….We also see many Governments failing to prepare for the future…… As a result, society increasingly is turning to the private sector and asking that companies respond to broader societal challenges. Indeed, the public expectations of your company have never been greater. Society is demanding that companies, both public and private, serve a social purpose – Larry Fink, CEO of BlackRock (Letter to Shareholders, 2018)
The World’s economies are shaped by great enterprises fuelled by vision and innovation. Research shows that in developing economies, the private sector accounts for at least 60% of Gross Domestic Product(GDP), 80% of Capital flows, and 90% of jobs. The well-accepted GDP calculation formula (GDP = private consumption + total Government expenditure + gross investment + net exports) shows a significant skew toward private investment and productivity as the key drivers of the economy.
A recent article in Nigeria’s This Day newspaper in Nigeria cited the following statement from the President of Nigeria:
“President Muhammadu Buhari has disclosed that Nigeria requires an investment size of N348.1 trillion to achieve the targets set out in its five- year National Development Plan (NDP) from 2021 to 2025. The projected investment portfolio, he said, would be contributed by the government, which would source for 14.3 per cent (N49.7 trillion) of the amount, while the balance of 85.7 per cent (N298.3 trillion) would come from the private sector”.
The CEOs are the privileged few, chosen or inspired to lead companies, businesses, and/or enterprises. A CEO has an outsized influence on the success or otherwise of a company. A CEO of one of the largest companies in the oil & gas sector operating in Africa shared his perspectives with me on the role of CEO. He explained that it took some time for him to realise that, as a CEO, he was more than a leader of a company and its resources - he was indeed contributing to building a national economy and impacting lives. Yes, he was a Nation Builder. Sounds almost heretical to ascribe Nation-building to anyone outside our “powerful” Governments. However, the truth is that it is the private sector that mobilizes capital, assumes risk, drives innovation, and harnesses resources to create economic value. This generates taxes for Governments, fuels our National economies, and promotes social cohesion. Is there a better definition of Nation-Building? These CEOs, whether they lead a Multinational company, aspiring new age-growth business, service-oriented business, or small/medium size enterprise, are all directly involved in Nation Building.
To be real Nation-builders in this context, the onus is on CEOs to run efficient, effective, and sustainable businesses in order to deliver the required benefits to society – great products and services, wealth creation, securing the means of livelihood for its employees, ecosystem partners and stakeholders alike. Great companies led by great CEOs produce great products and services which imprint the National brand in International markets. Can you imagine a BMW without a mental connection to German precision and artistry? Nation-building also means conscious involvement in building and shaping a better society through responsible corporate citizenship. This includes active engagement of Government and stakeholders to implement the right policies, laws, and regulations for the industry, economy, and society at large. Businesses cannot thrive in a failing society.
The CEO role is now more than a corner office with power, status, and authority. It is a power that should be responsibly translated into positive INFLUENCE for Society. With a population of over 1.2 billion and a market ripe for innovation at scale, there is an abundance of inherent entrepreneurial and human capacity to build great World-class businesses with strong ethical foundations in and across Africa. Globally, we are seeing more private sector activism driven by higher consumer and societal expectations all fuelled by the free information flow on the internet and social media. Companies and their leaders are increasingly being held to higher new moral standards and forced to take positions on societal issues. Africa will not be an exception for too long.
Nation-building is not the exclusive responsibility of Governments. As African economies continue to struggle with slower growth, rising income inequality and social tension, CEOs in African markets will have an even more pressing, compelling, social, and moral responsibility to build strong, innovative, and resilient businesses to mitigate these challenges. CEOs in African markets must see themselves more as Nation-builders rather than fringe players in their respective economies.
About the Author
Michael Ikpoki is CEO of Africa Context Advisory Partners. He provides mentoring services to CEOs in African markets.
For more information visit: https://www.africa-context.com/mentorship