Growth is a rising tide that lifts all boats

The decision of the “Seventy Senior Elders” (ex-KPMG partners) to send a robust proposal to the Secretary-General of the United Nations and the President of the World Bank as well as the Managing Director of the International Monetary Fund [IMF] for the merger of the three “super powers” – i.e. their respective agencies into one single organization was a collective one.  It was a huge gamble.  We knew we were taking a very big risk which may provoke hostility if not outright ridicule.

After a night of vigil and fervent prayers led by the Cardinal amongst us, we were divinely reinforced to face whatever consequences our carefully thought out proposal might trigger.  Indeed, we were further emboldened to suggest that if the “super powers” were hostile to being merged, each of them should be broken up into smaller, leaner and more agile business units which would be more manageable with Corporate Governance and accountability as the anchors and driving forces.

To our utter amazement, Ban Ki-moon Secretary-General of the United Nations; Jim Yong Kim, President of the World Bank; and Mrs Christine Lagarde, the Managing Director of the International Monetary Fund declared that they have given considerable thought to our proposal and wanted to discuss it further.  They did not stop there.  Each and every one of them took it upon himself/herself to cascade our proposal “down the system” – to their lieutenants for their inputs.

It is a measure of the quality of these outstanding leaders and their confidence in themselves that rather than hold on tenaciously to their respective “empires” they were ready to sacrifice their personal ego for the common good.  Truly amazing.

As a gesture of genuine encouragement and sincere goodwill, here is an abridged version of the document Mr Ban Ki-moon sent to us on the delicate matter of Corporate Governance.  This is a matter which is very close to Mr Ban Ki-moon’s heart.  Indeed, he is promoting it aggressively.

THE CASE FOR CORPORATE GOVERNANCE: WHAT IS CORPORATE GOVERNANCE?

The principal actors are Shareholders, Directors and Managers.

CORPORATE GOVERNANCE DEFINED

Corporate governance essentially involves balancing the interests of many stakeholders in a company – these include its shareholders, management, customers, suppliers, financiers, government and the community.

BENEFITS OF CORPORATE GOVERNANCE

Countries that have good corporate governance systems are associated with:

•Accessing capital or reducing the cost of capital;

•Facing and responding to external market pressures;

•Balancing (sometimes) diverging shareholder interests;

•Resolving governance issues in family-owned businesses;

•Ensuring company sustainability;

•Achieving better operational results; and

•Good governance leads to higher market valuation.

THE CASE FOR CORPORATE GOVERNANCE: CORPORATE GOVERNANCE PILLARS

•Transparency

•Accountability

•Fairness

•Responsibility

When we received Mr Ban Ki-moon’s response, we were literally over the moon!!  The Cardinal wasted no time in summoning us to Thanksgiving Prayers to the Almighty and special prayers for these three exceptional and magnificent leaders who instead of unleashing hostility and scorn at our proposal have taken us by surprise (by teaching us a lesson in humility).

At our meeting with them at the Mandarin Oriental Hotel, 1330 Maryland Avenue, Washington DC, they made it very clear that their only and primary concern were global peace and economic growth.  They respectively and enthusiastically quoted Simon Kuznets’ dictum:

“Growth is a rising tide that lifts all boats.”

Along with Robert Solow, Kuznets was the champion of “balanced growth path”.

Our meeting was going exceptionally well until the three outstanding leaders of the United Nations, the World Bank and the International Monetary Fund proceeded to share with us, as a demonstration of confidence and good faith, their dossier on Zimboda.  It was marked “TOP SECRET”.

Here is a sample:

(i)“New Telegraph” newspaper front page September 10, 2014

Headline: “HOW GOVERNORS LOOT TREASURY, BY EFCC

“The Economic and Financial Crimes Commission (EFCC) yesterday identified five channels through which state governors divert public funds to private use.

It also attributed the nation’s poor development to corruption and poor fiscal responsibility prevalent among state governments.

The EFCC Chairman, Mr Ibrahim Lamorde, told participants at a six-week workshop on Anti-corruption, Fiscal Responsibility and Good Governance for state government officials that public funds are diverted through inflation of prices, embezzlement, misappropriation, over-estimation of cost of projects, ghost workers syndrome, award and abandonment of contracts and outright payment of money to godfathers.

He warned that the anti-graft agency would not spare anyone who violates the law.

The workshop was organized by the EFCC in collaboration with the House of Representatives’ Committee on States and Local Government Affairs.

Lamorde, represented by the EFCC Secretary, Mr Emmanuel Aremu, said:  “Investigations by the EFCC show that there is corruption at a very alarming proportion at the state government level in the country.

“Where more money is found, the tendency for more corruption is high.  The combined amount of money which goes to the states every month from the federation account is quite enormous; however, the level of development in the state is not commensurate to the monies received.  This is due to the corruption and poor fiscal responsibility.”

According to him, in order to ensure adequate funding of all levels of government, the 1999 Constitution allocates 52.68 per cent of federally generated revenue to the Federal Government, 26.72 per cent to states and 20.6 per cent to the 774 local governments in the country.

But he regretted that poor service delivery, inadequate infrastructure, poor management of public enterprise, bad governance, moral decadence and general underdevelopment are among the impact of corruption on attempt at development among state governments in the country.”

He added that corruption and lack of fiscal transparency remain one of the hydra-headed factors that account for the inefficiency and retarded growth of states.

“The state governments transmit development to the local governments and likewise contribute to the Federal Government’s efforts at developing the country,” he said.

Lamorde explained that the commission, in line with the EFCC Act that empowers it to investigate, prosecute and prevent the commission of economic and financial crimes in the country has been doing a lot to check the spate of corruption in the public sector, especially in states.

In his speech, Deputy Chairman, House of Representatives Committee on States and Local Government Affairs, Hon Ibrahim Lawal Nuhu, lamented the high rate of corruption at all levels of government, saying that is why the National Assembly ensured the promulgation of anti-corruption laws and the establishment of agencies to enforce the laws.

Earlier in his welcome address, the Commandant of the EFCC Academy, Mr Ayo Olowoniyi, expressed delight that after a series of consultation and preparation, the training had finally commenced.

He implored participants to be attentive as this could save them from trouble.

“Please pay attention, take part and express yourselves because you are the ones on ground, you are the ones doing the jobs.  We urge you to speak to us, ask us questions and give us examples and let us talk because, when we talk about it, we won’t have to fight over it.” he added.

J.K Randle