Babatunde Adesayo Samuel, is the founder and Chief Executive Officer, TGR Limited, a fin-tech service provider. In this interview with The Guardian, discusses his company’s product empowerment programme exploring telecom services and challenges in the economy.
The Services industry has remained the driving force of the Nigerian economy in the non-oil sector. What is your assessment on the performance of the country’s ICT sector in contributing to the country’s GDP growth?
I think since the beginning of the lockdown due to the COVID-19 pandemic, ICT has been the major player in the economy, contributing greatly. You know when everybody was out of job, under lockdown, and staying at home, you won’t believe that in the first two weeks, three weeks, we were all depending on the telecoms sector for survival as everything was going on online, data being bought, air time being used since we cannot move around. It has contributed immensely to the growth of our GDP.
According to my findings, it is over 14 per cent in the early quarters of the year that ICT contributed to our GDP. So, ICT has been the one pushing the economy because you don’t need to go out before you do anything. They can do anything provided it is online services. Unlike Agriculture, food production, you have to go out and provide their services. But this one, you can do it online so ICT has contributed to the growth of the economy.
Hope the hike in electricity tariff , and deregulation of Nigeria’s downstream sector with the removal of fuel subsidies won’t trigger rise in call rates, data and airtime from telcos?
Yes, the way I am looking at it, all the telecoms companies are not operating outside Nigeria, and rather they are operating within the Nigerian economy. And of course, when the cost of production is increased, it will affect them unilaterally, on how much the price of data or airtime is, it will affect periodically. When there is action, there will be corresponding reactions and that is what will affect the cost or the price the telcos are giving to their consumers, because in the course of all this, they need electricity to run their businesses and the cost of electricity tariff has increased. They need to move around with fuel despite the pump price increments they need these services for business growth and expansion. And once all these energy costs are included in their cost of production, it will be transferred to the final consumers automatically. So of course, it is very possible that the price of calls may increase as the year ends (2020).
What is your assessment of the Nigerian economy’s performance since the beginning of the year?
Well, the Nigerian economy since the beginning of the year started on a good note. But the advent of the COVID-19 pandemic brought up something that has never happened in the history of Nigeria as a country and to me, since I was born into this world that there will be a total lockdown. And you know that the Federal Government wants to prevent meltdowns by making sure that our economy is really booming to protect the lives of human capital, and there was a total lockdown. I mean closing down all businesses in the country. Government decided to close down the sea, land borders and air space (aviation) just to make sure that there is safety in the country. Unfortunately, the COVID-19 hit the economy hard.
In fact, it hit us badly in all ramifications. You can see that lots of revenues were lost during theCOVID-19 period, which affected many Nigerians. Again, you can see that a lot of businesses were closed down and a lot of companies even relieved their staff of their jobs, which affected a lot of households. But the government is trying as much as possible to even give some kind of palliatives to the citizens.
The CBN also helped in reducing lending rate in the country and there was a moratorium for Nigerians, who have borrowed maybe for business for six months. They were given a moratorium of one year to pay the principal back. Even my own company, when we got a loan from the bank, I was given a moratorium of six months to pay back the loan interest and they spread the capital, which is part of the way the government is encouraging businesses in this country. Also, during the COVID-19 crisis, the fuel pump prices were reduced for Nigerians, and this impacted positively on the cost of running generators for business in the country. Government has been trying to make sure the country’s economy bounced back since the pandemic. But notwithstanding, the COVID-19 pandemic really affected the economy in the first half of the year.
We are aware that the COVID-19 pandemic slowed down global economic progression, including Nigeria. What is your assessment of the impacts of COVID-19 on Nigeria’s Gross Domestic Product (GDP)?
Yes; it really affected us in terms of our GDP. It affected everybody, because the companies were hoping to be running businesses during the COVID-19 but they were all on lockdown. Of course, revenue generated by the government during this period reduced drastically with the concurrent fall in the price of crude oil at the international market, and billions of naira was lost to Covid-19. When you look at the aviation industry, sea, and land borders, they were all locked down during the pandemic. No importation, no exportation even in the production of goods in the manufacturing sector everything stopped working.
No doubt, it truly affected the economy and the individual in a very severe way, especially those that are into service businesses like transportation, food production and others. Nobody was able to move around at that period, and the economy of households was really affected and reduced. This made life a bit more difficult for Nigerians even to sustain their means of daily livelihood.