Odion Taiwo Ezomo: How to succeed in mathematics

By Odion Taiwo Ezomo

Step 1: Hard work trumps natural talent.

Image credit: Rochester Institute of Technology

As it is in most other areas of life , the people who are most successful in mathematics are the one who work the hardest , not those with “natural talent’’ in school. Those who work hard get better grades in mathematics than the ‘’smart’’ students who just coast. Most aspect of mathematics can only be learnt by hard practice. This holds true whether you want to develop your problem solving abilities or your computational skills. No one thinks they can run a marathon by using their natural talent, but there are lots of people with no talent for running who have worked hard and have successfully completed many marathons.

Step 2: Keep an open mind.

In mathematics almost everything you learn is useful, even if you can’t see it right way. All the formulas, theorem, ideas, proofs, and problems you study in high schools and colleges are connected to lots of real world applications, even if you don’t see them now. And more importantly even if you think you’ll never use the specific things you are studying, they help develop your mind and make it easier for you to solve other problems, later the problems you really care about. It’s like boxing: training programmes for boxers often involve lots of jumping rope. A boxer might complain ‘’When am I ever going to use this? I am never going to jump rope in a match “But jumping rope makes them better boxers, even though the boxers never jump rope while fighting. The mathematics you are learning is much more useful than jumping rope; but even if you never use it in your life yet, it makes you smarter. That is the most important reason to study it.

Step 3: find the reasons don’t just memorize.

Mathematics is not just a long list of random formulas that someone’s invented out of nowhere. Mathematics work because it is true, there is a reason for every step, every rule, and every part of every formula. Don’t just memorize the formulas and the rules .Find out where they came from. Why they work, and what they mean .It may sound like more work to do this, but if you will quickly find that understanding the reasons and the meaning actually makes everything easier.

Step 4: never give up.

Mathematics is hard. Anyone who says otherwise is lying. But you can do it anyway. If you want to be good at anything, you have to stick with it, even when you feel like quitting. You gain the most when you finally figure out a problem after a long struggle. That’s how you get smarter. But you’ll get nowhere if you give up whenever a problem is confusing or when can’t solve it right away. Athletes know that working, fighting, against something that is hard makes you stronger. The same goes for your brain getting the right answer quickly won’t make you smarter, but fighting with a hard problem for a long time will.

Step 5: Learn to read the textbooks.

Mathematics books are not like other books they pack a lot of information into a small space. One page might take you an hour to really understand well. That is not the books are poorly written it is because it takes time to absorb the information, and you have to think carefully about every line.

You even have to think a lot about the pictures.

Most people who try to read mathematics books get frustrated and give up they expect the mathematics book to be as easy to read as their favourite novel. But if you slow down and really think about what is happening in each step, you will find that your book is like a personal tutor. Most books have lots of examples and explain things in several different ways. Most of them are written by someone who someone who has teaching for a long time and knows how to help you with the confusing parts. Once you get the hang of reading them, they can make learning mathematics a lot easier.

The one thing a book can’t do is answering questions. The great secret is read the book before you go to class. Then you can ask the teacher about all things that didn’t make sense in the book. Most people only try and read their books after class, when they didn’t understand some part of what the teacher as saying. But then if you have a question, you’re stuck you can’t ask your questions because the teacher is gone.

Step 6: Talk to your teacher.

Professors and teachers want to help you. Get to know them .Go to them for help they love to talk to students who want to learn. Go to them to get help finding the right classes, to get help with homework (even for a class they are not teaching), and just to discuss life. They can help you with your mathematics, and they can help you avoid the mistakes they made when they were students.

Step 7: Look for the beauty.

Mathematics is extremely useful, but it is also beautiful. It connect lots of different ideas into one. It explains important things that cannot be understood in any other way. When you finally get it, it is exciting to see how things fit together, why things work. How it all makes sense. Enjoy the experience of opening your mind.

Ezomo Odion Taiwo is of the Department of Education, South Africa

Report: Wanted! Hassle-free polls with e-voting, By Temitope Ogunbanke

By Temitope Ogunbanke, National Mirror

 

Last Saturday’s governorship election in Ondo State, going by the account of many, can be said to be free and fair. The election was applauded by the international and local observers because of the manner it was conducted. Even some political analysts believe strongly that the Ondo governorship election was an improvement on the last one in Edo, thus giving kudos to the Independent National Electoral Commission (INEC). During the election, there was a heavy deployment of security agents and INEC staffs to Ondo State.

About 18,000 security personnel and 9,000 INEC staff and ad-hoc staff took part in the election to ensure that it was hitch-free. However, despite the applause INEC has got over the election and the huge resources expended, there were still some problems bordering on logistics on the part of INEC and challenges on the part of security agents in the election. Based on the challenges faced during the election therefore, some people are of the view that adopting an electronic voting (e-voting) in future elections will strengthen election process and reduce the cost of conducting election in Nigeria.

Speaking to journalists in Akure on Sunday on the outcome of the Ondo State governorship election, the national chairman of Labour Party, Dr Dan Nwanyanwu, made a proposal to that effect, saying that it would be in the interest of Nigeria as a nation.

His words: “INEC did very well in the Ondo State governorship election and I think it is an improvement from what happened in Edo State governorship election. But we still need to adopt a system that will make us not to mobilise the whole military force and police into one state for election. So, I am recommending electronic system of voting in Nigeria. India used it for over 600million voters and the system succeeded. “It can work also in Nigeria whereby by the time you press a button to vote automatically the result is transmitted. There would be no need for ballot papers, ballot boxes and cubicles. Thugs would have no job to do. It will allow people to go out and vote without any fear. The electronic voting is also less expensive.

By the time we get there I can assure you that Nigeria will fly.” Nwanyanwu’s view also renewed the call for e-voting in Nigeria, especially ahead of the 2015 general elections. It would be recalled that since the Prof. Attahiru Jega-led INEC called on the National Assembly for the amendment of Section 52 (1) (b) of the Electoral Act 2010, which makes it an offence for INEC to use e-voting, many Nigerians have been expressing different views on the system. While some are commending the initiative of the INEC boss in seeking the introduction of the electronic voting system in future elections, some are of the view that Nigeria is not ripe for e-voting. Electronic voting is a term that describes the use of electronic cards and electronic voting machines in voting for a preferred candidate during an election.

It was invented to correct some anomalies and address some factors militating against credible elections. The introduction of the Direct Data Capturing Machine in Nigeria during the last voter registration exercise assisted a great deal in drastically reducing incident of multiple registrations which was usually the starting point in election rigging. Therefore, those in support of the e-voting believe that adopting the system will uphold the strength of the Nigeria electoral system and improve on its weaknesses. Electronic voting, without any iota of doubt, is a vital key to solving a reasonable portion of the problems associated with our elections.

From issue of transparency to election induced violence orchestrated by thugs and highly prejudiced electoral umpires, electronic voting can help force these typical maladies into the dustbin of history. In the past general elections, Nigerians have experienced high degrees of rigging, ballot box snatching, under-age voters, election and post-election violence. Over the years, elections results in Nigeria have been taken with a pinch of salt.

Therefore, many people believe that adopting the e-voting will make future elections in Nigeria to be more credible and violence free. According to some political analysts, some of the basic advantages of e-voting include; the need to record information and to have the results available quickly; need to have a system that is accessible to all and easy to use (accessibility); need to ensure secrecy of what takes place ; need for voting to be undertaken seriously, after due deliberation .

Others are the ability to ensure that each individual’s vote is recorded and counted accurately; need to guard against manipulation and interference with information once recorded; need to ensure that individuals cannot be impersonated and need to verify what has taken place through the use of traceable information trails.

Many also believe that the use of evoting devices, if legalised ahead of the 2015 elections, will considerably reduce the cost of organising elections in view of the fewer number of manpower that will be required at each poling unit. The Electronic Voting Machine (EVM) which has greatly assisted India cope well with its over 700 million voters population contains devices which should make tabulation and computation of elections results faster and eliminate cases of figure alteration between poling units and collation centres. A public affairs analyst, Mr. Chima Nnaji , in a recent television interview programme said that the introduction of electronic voting system would help in combating electoral fraud in Nigeria.

He said that the process of electronic voting is to basically de-personalise the whole process of election and it is also a process that would decongest corruption. The pioneer coordinator of the Ondo State Information Technology Development Centre (SITDEC) and policy chairman of the National Development Initiative (NDi), Mr. Tunji Ariyomo, in a recent statement, posited that electronic is a vital key to solving a reasonable portion of the problems associated with Nigeria’s elections. He said electronic voting could help in forcing election induced violence orchestrated by thugs and highly prejudiced electoral umpires and other electoral frauds into the dustbin of history.

“There is no doubt that electronic voting would bring a major change to the existing electoral system. It will also have the multiple benefits of reducing the need for too many voting stations, introducing permanent voting stations in secure locations and enabling INEC to drive political parties to utilise such voting stations for the conduct of their primaries,” Ariyomo noted.

Those opposed to e-voting believed that the system cannot work in Nigeria now because of the dearth of infrastructure and level of illiteracy in the country. Some people are against the e-voting because they believe that the process may be manipulated by the power brokers, considering the rate of fraudulent activities in the country, especially various scams in public offices.

The epileptic power supply in Nigeria, according to some political analysts, will also be a stumbling block to the e-voting, they said. Although the system could reduce electoral malpractices drastically, many people are of the view that federal government may be unwilling to provide the funding required to put the electronic voting system into use. Speaking to Saturday Mirror, a National Conscience Party (NCP) chieftain, Ogbeni Lanre Banjo, said Nigeria is not mature for electronic voting system because of the level of corruption in the country.

“I am not in support of electronic voting system because it can be programmed to perpetuate fraud. For example, they can programme it in a way that if someone votes for NCP, the vote will go to PDP.

Some countries that adopted the system in the past have stopped using it because of manipulation. I don’t think Nigeria is mature for electronic voting considering the fact that many people are not well conversant with modern day technology devices,” he said.

In a recent media interview, a member of the House of Representatives from Taraba State, Mr. Jerry Manwe, is of the view that funding may be an impediment to e-voting in Nigeria. Manwe, the Chairman, House Committee on Electoral Matters, expressed doubt that the government would adequately finance the voting system.

His words: “There are basic things that INEC needs to put in place, but is the government ready to fund them? We need a data-base for voters, which is not available yet.

Besides, e-voting requires an amendment to the Electoral Act; there is no proposal before the House yet on this. So, on the whole, e-voting is contingent on how much fund the government can provide for INEC. E-voting is good and can reduce electoral malpractices.” With the ongoing constitutional amendment being embarked upon by the National Assembly, and with the possible focus on the Electoral Act 2010, it is unlikely that e-voting will be considered.

Whether the system will survive the debate that will follow is a different matter entirely.

THE CREDIT FOR THIS REPORT BELONGS TO THE NATIONAL MIRROR NEWSPAPER, source HERE

KNOWLEDGE UPGRADE ON EUROCODE AND THE EFFECTS OF USING OLD BRITISH STANDARD AS DESIGN GUIDANCE IN NIGERIA

Being a technical paper on the need for knowledge enhancement for Nigerian engineers

 

 

Publication:            National Development Initiative

Release date:          25th June 2012

 

By

Olugbenro Falola

MSc.(Structural Engineering, UK), B.Eng.(Ogbomoso)

Correspondence e-mail: olugbenro@structuralsolution.co.uk

Editing/Proof: Olatunji Ariyomo & Olugbenro Falola

Published by NDi

www.nd-i.org

publications@nd-i.org

25TH JUNE 2012


 

1.0      INTRODUCTION

It is over two years now that the use of British Standard has been replaced with the 58 parts of Eurocodes (March 31, 2010 – BSI, 2009). The British standard committee has made it clear since that time that all public works should be designed in accordance with the new Eurocode (BSI, 2009). They also made it known to the public that there would be no amendment or revision of the British standards (BSI, 2009) which suggests that the design code would be obsolete in the nearest future. The advantages of the Eurocode cannot be over emphasized. Numerous literatures and experience have shown that the Eurocode provides economical design than British Standard (Mostley et al., 2007, Narayanan 2010, Concrete centre, 2010). Aside this, the code is less restrictive and allows choice of safety parameters to be used by each country knowing that design and construction practices, standard and quality of materials, climatic conditions, human behaviour to structures among other factors differ from country to country.

Recent short survey has shown more than 85% of Nigerian engineers, lecturers, students and graduates with no exception of companies are not aware of this replacement and dangers associated with it (Falola, 2011). The aim of this article is to alert users of the British Standard to the effects of using the code, identify areas that need public attention in the old British Standard, enumerate the advantages of adopting the new Eurocode and suggest how we can develop the Nigeria’s indigenous code.

2.0      BENEFITS OF ADOPTING THE NEW EUROCODE

2.1 General Benefits

  • Provide a common basis for research and development.
  • Allow the preparation of common design aids and software.
  • Eurocode 2 should result in more economic structures for clients.
  • Eurocode 2 is less restrictive than British Standards.
  • Eurocode 2 is extensive and comprehensive.
  • The new Eurocodes are reputed as the most technically advanced codes in the world (Concrete Centre, 2010). 

2.2 Benefits to Companies:

  • Eligibility to design and work freely in all European countries

    Lagos: Partial Collapse Of 21-Storey Skyscraper
    Lagos: Partial Collapse Of 21-Storey Skyscraper
  • Enhance career opportunity for the company and staff.
  • Improve design competency.
  • Abreast with latest design standard.
  • Enable companies to bid for international projects especially in all EU.
  • Improve companies’ standard and quality.
  • Economical design – reduced construction cost. (Concrete Centre, 2010)

2.3       Benefits to Students & Graduates:

  • Eligibility to design and work freely in all European countries.
  • Enhance international career opportunity.
  • Improve design competency.
  • Allow academic research in higher institutions to meet current global challenges.

3.0      WHY IS IT NECESSARY TO ADOPT THE NEW EUROCODE?

It is obvious that many Nigerians will feel reluctant to adopt the new eurocode. Answers to the following questions will help to form the right judgment:

  1. Do we know the consequences of using the old British standards on the standard and quality of our academic research, design and quality of our projects?
    Do we know the flaws in BS8110?
    Do we think that our academic research in the nation’s universities will still be acceptable in the global knowledge using the old code as references?
  2. What would be the fate of our students and graduates even if engineers are reluctant to adopt new knowledge knowing that the British Standard is now obsolete?
  3. Are we working towards the development of our own code, If yes, How?
  4. Are we developing our own code from the previous code without resolving the flaws in the code?
  5. Are we developing our own codes based on non-empirical factors of the ideas of some practising engineers knowing that a code should be developed along with experimental research?
  6. Are we involving academic scholars or researchers to channel their research towards the development of our own code?
  7. Do we even have funds available for this?
    Are we developing just an aspect of the code such as design of concrete buildings?
  8. What of other areas such as highway, geotechnical, steel design, etc?
    Do we even welcome contributions from scholars towards the development of our own code knowing that nobody is an embodiment of knowledge?
  9. However the adoption of eurocode will not only answer the aforementioned questions but also provide the benefits as stated earlier.

I am not of the opinion that we should suddenly drop the old British standard but it is high time we got acquainted with new ideas. There are several systematic ways we can adopt the new eurocode rather than continue using the obsolete British Standards.

We should also have in mind that there are sections that need further clarification in the British Standards especially the BS8110. Further articles and research papers by the same author will reveal some of these in due course. In the mean time, it is of great necessity to point the art of column classification in the BS8110 to the public. Several arguments have been raised to know the specific parameters that influence column classification. The enclosed short term paper at the back of this article will further shed light upon this.

3.1      NATIONAL ANNEX AS A WAY TO DEVELOP OUR OWN CODE

Having known that the eurocode is flexible and allow each country to choose their safety parameters through what is called Country National Annex to Eurocode, the National Annex is concise and easy to develop than a whole code. It gives us the opportunity to select our own safety parameters such  as load factors, material factors, etc which are mainly dependent on our construction practices, materials standard and quality, human behaviour to structures, etc in the country – although this still requires some practical works and experimental findings. It is obvious that this huge advantage is not available in the old British Standards wherein the safety factors were mainly developed based on the design and construction practices in the United Kingdom.

Do we even know that this system was also adopted by the owner of old British Standard? The United Kingdom now uses “UK National Annex to Eurocode”. Similar procedure is in place in South Africa where they already have their own design code (SABS). The country still intends to adopt the Eurocode alongside the SABS knowing the benefits and the importance of global knowledge. This means that developing an effective “Stand Alone” design code in Nigeria might take years.

The “Nigeria National Annex to Eurocode” will not only provide us the integration to global knowledge and design practices but can also be used as a foundation for the development of our own code after extensive design practices and qualitative researches.

4.0      SAMPLE PROBLEM AND COMPUTATION

4.1 COLUMN CLASSIFICATION IN ACCORDANCE WITH BS8110 & EUROCODE 2 COMPARED

Columns are structural elements which are primarily used to provide either temporary or permanent support to compressive loads, and sometimes used to resist bending. It may be referred to as “spinal cord” of structures due to the fact that their failure may trigger the collapse of the whole structure if not properly designed. However, this poor design may be due to inappropriate guidance procedures given in the adopted design code rather incompetency of the designer alone.

The design of columns perhaps in any design code in the world is primarily based on column classification (either as short or slender). Inappropriate classification may lead to failure of the column especially when local buckling and second moment is expected to be considered in the design which will affect the anticipated design load capacity of the column. This error may be due to the adopted design code as aforementioned. It is obvious that the main essence of column classification is to know the failure types of the column. Therefore it is necessary to understand those parameters that govern such failure which in turn affects column classification.

 4.2 Research Objectives

  • To investigate column classification in accordance with BS8110 in comparison with Eurocode.

4.3 Research Significance

The results of this study will validate further applicability of the present column classification approach described in BS8110. It will also give general notice to the insisted present users of BS8110 to make adequate revision of the code where necessary or get acquainted with the latest Eurocode.

4.4 Research methods

In order to achieve the objective of this research, a critical analysis of column classification in accordance with BS8110 and Eurocode 2 were thoroughly examined. A questionnaire was also developed to examine the art of column classification in accordance with BS8110.

4.5 Terms definitions:

Short column– one in which the ultimate load capacity is dictated by the material strength and cross-section. This type of column fails by crushing of the material.

Slender column– one in which the ultimate load is influenced by material strength, cross-section as well as slenderness. This type of column can fail either by material crushing or instability (buckling) of the column.

(a)               BS 8110 approach (BSI, 1997):

According to the above design code, a column is regarded as short when both the ratios lex/h and ley/b are less than 15 and 10 for braced and unbraced respectively, otherwise is slender. Where lex and ley are the effective length in major and minor axes respectively; ‘h’ and ‘ b’ are the larger and smaller dimension of the column section respectively (BS8110, 1997). The effective length is given as:

le = β l                                                                                 (4.1)

Where lo is the clear length between end restraints and not exceeding 60 times the minimum thickness of a column according to section 3.8.1.7 of BS8110, 1997. For a cantilever column, this should not exceed:

                                                                                 (4.2)

 

The value of β depends on end conditions and lateral restraint against sideway (braced or unbraced) as shown below.

Table 2.1 Values of β for (a) Braced column and (b) Unbraced column.

  End condition at top End condition at bottom
1 2 3
1 0.75 0.80 0.90
2 0.80 0.85 0.95
3 0.90 0.95 1.00

(a)

 

 

  End condition at top End condition at bottom
1 2 3
1 1.2 1.3 1.6
2 1.3 1.5 1.8
3 1.6 1.8
4 2.2

 

 

(b)

 

 

Source: Table 3.19 and 3.20 of BS8110, Part 1(1997).  For conditions 1 to 4 see section 3.8.1.6

(b)               Eurocode approach (EN, 1992; Mosley, et al., 2007)

 

In contrast to BS8110 slenderness approach for column classification, EC2 takes into account the contribution of design ultimate axial load on the column, concrete strength, longitudinal reinforcement as well as creep effect along with aforementioned parameters when classifying a column.  In this approach, columns are classified as either short or slender by placing a limit on slenderness ratio. Columns having slenderness ratio λ not exceeding slenderness ratio limit lim) are regarded as short, otherwise as slender and second order effects must be taken into account in design (EN, 1992; Mosley, et al., 2007). The slenderness ratio of a column bent about an axis is given as:

λ =                                                               (4.3)

Where lo is the effective length, ‘i’ is the radius of gyration (uncracked section) and ‘I’ is the second moment of area of section about the axis in consideration, and ‘A’ is the cross-sectional area of the column.

For braced columns;

lo =                                                (4.4)

For unbraced columns, the larger of:

lo =                          or                                                              (4.5a)

lo =                                                                                    (4.5b)

where k1 and k2 are the relative flexibilities of the rotational restraints at ends ‘1’ and ‘2’ of the column respectively. See EC2 (EN 1992) and Mosley, et al. (2007) for further reading.

Relative flexibilities k [EC 2: 5.8.3.2 (3) – (5)]

( =   If top & bottom columns does not contribute to column rotational restraint. But if top & bottom columns contribute to column restraint, k is given as:

+ (. Refer to EC 2: 5.8.3.2 (3) for their definitions.

As previously mentioned, EC 2 places a limit on slenderness ratio and this is given as:

λlim =                                                                              (4.6)

A =  and A can be taken as 0.7 if  is not known.                (4.6.1)

B =   and B can be taken as 1.1 if ω is not known.         (4.6.2)

C = 1.7 – rm and C can be taken as 0.7 if rm is unknown.                              (4.6.3)

n =                                                                                                   (4.6.4)

ω =                                                                              (4.6.5)

Where:

   = effective creep ratio

= design yield strength of the concrete

= design compressive strength of the concrete

= total longitudinal reinforcement area

NEd = design ultimate axial load in the column and rm is the ratio of first order moments at the end of the column. Refer to EN (1992) and Mosley, et al. (2007) for proper definitions.

Therefore, for a short column, λ < λlim otherwise as slender; whereas the code does not states any specific guidance if λ lim.

4.6 Comparison between the two design codes

As aforementioned that short column fails by material crushing and this failure depends on the column geometry, properties (concrete strength), creep, reinforcement area and strength, design ultimate axial load on the column and so on. It is not understood how these factors were accounted for when classifying column as short or slender in BS8110 apart from the effective height of the column, column size, and degree of fixity at ends as well as limiting values given for slenderness ratio.

It is clearly shown from equation 4.6 on how these factors were considered in EC 2 by placing an upper limit on the slenderness ratio.

4.7 Summary of on-going results from questionnaire:

About 44.44% were civil/structural engineers, 11.11% were professors/lecturers, 11.11 % were graduates and 33.33% were students.  Approximately 80% of them have used BS8110 for column design. About 90% of the respondents agreed that short column fails by material crushing and slender column fails by either material crushing or instability (buckling). The same number agreed that the term failure will be dictated by column geometry, concrete strength, reinforcement grade and design applied load on the column. However about 77% of them did not know how these aforementioned parameters were considered in the classification of column with BS8110.

Based on the findings from several literatures, thorough comparison of the two design codes and the results from current questionnaire, this principal conclusion was drawn.

  • Column classification should also be based on design axial load, concrete strength, reinforcement grade and area, aside from slenderness ratio (which is calculated from column geometry, fixity, end conditions and side restraints). These parameters were clearly considered in Eurocode 2 & ACI 318 (American code). However it is not yet understood how BS8110 incorporated these parameters.

Conclusion

Nigerian engineers have to start from somewhere. In this age of convergence, they must adopt a technology philosophy that promotes catching up. This can be accomplished if they understand the details of research and development carried out by others before them and adapt this to suite local needs especially in the area of standard.

References & Bibliography:

a)      British Standards Institution, 1997. BS8110: 1997 Code of practice for design and construction. London: BSI.

b)      British Standards Institution, 1990. BS EN 1990: Basis of structural design. London: BSI.

c)      British Standards Institution, 1991. BS EN 1991: Actions on structures-Densities, selfweight, imposed loads for buildings. London: BSI.

d)      British Standards Institution, 1992. BS EN 1992: Design of concrete structures-General rules and rules for building. London: BSI.

e)      British Standards Institution Shop, 2009. Available at : http://shop.bsigroup.com/en/Browse-By-Subject/Eurocodes/

f)       Concrete Centre, 2010.  Available at: http://www.concretecentre.com/codes__standards/eurocodes/eurocode_2/background_to_ec2/benefits_of_eurocode_2.aspx

g)      Falola, O. O., 2011. Investigation of Column Classification Parameters Survey. kwiksurveys.com

h)      Falola, O. O., 2010. Comparison between Reinforced Solid Column and the Equivalent Hollow Column. London: University of East London.

i)        Mosley, B.  Bungey, J. & Hulse, R., 2007. Reinforced concrete design. 6th ed. China: BookPower.

j)        Narayanan, R. S, et al. eds., 2010. How to Design Concrete Structures using Eurocode 2. London: Concrete Centre.

 

The author Olugbenro Falola is a PhD student at the Eastern Mediterranean University, Cyprus
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An assessment of the Nigeria’s power sector reform

…an engineer’s review of Nigeria’s power sector reform with suggestions

By Olatunji Ariyomo

June 15 2012 | Sheffield, England

1.0       INTRODUCTION

A distressing fact about Nigeria’s repeated attempts to get electricity production and distribution right is that such attempts have failed repeatedly. This is despite the infusion of several billion dollars thus implying that government or the overall leadership will to fund and get result may not be the problem but the capacity of sector leadership to know the right thing to do. Put differently, it appears that what is lacking is the capacity of sector leadership to know the right strategy and path that will most efficiently produce the required results as the usual paths have significantly failed to generate envisaged results. Between 1999 and 2012, it is estimated that the country expended over $25billion (USD) on her electricity subsector of the energy industry yet production alone hovered between 2,500MW and 4,400MW at any time during this period with citizens even willing to commend government if they noticed stable electricity supply beyond 3 hours in a single day. Some have described this as an unprecedented and extraordinary expenditure to procure darkness.

Sector leadership in the context of this paper refers to the authority of the Minister of Power of the federation and any such sub-authority that derives its power directly or indirectly from the federal minister. Can current sector leadership end age-long epileptic electricity supply? Yes. Put differently however, can current sector leadership end age-long epileptic electricity supply if it continues on Nigeria’s present path to reform? No. It would take a pyrrhic victory to record an instance of yes if the current course of its reform is not altered.

2.0       THE FAULT LINE
A major fault line in the ongoing reform lies in the decision to make the unbundling of the Power Holding Company of Nigeria (PHCN) the core of the policy thrust of government when it should ordinarily have been the reform’s obiter dictum ­– important, but not critical enough to derail or define a negative outcome for the entire agenda. Current strategy appears to put privatisation before sector liberalization, a situation akin to putting the cart before the horse. If the cart were ahead of the horse, what would drive the cart? Also, the reform’s current direction is the equivalent of making NITEL privatization the core of the policy thrust of government during the reform of the telecommunication sector. That singular error has succeeded in fortifying the position of PHCN workers and enhancing their capacity to slow down, make or even mar the entire process. This was a tactical blunder that was avoidable from a strategy point of view.

Simplified electricity distribution grid diagram
Simplified electricity distribution grid diagram

This strategic error draws strength from another technical and tactical misconception which appears to punctuate some of the responses from government’s team – that the electricity reform matrix does not perfectly mirror the telecommunication sector scenario because of the pervasive nature and present ownership structure of the national power distribution and transmission backbone required by the former. This is erroneous and only gains currency when the crucial nexus that connects both and the parallels that define the core elements that qualify as critical success factors are overlooked even when it is easy to recollect that the participating private investors at the time of telecom sector liberalization initially relied on an equally pervasive national telecommunication backbone exclusively owned by NITEL for the bulk of their call terminations which gave NITEL some business edge and cost termination advantage in those early days.

Essentially therefore, current electricity sustainability strategy suggests a flagrant disregard of the knowledge curve gained from the successful liberalization of the telecommunication sector. Again put differently, Nigeria is today experiencing energy growth penalties from lack of inherent capacity to see a nexus between her telecommunication industry and the electricity sub-sector of the energy industry which is chiefly the result of not being able to view her entire electricity sub-sector as a value system, that is, see the mobility and dynamics of the value chain inherent in the totality of electricity generation, transmission, distribution and management stream. Present resistance by sector unions and workers as well as the strategic delays purportedly engineered by entrenched ‘interests’ and the herculean tasks and politics of aggregating, positioning and empanelling new leadership for various companies so created from the unbundled PHCN are self-imposed burdens that should never have been the primary duty or concern of the government’s core reform team. One can only imagine with pity the quantum of effort, resources and energy being devoted to the management of these avoidable distractions!

The huge expenses sunk into schemes aimed at fattening and conferring the status of ‘juicy investments’ upon the 18 successor companies of PHCN to make them appealing so that they could qualify as most sought after brides on the international market could have served a better purpose if deployed as counterpart funds with reputable Greenfield investors to address the same layers of national challenge portfolio. By the time the actual dollar value pushed into the sector is factored into consideration (estimated at $16billion as at May 2007 and presently approximately put at close to $25billion), it is doubtful that returns (based on actual sales) from bids by winners of the 17 successor companies would fetch the Nigerian people a quarter of what t has been expended so far. Hence, as it is today, the myriads of explanations being lobbed at the public in explaining the rationale for increase in salaries and tariffs when the target companies are candidates for privatization would have been unnecessary even as an informed public would easily identify them as executive spins and a way to ensure that the new high tariffs make takeover more profitable for the new owners at the expense of the Nigerian people.

3.0       THREE GOOD STEPS LADEN WITH LANDMINES
Three good steps have however been taken by the present sector leadership. These are listed below:

  1. Creation of a bulk electricity trading company (BETraC)
  2. Reported decision to outsource management of national power transmission backbone to a reputable Canadian firm (Nigeria will pay agreed fees to this firm for this role).
  3. Reported empowerment of states and local governments (LGAs) to invest in production and distribution.

These could be described as the three best things that have happened since the commencement of the reform. It is however pertinent to observe that these three have again been laden with the usual in-built ‘landmines’ and ‘reform viruses’ that have come to define reform processes in Africa.

3.1 HIGHLIGHTS OF THE LANDMINES
Available reports on the bulk electricity trading company (BETraC), the contract for the management of the national power transmission backbone and the involvement of the second and third tiers of government in the sector point to the following as facts:

  1. BETraC is a government bureaucracy rather than a system driven or institution propelled initiative empowered with robust legislation to utilize transparent accounting system, settlement capabilities, and self governance structures using bilateral cooperation involving limited government but sizable private sector involvement. Unending bureaucracy with its attendant road-blocks is a crucial problem identified by this writer as an impediment to sustainable energy growth in Africa and a direct inhibitor of real private sector involvement. Maintaining this structure as part of the current reform path makes it sure booby-trap.
  2. It appears strongly that the responsibility for the management of the entire national power transmission backbone covering the 910,768 sq km of the nation’s land space is being outsourced to one single monopoly. This has corresponding impact on the reform’s capacity to act as stimulant for massive job creation, widespread private sector growth and knowledge transfer along the transmission corridor as well the potential to impede the promotion of fair consumer price. Paul K. Ogden described this as “creating a government sanctioned monopoly for a private company” (Ogden, 2009). It also does appear that rather than receiving payments from the manager, government of Nigeria would be paying the manager. This is awkward. It directly negates the entire narrative behind a private sector led electricity sub-sector while potentially leaving room for collusion and ultimately corruption.
  3. Reported empowerment of states and LGAs is superficial as it is solely within the limitation imposed by Section 14(b), Part II of the Second Schedule (Concurrent Legislative List) of the Nigerian Constitution which restricts state’s investment to “areas not covered by a national grid system within that State”.  Any strategic manoeuvring beyond this constitutional intendment without actually amending the constitution to remove restrictions imposed upon states and local governments would limit the capacity of states to be real owners of their investments, promote conflicts and open up future avenues for possible abuse which could result from socio-political differences in a nation as diverse as Nigeria. An improvement would be a model that would guarantee stronger legislative protection, fairness and sustainability for states and local governments as well as private investors. This can be accomplished by way of amendment of the extant regulation.

4.0       SUGGESTIONS
What is the guiding philosophy of the reform? Shouldn’t sector liberalization precede privatization? If yes, do we have evidence of nations that have followed similar direction to success? Can Nigeria learn any lesson from Ghana’s success despite retaining state-owned public electric utilities such as the Volta River Authority (VRA), Ghana Grid Company (GRIDCo) and the Electricity Company of Ghana (ECG)?

What the reform intends achieving must be clear – for instance, would adding more government money qualify as privatization? If it is ultimately necessary for the reform to receive the injection of public funds in order to jump start the process, would that not be better infused as joint venture funds into enterprises sponsored wholly and primarily by internationally acclaimed Greenfield investors thereby bypassing the politics of PHCN altogether? Ordinarily the reform should be aiming at ultimately eliminating government fund while bringing in private fund, eliminating government control while promoting system driven control mechanisms, eliminating secrecy while bringing in transparency, eliminating established interest and pre-determination in order to bring in equity, fairness and spontaneity.

This writer empirically estimated Nigeria’s urgent electricity requirement to be a minimum of 55,694.50MW in order to merely get by. The nation needs more for optimum power stability. Putting the arrays of complex options required to properly govern the sector in context requires thinking outside the box as well as looking back to take advantage of what we did right in the past.

Among other considerations, the focus of government’s reform should include:

  1. Strategy for jumpstarting attainment of reform objectives. It is baloney to advance that because Nigeria has suffered electricity deprivation for 50 years, it must ultimately take another 50 years to get it right. No. A good sector reform strategy will lead to sustainable electricity that the people can begin to tangibly experience in the cities within 2 years.
  2. Strategy for technology transfer and knowledge enhancement
  3. Strategy for massive job creation (taking advantage of item number 2)
  4. Strategy for sustainability and ensuring reform cannot be truncated (robust legislation, sector leadership and masses’ support)
  5. Strategy for massive revenue generation for the people of Nigeria (government should earn payments – taxes, levies, rents etc – and not the other way round)
  6. Strategies for correcting the identified ‘landmines’ enumerated in 3.1.
  7. Strategy that would lead to the reform benefiting from contributions of professional bodies and other sector stakeholders. Sector leadership cannot be an island of knowledge. As part of wide consultation (before decisions are taken) the reform would benefit more if subject matter experts from the various professional organizations are allowed to make input. This is the tradition in the United Kingdom and the United States.

Getting Nigeria’s quest for steady electricity right requires the appropriate strategy, thorough industry expertise and objectivity. There is no such place where Nigeria’s current model of financially fattening up a moribund and non-performing government agency in order to sell it to private sector handlers does have a successful precedent as a cost effective model. It could only further promote corruption as well as serve as an opportunity for local elites to apportion national utilities among themselves under the guise of privatization.

In conclusion, Nigeria can get it right with sustainable electricity, put the years of epileptic electricity supply behind her and join the rest of the world in the pursuit of renewable energy alternative. This is however only possible if the nation is doing the right things.

Paper authored by,
Engr. Olatunji Ariyomo

Physical planning approach to reducing fatalities and managing aircraft disasters in Nigeria

By Olapeju Olasunkanmi

Social networking sites and their paraphernalia of smart phones have once again proven to be most effective in the delivery and sharing of facts; real time data; half truths; falsehoods; political mudslings,and cyber spatial assaults ,in the unfortunate Dana Plane mishap that happened last Sunday. From the eerie pictures, real time video files, tweets and re-tweets of the names on the manifest of the crashed plane to the very revealing details of John I. Nnorom-a former Executive Director for finance at Air Nigeria who warned Nigerians to stop flying Air Nigeria until they were sure its planes are properly maintained, the information appetite of a highly dynamic blogosphere population that will no longer wait to get its news from the dailies of the following day was satisfactorily met.

A rescue worker walks past the wreckage of a plane in Lagos, Nigeria on Monday, June 4, 2012. (AP Photo/Sunday Alamba)
A rescue worker walks past the wreckage of a plane in Lagos, Nigeria on Monday, June 4, 2012. (AP Photo/Sunday Alamba)

But shallow and mischievous minds will not rest. They will take advantage of the insufferable and curious mind state of the public to reducing the significance of the national introspection that should attend such national disasters to mere politics. This morning, the tweets I woke up seeing dominating the cyber space centered on the alleged closure of the nations’ airspace for Madam Goodluck Patience on that fateful Sunday. They are obviously the handiwork of such elements that do not know beyond politics. Unfortunately, the toxic tweets will spread more virally and linger more on walls, despite the fact that disclaimers have been logically written to refute them. My grouse with such misinformation is that they add to the toxic content in the minds of the ignorant and devilishly potent in hypnotizing professionals and technocrats who should rather be thinking of how to dispassionately but creatively fashion out solutions to our present challenges beyond regurgitating the old stories we are used to.

Now, let me state clearly that this piece is not about holding brief for the Government of Goodluck Jonathan,whose general performances in office have been short of expectations, for obvious reasons that mostly border on sabotage and the everlasting corruption endemic in our development delivery procedures across all tiers of government. It is rather about x-raying the problems of the aviation sector-especially aircrafts accidents beyond the platitudes of human errors,technical faults and systemic corruption that have been mainly established as the causative factors of air plane crashes in Nigeria,and presenting a wider professional perspective in fundamentally ameliorating the aviation challenges that appear to now abide with us forever.
In a recent study by commercial aircraft maker Boeing,of the 364 plane accidents that globally occurred between 1998 and 2007,87 were caused by technical or human error while landing,and 11% of the total 5147 fatalities were due to accidents borne out of problems in landing. According to the report titled ‘’statistical summary of commercial jet air plane accidents’’,1959 -2008,about 12% of plane accidents take place during takeoff,while 8% during the plane’s initial climb and 12% between the period of climb and cruises, accounting for 45% of total fatalities. While descending ,there were only 5% of mishaps whereas 10% of accidents occurred during the flights initial approach, and 9% during the final approach before landing,resulting in about 27% of total fatalities during the observed years.

The foregoing is to make the point that plane accidents are not only restricted to technical deficiencies that result in crashes during cruising, but that accidents due to taking off and landing of aircrafts are also statistically significant. This is of course is a major consideration in the locational criteria for airports in saner climes. It is definitely the strategic rationale behind the siting of 45 of the 50 busiest airports in the USA in locations that are contiguous to water bodies. Here in Nigeria,airports are sited without recourse to considerations about environmental impacts that relates to noise,resonance effects,and collateral damages and destructions that attend plane crashes. They locate in the heart of the cities,while coastal areas are left to either erode,and sometimes reclaimed by the rich to erecting posh buildings that dot littoral skyline,and command incredible market values.

What am I saying? There is a provable chance that we would have had survivors in the last Sunday’s Dana air mishap had Agbado –Iju,where the crash occurred, which is just seconds away from MMA, been within the radius of a coastal catchment for MMA. Global airplane water crashes statistics corroborate my reasoning. The story of the 155 passengers and crew of Airbus A320,a US airways flight that remained intact after crashing into the Hudson river,in Newyork on 9th January 2009 still remains a legendary testimony that owes more to rational planning and pilot’s ingenuity(let me be generous). We also have fair survival rates of 20 of 39 on board and 59 of 50 on board for Tuninter 1153(an ATR 72,which ditched off the silicon coast after running out of fuel in 2005) and Garuda Indonesia flights(a Boeing 737 which ditched into a river in Java island) ,respectively. As a matter of fact,a recent study done in the US puts ditching(intentional and controlled water landing of an aircraft) survival rate at 88%,though factors like the size of aircraft,type of waterbody for landing,and the speed at which the pilot eases the craft into water also account for survival rates.

Like in many cases that we wound around the person of the President whose face we don’t like anymore,despite our knowledge of the fact that they have existed long before he came on board, the problems in the aviation sector are beyond superficial political dressings . The absence of a viable framework for national physical planning over the years, and the unseriousness of state governments in proactively preparing and implementing regional,urban,local,and subject plans in times past(since the supreme court judgment In the case between Lagos state and the FG now makes the monopoly state governments have in respect to land management and control lucid)is what is responsible for proliferations of major incompatible land uses and indiscriminate construction of buildings in special areas in our cities.

While we wait for the outcome of the black box investigations, and ruminate on how to improve aviation regulation and quality control, and reduce corruption in that sensitive sector, we should also consider the re-ordering of airport locations in ensuring better disaster prevention and management. It is not enough for planning authorities to merely restrict planning standards within a particular radius from airports to building heights regulation and telecommunication mast control. Rather, approval order for airports should emphasize strictly on littoral locations and several miles radius away from built up area. The coastal habitats and mangroves that will be left if such an approval order is sustainably implemented could also represent a gain in environmental management, eco-system and biodiversity protection, and afford the banking of vegetation-carbon sinks to help mitigate global warming. Planning authorities must be empowered to ensuring that their development control powers are not compromised. While government should seize this opportunity in facing the issues squarely, and achieving spatial re-engineering of our cities, the public should also be more sensitized that urban management is not just about scoring political points and making huge tax gains, but chiefly about the greater good of public safety, health, and environmental sustainability.

Who Should Pay For Higher Education?

By Ayodeji Abiola

BASIC EDUCATION, which is suppossedly free in Nigeria ends at the junior secondary school – the first 9 years of schooling. Privately owned schools on their parts are not free and it could be argued that the free education offered in the publicly owned schools is not of high qualitative value compared to the paid ones. At the basic education level, the primary benefit of learning is directly to the student. The lettered citizen will be able to conform reasonably well to the demands of the 21st century society without being a societal misfit. This is perhaps government’s motivation for paying for basic education, especially when cost could have been a hindrance.

 

Image by rmsbunkerblog

Beyond the basic level, the next years of schooling, three spent at the senior secondary level and then at least two years at the post-secondary level molds a learner into a professional in his chosen career. Presently, post-secondary education has become elusive to many citizens for various reasons. These reasons usually include cost and inadequate spaces at the schools. The cost factor is especially worrisome given that many institutions are publicly owned either by a state or the federal government and attended mostly by students from non-high income earning households. As such, these institutions do not usually charge high fees compared to the privately owned ones mostly attended by learners from more affluent households. The low earning capacity of the publicly owned institutions from low student’s tuition coupled with inadequate funding from the government exposes them to the plague of funding crises. The quality of learning from such poorly funded schools will no doubt impact negatively on the job such students take on. I cannot fully address the need for increased government funding for publicly owned institutions in this piece. However, I find a probable funding source for these institutions in the student’s potential employers.

I can boldly posit that poor quality of education is detrimental for productivity in the job market. Furthermore, such an unproductive job market is injurious to the economy. The extent to which one may argue on the danger of poor education to the overall society is a food for thought for readers of this article. The question at this moment is, “should employers then, go all the way to pay for quality education for students especially at the post-secondary level?” Professor Will Roberts and six other professors at McGill University in Quebec, Canada who recently wrote a newspaper opinion in solidarity with their striking students will answer this question in the affirmative. They argued that the university is no more than a training ground that employers are lucky enough to get employees to pay for1. The employees in this case are the students of the today who will no doubt become employees after they graduate. Technically, students are already on the job, they argued.

My answer to the question is also, “Yes, employers should start taking responsibilities in the funding of higher education in Nigeria”. If poorly educated graduates are continually produced, employers bear the brunt; well-educated graduates are the employers’ gain. Presently, top employers with deep pocket in Nigeria already re-train graduates before they are hired. For example, the Dangotes Industries established the Dangote Academy, which re-train graduates for 12 months before they are employed. According to Haruna Adinoyi, the head of the academy, “…most of our graduates are not employable”2. Nigeria’s largest oil corporation, Shell also run similar 12 months program called the Shell Intensive Training Program (SITP) for fresh graduates before they can be considered for employment. These are organizations, which are obviously established to maximize profit. Therefore, they would have preferred to transmit the money spent on these re-trainings into their annual profit balance, if it were not necessary and crucial for their successful operations.

To summarize and close, if quality education is important for quality job performance and by extension the economy; if majority of students in our higher educational institutions are largely unable to access quality education; if this lack of quality is partly but significantlyhinged on poor funding occasioned by low earning by the public institutions, perhaps employers, particularly the ones with deep pockets who are major beneficiaries of education should consider paying for higher education.

In my next article, I will discuss ways that employers (organizations, corporations, etc) should pay for higher education in Nigeria. Meanwhile, why don’t you leave your opinion/feedback below?

1 http://dailytimes.com.ng/article/dangote-splashes-n1-billion-universities
2 http://www.montrealgazette.com/news/Letter+Tuition+hikes+solve+what+ails+system/6501275/story.html

Image by rmsbunkerblog

 

 

About author: Ayodeji Abiola

Ayodeji is an Engineer and an Educator. He has a Bachelor’s degree from the Federal University of Technology Akure and a Master’s degree from University College London. He is currently a researcher and a teacher at Western University, Canada. As a trained educator, Ayodeji is interested in understanding how best students learn, especially students taking science and technology subjects. He will be chronicling his findings on his online portal for Teachers. He is interested in their applications to the Nigerian higher educational institutions, given his understanding of the many issues confronting them. Ayodeji was a collegiate member of the Junior Chambers International, a worldwide federation of young leaders and entrepreneurs where he developed many of his leadership instincts. He is presently the team coordinator of I am Nigerian – a platform for Nigerians bent of showcasing the positive images of the country to a global audience while leading the way out of many of the present societal quagmires. Social Media links Twitter: http://www.twitter.com/dejiabiola Facebook: http://www.facebook.com/abydayjee Blog – for Teachers: http://edu.ayo-abiola.com BB PIN: 228D8D6A

Paradigm shift in university ranking: rates ‘best’ countries, not universities

BY AGENCY REPORTER

A novel system of ranking 48 countries and territories said to be the ‘best’ at providing higher education was published on Friday by Universitas 21, the 15-year-old global network of 23 research-intensive universities.

The latest ranking system makes a welcome change from the efforts of a growing number of commercial organisations and other groups to rank individual universities according to their various abilities.

The top 10 countries claimed to be best at delivering higher education are the US, Sweden, Canada, Finland, Denmark, Switzerland, Norway, Australia, The Netherlands and the UK.

Thomson reuters image

The Universitas 21 results were launched at an event at Lund University in Sweden, where the ranking system was described as a “benchmark for governments, education institutions and individuals”.

“It aims to highlight the importance of creating a strong environment for higher education institutions to contribute to economic and cultural development, provide a high-quality experience for students and help institutions compete for overseas applicants,” according to a release from the network.

The rankings were produced by researchers at the Melbourne Institute of Applied Economic and Social Research, University of Melbourne.

They reviewed the most recent data from 48 countries and territories across 20 different measures grouped under four headings: resources (investment by government and private sector); output (research and its impact, as well as the production of an educated workforce to meet labour market needs); connectivity (international networks and collaboration, which protects a system against insularity); and environment (government policy and regulation, diversity and participation opportunities). Population size is also taken into account in the calculations.

The researchers found that government funding of higher education as a percentage of gross national product was highest in Finland, Norway and Denmark. But when private expenditure was included, funding was highest in the US, Korea, Canada and Chile.

Investment in research and development was highest in Denmark, Sweden and Switzerland, and although the US dominated the total output of research journal articles, Sweden was found to be the biggest producer of articles per head of population.

According to the Melbourne team, the nations whose research has the greatest impact are Switzerland, The Netherlands, the US, the UK and Denmark. While the US and UK have the world’s top institutions in rankings, “the depth of world-class higher education institutions per head of population” is best in Switzerland, Sweden, Israel and Denmark.

Countries with the highest participation rates were listed as Korea, Finland, Greece, the US, Canada and Slovenia, while those with the largest proportion of workers with a higher level education were Russia, Canada, Israel, US, Ukraine, Taiwan and Australia.

Finland, Denmark, Singapore, Norway and Japan had the highest ratio of researchers in the economy.

The U-21 report says international students form the highest proportions of total student numbers in Australia, Singapore, Austria, the UK and Switzerland. International research collaboration is most prominent in Indonesia, Switzerland, Hong Kong SAR, Denmark, Belgium and Austria.

China, India, Japan and the US rank in the bottom 25 per cent of countries for international research collaboration. In all but eight countries, at least 50 per cent of students were female, the lowest being in India and Korea. In only five countries were there at least 50 per cent female staff, the lowest being in Japan and Iran.

The U-21 report says the results represent an initial attempt to rate national systems of higher education for a relatively large number of countries covering different stages of economic development. While this widened the value of the exercise, it made the data collection more complicated.

The researchers hope the rankings will encourage improvements in data, both for included countries and to enable them to extend the range of countries in future updates.

“While there are a number of international rankings of universities, commencing with the seminal Shanghai Jiao Tong index in 2003, less effort has been put into quantitative rankings of national systems of higher education,” the report states.

“A notable exception is the policy brief for the Lisbon Council, in which Edereer, Schuller and Willms in 2008 developed a university systems ranking for 17 selected OECD countries.

“The international rankings of universities emphasise the peaks of research excellence. They throw no light, however, on issues such as how well a nation’s higher education system educates all its students, possessing different interests, abilities and backgrounds.

“Even for universities, [Jamil] Salmi notes that ‘what happens in the institution alone is not sufficient to understand and appreciate the full dynamics of their relative success or failure’.”

The lead author, Professor Ross Williams at the University of Melbourne, said that in a globalised world, a strong higher education system was essential if a nation was to be economically competitive. Williams has previously produced rankings of Australian universities.

“While there are a number of well-regarded global rankings of individual institutions, these don’t shed any light on the broader picture of how well a nation’s system educates its students, the environment it provides for encouraging and supporting excellence,” he said.

“Students choose countries to study in as much as individual institutions and the Universitas 21 ranking offers clear data to support decision-making.”

Source of this Report is World University News

RESEARCH & DEVT: Nigeria makes electric car, power bike

By Ebele Orakpo

As the issue of environmental pollution rages and nations are seeking alternative energy sources devoid of carbon emission, Nigeria, as a major oil-exporter, will be hard hit if nothing is done. To this end, Professor James Omoleye of the Department of Chemical Engineering and former Director, Centre for Research, Covenant University, Ota Ogun State, began a series of researches with his team which culminated in the making of an electric automobile and a power bike. In this chat with Vanguard Learning, Omoleye says Nigeria is far ahead of some nations in this area. Excerpts:

Electric car made in Nigeria

For Professor James Omoleye: “Nigeria is an oil-exporting country and today, the green revolution which is trying to promote mobility without atmospheric pollution, is driving the whole world to look for alternative way of transportation and that has led to some research on electric automobile.

“Electric automobile is not a new thing. In fact, somebody said it was there before fuel combustion engine came but was not efficient at that time. The use of petrol engine took over because it was more efficient. Now, because of pollution and electronic advancement which has made electric automobiles very efficient, there is a kind of shift. People want to look into electric automobile as a means of mobility.”

Reducing pollution by 80 per cent:
If you can reduce the amount of pollution in the air coming through automobiles, then you would have reduced pollution by almost 80 per cent and life on earth will be safer. So there is now a tendency to move towards electric mobility, not only automobiles, even boats and trains. In advanced countries, the number of electric automobiles in use is on the increase.

Of course, many are now using what we call hybrid which is electric engine and fuel combustion engine together. This reduces the amount of fuel you burn. But the ultimate is electric automobile so that we can do away with pollution of the atmosphere. That is already gaining ground now in countries like the US and China. In China, electric bikes are common and a number of their taxis are electric. So very soon, electric mobility will take over from fuel combustion.

Electric car and power bike
“I started in 2005 to research into electric automobiles. Our electric automobile came on the road on July 1, 2010 and I have been using it but not continuously being the only one we have made, we don’t just use it any how. What we did was to buy a fuel combustion engine car, removed the engine and designed and assembled the electric engine inside it.

Electric Power bike made in Nigeria

We have also advanced in the sense that the first one we did, we brought in the parts but between then and now, we have worked on two of the three major components which are the speed regulator and the charging system because after running about 70km, you charge for six hours continuously.

Today, we have successcfully designed and assembled our own speed controller. We have tested it by mounting it on a four-wheel cycle and it is moving very well. We have almost perfected the charging system. Of course, since September 2007, we have been able to come up with a charging system but it was not as efficient as what we have now. We are replacing the one we did in 2010 with the one we have now which is a lot faster and more reliable.

The only component we have not started to do here is the electric motor itself. But that is not a big deal because there is no vehicle company that manufactures all the parts. You get some parts from one company and then you design some,” said the professor of chemical engineering.

Ahead of many nations
“We have gone very far and I think we are ahead of many other nations. We are ahead of Australia because they are not yet making those things and they are the ones in the forefront of electric automobile. An Indian man that came for business in Abuja saw my programme on television and came all the way to look for us here.

He said he came because they also have interest in electric automobile and that his company was given approval by the Indian Government to start introducing electric mobility into their taxi system. By the time we talked, I found out that we are ahead of them. They don’t make any parts and yet, they have got to the point of changing their taxi system to electric automobiles but we have gone to the point of producing the controller and the charger,” he said.

What Nigeria must do

Prof Omoleye - maker of electric car
Prof Omoleye - maker of electric car

“Even as an oil-exporting country, we cannot help encouraging something that will not consume fuel for two reasons: One, we are not making even the fuel combustion vehicles, we are importing them so if in the next five or six years the whole world is changing into electric automobile, you say ‘oh we are not going to go into that,’ you will be forced to import the electric automobiles they are making and good enough, petroleum is not only used for fuel combustion by automobiles, there are hundreds of products today that are made from petroleum just that Nigeria is only focusing on exporting crude.

Our clothes are from petroleum. When you talk of petrochemicals, the basic raw material is petroleum. So all we need to do is for us to try to focus on petrochemicals and start to divert the crude we cannot export to produce other things that can be exported.

Of course we will still be selling our crude but not as much as before. This is one reason why we should not say we are not going to encourage electric automobile production. Two, for now, we are only importing vehicles, when you join the race of electric automobiles manufacturing; you become one of the countries that will be earning revenue from exporting your own electric automobiles.

So while the fuel is not used for fuelling cars again, generators for the charging the automobiles will still be using fuel . You will now join them in also exporting vehicles and so you can increase your revenue base more than what it was before. We have gone very far and I think we are among the top five countries,” he noted.

First published in the Nigerian Vanguard May 10 2012.

Nigeria, plagued by arrested development

By Ugochukwu Raymond Ogubuariri

Only recently, the President of Nigeria’s Senate – David Mark, had, while delivering his Eid-el Maulud message, stated as follows: “I will defend Nigeria’s unity with the last drop of my blood.” Few weeks earlier, the former military Head of State, Ibrahim Babangida, had equally announced quixotically that “I will call a tailor, take my measurement, get back into khaki to go and fight even at 71.” In apparent reference to the indivisibility of the country, the former dictator had hinted succinctly that he would also be willing to spill his blood to maintain Nigeria’s unity.

To all intents and purposes, it would appear that Nigeria’s governing (and out-of-power) elite are commonly united in their conviction that the only expedient way to dramatize their commitment to the country’s fragile unity is by corrupting the citizenry with the “vow” of doing the impossible. While it has become fashionable for Nigeria’s rulers to luxuriate in the fantasy of pledging to fight and die in defence of the country’s unity, the citizens, on the other hand, seem to have become patronizingly bewitched by their rulers’ heroic pledge that they hardly raise any interrogation about the character of “Nigerian unity,” its real and supposed beneficiaries as well as the political and economic interests which it is configured to serve.

Some elucidation on the whole idea of “unity” will be in order at this juncture since it has become one of the most abused and vulgarized concepts in Nigeria’s political discourse. The term “unity” basically refers to mutual agreement; a state of oneness; or the quality of completeness. It is a situation in which a group of people work together agreeably for the achievement of a particular purpose. It therefore logically follows that the unity of an entity can only be functional if it is fashioned by consensus, driven by purpose and predicated on social inclusiveness.
One of the salient contradictions of Nigeria’s unity is that it is neither consensual nor purpose-driven. It is a unity that is constituted as an end in itself rather than a means to an end. At such, it hardly offers its citizens any plausible sense of belongingness, no prospect of self-actualization and, worst of all, no allowance for equity and social justice.

Nigeria expresses itself as a conundrum that stands in diametric opposition to the solemn interests of ordinary citizens. Invariably, it mandates a relentless erosion of their humanity. It is therefore not surprising that after 51 years of political independence (and much lengthier decades after its illegitimate procreation by a British adventurist – LordLugard), Nigeria’s individuality and statehood as an independent, sovereign nation is still largely embryonic, inchoate and indeterminate. Nigeria has remained essentially a country marooned in the wilderness of truncation, arrested development and aborted dreams.

Politically, we have contrived and nurtured a brand of politics which renounces the norms of civilization and embraces the lure of barbarism. We have promoted an idea of politics that is literally constituted as warfare and prosecuted with every conceivable weapon, including bombs! With corruption so deeply entrenched and leadership incompetence so pervasive, the country has suffered progressive retrogression and has become a classic metaphor of a stillbirth. While pretending to be united in one indivisible entity, we have enshrined the practice of perceiving some sections of the country as “certified infidels” ineligible to aspire for plum positions in the land, including the Presidency.

Socially, Nigeria still satisfies all the requisite attributes of a country that is divided against itself. In today’s Nigeria, it is still inconceivable that an average Ibo trader will choose to reside in any part of the north to ply his trade without inviting the unpleasant animosity and vengeful wrath of bigoted jihadists. By the same token, a civil servant of Yoruba origin who has spent 20 years working in Abia State ministry would count himself extremely lucky if he eventually escapes the repatriation train of Governor T.A. Orji in fulfilment of his “indigeneship” policy.

Economically, the story is even more pathetic and appallingly so. Nigeria, the once revered giant of Africa, cannot boast of even the capacity to manufacture “wheel-barrow bolt.” The only preoccupation of its rulers is the appropriation and embezzlement of crude oil proceeds which, invariably, accounts for over 95 percent of its foreign exchange earnings. The manufacturing sector has become massively decimated that it currently accounts for a paltry 2 percent of the country’s GDP while agriculture is still largely rudimentary and in utter neglect. In the area of education, social infrastructures and security, the story is no less pitiful.
So, when the likes of IBB and David Mark profess their sanctimonious commitment to Nigeria’s unity and its inviolability, are they necessarily doing so because they consider themselves more Nigerian than the rest of us?

Of course, it can’t be. When properly contextualized, they are merely saying so as a way of reminding all of us that “we should not kill the goose that lays the golden egg for them.” In the particular case of the Senate President, it has to be taken into account that he presides over a Legislature that is reputed to be the most expensive (both in remuneration and in corruption) in the entire world. Needless to remind Nigerians that the salary and allowances of an average Nigerian Senator dwarfs that of an American President and would certainly inflict Barack Obama with a sense of nostalgia for his African ancestry.
If so, why would David Mark not be willing to die and spill his blood in defence of Nigeria’s unity,knowing fully well how richly buttered his bread is? Undeniably, if I were to be in his shoes, I would not only spill my blood, but also my urine, my sweat, my saliva and, indeed, everything in my body that is prone to being spilled.

The course of Nigeria’s unity will be better served if the Senate President can muster the moral decency to slash the obscene salary, allowances and perks of his office (and those of his colleagues) by at least 50 percent. Also, the notion of one indivisible Nigeria will translate into a viable proposition if the Senate Presidentcan bestir himself to the task of leading a National Assembly that takes seriously the enthronement and active enforcement of accountability, transparency and zero tolerance for corruption in the conduct of government affairs, especially, by the Executive arm and its various agencies.

Under the watchful eyes of David Mark and the Parliament, corrupt government officials and their cronies in the private sector ruined the nation’s oil industry and converted huge sums of monies meant for subsidization into “a windfall from National Lottery.” Under his leadership, the country’s choicest economic assets were hijacked under the dubious guise of privatization and parcelled to privileged individuals at scrap value. Any idea of national unity which glorifies corruption, impedes equity, fairness and justice, violate the sovereign interest of ordinary Nigerians and places his survival in serious jeopardy can neither stand the test of validity nor elicit the acceptance of Nigerians. At best, it will be received as a meaningless and useless idea!

How To Deregulate Downstream Sector Efficiently, By Esele

Being a presentation of President of  Trade Union Congress of Nigeria (TUC), Comrade Peter Esele, at a  public hearing organised by the House of Reps on the fuel subsidy removal policy on Monday, Jan. 23.

Introduction

THE government is implementing a policy to remove the subsidy on Petroleum Motor Spirit (PMS) because it argues that the level of subsidy being paid by government is not sustainable particularly as subsidy payment now exceeds the annual capital budget of the Federal government.

Government also makes the case that it is important to deregulate the downstream sector of the petroleum industry and by implication allow market forces to determine the pump price. This will enable government to completely get out of the sector so that it can be fully market driven. It is easily agreed that the subsidy that government declares as paid annually is extremely high and not sustainable without it busting the budget. It is also not indisputable that deregulation of the downstream sector will encourage the investment on new refineries and product reception and Distribution infrastructure with all the attendant benefits. However, deregulation and or subsidy removal have to be planned and executed very carefully so that the desired objective is attained.

A shoddy implementation will mean a deplorable setback for all the stakeholders in the industry. This is why my humble self,  the TUC that I lead and the NLC continue to stand firm that government must have a definitive agenda for this programme in order to guarantee its  complete success which will consequently establish a solid foundation for economic growth of the nation.

It should be established from the onset some of the imperatives that are ignored or swept under the carpet by those who are less informed that blur the debate on this issue. Establishing clarity on these issues will make it easy for government to craft the road map towards the efficient delivery of the programme and to earn the people’s trust through a transparent compact that delivers positive dividends to the people. These imperatives are:

Subsidy on petroleum products is removed by a price increase. It is therefore imperative that the level of subsidy is transparently established otherwise the people will see the policy as efforts by the government to under change them;

Price increase does not necessarily equate with deregulation. Deregulation at a point where there is no subsidy on PMS, for example, will need to be underpinned by competition which is the only way to achieve cost control and efficiency in the sector;

Deregulation that jerks up the price a product but is not underpinned as discussed above amounts to a punitive price increase that transfers the burden of paying the subsidy from government’s pocket to the private pockets of the citizens;

A Price increase that happens outside a truly deregulated environment means that the head of the snake is scourged; the snake is alive and will strike another day. This means that a price increase not backed by deregulation will cause another subsidy debate and skirmish further down the road. And this is not in the interest of all the stakeholders.

If the subsidy is not a real cost that is efficiently incurred but represented by inefficiency and or corruption, the people still end up paying for it in the long run as it becomes a direct opportunity cost of capital formation and a discount of the quality and level of services that the government delivers to the citizens: and

If the people end up paying, in the final analysis, directly from their private pockets at the pump station or by the budget deficiency that it creates if the government pays, it become important that the people should reject the inefficiency and corruption that is necessarily embedded in the price irrespective of who is paying

The people therefore have an inalienable right that the government cleans up the mess before the policy of subsidy removal or deregulation is implemented.

The conclusion to be drawn from the above is that deregulation of the downstream sector is the answer. If such deregulation is properly handled in an atmosphere where the inefficiency and corruption are expunged and a competitive environment is created, the result could be a price reduction and not a price increase. It is this upside potential to have a ‘Win Win’ deregulation which a properly planned and efficiently implemented deregulation engenders by delivering a price reduction rather than a price increase that is the focus of this paper.

 

Establishing the level of subsidy

The Petroleum Product Pricing Regulatory Agency (PPPRA) was set up by Act No 8 of May 2003 with the primary mission to eliminate the effect of volatility in international crude oil and products and stabilize domestic prices. It also aimed to guarantee effective products availability and distribution nationwide. The Petroleum Support Fund (PSF) Scheme was set up in 2006 to support the PPPRA mission and the PPPRA had the objective to entrench transparency and accountability in the administration of the Fund on petroleum products subsidy.

In administering the Fund, PPPRA instituted a pricing principle which in its own website is a principle “that engenders healthy competition among industry operators, encourages investment and the maintenance of international standards and practice “. In support of this principle, PPPRA created a template to determine the Landing cost of products.

This Landing cost is applied against the Government fixed ex-depot price of the petroleum product. The difference between the landing cost and the ex-depot price of imported petroleum products is the Subsidy.

By all accounts, the PPPRA has completely failed in its stated objective in the sense that

  •  The template is compiled with bloated costs that discourage competition, the pursuit of efficiency and cost control. Rather it is based on total cost recovery and opaque operations thereby encouraging massive corruption and padded economic rent both of which continuously increase subsidy;
  •  PPPRA has been unable to incontrovertibly establish the quantity of products consumed upon which subsidy is paid. Quantity consumed is a fundamental item of the subsidy equation. Failure on this is a confirmation of PPPRA’s failure on its stated mission; and
  •  To the extent that PPPRA does not insist that subsidy is claimed on confirmed consumed products, PPPRA is thereby, perhaps by collusion with the importers, paying subsidy on products that were never delivered, stolen and lost products and products that are round tripped.
  • It is because of the above that we believe that the PPPRA template is deceptive, anti competition and anti-people. This is why we call its Landing cost template ‘a weapon of mass destruction’.
  • In a regulated environment, the first step towards the injection of efficiency into operations is to have a robust template that encourages operators to compete. The present template does not do this.

 

The Adverse Impact Of PPPRA Template

In a rentier environment, which the PPPRA template entrenches the price that is paid for petroleum products is represented in the following equation:

Actual market price = Market driven cost + inefficiency + corruption + guaranteed profit

It should be borne in mind that the Actual market price is the PPPRA Landing Cost ,which, in itself, is represented in this equation:

Actual market price (Landing cost) = Pump price + subsidy

The above equation clarifies, the impact of inefficiency and corruption on price;

It is needless waste of resources for either government or the people to pay a corruption or inefficiency laden price for petroleum products ;

It behoves on the government to eliminate inefficiency and corruption from Landing cost of petroleum product

A removal of subsidy or deregulation without first addressing the inefficiency and corruption will only transfer the burden to the people and embolden the rent seekers to escalate their activities since the people do not possess the force that government has; and

Deregulation that does not entrench competition will amount to an oligopolistic environment where only the rentiers profit.

 

Creating a competition oriented template

The PPPRA template was crafted from the NNPC point of view and was therefore based on the following faulty parameters

That all costs should be recovered with a guaranteed margin. Of course, NNPC operates an inefficient downstream sector. This accounts for the over padded costs in the template. There is therefore no incentive for operators to be efficient. Those who strive to be efficient are awarded excess profit. This assumption, which forms the foundation of the template must be reversed.

NNPC operates across the entire downstream sector. Consequently, the template views costs holistically from a single source point of view. This is absolutely wrong and does not represent the activities in the downstream value chain. We consider this to be a wrong approach. The various segments of the business do get outsourced and should be considered as such. For example, NNPC outsources the importation process whilst marketing companies outsource the transportation and retail (dealership) element of product marketing.

In an outsourced basis, the most efficient parameters viz volume throughput, costs or rates should be used as standards and not the worst parameters as currently represented by a template that struggles unnecessarily to make NNPC whole. The standards should shut out the worst performers instead of their inefficient standard being applied as the standard for all.

Following from b above, the PPPRA template applies extensive standard costs in its input. A standard is a norm and whatever is considered normal can be used as a standard. The assumed standard level has a salutary effect on costs and their relationship to unit cost in a cost template like is applied by PPPRA because the theoretical standard set for a level of operations regarded as the ideal or maximum level of efficiency can have a distorting effect if the standard is not set at the correct level. Such a standard will not help to control costs, adequately measure or enhance efficiency and above all, will not promote cost reductions when it is absolutely necessary to do so.  An inadequately determined standard which turns out to be incorrect will not only distort unit cost but lead to inefficiencies.

One of the key issues that ought to have been discussed as a prelude to subsidy removal is therefore the appropriateness or otherwise of the standards that have been applied all through the template. It is still of considerable importance that this should be carefully and extensively reviewed.

An empirical review of actual costs in the template should be carried out in order to reduce the landed cost of products. The actual cost of each element should be properly determined, empirically, in order to ensure that the allowance that is given is adequate and not unnecessarily excessive to the detriment of the government and the consumer.

 

Eliminating inefficiency and corruption from product importation mechanism

It is imperative that the government set out a transition period of not more than six months when it will take concrete actions to considerably reduce the inefficiencies embedded in the importation mechanism as a prelude to complete deregulation of the downstream sector.

The steps towards achieving this are set out be

  1. Direct NNPC to dedicate all the crude that it cannot refine to offshore processing. This will ensure that NNPC is not selling this crude for its own account. Most importantly, it will ensure that refinery gate prices based on ‘net back’ pricing is obtained
  2. Eliminate guaranteed margins across the product importation and distribution chain – Government should, as a first step towards deregulating the downstream sector, scrap all guaranteed margins in the template including financing cost.

The different segments of the business that comprise the value chain should be clearly identified and the operators in each segment be made to negotiate their margins. The most efficient or standard cost of the item, empirically verified by PPPRA should be used as template input until the sector is fully deregulated by which time margins will become transaction based and built into market determined pump price. This will drive efficiency in the sector.

Sweep and/or dredge the shipping channels

The import jetties have draft limitations which restrict the size of vessel that can be moored alongside the pier. The draughts of the jetties that are used for the importation and marine product movement are: Atlas Cove (11.0m); Apapa (6.4m), Warri (7.4m); Okrika (9.4m); and Calabar (6.4m).

Consequently larger vessels, typically of average size 45,000 Metric tonnes berths at the Single Point Mooring Buoy (SPM, draught limitation 16m) or Fairway buoy in Lagos, Bonny or offshore Escravos for transhipment. The products are transferred into smaller vessels of between 5,000MT and 20,000 MT for onward delivery in ‘daughter’, ‘grand daughter’ and ‘great great grand daughter’ etc vessels to Atlas Cove, Apapa, Warri, Okrika or Calabar, and even direct sales to customers on the high seas.

The above operational system has the following significant negative consequence

• It is more economical to use larger vessels to import products

• Heavy lightering costs are incurred which are built into the landed cost

• Products are easily round tripped through trans-shipment and ocean sales thus creating systemic corruption.

Government should invest on the sweeping and/or the dredging of the above listed ports. It should be noted that PPPRA uses 5000MT as a base to license importers and 30000MT for Landed cost calculation. This is considered scandalous.

The use of 45000 – 50000MT will lead to a significant reduction in landing cost and eliminate the menace of product round tripping. This project can be achieved in less than six months and the pay back is less than a year.

 

Building Additional more Single Point Mooring (SPM)

Presently, only NNPC SPM and Atlas Cove can take heavy vessels (above 50,000MT) as explained above. In order to improve the product reception infrastructure in support of the swept or dredged jetties, government should build more SPM. These jetties have pipeline throughput availability, thus negating any need to lighter products. This will also reduce if not completely eliminate lightering costs and support the elimination of product round tripping

The government should as a matter of urgency invest in more SPMs. This capital expenditure also has a less than one year pay back.

Removing administrative bottlenecks that delay vessel discharge and causing demurrage

Apart from the vessel discharge bottlenecks whose remedies have been discussed above, the following administrative limitations also cause demurrage:

• Delays in obtaining clearances from DPR, Customs and the Navy.

• Security problems from the Niger Delta militancy activities or from youth restiveness

• Difficulty in settling the ship and shore differences promptly after loading and offloading operations.

• Power outage causing discharge delays

It is imperative that these bottlenecks are removed. This can be done by government directive in less than one week, and should be speedily addressed.

Unbundling of the Pipeline System and creating open access of the pipelines

Some of PPMC’s extensive (5,000 km. pipeline network and 23 depots) product distribution system is currently not in use.  Some sections have been vandalized, and others have just not been adequately maintained, and have doubtful integrity.

PPMC should consider opening the entire network to third party importers and marketers for a throughput fee.  The revenue from such open access should be ploughed into maintaining the system and ensuring, as much as possible, its integrity.

Unbundling will enable marketers to have access from the Jetty head to the storage tank at a fee which will enable them to compare and control their product storage and transmission costs. This will enhance pipeline utilization, reduce bridging and earn PPMC much needed income.

Ensuring Pipeline & Depot Integrity:

Using PPMC’s installed pipeline and depot network would normally be the most efficient way to move products around the country. However, pipeline vandalism and stealing of products are present day realities in our country.  Distribution by road tankers is inefficient and not a viable alternative on the long run.  Government should speedily address this issue before unbunding the pipeline system. This too can be squarely addressed in less than six months.

Demurrage

PPPRA’s template currently apply 14 day demurrage at $28000 day. This is absolutely unreasonable. When the reasons given above for discharge delay are addressed, efficiency will be injected into the process and considerably reduce demurrage .The demurrage rate is a quoted spot rate (AFRA). The rate by day therefore is verifiable. This rate should be applied on an allowable three (3) day demurrage period for both mother and shuttle vessel discharges.

National Strategic Reserve

NNPC has the responsibility to guarantee product security for the nation. The pipeline network and its 26 depots made this task a relatively easy one in the 80s and 90s. The MT TUMA was also in active service in support of this goal.

However, the vessel lost her certificate to operate as a result of not being dry-docked. Consequently TUMA has not been actively engaged since May 2002. .

Consequent on the above, NNPC now relies on vessels in the high seas to provide the strategic reserve. The holding of these vessels on the high seas accounts for a significant portion of the 14 day demurrage that is built into product landed cost. This is wrong as it gives undue advantage to importers who do not have this strategic reserve responsibility.

The M.V. Tuma, a vessel capable of holding 120,000 – 140,000 metric tons of products was, until 2002 anchored offshore Lagos and used as strategic storage for products.  The vessel apparently lost its sea worthiness certification and departed in 2002, (ostensibly for dry-docking) . The Tuma should as a matter of urgency re-enter the system as a PMS storage facility to further reduce demurrage and storage cost.

Paying Subsidy on Products delivered to retail outlets

PPPRA established the following basis of determining the volumes on which subsidy is paid:

Between 2006 and June 2009, the guidelines provided that Claims will be based on the duly verified volume of products lifted out of the depots (Depots belonging to NNPC/PPMC, DAPPMA, Major Marketers and IPMAN) by the PPPRA to approved retail outlets.

Similarly, the PSF Guidelines, issued by PPPRA and effective from June 2009  provided  that Claims shall be based on the duly verified shore tank volume ie the volume of product that was actually discharged in Nigeria.

The method used from 2006 to 2009 meant that subsidy could be paid on products not delivered into retail outlets but smuggled out of the country, the method applied from July 2009 is even criminal as it meant that subsidy could be paid on products that are round tripped, products lost or stolen after delivery and products that are not delivered to retail outlet and therefore never consumed in Nigeria.

Firstly, it is imperative on government to carry out an audit of the products actually consumed in 2006 – 2011 on which the Federation paid subsidy. This is the only way to expose the massive fraud that has been perpetrated against Nigeria.

Secondly, government should legislate that subsidy can only be paid on products delivered to retail outlets and thus consumed in Nigeria.

The issues listed in a – i above are imperative steps that must be taken before deregulation. They can all be carried out in six months and will have the following impact

Taken together, they will lead to a drastic reduction in product Landed Cost. It is the firm belief that PMS would have a Landed Cost of less than N60 per litre after the measures are implemented

Individually and collectively, the measures have a payback of less than one year.

The second issue is the “disconnect” between the government and the people.  This disconnect is epitomized by the following question: who is best able to carry the load occasioned by the garbage of corruption and inefficiency represented in the bloated subsidy?  Is it the government that is currently carrying it on the peoples behalf or the downtrodden, recession stricken masses?

We posit that it is the government for the simple fact that the masses cannot influence or change anything in the system. And the fact that government’s long years of monopoly in the industry created the garbage and so, it must clean it first.

If government abandons the people to the wolves in the sector, it will not take time before they devour the people and tear their bones to shreds.  We are sure that this is not the objective of government.

It is government’s responsibility to challenge the institutional and structural imperfections in the system, take them on, fight them, defeat them and have a lean and fit system to bequeath to the people.  If for nothing else, the structures, institutions, corruption and inefficiencies that threaten to swallow all of us like roaring lions in the sector are all the creation of government.

Government must therefore not cowardly shy away from taking them on and defeating them as a prerequisite to withdrawing from the sector.  We also recognize that government will always have a presence in the sector as an umpire or a regulator but not in the dictation of prices.

Government must therefore implement these measures given the highlighted benefits.

 

CONCLUSION:

The following must guide the action of the federal government if we are serious as a nation to bury this “subsidy monster” permanently.

These are Revamped regulation to back subsidy removal

Government should pass a robust law to underpin deregulation such that some of the issues discussed above that need to be made permanent are underlined by the law of the land

The use of import licenses is outlawed; competition in the downstream sector is entrenched; and PPPRA is given teeth as an effective regulator and ombudsman.

Government should immediately embark on the programme to raise the capacity utilization of our refineries to international levels. This is why we would like to see the immediate publication of the TAM agreement signed between the government and the foreign contractors said to have constructed the refineries, who are now supposed to handle their repairs. We want to see the timelines and deliverables, as this is key to removing the present burden of over – priced petroleum products from the back of the already impoverished Nigerian masses.

We do not understand the logic behind the phased TAM programme by the NNPC for the existing refineries in an emergency situation like ours. It shows that as far as government is concerned, the current distorted petroleum products market that has given rise to the last protests nation-wide and the lives that were lost does not ring bell in their conscience.

Was it the same organisation that constructed all the existing refineries? Why not take on the TAM of the four refineries simultaneously to bring all of them on stream this year rather than having to wait till 2014 as being pursued by the NNPC? Does it not show that somebody or a group is interested in seeing the present fraud in the sector continue?

As a follow up to the above, we call for the immediate commencement of work on the three Greenfield refineries proposed by the government in order to expand existing capacities making it possible for us to lay to rest finally the monster called “fuel subsidy”.

Government should, as a matter of urgency, ensure that a robust Petroleum Industry Bill (PIB) that will solve the problems of both the downstream and the upstream sectors of the petroleum industry is passed into law, thereby optimizing the benefit to the people of the oil and gas sector which is a finite resource. We therefore welcome the Committee that has been set up to actualize this objective and urge that its membership be enlarged to include more Labour representatives so that its various components would be thoroughly examined and brought in line with current and future realities.

In any event, it is imperative that Government should make it clear to the people what the funds generated from subsidy withdrawal will be spent on. There is no doubt that our decaying infrastructure can do with part of the money.  Without transparency regarding the use, the funds could easily disappear into the pocket of political fat cats! This is why we believe that a further restructuring of the Belgore Committee to make it more inclusive and efficient has become highly imperative.

Moreover, the urgent need for an immediate audit of the Downstream sector of the Petroleum Industry becomes imperative. It is important that we know what is the actual quantity of PMS consumed daily, the total subsidy on it, those who received the said subsidy, who paid them, if N240b was budgeted for subsidy this current term, how did it become N1.3tr and where did the extra funds come from and who appropriated them?

It has also become imperative that government immediately constitutes and inaugurates the board of the National Council on Public Procurement in line with the Public procurement Act 2007. The refusal of the federal government to do this 5 years after its enactment calls into question the seriousness of the government in pursuing transparency and due process in all matters covered by the Act which includes such transactions as involved in the subsidy management. It is our position that doing this would immediately inject transparency in the sector and ensure that Nigerians and Nigeria are no longer made to carry burdens of corruption and failure of government to govern.

Palliative measures

It is only after the above are carried out that the actual level of subsidy (if any) can be established. The subsidy level needs to be known before the related palliatives are discussed.

Has the government done what it ought to do before taking the action of January 1st 2012? The answer is an emphatic NO.

Deregulation does not make economic sense when driven by Petroleum Products import.