Around the world, people expect governments to lead in changing their destinies [that is right]. And some despise corporations because they see them as being in the business of making money. Unfortunately, the power of making money and the desire to accumulate profit are some of the strongest elements of building modern societies. Profits make communities and anchor nations. When countries cannot have entities that accumulate profits, they fail in their social visions.
I respect non-profits. I like foundations. But I honor immensely for-profit entities because they have the organic elasticity through profitability to even do more to societies that non-profits and foundations. That does not mean that we do not need the non-profits and foundations. We need them, because in the pursuits of profits, corporations do miss some things. Non-profits and foundations are there to fix those.
As Adam Smith encapsulated about 200 years ago, firms exist to make profits and those profits can actually become the wealth of nations. When you deploy the factors of production, efficiently, creating employments, I am confident that you have done well for the society. A community where men and women work, and raise families made possible by jobs, looks stronger. The best corporate social service is employment. With jobs, men and women build nations.
Our nation Nigeria must have that capacity to have corporations that can help to provide jobs. Those jobs, made possible by the pursuit of profit, do help to solve many societal problems. When firms fix frictions in markets, they also do well to societies. No matter how you see it: the most important corporate social responsibility is providing employment to advance humanity.
In America, they talk of black swans: ” high-impact risks that are highly improbable and therefore almost impossible to predict”. Yes, “an unpredictable or unforeseen event, typically one with extreme consequences.” That is it: “something extremely rare”. So, because it is rare, you do not (usually) plan for it. Arab Spring was a black swan as the leaders of North Africa could not have modeled that risk.
In Nigeria, we do not just have black swan. We have gray lizard. It is a high impact risk, that is highly probable and evidently visible but totally, widely and irresponsibly ignored. The massive youth unemployment in Nigeria is a gray lizard. Governments see it daily but it is totally ignored.
Simply, I want government to stimulate the economy so that companies can grow. The best decade in modern Nigeria was 1990s in creating corporations. That was the decade most of our leading banks of today were established, from Zenith Bank to GTBank, Diamond Bank to UBA (via STB). Government played a key role: it made banking profitable. But today, the nation is benefiting because we have amazing institutions which are deepening our national competitive capabilities. The 2000s was largely a lost decade as no corporation of great value was established then (excluding Glo). The 2010s is still work in progress; it may come out fine.
Around the world, nations do well when profits expand. American governments allow Wall Street to make tons of money so that main street would live better [they keep interest rate low to help banks make money]. You may not like it, but that is how it works. They do know that Wall Street profits would be used to provide societal good causes because when the banks blossom, loans become available, and companies hire and societies advance.
Our challenge as a nation is to find how we can create employment for the armies of our youth. It is the most important challenge we face today in Nigeria. Largely, only the pursuit of profit would make that possible. And if profits make it possible, it means we have fixed a societal problem in our society. We need to find ways to create companies of the future which can make profits to serve our citizens and our nation.