Dr. Olumide Emmanuel, a globally recognised Wealth creation coach, is the Chief Executive Officer of Common Sense Group. He speaks extensively on Nigeria’s foreign exchange, fuel subsidy removal and other key financial policies in this no holds barred interview with Platforms Africa’s Adeola Yusuf where he gave practical life-changing suggestions to government, business owners, and individuals on how to survive, create multiply and sustain wealth at a time like this. Excerpts;
Sir, the new administration has enacted some policies such as the floating of the foreign exchange as well as removal of the fuel subsidy. Do you think they are a step in the right direction?
They have made the right decisions in the right directions but because of the peculiarities of Nigeria, they are decisions that cannot produce the intended results on their own without other factors being considered. For instance, removing fuel subsidy is the right thing to do because we all know that fuel subsidy is a fraud, but the repercussion of the removal needs to be cushioned. So there has to be a holistic review to policy because removing subsidy when you have not yet put structures and systems in place to cushion the effect, is going to have a negative impact.
You see, if you look at what has happened since it has been done, you discovered that people are now bringing in their money. So, we have the highest inflow of foreign currency within the last one month and highest since the last 15 years. But the repercussion on the locals is negative. The reason why we have those different market crises is more of corruption. That has not changed. So, while the policy is good, the reason why people were getting dollars at N440 and going to round two, is because there is corruption, which has not changed, in the system.
Right now, they can still get the dollar at N690 and sell at N780 and then the people who really need the dollars are still not getting the dollars because we are not a productive economy.
For you to get dollars you have to sell something. Nothing has changed in the direction of what we are selling.
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So, while it is the right policy, the effect is negative, and will continue to be negative, until few things are put in place. These include: the issue of corruption, productivity and then the issue of educating people. Because people are not knowledgeable, when a positive policy is made, because of the knowledge gap, people will not understand that there is a gestation cycle in policy implementation and policy actualization.
When a policy is made, it will take sometimes, six months and sometimes eight months, one year and sometimes two years for the effect to come.
For instance, when the telecoms industry came to Nigeria, how much were we buying SIM cards, almost N30k and currently, it is almost free. How long did it take to go through that cycle? Almost 10 years.
In the same way, removing subsidy is good but it will take at least two years for us see the effects because there are a lot of other things that have to be done. The same thing with this forex issue. The dollar may most likely get to a N1000k and pounds may get to N1,500. It will continue like that until it hits a ceiling, then it will begin to come down and then we will come back to status quo.
For me, I will say that they will have to go through some two years for things to stabilize, that is if they do other things right.
So, what then are those things that have to be done for the policies to begin to have positive effects?
The challenge with Nigeria is that when we want to solve a problem, we always think monolithically, we think that this is the answer. But we don’t realise that that answer is not the only answer. There are six other answers that must work pari-pasu with that particular answer.
The issue here is that between the time you removed the subsidy and the time you put the cushioning effect, a lot of things would have been destroyed. So, before you remove, first have the cushioning effect in place so that everything will be happening hand in hand.
If you are making announcements that we are removing subsidy on July 1st, 2023, in the next 30 days before we enforce it, 33,000 buses would have already been brought in, every state would have already taken a delivery of 1,000 buses each and anyone that is a student will be entitled to free bus rides, senior citizens also entitled to bus rides forever; all civil servants in all states would be made to work for three days a week as a nationalistic vision; while they are increasing their own minimum wage up there, minimum wage for workers will be increased to N75,000 with immediate effect. You are announcing a policy and the cushioning effect at the same time.
That is the way it is done. You cannot choose one against the other. Life and livelihood will have to be balanced.
Don’t forget that when the president made the remark that subsidy is gone, it was an error because it was not in his speech. All they need to do now is to do the other things. To say they should now go back to throw the policy away, is unacceptable. They should not try it. The policy has come to stay. Whatever problem will happen, let it begin to happen and we will solve it together because if we go back, it will be more dangerous.
Somebody is saying all the money they have been saving from subsidy they should come and give account of it. Truth is, they are not saving any money from subsidy. They are just reducing what they are borrowing. We are in a deep hole. And it will continue till like two years and if things are done right, we can turn the situation around for good. We can then come out from the hole, move to ground zero and then begin to look on how to continue.
You know the problem again, as they are removing the subsidy, has anybody been arrested ever since, has anybody been jailed? You have to attack it frontally and block the leakages. Abroad, they would have arrested and jailed at least 60 people. That is how you change a system. As long as they are not prosecuting, we will just be going in circles.
I do not believe that any single politician is the answer to Nigeria’s problem. But I advise that even if its just four years that the current president will do, he should do the right things so as to write his name in gold.
Since the cushioning effect of these policies have not been put in place, what advice do you have for business owners?
They should sit down and reflect. What we are going through now cannot be worse than COVID 19 and if we could survive COVID, we will survive this one. What I would advise now is that we should operate with COVID mentality, that while we are moving around, that we are now on another lockdown. I have a book called How To Increase Your Value in the Market Place and one of the modules in the book is: Leading In Tough Times. I also have shared extensively how we can handle such situations.
If you are facing a tough time, first, go back to basics. A lot of organisations over the years have brought a lot of things on board that were not part of the basics.
Take for instance, if you lodge in a five star hotel, they are charging you for gym and swimming pool which you may not use. Meanwhile, there are some cheaper hotels that are just bed and breakfast.
Business owners should ask themselves the following questions: Why do we exist as a company and what are we here to do? The telecoms companies are here to sell airtime, but many of them are doing some other things like conducting seminars and bringing in foreigners to come and do trainings. You are not a training company. Every organization should go back to their core reason for existence so that you can remove all the excesses.
Two: Be creative. We as a company have been doing virtual work since 2014. Now, everybody is talking about virtual work. Everybody should be able to identify where they can cut costs. The only way to make money available is either to increase your income or reduce your expenditure.
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People don’t always consider reducing expenditure. There are a lot of things that can be done. If you reduce work to three days a week, the work will always still be done. I have always said it, every developed nation on earth pays people per hour and not per month. We need to go back and revisit that. An average Nigerian staff, except in multinationals where there are systems and structures, works only three to five hours a day.
Every developed nation on earth pays people per hour and not per month. We need to go back and revisit that.
At the individual levels, since some of these palliatives are not forthcoming, what are the survival strategy you will advise under the present situation?
One of the things we have not understood in this part of the world is that collaboration is the new competition. A lot of times we try to do things on a solo level and that solo level has affected us.
In the UK today, people have cars but they don’t go out with their cars. They engage in carpooling. We should be thinking of the major things that cost us money and find ways to reduce them.
For shelter, feeding and transportation. When you look at shelter, you now begin to think of how to live communally. In the UK, you find three different people renting one-one room, sharing the kitchen, parlour and other amenities. They never knew each other anywhere. Why do you need a two-bedroom apartment as a single man that is not ready to marry in the next two or three years. Is hotel not face-me, I face-you as everybody is in his own room? Its just that our mindsets have not been developed.
collaboration is the new competition.
Two, feeding: Instead of going to the supermarket to shop for things that are too expensive, why not a few people coming together, pool money together and go to places like Mile 12 or Otto where food stuffs are sold in wholesale prices. Then come back and share. Besides, when they say three-square meal, where did they get that from? Is three a square or a triangle? Why do you eat? You don’t live to eat but you eat to live. You only eat because you are hungry, if you are not hungry, you are not supposed to eat. Two meals a day, is ideal for any normal human being. Once we begin to think in that direction, it will help us.
Then on transportation, why must I be driving and three or four spaces are empty in my car? If we live in the same neighbourhood, we can come together and use each other’s car on a weekly basis. And we begin to carpool. We have to survive anyhow. The White man said, if you cannot fly, run, if you cannot run, walk and if you cannot walk, crawl. Just make sure you are making progress. That is the way out, everybody needs to tighten their belts.
At times like these, people’s savings are being impacted. As a wealth creator, what do you think people can do to regain their balance?
The principle for wealth creation has never changed and will never change. And like I have said over and over again, principles are universal. But application of those principles are personal, contextual and geographical. Savings is sacrosanct, but why do you save. You save to put money for your rest. One of the reasons why you save is for eventuality, emergency and for a financial planning mechanism because everybody has to have six to eight months of their earnings saved up in cash. And thereafter, you invest it into something that can be giving you returns. You cannot but sit down and face the reality. Your expenses will be higher while income will be stagnant. It is the time for family belt-tightening discussion. Once you are able to navigate all that, you are going to survive it because tough times never last but tough people do.
Can you please shed more light on the monetary policy as well as the ongoing meeting between the power distribution companies and the Nigerian Electric Regulation Commission (NERC) on the planned tariff review?
Let me talk about the issue of power. The hypocrisy of Nigerians is so amazing because we are already spending the money they are asking us to come and spend. Let us face the reality and say that the problem is not what they are asking us to come and pay. The problem is that we don’t trust the government. What they are asking us to come and pay is still cheaper than the generators we are using. Electricity is cheaper than generator any day, any time.
If they increase it and make it competitive, after a gestation cycle, it will go down. One of the problems we have is that as long as they are not in that realm of metering people, we will be losing more money. When everybody is metered, water will find its level.
When it comes to power tariff, the problem is not what they are asking us to come and pay. The problem is that we don’t trust the government.
But let me also say this again, many of our policies cannot work independently. People say economics is a science. Economy is only a science in a sane economy. In Nigeria, many scientific laws have failed. Even scientists know it.
Should you be advised to come and create wealth for Nigeria, what are the things you will put in place?
First permit me to quote the scripture as a pastor that I am. The God that created all of us gave us the solution to everything on earth. During creation, the first thing that God did was to declare: Let there be light.
As long as we are in darkness, we can never go far. The first thing I will provide is power, by all means. Anything that is blocking it, will be dealt with.
Two, shed the same light on all the corrupt places and all the different things that have been in darkness. Multiple accounting, multiple agency, multiple money and multiple things that are happening. All these ones that in the morning somebody is a governor, in the evening he is a senator, we will shed light on all those darkness and deal with them decisively.
Three, light at the end of the tunnel. To give people a future, ensure there is light at the end of the tunnel.
The second thing that God did was to say that the sky should be separated from the ground. And the Water from the land. Who is a Nigerian? We have drivers licence, we have BVN, we have NIN, yet no national identity card. Until we do that, we will be fooling ourselves. Until every Nigerian is known and we have an accurate data of who we are, all these stories that people are talking about will cease to be. Trust me, if things are done rightly, everybody can be getting N20,000 every month in their accounts and nothing will shake.
Then Communication: They will be hearing my voice every week on a national broadcast. I will not be doing national broadcast on May 1st and October 1st alone. No! I have written a book: Birthing a New Nigeria. From our National Anthem, we have 45 values. Arise o compatriots (patriotism); Nigeria’s call, Obey (obedience) and many more. Each of those 45 values is what I will undertake per week. All the radio and TV stations and every individual will have to sign up for it free.
From our National Anthem, we have 45 values.
Before you know it, we will be renewing people’s minds because our greatest asset is the human capital.
Can you talk about trans-generational savings?
One of the assets of a nation is her foreign reserve, national asset and human capital. If your foreign reserve is not strong, you are not strong in the scheme of things. So, we need to save.
One of the things that we need to save is all the recovered money that we are getting. Any time you discover a new money that you didn’t plan for, just put it in a savings. Abacha is still paying us from the grave after over 20 years. All the loots from everywhere should be saved. Nigerian banks have billions of people’s money that are frozen and stolen in vaults. People are not aware of them. Look into the banking sector and fish out all the money/accounts that are dormant. All the Wonder Banks that were closed, where are the money in them? You mop up everything and then you save it. Have you noticed that every organization that they say AMCON has taken over, people are still the ones that suffer from them? So, what are we still talking about?
You know all these pension schemes that we are talking about is a fraud. Your money is just being devalued before your very eye. By the time you are 70, and they give your pension of N30 million to you, you may not even be able to pay rent with it. Bring your pension and let us teach you how to make money with it.
