“There must be an empowered middle class. Not middle class of persons but middle class of enterprises that can drive economic growth.”
Amobi Muoghalu is the brain behind Village Vehicles International, a far-reaching automobile company with tentacles in real estate, trading and property management.
The eloquent businessman and entrepreneur, in this interview, laments that SMEs in the country recently face a litany of challenges with attendant weak governmental policies in the area of empowering emerging businesses.
Despite admitting that he is a successful businessman, the automobile dealer who hails from Anambra reserves the view that the challenges encountered in the automobile business range from unfriendly exchange rate, high import duties, weak governmental polices for SMEs, and the like.
He also shares his business experience and success story.
I came from an entrepreneurial family. My late father, Gabriel Muoghalu, was the CEO of Daily Express Motors. We ran major luxury buses from Aba to Kano and to Lagos, in those days. I managed that business very well. My father was also the major distributor for Apex Paper Mills and was a co-founder of other businesses. We had businesses all over and that groomed us as children because we stayed at the stores during holidays. Entrepreneurship grew in the family that almost all my family members are businessmen. Village Trading Company and Village Properties, where we lease and maintain properties for clients, are part of the businesses I run. The bread and butter business has been Village Vehicles International. Our trading company also brings in money.
The future is very beautiful for us. We are developing a modern automobile garage. I am also looking at championing the course of a unifying union for automobile professionals. We are also developing a series of workshops. We are looking at bringing up ultramodern workshops on automobile management, equipping them and recruiting youths who would run them so that we can stop this guessing game for your vehicles. The days of guessing what may be wrong with your vehicles can now be over.
Because we deal with vehicles, we are an import-based business, even though we are just creating associations which will help us negotiate with local manufacturers. Because we are import-based, since the advent of the new government and the subsequent devaluation of Naira, our business automatically loses a lot of money because foreign currency is the unit of our purchase. Then, we retail in local currency. Due to the devaluation that started from the beginning of this regime, which we shouted against, we ran into difficulties. There are a lot of vehicles in the country and no money to buy them from us. It has also affected all other businesses. What happened to us is that this government promotes the idea that poverty is a virtue and that if you have money, you
are corrupt. That is really demarketing the country and in the course of demarketing the country, there are no resources to trade. There is a doubt in the market. Even you, as a journalist, know that your purchasing power has been drastically cut down. Other challenges include the cost of import duties being tripled by the Nigerian Customs. For example, vehicles that you should normally clear for N300,000, you now have to clear with N1.2million. Consequently, you as the importer have to pass the burden to the buyer. A vehicle you are meant to buy for N1m now becomes N1.8m.
We are hoping that there is a change. The present drivers of the economy do not understand what running the economy is all about. Every country that has developed in this world did under corruption. Corruption is not the problem and I keep saying that the challenge we have is infrastructure. Every developed country in the world has a small and medium scale sector running its economy. It is not the gigantic companies that sustain the economy because SMEs are there to provide jobs. There must be an empowered middle class. Not middle class of persons but middle class of enterprises that can drive economic growth.
What is the alternative in the present Nigerian economy? There is no alternative because all sectors are affected. Cocacola recently sacked 2,660 staffers. What does that tell you? There is a general downturn in the economy because the people running it do not understand it. China, Malaysia and South Korea, till today, are still jailing people for corruption.
For me, I have to dispose of some of my big assets to fund my business and keep it growing. I am being sincere with you and you can ask anyone else how they have been coping. Our economy has contracted and what you have to do now is innovate. We are setting up a new office now and trying to go digital with the business. Do you know that state governors hardly buy brand new vehicles again? They come
to us asking us to get them fairly used vehicles. This is campaign period and most of them have not even bought the fairly used cars.
I don’t take loans. I prefer to trade with whatever money I have. That is why some of us are not venture capitalists. I run my business the best way I can and ensure the growth is gradual and not astronomical. I have accomplished most of what a man of my age should have accomplished. The banking sector is not even as healthy as it used to be. I have written papers on the fact that we need to specialise our banks, rather than consolidate them. Nigeria doesn’t even have the funds to mop up.
Most Nigerians would tell you it is God but we take the God excuse too simple. The truth is in a situation is like this, you go to prudent planning and management. The margins with which you can sell a vehicle is not the same today. What you now do is ensure that your expenses level is curtailed. The truth is that our economy died long ago and this present government has largely failed.
This is where I look at the God factor. God has been faithful. We haven’t grown exponentially but gradually. We have always wanted to tell the truth and that is why we have championed raising associations to teleguide and build the industry.
Rome was not built in a day. I am saying that there are too many mushroom association of automobile dealers. Many of them are just lock-up shop associations. The story we usually hear about car dealers stealing cars away should now stop. If there can be Nigerian Union of Journalists, then we should have ours regulated too. I do my bit in the area of mentoring young business owners in different ways. Naming their name would be a joke. I have, in my way, mentored a lot of young people in business.
The first question is, “does government even have a policy?” This particular government derailed. How can you go about sharing money to people in the name of Trader Moni? What we should be do is look at the export trade and empower people to produce and export. You can ask, “can you build a small refinery that would serve a small community beside you?” If you can, get us a feasibility study. Why can’t we grow the Innoson business so we can have more cars produced in Nigeria? When Jonathan was in power, Peter Obi bought more cars from Innoson.
Jonathan too bought for Sure-P. It is when you buy for the Inner City Bus project in Abuja that the man from Ghana can see it and order 200 buses for his own city too. That is how to grow the economy. This is just one example I am giving among many others. Yet, we hope to earn foreign exchange.