INSOURCING OF FUNDS: A Corporate Blueprint for Waking the Giant of Africa
Looking at the Nigeria of today, our sole dependence on
crude oil has led to unthinkable hardships among the masses. What is the way
out, particularly in this current economic era? This is the exact reason why
people like me want to look inwards.
Some might support borrowing money from institutions like
the World Bank to drive the economy. While that is not a inherently bad idea,
it inevitably leads to a heavier debt burden, which further worsens our
economic situation. This is why I am preaching the insourcing of funds. I will
not elaborate on every single detail here, but I want to briefly describe the
concept.
Consider the 36 states in Nigeria, which almost entirely
depend on the Federal Government for monthly allocations. Until recently, many
people did not realize that these states have been operating merely like
puppets, living on the remnants of the mother cat. When federal allocations
drop, many states cannot pay salaries for months—even those that previously
claimed to have robust ways of generating Internally Generated Revenue (IGR).
Hmm. Where exactly are the IGRs?
To change this trajectory, here is a blueprint for what Mr.
President should implement, and what the state governors must cooperate with:
1. Nigeria as a Corporate Entity
Nigeria should be approached and managed like a massive
conglomerate. Let us call it Nigeria Group of Companies, Plc.
2. Executive Leadership as Corporate Directors
Mr. President should function as the Chief Executive Officer
(CEO), and the Vice President should serve as the Managing Director.
3. States as Specialized Subsidiaries
Each of the 36 states should function as an individual
company under the parent conglomerate, with each state focusing on a specific
product or industry. The state governors will serve as the managing directors
in charge of their respective state companies.
4. Performance-Based Capitalization and Audits
The monthly federal allocation should no longer be treated
as a handout; instead, it should be the operational capital for running the
state business. Every three months, there must be a strict accounting audit to
review each state company’s performance and operations.
5. Revenue Sharing and Retained Earnings
To incentivize growth, each state company will retain 70% of
its monthly revenue to reinvest in its local economy, while contributing 30%
back to the mother company (the Federal Government).
6. The Role of Government Arms
The Executive arm of government will serve as the active
managers and directors of Nigeria Group of Companies, Plc. The Legislative arm
will function as the Board of Directors, ensuring accountability and oversight.
This may sound like an economically foolish idea to some.
However, seemingly foolish ideas that have never been tried are often the
wisest options in times of crisis.
To get straight to the point: each state must make its local
economy work independently. We must end our joint dependence on oil. Every
state needs to look closely at its area of economic advantage and focus heavily
on production.
For instance, if Ogun State focuses on crop farming and
processing, Osun might go into poultry farming. Ondo could focus on tourism,
Delta on petroleum product refining, Imo on furniture manufacturing, Sokoto on
leather works, Benue on pharmaceuticals, and Rivers on automobile assembly. Do
not focus too much on these specific examples; the core concept is what
matters. Every single state must focus on production.
When every state begins to produce and trade, we will
witness a swift, steady, and uncontrollable surge in the economy of Nigeria.
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without the express written permission of the author.
Author's Email: brillcrown@gmail.com
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