Last Thursday, President Yar’Adua was quoted in the media saying “I must say that today is a sad day for me. And I think it should be for all Nigerians. When 20 leaders of the leading countries in the world are meeting and Nigeria is not there. This is something we need to reflect upon. We have the population, we have the potentials, we have the ability and the capacity and we have the will. What do we lack? Is it the will?"
The G20 is a group of ‘important’ industrialized and developing economies. Together, member countries represent around 90 per cent of global gross national product, 80 per cent of world trade (including EU intra-trade) as well as two-thirds of the world's population. I will stress the word ‘important’ in this context because there are many other nations that can be considered industrialized but are not members of the G20. And Malaysia is a typical example.
Going back to President Yar’Adua’s comments, I think the influence of Nigeria as a nation in the global community is often exaggerated. Nigerian leaders can sometimes be described to be suffering from illusion in this context. With the current state of the economy and meagre infrastructure, it is preposterous for anyone to think we should be in the G20 - albeit our population and vast natural resources.
Yes, we have a population of 140 million. Yes, the G20 makes up two-thirds of world’s population. But the question is, of what importance is a country of 150 million, but with 50% unemployment? In fact we don’t even have accurate data on the number of unemployed in the country. Our leaders can only quote figures from UN, World Bank, IMF etc.
Do we have the potentials? Yes we do. We’ve always had the potentials since the word ‘go’ but have failed to deliver. We have failed to deliver in all aspects of our economy and society. As they say, Nigeria is the only place where nothing works! For how long would we continue to live on potentials?
On the BBC programme Hardtalk, Ex- President Obasanjo was asked ‘why more than 70% live in abject poverty, despite been a rich nation with abundant resources?’ The former President was quick to say Nigeria is only ‘potentially rich’ but not ‘rich’. He went on to say, “considering its population it has made the best use of its opportunities”. So in summary, President Obasanjo admitted that the nation’s population has been its Achilles heel, when compared to other oil-rich nations such as Saudi Arabia, Kuwait etc. For me this is an admission from a former President that Nigeria is ‘failed state’. When countries like India and China are taking advantage of their human capacity to position themselves in the current global economy, we are still in the wilderness waiting for the Moses that will take us into the promise land.
How can we describe a nation producing over 2.5 million barrels of oil per day but can only generate 600MW? How can we describe a nation of rent-collectors, that is 95% dependent on proceeds from oil sales? How can describe a nation of 150 million without a mass public transport system? How can you describe a nation with four refineries but imports 85% of its petroleum products? How can we describe a nation where the educational institutions are closed for almost six months in year due to strike actions? How can you describe a nation, where politicians and civil servants loot the treasury with impunity? How can you describe a nation where the President does not have any faith in its health system, and has to travel overseas for medical check-up? How can you describe a nation where 70% have no access to pipe-borne water?
It is only in Nigeria that people have three generators in one house. It is only in Nigeria that you can loot the treasury and obtain court injunction to stop been probed. It is only in Nigeria where one individual dictates the retail price of diesel. It is only Nigeria where an Attorney-General can write a letter of support for corrupt politician in the name of ‘rule of law’. It is only in Nigeria, that you can award $8.5bn rail modernisation project without regard for ‘competitive tendering’. It is only in Nigeria that it takes 2 years to seek redress at the courts following a fraudulent electoral process. It is only in Nigeria that thieves and rogues are given national honours.
I’m sure the G20 is not interested in failed economies or failed governments. The nation has been experiencing continuous infrastructure decay post-independence. We are still living on infrastructure built by our former colonial masters. I sometimes wonder, what our nation would have been if we didn’t have colonial rule.
The curriculum of our educational system is archaic and at odds with modern trends. University and secondary school libraries are full of outdated books, most of which have passed their ‘sell by’ date. None of the nation’s universities is ranked among top 1000 in the world. We have failed to develop our human capacity in any shape or form. The vision of our leaders is bereft of any rational thinking and defies all logic.
Perhaps, if the G20 was about the 20 most corrupt or rogue nations, probably Nigeria would have been the host and voted as the life President.
I want to hope that the Nigeria’s exclusion from the G20 will sound as a warning signal to President Yar’Adua. He needs to start acting decisively on key challenges facing the nation. The public mood is not very encouraging. It is almost two and half years since his assumption of office. Nigerians are sick and tired of all the rhetoric about seven-point agenda, rule of law etc. The nation needs an ‘action leader’ and not a ‘servant-leader’.
Monday, April 6, 2009
Thursday, April 2, 2009
Railways Act Bill 2008 - Who is winning?
The current review of the Railways Act aimed at encouraging private sector participation in the nation’s rail system is unlikely to achieve much in terms of private investment. The proposals contained in the bill are totally at odds with the original intent of the Bureau of Public Enterprise (BPE) to remove the ‘inherent conflict of interest’ in the current Railways Act 1955 - which vests regulation and provision of rail services solely on Nigeria Railway Corporation (NRC). As part of the privatization programme started by the Obasanjo regime, BPE did propose to separate the railway function into three separate entities, National Rail Development Authority; Rail Regulator, and Concessionaire (operations).
However, except for the amendment to the legislation with regards to, granting of track access to private operators through concessions, everything else in the proposed bill promotes the ‘status quo’. Although NRC will not continue to remain a monopoly service provider, it will still be solely responsible for rail development and regulation.
Under the proposed legislation, NRC will be the rail regulator, a service operator, grant concessions to private companies, retain ownership of the rail infrastructure and also be responsible for strategic rail development. This arrangement known as ‘vertical integration concession’ model, creates a conflict of interest and unlikely to yield any positive result.
What makes anyone think the NRC can perform these functions effectively considering its current deficiency in skills and history of mismanagement? How can the same organisation responsible for providing services regulate itself? Let’s assume the proposed change to the legislation achieves its objective and we have private operators competing with NRC. Are you telling me that NRC will certify its locomotives to be unsafe but certify that of its competitor to be safe? What skills does the NRC have in strategic railway planning? I think Honourable members of the Senate need to be educated in the difference between rail engineering and rail planning. You need to have identified the need for a rail line through rigorous planning techniques (demand forecasting, patronage modelling, origin/destination analysis, cost benefit analysis) before you start the ‘engineering’.
In Australia, the Queensland railway network is also managed through a ‘vertical integration concession model. Queensland Rail (govt-owned agency, similar to NRC) is responsible for the operation of services and ownership/maintenance of tracks. However, the regulation of rail services in terms of fares/subsidy and safety is undertaken by the State Government through the Department of Transport. The Dept of Transport is also responsible for all aspects of rail planning, and preservation of future rail corridors.
The Australian model is slightly different because the provision of passenger services is regulated by the state government. Whereas, passenger service operations is proposed to be deregulated in Nigeria. The Nigeria government will however need to subsidise these services because, if the actual cost is charged by the concessionaire it will be unbearable for commuters.
In the Nigerian context, there are two options available under the ‘vertical integration model’. The first option is, NRC to retain ownership of rail tracks, maintain rail tracks and set up delivery mechanism for new rail lines. Private companies to be responsible for provision rail services. Under this option, NRC will not be involved in operation of rail services. The Ministry of Transport will be responsible for negotiating rail concession contracts, and payment of subsidies to private rail operators.
The second option is, NRC continues to operate rail services but will have to compete with other private sector operators. It will also retain ownership of all tracks and maintain tracks on which it runs its services. Private sector operators will also be responsible for maintaining tracks in their concession areas. The govt through the Ministry of Transport will still be responsible for negotiating concession contracts/subsidies.
Under the two scenarios, the strategic long term planning for railways should either by undertaken the Ministry of Transport or a Strategic Rail Authority, but not NRC. The safety regulation of railways should also be undertaken by the MoT. NRC cannot be the safety regulator due to its interest in the ownership and maintenance of tracks. To have NRC undertake inspection or issue licence for rail inspectors on the rail track it owns will be a serious conflict of interest.
I’m sceptical about the intent of the proposed changes to Railways Act. It wouldn’t surprise me that the cabals that have profited from the inefficiencies and failure of the rail system are still at work. I also don’t think the Senate President was telling us anything new when you said “there are all sorts of interest groups that have now found themselves in the railway system. People who did not want the railway to work because they are benefitting from the failure of the railway at the moment”.
In actual fact, we can say the same about all sectors of our economy. As I wrote in my last piece, we are now a nation of Oligarchs. You will agree with me that, there are few individuals in Nigeria who have made colossal amount of money from the inefficiencies of the government. Where should we start, is it the failed railways, and road haulage cartel? or power generation and generator importers? or failed refineries and the petroleum products importers?. The list is endless. And when government-owned corporations that are set up to provide such services are put up for sale, they are sold to these same individuals under the guise of ‘privatisation’. Unfortunately, this is the product of ‘government failure’.
So tell me, who is winning?
However, except for the amendment to the legislation with regards to, granting of track access to private operators through concessions, everything else in the proposed bill promotes the ‘status quo’. Although NRC will not continue to remain a monopoly service provider, it will still be solely responsible for rail development and regulation.
Under the proposed legislation, NRC will be the rail regulator, a service operator, grant concessions to private companies, retain ownership of the rail infrastructure and also be responsible for strategic rail development. This arrangement known as ‘vertical integration concession’ model, creates a conflict of interest and unlikely to yield any positive result.
What makes anyone think the NRC can perform these functions effectively considering its current deficiency in skills and history of mismanagement? How can the same organisation responsible for providing services regulate itself? Let’s assume the proposed change to the legislation achieves its objective and we have private operators competing with NRC. Are you telling me that NRC will certify its locomotives to be unsafe but certify that of its competitor to be safe? What skills does the NRC have in strategic railway planning? I think Honourable members of the Senate need to be educated in the difference between rail engineering and rail planning. You need to have identified the need for a rail line through rigorous planning techniques (demand forecasting, patronage modelling, origin/destination analysis, cost benefit analysis) before you start the ‘engineering’.
In Australia, the Queensland railway network is also managed through a ‘vertical integration concession model. Queensland Rail (govt-owned agency, similar to NRC) is responsible for the operation of services and ownership/maintenance of tracks. However, the regulation of rail services in terms of fares/subsidy and safety is undertaken by the State Government through the Department of Transport. The Dept of Transport is also responsible for all aspects of rail planning, and preservation of future rail corridors.
The Australian model is slightly different because the provision of passenger services is regulated by the state government. Whereas, passenger service operations is proposed to be deregulated in Nigeria. The Nigeria government will however need to subsidise these services because, if the actual cost is charged by the concessionaire it will be unbearable for commuters.
In the Nigerian context, there are two options available under the ‘vertical integration model’. The first option is, NRC to retain ownership of rail tracks, maintain rail tracks and set up delivery mechanism for new rail lines. Private companies to be responsible for provision rail services. Under this option, NRC will not be involved in operation of rail services. The Ministry of Transport will be responsible for negotiating rail concession contracts, and payment of subsidies to private rail operators.
The second option is, NRC continues to operate rail services but will have to compete with other private sector operators. It will also retain ownership of all tracks and maintain tracks on which it runs its services. Private sector operators will also be responsible for maintaining tracks in their concession areas. The govt through the Ministry of Transport will still be responsible for negotiating concession contracts/subsidies.
Under the two scenarios, the strategic long term planning for railways should either by undertaken the Ministry of Transport or a Strategic Rail Authority, but not NRC. The safety regulation of railways should also be undertaken by the MoT. NRC cannot be the safety regulator due to its interest in the ownership and maintenance of tracks. To have NRC undertake inspection or issue licence for rail inspectors on the rail track it owns will be a serious conflict of interest.
I’m sceptical about the intent of the proposed changes to Railways Act. It wouldn’t surprise me that the cabals that have profited from the inefficiencies and failure of the rail system are still at work. I also don’t think the Senate President was telling us anything new when you said “there are all sorts of interest groups that have now found themselves in the railway system. People who did not want the railway to work because they are benefitting from the failure of the railway at the moment”.
In actual fact, we can say the same about all sectors of our economy. As I wrote in my last piece, we are now a nation of Oligarchs. You will agree with me that, there are few individuals in Nigeria who have made colossal amount of money from the inefficiencies of the government. Where should we start, is it the failed railways, and road haulage cartel? or power generation and generator importers? or failed refineries and the petroleum products importers?. The list is endless. And when government-owned corporations that are set up to provide such services are put up for sale, they are sold to these same individuals under the guise of ‘privatisation’. Unfortunately, this is the product of ‘government failure’.
So tell me, who is winning?
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