The perilous state of the Nigerian economy has left many citizens at the crossroads where resigning to fate is as risky as taking a plunge. But Olumide Emmanuel, CEO, Common Sense Group, in this interview with Chuka Uroko, Associate Editor, encourages Nigerians to embrace financial intelligence and value creation, saying they are antidotes for survival in a challenging economy. He also speaks on a wide range of issues, including the national budget, tax reform, the controversial refineries, and other salient issues affecting Nigeria and Nigerians. Excerpts:
Some Nigerians have raised concerns over the N49.7 trillion 2025 budget for various reasons. How do you see the budget, and what impact can it make on the economy?
Our budgeting system needs to still go through a lot of reviews, but one of the things I would say is that if you look at the budget in dollar terms, it will give you a perspective. If, for instance, someone were to have a budget of, let’s say, N1 billion, and this year the person moves the budget to N2 billion, that’s not an increase.
It is an increase in naira terms, but in dollar terms, it is not. This is because many of the things that we need to do are dollar-based because we are not a producing economy. Two, when you look at Nigeria as a whole, there are a lot of things that we have signed onto. For instance, a percentage of our budget must go to education, a percentage to health, and so on. Those things we have signed onto, we have not adhered to them. If those things were to be followed, there would still be a lot of adjustments. We have said it over and over again that the cost of governance here is too high.
In the recurrent expenditure vis-a-vis the capital expenditure, you see that the investment in the capital expenditure still needs to be more because the recurrent expenditure is still taking a lot, and one of the things that will bring down the recurrent expenditure is reducing what we call padding and repetitions.
For instance, we keep having maintenance and renovations every year. You will just discover that there are things in that budget that have been there in the past 25 years, and we keep having them over and over again. We budget for things like cutlery and furniture every year, whereas most of them can still be used even in the next four or five years.
The tax reform bill has been causing a lot of furor in the polity. As a professional, what do you think an ideal tax system should be?
There are different ways to look at taxation. It depends on the kind of economy you are running. If you are running a capitalist economy, the tax system therein is different from that of a socialist or communist economy, and if you have a hybrid economy, you can always adjust the tax system so that you can do Robinhood, whereby you tax the rich to take care of the poor. You can as well do general or equality taxation, where everybody pays the same thing.
I hope that some of the things that are itemised in the Tax Reform Bill will be implemented because they will help us with reference to all these budget issues. For instance, there is a framework that is suggested that will guide expenditure.
As someone who is in organisational management, I know that I cannot spend more than 30 percent of my income. And now, part of the framework of this tax reform is that, as a governor, you cannot spend more than a particular amount on this and so-and-so amount on that.
For me, the Tax Reform Bill, given some of the things that are there, even though they are not yet fully in the public domain, is fantastic. If we allow it to stand, it will change the game for us as a nation. If it pulls through, then I can say change is about to happen in Nigeria.
“If you are in a country and you are solving problems, no matter how bad the economy is, you will survive”
In what specific ways do you think tax reform can help the economy?
In many ways. Take, for instance, before now, if small businesses made less than N25 million a year, they would not pay tax, and nobody would be aware of that. Furthermore, all the people that earn below N80,000 per month, there will be no more Pay As You Earn (PAYE) for them. That will also apply to people that earn less than N1.8 million per month. Then, you ask yourself, how many people are earning up to that? Even withholding tax is being cancelled for manufacturing firms and small businesses.
So, if this tax reform is allowed to sail through, in the next two years, Nigeria will change. When you see people fighting it, it is because, many times, when we have policies, we don’t educate people, making those with their own selfish agenda come up with ideas opposing the policy.
So, when you hear that Labour is fighting the reform, it is either that they are confused or they don’t have a clear understanding of the content because how many people in Labour are earning N1.8 million monthly? They (Labour) should be the ones championing this tax reform.
If Labour is fighting something that will benefit more than 90 percent of their members, then you need to ask them whether they are serious-minded, confused, or just wicked and anti-Nigeria.
Almost two years on, the pains of the government’s deregulation policy are still with us. What would you say about that policy in respect of the expected gains?
I said it two years ago that the President Bola Tinubu government is making the right policies but that it will take about two years before we can see the results, all things being equal. So, removing the subsidy was the right decision, and floating the Naira was the right thing to do too.
However, you can’t make one decision in isolation because Nigeria is a country with hydra-headed problems that also need hydra-headed solutions. You can’t do one size fits all. While those two policies are right, they have brought undue hardship to people and have messed up a lot of things. But they are the right decisions. However, when you are making that right decision, there are other things you are supposed to have factored into the decision, especially possible backlash and how to cushion it.
A lot of Nigerians have expressed reservations about the two refineries that are said to be working. Do you share the view that the refineries are actually working? What do you see?
I don’t know if you are aware of the billions of dollars that have been spent on those refineries in the last 25 years. I hope you are also aware that every year they spend billions on salaries for idle workers. So, what are we talking about?
Former President Olusegun Obasanjo made a revelation during an interview recently that when they did research on NNPC, they discovered that there was so much rot and corruption there. And that people who were invited to turn things around said they could not help because the rot in the system was too much. I think we should just continue to build the next generation with the right information and conviction because change will happen.
Apparently, the government is playing the ostrich, claiming to be making life better for the masses. What advice do you have for Nigerians on how to help themselves in terms of investment?
They need to understand that there is micro- and macroeconomics. Some of the things that the government is doing are at a macro level. For such things to affect the people at a micro level, many things need to happen that are not happening now. So, for you as an individual, become financially intelligent. If you know better, you will do better. What you know determines how far you will go.
If you put a banana and $100,000 before a monkey, 100 percent of the time, the monkey will choose a banana over the $100,000 because he does not know that from the money he can buy as many bananas as he wants or even have a banana plantation.
Also, money flows in exchange for value. Any discussion around money is always emotional, which is why, if you like, crying from morning till night will not produce money. What is value? It is meeting needs, solving problems, and answering questions. So, if you are in a country, no matter how bad the economy is, if you are solving problems, you will survive.
As long as you are meeting the needs of people, you will thrive; money will flow. No market is saturated; what is saturated is the method. For instance, I am into real estate. I have taught people different methods of making money in real estate. Some of my mentees are into short-lets, some are developing hostels, and several others.
With President Tinubu’s recent trip to China, the currency swap policy appears to be back on track. How can Nigeria key into that deal to ensure that it will be beneficial to its economy?
Many times, we see ourselves sandwiched in the battle of nations. And, you know, it is said that when two elephants fight, it is the grass that suffers. Right now, across the world, the dollar is the official currency for the world. Because many people have their transactions in dollars, there is something elitist and psychological about the dollar that is causing a mental block for a lot of people to see that many of the things that you buy in dollars are actually produced in China. Well, the policy is made, but there is no implementation. But I believe the currency swap is one of the most fantastic policies of the government.
Within government circles, it is believed that the reforms have made some gains, which is doubtful to an average Nigerian. What would you advise the government to do to sustain those gains?
There are gains, no doubt. For instance, a lot of foreign investments have come in; the capital market is doing well. In fact, Nigeria ended last year among the top five in terms of the performance of the capital market. There are a lot of positives. To sustain them, we will have to ensure that all the things we are doing right, we will continue doing them, and all the things we are getting wrong, we stop doing them. And that’s the area I would really want the government to work on. We are still spending recklessly and borrowing. In the last year, all the governors have collected more money, and nobody is holding them accountable. Why are they all going to Abuja to collect money, and why are they not bringing the resources from the ground?
Nigeria is going through an economic crisis that is affecting everybody and everything. What survival strategies would you recommend for Nigerians at a time like this?
It is to measure your growth by your income vis-à-vis your expenditure. If your expenditure is higher than your income, your upkeep will be your downfall. If you eat once a day, you will not die. Instead, with time, you will just discover that it is normal. If you train yourself, you will discover that many of the things we are spending money on, we don’t need. So, your income must be so far from your expenditure that you have enough to invest. Savings is not an investment. But savings is required in order for you to invest in what will produce cash flow. Make sure you are valuable. As long as you are valuable, you will remain relevant.
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