forward while we are checking to make sure that things were done right and correct. But let it not be a policy reversal that would not be in the interest of the nation. After all the dribbling and rigmarole nothing will happen, it’s not good for the country at this time.
