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Governance Reform in Nigeria: Imperative of a new national productivity paradigm

By Tunji Olaopa
27 May 2015   |   11:51 pm
THIS edition of the NISER Research Seminar Series (NRSS) could not have come at a better time. The focus on ‘Computing National Productivity’ brings to the fore, at this critical point in our national life, the challenge of calibrating a new productivity paradigm around which the task of good governance can be projected. We are…

OlaopaTHIS edition of the NISER Research Seminar Series (NRSS) could not have come at a better time. The focus on ‘Computing National Productivity’ brings to the fore, at this critical point in our national life, the challenge of calibrating a new productivity paradigm around which the task of good governance can be projected. We are in the middle of a significant political transition that we all hope will affect our governance trajectory, and the NISER team seems to have rightly inserted itself, in a fundamental manner, into the preparation at a most theoretic and practical levels.

The choice of productivity measurement as the theme for this seminar to interrogate is in a sense rooted in a deep sense of history. It brings to mind the NISER Conference of 1968 that was called to discuss post-war reconstruction and development. That Conference was significant for two reasons. The first was that it came at a period when Nigeria was faced with the prospect of reconstruction after the terrible horrors of the Civil War. The second reason is that the Conference presaged the evolution of the Second National Development Plan, and its vision for a post-independence Nigeria caught in the complexity of postcolonial existence.

Forty-seven years after that Conference and at moment of another critical historical transition, NISER has, with this seminar, recaptured the challenge of Nigeria of the 70s, which Prof. Wolfgang Stolper summed up as the tragedy of a nation that plans without fact. The glaring absence of a national productivity paradigm around which Nigeria’s governance trajectory can be computed as a strategy for mitigating a nascent culture of institutionalised waste in resource management merely today restates the predicament of the Nigeria of the ‘60s that plans without fact. Indeed, over three decades ago, Peter Drucker called our collective attention to the managerial truism that what is not measured cannot be managed. This implies that with this seminar, NISER is redirecting our attention to the critical missing link that must be confronted if we are to overcome the infrastructural gaps critical to national transformation.

But the bigger worry is that the challenge, which has been with us for so long in our journey as a nation, is still protracted. Productivity, or the lack of it, which is rooted in statistics is still a daunting national issue close to thirty years after NISER and Stolper raised the warning about its spectre. National productivity cannot even begin to take off positively until and unless we begin from the root issue of national planning, which in itself requires deep-seated rethinking as a corollary of the budgetary process and fiscal federalism. If productivity is the average measure of the efficiency of production and resource use in any nation, then we should really begin to worry about Prof. Stolper’s prophetic assessment.

Planning without vital productivity measures complicates Nigeria’s governance predicament. Good governance is premised on the capacity of the Nigerian state to efficiently and effectively provide adequate goods and services that will constitute the dividends of democracy for Nigerians. But then the task of governance itself has a subtle way of undermining the possibility of an effectively calibrated national productivity framework that affects governance, which raises the critical question: What are the challenges of national productivity that Nigeria faces?

There are four major indices of our productivity palaver: a) the challenge that Nigeria faces as a resource dependent mono-cultural economy being one of harnessing resource efficiency to accelerate growth in the economy; b) the fact that it is not the quantum of government spending that is at issue, the challenge is one of balancing rates of investment with returns on investment; c) the reality, that the average output of the Nigerian workforce reflects, unarguably, low marginal productivity of labour even as national productivity is much more than just labour productivity; and d) the indisputable truism, that given the relationship between productivity, performance and service delivery on the one hand, and the fact that government consumes considerable tax resources as perhaps the single largest employer of labour and provider of services in the economy on the other, Nigeria will hardly advance beyond the capability and productivity of its public service and the level of its overall national productivity, which unfortunately who don’t care to measure.

The long and short of the summary is that, within the Nigerian context, the cost of governance undermines the efficiency of national productivity. And this unbridled cost automatically generates institutional waste of such enormity that it multiplies and invades every aspect of the Nigerian governance institutions and processes. The real problem begins with the philosophy and perception of the role of the state in the developmental process. As a carry-over from the oil boom years, the state was conceived as occupying the ‘commanding height of the economy’ where it dictates the critical nuts and bolts of the developmental process. This understanding of the state effectively preclude an institutional architecture that is rationalized to fit into emergent integrated model of managerialism and deregulation/liberalization of the economy with the private sector as the engine of growth in the national economy.

The unfortunate consequence is that the state becomes the focal point of institutional waste. This is close to what Brooks Stevens, the American industrial designer, calls ‘planned obsolescence’; the kind of waste that generates redundancies and pointless cost. It is in this sense that Nigeria is far from being a developmental state capable of facilitating effective and efficient governance paradigm that is conducive to delivering goods and services to its citizens. There are at least three levels of institutional manifestations that illustrate this obsolescence and redundancies. First, there is the issue of the cost and redundancies generated by Nigeria’s presidential system of government perceived as a kind of spoil system that multiplies appointments and offices as means for compensating party loyalists and cronies. This system invariably emasculates the state’s development budget because of the huge pressure generated by the wage bill. There are also costs incidental on an expensive electoral system and nation-wide campaign requirements, as well as the need to maintain party offices in all states and LGAs.

On the other hand, Nigeria possesses a large chunk of states which, in governance terms, are not just viable. This is because these states depend on life-support budgetary allocations from the Federation Account. These allocations are then drained down the black hole of recurrent expenditures. Yet, the depressing fact is that there are still clamours for more and more states and local governments. At the third level is the cost generated by the logic of representativeness that motivates the implementation of a grossly abused Federal Character principle which undergirds Nigeria’s federalism. More often than not, representativeness not only undermines meritocracy as the basis for institutional appointments, but it also generates costs and obsolescence.

This unproductive logic of unguarded institutional multiplication made possible at these three levels of course extends critically to the conception of the Ministries, Departments and Agencies (MDAs), the powerhouse of administrative efficiency in Nigeria. The Nigerian state runs on the effectiveness of the MDAs. Yet, Nigeria’s anti-developmental institutional practices just as effectively stifle the optimal performances of the MDAs. The first reason for concern has to do with the number of MDAs created without any supporting policy of winding them up. And where the government is able to manage a level of political courage to do this, the staffs are rather offloaded on the established line ministries. What results is an incredible level of redundancies in workforce composition with too many people doing too little, too many doing nothing and too few doing too much.

The second concern at the administrative level has to do with the costs incidental on the primitive leveraging of the public sector for solving problem of unemployment. This has directly led to an institutionalised employment/wage policy which supports a system where recruitment of 1000 mediocre is favoured over recruiting well-remunerated 200 administrative/technocratic experts. This tradition is not made better within an adversarial industrial relations framework wherein collective bargaining agreement yields more to militancy in labour agitation totally outside of rational model of wage fixing or concessions to workers based on productivity.

The last level of concern generated by the logic of institutional multiplication derives from the unconscionable practice whereby every federal agency irrespective of costs implication must have offices in all the states of the federation and some in all the LGAs, without consideration for ‘joined up’ cost saving institutional networking like the one-stop shop managerial system and sometimes outsourcing in the context of expanding PPP practices and business models.

One critical point from which waste immediately infests all the institutional manifestation adumbrated above derives from the uncoordinated implementation of the concurrent schedule of constitutional function that ties the Federal Government and the states together. This makes it impossible to avoid unnecessary duplication of programmes and projects which could have been facilitated by either. All these should be properly conceived as the fallout from a managerial tradition, which lack critical benchmarks like ratio of capital to recurrent budgets as well as the reasonable proportion of personnel cost thereto, and so on. For instance, payroll cost is so large that there is nothing left over for training. The consequence is that the differentials between the cost of hiring staff with expert skills or training those with talents in the workforce is paid out to consultants who invariably help to make up for the huge skills and competency gaps in the MDAs as well as the overall distorted IQ of the public service itself.

Thus, because we have often failed to measure labour productivity and the entire productivity quotient in the public service, we are left with the trivial task of treating the symptoms without any understanding of the real cause. It seems to me, in fact, that this is one of the key reasons why the reform of the civil service system in Nigeria has been unnecessarily protracted since the 1954. Yet, all is not gloom and failures. Nigeria’s reform effort is too constant and too focused for it not to have yielded some serious reflections about where we are and what we urgently need to do to undermine our administrative predicament.

The FGN has for instance, taken some steps to confront the productivity challenge that could be deepened, consolidated and scaled-up. In 2012, the FGN approved a new national policy on productivity. The philosophy behind the NPP is to have “a systematic and comprehensive programme of implementation on improving productivity of labour, machine, material, capital, environment, technology, attitude, energy and any other definable inputs of production of goods and services for various sectors of the economy.”

In the wings of that policy the FGN instituted the Oronsaye Committee on the restructuring and rationalisation of Federal Government agencies, parastatals and commissions. The rationale for the Committee is very instructive; it is ‘to meet the global socio-economic challenges which have rendered it inevitable for the Government to cut the cost of governance while ensuring accountability.’ Its ultimate objective is on how to empower the MDAs to do more for less, thereby jumpstarting a productivity trajectory, which can transform the Nigerian socioeconomic profile. We can therefore say that with the implementation of the Oronsaye Report already commencing, the drive towards cost containment has begun.

With respect to the much talk about bloated and skewed budgetary structure that lean more to the recurrent, there is a compelling need to set target benchmark for capital-recurrent budget that governments is seen to assiduously pursue based on timelines. This would imply also that, in terms of industrial relations, wage concessions would no more be due to blackmail or unbridled union militancy but be seen to be managed conscientiously on principles and in the nation’s best interest, to depend highly on negotiated productivity agreements.

The interventions required to move from policy to action will focus on key areas such as a) getting the critical sectors of the economy to articulate their productivity plans based on agreed national benchmark; b) strategic integration of the various productivity plans and targets into the national plan by the National Planning Commission; c) launch of productivity metrics and tools to be deployed to enable employers and employees to begin to sign on to productivity bargaining and gain sharing contracts, to institutionalise a new performance-driven compensation system and skills-based workforce pricing; d) value system reorientation; e) national waste reduction strategy that is linked to a new national maintenance management policy and a new asset efficiency scheme around redefined guiding principles; f) a new national qualification framework aligned to education, training, certification and skills pricing policies; g) input structure including capital-overhead-personnel benchmarks and local content policy; h) SME expansion programme and new regional industrial benefits policy; i) research, development and innovation; etc.

The goal of national productivity in Nigeria is possible. It just requires a huge dose of political willingness, administrative creativity and collective courage. We have begun the journey; it only requires some few more steps to get it done. This is the most critical challenge of the new administration.

Dr. Olaopa, Perm. Sec, Fed Min of Communication Technology made these remarks as Chairman, NISER Research Seminar Series on ‘Productivity in the Nigerian Economy: Issues & Challenges’ held in Ibadan on the 12th of May, 2015