Competitive Pricing of Energy Services in New York State: Current Trends and Issues


Original Research Article  Published in The Electricity Journal, Volume 8, Issue 1, January–February 1995, Pages 41-53 by Tom U.U. Okure, Ph.D 


Abstract

New York's electric utilities sit on the high side of an awesome price gap, as compared with utilities in other regions. Since New York State and local governments share with the utilities themselves some responsibility for today's high electric rates, a solution will not be found in one sweeping action, but in many small ones.

Celebrating Progress While Remembering the Past: An Empirical Analysis of the Economic Transformation of Akwa Ibom State of Nigeria.

CELEBRATING PROGRESS WHILE REFLECTING ON THE PAST: 
AN EMPIRICAL ANALYSIS OF THE ECONOMIC 
TRANSFORMATION OF AKWA IBOM STATE OF NIGERIA

By Tom U. U. Okure, PhD[1]

CONTEXT AND BACKGROUND

Akwa Ibom State Showing 31 Local Government Areas

On September 23, 2012 Akwa Ibom State (AKS) commemorated the 25th anniversary of the creation of the state by hosting a silver jubilee celebration. Commonly referred to as the “land of promise” the state was established on  September 23, 1987, by the former military government of General Ibrahim Babangida by combining the Uyo, Ikot Ekpene, Eket and Abak divisions of the old Calabar province. The state is situated in Nigeria’s south-east region and is located between latitudes 4°321 and 5°331 in the north and longitudes 7°251 and 8°251 in the east. It is bordered on the east by Cross River State, on the west by Rivers State and Abia State and on the south by the Atlantic Ocean.

The population of the state was projected at 3.9 million in 2006 spread over 31 local government areas with Uyo as the state’s capital. The state is the 14th most populous state in the country and the third most populous in the South-south zone. Its major cities are Uyo, Eket, Ikot Ekpene, Abak, Ikot Abasi and Oron. Five ethnic groups dominate the state consisting of the Ibibio, Anang, Oron, Eket, and Mbo. The main languages spoken in the state are Ibobio, Annang Eket and Oron with English serving as the official language of the state. The 25^th anniversary of the state reflects a significant departure from the past. It is a significant milestone in the history of the various attempts to spur an economic development take off in this state.  Consequently it is an appropriate time not only to celebrate but to reflect and access the economic development efforts of the state.  According to a UNDP survey in 2010:

Akwa Ibom had the third highest poverty rate of 27.1 per cent in the

South-south zone after Cross River (31.9%) and Bayelsa (32.5%).

According to the NBS as at 2010, the state’s unemployment rate

was the second highest in the zone with 25.8 per cent, while Delta

State had the worst (27.2%). On a brighter note, Akwa Ibom leads

all states in the zone in the ease of Doing Business 2010 based on a

World Bank study with an overall ranking of 20th out 36 states and FCT[2]

Despite these dismal statistics, many wonderful things are happening in AKS as this paper will highlight which provide genuine reasons to celebrate for the people of AKS.

METHODOLOGY

In explaining the rapid systematic change taking place in the state, we proceed on the basis of the literature of functionalism in the political and social sciences and examine the manifest and latent functions associated with the rapid economic transformation taking placed in AKS. We also assume that economic development is a desired policy goal in AKS. Public policies including those associated with economic development have certain aims in view, but there are occasions when the objective consequences and in some cases, aims and consequences may actually diverge. For example the manifest economic function of constructing a modern four lane highway to accommodate increased traffic flow while functional towards accomplishing a development goal may have the latent (unintended) consequence of displacing families and disrupting hitherto traditional social systems. Manifest function is used here to mean “objective consequences” of an activity (policy) intended and recognized by participants (policy makers) in the system and contributing towards adjustment and adaptation of the system. Latent functions on the other hand are “unanticipated consequences” of an activity (policy) that were neither intended nor recognized[3]

This paper combines a descriptive and functional analytic framework to the subject of system transformation in AKS which falls under the general rubric of “interpretative social science” the major task here being to discover the intentions which actors (policy makers) have in doing whatever it is they are doing.[4] Of significance for our purpose here is explaining the underlying motivations of the current government in power by describing the assumptions behind the rigorous economic development policy actions with the hope of discovering the set of rules which govern the actions of state policy makers involved in this economic transformation.  Our purpose here is twofold—promoting a better understanding of the basis of the transformation that is taking place in AKS among students of the subject of economic development and providing a better awareness of how government policy when backed with deliberate action can immensely contribute towards fulfilling a defined set of functional requisites. We also hope to reveal latent functions which may lead to improvements in the state’s governmental system.[5] 

The basic unit of analysis of this paper is Akwa Ibom State Government (AKSG) economic development initiatives as a deliberate policy choice adopted by the current administration of Governor Godswill Akpabio.  For explanation purposes, deliberate happenings in economic development as we are witnessing in AKS are conceived as actions chosen by a policy maker, in this case, the presiding state governor supported and aided by a willing legislature in a democratic environment.  Together, state policy makers have decided to achieve what experts term “economic take off” by purposefully overcoming certain identified factors that have kept the state in the past constrained and underdeveloped.  The solution to economic underdevelopment is the fundamental categories in terms of which this paper perceives what is to be explained.

ECONOMIC DEVELOPMENT

The main thrust of the silver jubilee celebrations taking place in AKS on September 23, 2012 is the economic development progress happening in the state. But what exactly is meant by economic development?  In this paper we define economic development as the persistent, resolute measures undertaken by state policymakers that foster a higher living standard and economic wellbeing of a particular area.  Rapid development involves the working of a complex series of interlocking systems, of which economic component is an essential part. Economic development also relates to the quantitative and qualitative changes in an economy associated with such factors as development of human capital, critical infrastructure, regional competitiveness, environmental sustainability, social inclusion, health, safety, literacy, and other initiatives. Economic development should not be confused with economic growth. Whereas economic growth relates mainly to the productivity of markets and consequent increase in GDP; economic development lays emphasis on deliberate policy intervention by policy makers focused at elevating the economic and social well-being of a people.

ECONOMIC DEVELOPMENT OF AKWA IBOM STATE – WHAT IS DIFFERENT

Economic development has been taking place in AKS over a long period of time. Each previous administration has built upon the efforts of its predecessor by tackling the problems of underdevelopment by investing in housing, road construction, health care, telecommunication, education etc. Despite these efforts, AKS remained poor and backward when compared to other states. To illustrate the point, some progress was attained by the previous administration of Governor Victor Attah who was credited for putting together thoughtful plans and designs for infrastructure, human capital and tourism development which one can suppose laid the foundations for the future growth of the state.  Even so, Attah’s critics say he was ineffective because he had too many paper plans which never materialized into visible completed projects by the time he left office.  

At the conclusion of the Attah’s administration in 2007, his critics say the economic landscape of the state remained relatively unchanged with the state’s road network remaining grossly inadequate, with huge potholes which made many communities inaccessible and cut off from other parts of the state. Educational facilities were in an awful state of neglect and anyone traveling through the state could sometimes see students in schools being taught under trees and exposed to the elements. Many parents could not afford the fees charged in public schools for their children to attend school.  When Governor Godwill Akpabio took over in 2007, he constantly complained about the dismal state of affairs in the state. In interviews, he complained that innocent Akwa Ibom children are given out by their poor parents to serve as housemaids in Nigeria’s major cities such as Lagos, Port Harcourt and Abuja. The latent consequence was the inadvertent sentencing of a generation of children from AKS to a lifetime of servitude.

The situation was not better in other economic sectors of the state like health. Dilapidated and outdated physical structures were everywhere which lacked adequate manpower across all factions of health workers. The neglect of the public health system had manifest dysfunctional and latent consequences.  Manifestly, the state could not attract or even retain medical professionals. The latent (unintended) consequence of this situation was low morale among health workers and the consequent abandonment of the public health system in favor of private sector employment by medical professionals including doctors and nurses. AKS is among states within the Niger Delta region of Nigeria which benefits enormously from revenues from the federation account.  Even so, observers of the Niger Delta region argued that there was nothing economically substantial in terms of progress to justify the huge revenues inflows into the area.  This paper argues that the foundation for the manifest economic transformation that we are witnessing in AKS can be traced to this awful past state of economic affairs in the state and the need to do something by the new elected government of Godswill Akpabio in 2007. One can suppose that it was this reasoning to do something different and perhaps dramatically unusual from past administrations that motivated and galvanized the current administration of Akpabio into taking decisive policy action.  Armed with a nine point political agenda which catapulted him into office by popular vote despite severe political opposition[6] Governor Akpabio made a critical public policy choice in favor of economic transformation of AKS.   Governor Akpabio did not play politics with many important projects started by Attah’s administration. Instead he adopted continuity as a matter of public policy and set about executing and in some cases upgrading some of Attah's unfinished projects to completion. Examples include Ibom International Airport, Le’ Meridien Ibom Hotel and Golf Resort and the Ibom Power Plant.

The symbolism associated with the completion of these economically important projects from a policy point of view cannot be overstated. To illustrate, the commissioning of Ibom International Airport was both symbolic and strategically important for achieving important economic aims of the administration. Functionally, it immediately changed the image of the state as backward and inaccessible to that of a modern and prosperous state. It eased the air transportation and access problems that the state was facing and put the state in parity with other major commercial centers of repute in Nigeria. Suddenly, people and commercial concerns could visit and exit the state without going through other neighboring states. One might also note that the investment in the airport had the manifest beneficial consequence of increasing economic activity by paving the way to increased tourism in the state. A latent (unobvious) consequence of the completion of prior projects started by the Attah administration has been in the sense of accountability, good governance and best practices that Governor Akpabio has received in many commendations. Governor Akpabio has received many honors from many private groups and government institutions for exhibiting accountability and good governance principles in the economic development strides he has taken. His people-oriented projects are praised as exhibiting exemplary leadership skills by bringing government closer to the people.

The point to note is this, the many accelerated events (activities ) associated with the Akpabio administration did not just happen as a matter of normal governmental administration. These are choice economic events and the result of purposefulness of public policy. Governor Akpabio deliberately set about to change the pattern maintenance structure of governance in the state. Creating a modern economy requires investing in bold and capital intensive infrastructure to release and move the engines of development forward.  Today in AKS, there appears to be an unprecedented political consensus and willingness between the executive, the legislature and the judiciary, all energized with the singular purpose of  modernizing this hitherto poor state. Unlike any previous administration, this administration stands above the rest in terms of the scale of capital investments, the spread of the investments, the quality and standards inherent in the projects and the timeliness and effectiveness of executing the projects. The premise behind this rigorous effort is to create a better economic future for Akwa Ibom people. The people oriented projects are a deliberate policy choice with the manifest functional consequences of generating local employment and making government both visible and useful to the common man. It also generates good will and contentment among the masses as latent functional consequences for the political party in power. A frequent visitor to this state can feel the transformation taking place because of the many construction projects spread across the state. The roads the administration has constructed, the local health clinics, the schools that have been built and rehabilitated are regularly utilized by the people so they directly see and appreciate the workings of government in their lives. 

It is this deliberate government policy orientation towards transforming a hitherto backward state into a modern economic environment that is different and is drawing attention to Akwa Ibom State and to Godswill Akpabio as a model charismatic Nigerian leader and a can do administrator. The challenges before the administration are not easy, but the task of transformation is progressing and visible and provides a justifiable basis for celebration.  

BUDGETING FOR ECONOMIC DEVELOPMENT

This section briefly discusses the state budget. It is not an analysis of the budget process in terms of budget formulation, implementation or the adequacy of appropriations allocated to the economic or social sectors of the economy. The determination of AKSG to transform the state into a modern economy is reflected in the states consistent high appropriations to capital projects over the years to overcome the infrastructure deficit of the state.  Nasir El-Rufai in a recent article indicates that the AKS 2012 budget reveals a commitment to achieve real progress towards improving the living standards for its people. The 2012 budget is:

N407.8bn, as against the N419.78bn in 2011. Out of the 2012 figure,

N66.244bn (16.2%) is for recurrent expenditure while N341.5bn

(83.7%) is earmarked for capital expenditure. This indicates the

government’s commitment to achieving real development and

improving the living standards for its people. The budget would be

financed from federation account (N242bn), internally generated

revenues (N21.65bn), local and foreign loans (N65bn), grants (N2bn),

an opening balance of N21bn and N100 million from the ecological funds[7]

Rufai points out that the capital spending priorities of the 2012 budget reveal carefully thought out and focused expenditure. N38.1bn is set aside for creating state-owned industries reflecting that state’s policy objective of expanding its production base. This should have manifest future consequences on the state’s ability to generate internal revenues.  According to the government, its 2011 budget was predicted on the completion of all on going people oriented projects, generating  activities by continued provision of basic infrastructure (power  and transportation) and security. Developing human capital and enhancing services in education and health sectors with a view to improving the living standards of the people, and creating of more employment opportunities by establishing industries.  In 2010, the government budgeted N298.5billion. Of this amount, 16.9% was allocated for recurrent expenditure, while 83.1% is for capital projects.

The key point to note here is this.  The purposefulness of public policy action in favor of building economic and human physical infrastructure has dictated that over 70 percent of its budget over the last four years is devoted to capital expenditure; more than the minimum recommended by economic development experts as essential to attain a meaningful economic take off in an underdeveloped economic setting. As the pressure to do more to improve the living conditions of its citizen’s mount, it is noteworthy to point out that this administration is also striving to improve its internal tax collection effort. The 2012 budget is funded with N21.65bn of internally generated revenues. Progress in collecting taxes is reflected in the completion of construction of 13 new tax offices in various local governments last year.[8] Past administrations in the state may have inadvertently undermined the goal of efficient tax collections because of the situation of erroneously conceived wealth in the state due to the inflow of huge federally allocated revenues.

THE ROLE OF OIL AND REVENUE ALLOCATION

AKS is the largest oil producing state with most of the oil coming from off-shore oil fields accounting for enormous revenue to the federal government and other states in Nigeria since 1970.  AKS is one of the crude oil rich states in Nigeria, which through its enormous natural endowment in oil wells; the Nigerian federal government feeds off from and compensates through a 13 percent derivation fund for hosting its joint venture schemes with multi-national corporations such as Shell Petroleum Development Company of Nigeria (SPDC), ExxonMobil etc.

Through the process of federal revenue allocations, AKS is one of the principal beneficiaries of the huge inflow of oil revenues to Nigeria due to the sharp increases in the world prices for oil. The Federal Government of Nigeria admits that it earned a total of N5.561 trillion from oil and gas in 2011. In its revised 2011 to 2014 Revenue and Expenditure Framework document the Federal Government disclosed that after deducting the 13 percent derivation fund, the country was left with N4.838 trillion for distribution to the various levels of government by the Federal Account Allocation Committee, FAAC. Like most Nigerian states AKS is highly dependent of oil revenues and has succeeded to increase its budgetary resources since its creation without a corresponding need to increase its internal revenue collections efforts.  Oil revenues to AKS has increased significantly over the years as the number of oil wells credited to the benefit of the state has increased. Presently, the number of oil wells attributed to AKS is about 1500. The appearance of great state wealth is fueling the expectations of citizens regarding what the state government can do and should be doing.  Under the circumstance, AKS citizens have become unwilling as in the past to settle for mediocrity from their elected officials who make promises and do not or cannot deliver on their promises. 

Thanks to the huge inflow of oil revenues into the state’s treasury, the Akpabio administration unlike many of its counterparts is able to fulfill its promises of providing an ever increasing range of amenities and social services to its citizens. It is revenues from oil accruing to AKS from the federation account that is instrumental in the economic transformation that AKS is experiencing. Without the huge inflow of oil revenues it would be difficult to translate the deliberate policy choice of economic development into concrete development action.

EXAMPLES OF ACCOMPLISHMENTS

If economic development is a desired policy goal to be achieved in AKS, the yard stick of progress towards accomplishing that goal or put differently, accessing the accomplishments of the current administration towards that goal cannot fully be understood without asking a relevant political question -- are the people of Akwa Ibom State better off today than they were five years ago? In order to answer this question, we examined the public record in terms of observable achievements in several areas including road construction and maintenance; transportation, education, health services, tourism, etc

ROAD CONSTRUCTION AND MAINTENANCE

Any regular visitor to the state would notice the great difference in the state of roads in the state.  Road construction is fundamental to development and is not a new idea. It has been embarked upon by prior administrations in the state. What is new in road construction in AKS today is the design and quality of roads being built and the level of expenditure devoted to road construction and maintenance.  Weather by deliberate policy or by default, road construction and maintenance does not appear to have been a major priority of previous administrations. Existing roads were not built with the best designs or with the best materials to last. A road maintenance culture did not exist. Consequently, the poorly constructed roads in the first place could not last as they deteriorated rapidly with the onset of the rainy season.  Roads in major cities of the state like Ikot Ekpene, Abak, Oron etc were eye soars to look at and impassible in many instances.

These affected the flow of goods and services within and between communities as many were cut off from each other.  Large and deep pot holes in major highways caused numerous deadly accidents.  Over the last five years, the administration of Godswill Akpabio has devoted millions of naira in budgetary resources towards the building, repair, improvement and maintenance of the existing road network.  New roads have been constructed linking hitherto inaccessible rural communities with urban areas enabling the free flow of traffic and boosting economic activity in the state as a consequence.  Road projects in Akwa Ibom State are exemplary among Nigerian states. Progress is visible everywhere in the state with the construction of new roads, dualisation of major roads (even federal roads to accommodate increased traffic), rehabilitation of existing roads and bridges and building appropriate drainages to prevent road erosion.

Unlike prior administrations which relied on incompetent local contractors awarded political contracts to build roads; this administration has retained the services of reputable and proven construction companies in Nigeria such as Julius Berger, Setraco, Stemco, CCEE, ACE and Bass Engineering, etc to build roads.  The state’s landscape has considerably changed as a result of the massive road construction projects around the state.  According to the Governor Akpabio:

Contracts for road construction worth well over N80 billion have

been awarded to both foreign and local construction firms which

include: Ekim Itam – Ekom Iman road dualisation, Afaha Obong –

Ika – Etim Ekpo, cutting across 3 local government councils, and

Ikot-Ekpene – Abak road all at the cost of N43 billion. Etebi – Enwang

road, road network around the Union park, Ikot Ntan – Obiokpok –

Afaha-Offiong – Mbiokporo – Ikot-Edibon Section I and II, Eket

urban roads lots 1 – 5, Nung Udoe Itak – Okoita – Use Ikot Amama –

Ibiaku Ikot Esifia, Ikot Abasi urban roads, lots 1 – 5, Oron urban roads,

lots 1 – 3 and Ikot Ekpene urban roads. A total of about 180km, that cuts

across 20 local government councils at the cost of about 83 billion Naira[9]

The effort of the present government in eradicating pot holes in urban roads is especially

manifest in Uyo, Ikot Ekpene and Eket where previously unmotorable roads have been rehabilitated under a government conceived project refered to as “operation zero potholes.” The program has been very successful in improving the quality of life and the environment in Uyo, Ikot Ekpene and Eket. Good roads boost economic activity by ensuring the free flow of goods and services. Road construction provides local employment and business for local people including enhancing the landscape as manifest consequences.  But there have also been latent dysfunctional consequences associated with the road construction according to critics. Traditional family ties and rituals, historical buildings and monuments etc have been destroyed due to confiscation of family lands and displacement of families from their historical lands to accommodate dualisation of roads. The State government has paid compensation for displaced families affected by the construction of new roads. However, in many instances, the high marginal cost associated with building new homes coupled with high inflation associated with the cost of building materials has made it impossible for many displaced families to rebuild. Consequently many generations of previous home owners are now renters as they are unable to rebuild their homes.

TRANSPORTATION: The most visible progressive achievement in the transportation area is manifest in the completion of the Ibom International airport started by the Attah administration which has eased air transportation into the state. Earlier we noted that the airport completion served an important symbolic function by improving the image of the state and making it a modern mature state. Effort to improve transportation in the states urban centers is also evident in the successful implementation of the taxi scheme in Uyo which initially started out with 400 taxis.  There is also evidence of progress regarding road safety especially in the capital city of Uyo where one can see solar powered traffic lights and the installation of reflectors on some major roads and road markings is evident in most of the major streets in the capital city and in some major towns in the state.

EDUCATION: The Akpabio admiration has also taken a bold step by making education of its indigenes a priority. An effort to totally reorganize the educational system has been taking shape in recognition that this sector is the main determinant of the collective future of its citizens.  Increased budgetary resources are channeled towards increasing the pool of quality elementary and secondary school teachers and expanding the education infrastructure in the state.  Accomplishment in the educational sector is evident in the government’s introduction of free and compulsory education for primary and secondary schools and the building of a modern digital library in Uyo. Other areas of progress include the effort at accreditation of courses at some states higher institutions, the granting of numerous scholarships to students to study abroad and the successful renovation of at least one primary school and one secondary school in every local government around the state.  The rehabilitation of primary and secondary schools around the state is generating goodwill for government among the people and boosting the morale of teachers as latent functional consequences. Priority in education is also reflected in the administrations devotion to making Akwa Ibom state University of Technology a credible educational institution. The management team of the school is working towards obtaining the approvals needed from the National Universities Commission (NUC) to commence full operations. 

HEALTH: Visible progress can be noticed in the provision of health services both from a qualitative and quantitative manner. This effort is manifest in the establishment of new physical structures such as health clinics and in the motivation of health personnel.  In this regard the Akpabio administration states that it has constructed five new general hospitals and construction of a specialist hospital of international standard is progressing. The government is constructing four new additional cottage hospitals this year in order to increase access to health care.

TOURISM: AKS is also rapidly becoming a preferred destination in Nigeria for holding official retreats and conferences. The state is encouraging tourism deliberately through advertisements and the building of new modern facilities such as a modern cinema theater and a new hotel and entertainment complex referred to as the Tropicana Entertainment Center supposed to complement the Le’ Meridien Ibom Hotel and Golf Resort.  According to the present administration, on completion, the Tropicana Center will include a modern entertainment center, a 5-star hotel with 350 rooms, and a museum to showcase the cultural heritage of the people.  When compared to other states, AKS also enjoys relative peace which is attractive to outsiders from the state seeking to have a vacation.  Peace and stability are latent essential ingredients for rapid economic development because it affords a framework within which individual change agents can operate in confidence, knowing that the society will continue to function within well-understood guidelines, despite its continual re-adjustment to meet changing conditions. Conferences and tourism in general bring outsiders to the state who spend their money through shopping activities which help to bolster the local economies of the state.  The state has also hosted beauty pageants and amateur and national golf competitions. Visitors who come and enjoy the facilities are impressed at the rapid and bold steps of the present administration. 

OTHER ACHIEVEMENTS AND ANALYTIC OBSERVATIONS

Some of the other projects embarked upon by this administration that is worth calling attention to include construction of an international stadium and the construction of flyovers in Uyo to ease traffic congestion. The state has also constructed 1,000 3-bedroom flats, completed a modern state banquet hall that can accommodate 500 guests, completed a new federal prison in Ikot Ekpene  etc. All the 329 wards of the state have benefited in the people oriented projects of this administration which is carried out through what is termed “the inter-ministerial direct labor committee.”

The impact of the huge investments that is being carried on by the present administration may not be immediately obvious for the citizenry of the state. Nevertheless, most developmental experts and studies by the World Bank indicate huge investments in better education, healthcare, transportation and job training for young people are essential to produce surging economic growth and sharply reduced poverty.

Many previous governors have had big dreams for the state and started many symbolic projects in anticipation of obtaining increases in oil derivation revenue that accrues to the state. The present administration has been blessed in that its big dreams have been supported by a steady inflow of revenue from the federal account. What we are witnessing in AKS does not appear to be another false economic dawn for the people of the area, in which the key to development was seen by previous administrations to essentially consist of flashes of mismanaged and abandoned projects after enormous budgetary resources had been expended to incompetent local contractors who could not deliver on the projects. As noted earlier, despite the noble intention of the previous Attah administration, so much effort was expended on feasibility studies of planned projects which were not effectively executed.  Much still remains to be done in terms of eradicating certain specific pathologies - such as the pervasive influence of corruption - which hinder rapid economic development by creating their own, self-contained systems, which actively work against constructive change.

CONCLUSION

We have argued throughout this paper that there has always been some rudimentary level of economic development in this state. What is different now is the focused attention by policy makers to ramp up progress in the state. To that extent, Governor Akpabio’s administration stands above any previous administration. What many term as “uncommon transformation” is explained as deliberate public policy actions undertaken as a matter of deliberate choice by a farsighted Governor Akpabio determined to fulfill his election promises by uplifting the economic and social well-being of his people. 

If there is a lesson to be learnt from the past development efforts in AKS, it is that policy choices adopted by policy makers do matter and can functionally or dysfunctionally impact the attainment of economic development objectives. The empirical evidence appears to suggest that the hitherto underdevelopment of AKS can perhaps be traced to the inadvertent neglect by previous administrations and their political shortsightedness regarding the ways and means of spurring an economic take off.  Evidence abound that there was malfunction or weakness within the individual parts of the overall state developing system which naturally stunted economic development. The key to understanding the rapid transformation taking place lies in understanding the purposefulness of public policy implementation and what it can accomplish. This is the magic of the Akpabio administration – its purposefulness of public policy which has put AKS finally in the right track towards economic take off towards the industrialization of the state.

Finally, care must be taken to ensure that the transformational progress achieved so far is continued; perhaps by institutionalizing the policy choices favored by this administration into state law to ensure that future administrations will not alter the present course of progress towards achieving a modern industrial economy. 

---

[1] Dr. Tom Okure is President and CEO of Inter-Continental Management Systems, Inc (or ICMS, Inc) a multifaceted business and management consulting firm with its head office in Albany, New York.  Dr. Okure is also a Principal Budget Analyst with the New York State Legislature, Assembly Ways and Means Committee. This article reflects only the views of the author.  All rights reserved by ICMS, Inc. The information included in this publication may not be used, reproduced, transmitted, rewritten or redistributed without the prior written permission of Dr. Tom Okure.

[2] See Article by Nasir Ahmad el-Rufai entitled  “Akwa Ibom`s Budget of Infrastructural Development” posted in ThisdayLive.Com , July 6, 2012.  

[3] See Robert K Merton, Manifest and Latent Functions,” in Social Structure (Glencoe: The Free Press, 1957), p. 51

[4] Brain Fay, Social Theory and Political Practice. 

(London: George Allen and Unwin Ltd, 1975), p. 73

[5] A feature of functionalist accounts is to view societies as made up of component parts whose interrelation contributes to the maintenance of the whole (pattern maintenance), and to focus on the problem of order specifying forces that bring cohesion, integration, and equilibrium to society.

[6] See Godswill Akpabio’s – Official Website under Mandate: “Nine-Point Agenda of My Vision for a Greater Akwa Ibom State” in GodswillAkpabio.com  According to the Governor’s website, the “nine point agenda is a governance optimization model through critical handles of people, process and technology. It is a method of placing a human face in governance and re-engineering governance to satisfy critical needs of the people today while reducing pressure on governance in the future by laying a solid foundation. The model adapts best in class policies for sustainable development, resource utilization, and accountability.”

[7] See Nasir El-Rufai’s article “Akwa Ibom’s Budget of Infrastructural Development” posted in ThisdayLive.com, July 6, 2012.

[8] Ibid

[9] See Godwill Akpabio, "Godswill Akpabio’s Achievement: Road Projects for Akwa Ibom State" in Godswillakpabio.com  

ICMS, Inc - Now You Know: Inter-Continental Management Systems, Inc., (or ICMS,Inc)

ICMS, Inc - Now You Know: Inter-Continental Management Systems, Inc., (or ICMS,Inc)

The Use of Networking and Internet Social Resources as Effective Job Hunting Tools

For the active job hunter who is out of work or is trying to grow his or her career, networking is a key aspect to any successful job search effort in today’s volatile job market. There is nothing more important than getting an inside track on a job. Any career coach will tell you that this can best be achieved by leveraging ones existing professional and social networks. This is especially important because in today’s job market, referrals account for more than half of all job hiring.

The proliferation of social net working sites such as Tweeter, Facebook, LinkedIn etc has increased opportunities to network significantly and it is an important tool that the job seek must utilize effectively if he or she is to be successful in his or her job search effort. These networking resources are great for linking up with potential employers especially with those who are responsible for making hiring decisions. Theses online tools can also be used to interact with friends and friends of friends who can refer the job seeker to a person who is in a position to hire.

For any one who is serious about getting a job, the notion of networking translates to reaching out to all the people you know or have known that you believe can be of valuable assistance to you in referring you to a potential employer. It means getting off your high horse and reaching out to people you may not have communicated with for several years in order to reconnect. Using social networking resources like Tweeter, Face book etc, you can discover and reconnect with former professors, roommates in college, friends in high school, parents of child hood friends, uncles, aunts, nieces, cousins, nephews, neighbors in your former neighborhoods, former church members, former co workers, past employers etc. The key point to note here is that any effective job search requires that you seek out anybody who might be of help in referring you to someone who can make a valuable introduction to a potential employer.

In networking with people you want to help refer you to a potential employer, it is very important to highlight your worth or value to the potential employer. What this means is that you the job seeker must be able to justify to the individual making the hiring decision that by hiring you the firm is most likely going to gain in terms of enhanced value equivalent to two, three, or even ten times the salary and benefits that the firm is going to be paying you. You should effectively communicate your value to a potential employer by highlighting the unique attributes that you bring to the firm. These may include convincing the employer that hiring you with the talents you have would help boost the firms bottom line in such areas as increase sales, overhead cost reductions, enhanced customer loyalty etc. If you succeed in your networking efforts to get a referral to an interview, you need to effectively utilize the opportunity to expatiate to those interviewing you how you add value and explain what unique qualities you bring to the job and what separates you apart from the other candidates for the job. You must demonstrate to the person or persons making the hiring decision that your assertions in your resume are true, with evidence of your prior achievements in the industry or job area and provide valid references that will help to support your claims of accomplishment.

In conclusion, if you are actively job hunting or trying to grow your existing career, it is important that you not overlook the benefits of employing social media as a tool to access job listings and to link up with people who can assist you to find or grow your career.

By Dr. Tom Okure
President of  ICMS, Inc 
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The Ex-Governor James Ibori Case Reveals a Structural Weakness in the State System of Governmental Checks and Balances in Nigeria.

Ex-Delta State Governor James Ibori

According to a BBC Africa News report, James Ibori, a former governor of one of Nigeria's oil-producing states, has pleaded guilty in a UK court to 10 counts of money-laundering and conspiracy to defraud. The British police accuse him of stealing $250m (£160m) over eight years.[1] The prosecutor called him a “thief in government house".

Weak State Unicameral Legislatures with Inadequate Checks and Balances in Place.

Ex-Delta State Governor James Ibori is not the first nor will he be the last to be accused of theft of huge public funds meant to be used to pay for services and expenses related to state government operations in Nigeria. But why is this situation so prevalent in Nigeria?

The answer to this question can be partially found in the structure of the state system of government, with a very powerful Executive and a weak Legislative and Judicial arm.  The Legislature is especially weak at the State and Local Government level in Nigeria. This may be in part due to the fact that it is unicameral as opposed to bicameral in nature.  In a bicameral legislature there are two houses in place -- the House of Representatives (or Assembly) and the Senate. In a unicameral Legislature there is only one House of Representative.  The unicameral legislature has a tendency to be weak especially when it is dominated by one party and the Executive (Governor) is also from the same party. In this circumstance, most legislation and resolutions introduced by the Executive simply sail through without much opposition. The inherent and difficult challenges that an Executive would typically face, for example,  in trying to pass a state budget or get legislation approved is lacking in the unicameral legislature. This is because in a state unicameral legislature, there are insufficient checks and balances from the opposition. Under these circumstances, an Executive could seek and obtain approval for a dubious budget without stringent budgetary scrutiny and legislative spending oversight.

Legislative Power of the Purse

The point this author wants to call attention to is that in any democratically run constitutional order, the “power of the purse” should lie with the Legislature not the Executive. In a democratic constitutional order which Nigeria purports to operate, no money can be drawn from the state treasury without proper funding appropriations, that is, spending authorizations from the Legislature. This fundamental empowerment of the Legislature with the power of the purse is at the foundation of any real effective constitutional order.

As a scholar, the James Ibori case reveals a great weakness in Nigeria’s state government organizational structure. There is a significant lack or weakness in the state governments system of checks and balances between the three arms of government -- Executive, Legislature and Judiciary. The James Ibori situation could never happen in the Unites States or most western countries because the Governor (Executive) would never be able to lay hands on such huge amount of State monies (funds) without proper accountability to a bicameral legislature. The Governor or Executive only spends what is approved for him/her in the state budget as enacted by the legislature. Any discretionary spending (Add ons) must also be authorized by the legislature.

The Ibori saga of theft of public funds indicates that Nigerian State Legislatures are weak in performing their budgetary and legislative oversight function. How does one explain and account for the huge amount of the people’s money that many Nigerian state governors get from their legislature and spend and give away freely as if it is their own money without budgetary oversight from the legislature and completely in many instances outside the confines of their approved state budgets?

Conclusion

In conclusion, Nigerian state legislatures must do more to assert their authority as it relates to the “power of the purse” vis a vis the Executive. Also Nigerian State Legislatures must also insist on exerting their legislative oversight function and prerogative over Executive spending of state funds. State Governors can only spend what is enacted in their state approved budgets and any unspent budgetary funds must be accounted for and reauthorized annually by reappropriations from the state legislature. The lesson in the Ibori case is simple, it shows that one man was able, by default or neglect of the legislative arm of state government to effectively perform its oversight function, to lay hands on huge amounts of unmonitored public funds. Having control over the state purse, he unilaterally was able to freely spend and siphon state budgetary resources into his personal accounts overseas for his personal use and self-enrichment.

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[1] For details see BBC Africa News report dated 27 February 2012  titled “Nigeria ex-Delta state governor James Ibori guilty plea"  http://www.bbc.co.uk/news/world-africa-17181056 

Small Businesses and the Impact of Rising Oil Prices

As oil prices rise sharply, so are the prices of everything that we consume and depend on including the price of basic food products in grocery stores, the price of gasoline to fuel our automobiles, the price of travel tickets for airlines and bus fares, the price of eating out in restaurants etc. The price of crude oil has increased more than 20 percent since the beginning of 2011, rising from about $90 per barrel of Brent crude, the benchmark for the industry to over $110. We have not witnessed such a significant increase in crude oil prices since the fall of 2008 when steep oil prices coupled with the collapse of the stock market resulted in the world economic recession that we are yet to recover from.

There is genuine fear today that the civil unrest we are witnessing in the Middle East may persist and we could witness a sustained disruption in the world's oil supply. Every slight price increase in the cost of fuel at the gas station, translates into a reduction of billions of consumer spending power in the economy which in turn reduces the ability of consumers to spend money in their favorite community’s places such as restaurants, grocery stores, liquor stores, craft shops etc. Monies siphoned away from consumers at the gas pump end up instead with large transnational oil companies and their oil producing host country partners, thereby reducing economic activity in our local communities.

Given that roughly two-thirds of economic activity in our communities is triggered by consumer spending, the recent spike in the price of crude oil is becoming a major concern to small business owners. Consumer surveys suggest a direct correlation between consumer low confidence and reluctance to spend and the sharp increase in fuel/oil prices. Many small business owners are becoming increasingly concerned as the price of crude oil goes up because it is affecting their businesses adversely by reducing their purchasing power for their inputs for production and their financial bottom line. Small businesses, which the government says are the engine of growth in the economy because the generate over 70 percent of the nation's jobs, have been especially affected adversely because each penny in rising oil prices translates into higher transportation fuel surcharge costs for their businesses.

Small business owners have no choice but to absorb the rising cost of oil through sharp increases in fuel surcharges from transportation companies they depend on to deliver their products. Utility companies are also adding fuel surcharges to their electric bills. Small service businesses like taxi companies, plumbing and electrical companies, carpet-cleaning companies etc has witnessed their cost of fueling their cars and service trucks go up sharply since the civil protests in the Middle East began. The cost of doing business is going up for these small businesses as gasoline powers the trucks and cars the utilize daily to service customer transportation needs, customer plumbing needs, carpets and upholstery cleaning needs, fast food deliver needs etc. In many small businesses, the largest expense after payroll is typically transportation related costs.

Many business owners are trying not to pass the higher fuel cost onto customers, but not doing so is cutting sharply into their business profits and bottom line. Even businesses such as restaurants, fast food outlets, sports bars that don't utilize their personal transportation are feeling the pinch of higher oil prices. Their business owners are seeing the prices of all the goods the obtain from their vendors rise sharply with the rising price of oil. The vicious cycle of manufacturers and wholesalers trying to make their money back some way means that they pass their rising cost to the small business owner who in turn either absorbs the cost or passes it on to the ultimate consumer.

Small businesses and retailers of electronics goods derived from factories in East Asia may also witness a slow down in demand and an increase in their inventories if oil becomes more expensive as the cost of transporting consumer electronics from factories in Asia and the cost of the raw materials employed in producing the electronic gadgets rise. As the cost of shipping electronic goods from the Far East to the United State rise, retailers of electronic products are likely to raise prices on cell phones, laptops, television sets etc, discouraging consumers, already feeling the impact of the ongoing recession, from purchasing or upgrading their electronic gadgets.

Consumers protest higher prices of goods they consume simply by not parting with their money and cutting back on consumption. When consumers cut back on consuming various products sold by small businesses, economic activity slows down in our communities. Rising fuel prices are impacting on the way small business owners are doing business. Those small business owners who are able to successfully devise strategies to cut other costs to compensate for rising fuel and transportation costs will survive with reduced sales and profits and seeing their operating costs rise. Others may be forced to cut back on expansion plans or delay hiring new employees or may even be forced to close down their operations if the price of oil continues to rise and the upheaval in the Middle East is not resolved in the near future.

Lowest Gas Prices in Albany

Albany Gas Prices provided by GasBuddy.com

The Essence of Gradualism in Policy Formulation in Nigeria: Reflections on the Manifest and Latent Consequences of the Sudden Removal of Fuel Subsidy.

The Essence of Gradualism in Government Policy Implementation.

Protect Over Fuel Subsidy Removal in Nigeria

Policy implementation in developed and democratically governed countries generally presumes that stated government policy objectives are implemented gradually. Gradualism is a policy and administrative concept and one of the defining elements of political liberalism and reformism. The concept of graduallism is rooted in the belief that government policy changes ought to be implemented in small, discrete increments rather than in abrupt strokes. In a democratic political environment, government policy is never implemented drastically by the type of shock treatment that Nigerians are witnessing with the recent removal of fuel subsidy by the federal government without adequate political dialogue on the subject.

Most experts would agree and in this particular circumstance are very sympathetic to what the Nigerian federal government is trying to achieve by ending the fuel subsidy. It is a well known and documented fact that fuel subsidy by the federal government which has been ongoing for a long time has imposed a very heavy fiscal burden on the nations resources. According to Nigeria’s finance minister, Ngozi Okonjo-Iweala, the federal government has expended an estimated N3.7 trillion on fuel subsidy from 2006 through 2011. This is an enormous amount of money which could have been spent on more priority development needs. President Goodluck Jonathan rightly asserts that the subsidy was economically unsustainable and had to be terminated. It is also an acknowledged fact that there are many manifest consequences that will accrue to the Nigerian economy by the removal of the subsidy.

Consequences of Drastic Fuel Subsidy Policy Implementation

The government states that the removal of fuel subsidy will result in increased available financial resources from savings that will accrue for investments in other sectors of the economy like power, education, and health and the building and repair of our road infrastructure. The removal of the fuel subsidy it is also alleged, will reduce smuggling activities from our economy to neighboring countries etc. Nevertheless, in seeking these noble policy objectives, was it absolutely necessary to take such drastic measures to achieve these beneficial consequences? These stated facts and concerns about fuel subsidy as a government policy are not new and definitely need to be addressed. What is surprising to many experts is the sudden urgency and the drastic approach adopted by Nigerian government. Government actions suggest a hasty approach without an exhaustive policy analysis of the issue and as many critics contend, the actions mirror an apparent insensitivity of our policy makers to the negative latent consequences of failing to employ gradualism in this particular circumstance. Did our policy makers not anticipate that a drastic approach to curing the ills of fuel subsidy will result in great political and economic turmoil for the country which could threaten the viability of the economy with significant negative consequences? The general strike called for by the labor unions over the elimination of the fuel subsidy will have devastating consequences if economic activity is brought to a standstill. If the strike continues, shops, offices, schools and petrol stations around the country will remain close for a long period of time causing serious problems to the economy. There is also a latent political consequence associated with the government’s fuel subsidy removal policy shock treatment. There is a growing perception that our policy makers or the political elites of our society are not concerned about the welfare of the general citizenry but are only concerned about their welfare.

 

Fuel Subsidy Protesters in FCT Abuja

The public protects over the drastic manner in which the fuel subsidy was removed is gaining momentum and is not needed in a political climate already besieged with mass dissatisfaction, unemployment and religious and ethnic tensions. Drastic policy implementations are undemocratic and are associated with dictatorships and are inconsistent with democratic principles. As noted above, the concept of gradualism as a policy is essential in this circumstance. It is a defining element of political liberalism and reformism which one may suppose this current adminstration is striving to achieve. The current policy stance adopted by the government is actively being challenged and opposed by the majority of Nigerians at home and abroad. It reveals a lack of good policy judgment and a proper understanding of policy implementation in a democratic setting.
What Needs to be Done

The prudent thing that the federal government should have done and ought to try to do now that it is faced with this policy crisis is to tactically and strategically back off its current policy stance and then try to gradually phase out the subsidy over a period of time while maintaining an ongoing national dialogue on the issue. That is how difficult policies are implemented in most western industrial nations.

The federal government should start earnest negotiations with the labor unions and the national assembly (legislature) should be actively involved in finding an amicable and lasting solution to the issue of fuel pricing and prices in the country. Most experts would agree that it may be difficult for the government to back down, but under the present circumstance, it is imperative that our policy makers understand that it is needed and indeed necessary at this juncture.

Conclusion

I conclude by noting that this is a defining moment for President Goodluck Jonathan and the federal government’s reform agenda. The publics trust and faith in the government’s public pronouncements on reform and transparency must be preserved. To that extent, it is vitally important that the administration handle the situation of public protest over the removal of fuel subsidy very cautiously so that it does not destroy whatever modicum of public’s trust that may still remain in favor of the government’s reform agenda.

By Tom Okure, Ph.D

Author and Public Policy Commentator,

President/CEO

Inter-Continental Management Systems, Inc

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