* FG must stop funding losses through the NNPC
The first step the federal government must take right now that recession has come again is to exit from managing and controlling government commercial ventures. Investors in the South-South under the umbrella of the Rivers Entrepreneurs and Investors Forum (REIF) want the Government to hands off all businesses and allow the private sector full control.
The president of REIF, Ibifiri Bobmanuel, who has huge stakes in mechanized agriculture (tractor manufacturing), construction and others told BusinessDay in an exclusive interview in Port Harcourt Sunday evening, November 22, 2020, that until bold economic decisions are taken by the FG, Nigeria would continue to hover around recession borders.
Reacting to the news of Nigeria slipping back into recession, the seasoned investor and head of business research team in Port Harcourt said every investor knew that Nigeria was one step near recession after 2016.
He said most people because of the agric sector think the economy is diversified. “They would say Agric leads in the gross domestic product (GDP), but you would agree that oil plays background role in all the areas that make up the GDP. Oil also earns 90 per cent of foreign exchange to Nigeria.
“I still think the FG needs to take the private sector more seriously. This failure is why Nigeria is suffering. Every serious country that has the kind of depth the private sector has in Nigeria will definitely take them seriously.
“Most of the energy and funds being dedicated to some sectors in Nigeria by the government are needless. It is an old saying that Government has no business in business. Virtually every part of the economy is very young and productive but the government is taking too much time to decide what to do.”
Bobmanuel called on the FG to divest in infrastructure such as roads, rails, as well as in power and telecoms. “FG needs to see things differently and act differently so as to bring the country out of the woods. Else, even if we come out, we will remain within recession areas.
“Population is growing steadily but there is no plan by the FG to grow the economy at same rate. The FG should begin to shrink in size so that the private sector can expand. The private sector should expand, else, the naira would be struggling, businesses would be squeezed, etc. The growth of the private sector is growth of revenue to the FG and more jobs to the masses. But, if the FG grows, the economy does not grow because the FG does not tax itself. So, the FG needs to get this truth into its calculations.
“We have scenarios where we talked about deregulation, etc. You must think through the process and this is a key you must have. You stop at regulation and creation of the enabling environment of checks and balances for the private sector to operate and grow. If you take the position of the operator, you do not have the capacity to do it.”
Bobmanuel said the Nigerian National Petroleum Corporation (NNPC) has always declared losses. “There is no private company that would be declaring billions of naira losses daily and still stay afloat. So, why is the NNPC not collapsing? It’s because oil revenue pays for the losses. With the ‘big elephants’ in the house such as the NNPC, there would always be recession. We have always used the profit of crude export to pad losses of the NNPC and wasteful government agencies. These federal parastatals are very many that do not make profit.
“When you keep funding businesses that yearly declare losses, you will surely be in recession. Nigeria is the only oil country of note that still cannot refine its fuel. Now, Nigeria wants to import fuel from very small countries that used to depend on us. It can only happen in Nigeria. The Government has to change the way it reasons.”
Asked about the presence of powerful unions that never allowed such measures as privatization of government-owned businesses and why those who egg on the government to take such decisions usually keep mom when the unions and activists strive to strangle the government for selling off such government assets, the REIF boss said government should do what it deems best for the economy, not minding what the unions say.
“If a leader sees a good decision that would help Nigeria, it should stick to it, no matter the opposition. The unionists are doing their duty, protecting the interest of their members (the workers). That does not stop the government from protecting the noble cause such as deregulation, restructuring, etc.
“Companies do expand and shrink on a daily basis. When the economy is doing well, companies grow, and vice versa. If businesses do not respond to external environment, it will die. It is left for the FG to be in a position to defend the economy, no matter what the unionists say. You should not cave in to the unionist.
“They are not the problem. There should be a scenario whereby the government drives its own perspective in such a way that you get the unions to succumb. FG can do this by reducing its influence in the business space. Government should have less presence and interference in businesses. Government can only cater for core civil servants and allow the business people to handle the unions.
“Unionists do not dictate to the big investors such as Dangote. Labour must abide by the decisions of big corporations. This may be because the Government will want you to vote for them. Vote makes leaders to dodge decisions.”
He went on; The business leader sacks people he considers a threat to the corporation and employs when things get better. You can’t tell that to a government. Our problem is that Government tries to dabble into businesses. This is a policy that never worked. We have tried it for this long and oil has been at the mercy of the Nigerian government. It just wont work. It is time to try another method; Government must get out businesses.”