The Nation Newspaper

Tag: drain

  • To plug yet another drain

    FINALLY, the Federal Government seems set to plug one of the biggest drains on the nation’s resources: the propensity for political and public officials to travel abroad on the slightest pretext

    The incentives and rewards are attractive: First-Class air travel, or Business Class, never coach, unless the official is flying at his or her own expense, or cannot tie the trip to some government matter, however tenuous; generous expense allowance (or estacode in the language of the bureaucracy) which, for the kind of officials who get to travel at government expense, ranges between $300 and $1,000 per diem, and the many satisfactions that such travel brings.

    Only their capacity for inventiveness sets a limit to how far and how often they can fly out. One political head of a government parastatal who had retired from public service as the head of a law enforcement agency had no qualms about obtaining First-Class round-trip airline tickets to attend two conferences taking place simultaneously at opposite ends of the globe. It was clear that he could only attend one of the conferences, but he could not resist the lure of free money.

    When his under-handed conduct was discovered in an internal audit, he offered to apply the ticket and the estacode for the trip he never made toward a future conference. Any conference. And the more far-flung the venue, and the longer the conference lasts, the better for his pocket and convenience.

    This ethos pervades the public service. And there is never a shortage of excuses for foreign travel.

    The trip may be for something as unexceptionable as medical treatment, or something as spurious as acquiring familiarity with how abattoirs are managed in Spain, Ireland and Denmark, a comparative perspective being much more likely to yield enlightenment than a one-country visit. Or for something as indulgent as writing a committee report

    Officials who travel abroad on government duty deserve a reasonable measure of comfort. But what the Nigerian officials enjoy, and have come to expect as their due, is pampering on a scale that much better-endowed countries consider scandalous. When senior U.S officials, including ambassadors are not flying on a government plane, they fly coach on official business. And their travel allowances cover hotel room rates of about $120 per night, plus meals.

    That is why there have been indignant calls for the resignation of U. S. cabinet officials deemed to have indulged in lavish travel practices at public expense, among them Health and Human Services Secretary Tom Price, Veteran Affairs Secretary David Shulkin, the Administrator of the Environmental Protection Agency Scott Pruitt, and the Interior Secretary, Ryan Zinke.

    Their derelictions include staying at the most luxurious hotels, and in one case, using public funds to pay for a spouse’s expense during a 10-day visit to Europe;  travelling first-class all too frequently, and covering personal expenses with public funds.

    In Nigeria, these practices would hardly cause a stir, and anyone making an issue of them would be dismissed as an envious busybody.

    Yet, it is clear, given the nation’s resources and priorities, that such practices must be curbed.

    As a first step, to be cleared for official travel, an applicant must make a case that a standing review board finds compelling. Second, there should be a tight limit on how many official trips any qualified person can make in a fiscal year. Third, only principal officers of state should fly first class; lesser officials may out of security considerations and on a case-by-case basis be approved for Business-Class travel. All others should fly coach.

    Fourth, the estacode is indefensibly large. It lies at the heart of the thirst for foreign travel by government officials. It has to be cut.

    Finally, fifth, the health care delivery system must be raised to a level that can handle all but the gravest emergencies. Daily, one hears of government’s determination to turn Nigeria into a destination for medical tourism. The task cannot begin too soon.

     

     

  • Money down the drain

    •That is what spending $300m to fix any of our refineries is

    For how long will the Buhari administration continue to dilly-dally on the nation’s refineries? Just when we thought that it was close to pushing through an agreement to cede their financing and operations to the private sector, Minister of Petroleum Resources, Ibe Kachikwu, in a stupendous volte-face has again recanted. Kachikwu, aside denying knowledge of plans to concession the Port Harcourt refinery also stated that a technical committee set up by the government to undertake a review of repair of the refineries was coming up with a holistic investment figure to fix them.

    Now, the same refinery – once described as scrap by Kachikwu, would, according to him, require $300 million to repair. And then the catch – it was better to engage the company that built the refinery, in the first instance, for its repairs, due to the availability of spare parts and knowledge of the configuration.

    If only the nation has not been on this route before. The same proposal to bring the original equipment manufacturers was made by the administration of President Olusegun Obasanjo, following the bungling of the Turn Around Maintenance (TAM) by the administration of General Sani Abacha. Soon after the proposal was made public, vested interests came together to frustrate the plan. With limited options left to revamp the refineries, Obasanjo, with only a few days left in office later handed over the Port Harcourt and Kaduna refineries to the Bluestar Consortium for $750 million –amidst the charge of not following due process – a charge that would be upheld by his successor, the late President Umaru Yar’Adua, who aborted the deal barely two months after Obasanjo’s exit from office.

    Thereafter, it has been a case of jumping from frying pan to fire. Whereas the late President Yar’Adua prevaricated to no end – understandably due to his then failing health; President Goodluck Jonathan who took over following his demise kept pouring billions of naira into what had become a bottomless pit.  As for the agreement signed by the administration with the Chinese government on May 13, 2010, for the construction of three greenfield refineries in Lagos, Bayelsa and Kogi states for a princely sum of $23 billion, it is yet to see the light of the day.

    It is unfortunate that the Federal Government cannot make up its mind on what to do with the refineries. Ten years after the sale – which from the benefits of hindsight ought to have been allowed to stand, neither the country’s quest for uninterrupted fuel supply nor the Nigerian National Petroleum Corporation’s fortune has been enhanced in any shape or form. If anything, the conditions of the four refineries continue to deteriorate; and this is in spite of the nearly $2 billion allegedly sunk into the various TAMs ever since. If we had imagined that the earlier signals from the minister in favour of letting the moribund entities go would herald a fresh push for their long-term sustainability in private hands, this has since given way to a frenetic pace to bring them up with public funds even if it means risking further damage to an already strained treasury. Of course, President Buhari has always believed that the entities should be in government’s hands, even in their obsolete state.

    Should the Buhari administration proceed with doling out the proposed $300 million on the proposed TAM, it would have merely followed the path of the administrations before it – a path that led nowhere.  Even if the economy were less challenged as it is currently, the idea of throwing nearly a third of what is required to build a modest refinery into refurbishing those scraps would be absurd. It is akin to putting money into a bad venture. It makes neither business nor economic sense.

  • Avoidable drain

    •It is high time government reviewed software licensing agreements

    It is again another classic Nigerian paradox: a nation of eager, IT-savvy youths; yet one where wholesale dependence on imported software solutions in industry and commerce rules. According to Dan Azumi Ibrahim, Director-General of the National Office for Technology Acquisition and Promotion (NOTAP) – the Federal Government agency responsible for registering and monitoring all software before they are deployed – more than 99 per cent of the software packages that are used in the banking industry in the last six years are imported.

    Hence his lament: “If you see the quantum amount of money that leaves this country as software licensing fees, you will shed tears. In fact, it is with pains and difficulty that we approve those agreements”.

    The banking industry is however not alone. In fact, the same is true of the oil and gas industry, the information technology (IT) sector, the manufacturing sector as indeed, ministries, departments and agencies (MDAs) of governments. Today, the combined annual loss to the economy – in terms of the cost of acquisition and maintenance of foreign software – is currently put at N400 billion – up from the N200 billion that it was in 2012.

    It is a story that Nigerians are only too familiar with – the never-ending paradox of a nation that does best at exporting what it does not have while importing what it has a surfeit of, or has the potential to produce locally. We recall that 10 years ago, former President Olusegun Obasanjo actually issued a directive that all MDAs must patronise local personal computer (PC) makers and software developers. Indeed, the 2006 Federal Government circular signed by the former Secretary to the Government of the Federation, Ufot Ekaette, specifically directed all MDAs to patronise made-in-Nigeria software and locally assembled computers as a priority choice of applications for all their functions. The verdict, 10 years on is that this directive is being observed in the breach.

    Overall, whether it is in the oil industry where the nation currently struggles for a measly 10 percent local content after more than 50 years of oil exploration, or in the banking industry that has been in operation for more than 120 years, the story is the same, of missed opportunities to grow local pool of talent and hence a vibrant local industry.

    We understand the impregnable odds faced by our local PC assemblers and software developers compared with their foreign counterparts. Where infrastructure is not lacking, they make do with virtual absence of any form of institutional support. With due respect to many of our local software developers that have proven to be world-class, we understand that a good number of them still have a long way to go, at least as far as bringing their efforts to international standards.

    The truth however is that the story of technical inadequacy is not nearly half of the story of what has become a culture of preference for anything foreign and its twin – corruption which allows top executives of entities – private and public – to double as fronts to foreign software companies, to repatriate humongous amounts of foreign exchange annually under the cover of maintenance and annual licensing fees.

    One immediate solution is for the Federal Government to give practical effect to the 2006 circular. Not only will the measure save humongous costs, it would certainly boost local software development efforts and ultimately, youth employment. Secondly, it seems to us that the time has come for the Federal Government to undertake a comprehensive review of software licensing agreements not only to promote skills/knowledge transfer but to discourage needless capital flight.

    At this time, fresh initiatives to assist the local software developers to acquire the muscle to compete with their peers globally would clearly be worth every dime spent on it.

  • Another drain pipe

    Another drain pipe

    •FG’s plan to set up devt bank seems another ploy to duplicate agencies

    The Federal Government’s decision to start a development bank with N10 billion is tantamount to following a lead to nowhere. Over the years, successive governments have always believed that the best way to spur development is to establish a new agency, institution or parastatal and throw money at challenges. And, because this is a lazy and jaded approach, such measures have always failed.

    There is no doubt that one challenge that Nigerians would want to disappear immediately is poverty. Nigerians want the pride of their country restored and realise that the only way to do this is to have a country listed among developed countries –  one respected for its solid economy and fair political practice. At the moment, given government policies and the level of commitment of its officials, this appears a dream.

    We find it difficult to understand why the Jonathan administration thinks the establishment of a development bank would perform the magic. Has the President and his advisers thought through why the Bank of Industry (BOI) is still struggling to come to terms with its mandate?

    At the moment, banks are dedicated to promoting agricultural development, renewal of infrastructure and there have been suggestions that it will serve the country well if a Construction Bank is established. Yet, we remember that the cornerstone of the banking sector reform by the Obasanjo administration was to have banks strong enough to play this role and even compete internationally. The banks have not changed. Interest rates still stand at the same cut-throat levels that cannot grow the critical sector.

    One other measure that the governments of Nigeria have found attractive is the provision of intervention fund. In recent years, such dedicated funds have been made available to airlines, the textile and the entertainment industries. Yet, the effect has been negligible. Home movies produced by Nollywood are still technically deficient. The thinking that goes into writing, acting, editing, directing, producing and packaging the movies fall far below regional and international standards.

    The Obasanjo government had thought that providing cheap funds for the aviation industry was enough to improve safety of passengers and rescue the sector. It failed. Some of the companies that accessed the funds made available merely funnelled the money into other things that did not benefit the country. They still collapsed and, because they were sufficiently criminally minded to fund the ruling political party, the proprietors got away with the crime.

    It is therefore surprising that the government is yet to learn from all these that merely throwing money at problems does not necessarily bring about changes. What a leader is expected to do is study the situation and motivate the leaders of the industry to buy into workable plans.

    We are concerned that the new move to establish development bank is being made at a time that another general election is at hand. Experience suggests that our governments begin ingenious search for means of misappropriating public funds for selfish political gains when elections are around the corner.

    Duplication of agencies never helped the country in the past. Nothing suggests the result would be different this time. We therefore call on the National Assembly to patriotically rise to the defence of the country by blocking this move. It is another drain pipe.

    Besides, money is only one of the challenges of development in the country. We need power, which is crucial, yet, in spite of the huge funds sunk into the power sector, electricity supply remains as epileptic as ever. We have to be more serious about this as well as fix other infrastructure if we truly desire to achieve our developmental goals.