Taking bets on the future
When Adam Smith was asked whether Britain’s loss of its colonies in America in the 18th century marked the end of Britain as a power, he replied with his now famous quote – ‘There is a great deal of ruin in a nation’. What he meant was that it takes a lot – certainly more than a single event – to destroy a nation. Human ingenuity, cultural dynamism, accumulated knowledge and the mere presence of humans means that countries can always give themselves a second chance even after seemingly catastrophic events. And Smith was right – whatever one might think of the propriety of the enterprise, Britain did go on to build an even bigger empire spanning the globe after the loss of its American colonies.
This is not an unusual story. That countries can pick themselves off the floor after a terrible disaster is not as uncommon as one might think. I can never stop thinking about the fact that Japan had two mighty atomic bombs dropped on two of its largest cities within three days of each other in August 1945 and yet, less than 20 years later, it was hosting the Olympics in 1964.
In the depths of despair, humans are often forced to dream up new ideas that help to seed a new future. Consider some of the companies that came out of America’s Great Depression – 7-Eleven, Revlon, Publix and of course Disney. All still going strong today. Some companies, which were born well before the depression came up with ideas that helped them, weather the storm of the crisis. It was during the depression that Marvin Bower met James McKinsey and persuaded him to start what we now know as ‘management consulting’ as exemplified by McKinsey. In search of new ways to reach hard pressed consumers and convince them to buy its products, Procter & Gamble started sponsoring so many radio programmes that a whole new genre – soap operas – was born.
Nigeria has gone through economic despair in the last six years. There is a certain level of economic suffering that is permanent in Nigeria, certainly in my more than four decades alive. But the last few years have been particularly bad with frightening levels of unemployment, back to back to economic recessions, crushing inflation and a currency that loses every fight it gets into with the dollar. Add leadership that cannot inspire even cheap hope in anyone and it will take the starriest eyed optimist to make the case for believing in Nigeria at this point in time.
Nevertheless, allow me to be that guy for a brief moment. From a personal point of view, I have never made more investments in Nigeria than I have in the last couple of years. Some of it is pure coincidence while some of it is just the fear of missing out on what I see a number of my friends and acquaintances doing. But a lot of it is also because I believe that something is happening, right now, in-spite of the conditions of the country and its leadership that might be described as the seeds of the future being sown. It is difficult to see (maybe because it doesn’t exist and the light at the end of the tunnel is an oncoming train?) but I imagine it felt the same in the depths of despair in the countries described earlier.
A phrase I increasingly hear from a number of my friends who are very invested in Nigeria is ‘people dey build’. That is, they are daily seeing new companies and ideas being launched to solve various problems in the Nigerian economy. I am seeing them too. There is for sure an enthusiasm, and the accompanying possibilities, for people to turn their ideas into real businesses. Nigeria is a poor country so by definition capital will always be scarce. But you only need to speak someone who has been around for 10 years or more to know that, while raising money remains difficult, it is undoubtedly a lot easier in today’s Nigeria than the one of a few years ago. People, Nigerians and non-Nigerians, are taking bets on the future by putting their money where their mouth is. You only need to scan the tech news for a couple of days to see the evidence of this.
And it’s not just tech start-ups. The last time I put money in Nigerian stocks, I got burnt so badly I swore never to touch them again. Over a decade ago, there were a number of primary offers and private placements that Nigerians rushed into. Many turned out to be scams or just bad investments and such offers simply dried up over the years. I did not even think it was possible for an investment to go down to zero but that is exactly what happened to my ‘investments’ in Nigerian stocks and primary offers.
There are however many things I have sworn never to do only to end up eating my words. I vowed never to wear Crocs but I now find myself a witness bearer of their comfort. Recently I put my money into the new MTN offer and convinced my wife to do the same. MTN is no start-up. Given how Nigeria’s demographics skew very young, it might not be an exaggeration to say that it is older than the majority of Nigerians alive in the country today. But after several near death experiences at the hands of Nigerian regulators, the company is alive and dominant as Nigeria’s number one telecommunications outfit. It has found a second wind with a new mobile money license that will surely turn many more millions of Nigerians into active participants in the country’s economy and connect them with the dozens of start-ups building things for them.
Because I find myself cautiously optimistic about Nigeria’s economic future – that the seeds for a better tomorrow are being planted today, I am also cautiously optimistic on MTN’s future and the role it will play in the economy once the current despair is some way behind us. People dey build. And the shovels they will need to do all that building will come from companies like MTN. I also like how the offer has been structured to reward holding the shares for the long term. God knows Nigeria can do with more people taking a long term view of the country and its prospects. The present is depressing enough and if we cannot dare to dream that tomorrow might be better, then we might as well pack it in as our job here is done.
If like me you have you been burnt in the past and swore never again, I urge you to take a bet on the future of the country – beyond the troubles and bleakness of today – in whatever way you can. It is hard to make the case for a country with half of it practically at war, with inflation running its own race and poverty untrammelled and leadership that cannot bring itself to inspire the country with new ideas. But if you can look away from all that for a moment to see what is happening today that might be useful tomorrow, then you might be confident enough to take that bet on the country.
After all, there is indeed a great deal of ruin in a nation.
Fawehinmi is a Nigerian accountant and investment banker based in the United Kingdom and writes publicly on the Nigerian economy.