Human capital, Nigeria’s institutional and development agenda
My series of interventions in Nigeria’s governance and institutional reform dynamics and imperatives have always been with the objective of providing a wide-ranging array of ideas and insights that will unravel the inner working of these issues for Nigerians. This, I believe, will enhance their sense of the governance issues and challenges that shape their lives.
But more fundamental still is the opportunity for any new administration, like the incoming one, to have a storehouse of germane approaches and paradigms—iterations of possibilities—from which it could energize its policy architecture and the commitment to transforming the lives of Nigerians.
At this point, the issue transcends the mere issue of Nigeria having a stock of ideas about policymaking or governance reforms. On the contrary, my engagements with governance and institutional reforms have been at the levels at which these ideas, paradigms, insights and blueprints are embedded within Nigeria’s administrative and political histories and realities.
In this piece, I will be unraveling the interface between human capital development and Nigeria’s development trajectory and institutional matrix. We can start with axioms we all can agree with. First: globally, a state’s development performance is determined by the quality of its institutions, and specifically the public ones. It is these institutions that bear the weight of the public policy intentions of the government on behalf of the citizens.
Second: the optimal performance of the public institutions, like the civil service, is hinged on the quality of its workforce—the motivation, competences and integrity of its human capital, as well as the quality of its political, administrative and technocratic leadership. The human capital is essentially the lifeblood of a state and its public institutions.
However, reality is the nemesis of the axiomatic. However, we can only begin to make sense of the significance of the axiomatic when we square it with the reality of human capital in postcolonial Nigeria. The first scary fact is that Nigeria’s population is outstripping its economic growth rate. This simply implies that the galloping population growth puts an enormous strain on infrastructural development and social policy that is not remedied by buoyant economic growth.
The second scary statistics is the endemic low points of Nigeria’s performance in all global and regional human capital indices available. And this is further complicated by the confirmation of Nigeria as the poverty capital of the world, with her own National Bureau of Statistics demonstrating in figures what we all know in fact, that on the Multidimensional Poverty Index for 2022, 63% of Nigerians (approximately 133 million people) are multi-dimensionally poor.
Throw in the bad fact that Nigeria tops the global figure in out-of-school children at 11.5 million (33% above the global rate of 8.5%) and you get the sense of how bad the human capital predicament of the Nigerian state is.
We know that people—human capital—are the lifeblood of national development anywhere on the globe. However, as the Nigerian case demonstrates, if the figure of the out-of-school children is that enormous, and the educational system is out of joint, and public service institutions are dysfunctional, then it becomes extremely difficult to engage with the significance of human capital as the stock of skills, expertise, experience, institutional memory, work culture, and creativity embodied in the capacity of the public service workforce to facilitate economic growth and national productivity.
We now begin to see how harnessing natural resources and the significance of capital depends on the capability of human resources management to build institutional performances and productivity.
The dysfunctionality of the public service therefore and in large part consists of a workforce problematic. And this, for me, revolves around three fundamental challenges: (a) the size of the workforce; (b) the workforce organizational IQ represented by the workforce skill and composition; and (c) workforce productivity and its connection to a nation’s wealth creation dynamics.
How does a nation’s workforce, given these three crucial issues, enable functional policies, achieve regulatory effectiveness in service delivery, become capability ready in policy and programme implementation, while also maintaining meaningful engagement with citizens through transparent and accountable administration? These are the three issues that the incoming Tinubu administration must foreground as the key indicator of its public service renewal programme.
Once the workforce represented by the public service is compromised, then the new administration has failed on a significant issue even before it takes off.
And the workforce is definitely not optimal in its present composition and capability readiness. Nigeria is still trying to make some significant sense of how best to put her act together to participate actively and competitively in the fourth industrial revolution while the rest of the world is already preparing for the fifth.
The public trust invested in public service as the embodiment of a government’s performance has waned to a point of alarm. And this is essentially because that institution has failed to account for the return on investment as a sector of the national economy that is responsible for about 20% of national employment, and holds approximately 15% of Nigeria’s annual GDP in terms of its wage bill.
The Nigerian public service system has a compromised institutional performance capability to attract talents and competences, and to initiate a productivity paradigm shift for democratic governance. This is because its operational and business model is outdated, its wage structure is largely uncompetitive, it has an extremely low institutional incentivisation, and its competency-based human resources management system has all but collapsed.
The challenge is that of how the new administration will manage Nigeria’s fiscal crisis— represented by a mounting national indebtedness and unsustainable cost of governance—to creatively reinvest in the public service the resources it urgently requires to perform productively. How can the skills and competences of the public service workforce be unleashed and harnessed optimally to instigate productivity within a performance management framework?
Transforming the public service institution requires strategic overall vision of human capital development, a clear reform agenda for the public service that will be grounded on a specific programme of re-professionalisation of the workforce, as well as a willful de-politicisation of public service governance that recognises its status as a professional vocation with its own key dynamics and frameworks. I have a few recommendations for the new administration as it prepares to take off full throttle.
First, the new administration requires a rethinking of the management of human capital in the public service. This demands a move away from the traditional approach underpinning the personnel administration handled by the generalist framework to a more strategic human capital approach that sees public employees as valuable assets. Personnel administration and its neoliberal rationale understand employees and even the whole public service institution as a cost-generating and burdensome institution that needs to be pruned.
It thus fails to see it as a valuable public framework whose values keep increasing the more it is nurtured. Second, nurturing and optimally utilising the public service workforce under a strategic management framework, therefore, requires a further rethinking and realignment of the intellectual basis of skills and competencies that backstop the public service in ways that bring them to par with global best practices in competency benchmarks.
This has the significant advantage of bringing the public service into compliance with the imperatives of a knowledge and information age that the fourth industrial revolution demands. The insistence therefore is on the re-composition and re-wiring of the public service skills-set and organisational IQ to perform better in a VUCA—vulnerable, uncertain, complex and ambiguous— administrative environment.
This demands a deep organisational reform of the old inherited internal management controls, like the organisation and method (O&M) as well as the treasury control of establishment on the strict regulatory guidelines for creating and wounding up new agencies once their objectives are achieved.
Third, there is a juncture where poor data culture and wage and compensation dynamics that strategically underpin human capital management in the public service globally. A sound data culture builds into the performance contracting and auditing that underpin the performance management system.
A functional data culture enables a firm grip on the measurement of the actual cost and contribution of public service employees to the overall performance and productivity of the public sector. On the other hand, wage and compensation increase the competitive edge that brings the public service recruitment framework in line with scarce and rare skills and talents in line with market parameters and performance metrics.
Fourth, there is a need to put in place HR departments in all the MDAs that are reformed in line with the parameters undergirding HR function as, first, a body of systematic and strategic knowledge acquired through training and experience; and second, as a deeply professionalised endeavour with strategic specialists as change agents. It is the responsibility of such HR departments to facilitate the establishment of a performance-managed workplace culture that deploys KPI metrics as a replacement for the outdated Annual Performance Evaluation Review (APER).
For instance, such departments will have to manage flexible work practices to optimize staff capacities. This will involve a shift away from full-time work arrangements to more varied part-time frameworks like flexi-timing, job sharing, remote working and outsourcing.
Overall, the new administration needs to revisit the re-professionalisation imperative and change management requirement needed to bring the public service up to par as a world class institution that will deliver on the administration’s policies. Let me reiterate: this new administration will only succeed with a twenty-first-century public service that is smart, flexible, meritocratic, entrepreneurial, technology-enabled, accountable and citizen-engaging.
Olaopa is a retired Federal Permanent Secretary and Professor of Public Administration