Digitalisation crucial for survival of the Economy-Marcel Okeke
Says Economy already in recession
He has seen the inside and outside of both the media and banking halls. As a budding reporter who started his journalism career in the late 80’sz as business correspondent and later business editor in leading newspapers like Punch,Concord ,Guardian,Champion and ending up as bug corporate player in the banking sector,Marcel Okeke knows his onions as a season media guru and corporate player.
His sufficient grasp of the nations economy later placed him not only as Chief Economist with leading Zenith Bank but also as board member of many corporations until 2017 when he set up the Mascot Consulting as lead consultant.
His grasp of the dynamics of the banking world is a direct reflection of his varied experience from the newsroom to the board room.
Okeke speaks on the nations economy,raging from scourge of unemployment and the banking sector which he said,”is enjoying the best of times in spite of the Covid-19 pandemic.
This, he attributed to the previous passing of stress test by the Central Bank of Nigeria and most importantly digitalisation of its operations to catch up with the changing times.
Excerpts from the interview with Newdawnngr.
Newdawnngr:With the rising wave of unemployment,how do we grow our economy post-covid?
I want to start by saying that the economic situation in the country is tough. The unemployment ratio has moved from 23% to 27% now among the nations youth. But it is a good thing that the Federal government has set up the ministry of communications and digital economy. With the onset of Covid-19, we have entered a new normal. The operations of a digital economy could stimulate and turn around the economy.Through the digital economy we can create a new market,new products and expand the economy. For everybody,everywhere,we are in a new normal.
As for the youths,they must acquire a digital skill to survive in the new economy that has emerged. For me,that should be the focus of the government,training the youths in skill acquisition, entrepreneurship in order to start setting up themselves. People must be retrained in order to be able to survive the new normal.
Newdawnngr:The stock market seems to be doing averagely well,what would you say is the source of this in a depressed economy.
There are two sides to it. For you to say that the stock market is growing is not sufficient enough. If you look at the stock market,all the share index,it has dropped from 5 to 6 down. With consequent market capitalisation, you can say so but I like to say that it is so because some investors are trapped in the market because of the Covid-19 pandemic as they could not repatriate their profit out of the country and they now find a way to invest since they could not take it out of the economy and they now try to invest in the stock.That is what is responsible for the upward swing. But I like to say that it is a temporary thing.
Newdawnngr: The World bank has warned of economic recession,how could the country cope?
Let me tell you,the truth is that we are already in recession. The Gross Domestic Product(GDP) in the last quarter of 2019 was 2.55% ,in the last quarter of this year it has dropped to 1.8% and now with the Coronavirus crisis it has dropped to-61 % in the second quarter of this year. The drop is quite significant.it is not a question of the World bank saying we are going into recession. We are already there. The various measures being put in place by the monetary and fiscal authorities like the Central Bank of Nigeria(CBN) putting in place investment policies and measures to diversify the economy and our income sources. For example,the opening of Gold mining, Bitumen, agricultural policies and import substitution,all this out together will see us through. Furthermore,the price of oil in the world market which is now hovering at $40 per barrel,will help our economy to cope and bounce back.
Newdawnngr:But what of the likely impact of the US and China trade war?
Deliberately and consistently,the government is diversifying the economy.There are also various measures the government is also putting in place like giving of loans at concessionary rates,the various loans for the agricultural sector,manufacturers of certain products who now have access to foreign exchange to produce made in Nigeria goods.
As a result of all this measures,people will start looking inwards and consequently weaning ourselves away from 100% dependent on oil.
Newdawnngr:State governors have cried out to FG for bail out as a result of the spendings on COVID-19,is the call justifiable.
It is neither yes or no. Ordinarily, the states are not supposed to be dependent on the federal government. They are called sub nationalities. But our constitution has made it possible for states to be dependent. There is need for constitutions amendment to allow states to increase their internal generated revenues(IGR). In such amendment provision should be changed to remove the states from the spring strings of the federal government. For how long will the states continue to depend on the federal government and with the level of corruption that has pervaded everywhere. The way out is for states to be allowed to enjoy their natural resources and move forward in development.
Newdawnngr: Do you for see more acquisitions in the banking industry as a result of likely depression?
I don’t for see such a thing now.the CBN and Nigeria Deposit Insurance Corporation(NDIC) before now have done what is called stress test for the banks. The banks are programmed to be doing well.besides,they have all embraced digital economy such that banking business is more digital now.They are getting the money and everyone of them is involved. For now there is no need for any merger.
Newdawnngr: How could banks stimulate the economy during the envisaged depression.
So much depends on the CBN.the way the CBN monitor the rates will determine the position .For instance since July 2019,the CBN has raised ration on loans you give based on your deposit. That is if younger 1000 deposit, the CBN says you must give out 650 as loans. The CBN has compelled the banks to be giving out loans. This loans are now available. Facilities for Small and Medium Scale Enterprises(SMES) are now available at single digit interest rates rather than double digit.
Newdawnngr:The media industry have been hard hit by the pre and post Covid -19 economic situation. How best do you think the media could adjust and stay afloat?
The reality is that the person who has the market is in control. The situation now is that nothing is constant and that is why things has changed. For instance, I read the account of a marketer in the Newdawnngr who discovered that Radio houses in Oyo state with review of newspapers in local language in the morning now attract advertising patronage to their stations because people now prefer to listen to news review and not buy newspapers.He now discovers that Advertisers now put their adverts in such stations.
The reality of today is that nobody can be everything and everybody.
You have to define your market and package it well. A newspaper that must survive today has to embrace technology. They also have to give their attention to on line publications because because that is the best way to complement the hard copy. The digital economy has affected everybody.Newspapers have to know what the people want,what do they read, identify their market and also have to learn to get it right.
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