‘The only way out of poverty challenge is to grow businesses’

National Competitive Council of Nigeria (NCCN) recently launched the maiden edition of its National Competitiveness Report and Sub-National Index, ranking all the 36 States and the Federal Capital Territory across key areas including Human Capital, Infrastructure, Economy and Institutions, with overall report showing that Lagos came out tops, followed by Delta and River States. In this interview with BENJAMIN ALADE, the Chief Executive Officer, NCCN, Mr. Chika Mordi, looks at details of the report and its importance for improved governance.

What is National Competitiveness Council of Nigeria all about?
The National Competitiveness Council of Nigeria (NCCN) is a public-private sector partnership that aims to boost Nigeria’s business competitiveness and ability to attract local and international investment. This report has become crucial for Nigeria’s government and private sector to engage in developing a clear competitiveness agenda and implementing vibrant competition strategies centred around creating the appropriate business environment with the aim of boosting collective prosperity in Nigeria.

Over last twenty months, NCCN working with the World Bank, UK’s Department for International Development (DFID), Michael Porter Institute for Strategy and Competitiveness and the Mexican Institute for Competitiveness with sponsorship from Ford Foundation and support from Tony Elumelu Foundation has worked hard to develop the report, which is expected will spur policy adoption and global best practice.

What we did was to set parameters for assessing the competitiveness of the 36-States of the federation including the Federal Capital Territory, Abuja, and based on those parameters that have pillars and sub-pillars around macro-economics, human capital, infrastructure, trade, settlement and enforcement, we came out with these reports.

After nearly two years rigorous work for this report, what would you say is the importance?
Well the excitement is that for the first time ever, we have an index that measures the states in terms of how competitive they are. This is a combination of almost twenty months of hard work, sometimes with limited resources and we have got to where we are today and people could see where their states stand, which policies are working and which policies are not working, and this could help governance at the state level. This is particularly important because states play a key role in positive economic outcomes that affect their citizens, particularly in employment generation. Unemployment is connected to poverty and poverty reduction is primarily resolved by job creation and when you have competitive environment businesses prosper and create jobs.

What is your expectation from states and other stakeholders regarding the work?
What we hope, and to be frank with you, we are not just waiting for reaction; we are going to go all out to engage them positively to improve on areas where they are challenged and to help them consolidate on the areas where they are doing well. It not advisory, it is very much of collaboration. We may see states ranked high being happy with the report and states ranked low being unhappy with it, but I must caution, it is important that they look at the total result, not just the aggregate ranking. They should look at the pillars and sub pillars so that they can be clearer how the ranking came about, so that they could use it as basis for improvement on what they are currently doing.

How sustainable is this index?
Time will tell! NCCN, as a matter of philosophy from the onset is not funded by the government and we designed it not to have any government funding because we don’t want what is called a situational capture. We don’t want a situation that when there is a change in government for example and maybe the government decides they don’t want this institution or the government in some cases now decides to hijack the institution. Why we have the credibility for this report is because we don’t have any single naira from any state nor Federal Government, so we can tell it as it is. We are depended on funding support from entities like the Ford Foundation, the Tony Elumelu Foundation, which is very committed to entrepreneurship. The only way out of Nigeria’s poverty challenge is businesses/market. If businesses grow they will employ people to generate jobs, when that happens, poverty will go down. Any other thing is going to be challenged. We already know that oil cannot do it even if we manage the oil in the most judicious manner, it can’t eliminate poverty, it can’t even significantly do the changes, but if you allow the market to prosper and businesses grow, employing people; that is how we can grow our economy.            

The report ranked Lagos, Delta and some other states well. What lessons can be drawn from their performances?
I have said this before that we have to be careful when we say a particular state has done well aggregate wise. It is important that you understand where they have done well because there is something to learn from every state because we have about more than twenty-six pillars on which they are measured and within that, there are other micro businesses. But, specifically, Lagos has done very well in terms of internally generated revenue, which has helped government financing, brought stability and made the state more robust. They also have had a natural resource advantage of having two seas ports and an International Airport, and the legacy of an industrial base and wealthy large population. Also, the state has been deliberate in business interventions, so there are some positives that come from that. Lagos also has the Corporate Affairs Commission office, which makes business registration a lot easier, and not every state is afforded that advantage. However, I can’t remember precisely, but it must be noted that every state in Nigeria is viable because the ultimate resource of wealth creation is the people and they all have them in abundance. If you search very well, there is natural resource in every state that could give them competitive advantage, and it’s just about identifying them, having policies that allow businesses explore those advantages and by so doing create jobs and reduce poverty. These will create revenue for government and help project execution. But if you base your income from allocation at the centre, that is federal allocation, then, competitiveness will not come.

In most of the rankings, Enugu came around top five and I will be wondering how this has become possible given that Enugu is predominantly a civil service state now. How would you defend this report before critics?
Look, everyone has his or her opinion and is even better to have an opinion if it’s informed. However, our methodology is very clear and we have stated it clearly for everybody to see. The weight we attach to each of the pillars, our survey on how we got our primary data and secondary data are clear. The way we analysed the results are also very clear, we did a lot of cost valuation, our results are replicable, so people can test our methodology.  Given all that, what should be asked about Enugu is, which pillars did they score high and which pillars did they not score high? And if you look at the pillars you will see that very clearly. So, for example, when you talk about transportation, there is an airport in Enugu.
 

When you also look at their finance, how leveraged they are, how much revenue they generate, fiscal discipline and all that. There are so many other considerations. We are very confident of the report we have for each state. Every state has their own strength, in some areas they did well and in other areas they lagged. And on aggregate for the country, we are not doing well. So, if you look at national competitiveness as country, we are weak. Coming first is good, but as a country we have problem with our competitiveness. So, this is a relative exercise, it’s not absolute. It’s still challenged.

The report is the first of its kind, but how often are we going to be seeing this?
This is going to be an annual report. We expect subsequent actuarial to be even better because you learn from every experience. There are things we would have loved to do that we couldn’t do. There are some things that were constrained and there are things you simply can’t do. So, in statistics, history matters a lot because you can draw trends. There was nothing to draw from the first exercise because it was the first, but in subsequent ones, we expect that there will be historical data from index and off-index to draw from.