Interview: Frank Nweke Jr
What are the obstacles to improving corporate governance and transparency in the private sector?
FRANK NWEKE JR: It’s an inconvenient truth that our private sector continues to put up with ingrained issues such as conflicts of interest and a lack of independently minded executives. Despite some improvement, many of our companies still face weak internal and external controls. Although they may appear adequate on paper, checks and balances are often not implemented in practice, either through negligence or through aiding and abetting fraudulent behaviour. This is exacerbated by transactions and organisational structures that are designed to reduce transparency and prevent market participants and regulators from gaining a genuine picture of the firm’s condition, and a corporate culture which fosters unethical behaviour and discourages difficult questions from being asked. Our private sector should ask itself how committed it is to corporate governance and transparency. Any improvements we wish to make will start with addressing these issues.
What reform is needed to improve the climate for small and medium-sized enterprises (SMEs)?
NWEKE: The most significant cost driver for SMEs, and most other categories, is still electricity. If we are to give SMEs a chance to flourish and create employment, this needs to be tackled. We are all aware of the country’s commitment to power reform and continue to support these initiatives, but SMEs need more urgent attention. This should include fiscal exemptions and amended electricity tariffs, for example. So far, our policymakers have taken a cautious approach towards such incentives to prevent derailing progress on power sector reform, but I believe that, given their importance in employment creation, SMEs will soon see better days.
What actions can Nigeria’s diaspora take to encourage the country’s economic development?
NWEKE: Some of the obvious ways in which members of the diaspora can help are transactional, including keeping part of their savings in Nigerian bank accounts, continuing to send money home to help stabilise foreign exchange demand and providing funds for educating relatives and friends, buying Nigeria-made goods and visiting Nigeria for touristic reasons. More than anything, they can help by bringing their expertise back into our economy. Many privileged Nigerians have had the chance to be educated at world-class institutions abroad, and after years of exposure to internationally benchmarked practices, the patriotic thing for them to do now is to return home and help reform and improve our economy. One is mindful of the prevailing economic and security challenges, but it is the task of every Nigerian to put our country on the right track.
Have security issues affected foreign investment?
NWEKE: Investors all over the world dread security challenges. They are a bad omen for business and send warning signals to investors to withdraw or withhold their funds in favour of more stable environments.
Nigeria is going through a challenging time and resolution, or indications thereof, is pivotal to prevent the flight of capital and expertise. Although statistics are absent, our sentiments and observations are that businesses are being affected, and not just foreign ones.
Local businesses increasingly complain about the inability to distribute products in the north, and in some cases have had to temporarily suspend operations.
Clearly this is of concern, but we have to believe in the pay-off that the efforts of the government and citizens alike will bring towards resolution of these challenges. Also, it is important to note that the security threats do not affect the entire country, and that the majority of our territory remains accessible and safe.
Committed businesses have improved their market assessments to distinguish safe areas from the fragmented sites of conflict and continue to run profitable operations. This is the message that we need to continue to bring across in order to secure the private sector’s contribution to the betterment of our country.
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