In this interview with MBAKAAN KWEN, the chief executive officer of Broot Consulting, Dr Olukunle Iyanda, explains that for Nigeria to revive her economy, it must reform the investment climate among others.
How would you describe the Nigerian business environment?
The Nigerian business environment is exciting and full of opportunities. The various challenges notwithstanding, I believe the country has made tremendous progress in the last 20 years. Doing business in Nigeria required a strong will, and it is only those who are dedicated, determined and disciplined that take the advantage that the Nigerian economy offers.
The Nigerian market offers one of the best returns on investment in the world. However, that in itself alone is not sufficient to attract massive investment into the country; we can optimise our potential through radical transformation of the economy by raising and sustaining the tempo in diversifying our mono economic outlook in which 80 per cent of our export earning comes from crude oil.
To realise the vision of a highly diversified economy, we must reform our investment climate and do away with old trade policies.
Nigeria has all it takes to be among the first 10 largest economies in the world, but we have to get our ass together by dealing with corruption aggressively, and the best way to deal with corruption is through a robust financial system and effective tax regime.
If the two are in place and we have a healthy identity system, then it becomes easier to track ill-gotten wealth. Genuine businesses are at the mercy or crony capitalism. We are in a nation that seldom rewards what-you-know, but who-you-know, and all these are what is making our economy to drag.
What do you think are the major factors responsible for business failure in Nigeria?
There are different reasons why business fails globally, and Nigeria is not an exception. Some reports showed that 80 per cent of startups fail in the first two years of commencing the operation.
The reason for this is not far-fetched. The cost of doing business in Nigeria is very high. In the World ,Bank report on the ease of doing business, Nigeria moved up by 24 steps, from 170th position in 2016 to 146 in 2017. Though this appears to be cheering news, we still have a long way to go. Starting a business in Nigeria can be very tricky and challenging, and the reason for failure can be external or internal.
The external factors are the usual song of lack of government support, weak regulatory framework, endemic corruption, lack of infrastructure, insecurity, lack of skilled workforce and poor standard of education. Having said this, there is nothing that kills business faster than internal weaknesses such as poor governance structure; proper model for governing the company is not set up. Therefore, there is gross abuse of business by the founders and family, and this explains the reason why many indigenous enterprises do not transcend the first generation.
Poor strategy execution is another one. Everyone can dream and come up with a plan but fail to execute the strategy properly is the bane of many businesses. When the strategic alignment failed, the company would fail.
Many startups have complained of a lack of capital for business, what is the best way to go about this?
Inability to access capital is a significant reason why most well intended and good businesses fail. Capital raising is one of the most challenging tasks for startups, many companies have faded off at the ideation stage because of lack of proper funding to finance the business ideas.
I believe there has to be a complete paradigm shift in sourcing for capital. Access to funding becomes easier when the individual can build a solid business case and present it convincingly.
Why is corporate governance important in running an organisation?
Sound corporate governance culture is the best way to prevent corporate failures before it occurs. It’s a self-policing mechanism that helps the board to steer the company in a direction that it achieves its business purpose. A proper application of corporate governance principles ensures that shareholders are adequately recognised and empowered, otherwise unhappy shareholders are a bad omen for business.
Do you think Nigeria should sign the continental trade agreement, AFCFTA?
Africa will achieve economic prosperity when it learns to trade with itself. The current Assembly of African Heads of States is moving in the right direction with AFCTA. The essence of AFTCA is to bring about the economic transformation that will ensure an integrated, prosperous and peaceful Africa. I firmly believe that signing this agreement will do more goods than harm because Nigerians are very smart and very industrious and we are never afraid of challenges, and I think the competition will bring the best out of us.
How can Nigeria fortify the IT space from the menace of cybercrime?
The cybercrime menace has damaged the reputation of Nigeria negatively over the years, and the majority of those engaged in these activities are the numerous unemployed youth that we have in the country who feel there are no other means of survival. The government needs to invest more in the youth of the country, provide structures necessary for them to thrive legitimately.
Meanwhile, for some perpetrating this criminal act, it is a matter of will and greed. Therefore, proper enforcement agencies should be established with the necessary technical expertise to tackle the menace.
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