By Dada Adefolami
Sustainable business, or green business, is an enterprise that has insignificant negative impact on the global or local environment, community, society, or economy—a business that strives to meet the triple bottom line. Often, sustainable businesses have progressive environmental and human rights policies.
Program and organizational sustainability. is a much more complex and dynamic process. Program sustainability means different things. depending on the developmental stage of your. program. Newer programs may want to concentrate. on sustaining their activities or infrastructure once.
Sustainability means creating an economic system that provides for quality of life while renewing the environment and its resources. A sustainable community is one that resembles a living system where all the resources (human, natural and economic) are renewed and in balance for perpetuity.
Nigeria’s downturn of last year would have been hard to avoid. Africa’s most populous nation relies on oil for around 95% of its export earnings and close to 75% of government revenues. So, a big hit to national wealth was inevitable when the global price of oil collapsed from more than US$100 a barrel in late 2014 to a low of under US$30 at the start of 2016. But economists fear that government policy including an attempt to keep the nation’s currency the naira, high – may have worsened the situation, contributing to the country’s first full-year contraction in growth for over 20 years.
Last year’s setback is part of a longer-term problem. Nigeria is bursting with economic potential. Yet it has so far failed to become the engine of African growth that many economists believe it should be. The country boasts one of the largest pools of young workers anywhere in the world, a demographic asset that is increasingly rare as the global population ages, and it has an enviable stock of natural resources, with an abundance of arable land and the largest oil endowment in Africa.
There is a strong consensus among economists and Management Expat about the policies needed to turn this situation around. Presidency can play a role in tackling some of the major problems that hold back the Nigerian economy, including the weakness and complexity of the tax system and problems with the integrity of public institutions in Nigeria. ‘The country could certainly become a more dynamic economy that offers greater opportunity to youths of all kinds, including men and Woman.’
The election of Muhammad Buhari as president two years ago raised hopes that some of the barriers to growth could be lifted. His election was itself seen as a promising sign that Nigerian democracy is maturing; it marked the first democratic defeat of an incumbent Nigerian president standing for re-election. And as a one-time general in the Nigerian army, Buhari seemed well placed to tackle civil unrest, which has been a serious drag on the economy over recent years.
Nigeria has been battered by economic troubles, insurgency and endemic corruption, but there is wide consensus on what the Giant of Africa needs to do to restore its fortunes
Violence in the Niger delta, a key oil-producing region, has caused serious disruptions to oil output. Three of the northern provinces have been plagued by an insurgency by Boko Haram, an Islamist movement, which the Global Terrorism Index ranked as the world’s deadliest terror group in 2015. Buhari has sought to improve the military response by moving the top brass closer to the region, rather than seeking to deal with the unrest from the comfort of the capital city.
The citizenship need to participate and contributions to make on issues of public integrity and taxation.
The problem of corruption is especially deep rooted in Nigeria. And it has been a drag on economic growth for several reasons. ‘Corruption starves the state of the resources to develop infrastructure and talent, around a third of government oil revenues never reach the state’s coffers, according to an estimate cited in the Economist.
Government contracts are often awarded as a result of the bribery of officials, with the contractors either not completing the work or executing it poorly. ‘The ultimate outcome is that many infrastructure projects are not built, making it higher for firms to produce and get their goods to the market, and education is equally underfunded, and low Standard. Corruption can also undermine the willingness of the public to pay taxes, since there is a lack of confidence in the ability of government to use funds properly in the past.
Corruption AND Fraud scale
The scale of the issue to be addressed is formidable. Global Financial Integrity, a US-based thinktank, estimates that more than US$157bn left the country illicitly between 2003 and 2012. Corruption is ubiquitous: even the health and medical services, considered the least corrupt state institutions, are considered very corrupt by 41% of Nigerians, according to Transparency International. The organization scores Nigeria just 27 out of a maximum 100 for the integrity of its institutions though Federal Government are still contest this.
President Buhari government score credit for prosecuting officials for graft, but need to go further. ‘Along with punishing the guilty and recover government looted properties, it is important to make it harder to embezzle money in the first place, This can best be achieved through the adoption of greater transparency initiatives to help make government more accountable.’
The National Assembly can play a major role by excursing their Oversight function, EFCC and ICPC are vital in detecting and reducing corruption. Judiciary are a crucial part of strong national governance architectures that confront corruption, in partnership with good government and equities and Justices, Reform, Training, ethics and Quality education are the core Institution that will have positive impact in tackling corruption and Fraud.’
Government Institution Re structure will play a central role in promoting reform of Nigeria’s overly complicated system of internal revenue generation, taxation and business regulation. The multifaceted tax code imposes heavy additional costs on companies. ‘Multinational companies and Small Business pay several layers of taxes levied by different agencies of government.
SMEs in Nigeria’s have to pay crudely Four to five types of tax, including a levy on each of its vehicles, a property tax on its premises, an environmental tax, corporate tax and VAT. ‘Along with all of this, when the vehicles go into another state in Nigeria, they are sometimes stopped and that state’s vehicle taxes levied on them again. This has been a killer for small businesses, and it is hoped that there would be reforms in this area. therefore, ultimately limits growth opportunities government need to look at this complexity.
Added to the administrative burden is a low level of tax collection. Because relatively little revenue is collected, the state remains reliant on oil income. There have been efforts to overhaul the tax system.
Regional integration and cooperation also have a part to play in diversification success. Standardizing customs requirements, reducing tariffs and developing transport corridors all help to encourage trade.
To achieve these goals, human and institutional capacity needs investment to develop skills and a framework to support and facilitate new sectors of activity. There are no short-term fixes. Diversification requires significant capital investment and a consistent and determined approach from governments.
Nigerian believe businesses are constrained by a government agent of red tape. Officials often request payment for not enforcing rules, which means that businesses do not always operate on a level playing field. This contributes to Nigeria’s overreliance on oil revenues, rather than more dependable tax income from citizens and businesses.
Nigeria is a classic example of the resource curse, ‘Oil is highly capital-intensive, so it is a poor source of employment, with only a small number of well-paid workers.’
Addressing these issues could help unleash the natural vitality of the Nigerian population. ‘Until the recent slowdown there was a burst of entrepreneurship in Nigeria, business opportunities have been generated by the high penetration of smartphones and social media.’
The country grew by 7% for much of the decade to 2014. ‘If Nigeria can manage this with major structural problems, such as corruption, wonder how well it could be if it addressed some of these issues.’ sustainably high growth rate could also help Nigeria retain more of its home-grown talent. most talented graduates end up migrating out of the country. Whereas this can generate payments, it is nothing compared to the wealth these talents could produce if deployed at home.’
President Muhammad Buhari administration is taking steps to engage the young and address the unemployment problem, but even more is needed if Nigeria is finally to fulfil its economic potential and Africa Leader
In 2015, China’s imports from Africa fell by 40% as a result of the country’s slowing growth, and the drop-in demand for iron ore, oil and other minerals triggered a global collapse in commodity prices. In Zambia, where copper accounts for 60% of exports, the currency, the kwacha, hit an all-time low and remains depressed.
In Nigeria, the collapse in oil prices resulted in budget deficits and depleted foreign reserves, culminating in a recession that the country has only just emerged from. According to the National Bureau of Statistics, the 0.55% rise in Nigeria’s GDP in the second quarter of 2017 brought five consecutive quarters of contraction to an end.
It has brought to African policymakers that sustainable economic growth depends on diversification. This realization is backed up by a Deloitte report, African trends going into 2017, which points out that for the most part African governments have not taken advantage of the past decade’s growth gush to diversify.
A key challenge of diversification is the development of income-generating activities in underdeveloped sectors. The most effective way is for governments to work with the private sector to promote innovation and secure investment in research and development. Partnerships with foreign entities and international organizations will be key .
Many benefits accrue from diversified economies, not slightest protection from external shocks. Trade volume grows and there is higher productivity in the economy. While diversification remains elusive, particularly in sub-Saharan countries, progress has been made in some. Tanzania and Kenya have achieved substantial progress with export diversification since the early 1990s. The Indian Ocean state of Mauritius has successfully transformed itself from a sugar-dependent economy into a major financial services hub, with a vibrant export sector in textiles, clothing and jewellery. Botswana is also making concerted efforts to end its reliance on diamond exports. Its diversification effort is focused on textiles, leather, glass and jewellery for export. Nigeria is trying to diversify into Agriculture and other Mineral sources.
Although research Institution can help the process of diversification by providing governments with advice, it is politicians who have the ultimate power. It is easy to recognize the need for change, but more challenging to achieve it. The UN Office of the Special Adviser on Africa, the African Union’s New Partnership for Africa’s Development and the Organization for Economic Co-operation and Development released a joint study in 2010. Titled Economic Diversification in Africa: a review of selected countries, it identified six drivers with a part to play in facilitating diversification:
1. Governance
2. The role of the private sector
3. Natural resources
4. Regional factors
5. Broader international framework
6. Institutional capacity and HR.
Nigeria governments need to create a regulatory framework that is attractive to investors and allows entrepreneurs to thrive. Customs procedures is trying under Present administration but must be reformed and the administration burden reduced to make it easier to export. If Nigeria adopted these principles we will see good results., annual average growth rates in Rwanda, Ethiopia and Tanzania are above 6%, despite slowing in sub-Saharan Africa overall to 3% in 2015. Albert Zeufack, according to the World Bank. World Bank’s chief economist for Africa, puts the performance down to stronger macroeconomic policy, a better regulatory environment and, crucially, a more diverse structure of exports.
Many African countries fall short in ease of doing business rankings say Kingsley Iweka’s column in the September issue of AB. Procedures for starting up a business must be simplified, access to credit and electricity expanded, and registration of property and payment of taxes made easier.
A recent example is the partnership between the World Bank and Nigeria: the country gained a US$150m credit to enhance its mining sector as part of its economic diversification efforts. this is great achievement for the Buhari administration and is ‘in line with the Nigerian government’s priority to diversify the economy to a broader range of non-oil productive sectors’.
other impediment in Nigeria is the lack of modern infrastructure. Road networks and Electricity are poor. Investment in the power sector is also essential. In Nigeria, for example, constant power cuts severely hamper business activities. According to a World Bank report, Africa’s Infrastructure: A Time for Transformation, sub-Saharan Africa needs US$93bn a year to plug its infrastructure gap.
Recent time have shown how liable Nigeria are to economic shocks and fluctuations in currencies and commodity prices. because our economies are dependent on the export of crude oil or just a few commodities or primary products. When there is a downturn in commodity prices, mono-product economies such as Nigeria, whether it’s oil in Nigeria, single-commodity domination of an economy can end up shackling growth.
Finally,
Value must be added to Nigeria’s natural resources – diversification of production is a key element of a balanced economy. where this approach could be profitable is in cocoa production. As one of the world’s largest cocoa producers, yet manufacturing activities around the raw product are almost non-existent. Rather than exporting the raw material to Europe and the US, governments and the private sector should work together to ensure the conversion of cocoa into chocolate becomes a profitable industry for Nigeria and Africa. That way, jobs could be created, profit margins and return on investment improved, and wider prosperity achieved – a more beneficial exploitation of the country ’s natural resources than harvesting for export.
Sustainability is important because it ensures people have water and resources, and adopting its practices protects the environment and human health. The doctrine of sustainability aims to maintain the conditions in which nature and humans can survive by appropriately utilizing the natural components of the environment.
In simplest terms, sustainable agriculture is the production of food, fiber, or other plant or animal products using farming techniques that protect the environment, public health, human communities, and animal welfare. with reference to a business, sustainable growth is the realistically attainable growth that a company could maintain without running into problems. A business that grows too quickly may find it difficult to fund the growth. A business that grows too slowly or not at all may stagnate. The general definition of economic sustainability is the ability of an economy to support a defined level of economic production indefinitely. There’s the wrong way and the right way.
• Dada Suraju Adefolami, Professor of Finance, School of Business Administration, UNEM University Costa Rica, is a Finance / Management Consultant and Certified Forensic Accountant. You can reach him via: surajudada@yahoo.com; 08052043855