In the pursuit to increase the
welfare and well-being of the citizens, governments have over the years embarked
upon numerous development policies, plans and programmes. Some of such
developmental plans include the First National Development Plan (1962-1968) (designed
to put the economy on the path of accelerated growth by prioritizing
agricultural and industrial development as well as training of manpower), the
Second National Development Plan (1970-1974), through to the Third National
Development Plan (1975-1980) (devoted primarily to rehabilitate and reconstruct
infrastructure that were destroyed during the years of the civil war). Introduction
of the Structural Adjustment Programme (SAP) to create a more market-friendly
economy and encourage private investments. Nigeria’s Vision 2010 and 2020 plans
were aimed at “transforming the country and focusing it firmly on the path to
becoming a developed nation by the year 2020”. According to the documents, the
plan advocates for a private sector-driven development process within a
broad-based and highly competitive environment.

Furthermore, the return of
democratic governance in the country in 1999, brought along with it the introduction
of a series of reforms, aimed at redressing the distortions in the economy and
restoring economic growth. The National Economic Empowerment and Development
Strategy (NEEDS) of 2004, a home-grown poverty reduction, value-reorientation
and socio-economic development strategy. The Transformation Agenda, National
Industrial Revolution Plan (NIRP) and the recent Economic Recovery and Growth
Plan (ERGP) all make up government development and growth strategies over the
years. Although development planning has been a consistent phenomenon in
Nigeria, it is worrisome that these plans have not been able to fully deliver
the desired results. Inspite of Nigeria’s huge potentials in both human and
natural resources, it is still rated an underdeveloped country.

Absence of strong institutional
framework in the public service has made productive activities become less
significant as a driving force of economic growth and development. Lack of
proper coordination between agencies of government in delivering government objectives
has contributed to the poor performance of most development plans. This has led
to widespread poverty, infrastructure deficit, rising unemployment, low human
capital development, high incidence of disease outbreak, increasing debt
profile, environmental degradation and dwindling life expectancy. The
standard of living of the citizens depends on the institutional
framework and capacities that shape the quality of human capital development,
the direction of the economy and level of investments across sectors. In ensuring
inclusive growth and development in the economy, the role of efficient institutional
framework and proper inter-agency cooperation cannot be over emphasised.

Therefore, what do we need to do
differently to strengthen institutional framework and ensure inter-agency
cooperation in the public service? This policy brief seek to highlight the
importance of efficient institutions in the public service and also the need
for better inter-agency cooperation and coordination towards delivering the
impacts of development on the citizens. 

IMPACT OF INEFFICIENT INSTITUTIONS AND LACK OF INTER-AGENCY COOPERATION
IN NIGERIA

The prosperity of any nation hinges on
the institutional framework. Inefficiencies of the institutional framework in
Nigeria has promoted widespread corruption, poor accountability and lack of
transparency leading to the redistribution of wealth in favour of few political
elites and widening the inequality gap. According to World Economic
Forum’s Global Competitiveness Report (2017-2018), Nigerian Institutions with
an overall rank of 125th out of 137 appear more fragile, adding
uncertainty to the business environment. Nigeria ranks low on key institution
indicators such as diversion of public funds (127th out of 138),
irregular payments and bribes (129th), efficiency of government
spending (126th), burden of government regulation (107) and
transparency of government policymaking (113). Also, Nigeria still rank very
low in the recent Corruption Perception Index (136 out of 176). These rankings
show that more actions are needed to improve transparency & accountability,
reduce red-tapism across government institutions and remove regulatory burdens
on businesses. However, new prudential reforms by the Presidential Enabling
Business Environment Council (PEBEC) and the Economic Recovery and Growth Plan
(ERGP) 2017–2020 have strengthened the much-needed reforms to improve the
institutional framework and improve the ease of doing business though
implementation is still a major challenge.

In recent years there has been
much discussion and frustration about the lack of cooperation and coordination
between and amongst Ministries, Departments and Agencies (MDA) of the government
in response to issues of national interest and global contingencies. The
Nigerian public service over the years have proven to be quick in the study of
our failings but slow in developing effective inter-agency solutions. This
became more evident in the first quarter of 2016 when the Nigerian economy
entered into the worst recession in more than two decades. Despite the evident
interconnectedness and interdependence between fiscal and monetary policy, while
conducted by separate and relatively independent institutions, failed to agree
with complete precision the impact of one policy on another while seeking to
move the economy forward. This introduced so much uncertainties into the
Nigerian economy leading to the negative growth rates recorded.

The lingering fuel crisis
experienced across the country is another good instance of institutional
failure and lack of inter-agency coordination. The Central Bank of Nigeria
(CBN), Nigeria National Petroleum Corporation (NNPC) and Petroleum Products
Pricing Regulatory Agency (PPPRA) have failed to adopt a sustainable pricing
template for petroleum products. A sustainable pricing template will guarantee
the marketer of the availability of foreign exchange at favourable rates
irrespective of fluctuations in the market. This will ensure that logistics
costs are covered and reasonable profit assured. Moreover, the failure of the
refineries to produce at optimal capacity is also a major factor causing the
crisis. This is also due to the inability of the relevant institutions to
provide an enabling environment which encourages investment towards setting up
of private and modular refineries to complement the efforts of the government
owned refineries to ensure adequate supply of petroleum products in the country.

Also, one of the greatest
security challenges Nigeria has to contend with in the 21st century is the
repeated cases of violent clashes between security agencies in some cities. The
problem of violence has become more worrisome as the security operatives whose
duty it is to maintain peace, detect and suppress crimes have themselves become
engulfed in violent conflicts, thereby giving criminals opportunity to unleash
terror on the citizens with impunity. The struggle for superiority among
security agencies arising from their historical past has become a professional
anomaly which is grievous to the economy. Similarly, the prolonged case of Boko
Haram insurgents that seem to have defied all security prescriptions may not be
unconnected to the lack of inter-agency cooperation between security operatives
and also between citizens and security agencies. Due to lack of cooperation, security
operatives have not been able to form formidable resistance to the onslaught of
insurgents. This explains why the nation has not been able to effectively
manage insurgency and other security challenges in recent times.

The cumbersome process in the
Nigerian Ports is another example of lack of inter-agency cooperation and
exposes the inefficiencies of institutions to promote ease of doing business. The
efficiency of a port is important in international trade. Gap analysis of the
Nigerian Maritime sector shows that it takes about 5 to 14 days to clear a
cargo at the ports. This is a far cry from what is obtainable at the ports of
peer countries such as Rwanda and Botswana (with 48 hours cargo clearance
time). Similarly, the number of government departments currently operating in
the port is 14 as against 6 as stipulated by the government. This process makes
doing business in Nigeria hectic and has continued to reduce investor
confidence. Though considerable progress has been recorded, there is still
great room for improvement given the evolution of trade patterns globally. The
lack of an overarching strategy that improve institutional capacity and fosters
inter-agency cooperation in the ports contributed to the inability of the
economy to assume increasing responsibility and become globally competitive.

Selected Performance Indicators of the Nigerian Port

Indicators

Ideal/Baseline

Current
Reality

Gap

No. of
govt. depts. Operating in the port

6

14

Additional
8

Cargo
clearance timeline

2
days (48 hours)

5
to 14 days

Additional
3 to 12 days

No. of
paper works & agencies to interface with to clear a cargo

1
(Single Window)

18
agencies,
and
23
signatures

Additional
17

No. of
paper works & agencies to interface with to export a cargo

6
Agencies

20
agencies,
and
33
signatures

Additional
14

Source: LCCI

 

WHAT LESSONS CAN WE LEARN FROM PEERS

There is a large body of evidence
that confirms the importance of a strong institutional framework, underpinned
by the rule of law, for long term economic prosperity. This is recognized across
countries by policy makers. Countries that have developed strong institutional
frameworks and inter-agency cooperation have performed better in terms of
sustained growth and human development while those countries whose
institutional frameworks are particularly weak are likely to pay for those
weaknesses over time. This presents the need for Nigeria to learn from peers in
adopting sustainable strategies that will strengthen institutional framework as
well as improve inter-agency cooperation. This section highlights the
importance of strong institutional framework and how this has helped selected
African countries (Rwanda and Botswana) improve their economic viability.

Lessons from Rwanda

The government of Rwanda’s desire
to transform the economy is rooted in the belief that poverty exacerbated the
tensions that erupted into 1994’s genocide. The aftermath of the genocide called
for urgent measures that will strengthen institutions in Rwanda with the
conviction that no country can depend on development aid forever as such
dependency dehumanizes the country and robs them of their dignity. This led to
specific reforms to alleviate the situation which the country found themselves.
These institutional reforms over the years have proven to be the bane of
economic growth and development in Rwanda. In a bid to improve the ease of
doing business and encourage private sector investment, Rwanda has placed a
high emphasis on developing its private sector. Rwanda is among more than 35
economies where the government has made private sector development a priority
by establishing institutions whose main purpose is to design and implement business
regulation reforms. Similarly, Rwanda introduced new secured transactions law,
allowing a wider range of assets to be used as collateral and permitting out-of-court
enforcement proceedings. This led to
the creation of the country’s first private credit bureau, which provides wider
coverage than the public registry because it includes information from
utilities. In the same vein, Business registration process were simplified by
setting up hundreds of new notaries to make starting a business faster, as
prior to this there was only one notary for the entire country. This led to 77%
more businesses registering the following year. However, the distinctive
feature of institutions in Rwanda is the Monitoring and Evaluation (M&E)
framework which compels heads of every institution charged with oversight
function to submit verifiable progress report back to president every month.
Rwanda’s commitment to structural and institutional development has facilitated
growth in exports, domestic investment and foreign direct investment inflow and
the implementation of effective fiscal policies.

Lessons from Botswana

Over the past few decades,
Botswana has been considered among the best performing economies in the world
and hailed as a beacon of success in economic management compared with most
African states. At independence, Botswana was coming to the end of a severe
drought cycle that had lasted for more than five years. Under these bleak
economic conditions, expectations regarding economic expansion were not excessive.
Thus the combination of more abundant resources available for development than
originally envisaged, extremely cautious government spending, and supposed good
economic policies supported by good institutions may explain some of the
development success in later years. Botswana’s good economic policies and
success reflect its institutions. These institutions, protected property rights
of the actual and potential investors, provided political stability, and
ensured that political elites were constrained by the political system and the
participation of broad sector of the society. Five critical factors are
associated with the good institutions in Botswana.

First, Botswana possessed
precolonial tribal institutions that encouraged broad-based participation and
placed constraints on political leaders during the precolonial period. Second,
British colonization had a limited effect on the precolonial institutions
because of the peripheral nature of Botswana to the British Empire. Third, upon
independence, the most important rural interests, chiefs and cattle owners were
politically powerful, and it was in their economic interest to enforce property
rights. Fourth, the revenue from diamonds generated enough rents for the main
political actors, increasing the opportunity cost of, and discouraging further
rent seeking. And finally, the post-independence political leaders undertook
deliberate decisions to create a strong central state. Unlike leaders in most
African countries at the time, these leaders also crucially resisted
indigenizing the bureaucracy until suitably qualified citizens were available;
so expatriate workers were kept, and international advisers and consultants
were also used.

This added to the strength of the
institutions till date. Botswana’s development experience has also been
associated with strong adherence to national development planning and budgeting
principles, with little or no external influence in the planning process. This
has ensured central planning in the pursuit of national development objectives.
This process ensures that to the extent possible, only projects approved
through the national planning process are financed through the national
budgeting process. The development plans are based on a six-year planning
cycle, with a midterm review every three years. Worth noting is that the thrust
of all the national development plans since 1966 has been achieving sustainable
economic growth and diversification.  

WHAT NIGERIA CAN DO DIFFERNTLY

Though various institutions in
Nigeria has undergone changes and transformation tailored towards achieving
efficiency and effectiveness over the years, successive reforms have not made
significant impact that will foster inter-agency cooperation and improve
standard of living. However, in trying to keep pace with rising unemployment by
positioning institutions to deliver and improve inter-agency cooperation in the
country, public-private implementation strategy must be put in place to ensure
that through rigorous planning and efficient resource allocation, the economic
growth rates easily translates in low levels of poverty and higher employment
rates. There is need for reforms in the following key areas;

DEREGULATION OF THE DOWNSTREAM OIL SECTOR

Deregulation of the downstream
oil sector will improve the efficient use of scarce economic resources by
subjecting decisions in the sector to the operations of the forces of demand
and supply. This will attract the needed investment in the market, thereby
increasing competition, promoting higher productivity and consequently lowering
prices overtime. The ultimate effect of these activities is posed to increase
gains for Nigerians as efficient resource allocation will be achieved. For
instance, following government’s deregulation in the Telecommunication, there
has been a reduction in call tariffs. Similar success has also been recorded in
the banking sector with the emergence of stronger banks with unprecedented
spread to several other African countries. These are classic examples of the
kind of positive effects deregulation could have on oil sector. Deregulation
further reduces economic waste and lightens social burdens caused by government
control. For several years, Nigeria experienced scarcity of petroleum products
that crippled economic activities and increased the cost of doing business.
Deregulation will help address this price scalping and a host of associated
problems related to the sector. Deregulation of the downstream oil sector
promises to be the way forward in expanding opportunities for economic growth
and a competitive downstream petroleum sector.

IMPLEMENTATION OF THE NIGERIA SINGLE WINDOW

The Nigerian Single Window (NSW)
which was created through an intense automation and introduction of standard
operating procedures connects other government agencies under one platform but
is rarely available for use. This innovation was conceived to allow for
adequate and timely information to process the shipment of goods and release of
goods. Attempts for the port to ride on technology innovations to eliminate or
reduce physical contacts, illegal payments and delays in processing port
documents are seen to be deliberately frustrated by agency and departments
officials. The full implementation of NSW platform will strengthen the port
industry by boosting efficiency and reduce cost and time, which are the major
objectives of port concession agreement signed by private terminal operators.
It is widely believed that the efficient working of NSW is single most vital
reform capable of setting the Nigerian ports on a new path of progress.

INTRODUCTION OF SECURITY INFORMATION MANAGEMENT SYSTEM

Information is a crucial tool in
national security and its timely dissemination is critical for maintaining
national peace. The National Assembly and the administration will need to
consider the extent to which agencies’ existing structures, processes, and
funding sources facilitate interagency collaboration. Sharing and integrating
national security information is critical to assessing and responding to
current threats to national security. At the same time, agencies must balance
the need to share information with the need to protect it from widespread
access due to concerns about agencies’ ability to protect shared information or
use that information properly, other agencies and private-sector partners are
sometimes hesitant to share information. However, in defining institutional
roles and responsibilities and mechanisms for coordination, one of the necessary
features for strategies identified is the need to integrate the information
management system of security agencies. This will help agencies clarify who
will lead or participate in which activities, organize their joint activities
and individual efforts, facilitate decision making, and address how conflicts
would be resolved collectively. Also, the government must ensure that security
agencies enhance and sustain their collaborative efforts by establishing
compatible policies, procedures, and other means to operate across agency
boundaries.