From power subsidy, 2024 budget, foŕex scarcity, to relocation of Federal Airport Authority of Nigeria (FAAN) and departments of Central Bank of Nigeria (CBN) to Lagos, renowned wealth creation expert, Dr. Olumide Emmanuel, in this interview, gives a clinical assessment of President Bola Ahmed Tinubu’s government policies with practical tips for Nigerians on how to live a better life at a time like this.
What is your reaction to the Nigeria’s 2024 budget?
Many times when I hear people talk about the budget, they have expectations, people talk about dissecting the budget, discussing it, and one thing that keeps coming to my mind is that we keep forgetting that nothing has really changed.
The budgets that we come up with are not realistic budgets because most of the times, while the budgets are being prepared, they fail on many grounds.
Number one, we have signed a lot of agreements and we have become a part of a lot of decisions as regards to how many percentage of our budgets should go to some majors sectors of the economy and we have never been able to achieve that.
Number two, when we look at most of our budgets, we convert our budgets to dollars or pounds, but suddenly we have realised that we are just joking.
Number three, when we look at the budgets, we find out that most of the times, when it comes to the expenditure aspect of the budget, we go all out. But when it comes to the income aspect of the budget, we are not ready to do what needs to be done to bring in the income that will meet up with the budget.
And like I have always said, one of the things that we need to decide as a nation is whether we are really ready for growth or we just want to continue in cycles of what is politically correct.
For instance now, I think the highest part of the budget for this year is security. And when you look at the infrastructure part of the budget it is far, far below security. And when you also look at the portion of the budget for the people, it is just like two percent, and then you call it a budget of renewed hope.
And when you look at the recurrent aspect of the budget, you will see a lot of stuffs that you are like, are these guys serious?
Like I said before, this administration is doing the right thing, taking the right steps, but the result of the steps they are taking will take a while because there is what is called the gestation period for policies. And if all the right things are done, then those policies will produce the right results.
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But the challenge is the fact that most of those right decisions are being taken without putting in place the right modalities to ensure that those decisions don’t have the kind of adverse effects that it is having on people now.
The problem of Nigeria is that we keep talking about this octopus-hydra headed syndrome. It is not just one thing that will solve the problem. It is a combination of right policies being carried out concurrently that will produce results.
What we are seeing right now is that while some good things are being done here, some negative things are still happening and all in all, we are not seeing the desired results. But, I am very hopeful. There is a particular phrase that we have coined, we call it, ‘cautiously optimistic’.
That is that coinage that we have decided to use, that, we are optimistic o, but cautious.
Actually, the policies are sending the right signals to the international investors. There are some things that they have also done recently, like the policy of reducing the number of people that will be travelling; also for now, they are moving some aspects of the CBN to Lagos, even though people are trying to politicize that. I think I also saw that they’ve decided that all the monies generated from crude oil will now go to the CBN instead of going to the NNPC. Right moves because NNPC is just like one secret cult that they are using to steal our money.
So, in all, I think we should all be cautiously optimistic and we should continue to hope for the best. They call it renewed hope, while our hopes have been dashed over and over again, they are trying to renew our hope. Let’s also agree that something good will come out of this. Let’s be cautiously optimistic because when they break your heart so many times, you become heartless.
There is so much noise about the relocation of some departments of the CBN and FAAN to Lagos, if you were to be the president, what will you be telling people or does it even make economic sense?
Yes, it does. One thing I will agree with Nigerians on, is that over the years, politicians and our leaders have not done things that will make us to trust them. So many people in the country have lost trust on politicians and our leaders. That lack of trust has affected a lot of us and affected the way we interpret every step that they take. But if you are someone that looks at things objectively without any ethnic, political or religious colouration, you will see the good intention in what is being done.
For instance, why would someone be spending money to rent a place when they have a place they don’t need to pay money for that belongs to them. It doesn’t make economic sense.
Meanwhile, they are just moving a part. And if you go to the headquarters in Abuja, the place is overcrowded. A lot of people do not want to come to Lagos because political appointments have become a major issue, so they are now trying to bring in ethnicity and religion. But to me, these are fantastic decisions that are being made that will help us. Lagos is the commercial nerve of the nation. They are not moving Aso Rock or the National Assembly back to Lagos, so what are we talking about? We are just being emotional and sentimental because we have not trusted people in the past.
I don’t know if there is any law in Nigeria that says the president should not be talking, and why we should not have a weekly broadcast of the president and that it should be only once or twice or three times a year that the president should talk.
When there is open communication directly from the president, you will instill value in the people and you will also not give room for people to come up with different versions. You make sure that the communication is effective. When people are confused, they assume and assumption is the lowest level of knowledge. When something is unknown, the only option for human beings is to assume.
Don’t you think the trust deficit on our leaders is rightly placed giving that the body language of our leaders do not give anybody hope, and sometimes, they behave as if they don’t care about the masses?
You see, the higher you go in life, the farther you are from the grass roots and realities of what is happening downstairs because you are trying to focus on carving a niche and creating a path for people to move. You now have to trust in the people that are there to give you the right information. What happens to leadership is that it is at the mercy of the information it gets. That is why the issue of communication is key.
I am 100 per cent in support of the fact that many of our leaders are not giving the right vibes that will help us to trust them, but they are also taking right steps. So, let us be cautiously optimistic.
How do you think the galloping inflation we are currently experiencing will be tamed?
What are the things that affect inflation, it is when you have so much money pursuing so little products. The inflation we are seeing now is a further validation that we are not a productive economy, but a consumption economy.
The only way you can be able to do that is to do a lot of things at the same time. Number one, become more productive. But how can you be more productive with the price of diesel and power with many production factories shutting down.
Monetary and fiscal policy also has a part to play in inflation. We keep talking about this multiple exchange rate. We need to ensure that we just focus more on production. You know that there are so many good things that we talked over the years, but the courage to implement them has not been there. We need to continue to produce. When we say buy Nigeria, when its time to buy car, you go to buy Toyota instead of Innoson. When its time to dress, you prefer foreign clothes, and when its time to eat, you eat foreign products. so, we are joking.
So, the inflation aspect is more of a production and fiscal policy issue. It is also an opportunity for those that know how to play the money game.
The Nigerian Customs Service has set a target of N5.1tr, implying that they will squeeze businessmen and importers, how is that going to encourage businesses?
You know that I am all for integrity, I am just thinking let’s do things the way they are supposed to be done because one of the major challenges we have is corruption. I can guarantee you that majority of the goods that come from that port are not declared. If they declare all the goods that are coming and they pay the normal duties, that money will come in.
Don’t forget that the Jonathan administration started what we call the TSA and the Buhari administration carried it over. Don’t also forget that those customs and port authorities you are talking about have over 400 accounts. By the time you go to the port and they are giving you 47 accounts to pay into, you will discover that out of those accounts only 10 belong to government, the remaining 37 are for different individuals. But the TSA has settled a lot of those things even though we are beginning to see that a lot of those things are beginning to come back.
They are not going to squeeze anybody. If every goods that come in is declared and they pay the normal duties, the money will come. The challenge is corruption and manual labour. If everything is automated, you will see that money coming in and nobody will complain. Automating a lot of things will settle many things in this country. All these manual labour is giving room for human beings to play the game that messes up everybody.
Government seems to be going round in circles. Mid last year subsidy was removed, about two weeks ago they are subsidizing electricity to the discos to the tune of N1.6tr this year and subsidy is said to be gone. Does this add up?
There is nothing wrong in subsidy. Anywhere in the world, subsidy is an economic principle for ensuring that the citizens do not suffer needlessly. Nations subsidise different products and services globally.
The challenge with our kind of subsidy is that when it is done, most of the times, the people you claim to be subsidizing for are not the ones enjoying the benefits of the subsidy. There are a group enjoying it because of this same corruption issue.
So, subsidy has never been the issue. If you expect everybody to pay the exact value for everything that the government is giving them, then you just be seeing dead bodies on the streets. There is nothing wrong with subsidy.
Lets go to the issue of power. There is no reason why we should be having the power problem. In power, there are three levels. There is generation, transmission and distribution. The government decided they were going to hold on to transmission and that is why we are having the problems we are having and the truth is the transmission infrastructure is over 40 years old.
One of the reasons why they don’t want to let go totally is because power is so important, if you hand over the entire transmission to the private sector, they can sabotage it and hold the entire nation to ransom. We understand that but you see the lawyers and gencos that sit to sign things on behalf of the government are not thinking of the people, they are only thinking of what they can get. So you sign with the gencos that whatever power you generate, we are going to take it.
Right now, the gencos are generating more power than we can transmit. So, you are paying for a power you are not using. You are generating 8,000 while your grid can only carry 3,800 or 4,000, implying you are paying for 4,000 that you are not using. If you do more than that, the grid will collapse.
And because you have generated 8,000 but only sending 4,000, the people on the other side will be paying for 8,000, because you have to pay the guy for the 8,000 he has generated. They are not educating the people to know the problems.
Everybody in Nigeria today is complaining about the electricity supply and they all have generators. Is it not better that we let go of the noise and pay for the electricity?
We are complaining that they are increasing the tariffs. No, they did not increase it, there was something signed. The situation was that every six months, it will be increased. It has been signed years ago. They are only following what we have signed. Don’t forget that these are the people that also borrowed monies from banks and they are investors. If you don’t take care of them they will go and then we will now say that investors are not coming. So it is a combination of a lot of things. When they said they are subsidizing, what are they subsidizing? Have you noticed that till date they have not been able to give us prepaid? Let us pay the real money and have the light but let everybody be metered.
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If you make one decision, there are a lot of ancillary decisions that you need to make concurrently to ensure that you can get the result that you are supposed to get.
Once again, the exchange rate, your advice to government?
We should go back to production. But then we talk about quick wins. It will be that everything that we are importing that we have control over, we will have to stop it. Whatever you are spending dollars on, you just stop it immediately. So, we will not need the dollars. The only source of dollars now is from our crude oil sales and the money is going to the NNPC and doesn’t come out.
The second source of dollar that will help us is Nigerians in diaspora and we are not annexing that aspect. The third source of dollars that will help us is foreign investment. The fourth source is the proceeds from the privatization exercise.
When we focus on locking those leakages, within six months you will see a lot of changes. I will suggest that every domiciliary account where dollars and pounds are sitting idle in Nigeria should be audited and let them tell us where they got the money from.
And when people are bringing dollars to transact anything and dollars is moving in cash in a cashless society, let us begin to investigate our prognosis. You will see that within 90 days, a lot of things will sanitise. But when the people who are supposed to be making the law are also guilty of the law, they can’t shoot themselves in the leg. So, it’s a combination of complex webs that require a group of selfless people that are really interested in transformation of the nation because national transformation is a function of patriotic citizenship and visionary and transformational leadership. But you see, it is the chicken and egg situation. The citizens are waiting for the leaders to be visionary and transformational while the leaders are waiting for the citizens to be patriotic first.
For everything we have said, Nigerians are feeling the heat, how can we survive this period?
Like I said over and over again, principles are universal. But the application of those principles are personal, contextual and geographical. So, the principle of savings is a universal principle but in order to apply it, you look at your personal life, you look at your personal context and you look at your geography.
The principle of delayed gratification is universal. So, when it comes to surviving hard/complex economic terrain like we are in right now, the principles have not changed but how we apply them is what we have to now look into. Personally, as an individual or family, we should look at our context and the geography of where we are and then we begin to know how we will navigate it. Again, it is reduce your expenditure, and increase your income. Simple, it has not changed. There is always a level you can operate from.
You also have to note that wealth is not sexually transmitted and marriage is not an economic empowerment. Both the husband and wife has a responsibility to the home and none should be a liability. The economy is tough and its going to get tougher but we need to make adjustments where necessary.
Is it just like the government mentioned on cutting the number of people on his entourage?
Well Buhari’s government made similar statement but reneged on its fulfillment. You just see that they say the right things but do another. So, there is trust deficit, which is justified but we have to be cautiously optimistic. We are trusting that they will implement. But it should go beyond the entourage issue and to every other aspect.
Because of the forex issue, there is a call for Nigeria to increase crude oil production, what is your reaction to that?
We don’t have production problem, we have diversion problem. Crude oil theft has not stopped. Crude oil diversion has reduced after the subsidy removal but has still not stopped. The only way we can be able to increase production is to block those leakages. If you are producing more, are you producing more for them to steal? It is a complex matter.
Its tough everywhere and the government is going about as if all is well, living in denial. How can we send the message to them that we are dying?
They live in denial because they live in a bubble and it is understandably so because they don’t understand the things you are crying about. The law empowers them to enjoy everything they need to enjoy, so why should they be complaining about the things that they are not facing. It is the people facing it. But unfortunately, again, this generation seem not to understand that they are doing market noise that doesn’t mean anything. While we make all those noise let’s also articulate them into a proposal, a petition, a policy, into a document and then begin to push through the right channels and begin to do the lobbies that are required and begin to be patient to push and push and push until it becomes a reality.
Many of the things that we are enjoying today, it is not that somebody just woke up today and begins to answer them. It is because the lobbying was strong and people kept on pushing until they accepted that they cannot deny the existence of the things.
Nigeria a few years ago signed a currency exchange deal with China to reduce the pressure on the dollar which has not been implemented. Just about five weeks ago, the House of Reps raised it, do you think this is feasible?
It is feasible and is also a very fantastic idea. Globally, the dollar is the unit of transaction and the American government is benefitting from that massively but China is richer in the sense that all the debts that America has is being owed China.
So China is now fighting to make the Yuan the global currency. So that battle between China and America is what we are seeing playing out in Africa. It is a good thing, its only that we are dependently independent, that is why we keep listening to the IMF and World Bank which are all pawns in the hands of the USA and the Western World.
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