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Tag: Dakuku Peterside

  • The dying public school – By Dakuku Peterside

    The dying public school – By Dakuku Peterside

    There has been no remarkable uproar on the public-school collapse in Nigeria, affecting primary, secondary, and university education. Our leaders do not view it as a crisis. The reason is evident: there is a widespread trend among the garrulous upper class and middle class to send their wards and children to pricey private schools in Nigeria, with most of them sending their kids abroad. This dislocation between the elite class and public schools means that they are not only unmoved by its decay, but sometimes they are not even aware of the extent of the problem.

    Increasingly, public school is becoming the domain of low-income people who need more resources to send their children to good private schools. Good education is no longer affordable and is a class issue in Nigeria today. The paradox is that today’s elite and middle class are products of a robust public school system that existed between the 1930s and 1990s in Nigeria. During these golden years of public school in Nigeria, it provided an environment that allowed individuals of different socioeconomic backgrounds to interact with one another while removing barriers based on race, class, and religion. These schools also provided young Nigerians with the life skills they need to be self-sufficient and productive, and many of the products of this public school system became global giants and are still making waves worldwide and nationally in various fields of human endeavour. Quality public education has been steadily declining, particularly since the 1980s, which has led to the nearly total collapse of the system we have in place today. There has been a discernible drop in our public school system’s overall level of instruction since the 2000s, which has alarmed the populace.

    Nigeria has faced numerous challenges in providing quality public education for all its citizens. Economic downturns, political instability, corruption, and conflicts harm the education sector. Over the years, various education policies and reforms have been implemented to address the sector’s challenges. These include the Universal Basic Education (UBE) programme, which provides free and compulsory education for all children up to junior secondary school level, and efforts to promote technical and vocational education to address skills gaps. Despite these efforts, significant disparities in access to quality education persist. The failure of public education in Nigeria has been a longstanding issue, marked by various challenges and setbacks that have hindered the system’s ability to provide quality education.

    These challenges include chronic underfunding of the public education sector, a significant issue in Nigeria. We know that government spending on education has varied over the years, but it has often fallen short of recommended benchmarks such as the UNESCO-recommended 15-20% of the national budget. This lack of funding has resulted in inadequate infrastructure and a shortage of qualified teachers and essential educational resources.  Second, there is a lack or insufficiency of essential infrastructure, including classrooms, libraries, labs, and restrooms in public schools. Dilapidated buildings, overcrowded classrooms, and unconducive learning environment make it difficult for students to learn effectively and for teachers to deliver quality instruction. Third, the quality of teaching in public schools is often compromised due to factors such as inadequate teacher training, low motivation, miserable wage , and poor working conditions.

    Fourth, the curriculum used in public schools is only sometimes relevant to the needs of students or the demands of the modern world. It may lack emphasis on critical thinking, problem-solving, and practical skills essential for success today. Fifth, the disparities in access to education persist in Nigeria, with rural and marginalised communities often having limited access to quality schools and educational resources. Sixth, corruption and mismanagement within the education sector are our albatross. Funds earmarked for education may be misappropriated or embezzled, leading to a lack of accountability and transparency in the use of resources. It is little wonder that many state governments claim to make public education the centrepiece of their administration’s targets, yet little or no improvement is seen.

    Addressing these issues requires concerted efforts from the government, civil society, the private sector, and international partners. But it also requires the active participation and support of each one of us. Priority should be given to increasing investment in education, improving teacher training and welfare, upgrading infrastructure, revising the curriculum to be more relevant and inclusive, and promoting access to education for all, especially marginalised groups. Additionally, efforts to tackle corruption and promote good governance are essential for building a more effective and sustainable public education system in Nigeria. Ironically, governments at both federal and state levels have paid lip service to public education over the years, leading to the rise of the private education sector to fill the gap. Although millions of children with no other option still receive their education in public schools, they are no longer the place teachers and students fervently desire to be. The clamour for private schools has led to the exponential rise in Nigeria’s private primary, secondary and tertiary schools. We, as citizens, as parents, as educators, as policymakers, have a role to play in reversing this trend and revitalizing our public education system.

    A cursory look at statistics will show any keen observer that we are in a dangerous place with our future generation, most of whom will not get any meaningful education. We are cheaply mortgaging the future by continuing to underinvest in public schools. All we are doing is laying the groundwork for society to fail. It is not appropriate to do so. For instance, from 2018 to 2020, enrolment in primary school declined by 62,000 or 0.3% (from 22,384,755 to 22,322,234) in public schools but increased by about 82,000 or 1.51% (5,504,632 to 5,587,528) in private schools. Likewise, enrolment in public secondary schools increased by about 18% between 2016 and 2019, while in private secondary schools the increase is about 56%. Besides, the student-to-teacher ratio in public primary schools is about 1:49 (against the 1:35 recommended, while it is significantly lower, at about 1:30, in private primary schools. Relatively, more private schools are popping up in big cities than public schools, and the numbers are almost getting even in some cities. This trend is expected to continue this way unless there is a significant intervention to stop the decline in public school enrolment, especially in urban areas with substantial upper- and middle-class families. The urgency of the situation cannot be overstated. We must act now to save our public education system.

    The problem with private education often is the cost. Quality education costs are so high that only a few Nigerians can afford it. Recently, some Nigerians were abhorred by the news of the cost of fees of British Charterhouse School (N43 million per annum) for its students. Most did not know that the school had a waiting list of over 1000 when it initially wanted only about 200 pupils. Other decent private schools cost millions of Naira yearly, and parents struggle to cover these costs. Ironically, private schools are not only about quality of education but also about class distinction. It is assumed that the more expensive the school is, the better the quality. Unfortunately, the current situation is a shift of emphasis to expensive private primary, secondary and tertiary education at the expense of public institutions. The solution lies in a conscious public sector policy revision that encourages a renewal of the public education sector through curriculum renewal, teacher retraining, infrastructure renewal and renovation. For instance, when former Governor Rotimi Amaechi of Rivers State revamped and modernised public schools with up-to-date modern facilities, parents began to return their wards to public schools that had become competitive with even the best private schools. Most recently I got involved in helping two state governments asses the state of education and I just wept but I could feel  the seriousness and determination  of the affected governors to fix the broken system.

    I applaud the president’s plan to census the Nigerian school system to create the primary data for education planning and development. I sincerely hope that the federal and state governments give serious attention to our public education sector. No template exists in the world where a country develops its human resources through private education. All the developed countries we know of developed and sustained a robust quality public education system that is inclusive, equitable, and of high standards. Public schools in these countries are where the children of the rich, the poor, and even the migrants interact and learn in a melting pot of family, cultural, and racial diversity. Quality primary education is a fundamental right of every Nigerian child, and the government at all levels must be held accountable for failure to provide that. Today’s children live in a highly technological and scientific globalised world, and they compete locally and globally for survival and contribute to humanity. It is a disservice to them if they lack the basic literacy, numeracy, and creative skills they need to thrive and develop in Nigeria.

  • The Naira abuse palaver – By Dakuku Peterside

    The Naira abuse palaver – By Dakuku Peterside

    There is no disputation that Naira abuse or more specifically the act of spraying money at social events has become an acceptable  norm or cultural practice in Nigeria. Nigerians have a cultural affinity for lavish social gatherings. Many people regard these occasions as a means of displaying social status  and wealth. Spraying Naira notes, and other currency notes, at events progressively appear to be the  ultimate way to flaunt your social standing. Even burials that are supposed to be sober moments have been turned into considerable fanfare. This has created a new industry of mint note trading and events management. All of these constitute the social infrastructure of Naira abuse. A new dimension of the social infrastructure of Naira abuse is the arrival to the scene of the nouveau rich. Society has labelled them with all sorts of nomenclature: Yahoo Boys, Yahoo Plus, and 419.

    Nigeria has since recognized the dangers of Naira abuse but  that is not the focus of this piece. The government has made rules and laws to check it and provided enlightenment campaigns to educate people. The Central Bank of Nigeria( CBN) gave Naira abuse as one of the reasons why it is pushing for digital-based financial transactions. Naira abuse, like its ancestor-mother social epidemic of corruption, has remained stubborn and refused to go away.

    There is ambiguity about what constitutes Naira abuse. The Central Bank of Nigeria Act of 2007 in Section 21 of the CBN Act 2007 clearly defines Naira abuse and prescribes various punishments to deter citizens from abusing the Naira. They include – spraying banknotes at events; writing on banknotes; stapling banknotes; tearing banknotes; dancing or stamping on Naira; defacing the bank notes with substances or ink, oil; selling currency banknotes; mutilation of the Naira note; money bouquets. However, law enforcement has been lax. It is commonly believed that the laws against Naira abuse are either symbolic or desuetude because no one is held accountable, everyone gets away with it, and things have normalised.

    The social phenomena of Naira abuse, especially the spraying of money, have become an epidemic in Nigeria. Lately , it is of significant concern. We have exported this to many parts of the world, and social media is replete with evidence of this in weddings and other social events attended by Nigerians in different parts of the world.

    Malcolm Gladwell’s book, “The Tipping Point: How Little Things Can Make a Big Difference” explores the idea that social phenomena, like trends and epidemics, often reach a tipping point where they suddenly become widespread. He identifies three key factors that contribute to this tipping point: the Law of the Few (the idea that a small number of people have a disproportionate influence), the Stickiness Factor (how messages or ideas stick in the minds of people), and the Power of Context (how the environment influences behaviour).

    Through engaging anecdotes and research, Gladwell illustrates how understanding these factors can help individuals and organizations create or manipulate trends and epidemics. The book emphasizes the importance of paying attention to small details and understanding the social dynamics behind spreading ideas and behaviours. The fundamental concepts of the book about Naira Abuse are twofold. First, the cultural context or external environment provides the soil for bad or good behaviour to grow and spread. Second, key people with remarkable personalities can cause or stop social epidemics because of their social profile or social network.

    There is a link between the recommendation of Malcolm Gladwell and the arrest and prosecution of  Idris Okuneye better known as Bobrisky, a cross-dresser and social influencer, for Naira abuse, and the arrest and ongoing prosecution of Cubana Chief priest Pascal Okechukwu in connection with Naira abuse. Why selectively arrest the duo when everybody is involved in some form of Naira abuse either by trampling, spraying ,mutilation  or rumpling ? Truth is that it is nearly impossible for any law enforcement organisation to find and apprehend every perpetrator. Resources  exist in limited supply . It is simple wisdom to begin with people who have disproportionate influence. This is perhaps what EFCC has done.  First common ground is that both of them enjoy considerable social media  influence whether for positive or negative reasons depending on your own value system. These two cases, though similar, are following different paths. Bobrisky, in court, pleaded guilty and has since been handed six months imprisonment. Cubana Chief Priest did not plead guilty, so his case will go to full trial, putting the law to the test. This court case will assist us in providing answers to some critical questions: what are the societal ramifications of Naira spraying, and how can Naira misuse be proven? Is there need to amend the existing law and make it more relevant to the challenge? Will this fresh wave of enforcement stop the epidemic of Naira abuse ? Regardless of how the legal proceedings turn out, they have highlighted how important it is to take the triplet societal plague of poor social behaviour, Naira abuse, and their ancestor-mother corruption very seriously.

    I have identified six pillars to control or stop Naira abuse: Fight corruption because it is an enabler for abuse of the Naira. The incestuous relationship  between corruption, illicit financial transactions and Naira abuse is well established . Second,the government should deepen knowledge and change people’s orientation by embarking on mass enlightenment, people must understand clearly what constitutes Naira abuse and what the punishment is for such offence . Third, address cultural issues relating to Naira abuse through community engagement. People gifting money to celebrants at occasions is no crime but the manner of gifting is the issue. Fourth, government should renew the push for digital transactions. Fifth, government must strengthen the structures of law enforcement. It is not just police and EFCC matter . The judiciary must upend its knowledge on the subject matter . Sixth, government must be impartial and objectively enforce the law to change cultural norms and public behaviour that defaces the Naira. This may entail revisiting and improving the law.

    CBN , Police and the EFCC should study different models of changing public behaviour in the past and draw up a model and strategy to deal with the issue of Naira abuse, especially since it has become embedded in some cultures. Good examples abound abroad and in Nigeria. The British government employed various strategies to change public behaviour regarding spitting and other personal vices. Spitting in public places was prohibited by local bylaws or municipal regulations but it is social persuasion that gave the result . These laws serve as deterrents and can result in fines or other penalties for offenders. They launched public awareness campaigns, collaborated with community stakeholders, and monitored and enforced the law. However, most of all, they leveraged social norms and peer pressure to influence behaviour and encourage individuals to conform to accepted standards of behaviour by highlighting the societal consensus against spitting and certain destructive behaviours and showcasing positive role models who embody desirable conduct. Today, the practice of spitting publicly, urinating on the road corners, and other public nuisances are controlled to the barest minimum.

    In Nigeria, good examples of efforts to change public behaviour can be seen around us. Most were successful to a greater degree. The government should revisit some of these campaigns and learn from them.

    A model that seems to be working in Akwa Ibom State is the State Ethical and Attitudinal Reorientation initiative  . Before 1999, the Akwa Ibom people experienced a severe social epidemic, “The Pervasive and prevalent House help Syndrome,” which gained widespread notoriety and led to the dubbed moniker “Ekaette” for nearly every female domestic helper. The administration of Obong Attah took up the task of reorienting the Akwa Ibom people’s mindset. He established the Ethical and Attitudinal Reorientation Commission (EARCOM) in Akwa Ibom and gave them the responsibility of raising public awareness about the importance of “minoring” vices and “majoring” in moral principles.

    The struggle has persisted throughout the regimes, and Pastor Umo Eno’s present administration appears to be taking it to newer, more profound heights by hiring assistants for each ward and unit and charging them to carry out the Commission’s work of value reorientation in remote areas. As bait, he is using the incentivization  and social support model, drawing on the country’s current food and hunger crisis to reach out with the message of value reorientation. Today, a negligible number of Akwa Ibom daughters are house helps , and the majority are highflyers in the professions and business.

    The success story of Akwa Ibom is a model that the federal government can replicate. Changing public behaviour requires a multifaceted approach that combines legislation, education, community engagement, social support  and enforcement efforts. By addressing the underlying factors contributing to undesirable behaviours and promoting positive alternatives, governments can effectively shape public attitudes and foster a more socially responsible society.

  • Air Peace, capitalism, and national interest – By Dakuku Peterside

    Air Peace, capitalism, and national interest – By Dakuku Peterside

    Nigerian corporate influence and that of the West continue to collide. The rationale is straightforward: whereas corporate activity in Europe and America is part of their larger local and foreign policy engagement, privately owned enterprises in Nigeria  or commercial interests are not part of Nigeria’s foreign policy ecosystem, neither is there a strong culture of government support for privately owned enterprises’ expansion locally and internationally.

    Nigerian firms’ competitiveness on a global scale can only be enhanced by the support of the Nigerian government.  It is evident that relationship between Nigerian businesses  and foreign policy is important to the national interest. When backing domestic Nigerian companies to compete on a worldwide scale, the government should see it as a lever to drive foreign policy, national strategic interest, promote trade, enhance national security considerations, minimize distortion in the domestic market as the foreign airlines were doing, boost GDP, create employment opportunities, and optimize corporate returns for the firms.

    For example, the South Korean mega conglomerates within the chaebols corporate structure, such as Samsung, Daewoo, SK Group, LG, and others, have become globally recognizable brands thanks to the backing of the South Korean government. For Chaebol to succeed, strong collaboration with the government has been essential. Also, in telecommunications, Huawei would only be such a well-known brand worldwide with the backing of the Chinese government. The opposite is the case with Nigeria.

    Admitted nations do not always interfere directly in their companies’ business and commercial dealings, and there are always exceptions. I can cite two areas of exception: military sales by companies because of their strategic implications and are, therefore, part of foreign and diplomatic policy and processes. The second is where the products or routes of a company have implications for foreign policy. Air Peace falls into the second category in the Lagos – London route.

    Two events demonstrate an emerging trend that, if not checked, will disincentivize Nigerian firms from competing in the global marketplace. There are other notable examples, but I am using these two examples because they are very recent and ongoing, and they are typological representations of the need for Nigerian government backing and support for local companies that are playing  in a very competitive international  market dominated by big foreign companies whose governments are using all forms of foreign policies and diplomacy to support and sustain.

    The first is Airpeace. It is the only Nigerian-owned aviation company playing globally and checkmating the dominance of foreign airlines. The most recent advance is the commencement of flights on the Lagos – London route.

    In Nigeria, foreign airlines are well-established and accustomed to a lack of rivalry, yet a free-market economy depends on the existence of competition. Nigeria has significantly larger airline profits per passenger than other comparable African nations. Insufficient competition has resulted in high ticket costs and poor service quality.

    It is precisely this jinx that Airpeace is attempting to break. On March 30, 2024, Air Peace reciprocated the lopsided Bilateral Air Service Agreement (BASA) between Nigeria and the United Kingdom when the local airline began direct flight operations from Lagos to Gatwick Airport in London.

    This elicited several reactions from foreign airlines backed by their various sovereigns because of their strategic interest. A critical response is the commencement of a price war. Before the Airpeace entry, the price of international flight tickets on the Lagos-London route had soared to as much as N3.5 million for the  economy ticket.

    However, after Airpeace introduced a return economy class ticket priced at N1.2 million, foreign carriers like British Airways, Virgin Atlantic, and Qatar Airways reduced their fares significantly to remain competitive.

    In a price war, there is little the government can do. In an open-market competitive situation such as this, our government must not act in a manner that suggests it is antagonistic to foreign players and competitors.

    There must be an appearance of a level playing field. However, the government owes Airpeace protection against foreign competitors backed by their home governments. This is in the overall interest of the Nigerian consumer of goods and services. Competition history in the airspace works where the Consumer Protection Authority in the host country is active.

    This is almost absent in Nigeria and it is a reason why foreign airlines have been arbitrary in pricing their tickets. Nigerian consumers are often at the mercy of these foreign firms who lack any vista of patriotism and are more inclined to protect the national interest of their governments and countries.

    It would not be too much to expect Nigerian companies playing globally to benefit from the protection of the Nigerian government to limit influence peddling by foreign-owned companies. The success of Airpeace should enable a more competitive and sustainable market, allowing domestic players to grow their network and propel Nigeria to the forefront of international aviation.

    The second is Proforce, a Nigerian-owned military hardware manufacturing firm active in Rwanda, Chad, Mali, Ghana, Niger, Burkina Faso, and South Sudan. Despite the growing capacity of Proforce in military hardware manufacturing, Nigeria entered two lopsided arrangements with two UAE firms to supply military equipment worth billions of dollars , respectively. Both deals are backed by the UAE government but executed by UAE firms.

    These deals on a more extensive web are not unconnected with UAE’s national strategic interest. In pursuit of its strategic national interest, India is pushing Indian firms to supply military equipment to Nigeria. The Nigerian defence equipment market has seen weaker indigenous competitors driven out due to the combination of local manufacturers’ lack of competitive capacity and government patronage of Asian, European, and US firms in the defence equipment manufacturing sector. This is a misnomer and needs to be corrected.

    Not only should our government be the primary customer of this firm if its products meet international standards, but it should also support and protect it from the harsh competitive realities of a challenging but strategic market directly linked to our national military procurement ecosystem. The ability to produce military hardware locally is significant to our defence strategy. This firm and similar companies playing in this strategic defence area must be considered strategic and have a considerable place in Nigeria’s foreign policy calculations.

    Protecting Nigeria’s interests is the primary reason for our engagement in global diplomacy. The government must deliberately balance national interest with capacity and competence in military hardware purchases. It will not be too much to ask these foreign firms to partner with local companies so we can embed the technology transfer advantages.

    Increasingly, other companies, especially in the banking and fintech sectors, are making giant strides in global competitiveness. Our government must create an environment that enables our local companies to compete globally and ply their trades in various countries.

    It should be part of the government’s overall economic, strategic growth agenda to identify areas or sectors in which Nigerian companies have a competitive advantage, especially in the sub-region and across Africa and support the companies in these sectors to advance and grow to dominate in  the African region with a view to competing globally. Government support in the form of incentives such as competitive grants ,tax credit for consumers ,low-interest capital, patronage, G2G business, operational support, and diplomatic lobbying, amongst others, will alter the competitive landscape. Governments  and key government agencies in the west retain the services of lobbying firms in pursuit of its strategic interest.

    Nigerian firms’ competitiveness on a global scale can only be enhanced by the support of the Nigerian government. Foreign policy interests should be a key driver of Nigerian trade agreements. How does the Nigerian government support private companies to grow and compete globally? Is it intentionally mapping out growth areas and creating opportunities for Nigerian firms to maximize their potential? Is the government at the domestic level removing bottlenecks and impediments to private company growth, allowing a level playing field for these companies to compete with international companies? Why is the government patronising foreign firms against local firms if their products are of similar value? What was the rationale for flight tickets from Lagos to London costing N3.5M for the economy class just a few weeks ago only to come down to N1.3M with the entrance of Airpeace to the market? Why are Nigerian consumers left to the hands of international  companies in some sectors without the government actively supporting the growth of local firms to compete in those sectors?

    These questions merit honest answers. Nigerian national interest must be the driving factor for our foreign policies, which must cover the private sector, just as is the case with most developed countries. The new global capitalism is not a product of accident or chance; the government has choreographed and shaped it by using foreign policies to support and protect local firms competing globally. Nigeria must learn to do the same to build a strong economy with more jobs.

  • Electricity tariffs: The limits of shock – By Dakuku Peterside

    Electricity tariffs: The limits of shock – By Dakuku Peterside

    In Nigeria, many policies that are supposed to catalyse economic growth end up making things worse and complicate matters for the citizen for whom these policies are designed to enhance their quality of life. Recently, two significant policies typify this: The Petroleum Subsidy Removal Policy and the floating of the Naira. Both policies are good and well-intentioned and would bring about substantial progress for people in the medium to long term. However, the reality is that the policies ended up having a devastating effect on the populace. Removing the subsidy brought untold hardship due to sequencing and implementation issues rather than the principle of doing it. Somehow, we are still battling to survive the impact of the Naira forex rate merger.

    The problem was not the nobility of the intention, but something was wrong with these policies’ conception, delivery, and implementation. This is against the absence of a planned execution that appreciated the impact assessment of a singular action on the economic dynamics such that by solving one problem, we created a bigger one.

    The most recent 231% hike in the price of electricity units for Band A customers is another presumed good policy that might have an unintended adverse impact on the citizens. The main argument for a  cost reflective tariff must be distinct from that of subsidy removal, especially when the economics of the subsidy is yet to be proven, and the utilisation transition mechanism is not established or communicated. This policy may unleash hardship on the people, which is not the intention of the policymakers. To be clear, I  am an advocate  of cost reflective  electricity tariff because of the big picture, and I will give reasons for this, but I am afraid I have to disagree with the current government approach.

    Based on the evidence of the roll-out of the policy and the realities of this new electricity regime, it is unclear how the determination of the bands works because the criteria of customers enjoying the constant 20-hour power supply threshold are unsubstantiated and bogus. Moreso  for a largely illiterate population . This makes the case for tariff increase somewhat confusing and not transparent as there is no measurable way for the average consumer to track supply relative to billing. The result is that people may end up paying for darkness.

    A gradual, sequential step to the ultimate destination of appropriate electricity pricing would  have delivered   a different result and minimise the adverse effect on the citizens.  I have gone through the website of the regulator ,If  what the  Nigeria Electricity Regulatory Commission (NERC) has released  is the master plan for implementing appropriate electricity pricing, it  lacks  details of the progression path to total transition to cost effective tariff regime and fall short of expectations in every respect. The result of this hurried announcement of a price hike, whether for band A, B, or even C clients, may lead to endless inflation and economic stress on the citizens. If we add the electricity price hike to the impact of petrol subsidy removal and spiralling food inflation, the average citizen faces existential shock.

    However, I support the appropriate electricity pricing because it is critical for ensuring the sustainability, reliability, and affordability of electricity supply in Nigeria and promoting investment, innovation, and economic growth in the energy sector and beyond. Appropriate pricing ensures that utilities can generate sufficient revenue to invest in the maintenance, upgrade, and expansion of electricity infrastructure to enhance the reliability and quality of electricity supply. It incentivises consumers to use electricity more efficiently, thereby reducing energy consumption. It attracts private investment and, most importantly, helps reduce the financial burden on the government of subsidising electricity prices, freeing up resources for other priority areas such as health care, education, and infrastructural development. For the above reasons, I advocate appropriate pricing and support any policy that will open our electricity regime for growth and development. I understand the importance of electricity in Nigeria’s emerging economic structure.

    Nonetheless, I do not support the current policy approach because it is counterintuitive and counterproductive. It will produce a counter-effect to the intended goal. The reasons for my position are evident: first, between 1999 and 2015, Nigerian Senate documents show that Nigeria spent N2.74 trillion on electricity, yet there was no significant improvement in the generation or power delivered to homes and businesses. From 2018 to 2020, we spent N1.7 trillion on electricity, yet 43% of our population, according to the World Bank, needs to be connected to the national grid. The inference to draw is that the electricity power challenge is beyond money.

    There are obviously systemic inefficiencies and corruption that no one has bothered to address. Asking consumers to pay more will transfer the inefficiencies to the populace. Second, NERC says only 15% or 1.8m out of 12million  meterable customers  are under band A, which enjoys 20 hours of electricity per day, although  this may seem unrealistic. This band A must include factories, banks, telecom companies, hospitals, schools,  malls, commercial centres, and residential areas of high-net-worth individuals. This increase in tariffs will mean an increase in the cost of doing business by 231%.  Cost of school fees for private institutions will also go up by  a factor of 231%. The implication is that the businesses will transfer the cost to final consumers, mostly people experiencing poverty who are already undergoing a cost-of-living crisis. Third, this may dampen the real sector, and many businesses may close. Besides, demands for goods and services may drop. The competitiveness and profitability of Nigerian firms may be in jeopardy.

    The current approach will create inflationary pressures, reduce the competitiveness of businesses both locally and internationally, impact the household budget that is already battered by harsh economic realities, lead to business closures and resultant unemployment, negatively impact economic growth by constraining production and consumption, and ultimately may exacerbate already tensed social and civil unrest. Policymakers should consider implementing measures to improve electricity generation, transmission, and distribution efficiency and address issues related to tariff structures, affordability, and subsidy mechanisms.

    Nigeria has a vast informal sector – micro, small, and medium-sized businesses – that is our economy’s backbone. These businesses account for over 40% of our GDP and 70% of employment. These businesses include vibrant youth-led innovation hubs in informal urban settlements across the country, small service and creative firms scattered across our commercial centres, and burgeoning small industrial production businesses dotted in areas where access to electricity is better and stable. A draconian hike in electricity without appropriate time to plan and adjust may spell doom for these businesses, already spending a chunk of their merger revenue on private power generation.

    What could  NERC have been done differently  to implement a better pricing system? NERC could have delivered a well-thought-through transition plan over a 6-to-9-month period with a model allowing everyone to see what an increased tariff and electricity supply would mean. This way, citizens can adjust, make alternative arrangements and plan accordingly. Transparent communication and stakeholder engagement are essential for building  trust and effectively managing potential social and economic impacts. The necessity of public sensitisation on matters that affect the livelihood of the majority must be balanced. There is a need to prepare the public before implementing any new policy that has a significant impact on livelihoods. Socio-economic reform must never be an ambush shock therapy; otherwise, the populace will react like an injured collective. NERC ought to match an electricity tariff adjustment plan with a post-reform plan to show how the government and stakeholders intend to mitigate the adverse impact of a hike in price and other critical reforms.

    Conceptualising and adopting sound economic policies is necessary for increased output in the electricity sector, but more is needed: any policy is only as good as its implementation and impact. Policy implementation can fail for three reasons: the absence of complementary measures necessary to make the policy effective, nonalignment with reality, and the inadequate capability of prevailing institutions and administrative systems to respond to changes. This electricity tariff hike, especially given our current socio-economic realities, is one policy that may hurt the people because of poor conception and disoriented implementation. Though a great idea, the timing, implementation approach and lack of complementarity of favourable institutional and economic capacity to mitigate the unintended effect of the hike in price may end up creating more significant problems than we already have. Inadvertently, we may be biting more than we can chew.

  • The Parliamentary System debate – By Dakuku Peterside

    The Parliamentary System debate – By Dakuku Peterside

    The debate over which system of government is most appropriate for a multi-ethnic and geographically diverse Nigeria has suddenly resurfaced. This time, it is pushing the fundamental issues of good governance, bread and butter, security, and inclusiveness that Nigeria is grappling with to the back burner. At the centre of the debate is the agitation for a return to the parliamentary system of government as the structural panacea to Nigeria’s myriads of problems, although Nigeria has long consigned this system of government to history. Agitating the minds of critical observers of Nigerian politics is whether this renewed debate is political or systemic or is just a symptom of frustration with poor governance outcomes. Will a change from a presidential system of government to a parliamentary system put Nigeria on a trajectory of growth and development? Is there solid evidence that our many woes come from the practice of the presidential system of government, that a change to parliamentary will help us overcome?

    The first to fire the salvo was a group of 60 members of the National Assembly that proposed a bill to take the country back to the parliamentary system. Support came from diverse and far-flung quarters in rapid succession, including Afenifere, the pan-Yoruba political platform. We are not alone here. In late March this year, our neighbour, Togo, adopted a new constitution introduced by members of the ruling party, which transitions the West African nation from a presidential to a parliamentary system. Senegal also witnessed a significant generational shift in electing a new president. Developments in Togo and Senegal would increase the intensity of debate and agitations in Nigeria.

    In retrospect, we have tried both the parliamentary and presidential systems at different times. Between 1960 and 1966, referred to as the first republic, Nigeria, like most African countries that just got independence from their British colonial masters, adopted a parliamentary system of government. It had its challenges and strengths. At the breakdown of the first republic, the popular verdict was that the system was not the most appropriate for us or that the Nigerian political elite could not operate it. The military government of 1976-1978 led by General Olusegun Obasanjo, and the growing political elites considered the pros and cons of the parliamentary system, which was still fresh in Nigeria’s minds, and decided that the cons outweighed the pros. Just before the 1979 military-civilian transition, they chose the presidential system for us. The justifications for this choice were to improve issues of management of geographical diversity, representation of various groups, repudiating strong ethnic sentiments against national sentiment, and eliminating corruption.

    However, like the parliamentary system, the presidential system has merits and demerits.

    The  most significant challenges of the presidential system as practised in Nigeria are fourfold. The first is the tendency of the executive arm to pocket the legislative arm, which has made nonsense of the principle of separation of power, and checks and balances. The US-type presidential system is predicated upon a system of checks and balances. This vital principle does not allow for the rascality of any arm of government that may jeopardise the system. Since the return of democracy in 1999, and it is particularly evident at the sub-national level, this principle has been rendered impotent. Second, the enormous powers exercised by the president and governors tend to be abused and often breed dictatorship. Third, the winner-takes-all-mentality, which leads to the abuse of power of patronage that fuels corruption and exclusion of the majority from mainstream government activities, saps the government’s access to quality leadership potentials within the country. Fourth, the high cost of governance and low accountability have created a government system that is corrupt and overbearing. Our common patrimony is bastardised by a few privileged to be part of the government.

    The attempt to revisit the parliamentary system is not unconnected to our current economic challenges, ethnic tensions or separatist agitations, and corruption that has defied solution and gross incompetence of a good number of our political leaders. As a participant-observer, I believe Nigeria’s current governance crisis is less a problem of the system of government and more of political culture, incompetence of operatives and political actors,lack of leadership capacity and moral depravity. Each system has its pros and cons. Any system can be designed,considering local peculiarities and made to work if run by competent persons who subscribe to a common vision and shared core values and are ready to respect the rule of law. Nigeria’s problems of disunity, lack of patriotism, stunted growth, corruption, and leadership incompetence are neither a product of the parliamentary nor presidential system. It is simply a lack of commitment by the elite to democracy, democratic tenets and the common good. Democracy is not just about representative election, which we practice, though with a massive caveat regarding its credibility. It is more about practising its principles , such as the rule of law, upholding fundamental freedoms of the people, accountability of government to the people, security of life and property, and responsible governance that gives dividends of democracy to the people.

    Whether Nigeria should transition to a parliamentary system of government is a complex question that involves weighing various factors, including the country’s political culture,  multi ethnic setting , historical context, governance challenges, and aspirations for democratic development. Proponents of a parliamentary system argue that it can promote political stability by ensuring a closer alignment between the executive and legislative branches of government. In a parliamentary system, the government is typically formed by the majority party or coalition in the legislature, leading to smoother governance than the potential for gridlock in a presidential system. Also, they argue that parliamentary systems often feature a more transparent chain of accountability, as the executive is directly accountable to the legislature. This can enhance transparency and responsiveness to the electorate’s needs. They further argue that parliamentary systems are more flexible in responding to crises or changing circumstances. If the government loses the legislature’s confidence, it can be replaced swiftly through a vote of no confidence or early elections, allowing quicker course corrections. Lastly, a parliamentary system could better accommodate the representation of various groups by fostering coalition-building and power-sharing among different factions.

    Achieving this transition to a parliamentary system requires significant constitutional reforms, which can be lengthy and contentious. It would also necessitate changes to the electoral system and the functioning of government institutions. Nigeria has a long history of presidential governance since gaining independence in 1960. Transitioning to a parliamentary system would represent a departure from this tradition and may encounter resistance from those vested in the current system. Implementing a parliamentary system would require building institutional capacity, training legislators and administrators, and fostering a political culture conducive to coalition-building and consensus-driven decision-making.

    A marked difference between the two systems is the cost of governance versus development, which weighs heavily in favour of the parliamentary system. This may be an attraction for proponents of a parliamentary system. However, it would help if you juxtaposed this with which system is more appropriate for governing a diverse multi-ethnic federation and what system has worked best for the most successful federations in the world. Opponents of a transition to a Westminster-style parliamentary system have also argued that switching could aggravate the challenges of governability because of our political parties’ high level of indiscipline, poor political culture, ethnic cleavages, and the multi-ethnic nature of our society.

    Ultimately, the decision to transition to a parliamentary system should be guided by careful consideration of the preceding factors and a broad-based consultation and consensus-building among stakeholders. It is essential to assess whether such a change would address Nigeria’s governance’s underlying challenges and contribute to its long-term political stability and development. The inference to draw is that the current agitation is a demand for a new political culture,  protest against the high cost of governance, incompetence of the political leadership, bloated bureaucracy, and poor governance outcomes. There is no definite study to show a relationship between a system of government, thriving democracy, and a high standard of living. Nigeria’s problem is not necessarily the system of government we practice but the leadership deficit among the political operatives and actors. No matter which system is in place, we will have the same results as we are seeing now if the same morally jaundiced and intellectually bankrupt political actors hijack power and rule in their narrow, selfish interests. That is our bane. That is what we must change to survive.

  • The morality question – By Dakuku Peterside

    The morality question – By Dakuku Peterside

    There is unarguably a progressive value erosion in our country. This is happening increasingly, and there is no hope of it abating soon. This cankerworm is significantly influenced by westernisation and globalisation but with the shared responsibility of local catalysts like collapsed family systems, near extinction of communal oversight and accountability, abdication of moral reinforcement by religious centres, failure of governmental institutions and a skewed education curriculum that pays little attention to proper moral education and developing cultural personality identity.

    The social-moral code which governs how individuals behave in a community setting has literarily collapsed in most of our communities. Religious morality has been subdued by a craving for wealth and fanaticism not founded on love, truth, or honour. The elevation of money or accumulation of pecuniary wealth in the public space has become Machiavellian as the “end that justifies the means”. The ‘get rich quick syndrome’ is normalised. The effect of this malaise is evident to all; we see it, feel it, and analyse it, but beyond that, what do we do?

    The most critical to my mind is the moral dimension of our public affairs. The decay is evident on a national scale. This is not to say that the other dimensions of our moral decadence are less critical. This column will, however, focus on the morality governing the conduct of public affairs, which needs to be more relevant. The decay is growing at a rate similar to our advancement as a country and the extent of our globalisation. It is as though the more advanced and interconnected we are with the rest of the world, the more immoral we become. Some recent manifestations of the decay in our public morality standards will help us appreciate the extent of the decay.

    Historically, Nigeria has often witnessed corruption scandals of fantastical proportions at different times that have shown our decline from morality, as my friend Dr Lasisi Olagunju captured in his recent column “The History of scandals”. Each succeeding corruption scandal and sleaze makes the last one look like a child’s play in comparison, both in the audacity of maleficence and the amount of money involved. In the 1970s, Nigerians witnessed the “cement armada” scandal when the military government issued import licences to companies to import vast amounts of cement to build military infrastructure. The corruption in the cement price, the quantity supplied was far less than paid for, the demurrage paid for real and imagined ships carrying cement at the Nigerian ports, and the local and international court cases that ensued left a sour taste in our collective mouths.

    The 1980s were marred with the infamous “rice scandal”; the government spent over $4b to import rice to feed a hungry nation. The rice was nowhere to be found, the monies grew wings and flew into thin airs, and Nigerians and the international community marvelled at our leaders’ sheer level of wickedness and moral bankruptcy.

    In recent times, Nigerians have seen the abdication of moral responsibility by those charged with handling our public affairs in favour of self-interest and material gain. You remember the Dasuki-gate. Billions of Dollars meant for combating terrorism and insecurity cannot be accounted for, and the same insecurity has ravaged our communities. You remember the billion-dollar fuel subsidy scam of the 2000s and its sad, lurid details. In this democracy, people collected subsidy payments for petrol vessels that had never come here or existed and falsified the amount of petrol supplied. A few well-connected Nigerians got away with murder in the subsidy scandal.

    Most recently, there was the Senator Ningi Budget padding scandal of the National Assembly. The presidency presented a budget of about N27.5 trillion to our National Assembly, but controversy has trailed the budget with no solid explanation as to what happened. The story of magical ubiquitous solar lights and boreholes still haunts the integrity of the budget. This budget manipulation allegation is a moral question for the National Assembly. It has brought issues of transparency, abuse of power, the conflict between public interest and personal interest, and issues of fairness and equity to public attention. These issues raise questions about whether our National Assembly has any moral responsibility.

    The most disturbing aspect of these scandals is that we do not learn lessons from them, and most perpetrators go unpunished. Nigerians are used to that and expect little accountability and responsibility from our leaders. Impunity reigns supreme, and things have fallen apart. Moral responsibility is an excellent sign of leadership, but this is vanishing in Nigeria. No leader ever takes responsibility for either failure of oversight or being complicit in a failure of the system to compensate morally for the pain associated with such failures.

    No one resigns, apologises, or cares about the people, the victims. The reward for corruption in Nigeria is that perpetrators are given better opportunities to ply their trade. They are valuable to the corrupt system that requires the stealing of public funds to prop it up. Nigerians are used to hearing the names of people they believe should be in jail in new juicy appointments. In comparison, in Egypt, the transport minister, Hisham Arafat, resigned on moral grounds in late February 2019 after a deadly train crash in Cairo killed at least 25 people and left 50 others injured. Please understand that the Minister was not driving the ill-fated train. But he resigned on moral grounds.

    One of the most striking features of contemporary Nigerian politics and politicians is that paradoxically, political rhetoric is increasingly moralistic while the actual ability of public officials to achieve moral ends is in decline. Our public officials see only shades of grey and operate in a world of contradictions, extreme selfishness, greed, deceit and double-speak. The moral corruption of our democratic process contributes substantially to a moral breakdown in all areas of society. Nigeria’s societal moral values, which govern the conduct of politics, business, and government, have often been corrupted. A society’s moral values define what people see as acceptable behaviour for themselves, what they believe behaviours they exhibit that others will approve of or not and what society collectively accepts or rejects as acceptable behaviour by individuals.

    The various crises engulfing the contemporary Nigerian state manifest the breakdown of morality in almost all spheres of the country. The gruesome murder of 16 military personnel last Thursday while responding to a distress call during a communal crisis between the Okuoma and Okoloba communities in Delta State is a product of the failure of morals in the communities. The fact that youths who control both money and firepower in our communities no longer have respect for constituted authority and community elders indicates how low we have gone in morals. Our military, which we should revere for protecting us, has come under attack by the same people it is protecting. Daily, we are bombarded with stories of how our military personnel are dying at the hands of fellow Nigerians – bandits, terrorists, secessionists and now village vigilante groups. This is absurd and shows how low we have come as a society.

    Chinua Achebe argued that a functioning, robust democracy requires a healthy, educated, participatory followership and an educated, morally grounded leadership. We do not have either morally grounded leadership or healthy, educated, participatory followership. It is little wonder our democracy has failed to rise in leaps and bounds. The importance of cultivating a solid moral foundation, both as individuals, politicians, and public officials and as a community, should be a priority programme. We must halt the drift, review our current modus operandi, look back into the pressures that have destroyed our public moral standards and values, and seek to rebuild our society based on meritocracy, fairness, and selflessness. We must focus on moral reinforcement rather than materialism.

    The decline of moral values in our communities, particularly in politics and public life, should be a central concern. Politics does not rise or fall on the private righteousness of leaders. Leaders’ self-interest should always be tempered by moral conscience.  We need to strengthen the guardrails of National morality such as  the Judiciary  , ICPC, EFCC and the Code of Conduct Bureau . We must effectively  demand moral uprightness from public officials and celebrate those who uphold such high moral and ethical standards. We should have more role models of people with merit and resounding accomplishments. We must bring back the mantra that morality and hard work are worthy virtues and celebrate successful Nigerians in sports, art, music, science and technology, academia, business and entrepreneurship, and public leaders who shine as beacons of hope for a better, morally stable, and scandal-free society, where men and women of goodwill and conscience will thrive for the benefit of humanity.

     

    Dr Dakuku is a Public Sector Turnaround Expert, leadership coach, Public Policy Analyst and Columnist.

  • The States and the Blackout Nation – By Dakuku Peterside

    The States and the Blackout Nation – By Dakuku Peterside

    Many Nigerians believe that restructuring the country or devolving powers from the centre to the sub-nationals is the silver bullet that will solve all our problems. This belief has sustained the debate for or against restructuring for decades. As fanciful as this claim is, I disagree with this position because bad leadership is a more significant challenge than the superstructure of the country. Although the way Nigeria is structured does not make for optimal productivity and needs some form of amendment or tinkering, we need thinking and honest leadership to make progress. This kind of leadership is required at the central and sub-national levels.

    One area in which sub-nationals or states of the federation would take advantage of to show that a restructured Nigeria can be an oasis of development is electricity generation, transmission, and distribution. This is because of the multiplier effect of electricity on quality of life, productivity, employment generation, and human development. The recent epidemic of blackouts that has enveloped the nation due to the collapse of the national grid and frequent power outages have challenged the proposition that if power is devolved to the sub-nationals or states, most, if not all, of our problems would be solved. It has also brought to the fore the need for state governments to step up their game. A quick review of how a change in the 1999 constitutional provision and a new electricity act has necessitated a change in the role of state governments in electric power sufficiency is essential for clarity.

    Electricity has always been on the concurrent legislative list. It was so under the 1963 and 1979 constitutions. However, the 1999 provisions on the concurrent federal and state legislative powers over electricity were drafted in a way that made it impossible for states to make laws to establish their electricity markets and play a pivotal role in addressing power shortages that have literarily crippled our economic growth. Eventually, in 2023, the National and State assemblies came together to amend the 1999 constitution and remove the constraints that challenged enacting state laws on electricity. This was followed up by enacting a new Electricity Act, 2023, which allowed states to regulate electricity generation, transmission, and distribution businesses within their territories. The act created two electricity markets, the national and state markets. The National Electricity Regulatory Commission (NERC) from Abuja will regulate the national electricity market, while the states are expected to implement electricity market policies, legal frameworks, and institutions to regulate their respective state electricity markets.

    One takeaway from the current state of the anaemic electricity supply nationwide is that states cannot continue to wait for the federal government alone to resolve the challenge. The states now have the full constitutional authority to create the frameworks for the adequate electricity supply to their citizens. They now have the power to create the right environment to attract investment into this new electricity market and ultimately raise the national power-generating capacity from the embarrassing levels at which it is currently. The current situation where the country generates less than 4,000 MW of electricity for 220 million people, but the same people own and operate over 50,000 MW of self-generation or generator capacity, makes us appear unserious. Despite this 50,000mw self-generation, we still have epileptic power nationally, producing sub-optimally and far less than our potential. The epidemic of blackouts that has enveloped the nation in the past few weeks has challenged the proposition that if power is devolved to the sub-nationals or states, most, if not all, our problems would be solved.

    I will share my thoughts on why most state governments are not taking advantage of the new Electricity Act and should double their effort to get us out of this perennial descent into a permanent state of darkness. This is against the background of the abundance of gas in south-south and southeast states, massive potential for hydro in Southwest states and solar generation in the northern states. The significant reasons states fail to tackle the electricity problem and unleash economic growth in their states are fourfold: first, a lack of understanding of the need for and political will to fix the power problem from a state perspective. State governors prefer short-term infrastructure projects that give them political mileage and are transactional. The myth that electricity is the centre’s problem has shaped state leaders’ thinking for too long. The second is the lack of qualified and competent human resources to drive policy and serve as regulators. Even the national regulator, NERC, had this problem in 2006 when they started, which is still so today. The third is the problem of implementation and enforcement of policies, laws, and agreements in the long term. Most investors have had to contend with violations of the sanctity of contracts and policy inconsistencies at the state and federal levels. The fourth reason is that states need more investment in technology and network infrastructure for electrification projects and for the ecosystem to become attractive to potential investors.

    Despite these challenges, there is some silver linings in this dark cloud. Recently, I had a long engagement with the governor of Enugu state around power. Enugu state has taken the bull by the horns and has not only enacted its state policy and law but has already set up its regulatory body comprising experienced hands who have experience working in NERC, discos, or industry consulting firms. The Enugu Electricity Regulatory Commission is now on the verge of issuing its first licenses to private investors. There is no doubt that Enugu is on the path to energy self-sufficiency, which will, in turn, unleash her economic growth potential. States like Lagos, Oyo and Ogun, Kaduna, Kano, Anambra, Abia, Rivers, Taraba, and Plateau, where there is a significant advantage in terms of availability of commercial/industrial markets and availability of fuel sources such as natural gas, hydro and solar have no reason to be slow about following in Enugu state’s footsteps.

    The inference from the preceding is that both political devolution and electricity devolution require political will and an enabling economic environment. An economically unviable state will remain a nightmare as it cannot demand or pay for electricity. Industrial and commercial markets for power are a prerequisite for investment in the power sector. Investors will only come if the electricity market exists. In this regard, only 30% of our states can attract investors to the power sector. Nigeria has long struggled with electricity supply issues, leading to frequent blackouts nationwide. Several factors contribute to the current blackouts and power outages, the most reoccurring narratives being grid disruptions, failing distribution infrastructure and, topmost, short supply of gas due to debt and other commercial reasons.

    Therefore, the federal government still has a crucial role in the power sector to drive social and economic development on a national scale. It must create the right ecosystem to spur investment in electricity infrastructure, including building new power plants, upgrading existing ones, and expanding the transmission and distribution networks. This requires both public and private sector involvement, as well as partnerships with international organizations and investors. It must champion the diversification of energy sources, especially renewable energy, such as solar, wind, and hydroelectric power, which provide a more sustainable and reliable electricity supply.

    The current state of the anaemic electricity supply in Nigeria, as experienced in the blackouts of the past few weeks, calls for a new approach. Nigeria’s blackout problem is not just a technical issue but a combination of human capacity challenges and systemic inefficiencies requiring urgent and comprehensive solutions. The flickering lights of Nigeria are a stark reminder of the urgent need for visionary leadership at the federal and state levels in the energy sector. We must never forget that blackouts are not just inconvenient interruptions; they’re crippling barriers to progress and development.

    The current national blackout should be a wake-up call for states of the federation to wake up from their complacency and speed up the process of playing a pivotal role in energy sufficiency. State governments must avail themselves of the incredible opportunity the new Electricity Act provided them and at least provide the building blocks to electricity sufficiency and efficiency in the states.

  • Food security: The Bago challenge – By Dakuku Peterside

    Food security: The Bago challenge – By Dakuku Peterside

    Against the run of play, Governor Mohammed Umaru Bago of Niger State ruffled feathers with his speech at the 2023 annual Leadership Newspaper Conference and Awards held in Abuja last week. This speech was an instant hit online and trended at different times on both Instagram and X (Twitter).

    Governor Bago’s arguments in his speech can be summarised in three ways: First, as a nation, Nigeria cannot achieve economic freedom and eradicate poverty without being productive, especially in agriculture, where we have a comparative advantage.

    Second, it is indefensible for a nation with an estimated arable land of 40 million hectares and a reasonable youth population to accept grain donation in whatever guise from war-torn Ukraine; and third, because of natural and human endowment, Nigeria can feed the people and export the excess to other countries.

    There is nothing Governor Bago said that we do not already know, but as a nation, we have egotistically refused to accept these truths nor act on them. These arguments are significant because they were made by a serving Nigerian governor, a member of the powerful club that has enjoyed the monthly sharing arrangement called Federation Account Allocation Committee( FAAC).

    Governor Bago ended his speech by throwing a challenge against the Federal Government’s promise to deploy and distribute 42,000 MT of grains from the strategic reserve, that the Niger State Government will deliver and distribute 100,000 MT of grain by June 2025.

    Make no mistake about it, Governor Bago was not just exercising his bragging right; he was marketing his strategic plan to rescue Niger State from the sharing mentality, economic doldrums, poverty, unemployment,and criminality.

    A quick review of what the Niger State Government is doing to accomplish the vision of food sufficiency might give us a better perspective.

    Niger State, over the next year, plans to cultivate one million hectares of farmland, inclusive of a 50,000 hectares fully irrigated food production hub. Over 500 large-capacity tractors, 1000 pieces of irrigation and agricultural equipment, 2000 power tillers for smallholder farmers, 2000 petrol water pumps, 3000 solar pumps, and 5000 tube wells to support dry season farming have been delivered.

    Besides, the government has acquired about 100,000 bags of fertilisers, plus herbicides, pesticides, and fungicides have also been obtained. Governor Bago’s commitment to this agricultural revolution in Niger State is self-evident and realistic.

    Governor Bago’s challenge in his speech and what he is doing in Niger State is founded on solid historical precedence and economic reasoning. Before we discovered crude oil in commercial quantity and started depending on it as a mono-product, which made us lazy in thinking, diminished the value of hard work, and elevated monthly sharing of FAAC to a religion of sorts, sub-national governments (regional governments) relied solely on agriculture to develop the regions.

    Some of the iconic infrastructure projects were executed with groundnut, cocoa and palm oil money. The choice of agriculture as an engine of economic growth was because of its multiplier effect. It has an excellent capacity to create employment and wealth.

    Those reasons are still valid today. The neglect of agriculture and the food production supply chain led Nigeria into many of the economic malaise we are suffering today – from food insecurity, unemployment, criminality and poverty to a dearth of foreign exchange. Some countries that were our contemporaries developed their food production and supply, which became the mainstay of their economy.

    Governor Bago’s speech represents a significant shift in thinking in recent times, giving some hope. Some state governments have started making efforts towards creating a clear vision of increased productivity, providing an enabling environment for such productivity, and building on this productivity to improve their internal revenue generation.

    These governors are using food security in Nigeria as fuel to engage in food production in a way that has not been done in Nigeria for a long time. They understand that the question of food security in Nigeria starts with food production, then food processing, food distribution and food commercialisation, both locally and abroad.

    But first and foremost, ramping up food production is the first step in tackling the food insecurity conundrum. It is a matter of how much food Nigeria produces. It is determined by what individual states bring to the table. In that regard, the message of self-reliance from the Niger governor is on point. Production of food for local consumption and export is vital for Nigeria’s economy because it solves two significant problems that have recently thrown Nigeria’s economy into a wild spine – food inflation and scarcity of foreign exchange.

    Increasing our productive capacity and, by extension, enhancing our internally generated revenue is imperative. States waiting to go to Abuja to pick up peanuts monthly is not sustainable.

    States, by the design of the 1999 Constitution, ought to be growth centres – actively participating in production and creating the institutional framework, structures, and environment to make this possible.

    However, only a few states have taken advantage of this vantage position to lift their people out of poverty. Most states function as salary payment centres. This must change if any meaningful development strides will take place in Nigeria. The era of states becoming a leech on the centre, milking the Nigerian state dry, is over. Every state must look inward and decide the best path to economic progress.

    Each state must have the mentality that if the tap of crude is switched off today, how will it become sustainable? This calls for chief executive officers of the states (governors) to wear their thinking caps now, holistically review their productive comparative advantages, develop an audacious strategic plan, and execute such to achieve a clear vision for the state. Anything less than this is not acceptable to Nigerians.

    The idea that consistent productivity at the sub-national level is one critical ingredient among many ingredients that will get us out of the economic mess we found ourselves in is more germane today than ever.

    The significance of this statement is that state governments are responsible for figuring out the best strategy to make their states viable and contribute to wealth creation and employment generation. Each state must tap into their  comparative and competitive advantage to contribute to the national food basket.

    A strategy for economic viability will require dealing with internal security issues coupled with medium- and long-term planning. The most crucial short-term action critical to agricultural production presently is to provide security and a safe environment for such economic activities to occur. The states must make farming safe and allow farmers to return to their farms without fear of attacks from bandits or terrorists. Insecurity is a great headwind against agricultural productivity.

    Agro-industrialisation is crucial in massive food production and increases local revenue and foreign exchange generation. We are embracing new agro-technology and jettisoning old agricultural practices that have provided suboptimal productivity over the years.

    This is also a time to bring real entrepreneurs into the food production and processing value chain. State governments should leverage various public-private partnership investments available to bring in seasoned investors and ‘agropreneurs’ to work together to put in place modern mechanised agricultural facilities for the mass production and processing of food.

    Recently, I had a long discussion with the Governments  of Edo, Jigawa , Nasarawa  and Akwa Ibom State who are leading in this new PPP arrangement and are collaborating heavily with the private sector (both local and foreign) to produce food for all and revenue to the state and our economy. I could feel a new mindset away from “sharing mentality”.

    Still on Agro-Industrialisation,Agricultural exports accounted for about 90% of Nigeria’s foreign exchange earnings in 1960. In quarter one of 2023, three products alone, Cocoa seed, sesame, and cashew seed, even without maximising our potential, gave the country N297billion. In 2022, Malaysia’s gross domestic product from palm oil export was estimated to be 36 billion Malaysian ringgit (approximately USD 8 billion).

    Governor Bago has thrown an open challenge to the Federal Government and his fellow state governors. There is a need for constructive engagement and healthy competition around subnational food productivity.

    Most importantly, the food imperative allows some states to improve their domestic revenue situation. Agricultural productivity has become an economic lifeline for the states, especially in the north. Kofi Annan argued that “Food security is not only a moral issue but also a strategic one: without food, people have only three options – they riot, they emigrate, or they die. None of these are acceptable options.”

    The fight against poverty, unemployment , hunger and malnutrition is one of the most significant challenges of our time, and it’s a challenge that can be won in Nigeria. Nigeria can work towards achieving food security applying the essential spirit of Bago’s challenge. Quality and affordable food is the fundamental to Nigeria’s development. We must take care of the basics before travelling to the moon. Nigeria’s development hinges on this!

  • High cost of government, low outcome – By Dakuku Peterside

    High cost of government, low outcome – By Dakuku Peterside

    President Bola Ahmed Tinubu has taken both symbolic and structural actions to demonstrate his belief that the current high cost of government is not sustainable. The first was an announcement or executive order directing Ministries, Departments and Agencies (MDAs)to slash the size of official delegations for foreign and domestic trips by up to 60 per cent – an action that resonated with the mood in the country.

    The second is the Federal Executive Council’s approval to implement Steve Oronsaye’s report on the merger and scrapping of MDAs. This structural action is a baby step, albeit good for proponents of a complete overhaul of government structure . Both measures are more symbolic than substantive.

    However, it clearly shows that the government realises the negative impact of high government costs on economic growth and providing services to the people.I acknowledge as a fact that a US type presidential system tends to be big by constitutional requirement. And  in a country where government is both an industry and a social welfare institution, the tendency for big expansive government is high.

    Beyond the symbolic actions, which have their values, is the need for substantive actions and a complete attitudinal change towards waste and profligacy in government.

    We have had enough debate on the  unwieldy and inefficient size and structure of government, our leaders have enough ideas  and justifications to prune down the size of government. The only ingredient left to make that happen is the political will.  I can imagine the government is caught between a public opinion pressure to cut costs and a constitutional imperative to assemble a huge choir.

    On attitude, most government officials have yet to come to terms with the reality of our economic downturn and the need to be more disciplined, prudent and productive .The signals from high officials of government are both depressing and insensitive. For these reasons, we are focusing today on those little acts of prudence that we do every day and, over time, will make a substantial difference.

    Political officeholders must have an attitude change in ostentatious living and craving for opulence and status within the society.   It is obvious to all that the pomp and festival of political office attracts a mob of political hangers on whose presence bloats government costs. Trimming that is a matter of personal choice and strength of character.

    In our clime, politics and wealth are almost synonymous; politicians compete and outcompete wealthy people in a show of wealth and power. The blaring of sirens and long motorcades of expensive and luxury SUVs conveying our political office holders in federal, state, and LGA is almost becoming a public nuisance and separating them from the people they should serve. Cutting down on this lifestyle is long overdue. This attitude flies in the face of our current reality, where many suffer and struggle for the basics. Frank Herbert, American Writer, argues, “Good governance never depends upon laws but the personal qualities of those who govern. Government machinery is always subordinate to the will of those who administer that machinery.”

    We expect attitudinal change among political officeholders on abuse of official property, including official vehicles assigned to them. Many use this as personal property and sometimes even allow family members and friends to damage these properties. We must also jettison the culture of assigning many security attachés to VIP and political office holders. We know the security situation in the country is dire but wasting the existing security personnel and apparatus on a few political officeholders when many Nigerians need these security officers to work to secure their lives and properties is deplorable. Just as political officeholders’ lives matter, so do the lives of ordinary Nigerians.

    It is disheartening that some of the political officeholders are still in a permanent political campaign mood, not knowing it is time to govern. They spend ten times the cost of a single project on project flag off or commissioning.  Corruption is  still pervasive, and mismanagement of public funds exacerbates the high cost of government. Funds allocated for public projects and services are diverted, budgets are padded, and fiscal prudence is thrown to the dogs. The level of corruption among public officials is still alarming and must be challenged and exposed, and perpetrators made to account to the law for their dastardly acts.

    Some structural changes and constitutional amendments  are needed to cut down on the cost of governance in Nigeria. Cutting down on our bloated bureaucracy is essential to save costs. This is the aim of implementing the Oronsaye report. The government should reduce the number of  political appointees and close inefficient public enterprises that incur losses that the government eventually covers. We cannot preach the message of fiscal prudence when the number of political appointees gets  bigger every year.

    Efforts have been made in Nigeria to address the high cost of governance, such as implementing cost-cutting measures and promoting transparency. However, achieving substantial changes requires a comprehensive and sustained approach, including structural reforms, anti-corruption efforts, and a focus on improving public sector efficiency. Addressing the issue of high governance costs is crucial for ensuring that resources are allocated efficiently to promote economic development and enhance the standard of living for the Nigerian people.

    More disheartening is the fact that the high cost of government has not translated to administrative efficiency,quality services or high policy outcomes. Nigeria’s government effectiveness index for 2022 is -1.04, one of the worst globally. The index of government effectiveness captures the perception of the quality of public services, the effectiveness of implementing government decisions, the innovation capacity of political leadership, public healthcare, and public schools, amongst others. The maximum score is +2.5, and the minimum score is -2.5.

    Our budget and expenditure on critical sectors such as education and healthcare , by percentage, has not improved over the years. The spending has also not delivered on indices. Our maternal mortality ratio is still at 814 per 100,000, while the mortality rate for infants and children under five years is 70 and 104 per 1,000 live births, respectively. This is one of the highest globally.

    I recently had a two-hour discussion with the Minister of Health, Prof Ali Pate, and the Minister of State for Health, Dr Tunji Alausa. Their clarity of vision, grand strategy and commitment have raised my hopes and expectations for the healthcare sector. Watch out for a different trajectory  in this sector in the immediate to near future.

    The education sector indicators are similar. Government expenditure on primary education for year 2022  is below 0.5%, the ratio of trained teachers in primary school is 62.18, and the pupil-trained teacher ratio is 49.1, all below the West African regional average. According to the USAID dashboard, the enrollment rate and government expenditure at secondary schools are also below the regional average. This abysmal data is coming out of the same country that borrows to fund the lifestyle of government officials. Nigeria and Nigerians are stranded between poverty, insecurity, dearth of infrastructure and profligacy of government officials. These statistics speak volumes and are better than any propaganda that means nothing to the average citizen.

    Addressing Nigeria’s high government cost requires a multi-faceted approach involving structural reforms, fiscal responsibility, attitudinal change and increased transparency. I will articulate a few solutions that we may have to consider in reducing the cost of government. Apart from the obvious answer of fighting corruption, wastage, profligacy and implementing measures to enhance transparency in public financial management, procurement, and project execution to curb corruption , the government should first undergo a more thorough public sector review than just adopting some part of a report authored over ten years ago and may not fit in with our current realities. The government should comprehensively review its structure, eliminating duplications and streamlining ministries, agencies, and parastatals to reduce bureaucracy. This is urgent.

    Second, implement a rational and transparent salary structure for public officials, aligning remuneration with economic realities and the country’s financial capacity and regularly review same  and ensure competitiveness. Third, introduce cost-cutting measures in government operations, such as reducing unnecessary travel expenses, minimising overhead costs, and optimising resource allocation. Fourth, embrace  e-government through technology to enhance efficiency in government processes, reducing paperwork and associated costs. Fifth, develop a sustainable debt management strategy to reduce reliance on borrowing.

    Sixth, implement and enforce fiscal responsibility laws to ensure that government spending aligns with budgetary allocations and regularly review and update budgetary priorities to reflect changing economic conditions and development needs. Finally, encourage citizen participation and oversight through platforms allowing the public to monitor government spending, hold officials accountable, and foster a culture of fiscal responsibility and transparency through public awareness campaigns.

    Implementing these solutions requires strong political will, commitment from government officials, and collaboration with various stakeholders. Mr President has started to address the elephant in the room of inefficient government structure, but should take a step further by empaneling full e-governance . He would also gain the trust of the people and mileage by leading by personal example on attitudinal change of government officials . The country just needs champions of fiscal discipline and probity.

  • The political economy of cement – By Dakuku Peterside

    The political economy of cement – By Dakuku Peterside

    Cement and concrete are synonymous with strength ;the strength of the economy and infrastructural development. Cement is specifically an indicator of how we prioritise housing, roads, and other infrastructure projects that rely on it. When cement prices go up consistently, it reverberates across the country, sending cold chills down the spines of many. It means fewer people can afford homes, a fundamental human right. Although cement is just one ingredient in the construction industry, it has come to represent the industry itself, so the affordability of cement represents the affordability of houses and other concrete-based constructions. To millions of Nigerians who are nursing the hope of owning their own homes, an increase in the price of cement threatens that hope, and in a country where hope is the only viable anchor against many debilitating odds, there is outrage and panic among many. Besides the link of cement to our collective psyche of home ownership, cement is also about the construction industry, public works,local manufacturing industry, and the employment it generates.

    The current cement price hike is indicative of the economic degradation of Nigeria and the complexity therein. It showcases the interconnectivity of a nexus of factors that come together to have a stranglehold on our economy and how the government tackles the problem of excessive hikes in cement prices often is a case study of the government’s dominant reactionary approach to solving sensitive social issues and a metaphor for wrong application of policy in our society. It also indicates how the government misdiagnoses problems and applies inappropriate treatment at the policy level.

    In a mixed economy like ours, the government plays a crucial role in shaping the economy, and in some cases, it is the highest single stakeholder in some sectors of the economy. The government is a primary consumer in the construction industry because of the many infrastructural projects it builds. Therefore, the government is a significant stakeholder in cement. Nevertheless, its primary role is to create an enabling environment for the market forces to play their role in determining the cement price while ensuring that the regulatory framework constrains the market arbitrariness. This is more preventive than reactionary. However, when the systems and structures put in place to guide the market fail, the government is expected to intervene in the interest of society. This intervention must aim to produce public value by diagnosing and solving problems appropriately. Appropriate diagnoses are pivotal to applying the correct measures that bring sustainable solutions. We miss the point when government officials act like elected kings, using maximum coercive powers to solve a problem that requires thinking and collaboration. Cement is a case in point.

    The price of cement, using a 50kg bag as an indicator, between May 2023 and January 2024, a period of about six months, has increased from N4,250-N4,500 to N12,000-N13,000. This is an increase of between 100% to 200%. Almost all construction industry segments reacted to this astronomical rise in price. There was a public uproar, and the government applied three knee-jerk reactions: the first was to threaten the cement producers to bring down prices or face dire consequences; the second was a threat to open the borders and allow massive importation of cement to flood the market and force the price down; and the third is another threat by the legislature to probe the reasons for the escalating cost of cement. This is indicative of the mindset of our government officials. But realistically, we cannot solve problems by threatening everybody.

    The most critical underlying factor in the cement price hike albatross is that the government is caught between protectionism (protecting the local cement industry) and trade liberalisation to curtail prices. The politics of the recent cement price hike goes beyond the fractures in the Nigerian economy. There is a perception of the politics of cement monopoly. The Obasanjo presidency initiated a policy of selective protectionism on certain items to protect local industries. Things like cement, fruit juice drinks, pasta and sugar benefited. This enabled significant industrialists to set up enormous plants for these items. There was an unwritten understanding behind these concessions about these local investors reciprocating by keeping prices in check. The belief is that allowing international competition would have modulated the local costs of these items, but the quasi-monopoly policies protected them. This is another dimension of the challenge that the government needs to untangle.

    On the other hand, cement manufacturers have raised fundamental issues that need appropriate diagnosis and solutions proffered. Issues raised by cement manufacturers are grouped into 5: first, with the general paucity of power in Nigeria, almost all manufacturers generate their own energy, and many rely on gas. Despite being a gas-endowed nation, it is simply unavailable – a paradox of plenty. The available gas is denominated in USD and the price has increased by over 300% in the past 6 months. Second, Cement production relies on many imported inputs such as gypsum, machinery, excavators, explosives to blast the mines, spare parts, and propylene to produce bags, all of which are imported using USD. The foreign exchange is just not available, and the USD volatility against the Naira has not helped matters. Third, customs duties are indexed in USD, and lately, it has moved from 450/USD to 1700/USD in just a few months, a more than 300% increase. Fourth, the cost of diesel, which is critical in the transportation of cement and for excavators to mine limestone, has tripled over three months. Fifth, the unfriendly operating environment characterised by corruption, strangulating bureaucracy and  multiple taxation is devastatingly affecting the industry.

    Addressing this issue requires a comprehensive approach involving various stakeholders. A starting point for diagnosis of the challenge is to find out why gas is not available, why we cannot transport cement by rail, what can be done on the matter of foreign exchange components in the cement production sector, tax harmonization, General insecurity, and undue bureaucratic interference to complex issues of market forces. Any solution that does not address these is, at best, jaundiced and unsustainable. It is myopic to think that the government will ignore the significant external and internal intervening variables underpinning the excessive hike in the price of cement, whip the industry to an agreeable price, and assume the problem has been solved.

    All factors considered, because of the socio-economic impact of cement, the government needed to diagnose the challenge correctly, consult widely, and develop a sustainable policy solution. The impression I get is that this is not the case . The way we are going, many manufacturing concerns in the country will go down unless something is done about FX, operating environment, import duty, power and, most importantly, corruption. If cement prices continue to skyrocket, the cost of public infrastructure will escalate, many will lose their jobs, and the nation will be thrown into further economic depression. There may not be a straight answer to resolving the paradox of cement price hikes, but it is urgent and imperative that a holistic approach to tackling the problem is followed.

    It’s important to note that addressing the high cost of cement requires collaboration between the government, industry players, and other stakeholders to implement sustainable and practical solutions. The government must work with the cement industry to develop policies that stabilise prices and prevent unnecessary fluctuations. It must enforce policies that ensure fair competition and avoid price gouging. It should encourage healthy competition in the cement industry by promoting new entrants with requisite capacity , preventing monopolies, and streamlining the regulatory processes to make it easier for new players to enter the market. It should invest in infrastructure development to improve transportation networks and reduce the cost of transporting raw materials and finished products. Put mildly, the government must create an external environment that is business-friendly.

    The cement industry on the other hand must  implement energy-efficient technologies to reduce operational costs and explore alternative and renewable energy sources to power manufacturing plants. They should invest in research and development to find innovative and cost-effective methods for cement production and explore new materials or processes that could be used as alternatives to traditional cement. They should encourage using local materials and resources to reduce dependence on imported inputs and support the development of a robust local supply chain for raw materials. They should desist from arbitrary increases in price just for the sake of maximising profit, especially given the concessions the government has given by protecting the industry from foreign competition.

    Our housing and infrastructural needs are enormous. A country of over 200 million people needs cement to build houses for people and construct basic infrastructure. The high cost of cement can only exacerbate the paucity of delivering on these essentials. Therefore, all stakeholders must work collaboratively to ensure the availability of cement at affordable prices.