Finance And Banking Expert Dr John Udofa Proffers Solutions On Depressed Economy To Govt and Business Entrepreneurs
By Emmanuel Uffot
The Group CEO of Supra Capital and Finance Company Limited, a CBN licensed and regulated financial institution Dr John Udofa has proffered solutions to the current tough economic downturn experienced in Akwa Ibom and Nigeria in general.
Dr Udofa who is also former Managing Director of the defunct Cooperative Development Bank and Chairman of Imperial International Schools,
offered the suggestion on Saturday, on March 23 ,2024 in Eket during the inauguration of Eket Chamber of Commerce, Industries, Mines and Agriculture (EKECCIMA) while giving a keynote message with a theme “GROWING A CHAMBER OF COMMERCE IN A DEPRESSED ECONOMY”.
He said with the obvious pointers of a depressed economic currently prevailing in the country, there is no way a c
Chamber of Commerce of a city like that of Eket among others can thrive.
“How can a City Chambers of Commerce Develop and Grow under a Depressed Economy
having been clear from the indexes above that the nation economy is severely depressed, it is
important that the chambers must find ways of developing and growing in the face of the current
situation”,
He therefore offered suggestions on what the Chambers of Commerce should do to survive amidst harsh economic downturn.
“I will go ahead and mention a few important strategies that a chamber can adopt to keep its
operations afloat in these challenging times as follows.
Think out of the Box!!!
Thinking out of the box will entail the chambers doing extraordinary things to keep their
operations going such as
❖ Partnering with the government on areas of poverty alleviation programs. Partnership
with government by the chambers can seamlessly be achieved by the chambers allowing
themselves to be the direct eye in which the government can know the health of the
economy in the zone”,
He maintained that if the Chambers are impoverise, there is a strong correlation that the economy is bad.
“It is to be noted that if the chambers are impoverished, there’s
strong correlation that the economy is impoverished, and the people are poor and then
both can work together as partners in the provision of poverty alleviation remedies to
the citizens”,
Dr Udofa emphasised on the importance of collaboration between the Chambers and government as one of the way out to ameliorate the situation.
“In doing this, the chambers and the government must work in close collaboration to
ensure a win -win outcome “.
He listed the following as some of the key solutions,
❖ Explore opportunities for Backward integration. Generally, in the face of scarce foreign
exchange occasioned by the depression in the economy, it is imperative on the chambers
to alert and encourage their members to, rather than closing shops or relocating to other
climes with the attendant high cost for exercise, to explore the development of local raw
materials for their operations. The benefits of using local raw materials are noted for,
availability, being cheap, and shorter lead-time for delivery. All these can positively
impact the bottom.
❖ Co-utilization of Facilities: co-utilization of facilities makes the cost of development and
maintenance of the facilities cheaper for all parties. Consequently, members of the
chambers can come together and develop facilities for common use, to bring down the
cost of operations. The chambers, being the common platform can give verve to the
implementation.
❖ Provide Updates on Current/Relevant Information; the chambers, especially during
periods of depression should ensure that their members are updated regularly on current
state of the nation, particularly on the economy. Regular circular from the CBN, the different regulators, especially those relating to their members and their suppliers and customers should be made available to all concerned so that they can be updated and operate within the permissible limits.
The banker and finance expert further advised the government on steps to take to grow the economy in the situation of economic meltdown. He said the then American President, Barack Obama gave grant to existing businesses to rejig the economy during meltdown.
Another panacea according to him, is for Governments to assist Chambers during Economic depression
while the chambers may have to do much more during periods of economic depression to keep
the operations of their members up.
Similarly, he enumerated ways government, can help the Chambers
to operate in the overall win-win outcome to include,
Provision of steady and Reliable Energy which he stressed is so crucial to the members of the chambers for smooth operations of their businesses.
Noting that the amended electricity act 2023 which repeals the
electricity and power sector reforms acts of 2005 provides new opportunities for States and other
independent investors, other than the federal government to generate, transmit, and distribute
electricity. He said
” Akwa Ibom state government can latch into this window and become a player in the
sector in order to improve energy supply to the state just like the Oyo State governments has
announced their decision to key in and take advantage of this opportunity. Abia state is lucky to
have had someone built the geometric plant in the state and they have already leveraged on this
supply. Our state is lucky that we have Ibom power, this can be enhanced to provide steady
electricity rather than selling the entire output to the national grid.
Extend Grants to Chamber members to Support their operations: during economic depression,
cost of funding will be relatively very high. In Nigeria for example, with MPR @22.5%, and inflation
at about 31.7%, the minimum lending rates in banks will be in the region of 30% for corporates
which are the less risky borrowers and much higher for the middle and lower tiers, this alone will
shut out many from borrowing and even the intervention funds, if at all will be available, will still
require the stringent collateral requirements of the obligor financial institutions which will
continue to shut out many from accessing these loans”.
Again, Dr Udofa noted that the capital of most businesses has been significantly eroded with
the massive devaluation of the currency leaving most businesses with little or nothing to operate with.
Dr. John Udofa who is also a member Board of Directors of EKECCIMA urged government to give tax relief to business owners to enable them survive the economic crunch “It is in the face of this exceedingly difficult reality that the government can come to the rescue,
with grants and or soft loans with interest rates with human face”,
“This is not novel because the
then President Obama engaged this approach with his bail-out fund to restart the American
economy after the global melt down of the 2027/8”.
Still hinging on the benefits of tax holidays
Dr Udofa said
“Tax Holidays Incentives can be very attractive to the businesses especially during this time
that the businesses are trying to reinvent themselves. The government and the chambers can
work out proper modalities for this to ensure that abuse is eliminated.
“The Chambers will remain very grateful to the government if these recommendations are
considered, not only for the Eket Chambers of commerce, but across the entire state”
