The Mirage of “Enabling Environment” for Business in Nigeria

The Mirage of “Enabling Environment” for Business in Nigeria

My postulation that entrepreneurial capitalism, not necessarily political efficiency, is the element that would unlock a hopeful Africa, has received many comments in the community. Let me share this one:

Prof., what about the role of governments as an enabler in creating the conducive environment in terms of policies, security, good leadership etc that will inversely give rise and support Entrepreneurial capitalism? Without these enabling environment intentionally created by Governments, Entrepreneurs will seek greener pastures. So my point is, with the mindset in Africa, Governments have got to be intentional, to efficiently provide the enabling environment for Entrepreneurial capitalism to thrive.

Here is the deal, no government policy can work without entrepreneurial pioneers. Any government can make policy but few nations have market pioneers. The broad thinking in Nigeria is that policy must be graded A+ before companies can find value in them. That is untrue. Nigeria has some great business policies on energy, water, education, and banking, with some even better than what is available in the U.S. Look at the last time a Nigerian bank was fined and compare same with what U.S. banks go through with attorney generals in U.S. states. In U.S., a bank is exposed to federal government and all the states where it does business. But in Nigeria, they have mainly the central bank to deal with.

Largely, what new policies do people need to build refineries in Nigeria? What again do we need to build better schools in Nigeria? What do we need to create a software company? I do not know. The excuses of “enabling environment” are pure diversions. Yes, people fail to understand that what are “un-enabled” are existing frictions which need pioneers to fix them. That you lack electricity to run a good school means pioneers that can provide electricity have not risen. That you  need good graduates to run your software company but struggle to find them fails to acknowledge lack of entrepreneurial innovators on software education.

At the heart of this is an illusion that Nigerian government has unlimited funds to solve problems because it is government. How can a country with a budget of $24 billion provide good public education, healthcare, security, etc to 200 million people? If you are waiting for enabling environment from that $24 billion, you will run out of time. South Africa spends $122 billion for 57 million people while U.S spends $4.45 trillion on 327 million.

Yet, this is not to say that the Nigerian government has no role to play in helping pioneers to rise. My point is for people to understand how relatively poor we are as a nation. Apple makes on revenue Nigerian budget in 6 weeks. Harvard University’s $5 billion budget is more than 20% of Nigeria’s national budget and more than all that Nigeria spends in all its educational systems, from primary to university levels: 7% of its $24 billion on education – about $1.68 billion.

Simply, one U.S. school spends more money (about 3 times) than all that Nigeria spends on education.  U.S. school system is lucky; it has rich companies and people that can make such budgets possible. When Facebook could pay a fine of $5 billion, and not die, you would agree that if Facebook was born Nigerian, more options would be possible for government to expand its playbook. Nigeria does not have Apple, Facebook, etc, and consequently “poor”.

People, Nigeria does not have funds because we do not have companies that would pay big taxes to fund governments. Only when you have such companies would enabling environments make sense. It is the Nigerian government that needs enablement today because it is severely underfunded by the private sectors!

Today, public purses are un-enabled and are practically waiting for private companies to fund them via taxes. But most people do not agree. For most, the only working policy is that one that guarantees good profits irrespective of everything. Unfortunately, it is markets and customers that make such “policies”, not the Nigerian government.

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6 thoughts on “The Mirage of “Enabling Environment” for Business in Nigeria

  1. Well said prof. Nigeria is severely underfunded. It only relies on the taxes of the private sector. It is a shame that it took this long for government to know that we would be in a situation like this today and not prepare. It proves that we lack leaders with entrepreneurship and economic foresight that prevent institutions, nations from falling apart.

    Till date, you are the only one I have seen to have shown incredible innovative economic insight and foresight to project this dieing country.

    Reply
  2. When you are bereft of ideas, you always have someone to blame; if you are incompetent, it is because you haven’t received much support from the government….

    When you have millions of your compatriots who think this way, and you are still searching for what crisis looks like, then you are also living in bubbles. If constant power supply guarantees development and wealth, then all nations with constant power supply would have been wealthy and prosperous; so why is it not the case? Lazy people never run out of excuses on why they can’t do a thing, someone must be blamed!

    An average Nigerian is fantastically lazy. Yes, because when you are mentally lazy, your physical strengths can’t really do much, you will remain poor. The meaning of being hardworking has been redefined over the years, but most Nigerians still believe that being hardworking has a lot to do with physical exertions, and how long one can work without resting. If it were to be so, then bus conductors, people who dig grounds, those who carry heavy loads would have been the richest Nigerians, but that’s not happening!

    When you have the capacity to think and the resources to execute, you will realise that governments have minor roles in development of nations.

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  3. Its all well and good Professor, but how do you reconcile this assertion that companies need to be great to provide tax revenue for government through which government can fix some issues, while on the other hand saying that governments and people pay conglomerate taxes to big entities to do for them that which they csnnot do for themselves? Where is the balance?

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    1. In the process of pioneering business sectors, companies fix market frictions which are uncommon. Most times, governments come to help them, in many ways (the conglomerate taxes). The key is that those companies BEGAN first before govt came. No one is saying govt is not important. My point is that pioneers must start before govt can help. Think of Nollywood. Think of Refinery (Dangote). These are new domains which govt has supported those that began

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