By John Amoda
ELOHO Otobo’s piece titled “Africa’s Three Futures: Which beckons for Nigeria? prompted my positive appreciation in my Vanguard’s Tuesday column of his prognosis titled “Which of the Three is Nigeria’s Future?”

In this follow up essay, I contrast the conceptual forecast by Otobo of the best case scenario with the possibilities discovered by international businesses in the Nigerian market.

Otobo had argued by inference that countries that are stable, organisationally competent and well equipped in scientific and technological capabilities offered the best chance for wealth creation for its population.

In contrast to the above, argues Otobo, countries characterised by stability deficit, organisational deficit and scientific and technological deficit stood lesser chance in attracting investments, both local and international in furtherance of wealth creation. Logic justifies such conclusion. But economic behaviour of business firms in Nigeria suggests a difference between logical inference and rational behaviour.

Logical inference is always that of constructed games and is a function of assumptions of contexts and conditions set forth by the creator of the games. Games are of heuristic relevance and their conclusions can be factored into business decisions. Business decisions are however informed by profit-making rationality.

Risks that are identified as unacceptable in forecast games may in real world situation be acceptable if they make profit sense. Profit sense not logical conclusions is the business rationality. And some of the activities of investors in the Nigerian market support this observation. Let us examine some instances.

Vanguard of Monday, December 20, 2010 headlines a story by Patience Saghan “Nigeria remains Africa’s best for business, profit-Ford”. We quote the following from Patience Saghan’s report:

“Some foreign investors eyeing the country have described Nigeria as the best country in the whole of Africa to do business and also to make profit stating that the country is still the safest and largest market for Foreign Direct Investment (FDI) in the continent. Mr. Mike Crowky, Director (sales) for Ford Motors commended Nigeria for breaking new frontiers in partnership with foreign counterparts…

He said “Nigeria is the most important market for Ford in Africa. It has a very large population, has a very big environment for market. Coscharis Motors is one of our best partners in Africa, this facility is a demonstration of their commitment to our goal. Nigeria is the market place to come to first”.

The above is the description of Nigeria from the context of the market. Nigeria as the market place foreign direct investment is starkly different from Nigeria as the object of sovereignty politics.

The headlines that describe the unsettled process of politics in Nigeria seem to lead to the conclusion that Nigeria is characterised by security deficit, and therefore by stability deficit. Yet what international firms like Ford see in Nigeria is a market holding forth opportunities of profit that make Nigeria’s security deficit an acceptable condition and context of prospering international commerce.

Profit concerns seem to override security considerations and in a way it can be said security deficit is accounted as cost in the calculation of profit margins. These comments perhaps are explanations of the presence of International Oil Companies in civil war and insurgent conditions such as Iraq and Nigeria’s Niger Delta.

Indeed, it can be argued that most African government’s count on profit- making to drive FDI in their country’s economy. Thus, security deficits that ordinarily should make countries thus disabled unattractive to international companies are given less attention by African politicians who count on the prospects of profit to motivate FDI stakeholders to adjust to the high level of insecurity as one of the costs of doing business in Africa’s emerging markets. Professor Bath Nnaji, the Presidential Adviser on Power gives the following illustration why Nigeria’s markets continue to be attractive in the ICT and Oil and Gas sectors.

In an interview on the policy informing reform of the power sectors Professor Nnaji declares the policy intent of reform:

“People are not losing their jobs in this process. It is not about loss of jobs, but rather we expect that anybody who is competent would be there and earn more money in the final analysis. So, what is it that we trying to achieve? We want to grow from something like when Nigeria had over 400,000 lines (telephone lines to the present level where)…

We are talking of about 70 million subscribers and phone in the hand of everybody in the villages everywhere. You now have a situation that you do not have to queue up to get your telephone and if your credit runs out, you can replace it.

We want to do the same thing in power… by the transaction process we mean the bringing in the core investors into the generation and distribution.”

From the above we have an insight into the world of government and business, national and international.

These two partners, governments and international business, seem to plan and operate in the context of security and stability deficits and the uncertainties these generate. Exponential growth in markets like those in the telephone subsectors provide high motivation to doing business sometimes under punishing security constraints.

These remarks do not vitiate the recommendations made by Eloho Otobo in his 3 –Future Model of African economies. They show however how the private sector adjusts to constraints because encouraged by high profit-making incentives.

The Wikileaks disclosures actually show how powerful the profit incentives are in shaping business decision making and how firms create their own enabling environments with improvised security that compensates for host government deficits.

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.