• Saturday, June 15, 2024
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Doing business in Nigeria now is like living in purgatory – Amuta


Chidi Amuta, a former director of the Directorate of Food, Roads and Rural Infrastructure (DFRRI) in the old Imo State and currently chairman and CEO, Wilson & Weizmann Associates Ltd, is one of the best Nigerian brains and has a robust history of intelligent contributions to important discourse in Nigeria and on the global stage. In this interview with ZEBULON AGOMUO & CHUKS OLUIGBO, the former university don took a sombre look at the chequered economic situation of Nigeria; the dire consequences of faulty policies of government, the politics of greed in South East, and the way out of the present quagmire. Excerpts:

Some people believe that things are not going the right way in the country. The country is divided along ethnic and religious lines, and hatred is very prominent in society. Some people say it was such level of hate that gave rise to the civil war. What would you say on this?
Quite frankly I am as worried as anybody about the situation. It is not yet out of hand and it is not unexpected. Let me clarify, in a period of economic hardship when resources are scarce, ordinarily, resources are scarce, and in a situation when it is more scarce, invariably there will be hardship. And when there is hardship, there will be tension. And in a multi-ethnic, multi-religious society, those tensions can get very pronounced but that is also when government is challenged to manage diversity. The business of running a large federation such as we have, which is very diverse, and very complex, is that of managing the tension that will always be there. And the tension is usually between, if it wants to exist at various levels, first of all; the more obvious one will be religion because it has to do with faith. And faith is irrational, people don’t think. If you want people to think then put them somewhere else in the monastery where they can think.
But when it comes to faith, before you enter the church or the mosque you have to fully suspend your disbelief, display it outside, so whatever the imam says you believe it, whatever the bishop says you believe it. Therefore, faith is irrational and faith is usually the first casualty in a tense situation of economic hardship and scramble for resources. So that’s why I say, what we are seeing now is not unexpected.
Even in the United States today we are having tension, racial tension, religious tension even as old as America is, let alone Nigeria. We also have a generational problem in the sense that our population is very young and is getting younger. Those who are aged from 1 to 35 are in the majority. Those who are age 18 and 35, are the age of employment and the ones who are 25 to 35 who have qualified, have tertiary education qualifications they cannot find work. The number is increasing, but there are up to 200 universities in the country, and if you add polytechnics and colleges of education, there are about 500 and they are producing in excess of one million graduates every year joining the unemployment market that has no job to offer to anybody. So, the certificates have become not an entry permit to job and a good life but it becomes a ticket that leads to nowhere. And young people look right, look left; there is no basis for optimism, even a dream. There is no Nigerian dream; that is why we have generational problem, which has been the root of unemployment. Not only in Nigeria, but Nigeria’s case is worse. It is also a function of the size of population. The economy we have is not structured to generate opportunities at the rate at which we are producing that manpower. There is hardly any new investment. What kind of new investment is coming into Nigeria? How many new factories have been built? What are the growth sectors? A couple of years ago, you had telecommunications; you had oil and gas, you had the banking sector during the Soludo reform. But if you look at those three sectors today, they are contracting. Telecommunications companies, banks, oil companies can’t hire more people, they are even retrenching; they are looking for ways of delivering the same service without hiring more people.

Semi rural branches of some banks are being closed down; more branches in the urban areas are going down, they are also shrinking because of the application of technology and the shrinking of patronage from government. Government is the biggest spender and government has decided to take all the money to the Central Bank. Banks don’t have money to employ youths; they can’t even grant loans to people to do legitimate business. In the oil and gas, the fraud that was so prevalent in that industry is what is being checked and that means we are also contracting. Therefore, you look around. No growth sector. Government wants to promote agriculture, but its sponsored-agriculture cannot create employment. If you want to produce food, it’s private sector-driven. And government is not making any effort to make it private sector-driven. It wants to make it public sector. And government does not have a communication strategy, to inform young people that agriculture is a new frontier. You are not making farming attractive. Even if you give it a level of communication, you also need then to provide the enabling capital through the banking system so that banks can lend at rates that are good for young people that want to go into agriculture and farming. There are no growth sectors in the public sector. More than 27 states out of 36 states cannot pay salaries. So even those who have employment letters and who have employment in the state they can’t fulfill their obligations to their families, at the end of the day; although they are employed, they have no wages. The Federal Government has been defaulting, even on its own salaries, sometimes for a month, sometimes for 2 months; so opportunities are not there. That is also a source of tension.
Now, the capacity of the state to guaranteeing security of lives and property is also a function of the state of the economy. It is the duty of the sate to buy guns; to maintain a police force, military and all which is superior to those of the ones challenging them. But a situation in which non-state actors are now challenging the state, in the area where the state used to have monopoly; then there is problem. In those days if you hear that government is coming, you run away because government has uniform and has guns. But today, uniforms and guns are no longer a monopoly. In fact, non-state actors- the militants and all the others- they even have bigger guns. Theirs is even more frightening. Armies and soldiers have a protocol for deployment of forces. Now a militant or terrorist has no protocol, they have no rule of engagement; in fact, the bigger the gun a person wields, the more the person is a commander. And as a result of that, insecurity which brings instability becomes the order of the day. So, virtually in 32 of the 36 states, the military and the police and the Civil Defence and all kinds of all uniform groups are engaged in basic law and order. You now have what they call Civilian JTF, the Bakassi group and all kinds of people pretending to be helping the government, because government is overwhelmed. So, we also have to recognise that. This is also not a feature of Nigeria alone; it’s also in all the other countries, with economic problem. It s only in our case that there have not been an open civil war, but ours can be more dangerous because you are assuming you are not in a war situation and your psychology is not open to war and you are driving on the street somebody kidnaps you. So it’s worse, if you are in a war situation you will know and be conscious of it. So, it is these combinations of forces that make it appear that Nigeria today is worse off than at any other time. It is not strictly speaking the fault of the government of the day. President Buhari came at a very wrong time as there is a convergence of forces; nonetheless, the government came to power under the umbrella of a very high expectation. Has it met the expectation? I will say no. but it has a responsibility to keep this country united and peaceful. That is a big assignment. But we need to understand the complexity of the situation.

The point we are now, what do you advocate as the way out of the situation?
People are advocating, there is a lot of separatist sentiments; some people want to be Biafra, some people want to be Oduduwa, Niger Delta, etc., you ask yourself, are these solutions? No, it’s not. It’s just like a virus. If you feel, cutting it in bits, separating it will make it go, that’s not true. It will even prove very difficult to tackle, but if you leave it whole and everybody attacks it, you will probably kill it. There are imperfections. This is an imperfect union. My reason for saying this is Nigeria was brought together by the Colonial masters. After independence, on our own, we adopted an American presidential system of government and it looked nice. But we forgot that historical circumstance is different and there is one fundamental difference between the United States and Nigeria, and it has to do with the relationship between states and the Federal Government. In America, it was the states that created the Federal Government; in Nigeria, it is the Federal Government that created states. If you look at the American constitution, ‘it is we the people’. It is not we the people written by a few people; it is actually we the people that created and defined the power of the Federal Government. Everybody says we surrender our rights to a big sovereign in return we demand of the sovereign a protection from each other and from external forces; so that’s how the United States remain like that. People don’t talk about force, because they were not forced to come together, they willingly entered into the agreement.
But in our own case, the Colonialists brought the people together and they imposed on us a form of unity that is being questioned for fear of secession. And after the Civil War, the military decided to divide or balkanise the federation so that no single unit will be so powerful to challenge the Federal Government, because the then Eastern Region had the courage to challenge the Federal Government and almost defeated it. Therefore, out of fear, they said, no. They created a unitary administration and called it federal. Under the military, the control of the state was under the control of Chief of General Staff office. The same signal went out to all the state governors on everything. Whether it was taxation, or universities or whatever, it was a unitary arrangement. And the states were governed through military. We camouflage the military government with elected civilian governors. The Federal Government was funding all revenues. This is not federalism, this is a unitary administration.
Until we revolve this, am not saying the solution is balkanisation. It is to see how the structure we have can be made one. Nothing is wrong with 36 or 12 states. In our case, it is a matter of what can be effectively managed to meet the obligation. If they approach the call of restructuring from a purely economic perspective, then there is a point to be made. Because if you reduce the number of states, you probably reduce the number of civil servants, number of jobs, the positions requiring power. You will probably be able to deliver more service. We need to look at things very soberly, things were better when they were under a larger region than it is now that we are one. Awolowo built universities and many all other things that have remained as legacies today in the South West. Agitations are fed by hunger, desperation and frustration.
As a businessman and a citizen of Nigeria, how has the current economic situation affected?
For every honest person in business, it’s been hectic. There was no basis for planning; you had an exchange rate regime that even as I speak to you, nobody knows what to call it. Business means that you are trying to add value and make profit. In an environment where certain parameters determine it, namely, interest rate, exchange rate, rate of inflation, if those three are unpredictable, being a businessman is like being in purgatory. In the last 12 months, the rate of inflation has gone from a single digit of 8percent to 16.5 percent today. The exchange rate, we don’t know what to call it, because yesterday (Monday, July 18, 2016) the dollar was N365 this morning it’s N372. Just sleeping and waking it has changed so badly. How can one plan? A lot of people are abandoning their cargo at the port, because it no longer makes sense to go and clear because there is no market for these goods. What are you going to manufacture when there is no electricity? For anyone who is in business it has been very traumatic. It has led to a lot of job losses. You are dealing with undetermined variables. What do you do? You reduce your staff strength, even that doesn’t solve the problem. We operate about 10 generators around the city of Lagos, and diesel that used to be N160 is today N210. Meanwhile, the power company has increased its tariff on electricity that doesn’t exist. So, if you take all these things, you need to take a certain dose of insanity. A lot of business people have stopped taking risks; some have just withdrawn to their shell. People are feeding on their reserves. How long will it last? And even the money you have in the bank, what is the value? Inflation rate has eaten up that value.

We heard you have some business understanding with Travelex Company. May we know how CBN’s FX policy has affected the company in the last one year?
The company is at a standstill because at what rate are we going to buy forex and at what rate are we going to sell it? Then, it collapsed. Every business is in trouble, whether oil and gas or bank or manufacturing, etc. Even for those in pharmaceuticals, you may find out that the active ingredient of the drug is entitled to CBN forex.
A lot of people call themselves policy makers; they have never run a shop before, don’t know or understand the language of business. If you bring out a bad policy, you are sending people out of business; you are sending them into the street, to their early grave. They don’t understand the way the whole thing goes. We have a problem in the last one year. I don’t think if the government understands the type of economy it wants to run, if the market should be a free market economy or a socialist economy. If we are running a socialist economy, the time has passed; if we are running a free market economy which we have been running from 1985 till now, which is what is responsible for the growth that you see, let us go on with it and find out how we can do it better. They told us fuel will be bought for N85 and now we know how much we get fuel. When they came in there was scarcity of fuel all over the place, making us stand in queues for the product. If they had addressed the issue of fuel immediately they came in, the problem would have been forgotten. The same thing they did with Forex.

But they said the problems were caused by the immediate past administration?
That is rubbish. It is a lazy approach to governance. Governance is a continuum. What you inherit is your burden. Your responsibility is to make life better for the people and not to continue to give excuses. Seven and half years ago, when Barracks Obama became president, America’s economy was in shambles, they were into wars costing billions of dollars every day. Their unemployment rate was over the roof. America was almost becoming a third world country. Their industries were collapsing. What did he do? In fact, it was his campaign point. He said he was going to make life better. Once he was given the mandate, and he took the oath, he left excuses behind, and went into action. We have to wake up; Nigeria is the only place where government spends money the way they want and continues to make excuses.

Is there any way out?
In Nigeria we don’t ask questions. If we are an electorate that asks questions things won’t be like this. We have authorities without responsibility. In theory, we have mandate that he exists. He doesn’t care about you. But it should reciprocal. The government is irresponsible, because the people don’t care. A lot of money they are spending is not our tax money, it is oil royalty. There is the act of irresponsibility and lawlessness. Why is it so difficult for the government to pay salaries? They have avenues from internally generated revenue. You should be able to know whether the workforce of the state is too big. There is a lot of irresponsibility and lack of management. There is a diconnect between the problem we have and the calibre of people who impose themselves on us. And people who have never run any business are running the public sector.  Therefore, what do you expect? We have lack of productivity in the system. We have people who just feed on the system and add no value.

Abia State has been in the news for very wrong reasons; some time ago; what’s your thought on the state at the moment?
You see, I have always had problems on issues with my state. And it is unfortunate because that’s one state that ought to be viable. I was born at Aba General Hospital and I grew up on the streets of Aba, so, I know it very well, that’s the city in Nigeria where every other house- the front is a shop, the backyard is a factory and at the same time act as residence. The only other place you could find that kind of a thing is in China. So, ordinarily Abia is centrally mobilised, industrially and commercially to be self-sufficient and not to rely on this thing they call federation account, but the state has also been singularly unfortunate to have a succession of irresponsible governors; people who related to the state not with the aim of making it viable but just occupying office brandishing themselves with siren. Now, we have the newly elected governor; and because of the culture of greed they would not even let the new governor sit down – he is hardly one year in office he is having law suit upon law suit. We are talking about insecurity; if he has a template for security, how would he implement it when he is in court from Tribunal to Appeal, to Supreme Court, now he is being dragged to another round? You have the worst kind of elite in Abia. The Abia elite is one of the most troublesome in the sense that nothing else matters to them other than their own selfish interest and unless you have a certain measure of stability in a state, where those elected in office are allowed to govern, you’re not going to have development instead you are going to have capital flight which has happened, because if you go to Aba, the industrial area where grew up, lot of properties belonging soap manufacturing firms, industrial mills, breweries are up for sale and nobody wants to buy them.

If Aba were attractive a lot of investments I also have in Lagos would be in Aba, but as a businessman, I’m thinking about the security of my investment and profitability first before I think about nostalgia of home. Capital is not blind; it looks, it searches where it should and must go; you know. If there is any way for Abia elite to congregate so that we can tell ourselves the truth and then rally round whichever party is in government, I am not a party person, I don’t belong to PDP or APC or any other. But I think that there’s a chance to create a viable state that will be an example. Let me tell you, I have looked at Aba; I have looked at all the potentials, Nigeria, for instance, has no business importing military uniforms from China, books, etc, there is sufficient homegrown capacity. A lot of people who trained and are capable of manufacturing shoes, etc and because there’s no patronage, no infrastructure they are now riding ‘Okada’ and Keke NAPEP. Is that right? It is unfair. We need to free the government from law suits and all that. I followed the latest one; the governor is in office; I am not a lawyer, but I have common sense. Governor is there, he has survived appeal court, Supreme Court from Tribunal, then somebody said no, he didn’t pay tax; he was a government employee for God’s sake. And the tax is supposed to be deducted at source; they said, no, no, the receipt has some discrepancies. Does he issue receipt to himself? There is a revenue authority that should do that. And in any case, there is no law that says in what order the revenue office should issue receipt. The only crime is if they received money and they didn’t issue a receipt. They say the receipt is genuine but that it is forged; is it forged by the governor? Does he issue receipt to himself? And you have judges who went to school, making these laughable pronouncements.
The more we engage in these unnecessary lawsuits, we are not thinking about the pensioners that won’t get paid; teachers that won’t get paid; we are not thinking about patients in the hospital who will die tomorrow because there’s no drug; lack of infrastructure and therefore, lack of opportunities in the whole state.

But it is not just only in Abia, I think it is a general problem in South East; why is it so?
The South Easterners should be ashamed of ourselves. Why haven’t we developed our homeland? We claim to be special breed. If you look at the Jews, they are not more than five million. We have the Jews in the Diaspora (all over the world), very influential and wealthy. They go out there, and they take the wealth and their knowhow back home and created Israel as a show piece. Israel is a small country, but in terms of military power, technology, intelligence and all, they are mighty and strong. That justifies the claim of the Jews as a special people. So, I am saying, if we claim that we are special as the Igbo nation, how come we are the worse in terms of governance, in terms of infrastructure, no road, nothing. Since 1999, do you know the quantum amount of money that has been dedicated to five states of the South East from the federation account and what do we have to show? But let me tell you, it is not the Igbos that say they are smart, it is other Nigerians saying we are smart in order to deny us things. We have the highest entrepreneurial density in the federation. Rightly also, the Igbos have certain traits that people admire, they are hardworking, they are enterprising, they are hardy, they are intelligent very smart and therefore, but what does that translate into in terms of our identity within the Nigerian connectivity. It attracts to us not just envy, people tend to resent us; and if that is the case, it is a problem of collective identity, we have to be very careful and also the nature of what we do in Nigeria and elsewhere- very prominent and visible- mark us out. Our investment is to visible, we are traders, merchants and everybody can see us, so when there is any crisis, our assets become targets, as has happened in recent Nigerian history. We are not the only people, this is what the Jews suffered in the 2nd World War in Germany, that’s why it was easy to round them up and put them in the gas chambers. They were so despised that the hatred was so strong that the only way to deal with the Jews properly was to incinerate them in gas chambers. The Germans defined them as the Jewish problem therefore, if we have that kind of identity then we have to be very careful, you must not conduct politics that marks you out as distinct, as Igbo people try to do in Yoruba land ‘Ezeigbo’ we are boastfully trying to be, we cannot create contending monarchies, we are not even monarchical people, we cannot create artificial monarchies and then impose them as contenders for power and influence in the places where we are doing business.
The correct strategy for now for the Igbos is to always need the Nigerian federation because the Nigerian federation is good for business, it’s a large market and if you are an entrepreneur you need a large market. Why is it that Japan is not growing at the same rate or growing faster than China, it’s because of population. The Chinese are so many that even if they concentrated on their domestic market alone, they will still be the second most powerful. So, Nigeria has that population and it is given to us on a platter of gold and we happened to be the most entrepreneurial, let’s not spoil it by doing Biafra because Biafra marks you out and marks you out in full, both territorially and geographically and it is easy to target you within that issue and it keeps dragging you until you become smaller and smaller and then they crush you. We don’t want to do that a second time; there is no group in history that has survived two genocides or two civil wars that they didn’t prepare for. What do we want to do, we want to create wealth out of the Nigerian totality, therefore the only way, the best way for the Igbos to find themselves is to lose themselves within the Nigerian large market; lose your identity but penetrate and take hold. Once you do that, you have all the ingredients, once you do that then you become indispensable in the future politics of Nigeria, in the future economy of Nigeria. So, we must quickly migrate from visible to invisible business, the investment in the stock market, in insurance, the media and so and so forth. Some of this has been lost on our people and so before you know it, let me tell you what happens, this time in America, especially in New York if it’s a Jewish holiday, it’s better for you not to go out to look for any business to do or to have an appointment in any office because most of the businesses are closed the reason is that most businesses are owned by Jews, they don’t announce it that they are doing Jewish holiday, the whole doors are closed, some of the biggest establishments are closed; all the major media are owned by the Jews, the insurance companies are Jewish-owned. When you stand for elections the Jews bring out money and support the prominent parties, whichever that wins, they will be present at the inauguration ceremony. That’s how they do their business. We must migrate to that level to succeed as an Igbo nation.