” For example, it has become a practice lately that only a veterinary doctor is deemed fit to man a meat factory” writes Faruq
The private sector enterprise is believed to be more efficient and effective than its public sector equivalent in a given economy. Therefore, it became a common practice all over the world for governments to establish their own ‘private’ corporation, primarily for the provision of goods and services, creating jobs and to augment their revenue base. Similar to private businesses, the state-owned corporations are profit-oriented. They also implement all the principles and practices of corporate governance being practiced in the private sector. Hence the state corporations are performing excellently in other climes. For instance, Network Rail Limited is England’s state-owned enterprise which handles England’s industry rail infrastructure and asset management. This resulted into increased number of passengers, better safety and £6.2 billion revenue in 2013, while employing 37,000 people.
This, perhaps was possible due to British’s tradition of strict adherence to laid down procedures and decent corporate culture. They make sure the right people with the requisite education, skills and experience occupy the appropriate positions and skillful people are recruited to perform tasks. This definitely translates into quality goods and services as well as penetration of their products into offshore markets. This has been the trend in most economies, in both private and public sector. Offices of Chief Executive Officers (CEOs) and Board of Directors are very competitive, not on mere political affiliation, loyalty or in consideration of what in Nigeria is termed ‘federal character’. In other words, the best are selected to man the affairs of even the state-owned corporations.
Similar to the practice in the west, successive Nigerian regimes have established numerous state-owned enterprises, namely, Ajaokuta Steel Mill, Power Holding Company of Nigeria (PHCN), Nigeria National Petroleum Corporation (NNPC) among other similar enterprises. However, it is disheartening to note that instead of increased efficiency and attainment of the goals of establishing them, these type of enterprises mentioned earlier are either inefficient, dilapidated or completely collapsed. One must agree with the fact that NNPC is one of the most efficient among government companies but it was reported to have been declaring loss in the recent past.
Between 2015 and 2017 alone, the Group posted a net loss of N547bn. In Bauchi state too, almost all the state corporations are in condition similar or even worse than that of Nigerian national assets. A close look at Bauchi Meat Product Company, Bauchi Fertilizer Company, Bauchi Furniture Company will confirm the above narrative. I could not be furnished the exact figures of remittances of these institutions because of adherence to Oath of Secrecy but the source relates that the figures are not something encouraging.
How did we get to this level then? Well, a close observation of the state of affairs in these state-owned enterprises reveals the fact that successive governments have been carried away by managers’ qualifications rather than required management skills needed to turnaround these assets. The Managers are appointed mostly on the basis of their qualifications as being related to the ‘core business’ of the company’.
For example, it has become a practice lately that only a veterinary doctor is deemed fit to man a meat factory. This appears to be the problem because it is beyond knowing health status of animals to turn around these types of venture. Apart from integrity, which is often inherent, any good manager of such profit-oriented government enterprise should possess at least some basic skills in marketing, human resource, finance, production and strategic management. The managers must not necessarily be graduates of business administration but need to augment their science or engineering education with at least a sandwich executive business education available in most higher educational institutions.
This position is consistent with the realities in most successful multinational corporations. For instance, apart from his engineering qualification, the CEO of Microsoft, Satya Nadella possessed an MBA from the University of Chicago Booth School of Business. Similarly, Pichai Sundararajan, the CEO of Google obtained The Wharton School Stanford University MBA after his metallurgical engineering degree.
In the same vein, there are empirical evidences that established a strong correlation between CEOs business education qualification and firm performance. For example, King, Srivastav, and Williams (2016) found that CEOs with better quality of MBA education are more innovative, responsive and do outperform their peers. Similarly, 8 out of 10 of the best ranked CEOs in the US have business qualification.
It is therefore imperative that candidates for these roles are considered on the basis of their business management skills, among other important criteria. These business management skills have been proven to be responsible for the turnaround of most successful enterprises globally. We need business-minded individuals to man the affairs of the state-own corporations, with a vision to take our goods and services to the farthest local and offshore markets. This will in turn boost the state’s revenue, create jobs and improve the country’s foreign exchange earnings. A stitch in time saves nine!
Dr. Faruq Muhammad Abubakar lectures at Bauchi State University Gadau. He can be reached via [email protected]
The views expressed in this article are the author’s and do not necessarily reflect WikkiTimes’ editorial stance.
