Without doubt, Samuel Ortom, governor of Benue State, knows the benefits private investments can bring to entrepreneurs, government and the economy of the state. As a reputable investor himself, he is well aware of the returns that accrue to well-funded and managed private enterprises, not to talk of employment opportunities, increased revenues and improved well-being of the workers engaged directly or indirectly by such enterprises.
The governor, who is in his second term in office, is also familiar with the enlarged tax base, which a thriving private sector-driven economy can provide for the government, as exemplified by Lagos, Rivers and Kano states. The fact that these states are permanently the top internally-generated revenue earners over the years is not by accident. They have the most developed private sector-driven economies in Nigeria.
Surely, Governor Ortom would like Benue State to be as prosperous as these exemplary states, and that is apparently why he has chosen to pave a new economic development pathway for the state; one that would lead to a well-developed private sector-driven economy.
On December 15, 2020, the governor inaugurated the State Council on the Implementation of the National Micro, Small and Medium Enterprises (MSMEs) in Makurdi, the state capital. His administration had earlier inaugurated the State Council on Commercialisation and Privatization, charged with the responsibility of repositioning public-owned enterprises in the state that had gone comatose for years, stressing that its recommendations were being weighed by the government for implementation.
Moreover, the governor announced during the inauguration of the council of MSMEs that his administration had commenced the process of setting up a state Micro, Small and Medium Enterprises Development Agency. The state executive council had already given approval to that effect and legislation is being awaited from the State House of Assembly.
The functions of the state’s 14-member MSME Council include; provision of guidance on policies and strategies to drive the development of MSMEs subsector, fostering increased awareness, ensuring that national policy on MSMEs achieves intended goals, among others.
At the inauguration, the governor disclosed that: “This council is vital in harnessing efforts of Micro, Small and Medium Enterprises as critical stakeholders in building the Benue economy.”
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The new direction to which the governor is leading the state’s economy is not entirely new at the global and national levels. The private sector has led the growth and development of American and European economies for centuries. Some Asian and other developing countries of the Middle East and Africa joined the private sector drive in the early 20th century.
However, others, including Nigeria, that gained their independence in the second half of the last century were initially reluctant to allow the private sector lead their economies, for two possible reasons: They were in a hurry to develop their economies and were not prepared to wait for the invisible hands of demand and supply to determine the level of investment and pace of growth and development. They, therefore, chose the Keynesian prescription of direct public investment to stimulate their economies. Or, they were responding to the call by socialist or communist revolution, which was spreading through Eastern Europe then, on the state to take control of the commanding heights of the economy in order to stop capitalist exploitation of the people. Whichever one was applicable, the Nigeria government and its federating states embarked on the establishment of business enterprises in manufacturing, commercial and service industries.
The Benue State government, for instance, under Governor Aper Aku, and his successors, established a bank, a brewery, a bottling company, a burnt bricks company, a bookshop, as well as, agro-processing companies such as Agro-Millers, Taraku Mills, tomato processing company, a fruit juice processing company, among others.
However, by the 1980s, communism crumbled, just as most government-owned businesses in Nigeria. They collapsed under the weight of corruption, underfunding, mismanagement, political interference, amongst other factors. The above are clear evidence that the government is not a good manager of business enterprises. It was that realisation that gave rise to the wave of privatisation across the globe. In the 1990s, the Ibrahim Babangida-led military administration set up the Technical Committee on Privatization and Commercialization (TCPC) to sell off, lease, liquidate, or commercialize federal government investments in banks, breweries, cement factories, media, as well as, other commercial and service enterprises. TCPC was later replaced by the Bureau for Public Enterprises (BPE), which is performing the same functions for the federal government today.
The Benue State government has also privatised or liquidated some of its enterprises over the years, including, Lobi Bank, Benue Breweries, Benue Bottling Company, Benue Agro-Millers, Benue Hotels, among others. But a number of the state-owned enterprises still remain on the books of the government, albeit moribund. Those in this category include; Taraku Mills, Benue Burnt Bricks, Tomato Juice Company, among others. Efforts by previous administrations to privatize or revive them have come to naught. The newly inaugurated Council on Commercialization and Privatization of the Ortom administration is expected to continue from where the past administrations stopped.
However, the innovative administration should be under no illusion that the job of reviving, privatising, commercializing or winding down these enterprises will be easy. Some of the major obstacles to success in this regard have been the hopeless state of finances of these enterprises whereby their outstanding and overdue liabilities have swallowed up the value of their assets; litigation by former staff, contractors, suppliers and prospective buyers; and public outcry over suspicions of corruption and insider interests in any arrangement to change the status quo.
Ortom, like his predecessors, faces a Hobson’s choice: to move forward is Herculean; but to do nothing is worse as the liabilities of the moribund enterprises continue to grow. But to do something, he should.
By constituting the MSMEs council, Privatization and Commercialization Council and kick-starting the process of setting up the MSMEs Development Agency, the governor has made a bold statement on the new direction for the state’s economic development. Members of these bodies should take the baton from him and lead the state to the Promised Land. The moribund enterprises, which stick out like the sore thumb on the state’s conscience, should be cleared out into private hands or out of existence.
On his part, the governor should be prepared to take hard decisions irrespective of the inevitable outcry from a section of the citizenry, especially the opposition. Those who always suspect or condemn every decision or action of government should realise that you cannot continue to do the same thing and expect a different or better result.
But resolving the issue of the state’s collapsed enterprises is just one small part of Benue’s walk on the new economic pathway. The larger part is the development of the MSMEs. There is no doubt of the availability of human and material resources to support a private sector-driven Benue economy. The major challenge is how to access affordable capital for enterprise financing. In this regard, the state government should intensify its collaboration with federal, international and non-governmental funding agencies to channel not only more funds to the state, to also make them affordable.
On their part, beneficiaries of these funds must strive to justify the confidence reposed in them by utilizing them for the purpose for which they are meant. That way, they will not only attract more funding but also erase the stereotype of Benue people as borrowers who do not bother to pay back.
Finally, as former minister of Trade, Industry and Investments, the governor will surely deploy his experience towards an aggressive investment drive to persuade foreigners, Benue indigenes at home and in the diaspora and other networth Nigerians to direct their resources to Benue State for investment.
If this renewed focus on private-sector centric approach to economic development is properly implemented, Benue; the food basket of the nation, will have reasons to expect economic prosperity and general growth.
