I spoke to a car dealer this morning and he lamented that a Toyota Matrix which they normally clear for 280k is now 500k to clear. Who will bear the cost? Of course it is the consumer, so the price of that Matrix will go up by at least 220k. But there is a deeper issue: when a formerly profitable car dealer, who has always been a hustler is thinking of relocating to Canada then wahala dey. Real trouble.
The business environment here, for Nigerians, is just so bloody tough, and it starts from the way our governments does its thing. It’s quite simple really – in any economy, the ultimate guarantor of cash flow, is the government. Not the banks, not the private sector. Government it is, who pays contractors, who in turn pay sub-contractors or staff, who in turn pay other sub-contractors and other staff.
Let me tell a little story to explain: A friend is currently executing a contract for a federal ministry. It is 3 years into a 4 year job, and for the last 21 months, no pay. Like me, he moved back to “make Nigeria a better place”, so he bore the wahala, and has soldiered on FOR 21 MONTHS, with no pay. Unlike most Nigerians however, he has kept all the records of invoices that he’s taken care off, even ministry contractors who he has paid from his own pocket. He’s also kept records of all the memos, reminders that he has written, and the countless replies he’s gotten promising something on the way.
Finally, and simply because he’s depleted his reserves, in April, he pulled his people out and stopped work. The reaction – countless abuse. In June, some foreigners came and got involved with the job, and presto, the ministry tried to revoke his contract because “he failed”. To make matters worse, they told they foreigners all sorts of rubbish about his capacity to deliver, and accused him of fraudulent acts, and that was when he had had enough.
Just because of his name, he simply showed ALL his records to the foreigners, and they have packed up and gone. Who has lost out? Nigeria!
Nigeria has lost out, because someone failed to honour a written agreement, thereby breaking a cycle of trust. THIS is why we don’t work. Trust is a key ingredient in making business(es) viable, and then profitable. If trust is broken, corruption sets in, the system collapses. When the system collapses, the environment becomes tough for entrepreneurs, small businesses fold and die, unemployment escalates. When unemployment escalates, well, does it surprise you that Boko Haram gets recruits? It shouldn’t. So when the brain drain starts, well…
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