Transformation and High Sustained Growth: Governance and Public Service in Nigeria

Richard Joseph
Richard Joseph
Richard Joseph Professor Emeritus - Northwestern University, Former Brookings Expert

October 21, 2008

Editor’s Note: From October 21-24, 2008, the 14th Nigerian Economic Summit convened to address how Nigeria can maximize its potential to become one of the top economies in the world by 2020. During the opening plenary session, Richard Joseph reflects on governance and public service in Nigeria and provides key initiatives to consider.

Thank you for inviting me to speak in two plenary sessions of the 14th Nigerian Economic Summit. In view of the current global financial crisis, this is a very appropriate moment for sober reflections. The general topic I will address is “Transformation and High Sustained Growth.” On this occasion, I will focus my remarks on Governance and Public Service. While I was born in Trinidad and Tobago, and became an American citizen by derivation from the citizenship of my parents who had earlier migrated to the U.S., I became fully engaged in Nigeria’s quest for growth, democracy, and development soon after joining the University of Ibadan as Lecturer in Political Science in February 1976.

Opportunities, constraints, and pathways to high sustained growth

In March 1977, just a year after my arrival, I was invited to speak at a conference on the Nigerian Draft Constitution convened by the Institute of Administration of Ahmadu Bello University in Zaria. Many Nigerian political and academic luminaries, such as Alhaji Aminu Kano, Alhaji Nuhu Bamali, Professor Bolaji Akinyemi, Alhaji Shehu Shagari, Dr. Ibrahim Tahir and others were present at that conference. When a book of the proceedings was published, the first chapter was the paper I had presented, titled “National Objectives and Public Accountability.” In the following three decades, I have been invited to take part in many deliberations with Nigerians on finding pathways to greater prosperity and democracy.

The planning document for this panel appropriately quoted the American Thomas Friedman that, in our globalizing economic system, “one of the most enduring competitive advantages that a country can have today is a lean, effective, honest civil service.” In fact, the world is flat in some respects and lumpy in others. The global topography has been shifting markedly in our time. Forty years ago, Ireland, Portugal, and Spain had slow-growing or stagnant economies, and their peoples were obliged to emigrate in search of gainful employment. Now, their dynamic economies attract labor from overseas. China, India, and Brazil are rising powers, and so also is Russia, in some respects.

Where does Nigeria stand? This conference is focusing on the question of Nigeria maximizing her potential to become one of the top economies in the world by 2020. As you all know, with the vast resources at its command, Nigeria should have already been a middle-income country by 2000. In 2020, its population will be at least as large as today’s Brazil. But will Nigeria be a rising power then as Brazil is today? The key challenge is the achieving and maintaining of a high level of growth during the next 12 years. In so doing, Nigeria will not only boost its productivity and the flow of external investments and trade, it will also lift tens of millions out of poverty as many countries have done, especially in Asia, during the past half-century.

The topic of this Summit is aptly chosen: “The Race to 2020: The Realities. The Possibilities.” It reflects the core aspects of a collaborative project I am presently designing entitled, “Accelerating the Creation of Enterprise Societies” or ACCESS. During my presentation tomorrow, I will summarize the essence of that project which is intended to complement an Africa Growth Initiative at the Brookings Institution in Washington, DC. In a draft paper for that project, I pose these questions: what are the opportunities, what are the constraints, what are the pathways to achieving high sustained growth in a selected group of African countries that includes Nigeria? And the target year chosen for ACCESS is 2020. Indeed, this is the first public occasion on which I am speaking about ACCESS. This week we are also launching a book, Smart Aid for African Development, co-edited by Alexandra Gillies and me, the first copies of which I received before leaving the U.S. for Nigeria. Ms. Gillies is currently in Nigeria conducting doctoral research on oil sector governance reforms. This is therefore a most opportune moment to explore with you what appear to be the key requirements for accelerated growth with equity in Nigeria.

Taking advantage of favorable opportunities

Nigeria’s Constitution Drafting Committee of 1976 proposed the establishment of what I refer to today as an “enterprise society”, and provided a good definition of such a society: “an economic system in which (i)) there is not a concentration of economic power in a few hands or groups; (ii) there is a population of moderately wealthy people and there are no extremes of poverty or wealth; and (iii) the economy will be open and participatory; that is to say, there will be opportunity for public and private enterprise to co-operate.” Several of the papers presented at the Nigerian Draft Constitution conference reviewed the stipulations in the draft constitution to endow Nigeria with a more effective, transparent, and accountable public service. In the subsequent three decades, Nigeria has gone through many changes in constitution, regimes, and a multiplicity of commissions, agencies, and nationally directed exercises with the aim of achieving less corrupt and more efficient public service and governance. Today, we must explore new pathways. I believe that the appropriate institutional mechanisms can be identified, or those already in place improved, if broad agreement is reached on a commanding vision and commitment.

If we use per capita income of $US 1.25 per day, the new World Bank criterion for those living in poverty, Nigeria’s poor almost match the entire population of the next most populous African state, Ethiopia. The poverty rate in sub-Saharan Africa has remained unchanged at approximately 50% for three decades. As we all know, the greatest method of reducing poverty is the achievement of high sustained growth. But such growth is not possible without radically improved standards of governance. Better governance and the building of stronger institutions would enable Nigeria to take advantage of several favorable opportunities, domestically and internationally. I will summarize them briefly:

  1. Despite recent declines, prices for petroleum and natural gas have risen to high levels on world markets. Greatly improved management of these resources would enable Nigeria to have a reliable flow of state capital for investment. Nigeria is now engaged in reforming the management of its oil industry but the progress being made, judging from the most recent issue of Nigeria Energy Intelligence, is woefully slow.
  2. The Nigerian constitutional democracy weathered a drastic shock to its functioning as a result of the catastrophic elections of 2007. The judicial review process, despite its imperfections, and the election review exercise subsequently conducted, should be followed by a sustained national exercise to guarantee much improved elections in 2011.
  3. Religion has become a major fault line internationally. No country in the world matches Nigeria in the size of its combined Muslim and Christian communities, and the transcending of religious divisions in many areas of political life. The opportunity to exercise global leadership on inter-religious affairs, and especially the reduction of religiously inspired violent conflicts, could enhance Nigeria’s image and produce great benefits for the country internationally.
  4. Of the many sectoral improvements in Nigeria, none is as striking as what has taken place in the banking sector. Advances in the banking sector and telecommunications demonstrate the emergence of the long frustrated Nigerian capacity to operate a modern economy that can gradually approach international standards.
  5. The Delta crisis has been a major unresolved area of sustained violent conflict in Nigeria. While unfortunate in many respects, Nigeria has been fortunate so far in the localized nature of this crisis. But time is rapidly running out. The daring and increasingly lethal capacity of the militias can catapult this conflict to a wholly different level. The opportunity exists for much bolder efforts to tamp down this crisis. It is now essential to make more effective use of available international assistance.
  6. The federal structure has been one of the great achievements in Nigerian governance and one which has endured through many upheavals, including a devastating civil war. With greater resources going to state and local levels, Nigeria is virtually alone in Africa in the creation and refinement of a vibrant federal system. However, still to be demonstrated is that this system not only can survive but also perform in a cost-effective manner. Important advances were made in the publishing of transfers from the Federation Account to state and local governments. Whatever the reasons for suspending this practice, the fact is that accountable governance in Nigeria cannot be achieved if Nigerian citizens do not know, in a timely and accurate manner, exactly what financial resources are available at each level of government and how those resources are used.
  7. The world is in great need of the effective exploitation of what Nigeria has in abundance: oil, gas, agricultural land, and fisheries. Nigerians would be in a highly advantageous position if these resources were transparently and responsibly exploited. The ultimate resource of any country is its people. As all rapidly developing nations have shown, investing in the education and health of its people is as significant as any other investments that can be made. Here we come full circle again: none of Nigeria’s great potential can be realized if these investments are not accompanied by a revolutionary transformation in the quality of governance and public service.

Nigeria’s Achilles heel

In 1988, exactly twenty years ago, after serving as a program officer with the Ford Foundation in West Africa, I joined Emory University and the Carter Center in Atlanta, where I established the African Governance Program. At that time, many people could not understand what governance meant and why it merited a separate program. A year later, the World Bank issued its path-setting report: Sub-Saharan Africa: From Crisis to Sustainable Growth. The following excerpt from this report could be written virtually unchanged today:

Sub-Saharan Africa as a whole has now witnessed almost a decade of falling per capita incomes, increasing hunger, and accelerating ecological degradation…Major efforts are needed to build African capacities…they must go hand-in-hand with good governance…Weak public sector management has resulted in loss-making public enterprises, poor investment choices, costly and unreliable infrastructure, price distortions…and hence inefficient resource allocation…Even more fundamental in many countries is the deteriorating quality of government, epitomized by bureaucratic obstruction, pervasive rent seeking, weak judicial systems, and arbitrary decision making.

The World Bank 1989 report identified what has been the Achilles heel of Nigeria throughout most of its life as an independent nation. To use the apt title of a book by my former student, Professor Eghosa Osaghae, Crippled Giant, the decline in the quality and probity of public institutions has been one of the principal causes of stunted economic growth and social development in Nigeria. What is sometimes referred to as “the Nigerian factor”, and other euphemisms, has left the nation vulnerable to external and internal machinations that add significantly to the transaction cost of any undertaking. Internationally, the brand name “Nigeria” has sunk very low, and now often connotes corruption, crime, and creative fraudulent and deceitful practices. Here, for example, is a recent comment by one of America’s leading television comedians, Jay Leno, on his nighttime show:

Hey, before we begin. I want to warn people in Nigeria who might be watching our show. If you get any e-mails from Washington asking for money, it’s a scam.

It is not just in Nigeria that people can be heard trading their best “Nigeria” jokes. Unfortunately, this situation is not a joke but a profound tragedy. Underlying it are the realities of stunted growth, dire poverty, and mass distress. The time has come to think and act energetically about a Nigerian project that places good governance and the building of capable public institutions at its center. We have seen other nations transform their domestic economies and their external image in our era. Nigeria can similarly be transformed, first at home, and then in its image abroad and this can be accomplished by 2020.

Barack Obama and African governance

There is today a new global governance agenda of which Nigeria should become a key sponsor in Africa and internationally. The global financial crisis has had the sweeping, and positive, consequence of forcing many countries to reassess the importance of active and prudent government oversight of financial entities that had become swashbuckling in their activities, generating vast wealth for groups of individuals but endangering the welfare of millions of their citizens. Nigeria, because of its crippling experiences with dishonest government and criminal networks, has taken important steps to promote the accountable and transparent use of public and private financial resources. Former President Olusegun Obasanjo served on the Board of Transparency International before returning to public office in 1999. He was a lead sponsor of the New Partnership for Africa’s Development (NEPAD) and the African Peer Review Mechanism (APRM), both of which emphasize good governance. As President, he backed his Finance Minister, Dr. Ngozi Okonjo-Iweala; Dr. Obi Ezekwesili, Minister for Solid Minerals; Dr. Charles Soludo, Head of the Central Bank; Mallam Nasir el-Rufai, Minister for the Federal Capital Territory; and Mallam Nuhu Ribadu, Head of the Economic and Financial Crimes Commission (EFCC) in their bold actions to advance accountability and transparency in government and business in Nigeria. For a moment, Nigeria seemed poised to emerge as a genuine reformer in state financial management. Nigerian branches of Publish What You Pay and the Export Industries Transparency Initiative were established along with other entities seeking to engage business and civic actors in a broad process of institutional renewal.

I must leave it to others to assess the current state of these initiatives and suggest what must now be done to endow Nigeria with a truly robust movement to radically improve governance and public service. You are all aware of the sweeping changes occurring worldwide as governments take control of banking and investments systems via a variety of mechanisms. In my own country, the United States, in just a few months we have witnessed a profound reversal by a conservative Republican Administration that now accepts a strong economic interventionist role for government including public ownership of significant assets in private banking and insurance companies. Also of significance to Nigeria and the rest of Africa is that the Democratic Party stands a good chance of extending its representation in Congress and electing the next U.S. president. Not only would Barack Obama thereby become the first person of African descent to be elected to the highest office in the land, as a person of mixed racial heritage whose father was born in Kenya but whose mother came from the heartland American state of Kansas, he represents in his person the union of Africa and America.

With regard to the specific issues we are discussing today, it is highly significant that Senator Obama is the first major American political figure who demonstrates a clear understanding of Africa’s debilitating deficits in governance and public service. In a lecture given at the University of Nairobi, Kenya, in August 2006, Senator Obama stated:

For all the progress that has been made, neither Kenya nor the African continent has yet fulfilled its potential. Like many nations across this continent, where Kenya is failing is in its ability to create a government that is transparent and accountable, one that serves its people and is free from corruption…If the people cannot trust their government to do the job for which it exists, to protect them and to promote their common welfare, all else is lost. This is why the struggle against corruption is one of the greatest struggles of our time.

Recently, when asked about Africa’s development prospects in a nationally televised program in the U.S., Senator Obama made virtually the same argument:

What is true is that we’ve got to get better governance in Africa. We sometimes spend so much time running down government that we forget what it means, how important it is to have a functioning government, one that can deliver services. So that if you want to get a telephone you don’t have to pay a bribe, or if you want to start a business you don’t have to give a cut to somebody. Hopefully we can keep governments there more accountable so people can have a chance.

Further along in the interview, he proceeded to state clearly how this perspective would influence the policies of his Administration towards Africa and other areas:

I think if we send a signal, to Africa or the Middle East or anywhere in the world: We want to be a partner with you, we respect you. But if you are getting our help, we have certain expectations. We expect to see results on the ground. We are not just helping the wealthy and people who will send the money to Swiss banks. Hold people accountable but be respectful. I believe that can make a difference.

For the first time in American history, there is the real prospect of electing a president who not only who cares about Africa – former Presidents Jimmy Carter, Bill Clinton, and current President George W. Bush have each demonstrated this commitment in word and deed – but who, prior to coming to office, enunciates a clear understanding of the African predicament, and who states, in paragraphs not campaign sound-bites, how that understanding would influence his Administration’s actions and policies. It is a highly competitive election and Senator John McCain could still win. However, in the event that Senator Obama is elected President, Nigeria should quickly embrace what can be called the Obama doctrine on governance and public service. Nigerians and other Africans can take ownership of that doctrine since it was forged in the struggles within the continent. I can attest to that because this is where I learned it.

From ideas to implementation

I hope to work with Nigerian colleagues here and abroad, as well as friends of Nigeria around the world, to design and implement a project that addresses this transformation. This is not the first time I am making such an offer. In March 2000, I delivered the Obafemi Awolowo Memorial Lecture at the Nigerian Institute of International Affairs. The topic was “Nigeria and the African Diaspora: Uniting for Peace, Democracy and Development”. After my address, Dr. Bola Tinubu, then Governor of Lagos State, suggested that he would like me to meet members of his cabinet to discuss how my ideas could be implemented. I was ready to devote a few years to such an engagement, but attempts to arrange a return visit were not successful.

What project did I have in mind? Not surprisingly, it concerned governance and public service. I intended to propose that we would identify a critical area of the state government that was not functioning well. I would then assemble a team of Nigerians and non-Nigerians and, with the support of international institutions such as the African Development Bank, the World Bank, and others, we would set about working to make that institution achieve the purposes for which it was intended.

Today, I will speak more broadly about a Nigerian project because I am addressing individuals — and through them the business, governmental and non-governmental organizations they represent – who have the capacity to make such a project a reality. Here are nine initiatives worth considering:

  1. Develop new incentive structures. Financial resources must be made available to provide incentives for good governance and to build capable institutions. External philanthropic organizations, such as the MacArthur Foundation in the United States, make annual awards to non-governmental organizations that demonstrate such achievements. Several Nigerian organizations have been recipients of these awards. Much greater impact could be achieved by the creation of a multiplicity of such award programs within Nigeria and the wide dissemination of their accomplishments.
  2. Foster good practices across Nigeria. Nigeria’s great diversity has undoubtedly posed a challenge to achieving good governance and institution-building. However, it can also serve as a valuable resource. It is curious that we can speak of “the Nigerian factor” to refer to practices that are evident nationwide. If bad practices can cross regional, religious, and ethnic boundaries in Nigeria, why couldn’t the reverse process take place? Where are the repositories of good governance and public service in Nigeria? We know they exist, otherwise social and economic life would be impossible. Could these repositories – in educational, communal, faith-based, business, sporting, cultural, and other institutional arenas – be identified, their values and practices distilled, and transfers encouraged to the formal institutions of government?
  3. Reward institution builders. Exactly 50 years ago, The Ugly American, a book by William Lederer and Eugene Burdick, was published. As I mentioned at the outset, Nigeria, as a brand name, has become associated with many negatives: fraud, scam, corruption, disorganization. As a consequence, hard-working, honest and responsible Nigerians have been marginalized by their counterparts for whom rules and laws exist to be broken, manipulated, or skirted. A national conversation should ensue in Nigeria as to how the scales can be tipped decisively towards citizens who, despite immense daily challenges, firmly uphold the values of public service and good governance. A U.S. columnist, David Brooks, describes the outgoing American president as “inept at governance”. “It turns out”, he adds, “that governance, the creation and execution of policy, is hard.” If governance is hard, in a nation with the laws and institutions that exist in the United States, transforming entrenched practices of bad governance in a much poorer country such as Nigeria will be exceedingly difficult. It can only be accomplished via an internally driven process of transformation.
  4. Celebrate public service heroes. During the course of my research on the Nigerian transition from military to civilian rule, from 1976 to 1979, I had the opportunity to interview many Nigerians in political, government, business and other sectors. I often came away from those meetings bursting with pride. I met impressive former civil servants, such as Nuhu Bamali and Allison Ayida, who would be outstanding in any nation. Our conversations would range from the challenges faced by Nigeria in the late 1970s to those that had been overcome in the past. One reason Nigeria has held together as one nation, despite its great diversities and many social tensions, is because of the role played by such distinguished public servants who connected and related with each other on the basis of shared commitments to the public welfare, as well as their high intellectual and administrative capacities. Ways can be found to bring the insights and examples of such public service heroes into the process of constructing ethical, accountable, and transparent institutions today.
  5. Engage the Nigerian diaspora. Nigeria has a rapidly growing diaspora overseas. In the United States, Nigerians are increasingly prominent in many professions. They also organize themselves in a wide variety of associations. The performance of the overwhelming majority of these Nigerians reflects the ethical and other standards of their professions. They can play a significant role in the transformational processes needed in governance and public service within Nigeria. A few years ago, economist Paul Collier estimated that the private wealth held abroad by Nigerians amounted to US$40 billion. Nigerians possess the human, financial and institutional capital in its diaspora that, in the case of countries such as Taiwan, India, China, and Ireland, has contributed greatly to their explosive growth.
  6. Create a Nigerian Development Corps. Outreach can involve large comparable countries. But it can also involve partnerships with individuals in a variety of institutions. From personal experience, I can attest that the number of persons in search of effective ways to contribute to the development of poorer countries, apart from making donations to humanitarian organizations, is very high. At my university, Northwestern, students have created organizations, such as GlobeMed and One Acre Fund, which operate in several African countries and recruit students from campuses across the U.S. The Nigerian Youth Service Corps is now an established component of public service. It is time to consider the creation of a Nigerian Development Corps, involving Nigerians at home and abroad and non-Nigerians, that would promote good governance and institution-building.
  7. Build South-South partnerships. Development cooperation must also be revamped. Such a change can involve projects in which a nation such as Nigeria reaches out to establish desirable partnerships based on its own needs and aspirations. Larry Diamond, who wrote the foreword to our book, Smart Aid, called for the “reinvention of aid”. Two potential partners for such a project would be Brazil and India which, like Nigeria, are large and complex multiparty democracies. They also share with Nigeria high levels of poverty and corruption. However, both are experiencing high sustained growth and are generating enterprises that compete internationally. What Brazil and India are achieving under vigorous democratic systems should also be possible in Nigeria. China is another important partner for Nigeria, but it has a very different political system. Economic enterprises in the democratic and capitalist West have found ways to cooperate with Chinese firms. The same can be done by both private and public sector entities in Nigeria. However, a broad encompassing national project is best conceived with nations, such as Brazil and India, with which Nigeria shares democratic constitutional and political systems.
  8. Model success in governance. Two programs I have helped develop since joining Northwestern six years ago are relevant to the challenges being discussed here: the Research Alliance to Combat HIV/AIDS (REACH) funded by the Bill and Melinda Gates Foundation, and the Consortium for Development Partnerships (CDP) funded by the Ministry of Foreign Affairs of the Netherlands. One of the CDP projects, involving the Centre for Democracy and Development (CDD) in Abuja and the Center for Democratic Development (also CDD) in Accra, Ghana, was entitled “Modelling Success in Governance”. These centers conducted comparative studies of the electoral commissions in Ghana and Nigeria. The notion of modeling success in governance can also be applied to REACH. High sustained growth in Nigeria requires better governance and strong institutions, a point I will explore in my presentation tomorrow. The achievement of such objectives will not occur via the application of formal concepts in an instructional way, but through praxis, the combination of theory and practice in real world situations, as is currently taking place with REACH. In presenting these lessons, we can encourage others to do likewise, based on their own experience in creating and running organizations that serve the public interest rather than undermine it.
  9. Improve health and education. All countries that overcome underdevelopment through attaining high sustained growth have invested massively in improving their health and education systems. My direct engagement with CDP and REACH has made me acutely aware of Nigeria’s huge deficits in its health and education systems. Domestic and international financial resources, and opportunities to engage trained personnel overseas and at home, are abundant. What is lacking is not just desired outcomes but the governance and institutional capacity to achieve them. With sustained effort between now and 2020, Nigeria could significantly improve its health and education systems and increase the prospects of creating a dynamic modernizing economy.