An Engine without a
Lubricant:
Ever imagined…
- What the engine of a car would sound like when it runs out of engine oil and still in use for some 2 – 4 days?
- What would make of the same engine when the lubricant (engine oil) isn’t still applied some more days?
Should you have no experience
nor imagination of that, then…
- At the initial stage, the engine sound would be unimaginably reverberating, adversely affecting the smooth movement of the motor vehicle
- And if the lubricant isn’t still used for more days, in no time would the engine wear out
With the SMEs being the
engine of the economy and in line with the aforementioned, it is paramount for
every nation to promote its economic lubricant, as this would drive a smooth,
increased and efficient maintenance of the economic engine, whilst ensuring
that the economy is not brought to a standstill.
This in mind, the
Economic Lubricants are the various policies, concerns and activities of government that drive
the smooth achievement of Economic optimisation.
The Economic Lubricants:
Critical to promoting
the Small and Medium Enterprises (SMEs) is identifying the Lubricants that would
drive its successes and optimal contribution to the National Economy.
With the government being
the underlining instrument towards National prosperity, the Economic Refereeing
functionality of government is to primarily ensure that equitable policies are made,
thereby promoting the achievement of a level playing ground for business
survival, continuity and growth.
The Economy
Lubricating Functions of the government, as illustrated below, is integral in
driving Economic optimisation
Economy Lubricating Functionality
of Government:
Ever heard anyone blame
the private sector for economic failures and perhaps pitfalls in a country?
I am sure your answer is
NO! All fingers are pointed at the government due to the underlining and
central role it plays as the referee of National activities beyond the economic
climate.
As noted in the illustration
above, there are critical responsibilities and concerns of the government in
driving the smooth operation of the engine of the economy.
These responsibilities
and concerns is a tripartite relationship.
At the primary stage are
Corruption levels, Investment Climate and Education.
At the secondary are
Brain gain, Global perception, SMEs/Employment generation and Foreign Direct
Investment and lastly, at the tertiary is Tourism.
If these are efficiently
managed and well synchronized, economy optimisation, successes and boom would
be achieved.
Economy Lubricating Functionality of the
Government: The Tripartite Concerns and duties of government
Primary
Concern:
a. Corruption levels: Corruption levels in a country goes a long way
in driving Global Perception and also the SMEs. Corruption adversely impacts
the survival of SMEs. A notable example in this vein is the Power sector in
Nigeria. In 2013, the Vanguard
newspaper reported that with $31.45 billion expended on power generation from
1999 – 2013 in Nigeria, only 2,500MW additional megawatt was achieved. On the
other hand, Brazil which now generates 100,000MW had between 1994 – 2008, $58
billion expended on the Power Sector. A food for thought from these comparisons
is that if the said sum was appropriately spent on the Power sector in Nigeria,
Nigeria would have achieved a significant turnaround in its power generation
capacity and then its economic endeavours.
Many small businesses
rely heavily on power generators to carry out their businesses but the big
questions are, how many of these can afford and regularly fuel their generators
to do business as usual?
For many blue chip
companies to leave Nigeria due to the high cost of doing business in the
country, then the impact on the SMEs would be more dismal
If financial
accountability of government is achieved, monies being used appropriately would
promote a smooth operation of all sectors of the economy, especially the
multifaceted SMEs subsector.
b. Investment Climate. According to Investopedia,
Investment Climate are “the economic and financial conditions in a country that
affects whether individuals and businesses are willing to lend money and
acquire a stake in the businesses operating there. Investment climate is
affected by many factors, including: poverty, crime, infrastructure, workforce,
national security, political instability, regime uncertainty, taxes, rule of
law, property rights, government regulations, government transparency and
accountability.” From these, I opine that orderliness in governance is key to
promoting a fair investment level playing ground.
c. Education: Knowledge is power. The United Nations Educational,
Scientific and Cultural Organisation (UNESCO) recommends that every nation in
the world should allocate 26% of its budget to education. Underachieving this
expectation would promote brain drain, thus education tourism of schools abroad
by nationals of the country.
The quality of education in any
country is a reflection of the government meeting the recommendation or not.
Secondary
concern:
a.
Brain gain: Brain gain is achieved when education
is optimally managed, with the best and internationally competitive standards
provided in any given country. Once the aforementioned is achieved rather than
have people leave the country for better education experience abroad,
immigration on the basis of education would be achieved. This would in the long
run drive the Tourism potential of the country.
On the flip side, the inability of a
country to meet the widespread education yearnings of its people would drive
brain drain.
b.
Global Perception: The global perception of a given
country could make or mar its development potentials. The stronger the image of
a country is in the global space, the stronger the impact of the image would be
on foreign industries to do business abroad and vice versa.
c.
SMEs/Employment
generation: In the middle of the concerns is
the SMEs which is critical to driving employment generation. With the
investment climate being equitable and favourable for business and the required
skills, expertise and knowledge gained, employment generation vis-à-vis the
SMEs would be easily attained.
d.
Foreign Direct Investment (FDI): Though briefly discussed earlier,
the FDI is achieved through the promotional activities of government at
encouraging foreign businesses and government to do business. These promotional
activities are evidenced by the readily available and favourable investment
climate within the country.
These said the World
Bank ease of doing
business report which is a global comparative analysis surrounding “starting
a business, dealing with construction permits, getting electricity, registering
property, getting credit, protecting minority investors, paying taxes, trading
across borders, enforcing contracts and resolving insolvency” says it all as
these areas of discuss are pivotal to driving the required growth and
development that would foster economic successes.
Tertiary
Concern:
Tourism:
Having put forward the earlier pointers in ensuring that the engine of any
economy is appropriately lubricated, it is pivotal to note that one easy way to
drive increased immigration numbers, as against emigration – thus brain drain –
is through a productive investment on all concerns earlier discussed. This is
in view of these making or marring the Tourism drive.
The
Tourism concern is one that serves as a reminder to nations to regularly ensure
that it is ready for business.
Tourism
drive has positive effects on security, healthcare system and the availability
of infrastructural facilities.