The need for individuals and corporate organisations to embrace digitalisation and technological disruption for optimum performance has been restated over time.
Today, the indispensability of digital tools is becoming more evident especially in the post- COVID-19 workplace era. In this interview with Daily Sun, the President /Chairman of the Governing Council of Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN), Mr. Bode Ayeku, speaks on the cost implications of failure to invest in and embrace digitalisation in both the private and public sectors.
He argued that the cost of failure to digitise operations was usually more than what it would take government or private sector to fully operate digitally. This also means that what government is losing in monetary terms due to failure to digitalise its operations and not making the environment digital friendly was far higher than what it would have spent or invested in digitalisation. He spoke on other issues.
Economic implications of government’s failure to adopt digital operation
The cost is colossal. First, what is the total amount of salaries of workers from level 1 to level 12 who stayed at home during the pandemic in the public sector because they were asked to stay at home, but no facilities were provided for them to work with at home? Second, what is the total revenue that the missed operations that the employees forced to stay at home without tools to work from home would have generated for the government? This is because I am talking from opportunity cost point of view.
For instance, for the revenue generating government agencies, if they were able to render services to the public, they would be able to make money because they charge fees for those services that their personnel render. Let us take the Corporate Affairs Commission (CAC) for instance. If officers on grade level 1 to grade level 12 were asked to stay at home from the period of the lockdown in March for about six months and they were paid. It should be noted that we have a lot of customers of CAC who filed documents and needed other services, but they could not receive such services. It then means that, apart from the salaries and emolument paid to those employees who were forced to stay at home but could not work because government failed to provide tools for them to work from home, the government also lost revenue due to the inability of such government agency to render the revenue generating services to the public because the employees were not in the office to render such services. In addition, the disruption of the operations of corporate entities as a result of their inability to procure the needed documents or services from the government agencies is another cost to be considered by the government of not fully embracing technology which would have assisted its employees to render services to the public either in the office or while working from home. This gives a bigger picture of the revenue that the government is losing and the disruption of business activities of the stakeholders. Apart from that, you need to consider the operations at the Ports, the cost implications of the congestion and the avoidable demurrage stakeholders are forced to pay. There is the urgent need for digitalisation of the public sector and technologically enabled environment to support the private sector. Unfortunately, most operations in the public sector are still done manually.
The question now should be: can you quantify the revenue the government has lost and is still losing owing to outdated and manual operations of its agencies? It is a fact that had the public sector digitised their operations and stakeholders do not need to physically interface with anybody in the public sector, government would have earned substantial amount of money with or with the disruption of COVID and corruption would also reduce. However, since most employees in the public sector were not in the office due to the stay at home order and they have not digitised their operations, the government has lost a lot of revenue in addition to the mental torture that stakeholders dealing with such agencies were subjected to. Actual cost in the sense that, what are those expenses that the government incurred which ordinarily should have provided services to the members of the public and stakeholders that would have enabled the government to earn more money which they have lost? The second part is what is the revenue that the government would have earned if they were able to render those revenue generating services digitally? So, the cost is massive. But let me say this, the government should not say that it has no money to embrace technology, acquire the hardware, applications, internet and digitalisation or say that it will take time for this to be achieved.
Digitalisation is the minimum platform that government must put in place for it to have a seamless operation to support the private sector. We are talking about the global pandemic- COVID-19. We do not know which one is coming after this. Nobody anticipated the #ENDSARS protest or that it would lead to more disruption of operations and destruction of assets than COVID-19. The pandemic did not destroy or burn buildings, facilities, court premises and valuable materials or schools, release any prisoners, but #ENDSARS protest did. We saw what happened in many parts of the country. The government is asking, “How can the courts retrieve the records that were burnt and the details of those released from the prison during the protest?” You see that it is becomes a very big problem. However, if they had digitalised the whole system, they would just rebuild the physical structure and retrieve their data and information in the digital archive and reprint. Very simple. Now you see the cost implication of not digitalising operations and records.
How can the Federal Government avoid the revenue shock?
Personally, I do not see anything bad in borrowing if it is properly utilised. In fact, the best time for the government to borrow is now. The interest rate is less than one percent. Bonds that were issued by government at 12 per cent, 14 percent as at the beginning of the year are now issued at two to three percent now. Treasury Bills that used to be issued at interest rate of 18 percent in the past are now issued at less than one percent. So, this is the right time to borrow money. However, government must not be borrowed for consumption, it must not be to maintain this our bloated structure, it must not be borrowing for personnel cost and should not be to serve the personal interest of those in authority. The structure of the institutions must align with the current realities that things are difficult. Therefore, we must spend prudently if we must get out of the woods. For instance, if the government wants to borrow to invest in technology, it is a right investment that will add value to the economy. If government is borrowing to invest in infrastructure, it is a welcome development because they are borrowing to facilitate economic transactions at less than one percent. So, it is the right thing to do but it must be spent prudently.
How to move Nigeria forward?
The way forward is very simple: the government must be very prudent with the way and manner they spend the meagre resources. They cannot continue with this bloated governance structure where we have too many office holders with manual operational structures. If they are discreet in the management of the meagre resources, try as much as possible to reduce the expenses to those things that will add value, the stakeholders will benefit. We cannot spend the bulk of that money in serving these bloated structures and systems we have. It will not work because it has no impact on the people.
Corporate governance principles to help businesses survive COVID-19 trauma?
We must understand that the challenges are not peculiar to Nigeria only. COVID -19 is a common denominator all over the world. Consequently, its impact is massive across spectra. But the good thing is that the same corporate governance principles will still be required to stabilise and assist to take off on a very sound note to keep the business going. The principles are simple. It is all about transparency, fairness, responsibility and accountability. The truth is that before, during and after COVID -19, the stakeholders remain the same. Though the expectations have changed, the stakeholders should be informed in a timely manner of relevant changes in operations and the impact. As a result, communication is key in times like this so that everyone will be in the on the same page. More so, corporate leaders must show fairness in decisions, policy design and planning in turbulent times. Aside that, there must be equity, understanding and empathy.
How to prepare for future emergencies
Well, both the private and public sectors have learnt their lessons.
Most companies have Business Contingency Plans (BCP) before COVID while some do not. Now COVID-19 has reminded the dormant entities of the need to have BCP to overcome unexpected challenges. For instance, the employees of The Nigerian Stock Exchange (NSE) since March 2020 have been operating from home. Surprisingly, if you call any of their officers at any time of the day, you will get response. If the officer does not pick your call, he will call you back. If you send mail, they will respond.
Now ask yourself, if the NSE had been operating in the manual and outdated manner as it was 20 years ago, that means the stock market would have collapsed with the outbreak of the pandemic. But they are so confident that even when there was a gradual easing on the lockdown, they said they would continue to work from home. For them, it is no longer that they will use the regular BCP in case of business disruption, but a normal way of working and an assurance to stakeholders that they will continue to operate notwithstanding the magnitude of the challenge. During the #ENDSARS protest, organisations that have digitised their operations were able to operate without any disruption, notwithstanding that their employees could not get to their offices due to the restrictions on movement and the nationwide violence. Whereas, organisations in the public and private sectors still operating manually could not do anything during the period of the protest. This a very big lesson for both the private and public sectors. Those who prepared themselves for any eventuality has nothing to fear. So, let both private and public sectors invest in technology, especially the government agencies. This is because COVID-19 is the digital rapture of the workplace and the means of interaction with the stakeholders.
How ICSAN 2020 Annual Conference will impact Nigeria socio-economic landscape?
The conference will address so many corporate governance issues affecting Nigeria. The theme for the 2020 Conference is, “Entrenching The Right Governance Framework For Economic Development and Sustainability”. We have three sub- themes: (i) The New Normal: Emerging Trends in Corporate Governance and its implication on business continuity (ii) Digitalisation and Cyber Security: Impact on Businesses and (iii) The Revised Companies and Allied Matters Act 2020: Opportunity for Company Secretaries. A breed of reputable professionals across board are coming to dish out practical panacea to the multi-layered challenges in the country. For instance, we know that the cost of governance is becoming too high and there is the need to focus on things that will add value to the economy. The government needs to be supported by experts in order to get Nigeria out of the economic challenges. We remain confident that the conference will yield positive results because we believe the government will heed sound professional advice from those who know their onions.