The Director of Strategy and Trade Relations, African Young Entrepreneurs, Mr Olubunmi Olowudare, in this interview with ANOZIE EGOLE, speaks on Nigeria’s economic challenges and expectations in the coming year
The World Bank says the interest rate hikes could spike global recession. How do you think such a recession would impact the Nigerian economy?
We have to understand that it’s not only the monetary interest rate increase that will spike the much anticipated global recession. There are other fundamental issues like the ongoing war between Russia and Ukraine, which we pray will not lead to nuclear war. Also we have to look at the climate change issue which we are currently experiencing in so many parts of Nigeria. Global energy crisis is staring at us. The petroleum subsidy removal might happen in the first quarter of 2023. What about insecurity? To me, all the above will definitely have negative impacts on our nation’s economy. They will spur the inflation rate; cost of living will be super high; food crisis will surface; and unemployment rate will skyrocket and halt productivity in the private sector.
The Central Bank of Nigeria recently raised the lending rate. What impact do you think will it have on the economy?
I think the central bank team needs to understand the true definition of economic development and what fires economic growth in developed nations.
All the developed nations’ socio-economic growth is powered by stimulated entrepreneurship development with great infrastructures in place, uninterrupted power supply, good governmental policies and structured financial support for small and medium enterprises to drive the economy positively.
The CBN’s recent and constant lending rate increase will definitely affect productivity in the private sector ecosystem. A lot of companies will stop borrowing at high interest rates for their various business transactions. We all know that a high interest rate is a major burden for entrepreneurs and this will increase high non-performing loans, which might pose a serious risk to the stability of the Nigerian financial system. Increasing the interest rate means increasing the cost of borrowing. If the cost of funds goes up, local production would suffer. So, I think it is a wrong move, which the CBN needs to revisit immediately.
What measures do you think the Nigerian government should adopt to improve exports?
I think it’s the time for our political leadership to have an in-depth knowledge about what drives productivity for local consumption and exports. The only veritable way to increase economic productivity in Nigeria is massive entrepreneurship development by technology, knowledge economy, innovation and visionary leadership.
Entrepreneurship knowledge economy will teach us how to convert our huge natural and human capital into productivity, which will in turn culminate into made-in-Nigeria products and services for local consumption and exports across the globe. To achieve this, all government policies going forward must be geared towards rapid economic development with the provision of adequate needed infrastructure in place. Our educational sector curriculum must be knowledge-driven, and social amenities must be top-notch. Single-digit loans must be encouraged from all our financial institutions and the government must provide an enabling environment for business development. Private-driven industrial and tech hubs must be developed in all the six geo-political zones in Nigeria.
There seems to be a lot of wealth in the digital economy. How do you think the nation can tap into that?
There is no gainsaying that the 4th and 5th industrial revolutions will be driven by the digital economy. It is happening already and we can all see how it is causing disruption in all our socio-economic sectors. If you notice, Nigerian business men and women hardly travel to China or other parts of the world again to procure goods or stuff. They rather travel digitally at the comfort of their various offices or homes to place orders for their goods or products. They make payments and their goods are shipped down to the country. This makes business transactions cheap, easy and faster than the old conventional ways. The Nigerian government and the private sector need to embark on a massive investment drive in the technology ecosystem, most especially among the Nigeria youth population. This must be incorporated into our learning institutions curriculum.
Nigerian young entrepreneurs are engaging digital solutions to our various challenges and this is super healthy for our nation.
How do you think the construction of the Badagry Deep Seaport project will benefit Nigeria as a country?
I think it’s a good development for Lagos State and Nigeria as a nation. But we need to reflect and adequately plan on how we can stimulate our port activities to be a two-way operation and focus on importation and exportation.
We are all aware that most of the loaded containers shipped into our nation’s ports most times return to their original destinations empty due to our poor economic productivity.
We need to be productive as a nation, otherwise all the ports might just be an enabler for developed nations to constantly dump used or new goods on us, and this will not help our economy to grow.
Definitely, the proposed Badagry port operations will increase government revenue, create job opportunities for our youth population, make shipping and clearing operations faster, but I will also advise the Federal Government to also approve port licensing operations to other riverine states, most especially the proposed port in Ondo State, to avoid over-concentration on Lagos State.
As the oil sector suffers major setbacks, what alternatives does Nigeria have to grow its economy?
In a few years to come, crude oil might not be relevant again. As a nation, we have to tap deeply into our agricultural sectors, digital economy, green energy ecosystem, mineral resources and our blue economy. To achieve this, we must awaken our entrepreneurial spirit to drive us into high productivity.
I saw this coming a few years back, hence I kick-started an advocacy on green transportation with our flagship Oldang solar electric-powered electric vehicles. I introduced it to the Federal Government of Nigeria through the Ministry of transport as an alternative to cushion the high cost of the transportation in Nigeria.
You said something about creating 800, 000 indirect and direct jobs in Ekiti State. How do you intend to achieve that?
I am from Araromi Local Council Development Authority ,Iyin-Ekiti, Ekiti State. I have said it openly on several occasions that I will be willing to assist the new administration of Governor Biodun Oyebanji to reduce poverty and unemployment in Ekiti State to the barest minimum within four years.
It’s a known fact that Ekiti State is a landlocked state with various socio-economic challenges facing it at the moment ranging from poor Internally Generated Revenue, low Federation Account Allocation Committee allocation, over-bloated civil service, debt, insecurity, among others. But the exciting news is our great endowments are capable of pushing us out of our challenges, if only we can entrepreneurially look inwards to the various opportunities staring at us.
Massive job creation or poverty eradication is not a mystery, rather is a stimulated masterplan orchestrated by an entrepreneurial mindset to channel our huge natural and human resources to productivity.
My strategic economic development masterplan will push over 500,000 Ekiti State indigenes out of abject poverty and also create about 800,000 indirect/direct job opportunities within eight years. It focuss on total processing of our agribusiness, digital economy, tourism, human capital and mineral resources by exploring all the value chains to the latter.
The inflation rate stood at 20.77 per cent in September, according to the National Bureau of Statistics. What impact will high inflation have on the nation’s economy?
We have to get ready for the worst food supply crisis early next year. Foreign exchange crisis will worsen and there are going to be increases in import costs. Several companies might likely fold up not only because of the high inflation rate alone but the global climate change and energy crisis.
My fear is the unemployment rate, which might be very close to 75 per cent.
The Federal Government recently gave approval to Lagos State government for the construction of Lekki airport. Looking at the logistics situation in that axis, what does it mean for residents of that area?
It’s a good development for Lagos State with an estimated population of over 20 mlllion people. Lagos deserves at least five major local and international airports to ease air travel in and out of the cosmopolitan city, but the state government must also embark on a serious road infrastructure development to ease Lekki-Epe axis from congestion, which might likely be worse than that of Apapa.
The Lekki axis will definitely witness huge socio-economic activities due to so many individuals, families, companies and institutions that will relocate to the area. No doubt, this will definitely push real estate activities 10 times higher than the present situation.
What do you have to say about the N20trn 2023 budget and the incoming new administration in 2023?
The 2023 budget is not too bad as other past budgets, but implementation and source of income to fund our budgets is always an issue. We love huge figures as a nation but we hardly dwell on how we can productively harness our human and natural resources to the latter.
We rely on borrowing funds from developed nations with high interest rates to fund our budget. I think the Buhari administration should implement the 2023 budget to the latter and complete all the projects embarked on before handing over to the new government in May, 2023.
The Federal Government must block all leakages in the system and take crude oil theft seriously. Critical sectors that can propel economic development must gain absolute attention from the government. State/local governments should complement efforts of the Federal Government in fostering good governance across the board.
