Nigeria

The role of CSR

So far, corporate social responsibility has not played an important role in Nigeria, and has not been the subject of a wider public discussion. There are expectations that companies will offer certain benefits to their employees and the communities where their facilities are located, but they are often non-specific or focus only on a specific enterprise. In addition to being motivated by concrete needs, expectations reflect traditional views of a companys or an entrepreneurs responsibilities toward employees and the community. It is only certain members of civil society and the political community that have recognized that CSR can be an essential component of sustainable economic activity. There is little long-term planning; in most cases companies are asked to help meet short-term needs. Indeed, given Nigerias high poverty rate over 50 percent this is entirely understandable. German and other foreign companies in Nigeria have a positive attitude toward CSR, and CSR is particularly important for the major Nigerian banks, which have an international orientation. In addition to benefiting society, CSR activities are often undertaken as a way of promoting a companys image. Nigeria has a well-established culture of charity; wealthy individuals and institutions contribute to charitable causes and use these contributions to garner positive publicity. In this respect there is little difference between the political realm and private industry. Companies in Nigeria are expected to promote transparency, even beyond what is required by law. This is encouraged by the government, which has made it clear that it has certain expectations, particularly of foreign enterprises. So far, however, there has been little response from companies despite the high priority attached to this topic because of Nigerias widespread corruption. Sustainable business activity is discussed by NGOs and the media, but not by the wider public. As German industry becomes more and more active in Nigeria, the topic of CSR will gain increasing significance. The first German-Nigerian Economic Forum, which was held in Frankfurt on October 7 and 8, 2008, underscored the importance of responsible involvement by German companies, with particular emphasis on energy and transportation infrastructure. Nigerian officials highlighted the need for a comprehensive transfer of knowledge from German companies to their Nigerian partners. International development cooperation plays only a minor role in Nigeria. Only about one percent of the countrys public spending is financed by contributions from international donors. The influence of such cooperation and of intermediary organizations is correspondingly limited. Nigerians tend to regard foreign companies, at least the major ones, as more important than development organizations. Similarly, in its foreign trade policy the Nigerian government attaches greater importance to working with companies than with development institutions.

So far, development organizations in Nigeria have not had a great deal of experience working with companies in the field of CSR. This is due in part to their relatively limited areas of activity, as well as to the fact that companies in Nigeria unlike those in most African countries have a wide range of business opportunities unrelated to development; accordingly, organizations active in development and private enterprises have tended to work independently of one another. It is conceivable, however, that companies might seek out the expertise of such organizations in the future, as Nigerias expectations concerning CSR are formulated more clearly. Source: German Embassy, Abuja, and the German Association of Chambers of Industry and Commerce

CSR understanding
Nigeria is a highly complex country, with over 250 (over 400, according to some estimates) ethnic groups and a variety of religions (Christianity, Islam, animism) and traditional social structures, and companies need to take these factors into account in their CSR activities. The northern part of the country is largely shaped by an Islamic order, a fact that is relevant to any efforts to promote the status of women or to undertake health initiatives. The Islamic tradition and, in other regions, Christian religious beliefs also shape expectations for corporate charitable contributions. In the political realm, it is important to ensure that corporate engagement is not coopted by local politicians. Since the end of the military dictatorship in 1999, the young Nigerian democracy is still developing, and politicians are more involved in entrepreneurial affairs than their counterparts in Germany. While there are occasional calls for companies from Western countries to provide aid to Nigeria as a kind of reparations for the colonial era, this is really more of a rhetorical device than a matter of practical relevance. More significant are increasing demands for these companies, as globalization winners, to leave some of their profits in Nigeria. In connection with the crisis in the Niger Delta (protests against the environmental pollution caused by oil production), there are high expectations that corporate social engagement will help counteract the negative effects (especially environmental damage) of oil production on the people of the delta region. Companies are indeed becoming involved in the delta communities. Western companies are generally presumed by the Nigerian public to be wealthy. It is apparent that Nigerians have a healthy self-image and take pride in the productivity of their country, and Nigerian agencies often voice reservations about private aid efforts that are undertaken without local connections or proper regard for local structures.

Expectations towards companies

Both policymakers and the public believe that companies have a moral responsibility to society. There is also a fundamental expectation that companies and wealthy individuals will help alleviate poverty and provide support for the less privileged through their social efforts and donations.

Expectations of CSR efforts by German companies are basically no different from the expectations placed on other foreign companies, particularly those from the West. German companies in Nigeria are particularly well respected, however, not least because of the high quality of their products. Accordingly, it is often assumed that German companies are more reliable and willing to engage in longer-term efforts. German companies are expected not only to be active in the business sector, but also to be socially engaged, particularly in fighting poverty. This means, most of all, taking responsibility for their employees and their families (fair wages, healthcare, etc.). They are also expected to contribute to basic and further training, since the public educational system is of inferior quality, and private schools are affordable only for Nigerias upper classes. Requests sometimes focus on help with vocational training because of Germanys excellent reputation in this area. In most cases, companies are asked to deal with environmental protection issues only when an urgent local problem requires a solution, although public awareness of clean and environmentally friendly corporate behavior is increasing. Here, too, German companies have an outstanding reputation. In the cultural sphere, it is advisable to focus on large metropolitan areas that offer a broader range of cultural activities. The media are likely to take note of cultural initiatives, just as they highlight sports-related efforts. The expectations of the public at large, however, focus on meeting the basic needs of the population. Involvement in social conflict resolution is fraught with difficulties. Certainly the many cases of ethnic and religious confrontation offer abundant opportunities, but the potential dangers of such involvement and the political dimension of these conflicts suggest that companies should refrain from activities in this area unless they are well positioned within a network and have adequate political support.

Basic conditions
Implementation of international regulations and guidelines Although Nigeria is a party to the ILO core labor standards conventions, it is failing to comply with its reporting obligations. Despite efforts to implement the conventions, in practice much remains to be done. Freedom of assembly and the right to collective bargaining are guaranteed by law, and the government generally respects these rights within the existing legal framework. However, the ILO has noted that certain parts of the Trade Union Act of 2005 are in conflict with the right to collective bargaining. Although forced labor is banned in Nigeria, unofficially it continues to be a problem. Most affected are women and children who are forced to work in households. Despite the fact that the minimum age of employment is 15, child labor is common in Nigeria, particularly in the agricultural and informal sectors. Children are regularly smuggled between Nigeria and

neighboring countries to be put to work. Women are paid less than men for comparable work, and in many cases they can find jobs only in the informal sector. Legal minimum-wage provisions do not apply to employees of small companies, part-time workers or seasonal workers, and there are many women in these categories. There are reports that pregnant women frequently lose their jobs.
AREAS OF ACTIVITY

Poverty
A large percentage of the Nigerian people have an income below the poverty line or find themselves unable to meet their basic needs; in many cases the income from an official job is not enough to support a family. Many Nigerians cannot afford a good education or basic medical care or even a well-balanced diet. A system of general insurance (health insurance and pensions) is only now being established, and so far it is limited to the government sector; private insurance is beyond the means of all but the wealthiest Nigerians. It is not surprising that life expectancy in Nigeria is less than 50 years, which is considerably lower than in other African countries.
Basic information
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Life expectancy: Total population: 46.53 years; males: 45.78 years; females: 47.32 years (2008 est.) Infant mortality: Total: 95.74 deaths/1,000 births; males: 101.83 deaths/1,000 births; females: 89.28 deaths/1,000 births (2008 est.) Malnutrition: 9% (2002/04) Access to clean water: 48% (2004) Access to sanitary facilities: 44% (2004) Human Poverty Index: Ranks 80th of 108 (2007/2008) Gini Index: 43.7 (2003) Population under the poverty line: 70% (2007 est.)

Under its seven-point agenda, the Nigerian government has pledged to combat poverty. However, despite Nigerias material resources the government has so far failed to translate the countrys economic growth into greater prosperity for the population at large. The reasons include widespread corruption, administrative inefficiency and the dismal state of the health and educational sectors. German and other companies could make a significant contribution to fighting certain aspects of poverty.
Participants

Since the contribution of German companies to alleviating poverty primarily involves making direct payments to their employees, there is little opportunity for cooperation with other players.

Education
Basic information
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Public spending on education (share of GDP): 0.9% (1991) Compulsory school attendance: 6 11 years of age Rate of school enrollment: 60% of children who are required to attend school (2004) Literacy (definition: those over the age of 15 who can read and write): Total population: 68%; males: 75.7%; females: 60.6% (2003 est.) HDI Education Index: Rank 158 out of 177 (1 = max., 0 = no education) Average years of education: Total population: 8; males: 9; females: 7 (2004)

Owing to poorly trained teachers and a lack of financial resources, Nigerias public educational facilities are hard-pressed to offer regular instruction of acceptable quality. The problem begins with the elementary schools and is even worse in the universities. According to official figures, some 60 percent of Nigerians remain functionally illiterate, and the percentage of girls attending school is significantly lower than the corresponding figure for boys. Vocational training is almost entirely neglected in the public educational system, and even in the private sector such training is rudimentary at best. The informal sector is incapable of providing more extensive training. Private educational institutions are far superior to their public counterparts, but only Nigerias upper classes can afford them. Given this situation, it is no surprise that many German companies complain of a lack of well-trained local employees.
Participants

Possible participants include organizations for development cooperation (GTZ, CIM etc.), chambers of commerce, trade associations, trade unions, ministries (Ministry of Industry, Ministry of Small and Medium-Sized Enterprises) and political foundations (such as the Friedrich Ebert Foundation, the Friedrich Naumann Foundation and the Konrad Adenauer Foundation). GTZ Nigeria http://www.gtz.de/en/weltweit/afrika/594.htm CIM Nigeria http://www.cimonline.de/en/weltweit/271.asp German-Nigerian Chamber of Industry and Commerce http://www.ahk.de/index.php?id=nigeria Konrad Adenauer Foundation, Nigeria office http://www.kas.de/proj/home/home/33/2/index.html A number of German companies have expressed interest in working with GTZ to promote vocational training. Since this is not a focus of GTZs work in Nigeria, no specific projects have yet been launched; however, companies continue to show interest.

Within the scope of German-Nigerian cooperation on energy issues, there are plans to open a school for power plant management, which will train local employees to operate and maintain renovated or newly built power plants. Possible partners include the African Development Bank, the National Planning Commission and the Nigerian Ministry of Education. Opportunities and risks related to educational initiativesBoth the government and the public regularly indicate that they expect foreign companies to be involved in capacity building, and German companies set a good example in this regard. Providing buildings and materials for local schools and financing a portion of teachers salaries are among the most popular corporate contributions. There has been less emphasis on cooperation with institutions of higher education, although this too is an area that offers opportunities, particularly with a view to helping train the skilled workers of the future. Cooperation with the responsible Nigerian authorities requires experience in dealing with local bureaucracies.
Company examples

Despite the above-mentioned problems in the educational sector, German companies employ a large number of Nigerian workers. Many companies have set up their own training programs to ensure that these workers are capable of producing the high quality that is expected of them. Discussions with employees are held about job responsibilities, but also about such topics as safety in the workplace and health risks (HIV/AIDS, etc.).

Health
Basic information
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Public spending on health (share of GDP): 1.4% (2004) Medical care: 28 physicians per 100,000 residents (2000-2004) Infant mortality: Total: 95.74 deaths/1,000 births; males: 101.83 deaths/1,000 births; females: 89.28 deaths/1,000 births (2008 est.) Child malnutrition: 29% of children under the age of 5 (1996-2005) HIV/AIDS prevalence rate (>15 years of age): 5.4% (2003 est.) HIV/AIDS sufferers: 3.6 million (2003 est.) HIV/AIDS deaths: 310,000 (2003 est.) Life expectancy: Total population: 46.53 years; males: 45.78 years; females: 47.32 years (2008 est.)

Nigerias public medical care is inadequate, and most people cannot afford high-quality treatment or medications. Broad-based prevention and educational efforts are limited to initiatives undertaken in cooperation with international organizations (e.g. polio vaccination campaigns with WHO and UNICEF, HIV/AIDS education with USAID, DFID, GTZ and other donors).

Participants

Possible participants include organizations for development cooperation (GTZ, CIM etc.), chambers of commerce, trade associations, trade unions, ministries (Ministry of Industry, Ministry of Small and Medium-Sized Enterprises) and political foundations (such as the Friedrich Ebert Foundation, the Friedrich Naumann Foundation and the Konrad Adenauer Foundation). NDP Nigeria http://www.ng.undp.org/ USAID http://www.usaid.gov/ng/ WHO http://www.who.int/countries/nga/en/ GTZ Nigeria http://www.gtz.de/en/weltweit/afrika/594.htm Unicef http://www.unicef.de Opportunities and risks related to health initiatives

Foreign employers are expected to cover the costs of medical care and medications for their employees. Companies that want to provide their own health services need to clear this with the responsible Nigerian authorities; Nigeria imposes strict standards in this regard, particularly for importing medications (not approved in Nigeria) and for working in healthcare professions. Although the government supports vaccination campaigns in accordance with international standards (WHO etc.), some Nigerian traditionalists view vaccinations with skepticism, reservations that are sometimes shared by local policymakers. The topic of HIV/AIDS is subject to widespread prejudice and taboos in Nigeria. Accordingly, a great deal of persuasion is required if, for example, a company wants to get involved in prevention efforts and education in the surrounding community. It is particularly important to make sure that those who volunteer to be tested are not stigmatized, but instead offered help and support in the event of a positive result. When health initiatives are launched in northern Nigeria, it is important to remember the role of Islam in societys expectations.

Company examples

As a rule, German employers cover their employees expenses for medical care and medications. Julius Berger Nigeria also offers its employees and their families access to the companys clinic in Abuja.
Randstad Deutschland GmbH & Co.KG

CSR WeltWeit case study (German): VSO Voluntary Service Overseas

Political involvement
Basic information
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Voting rights: 18 years of age, universal Freedom of the press: Ranks 131st of 169 (2007)

As a young democracy that was established after years of military rule, Nigeria is regularly confronted with threats to its security and the stability of the political order. Again and again, religious tensions and unrest between ethnic and social groups lead to conflicts. Also a concern is the continuing, often violent conflict in the Niger Delta, in which political factors play a major role.

Companies are not specifically expected to become involved in these issues. Instead, Nigerians want them to contribute to the development of the affected region and create jobs particularly for Nigerian citizens. This has also led to the requirement that companies awarded contracts in the lucrative oil and gas sector must demonstrate that a certain portion of their value creation involves Nigerian suppliers.
Participants

The German political foundations (KAS, FES, HBS) seek to promote political participation. The Association for Development Cooperation (AGEH) and the Civil Peace Service have initiated a program to promote the use of peaceful mechanisms for conflict resolution and to strengthen the role of civil society. With respect to corruption, which has been the focus of intense and serious discussion and policy initiatives for a number of years, mention should be made of the government agencies EFCC (www.efccnigeria.org) and ICPC (www.icpc.gov.ng), as well as the Extractive Industries Transparency Initiative (EITI, along with its Nigerian counterpart NEITI, www.neiti.org.ng). Greater transparency in the crude oil and natural gas sector and an increase in political participation are also goals pursued by the NGO Publish What You Pay (www.pwypnigeria.org).

Opportunities and risks related to political participation There is little opportunity for German companies to become actively involved in this area. Now that safety concerns have led Julius Berger Nigeria to withdraw from two states in the Niger Delta, causing the loss of some 1,000 local jobs, it no longer appears to be an option for companies to provide jobs as an alternative to involvement in militant groups in the delta region.

Participation in society
Basic information

Ethnic groups: More than 250; the following have the most political influence: Hausa and Fulani 29 %, Yoruba 21%, Igbo (Ibo) 18%, Ijaw 10%, Kanuri 4%, Ibibio 3.5%, Tiv 2.5% Particularly in the northern, largely Islamic half of the country, women play little role in political affairs. There are serious cultural and religious obstacles to womens rights. While women in the southern part of Nigeria are more involved in business than women in the north, there too they play only a marginal role in public life. The main opportunities for German companies to make a contribution in this area lie in efforts to support women in their vocational lives. There has been progress in achieving equality for the disabled in Nigeria, thanks in part to related legislation, although it is slow. Little regard is given to the limitations of the physically disabled, for example. Only certain isolated projects offer vocational support for disabled individuals. While traditional prejudices against certain types of disability continue to exist in some regions, Nigerians generally favor efforts to help the disabled. The right to organize is guaranteed in Nigeria, which has led to the development of a strong union movement. However, its significance is basically limited to the formal economy (particularly in the public sector). Nigeria is a multiethnic nation in which the majority held by a given ethnic group applies only to the regional or local level. Almost every part of the country includes several different minority groups. These are factors that should be kept in mind, but they have not led to specific recommendations concerning CSR.
Participants

GTZ is implementing a program to promote womens and childrens rights in the northwestern state of Borno. Since no German companies have begun operating in that state, however, no opportunity has arisen for cooperation. http://www.gtz.de/en/weltweit/afrika/594.htm Opportunities and risks related to efforts to promote participation in society

Especially in the northern half of Nigeria, the treatment of women, children and the disabled is considered a private matter that should not concern outsiders. Since efforts to promote the rights of these groups are rejected as interference in internal affairs, it is crucial to proceed cautiously in this area. This is no doubt one reason why there has been little involvement in these matters on the part of German companies.
Company examples

In particular: vocational support for female employees; funding of charitable facilities for the disabled, childrens homes/orphanages and shelters for the homeless; support for employees rights of codetermination.

Environment
Basic information
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CO2 emissions per capita: 0.9 metric tons (2004) Energy consumption: 16.88 million kWh (2005) Water consumption (households/industry/agriculture): Total: 8.01 km3/year (21%/10%/69%); per capita: 61 m3/year (2000) Hydropower, solar, wind, geothermal energy: 0.7% of primary energy consumption (2005)

Possible areas of activity include recycling, air pollution and soil contamination. Environmental protection is not an area of public concern, except as related to the environmental damage caused by oil production in the Niger Delta. German companies could be helpful by raising awareness and educating the public in their respective areas of influence.
Participants

Possible participants include organizations for development cooperation (GTZ, CIM etc.), chambers of commerce, trade associations, trade unions, ministries (Ministry of Industry, Ministry of Small and Medium-Sized Enterprises) and political foundations (such as the Friedrich Ebert Foundation, the Friedrich Naumann Foundation and the Konrad Adenauer Foundation). GTZ Nigeria http://www.gtz.de/en/weltweit/afrika/594.htm CIM Nigeria http://www.cimonline.de/en/weltweit/271.asp German-Nigerian Chamber of Industry and Commerce http://www.ahk.de/index.php?id=nigeria Konrad Adenauer Foundation, Nigeria office http://www.kas.de/proj/home/home/33/2/index.html

Opportunities and risks related to environmental initiatives German companies can be most helpful by raising awareness and educating the public in their respective areas of influence. Lahmeyer International, for example, participated in an exhibition on renewable sources of energy organized by the German Embassy, which was favorably received by the Nigerian government. Renewable sources of energy are an aspect of the energy partnership that has been established between Nigeria and Germany. The Heinrich Bll Foundation, located in Lagos, addresses environmental issues and climate change. On the Nigerian side, environmental issues are under the purview of the National Environmental Standards and Regulations Enforcement Agency (NESREA), which is part of the Ministry of the Environment. Other important actors are the Council for Renewable Energy in Nigeria (CREN) and the NGO Environmental Rights Action.
Company examples Randstad Deutschland GmbH & Co.KG

CSR WeltWeit case study (German): VSO Voluntary Service Overseas

Other
Promoting sports activities is a way of reaching out to all of a companys employees and defusing religious tensions and other potential sources of conflict.