Saturday, 19 November 2011

Governments keep out!

Governments do have a role to play in improving national productivity.

But it is all about policy, infrastructure and direction. What governments must not do is 'meddle' at operational levels.

This was brought home to me (once more) by a recent report that the Nigerian Minister of Power, Professor Barth Nnaji directed the management of the 18 successor companies, created out of the Power Holding Company of Nigeria (PHCN) to start paying staff a 50 per cent salary increase effective from September, 2011.

In a memo to the Chief Executive Officers of the successor companies, the minister indicated that the Federal Government had agreed to pay the outstanding first three months of the new salary package which took effect from June 2011.

Now if there were a rational economic reason for this directive, it could perhaps be understood.

But it actually goes counter to earlier comments expressed by the same government a week earlier when they expressed dissatisfaction with the productivity of the PHCN workers, saying they generate less than half of their wage bill.

Of course, these successors companies are supposed to be independent, private companies with supposed liberty to formulate their own wage structures — based on fairness and productivity of staff.

But the government has crippled their decision-making ... and their future productivity.

So, my advice to other governments is ... do what you need to do at the macro level ... and you do need to do it ... then get out of the way.

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