Distinguished Professor Ayodeji Olukoju is a Pioneer Maritime Historian in West Africa. He delivered the keynote address at the Hopkins Homecoming Roundtable titled “Enterprises and Entrepreneurs in Lagos, 1930s – 1970s”.
The event organised by the Faculty of Arts of the University of Lagos held upon the return of Anthony Hopkins, a revered Economic Historian, Emeritus Professor at Cambridge University to Lagos after over 50 years. Hopkins’ famous book An Economic History of West Africa which he authored in 1973 had put Lagos at the centre of trade in terms of Economics, Business and Port History.
On the sidelines of the event, Prof. Olukoju granted this exclusive interview to our correspondent, chronicling maritime businesses potential and challenges in the West African sub-region from a historical and comparative perspective among other issues. Enjoy it!
The Enterprises and Entrepreneurs in Lagos, 1930s – 1970s
While I was the DAAD Guest Professor at Bayreuth University, Germany in the summer of 2022, I was required to organise a workshop based on a course on Business History of West Africa from 1880 – 1960. I needed a co-presenter because we were to have a lot of discussions. It was both physical and online, so I was desperate to get someone that would come in and somehow, I got Emeritus Professor Tony Hopkins. He was completing one of his books on Lagos Traders and Merchants. He had worked on 101 individuals, based on an appendix of the Chapter Six of his thesis of 1964. The 84-year-old Prof took up the offer even though he had just returned from Japan and was planning a working visit to Nigeria. On impulse I told him we would have a roundtable that coincides with the theme of his book when he comes to Nigeria and that was how the concept of “Enterprises and Entrepreneurs in Lagos” came up.
So, when I returned to Lagos, I went to an organisation for collaboration because there was a strike action at the time. We decided to work with that body pending the resolution of the strike. This roundtable looked at the period that Hopkins didn’t cover in his book, he worked on 1850 -1930 so, we decided to look at 1930-1960. As convener, I just proceeded and asked for the submission of abstracts and, later, short essays from people who wanted to present. These were submitted in prose form and in less than 4,000 words.
Professor Hopkins is not your run-of-the-mill Business Historian, he is a renowned expert in Economic History, which is bigger and broader than Business History. The work he has done is something that has no parallel, it covers local and international trade, port history of Lagos and this body of work is based on 101 business biographies. He insisted that I should deliver the keynote address at the event which had eight other presenters. The roundtable dealt with two categories of Enterprises and Entrepreneurs in Lagos; Biographies and Corporate Business History.
Lagos as a Maritime Trade Hub and Concepts for Business enterprises
One of the things that Business History has taught us is that there is really nothing new. For example, businesses operate in cycles. We have the boom and busts. In boom period, you find that everyone is rushing into a particular business but when there is a bust, everyone wants to get out. In a way, it is sort of a survival of the fittest. The survival rate of businesses is 10% to 15% in a bust, whereas the entry barriers are removed when there is a boom. So, when people are rushing in, we should also be aware that after the boom, the next cycle will be a decline and bust. It is important for investors to take measures to anticipate and manage the bust cycle while they are still enjoying the boom. The question is: “How well diversified is your business”? If someone is into shipping and importing, what happens when there is a downturn in that sector? When there was a downturn in such trade in history, there was a boom in other sectors like agriculture so, people should learn to diversify.
We also need to understand that institutions matter and the stronger the institutions, the stronger the economy and the nation’s financial system. If you have strong institutions that give business people and entrepreneurs security and access to capital, such an economy will thrive.
Governance is also crucial; if there are rules on bankruptcy, proper tax regimes, inheritance laws, property rights, etc., businesses will thrive. However, a chaotic business environment where anyone could do anything as the rules are skewed, there will be serious problems. In some instances, the laws and institutions are available but the enforcement is marred by sentiments like political affiliation, friendships, ethnicity or religion. When you introduce non-economic considerations into business, you are going to get problematic outcomes.
The case of gender imbalance is another. As we saw during the presentation, there was gender imbalance between1930-1960 and this is still a problem till date. Women are poorly represented not only in numbers but also visibility and recognition. Access to capital was a problem then and it is still a challenge today. There is also the issue of succession. Lots of businesses die when the founding entrepreneurs die. They didn’t make a succession plan which could be done by grooming mentees or writing a will that would be enforceable.
Generally, the discussion addressed many issues that came up in the presentations. I like the diversity of topics, such as Women Traders in Army Barracks, the Iyalode Institution, Role of Religion, etc. Anyone running a business can learn several things from the discussion.
Sole Proprietorship Stalls Development of the Maritime industry
We need to learn firstly from our history and also learn from comparative experiences. We have seen times without number people who thrived as sole proprietors and later failed. The lesson to learn here is that joint-ventures and partnerships must be the way forward. Another thing we should learn is that we must build indigenous capital that is strong enough to face foreign capital, and government has a role to play in achieving this. Like the former Governor of the Central Bank of Nigeria (CBN), Prof. Charles Soludo did previously, if we have to consolidate banks to make them strong, we should do so. The nation could opt to achieve this via legislation, fiscal policies or whatever measures. There must be a deliberate policy targeted at building Nigeria’s national capital. Look at someone like Dangote, he is so strong because he built steadily but he could never have succeeded without some level of government support. We never can take government out of the equation when we talk about building indigenous capital. Nevertheless, the shipping industry is capital intensive and it is advisable for people to understand that mushroom shipping lines will fizzle out over time. We should jettison small shipping companies and work towards having one powerful line under Public Private Partnerships (PPP). Such a company must have the fiscal strength and be technologically driven to compete on the global stage. Otherwise, we will continue to have a situation where even if people access the Cabotage Vessel Finance Fund (CVFF), they will buy rust buckets because they aren’t really interested in the shipping business but use it as a platform to make money to finance their other businesses or run for office in politics. There must also be sanctions when people collect funds to float a shipping line but channel them somewhere else. Such a person must pay a price for it and there should be rewards for companies that are doing very well.
Finally, I don’t think it is a good idea to have wholly owned government shipping lines or airlines. Government’s stake shouldn’t be more than 25 percent and they shouldn’t dominate membership of the board of directors. Access to capital should be afforded enterprises that operate as commercial enterprises driven by professionals.