Simplifying Businesses in Nigeria By Tolu Ogunlesi
Whenever I have to talk about Nigeria’s economic ‘potential’, I refer to two key features. One is the intimidatingly tangible fact of our population, the largest in Africa, seventh-largest in the world (on course to being third by 2050); offering a ready market for anything and everything. The other is a rather abstract quality: Nigerian ‘hustle’ – the never-say-never attitude that manifests in various incarnations, not the least of which are the instincts for deploying car horns in stand-still traffic, and for being unduly unruly in airports at home and abroad.
Today’s piece seeks to focus on a positive manifestation of that hustle – entrepreneurial energy. Two years ago, the Federal Government released data that revealed that 99 per cent of the more than 17 million SMEs in Nigeria are actually micro-businesses – i.e. employing fewer than 10 persons, and worth less than N5m in value.
In his authoritative study of Nigerian Capitalism, published in 1977, American Professor of Economics, Sayre Schatz, wrote: “[Nigerian entrepreneurs] tend to possess in high degree the pure personal qualities of entrepreneurship. They tend to be highly responsive to the possibility of gain, to pursue economic advantage vigorously and strenuously. They are flexible and venturesome, are willing to seek far and wide and to take risks in the quest for profit. Any venture that has the remotest prospects of success attracts them.”
I will like to make the point that we need to focus removing the biggest obstacles facing these millions of businesses. And what are those obstacles? You might say capital. No doubt capital is critical for the success of small and big business. But is capital really the most intimidating issue Nigerian businesses face?
It seems to me that in our obsession with “Capital” we are missing out on the real devils. Earlier this year, I met a Nollywood filmmaker who said the industry didn’t need grants and loans as much as it needed electricity. Film sets often have to depend on, and budget for, generators, in the absence of guaranteed public supply. That’s apart from the fact that in choosing locations they have to factor in the availability of soundproof generators – no one wants a film ruined by roaring generators.
Last week, at an event at the Nollywood Studies Centre of the Pan Atlantic University, actor Kanayo O. Kanayo echoed those views, saying: “What we want is a fair Nollywood industry, not a welfare industry.” His point was that all those mouth-watering government grants mean little if for example bank collateral policies do not change. He explained that his not owning a house in Lagos means that he can’t provide the collateral most desired by Nigerian banks – real estate in a prime location – regardless of his commercial potential as an actor or producer. “We have to look at alternative forms of collateralisation,” he said.
Also last week, I met an entrepreneur who produces powdered versions of Nigerian delicacies – pepper soup spices, crayfish, melon seed, ogbono, etc. The biggest challenge the business – launched a year ago – is currently facing, is getting her products registered inexpensively in Nigeria. Now, the irony is this: She says she is registered to sell in the United States, because the Food and Drug Administration (the American equivalent of NAFDAC) streamlines registration for her basket of products; making it much easier and less expensive to market in the US than at home in Nigeria. I shared this story on my Twitter feed and was overwhelmed by the outpouring of reaction. NAFDAC seemed to evoke a great deal of frustration from the small-business persons who responded.
The Nigeria Customs Service is another master in the frustration-generation business. Last year, a friend of mine who was moving back home from Europe had a terrible experience in their hands. To start with, the website offered no useful guidance or advice as to the end-to-end process, and fees. And that’s the first means by which Nigerian bureaucracy conspires against you: By withholding information, it creates conditions that allow them to introduce all sorts of invisible and/or unexpected obstacles. The overriding idea is to frustrate you to a point where you will seek a shortcut – at a premium of course. It’s a really simple idea that plays out with devastating impact.
Sometimes, the failings are inadvertent, but of course, no less crippling. The analogy I like to use – and I have used it before on this page – is the Mr. Biggs scenario. When last did you enter a Mr. Biggs outlet and see anything that looked like a queue? What you tend to see is a crowd of people at the counter, all jostling for attention. You look at such a scenario and say: ‘Bloody Nigerians!’ And then you leave that place and step into a bank. Same Nigerians, but you notice the retractable queue belts – and the queues! The only difference between those two scenarios is the queue belts; the presence of which instantly imposes a sense of order on instinctive disorderliness.
Now extrapolate that to dealing with the bureaucracy on anything, whether it’s registering a food product, or land title, or collecting a new passport or driving licence. The difference between efficiency and a lack of it is often to be found in very simple things. Then, it occurs to you that Nigeria’s real problem is not so much that we don’t know what to do, but that we just won’t do it, mainly because doing it will threaten a lucrative status quo.
I’ve got a few suggestions regarding remedying this anti-business state of affairs. First, I think that the President and his ministers should make it compulsory for all government agencies to make available, on the Internet, comprehensive information – including fees and charges – on all their processes and procedures. Any government agency with a website that provides incomplete, inaccurate, outdated or misleading information should be publicly penalised.
Second, we need the President and his cabinet – the policymakers – to be more hands-on in their work, and ensure that proclamations and announcements are followed through to implementation. Every day, we hear rousing news of yet another landmark government policy. Business registration in 24 hours; Customs clearing in 72 hours; etc. In most cases, that’s all there is to it: the pronouncement. Business goes on as usual, because the President and his ministers have moved on to the next headline-hugging pronouncement. They need to set up channels that allow ordinary Nigerians to provide direct feedback to their offices on policies announced by the government.
The President certainly has the biggest role to play in helping smash the bureaucratic conspiracy against business in Nigeria, for this one reason: tackling many of the obstacles requires active collaboration across multiple agencies, and the only person with the authority to ensure that this coordination happens, and that the silo-mentality and turf-wars common amidst government bodies are promptly dealt with, is the President. I will never get tired of stressing that President Goodluck Jonathan needs to develop a hands-on approach to managing these issues. This should of course not be confused with micro-managing.
Third, I wish the First Lady would devote her considerable influence towards advocacy on behalf of small businesses, a great deal of which are run by, and employ, women and youths. Some of that energy deployed last year towards allegedly fanning disaffection and acrimony in Rivers State would go a long way in the service of small-scale entrepreneurs. Michelle Obama’s ‘Let’s Move’ campaign is a great example of how a First Lady can make herself truly useful to the people who elected her husband. ‘Let’s Trade!’ by Patience Jonathan, anyone?
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