Pedro: Transparent, Innovative Leaders Needed for Nigeria’s Transformation
Nigeria needs a set of transforNmative,
competent, visionary and transparent leaders who are willing to play according to the rules of wealth creation to revive the country.
This assertion was made by the former Deputy Governor of Lagos State, Mr. Femi Pedro when he spoke about his new book: “The Formula for Wealth: My Thoughts on Wealth, Entrepreneurship and Leadership,” at a THISDAY Life Forum that held online.
Pedro said the rules of wealth creation demand disciplined savings and investments in a transparent and ethically-driven manner, to create wealth and avoid the illusion of money that has buried many talented people and resourceful nations in poverty trap.
He averred that Nigeria would witness significant economic turnaround that could usher in prosperity if the country would emulate the level of corporate governance that was observed in the Guaranty Trust Bank (GTBank), when it was established.
“I can tell you today that anyone who can run a successful company over a long period of time and create real wealth can also run a country.
“Let me say this, and I am not boosting, in the years I spent in the GTB from 1990 to 1997, the bank performed very well and the reason for its exceptional success was that the leadership of the bank were transformative, competent, visionary and transparent.
“If Nigeria is governed the way we ran that bank in its first eight years Nigeria will transform. Trust me on this. So, there is a direct correlation between good leadership and good enterprise,” Pedro said.
He shared the opinion that Nigeria has been absolutely mismanaged because the country has not imbibed the culture and rules of wealth creation since, “the same reasons why people do not run businesses well are the same reasons the country is not growing.”
The former Lagos deputy governor also asked Nigerians to free themselves from money illusion and embrace wealth, which he described as income from one’s investment assets that could live from one generation to another.
His rule number one for wealth creation is that money is not wealth, but an illusion that diminishes in value while wealth is lasting and lives for many generations.
He also warned that money would disappear from those who lacked the knowledge of wealth creation.
He also averred that good education, intelligent and talent were not passports to wealth if one lacked the knowledge of wealth creation.
“Many people do not understand the fundamentals of entrepreneurship and therefore struggle with their businesses because they do not understand the rules of wealth,” he said, adding that power, political connection might lead you to financial ruin without knowledge of wealth creation.
He emphasised that character and integrity are essential for wealth creation, noting that the root cause of corporate ruin is lack of character.
According to him, “Nigeria will become great if it learns the rules of wealth. A nation without leaders with character and integrity will hardly prosper.
“This COVID-19 has exposed our vulnerabilities and showed that many of us are truly in poverty trap. We locked down for three months and people, businesses and the country were struggling for survival.
“But countries that withstood the chock and even paid palliatives to the citizens are those that saved and invested wisely.”
Pedro talked from personal experience and said: “The first wealth I made in my life was my N200,000 investment in the GTB in 1989. I was also employed as a senior manager of the bank.
“The bank went from a private bank to public quoted company after its first six years and my N200,000 became hundreds of million naira. This is from one investment. I left the bank in 1997.
“In 1998, I teamed up with others to acquire Comet Bank (that we transformed to First Atlantic Bank). I owned 17 per cent and became its managing director. What is more entrepreneurship than that? So, I was already financially secured by the time I became deputy governor of Lagos State.
“The essence of wealth creation is that your money works for you. My investment position shrunk within the four years I spent as deputy governor by over 40 per cent because I didn’t have time to focus on it. I didn’t make a dime from public office. Not even a piece of land,” Pedro said.
He also advised Nigerians to shun network marketing schemes that promised to offer returns that are far above market rate and embrace sound investment principles under the guidance of competent investment advisors.
Pedro, who was also former managing director of the First Atlantic Bank, warned: “Trust me, network marketers are setting people up to fail. Yes, it looks sweet and doing well but the day of reckoning will come because the people behind it are not regulated. They are not transparent and nobody is going to hold them responsible.”
He advised investors in the stock market to go for the blue chip companies in order to protect their investments, adding that “people that lose money in the capital market do so because they do not use experts. They tried to do it alone. You need an investment adviser. Between 1988 and 2002, I had two investment advisers that I relied on.
“If you want to hedge your risks your investment adviser will tell you. Some stocks are called bluechips because they have been around for a long time and survived hard times and are still thriving. That is why they are blue chips and their stocks are high. You are not likely to lose your investments with them.”
He also asked those that are averse to equity stocks in the stock exchange to look for private placements in firms that are not yet quoted in the stock market.
“In 2001, I was opportune to be part of a consortium that took over the then Ikoyi Hotel and converted it to Southern Sun Ikoyi Hotel. That is private equity and the return on it is far more than I could have received if I had put my money in the stock exchange.
“There is risk everywhere. There are years of prosperity and years of losses. But the people that ride in this market are people who stay through this period. The problem with most of us is that we go in, see a little problem and ran away. Investors do lose money but if they persist they will definitely win more than they will lose.”