FG should look beyond oil and engage private sector urgently to save Nigeria- ZINOX BOSS ….Says it’s too late to devalue Naira

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.