The-need-to-address-corruption-in-nigeria-from-a-different-perspective
September 7, 2020 | News
THE NEED TO ADDRESS CORRUPTION IN NIGERIA FROM A DIFFERENT PERSPECTIVE
“Societies do not develop because they have reduced corruption, they are able to reduce corruption because they have developed.” Those were the very strong words of wisdom by Efosa Ejomo in his well-circulated online TED talk video recorded in New York on June 2019, which clearly painted a different perspective on addressing the issue of corruption in Nigeria. It is one of the best videos I have watched in recent times on the strategy to reduce corruption in a developing country like ours. We are strongly of the opinion that if adopted by Nigerian political leaders and ever well-meaning stakeholder in Nigeria, the issue of corruption will not only be drastically reduced, it will eventually be long dead before we know it. We therefore consider it necessary to draw the attention of all, to the said strategy by Efosa Ejomo, on addressing the problem of corruption.
According to Ejomo: “In 2011, someone broke into my sister’s office at the University where she teaches in Nigeria. And thankfully, the person was caught, arrested and charged to Court. But on getting to Court, the Clerk who was assigned to handle the case, informed her that they will not be able to process the paper work, unless she paid a bribe. At first, she thought it was part of a practical joke. But she realized they were serious. Then she became furious. I mean, think about it; here she was, a recent victim of a crime, with the very people who were supposed to help her, and they were demanding a bribe from her. That is just one of the many ways that corruption imparts millions of people in my country. Growing up in Nigeria, corruption permeated every element of the society. Reports of politicians embezzling millions of dollars were common. Police officers stealing money, or extorting money from every day hard working citizens was routine practice.
“I felt that development could never actually happen so long as corruption persisted. But over the last several years in my research on innovation, and prosperity, I have learnt that, corruption is actually not the problem hindering our development. In fact, conventional thinking on corruption, and its relationship to development, is not only wrong, but it is holding many poor countries backwards. So, the thinking goes like this. In a society that is poor and corrupt, our best shot at reducing corruption is to create good laws, enforce them well, and this will make way for development and innovation to flourish. Now it makes sense on paper, which is why many governments in developing nations invest billions of dollars annually on institutional reforms and anti-corruption programs. MANY OF THE PROGRAMMES FAIL TO REDUCE CORRUPTION BECAUSE WE HAVE THE EQUATION BACKWARDS. YOU SEE, SOCIETIES DO NOT DEVELOP BECAUSE THEY HAVE REDUCED CORRUPTION, THEY ARE ABLE TO REDUCE CORRUPTION BECAUSE THEY HAVE DEVELOPED. AND SOCIETIES DEVELOP THROUGH INVESTMENT IN INNOVATION.
“Now at first, I thought this was impossible. Why would anyone in their right mind invest in a society where, at least on the surface, seems like a terrible place to do business. Society where politicians are corrupt and the consumers are poor. But then, the more I learned about the relationship between Innovation and Corruption, the more I started to see things differently. Here is how this is played out. In sub-Saharan Africa, as the region developed its Telecommunication industry. In the late 1990s, fewer than 5% of the people in sub-Sahara Africa had phones. In Nigeria for example, the country had more than a hundred and Ten million people, but fewer than half a million phones are in the whole nation. Now, this scarcity fueled widespread corruption in the industry. I mean public officials who worked in the State-owned phone companies demanded bribes from people who wanted phones. And because most people could not afford to pay the bribes, phones were only available to those who were wealthy.
“Then, an entrepreneur named Mo Ibrahim, decided that he would set up a Telecommunication company on the continent. And when he told his colleagues about his idea, they just laughed at him. But Mo Ibrahim was undeterred. And so, in 1998, he set up Celtel. The company produced affordable mobile phones, and cell services to millions of Africans, to some of the poorest and most corrupt countries in the region. I mean countries such as Congo, Malawi, Sierra Leone and Uganda. You see, in our research, we call what Mo Ibrahim built – a Market Creating Innovation. Market Creating Innovation transforms complicated and expensive products into products that are simple and affordable. So, that many more people in the society could access them. Now, in this case, phones were expensive before Celtel made them more affordable. As other investors, some of his colleagues actually, saw that it was possible to create a successful mobile phones company in the continent, they flooded in with billions of dollars of investments. And this led to significant growth in the industry. From barely nothing in 2000, today virtually every African country now has a vibrant mobile Telecommunication industry. The sector now supports close to One billion connections. It has created nearly 4 million jobs, and generates billions and billions of dollars in taxes every year. Now, these are taxes the Government can now reinvest in the economy, to build their institutions. Here is the thing, because most people no longer have to bribe public officials just to get a phone, corruption, at least within this industry, has reduced.
“Now, if Mo Ibrahim had waited for corruption to be fixed in all of sub-Saharan Africa before he invests, he will still be waiting today. You know most people who engage in corruption know they should not. And the public officials who were demanding bribes from people to get phones, and those who were paying the bribes, they knew they were breaking the law. But they did it anyway. The question is why? The answer – scarcity. You see, whenever people would benefit from gaining access to something that is scarce, this makes corruption attractive. You know in poor countries, we complain a lot about corrupt politicians who embezzle State funds, but in many of those countries, economic opportunity is scarce. And so, corruption becomes an attractive way to getting wealth. We also complain about civil servants like the Police Officers and power sector workers who extort money from every day hard working citizens. But most civil Servants are grossly underpaid, and are leading desperate lives. And so for them, extortion or corruption, is a good way to make a living.
“You know this phenomenon also plays itself out in wealthy countries as well. When rich parents bribe University officials so their children can gain admission into elite Colleges, the circumstances is different, but the principle is the same. I mean, admission into elite Colleges are scarce, and so bribery becomes attractive. The thing is, I am not trying to say there should not be things that should be scarce in a society or things that are selective, what I am just trying to explain is this relationship between corruption and scarcity. And in most poor countries’, when too many basic things are scarce. I mean things like food, education, healthcare, economic opportunity, jobs; this creates the perfect breeding ground for corruption to thrive. Now in no way does this excuse corrupt behavior, it just helps us to understand it a bit better. Investing in business that makes things affordable, and accessible to many more people; attacks this scarcity, and creates the resources for government to reinvest in their economy. And when this happens on a country-wide level, it could revolutionize nations.
“Consider the impact in South Korea, Now, in the 1950s, South Korea was a desperately poor country, and it was very corrupt. The country was ruled by an authoritarian government, and engaged in bribery and embezzlement. Economists at that time, said South Korea was trapped in poverty and they refer to it as an economic-basket-case. When you look at South Koreans Institutions, even as late as the 1980s, they were in per with some of the poorest and most corrupt African countries at that time. But as Companies like Samsung, Kia, Hyundai; invested in innovation that made things much more affordable for so many more people, South Korea, ultimately became prosperous. Now, as the country grew prosperous, it was able to transition from an authoritarian government, to a democratic government, and has been able to reinvest in building its institutions. And this has paid off tremendously. For instance, in 2018, South Korean President was sentenced to 25 years in prison on corruption related charges. This could never would have happened decades ago when the country was poor and ruled by an authoritarian government.
“In fact, as we looked at most prosperous countries today, what we find was, they were able to reduce corruption, as they became prosperous; not before. So, what does that leave us? I know it may sound like I am just saying, we should just ignore corruption, that is not what I am saying at all, what am suggesting though, is that corruption, especially for most people in poor countries, is a ‘walk-around’. It is a utility in a place where there are fewer options to solve a problem. Investing in innovations that make products much more affordable for many people, not only attack this scarcity, but it creates a sustainable source of revenue for government to reinvest into the economy to strengthen their institutions.
“This is a critical missing piece in the economic development puzzle that will ultimately help us reduce corruption. You know, I lost hope in Nigeria when I was 16years and in some ways, the country has actually gotten worst. In addition to widespread poverty, and endemic corruption, Nigeria now actually deals with terrorist organizations like Boko Haram. But somehow, I am more hopeful about Nigeria today, than I have ever been before. When I see organizations investing in innovations that are creating jobs for people, and making things affordable, I mean organization like Life Stores Pharmacy - making drugs and pharmaceuticals more affordable for people; Or Metro Express Africa tackling the scarcity of distribution and logistics for many small businesses; Or Andella, creating, economic opportunities for software development; I am optimistic about the future. I hope you will be too. Thank you.”
Zik Gbemre.
December 10, 2019
Mobilize Others to Fight for Individual Causes As If Those Were Our Causes
“Societies do not develop because they have reduced corruption, they are able to reduce corruption because they have developed.” Those were the very strong words of wisdom by Efosa Ejomo in his well-circulated online TED talk video recorded in New York on June 2019, which clearly painted a different perspective on addressing the issue of corruption in Nigeria. It is one of the best videos I have watched in recent times on the strategy to reduce corruption in a developing country like ours. We are strongly of the opinion that if adopted by Nigerian political leaders and ever well-meaning stakeholder in Nigeria, the issue of corruption will not only be drastically reduced, it will eventually be long dead before we know it. We therefore consider it necessary to draw the attention of all, to the said strategy by Efosa Ejomo, on addressing the problem of corruption.
According to Ejomo: “In 2011, someone broke into my sister’s office at the University where she teaches in Nigeria. And thankfully, the person was caught, arrested and charged to Court. But on getting to Court, the Clerk who was assigned to handle the case, informed her that they will not be able to process the paper work, unless she paid a bribe. At first, she thought it was part of a practical joke. But she realized they were serious. Then she became furious. I mean, think about it; here she was, a recent victim of a crime, with the very people who were supposed to help her, and they were demanding a bribe from her. That is just one of the many ways that corruption imparts millions of people in my country. Growing up in Nigeria, corruption permeated every element of the society. Reports of politicians embezzling millions of dollars were common. Police officers stealing money, or extorting money from every day hard working citizens was routine practice.
“I felt that development could never actually happen so long as corruption persisted. But over the last several years in my research on innovation, and prosperity, I have learnt that, corruption is actually not the problem hindering our development. In fact, conventional thinking on corruption, and its relationship to development, is not only wrong, but it is holding many poor countries backwards. So, the thinking goes like this. In a society that is poor and corrupt, our best shot at reducing corruption is to create good laws, enforce them well, and this will make way for development and innovation to flourish. Now it makes sense on paper, which is why many governments in developing nations invest billions of dollars annually on institutional reforms and anti-corruption programs. MANY OF THE PROGRAMMES FAIL TO REDUCE CORRUPTION BECAUSE WE HAVE THE EQUATION BACKWARDS. YOU SEE, SOCIETIES DO NOT DEVELOP BECAUSE THEY HAVE REDUCED CORRUPTION, THEY ARE ABLE TO REDUCE CORRUPTION BECAUSE THEY HAVE DEVELOPED. AND SOCIETIES DEVELOP THROUGH INVESTMENT IN INNOVATION.
“Now at first, I thought this was impossible. Why would anyone in their right mind invest in a society where, at least on the surface, seems like a terrible place to do business. Society where politicians are corrupt and the consumers are poor. But then, the more I learned about the relationship between Innovation and Corruption, the more I started to see things differently. Here is how this is played out. In sub-Saharan Africa, as the region developed its Telecommunication industry. In the late 1990s, fewer than 5% of the people in sub-Sahara Africa had phones. In Nigeria for example, the country had more than a hundred and Ten million people, but fewer than half a million phones are in the whole nation. Now, this scarcity fueled widespread corruption in the industry. I mean public officials who worked in the State-owned phone companies demanded bribes from people who wanted phones. And because most people could not afford to pay the bribes, phones were only available to those who were wealthy.
“Then, an entrepreneur named Mo Ibrahim, decided that he would set up a Telecommunication company on the continent. And when he told his colleagues about his idea, they just laughed at him. But Mo Ibrahim was undeterred. And so, in 1998, he set up Celtel. The company produced affordable mobile phones, and cell services to millions of Africans, to some of the poorest and most corrupt countries in the region. I mean countries such as Congo, Malawi, Sierra Leone and Uganda. You see, in our research, we call what Mo Ibrahim built – a Market Creating Innovation. Market Creating Innovation transforms complicated and expensive products into products that are simple and affordable. So, that many more people in the society could access them. Now, in this case, phones were expensive before Celtel made them more affordable. As other investors, some of his colleagues actually, saw that it was possible to create a successful mobile phones company in the continent, they flooded in with billions of dollars of investments. And this led to significant growth in the industry. From barely nothing in 2000, today virtually every African country now has a vibrant mobile Telecommunication industry. The sector now supports close to One billion connections. It has created nearly 4 million jobs, and generates billions and billions of dollars in taxes every year. Now, these are taxes the Government can now reinvest in the economy, to build their institutions. Here is the thing, because most people no longer have to bribe public officials just to get a phone, corruption, at least within this industry, has reduced.
“Now, if Mo Ibrahim had waited for corruption to be fixed in all of sub-Saharan Africa before he invests, he will still be waiting today. You know most people who engage in corruption know they should not. And the public officials who were demanding bribes from people to get phones, and those who were paying the bribes, they knew they were breaking the law. But they did it anyway. The question is why? The answer – scarcity. You see, whenever people would benefit from gaining access to something that is scarce, this makes corruption attractive. You know in poor countries, we complain a lot about corrupt politicians who embezzle State funds, but in many of those countries, economic opportunity is scarce. And so, corruption becomes an attractive way to getting wealth. We also complain about civil servants like the Police Officers and power sector workers who extort money from every day hard working citizens. But most civil Servants are grossly underpaid, and are leading desperate lives. And so for them, extortion or corruption, is a good way to make a living.
“You know this phenomenon also plays itself out in wealthy countries as well. When rich parents bribe University officials so their children can gain admission into elite Colleges, the circumstances is different, but the principle is the same. I mean, admission into elite Colleges are scarce, and so bribery becomes attractive. The thing is, I am not trying to say there should not be things that should be scarce in a society or things that are selective, what I am just trying to explain is this relationship between corruption and scarcity. And in most poor countries’, when too many basic things are scarce. I mean things like food, education, healthcare, economic opportunity, jobs; this creates the perfect breeding ground for corruption to thrive. Now in no way does this excuse corrupt behavior, it just helps us to understand it a bit better. Investing in business that makes things affordable, and accessible to many more people; attacks this scarcity, and creates the resources for government to reinvest in their economy. And when this happens on a country-wide level, it could revolutionize nations.
“Consider the impact in South Korea, Now, in the 1950s, South Korea was a desperately poor country, and it was very corrupt. The country was ruled by an authoritarian government, and engaged in bribery and embezzlement. Economists at that time, said South Korea was trapped in poverty and they refer to it as an economic-basket-case. When you look at South Koreans Institutions, even as late as the 1980s, they were in per with some of the poorest and most corrupt African countries at that time. But as Companies like Samsung, Kia, Hyundai; invested in innovation that made things much more affordable for so many more people, South Korea, ultimately became prosperous. Now, as the country grew prosperous, it was able to transition from an authoritarian government, to a democratic government, and has been able to reinvest in building its institutions. And this has paid off tremendously. For instance, in 2018, South Korean President was sentenced to 25 years in prison on corruption related charges. This could never would have happened decades ago when the country was poor and ruled by an authoritarian government.
“In fact, as we looked at most prosperous countries today, what we find was, they were able to reduce corruption, as they became prosperous; not before. So, what does that leave us? I know it may sound like I am just saying, we should just ignore corruption, that is not what I am saying at all, what am suggesting though, is that corruption, especially for most people in poor countries, is a ‘walk-around’. It is a utility in a place where there are fewer options to solve a problem. Investing in innovations that make products much more affordable for many people, not only attack this scarcity, but it creates a sustainable source of revenue for government to reinvest into the economy to strengthen their institutions.
“This is a critical missing piece in the economic development puzzle that will ultimately help us reduce corruption. You know, I lost hope in Nigeria when I was 16years and in some ways, the country has actually gotten worst. In addition to widespread poverty, and endemic corruption, Nigeria now actually deals with terrorist organizations like Boko Haram. But somehow, I am more hopeful about Nigeria today, than I have ever been before. When I see organizations investing in innovations that are creating jobs for people, and making things affordable, I mean organization like Life Stores Pharmacy - making drugs and pharmaceuticals more affordable for people; Or Metro Express Africa tackling the scarcity of distribution and logistics for many small businesses; Or Andella, creating, economic opportunities for software development; I am optimistic about the future. I hope you will be too. Thank you.”
Zik Gbemre.
December 10, 2019
Mobilize Others to Fight for Individual Causes As If Those Were Our Causes