Dearth of indigenous ceos in Nigeria-based multinationals
Published November 16, 2018
Ayo Olukotun THE PUNCH
Friday Musings with Ayo Olukotun email@example.com 07055841236
No matter how you browse its current status, it is hard not to think of Nigeria as a nation in decline, with indices of a glorious past, looking today like feats that are difficult to replicate. Recently, a Nigerian Professor, who worked for several years in the United Nations system, narrated to this columnist, how badly we are losing out in appointments at the UN, even in cases where a little throwing of our weight would have swung the tide in our favour.
Sadly, the voice of Africa’s giant, once commanding and compelling on continental affairs, is increasingly dwindling to a barely audible squeak. Another important dimension of Nigerian stupor was put on the table, last week, by the Pro Chancellor of the University of Lagos, Dr Wale Babalakin SAN, when he delivered the 20th Anniversary Lecture of the Yaba College of Technology.
Babalakin lamented a situation where the chief executives of western multinational companies in Nigeria are overwhelmingly expatriates, drawn from the host countries of these companies. Pinpointing the growing lacuna, the guest lecturer cited names such as Ernest Shonekan, Christopher Kolade, Rufus Giwa, Abel Ubeku, Festus Odimegwu, Olusegun Osunkeye, and Sam Ohuabunwa, who once sat at the helm of western multinationals in Nigeria.”Today”, bemoaned Babalakin, raising his voice, “the advent of indigenous CEOs in foreign companies on our soil is virtually over, punctuated, of course, by a few honourable exceptions”.
There is no gainsaying that Babalakin is right on the money, and has provoked national conversation on a topical and vexing subject. For example, a situation where, as happened recently, a Kenyan was redeployed from another African country to be the chief executive of a beverage manufacturing multinational on Nigerian soil, tugs at our sense of national self-worth and self-validation. How did this state of affairs, this palpable dimunition of Nigerian technocracy arise? Babalakin suggests that the reasons connect with the lowering standard of education in the country and the attitude to work of Nigerians.
Undoubtedly, these factors have roles to play, but only as part of a larger narrative of decline, even decay in our national affairs. To make the point clear, a former deputy Governor of the Central Bank, Dr Obadiah Mailafia, argued in a conversation with this columnist that the country has not only careered downhill in the educational sector, but has specifically downgraded or ignored business and management education, citing the fact there are no world class centres of management education on the scale of the Harvard Business School. Of course, our multiplying universities offer training and degrees in management; however, we are reminded by the ongoing strike of the Academic Staff Union of Universities that government has failed abysmally to fund universities and to upgrade their lack of topicality and universality. Evidence of this is provided by the fact that investment in the business sector is shallow and perfunctory.
Innovation and development usually occur in any country, let us not forget, when there is fluent interconnection between the state, industrial cum business sector, and the academy. In Nigeria, for the most part, this interconnection is weak or rudimentary. That is only part of the story however. There is an ethical and moral downside to our management culture, which mirrors the monumental corruption and sleaze in the public sector. The expectation that the private sector is more virtuous than the public does not seem to hold true. Hence, as a senior management official in the private sector, put it to me, “There is no denying the fact that several Nigerian CEOs, working for multinationals, have let down their moral guards, through unethical behaviour and empire building”. This may have led to the lowering of trust, regarding Nigerian CEOs in the business sector. It may also be that the multinationals have capitalised on the excesses of a few Nigerian top hats, to bang the door against the appointment of Nigerian CEOs. After all, there is no convincing or systematic evidence that, Nigerian helmsmen and women exhibit less integrity than their foreign counterparts.
There are other factors at work. For instance, the ownership structure of these companies, during the golden era of Nigerian CEOs, was usually 60-40℅, with the understanding that Nigerian shareholders constitute influential minorities, whose views must be considered in the management process. It made sense, therefore, to put in place Nigerian CEOs, as part of a governance structure, which entails a win-win situation for dominant and minority shareholders. These days however, most of these companies are fully owned by their parent firms, with little or no Nigerian shareholders, hence, reducing the need to defer to Nigerians through the appointment of local CEOs. A more general point, arising from this fact, is that Nigerian capitalism is on the wane, illustrated by the lack or shortage of indigenous entrepreneurship that can give western multinationals a good run for their money.
True, a smattering of Nigerian banks and industrialists such as the Dangotes as well as the emergent owners of carbonated soft drinks like Big Cola, are carrying the battle to the gates of foreign investors. The general picture however, remains desultory, to the extent that indigenous entrepreneurship continues to be weak and shallow, with the Nigerian state constituting an absent or derelict midwife. In addition, the business climate remains inclement, illustrated by the claim of the Manufacturers Association of Nigeria, that 37 companies closed down last year, or relocated to nearby countries, while over the last few years, Nigeria has lost close to 40% of its industrial capacity.
So, the dearth of Nigerian CEOs in western multinationals put on the discourse agenda by Babalakin, should not be viewed in isolation, but in the context of the loss of economic vibrancy and de-industrialisation suffered by the country. No doubt, as a nation, we are not at the cutting edge, in the commercial, industrial and technological sectors, mainly because the nation’s latent potential and huge human resources profile are not harnessed. It is a crying shame, in this connection, that the universities and colleges of education are shut down, because government has failed to attend to repeated demands for infrastructural support and welfare upgrade. Even at that however, it is hard to believe that there are no competent Nigerian managers, who can take over from their European and American colleagues. If indeed there is a mentoring and succession scheme put in place by these companies, it ought to include the prospect of Nigerian CEOs, which in any case will flash the idea that these companies take Nigerians seriously.
That is another way of saying that the deficiencies notwithstanding, we should begin to look at a commercial future which includes the mentorship and consequent appointments of Nigerian CEOs. Siemens took a good step in this direction, a few months ago, when it appointed Tisafe Onyeche, as perhaps the first female executive of an influential western multinational. Instead of adopting a “siddon look” or bystander posture, government should bring its political weight to bear by creating rewards for companies that comply with best practices in this area.
Beyond that, government should create short term and medium term policies that will bring Nigerian business and industrialisation out of the bottom league of global development.
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