Case for sustainability of The NLNG -sponsored prizes
What has literature got to do with the World Cup, the Olympic Games, the Oscars, The Emmy’s and other great common good projects embarked upon by nations?
First, literature belongs squarely in the ranks of these great projects. Think of the Bookers, the Nobels, the Caines and the Nigeria Prize for Literature. But beyond uniting and uplifting humanity, these common good projects, as public trusts struggle with crucial issues of sustainability, profitability and longevity. Many have died unsung, unmourned in unmarked graves because of inability to run them along the lines of sound economic principles.
A public trust not run along the lines of sound business principles will in the long run neither survive no deliver public good. Think of great projects like FESTAC 77, Pat Utomi Prize, Nigerian Football League and Nigerian Sports Festival. These are either dead or living dead.
Take Olympic games for example, the 20th century games brought to the fore issues of costs of hosting and the revenue, sparking controversy over the burden host countries shouldered. A growing number of economists have argued that the benefits of hosting the games were exaggerated, especially as it has left many host countries with large debts and facilities maintenance liabilities.
A 2012 University of Oxford study estimated an average cost overrun of 252 percent for each Summer Olympics since 1976, after adjusting for inflation. The 1976 Summer Olympics in Montreal left taxpayers with $1.5 billion in debt that took three decades to pay off.
To most economists, the World Cup is a waste of money and resources. But despite their skepticism, this four-year ritual has been well established. The game is a major form of entertainment in the world. It also provides the host country with a lot of pride and publicity. However, this may not entirely justify the economic costs imposed on countries by the World Cup. Several countries have fallen into debt after holding the World Cup. Brazil in 2014 spent $11.6 billion, making it the second most expensive World Cup surpassed only by Russia’s 2018 World Cup which cost an estimated $14.2 billion. The World Cup and Olympic Games remain football and athletics’ pinnacles of glory, even as they continue to struggle with their economics.
For much of the 20th century, literature and science prizes have imposed a manageable burden on corporate sponsors who have been grappling with hot button issues such as longevity and sustainability. Many corporations such as the Booker, and the Orange Prize have changed their models from single corporate sponsorship to a public foundation when they realised that a go-it-alone/own-it-all sponsorship mentality does not guarantee stakeholder inclusion, profitability, stability and longevity.
The important question is does anyone expect that Nigeria LNG Limited’s beneficence will realistically provide longevity, sustainability, and stability for Africa’s biggest Science and Literature prizes –each with a cash value of $100,000 USD – sponsored by NLNG? Everyone knows that the curtains will be drawn on these prizes if NLNG withdraws its sponsorship for whatever reasons? And in that case, the 18-year history, the dreams and aspirations of writers and scientists will evaporate.
National Prizes, such as The Nigeria Prize for Literature, The Nigeria Prize for Science and The Nigeria Prize for Criticism are Public Trusts that must be anchored on sustainability levers, irrespective of whether the sponsor is a benevolent billionaire, government, or government agency or by a company or conglomerate.
So, should the NLNG prizes continue as charity case? How do we under-gird them with good economic models and financial discipline to guarantee their long-term survival and sustainability?
As the architect and former administrator for these prizes, I have been confronted in literary festivals, by Nigerians and Africans with these concerns. This paper is an attempt to draw NLNG’s attention to the original roadmap meant to put Africa’s biggest prizes on a path of sustainability by endowing them and making them enduring magnets for writers and scientists, a hub of literary and scientific learning – what Timbuktu was to the world from 13th to 17th century under Mali Empire and Askia Mohammad’s rule.
After 18 years, the NLNG-sponsored prizes are stagnating and should be endowed and passed on to the next set of managers and administrators. If this happens, the prizes will move into another growth phase, because the new administrators will most likely be eager to expand the prizes. An endowment managed by a foundation comprising bankers, investment experts, journalists, public relations consultants, fundraising experts, technocrats, and other professionals will manage the funds and align capital needs with goals.
The foundation will offer an outside perspective on ways to grow, such as through a well-timed investment or an influx of working capital. From a financing and financial statement management perspective, the foundation can get into the numbers and help put them into a bigger-picture context to better navigate growth and slowdown periods.
A foundation is in a position to stand back, look at the business from the outside and offer a fresh perspective. It can assemble and execute a step-by-step game plan to achieve the goals and bring success to the prizes. If we want the awards to become sustainable, we need to challenge our fixation on the prize purse. There are numerous competitions that bestow far smaller cash awards, yet rank higher in public perception. One of them is the Pulitzer.
The Pulitzer process initially was funded by investment income from the original endowment. But by the 1970s the program was suffering a loss each year. In 1978 the Advisory Board established a foundation for the creation of a supplementary endowment, and fund raising on its behalf continued through the 1980s. The program is now comfortably funded with investment income from the two endowments and the $75 fee charged for each entry into the competitions. The investment portfolios are administered by Columbia University.
Members of the Pulitzer Prize Board and journalism jurors receive no compensation. The jurors in letters, music, and drama, in appreciation of their year-long work, receive modest honoraria. Unlike the elaborate ceremonies and royal banquets attendant upon the presentation of the Nobel Prizes in Stockholm and Oslo, since 1984, Pulitzer winners have received their prizes from the president of Columbia University at a luncheon in the rotunda of a Library in the presence of family members, professional associates, Board members, and the faculty and staff of the School of Journalism.
Success is not only be defined in monetary terms. Writers and scientists are desirous of prizes that offer national and international recognitions; offer local and overseas book deals, including film deals from Netflix, Disney, Nollywood; recast their previous careers and re-evaluate their work– both in a marketing sense, and a literary sense. They also want reading offers with English Departments of universities, residency, grants and fellowships. And a whole lot more!
Lastly, efforts should be made to ensure that the stakeholders are not alienated or excluded; we must ensure the future is much more accommodating of the real drivers of our science and literary cultures. There is no doubt that that endowment of the prizes under an independent Foundation and Administration will be one of NLNG’s greatest gifts and legacies to Nigeria and Africa.
In 2010, we presented to NLNG Board a funding scenario – made up of prize money and administrative costs – that if met would endow the prizes in perpetuity. This was turned down by the NLNG Board.
Unfortunately, expenditure on the prizes, so far, has exceeded that estimate; it is more than enough to endow the prizes in perpetuity. And there would have been no need for further investment in the prizes, as is currently the case, if the required funding were provided in 2010. An endowment will:
• make the prizes sustainable and available to future generations.
• Show that corporate sponsorship has reached diminishing returns, further investment will not bring significant benefits to NLNG
Inspiration From Other Prizes
The Pulitzer Prize was created by Joseph Pulitzer, a Hungarian-born American newspaper publisher who left behind USD30.6 million endowment. The Pulitzer process was initially funded by investment income from the original endowment. But by 1970s the programme was suffering a loss each year. In 1978 the Advisory Board established a foundation. The programme is now well managed.
The Booker Prize for Fiction was established in 1969 by Booker McConnell Limited. It faltered and the Booker Prize Foundation was established in 2002 with the title sponsorship of The Man Group. The group decided to retain the name but added “Man” making it The Man Booker Prize. The foundation is an independently registered charity.
The Nobel Prize is managed by The Nobel Foundation, a private institution established in 1900 tasked with a mission to manage Alfred Nobel’s will and intellectual property that has developed over the years.
The Orange prize established in 1996, to recognise the literary achievement of female writers was originally sponsored by Orange, a telecommunications company. In May 2012, Orange ended its sponsorship of the prize. There was no corporate sponsor for 2013. In 2014, the prize was sponsored by the liquor brand Baileys Irish Cream, owned by the drinks conglomerate Diago. In January 2017, Diageo announced that it had “regretfully decided to make way for a new sponsor”, and would step aside after the 2017 prize was announced that June. The name of the prize has been changed to “Women’s Prize For Fiction”. It is currently supported by a family of charities.
Reasons Why NLNG Maybe Dragging Its Feet
There are several theories why NLNG has not endowed the prizes:
It may be that in handing over the baton from one Managing Director to another, the memo on endowment was lost;
It may be because of passage of time and many of the founding fathers and mothers have moved on;
It may be because the former NLNG Board loved the grandeur of the Grand Award Night, the ceremony for award of prizes, highly acclaimed events with presidents, governors, ministers in attendance. This maybe the reason the Board declared that NLNG would foot the bills for the prizes and the awards for as long as is possible;
Perhaps, the most cogent reason may be that NLNG is tenaciously hanging on to the prizes due to the outcome of a post incident report on its tussle with NIMASA over the agency’s demands for three percent levy on inbound and outbound vessels; two percent Cabotage surcharge on domestic coastal trade; and Maritime Environment (Sea Protection) levy.
KPMG which carried out a post incident review and analysis of the incident in November 2013, including review of non-technical crises management framework found that besides the prizes and the award ceremony, the company has no national presence. It concluded that the company, in the view of stakeholders, had lost its social license to operate due to its apparent aloofness and low-key posture despite its phenomenal contributions to the national economy and dividends to the government through NNPC.
KPMG recommended several strategies to win back its social license. They include (a) development and implementation of a comprehensive national CSR strategy plan including sustainability reporting (b) development and implementation of a robust media strategy which would be utilized as a tool to protect the company’s brand; and development of a communication framework to guide shareholder-management interactions in crises situations.
The KPMG report led to the implementation of the University Support Programme in the six geographical zones, specifically, the construction of ultra-modern laboratories in six universities in the six geo-political zones of the country at the cost of $2 billion by Nigeria LNG Limited.
Whatever the reason for not endowing the prizes, the present situation is unsustainable and the leverage Company gets from these prizes is suboptimal. The company cannot continue to hide behind its prizes, but should step up its National and Community Social Responsibility Programmes in line with its Sustainability Development Policy and Vision of helping to build a better Nigeria. The company’s pioneering interventions in LPG are commendable. It clearly can do more, especially to the Host and Pipeline communities. It must get actively involved and become an honest peace broker between Bonny and Finima to resolve the never-ending governance issues that have dogged NLNG’s community development efforts over the years.
The prizes need tweaking to be allowed to grow organically. And NLNG needs to do this quickly if it:
Intends to maximize leverage from these prizes to enhance Company’s reputation, brand and social license. Recall that despite the prizes, KPMG’s post-NIMASA Event Review famously said that ‘NLNG had lost its social license to operate’ based on survey of critical stakeholders.
Intends to keep the good will of writers, scientists and general public.
Intends to keep its promise to writers and scientists by endowing the prizes in perpetuity.
Intends to learn from failures of its forebears and run the prizes more responsibly.
Economics of prestige, if not well managed, can become a Frankenstein’s monster, especially when common good projects are badly executed. NLNG owes itself, writers and scientists a duty, not only to endow the prizes in perpetuity, but to bring in other experts, and adopt best practice.
Furthermore, scientists and writers need to be allowed to reclaim their prizes; exercise their right to tell their own story in their own way; take ownership of the prizes, and follow the industry trends and developments. Beyond the cash awards, the prizes have not done much to help the careers of winners – writers and scientists.
The endowment could have NLNG as the title sponsor, but it should be allowed to solicit for funds from corporate and philanthropic organisations such as Ford Foundations, USAID, Unicef, The Nigerian Content Development and Monitoring Board (NCDMB), Afriexim Bank, ADfB, Bank of Industry, Bank of Agriculture, United Nations Development Programme (UNDP), United Nations Educational, Scientific and Cultural Organization (UNESCO), United Nations Environment Programme (UNEP), United Nations Industrial Development Organization (UNIDO), United Nations University (UNU), The World Bank (WB), World Health Organization (WHO), NLNG shareholder companies, banks, fintechs, and multinational organisations.
Soliciting for funds from non-oil producing companies will change the current culture of the prizes and make the administration cheaper. Oil and gas business, with their high standards, and surfeit of funds present hotspots in the economy with the result that every project is expensive. Admitting non-oil players will allow the endowment purchase goods and pay for services at market rates rather than oil and gas company rates. To borrow the apt words of two NLNG’s Star Alumni – Dr. Babs Omotowa and Mr. Robert Omeire, drivers of the company’s famous Commercial Orientation & Cost Optimization programmes, which hopefully the company has embedded! Administrators of every project must think seriously about planning, budgeting, marketing, funding, disciplined execution and most importantly, sustainability.
NLNG has two funding options:
Title sponsorship which gives NLNG control, naming and bragging rights
If the amount is huge and immediately unavailable – the funds can be invested on a milestone basis over a period of time.
Major sponsorship which gives NLNG substantial control, naming and bragging rights.
In line with best practice and to ensure sustainability, the endowment will put a distance between NLNG and the prizes and restore its role as an interventionist and benefactor. The ensuing distance, as Chinua Achebe would say, becomes not a separation but a bringing together, like the necessary backward step which a judicious viewer may take in order to see a canvas steadily and fully.
Yes, the prizes have served NLNG well, but the company should learn the lessons of the Booker Prize. Every successful company moves with the times or is left behind.
The old order changeth yielding place to new … lest one good custom corrupts the world (Alfred Lord Tennyson).
• Ifeanyi Igwebike Mbanefo, former Manager, Corporate Communication and Public Affairs founded the NLNG Prizes.