The Rise and Demise of Nigerian Agencies –By Matthew Ma

“A country’s population can only reach its full potential when its national agencies are functioning optimally. These agencies are responsible for providing essential services such as communication, transportation, electricity, postal service delivery, and public infrastructure. By ensuring that these agencies are working at their best, we can create an environment that is conducive to growth and development.”

It is a common belief that Nigerians have a tendency to destroy their own governmental agencies, whether intentionally or unintentionally. There could be several reasons for this, including insufficient training, inadequate funding, corruption, or political instability. However, it is essential to acknowledge that this is not a universal characteristic of Nigerians. Numerous individuals and organizations within the nation are working tirelessly to enhance the situation and create a better future for all Nigerians. While these individuals are striving to improve Nigeria’s reputation, the government recently released a statement that has raised concerns about the status of the country’s agencies and the role of its citizens in their deterioration. According to the report, the burden of the systemic collapse of the Nigerian Telecommunications Plc (NITEL), the National Electric Power Authority (NEPA), the Nigerian Postal Service (NIPOST), and the Nigeria Airways (NA) should not be entirely placed on the leadership but also on every Nigerian citizen. This statement has sparked a public discussion regarding the government’s honesty and whether the citizens of Nigeria have genuinely contributed to the current state of the nation’s agencies.

In the past, NITEL, NEPA, NIPOST, and NA were highly desirable entities in the country. Later, the Power Industry underwent significant changes when the Federal Government established NEPA by Decree No. 24 of 1972. NEPA resulted from the merger of the Electricity Corporation of Nigeria and Niger Dams Authority (NDA). In 1990, NEPA underwent partial commercialization with the appointment of a Managing Director/Chief Executive to oversee the Corporation. Moreover, NEPA was divided into four independent divisions: Generation and Transmission, Distribution and Sales, Engineering, Finance, and Administration, each headed by an Executive Director. By 2000, NEPA had a monopoly over the generation, transmission, and distribution of electric power, operating as a vertically integrated utility company with a total generation capacity of about 6,200 MW from 2 hydro and four thermal power plants. However, this resulted in an unstable and unreliable electric power supply situation in the country, with frequent power cuts and extended periods of power outages for consumers. A lack of maintenance of power infrastructure, outdated power plants, low revenues, high losses, power theft, and non-cost-reflective tariffs plagued the industry. In 2001, Nigeria began reforming its electricity sector with the National Electric Power Policy. The main goal was to establish an efficient and sustainable electricity market by transferring ownership and management of electricity infrastructure to the private sector. The Federal Government of Nigeria (FGN) took further steps to restructure the Nigerian power sector, aiming to establish a reliable and cost-effective electricity supply throughout the country to attract private investment. In 2005, the Power Sector Reform Act transformed NEPA into the Power Holding Company of Nigeria (PHCN) with 18 Business Units, 11 distribution companies, six generation companies, and one transmission company.
NITEL was a valuable asset in the telecommunications industry, attracting numerous interested parties, some of whom were driven by greed. Despite its profitability, NITEL could have been managed with greater efficiency, given its crucial role in Nigeria’s telecommunications system. The decision to abandon NITEL in favor of registering GSM companies seemed surprising. To tackle the issue, the Obasanjo administration turned to privatization and auctioned off the company at a low price to select individuals. In 2002, NITEL generated a revenue of N53.41 billion and collected N49.18 billion. Despite this success, the Obasanjo-Rufai group auctioned off NITEL to International London Limited (ILL) for $1.2 billion. It was later revealed that a group of politicians hastily assembled ILL to purchase the company. During the Obasanjo administration, the privatization program was advertised to attract foreign investors. ILL expressed interest in purchasing it but required additional foreign exchange. The majority of the funds were sourced locally, with First Bank providing the most capital. However, ILL and its local partners were only able to raise 10% of the required funds, putting them in a difficult position. The failure of the deal led to First Bank’s management crumbling, and the government was compelled to cancel the messy transaction. Following the ILL debacle, the El-Rufai BPE devised a new plan to entrust NITEL to an organization called PENTASCOPE to improve its profitability. Regrettably, PENTASCOPE was a fraudulent enterprise. Due to compelling evidence of the proposed management’s ineptitude, NITEL employees approached the Obasanjo-Rufai group and demanded that the management halt its dealings with PENTASCOPE. NITEL protesters marched to the NICON HILTON Hotel, where a contract was set to take place, in an effort to make their voices heard. As a result, the government announced a delay in signing the agreement. However, this delay was merely a ploy, as the group proceeded to sign the questionable deal anyway. Entrusting NITEL to PENTASCOPE was like leaving a group of hungry cats to guard a plate of fried fish. Instead of rushing into an agreement, PENTASCOPE should have taken the time to examine NITEL’s finances and clean up its treasury thoroughly. PENTASCOPE managed NITEL from March 2003 to February 2005, during which time the number of working NITEL lines decreased from 553,471 to 291,000. In the period prior to PENTASCOPE’s involvement (2002), NITEL generated N53.41 billion and collected N49.18 billion. Under PENTASCOPE’s management, these figures fell to N29 billion and N21 billion, respectively. In addition to the significant revenue loss, NITEL under PENTASCOPE failed to make any new installations or system upgrades in the digital age.

PENTASCOPE failed to address the root cause of the issue, leaving NITEL with a significant burden of N19 billion. This occurred after PENTASCOPE liquidated its credits with the ITU and INTELSAT, as well as wiping out the company’s investments in treasury bills with the CBN. The BPE was granted a license to operate NITEL while searching for a new investor. However, from February 2005 to November 2006, the BPE continued PENTASCOPE’s legacy of mismanagement and incompetence. To make matters worse, even the staff’s private pension funds, which PENTASCOPE had previously avoided, were now being accessed by the BPE. As employees protested, the local union, SSACTAC, and the BPE management worked together to punish the protest leaders. This involved punitive transfers and detention in police cells. TRANSNCORP, a company with questionable origins in which the President held substantial shares, took over NITEL from PENTASCOPE and BPE. They subsequently sold NITEL’s valuable assets across Nigeria at meager prices, including the NITEL Training School and various offices. This left the staff without salaries for an extended period of 11 months. The NITEL official market share plummeted from 15 percent to a meager 0.03 percent, while MTEL, NITEL’s GSM arm, had over 1.3 million subscribers. Unfortunately, the number has since dropped to a few thousand despite MTEL’s extensive reach.

Some people hold the view that the government’s expressed disappointment regarding the sale of NITEL lacks sincerity. They argue that the government’s tears were likely those of a crocodile. Their reasoning stems from the fact that the government knew TRANSCORP’s asset-stripping and looting of NITEL for two years yet took no steps to prevent it. In May of last year, a group of about 8,000 retirees and pensioners from NITEL/MTEL expressed their disappointment with the government’s refusal to provide them with housing funds and 83 months of unpaid pension arrears, despite it being included in the 2020 budget. Meanwhile, their counterparts in other government agencies have received their dues since 2019. The Economic and Financial Crime Commission (EFCC) has been prosecuting individuals for the theft of lands and assets that belonged to NITEL before its dissolution, dating back to 2014. Despite the acquisition of NITEL, the associated crisis remains unresolved. The critical question now is whether Tinubu’s anti-corruption government will take decisive measures, such as prosecuting those who have shamelessly plundered NITEL, or whether it will consider this an unavoidable circumstance and focus on other pressing matters.

On August 23rd, 1958, West African Airways Corporation Nigeria (WAAC Nigeria), later known as Nigeria Airways, was established. The Nigerian government was the majority shareholder with a 51% stake, while The Elder Dempster Lines and British Overseas Airways Corporation (BOAC) held 32.5% and 16.5%, respectively. BOAC managed the airline, providing the plane for the first international route from Lagos to London. After Nigeria gained independence in 1960, the government took complete control of the airline, and BOAC withdrew from operations in 1964. However, mismanagement led to the airline accumulating significant debts during Shehu Shagari’s administration, exacerbated by the excessive number of staff, with up to 500 employees per plane. By 1984, nine of the aircraft were not serviceable, and the airline had 8,500 employees, many of whom were unnecessary. The collapse of Nigeria Airways can be attributed to several factors, including corruption, poor management, and the structure of ownership. Regrettably, key players in the Nigerian aviation industry viewed the national carrier as an opportunity to embezzle public funds, which greatly affected the system’s efficiency. Additionally, concerns were raised about the Nigerian government’s ability to manage the aviation industry effectively. Mismanagement, corruption, and the misuse of aircraft for personal and unrelated activities without payment further exacerbated the issues. Insufficient funds, subsidies, grants, and support worsened the airline’s situation, as did inflated prices of spare parts. These factors ultimately led to the airline’s demise despite efforts to revive it. Sadly, Nigeria Airways was neglected in favor of foreign airlines, and the government’s misuse of resources contributed to its downfall.

NIPOST has a rich history dating back to 1852 when the British colonial masters established the first post office in Nigeria. However, it officially became a government department on January 1st, 1985, along with the Nigerian Telecommunications Limited (NITEL). In its early years, NIPOST’s primary duties included overseeing the dispatch and distribution of overseas mail and providing philatelic services such as printing postage stamps and collecting stamp duties in Nigeria. However, with the rise of information technology and online shopping platforms like Konga, Jumia, Dealday, and Amazon, traditional postal services have become less relevant. In the United States, delivery companies such as FedEx, UPS, and USPS have played a crucial role in ensuring that companies like Amazon can continue to provide efficient and reliable delivery services. Despite the ever-evolving technological landscape, Amazon remains committed to exploring new methods of delivery through its distribution channels. In Nigeria, early online stores employed individuals to act as delivery agents, creating employment opportunities and rendering NIPOST almost obsolete. However, in 2015, NIPOST and Konga signed an agreement to tackle logistics and delivery challenges in the e-commerce industry. Dr. (Mrs.) Omobola Johnson, the former Minister of Communication Technology, stated that the partnership would aid the growth of retail business in Nigeria. Regrettably, recent developments suggest that the agreement has yielded few positive results, as Konga relies on privately owned delivery services for its shipments.

In April 2017, NIPOST established a partnership with PAGA, a payment solution company. The deal leveraged all NIPOST offices across Nigeria and was made possible by the Central Bank of Nigeria’s approval of the shared agent Network framework. This partnership aims to bolster Paga’s mobile agent money network by providing them with more offices and increasing their reach to customers. Mr. B.M. Mukthar, the general manager of financial services at NIPOST, stated that with a post office location within a reasonable distance of almost every community in the country, NIPOST could play a leading role in enhancing financial inclusion for the betterment of Nigeria. According to him, NIPOST is committed to partnering with Paga and other financial institutions to bring critical financial services such as bill payments, bank account deposits, withdrawals, loans, and money transfers. Jay Alabraba, co-founder and director of business development of PAGA, maintained that their collaboration with NIPOST was a significant milestone in their efforts to provide financial services to all communities in Nigeria. Alabraba highlighted that the Central Bank issued clear guidelines for shared services like this, and they welcome other institutions to join them in reaching more customers and making the initiative a success. Through this partnership, Paga now has access to all NIPOST offices nationwide, and NIPOST staff will be trained to carry out day-to-day transactions for Paga and mobile money agents. These developments reflect NIPOST’s commitment to enhancing financial inclusion in Nigeria.

Government-owned companies often require assistance to operate effectively. One standard solution is to sell them to private corporations with the goal of revitalizing and improving their performance. A prime example is Nigeria’s National Electric Power Authority (NEPA), which was privatized in 2005 due to decades of poor customer service. Unfortunately, power outages persisted for over a decade after the privatization. Similarly, NIPOST is at risk of facing a similar fate as it has yet to evolve. The Postal Service Act was passed in 2004 with the hope of ushering in a new era for NIPOST. Despite the law, NIPOST continues to mishandle and misplace parcels, resulting in lost letters and undelivered packages. Today, the postal service has yet to rectify these shortcomings and shift its focus from money orders to letter delivery. As electronic mail continues to gain popularity, NIPOST must adapt and prevent becoming a financial burden on the public. While some states have made efforts to modernize facilities and retrain postal staff, the national postal service as a whole has yet to see significant progress. To overcome the challenge of Nigeria’s disorganized address system, NIPOST should explore innovative solutions. Many households in Nigeria need a proper address or postal code, which makes it challenging for the post office to carry out its responsibilities. Through collaboration with the government, NIPOST can provide addresses to enable efficient deliveries to both rural and urban areas.

NIPOST’s services could benefit from some improvements. However, the postal service faces challenges such as outdated facilities and infrastructure, which hinder its efficiency. To catch up with other countries in terms of digital technology, NIPOST needs to adopt new addressing systems and develop mobile apps for both Android and iOS. By digitizing records and package signatures, the service can reduce its carbon footprint and safeguard vital documents from fire damage. To encourage more Nigerians to use the postal service, NIPOST needs to launch an effective marketing campaign and improve public relations. Many people are unaware that the postal service still exists and operates efficiently. Raising awareness of the services it provides could increase patronage and enhance public perception.

The Nigerian government tends to exert its opinions and regulations on its agencies, which has caused hindrances to their success. These hindrances include red tape, appointment intrigues, budget allocation issues, and threats of privatization. Despite these actions, NIPOST has the potential to enhance its relationship with the government through a handful of adjustments. For instance, granting more autonomy to the postal service would allow it to operate more efficiently without interference. Furthermore, the appointment of board members and the Postmaster General should be free from any intrigues or uncertainty that could negatively impact the services provided to the public. Proper funding and the allocation of funds would also significantly improve the service’s performance. With increased financial support, NIPOST could renovate its facilities, digitize its records, train its staff, and achieve much more.

Some experts believe that revitalizing Nigeria’s postal services and implementing a national postal code system could help address the problem of kidnapping in the country. This would require investing in necessary infrastructure, such as a modern computerized system for tracking people through postal codes. Postal codes are crucial in determining the exact locations of people’s residences and occupations, providing valuable information that can assist in reducing crime rates.
Postal codes offer businesses valuable insight into consumer behavior, enabling them to tailor their marketing strategies accordingly. Additionally, the use of postal codes can be instrumental in improving safety and security within communities. A dependable and secure postal system can help reduce the incidence of crimes such as kidnapping while also encouraging economic growth and enhancing the quality of life for Nigerians. By identifying high-risk areas through the use of postal codes, law enforcement agencies can allocate their resources more effectively to combat crime. The inefficiency of the postal service has hindered progress in addressing security challenges, but implementing a national postal code system could be a step towards a safer Nigeria.

NITEL serves as a stark reminder of the inefficiencies, government failures, and rampant corruption that plague Nigeria. Despite efforts to breathe new life into the company, the privatization process was compromised by public officials with vested interests in favoring certain companies. Tragically, the well-being of NITEL’s workers and retirees was primarily disregarded. In its prime, NITEL was rife with corruption fueled by both employees and government officials. Today, the company has fallen into the hands of political and economic elites who have abandoned retirees and terminated the employment of nearly 70% of the workforce. It’s noteworthy that NITEL, the Nigerian telecommunications company, was recently brought back under the control of President Yar’Adua’s administration due to mismanagement, corruption, and the failure to revive the company under Transcorp’s ownership. Today, it has come to light that the management team of Transcorp is currently facing trial for allegedly embezzling N15 billion from the coffers of the Nigerian Telecommunications Limited (NITEL). This unfortunate incident has had a significant impact on NITEL, which has remained stagnant. Sadly, NITEL is now considered a prime example of how predatory corruption can negatively affect businesses in Nigeria.

Despite the high cost, there are valid reasons why a country like Nigeria, which faces resource challenges, may consider having a national airline. A national carrier can drive economic growth and development by facilitating trade and business connections, attracting foreign investment, and supporting the growth of related industries such as transportation, hospitality, and tourism. Additionally, owning a national carrier allows countries to keep revenue that would otherwise be lost to foreign airlines. For instance, Nigeria currently loses approximately $2.3 billion to foreign airlines annually. By establishing a national carrier, a significant portion of this revenue could be retained within Nigeria’s economy and contribute to its growth and development. It’s worth noting that a national carrier plays a crucial role in aiding the repatriation of citizens in times of crisis, ensuring their safe return home. In situations of conflict or unrest, when commercial flights may be disrupted or unavailable, a national carrier can provide evacuation services and bring citizens back to their home country. For instance, when Nigerian students found themselves stranded in the midst of the Russian-Ukraine war or war-torn Sudan, a national carrier would have been instrumental in expediting the repatriation process. By relying on something other than the goodwill of private airlines like Air Peace, which may face delays and logistical obstacles, a national carrier could coordinate a more efficient and effective rescue operation. This demonstrates the government’s commitment to safeguarding its citizens and providing necessary assistance during difficult times, ensuring their safety and well-being. Finally, a national carrier embodies a sense of national pride for a country. It serves as a physical manifestation of a nation’s achievements and its capability to compete globally. While Nigeria works to establish its proposed Nigerian Airway, we eagerly await the swift implementation of this concept, which will enable its people to enjoy the advantages of being part of “Africa’s Giant.”

It is important to note that NITEL, NEPA, NIPOST, and NA have enormous potential to create employment opportunities for young people and contribute billions of naira to the economy. Some countries have successfully repositioned their domestic companies to achieve these desired outcomes. These countries have created a supportive environment that fosters innovation, encourages entrepreneurship, and attracts foreign investment. However, the Nigerian government has yet to capitalize on this opportunity entirely. Despite an abundance of natural resources, the country still needs help with its companies, including regulatory hurdles, poor infrastructure, and limited access to financing. These difficulties have impeded business growth and expansion and hindered the government’s ability to create more opportunities for its citizens. By rebranding these companies, the government can create numerous job opportunities and generate significant revenue. What is the best way for our nation to move forward? To unleash the full potential of our people, we must revitalize our national agencies, allowing us to enhance the efficiency and effectiveness of our government’s policies, programs, and services. This will translate into better outcomes for our citizens and a more flourishing society. To elaborate on this point, a country’s population can only reach its full potential when its national agencies are functioning optimally. These agencies are responsible for providing essential services such as communication, transportation, electricity, postal service delivery, and public infrastructure. By ensuring that these agencies are working at their best, we can create an environment that is conducive to growth and development. This, in turn, can lead to economic prosperity and social stability. Therefore, we must invest in revitalizing and strengthening these agencies to unlock our nation’s full potential.

Rev. Ma, S.J, is a Jesuit Catholic priest and PhD candidate in public and social policy at St. Louis University in the state of Missouri, USA.