All posts by Nasir Ahmad El-Rufai

Oil Revenue Leakages: Another Chance for Nigeria, By Nasir Ahmad El-Rufai

Nasir El-Rufai

The Presidential Economic Team of 2003 to 2007 which I was privileged to be a member had a running joke – that the NNPC was an independent federal republic on its own totally separate from and way superior to the Nigeria we all worked for! This joke was our way of criticising the way and manner the NNPC not only sells crude oil as an agent on behalf of the government of the federation as in its enabling law, but even then felt entitled to spend as much of the proceeds of sale as it deemed fit.

The NNPC had begun then to be a law unto itself, outside our national laws and above the constitution, hence our joke. Recent revelations of oil revenue leakages have confirmed that this is a joke that has turned into a macabre reality. Our nation’s finances are in grave danger of becoming zero due to the conduct of a rogue institution that has become more powerful than its principal under Jonathan’s watch.

For a country dependent on oil revenues for most of its income, Nigeria cannot claim to have exercised the closest scrutiny on this vital resource. At least not in recent times. As bad as this gross neglect has been, it is surpassed by the failure to seize the moments that have also been presented to the country in recent times to restore some sanity and integrity to the collection and remittance of revenues. The conversation around the sudden explosion in the fuel subsidy payments from N300bn in 2009 to over N2 trillion in 2011, the protests around the removal of petrol subsidy in January 2012, and the subsequent investigations into the scandal regrettably did not coalesce into a new deal on revenue management or sanctions for the beneficiaries of the obvious fraud!

Another such opportunity to clarify compliance with the constitution, law and due process in the collection and remittance of oil revenues has been presented by the rolling revelations made by brother CBN governor Sanusi Lamido Sanusi. It is a moment the whole country should seize, so that public confidence can be restored in the operations of the NNPC and integrity of the revenue remittance process. But to get there and understand the issues clearly, let’s summarise the constitutional position, the law and the factual contentions.

Our constitution is very clear in sections 80, 81, 82 and 162 in requiring that all revenues are to be paid into the federation account for distribution to various tiers of government in accordance with the provisions of the constitution and the revenue allocation act. No institution or person can spend a kobo on fuel subsidy or pipelines repairs from these revenues without the funds being first paid into the federation account, and then subjected to due appropriation by the National Assembly.  Any spending outside this lawful framework is a case of an agent not accounting honestly for proceeds of sale to a principal. In everyday language, that illegal conversion is called theft, pure and simple, and in violation of the constitution. No one, whether it be NNPC or the Jonathan spin-masters should be allowed to obscure this clear legal position.

Now, what are the facts surrounding the latest case of non-remittance of federation revenues?

In a letter to the president in September last year, Sanusi expressed concerns about the non-remittance of $49.804 billion, monies due to the federation account from crude oil sales. Until December when the letter became public, neither the presidency nor the NNPC responded to the issues, believing like every other instance of corruption allegation, the matter will die a natural death over time. Internally, within the Jonathan administration, no clear action was found to have been taken to cross-check the veracity of CBN’s concerns about the NNPC owing the federation account some N8 trillion.

The NNPC demurred only when these concerns became public, insisting it was not owing the federation account. When all the parties – CBN, NNPC and the Federal Ministry of Finance – met to reconcile accounts, it was agreed that indeed some funds had not been accounted for and may need further reconciliation. The outstanding sum amounted to $10.8bn (according to NNPC and Ministry of Finance on one side) or $12bn, according to the CBN. Further to this, the NNPC then came up with another afterthought – that it had spent the $10.8bn on gasoline and kerosene subsidy payments, repairs of vandalised pipelines and operational costs.  It did not appear that anyone believed the NNPC, on its use of the money, its right to withhold the money in the first place and its initial denial of owing the federation account.

The CBN is obviously one of those not buying the NNPC’s explanation. This week, the apex bank raised the figure of non-remitted funds to $20bn, including the $12bn outstanding from the reconciliation. The balance includes $6bn worth of crude oil NNPC shipped for the NPDC its upstream subsidiary, and another $2bn from “third-party” financing.

What has been lost in the emotions unleashed by these series of disclosures are the substance of the issue, and the caveats inserted by the CBN governor. His letter to the president and public statements are drawing attention to the non-remittance or non-repatriation of funds to the Federation Account. There was no claim then that these monies are missing, at least not yet. That will be beyond the CBN’s brief. But as the banker to the government, the CBN is within its mandate to declare what sums it has received in relation to the funds expected. The onus is thus on the NNPC to explain why these monies have not been remitted or why they cannot be remitted, and point to the laws that permit them to so act. Anything other than this is admission of theft of federation account proceeds and the 36 states and their local governments should act to recover the amounts, if the Jonathan administration does not.

It is my view that the NNPC have to quickly refund the amounts or prove the numbers wrong. It cannot take comfort on the brittle ground that the sums said to have not been remitted have fluctuated. It has not convincingly explained why it held on to monies belonging to the Federation Account, and why it used the monies for its own purposes without the lawful authority of appropriation by the National Assembly. Every kobo not credited to the country or not properly accounted for by an agency of the government violates the constitution and the law.

I do not believe that we have sunk so low or that our moral prisms have so contracted as to consider $10bn – nearly a third of the annual federal budget – as too puny to worry about. A kobo of public funds not properly accounted for should bother us, because a person that can steal a penny will steal billions if opportunity presents itself. We should rather aspire to live in a country whose revenues do not leak, leading us free to concentrate on value-for-money in government investments and expenses.

The Federation Account belongs to the federal, state and local governments, and the quantum of the balances it contains should concern every Nigerian. Many of the 36 states are rightly concerned that the explanations offered imply that the NNPC can practically shortchange them at will. The conduct of the NNPC thus distorts the revenue allocation formula, already weighted too much in favor of the Federal Government. It must be in the interest of the FGN and the NNPC not to allow the perception to fester that the NNPC has indeed become a state within a state, protected and reinforced in its law breaking by a corrupt and benefitting Jonathan government.

As a minimum, that would entail thorough scrutiny of the NNPC accounts which have not been audited since 2005, if only to avoid legal entanglements with state government who are at liberty to sue for the non-remitted funds. The National Assembly has to ask the tough questions regarding the legality of the strategic alliance agreements between the NNPC/NPDC and  Atlantic Energy and other fly-by-night ‘indigenous operators’ with not track record other than connections to the Villa. It is a serious matter when a CBN governor goes public with the charge that “these agreements merely serve to transfer revenue due to the Federation into private hands” – yet another clear, more serious case of theft of federation revenues by a private firm, facilitated by the NNPC.

Citizens should put pressure on all elected officials that amidst these contentions, Nigeria will emerge with a transparent, rigorous and effective oil revenue collection and remittance system. While awaiting passage of the much delayed Petroleum Industry Bill, the NNPC should in the interim be compelled to remit all funds first, and submit verifiable claims for reimbursements later, after due appropriation by the National Assembly. In the meantime, we should thank for the CBN and its  courageous governor for providing the facts and figures, and the opportunity to introduce real transparency in the very opaque oil revenue remittance regime of Nigeria. The ball is now in our court to ensure that this case of financial malfeasance is not swept under the Jonathanian table!

Oritsejafor and his bastardisation of CAN, By Nasir Ahmad El-Rufai

Nasir Ahmad El-Rufai

Many in Nigeria today may not remember the name of Cardinal Anthony Olubunmi Okogie, but if there was any opposition to the military regimes of the eighties and nineties, the Christian Association of Nigeria (CAN) under him definitely represented a voice of resistance to those governments’ excesses. At a time when many people kept silent in the face of human rights abuses, Okogie faced down the military government and told them some home truths. It didn’t matter if the victims were Muslims or Christians; it didn’t matter whether they were from the north or south; CAN fought for all Nigerians. Okogie had the moral authority to act, and did so with dignity, to the admiration of all of us.

Okogie’s bravery was not unusual for CAN leaders; if anything, in the turbulent history of this country, there is a proud tradition of leaders of CAN who spoke for and stood by the people of this country. They used their moral authority to defend the rights of all Nigerians even during the most brutal military dictatorships or corrupt and inept civilian administrations. The courage of the likes of Cardinal Anthony Olubunmi Okogie, Archbishop Peter Jasper Akinola, the Reverend Sunday Mbang and Cardinal John Onaiyekan, for instance, are shining examples of faith in action, with compassion for the oppressed and chastisement for the tyrants.

It is a mark of the sad and uncertain times our country faces that we have to be reminded that previous leaders of CAN have used that platform for nobler purposes than we currently see. In spite of the corruption that blights much discourse these days, it is evident that a clear distinction exists between CAN as a body and the individual that leads it. Pastor Ayo Oritsejafor cannot be allowed to conflate himself with CAN. He bears personal accountability for the conduct and utterances that portray him as a messenger of the powerful, or as an active soldier of the ruling party. Except for the informed, the casual observer may mistake Oritsejafor for a minor protocol official of government, so pathetically has he cheapened the erstwhile integrity of the CAN presidency.

Pastor Oritsejafor’s utterances and behaviour amount to repudiation of the moral authority, fair-mindedness and high standing his predecessors invested in that office. While they spoke truth to power in the exalted prophetic tradition, he cossets and pampers the government of the day. He even champions their politics of ethnic and religious division by making unfounded allegations against opposition leaders. How else can any neutral observer rationalize his two calls for General Buhari’s arrest? In contrast, Oritsejafor was dead silent when persons that are Jonathan’s sidekicks threatened the nation with violence if he is not voted president in 2015! The dissonance between the glorious past and now is rather loud.

While Pastor Oritsejafor chose to be a subaltern to power, other men of faith rose to stem division and help the country achieve peace, efforts for which Cardinal John Olorunfemi Onaiyekan and the Sultan of Sokoto were nominated for the Nobel Peace Prize. Such an esteemed global honour is a measurement of leadership quality and character; as distinct from Oritsejafor who prefers earthly gains and ostentatious lifestyle of private jets! Everyone can recall that November morning in 2012 when Oritsejafor accepted the gift of a private jet in the presence of a smiling President Jonathan.

Observers of Oritsejafor’s record should pause and ponder why the Catholic leaders took the recent unprecedented decision to temporarily opt out of CAN! It is not because Christians in Nigeria today are markedly different from those that lived in the days when Okogie, Akinola and Mbang led CAN honourably, it is because the Oritsejafor style has driven the organisation into the ignominious politics of hatred and division.

Due to how sensitive any discourse about religion has become in Nigeria, many have refrained from pointing out the errant ways of Oritsejafor, but if we are to build the Nigeria of our dreams, we must have the courage to point out transgressions against all Nigerians by people masking themselves in religious toga to create strife in the country. The truth is that Oritsejafor is neither a personalization of CAN, nor an example of the compassion, grace and modesty Christianity teaches.

A case of the descent into toxic politics is evident from the statement purportedly issued in CAN’s name in defence of Oritsejafor. The language of the statement is very similar to the gutter language usually spewed out of the Presidential Villa whenever any citizen expresses the right to question the corruption, impunity and incompetence of the Jonathan administration. The sudden attempt to assume the role of political adviser to General Muhammadu Buhari, a person that Oritsejafor has done everything to malign and smear, amounts to everything a religious organisation should not be. When purportedly religious leaders or organisations become brazenly partisan, they should not complain directly and through surrogates when they are responded to in like manner.

God’s work cannot be reduced to petty electoral calculations. Neither should those who claim to be on the Almighty’s mission indulge in base blackmail and falsehood, or encroach on God’s prerogative to bestow grace, provide final justice and avenge wrong.

Let the leaders of faith show good example when they step into the public arena. The merchants of religiosity, those who specialise in distorting the sobriety of faith into wares to be traded for political and commercial favours, should not be allowed to divide our country or to derail the diversity of our creeds and tongues into a reason for strife. Above all else, we are all human, sharing the same biology and deserving to be free and secure, whatever our beliefs and ethnic origins. In the final analysis, the needs and wants of a less privileged Christian destitute in Abia is not that much different from that of a Muslim Almajiri in Zamfara!

Kindergarten President, Childish Handlers, By Nasir Ahmad El-Rufai

Nasir_El_Rufai_717591792

I still recall how one of my sons behaved before going into kindergarten. He did not know how to share toys or food, threw tantrums whenever he failed to get his way or insulted his siblings or sulked when criticized. With years of parental effort at home, and intervention of handlers in nursery school, our son learnt the virtues of sharing, inclusion and getting along with those that he disagreed with.

I guess this is the experience of many parents. I have always wondered what manner of person would resort to abuse, bigotry and division when his or her conduct and utterances are interrogated, instead of simply responding in civilized language. APC chairman Bisi Akande’s characterization of Jonathan as a  kindergarten president explained everything. And surrounded with equally parochial, morally-flexible handlers, one is bound to read the kind of falsehood that emanates from the likes of Reuben Abati from time to time.

It was Aeschylus, the ancient Greek dramatist who said, “In war, truth is the first casualty”. Thank God, despite the provocations of the Dokubos and the Clarks, Nigeria is not at war, but the presidency and presidential hangers-on have distorted democratic politics into some sort of warfare. President Goodluck Jonathan’s response to an interview I granted over the weekend is indicative that truth has become a casualty in his shoddy attempt to belittle the salient issues concerning Nigeria that I spoke about, and the weighty fact that the president is the promoter and apostle of ethnic and religious division of Nigeria, purely for political gains!

For the records, I was featured on Liberty Radio’s Guest of the Week where I spoke on a number of issues, including the fact that the proceeds from crude oil theft (as confirmed by the Bayelsa state governor, Seriake Dickson) were being used to procure arms to wage war on Nigeria in the event that Jonathan lost his re-election bid in 2015. I also stated that, “PDP has become a virus that is infecting and destroying the country because they are not doing anything productive. They have changed our politics into that of ethnicity and religion to divert attention from their incompetence, lack of capacity and looting of the treasury.”

Instead of addressing the issues I raised, presidential spokesman Reuben Abati chose to muddle the discussion and confuse the public. According to a report issued by Governance and Sustainable Initiatives Ltd., entitled Analysis and Lessons of the Current Geopolitical Distribution of Federal Appointments, the Jonathan administration is said to have favoured his home state of Bayelsa 200% times more than the next states with the highest federal representation – Delta, Edo and Anambra.

If Jonathan is not playing the ethnic card, can he possibly explain to Nigerians why Bayelsa which has the smallest population in Nigeria and the fewest number of local government areas, has more than double the number of federal appointees measured by population and weight of responsibility than that of the next state, whilst the most populous states of Lagos and Kano were at the bottom of the representation ladder. What is the president’s response to that?

If President Jonathan is not playing ethnic politics, why was he quick to exonerate those he called “my people” in the aftermath of the October 1st 2010 bombings in Abuja? Did Henry Okah, who was eventually convicted of the offence in South Africa, not reveal in court that he was contacted by a high-ranking official from the presidency who told him to implicate some northerners in the bombing?

A year later, after his highly divisive election, he told a delegation of the Ohaneze that he believed that the only votes he got from the North were from Igbo residents in the North. Are those the words of a patriot or an ethnic bigot? This was after an election where he received nearly 100 percent of all votes cast in the South South and South East states, in some cases getting more votes than there were registered voters or even residents. The presidency did not respond to these facts, but chose to distort the matter in order to sweep the issues under the carpet. It may interest the president to know that Nigerians are much wiser now and will not be deceived by the antics of a drowning president and his desperate aides.

The president, rather than responding intelligibly to my charge that Jonathan has a deliberately evil strategy of using religion to divide the country for electoral gains, decided it was story time, and proceeded to announce that the president also fasted along with Muslims. It may interest him to know that former president Olusegun Obasanjo also fasted while in office, but did not broadcast it for any political gain. Incidentally, fasting goes beyond abstaining from food and drink during daylight hours; it is an intrinsic spiritual contact between man and his Creator to strive for higher ideals including truthfulness, honesty and keeping promises. Which promise has Jonathan kept? Where is the integrity in this government? Where is the genuine fear of God when looting is the order of the day?

Nigeria, by the will of the people, is a secular state. But of all Nigerian leaders, no one except Jonathan makes policy proclamations from his place of worship. Perhaps, the irony is lost on the president, but not only is it religious politics to make policy statements before only a section of the populace, the implications of making those promises in the house of God, then refusing to fulfil them are serious. Are we not told not to take the name of the Lord in vain?

As testimony to the fact that truth has become a casualty in the presidency, Abati went beyond that and concocted a lie that I said Christians were behind the Church bombings that took place in Nigeria. I never said anything like that. All I wrote was that the late National Security Adviser to the president, Gen. Owoye Azazi, and a small group known to him, were behind the dastardly acts, and I pointed out the fact that the moment he was removed as NSA, the church bombings virtually stopped as mysteriously as they started. I would have expected the president to set up an independent panel to find out and tell Nigerians the truth about the horrific church bombings. Why the conspiracy of silence?

I am keen to know why the presidency chose to keep quite on my charge that President Jonathan is the godfather of the oil thieves. If that is not the case, how come oil theft jumped from about 100,000 barrels per day before his election to a staggering 400,000 per day now? Can Jonathan explain why he ordered the removal of recognised maritime security officials from the creeks and handed over pipelines and oil installations security to militants? In what country does a bank employ a former bank robber to guard its vaults? Is there not a grand strategy to ease oil theft and procure arms for the militants to use against their fatherland? Why is there no response to this issue?

In the interview, I mentioned that the vice president, Namadi Sambo left massive debts as governor of Kaduna state with little to show for it, the same attitude that permeates every facet of Jonathan’s government. Anyone in doubt should check with the Debt Management Office. Kaduna state has the second highest debt of all states in Nigeria, thanks to loans that Sambo pursued as governor for projects that no one can see on the ground. Kaduna is a short drive from Aso Rock, so Jonathan and his cohorts can take a quick drive to see things for themselves. Nothing beats personal experience.

One of the largest and longest ‘ongoing’ projects in Kaduna state is the Zaria Water Supply Project, which was awarded to Sambo’s company before he became governor. Though Zaria is his hometown, he did not complete the project as contractor despite payments, did not conclude it as governor despite his office and is today uncompleted, despite his position.

Up until last week, most of Zaria does not have potable water, yet Sambo lists the award of a N7billion Government House contract among his achievements. Indications are that the final figure may reach N20billion before it is completed. Is that an achievement or an appropriate priority? Which 300-bed hospital did Sambo build in Kaduna State when the KASU Teaching Hospital is far from being a centre of excellence? The former governor has a penchant for confusing awarding contracts that remain forever “ongoing” with delivering public services to the citizens. How sad.

When the circle around Yar’Adua decided to play sit-tight, unconstitutional politics with his ill-health, we described their actions as that of a cabal and subjected them to public opprobrium. Whether the cabal existed as one unit or several cabals sometimes even working at cross-purposes is not the issue. We waged a war against saboteurs of our constitution through lawful means. Who is the primary beneficiary of that cabal narrative if not Jonathan?

I have had my differences with General Muhammadu Buhari, and that explains the context of my 2010 statement. Despite my strong views on issues, I do not suffer from the egotism that prevents reflection, reconsideration and the ability to adjust to new information. The general and I have moved on from those differences and we are working with like-minded compatriots to contribute to providing Nigeria the quality leadership it desperately needs. Those fixated on that to divide us are free to waste their energies.

As for Abati, I understand his problem. I will not bother to mention his writings in his previous incarnation where he thoroughly abused the president, his wife and others from whose dining table he now eats, on several occasions. Managing the public image of the inept and incompetent president that Jonathan has proved to be can be a demanding task. That task is further compounded when a medical doctor begins to angle in on the same job, especially as Jonathan has demonstrated clearly that he does not have any idea on how to tackle Nigeria’s massive unemployment challenges. So to keep his job and prove that he is more loyal, Abati thinks that the more he insults the president’s critics, the better he would look.

Unfortunately, he has a lot of people to insult, because his boss has nothing to offer Nigerians, which is why he is using ethnic and religious sentiments to play politics. A thinking president would know that stoking ethnicity and religious affiliation is not only unpatriotic, but dangerous in a country like Nigeria, but as desperate as he is to remain in office, nothing seems too low for this president. No wonder Chief Bisi Akande referred to him as a kindergarten president, while Lagos state governor called him a roadside mechanic that cannot be trusted with any vehicle.

If only the presidency could hear the truth of what majority of Nigerians who feel betrayed by his agenda of deceit and corruption are saying!

Mr. El Rufai, a quantity surveyor and politician, was minister of the Federal Capital Territory under the President Obasanjo’s administration

Stunted potentials hobble our nation, By Nasir Ahmad El-Rufai

Nasir El-Rufai

Our country is in the news these days often for the wrong reasons.

Nigeria is a country devastated by poverty, insecurity, corruption and terrorism. The governance challenges are immense, while much of public policies now deliver poor outcomes.

The budgeting process is a fictographic art, featuring much drama and a growing disconnect from the imperatives of development and the needs of the majority.

True to that tradition, the 2013 budget is by August still a matter of unsettled contention between the executive and legislative branches of government.

In spite of this, the nation’s savings account – the Excess Crude Account is being rapidly drawn down, probably unlawfully, such that it is likely to fall from about $11bn in February to zero by October 2013!

Yet this sorry impasse, governmental incompetence and impunity do not define Nigeria.

Our diverse peoples are an energetic, often optimistic lot trying to build our lives despite the trammels imposed by governmental incompetence and paralysis.

Ours is Africa’s largest country and second largest economy. It could easily be the continent’s largest economy and market if a congruence should emerge between politics, government action and national aspirations.

Such congruence was in the works from 2004-2007, when a variety of reform measures began to improve government finances, shrink the participation of the state in business by privatizing many state-owned enterprises, create a modern national identity system, strengthen the banking system and getting the ports to be more efficient.

Our nation was even poised to launch a national mortgage system to reverse its embarrassing 17 million units housing deficit.

A series of gas-based thermal plants were contracted to improve the patchy electric power generation levels. For the first time, a coherent roadmap for a potential boom in the solid mineral sector emerged alongside efforts to reduce the cost of governance through right-sizing and monetization of fringe benefits.

The personnel cost of the entire executive arm of the federal government was about N600bn, while the maximum running cost of 469 members of the national assembly used to be less than N50bn annually.

The pay-as-you-go pension system was reformed and transitional roadmap to a fully-funded contributory pension scheme legislated.

The success of our foreign debt relief campaign reflected the international community’s confidence in the soundness of the economic programme then being feverishly pursued.

Nigeria did not suddenly become an Eldorado. But it was clearly beginning to get to grips with its problems using solutions that were pragmatic and largely market driven; propelled by a vision that the government should provide the infrastructure, security and the guaranty of law and order that can give people confidence to invest, grow and unleash their talents.

The vision of that Obasanjo administration was to make this the last generation to merely speak of Nigeria’s potentials. We were determined to realize those potentials, confident that we had the talents to create wealth from the vast natural and human resource endowments of the country, leveraging the energies of its young people and latent assets in the Diaspora.

Why then the stasis since late 2007? We will attempt an explanation.

Political power must always be tied to national purpose. The inheritors of power post-2007 were strangers to that conception, and did not feel obliged to uphold the reforms they inherited, and where they did, did not demonstrate sufficient political will to see them through.

Even conceding to the ever changing dynamics of life, the broad thrust of the programmes our governments need to implement is obvious: the 2004-2007 reforms are unfinished.

They should constitute a new starting point for development- focused governance and the agenda for the next government.

Perhaps that will be the single agenda item for the All Progressives Congress in post-Jonathanian Nigeria, as it is clear that the current leadership is unwilling to proceed on that road less travelled.

We will nevertheless outline what obviously needs doing. It is not rocket science but requires a competent team led by a president that has been tested and transparently honest.

The next president must possess unquestionable personal integrity, character and will, propelled by the anger to change our currently-unacceptable conditions – qualities that appear to be in great deficit in the current leadership across the board not only at the top but even at the levels of ministries, departments and agencies.

On a macroeconomic level, the government has to both shrink and become more efficient. The public service is in many ways unfit for purpose, with a mismatch between the skills required and the excess personnel it carries.

A set of incentives needs to be arranged to once again make the public service an attractive career for our most talented.

Certain sectors of the service also need to grow. Nigeria needs more police officers, health workers, teachers and judges and the infrastructure to support them.

But the share of national income consumed by government has to reduce.

The monetization policy has to be revisited and strictly implemented so that securing a public service job, or getting elected to a post stops being a license to live like a monarch, well above the austere circumstances of ordinary Nigerians.

The expense on human capital has to both grow and be more efficiently allocated. The failure rates in the final secondary level exams show that we are not equipping our youth with the skills needed for the 21st century.

Our tertiary education is also mired in mediocrity, and the emergence of private universities merely glosses over, rather than addressing the problem.

Access to basic healthcare is also problematic, and we continue to record scandalous rates of maternal and infant mortality. The vote of no confidence in the healthcare system is seen not merely in the N4 billion Nigerians spent in 2010 on medical tourism, but also in the fact that the government makes provisions to send its top officials abroad for healthcare services.

Spending priorities and the allocation of resources have to be calibrated to reflect the urgent necessity to build infrastructure and capacity in Nigeria.

The personnel and overhead cost of governments should no longer dominate budgeting; which must begin to prioritize about 70% of budgets for capital expenditure in national and subnational appropriation acts.

Having a healthy and well-educated population that is able to compete in today’s global village is more important than the perks that seem to occupy and distract many public officers.

The abandoned efforts at developing a national mortgage system should be revived to create a source of sustainable, long-term financing and a basis for a veritable housing revolution.

This would help create better planned neighborhoods in addition to the civic pride, social stability and sense of security that home ownership fosters.

Unleashing entrepreneurial energy also requires that strong regulatory competencies be developed across the board. As our banking system so notoriously demonstrated, effective supervision and enforcement of rules and regulations are critical to the overall performance of the nation’s economy.

The culture of corruption and impunity must be confronted no matter whose oxen are gored.

The ambivalent and highly politicized efforts to tackle insecurity and terrorism must be reassessed and redesigned, and then implemented with all seriousness to end the kidnapping, crude oil theft, armed robberies and the Boko haram insurgency that plague our country.

The commendable clean-up of the judiciary initiated by the current illustrious Chief Justice must be intensified and sustained.

None of these is easy but we have little choice if our 170 million people are to have a future.

If we continue to make at least 6 million babies per annum, by 2050 Nigeria will be amongst the three most populous nations on earth.

We have a duty to do what is necessary to avoid short-term anarchy or sate failure in the medium term when the oil prices are driven down by discoveries all over Africa, and improvement in fracking technologies producing more and more shale oil and gas in Europe and the Americas.

We have only a small window to get things right, and we can. Indeed, we must!

When we do, Nigeria has room for an economic explosion, a revolution in development with tectonic consequences for Africa and the Black Race.

While we concede that even today, enterprising investors can still make money from the chaos that is the Nigerian economy given the reservoirs of unmet needs across many sectors, real progress that creates jobs and opportunities on a sustainable basis are possible only within the framework of leadership qualities and policies described above.

But all these depend on getting the politics right by ensuring we have clean elections between now and 2015.

Anything short of that is sounding the death knell of Nigeria’s progress, and Africa’s emancipation, and that will be very sad indeed.

Re: Fiscal Responsibility Commission: The Sleeping Watchdog, By Nasir Ahmad El-Rufai

Nasir Ahmad El-Rufai

My recent piece on the Fiscal Responsibility Commission elicited a wide range of responses on some of the key issues raised. Space will not permit me to publish every one of them, but the response below from a staff of the commission who prefers to remain anonymous raises even more salient questions. 

“Thank you, sir, for the above titled piece. Very precise and factual. I am a staff of the Commission and know from an insider’s experience that all you wrote about the FRC – of its inability to function according to the provision of the FRA that established it – is the true reflection of what is happening in the Commission.

But, Sir, when you ascribed the Commission’s inactive stance to the weakness of its management, I say you were understating the reality, the true situation in the Commission. The truth is that the Commission is saddled with an incompetent and corrupt management, a group of greedy people who are only out to satisfy their individual interest and nothing more.

The main problem here is that the aim and wisdom behind the establishment of Fiscal Responsibility Commission had been missed from the onset; the government appointed the wrong people to run the Commission. Of the whole six full time Commissioners plus the Chairman, only the Chairman and one of the Commissioners can be said to have full grasp of the meaning of FRA and the powers and functions of the Commission. The bulk of others are just there as appointees representing their respective geopolitical zone. You would be surprised to know that most of them lack even the basic knowledge on the FRA. And because they regard their appointment as an opportunity to further their interest including helping themselves with the Commission’s budgetary allocation, they are always at loggerheads fighting among themselves based on personal and selfish interests.

The Chairman, perhaps, due to his old age and recurrent health problem, is too weak to perform his duties. Somebody who cannot sit upright for good thirty minutes or walk few meters is definitely not the type to head this type of organization. He is always absent due to health problem; at times he runs the office from his home at Karu with staff shuttling between the Commission’s Headquarters and his house to convey files. He is always in and out of hospital among which is his frequent medical trip to India at the expense of the Commission. The Chairman is just too incapacitated to handle the job. That’s the reason most of the times he doesn’t know what is happening in the Commission as the rest of the Commissioners isolated the man, leaving him only as a figure head while they run the Commission on whims and caprices.

In fact the six full time Commissioners plus the four part time ones run the affairs of the Commission as if it is their personal property; there are no standing rules and procedures, everybody acts according to what suits his interest. They usurped everything and power concerning the activities of the Commission to themselves. The staff are reduced to mere spectators and at times treated like personal servants to the Commissioners. From their inception up to the time I am writing this, there’s nothing in place in terms of institutional framework for the working of the Commission; there are no working tools, no written condition of service, and no salary system. Since inception, the Commission conducted physical monitoring and evaluation of projects by the MDAs only once (in the 2nd quarter of this year). There is a whole directorate for monitoring and evaluation of which the staffs have been sitting idly without job to do.

The Commission is populated with bright young professionals with experience from various sectors, but the Commissioners would not allow them to work. There is general disenchantment now in the Commission; the staffs are frustrated to the highest level. There is no single staff that has been confirmed so far despite the fact that many have spent over three years in the commission. Those who can find jobs somewhere among the staff have left leaving the rest behind angry and frustrated.

How can you expect the Commission to sanction MDAs who trample the provisions of the FRA while the MDAs know that the Commission is a joke; nothing threatening will come out of it! The Commissioners, because of their glut, have turned the Commission into a corrupt, beggar-agency in front of the MDAs it is supposed to supervise. The NIMASA (among the scores of agencies that defied the Commission) you were talking about knew what they were doing when they ignored the Commission’s orders. At the end even when they were summoned to the Commission what happened? Where they sanctioned? After closed-door meeting with the Commission’s management, they all came out smiling and exchanging banters with the Commissioners! And up to today they have not submit the documents they were asked to submit, neither have they remit the monies in question.

Currently, there’s palpable situation in the Commission now resulting in mixed reactions, thanks to your write up. Just as the staffs are happy and jubilating for what you wrote, the management members are tensed and frightened. They just cancelled a scheduled meeting between the staff and the management which was supposed to hold today, Tuesday, due to fear that the staff will confront them.

Thank you, once again sir, for exposing the rot in the FRC.”

 

Katsina State’s “No Future” Budget, By Nasir Ahmad El-Rufai

Nasir Ahmad El-Rufai

In the days and weeks leading up to the faux pax that became the Nigeria Governor’s Forum (NGF) election, the Katsina state governor, Ibrahim Shehu Shema was mentioned several times as a possible compromise candidate, largely on account of what some perceive as his ‘performance’ as governor. The same was said of late Umaru Yar’Adua even though most residents of the state vehemently disagreed then, and now. Shema is being touted as the likely running mate of President Jonathan if he is able to secure the nomination of his party to run for another term as president.  

What is it about this man – Ibrahim Shema – that elicits such strongly ambivalent reactions? What is his style of governance and financial prudence, and why is it that so many think there is more to him that meets the eye in the way he runs Katsina state? How are the state’s finances and budget  managed? If Shema is doing well in this area, why did the state house of assembly suspend the minority leader because he criticized the government’s poor budget implementation? We will analyze the 2013 budget of the state today to assist our readers answer some of these questions.

Barrister Ibrahim Shema claims to focus his administration’s six development priorities; Education, Agriculture, Human Development, Infrastructure, Health and Crafts. It appears that in Katsina lingo, human development does not equal investments in education and healthcare, as the three are treated separately. Beyond this definitional incompetence however, a look at Katsina’s 2013 budget reveals a level of  policy misdirection, indeterminate political will to address the priorities of the state, allocation of funds to areas where monitoring is difficult, and level of non-implementation of past budgets that amounts to impunity.

First, a little history. Carved out of old Kaduna State in September 1987, Katsina is located in Nigeria’s North West and borders Niger Republic, Kaduna, Kano and Jigawa States. Its land mass is approximately 24,000 square kilometers with a population of about 5,801,584 people in 34 Local Government Areas. Its capital is Katsina City. The state has commercial deposits of kaolin and asbestos.

Then Colonel Abdullahi Sarki Mukhtar was the first governor of the state (September 1987-July 1988), and was succeeded by other military governors. The first civilian governor was Saidu Barda, while immediate past President Umaru Musa Yaradua governed the state from May 1999- May 2007. Katsina is home to two past presidents; Major-General Muhammadu Buhari and Umaru Musa Yaradua. Other Katsinawa dignitaries include late General Hassan Usman Katsina, Major-General Shehu Musa Yar’Adua, former Chief Justice of the Federation Mohammed Bello, two past Inspector’s General of Police: Mohammed Dikko Yusuf and Ibrahim Coomassie, and pioneer Chairman of the Bureau of Public Enterprises, Hamza Rafindadi Zayad amongst others. Katsina is home to some of the best and brightest of Nigerian public servants, politicians and military top brass. Will the state’s current budgetary practices produce such quality elites in the future? Let us present the data and you answer the question!

The total budget for Katsina State in 2013 is N112,757,487,475 (One Hundred and Twelve Billion, Seven hundred and Fifty Seven Million, Four Hundred and Eighty Seven Thousand, Four Hundred and Seventy Five Naira only). The budget would be financed through some N14, 561,712,643 or 12.9% of the proposed budget realizable from internally generated revenue and some N74.5bn (66.7%) receivable in Federal Allocation. With total revenues at N89bn, what is evident is that the state would need to borrow some N23bn or 20% of its budget from external sources – loans and grants.

The capital provision is some N80,931,809,320 (Eighty billion Nine hundred and Thirty One million, Eight hundred and Nine thousand, Three hundred and Twenty thousand naira only)  which is a commendable 71.7% of the entire budget. The State has about 43 MDAs which would cost taxpayers some N31,825,678,155 (Thirty One billion Eight hundred and Twenty Five million, Six hundred and Seventy Eight thousand one hundred and fifty five thousand naira only) or 28.2% in recurrent expenditure – an average of about N700 million per MDA.

Personnel costs would gulp some 17.2% of the entire budget sum or N19,434,384,200 (Nineteen Billion Four Hundred and Thirty Four Million, Three Hundred and Eighty Four Thousand Two Hundred Naira Only) while overhead costs are N7,975,267,830 (Seven Billion Nine Hundred and Seventy Five Million Two Hundred and Sixty Seven Thousand, Eight Hundred and Thirty naira only) some 7.07% and consolidated revenue charge is apportioned N4,416,026,125 (Four Billion, Four Hundred and Sixteen Million, Twenty Six Thousand, One Hundred and Twenty Five naira Only) 3.9%.

With its projected internally generated revenue of N14,561,712,643, Katsina State has to rely on external loans or Federal allocations to fully fund its personnel cost or staff salaries which are only a part of its total recurrent budget. Plainly put, the state spends more than it earns on government bureaucracy, and falls in the class of “parastatal states” that cannot stand on their own without a lifeline from Abuja.

A sectoral breakdown of the capital allocation of the budget reveals the following structure: N31.3 billion (27.8%) for the economic sector, N16.5 billion (14.6%) for social services, N26.9 billion (23.9%) for regional development, N2.9 billion (2.6%) for general administration, N750 million (0.6%) for the legislature, a provision of N2 billion (1.7%) for miscellaneous expenses and a measly N341.4 million (0.3%) for the judiciary.

At N21.6 billion, the largest departmental allocation is for road construction, Education is allocated some N13.6 billion, Health got N1.6 billion, Agriculture which employs the majority of Katsina’s working population is allocated only N7.8 billion, and Water Supply some N9.5 billion. Are these capital investments enough to register sectoral improvements in the face of poverty challenges the state faces?

According to the Nigeria Poverty Profile (2010), the North West Zone has the highest incidence of absolute poverty in Nigeria with a 70% prevalence rate, the North East 69%, the North Central 59.5%, the South East 58.7%, the South South 55.9% and the South West 49.8%. At 74.5% Katsina State has the highest poverty prevalence amongst all states in the region and the Shema-led administration thus far has taken no deliberate steps to address this. Under the economic sector there is a paltry capital allocation of only N276 million (0.2%) to manufacturing, a paltry N214,019,000 (0.1%) capital provision for Women Empowerment under the Ministry of Women Affairs  and only N100 million (0.08%) under the Ministry of Youth and Sports for the states Youth Empowerment Program (Youth Action Plan). These figures are absurd, demonstrating that there is no political will to address the endemic poverty facing most of the population in the state.

From the private sector angle, the state shows even more damning figures. The state has virtually no functioning private agro-allied and manufacturing facilities. According to the World Bank 2010 Ease of Doing Business in Nigeria rankings, the state is ranked 25 amongst the 36 Nigerian States and the FCT, it involves 9 procedures and would take 37 days to start a business in Katsina State. In light of the foregoing, it would be expected that the government would be investing heavily in small and medium enterprises, encouraging and incentivizing businesses to set up shop in the state through tax breaks and infrastructural investments with a view to creating a more conducive business climate.  Sadly, this is not the case. Capital allocations for the 2013 fiscal year are N350million (0.3%) for Small and Medium Enterprises, only N280.8million (0.2%) for economic affairs,  N1.3billion (1.2%) for finance, and low level of investments in providing municipal services and transportation that could lower the cost of doing business in the state.

Investments in education are ambivalent. While the  Shema-led government deserves commendation for the expansion and modernization of classrooms in the state and for being the only Nigerian state with a Department for Girl Child Education and Child Development, teacher quality in the state is one of the worst in Nigeria. According to the UBEC 2010 education profile the qualified teacher to student ratio in Katsina State is 1 teacher to 208 students, its neighbor Kaduna has a ratio of 1 teacher to 58 students. And there is no indication of things getting better; in 2013, only N124,731,000 would be spent on recruiting new teachers, N55million would be spent on teacher welfare and N900million on grants and subventions. There appears to be no special and significant  programme to raise teacher quality through training and other incentives.

There is a N12.5million provision for training and staff development and another N2million for in service training and workshop, however these provisions were also made in the 2012 budget with no actual expenditure as at December 31st the same year.  One wonders what good these provisions are if they are simply recorded and not actually expended. Delaying or deferring training of staff is suicidal in this century. Katsina’s budget appears to be for debate and passage by the legislature but not for focused implementation!

Katsina has a JSS enrollment rate of about 33% and is the second lowest in the North West zone; Jigawa has the lowest enrollment rate with 22%. Zamfara has the highest enrollment rate with 53%, Kebbi 43%, Kaduna 38%, Kano 34%. Of 21,389 pupils from Katsina State that sat for the 2012 University and Tertiary Matriculation Examinations (UTME), only 3767 scored 200 and above. It is clear that the state suffers a grave education deficit; the government has to channel its resources both financial and physical to training and re-training teachers and increasing school enrollment rates.

The health of Katsina citizens seems even worse than education in budgetary terms. According to the 2008 Nigeria Demographic and Health Survey (NDHS), Katsina State has the highest incidence of teenage pregnancy in Nigeria with 65% of all cases recorded nationwide. In contrast, Edo State has the lowest rate at 2.9%. Mortality rate in Katsina is also high; the current teenage mortality rate is about 0.822 per 1000 women and the bulk of recorded incidences are from the North, with factors ranging from unsafe abortions, pregnancy complications, poor antenatal care that lead to the increase of birth related deaths which abound in Katsina. Katsina was one if worst places in the world to be a teenage girl based on the NDHS of 2008 under Shema’s watch.

The state has shown some efforts to stemming this tide though, even if too little too late – some N180 million is set aside for purchase of drugs and dressing, N400 million for staff training and development. A 169 bed Turai Yaradua maternal and child hospital has been completed at a cost of N860.5 million, a N552 million provision is also made for a 270 bed orthopedic hospital which would reportedly cost the state N1.6 billion upon completion. All these include about N185 million that was spent in 2009 to purchase 34 mobile ambulances which have thus far eased the provision of health services to rural communities.

The spending priorities of the Shema led government puts road construction as its first priority, this is hardly ideal considering that the state has a high disease burden, the country’s highest poverty rate and a crumbling education system. What Katsina needs more of is not roads but more education and healthcare investments. Road contracts are easy to award to party apparatchiks and well-connected construction firms, while raising quality of human capital is harder and less profitable. The choice is up to Shema to make.

The state must refocus its priorities beginning with a slimmer and cost efficient government. It must also as a matter of urgency allocate more funds to education, health and agriculture. It must invest more in providing potable water for the population as well as to farmers for irrigation. Katsina must lower its cost of doing business and evolve innovative ways to begin the exploration and export of its abundant mineral resources. That is the only way to secure the future of Katsina’s young people. The current approach only makes Shema and his small circle of political actors happy while the future looks bleak for the many.

Fiscal Responsibility Commission – The Sleeping Watchdog, By Nasir Ahmad El-Rufai

Nasir El-Rufai

A few days ago, the minister of finance, Dr. Ngozi Okonjo-Iweala warned that economic activities may be shut down and that the Federal Government may be unable to pay its workforce by September if government failed to resolve the lingering problems with the 2013 Appropriation Act.

The fact that the Federal Government is still talking about this year’s budget seven months into the year is indicative of weak fiscal practices and management at all levels of government. Sadly, the effects of government inertia would worsen matters for economically vulnerable Nigerians – a group that has grown significantly in size since President Goodluck Jonathan assumed office.

Considering how dependent the Nigerian economy is on government activities, it is inevitable that the budgetary inertia will further exacerbate poverty and unemployment and slow down what is essentially a jobless GDP growth in the face of increasing poverty. How did things get to this stage? Are there no mechanisms in place to check the attitude of government and its numerous agencies to fiscal responsibility?

Actually, there are several agencies of government charged with this task, except that perhaps taking a cue from the head of government, many of them are asleep, and if anything and have themselves, become part of the problem. It is therefore imperative that we examine some of these MDAs in a bid to highlight their purpose, effectiveness and productivity since their establishment. In continuance of our analysis of MDAs set up by the Federal Government, the first spotlight will be on the Fiscal Responsibility Commission (FRC).

It was then Vice President Atiku Abubakar that first persuaded the National Economic Council to approve a fiscal management framework for the federation in 2001, along the lines adopted by the Brazilian Federation. The Fiscal Responsibility Bill was thereafter initiated by the Obasanjo Economic Team (2003-2007) to ensure the coordination of national economic policy between various tiers of government, and enable monitoring of agencies that are ‘off-budget’ but whose activities have significant impact on fiscal policies. The Fiscal Responsibility Act (FRA) was enacted in 2007 ‘to provide for prudent management of the Nation’s Resources, ensure long-term Macro-Economic stability of the National Economy, and secure greater accountability and transparency in fiscal operations within the Medium Term Fiscal Policy Framework. The FRA established the Fiscal Responsibility Commission to ensure the promotion and enforcement of the Nation’s Economic objectives; and for related matters’. However, it was not until 2008 that the chairman and members of the commission were appointed, under the leadership of Alhaji Aliyu Jibril Yelwa.

The FRA in itself is a laudable legislation if it is implemented to the letter as conceived by the Economic Team. However, five years since the establishment of the commission, are there any achievements to show for it or is it just another drainpipe for the nation’s resources? Is the current administration enabling the commission to fulfill its obligations or is it a stumbling block to its overall productivity. Is the FRC an agency that is necessary or is it just another institution with substantially overlapping functions of another in existence? We shall try to answer these and assess the commission’s performance thus far vis-à-vis its statutory mandate.

In clear terms, the FRC is responsible for monitoring budget implementation in the various MDAs at both the Federal and State levels to avoid mismanagement of public funds. The commission is also responsible for ensuring that annual budgets are derived from the Medium Term Expenditure Framework (MTEF) prepared by the Ministry of Finance for a period of three financial years, and approved by the National Assembly.

According to the FRA, every government corporation is required to establish a general reserve fund where 20% of its operating surplus is allocated annually while the balance is to be paid into the Federal Government’s Consolidated Revenue Fund. The commission is also required to publish, on a quarterly basis, a list of each of the tiers of governments in the federation that have exceeded the limits of consolidated debt, indicating the amount by which the limit is exceeded.

So far, attempts at implementation of the FRA are mainly at the Federal level. This is grossly insufficient given that the sub-national governments (states and local governments) control over 50 percent of nationally-shared revenue. Available data collated in 2010 indicated that only 20 out of the 36 states in the Federation had initiated the process of Fiscal Responsibility legislation. Apart from enacting the fiscal responsibility laws, there is a major problem with implementation.

There still exists sickening mismanagement of public funds across MDAs with huge figures appropriated in the budget and no corresponding capital investments to show for it. The FRC which is the body responsible for ensuring fiscal responsibility and the due implementation of budgets and projects is lax about fulfilling its role.

Earlier this year, the House of Representatives revealed that 60 government agencies generated N9.3trn in three years (2009-2012) but only remitted N174.9bn to the coffers of Federal Government. In its report titled, “Poor Remittance of Internally Generated Revenue to the Consolidated Revenue Fund (CRF) by Government Owned Agencies”, the Central Bank of Nigeria (CBN), the Nigerian Maritime Administration and Safety Authority (NIMASA), the Nigerian National Petroleum Corporation (NNPC), Nigeria Ports Authority (NPA), Asset Management Corporation of Nigeria (AMCON) and National Pension Commission (PENCOM) are among the defaulting agencies being scrutinized.

It was discovered that they habitually under-projected their revenues and over-estimated their expenditures thereby ensuring that their remittances to the CRF were minimal, if any at all.

Just last month, the Federal Ministry of Finance threatened to close accounts of agencies which had failed to remit revenues to the Consolidated Revenue Fund (CRF). Apparently, the practice is for these government agencies to invest the excess funds generated in dodgy and unapproved accounts which yield high interest for the few engaged in these shady deals.

Sadly, the above cases of misappropriation of public funds were not queried by the FRC whose primary responsibility it is to carry out such activities. It is public knowledge that the FRC had sometime last year demanded that NIMASA render audited accounts, but the FRC’s demands were blatantly ignored, without any consequences. What is the purpose of the FRC if it can only bark but not bite?

Several countries such as India and Brazil have enacted Fiscal Responsibility laws to strengthen their fiscal institutions and establish a broad framework of fiscal planning successfully. In India, the union government passed the Fiscal Responsibility and Budget Management Act in 2003, a year later, all 28 states replicated the Act. Brazil passed a Fiscal Responsibility Law in 2000 which applies uniformly to the federal, states and municipal governments. The Brazilian law set out borrowing criteria and penalties for default of this rule.

It placed limits on public spending, the size of the fiscal deficit, and public debt, and disallows debt refinancing between the state and central governments. It was the Brazilian success that Nigeria sought to learn from.

As expected, in India, the fiscal responsibility law positively improved the management of public debt both at the Federal and State Government levels and within the first six (6) years of its operation, India recorded a 4.4% and 4.8% reduction in Central and State Government debts respectively. Brazil on the other hand, 9 years after strict adherence to the Fiscal Responsibility laws, occupies ninth position in the league of the most 20 developed countries in the world. In the case of Nigeria, the external debt stock has doubled from $3.3bn in 2007 when the FRA was enacted to $6.7bn by March 2013. What then, is the purpose of this legislation in the Nigerian instance, if our debt stock is on the increase?

Incidentally, two years ago, the federal government set-up a committee headed by then Head of Service of the Federation, Steve Orosanye, to restructure and rationalize the public service. One of the expected outcomes was the reduction of the cost of governance by reducing the duplicity and overlapping functions inherent in the current structure of the Public Service of the federation.

According to the Orosanye report, there exists about 541 government agencies and parastatals which have huge financial implications for the nation especially when their productivity does not measure up to their running costs. Some of the recommendations of the report included merging, reversing and abolishing certain Ministries, Departments and Agencies (MDAs). It is opined that if the recommendations of the Orosanye report are implemented to the letter, it would potentially save the country N862bn by 2015, nearly a fifth of the annual federal budget.

The Orosanye Committee report rightly observed that the FRC has a similar mandate with the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) whose function is to “Monitor the accruals into and disbursement of revenue from the Federation Account”. With a 2013 budget of N592m for a commission whose responsibilities are partly being carried out by the Ministry of Finance, House of Representatives and the RMAFC, it is questionable is this is money well spent.

The structure, implementation process and weak leadership are encumbrances to the FRC living up to its maximum potentials. The authority of the commission in ensuring fiscal responsibility is neither acknowledged nor adhered to. The commission on its part has been lethargic in identifying, investigating and prosecuting MDAs and tiers of government that are suspected of squandering the nation’s resources.

The reported amount of funds unaccounted for in the last 3 years alone is almost equivalent to the federal budget for two years! Then again, this state of affairs may just suit President Jonathan and the party at the helm. When everybody in government is bathing in mud of funds diversion, who can point the accusing fingers?

Jonathan’s Half-Time: The Verdict, By Nasir Ahmad El-Rufai

Nasir Ahmad El-Rufai

The mid-term review of the Goodluck Jonathan administration was celebrated with much pomp and pageantry. To an onlooker or a visitor to the country, the review of the administration’s performance was right on course and almost believable. The paradox is that the same people who set the examinations, sat for them and graded themselves. Sadly, contrary to the current administration’s celebration of success, the grand ‘economic’ figures that were reeled out mean nothing to the ordinary person. The President, proudly with the midterm review document in hand, has asked that we score him. That is what exactly will be covered by this concluding piece of mid-term assessment; not from the perspective of the government but from the angle of the perceived ‘beneficiaries’ of the various schemes and policies that have been enacted since 2011.

Considering the macro-economic issues which have been celebrated by the current government, the fact is several notable aspects of the economy which the government claims to have improved, only impacted a few beneficiaries. The government claims credit in a GDP growth of about 7%. It also beats its chest on the renovation of airports and the resumption of a weekly train service between Lagos and Kano, having been off the lines for nearly twenty years. The government also touts its award of several contracts for infrastructure, especially roads. Finally, the Jonathan government is very smugly proud of its so-called power sector reform and the corollary privatization of several distribution and generation companies.

In the area of providing safety and security for citizens, the government has just recently declared a state of emergency in Adamawa, Borno and Yobe States, while at the same time ratcheting up the military onslaught at the Boko Haram insurgency, particularly in those three states. Prior to these actions, the government had all but capitulated to all manners of security challenges in all parts of the country, from the kidnappings, to piracy, communal and inter-ethnic clashes, the potentially explosive grazers/farmers relationship all over the country, armed robbery, to all other strains of dissidence. And, of course, the government’s own pretense at, and overlooking serial human rights violations and repeated extra judicial killings of innocent citizens by the security forces.

In the two years since the election of President Goodluck Jonathan, poverty has reportedly declined by 2% (48% to 46%) according to the World Bank’s vice president for Africa. Worthy of note is the fact that it was also mentioned by the World Bank chief that a GDP growth rate of 8% is insufficient to reduce poverty in the country. In practical terms, while there appears to be a minute improvement in the numbers, how significant is a 2% reduction in poverty when about 60% of the population is poor? What does this reduction in poverty mean to the rural dweller who cannot afford the minimum of a dollar (about 160 naira) to cater to his daily needs of feeding, transportation and other human engagements?

Beyond all the trumpets being blown by the current administration for its performance, poverty still abounds greatly in the country which by all standards and measures should not be, given Nigeria’s vast natural and human resource endowments. According to the Revenue Watch Institute, Nigeria is recognized and ranked 40th among 58 natural resources-rich nations. But because these revenues are not properly accounted for and managed terribly, they benefit only a few who have access to the funds at the detriment of the citizenry.

Inequality is on the rise as attested to by Rev. Jesse Jackson who was invited for the democracy day celebrations. His analysis of the Nigerian situation, however grim, is so true.  He mentioned that there would be continuous agitations and unrests in Nigeria until the country’s system was able to guarantee economic justice and equality to the people, stressing that poverty in the midst of plenty was unacceptable.

Sadly, Nigeria, as at the end of 2012 ranked as the 35th most corrupt country in the world. Ridiculously, the government attributes the marginal improvement of moving four places from its ranking of 2011 to the Federal Government’s resolve to fight corruption head-on. The government also responded to the ranking by saying, “it shows clearly that Nigeria is gradually but steadily coming out of the cycle of most corrupt countries”. At this pace, the only thing obvious is the fact that the nation is nowhere close to being taken off the corruption list.

The debt stock of the nation keeps soaring and has currently doubled what it was in 2007. According to statistics available on the Debt Management Office (DMO) website, the external debt stock as at 1999 was about $28bn; by March 2007 was $3.3bn, $5.7bn by December 2011, $6.5bn by December 2012 and $6.7bn by March 2013. What does the Nigerian government have to show for its massive external borrowing? Is it the erratic power supply or the weekly train services which service an insignificant fraction of the population? Government borrowing ought to inject needed cash into the social sector of government by funding critical priority areas such as health, basic education, water, and roads. Can we proudly say we have seen considerable improvement in these sectors?

Incidentally, barely a week after Jonathan’s celebration of ‘achievements’, two of his ministers – Zainab Kuchi and Labaran Maku, admitted in public that 120 million Nigerians still lived in darkness. This clearly indicates that either this government is not reading from the same script, or those that authored Jonathan’s brandished ‘achievements’ live in another planet. It may also be that the government has been caught up in its own web of lies, because however carefully managed a lie is, the truth will always come out in the end.

Those brandishing figures to say that unemployment in Nigeria is on the decrease probably live in another country. Unemployment in Nigeria has grown from about one in five people in 2010 to about one out of every three willing and able to work but jobless in 2013. Many youths beg to differ with these figures stating that these are more likely to represent the employment rate rather than unemployment. While You-Win and Sure-P may be conceptually steps in the right direction, they have remained meaningless slogans as it will take a lot more than them to get the teeming unemployed population off the streets. Most of the youth simply have no hope in what the future holds for them. The truth is that most of the insurgency being experienced in the country in its various forms from Boko Haram to kidnapping and Niger Delta militancy is a direct offshoot of the idleness and unemployment among restless youths.

What is clear though is that not only is President Jonathan determined that he has passed his mid-term exams with flying colors, he has also declared that he has passed the final 2015 exam too, and will promote himself to a second term whether we like it or not. His surrogate voices like Kingsley Kuku and Dokubo have already announced the results of the next presidential elections that we all hope will take place in 2014! These voices have made it clear that mayhem will be visited on the rest of Nigeria by the Ijaws if Jonathan does not contest and win the next presidential election. Jonathan has also embarked on a journey of annihilating any source of dissent within his toxic party, the opposition and the country in multiple fronts. within the PDP, he has procured the suspension of Governors Rotimi Amaechi and Magatakarda Wammako for daring to oppose his choice to lead the Nigeria Governors’ Forum (NGF). By endorsing Jonah Jang – the pathetic and hapless loser of election of the NGF which every citizen saw on video with Rotimi Amaechi as the clear winner, Jonathan has descended to even lower moral standards. Seeing these old people going round shamelessly refuting what we all saw clearly on video, I sometimes wonder how people like Jonah Jang and Olusegun Mimiko sleep at night! Opposition leaders like General Muhammadu Buhari and Asiwaju Bola Tinubu are being constantly attacked in the media by Jonathanian surrogates while the constitutional rights of citizens are regularly violated to frustrate the merger and emergence of the All Progressives Congress (APC).

In the light of all these, it is clear that when Jonathan loses the 2014 presidential elections (not in 2015 as most people assume), he will pull a Laurent Gbagbo stunt, dig in and declare that he has not lost, with his surrogates unleashing violence on anyone perceived to be in disagreement. The next two years will be therefore a period of great challenge to Nigerians during which round-the-clock vigilance must be the watchword of all those that care for our nation and its people.
We all need to be proactive in insisting that the next elections be free, fair and credible. To ensure this, INEC must eliminate human intervention and manipulation of election results by ensuring that polling unit-level results go to a computerized collation centre via encrypted technology on INEC’s VSAT and the nationwide public telecommunications network, thus eliminating paper-based Forms EC8B to F, as well as the collation centers of electoral fraud, manipulation and corruption. The opposition political parties have already recommended that the next elections should all be held on the same day to reduce the logistic and material costs and the like, and eliminate the multiple sources of rigging and manipulation, among others.

The foregoing litany of failures and underperformance of government in social, political and economic spheres will fill more pages than this column can take. Things have never been as bad as we have it now and no gloss-paper document can mask the frustration of the people. The few people who praise the performance of this government or the direction it is headed are those who have benefitted inordinately from the skewed opportunities at the expense of the majority. Some of the major sectors of the country’s economy which would make a difference now and for future generations (security, electric power, healthcare, employment and education) are being toyed with for political gains.

It is not the President’s duty to ‘try’. After all he made promises during his campaign which he ought to fulfill. It is his constitutional duty to protect the lives and property of the citizens and it is our right as citizens to hold our leaders accountable. Rather than engage in petty arguments and gloating over marginal improvements in figures as compared to previous administrations, this administration needs to demonstrate its plans to not only halt the slide, but leave a secure future for the next generation. Instead of taking all criticisms in bad faith, a government that genuinely has the interest of the people at heart should prove critics wrong by improving performance and being accountable to citizens.

In the end, it was a truly shameful spectacle for President Jonathan to sing and dance around with a document that does not have a basis in reality and claim achievements that few people can see or even feel. Judging the mid-term (lack of) progress of Goodluck Jonathan does not require any kind of extra-ordinary skills or gifts. Are you better off now than you were three years ago? Are you more secure than you were a few years ago? Can you pay school fees without breaking the bank? Are more people in jobs than they were a few years ago? Are Nigerians better united today than before Jonathan’s ‘election’? Do you even feed better than you did two years ago? The verdict is up to you.

On final note, we waited in vain for the much-touted document to be made available online or widely in print as promised by the Minister of National Planning. As at the time of writing this, we are yet to see the fulfillment of this Jonathanian promise. If and when the Mid-Term Report of the so-called Transformation Agenda is available we will do a point-by-point analysis.

Jonathan’s half-time: The hard facts, By Nasir Ahmad El-Rufai

Nasir Ahmad El-Rufai

We began the assessment of President Goodluck Jonathan’s administration by listing a number of the campaign promises he made in 2011 and added that the achievement of those promises was not easy to measure because in essence, they were just broad generalizations with no targets, deliverables or timelines. Perhaps, that was the point of making such vague promises; so that performance cannot be measured and failures would not be easily evident.

This week, we would rely on field visits and the feedback received from readers who responded via email, phone and SMS addresses provided last week. These responses along with other published facts and opinions would form the basis for assessing the Presidents’ performance. Some readers used the platform provided to engage in abuse, diversion and bigotry that the Jonathanians have perfected as response to any questions demanding their accountability. They forget that we are thick-skinned and do not respond to brainless insults. Many more provided on-the-ground status of projects and programs for which we are grateful.

While the perception amongst majority of respondents is that the Jonathan government is significantly underperforming; most of those who work with him or indirectly benefit from the schema of ethnic division, corruption and impunity his administration has perfected are engulfed in praise singing and forget to remind him of his many promises. Let us look to some of the specific commitments summarized last week.

 Let us look at his promises in agriculture; President Jonathan’s government appears to have shifted focus from subsistence farming to commercial agriculture expecting that farm output would increase significantly. Nigeria spends about $11 billion importing rice annually. Apart from three new integrated rice mills built by state governments – Ebony Agro Industries in Ebonyi state, Umza Rice in Kano state, Ashi Rice in Benue state and a large-scale facility for production and milling in Taraba State which combined would process some 390,000 tonnes or a fifth of imports – no noticeable steps have been recorded in reducing this massive foreign exchange outflow under Jonathan’s watch. Against Nigeria’s annual import bill of N23.4trillion, are we close to becoming an exporting country by 2015?

Yet another sugar master plan was approved by the federal government in September 2012; some N496bn would be raised from private sector funds to finance the 7 year plan. This immediately leads to the question, what informed the government’s focus on sugar when its annual import bill is less than N100 billion as opposed to the very hefty N635 billion spent on importing wheat annually or the worst case of rice? Or even the N100billion expended annually on fish imports? These imports are unjustifiable in a nation that has surface water bodies, reservoirs and wetlands suitable for rice cultivation covering about 14.9 million hectares or about 15.9% of our land mass. The agricultural sector has witnessed more rhetoric and declaration of early, non-existent victories than any real transformation.

 The president fulfilled two promises related to the South-East – the physical upgrade of Enugu Airport and completion of the Onitsha Inland Port. The Onitsha port reportedly has a 3000-container warehouse capacity of 40 tonnes each. But how come, nine months after commissioning, the port is yet to commence operations? Why are international airlines not flying passengers or cargo to Enugu? Does completing a project simply mean erecting a structure? Do unused facilities benefit the economy?

 Interestingly, Jonathan’s promise to provide water to Onitsha has remained just that: a promise. The state government initiated a new partnership with a Chinese firm to resuscitate the greater Onitsha Water Scheme with the state providing 30% financing over 18 months. After cancellations in 2009, 2010 and 15 months into the project implementation with little evidence of progress on ground, the Onitsha people have reasons to doubt the sincerity of government.

As to the president’s promise of building an airport in every state, the logical poser is: would airports in every state the best investment to benefit local economies? Is there sufficient passenger traffic to sustain these airports, and do we have vibrant airlines? In an economy with an officially-accepted poverty rate of about 46%, would light rail and better motor-able roads not be more effective? Would it not make more sense if efforts are directed towards fixing the intercity road or the ‘death traps’ that exist in these states, as opposed to building airports with no sustainable flights, planes or passengers?

 A lot of noise has been made about rail transport being revived by this administration, but the effort is deceptive and unplanned at best. According to one Nigerian, Abdulrazaq Hamzat, he spent 19 hours on a train ride from Ilorin- Lagos; a bus ride on the same route would be about 4 hours. Another Nigerian, Ben Ezeamalu also spent 33 hours on the Kano- Lagos route, when the same route takes about 12 hours by road. In its current state, a train ride would be nothing but time wastage and until our current dilapidated locomotives are replaced by modern bullet trains, it would be irresponsible to consider it an achievement.

 On roads, only about 12.6 kilometers of the 77 kilometers Enugu – Abakaliki road has been completed in two years. This is the same road the President promised would be completed and dualized within one year of his Presidency! Apparently tired of waiting for the federal government, the Ebonyi state government opted to bear the N6.8billion contract sum for the road. The same failure applies to the Lagos- Jebba rail project and the Ijesa Dam and virtually all the major roads in Nigeria. Those that ply the Lagos-Ibadan Expressway, the Benin-Ore Road, the Abuja-Kaduna-Kano Road and the like know that the promised transformation of our roadways has gone to nowhere but the pockets of the officials near President Jonathan.  

 On job creation, the story is the same: in Rivers state, Jonathan promised to build a Petrochemical plant that will create jobs; the people are still waiting. It has been two years since he made that promise, but the realities on ground prove that he has only succeeded in further shrinking Nigeria’s dwindling middle class and worsening inequality. In fact, under his stewardship, unemployment in Nigeria has grown from about 21% in 2010 to an estimated 29.3% in 2012. Perhaps our president should learn from Osun state’s Governor Rauf Aregbesola who has succeeded in reducing unemployment from 14.3% in 2010 when he began presiding over affairs in the state to an estimated 3% in 2012!

 There is much talk about the Youth Enterprise with Innovation in Nigeria (YouWIN) initiative. The scheme was launched in 2011 and is open to Nigerian youth entrepreneurs who send in business proposals out of which the very best as judged by a third party international consulting firm would receive business training and financial grants to start up businesses that employ a minimum of 5 people. In March 2012, 1200 young Nigerians received training and grants of between 2 and 10 million naira. 

And after the second stage of the competition targeted at women (YouWIN women), 1200 women winners emerged in May 2013 and received similar training and grants. While commendable, it begs the questions: how effective is this strategy to tackle unemployment if in the span of 3 years, it only generated 2400 direct jobs (about 0.4%) for Nigeria’s 67million unemployed population? If you measure this against the 3 million jobs Nigeria needs to create yearly, you begin to appreciate how much unemployment would escalate by the time the Jonathan administration is voted out in 2014!  

 For many readers who wrote in, the President has done anything but fight poverty. In publications and press releases, the Presidency boasts of a purported 2% decrease in poverty from some 48% to 46% and claim that he has fulfilled his promise to the Plateau people to launch a straight fight against poverty, someone needs to tell the President that a 2% decrease in his 2 years of presidency, if at all correct, is no achievement at all and only points to failure.

 President Jonathan promised the people of Enugu and Aba that he would stamp out kidnapping. In Bauchi, he promised to combat terrorism. Again, he has failed on both fronts. A look at recent kidnappings in or around Enugu and Aba says it all: In October 2011, 2 monarchs Igwe Obiora of Obuofia and Igwe Pius of Mgbidi were kidnapped. In September 2012, the Enugu State University of Science and Technology (ESUT) Vice Chancellor Prof. Cyprain Onyeji was kidnapped, in December of the same year; the mother of Finance Minister Prof. Kamene Okonjo was also abducted. As recent as early this month, two brothers apparently returning from the UK got abducted by kidnappers. Even the daughter and wife of Supreme Court Justice Rhodes-Vivour were not spared recently. Kidnappings are not just on the rise, but now an industry that the media hardly bother to report all but the most sensational cases.

 Addressing the epileptic power supply that has plagued Nigeria for decades, Jonathan vowed that Nigerians would no longer talk of generators and that he would end chronic power shortages in his promised one term of office. To achieve uninterrupted power supply for all Nigerians, we need some 50,000MW being generated, up from about 4,000MW Jonathan inherited. That requires billions of dollars in investment, program management skills and at least five years of hard work. So Jonathan knew he was being economic with the truth from day one. It is not surprising that this is one of the many promises that he has failed on. An increasing number of Nigerians depend on generators; studies last year show that the industrial sector in Nigeria spends N1.2 trillion yearly to run diesel generators while households, according to NERC’s estimate, spend N796.4 billion a year on powering generators. Does anyone really expect anything different when the Presidency and PHCN also have generators as major source of power supply, while the government-funded PHCN serves as stand-by?

 The petroleum sector is another classic example of the President’s airy promises remaining in thin air. In 2011, Nigeria’s crude oil production was about 2.55m bpd, in 2012 it reduced to about 2.52m bpd and now it fluctuates between 1.89m bpd and 2.1m bpd because of massive crude oil theft to build the war chest for the next elections. Similarly, Jonathan promised that all our existing refineries will be rehabilitated by March 2013, and new one built such that we are able to refine 1m bpd by 2014. It would have been an easy feat to achieve considering that he inherited a plan to build three more refineries in Lagos, Kogi and Bayelsa States from the Yar’Adua administration. Today, not only is none of the existing refineries working at full capacity, but there nothing to show that even a single new one will be nearing completion by 2014! Instead, Nigerians have seen increased fuel prices from N65 in 2007 to N141 in 2012 and N97 in the same year!

 Clearly, President Jonathan has not delivered on most of the promises he made despite the fact that federally-collectible revenue including foreign exchange earnings have increased substantially under his watch, just as have domestic and foreign borrowings escalated, with little or nothing to show for them. Where have those funds disappeared to? What is there on ground to justify the domestic debt level, now a staggering N6trn? Are these signs that things would be any better? Is it not inherently dangerous for a grossly incompetent administration to devote so much energy and resources to seeking another term when at half-time, it has only multiplied poverty, corruption, unemployment and hopelessness among the majority of Nigerians?

 Next week, we would draw stylized conclusions from Jonathan’s promises and look at the evolving political developments that seem bent on returning him to power in 2015 at all costs, regardless of what Nigerians think or feel, just as it is clear from the Nigeria Governors’ Forum election – that there is no way Jonathan and his surrogated can win any decently free and fair election at any level, anywhere in this federal republic! 

The input, contributions and feedbacks from readers have been truly valuable. Please keep them coming via elrufaionfriday@gmail.com or 08142997922 (SMS only).

 

Impunity, Injustice and Insecurity: What is the Role of the Law? By Nasir Ahmad El-Rufai

Nasir Ahmad ElRufai

Introduction:

It would not be far from the truth to say that as Nigerian citizens, we are being manipulated into slowly but surely losing our humanity. Social and economic inequality manifesting in conspicuous consumption by a few,  side by side with the poverty of the many, exacerbated by infrastructure deficits and dysfunctional schools and healthcare all over the country have led to deep feelings of injustice and hopelessness among our youths. Lack of opportunity, shameless corruption and a capricious political culture have destroyed institutions and entrenched a climate of impunity. Add these together and the cocktail that results is unprecedented insecurity and an attitude of self-help by citizens.

Virtually everyone in Nigeria is taking the law into his or her own hands because the state has failed to establish the rule of law and practice its tenets. This is why I have titled my remarks Impunity, Injustice and Insecurity – What is the Role of Law? I believe strongly that Nigeria’s problem is beyond corruption – Indonesia developed significantly with massive levels of corruption under three decades of military dictatorship  – but the accepting impunity as a national norm. As we are forced to live near to the Hobbesian state of nature, this occasion to remember and honor the likes of Alao Aka-Bashorun and Gani Fawehinimi that lived their lives fighting for equality, equal opportunity and justice for all, deserves our collective support and commendation. I am honored and privileged to be here alongside the respected Kanu Agabi and Professor Akin Oyebode to join you in remembering this national icon. I apologize in advance for the bluntness in these remarks, but we are at a time in our nation that pretentious and sentimental interactions no longer work. It is time we speak to the truth to one another, and outside our living rooms and pepper-soup joints. In any case, I cannot but be who I am.

Nigeria today is facing an existential crisis. In the last four years or so, practically no day passes without reports of deaths, abductions or bomb attacks. As the security operatives battle a determined insurgency, thousands of Nigerians, caught up in the crossfire have lost their lives; property worth tens of billions destroyed and development opportunities worth billions more, lost. This brings to mind a local saying that roughly translated, means “Rather a pauper in peace than a prince at war”.

As the vicious cycle of killings and retributions continue, peace remains a mirage. In the end, the entire country is suffering because there can be no real winners to any armed conflict.  Those old enough to remember the travails of the Nigerian civil war know this. Those born well after the conflict beat the drums of war and pray for a bloody revolution. I recall here the words of Reggae singer, Peter Tosh:

“Everyone is crying out for peace, no one is crying out for justice!

I want equal rights and justice.”

Peace and security are necessary prerequisites for social harmony as well as political and economic development. It is a truism that peace in any country is dependent on social justice and the availability of economic opportunities. Few can argue with the fact that the security challenges confronting Nigeria today are direct consequences of decades of neglect and lip service being paid to social and economic development. In our history, even when policies and programs begin to yield positive results, the culture of lack of continuity by succeeding administrations mean that policy-making and implementation in Nigeria almost always takes one step forward and two steps backwards.

This is why any discussion on the challenges of impunity, injustice and insecurity confronting Nigeria today must examine their root causes because it is only in probing the social and economic dynamics of the Nigerian society that we can find ways to justice, peace and prosperity. Law is the foundation of all these and has a fundamental role to play. I intend to look at a few of those issues today, and also discuss some of the things we need to do as we seek to witness the progress of our country and the prosperity of its people. It is my humble view that poverty, inequality, unemployment and the addiction to huge security spending that are destroying our humanity and peoples.

2.        Unprecedented level of poverty

A few months ago, I wrote that the average price of a measure (mudu) of beans had reached about N500 (five hundred naira) For most Nigerians families, beans and its derivatives like ‘akara’ and ‘moi-moi’ are the richest source of nutrients and very often the only source of proteins – meat, fish, milk and eggs having disappeared from their menus long ago. At that price, if a small family on minimum wage buys two ‘mudus’ or measures per week, that would spend N4,000 per month, or a staggering 20% of family income on a single food item.

Apart from beans, the price of virtually every food item has gone up while the purchasing power of most families has gone down. The worst kind of deprivation is ‘food poverty’, when parents watch their children starving. In 2011, there are over 112 million Nigerians living in poverty and can barely afford to feed. Nigeria is ranked a very poor 80 out of about 200 countries in terms of food security. Can we really expect security and stability in a country where government policies and failures have needlessly forced tens of millions of citizens into totally avoidable hunger?

Food poverty aside, other basic amenities that are required to make life bearable remain out of reach for the majority; massive shortage of housing and transport infrastructure mean that in addition to rising food costs, many Nigerian families spend nearly 80% of their income on accommodation and transportation. What would be left for other essentials of life? What about healthcare, education, clothing and others? Is it any surprise that Nigeria remains in the list of top 15 places with the highest incidence of poverty? Is it shocking to the authorities that The Economist Intelligence Unit ranked Nigeria as the worst place to be born in 2013? At current rates, it is estimated that by 2015, Nigeria will have more poor people than India and China who have more than a billion people each, while we would have less than 200 million inhabitants then.

3.        Growing Social Inequality

In societies where law and order reign and elections truly matter, governments make deliberate effort to reach out to the deprived and vulnerable members of society through various safety nets. It is not by accident that even the capitalist economies like the UK and USA build social housing to cater for millions of citizens who would otherwise be unable to afford mortgages to acquire homes. Part of the goals of such social policies is to narrow the gap between the rich and the poor and mitigate possibilities of societal disruption. After all, in African parlance, we all know that you cannot sleep well at night ‘belle-full’ if all your neighbours are hungry!

In Nigeria however, our elites have forgotten that, and not only is the gap between the classes growing wider, it seems that the country now has two economies – one for the majority that have to scrounge just to put food on the table, and an exclusive economy for the less than 1% of the population that comprise public servants and their hangers on who live in a different Nigeria – of private jets, exclusive estates, international schools, German healthcare at public expense, dedicated water supply systems, private security guards and imported champagne.

While most Nigerians are hardworking people, willing to work to earn legitimate livelihoods, the behaviour of public servants, especially politicians in power who misappropriate public funds to sustain their lifestyles of conspicuous consumption have led to growing socio-economic inequality in Nigeria. Of the over 100 million Nigerian poor, 80 million are dependents. This leaves approximately 20 million “working poor” with jobs but whose income is barely enough for a hand-to-mouth existence. Inadequacy of basic amenities like clean water, basic education, and health care which ought to be either accessible or practically free further compounds the situation.

To take just one instance – education. According to a study by the British Council, Nigeria was meant to have 16 million students in secondary schools in the year 2008, but the number enrolled was 5.8 million, which suggests that only 36% of the age cohort was accommodated, and more than 10 million are out of school. Also, out of the 1.7 million candidates that sat for the Unified Tertiary Matriculation Examination (UTME) last month, at best, 10% will secure university admission. What happens to the remaining 1.5 million, or the 2 million who may write the exams next year?

At a Pan Africa Investor Conference in Lagos in February this year, the Minister of Finance, Ngozi Okonjo-Iweala said that about 80% of Nigerians hold 35% of the nation’s wealth while 20% hold 65%. Therefore, 20% of Nigerians are in the upper classes, and 80% in the lower classes. In practically every aspect of life, the growing inequality is evident and escalating. If ever there was a trigger for social unrest, it would be to allow this gap to continue to widen. As it is, most Nigerian elites hardly venture outside major urban centres for fear of kidnapping, robbery or danger of falling victim to any of the many communal crises that often break out without warning. With this kind of uncertainty, is it really rational to ask the question whether the law is playing any role in our land?

4.        Youth Unemployment

I began this address by talking about mounting poverty which has led to social inequality. The major factor behind Nigeria’s poverty and inequality is unemployment and under-employment. Can we really talk about law and order in the country when we have tens of millions of idle hands with nothing to do? From data available from the National Bureau of Statistics, the unemployment rate for both sexes is 29.3%. Other estimates suggest that that at least 20 million (or 42%) of Nigerian youths between the ages of 18 and 35 are unemployed.

Some estimate that only about 20 million Nigerians have jobs of any kind, out of a population of nearly 170 million. Many young people do not have jobs and have little hope of finding one. I get approached by many young graduates to help them find jobs, and I do my best. When they get impatient at the lack of progress in getting the job offers, I share with them the fact that I have two daughters with masters’ degrees and unemployed as well, and then they understand how bad the situation is. This state of affairs causes the country a loss of several trillions of naira annually from the absence of commercial activities that ordinarily should have taken place but did not. The social cost is unquantifiable but has short and long term consequences on the security and stability of the country.

Can we truly expect peace when several years after graduation and already in their 30s, we have millions of young men who have to ask their parents or relatives for money to pay for a haircut? Can we really expect a secure society when millions of our young ladies, despite graduating with good grades, remain unemployed or unmarried simply because the basic ingredients for settling down – a job and a home are not only unobtainable, but way out of reach? Can we truly expect peace when our pensioners – who dedicated their lives to serving Nigeria – collapse in the hot sun waiting for their dues, while those that embezzle pension funds get a slap on the wrist?

Have we studied the implications of our population growth along with the nearly 30% unemployment rate? Nigerians make between 6 and 7 million babies every year. At least 3 million new people join the ranks of the unemployed every year. This means that even if by some miracle, government and businesses manage to create one million new jobs a year, it would take 20 years to close today’s existing job gap. Except that by that time, at least 60 million more Nigerians would have joined the labour force, but would have no jobs! We are sitting on a demographic bomb, and with the visionless leaders we now have, it is bound to explode sooner rather than later!

5.        Addiction to Security Spending and Amnesty Regimes

About two years ago, I raised an alert that the federal government was spending an average of N2bn each day on security without commensurate returns. Instead of denying or even explaining its position, the government had me arrested. Since then, the situation has actually become worse. This near, nearly a quarter of the entire budget, that is, over N1 trillion is be spent on defence and security translating into some N3bn daily. The question is, are Nigerians better secured now than in 2011, or has security spending joined the ranks of fuel subsidy as another annual trillion naira fraud?

Nigerians must begin to question whether the huge fiscal allocations to security and amnesty programs have any significant benefits beyond lining the pockets of a few defence contractors, civil servants and top military brass. Has the N100bn annual amnesty program really developed any long term solutions to the major issues of the Niger Delta region? Is crude oil theft and pipeline vandalization not at its highest today – even higher than the pre-amnesty levels? Have the killings and kidnappings in the region stopped?

This brings me to one issue that has remained in public discourse in the last month or so; the proposed amnesty for members of Boko Haram. Before I talk about this new amnesty proposal, it would be fruitful to look back at the amnesty given to the Niger Delta militants which was launched and backed with a blank cheque book in 2009 by late President Umaru Yar’Adua.

Government tells us that due to the success of the amnesty program, Nigeria’s oil production has grown and that the country now earns more revenues from oil exports. Of course, this is another false assertion, as our oil production is now at its lowest level in four years. According to Reuters, Nigeria’s oil exports will fall to a four-year low as a result of crude oil theft and resultant facility closures by some oil companies. Quoting the shipping lists, Reuters says Nigeria will now export 1.76 million barrels per day, the lowest since August 2009. Assuming that the claim of government is true, one is tempted to ask, why is it that despite the increased government revenues, poverty and unemployment have worsened?

However, let us remain on the issue of amnesty for Niger Delta militants and ask a few posers: How come, despite the advertised success of the Amnesty program that the destruction of oil pipelines still prevalent, thus prompting government to propose the creation of a new agency  (with another huge budget) to protect pipelines? How come oil theft has reached high historic levels? Are security agents still not routinely killed without consequence? What about the hundreds of illegal refineries ‘discovered’ every day?

While we respect the rights of all citizens, militants included to demand for better governance and their fight to protect the environment from the activities of predatory oil companies, should we condone brazen theft, criminality and violence while rewarding the conduct with cash hand-outs? Government must not reward criminality with a blanket amnesty that only serves a few people for whom the amnesty fund has become a source of easy monies to be pilfered. Any society that chooses to reward bad behaviour or bribe those that take up arms against the state with a blank cheque book should expect to see more and people doing the same. The fundamental issues that spurred the militancy still remain unresolved; unemployment, environmental degradation, poverty, lack of basic amenities and social injustice.

In what ways has the amnesty program resulted into better living conditions for the many millions who did not take up arms against the instruments of state and did not vandalize public property? In the end, the amnesty program has been transformed into slush funds to induce and convert a few outspoken militants while the unfortunate squalor in the Nigeria Delta remains, even with unprecedented revenue flows into the region.

As to the issue of amnesty for Boko Haram, the two sets of circumstances are not related, thus a similar kind of cash-backed amnesty, flawed as it is, may not work. For many of us, what the government should do is not talk about amnesty but simply implement the recommendations of the many committees (led variously by Galtimari, Monguno, Sheikh Lemu and the Borno Elders) that it initiated and were submitted as far back as 2010. To take just one instance, in June 2011, before it started its bombing campaign, Boko Haram reportedly gave the federal government some relatively easy conditions to facilitate a ceasefire, which at any rate, should be a precondition for negotiations before any issue of amnesty can be put on the table. What were those conditions?

Boko Haram claimed that their leaders had been arrested and executed in cold blood and therefore demanded an apology from government. They asked that the families of their executed leaders be compensated and those responsible for their execution be put on trial. They also asked for the release from police custody of their wives and children who had been detained for months (now years) without trial. In other words, the group initially demanded justice for the murder of their leaders and their family members being unlawfully detained, which is what our legal system owes every citizen, immaterial of whatever crime he or she is accused of.

One does not agree with the doctrinal philosophy if any of Boko Haram, but few can deny that their demands were not extraordinary; what is wrong in admitting that the extra-judicial murder of their leaders was wrong? Is it beyond government to prosecute those that gave the orders and those that carried out the executions? Even our legal system demands that. What is the point of detaining women and children for years without evidence worthy of admission in a criminal trial? Is that too, not a breach of our own constitution and laws?

If the Jonathan government had taken steps in response to the above two years ago, many lives would have been saved. Cases like the Baga massacre and the Bama retribution might not have occurred if government had taken a sensible approach to the BH-related crises. The government did not because it did not believe any Nigerian life to be sacred and worth saving. It is a silent policy of the Jonathan government, recently made official by one of its surrogate mouthpieces that some people from a part of Nigeria are considered parasites that can therefore be killed without consequence!

The point must be made that Boko Haram militants do not appear to have the same economic objectives like the Niger Delta militants and there are fears that they may not react to the cash-called offer of amnesty in a positive light. Those pushing for amnesty for the group are perhaps angling for a monetary arrangement similar to the Niger Delta amnesty program so as to get access to whatever funds that would be released for the programme. Government must have the courage to resolve the fundamental issues of unlawful killings, detention of women and children and human rights violations in battling the BH insurgency, and not attempt to sweep them under the carpet of amnesty or any state of emergency proclamation.

6.        The Country We Live in:

Our people have been successfully divided by our elites along ethnic, religious and regional lines. This chasm has been so deep and successful under Jonathan that it is impossible to have any sensible discussion with most people in Nigeria about any issue without the intervention of these evil lenses. One needs to spend some time on social media to appreciate how bad the situation is. What is even scarier is that the division and bigotry is more intense amongst young people thus ensuring a bleak, divisive and violent future for our nation. Our governments are incompetent, incapable and lacking in vision, and therefore rely solely on these chasms to justify their occupation of public offices.

Should professionals remain silent when the Bauchi state governor budgets more money for his “security vote”, that is his more like his personal pocket money – than education and health in 2012? What about a president that hands over our maritime security to an ex-militant while the Nigerian Navy looks on helplessly? Would Gani Fawehinmi and Alao Aka Bashorun not have approached the courts for a judicial review of such executive actions? Would not the naming and shaming of some of these officials and their decisions not advanced our legal and social development? It looks like apart from Femi Falana, Bamidele Aturu and our Abuja-based Ajayi Olowo, very few lawyers are doing these pieces of ‘pro bono’ national service!

While most of the world moves forward, we are moving backwards by not investing in physical infrastructure and human capital, but giving birth to an army of under-educated, entitled, angry and bigoted youth brought up to believe that cutting corners is the roadmap to success. As professionals and elites, many of us have succumbed to these chasms and failed to stand up for what is right as Aka Bashorun would have done. I will give specific examples relating to the legal profession later in these remarks. I would like to observe that similar observations can be made for other professions, but it is the primacy of the law as the foundation of societal order that makes yours of greater concern than others.

What should the legal profession say or do in the light of our current situation? What should it do? As a law student, my favourite subject was jurisprudence. I found connection with the legal philosophies of Ronald Dworkin. Dworkin in analyzing what value is the most important in organizing society amongst equality, liberty, democracy and law concluded that:

“No government is legitimate unless it subscribes to two reigning principles. First, it must show equal concern for the fate of every person over whom it claims dominion. Second, it must respect fully the responsibility and right of each person to decide for himself how to make something valuable of his life.”

These have implications for distributive justice, policy and law, and Dworkin posits that equality is the most important value that determines everything else. By Dworkin’s standard, is our government legitimate? Is the legal profession standing up to be counted in making our society saner, safer and secure?

7.        Is the Silence of the Legal Profession Golden?

Gani and Aka-Bashorun did not see the law as a source of bread-and-butter. They went beyond just earning a living from it by pursuing social justice, constitutional, legal and moral fidelity for every citizen as a matter of principle and reason for being lawyers. I am going to challenge you all at this point by reminding us of a few incidents that required not silence on the part of the legal profession but lots of voices, action and litigation.

(1)      Extra-judicial Killings: It is well-known that our law enforcement and security agencies routinely execute robbery ‘suspects’ in their custody. The killing of BH leaders in 2009 is one of the remote causes of the current insurgency. More recently, Maiduguri residents have witnessed the continuation of these killings by the JTF which considers every young man a BH suspect that is first arrested, detained and killed. These days, parents in Borno and Yobe States check the mortuary when their sons go missing for days instead of reporting to the Police as ‘missing’.

(2)      Aluu-4 and Self Help: As the justice breaks down, and law enforcement officers kill suspects in custody, it is inevitable that it will permate to the rest of the society. Some seven months ago, Tekena Elkanah, Ugonna Obuzor, Chiadika Biringa, and Lloyd Michael all students of the University of Port Harcourt were killed by a mob in Umuokiri-Aluu community in Rivers State on Friday October 5th 2012. We are still waiting to see if someone will be held responsible for their murder.

(3)      Awaiting trial suspects in Nigerian Prisons: In Ghana, only 30% of the prison population is awaiting trial. In South Africa, it is only 30%, Even Tanzania and neighbouring Cameroon are doing better at 50% and 58% respectively, compared with our disgraceful 71% in 2009! If our criminal justice system works better, we should expect to see more convictions and a rise in the ratio of convicts to total prisoner population.

(4)      Consistent Violations by the President: In addition to the example of the State of Emergency mentioned above, President Jonathan has consistently violated the constitution by signing money and non-money bills ‘into law’ after the constitutional 30 days to assent have passed. It is curious that the legislature, the media and legal profession have remained silent in light of the lack of fidelity to basic rules of constitutional order.

(5)      Justice Salami’s suspension and aftermath: The many ramifications of this misfortune in our polity require no comment as it is ‘sub judice’. What is clear is that it is unlikely that any presidential candidate or party will submit to any election tribunal in the future. How future election disputes will be settled will be anyone’s guess, with serious consequences on the legal profession and the polity. The endless trial of the fuel subsidy thieves side by side with plea bargains for treasury looters while thieves of goats and cellphones get quick convictions with harsh sentences have created the impression of two legal systems – an easy one for the rich that can afford senior advocates, and a hard one for those that cannot!

(6)      Governmental capture of civil society: this manifests in not just the registration, funding and promotion of all kinds of rogue CSOs to challenge genuine ones like the case of Save Nigeria Group, but attempts to corrupt electoral processes in organizations like the NBA, the Nigerian Labour Congress and even Student Union Governments all across the country. If the NBA allows its elections to be influenced by the government in power, what hope is there for it to be a voice of the oppressed? How then can it sanction members that engage in professional misconduct if and when that happens?

The foregoing examples and more are partly responsible for the increasing resort to self-help by citizens and organizations, and decreasing reliance on the legal system and practitioners.

Just last week, a distinguished lawyer, member of National Executive Committee of the NBA and chairman of the National Human Rights Commission raised the alarm about the near-death of the legal profession in the North-East. In the areas under BH insurgency, lawyers have been harassed for representing people arrested and detained by the JTF. Many have left the region for safer climes, leaving a vacuum that all of us can appreciate, while the Abuja and Lagos-focused profession has remained silent. The question that should occupy our minds is for how long will the legal profession remain relevant in the face of these onslaughts? Will you have jobs when most people resort to self-help?

8.        What Can Lawyers and Citizens Do?

Standing up for what is right for its sake is in our overall self-interest as elites. I think the starting point is to wage war on the forces and voices of division. Here I am referring to those bigots that promote a ‘Them vs. Us’ lens and mentality in approaching every situation and human interaction in a manner that only animals do. We should recognize that that there are only two types of people in the world – good and bad, and these are found in every ethnic, religious and regional group. They are found in every family, clan and community.

There is no group of people that are entirely good or totally bad. It is that common thread of humanity and diversity that God willed in us as He created this world and those that will inhabit it. Sentiments and bigotry can take us some distance in the short term but no nation has been built and developed without objective visioning, merit-based leadership and equal concern for the progress of all citizens in the long term.

I believe we must, as a country and citizens, reject the current regime of division, bigotry and group hatred and instead focus on a handful of priorities – good governance, competent leaders, clean elections, and an accountability framework based on the rule of law. In my humble opinion, good governance is the foundation of everything, and manifests in the election of competent leaders. It is my strong view that it is good people that are competent and focused that transform societies for the better, and in the process, entrench the rule of law assuring everyone of equal concern for welfare and progress.

The legal profession can and must do more. For instance, expunging some provisions in our Constitution relating to appointing an “indigene” from each state as minister would be one of the right steps in getting rid of   geographic and demographic sense of entitlement over the ability to perform in public leadership selection. Criminalizing ethnic, religious and regional hatred by legislating curbs on ‘free speech’ is urgently needed in our country today to ensure that we focus on the handful of priorities I referred to. The Bar should be at the forefront of standing up for these and other reforms.

9.        Conclusion

In conclusion, I must state categorically that even in these difficult times,  re-establishing security, law and order is possible and is indeed, the only way forward for Nigeria. There is no doubt that each and every Nigerian should and must embrace peace. But peace is not simply a word. It is a living and breathing concept that must be exercised to be attained. Peace is only possible where there is justice, where there is respect for the rule of law, where impunity has no place, and where citizens have the power to determine who represents them in free and fair elections. Insecurity will reduce in Nigeria if we reduce corruption and nepotism and focus on the key challenges of eradicating poverty, managing the growing social inequality in our society and creating opportunities for all Nigerians to become stakeholders in the country.

Once again, I thank Chima Ubani and the Ikeja branch executive committee for giving me this opportunity to share my views and hope that through occasions such as this, we can join hands in building a better country where peace and security reign based on social justice, mutual respect and understanding amongst all the people of our potentially great nation.

Thank you once again for the honour and opportunity to be with you, and God Bless.

Mr. El-Rufai  delivered this address on Thursday, May 23, 2013 at the NBA Ikeja Branch Aka-Bashorun Memorial Lecture 2013, Ikeja, Lagos State

 

Jonathan’s Half-Time: Club Down, Manager Out, By Nasir Ahmad El Rufai

Nasir Ahmad ElRufai

May 6th 2013 would make it 3 years since Goodluck Ebele Jonathan became president of Nigeria. As an elected government, the administration would be celebrating its second anniversary next week. It therefore is the right time to look at how well it has fared. Two years is sufficient time to examine what promises have been kept, what projects are on schedule and which have been dumped altogether.

With elections drawing closer, it is imperative that Nigerians know if the campaign promises made to them are being fulfilled, especially as majority of the electorate admitted to casting votes based on sentiments of a president from humble backgrounds who had no shoes. Others voted because they shared Jonathan’s ethnic and religious affiliations. Now is the time to reflect on whether our choices have translated into improved socio-economic conditions for Nigerians.

Assessing the government’s performance will provide valid basis for the electorate to make more informed decisions at the next polls and perhaps set the tone for questions like: does this candidate possess the leadership qualities required to govern a nation? Does he/she have a track record of delivering on promises made? Is he/she an achiever or able to make noteworthy differences in positions of trust?

Perhaps the process should begin by highlighting the campaign promises made by President Jonathan more than two years ago and subsequently evaluate these promises and the progress made on them. Incidentally, because candidate Jonathan did not have a campaign manifesto with targets and specific timelines, his campaign promises are vague and achievement almost immeasurable. For agriculture, he proposed the following:

On February 17th 2011, the president promised the people of Benue state a five-year plan to revolutionize agriculture and establish industries in the country as well as complete the Otukpo irrigation project; on February 9, in Bauchi and on March 20, in Birnin Kebbi, he assured that the Jada irrigation project and Kafin Zaki dam in Taraba, Adamawa and Bauchi would be pursued to boost agriculture and industrial development; In Lokoja on February 21, he promised to explore the agricultural potential of the state to boost food security; in Ilorin, also on Feb 21, he promised to grant loans to farmers and ensure the agricultural transformation of Kwara State and in Jos on February 17, he promised to build more dams and complete ongoing ones in order to boost irrigation farming in Plateau; he also promised to encourage the establishment of more agricultural research institutes.

Continuing with his campaign in Akure on March 2, Jonathan promised to provide funds for mechanized farming and agro-based industries, quoting him, he promised; “to open up the flank of semi and mechanized farming in the State to engender a paradigm shift from subsistence farming to reliable modern agricultural practices”; in Osogbo, he promised to enhance agricultural irrigation and provide farmers with adequate information; in Kaduna, he promised massive transformation of the agricultural sector through construction of large dams and distribution of fertilizers. At the Presidential Summit on Job Creation in Abuja on April 12, he promised to make Nigeria an exporter of rice.

On infrastructure, the president declared that roads and other basic infrastructure would be developed in four years; he said in Ibadan onFebruary 9 and in Bida, February 22 that road construction would take a new five-year structure, ending yearly budgetary allocations; in Aba he promised to provide facilities that would boost the enterprising spirit of the Igbo; upgrade the Enugu airport to international level; dredge the River Niger; build a dry port; complete the Second Niger Bridge; rehabilitate all the main roads into Abia and tackle the erosion crisis.

While in Uyo, he promised to build coastal roads and rail from Lagos to Calabar, in Awka he promised to construct all major roads which link Anambra with its neighbors and complete the Onitsha Inland Port. He equally promised to provide potable water to Onitsha and Nnewi cities and tackle erosion in the South-East; in Dutse, Jonathan promised to establish airports in all the states without airports, with Jigawa as his starting point; in Abakaliki, he promised the South East zone priority in fixing its dilapidated road network and to dualize the Enugu-Abakaliki road within one year. He also promised to establish a secretariat for ALL Federal government’s agencies and parastatals in Ebonyi.

In Lokoja , Jonathan promised to revive the Ajaokuta Steel Complex and the Itakpe Iron Ore Company; ensure the speedy completion of the Lokoja-Abuja road project, and dredge the lower and upper River Niger; in Ilorin he promised the rehabilitation of the nation’s railway system the Ilorin-Mokwa road; in Jos , promised to complete the Vom-Manchok-Jos road to boost economic links between Plateau and Kaduna states and in Abeokuta, he promised to revive the railway system; revive ailing refineries and build new refineries.

Promises were coming in thick and fast: In Osogbo on March 2, he promised to complete the Lagos-Jebba rail project right away and to complete the Ife-Ijesa dam; at the Northern Economic Summit, Kaduna, on March 19, Jonathan promised to spend N350 billion in building small dams across the North in the next four years to stimulate “massive irrigational farms”; in Benue, he promised that the Benue Bridge projects will be worked on in the next four years; also in Kwara State, President Jonathan pledged that the Jebba-Mokwa road and Jebba Bridge would be given adequate attention to ease transportation; in Sokoto, he promised to rehabilitate the abandoned Shagari irrigation project and fight the menace of desertification in the country.

On education, Jonathan made the following promises: in Obafemi Awolowo University, Ile-Ife, he promised a holistic review of the nation’s education policy; in Bauchi, he promised to establish two universities in the region and construct schools with modern facilities for 9.5 million Almajiris; in Birnin Kebbi, he promised to establish schools for Almajiris and ensure the take-off of the Federal University in Kebbi by 2012. In Lokoja on February 21, he promised to establish a new federal university in the state; In Lafia; in Gusau on March 15, he promised to establish a Federal University of Technology within one year.

Some of the promises made with regards to the economy are: in Ibadan, President Jonathan promised to “create jobs”; in Port Harcourt, he promised to build a petrochemical plant that will create job opportunities for the Niger Delta youths; in Plateau, he pledged to refocus on the solid mineral development and launch “a straight fight” against poverty; to create wealth by improving power and water supply; on February 24, Mr. President pledged to rehabilitate all ailing industries in Aba and make Aba the hub aircraft production in Nigeria; in Asaba, he revealed that “The NNPC is developing a new programme that will absorb about 5,000 youths in the state” and promised to unveil a five-year development plan; in Ondo, he promised the exploitation of the vast bitumen deposits; in Katsina, he promised to enhance the living standard of Nigerians through implementation of people-oriented programmes and in Kano, he pledged to encourage the development of small and medium scale enterprises; during the one-man presidential debate on March 31 in Abuja, he promised to expand and develop the downstream sector of the oil and gas industry to provide about one million jobs.

In Lagos on February 28, Jonathan promised to partner with Lagos State in the interest of its continuous growth and the nation’s economic buoyancy. “We have taken this period to study what we are going to do and by your mandate in May 29, we will hit the ground running,” he said. On Feb 21 in Ilorin, he promised to tackle poverty and revitalize ailing industries; in Abuja on March 21 at a meeting with leaders of the National Union of Road Transport Workers, he promised to build car manufacturing or assembly plants.

Concerning security, the president made the following promises: In Aba and Enugu on February 12, he promised to stamp out kidnapping; in Bauchi, he guaranteed that he would combat rising terrorism in the area; in Ilorin also on Feb 21, Jonathan promised to end discrimination along ethnic and religious lines. On February 7, in Lafia, he said he would clampdown on kidnappers and criminals; pursue law breakers to the ends of the Earth, and ensure there would be no sacred cows. In Ibadan, at the South-West launch of the campaign, he promised to: run a transparent government; treat all citizens equally and respect law and order.

To address the epileptic power supply in the country, President Jonathan promised the following: In Awka on Feb 26, he said the ongoing aero-dynamic survey of gas in the Anambra River basin would be completed, leading to increased power supply and a Liquefied Natural Gas (LNG) industry. He vowed that Nigerians would not be talking about generators after his four years in office. In Lafia, he promised to end chronic power shortages; in Minna on Feb 15, he promised to establish three power projects in the state at a cost of $2.1bn (about N315bn).

On Feb 25 in Anambra, he announced plans to build a power station in the state and on March 12, he promised improved power supply before the end of the year through the Integrated Power Project (IPP) initiative in Ogun state; in Bauchi on February 9, he assured that projects such as the Mambilla hydro-electricity would be pursued.

President Jonathan’s promises on oil and gas include: To revive ailing oil refineries and build new ones (Abeokuta March 12); to invest in petrochemicals, mining, research and development (Osogbo, March 2); at the launch of his South-South Campaign, he promised to commence “transformational changes” in the South-South; he said the NNPC had begun investing in the petrochemical industry in the region and that the people in the region would be given a voice in the oil and gas sector. He promised to make the Niger Delta region the hub of the petrochemical industry in Africa. He also guaranteed the implementation of Local Content Law and Petroleum Industry Bill (Port Harcourt, February 12); that oil revenues would be managed better and a refinery would be constructed (Lafia, February 7).

In Asaba on February 26 he promised to transform the Nigerian oil and gas industry and make it the destination of choice for investors in Africa; convene a stakeholders meeting across the country where communities will be able to determine their priority programmes; he promised to intensify oil and gas exploration in the North-East Zone (Bauchi, February 9); he pledged to build more refineries and encourage downstream activities (March 12, Ogun state).

Interestingly with the barrage of challenges in the health sector, not many of the promises were focused on health. Here are a few promises he made: In Abakaliki on Feb 25, he promised the South East geo-political zone priority attention in healthcare delivery and that the Federal Medical Centre in Abakaliki would be converted to a teaching hospital;

Next week, we would evaluate the fulfillment of these promises (partial or complete) within the two year period of the President’s tenure. We would also welcome feedback from our readers on specific promises made by the president to assess his performance. We can be reached on elrufaionfriday@gmail.com and 08142997922.

Soludo’s Solution of Anger and Innuendo, By Nasir El Rufai

Nasir Ahmad El-Rufai

Long before the publication of The Accidental Public Servant, I had decided to resist joining issues with whatever commentators wrote in response to the book by way of either attacking the author or its contents. It is a narrative of my experiences and views, and   I would simply invite others to document theirs. Many of those that commented on, or ‘reviewed’ the book had not even read it in full. Others had decided long before it was published that they would attack El-Rufai and whatever he writes, while a few others were simply going to be unhappy with how they were presented in the book as being less than perfect. When one writes a 700-page book, one has to take a deep breath and allow others the slack to write a few pages in response, however disagreeable or abusive.

When I wrote The Accidental Public Servant, there were no illusions that its account would be uncontested. As I have said repeatedly, it is simply my account of the people and events that defined my years in public service. I took several precautions (such as double-checking from the copious notes and diaries of events that were taken after every major encounter – about forty seven note books in total) of ensuring that it is a truthful, balanced and fair account of my experience. I do not have a professorial memory, so kept daily journals of events including verbatim records of statements. I am delighted that I took the time to write it, and I once again encourage others who have been privileged to be in the public service to similarly record their experiences. Those who may choose not to write books can still contribute by responding to specific issues mentioned in my narrative on which they may have other information, however critical or contrary to my account.

Professor Charles (I have always called him Charles because that is how we were introduced. I have never gotten used to calling him Chukwuma) Soludo approached me at the end of the recent thanksgiving service for my sister, Oby Ezekwesili, to complain about some of the assertions in my book concerning him. He denied that he owed his consulting jobs with the World Bank and other institutions to Ngozi Okonjo-Iweala. He denied being mentored or taught by her father. He added that he had not read the entire book but would send me two pages of his initial observations. I encouraged him not only to do so, but publish it and work on a book documenting his experiences. Knowing Charles as I do, I had no doubt that he was already doing that and the first episode has now been published in his fortnightly column in Thisday.

Thus, his rebuttal did not come as a surprise; given  that I encouraged him to do so as I have nothing to hide. Even so, it is shocking that he chose to sensationalise his version of events by describing The Accidental Public Servant as intellectual fraud. There is a question mark in the title of his article, but the last sentence of Charles’ diatribe restated his magisterial conclusion. He went further to provide his own definitions of fraud as “an intentional deception made for personal gain or to damage another individual” or “as course of deception, an intentional concealment, omission or perversion of truth”; only to stop there! Fraud has a technical and legal definition and if Charles had bothered to consult his lawyer, he would have gone beyond the ‘online definition’, but that is another matter for now.

It is illogical to contest someone’s CV with him in the absence of contrary and superior information. I therefore concede to Charles’ account of his professional odyssey prior to his being introduced to us in 2000 by Ngozi Okonjo Iweala, long before joining the Obasanjo government in 2003. The logical question therefore is how any of the examples he gave of the errors in his resume would without more, rise to the level of fraud? Why would I intentionally deceive the world that Soludo’s tenure as governor of CBN started in mid-2005 rather than May of 2004? This only occurred when one of the book’s editors thought the 2004 date was wrong and ‘corrected’ it but that escaped subsequent editorial reviews. What is the personal gain to me in describing Soludo as a protégé of Professor Okonjo or how did the description damage him when he just referred to the same Professor Okonjo as “respected”? So, Charles needs to substantiate how any assertion, error or omission in the book amounts to “fraud” per his definition.

After that, I do not see much that is significant to warrant a clarification from me. One friend on Twitter observed that Charles’ polemic had so much anger and little substance that he truly sounded as angry as a woman scorned!  Much of Charles’ response is enlivened by innuendos. He repeats the frequent charge about my ambition for the presidency in 2007, a charge that is untrue but that is often echoed as if that ambition, if it existed, is akin to treason. Charles knows that I do not consider illegitimate his desire to be governor of his state or his current hopes to be a presidential running-mate. But he should know better than most that ambition for office is not the only reason for being active in politics. Since Charles has claimed that I ‘schemed desperately’ to succeed Obasanjo, he should please tell all – inform Nigerians what I did, who was involved and spill the beans! Virtually all the narratives in The Accidental Public Servant about Charles involved others that are still alive, and if he said I made them up, perhaps he should state his version and invite others mentioned to invalidate my claim instead of calling anyone a liar just because he did not like the way his conduct appeared in the book.

Charles was introduced to me by Ngozi, and that was the foundation of our professional relationship and friendship. As far as I know, it was also Ngozi who proposed his name for economic adviser and Oby (and her husband) took him to Obasanjo several times before he was appointed. If Charles is denying that this happened, that is fine. It does not change the facts, and those that did what they did know what they did or did not do! Why is Charles so hurt that others have helped him?  Is he suggesting that he had won the Nobel Prize in Economics and that is how Obasanjo got to meet and appoint him?

Charles presented his jaundiced interpretations of what I wrote in clear language as my views in his piece. For instance, there was nowhere in the book that I wrote that ‘Ngozi was power hungry.’ She was pragmatic and realistic about power relations. How does that equate to being power hungry? Charles is playing with words in a patently dishonest way, knowing that many that will read his piece have not read the book, but he is not the intellectual fraud! Charles also asserted that I forced myself on the economic team and “destroyed it”! Was it El-Rufai that composed the membership of the team? When and how was the team single-handedly destroyed by me? As far as I know, warts and all, the economic team kept on working till May 29, 2007. Again, I invite Charles to educate us all now, bearing in mind virtually all the team members are still alive and around, even after he stopped attending its weekly meetings.

In the book, I wrote that Charles did many things to ingratiate himself to Obasanjo, one of which was to attribute every good ‘idea’ to the latter; not actual achievements, since there were few in the early days. Charles’ response was to misrepresent what was written, just as he knows that there is no weight to the claim that appointees under a presidential system cannot claim credit for their work. To acknowledge the opportunity President Obasanjo gave me to serve, and the support he provided to help us succeed at the FCT is very different from pretending that only the boss had any ideas on how to administer Abuja, or that he oozed perfection, presidential system or not.

Charles also came out guns blazing questioning my narratives of events involving his new mentor Atiku Abubakar, and Nuhu Ribadu and Obasanjo. In Charles’ views, these three people made me tick in government and I should be eternally grateful. Charles has not read the book. If he did, he would have come across all the instances in which I gave each of them credit for what they did right and how they contributed to the work I did. Unlike Charles who makes people believe they are perfect when he needs them, I was consistent in and out of office in pointing to those I worked with where I believe they went wrong  just as I was self critical of my own shortcomings. In Charles’ vocabulary, that is ingratitude. In mine, it is simply utilitarian sycophancy to attribute perfection to imperfect mortals because they are likely to help one’s career next week!

Charles claimed that I pleaded with him to provide technical assistance to BPE. That is false. That conversation just never happened. Those familiar with BPE know that we hired people either as regular public servants, individual consultants called ‘core team’ members that work full time in the organization or investment bankers and consulting firms like lawyers and accountants that provided periodic transactional services as needed. Charles and his economic consulting firm did not fit into any of the three categories. I appointed him to the membership of two reform steering committees – Competition and Anti-Trust and the Industry and Manufacturing Reform Committees along with persons of the calibre of Pat Utomi, Oby Ezekwesili, and Aliko Dangote. I was the coordinator of both committees as DG of the BPE, with Ibrahim S. Njiddah, now a presidential assistant doing the day-to-day management. I am now learning from the Charles’ piece that he single-handedly did the work of the Competition Reform Committee for free. I did not realize that all the other notable members did nothing! Well, thanks Charles, but Steering Committee members got hotel accommodation and were paid sitting allowances by the BPE, so I do not quite understand what was meant by asserting that you did the work free of charge.

That leaves us with asking Charles to detail the fraud he alleges was attendant to the efforts we made to restore the Abuja master plan. He claimed that my ‘vindictiveness’ nearly ruined the exercise. Really? There is need to say more right on this away. I am challenging Charles to substantiate these innuendos with names and details of my alleged vindictiveness in his article since everybody knows that my service at the FCT is a matter of public record that has been investigated by several institutions unsympathetic to me, and all Abuja residents know about and still comment upon it.

The rest of Soludo’s article was spent blowing his trumpet of banking consolidation with his characteristic modesty! The dismissal of Charles’ over-hyped banking consolidation in The Accidental Public Servant therefore appeared to upset him more than anything else. He is still under the illusion that his ‘revolution’ changed our lives the way GSM licensing did! No one needs a single 234NEXT to see through the hype and the disingenuous comparison. Banks like First Bank, UBA, Union, Zenith IBTC, and GTB needed no consolidation. They had sound business models and were doing well without it. Soludo’s consolidation abolished investment banks and regional banks, while creating a few ‘big’ banks with funny names many of which were either comatose by 2009 or had to be subsequently saved by the Sanusi Lamido Sanusi rescue exercise. It is pathetic to measure the success of consolidation by the number of banks in the top 1,000 banks in the world. Did that ranking translate into increased lending to the real sector, greater employment opportunities for our people and intensified mobilization of savings in the way the GSM revolution did? No way, only massive margin loans to create a stock market bubble, engender insider lending and incestuous relations between regulators and operators in the industry.

The kind of targeted interventions needed to fill the gaps sustained by some of such policies were opposed by Soludo unless the ideas originated from him. As CBN governor, Charles did all he could to frustrate the attempts to establish a national mortgage system and was openly critical of Ngozi’s drive and contributions in getting the Paris Club debts written off for the simple reason that the the credit might go to others not Soludo!

Charles is free to beat his chest and claim that the deformed baby called consolidation was a revolution, but today many of the poster-children of the policy like Intercontinental, Oceanic, Finbank and Spring Bank are history, the banking-stockbroking rock stars are facing prosecution, and with N4 trillion spent to prevent the collapse of his revolution. When Charles’ memoirs are published, those that either witnessed it or had to clean up ‘the world’s fastest growing financial system’ will have their own views. And it will be good for the country. After all, it has been said that every story has at least three sides, my version, your version and the truth which lies somewhere in between the two.

If one refers to a book one finds disagreeable as intellectual fraud while insisting that a cancer one created that has cost nearly the annual budget of the federal government to treat, so far, as a resounding success, then what more is there to say? It simply points to the moral and psychological mind-set of such a person.

Young Voices – Introducing ‘Dada Olusegun

Dada-Olusegun1

“You cannot be passive when people in thousands die daily due to negligence of government.”

The rising popularity of social media among young people has become such a nightmare for Nigeria’s rulers that are afraid of openness and information symmetry, that the Jonathan administration is spending a whopping $40 million to read their emails, romantic exchanges and other ‘subversive’ exchanges. Interacting regularly with young people on Twitter and Facebook gives the older generation both hope and concern.

‘Dada Olusegun is one of those young people that have been making positive contributions in cyberspace. He is just 25 years old! He attended Awori Ajeromi Grammar School in Lagos and graduated from Ladoke Akintola University of Technology Ogbomosho with an honours degree in Pure and Applied Chemistry! Yet like many of the multi-talented youths we have introduced on this column, Dada writes as if he studied humanities, the social sciences or even literature.

Dada was very active along with Yemi Adamolekun, Japheth Omojuwa, Chinedu Ekeke, Seun Fakuade, Zainab Usman, Momoh Adejoh and Amina Saude Mohammed and numerous others during the #OccupyNigeria movement that successfully resisted the imposition of the surreptitious Jonathanian tax called 'fuel subsidy removal. He is a talented writer cum social change advocate. He is a regular political columnist on #EkekeeeDotCom and contributor on numerous online blogs and newspapers. He is a gifted public speaker who is also involved in youth empowerment and
enlightenment.

Today, Dada issues a call to action and appeals for Nigerian citizens to end their lethargic acceptance of bad governance, looting and impunity by claiming to be neutral. Indeed, Dada thinks such people are simply cowards. Do you agree? It is my honour and privilege to introduce another vigorous young voice, Mr. ‘Dada Olusegun for your weekend enjoyment. Nasir Ahmad El-Rufai

‘These Cowards’ – By Olusegun Dada

Let me put it this way: I have seen many things in my life. I have seen certain people who treat passivity as some kind of heroic action. There are people who say, “I just want my job, my family, and my religion and I will leave politics out of my life.” Passivity isn’t heroic, it’s cowardly! It’s the lazy man’s easy way out. But I see it beyond laziness.

Let me say this to those people: you’re idiots! While you’re asleep in front of your own life, they are screwing you. While you shut your mind to national issues, they are mentally gang-raping you. While you’re living out your life, they are ripping you off; they’re pulling the carpet from under you, tripling national debts that your children and grandchildren will not be able to pay till they die.

You’re idiots for closing your eyes exactly when your eyes should be open. You’re morons for thinking that the present day government will take care of the people if not put on their toes and forced to do so. You’re blind for thinking that the corruptly rich will not do everything in their power to keep their stranglehold on you; you cannot be passive while the missiles of corruption fall on your head and the heads of your children.

You cannot be passive while they destroy your life and the lives of your children. You cannot sit there and pretend to be neutral. You cannot be passive when people in thousands die daily due to negligence of government. You cannot be passive when the military sworn to protect your lives and property kill and maim you and your children on the altar of the war against terror. You cannot afford to be passive. No you cannot.

Your destiny is in your hands, the destiny of your generation and the generation after yours. Let me tell you this: it’s either you become politically active or you risk a complete destruction by those in power. You either become politically active or your unborn children and grandchildren will curse you even in your grave because politics is too important to be left in the hands of “the politicians”. It is even worse to leave it in the hands of criminals who know no difference between state purse and personal pocket. Who will loot the entire
treasury, in the drop of a hat.

Our direct participation in politics both now and during and after every election is compulsory for the growth of the society and the welfare of the humans living in it. Our contract must never stop with voting anyone into power, but prevailing upon them to perform. Only with our direct participation in politics will power truly belong to the people.

Enemies of Nigeria are on the prowl, only our combined voices can throw them out. The Edo and Ondo state gubernatorial elections have shown that it is possible for us as a people to resist all forms of electoral malpractices.

I also understand that your ilk, the Mister-mind-my-business, didn’t participate in the Edo election. Your church and family and job and business and holiness and righteousness were all more important to you than the good of the society you live in.

When the vigilance of those you call fools now because those in power to get responsible and build roads, you will want to drive past them. When they build good schools, you will want to pull your kids out of the low-quality but unreasonably expensive buildings called private schools, to put them in the government owned ones.

We saw how your ilk in performing states pulled their kids out of those private schools when they saw that a responsible government can actually build good schools.

You sit under your religious leaders who enjoin you to honour thieves in government with their silence and you swallow such messages without thinking them through. What they fail to tell you however is that without the Reverend Martin Luther Kings’ of yesterday, there could never have been a Barack Obama today. You are an enemy of this country.

But the country must move on with or without you or your cowardice masked in passivity. We will defeat all the enemies and put our nation back on the path of growth and change.

Did I hear you say I insulted you? Well, whatever I say here will be better than what your great grandchildren will say on your grave, if this nation fails.

Wake up, my friend, wake up!

The Cost of Governance: The PPPRA and a regime of corruption, By Nasir Ahmad El-Rufai

Nasir Ahmad ElRufai

In December last year, the National Assembly Joint Committee on Petroleum (Downstream) asked the Petroleum Products Pricing and Regulatory Agency (PPPRA) to justify the N5.7bn budget for overheads and personnel for its staff of 249 for 2012. Out of the N5.7bn, a total of N4.95bn had been released. Analysis of the PPPRA budget further showed that N2.1bn was earmarked for regular allowances, and had been released and utilized even before the end of the fiscal year. What kind of work is the PPPRA doing to justify paying 249 people nearly N6bn in just one year? Why should government pay each staff an average of a lavish N23m annually?

While it is true that the political leadership makes policies, the bureaucracy and agencies of government are tasked with implementing those policies, and in certain instances, also initiate policies in public interest. Considering the poor level of implementation and recurrent reversals of public policies in the country, it is little surprise that Nigerians have been left with the short end of the stick. Yet while the quality of governance is abysmally low, the running cost of our MDAs remains one of the highest in the world.

Since the beginning of the examination of government by this column, we have focused on specific policy areas. The message, if anything is that save for a handful of exceptional CEO’s not of MDAs, this president, nor his coterie of advisers have done a decent job of formulating sound policies and focused implementation.  Indeed, what seems to come across very clearly is that the Yar’Adua-Jonathan administrations have systematically destroyed organizations, systems and processes in order to expedite the unmatched plunder of resources that is going on with impunity. Whatever the truth may be, it would be worth our while to examine some government agencies to see what Nigerians pay for the personnel, policies and processes that have only led to growing poverty, ballooning unemployment, division, hatred and general decay. It is actually a fair question to ask if Nigeria still has a functional government.

Let’s consider the facts. It is a fact that unemployment in Nigeria is at an alarming 29.3%, a figure which has risen steadily since the Jonathan government started administering Nigeria some three years back. With government neglect and non-implementation of policies and budgets, Nigeria’s life expectancy of between 47 and 52 years, shows no signs of improving anytime soon. About 43% of our adult population is illiterate in all languages and do not have access to adult education.  The country’s minimum wage is a paltry N18,000 and at nearly N7trn, Nigeria’s debt stock is going out of control.  In an economy with all these ills, it is also a fact that a few public servants earn a monthly salary of N1.8m or an annual salary of about N23m that our legislature approved for PPPRA in 2012.

The PPPRA is an offshoot of the Petroleum Products Pricing Committee, which came into existence through the recommendations of the Special Committee on the Review of Petroleum Products Supply and Distribution in 2000. However, it was not until February 2003 that the Bill for its establishment was passed into law and assented to by former President Olusegun Obasanjo in May the same year.

Dr Oluwole Oluleye was the agency’s pioneer Executive Secretary and served for six years (June 2003 – July 2009), Mr Abiodun Ibikunle succeeded him and served from July 2009 to February 2011. Most recent are Engr. Goody Chike Egbuji (February – November), and Mr. Reginald Chika Stanley (November 2011 to date).

Among other functions, its prime responsibilities were to moderate volatility in petroleum products prices, while ensuring reasonable returns to operators; determine the pricing policy of petroleum products; regulate the supply and distribution of petroleum products; establish a data bank through liaison with all relevant agencies to facilitate their making of informed and realistic decisions on pricing policies and establish parameters and codes of conduct for all operators in the downstream petroleum sector.

Nearly a decade since its establishment, would we say long queues have disappeared from our fuel stations? With the very volatile fuel pricing situation, are things not even worse off now? How has the regulatory agency contributed to better pricing of petroleum products for Nigerians? Can it be sadly concluded that the PPPRA Act itself creates as many problems as it solves?

There is some serious limitation regarding the membership structure of the PPPRA. While the Act itself provides for membership of the top operational level of the agency amongst special interest groups like NACCIMA, MAN, NLC, PENGASSAN, Transport owners, Nigerian Media, NIM, NNPC etc. There does not appear to be a direct representation of the proverbial ‘common man’ whose good the regulatory agency should be serving.

Another lacuna is that the Act neither mentions nor addresses the existing powers of the Minister of Petroleum Resources and NNPC to regulate the downstream sector. This is in spite of the fact that the NNPC Act 1977 contains provisions empowering the minister, through the department of Petroleum resources to regulate the sector, including fixing petroleum product prices. Furthermore, the MPR/DPR has sole regulatory authority over technical standards, refining, and logistics in the sector under the NNPC Act. The conclusion therefore is that Nigeria currently has at least two regulatory authorities for petroleum products with responsibilities overlapping.

We may then ask what parameters or codes of conduct has the agency established for downstream operators? None. Except you choose to consider the stunning revelation before a Lagos High court in January last year by Mr Zamani, Assistant General Manager at the PPPRA Lagos zonal office, that the PPPRA only receives photocopies of documents required for processing subsidy claims and the fact that their relationship with marketers is based on ‘trust’. Is it not also under this regulatory body that worse cases of trillion Naira subsidy fraud in 2011 and 2012 have been found? Does this not all point to the ineffectiveness and lack of capacity of the PPPRA?

In 2012, the agency was allocated some N5.7bn which was 9.8% of the Petroleum Ministry’s total allocation of N59bn. Its entire allocation was for recurrent expenditure, with N76m for overheads and N5.7bn for personnel cost. One would notice the same trend in the 2013 budget; the Petroleum Ministry is allocated some N60.8bn and with a budget of N6.2bn, the PPPRA alone took about 10% of the entire sum.

In 2013, the cost of running this agency would increase by some 7% over 2012 figures. 98% of the Agency’s N6.2bn budget would cover personnel costs; plainly put, maintaining the staff of PPPRA in 2013 would cost a hefty N6.1bn representing an increase of 7% over the N5.7bn 2012 provision that the Legislature queried. Overhead expenditure is allocated some N69m and capital expenditure allocated a very pitiable N100m which would be used simply for the purchase of office furniture and fittings.

Is it not evident from these figures that this agency is only concerned with paying and receiving extravagant salaries at the expense of over 112 million Nigerians who live on less than a dollar a day? One would even wonder what good comes of all these Senate committee hearings if they cannot bring about desperately needed change like cutting recurrent costs and raising capital expenditure in MDAs.

The PPPRA as regulator has failed the oil industry and Nigeria woefully.  It has become a major participant in all corruption cases plaguing the industry from price fixing based on questionable templates to its involvement and indictment in the trillions of Naira lost to oil subsidy scams.

Incidentally, the Orosanye Committee which was instituted by the Federal Government in August 2011 to amongst other things review previous reports on the restructuring of parastatals and advice on their relevance since observed that the 26-member board of the PPPRA is very unwieldy and should be reduced to a more manageable size of 7. It also observed that with the ultimate enactment of the Petroleum Industry Bill, (presently in the National Assembly) and/or removal of the subsidy on petroleum products, the PPPRA would cease to exist. Considering this, the report recommended that the PPPRA and Petroleum Equalization Fund be merged into a single department in the Ministry of Petroleum Resources; and the bridging process of distribution of petroleum products be fully automated in order to eliminate abuses.

There is certainly a need for a regulator in the downstream sector, but this regulator must bring together the strands of regulatory authority that presently reside in the MPR, DPR, NNPC, PPPRA and create a single new regulatory authority that incorporates the institutional know-how of both the PPPRA and DPR within an empowered and more credible organizational and statutory framework.  Can the Petroleum Industry Bill when passed provide that? Only time will tell.

Hunger In The Midst Of Plenty, By Nasir Ahmad Elrufai

Nasir Ahmad El-Rufai

A good proportion of young people today were taught from primary school that agriculture is the mainstay of the Nigerian economy. Agricultural Science as a subject is part of our educational curriculum and therefore taught at all levels of education. In spite of the constant emphasis on agriculture as a core aspect of the Nigerian economy in paper, the sector long since ceased to be the main revenue source since the oil boom of the 1970s.

Agriculture is extremely important for the sustenance and development of a nation. Apart from its subsistence uses, it is potentially a huge employer of labour for a country as Nigeria which is blessed with abundant arable land. Agriculture is a means of boosting the GDP and export profile of a nation thereby also contributing to its foreign exchange reserves. The advantages are innumerable; it is therefore atrocious to know that this sector of the economy is not given the priority it deserves.

Israel is the poster child for a nation that has turned the odds in its favour agriculturally. More than half its land is desert and the climate is unsuitable for agriculture, yet, it is a world leader in agricultural technologies and a major exporter of fresh produce. Only 20% of Israeli land is arable yet it produces 95% of its nutritional requirements.

Nigeria on the other hand, according to the Food and Agriculture Organization (FAO) 2011 statistics, has a total land area of 91,077,000 Hectares with an agricultural area of 76,200,000 Hectares. In simple terms, about 83.7% of the land in Nigeria is arable, out of which less than half is currently under cultivation. Not only do we have vast amounts of arable land, we also have favorable weather for year-round cultivation of crops.

In spite of the foregoing, Nigeria does not produce enough food for internal consumption. In fact, 2010 FAO statistics placed Nigeria as the 5th highest importer of rice in the world, 10th highest for wheat and 18th highest for sugar. Sadly, these are all products that can be grown locally and if managed properly, can be exported in the near future.

It is more saddening to know that Nigeria once shone in its agricultural sector around the post-independence era right before the oil boom. This was the period when agriculture was not as mechanized and technologically advanced as it is now. All these factors notwithstanding, Nigeria competed satisfactorily in world exports. The only produce which is still being exported reasonably and which Nigeria has consistently remained in the top five of world exporters is cocoa.

Nigeria was also the largest exporter of groundnut between the early 1960s and 70s. Devastatingly, there was a decline from around 1974 till date; these days, Nigeria does not feature among the top 20 groundnut exporters. The story of palm oil and kernel exports is not much different. Nigeria, which used to be the largest exporter, has hardly appeared among the top 20 exporters since 1980.

For a country blessed with so much food production endowments, the 2012 Global Hunger Index (GHI) scored Nigeria at 15.7. This index assesses all available data on hunger, undernourishment and the pattern of food consumption within countries, and the higher the score, the more serious the nation’s hunger challenges. According to the ranking, the score of 15.7 for Nigeria therefore indicates a ‘serious’ hunger problem in the country. Ironically, nations like Iran, Libya and Jordan which are substantially desert nations scored less than 5 on the GHI, indicating the near absence of hunger and malnutrition.

What exactly is the problem with past and current governments that the issue of food security – the adequate production and availability of food within the country is treated with such levity? Could it be that the daily provision of about N1m for each of the three square meals in the villa has deluded our leaders from the hunger that abounds just outside the walls of their abode? Are our leaders so disconnected from the citizens that they do not appreciate the hunger and malnutrition problems that many households face daily? Let us look at the 2013 federal budget for some answers or lack of them.

The 2013 federal budget makes a total provision of N81.68bn (1.7% of the total budget sum) for agriculture. Our previous analyses of states’ budget indicated that their typical budgetary provisions are only slightly better than the federal government’s – ranging from 1% to 7% of the total budget. Consequently, whatever we can deduce from the federal budget also largely applies to the states, and the federation as a whole.

In the 2013 federal budget, the sum of N48.73bn (about 60% of the total agriculture provision) is proposed for capital expenditure while N32.95bn is earmarked for recurrent expenses. In 2003, one of the most prominent decisions arrived at during the African Union (AU) Maputo Declaration on Agriculture and Food Security in Africa was the “commitment to the allocation of at least 10 percent of national budgetary resources to agriculture and rural development policy implementation within five years”.

Ten years after that declaration, Nigeria’s federal budgetary provision for agriculture is less than 2%, while the state’s average about 4% nationally. This is simply outrageous and unbelievable! While the agricultural sector’s contribution to GDP is laudable at N13.41 trillion in 2012 (the highest non-oil contribution to our revenues), the latent unexplored endowments indicate that slightly more attention given to the sector will restore it to its pride of place in the economy.

Scrutinizing the budget further, it is worrying to see how the largest proportions of the funds are earmarked for recurrent spending. This column believes that the agricultural research institutes ought not to be federal responsibilities even in distorted federalism – they properly belong to the state governments or in some cases under the relevant geopolitical zone, and not the federal government. The spending patterns of these institutions only confirm that position. For instance, the Rubber Research Institute of Nigeria (RRIN) has a total allocation of N1.16bn; its capital expenditure is N92.88m while the recurrent cost is N1.06bn. In other words, the capital expenditure of RRIN is about 9% of its recurrent expenditure. Fortunately, we ranked 14th in the year 2010 in terms of global rubber exports. In spite of this, we believe that if the funds were tipped more in favour of capital expenditure on research and development, extension and technical support services, we may just move up to be among the top five sometime soon.

Many more of these lopsided expenditures abound within the Federal Ministry of Agriculture. The National Institute of Freshwater Fish has a total allocation of N845.7m. Its recurrent expenditure gulps the bulk of the amount at N649.13m while the capital expenditure is N196.6m. Nigerian Agricultural Quarantine Service’s total allocation is N1.2bn, N275m of which is capital while recurrent is N918.93. One wonders what deliverables accrue to the nation and citizens from all the huge recurrent spending!

One MDA stands out for being different – the Cocoa Research Institute of Nigeria (CRIN). This MDA further buttresses our point that more spending in favour of capital expenditure improves the performance of the sub-sector. Out of its N1.74bn budgetary allocation, CRIN intends to spend N973.56m on recurrent expenses and N765m on capital expenditure – a more sensible ratio. While the recurrent expenditure is still higher than the capital vote, the difference is modest and the percentage of capital expenditure is higher than most of the other MDAs. The likely outcome of this focus on capital investment (supplemented by better quality governance at states’ level in the geopolitical zone) is that Nigeria is still a top ranking cocoa exporter today.

For the agricultural sector to be restored as the mainstay of our economy, the spending priorities of the federal and state governments must genuinely reflect a national commitment to the sector. At the federal level, allocating less than 2% of the budget to agriculture, while the best states are allocating some 7% of their budgets for the same, is insufficient to enable us attain the food sufficiency we direly need, much less position us to be a major exporter of cash crops. The AU target of 10% of budget applies particularly more to the state governments where most of the actual cultivation and production of crops take place. Agriculture must be made a priority bearing in mind that our oil is a non-renewable, finite resource that will be exhausted sometime in the future, or replaced by greener or cheaper alternatives.

The budgetary allocation figures also need to be tilted sharply in favor of capital expenditure. Agriculture is a practical and ground-based profession. The enormous personnel costs incurred on redundant government employees add little or nothing to the development of our agricultural sector. Those monies budgeted for the research institutes need to be invested on the real or pilot production sites (farms) and the acquisition of the seedlings, fertilizers, chemicals and equipment required to make them boost crop output. Better coordination with infrastructural MDAs, aggressive investment in storage capacities, low-interest loans and greater extension and support services should command the attention of agricultural policy makers at states’ and federal levels.

Studies indicate that every US dollar spent on agricultural research produces nine dollars’ worth of added food in developing countries. Agricultural research which successfully drove the first Green Revolution in Asia can also do same in Nigeria. Obviously this does not refer to wasteful expenditure on personnel cost, engaging in excessive domestic and international travel, purchase of un-needed SUVs and other pea-brained budget heads that constitute the bulk of typical MDA recurrent expenditures. Worthwhile investment in biotechnological hardware, software and attracting the best and brightest minds to agricultural research will pay off in the medium to long term. Nigeria must attain food sufficiency so that the paradox of hunger in the midst of plenty will no longer apply to us.

Nasir Ahmad El-Rufai
+234 803 408 2353
elrufai@aol.com

Counting the Cost of Nigeria’s Water, By Nasir Ahmad El-Rufai

Nasir Ahmad El-Rufai

Not many Nigerians may know Samuel Taylor Coleridge, and fewer still would have any reason to. Born in 1772, he was an English poet who lived long before any notion of Nigerian nationhood was forged, but his most famous work, ‘The Rhyme of the Ancient Mariner’ which was written in 1798, aptly describes the Nigerian situation: ‘Water, Water Everywhere, Not a Drop to Drink’.

Through a press release on the 28th March last year, Sarah Ochekpe, the Minister of Water Resources said that the country would require some $2.5bn (about N396bn) to provide potable water for 75% of Nigerians. It is 2013, barely 2 years to the Millennium Development Goals target of providing water to the 75% of the populace and official release from the ministry puts the percentage of Nigerians with access to safe drinking water at only 32%.

If this picture is not bad enough, at a briefing in Abuja just before the Presidential Summit on Water, the Minister confirmed that Nigeria will not meet the MDG goal on adequate water supply by 2015 if the country is not willing to commit an annual budget of some N360bn for the next 3 to 5 years.

Consider the impact of the nation’s water situation on our health indices and you would see where exactly this government is taking Nigeria. The World Health Organization (WHO) has estimated that about 361,900 people die yearly due to poor water and sanitation conditions in Nigeria, while the UNICEF estimates that 194,000 children under the age of five die from diarrhea yearly.

Gruesome as they may be, these figures are the direct impact of federal, states’ and local governments’ continued neglect of this all important sector, and the Jonathan administration shows no signs of providing leadership that will turn the tide.

In light of these figures and the very little success that has been achieved in water provision, this column would today examine the federal budgetary provision for the water resources ministry with a view to addressing very pertinent questions like how much of the ministry’s N30.4bn 2012 capital budget was implemented?

How much of Nigeria’s 267 and 92 billion cubic meters of surface and ground water respectively are currently targeted for the use of Nigerians? What were the gains of the much talked about Presidential Summit on Water? Has any progress been made in implementing the Water Road Map? What should the National Assembly be doing in this vital area of our national well-being?

In 2012, the ministry’s total allocation was N39bn or 0.82% of the Federal budget. N8.6bn (22%) was set aside for recurrent spending while N30.4bn (78%) was voted to capital expenditure. This sectoral ratio exceeds the 70% we have always advocated as the minimum for capital expenditure.

The 2013 budget reveals an even better picture; the total allocation is N47.8bn consisting of a capital allocation of N39.8bn (83%) and a recurrent expenditure provision of N7.9bn (17%).

In an administration where costs seem to continuously escalate, the Ministry of Water Resources deserves some commendation as it is one of the few ministries with a reduction in its recurrent budget. The personnel cost for 2013 of N6.4bn is a reduction of about 6.2% from its 2012 N6.8bn figure.

According to 2013 Capital Expenditure plans, some N17.9bn would be used to complete various irrigation projects across the country: 24 projects in North Central Nigeria, 21 projects would be completed in the North West, 18 in the South South, 11 in the South East, 9 in the North East and 7 in South Western Nigeria.

However, examining the figures closely, one notices that there is a 2013 provision of about N122.7m to complete the Zobe Dam in Katsina; there was a similar provision of the same figure allocated to the same project in the 2012 budget. Simply put, budgeting (and spending?) on this project in 2012 and 2013 would add up to N245.4 million. Incidentally, this same project was awarded at some N52m and was brought to about 80% completion by the Shagari administration by December 1983!

In February this year, the President announced the intention to host an overdue Water Summit with the theme ‘Innovative Funding of the Water Sector in Nigeria’. Unfortunately, Mr. President himself could not make out time to attend this all important summit; he was however represented by the much ‘freer’ Vice President Namadi Sambo.

The highpoint of the occasion was the Memorandum of Understanding signed between the Federal Ministry of Water Resources and the Bank of Industry which would enable private investors in the water sector access loans with very low interest rates. This is an interesting development, and it is hoped that the MoU will be developed further to provide another source of funding the implementation of the water road map which President Jonathan launched with much fanfare in 2011..

The water road map has as its main objectives a 75% water coverage by the year 2015 which would increase to 90% in 2020. This might lead discerning Nigerians to question, if between 2011 and 2013, we have not recorded an increase of even ten percentage points of coverage, what hopes do we have of achieving moving from our dismal 32% coverage within the next 2 years?

A more realistic forecast must be made. According to the Water Sanitation And Hygiene (W.A.S.H) 2013 report, at our current rate of progress, the water target of 75% coverage will be achieved in 2033, 18 years after MDG target of 2015.

When the decay in the nation’s water infrastructure is considered, neither the executive branch nor the federal government cannot be wholly blamed for this massive failure. The states’ and local governments bear most of the responsibility for the failure to ensure reticulation of potable water in our urban and suburban areas.  The legislative arms of the states and federal government must be held responsible for part of the failure.

The national and states’ assemblies have a substantial say in appropriation decisions, so must be held responsible for any under-funding of the water sector at federal and states’ levels respectively. The legislatures’ law-making powers have not been diligently discharged as well. For instance, the bill for the establishment of a National Dam Commission has since been presented to the National Assembly.

This bill which would establish a commission whose sole responsibility is maintaining and upgrading dam infrastructure is worth revisiting, revising if need be, and passing into law. It is obvious that if a bill like this is passed and the commission set up, the pitiable state of Nigeria’s oldest dam, the Kainji dam would probably be reversed.

In spite of our combined 359 billion cubic meters, our inland water systems of about thirteen lakes and reservoirs both of which have a surface area of between 4,000 and 550,000 hectares, Nigeria is still classified as a ‘water short’ country. From all indications this government neither has the vision, nor the political will to bring Nigeria out of its present crisis.

Thus, the sad reality is that more Nigerians may die from water related illnesses, while the ministry continues with its current budgeting practices.  For most Nigerians, the words of Coleridge, ‘water, water everywhere not a drop to drink’ rings true today, as when it did when it was first written over 200 hundred years ago.

Nasir Ahmad El-Rufai, one-time Nigerian cabinet minister, is author of the new title The Accidental Public Servant.

Budget 2013: Motion without Movement, By Nasir El-Rufai

Nasir El-Rufai

The first quarter of the fiscal year has practically ended, yet Nigeria and Nigerians are yet to know how the approximately $140 million dollars the country earns daily from crude oil sales alone are being spent and how much more is going to be borrowed in our name to provide for services that we can neither see, nor feel. This hefty amount does not include daily collections for royalties, petroleum profits taxes, sales of liquefied natural gas and other condensates, income taxes, value added tax and other “internally-generated” revenues.

For an annual ritual that started about six months ago, the questions are: why is it that the Presidency and the National Assembly have been unable to reach a common ground on the federal budget? Is government blind to the urgent need for infrastructure development, social services, poverty alleviation and job creation? Is the budget really for the Nigerian people, or simply a convoluted mechanism to further defraud long suffering citizens?

To answer these posers, we will continue with deeper analysis of the 2013 budget which, from all indications is not different from preceding Jonathan-era budgets in terms of absence of positive improvements. We will look at some major sectors of the Nigerian economy and their indicative budgetary allocations, attempt to correlate how the appropriations have been designed and determine whether they are structured to bring about meaningful development to our country. It would also be important to assess if there have been any improvements over the years, drawing comparisons with model countries and possibly identify solutions where government has veered off, in the hope that policy makers would be willing to make necessary changes.

The importance of sensible and prudent budgetary allocations cannot be overemphasized because the budget in itself is an expression of public policy. It is the vehicle through which the various programs and agendas of a government come to life. It is the major economic policy instrument which indicates a government’s priorities, and is also a tool to correct anomalies and inequities within the society.

An efficient budgetary system is critical to economic growth and developing sustainable fiscal policies. On the flip side, a poorly designed budget where attention to details are neglected and figures just altered from existing templates can only exacerbate social and economic problems within the country. The effect of faulty budget choices will inevitably be felt mostly by the ordinary citizens who are at the mercy of dysfunctional government policies and facilities. Sadly, in the Nigerian context, budgeting is still based on guess work as alluded to by the Accountant General of the Federation a couple of weeks ago.

In light of the fifth Brazil, Russia, India, China and South (BRICS) summit on emerging national economies currently taking place in South Africa, one cannot help but understand why Nigeria with all our numerous resources and potentials still does not qualify as a member. These countries have succeeded in managing their resources by effective prioritization of their budgets. They have also channeled adequate financial resources to those sectors which yield the highest return on investment for their economies. These nations have pulled hundreds of millions of their citizens out of poverty into middle class status while our leaders have pushed more and more citizens into poverty – from about 57% in 2007 to a disgraceful 72% of the population by the end of 2011!

Hitting closer to home is the fact that Nigeria and BRICS’ latest entrant, South Africa, are regarded as Africa’s economic power houses. In 2011, South Africa’s Gross Domestic Product (GDP) was estimated at $368 billion while Nigeria’s was $232 billion. South Africa’s revenue sources are diversified rather than totally dependent on mining income which used to be the mainstay of its economy. South Africa has also adopted participatory budgeting on some levels which allows citizens contribute directly in deciding how their budget priorities and figures are arrived at.

Disappointingly, in comparing Nigeria with other emerging economies, the federal budget has simply been one where the same things are done over and over again while expecting different results. Let us assess the electric power sector budget to see if it is geared towards revamping what every Nigerian would agree is the most debilitated sector of the economy.

The first electricity generating plant was built in Lagos around 1898. It was not until 1950 that the Federal government passed the Electricity Corporation of Nigeria Ordinance No. 15 which resulted in the Electricity Cooperation of Nigeria (ECN); the statutory body responsible for generation, transmission, distribution and sale of electricity in Nigeria. After independence in 1962, the Niger Dams Authority (NDA) was established, its primary responsibility was to construct and maintain dams in river Niger and other areas. Ten years later (1972), the National Electric Power Authority (NEPA) was formed by a merger of ECN and NDA. NEPA was mandated to “maintain and co-ordinate an efficient and economic system of electricity supply for all part of the federation”.

Forty-one years after formalizing the structure for power management and supply in the country, have there been significant improvements? With the continuous promises from the government about power outages becoming a thing of the past, how is it that the electricity supply situation has only gotten worse? What is happening to the continuous budgetary allocations to the power sector and the numerous projects undertaken by the federal government? How is it that smaller and more impoverished nations have been able to provide steady and improved power supply while Nigerians constantly hear fables?

Most adults who have spent a great portion of their lives in Nigeria have probably never experienced constant 24hours of government-supplied electricity without breaks between. This scenario only even exists for the urban dwellers in large cities that enjoy a fair amount of electricity per day. For those who live in many of the state capitals within Nigeria, the power supply is less reasonable and it gets worse for the rural dwellers. No one is immune to the power outages so much so that the Presidential Villa and Governor’s lodges are all powered by stand-by generators.

The horrendous power supply in Nigeria has become a source of national embarrassment to say the least. During the FIFA U-17 football championship hosted by Nigeria some years back, there was an electricity outage in Kano during the game between Spain and USA. An extra 14 minutes had to be added to compensate for the embarrassing moment. Upsetting power outages have also been experienced at our international airports several times.

The importance of reliable power supply in Nigeria cannot be overemphasized. For there to be a major boost in the economy and the diversification away from dependence on oil, the power sector must be given utmost priority in budgetary spending and implementation. The benefits of having steady power supply will impact tremendously on manufacturing, SMEs which create employment, attracting foreign investment and boosting business in general.

In the 2013 budget, total allocation to the power sector is N74.26bn, a measly 1.4% of the total budget. Capital expenditure for the power sector is pegged at N70bn (about 1% of the total budget, or 3% of the total capital budget) while recurrent expenditure is N4.26bn. For a sector in dire need of rehabilitation and resuscitation, these figures are not indicative of any sense of prioritization leading to improvements anytime soon. Could it also be that successive governments are simply uninterested in fixing the power sector as majority of the people think? Or could it be that truly, the power situation is beyond human capacity and is being manipulated by ‘ghosts, witches’ and ‘wizards’? It is disheartening that a nation with a population of nearly 170 million hardly generates 4000 megawatts steadily while South Africa which has less than a third of our population (about 50 million) generates ten times more electricity (about 45,000 MW). It is not difficult to understand why South Africa surpasses Nigeria on major development indicators in spite of the latter’s potentials.

Is the government relying wholly on the private sector to shoulder the short-term investments in the sector? For the power situation in Nigeria to be turned around, government would need to invest massively in the sector. The investments needed must include federal budgetary intervention to expand and modernize the nation’s transmission infrastructure, some investments in renewable generation capacity using wind and solar, and even some hydropower stations to be placed under private sector management or ownership as soon as they are commissioned. Unless the government pragmatically pursues a mix of public and private investment in the various segments of electricity supply industry using our ample gas, hydro, coal, wind and solar resources, our nation will remain in partial darkness for at least the next five years. South Africa on its own has recorded success in its power sector by harnessing their freely available natural resource (coal) and converting it to power. It did not go about importing natural resources which it already has, or relying solely on a private sector solution. Instead, it invested in making available resources usable to the public and private sectors.

Until this government or any other government for that matter is able to tackle the power supply problem in the country, it would not be taken seriously because this is one area where it is easiest to prove that a government is indeed working for the benefit of the people. Corruption and impunity which are the major culprits for the chaos in the sector must be dealt with. A good starting point – a massive national signal – would be for all federal government facilities (including the Presidential Villa, the National Assembly and Supreme Court) to stop forthwith the use of generators to supply electricity for their day to day activities both at work and home. Such a signal will not only compel the public electricity providers to sit up and get better, but will encourage policy makers to experience some of the pain that the ordinary Nigerian feels every day. Hopefully, this will engender change in official attitudes – and perhaps raise the budget for the power sector from the pathetic amount provided for in 2013!

In the meantime, as the executive and the legislative arms of government continue to bicker over who has the power to do what, or who has the mandate to award what contract, the whole budgetary process is becoming more and more like the famous axiom: All motion, no movement. Sadly, from economic development, poverty alleviation and job creation perspectives, that, exactly, is what the 2013 budget may be turning out to be.

Nigeria’s Budget and the Dance of the Masquerade, By Nasir Ahmad El-Rufai

Nasir Ahmad ElRufai

Traditional masquerades have one enduring commonality: they run backwards and forwards; jump up and down and generality create an atmosphere of chaos. At the end of their exertions, though, not much would have changed because both the masquerade and the spectators know one thing: it is all drama.

If any scenario can be used to describe the imbroglio surrounding Nigeria’s budget this year, it must be that of the dance of the masquerade – from the Presidency to the National Assembly and back again, with little substance by way of policies and programmes to create jobs, stimulate economic activity and reduce poverty. If anything, the Nigerian public who are little more than befuddled spectators are left with nothing but the dust from the meaningless exertions for which they would be charged about 5 trillion naira.

Nigerians heaved a sigh of relief in September 2012 when the Finance minister, Dr. Ngozi Okonjo-Iweala announced that the N4.92trn 2013 draft budget had been concluded. She was emphatic that it would be presented to the National Assembly as soon as it resumed from its recess in September. Being the second time since 1999 that both chambers were likely to pass the Appropriation Act before year end, Nigerians thought the nation would mark a return to the normal budget cycle of January to December as opposed to the current cycle which runs from about April to March the next year, mainly due to arguments between the executive and the legislative arms and all the paraphernalia surrounding passing and signing the budget.

However, between the battle for an oil bench mark of $79 or $75, the N63bn added to the original budget proposal and the non-inclusion of a budgetary vote for the Securities and Exchange Commission, the Senate only confirmed receipt of the signed 2013 budget from President Goodluck Jonathan on the 14th March, thus ensuring that any hopes of a January-December budget cycle are crushed.

In the course of the budget analyses, we would see if like previous budgets, this budget does anything to put Nigeria’s battered economy on the path of growth or sustained development. What provisions does it offer the tens of millions of unemployed Nigerians with no hope of better future? What are its provisions for rescuing the 61% of Nigerians currently living in absolute poverty?

The 2013 Appropriation Act envisages spending N4.98trn, an increase of about 6% from the N4.69trn for 2012. This consists of statutory transfers of N387bn (7.7%); 11.9% (N591bn) is set aside for debt servicing; while personnel and overhead costs amount to N2.38trn (47.8%) and capital expenditure is some N1.62trn (32.5%). Less than one out of every three naira budgeted in 2013 would be invested in education, healthcare, roads and electricity. Whichever way one looks at these figures, they confirm surely that this budget is likely to be a failure on arrival.

For instance, with all the rhetoric that the cost of governance is reducing, one would expect figures that are closer to 25% as is the internationally acceptable standard for recurrent expenditure, but no, the recurrent budget is about 68% – more than double the capital expenditure provisions. In fact, 2013 recurrent figures show only a pathetic reduction of about 3.6% from the 2012 levels.

Let us look to the performance of the 2012 budget for an idea on the possible results of the 2013 budget, considering that the economic team is unchanged and contrary to expectations, the time of commencement of execution for the 2013 Appropriation Act would most likely replicate that of 2012.

Implementation in 2012 was shrouded in controversy; by the third quarter of the year, the finance ministry pegged implementation at 56% but when new facts emerged, the ministry reverted the figures to about 12.6%. The House of Representatives came up with a different figure entirely and issued a threat to have the President impeached if by September the same year the budget was not implemented 100%. The budget was not implemented 100% and neither was the president impeached. Interestingly, the implementation for the four quarters of 2012 fell below the projected estimates.

Looking at the above picture, it is clear that unless something drastic is done by government, the 2013 capital budget implementation will remain at similar levels with that of 2012 and the nation’s infrastructure deficit will continue to widen. There is the need to put in place checks and balances to ensure that Ministries, Departments and Agencies actually provide services with capital funds that have been budgeted and released to them.

One would have expected that the over-hyped performance contracts signed between the President and his ministers would lead to the weeding out of non performing ministers, or the Directors General of MDA’s that fall short on performance and implementation, but in spite of the dismal 2012 figures, they have all mostly retained their positions.

The President should be aware that this poor budgetary performance will turn out to be a major hurdle in his quest for a possible re-election. Nigerians will demand to know what he did with resources entrusted to him in the last five years before considering him for another term. The performance of this government has been below average at best and contrary to the Jonathan posters that flooded Abuja earlier in the year; we cannot describe poor performance as one “good term” and therefore deserving another.

An analysis of some key ministries would reveal the following structure: N278.8bn is budgeted for Health; about 79% (N223bn) of the entire sum is voted to recurrent expenditure, and 55.7bn (19.9%) for capital expenditure. The minister lamented a few days ago that the trio of HIV/AIDS, Tuberclosis and Malaria were still major public health issues in Nigeria. According to the World Health Organization (WHO), Nigeria has the highest number of malaria cases in the world contributing about 30% to the global burden. Our current doctor to patient ratio is 1 to 3,500 people and this miserable capital allocation at tertiary level is not sufficient to adequately address the challenges facing this sector. How does a forward thinking government justify allocating under one-fifth of its health budget to capital expenditure?

Education is generously allocated some N427.5bn. Problem is, like health, the major chunk of its allocations are misdirected; N60.1bn (14%) is allocated to capital expenditure. At N367bn (85.8%), recurrent expenditure is about 6 times the size of capital provisions in a country where about 1.5m (8.7% of 6-14year olds) children of primary school age are not in school, and only about 57.9% of the adult population is literate in English and even school teachers cannot pass basic primary school tests. The allocation is hardly adequate to cater for qualified teacher recruitment, school construction and raising the literacy rate among Nigerians. Sadly, a large slice of the federal education budget and administrative energy go to secondary schools that ought to be the business of state governments, while tertiary education – the proper purview of the federal government, suffers.

While this column feels that ‘stricto sensu’, agriculture ought to be the business of states and local government, the federal intervention in the sector has been confused, with mixed results at best. Agriculture is apportioned some N81bn in 2013 showing an increase of about 3.4% over 2012 allocations of N78.98bn. N32bn (39%) is allocated to recurrent expenditure and a slightly higher N48bn (59.2%) to capital expenditure. This capital allocation also is not adequate for targeted intervention in a sector that once provided employment to about 70% of rural Nigerians but currently employs barely 35%. The decision to procure cellphones for un-named farmers instead of spending the amount on improved seedlings, agro-chemicals, fertilizers, extension services and farm-to-market infrastructure, is indicative of the “spend-without-results” symptomatic of virtually all Jonathanian programmes since 2010.

Ironically, if you look at the Presidency’s budget of about N35.5bn you would see that all talk about an anti-corruption fight is just that, talk. There is N14.4bn (40.5%) provision for ‘State House Headquarters’ while only N9bn (25%) is allocated to the Economic and Financial Crimes Commission. Worse still, there is a paltry allocation of about N1.3bn (3.6%) to the National Emergency Management Agency; it is not therefore surprising that the agency is incapable of responding timely to emergency situations, and when they do so, often too little, too late.

Incidentally, even as you read this, the Presidency has sent the 2013 Appropriation Act Amendment proposal back to the National Assembly for approval and has requested for the review of some clauses in the budget which, according to him, can be detrimental to the work of the executive arm of government. Even by the warped processes that characterize the method of budget making and non-implementation, this must be a new record: budget review after two weeks of passage and presidential assent.

Next week, this column would further analyze budgetary provisions for some federal ministries. It is hoped that somewhere in the continued budget disagreements between the National Assembly and the Presidency, the budget structure would be changed into a functional document that is guaranteed to bring about some sort of change. In its current form, the 2013 budget is nothing more than the dance of the masquerade: forward, backwards, up, down, raise dust, while our nation generally records increasing levels of poverty, deteriorating human development indicators, infrastructure deficiencies and youth unemployment!

Taxation: Ignored second fiddle to ‘easy’ oil money, By Nasir Ahmad El-Rufai

Nasir Ahmad El-Rufai

The Federal Government earned N2.2trillion as opposed to N1.9trillion it targeted in 2009; N2.9trillion as against N2.5trillion in 2010; N4.7trillion in 2011 as opposed to N3.6trillion; and N5trillion generated in 2012 as opposed to N3.6trillion.  No, these are not foreign exchange earnings or even the Jonathan administration’s spurious borrowings. These are the sums generated by the Federal Inland Revenue Service (FIRS) in the last five years.

With these figures, borrowing to fund our budget deficits which grew from N161.1billion in the third quarter of 2011 to N459.1 billion in the third quarter 2012 is unjustifiable. Despite claims of deficit reduction by the Finance Minister, the projected deficit for 2013 is N1.039trillion. When we consider that these deficits further compound our national debt which is around N6.9trillion ($44billion) we begin to see where the transformation agenda of this administration is taking Nigeria – long term sovereign insolvency!

The FIRS has undergone quiet and true transformation since Mrs. Ifueko Omoigui-Okauru was hired by the Obasanjo administration from the private sector to lead it. Not only has the FIRS been able to draft an updated legal framework for taxation, it was able to expand our existing tax brackets, introduce re-organization policies and saw to the passage of about 4 Acts, including ones for FIRS Establishment, Value Added Tax Amendment, Companies Income Tax Amendment, and the Petroleum Profit Tax Amendment. Yet, the N5trillion record achievement is only a scratch on the surface of Nigeria’s tax generation potentials. Nigeria can easily generate taxes equivalent to just the global average of 25% of GDP (which will be in excess of least N10trillion) if we can get our act together.

Oil taxes revenue contributed N3.2 trillion; representing 64% of the entire 2012 collections as against the 2011 figures of N3 trillion. Interestingly, another major feat of the FIRS has been its ability to bring a significant swathe of the non-oil sector into the tax bracket. The contribution of non-oil taxes increased from N1.5 trillion or 33.65% in 2011 to N1.8 trillion or 36% in 2012, from much lower numbers in 2003.

Why has taxation, which is potentially Nigeria’s largest source of revenues, still been neglected in favor of ‘cheap’ oil money? Is it because of the fear that a tax paying citizenry would not allow their taxes to be looted as happens with oil revenues which are sometimes diverted by officials and spent even before reaching our shores? What is the story of taxation in Nigeria?

In 1943, the Nigerian Federal Inland Revenue Service was carved out of the former Inland Revenue Department (IRD) that covered what was then the Anglophone West Africa (including Ghana, Gambia and Sierra Leone) during the colonial era. In 1958 the Federal Board of Inland Revenue (FBIR) was established under the Income Tax Ordinance of 1958. After various transformations in 1961 and 1993, on 16th April 2007, the FIRS (Establishment) Act 13 of 2007 was passed, and the operational arm of the FBIR, the Federal Inland Revenue Service (FIRS) secured its autonomy.

State Assemblies were also expected to pass laws facilitating the autonomy of their Internal Revenue Services. Now 6 years later, only Lagos and Adamawa States have granted their IRS autonomy, while Ogun, Ekiti and Bauchi states are in the process of doing so. A look at how Lagos state utilizes its taxpayer’s money underscores the importance of autonomy for state IRS.

The FIRS is charged primarily with the responsibility of accessing, collecting and accounting for the various taxes to the governments of the federation. However, many Nigerians have seen this as a big loophole to the Establishment Act, leaving some to wonder why this body that collects public funds is responsible to the government, and not to the people. After the funds are remitted to the federal government, what accountability measures are put in place? How does the average Nigerian who pays his taxes diligently know that his taxes are not just moved into offshore and local accounts that benefit only the corrupt few?

In Price Water House Cooper’s (PwC) 2012 ease of paying taxes ranking, Nigeria was ranked 138 out of 183 economies. According to the same report, the average tax compliance time in Nigeria is 936 hours as opposed to a 318 hour benchmark for Sub-Saharan Africa and 186 hours for the Organization for Economic Cooperation and Development (OECD) countries. During 2010/2011 period covered by the 2012 study, 33 economies were said to have improved in the ease of tax payments. A common feature amongst these 33 economies was the introduction of electronic systems that make tax compliance easier.

The mistrust in the system is one of the reasons why the country has not been able to harness the full benefit of taxes compared to other countries. Many people, who pay taxes, do it reluctantly because infrastructure that should be maintained by tax funds suffer neglect; public utilities do not function, educational and health facilities decrepit, and roads are now considered by most as death traps.

In most countries, tax legislation is used to bridge the gap between the rich and the poor, and in 2011, Nigeria assented to the Personal Income Tax (Amendment) Act, 2011 (PITAM 2011) in a bid to move in this direction. The PITAM 2011 consolidated all personal income tax reliefs and allowances into a single Consolidated Tax Relief Allowance (CTRA) of N200,000 (Two Hundred Thousand Naira) or a minimum of 1% of a person’s annual gross income, whichever is higher of the two, plus 20% of the individual’s annual gross income as CTRA.

The remainder of income was liable to Personal Income Tax at an average graduating rate of between 7 per cent to 24 per cent of the individual’s annual income; thus, a higher PIT Tax rate is reserved for people earning above N1.6 million and N3.2 million per annum after making provision for CTRA.

Ordinarily, this should fulfill the tax objective of income redistribution. The problem was and is that tax evasion or avoidance is done mostly at the top levels of government and amongst the richest in society, year in year out, we hear of tax evasions by government agencies.  Furthermore, our informal is estimated to be at least three times the formal economy, and these incomes are hardly ever captured for taxation.

Tax evasion in the formal sector occurs due to weak enforcement, corruption and impunity. For instance, in the period of 2004 to 2012 alone, the FIRS stated that 100 organizations including MDA’s owed N169billion in tax arrears. This is quite apart from the corruption inherent in normal tax administration and collection. Most tax collectors and officials conspire with tax payers; negotiate some sort of bribe with individuals or companies for a reduction or total avoidance of their tax burdens.  The various structures which are required to work together to make tax evasions difficult are not properly coordinated. Enforcement of tax compliance should be given adequate attention and various government agencies should collaborate to share information to reduce tax evasion or avoidance.

Even for diligent Nigerians who voluntarily go to make tax remittances, they are often met with bureaucracy that leads to time wastage and sharp practices. For instance, you need a Tax Identification Number (TIN) for tax payments, these TIN numbers cannot be generated online, an individual has to go to a tax office, fill a form and wait for paper work before the TIN is generated which would typically take between a day or two. It is also tedious that whenever taxes are paid, the individual has to go to the tax office to collect his tax payment receipts after making payment in banks. A more simplified system needs to be put in place.

Perhaps the biggest problem to Nigeria’s tax administration is the absence of a comprehensive tax payer’s database. The absence or inefficiency in this area undermines tax systems. The accelerated completion of the National ID project with biometric capture incorporating TINs will go a long way in enhancing tax administration, collection and accountability.

For the FIRS to go beyond its present capacities, it must be free of the present internal conflicts plaguing the system, it must win public confidence by creating an accountability framework, and it must adopt a technology-driven approach as opposed to the largely bureaucratic manual tax administration system currently in place throughout most of the country.

If online accounts, where filing, tax payment, tax records, receipt printing and certificate generation can be done are created for individual tax payers and tied to their TIN numbers for login, would this reduce compliance time and the associated costs? Would this encourage voluntary tax compliance? What about abolition of all income taxes and introducing sales taxes at state and LG levels, while raising the VAT rate from 5% to a higher number? These are all policy and fiscal choices that need to be debated and considered going forward.

While our tax fortunes may appear to continue to increase, the reality on ground is that with appropriate policies, technological and operational reforms, collections, expanding the tax bracket and monitoring made more effective, we can raise more revenues than we currently earn from non-renewable natural resources like oil and gas.

The danger of course, is that like the huge oil revenues and consistent domestic and foreign borrowing by this government, more revenues may only add to the pool of funds from which money is stolen or wasted on non-viable projects that neither create jobs for the millions that are jobless, nor improve the quality of life for Nigerians. We must refocus our energies on citizens’ taxation so that accountability demands on our leaders will also intensify.

In Search of Leadership (2): Restoring Hope by Avoiding Breakdown By Nasir Ahmad El-Rufai

Nasir El Rufai

In the light of the historic challenges that have been become part of our polity, is it easy to restore hope once lost? Certainly not, but transformational leadership for Nigeria can begin the long process. From my modest experience spanning a decade in public service, I am convinced that almost any human being can excel when a visionary, disciplined and goal oriented leader is visible to set examples – a transformational leader. Conversely, almost anyone – however competent or well-meaning can be a failure under an unfocused, corrupt and immoral leader – a transactional leader. It really all boils down mostly to quality of leadership. As the common proverb says, ‘fish starts to get rotten from the head’.

Another issue is the fact that human beings are by nature strategic, and thermometers, will adjust their behaviour to conform to the leaderships and their environment. So, to change their behaviour we have to change the quality and style of our nation’s leadership, and put in place a clear regime of rewards (for merit and good conduct) and sanctions (for poor performance and misconduct). There is simply no other way to develop a well-ordered, rules-driven and progressive society. The symptoms of Nigeria’s problems are many but the cure would begin with just one thing – good leadership by example.

Coming back to the present, what we all need to do is to study history and learn from our past. We would see that at the point where Nigeria begins to make progress at good governance, human progress and social justice based on hard work, patience and sacrifice, suddenly, from nowhere, there comes a false messiah to offer the people relief and immediate gratification (like ‘fresh air’) which then stifles national growth. Since those who fail to learn from history are doomed to repeat it, our task is to learn from the mistakes of 2007-2012, and avoid being deceived by transactional leaders who will only end up making Nigeria poorer even where we have the natural and human resources to attain a reasonable standard of living for all – not just a declining minority of our people.

Such false messiahs are easy to identify – usually they have had no proper education, no profession, no national exposure beyond their narrow provincial circle and no track record of performance in public service. They have also never run businesses employing people, neither have they any known source of income to justify their clear opulence and high standards of living other than being in low-paying public service jobs! These are the sort of “leaders” we must never have in the future.

We need a paradigm shift in leadership identification, nurturing and selection – something new and something different. We need to throw up political platforms and candidates with the knowledge, skills and proven record of performance and integrity in public service to transform our nation. It is my humble view that we should scrutinize all those that offer themselves for leadership bearing in mind at least the following parameters:

1.     Education, Experience and Pedigree are Necessary but not Sufficient

Though our first two university graduate presidents disappointed all except their villages, family and close friends, we must not write off educational attainment as a necessary indicator of leadership effectiveness. Experience that is relevance to governance – in managing resources, administering large, complex organizations, and mobilizing our nation’s diversity into inclusive strength matters. The schools a prospective leader attended, the alumni network he can tap on demand, his elders, family and friends that can look him in the eye and say “do not let us down because you represent us” all contribute to the pressure needed to make a leader perform with integrity.

2. Search for Team Players not Lone Rangers

The burden of governance in a diverse, ‘post-conflict’ nation like Nigeria requires more than one good person, however intelligent, competent and well-meaning. A strong, competent and cohesive team, not a single “strongman” is needed to transform a nation not in one or two election cycles but several. Only a team with clear succession planning can implement a long term vision that transforms nations. It takes a generation to move any country from Third World to First like Japan (LDP, 50 years), Malaysia (Mahathir and UMNO – 25 years) Singapore (Lee Kwan Yew, 33 years), Botswana (BPP, 35 years) and China (Deng Xiao Ping, CCP, 35 years and counting), and only a dedicated team sharing a common vision across parties and platforms can do it.

3.     Bold, Courageous Leaders with Clear Vision

Transformational leaders are bold and courageous. They envision and see what appears impossible to others, and persuade the followers that it is not only possible but attainable, outlining practical steps to realize the vision. Imagine meeting the Ruler of Dubai, Sheikh Mohammed bin Rashid Al-Maktoum 30 years ago and listening to his vision for converting his desert city wasteland to modern day Dubai. You would probably laugh and tag him unrealistic at best, or insane at worst – but Al-Maktoum persuaded his cabinet and citizens to believe and achieve this vision in less than a generation. That is the power of visionary leadership   – bold, courageous but realistic and realizable.

4.     Democrats in Words, Actions and Practice

It is one thing for aspiring leaders to talk repeatedly about democracy, but another to practice it. We should scrutinize our leaders’ words, actions and practices to ensure that there are no disconnects between all three. People driven by the politics of personal interest and primitive accumulation do not believe in democracy nor are they capable of practicing it in governance. They neither believe in social justice and equal opportunity for citizens. By nature, they are capricious and seek to exercise power singularly for private accumulation, not for general welfare, service and public good. They therefore have no regard for people capable of independent thought, merit and performance, so they inadvertently put blind loyalty above the Constitution.

5.     Public Service Skills and Performance

Public service experience particularly at Federal level is essential for effective future public leadership at that level. Similarly, any person aspiring to leadership at state or local government level ought to show some understanding of, experience in and exposure to that level of governance. Private sector success helps but is not a conclusive indicator of future public sector performance. In any case, there is a huge difference between the skill sets required for politics and governance because often persons that get a government elected are not the best persons to help it govern.

6.     Strong, Dedicated Advisers and Inner Circle

There is a Nigerian proverb which translated is “there is no wicked ruler without wicked advisers”. Effective leaders usually have a team of advisers that are brighter, more experienced and exposed than they are. Self-confident leaders identify their personal skills and experience gap and choose staff to furnish what is missing. A leader, however brilliant, who is surrounded by an inner circle of insecure, incompetent and mediocre people, often comes to grief. A leader, whose family is unable to keep away from affairs of state, and thereby fail to keep him grounded to the realities of leadership, often goes astray.

7.     Bridging Regional and Religious Divides

Nigeria’s diversity, history and recent experiences require leaders that build bridges across our genders, ethnic groups, regions and religions. No one should be elected to national leadership unless by expressions, actions and practices that have shown this capacity not to discriminate, but to unite, integrate and include every Nigerian of whatever background in his inner circle, comfortably. Careful scrutiny of the track record of any prospective leader in his or her past public and private life would show how diversely they recruited their staff, picked advisers and made decisions on siting of projects and programs. This principle can be applied to aspirants even seeking office at state and local government levels in a careful and discerning manner.

  1. 8.     Recognition for the Imbalance in our Federalism

Nigeria’s federal structure exists only in the official name of our nation. Years of administrative centralization by the military has created distortions and imbalances in our federalism. This needs to be recognized by our prospective leaders. We must raise this debate on federal imbalance to put on hold the senseless quest for the creation of more states, demand the  legislation of State and Federal crimes and cause the amendment of our Constitution to enable States and Local Governments establish community-level security agencies to address our disparate internal security needs. We must encourage inter-state competition by devolving more powers and responsibilities to lower tiers of government and reducing the scope and scale of Federal encroachment into the daily lives of our citizens.

The leadership parameters listed above are derived from limited experience and detached observation and therefore neither exhaustive nor silver bullets. As in everything in human affairs, there will be exceptional persons that may not meet all the requirements listed and still turn out to be effective. However, assuming that will be relying on chance – those ‘divine interventions’ that we pray and wait for instead of taking our destiny in our hands. I am a firm believer of the saying that “fate is what God gives you, and destiny is what you do with it.”

It is time for Nigerians to stop passing the buck to God, or waste energy on the needless blaming of everyone other than ourselves or those we like. By failing to stand up to resist bad rulers, we abdicated our destinies to the shameless criminals that permeate our political space and the public service. Our fate is the endowment that God gave us. It cannot be our destiny to continue to have bad leaders by selection or election. It is time to say ‘enough is enough’ and choose right.

As the world moves firmly into the 21st Century, we must firmly reject those that want Nigeria to remain in the dark ages – and move forward to restore dignity and hope in our younger generation. They must see a country that can work in their lifetimes – where electricity is stable, crimes are solved and criminals brought to justice – a Nigeria where capability and hard work are the primary tools for success in life.

Failing to do that within the next decade will lead to the breakdown of our society if not the total failure of the Nigerian state. We will not be able to handle the influx of 5 million hopeless and angry 18 year olds added every year during the ensuing period to our army of the under-educated and under-employed. In this avoidable scenario, none of our great grand-children may have the opportunity of seeing Nigeria celebrating its century of Independence. That will be a sad indictment on us all, particularly those born just before or around the end of colonization.

Pension Reforms: To be, or not to be? By Nasir Ahmad El-Rufai

Nasir_El_Rufai_717591792

A few years ago, it was common sight to see aged pensioners struggling – and often dying – in the process of obtaining what was rightfully theirs: their pensions. Due to the chaotic and punitive conditions suffered by these senior citizens who more often than not travelled great distances to Abuja to receive their dues, many simply gave up the ghost – some literally died while standing in queues.

Those that persevered were subjected to sleeping on the streets under harsh weather conditions and begging passersby for what to eat. To reward our parents and grandparents who had devoted their lives to serving Nigeria in such cavalier manner speaks volumes about our essence as individuals and collective humanity as a people.

Any discourse about the issue of pension reforms in Nigeria must begin with critical questions: What systems were in place for pension administration and how effective where they? What happened to the funds that were expected to be set aside for these pensioners over the years? Was there not a less cumbersome means of pension funds administration? What are the gains and losses of a decade of pension reforms, and what more do we need to do as a country to widen and deepen the social security system?

Pension, which is essentially setting aside monies for use in old age when one can no longer work and earn much income, was first started in the 1880s in present day Germany when Otto von Bismarck introduced social insurance programs that became the model for other countries and the basis of the modern welfare state. Bismarck introduced old age pensions, accident insurance, medical care and unemployment insurance. Bismarck appreciated that society has a responsibility to put in place a safety net for the old, the vulnerable and disadvantaged. Decades later, John F. Kennedy concurred with Bismarck’s vision when he observed that “if a free society cannot help the many who are poor, it cannot save the few who are rich.”

The first attempt at pension legislation in Nigeria was enacting the Pension Ordinance of 1951 which allowed the Governor-General to grant pensions and gratuities applicable to public sector employees, in accordance with the regulations, which were reviewed from time to time with the approval of the Secretary of State for Colonial Affairs in the UK government.

In 1961, the National Provident Fund (NPF) now the Nigerian Social Insurance Trust Fund (NSITF) was established by an Act of Parliament. It was established in line with the International Labour Organization’s (ILO) Social Security (Minimum Standards) Convention 102 of 1952 and sought to cater to employees in the private sector of the Nigerian economy.

Subsequently there were; the existing civil service pension scheme covered by the Basic Pension Decree 102 of 1979, the Local Government Pension Scheme which was established in 1977 and the Armed Forces Pension Scheme created through Decree 103 of 1979 by the Murtala-Obasanjo administration. There was also the Pensions Rights of Judges Decree No.5 of 1985 as amended by Decrees Nos. 51 of 1988,29 and 62 of 1991. The Police and other Agencies Pension Scheme Decree No. 75 of 1993 which took retroactive effect from 1990 represented another landmark development in the history of the Nigerian pension system and sought to cover the largest public sector organization in Nigeria – the Police with its nearly 400,000 officers and men.

There was one fundamental flaw with all these schemes – they mandated in the laws pension entitlements, called “defined benefits’ in pension’s parlance, without setting aside any cash to pay for the future liabilities. The assumption of successive governments in Nigeria (and indeed in many countries) is that there will always be tax (and oil) revenues to pay for future pension entitlements. This held true until the mid-1980s when profligate spending accompanied by collapsing oil prices and resultant debt burdens brought our economy to its knees. Pension payments became erratic and current arrears built up, and unfunded future liabilities escalated.

When the Bureau Public Enterprises was tasked with the responsibility of privatizing public enterprises in 1999, we realized that the unfunded pension liabilities in NITEL, then estimated at N43 billion and NEPA at N75 billion would make difficult if not impossible to privatize the companies. Who would buy a company with such hidden, future liabilities, in addition to over-staffing, attitudinal and other problems? Drawing on a seminal paper by a Nigerian lawyer Jude Uzonwanne of Levin & Srinivasan LLP, New York, the BPE presented a memorandum to the government in year 2000 warning that unfunded pension liabilities in public enterprises alone amounted to nearly N500 billion, while the rest of the public sector had another N1 trillion of the same.

The Obasanjo administration realized that a ‘defined contribution’ system needed to be put in place to replace the unfunded, defined-benefits “pay-as-you-go” pension scheme prevalent in Nigeria. A steering committee on pension reforms under the chairmanship of Fola Adeola worked at resolving the problem first in public enterprises, then nationally, with many outside stakeholders and select BPE staff. Many people like M K Ahmed, Dr. Musa Ibrahim, Chinelo Anohu and Aisha Umar that ended up being foundation staff of the future Pensions Commission played active in the committee and the aftermath.

The Fola Adeola team did extensive and commendable work and attempted to reform the pension structure in the country due to the gross inefficiency and poor administration of the previously launched schemes, culminating in the enactment of the Pension Reform Act 2004 (PRA 2004). In line with this, National Pension Commission (PenCom) was established to regulate and supervise all pension matters in the country.

Some of the highlights of the PRA 2004 are that the scheme would be contributory and fully funded, mandatory for organizations in the private sector with five staff and above, portable, provide full pension rights in the event of dismissal and the contents of Retirement Savings Account (RSAs) cannot be deducted by employers for any outstanding financial obligations among others.

How the contributory pension scheme works is that the employee contributes 7.5% of their income while the employer provides a minimum of 7.5% of the employee’s income into the RSA of the employee. For a country like Nigeria with huge income disparities and numerous low income earners, the total amount to be accumulated by an employee who worked for about 30 years on the current minimum wage of N18,000 monthly would roughly amount to N972,000.00 – less than a million naira for a lifetime of employment unless the contributions are invested in safe, but high yield investments that would increase faster than the rate of inflation and exchange rate deterioration.

The initiative, while laudable on paper and a major improvement over the old, unfunded system, has still not translated to alleviating the plight and hardship of current pensioners in the country, many of whom are not covered by the scheme. A lot more work has to go into the structure and manner in which pensions are administered in order to achieve the desired aims. It is time to look at the nearly ten years of experience of administering the PRA and enact amendments to improve the operations of the sector, and abolish the transitional arrangements that have led to the theft of billions of Naira under the office of the Head of Civil Service of the Federation.

As at 2012, 23.9% of the labor force was unemployed according to the National Bureau of Statistics (NBS). This invariably implies that a whopping 76.1% of the labor force is gainfully employed. According to the CIA World Fact Book, the total labor force in the country was 52.5m in 2011. Using 2011 statistics to calculate even though the numbers must have risen giving the teeming population of graduates churned out daily from our institutions of higher learning, the probable number of employees in the country is nothing less than about 39.9m at present.

However, of the total employed population across the country, only a paltry 13.2% (5.28 m) of workers had been registered under the scheme as at September, 2012 since its inception in 2004 according to the immediate past CEO of the commission. The statistics are bleak for the pace of work carried out in the whole of 8 years, and more needs to be done!

In addition to the snail pace at which the scheme is being executed, a major issue with the pension administration in Nigeria is execution at the state level. At the end of 2012, very few state workers were beneficiaries from the scheme; mainly because the states are allowed to enact their own laws and the PRA 2004 is not binding on them. So far, about 21 states have adopted the contributory pension scheme while 14 others have initiated the process of enacting versions of contributory pension schemes in their states. Lagos state is the only state according to Pencom that has fully funded its pension obligation to its workers. Katsina used to be another until recently when arrears have accumulated without any justifiable cause.

Another noteworthy area is private and informal sector participation in the scheme which has been particularly poor. Many reasons come to the fore here. How do you enforce an act when there is no data on the number of private companies or informal businesses contributing to the GDP of the nation? Majority of small businesses evade the scheme because of the cost to them and minimal penalties for evasion. Pencom has barely been able to cover the urban areas much less the rural areas. The implication of this is that the scheme is highly imbalanced; focusing mainly on employees of the Public Sector and urban dwellers while neglecting the private and informal sectors as well as the rural areas.

To worsen matters, the Pension Reform Task Team (PRTT) set up sometime in 2010 to bring some sanity to the system and ensure that pensioners received their pensions as and when due, rather than perform their tasks, only succeeded in embezzling the funds at their disposal. While claiming to have uncovered misappropriated funds, the committee itself depleted pensioners’ funds worth billions of naira on frivolities and corruption.

Pension funds, the world over, are designed not just to provide respite to employees in their post-retirement years but are meant to boost economies by improving their financial markets, accumulate re-investable savings and contribute to the GDP. Funds accumulated from pension deductions ideally, would be channeled into creating employment opportunities and financing infrastructural projects such as electricity, transportation, housing e.t.c. As at September 2012, the accumulated pension funds had amounted to some N2.94 trillion quite impressively. Whether this will translate to visible infrastructural development in the next few years is an entirely different matter.

It is imperative that the government critically analyzes the pension structure and make amends where necessary so that the scheme does not die a natural death. Pensions could be a very important aspect of the economy if done right with multiplier effects across many sectors. A contributory pension scheme where pensioners die in the course of claiming entitlements is definitely not a step in the right direction. It will certainly hamper on employees’ productivity while still active. One where those at the helms of affairs are embezzling retirees’ hard earned funds, is without doubt a disgrace to the nation as a whole.

The pension schemes adopted must take into cognizance our peculiarities as a nation and those in our economy. It should not be implemented in the typical fashion of other economic policies which are just cut and paste models of those obtainable in the more advanced nations. It should be tailored to the needs of the beneficiaries. The structure, direction and sustainability of the scheme must be clearly articulated so that it does not end up as another haphazardly implemented project. Most importantly, it should achieve its purpose which is securing the future of employees in the most convenient manner.

Nasir El-rufai on Friday – Crime: Nigeria’s only thriving industry? Introducing Young Voices – Ayobami Oyalowo

Ayobami Oyalowo writes about the death of Governor Yakowa and co. in a plane crash warning the Nigerian elite, "if the roads aren’t safe for us, even the air will be contaminated for you"

Our young voice for this Friday is not that young – Ayo Oyalowo (@Ayourb on Twitter) is in his late 30s, so part of the demographic group that accounts for nearly 80% of our country’s population. Ayo’s experience has been in financial services and today is one of the most vocal and emerging voices on social media, particularly on Twitter. 

Ayo’s New Year message is about the distortion of our incentive structure in Nigeria which has reached stratospheric levels under the Jonathan administration – the rewarding of laziness, crime and bigotry while punishing hard work, righteousness and social inclusion amongst our people. Our leadership has failed massively in 2012. Ayo and the rest of us hope that they will listen to the voices of the majority and do better in 2013. 

It is my singular honour and privilege to present Mr. Ayobami Oyalowo and his contribution to improving our nation, in the footsteps of young patriots like Chinedu Ekeke, Elnathan John, Auwal Sani Anwar, Japhet Omojuwa, Zainab Usman, Jude Egbas and Ogunyemi Bukola. Happy New Year.

- Nasir El-Rufai 

Crime: Nigeria’s Only Thriving Industry? By: Ayobami Oyalowo

The rising wave of crime is disheartening to most Nigerians. On Sunday, November 28, 2012, Nigerians were greeted by a hitherto unimaginable event: the bombing of a church in Jaji (near Kaduna, North-Central Nigeria), one of the “most-secure” military facilities in Nigeria. Hardly had the news sunk in than news of another attack on the office complex of the Special Anti-Robbery Squad (SARS) in Abuja greeted the airwaves. Then came the news about a heavy bombardment of banks, a police station and some military facilities in Auchi (Edo State, South-South Nigeria). All these incidents happened within a 24-hour interval, leaving in its wake a huge number of casualties. The reality of today is that life has little value in the Jonathan-ruled Nigeria.

But, how did we get here? Gradually. Because, while the rot did not start with the present government, it is clear to any discerning mind that the highly unfocused posture of this government has given criminals and militants the boldness to take on the state without fear of retribution.

No society is totally crime-free. However, in egalitarian societies, where equality is a norm and justice is guaranteed should there be a breach, crime rates are generally at the barest minimum. In present day Nigeria, though, this is not the case. No thanks to the high unemployment statistics – swelled even more by the huge number of graduates and other school-leavers churned out annually, add to that the large number of underemployed and frustrated citizens – Nigeria is in a highly volatile state, armed with willing youths needing economic emancipation. And since our society does not frown anymore at sudden wealth or a display of opulence, we are surely ripe for the picking. Throw in an inept, rudderless government, and you have the complete recipe for disaster.

A cursory look at the proposed budget of Nigeria in 2013, tells a sad tale to any discerning mind. The health of a corporation, state or nation, can easily be ascertained by looking at the quality of the budget; and a look at next year’s budget, as proposed by the “most brilliant” Coordinating Minister of the Economy, Ngozi Okonjo-Iweala, shows a nation bereft of developmental ideas and a leadership lacking in sincerity and focus. With the sum of N2.6 billion budgeted for the president’s numerous, but mostly avoidable, international junketing termed ‘foreign trips’, and another N1.3 billion budgeted for feeding and snacks for the office of the President and his vice, one wonders at the focus and priority of these “leaders”.

How do you allocate N60.1billion to education, N55.8billion to health and N31.8billion to Science & Technology, then N23.6billion to only 30,000 ex-militants? Why shouldn’t the 70% of the population under the age of 35 years join these militants? Because, if you take up arms against the state, create as much tension, shed as much blood as possible, and then negotiate with the government, you will go scot-free, get juicy contracts and enjoy federal patronage, as well.

In August, the Wall Street Journal (WSJ) broke some disturbing news about Nigeria. It was reported that some ex-militants in the Niger Delta had been paid about N6.32billion within the past one year by the Nigerian National Petroleum Corporation (NNPC). Yes, for the ‘noble’ service of providing security against vandals for the Corporation’s oil pipeline network. Imagine! The breakdown, as outlined by WSJ, is this:

Chief Government Ekpumopolo (alias Tompolo), Alhaji Mujahid Asari-Dokubo, ‘General’ Ebikabowei Victor Ben (Boyloaf) and ‘General’ Ateke Tom were respectively paid N5.1 billion, N1.44 billion, N608 million and N608 million yearly by the state-owned NNPC, as ‘protection money’ to guard the pipelines they once attacked.

As if that was not enough an insult on the collective intelligence of Nigerians, earlier in the year the Federal Government awarded a contract worth $103.4million (over N15billion) to the Global West Vessel Specialist Limited (GWVSL) – a firm widely believed to be owned by Tompolo to supply 20 vessels for the use of the nation’s military authorities to secure the waterways. Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Ziadeke Akpobolokemi, had last year sent a memo titled, “Award of Contract for the Strategic Concessioning Partnership with NIMASA to Provide Platforms for Tracking Ships and Cargoes, Enforce Regulatory Compliance and Surveillance Of The Entire Nigerian Maritime Domain,” to President Goodluck Jonathan.

In considering the memo, President Goodluck Jonathan and Akpobolokemi chose GWVSL as the preferred company for the 10-year concession agreement, renewable for two terms of five years each. Jonathan, in a memo dated 9th November, 2011, with reference number PRES/99/MT/61, approved Akpobolokemi’s memo, which the Federal Executive Council rubber-stamped on 5th January, 2012. According to Akpobolokemi, GWVSL “will provide platforms for effective policing of Nigeria’s maritime domain and ensure compliance with international maritime conventions on vessels and ships voyaging the country’s waters”. NIMASA maintains that the concessionaire would help the Federal Government to enforce the sabotage law and collect levies on its behalf. This, in a country that still maintains a statutory naval force, and without a track record for GWVSL?

When you consider the reckless budget, and the pampering of criminals nicknamed militants by the government as led by Jonathan, the conclusion is very grim. Now, the government plans to negotiate with the Boko Haram terrorists group. This is a clear indication of the failure, nay, surrender, of government. It points to just one thing: this government lacks balls! Harass and intimidate it and you are assured of juicy returns after negotiation.

The Basque Separatists Movement in Spain, which has been on a collision course with the Spanish authorities since 1959, has a casualty figure of 800 in their 53 years of existence. For Boko Haram, which came alive just about 3 years ago, the figure is in thousands. Indeed, the lives of ordinary Nigerians mean little or nothing to those in government. After all, the government itself routinely murders citizens extra-judicially through its security personnel at check points. The case of Lucy of Apo in Abuja and the 5-day old groom in Lagos readily spring to mind, amongst countless others.

The total annual emolument of a senator as recommended by Revenue Mobilisation and Fiscal Commission (RMAFC) stands at N12.766 million per annum (about N1.063 million per month), with slightly less figures for members of the House of Representatives, amounting to N5.6billion for the 469 members of the National Assembly. The 2013 budget, however, makes a provision of N150billion for the National Assembly, so members earn in a month more than they are entitled to in a year (based on the RMAFC recommendation). Indeed, the recklessness is not limited to the executive; it is a total package of bare-faced fiscal irresponsibility, by all arms of government.

Though the above paint a grim picture, the entire story is yet to be told: Mallam Nasir El-rufai had earlier stated that to clear the backlog of jobless youths, Nigeria will need to create about 3 million jobs annually for 5 years. Add to this the number of NYSC members that get discharged annually, plus the number of those recently laid off by banks and the picture gets bleaker. And why won’t it, if over 60% of the budget is either lost or unaccounted for and only 30% annual budget performance?

In all these, though, I dare say that the case of Nigeria is not a hopeless one. Yes, Nigeria’s foreign debt profile currently stands at about $7billion. But, then, Nigeria’s problem is largely a man-made problem. Greed, avarice, selfishness and corruption in high places are our bane. Hence, our government officials only need to stop stealing or, at least, reduce what they regularly steal. The

government cannot continue to preach sacrifice to the suffering Nigerian masses while its executives live in opulence. The governor of Kano state recently bought 3 bullet-proof SUVs valued at N156million, while the governors of Rivers and Akwa Ibom states also acquired Bombardier jets, each valued at about $45million.

Government at all levels must cut down on avoidable expenses. No nation can develop with a 70:30 recurrent to capital expenditure ratio. We must wake up and realize that developing Nigeria is an assignment for us all. We don’t determine the price of the oil which provides the bulk of our national revenue. Again, it is a volatile product, whose terminal date is about 39years away. A sensible government, therefore, should begin to plan for that time.

Again, more countries are discovering oil, as well as alternative sources of energy. This means that soon, our oil will no longer be as important and lucrative as it is today.

Furthermore, the discarded probe reports and endless committees/panels have revealed that the government lacks the will to fight corruption. Then, with KPMG declaring Nigeria the most corrupt country in their half-term report of 2012 and the Gallup poll showing the Nigeria government to be the second most corrupt in the world, the government must work at improving the statistics.

Finally, like I earlier averred, the case of Nigeria is not a totally hopeless one, but the government must be sincere and be truly ready to fight corruption and nepotism. Until corruption is killed, Nigerians will continue to die cheap deaths, while criminals will continually have a free reign in the land. Awarding contracts to kingpins in the guise of amnesty is not only travesty, but an open invitation to anarchy, as well. Accountability and probity are non-negotiable in our march to greatness. The government either exterminates corruption or by consequence of inaction, will continually contribute to dividing, impoverishing and punishing Nigerians.

As a wise man once said, “You can deceive some of the people some of the time, or even all the people some of the time, but not all the people all the time.”

 

Follow the writer on twitter @Ayourb

El-Rufai on Friday: Introducing >>> The Opportunity Cost Of Corruption, By Chinedu Ekeke

Nasir El-Rufai

 Apart from being young – with their ages ranging from 20 to early 30s, all our young voices have a few qualities in common. They are all honest, passionate, patriotic, detribalized, intelligent, thoughtful and angry about the Nigerian condition. Our last young voice for the year – Mr. Chinedu Ekeke has these qualities and more, and for many requires no introduction. His blog, www.ekekeee.com, is one of the top three platforms offering Nigerian youths an outlet to articulate, debate and express their diverse views. When presidential mouthpiece Reuben Abati wrote about ‘collective children of anger’, he was probably referring to Chinedu and these youths whose conscience cannot be purchased with the gift of contracts, money or positions in a hapless federal government whose decisions and actions are daily compromising their future!

Chinedu trained as an accountant and works as one, but following the footsteps of accounting graduates Adamu Adamu and Ijeoma Nwogwugwu, applies his writing talent to draw attention to what need doing to make our nation better. His articles have been published by Sahara Reporters and many old and new media platforms. His more recent and extremely popular pieces include ‘The Audacity of a Rogue Regime’ and ‘Echoes from the Niger Delta’. Today, he writes about the opportunity cost of corruption.

It is my singular honour and privilege to present Chinedu Ekeke to you, with our best wishes and prayers that the insecurity, fraud and corruption we have been subjected to in 2012, will end with this horribly Jonathanian year! Amen.  - Nasir Ahmad El-Rufai

 The Opportunity Cost Of Corruption – By Chinedu Ekeke

First, corruption and national development are mutually exclusive. But I’ll get back to that.

The first sense necessary for leadership in any clime is the sense for common good. With such mindset, the dictates of common sense no longer assume the rigours of rocket science. The simplicity of having enough funds for investment in massive infrastructure no longer becomes an issue to be explained away.

Twisting of facts becomes unnecessary. Seeking the validation of courtiers becomes unimportant to leadership. The secret is when leadership is burdened by the desire to work for the common good.

Without the love for country – and not loving Nigeria has been the single qualification for attaining leadership here – no suggestion, no matter how patriotic, will be taken by those who call the shots in the seats of power. That is why this article will not be taken seriously by those who need it most: the president and his team. They don’t run a government of common sense. They run a regime of miracles.

They squander billions in subsidy fraud, dubious budget for cutleries and banquet halls, and then ‘trust’ God with our national development. For leaders who love their country, an understanding of opportunity cost, a basic concept in Economics, helps in economic decision making.

The opportunity cost of anything is the highest valued alternative that must be forgone when a choice is made. It is the cost of any choice made, or activity involved in, measured by valuing the next best alternative not chosen or taken.

In my days in secondary school, faced with the trouble of having to reel out in full length the definition outlined by my Economics teacher, and to save myself the trouble of having to cram it for the purpose of passing exams, I resorted to just making do with the other phrase that sums it up; “Alternative forgone”.

Yes, opportunity cost is alternative forgone. It is actually a cost, like a loss. The ‘loss’ here means the loss of benefits derivable from the alternative not taken.

When we make the choice to erect corruption as a national monument, we have chosen to lose the benefits derivable from the national assets we would have built with the funds stolen.

When I did an essay on the ‘Time Value Of Corruption’, I highlighted what we are losing today, in monetary terms, by having allowed people steal our billions 20 years ago without making them pay back, and possibly go to jail. I went ahead to do a projection on the future value of the current billions and trillions that the Jonathan regime’s friends are stealing with reckless abandon. In analyzing the opportunity cost of corruption, I may not get absolutely quantitative to be able to pass my message, but I will be as expressive as I can to make my point clearly known.

As I said in my opening line, corruption and national development are mutually exclusive.

Recently, a Sunday Punch report revealed that over N5 trillion belonging to Nigerians has been stolen under the watch of president Goodluck Jonathan since he ascended the presidency. I wouldn’t have been as worried as I am if there has been any effort to bring the culprits of the earth-shattering criminality to book. The government is carrying on as if all is well, while Nigerians, who have become victims of over three decades of state-promoted roguery, languish under grinding poverty and unemployment, unable to afford even the most basic needs of life in a country so blessed by God.

As the president makes – and shows much comfort in – the choice of allowing his cabinet members, friends, and ‘privileged’ fraudulent business men fritter away our petro-naira unquestioned, it is critical we call his attention to the opportunity cost of that choice.  We are forgoing many infrastructural developmental alternatives.

Let’s look at housing. The federal government hasn’t shown that it understands the need for housing for our huge population, that’s why slums abound in the cities with the slumlords boldly ripping helpless citizens off. With N5 trillion, and through direct labour involvement, we can build exactly 2.5million units of 2-bedroom flats at N2 million per flat. The houses do not need sophisticated designs or exquisite materials: just simple designs with simple but durable building materials. My interaction with builders has assured me that N2 million can build a 2-bedroom apartment through direct labour. Do note that we will not need to buy land because the land belongs to the government. Government will simply make land available. We will not also need to include the cost of contractors, because we will be using direct labour.

The staff of Federal Housing Authority can, in conjunction with the staff of ministry of environment, supervise the project. The houses will be spread across major cities in the six geo-political zones with huge populations. This will help provide accommodation for people, lessen the pressure on the badly built and poorly maintained houses, and help clean our cities of slums.

So the opportunity cost of N5 trillion stolen under President Jonathan’s watch is 2.5million units of low cost housing for the urban poor and middle class.

But that is if we choose to invest the money in housing. We could choose to concentrate on electricity.

With N5 trillion, we can build more power stations to increase significantly our electricity generation. If we had done that within the period we watched the privileged ones steal  the money, by today we will not be gloating over 4500 megawatts of electricity that cannot serve even counties in the United States, let alone states.  We will be talking about 15,000 megawatts or more, generated and distributed nationwide to revive moribund businesses and productive activities.

The opportunity cost of our stolen N5 trillion under President Jonathan is constant electric supply.

We may also choose not to face any of the mentioned opportunity costs in absolute terms. We may combine them in a certain proportion, building a portion of this and a portion of that with the N5 trillion.

Even at that, the impact of each would have been so visible that it will be impossible for even the president’s enemies to deny him the deserved credit.

If we chose to build just 1 million housing units with N2 trillion and used the remaining N3 trillion for power stations, then the opportunity cost of the N5 trillion stolen under President Jonathan would have given us 1million units of 2-bedroom flats and say, about 15000megawatts of electricity.

We could, instead, choose to focus on health care. Instead of bearing the shame of having privileged Nigerians jet out in droves, every day, to India and the West to treat minor and major ailments, we could build world-class hospitals with state of the art equipment for the treatment of all kinds of ailment. In such cases we will not need to take emergency health cases off the shores of our country.

The opportunity cost of the N5 trillion stolen under the watch, and official inaction, of President Jonathan is the needless deaths of millions of Nigerians who cannot afford the cost of foreign medical treatments, the loss of money we incur from those who can afford it, and the loss of jobs we would have created for our people if we had built quality hospitals that can treat ailments qualitatively.

But it is not just about the stolen funds. There’s also the opportunity cost of profligacy and waste in government. For instance, in one very shameful demonstration of insensitivity, the president and his mediocre ministers approved the construction of a new banquet hall in Aso Villa. This is in spite of an existing banquet hall for the presidency. No serious president with about 112 million people in his country living in squalor will dare tolerate a mere mention of a new banquet hall from either a minister or an aide.

Every serious leader runs his country like a family. Responsible families do not stretch their expenses beyond their means. Our rulers are both irresponsible and mischievous, that’s why an issue as an unneeded banquet hall will even become a subject of discourse.

But the opportunity cost of that presidential banquet hall is well funded tertiary institutions that can compete with the very best in, at least, Africa, or well paved roads in some distant lands forgotten by the federal government.

There are even more.

The opportunity cost of spending N16billion to build a house for the VP is the pipe-borne water that should run through our houses.

The opportunity cost of paying N6.5billion – unaccounted for – to state governors as security votes is well-funded and reformed police with adequate personnel to protect our lives and property.

The opportunity cost of letting David Mark pay himself N600million per annum – an amount that will pay for ten years the United States presidents’ salary – is millions of jobs that we would have created for our teeming youths.

Equally, the opportunity cost of paying a Nigerian legislator more than the British Prime Minister is the millions of good jobs we would have created with the inexplicably huge amounts.

Because money is stolen in Nigeria – legally and illegally – with impunity, we have lost the opportunity to develop our country, and compete with the rest of the world.

Corruption and national development are mutually exclusive, that’s why you should ignore the government official who comes on national TV to promise you development. The money for our development is the same money they have stolen.

 We will only commence our journey into national rebirth the moment we take the stealing of government funds seriously. We can’t watch people empty our treasury and then still pretend we will build infrastructure. It is the money for infrastructure that has been stolen.

Corruption and infrastructural development are mutually exclusive.

Chinedu Ekeke can be reached on Twitter as @ekekeee. 

Why Nigeria Must Revisit Land Reforms, By Nasir Ahmad El-Rufai

Nasir El-Rufai

Though pervasive insecurity and the fear of kidnapping means that some Nigerians will be unable to travel ‘home’ for Christmas this year, the millions who are poorly accommodated in the towns and cities where they live and work have little option but to travel to places where they probably have well-built houses that otherwise remain empty for most of the year. And this leads to the posers: Where is ‘home’? How can Nigeria guarantee equal access to land for its citizens? How can we make land available and affordable to all citizens? Can land reforms mitigate Nigeria’s food insecurity and housing shortages?

The history of land ownership, utilization and development in Nigeria dates back to the pre-colonial era when the customary land tenure existed. The customary tenure was considered an impediment to agricultural development due to absence of secure, clearly defined property rights. The fact that agreements were made orally as opposed to in writing meant there was a high risk of parties not upholding their agreements, and disputes arising when time and old age lead to loss of memory or death.

Land reforms can be very challenging since they involve amending laws regarding land ownership, re-claiming land controlled by one group and redistributing same in favour of other groups. That is why the current Land Use Act enacted in March 1978 by the Obasanjo military government marked a defining moment in the history of land development in Nigeria. However, the Act made up of eight parts and fifty-one sections, has become the subject of numerous litigations regarding customary ownership, methods of land acquisition, and resource ownership. The Act was first incorporated by reference into the Nigerian Constitution in 1979, and it has remained there ever since, making it a “Super Act” that can only be tampered with via constitutional amendment. This has had unintended consequences we will dwell upon shortly.

The main tenet of the Land Use Act of 1978 is its omnibus provision which vested the trusteeship of land in the governor of a state or the president in the case of the Federal Capital Territory. Since 1984, the president delegated this trust in land to the minister of the Federal Capital Territory as an amendment to the FCT Act of 1976. Further references to ‘state governor’ in this piece therefore include the minister of the FCT in case of Abuja.

The Land Use Act remains a well-intentioned legislation that sought to reduce inequalities and avarice in acquisition of land. It recognized that urban land would be more valuable and sough to classify and control the process of its acquisition. It differentiated between urban and rural land, while placing a size limit of 5,000 square meters for residential land as the maximum that can be allocated to an individual. The Act delegated the trust in land in rural areas to Local Government councils, but the Court of Appeal in 2001 ruled that the six area councils in the FCT had no such powers to allocate as what was delegated to the minister by the president could not be further sub-delegated in law.

This government cannot overlook the pivotal role the Land Use Act was expected to play in solving Nigeria’s housing crisis. The Land Use Act ought to have enabled the Federal Mortgage Bank and the various state ministries in charge of housing and urban development to work together to create an active primary and secondary markets in housing and a mortgage system. So far, this has not happened.

Rural land is assuming increasing importance due to the future intensity of agriculture and mining activities. It is estimated that 60 percent of the world’s uncultivated arable land is in Africa. In Nigeria, more than 30 million hectares of arable remain uncultivated or untouched by human activity. Our capacity to deploy these for commercial farming and mining is only limited by visionless leaderships at federal and state levels. As a nation that has just witnessed its worst flooding and still has most of its farmland under water, the only indices for measuring our capacity to guarantee food security is our level of land and agricultural development. We should take to heart ways of ensuring that our farmers in particular have easy access to arable land and infrastructure to take produce to storage and markets. The Land Use Act, with some improvements can facilitate these.

The Land Use Act simply converted outright ownership (or freehold, perpetual or ‘fee simple’ titles to land) to Rights of Occupancy which are leaseholds with a tenure not exceeding 99 years. As a result of this, even the ownership rights of ancestral land acquired over generations and passed on as inheritance, were upturned in favour of the state governors holding in trust for all citizens of Nigeria.

The constitution recognizes the right of the state to acquire land where necessary, provided compensation is paid. This ensures an impartial and even handed balance between the constitutional right of the individual and public interest represented by government regarding land acquisition and re-possession. But in a country pervaded by information asymmetry, corruption and abuse of power by public servants like Nigeria, putting all territorial land in the trust of a state governor perhaps is the biggest strength and weakness of the Land Use Act.

The recurrent problem with this simply is: the requirements for compensation when Rights of Occupancy are revoked for overriding public interest are observed more in breach. Worse, where compensation is paid at all, it is always both inadequate and inordinately delayed. The beneficiaries of the confusion arising from the constitutional and statutory loopholes are usually the high and mighty in the society. At times, the complete disregard of due process is brazen – as manifested in the tussle for land in an area of Abuja reserved only for federal and state government buildings – between the first lady and her immediate predecessor! If this kind of scenario can play out at that level, clearly, the ordinary citizen whose title to land is at the discretion of a governor has a lot to worry about.

Despite the fact that land is entrusted to the state governors, the extent of that right is limited by the principle of “Eminent Domain” and other which vest control of the skies above the land and minerals resources existent below the surface to the Federal Government. This has brought about some conflict, especially amongst the oil and mineral producing areas of Nigeria when title to land is vested in one person while another has license to mine the land and fly above it!.  For land reform efforts to be effective, they must address comprehensively the congruence between land and minerals ownership and control.

There are some provisions of the Land Use Act that have had unintended consequences and negative impact on the utilization of land, development of commercial agriculture, housing and the real estate markets in the country. For instance, even with a Right of Occupancy issued in one’s favour, one cannot sell, transfer, assign, sub-lease or mortgage or otherwise deal in the title without obtaining the prior consent of the state governor.

This “consent’ can take between weeks and several years, is expensive and fraught with corruption. Surely, if something is gifted to me and recognized as belonging to me for the next 99 years, I should be able to sell it without the consent of the person that gave me the gift. These and other “control freak” type of clauses ought to be removed from the Act and eliminate the corruption associated with citizens’ compliance with its provisions.

The Act is long due for appropriate review and amendment. The government’s primary aim should be to bring relative ease to land dealings, delegate some of the powers vested in the state governor to other officials or an independent body and legislate a nationwide, computerized land registration regime that will be open, transparent and accessible to every citizen. It is a well-known fact that in countries like the UAE, Canada and France, where land reforms have been successfully implemented, its impact has been rapid economic growth, improved access to housing, the development of industries that thrive on land like enhanced commercial agriculture amongst others.

Constitutional lawyers believe that it might be better to obliterate the current anti-development thrust and dysfunctions of the Land Use Act either at once or in stages. Doing so at once would require the federal and state legislative and executive arms of government to concurrently consult with one another on the need to harmonize their positions so that the amendment requirements for this Super Act of Parliament could all be done at once.

Other lawyers who believe that the “harmonization” of positions could take many years to achieve under a federal constitutional, and that given the rising economic significance or exchange value of land whose quantity is fixed against an exploding population, advise that the approach be staggered. There appears to be broad consensus on the aspects of the Act that need amendment, improvement and repeal.

An attempt to amend the Land Use Act was made in 2009. Former President Umaru Musa Yar’Adua sent 14 amendments titled Land Use Act (Amendment) 2009 to the National Assembly for debate and adoption, following which the approval of the states’ houses of assembly would be sought.  The proposed bill sought to vest “fee simple” ownership of land in the hands of those with customary rights, enable farmers use land as collateral for loans for commercial farming, limit the requirement of the Governor’s consent to assignment only which will drastically reduce bottlenecks, and render such consent unnecessary for mortgages, subleases and other forms of alienation of land. Yar’Adua also proposed that independent land reform commissions be established at national and state levels to exercise some of the powers of state governors under the current Land Use Act. These are commendable first steps, even if considered not bold enough for many lawyers and real estate professionals.

This administration would do well if it critically revisits the proposed amendments, revise and expand them where necessary, with the aim to have the relevant gaps handled in the ongoing constitution review. If this government can effectively implement land reforms, perhaps, our claim to being Africa’s giants would have some substance in it, a generation from now.

So what is the way forward for land reforms?

The first critical step would be to remove the Land Use Act 1978 out of the constitution and make it an ordinary law. Thereafter, it could be changed as an ordinary federal legislation, or better still to allow each state to make its own land use legislation. It is our considered opinion that in competing for investors’ attention, progressive states would align their land legislation with the requirements of a progressive political economy.

Far more important to entrench in the Constitution is a mandated system of digitized land registration that will be graphical, transparent and accessible to everyone upon the payment of a token fee in each state of the federation. It is important that all the 38 land registers be able to seamlessly communicate with one another for the benefit of citizens, bankers, lawyers and real estate professionals.

Once secondary transactions in land are removed from the most highly retrogressive “governors dual statutory consent to assign and mortgage”, land related investments would become highly bankable. Such transactions have the potential to increase the share of mortgage loans of the GDP to over 25% and concurrently raise the extant portfolio of mortgages and real estate assets to up to 60% of the consolidated Nigerian banking balance sheet within a decade, from below 0.5% which is the current contribution of land-related asset class to both metrics.

Not a few voices, however, are of the view that what matters is for the new law to attract investments into commercial agriculture and housing finance. Both are needed to stabilize and empower our rural peasantry and the middle classes. For instance, amending the Pension Reforms and Insurance Acts to set aside a proportion of the funds for investments in commercial agriculture and real estate will help a great deal.

Finally, constitutional amendment of the Land Use Act 1978 should not be considered in isolation, but along with new and long overdue foreclosure and securitization laws. The three laws when enacted would make every governing entity in Nigeria sustainable through land-related income and property taxes. Once these reforms are in place, Nigerians will begin to define ‘home’ not as their states of origin, but where they live and work. That is the mindset needed to bring about a new Nigeria.

El-Rufai on Friday: Introducing Oluwafunmilayo Oyatogun — Green, White, Hoax

Nasir El-Rufai

 Oluwafunmilayo Oyatogun is determined and passionate. At the young age of 20, she is a graduating senior at the University of Colorado- Boulder with a double major in Environmental studies and Geography.

Appalled by the little attention given to environmental issues in Nigeria, she founded Bailiff Africa: a platform that provides environmental sustainability initiatives, and serves to promote environmental consciousness among Nigerian youths, and eventually, Africa.

This week, she writes about a Nigeria that sadly models its fundamentals around more developed nations, but is not mindful of the fact that these nations themselves have begun to collapse. She warns that if we blind our eyes to the failures of these more established nations, we are bound to repeat the same mistakes they made.

It is with pleasure that I introduce another young person Oluwafunmilayo Oyatogun. She follows in the footsteps of Jude Egbas, Yemi Adamolekun, Auwal S. Anwar, Elnathan John, Japheth Omojuwa, Zainab Usman, and Ogunyemi Bukola – all young people with a passion to leave Nigeria a little better than they met it. -Nasir El-Rufai

Green, White, Hoax, By Oluwafunmilayo Oyatogun

Nigeria, in recent history, has become a callous imitator: of so-called democracy, of so-called enlightenment and of so-called development. What is most unsettling is the failure of Nigeria to learn from the flaws of those nations which have gone ahead of her in her quest for development. In the formulation of the Nigerian Dream by the Nigerian state and in the minds of Nigerians, little work has gone into creating a strategic and sustainable model. Instead, the models of foregone nations – along with their dents, holes and inadequacies – have been copied and pasted into the Nigerian context. In fact, the conventional Nigerian Dream is not a dream at all; it is a plagiarized piece which offers an inadequate image of an already substantially warped phenomenon.

In primary school, we distinguished growth from development very easily because growth meant quantitative expansion while development meant qualitative expansion. This definition, like everything else in primary school, is simplistic, non-encompassing and narrow. However, like everything else in primary school, it is basic, fundamental and indispensable. But in Nigeria, capitalistic growth formulas have replaced those of development and a recurring, self-inhibiting cycle has formed. If the Nigerian Dream, whatever it may be, is modeled after the “American Dream”, that is its first and biggest flaw.

In order for Nigeria to thrust itself out of the stronghold of corruption, and before it goes far along the road of blind, goalless and hollow development, the citizens must identify what development means and what this development is worth.

Bailif_Africa

The Nigerian flag is a symbol of the country. It is twice as green as it is white; symbolizing twice as much agricultural viability as it is conflict-free and twice as much environmental sustainability as it is harmonious. Yet, in Nigeria today, harmony, peace, agriculture and environmental sustainability are nearly alien concepts. Perhaps because they do not fit too well within our facade of a dream, the one we copied and attempted to present as our own. Nigeria, the land of contradictions, has become more than just a literary and artistic land of contradictions; it has become a pitiful paradox. Therefore, the Nigerian Dream of Development must undergo a thorough overhaul and must pass the test of sustainability before the youth propagate it in its current self-destructing form.

Our first capital base of development is the natural environment (the land, air, water, flora and fauna). Of course, humans are just as much a part of this natural environment as the smallest seed pollinator. We, humans, feature again in the second capital base: our social environment. We hold the capacity of investment, of intelligence and of wealth creation. Yet, humans are the only species which in the quest for survival, desecrate and destroy our very capital base for survival.

Baillif_org

In Nigeria, our measures of ‘Nigerian Development’ are the very things that often hinder actual Nigerian Development. Our economic strategies encourage short-term boom for few but long-term doom for the masses. These include ridiculous debt-incurring plans, importation of foreign and multi-national corporations to suffocate the local ones which retain capital and investments in the country, etc. Worst of all is the importation of corporations which exploit local resources for the benefit of everyone but the host communities.

In developing fossil-fuels, companies devastate the environment because they do not have to account for pollution in their upfront costs. By doing so, they externalize the costs to people who have little or no contribution to the production of pollution but have to pay for them in various forms including disease and death. But we must curse the indiscretions of oil companies with slight reservation since they produce what we consume, they supply as we demand.

In January 2012, the Occupy Nigeria / Subsidy protests were as successful as they were partly because fuel was the middle ground that brought the poor and the rich together. The rich man must fuel his Mercedes; the poor man must pay for a truck ride for his oranges to the market. Put simply, everyone and everything depends on oil fuel.

And yet, in a country such as Nigeria where we produce and export oil, there is nothing to show for it. Well…nothing but thick, dense, black clouds over Lagos, rivers of more plastic than water or sea life, desert encroachment and the Niger Delta curse. And that exactly is the problem with the current ‘development model.’

It poisons the base which could enable further investment; the land that feeds us, the water that feeds the land that feeds us, the air we breathe and the people who make these investments.

Unfortunately, many still argue ignorantly for the socio-economic inputs these corporations make to their host communities: schools, hospitals, community centers and scholarships. These are treatments of symptoms, instead of treatments of diseases. Before another school is built, it must be questioned why previous schools have not survived. It must be questioned why there is no school in the first place.

More so, development projects of organizations which dance around the problems created by them are not beneficial to the general development of the community, or state, or country.

A corporation that has a chronic history of oil spills in a community only seeks to blind the conscience of that community by building schools, hospitals and doing everything but cleaning up the spills which contribute to stunted economic growth in those communities.

If this is right, how about other nations? How about the ones we look up to; our impeccable models of truth? The sad reality is that development in the West, the kind Nigeria now copies, albeit woefully, has begun to collapse on itself. It is a shame for a nation like Nigeria to blind its eyes to the failures of older, more established nations.

Some argue that in developing, we will innovate our way out of the challenges that environmental destruction, climate change and pollution will offer. It is quite foolhardy to assume so.

Even though we may learn to live through floods, storms, extreme temperatures and droughts, at what cost will we adapt to human-centered, human-caused changes? And who exactly will be capable of adapting? The answers are clear: only those at the top of the food chain will be able to adapt as we have seen that poorer societies live with majority of the environmental impacts which they do not contribute to.

Also, the costs of adaptation, some of which are diseases, do not render it adaptation at all. There are other moral, spiritual, philosophical and cultural reasons why people advocate against the destruction of the environment but the simplest, most general reason is that we are tampering with our very own chance of survival as humans in the world as we know it today.

In the end, Nigeria’s size in people or gross GDP will not be sufficient for her to retain the title of ‘Giant of Africa’. Right now, she is dangling from the thin rope that separates giant from ‘agbaya’ . If Nigeria does not develop in a sustainable manner, she would be just as much a failure as if she did not develop at all.