Corporate Social Responsibility in Nigeria

Corporate Social Responsibility in Nigeria

Corporate Social Responsibility in Nigeria

Corporate social responsibility as a concept is new in Nigeria even though its implementation stems back in history. Nigerian companies have a long tradition of partnership and dialogue with their communities and stakeholders.

Some organisations have not created their own definition of the concept of CSR but have adopted already established and accepted definitions. Almost all companies agree to the 3 dimensions of CSR: Environmental, social and financial dimensions.

In Nigeria, I believe the main driver of CSR is: Philanthropic motives and to create improved brand value. The main motive seems to be the need for businesses to contribute to community development, environmental improvements and societal change.

The lack of governmental and institutional support in Nigeria today with regard to improving the condition in society puts an increased pressure on the business society to contribute to social transformation in Nigeria.

The practice of CSR is still at an early stage in Africa; sometimes it is equated to as philanthropy. Nigeria corporations perceive and practice CSR as corporate philanthropy primarily aimed at addressing socio-economic development challenges.

The history of formalized CSR in Nigeria can be traced back to the CSR practices in the oil and gas industry, with CSR activities aimed at remedying the effects of their extraction activities on the local community.

In fact, most of what have been considered as CSR practices, particularly in Nigeria are business activities carried out by multinational corporations to cushion the effects on their harmful business operations. The above assertion was aptly captured in the statement below by the United Nations Department of Economic and Social Affair:[1]

In practice, much of the business activity that has so far been labeled CSR has been driven by the concerns of investors, companies…based in the world’s richest countries. National CSR agendas in middle and low income countries have been less visible internationally, and have not often been labeled CSR”.

This is the type of CSR practice that Amaeshi[2] refer to as ‘Western mimicry’; meaning a direct imitation and importation of CSR practice in western countries to other parts of the world. They further argued that there is hardly any Nigerian brand of CSR practice; rather the CSR practices of multinational firms operating in Nigeria reflect the national business systems of their home countries.

What then could be responsible for this lackluster attitude towards CSR practice in Nigeria? Judging from the enormous mutual benefits accruable to business enterprise and the society at large, one begins to wonder why the public and private sectors have not fully leveraged on proactive CSR initiatives so as to tackle the dire development needs of the people.

Many have blamed the trend on the inability of successive governments in Nigeria to come up with a workable legal framework that would usher in and regulate standardized CSR practice in the country. According to Ijaiya:[3]

Since the emergence of CSR in Nigeria, there is no law put in place by Nigeria government in the area of corporate social responsibility. CSR is still at the discretion of the companies. Thus, while companies have a social responsibility to the communities they operate in, the framework within which this is to effectively work have to be provided by the government.

This statement aptly captures critical concern impeding effective CSR practice by firms. When there is no specific regulation and enforcement framework in place to direct the activities of companies in terms of their obligations to the host communities, companies or business entities can decide to act in the so-called responsible manner based on their judgement of what CSR is and how it should be practiced. It is the duty of government and its relevant agencies to guarantee the existence of such framework and to ensure its enforcement by the relevant agencies.[4]

An attempt to birth a legal regulatory framework for CSR in Nigeria was made through a pill presented at the senate in 2007. The bill was sponsored by the former Senator representing Abia North Senatorial District, late Uche Chukwumerije.

The Bill sought to provide a legal backing for the regulation of corporate social responsibility activities of corporations in Nigeria. Some f the objectives of the legal document were to guarantee that the companies promote economic, environmental and social advancement of the affected communities, promote local capacity manpower growth through close collaboration with communities, as well as develop suitable relationship with community members.

One of the cardinal mandates of the proposed commission, according to Part 3, Section 5(1) is to develop policies to encourage corporations to participate in community development and guarantee that companies support development programmes that are significant to the development of the people.

The bill was described as a welcome development as it was long awaited. Experts believe that the proper enforcement of the legal framework, if it had been passed into law would have helped to checkmate the activities of companies in Nigeria and ensure the implementation of their responsibilities to the host communities.

However, the bill met stringent opposition by segments of the business communities in Nigeria. They questioned the feasibility of companies plunging up to 3.5 percent of their yearly profit to drive CSR initiatives. They argued that the existing business climate in Nigeria would not favour companies to agree to the mandatory payment of 3.5 percent of corporations’ net profit after tax.

According to them, companies in Nigeria operate in such an unkind business environment that most times compel them to build the roads they use, generate their own electricity, provide their own water, security and many other subsidiaries that are taken for granted in some parts of the world.[5] Therefore, they argued that making CSR compulsory would amount to an umpteenth form of taxation as they were already overtaxed.

They submitted that CSR should remain as charitable as it had been in most part of the world because pushing for the passage of the bill would further drag the nation’s economy backward. After a public hearing on the bill in December, 2009, there has been silence afterward.[6]

Suffice it to state that given the inability of the Nigerian government to cater for most critical development needs of people in different parts of the country, resorting to make sustainable CSR an obligation of all companies can serve as one of the ways to meet the critical development requirement of Nigeria. Government may derive greater developmental benefits from CSR where there is a national strategy framework which explicitly recognises its potential contribution and seeks to align CSR with development goals.[7]

 

[1] United Nations Department of Economic and Social Affair, Sustainable development innovation brief (Issue 1, February, 2007, P.1). Retrieved from http://www.un.org/esa/sustdev/innovationbriefs/index.htm accessed on 8th April, 2021

[2] K. M. Amaeshi et al, Corporate social responsibility (CSR) in Nigeria: Western mimicry or indigenous practices? Retrieved from https://www.nottingham.ac.uk/business/ICCSR/assets/researchpapers/39-2006.pdf accessed on 8th April, 2021

[3] H. Ijaiya, ‘Challenges of corporate social responsibility in the Niger Delta region of Nigeria. Babalola University Journal of Sustainable Development Law and Policy, 3 (1), 2014, pp. 60-71. Retrieved from https://www.ajol.info/index.php/jsdlp/article/download/122615/112163&ved accessed on 8th April, 2021

[4] E. U. Ogri, & O. O. Eric, ‘Corporate social responsibility (CSR) strategies of Nigerian AGIP oil company (NAOC) for members of host communities in Rivers and Delta States. Journal of Media, Communication & Language, vol.6 (1), April, 2019, p.57 Retrieved from https://www.researchgate.net/publication/337290664 accessed on 8th April, 2021

[5] O. D. Okenyode, ‘Can Chukwumerije’s CSR bill survive? Legislative Digest vol. 5 (1), 2010, p.8. Retrieved from http://www.cislacnigeria.net/wp-content/uploads/2009/12/Legislative-Digest-Jan-2010.pdf

[6] ibid

[7] supra

Leave a Reply

Your email address will not be published.