Minister of Industry, Trade, and Investment, Doris Uzoka-Anite has implored the Institute of Directors (IoD) and other stakeholders in the business community to work to promote a culture of good governance that will help build a diversified and resilient economy that benefits all Nigerians.
Speaking on “Driving Nigeria’s Economic Transformation and Diversification Through Corporate Governance” at the 2023 Annual Directors Conference in Abuja, the minister reminded the institute of its role in promoting good corporate governance practices in the country.
“As directors, we must lead by example and uphold the highest standards of ethical behaviour and accountability. We must ensure that our companies operate with transparency and adhere to the principles of good corporate governance”, she stated.
She emphasised that good corporate governance is essential for driving economic growth and diversification as it provides a stable and transparent business environment that encourages investment and entrepreneurship, promotes innovation and risk-taking, and ensures that the benefits of economic growth are shared equitably.
As the body of directors, she stated that the Institute has the power to drive Nigeria’s economic transformation and diversification through good corporate governance, adding that corporate governance as a fundamental pillar of economic development, sets the rules, regulations, and practices that guide the behaviour of companies and their directors.
“Good corporate governance promotes transparency, accountability, and ethical behaviour that ensures that companies operate in the best interests of all stakeholders, including shareholders, employees, customers, and society at large”, stated the minister, who highlighted the connection between good corporate governance and a country’s growth.
Citing the World Bank’s statistics in one of its reports on the critical role of corporate governance in a nation’s economic growth, the Bretton Woods Institution noted that countries with well-functioning corporate governance frameworks attract more foreign investment, have better access to capital, and experience higher economic growth rates.
The report found that a one-point increase in a country’s corporate governance score is associated with a 0.6% increase in its GDP per capita. Furthermore, companies with good corporate governance have been found to have a higher return on assets (ROA) and a higher return on equity (ROE).
She, however, noted that as blessed as Nigeria is with abundant natural resources, a vibrant culture, and a youthful population, the country has continued to face significant challenges in realising her economic ambitions, and still, remains heavily dependent on the oil and gas sector, which has proven to be volatile and susceptible to global market forces.
“This is where the role of corporate governance comes in. The lack of diversification, limited job opportunities, and income inequality are all symptoms of a poorly governed economy”.
She said when companies and their directors operate without transparency, accountability, and ethical behavior, it leads to a lack of trust and confidence in the business community, which in turn, makes it harder to attract investment, create new jobs, and promote innovation.
Good corporate governance, she said, is essential for building a diversified and resilient economy that benefits all Nigerians, aids economic diversification, and provides a stable and transparent business environment that encourages investment and entrepreneurship.
She stressed that well-governed companies will attract investors and access capital, which enables them to expand their operations and create new products and services
In line with this, the trade and investment minister noted that, over the past few months, Nigeria’s government has shown a strong commitment to improving governance structures and practices, adding that the administration is working on developing a robust monitoring and evaluation (M&E) structure across all ministries to ensure accountability and performance monitoring.
On a final note, she stated that good corporate governance helps to ensure that the benefits of economic growth are shared equitably, which is essential for reducing income inequality and promoting social cohesion.