The Nation Newspaper

Tag: Bureaucracy

  • ‘Bureaucracy, others fuelling dead capital’

    ‘Bureaucracy, others fuelling dead capital’

    Bureaucratic bottlenecks, corruption and inefficient legal frameworks contribute to the existence of dead capital in Nigeria’s real estate sector.

     According to a PricewaterhouseCoopers (PwC) report, the country holds as much as $900billion worth of dead capital locked up in residential real estate and agricultural land without titles.

    Dead capital refers to assets or property that cannot be easily converted into productive use, often due to legal or institutional barriers.

    Before now, several professional bodies in real estate have called for speedy land titling processes and less cumbersome government consent.

    Additionally, bureaucratic procedures, corruption, and inefficient legal frameworks contribute to the existence of dead capital in Nigeria’s real estate sector.

    They stated this in a new report titled ‘Nigeria Economic Outlook: Seven trends that will shape the Nigerian economy in 2024.

    According to the report, Nigeria’s housing deficit is estimated at 28 million units while the population is expected to reach 223.8 million this year.

    It noted that the dead capital in the country included the Federal Government’s abandoned property estimated at N230 billion. This lack of proper documentation hinders access to credit and investment opportunities in the real estate market.

    Despite the huge housing deficit, it noted that demand for housing remained depressed due to high rental and construction costs and declining disposable incomes.

    “PwC estimates that Nigeria holds as much as $900billion worth of dead capital locked up in residential real estate and agricultural land, including Federal Government’s abandoned properties estimated at N230billion,” the report noted.

    Read Also: Sanwo-Olu to Edu: Don’t allow bureaucracy to undermine President’s welfare initiatives

    In Nigeria, many properties have undocumented or informal land titles, making it difficult for owners to prove their ownership and fully utilise the value of their assets.

    Those factors make it challenging for property owners to navigate the system and unlock the full economic potential of their assets.

    Last year the Federal Government revealed its plans to unlock over $300 billion ‘dead’ capital in the housing sector through a series of reforms and collaborations with stakeholders.

    The government described the move as part of efforts to enhance investment and finance opportunities for sustainable real estate projects and address the country’s housing deficit.

    The Minister of Housing and Urban Development, Ahmed Dangiwa, during the Capacity Development Conference for Developers in Abuja recently stated that  plans to amend the Land Use Act to streamline land administration, as well as reforms key agencies like the Federal Mortgage Bank of Nigeria (FMBN) and the Federal Housing Authority (FHA) is on the pipeline.

    The Minister said: “In alignment with the vision of President Bola Ahmed Tinubu, we are dedicated to creating a conducive environment for increased private sector investment in housing. Our objective is to break all institutional, legal, and bureaucratic barriers that have hindered sector growth.”

  • “Bureaucracy, red-tape, major reason for low rate of PVC collection in south west”

    Adekunle Osibogun, Lawyer and Founder, Adekunle Osibogun Foundation Mr Adekunle Osibogun, a British trained International Trade and Investment Lawyer, is the Founder of Adekunle Osibogun Foundation and Convener, Young Progressive Nigerian Initiatives (YPNI); In this interview, the Ijebu Ode born Constitutional Lawyer who recently led some group of youth volunteers on a tour of the eight Local Government Areas in Ogun East Senatorial District of Ogun State to sensitize the people on the needs to register to vote and collect their Permanent Voters Card (PVC) ahead of the 2019 General Elections, opined among other things, that red-tape is largely responsible for low rate of PVC collection in the South West States compared to States in the Northern Part of the country. Excerpts:

    Kindly share the experience you gathered during the recent PVC sensitisation campaign tour of the towns and villages in Ogun East Senatorial District, sponsored by your Foundation.

    I’ll say the experience was quite humbling; humbling in the sense that there is a high level of enthusiasm amongst the populace towards the upcoming 2019 General Elections, especially their interestto vote in the 2019 elections. We however observed that a lot of people are not aware of the important role the Permanent Voters Cards (PVCs) will play during the 2019 General Elections. Independent National Electoral Commission (INEC) has indicated that the PVCs will play a key role in the upcoming election process, and this I believe is already being reflected in the allotments of the new Polling Units (PUs). I observed that the regions with the higher PVC collection rates were allotted a higher number of PUs. Consequently the South West region got the third least number of new PUs, behind the North Central where citizens have been displaced by the herdsmen crisis, the North East which has been ravaged by the Boko Haram, and the North West which has been notorious for underage registration and voting. Unfortunately, only a few of the populace in Ogun East Senatorial District have gotten their temporary voters cards, some of them have not even registered at all, while there is a large number of people who complained that they have either lost or damaged voter’s cards.We also observed that some eligible voters who relocated to Ogun State after the 2015 elections are anxious to transfer their registration to Ogun State, but lack information on the process. I’ll say that INEC still has a lot of work to do in Ogun State, particularly in Ogun East Senatorial District, because based on our survey, the amount of eligible voters who have not yet obtained their PVCs, which includes those that only have their temporary voter’s card, is very high and if we are looking to have successful General Elections in the Ogun State come 2019, it’s important that these people are also given not only the opportunity but also the encouragement to pick up their PVCs.

    From your interaction with the people, how will you describe the level of political education of the residents of Ogun state and how is the level of PVC collection in Ogun East Senatorial district?

    The residents of Ogun State are highly politically active, which is most evident in the vibrancy of the political campaigns in the State and the level of enlightenment amongst the populace. When it comes to political education, majority of the populace know their civic rights and duties, and are actively involved in the political process. However, when it comes to the level of PVC collection, especially in the Ogun East Senatorial District, it was my observation that the level of PVC collection varied from area to area. I observed that while some locations we surveyed had a high rate of PVC collection, other locations had a very low rate. Also, the densely populated areas reported a lower collection rate than the thinly populated areas. So for example, locations within the waterside area reported a higher collection rate than the Ijebu-Ode and Odogbolu areas of Ogun East Senatorial District. To address our findings, we have set up teams of volunteers to engage and encourage people to go to their local government offices and registration centres within the District to pick up their PVCs. We are also taking steps to set up a special team that will provide guidance for those who have either lost or damaged voter’s cards or intend to transfer their registration to the District.

    What do you think is responsible for the low collection in the southern part and higher collection in the northern part?

    I haven’t surveyed the northern part of Nigeria to know the reason for the high PVC collection rate there, but I can speak about the low PVC collection rate in the southern part of Nigeria. I will attribute the primary reason for the low PVC collection rates to bureaucracy and red-tape. We have citizens who wake up as early as 5am to go and queue at INEC offices, spend the whole day there and may still be unable to pick up their PVCs. Now, that is discouraging. For us to encourage ourselves to pick up our PVCs, which is a civic duty as we all know, it is important that we make the process a lot easier and more seamless. Without a shadow of doubt, there is a need for more registration machines, especially in Ogun East Senatorial District, where the registration machines are not sufficient. It is important that INEC intensifies efforts by increasing the number of registration machines in the South; investing more in awareness and sensitisation campaigns amongst the populace for those with lost or damaged voter’s cards or those seeking to transfer their registration; and by reducing the bureaucracies and red-tape prevalent in the PVCs collection process, especially in the southwest geopolitical zone which we know has a larger population than the collection rate being recorded so far. It is noteworthy that the bureaucracy in transferring registration within a state takes approximately ten months, regardless of if the transfer is within PUs in the same district or other districts, and the customer service can also be better. This is why my Foundation is focusing on providing guidance and support to help ease the stress that the average citizensare currently experiencingduring the process of registering and collectingtheir PVCs.

    From your experience do you think Nigerians are prepared for 2019 general elections?

    I’ll say Nigerians are better enlightened going into the 2019 General Elections than any of our previous elections, but their level of preparedness is low, becausemajority of the populace are yet to collect their PVCs.Based on the vibes coming from INEC, the PVCs will be the instrument that will qualify citizens to participate in the voting process for the 2019 General Elections. So, no matter how enlightenedyou are, no matter how passionateyou are, if we haven’t all gotten our PVCs then all our efforts will be in vain because we will all be unable to participate in the voting process, which defeats the purpose of democracy. So, while a lot is being invested into getting Nigerians to pick up their PVCs, each individual citizen must be determined to pick up their PVCs, towards making the 2019 General Elections a successful hitch free democratic election.

    From what you saw across the towns and villages of Ogun East Senatorial District, can you critically examine the economic social and material conditions of our people?

    In my opinion,Ogun East Senatorial District has been marginalized in the areas of economic investment and infrastructure development. This is evident in the decadent state of the District’s roads, lack of accessibility to quality and affordable healthcare and education, and poor electric and water systems, which has created a general apathy amongst the populace towards government. Unfortunately, due to the lack of political will to revisit the operation of our current federal structure, the State Government has been unable to increase its revenue base and hascontinuously muscled in on the revenue generating powers of the Local Governments, which is now becoming a redundant arm of government as a result of the State Government overbearing powers. So, while the Local Governments within the District lack the financial capacity to make any meaningfully impact in the lives of the people in the District, the State Government has its focus on other Districts within the State, all to the detriment of the people in the Ogun East Senatorial district. There is therefore a need for the State Government to pay special attention to the condition of the people in the District, because Ogun East Senatorial District is in my opinion the heartbeat of commercial activities in Ogun State.Yes, the capital is in Abeokuta, but when you look out for commercial activities in Ogun State, the Ogun East Senatorial District is where most of it happens.So it will be to the benefit of the State as a whole for there to be a special intervention from the State Government for the people in the District.

    Generally, are you satisfied with the preparation of INEC for 2019?

    I’ll give INEC a 50% pass mark for their efforts thus far and their strategy, especially on PVC collection nationwide, but they can do more.INEC can do more especially in the South-WestRegion because the level of PVCs collected in the South-West as a whole compared to the growing population of the South-West isvery low.It’s therefore urgent that INEC now pays special attention to the registration and collection of PVCs in the South-West to ensure the General Elections in the South-West Region are a true reflection of the hopes and aspirations of the people.

    What Is Your Position On The #NotTooYoungToRun Campaign?

    I strongly believe there is a need to transit from the old generation of politicians to a younger and more vibrant generation of political leaders, who understand the challenges of Nigerians in the 21st century and who are prepared to proffer lasting solutions,inspire their peers, and work tirelessly towards addressing these challenges. This, I believe is also the objective behind the #NotTooYoungToRun Campaign. Majority of our youths have lost faith in Nigeria because of the growing disconnect between their aspirations and those of our political elites. The discontentment of our youths with the political elite can be better expressed with reference to the surge in the numbers emigrating through our boarders in search of a better life. We have continued to lose our youths who voluntarily make the suicidal journey across the Sahara desert, others opt for the citizenship of foreign countries, while those who elect to stay have resigned to their faith or taken to crime or armed banditry. This is the current reality facing Nigerians. Our political elites have continuously failed to inspire our youths, so if our youths choose to be their own inspiration towards building a better country for future generations, we must support them.For Nigeria to develop, people with fresh ideas, innovation, drive and focus must be given the opportunity to govern, and I make bold to say that Nigeria will only transit from its current predicament if young reputable Nigerians take up the responsibility of governance.

    Any Political Aspiration For Adekunle Osibogun in 2019 General Elections?

    I am currently encouraging my peers to actively participate in the 2019 General Elections because it is my desire to see a large contingent of us occupying elective offices in 2019, so we can attempt to rescue our dear country from its current downward spiral.  I therefore intend to lead from the front by contesting in the 2019 General Elections. I know your next questions will be for what office? So let me save you the trouble by telling you that it will be an office I am best suited for based on my qualifications and experience, and where I will be better able to contribute to solving our current challenges and building a better Nigeria. But be rest assured that all will be revealed in due course.

    What is the driving force behind the Adekunke Osibogun Foundation?

    The Adekunle Osibogun Foundation is a private foundation that supports and inspires civic engagements and services in local communities, strengthen, promote, and where necessary protect the socio-economic rights of young Nigerians through intervention programmes in areas of education, entrepreneurship, leadership, citizenship awareness, agriculture, and youth empowerment. The origin of the foundation date back to 2009 when I met with other young patriots in Abuja to set up a platform to encourage and promote a sense of patriotism among Nigerians, which eventually birth the Young Progressive Nigerians Initiative (“YPNI”) for the benefit of our peers and local communities. After the establishment of YPNI, I was motivated to financially support my commitments to promoting patriotism amongst Nigerians and enhancing the quality of life of Nigerians through initiatives that promote national development, entrepreneurship and educational opportunities. Hence, the establishment of the Adekunle Osibogun Foundation! Through the years, I have supported and funded numerous intervention programmes of various non-governmental organisations, as they provide free skills acquisition trainings, mentorship and leadership programmes, entrepreneurship development programmes, and access to financial and legal advisory services for small and medium sized enterprises.

     

  • Blame corruption, bureaucracy for Nigeria’s ailing refineries -Experts

    The recurring issue of fuel scarcity across the country in recent times has raised fresh debates about the state of the nation’s refineries with some of the critical stakeholders blaming the problem on the twin evils of bureaucracy and corruption. Ibrahim Apekhade Yusuf in this report, examines the issue

    It’s true that Nigeria first discovered crude oil in commercial quantities in Oloibiri, Port Harcourt, in 1958. Of course, for those who witnessed that era, it was a real moment of discovery for the young independent country as the communities, and indeed Nigerians brought out their drums and cymbals to celebrate the good fortune. But several decades after, with the benefit of hindsight, not a few who witnessed that glorious day would argue that that prized resource, the proverbial black gold has turned out to be a bad omen for the country. All the promise of that discovery sadly lay in the past.

    An insider’s perspective

    In the view of some discerning Nigerians, since the discovery of crude oil in the late 50’s, the country, in a manner of speaking, has literally endured the “resource curse.”

    Reason: the much sought-after black gold, with all its benefits, has been the cause of many woes including corruption that is endemic in the system.

    In the upstream sector of the petroleum sector for instance, the hydra-headed monster of corruption has been there from the beginning.

    Chief Benjamin Nnadi, a petroleum engineer and pioneer staff of Warri Refining & Petrochemical Company Limited (WRPC), where he worked for over 12 years, sadly reminisces about what transpired during his active working career at the WRPC.

    “As young men working at Warri Refining & Petrochemical Company Limited (WRPC), we all looked forward with optimism when the Italians set to work in the late 70’s when the ground work for the first refinery was being built. But it saddens my heart that what the Italians bequeathed to us at the end was a caricature refinery and not a brand new refinery as was anticipated by many of us at the time,” Nnadi began.

    Expatiating, he said: “As a retiree, each time I hear that Warri Refinery is not working I’m surprised because it was never built to work efficiently… The whole machinery should be scrapped… Most of the machineries they brought in were not brand new. They were sandblasted and repainted, which explains why the refinery has never worked at maximum installed capacity because I recall that anytime we wanted to raise its capacity everything will just ground to a halt…Things were really bad. And this is why I heaved a sigh of relief when I was redeployed to Benin in 1990 and later to Lagos to work at NAPIMS where I worked until my retirement in 2004.”

    The foregoing terse statement speaks volume of the parlous state of the Warri refinery, albeit, the other refineries namely Port Harcourt Port Refining Company (PHRC), Kaduna Refining & Petrochemical Company Limited (KRPC).

    A divergent opinion

    In the view of the former Project Manager/Managing Director of the NNPC’s Eleme Petrochemicals Company limited, Dr Edet Oahimin-Akhimien, the refineries can still be revived despite the many hiccups.

    Speaking in an exclusive interview with our correspondent, he said: “The refineries can still serve because if the refineries have been operating and running as they should be, there’s no reason why they should not be running now. I read in the papers today (Thursday) that the NNPC was going to bring back the contractors who built the refineries to help with their refurbishments and revamping and so on, which I think is a very good step. In fact, many refineries in the world are old and still running smoothly. I was somewhere and somebody said no new refinery has been built in America in the last 10 years or more. The youngest refinery in America should be about 20 years old.”

    State of refineries

    It would be recalled that former President Olusegun Obasanjo had embarked on the privatisation of the refineries in 2007 but it was later upturned by the late Musa Yar’Adua because the latter felt certain interest in the north and south were sidelined in the scheme of things.

    From available information, the four refineries have a combined installed capacity of 445,000 bpd. The PHRC is made up of two refineries, located at Alesa Eleme near Port Harcourt with a jetty (for product import and export). The jetty is located 7.5km away from the refinery complex.

    In 1983, the Port Harcourt refinery with 60,000 bpsd name plate CDU capacity and the tankage facilities were acquired by NNPC from Shell. Subsequently, a new 150,000 bpsd export refinery was built in 1988 and commissioned in 1989.

    The current combined installed capacity of PHRC is 210,000 bpsd. The installed capacities of KRPC and WRPC are 110,000 bpsd and 125,000 bpsd respectively.

    Notwithstanding the cheery statistics, the country has never enjoyed the benefits of the refineries as it has had to import refine crude in large quantities to augment local consumption, albeit, at a drain on the nation’s resources.

    While giving his own perspective on the state of the refineries, the former Lagos Zonal Chairman of Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Reverend (Comrade) Folorunso Oginni in an interview with The Nation regretted that a lot has gone awry over the years as such would require a careful and concerted efforts on the part of all concerned to turn the tide.

    Poor maintenance culture

    The country, analysts, have argued, has a poor maintenance corporate culture, refineries inclusive. The 150000 bpd Port Harcourt refinery was built in 1989. TAM operations were carried out in 1991, 1994, 2000.

    The Kalu Idika Kalu Committee had in May 2012 during a visit to the Port Harcourt refinery found the federal government four boilers non-operational. Two out of the four power plants were down.

    Besides, there was evidence of poor maintenance with serious corrosion of major key units just as morale of the workers was low and management was dysfunctional with little or no financial authority.

    The last major TAM was in 2000. It will have to be modernised and upgraded, the committee concluded.

    The same goes for the 110000 bpd Kaduna refinery, which had its last TAM in 2008. The one before that was in 1998 after a major fire. Production is at 25% of installed capacity. The 125000 bpd Warri refinery is also operating at 25% installed capacity. TAM operations were carried out in 1994, 2000 and 2008.

    ABC of TAM

    Refinery turnaround maintenance (TAM) is a planned partial or full shutdown of one or more units of a refinery in order to perform inspection, repair, and maintenance of equipment to ensure safe and efficient operations. Material and obsolete equipment are replaced. A refinery TAM takes place every three-five years and requires about one-two years of advance planning. The actual TAM operations take about 6-12 weeks.

    A well implemented TAM programme reduces unplanned disruption of production activities in a refinery and helps maintain operations at more than 80% capacity utilisation.

    A case for TAM

    In its quest to achieve 90 per cent optimum capacity utilisation of the refineries the federal government proposed $1.6billion for TAM in all the four refineries from 2013-14.

    Justifying the need for the TAM at the time, the then Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, said it was capable of turning the side in the sector.

    The PHRC plants had operated for 12 years without TAM and this has caused the equipment to deteriorate and operate on very low efficiency.

    Losses galore

    According to independent checks by The Nation, the refineries are currently operating at huge losses. They are all operating at a loss, no thanks to the spate of pipeline vandalism, fuel theft, among others.

    For instance, the NNPC recently revealed that about 45 per cent of refined products from the Kaduna Refinery have been stolen by unknown persons.

    This accounts for total loss of about N12.5 billion revenue in five years by the Kaduna Refining and Petrochemical Company (KRPC), a subsidiary of the NNPC.

    Though the management of the subsidiary said it had severally alerted the security agencies on how some people siphon the refined products through a nearby river to the refinery, nothing had been done to arrest the situation.

    “Some of the staff of the Kaduna Refinery have suffered injuries and personal losses in our bid to put a stop to the stealing,” the official said.

    Confirming the development in a statement issued recently, the NNPC Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, said the major threat of the refinery is inadequate security, which has been responsible for a huge loss being borne by the Corporation.

    He however disclosed that the Kaduna Refinery is currently operating at 65 per cent installed capacity, producing 1.7 million litres of petrol, 1.7 million litres of diesel and 700,000 litres of kerosene daily.

    He lamented however, that certain percentage of the products is stolen.

    No longer at ease with fuel scarcity

    The Minister for State for Petroleum, Ibe Kachikwu, recently admitted, to a joint National Assembly Committee, that NNPC does not have the capacity to comprehensively supply 100% of Nigeria’s fuel requirement, which is currently estimated at between 30-40 million litre daily.

    According to the minister, billions of Naira repeatedly spent to revamp the existing refineries from 2015-2016, would have at least produced a modest steady output to supplement imported fuel.

    While addressing the NASS joint committee on Petroleum Resources, on 4th January 2018, the Minister also suggested that “non performance of refineries” was due to factors, which include fraud and a lack of holistic maintenance programme.

    Regrettably, however, the Minister did not report what steps were taken to punish the perpetrators of fraud or to indeed, arrest the degree of fraud in these public refineries, which have clearly gulped more money on basic ‘Turn Around Maintenance’ than is probably required to build more efficient new facilities.

    According to Kachikwu, “it got to a point where I started wondering whether as we repair this, somebody was going out there to destroy, so that contracting can be done”. Surprisingly, however, despite media reports of billions of dollars spent, the Minister noted that “over the last 10-15 years, we have not done a serious, conclusive Turn Around Maintenance of these refineries.”

    In retrospect, Kachikwu had, infact, told reporters in Abuja on 15th December 2015, that “fuel price would no longer be fixed” and also noted that “the price of crude would continue to determine what petrol price will be.”

    It is instructive to note that Kachikwu’s statement on fuel price ‘deregulation’, was made at a time when crude oil price, was expected to remain below $40/barrel going forward. Invariably, the December 2017 extremely volatile, fuel scarcity “season”, blew apart earlier permutations and assurances of a stable and sustainable fuel price.

    Ironically, however, instead of celebrating more dollar income from much higher crude oil prices above $60/barrel (especially when budget 2017 benchmark is a modest $44.5/barrel), the reverse is actually the case, as higher crude prices have invariably, induced a landed cost (not pump selling price) of N171/litre, while N145/litre remains regulated selling price.

    However, the Minister confirmed to the Joint Committee of the National Assembly, on 4th January 2018, that the acute fuel scarcity of December 2017 was primarily the result of major factors, such as “diversion of products, low speed of clearing of petrol imports from the ports and a lack of sufficient reserves.”

    Kachikwu further revealed that the disparity between the present landing cost of N171/litre and the current regulated price of N145/litre, has resulted in a daily loss of N800-900m to the NNPC. Consequently, according to Kachikwu, the Executive arm of Government “is currently working on modalities to permanently resolve the petrol crisis, and prevent it from rearing its head any other time”.

    Towards, this end, the minister confirmed that government has lately set up a committee “to find ways out of the pricing problem, until the refineries become functional in 18 months time”.

    The first option, according to the minister is “for the CBN to allow all marketers access to forex at the rate of N204/$1, as against the official rate of N305, so that petrol pump price can remain unchanged at N145/litre.”

    Instructively, however, a casual investigation will reveal that petrol pump price presently hovers around $1/litre in neighboring ECOWAS countries, and this large price disparity will obviously encourage mass cross border smuggling and provide additional subsidy to the economy of our ECOWAS neighbors, despite the burden of higher fiscal deficits for Nigeria.

    The second option that Kachikwus’ committee’s would consider is “to give room for modulated regulation, where petrol would sell at N145/litre in all NNPC outlets nationwide, while Independent marketers could sell their imports at whatever price is profitable from their own outlets.”

    Again, this option is also a no brainer; it is clearly a deliberate ploy for NNPC to gradually reduce its participation in fuel imports, so that, ultimately, private marketers can sell at much higher profitable prices without any subsidy; inevitably, however, much higher fuel prices will sustain higher inflation rates to deepen poverty nationwide. Again, this option is ultimately a camouflage, for full price deregulation and its will invariably pump up fuel price nearer $1/litre(or N305/litre). Ultimately, inflation will invariably spiral out of control if fuel price approached N300/litre or more.

    Modular refineries to the rescue

    The idea of modular refineries which had in the pipeline since the administration of former President Olusegun Obasanjo may have finally berthed after much procrastination.

    Thankfully, Vice President Yemi Osinbajo last December confirmed that 10 modular refineries were at advanced stages of development in the Niger Delta.

    According to his Special Assistant on Media and Publicity, Mr Laolu Akande, the 10 modular refineries were located in five out of the nine states in the Niger Delta region. They are located in Akwa Ibom, Cross River, Delta, Edo and Imo states.

    Osinbajo said that two of the refineries, Amakpe Refinery (Akwa Ibom), and OPAC Refinery (Delta State), have their mini-refineries modules already fabricated, assembled and containerised overseas, ready for shipment to Nigeria for installation.

    The total proposed refining capacities of the 10 licensed refineries stands at 300,000 barrels. “Advanced stage of development for the modular refineries means that the projects have passed the Licence to Establish (LTE) stage, while some have the Authority to Construct (ATC) licence or close to having it because they have met some critical requirements in the licensed stage.

    “There are three stages in the process of refinery establishment; Licence to Establish (LTE), Authority to Construct (ATC) and Licence to Operate (LTO).’’

    The Vice President believes the modular refinery initiative which featured prominently in recent talks between the Federal Government and the oil-producing areas, as represented by PANDEF, will also reposition the petroleum industry. They would ensure self-sufficiency of petroleum products while serving as a disincentive for illegal refineries and oil pollution.

    According to him, the Buhari’s administration is committed to promoting the establishment of privately financed modular refineries so as to increase local refining capacity, create jobs, ensure peace and stability in the Niger Delta. He explained that end-of-the-year review meeting of the Niger Delta Inter-Ministerial Committee was hold at the Presidential Villa, Abuja.

    Osinbajo noted that the Federal Government, in line with its Niger Delta New Vision, was targeting measurable objectives in its efforts towards implementing development projects in the region.

    He added that the December 22 meeting received a report that 38 licensed privately financed greenfield and mini-modular refineries investors have so far indicated interests in the establishment of refineries in the region.

    At least ten of the licensed refineries investors are at an advanced stage of development.

    The Vice President directed the Federal Ministry of Petroleum Resources to keep providing the necessary support and creating the enabling environment for positive investments in modular refineries by engaging key government agencies.

    The agencies include the Niger Delta Development Commission, NDDC, Nigerian Content Development & Monitoring Board, NCDMB, and financial institutions, including the International Finance Corporation, African Export-Import Bank (Afreximbank), Nigerian Sovereign Investment Authority, Bank of Industry, amongst others.

    However, according to Oahimin-Akhimien, who once served as project engineer in Warri Refinery project, said matter-of-factly that the attention and focus on modular refineries is just to calm frayed nerves over the lingering fuel scarcity as such, Nigerian should manage their expectations about the idea.

    Waiting for Dangote refinery

    Interestingly, it is hoped that with the planned completion of Dangote’s 650,000 barrel/day Lekki refinery later this year, Nigerians would indeed heave a sigh of relief as far as availability and cost effectiveness of petrol pricing is concerned.

    But time would tell whether this is a blessed assurance or mere wishful thinking.

     

  • Is the Villa bureaucracy also padding the budget?

    Is the Villa bureaucracy also padding the budget?

    At this rate, by 2019, this government would’ve succeeded in buying enough “Motor Vehicles” to drive the entire country off the edge.

    Thanks to Hon (Dr) Abdulmumin Jibrin, the suspended member of the House of Representatives who had to be suspended, unprecedentedly, for a whole legislative year because the highly compromised souls of the House leadership will be too gutted to always find him too close by. Conscience, they say, is an open wound. As a born again, conscientious objector after being personally implicated as chairman of the House Appropriation committee, Jibrin had turned round to be the peoples’ only source of knowing that: “after the Appropriation Committee received all the budget reports from standing committees, an analysis was conducted. We discovered that about 10 only out of the 96 Standing Committees of the House had introduced about 2,000 projects without the knowledge of their committee members amounting to about N284, 000, 000, 000. I was alarmed. But I was cautious because at our pre-budget meeting with the committee chairmen, I was clearly warned not to touch their budgets. I reported the matter to the speaker. He did nothing about it obviously because he was working behind the scene with the committee chairmen.”

    Although that remains an allegation, Nigerians know only too well that if this happened in the lower House, the Senate must have accounted for double. Or how do you account for some members’ love of exotic cars?  Jibrin, having been so un-comradely, and with President Muhammadu Buhari breathing down their necks over padding, Senate has very quickly – thanks to the distinguished senator, that one of the armoured cars’ fame – come up with a bill that will see them get through the legislative front door, an amount, double if not triple, what was hitherto, being embedded in the budget, annually.

    As is now well known to Nigerians, a bill, sponsored by Senator Oduah, which has since passed the second reading, will when it becomes law, hand over to them 20 percent of the national budget for constituency projects. The about N1.4 trillion will be handed over to them,  they being contractors, so they can construct bore holes, erect market stalls, buy  sewing machines, grinding machines, knitting machines, motorcycles, tricycles etc for their constituents. If President Buhari cannot stop this nonsense, tell these folks they are elected to make laws and perform oversight functions and not to take on executive functions at either the national or sub national levels, then he should seriously consider resigning from office.

    Enough of this utter rubbish like this is the only national assembly on earth.

    The Yoruba say it is one smart Alec that can police another. (ole lo nmo ese ole to lori apata). Given this wise saying, Nigerians must plead with the legislature to, this time around, take a critical look at the budget provisions for the Villa which keep increasing in spite of our very parlous economic circumstances. The legislature should help us to know whether a worse padding had actually been going on at the very seat of power when all we have been doing is put the legislature to the guillotine. Not a few commentators have called attention to these ever ballooning figures and all I need do here is copy and paste their findings. While one of the most popular, or was it ludicrous, aspects of the 2016 budget, that is,  before Nigerians got to hear about padding, was the N3.6 billion earmarked for the purchase of an unspecified number of BMW saloon cars, the items calling for very careful interrogation in the current budget have more than tripled, as we would show.

    One of the commentators referred to above wrote, mutatis mutandis: “The first item is the “Sewage Charges” budget of the State House Headquarters”. It was put at 52,827,800. That means 144,733 per day. Compare this with N 6,121,643 for 2016. This simply means that the vote went up by 1050% compared with the 2015 budget, and 850% when compared with the 2016 budget. The State House Headquarters budget for “Honorarium/Sitting Allowance” is N 556,592,736 while the Jonathan government budgeted 174,471,371 in 2015, and this government, in 2016 jacked it up to 507,518, 861. Have these allowances been increased while workers’ salaries remain stagnant? There is the nebulous thing they call “Residential Rent.” This is something I have failed to understand up till now and I wouldn’t mind someone explaining it to me. That aside, the amount budgeted for this in 2015 was 22,459,575; in 2016 it was 27,735,643. But in this year’s budget of “Recovery and Growth,” this same “Residential Rent” budget went up to 77,545,700. What abracadabra is this? There is an 8,539,200 budget for “Anti-Corruption” and I’m perplexed as to what exactly it is. The last time there was a budget for “Motor Vehicles” or anything like that was in the 2014 budget by the last administration and it was a total of 132,200,000. This government came in 2016 and somehow concluded that the State House Headquarters did not have enough “Motor Vehicles,” so they started by budgeting 877,015,000 which was something like a 650% increase over the 2014 budget for the same item. Yet in 2017, 197,000,000 has again been budgeted for the purchase of “Motor Vehicles” and “Buses.” At this rate, by 2019, this government would’ve succeeded in buying enough “Motor Vehicles” to drive the entire country off the edge. 2016 will go down as one of the darkest years in this country in relation to power supply. So, where is a budget of 319,625,753 for “Electricity Charge” in 2017 coming from for the State house? This was 45,332,433 in the 2016. In 2016 State House Headquarters budget for the “Rehabilitation/Repairs of Residential Buildings” was 642,568,122, while in 2017, it is 5,625,752,757. Meaning that an enormous asteroid most probably managed to destroy the residential building at the State House Headquarters. This goes on until you hit what Olatunji Dare described as a curious affliction in his column in The Nation of Tuesday, 3 January 2017 referring to the never-failing humongous vote for kitchen equipment.  As is Professor Dare’s wont, he put it crisply as follows: “This disorder consists in an obsession with “kitchen equipment,” with cutlery and crockery thrown in, and a predilection for purchasing them year after year, without reference to the quantity purchased the previous year, without having to justify any new purchase, without having to account for the previous year’s purchase, and without the least consideration for cost or consequences”. Of the princely sum of N42billion earmarked for the Villa in the budget, expenditure on food, cooking gas and kitchen utensils is expected to gulp  over N850 million when, specifically, N100, 820,300 would be spent on the purchase of kitchen utensils such as forks and knives.

    It is totally befuddling how the 2017 budget proposals failed completely to take into account the country’s prevailing economic circumstances and all Nigerians can do is plead with the legislature to, for once, do a decent  day’s job by taking a critical look at these budget proposals.

  • Budget 2016: How bureaucracy shot its own foot

    SIR: Old habits, as they say, die hard. This saying played itself out recently between President Muhammadu Buhari on one hand and the civil servants on the other hand.

    Before he announced his cabinet five months after his inauguration in November 2015, President Buhari spent months trying to take stock of the structure of the bureaucracy and positioning of the civil service as the real engine of government with political appointees whom he described as “noise makers” as mere extension of patronage. To Buhari, the bureaucrats are mere victims in the hand of the political class who needed to be strengthened and empowered to stand on their feet through a thorough restructuring and series of reorientation seminars. I am one of those who naively agreed with him on this score hoping that once the beat changes, the dance steps of the civil servants will follow suit.

    Most unfortunately for the president and a host of us who have vague knowledge of the systemic rot in Nigeria’s civil service, the bureaucrats failed the first major test with the 2016 budget.

    Corruption for the civil servants has become a way of life. The chorus down the ladder is “wait for your own time” and they spare no religious ritual to take a shot at the coveted seat of advantage to loot at the miraculous right time. The fact is that the only obvious thing the civil service does very well today is padding the budget year in year out while the rest of us bear the burden. Whilst their top echelon shared the contracts among their companies and cronies’, those down the ladder calculated on how many bidding forms the ministry will sell to undiscerning public for contracts that has been shared and allotted long before advertising the contract.

    This is the bureaucracy inherited by President Buhari in his second coming and I doubt if he ever rightly estimated their savagery. His phobia is really for the politicians who are not better though but  the politicians by nature are more amenable to leadership vision and set goals at least if only for the sake of continued relevance.

    The Nigerian politicians under good leadership can win medals like our soldiers or even our police when they go on foreign missions but not so for the bureaucrats. They were there from the very beginning and they have grown to become the real cancer cells Nigeria must stop from growing. They have seen the inglorious exit of so many well-meaning but inexperienced politicians who ran into their booby traps. Our bureaucrats have become the envy of all professionals because according to the parlance, “they make things happen” through padding of the budget and their perennial errors of commission which our grandchildren will yet pay for.

    Reforming and weaning the civil service from the forbidden fruit of corruption is the mother of all battles President Buhari has to fight and under-estimating the challenge can make overcoming it very difficult if not impossible. There must be a dedicated war against indiscipline, indolence and corruption in the civil service first before the government can stop being a laughing stock before Nigerians and the international community.

     

    • Afolabi Ige,

    Abuja.

  • Innovations in African bureaucracy

    IN Innovation and Best Practices in Public Sector Reforms, Tunji Olaopa gives us an insight into the strategies, ideas, and conditions — an institutional blueprint — for redirecting the focus of public service in Africa, and for making the bureaucracy and the African state globally competitive and development oriented, especially with regard to service delivery. The task of reinventing African bureaucracies serves two significant purposes. One, it raises African states to democratic and developmental significance in a world sold to democratic governance. Two, it gives the African states the needed leeway to participate effectively in global conversation. This is because it is only a developmental and administrative state that possesses the requirements to escape the predicted demise of the state in global reckoning. Given this perspective, the important question, for Olaopa in the book is; how does a reinvented administrative capacity for the public sector (through innovation and best practice) intersect the goal of a sound democratic culture geared towards an all-round national development? He attempts to answer this question in 12 closely woven, and beautifully lucid chapters.

    Olaopa’s book is set in the context of a globalised World, in which over the past two decades, the African public service has been emaciated, devalued, and downsized under a regime of structural adjustment reforms and neo-liberal economic policies. Africa’s public bureaucracy was a major victim of the SAP policies of the 1980s and 1990s. In spite of those challenges, the African public service in varying degrees, in many African countries, has sought to reinvent itself, respond to national and global challenges, encourage innovative practices, set new standards and improve performance.

    Chapters one to three set the conceptual and historical foundation for the meaning of innovation, best practices and reforms. The placement of the idea of best practices in historical context in chapter also necessitates looking at the evolution of new public administration theories and practices. In this case, chapter three was particularly about the New Public Management revolution and the managerial model of service delivery. In chapter four, the author examines the operation of the performance management framework on the development of the administrative and service delivery capacities of selected countries around the globe. In this regard, it is important to note that while the “re-legitimising reform of the public sector” (p. 91) took off from the OECD countries, the successes resulting from the exercise as well as the compulsion for it has a global ramification which crossed the OECD borders to some African countries like Botswana, South Africa, Nigeria, etc.

    No one can really doubt the spread and relevance of the NPM revolution in the evaluation of the administrative capacities of public sector in the 21st century. The author himself premised his analysis of the African bureaucracies on their ability to adopt and adapt the innovation and best practices based on the maxim of not only “letting managers manage,” but managing in order to achieve the goals of economy, efficiency and effectiveness on the private sector managerial model. It is in this regard, however, that Innovation and Best Practices in Public Sector Reforms derives one of its ultimate significance: It offers a structural but critical means of coming to terms with the NPM revolution within the cultural context of the African bureaucracies. Thus, in chapter five, the author raises a note of caution on taking wholesome the message of the NPM which encourages the private and privatisation model as the panacea for making the bureaucracy deliver. But then, the public-private sector partnership is also a crucial dimension of the NPM as well as local governance (chapter six).

    The core of the book can be found from chapters’ seven to eleven where the author discusses those conditions that are necessary for domesticating and establishing successful reforms. These conditions include: knowledge, human resource, capacity building, and governance. For instance, it should be noted that it is knowledge “about customers, about the market, about core processes, about how things get done, about who knows what” (p. 192) that inform innovation and the adaptation of best practices that make organization effective. Knowledge is however not a sufficient condition for ensuring adequate reforms. A further condition is the human capital available for the organisation and utilization of the accumulated knowledge for ‘organisational growth” (208). This is the concern of chapter eight. Again, these two factors must be converted into capacity building, ‘the capability to transform that knowledge into effective decisions and actions that solve development problems for both the short and the long term” (p. 251).

    Chapter ten addresses the nature of governance in Africa. This is essential because the implementation of any reform for successful service delivery is equally a function of the political environment in which the reform is taking place. This becomes crucial in the African context because of the patrimonial nature of the African state: For Olaopa, “the patrimonial nature of the state in Africa has often led to over-bloated government size, since there are often duplication of posts and creation of unnecessary functions and ministries in order to reward clients/cronies. These, by extension, also leads to waste of state resources since two different persons, or more, are paid separately for an individual’s job” (p. 284). This therefore requires a “governance approach” to public service reforms that establishes the linkage among the institutional environment, economic management and the incentive system. The success of this approach, and ultimately the success of reforms on the continent, requires the cultivation of a transformational leadership that will serve as the instrumental catalyst for growth.

    This challenge of leadership forms the focus of chapter eleven of the book. The chapter differentiates between leadership at the political level and leadership within the public service with both involved in a symbiotic relationship. Leadership at the political level is very important for the success of any reform programmes of the civil service because it is this kind of leadership which can help a state “in properly channeling its resources to enhance the fulfillment of its goals of securing the good life for its people… It is this kind of leadership that can ensure that the public service is truly transformed into a corruption-free, performance-driven, result-oriented, customers’, citizens’ and investors’ friendly administrative arm of government” (pp. 311, 312). On the other hand, the leadership within the public service will work to formulate new methods with which the public service “can plan, organise, and direct its energies towards mission accomplishment… ([The leadership initiates) cultural change in the public organisation which will prepare the members of the organisation to cope with, and adapt to, changes of mission, environment, and/or direction” (pp. 314, 315).

    In  the last chapter, the author argues that for the bureaucracies in Africa to make meaningful progress, it must redefine its role in a manner that will accommodate a mixture of three options: one, it must adapt to the dictates of its environment; two, it must be proactive by getting strategic, “i.e. by analysing the current changes and formulating policies and plans to take advantage of the changes” (p. 323); and three, it must assume leadership by shaping its own environment. On the basis of this, the author goes on to draw the relevant lessons that can be learnt from the analyses of public service reforms, especially with the African bureaucracies in mind. The first important lesson he draws concerns the need to “practicalise innovative ideas as a means of promoting social development” (p. 324). This eventually takes us to the need for political will to bring innovative ideas to bear on the development of the people. The second lesson concerns the professional competence of the workforce of the public service. This professionalisation effort will help nurture the “development of the capacity to function in a dynamic public sector environment” (p. 325).

    This book promises to stimulate administrative thinking on the necessity of adapting to global changes in public administration. Most important of all, however, its significance comes from the point that in the presence of such abundant global trends and best practices, there is the urgent need for the requisite political will to convert these practices to an enabling development agenda for providing the good life for the people. I suspect that it is only when African bureaucracies become so enabled that we can truly begin to talk of a genuine independent on the continent.

    The author of the book, Dr. Olaopa is a seasoned bureaucrat, and one of the most intellectually challenging minds in the African and indeed global public service. He has written extensively on public sector reform issues, and leads many initiatives and networks on public sector management in Africa. This book is a major addition to the corpus of knowledge from him in enhancing the performance of the public service in Africa.

     

    •Prof. Adejumobi, is Chief, Public Administration Section, Governance and Public Administration Division, United Nations Economic Commission for Africa (UNECA),Addis Ababa, Ethiopia.

  • Bureaucracy stalls finance houses’ reforms

    Bureaucracy stalls finance houses’ reforms

    The implementation of reforms in finance houses is being hindered by bureaucracy, among which is the Central Bank of Nigeria (CBN) governor’s assent, The Nation has learnt.

    An insider at the Finance Houses Association of Nigeria (FHAN) said stakeholders’approvals have been secured in critical areas, especially in raising the sector’s capital base from N20 million to N100 million.

    This, he said, would ensure that only serious-minded operators were allowed to do business.

    The source also said stakeholders were expecting the new reforms, which are expected to be unfolded by the CBN before the end of second quarter of the year. It is also expected that the reforms would expand the funding structure of the subsector to allow new investors to come in.

    Findings showed that the CBN Board of Governors would release new prudential guidelines for the subsector that includes raising the capital base. Also, other policy issues, such as the appointment of helmsmen would form part of the reforms.

    He said the apex bank might develop a framework that would govern finance lease practice, institutionalise a “funding pool” to stimulate lending and structured programme to address the reputation and poor visibility challenges of the sub-sector.

    He said other pending issues, such as withdrawal of licences of 47 finance houses whose liquidity were called to question last May and funding for the subsector are also being looked into. He said progress was being made at the moment, unlike before.

    President of the association, Samuel Durojaye, said the reforms would reposition the sub-sector to enable it to play more important roles.

    He acknowledged the apex bank’s support to the project. He called on FHAN members to support the bank’s efforts at strengthening the regulatory environment by timely rendering of statutory returns and reports, as well as the renewal of their licences yearly.

    Durojaye enjoined operators to note that the apex bank is taking the issue of corporate governance practices seriously and, therefore, counselled members to identify structural weaknesses in their organisations and take steps to rectify them.

    Unlike banks, finance firms are not allowed to accept deposits. Shareholders, private equity firms, development finance institutions and other institutional investors are some of the sources from which they could raise funds.