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 “Nigeria heading towards Zimbabwe’s situation with the proposed e-naira” -Cranstoun Corporation founder

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 “Nigeria heading towards Zimbabwe’s situation with the proposed e-naira” -Cranstoun Corporation founder

Mrs Rewa Udoji, the founder of Cranstoun Corporation, a global equities fund, domiciled in British Virgin Island, in this interview speaks to FELIX OLOYEDE, Publisher, Businesslive.ng, on her decision to set up her company in a tax haven. She also x-rays the likely impact of the proposed introduction of the e-naira by the Central Bank of Nigeria (CBN).

How well do you think the proposed e-Naira would impact the Nigerian economy positively?

I think we’re already facing a liquidity crunch here. If you have dollar deposits in your dorm account and you want to take out your money, I’ve seen this firsthand, there is significant difficulty with that if it is above a certain amount. For me, it is worrisome on many levels. Having lived in Zimbabwe in the past five years and witnessing the introduction of an e-currency firsthand, I think we’re heading for a disaster with the introduction of e-naira, because you will just wake overnight, and you are not able to access your holdings.

The CBN has tried different measures such as the N5.00 for a dollar to encourage remittances, currency swap with China, to stabilize the naira, etc., but it seems all these have not had the desired impact. What is it that we are not getting rightly?

The Reserve Bank of Zimbabwe employed several measures some of which you just echoed, prior to the introduction of the e-Zim dollar. On what we have done wrongly, I think we lack technocrats governing our system. I think the government is myopic. Whenever there is a new enterprise in town, they stifle it. I think there is a need for an overhaul of the ruling party. There is no technocrat in this country. What I see is a lot of nepotism. We hire people who do not understand the nature of the jobs they have been asked to do. I do not think we are clear on any fiscal or monetary policy in this country. I do not think we are clear on how to create hubs to allow new areas of enterprises like tech to thrive. Look at how heavily we are taxing fintech. Fintech has been one of the growth drivers of the American market. We should see that here and allow this business to thrive, but instead, we tax them heavily and create rules that stifle their enterprises. When you have such rules, I do not see how such an economy can thrive.

Those in government argue that Nigeria has one of the lowest tax rates. How do you juxtapose that with your claim?

It is not just about the tax rates. A friend of mine owns a fintech company. They had to go and acquire a microfinance banking license to be able to receive funds from existing clients. This is what I feel their governing body woke and in a matter of weeks, this was rolled out, giving them no chance to review it and consider how to execute it. It seems to me that policies here are not thought through. What is at the forefront of their minds when policies are formulated is actually how much the government can make from this endeavour, not whether is good for the wider economy. That is my opinion.

What is the difference between the e-naira and cryptocurrencies that were banned?

Crypto, I mean the general ledger is very safe, transparent and it is not governed by any person. There is a limited amount of cryptocurrency that can be created. With e-naira, do we have the same amount of transparency and governance around it? I am not sure. Crypto is widely tradeable and convertible. It is used by several institutions. E-naira adoption I do not know what it will look like. Will you be able to pay for a ticket with British Airways with the e-naira? What happened in Zimbabwe was a lot of airlines stopped accepting the e-Zim dollar after it was introduced. When you pay them with e-Zim dollar, they were unable to take it back to their home country. I think the e-naira and crypto are worlds apart.

The IMF recently called for greater regulation of cryptocurrencies. What is your take on this?

I think it is necessary because a lot of coins were popping up. There were some like Dutchcoin. That Elon Musk will tweet about Dutchcoin, overnight its price will just soar. There is definitely a need for regulation because becomes like a gamble especially for the millennials who want to make fast money. I think there is a need for more regulations to allow more time for people to become aware of what they are buying. People just hear crypto, it used to be $10,000, now it is $20,000. They just want to make money quickly without fully understanding the asset they are purchasing, which is very necessary.

What informed your decision to register a company in a tax haven?

At the time of considering setting up my business, I was using my personal savings to do so. So, I shopped around. I was working with a company that has an interface with Mauritius. So, I got to know of a few of the Mauritius funds.  I got advice from them on which jurisdiction was suitable for my purposes. I looked at the US, British Island and few others. The price point was key for me. The British Island was suitable for my purposes. I went to the country. I got the vendors I was planning to use. I met with some of the regulatory stakeholders. I made my decision based on pricing at the time.

How has your experience been?

It has been very good. I have no issues once I make my filings on time. It is working perfectly well for my purposes. I know there is a sentiment out there that once you say offshore (investment), people are already thinking of money laundering. There is a negative perception people attach to Cayman Island, British Virgin Island, etc. They think you are hiding money. That is not always the case. I run a very transparent business that is domiciled in BVI (British Virgin Island). It is like anything. Some people will use it fairly or for a foul.

Do you have a business in Nigeria?

No. The thought of it makes me sick. All the red tapes that surround opening a business in Nigeria make me physically weak. I do not have the energy to withstand them.

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