Austin Okere is the Founder, Computer Warehouse Group(CWG) Plc and he also serves on the World Economic Forum Business Council on Innovation and Intrapreneurship. In this interview, he said a lot of companies are going to die because of the forex market with consequent job loss. He also added that CWG has de-emphasised reseller business for high value Social impact areas, among other things. Excerpts:
How is the forex market affecting the ICT industry?
The forex market is presently a disaster for all of us. Every time we find ourselves in this forex situation, Nigerian businesses bear the brunt. In 2008-2010 when the global recession happened, a lot of businesses died mainly in the Stock Brokiing sector. Now, businesses are dying again because you find a company that has for instance a $10 million trade bill, and by the time the company signed a contract with its foreign partner, the dollar was N178. Now, the dollar has moved to above N300, they still have to repatriate to their foreign partner because if the local company doesn’t repatriate, the foreign partner will not supply again or they will take the local company to court. So, either way, it is the local companies that are going to suffer the exchange loss, not the customer nor the foreign supplier. This is not only happening in the IT sector, but also in other sectors because we are all importing raw materials and machineries, which must be paid at the new exchange rate. A lot of companies are going to die because of the forex market; and it is going to be very painful because it means a lot of jobs will go too.
What is your advice and encouragement for SMEs?
I called them the 3Ws. The first W is the WAY power; you learn whatever you want to do, if you have a passion for it, it is good, but learn the fundamentals so that you can be good at it. The second W is WILL power; when people say you should give up, you tell yourself no, let me keep trying and go the extra mile. My belief in entrepreneurship is, it’s not necessarily for the most brilliant or the strongest; it’s for the person that volunteers.You must have the WILL power to carry you on, even when people discourage you; you must not listen to the discouragement from people because he who does not venture to climb need not fear any fall, but there is little fun remaining down there when you can dare to go up. Failure for me is part of the experience. The last W is the WAIT power, which is just about patient to reap what you have sowed. As Nigerians, we are totally inpatient, and it shows even in the way we drive. If you have WAY, WILL and WAIT power, you will succeed in whatever you are doing in life.
Is there a front between CWG and government to provide and protect the infrastructure that is needed for a viable ICT industry?
This is important because the handshake between the public and the private sector is crucial. It’s true that we can leapfrog with digitalization into a middle income country. We have proven that in Nollywood; out of nothing, we created a very big industry that is recognized anywhere you go in the world; Nigerian films and music are being watched and listened to far and wide. But the question is, are we getting the value for it, are they being paid the right royalties? Digitalization can democratice distribution and optimize revenues, but digitalization rests on the availability of power; if there is no power, the guy that wants to use his phone for e-commerce and mobile banking cannot charge the phone and is locked out. Fixing the power situation is fundamental to leveraging technology to leapfrog. We have developed solutions along with our foreign partners that address revenue losses in the power sector and are discussing with some of the DISCOs on availing them of the technology. Another obstacle with leapfrogging with technology is regulation. Innovation is moving very much ahead of regulation. In America, for instance, the new disrupters like the Uber and Airbnb are moving way ahead of regulation. Where regulation has not caught up with them, they just create theirs and continue because there is demand for their service. Uber for instance doesn’t have any license, but the government has not been able to intervene it because everybody needs the service due to the perception of value and convenience. If the majority is seen to be breaking the law who will you arrest? Netflix was illegal, but today it has become the defacto video streaming service. So popular request and demand will shape regulation if it doesn’t move with the trend. The new digital economy is like a moving train; three things can happen: if you stand in front of the train, it will crush you; if you stay on the platform, it will leave you behind; or you get on the train. So, I believe the public and the private need a handshake, especially in the area of regulation evolution. Another area where help is needed is fair trade; look at the big companies like Microsoft, Oracle and the others that have offices in Nigeria, how much taxes do they pay? It seems that the Resellers are being saddled with the taxes of these companies. The National Office for Technology Acquisition and Promotion (NOTAP) has a code of guidelines for engagement between Original Equipment Manufacturers (OEM) and Value Added Resellers (VAR), which was derived from consultative meetings, after which a communiqué was published. But from all indications these guidelines are being vagrantly flouted. The essence was to establish fair trade terms for the parties. The guideline stipulates that the OEMs take 60 percent of any technical support contract, while the local VAR takes 40 percent on the support revenue. It also stipulates that the VAR be trained to acquire the competence to earn her share of 40 percent. But as I speak to you, local companies do these support jobs for a pitiful for 5-10 percent and also incur the liability that the OEMs should pay. By the time these taxes are withheld, the local companies end up making a loss. This is one of the main reasons why most of these local companies are dying. While NOTAP acted in the best interest of the local companies enforcement is seriously lacking.
