By Otive Igbuzor
Public Administration is very important
for any country because it is the machinery that provides service to citizens
and the public.
But all over the world, there are challenges of public
Administration requiring the need for constant reform and continuous
improvement. The need for Public Administration Reform is widespread across the
world such that the United Nations Development Project (UNDP) supports 380
projects in 112 countries covering various aspects of Public Administration
Reform.
Public Administration in Nigeria is faced with a lot of
challenges. Meanwhile, the politics and economy of the country revolves around
natural resources. The management and governance of natural resources is
therefore crucial in Nigeria. This is particularly so as we approach the 2015
elections.
Nigeria is blessed with a lot of human
and natural resources. Nigeria is the largest economy in Africa and is
by far the continent’s most populous country with a population of about 170
million people. However, despite the rich human and natural resource endowment,
poverty is widespread with about 70 percent of the population living on less
than one dollar per day.
The oil sector is the mainstay of the Nigerian
economy. The abundant natural resource in the country has turned to a curse. Nigeria has about 35 billion barrels of proven oil
reserve and another 5 billion in development. The oil sector accounts for about
95 percent of expert revenues, 76 percent of government revenues and about a
third of the nation’s Gross Domestic Product.
Similarly, Nigeria has an
estimated 180 billion cubic feet of proven natural gas making it the ninth
largest concentration in the world. Unfortunately, Nigeria flares about 70
percent of the gas it produces and reinjects only 12 percent making it one of
the countries that flares the greatest amount of gas on planet earth.
There is an
emerging consensus that the development of a country’s natural resources should
be designed to secure the greatest social and economic benefit for its people.
But it is clear that the enormous oil resources of Nigeria have not translated
into benefits for the citizens.
There are a lot
of challenges in the oil and gas sector. There are no mechanisms to verifiably
measure the volume of oil at the point of production i.e the well head. There
is no independent, objective and fair oversight of the sector. There is serious
environmental degradation.
There are no regular independent audits to
international standards. Even when there are reports on the environment such as
the United Nations Environmental Project (UNEP) report, the recommendations are
not implemented. There are controversies over what appropriate fiscal regime is
fair, equitable and will allow for growth of investment in the oil and gas
sector. There are a lot of issues with oil contract and license
allocation.
The oil and gas sector in Nigeria is
opaque with lots of allegations of corruption and management. In the recent past,
there has been the House of Representatives investigation of subsidy regime
in Nigeria, the Aig Imoukhede Technical Committee on Fuel Subsidy and the
Ribadu Report of the Petroleum Revenue Special Task Force. All of these probes
show that there is mega corruption going on in the oil and gas sector.
Oil
theft continues unabated despite the effort of government and security
agencies. According to NEITI Audit report 2009-2011, Nigeria losses N578.990
billion annually to oil theft and NNPC owes government $5.8 billion from
Liquefied Natural Gas which has not been paid into the federation account since
2006.
There are a lot of issues that need to
be addressed which have bearing on Public Administration in the oil and gas
sector in Nigeria. We will address five of them. The first issue is the legal
framework for management of the oil and gas industry.
Before or
immediately after the 2015 elections, there is the need to settle the legal
framework guiding the operations of the oil and gas sector through the passage
of a Petroleum Industry Bill (PIB) that will guarantee proper management,
transparency and accountability in the sector.
There are issues to deal with in
the current PIB including Community Host Fund; exemption of the national oil
company from application of Fiscal Responsibility Act 2007 and Public
Procurement Act 2007; gas flaring restoration of the environment and
discretionary powers.
Section 116 of the PIB establishes a
fund to be known as the Petroleum Host Community Fund {PHC Fund} which is to be
used for the development of the economic and social infrastructure of the
communities within the oil producing areas.
All over the world, there are
mechanisms to compensate host communities. In Alaska, USA, it is done through cash transfer. In Indonesia, funds are
disbursed to improve governance at community level through expansion of
citizens’ role in setting priorities for spending. In Peru, a growing
portion of oil and mining revenues is administered by regional and local
governments.
In Ghana, the government allocates 10% of total amount of royalties
received to stool land through the
Office of the Administrator of Stool Land. In Azerbiajan, the government pays for
spaces occupied by pipelines 60 years upfront. In addition, the provision for
exemption of the National Oil Company from the application of the Fiscal
Responsibility Act 2007 and Public Procurement Act 2007 need to be removed from
the bill.
Similarly, the Provision that the flare out date of gas flaring
will be determined by the Minister need to be amended. Furthermore, whereas Section 293 of
the Petroleum Industry Bill (PIB) sought to hold operators in the sector
responsible for the restoration of damages done to the environment, Section 293
(2) gives them an open window to shy away from this responsibility because
sabotage of oil facilities and tampering of pipeline and storage facilities
which this subsection exempts them from are all incidentals to this
responsibility.
The responsibility to safeguard the environment and the safety
of the masses cannot be sacrificed for the criminal acts of a few people.
Finally, the discretionary powers vested on the President and Minister of
Petroleum Resources on oil licensing and other issues are too wide and it is
subject to abuse.
There is need to make the powers of the President and
Minister subject to due process and institutions such as National Assembly, the
Nigeria Extractive and Transparency Initiative (NEITI), Media and Civil Society
Organisations to enhance checks and balances in the operation of the petroleum
sector, which is a very sensitive sector to the Nigerian economy
The second issue is policy. Following
the passage of the PIB, there is the need to elaborate on several policies that
will ensure proper management of the oil and gas and indeed other natural
resources. There is the need for clear policies separating regulation and
business. In addition, there is the need for a systematic way of policy making
and clear process criteria or mechanism for filtering policy ideas instead of
reliance on the Minister to “determine, formulate and monitor government policy
for the petroleum industry” as stated in the PIB.
The third issue is the need for rules,
procedure and system that will bring about effectiveness, efficiency and
accountability in the oil and gas sector. In every sector in Nigeria,
there is the need for rules, procedure and system of doing things. This is the
only way that corruption can be reduced. It has been proven that absence of
transparency and accountability is a fertile ground for corruption in any
society.
According to the Robert Klitgaard formula, Corruption= (Monopoly + Discretion) –
(Accountability + Integrity + Transparency)
Wherever there is monopoly and
discretion combined with absence of transparency, accountability and integrity,
corruption thrives. One way to combat corruption is to create systems,
mechanisms and procedure that make corruptible transactions difficult.
This will include laws, financial guidelines, internal controls and due
process. It must be emphasized that enactment of laws and creation of systems
and mechanisms do not translate to improvement of transparency and
accountability and elimination of corruption. There are several actions that
can be taken to strengthen transparency and accountability. After enactment of
the laws and creation of the systems, there must be a concrete strategy of
implementation with what is to be done, who to do it, when and how.
The
capacity of officials to implement the laws and systems must be built to ensure
clinical execution. The capacity of legislators on oversight especially
in budget implementation need to be built. The capacity for Civil Society
Organsisations for monitoring the implementation of the laws and the budget
should be built.
This should include the capacity to design and use tools to
hold government accountable such as social audit, budget analysis, report card,
use of technology, public interest litigation and protest/demonstration. The
capacity of the media should be built to hold elected officials accountable as
a constitutional responsibility.
The fourth issue is organisational
structure. Many organizations perform poorly as
a result of several interlocking factors including inappropriate structure,
lack of understanding of their mandate; lack of or poor strategy to
operationalise policies, weaknesses in the agencies or organizations in terms
of capacity, competence, capability, culture, creativity and control (the six
Cs of organizational effectiveness).
Organisational structure is
the formal system of tasks and reporting relationships that determines how
employees use resources to achieve organisational goals. The important
determinants of organisational structure include the nature of the
organisational environment, the type of strategy the organisation pursues, the
technology the organisation uses and the characteristics of the organisation’s
human resources.
Passage of the PIB will result in unbundling of the NNPC
and there will be the need to focus on organizational re-engineering and creating
a structure that will be effective and efficient.
Finally, there is the need to address
the issue of personnel. It is well established that the personnel of an
organisation determines the performance and greatness of the organisation. The
key to organizational performance are people. In fact, some scholars have
pointed out that attitude is the basis for everything in life. Attitude
determines how people react in adversity; ability to grow and to learn and
ability to overcome challenges and create bond with others.
It is a product of
instilled beliefs, programming and (brainwashing). It is important to
point out that attitudes are guided by underlying ethical values and beliefs.
Ethics is the system of rules that governs the ordering of values. Ethics
are moral principles or beliefs about what is right or wrong. The aim of ethics
is to identify both the rules that should govern people’s behavior and the
‘goods’ that are worth seeking. Ethics guide people in their decisions about
what to do in various situations. Values are principles of conduct such as
integrity, accountability and respect.
A strong positive attitude is required
for success in any undertaking. Organisational scholars are agreed that
employees with positive attitude tend to be more productive because they always
see the accompanying opportunity with every challenge. Indeed, it can be argued
that the possibility of a person to perform a task depends more on attitude
than ability as the average human being has the inherent capacity to carry our
most tasks.
The average human being is known to use only about ten percent of
its capacity. Geniuses are known to use about 30-40 percent. Therefore, the
reform of any organisation requires the right kind of attitudinal change to get
the desired performance. It is important to note that beliefs determine
attitude and perception of reality.
But we can change what we perceive by
changing our attitude. As one scholar argued, we can consciously shift our
attitude in order to change our beliefs or we can remain unconscious and allow
our attitude to be determined subconsciously by our subconscious beliefs. It
has been argued that a positive attitude depends far less on things going right
outwardly than on an inner determination. Meanwhile, attitudes can be taught.
This is why it is necessary to have a framework for attitudinal change in the
oil and gas sector.
It is important to point out that the
challenges of the management of natural resources is not unique to Nigeria. It
is a global problem. It has been documented across the world that
resource-rich countries have performed worse than those with smaller endowments
leading to phenomenon that scholars now refer to as resource curse.
Countries
that depend on oil for their livelihood are among the most economically
troubled, the most authoritarian, and the most conflict-ridden in the world.
When compared to countries dependent on the export of agricultural commodities,
mineral and oil exporting countries suffer from unusually high poverty, poor
health care, widespread malnutrition, high rates of child mortality, low life
expectancy, and poor educational performance - all of which are surprising
findings given the revenue streams of resource-rich countries.
Scholars have
shown clearly the linkage between overdependence on oil exports and the
production of weak public institutions, authoritarianism, corruption, conflict
and primitive accumulation of wealth through collection of bribes and contract
inflation.
Despite this negative proposition, it
is necessary to point out that over the past decade, there is an increased
understanding of the problem and what needs to be done to turn resource curse
into resource blessing. What needs to be done is to have a proper resource
governance.
Natural resource and environmental governance refers to the formal
and informal institutional mechanisms used by society to address environmental
issues and concerns that challenge it. It includes regulatory compliance and
actions by civil society organizations, scientific community, the private and
public sectors to deal with environmental issues.
Natural resource
governance is the set of strategies aimed at improving the transparency and
accountability of governments and private companies during the licensing,
exploration, contracting, extraction, revenue generation and allocation of
natural resources. Environmental governance is the sum of organizations, policy
instruments, financing mechanisms, rules, procedures and norms that regulate
the processes of environmental protection.
The three key elements of
environmental governance are adequate environmental laws and regulation with
proper enforcement; good practice by companies and corporate responsibility and
transparency and accountability with participation of communities and civil
society organizations.
Over the years, there have emerged
internationally recognized regulatory responses in the oil and gas sector.
These include land use in a way that is environmentally sustainable; limitation
of emission of gas, water and waste; proper economic instruments including
royalties and taxes (e.g. pollution tax) and participation of communities and
civil society organizations. In the recent past, the Natural Resource
Charter has been produced with clear principles that can aid resource governance.
Civil society organizations have a
great role to play in enthroning resource governance in Nigeria. Learning from
experiences of the past, there is the need to organize in new ways using tacit
coalition of organisations with different organisations focusing on issues that
they have comparative advantage.
The organisation for advocacy and campaigns
for change should involve stakeholders with constituency and large following
including labour organisations, professional organisations, religious groups,
media, institutions, journalists, bloggers and celebrities. There is also the
need to use multiple platforms including social media, town hall meetings,
rallies and citizens gatherings.
Dr.
Otive Igbuzor, a Pharmacist, Human Rights Activist, Policy Analyst, Development
Expert and Strategist is Executive Director, African Centre for Leadership,
Strategy & Development (Centre LSD). He holds a doctorate degree in Public
Administration.
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