Non-access to government, greatest challenge facing business – NECA DG
By VICTOR AHIUMA-YOUNG
THERE is a general consensus that last year was very difficult for businesses in Nigeria arising from government policies among others. Director- General of Nigeria Employers Consultative Association, NECA, Mr. Olusegun Osinowo, in this interview with Financial Vanguard, said in the past four years, the same trend has been responsible for this business operating environment in Nigeria and declared among others, that the diminishing access to government has been the greatest challenge facing businesses in Nigeria. Excerpts.
A lot of employers complained of harsh operating environment and other challenges in 2012. As someone who speaks for the employers, how bad was 2012?
Well the situation of things now as far as the economy is concerned, most importantly, over the past three to four years now, is such that the complaints of employers, the agony of employers, have become repetitive. When you talk to most operators in this environment, whether entrepreneurs or organisations like ours created to speak on their behalf, you will find the common trend and this is the trend of poor state of infrastructure in this environment, the difficulties in accessing credit and wrong regulatory policies. If you take time to go back into the past three to four years, you will find out that those things I have mentioned have been coming up in most comments.
So for us, 2012 was not in any way different in terms of the hardship most businesses went through when compared to previous years. In that case, whatever improvement anybody might really want to claim, that this economy has experienced from statistical perspective, it cannot be actually justified on the basis of the reality and facts on the streets and as it relates to both businesses and individuals in this country.
For us, we are still not out of the woods and we have to be careful in celebrating what I will call little successes that are not too impactful on the business environment. There is a lot to be done, whatever improvement that must have occurred in terms of the infrastructural base for this country, whether from the perspective of power supply, I just want to believe that we are just celebrating little successes. I did not see that carrying us forward significantly in our quest to be one of the 20 top economies in 2020 because these little successes will not really take us there.
What we should really be asking ourselves now is how many new businesses were created in 2012 and how many new jobs? When the Americans are talking about their progress and successes, they come out with statistics that are empirically based to justify what they are saying.
They go beyond the standard measurement of their GDP growth rate. When Obama gets on the TV to talk; he talks about the number of jobs that have been created in the last quarter, not even in the last one year. He talks about new businesses that have come on stream in the American economy.
If we are to be among those top economies, we should adopt the same standard in trying to measure our successes. We should not hide behind the generic GDP growth rate of 7 per cent. Because when we talk about the GDP growth rate of 7 per cent, what about the poverty index in this country, what of the unemployment rate in the country, how do we explain that?
So, honestly speaking, we are just celebrating little successes. We need real and big successes that would generate jobs; that would lead to the emergence of new entrepreneurs, new micro businesses and small scale businesses that are striving. These are the things we should really be looking at.
What can you say was the single major challenge you encountered in 2012?
As the voice of business, access to the government is very important and even the International Labour Organisation, ILO, has recognised this in its decent work country programme. If you take time to look at the ILO decent work country programme, you will find out that the ILO has actually identified social dialogue as one of the pillars of decent work and sustainable enterprises. I think we are beginning to find a situation where the gap between business and the government is widening by the day. What the government has been identifying as the voice of business is not necessarily the voice of business.
So, for us in 2012, our biggest challenge really was the diminishing access to government. And with the diminishing access to government, it will be extremely difficult to put across to the government the key challenges that your members and the enterprise are having.
The government will rather listen to some other voices. For us as a business member organisation, that is very important and you connect that now to the various challenges that businesses are experiencing. If we that are recognised as their voice cannot have access to the government, it means that we will not be able to convey their challenges and complaints to the government on an on-going basis and to be part of the government policies and formulation processes.
Let me say that identifying one Business Member Organisation, BMO, in Nigeria or one key personality that has made a success of their enterprise as part of government committee is not what we are talking of. Again, the problem we are facing in this environment is that we do not have custodians of institutional memory as to how the organised private sector had related with government over time, which has been to the benefit of this economy. What we have now really is a situation where probably people look to the private sector and can only identify one or two successful businessmen, get them into key committees and assume that they are talking to the private sector.
We need to go back to the dispensation where representative organisations of businesses are involved in their entirety in the process of policy formation and articulation. So for us, the biggest challenge facing us as at today is the diminishing gap of dialogue platform between us and the government.
If you recognise the fact that institutions and right policies are keys to the development of any economy, and the involvement of the stakeholders in trying to make sure that they have their own input to building pillars for those institutions and the outcome of those policies, the government has not actually done pretty well in carrying along the key stakeholders which is the organised private sector in this environment.
From what you have seen in the 2013 federal budget, do you think there are better days ahead for businesses in Nigeria?
Let us backtrack and look at the budget 2012, and the question we should be asking ourselves is, what practical impact can we actually identify in the economy on the account of the 2012 budget when compared with 2011? The whole essence of resource utilisation is to promote meaningful growth and development, inclusive growth and development.
Now we are talking about a trillion size budget, just like we had last year and when you move around on our roads for which budgetary provisions were made, you cannot actually feel the reality of the money that actually have been spent on those roads. How do we explain that? I am just using that as an example that probably we need to start looking at the efficiency and the effectiveness of the money which we budget for projects.
That is one. Two, are we actually getting utility for the size of the budget we are articulating? So, beyond looking at the budget and the size, somewhere down the line, there should be a kind of reviewer or auditing. If this much have been spent or budgeted for these, what kind of utility have come out of such actions? We need a different approach to that. I think we also need to look at the profile of the budget itself in terms of the percentage of the funds going into capital expenditure and that of the recurrent expenditure and ask ourselves whether that profile is a profile that
will promote the development of the economy.
If you are spending the lager part of your resources on recurrent issues, there is no way you can move forward. Please don’t get me wrong, I am not saying there might not be some justifications for that size of fund provided for the recurrent expenditure. But anyone that has slightest knowledge of economics will know that in a situation where the chunk of the money you have is going into transactional issues, that takes us to the theory of money where at any point in time, the money you have on hand is spent on transactional issues, speculative issues or contingent issues.
In fact, as an individual, the chunk of money you collect on a regular basis is going into buying food, paying your house rent and paying school fees and things like that. Those things are needful, you have to pay for them. Things like settling hospital bills and sending money to your aged parents and you don’t have anything left to invest, then, you are compromising your future.
You are living from hand to mouth and if for any reason you go through a major crisis in life, let us say you lose your job, I am just using that as an example to point out the folly in the kind of budget we have. So, somehow you lose your job, where will you get the fallback to see you through the raining days or the crisis period?
Which is why in spite of the dispositions of the governors, one should praise the Federal Government for creating the sovereign wealth fund because the ideal is that we are not going to always have the oil windfall. In fact, based on the cyclical nature of the world economy, hard times will surely come. So, we need something to fall back on.
But in terms of development, just like an individual who has used part of his capital to build his own house, or to provide for extra income, he can fall back on it in the time of crisis. We need to look at the profile of our budget again completely and make sure that the chunk of the money is actually meant for capital expenditure.
Beyond the issue of capital expenditure, the efficiency and effectiveness of utilising the amount that have been so budgeted to ensure that we derive utility from it, that is extremely important. I can give you example on that. Take the Benin-Ore road, for goodness sake, how many times are we going to repair the Lagos-Benin-Ore road?
If the challenge we are having has to do with the climatic region we belong to, then in constructing the road, why don’t we look for those who actually have the knowledge in building roods that will be durable and tap into their technology in trying to build ours so that this will not become a perennial issue?
This year, the government is spending billions of naira to repair the road and two years after, they are going back to it. I think there is something simply wrong somewhere. For some of us that we have the privilege to be on ground for this while even before the present dispensation, I could remember the old Lagos-Ikorodu-Ijebu-Ode road which we used to ply when I was in the secondary school in the then South-West.
The old Lagos-Ikorodu before the Expressway was constructed, which was constructed by the Obafemi Awolowo regime. That road, the basic foundation is still there up till today. Forget about whether there are now port-holes or that. But in terms of the foundation, that road is as solid as it used to be. Of course, it may not be in the same climatic region as the Benin-Ore road.