Home grown solutions to Nigeria socio economic problems

Thinking about socio-economic issues,  I recently realise there are many Penkelemesi (peculiar mess) in our culture that must be addressed to give room for bigger economic improvement.

This is even if we have ‘perfect’ government with minimal corruption related to management of public funds.

There are lots of assumptions made on behalf of many poor Nigerians yearning to make ends meet. The assumption that people can always make the best decision especially when it comes to prioritising is not exactly true.

The more I think about it, I realise people do indeed need education not just about how to best invest their capital but most importantly is how to separate business accounts from personal ones.

Philanthropists, activists and lots of Western sponsored NGOs may genuinely want to help so wealth can be spread a bit better across our regions but in Nigeria for some reason we are blinded to the reality of how wealth created must be retained in business for higher turnover to occur.

Take for example this exchange I had with a friend recently.

About a year ago, Kola stood as a guarantor for a bank loan so a friend could increase his business capacity. The bank had trusted his judgement given record of long business with the bank and the bank knew he has assets they can rely on, so loan was approved for Kola’s friend to expand his business.

Commercial bank interest rate in Nigeria is in excess of 20% – clear sign for common man with no connections never to knock on their doors as it is out of the reach for small to medium size owners with no tangible assets. However, medium-sized business do get this high risked loan as there is more to gain with volume, so this was the case for Kola’s friend.

The way Kola talked about his friend’s commitment to grow his business and the fact he has worked really hard to get it off the floor is something many investors would be interested to support.

Earlier on this year, the friend was supposed to start the repayment back in instalment, the bank made a reminder call of their agreement. In February Kola’s friend disappeared leaving the bank no other option but to chase Kola to find his friend or his assets could be confiscated.

Kola was seriously worried. What he saw about his friend the week after his bank loan was approved was total change of lifestyle. Before the loan approval, he only had a truck for running his business, however weeks into the loan, he bought two cars, one for himself and the other for his wife – this was done to compliment the sudden growth of his business to the people around him.

Story such as Kola’s friend is very common in Nigeria, whereby people treat money loaned to them as ‘earned’ only to satisfy the yearning to fit in.

Maybe, there is other way to help people before given financial help – education on lifestyle.



Categories: Africa, Nigeria

Tags: , , , ,

10 replies

  1. Hi FK
    I think it goes beyond education, examination of why the basics of business haven’t taken root should be examined.
    Since the 1950s if not before, Nigerians have been traveling abroad ‘to study’, many have degrees & professional certification in accountancy, banking and economics, etc. Despite this, no effective comprehensive system has been set in place to allow significant long-term and sustainable growth.

    Questions need to be asked and answered.
    Why have very little of this knowledge been spread throughout the education system?
    What is Nigeria doing wrong that others are doing right?
    Who or what are the impediments to sound economic footing?
    Why is no one challenging the prevailing culture of laziness, corruption, dishonesty and instant gratification. (Of course you and a handful of others are…, but in general this is not the case)

    We need pilot schemes to see what works that takes account of local cultures, and to apply the principle for saving for a rainy day.
    Simply sending people abroad to study & hoping that they come back and share their knowledge hasn’t worked and further steps are required.
    The nation needs some sort of consensus to achieve certain targets, regardless of what party is in power. What we get is “start-stop” policies and policies that are reversed or dumped by succeeding administrations.

    In short the problem needs to be tackled at the grass roots as well as the top.

    What happened to Kola’s friend?

    Nigeria is well “off the pace” as regards progressive and innovative ideas that will create a brighter future.

    I think this is a good point to raise, standards need to be raised in this area.

    Liked by 1 person

    • I suppose education here is beyond the four walls.

      I do wonder about most of your questions as well.

      What is Nigeria doing wrong that others are doing right?

      – Bad leaders. Group of people who hated their own kind.

      Nigeria spends millions on $ yearly on govt scholarship to Ghana, can you believe that? We failed to invest on ours thinking we could wish it away.

      – Neglecting the rural 70% inhabitants.

      Today Ghana is the world’s second cocoa producer, this is despite them having one third of our land mass – now they are probably happy for Ghana Must Go.

      On loan – People don’t usually change from old ways unless someone shed lights into it to see how situation can be better if issues are dealt with differently – agree lifestyle education must be tackled at the grassroots.

      Kola’s friend is now ‘smoked’ out, I heard he’s running about to cover bank loans – rob Peter to pay Paul style.

      Like

      • Bangladesh has the Grameen Bank, that helps the (urban) poor and rural folks with loans to start small businesses. It is a success (the founder even received an international award), they tend to favour women as they are more reliable when it comes to debt repayment. (Bangladesh is a predominantly Muslim country, so if they can make it work, Nigeria has no excuse to fail).

        A similar concept could be used for medium sized businesses, the interest rate of 20% is ridiculous, no business here pays that kind of rate. None would exist!!!

        With all the billions that have been wasted on unproductive schemes, like more airports, lavishing millions on politicians, the president and his over-bloated entourage jetting abroad every couple of weeks to attend one meeting or another and the like, whilst something that could truly benefit people is neglected. It is almost criminal.

        Rather than spend millions of $ sending people to Ghana, why doesn’t Nigeria beg President Mahama (in the spirit of brother co-operation) to send some advisors to help Nigeria revive it’s tertiary education system?

        Another lesson is that “friendships” should not be abused.

        Liked by 1 person

        • Whao! What a fantastic initiative GB is, that would work in Nigeria. I know we have big issue with trust but given that the govt of Bangladesh only owns only 6%, the rest owned by the borrowers, takes power away from any corrupt officials – can see that working for people, along dedicated staff with similar mindset of improving rural lives.

          Osun state has a scheme helping the farmers with cocoa seeds with paying back in installment, also I saw new mini bus in town which I hear was given to drivers by the state with payment plan – this is a new initiative which will benefit local people long term, however my fear is another governor might come after this tenure and refused to support the same vision.

          A more centralised scheme aimed at getting the all rural people into economic ladder such as Grameen Bank has higher chance of withstanding test of time.

          Like

  2. Education, definitely. We need teach our children about long-term goals and not instant gratification. We also need to educate them on focusing on growing their business instead of spending money on cars and other luxury goods just to impress people.

    Liked by 1 person

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