Fifth Presidential Quarterly Business Forum

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YOU CAN’T PERSUADE EVERYBODY BUT NEED ONLY FIND A FEW GOOD PEOPLE WHO ARE DEDICATED AND COMMITTED TO MAKE THE CHANGES REQUIRED – OSINBAJO

**I always say that we cannot have all these smart people in this country and still have the problems we have.

 REMARKS BY THE VICE PRESIDENT, FEDERAL REPUBLIC OF NIGERIA, HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, AT THE FIFTH PRESIDENTIAL QUARTERLY BUSINESS FORUM AT THE BANQUET HALL, STATE HOUSE ON MONDAY SEPTEMBER 11, 2017 

PROTOCOL

Let me join the honourable Minister for Trade and Investment and also the Special Adviser to the president on the Economy, to thank you very much for taking the time to attend this 5^th Business forum, but more so for your commitment to this process of engagement, to improve not just this business environment, but to improve the economy as a whole.

Partnership with the private sector is not only merely a policy, but it is also the only sensible thing to do and our approach is to engage and work collaboratively to take criticisms and suggestions seriously and to respond.

I want to emphasise the issue of taking criticism and suggestions very seriously and responding. I think that one of the critical things is that there is a lot that needs to be done, but unless some of these are pointed out, even though there are obviously stuff that we know and constantly engage with, but unless some of the things are pointed out, regardless of how they are expressed, we are quite prepared to take a look at them and see how we can respond individually in some cases and collectively as a system.

I think it is important that these things are pointed out and there is no end to repeating the issues especially those issues that haven’t been addressed. So I want to encourage that we continue to make those criticisms and suggestions because our business is to make those changes and do what is required to make this environment make sense for us from the point of view of doing business and also to improve the economy generally.

I must say that bureaucratic reforms, almost by nature, involves a fair amount of drudgery and frustration and this, of course, is multiplied when you are dealing with sub-nationals who operate their own legislation and their own systems.

This is what we are trying to achieve here, we are trying to achieve Federal Government, State and Local Governments, interacting and responding in the same way to the private sector. So like I said, it involves a fair amount of drudgery and frustration. I think that we all need staying power to be able to cope with that whole process and see it to the end.

The key is to first recognise that the ease of doing business is first and foremost, a people issue, and it has been very rightly pointed out, also a capacity issue; getting the right personnel in the appropriate position. That is not necessarily an easy process, because very frequently you have to keep managing in cases where you don’t have the appropriate personnel.

I think that we are also committed to ensuring that we improve capacity and these interactions are very important in improving capacity, in improving the capacity of the regulators. The regulators are there to serve businesses and I think these are very important interactions; hearing what people are saying and also understanding the perspectives that people have on these issues which is also a very important aspect of capacity building. This is aside from the more formal capacity building processes like training programmes.

The second is to be focused, to stay the course. Many times you find that, and this is from my experience from working in the public sector for a considerable period of my professional life, that change is always slow but you must remain focused.

We issued four Executive Orders so far and I engaged with senior people in the Civil Service, Permanent Secretaries, Heads of Agencies, etc and after that engagement, trailed down the lines. So we had Permanent Secretaries training their own people, Heads of Agencies training their own people. This is a process which obviously will be long-drawn. We did a training that actually bumped out, there were far too many people who attended the training for it to make sense, that didn’t work. So we have to revise that and do it again.

The point I am making is that the process of doing any of these things, especially in a public service as large and diverse as ours, requires being focused and a great deal of patience but the important thing, and I want to say this for all of the colleagues I am working within PEBEC, is that they are focused and determined to ensure that we see this through.

This is true of all of the public servants that we are interacting with, you have heard many of them and you can be sure that we are on their case and we won’t let go until we achieve all of the objectives we have set for ourselves.

The third thing is the readiness to confront the covert and overt resistance of a system that is accustomed to rent and gratification, and I think it is important for us to acknowledge that and accept it. The private sector is also used to a system where there is constant gratification and rent-seeking, it is an interaction that has gone on for ages. No one who has done business in this environment who wouldn’t appreciate that is the truth and that is what generally happens.

In order to stop that system, so that things can be done properly, it involves a measure of doing, it involves also calling out public officials who are doing this sort of thing. It means that the private sector itself cannot say because I want to do my business as quickly as possible, I will not call out people asking for bribes or seeking gratification, we just have to do these things properly, if we don’t, we will never solve the problem.

Part of the problem we have, and some of it may even be cultural, is that nobody wants to report anybody, within the system, outside the system, nobody really wants to report anyone. I think we scored a good point with the whistleblower policy because of the economic interest which superseded the individual interest. When people say that they would get paid for reporting, they forget the sentiment of not being responsible for bringing someone else down.

We can’t always do a reward system. For those in the private sector, especially seniors like those who are here today, you must be prepared to work with us especially in our anti-corruption fight to ensure that we are able to change the way things are done in a manner that will enure to the benefit of all of us for now and the future.

The fourth is changing the mindset of the regulator. We have repeated this point, the regulator must not be an obstacle, the regulator must be a facilitator. We have tried to do this through the MSME clinics; we have gone round several of the states taking the regulators with us – NAFDAC, SON, FIRS, BOI and others. They have gone around with us everywhere, looking for a way to ensure that we are able to get the MSMEs to understand how the regulators work and for the regulators also to work closely with the MSMEs.

It has led to very excellent results I must say, we’ve found that in several of the states we have been, the MSMEs have been forthright as to what their problems are. In many cases, the regulators have set up in those states and in some cases, revitalised their operations in those states, it has led to a greater interaction between the regulators and MSMEs.

Again, it has been repeated here, we need to change the mindset of the regulators and judge the regulator by how much they are able to do, how much service they are able to render, and we must be able to see this. The point that was very well made is that we must set new KPIs for our regulators, so that the regulator also understands that this is about in some cases, hand holding our small businesses to ensure that they are able to do their business well and improve the economy generally.

NAFDAC gave a very spirited response to some of the criticisms that have been levelled, but we really must continue to see these interactions to mean that our work is far from being done. I think that NAFDAC will also probably accept that it is a systemic change that is required. What we need is to be able to hear from the private sector and from all of these people who we see every day when we go out on our MSME clinics from state to state who are saying, “yes, we can give NAFDAC 90%”, that is truly where we are going. I am sure that you are all set to do that.

The other thing I want us to note is that in this matter of ease of doing business, we need the buy-in from the private sector in very significant ways. I listened to Deoye from SBL talking about how the NBA has worked very closely with PEBEC and the government in so many different ways.

We also want to see a situation where there is much more interaction, especially with professional groups. If you look at one of the major questions investors ask, local and foreign, how do you resolve cases in our courts?  How long does it take?  A simple dispute can last forever. Most judges are prepared to do cases, most judges do not cause delays. Delays are largely caused by us and when I say us, I refer to lawyers.

You know there is an arbitration clause in an agreement, it means it should go to arbitration but you also know that if you challenge the arbitration clause, it can be stuck in the courts for three years. But there is no discipline, you know the whole purpose of an arbitration clause is to take this out of the court system. Nowhere else in the world would you have a situation where people do these sorts of things we do when there are clear clauses in the agreement.

Unless the NBA is prepared to take the disciplinary steps that are required, people will be engaged in delayed tactics. There is a case of a Nigerian lawyer who practices in England, and he had worked here for a while, he took up a criminal case and he lost the case in the high court in England and went to the court of appeal.

In the court of appeal, the judges were hinting that he should drop the argument, that his position was inarguable. At the end of the case he lost, and the court of appeal wrote to the law society that he should be disbarred for taking an unarguable point and resisting the hint of the court of appeal. So he had to come home and ask for help in every possible way. I had to write a reference letter as attorney general at the time, to say this fellow has worked hard in Nigeria and he is a good lawyer.

But to underscore the point, in many jurisdictions, you can’t take the chances our lawyers take. This is a man that was practicably disbarred for taking an unarguable point, not the kinds of delays that we are engaged in, where a person knows that a case is going nowhere but he is ready to take it all the way to the Supreme Court.  So, I think that especially for business, we must really go beyond what we are doing at the moment.

For the airports, I have watched the airports very closely and a lot of things have been said about Abuja and what is happening in Lagos. But I want to say that, again as with many public utilities, they have been neglected for a very long time. I have asked Julius Berger to take a look at the Lagos airport and to assess for us what exactly the problems are or what the issues are with a view to opening it up for facility management and all of that.

But after they had taken a look at the facility, they said this thing is just terrible, neglect here and there over the years. And this is the case with most public utilities. It is not just a matter of saying that the lifts are not working but there is a fundamental problem with the entire electrical system.

First we need to do a general overhaul which is what we are looking at but more importantly, we need to take it out of the public sector, we need to concession the airports, fortunately, the Federal Executive Council has approved the concessioning of the Lagos Airport, Abuja and Kaduna.

So, we need to put this through and open a transparent process where we will get the best companies around the world to come and take a look at them. Obviously, this is a very attractive proposition for many because this could be a major hub for our sub-region and for Africa.  I think there is a lot that needs to be done to get to where we want.

We are taking the steps incrementally; we are trying to do the best we can with the facilities as we have them and I think to a certain extent, we are seeing improvements.

The other thing that I want to talk about is power. Our approach here has been quite dynamic and I just want to address one aspect of this.  I am sure that many of us recognize that the problem is not really generation because we have installed capacity that is more than sufficient for current needs. But more importantly, even if we are managing to generate about 6,000MW of power, I am told that about 2000 MW is not used or stranded as they say. What is going on is that the DisCos are turning down power so they are not taking as much power as it is being generated.  That is almost paradoxical in a situation where you don’t have enough power.

Why is this happening? There are two reasons; one is that they claim that they have collection difficulties so they can’t collect at the point of use for various reasons, some people are unwilling to pay; in some cases, they have other problems.  The more important problem is the relationship between transmission and distribution to point of use. So, there is a major problem with the kind of infrastructure that should have been invested in.

Transmission is not the current problem, it is more from distribution to point of use. So you are talking about the 33KV lights and the 33KV substations that have not been invested in. These investments ought to have been done by the DisCos but they are cash-strapped.

So we are looking at various options, what do we need to do? First to improve the distribution infrastructure to point of use. What NEC is doing with the eligible customer thing, is very crucial, the declaration of the eligible customer; that is one way out of where we are.

We cannot rely on what is going on at the moment as the solution, it is clear that the current system where the DisCos are supplying all the power there is through the grid and available systems can’t work especially because they simply can’t deliver all the power that is required.

So we need a willing buyer and willing seller programmes around the entire country. That is absolutely important and we intend to pursue that because that is what we need to make the quantum leap that is required.

What does that involve? We are looking at industrial clusters as an example, Kano garment market, Shomolu printing area, where we can have these eligible customer arrangements. This allows a willing buyer and willing seller, and the DisCos are going to be involved in this, but we are not going to restrict ourselves to just the DisCos in this kind of arrangement. Whoever is willing to provide power will be registered and enabled.

We are going to empower all sorts of off-grid initiatives because this is so important. When you look at what industry is saying, people are saying that they don’t want to pay more, but we really must pay more.

One of the problems we keep talking about is the cost reflective tariff. I am not too worried about those who cannot really afford any kind of increase, I think that there are so many who are willing to pay, especially industry.

If the industry gets industry quality power consistently, and you pay more for that, N10 more, that shouldn’t be too much of a problem. But we find that industry resists any kind of increase but my take is that they are not sure that the power will be industry quality and it will be consistent.

But when we have this willing buyer and willing seller arrangement, I am sure that we will be able to have the quality of power that we need consistently and certainly much cheaper than self-generation or private-generation of power.

We are also promoting solar power and there is the energizing education scheme which is building IPPs in nine universities and the surrounding communities of those universities. These are just some of the issues.

Our approach to power is dynamic, and we have to keep it so because there are changes that we see every day and we think that just pursuing the path that we have gone in the past few years is not going to work and certainly won’t deliver at the kind of speed that we require power now. We need to work a lot quicker and smarter to deliver the kind of power we need for industry in particular.

Let me end by saying what we ultimately need to make a real difference not just in the ease of doing business, but in our economy as a whole, which is a reformed movement of sorts. This is, if you like, a collaboration between the private and public sector, but also within government, legislature, judiciary and of course the executive and the private sector. We need to synergise.

You can’t persuade everyone that you need to get things right; that is what I have seen in practically every reform that we have made but we must find a critical mass of a few serious, dedicated men and women in the private sector, government, judiciary and legislature who can work together to get things done.

You can’t persuade everybody but need only find a few good people who are dedicated and committed to making the changes required. And these people can come from everywhere, for example, if you look at judicial reforms, most times, you are not going to find everybody working to enable judicial reform; you won’t find all lawyers and judges but a handful which is all that is required.

That is the same even with the legislature, you can’t persuade them to change the way that they do stuff. But there are a few people within legislature who understand where this country ought to be going and understand that we can’t be where we are or do things the way we have been doing them, and they can make the difference.

We need all of these individuals and so with the private sector and I want to say that all of us who are here should be part of that change and movement; people who are dedicated to see that we make a change in this country, and make a real difference in the ease of doing business because it makes sense for all of us.

I always say that we cannot have all these smart people in this country and still have the problems we have. I think it was Honourable Minister for Trade and Investment on Saturday, when we met with the Industrial and Competitiveness Council, refer to a particular individual and he said if with all of the brains and experience this man has in the private sector, we can’t solve the problem, then the problem must be real. I want to say the same to you here, plus private sector with some of the best minds and public sector with some of the best minds, if we can’t solve the problem, then it must be real.

But I want to say that I am confident that we will solve the problem.

Thank you.