Sunday, April 22, 2012

Oronsaye’s Merger and Acquisition’s Proposals


On Monday, April 16, 2012, the long awaited report of the Presidential Committee on Restructuring and Rationalisation of Federal Agencies, Commissions and Parastatals headed by Mr. Stephen Oronsaye was submitted to President Goodluck Jonathan.  The committee which was inaugurated on August 18, 2011 was mandated to: study and review all previous reports on similar exercise; examine the enabling Acts of all MDAs and classify them into various sectors; examine critically their mandates and make appropriate recommendations to either restructure, merge or scrap; and, advise on any other matters, which may be relevant to the desire of government to prune the cost of governance.

While summarizing his 800 page report, the committee noted that: “It is a fundamental breach of acceptable practice of good public sector governance to create a new agency or institution as a response to the seeming failure or poor performance of an existing agency in order to suit political or individual interests.  Such a practice has proved eventually to precipitate systemic conflicts, crises and even collapse at a substantial but avoidably high financial cost to government.” The presidential committee noted further that: “The long-standing challenges that beset the Nigerian public sector, including the parastatals, have created a ‘single story’ of inefficiency, corruption, poor work environment, low morale, ineffectiveness, deceit and low productivity, thereby establishing a perception of a dysfunctional and unproductive public sector…where it is unable to perform its legitimate functions creditably.”

Oronsaye committee proffered four ways to immediately tackle the high cost of governance. These include: “Reduction in the number and size of the governing boards of parastatals; Linking the budgetary system to deliverables and output; Implementation or vacation of some decisions taken on past reports; and Removal of all professional bodies/councils from the national budget.” The committee established that at present, there are 541 government parastatals, commissions and agencies (statutory and non-statutory). 263 of these are statutory agencies which it recommends being reduced to 161. To achieve this, the committee proposed the abolition of 38 agencies, merger of 52 and reversion of 14 to departments in ministries. The rationale being that there were “duplications and overlaps in the mandates of many parastatals and agencies…without regard to existing laws and, in some cases, out-rightly replicating extant laws.”

For instance, Economic and Financial Crimes Commission and Independent Corrupt Practices and Other Related Offences Commission were alleged to have usurped the role of police. It is noteworthy that there exists in police commands Special Fraud Units which can be strengthened to take on the role of EFCC and ICPC. FRSC is accused of duplicating the functions of the Department of the Highways of the Federal Ministry of Works and that of Nigerian Police.  Other agencies cited doing overlapping functions are the Nigerian Communication Satellite Limited, National Broadcasting Commission (NBC) and the Nigeria Communications Commission (NCC) in the area of frequency allocation. Presidency who proposed the executive bills to the National Assembly and indeed our parliamentarians who passed the Acts establishing these institutions are reprehensible for the mushrooming of these drainpipes called Commissions.

As an antidote to the undue proliferation of the agencies, the committee recommended the collapse of the Nomadic Education Commission and the National Commission for Mass Literacy, Adult and Non-Formal Education into the Universal Basic Education Commission because they all have to do with basic education. The committee also believes NTA, FRCN and VON should be under one management. In addition to calling for the mergers of some of these agencies, the committee also proposed that management audit should be conducted on 89 agencies with biometric data capture of staff as well as the discontinuation of government funding of professional bodies/councils.

In the Committee’s opinion, if its report was adopted and agencies reduced in accordance with the recommendation, the government would be saving over N862 billion between this year and 2015. The breakdown showed that about N124.8 billion would be reduced from agencies proposed for abolition; about N100.6 billion from agencies proposed for mergers; about N6.6 billion from professional bodies; N489.9 billion from universities;  N50.9 billion from polytechnics; N32.3 billion from colleges of education and N616 million from boards of federal medical centres.

I want to specially thank the Oronsaye’s committee for a splendid job. The committee actually hit the bull’s eyes with many of its proposals. My major concern is whether this report will not eventually be swept under the proverbial carpet like the previous ones. It is on record that similar conclusions have been reached by successive committees set up on how to reduce the cost of governance. Two of such was the Alison Ayida’s committee of 1995 and the Ahmed Joda Panel of 1999 which proposed scrap, commercialisation, privatisation or self-funding of many agencies. Unfortunately, these institutions which were recommended for scrapping are still being funded by government.

President Jonathan has taken the right step by setting up Mohammed Bello Adoke’s 10 member white paper committee same day as he received the report. Whether the Attorney General’s committee will not scuttle the good work done by the Oronsaye’s committee remains to be seen. There is no gainsaying that there will be intense lobbying of the Adoke’s committee to advise the government to reject some of the key recommendations. These advances should be rebuffed. Aside the white paper committee, the ability of President Jonathan to act expeditiously in implementing the government resolution will show if he means business about cutting the cost of governance. The president will also need to rally the National Assembly to earnestly amend or repeal the Acts of Parliament that set up many of the agencies earmarked for abolition or restructuring. I think that was not done in implementing previous reports which therefore made the affected agencies to continue to exist and receive government funding. Considering all that needed to be done, realistically, it will take sometime for us to reap the benefit of Oronsaye’s committee’s good work.

Additional ways the president should explore to condense cost of governance is by halving the presidential fleet of aircrafts and cars; reduction in the number of presidential and legislative aides and  auctioning the white elephant among the  over 11,886 federal government projects that dotted Nigeria’s landscape. It is also advisable for government to quit sponsorship of pilgrimages. During the forthcoming constitutional amendment exercise, the president should sponsor a bill to seek amendment to section 147(3) of the 1999 Constitution which makes it mandatory for the president to appoint at least one minister from each state. Nigeria does not need more than twenty cabinet ministers unlike the current fad where an unwieldy 42 ministers are appointed by the president.  President Jonathan should also look at reducing the number of Nigerian foreign missions while National Assembly must exercise utmost circumspection in creating additional agencies or commissions.  Above all, the president must strengthen all anti-corruption agencies inclusive of police and code of conduct bureau. It is an unassailable fact that corruption plays a big role in Nigeria’s soaring cost of governance as the unfolding pension scam has revealed.

Monday, April 16, 2012

CBN Suspension of Cashless Policy

The formal announcement on Monday, March 19, 2012 by Central Bank of Nigeria suspending its much touted cashless policy is a welcome development and shows the apex bank as respecting public opinion on the volatile issue. It is not only the suspension of the take off of the policy till January 1, 2013 in other parts of the country that is heart-warming, the fact that the withdrawal and deposit limit was also increased from N150, 000 to N500, 000 for individuals and N1 million to N3 million for corporate entities also portray the CBN as a responsive and responsible institution. Other measure announced by CBN was the reduction in the processing fees to be paid by customers who may wish to deposit or withdraw more than the approved amount.

The CBN’s plan to push Nigeria into a cashless society is aimed at reducing incidences of money laundering, terrorist financing and other economic and financial crimes. It is also aimed at lessening dependence on cash transactions while exposing bank customers to other means of electronic financial transactions such as Point of Sale (POS) terminals; Mobile payments; Internet banking; Online payments; Automatic Teller Machines; Instant Electronic Fund Transfers; Direct debit for regular-in-nature bills payments (e.g. Electricity bills, Pay-TV bills, Water rates.)

The pilot implementation of the policy in Lagos in the last three months has shown that the programme needs to overcome its teething problems. These include the challenge posed by inadequate information, communication technology (ICT) infrastructure; shortages of electricity; shortage of bank branches, Automated Teller Machines and Point of Sale devices; poor security systems and internet fraud; lack of access to banking services and the extra large informal sector. A CBN report has also been alleged to note that low literacy levels in some parts of the country, weak laws, low consumer confidence and insurance issues pose obstacles to implementing the cashless policy. To surmount the challenge posed by ICT, Association of Telecommunications Companies of Nigeria reckons that additional investments of $100 billion are required over the next five years to support seamless e-transactions.

From the foregoing, it is obvious that the challenges being faced by the operators in implementing this noble policy is daunting though not insurmountable. However, to overcome them, a lot of resources need to be mobilized to tackle the obstacles.
Whether the regulator (CBN) or the operators (banks and other financial institutions) have the humongous resources to make a success of the cashless policy remains to be seen. The way things stand; it seems the solution is going to be more expensive than the problem meant to be solved. Given the financial crises that have nearly crippled banking operations in Nigeria and many cost-cutting measures banks have had to embark on, where will they get the money to implement the cashless policy? They need to procure more of the e-banking platforms like ATM machines, PoS terminals, expand branches, train staffs, carry out sustained sensitization programmes across the country, purchase more power generators, inverters etc, all these will cost a lot of money which some of the banks operating in Nigeria may ill-afford.

True, the suspension of the nationwide roll-out date will give the financial institutions more time to prepare for the implementation of the policy. CBN should also look at where it can help the operators to cushion the effect of the enormous resources to implement the policy. A bail-out may be considered. If this will not happen, a longer period may be considered for take-off of the policy. However, we should not also lose sight of the incentive CBN has given to the bank customers by increasing substantially the limit of the amount that can be deposited or withdrawn daily. Kudos to the Central Bank of Nigeria!

Thursday, April 12, 2012

Parenting in 21st Century Nigeria

We have not completely fulfilled our responsibility as parents until we bequeath to our children a love of books, a thirst for knowledge, a hunger for righteousness, an awareness of beauty, a memory of kindness, an understanding of loyalty, a vision of greatness and a good name. - William Arthur Ward

Parenting is a very challenging obligation, no doubt. Child rearing is energy and purse sapping. Children’s needs are endless; they want comfort, attention and the best of everything money can buy. Modern civilizations have exposed them to a world of fantasies which many parents can ill-afford. William Arthur Ward in the opening quote imposed eight duties on parents: First is love of books. How have we fared as parents on this count? Statistics showed that there are over 10 million out of school children in Nigeria. Even those who are enrolled in schools, what manner of education are they exposed to? What is the quality of education imparted on our children? In Nigeria, public schools are nothing to write home about in terms of infrastructure and quality of teaching. Recently, in Bauchi State, out of the 12, 864 teachers screened, 5,502 were found not to be qualified or possess requisite teaching skills. That is almost half! The situation with private schools is not much different. Many of them too engage unqualified teachers to teach. Where they are qualified academically, they lack the professionalism required of trained teachers. Children themselves do not want to read. They prefer watching to reading. They will rather watch cartoons or play computer games than read their books. Little wonder the nation has been recording abysmal performances in her schools external examinations?

The inimitable Dr. Nnamdi Azikwe of blessed memory, many decades ago, observed thus: “In the war against ignorance and superstition, education should be regarded as a birth right of every Nigerian. The State should trifurcate this basic right into three segments: Religious Education should instill in our children moral values and ethical conduct in their relationship with fellow human beings; Vocational Education should train our offspring to be knowledgeable and acquire skill to adjust themselves and earn an honest living in the struggle for the survival of the fittest, Continuing Education should make them adaptable to their environment and inculcate in them the idea that education is a continuous process throughout life” Spot on you would say, however, on these three counts how have we fared? Do we give our children the right religious education? This question is germane because the ‘troublers’ of Nigeria today are ideologues who have brainwashed their followers to believe that Islam is the only way to heaven and that Sharia practice is non-negotiable in all the Northern States.

Paradoxically, some schools are de-emphasizing praying during assembly sessions while religious education is taking backseat particularly in Christian homes. In many, family altars have crumbled. Why and how? Economic struggles have made many parents to leave home early and return late. In some homes, parents don’t get to see their children until weekend or public holidays. Thus, the only time and place children are exposed to religious education are on Sundays at the church. This is not good enough. The challenge of making ends meet is also partly responsible for why parents don’t have time to impart moral trainings in their wards and children. In those days, after a hard day’s work and dinner, children gathered to listen to tales by moonlight from their parents. During this session of oral history; fables, folklores and animal stories are shared and lessons drawn from the stories. These are subtle ways by which children are impacted with mores, values, ethics and social etiquette. All these salutary practices have disappeared as parents engaged in a rat race to meet family financial demands.

A letter purportedly from former American President, Abraham Lincoln to his son’s teacher read thus:
“He will live to learn, I know that all men are not just, all men are not true. But teach him also that for every scoundrel, there is a hero, that for every selfish politician there is a dedicated leader. Teach him that for every enemy there is a friend. Teach him that a dollar earned is of far more value than five found. Teach him to learn to lose and also to enjoy winning. Steer him away from envy if you can. Teach him the secret of quiet laughter. Teach him the wonders of books, but also give him time to ponder the eternal mystery of birds in the sky, bees in the sun, and flowers in the green hillside.

In school, teach him that it is far more honourable to fail than to cheat. Teach him to have faith in his own ideas even if everyone tells him they are wrong. Teach him to be gentle with gentle people and tough with the tough. Try to give him strength not to follow the crowd when everyone is on the bandwagon. Teach him to listen to all men but teach him to filter all he hears on a screen of truth and take only the good that come through. Teach him how to laugh when he is sad. Teach him there is no shame in tears. Teach him to close his ears to howling mob and not to stand and fight if he knows he is right.

Teach him gently but do not cuddle him because only the test of fire makes fine steel. Let him have the courage to be impatient, let him have the patience to be brave. Teach him to always have sublime faith in his creator and faith in himself too because then he will always have faith in mankind.

This is a big order but please see what you can do. He is such a fine little fellow, my son!”

I don’t know how many people have come across this so called letter but I find it very instructive and didactic. Only that many of the things Abraham Lincoln expected his son’s teacher to do are what we as parents need to do ourselves. Family is the first point of socialization before schools. Many parents expects too much from their children’s teachers forgetting that these children actually spend more time at home than in the schools. The challenge before us as parents is to strike a balance among many other priorities.

Like Gabriella Mistral rightly observed:”We are guilty of many errors and many faults but our worst crime is abandoning the children, neglecting the fountain of life. Many of the things we need could wait - the child cannot.”

Monday, April 2, 2012

Senegal 2012 Presidential Poll: Lessons for Nigeria

"On this day, the 25th of March 2012, at 9:27 p.m., President Abdoulaye Wade, a candidate in the presidential election, called President Macky Sall to congratulate him for having won the election and to wish him good luck in his mission at the head of Senegal in the hopes that he will render the Senegalese happy. In this way, Senegal, through a transparent election, has once again proven that she remains a great democracy, a great country." – Spokesman to outgoing President Abdoulaye Wade of Senegal, Serigne Mbacke Ndiaye.

Following the precedent established by his predecessor in office, President Abdoulaye Wade last Sunday, March 25, after a bitter but peaceful run-off presidential election, conceded defeat to his protégé and former Prime Minister Macky Sall who had defeated him by a margin of 65.80 percent to 34.20 percent. This rare gesture was first exhibited by former Senegalese President, Abdou Diouf on March 19, 2000 after the presidential runoff between him and the incumbent, Abdoulaye Wade. Diouf had ruled Senegal for two decades like his predecessor and first president of the country, Leopold Senghor. Macky Sall will be Senegal’s fourth president since getting her independence from France in 1960. It is pertinent to take few reactions to the heart-warming development in Senegal which happened to be the only country in West Africa yet to taste the bitter pill of military coup even though Wade was accused of orchestrating a constitutional coup by reneging on his promise not to do more than two terms.

According to our President, Goodluck Jonathan, Macky Sall’s election is a “victory for democracy and just reward for all Senegalese people who kept faith in the democratic process and voted responsibly in what has proved to be a watershed election. The Senegalese people have confirmed that theirs is a mature democracy built on freedom and respect for rules and laws. If there was ever any doubt, this election has proved that the foundation of Senegalese democracy is rock solid. This is good for the Senegalese people and also for our sub-region, especially at a time one of our brother countries is facing grave challenges to constitutional order,” AU Commission chairman Jean Ping said the peaceful conduct of the presidential elections "proved that Africa, despite its challenges, continues to register significant progress towards democracy and transparent elections". To President Nicolas Sarkozy of France, the poll signifies “good news for Africa in general and for Senegal in particular".

A runoff became imperative after Wade fell short of the majority needed to win in the first round on February 26, taking 34.8 percent of the vote. Sall, a 50-year-old who served as Senegal’s prime minister from 2004 to 2007, won 26.6 percent. Sall’s landslide victory in the run-off was made possible by a number of factors. One is Wade’s many political and economic ‘sins’ among which were his attempt to rush a law through parliament that would have reduced the percentage a candidate needed to win on the first round from 50 to around 25 percent; decision to seek a third term in office; rising costs of living; high unemployment and increasing share of power to his son Karim, who is mockingly tagged "the Minister of the Sky and the Earth" after he was handed control of multiple ministries including infrastructure and energy.

The second major factor is the formation of a coalition called Benno Bokk Yakaar, or Grouping of Forces for Change in the Wolof language. This alliance consists of 12 of the 14 candidates who ran in the first round. It brought together civil-society groups that organized the anti-Wade protests, such as Y’en a Marre and Mouvement 23, as well as Grammy award- winning singer Youssou N’Dour, whose candidacy was invalidated by the Constitutional Court on a technicality. This is a lesson for Nigeria’s opposition parties. If the other contestants in Senegalese presidential elections did not throw their weight behind and mobilize their supporters to vote for Mack Sall, his dream of winning would have been a mirage, a pipedream. This is what Nigeria’s opposition parties failed to do during the 2011 presidential polls. They were too fragmented and egocentric to unite against the Peoples Democratic Party which many of them alleged has not performed creditably well in fulfilling many of its electoral promises.

Even though there was pre-election violence during which six people were alleged to have died and about 150 people injured, Senegal did not witness any significant Election Day and post Election Day blues. Observers, both local and international reported an orderly and peaceful poll. This is exemplary and due largely to the maturity of the out-going President Abdoulaye Wade. There was no official report that Wade used the coercive power of the state to repress the opposition candidates. He didn’t get them framed up or kidnapped. Even during the month long protest against his candidacy, the Senegalese police were said to have used only tear gas and rubber bullets, not live bullets. This is very instructive. That Wade didn’t pressurize the Senegalese electoral commission to manipulate the outcome of the election in his favour is very commendable. The fact that he accepted defeat and called to congratulate his former Prime Minister also makes him a statesman in my estimation. He could have rejected the result of the election, like Laurent Gbagbo did against Alhassane Quatarra in Cote D’ Ivoire, and plunge the oasis of democracy into avoidable chaos.

Senegal has also once again joined the league of countries like Liberia (in 2005, George Weah vs. Ellen Sirleaf), Niger, Ghana and Cote D’Ivoire where the candidate that led in the first ballot lost to the opposition during the second ballot or run-off. As Nigeria embarks on a new constitutional alteration, our lawmaker should adopt a French model of first-past-the-post or majoritarian electoral system for executive offices like that of the President, Governor and Local Government chairmen. In a French majoritarian electoral system, a candidate needs to score 50+1 vote or absolute majority to become an outright winner. At present, in Nigeria, once a candidate scores 25 percent of votes cast in two-third of his constituency, he or she becomes a winner even if the cumulative vote is less than half of the total vote cast. If the Senegalese had adopted our own model, Wade would have won because he led other 13 candidates in the first ballot.

The new Senegalese president has his job cut out for him. As he gets sworn into office in April, he must endeavour to fulfill all of his campaign promises which include shortening the presidential term to five years from the current seven, and enforcing the two-term limit. He must not also forget his pledge to evolve strategies to reduce the price of basic foodstuffs as well as tackle rising unemployment and poverty in the land of the Teranga Lions. Senegalese must hold him to account on his promise to repair the damages done to Senegal's institutions by reinstating the checks and balances between the presidency, legislature and judiciary — which have become consolidated under Wade. Lastly, he must find the political will to deal with the conflict in Casamance region which has been going on for thirty years.