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Centre for African Entrepreneurship and Leadership

The Centre for African Entrepreneurship and Leadership (CAEL) coordinates capacity building activities that focus on entrepreneurship and leadership, and provides opportunity for evidenced-based research and policy for Africa.

Nigeria: beyond protectionism and import substitution By Seun Kolade

The dramatic fall in oil prices, and the even more dramatic depreciation of the naira, has left Nigerians scampering for answers and searching for ideas on how to arrest the nation’s slide down the precipice. Governments, especially at the state level, are struggling to pay salaries. The private sector has been hit, with thousands losing their jobs. The good thing now is that there is a renewed sense of urgency about the need to address the long-standing problem of the nation’s heavy dependence on crude oil receipts. Amid all the doom and gloom, Nigeria now has a chance to move away, once and for all, from the “crude” economy.

As is often the case with Nigerians, social media has gone on overdrive, with armchair critics and beer parlour “experts” proposing ideas and solutions on how to move the economy forward. Much of the popular rhetoric has centred on protectionism and import substitution. A well known senator of the federal republic has released a lot of posts urging Nigerians to buy Nigerian made products. He is following up his “patriotic” posts with big publicity about his efforts to “lead by example”. He is buying new cars assembled in Nigeria. And so on. Others have pointed out that his own history as a businessman has been about promoting and selling foreign products, not least through his well-known Silverbird Cinemas.

There is merit in some form of temporary protection for local enterprises, and in the idea of a nation producing to cater for its domestic needs. Import substitution is often associated with developing countries, particularly as it occurred during the years of the Cold War, through the 1980s. In reality, even a country like the US has, from time to time, embraced the idea of import substitution as part of a strategy to promote national and regional development. That was the case in the “Buy America” campaigns in the 1970s. Even within the US, states like Oregon (through its Oregon Market Place initiative) and Massachusetts (through its “Community Supported Agriculture”) used import substitution to stimulate local economies and stem the tide of capital outflow to the tune of billions of dollars.

However, the fact is that protectionism and import-substitution are not, on their own, credible economic strategies. Such an approach is spiritless and lacking in vision and ambition. It is not sustainable in the long term. No nation that has the aim of selling its products to the outside world should shut its market to same. The logic is simple and straightforward.

A nation like Nigeria can however kick start its comparative advantage by combining temporal policies of protection, say in in select industries, with a rigorous programme of quality control, promotion of innovation, and development of advanced human capital. Without the latter strands, protection is not only futile, it is ultimately inhibiting. Consumers are fundamentally the same everywhere. The consumer is first and foremost practical, before he is a patriot. He wants to buy a product that is functional, good value for money. It may be a Korean or Tibetan product. His main concern is whether it is at a good price, and does its job.

Take the example of the much-talked about Innoson cars. So far all the talk have been about the fact that it is produced in Nigeria, and little or nothing about the competitiveness of its price and the quality of the product. Yet this is the one area where government can step in, with support for quality assurance, and temporal subsidies for local firms. Industries should be encouraged to embrace a forward-looking approach by which they can look to export their products overseas within some years of local production and sales.

An export-oriented economy is more ambitious and sustainable in the long term. It is, yes, more challenging, as it requires especially high levels of specialised human capital to drive innovation and change, as well as a high level of physical capital, especially in terms of energy and transportation/communication infrastructures. Yet it is the way of the future, for nations aiming to achieve and maintain competitive advantage.

One argument that is often made is that developing countries are at a distinct disadvantage as they struggle to achieve competitive advantage. It is said that because of the weakness of institutions and the derelict state of essential infrastructures, the goal of an export-oriented economy is too ambitious, almost impossible.

Now, while we should not make direct comparisons, the curious fact is that it is the nations that have suffered significant social and economic crises that have, in fact, gone on to achieve competitive advantage within a short time. Until 1989, Germany was divided in half. Japan suffered heavy defeat in the Second World War, as well as South Korea. It is true that other things were at play, like Germany’s historical position in human capital development, or Japan’s water-tight social organisation of production. The inescapable fact is still that these nations emerged from crises to become hosts of world leading, competitive primary industries in manufacturing and services, etc.

Nigeria’s crisis point is actually a critical moment of opportunity. The next 10 years may decide the subsequent 100, in terms of economic transformation and industrial development. With the right policies, incentives and infrastructures, Nigeria can unleash the productive capacity of its 180 million people, with ambitious, innovative entrepreneurs driving the “Nigerian miracle”. Alternatively, it can unleash hitherto suppressed demons, precipitating a nightmare for which Boko Haram insurgency will be but a dress rehearsal.

There is no middle ground. Given the delicate state of the polity, with millions of youth unemployed – hungry and angry, the option for half measures is now gone for good. Its either an economic miracle. Or a tragic nightmare.

A version of this article was originally published by Premium Times, Nigeria’s foremost online news media, on 23rd February 2016. You can find the version at http://blogs.premiumtimesng.com/nigeria-beyond-protectionism-and-import-substitution-by-seun-kolade/

Can entrepreneurship education stem the tide of poverty and terrorist violence? by Seun Kolade

In April 2014, the Boko Haram terrorist group abducted 234 school girls from the North eastern Nigerian town of Chibok. This tragic episode captured the attention of the international media, with UK prime minister David Cameron, United States First Lady Michelle Obama and Nobel-prize winning school girl Malala Yousafzai joining a host of other celebrities in the international campaign to “Bring Back our Girls”. As at the time of writing, the whereabouts of the girl is still unknown.

The Boko Haram insurgency had started well before 2014. The group, originally known as Jama’atu Ahlus-Sunnah Lidda’AwatiWal Jihad (Arabic for ‘People Committed to the Prophet’s Teachings for Propagation and Jihad’) was formed in 2002 by radical cleric, Mohammed Yusuf. Over the years it came to be known by its core teaching that “western education is forbidden”. Yusuf was extra-judicially executed by security forces in July 2009, and the group became more violent. The bombing in August 2011 of the United Nations Building in the capital city of Abuja confirmed a new dimension of Boko Haram tactic of targeting international buildings, government property and crowded places in series of suicide bombings. Over the years, these attacks have left scores of thousands dead, and millions of people displaced. Internal Displacement Monitoring Group (IDMC) estimates that 3.3 million people have been internally displaced due to conflicts in Nigeria. Of this, 800,000 children have been displaced by Boko Haram violence alone.

The rank of Boko Haram group is filled with the army of uneducated, unemployed and impoverished youth. They have become disillusioned with government, disaffected with the political elite, and are prime targets for Boko Haram recruitment drive. This is the background to the intervention launched in 2011 by the Centre for African Entrepreneurship and Leadership (CAEL), University of Wolverhampton, UK.

Presenting a counter narrative to the Boko Haram propaganda that “western education is forbidden”, CAEL’s project was based around the core idea that entrepreneurship education is the means by which unemployed youths can acquire critical skills to plan and develop their businesses. With these skills, it is hoped that these new ventures could grow and expand to become employers of labour, in the process contributing to national strategy to reduce unemployment and alleviate poverty.

In 2012, CAEL launched its pilot project in partnership with the Centre for Entrepreneurship and Enterprise Development (CEED), University of Maiduguri. 190 people were given intensive entrepreneurship training. At the end of the training, a Business Plan competition was launched, and forty trainees with the best Business Plans were given grants for new start-ups. Four years after, the owners of these enterprises were interviewed to assess the impact of the training provided.

The participants were all emphatic in their assessment that the training contributed significantly to their improved knowledge and skills about business planning, record keeping, innovative advertising and improved approach to customer retention and customer service. Mohammed, one of the participants in the training, commented that:

The training helped me a lot as I gained a lot of knowledge about business strategy. Before the training at the University of Maiduguri I did not have much knowledge about the business. I know better now how to plan, invest my money, and motivate our customers. After the training I know better how to deal with companies who supply our goods. Before then I did not have much knowledge about how to control and manage the business. My business was growing quite well until the insurgency grew worse… The training helped me to advertise my business differently. So I went to the small hamlets and villages to get people to sell and buy my goods. Sometimes I give them my complimentary cards, encouraging them to call me. I also offer discounts for the retailers, to encourage them.

One of the women participants, Christiana, highlighted another crucial aspect of the intervention: the training of trainers who can then go on to others, often in the more remote areas. She thinks more investment is needed in this area, especially for women entrepreneurs who have been compelled into micro-enterprise by the necessity of poverty and violence, and are desperately I need of training:

I think we need more women who can train others. It is not enough to just give them money for subsistence. I think women should be given equipment and other support in kind, rather than cash, because if you just give them money, they might be tempted to purchase other things other than what they need for the business.

For these participants, entrepreneurship education is as important as military strategy, if not more so, to stem the tide of terrorists’ recruitment and violence. Mohammed observed that “the reason why Boko Haram has gained a lot of followers is because some people are jobless and others are illiterate.” Another participant, Modu, asserted that “entrepreneurship can help eradicate poverty” by focusing attention on skill training for young people “so that they can do something for themselves”. He, however, suggested that for this to work government need to show more commitment, for example by providing young entrepreneurs with tools and start-up funds, in addition to adequate training. He says it is important to make young people understand that “government cannot employ everybody. If people are made to realise that it is not through government that you must eat. You must do something with your hands. You must do something to sustain your life, and even help sustain the lives of other people.”

The trainees spoke of their struggles and triumphs, and their high ambitions to grow and expand their business, even in the volatile environment of insurgency violence. There is no sense of resignation, or desire to seek quick easy escape from their violent ridden community. They are motivated by the prospect and hope of becoming successful entrepreneurs, not the fear or desire to become refugees. Christina recently won an international award for her fashion design business, and her clothing lines are now being advertised in Malta and Amsterdam. Mohammed speaks of his plans “to expand to other locations where there is good demand for my goods. I want to have new branches in Kano, in Yobe (because Yobe is near Maiduguri). I will have another in maybe Bauchi, which is also near. I hope to employ like 50 people in the next four years.” Modu says that: “For now I have only one branch. I want to have like five branches within my locality. If possible I also want to expand my business to other states within Nigeria. I also want to employ more people. We are currently doing electrical work. We also want to incorporate building and carpentry work. We are hoping that in the future if government for example want to build an estate, we’ll be the one to handle such. By doing this we will be able to employ more workers.”

This intervention has demonstrated that, given the right support in terms of training and tools, people in conflict ridden environment are capable of making things happen in spite of destructive violence unleashed by terrorists.

In a recent interview, The Vice Chancellor of the University of Maiduguri, Professor Ibrahim Njodi singled out the University of Wolverhampton for special praise for their vision and courage to partner with the university at a time other foreign institutions and organisations were scared away because of the insurgency. In one of the earlier visits, Njodi said, the partners from Wolverhampton “…spent about 23 days with us working on Centre for Entrepreneurship and Enterprise Development which is now… coming up so strongly”. Professor Geoff Layer, Vice Chancellor of the University of Wolverhampton, said: “we are actively engaged in communities and societies around the world. This is why we have our Centre for African Entrepreneurship and Leadership, a new centre that we have set up to focus specifically on developments around needs within Africa, around entrepreneurship, how we bring some of our experiences, some of our learning, and share with organisations.”

The University of Wolverhampton through the Centre for African Entrepreneurship and Leadership is currently embarking on a new phase of intervention with the partners at the University of Maiduguri. In addition to Maiduguri, there is an ongoing partnership with the Entrepreneurship Centre at Bayero University, in the Northwest city of Kano, another city affected by the Boko Haram insurgency. The progress has been encouraging, but there is still a lot to be done.

The Centre for African Entrepreneurship and Leadership(CAEL), University of Wolverhampton, will be formally launched on Monday, November 30 2015 at The Lord Swraj Paul Building, City Campus Molineux (North), Wolverhampton For more about this visit CAEL’s news page .

 

Dr Seun Kolade is a postdoctoral research fellow with the Centre for African Entrepreneurship and Leadership, University of Wolverhampton

Between cash transfers and enterprise support by Seun Kolade

Nigeria’s newly elected vice president stated recently that the government need to, as a matter of urgent necessity a “conditional cash transfer” programme by which those without jobs can be given a sum of N5,000 a month to help them to survive and meet their basic needs. Among other things, he stated that “if we have to wait until the industries are functional and the government is able to provide jobs for everyone, most people will be dead by the time we get to that stage”.

The government’s proposal as articulated by the vice president is well intended, but it is wrong headed all the same.  The idea of social protection is in itself a noble one. The state has a duty to protect the most vulnerable in society, and that includes the infirm, the sick, the children and the destitute. For the poor who are able bodied and often possessing basic skills, the goal of the state is to empower them so they can get out of poverty. That approach achieves several goals in one move: it raises the overall productivity of the nation, promotes the welfare of citizens, and advances the cause of human dignity.

Alright, let’s take a step back to further examine the “conditional cash transfer” plan. By several estimates the number of Nigerians living in abject poverty is in tens of millions, some say 70 million. N5,000 a month is pittance, but let’s work with that. In fact let’s assume that the very poor among the poor are 20 million, the government will still require 100 billion naira a month just to give out N5,000, which is really not enough to keep people alive with food and stuff. That is 1.2 trillion naira for the year. The big question is not so much in the amount of money, but in the sustainability of such a plan. How long can government keep up such a programme of handouts.

The essential nature of handout is that it is incapable of, or at the very best has weak capacity for, regeneration. You spend it on consumables, and it is gone forever. It can be argued, albeit tamely, that the money is serving some economic purpose since it is being circulated within the national economy. However, if you are to put in on the productivity scale of 1 to 10, the money cannot possibly achieve more than a score of 2, because it is achieving much less than a small fraction of its potential. One, because it is not given in bulk, there is little the poor recipients can do with it by way of profitable investments. Two, because the poor are disadvantaged with regard to access to information and opportunities, the potential for investment is significantly hindered.

Consider, then, an alternative plan where governments organise the poor in groups of five each, say. Each group, assisted by a dedicated team of advisors, come up with a business plan in selected sectors of the economy- agriculture, light industries and basic services. The sectors are chosen to reflect appropriate skill sets of the poor. The government then provide each group with, say low to 0% interest loan of N500,000 to N1million each, an equivalent of less than N10,000 each for every member of the group. The fund can be released in batches as incentive for progress and performance of the enterprise, and the group can be given up to two years or so to repay the loan. Ideally then, in two years, the government recovers the fund to use for another cycle of the enterprise funding, or indeed for one or the other intervention programme.

This sketchy idea is of course not without its challenges and pitfalls, the biggest of which is the problem of default.  Even with these potential pitfalls, there is no good excuse to refuse to try, and you only need bits of imagination and creativity to anticipate and mitigate potential challenges. One obvious example is to use a public-private platform to disburse the funds.

The truth is, an enterprise funding initiative is a million times better than a free cash transfer programme. Where a cash transfer diminishes and condescends to the poor, an enterprise funding programme empowers and elevates them. Where cash transfer cultivates dependency, enterprise funding stimulates productivity. Cash transfer is parasitic, enterprise support is catalytic. The one consumes capital, the other generates capital.

Finally, let’s consider the political logic. In terms of impact, cash transfer is short term and short sighted. Enterprise funding is long term and far reaching. Cash transfer is unsustainable, especially in a less developed economy like Nigeria. It is also problematic in terms of the politics of selecting recipients and disbursing funds. As past experiences have shown, the process is a fertile ground for corruption, fraud and waste. On the other hand, enterprise funding is less problematic, and the challenges of implementation are easier to fix. Moreover it impacts the lives of more people in a real and lasting way.

It is not, as vice president Osibanjo suggests, the role of government to create jobs. It is rather their responsibility to create the environment and provide necessary supports and resources for businesses to flourish and for citizens to make positive contribution to the economy and to society. There is much the government can do. I hope they get it right.

 

 

Book Review: Pedagogy of the oppressed By Seun Kolade

Author: Paulo Freire      Publisher: The Continuum Publishing Company                    Date: 1970

When Paulo Freire wrote Pedagogy of the Oppressed, the world was in the middle of fierce ideological war. The iron curtain was firmly shut, and the fire of anti-colonial struggle was burning wildly in the countries of Africa and Latin America. Nine years earlier, the Americans had invaded Bay of Pigs, and Frantz Fanon had published Wretched of the Earth, shortly before his death. It is therefore a telling commentary on the enduring nature of the work that Pedagogy of the Oppressed has continued to gain resonance and relevance today, especially outside its (apparent) immediate constituency of political philosophy and activism, to the world of theory and practice of education.

The book itself is organised into four chapters. In the first chapter, the author explores the nature of the historical struggle between the oppressed and the oppressor, making the case for the pedagogy of the oppressed. In chapter two, he analyses what he called the “banking model” of education, which is cast as the favourite method of the oppressor, by which they seek to “deposit” knowledge, define the reality of the oppressed and contain their ambition for freedom. This is contrasted with the “problem-posing model”, in which both the teacher and the student are recognised as co-creators of knowledge. The next chapter then explores in greater detail the “dialogic” method used in “problem-posing” education, and the various stages of investigation. In the final chapter four, Freire examines at length the struggle between mutually opposing dialogic and anti-dialogic model; the former an instrument of liberation, the latter an instrument of oppression.

Freire sets out the fundamental principle that “concern for humanization leads at once to the recognition of dehumanization, not only as an ontological possibility but as an historical reality”. Both humanisation and dehumanisation are real alternatives for people, the latter being a negation of the former. In a classical collision of opposites, dehumanisation affirms and validates humanisation by negating it. Dehumanisation is therefore a “distortion of the vocation of being more fully human”. In the noble struggle to regain their humanity, the oppressed cannot afford to become like the oppressor, but rather the liberator of both the oppressor and the oppressed. The oppressor is himself “dehumanized because he dehumanizes others”, but it is only the oppressed, and not the oppressor, that is capable of liberating himself and others. This, then, is the historical task to which the oppressed must commit.

To succeed in this task, the oppressed need a critical pedagogy, by which they can objectify the oppressor and the world of oppression in order to transform them. This praxis- this combination of critical reflection and action- must begin with a process of self-discovery, first as members of the oppressed class, but also as bearers of the “image of the oppressor” which they have internalised as a model of being. For it is this duality which makes the oppressed yearn for freedom, yet fear it. It is this internal contradiction that summons the oppressed to liberty, yet tempts them to become like their oppressors. The conflict for the oppressed, says Freire, “ lies in the choice between being wholly themselves or being divided; between ejecting the oppressor within or not ejecting them; between human solidarity or alienation; between following prescriptions or having choices; between being spectators or actors; between acting or having the illusion of acting through the action of the oppressors; between speaking out or being silent, castrated in their power to create and re-create, in their power to transform the world.”

Given that the task of transforming the situation of oppression involves struggle and resistance, is violence inevitable? To this Freire offered that violence has already begun with the establishment of “the relationship of oppression”. Even when it is sweetened by false generosity, “any situation in which “A” objectively exploits ‘B’ or hinders his or her pursuit of self-affirmation as a responsible person is one of oppression, and in itself constitutes violence”. For good measure, “any situation in which some individuals prevent others from engaging in the process of inquiry is one of violence”. Violence as such “is initiated by those who oppress, who exploit, who fail to recognize others as persons—not by those who are oppressed, exploited, and unrecognized. It is not the unloved who initiate disaffection, but those who cannot love because they love only them- selves…”

Turning his attention now to the Teacher-Student relationship, Freire says that the prevailing model of education is one in which the teacher is cast in the role of the narrator in an act akin to depositing in a bank. The student, on the other hand is cast as “container” and “receptacle”, uncritically absorbing, and then regurgitating, the teacher’s deposit of knowledge. In this model, “the teacher presents himself to his students as their necessary opposite; by considering their ignorance absolute, he justifies his own existence”. The students, submerged in this reality, calmly accept their fate as justifiers of the teacher’s existence. This type of “education” is therefore an instrument of the oppressor to make the oppressed accept and adapt to the situation of oppression.

Problem posing education is entirely opposite. In this model, both the teacher and the student are seen as co-creators of knowledge, learned as well as learning. Here, “the teacher’s thinking is authenticated by the authenticity of students’ thinking”. The student is therefore not merely subordinated to the teacher, but both the teacher and the student are jointly responsible for the process of learning and creating knowledge. While the teacher may have attained a higher level of consciousness of themselves and of the world, they can only help raise the consciousness of others in an ongoing process of dialogue, not by “depositing” knowledge in the student.

This dialogic process is in clear contradiction to the anti-dialogical method of the “banking” model. The one entails a practice of freedom; the other, of domination. “Banking education resists dialogue; problem-posing education regards dialogue as in-dispensable to the act of cognition which unveils reality. Banking education treats students as objects of assistance; problem-posing education makes them critical thinkers. Banking education inhibits creativity and domesticates (although it cannot completely destroy) the intentionality of consciousness by isolating consciousness from the world, thereby denying people their ontological and historical vocation of becoming more fully human.” In the dialogic process of problem-posing education there are “neither utter ignoramuses nor perfect sages. Only learners.

Paulo Freire says nothing in this book about which methods of assessment and examination is suitable for the “problem-posing” model, or indeed about how the dialogic method can justify the role of the examiner. Moreover, what is the place of authority and discipline in the student-teacher relationship? It is a curious thing, in this respect, that communist countries like China seem to discourage challenge to authority, emphasizing instead discipline and memorisation, compared with the apparently more liberal approach of western countries. Admittedly, this is an introductory, exploratory book, but there will be ongoing debates about whether or not “problem-posing” education can accommodate some “banking” elements, especially in the initial stages, say with respect to summative assessment of students. Nevertheless his central thesis is highly stimulating and thought-provoking, even if it is, in many respects, a re-invention of the ancient method of Socratic dialectics.

“Go hungry, break the law, or create wealth”: thoughts on poverty, conflict and entrepreneurship activities in Nigeria By Paschal Anosike

 Nigeria is amongst the top ten largest countries by population, and more than half of the world’s 7.2 billion population is under 35 years old. About twenty-four per cent of nearly 170 million Nigerians are today either under-employed or unemployed. Of this percentage, the youth sector is the worst hit. Youths (ages 15-35) account for nearly sixty per cent of the Nigerian population, which represents thirty per cent of the Nigerian workforce – yet, thirty-eight per cent of them remain unemployed. One obvious implication of this is that most Nigerian youths who are either underemployed or unemployed have little or no chance of competing globally. A more worrying implication is that by 2020 and beyond, most Nigerian youths will become parents themselves with little or no means of sustenance – therefore, it is doubtful how they would contribute to achieving the Vision 2020 goal.

When individuals lack the economic means to sustain their wellbeing or that of their families, two things become inevitable – they either go hungry or they break the law. This situation presents a very serious challenge for Nigeria. Entrepreneurship development could mitigate this challenge.

Although the actual size of entrepreneurship activity in Nigeria may never be accurately estimated, entrepreneurial activity in Nigeria is not only triggered by a desperate need for an individual to obtain means of subsistence for his or her family, evidence suggests that entrepreneurship activity have been recreated and expanded under diverse economic circumstances. In particular, entrepreneurial activity in Nigeria has evolved from agriculture, manufacturing to embrace entertainment, retailing and more recently the provision of repair and maintenance services in mobile telecommunications sector. Religion also plays a significant role in the expansion of entrepreneurial activity in Nigeria. Through the growing influence of “prosperity gospel”, a significant swathe of the Nigerian unemployed has resorted to evangelism as a means of achieving economic prosperity. To better understand the dominant form of entrepreneurial activity in Nigeria, I divide entrepreneurship into two types   – opportunity-based entrepreneurship and necessity-based entrepreneurship.

With opportunity-based entrepreneurship, an individual seeks out opportunities and chooses to pursue them in order to improve his or her wellbeing and the community. Necessity-based entrepreneurship is a situation in which one is left with no other viable option to earn a living, not as a choice, but out of compulsion seeks out any means of survival in order to avoid starvation and criminality. The distinguishing characters of these two entrepreneurship forms are the disposition or orientation of the individual at a particular moment in time as a result of specific trigger to act vs a deep-rooted desire for greater self-satisfaction and autonomy. Sadly, the dominant feature of entrepreneurship in Nigeria today gravitates towards necessity based entrepreneurship. The challenge is therefore to encourage an opportunity-based entrepreneurship to take a firm root in Nigeria.

As an idea, entrepreneurship is synonymous with personal and behavioural attributes namely, creativity, innovation, experimentation and risk- taking behaviours. These attributes are manifest through the individual because of a desire to achieve self-satisfaction and autonomy. Autonomy as a dimension of entrepreneurship is a state of independence that influences an individual to follow through a conceived idea. Creativity and innovativeness explain the individual’s propensity to orchestrate a novel or uniquely demanding achievements. Experimentation and risk-taking connotes the individual’s willingness to seek and seize opportunities even in the face of uncertainty. A tolerance for uncertainty is part of entrepreneurship and is manifest through willingness to do something and the commitment to see it through without a guaranteed outcome.

Sadly, the situation that emerges in Nigeria suggests that the individual as an “entrepreneur” has yet to exhibit the above attributes. This is not to say there are no examples in the Nigerian society where these attributes have been manifest. Indeed, there are. The likes of Aliko Dangotes, the Wale Adenugas and the Pascal Dozies are only few examples. These examples are a testament that given the right conditions, Nigerians possess and can exhibit the much-needed opportunity-based entrepreneurial mind-set. The key question, of course, is whether we are a society of individuals willing to seek out opportunities in order to enhance our wellbeing and that of our communities without relying on the State.

Responding to this call will force us to think about the host of other pertinent but problematic challenges in the relationship between the Nigerian individual and the State. The issue of a perennially lack of the investment climate and the poor infrastructure remain a moral conundrum for the Nigerian State and a dilemma for the Nigerian entrepreneur. In this, perhaps, the enduring words of former American President – John F. Kennedy offer a hint for a reflection: “Man holds in his mortal hands the power to abolish all forms of human poverty”, he went on: “ask not what your country can do for you – ask what you can do for your country”. To these I add – what will make Nigeria great is not so much as what it can give to the individual, rather, as an individual what we are willing to sacrifice and give for the good of Nigeria.

 

Higher education in Nigeria: is more less? By Seun Kolade

On Tuesday 14th July 2015, the body responsible for coordinating entry examinations to higher institutions in Nigeria announced its decision to lower the minimum score for university entry to 180 marks. This is arguably the lowest it has been for decades, and the announcement has been met with strong criticisms by Nigerians on social media, many lamenting falling standards and lack of adequate attention and commitment from government.

In spite of the increasing level of graduate turn out in Nigeria, unemployment and poverty have remained very high, and graduate unemployment in particular has worsened in recent years. According to official statistics, unemployment rate increased from 11% in 2006, to 24% in 2011, and a great number of those employed are under-employed (World Bank 2013). The group mostly affected by the unemployment crisis is the youth, with one report estimating that the unemployment rate among the Nigerian youth is at least three times the national composite average, and three times the average rate for other sub-Saharan African countries. Moreover, it has been estimated that about 71% of the Nigerian population are living in relative poverty .

Graduate unemployment constitute a significant part of overall youth unemployment in Nigeria, and it is an especially disturbing statistics considering one of the key objectives of universities is to produce graduates with requisite knowledge and skills to fill the manpower needs of the national economy (Federal Ministry of Education 2008). A recent assessment of the quality assurance process in Nigerian universities has revealed significant, sometimes drastic, reduction in quality of student recruitment processes, examinations, and staff appointment and promotion, among others. These were especially noticeable from the 1990s, and some have attributed the trend to governments’ reduced attention and investment on education, and the associated phenomenon of “brain drain”, with many academics leaving Nigeria for greener pastures overseas. Increasingly in recent years, employers have complained about troubling un-employability of Nigerian graduates. Investigators have reported that a growing number of the Nigerian university graduates are weak in analytical and communication skills, and are especially deficient in entrepreneurial skills standards of higher education in the country. Already, many stakeholders in the higher education sector and industry have expressed concerns about the quality and relevance of higher education to requirements and needs of the national economy.

Since the start of the fourth republic in 1999, the number of higher institutions, and the number of students enrolled in them, has increased significantly. This is partly due to government’s liberalisation of the higher education sector, and the attendant licensing of private universities. This report for example indicates that, between 2003 and 2007 alone, the number of universities in Nigeria grew from 53 in 2003 to 128 in 2013 accordingly, student enrolment and graduate turnout have grown considerably over the years, with university enrolment increasing from 780,001 in 2005 to 1,013,337 in 2009.

It may be a little simplistic to attribute the problem of graduate unemployment mainly or solely to lower quality of higher education and turnout, in terms of analytical and communication skills. The current structure of the Nigerian economy is such that there exists limited opportunities for graduate jobs. The national economy is dominated by heavy reliance on crude oil, and successive governments have given very little attention to other sectors of the economy. In recent years there have been some growth in the services sector, but the manufacturing sector is severely under-developed, and there has been no progress in Agriculture, among others. As such, even highly academically gifted graduates are often faced with the challenge of very limited opportunities for employment.

In the light of the foregoing, a key part of on-going debate and recent policy intervention is the renewed emphasis on entrepreneurship education. It is suggested that stakeholders in the higher education sector need to embrace a paradigm shift that reflects the peculiarity of the Nigerian experience. There is, it is said, need to put greater emphasis on prospects for new small-scale business start-ups across the whole spectrum of the nation’s economy. Instead of waiting for employment opportunities, graduates can actively explore opportunities to be employers of labour.

In order to achieve this paradigm shift, there is the need to revamp the structure and content of curricula in the universities. Specifically, there is a critical need to invest resources and personnel in to integrate entrepreneurship content into university courses, among other strategies to emphasize entrepreneurship in the curricula.

To grow the wealth of nations, fix property rights! By Seun Kolade

A review of “The mystery of Capital”

Author: Hernando De Soto

Transworld Publishers, 2000

276 pages

“The hour of capitalism’s greatest triumph is its hour of crisis”. This is Hernando De Soto’s opening statement in what has now become a classic of property rights. He starts with a brief description of the “triumph” of capitalism and the end of the cold war. “Capitalism”, he says, “stands alone as the only feasible way rationally to organise a modern economy. At this moment in history, no responsible nation has a choice”. So then, the “responsible” nations of former communist and third world territories embraced capitalism with considerable enthusiasm, following the fall of Berlin Wall. And wait for it: they came away with bitter disappointment. And how did the leaders and Capitalist America and Europe respond? With the same old “wearisome lectures: stabilize your currencies, hang tough, ignore the food riots, and wait patiently for the foreign investors to return”

Why has capitalism prospered in the West, and generally failed elsewhere? That is the Big Question De Soto sought to address in this book. Of course, 15 years after it was originally published, some of the claims are now dated, but the key ideas continue to gain traction in policy and development research circles.

De Soto empathically rejects the suggestion that “Third World” peoples are lacking in entrepreneurial spirit or market orientation. On the contrary, he says, the inhabitants of poor countries are highly entrepreneurial, and have such a ready grasp of technology that American Businesses, for example, are “struggling to control the unauthorised use of their patents abroad”. So then, again, why has capitalism failed so woefully in these poor countries?

De Soto’s big idea is “Property”, and with it the explanation of the inability of these poor nations to produce capital, which is in turn the “lifeblood of the capitalist system”, the means by which it “raises productivity of labour and creates the wealth of nations”. The curious paradox is that most of the poor already possess the assets to make a success of capitalism. By one estimate, “the value of savings among the poor is… forty times all the foreign aid received throughout the world since 1945”. The poor have things, “but they lack the process to represent their property and create capital. They have houses but no titles; crops but not deeds; businesses but not statues of incorporation.

At this point, De Soto introduces his “five mysteries of capital”, and these will be the titles of the next five chapters: The mystery of missing information; the mystery of capital; the mystery of political awareness; the missing lessons of US History; and The Mystery of Legal Failure.

The author now turns his attention to the phenomenon of “dead capital”, and how this is caused and aggravated by the lack of legal documentation and formal representation of property held by the poor. In Haiti, for example untitled real-estate holdings were, as of 1995, found to be worth 158 times the value of “all foreign direct investment in Haiti’s recorded history”. At the time of writing, De Soto and his team estimated that the total value of real estate held but not legally owned by the poor was $9.3 Trillion, which was “about twice as much as the total circulating US money supply”! The poor face great obstacles to legally register their property and businesses. In Haiti, it takes an estimated 19 years to go through all the bureaucratic obstacles to legally own a land! And what is not formally documented, legally owned, cannot be “taken to the bank”. It is dead capital, and cannot be transformed into usable forms to facilitate or promote economic productivity. The vast assets of the poor, because they are not fixed in a formal property system, are very difficult to move in the market. Formal representation makes assets more fungible.

However, it is instructive that the capitalist nations of the West have in fact been through the process of transition from undocumented and informal arrangements to legally documented property rights, and this formal representation has been instrumental for economic progress.  In Britain and the rest of Europe, the process took about three hundred years of tumult and turbulence, during which the great numbers of informal settlers and unregistered entrepreneurs came in constant conflict with the law. Ultimately, officials and kings came to the final recognition that the problem was actually with law, and not with the people. The extralegal settlers and businesses had come to stay, and the law needed to catch up and integrate them. Nowadays, the idea of fixed, formalised assets is taken for granted in Europe, and this is partly why the economic preachments of the West often fail to address the peculiar circumstances of the developing world, because certain fundamentals, including property rights, cannot be taken for granted in these poor countries. For example, in sub-Saharan Africa, the vast majority of property held by the poor are untitled, not legally owned, and cannot be used as collaterals in banks, or in other legally binding business transactions. Millions of these innovative entrepreneurs are locked out of the mainstream, left to depend on scraps and crumbs in the informal sector.

The United States has, relatively more recently, gone through a similar process. If we set aside, for a moment, the tragic episode of land grab from native Indians, European settlers in North America were squatters who simply occupy tracts of lands, often secured by a few deadened trees at the boundaries. For a long time they were deemed illegal trespassers by the official governments of the colonies. After years of bloody conflicts between the squatters and the government, they ultimately came to formal agreements on legal documentation of the squatters’ holdings.

Paradoxically, a major obstacle to needed reform in poor countries today is the legal system that is not only unfit for purpose, but also resistant to change. De Soto does not like lawyers, obviously. He considers lawyers to be, by default, stubborn defenders of the status quo against the practical realities of human experience. In a sense, De Soto seems to be saying, by way of an old cliché, that the law was made for man, and not man for the law. A legal system that keeps majority of the population out official mainstream is bound to fail, sooner or later. A functional law should reflect the reality of how people live, not hinder or stifle human enterprise and creativity. Lawyers should support, and not stand in the way of, necessary reform.

As compelling as De Soto’s arguments are, it is impossible to shake off the nudging feeling that the challenge is a bit over simplified, and that his prescribed solution is a little over-stated. The challenge of under-development may be more complex than antiquated property laws. There are other institutional and leadership challenges. Even at that, his central thesis is persuasive: get rid of artificial, antiquated barriers and give people the rights and opportunities to make the best of their assets. Then stand by and watch them make great, unprecedented contribution to “the wealth of nations”.

Welcome to CAEL’s blog!

This blog features contributions and viewpoints about on-going research and various intervention programmes being run by the Centre for African Entrepreneurship and Leadership (CAEL).

CAEL coordinates capacity building activities that focus on entrepreneurship and leadership, and provides opportunity for evidenced-based research and policy for Africa.

CAEL serves the wider African communities in a programme of Africa-based entrepreneurship, connecting groups and institutions with Faculties and business support units within the University for the purpose of developing sustainable schemes for SMEs growth, graduate and youth employment and women empowerment.

 

 

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