The Role of Government in Business in Nigeria

The Role of Government in Business in Nigeria – The government plays a crucial role in supporting and regulating business activities, and its involvement is essential for creating a healthy and stable economy. Without the government, businesses would face a chaotic and unpredictable marketplace, and consumers would be vulnerable to fraud and exploitation. However, there are also questions about the extent to which the government should be involved in the business. This raises the question: what happens when the government fails to be involved in business, and what are the implications for society as a whole?

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What is Government intervention and how does it happen?

Government intervention refers to the actions taken by the government to influence or regulate economic activities. The government is the sovereign body in any nation, this means that they have the responsibility of maintaining peace and order in that nation.Government in Business in Nigeria

In maintaining peace and order, the government gets involved in the activities of the citizens. This can take many different forms, such as setting rules and regulations, providing financial assistance, or directly intervening in the marketplace.

The goal of government intervention is typically to promote economic stability, protect consumers, and support the overall health of the economy. Examples of government intervention include setting minimum wage laws, providing unemployment benefits, implementing monetary and fiscal policies and most recently the demonetization and changing of the Naira notes.

Government intervention is often seen as necessary to address market failures and to ensure that all members of society have access to basic goods and services.

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How has the Nigerian government intervened in the past

In the pre-colonial era, the government of each kingdom fixed market days. This is the simplest form of government intervention. Other things like taking a portion of your harvest to the traditional ruler count as intervention. In some other places, the traditional rulers designate the lands to be used for farming.

During the colonial era, the British colonial government fixed and collected taxes, this is also a form of government intervention in business. On the extreme, the British government also ensured that the goods they needed in their country were produced in considerable quantities for export. They did this by establishing the Niger Royal Company. How Chelsea can pull off miracle comeback to stun Real Madrid and keep season alive

In the early 2000s, we can also see government intervention through the nationalization and later privatization of businesses. Modern governments play bigger roles especially due to the complexities and dynamics of modern business systems. Information Guide Nigeria

Categories of Government Roles in Business

There are four categories of roles the Nigerian government can play in business or economic activities.

• Regulation: The government can play regulatory roles by setting rules on economic activities. This can include things like consumer protection laws, environmental regulations, and labor laws. The goal of regulation is typically to ensure that businesses operate fairly and ethically and to protect consumers from harm.
• Provision of public goods and services: The government provides many goods and services that are considered essential for a conducive business and investment environment. These public goods include security, healthcare, electricity, roads, and infrastructure. These ensure that business can run smoothly.
• Redistribution: The government can use its tax and transfer system to redistribute wealth and income from dominant businesses to less successful business sectors. This is prominent in the taxing of businesses in the oil sector as against providing grants and loss to those in agriculture.
• Stabilization: The government can use various tools, such as monetary and fiscal policy, to stabilize the economy and reduce the impact of economic downturns on businesses and citizens. This can include things like interest rate adjustments, government spending, and tax changes.

Role of Government in Businesses in Nigeria

Each of these roles falls under one of the categories of regulation, redistribution, provision of goods and services, or stabilization. These roles highlight exactly how the Nigerian government gets involved in daily business activities.

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• Regulating business practices: The government sets rules and regulations that businesses must follow to operate legally and ethically. Setting standard terms of employment and registration of business in the Corporate Affairs Commission are business regulatory practices. JAMB Portal
• Providing infrastructure: The government is responsible for building and maintaining the roads, bridges, and other infrastructure that businesses need to operate. This can include things like transportation systems, airports, and ports. These infrastructures ensure that business activities are attractive and can run smoothly.
• Supporting economic growth: The government can support economic growth by investing in education and training programs, providing financial incentives for businesses to invest in research and development, and implementing policies that encourage economic development.
• Protecting consumers: The government plays a role in protecting consumers from unfair or fraudulent business practices. This can include things like setting standards for product safety and quality. Through Consumer Protection Rights, the Standard Organization of Nigeria and Consumer Complaints bodies, the Nigerian government ensures that businesses give the consumers the best of services.
• Collecting taxes: This is the most classic role the government plays in business activities. The government is dependent on taxes to regulate and maintain public infrastructure. By collecting taxes, the government can ensure that its roles in business can continue and wealth can be redistributed.
• Promoting competition: The government can promote competition in the marketplace by enforcing antitrust laws and preventing monopolies from forming. It is the role of the Nigerian government to ensure that no business becomes too big in any sector. On occasion, the government intervenes by establishing a public corporation in that sector, most of which have failed in Nigeria. Examples are the NITEL established to curb the monopoly in the telecommunications sector.
• Providing access to capital: The government can provide businesses with access to capital by offering loan guarantees and other financial assistance programs. This can help businesses, especially small businesses, get the funding they need to start or expand their operations. The Nigerian government often does this through its SME and agri-loan programs.
• Setting trade policies: The government is responsible for setting trade policies that determine which countries businesses can trade with and under what conditions. This can include things like tariffs, quotas, and other trade barriers. The government often uses this to either encourage patronage of local produce or prevention of internal scarcity. The closure of borders by the Buhari administration was in a bid to encourage the consumption of local produce.How to Transfer Money From Union Bank to Wema Bank
• Providing support during times of crisis: The government can provide support to businesses during times of crisis, such as natural disasters or economic downturns. This can include things like providing financial assistance and implementing policies that help businesses weather the storm. This could be in the form of special grants for essential businesses that are going bankrupt or are faced with supply chain issues.
• Protecting intellectual property: The government plays a role in protecting intellectual property, such as patents, trademarks, and copyrights. This can help businesses protect their innovations and creative works and can encourage innovation and creativity.

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Ways the Nigerian government has failed in its role in Business

The Nigerian government has continuously shown its inability and inefficiency when involving itself in business. These failures result in the loss of lives and property, the wastage of government funds and the failure to provide a conducive environment for business and investment. NYSC Portal

• Negligence: The Nigerian government is often negligent which keeps it oblivious to the needs of businesses and the people. Infrastructure like roads and insecurity continue to place a threat to business activities and deters investment. On the other hand, the absence of price regulation gives companies the upper hand in determining how much they wish to place on their products. This is exemplified by the price hike in fuel especially when there is no fuel scarcity. Romantic Love Messages
• Mismanagement: This often happens when the government becomes directly involved in business activities through public corporations. The Nigerian government spends money on corporations like the refineries, NIPOST, NITEL and even the NNPC. Most times these corporations amount to nothing and cannot show anything tangible for the money put into them.
• Bribery and Corruption: Combined with negligence this creates a recipe for destruction. Failure to perform regular inspections and reassessment of standards put a lot of citizens at risk. Businesses bribe officials when they do not meet standards for operation. In turn, officials turn blind eye to the brewing hazard that these businesses can cause to the citizens and their workers. The constant building collapse in Lagos state is a testament to this. Good Morning Love Message

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Conclusion

The need for government intervention in business is based on the idea that, without such intervention, businesses may not act in the best interest of society as a whole. This can lead to market failures, such as monopolies, externalities, and information asymmetry, which can result in inefficient allocation of resources and unfair distribution of wealth. Government intervention, through tools such as regulations, taxes, and subsidies, can help to address these market failures and promote more equitable and sustainable outcomes in Nigeria.

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