Of the many challenges that our economy faces, which is the most burdensome? Weak Institutions tend to be rushed to the fore and centre of this conversation. In the private sector case, no example screams for help more than the inability of the responsible authorities to protect minority shareholders from being shafted by the big players. Innumerable times, companies go to the public to raise equity only for the share price to fall below the issue price three days after and remain there until the next round of capital raising. Evidence of poor governance and lack of transparency? Yes, without any doubt.
But if the fact that many domestic small businesses struggle with getting affordable credit is another challenge to growth, shouldn't we be concerned about practices in the so-called "corporate sector" that give the process of businesses' raising funds a bad name? We could begin by enlightening would-be shareholders. But there is a far bigger gap in the economy's education and skills sector. It is impossible to chart a rapid path to our economy's growth and development when large numbers (poor census figures mean we do not know exactly how many and where they are) of the country's youths are not in education, employment, or training.
Dilapidated school infrastructure and the tools and equipment that go with this are a major hindrance to development. Closing the education and skill gaps between Nigeria and the least performing country on the OECD's PISA (Programme for International Student Assessment) test, for instance, would be considered considerable progress in boosting our human capital. Still, inadequate roads, electricity, and internet access also hold back domestic economic activity - these reduce productivity and innovation just as efficiently as does low human capital levels.
There was a time when we were wont to indict our unstable political environment for the slow progress the economy was making in the battle against underdevelopment. Yet, a quarter of a decade as a democracy, and we still seem incapable of, or unwilling to put in place a domestic environment that conduces to long-term investment.
Nonetheless, the decision as to which of these variables will give the most value for any level of spend is not a quest for a quick fix. Indeed, it is safe to argue that in the drive for higher productivity levels and growth rates, there are no silver bullets. Each of the impediments to growth must be addressed, if not together, then, at least on its own merits. Nonetheless, a ranking of their respective values is critical to a proper sequencing of the initiatives that we must deploy to fix them, and an efficient assignment of the resources needed to get this done.
Which is why I would put the fight against corruption at the top of any listing of the lets to our development as a people. First, it is a cross-sectional malady - evident in all the spheres that hold us back. And even when we choose to prioritise a private sector-led development model over the state-led one, we must be alert to the fact that corruption in the private sector is no more nor less than that in the public sector.
In both sectors, it not only shifts resources away from critical growth initiatives, but it also further weakens institutions, and discourages investment. Drive along the roads in Lagos State and watch the police at work. What do you think those furtive exchanges between our gallant men and officers and commercial drivers/riders do? By pushing up the prices to end users of the products and services that our law enforcement officers privately (if not illegally) toll, we move funds most inefficiently around economic units.
This misallocation for funds is also a public sector malaise. Whether as bribes, fraudulent practices, defalcation, or outright embezzlement, this process siphons resources away from building infrastructure, providing education, or healthcare - the same needs that we have identified as essential if we must grow as an economy. Whether packaged as baksheesh in police "stop-and-search" operations, or as a "show of love" by the contractor post-contract award, corruption increases the cost of doing business in any economy (ultimately leading to higher prices for consumers), leads to a riot of below par public projects, drives away both domestic and foreign investors, and erodes the efficacy of the state. Indeed, much of the upheavals that have defined our politics since independence simply describe the trust deficit (citizens' refusal to pay taxes or constructively engage with the institutions of the state) that is one result of pervasive corruption.
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I am often admonished that it is easy to criticise; but that it is far better to proffer solutions to perceived problems. Yet, from the requirement to strengthen institutions (an independent judiciary and anti-corruption bodies can enforce accountability), through digital governance (it is more difficult to solicit for, pay and or receive bribes when key interactions between the state and the people migrate online), transparent public spending (this way citizens can follow the different spending trails), and empowering civil society and the media (a free press and active citizen engagement should make corruption more difficult), to private sector integrity, we lean on the same goodwill on the part of our state functionaries, whose absence currently provides the nutritive medium for our venal polity.
Uddin Ifeanyi, journalist manqué and retired civil servant, can be reached @IfeanyiUddin.
