Deregulate the Federal Government

Deregulate the Federal Government

Recently, there have been consistent radio adverts urging Nigerians to accept deregulation as the magic wand invented by our team of expert economists for solving our national problems. Deregulation simply means non-direct involvement of government in the deregulated sectors. It could also be called privatization.

It might help to recall that privatization has been around for some time now. Towards the end of the Obasanjo administration in 2007, a lot of our national assets and “liabilities” were privatized. Notable among them were the oil refineries. There was controversy and rumour that the  federal government colleges alias “unity schools” were also to be privatized. The reason was that private operators are more efficient in running these companies adn can check corruption more easily. Following the outcry, the Yar’Adua administration reversed the “sale” of some of the corporations and from the probes that followed, we learnt that “due process” had not actually been followed. The privatization “thing” rested a while. But the Goodluck Jonathan “transformation agenda” transformed it to deregulation.

Nigerians woke up on the wrong side of the bed on New Year day, not only because Boko Haram had destroyed the spirit of the season, but also because the federal government had removed the fuel subsidy. Two excellent “reasons” were “given” for this. One was that the excess funds “saved” from the subsidy could be “ploughed back” into other “productive” aspects of the economy to create jobs and develop public infrastructure. The second reason that the corruption in the subsidy rigmarole made it more beneficiary to oil traders alias “cartels, than the ordinary people.

Opponents of the second argument said another way to let the subsidy die a natural death was to make local refineries work at full capacity. The government argued that it could not run the refineries because the process was is expensive and liable to corruption. Now the subsidy debate has “ended” or at least, gone the Nigerian way. But I have an issue with the federal government’s confession that it could not run the refineries. Not that it was new knowledge, but it is  a reality that transcends every aspect of Nigerian life. The “inability” of the federal government to “run” anything is evident in our daily lives. The federal government is not only “unable” to “run” the oil refineries; it is also unable to run quality schools, good roads, hospitals or stable power. There could be many reasons for this inefficiency. One is corruption, the virus that paralyzes the hands and feet of government. Two is the lazy and unserious attitude towards “government thing” that both our leaders and we, have developed over the years. The must culpable reason however, is the over-politicization of the process of governance. Political appointments have to be made to “stakeholders” or “party elders”. Serious cases of indiscipline are treated as “family affairs” and so the system continues with “business as usual.” Meanwhile, the attainment of leadership is not by merit or popular vote, but by a “sharing formula” called “zoning” where old school politicians are lined up, waiting patiently for their “turn”, while others have jumped the queue and have made the nation “ungovernable” for themselves as a result.

There is abundant evidence that running the federal government is the most expensive and unprofitable business ever embarked upon by the people of Nigeria. From the executive to the legislature, huge sums of money are “invested” that neither return any profit, nor are themselves recovered. For instance, this year, the President alone would feed himself with one billion naira! Of course, the Vice President , the Senate President and Speaker or the House of Reps as well as their colleagues would also “feed” themselves. This is in addition to all kinds of “allowances” and “entitlements” that accrue to them. With this quantum of “investment”, are Nigerians not justified in asking for “dividends” on their share units? Yet everyday, we shout “NEPA” many times as a result of interruptions in the supply of power. We cannot “get” admission into schools and our graduates cannot “find work” to do.

Now that the “transformation agenda” is deregulation, why don’t we deregulate the federal government? A feat like this has many advantages. First, it will drastically cut the cost of governance since private operators cannot condone absentee “Honorables” or Senators who spend time attending to their private businesses and yet “cut” the greates chunk of the “national cake”. Second, it will trim down the over-staffed executive and legislative branches and “free” more “resources” for national development. Third, it will promote merit against mediocrity and help retire some of our “elder statesmen” who remain “kampe” many years after they have “left” power. A private operator like Aliko Dangote, with his team of partners who have a history of extreme profitability will certainly turn round the fortunes of this liability called federal government.

Finally, “deregulation is embraced by many countries of the world, and Nigeria cannot operate in isolation.” So let us deregulate the federal government.

19 thoughts on “Deregulate the Federal Government” by Anzaa Msonter (@sontel)

  1. I wish!..To deregulate the FG would make absolute sense going by what’s in this piece..But who would implement it?..hehe…Well done..$ß

    1. @sibbylwhyte. I was just thinking aloud. I have a problem with the way everything turns fanatical in Nigeria. Today, government is using deregulation to excuse its inefficiencies. You wake up and a group of people hijack the oil sector. You don’t prosecute them or “deal” with them in another way. You simply deregulate the sector. At this rate, we might have to deregulate the Security sector because the government cannot “run” security. If it could, Boko Haram would cease to terrorize the nation.

      Now, the entire federal government is too bulky and too complex to be “run”, so I though we should extend the deregulation magic to it. Don’t you think it would work?

  2. It would work, if only we are absolutely sure that those that would then be the enforcers of the deregulation would do the job well and not still give in to corrupt tendencies…

    Deregulation of Security…that would be the day!..Lol…If a private company can take over the police in a state, I think, things would run better sha..

    Back to the privatization gist, Do you think the privatisation thingy really helped?..Let’s take NEPA/PHCN for instance…Did PHCN improve on the standard of NEPA?..In my area, they didn’t o.

    One question though…Whatever happened to the ‘Cutting of Ministerial posts’..something along those lines..Or was it a rumour when I heard that some ministries would get merged, Thereby taking away some extra cash from allowances made to them and putting it towards infrastructure and all?..

    1. My idea @sibbylwhyte, is this: constitute a Council of Citizens. Let them assess how much the Federal Government is worth. Put a price on it and let those who can afford it, apply. Privatise the thing and buy shares in it for every citizen. Let Aliko Dangote or anyone run it and pay dividends at the end of the year. You must agree that as it is today, no Nigerian gets dividends for our “investment” in the federal government.

      1. No destabilizing arguments about whose “turn” it is to be president.
      2. No N84 billion for elections.
      3. No 7 corps members dying in Bauchi.
      4. No sitting allowances, standing allowances, newspaper allowances, girlfriend/boyfriend allowances, shitting allowances, resting allowances etc for any one.

      Any way, I’m just thinking. It is actually not possible or even advisable to deregulate the FG. I just want to make a point that deregulation is not a blind solution to every situation where things do not work. We have to look elsewhere sometimes.

      1. Interesting idea, @Sontel.

        You might be able to privatise the government – this sounds like what you are advocating when you talk about a private operator running things – but you can’t really deregulate it. You can only really talk about deregulating a sector that is regulated, and I don’t think that the government is regulated (it actually does the regulation itself).

        In any case, privatising the government creates serious conflicts of interest for the persons who will now be running affairs. What is the incentive for them to deliver a quality service if they are no longer accountable (i.e. they cannot be voted out)?

        1. @TolaO. You have a very critical and yet true point. I wrote this piece with the assumption that we still have some level of regulation over the government and might be able to “deregulate” it. But I agree with you completely that we cannot deregulate it because we actually are not regulating it. The government regulates itself.

          I however disagree that “privatising the government creates serious conflicts of interest for the persons who will now be running affairs. What is the incentive for them to deliver a quality service if they are no longer accountable (i.e. they cannot be voted out)?” There will be no need for the new owners to provide quality service or any service at all. If they provide any, the citizens would have to pay heavily for it. Wait a little. It doesn’t make any difference because even today, I don’t know what “service” the FG provides for anybody. In essence, the Federal Government will become a private property like Dangote Cement, and citizens would be shareholders who are entitled to dividends at the end of the year. They would have the right to acquire more shares or trade in those they already have. My argument is, if what we “spend” on government now is made to go round, it would serve us better.

          1. I’m still not clear what motivation there is to deliver a quality service.

            Let me be clearer here. In the normal private sector, a company is motivated to provide good services because of competition; if it doesn’t provide good services, customers will go elsewhere and it will go out of business. Even where there the company is monopoly, the customers can still choose not to patronise the company rather than pay for poor services.

            Now let’s consider when the government is privatised, and it provides public services in return for payments (i.e. taxes) from citizens. In this case, the government is a monopoly, but one big difference is that the customers do not have an option whether to pay or not to pay taxes. In this case, the government can choose to collect taxes but not to provide services, and there’s nothing the citizen/customers can do about it. In fact, since the privatised government wants to make as much money as possible, it will prefer to spend as little as possible in providing services, leading to very poor services. And since the customers/citizens cannot vote out the government, there’s nothing they can do about it.

            1. @TolaO. Please note the following:
              1. The privatised government will not need to provide any services if it does not want to. But even if it provides any services, the citizens would have to pay heavily for such, because it will be the interest of government to make profit. The citizen in this case is a shareholder, and his only entitlement in the government are the dividends he will get at the end of every business year. He will not have to pay taxes or make any other contribution to government. It will not make any difference because even as it is today, the government of Nigeria does not provide any services for the people. If you want electricity, you buy a generator; if you want security, you buy a dog; if you want to send your children to school, you build your school; if you want to travel, you set up your airline, and if you want to post a letter, you will have to build your post office.

              Now remember that you do these things on your own income. The oil money and other resources do not actually impact your life. When privatised, you would still have to provide these services yourself; but this time, you will do so with dividends you get from the profit your company (government) pays on your shares.

              2. The new government cannot be voted out. But the directors of the new company will be subject to all normal disciplinary measures adopted in everyday companies, to check their excesses and prevent corruption.

              1. OK, @Sontel. I understand better, now.

                So government will provide services on a ‘Pay As You Go’ basis.

                I can see that this might work with services like electricity and water provision, but how would it work for law and order?

                For example, someone defrauds me, and I want to sue him, but I have no money. What happens?

                Or even if I do have money, isn’t there the possibility that in a bid to maximise revenue, the government decides to award the case to the person who can pay more?

                Oh wait… that’s what we currently have now. :)

                Or how does the PAYG system work for public services where it is difficult to exclude people for not paying for their use, e.g. roads, defence, foreign affairs?

                1. You noted quite well that even today, justice is awarded to the highest bidder. So it will make no difference who runs the justice system.

                  Difficulty in paying as you go for services like roads? I think the other time, even though we are under our government, the federal government wanted to introduce toll gates on our roads; have you forgotten? And foreign affairs? I don’t think we would need that any longer, but if we do, there could be provision for the fees to be paid by the company (federal government).

              2. The other big thing to remember in this scenario is that the board members can call upon the police/army to do their bidding. This means that they can ignore whatever disciplinary measures are ordered against them. (Or maybe I’m wrong here; but you need to make clear who will order these disciplinary measures against the board members, and how they will be enforced, while solving the problem of who polices the police.

                1. We might have to dismantle the Police and the Army, and instead, affiliate with the World Bank or any other United Nations’ creation for the security and implementation of our disciplinary actions. This way, we wouldn’t even need to pay too much “salaries”.

  3. Well we are just ‘thinking’..Interesting thoughts they are…

  4. Those in favour say “aye”

    1. Aye. And the ayes have it!

  5. @Sontel, I think that the issue of public goods and the administration of justice needs to be thought out more. But it’s an interesting idea.

    1. Of course, as a realist, I would be the last person to accept an idea like this. First, its practicality is controversial and unsustainable. Second, it reduces national life to a business where it could be possible for one individual to gradually become the sole owner of government.

      The essence was just to think outside the box and and immagine how it would look like, if it were possible. I just wanted to mock the Nigerian government’s hypocritical and almost blind fanatical way of doing things. What is the essence of government if it cannot “run” anything and therefore chooses to privatise every public sector?

  6. lol! but the FG is already privatized, or didn’t you notice that’s it’s owned, controlled and limited by several corporations(cabals in short)…all we’d be doing is officially listing it on the NSE.

    1. My friend, you have a very critical eye like your avatar. The FG is already privatized. I agree. I also notice that it is run and controlled by several corporations. I think we should now list it on the NSE so that even ordinary citizens can buy some of its shares.

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