Driving sustainable development through private sector initiatives

Conceptualising sustainable development without private sector interventions in today’s world is almost an impossible task. The concept of development has evolved, and it involves a comprehensive strategy where everyone and all organizations and sectors are responsible for driving sustained growth.

It is believed that the capabilities employed by the private sector can be put to use in development work. Therefore, gone are the days when development used to be the sole purview of the public sector. Hence incorporation of private sector-led initiatives is firmly on the front burner. We have seen this trend in Nigeria, where we have captains of industry sitting down on public sector initiatives committees set up to look into various development issues.

Though the Nigerian economy was recently rebased making it the largest economy in Africa and is considered as one of the prime locations for investors in emerging economies, it faces a myriad of problems cutting across dwindling oil revenues, security problems, political turmoil, kidnapping, flooding, poverty and many more.

The opportunities in countries like Nigeria are enormous; not only can and do businesses make money, they can do so while doing ‘good’. Models of servicing consumers at the bottom of the pyramid started emerging some years ago. Large companies provide products to low income-earning families in smaller packages that suit both their consumption patterns and disposal incomes. This model was popularised by the late CK Prahalad and has been critiqued. Many, however, see large companies as enablers for low-income earners to become producers or entrepreneurs whose living standard can improve over time.

There is a strong correlation between healthy economic and inclusive growth patterns and poverty reduction. Increase in investments has the potential of driving down poverty rates. Poverty is a relative term and development must be looked at from a holistic point of view. The issues of development transcend beyond simple economic development. Growth strategies must look at solving problems from different angles – looking at social development, educational systems, better health provision and infrastructural support systems. Development is best driven by a combination of social, environmental and economic interventions. Poor development in one sector invariably affects other areas – no one industry is entirely dependent on the others. Industries that have been worse hit in Nigeria and need aggressive overhauling are education, health, and power. Other issues are upholding the rule of law, eradicating corruption, and addressing the excessive national recurrent expenditure and many more.

By opening up the economy to more investments, living standards have improved, and a semblance of the middle class evolved, but there is still so much to do to achieve economic growth that is needed to sustain development.

Companies have a high influence on how we live our lives. Our desire to live in a particular way is often as a result of our interactions with various consumer products and services. Therefore, incorporating elements of sustainability into these areas of influence can help redirect our desires. This can be as simple as combining recyclable components into the product design or making the design of particular products last for much longer.

Companies must focus on a couple of things, which can be captured in one phrase – ‘responsible investment’. Investment in developing countries such as Nigeria must be made differently. Asides from looking at issues that affect the bottom line, it must also look to see how to address social and environmental problems which affect its commercial sustainability and in a broader sense others as well.

The teeming population of approximately 170 million and the untapped natural resources in Nigeria are two significant sources of attraction for many investors. These are opportunities for commercial growth for many global and even local companies, yet many other things can hamper benefitting from these in the long run. The security problems have so far been contained in the north-eastern part of the country, albeit with a threat to move into the south, especially to cities like Lagos. This problem has deteriorated the rate of economic growth in those parts of the country, which negatively impacts on investors’ returns – if left unattended, mainly if it succeeds in moving southwards, it will grossly affect the investment climate. Collaborative efforts in the private sector must be harnessed to provide support in ameliorating these problems. These efforts should not be limited to insecurity alone but should also consider how infrastructural deficit, poverty, etc. can all be addressed. Short-term commercial outlooks for profit-making are not sustainable – to remain commercially viable in this region, the private sector must get involved in many more things than are necessary.

The beauty about businesses and sustainable development is that it can be profitable for many companies – problems can be solved through social-commercial approaches, ensuring a win-win strategy and this, by the way, is not some fluffy CSR project.

Today, we have so many committees and agendas that have been developed either by governments or multilateral agencies. The private sector is also a critical actor in the post-2015 Millennium Development Goals agenda. Several guidelines for intervention and participation in development or sustainable issues have also been created – what we need is measured impact and alignment between all these and the problems prevalent in each operating environment. If companies have succeeded in dominating the commercial landscape since the time of industrial revolution, they can do it again by making development sustained.

This is not, however, a task for them alone – these initiatives must be backed by the right kind of political leadership, good governance, and robust regulatory frameworks.

 

Oluwasoromidayo George

 

George, a sustainable business practitioner, writes from Lagos.