Thursday, April 29, 2010

On State Creation and Constitution Review

The strongest hint that new states will created before 2011 elections were today dropped by the Deputy Senate President, Usman Nafada.

According to the Deputy Senate President, the National Assembly intends to create 10 additional states as part of the ongoing constitution review. In his words, “The creation of new states is not as rigorous as the amendment of the constitution. The Governors Forum and many powerful interest groups have been inundating us with this demand”. Whilst he refused to confirm the actual proposed number of states, Mr Nafada confirmed that “there is no running from the fact that new states would be created next year”.

The debate on whether new states should be created has been ongoing for quite a while. Many interest groups have made representation to the National Assembly on the need for state creation. However, the civil society is yet to see a “business case” on the economic viability of these proposed states. The process of state creation might not be rigorous, just as the Deputy Senate President pointed out, however, common sense dictates that the rationale for state creation should transcend any procedural rigour. It’s the height of irresponsibility to create a state just because it’s easy to do so, without due consideration of its economic and social implications. I find it quite ridiculous that the National Assembly will just support state creation just because some kleptomaniacs called state governors sees it fit?

The need for additional states should be guided by key fundamental principles. The business case needs to compelling both economically and socially. Are the proposed states economically viable? Also, what has been the economic performance of existing states in terms of internal generated revenue?

To date , there’s no evidence in Nigeria to suggest any correlation between state creation and economic/infrastructure/human capital development. The only evidence available is that of increased looting of the nation’s treasury. With additional states, that means more Governors, Commissioners, Special Advisers, Permanent Secretaries, all feeding fat on the government.

Already, the nation is struggling with an over-bloated democratic structure and bureaucracy. The last time I checked, it was costing the nation N1.1trillion in salaries and allowances to maintain public office holders at all three tiers of government.

According to a 2008 report by Central Bank of Nigeria (CBN), the state with the highest internal generated revenue is Lagos with N139.2 billion, followed in distant second by Sokoto with N34.8billion . In terms of revenue, the IGR by 36 states and FCTA was N441.1 billion representing 1.8 per cent of national gross domestic product (GDP) or total output of goods and services amounting N24 trillion at current basic prices. Fast forward to 2010, it’s unlikely that there would have been much difference.

Minority ethnic groups see state creation as a way of addressing the inequality and injustice in the system. To date I can’t see any evidence to back such claim. For example, will creation of additional states prevent the last ethnic/religious crisis in Jos? Or will it have prevented the Ijaws/Itsekiris from hacking themselves to the death in the 90’s? What about the tribal clashes between the communities of Ife and Modakeke? It really begs the question of how many states we can practically create to appease everyone in a multi-ethnic society as ours. I will assume, we may need to create at least 14o states!

We also have political opportunists who see state creation as an opportunity for easy and quick access to the national cake. Since allocation of political appointment is bereft of any merit-selection process, but instead based on the nonsensical federal character principle, it means the political elites are a step closer to the dining table of the national treasury.

I anxiously look forward to the day when our (s)elected leaders will begin to get their priorities right. The Deputy Senate President from his comments has further confirmed the widely held belief that our political elites are VERY detached from the modern day realities of the average Nigerian. If I may ask, how will creation of new states alleviate the growing unemployment, which at the last count was grossly underestimated as 40%? How will state creation put food on the table of 70% of Nigerians who barely survive on $1 per day? How will creation of additional states ensure probity and accountability? How will it discourage state governments continuous dependency on monthly revenue allocation from the federal government?

For me, the most important amendment that can be made to the Nigerian Constitution is the correction of our pseudo-federalism cum unitary system of government. I even consider this to be more important than any electoral reform. Even if we succeed in having an electoral reform that guarantees free and fair election, that wouldn’t take away anything from the fact that our governance system has failed. Can anything good come out of a failed system?

Honourable members of the national assembly should focus on issues that will help build democratic institutions that will outlast political generations. We run a system of government that grants absolute power to the Executive. We say we are a federation but all powers of the federating units have been usurped by the Federal Government. We claim to be a democracy, yet some states are governed by ‘theocracy’.

What we need is a constitution that will entrench ‘true federalism’ and not creation of “mickey mouse” states or glorified local government.We need legislation that will promote accountability and transparency at all levels of government and not just provide unfettered access to the national treasury

Friday, April 23, 2010

BBC Welcome To Lagos Video - Part 2

Wednesday, April 21, 2010

An Open Letter to Honourable Minister of Aviation - Mrs Fidelia Njeze

Dear Hon Minister,

I want to congratulate you on your recent appointment and assumption of office as the Honorable Minister of Aviation of the Federal Republic of Nigeria.

There is no doubt that having served the country twice as a Minister of State,your elevation as a full minister in a strategic ministry such as Aviation is well deserved and your former experience in those former capacities should come to play in your efficient management of the Aviation Ministry.

Knowing fully well that you have barely less than a year to hold forth as Minister, I would like to use this medium to advise you on areas of quick wins where you can easily excel in the aviation industry particularly with reference to our airports especially the flagship which is MURTALA MOHAMMED INTERNATIONAL AIRPORT which subsequently in this write up would be referred to as MMIA.I am using this airport as a reference because i live in Lagos and i want to believe its the most used airport in Nigeria.

I had an intention of writing this piece earlier when i heard of your nomination and before you would have embarked on physical inspection of our airports but the demand on my time prevented me. But before i could say jack,i saw video clips of your visit to the MMIA,Lagos.

As with other visits by past aviation ministers,I am not sure the retinue of eye service civil servants who followed you on that trip and particularly those who took you round the airport showed you the key areas of concern which i would mention shortly.


It may interest you to know that the present state of this toilet is awful,highly embarrassing and a disgrace to an international airport of the status of MMIA.This was also the case at Calabar airport when i had to borrow a phone with a torch from a fellow passenger in order to use the popular Calabar airports departure halls toilet.Please kind direct whoever is in charge to quickly make sure all the available toilets have functional water closet system with water running 24 hours daily, with the skilled cleaning personnel on ground to make the toilets usable.Also adequate supply of toiletries like tissues,liquid hand wash and hand dryer should be made available at all times.I have know doubt that you are well traveled and must have had cause to use the restrooms in those airports you might have had cause to travel through,you will bare me witness that one could be tempted to even eat in those toilets due to the state of their cleanliness.Provision of bathrooms too might not be a luxury.


It may interest you to know that this is barely audible as a potential passenger might have to strain his or her ear in order to hear his or her boarding/arrival announcement.Kindly ensure the PA system of the entire airport is replaced so that one can from a distance hear clearly any announcement made on the PA from any of the interior part of the airport.


I guess you might not have noticed this since you most likely use the VIP lounge of the airport whenever you have cause to travel out of the country.Each time i arrive this country,i always end up sweating like a xmas goat because of the non availability of functional AC system.Kindly ensure that the replacement or renovation of the AC system in the above mentioned and other affected areas in the airports in Nigeria are given to competent hands to manage.


Kindly ensure the provision of more seats in the departure hall as passengers and their genuine relatives have to stand up and of course Nigerai airport is the only airport i have seen in the few places that i have traveled to where relatives or anyone accompaning you is barred from entering the departure hall.


Another area of quick win you might have to work on is in the area of excellent customer service by your various airport personnel.Most of the time,these category of staff are busy looking for one form of gratification or the other instead of carrying out their jobs.An example is the Abdulmutallab case in which non of the personnel on duty could even detect the circumstances surrounding the young boy e.g. no luggage,place and urgency of purchase of ticket,lack of proper security screening as most times security personnel are praising you in order to get some cash from you.All staff at the airports must be trained and retrained on how to provide excellent customer service for passengers and visitors to the airports.A clear example of this is available at Heathtrow T5,UK and Singapore International airports where you staff on ground who are in charge of customer service.

The level of service provided by the various airlines in Nigeria is different from what is available in their different home countries.For example,the quality of service provided by Emirates Airline or British Airways in Nigeria is quite different from what obtains in U.A.E or the United Kingdom.The way customers are treated with impunity calls for concern.Right from ticket purchase,information dissemination and boarding,service to customers is quite poor and most Nigerians are treated in dehumanizing ways that calls for questioning .Please hold a meeting with these airlines telling them to henceforth treat Nigerians well or forget their business in Nigeria.Please also equip your Customer protection unit at the various airports to be able to defend the rights of travelers.A recent example was the case of a first class passenger on a South African Airways flight who was asked to vacate his seat for a white passenger who mustt ravel with his fellow colleagues.He eventually had to leave the said flight in anger after suffering humiliation right on the soil of Nigeria.I heard they have apologized but the deed had already been done and several of this type of cases still abound on a daily basis.


Surfacing/tarring of roads in the car park and provision of functional toilets too are required.


A ready way of not doing all i have mentioned above is for advisers and staff to say there is no fund available or that it was not budgeted for.i would like to advise that you look into the amount of money generated at the Lagos airport toll gate and car park.This amount of money if properly monitored and accounted for would be able to solve most of the problems mentioned above.Please ensure the amount of internally generated fund at the various airports in Nigeria are properly accounted for.

If the MMIA could be this bad,i am afraid of the status of other airports in the country. I'm available for clarification on my email:


Oladapo Kolawole
Lagos, Nigeria

Tuesday, April 20, 2010

Q & A with Obiageli 'Oby' Ezekwesili - Understanding the Workings of The Nigerian Government

Q & A with Obiageli 'Oby' Ezekwesili - Understanding the Workings of The Nigerian Government (By Beer Parlour Activists for Nigeria)

Are there auditors attached to each ministry to ensure that contracts are expeditiously executed? If so are these auditors independent? If not do you feel that they should be completely independent?

Ernest Aziagba, London

Every Ministry, Department and Agency (MDA) has an internal audit department with a responsibility to assist management ensure that all financial transactions are carried out inaccordance with government laid down financial rules and regulation. The internal audit department reports to the permanent secretary who is the accounting officer for any ministry. Their role is given oversight by the office of the auditor general of the federation-which is statutorily established by the constitution to be an independent body that reports to the public accounts committee of the national assembly.……………………………………………………………………………………………………………………………………………

There are some ministries like Agriculture, Water Resources, commerce and industry etcthat seems to be there for no reason. Is there a reason for these ministries? What are their functions?

Ernest Aziagba, London

For any African country, ministries of agriculture and water resources are important and should exist in any developing country. Food security is sine qua non for Africa and it is through a well-managed agriculture sector that this can be realized. For although a predominantly private sector led activity, it requires significant provision of public good whichonly government through such a ministry can offer. You must understand that with agriculture employing more than 80% of the rural populace and the rural populace being more than 70% of Nigeria’s population, the two ministries must be regarded as key players for any effective poverty reduction agenda in Nigeria.The water ministry is particularly important not just for its water infrastructure that contributes to agriculture but also in their role as facilitator /provider of a basic service that has health implications. The latter role is particularly important for attaining the health MDGs. The problem however is often a lack of capacity of the leadership of these ministries to respectively understand and effectively deliver on their important mandates. The former on enabling access to water both as a social and economic service and the latter onagriculture production and productivity through appropriate polices, investments and institutions.…………………………………………………………………………………………………………………………………

Are statistical figures kept and maintained in any of these ministries?

Ernest Aziagba, London

Each ministry had a department called “planning research and statistics. Regrettably, it wasconverted into the department in charge of contract activities and that completely dwarfedthe incentive of officials that worked in those departments for important work of planning, research and statistical capacity building. I was so vexed about the condition of those departments in the two ministries that I headed and had them scrapped, moved out thecontracting role from them and reinvented them completely with core mandates of policyformulation, planning and evaluation. I also had to change the skill sets and competencies of public officials in those departments in my then two ministries.My focus on having the fundamental structure and organization of each of the ministries i ledreflect their core mandate and mission meant that such reform was sine qua non and so despite the resistance, I had it done. It was not popular with the then head of service but Ihad the backing of the president who saw the move as a model for the entire civil service and recommended it should be part of the public service reform agenda. The rest as they say is history!……………………………………………………………………………………………………………………………………………

Are there criteria for anyone receiving a contract from a federal ministry? If so what are they?

Ernest Aziagba, London

Yes. There existed some rules even before the “due process” reform that i championed. It was however a broken down set of financial guidelines that were only complied with in thebreach. For example, the rules governing “exceptional circumstances in contracting” had become the rules for ALL circumstances and so the nation became a victim of poorgovernance of public resources with no consequences for such flagrant violation of financialrules in the public sector.As one of the co-founders of transparency international globally, i had taken serious research interest in how the syndrome of leaking public treasury in most of Africa was the primary reason for ease and pervasiveness of public sector corruption. Other than the public sector salaries and administrative costs, the most critical activity that the treasury funds is capital expenditure through procurement of government works, goods and service, i concluded that if any country wants to govern its public resources effectively, it needed to establish the right systems, processes, procedures, structures and institutions for handling its public procurement.I was therefore glad to return home from the Kennedy school of government, Harvard University to serve in the government with a singularity of purpose. My sole mission was to work to plug the holes that haemorrhaged our public treasury over several decades. The paradox of being a country that had earned hundreds of billions of dollars in oil export andyet had such pernicious poverty indicators as a result of mismanagement and corruption hadbeen a source of deep anger within me over the years that i was both in the private sectorand doubled also as an activist in civil society. Infact, when Nigeria first requested for debt relief, it was mainly rejected by creditors because of its legendary record for poormanagement of its public treasury as evidenced in widely known contract inflation, poorly -delivered -or -not –at- all -delivered - but fully- paid -for -public -contracts, award of contracts for patronage etc.With the strong support of the then president, i worked with him at the state houseInitially through the office his principal secretary to set up the budget monitoring and price intelligence unit (BMPIU also known as the due process unit). So, i led the work to reform the truly archaic and leaking arrangement for public contracting at the federal level. The BMPIU under my leadership with an incredible team of professionals went on to define new standards and rules of the game for the award of public contracts. Those standards and rules became the 2002 Nigeria treasury circular issued by the office of the accountant general of the federation which has the constitutional mandate to issue financial guidelines on thetreasury. It is crucial to note that the BMPIU was not responsible for the process of contract award. It was the responsibility of MDAs to follow the process and award their contracts. The unit’s role was to review the process and outcome for compliance and to publish and provideits findings to the participants in the process and the cabinet. By monitoring theimplementation of the federal contracting process to ensure compliance with the due process rules of the contracting activities, the BMPIU saved the nation over $2billion dollars in contract over-pricing that would have been assumed had the inflated cost been allowed as was the case in the past, recommended overturning of awards of contracts to wrong winners in any process that negated the transparency, fairness and competition rules that MDAs were supposed to comply with, greater transparency in public contracts when it caused the opening up to the public the contracting program of the federal government throughcollaboration with the ministry of information to launch the public tenders journal, a publication that advertises all federal government contracts above the N50million threshold. One element we began to implement shortly before i was reassigned was the involvement of civil society contract watch groups in monitoring the contracting process across the MDAs.

Finally, during my leadership of the BMPIU, we worked on and submitted the bureau for public procurement bill which upon passage by the national assembly led to the establishment of the bureau for public procurement which is now headed by a director general. Below, I have an extract on the BMPIU as was published on the nigeria first website to provide you more information on the early beginnings.

“The present Administration is determined to offset the widespread notion that Nigeria is a corrupt nation, and to overcome the practice of embarking on development projects that arenot properly monitored. For this reason it has set up the Budget Monitoring and PriceIntelligence Unit (BMPIU, also known as the Due Process Office.The BMPIU was formally established under the Office of the Principal Secretary to thePresident in June 2003. It is run as an operationally independent body under the leadership of the Senior Special Assistant to the President on the Unit, Mrs. Obiageli Ezekwesili. Its staff comprises experts with a bias for project management, construction and procurement.The Unit was designed to act as the clearing-house for all Government contracts and procurement of goods and services, and functions under three major strategies:

Goal, Objectives and implementation.

Goal of BMPIU.

The goal of BMPIU is to ensure full compliance with laid down guidelines and procedures for the procurement of capital and minor capital projects as well as associated goods and services.

Objectives of BMPIU

The objectives of BMPIU are:

1. To harmonize existing government policies/practices and update same on publicprocurement
2. To determine whether or not Due Process has been observed in the procurement of services and contracts
3. To introduce more honesty, accountability and transparency into the procurement process
4. To establish and update pricing standards and benchmarks for all supplies to Government
5. To monitor the implementation of projects during execution with a view to providinginformation on performance, output and compliance with specifications and targets 6. To ensure that only projects which have been budgeted for are admitted for execution.

Implementation Strategies.

The BMPIU operates under the following guidelines: Regulatory Functions, CertificationFunctions, Monitoring Functions and Training and Advisory Functions.

A. Regulatory Functions
1. To regulate and set standards, including the enforcement of harmonized bidding and tender documents
2. To formulate the general policies and guidelines related to public sector procurement
3. To develop, update and maintain a related system wide database and technology
4. To undertake procurement research and survey in order to determine information needs and project costing
5. To enforce professional ethics and sanction erring officers and professionals

B. Certification Functions
The Unit will certify all federal-wide procurements under the following guidelines:
1. Resident Due Process Team Certification for projects below N50million
2. Full Due Process Certification for projects above N50million at various stages such as “contract award certificate” and “payment certificate”.

C. Monitoring Functions
1. To supervise the implementation of established procurement policies
2. To monitor the prices of tendered items
3. To perform procurement audits
4. To undertake the monitoring of capital projects that have exceeded 50% of contract sumbefore release of further funds
5. To document all projects at award and completion stages, and publish same in designated journals

D. Training and Advisory Functions
1. To co-ordinate relevant training programs so as to build institutional capacity
2. To embark on regular public enlightenment programs so as to sensitize various stakeholders involved in procurement
3. To interact with Government and parastatal officials, National Assembly members, consultants and relevant professional bodies so as to educate them on all aspects of the work of BMPIU.

Organization of Due Process Certification
The Nigeria Treasury Circular of 5 July 2002, “Guidelines for Implementation of Due Process Certification of Contract”, provides a plan for the implementation of the Capital Budget.
Major sections of the Circular include:

A. Approval of Contracts
1. Contracts below N1.0million- The Permanent Secretary/Chief Executive of parastatals shall approve these.
2. Contracts over N1.0million but below N50.0 million - A Resident Due Process Team (RDPT) shall approve these.
3. Contracts above N50.0million -These shall be processed in accordance with Government guidelines and approved by the Ministerial Tender Board before being forwarded to BMPIU to obtain a Due Process Certificate. When certification is obtained from BMPIU, the project would be forwarded to Federal Executive Council for approval before an award can be made.
4. Due Process Review ProcedureThe procedures for Due Process Review are as follows:
a. Requirements for Due Process Review
 i. The Project Policy file
ii. Tender Returns
iii. Tender Evaluation Reportiv. Contract Award Letter and Agreement
v. Original Contract Bills of Quantities (if any)
vi. Contract Drawings (if any)
vii. Other Contract Documents
viii. Financial Summary and Statementsix. Progress Reports
x. Variation Requests and Variation Orders arising
xi. Interim Valuation and Certificates

b. Preliminary Discussion (BMPIU and Beneficiary Ministries)
There may be a need to schedule meetings between BMPIU and beneficiary ministries/parastatals to clear issues connected with the report for certification. Such meetings may take place at pre-review and during the review exercise. BMPIU may call for additional information from the ministries to facilitate the issuance of certification.

c. Preparation of Draft Report The Due Process Certification will require an assessment to ensure that:
i. The appropriation is available for the funding requirements of the project upon award
ii. The contract awarded by the spending unit/ministry shows that the process complies with open competitive bid standards and that the cost is comparable with national, regional andinternational standards.

d. Transmission of Draft Report
The Draft Report from BMPIU shall be transmitted to the beneficiary confirming certification. If certification is not granted, attention of the beneficiaries is drawn to the findings andrecommendations in the report.

e. Organization of “Right of Reply” Meeting
For a project where certification is denied, BMPIU has made provisions for a “Right of Reply” meeting aimed at clarifying issues leading to the denial of certification. Such a meeting may either lead to reconciling differences or confirming the position of BMPIU.

f. Final ReportThe outcome of a “Right of Reply” meeting will assist in fine-tuning the report and facilitatingthe issuance of a final report.g. Granting or Denying Due Process Certification.

The final report may either lead to the project being granted certification or being deniedcertification. Whatever the outcome, it will be transmitted to the beneficiaries.The granting of certification may lead to the project being recommended for approval by the Federal Executive Council. In cases where projects are denied certification, the beneficiariesmay be advised to repackage the project for fresh procurement.

In general, the following suggestions should be adhered to for the successful implementation of Due Process policies:
1. Ministries/parastatals should not embark on new projects when there is a problem offunding existing ones
2. Efforts should be made to stock-take the capital project portfolio of all ministries
3. Procurement planning should be carried out
4. Project feasibility and design should be completed before embarking on procurement andaward
5. Technically competent and integrity conscious officials in the ministry should be identifiedand assigned procurement planning
6. Only projects for which funds are appropriated or available should be forward to BMPIU for Due Process Certification
7. Unadvertised projects will not be accepted by the Unit for review
8. No selective tendering arrangements qualify for Due Process Review
9. Only the Ministry of Defence has a special procurement arrangement
10. A focal point or anchorperson in each ministry should function as the liaison between the BMPIU and the ministry.

The BMPIU expects extensive support for the policy of Due Process Certification. With such support, Due Process will ensure that the present Administration is able to put Nigeria’s natural and human resources to good use through efficient planning, proper management, and fraud-free governance.
© Copyright 2006

Shouldn’t it be mandatory for all contractors to have an insurance policy on the contractbefore they are given a contract to execute?

Ernest Aziagba, London

Of course, as part of the provisions of the BPP Act and also originally under the due processguideline, every contractor submits a performance bond as part of the requirements forprequalification to bid for public contracts. ……………………………………………………………………………………………………………………………………………Do ministries work hand in hand with the National Bureau of Statistics? If so how?

Ernest Aziagba, London

They should ordinarily work hand in hand but as i stated earlier, the incentives in the public service over the many decades of anomie in our country became warped. Rather than prioritize those important issues of policy formulation, research, planning, evaluation and statistical capability, most of the effort of both the political leadership and the public servants are directed to transaction activities like contracts, travels, banking and financial services and such other mundane and asinine activities.Please read my speech to the Anambra civil servants last December on this subject. You willfind it as a note on my Facebook page.The economic team which i belonged to, during our time in government sought and secured the support of the World Bank to reform the statistical function in the Federal Government,leading to the reorganization of the Federal office of statistics which used to be with the ministry of national planning. It became the national bureau of statistics and received a fresh mandate under the leadership of a competent statistician and academic with a team of equally capable hands. The World Bank and other donors continue to support their capacity building agenda which includes strengthening the statistical capacity of line ministries and departments.


What is effect/purpose of a supplementarybudget to Nigerians, when the actual one is hardly utilized?

Eyitayo Anshewo

When sparingly utilized as the instrument for addressing emergent spending needs, thesupplementary budget can be a good instrument that allows for the necessary flexibility to adapt to changes in circumstance (e.g. the impact of the food crisis or the financial crisis lastyear).Every country’s budget is the most important policy tool for driving economic and social development. However, the dialogue needed for it is always through a political process of consensus building for agreement of the priorities that a budget will fund. Regrettably, thescale tilts overwhelmingly in favour of political considerations to the detriment of important economic considerations that enable effectiveness of public investment in those priorities that will generate growth and result in poverty reduction. One way that citizens of other nations have worked to influence the right balance has been to advocate the involvement of the civil society and the private sector in the budget process at every stage- both in preparation, implementation, monitoring and evaluation stages with theexecutive branch and in the parliamentary debates before appropriation by the legislature. Those of you on Facebook can form a federal government or any state government or even local government, budget watch groups

How does the Nigerian Govt keep track of Budget allocation for the States? That is, what mechanism is in place to monitor how the funds are used and how are the Governors held accountable?

Arotuore Odiri, USA

As a federation, the constitution is founded on the principle of fiscal federalism- meaning that the federal government, the thirty six state governments including the federal capital territory and the 741 local governments are all autonomous fiscal entities. Therefore, itprecludes the federal government from dictating to the states and local governments how to conduct their fiscal activities. That responsibility belongs to the legislatures of each state orlocal government and of course their indigenes and residents. Whenever citizens are mobilized to demand for accountability , we have found that to be even more effective than the merely having the supply side governance solutions that put the premium on establishingmore and more agencies to fight corruption without the involvement of the citizens andsociety at large.One of the reforms that the economic team embarked on was the fiscal responsibility bill that led to the fiscal responsibility act and the commission that has been established to implement the act. Through it, the three levels of government are bound to clauses that form a set of fiscal rules and conduct for spending public resources and for borrowing and such like. The act actually has provisions for prosecution of public officials whose conduct or decision violate any of the sanctionable provisions.

What branch of Govt, with regard to the electoral commission, is in charge of vetting the health of presidential candidates? I ask this because I am curious as to how then candidateYar'Adua was allowed to run for President despite his health problems which have now come to light.

Arotuore Odiri, USA

Frankly, I have no insight on this. I know however that for ministerial position, we were required to submit our medical records as part of the vetting process.……………………………………………………………………………………………………………………………………………

Can you please explain or shed light on how' Federal' funds are distributed and how a state like Kaduna can be defined as an oil producing state because it has a refinery?

Lolu Akingbe, Nigeria


2010 Oil revenue sharing formula
Year Federal State*Local Special Projects Derivation Formula**
1958 40% 60% 0% 0% 50%
1968 80% 20% 0% 0% 10%
1977 75% 22% 3% 0% 10%
1982 55% 32.5% 10% 2.5% 10%
1989 50% 24% 15% 11% 10%
1995 48.5% 24% 20% 7.5% 13%
2001 48.5% 24% 20% 7.5% 13%
* State allocations are based on 5 criteria: equality (equal shares per state), population, social development, land mass, and revenue generation.
**The derivation formula refers to the percentage of the revenue oil producing states retain from taxes on oil and other natural resources produced in the state. World Bank Report.

I have below an extract on the commission.


In a federal system, there are different levels of government, each with its own set ofconstitutional responsibilities.Because the corresponding expenditure obligations are often different from the allocation of tax, powers and revenue sources, a system of revenueallocation is required as a mechanism for redressing the consequent mismatch betweenexpenditure, obligations and revenue sources. The overall objective of such a system or revenue allocation would be to enhance economic development while simultaneously minimizing intergovernmental conflicts.

The granting of internal autonomy to the regions under the Richards Constitution of 1946 andthe subsequent sharing of responsibilities between the federal and regional governments provided the starting point for what has continued to be a persistent and often controversial national debate on revenue allocation. The need for new searchlight on revenue enhancement and mobilization, overtime and space, also provides another sound justification for theestablishment of a permanent commission.In the course of time and in view of policy instruments for the achievement of national objectives, there were periodic reviews, on ad hoc basis, on the fiscal jurisdiction of the varioustiers of governments and the assignment of revenue allocation. These reviews were carriedout by eight ad hoc revenue allocation commissions, viz: Philipson Commission (1946), Chick’s Commission (1953), Raisman Commission (1958), Binns Commission (1964), Dina commission(1966), Aboyade Committee (1977), and Okigbo Commission (1980).

All these Commissions, excluding the Aboyade and Okigbo Commissions, were able to ensure the establishment of region/state government autonomy over certain revenue sources (e.g. personal income tax) and the establishment of federal government’s exclusive control of some revenue sources (e.g.Armed forces income tax). Also, they were able to ensure the creation of a Distributable Pool Account into which other revenue (including import & export taxes, mining rents and royalties, etc) were paid and which was subsequently distributed between the federal andregional/state governments and the development of revenue allocation principles, such asderivation, population, even development, etc on the basis of which fund in the Distributable Pool Account were shared among regions/states.

The Aboyade and Okigbo Commission on the other hand fine-tuned the works of the previous Commissions toward equitable justification.The government of General Ibrahim B. Babangida, guided by the desire to depart from thenarrow and transient objective of devising populist revenue sharing formulae, inaugurated the then National Revenue Mobilization Allocation and Fiscal Commission, on September 6th, 1988, which was statutorily established by Decree No 49 of 1989.

Equally, the 1999Constitution Section 153-subsection (1) provides for the establishment of the RevenueMobilization Allocation and Fiscal Commission. President Olusegun Obasanjo inaugurated thenew Commission on September 20th, 1999 with 37 Commissioners representing each State andAbuja.The establishment of a permanent body, going by the issue in Nigeria’s fiscal finance which have generated heated public debate, which intensity has been a manifestation of the complexity of the issues involved, and the demand by Nigerians for an equitable revenuesharing formula, is invariably a novel attempt by Government towards ensuring prudent,efficient and stable revenue sharing formula and fiscal policy for the nation.


Why do ministers not resign when confronted with circumstances that handicap them orimpede their ability to perform?

Temitayo Fabunmi, London

This is a matter of individual choice. Everyone has the power to determine their threshold of tolerance of such circumstances. In some way, you could determine those thresholds based on track records of ministers and their motives for accepting public responsibility in the first instance. For me, being in government was infact a cost and not a benefit and so i was absolutely unwilling to compromise my value construct and proposition which were to push the boundaries of good governance and results in every aspect of my assignments. I was well known for my extremely independent views on good governance within the government and yet i mostly always received the strong support of the then president in handling my responsibilities. There were one or two instances where i had to firmly demand the resolution of issues on grounds of principles, views, issues or decisions that i was unwilling to negotiate away and once that was done in the public interest, i held my peace. It is important to note though that not every resignation is necessarily motivated by altruism.……………………………………………………………………………………………………………………………………………

As a product of a Federal Government College, I am interested in knowing why the Ministry of Education did not stem the rot which has pervaded the system of unity schools, and which in turn has created a vacuum in the Education Sector that is being filled in an unstructured manner by private schools.

Temitayo Fabunmi, London

The incentive to stem the rot as you rightly called it was absent and there were no consequences for anyone that led the ministry over the many decades of the failure of theeducation sector and system for failing to address it. I however dared to take on both the rot and the predatory vested interests within and outside the ministry who benefitted from itthat wished the status quo to remain. By commencing the reform of the governance and financing of the unity schools to institute the culture of accountability, I stirred the hornets’nest and they fought back by blatantly lying to the public that the reform was meant to “sell” unity schools to the private sector! Some of the members of the public were gullible enough to fall for the lies but many more (including the unity school alumni associations) got the message of the reform but i was already on my way out of government at that time. Since the story of the problems i saw in the sector is a very long one, i will attach the power point of the education sector reform to this note so you can read in details the depth of the rot in the education sector at the time i was deployed to the ministry.………………………………………………………………………………………………………………………………………

To the best of my knowledge, a national curriculum for the early stages of education (primary and secondary) does not exist in Nigeria, or is not generally available to parentsand students. I would like to know why this is the case and what measures the Ministry of Education took towards establishing one (if it was not in existence) and more importantly, enforcing the adoption of this curriculum?

Temitayo Fabunmi, London

This is not correct. We do have national curriculum for every level of education. The responsibility for this is with the education research and development council which is a parastatal of the federal ministry of education. At the time i was minister, we were re-working comprehensively to revamp the curricular for basic education (primary and juniorsecondary levels) and secondary education in order to bring them up to speed with thedemands of the new (global) economy and the ICT revolution and to address the moral decadence in our society by bringing back moral instructions and civics. Please visit thewebsite of the ministry of education which we set up and made an important tool for publicparticipation in the reform agenda when i was there for more information on curriculum development.……………………………………………………………………………………………………………………………………………

Quite apart from the Public Accounts Committee, what is your opinion regarding the setting up or maintaining an internal audit (IA) function within your Ministry specifically with a brief to monitoring and reporting on financial compliance and propriety within your ministry; particularly where such IA unit would report directly to you? If you think this is an appropriate idea, why was it not implemented when you were a Minister.

Temitayo Fabunmi, London

According to our constitution, the permanent secretary is the chief accounting officer of every ministry and so she/he and the directors have the responsibility to ensure that the financial activities of their ministry are being conducted according to the relevant civil service guideline. The role of the minister as I have always maintained is to be the visionary, the leader of strategy and policy for the sector that the ministry exists to govern. The IAD is the link through which the minister can periodically know how well the financial system of theministry is functioning.Being a chartered accountant by training, i did always reiterate the importance of the role of the IAD to the ministry leadership team. Periodically the IAD is required to issue a report ofstate of financial activities in any ministry or department. I recall meeting to discuss one such report in education and immediately instructing the permanent secretary and the directors to ensure full management response to findings of the audit process and to launch a work planfor remediation of systemic weaknesses revealed through the process. This is no differentfrom what happens in the private sector where the external auditors provide their findings to both the management and the board of any company they audit. My previous responsibility for FGN procurement reform made me aware of the limitations and weaknesses of financialadministration in the ministries and departments and the education ministry was no different in the broken state of its financial system. Thus, one of the areas of our reform was to rebuildthe physical and human infrastructure of our finance and administration department,including the role of the IAD. The first step was contracting one of the leading audit firms todo a systems review and to commence implementation of their findings. This was supposed to continue at the time i left for my current assignment.……………………………………………………………………………………………………………………………………………

In your honest and personal opinion; to what extent is the Federal Character Requirement a nuisance [or brilliant idea] in the working of the Nigerian Govt? Given that it appears to bemore important to maintain this Federal Character in Ministerial appointments as opposed to a straight forward 'best man for the job' approach, do you think Nigeria has been able to harness its best talents in spite of this requirement?

Feyi Fawehinmi, London

In very diverse countries, societies, communities or even firms, it is always important to bemindful of the need for diversity and inclusion in order not to marginalize some segments of the population or community- hence you have affirmative action principles like the Nigerian federal character requirement. Not a bad idea but its implementation can be. The problemoften is where inclusion rules are misinterpreted during implementation to mean thecompromise of critical parameters that will safeguard quality and standards like competency, capacity and character in the recruitment processes.…………………………………………………………………………………………………………………………………………….

Under your watch, Nigeria transitioned from the 6-3-3-4 system of education to the 9-3-4 system of education. What was the rationale for this considering the investment put into the 6-3-3-4 system? Do you think that the new 9-3-4 system can support Nigeria's manufacturing sector goals where the 6-3-3-4 system failed as a result of the policy-implementation gap? If yes, why and can you point to studies that back up the success projections of the 9-3-4 system?

Debo Adetula, New York

Good question! With the turn of the new millennium and the more complex national and global environment in which citizens function, simply having six years of primary education is both cognitively and socially considered no longer adequate as a minimum level of certifiable learning in any society. All nations have recognized this and changed accordingly to raise theirminimum certification of learning to enable citizens’ function well as cognitive, social andeconomic actors up to a minimum of nine years of uninterrupted learning. The first schoolleaving certificate which was our minimum for many decades had outlived its “sell-by-date”and was therefore scrapped and replaced with the basic school leaving certificate to be issued only after six years of primary plus uninterruptedly three years of junior secondary education. …………………………………………………………………………………………………………………………………………….

Why has it always been difficult for the Nigerian civil service to attract the best brains from the private sector? Why is recruitment at the top hierarchy of the civil service not open to technocrats outside the civil service? I noted that most, if not all the PermanentSecretaries/Director-General of MDGs (with the exception of Steve Orasanye and a fewothers) are civil servants who have been promoted through the ranks. Whilst this in itself is not bad, it stops short of promoting innovation.

Seyi Osiyemi, Australia

The recruitment is open to all but only at the entry level since the promotion to higher levels happens only through in-service processes. The problem is really one of incentives andprofessional satisfaction. Many of today’s best brains would rather work in environments that value their skills set, support their self-actualization and adequately price their worth. Inmost of Africa, this is more often found within the private sector rather than the publicsector. But even more important for those we call technocrats is the job satisfaction theyderive in knowing that they will have the right conditions to work, innovate, perform and when they excel to be recognized and rewarded without any recourse to political intrigues. The public service reform had this on the top of its agenda during our time in government but I have no sense of where it stands at the moment.…………………………………………………………………………………………………………………………………………….

Why do government ministers become inaccessible to people who knew them before theywere appointed and why is it that most cannot be reached on the phone by the very peoplewho they are supposed to be working for even if it is just a text only number? Funny enough they seem to only reappear in the public spectrum after they leave government. Is this something that can be attributed to the pressures of office?

Anthony Kuti, Nigeria

This is part of the lasting vestige of the many decades of military rule in our country. Public office is shrouded in a dysfunctional aura of mystery and secrecy that prevent accountability of public officials to the society.But please do not generalize. There were a couple of us in the administration i served in who were very much in tune with the need of the citizens to have access to their public officials through emails, telephone or town hall meetings. I used all of those methods. However one very systematic and structured way i applied in changing the institutional tendency to beinaccessible was to involve civil society in my four areas of responsibility during my six and a half years in government. Whether it was in the due process unit, the Nigeria Extractive Industries Transparency Initiative (NEITI), the ministry of solid minerals and the ministry of education, all our reforms had the participation of civil society groups. I was only this week reading a guardian news report of the Community Accountability and Transparency Initiative(CATI) which we established with NGOs when I was minister of education. I have below the extract of the article. By the way, i still receive emails from both school children and university students all over the country who were provided my email address as their ministers much as i still receive letters or emails from citizens that interacted with me in the other capacities i served. A systems approach to changing such orientation is through the passage of a freedom of information act and also the president can set the tone by requesting members of his cabinet to periodically report on their interactions with the civil society andthe media.……………………………………………………………………………………………………………………………………………

I believe that the lack of core ideology and principles among politicians is the root cause of our corruption. In developed democracies, we know what Democrats and Republicans stand for, Liberals and Conservatives etc. However in Nigeria, there is no core set of ideological principles among politicians and parties that provide a yardstick/ benchmark for evaluating their approach to governance. Hence politicians do and undo when elected.Nobody knows what PDP stands for or ANPP etc. No one knows if a politician is aprogressive or a conservative. Why is this? Why the lack of core ideology in our political system?

Kingsley Ewetuya, USA

That’s exactly where the citizens hold the ace. You can lead the process of mobilizing the society to demand for the reforms that will usher in issue-based politics in the nation. Who are you waiting for? You are the change we are waiting for! Just go for it!!…………………………………………………………………………………………………………………………………………….

On the issue of energy; that Nigeria with its resources hasn't launched into the alternative energy sector is mind boggling. By being involved in alternative energy solutions, we canwith one bold masterstroke mitigate lack of employment by creating a whole new industry while tackling climate change (since African countries will be disproportionately affected if global warming isn't solved). Why are we putting all our eggs in the crude oil basket?

Kingsley Ewetuya, USA

Africa is energy deficit with the entire generation capacity of all of sub Saharan Africa minusSouth Africa being equivalent to that of Spain! Only one out of every four Africans has access to electricity and the deficit cost the continent 2% of GDP and 40% of productivity. For energy security and economic growth, and viewed within the context of the current pitiful levels of energy access today, nations in Africa will need the entire comprehensive energy mix. As itembraces the imperatives of adaptation to climate change, the combination of fossil energy exploited with the cleanest technology available and renewables like concentrated solar, wind and geothermal will be required to lift the continent out of poverty. All of these would need to be funded with additional resources that many countries cannot afford with theircurrent resource levels and hence the critical role of private sector and donors in financingthe infrastructure gap on the continent. For Africa to move up the no or low carbon growth trajectory toward a green economy but this requires that each country immediately embarks on the sector, policy and investment reforms in the energy sector that are fundamental forchanging the dismal situation.……………………………………………………………………………………………………………………………………………

Yet on the issue of energy, the situation now is that since we do not have refineries at full efficiency, refined crude oil is imported to Nigeria after being drilled on our soil. This refined oil is then sold to as at a premium. This is a penny wise pound foolish strategy. Why can't our refineries be fully privatized yet under governmental oversight? The telecommunications sector is enough proof that it is not the government's strong suit to run businesses.

Kingsley Ewetuya, USA

I REST MY CASE, KINGSLEY!……………………………………………………………………………………………………………………………………………

What purpose does NYSC still serve and is it the most efficient way of serving that purpose?

Ladipo Oye-Somefun, London

It is a victim of the disease known as “mission creep”. It however can be reinvented and modernised to reflect today’s realities in citizens and youth volunteerism and participation in the development process.……………………………………………………………………………………………………………………………………………

In your department, how does government policy get formed, delivered and its effectiveness assessed?

Ladipo Oye-Somefun, London

First drawing from the core mandate and mission of the ministry, you should assess theadequacy of the departmental organizations, structures and staffing competencies. Next is to do a diagnostic of how well the current performance of the ministry mirrors the effectivedelivery of the services required by the citizens by virtue of its mandate. Once the diagnostic point stops underperformance, you must have the courage as a minister to lead your team toward reforms. This would mean an assemblage of the right sets of people for all aspects of the ministry’s mandate to think through policy options, weighting the merits of each optionagainst relevance, cost- benefit, risks and constraints to implementation, sustainability and impact. The process would also identify the internal and external stakeholders needed to build a strong coalition for the policy’s success especially if it would require a legislation tounderpin it. One sad discovery for me in government was how depleted the civil service was of the quality of expertise that could offer the intellectual rigour required for policy analysis, articulation/formulation, implementation, measurement and evaluation. Perhaps, given your interest, you should join the civil service!……………………………………………………………………………………………………………………………………………

How important is the civil service to your ministry, and why?

Ladipo Oye-Somefun, London

It is extremely important but only if the civil servants are competent, honest and capable. They unlike political appointees or elected officials have sustained tenure of office and are the only ones who largely remain in government continuously while political players, whether elected or appointed are subject to constant change. Every developed nation and those other nations like Singapore that have gone ahead of Nigeria all have one thing in common in their journey to greatness- a competent and capable civil service with professionals with character and integrity. Read my note on the civil service that is published on my Facebook page.

Civil society coalition set to monitor budget utilization on basic education
By Rotimi Lawrence Oyekanmi

ONE of the laudable things put in place by former Education Minister, Mrs. Oby Ezekwesili in March, 2007 was the Community Accountability and Transparency Initiative (CATI). Designed by both the Federal Ministry of Education (FME) and the Universal Basic EducationCommission (UBEC) at that time, the initiative was intended to inform Nigerians about how much money the government was spending on the education sector in the various communities. Besides keeping Nigerians informed about the policies and actions of government, the ideawas also to encourage them to be part of the policy design, monitoring and implementation. More importantly, the initiative empowers Nigerians to ask intelligent financial transactionquestions and hold government officials, States Basic Education Boards (SUBEBs), School Management Boards (SMBs), vice chancellors, rectors, and provosts accountable for all funds put in their care for public education purposes. Memories of the launch of CATI in Abuja remain evergreen. The entire audience could not believe their eyes, on that day, when Ezekwesili broke down in tears as the slides of theappalling conditions of public schools across the country were displayed via a projector. Theimages had been collated during the famous Operation Reach All School (ORAS), organised by the FME in 2006.

For instance, some of the slides showed children sitting on the floor to receive lessons, teachers talking to students under trees and overcrowded classrooms. Ezekwesili's emotional voice, which affirmed that corruption had been responsible for most of the miseries that hadbefallen the education sector, elicited murmurings among the crowd. She declared at theoccasion that some highly placed individuals, entrusted with public funds had, over the years, made a habit of siphoning a large part of it into their private pockets. The introduction of CATI, she explained, was to arrest that. Quite intelligently, the FME involved the civil society inthe initiative. Specifically, the Civil Society Action Coalition for Education for All (CSACEFA) was designated to anchor itOn that day too, to the delight of all those who were present, a booklet which contained thedisbursements (for education sector) to all states between July 2005 and July 2006 by theFederal Government were distributed. The sad thing, however, was that immediately Ezekwesili stepped out of office, familiar forces, with their collaborators strangled the CATI and consigned it to the dustbin. All efforts by Mrs. Felicia Onibon, the immediate past coordinator of CSACEFA to resuscitate it proved abortive. Luckily, all hope is not lost. CSACEFA is about to take advantage of the Civil Society EducationFund (CSEF), which will enable it track budgets for basic education. The CSEF is a grant supported by the Education Programme Development Fund (EPDF), of the World Bank's Education for All (EFA) Fast Track Initiative. The Commonwealth Education Fund's 2007 report actually recommended the establishment of the CSEF. The core objective of the CSEF is tosupport national education coalitions to effectively engage governments and donors for theachievements of the EFA goals. The CSEF intervention will tackle the increasing number of out of school children, address the problem of the growing number of illiterate adults amongwomen, tackle misappropriation, and facilitate a proper monitoring mechanism.Part of the funds will be utilized to train the civil society to monitor spending on education. But this will be a very huge task and CSACEFA will not find it easy to achieve its objectives. For instance, stiff opposition should be expected as CSACEFA sets out to examine documents onthe guidelines for the disbursement of funds from SUBEBS and Local Government EducationAuthorities (LGEA); showing expenditure by activities in each of the components of the UBE programme; examine financial and programme reports, as well as documents definingmisuse, misapplication and diversion. Besides, it will not be easy for the civil society to monitor the availability of the states' counterpart funds once the Federal Government's matching grants are released; ensurecompliance with guidelines on fund utilisation and identify the challenges faced by theimplementing bodies in the utilisation of the basic education funds.

Part of the assignment before CSACEFA will also be to monitor the outcomes of fundutilisation in terms of infrastructure (classrooms, laboratories, sanitation facilities); pre-serviceteacher training and professional development, and purchases of instructional materials. At a stakeholders' meeting summoned by CSACEFA in Abuja recently, various suggestions were proffered on how the organisation could go about achieving its objectives. For instance, stakeholders noted that there was the need to ascertain when the SUBEB was established inthe states; what challenges are being faced in the domestication of the UBE Act, and how frequently the various SUBEBs had accessed the UBE fund.

Saturday, April 17, 2010


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Thursday, April 15, 2010

How Goodluck Jonathan Can Fix Electricity (1) - By Ijeoma Nwogwugwu

I have often wondered what it means to declare a “state of emergency” in the power sector. No one has been able to explain what it means. Would it involve the sack of PHCN workers and replacing them with other hands to run and manage our power infrastructure? Would it amount to an astronomical increase in electricity tariffs? Does it mean that private companies given licenses three or four years ago to invest in power stations will be given marching orders to complete them, failing which their licenses will be withdrawn? Or does is simply mean that an accelerated programme will be deployed to expand and upgrade power infrastructure to meet the yearnings of Nigerians? Quite frankly, no one really knows.

Since no clarity has ever been provided by this administration on what its emergency programme for the power sector entails, I can safely dismiss it as a sloganeering campaign devised by this government to give some semblance of seriousness about meeting our power needs. If we must be honest, resolving our power issues is not as difficult as it seems. With the right commitment, a phased approach, and adherence to the power sector reform programme that was given fillip with the enactment of the Electric Power Sector Reform law five years ago (yes, it’s been five year since the law was passed), appreciable results can be achieved.

But before the Acting President and Minister of Power, Goodluck Jonathan, proceeds; first, he must jettison the slogans. They are needless and a distraction from the issues at hand. Instead, a comprehensive programme with clearly defined timelines should be drawn up and specific groups/bodies/organisations given the tasks to meet them.

The programme should be made public so that it can be monitored and the society knows who to hold responsible for falling behind at their assignments.

A guide on how this can achieved is given below. It may not be comprehensive, but it will attempt to capture a lot of the salient issues deterring us from achieving energy sufficiency and how to resolve them.

Electricity Blueprint

In the next week, the power ministry must urgently invite all the stakeholders and groups to a meeting to fashion out a comprehensive blueprint for the power sector. The stakeholders must include PHCN and its distribution, generation and transmission companies, the Bureau of Public Enterprises, Central Bank of Nigeria, Ministries of Finance, Petroleum Resources, Water Resources, Defence and Steel and Solid Minerals Development, the Nigerian Electricity Regulatory Commission, the Nigerian National Petroleum Corporation and its subsidiary Nigerian Gas Company, international oil companies or their representative(s) from the Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry, representatives of independent power producers, representatives of commercial banks, and labour unions.

Already, a committee along those lines has been established. It only needs to be expanded so as not exclude other relevant stakeholders whose input will be required for the blueprint. This committee should within two weeks develop and publish a comprehensive programme (the “Blueprint”) that comprises three phases, takes into cognisance the challenges mitigating against stable electricity supply in the country, and how these can be tackled head on.

At this stage, the information made available by stakeholders such as PHCN and its business units, the oil companies and NNPC on the status of power and gas infrastructure must be accurate or close to accurate. If it is inaccurate, resolving a lot of the issues in the power sector would run into troubled waters from the get-go.

In drawing up the blueprint, its drafters must also adopt a phased approach and include expected deliverables defining who should be held responsible for what. With this, a lot of pressure would be brought to bear on a body/organisation to meet its target(s). Where there are impediments or challenges to delivering its set goal, the government should name, shame and sanction those responsible for dragging us back.

Phase I

The first phase of the power programme requires PHCN to accurately diagnose the state of its infrastructure and identify quick fix solutions to rehabilitate and upgrade systems and equipment that can be integrated into the electricity grid within months. I understand that between PHCN power plants and the IPPs, the nation has the capacity to generate up to 5,000MW of electricity. However, it remains uncertain if the transmission and distribution infrastructure has been reinforced to transmit this much electricity to consumers. Availability of gas in the immediate term also remains an impediment to the attainment of 5,000MW.

Accordingly, the first phase of the blueprint should focus on short term solutions that can be adopted to ensure that natural gas is made available to the Geregu, Afam, Sapale, Olurunsogo and other power stations starved of gas within three to six months. This can be achieved if negotiations are commenced and concluded in a month with NGC and oil companies on the pricing regime for gas. If need be, let gas be benchmarked at the same price the oil companies currently sell natural gas to the Nigerian Liquefied Natural Gas company, which I believe is $1 per million standard cubic feet. That will serve as an incentive to compel them to repair and upgrade their gas infrastructure to make natural gas readily available for electricity generation.

Simultaneously, the power generation companies (gencos) would have to enter into gas purchase agreements with gas suppliers that set the terms for gas delivery and the penalties that would arise if the terms are not met. The gencos would also have to enter into agreements with the transmission and distribution companies on electricity transmission; while distribution companies would have to be prepared to raise electricity tariffs under the multi-year tariff order.

Raising tariffs would ensure that the oil companies and NGC have an incentive to see to the steady supply of gas to the gencos and save the government costly power guarantees. On the part of electricity consumers, it would be cheaper for them to pay more for electricity than to run their homes and businesses on fuel (diesel or petrol) powered by generators.

The input of the Ministry of Defence, NGC and communities where gas pipelines and infrastructure are situated will be very critical to the success of the programme. The ministry would have to deploy soldiers who will work with the communities to set up joint security task forces whose responsibility it will be to secure and safeguard the infrastructure.

Such task forces employing youths to secure the pipelines and infrastructure would come at a cost. Electricity tariffs would therefore have to be structured in a manner that factors this as an added cost – quite similar to the petroleum products cost structure that factors all elements in the fuel supply chain. Meanwhile, the pricing structure for electricity should be superintended by NERC.

NNPC and NGC, which in my opinion are the weakest links in the chain, must evolve a process that ensures that condensates are not allowed to build up in the pipelines conveying gas to the power stations. They must draw up and implement periodic clean up timetables to evacuate the condensates and move it to the refineries. If the refineries have no use of the oil condensates, it should be exported and the proceeds paid into the account of the federation.

It must be recognised that the evolution of a market structure between gas suppliers, gencos, discos and the transmission company may not be perfect at this stage of the power programme, but it must be encouraged and fine tuned along the way until it matures. Again, it will be the responsibility of NERC, with some assistance from the BPE, to set it up.

It should be noted that the trading arrangements between the business units or operators in the electricity sector will make them more attractive to prospective investors that may be interested in acquiring them under the privatisation programme that will be superintended by the BPE (definitive transfers to the private sector would fall under the second and third phases of the blueprint). It would be necessary to also give some serious thought to concessioning the pipeline infrastructure to the private sector for enhanced gas supply.

In the area of transmission and distribution, considerable resources have been pumped into National Integrated Power Project without discernable results. It is unclear if there is a project monitoring team whose responsibility it is to verify on going work. If there is none, one ought to be set up immediately to go after contractors responsible for the upgrade and expansion of the distribution and transmission network to ensure that they deliver. Defaulting contractors should be made to refund funds disbursed to them, and their companies blacklisted and barred from undertaking future power projects.

Under the first phase, the BPE has to kick start the privastisation programme for the power sector. Starting it off in the next few months does not in anyway suggest that it can be fully executed under the first phase of the blueprint. It is expected that the privatisation process will spill over into the second and third phases of the programme.

However, the BPE must start by recognizing that the privatisation process would have to be modified in line with current realities. When reforms for the power sector was started eight to nine years ago, delineation of existing infrastructure at the time led to the creation of 11 distribution companies and 6 generation companies. Quite a number of new power stations have been built by the federal government ever since. Distribution has also been expanded.

This means that the BPE would have to work with advisers to re-delineate the power network by creating new companies or business units that would also have to be sold outright or concessioned. It is only when this is done that it can start inviting investors to express interest in the companies.

To be continued...

Wednesday, April 7, 2010

IBB, PDP and 2011 Elections

If we are to believe recent media report, it seems the ‘evil genius’ is contemplating throwing his hat into the ring. Whilst speaking to journalist during his last visit to Abeokuta, Nigeria’s former Head of State, General Ibrahim Babangida was quoted as saying “he would be favourably disposed to the presidency of the country if it was the yearning of Nigerians”. When asked if he will be interested in running for the Presidency, his reply was "I am still doing some consultation and honestly I will hint you on that when I have finished. I will give you a feedback very soon”.

For IBB to have noted that he’s consulting means two things. It’s either he’s interested in himself, and currently taking his time to sound out his followers and apologists. Or it could be that, he’s under pressure from his sychophants to contest the 2011 presidential elections.

This will not be surprising as quite a number of people both within the political elites and civil society believe that IBB is the only person that can move the nation forward.What informed such thinking I don't know! You may say that such people are deluded. But the fact is, one of the principles of democratic governance is freedom of speech and opinion.

Gen. Babangida’s comments however seem to have ignited a flurry of angry remarks. Interestingly, social commentators have been quick to tell us why IBB is not suitable as President, however they have all failed to tell us how to STOP him from being President.

But who’s afraid of Babangida? Is Babangida the most hated Nigerian leader? If so, why? Is Babangida the worst leader in Nigeria’s history?

Some have argued that the Retired General has no “moral right” to run for any political office in Nigeria. To an average Nigerian, the two biggest sins of IBB are the annulment of June 12 election and corruption.

In my opinion, the recent attacks on IBB candidacy underscores the deep hypocrisy that exists within the civil society. If one could ask, why should IBB alone carry the can of June 12 election annulment? Is it not ironic that some of the major actors involved in the annulment of the June 12 elections are the same people ruling the nation? Has anyone queried the role of the current Senate President, David Mark during the last days of Babangida regime? Did anyone query Arthur Nzeribe’s nomination and subsequent election as a Senator in 1999? Did anyone question Senator Uche Chukwumerijie election into the Upper House, despite been spokesperson for the Shonekan-led Interim National Government? If Babangida does not have a moral right, then what moral right does David Mark have to be No.3 citizen? What moral rights do all past military leaders and civilians that served under the Babangida administration have, to seek public office?

The point of my argument is General Babangida is not any worse than most of our present and past political leaders. There’s no scale for immorality or bad governance. Whilst he might have taken corruption to a new level, he did not introduce corruption into the system. Corruption in Nigeria is not just about individuals, it’s “systemic”. Most of the politicians condemning IBB’s political ambition, will probably do far worse things if they had same opportunity.

If the provisional election timetable released by the Chairman of the Independent National Electoral Commission is anything to go by, it means we have barely 12 months before the 2011 general elections. However, we are yet to see any serious contender come out to declare his/her Presidential ambition. The only person to have declared his ambition did so in the US (!). I cannot understand how someone will leave the shores of the country he wishes to govern, only to go and declare his political ambition in a foreign land. As I write we are yet to see his manifesto.

Another of the “supposed” Presidential aspirants is also busy conducting opinion poll on a social networking website. He’s been propping up other people’s name apart from himself. How can such people be considered serious? Yet, they tell us everyday why IBB shouldn’t be the next president of the Federal Republic of Nigeria. So who should be? When will such a person declare his political ambition? For me, if by now such a person is undecided, then he/she is a time waster.

With an unorganised opposition, flawed electoral system, a civil society that has exhausted most of its energy looking for a “missing president”, I can’t see how IBB wouldn’t win the 2011 polls - if he succeeds in picking up a nomination ticket under the PDP. Like it or loathe it, PDP remains the only party in Nigeria with a structure to win a presidential election, within the current timeframe.

My message is simple. Let’s begin to direct our energy to the right causes. There’s no point wasting our time attacking individuals. Everyone is free to seek political position, except those found guilty of criminal offence. What we need is a fair and transparent electoral system that ensures that our votes count. It’s then up to the electorates to decide. As they say, a nation gets a leader it deserves.