ERIMODAFE: Government Needs To Create Enabling Environment For Foreign Capital Flow
Henry Erimodafe, Executive Director/ Head, United Bank of Switzerland (Nigeria), in this chat with GBENGA SALAU gave an insight to what government could do to help retain and create new jobs in Nigeria.
What should be the priority areas for this government in order to create jobs?
THE first thing is for government to articulate its polices, especially, the one regarding economic development, because everything about entrepreneurship and job creation are products of economic policies. As a manufacturer, you need to know the economic policy of the government in relation to your business — how to get your raw material, the tax regime and exchange rate.
The second thing is to look at how to get capital flow back into the country, but unfortunately, we have not done a lot in the last few months to encourage foreign capital investment, due to in-house problems, especially, with some elimination from global indexes. So, we need policies to turn that around.
And government needs to create that enabling environment for foreign capital to begin to flow in, like we saw three, four years back, when the economy was very attractive.
I also feel we could leverage something, which was quite useful in Switzerland. The Switzerland economy is very decentralised; there are no big multinationals, but small businesses, which are actually creating the jobs. These jobs are built around strong apprenticeship system, unlike Nigeria where people crave for academic certification. We need a practice-based education, where people learn how to sew cloth and other things and get started with small capital. And I think we are wasting our youth, by not encouraging them to go in that direction.
When we say economic policies should be in place, in terms of being an enabling environment for job creation, it means that, you want to have rules, which define what people can expect when they come into the economy. If it is rule of law for example is, how they can repatriate capital, because if the people bring in money, they want to know before they come in, how they can take the money out.
Rules on taxation, best explain to them how they would operate. If you want to entice people to bring in money, you need to tell them why Nigeria and not Ghana or any other country should be the destination. So, these are what we refer to when it comes to economic polices, what is it that the government is going to do to create an environment that is viable for business. How people can get the required economic resources to do the economic activities they are interested in. If all that are not in place, it will be very difficult to get people to commit funds.
It is also same for locals, if you do not know what the tax rate is going to be in your industry, how do you know if you are going to be profitable. So government needs to put those polices in place, they need to also work with those policies themselves and create faith in the economy. And once there is faith, there is trust in an economy, then the economy runs itself, and then, you have investment and jobs.
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