Chief Ini Akpabio is one among those in Nigeria’s hospitality business. He is the Managing Director, Nanet Hotels Limited, the national vice president, Federation of Tourism Association of Nigeria (FTAN), National President, Hospitality and Tourism Management Association of Nigeria (HTMAN). He speaks on the Central Bank of Nigeria (CBN)’s proposed directive on cash withdrawal limit, the post-election mayhem in some parts of the country as it affects the hospitality sector and the recent holiday trip by President Jonathan to Obudu Cattle Ranch, among others.
Recently, there was violence in some states of the north? How has it affected the hospitality industry?
The hospitality sector has paid a very high price for the sustenance and promotion of democracy in the country. Nigerians have paid heavily for the sustenance of democracy not just the hospitality industry. Remember that the month of April has about five Saturdays and Fridays which were very significant and crucial. Those in the hospitality sector never enjoyed those weekends because out of the five, four were for elections. Therefore, all those in the hospitality sector were hit in the sense that there was no business.
Those in the night clubs too suffered because there were virtually no businesses. Yes, that is part of the price we in the sector had to pay for the survival of democracy in Nigeria. We also want to say that even after the problem, there were violence in different parts of the country. As you know, my strong base is in Kaduna where we have a lot of businesses. As we are talking now, the curfew is still on which eventually has rendered most of our businesses there inactive. You may begin to imagine the damage done to the economy of the state, the economy of the hospitality industry and the economy of Nigeria at large including the total upheaval in the social life of the people.
Nigeria is the only country that things continue to get worse every day instead of getting better. In my secondary school days, I was taught better and we were fewer in the class. Our classrooms were well kept. The last time I went to my alma mater, the whole school was in shambles. Instead of 25 students in each class as we used to be, there are now 60 students.
When we had Electricity Cooperation of Nigeria (ECN), the power supply was stable. Today we are under the Power Holding Company of Nigeria (PHCN). When we were in the university, we came out speaking good English language and writing same.
President Goodluck Jonathan just came back from a retreat to Obudu Cattle Ranch. This we want to believe is very good for our hospitality business.
Let me use this opportunity to encourage people, particularly the public office holders to always patronize our hotels. Let me quickly point out that the major challenges to some people who should have patronized our hotels are the exorbitant rates. It is very expensive for people to visit there.
Let me give you an example. It is cheaper to have a decent room accommodation in New York and Dubai than in Nigeria. A room in Dubai is $250 a night and that translates to about N37,000. That same accommodation in Nigeria will amount to N85,000. So even with the transport cost, you will have cheaper room rates than what is obtainable in the country.
The reasons for this are very clear. No constant electricity and also lack of one digit interest rate on the borrowable funds to start business. These are some of the major reasons why the cost of rooms in the country is high. But if by ‘morrow, we begin to have constant electricity as well as begin to borrow at seven percent per annum, such a development could reduce our prices on accommodation by 75%. Instead of charging N100,000 per room, we may now begin to charge N25,000 and still make profit.
How do you view the proposed cash withdrawal limit directive by the CBN?
The CBN under the leadership of Sanusi Lamido has tried its best to bring some reforms into the banking and financial system to improve the economy. He is also trying his best to reposition the country economically and financially among the committee of nations.
However, there should be a step-by-step approach to these things because the recent moves by the CBN which is enforceable later in the year, does not portend good for the country’s business climate. According to the CBN, an individual is to withdraw a maximum of N150,000 only, without charges while an organisation is to withdraw just N1 million. This directive has to be reviewed because when we look at our economy, it is basically based on cash. Therefore, one must be careful if he wants people to stop the use of cash in business transactions.
Let basic arrangements be in place to enable people spend freely with no hindrances. If not, what we can do is to stop people utilizing the banks and could take more time to get people to know what is called ‘simple banking habits’, which in essence, means that much of our money will first be in the banks before we spend.
It is obvious that many things will work against this new CBN directive. First, we must have on ground, basic capacity which could be alternative to cash. Which means basic machines and apparatus to receive cash must be available. Also, there should be enough machines to bring out cash as one may demand at will which is not available in the country as we are talking now.
Let’s go to my area which is the hospitality industry. Take Abuja for example. You notice that there are limited hotels, limited restaurants and a few supermarkets which you can buy goods from after slotting in your ATM card to pay for items purchased. They are very few. In fact, they constitute less than 5% of the total buying points with implications that when a person withdraws N150,000 as required by the CBN, you would see that most of the people who go shopping spend more than that a day and by the proposed new directive, it is an impossible situation which could make one unable to pay for items purchased at a particular time.
Take for instance, if I have say N1 million in my account and after spending N250,000 and with my card, should be able to withdraw the money I want. But what happens if the operator could not provide the money I want? It means that transaction is not complete.
So, I think the CBN governor and the banks should have concentrated more on increasing the capacity of cards acceptance by sellers of goods and services. Take a look at the ATM cards we have now. Do we have enough machines to transact business at will? How, many of them do we have in the country as a whole? What about some major towns and cities? Are they available for people to access? Take Abuja for example. How many ATMs do we have that are functional? I’m talking from an exposed standpoint, because each time I travel to the UK or USA, there are cash machine points all over the place.
Besides, they arrange it in such a way that you don’t need to go more than half a kilometer before you get one on which to transact business at any given time contrary to what is obtainable here in Nigeria.
Therefore, when one is making a policy that covers not just one town and city but the whole country, the practicality of that concept may not be very easy for us to say it will succeed. We are of the opinion that the maximum cash withdrawal should be more. Why not raise it to maybe N500,000 for an individual because Nigeria’s economy is cash based.
As a businessman with many years of experience, would you say Nigeria is ready for a cashless economy?
To be very frank with you, Nigeria is still developing and to put it succinctly, we are not very ripe for the cashless economy because we lack certain things that should have been put in place by the government. One of such things is constant power supply. This is because interactions within the banks and where our money are kept are powered by electricity. Therefore, if there is any break in communication between peoples, for instance, I want to pay for a particular good and service and there is no electricity to enhance our transaction, then there will be a delay on that transaction.
Are you saying the CBN’s efforts to check corruption through cash withdrawal limit may not succeed in the country?
We are behind every moves and methods made by the CBN to check and if possible, track down and prosecute corrupt officials be they in government or individuals or cooperate bodies. It is always good to check and track down all corrupt persons using a banking institution like the CBN.
Implementation may be difficult here because even if we say don’t withdraw up to a particular amount, the person involved could device other means. He may withdraw in two or three places some amount which when put together, would even be more than what he was not officially allowed.
Some developed countries have the means of getting people who are corrupt when doing one transaction or the other. For instance, if you pay cash in some countries for hotel accommodation, you may be questioned because according to them, it is only those with questionable lifestyle who pay cash in whatever transactions they do to avoid being traced in case of any eventuality.
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