The Uncertainty of managing uncertainty

Before strategic planning fell into disuse in the late 90s, its hallmark was precision in prediction. Using a set of powerful analytical tools, corporate executives could predict the future of any business. However, under very uncertain conditions as those in Nigeria today, strategic planning becomes an exercise in futility, with little benefit if any or outright failure. When managers have been rendered incapable of scientifically identifying winning strategies for their companies, the danger is that they may resort to gut feelings in dealing with the matters on which the future of their organizations rest. Then we can say hello Stone Age!

For the first time in my several careers as a journalist, civil servant, banker and an academic, I opted for a “white Christmas” this year. I decided to spend the season in any of the countries that experience snow falls during Christmas. I wanted to go to very far places in Europe or America, where I was sure, barring any modification of the weather by climate change, I will still get a chance to put my head out into the snow to cool off. I doubt if there are so many good heads in Nigeria this Christmas that are not longing for some kind of cooling off. This has been one year in which even the so-called egg heads appeared headless in grappling with the economy.

My hunger for a cold place was not a luxury or quest for some exotic holiday location. It was simply a search for a place where thinking could be possible. It has been literally impossible for many people in Nigeria to think properly lately, due to the cacophony of sounds they hear from every corner. Like most Nigerians, the past year has been too hot for me, but unlike many who have left for good, I have no option than to stay here and deal with the issues being thrown up daily by the sad news of scores of houses and tons of money being recovered from people who were trusted by the people to lead them.

In trying to implement my plan, I found out that apart from the scarcity of U.S dollars, for those who happen to have the naira to buy foreign exchange, there are many other obstacles to those who want to get out of Nigeria for whatever reason – SMEs, service providers, importers and others. There was scarcity of aviation fuel on the night of my travel or more appropriately, there was something that made it better for airplanes flying from Nigeria to other parts of the world to go first to Ghana. Wait for it: to fuel their planes. That’s exactly what happened when we took off from Lagos on our way to Amsterdam. Against the wishes of practically everyone in the airplane, we flew into Accra in Ghana and spent about 45 minutes fuelling the airplane. Am still unable to understand what prompted the trip to Ghana, which was not originally advised to the passengers until they had boarded.

I am now in America, where flights are also being cancelled or diverted but not for aviation fuel or the now famous unspecified “operational reasons”, but for the generosity of nature in supplying a bit more coolant in some states than necessary. The heavy downpour of snow in certain parts of the United States of America has caused much disruption in both air and road transportation. Having settled down here in Florida, I find that it is not as cold as I had wanted. The weather is not much different from that of Lagos but there is a great deal of cheery reasons. For one, my room at Westin hotel overlooks the sea, providing a great view. The sight of tourists and magnificent cruise vessels gives the reassurance, that contrary to what I think while at home, the world is not about to end, economically. This was soothing. It helped me relax a bit to do some positive thinking.

As I began to countdown to the New Year, one thing came to my mind – what small businesses must do differently this Christmas as they prepare for 2017. I know that by this time of the year, most people are preparing their New Year resolutions for the coming year – a promise to do an act of improvement in one’s life, which will positively impact the person’s life and the society in general. These resolutions have become rituals and are often made in order to be broke in the first few weeks of the New Year. I thought of the factors that make people break their resolutions and came to the conclusion that they are more plentiful now in Nigeria than ever before. Perhaps, it might not be a great act to make resolutions this time.

First is the present economic downturn, which we call a recession. There has never been a time in the history of our country when it experienced such high unemployment existing together with high rates of inflation and contraction in the national output. I think the first challenge we have with this problem is our inability to properly identify it. While recession is simply the contraction of national output represented by the GDP, Stagflation means is a combination of high inflation, high rates of unemployment and declining national production. So to characterise the present predicament as recession may be a bit misleading. Unless we properly identify a problem, it may be difficult to apply the right solution. Evidently, there is a connection among these phenomena but it is simplistic to address them all with the toga of recession and apply the same set of solutions. In the New Year we need to properly characterise our problem.

The value of the naira has become one of the most indeterminate variables today. The dollar is very scarce, even to those who have the naira to buy it. As part of the exchange control mechanism introduced by the Central Bank, travellers are only allowed to purchase BTA after they have checked in for their flights, obtained boarding passes and can produce a copy of their BVN issued by NIBSS. With the boarding passes and the BVN, they are advised to approach Travelex as they make their way into the airplane. I humoured myself at the MMA and joined the queue for this service at the Travelex. After about 2hours in the queue and almost late for boarding, we were told that the dollar they had was exhausted. Only about 2 people were served all that while. We walked into the airplane with the little foreign currency we had bought from other sources.

There have been reasonable fears that the exchange rate may worsen by the close of the year as the dollar continues rise against the naira. This means that SMEs can’t make any plans against next year due to uncertainty. We face not only the scarcity of foreign exchange but also policy uncertainty. Government by fiat of the Controller General of Customs has banned the clearance of imported vehicles through the land borders. Analysts suggest that the best solution to the seeming boycott of our ports is to understand and address the causes of the boycott rather than to decree a blanket ban on importation of vehicles through the land borders. Some suggest that the action smacks of mental laziness and lack of commitment to trade intra-regional trade by Nigeria.

My take is that for members of the Small Business Community, there is no need to make New Year resolutions, the underlying variables of which cannot be controlled. It is better to embrace what has become the new normal in Nigeria– managing uncertainty, which itself is a most uncertain enterprise.

Emeka Osuji