• Friday, May 24, 2024
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BusinessDay

Insurance and business side of W/Africa

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Victor C. Ariole

Professor Joe Irukwu’s comment at the recent Insurance Law Review Workshop is quite pertinent to the current global financial meltdown. He said “insurance is the only business that exists to ensure the survival of other businesses.” Researchers acknowledge the fact that cross-border investments by banks and other financial institutions and industrialists have increased significantly. They further agree that the strategic vision framework adopted by Economic Community of West African States (ECOWAS) heads of state in June, 2007 foresees the creation of a region-wide space for people to transact business under rule of law and good governance. What is more, the criticised AFC of former CBN Governor Chukwuma Soludo, AfDB and Africa – Re have core objectives that include promoting Africa’s development through investment in infrastructure and, providing technical assistance for rapid development in Africa. Indeed, insurance is better placed to ensure that businesses do not fail if properly regulated and guided by African governments.
However, Nigeria which ought to lead in promoting this cause is quite far behind in pursuing the cause, as was evident at the insurance law review workshop. The experts from the World Bank raised a lot of issues that proved that factors constituting solvency component, which in turn determine viability, are shabbily treated in the nation’s insurance documents as well as accounting procedures.
In effect it is hard to see in the books of Nigeria, insurers’ assets that are outside of the country, making for good solvency high rating. It is also frightening to see in the books items treated as assets in the likes of office furniture and equipment.

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The myopic approach of Nigerian insurers gives the Francophone Africans who are mostly our neighbours more competitive edge. Simply because Nigerians are not interested in French approaches expressed in French Language does not mean that efforts should not be deployed to study the Francophone approach that seems more cohesive.
Francophone Africa has a united regulatory body just as it has OHADA that regulates and harmonises its business. Its CFA zone has prospered more than Anglophone Africa’s multiplicity of monetary zones.
In effect, Francophone Africa’s fear of Nigeria’s hegemony has always made the region proactive. What is more, Nigeria’s economic policies inadvertently ignore the fact that weaknesses and leakages they prop up are picked up by this Francophone bloc to constitute opportunities for their economy. Observe what Conotou Seaport rakes in for Benin Republic at the expense of Nigeria; what Togo and, of recent, Ghana’s tourism provides them at the expense of Nigeria. Observe what refineries in Cote d’Ivoire rake in for the country for at the expense of Nigeria. There are so many economic advantages for them out of Nigeria’s myopic approach.

The United States spends a lot of money studying Japanese people and their culture, including their language for mere fear of being outpaced in the dominance of the Pacific.
For such a very distant neighbour, separated by a very big ocean, the USA found it necessary. But it is quite unfortunate that just for immediate gains of our businesspeople, including the insurance gurus, Nigeria remains aloof to planning and making policies for a better West Africa let alone Africa.
It is a known fact that for every four Africans, at least one is a Nigerian; hence the need to think of uploading our human resource endowment into the continent.
An eminent professor at the University of Lagos Fajana (UNILAG) puts it thus: “Nigeria’s intellectual diversity continues to be underutilised (in Africa) globally. It can only be reversed if our business gurus think global instead of being myopic. Nigerian universities producing intellectuals must be accepted as viable partners, like it is done in the USA and China.
For every five human beings in the world, one is Chinese; hence the reason China is concerned about bailing out the International Monetary Fund (IMF) with its $50-billion proposal. So also it must apply to Nigeria in West Africa, after ensuring that its businesses spread across borders in the region, and insurers ensure that the businesses do not fail.
Indeed, for the insurance law review to be sustainable, it must compare favourably with the Francophone Africans’ insurance position; otherwise Nigeria could be on the losing side proposing insurance products that aim only to fleece government resources instead of helping government to access funds for infrastructural developments.
Francophone Africans are more concerned about development than Anglophone Africans. We must compare ourselves with them because “we cannot compare ourselves with ourselves.”