Mazi Okechukwu Unegbu, lawyer, banker is the Managing Director/CEO, Maxifund Investment and Securities Plc. In this interview with Medinat Kanabe, he speaks on the socioeconomic impact of Coronavirus
WHEN the budget was being prepared, I remember I mentioned that we were making a mistake and I said we are oblivious of the international market because US was importing less oil because they discovered shale oil in their place. Thailand also discovered shale oil and the other economies were reducing their oil intake as most of them now have renewable energy.
“I said at that time that $57 bench mark for our budget was very high. I had done the arithmetic because in budget planning you have to have what is called decision three approaches.
What I did was to benchmark our oil prices and said that $40 was okay but nobody listened. But you know today, the naira exchange rate has increased; before I left my office (on Thursday) it was N400 to a dollar so it is a very bad thing.
“And also, our rate of inflation, the government put it at over 3.0 per cent but the last time I checked, using the markets that we use, the inflation rate is about 16%.
So, if you go to the market and think that you will get a goods previously sold for N3 to remain so, you’ll be shocked that the same item could be as costly as N50.
“Also look at it, Italy has locked down totally because of the coronavirus, and Denmark has also locked down because of the virus.
These states are not isolated because it is an international economy which also affects Nigeria if it is negative. Also Donald Trump has given a directive that no one from Europe should enter the United States, that’s a partial lockdown and if these lockdowns are coming, we have a problem because most of the shops in Lagos, Kano, Enugu, Aba, and Onitsha depend on China for their supplies. China now has locked down since nothing is coming from there.
“On the negative effect on our economy, all I can say is that I’m so disappointed with the actions of the Central Bank of Nigeria because the apex bank left the economy to be managed by unseen hands.
There are no more unseen hands in economy these days, the hands are seen and the hand must be seen to be working. You abandoned the economy to the intrigues of politics which is a dangerous thing to do so.
“There is no way our budget is going to be the best. But my advice is that we should not panic, we should take these details and look at the various economic factors in the market.
On interest rate, the funny thing is that our interest rate has collapsed, the capital market is getting negative everyday even before the current economic problems and the US capital market fell below 7% in one day which has never happened in the world economy.
“They said Nigeria has come out of recession but I assure you now we are going to see the real recession. But like I said we should not panic. Our monitoring managers should now look at the factors and look at the Finance Bill again.
We don’t pay tax in this country because of the corruption in government. When money comes instead of using it to make the economy boom, they channel the money somewhere else.
What I will advise is that we should get all the factors of production that we have, get the very good things in Nigeria and see how we can manage without depending on other economies.
Remember that our border is closed and our neighbours are complaining. When the border was closed I did say that when you close a border and there is no free movement of trade what is going to happen is that our inflation rate will spike up but people didn’t believe me.
At the time the border was closed the inflation rate was about 9-10 percent but after the closure of the border it increased to about 12-15%. If the National Bureau of Statistics (NBS) will say the truth, they will tell you it was because of the closure of the border.
“In the public finance sector, you don’t close your borders, closing the border had in fact worsened the issue. Now even if you open the border you are not going to gain anything because people are now afraid to travel and go to a congested place because now in Nigeria Lassa fever is currently killing people and having more of the coronavirus people coming to Nigeria and we don’t have the necessary medical facilities so it is going to have some sort of negative impact in the economy and the budget will suffer as a result.
But if we do our job well, get people who know the job well to do it; I don’t think it will be so negative that we cannot come out of it”