Chams City shuts down: The Killing of Entrepreneurship in Nigeria

By  |  1 Comment

Renowned Nigerian digital mall acclaimed to be the only digital mall with the largest number of PCs in a single location, Chams City, has closed down its operations in all locations in the country due to the inability of the Nigerian government to protect it from a bureaucratic onslaught from the National Identity Management Commission (NIMC).  

According to reports reaching enterprise54, the closure became unavoidable as a result of government’s failure in ensuring that NIMC honors the concession it had with Chams Plc in 2007 over the handling of the country’s multiple challenges associated with the substantial registration of Nigerians in the National ID card project.

Chams City, a subsidiary of Chams Plc (a private information and communications technology (ICT) firm providing digital and virtual services in Nigeria since 1985) was created in 2009, two years after Chams Plc won a bid to develop and syndicate the process of identity management during Chief Olusegun Obasanjo’s presidency in 2007. 

Having won the bid, Chams went to the Nigerian Stock Exchange (NSE) and raised N8.4 billion from the capital market in addition to the company’s savings of N800 million, making a total of N9.2 billion. The money was invested in building ChamsCity registration centres in Abuja, Port Harcourt, Benin City, and Lagos. The centres were equipped with computer systems, with each having over 1,000 computer systems.

Sadly, all these investments, employment opportunities, economic and social reformation worth N9.2 billion naira are about to kissed goodbye because the inability to convert the concession of 2007 to contract due to the monetary interests of some officials has forced Chams into bankruptcy and can no longer stay afloat.

According to Group Managing Director, Chams Plc, Sir Demola Aladekomo, who remarked that the government’s inability to protect Chams from the onslaught of the NIMC management clearly portrays Nigeria as “a nation that kills its own.”

He said that corruption and vested interests killed the digital mall. In his words, he said:

“Shareholders N9.2b wasted for pecuniary interests of converting a concession to contracts. May God help Nigeria. We tried, we begged, we did our best to protect a Concession we won after a major international tender process.”

While it might be a serious claim to prove that the inability of the concession reached in 2007 to metamorphose into a contract is because of the pecuniary interest of some powers-that-be in the NIMC, the truth however, is that this breakdown of agreement clearly reveals the lackadaisical stance of the Nigerian government to private enterprises. For all its worth, the government should have ensured that a promising enterprise like the Chams which has been globally recognised, stay afloat and continue as a beacon of hope to entrepreneurs and investors.
However, the Nigerian government in its characteristic manner just flushed the last bit of hope down the sink.  
 
This will surely go a long way to affect the decisions of investors (both foreign and local). Investors that have been looking to enter into mutually beneficial businesses will now look to other countries where they don’t have to fear government backlash to do business with as a result of this costly oversight.

The truth is, the Nigerian government has done very little to ensure that entrepreneurs and SME owners are given the “freedom” needed to grow and scale favorably through access to adequate support systems and infrastructures.

There have been cases of poor management of entrepreneurial funds. Just recently, a veteran Nigerian actor cried out to the Nigerian government to investigate the sum of $200 million released by the past administration to assist the movie-making industry. He (Mr. Larry Williams) urged President Muhammadu Buhari to probe a certain $200 million purportedly placed under BoI’s management by Jonathan, for disbursement to practitioners in the entertainment industry.

If this high-handedness continues, the implication of this is not farfetched; the Nigerian economy might be on a jolly ride to oblivion. It needs no further reiteration that entrepreneurship stimulates the growth of any economy and enhances the global outlook (as Chams City clearly did) of a country when given the required support and space to thrive. Entrepreneurs are vital parts of any economy contributing to improved living standards, bringing about substantial local capital generation and most importantly employment opportunities and social reformations.

In a time when the country is seriously looking to diversify its economy away from crude oil, it will really be a wise decision for the government to include entrepreneurial development in the core of its diversification. The numbers are there to prove that entrepreneurship remains a gold mine waiting to be fully explored by the Nigerian government. Even at a time when it had not been given full attention, the agricultural  industry contributed 23.77 per cent of the country’s GDP and the fashion industry added  N380 billion into the national coffers annually. The entertainment industry also has gone to prove how dexterous Nigerians can be with it rating as the second largest movie industry in the world beating America’s Hollywood.

The Nigerian government needs to stop “killing its own” and give wings to entrepreneurs to steer Nigeria to an economic and social el dorado. 



 

 







 

 

 

happywheels

I'm interested in stories, news and opportunities for African entrepreneurs. Be it tech, fashion, SMEs; breaking entrepreneurship stories is the next best thing that can happen to me, after Jollof

1 Comment

  1. Pingback: Control Risk reveals corruption index in African entrepreneurship ecosystem | Uganda Startups, Business Advice, Entrepreneurs, Business Ideas and Resources

Leave a Reply

Your email address will not be published. Required fields are marked *