TOCHUKWU JUDE OMENMA
Department of Political Science
University of Nigeria,Nsukka.
Since the Nigerianization of the civil service in 1960 a number of efforts have been made to reform and revitalize the Nigerian public services (the civil service, parastatals, local governments) as a whole. The reforms have been mainly managerial; they have sought to improve the performance of the civil service through managerial and structural reforms. The improvement of governance has been at best a subsidiary consideration in most of these efforts. A brief review of overall public service reforms and of its main components in the last two and a half decades in Nigeria are the Public Service Reform of 1974/75, the Reform of Local Government, 1976, Reform of Parastatals, 1986- 1993. However, none of all these reforms have been so comprehensive as the Obasanjo reform exercise.
Nigerians have drawn their reform idea both from within and outside the country. The pressures for reform, internal and external, are examined in the context of the world shift from strategies of state-ted economic development towards models relying more on private sector led and outward looking growth. The argument is that the Third World Nations remained underdeveloped due to weaknesses in their economic organization and shortcomings in the operation of the state institutions. In sum, civil as well as public service reform in Nigeria has sought to improve the performance of the Nigerian administrative system through managerial reforms. In the discussion of the ‘Washington Consensus1 that is the forbearer of public service forms, the term “public sector reform” will encompass the entire
Range of policy actions being undertaken to:
- Enhance the effectiveness and efficiency of the institutions of the State in meeting the needs of its citizens, particularly in terms of the pro vision of public goods;
- improve transparency and accountability in government;
- Reorientation the State to provide an enabling economic environment for the private sector, which is envisaged as the “primary engine” of economic growth,
- Shift the focus of the State towards “core” functions, and away from activities that could be more efficiently performed by the private sector, and
- the fiscal imperative of reducing the cost of government and at the same time improving service delivery function of public service organizations (R, Kibria (2000), Mohamed Asim, (2002).
On assuming office for a second term in June 2003, President Obasanjo launched an ambitious economic reform program aimed at laying the foundations for economic growth, employment creation and poverty reduction. Key components of the program (National Economic Empowerment and Development Strategy) NEEDS include: (i) promoting macroeconomic stability; (ii) accelerating privatization and liberalization of the economy; (iii) reforming the public service, including reforming public expenditure, budget and civil service; (iv) fighting corruption, improving government transparency and accountability; and (v) strengthening basic service delivery (Web:http://www.worldbank.org/infoshop). A key constraint, as reasoned by reform protagonists, to effective economic management and social service delivery remains the performance of the public service, which has become bloated, de-skilled and unable to perform well, either, the key regulatory functions of government, such as law and order, and deliver key social services.
Three issues are outstanding in the civil service reform: First, both the World Bank and the IMF use their lending programs to aggressively push for improvements in governance, linking disbursements to performance benchmarks and necessary policy actions. This gives these institutions the power to punish non-compliance and to reward “reformist” governments. Second, the reform is an integral part of the privatization and deregulation of state owned enterprises that started since 1986. Thus, to create more resource base for the state, enhance efficiency and growth of the economy, government, must limit its huge budget to civil service wage bills. Thirdly, government does not have a very clear economic analysis of the financial benefits that the policy will have to the country, whether on a short or on a long-term basis, especially with the challenging environment’s serious poverty and unemployment rate how to factor these real problems could be tackled through the reform programmes.
To undertake public reform is an extensive one, and no attempt will be made in this article to present a magisterial view of the subject. Our concern here is not to take the whole gamut of reform programmes but to have a broad look at the monetization exercise, and examine the content of the policy. To do that, we have raised salient questions to guide the study. What are the likely implications of the recent monetization policy on national economy? Who are the ultimate benefactors? What are the challenges and prospects of the reform to an ordinary citizen?
MONETIZATION: A COLONIAL ANTECEDENT
With a few exceptions such as Thailand (which did not experience direct colonial rule) most developing countries’ civil services have tended to retain many of the features of their colonial predecessors (Kibria, 2000). The Nigerian Civil Service can be traced to the administration of Lord Lugard, the then Governor General of the amalgamated administration of the Northern and Southern Nigeria. The objectives of colonial administration were to maintain law and order and tax collection (minimal administration) and the rudimentary administration was guided by the indirect political system (Omoleke 2003:194).
The nature of remuneration was also the heritage of colonial administration and policy. During the colonial era they provided their expatriate staff – the “White” civil service administrators – with free housing, free transportation, free house helpers, etc. Therefore, the conditions of service and remuneration packages were patterned to suit the living style of these itinerant expatriates. Residential Barters were provided, furnished and maintained by government. Government apart from charging minimal cost for these quarters, including electricity, water and telephone services, also paid utility bills to the officers. In the same vein, government facilitated Procurement of vehicle to these officers at generous rates that could be conveniently deducted from their salaries. Domestic servants were hired for them at government expenses, while their medical bills as well as those of their spouses and children were also defrayed from public purse.
Generally, life was organized in such a manner that made it convenient for these expatriate staff to function and move from one colony to another with minimal stress in service of the British crown (Ibrahim Talba, 2004:2-4). They, the expatriates, were generally very few in number, so their total package was small compared with the total income that the colonial government was extracting from the colonies that they were superintending. When these colonialists left, the indigenous civil “servants” that took over also inherited those benefits, with the first significant one being living in GOVERNMENT RESERVATION AREAS (GRA) separate from the other natives.
The Nigerian civil servants then, who were mainly junior staff, resented this exercise; they adjudged it discriminatory and kicked against it, mainly because it was not all-inclusive. Gradually, as Nigerians acquired more political powers and moved towards self-governance and independence, conditions for entry into the senior service increasingly became relaxed, and more Nigerians found themselves in positions of authority. Therefore, at independence in 1960 and the subsequent Nigerianization of the civil service, especially the upper echelon, the conditions of services enjoyed by the British expatriate were adopted hook, line and sinker. Nigerian government did not examine the philosophy behind such conditions of services; neither did it take into consideration the wage bill.
Basically, the philosophy remains the same, administrative convenience, but the administrative wage then was minimally reduced unlike currently when the size of Federal civil servants is about 1 87 ,876 (Ibrahim Talba; 2004: 5) and the wage bill is relatively high. For long, the huge cost of administering the public sector had been of concern to government. Previous efforts to reform the conditions of services have been restricted to very limited parastatals, such as the Central Bank of Nigeria and the Nigeria National Petroleum Corporation where fringe benefits have been monetized for several years now. Three post-colonial developments have made radical reforms in this essential. First, government has expanded in size and scope. Secondly, under a democratic framework greater responsiveness is required. Third, the abuse of discretionary powers has led to the creation of protective layers of decision-making and cross-checks to dilute authority (and responsibility for decisions).
The efforts toward monetization by previous governments have been a partial exercise of a few fringe benefits in such areas as Leave Grants, Entertainment Allowance, Meal Subsidy, Domestic Servants Allowance and Duty Tour Allowance. The present exercise which started under Obasanjo administration is full-length implementation of monetization. As he argued, to stimulate the state institutions toward accountability, transparency, service delivery, professionalism and the general ideal of good governance, so that the economy will be investment-friendly for the private sector-led development.
MONETIZATION OF FRINGE BENEFITS
The President set up Chief J. Ekaette Committee on the Monetisation of Fringe Benefits in the Public Service of the Federation on November 11, 2002, under the Chairmanship of the Secretary to the Government of the Federation. The establishment of the Committee became necessary because over the years, the cost of governance has continued- to escalate, mainly, from the burden of providing basic amenities to public servants by the Government leaving very little for capital development.
Government has already signed into law the “Certain Political, Public and Judicial Office Holders (Salaries and Allowances etc) Act, 2002” and it was substantially adopted in making recommendations on the monetization of the fringe benefits of civil and other public servants not covered under the Act. The law came into effect from Is1 July, 2003 for the designated Political, Public and Judicial Office Holders contained therein, while it was extended, with some modified rates of benefits, to Federal civil servants with effect from 1st October, 2003. The component areas to be monetized are as follows:
Residential Accommodation: Prior to the monetization policy, only about 25 percent of civil servants were occupying government-owned quarters and government-rented quarters, while the remaining were paid rent allowances for their accommodation. However, under current monetization exercise Residential Accommodation Provision should be monetized at 100% of Annual Basic Salary as residential accommodation allowance that should be paid en bloc to enable an officer to pay for accommodation of his choice. In that regard every single civil servant in the Federal Civil Service will provide his own accommodation, but will be paid between 50 percent and 75 percent of his annual basic salary as accommodation allowance, depending on seniority level. In order to avoid exerting undue strain on present occupants of Federal Government quarters and to fund the monetization of residential accommodation effectively, in the first year of the monetization exercise, current occupants of Government-owned quarters would pay 100% of their accommodation allowance as rent for the quarters they occupy. Also government residential quarters across the country would be sold off by public auction at the end of the first year of commencement of the monetization programme with their present occupiers being given the first option to purchase the houses, but at the price of the highest bidder. The civil servant who buys his quarter is expected to pay 10 percent of the cost of the house as initial payment in order to owe the house
In addition to the owner-occupier right, Government would provide sites and service schemes in satellite towns nationwide in order to assist public servants, who would prefer to build their own houses, acquire land
Furniture Allowance The payment of 300% of Annual Basic Salary is recommended as furniture allowance in line with the provision of the “Certain Political, Public and Judicial Office Holders (Salaries and Allowances etc) Act, 2002”. However, considering the likely problem to be faced in paying huge furniture allowance of 300% of annual basic salary en bloc, this allowance would be paid annually at the rate of 75%, which amounts to 300% in four years. Currently, government has ceased bearing responsibility for furnishing and repairs for these quarters even when they are not monetized. Government in lieu of that has decided to pay senior officers’ furniture allowance amounting to 200 per cent of their annual basic salary for every five-year period, while an enhanced utility allowance at the rate of 15-20 per cent annual basic salaries has been introduced to enable officers’ pay for their utility bills.
Domestic Servant Allowance This allowance has already been monetized for public servants. The provision of the Act is recommended to be retained for political office holders. The provisions for domestic servant allowances will be as follows: GL. 15- 1 domestic servant -Nil9, 586 per annum; GL. 16 and 17- 2 domestic servants -N239,172 per annum; PS and above – 3 domestic servants -N358,704 per annum; and Political office holder -75% of annual basic salary.
Vehicles: Under the immediate past arrangement, government provided chauffeur-driven vehicles for its top officials, numerous utility vehicles for carrying out government activities and staff buses for conveyance of staff to and from offices. The government carried out the fuel and maintenances of such vehicles. Besides, government had car loan facilities at minimal interest rate of 3 percent for senior officers to buy their own cars. The contemporary monetization policy will remove those incentives, no government official will be chauffeur-driven in government vehicles, and car loans will not be granted by government to senior officers, rather such loans can be obtained from financial institutions. In place of that, all the civil servants will be paid 25 percent of annual basic salary as vehicle allowance. The most senior officers Permanent Secretaries and Directors will be paid an allowance to enable them hire their own drivers. The staff buses that convey junior staff to work will continue to be operated, but at the expenses of users. This will reduce the number of utility and project vehicles of the various establishments.
The excess vehicles in government pool will be sold at 50 percent discount to the civil servants and members of the public at pre-determined ratio. Serving officers who benefit from the purchase will have a choice of either paying cash or having the cost deducted from their salaries over a period of three years. Drivers who will be laid off because of this exercise have been allocated 30 percent of the excess vehicles to be purchased while their retirement packages will be paid promptly. For the successful monetization of this service, Government would ensure that:
- No new vehicles would be purchased by all Ministries, Extra-Ministerial Departments and Federal Government Agencies.
- Officers currently entitled to Government vehicles would return them to the Presidency for disposal or pooling in the CVU as may be appropriate.
- Each Ministry/Agency would be allowed a specific number, approved by Government, of utility vehicles, including buses for essential office services (out-of- station duty tours and meetings). No Ministry/ Agency will exceed the number without prior approval of Mr. President.
- A Committee is to be set up to handle the issue of disposal of vehicles. In disposing the excess vehicles, an entitled officer would be allowed to purchase one car for personal use at approved discounted value.
- Where there is the need to purchase (a) new vehicle(s) by any Ministry, Extra-ministerial Department or Agency, a request shall be made to Mr. President for approval.
- Provision of drivers to entitled officers would be monetized asfromGL17andabove-l driver-Nil 9,586 per annum. The allowance will be the same with the current provision for domestic servants, i.e. total emolument of an officer on grade level 3 steps 8.
- Service-wide staff buses will be pooled under the management of the Office of the Head of the Civil Service of the Federation. Staffs who utilize the facility will be made to pay at a rate equivalent to their transport allowance and funds so generated would be used for the maintenance and fueling of the vehicles. This facility will be progressively withdrawn when the public transport service improves.
- In addition to (g) above, Government and the private sector will assist in the provision of urban mass transit at commercialized rates. On the fate of excess drivers in the system as a result of the new policy, the following steps are recommended:
- Those with relevant and adequate qualifications would be retained and redeployed appropriately.
- Depending on the need, others will be deployed to drive staff buses under the Office of the Head of the Civil Service of the Federation.
- Those that will not be deployable will be rationalized but to be assisted by the National Poverty Eradication Programme under KEKE NAPEP programme.
- Fuelling/Maintenance and Transport In line with current economic realities, 3 0% of annual basic salary as provided for in the “Certain Political, Public and Judicial Office Holders (salaries and allowances etc.) Act 2002” is recommended as Fuelling/Maintenance and Transport Allowance.
Medical Allowances: The provision in the Public Service Rules, Chapter 9, Section 09203, has been prone to abuse and sharp practices, particularly, with the Submission of fake bills as claims to Government. Before now, civil servants and their immediate families (nuclear) enjoyed medical treatment at government expense, mainly at government hospitals and staff clinics. Whatever, expenses they incur in the course of treatment is refunded for by government? Government, therefore, under the monetization policy is proposing the payment of 10% of an officer’s annual basic salary as medical allowance. However, special cases requiring government intervention would be considered on merit.
Meal Subsidy: The allowance had already been monetized through the provision in the Circulars Nos. SWC.04/S.I/Vol. IV /991, dated 5th May, 2000 and SWC.04/S.l/Vol. IV 7136, dated 15th, May, 2000, issued by the National Salaries, Incomes and Wages Commission as follows: GL. 01 to 06 – N6, 000 per annum; GL. 07 to 10 N8, 400 per annum; GL. 12 to 14 – N9, 600 per annum; GL.15 to17 – N10, 800 per annum; Permanent Secretary -.N16, 200 per annum; and Head of Service-N 16,200 per annum..
Entertainment Allowance: The allowance for civil servants had already been monetized through the provision in the Circulars Nos. SWC./04/S.Vol. IV/991, dated 5th May ,. 2000 and SWC.04/S.l/Vol IV 7136, dated 15th May, 2000, issued by the National Salaries, Incomes and Wages Commission. The Act stipulates 10% of annual basic salary for Political office holders as follows: GL. 15 -N8, 400 per annum: GL.16 to 17 – N9, 600 per annum; Permanent Secretary -N27,000 per annum; Head of Service -N27,000 per annum; and Political office holders-10% of annual basic salary.The table below summarizes the monetization policy as applied to every cadre of Federal Civil Servants.
Table 1: Structure of Monetized Fringe Benefits for FederalCivil Servants
|S/N||Type of Allowance||Grande Level||Rate Per Annum|
|1||Accommodation||01-06 07-14 1 5 & above||50% 60% 75%|
|3||Meal subsidy||01-16 07-10 12-14 15-17 Perm. Sec. etc||£46, 000.00 £48, 400.00 N9, 600.00 W10, 000.00 ^416,200.00|
|4||Utility||01-16 1 7 & above||15% 20%|
|5||Domestic Servant||15 16-17 PS above||1 GL 3 step 8 2 GL 3 step 8 3 GL 3 step 8|
|6||Leave Grant||01 & above||10%|
|7||Medical||01 & above||10% (to be paid to NHIS)|
|8||Furniture allowance||01-05 07 & above||NIL 200% in 5 years (i.e. 40%)|
|9||Vehicle loan||01-05 06-07 08 & above||100% 150% 200%|
|10||Driver||1 7 & above||1 GL 3 steps ,|
Vehicle loan is to be facilitated through the Bank on a single digit interest rate subject to repayment capability in accordance with financial regulation.
Source: Nigeria National Economic Empowerment and Development Strategy (NEEDS), National Planning Commission, March 2004, p.52.
The cost of monetizing allowances being recommended is to be arrived at using step 8 of each grade level in line with existing practice. It is expected that during the first year, the cost of monetization of these allowances will be quite substantial but by the third and fourth years, the savings made would have positively impacted glaringly on the economy. These amenities include residential accommodation, transport facilities, medical services, and utilities such as electricity, water and telephone. The merits of monetization include efficiency in resource allocation, equity in the provision of amenities and encouragement of public servants to own personal houses. It also enables public servants to plan for a more comfortable post-service life.
In more specific terms, monetization of facilities, such as housing, furniture and vehicles will reduce capital cost, maintenance and running costs. It is also hoped that rent will come down, as public servants who make up over 80% of the tenants, especially in Abuja and Lagos, will have little money to offer to the landlords. It will also promote the observance of maintenance culture and discipline in the use of public utilities since the individuals will now have to pay for such services, which hitherto were paid for by government. In addition, the monetization of medical treatment will go a long way in curbing submission of spurious bills and delays in processing refund of medical bills. As it is expected, the exercise involves huge amount for the reform implementation, N60 billion has been estimated (The Guardian, Sunday September 4, 2005, p.l), for the federal agencies and parastatals, who will as from October, 2005 start receiving salaries with monetized benefits. The merits of monetization include efficiency in resource allocation, equity in the provision of amenities and encouragement of public service to own personal houses. It also enables public servants to plan for a more comfortable post service life. Furthermore, it minimizes waste, misuse and abuse of public facilities. For these reasons, the concept of monetization has gained worldwide acceptance.
The main goal of any society is to achieve a steady and rapid socio-economic development. This implies an improvement in the quantity and quality of goods and services as well as equity in production and distribution of such goods and services among the people of a nation. The effective distribution of wealth is the social dimension of development. It is expected that when fully implemented, the reform programme will minimize waste, misuse and abuse of public fund and facilities, encourage public servants to own personal houses, enable public servants to plan for a more comfortable post-service life, reduce capital cost, maintenance and running costs and reduce rent as public servants who constitute majority of tenants in urban centers, will have little money to offer to the landlords.
However, Nigeria has experienced negative and slow growth and is one of the weakest growing economies in the world on a per capita basis, especially for the period 1981 to 2000. Since independence, the economy has never had a growth rate of 7 percent or more for more than three consecutive years. The Human Development Index (HDI), a composite measure of income and access to education and health services, ranks Nigeria 152nd out of 175 countries in 2001. This low HDI score reflects the situation with regard to poor access to basic social services in the country. National data indicates that the number of poor people increased from 18 million to almost 68 million between 1980 and 1996. Recent estimates indicate that in 2001, over 70 per cent of the populations are living below the international income poverty line of Si per a day. World Bank in a document: ‘ Where is the wealth of Nations? Measuring Capital for the 21st Century1 placed Nigeria at the lowest rung of the world’s development ladder after Ethiopia (The Guardian, Friday September 16, 2005 pl-2).
Given the deteriorating social indicators, which also show dramatic differences between the poor and non-poor, both in education, health status, housing, food and in access to other social services, one evaluates the impact of the current monetization policy on national development.
The point made is that the exercise will help to create the necessary environment to grow the economy, encourage private initiative, and facilitate creativity and innovation, and more importantly, improve the quality of service deliverance, promote patriotism and efficiency among civil servants. Despite the perceived gains of the monetization policy, the exercise, both in the short and long run, will have adverse implications on the people and the economy generally.
The poor are often the most vulnerable to the ultimate consequences of any action on public sector reform: economic crises and instability, deteriorating standards of public services and delayed payments of pensions, scholarships and other benefits. For instance, among the 161,342 in the core Federal Civil Service about93,000 are between levels 01 to 06; about 62,000 between 07 to 13; while the uppermost echelon is about 6,000 (The Guardian, Sunday August 21, 2005 p4). The implication is that of the 30,056 to be disengaged (The Guardian, Sunday, September 4, 2005, pi) about 90 percent will be the lower cadre of civil servants within the poverty bracket; especially those without entry qualifications for the positions they occupy. The poor are the least able to protect themselves or by-pass the consequences of government failure in the provision of basic services (social services, law and order) or an over-intrusive and cumbersome government regulatory and administrative framework. In virtually every developing country, women, the poor and less educated generally find that dealing with the bureaucracy is a demoralizing and humiliating experience, the current reform and downsizing will confirm their fears and worsen their situation.
The reform process places special strains on the civil service, which must manage the change process and at the same time undergo major adjustments that may increase uncertainty and lower morale in the transition period. In many countries the civil service unions are powerful and vociferous in their opposition to any visions of a leaner public sector, particularly, the plans put forward by external donors. The new euphemisms and catchwords like “rightsizing” as opposed to retrenchment, for example, fool no one. Serious divergences between civil service groups are likely to emerge. The divisions maybe lateral (between the different “cadres”), for example and horizontal (between higher and lower level civil servants). There is a basic problem here in that responsibility for the entire reform process – in terms of design mobilization of donor support and implementation – is assigned to a group (senior civil servants) that may feel it has the most to gain from the envisaged changes, in terms of job security and an enhanced allowance. Such situation, normally, deepens antagonism between the senior and junior cadres, and invariably negates the very aims of the reform programmes.
There is also the ‘threat of abandonment’, that is, the continuity of the reform, which depend so much on the political survival of the group undertaking the reforms. Where the groundwork for implementing reforms are not done, and an effective alliance of interests in favour of reform have not been mobilized, undertaking far reaching reforms may involve the unreasonable requirement that the political leadership accept the risk of being pushed out of power and in such a likely event, especially in Nigeria, which lack a ‘basic democracy1 the reform is most likely to die. Also, the same government that is very notorious in non-payment of public servants’ salaries as at and when due, who owe pensioners months of unpaid salaries., that owe academic and non-academic staff of university three months’ salary arrears etc is now engaging in N60 billion gigantic reform programme. How is it going to finance severance payments when it finds it difficult to pay normal salary? What is worrisome is that the current capitalization of financial institution have not placed banks on a strong footing to finance some aspect of the monetization such as car loans and mortgage. Thus, the exercise will likely suffer some major set-backs due mainly to want of capital and unwillingness of financial institutions to support the programme financially.
The monetization policy is being selective in implementation and it brings schism among civil servants. At the federal level, some selected ministries – Federal Ministry of Finance, National Planning Commission (NPC), State House/Office of the President and the Ministry of the Federal Capital Territory have implemented monetization in full, while other ministries and especially the parastatals that make up to 70 percent of civil servants are ignored. The experience of the then Finance Minister, Dr Okonjo-Iweala, in the hands of irritated and discontented public servants over nonpayment of monetization allowance are a harbinger of what it holds in future. Government has unwittingly drawn up two classes of civil servants in Nigeria: those they refer to as ‘core1 civil servants at Abuja on one hand, and the parastatals, the state civil service and local council workers at the other hand. This will bring discontentment among those in parastatals, and whatever push in the economy the monetization policy is meant to achieve will be very minimal.
In Nigeria, most reforms are talked about at the strategic rather than operational level. Yardsticks are not in place to demonstrate advantages of the reform that mean something to ordinary people. Only a few people at the top know what the policy is actually trying to achieve. Thus, the exercise is elitist, both in conception and implementation. A look at table 1 shows that those in echelons of administration enjoy higher percentage of the monetized allowances from accommodation down to furniture allowance. For instance, with the low percent rate for accommodation to junior workers from grade level 0l to 06, there is a very low prospect for them to buy up their quarters through the bidding exercise. Therefore, the intention of providing house and reducing the poverty of civil servants will not be achieved, especially, when the junior workers constitute more than half of government work force. Also, the exercise is structured in disguise to favour the elite groups, as the legislature, ministers, political appointees and those in Federal State House have been paid in full their monetization allowance.
The monetization exercise lacks sincerity and consistency in implementation. The monetization circular stated that 100 percent will be paid for accommodation allowance, while 200 percent allowance of their annual basic salary will be paid for in every five years period, to enable the public servants purchase the quarters they are living or purchase house on their own. But from the implementation so far, the civil servants who have been paid, received only 10 percent spread over 12 months. The morale of civil servants is dampened with this kind of policy inconsistency, and the commitment and efficiency the policy is meant to address will be weakened.
Tangential to the above is lack of transparency and non-application of due process, which is a cardinal anti-corruption programme of the administration, especially, in the sale and bidding of some government quarters and disengagements of staff. The sale of 1004 Housing Estate, and Federal Government properties in Lagos has been described as scandalous. The houses were reported to have been sold to several well-heeled Nigerians, (including the late wife of former Mr. President) and their companies, allegedly without due process. The monetization policy gives opportunity for owner-occupier bases, that is, the civil servants occupying government quarters have the right for the first refusal. This was not followed in the sale of 1004 Housing Estate, the United African Company of Nigeria (UACN) bided the House for N7 billion as the highest bidder, while the civil servants have raised N8 billion to pay for the Housing Estate, based on the right of first refusal, but the government disregarded that provision and threatened to evict them forcefully because the building is located in a choice area of Lagos (The Guardian. Sunday January 16,2005p.44). The sale of these houses is not in the spirit of monetization; it is driven by the interest of the elites and such encourages corruption amongst civil servants.
The monetization policy, especially, on residential accommodation, has generated enormous apprehension among all classes of civil servants. Government has apparently made no contingency plans for those civil servants living in government-rented quarters. This means many of these officers face the dim prospect of being thrown out on the street, like what the 5,000 civil servants with their families were experiencing in Lagos (The Guardian, Sunday April 10,2005, p.6-7). Such experience of forced eviction certainly leads to non-commitment of the affected civil servants in discharge of their duties.
Also, with the general high cost of property in our major cities, like Abuja and Lagos, and the under-developed nature of the mortgage sector in the country, hardly would any civil servant be able to buy these government-owned houses if and when they are disposed of at commercial rate, especially now that government has reneged on her promise to pay lump-sum as housing allowance. Chances are that many civil servants will be forced to relocate to less conducive environment, with attendant adverse consequences on productivity, loyalty and morale. Finally, civil servants are traditionally conservative, especially when it comes to change; their resentment to change is either from the ideological interest of organized labour or the natural fear for loss of job. The on-going reform is already mired in ideological conflict between the administration’s Economic Team on one hand and the Secretary to the Government of the Federation (SGF) and the Head of Service (HOS) on the other. There is mutual distrust and suspicion. The Presidents’ Team complained mat policy issues from the SGF’s office ‘have been uninspiring and follow-ups on circulars ineffective … and not being proactive in the domain of polities’ (The Guardian, Sunday January 23, 2005 p2). The Team alleged institutional weakness inherent in SGF and HOS offices and called for their removal because, they are too protective of the old setup in the service. While the HOS argues that the implementation of the reform programmes as it affects disengagement lacks due process. This kind of power tussle and schism among the elite group is bound to affect the general implementation of the programme.
CHALLENGES AND IMPLEMENTATION
A good number of challenges face the implementation of the policy. These include:
Challenging environment – there will be cases where specific poverty groups are affected adversely by the reform process. This highlights the need for effective and continuous monitoring of the impact of reforms and the need to develop policies to compensate and protect the most vulnerable sections of society from the impact of adjustment. It is sometimes argued that in the long-run, the poor do benefit from the faster economic growth engendered by reform. However, this view should not be allowed to compromise the development of programs to protect these groups in the short-term, particularly given the fact that they are often the last to benefit from faster growth.
How to educate the political leadership in the benefits of reform must be given priority. In Nigeria, for example, new appointees to the Cabinet (those without direct experience in administration) must learn about aspects of the operations of their agencies and key policy options while dealing with day-to-day issues, with little more than cursory briefings by senior officials. It is on record that political appointees kill reform programmes. Ideally, there is need to provide training on public sector reform issues in seminars to sensitize and beat them into the reform course.
There should be mobilization of the required amount of resources to fund the monetization of allowances and terminal benefits of drivers who will be laid off due to the policy. According to The Guardian report, government has at present made N3.5 billion available for the entire exercise of reform programme, while the estimated amount of N60 billion is needed (Guardian on Sunday, September 4, 2005 p.l). Also, the Permanent Secretary, Federal Ministry of Education in a seminar, “Building Effective Government” 2004, said government needs N8.5 billion (US $62.96 million) to pay the requisite allowances to the top-most echelon alone. This means government have to source for fund to execute the monetization policy, and government has not been able to find the funds to pay civil servants all their entitlements. Predictably, civil servants are finding the situation very frustrating.
There is also need to develop equitable criteria for the disposal of the assets, for example, government-owned houses that would become available for sale as a result of the policy. There are the challenges of balancing the requirement to get market value on the affected public assets and the need to give some consideration to public servants, whose emoluments have not always been market-driven over the years, equal opportunity to bid for these assets.
Another challenge is the widely perceived belief among civil servants that their jobs are on the line. The on-going disengagement of excess drivers is seen as a prelude of what is awaiting other cadres. What is happening to drivers show that job security of civil service is no longer sacrosanct. Unless this fear is effectively addressed, it has the capability of lowering morale in the service and undermining ongoing efforts to curb corruption in the system.
Expectation of higher take-home pay has been substantially raised within the system and because information about the expected windfall is already within public domain, prices of items in the markets have gone up. Experience has shown that once prices go up in Nigeria, they never come down. So, the civil servants are adversely affected from both the income and the expenditure angles. Also, while the government has been quick and effective in withdrawing the privileges and perquisites traditionally enjoyed by civil servants, it has been rather tardy in paying compensation for their loss.
A policy of openness in government is a big challenge. Much has been written about the high levels of corruption prevailing in Nigeria especially among political appointees and the administrative cadre. Improving citizens’access to information about government can have important benefits in terms of checking corruption andimproving the quality of decision-making, and in this regard the laws on secrecy in government may need to be enacted in Nigeria. The low levels of civil service pay are part of the explanation, but the pervasiveness of corrupt practices in the broader society is a more important factor. It is a difficult problem, without easy clinical solutions. The legislations on corrupt practices should be made more active so that the monetization exercise will not be killed
Outright monetization of benefits in Nigeria represents a fundamental change being wrought in the system. Like any other changes of immense impact, it entails significant challenges to all stakeholders. For the monetization policy to work there are certain conditions to be in place.
The first is better targeting of poverty groups; social safety-net programs can be maintained and even extended to ensure that it is the poor that actually benefit from such programs. Even with all these favorable factors, there will be cases where specific poverty groups are affected adversely by the reform process. This highlights the need for effective and continuous monitoring of the impact of reforms and the need to develop policies to compensate and protect the most vulnerable sections of society from the impact of the reform.
Secondly, in Nigeria where there is widespread cynicism about virtually every institution of government, the motivation of those advocating some reforms may itself be questioned. Therefore, commitment of the political leadership at the topmost level to itsimplementation is instrumental. Previous reform programmes failed due to non-commitment of the political class who failed to carry the people along. The current logjam in the sale of 207 housing properties of the Federal Government in Lagos is the handiwork of political elite who have vested interest in the United African Company (UAC) that purportedly bought the 1004 Housing Estate.
If a country is to maintain control over the pace and content of its reform agenda it must ensure that its external reserves are sufficient to absorb short-term shocks. Hence, not even the most earnest domestic proponents of reform would ever want to see a situation where external agencies gained such control over their countries’ policies through an emergency lending program. Where the reform process has to be externally designed, initiated and then sustained through promises of enhanced resource flows (or indeed, threats of withholding aid) progress may be slow and deceptive. Thus, there is a great need for a country to take full “ownership” of their reform programme.
The initial choice of reforms is very important here. Ideally the activities/sectors chosen should have the broadest and most direct interface with the public. Related to the above is the receptiveness of civil servants to the idea, knowing that most programmes have a top-down approach.
Finally, for developing and transiting economies reform is very difficult. Unless you have a mandate from people, big picture reform is impossible. Changing the entire working of government cannot be done against society. But reform does not have to be about changing everything. Reform should be driven to policy priorities. It is important to keep focused. Big reform agenda have the potential to become muddled. For example, the move toward transparency is about explaining to citizens what the government is doing with their money so also the sale of government quarters. For the monetization to have the desired impact on the economy, it must be all-inclusive, at the state level, local government level and even some of the private sector that have not monetized their allowances.
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