(BACKPAGE) Government makes business happen

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BY LEKAN SOTE

Uba Group

Those who say that the government must get out of the way of business may not be correct after all. America, the bastion of a free market economy, that insists that only business must do business, is actually guilty of being the handmaiden of business.

Uncle Sam is the biggest promoter of commerce in the whole wide world. The most obvious evidence is that the American economy is the biggest in the world, beating the economy of China to a distant second.In colonial days and the first three decades of postcolonial Nigeria, the government undertook certain strategic investments on behalf of the people, because of the huge requirement of capital and technical competence that private businessmen of those days could not muster.

It was only in the 1980s that courier services, like DHL and International Messengers, started taking up some delivery services from NIPOST, or Nigeria Postal Service, a government-owned enterprise.

While it lasted, for 18 months, between 1860 and 1861, before it went bankrupt, with the introduction of the intercontinental telegraph, the “Pony Express,” a relay of horses, operated by Central Overland California and Pike Peak Express Company, took mails from America’s East Coast to the West Coast.

Though the Pony Express was a private company, you could only imagine the advantages accruing from its reduction of the time (usually weeks) that mails used to travel Coast-to-Coast in America to just 10 days. But before the Pony Express, there was the United States Postal Service, established in 1775, when Benjamin Franklin was appointed as the first Postmaster of the United States. It had a monopoly to deliver letters within the US, before the introduction of DHL, United Parcel Service and Amazon.

Before the government of President Olusegun Obasanjo auctioned off airwaves to telcos, MTN, ECONET and GLO, government-owned NITEL or Nigeria Telecommunications Company, was the go-to company. When the government thought private enterprises could provide the financial and technical competencies it allowed them to invest in oil prospecting and retailing of petroleum products. And when it thought there were no more security risks, the government gave licences to private enterprises to own and operate radio and television stations.

Even before the collapse of Nigeria Airways, established by Ladoke Akintola, Minister of Aviation in the 1950s, Nigerian citizens had established airlines and had left no vacuum in the aviation industry. Remember Okada Air, Sosoliso, Bellview and ADC, private aviation operators that have yielded ground to Dana, Ibom Air, owned by the government of Akwa Ibom State, Air Peace and Arik Air that fly domestic routes.

If the government had not pioneered those industries, when no citizen had the required competencies, Nigerians may have never developed the knowledge and capability to become players in those industries.Those who consider themselves as “rabid” ideologues of the free market economy may need to pause and consider the possible role the government must play as a pioneer in certain types and scales of industries.

The American Government, the biggest sponsor of Research and Development, the laboratory of product development, is responsible for the invention of many products and services that many American corporations trade in today.

“If the government had not pioneered those industries when no citizen had the required competencies, Nigerians may have never developed the knowledge and capability to become players in those industries

You will discover that many products, developed by research centres, universities and the military, now in use by American citizens and the people of the rest of the world, were financed by Uncle Sam. The global services communications system, or GSM, the T-shirt, women’s tampon pads, aviator sunglasses, jeep vehicle, mosquito spray, super glue, synthetic rubber, velcros bag, putty, fruit juice, microwave oven, GPS or Global Positioning System, the Internet and virtual reality, used for video games, were developed by the American military.

PRODA, or Projects Development Agency, conducts scientific, engineering and technological research, from the laboratory stage to the pilot stage, to evolve appropriate technology for Nigeria’s industry. It also provides consultancy services to government, industry and individuals. How much the research that went into the product developments costs is better imagined than calculated. It is almost impossible to determine the impact of the research that produced these products.

The most strategic service that governments provide for the citizens of a country is security. Interestingly, the government never asks for your opinion or consent when providing policing, military, intelligence and other security services for you.

Imagine the economic losses suffered by Nigerian citizens to the marauding insurgents, bandits and kidnappers, terrorists and herdsmen. Also, imagine how the security situation of Nigeria would have been, were there no security presence in Nigeria.

The exodus of fleeing farmers has caused extreme loss to the agricultural sector of the Northern Region of the Nigerian economy.

See how the Gross Domestic Product of Nigeria is adversely affected by insecurity, which President Muhammadu Buhari falsely claimed he has
overcome in his lie-laden Independence Day Speech. It’s unbelievable that he could spew such lies.

Anyway, today there are volunteer vigilantes and private security companies all over the country. Many Nigerian security companies are owned and operated by individuals who have served in one of Nigeria’s security agencies and have learned the skills that were hitherto limited to those who worked with the security agencies.

As of 2018, G4S, one of the world’s largest security groups, helps guard the area around the British embassy in Kabul. Even the government of Great Britain was persuaded to use the services of a private security company.

“CBN"

Infrastructure are physical and organisational structures that governments install to promote the development of society. Physical infrastructure include bridges, roads, ports, oil pipelines and electricity grids, while social infrastructure are schools and hospitals.

Soft infrastructure is regulations and rules of the game that Vice President Yemi Osinbajo refers to as Ease-of-doing-business, which include how quickly you can register a business in Nigeria and prompt action against bad business behaviour.

Under the government of Governor Mobolaji Johnson and Adeniran Ogunsanya as Commissioner of Education, Lagos State Government established five model secondary schools that provided high-quality education for students. They also beat a pathway for private education entrepreneurs to follow.

Subsidy is another load that the government assumes on behalf of the citizens. Though Nigeria’s fuel subsidy has been described as a fraudulent exercise by Peter Obi, presidential candidate of the Labour Party, it is a good example of a subsidy regime.

America’s agricultural subsidy, PIK, or Payment-In-Kind, is an interesting approach to using subsidies to control supply of agricultural produce into the market. The idea is for farmers to not depress the price of agricultural produce.

What Uncle Sam does is to pay an agreed “profit” to farmers based on the profit they would have made if they had cultivated their farms in
a particular year. The only catch is that the farmers should not cultivate their farms.

Farm settlements, established in the closing years of colonialism and the early years of the First Republic, demonstrated how large-scale farms could be run. The farmers, called “Settlers,” who participated in the scheme, had access to land that they did not have to buy.

They had access to free extension services, new technologies, residential accommodation, affordable schools for their wards and sundry social services even in the boondocks. The Settlers couldn’t have provided these on their own.

Despite the strong lobby of free marketers they can’t really do away with government, a necessity for the survival of society.