A Blueprint for Reforming the Public Sector

The public sector drives the growth and development of any economy. This can be confirmed by taking a critical look at macroeconomic indicators, like Gross Domestic Product (GDP), Consumer Price Index (CPI) and inflation rate amongst others. These indicators are highly influenced by public sector policies, reforms and activities. For instance, you must factor in government spending and investment when calculating the GDP of any nation. A good government will effectively and efficiently manage public finances to maintain a positive GDP growth rate. In the same vein, changes in the prices of commodities and the general cost of living of any country are highlighted when the CPI is calculated. Inflation is usually caused by having too much money in circulation. A responsible government must manage its inflation rate with effective monetary policies.

Developed countries are constantly taking deliberate actions to grow and develop their economies through success-driven reforms, business-friendly policies, trend-focused initiatives and other myriads of sustainable development programmes.

The performance of the Nigerian public sector is poor and far below global standards. Our public sector is characterized by financial mismanagement, low productivity, little or no respect for the rule of law, poor administrative framework and misplaced priorities amongst others. Nigeria remains an under-developed or developing country due to poor economic performance, infrastructure deficit etc. This narrative can be changed through the development and implementation of strategic and result-oriented reforms.

Good policies and reforms void of key success factors do not translate to desired results or outcomes. Below are some key success factors that must be put in place to ensure that reform initiatives are effective:

  • Effective Communication and Stakeholder Engagement:
    The drive to reform the public sector, as well as its advantages, must be well communicated to all stakeholders. Reforms, projects or policies developed without the engagement of stakeholders are bound to fail. One of the most effective ways to engage stakeholders is to hold a retreat session with key players in the public sector. At these retreat sessions, stakeholders and government officials can jointly develop, communicate, and kick-start reforms.
  • Reform Management Framework:
    There must be regular follow-up on the plans and agreements made during the retreat sessions. All the plans and agreements made must be properly implemented. Thus, a framework that will track progress and address potential issues that will arise due to the change must be established.
  • Set-Up A Reform Management Office:
    An important off-shoot from the reform management framework should be the creation of an office that will drive the change using the framework. This office should be led by senior government executives (President/Vice President or Governor/Deputy Governor) and staffed with private sector technocrats. These technocrats will drive the reform process and ensure the best private sector practices are followed.
  • Roll Out the Reforms:
    The political will to roll out and implement planned reforms is crucial. Public sector reforms must be rolled out chronologically and in phases.
  • Track and Monitor Progress:
    Progress must be monitored and evaluated regularly, with regular reports delivered to senior executives. This will help to identify challenges and bottlenecks in the processes and will guide other areas or programs that may be vulnerable to similar issues. The reform management office should champion this process.

Having set in place factors that will ensure successful implementation of reform agendas, the following reforms/initiatives are key to achieving good public sector governance:

Revenue Expansion Reforms: The sharp fall in the price of crude oil and the ever-increasing cost of running the government are putting pressure on the limited public resources. The Federal and the State Governments need to embark on serious revenue expansion drives. For governments to improve the revenue generation in Nigeria, reforms must be along the following areas:

  • Exploit other revenue sources: overdependence on a single source of income has adversely affected the Nigerian economy. It is important for the company to focus on other sectors where the country has a comparative and competitive advantage for revenue generation.
  • Review and harmonize revenue laws: Revenue-generating Ministries, Department and Agencies (MDAs) fight or even sue each other due to conflicting revenue laws. Sometimes, the citizens also suffer from double or multiple taxations due to these gaps in revenue law. Local governments and state governments still fight on who and how to collect land use charge, tenement rates and business premises fees. Thus, governments must review and harmonize all conflicting revenue laws.
  • Restructuring inland or internal revenue service: The inland or internal revenue service is responsible for collecting revenue on behalf of the government. However, they lack the technical, human, and structural capacity to deliver on their mandate. These organizations must be restructured to have operational and financial autonomy. They must invest in capacity development for better tax administration and optimize or re-engineer the process of revenue collection.
  • Leverage technology to block leakages: It is the news that public funds are being diverted into private purses due to loopholes in the process of revenue collection. Hence, governments must infuse technology to block leakages and boost revenue realization.

Public Service Reform: Due to globalization and the ever-evolving macro-environment, the public service must be reformed to meet the expectations of today’s world. Deliberate reform initiatives like a review of civil service salary structure, change in the recruitment process, capacity development, adoption of performance-based rewards, and re-orientation of civil servants should be implemented.

Public Financial Management Reform: There should be reforms aimed at strengthening the budgeting process, internal control and accounting procedure, cash management, due process etc. This will foster accountability, probity and transparency in the administration of public funds and prioritization of projects that will yield maximum return and improve public service delivery.

Phillips Consulting Limited (pcl.) is a leading business and management consulting firm serving clients across Africa. www.phillipsconsulting.net/