People & Money

The Political Naivety of Corporate Nigeria

You Can't Entrepreneur Your Way Out of Bad Governance - So Why Does Nigeria’s Private Sector Stand Aloof?

It is one thing to innovate around poor infrastructure or lack of environmental capacity, but when it comes to policy consultation or constructive policy criticism, Nigeria’s organised private sector always seems to be missing in action.”

Within a few hours of the CBN’s latest policy brainwave, the emails started coming in.

At least 5 different fintech platforms using cryptocurrency-based settlement or payment solutions wanted to let me know that the almighty regulator had spoken their entire business model into overnight obsolescence, and they could do nothing but comply.

“Hi David, please be informed that we are weak and powerless small fish who exist at the mercy of the Nigerian state and whichever side of the bed it woke up on this morning. Do bear with us while we cross our fingers and hope really hard that it will change its mind. Best regards.”

A few others proudly let me know that they had found a convoluted hack for the problem. “Hi David, sequel to the latest brainfart decree from the Central Bank of Godwin Emefiele, we wish to inform you that unlike our competitors who have shut down their operations, we are able to keep offering a skeletal service to you by routing it through Zanzibar, taking a detour through the British Virgin Islands, stopping to pick up a Payoneer account somewhere in Ukraine and offering our left eyeballs as a burnt offering to His Royal Godwinness in Maitama. Please keep using our service until he issues his next command. Awesome regards.”

Once again, there was no hint of any pushback or consultation on a universally unpopular and nonsensical regulatory action. Just resignation and the usual rigmarole of trying yet again to innovate around an artificial regulatory obstacle that has no logical reason to exist in the first place. It is one thing to innovate around poor infrastructure or lack of environmental capacity, but when it comes to policy consultation or constructive policy criticism, Nigeria’s organised private sector always seems to be missing in action.

Where are Nigeria’s billionaires and blue-chip businesses? Where are the policy lobbies?

When I worked in corporate public relations, my boss often used to make the point that Nigerian corporates generally have a very limited and somewhat semi-literate understanding of what exactly PR is and how it can help a business. 

Whereas they understood it primarily as basically “soft advertising,” often lumping it into the same budget with everything from experiential marketing to broadcast spend, PR also had a very important albeit seldom-used function – lobbying.

The concept of lobbying is not a novel one in Nigeria, but the major problem with how it is done here is that it is – for lack of a better expression – extremely crude. On both the client and regulatory side, “lobbying” in Nigeria is understood as a murky activity involving lots of skullduggeries, cash bribes, gifts, and favours, with a side of buxom young ladies and expensive hotel rooms.

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For that reason, the idea of lobbying in Nigeria’s corporate imagination is that of something to be avoided if possible. Many businesses seem to want to operate in a vacuum with as little interaction as possible with the government.

The reason for this, of course, is that Nigeria’s government is often overtly adversarial to private business entities, making sure to shake them down as vigorously as possible, as often as they can get away with it. This has created a situation where even billionaire private business people who are objectively powerful people in their own right, often have limited say within governance and regulatory circles. Whatever influence they have is often used to protect themselves and their individual business interests, instead of having powerful industrial or sectoral lobby groups.

Think about it, what is Nigeria’s most powerful private sector lobby group? Is it MAN (Manufacturers Association of Nigeria)? Or is it whatever lobby facility that Dangote Group has in-house? I am quite confident that the latter is more likely. Apart from telecoms and energy, which are dominated by foreign entities, are there any industries in Nigeria with singular, cohesive, and influential lobby groups?

Is there a finance industry lobby that shapes policymaking at the CBN and SEC? Is there an Arts and Culture lobby that interface with the Ministry of Information? Is there a construction lobby that liaises with the Ministry of Works, Housing, and Power? These industries are multibillion-dollar industries are they not? Does Nigeria PLC understand politics?

In the world’s most economically prosperous country, the CEO of a mid-sized Fortune 500 company has at least as much influence over electoral and legislative processes as the average member of Congress. Indeed some would argue that the U.S. has even taken its reverence for the private sector to extremes with things like the Citizens United vs FEC supreme court decision, which ruled that for the purpose of funding electoral campaigns, the Federal Electoral Commission cannot impose funding restrictions on corporations. Some even argue that this effectively handed U.S. electoral processes over to unelected capitalists.

Regardless of one’s ideological stand on the matter, the reason the U.S. traditionally allows business and politics to interoperate closely is simple – business itself is a result of politics. The situation of a business as a growth-oriented entity in a friendly regulatory environment or as an embattled entity in a hostile environment is determined entirely by political decisions. The organisation of a country’s economic system along with pro-market principles that are business-friendly or proto-Marxist principles that treat the existence of private capital as an offense is entirely guided by politics.

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In other words, if private business is at the heart of an economy and political processes can have vast influence over the fortunes of private businesses, then it only makes sense that private businesses should have some kind of say in the political processes. It is simply not logical for 1 to be aloof and disconnected from 2 when 2 potentially holds overwhelming power on 1. The U.S. does not hide from this reality by pretending that private commercial involvement in politics is distasteful. It instead regulates this activity and even gives it a nice name – corporate lobbying.

Does Nigeria’s organised private sector have a similar understanding of the impact of politics on its operations? Has Nigeria PLC ever established some form of stated and unambiguous investment in a political process based on its commonly established interests? Does Nigerian big business understand that it needs to take a funding stake in Nigerian tertiary education which is still very much dominated by products of Cold War-era Soviet scholarships who openly push Marxist, anti-capitalist doctrines on their students in the year 2021?

On the contrary, I recall bank board members and other highly placed industrial personalities during the 2015 election cycle, making emotional personal arguments in favour of Candidate Buhari while openly conceding that he would probably be bad for the economy. No common forum to establish a sectoral position on the election; no campaign funding committee to work in favour of their interest; no shared understanding of group interests – just individual positions and unsubstantiated opinions.

Now that we are coming up to 6 years of President Buhari which have yielded 2 recessions, all-time record levels of public debt, a nonsensical 17-month border closure (with a Dangote exception), and several anti-business moves too numerous to recount, one hopes that Nigeria PLC has finally learned a bitter and overdue lesson about staying aloof from politics – it is much too important to leave to the politicians.

David Hundeyin

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