PUBLIC SERVICE REFORMED IN NIGERIA

ABSTRACT

It is both a truism that no nation develops beyond the capacity of its public service, and there is broad consensus amongst Nigerians that our public service is broken and dysfunctional. The quality of public servants and the services they provide to our nation are both below expectations. From the glorious days at independence when the best and brightest graduates competed to join the administrative service up until 1970s, our public service is now seen as employer of the dull, the lazy and the venal. We need to retrieve our old public service – effective, well paid and largely meritocratic, attracting bright people imbibed with a spirit of promoting public good.

The Nigerian civil service evolved from the colonial service with its historical British roots of an independent, non-political and meritocratic administrative machinery for governing the country. Each region then had its civil service in addition to the federal service.

What is the public service? How did our public evolve from inception to excellence and now its current abysmal state of ineffectiveness? How can the public service be reformed, re-skilled and right-sized to provide the basic social services that will earn the trust of Nigerians and foreigners alike?

INTRODUCTION

In generic terms, the civil service is an employment system that is based on hiring, retaining and promoting employees on their qualifications and ability to the work. According to Encarta World English Dictionary (1999.349) civil service constitute all government departments of a state and the people who work in them. Specifically, civil service has been described as an institution which has the pivotal role of carrying out (and advising on) government policies (Tijjani Muhammed Bande (2001.1). The civil service in the words of Emeka Emmanuel Okafor (2005.67), is also seen as that apparatus of government designed to implement the decision of political leaders. Political leaders make policy, the civil service executes it and if the civil service lacks the capacity to implement the policies of the political leadership, those policies, however well intended will not be implemented in an effective manner.

The civil Service Hand book (1997.17) is more emphatic. It describes civil service as a body or organ which enjoys continuity of existence. Its members are not limited to a short term of office. When a civil servant relinquishes his office for whatever reason his place is taken by another person who similarly enjoys security of employment. Civil servants according to the Handbook command a pool of experience and know-how for implementing government policies. It recognises that while the civil service is the instrument of the government of the day, the service and its members are not permitted under the law to be partisan of any political party. The civil servant is also required to assist in formulating and implementing the policies approved by the government irrespective of its personal or private opinions or attitudes towards such policies. Another feature of civil service is that it is indispensible irrespective of the type of government in power (whether military or democratic regime)

The Nigerian Civil Service consists of employees in Nigerian government agencies other than the military. Most employees are career civil servants in the Nigerian ministries, progressing based on qualifications and seniority. Recently the head of the service has been introducing measures to make the ministries more efficient and responsive to the public.

Public sector reforms are usually challenging to implement, particularly in countries with limited political will for reform. This has been highlighted in various literatures. An interesting paper by Geoffrey Shepherd titled ‘Civil Service Reform in Developing Countries: Why Is It Going Badly? critically analyses the ‘universal approach’ to civil service reforms (merit based reforms) and acknowledges the difficulties it faces. It also makes some useful recommendations on how Civil Service Reforms (CSR) can be made more successful. Though written 10 years ago, and focused on the ‘core civil service’, many of the issues presented in the paper are still relevant today and are useful for wider public sector reforms.

HISTORY OF PUBLIC SERVICE REFOMED

The Nigerian Civil Service has its origins in organizations established by the British in colonial times. Nigeria gained full independence in October 1960 under a constitution that provided for a parliamentary government and a substantial measure of self-government for the country's three regions. Since then, various panels have studied and made recommendations for reforming of the Civil Service, including the Margan Commission of 1963, the Adebo Commission of 1971 and the Udoji Commission of 1972-74. A major change occurred with the adoption in 1979 of a constitution modeled on that of the United States. The Dotun Philips Panel of 1985 attempted to reform to the Civil Service. The 1988 Civil Service Reorganization Decree promulgated by General Ibrahim Babangida had a major impact on the structure and efficiency of the Civil Service. The later report of the Ayida Panel made recommendations to reverse some of the past innovations and to return to the more efficient Civil Service of earlier years. The Civil Service has been undergoing gradual and systematic reforms and restructuring since May 29, 1999 after decades of military rule. However, the civil service is still considered stagnant and inefficient, and the attempts made in the past by panels have had little effect.

In August 2009 the Head of the Civil Service, Stephen Osagiede Oronsaye, proposed reforms where permanent secretaries and directors would spend a maximum of eight years in office. The reform, approved by President Umaru Yar'Adua, would result in massive retirement of Permanent Secretaries and Directors, many of whom are from the North. Stephen Oronsaye has said that his goal is for the Nigerian civil service to be among the best organized and managed in the world. Oronsaye retired in November 2010 at the statutory age of 60 and was succeeded by Oladapo Afolabi.

Organization

The civil service is mainly organized around the federal ministries, headed by a minister appointed by the President of Nigeria, who must include at least one member of each of the 36 states in his cabinet. The President's appointments are confirmed by the Senate of Nigeria. There are less than 36 ministries. In some cases a Federal minister is responsible for more than one ministry(e.g. Environment and Housing may be combined)and a minister may be assisted by one or more ministers of State. Each ministry also has a Permanent Secretary, who is a senior civil servant. The ministries are responsible for various[parastatals(government-owned corporations) such as universities (Education), National Broadcasting Commission Information and Nigerian National Petroleum Corporation. Other parastatals are the responsibility of the Office of the Presidency,such as the Independent National Electoral Commission, the Economic and Financial Crimes Commission and the Federal Civil Service Commission. The service has six additional units which provide services to all departments on the Civil Service:

• Establishments & Record Office (E&RO)
• Career Management Office (CMO)
• Manpower Development Office (MDO)
• Management Services Office (MSO)
• Common Services Office (CSO)
• Bureau of Public Service Reforms (BPSR)

REFORMS IN THE CIVIL SERVICE

The civil service has under gone several reforms from the period of colonialism through military regimes up to the current democratic administration in Nigeria. Some of the reforms include: Tudor Davis and Harragin commission of 1945 & 1946 which reviewed the wages and general condition of service in the civil service.

The Corsuch Commission of 1951 which was charged with enquiring into the structure and remuneration of the public service.

The Udoji Public Service Review Commission of 1975 which introduced the unified Grading and Salary structure in the Service.

The civil service reform of 1988 through Decree No 43 of 1988. Among all the reforms, the 1988 reform was the most elaborate. It was meant to achieve the following objectives:
• Enhance professionalism, decentralisation and delegation of functions,
• Institute checks and balances
• Promote general modernisation
• Enhance the combination of responsibility with authority
• Align the civil service with the spirit of Executive Presidentialism
• Enhance efficiency, effectiveness and speed of operations( Philips 1990, 1989, 1988)
On the other hand, the Nigerian reform efforts have been vitiated or undermined by lack of strong concurrence between the desire to reform and those charged with the governance of the country. This then makes the issue of political configurations critical.
The reforms have sought to improve the performance of the civil service through managerial and structural reforms by exploring ways of making them catalysts of change. They include:
(i) The Public Service Reform of 1974/75:
This was perhaps the first reform of the whole of the Nigerian public service (the civil service, parastatals, local governments). First, it harmonised and unified job grading and salary scales throughout the public service. Instead of the multitude of grading and salary systems, it replaced these with a 17- step Unified Grading and Salary Structure (UGSS). Second, it fixed a minimum pay for all public officers, with the results that public servants’ salaries were substantially upgraded to keep pace with inflation. Thirdly, it made a strong case for introducing private sector management methods into the public service as a way of introducing a new approach to management in the public sector. The most important among these methods were management by objectives (MBO), Project Management (PM), Plans, Programme and Budgeting System (PPBS) and the Open Reporting System to replace the confidential reporting system in use up till that time. It made a strong case for the creation of a senior management group within the civil service which should be the focus and chief promoter of these changes, and see policy making and the management of change as its primary responsibilities. Fourthly, the reform made a case for the introduction of a new code of conduct for all public officers and instituted the public complaints commission and the anti-corruption bureau. Finally, in order to ensure that new management orientations were inculcated by all line and staff, a very elaborate programme of training and retraining was put in place.
The reform was quite ambitious both in terms of coverage and the substance and range of the measures it canvassed.
(ii) The Reform of Local Government, 1976.
Local government was one of the institutions included in the 1974/75 public service reform. The government then embarked on a global and comprehensive reform of local governments. The reform re-defined local governments and changed their orientation from field administrations of the state governments to being semi-autonomous local government structures that were responsible to their local electorate. Increasingly, local governments, both under civilians and military administrations were largely appointed by state or federal government. Some state governments cancelled or took over local government revenues or denied them their entitlements. The local government units have therefore been as distant and artificial as the state or national government units.
(iii) Reform of largely Parastatals, 1986- 1993.
Estimates of the total number of public enterprises (PEs) in Nigeria in the early 1980s range from 600 to 1,700, depending on how one defines them and whether or not one includes state government PEs. The rapid growth of PEs has been fuelled in Nigeria by the phenomenal rise in oil revenues, with practically all of the royalties accruing to the central government. PEs were perceived as instruments for controlling the ‘commanding heights of the economy’ as stipulated by the 1979 constitution but also for indigenizing the economy, mobilizing resources in terms of jobs and capital and administer ‘natural’ monopolies. The major problem, however was that these parastatals were so poorly managed, as several commission reports revealed. The primary reason was that the boards of management of these organizations were usually filled with party stalwarts, or heads of civil service agencies or retired army generals (under military rule) without respect to their qualifications, competence and background. There were also problems with respect to conflicting objectives of parastatals, poor financial and personnel management practices, poor record keeping and lack of attention to productivity.

A. WHY IS IT IMPORTANT TO TEACHING AND LEARNING
It is important to teaching and learning because all this reforms were intended to improve on the character of work ethics and values in the civil service. Such values and ethos directly affect the individuals who perform duties as civil servants guided by the rules of the service.

B. THE RELEVANT OF SYSTEM APPROACH TO THE PRODUCTION MANAGER
The relevance of the system approach to the production manager can be stated below;
-it calls for division of labour to enable workers know their quota as well as boast production rates
-it makes the production manager to be instructive as to the day to day activities in the firm
-there will be an increase in production capacity since all activites follows due process by passing from one stage to the other.
-the approach enable the production manager to take inventory of daily production capacity as well as determine the rate of production.

C. THE IMPACT OF MANAGEMENT INFORMATION SYSTEM ON BUSINESS ORGANISATION IN OIL COMPANIES IN RIVERS STATE.

The impact of management information system on business organization in oil companies in Rivers state cannot be over emphaised. This impact can be outline below.
-it has ensure transparency in the oil industry
-it has ensure adequate data capturing and analaysis of information received
-it has also ensure the best use of GPS,GPRS and PHOTOIMAGERY to improve oil production capacity in Rivers state and the country in general.
-it has ensure and enable the various oil companies in the state to be link or connected to the outside world by ensuring that all activities in the nation’s oil and gas sector are done in accordance with laid down principles, policies and laws.
-it has increase awareness in the sector especially as it relates to our upstream and downstream sectors in the state and the federation as a whole.

NECESSARYCITY OF PUBLIC SERVICE REFORM IN NIGERIA

On the face of it, public administration is usually taken to mean “the planning, organizing, directing, coordinating, and controlling of government operations.” This conception would very often direct and tend to limit attention to the institutions of public administration vis-à-vis their design, structure, managers and their capacity to do what they are designed to do.

But a much more robust view of the concept would also involve the context, or what could be variously described as the ecology, within which those activities referred to as public administration take place for this determines to a far greater extent the success or failure of public administration. This perhaps makes the discourse more relevant to Nigeria which is the focus of the book under review, Public Administration and Civil Service Reforms in Nigeria, written by Dr Tunji Olaopa.
  The context of public administration would quickly shift emphasis on to the time-honoured but infamous realm of politics and the state. Certainly, and in accordance with the pluralist argument, the state is not the only realm where politics takes place. However, notwithstanding the objection of the pluralists, the state remains the quintessential realm within which the distinguishing feature, specific to the political, can be best apprehended. The book delves into the theories of public administration, and to what extent these have shaped its practice in Nigeria, and how and why the practice of public administration in  the country have brought about the need for reforms of the civil service.
The nine-chapter book is a good and balanced compendium on Nigeria’s public administration as it traces its evolution way back to before the country’s independence in the colonial era to the present times. It also examines its prospects and challenges, and offers solutions to the myriad of problems that plague Nigeria’s public administration.
Chapter One, “Theories of Public Administration”, is a comprehensive exploration of the theories of public administration from the classical to the human relations, the behavioral, system theory, up to the current orthodoxy, the New Public Management (NPM). The rather detailed examination of administrative theories in this chapter offers a necessary historical trajectory of the theoretical evolution of public administration up to the NPM which constitutes the theoretical framework for the book.
Chapter Two, “The Civil Service and the Ideas of Reform and Professionalism”, narrows the focus a little to the civil service and the idea of professionalism. Here, the book explores how the concept of civil service came about, and how civil servants came to be conceived as professionals with the attendant ethos and values that go with it. There is also a brief look at various liberal economic theories of civil service as they evolved to be the driving forces for continuous administrative reforms up to the emergence of the NPM, which is a more radical departure from what is generally conceived to be the normal, continuous administrative reforms that bureaucracies constantly embark upon (pp. 38-49). A focus on the NPM as the current global reform blueprint is a connecting theme of the first two chapters.
Chapter Three, “Survey of the Development of Public Administration in Nigeria”, traces three phases of administrative development in Nigeria vis-à-vis the era of colonial tutelage, the era of institutional transfer, and the period of home rule. Here, an insight is also provided into the contributions of scholars, professionals, professional bodies, and training institutions to the development of public administration in the country.
Chapter Four, “Evolution of the Nigerian Civil Service and Reform Initiatives”, sheds light on the origin of the Nigerian civil service. It traces its history to its colonial origin as an institution that was modeled on the British civil service as part of the “migrated social structures” (Ekeh, 1980) from metropolitan Europe. It also follows the course of its development from the Lyttleton Constitution of 1954, which effectively established regional civil services in the country, to the acceleration of Nigerianization, through the short-lived First Republic, to the beginning of military rule in 1966. The chapter highlights the fact that the military began to tinker with the civil service right from the start, as witnessed by the promulgation of Decree 34 in May 1966 by the Aguiyi Ironsi regime, which unified the hitherto regional civil service structure. This was followed later by reform commissions –Adebo and Udoji commissions – set up under the Yakubu Gowon government.
There was also the 1988 civil service reform of General Ibrahim Babangida, and the 1995 Ayida Reform Panel constituted by the Sanni Abacha regime. It has been the case that virtually every military regime in Nigeria, except those whose stay in power was too brief, tinkered with the civil service in one way or the other in the name of reform, with the attendance consequences many of which are unwholesome to the performance capacity of the service. The chapter closes with a chronicle of some of these negative impacts of military rule on the civil service in the country (pp. 141-146).
Chapter Five, “The State and Public Administration in Nigeria” examines the context of public administration in Nigeria. By devoting this chapter to the discussion on the state and public administration in Nigeria, the book gives a deserved recognition to the political dimension of any reform process. Unlike the position held by classical administration theorists, typified by Woodrow Wilson –now widely recognized as flawed –which called for a strict dichotomy between politics and administration, Dr Olaopa emphasizes the strong nexus between the two, and therefore, advocates as a necessary requirement for the success of reform that it encompasses both the technical, and the political, which is best embodied by the state as “a core element in the organisation of a society” (p.147).
The emphasis on the state in the reform process is particularly pertinent as the relevance of the state to its citizens is defined by the competency, effectiveness, and efficiency of its public administration apparatuses, just as the latter are affected and indeed determined by the nature and character of the state. In this regard, the chapter raises quite appropriate and intriguing questions as to the kind of state that is promotive of development.
Using Nigeria as its focal point, the author goes on to shed light on the character of the Nigerian state and the consequential impact of this upon the public administration institutions. He then goes on to emphasize the importance of building a capable state in Nigeria while also noting the crucial role of political leadership in that enterprise.
Chapter Six, “The Obasanjo Civil Service Renewal Programme, 1999-2007”, examines the rather comprehensive civil service reform of the Olusegun Obasanjo civilian regime. The Obasanjo government came to power against the background of Nigeria’s emergence from years of destructive military rule, severe economic depression, serious crisis in governance and public administration, international isolation, and the spreading wave of democratization-cum market economy accompanied by the NPM revolution. The preceding 15 years of military rule had wreaked so much havoc on virtually all the facets of the country’s public life that Nigeria required a root and branch transformation to get back in shape. This is the context that set the Obasanjo government on the path of reform. The chapter surveys the background to the reform, digging into the monumental challenges that confronted the regime and the vision of the leadership for lifting the country out of the doldrums and taking it to its El-Dorado. Highlighting the NEEDS implementation framework for the reform, it provides elucidation on the various components of the reform plan, and concludes with a detailed critique of the reform strategy and programme (p. 179).
Chapter Seven, “The SERVICOM Initiative in Perspective”, puts the SERVICOM initiative in perspective – a very important NPM element of the Obasanjo renewal reform – and plunges into its nitty-gritty as a service delivery initiative. It offers an exposition on the SERVICOM structure, on its use as a performance measurement index with details on how the measurement is done (pp. 212-213). It also touches on the achievements of SERVICOM and its challenges with a lot more details than can be justifiably dealt with in a few pages of review.
Chapter Eight, “Civil Service Reforms and the Yar’Adua Administration”, brings the book up to speed on the efforts of the current administration along the reform path. As a follow-on from the Obasanjo reform, the Yar’Adua government adopts a 7-point Agenda as a fulcrum around which its reform would revolve. The chapter thus explores the continued emphasis of the government on building a capable and viable civil service towards achieving the goal of development. It is acknowledged that being only two years in office (as at the time of writing the book), it would be difficult to assess conclusively the reform measures put in place by the administration. Nonetheless, Dr Olaopa takes up some of the steps that the administration had already instituted, especially in view of the president’s commitment to the principle of “rule of law” and “servant-leadership” (p. 229). Within the context of the NPM the chapter addresses itself well to the crucial role of the permanent secretary as a manager/chief executive in ensuring an effective civil service in the country (p. 238).
Chapter Nine, “Elements of an Optimal Public Administration System Model for the Nigerian Federal Civil Service: The Way Forward: A Conclusion”, addresses the important structural and behavioural issues that need to be taken on board in redefining the Federal Civil Service for enhanced performance. These structural and behavioural issues are embodied in what the author calls the Optimal System Model. The elements of the Model which he recommends are: (a) changing the cadre or pools system to functional fields of specialization; (b) establishment/workforce control and management of growth of the service; (c) establishment of professional and ethical values in the conduct of government business; (d) installation of integrated public service human resources information system;  (e) professionalisation of personnel administration function at the centre and line ministries level; (f) new training policy and leadership development; (g) institution of a new career/professional development scheme; (h) institution of a new system of performance management/staff appraisal and promotion systems; (i)  new pay, compensations and incentive system; (j) abolition of the executive cadre and limiting of career protection to senior posts; (k) creation of a senior executive service;  and (l) modernization of systems and processes using e-government solutions.
The structural and behavioural issues are useful and appropriate as they are in keeping with public sector reforms being undertaken in other African countries. They are also in tune with current trends in countries like the United Kingdom, United States and Canada.
Overall, Dr Olaopa’s book offers a robust exploration, on the one hand, of the problems and challenges of public administration, and on the other, the problems and prospects of reform. The book could be said to contain the two key elements in confronting the issues of public administration: the technical/organizational dimension, and the ecological/political dimension. While the first four chapters deal exhaustively with the first dimension, chapters five to eight address the latter dimension. Using Nigeria as a case study, the sections on the state and public administration, the Obasanjo renewal programme, the SERVICOM initiative, and the Yar’Adua administration put the issue of public administration reform in their proper political and leadership context. They establish a connection between the state, visionary and good leadership, effective public administration institutions, satisfactory service delivery, and legitimacy, thus situating the whole reform project within their proper democratic governance context. Hence, the book provides a very rich material on public administration and reform especially with particular reference to Nigeria. 
Public Administration and Civil Service Reforms in Nigeria is not only rich in pointing out the weaknesses of prevailing reform programmes, but also comes up with alternatives, where necessary, and ways of fixing the weaknesses identified. Thus its closing chapter offers an optimal public administrative model for the civil service in Nigeria. It does not only put forward the model, but gives a careful, step-by-step account of how the model is to be incorporated into the Nigerian system; and in this, Dr Olaopa sits pretty well as a practitioner with insider knowledge of the workings of the system.

FERDERAL GOVERNMENT REFOMED AGENDA (FROM 1999 TO 2007)

    The economic philosophy of the present Federal Government is hinged on the market: “that government has no business in business”. Therefore, all the existing government projects, plants, enterprises, refineries and shareholdings in industries, trade, banking, finance and agriculture must be privatised and sold, so that government, particularly the Federal Government, can concentrate on governance, forgetting that a government that cannot run an industry successfully cannot govern efficiently. So, the Bureau of Public Enterprises (BPE) has been very active, since the present regime came on board on May 29, 1999, in selling off enterprises, including houses and other landed properties owned by the Government. Such a philosophy violates the Nigerian Constitution not only by abandoning the control of the major sectors of the Nigerian economy but also by offering Nigeria for sale to domestic and foreign private interests and concerns.

      1999 Constitution and the Privatisation Orgy

(i) Chapter 1, Part 1, Article 3, of the 1999 Constitution of Nigeria provides that, if other law is inconsistent with the provisions of the Constitution, the Constitution shall prevail, and that law shall to the extent of the inconsistency be void.

(ii) Chapter II of the Constitution contains the FUNDAMENTAL OBJECTIVES AND DIRECTIVE PRINCIPLES OF STATE POLICY

(iii) Article 16(1) of Chapter II provides that, “The state shall, within the context of the ideals and objectives for which provisions are made in this Constitution”

16 (1)  (a) “harness the resources of the nation and promote national prosperity and an efficient, a dynamic and self-reliant economy”

(b) “control the national economy in such a manner as to secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equality of status and opportunity”.

(c) “without prejudice to its right to operate or participate in areas of the economy, other than the major sectors of the economy, the state shall manage and operate the major sectors of the economy”.

(d) “without prejudice to the right of any person to participate in areas of the economy within the major sectors of the economy, the state shall protect the right of every citizen to engage in any economic activities outside the major sectors of the economy”.

      16(2)   The State shall direct its policy towards ensuring;

16(a) “the promotion of a planned and balanced economic development”. There is no planned economic development today of 4-year, 5-year – 10-year or 25-year Development Plan, as was the case between 1946 and 1985. Planning the economy of Nigeria ceased when the Babangida Regime introduced the IMF-World Bank imposed Structural Adjustment Programme (SAP) in 1986. Economic planlessness has been more greatly emphasised, since 1999, in deregulation, privatisation, down-sizing of the public service and reform agenda of the Obasanjo regime. The present regime seeks to ensure the continuation of planlessness on the nation through a succeeding surrogate regime by getting the PDP be re-elected at all costs in the general elections of April 14 and April 21, 2007.

Article 16(b) of the 1999 Constitution provides also: that, “the material resources of the nation are harnessed and distributed as best as possible to serve the common good”, while Article 16(c) provides that, “the economic system is not operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of a few individuals or of a group”.

      The on-going privatisation of public enterprises and their sale to a few privileged Nigerians and foreigners are violations of these noble and unambiguous provisions of the 1999 Constitution. The destruction of the houses of Nigerians in the Federal Capital Territory, Abuja, and the sale of the Federal Government houses, nationwide, in which many civil servants, parliamentarians and other Nigerian citizens live, without providing the affected citizens with alternative accommodation is also a violation of the provision of Article 16, Section 2(d) of Nigeria’s Constitution, which provides that, “suitable and adequate shelter shall be provided for all citizens of Nigeria”. Also, the reversal of the pension benefits of public servants and the deduction from their monthly wages for pensions, in place of the earlier non-contributory pensions; the non-payment of pensions and gratuities, as and when due; the retrenchment and retirement of public servants; the non-creation of employment opportunities and the non-payment of unemployment benefits to those forced into unemployment, are violations of the same Article 16, Section 2(d) of the Constitution, which further provides that, “suitable and adequate food, reasonable national minimum living wage, old age care and pensions and unemployment benefits, sick benefits, and welfare of the disabled shall be provided for all citizens of Nigeria. The enforcement of contributory pension scheme on public servants already in the public service, in the name of pension reform, is a violation of Article 173 of the Constitution, which protects the existing pension rights of public servants 

DERELICTION OF RESPONSIBILITY BY THE NATIONAL ASSEMBLY, SINCE 1999, WITH RESPECT TO THE ECONOMIC WELFARE OF NIGERIANS

      In order to protect the economy from being operated against the collective interest of Nigerians, by a dominant minority, Section 4 of Article 16 of the Constitution provides that, “ the major sectors of the economy, to be managed by the State, shall be construed as reference to such economic activities as may, from time to time BE DECLARED BY A RESOLUTION OF EACH HOUSE OF THE NATIONAL ASSEMBLY TO BE MANAGED AND OPERATED EXCLUSIVELY BY THE GOVERNMENT OF THE FEDERATION, and until a resolution to the contrary is made by the National Assembly, Economic ACTIVITIES BEING OPERATED EXCLUSIVELY BY THE GOVERNMENT OF THE FEDERATION ON THE DATE IMMEDIATELY PRECEEDING THE DAY WHEN THIS SECTION COMES INTO FORCE, WHETHER DIRECTLY OR THROUGH THE AGENCIES OF  A STATUTORY OR OTHER CORPORATION OR COMPANY, SHALL BE DEEMED TO BE THE MAJOR SECTORS OF THE ECONOMY”.

      It is obvious that the on-going privatisation of the enterprises of government also violates this provision, since neither or both of the Houses of the Nigerian National Assembly have acted in consonance with this section, inspite of the BPE Act No. 4, enacted by the National Assembly in 2002. Nigerians should continue to shout that the on-going privatisation policy of the Federal Government is a violation of all the relevant provisions of the 1999 Constitution, with respect to the management and control of the Nigerian Economy. 

STATE AND LOCAL GOVERNMENTS AND ECONOMIC PLANNING

      In order to ensure that not only the National Assembly but also the States Houses of Assembly and the Local Government Councils participate in the planning and in the control of the nation’s economy, Article 7(3) of the 1999 Constitution (on Local Government system) provides that, “ it shall be the duty of a Local Government Council within the State to participate in economic planning and development of the area, and to this end an economic planning board shall be established by a Law enacted by the House of Assembly of the State”. No Local Government Council in Nigeria, since 1999, to my knowledge, has established a Planning Board or has participated in economic planning of its State! Also, no State House of Assembly has enacted any law for that purpose. On the other hand, all that we are fed with daily by the reformist Federal Government is that government has no role in the economy and that rather than plan, it is the market and the private enterprises that should plan and develop the Nigerian economy and grow it to become one of the largest 20 economies in the world by 2020!

EDUCATION AND THE FEDERAL GOVERNMENT

      The disregard of the Nigerian Constitution is not only with respect to the physical economy but also with respect to the education sphere. Article 18 of the Constitution provides for the Educational Objectives of the country. In this regard, Article 18, Section 3, provides that, Government shall strive to eradicate illiteracy and to this end, Government shall, as and when practicable, provide:

(a) free compulsory and universal primary education

(b) free secondary education

(c) free university education

(d) free adult literacy programme

      Instead of working towards making education free at all levels, the Federal government plans to privatise all its hitherto owned, financed and managed Federal Government Unity Secondary Schools under a dubious public-private partnership (PPP) administration through which it seeks to reduce the Federal Government financial and administrative commitments to the Unity Secondary School. Instead, government should be grant-aiding the existing privately owned primary and secondary schools, so as to reduce their costs to the youths of Nigeria. Furthermore, the Federal government and the National Universities Commission (NUC) continue to license private universities, including those owned by the President, the Vice President and the leading members of the government and their business partners. These private universities will charge, and are charging, exorbitant fees, thus making education at the university level, as in the primary and in the secondary school levels, less and less free and more and more expensive so as to make education available to a decreasing percentage of the Nigerian population. The Public Private Partnership proposal of the Federal Ministry of Education is thus not only a violation of the provisions of Article 18(3) of Nigeria’s 1999 Constitution but also a disservice to the present and the future youth of Nigeria.

DENIAL OF FUNDAMENTAL RIGHTS OF NIGERIANS

      Chapter IV, Articles 33-43 of the 1999 Constitution, provide for the Fundamental Rights of Nigerians, that is, the:

(i) Right to life (33)

(ii) Right to dignity of the human person (34)

(iii) Right to personal liberty  (35)

(iv) Right to fair fearing (36)

(v) Right to private and family life (37)

(vi) Right to freedom of thought, conscience and religion (38)

(vii) Right to freedom of expression and the press (39)

(viii) Right to peaceful assembly and association (40)

(ix) Right to freedom of movement (41)

(x) Right to freedom from discrimination (42)

(xi) Right to acquire and own immovable property anywhere in Nigeria (43)

      All of these rights have not been adequately promoted and protected by the Nigerian government since 1999. Innocent Nigerians have been killed in their own homes, on the roads, in assemblies, and in their work places more than at any other peaceful and democratic time in our nation’s history. Nigerians have been denied their rights of peaceful assembly. Economic, Financial and legal agencies of Government have been used to harass innocent Nigerians on discriminatory bases and for not belonging to the ruling political parties or to the section of the ruling political parties that is a crony of the government. Properties acquired in other parts of Nigeria by Nigerians had been destroyed by government agencies, under the nebulous pretence that they violated plans made many years ago, but which were unknown to Nigerians. Fair hearings had been denied to public officers who had been arbitrarily retrenched, retired or dismissed. Politicians, including parliamentarians and governors, had been removed unjustly or impeached unconstitutionally because they refused to kow-tow to the whims and caprices of the ruling elite. Press barons had been killed or their premises burnt because they held and expressed opinions different from those of the ruling elite. Nigerians have been persecuted and are being persecuted and their freedom restricted. They have been threatened with arrest and detention because they did not, and do not, become a puppet of the ruling elite. Towns and villages had been bombed and razed to the ground, because their leaders expressed opinions different from those running the government. Because of the unconstitutional behaviour and the neglect of the government to cater for the welfare of Nigerians, the nation has become seized by miscreants who have constituted themselves as dangers on our highways, in our own homes, to our banks and even to our foreign visitors, workers and investors who are frequently held as hostages. The non-respect for the Constitution of Nigeria has become the regular behaviour of the ruling elite. These should not continue to be so in a democratic Nigeria, governed under the provisions of the 1999 Constitution.

NEO-COLONIALISM AND THE FEDERAL GOVERNMENT

      The majority of Nigerians supported the emergence of President Olusegun Obasanjo and the PDP into the governance of Nigeria in 1999, partly because of the assumed nationalistic stance and achievements of General Obasanjo, as the Military Head of State during 1976-79. His 1976-79 regime championed the freedom from colonialism of many African countries, particularly of South Africa, Zimbabwe, Mozambique, Namibia, etc, with money, men and materials. Nigeria became the haven for freedom fighters in Africa. The 1976-79 regime nationalised the British Petroleum Company (BP) and renamed it. African Petroleum Company (AP). It nationalised land by passing the Land Use Decree. It passed the Indigenisation Decree by which Nigerians became the managers of not only the commanding heights of the nation’s economy but also it provided Nigerians with the wherewithal to manage and promote small and medium enterprises. It established the Bank of Commerce and Industries (BOI), and the Nigerian industrial Development Bank (NIDB). The Regime initiated legislation for the establishment of more Commercial and Merchant Banks, which later regimes imitated to increase the number of banks from 21 in 1979 to 90 in 1999. The regime championed the establishment of the second Port Harcourt Refinery; the Kaduna Refinery and the Warri Refinery, which led to the increase in the number of refineries from one in 1976 to four by 1983. Through these measures and the planning processes emanating from them, the Nigerian economy grew at an annual average of 7% during the 1970s until the early 1980s.

      However, since the second coming of General Obasanjo and the PDP regime in 1999, reverse nationalistic stance has become the order of the day. Rather than pursue nationalistic economic and political policies to the benefit of Nigerians, the regime has completely sold out to the Western Imperialistic Nations, to the extent that Nigeria, today, is less independent, economically and politically, than it was in 1960 or in 1979. A few examples will suffice.

ECONOMIC DEREGULATION AND PRIVATISATION

      The present regime has completely imbibed the imposition of what has become known, world-wide, as the “Washington Consensus”, propagated by the World Bank, the IMF and the Western Imperialist Powers, in order that they will continue to control and direct the economic policies of countries that have no independent economic policies of their own.

      The Washington Consensus: The phrase, “Washington Consensus”, is a term in development policy proposed in 1990 by the Washington-based financial institutions of the World Bank, the IMF and their subsidiary agencies. It signifies neo-liberal, neo-colonial, market economic policies which are not meant to provide an effective framework for combating poverty nor for generating rapid economic growth. Rather, it is designed to tie perpetually the economies of client economies to the apron-spring of the metropolitan ‘Western economies. The main planks of the “Washington Consensus” were propounded by John Williamson, a World Bank Consultant, and is a synonym for neo-liberalism and market fundamentalism. In its broad terms, the principles enunciated in the ‘Consensus’ were, designed principally for the Latin American countries. The Washington Consensus contains ten broad propositions:

(i) Fiscal discipline via a Fiscal Responsibility Bill that restricts, rather than promotes, public investment in the economy.

(ii) Redirection of public expenditures towards areas that offer both high economic returns and the potential to ensure income distribution, and the provision of basic physical, social and economic infrastructures away from public responsibility to the private domain.

(iii) Tax reform, so as to lower marginal rates and reduce the tax burden in favour of the rich.

(iv) Interest rate liberalisation, so as to enable banks and other financial Institutions to charge the ‘market’ determined rates of interest that are not normally beneficial to the lower income investors, and small and medium scale entrepreneurs.

(v) Free and market determined exchange rates, causing recurrent currency devaluations, particularly in the dependent economies, thus depressing the value of the incomes of wage earners and of the dependent groups in the economy. It renders the value of the national currency virtually worthless and inconvertible internationally.

(vi) Trade liberalisation and the abandonment of trade regulation by the government of developing economies in favour of the metropolitan economies of the West, in a manner that increases the adverse balance of trade of the poorer economies in their trade relations with the developed western economies.

(vii) Dependence on inflows of foreign direct investment as the main engine of growth of the developing economies, a dependence that has had the negative effect of causing capital flight away from the poor economies into the developed economies.

(viii) Privatisation of publicly owned enterprises and the reduction or minimisation of the role of government in the economy

(ix) Deregulation of the economy, particularly the abandonment of economic planning based on time sequences of 4-year-5-year-ten year or other types of perspective planning.

(x) Security of property rights in favour of the rich or of the endowed few, so as to prevent the imitation of the Japanese type of development, through the domestication of foreign technology and expertise.

      The 10 propositions were regarded as reforms which should be imposed on pliant countries that agree to be tied to the apron-strings of the developed economies. The original proponents of the Consensus have now admitted that the imposition of a majority of the propositions is harmful to developing economies, particularly currency devaluation, privatisation, trade liberalisation, deregulation, market determined economic policies and dependence on the free flow of direct foreign investment. All the Latin American countries, for which the consensus was originally designed, have rejected the main pillars of the consensus. Some of the Latin American countries, like Venezuela, Bolivia and Peru, are now nationalizing private foreign enterprises and are emphasising the dominant role of government in their respective economies. The original proponents of the 10 principles have admitted, in various fora and in publications at conferences, that the proposals are not immutable and should not be apishly adopted. The East Asian countries have also rejected the consensus, since the 1996 Asian Economic Crisis, and have denied the role of direct foreign investment as the main pillar of their continued development programmes. It has been further admitted that:

(a) Privatisation has become controversial in many parts of the world and has been rejected because of its right-wing anti-people economic consequences.

(b) Deregulation is equally not a policy that reverberates in the more rapidly developing economies of South East Asia (South Korea, Thailand, Singapore, Malaysia, Indonesia, Hong Kong and Taiwan-the Asian Tigers), where the economic policies pursued run much in the opposite direction.

(c) The Consensus is a conservative, right-wing capitalistic, rather than a progressive economic policy. It is more suited to developed than to the developing economies

(d) The Consensus is a geographically and historically specific reform agendum for Latin America in 1990 and not meant to be adopted, hook line and sinker, by other geographic areas of the world, where the economic situations are different. The proponents of the Consensus have confessed that they had not considered the African or the Asian economic scenes when they propounded the consensus; and that some have wrongly interpreted the Washington Consensus as an economic manifesto valid for all places and at all times. They admit that it has become foolish to advocate, as the Federal Government has been doing, rabid liberalisation and privatisation, which is a new form of economic imperialism. The proponents also admit that liberalisation does not necessarily imply a swing to market fundamentalism and a minimalist role of government. Thus, countries that adopt the Washington Consensus are more World Bank/IMF minded than the two institutions themselves and are thus slaves to policies that had not been tested to have succeeded anywhere in the developing world. The concept, design and implementation of Nigeria’s privatisation programme have been under the aegis of the World Bank/IMF. The Bureau of Public Enterprises (BPE) itself confessed that it continued to enjoy the best support from the World Bank and its affiliates as partners in progress and that an arm of the World Bank, the International Finance Corporation (IFC), has been serving as the sole adviser of the Federal Government with respect to the effective implementation of its privatisation programme since its inception in 1999, inspite of the fact that such privatisation orgy has not succeeded in any part of the developing world. 

WASHINGTON CONSENSUS AND POVERTY REDUCTION

      It is now generally admitted that market fundamentalism, neo-liberalism, privatisation and the minimisation of the role of the government in the economy do not offer effective agenda for reducing poverty, because they do not sufficiently build or rebuild the human capital. On the other hand, the Washington Consensus policies are inimical to the cause of poverty reduction in developing countries. Rather, they exacerbate the poverty of the poor. Also, pursued, as Nigeria has been doing, the Consensus could precipitate an economic tragedy of the type that occurred during the South East Asian crisis, which gave rise to the sudden total collapse of the South East Asian countries economies. The type of privatisation being pursued by the present Federal Government allows the plundering of the national assets for the benefit of an elite few. It is also agreed that no universal economic model, like the Washington Consensus, should be imposed on a country desirous of rapid economic growth. It offers very little and warrants little or no support as a sufficient economic policy directive for serious people-oriented policies. It does not promote equitable income distribution, rapid economic growth or a decent economic and social environment. Instead of sticking slavishly to the principles enunciated in the Washington Consensus, a new economic policy should be advocated that more adequately reflects the goals of development and enhances the chances of local rather than foreign ownership of the means of production for more rapid and equitable economic growth. In many parts of the world today, there is visceral hatred for free markets of the type being advocated by the present regime. It is only practised by the lackeys of the IMF/World Bank and their Western sponsors. Much of the revenue derived from privatising public enterprises, for instance, is not directed to the build-up of human capital or to stimulate productivity in the economy. Rather, it goes pari passu with retrenchment of workers, that depresses the economy, instead of the employment of more workers that stimulates the economy. It gives rise to unduly increased foreign currency reserves which are kept away in developed economies while the citizens wallow in abject poverty and squalor at home.

      Devaluation of the Currency: By embarking upon recurrent currency devaluation, as has been the case in Nigeria since September1986, the poor has become poorer and the rich few have become richer and the economy has consequently become poorer. Thus, $1USA which was the equivalent of 50kobo in 1979, and 60 kobo in 1986, became the equivalent of N68 in 1999 and N130 today, without the income or the wage earnings of Nigerians being correspondingly increased in compensation. Thus, N1 today is worth ¹/₂₆₀ of its worth in 1979, when President Obasanjo left office as the Nigerian Military Head of State. N1 today is worth only about 50% of its worth in 1999, when Obasanjo resumed office as Nigeria’s Head of State. This is why per capita income per annum of Nigerians, which was equal to $450 in 1980, has fallen to $275 today. It is because of the slavish adoption of the Washington Consensus, of following free/floating Naira exchange rates. It is now broadly agreed that neither free market exchange rates, slavishly pursued by our Central Bank, nor rigidly fixed exchange rates is ideal. Rather, an intermediate policy between the two, with limited flexibility, in a government managed form, is ideal for a developing economy like Nigeria. Discretion, rather than rigidity to untested economic policies, is the hallmark of intelligent economic managers. Such tested economic managers are very few in the present federal government set-up.

DOMESTIC VERSUS EXTERNAL DEBT

      In 1999, when the present regime came into office, Nigeria was owing N537.5billion domestic debt and N633.1billion external public debt. The domestic and the external debt miasma commenced from the jumbo external loans and the flippant domestic loan that the Obasanjo regime took in 1978, when such loans were not needed by Nigeria. The succeeding regimes wallowed in spurious domestic and external borrowings so that by the end of 2005, the outstanding domestic debt of Nigeria had increased to N1,525.9billion, about three times that of 1999, and the outstanding external public debt had risen to N4,890.3billion ($35.95billion) also about thrice that of 1999 in naira terms, mainly because of the fall in the value of the naira over the period. These domestic and external debts were owed, inspite of the fact that crude oil prices of Nigeria rose from $16.5 per barrel in 1999 to $70.2 per barrel in 2005. The trajectory increase in the domestic and in the external debts were due to the profligacy of the federal government, despite its down-sizing of the public sector, its due process and its avowed fiscal responsibility. Rather than repay domestic debt, pay pensions, gratuities and other domestic creditors, in order to reflate and enhance a more rapid growth of the economy, the regime embarked upon the repayment of external debt, in order to please its foreign sponsors and its greedy foreign partners and get their support for the unconstitutional determination of the regime to perpetuate itself in office till 2020. The regime bought the bait of the Western creditor nations to pay $12.5billion of the debt at a tranch, in order to receive $18billion debt relief, an amount which no other debtor-nation in history has ever paid at once. While some of the other debtor countries in Africa, Asia and Latin America, 42 of them, are obtaining complete debt write-off, Nigeria paid such a huge ransom, because the Nigerian Government has more money than sense. Of course, the Western creditors had begun to observe that, because of its domestic economic and political policies, the present regime might run Nigeria into disintegration and might make it impossible for the creditors to be repaid should Nigeria go into pieces, like the former Russian Empire. So, today, the regime is still being pressured to pay much of the remaining $5billion external debt, even when the huge domestic public debt of N1,526 billion is left unattended to. In addition to the outstanding domestic public debt, the regime is owing N875billion in pension and salary arrears, apart from N160billion it is owing to the Lagos State Government in withheld statutory allocation, contrary to the decision of the Nigerian Supreme Court. In effect, the economic charity of the federal government begins and ends abroad and ignores the home. It is this huge unpaid domestic debt, plus unpaid pensions and gratuities and the withdrawal of government from actively promoting the economy, that has led to the increased miseration of Nigerians. Majority of Nigerians are poorer, economically, today than they were at the inception of the present regime in May, 1999.  

FISCAL RESPONSIBILITY AND NIGERIAN EXTRACTIVE INDUSTRY TRANSPARENCY INITIATIVE (NEITI)

      As part of its major reform planks, the present regime prides itself with fiscal responsibility. It has, in its pursuance, sent to the National Assembly a Fiscal Responsibility Bill, designed to:

(i) improve intergovernmental fiscal coordination

(ii) promote fiscal macro-economic stability

(iii) promote fiscal prudence and sound financial management

(iv) ensure transparency and strengthen accountability, and

(v) provide a conducive climate for generating growth and reducing poverty

Again, the Fiscal Responsibility Bill is a carbon copy of the USA Fiscal Responsibility Act of 1982, transplanted into Nigeria. Our Presidency has a fleet of about 5 aircraft and 4 helicopters for use by the leading members of the regime to gallivant around Nigeria and around the world, while the National Airline, the Nigerian Airways, had been killed and sold by the regime and replaced by a privately owned British Airline, the Virgin Airline! The Presidency alone has 89 Special Advisers, Assistants and Aides, the highest number of aides by any Presidency in the World today, including the USA Presidency. The copy of America’s Fiscal Responsibility Act is another demonstration that none of the so-called reform agenda of the present federal government is homegrown. Yet, the regime is insisting that the reforms must continue after the present regime. It must not continue to be so. The reform agenda must be jettisoned because they hold down the economy of Nigeria. They criminalise and pauperise Nigerians. If our governments will comply with the copious fiscal and financial provisions in the 1999 Constitution, that is, Articles 80-89; 120-129; 162-168; and 225-229, Nigeria does not need a Fiscal Responsibility Act. Also, the existence of the Revenue Mobilisation and Fiscal Commission, provided for in the Third Schedule, Part 1, Section 31, and Article 153 of the 1999 Constitution, further renders the Fiscal Responsibility Act redundant.

      With respect to NEITI (Nigerian Extractive Industries Transparency Initiative), the present regime is the only one in the history of Nigeria, where the President also holds the Federal Ministry of Petroleum Resources. Thus, few people in Nigeria, since 1999, have been able to ask and obtain the necessary and true information about the revenues and expenditures of the Petroleum Industry, not even the National Assembly nor the Federal Executive Council. The President has kept hold of the Petroleum Ministry, the mainstay (90%) of the total Government revenue, exclusively to himself. The Presidency has thus been allocating the lifting of crude petroleum oil and oil blocs as it deemed fit to associates and to foreign development partners, after supposed open bids for such allocations. The regime is lackadaisical in the repairs of the four existing Nigerian refineries. Rather, it prefers to import fuels for domestic use through and from the countries of our development partners. There has been no audited accounts of the Petroleum Ministry since 1999! Thus, NEITI is a suspect at home and abroad. No wonder that there was the recent outburst of scandals in the management of the Petroleum Technology Development Fund (PTDF), which is only a microcosym in the petroleum industry. No wonder that Nigeria, the 8^th largest producer of crude oil in the world, is suffering from acute shortage of domestic fuels, and has depended increasingly on the importation of fuel oils, and has been toying with the privatisation of the four refineries. Other oil producing countries in OPEC (Organisation of Petroleum Exporting Countries) are nationalizing their oil industry, building additional domestic refineries, acquiring refineries in other foreign countries and are exporting refined petroleum products. Only Nigeria among the 11 OPEC countries, Algeria, Indonesia, Iran, Iraq, Kuwait, Lybia, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela, is pursuing a domestic energy policy of sell-out of its petroleum resources to foreign and to domestic capitalists. Nigeria built a multi-million dollar Bonny Export Terminal in the 1990s for the exportation of excess refined petroleum products. Today, the Terminal has been transformed into an Import Terminal!

DOWN-SIZING/RIGHT-SIZING OF THE PUBLIC SECTOR

      Since May 29, 1999, the present regime has retrenched about 4.8million Nigerians in the civil service, in the statutory corporations, in the state-owned companies, in the banks, and in the insurance companies, through its reform policy of down-sizing the public sector of the economy and minimising the economic role of government. It has continued to place emphasis on the private sector as the engine of growth of the Nigerian economy, whereas the private sector is very weak in Nigeria and depends for its survival and continued growth on the public sector. Because of the jaundiced reform policy in this sphere, many public enterprises have either collapsed, closed down or been sold to foreigners, while the public service which was once vibrant, productive and incorruptible has become a haven of corruption, inefficiency and stupor. The erstwhile security of tenure of the civil servants, other things being equal, has become a mirage. Retirements and retrenchments, without due process, have become the order of the day since May, 1999. The down-sizing of the public sector has consequentially led to the down-sizing of the private sector, because the economic managers in government do not appreciate that a decelerating public sector also leads to a decelerating private sector, and vice-versa. It is an immutable economic causation.

      The reform policy of down-sizing the public sector is itself borrowed from the IMF/World Bank. In its January 1999 symposium, published in the World Bank Economic Review, Volume 13, number 1 of January, 1999 (214 pages), the World Bank had as its main theme, “Public Sector Down-sizing”, “A symposium Issue on Efficient Public Sector Downsizing”. It contained the following sub-themes and topics:

(i) Public sector down-sizing: An introduction

(ii) Cross-country evidence on public sector retrenchment

(iii) The efficient mechanism for downsizing the public sector

(iv) Earnings and welfare after downsizing

(v) Matching severance payments with worker losses in the Egyptian Public sector, and,

(vi) The Algerian retrenchment system

      Also, the World Bank Research Observer, Volume 17, Number 2, 2002, discussed, “Public Sector Downsizing, the Gender Implications of Public Sector, Downsizing: the Reform Program of Vietnam”. It will again be seen that the so-called public service reforms are not this regime’s original thinking but are imposed reform agenda by the World Bank, the IMF and by our Development Partners. That is why, we see the Development Partners but Nigerians do not see any worthwhile development in the Nigerian economy. The downsizing of the public sector has been abandoned even in developed countries of USA, Canada, Europe and in the developing countries of Asia and Latin America, because of its negative multiplier effects, that is, its economic deceleration effects. Retrenchment leads to reduced consumer demand which reduces the propensity to produce and which leads to reduction in the rate of growth of the gross domestic product. It is a suicidal economic policy. All true and sensible reformers in history have increased rather than reduced, employment quantum in very significant manner.

BANKING REFORM AND NIGERIA’S ECONOMY: The Large Banks

      When the present regime came on board in 1999, there were 90 banks in Nigeria, 73 of which were categorised as sound/satisfactory, while 17 were rated as marginal/unsound. But as a result of the unsound economic and financial policies of the regime, the number of sound banks reduced to 67 in 2002, 64 in 2003, 61 in 2004 and 53 in 2005, while the marginal/unsound banks increased from 17 in 2000, to 37 in 2005. The weaknesses of some of the banks arose from the arbitrary behaviour of the Central Bank of Nigeria (CBN) towards the banks. Instead of the CBN to be the bank for the banks and assist them, in the same manner that the banks are expected to assist their customers, the CBN had constituted itself as a bugbear to the banks. Because of the phobia of the CBN against inflation, it recurrently and arbitrarily withdrew money from the banks, thus reducing their capacity to create credit and develop themselves and the Nigerian economy. Rather than continue to assist the sound banks to become sounder and the less sound banks to become sound, the CBN arbitrarily increased the required capital base of the existing banks from N5billion in 2004 to N25billion in 2006. The consequence was that the number of banks in Nigeria reduced from 90 in 2004 to 25 in 2006! The CBN and the Federal Government wrongly assumed, and are still wrongly assuming, that the mere large size of the banks will ensure their soundness. This is no less fallacious than that the mere large size of Nigeria’s population guarantees the soundness of our economy and the dexterity of our governance. Very large banks in the world have collapsed, while small banks have remained sound and alive. Just as there are small, medium and large industries, so there should be small, medium and large banks. Forced mergers of the Nigerian banks had been creating ripples in the Boardrooms of some of them. We may be finding out later that the forced bank consolidation, which the CBN itself confessed was engineered by the IMF/World Bank advisers since 2000, may become a short-gun marriage in the future. As a result of the forced merger and the N25billion minimum capitalisation, bank ownership in Nigeria has become more foreign controlled than ever before. It is currently the case in South Africa, where the four largest banks there are owned and controlled from Europe. It is the sizes of these 4 large South African Banks that our CBN Governor and our President always cite as the reason for the bank consolidation in Nigeria. It is these large consolidated banks, in partnership with their foreign sponsors, that are expected to manage the  $45billion dollar reserves of Nigeria. In effect, we are moving gradually to the pre-independence era, when our banks were largely owned and controlled from abroad. Before consolidation, out of the 100 largest banks in Africa in 2002, Nigeria owned 25 and South Africa owned only 4. Yet, there had not been any bank consolidation in South Africa, which would have had the effect of destroying many of its small banks. The bank consolidation is in the same mode of the privatisation policy which has been concentrating the wealth of Nigeria in fewer and fewer hands. There is still a plan in the offing to raise the minimum bank capitalisation to N100billion so that there will be only about 5-10 large banks in Nigeria. The banking consolidation, according to the Institute of Bankers, caused the loss of jobs immediately before and after the consolidation. Many senior members of staff of the banks are being regularly retired or forced to retire since the consolidation. To date, over 200,00 banking officials have been rendered jobless since the announcement of the consolidation, in July 2004.

      Even in the USA; the most capitalistic country in the world, there are very many small banks that cater for special needs of limited areas of the country or for small enterprises. The larger the banks, the less they cater for the needs of small and medium scale enterprises without which no modern economy can develop rapidly. Only about 35% of Nigerians are today served by the large banks. It has become increasingly difficult for small businesses to access investment funds from the large banks, inspite of the avowed policy of the Central Bank to compel the banks to provide such funds. The Central Bank keeps on announcing that there is excess liquidity in the economy while the masses or Nigerians wallow in increasing poverty and deprivation.

THE SMALL BANKS: Community Banks/People’s Bank

      At the inception of the present regime in 1999, there were 960 Community Banks. Today, they had reduced to about 650. Rather than continue to assist and promote the Community Banks, the regime has decided to abolish them and replace them with micro-finance institutions, with minimum capitalisation of N20million for a Micro-Finance Bank, instead of the former N10million, and N1billion for a state-sponsored micro-finance bank, instead of the former N10million for a community bank. The number of such micro-finance banks is expected to reduce to fewer than 400, thus, further denying the Nigerian rural communities of the benefit of rural banking services. This is the more so, when the People’s Bank, with its 750 branches, had been abolished since 2002, and merged with the large Nigerian Agricultural and Rural Development Bank (NARDB), which now largely caters for the large enterprises and large farmers. Also in 1999, there were 150 Finance companies and 120 Primary Mortgage Institutions (PMIs). Today, there are only 82 operating finance companies and 60 operating Primary Mortgage Institutions. The capital bases of the finance companies and of the primary mortgage institutions are being arbitrarily increased so that their number will be further drastically reduced. Their services will thus be inaccessible to the less privileged Nigerians. The Finance companies are also being merged with the micro-finance banks, with the consequent economic disadvantages that their abolition will bring, apart from the retrenchment of workers that consequently arises. It was estimated that over 150,000 full time employees of the People’s bank of Nigeria were retrenched, following its abolition. With respect to the Community Banks that employed about 500,000 Nigerians, fewer than 200,000 will remain in the employment of the Micro-finance Companies that may replace them. 300,000 Nigerian employees of the Community Banks will thus join the already crowded unemployment market thereby.

INSURANCE CONSOLIDATION AND THE ECONOMY

      At the inception of the present regime in 1999, there were 255 insurance companies in operation. The minimum capital base for an insurance company by 1999 was N25million. The present regime increased the capital base in 2003 as follows:

(i) Life Insurance – N150million

(ii) General Insurance – N200million

(iii) Composite Insurance (Life & General) – N350million

(iv) Re-Insurance – N350million

The result was that the number of insurance companies reduced from 255 to 102.

With effect from March 1, 2007, the minimum capital base of the respective insurance companies was further increased as follows:

(i) Life Insurance – N2billion

(ii) General Insurance – N3billion

(iii) Composite Insurance (Life & General) – N10billion

(iv) Re-Insurance – N10billion

By the beginning of March 2007, only about 35 insurance companies have met the capitalisation criterion. While there is nothing wrong in making banks and insurance companies have large capital basses, the small and medium sized ones that cater for limited sectors of the economy need not be squeezed out of existence. The reforms in the financial sector are thus forced, one-sided and in favour of the rich, in whose hands the financial sector will now be fully concentrated, contrary to the provisions of Article 16(2c) of the1999 Constitution, which prohibits the concentration of Nigeria’s wealth or the means of exchange in the hands of a few individuals or of a group of Nigerians or non-Nigerians. Furthermore, the loss of jobs that will arise from the Insurance Consolidation will not be less than 200,000, thus swelling the already congested unemployment market.

CONCLUDING COMMENTS

      The purpose of this assessment is to show that some of the reforms being touted by the present regime are not only unconstitutional but are also inimical to the continued growth of Nigeria’s economy and to the welfare of the majority of our citizens. They are also foreign-inspired and not home-grown, contrary to what Nigerians are being made to believe. Nigeria is thus increasingly being dominated by external influences to the disadvantage of Nigeria. We have a foreign-oriented and foreign controlled government, masquerading as a nationalist and reformist government. Even the NEEDS (National Economic Empowerment and Development Strategy), which is the economic blue print that encapsulates all the so-called government reforms, was prepared on the directives and with the assistance of the World Bank/IMF. Little is heard of NEEDS of recent. It is likely going to die with the exit of this administration. ‘NEEDS’ has been midwived by six separate Economic Advisers to the President since 1999. It has lacked focus, lacked investment quantum and is not time specific.

      It is the anti-welfare stance of the present regime that made fuel prices rise from N18 per litre of petrol (PMS) in 1999 to N65 per litre today, Diesel price rose from N17 per litre in 1999 to N95 per litre today, when available, and kerosene rose from N16 per litre in 1999 to more than N100 per litre today. It is kerosene that the rural population of Nigeria needs and uses most. It has become a scarce product. Until 1999, even at the low prices of petroleum fuels, the then Federal Government spent part of it to set up the Petroleum Trust Fund (PTF) to provide basic infrastructures which are the main ones still available to Nigerians today. When President Obasanjo assumed office in 1999, the first thing that he did was to cancel the PTF and to substitute nothing in its place, ever since, even at almost four times the price of fuels today compared with pre-1999. The basic infrastructures provided by the PTF have not only not been improved upon significantly, since 1999, but many of them have also been permitted to deteriorate for lack of maintenance or sustenance.

      It is necessary that Nigerians be told the source, the manner and the consequences of the on-going reforms, so that they are not deceived into believing that their continuation after the exit of the present regime will be in the interest of the economy and of the increased welfare of the masses of our people. Even the GSM introduction was not achieved by the present regime, but by the previous regime. The GSM is a good communications network, but this regime had virtually destroyed the land-telephone system, in order to privatise it. In other countries, the land telephone system is the main communications system, with the mobile phone system serving as a subsidiary and emergency outfit to complement the land telephone system. The mobile phone system has taken much revenue away from the pockets of Nigerians and from the economy to its providers abroad. The flight of capital that it has occasioned need to be imagined. The so-called employment that it has generated is known in economics as gross under-employment. In 1999, to post a letter through the Nigerian Postal System cost N10. Today, it costs N50. Other postal costs have correspondingly increase by at least 500%.

      In 1979, when General Obasanjo was handing over the reins of government, to civilians, he announced to bewildered Nigerians that the best candidate then, Chief Obafemi Awolowo, would not and needed not win the then Federal Elections. General Obasanjo contrived and handed over power to his anointed candidate, whose political ambition then was to be a Senator in Nigeria’s National Assembly. A manipulated federal election gave rise to great legal controversies as to whether or not 12⅔ States or 13 States constituted two thirds of the then 19 States of Nigeria. His mishandling of the hand-over of power, though he got world-wide acclaim thereby, subsequently gave rise to less than optimum governance in Nigeria. It eventually led to the military coup d’etat of December 31, 1983, and to the sixteen long years of military rule, until General Obasanjo himself resumed the Presidency again in May, 1999. He has since been moaning that Nigeria made no significant economic progress since he left office in 1979. Now, in 2007, President Obasanjo’s regime is in the process of repeating its handing over power mistake of 1979. It prevented the best candidates in the regime from seeking-nomination for the Presidency of Nigeria at the PDP Convention. Instead, it hand-picked a very good and amiable Nigerian, whose highest political ambition was to be the Governor of Katsina State for eight years and retire quietly in 2007 into his farm. The regime also harassed the anointed Presidential flag bearer from choosing an able running mate and foisted on him another crony of the regime. So, the country may be having two candidates of the “Third Eleven Calibre” as the President and the Vice President of Nigeria, should the PDP, through do or die election, win the April 2007 Presidential election. So, if President Obasanjo lives long enough, for the next 20 years, and I pray for his long life, the same period between 1979 and 1999, he may again in 2027, moan that Nigeria had moved some steps backwards from when he handed over power on May 29, 2007, he prevented the most capable Nigerians from ruling Nigeria after him.

      There is no doubt that the 1999-2007 regime has tried its utmost best to steer the Nigerian economy and its governance along what it regards as a nationalistic and dynamic path. It has loudly publicised its achievements, at home and abroad, at exorbitant cost to the nation’s treasury. However, it has pursued a backward sloping economic curve that has pauperised, criminalised and corrupted Nigerians today more than they were at its inception in May, 1999. Because of its wrong economic direction, the more efforts it makes the less economic progress the regime will continue to achieve and the less, it will continue to meet the economic aspirations of Nigerians. The fastest growing economy in the world today, is the Chinese economy, which is a state controlled and a public sector, rather than a private sector driven economy. The Nigerian economy was actively and successfully public sector driven from the 1950s up to the early 1980s, until the military integument beheaded the public service and killed its effectiveness, and our economy began to nose-dive into the doldrums. Rather than find out what went wrong and take remedial measures, this regime, like its predecessor of Babangida’s, continues to depend on a non-existent private sector for its economic salvation. It is a forlorn economic hope.

      It is, therefore, necessary for each of the contending political parties, wanting to replace the present regime, in the 2007 elections, to have its own alternative blue print that will be more in tune with the economic needs and the aspirations of the majority of Nigerians. Otherwise, by 2020, the Nigerian economy will not be near any of the 20 largest economies in the world, to which this regime has been basing its aspiration. Today, Nigeria is the 55^th largest economy in the world. In 2020, it may decline to the 65^th, 75^th or 85^th largest economy, if the present reform policies continue to be the main planks of Nigeria’s economic development strategy.

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