Nigeria: 'Nigeria Needs Alignment of Monetary, Fiscal Policies for Economic Growth'


Dr Emi Membere-Otaji, is the Managing Director/CEO, Elshcon Group of Companies, board member of a host of other firms and agencies, and a former president, Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture (PHCCIMA). In this interview with CLARA NWACHUKWU, the 61-year-old speaks on topical issues in the Nigerian economy, especially on finance and funding of businesses, as well as the way forward. Excerpts:

How has the CBN monetary policy and other government policies impacted on the Organised Private Sector (OPS)?

I think, as one who participates in different aspects of the Nigerian economy, I mean, until last year the President of the Port Harcourt Chamber of Commerce, I understand the feeling of the organised private sector. The monetary policy committee of the CBN takes care of the supply of money; regulates rate lending, transfers of money and so on. Knowing our system in Nigeria, you know we came out of economic recession not too long ago. You know that we have big infrastructural gaps, so the positional thing is for people to say, take it easy; lower the interest rate, and encourage a lot of borrowing, and encourage investments and grow the economy, the SMEs, the real sector will come back, that is the thing.

But then, also look at the flip side - the macro-economic issue in the country is not only the monetary policy, there is also the fiscal policy. Those ones are the government side of it, which is not in the hands of the Central Bank entirely - government policies as it affects taxation, the tax net, borrowing, expenditures etc, when you put all these together, the totality of the economic growth and stability is in their hands. Today, the additional challenge is insecurity. It used to be the Niger Delta; from Niger Delta to all other directions. Today, it is far more, it's affecting everything. If you say from non-oil go to agriculture, how many people can easily go to their farms? Farmers cannot go to the farm even if you give them billions; we need to help government to nip this in the bud. How many people can easily go from town to town? Not even their farms now, I mean town to town to do business, in the West, in the East, and in the North, we are not even talking about the Niger Delta any more. The government is trying but a lot needs to be done.

There are other variables affecting the economy and the private sector; if they (government) do not take certain decisions and won't just say that Nigeria just came out of the economic recession and what we need is economic growth through juicy interest rate and borrowing and putting infrastructure. You have to look at the vision, and if you don't the vision just goes away - take Venezuela for instance; you need to look at their socio-political issues. There are a lot of variables to look at because it is a peculiar situation, and if you don't handle it well, Nigeria is the worse for it. Go to Zimbabwe, you may say they don't have oil, they also have a lot of solid minerals and agriculture yet the economy went into tethers.

As it stands, is it wise to have the interest and exchange rates at the same level for so long?

It is not ideal, and we should not also be theoretical because of other variables like the fiscal policies, socio-political considerations. It's like a football team - you, a very good centre-left, you know what, and there are some issues in the other wingers, some weak links, you need to balance it, otherwise you will cause more problems. It takes certain drastic steps, there is unemployment, and there is a lot of hunger, and because of the issues that I mentioned, insecurity and all that, some local and international investors are allegedly taking their money out. It will take certain drastic steps to get the desirable impacts. Some local investors are also alleged to be doing wait-and-see after the last elections.

So, the CBN Monitoring Policy Committee cannot really take drastic decisions or actions; the monetary policy and fiscal policy has to align for the growth and development of the economy. One thing I think has been missing for some years, which I think this second tenure of the government in power will correct is what the Obasanjo government did, having a strong coordinating minister of finance, who will have strong political will, and even the backing of the federal government; Nigeria is a major exporter of talents.

In the first tenure, there was a lot of incongruence in the various aspects of governance. Basically a little shift in alignment and coordination of the various aspects and harmonising was a lot of challenge. Sometimes, I attended the Presidential Business Roundtable, which was quarterly up to last year, and sometimes some decisions taken were implemented. But we need a strong political will irrespective of political and ethnic considerations, and we need to get our acts together. An average American criticises Trump on CNN every day, but there is still proper coordination when it comes to the economy. They have the best economy in recent times despite their political differences. All these bad indices they are quoting to us as poverty capital this, that capital, all the negative capitals have to go because we have enough resources - human and material resources to get the economy growing properly. Nigeria is a big and blessed country.

Access to funds has remained the biggest issue for growth and development in the private sector, how can this be improved?

Well, access to funds has always been a major problem for businesses. The interest rate is high. For most commercial banks to give you loans, the conventional thing is to say, go and bring your C of O, by the time they finish with you, the collateral you will be asked to bring is almost half of the money in your account. Again, they too have found out that there is a lot of insider issues in the banks, that some of the people you are giving loans should ideally not be given, because you find out that they are using it for some other things outside what the money should be used for. Or some of the projects they want to execute, they do not do the proper due diligence.

Then, how would you assess the economy at the micro-economic level under prevailing conditions?

Obviously, the Medium and Small Enterprises go through a lot. The big companies have a lot of muscles to weather the storm more than the SMEs. Government should have an independent monitoring and evaluation, and see if the desirable impacts are being made; you will be surprised about the outcome. When they say people are crying and unemployment is on the rise, despite interventions here and there, but I have a very positive outlook and I tell the younger entrepreneurs never to give up.

My background is medicine. I read medicine, and many years ago, a psychiatrist cannot open a clinic and run a psychiatric hospital because there was no need for it. But a lot is happening nowadays, many are depressed mentally, and Nigerians are committing suicide here and there. But despite this, I tell my children and people I mentor to be positively-focused. Politically, four years have gone, another four years just started; a couple of good steps by the government would change the game. Few years ago, Rwanda had a genocide tag added to the already bad socio-political situation, today; there are changes because of good policies. Same thing goes for Ethiopia, as it went through its own challenges. Now, they have found their rhythm. Nigeria, with large population of about 190 million, has very highly-educated people with high percentage of youths, large arable lands, long coastal lands, and of course, natural disasters are far from us. So, it's a matter of time. It is not a time to run away, not a time to start taking 'sniper'. When an aircraft is going through bad weather, the pilot puts in more engine power. Don't do business as usual, do business in the right way. And we need to focus, with government taking the right steps, it is just a matter of time, and businesses big and small ones will pick up again.

You were 61 years on Monday, looking at your business empire and all that happened along the line, what would you have done differently?

What I would have done differently? That is a good question. That would have been to have investments in various aspects early enough. For instance, we are in the Nigerian content oil and gas, and along the line, oil price went down, we took loans in dollars to buy vessels and issues came up. I would love to attend more conferences, know what is happening, and invest in key aspects of the economy. I would have spread my investments fairly wider than it is, certainly not aimlessly, but spread it in such a way that you don't put your eggs in one basket. It is also good, at this point to give back to the society as much as possible. We need to look at people, what their legacies are when they are no more. As you grow older, you eat less. And, at this point, you probably have finished training your children so you need to give back to the society, and not about just amass and amass this and that. And, you need to get humbler as you grow older. Also, take every major decision made to God in prayer first, and be depend a lot on my gut feelings.

You are the immediate past President of PHCCIMA, tell us about life after the chamber and your legacies?

I was President of the Port Harcourt Chamber of Commerce, Industries, Mines and Agriculture (PHCCIMA) for three years, 2015 to 2018. Within the period, my core businesses suffered to some extent, because people don't know this, the chamber of commerce gives you visibility - you meet people and go to places. For your own personal thing, it is just a means to an end and not an end in itself. There is no money there. Sometimes you use your personal money to undertake certain trips. But since I left, it has given me time to look into my businesses. I could travel more, and read more. I had time to go to Jerusalem. The chamber of commerce is like an association of businesses, you are just the figure head. You have to put in your time and talent working in an environment like that. When the economy was good, donations could be made to the chamber, but now that it is bad, you have to use the chamber's subventions, and how many of that can you get. Sometimes you have to use your own money.

In terms of what I have done, a dancer does not see his own back, it is the bystanders that will see you and tell you your performance if you do well or not. But last year, the Chamber was 61 years, and in 61 years they didn't have a landed property. But, within my time, the government of Rivers State donated five hectares of land; for me, this is something noteworthy. I worked for it to get it for the chamber. And, of course, a lot of visibility and linkages with ministries, departments, and agencies of government, we attended the quarterly presidential business meetings. Also, with the state government, the Chamber played a lot of roles in the area of taxation. Before touts took over that aspect; they harassed people, and businesses didn't know how much tax to pay. But now, you already know, even if your tax is N100 million; it is available online. It is like your bank account. We have done our bit; the desire of any good father is that his children should be better. Now, as an ambassador of the chamber, I am available to the new president where my advice is needed. My desire is that they do better and the ones coming behind them too even do better things for the good of the chamber.

Finally, what is your advice to the youth entrepreneurs?

Well, they are becoming economic players when the terrain is tough. The terrain is challenging; it has its negative and positive sides. The negative side is that you are coming in when the chances of survival is slim. They would tell you about the negative statistics. But, the good thing about the challenge is that, from day one you start wearing your thinking cap. You are rising up to do serious business without taking things for granted. It is better you start now so that when the socio-political situations become stable, your business would have developed the required muscles, instead of coming in when everything looks okay. The challenges would make you to have more experience. The times are challenging, so they should equip themselves to be agile, and not be lukewarm. They should look at mentors who have succeeded in their areas of endeavour. They would need a lot of reading and knowledge acquisition because knowledge is key and power.

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