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".

Deuces

Friday, January 24, 2014

Want to create jobs? throw that "Owambe"

credit:olabisisalis.blogspot.com 



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?

Deuces.

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.



Deuces. 


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

Conclusion
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. 
Deuces

Sunday, December 15, 2013

Re-inventing the Civil Service

civ·il serv·ice
noun
the permanent professional branches of a government's administration, excluding military and judicial branches and elected politicians.
Numerous articles have been written on how Nigeria's civil service is a significant contributor to the Country’s poor state and how it has aided the entrenchment of corruption in our society. To understand the implication of this charge, the role of the civil service should be understood.
What is the Civil Service?
Some definitions of the civil service include:
E.N Gladden: Civil Service is a professional body of neutral experts dedicated to serve the nation irrespective of their own gain and without reference to party- political views

F.A Ogg: It is the great body of men and women that translates law into action from one end of the country to the other and brings the national government into its daily contacts with the rank and file of the country 
The textbook characteristics of the Civil Service include: professionalism, neutrality, anonymity, impartiality, service and accountability.
 Reality versus Theory
Nigeria's civil service does not exhibit above characteristics neither do the definitions apply to it.  Although,characteristics such as neutrality and impartiality are impossible, countries such as Australia and New Zealand have been able to develop systems that recognize the human factor but still make it work whilst patronage and deference to the government in power is the status quo for our civil service.
Professionalism and service are lacking in Nigeria’s civil service. Recall your last experience with a civil servant (trying to get your driver's license, process your passport, sign off on a letter, get a certificate of occupancy etc.). The blasé attitude to work is obvious. The civil service is responsible for formulating and implementing policies. A nation cannot progress if civil servants responsible for policy are unable to conceive practical and original policies and are unprofessional. For instance, a civil servant in the Ministry of works believes that solution to the disrepair of federal roads is to introduce a tolling policy though allocations for road maintenance is provided in annual budgets.  Also consider the 2013 budget where 200 million Naira each was allocated for generators in countries with constant electricity like the UK and UAE. If that was the only error, it would be a clear case of enrichment. The height of mental laziness was the same amounts were allocated to different countries with different currencies and tariffs. Read the story here and here

The principle of anonymity (civil servants are not held responsible for actions or inactions) promotes incompetence. This principle  makes it difficult to hold civil servants accountable because they are not elected and have tenure (job security) while the elected official bears the consequences (if any) for actions. An example is the unspent funds for the Health ministry that led to the resignation and prosecution of the health minister.  This attribute may also be responsible for embedding corruption in the country. Whilst both military and democratic governments have played their parts in establishing corruption, these governments were enabled by civil servants “who know and work” the system. The lack of accountability and no consequences for actions of civil servants has been a disservice to Nigerians. 
On the other hand, the structure and design of the civil service is demotivating. The work spaces do not encourage productivity, there are no performance metrics- this makes it possible for a civil servant to do nothing between 9-5 or abscond from work- and for the junior cadre, their take home pay can't take them home. Yet, a significant portion of State and Federal Budgets  is spent on overheads like salaries, maintenance and training

Why should we care and what can we do?
Nigeria’s development lies in the hands of civil servants as they are the delivery medium at schools, hospitals, ministry of works, ministry of housing etc. so we should care because the actions and inactions of civil servants affect citizens directly. For instance, a tolling policy means that anyone plying the Lagos- Ibadan route would include tolls in their budget; epileptic power supply has caused maintenance of generators the number one expense for families (probably before food).  

How do we solve a problem like the Nigerian Civil Service.
In conclusion

In addition to streamlining the roles of ministries, service charters for each ministry with clear consequences for service failures should be published. For instance, A state's hospital's service charter can be: attend to a patient within 30 minutes of arrival in non-life threatening cases. For the ministry of Commerce it can be: application for a business permit should be treated in 48 hours etc.  
Citizens should be sensitized on their rights and obligations in their relations with civil servants and examples should be made of offending staff. 
Procurement procedures should be transparent and there should be real Freedom of Information. The affordable cost of the Internet allows for transparency in procurement and freedom of information.
The Judiciary also has a part to play in revising laws so that punishment is commensurate with offences. Recall the Pension scam where the civil servant was fined N750, 000 and compare to the phone thief who was sentenced to death. Nigeria’s law code appears to prefer white-collar crimes to physical crimes
Finally, the Federal character principle should be abolished. Federal character does more harm than good by promoting a false sense of equality over merit. Employing or promoting someone from a certain region or local government because that position is slated for their local government breeds more unprofessionalism and no accountability.
If the nation wants to retain the equality the principle purportedly gives, it should be anywhere else but the civil service and security forces.
Deuces
Further reading:

Definition of week
“We weres”- (we  were there before you and would be there after you have gone):  
A civil servant who  believes he is not accountable to anyone and therefore resists change and progress



Friday, November 29, 2013

Reading Assignments

Hi all, 
*passing by*
Thought to share these 2 articles that succinctly describe the mental laziness of our civil servants and effects of impunity in our society
Read the articles here and here 
Hmmmm. 

Deuces 

Thursday, November 28, 2013

Between a MINT and a BRIC


Nigeria and India’s population figures in their respective continents have accorded them powerhouse status- Nigeria is MINT while India is a BRIC and the relations between them have been cordial. Recently, Nigeria-India relations was shaken when a Nigerian was murdered in Gao,India. I was listening to a radio commentary on the murder and the comments by an Indian Minister describing Nigerians as a cancer after protests by Nigerians in that community. A commentator noted that there was no difference between Nigeria and India and Nigerians resident in India should return home. I was surprised that the listening public vehemently disagreed with the remark.
I submit that Indians and Nigerians are very similar in shared experiences, attitudes, values and living conditions. For instance, on issues that would require explanation to an European, American or Chinese, my Indian friends understood immediately. I also remember when an Indian tried to rip me off. When I told him I was Nigerian, he refunded my money. Even our communication patterns are similar. As Nigerians we are not wired to keep it short and simple, I have discovered same with the Indians I interact with. 
A colleague once mentioned to me that Africans especially Nigerians underestimate the level of development that has occurred in the continent. He noted that though Africa is far behind, there is a semblance of organization around our under-development.  He cited the example of Victoria Island and Ajegunle where you can differentiate uptown and downtown. In India there is no such organization, beside a castle is a shack. Another colleague on a work-related visit to China recalled when she and 3 other colleagues (Pakistani, Indian and Indonesian) were lost in China. The Indonesian was frantic whilst the other 3 had the what-is-the-worst-that-can-happen. To buttress my belief that we are similar below are comparisons from reports and studies on India and Nigeria
Metric

Nigeria
India
Population
Approx. 170 million
 Approx. 1.2 billion
Colonial Power
 Britain
 Britain
 System of government 
 Presidential 
 Mix of presidential and parliamentary
Electricity
 According to Nigeria’s Minister about 70% of the population have no access to electricity i.e about 120 million people
Income Category
 Lower middle income
Lower middle income
Year of Independence  
 1960
1947
World Bank Ease of doing Business ranking   
 134/189
147/189


Purchasing Power Parity: India does better
In simple terms, PPP is “the rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in that country” (IMF definition). The PPP exchange rate is the rate at which the currency of one country would have to be converted into that of another country to but the same amount of goods and services in each country. The idea is all things being equal,  a bottle of coke in India should cost the same as in Nigeria. Some calculations go into determining PPP between countries but for this post, simple mathematics would suffice. In India the average price of 33cl Coca-Cola is 20 rupees. In Nigeria,33cl of Coke costs 24 rupees

Bad roads everywhere
In both countries, roads are the major means of transportation for people and goods and are in dire need of repair. According to this Deloitte report, 10% of India’s roads are motorable with poor connectivity to hinterland. This lack of access is a reason that has been adduced for India’s slow development rate. Nigeria’s story is also similar. According to PWC’s Africa’s Gearing Up report, only ¾ of Federal roads are in a fair state (Nigeria’s road network comprises 32100 km of Federal roads, 30,900 of State roads and 132,000km of local government roads). CIA world report notes that of Nigeria’s 193, 200km roads, only 28, 980 km is paved.

Nigeria and India rank poorly on the Liveability index
 The Economist Intelligence Unit’s (EIU) Liveability index ranks 140 cities on stability, healthcare, culture and environment, education and infrastructure. In 2011, New Delhi ranked 113, Mumbai - 118 and Lagos ranked 137. Compared to other BRIC nations, India is the worst (Beijing -72, Moscow-70, Rio de Janeiro – 92)


Systemic corruption abounds
Corruption is systemic in both India and Nigeria. On Transparency International’s Corruption Perception Index, India ranks 94/176 while Nigeria ranks 137/176.  Government Institutions in both countries are highly corrupt and the price paid for corruption is very high in terms of lost opportunities to develop. A friend recalled his experience at India’s immigration and same scenario would have occurred in Lagos.

The difference between India and Nigeria is six and half a dozen. However,India has developed a niche in Engineering and also developed healthcare tourism and it is a possibility that Nigeria will fare worse if her population was over a billion. In the words of the commentator, why leave one shack for another? Nigeria is just 170 million.  Isn’t it easier to compete with 170 million people than 1 billion people?

Deuces. 

P.S:Lord Lugard- Nigeria’s first governor general was born in India and also served in India

P.P.S: An interesting study would be the effects of British Colonial rule on attitudes of both Indians and Nigerians. For instance after the British left India, did Indian elites take over and become Ogas like their Nigerian counterparts? Why was India divided into India and Pakistan at Independence, yet Biafra was not “allowed” to secede from Nigeria?