In the pursuit to increase thewelfare and well-being of the citizens, governments have over the years embarkedupon numerous development policies, plans and programmes. Some of suchdevelopmental plans include the First National Development Plan (1962-1968) (designedto put the economy on the path of accelerated growth by prioritizingagricultural and industrial development as well as training of manpower), theSecond National Development Plan (1970-1974), through to the Third NationalDevelopment Plan (1975-1980) (devoted primarily to rehabilitate and reconstructinfrastructure that were destroyed during the years of the civil war). Introductionof the Structural Adjustment Programme (SAP) to create a more market-friendlyeconomy and encourage private investments.
Nigeria’s Vision 2010 and 2020 planswere aimed at “transforming the country and focusing it firmly on the path tobecoming a developed nation by the year 2020”. According to the documents, theplan advocates for a private sector-driven development process within abroad-based and highly competitive environment.Furthermore, the return ofdemocratic governance in the country in 1999, brought along with it the introductionof a series of reforms, aimed at redressing the distortions in the economy andrestoring economic growth. The National Economic Empowerment and DevelopmentStrategy (NEEDS) of 2004, a home-grown poverty reduction, value-reorientationand socio-economic development strategy. The Transformation Agenda, NationalIndustrial Revolution Plan (NIRP) and the recent Economic Recovery and GrowthPlan (ERGP) all make up government development and growth strategies over theyears.
Although development planning has been a consistent phenomenon inNigeria, it is worrisome that these plans have not been able to fully deliverthe desired results. Inspite of Nigeria’s huge potentials in both human andnatural resources, it is still rated an underdeveloped country. Absence of strong institutionalframework in the public service has made productive activities become lesssignificant as a driving force of economic growth and development. Lack ofproper coordination between agencies of government in delivering government objectiveshas contributed to the poor performance of most development plans.
This has ledto widespread poverty, infrastructure deficit, rising unemployment, low humancapital development, high incidence of disease outbreak, increasing debtprofile, environmental degradation and dwindling life expectancy. Thestandard of living of the citizens depends on the institutionalframework and capacities that shape the quality of human capital development,the direction of the economy and level of investments across sectors. In ensuringinclusive growth and development in the economy, the role of efficient institutionalframework and proper inter-agency cooperation cannot be over emphasised. Therefore, what do we need to dodifferently to strengthen institutional framework and ensure inter-agencycooperation in the public service? This policy brief seek to highlight theimportance of efficient institutions in the public service and also the needfor better inter-agency cooperation and coordination towards delivering theimpacts of development on the citizens. IMPACT OF INEFFICIENT INSTITUTIONS AND LACK OF INTER-AGENCY COOPERATIONIN NIGERIAThe prosperity of any nation hinges onthe institutional framework. Inefficiencies of the institutional framework inNigeria has promoted widespread corruption, poor accountability and lack oftransparency leading to the redistribution of wealth in favour of few politicalelites and widening the inequality gap.
According to World EconomicForum’s Global Competitiveness Report (2017-2018), Nigerian Institutions withan overall rank of 125th out of 137 appear more fragile, addinguncertainty to the business environment. Nigeria ranks low on key institutionindicators such as diversion of public funds (127th out of 138),irregular payments and bribes (129th), efficiency of governmentspending (126th), burden of government regulation (107) andtransparency of government policymaking (113). Also, Nigeria still rank verylow in the recent Corruption Perception Index (136 out of 176). These rankingsshow that more actions are needed to improve transparency & accountability,reduce red-tapism across government institutions and remove regulatory burdenson businesses. However, new prudential reforms by the Presidential EnablingBusiness Environment Council (PEBEC) and the Economic Recovery and Growth Plan(ERGP) 2017–2020 have strengthened the much-needed reforms to improve theinstitutional framework and improve the ease of doing business thoughimplementation is still a major challenge.In recent years there has beenmuch discussion and frustration about the lack of cooperation and coordinationbetween and amongst Ministries, Departments and Agencies (MDA) of the governmentin response to issues of national interest and global contingencies. TheNigerian public service over the years have proven to be quick in the study ofour failings but slow in developing effective inter-agency solutions.
Thisbecame more evident in the first quarter of 2016 when the Nigerian economyentered into the worst recession in more than two decades. Despite the evidentinterconnectedness and interdependence between fiscal and monetary policy, whileconducted by separate and relatively independent institutions, failed to agreewith complete precision the impact of one policy on another while seeking tomove the economy forward. This introduced so much uncertainties into theNigerian economy leading to the negative growth rates recorded.The lingering fuel crisisexperienced across the country is another good instance of institutionalfailure and lack of inter-agency coordination. The Central Bank of Nigeria(CBN), Nigeria National Petroleum Corporation (NNPC) and Petroleum ProductsPricing Regulatory Agency (PPPRA) have failed to adopt a sustainable pricingtemplate for petroleum products.
A sustainable pricing template will guaranteethe marketer of the availability of foreign exchange at favourable ratesirrespective of fluctuations in the market. This will ensure that logisticscosts are covered and reasonable profit assured. Moreover, the failure of therefineries to produce at optimal capacity is also a major factor causing thecrisis. This is also due to the inability of the relevant institutions toprovide an enabling environment which encourages investment towards setting upof private and modular refineries to complement the efforts of the governmentowned refineries to ensure adequate supply of petroleum products in the country.Also, one of the greatestsecurity challenges Nigeria has to contend with in the 21st century is therepeated cases of violent clashes between security agencies in some cities. Theproblem of violence has become more worrisome as the security operatives whoseduty it is to maintain peace, detect and suppress crimes have themselves becomeengulfed in violent conflicts, thereby giving criminals opportunity to unleashterror on the citizens with impunity. The struggle for superiority amongsecurity agencies arising from their historical past has become a professionalanomaly which is grievous to the economy.
Similarly, the prolonged case of BokoHaram insurgents that seem to have defied all security prescriptions may not beunconnected to the lack of inter-agency cooperation between security operativesand also between citizens and security agencies. Due to lack of cooperation, securityoperatives have not been able to form formidable resistance to the onslaught ofinsurgents. This explains why the nation has not been able to effectivelymanage insurgency and other security challenges in recent times.The cumbersome process in theNigerian Ports is another example of lack of inter-agency cooperation andexposes the inefficiencies of institutions to promote ease of doing business. Theefficiency of a port is important in international trade.
Gap analysis of theNigerian Maritime sector shows that it takes about 5 to 14 days to clear acargo at the ports. This is a far cry from what is obtainable at the ports ofpeer countries such as Rwanda and Botswana (with 48 hours cargo clearancetime). Similarly, the number of government departments currently operating inthe port is 14 as against 6 as stipulated by the government. This process makesdoing business in Nigeria hectic and has continued to reduce investorconfidence.
Though considerable progress has been recorded, there is stillgreat room for improvement given the evolution of trade patterns globally. Thelack of an overarching strategy that improve institutional capacity and fostersinter-agency cooperation in the ports contributed to the inability of theeconomy to assume increasing responsibility and become globally competitive. Selected Performance Indicators of the Nigerian Port Indicators Ideal/Baseline Current Reality Gap No.
of govt. depts. Operating in the port 6 14 Additional 8 Cargo clearance timeline 2 days (48 hours) 5 to 14 days Additional 3 to 12 days No. of paper works & agencies to interface with to clear a cargo 1 (Single Window) 18 agencies, and 23 signatures Additional 17 No.
of paper works & agencies to interface with to export a cargo 6 Agencies 20 agencies, and 33 signatures Additional 14 Source: LCCI WHAT LESSONS CAN WE LEARN FROM PEERSThere is a large body of evidencethat confirms the importance of a strong institutional framework, underpinnedby the rule of law, for long term economic prosperity. This is recognized acrosscountries by policy makers. Countries that have developed strong institutionalframeworks and inter-agency cooperation have performed better in terms ofsustained growth and human development while those countries whoseinstitutional frameworks are particularly weak are likely to pay for thoseweaknesses over time. This presents the need for Nigeria to learn from peers inadopting sustainable strategies that will strengthen institutional framework aswell as improve inter-agency cooperation. This section highlights theimportance of strong institutional framework and how this has helped selectedAfrican countries (Rwanda and Botswana) improve their economic viability.
Lessons from RwandaThe government of Rwanda’s desireto transform the economy is rooted in the belief that poverty exacerbated thetensions that erupted into 1994’s genocide. The aftermath of the genocide calledfor urgent measures that will strengthen institutions in Rwanda with theconviction that no country can depend on development aid forever as suchdependency dehumanizes the country and robs them of their dignity. This led tospecific reforms to alleviate the situation which the country found themselves.
These institutional reforms over the years have proven to be the bane ofeconomic growth and development in Rwanda. In a bid to improve the ease ofdoing business and encourage private sector investment, Rwanda has placed ahigh emphasis on developing its private sector. Rwanda is among more than 35economies where the government has made private sector development a priorityby establishing institutions whose main purpose is to design and implement businessregulation reforms. Similarly, Rwanda introduced new secured transactions law,allowing a wider range of assets to be used as collateral and permitting out-of-courtenforcement proceedings.
This led tothe creation of the country’s first private credit bureau, which provides widercoverage than the public registry because it includes information fromutilities. In the same vein, Business registration process were simplified bysetting up hundreds of new notaries to make starting a business faster, asprior to this there was only one notary for the entire country. This led to 77%more businesses registering the following year. However, the distinctivefeature of institutions in Rwanda is the Monitoring and Evaluation (M&E)framework which compels heads of every institution charged with oversightfunction to submit verifiable progress report back to president every month.
Rwanda’s commitment to structural and institutional development has facilitatedgrowth in exports, domestic investment and foreign direct investment inflow andthe implementation of effective fiscal policies.Lessons from BotswanaOver the past few decades,Botswana has been considered among the best performing economies in the worldand hailed as a beacon of success in economic management compared with mostAfrican states. At independence, Botswana was coming to the end of a severedrought cycle that had lasted for more than five years. Under these bleakeconomic conditions, expectations regarding economic expansion were not excessive.Thus the combination of more abundant resources available for development thanoriginally envisaged, extremely cautious government spending, and supposed goodeconomic policies supported by good institutions may explain some of thedevelopment success in later years. Botswana’s good economic policies andsuccess reflect its institutions. These institutions, protected property rightsof the actual and potential investors, provided political stability, andensured that political elites were constrained by the political system and theparticipation of broad sector of the society. Five critical factors areassociated with the good institutions in Botswana.
First, Botswana possessedprecolonial tribal institutions that encouraged broad-based participation andplaced constraints on political leaders during the precolonial period. Second,British colonization had a limited effect on the precolonial institutionsbecause of the peripheral nature of Botswana to the British Empire. Third, uponindependence, the most important rural interests, chiefs and cattle owners werepolitically powerful, and it was in their economic interest to enforce propertyrights. Fourth, the revenue from diamonds generated enough rents for the mainpolitical actors, increasing the opportunity cost of, and discouraging furtherrent seeking. And finally, the post-independence political leaders undertookdeliberate decisions to create a strong central state.
Unlike leaders in mostAfrican countries at the time, these leaders also crucially resistedindigenizing the bureaucracy until suitably qualified citizens were available;so expatriate workers were kept, and international advisers and consultantswere also used. This added to the strength of theinstitutions till date. Botswana’s development experience has also beenassociated with strong adherence to national development planning and budgetingprinciples, with little or no external influence in the planning process.
Thishas ensured central planning in the pursuit of national development objectives.This process ensures that to the extent possible, only projects approvedthrough the national planning process are financed through the nationalbudgeting process. The development plans are based on a six-year planningcycle, with a midterm review every three years. Worth noting is that the thrustof all the national development plans since 1966 has been achieving sustainableeconomic growth and diversification.
WHAT NIGERIA CAN DO DIFFERNTLY Though various institutions inNigeria has undergone changes and transformation tailored towards achievingefficiency and effectiveness over the years, successive reforms have not madesignificant impact that will foster inter-agency cooperation and improvestandard of living. However, in trying to keep pace with rising unemployment bypositioning institutions to deliver and improve inter-agency cooperation in thecountry, public-private implementation strategy must be put in place to ensurethat through rigorous planning and efficient resource allocation, the economicgrowth rates easily translates in low levels of poverty and higher employmentrates. There is need for reforms in the following key areas;DEREGULATION OF THE DOWNSTREAM OIL SECTORDeregulation of the downstreamoil sector will improve the efficient use of scarce economic resources bysubjecting decisions in the sector to the operations of the forces of demandand supply. This will attract the needed investment in the market, therebyincreasing competition, promoting higher productivity and consequently loweringprices overtime.
The ultimate effect of these activities is posed to increasegains for Nigerians as efficient resource allocation will be achieved. Forinstance, following government’s deregulation in the Telecommunication, therehas been a reduction in call tariffs. Similar success has also been recorded inthe banking sector with the emergence of stronger banks with unprecedentedspread to several other African countries. These are classic examples of thekind of positive effects deregulation could have on oil sector. Deregulationfurther reduces economic waste and lightens social burdens caused by governmentcontrol. For several years, Nigeria experienced scarcity of petroleum productsthat crippled economic activities and increased the cost of doing business.Deregulation will help address this price scalping and a host of associatedproblems related to the sector. Deregulation of the downstream oil sectorpromises to be the way forward in expanding opportunities for economic growthand a competitive downstream petroleum sector.
IMPLEMENTATION OF THE NIGERIA SINGLE WINDOWThe Nigerian Single Window (NSW)which was created through an intense automation and introduction of standardoperating procedures connects other government agencies under one platform butis rarely available for use. This innovation was conceived to allow foradequate and timely information to process the shipment of goods and release ofgoods. Attempts for the port to ride on technology innovations to eliminate orreduce physical contacts, illegal payments and delays in processing portdocuments are seen to be deliberately frustrated by agency and departmentsofficials. The full implementation of NSW platform will strengthen the portindustry by boosting efficiency and reduce cost and time, which are the majorobjectives of port concession agreement signed by private terminal operators.It is widely believed that the efficient working of NSW is single most vitalreform capable of setting the Nigerian ports on a new path of progress.
INTRODUCTION OF SECURITY INFORMATION MANAGEMENT SYSTEMInformation is a crucial tool innational security and its timely dissemination is critical for maintainingnational peace. The National Assembly and the administration will need toconsider the extent to which agencies’ existing structures, processes, andfunding sources facilitate interagency collaboration. Sharing and integratingnational security information is critical to assessing and responding tocurrent threats to national security. At the same time, agencies must balancethe need to share information with the need to protect it from widespreadaccess due to concerns about agencies’ ability to protect shared information oruse that information properly, other agencies and private-sector partners aresometimes hesitant to share information. However, in defining institutionalroles and responsibilities and mechanisms for coordination, one of the necessaryfeatures for strategies identified is the need to integrate the informationmanagement system of security agencies. This will help agencies clarify whowill lead or participate in which activities, organize their joint activitiesand individual efforts, facilitate decision making, and address how conflictswould be resolved collectively.
Also, the government must ensure that securityagencies enhance and sustain their collaborative efforts by establishingcompatible policies, procedures, and other means to operate across agencyboundaries.