The donations and good will from Corporate Nigeria towards stopping the spread and mitigating the effects of the deadly Coronavirus have been unprecedented. During this pandemic, Corporate Nigeria stepped up and rightly so. We saw corporations build isolation centres from scratch. We saw donations of hospital beds and wards. We witnessed donations of ambulances, feeding of the vulnerable in our society through daily meals and giving of “care packs”; we witnessed the giving away free products and discounting of prices of goods and services by various corporates. The breadth of giving was also equally impressive. Virtually all industries were represented- from the Oil and Gas sector to the financial services industry, to the manufacturing sector and professional services firms.
The level of giving also spanned traditional forms of giving and the non-traditional forms. So, for example, we witnessed insurance firms, gifting insurance policies to frontline health staff, media companies airing commercials for free, airlines discounting the cost of airlifting passengers, fashion designers and textile manufacturers refitting their factories to produce face masks and telecommunication companies discounting their services or offering their call centres to health authorities for use.
Many firms and industries could not keep silent while the virus spread. The pension industry was not left out. The industry donated to the Central Bank of Nigeria/Dangote Foundation enabled Coalition against COVID (CACOVID) in addition to various initiatives to feed the elderly and vulnerable in the society and support the health system. All in all, Corporate Nigeria as a whole deserves a huge pat on the back for their social responsibilities during this pandemic.
However, it’s very important to note that corporations can only donate from profits they earn or free cash flows they generate. They can only discount prices of goods and services which they already offer profitably. So, it follows that if organisations are not operating profitably or sustainably, they will not have enough to “bail out” governments or their host communities/countries as the case maybe.
In essence, it behoves on all levels of government to do all they can to ensure that the environment is conducive and policies are favourable so that corporations can thrive, earn decent profits and have enough to be able to support when the need arises. Corporate Nigeria has shown that it can and will stand up to be counted in the face of an existential threat. What they require is a corresponding commitment from the governments that they will also rise up the occasion by removing roadblocks to growth, encouraging fair play, setting pro-business policies and stepping out of the way for the private sector to do best what they know how to do -Drive sustainable growth.
Having said that, the COVID pandemic presents an opportunity for all to relook at and rewrite the unwritten rule between the private sector and the government. The unwritten rule reads (or should read) something like this:
“We the government commit to set policies and enact regulations and laws that enable the private sector to thrive. We will ensure that the private sector has all it needs (infrastructure, policy direction, security, functioning educational system, an effective and fair justice system) to employ citizens, earn decent profits and operate within a fair and just business environment.
We the private sector agree to use the environment created for us to start and grow decent companies that add value to the society and create decent products and services with the right quality and price. We will pay fair wages for citizens employed, adhere to the policies set by regulators and agencies and pay our fair share of taxes and levies. We also commit to be socially responsible by adhering to the highest standards of environmental and governing standards.”
On paper, this reads well, but in practice it almost always seems skewed against the private sector, especially in countries like Nigeria. In a situation where corporations have had to provide buses or means of transportation for their staff during the pandemic, buy data, provide for diesel to power generating sets and, in some cases, provide generating sets to power their staff’s homes. These companies are still expected to provide hospitals, beds and equipment for the health workers, insure health workers etc. This takes the contract a little too far and is not sustainable in the long run.
Whilst corporations are not necessarily complaining about having to support in times of crisis, the COVID pandemic provides us an opportunity as a Nation to look at this mode of engagement between the private sector and the government closely again and begin to make needed adjustments on both sides.
With a number of companies having to make the painful decision to lay off staff, reduce salaries, cut down capital expenditure and look for creative ways to reduce costs, it is only fair that the other partner in the contract does the same. For example, we have seen that public servants can indeed work remotely. We need to ask ourselves, if the government agencies require all their offices and buildings? Perhaps the country can be better served by selling or leasing them to free up cash? Can we begin to move to an e system of government, where citizens can procure passports, licenses, permits and government IDs without physical contact? This removes the need for buildings and non-essential staff. Can we begin to see which departments of government can be merged or made to function in a part time capacity?
These moves and more will enable the country to free much needed resources for development. As the pandemic has shown, Nigeria was not prepared for this crisis. The bad state of our health system was worryingly exposed. The government needs to use this crisis as an opportunity to conserve cash and cut discretionary expenses and invest in social development. They also need to ensure that they continue to provide a favourable environment for the private sector to act as an engine for growth. Failure to do this might mean Nigeria might not be as fortunate in future crises, as the corporates themselves might not even have enough to bail themselves out and the consequences will be dire for the Nation.
The times we live in definitely call for a change in business models for many industries and organizations, but also a drastic change in the governance model for governments all over the world and Nigeria is no different. As the unwritten contract above shows, we need each other in order for society to run efficiently for the benefit of all.
Whilst appreciating the leadership provided by governments at all levels during this pandemic, it’s time for radical changes to the models of government spending and efficiency, so that we are better prepared for future crises. On this part of the contract, we assure the other partner in this unwritten code of continued support from the private sector of which the pension industry stands as an active member.
Oguche Agudah
Oguche Agudah CEO, Pension Funds Operators Association of Nigeria (PENOP)
