FG
should look beyond oil and engage
private sector urgently to save Nigeria- ZINOX BOSS
….Says
it’s too late to devalue Naira
Leo Stan
Ekeh is the chairman of Zinox Group.Nigeria’s foremost
integrated Information and Communication Technology (ICT) conglomerate Ekeh is a serial digital
entrepreneur, and a man who carries around with him an infectious passion for
the Nigerian project, especially with regards to seeing the country take its
rightful place in the comity of industrialized nations by leveraging on the
limitless opportunities in the ICT sub-sector. Speaking to ICT journalists in
Lagos, he bares his mind on a number of issues including the current economic
climate, Naira devaluation, the
education sector and much more.
On Naira Devaluation
Notwithstanding the recent call by the United states
for the devaluation of the naira, Chairman of Zinox Group, Nigeria’s foremost
integrated Information and Communication Technology (ICT) conglomerate, Leo
Stan Ekeh has lent his voice to the on-going debate over the calls for the
devaluation of the local currency, noting that prevailing circumstances in the
nation’s fiscal and monetary framework aligned to developments in the global
oil market makes devaluation a needless venture at this material time.
Since the turn of the year, the country has had to
contend with reduced government earnings from the sale of crude oil, with the
current administration especially hard-hit by the dwindling prices of the
commodity in the global market, prompting the Central Bank of Nigeria (CBN) to
impose strict forex rules to save its reserves while battling the pressure from
various quarters to devalue the naira.
For me it is
too late to devalue the naira as the move will only serve to further impoverish
the masses and plunge the country into a state of hyper-inflation. What do you
think would happen to already stretched wage earners? Would their salaries be
linked to rate of inflation as is the standard globally? As I speak a lot of
states cannot pay the minimum monthly salary.
If devaluation happened mid-last year it would have
made sense and encouraged in-flows from investors but devaluing now would
compound our already difficult situation and investors will only wait in
anticipation of a further devaluation. It will rubbish our currency forever and
strengthen the purchasing power of our trading partners,” he said.
Interestingly our company is one of the casualties
of the current forex scarcity with increasing difficulty to meet overseas
business obligations, and I believes
Nigerians and Nigerian corporates have reasonably adjusted to the realities of
the hard times with pains as most people are now prioritizing critical needs which should be
the case most times. In my view, the dire situation has most importantly
impacted common sense which is not too common in many Nigerians.
So, It’s too late to devalue the naira at this point
in time. I can see reason behind the refusal of the President to consider
devaluation as it is a move that will certainly erode the buying power of the
middle class and push millions of Nigeria already living below the poverty line
into abject penury. The country is hugely dependent on imports as it were and
with the status quo ante, any attempt to devalue the currency will only usher
in inflation and leave the country at the mercy of the vested interests in the
global economic set-up who have been voluble in their calls for devaluation.”
Rather than consider devaluing the currency, I counseled
the government to explore other options which will shore up the value of the
naira and make the country less dependent on imports as it used to be in the
past.
We should rather focus our collective energies on
workable ideas and a sound framework on which to base the diversification of
our present mono-economy to re-ignite the country’s hitherto-forgotten status
as a continental exporter.
This is the time to refurbish our school system and
save from remittance of fees for the millions of Nigerians who do not have
option than to school abroad. This is the time to create knowledge incubators
around the country which does not cost much to empower Nigerians to create
digital wealth which has near zero-incubation period. It is the time for us
develop industrial clusters in major productive zones to supply the needs of
Nigeria and reduce importation.
Also, I
predict that if oil prices rebound to at least $50 per barrel, the
administration of President Muhammadu Buhari will be one of the best placed in
the history of the country to positively impact the lives of Nigerians. Trust
me, at $50 per barrel the quality of life of today’s Nigerians may be better
than when oil prices reached record highs of $115 per barrel because Nigerians
now have a new mind-set to live real and well which wasn’t the case until few
months ago. If the prices inches to at least $50 per barrel, I am confident
that the government of President Muhammadu Buhari will be in a better position
from a financial stand-point to positively impact the lives of Nigerians and
guarantee rapid infrastructural development.
I affirmed that this belief is down to the new-found
air of accountability and probity in the polity coupled with the conscious
effort to block leakages in the system which has strengthened the country’s
capacity and empowered most of our critical institutions.
ICT as a
Game-Changer in a Nation’s Economic Development.
That’s
correct. I have always told anyone who cared to listen that the way to go when
it comes to taking Nigeria to the level of development we so urgently crave is
by building a knowledge economy. In this 21st century, no one has a business
being poor especially considering the proliferation of Information and
Communication Technology tools and the internet which has put the world at
everyone’s finger-tips.
Today,
you no longer have to physically leave your environment to gain access to
formal education.
With a
computer and access to the internet, a variety of degrees can be acquired at
your convenience. So is access to new information on business intelligence,
ideas and concepts which could radically change one’s circumstances.
Information is power and it is at everyone’s disposal at the speed of light these
days so what business do we still have as a nation being classified as a Third
World or developing country? Many years ago, I had realized that the power to
liberate millions of our youths lay in the internet and associated technologies
hence the decision behind our “Computerize Nigeria” project which we launched
in 2001.
The idea
is to provide affordable access to ICT tools and processes which, among other
things, promoted the digital re-tooling of individuals, institutions and
corporate entities as well as the launch of the first computer ownership scheme
in Nigeria.
Imagine
every Nigerian being able to own a computer which with he or she can access the
internet and avail themselves of the huge well of information and intelligence
that is evidently manifest therein.
Before
long, you will have built a knowledge economy of highly literate and
sound-thinking people who can stand on their own and take meaningful decisions
in business and life which will undoubtedly rub off on the nation’s fortunes.
Understandably, all these will have to go hand-in-hand with improved access to
education which is the foundational basis for every developed economy
Today, the Zinox Group’s investment in Xputer – a 21st
century digital software company –is timely and in line with the ambition of
building the single largest 360 degrees ICT conglomerate in Africa out of
Nigeria and creating platforms for current and future Nigerian whiz-kids to
alter their destinies.
Improving
Access to Education and Building the Knowledge Economy
Education
is the bedrock of development, as you have rightly mentioned. While I commend
the efforts of previous administrations, it is worth stating that more needs to
be done to raise the dwindling standards.
Contemporary
realities make it evidently imperative for the government to beam its focus on
the education sector as a matter of urgency and the time is now.
The
recent budget presentation made by the President which saw an increase in the
allocation to education thankfully seems to have taken into cognizance the need
to urgently intervene in the sector. Nevertheless, while allocating 5.5% of the
budget which amounts to 396 billion and represents the largest sectoral
allocation, is a big step in the right direction, more still needs to be done in
expanding access to formal education for millions of our youths.
Today,
many parents find it hard to support or see their children through school
especially at the tertiary level owing to obvious economic challenges and the
spiraling cost of access.
This is
one area the government should focus on, with a view to finding means of
reducing the impacts on especially indigent and economically vulnerable
parents. Furthermore, the government needs to do more in the area of reviving
our institutions to average standards which is not rocket science, moreso when
you consider that what obtains at the moment is at best a watered-down version
of what some of us were exposed to back then.
The Economy, Prevailing Downturn, Falling Price
of Crude Oil, Forex
Well, I
have always been an optimist. I believe the Nigerian economy can never shut
down totally, by God’s grace.
However,
the shocks and gaps in the economy at the moment represent our current
realities and we must find creative ways to navigate this harsh economic climate.
The unprecedented fall in the price of crude oil is a global phenomenon which
not even the smartest economist could have predicted.
The only
regret is the fact that successive governments failed to save for the present
rainy day we are experiencing when prices were at their peak.
Having
said that, we must always look forward. I sincerely believe that the current
administration has the requisite political will and capacity to see the country
through this storm and the new mindset of Nigerians to get things done properly
also helps. I also believe that the organized private sector holds the key to a
way out of the present quagmire.
As a
matter of urgency, President Buhari should engage the private sector to save
Nigeria. The three levels of the sector drives over 80% of Nigeria’s economy
and certainly, we can only move forward when the government carries them along.
Recall that in the run-up to last year’s elections, President Buhari met with
representatives of the private sector in Lagos to present his party’s economic
plans. This and other engagements certainly went a long way in contributing to
his victory at the polls.
It is my
considered opinion that the time is right for the President to enlist the
support of the sector in finding a way out of the current economic challenges
by restating the vision and focus of the government as well as its sincerity to
turn around the economy, as eloquently outlined during the electioneering
period. In so doing, the President can secure the support of the sector for the
vision and plans of his government. For instance, by reaching out to large
corporates, influential businessmen and individuals, and even some of our big
churches with huge reserves abroad, the government can find a way out of the
foreign exchange challenges. These establishments and individuals can lend the
government through promissory notes at an interest rate of, say 1.5% per year
which will be the highest anywhere in the world and repay gradually over a
period of one year. The government can raise money through this means which
will provide the needed foreign exchange to enable it meet the numerous
commitments and also help it navigate and offset the low price of crude oil in
the global market.
Government,
on its own part, can reward the private sector by giving them a chance to have
a say in government and by looking into some of the challenges being faced by
the sector in terms of confiscation of goods by some agencies, multiple
taxation from the tiers of government, unconducive business environment
especially as they are the custodian of power and they should be accountable to
the people who elects them to office.
I am
confident that in 18 months, the current challenges will be solved and the
economy will rebound.
Massive
Job Cuts and Losses Being Experienced
I am
sure no employer will be happy to embark on retrenchment, right-sizing or
down-sizing, as the case may be. It is a reaction to the prevailing
circumstances as businesses try their best to remain afloat. Government
agencies are also not left out as they are also heavily involved. Down-sizing
or job cuts have a huge, negative multiplier effect on the economy as it not
only affects the individual who is laid off but also affects families and other
dependents while creating a myriad of social problems. Statistically speaking,
there are well over 23 million unemployed and under-employed Nigerians who are
looking up to the government to provide employment opportunities for them.
Although
little can be done by businesses but the President can appeal to large
corporates and even small and medium companies to leverage on reserves by also
offering some tax incentives for the next 18 months so that employees are not
unnecessarily retrenched in the short term. This is the time for shareholders
to cut their dividend expectation for the economy to survive because if there
is no economy, we do not have a business. I frankly believe things shall turn
around sooner than is being speculated.
Next Big
Sector for Employment
I have
been saying it in the last 20 years. It is technology, technology and
technology. If past administrations invested heavily in this sector, the ICT
sector would be earning more revenue than oil with solid hopes of prosperity
for the majority, mostly for those from poor homes who have the brain power. Do
we expect miracles from oil? The answer is no. Global statistics has shown
credible trend in countries resolving their employment challenges through
structured investment in the ICT sector. Is it that our leaders and their
advisers are too blind to see future measureable wealth? The Devices, Software,
Solution and E-commerce sector could employ well over 45 million Nigerians with
solid future and could also bring a minimum revenue of $150billion every year.
I am not sure what we are still waiting for to save this nation. Is it not a
shame we are all waiting for oil prices to move up for the nation to survive?
We are ignoring what we have control of and putting all our hopes on nature in
this 21st century.
