Africa in the World After COVID-19
Dr. Enase Okonedo is the Dean of Lagos Business School (LBS), Nigeria. In conversation with Soumitra Dutta and Dan LeClair of GBSN, Enase Okonedo discusses the changing equation of businesses and governments with respect to society across the globe, and particularly in Africa.
This interview was conducted 11 weeks after COVID-19 was declared a pandemic by the World Health Organization.
Highlights from this Interview:
- There has been a retreat from Globalization towards domestication in the long run.
- B-school curricula should emphasize the importance of managing risk.
- The pandemic is likely to give African governments greater impetus to support intra-continental trade.
- Social distancing can only be observed by the privileged in society.
- There are no quick fixes to formalize Nigeria’s large informal sector.
Dan LeClair: The COVID-19 virus outbreak has created an impact in just about every part of our lives from work to home, from government to business, and education. Do you see this health and economic crisis as a global turning point?
Enase Okonedo: I very much do and we are starting to see that play out in various forms. We were all moving towards globalization and seeing things as a global village with easy transfer of goods and people. We envisaged that this trend would continue, although in recent years we have seen a few nations embraced and move towards a more nationalist and populist leaning.
Now nations are starting to rethink things like trade policy, foreign policy, as well as what happens in their domestic economies. From my perspective, there is a retreat from what has become the norm in recent years towards more domestication of a number of things. So, I envisage a shift, possibly in the short-term but certainly in the long-term, from globalization to keeping things within borders because of the impact of COVID-19 on economies and disruptions in the supply chain.
Soumitra Dutta: So, there is an increased focus within the national boundaries as opposed to a more global one. How will businesses change as a result of this? Will businesses have to rethink their supply chains?
Okonedo: That is what I think is going to happen. It is not only companies rethinking supply chains, but also nations rethinking trade policy. It is not easy for organizations to immediately bring everything within the domestic boundaries because they have to ensure continuity of business in the short term during the pandemic. We have seen factories stop production on account of the disruption in supply chains and that has an effect not only on the business of the companies, but also on employees and the community. Companies are going to have a deep rethink about their dependence on things coming from offshore.
“This shift will affect many people, but perhaps the dependence on the global supply chain has caused more businesses and communities to be impacted by the pandemic than would have happened if it was more domesticated.“
Dutta: Business schools are very geared towards a global point of view–that has been the mantra for so many years. What type of message should we be sending our students about this pause in globalization? Or should we push them towards continuing globalization? What should we tell our students?
Okonedo:The most important thing is to put more emphasis on the management of risk. Regardless of the strategy that is adopted, we musto become more cognizant of the risk that we face and the effects of such, in order to think about what mitigating factors to put in place. I am not so sure that I would walk into a class and say to my students, “try to hold back or delay or push [globalization].” My role will be more to get them to understand the risks. The risk preference of organizations varies, but it is important to recognize that something we used to take for granted as working seamlessly may no longer work as normal or usual.
“Therefore, I am hoping to teach students the ability to recognize the risks, to be agile and nimble, and to put in place the mitigating factors.”
Dutta: I like the way that you framed this in terms of risk as opposed to just globalization and deglobalization. Do you think that we are teaching about risk and risk management sufficiently to the MBA students? If not, what can we do to change it?
Okonedo: Because we operate in Lagos, Nigeria, this is something that we have always given a lot of emphasis to. How you manage risk in an uncertain environment, the whole fear about the working environment, is different if you are teaching students in a western business school. Certainly in my context we do a pretty good job of making the students cognizant of the risks. Perhaps risk has not been given as much emphasis in western schools. Still, there will be different types of risks and I think more emphasis should be given to risks other than the financial risks of businesses.
Dutta: This is a good case in point where perhaps schools in the west can learn from schools in emerging markets, and we can convey the sense of risk more effectively to our students. How do people assess risks globally without traveling or having a global mindset? For example, to assess the risk of having a part of the supply chain be in China, you should actually go to China. If you do not understand what is happening there, how do you assess it?
Okonedo: Thinking about businesses in my part of the world, I am not so sure that travel makes you more cognizant of the risks. I think it is more a consideration of other factors, like trade policy, protection measures, and supply chains. I think it is more about considering these factors than actually going to the place.
So, I am not so sure that restrictions on travel makes you less cognizant of the risks. I think it is a broader awareness of what those risks are that matters.
“Without a broader understanding of the ecosystem in which the businesses operate and thrive, the travel will do you no good.”
LeClair: With respect to globalization, what are your views on the future as it relates to African integration? There is a set of people that believe regional integration will accelerate as a consequence of COVID-19.
Okonedo: Yes, I share that view. Over the past few decades, we have promoted more inter-regional trade amongst the countries. Usually you will find in African nations that there is more trade with countries outside the continent than inside the continent. Intra-regional trade never exceeded 12%. That led to a bid to promote more trade within the region and to the creation of the African Continental Free Trade Agreement, which is expected to generate the largest trading block on the continent. There are various elements of this agreement that are expected to be put in place in order to better promote trade within the region. Some countries, like Nigeria, stalled in terms of getting on board, but eventually signed that agreement as well.
Even with the broader agreement in place, however, the necessary laws have to be put in place within each country in order to promote trade there. And one will find that there are varying levels of commitment across the continent in that regard. I believe that the pandemic will provide a greater impetus to national government to get the agreement off the ground and make it the largest trading block on the continent—we can do more within the region and will be less dependent on the outside world. This is not making the case to be only inward looking, but I do believe that this will provide the impetus for national governments to do what is needed in order to get the agreement off of the ground.
LeClair: With the large part of the Nigerian economy being informal, do you see greater opportunity or motivation to convert more of the economy into the formal sector?
Okonedo: I wish I could say yes. Unfortunately, my answer will be no at this point in time. When we consider at the population of Africa, we must look at the percentage that operates in the informal sector. In Nigeria, for instance, the informal sector contributes about 60-65% of the economy and this is true in most places in Africa.
Why has more activity not been brought into the formal sector? What are the constraints that have caused it to remain the way it is? What is being done about those constraints? In some instances, there are environmental constraints and in other instances, there are institutional barriers which prevent people from being brought into the formal sector. It could also be due to the paucity of robust databases that enable us to identify individuals that operate in the informal sector in the first instance. If I look at all the factors that have to be dealt with in order to formalize the system, I do not think it can be achieved in the short term.
Will we start thinking about that? The people in the informal sector are largely poor. These people largely live in urban slums, which have impacted more by the pandemic. The crisis has brought to the fore the question of “what are we going to do about the informal sector?” This conversation is playing out across South Africa, Nigeria, Kenya, etc. Is there going to be a quick fix? No, and it is because there are too many constraints to deal with in the short term.
Dutta: We have heard a lot about how governments are taking more active steps to monitor citizens, to control what they are doing and with whom they are interacting. Do you see this trend also taking place in Africa? If so, what are the implications of such governance for society and for government in Africa?
Okonedo: At present, this is not taking place in many countries in Africa because of a number of reasons we just spoke about. The low proportion of people that are in the formal sector is one of the biggest constraints towards managing people, knowing who the people are and where they are. This is about supporting their identity and identity management, as well as having accurate data in order to plan better. In Nigeria, for example, I can speak a lot about the approach the government took. But the government also needs to provide palliatives to the poor and the vulnerable, and that has not been done. This is on account of the fact that there is no record of who those people are and where they are. That is a special difficulty in the African environment.
When I look at governments’ reaction and their approach to containing this pandemic, there have been various essential measures targeted towards protecting the rich or the ones that fall into certain income categories, and the rest are being neglected.
“If the social contract between the citizens and the government has been broken, where it existed at all, there is a problem.”
Dutta: Do you see the government shifting priorities to focus more on citizen well-being and health?
Okonedo: Yes, I certainly see that happening. I think the gross inadequacy of the healthcare sector was actually brought to the fore by what has been happening. There are various benchmarks that the United Nations suggests, in terms of the total spending on various subjects. We have consistently fallen far short of the recommendations in Nigeria. Here there are constraints on the ability to get the required equipment and so forth. African leaders who would typically go abroad in pursuit of medical treatment are not able to do that because of border closures. So, I think that the problem hits home a bit more. Certainly, there can be adjustments of budgets to spend more on the health sector. It is one thing to put these structures into effect, but the neglect has been astronomical in terms of inadequacy of primary health care facilities.
Even more, I think this will lead us to think about education policy and what we are preparing people for. If we look at the ratios of medical personnel to the population, it is grossly inadequate. Yes, I do think there will be more focus on these topics now.
Dutta: To follow up with that, do you think the same is true for business leaders? Businesses generally prioritize economic growth and shareholder success, and less perhaps employee well-being, happiness, and health. What do you think will happen on the business level?
Okonedo: You are absolutely right—the focus of business has been on economic growth and maximizing shareholder values. The first thing that I find heartwarming is that across many countries in Africa, we have seen businesses step up and look at the ways in which they can support the government’s initiatives. Usually, you would find governments making changes with any grants that they can get from development agencies. But, in South Africa, for instance, people in the business sector created a solidarity fund. The last time that I looked, they had raised about 100 million dollars to support the government’s efforts.
Likewise, in Nigeria, there is a private sector coalition that has been contributing to this fight. The last time I checked, they had raised about 60 million dollars. So, businesses are now starting to understand the peculiarities and needs of the time, and they realize that the government may not have the ability to address everything.
In terms of employee value and concern for employee well-being, I think this is also starting to happen. We can discuss how this is going to change employee policy, including achieving work-life balance and working from home. A lot of businesses have been able to carry on working with employees not coming to the office every day. I think we have grossly underestimated the effect of this pandemic on employee health and well-being.
In the city where I live, Lagos, employees can typically spend four-five hours getting to and from work every day, and then have to go home with a very low level of sleep. What does this translate to? Stress related incidents, death, and absenteeism. Now, people are finding that they are more efficient and more productive because there is less travel time and they are able to devote more hours. I do think that this situation is going to change governments as well as businesses. Businesses will be a bit more focused on partnering with government to provide social services that are needed, and also for employee well-being.
I am hoping that businesses will be able to follow and contribute to this.
“Another thing that I hope will come out of COVID-19 is more social innovation. We will look to innovate in a way that is beneficial to the social fabric of society.”
LeClair: Overnight, we have moved from face-to-face programs to being online overnight. Do you think this is a permanent change? Have we learned enough from this transition to believe that online education will be the new normal even beyond COVID-19?
Okonedo: I am not sure and will speak carefully about this. Let us consider why people come to a business school. They come for the knowledge, experience, and networking. Business knowledge cuts across a number of fields and attitudes, and perhaps values, and are an intrinsic part of business schools. But students are also interested in the experience of being on campus—the interactions as well as the networking. The shift to online learning enables us to take care of the knowledge bit. However, while there is a degree of interaction that can take place online, it does not completely replace the face to face interaction.
When Lagos Business School decided to move everything online, we were very prepared. I saw the shift to online education in Italy earlier and upon return to Nigeria, we started making plans for the transition. Nonetheless, the executive programs outright refused this change. Their argument was that online learning cannot replicate the in-person experience. I think that there is still some value in face to face learning, which some people look forward to. I do not think that making a 100% online offering will work for everything. It would work for some, but not for others. This is one lesson.
Another effect on business education, and what I fear the most, is the financial impact. Some programs are happy being online and some, like the executive programs, are not. If a top global school offers the first-year MBA classes online, and we are offering ours online, then most schools in Nigeria will do that too. That is going to have an impact on my finances. Even if I move to a blended format, then there will still be the question of paying a premium if everything is online. There will be clients who will aspire for face-to-face interaction but I think that percentage will be reduced.
Dutta: What do you think has to change in what we teach our students?
Okonedo: The ‘what’ is going to change certainly. At the start of this conversation we spoke about the emphasis on managing risk, as well as globalization. The ‘how’ is also going to change. Technology is going to quickly come on board to replicate some experiences, such as teaching and networking. For instance, last year at the Imperial Business School, they started using holograms to teach classes. So, it is not only the ‘what,’ but also the ‘how.’ With AI [artificial intelligence], experiential learning can be offered without bringing people together to go on a fieldtrip. Sure, it is not the same, but it is close.
LeClair: As you described, the structure of the management education industry may change as a consequence. What do you think about the broader ecosystem? To run a business school, schools have entrance exams, career fairs, internships, and other components that constitute a complete business education. How do you see that ecosystem potentially changing?
Okonedo: You must be aware that this has already started to change. For instance, the GMAT test has begun to be taken from homes. In Nigeria and many parts of Africa, in which there was a notion of test centers, this is a welcome development and may translate to a permanent change if we can get it off the ground. With career fairs I know that organizations have been organizing virtual ones. The one that I have not figured out how it will change is internships, and whether or not it will. But now, when we say we are able to work more now efficiently from our own homes, then with internships it may also be the same. Some of the changes will be permanent, like with career fairs, and perhaps to a large degree the entrance exams, and so the ecosystem will change.
LeClair: There are business schools that are part of universities and some are standalone business schools. Do you think that this experience will create advantages and disadvantages to either type of business school?
Okonedo: I think that there could be an advantage to standalone schools. I had always felt that standalone schools were often disadvantaged, especially in the recent years. This was due to lack of an ability to carry out tasks on a cross disciplinary basis. Now that almost every school in the world is operating virtually, it opens a broader vista for standalone schools because of the opportunity to reach out to schools outside or within the university in order to do research, and to collaborate on projects and programs. I believe that the suddenness by which this has happened creates more of an opportunity for the standalone business schools. I do not see a disadvantage for the schools that operate within a university, but I do see an advantage for the standalone ones.
Dutta: Given the stay at home policy, do you see society coming together or becoming more separate as a result of this forced isolation, in Africa?
Okonedo: In Nigeria, it is driving us apart.
“The differences between the rich and the poor have been exacerbated, and it has become a question of ‘us against them.’”
Under lockdown we are told to stay at home and practice social distancing. But, this can be observed only by the privileged, if I may use that word. Only people in a certain income group are able to do this. The larger population cannot practice social distancing due to poverty and because of residing in slums. Because of the large population that belongs to the informal economy, there are many people who have to go out each day to earn a living. If they do not go out every day, they are unable to earn their pay. And yet, we have instituted the lockdown. And these people do not have the means to sustain that lockdown.
Therefore, in my country and in some others, COVID-19 has caused social unrest because it is a question of the ‘haves’ versus the ‘have nots.’ Rather than bringing us together to say, “how can we fight this jointly,” they are saying that this policy only favors one category and not another. I see that playing out in countries in which there is a wide divide between the rich and the poor. So no, I do not see that this policy is bringing people closer together. In some smaller countries where the poverty levels are not high, there may be a greater degree of unity. But certainly not in Nigeria, or South Africa, for example.
LeClair: What are the few aspects of being a leader that will change for you or you would do differently?
Okonedo: For me,I have to focus on what is important, and this event has made me reflect on what my priorities are and what I spend time on. In the 10 years that I have been Dean, this is perhaps the longest time I have been spending with my daughter. We are doing things together, and therefore I am actually thinking if I want to go back to the way life was before or is there something more fulfilling in having more family time, where I am able to work but not at a frenetic pace. Certainly that is an aspect that will change going forward–the importance of family and making the time. It can be done. Sometimes we exaggerate our professional lives and the need to be in places and do things. But, we can do the same without compromising. For me, that is the most important lesson.
Another one is, when it comes to what we can do to influence society to bring about change, we were suddenly limited to relying on those around us. Now, one has become part of thinking at a higher level “can I get together with people to bring about that which will affect the vast majority of people,”rather than about philanthropy around my immediate environment. In this coalition that has come together with businesses, individuals are not waiting for the government. Instead of saying “it is not my business,” they are deciding what they can cause to happen. For me, these are the most important lessons that have come out of this event.
This interview was conducted by Soumitra Dutta, Chair and Dan LeClair, CEO of GBSN. This edited summary of the interview was prepared by Shefali Rai, Research Associate, GBSN, and Stephanie Eskine, International Communications and Event Planning Intern.