The question of whether governments have a role in business has long been a subject of debate. Different perspectives exist, each presenting its merits and challenges. At the core of the issue lies the fundamental purpose of government: to ensure the security and welfare of its people. This extends to the protection of civil rights, human rights, and the properties of citizens. While the involvement of government in business is seen differently across societies, this article delves into the complexities of this issue, with a particular focus on the Nigerian experience.

Government Involvement in Business: The Legal and Moral Debate

The debate over government involvement in business often hinges on legal and moral perspectives. Legalists argue that government’s role is to regulate and create a level playing field for businesses. They see business primarily through the lens of numbers, profits, and private wealth accumulation, emphasizing regulation and compliance. In contrast, moralists may argue for government intervention on social grounds, advocating for fairness, equality, and the common good.

In Nigeria, where the state has invested public resources in business ventures, many of these investments have fallen into ruin over time. This has fueled arguments that the government should not be involved in business. However, in other countries, state-owned enterprises and investments continue to thrive, raising questions about whether the issue lies with governance structures rather than the principle of government involvement itself.

Public Assets: Ownership, Responsibility, and Failure

A critical factor in the Nigerian experience is the perception of public assets as “nobody’s property,” which leads to a lack of accountability and sustainability. The failure of government investments in Nigeria is often attributed to corruption, mismanagement, and a lack of strong institutional frameworks. In such an environment, the argument that “government has no business in business” gains traction. However, in countries with robust institutional capacities, public assets are better protected, and public-private partnerships often thrive.

In Nigeria, privatization has been offered as a solution to the failure of state-owned enterprises. However, the privatization process itself is fraught with challenges, including concerns about these assets benefiting only a select few. The failure to create enduring institutions that protect public assets has made it easier for private interests to acquire state assets at low costs, further deepening inequality.

The Role of Leadership in Shaping Government Involvement in Business

The success or failure of government involvement in business depends largely on leadership. The right leadership, with a long-term vision and a commitment to public welfare, can implement policies that support both public and private investment. In Nigeria, the problem often lies with leadership that prioritizes short-term gains—mainly for personal or political benefit—over sustainable development. Politicians who focus on winning elections rather than planning for future generations contribute to the country’s economic stagnation.

Leadership that focuses on state-building rather than personal enrichment is essential for fostering an environment where government involvement in business can succeed. This is the type of leadership that creates laws and institutions that protect public assets, encourages transparency, and builds trust between the government and the private sector.

Case Study: Nigeria’s Petroleum Subsidy

One example of government involvement in business in Nigeria is the subsidy on petroleum products. For years, the government subsidized petroleum prices to make them affordable for Nigerians. However, the subsidy regime was riddled with corruption, leading to inefficiencies and unsustainable financial outlays. In May 2023, the federal government abruptly removed the subsidy, citing the need to stop the rampant corruption associated with it. Yet, there are indications that a form of subsidy has returned “through the backdoor” due to fluctuations in global oil prices, raising questions about whether removing the subsidy addressed the root problem.

This situation underscores the complexity of government involvement in business in Nigeria. Rather than addressing the corruption in the system, the government opted for a blanket removal of the subsidy. But without addressing the underlying issues—such as creating local refining capacity—the policy may not bring about the intended results.

Governments and Business: A Global Perspective

Even in capitalist countries like the United States, government intervention in certain sectors is seen as essential. For instance, the U.S. government subsidizes agriculture and energy to stabilize these critical industries. This suggests that government involvement in business is not inherently problematic; what matters is how such involvement is managed and whether it serves the public good.

The failure of government involvement in business in countries like Nigeria may be attributed more to governance challenges, such as corruption and weak institutions, than to the idea that governments should not participate in business. In countries where governments have built strong institutions, public investments in business have been successful in driving economic growth and providing public goods.

Conclusion: Fixing the Politics to Fix the Economy

Ultimately, whether or not governments should be involved in business is a question that cannot be answered in absolute terms. The success of government involvement depends on the context, the quality of governance, and the structures in place to ensure accountability. In Nigeria’s case, the failures of government investments in business are largely the result of corruption, poor leadership, and weak institutions.

To achieve economic growth and improve living conditions, Nigeria must fix its political system. Good governance, transparency, and a focus on long-term development are essential for ensuring that public investments benefit the people rather than a select few. The government has a role to play in business, but only if it does so responsibly and with the public’s welfare in mind.