Corruption in the private sector, work ethics and productivity
Last week’s article began with one of my favorite phrases on corruption: “To identify Nigeria’s problems without mentioning corruption is corruption itself.” Indeed, virtually all Nigerians are viewed by foreigners through the lens of corruption. The precarious state of our economy is believed to be more closely related to high levels of corruption than high levels of insecurity or a major by-product of both coupled with low levels of productivity.
Again, last week’s article was related to corruption in the public sector, but most of the parts were unwittingly devoted to corruption at the lower levels of the public sector, probably because corruption in high places is normally publicized through many media channels. Or, probably because some of these harmful activities at these lower levels are taken for granted as immaterial. Why, for example, should the theft or vandalism of public buses by drivers be considered corruption? Or, why should the printing and issuing of fake receipts be a corruption issue when the Federation Accountant General could under-report national income by more than 100 billion naira for diversion to his personal account ? God only knows how many public officials are still in the act and have not yet been apprehended.
But these unimportant activities have telling effects on productivity and economic growth. Labor productivity in Nigeria is very low and our expectations of national survival are largely based on rents and corruption. This is why when highway patrol officers are “set up” by people carrying contraband goods, they would normally have easy passage, but when called in for protection duties, many excuses are given. This is why the Nigerian National Petroleum Corporation cannot produce crude oil to meet Organization of the Petroleum Exporting Countries allocations – since some of the foreign oil companies that normally fill the gaps have left – but are concentrating on the import of fuel. And that is why the federal government prefers to import goods and borrow to finance consumption rather than working on the economy to produce goods and services for domestic consumption. In all of these activities, the underlying variable is corruption.
There is no doubt that the productivity of the private sector is much higher than that of the public sector and to this extent the productive activities of the private sector are the engine of the economy. However, the output is still very low compared to the expected output or output produced in labor intensive economies like Nigeria. The private sector can be conveniently discussed on two fronts. We have the formal and informal sectors.
The formal sector spans the full spectrum of production, from agriculture, mining, manufacturing, construction, technology and extraction to services, which typically cover entertainment, sports, sub- financial sector, maritime transport, insurance and trade. Of course, the informal sector also has these trades and more. What matters in both cases is not the extent or variety of production, but the behavior of the workers. It seems that from the beginning, many private sector workers go to work with the idea of “what am I getting” and not “what am I going to bring today”. Workers do not see themselves as helped by employers out of unemployment, idleness and poverty. Rather, they think their employers must have stolen the money invested in the business and the opportunity has come to take their piece of the pie.
The same nonchalant attitude seen in public sector workers is often found in the private sector, but what can be tolerated in the public sector offers punishment in the private sector. The fight against corruption and insolence in the formal private sector is relatively simple. In many cases, we see high instances of worker turnover. Surveys show that underlying factors include persistent lateness to work, laziness, insolence and corruption. This is common in all facets of formal private sector business, particularly in the service sub-sector.
Things are quite different and more interesting in the semi-formal or informal private sector. In some cases, the worker is king, especially if the business owner doesn’t know how to operate the equipment or if the business requires special skills. The main infractions or unethical practices in the informal sector are theft and absenteeism. This is the sector where the ignorance of workers on work ethics and productivity is very glaring. This is where workers feel the employer has stolen money and deserves to share it with them. They seem to have some notion of rights. Workers deserve to have a slice of the national pie through their employers. This notion is rooted in illiteracy, ignorance and myopia.
A review of corrupt and infamous activities affecting productivity in the informal sector is desirable. Many vehicles purchased for business have been grounded and owners made penniless by hired drivers. If drivers do not take unapproved routes without the knowledge of the owner, they would report that the police did not allow them to work. Head or tail, the businessman will be lucky to have a small fraction of the projected income. Meanwhile, the car would depreciate rapidly, the owner would have premature gray hair while the driver would marry a second wife. Poultry farmers would tell you how many staff have been caught with eggs stolen from the food bottle brought in by workers in the morning or under their workers’ skirts or caps.
A few years ago, I went to photocopy at a business center. I noticed that the saleswoman always opened the glass cover of the photocopier every time the photocopy came out. I complained that the girl didn’t open the cover when it was my turn because I wanted the best photocopy. She complied but another saleswoman confidently told me that opening the lid this way would prevent the copier from reading the output as a produced copy. This means that the money goes into the pocket of the girl rather than the owner who would base the sales on the figure displayed by the copier.
If you build your house and hire a mason, buy cement and bricks with water. You will be lucky if half of the materials are not stolen in your absence by the builder or his staff. A friend hired the services of a builder. He bought all the necessary equipment and traveled while I had to supervise surveillance. On the third day of my mission, one of the owners in the area informed me of the transfer of some bags of cement. I went to the site to number the remaining bags with the instruction that the cement was to be used by number and the bag reserved for my inspection. I also improved my supervision mission. The builder was forced to be judicious in the execution of the work.
A pharmacist, working in a public hospital, opened a pharmacy shop in the neighborhood where he lived so that he could retire there after each day of work. He engaged the services of a saleswoman from another part of town. He was like a monopolist in the area and business was booming. After a while, he found that sales were dwindling, which was a surprise since there were no other pharmacies around and the neighborhood student population was growing. We decided to investigate what was responsible. We discovered that the saleswoman had opened a pharmacy in her neighborhood which she managed in the evenings. She was still transferring her drugs to fill the gap in sales from the main business. She made money on both sides by destroying the pharmacy that gave her work. After two consecutive pre-arranged arrests with heavy payment for engaging in the illegal sale of drugs without a certificate, her business plummeted and the pharmacist fired her. The stories are legion.
Many of these nefarious activities have shut down many local and international businesses and are still going on in this country. They have prevented business expansion, sustainability, job creation and the continued decline in productivity. As we quickly condemn governments and their agencies, as citizens we must look within and promote a positive ethical reorientation or revolution towards a decisive disengagement from household corruption, improved productivity in the workplace labor and national development.