Okechukwu Unegbu presides over a multi-million naira investment and securities firm, a dealing member of the Nigerian Stock Exchange (NSE). As Managing Director and Chief Executive Officer (MD/CEO) of Maxifund Securities Investments, he has been at the centre of equities market activities on Customs Street, the seat of business in the commercial nerve centre in Lagos.
As former MD/CEO of defunct Citizens Bank International and former President of the Chartered Institute of Bankers of Nigeria (CIBN), Unegbu has his neck deep in wealth creation.
The banker, stockbroker, fund manager, investment analyst and lecturer at the University of Lagos (UNILAG) says employment opportunities abound in the country but leaders lack ideas to translate them into a reality.
Unaegbu, who is warming up for the governorship election in Imo State next year, canvassed reform in the Central Bank of Nigeria (CBN) to eliminate its major challenge, structural rigidity. He said CBN autonomy should be fortified against external attacks such that the helmsman will not matter more than the institution.
He spoke to Assistant Business Editor, KELECHI MGBOJI.
How to create employment opportunities
I came from a background where we use less to create more. I have developed people, businesses and institutions.
When people say there are no jobs I quickly disagree. There are jobs. Nobody has opened the job avenue for people to express themselves. We have neglected agriculture through which we can create a lot of employment. And we keep lamenting that there are no jobs. There are jobs in this country any time any day. Nigeria is so rich in agriculture.
The country is the world’s largest producer of cassava. Imo State, where I come from, produces about 40 per cent of it. Unfortunately much of it is wasted. I know that cassava is a very rich source of ethanol. And ethanol is used in a wide range of products in pharmaceuticals and beverages, et cetera. Nigeria imports a lot of it yet the raw material is wasted in the country.
Brazil makes its own ethanol from sugarcane. The United States makes its own ethanol from corn. One tonne of cassava produces a larger quantity of ethanol than sugarcane or corn. Why can’t we open an opportunity for employment through this way? All the cassava we waste is enough to produce large quantities of ethanol and stop importing it.
A palm plantation offers a lot of employment. Everything about it is useful, whether it is the oil, kernel, slob, fibre, bamboo, et cetera. Malaysia came here and took palm seedling from Nigeria. Today, it is the world’s largest exporter of palm oil. This class of oil is basic ingredient for a lot of food products.
There are great opportunities for wealth creation in Nigeria, what we lack or fail to explore are the ideas endowed in us to create wealth and employment. If I become the Governor of Imo State, I will look into agriculture, education, science and technology, and other areas to see how I can liberate the latent job opportunities.
The late Chukwuemeka Odumegwu-Ojukwu manufactured local weapons of mass destruction like rocket propeller, shore battery, massive killer, and others. He got his people to refine petroleum locally, and there was enough for consumption. Those weapons were created in ramshackle areas but after the war, we lost the opportunity to develop those inventions. We can revisit those exploits he did.
State of the capital market
After the 2008, the Nigerian capital market is coming back strong because there are some changes being made. Some people who defrauded the market or did some things wrong are being corrected through punishment. We are moving in the right direction even though the market is going up and down in cycles.
The market is now poised for trading. Look at Oando. Those who bought its shares at N18 sold at about N35, N36 and N38. I am not saying that is the way it should go but, in other words, it is a sign that things are changing.
Look at the various sectors, including food and service industry. These companies are the fibre of the Nigerian capital market and the economy. The stock market is the gauge of how the economy is doing. The capital market is now stable and appreciated, and regulators are doing a lot to punish infractions.
Once there is discipline and integrity, the market grows; not in terms of geometrical but in terms of stability, depth and integrity of operators and regulators. And stability in terms of payment of regular dividends, ensuring understanding among regulators, operators and investors.
I am not emphasising on foreign investors because foreign investors are speculators. They are not the real people that build the economy. We need them but not to take over the market from the locals or medium-sized firms or the ordinary investor.
Correlation between the capital market and rebased $510 billion GDP
There is a correlation because the capital market was also used to rebase the economy. The capital market base before now was 1960. And it has been going on like that. The growth inherent in that 1960 rebase was not recognised. In 1960 the capital market was not just there.
The other sectors, such as the IT and Nollywood, are part of the rebasing; the capital market has had a good chunk of the rebasing. Even the print and electronic media are part of this rebasing.
TheNiche, for instance, is coming in. In the next rebasing, TheNiche would be captured. So, there has been so much growth since the last rebasing of the economy and they are all part of it. The only problem I have is that in rebasing they should not deceive us like somebody decides that this is the way it is going to be.
It should not get into our heads, it challenges us to put other things right. How far is the infrastructure growing with it? How far has unemployment been reduced based on that rebasing? Has the level of corruption reduced? Where do we stand after rebasing? What level of human development index are we?
All these are things we need, and if they are able to put them right then rebasing and growth can have meaning for an average Nigerian.
Is the capital market good for the rebasing or worse off?
They have just said the capital market would have to recapitalise by December 2014. That one has not come in. So what was used is what the capital market was before this announcement. I don’t know how that is going to happen.
The operators do not have the capitalisation because they are just coming out of the market decline of 2008. That is an issue they need to take note of. If they don’t and go ahead with recapitalisation, it will worsen unemployment.
When companies cannot recapitalise they will leave the market as they will close down. They will sack workers who will join the queue for other jobs. We have to be careful the way we look at it.
You do not agree with the recapitalisation of stockbrokers?
I subscribe to it on the grounds that it has to consider structural changes first. Recapitalisation does not correct the shortfall or the bad behaviour of operators.
You must do proper structural changes in terms of operations and the infrastructure used by operators. Regulators themselves should step forward and clear these issues.
Regulators need to consider some things before capital base.
If they go on with recapitalisation now, it may leave the market worse off because it may end up in the hands of people who have the money but lack integrity. They will take over the market and kill it faster than regulators cam imagine.
Because if you allow people with less integrity and accountability to take over capital market operation it becomes vulnerable.
If regulators allow people with integrity and accountability to take over the market and enforce rules and regulations the market will be better for it. But if regulators do it with impunity they will create hiccups.
Every stockbroker needs to support the recapitalisation but regulators need to do stress test first as was done in the banking sector. Find out how the firms are doing and what they require for improvement, just like the banks, because stockbroking firms deal with other people’s money. They have no money of their own.
If you give me money and come back only for me to tell you I didn’t buy stocks for you or I sold your stock and spent your money, then recapitalisation has not changed the things people are complaining about.
But if you trust me with your money and stress test shows that I am in all red and cannot be trusted with money, the capital market will grow. And the economy also will get benefits.
Projection of the market in the second half of the year
The market is going to remain a bit stable in the second half of the year. What I mean by stability is that it will not crash, neither will it rise geometrically.
