Africa Business Communities

Adedunmade Onibokun: A call for corporate governance in Nigeria’s public sector

Intro

The essence of good governance in the administration of national agencies cannot be over emphasized especially with current global economic challenges happening around the world. Several countries around the world are fighting their way out of a recession, the upsurge of civil & violent uprisings, home grown terrorism and militancy. These circumstances call for the governments to be pro-active in their role of governance. In essence proactive social and economic policies must be put in place. Legal structures must be empowered and the Rule of law should be above all sacred.

Corporate governance

Corporate Governance is a big deal in the private sector today, stakeholder and shareholder interests are constantly at daggers drawn, accountability and transparency are now mandatory values in corporate institutions and effectiveness in managing organisational wealth is considered paramount. These procedures are of immense importance to the financial growth of institutions and boost economies in the long run. However, one vital part of national economies is being ignored in this drive for better corporate governance, which is the public sector.

Public sector driven institutions i.e. institutions that provide services for the people must also be better regulated in order for them to provide the dividends of democracy to the citizenry. With critical examination of Corporate Governance in Nigeria, an African country which is rated 3rd world and largely underdeveloped with a population of about 160, 000,000 (one hundred and sixty million) people, these statements can never be more of a reality.  The Nigerian public sector is generally admitted by Nigerians themselves as definitely not functioning at optimum capacity, there are various lapses by government agencies which contribute to poor governance and in extension underdevelopment. It is both a truism that no nation develops beyond the capacity of its public service, and there is broad consensus amongst Nigerians that our public service is broken and dysfunctional. Corporate governance principles must not only be promoted in the private sector but also be applied to managing government institutions and parastatals.

The public sector refers to all organizations that exist as part of government machinery for implementing policy decisions and delivering services that are of value to citizens. It is a mandatory institution under the Nigerian Constitution of 1999 (Salisu, 2009). Section 169, Part VI, Part 1 (D) and II(c) of the 1999 Constitution provides that

“there shall be a civil service of the Federation” and of states respectively. The Public Service in Nigeria is made up of the following:

(1) The Civil Service, which is often referred to as the core service and is composed of line ministries and extra-ministerial agencies; and

(2) The Public Bureaucracy, which is composed of the enlarged public service, including the following:

(a) Services of the state and national assemblies;

(b) The judiciary;

(c) The armed forces;

(d) The police and other security agencies;

(e) Paramilitary services (immigration, customs, prisons, etc.);

(f) ‘Parastatals’ and agencies including social service, commercially oriented agencies, regulatory agencies, educational institutions, research institutes, etc. (ibid).

In Nigeria, the public service consists of the civil service – career staff whose appointment, promotion and discipline are under the exclusive control of the Federal Civil Service Commission (FCSC), national assembly service, the Judiciary, public officers in the military, police and paramilitary services, employees of parastatals, educational and health institutions (El-Rufai, 2011).  There is an estimated 3, 000, 000 (three million) civil servants working in Nigeria. These public service workers especially those stationed at the ministries however have low professional standards and a lackadaisical attitude towards work.

Corporate Governance in a nutshell can be described as the body of values, rules and procedures concerned with the operation of a corporation in regard to the overall interests of its shareholders and stakeholders.

Good public governance seeks to promote:

-          Accountability - being answerable for decisions and having meaningful mechanisms in place to ensure adherence to all applicable laws, regulations and standards.

-          Transparency / openness - having clear roles, responsibilities and procedures for making decisions and exercising power, and act with integrity.

-          Stewardship - enhancing the value of entrusted public assets.

-          Efficiency - applying the best use of resources to further the aims of the organization.

-          Leadership - promoting an entity-wide commitment to good governance starting from the top (Wadie, 2013).

The role of corporate governance in the public sector of a nation cannot be over emphasized as it deals with the management of the country’s resources and how they may be transformed into social and economic benefits for the citizenry both in the long and short term.  This involves making laws, empowering security and financial agencies, supporting small scale business industries or SMEs, providing adequate infrastructure such as adequate transportation means, providing employment, equipping health facilities and ensuring that the rule of law is supreme etc. Generally, this is only achievable when government is held accountable and there is transparency in governance.

The position that corporate governance is of immense importance to a Nation cannot be over-emphasized, especially in a country like Nigeria where there is a dire need for social development.  Corporate Governance deals with the effective use and management of a Nation’s resources to enable social and economic development. Government institutions must also be properly run and managed. Though, quite a number of corporate governance codes have been enacted in Nigeria.

It is the duty of government to utilise the nation’s resources for the advancement of the nation and in the interest of all. National budgets are drawn and executed yearly and government agencies are charged with implementing policies and using allocated funds to fund national and communal projects but without accountability and transparency on the part of the government officers, continuous budgetary allocations will continue to disappear without concrete evidence of its use. Similar to what may result if one continues to fetch water into a basket which continues to leak, such basket will never be full of water.

Corporate governance matters not only because the health of a country’s corporate sector matters for the country’s entire economy but because it matters greatly as an integral part of the country’s national development (Audu, 2007).

There are three fundamental reasons why corporate governance should not only be given special attention but necessarily an imperative. These imperatives are:

  1. There is a growing consensus about private sector led development and the need to strengthen the regulatory capacity of the state in such an economic context.
  2. Time has come when the privatization process in Africa should have great influence on the lives of the people.
  3. The financial crisis that hit East Asian countries in 1997 have been attributed partly to a wide range of poor corporate governance practice (Audu, 2007).

Currently in Nigeria, there are various laws and rules which aim to promote and strengthen corporate governance, most of these codes are however private sector focused. Various government organisations have been mandated to implement laws and codes which will strengthen good corporate governance ethics, these produced several codes regulating good governance in the Nigerian public sector including:

  • Code of conduct for public officers
  • Securities and Exchange Commission
  • Central Bank of Nigeria
  • Corporate Affairs Commission
  • National Pension Commission
  • National Insurance Commission

 

Factors affecting corporate governance in Nigeria

There are a number of factors affecting the promotion of good governance in Nigeria, they include but are not limited to: Corruption; Lack of accountability; Ethnic and Tribal sentiments; Leadership and high cost of governance; Weak social justice system;

That there is inordinate delay in the administration of justice in Nigeria is a pedestrian statement. What is however difficult to understand is how Nigerians have been able to live with this phenomenon for several decades without proffering a lasting solution. Very often, we see ordinary cases of unlawful termination of employment or even those for the enforcement of fundamental rights lasting between three to five years or even more (OKOGBULE, 2013). The court system is Nigeria is archaic and very slow, old filing systems and court procedures have failed to open up provide a fast and efficient social justice system. Prisons are filled with inmates who are awaiting trial or bail hearings, however it seems they have been forgotten, some for close to 10 years without legal representation provided by the state. Delays in the court process has over the years led to a loss of public confidence in the judiciary, only people with the economic and financial means can afford to pay for the services of a lawyer, while the others are left to wallow in self-pity, the social justice administration in Nigeria does not provide solace for the common Nigerian.

The right to effective and speedy trial is enshrined in the constitution as a fundamental human right. Article 36 (paragraph 1) of the 1999 Constitution which provides that: “In the determination of his civil rights and obligations, including any question or determination by or against any government or authority, a person shall be entitled to a fair hearing within a reasonable time by a court or other tribunal established by law and constituted in such manner as to secure its independence and impartiality”. 

However, the law does not specify what a reasonable time means, the Supreme Court in the case of Gozie Okeke v. The State (2003) 15 NWLR pt. 842 p. 25 in its judgment stated that “the word “reasonable” in its ordinary meaning means moderate, tolerable or not excessive. What is reasonable in relation to the question whether an accused has a fair trial within a reasonable time depends on the circumstances of each particular case, including the place or country where the trial took place, the resources and infrastructures available to the appropriate organs in the country”. As the court and prison system is underfunded, under-manned and over populated, without adequate facilities, it is safe to say that one may be trapped in a Nigerian centre for many months.

In order for Nigeria to reach its true potential, the current Government must introduce codes and policies meant to strengthen corporate governance in the public sector.

Adedunmade Onibokun is the Managing Partner of Adedunmade Onibokun and Co, a firm of Barristers and Solicitors in Lagos, Nigeria.  

 

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