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Our billionnaire speculators are holding Nigeria by the jugular

•Why pumping of dollars in Forex market will not work
•TSA with banks is suicide mission

By Ishola Balogun

The Chief Facilitator, Nigeria Ease of Doing Business Initiative and Group Managing Director of CFL Group of Companies, a foremost infrastructure company with   diversified project portfolios, Mr. Lai Omotola, speaks on the economy. Excerpts: 

•Lai Omotola


What is ‘Ease of Doing Business Initiative’ all about?

The Nigeria Ease of Doing Business Initiative is the idea of CFL group. It is purely a private initiative. We have decided to come up with this initiative to monitor the progress made by the Federal Government and 36 State Governments in Nigeria. The federal government recently said it would make deliberate efforts to improve the ease of doing business in the country. Like every word of commitment made by previous governments, we want to make sure that this deliberate commitment   impacts on the economy. This is our own idea of how the economy could be further improved.

Can you give more insight into how to actualise the philosophy of this initiative?

According to the World Bank, there are 10 indices often used to measure the ease of doing business globally. What we have discovered is that for every index we see, we look at the parastatal in charge of every sector and examine it. The first index is starting a business. The first step of starting a business in Nigeria is registration of the company name. The Corporate Affairs Commission (CAC) has said Nigerians can register their companies in 48 hours. As practitioners, we have not experienced it. The fastest that we have seen so far is two weeks. Our strategy is to classify all businesses according to sectors. Our aim is to engage the 36 states and see the ease of doing business. We will play an advisory role to the governments at national and sub-national levels. We will begin to rate ease of doing business in each state monthly. We will rate parastatals that are important to the country’s economy monthly to put the Chief Executives on their toes. We will   look at other indices aside those that were listed by the World Bank. The CAC tells us that it is easy to   register companies online. We will test it and organize   discussion with the CAC. At that forum, lawyers and other stakeholders will sit down and engage the agency. Another is getting a work permit. The World Bank sets the parameter because in every economy, one of the boosters is construction of houses. It is very important. We all know no one can start construction without having any approval. For instance, when one wants to construct a building and has about one year. Within the time-frame, he was frustrated in getting building approval. Perhaps he spends six months of the construction struggling to secure building approval. There is no state today that can issue building approval within two weeks. Lagos is trying because they now have electronic planning permit. It is automated, but still requires human interface that will make it bureaucratic.

But unstable power supply poses graver challenge?

Undoubtedly, electricity is another key element. What is our performance in providing electricity for the masses? The question now is that are we improving or stagnant? We will be engaging the Discos and Gencos on how they have fared in the last few years. Property registration is as important as electricity. In fact, it the fourth index that the World uses to measure the ease of doing business in any country. Looking at Nigeria, how long does it take for anyone to get government consent or Certificate of Ownership? We all know the answer. Registration of a property is important. When one asset is registered, one can get value for it in the bank. But it remains a serious challenge for many. This is because it is still in the hand of the government. So, we will be engaging the Land Bureau to know what they are doing as regards this. Getting credit from banks is a major index. We have 24 commercial banks in Nigeria. All the banks are not interested in issuing credit to customers. This is due to the economic challenges. We have all agreed that access to credit is very important. But it is pathetic that we are not getting access to credit. Also, we know there are two critical sectors of our economy that must have access to credit. The small and medium enterprise (SME) is one while the other is real sector. It will be very difficult to explain any economy that will grow without access to credit. So, we will be engaging our financial institutions, Central Bank of Nigeria and Ministry of Finance among others.

Can businesses survive or grow without strategic support from financial institutions and government?

That is what the sixth index of the World Bank Ease of Doing Business really talks about. It talks about the need to protect minority investors. The minority investors are the local investors. There is a debate between ‘do we borrow to grow’ or ‘invest to grow’. The Nigerian Government is thinking of borrowing in order to build the country’s infrastructure and other needs and finance credit. That brings additional deficit to our country.

Recently, the CBN argued that we should attract investors to grow Nigeria’s economy. The explanation is that when one attracts investment, the investors will provide the required infrastructure. It will be more profitable for the country’s economy. The philosophy is changing from where we were before. When we are propagating investment, there are two categories of investors, namely the minority investors and foreign investors. The minority investors are the indigenous or local investors. It is pathetic that our economy has ignored the first and embraces the second. The minority investors are recognised globally. We have forgotten that every foreign investor examines the local investors to see if they have benefitted from investment opportunities the government is dangling before them. We need the local investors to turn the country’s economy around. We cannot diversify the economy by borrowing. Also, if we are striving to promote local products, we must ensure that the local producers are comfortable. The economic template of the federal government must be very clear and transparent. The government must show commitment to involving the major stakeholders which are the local investors, thus making them the foundation for the economy. Anything short of the index of protecting the minority would be a repetition of the previous government.

Can we grow our economy based on taxes instead of depending on oil revenues?

The strength of our economy is dependent on how much cash the government can generate. That is what the seventh index looks into. Today, we have seen that the number of people paying taxes compared to our population is very insignificant. There is a major problem of paying tax. Nations do not grow outside tax. Government is not expected to be in business, but rather to provide enabling environment for the citizens to do business with ease. After doing this, the government can then collect taxes. That is the process. But when the government has decided to get involved in business, it affects the country’s growth. The government is expected to develop initiatives that will solve problems. For instance, the NYSC is an initiative that was proffered to solve problem of unity. It is the initiative provided by the government that brings activities. One of the single initiatives of the present administration is whistle-blower policy. We have all seen the result of the policy. The reason our economy is docile is because we cannot find the initiatives. When there is a problem, the obligation of the government is to introduce initiatives that will solve the challenges. When the Ambode administration assumed office, there were intractable traffic challenges. But the Ambode administration introduced lay-bys on some roads and travel time reduced. For instance, the case of Uber, the taxi firm that has almost taken over the country’s taxi business, is an initiative. Many have started parking their cars for Uber. Many now advertise for the company. But recently, the case of the driver, who was killed, occurred. The incident indicates the challenge to the easy of doing business is security. Apart from taxes, trading across borders is another index of the ease of doing business. That is the responsibility of Customs and the Immigration. In other climes, one does not see Immigration or Customs checking passengers’ luggage. But in Nigeria, reverse is the case. Why should this happen in Nigeria? Whenever we continue to see Customs and immigration at the airport, the ease of doing business has a problem.

Aside the indices of the World Bank, what other rating World Bank your organisation will factor into measuring the ease of doing business in Nigeria?

We will look into other issues that the World Bank did not consider. Critical is staffing. It is a real challenge. We will also factor in security. Though the World Bank did not consider it, it is a big issue in our country. Presently, every Nigerian provides its own security. Likewise, infrastructure is critical. We have to do it by ourselves. Besides, we have education. Our education is not tailored towards the expected outcome. It is lopsided. The town has lost synergy with the gown. It is expected that both should work together. Also, the gown is expected to assist the town. But the gown is not aware of the current trend. Finally, we will consider the economy, especially the micro and macro-economic stability. Forex is grace challenge. It is expected that when you pump in more dollars, there should be reduction. But we have discovered that it is not working. We will also look at the impact of speculation and productivity on our economy. About 90 percent of our billionaires are speculators. Those who made money not through productive means are very insignificant. The challenge currently facing the country’s currency is due to speculators. Some people have decided that it is easier to make money through forex than investing. And that is what the CBN just realized – that there are many of them and led by the banks. Also, it was a suicide mission to start the Treasury Single Account (TSA) with the commercial banks. The situation we found ourselves today is a state where the speculators are holding the country’s economy by the jugular. Nigeria is looking towards encouraging indigenous manufacturers. I believe that 90 percent of what we need to feed ourselves can be sourced locally. But the problem is can we provide the opportunity for the local producers to thrive. It is important to note that any government that is devoid of initiatives cannot generate any activities. If there are no activities in the economy, everyone will be moving towards depression. That is responsible for the recent statistics that stated that seven out of ten persons are depressed. The depression in the country is real. We have a serious problem in our hands. It requires our leaders to roll-up their sleeves for work. This is to avoid explosion of this challenge. The situation requires emergency solution.

Does the Economic Recovery and Growth Plan (ERGP) really offer any hope?

I have read the ERGP document.   There is nothing new in the economic plan especially for anyone who has been studying the country’s economy. We all know these things but the challenge is the implementation of the policy. Look at Mr. Babatunde Fashola. I believe he must have now understood that the offices of the Minister and Governor are two different ball games. As the governor, he could finish 10 kilometer road within a short time. But as the minister, he will not be able to do such. The reason is that the state is different from the Federal. Let us begin to count now. At this time next year, we will all see if the plan has been able to achieve the required purpose. It is not easy to implement policies in this country.


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