25th October, 2023
The Group Managing Director and Chief Executive Officer (CEO) of CFL Group of companies, Lai Omotola has specifically said business cabals are the people holding Nigeria down.
Omotola, who spoke at a news conference marking CFL Group’s 25 years of doing business in Nigeria on Monday, said he had never seen elite business people whose only business is speculating on the nation’s currency.
“The problem we have in Nigeria is the so-called business elites, who have little understanding of the game called business. They have a reversed mentality of what business is all about,” he said.
Omotola stated that the last administration of Muhammadu Buhari spent N1.7 trillion on agriculture, but lamented that a bag of rice is still around N45,000 to N60,000 in Nigeria.
“This was not Buhari’s fault, but that of the businessmen. They collect the money, lie to the government that they have 50 hectares of land somewhere, and divert the money. When it is time for harvest, they will hire people to cause a crisis in the community and declare force majeure,” he said.
The CEO also decried the state of the Naira, saying that it was made worse by the business cabal whose sole business is to speculate on how to make a huge profit as long as the dollar gained an extreme advantage over the Naira.
According to him, “That’s the only business they do. All of them, in everything they are doing, the underlying factor is that they are speculating. And this is how they do it. They may have a manufacturing plant, no doubt about it. For instance, the manufacturing plant needs $10 million, so they need to buy dollars. But the truth of the matter is that nobody is investigating if their actual need is $10 million or if they need something lesser than what they say they need.”
Omotola stated that most likely, they only needed $1 million, but that they would collect $10 million, adding that they would send the $1 million to their supplier, convert the remaining $9 million to Naira and sell it to the black marketers.
He explained that when you have a gap of over N300 in the exchange rate and “you are selling $9 million, you are making N270 million without having a staff or investing anywhere, but just taking dollars in and out.”
According to Omotola, “That business is sweeter than cocaine, which is why all of them are locked into it, and that is why Naira today is moving towards N1,200 for a dollar. When this present government was floating the Naira, it was to make the difference between the Naira at the official market and the parallel market not to exceed N2. That’s the meaning of floating. But this government has forgotten that when you float the Naira, there is no dollar in the Central Bank of Nigeria, CBN, to back that Naira.”
Omotola explained further that “it’s a matter of demand and supply. Anything in life, if today more people are looking for a particular substance than what is available, the price of the substance would go up. It is fundamental economics. If fewer people are looking for it, the value will depreciate. That’s the issue of demand and supply. So when you now allow the Naira to float, when you don’t have enough dollars, guess those with the dollar. It’s with the market cabals.”
He contended that Nigeria’s economy is not powered by market forces, saying there is nothing called market forces in Nigeria’s economy.
Omotola argued that Nigeria’s economy is powered by market Cabals, saying that regulating the currency has moved from the hands of the CBN to the hands of the Market Cabals.
He said: “Let me tell you how they operate. For instance, they know that Nigeria requires $100 million to have that floating that will keep the difference between the official rate and parallel market at N2. And the cabals are the ones that have the $100 million. So they will only release $50 million into the economy.
“Now, when you release $50 million, demand for the dollar will become much higher, and the supply will become lower, thereby influencing and increasing the dollar price to Naira. CBN cannot intervene because there is no dollar.
“So the market cabals always have dollars with them. And they work in circles. They have dollars with them, they are the ones supplying dollars to the market, and they make a hell of a profit from the circles. So which business can be better than that?”
Omotola said the nation’s business elites who had funded politicians to win an election who are doing this type of not-too-tidy business were the ones that had held the Naira in captivity.
He said that as long as they are in charge, it will be difficult for the Naira to gain strength against the dollar, adding that the worst part of it was that if the government goes today to pump $20 billion into the economy, 80 per cent of that money would end up in their hands, and that they would continue to use it in an unproductive means because they want that dollar to Naira gap to continue to exist.
However, Omotola said his group of companies which was incorporated in 1998, had set up about 27 companies in different sectors of the economy.
He said the World Bank report had it that the lifespan of a Nigerian company is five years, saying that “we have sustained this company for 25 years.
“We’ve seen all the crises. We’ve seen the financial crisis, inflation, COVID-19 and now the subsidy crisis. It has been very challenging,” he stated.
According to him, “In Nigeria, the government is not pro-business. We pay all our taxes but don’t get the same compliment. The only thing that can keep you in business for 25 years is God and the power that you have because someone can just come one day and pull down your building. Anything can happen at any time.
“So, you need that resistance that it’s not going to happen. The chaotic environment is what makes a lot of people run away. But the truth of the matter is that there is hardly any country in the world that has the same profit margin that Nigeria has in every sector.”