Posted Wed, Aug 17, 2022 3:36 PM
Timeframe: Mon, Aug 29, 2022 10:00 AM - Mon, Aug 29, 2022 4:34 PM
Public governance is the exercise of government authority through formal institutions, policies and regulations to promote and distribute public goods and services fairly and equitably. Effective public governance, investment promotion, and sustainable and inclusive growth are mutually dependent and inextricably interwoven. The mantra that government must provide an enabling environment for businesses to thrive is etched in the perceived role of public governance in facilitating the conception, establishment, operation and growth of businesses. Public governance is the foundation for efficient resource mobilization, allocation, productivity, employment creation and wealth distribution. If headed wrongly, everything else wobbles. (Britannica,2022).
The primary constitutional duty of government (in Nigeria) is to protect lives and properties. Investment, like water, would always find its direction and level subject to effective governance. The level and quality of investment that a nation would attract depend on the security of capital and other investment assets and the return on investment that it offers as a location. Therefore, political stability, peace, security, the safety of human lives and protection of private property are prerequisites for investment attraction and retention. On the contrary, political instability, indicated in the high crime rate, civil strife, hostage taking, kidnapping, terrorism, policy indiscretion, disrespect for contracts and other conflicts, as is being experienced in Nigeria today, are sure deterrents to investment. These malefactors discourage both national and foreign direct investment but have consistently remained the Nigerian signposts over a protracted period. The national and international image and perception associated with these factors of mis-governance have come at a considerable discount to investor confidence in the Country. They have continued to deny it the fair share of investment inflow it deserves and desperately needs, given its share size, demography, resource endowments, and need for development. (Economics Help, 2019).
Therefore, it is not surprising that Nigeria's dwindling attractiveness for investment has continued over the years as the Country's political risk rating tumbles further. For investors that have dared to venture in the face of these ills, the high cost of protecting their premises, products and personnel has constrained their operation and growth. The same conditions remained unabated for a lingering period. Unless and until the political risk dimension of Nigeria's investment climate is squarely mitigated, the image of Nigeria as an investment destination will be unattractive, and so will its economic outlook, productivity losses, increasing unemployment and poverty rate.
Effective regulation, administrative transparency and public integrity are critical aspects of public governance that facilitate investment and reduce business costs. The defective design of regulations and their uneven enforcement can constrain business responsiveness, divert resources from productive investment and impede market access. It can further dampen entrepreneurial drive and hamper the job creation capabilities of the nation. (UN, 2021)
On the other hand, regulatory predictability, fostered by stable legal and institutional frameworks that prevent, reduce, detect and punish crimes, corruption and fraud in the public sector and business relations, can boost investor confidence and investment attraction potentials of the Country. The quality of public services also influences the business and investment climate and the location decisions of investors.
Public governance can be measured by the degree of administrative simplification of processes and procedures and formalities in granting investment permits, licenses, and authorizations. Paying attention to reducing political risks and compliance costs through good governance can help reduce disincentives that discourage investment