Guardian Corruption, parlous infrastructure: Nigeria’s development strain WEDNESDAY, 24 JULY 2013 00:00 CHIJIOKE NELSON BUSINESS SERVICES -MONEY WATCH The words corruption and parlous infrastructure in Nigeria have long adorned global headlines. In fact, the concomitant effects of those words as evident in the country’s development struggle are now the real issues. But how did we get there and why is it difficult to exit? CHIJIOKE NELSON writes. ACCORDING to the International Development Strategy for the Second United Nations Development Decade Resolution, adopted in 1970, “The ultimate objective of development must be to bring sustained improvement in the well-being of the individual and to bestow benefits on all. If undue privileges, extremes of wealth and social injustices persist, then development fails in its essential purpose.” Given the above statement, it is obvious that there is a nexus between consistency and compliance with plans by the government and its agencies on the one hand and the attainment of goals, objectives and development as acclaimed by the same government. The central area where consistency and compliance are required is in the allocation of scarce resources and in the case of Nigeria through budgeting and implementation, though before budgeting, it is assumed that the order of priority has been set according to the development needs. But one would also argue whether we even have a plan that will foresee needs and thus, set priority. But an expert, Claude Ake, argued: “…The assumption so readily made that there has been failure of development is misleading. The problem is not so much that development has failed as that it was never on the agenda in the first place. By all indications, political conditions in Africa are the greatest impediment to development.” From the elementary knowledge of economics, capital as a factor of production is defined as “wealth that creates further wealth.” Assuming our capital budget is this factor of production, capital projects should then be implemented in such a way to ensure further wealth. These capital projects, when implemented effectively, translate to greater provision of infrastructure, which in turn accelerates socio-economic development through the up-shoot of cottage industries, Small and Medium Enterprises, job creation and by extension, expanded tax revenue for government and bigger budget size. So, the level of resources earmarked for the development of these projects and how “religiously” they are implemented beyond claims in the media, are the real test of government’s commitment to development. This is the bane of Nigeria’s development and point of divergence from developed system’s ideology. There are numerous development documents and plans so far, but how far have these been implemented? Were they well crafted for the country, with the intention of following them or copied for the sake of presentation as a plan? These dilemma stem from the fact that over the years, there have been huge gap between the implementation of recurrent and capital expenditures. While the recurrent has always been implemented to the letter, capital expenditure, on the other hand, has always been the “victim.” But how huge is the capital expenditure budget? It has always been less than one-third of the total budget. For example, last year (2012) was 29 per cent and 2013, according to the Finance Minister, has been reviewed up to 32 per cent. For some years now, the minister will be engaged in a rowdy session at the National Assembly each time a new budget is presented for consideration over unclear percentage performance of the previous budget. At the session, figures and counter figures on performance are usually presented, while manifestations of inconsistencies and lack of compliance to acclaimed plans were further shown. Finally, a plus or minus 50 per cent of the capital budget will be cleared as been implemented, yet with doubts. But the above ushers in another round of argument and ambiguity over what happens to the unspent funds budgeted, with some words like virement, last minute contract awards, cash backed and non-cash backed ensuing. Last week, the intrigues and issues dogging the nation’s infrastructure planning, implementation and legal framework were resonated at the Federal Infrastructure Dialogue, organised by the Centre for Social Justice (CSJ) in conjunction with the Federal Public Administration Reform Programme (FEPAR), in Abuja. The forum, which the ministries of Works, National Planning, the Accountant-General of the Federation, Millennium Development Goals’ office, Subsidy Reinvestment and Empowerment Programme (SURE-P) boycotted, had in attendance the Infrastructure Concession Regulatory Commission (ICRC), Budget Office, civil society organisations and private sector operators. Analysing a research on the nation’s policies and financial commitments on infrastructure, an Economist, Dr. Uzochukwu Amakom, noted that there was no synergy among various development policies and documents that have links with infrastructure development in the country. The research, tagged: “A Review of Nigeria’s Key Economic Development Policies and Financial Commitments on Infrastructural Projects, 2012 and 2013,” by Amakom and Emeka Ngene, in conjunction with the Centre for Social Justice and UK Department for International Development-funded FEPAR, revealed how various projects were stalled due to lack of continuity, consistency, and commitment by government. “With diverse policy documents, some of which are long-term, medium term and very short-term, there are possibilities for internal inconsistencies, as different professionals may have been engaged in drafting the documents at different points, where detailed checks may not have been incorporated. Given the inter-temporal inconsistency challenge in government revenues, expenditures and policy horizon, it is possible that bases for projections vary from time to time and may not be fully incorporated in the documents. “The founding documents and later ones’ proposed investments for the transportation infrastructure for the country evolved a multi-modal, integrated and sustainable transport system, with greater emphasis on rail and inland waterways’ transportation. The later documents proposed an investment of approximately N4.465 billion for the sector for 2011 to 2015, covering roads and bridges, railways, inland waterways, ports and airports’ development. But using the Transformation Agenda benchmark, Nigeria is expected to spend at least N320 billion on roads and bridges’ construction and rehabilitation; N104.4 billion for roads and bridges’ maintenance; N187.95 billion on railways; N5.73 billion on seaports; and N80.85 billion on airports’ development for the period of 2012 and 2013. “It is unfortunate to note that not all the sub-sectors’ investment recommendations were adhered to in the period of 2012 and 2013. The legislative arm of government should embark on result-oriented monitoring, evaluation and auditing, because evidence has shown that available resources’ management has been marred by inefficiency.” The Acting Director-General of ICRC, Aminu Diko, who was represented by the Project Manager, Mustapha Junaidu, listed the opportunities in public-private partnership for effective infrastructure development, including “Build Operate Transfer, Build Own Operate, Build Own Operate Transfer, joint ventures, leasing, among others. Diko, who explained that his agency was created to communicate plans/policies to private sector, coordinate federal Public-Private Partnership (PPP) activities, among other things, decried myriad of challenges besetting the agency, including weak and unreliable planning data and statistics. Now, we might at this juncture ask why do the inconsistency and lack of compliance persist? The answer is basically summed as self-interest and corruption, accentuated by impunity. The United States Secretary also captured the under-currents in her words: “The most immediate source of the disconnect between Nigeria’s wealth and its poverty is a failure of governance at the local, state, and federal level, and some of that is due, as you know well, to corruption, other of it to lack of capacity or mismanagement.” Unfortunately, at a forum of high magnitude, where infrastructure and national planning were at the front burner, it is worth mentioning again that the ministries of Works, National Planning, the Accountant-General of the Federation, Millennium Development Goals Office, SURE-P boycotted the forum, despite formal notice and without apologies. According to the words of the famous French sculptor, Auguste Rodin, “Nobody does good to men with impunity” and the damaging effects of impunity were dripping as participants relate with evidences, how the systematic underdevelopment has been dealing the country a blow, at a multi-stakeholder workshop on Public Finance Management, which was organised in Abuja by civil society organisations, under the aegis of Stop Impunity in Nigeria campaign and the National Orientation Agency, recently. Also, the Founder of Lexville Foundation, Kalu Onuoha, in his appraisal of the Development Planning and Projects Continuity Bill, currently at the National Assembly, said the bill may have appeared to be the inauguration of compulsory planning and implementation regime for the three-level government. The move, which was aimed at curbing the spate of abandoned projects in the country, would prescribe a well articulated goals and activities that will lead to the attainment of the ambitious objectives of Vision 20:2020 economic transformation. But how successful will this strategy be? Already, the bill is beset with various knocks, as the contents have been adjudged “needless” due to its costs implications; proposed appointments; poor legal framework; and political implications. This is why inconsistency and lack of compliance persist. We might as well when we would get it right. A further assessment of the bill showed that even if the Act sought is without fault in itself, there are fears that the clause which said: “As from the commencement of this Act, it shall be unlawful for a government of the federation to have an abandoned project in any part of Nigeria” will surely be an obstacle as politicians will find it implicating. Another argument against it is that neither “economic planning nor project continuity” is mentioned among the Legislative Lists, Exclusive List and the Concurrent Legislative List. The first impression will be that the bill is residual matter that is left for the State Houses of Assembly and upon which the National Assembly could only legislate for Federal Capital Territory. Delivering a paper titled: “Contextualising Impunity in Public Finance Management - An Agenda for Change,” the Lead Director, Centre CSJ, Eze Onyekpere, underscored the point that Nigeria’s level of fiscal indiscipline and impunity over the management of public finance rose to the pitiable state because of the “capacity deficit in the legislative oversight mechanism - weak checks and balances.” Also, from government agencies and professional groups came the shocking revelations of how high level impunity being perpetrated in the country has been dealing a deadly blow on the nation’s economic development drive. The Bureau of Public Procurement (BPP), admitted that currently, impunity is challenging its operations and manifest in the areas of bidding, evaluation, award and execution stages, adding that an assessment of public procurement practice between 1999 and 2000 revealed that 60 kobo was lost to underhand practices out of every N1 spent by government, but noted that the Public Procurement Act, 2007, was designed after the United Nations Commission on International Trade Law, to check some of these challenges. How can the country develop like this? Yet, there are no reliable and deliberate strategies to curtail the menace now. The path to nation building requires consistent search and application viable alternatives, so the legislators should ensure that capital projects are identified, justified and prioritized in line with development agenda, which encompasses all documents and plans. This means that the legislators should indeed be agent of change and development. Resources should be harmonized so as to ascertain its quantity and adequate resources allocated to recurrent and capital expenditures. For emphasis sake, capital expenditure should be well above 40 per cent f the total expenditure plan. This is time to build public trust that have long been lost, to enable government identify alternative sources of funding and be supported. There are huge and untapped funding windows for development from the pension fund, PPP, long-term bonds, private equity and infrastructure bonds, among others. The problems here once again, are trust, transparency, right applications, and mostly, change in leadership orientation. Development does not result from duplication of ideas. The idea of initiating thousands of projects without adequate funding has led to many abandoned projects and waste of scarce resources and should not be handled with levity if the development claims would be achieved. There should be proper planning of projects’ cost and execution time, regulate contract cost variation procedure, provide a clear cut rules for execution of contract, adequate release of appropriated capital funds. Ministries, Department and Agencies should be made to justify their monthly salaries by ensuring that the projects are implemented effectively. There should be sanctions for tardiness, compromise and connivance with whoever. The issue of unspent funds should be addressed and no longer be associated with ambiguity and doubts. Besides, transparency on the matter should be restored, with all sense of commitment to national development.
Posted on: Wed, 24 Jul 2013 07:45:34 +0000
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