“We would like Nigerians and the world to regard MITI as the ‘Ministry of Enabling Environment’” – Okechukwu Enelamah
Nigeria’s new Minister of Industry, Trade and Investment, Okechukwu Enelamah, gave his inaugural speech on 18 February.The speech was strong on vision and policy direction. Its broad policy thrust was unmistakable. Enelamah listed the “four pillars” of his vision for MITI, namely to create an enabling environment for industry, trade and investment in Nigeria; to implement the Nigeria Industrial Revolution Plan (NIRP); to champion the cause of micro, small and medium enterprises (MSMEs), and to attract proactively long-term and foreign investment. My focus here is the first pillar, which is arguably the most important given its cross-cutting nature. Surely, without an enabling environment, the other pillars are meaningless and unachievable.
Now, my view is that Enelamah is up to something remarkable on the enabling pillar, as the above quoted statement, which jumped at me as I read his speech, seems to indicate. By inviting the world to regard MITI as “the Ministry of Enabling Environment”, Enelamah made an audacious and clever attempt to rebrand and reposition the ministry, and, with a stroke, created a powerful signalling effect, albeit also raising huge expectations. But nothing can disguise the herculean task of delivering on that bold promise. Getting the public sector in Nigeria to ensure an enabling environment for the private sector is such a monumental challenge that, however noble his intentions are, the minister is certainly starting from a very low base, if not ground zero!
Yet, one can’t underestimate the power of political and ministerial leadership to make a difference. Surely, if anyone should understand the enormity of the challenge and what needs to be done to make Nigeria a business friendly country, it is Enelamah. He is one of the very few bright stars in the Buhari cabinet, numbering just between five and eight (Okay, let me be generous and settle for 8!), who bring real expertise to the government. Enelamah’s private-sector career spanning over two decades, particularly in the world of finance and investment, is clearly an asset to the government.
In the UK, ministers get significant brownie points if they have had a career outside politics, particularly a long stint in the private sector. And such ministers tend to rise rapidly within the ministerial ranks. For instance, the current Secretary of State for Business, Innovation and Skills (BIS), Sajid Javid, who is Enelamah’s counterpart (BIS handles trade, industry and investment, and used to be called the Department for Trade and Industry), has a professional background that is similar to that of Enelamah. Before entering politics, Javid worked in business and finance for over twenty years, including as a Vice President at Chase Manhattan Bank, and later a managing director at Deutsche Bank. He was elected into Parliament in 2010, and was immediately made the Economic and Financial Secretary to the Treasury (a junior minister). By 2014, he was elevated to a full Cabinet position as the Secretary of State for Culture, Media and Sport, and then, in May 2015, was promoted to the position of Business Secretary.
My point in making this comparison is that people who have had significant private sector experience are valuable to any government. They know everything about the barriers to and enablers of business growth, and, thus, when in government, tend to provide appropriate policy support to help businesses grow and expand rather than hinder private sector development through inappropriate policy measures. For instance, Javid is a strong pro-business reformer, who wants to make Britain the best place in the world to start and grow a business by removing all obstacles to business productivity, competitiveness and growth. A non-interventionist in a protectionist sense, his passion is simply to create the enabling environment for businesses to thrive. I detected similar reformist mindset as I read Enelamah’s inaugural speech.
However, despite the two ministers having similar professional backgrounds and business orientations, the truth is that Enelamah has been dealt a tougher hand than his British counterpart. The UK is ranked 6 out of 189 in the 2016 edition of the World Bank Ease of Doing Business Index, and 10 out of 140 in the 2015-2016 Global Competitiveness Index, while Nigeria’s rankings in these two indexes are 169 and 124 respectively. But lest anyone think that this reflects a developed-developing country divide, it should be noted that Singapore, which is No 1 on the Ease of Doing Business index and No 2 on the Global Competitiveness index is a developing country. Even among African countries, Mauritius, Rwanda, South Africa, and Botswana, just to mention a few, are well ahead of Nigeria on each of the two indexes. For instance, Rwanda is No 62 on the Ease of Doing Business table and 58 on the Global Competitiveness index, compared to Nigeria’s 169th and 124th rankings respectively. Thus, as I said, Enelamah is starting from a very low base, indeed!
Now, we know what the situation looks like, it’s dire! And we know what task lies ahead for the minister, it’s monumental! So what actions is he planning to take to tackle the problem and deliver effective results? Well, there is no doubt, as I said earlier, that Enelamah’s speech was full of policy intentions. For instance, he said that “We are working to position MITI as an Enabler and Facilitator of business and investment in Nigeria”. However, the speech was light on specific implementation actions or plans. That said, the minister promised to “unveil” a “number of initiatives”in the “weeks and months ahead”, aimed at “addressing Nigeria’s consistently poor performance on various Global Competitiveness and Ease of Doing Business Indices”. But if you can’t wait to see the shape of these initiatives, well, all you need to know is that they would focus on “dismantling the many obstacles that stand in the way of business and business innovation in Nigeria”.
That’s music to my ears. It looks like there is a radical, root-and-branch reform in the pipeline. The trouble, though, is that, like President Buhari rightly observed during his budget speech, many people are likely to say ‘I have heard this before’. It is, indeed, difficult not to be cynical about promises to “dismantle” obstacles to business performance, especially given the enormity of the problems and how long they have festered in this country. For instance, Enelamah rightly identified weak infrastructure as the biggest supply-side constraint to industrialisation and entrepreneurship in Nigeria, and made a distinction between “hard” and “soft” infrastructure. But the weakest “soft” infrastructure in Nigeria, that doesn’t even require money to fix, is the legal and regulatory regimes affecting business and investment in the country.
For decades, everyone has been saying that Nigeria’s business- and investment-related laws are obsolete, some predating the country’s independence. It took a highly publicised study sponsored by the UK Department of International Development (DfID) to focus media attention last week on the fact that “54 Nigerian laws are obsolete”. Yet, despite the platitude mouthed by the Senate President, Bukola Saraki, that the current National Assembly would “give priority to the amendment of obsolete laws”, don’t hold your breath! There is a serious problem with government and legislative effectiveness in this country. Nigeria probably has the worst legislative performance, in terms of law-making, in Africa. Surely, this is one area where Enelamah would need to put up heroic efforts to deliver on his vision. And, make no mistake, without fundamentally reforming the laws affecting business in Nigeria, this country would continue to languish at the bottom of the global indexes. And what’s more, until the legal and regulatory frameworks improve significantly, some investors would continue to sit on their hands, while some may even disinvest, as UNCTAD once reported, citing the failure to pass the Petroleum Industry Bill.
There is also the problem of poor government-business relations. Enelamah promised that MITI “will foster an attitude of ‘service’ to entrepreneurs, MSMEs, business and investors”, adding that “We will constantly ask the question: ‘How can we help?’”. Indeed, MITI should be the most business-minded ministry, with a strong customer focus, in Nigeria; after all, its remit is to provide services to business people and investors, the wealthy and job creators. But the truth is that most Nigerian civil servants lack business awareness; they lack serious understanding of the essential complementarity that government and the private sector generate. They also lack the stakeholder consultation skills to deal with heterogeneous interests and arrive at informed positions. For instance, a study showed a few years ago that the then federal ministry of commerce didn’t have effective formal structures for collaborating with the private sector, instead lobbying and ad hoc interventions were the means of influencing policy, which, of course, favoured powerful interest groups and promoted rent-seeking activities.
Another problem is the general lack of expertise in the civil service. It is inconceivable that Enelamah’s bold vision could be achieved without civil servants with cutting-edge skills and knowledge in the specialist areas of trade and investment. For instance, where is the expertise in trade remedies, such as anti-dumping actions? Where are the digital skills? I was shocked when I visited the federal ministry of commerce in 2003 and a director showed me a room full of brand new computers and said “the Japanese gave them to us, but our staff can’t use them because they have no IT skills”. Over twelve years on, the problem of lack of proficiency in IT still persists across the civil service. Yet, Nigeria can’t be open for business, as the minister wants, with the use of modern technology, if the majority of the employees lack the essential skills.
Enelamah certainly brings specialist skills and knowledge to his ministerial role and will make a difference. But Nigeria has a long way to go, and huge mountains to climb, to become a business-friendly country. Which is why the minister’s promise to make MITI the “Ministry of Enabling Environment” is really heroic and why, to succeed, he needs to match the vision with equally heroic actions. But if anyone can do it, Enelamah can. So, good luck to him!
Olu Fasan
