ABIOLA FAJIMI is the Chief Executive Officer of PML Advisory Limited, a Lagos-based risk management, compliance, auditing and financial consultancy company. As part of steps to support the anti-graft crusade of the Federal Government, PML Advisory, signed a bilateral contract with an Indian Technology giant, E-Trend Technology India, last year, on a project to use high-tech software to entrench transparency and corporate governance in the private sector. In this interview, the shrewd accountant speaks about the positive impacts of the programme on the nation’s economy and investment opportunities available in this economic recession, among others. He speaks with BANKOLE SHAKIRUDEEN ADESHINA. Excerpts…
As a financial risk expert, how would you describe President Muhammadu Buhari’s anti-corruption war; the approach and result generated so far?
It’s a fact that the government is doing a lot to fight corruption. But I believe that the battle can be better fought, with better result, using latest technology.
Today, we are chasing people who have stolen several millions or billions of naira from the country, but there are also small thieves around that need to be checked too. And for us to find a way around it, the government needs to look at the National Identity Scheme. We need a scheme where we would know all Nigerians and their entire properties by a number.
If I am a business person, my national identity number supposed to be attached to my company certificate, if I buy a car, the number should be attached, if I buy a property, the number would be attached to it.
So, from a central location, details about me can be commanded. And in the case of anti-corruption war, the entire property of an individual can be known and his or her income too. So, if calculation is done and someone is seen to have acquired more properties than what his/her income suggests, the person can be tailed and summoned.
It is a scientific approach that is being used abroad to achieve a level of modicum in their society.
How can a professional company like PLM Advisory Limited intervene and make meaningful impacts?
For organizations to curb their internal corruption, corporate governance structure must be entrenched.
By this, we mean businesses should be operated according to international best practices. There should be no manipulations of whatever degree. Compliance to regulatory laws and policies must be taken seriously. And that is an important area where we have waded in.
What we are doing, as a company, is providing organisations with these international best practices integration models for adoption into their operations. And this has been helping them to better structure their businesses, manage their compliances with laws and regulations, so that there are no extra-cost incurred as a fine paid for defaulting on compliance.
In the last few months, we have seen companies pay several millions of naira in fines, out of non-compliance to regulatory laws. To address this, we are providing solution for these companies to manage their compliances and reduce their operational cost.
In this quest, we have been working with an Indian company for the past there years, to assist Nigerian companies manage their compliances, risk management and corporate governance. The company is called e-Trend Technology India. We at PML Advisory leveraged on their solution and experience to work with organisations, deploy software that can manage businesses’ risks, compliance and their internal audit.
The country is grappling with the effects of economic recession. What is your take?
Unfortunately, in the last quarter, the country has found itself in a state of economic recession. And that has far reaching implications on the country and the social-economic wellbeing of its people.
For instance, our unemployment rate has increased, inflation around basic consumable items have equally increased, purchasing power has been weakened, and the country’s Gross Domestic Products (GDP) has totally declined.
To a common man, that means everything has now become very expensive and out of reach to buy, because of the non-availability of cash.
For businesses to survive during this time, two things have to happen. One, is either you look for alternative ways to grow your revenue by diversifying or simply cut your cost.
But in a situation like this, a lot of corporations often opt for cost cutting, which often lead to downsizing of workforce and subsequently increased poverty level among the people. But that is not the only viable option available.
As a matter of fact, in recession, there would be opportunities. And strategic thinking Nigerians would make more legitimate money out of this economy than they can ever make before. Why? It’s because they have positioned themselves for it.
How can these opportunities be discovered and harnessed?
In this economic recession, Business Advisor Companies gain more patronage because of the upsurge demand for consultancy on survival techniques for businesses and diversification options during the hard times. And they are not doing it for free.
Also, the Credit Facility Companies are also striving in this recessed economy. This is because the Banks, the primary financial institutions that supposed to provide loan facilities for business operations in the country, are no longer doing this, prompting the services of the other lending companies to become attractive.
Besides, one-on-one lending is also booming than ever before. It’s the Micro Finance Banks and Credit Facility Companies that are taking advantage of these opportunities being created.
Another opportunity is to leverage on the ban imposition on some foreign goods by the government. Nigerians can begin to invest their money into the local production of those goods because there would sure be readily awaiting customers for them.
But bearing in mind the highly suffocating business climate in the country, no thanks to absence of supporting infrastructures, how can one navigate the business pathway successfully?
If you look at the recession, it’s because we don’t have money, hence the government can’t fund importation.
The starting point for any creative mind is to begin to ask the questions, what are these items that the government is no longer importing and or allowing people to import? Is it rice, frozen foods, agricultural produce and or what?
For instance, government is no longer allowing the importation of Tooth Pick into the country. So, there is an immediate industry that can be created around that and the remaining 41 international items banned for importation by the government.
A clear examination of the items can give a valuable lead on which one to invest in.
Besides, there are some items that, though, are still being imported, but the government is not providing enough dollars for its importation. That kind of product can be looked into as a possible area of investment. You should be restless about providing local and viable alternative to those products.
More importantly, one key area any one can take advantage of is the Technology Sector. It would surprise you to know that Nigeria spend over N1trillion, importing Software every year! And this is a country that has so many jobless Computer Graduates languishing in poverty and scouting endlessly for non-existent white collar jobs.
And what do you need to get a software going? It’s just a basic knowledge of technology. It doesn’t require a PhD academic certification. And this is a skill you can learn, even from the comfort of your room, via the internet. An interested person can enroll for all-night online software training. While some are absolutely free, some had to be paid for. Before you know it, Nigerians would begin to develop this products locally too.
Also, look at Sweet Corn and Green Beans used for Fried Rice. They are all imported. And we have fertile lands in this country to harvest all these produce. That is one of the areas our Agricultural option should adequately address.
Getting out of the recession, what are the urgent steps to be taken?
The first step is spending. The government needs to spend more now.
Two, the government needs to talk more now to the populace, educating and reassuring them about their plans and intentions.
In the past couple of weeks, we have heard more of such from the economic team of the government. The team is becoming more engaging, talking about what they are doing. That, they were not doing before.
But the President of the country must be seen to be leading the whole campaign. It’s very important he takes the lead. Yes, the Vice President, Prof Yemi Osinbajo has been leading the whole team and appears to be doing a good job, but the country needs the President for reassurance.
When the United States of America was in recession, President Barak Obama was everywhere, talking about the government plans and seeking the support of the citizens and corporations.
Also, we need to look at the Bank Cash Reserve Ratio. In an economy you want people to spend, you don’t maintain a 30 percent Cash Reserved Ratio. That is way too high.