Recall, Adam Smith in his classic ‘Wealth of Nations’ stated and I quote; “Every man, as long as he does not violate the laws of justice is left perfectly free to pursue his own interest, his own way and to bring both his industry and capital into competition with those of other men or order of men”. The aforementioned statement turned out to be the hallmark of capitalism, an economic system that agitates for freedom, competition and justice. An economic system that would sacrifice the centrally-planned economy on the altars of innovation and free enterprise. Smith and other classical economists see
the government as a parasite that sought to reap where it did not sow. To them, the entire economy could be self-regulated by this magical market mechanism dubbed- the invisible hand.
In Nigeria and other parts of Africa, economic systems are laced with evident government controls and regulations. These interferences pose serious threats to business growth and survival, especially for Small and Medium Enterprises (SME’s). To a large extent, these anti growth activities threaten employment opportunities and prospects across the continent. These activities which include: stiff regulations and controls, bottle necks, bureaucracy and high handedness of the government are the series of hurdles that are to be surmounted by business owners.
WHO IS THE GOVERNMENT?
This is a logical and well structured question that should be answered for further understanding of the topic. To Eyiyere in Ile(2002:3), it is a system through which people are ruled or a group of people who are mandated by legal, religious, natural, economic or political power to drive the affairs of the people.
In this section of the work, we would discuss some of these inimical regulations using practical examples to explain how they pose threats to jobs in Africa. However, for the purpose of availability of data, focus, in depth explanation and specificity, the discussions will focus on Nigeria (my home country). Without further ado let us delve into the crux of the matter.
EXPLOITATIVE TAX SYSTEM
This, by far is the most severe of all the anti growth activities of the government. Large scale industries tend to use their large capital base and wide profit margins to cushion the shocking effects of these exploitative taxes. On the other hand, Small and Medium Enterprises (SME’s), that constitute a significant proportion of the economy, become vulnerable and the worst hit by these tax impositions. Numerous taxes, fines, dues, development fees, registration fees, sanitation fees, property rates etc. force businesses in Nigeria to shut down even before they kicks start. Some of these businesses run in to huge debts in order to finance their running capital while others reduce their staff strength so that they can pay these taxes.
Pathetic cases of business outlets locked down or sealed government authorities are a common sights in the metropolis like Lagos, Abuja, Aba, Asaba etc.To add insult to injury, the government at all levels collect these taxes. On Monday the Federal Inland Revenue Service (FIRS) knocks on Mr Obi’s door (a hypothetical business owner), on Tuesday the State Environmental Protection Agency does the same and on Wednesday the Local Government Infrastructural Task Force comes threatening. How do we expect Mr Obi’s business to survive? How do we expect him to pay his two assistants from the meager profit accrued from his photocopying business? Is not glaring how extreme these effects could be on Mr Obi and thousands of other Africans?
BUREAUCRACY IN THE EMPLOYMENT PROCESS
A quintessential advert placement for a government employment opportunity would have clauses like: “Twenty photocopies of your résumé”, ” Five photocopies of your application letter addressed to the Director of the ministry, the Assistant Director, the Permanent Secretary, the Principal Officer and the Senior Principal Officer “,” Letter of attestation from a notable government official ” etc. When the applicant must have successfully scaled through these hurdles, the main trouble starts. During the selection process, the applicants’ ingenuity, dexterity, academic qualifications and psychomotor abilities are shoved aside and the questions of ethnicity, who do you know?, religious and political affiliations become the benchmark for selection. In most cases, the most qualified applicants are not selected. This has turned the Nigerian public service into a beehive of ethnic jingoism, nepotism, religious favoritism and mediocrity.
Nigeria, with over 24% unemployment rate, does not need to burden its employment process with excessive regulations and controls. Most people in Nigeria are unemployed, not because of unavailability of jobs, but because of the inaccessibility of those job opportunities. A practical example is the Nigerian Immigration Services saga. Prior to its March 15th, 2014 selection process, the commission sold six and half million application forms for only four thousand five hundred job vacancies. The applicants were mandated to pay a processing fee of one thousand naira amounting to some six billion naira revenue to the commission(Online Vanguard:2014). These job vacancies must have been filled by applicants, sitting in the comfort of their homes and recommended by top government officials while scores of people were injured in the stampede at the various selection centers in the country. While the Vanguard newspaper confirmed sixteen people dead, Wikipedia estimated the number of death to be between sixteen and twenty four.
EXTREME REGULATIONS AND OUTRIGHT BANS
It is no longer news for African governments, at all levels, to wake up and the enact laws that place bans and embargoes on certain economic activities. In the year 2009, Nigeria was in the wave of the ban of commercial motorcycle riding in state capitals and major metropolis like Ikeja, Abuja, Aba, Enugu, Owerri, Awka etc. This was done to reduce the rate and finally combat the issue of robbery, forceful abductions and widespread accidents that was allegedly caused by commercial motorcycle riders. Regrettably, the unemployment rate increased because of the now unemployed commercial motorcyclists, motorcycle dealers and repairers. To this effect, the crime wave in the country increased, giving the government a full dose of what the economists call- Cobra effect(a situation where a government policy achieves the negative results it was meant to correct).
In the course of this research, a former member of the Abia State Union of Okada Riders, who chose to remain anonymous, confided that the ban of commercial motorcycle riding was influenced by heavy bribes offered to top state government officials by auto tricycle importers. This solidifies Bernard Shaw’s statement that all coalitions, both by government and its unions, are conspiracies against the common man. Corrupt members of the government, without giving an ounce of care, amass wealth at the expense of threatening job opportunities in Africa.
RASH GOVERNMENT DECISIONS
In Nigeria and the entire African continent, the issue of bad governance still stifles economic growth and development. These governments make rash and irrational decisions which the poor masses pay dearly for the consequences. Rash decisions range from imported policies that cannot work in the continent to demolition of buildings in the process of ‘town planing’. Thirteen years ago, the Kaduna textile mill, a jointly owned venture by nineteen northern state governments, was shut down. According to its management, the corporation was shut down because it was facing undue competition from cheaper and more durable foreign textile materials that flooded the market. The government left these workers without any means of livelihood and with unpaid entitlements of over four billion naira(This Day Online:2015).
Still in line with rash decisions, the Indigenization Policy in the Abia State school system is another example. On October 2011, the Abia State government issued a directive for the immediate disengagement of all non-Abia indigene from its public school system. This left the school system wanting in the area of manpower quality and quantity. Was the government questioned? No! One can only imagine the emotional, psychological, social and economic trauma these affected workers faced. With all these strong points marshalled out by the writer and many more others by the rest of writers, it is already visible to the blind and audible to the deaf that government regulations and controls are the biggest threats to jobs in Africa.
The Old Chinese Sage would say, “A problem shared is a problem half solved”. Having identified these inimical regulations and controls that threaten jobs in Nigeria and Africa as a whole, the perfect solution is not to eliminate government interventions from the economic system. Truth be told; government interventions are quiet indispensable. However, the undeniable fact is that if these regulations are soft pedaled and those that undermine economic growth and development are removed, then our Utopian dream would be almost attainable. Who says that the future of Africa’s economy would not be better than its gloomy past?.
THANK YOU AND LIBERTY TO ALL.
Ile, N.M.(2002): Government Business and Labor Management Relations in
Nigeria. Enugu:Otuson Limited.
Vanguard (2014): Immigration Job Test Tragedy: Over 16 Feared Dead.
Available at http://www.vanguard.com/immigration-job-test-tragedy.
Accessed June 19th, 2015.
Smith, Adam.(1776): An Inquiry into the Nature and Causes of Nations
(1ed.). London: W.Strahan. Retrieved 2012-12-07 via Google Books.
Wikipedia (2014):2014 Nigerian Immigration Recruitment Tragedy.
Available at http://www.Wikipedia.com/2014-Nigerian-Immigration-
FOR THE YOUNG AT HEART