Friday, February 28, 2014

Counting the cost of government's inefficiencies: electricity

A significant expense incurred by households is the cost of fuel be it kerosene for the poor or petrol and diesel for the middle class and the wealthy. 
This expense ranks higher than food. Thus, in Nigeria basic needs have become fuel,shelter and food. Nigeria's electricity situation typifies the effect of  successive governments' inefficiency, indifference,inaction and embezzlement of public funds. Since 2000, $24 billion  ($16 billion under Obasanjo and $8 billion under Jonathan) has been expended on power reforms with no improved power supply for Nigerians. 
Nigeria currently generates 3919 megawatts of electricity while 40,000 megawatts is needed for steady power supply. Till date,no one has accounted or refunded the billions invested in the power sector. The saying "money down the drain" aptly describes Nigeria's power sector. The result is that Nigerians provide power for themselves at huge costs.
Informal research shows that households spend between N10,000 ($62) to N100,000 ( $620) on diesel and petrol weekly. This is separate from the  cost of maintaining the generators. Families also supplement with inverters and rationing the use of generators. For instance, the generator may be run from 7pm to 1am.  
For businesses too, power forms a huge chunk of their operating costs and these costs are transferred to customers. For instance, some businesses and organizations  spend between 9 million naira to 660 million yearly on diesel,
According to these articles Nigerians spent between  N1.6 trillion ($10 billion) to N3.5 trillion ($21 billion) on generators  between 2011 and 2012 
Remarkably, Nigerians and organizations are not the only ones that bear the brunt of lack of electricity. The government does too!
In the 2014 budget, for the 32 ministeries, 15 commissions and 783 Departments and Agencies that presented their budgets over 5 billion naira  would be spent on fuel ( the cost of maintaining the generators is different). 

What is the opportunity cost of this N5 billion budgeted for diesel?

  •  5 substations
  • Payment for the  $24 million contract between Nigeria's government and Manitoba (The organization managing Transmission Company of Nigeria on behalf of the government) freeing the allocated money for other uses
  • Investment as the federal government's share in the Sovereign Wealth Fund
  •  Repair  Lagos-Ibadan Expressway, the government plans to toll.

Communities and neighborhoods also need to reassess the individual cost of generating power and pool their resources together. Lekki Phase 1 estate is an example.  There are about 1000 houses in that area. Let us assume the average cost per household on weekly diesel/petrol is N40,000, weekly Lekki residents would spend 40 million on fuel. Yearly they would spend 2 billion on fuel 

What would N2 billion ($12 million) do for Lekki residents?

  • It would build 2 substations that would distribute and transmit power for the estate (it costs about $6 million to build a substation)
  • It would pay for 1,700,000 units  of gas to power the substations (at $7 per unit) 
  • It would generate 96 Megawatts of power. According to the DG of Bureau of Public Enterprises, it costs $1.3 million to generate 1 megawatt of power

The 1.6 trillion Nigerians spent on fueling generators in 2012 would pay for the $7.5 billion required to  5000 megawatts of electricity with money left over for contributors. 

Apart from the alternative uses of the money spent on fuel,the impact of the pollution from generators is not measurable. We spend money that we do not need to spend on health issues.
As Nigerians we need to rethink what we want from our government and stop enabling the  current apathy towards performance. Silence, indifference and i-better-pass-my neighbor is expensive, very expensive. 

Monday, February 17, 2014

Good policy/ Bad politics: Osun education reforms

Credit: Mike Asukwo
Osun State's education reforms patterned after K-12 (US education system) is an interesting study on the connection between policy and politics. 
In 2011, the government held a summit where the reforms were planned and  implementation commenced in October 2013. For a policy that reads well on paper, implementation has met resistance because  as the saying goes, the devil is in the details.

The policy aims to revitalize the educational system in the state by reclassifying schools, building new school structures, merging  schools, having a standard uniform for all schools (the rationale for the uniform is to create employment for the state- owned tailoring factory and schools would be differentiated by badges on their caps) and provision of school lunch to elementary school students.

According to the Deputy Governor, this policy exists  to improve the position of Osun State in comparison with other States in student achievement (it is reported that Osun State Students were under-performing in national examinations and enrollment rate into universities was low), to maximise teaching resources (some schools do not have the population and resources to stand on their own), to boost agriculture and employment in the State through the one-uniform policy and provision of school meals. The Deputy Governor also claims that the one-uniform policy is in line what the US and UK practice.

Below compares the Federal system with the Osun system  

Pry 1-6 
(Ages 6-10/11)
Elementary school 
(Ages 6-9)
Grades 1-4
(Ages 11/12- 14/15)
Middle School 
(Ages 10-14)
Grades 5-9
(Ages 16-18)
High School
(Ages 15-17)
Grades 10-12

It is clear that the government put some thought into this policy. However, implementation is the cause of  religious tension in the State. The merger of schools was done without regard for religious and gender sensitivities and this is threatening the reforms. I have been unable to get the full list of schools that were merged but in October 2013, there were protests when 2 single sex schools were merged to become a mixed school. More problems emerged when students of Baptist High School, Iwo and an unidentified muslim school were merged. In protest, the students came to school in religious attires. The merger of schools without regard for these emotional values (religion and gender) has  created a situation of good policy/ bad politics. 

In the field of policy, this occurs when  the political feasibility and acceptance of a policy is not properly thought out and managed such that the politics overshadows the policy. A related issue on the merger of the schools is the one-uniform policy. The Deputy-Governor noted that schools in  the US and UK  have standard uniforms. That is incorrect because what exists in these countries are basic school wears  and colours that schools mix and match. Some schools have their own school uniforms . The State can still provide employment for her tailors without the one-uniform policy. Schools should be allowed to have their own uniforms because a basis for uniform is identification of students and that should be allowed to stay. 
That the government did not engage, involve and get the buy-in of stakeholders (the faith groups and parents) shows the lack of political management  and the consequence is the resistance to the policy. For a policy that was conceived in 2011, there was enough time for engagement to sell the benefits of changing the system and not force it  on stakeholders. Humans by default are resistant to change –even when it is for their benefit. To discount the values and emotions of people because the schools are public schools and the government has the power to do so is a mistake. 
Dipak Gupta says “when it comes to politics and public policy, we most often make our decisions using our guts and political instincts, which may or maynot involve questions of rationality or self-interest. Thus, emotions is not only legitimate but central to political persuasion".  
It is not to late for the government to re-engage and listen to the various groups and then implement what is agreed. Parents have reasons for enrolling their children in either faith-based or single sex schools. That emotion valid or not should be recognized.  On the other hand, the government’s idea of integrating faith schools thereby encouraging interaction of children of different faiths is also valid. However, it is not the government’s role to force socialization. People would interact without the government’s help-  the Yoruba family culture facilitates that (Yorubas' have Christians, Muslims and non-believers in the same family). The government needs the help of parents and the influencers ( the faith groups) for the mergers to succeed.
In the spirit of adapting US& UK school systems, the government should provide school buses for students. A criticism of the reclassification policy is that students now walk longer distances to school (though the governments says the walking distance is not more than 1km for elementary and middle schools ) and parents are unable to provide for transportation to the new locations. In the US, school buses are available in every school district that pick up and drop off students at certain points, UK& US pupils do not trek to school. 
In conclusion, every government policy should aim to be in the realm of  good policy/ good politics. The education reform of the government is a brilliant idea. The government needs to engage  stakeholders and re-work aspects of the policy. For holistic reforms the government should also focus on teacher training. Systems and structure are nice but the people that deliver education are very important and should be invested in.

Tuesday, February 11, 2014

Death by Convoy

An American life is worth $8.7 million, a Malaysian life, $345, 000 and an Australian life is $2.2 million. The value of a Nigerian life is zero. It is zero because the  government cares little for her citizen both home and abroad. In addition to stifling the potentials of citizens, the government (at all levels) also commits acts of violence against them.  Brutality and  wanton killing of citizens is a norm that should have passed with the Military era. Unfortunately, it has not.  The present crop of "democratic rulers" have imbibed the culture and kill the citizens they are meant to protect through their careless and reckless convoys that are above traffic rules.
Below is a list of accidents caused by government convoys since 2000.

Number dead
Number Injured
Kofo Bucknor- Akerele
Lagos State Deputy Governor
Titi Abubakar
Wife of the Vice-President
No date, 2003
Gbenga Daniel
Ogun State Governor
No date, 2008
Peter Obi
Anambra State Governor
Joshua Dariye
Jos State Governor
Elizabeth Udoudo & 2 children
Oserheim Osunbor
Edo State Governor
Uzoma Okere
Ikedi Ohakim
Imo State Governor
Harry Arogundade
Naval Officer
Eustace Okorie
Jigawa State Governor
Olagunsoye Oyinlola
Osun State Governor
Olusegun Mimiko
Ondo State Governor
Ufuoma Ejenobor
Ikedi Ohakim
Imo State Governor
Adeyemi Ikuforiji
Lagos State Speaker
Ibrahim Shema
Katsina State Governor
Aliyu Babangida
Niger State Governor
Ibrahim Muhammad
Zamfara State Deputy Governor
Emmanuel Uduaghan
Delta State Governor
Adams Oshiomole
Edo State Governor
Abdulaziz Yari
Zamfara State Governor
Diezani Alison- Madueke
Federal Minister
Tanko Al-Makura
Nassarawa State Governor
Patrick Yakowa
Kaduna State Governor
Danjuma Goje
Senator of the Federal Republic
Idris Wada
Kogi State Governor
Ibrahim Dankwambo
Gombe State Governor
Ahmed Musa-Ibeto
Niger State deputy Governor
Idris Wada
Kogi State Governor
Omolewa Ahmed
Kwara State First Lady
Ali Olanusi
Ondo State deputy Governor

It is unfortunate that government, which exists to protect the lives of citizens, is responsible for taking it forcefully without any repercussions. Sadder still is that some of the victims are the aides of these rulers. Yes, a Nigerian life is not worth much but there should be limits. Immunity for government officials should not cover criminal acts like willful manslaughter. Also, protocol officers and drivers not covered by immunity should be prosecuted for any deaths and accidents that occur as a result of their reckless driving. The right to life is a guaranteed right and everyone has just one life to live. It is unfairvery unfair for a ruler to arbitrarily take that life just to show they are the "kings-of the road"