Oguche Agudah, Chief Investment officer, Natanel Florens

Follow Oguche Agudah

View Profile


Subjects of Interest

  • Development Finance
  • Finance and Investment
  • Fiscal Policy
  • International Trade

Running Nigeria as business will be good for the people 17 May 2019


Nigerian Vice President Yemi Osinbajo

During the Vice-Presidential debate, which held in the run-up to the 2019 general election in Nigeria, Peter Obi of the People's Democratic Party (PDP) and Yemi Osinbajo of the All People's Congress (APC) had a few exchanges that were widely reported in the mainstream and social media. In one of such exchanges, Obi said, "You cannot shut down your shop and be chasing criminals,” referring to the anticorruption campaign of the administration of Muhammadu Buhari. Osinbajo responded, saying, “If you allow criminals to steal all the inventories in the shop, there will be no shop.”
    
It is interesting that the presidential running-mates, Peter Obi and Yemi Osinbajo, likened Nigeria to a shop during their debate. However, what would be most beneficial for the Nigerian state is for the political actors and leaders to go beyond the rhetoric to begin to run the nation as a business entity. We can call this business entity Nigeria Incorporated or Nigeria Inc, for short.

This article attempts to explore the question of what Nigeria would look like if it were a business. What are those things we would need to do to get Nigeria to be run as an efficient, profitable and growing business concern?

The following are a number of conditions that have to be met for the country to utilise its resources efficiently, optimise policymaking and achieve its full potential, including human development:

1.    Profitable divisions and subsidiaries: Every business was set up to meet a need, make profit and deliver value for its shareholders. Now, value does not necessarily have to be monetary. But a business is expected to deliver maximum returns on the investments put into it.

It is usual to structure a large organisation into divisions and subsidiaries. The units that are not providing value become liabilities and they may eventually be liquidated. In Nigeria's case, we can liken the divisions to the various states. Are all the 36 states fiscally sustainable? In other words, can their revenues cover their costs? If not, what needs to be done to these “divisions” to ensure their continuing viability or justify their continuing existence? If a company cannot survive if its divisions are continually turning losses, year in, year out; Nigeria's development will be subdued if the federal government continues to bail out some states.

2.    Competent CEOs: If you were running a business and had various divisions, you want to be sure all those divisions are manned by competent individuals who understand the vision of the organisation and are working towards the organisational goals. In Nigeria, competency is usually not a criteria when we elect officials to run this “shop” called Nigeria Inc. This is why governance at all levels is suboptimal.

We must begin to support candidates with technocratic competence and those that can articulate sound economic visions to advance the nation. We must also have a process of ensuring that there is a minimum standard for appointing and evaluating the heads of our various ministries, departments and agencies.

3.    Corporate restructuring: If it's not working, change it. Organisations carry out corporate restructuring exercises to ensure that they are fit for purpose and they are primed to deliver the organisational goals over the long run. It's not unusual to see companies selling off some unprofitable divisions, collapsing some roles, creating new roles, or changing their governance and administrative structure. Organisations often need to be restructured on account of changing market realities or to forge new strategic directions.

In Nigeria's case, we need to ask: Is our current structure fit for our current purpose? If Nigeria were a business, and we consistently are unable to fund the budget and meet the social and security needs of the citizens, should we not think of restructuring our “shop”?
        
The main goal of restructuring Nigeria would not be simply about giving states the rights to have control over the exploitation and management of their natural resources; rather, it should ultimately be for the achievement of nation-building and sustainable development of the Nigeria people.

4.    Corporate governance: The best run publicly-quoted businesses in the world are built on a culture of innovation, transparency and accountability. They have quarterly reports that show how well they are doing in relation to their set goals; they have regular shareholder meetings where shareholders come face-to-face with the management and board; they have periodic external audits, in-house audits and compliance teams. Nigeria should set itself up to run along these lines. The chief executives of the nation and states, i.e. the president and governors, respectively, should give regular updates on the state of the nation/respective states.
    
There should be periodic town hall meetings and states should submit themselves to certain metrics for measuring their performance. Information on all contracts above a certain threshold should be disclosed, including the amount of the contracts, the names and directors of the companies executing the contracts. This way, the “shop” called Nigeria Inc. will begin to operate according to the tenets of a well-run organisations.

5.    Corporate culture: Every company has a corporate culture. Various companies have a set of values that define them and define how others perceive them. You would often see a number of companies say in their mission and vison statements that they are responsive, creative, bold, pioneering, service-oriented, etc. The best companies are the ones that live out these values and ensure that their staff imbibe these values, creating a culture in the process.
    
We, thus, need to ask: What's Nigeria's corporate culture? What's the first thing that comes to your mind when Nigeria is mentioned? Does the Nigerian state have a country-wide culture of service? Is it responsive to the needs of its citizens or customers as the case may be? Does it anticipate their needs? Is it constantly adapting policies in an ever-changing – and competitive – world? Does the Nigerian state have an enduring value it stands for? The answers to these questions immediately point out how weak or strong our national culture and values are. If the Nigerian state wants the citizens to have an emotional connection to it, it must design and instil a strong culture, underpinned by service to country, discipline, respect for human rights, accountability, among other positive values.
    
Some will argue that we can't and shouldn't compare a country like Nigeria to a “for-profit” organisation. The basis of their argument is that the metrics for assessing success are different for countries and corporate entities. While that is a somewhat valid argument, the debate is not strictly about the ability to make profit but to be able to achieve certain goals and objectives. This means we can have a discussion about Nigeria being able to meet its human development goals, for instance. And there could be other national goals. Even not-for-profit organisations must be run efficiently in order for them to deliver the goals for which they were set up.
    
Every business exists for its customers and not the other way around. The biggest change any business will make is to ensure that its focus is always on meeting and exceeding current and future customer needs. The Nigerian state must begin to focus on its customers – that is, the growing number of citizens. Governance outcomes will only begin to improve in Nigeria when elected officials begin to put more thought into the social contract they have with the citizens. There would also be a higher level of patriotism and social harmony when the state recognises and meets its obligations to the people.