In the last few days, after the total shutdown of mobile transaction channels of the MTN Nigeria by commercial banks, Nigerians have been discussing and reading a number of critical talks on why the banks should allow small and medium enterprises to thrive by halting sales of airtime, recharged and other transactions through USSD codes. The argument has been that these enterprises are being perished when banks become vendors of airtime and data plans.
Umunneoma Economics Over Adam Smith Economics and the Staggering Statistics
In his character of setting up debate around issues of national importance, especially on those related to economy and management of Nigeria as a “corporate entity”, Professor Ndubuisi Ekekwe notes that it would not be a bad idea if concerned stakeholders in the banking industry and regulator [Central Bank of Nigeria] consider Umunneoma Economics over Adam Smith Economics. “Umunneoma Economics is another way of saying Stakeholder Capitalism where you do not focus on Shareholders but everyone. It is not communism.”
To the Tekedia Institute Lead Faculty, Umunneoma Economics gives room for value sharing towards collective growth rather than the single handed growth of a particular sector or industry. Shifting through the archive of the National Bureau of Statistics, our analyst found that the agency had earlier reported that “small and medium scale enterprises (SMEs) in Nigeria have contributed about 48% of the national GDP in the last five years. With a total number of about 17.4 million, they account for about 50% of industrial jobs and nearly 90% of the manufacturing sector, in terms of number of enterprises.”
Our analyst notes that Nigerian government and other stakeholders are good at reeling out surprising statistics like this. However, over the years, it has been difficult for the government and stakeholders in the biggest industries such as telecommunication, education, banking, cement to walk out sustainable strategy for the growth of the SME sector, by giving space to operate successfully in the biggest industries.
“Instead of working towards positive exploration of the inherent insights, we reel out policies and programmes that devour the insights,” our analyst points out while making reference to the NBS statistics.
Clone Prosperity for SMEs Growth and the Debate
Describing the mouth-watering promises and programmes of the government and commercial banks, our analyst stresses that these have largely been done with one side of the mouth, which signifies genuine interest of the stakeholders in growing the sector. The other side of mouth has been characterised with making and implementing policies that stiff the growth of the enterprises in the sector.
When Nigeria had her first telecommunication service in the 2000s, many small businesses benefited, which had significant impacts on the bottom line of families. This has been widely credited to the liberalization policies of the then administration.
“Our banks can do better than queue up to become airtime vendors. When the Telcos first came to Nigeria, thousands of Nigerian youth made a living income by working as agents. This is no longer the case,” one of the debaters adds. Now, the banks are [emphasis added] disenfranchising many families by creeping into that space. We must learn to let the small people live.”
Another debater notes that “If we see enterprises as purely profit-driven, then it will be impossible to create a livable society, because a profit motive can easily lead to immoral and unwholesome practices.” As the debate continues, our analyst notes that both the government and stakeholders in the biggest industries need to stop the clone prosperity game. Small businesses need to breathe among the biggest industries. Their constant breathing means sustainable solutions to various problems, most importantly, unemployment among the youths.