There are various definitions and dimensions of governance. Thus, as a point of departure, we need to define what governance is and then proceed to define good governance.
For the purpose of this address, I have adopted the World Bank definition which states that ‘’governance is the manner in which power is exercised in the management of a country’s economic and social resources for development’’.
Furthermore, as noted by the UNESCO, Governance can be used in several contexts, such as corporate governance, international governance, national governance and local governance. Our focus is on national governance because of the sheer economic dominance of the public sector and its much higher potential and propensity for corruption and abuse.
After reviewing most of the literature on the subject, I am persuaded that the UNESCO, UNDP, and World Bank-based principles provide the most authoritative and universal standards for defining the key elements of good governance.
According to the UNESCO, good governance has the following 8 major characteristics: Participation – as manifested in freedom of association and expression and representative democracy; Rule of Law - fair and impartial enforcement of laws; Transparency – Decision-making and implementation are done in keeping with clear rules and regulations and there is free flow of information to stakeholders; Responsiveness – serving stakeholders within a reasonable time frame; Consensus Orientation; Equity and Inclusiveness; Effectiveness and Efficiency and Accountability.
Similarly, the UNDP five principles of good governance establish the following norms:Legitimacy and Voice – encompassing participation and consensus-orientation; Direction - manifesting in strategic vision of the leadership; Performance – i.e. service to stakeholders in a cost-effective way; Accountability – decision-makers are accountable to the public and transparent in the discharge of their duties; Fairness – encompassing equity and the rule of law.
In addition to the UNESCO and UNDP Principles, we also have the World Bank’s World Governance Index (WGI) which consists of the following six indicators grouped under three categories of governance principles.
The process by which governments are selected, monitored and replaced: Voice and accountability; Political stability and absence of violence/terrorism; The capacity of the government to effectively formulate and implement sound policies: Government effectiveness; Regulatory quality; The respect of citizens and the state for the institutions that govern economic and social interaction among them: Rule of law and control of corruption.
The six WGI indicators encompass hundreds of variables compiled from numerous data sources, which reflect the views on governance of numerous survey participants, including the civil society, across the globe.
The UNESCO, UNDP and World Bank principles and indicators of sound governance are often criticised over their alleged conceptual and methodological flaws. However, they continue to be used in cross-country assessments, a fact which implies that they are relevant.
Indeed, all these, without exception, are fundamental, universally-recognised principles. We may argue and disagree over their direct applicability or relative significance in various country contexts but we cannot deny their broad relevance. Thus, they constitute a meaningful set of benchmarks for the evaluation of governance in Nigeria.
However, the following four key dimensions of good governance stand out and need to be given the greatest weight, amongst others, because of their impact on human development:
Legitimacy, encompassing voice, accountability, democratic governance and political stability; Direction - strategic vision; Performance, encompassing government effectiveness and efficiency, regulatory quality and control of corruption and fairness, encompassing equity and the rule of law.
Why Good Governance Matters
Why does good governance matter and what is the link between good governance, encompassing democratic norms, and development? In dealing with these posers, we need to understand what development means.
Development encompasses various components and notions, such as economic development, human welfare, the good life and human development.
However, these concepts are difficult to define and measure. Accordingly, for the purpose of this address, the focus is on human development which has been defined by the UNDP as “a process of enlarging people’s choices … the most critical of these wide-ranging choices are to live a long and healthy life, to be educated, and to have access to resources needed for a decent standard of living’’.
Thus, we have adopted the Human Development Index (HDI) for the purpose of establishing the link between good governance and development. While a long and healthy life is measured by life expectancy, access to knowledge is measured by the mean years of schooling for the adult population and expected years of schooling for children of school-entrance age. The standard of living is measured by the gross national income per capita, expressed in constant international dollars, using purchasing power parity (PPP) rates. Although the HDI has been criticised on both conceptual and methodological grounds, it is, as noted by Mattias Ottervik, ‘’an elegant as well as crude solution to the eternal problem of defining and quantifying human welfare. The elegant choice of a lowest common denominator definition of human development makes the HDI widely accepted. The crudeness of the measurement makes HDI easily quantifiable and understandable.. ’.
Various studies indicate that there is a strong link between good governance and development. Although there is some disagreement over the direction of causality in the correlation, there is increasing evidence in support of the view that the correlation between human development and governance is positive and high and that good governance plays a critical role in determining societal well-being.
This proposition is based on the compelling argument to the effect that sustainable development can only take place in an ordered, predictable and transparent environment where: all those in positions of authority are held accountable for their actions and results; there is impartial enforcement of laws and protection of human rights; there is effective and efficient deployment of policies and resources to meet the needs of society; and there is a firm law-and-order, anti-corruption regime in place. Furthermore, good governance is a necessary, although not sufficient, condition for leveraging foreign development assistance and enhancing its effectiveness, a fact that explains why the various international development finance institutions have given increased accent on governance in their assistance programmes.
In spite of the overwhelming theoretical and anecdotal evidence in support of the above proposition, a study by Mattias Ottervik indicates that the ‘’correlation between human development and governance is high, but at lower levels of governance, this relationship weakens.’’
In this connection, the case of China and India is often cited. China, with lower WGI scores, has been able to outperform India on HDI scores, although India has had higher WGI scores. This paradox of China’s higher HDI scores is explained by better government effectiveness in China than in India.
The emerging conclusion is that while higher governance scores in general produce higher HDI scores, it is government effectiveness, defined as the state’s ability to autonomously mobilise and deploy society’s resources to achieve its objectives that matters most. Thus, the effectiveness and efficiency indicator, which is highly correlated with other indicators, including the democracy proxy, is the most important determinant of human development and should be given due weight in assessing the government of a country. Furthermore, although democracy is an important component of good governance, democracy may not translate to improved human development or welfare if it lacks effectiveness and efficiency. Indeed, research studies and anecdotal evidence have found that a few military regimes in Third World countries performed better than some of the civilian administrations, particularly in the area of macroeconomic policy reform and management.
However, this should not be taken as indicating a preference for military dictatorship over civilian rule. On the contrary, we should stand for civilian rule and demand that it be both democratic and effective in pursuit of the public good, such that we have both true democracy and development.
Over the years, apart from the Human Development Index, several other indicators have been used in the global ranking of countries. The most notable of these are: The Corruption Perceptions Index; Global Competitiveness Index; Ease of Doing Business Index; Prosperity Index; Index of Economic Freedom and Democracy Index.
These Indices are inter-related with, and tend to reinforce, the governance and human development indices.
Although the rankings in these publications, like the HDI and WGI, have been criticised on both conceptual and methodological grounds and because they are based largely on perceptions which may be flawed, they remain valid and useful in general terms.
Turning to the private sector, it should be noted, in passing, that governance matters a great deal also. Indeed, there is a strong and positive correlation between sound corporate governance and organisational performance in terms of profitability, dividend pay-out, equity valuation and pricing, and sustainability. Furthermore, good corporate governance has a major role to play in national development and public welfare through sustainable business practices.
State of Governance in Nigeria
Over the years, various laws, regulations and guidelines have been enacted or published to enhance governance in both the public and private sectors in Nigeria. The relevant legislations include: the Nigerian Constitution; the Fiscal Responsibility Act; Public Procurement (Due Process) Act; the Nigeria Extractive Industries Initiative; the Anti-Money Laundering Act; the Companies and Allied Matters Act; and the CBN and SEC Corporate Governance Codes. Furthermore, numerous agencies have been established to implement or enforce the far-reaching provisions of these laws and regulations. At this juncture, it is pertinent to enquire whether these enactments have served their purposes.
The global principles highlighted earlier and the provisions of the various laws and regulations intended to promote good governance in Nigeria as well as the perceptions of key independent stakeholders should provide an informed basis for appraising the state of governance in Nigeria.
In the light of anecdotal evidence, published reports on public enquiries and other local reports, as well as global rankings of countries on certain key governance and human development indices, it is arguable that there has been a failure of governance in Nigeria.
The manifestations and indicators of governance failure in our Country are legion, some of which may be highlighted as follows:
• Wanton disregard for constitutional and legal provisions by public office holders.
• A culture of bureaucratic and criminal impunity and abuse of office.
• Lack of strategic vision and purposeful direction and a dearth of leaders and statesmen.
• Political violence and the desperation to acquire or hold political office at all cost.
• High incidence of electoral frauds and other malpractices, resulting in far too many documented instances where votes are either not counted or do not count!
• The barrenness of political ideology and debate and the curious politics of “stomach infrastructure”.
• High incidence of violent crimes, insurgency and terrorism, with various criminal gangs carving out spheres of territorial influence in some parts of the Country. Thus, there has been growing insecurity of life and property. Not surprisingly, the 2013 Global Terrorism Index listed Nigeria as the 4th after Afghanistan, Pakistan and Iraq!
• Lack of transparency and accountability by office holders.
• Rampant, deeply entrenched and crippling corruption and treasury looting, with Nigeria being ranked as the 33rd most corrupt country in the world. In this connection, the recent GAVI Scandal, involving the alleged misuse of donor vaccine funds by some Nigerian officials, may be noted as another case of corruption that would reinforce our Country’s unflattering reputation.
• A judiciary that is perceived to be tainted by corruption and undermined by abuse of court processes by the privileged business and political elite.
• Dismal failure of numerous empowerment and poverty-reduction programmes, such as OFN, GR, DFRRI, BLP, FSP, etc. and the high incidence of white elephant and abandoned government projects across the Country.
• Abject poverty and widespread malnourishment, as manifested in the vast majority of the people (about 70%) living below the poverty line, and the poor ranking of the Country on the FAO Global Hunger Index.
• High and worsening level of unemployment (14.9% in 2007 and 23.9 per cent in 2011).
• High level of illiteracy (64 million adult illiterates).
•Deplorable state of socio-economic infrastructure and public utilities, roads, housing, electricity, water, etcetera, as manifested in roads that are death-traps; persistent water shortage and power outages and blackouts; the fact that some 60 million Nigerians own power generators on which they spend about Naira 1.56 trillion annually.
• High oil and import dependency, including the undue reliance on importation of finished petroleum products although the Country has four refineries.
• The prevalence of the so-called ‘’Oil Curse’’ for which Nigeria is often cited as a classic example. This has manifested in the inability of successive governments to apply our rich oil wealth to diversify and transform the economy. Indeed, oil wealth in our Country has been associated with pervasive and entrenched corruption, profligacy, macroeconomic instability, neglect of agriculture and manufacturing, environmental degradation and resource control “wars”.
– Odozi, a former deputy governor of the Central Bank of Nigeria presented the paper at the the Institute of Chartered Secretaries and Administrators of Nigeria, Lagos Chapter’s 2014 Conference in Lagos on November 27.
