Global economic growth has decelerated in the past year due to inflationary pressures and fears of recession. Commodity price hikes, supply chain disruptions and foreign exchange pressures have been among the most significant challenges for African businesses so far in 2023.
In Nigeria, political changes coupled with a lingering cash scarcity, have significantly impacted the livelihoods of middle- and lower-class citizens. Within this context, the relationship between business and society has evolved. Customers are demanding more at less cost. They are also quick to publicly call out unfair business practices on social media. PREMIUM TIMES had a chat with Subomi Plumptre to discuss these issues and more.
PT: Please, could you give us a brief overview of Nigeria’s current socio-economic challenges?
Subomi: Nigeria has recently concluded elections that exposed deep divisive lines in our country. Per Edelman’s 2023 Trust Barometer, 67% of Nigerians think that the country is more divided today than in the past. This is detrimental for the nation’s economic productivity, as each region is dependent on the other, and none is self-sufficient.
The ongoing economic hardships caused by high inflation, rising cost of basic goods and cash supply limits are also adding to this social dissatisfaction. There is a gloomy prognosis that over 24 million Nigerians will fall into poverty in Q3 of this year. These are not just statistics; they depict people’s suffering.
As key stakeholders in the economy, businesses cannot stay aloof. They must look beyond just making profit to developing the communities in which they operate. They must also take a more compassionate approach to doing business. As we witnessed during the recent cash crunch stemming from the Central Bank of Nigeria’s withdrawal of old notes, banks that were compassionate in their communication to clients won many hearts and bolstered customer loyalty.
PT: Who bears the hardest brunt of these global and local economic challenges?
Subomi: The middle and lower-class citizens are hardest hit. The lower class is dropping below the poverty line and the middle class is moving closer to it. Self-employed and small business owners are bearing losses; while limited cash supplies have directly affected liquidity and the ability to transact in a cash-driven economy.
Middle-class Nigerians are seeing serious devaluation in their Naira-denominated assets and shrinking job opportunities. This is impacting their ability to support those who depend on them for their livelihoods. All of these factors are fuelling the current “japa” trend, where highly skilled professionals seek greener pastures abroad via emigration.
PT: How are the economic challenges affecting relations between businesses and middle-class professionals?
Subomi: According to Edelman’s 2023 Trust Barometer, Nigerians’ trust in business declined by 2 per cent while trust in not-for-profit organisations rose by the same percentage. Many professionals want to work on their own terms and are demanding more flexible work arrangements, including reduced commuting.
Workers expect to be trained beyond their core specialisations, particularly in new fields like data science and artificial intelligence. They want to be upskilled for future remote working opportunities abroad. Finally, they expect businesses to care about work-life balance and to be actively involved in developing their communities through social responsibility initiatives.
PT: What is the core idea of social entrepreneurship and how can it thrive in Nigerian business?
Subomi: Social entrepreneurship is essentially when a for-profit business delivers value to society beyond commercial activities. It is much more than charity, one-off giveaways, or donations.
In fact, those forms of social responsibility are already becoming obsolete. Many businesses and entrepreneurs are starting to realise that it is more valuable to teach people to fish than to give them fish, figuratively speaking. And so, companies are starting to commit dedicated amounts of profit towards policy advocacy, youth empowerment, and structured mentoring that uplifts societies and generations.
For social entrepreneurship to become mainstream in Nigeria, first, it is up to business owners to embrace its core idea and to be visionary about doing good. Social enterprise is not an occasional marketing campaign or a single action to be hyped on social media. It should be part of a business’ development strategy. For instance, businesses can set aside a budget so employees work on “moon-shot” projects that can change the world.
On the part of the government, special policies that encourage new products and patents, including tax breaks, would be a great driver. Finally, Nigerian business owners have the most to lose in an unstable polity. Therefore, they must be proactive about promoting growth and prosperity.
PT: Do you and your companies practise social entrepreneurship?
Subomi: Our companies are committed to positive causes. Volition Cap, an asset management firm that I co-founded, created a fund management model which leverages cooperatives. We pool funds from the middle class to create high-value investments this socio-economic group would ordinarily not have access to. In doing so, we are financially empowering this demographic. I believe the middle class is the main driver of development for any nation. They create the most jobs and fuel economic growth through consumption. When the middle class prospers, the lower class indirectly benefits, and more people are lifted out of poverty. We focused on this group intentionally. Another company that I co-founded, Volition Blue, is a consulting company that helps underrepresented African startup founders to scale globally.
In my personal capacity, I have a clear history of volunteering, having sponsored the education of out-of-school street kids. The profit that I make from my businesses allows me to be a social entrepreneur. I have trained about 10,000 individuals on financial literacy through my online investment courses: 5,000 of them for free. My plan is to increase this investment course scholarship to 50,000 Africans over the next five years.
PT: In your opinion, do you think there is a future for social entrepreneurship in Nigeria?
Subomi: I think social entrepreneurship is the path that Nigerian businesses need to take in an unequal society. The demand for it will keep increasing. We are a relatively young democracy and will face many more challenges. During times of turmoil, people expect businesses to be empathic and so I believe Nigeria needs more entrepreneurs who consider themselves social servants.
Subomi Plumptre is the co-founder of Volition Capital Investments Limited, an asset management company that helps middle-class Africans and Diasporans to create wealth. She is also the co-founder of Volition Blue LLC, a US consulting company that bridges African & global investments.
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