Friday, January 31, 2014

This Nigeria's budget

Nigeria's budget proposals in the last  2 years shows that the present government's transformation agenda exists in name only. For a government that wants to "cut down the cost of governance and re-engineer the economic sector" the budget tells a different story. The country's N4.64 trillion budget proposal where N3.7 trillion is allocated to recurrent expenditure and 1.1 to capital expenditure says that:

  • The government has no clear direction of how to achieve its objectives . For a government that eloquently states its purpose, implementation appears to be a challenge. Other countries such as Australia and Malaysia have outcome based budgets tied to specific programmes of each government agency. In Nigeria, on average, ministries allocate N29 million for honorarium, N 20 million for international training,  N100 million for miscellaneous  and budgets for refreshments, anniversaries and celebrations!
  • The government is not willing to plug the leakages and waste in the system. In the budget of most ministries and agencies,the going cost for a photocopier is N 2 million and N5 million for computers. Ministries pay Banks other charges besides interests and some charges are as high as N12million. For the Navy it is NGN 26, 240, 243. Let's look at the Auditor- general's office where scanners would cost 4.974, 310; Photocopier- 19, 334, 548; computers- 141, 393, 443. Vehicles 550 million, office furniture 370,874, 150, fire fighting equipment- 6,539, 498. Loss on foreign exchange is catered for by Ministries- for Police Affairs it is N13,643, 684. Still on the "Miscellaneous" line item- does anyone know what the comprises miscellaneous?
  • The budget has no plan to impact the lives of Nigerians and benefits a few businessmen. The budget is full of frivolities that have no direct impact on benefiting the people. For instance a ministry (not the sports ministry) has a budget of 42 million for "sports activities" while the budget for sports in a federal government school is N100, 000. Who needs sports more?
  • The government is not willing to address the problem of a bloated civil service and promotes the duplication of duties: Most of the Ministries, Departments and Agencies (MDAs) perform similar functions. For instance, in Kaduna, there is a National Eye Center and a National Ear Centre with different budgets. Is it not possible for the centers to exist in the Federal hospital in Kaduna? The Ministry of Science and Technology has 77 departments. These 77 departments can be merged into 10 departments and would still function. The Police and Military have budgets for Barracks rehabilitation yet a presidential committee for the rehabilitation of barracks with a budget of N1.9 billion for operating expenses.
  • The Civil Service lacks professionalism: The budget reveals deep mental laziness that exists in the civil service. The budget for the Ministry of Foreign Affairs is a perfect example. Missions in countries that have 24/7 electricity also budget for generator fuel costs and the budget is the same for most missions. How is possible that fuel would cost exactly N1, 572, 932 in Athens (Greece), Atlanta (USA) and Bangkok (Thailand)?
The solution to this outrageous budget is simple, the NASS should only approve items of the budget that would enable MDAs carry out their duties and pay salaries. Budgets for newspapers, traveling and other irrelevant items should not be approved.The government should walk its talk and begin a budgeting system that ties expenses to projects that would enable it achieve its  goal of developing agriculture and developing alternative sources of income for the country and a favorable environment for job creation. This budget definitely does not support "the push in agriculture" and  is not "kick-starting the housing sector".


Friday, January 24, 2014

Want to create jobs? throw that "Owambe" 

Nigerians are fun loving and enjoy a good party. We usually go the extra mile regardless of our economic status to ensure our guests are well-entertained and our event is remembered- even if we have to borrow. A Nigerian may not help get on your feet financially but would willingly contribute to your party. I also know people who are unable to pay school fees yet buy Aso-ebi (a common fabric/cloth invitees are expected  buy and wear for a ceremony, not buying is translated to being stingy, and not holding the celebrant in high esteem). I remember a movie released years ago “died wretched, buried in 3.2 million casket”; that movie captured our “owambe” (it is rocking there) nature in the midst of poverty. This nature has created an industry that is thriving and affordable for all pockets. Parties in Nigeria have progressed from blocking the roads and streets, renting tents, tables and chairs (some still do) to renting halls, decorating chairs with sashes and importing décor items; from alases (women who cook usually at the host’s house and are paid) to caterers who charge per plate and bring their own waiters..  
It is no longer fashionable to plan your event yourself, professional planners can plan your baby’s naming ceremony, your one-year old’s birthday to your great grandmother’s  funeral. I submit that this industry has contributed to the emerging nouveau-riche middle class in Nigeria.
A regular party must have a venue, food, drinks, decor, music and MC. Nice additions are souvenirs, bouncers (who add the feeling of exclusivity), aso-ebi, small chops (hors d’oeuvres/ finger foods) and desserts. An average party (read birthday/ small wedding) costs about 1 million ($6250)  to 2.5 million (15,625). Venues cost between 300,000($1900) to 2.5 million for a venue. Your event may last for 10-15 hours and your cash flow can reduced in the range of thousands to millions. Businesspersons have replaced family members as servers, ushers and waiters.  The sector has service boys, washers, tailors dedicated to sewing decor materials- sashes etc, flower importers, lightings and effects, bouncers, more tailors ( who would sew the express aso-ebis), make-up artists, Music bands, Alagas( women who coordinate the traditional ceremonies)  ushers and image consultants. Real Estate has also grown as people build event centers instead of houses ( it is more lucrative )
This is good because it has(and still) generates employment for people and showcases our enterprising nature. It is not unusual to hear someone who has been unable to get a 9-5 job tell you they now sew or make hats, or do party decorations. It also creates minimum-paying jobs for lowly-skilled people because on average to execute a professional planned party you would need about 40-80 people. This industry also exhibits the human fear for lack and capitalist tendencies with no trickle down effects   are high. For instance, a caterer's profit from an event may be 300,000 but what she would pay the staff who worked with her on that event (say 10 service boys and 6 Alases) may be 50,000. At the end of the day she grows but they don't. Thereby, the circle of poverty would persist for those people even though they have new sources of income. The upside for these people is that they can work with different people i.e. freelance and also learn skills they would need to run their own businesses. 
This being said, party planners, tailors, etc. need to imbibe excellence and professionalism. At a party some people may be served whilst others are ignored. The need to make profits should not promote the use of inferior items.

In conclusion, it is good to see people flourishing, being creative and refusing to be limited by the lack of formal jobs. Over-time, there would be more structure and standards-setting in the industry. For instance party planners now have an association, soon we may see one for tailors and caterers and the lower skilled staff too may form a union demanding for better pay! Who knows?


Wednesday, January 15, 2014

Think on this.

Hans Rosling in this TED talk discusses life expectancy, fertility rates and incomes between the global South and North from the 60s to 2000s. The video is very animated, lively and makes statistics  lucid,enjoyable and fun. It is a captivating 19 minutes that you would learn from.   

The first part of the video discusses how fertility and life expectancy rates have changed among countries.  His thesis is that gap in fertility rates and life expectancy in the world, perceived as We (western world, long life in small family) and Them ( third world in large family) is closing. 
Rosling makes an interesting assertion at 06:08 on how the gap closed between the industrialized nations and nations in Asia and Latin America (but not Africa- that is my deduction) 
He said the changes in Asia occurred because there was social change (sound education especially for girls, decrease in fertility rates)  before  economic change. 
I think policy makers that focus on economic investments into Africa at the expense of social, cultural and values changes can learn a lesson or two.


Tuesday, January 07, 2014

Government is working! Says who?

Happy New Year people….

Nigeria's ongoing democracy has birthed a new mindset that tolerates opacity and non-accountability in governance. The mentality is "at least the government is working” so no questions should be asked. This outlook is a consequence of years of military rule, where military governments with the exception of a few developed the states they ruled. 1999-till date has produced governors and presidents- some military apologists, some selected, some by accident and others by pity. These rulers emerged with no plans on how to govern and a lack of direction that has created policies that adversely affect the people. Examples include, ill timed increases in fuel prices between 2000 to 2012, the Odi massacre, policy reversals- e.g civil service monetization, the removal of fuel subsidy in 2012 without putting in place cushions and the new automotive policy. This lack of focus also causes leaders to throw money at problems rather than address their root cause. An example is the Niger-Delta Amnesty programme that has rewarded impunity and created the sense of entitlement  in supposed ex-militants.
A few roads are commissioned, new hospitals are built, publicity is generated in the media and that governor is doing well. A governor buys roasted plantains from the street hawker, acts like an emergency victim, sacks hospital staff, appears populist and he is working!
Yet this "work" does not translate into better lives for you and me. We are accustomed to government's non-performance that we excessively praise those who do what they are elected for without considering the costs. This begs the question of how to identify an impactful government.  7 point agendas would mean much if the government drilled down to what it entails.

Is this government is working? How?
It is obvious that "government is working" is driven by perception. Lagos State is a case in point. To some residents, the current government is the best thing that has happened to Lagos State while to others, the government is elitist and the cost of transformation is exorbitant. Projects costs, financing and payback for these projects are shrouded in secrecy causing speculations on the true cost-benefit of these projects. In addition to this are communities such as Ayobo and Ajegunle almost neglected by the government. 
Is a government working if a N2 billion road is constructed for 5 billion? Is it working if new and imported equipment for the State hospital break down after 3 months? Is it working if the roads constructed by the Local government fall into disrepair in 1 month? Is it working if unemployed youths are dashed N10, 000 every month?
Let's get granular here. What standards should define a government that works? Other climes such as the US & UK have been able to create benchmarks for their local government. To catch up with other continents especially Asia, provision of services and formulation of policies that enable citizens be their best is key. Infrastructure and development have to become a given. I have met students who cannot use a computer and some who think that all that the Internet is meant for is entertainment. These are the students that would compete with contemporaries from Asia, Europe and America who already create apps. The world has become knowledge based while we still argue on how flawed our systems are and engage in hand wringing. The inaction by governments at all levels has created a cycle of “blame government, do not think, find ways to cut the system, survive, die etc.” attitude.

A working government:
Identifies the needs of the people through town halls meetings, participatory budgeting  ` openness and tailors its programmes to meet those needs. A performing government should create goals and priorities as determined by the people. As strange as it may appear, Kano state may be on to something with its sponsoring of marriages within the State.

A simple process would be:

Goal: Attract investors
Actions: Create industrial areas; give reasonable tax concessions, Public-Private Partnership
Measures: No 5 rank in Cost of doing business, seamless registration and establishment of business, clear expectations and profits on government and business sides on PPP projects
Outcome: Increase in revenue by 70% in year 4

Goal: Well-grounded holistic education at primary and secondary school levels
Actions: Teacher training and retraining, extra-curricular activities to develop students use of ICT as a teaching tool, rigorous curriculum.
Measures: 80% teacher quality, quality of exhibitions and results at impromptu inter-school competitions, ranking in world educational rankings
Outcome: 15% drop out rate, 80% pass rate into secondary schools, universities and technical colleges

Let us examine “Ranka dede” State. The state with a population of 10 million has 20 local government areas, 10,000 hectares of land, 7000 kilometers of unpaved roads, no public transportation system, 100 secondary and primary schools, 4 general hospitals and 60 health centers. The Federal allocation to the state is NGN 20 billion monthly and the state internally generated revenue (IGR) is 19 billion monthly. 5 billion is spent on salaries and other personnel costs. 500,000 pupils are currently in primary school and 700,000 in secondary school. The state has a primary school drop out rate of 40% and Secondary education drop out rate of 45%. A new governor is elected in 2015 and his focus is to develop the state by focusing on health and education.

We can unambiguously say the government has performed if:

1) 5000 km of the unpaved roads are fixed and maintained at true uninflected costs. First, the process of bidding and awarding the contracts for construction is fair and transparent and the process is available for those who wish to access it
2) Drop out rates are drastically reduced to 7-10% and SSCE pass rates are at 80%
3) Patient:Doctor ratio is 1:1000 per WHO standards. In Nigeria, the current ratio s 1:6800, In “Ranka dede” state the ratio becomes 1: 950
4) Processes around setting up and running SMEs is not inhibitive
5) Access to government information
6) Organized & functioning public transportation system is deployed; private companies can operate taxis and the government can run a bus transit system or monitor a private organization to run such a system. If required additional means of transportation such as rail and motorways can be embarked upon.
7) Reduced crime rates and security of lives and property measured by the sense of safety residents feel

A performing government is lean (in terms of cost), increases transparency, plugs waste in the system and creates an enabling environment (through its policies) for the non-public sector to thrive. It creates values for citizens such that they do not have to rely on the government for survival or view it as the main means of survival for them. The government is not the lord that rewards those who are loyal to it and promotes mediocrity. Governments exist to create measurable value in the lives of all citizens.