Why government should run businesses
SIR: The notion that the government should have no role in business is a misguided principle that has led to significant economic and social setbacks in our generation. The government’s involvement in business is essential for creating jobs, managing minimum wage, and improving the quality of life for citizens. In the past, government initiated and managed businesses in Edo State, such as Bendel Feeds and Flour Mills, Bendel Insurance, New Nigeria Bank, Bendel Line, and Bendel Breweries. They were exemplary models of effective business management, providing top-notch services and employment opportunities.
The case of Bendel Line, a state-owned transport company, is a poignant example of the government’s ability to establish a successful business. For many years, Bendel Line efficiently transported people and goods from urban to rural areas, boasting a robust infrastructure that rivalled global standards. Despite its potential, the company was unfortunately dismantled, leaving behind an abandoned facility that testifies to the careful planning and organisation that once defined it.
The private sector’s takeover of the transport industry has failed to fill the void left by Bendel Line’s demise. Instead, our people are exposed to unsafe and unreliable transportation, forced to rely on precarious means such as motorcycles and tricycles. The skilled workforce that could have been employed in a coordinated transport company – professionals and artisans – are now relegated to informal and precarious work arrangements.
A well-run transport company like Bendel Line has the potential to provide a stable and dignified workforce, with employment opportunities tied to minimum wage standards. This highlights the importance of government involvement in business, as a means of creating employment opportunities, promoting economic growth, and ensuring social welfare.
The government’s divestment from these organisations and transfer of ownership to the private sector has led to unemployment as employees are often hired from outside the state or country. The private sector’s takeover of these businesses has not yielded the desired results, as many have been mismanaged and stripped of their assets, leaving behind abandoned facilities and unfulfilled promises.
Rather than abandoning business entirely, the government should explore alternative models that allow for collaboration with the private sector while maintaining control and influence. Public-Private Partnerships (PPPs) offer a viable solution, enabling the government to engage the private sector in service delivery while ensuring accountability and sustainability. Various PPP models, such as Build-Operate-Transfer (BOT).
Build-Own-Operate (BOO), Build-Operate-Own-Transfer (BOOT), Design-Build-Finance-Operate-Maintain (DBFOM), Public-Private-Joint-Venture (PPJV), Lease-Develop-Operate (LDO),
Operation and Maintenance (O&M), Service Concession Agreement, Management Contract, Concession Agreement and Franchising, can be adapted or combined to suit specific business need and contexts.
By adopting a double bottom approach that prioritises both sustainability and social impact, government-initiated businesses can thrive while making a positive impact on the community. This approach would enable the government to create employment opportunities, manage minimum wage, and improve the quality of life for citizens, rather than relying solely on the private sector’s profit-driven motives.
The government’s involvement in business is essential for promoting economic growth, social welfare, and sustainable development. Rather than relinquishing control to the private sector, the government should explore innovative models that balance business profitability with social responsibility. By doing so, we can revive the gains of government-initiated businesses and create a better future for our citizens.
Adolphus Arebanmhen Aletor.
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