Do the private enterprises in Nigeria have blames for the prevailing economic disruption in the country?

There have been a lot of public outcries on the prevailing economic conditions in the country; incessant increase in the prices of virtually all goods and services (i.e. inflation), unending volatility in the value of Naira compared to foreign currencies like US Dollar, UK Pound Sterling and Canadian Dollars (i.e. FOREX), rising rate of unemployment, and uncontrollable insecurity, to mention a few.

Heaps of the blames, outcries, insults, frustration are put on the inability of the federal government to tame the so-called evil. Noticeably from social media, few blames go to the state government and local government while none is pushed unto the private sector enterprises – big or small. Do we then concur that our powerful businesses in the private sector are ‘absent-players’ or ‘shadow players’ in the economy? In my opinion they must belong to either, if they choose to remain inactive in the space of macroeconomics.

To start with, the main goals of the government of any nation are; (a. maintain a stable price that leads to minimal or no inflation, (b. ensure full employment or reduce unemployment to the bare minimum, (c. maintain positive or robust balance of payment accounts or reserves, and (d. ensure economic growth that reduces inequality and propels development. These macroeconomic goals are implemented with the deployment of policy instruments such as fiscal policy (government budgets, taxation, subsidy), monetary policy (interest rates, FOREX, inflation) and direct controls (price controls, tariffs, excise duties).

What are the expectations and collaborations of our private sector enterprises regarding these goals which are driven by productivity, investment, savings, and consumption? Which of the players in the economic circle should lead the growth, private sector or the government? It is pertinent to draw instances from advanced economies like USA, Germany, France, China and emerging economies like Singapore, Indonesia, South Africa, and India. Who leads the transformation, restructuring and productivity of their countries?

We have heard several arguments from the proponents of a private sector led economy (likes of NECA, MAN, NACCIMA, etc) that the government has failed to adequately incentivise private sector enterprises, failed to provide appropriate infrastructure, Nigerian firms are hampered by multiple and complex taxes, bank interests are unaffordable, government loans through the bank of industry, bank of agriculture and allied institutions are not transparent, and all sorts……

However, have we asked the questions on how our private sector enterprises, both the local and multinationals have explored the benefits of social capital in their domain? How are the well-connected firms have utilised resources given to them by the government to improve their business needs, relationships with their employees and their host communities? For examples, export grants, concessional duties, tax credits, import licenses, tax waivers, CBN concessional loans, road-construction for tax-credits, etc. Where is that trust and obligations on their part (i.e. the relational social capital).

How good are the strategy deployment of our private sector firms’ corporate responsibilities or corporate shared value at this point in time and reflecting from COVID-19 disruptions? What key roles have they played to impact economic value apart from protecting their nominal profits, cashflows and financial assets? Are their position on short- or long-term profitability, revenue growth, assets value in concomitance with the growth strategy and projections of the country in terms of entrepreneurship, capacity building, technology development or is it all about commercial profits, return on equity?

We are now at the moments of reality in Nigeria. GDP growth & GDP per capita are declining, average annual inflation is on astronomical increase, gross external reserves are fast depleting, capital importation is on continuous reduction, Naira is being devalued day by day and total debts is on the increase. What roles do you expect our private sector enterprises to play, so that we stop putting all the blames on the public sector management?

From my point of view;

?? Multinationals and big local players in the manufacturing, exploration and extractive industries should review their staffing structure and its attendant compensation. They should look inwards for local competent technical expertise and save millions of US Dollars in repatriation.

?? Review of pricing strategy to accommodate ‘optimal’ profit rather than product/service ‘profiteering’. There is no pride in declaring excessive profits in the midst of consumer-poverty and quality-inequity. The magnitude of profits from our banking institutions and mega FMCG industries are alarming while huge disparity between premium and standard products is visible. Magic price points have been grossly eroded. No more intermediate products for the poor except the 'passing-off'.

?? Our private sector firms should avoid cutting corners with the banks. Some of them buy FOREX at 100% official rate and thereafter pay black market premium outside the bank. Loan contracted must be utilised for its purpose.

?? Corporate politics and diplomacy should be played with ethical considerations and value for money. Our private sector firms should play the game by its rules and avoid courting for undue favouritism that attract avoidable costs to consumers and the society.

?? Why looking inwards, private sector firms in Nigeria should think global but act local. It is a must for them to explore opportunities of raw materials and human capital in the country, invest truly in modern technology and technical competence of their staff. They should initiate intrapreneurship culture within their industrial sectors to grow the economy. Can we learn from what Microsoft, Apple, Amazons, Google, etc are doing to exploit the power of intrapreneurship?

?? Finally, these firms should create shared value for their host communities and the government by cutting their cakes bigger and leave the remaining ones to other stakeholders to share.

What other points of view do you have? Please contribute!