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Monday, December 12, 2016

Why this government must create more Dangote

          In a period nations states around the world are competing to create their national champions, Nigeria (an African giant) is left behind. According to Wikipedia "National champion is a governmental policy in which large organisations are expected not only to seek profit but also to 'advance the interests of the nation'; the government sets policies which favour these organisations.". Examples of national champions around the world are very easy to notice and they are as varied as the nations that produce them. For example, mention South Korea and Samsung, LG, Hyundai, KIA come to mind; Name Brazil and Embraer, Petrobras, come as the nation's champions; India? You have Tata, Infosys, Wipro; Japan? has Toyoto, Honda, Sony; China on it own has Alibaba, Baidu, Haier, and Lenovo. Over the last two decades, economic power has shifted gradually from the so-called developed countries to what is now refers to as 'emerging economies'. Today's world second largest economy China was not long ago referred to as a third world nation. China was forecast to overtake the United States as the world biggest economy in not distant future. According to some estimates, it is already the world largest economy measured in term of purchasing power parity (PPP). The so-called BRICS, an acronyms coined by a former Goldman sachs executive to refer to Brazil, Russia, India, China, later joined by South Africa, demonstrated that shift in economic power from Western World to Asia and other emerging nations. Another group of emerging global players the next eleven (N-11), identified by the same Goldman Sachs executive Jim O'Neill, included Nigeria as a potential global player. How Nigerian authorities work to remain in the list is any one guess?

  Dangote group of companies employ thousands of people across Nigeria, imagine having five more Dangote-like organisation in Nigeria? How the fortune of the country will change and our unemployment menace reduce to the lowest limit possible?  But, how Buhari create more of these big employers of labor? Shall Buhari just empower the rich by given them preferential treatments such as tax holidays, import quotas, subsidize foreign exchange, and government contracts, a big NO. Government shall create a level playing ground where potential entrepreneurs succeed. Favoring one business mogul at the expense of another only harms the larger economy, as previous experiences in this country and in others show. Favoritism poster corruption and inefficiency.  A lot of those favor by, for example, Babangida military government failed to develop into employers of labour instead become crony entrepreneurs who help in sabotaging government efforts to create a competitive environment. The same thing applied to Obasanjo efforts to create South Korea type Chaebol by means of selling government properties to friends and associates. The top global brands we have today started as national champions before graduating to global champions. Countries around the world have been supporting their own national companies to compete with those of other countries as far back as one can remember. The goal is the same whether in Europe, North America or Asia, the only difference is in methodology - the path followed in achieving the goal. 

      US internet giant Google total market capitalization is bigger than many economies around the world, but it is still a private not government organisation. Other US giant companies such as General electric, Apple, General motors, Boeing, HP, and Walmart employ hundred thousands of people more than many nation states do. US internet heavy weight like Facebook, Google, Microsoft, Amazon, Yahoo, still lead the world in research and innovations while at the same time generating billions of dollars for their owners (shareholders) and the US government in form of tax. By creating our own Steve Jobs, Mark Zuckerberg, Bill Gates, Sergey Brin, Jeff Bezos, etc., Nigeria will not only create jobs and wealth but help build enduring institutions. America's Stanford,Carnegie Mellon, and Cornell Universities, were founded by wealthy citizens so are Ford, Rockefeller and MacArthur foundations. Private enterprise including small scale business is the most enduring way to create successful economy. The earlier Buhari economic managers understand this and start to put policies in-place for it realisation the better. Government agencies like CBN, ministries of finance, agriculture, commerce, labour, and mining must put heads together with other private sector actors to make this dream a reality. Smaller countries such as Singapore, UAE, and Taiwan have succeeded in creating there own champions, Nigeria shall learn from them as it moves to have its champions.