The Nigerian economy is currently just like a company that has been run down, and consequently in dire need of a turnaround. Turnaround specialists or business reengineers are special professionals, always in demand when companies or national economies have been driven into ditches by bad or incompetent management.
The general principle is that all processes, policies, and structures that are inimical to the efficient running of an organisation must give way during a turnaround programme.
Business re-engineers are convinced that many organisations or companies that have had the problem of dying had to do with situations where owners encouraged inefficiency. The narratives of the companies revolved around the sole owners. They had the final say on everything. They take up high percentages of the shares in businesses that they do not have the acumen to manage. Often, they hold on to the shares hoping to pass them to their children or benefactors.
They do this while prodding on, even running the business inefficiently. Because they own the companies, they tend to bring in their relations and people who do not have the competence to manage the company, helping to sustain the downward movement.
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They are able to do this because they hold controlling shares so other shareholders’ votes cannot count. For instance, if a chairman takes up to 70 per cent shares of the holding structure, he dictates everything that happens there.
In such a situation, it would take a lot of guts for the minority shareholders, maybe 10 or 15 of them who hold only about 30 per cent of the shares, to oppose or correct what the chairman is saying, whether he is right or wrong.
When these things happen, even if the company is going down, everybody is helpless; the board sits but cannot achieve results. Eventually, companies in such situations go down, no matter how much equipment, cash, or assets they have.
A turnaround begins when the experts arrive and are able to convince the chairman, for instance, of the need for a different narrative. They tell him that it is better, for instance, for him to own say 40 per cent of something than 100 per cent of nothing.
The Oga accepts the need for people with relevant competencies to come on board. Such people should be able to tell the chairman, “Oga, you are wrong here,” and they can prove it really that the Oga is wrong somewhere. These interrogations bring out the best in the way the company can move forward.
The experts recommend dilution of the shareholding of the principal shareholders to allow interests outside the family to come in and own shares. As this is being done, fresh money and competence will be coming in.
The danger of mismanagement to a company is that its share price could fall, say from N10 per share to N3 per share. But when new hands come, they are able to buy the shares at N3 per share. At that point, the members can say that this company cannot go down further, because among them is a guru who can lead this company around.
The gathering of board members will bring out the best in the board, rather than having a one-man show in the name of a board meeting.
The change that comes into a company through a turnaround is akin to what a linear programming model does in a decision-making environment. Generally, anywhere you have a corner point is a solution point. But not all corner points can be the best of the available options. It takes an expert to identify the optimum solution point. That point shows the best way to go forward, perhaps different from what the chairman, left alone, would have preferred.
Sometimes it’s such inefficient decision-making processes that constitute the problem of the company, or the economy in this case, because they engender sub-optimisation of resources.
Most of the things we need to turn around this economy should be the opposite of the diet we have been served these past eight years. We have had a fixed naira exchange rate, but going forward there should be no fixed naira exchange rate; we have borrowed from Ways and Means, there should be no Ways and Means borrowing; bloating of the government, no bloating of the government; ASUU strike, no ASUU strike; closed borders, no closing of borders; we chased away foreign investors, we should bring back foreign investors, etc.
If we want to turn around the economy, there are a few key things for the above scenarios to work. The first is power. Many Nigerians hope that the Fourth Industrial revolution sweeping across the developed world should birth in Nigeria. But that requires that we have a power sector that can power that revolution, among other infrastructure requirements.
We need the power to run our industrial machines. If we must run those plants to produce outputs, then there must be power to run the plants.
The next is that we must have FDI; we must bring back the investors who left. Many factors combined to drive away foreign investors. The government must take conscious and urgent steps to reverse the move and provide an acceptable environment for investors.
Part of that problem is security. Many investors who were quite active in Nigeria have either relocated or scaled back their exposure to the economy on account of our peculiar security challenges. We must tackle this with dispatch, as an objective that has no alternative.
We need the expatriates to return to continue what they are doing in the Nigerian economy, of course not in isolation but in collaboration with their Nigerian counterparts. It’s not a question of having foreigners alone. There has to be collaboration between them and Nigerians.
But we cannot bring back the foreign investors unless we put everything in place for them to return, such as an exchange rate system that allows them to come in and go out easily. If not, they are not coming back.