Developing the social sector in Nigeria

21 Jul 2016, 12:00 am
Olajide Olutuyi


Social enterprises may be the vehicles to accelerate change in the economy.

Nigerian social entrepreneur, Ndidi Nwuneli

A country with a myriad social ills deserves a vibrant social economy that can solve its social problems. Nigeria needs innovative and creative social entrepreneurs to revive the country's social economy and address growing social difficulties.
I heard the term “social enterprise” for the first time a couple of years ago, when I sat on the board of a mid-sized charitable organization in Calgary, Canada. In an effort to raise the charity's dwindling funds, one of the board members suggested that we set up a social enterprise to generate more revenue. Since then, I have monitored events within the social enterprise sector and its impact on society.

Central to the mission of social enterprises is the improvement of human and environmental well-being. Social entrepreneurs identify social problems and find innovative solutions to the problems. The sector is still developing and as such there exist variations in the definition of the concept of social enterprise. Nevertheless, the universal thread that runs through all the proposed definitions is that social enterprises are businesses that make social impacts on society.

But as the definition varies from country to country, so also does the structure differ across countries. And until recently, there has not been proper legislation for social enterprises. Legally, there is no businesses form that is called social enterprise.

Regardless of how it is structured, the social enterprise business model is unique in its combination of financial and social objectives. Social enterprises may be the vehicles to accelerate change in the economy, while providing jobs and reducing income inequality.

The Nigerian federal government recently launched its N500 billion social investment programme that involves direct cash transfers of N5,000 monthly to one million beneficiaries in poor vulnerable households; school feeding of 5.5 million primary school children; training of 500,000 graduates as teachers and 100,000 non-graduates as artisans; and other special intervention projects. And the question on everyone's lips was how this projects will be carried out without a database of potential beneficiaries of the programme. But if the country had a vibrant social enterprise sector, some of these funds could be channeled through credible social enterprises.

The scale of social and environmental ills in Nigeria is alarming. There is a high rate of poverty; high rate of out-of-school children; poor healthcare system; proliferation of fake drugs; poor waste management practice; a large housing deficit; poor electricity access; among other social issues that have health, employment, and financial inclusion implications. All these present huge opportunities for social entrepreneurs whose innovation and intervention solutions can stimulate economic revitalization.

Social enterprise is attracting a lot of attention around the world as a great way to make the world a better place. Recently, the province of Manitoba in Canada launched its Manitoba Social Enterprise Strategy tagged: “A strategy for creating jobs through social enterprise.” The 28 page document emphasized the importance of social enterprises to Manitoba's economy. In November 2014, Nova Scotia, another Canadian province drafted its Social Enterprise Strategy framework. The document highlights the strategy and framework needed to grow the province's social sector.

In Ontario, a province where social enterprise is thriving, the provincial government has continued to support the emerging sector so they can continue to make impact. Since 2007, the Ontario government has invested more than $6 million in the SIG (Social Innovation Generation) programme. This programme supports social entrepreneurs at all stages, helping them to develop and deliver programmes that accelerate the growth of social enterprises.

The Ontario government believes that social enterprises represent an exciting emerging sector, one that attracts investment, creates jobs and helps better the society and the environment. In the United Kingdom, government data estimates that there are approximately 70,000 social enterprises in the UK contributing £18.5 billion to the UK economy (based upon 2012 Small Business Survey, 2013).

Some of the areas where the Nigerian government can support the development of this emerging sector are:
•    Provide support in the setting up of a social enterprise association that will provide a centralized database and network for social enterprises.
•    Public policy can also help social enterprise development by establishing clear legal definitions of social enterprises in order to govern issues such as their tax treatment or access to public markets.
•    Inserting social entrepreneurship within entrepreneurship education activities in schools, vocational education and training colleges and universities, is an important way of encouraging further development of social economy and enterprise.
•    Provide sustainable finance to assist social enterprise from start-up to scale-up
•    Create a Ministry of Community Economic Development – and assign to it an office for the social economy which will be responsible for making cross-ministerial policy changes. It will also be a one-stop governmental office for social entrepreneurs.
•    Establish suitable mechanisms for monitoring, impact measurement and evaluation.
•    Invest and support Social Enterprise Research to conduct cost benefit analysis and quantify the value of social enterprises that employ people.

Jurgen Nagler made a strong case for social enterprises in his paper, “The importance of social entrepreneurship for economic development policies,” to the University of New South Wales, Sydney. He wrote thus: “Social enterprises should be seen by policy makers as a positive force, as change agents providing leading-edge innovation to unmet social needs. The recognition of Muhammad Yunus and the Grameen Bank with the Nobel Peace Prize 2006 for “their efforts to create economic and social development from below” (Nobel Committee, 2006) is a first step towards recognizing social entrepreneurs. Economic development policies should foster entrepreneurship in general and especially when entrepreneurs take on social problems that the private for-profit and public sectors do not address or niches they overlook.”

One of the profound economic development benefits that social enterprises provide to society is that, often, their services are directed to the very poor. While the private sector uses financial return on investment to measure its success, non-profits traditionally report on social return on investment. Social enterprises, however, measure success with what Jed Emerson stated more than ten 10 years ago as a blended-value bottom line, a conceptual framework for advancing a system of value creation that integrates both financial return and social impact.

Olajide Olutuyi, a Financial Nigeria Guest Writer, is a graduate in Management from the University of Lethbridge, Canada. He is Founding Partner, Greentouch Consulting Inc.,Canada. He is on the Board of Calgary Quest School, Canada. Twitter: @jideolutuyi