Saturday, June 27, 2009

The good times are over

The Nigerian telecoms sector has finally hit market forces and the mathematic of where supply and demand cross at a competitive pricing point. ARPU (average revenue per user) has brought Zain to its knees (sinking to US7 per month), hence the crisis a few weeks ago and the decision to outsource the meat of its operations to Ericsson earlier this year.

What a contrast with the sector 6 years ago in Nigeria. The MTN story is case in point.

I remember buying my first MTN sim card back then. I think it was N18,000. The good times were rolling - its not as if the price of producing a sim card has reduced significantly since. MTN was staking out London recruitment fairs, bringing plane loads of diasporics home - anyone with the word telecoms on their cv (no matter how fabricated or puffed up) got a ticket and an apartment in VI, their salaries paid for by the first million or so customers paying off the scale prices just to get connected. The A-bar on Adeola Hopewell was the place for the big MTN boys in their polo shirts to hang out.

Aspects of the senior management of the company became bloated with charlatans who were working many levels above their pay grade (no names mentioned). Since that time, MTN in Nigeria has matured, shaken out the diasporic chancers and now has a good senior management cadre which is a mix of Nigerians and international staff. It is easily the best placed operator in Nigeria and is sure to profit well when the big pipes land in Lagos mid-to-late next year and the country finally has genuine Internet Service provision, rather than the fake-broadband floggers of now.

The consolidation taking place currently in the telecoms sector is also going to hit the financial services sector in the next 12 - 18 months. The new Central Bank governor Sanusi Lamido's strong risk analytical approach is sure to shake out the sharp practices the banking sector has relied on for so long and that are an open secret: buying each other's public offering shares (creating a phantom layer of valuations), round tripping currency trading and use of multiple books (to name just a few of the most popular tricks). Combined with the opening up to foreign ownership, another round of consolidation is somewhere between probable and imminent. I doubt many banks will be unaffected by the inroads Barclays, HSBC and the big American and Chinese banks will surely make.

So, the two juicy sectors of the economy that were the main draw for diasporic Nigerians outside of hyrdocarbons are closing up. I suspect we are now moving away from the returnee era, at least in terms of the corporate sector.

At which point, it might be an idea to begin to compare what the recent influx of diasporic Nigerians has done for the country's corporations. Compare and contrast with India.

Ten years ago, Indians with Californian technology experience started to return home during the dot com consolidation that began in late 1999/early 2000.

On the back of this migration, India's IT services sector began to boom from Bangalore to Pune, with the incumbent early-starters such as Infosys the tip of a large iceberg.

What have diasporic Nigerians brought to Nigeria? Which sectors have developed thanks to them? There has been no equivalent boom in IT services, and banking remains antediluvian. The perfect symbol of the level of sophistication of consumer banking in Nigeria is the Interswitch card - all your data stored on one easily replicable magnetic strip. It is strikingly similiar to my first 'cashpoint card' for Lloyds bank, back in 1986. Surprise surprise that Nigeria is currently awash with ATM fraud.

How are we to judge the impact of diasporic Nigerians that have returned back to Nigeria to work in its corporations? Have they 'added any value'? Certainly, in many organisations, they have generated mostly negative value: inadvertently importing a two-tier class system.

Those parading their recently acquired janded or yankee accents are earning multiples more than their stayed-home-didn't-get-the-break colleagues. They are almost completely blind to the hostility and resentment this has generated. Worse, they are in most cases not as effective as their 'local' equivalent.

The snob factor that they maintain meticulously stands in the way of them engaging with the world beyond Ikoyi and Victoria Island. In a complex and evolving society like Nigeria, they therefore forget to do the first thing that must be done in any new enterprise: map the territory. Many of the returnees simply didn't have the wisdom of local experience to do the job that needed doing.

The integration period - when an influx of diasporic Nigerians filled out the hot new sectors of the economy - is now over. Many of the most talented and experienced Nigerians overseas never bothered to come home. Those who made the Big Return in the past year or so are half-full of regrets. Accommodation is a joke in Lagos and Abuja (the only two cities they can return to) - all of it over-priced, jerry-built (sometimes dangerously so) and poorly managed. Quite a few will return with the realisation that home was in fact Maryland or Milton Keynes. Nigeria will return to being 'holiday for the kids'.

Anyone with smarts setting up nowadays in Nigeria in financial services, telecoms, the media etc. would do well to focus on how to develop local talent, rather than decide to bring in over-priced and over-entitled diasporic resource that is often afraid to wade in deep into the ways of the Nigerian market, for fear of getting too much mainland muck on the tyres of their Prado/Lexus. The future of business in Lagos (a city which generates 70-80% of Nigeria's tax base) will be increasingly defined by the thousands trying to get ahead from Isolo or Surulere, rather than those flying back home to stay with Mommy and Daddy in Ikoyi or VI. The more market forces come to play in Nigeria, the more on-the-ground talent and experience will come to the fore.


Chikwe Ihekweazu 2:48 pm  

We are in desperate times in our country. This is not a time to classify ourselves into "Diaporan" or "home grown" is a distraction..trully.

Finally, every business should decide on who to employ to add the most value. That is the bottomline. If there are not making those is not the problem of Nigerians coming back...but a problem for the business.

Let us not be distracted from the real challenges facing us in Nigeria. As in India, every Ngerian needs to engage with the country.

Peju,  4:25 pm  

Every Nigerian doesn't have to engage with the country. People should engage with the country if they want or the country they are domcile in. Whilst it is true that diasporic talents can contribute meaningful to businesses here, I found the disparity in our package totally uncomfortable. As one of the returnees Jeremy writes about, I was really shocked when I heard what one of my colleagues was getting paid. I have a lot to learn from him more than he from me, but yet I get paid triple his salary. It is rather unnerving. When he asked me for my salary, I couldn't tell him. I felt embarrassed. I don't think I should stop getting what I am getting, but I think there should be parity in payment according to experience not whether you have degrees from a Western university or 2yrs in a firm abroad. I hate to admit this, I work in a company where the locals have more experience than many of us returnees and we are having to ask them questions. They are showing us pepper. And the new HR wants to put a stop to this differentials.

I don't know how this has come about. I just negoitated what I wanted and I got it. It never occurred to me that my fellow Nigerians are getting paid less. The irony of it all is that I have more in common with the home grown than my fellow returnees some of whom I find a bit uppity.

Good write-up Jeremy.

Oluniyi David Ajao 5:07 pm  

Nigeria needs its returnees for their knowledge and experience. The returnees on the other hand need to open their minds to learn about Nigeria.

Many things are over-priced in Nigeria - not only real estates. Since corruption is now a way of life there, many have come to accept the extortions, unfortunately.

GBABS 6:34 pm  

this is an unhealthy and troubling! i would say that people should be paid according to their skills, wether it be in the form of experinece or qulity of education gotten. even in the united states a person who graduates from an ivy leage college gets paid twice as much as person who graduated from an unknown school an entry level job. most(not all) schools in the west are better equiped than nigerian schools. that why its not only nigerians who go to england or US for education, indian do it china does it. these people bring added value' in most cases! but the other peoblem is that some of the nigerians who go back are not there for nation building, they are there to take advantage of the unorganized and regulated(in most cases over regulated). nigerians need to see what they can do for there country not what there country will do for them!

Twreckx 7:52 pm  

Those are pretty broad brush strokes you paint us returnees Jeremy. There are many of us (you really should pop into Eti-Osa 1 on any friday) who returned, Served our country, worked for a pittance while our employers milked us for all they could get, and and living in less than desirable places because, funnily enough, it's not just the rich that go overseas.
Yes, we find living here a bit tough and complain about it, but lest ye forget, so do you. Some of us get paid the same as our Nigerian counterparts, receive no special treatment, and are generally treated suspiciously because all the prejudices you just listed are thought to be true.

Akin 8:49 pm  

Hello Jeremy,

I do not think the problem is entirely that of Diasporic Nigerians per se.

The problem is more the Nigerian psyche that is overly impressed with people who have just managed to leave its shores without a thorough reference and assessment check of mentioned skills to experience to performance.

If companies are so easily hoodwinked, come on, they would be flooded with chancers.

We who have had careers in Europe running almost 2 decades have survived by reason of our pofessionalism, expertise, quality and acumen - I do not think many of us would have been persuaded of trendy opportunities in Nigeria when our comfort zones on Europe deliver better in security, opportunity, challenge and the absence of fawning obsequiousness.

Like you said, they raided job fairs, pray, who are the real experienced professionals that do job fairs?

You are addressing the symptoms not the underlying cause which is susceptibility to bluster rather than a considered and practical exercise of seeking experts - you will only get those through head-hunters not job fairs.



AdaCee,  9:12 pm  

I think there's truth in what both Chikwe and Pelu are saying and I think this article is unnecesarily divisive. We need to be emplying the best people for jobs and compensating them accordingly. Disparities should not be accent based and if that is the case then that is the fault of the resident Nigerians who started that process.

What we need to do is work together and bring knowedge together not be unhelpful because you resent someone's accent or you think someone's beneath you. This is what is killing our people. We always magnify our differences and use ut against each other instead of using it constructively and that'a a big shame.

Much of the experiences diasporics bring cannot eeven be implemented in NGR becausde the structures simply arent there. Again, we know we've had a decade of returness but in terms of specific numbers, no one knows how many diasporics have come back so how can it be compared to India?

Like Chikwe says these classification are such a stupid distraction and I am ashamed of the writer for this.

dapxin 9:50 pm  

I shake my big skull at author's fearless style; stand-up-and-be counted...good flowing prose but I'd be suprised if it doesnt get the usual 'knocks'.

Your honesty there refreshes.

I particularly liked author's classifications. haha

make I laff small b4 I return to d koko of the matter. :D

Jeremy 10:42 pm  

AdaCee - you seem to be agreeing with me but wishing I didn't write what I wrote.

The two-tier system we all have come to recognise can sap the morale in Nigerian companies and lead to underperfoming staff and ultimately, a company that no longer breaks even. Several case studies of Nigerian companies that have gone down this route and have ended up failing could be produced. I hope by bringing the issue out into the open in my own small way there can be measures made in the direction of a solution...

I accept that the generalisation of the argument is its weakness, and that there are many exceptions on either side (exceptional diasporic contributions at the corporate level, and bad local hires equally)...

dapxin 11:06 pm  

the classification is safe enough for the sake of the debate.

thanks for the clarification

Chikwe Ihekweazu 10:44 am  

to emphasise my point...

What we should encourage is that the big corporates should widely advertise the posts available with a related pay package...for which ANY Nigerian can apply...irrespective of 'diapora status'.

It is in the Corporates best interest to get the best I do agree with Jeremy in the sence that the 'free booze' period has come to an end an a competetive business environment might lead to rethinking recruitment policies.

What we should not do is blame the Nigerians that have chosen to seek opportunities to return home. Many choose not to. Our problems are so deep that we need all hands on deck.

J,  4:04 pm  

I don’t see how this condition in Nigeria is different from any other places in the word. It may seem just a little cruder in some cases. First of all, there is that disparity. At this point I might just quickly add that Human Resource departments in Nigeria are pretty clueless about what their role is in companies, most of them.

Of course should be hired for what they can do, and paid according to the perceived value of what they give. At this point all sorts of things come into play.

In the US, the UK graduates from top universities earn considerably more than people from others. Society seems to insist on class.
I know a recruiter for an oil company in Nigeria, who said to me that ‘even those with 3rd class from jand just perform better at work’ maybe she’s deluded I don’t know. I once heard her say something about companies looking for ‘high profile staff’, trying to compete in a global sphere. Plus in some cases it just looks good on the company to have returnees. It holds some value for them.

I think these things should be questioned. Your argument helps in moving it forward.

As you rightly said, the market is getting saturated, the value placed on returnees may fall... all sorts of capitalist factors are at play. And am not even saying am shy of capitalism.

CodLiverOil 4:50 pm  

Merci beaucoup de pour votre message.

C'est simple comprendrer.

Je me suis souviens, j'ai dit les nigerians de diaspora qui sont retourne auront beacoup des options de quitter leurs pays a l'etranger. Ne les inquietes pas.

Comme tu as dis, nigeria a perdu une occassion les utiliser bien. Compare avec l'experience d'inde. Quel dommage du nigeria

Peut-etre il y aura une autre occasion en avenir.

Anonymous,  8:52 am  

So Nigeria has a class system? Well, it faded in the early 80s, but is now getting more entrenched and manifests itself as returnees, Ikoyi/VI dwellers, etc. Jeremy, dig deeper, and you'll find class is an issue. If you lived in Ajegunle, went to an ordinary secondary school and managed to escape to the UK/US, do not expect to get a top job when you return. As my VI pal said, which primary school did he go to? Where did he/she live in Lagos before travelling abroad. Its the Naija class system. B

Anonymous,  11:59 pm  

Jeremy, at the risk of joining you in the 'generalisation' corner, and forgiving your obvious soft spot for MTN, let me quickly say that you are spot on.

Home grown Nigerians with the right skills and talent who work within NIgeria's corporate environment like I do know this to be true. And know the constant battles we have to fight.

9ja,  11:50 pm  

I think Akin said it right - If you leave yourself open to chancers, they will milk it for all it worth - the companies are to blame - they need to pay everyone doing the same job the same money - simple as.

Placing a premium on returnees (who are really just privileged - they didn't go overseas because they are smarter or better than anyone else) is just ridiculous. As a "diasporan" (and I use the term loosely) I think any returnee who takes advantage of the stupidity of these companies and uses that as an opportunity to look down on others is just pathetic. I didn't respect such people before I left the country and I don't respect them now.

However, I don't feel that a full-on war between returnees and home-grown folks is the answer to the problem. The companies themselves need to take a good look at their recruitment process and HR and strike a balance between motivating local talent and hiring Chief Dr Big Man's little prince/princess fresh from Neverland, Lala-land or wherever and decide who is actually best for the job and who has the potential to be really good at the job with a little bit of training e.t.c.

Its common sense really. And it would make life easier for people like Twreckx I guess :)

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