Question: Going by the well known predicaments of the private sector in Nigeria, in line with your propagation thus far [about Bottom of the pyramid (BoP), markets for poor or inclusive market], is it not time for this sector to adopt what’s happening elsewhere – Evolving business models that suit this concept, as respite? Please assist with education on what an interested entrepreneur should expect – M. Ibrahim
In conclusion of what should be in place to facilitate the smooth entry of the private sector into BoP market (before highlighting what government should do) listed earlier in Part 3, intending enterprises should also consider this (To strengthen reaching the poor as consumers, producers, employee and entrepreneurs):
- Emphasis on the use of agricultural wastes—Waste products (e.g. maize stem, sorghum stem, maize husks, rice husks, palm fruit stalk, banana and plantain peels, sawdust, leaves, tree trunks) which are discarded in most rural environments have been proven to constitute essential raw materials for making certain products which can form the bed-rock of BoP enterprises here. I am aware that potassium hydroxide solution (used in the manufacture of soaps, etc) is derived from such. What about the eco-friendly fuel from such wastes (in use as fuel for cookers) ‘making waves’ in Uganda presently?
On the part of the Nigerian government, it should carry out the following to assist in building capacity and conditions for BoP markets to thrive in the country:
- Support and finance BoP business models, through award of tax incentives—As a means of encouraging the private sector here to adopt what’s happening elsewhere (significant shift towards BoP or inclusive market). Going by what BoP depicts (ways of doing business that build bridges between business and the poor for the benefit of both), the private sector’s effectiveness in fostering development greatly depends on the impact of the government (in consonance with the quality of political, social and economic institutions). Tax incentives for BoP enterprises no doubt will constitute a significant boost to evolution of various business models for this concept, as this will surely make for a market economy providing private agents the incentives to expand their productive capacity and apply same adequately.
- Creating opportunities of engaging BoP related businesses as partners in economic development—This can yield fruits through development plans that will involve businesses, associations and other stake holders to address relevant issues (e.g. food, finance, water and sanitation, housing, energy, etc).
- Collaboration with the private sector through strengthening government’s institutional capacity—This can take the form of secondment programmes, involving engagement of staffers from the private sector, coupled with collaborative initiatives, to facilitate partnerships across sectors.
- Government’s removal of constraints in the market environment to suit BoP—Well known constraints to BoP enterprises should be eliminated (as a way facilitating competitive ventures which often have roots among rural communities), such as upgrading transportation, rural road network, and other forms of infrastructural amenities. The same holds for improvement in education among rural inhabitants, access to the legal system for the poor, then reduction of the typical annoying bureaucracy in government, while ensuring a functional and inclusive financial market.
- Set up information platforms—These should be in place to foster dissemination of market information, and to also facilitate linkages between businesses at local, states and federal levels; with not-for-profit organisations and other initiatives. Such platforms will no doubt strengthen entrepreneurship capacity through training, organizing, capacity building and technical advising. As a result, human capital is likely to be strengthened for engagement in productive economic activity from effective education and health care.
- Improve consumer awareness and education through social marketing programmes—To strengthen demand for pro-poor products, services or technologies, the government has to take steps to use the power of marketing to move Nigerians towards the gains of poverty alleviation through support of BoP business models. Through government sponsored programmes of social marketing, general adoption of BoP by the private sector will likely be attained, with the ultimate being to influence social change in Nigeria to favour this new mode of lifting poor Nigerians out of poverty. Who says the private sector in Nigeria can not be made to come out of the present ‘complaints mode’ and adopt BoP? What remains essential is the arousal of interests of essential players to take up the gauntlet towards ventures aimed at lifting many out of poverty, and making profits too. With this concept the Nigerian private sector can reap from this burgeoning area.
-Indigenous technology elevation—BoP markets can be amplified through government support to efforts which enhance opportunities for private sector ventures in this area. Imagine what would happen to rural communities having major boosts to technologies for “Adire” (indigenous textile) production? What about the “Akwete” cloth weaving? We must all applaud the recent move by the Osun state government to provide school uniforms, made from “Adire”, for its 750,000 school pupils. The positive effects of this to the BoP market are quite glaring.
-Strengthening NAPEP—It is of essence that the government strengthens the National Poverty Eradication Programme (NAPEP). Even where it is presently established as a department in the Presidency, from what some of us close-watchers perceive, this arm of the government ‘lacks the bite’. As I stated in an earlier piece, a privately-owned radio station in the country kept harping on its network programme (on Thursdays) that NAPEP had only 1.3 billion naira provided for it, in the budget for this year. No wonder, NAPEP’s web site has been down for several months.
I look forward to a day the private sector here will even go beyond BoP to constitute part of a new concept now rearing its head, Reverse innovation. As being introduced by Professor Vijay Govindarajan, it depicts “an innovation which is adopted first in the developing world (Nigeria inclusive), then ‘flows uphill’ to rich countries”. There are some examples of this already, which I may dwell on in future.