Mr. Johnson Chukwu is the Founder and Managing Director of Cowry Asset Management Limited; Chairman, Standard Alliance Insurance Plc; Chairman Fidelity Pension Managers Ltd; Chairman Virgin Forest Energy Limited; (B.Sc – University of Lagos; MBA – Lagos Business School (Pan Atlantic University, Lagos), Fellow, Institute of Chartered Accountants of Nigeria (FCA); Fellow, Chartered Institute of Taxation of Nigeria (FCTI); Honorary Senior Member, Chartered Institute of Bankers of Nigeria (HCIB); Member, Institute of Directors. Attended several courses including IESE Business School (University of Navarra) Barcelona, Spain and Wharton Business School, University of Pennsylvania, Philadelphia, USA. Facilitator with Terrapin (A World leader in business events, with offices in London, New York, Singapore, Sydney, Dubai and Johannesburg), the Institute of Chartered Accountants of Nigeria (ICAN) and the Financial Institutions Training Center (FITC), a specialized training institution established by the Central Bank of Nigeria and the Bankers’ Committee. A regular media commentator on the Economy, Capital Market and Banking industry.
In this interview with Francis Adejoro, he spoke on the opportunities in Nigeria Business environment, infrastructural challenges and other related issues.
How do you see 2021 budget, is it a viable budget for our economy?
I think is going to be a tall order I thought that covid-19 was going to be behind us by now unfortunately the world is still dealing with covid-19, as a matter of fact we are now dealing with a more virulent strain of virus, the country is still witnessing a high level of fatality. The government is budgeting N13.558 trillion naira for 2021 which will have to be a very tall order while the government will be able to achieve the revenue projection from crude oil, revenue from other sources such as taxes and duties are going to be difficult to achieve because the economy will remain in recession for a longer part of this year, even when the recession is over the economy cannot perform like it did 2 years ago, so I think revenue projections will be tough to achieve and where that fails the expense projection will be difficult to achieve. If this is not achieved the government will just be borrowing to service recurrent expenditures and this will leave no room for capital expenditures.
Is it right for the government to borrow money from in-active accounts as proposed?
If you look at the finance act which has been signed into law, any amount that stand as unclaimed dividends will be borrowed through the DMO by the federal government and whenever the investors of this money make demand for it the money can be paid back, I pray the government will pay interest on this. As long as the government is willing to pay interest it shouldn’t be a major challenge. It’s nothing to worry about as long as the government is willing to pay back whenever demands are made and government pays commercial interest rate on. As long as these funds can be claimed with some benefits I do not think there is anything to worry about.
Some investors described Nigeria’s business environment as a very difficult terrain for entrepreneurs to operate. What is your take on this?
I wouldn’t agree to ‘very difficult ‘environment because difficult environment has a lot of challenges. I know we are dealing with infrastructure deficit including logistics infrastructure, especially now that it is so difficult to bring out goods from the sea port, and the cost of bringing out goods from the sea port is almost the same cost as shipping it from china. There is a structural bottlenecks created by infrastructural deficits. We are dealing with almost nonexistent transportation infrastructure. We have a challenging business environment the same environment posts the biggest economy opportunities in Africa. We have our own strengths and weaknesses; the key thing is for the policy makers to focus on the weaknesses to see how it can be addressed.
How would you describe the macroeconomic situation in Nigeria today
We know that the economy is in a recession, the major indices to be considered is price stability and exchange rate. We are dealing with a volatile exchange rate that creates uncertainty for business owners; we are dealing with depressed inflationary rate that is not reflective of market demands. This means that those saving money are taking negative interest income. As at the end of November we had inflationary rate of 14.89%. We have high inflation rate and negative interest income, which does not encourage savings and as a result of this, there is a very weak consumer demand. We need savings to encourage investment. We don’t have consumer credit, we have high unemployment rate of about 23%, so these indices reveals the current micro economy situation in Nigeria.
What can be done to ease the effects of COVID 19 on the economy?
Now that vaccines are available, the first thing government needs to do is to bring in this vaccines and inoculate the most vulnerable in the society, the elderly, those with underling health challenge and those constantly exposed to the risk of contracting covid-19. This should be the starting point. Then government should try as much as possible to enforce some of the COVID-19 protocols such as wearing of mask, social distancing, washing of hands and the use of sanitizer. The government does not really have the option of locking down the economy; probably what the government can do now is to lock down the sectors that has less economy value such as event centers and night clubs.
What kind of services do you provide at Cowry Asset?
Cowry asset is what you may now call a financial supermarket. We provide almost all aspects of financial services; we have a fund management license. We manage people’s investment portfolio; we have a real estate arm which is into real estate investment and product marketing. We have a consulting arm that provides services to various institutions in terms of cost optimization and revenue maximization. We have cowry capitals and also processing finance house license from the CBN. We also have cowry security; a stock broking firm. So cowry has gradually grown to become a financial support market that provides services to both local and international investors.
A good number of graduates moves around without much knowledge in technology and this is a key concern for us. What can the government do to create growth in this area?
We need to review our educational curriculum; the world has adopted STEM educational system. That is Science technology engineering and mathematics. This is the global educational curriculum today. The world has grown virtually. We need to embrace this system of education so that our graduates can compete anywhere in the world and become more employable. The other aspect is to have what we call finishing school. The government can work with the private sector on this aspect to upscale the competencies of those graduating from higher institutions. The likes of shell and other multinational companies have what they call training centers where new employees are trained for almost a year to improve their competence, This is one of the area government can encourage and support private sector to prepare fresh graduates for labour market.
Who will you say is your mentor?
It is difficult for people like me to talk about mentor; I have people that I admire in my development. I don’t have to start naming them in public but they know individually. I have a couple of people who I admire. Aside this I can learn from anybody, I see every interaction with people as a learning opportunity, the person’s position does not matter.
Will you consider politics in future?
I do not see myself submitting to an elective position but that does not mean I can’t serve my country. I am not ready for any political contest, if I am call upon to come out and contest, I will not come but I can serve my country in other areas.
Where is your best holiday spot?
My best holiday spot is my village. My village is called Ugwueke in Abia state. The place is like a sanctuary where you commune with nature. No noise pollution, the air is near pure. It is a very serene environment and our people are very nice. I find it difficult to leave each time I visit the place for holidays.
What kind of books do you read?
I read leadership books, economy journals. I read biographies for leisure.
Thank you for your time sir.
You are always welcome.