The Case Against Nigeria’s Big Philanthropy Industrial Complex (NBPIC) By Ahmed Olayinka Sule, CFA
In response to the Coronavirus pandemic, some of Nigeria’s top billionaires made significant contributions in the fight against COVID-19. Aliko Dangote donated N2bn while Mike Adenuga donated N3bn. Femi Otedola, Folorunsho Alakija, Tony Elumelu, Jim Ovia and Oba Otudeko donated N1bn each. The CEOs of Access Bank and Guaranty Trust Bank gave N1bn each.
This is not the first time that the ultra-wealthy have come out to rescue needy Nigerians. In 2017, Dangote Foundation pledged the sum of $100m over five years to tackle malnutrition in Nigeria while in November 2019, Femi Otedola made history when he contributed the largest donation by an individual Nigerian with his N5bn donation to Save the Children. Nigeria’s richest woman Folorunsho Alakija donated a skills acquisition centre to Yaba College of Technology in October 2018. Nigeria’s billionaire class has now joined its foreign counterparts in making a difference to millions of people.
For the first time in Nigeria’s almost 60 years of existence, the country now has a group of billionaires engaged in philanthropic activities. The amounts donated are astronomical in a country that has so many people living below the breadline — the ecstatic reactions from politicians, the media and the general public to the philanthropic deeds should come as no surprise. When Otedola made his donation to Save the Children, Aliko Dangote remarked, “Femi, you are no more a rich man. You have joined the league of wealthy men” while Vice President Yemi Osinbajo said, “We do not need to be billionaires to start doing something. It is time for every one of us to decide that we really can make a difference.” In a tweet message, President Buhari saluted the public-spiritedness of wealthy Nigerians and gave a special mention to seven billionaires who contributed to the COVID-19 relief fund.
Nigeria’s Big Philanthropy Industrial Complex (NBPIC) has a place in Nigeria. It can help soothe some of the issues the country faces, and it can complement government’s efforts to alleviate poverty. Some commentators suggest it satisfies human needs, improves problem-solving skills and helps build robust networks. Notwithstanding its supposed benefits, Big Philanthropy covers a multitude of sins and is insufficient to resolve Nigeria’s structural challenges.
Pope Francis once wrote, “Inequality is the root of social evil.” A key challenge confronting Nigeria is the scale of inequality, which has resulted in the lack of opportunities to most Nigerians. Nigeria is one of the most unequal societies in the world. The emergence of NBPIC is a manifestation of the country’s inequality problem. As wealth has become more concentrated, so has the level of giving. Nigeria is experiencing its version of the Gilded Age with the chasm between the 1%, and 99% reaching unsustainable levels.
Wealth and poverty is the central paradox of modern-day Nigeria. On the one hand, Nigeria is home to the richest black person and the second richest black woman on earth while four of the twenty richest Africans are Nigerians. On the other hand, Nigeria is the poverty capital of the world, with around 50% of the total population living in extreme poverty. According to research by Oxfam International, the combined wealth of the five richest Nigerians could end extreme poverty at a national level while Aliko Dangote’s annual income is enough to take two million poor Nigerians out of poverty every year.
Though NBPIC might be united in its desire to give back to society, yet it has little or nothing to say about its members giving up their privileges and restructuring the economic and political system, which currently works for the fortunate few, and not the unfortunate many. At face value, Big Philanthropy appears to benefit the masses; however, a closer examination would reveal that the donation has some anaesthetising qualities, which ease the short-term pain, but does not address the root cause of the problem.
A key feature of NBPIC is its alignment to “Any government in power.” Nigeria is a resource-based economy, and some key constituents of NBPIC have derived their wealth through government patronage, which enables them to build monopolies. There is an incestuous arrangement between the politician class and philantroligarchs whereby the former creates a rent-seeking atmosphere for the latter to amass wealth and the latter refrains from criticising the former. This conspiracy of silence, as evidenced by NBPICs inability to speak truth to power allows the status quo to remain intact. Martin Luther King Jnr once said, “Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary. Nadine Gordimer, the South African writer, argued that those who possess and control great wealth should, “Look at the economic structures in their countries which have made that wealth possible and yet have created conditions that make philanthropy necessary.”
Nigeria’s philanthrocapitalists and philantroligarchs take the path of least resistance by focusing on the symptom instead of the cause of the disease. The 1% philanthropists have the ears of the government and ought to use the opportunity to present the case of the 99% left bloodied on the Jericho road. The amounts donated appear significant on an absolute basis, but on a relative basis, it constitutes a small percentage of the donors overall wealth. For instance, the N2bn contributed by Dangote to the COVID-19 relief fund was less than 1% of his $650m dividends from Dangote Cement. The Nigerian masses benefiting from the prominent philanthropists are like the biblical Lazarus who ate the food that fell from Dives table.
There needs to be a redistribution of wealth for Nigeria to work for the many. However, the government is in denial of the scale of inequality in the country while the philanthrocapitalists and philantroligarchs are unwilling to give up their privileges. When Oxfam published its research report on inequality in Nigeria, instead of expressing concern about the level of poverty and inequality, the then Minister of State, Budget and National Planning, Hajia Zainab Ahmed was “worried by the language, tone and style of the report.” She also expressed her concern about the definition of “elites” and feared that there might be a reaction if the report fell into the hands of aggrieved individuals.
In January 2019, Dutch historian Rutger Bregman courted controversy at the Davos World Economic Forum when he said it’s time to “Stop talking about philanthropy and start talking about taxes.” Closer to home, it is also time for Nigeria’s plutocrats to stop talking about philanthropy and start talking about taxation. A 2017 Quartz Africa report revealed that between 2010 and 2015 Dangote Cement paid an effective tax rate of just over 1% on a total earning of around N1trn naira by relying on a “Particularly aggressive interpretation of a Nigerian investment incentive known as ‘Pioneer Status’ “. Furthermore, the Panama Papers leak revealed that some of Nigeria’s prominent philanthropists had their assets warehoused in foreign tax havens. If Nigeria’s plutocrats pay their fair share of taxes, and the government is willing to put the funds into productive use, it will go a long way in addressing Nigeria’s challenges.
The oversized role played by NBPIC poses an existential threat to democracy in Nigeria. In a functioning democracy, one voice equates to one vote, however, a society that allows those with the deepest pockets to have loudest voices and the attention of government is on the verge of pressing the destruct button. As we approach the 21st anniversary of the fourth republic, Nigeria is gradually morphing from a democracy into a “Nairacracy” which is a government of the plutocrat, for the plutocrat by the plutocrats. When elites make sizeable donations, it gets the attention of the government, which is a luxury that small donors do not have. At a Gold Gala event organised by Femi Otedola’s daughter to raise funds for Save the Children, the Nigerian government was represented by the Vice-President, senators, Minister of Industry, Trade and Investment, National Chairman of the All Progressives Congress, Minister of Women Affairs and the Governors of Lagos State, Ogun State and Borno State.
In the build-up to the 2019 General Election, President Buhari named Aliko Dangote and Femi Otedola as advisers to his re-election campaign. With the close linkage between the elites and government officials, it shouldn’t be surprising to understand the government’s inability to reform the system for the benefit of the marginalised.
Large corporate organisations like financial institutions play a prominent role in philanthropy through their corporate social responsibility programmes. Forbes Africa ranked Access Bank as the overall best company in Corporate Social Responsibility (CSR) and Sustainability in Nigeria for the year 2019. GT Bank, Access Bank, First Bank of Nigeria, Zenith Bank and Keystone Bank donated N1bn each to the COVID relief fund. Without a doubt, these donations are much needed and appreciated by Nigerians, but they should not disguise some home truths.
Five days after making a N1bn personal donation to the COVID-19 fund, Herbert Wigwe, the Group Managing Director of Access Bank in a video message to his staff said the company no longer needed security guards, cleaners and tea girls and suggested that the bank might have to cut its outsourced workforce by 75% and slash salaries. If Wigwe who claims to be a philanthropist realised that charity begins at home and that charity is a poor substitute for justice, he probably would not have gone on air to mouth such a condescending statement.
In 2018, the Central Bank of Nigeria (CBN) claimed that it had recovered N65bn from commercial banks for wrongful deductions and illegal charges on deposits of customers and other transactions during the period 2012 to 2018. While in February 2020, CBN reported it had recovered N60bn in excessive charges imposed on customers by some Nigerian banks. This robbing Peter to pay Paul approach makes a mockery of Nigerian banks philanthropic CSR initiatives.
A fundamental assumption among the NBPIC is that the private sector is the best instrument for bringing about social change due to the government’s inefficiency. The quintessential philanthrocapitalist is Tony Elumelu, whose concept of Africapitalism is loved by right-leaning think-tanks, the western media, business schools and neo-liberal minded middle-class Nigerians. Philanthrocapitalists advocate a trickle-down market-based approach towards social justice with the expectation that funding a rising tide of a selected few would lift all the poor people in the boat. Philanthrocapitalists and their apostles’ aim to bring about social change by unleashing the forces of capitalism via initiatives like impact investing while making a buck in the process. Instead of supporting the dismantling of the underlying structural causes of inequality and poverty such as corruption, rent-seeking, tax avoidance, monopolies, labour flexibility, price gouging, state capture, tribalism, election fraud and suppression of dissent, philanthrocapitalists take the more convenient approach which they claim is a win-win. Africapitalism, a derivative of the very same neoliberal ideology that plundered Africa centuries ago, is being embraced by the descendants of Africa’s former colonial masters. They also see it as a way to lift the continent out of poverty. As Audre Lorde eloquently put it, “The master’s tools will never dismantle the master’s house. They may allow us temporarily to beat him at his own game, but they will never enable us to bring about genuine change.” Real social change will not come from the top-down. It will have to include a bottom-up mass movement.
Where do we go from here? Before anyone accuses me of playing the politics of envy and being a hybrid of a player-hater and communist, I am not calling for an end to Big Philanthropy. It doesn’t have to be a case of plutocrats choosing between making a philanthropic contribution or advocating for a restructuring of the current economic order that favours the 1%. It is not contradistinction between an either/or, it’s a both/and. The plutocrats can still make their donations; however, they must be willing to give up some of their power and privilege if not for the common good, then at least for the narrow self-interest of self-preservation.
Selah.
Ahmed Olayinka Sule, CFA
