Nigeria’s chain of corruption must be broken, Vice President Osinbajo erupts

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Nigeria’s Vice President, Yemi Osinbajo, lamented again on Monday that Africa’s most populous country remained astronomically corrupt, and warned that unless the “chain of corruption was broken”, no meaningful development could take place.

Why it matters: “Corruption is the reason for Nigeria’s recursive growth. What we are dealing with here is a situation where many are committed to stealing the resources of the state for private purposes and they are not shy about it, they are very brazen and they are prepared to do anything to capture the resources of the state,” Mr. Osinbajo said in a speech he delivered at a workshop to promote nation building via small scale industries.

“A major component of our industrialization aspirations therefore, is to promote a culture of integrity, of hard work, and trustworthiness. How do you do this? l think that we can do it by demonstrating empirically that a culture of integrity, hard work, and trustworthiness actually pays,” he added.

He said in places where small and medium businesses work well, there is “a certain measure of trust”.

“They must be able to open certain branches of the business, people must be trusted enough not to pilfer from what is being sold. So owners of businesses, regardless of size or complexity, are confronted with agency problems and moral hazards. In the last few years we have seen how shareholders in banks have simply woken up one morning to find their banks collapsed and huge liabilities and criminal liabilities confronting them on account of the malfeasance of their management.”

You can read his full remarks below


REMARKS BY HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, VICE PRESIDENT FEDERAL REPUBLIC OF NIGERIA, AT THE NATION BUILDING WORKSHOP V – THE PATHWAY TO AN INDUSTRIALIZED NIGERIA – GALA NIGHT OF THE APOSTLES IN THE MARKET PLACE NETWORK HELD AT LANDMARK EVENT CENTRE, VICTORIA ISLAND, LAGOS, MARCH 23, 2018.

PROTOCOLS

Let me begin by thanking our colleagues in the Apostles in the market place for again giving me this opportunity to speak at the fifth Nation Building Workshop of AIMP.

I think the Apostles in the Market Place has consistently provided a platform, and perhaps, one of the most engaging and a committed platforms for producing change agents, and not just any type of change agent, but for those who are prepared to do the very difficult thing and to work very hard and to remain without being discouraged as they try to make a difference in their communities and in the nation.

The Apostles in the Market Place is actually getting quite a few people in the government and of course you know that I’m in government, Okey is in government, Victoria Udom (Udom is Special Assistant to the Minister of Industry, Trade & Investment), who spoke a few minutes ago, is also in government.

I think that we would soon get to a critical mass from the way we are going and we might just be able to get everything we have been talking about.

So I am extremely excited and delighted to be at this Nation Building Workshop. I particularly like the theme of this year’s workshop; “The Pathway to an Industrialised Nigeria”.

I think that Industrialization is an important subject for our country; given industry’s ability to provide opportunities for large numbers of people, enhance economic diversification by enabling the growth of other economic sectors and promoting even trade and industry and all of the various aspects of businesses of commerce that will enhance the economy of our nation.

I think that it’s also important to bear in mind that as many of you have, at one point, touched through the issues that affect our nation. I’m am sure that you have also identified what is an important aspect of that  development and that may well go beyond just a question we looked at in terms of the development  of industry. I know that already we have talked about the ease of doing business; we have talked about all the factor endowments and all of the various things that enhance our industrialisation in a community or in a country.

But l will like to focus and pay some attention to what you may describe  as some of the social issues, but nevertheless important issues, and one of those is what is called the culture of a nation, the culture of the  community and how that may affect industrialisation and economic growth.

I think that when you look at this whole question, of course, by culture we are not talking about tradition necessarily in that sense, but more importantly one is talking about those values and the efforts that are promoted by a community or society, What is the efforts that a community connotes, what are the values, example of what to be promoted, if we want industrialization and economic development, what sort of values should we promote?

Some of the works that has already been done in various parts  of the world suggest that cultures that promote hard work, ethics, trust and common good  tend to boost rapid industrialization and  robust economic growth.

I will take a few minutes to talk briefly about developing the right culture to support industrialization. l will link this to the few comments l made in 2016 when l attended the AIMP dinner; on our main topic – seeking the common good.

The last time l spoke at the AIMP dinner in 2016, I spoke about the need to create a new tribe of people across the country. And if you permit me, l will quote what l said then, I said, “It is my respectful view that to build the new Nigeria: we need a new tribe. A tribe of men and women of all faiths, tribes, and ethnicities committed to a country run on the high values of integrity, hard work, justice and love of country. A tribe of men and women who are prepared to make the sacrifices and exercise the self-constraints that are crucial to building a healthy society, and who are prepared to stick together, fight corruption side by side, and insist on justice even when our friends are at the receiving end. A tribe consisting of professionals, businessmen, politicians, religious leaders and all others who believe that a new Nigeria is possible.”

So on that occasion I was talking about the culture of the new tribe that l believe would transform every facet of our society.  So a major component of our industrialization aspirations therefore, is to promote a culture of integrity, of hard work, and trustworthiness.

How do you do this? l think that we can do it by demonstrating empirically that a culture of integrity, hard work, and trustworthiness actually pays. In other words that it makes sound business sense and economic sense – to be honest and forthright, to have integrity and ethics; that individuals and societies that practice these values do much better than societies that do not.

Let us look at common practices today that inhibit commerce or the growth of our economy. Let’s just take pilfering and stealing in various ways and l talk more about the business environment not in the public service.

Pilfering from establishments; a lady who opened a card shop in Victoria Island was planning to open other branches. She hoped she will open other branches and, of course, engage more people. One day a friend of hers came to her store in Victoria Island and asked why her cards were cheaper in a store at Iponri market than the one sold in Victoria Island. As it turned out, some of the girls who were working with her at the Victoria Island store were stealing her inventory from the warehouse and had opened their own store with her cards at Iponri. They had stolen her inventory card and, of course, were using her inventory.

Obviously, there is no question that she could no longer continue to hope that she just simply opened branches, but the smart advice for doing retail business in Nigeria is that’s you must be physically present wherever your business is. If not so you likely will lose that business. And this means that opening branches, getting more jobs, getting more people engaged, simply won’t happen. Or even just sending your driver to by fuel; in many cases, he buys half of the cash he is given, but the petrol attendant is also trying to cheat him. And if he doesn’t pay attention, he will be cheated. But that’s not all. The station manager has probably colluded with the truck driver delivering the fuel to the station, so he delivers less to the tanks in the station and they share the difference. Even at the depot somebody is colluding with someone.

So you will find out that this chain of conduct that obviously demonstrates lack of integrity and forthrightness always produces a situation where businesses cannot grow. Because if it has to be you, the proprietor, that have to be there at your business everywhere, then there is no need for you to expand.

All societies where MSMEs have worked, there must be a certain measure of trust, they must be able to open certain branches of the business, people must be trusted enough not to pilfer from what is being sold.

One small hotel owner said the other day that he had to shut down a bar that he was running somewhere in Abuja because the attendants were selling their own bottles of wine. They bring and sell their own, while his remain on the shelves. He didn’t really lose wine, but all he lost was the patronage because his boys were using his bar to make their own money.

So owners of businesses, regardless of size or complexity, are confronted with agency problems and moral hazards. In the last few years we have seen how shareholders in banks have simply woken up one morning to find their banks collapsed and huge liabilities and criminal liabilities confronting them on account of the malfeasance of their management.

And there is a simple lesson here. Agency is fundamental to any form of business. No business can grow larger if it is run by its proprietor alone. He must delegate, he must open new branches. But agency requires trust and integrity on the part of the agent. Once that is missing, the proprietor will be reluctant to expand the business and everyone suffers.

I have been speaking in the past few days about the impact of corruption on development, especially the development of our own country and I’m talking here of the impact of grand corruption. Of course you know that whenever you talk about these things, everybody knows about the significance. When you talk about it, a group of businessmen or everyone is shifting from one point to the other, but no one always understands what was going on in our nation. Corruption is the reason for Nigeria’s recursive growth. When people talk about the Nigerian economy, the main problem we have is that we relied on a single commodity for so many years. That single commodity and the proceeds of that commodity were frequently hijacked by a few people, and that the few that hijacked it simply use it and privatise the money; and that the money was never used for the development that it ought to be rightly used. And l cited an example – the strategic alliance contracts, which was some kind of contract with the NNPC, represented by the NPDC at a time, and some individuals, of course; it was a collusive corrupt contract. The nation lost 3 billion US dollars; they simply lifted all and never paid back the money.

Now if you look at what $3 billion can do, if $3 billion is spent in putting infrastructures, $3 billion was almost a third of our external reserves at one point!  That could have built the Abuja-Kaduna-Kano road; it could have built the 2nd Niger Bridge, Enugu-PH, East West road, Sagamu-Ore-Benin, Kano-Maiduguri, Abuja-Lafia-Akwanga-Keffi, plus Lagos-Abeokuta (old road).

Corruption is really the root of our problem, even the decision on what to do is influenced by corruption. So we need to really understand that a culture of forthrightness, a culture of integrity and insisting on holding people to account for corruption is crucial and it is never going to be easy. One of the reasons why l like to speak at the AIMP is because we have been talking about this for years and we know what the issues are and how difficult it is. You can’t solve the problems of corruption overnight, but you certainly can make an effort, you certainly can make it right because when corruption in the system is such as it is in our country, everybody in the system fights against those who want to fight corruption. One day l sat with pastor Okey and another member of our team and we were talking about how difficult it is to fight even within the system as difficult as it is. And we are even luckier that, at least, the president is an honest man so we expected that things should be easier. The system itself pushes back every second. I’m not talking of the external, I’m talking of even within the system, there is a push back within the public service, but the important thing is that there must be a determination to make sure that we plod along and that we push for holding people to account, that will push for a system that is put in place to prevent corruption; a system that prevents graft, a system that prevents especially some of the legal issues that we see frequently in government.

And l think that the critical reasons why it is important for us as we look at the problems of industrialization; we look to address the peculiar problems of our own economy.

I was saying  at the Quarterly Business Forum a few days ago that sometimes when we talk about the Nigerian problem, when we talk about the Nigerian economy, we talk as if this is the economy of Norway or Sweden or somewhere where they develop the culture of doing things properly. It is not so at all. What we are dealing with here is a situation where many are committed to stealing the resources of the state for private purposes and they are not shy about it, they are very brazen and they are prepared to do anything to capture the resources of the state.

I just want to talk briefly about work ethic and l believe  that work ethic is an important  part of what we must imbibe and what we must continue to teach to our people so that there is a change in the way that things are done.

Work ethic that emphasises diligence and commitment, hard work is evident, in my view, in all successfully industrialized countries. There is no industrialised country that has not put in place, somehow, a work ethic that emphasises hard work and diligence; whether it is the Chinese who are famed for their Confucian work ethic or the Europeans who are the Protestants of work ethic.  Everyone who has succeeded has somehow managed to imbibe and emphasise diligence and hard work. The reason is simple; productivity depends a great deal on attitude to work. There is no society that has a lack attitude to work that is very productive. A productive society is one where there is a culture of diligence of hard work and that is so important in the mist.

I will just spend a few minutes on the notion of the common good and why it is so important in our quest for nation building and industrialization; we should also imbibe this concept. What is the common good? St. Thomas Aquinas of Italy once said, “He that seeks the good of the many seeks in consequence his own good.” More recently, commenting on the many economic and social problems that American society now confronts, a Newsweek columnist, Robert J. Samuelson, wrote: “We face a choice between a society where people accept modest sacrifices for a common good or a more contentious society where group selfishly protect their own benefits.” Simply put, it is seeking the good of others as you seek yours. It means putting yourself in the shoes of others, seeking to understand their perspectives and seeking common ground for progress.

The concept of the common good is one of the main pillars of the Christian faith (Acts 2: 43-47, Mark 12:31) and of many of the major religions of the world – Islam, Buddhism etc. Even ancient philosophers like Plato and Aristotle have shown that seeking the greater good is ultimately beneficial to societal advancement. It is the concept of the common good that tempers the harsh edges of free enterprise, and  opens up economic planning  to  social enterprise models, and robust safety nets so that the vulnerable and the poor are provided for. Many issues that confront us and, on the surface, appear to divide us, can be better addressed by broadening our perspectives, seeking to understand the ‘other’ side and seeking common ground and common good.

But ultimately, the spirit of social good finds its most powerful expression when individuals like you and I take on causes bigger than our personal aspirations and make the sacrifices to accomplish them.

The concept of the common good is one of the reasons that I am so proud of the “Make an Impact” project, which has been presented here tonight.

In line with what my brother and friend, Okey Enelamah, said, I urge everyone in this room to find that burden; obviously many of us have burdens for various things, but when we do find that burden, l will urge you to engage the AiMP Impact team and transform your burden into a project. Some of us may not have burdens that are huge, but if we discuss on how it will be taken and complemented, l think that we can take these burdens at a time and as we present them, there will be other who will come along with us to make some of this things happen.

The truth of the matter is that everybody who has ever made a difference in their communities or in their society have to take one single thing; and for some it’s politics, for some it’s one aspect of governance, for some it’s human rights, and credible work going on in cases of abused women. We can truly make a difference and an impact. Every one of us has that capacity and it doesn’t have to be large, it doesn’t have to be something that will cost a lot of money, but l think that it’s a passion and commitment that we bring to it.

I will like to thank the leadership of the AiMP for all you provided in a platform for us to better ourselves, to improve ourselves or for us to examine ourselves and our contributions in the society; to recommit and rededicate ourselves to a society; to serve the common goal of the people of our nation, and to serve those who are not in the position that we find ourselves and ultimately to do what it is that the Lord Jesus Christ has taught us to do.

God bless you all.

Thank you.

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Simon Ateba
Simon Ateba
Based in Washington, District of Columbia, United States of America, Simon leads a brilliant team of reporters, freelance journalists, analysts, researchers and contributors from around the world to run TODAY NEWS AFRICA as editor-in-chief. Simon Ateba's journalistic experience spans over 10 years and covers many beats, including business and investment, information technology, politics, diplomacy, human rights, science reporting and much more. Write him: simonateba@todaynewsafrica.com

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