Strengthening Systems Accountability for Enterprise Performance and Development Planning 3031117786, 9783031117787

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Strengthening Systems Accountability for Enterprise Performance and Development Planning Edited by Gbadebo O. A. Odularu

Strengthening Systems Accountability for Enterprise Performance and Development Planning “I am delighted to present this strategically articulated book titled, Strengthening Systems Accountability for Enterprise Performance and Development Planning. Accountability is often perceived as the acknowledgment and assumption of responsibility for actions, products, and decisions. Its major components are administration, governance, and implementation of decisions and actions within the role of employment positions. It also embodies the responsibility to report, explain and be answerable for the consequences. It is one of the driving forces to improve development interventions. Scholars have explored the relationship between enterprise and accountability within the context of corporate governance There has been a shift in emphasis towards enterprise, which has prompted the need for further rigorous research to underpin this development; also due to the sparse evidence to support the contention that accountability hinders enterprise. The message of this book was clear. It provides a valuable window on accountability and covers the necessary components from enterprise systems to planning for development. The authors have attempted to provide practical examples of the development process and its implementation within the context of the organizations in Africa. This book is relevant to all sectors, not just the modern corporate organizations – be it private, public, or third sector. it definitely held my interest. It is readily available for relevant practitioners and academicians, with state-of-the-art knowledge on the frontiers in accountability and enterprise and development planning. This book is a good step in that direction.” —Dr. Olusoyi O. R. Ashaye, Director of Research, UWTSD London “This recently published book titled - Strengthening Accountable Systems for Enterprise and Development Planning’ - succinctly presents one of the driving forces in improving development interventions. Developing intrusions of reflection is a preconceived idea of individuality and ultimately accountability. This book tackles the notion of accountability in the context of enterprise and broader development planning, providing examples of its diverse applications and implications and the mechanisms for its operationalization and institutionalization, particularly in Africa. With practical implications for efficient economic management, part of this understanding may have been previously told, but never with such freshness, intensity, and power. It is not only relevant to contemporary corporate and public sector management, but also a timely guide for research on such issues. I believe every researcher and anyone in the field of Business and Management will benefit from reading this book.” —Michael Ifeanyi, University of Surrey International Study Centre

Gbadebo O. A. Odularu Editor

Strengthening Systems Accountability for Enterprise Performance and Development Planning

Editor Gbadebo O. A. Odularu Department of Economics and Finance Bay Atlantic University Washington, DC, USA

ISBN 978-3-031-11778-7 ISBN 978-3-031-11779-4 (eBook) https://doi.org/10.1007/978-3-031-11779-4 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: © Alex Linch shutterstock.com This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Contents

1

Introduction: Strengthening Systems’ Accountability for Enterprise Performance and Development Planning Gbadebo O. A. Odularu

2

Accountability and Public Sector Financing in Nigeria Oladimeji Bukola Olaniyi

3

Enterprise Performance, Accountability, and Rurality in South Africa Ishmael Iwara, Gbadebo O. A. Odularu, and Simon Michael Taylor

4

5

1 13

33

Understanding Health Systems Within a Decentralized and Accountable Development Framework: Trust in the Balance Gbadebo O. A. Odularu, Chuka Onyekwena, and Adeniran Adedeji

53

“Political Will” as an Impediment to Accountability of Law Enforcement in Nigeria Barr Obisanya Tope Ayo and Ishmael Iwara

71

v

vi

6

7

8

9

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CONTENTS

Probability of Default, Accountability, Bankruptcy, and Digitization Amid COVID-19 Pandemic Olumide Adesina, Gbadebo O. A. Odularu, and Adeniyi Samson Onanaye Would Accounting for COVID-19 Pandemic Make Cities Much Smarter? Akinseye Olatokunbo Aluko, Olusoyi Richard Ashaye, and Gbadebo O. A. Odularu

103

121

A Primer into Non-Profit Organizations’ Accounting System in Nigeria Olutayo Modupe Adesina

135

A Critique of Urban Coastal Vegetation Land Use Conservation Laws in a Selected South African Metropolitan Municipality Tolulope Ayodeji Olatoye, Ahmed Mukalazi Kalumba, and Sonwabo Perez Mazinyo

149

Policy Directions for Oil Pipelines Vandalism, Accountability, and Socio-environmental Outcomes Akinseye Olatokunbo Aluko, Bashir Sulieman, Gbadebo O. A. Odularu, and Rasaki James

Index

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199

Notes on Contributors

Dr. Adedeji Adeniran is a researcher on the RISE Nigeria team and the Director of Education (Governance Research) and Senior Fellow at the Centre for the Study of the Economies of Africa (CSEA). He holds a Ph.D. from the University of Witwatersrand, South Africa. He also holds a master’s and bachelor’s degree in Economics and Educational Management/Economics from the University of Ibadan. He previously worked as a seasonal lecturer in the Department of Witwatersrand, as a data analyst at the Analyst Data Services and Resources (ADSR), and as a teaching assistant in the Department of Economics at the University of Ibadan. His research interests cut across macroeconomics, development finance, public economics, policy analysis, and experimental economics. Dr. Adesina Olumide holds a B.Sc. (Hons.) degree in Mathematics from the University of Ilorin, Nigeria; M.B.A. in Financial Management from the Ladoke Akintola University of Technology, Ogbomosho, Nigeria; M.Sc. in Statistics from the University of Lagos, Nigeria; and Ph.D. Statistics from Olabisi Onabanjo University, Ago-Iwoye, Nigeria. He is a lecturer in the Department of Mathematical Sciences, Redeemer’s University, Ede, Osun State, Nigeria. His areas of specialization are Mathematical Statistics and Computational Statistics. He has published over 40 scholarly articles, conference papers, and book chapters in reputable outlets. He has reviewed about 150 journal articles. Dr. Olumide Adesina is proficient in software such as MATLAB, R, and Python and has conducted several pieces of training in the areas of Data Science and Business Analytics for vii

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bankers, actuaries, operation managers, and policymakers in various organizations. He is a professional member of the International Association for Statistical Institutes (ISI), The Netherlands, and Secretary, Nigerian Statistical Association (NSA), Ogun State chapter, Nigeria. Adesina Olutayo Modupe is a lecturer at the department of accountancy, the polytechnic, Ibadan, Oyo State, Nigeria. A bachelor’s degree holder in Accounting from Ajayi Crowther University, Oyo Town, Oyo state, Nigeria. A master’s degree holder in Accounting from Olabisi Onabanjo University, Ago Iwoye, Ogun state, Nigeria. Dr. Aluko Akinseye Olatokunbo is currently the Associate Course Leader/Lecturer in the Oil & Gas Management (M.Sc.), M.B.A. Sustainable Energy & Mental Wealth (M.Sc.), respectively, at the University of East London (UEL) and a Public/Motivational Speaker in Mental Wealth and Career Development. His areas of research interest are Sustainability & Transition in Oil & Gas, Sustainable Energy, Strategic Change Management, Strategic Entrepreneurship, Maritime Crude Oil Transportation, Strategic Mobility, Strategic Marketing, and to mention a few. He is also a Senior Fellow of Higher Education Academy (SFHEA) UK. Dr. Ashaye Olusoyi Richard is an experienced lecturer and researcher, trainer, and management consultant with over 15 years of experience in education and training, facilitated at leading UK academic institutions as well as voluntary organizations. Olusoyi does research in Information system, Qualitative Social Research, Leadership, Social Theory, and Social Policy. Ayo Barr Obisanya Tope (Attorney) is a Ph.D. scholar in the Faculty of Law, North West University, South Africa. He obtained L.L.M. Degree at the University of Venda and B.Sc. Hons. Degree in Business Administration at Olabisi Onabanjo University Nigeria. His academic quest in both fields of study nurtured his interest in Human Rights concerns as it relates to corporate and State institutions. Obisanya is the pioneer of the international student forum and was the first international student nominated as the Chairperson of School of Law University of Venda. He has several years of lecturing, research and community engagement. Dr. Iwara Ishmael (NRF Y-rated) is Post-Doctoral Researcher at the Graduate School of Business and Leadership, the University of

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KwaZulu-Natal in South Africa. Iwara is interested in rural development, entrepreneurship, economics, and African studies. His research leadership history among others includes being a chapter coordinator of an EDTEA-funded project on social entrepreneurship, manager of an NRF-funded project on social entrepreneurship and innovation, coapplicant of a Swedish bank-funded project on informal credit systems and entrepreneurial development—SASUF, as well as co-principal investigator of an internally funded project on social cohesion. James Rasaki is a Ph.D. student at Glasgow Caledonian University, he is very passionate about sustainability in the oil and gas industry, especially in the Global South (GS) region. He has participated and delivered at conferences such as the London School of Sustainability Conference (LSSC) and World Congress on Sustainable Technologies (WCST). His extended abstract on “Investigating the Environmental Issues of Oil and Gas Operations in the Niger Delta Region of Nigeria” was selected to be published in the Internal Journal of Sustainable Energy Development (IJSED), Volume 9, Issues 1, ISSN: 2046-3707 (online) http://www.inf onomics-society.org/IJSED/. He has developed knowledge of the particular barriers to sustainable oil and gas operations. He has always argued for the need to develop an environmental sustainability framework as leverage for the GS to continue oil and gas production, given the inherent complexities and peculiarities of the region. Dr. Kalumba Ahmed Mukalazi is a senior lecturer at the Department of Geography and the Environmental Science University of Fort Hare, Alice, South Africa his research interests are in the area of environmental geography. He graduated with a doctoral degree from the University of Pretoria, South Africa, and has published research articles in recognized international journals. Dr. Mazinyo Sonwabo Perez is a senior lecturer and Coordinator of Postgraduate Affairs at the Department of Geography and Environmental Science University of Fort Hare, Alice, South Africa his research interests are in the area of environmental geography. He graduated with a doctoral degree from the University of Fort Hare, Alice, South Africa, and has published research articles in recognized international journals. Dr. Odularu Gbadebo O. A. is affiliated with Virginia Military Institute (VMI), Bay Atlantic University (BAU), Socio-Economic Research Applications & Projects (SERAP), and Nexford University (NXU), which are

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all located in Washington, DC, Area, U.S. He holds a Ph.D. degree from the University of Sunderland, UK. He was formerly a regional policy and markets data scientist at the continental Forum for Agricultural Research in Africa (FARA), Accra, Ghana. In addition to his great passion for advancing frontiers of interdisciplinary knowledge, he currently collaborates with national, continental, and international partners and governments by deploying data visualization and geospatial analytics to provide evidence-based policy tools for enhancing post-pandemic socio-economic recoveries among vulnerable communities. Olaniyi Oladimeji Bukola is a lecturer at the department of accountancy, The Polytechnic, Ibadan, Oyo State, Nigeria. A Bachelor’s and Master of Science holder in Accounting from Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria. Dr. Olatoye Tolulope Ayodeji holds two master’s and a Ph.D. degree in Geographical Information Systems and Environmental Geography from Nigeria’s Premier University, i.e., the University of Ibadan, Ibadan, Nigeria, and the University of Fort Hare, Alice, South Africa respectively. He specializes in environmental geography; coastal forest management; ecological science; vegetation & urban studies, climate change studies, and geo-spatial research. He is currently a researcher at the Geography and the Environmental Science University of Fort Hare, Alice, South Africa, Ibadan, Nigeria. Dr. Tolulope Olatoye has published over 20 research articles in recognized international journals and presented over 25 research papers at various international conferences. Dr. Onanaye Adeniyi Samson has Ph.D. Mathematics as the highest qualification, in 2012, Nigeria. He is affiliated with the Department of Mathematical Sciences, Faculty of Natural Sciences, Redeemer’s University, Ede, Nigeria, as a Reader (Associate Professor). His research interests include computational mathematics, and other related fields. Dr. Onyekwena Chuka is the chairperson of the Advisory Board and Executive Director of the Centre for the Study of the Economies of Africa (CSEA). He holds a Ph.D. in Economics from University of Portsmouth, UK, a Master of Science degree in Economics from University of Kent, UK, and a Bachelor of Science in Economics from the University of Nigeria, Nsukka. He also holds a certificate in Executive Education, and Financial Inclusion from the John F. Kennedy School of Government,

NOTES ON CONTRIBUTORS

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Harvard University. His research interests include Foreign Direct Investment (FDI), Trade, Global Economic Governance, Climate Change, and Financial Inclusion. Dr. Onyekwena is a member of the steering committee of the West African Think Tank Network (WATTNet) and a member of the African Policy Circle (APC). Sulieman Bashir is a Researcher at the University of East London; he is very passionate about everything related to the oil and gas industry. He recently completed his M.Sc. in Oil and Gas Management. He studied Chemical Engineering as his first degree. He has developed knowledge of helping people understand how the oil and gas industry works, both in technical and management aspects. Dr. Taylor Simon Michael is the Project Manager for Local Economic Development based at the Graduate School of Business and Leadership, UKZN. His interests are economic development, Social Entrepreneurship, and Entrepreneurship. He is involved in low-cost aquaponics projects to promote climate change mitigation, job creation, and food security.

List of Figures

Fig. 3.1 Fig. Fig. Fig. Fig. Fig. Fig. Fig.

4.1 4.2 4.3 4.4 4.5 4.6 4.7

Fig. 4.8 Fig. 4.9 Fig. 4.10 Fig. Fig. Fig. Fig.

4.11 4.12 9.1 9.2

Fig. 9.3 Fig. 9.4

Selected villages from local municipalities in Vhembe District (Authors) Out-of-pocket continues to lead Health budget and percentage of total budget Total health sector expenditure across facilities Recurrent and capital expenditure, 2012–2020 Total health aid in selected countries (2010–2019) Source of COVID-19 and humanitarian support Nigeria’s ODA in comparison with other African countries’ ODA Average ODA commitments in Kenya, South Africa and Nigeria, 2013–2015; 2016–2018 ODA flows as reported by creditor system Prioritization driven allocation of ODA among the leading sectors Intersectoral allocation of ODA with focus on health The UN humanitarian funding in Nigeria by donor The study area The study area depicting coastal conservation plans (BCMM Report, 2017) BCMM depicting urban space development plans (BCMM Report, 2017) Urban expansion at BCMM in 1963, 1989, 2011, and 2017 respectively (BCMM Report, 2017)

39 55 55 56 56 57 58 61 62 62 62 63 64 156 157 159 161

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LIST OF FIGURES

Fig. 10.1 Fig. 10.2 Fig. 10.3 Fig. 10.4 Fig. 10.5

Fig. 10.6

Fig. 10.7

Causes of spillage incidents (Source NOSDRA’s spill monitor) Oil spillage incidents between 1998 and 2004 (Source Adopted from Azodo 2019, p. 10) Oil production and disruptions Graph of GDP % of oil revenues from 1960 to 2018 (Source World Bank 2018) Trend analysis on the analysis of oil revenue lost between the year 2010 and 2019 (Source NOSDRA spill monitor) Analysis of the frequency of crude oil vandalized between the year 2010 and 2019 (Source NOSDRA spill monitor) Analysis of volume of crude oil vandalized between the year 2010 and 2019 (Source NOSDRA Spill Monitor)

176 178 180 186

187

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List of Tables

Table 1.1 Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table Table Table Table Table Table Table Table Table Table Table Table Table Table

3.1 3.2 3.3 3.4 3.5 3.6 4.1 5.1 6.1 6.2 6.3 6.4 6.5 6.6

Strengthening accountable systems analysis for selected countries The problems associated with public sector accounting in Nigeria The extent to which accountability of public officers’ benefit public sector in Nigeria The factors that are responsible for accountability of public officers in Nigeria Correlations between Issues in public sector accounting and accountability of public sector officers Participants’ demography Enterprise performance indicators Aggregate enterprise performance (n = 280) Enterprise failure in relation to area (n = 197) Enterprise failure in relation to gender (n = 197) Enterprise failure in relation to support status (n = 197) Nigeria’s ODA trends 2014–date UNODC accountability mechanisms Parameters for simulation Figures extracted from LafargeHolcim balance sheet Summary statistics for simulated data Percentage of defaults and non-defaults Classification table based on the Altman Z-score LafargeHolcim quarterly data

7 25 26 27 28 40 41 42 43 43 44 59 77 111 112 112 112 113 113

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LIST OF TABLES

Table 7.1 Table 8.1 Table 8.2 Table 8.3 Table 10.1 Table 10.2 Table 10.3

Some current smart initiatives to combat a pandemic in big global cities The problems facing NPOs in maintaining adequate records keeping and accounting system The effect of Poor records keeping and accounting system on financial activities of NPOs ANOVA Incidents of oil spillages experienced by Shell and their respective causes Qualitative mapping analysis Value of repair and maintenance of vandalized pipelines (2015–2019)

128 143 144 145 172 184 189

CHAPTER 1

Introduction: Strengthening Systems’ Accountability for Enterprise Performance and Development Planning Gbadebo O. A. Odularu

Globally, strengthening accountable systems at the individual, organizational, and systemic levels has been at the forefront of national, regional, and international development strategies. At the continental level, recent analysis shows strong economic growth in response to the African Union’s

G. O. A. Odularu (B) Department of Economics and Finance, Bay Atlantic University, Washington, DC, USA e-mail: [email protected]; [email protected]; [email protected]; [email protected] Virginia Military Institute, Lexington, VA, USA Nigerian Economic Summit Group (NESG), Lagos, Nigeria Centre for the Study of Economies of Africa (CSEA), Abuja FCT, Nigeria

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4_1

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vision of ‘an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.’ Africa is increasingly directing its development planning efforts toward sustainable and inclusive economic growth, structural transformation, regional integration, continental free trade, and industrialization, thereby integrating African economies into global value chains. In response to these ongoing trends, my experience with the UNECA DA tenth project—‘Strengthening the Capacities of African Governments for Integrating Accountability in Development Planning’—is aimed at closing Africa’s socio-economic development forecasting capacity gap by ensuring that development planning is evidence-based, data-driven and accountability framed. As a formative and forward-looking approach, knowledge enhancement on strengthening the capacities of African Governments on integrating accountability in development planning (KEAGIADP) is crucial in the adoption of evidence-based tools in local, national and regional economic planning. Nonetheless, the challenges that may likely be encountered when enhancing accountability frameworks should be leveraged as learning opportunities toward strengthening more accountable, inclusive, and transparent economic planning and management reforms in Africa. More importantly, how do we accelerate the role of decentralized systems in enhancing enterprises and economic planning toward development coordination, fiscal discipline, and resource harmonization in Africa. For instance, the ECA Capacity Development Strategy (UNECA 2017a, b, c, d, e),1 Africa is at a critical juncture in its development trajectory. Over the years, the continent has experienced an extended history

United States Institute for Advancing Community Development through Interdisciplinary Scientific Research and Education (USI-ADMIRE), Washington, DC, USA Socioeconomic Research and Applications and Projects (SERAP), Washington, DC, USA 1 ‘The Capacity Development Strategy articulates how the Economic Commission for Africa (ECA), in its acknowledged areas of competence, supports its member States, the African Union, the regional economic communities, and other pan-African institutions in order to strengthen their capacity to promote and achieve sustainable and inclusive economic growth, and to accelerate structural transformation in the context of the African

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of long-term development planning and visioning. However, African countries have experienced peculiar development foresight challenges2 which require a more mixed, consultative, and comprehensively strategic approach and urgent capacity needs attention (ACBF 2017a, b). Nudging accountability behavior among households, firms and governments is increasingly becoming a sin qua non in this digital age. Different countries have diverse cultural beliefs and values. For instance, Christian communities have an operationally different accounting system from predominantly Islamic neighborhoods in the northern geographies of the country. In addition, certain cultures forbid debt repayment, and people do not feel much obligated to acknowledge or met debt obligations. Furthermore, in some societies, different attitudes are expressed to criminal cases depending on whether the victim is a public entity, private individual, or government official. In other words, the degree of institutional awareness, knowledge and capacities are crucial in enhancing systems accountability. One of the original contributions and knowledge gaps that this book seeks to provide is the aspects of cultural and institutional dimensions that influence attitudes and conceptions about personal responsibility and accountability. From an innovative contribution viewpoint, there are cultural and religious differences in the way different systems seek and enforce accountability and it is important to explore these as a basis for explaining differential paces of the transition to sustainable development. Development planning challenges and fashioning tailor-made strategies toward overcoming the challenges will go a long way in addressing the widening capacity gaps in development planning and statistics in Nigeria. To foster inclusive economic transformation on the African continent, there is a need to support Nigerian Governments’ ongoing reform efforts in public finance management, sectorial policy design and management, urban and regional planning, and public-sector governance.

Union’s priorities, including the New Partnership for Africa’s Development (NEPAD) Programme and Agenda 2063.’ 2 Some of these challenges include inadequacy of credible consultative procedures and

processes, insufficient capacities to implement projects and programmes, ineffective monitoring and evaluation systems with little or no feedback mechanism to the policymaking processes, poor prioritization of funding needs, misalignment between revenue generation goals and development aspirations, and weak framework for coordinating donor supports (UNECA 2017a, b, c, d, e).

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Tools, guidelines, and best practices will serve as a foundation for scaling up lessons learned, thereby catalyzing the integration of accountability in development planning, and scaling up the knowledge and expertise acquired in African countries. It is expected that some of the lessons from the result in improvement in accounting practices, coordination, and coherence of evidence-based economic planning policy advice; systemic enhancement, and capacity strengthening of relevant ministries and sectors.

1.1

The Rationale

The major question being answered in this study is ‘what accountable systems are, what are the determinants of accountability and what are the challenges being faced by households, firms, and governments in their attempts of enhancing accountability. Some of the research questions of interest to this book include the examination of institutional and cultural drivers, enablers as well as causative factors in enhancing accountability toward attitudinal changes in our communities, serving as behavioral environments where people conduct businesses. In addition, this book will focus on a broader conceptual understanding of accountability in varying socio-cultural contexts and institutional settings, thereby reflecting the role of technologies and measurements. There is a need to discuss the enterprises and development planning capacities-strengthening issues as well as some of the key actors. Some of the questions for further articulation in this book are: i. What are some of the accountability-related systems that are required for overcoming enterprises’ performance and development planning challenges confronting African households and communities? ii. How coherent are the national, regional, and continental enterprises and development planning capacity-strengthening strategies? iii. Are there existing capacity strengthening strategies and initiatives which are targeted at integrating accountability in enterprise performance and development planning? If yes, what are they; and if no, why? Do the existing strategies align with established best practices for accountability-integrated capacity strengthening strategies in enterprises’ performance and development planning?

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iv. Are the enterprises and development planning capacity strengthening-related theories of change and logical framework plausible at all levels? What are the underlying assumptions as well as the supporting evidences? v. What are some of the factors or drivers contributing or constraining the effectiveness of (accountability-integrated) development planning capacity strengthening strategies in your country? What are the enabling and stumbling factors promoting or hindering the effectiveness of these strategies? vi. What are the specific financial and human resources (skill sets) adequate to implementing (accountability-integrated) enterprises’ performance and development planning development planning capacity strengthening strategies in your country? vii. What are the programs, projects, system changes, investments and other interventions needed in order to achieve accountability? viii. What are the levels of efficiencies and optimality in the management of enterprises performance and development planning capacity-strengthening initiatives; and how integrated are appropriate M&E systems within these initiatives toward ensuring alignment across other sectorial initiatives and systems? ix. How much are the level of strategic alliances and partnerships between national, regional, and continental actors in delivering (accountability-integrated) development planning capacity strengthening strategies in your country? What are some of the capacity-strengthening successful institutional partnerships at the national and regional levels? x. What are the existing levels of gender mainstreaming toward integrating accountability in enterprise performance and development planning capacity strengthening initiatives at the national and regional levels? xi. Is gender given any consideration in the design of (accountability-integrated) enterprises and development planning capacity strengthening strategies in your country? How successful are these initiatives; and what are the factors driving their successes or failures? Based on this background, and in response to emerging development priorities, strengthening the capacities of African national planning institutions for integrating accountability frameworks and evidence-based

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policies in their development planning processes with specific milestones and targets that can be verified, measured, and monitored. The project is also aimed at closing Africa’s socio-economic development forecasting capacity gap by ensuring that development planning and its policy processes are evidence-based and data-driven. Based on this background, Table 1.1 presents the three countries, their level of capacity needs and the likely outcomes for strengthening accountable systems for enterprises and development planning.

1.2

Conclusion

In view of these daunting capacity-strengthening challenges and based on lessons emerging from the new powers in the South, enhancing capacities for integrating accountability and transparency in development planning has proven to be one of the driving forces toward improving the outcomes and effectiveness of development interventions. Successful development planning requires inter alia: the full capacity to collect, compile, produce and utilize data necessary for assessing and monitoring the integration of accountability frameworks and evidence-based policymaking in the implementation of national planning processes. Development planning challenges of each pilot country and fashioning tailor-made strategies for overcoming the challenges will go a long way in addressing the widening capacity gaps in development planning and statistics in Africa. In an attempt to foster inclusive economic transformation on the African continent, there is a need to support African Governments’ ongoing reform efforts in public finance management, sectorial policy design and management, urban and regional planning, and public-sector governance. Trust provides a foundation for an effective accountable framework. Sustainable development experts have taken the time to explore, in more details, the role of decentralized accounting systems in socio-economic development frameworks, particularly in the context of state institutions. This book represents a collection of articles written in the context of sustainable development to address the problems of distrust, accountability, digital assets, uncertainty, technology, and poverty. This book aims to address public policy concerns such as creating new ways in which to collaborate and exchange ideas. Consequently, chapter one introduces this book by emphasizing that improvement in accounting

(continued)

Following four years of political uncertainty and economic . Egypt’s current monetary and economic process will be slowdown, Egypt has chosen a path of adjustment and examined by analyzing the current process in place for reform in 2012 which, if followed resolutely, will lead to making economic decisions in Egypt. The way in which economic stability and growth policies are developed, what key decision-making bodies exist, and how these policies are communicated to the The Strategic Framework for Economic and Social public and then implemented will be assessed and Development 2012–2022, which guides all Egypt’s strengthened depending on gaps planning efforts, is based on the principle of inclusiveness. It is worth highlighting that the Framework, which was . Integration of accountability frameworks and designed by the Ministry of Planning in cooperation with evidence-based policymaking approach the Japan International Cooperation Agency (JICA), also incorporates the principles of effective development cooperation The project will attempt to address the following challenges in planning: . The lack of dialogue among key stakeholders . Lack of strong Monitoring and Evaluation schemes in key ministries . Improvement of domestic accountability . Lack of inclusive planning . Improvement of data gathering by spreading computer usage and training census personnel

Egypt

Realistic outcomes

Status of affairs

Strengthening accountable systems analysis for selected countries

Country

Table 1.1

1 INTRODUCTION: STRENGTHENING SYSTEMS’ ACCOUNTABILITY …

7

(continued)

Status of affairs

Kenya Vision 2030 (Ruwaza ya Kenya 2030) is the national development programme from 2008–2030. Its objective is to transform Kenya into a ‘newly industrializing, middle-income (income exceeding world’s average currently at US$10,000) country providing a high quality of life to all its citizens by 2030 in a clean and secure environment. The Vision is based on three pillars: economic, social and political. The Kenya Vision 2030 is implemented in a successive five-year plan, with the first such plan covering the period–2008–2012 Kenya Vision 2030 was developed through ‘an all-inclusive and participatory stakeholder’s consultative process, involving Kenyans from all parts of the country. The consultative approach was undertaken through workshops with stakeholders from all levels of public service, private sector, civil society, the media, the NGOs were held throughout the country The following are some of the few challenges the project will address: . Strengthening the country’s system of reporting on the status of implementation as well as progress toward stated objectives of Vision 2030 . Identifying shortcomings and engage in continuous improvement of development strategy and processes . Strengthening the country’s capacity to develop effective monitoring and evaluation systems with a view to achieving stated development objectives

Table 1.1

Country

Kenya

Effective monitoring and evaluation processes are required for continuous improvement in both the general direction of development objectives and targeting processes relating to achievement of these objectives Improved accountability of governments through emphasizing inclusivity at all levels of designing implementation plan through implementation

Realistic outcomes

8 G. O. A. ODULARU

Source ECA-CDD 10th DA Project Document, and the World Bank: http://www.worldbank.org/en/country/kenya/overview

Zambia’s long-term development strategy is articulated in . Improved accountability and transparency will improve its own ‘Vision 2030: A prosperous middle-income nation the potential for use of Zambian government systems to by 2030.’ To reach this objective, the Government of the achieve the GRZ objectives Republic of Zambia (GRZ) has put into place a series of . Strengthened Monitoring and Evaluation systems national development plans. The current Sixth National Development Plan (SNDP), encompassing 2011 through 2015 The SNDP has three overarching objectives: infrastructure development, rural development, and human development The project aims to address the following challenges: . Local capacity constraints at all levels are a challenge and make for the need for ensuring appropriate resources and management for capacity building of potential partners’ administrative and financial management imperative . Structures were not integrated into the national planning systems which further widened the gap in planning and harmonization

Zambia

Realistic outcomes

Status of affairs

Country

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practices, coordination, and coherence of evidence-based economic planning policy advice; systemic enhancement, and capacity strengthening of relevant ministries and sectors is key for realizing Africa’s African Union 2063 agenda. While chapter two presents an accountability and public sector financing case study from Nigeria, the third chapter articulates enterprise performance and rurality in South Africa. The four chapter attempts to understand Nigeria’s health systems within a decentralized development framework. The fifth chapter argues the lack of political will as an impediment to the accountability of law enforcement in Nigeria. The sixth chapter focuses on the probability of default, accountability, bankruptcy, and digitalization amid COVID-19 pandemic. Chapter seven presents the nexus between smart cities development, accountability, and the COVID-19 pandemic. Chapter eight presents a primer into non-profit organizations accounting systems while the ninth chapter is a thorough critique of urban coastal vegetation land use conservation laws in a selected South African Metropolitan Municipality. Finally, the tenth chapter articulates the policy directions for oil pipelines vandalism, accountability and socio-environmental outcomes.

References African Capacity Building Foundation (ACBF). (2017a). [online] Available at: http://elibrary.acbfpact.org/acbf/collect/acbf/index/assoc/HASH717b. dir/CD%20Plan%20English.pdf. African Capacity Building Foundation (ACBF). (2017b). [online] Available at: http://elibrary.acbfpact.org/acbf/collect/acbf/index/assoc/HAS H01b5/37898a7a.dir/CR%20for%20Agenda%202063%20English.pdf. UNECA. (2017a). Country Profiles 2015 | United Nations Economic Commission for Africa. [online] Available at: http://www.uneca.org/publications/ country-profiles-2015. UNECA. (2017b). [online] Available at: http://www.uneca.org/sites/default/ files/uploaded-documents/CoM/com2016/Country-Profiles/kenyacp_eng_ final.pdf. UNECA. (2017c). [online] Available at: http://www.uneca.org/sites/default/ files/uploaded-documents/CoM/com2016/Country-Profiles/egypt2015_ cp_eng_final.pdf. UNECA. (2017d). [online] Available at: http://www.uneca.org/sites/default/ files/uploaded-documents/CoM/com2016/Country-Profiles/zambiacounty profile_eng_final.pdf.

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INTRODUCTION: STRENGTHENING SYSTEMS’ ACCOUNTABILITY …

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UNECA. (2017e). Capacity Development Strategy | United Nations Economic Commission for Africa. [online] Available at: http://www.uneca.org/public ations/capacity-development-strategy. World Bank Group. 2016. Doing Business Economy Profile 2017: Kenya. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank. org/handle/10986/25565. License: CC BY 3.0 IGO.

CHAPTER 2

Accountability and Public Sector Financing in Nigeria Oladimeji Bukola Olaniyi

2.1

Introduction

The low level of accountability and transparency in accounting, financial reporting, and management in the public sector in Nigeria engenders a high level of corruption. The public sector in Nigeria has witnessed setbacks largely due to accounting errors, ineffective and inefficient management as most of the public enterprises have failed to function on the purposes for which they were established (Esu and Inyang 2009). Public accountability is the assurance of modern democratic governance. Democracy remains a paper procedure if those in power cannot be held accountable in public for their acts and omissions, for their decisions, their policies, and their expenditures. Public accountability, as an institution, therefore, is the complement of public management.” Iyoha and Oyerinde (2010), “Accountability has thus, become of essence because

O. B. Olaniyi (B) Department of Accountancy, The Polytechnic, Ibadan, Nigeria e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4_2

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the keys to creating wealth and maintaining a free society have been recognized to lie primarily in the same direction. Both require that broadbased systems of accountability be built into the governance structures of government institutions as well as business corporations.” In the private sector, the significance of quality financial reporting has been well established, and the recent financial and economic crisis indicates the need for good quality financial reporting in the public sector. One of the implications of this crisis is the shift of significant financial risks in many countries from the private to the public sector. Heiling (2011) noted that there is a need for governments to maintain quality accounting and reporting systems that can accurately reflect these risks. Quality financial reporting which contains all the public sector’s revenue and expenditure are responsible for formulating financial and economic policies, effective coordination of Government financial operations, and management of budget control leading to better-informed assessments of the resource allocation decisions made by governments, thereby increasing transparency and accountability. Accounting and Financial reporting in the public sector is important to help achieve political and economic stability by ensuring government revenue is not wasted, and is managed and spent efficiently, effectively, and transparently; and most importantly that it is appropriately spent on health care, education, transport, and infrastructure. Compliance with meaningful accounting principles enhances fiscal discipline, unites system efficiencies, reduces the likelihood that scarce resources are dissipated because of poor controls, and provides more relevant information for better-informed decision-making. The purpose of Public Sector Accounting and Financial Reporting is to provide useful financial information to the users of the information. Information must have certain characteristics for it to be useful for decision making such as relevance, reliability, comparability, and understandability. Financial reporting might be internal: presented to management for specific purposes, or external: presented to stakeholders for general purposes. In Nigeria today, public sector accounting is a very serious challenge to the nation’s economy due to the corrupt society. This is because the financial records do not reflect the true and fair view of the accounting records. There are several collaborations in the utilization of public funds to the extent that funds apportioned through the budget are not properly utilized. The annual budget for the public (government) income and

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expenditure are always presented late. Whatever the position with timeless delivery, these budgets are never reviewed in time, and deviations are not investigated to ensure prompt remedial action which will re-direct and re-orientate plans toward budgeted levels. Public sector accounting in Nigeria is associated with the problems of delay in receiving reports from out stations which subsequently delay the preparation of the financial report, inability to disclose actual values of expenditure due to lack of technical skills among the accountants in the various sub-sectors, using of untrained personnel to do the accounting tasks, the inefficiency of accounting and internal audit, etc. . From a diagnostic survey conducted in 2001 into the Federal Government public procurement, it was revealed that “Nigeria lost several hundred billion Naira over the last few decades due to flagrant abuse of procedures, monumental corruption, lack of transparency, and merit in the award of contracts in the public sector and accountability quandary (Uremadu 2004). Based on the problems, the study aimed to examine the problems associated with public sector accounting in Nigeria, measure the extent to which accountability of public officers’ benefit public sector in Nigeria and ascertain the factors that responsible for accountability of public officers in Nigeria. 2.1.1

Conceptual Review: Concept of Accountability

Accountability is all about being answerable to those who have invested their trust, faith, and resources to you. Adegbite (2010) defined accountability as the obligation to demonstrate that work has been conducted in accordance with agreed rules and standards and the officer reports fairly and accurately on performance results vis-à-vis mandated roles and or/plans. It means doing things transparently in line with due process and the provision of feedback. Johnson (2004) says that public accountability is an essential component for the functioning of our political system, as accountability means that those who are charged with drafting and/or carrying out policy should be obliged to explain their actions to their electorate. Premchand (1999) observed that the capacity to achieve full accountability has been and continues to be inadequate, partly because of the design of accountability itself and partly because of the widening range of objectives and associated expectations attached to accountability. He further argues that if accountability is to be achieved in full, including its

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constructive aspects, then it must be designed with care. The objective of accountability should go beyond the naming and shaming of officials, or the pursuit of sleaze, to a search for durable improvements in economic management to reduce the incidence of institutional recidivism. The future of accountability consists in covering the macro aspects of economic and financial sustainability, as well as the micro aspects of service delivery. It should envisage a three-tier structure of accountability: that of official (both political and regular civil employees), that of intergovernmental relationships, and that between government and their respective legislatures. 2.1.2

Importance of Accountability

This is imperative as the citizenry, no doubt, has a right to know, a right to receive openly declared facts and figures which would enable them to debate and decide the fate of their elected representatives. Accordingly, Aucoin and Heintzman (2000) see accountability as a democratic means of monitoring and controlling government conduct which prevents the development of the concentration of power and enhances the learning capacity and effectiveness of public administration. The preceding assertion draws attention to two major significances of accountability which are democratic control and checks and balances. From a democratic perspective, it is the basis of any strong democracy as people can call upon any public office holders to account for their stewardship (Mulgan 2003). From the perspective of checks and balances, accountability is important as it prevents corruption and abuse of office as no one has absolute power. Both perspectives are relevant to Nigeria in the sense that the country is currently democratizing and requires strong institutions and structures to support the process. Bovens (2006) explained that the remedy against an overbearing or corrupt government is the organization of institutional countervailing power, such as independent judicial power or a chamber of audit put next to the parliament and political officials and giving them the power to request that account be rendered over any aspect of activity on which the government has influence and control. In reaction to such perceived situations, many Western democracies are yearning for more direct and explicit accountability relations between public agencies on the one hand and clients, citizens, and civil society, including the media, on the other hand (McCandless 2001).

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ACCOUNTABILITY AND PUBLIC SECTOR FINANCING IN NIGERIA

2.1.3

17

Accountability in Public Sector

The government plays a leading role in the shaping and development any nation and given their explicit importance, it is necessary to provide a suitable framework to enable the achievement of this noble role. ‘This is accomplished through the apparatus public administration, a field which refers to the way Federal, State, and Local institutions with their procedural, legal, regulatory, financial, human resources and asset aspects are organized, institutionalized and managed with respect to regulatory, revenue generation, spending and procurement functions, and the provision of such services as defense, social services, and economic infrastructure’ (Mhome 2003). One key component of public administration is financial management. McKinney and Howard (1998) stated that financial management is a critical management function that fuels the engine of the public administration and can be considered in three areas: (a) Determining fiscal policies whereby political or community leaders identify programmes of priority and try to fund them through appropriations. (b) Providing accountability by ensuring that public funds are spent for the purposes intended and (c) Instituting the required organizational structures and controls to effectively carry out the fiscal duties and responsibilities. 2.1.4

Objectives of Public Sector Accounting

Accounting is the bookkeeping that enables one to keep track of one’s assets, liabilities, capital, income, and expenditure. In accounting, the public sector consists of the government, governmental organizations, parastatals, and non-governmental organizations, among others. Therefore, accounting of the organizations is referred to as Public Sector accounting. The main objectives of public sector accounting according to Ofordile (2013) are: i. To determine the legitimacy of transactions and their compliance with the statutes and accepted norms. Public sector disbursement should accord with the provisions of the appropriation Acts and Financial Regulations. ii. Providing Evidence of Stewardship: The act of rendering stewardship is being able to account transparently and diligently for resources entrusted. Government operators are obliged to displace

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O. B. OLANIYI

due diligence and sense of probity in the collection and disposed of public funds. iii. Assisting Planning and Control: Mapping out plans prevents organizations from drifting. Control measures are adjusted to skillful planning plans of actions to provide the focus of activities that are being pursued. The incidence of unforeseen is built into plans to prevent or at least reduce corporate failures. iv. Public Sector establishment must act in accordance with the mandate theory of governance. v. Ensuring Objectivity and Timely Reporting: The users of public sector accounting such as the executives (President, Governors, Chairman of Local Government Council, Federal Ministers and State Commissioners, National Assembly, members of the public) are anxious to bridge their knowledge gaps of what the Government is doing. They will treasure prompt, timely, and accurate statistics to evaluate the performance of Government. vi. Evaluating the costs incurred and the benefit derivable: It is difficult to measure costs and benefits in financial terms in public sector organizations. The comfort of the citizens is the key and paramount issue. The analysis of cost–benefit assesses the economic and social advantages (i.e., benefit) and disadvantages/inconvenience (cost) of alternative actions. vii. Other objectives of public sector accounting includes (a) providing how actual performance may be compared with the budget or target set. (b) Providing the details of outstanding long-term commitments and financial obligations (c) Proffering solutions to the various bottlenecks and problems identified. ()d Ensuring that costs are matched by at least equivalent benefits accruing. (e) Identifying the sources of funding capital projects.Evaluating the economy, efficiency, and effectiveness with which Public Sector Organization Pursue their goals and objectives.

2.2

Theoretical Review

At Nigerian independence in 1960, the country inherited a civil service system that was primarily designed and equipped to serve the housekeeping function of maintaining law and order and the provision of basic amenities (Abu and Abdullahi 2010). The management and administration of public finances were centered on the basic objectives of ensuring

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accounting control and accountability, particularly in the conduct of the daily financial transaction of the government. Political independence, however, brought with it greater and more profound challenges especially for national development, a task that the inherited system of financial administration was found to be grossly incapable of facilitating (Adegbite 2010). According to Coker (2010), the various approaches to accountability based on the language of account can be grouped into: 1. Process-based accountability: this approach measures compliance with pre-set standards and formally defined outcomes. This includes fiscal and managerial accountability with reliance on the use of accounting methodologies. 2. Performance-based accountability: this approach measures performance against broad objectives. This measure may be qualitative and the criteria against such performance are measured less precisely. Adegbite (2010) also noted that there are three pillars of accountability, which UNDP tagged Accountability, Transparency, Integrity (ATI). Accountability is segmented into: i. financial accountability: the obligation of anyone handling resources, public office, or any other position of trust, is to report on the intended and actual use of the resources or of the designated office. ii. Administrative accountability: this type of accountability involves a sound system of internal control, which complements and ensures proper checks and balances supplied by constitutional government and an engaged citizenry. These include ethical codes, criminal penalties, and administrative reviews. iii. Political accountability: this type of accountability fundamentally begins with free, fair, and transparent elections. Through periodic elections and a control structure, elected and appointed officials are held accountable for their actions while holding public office. iv. Social accountability: this is a demand-driven approach that relies on civic engagement and involves ordinary citizens and groups exacting greater accountability for public actions and outcomes. The basis for accountability and the efficiency of public sector expenditure in Nigeria is entrenched in several conceptual and institutional (or legal)

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frameworks (Ijeoma 2014; Izedonmi and Ibadin 2013; Owolabi et al. 2013). A conceptual framework is the heart of the efficiency of public sector expenditure; it spells out government accounting principles and conventions, which form the basis for the preparation of budgets, financial statements, and audits (Ijeoma 2014). According to Izedonmi and Ibadin (2013), the legal and institutional framework (such as the Constitution of the Federal Republic of Nigeria, 1999, the Finance [Control and Management] Act, 1958, the Fiscal Responsibility Act, 2007, the Audit Ordinance No. 28, 1956 and the International Public Sector Statement of Accounting Standards) formed the background for developing financial regulations, treasury and financial circulars used in measuring the level of accountability in Nigeria. The Constitution contained provisions for managing government funds, external controls for operating the accounting system, and procedures for annual appropriations (Oshisami 1992; Owolabi et al. 2013). The Finance (Control and Management) Act 1958 regulates the accounting system adopted for the preparation of government financial reports (Izedonmi and Ibadin 2013). In the words of Izedonmi and Ibadin (2013), the most important aspect of Finance (Control and Management) Act of 1958 is the fact that it specifically provided for the use of cash accounting basis in the preparation of government accounts. The Audit Ordinance Act, 1956 as amended by Audit Act 1988 provided for the audit and accountability for the public funds by the government in Nigeria. The Act sets out the duties of the Auditor General for the federation and the timing for audit and presentation of audited financial statements to the public (Izedonmi and Ibadin 2013). A considerable body of literature has developed on accountability in Nigeria, particularly in examining the nature of government accounting and the efficiency of public sector expenditure (Izedonmi and Ibadin 2013; Omolehinwa and Naiyeju 2011; Oshisami 1992; Shehu 2010). Also, general, and specific comments from national regulatory bodies such as Public Accounts Committee (PAC) and international bodies like United Kingdom’s Department for International Development, World Bank and Transparency International, suggest that there are major weaknesses in the systems for accounting and the efficiency of public sector expenditure in Nigeria (Aruwa 2002). According to him, some of the major issues identified by these international bodies include: a perceived gap in the content of government financial reports and information needs of users; lack of external accountability; poor linkages between

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government budgeting and financial reports; and the need to reform budgeting processes in view of the recurring large amount budget variances reported. Okpala (2013: 115), in his study on effectiveness of the Public Accounts Committee (PAC) in conducting their oversight functions on government accounts found out that: “…the PAC has not effectively exercised its statutory oversight function due to late submission of audited reports by the Auditor General of the Federation, availability of weak regulatory framework for reporting and poor committee members’ qualifications and experience in conducting their functions.” On his part gave four criteria regarded as basic to public service accountability. This includes Fiscal accountability; Managerial accountability; programme accountability; and individual accountability. But for accountability is purely an external control on public office holders. He postulated four criteria that must be satisfied for accountability to be effective, and these are: i. There must be timely, honest, accurate, complete, adequate, and relevant information on the actions of those entrusted with public funds. ii. There must be an external auditor’s independence of the organization/ministry/departments being entrusted. iii. There must be an arrangement that will enable recourse based on such information iv. to correct deficiencies, reward honorable performance, penalize fraudulent dealings, call to question all forms of abuses and redress illegal acts; and v. A system must exist which makes all the three elements above intact.

2.3

Empirical Review

Overtime, different researchers (Bovens 2006; Achua 2009) have considered in their research work the nature of Accountability. However, Bovens (2006) is of the opinion that Accountability takes the following form i. Organizational Accountability: This is a situation where superior officers ask the subordinate to account for their assignments or activities.

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ii. Political Accountability: This is the focus of this paper. This type of accountability is concerned with the elected representative, political parties, and public office holders. This is the situation where elected representatives or appointed ministers are required to give an account of their activities during their tenure in office. Political Accountability usually manifests itself in the concept of individual ministerial responsibility, which is the cornerstone of the notion of responsible government. In a parliamentary system with ministerial responsibility and a general civil service, for instance, as in Britain and the Netherlands, Political Accountability is usually exercised indirectly through the minister. Public office holders and heads of agencies also appear before parliamentary committees to account for some of their activities. In Presidential settings such as in the United State of America or Nigeria, Public officers and heads of agencies are responsible to the public and the National Assembly. iii. Legal Accountability: Under this, the public officers can also be summoned by courts to account for their acts, or on behalf of the agency. The Parliament and the judiciary act as legal accountability. The Parliament holds the executive politically accountable, while the judiciary holds the executive legally accountable. iv. Professional Accountability: Professionals also take an appointment as public servants; such Professionals include: Chartered Accountants, Doctors, and Engineers. These professionals belong to one association or the other and they are to act in compliance with their ethics and code of conduct. They are also accountable to both the public and their professional body. Furthermore, in his Research work during the military regime in Nigeria discovered that the practice of public accountability is at its lowest ebb. He further concluded that the public officers have no regard for public accountability. Public money was disbursed without the knowledge of the Minister of Finance, he cited that “the Minister alleged that it was only after the death of the then military leader in June 1998 that he discovered that about US$450 Million had been withdrawn from the Central Bank

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between January and May 1998 without the knowledge of the Minister of Finance.” He substantiated the infectivity of public accountability during the Military era by saying that: Not only were the accounts of the last five years of Military rule not available as at end of the last millennium, but the accounts also that were rendered cannot be regarded as reliable because there is no relationship between the figures given by the Central Bank and Ministry of Finance.

2.4

Research Gap

The various literatures from empirical have given insights on the accountability and of public officers in the management of the financial resources of the country. Some scholars studied accounting infrastructure and accountability in Nigeria, accountability and financial reports, and financial report as one of the best indices of accountability. Therefore, much has not been assessed from the perspective of the problems of public sector accounting system and accountability of public officers in Nigeria. This gap hence requires to be filled. This research aims to contribute to this knowledge and with an emphasis on the accountable of Nigerians public officers

2.5

Methodology

The data for this research was collected through the administration of a structured questionnaire. The population of this study is made up of all employees in the public sectors in Nigeria and the sample frame was drawn from the Ministry of Finance specifically in Accountant and Auditor General Offices). Out of the 120 questionnaires that were administered to the management staff of the selected organs in the Ministry of Finance, 84 questionnaires with valid responses were returned and analyzed. The instrument consisted of a 13—term survey questionnaire with a—4 Likert scale response options. Strongly Agree (4), Agree (3), Disagree (2), and Strongly Disagree (1). The employed data collection method is chosen because it enables conclusions and reports to be drawn easily from the respondents when dealing with quantitative data. The validation of the questionnaire was done using an expert in public finance/administration and a pre-test reliability determination yielded a

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stability co-efficient of 82% which was considered well enough for the study. The work experience, job status, and educational attainments of the respondents were considered when the questionnaires were administered to the respondents. Data were analyzed using Statistical Package for Social Sciences (SPSS). Pearson Product Moment Correlation method was used to confirm the hypotheses of the study, using the mean score obtained from the research questions in the questionnaires administered. Hypotheses were tested at a 5% level of significance. 2.5.1

Data Analysis Procedure

1. The four Likert scales SA, A D, and SD are used with respective grades (points) 4, 3, 2, and 1 as, the multipliers of each response from the respondents (f4 , f3 , f2 , f1 ) of the Grades 4+3+2+1 = 2.5 2. The Cut off Score is obtained as = Sum 4 Number of Grades = The calculated mean score below the cut-off (2.5) is Disagreed and the one that is equal to or greater than the cut-off (2.5) is Agreed.

2.6 2.6.1

Data Analysis and Interpretation

Data Analysis According to Research Question and Hypothesis

Table 2.1 indicates respondents’ responses to the problems associated with the public sector accounting in Nigeria. It revealed that public sectors accounting are associated with delay in receiving reports from outstation which subsequently delays the preparation of the financial report, lack of technical skills among most of the accountants in the various sub-sectors, negative attitude of government functionaries toward accountability, the inefficiency of accounting and internal audits and using of untrained personnel to do the accounting work based on the fact that the mean score obtained for each statement is greater than cut off mean 2.5. Table 2.2 indicates the respondents’ perception of the extent to which accountability of public officers benefit the public sector. The result reveals that accountable public officers enhance the citizen-centric character of public service, accountable public sector officers enhance commitment to the public sector objectives, accountability creates room for sanctions where justification is not adequate, accountability of public

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ACCOUNTABILITY AND PUBLIC SECTOR FINANCING IN NIGERIA

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Table 2.1 The problems associated with public sector accounting in Nigeria S/N

Questions

4xf4

3xf3

2xf1

1xf1

Mean Rank

1.

There is always delay in receiving reports from outstation which subsequently delays the preparation of financial report Lack of technical skills among most of the accountants in the various sub-sectors affects public sector accounting negatively Public sector accounting is hindered by the negative attitude of government functionaries toward accountability Public sector accounting is associated with the problem of inefficiency of accounting and internal audits Using untrained personnel to do the accounting work hinders public sector accounting

168

72

24

6

3.21

5th

180

75

18

5

3.31

4th

196

96

6

0

3.55

1st

184

84

12

4

3.38

2nd

180

81

14

5

3.33

3rd

2.

3.

4.

5.

Source Field survey 2018

officers enhances approval of policies and actions that have financial implications by a representative body and greater efficiency as well as effectiveness in public service is enhanced and promoted by the accountability of public sector officers based on the mean score obtained for each statement which is greater than 2. Table 2.3 reveals the response of the respondents on factors that are responsible for accountability in the Nigerian public sector. The result indicates that; giving public officers the proper and required training enhances their accountability, the presence of EFCC and the whistleblowers ensure optimum accountability in the public sector, and using of a complete accrual basis of accounting always makes public managers accountable for recording and safeguarding of public sector accounting, proper accountability is enhanced by putting in place, the guidelines for preparing and approving work plan, method of monitoring plans and reporting performance and creation of formal structure on a proper environment enhances accountability of public officers based on the value of mean score obtained for each statement which is greater than 2.5

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O. B. OLANIYI

Table 2.2 The extent to which accountability of public officers’ benefit public sector in Nigeria S/N

Questions

4xf4

3xf3

2xf1

1xf1

Mean Rank

1.

Accountable public officers enhance the citizen centric character of public service, coupled with better representatives Greater loyalty and commitment to the public sector objectives is ensured with accountable public sector officers Accountability creates room for sanctions where justification is not adequate Accountability of public officers enhances approval of policies and actions that have financial implications by a representative body Accountability of public sector officers promotes greater efficiency as well as effectiveness in public service

164

75

26

5

3.21

5th

188

93

8

2

3.46

3rd

192

99

6

0

3.54

2nd

176

78

20

4

3.31

4th

200

99

2

0

3.58

1st

2.

3. 4.

5.

Source Field survey 2018

2.6.2

Test of Hypothesis

2.6.2.1 Research Hypothesis H 0 Public sector accounting system has no significant impact on accountability of public officers in Nigeria public sector. H 1 Public sector accounting system has a significant impact on the accountability of public officers in Nigeria public sector. Table 2.4 shows (r = −0.861, p-value < 0.05). This implies that there is a strong correlation between issues in public sector accounting and accountability of public sector officers. The researcher therefore rejects the null hypothesis and concludes that the public sector accounting system has a significant impact on the accountability of public officers in Nigeria’s public sector. This result shows that the accountability of public sector officers is strongly influenced by problems associated with public sector accounting in Nigeria.

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ACCOUNTABILITY AND PUBLIC SECTOR FINANCING IN NIGERIA

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Table 2.3 The factors that are responsible for accountability of public officers in Nigeria S/N

Questions

4xf4

3xf3

2xf1

1xf1

Mean

Rank

1.

Accountability of public officers is enhanced by giving them proper and required training Optimum accountability is enjoyed in the public sector with the presence of EFCC and the whistleblowers Using of a complete accrual basis of accounting always makes public managers accountable for recording and safeguarding of public sector accounting Proper accountability is enhanced by putting in place, the guidelines for preparing and approving work plan, method of monitoring plans, and reporting performance Creating of formal structure on a proper environment, such as the existence of proper code of conduct, appearance of equal treatment by senior managers toward all employees, etc. enhances accountability of public officers

164

69

28

6

3.18

4th

176

69

22

6

3.25

3rd

160

78

22

7

3.17

5th

192

90

8

2

3.48

2nd

196

96

6

0

3.55

1st

2.

3.

4.

5.

Source Field survey 2018

2.7

Conclusion and Recommendations

Accountability which normally appears as a central concept for governance requires those who hold positions of public trust to account for their performance to the public or their duly elected representatives. Accountability, therefore, implies that decision-makers are monitored by, and are responsible to, others, each of whom is, in turn, responsible to the people of the country. In respect of public financial management, there are several mechanisms through which accountability is enforced such as the auditor general, public account committee, and the ombudsman. However, the study revealed that accountability among the public officers in Nigeria is very poor due to the issues and problems associated with public sector accounting which are: inefficiency of accounting and internal audits, using of untrained personnel, poor technical skills among

* Correlation is significant at the 0.05 level (1-tailed)

Accountability_of_public_officers

Pearson Correlation (r) Sig. (1-tailed) N Pearson Correlation (r) Sig. (1-tailed) N 5 −0.861* 0.048 5

1

Public_Sector_accounting

5

−0.861* 0.048 5 1

Accountability_of_public_officers

Correlations between Issues in public sector accounting and accountability of public sector officers

Public_Sector_accounting

Table 2.4

28 O. B. OLANIYI

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29

most of the accountants, subsequent delay in the preparation of accounts in the public sector. After a careful analysis and critical appraisal of issues in public sector accounting and accountability in the public sector, the research therefore makes the following recommendations: i. Government should ensure that they create enabling environment for the development of professional Accountants and employed them in the civil service. This will be achieved by retaining the existing through motivation and attracting the new with good working conditions. ii. The professional bodies should redesign their programmes and carry out more enlightenment campaign activities to attract more Nigerians to the profession and they should be re orientation of members to encourage them to work in the public sector. iii. Public sector accounting and auditing standard must be improved and there is need also, for upgrading the skills of accounting and auditing personnel. iv. Government must ensure that public accounting committees is restructured to enhance internal mechanisms for enforcing accountability in the public sector.

References Abu, N. & Abdullahi, U. (2010). “Government Expenditure and Economic growth in Nigeria, 1970–2008; A Disaggregated Analysis”, Business and Economic Journal 2010: BEJ–478: 555. Achua, J.K. (2009). “Reinventing Governmental Accounting for Accountability Assurance in Nigeria”, Nigeria Research Journal of Accountancy, 1(1): 1–16. Adegbite, E.O. (2010). “Accounting, Accountability and National Development”, Nigerian Accountant, 43(1): 56–64. Adegoroye, G. (2008). Public Service Reform for Sustainable Development: The Nigeria Experience. Keynote Address Delivered at the Commonwealth Advanced Seminar held between 20th–23rd March 2006, Wellington, New Zealand. Aruwa, S. (2002). Empirical Investigation of the Information Content of Published Government Financial Statements. M.Sc. Accounting and Finance Thesis, Ahmadu Bello University, Zaria, Nigeria.

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Aucoin, P. & Heintzman, R. (2000). “The Dialectics of Accountability for Performance in Public Management Reform”, International Review of Administrative Sciences, 66(1): 45–55. Bovens, M. (2006). Analyzing and Assessing Public Accountability; a Conceptual Framework. European governance papers (EUROGOV) No. C-06–01. Coker, O. (2010). “Accountability in Third Sector Organizations: What Role for Accounting?”, Nigerian Accountant, 43(1): 23–29. Daniel, G.T. (1999), Public Sector Accounting. Zaria-Nigeria: ABUP. Esu, B.B & Inyang B.J. (2009). “A Case for Performance Management in the Public Sector in Nigeria”, International Journal of Business and Management, 4(4): 98–105. Federal Republic of Nigeria (1999). The Constitution of the Federal Republic of Nigeria, Decree No. 24 of 1999. Official Gazette, No. 27, vol. 86. Lagos: Federal Government Press. Heiling, J. (2011). “The Importance of Research in the Field of Governmental Accounting—Views from a Practitioner”, Comparative International Governmental Accounting Research Newsletter, 2(2). Iyoha, F.O. & Oyerinde, D. (2010). Accounting Infrastructure and Accountability in the Management of Public Expenditure in Developing Countries: A Focus on Nigeria. Covenant University. Izedonmi, F. & Ibadin, P. (2013). “International Public Sector Accounting Framework, Regulatory Agencies and Standard Setting Procedures: A Critique”, European Journal of Business Management, 5(6): 17–24. Johnson, I.E. (2004). Public Sector Accounting and Financial Control. Lagos: Financial Institutions Training Centre. McCandless, H.E. (2001). A Citizen’s Guide to Public Accountability: Changing the Relationship Between Citizens and Authorities. Victoria, BC: Trafford. McKinney, J. B. & Howard, L. C. (1998). Public Administration: Balancing Power and Accountability. ABC-CLIO. Mhome, G.C.Z. (2003). “The Challenges of Governance, Public Sector Reform and Public Administration: Some Research Issues”, DPMN Bulletin, 10(3): l−13. Mulgan, R. (2003). Holding Power to Account: Accountability in Modern Democracies. Basingstoke. Ofordile, U. (2013). “Public Sector Accounting–The Nigerian Experience”, International Journal of Finance and Accounting, 2(8): 446–451. Ojiakor, N. (2009). Nigerian Socio-Political Development: Issues and Problems. Enugu: John Jacobs Classic Publishers. Okpala, K. (2013). “Public Accounts Committee and Oversight Functions in Nigeria: A Tower Built on Sinking Sand”, International Journal of Business and Management, 8(13): 111–117.

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Omolehinwa, E. & Naiyeju, J. (2011). Theory and Practice of Government Accounting in Nigeria. Nigeria: Pumark Nigeria Ltd. Oshisami, K. (1992). Government Accounting and Financial Control. Ibadan: Intec Prenters. Palgrave. Owolabi, S., Ocansey, E. & Dada, S. (2013). “Public Sector Accounting and Developing Economies: A Comparative Review and Analysis of Ghana and Nigeria”, Unique Journal of Business Management Research, 1(3): 34–41. Premchand, A. (1999). “Public Financial Accountability” in Schviavo-Campo, S. (ed). Governance, Corruption and Public Financial Management. Asian Development Bank. Manila, Philippines. www.adb.org. Shehu, B. (2010). Importance of annual cash plan in budget execution and achievement of targets. Paper presented at a National Workshop on Understanding the Requirements of Fiscal Responsibility Act, held between 18th–21st October. Kaduna, Nigeria. The Constitution of the Federal Republic of Nigeria–1999. Federal Government Press, Lagos. Uremadu, S.O. (2004). “Journal of Public Administration and Police Research”, Academic Journal, 3(6): 174–183.

CHAPTER 3

Enterprise Performance, Accountability, and Rurality in South Africa Ishmael Iwara, Gbadebo O. A. Odularu, and Simon Michael Taylor

3.1

Introduction

In recent years, there has been a drive for stakeholders to work in line with the South Africa National Development Plan 2013, the National Enterprise Development Act 102 of 1996, the New Framework for Local

I. Iwara (B) · S. M. Taylor Graduate School of Business and Leadership, University of KwaZulu-Natal, Durban, South Africa e-mail: [email protected] S. M. Taylor e-mail: [email protected] G. O. A. Odularu Department of Economics and Finance, Bay Atlantic University, Washington, DC, USA e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4_3

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Economic Development of 2018 and other national priorities for enterprise development. Various district municipalities committed to initiatives that stand to provide an environment for successful enterprising, and Vhembe District Municipality is not exceptional (Vhembe District Integrated Development Planning (IDP) 2019/2020). Several investments through mounting entrepreneurship and innovation for citizen-centred development have been made to build a strong entrepreneurial capacity for South Africa’s economy (Limpopo Economic Development Enterprise [LEDE] 2006; Trade and Investment Limpopo [TIL] 2006; Ladzani, 2010; Vhembe District IDP 2019). This was in acknowledgement that successful enterprises can bridge the inequalities exacerbated by the apartheid legacy, combat unemployment and reduce poverty (Herrington et al. 2010; Ayandibu and Houghton 2017; Lawrence and Rogerson 2019). An overview of the progress in entrepreneurial activities in South Africa reveals a 9% average of the Total Early-Stage Entrepreneurship Activity (TEA) despite numerous support initiatives put in place by the government (Galawe 2017). The TEA outcome is below the expected 20% in the country and 14% in the Southern African region. This indicates the urgency of interventions that can help enterprises improve their scale of operation and performance (Herrington and Kew 2014; Mike and Penny 2016; Galawe 2017). Similarly, the overall enterprise failure rate in the country stands at 70% which is among the highest in the world (Asah et al. 2015; Bushe 2019), significantly affecting the rate of unemployment estimated at 38.1% (Stat SA 2018). The forgoing argument suggests a proactive measure of identifying target support initiatives that can uplift enterprises in the country. At present, however, enterprise support initiatives in South Africa remains elusive as there is no clear and sufficient scientific evidence to point out specific area failures lie for targeted support. As a result of this pitfall, policymakers, entrepreneurship development practitioners, and entrepreneurs may not adequately be equipped with appropriate knowledge for transforming enterprises in the distinct typologies. This, among others, ultimately characterised enterprise failure given that proper intervention measures can only be utilised when their issues are understood from a specific and informed point of view (Rusvingo 2015; Karasi et al. 2017; Gukurume 2018; Rogerson 2018). The forgoing argument suggests the need to examine where enterprise is underperforming in some rural areas of South Africa for specific intervention.

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The choice for rural areas as the study focus comes with the concerns that South Africa lack appropriate entrepreneurship models centred on grassroots realities to guide adequate enterprise support that can yield desired results in such areas (Ayankoya 2013; Nkondo 2017; Iwara 2018; Kativhu 2019). Often, a generalised approach is implemented which characterised unequal and misplaced support that moderates marginalisation in the country’s entrepreneurial landscape (Seeletse and MaseTshaba 2016; Stull et al. 2016; Bomani and Derera 2018; Lawrence and Rogerson 2019). Given that the nature of enterprise support needed differ with location and typology, it is, therefore, imperative to address the challenge for a precise intervention that can attend to specific needs of distinct categories of entrepreneurs. The current study distilled enterprise failure in the rural areas of Vhembe District based on performance indicators found in the area. A cross-examination of three groups of enterprises operating in the areas namely male-run and female-run enterprises, supported enterprises and non-supported enterprise, enterprises operating in the extremely rural areas, and their counterparts closer to service centre was performed. The purpose of making such a choice was informed by the desire to know where specifically failure is pervasive, and whether gender, rurality, that is, distance to service centres and enterprise support initiative accessible to entrepreneurs in the area influence performance. It is believed that the result will enhance a more proactive support approach in the area.

3.2

Enterprise Performance Indicators

A present, there are no commonly accepted indicators for measuring enterprise performance or success. Consequently, scholars often adopt indicators that are applicable to certain entrepreneurship landscape for measurements. For instance, a study carried out in Thailand explored the dynamics of entrepreneurs’ success factors in influencing venture growth. Various indicators for measuring performance and adopting a financial ratio were synthesised (Rose et al. 2006). Specifically, the indicator evaluates the track of cash flow and returns against expenditure. Critiques were that financial ratio only, may not provide sufficient evidence to justify performance, given that there exist numerous other standards. Similarly, Ha et al. (2014) harnessed employee capacity for measuring performance in Laos. In the same country, Vixathep (2014) involved total assets, annual turnover, and employee capacity. Whereas ‘capacity of employee’

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has been widely used in the literature, a raising concern has been that some enterprises do not necessarily require too many people to function effectively and succeed. Enterprises of the same category, within the same market, may have different counts of employees yet record equal performance. This is also recognising that globalisation is gradually replacing humans with machines; a robot may perform tasks designed for 10 humans, more efficiently. In the USA, Weinzimmer and Manmadhan (2009) identified survival trends, level of growth, customer focus, employee needs, community involvement, ethical commitment, quality of life, and cash flow as performance indicators. Similarly, Groenewegen and de Langen (2012) examined performance and business growth, based on employee capacity and the number of outlets. This conforms with Yaghoob and Shamsodin’s (2011) recommendation that uses business growth, survival trend and continuity, profit margin, level of innovation, and societal impact in China. Egbert (2009) added business expansion leading to the establishment of another and survival trend as indicators. Ledwith and O’Dwyer (2009) and Mikusova and Janeckova (2010) identify inventory levels, claims accounting level, and the number of employees, level of skills and knowledge, creativity, and innovation as others. These scholars, as well as Ledwith and O’Dwyer (2009), stressed customer satisfaction and retention as a gauge to examine the performance of enterprises, especially with regard to new products. In South Africa, Van Vuuren et al. (2007) proposed number of employees, turnover, productivity, and profit margins as determinants for measuring enterprise performance. Mohutsiwa (2012) used new product development, market development, market share, sales growth rate, operating profit, and profit to sales ratio for the same purpose. Nkondo (2017) adopted nine indicators which are the level of inventory, size of the market, growth of the business, state of the building, profit, healthy cash flow situation, number of employees and survival of the business, over a certain period. Iwara (2018) also used annual turnover, access to banking facility, employee trends, and loan capacity. Mahembe et al. (2011) discussed annual turnover, survival trend, loan size, and access to banking facilities. Although these indicators were broad enough to explain performance, it must be borne in mind that distance to basic services may deter access of some enterprises, especially those in extremely rural areas from financial institutions and hence, affects indicators that are relevant to them.

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Concerning banking facility, studies have also shown that poor entrepreneurial skills and education are prevalent in underdeveloped and rural areas (Bowen et al. 2009; Stone and Stone 2011; Eversole et al. 2013; Das 2017; Lambon-Quayefio 2017). As a result, many entrepreneurs may not have the exposure to access banking facilities for either loans or savings, therefore, the validity of adopting indicators associated with financial institutions to measure enterprise performance in rural areas may be questioned. It was against this background that Kativhu (2019) who explored a criterion for measuring the resilience of small retail businesses in selected rural areas of Vhembe District, recommends the adoption of what the rural households perceive as thresholds for good performance. The scholar continues that some rural areas lack defined grassroots indices empirically established as measurement criteria. Considering this constraint, often indices are drawn from well-established and developed entrepreneurship landscapes, to measure performance in rural areas of which most are incompatible. To close this gap, the distilled indicators based on literature synthesis were crystallised in the study area to see how they speak to reality on the ground. This is an ideal approach to understanding what grassroots entrepreneurs perceive and use to measure enterprise performance or success in rural areas. These arguments are also evident in enterprise-related studies in different areas of South Africa (Farrington and Matchaba-Hove 2011; Galawe 2017; Nkondo 2017). These scholars adopted area-context indicators that stand to explain the realities of enterprises from an individual point of view given that entrepreneurial activities differ with area and entrepreneurs interact differently with the environment.

3.3

Methodology

3.3.1

Study Area

Vhembe District Municipality is one of the five districts that make up the Limpopo Province. It is in the northern part of South Africa. It shares boundaries with Botswana on the west, Mozambique in the east and Zimbabwe in the north. The district is composed of four local municipalities, namely, Collins Chabane, Makhado, Musina, and Thulamela. The high enterprise failure rate, resulting in high unemployment rate estimated at 38.1% (Stat SA 2018), informed the selection of the study area. Over 70% of the population is an active but unemployed labour force that

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can harness entrepreneurial opportunities for job creation (Stat SA 2018). Poverty level ranks 78.4%, which is the highest when compared with other provinces (Stat SA 2018). Given the assumption that successful enterprises are key to addressing such challenges, it could be assumed that the upsurge of the issues is an indication that enterprises performance in the area is below expectation. Hence, the need to examine the performance and where failures lie in terms of gender, rurality, and support statuses of the enterprises. There is limited research on how these factors influence performance in the study area and South Africa. 3.3.2

Sample and Sampling Procedure

Villages to form the sample were purposively drawn from the four local municipalities of Vhembe District for the study (Fig. 3.1). Nearness to basic services and the considerable presence of shopping centres and basic infrastructures such as electricity supply, accessible water and good roads were key indicators used for the selection of the villages (Heffner 2015; Luloff et al. 2008; Mudimeli 2019). Villages more than 50 kilometres away from basic services are extremely rural areas while those nearer were classified as rural (Fig. 3.1). The total participants were drawn from both rural and extremely rural areas of which each constituted 50% of the sample (Table 3.1). Out of the total sample, 60.3% received initial support that included entrepreneurship training and/or business start-up/expansion funding from the government and Non-governmental Organisation among other sources. Enterprises in the rural areas contributed 32.1% of the share of those who received initial support. The female-owned enterprises accounted for 74.3% of the participants with 35.2% drawn from extremely rural areas. Snowball sampling technique was followed to engage participants. This was due to limited access to information, especially data on existing enterprises in the study area. A total of 57 participants were drawn from Collins Chabane, 71 from Makhado, 76 from Musina and 69 from Thulamela which amounted to 280 for the study. The choice of the sample size was based on indices used in existing entrepreneurial-related studies in the country, in accordance with rigorous statistical methods (Farrington and Matchaba-Hove 2011; Galawe 2017; Kativhu 2019).

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3.3.3

ENTERPRISE PERFORMANCE, ACCOUNTABILITY …

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Data Collection and Analysis

Data collection of the study was twofold. Both phases followed a peer-to-peer interview technique. Firstly, the global enterprise performance/success indicators based on a critical MAXQDA desktop review were consolidated in a closed-ended binary questionnaire. The tool enabled the participants to confirm indicators that conform to traditional enterprises in the areas. In the tool, participants were also provided with an option to suggest indicators, on the ground, which might not have been covered in the literature. Descriptive statistics through STATA was performed on the data to isolate the indicators that applied to at least 70% of each enterprise category sampled in the study. The inputs of the examination were used as a general standard for measurements; thus, the confirmed indicators informed the second phase of the data collection concerning enterprise performances. In terms of Phase 2, Micro Excel 2013 logical and financial functions were used to validate and classify the data collected to examine enterprise performances. These are functions that return one value if the condition is TRUE, or another value if the condition is FALSE. For instance, the functions explain whether an enterprise profit is viable, having deducted

Fig. 3.1 Selected villages from local municipalities in Vhembe District (Authors)

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Table 3.1 Participants’ demography Area

Support status Gender

Supported Not-supported Female Male

Total (%)

Rural (%)

Extremely rural (%)

32.1 17.9 39.1 18.4

28.2 21.8 35.2 7.3

60.3 39.7 74.3 25.7

working capital from the turnover. It also enabled the isolation of enterprises that have expanded and/or introduced new products based on data reports. Cross tabulation was further performed through SPSS v26 to describe the performances of the enterprises based on the identified indicators, using chi-square to explain the significant difference. The difference is significant when p < 0.05, otherwise, rejected when it is above the limit.

3.4 3.4.1

Results

Indicators for Measuring Enterprise Performance in Vhembe Rural Areas

Table 3.2 shows that 18 out of the 24 global indicators are incompatible with the study area. Profit margin (which is derived by subtracting working capital from turnover), enterprise expansion, trends of new products and enterprise survival were the only indicators generally accepted. The inference was based on ranks (70% above) in all categories of the participant. 3.4.2

Aggregate Enterprise Performance Trend in Vhembe Rural Areas

Analysis of enterprise performance reveals that on average, 29.7% (83) enterprises met at least 50% of the success indicators (Table 3.3). This implies that the performances of 197 (approx. 70%) enterprises out of 280 samples are below the standards introduced in the study. A total of 197 (approximately 70%) out of the sample recorded low enterprise. In terms of rurality (Table 3.4), enterprises in rural villages

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Table 3.2 Enterprise performance indicators S/N

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

Indicators

Access to banking facility Business expansion Business survival Cash flow situation Claims accounting level Community involvement Customer focus/satisfaction Employee capacity/trends Employee needs Ethical commitment Innovation/creativity Inventory levels Level of skills and knowledge Loan capacity/size Market share and development Productivity/trends of new products Profit to sales ratio and margin Quality of life Sales growth rate Size of the market State of the building Track of cash flow Turnover Working capital

Categories Area (%)

Gender (%)

Support status (%)

Rural Extremely rural

Male

Female

Supported

Not supported

52

23

39

36

67

8

87 91 44 13

74 93 27 5

78 86 37 8

83 98 34 10

79 82 31 12

82 88 40 6

43

51

46

48

18

76

23

49

30

42

59

13

39

12

19

23

41

11

18 12 58 52 3

13

15 7 46 47 2

16 5 49 36 5

21 10 32 45 2

12 2 63 38 7

11

7

18

3

37 31 2

21

79

83

81

81

77

85

84

87

88

83

87

84

32 49 57

27 46 39

29 51 49

30 44 47

52 43 61

7 52 35

51 89 83

47 81 78

38 83 81

60 87 80

49 80 74

49 90 87

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Table 3.3 Aggregate enterprise performance (n = 280)

Enterprise Performance Trend Frequenc Valid y Percent Cum Percent 5 50 17.9 17.9 10 39 13.9 31.8 15 37 13.2 45.0 20 20 7.1 52.1 25 12 4.3 56.4 30 11 3.9 60.3 35 11 3.9 64.2 40 9 3.2 67.4

Successful Enterprises Frequen Percent cy

45

8

2.9

70.3

50

8

2.9

73.2

8

2.9

55

11

3.9

77.1

11

3.9

60

12

4.3

81.4

12

4.3

65

14

5.0

86.4

14

5.0

70

11

3.9

90.3

11

3.9

75

11

3.9

94.2

11

3.9

80

9

3.2

97.4

9

3.2

85

4

1.4

98.8

4

1.4

90

3

1.1

100.0

3

1.1

Total

280

100.0

83

29.7

contributed 52.7% to failure which is higher when compared with those in the extremely rural areas, however, the difference (p = 0.62) is above the acceptable limit (p < 0.05). This, therefore, indicates that the difference is not statistically significant, which implies that rurality and its associated developmental challenges, such as distance to service centres and access

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to basic infrastructures do not necessarily influence enterprise failure in the study area. Similarly, the male entrepreneurs contributed 53.1% to failure (Table 3.5). The contribution is higher for the females who accounted for 46.9%, however, the difference (p = 0.70) is statistically insignificant at a 5% level of significance. It can, therefore, be deduced that enterprise failure in the area is not influenced by gender. As shown in Table 3.6, supported enterprises accounted for 50.6% of the enterprises that underperformed. The contribution is slightly above those of the non-supported enterprises by 1.2%, and the difference is statistically significant (p = 0.02). This suggests that enterprise support initiative may determine performance in the area. However, it is not clear what could be the possible reasons for a supported enterprise to perform below their non-supported counterparts. Could it be that the nature of Table 3.4 Enterprise failure in relation to area (n = 197) Area Rural Extremely rural Total Chi-Square Tests Pearson Chi-Square Likelihood Ratio N of Valid Cases

Value 6.289* 6.327 197

Number

Percentage

104 93 197 df 8 8

52.7% 47.3% 100% Asymptotic Significance (2-sided) 0.615 0.611

Statistically Significance Level: * p < 0.05

Table 3.5 Enterprise failure in relation to gender (n = 197) Gender Male Female Total Chi-Square Tests Pearson Chi-Square Likelihood Ratio N of Valid Cases

Value 5.463* 6.670 197

Statistically Significance Level: * p < 0.05

Number

Percentage

105 92 197 Df 8 8

53.1% 46.9% 100% Asymptotic Significance (2-sided) 0.707 0.573

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Table 3.6 Enterprise failure in relation to support status (n = 197) Support status Supported Non-supported Total Chi-Square Tests Pearson Chi-Square Likelihood Ratio N of Valid Cases

Value 10.345* 11.909 197

Number

Percentage

100 97 197 Df 8 8

50.6% 49.4% 100% Asymptotic Significance (2-sided) 0.024* 0.155

Statistically Significance Level: * p < 0.05

support being offered rather amount to failure instead of success? This offers windows for further investigation to understand what the reasons for the difference might be.

3.5

Discussion of Findings

Examination of enterprise performance based on the indicators (enterprise survival, enterprise expansion, trends of new products and profit margin) earlier identified reveals that less than 30% of the total sample attained 50% success standards as established in this study thus confirming research performed earlier which explained that over 70% SMMEs in South Africa perform below-expectations (Fatoki 2014). Olawale and Garwe (2010) and Asah et al. (2015) estimated a 70% overall failure rate of enterprises in the country. Scholars seem to have concluded that enterprises in the country do not reach their full potential; for some reasons many struggles to survive, while others fail (Agbenyegah 2013; Douglas et al. 2017). This is a concern, given the enormous government support being invested in enterprise development. Most importantly, enterprise failure in the country is often generalised, failing to explore the place of rural areas in the issue, as result, grassroots entrepreneurs in rural areas are often neglected in support initiatives that stand to transform their enterprises. These uneven patterns of geographical development and unequal distribution of resources has contributed significantly to marginalising rural households (Iwara 2018; Lawrence and Rogerson 2019). Based on the findings in the current study, it can be argued that the overall attrition of

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enterprises in rural areas in Vhembe is indifference to the country’s landscape, thus, traditional enterprises in rural areas of the country require as much attention as those in the urban areas. Except for support enterprises that recorded a significant increase in enterprise failure, relatively higher than non-supported enterprises, there was no significant difference in terms of performance among other groups. The reason for the significant failure of supported enterprises in the area is not clear. It might be that the support accessible to enterprises in the rural areas is incompatible with realities of the entrepreneurial landscape of the areas. Thus, the nature of support being offered is not resulting in the much-needed success as enterprises fail even though there have been numerous investments poured into them. This agrees with Kganyago (2016) who stressed that most enterprises in South Africa disappear after receiving support, hence, recruit of new enterprises for support is an ongoing process. Unfortunately, this concern has not received sufficient research attention for a sustainable solution. The performance difference between enterprises in rural and extremely rural areas of Vhembe is not significant, however, it should bear in mind enterprise support which moderates their ultimate transformation and performance vary spatially with location and typology of activity (Saleem and Abideen 2011; Phillipson et al. 2019). Location characteristics have influence on performance, thus, support should be area-specific (Soni et al. 2015). Importantly, only grassroots enterprises affected by market realities in an area have sufficient experience of the precise circumstances to be addressed for an effective solution or support (Nemaenzhe 2010). It is, therefore, important to partner with entrepreneurs in the rural areas to identify context-specific solutions rather than support initiatives often anchored on a generalised intervention. Enterprise development programmes should be restructured such that they become grassroots-driven and area-specific; this has a direct mandate for determining the pace of progress (Audretsch and Belitski 2017). In Vhembe District, specifically rural areas, entrepreneurs require skills that can enable them to maintain good profit margins, contribute to new products, expand business, and survive their enterprises. These are key aspects that support should be directed to gauge performance in the light of the entrepreneurial activities being pursued.

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3.6

Conclusion and Recommendations

Enterprise survival, enterprise expansion, trends of new products and profit margin are indicators for measuring enterprise performance in rural areas of Vhembe District. Thus, prioritising support initiatives based on these indicators will contribute significantly to enterprise transformation in the area. Emphases on other global indicators may not result in muchexpected results in the area. A survey of performance anchored on the indicators revealed that only a minority of enterprises met at least the 50% success threshold, while the majority fail significantly. Of the three groups examined, supported enterprises tend to contribute significantly to enterprise failure, more than their non-supported counterparts. Could this imply that the nature of support being offered to entrepreneurs in the area is not responding to needs? If so, it is important to understand the context-specific support that speaks to traditional enterprises in the area. This is a window for further studies. Findings reveal that failure lies more in rural areas compared to those in extremely rural, however, the difference is not significant justifying that distance to civilisation does not affect performance. Similarly, the influence of gender does not significantly affect performance in the area. Based on this result, the following are recommended: . Policymakers and entrepreneurship development practitioners should strive to understand area-specific entrepreneurship support, such that decisions on enterprises are made from an informed angle, rather than from assumptions. . Progress in terms of profit margin, trends of new products, enterprise expansion and business expansion were found lacking among a vast majority of the enterprise, thus, there is a need for government and other enterprise development agencies to redirect investments geared to spurring such indicators. . There is a need to examine the nature of enterprise support being given to entrepreneurs in the area. . The relationship between entrepreneurial support being given and enterprise performance should be investigated from a specific point of view.

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Acknowledgements This study is an aspect of a Ph.D. research initiative of one of the authors.

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Eversole, R., Barraket, J. and Luke, B., 2013. Social Enterprises in Rural Community Development. Community Development Journal, 49(2), pp. 245– 261. Farrington, S.M. and Matchaba-Hove, M.T.M., 2011. The Influence of Entrepreneurial Orientation on Small Business Success. Available at: https:// scholar.google.co.za/scholar?cluster=7694415991393517723&hl=en&as_ sdt=2005&sciodt=0,5 (Accessed 13 January 2018). Fatoki, O., 2014. The Causes of the Failure of New Small And Medium Enterprises in South Africa. Mediterranean Journal of Social Sciences, 5(20), pp. 922–927. Galawe, N.J., 2017. Endogenous and Exogenous Risk Factors in the Success of South African Small Medium Enterprises (Doctoral dissertation, University of the Witwatersrand). Groenewegen, G. and De Langen, F., 2012. Critical Success Factors of the Survival of Start-Ups with a Radical Innovation. Journal of Applied Economics and Business Research, 2(3), pp. 155–171. Gukurume, S., 2018. Navigating Precarious Livelihoods: Youth in the SME Sector in Zimbabwe. In Ayele, S., Glover, D. and Oosterom, M. (Eds) Youth Employment and the Private Sector in Africa. IDS Bulletin 49.5, Brighton: IDS. Ha, M., Siriwan, U., Ramabut, C., Thitikalaya, N., Thitikanlaya, T. and Kiatnarong, C., 2014. Key Factors for Successful Entrepreneurship in Thailand. Open Journal of Social Sciences, 2(9), pp. 116–121. Heffner, K., 2015. Leaching Functions from the Outer Metropolitan Zones— Increasing Peripherality of Small Towns and Rural Areas. Journal of Economics and Management, 19(1), pp. 194–209. Herrington, M. and Kew, J., 2014. Global Entrepreneurship Monitor South African, 2013 Report. Herrington, M., Kew, J., Kew, P. and Monitor, G.E., 2010. Tracking Entrepreneurship in South Africa: A GEM perspective (pp. 1–174). South Africa: Graduate School of Business, University of Cape Town. Iwara, I.O., 2018. Endogenous Attributes of Successful Youth Entrepreneurs in Selected Wards of Thulamela Local Municipality (Master’s dissertation, University of Venda). Karasi, Y., Shambare, R. and Nkondo, L., 2017. Challenges Faced by RuralWomen Entrepreneurs in Vhembe District: The Moderating Role of Gender Socialisation. International Conference on Public Administration and Development Alternatives (IPADA). Kativhu, S., 2019. Criteria for Measuring Resilience of Youth-Owned Small Retail Businesses in Selected Rural Areas of Vhembe District, South Africa (Doctoral dissertation, University of Venda).

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Kganyago, J. 2016. Why Do Businesses Fail Even When Funded. Available at: https://www.experthub.info/launch/funding/how-to-guides-funding/whydo-businesses-fail-even-when-funded/ (Accessed 14 October 2019). Ladzani, W., 2010. Historical Perspective of Small Business Development Initiatives in South Africa with Special Reference to Limpopo Province. Problems and Perspectives in Management, 8(3), pp. 68–79. Lambon-Quayefio, M., 2017. Non-Farm Enterprises and the Rural Youth Employment Challenge in Ghana. Lawrence, F. and Rogerson, C.M., 2019. Local Economic Development Agencies and Peripheral Small Town Development: Evidence from Somerset East, South Africa. Urbani izziv, 30, pp. 144–157. Ledwith, A. and O’Dwyer, M. 2009. Market Orientation, NPD Performance, and Organisational Performance in Small Firms. The Journal of Product Innovation Management 26, pp. 652–661. Limpopo Economic Development Enterprise (LEDE), 2006. Roots for Growth and Development. Available at: www.limdev.co.za/about.htm (Accessed 13 December 2018). Luloff, A.E., Swanson, L and Bridger, J. 2008. Community Agency and Local Development. University Park, PA: Pennsylvania State University Press. Mahembe, E, Chiumya, C. and Mbewe, A., 2011. Literature Review on Small and Medium Enterprises’ Access to Credit and Support in South Africa. Underhill Corporate Solutions. Mike, H. and Penny, K., 2016. GEM South African Report 2015/16 Mikusova, M. and Janeckova, V. 2010. Developing and Implementing Successful Key Performance Indicators. World Academy of Science, Engineering and Technology 42, pp. 969–981. Mohutsiwa, M., 2012. Strategic Entrepreneurship and Performance of Small and Medium Enterprises in South Africa (Master’s dissertation, University of the Witwatersrand). Mudimeli, R.N., 2019. Determining the Functionality of Traditional Leadership Council as Agent of Rural Development in Vhembe District, South Africa (Doctoral dissertation, University of Venda). Nemaenzhe, P.P., 2010. Retrospective Analysis of Failure Causes in South African Small Businesses (Doctoral dissertation, University of Pretoria). Nkondo, L.G., 2017. Comparative Analysis of the Performance of Asian and Black-Owned Small Supermarkets in Rural Areas of Thulamela Municipality, South Africa (Doctoral dissertation, University of Venda). Olawale, F. and Garwe, D., 2010. Obstacles to the Growth of New SMEs in South Africa: A Principal Component Analysis Approach. African Journal of Business Management, 4(5), pp. 729–738. Phillipson, J., Tiwasing, P., Gorton, M., Maioli, S., Newbery, R. and Turner, R., 2019. Shining a Spotlight on Small Rural Businesses: How Does Their

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Vhembe District Integrated Development Planning (IDP) Review, 2019/2020. Available at: http://www.vhembe.gov.za/documents/idp (Accessed 25 May 2021). Vixathep, S., 2014. Entrepreneurship, Government Policy and Performance of SMEs in Laos. GSICS Working Paper Series. Weinzimmer, L.G. and Manmadhan, A., 2009. Small Business Success Metrics: The Gap Between Theory and Practice. International Journal of Business Research 9(7), pp. 166–173. Yaghoob, M. and Shamsodin, N. 2011. The Relationship Between Personal Qualities of Entrepreneurs and Their Success in Small Industries: An Empirical Study in Iranian Culture. China/USA Business Review, 10(7), pp. 551–572.

CHAPTER 4

Understanding Health Systems Within a Decentralized and Accountable Development Framework: Trust in the Balance Gbadebo O. A. Odularu, Chuka Onyekwena, and Adeniran Adedeji

4.1

Health Systems Accountability

Aggregate Health Financing comprises the expenditure adequacy, effectiveness, and efficiency. The Government expenditure on health seems comparatively meagre and it is far below the Universal Health Coverage requirement. For instance, Nigerians largely finance their health expenses from out of the pocket (see Fig. 4.1). In terms of efficiency and effectiveness of health expenditure: the distribution of expenditure aligns with

G. O. A. Odularu (B) Virginia Military Institute (VMI), Lexington, VA, USA e-mail: [email protected]; [email protected]; [email protected]; [email protected]; [email protected] Bay Atlantic University, Washington, DC, USA © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4_4

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the government health priorities as articulated in the Health Strategy. However, due to scarcity of resources, a few priorities are significantly under-resourced or at risk because of post-COVID consolidation. It is also relevant to note that budget processes and procedures are influencing the flow of funds in the health systems. Government or compulsory health insurance is available to government workers or civil service officers. Figure 4.2 shows that the Federal Government’s total health budget and budget health sector have been rising over time (2014–2020). However, the percentage of health in total budget has been declining for the 7-year period, despite an increase in global spending on COVID-19 since 2020. Decentralization of health spending—primary, secondary, and tertiary spending: there are different levels of health spending decentralization. For instance, across the States and Local Governments or based on four levels of facilities—primary, secondary, tertiary, and medical. Apparently, tertiary health facilities continue to consume the highest share of government spending, compared to other levels (Fig. 4.3). In terms of categorizing the Nigerian health spending into recurrent and capital expenditure, greater percentage of the annual health spending are invested in recurrent at the expense of capital expenditure (see Fig. 4.4). In other words, about 86% of health funding is taken

Nigerian Economic Summit Group (NESG), Lagos, Nigeria G. O. A. Odularu · C. Onyekwena · A. Adedeji Centre for the Study of Economies of Africa (CSEA), Abuja, Nigeria e-mail: [email protected] A. Adedeji e-mail: [email protected] G. O. A. Odularu United States Institute for Advancing Community Development Through Interdisciplinary Scientific Research and Education (USI-ADMIRE), Washington, DC, USA Socioeconomic Research and Applications and Projects (SERAP), Washington, DC, USA Mondo Forte, Washington, DC, USA

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16,000.00 14,000.00 12,000.00 10,000.00 8,000.00 6,000.00 4,000.00

2,000.00 2012

2013

2014

2015

2016

2017

2018

Domestic General Government Health Expenditure (GGHE-D) per Capita in US$ External Government Health Expenditure per Capita in US$ GGHE-D as %GGE CHE as % GDP Voluntary health care payment schemes Household out-of-pocket payment

Fig. 4.1 Out-of-pocket continues to lead 12000.00

10000.00

8000.00

6000.00

4000.00

2000.00

0.00 2014

2015

FRN Budget (in Billion Naira)

2016

2017

2018

Budget Health Sector (in Billion Naira)

Fig. 4.2 Health budget and percentage of total budget

2019

2020

% of total Budget

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Total Administration Medical/ Health R&D/ Institutes Tertiary Health Facilities Secondary Health Facilities

Primary Health Facilities -

2021

2020

2019

2018

200,000,000,000.00

400,000,000,000.00

2017

2014

2016

2015

2013

2012

Fig. 4.3 Total health sector expenditure across facilities

Fig. 4.4 Recurrent and capital expenditure, 2012–2020

by recurrent expenditure, and there is also a huge disparity between the amount approved in the health budget and the released funds. This implies that capital spending is barely one-sixth of the recurrent spending, and capital spending keeps declining over time, especially in the face of the pandemic because the government needs more funds to provide safety nets and other palliative programmes to the populace. The efficient utilization of the lean financial resources can provide solutions to health system reforms. As articulated in the forward budget, the adequacy of resourcing is improving significantly. More specifically, the has been significantly rising pandemic-related spending in 2020 and 2021, and this is likely to be maintained.

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Despite the regular protest by doctors for better conditions of service, the National Health Act 2014 and the Yayale Ahmed Interprofessional Health Committee Report should be well implemented, ranging from health insurance, medical and dental regulatory and other health regulatory Acts.

4.2 Health Sector Reliance on International Assistance From 2020 to 2019, Nigeria’s receipt of health aid is among the highest when compared with—Ghana, Kenya, Nigeria, Sierra Leone, Brazil, and Bangladesh. Figure 4.5 shows that Nigeria recorded the highest total health aid in 2012, 2013, 2014, 2015, 2016, 2017, 2018, and 2019. The United States Government has been the leading aid provided to Nigeria’s COVID-19 and humanitarian support. COVID pandemic and humanitarian aid receipt in 2020 and 2021 compare favourably against government commitments and urgent needs to bring households, businesses, and the economy back better. The additional financing for the pandemic from selected development partners, especially the United States is likely to be maintained and sustained over the next half a decade (Fig. 4.6).

Fig. 4.5 Total health aid in selected countries (2010–2019)

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Fig. 4.6

4.3

Source of COVID-19 and humanitarian support

COVID-19 Impact and Vaccination Access

The defective health system was further exposed by the COVID-19 pandemic, thereby underscoring the need to strengthen the health system. A few health priorities which are grossly under-resources or at risk due to post-COVID consolidation is the health care of the vulnerable as well as the internally displaced people (IDPs). For instance, the World Bank–Nigeria COVID-19 Action Recovery and Economic Stimulus (CARES) Programme is a $750 million state-driven initiative aimed at alleviating the tumultuous impact of COVID-19 pandemic on households, communities, and businesses. The World Bank–Nigeria– Bank of Industry CARES Programme implemented Result Area 3 as a targeted relief programme for the Micro, Small, and Medium Enterprises (MSEMEs). A good understanding of the impact of the pandemic on the Nigerian COVID-19-related spending requires a well-articulated compilation of the coping strategies implemented by households, businesses, and governments towards adjusting to the unprecedented shock. For instance, about 4 in 5 Nigerians suffered a reduction in income due to the inability to work or earn income. Furthermore, due to low demand and declining supply chains stemming from movement restrictions and economic closure, more than half of employers were unable to meet the salaries of their staff. As the pandemic caused unprecedented economic loss and bankrupted healthcare systems in Nigeria, the Nigeria government urgently needs to shockproof its economy from future pandemic and other health crises by (i) enhancing socioeconomic resilience, especially among vulnerable communities, and (ii) scaling COVID-19 vaccine production and access. In spite of the low mortality rate due to the pandemic, the Nigerian

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Table 4.1 Nigeria’s ODA trends 2014–date Years

ODA commitments to Nigeria (USD billion)

% GNI

2014 2015 2016 2017 2018 2019 2020

1395.7 1088.5 1293.3 1638.5 1410.8

0.45 0.50 0.63 0.92 0.87

economy contracted, and it became more precarious for Nigeria to devote at least 15% of its national budget to improve and maintain strong healthcare systems.

4.4

ODA–AID

This sub-section takes a short to medium-term outlook for ODA (including any transition strategies for major partners) based on recent trends and a review of key donor strategies). . Total ODA, Remittances and FDI Trends: Overtime, ODA1 continues to play a fundamentally crucial role in enhancing Nigerian’s financing architecture before, during and after the pandemic. Based on OECD September 2021 Statistics, the ODA commitments to Nigeria have been quite unstable in the pre-pandemic era. For instance, the ODA volume declined continually from USD1395 billion in 2014 to about USD1293 billion in 2016, rose to USD16,385 billion in 2017, and fell to USD1410 billion in 2018. However, in relative terms, ODA commitments as a percentage of Gross National Income (GNI) as shown in Table 4.1, reveals that ODA’s commitment as a percentage of GNI was 0.45% in 2014, and it kept rising until 0.92% in 2017, but fell to 0.87% in 2018.

1 ODA comprises grants, loans, other long-erm capital total commitments, including technical cooperation.

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4.5

COVID-Development Assistance

According to UN OCHA Financial Tracing Service, Nigeria remains one of the first twenty largest COVID-19, humanitarian and development grantees who are at high risk of impact and experiencing a hugely protracted crisis. Though Nigeria ranks nineteenth among twenty countries, African countries such as DRC, South Sudan, and Haiti are categorized as a very high recipient of COVID-19-related ODA. However, Nigeria experienced development partners’ assistance as well as more flexible ODA modalities during the COVID recovery period. In fact, the humanitarian crisis and food security took the center stage of humanitarian aid due to the COVID-19 crisis (as reported to UNOCHA FTS). This position may not be unconnected with religious and cattle-rearing or free grazing security challenges and its adverse impact on other livelihoods of the vulnerable and poor Nigerians. The attention shifted to emergency food access, telecommunication, and health in the face of COVID-19. The question confronting the Nigerian government is how is the current PFM and well targeted ODA addressing this emergency and how do you think the intersection of increased spending on food, health, economic infrastructure, and education provide lasting and sustainable solutions? What role would the private sector play vis-à-vis Nigeria’s leading ODA investors? Many of the limited number of trained health professionals leave the country due to a lack of health infrastructure and in search of higher financial returns abroad. Despite the regular protest by doctors for better conditions of service, the National Health Act 2014 and the Yayale Ahmed Interprofessional Health Committee Report should be well implemented, ranging from health insurance, medical and dental regulatory and other health regulatory Acts. Bill for the Law establishing the National Blood Service Commission (NBSC) will enhance access to safe blood and blood products, based on the National Blood Transfusion Service (NBTS) Ten Year Strategic Plan, 2021–2030, as well as the One Million Safe Blood Units Initiative (OMBUI). Figures 4.7, 4.8, 4.9 show that Nigeria has the least ODA commitments in Africa. The ODA commitments for the periods 2013–2015, as well as 2016–2018 are the lowest when compared with the same periods in Kenya and South Africa. For every year between 2010 and 2018, where ODA per capita in Nigeria was barely above 17% (representing an average annual ODA per capita of 13.95%), the

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average annual ODA per capita for Ethiopia, Kenya, South Africa, and SSA from 2010 to 2018 were respectively 38.43, 53.29, 21.27, and 48.44%. This may be explained by the fact that Nigeria remains the biggest economy in Africa. However, the paradox is that Nigeria is also of the poorest and hungriest countries in Africa. Nigeria has a combination of development partners (including countries, foundations, agencies, and NPOs) who remain its main ODA players who invest in diversified sectors of interests such as health, agriculture, energy, telecommunication, education, etc. based on development partners’ corporate and national vision. These partners who have been quite consistent for the last year include inter alia: United States, Germany, Canada, France, IFAD, UNDP, Sweden, Netherlands, Oxfam, Switzerland, Sight savers, Adam Smith International, Australia, Malaria Consortium, UNIDO, Mercy Corps Europe, Oxfam GB, Netherlands Enterprises, Ireland, Belgium, Spain, Indigo Trust, Global Giving, WYG International, New Zealand, Catholic Agency, Finland, etc. Figure 4.10 shows the six of the leading sectors in terms of ODA total allocations between 2010 and 2019. The leading sector, is population policies, programmes, and reproductive health, followed by health and the third sector is economic infrastructure and services. ODA remains the major driving of the health and economic infrastructure sectors. For instance, for the 2010–2019 decade, population policies,

Fig. 4.7 Nigeria’s ODA in comparison with other African countries’ ODA

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Fig. 4.8 Average ODA commitments in Kenya, South Africa and Nigeria, 2013–2015; 2016–2018 35000

30000 25000 20000 15000

10000 5000 0

Sector

1000: Total All Sectors

450: Total Sector Allocable

Fig. 4.9 ODA flows as reported by creditor system Economic Infrastructure & Services, Total Other Social Infrastructure & Services, Total Government & Civil Society, Total Water Supply & Sanitation, Total Population Policies/ Programmes & Reproductive… Health, Total Education, Total

0 2010-2019 2016

2013

1000

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Fig. 4.10 Prioritization driven allocation of ODA among the leading sectors

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programmes and reproductive health, health and economic infrastructure and services recorded 5.38 billion, USD 4785 billion, and USD 4261 billion, respectively. Figure 4.11 also shows that health (in general) comprises the highest annual ODA commitment change from 2018 to 2019. It is pertinent to note that ODA were channeled by the government through respective MDAs safety nets initiatives financed by Nigeria’s donor during the COVID crisis, thereby facilitating government response towards significantly enhancing anti-cyclical financing during the 2020 fiscal year vis-à-vis the changing or unchanging modalities implemented by donors during the year 2020 (Fig. 4.12). With its more transparent PFM, there are bright potentials for the increasing role, importance, and contribution of ODA in the light of Nigeria’s post-pandemic rising fiscal debt trap. In fact, during the pandemic, ODA and most sources of foreign support collapsed due to the peculiar nature of the pandemic and the need for most development partners to fortify households and businesses at their home fronts. However, in the post-pandemic era when socioeconomic reprioritization is being intensified to bring enterprises and the economy back stronger, ODA is becoming more effective for Nigeria fiscal stability and in the context of the medium-term fiscal squeeze as well as efficient PFM.

Mineral Resources & Mining Energy Energy generation, renewable sources Population Policies/Programmes & ReproductiveÖ Emergency Response Post-Secondary Education Trade Policies & Regulations Other Multisector Water Supply & Sanitation Administrative Costs of Donors Government & Civil Society-general Other Social Infrastructure & Services Basic Education Basic Health Disaster Prevention & Preparedness Reconstruction Relief & Rehabilitation Energy Policy Health, General -200%

-100%

0%

100%

200%

300%

Fig. 4.11 Intersectoral allocation of ODA with focus on health

400%

500%

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100% 90%

All other f unding

80% Belgium, Government of

70% 60%

Central Emergency Response Fund

50% Norway, Government of

40%

30%

Japan, Government of

20% Canada, Government of

10% 0% Funded (US$)

Funded (US$)

Funded (US$)

Switzerland, Government of

Fig. 4.12 The UN humanitarian funding in Nigeria by donor

4.6 Widening Budget Deficit in the Face of Huge Debt Trajectory Nigeria’s trade sector, via its service sector makes up about 64% and 55.6% of its GDP growth respectively. The Trade Sector which currently contributes about 17% of GDP rose by a whopping 22% in Q2 2021, its fastest since 2016. Despite strategic revenue management tools introduced in the 2021 budget, such as deregulation of the petroleum products prices, ongoing verification exercise with IPPIS, and implementation of service-based electricity tariffs, one of the challenges confronting the government’s rising pressure to generate adequate revenue in the face of threatening global oil prices and its accountability implications. 23% of GDP but the debt serving is huge. Hope to increase from 8 to 15% of revenue, and also increase economic growth to about 7% per annum. The 2021 budget may be an ambitious one, thereby placing pressure on Nigeria’s fiscal landscape. Popularly referred to as a high debt risk nation by the World Bank and IMF, Nigeria, experienced the worst recession in thirty-three years due to the COVID-19 pandemic. As the economy reopens for business after the COVID-19 pandemic lockdown policies, According to the Debt Management Office, the Nigerian government spent about N1.02 trillion on domestic and foreign debt service during the Q1 2021, which represents a 35.7% increase over corresponding period in Q1 2020. The National Bureau of Statistics

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foreign trade statistics shows that Nigeria’s revenue Stehniei (2021) dwindles (through the reduction in crude oil value from N2.52 trillion to N1.93 trillion in Q1 2021, it is noteworthy to note that its debt service fee rises. By implication, Nigeria is spending most of its revenue on servicing debts, indirectly lending itself to more future loans, especially for funding capital projects. VAT related revenue may dwindle further because OPSN World Bank Group (2019) is seriously concerned about ongoing conundrum in the collection and remittances of VAT to relevant authority at with state or federal level. Thus, amendments are being sought by the Federal Inland Revenue Service (FIRS), through the Southern Governors’ Forum, at the National Assembly on the VAT ownership and collection controversy. For instance, the OPSN comprises the Nigerian Association of Chambers of Commerce, Mines and Agriculture (NACCIMA), Manufacturing Association of Nigeria (MAN); Nigeria Employers Consultative Association (NECA), Nigeria Association of Small-Scale Industries (NASSI), and Nigeria Association of Small and Medium Enterprises (NASME), being led by its chairman and NECA President–Mr. Taiwo Adeniyi. Though OPSN is not against taxes and levies payment, the state versus federal uncertainty undermines business competitiveness and sustainability. Thus, amendments are being sought by the Federal Inland Revenue Service (FIRS), through the Southern Governors’ Forum, at the National Assembly on the VAT ownership and collection controversy. Increasing total debt profile rose at the States and Federal levels. The DMO shows a cumulative domestic debt stock of N4.12 trillion and external debt of N1.95 trillion summing up to at least N6.07 trillion as of March 2021. The thirty-six States continually depend on federal allocation to the tune of about 65% without putting in place an effective internally (state-level) generated revenue strategy. Among the first set of huge debtors at the State levels are Lagos, Bayelsa, Imo, Jigawa, CrossRiver, Gombe, Edo, Akwa-Ibom, Delta, Rivers, Ekiti and Ogun States, representing huge debt burdens and government inability to implement a workable internally generated revenue, thereby spending the percentage of federal allocation to servicing both recurrent expenditure and debt, and impossible to fund states-level infrastructural projects. The rising debt, high debt service to revenue ration and borrowed funds utilization are critical to bringing the economy back better in the post-pandemic era. The modified 2021 fiscal plan provided a supplementary revenue projection of about N135 billion on a total supplementary expenditure

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of N982.7 billion, an indication that the supplementary budget would increase the annual deficit by N847.729 billion, in which the deficit will be financed by through a debt of about N802.102 billion; aid/grants N6.045 billion; and restructured loans of N39.582 billion. By 2021, N3.1 trillion to be borrowed form local investors to fund the N6.5 trillion fiscal deficit, while the balance will be funded through external borrowing. In order to attract lending from local investors towards realizing its domestic borrowing target for the year, the FG CBN and DMO increased interest rates on FGN Bonds and Nigeria Treasury Bills (NTB) and the FGN Savings Bonds. The bottlenecks created by regulatory authorities such as the Twitter ban and fintech clampdown (first by the Securities and Exchange Commission (SEC) and CBN, remind donors and development partners of the volatility of Nigeria’s economic ecosystem in favour of her businesses. Though the FRC was established in 2007 to enforce the FRA provisions, but the FRC has struggled to generate some N2 trillion for the consolidated revenue fund (CRF). FRA implementation has scaled inherent weaknesses and failed to identify and deter fiscal delinquency. Public sector digitalization and PFM reforms such as Treasury Single Account (TSA) tools are playing fundamental roles in preparing Nigeria for the post-COVID-19 and digital era. Nigeria continually strengthens its PFM lever towards equalizing financial and budgetary disproportions as it confronts the macroeconomic fluctuations and socio-economic shocks which are heralded by the COVID-19 pandemic. Apparently, despite the progress being recorded in enhancing transparency, accountability and openness in its PFM system, Nigeria still faces some inherent challenges. Poor reporting and opaque management of government finances as well as their misalignment with the State’s development priorities were compounded by the COVID-19-driven economic lockdown and social distancing policies. However, the quality and timeliness of the annual financial statement and in-year budget reporting are gradually improving. For instance, the number of bank accounts that MDAs and governmentrelated projects operate.

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4.7

67

Repealing and Replacing the FRA

Budget deficit represents about 3.62% of GDP, well above the 3% threshold as stipulated in the Fiscal Responsibility Act (FRA) 2007. Despite FRA’s role in curbing wastages, checking corruption, and fostering PFM accountability, its effectiveness has waned considerably. Consequently, the National Assembly has initiated a bill to strengthen the law while streamlining its powers towards enhancing fiscal discipline, accountability, transparency, and macroeconomic certainty. The bill seeks to curb financial fraud and wastage within MDAs, while expanding the functions and powers of the Fiscal Responsibility Commission (FRC), thereby correcting the current situation where statutory obligations imposed by the FRA are routinely ignored by many MDAs and government-owned enterprises (GOEs). Despite the government’s war on corruption, there is increasing looting of public funds as evident in inherently huge fiscal irresponsibility. For instance, the House of Representatives Committee on Public Accounts expressed a level of impunity in which about 65 public agencies had never been audited since they were established. The amendment bill will strengthen the FRC to be a more professional and broad-based representation of its leadership. The key dates in the budgeting systems are increasingly aligning with the national and state levels’ fiscal visions and goals. Evidence in this regard is the increasing engagement of key PFM players, institutions, and legal frameworks to enhance multi-stakeholders’ ownership, transparency, and accountability. Though oil review accounts for about 49.6% of general government revenue in 2019, yet the oil sector contributes about 10% to the national income, thereby increasing the susceptibility of the economy to persistent external shocks, as a resource dependence and low budget performing economy. The government enacted the 2020 Finance Bill to harmonize the different tax policies and widen the tax net to include digital platforms with consideration of economic presence (Adeniran et al. 2021). The Nigerian Federal Ministry of Finance reported that VAIDS raised an additional NGN70 BILLION (US$228 million) in revenue, representing less than 1% of additional revenue per annum since the policy was introduced. These reforms at federal and state levels. The seeming fragility of the PFM systems reveal the weak capacity of the health and agriculture sectors to meet the food and healthiness needs of the teaming population. As the

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country intensifies its PFM strategy and it emerges from the pandemic, it is a great generational opportunity to leverage efficient PFM to shape more sustainable socioeconomic policies, especially for the vulnerable and poor communities. Regarding the PFM dynamics and implications for health, it is becoming more transparent and accountable, thereby portending positive implications for healthcare service delivering and planning. In the forward budget and the pandemic shock implications, there is insufficient funding which results in increasing resourcing challenges for health priorities. Based on the credibility and risk implications of the health budgetary scenario, there is an increasing need to re-brace the health systems for a post-pandemic era by resharpening the workability of policy programming and prioritization in a more data-driven approach.

4.8 Conclusion and Policy Implications for Accountability As Nigeria implements the sixteen commitments to its 2019–2022 Action Plan, it is believed that Nigeria’s Fiscal Responsibility Act will strengthen Nigeria’s financial reporting and ensure better accountability for public funds and resources. Consequently, the country should step up its financial and budgetary optimization tools towards preventing the growth of public debt and budget deficit in GDP, thereby deploying a more integrated PFM Information System towards fostering maximizing institutional resources for generating socioeconomic transformation. Estonia’s digital PFM is a good example of how an integrated, modern and efficient PFM Information System leverages budget appropriations, commitments, financing limits, verifications, and payment transactions instruments to support the government in budget preparation, execution, management, economic planning, as well as the interfaces between these strategic units. The tax revenue collection side of the PFM coin is becoming increasingly transparent due to digitalization. For instance, despite the digital divide, digital security enabled mobile phone registration, and Knowyour-customer check enhance Nigeria’s tax authorities, thereby making tax authorities to send facilitated and compliant nudges to taxpayers’ phones. Subsequently, taxpayers are able to download prepopulated templates to their phones, thereby reducing the need for auditing. Nigeria raised its VAT rate from 5 to 7.5% in February 2020, without protest, and making Nigeria well below the 20% threshold at which fraud tends to rise.

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In view of these daunting capacity-strengthening challenges and based on lessons emerging from the new powers in the South, enhancing capacities for integrating accountability and transparency in sustainable development planning has proven to be one of the driving forces towards improving the outcomes and effectiveness of development interventions. Successful development planning requires inter alia: the full capacity to collect, compile, produce and utilize data necessary for assessing and monitoring the integration of accountability frameworks and evidencebased policymaking in the implementation of national planning processes. Digitally driven funding and fraud management strategies are crucial in keeping up with health systems and catalyzing utmost utility across any entire patient’s healthcare journey (Gans & Gandal, 2019). With the pervasive proliferation and adoption of innovative technologies such as machine learning, blockchain, cloud computing, artificial intelligence, AI enhances fraud detecting capabilities and public private partnerships should help patients manage health risk lifecycle, detect abuse, prevent payment fraud, reduce health disparities, and predict abuse.

References Adeniran, A., Ekeruche, A., and Onywkwena, C. (2021). The role of social influence in enforcing tax compliance: Experimental evidence from Nigeria. ICTD Working Paper 122. Brighton, Institute of Development Studies. https://doi. org/10.19088/ICTD/2021.011 Gans, J. S., and Gandal, N. (2019). More (or less) economic limits of the blockchain. Available at SSRN: https://doi.org/10.2139/ssrn.3494434 Stehniei, O. (2021). Development strategies of the world’s leading banks in the era of technological transformation. Electronic Kyiv-Mohyla Academy Institutional Repository. http://ekmair.ukma.edu.ua/handle/123456789/21008 World Bank Group. (2019). Nigeria biannual economic update: Connecting to compete. http://www.worldbank.org/en/country/nigeria https://docume nts1.worldbank.org/curated/en/769551524576691390/pdf/WPNigeriaBia nnualEconomicUpdateAprilFinalVersion-PUBLIC.pdf

CHAPTER 5

“Political Will” as an Impediment to Accountability of Law Enforcement in Nigeria Barr Obisanya Tope Ayo and Ishmael Iwara

5.1

Introduction

This chapter draws on the UNODC accountability mechanism, to elucidate the challenges deterring effective incarceration of the law enforcement actors from proper accountability in Nigeria. In the context of this study, the term “law enforcement” is used interchangeably with the Nigerian Police Force (NPF), given that the latter is the main body of most law enforcement agencies and has the constitutional mandate to maintain law and order in the country.

B. O. T. Ayo (B) Faculty of Law, North West University, Potchefstroom, South Africa e-mail: [email protected]; [email protected] I. Iwara Graduate School of Business and Leadership, University of KwaZulu-Natal, Durban, South Africa

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4_5

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Like most other developing nations in the world, the root cause of states’ failure with respect to human rights violations in Nigeria has not been well-crystallised. This has limited the essential knowledge of the precise solution to mitigate the problem—a major reason we see a surge in such issues, despite policy reforms and actions being taken.1 Empirical evidence reveals that most states have embarked on distinct policy reforms to enforce accountability and human right, however, the current state of affairs in the subject matter is indifferent to the former,2 leaving researchers with speculations that the core issue underpinning the challenge is still to be uncovered to determine an appropriate action for a sustainable solution. From another point of view, the increasing rate of human rights violations could be anchored on the lack of political will resulting in effective policy reforms and implementation.3 The state’s political will in this context can be linked to (1) the will to pursue with rigour an understanding of the term “accountability of law enforcement” and its complexity; (2) the will to understand why it is an arduous task to hold the law enforcement accountable for human rights violation and (3) the will to initiate and implement accountability reform programmes/policies and proffer credible sanctions and sustainable reform efforts. It is, therefore, appropriate to argue that the concept of “political will”, as a reason for the state’s failure to implement policy reforms aimed at holding erring law enforcement personnel

1 Miller 2002 Vera Institute of Justice 1; Okenyodo 2016 African Security Brief ;

Alemika “Enhancing Police Accountability Systems in Nigeria: The Missing Links”; UNODC Handbook on Police Accountability, Oversight and Integrity; Miller “Civilian Oversight of Policing: Lessons from the Literature”; Okenyodo 2016 African Security Brief ; Okenyodo 2016 African Security Brief . 2 Mckenzie “Civilian Oversight of Policing; The South African Experience”; Scheye The Effectiveness of Police Accountability Mechanisms and Programs; Scheye The Effectiveness of Police Accountability Mechanisms and Programs; Scheye The Effectiveness of Police Accountability Mechanisms and Programs. 3 Mujki´c Political Will: A Short Introduction Case Study—Bosnia and Herzegovina 7; AI Willingly Unable. ICC Preliminary Examination and Nigeria’s Failure to Address Impunity for International Crimes; AI Willingly Unable. ICC Preliminary Examination and Nigeria’s Failure to Address Impunity for International Crimes 12; Alemika “Enhancing Police Accountability Systems in Nigeria: The Missing Links” 14; Okenyodo 2016 African Security Brief 1; Alemika “Police Accountability in Nigeria: Framework and Limitations” 52; AI Nigeria Security Forces: Serving to Protect and Respect Human Rights? 17; Scheye The Effectiveness of Police Accountability Mechanisms and Programs 11; Agbor Accountability of Law Enforcement Personnel for Human Rights Violations.

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accountable for human rights violations is prevalent, however, its correlation to public accountability and policy reforms remains vague and under-researched.4 In the light of the above summation, law enforcement, virtually in all jurisdictions has immense power bestowed by constitutional and statutory provisions to maintain law and order, within and outside its jurisdiction, if the need arises. As an institution with such colossal power, if left autonomous and its conducts unaccounted for, there is an irrevocable presumption that such liberty may likely be abused.5 Another concern lies in the fact that “law enforcement accountability” is a broad concept,6 as a result, it is often not well-understood and/or sufficiently explored. This leaves researchers with the argument that, for law enforcement officials to fulfil their mandate, hence, be held accountable, there should be a clear understanding of—whom to be accountable to what accountability mechanism(s) may be deployed; how they may be arrayed to address each aspect of accountability,7 which behavioural accountability delinquency outcomes need to be checked and what factors hinder the accountability of the law enforcement officials. Only when these issues are understood from a scientific point of view, can proper recommendations be made to enhance the accountability of law enforcement. This remains a daunting task for Nigeria and many other countries in the world. Lack of essential knowledge on accountability of law enforcement as it concerns Nigeria and other countries has become a topical issue invoking scholarly interest and debates from different backgrounds globally.8 As a result of the distinct disciplines, viewpoints and diversity of actors engaging with the concept, there have been divided opinions regarding

4 Mujki´c Political Will: A Short Introduction Case Study—Bosnia and Herzegovina 7; Post et al. “Defining Political Will” 676; 2010 Politics & Policy 1; Malena 2009 Research Gate 11. 5 Miller “Civilian Oversight of Policing: Lessons from the Literature” 28. 6 Walker and Archbold The New World of Police Accountability 8; Rosenbaum 2016

International Journal of Police Strategies and Management. 7 Scheye The Effectiveness of Police Accountability Mechanisms and Programs 5. 8 Reiner The Politics of the Police.

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the institution and mechanisms that can best hold law enforcement officials accountable for human rights’ violations. For instance, Barley9 shows a preference for internal disciplinary procedures as being more effective. On the contrary, some scholars have advocated for an external accountability mechanism and/or a mixture of both the internal and external accountability mechanisms.10 This study considers a synergy of all the above-mentioned mechanisms in conjunction with the United Nations on Drugs and Crime (UNODC) accountability framework. The essence of such an approach is to distil knowledge from an elaborate and holistic approach to the accountability of law enforcement. It is believed that a combination of these distinct ideologies will comprehensively provide a better understanding of issues around law enforcement officers’ accountability. An overview of the UNODC accountability mechanisms reflects a commendable theoretical framework that might aid the accountability of law enforcement. The point often overlooked, however, is that as germane as the mechanisms might be, without the political will of the political actors and stakeholders in authority, to genuinely initiate and promote law enforcement accountability, these mechanisms are bound to be mere theoretical frameworks that lack implementable capacity. In other words, in the absence of political will of political actors and police corporations, law enforcement accountability is bound to suffer.11 In collaboration with this summation, scholars have attributed the lack of political will and lack of adherence to the rule of law, as reasons for the failure to hold law enforcement officials accountable for human rights’ violations such as, extrajudicial killings.12 In Nigeria for example, despite all policy and institutional reforms effected to hold law enforcement officers accountable for human rights violation, incessant extrajudicial killings and human rights violation are at

9 Bayley Patterns of Policing: A Comparative International Analysis 177–178; Chukwuma “Internal Disciplinary Systems as Important Complement to—External Oversight of Police in Nigeria” 59. 10 Alemika “Enhancing Police Accountability Systems in Nigeria: The Missing Links”

20. 11 Post et al. “Defining Political Will” 676; 2010 Politics & Policy 659; Scheye The Effectiveness of Police Accountability Mechanisms and Programs 11. 12 Alemika “Police Accountability in Nigeria: Framework and Limitations” 45; Agbor 2017 Potchefstroom Electronic Law 7.

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their peak.13 According to Martínez,14 political authorities are the principal actors who can change a country’s culture of misbehavior, like corruption and can act for the common good and against their selfinterest, when appointing political leadership and allocating powers to the different spheres of state institutions and/or affecting any policy reforms. The drawback here lies in the fact that the political will of some political actors is not expressily addressed in the policy before reforms and implementation, specifically in this stance, as a concept hindering law enforcement accountability. In other words, the existing legal frameworks are simply crafted without the prognosis of the possibility of political interference and/or political will to hold law enforcement officers accountable for human rights violations. These gaps, as will be shown, have hence encouraged law enforcement officers to violate human rights without any form of redress.

5.2

Research Methodology

A doctrinal approach was used to review and analyse extant literature, policy documents, newspapers, journal articles, books, conference papers, archival materials and internet-based documents on political will and accountability of law enforcement agencies. This approach was ideal for investigating the research question for corroboration of ideas from two different fields of study, namely, law and politics. As said, political will is the sine qua non of policy success, hence a strong relationship exists between the dual concepts, which although recognised by the public, remains largely under-explored and insufficiently explained. In an attempt to uncover this puzzle, the concepts of “political will” and the “accountability of law enforcement” were explored with the aid of secondary data. This was done by evaluating the existing political will as it relates to holding law enforcement officers accountable and exploring the reasons the existing normative and institutional mechanisms have failed to produce the required result—accountability of law enforcement officers. We relied on model constructs of scholars in relation to political will and explored factors/events identified as a motivational construct for

13 Howel 2019 Researchgate 15. The Federal Government enacted new laws such as the Nigerian police code of conduct, the Nigeria Police Act 2020. 14 Martínez Building Political Will Topic Guide 1.

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political will. The outcome of the process provided knowledge to enable recommendations to mitigate incessant human rights’ violations by law enforcement.

5.3 Accountability Mechanisms---Definition and Discourse Scholars and institutions have proffered various accountability mechanisms, while some differ objectively, the majority are in agrement, thus have similar components in which law enforcement actors can be held accountable for human rights’ violations. These mechanisms include various options and combinations—internal and external mechanisms15 ; horizontal, vertical, external, diagonal16 ; internal or departmental control, State or governmental control and social control or oversight by civil society17 ; and political, administrative, professional and democratic mechanisms.18 These mechanisms permeate the UNODC19 thresholds which point to—Internal Accountability; Public accountability; Independent accountability; International accountability and Accountability to the State which can be divided among the three branches of government (the executive, the judiciary and the legislature). Table 5.1 expands the definition of the accountability mechanisms.

15 Schedler “Conceptualizing Accountability”; Chukwuma “Internal Disciplinary Systems as Important Complement to—External Oversight of Police in Nigeria” 71–84. 16 Scheye The Effectiveness of Police Accountability Mechanisms and Programs 6. 17 Alemika “Enhancing Police Accountability Systems in Nigeria: The Missing Links”

10–11. 18 Igbuzor “Oversight Agencies and Effectiveness of Police Accountability System in Nigeria: A Critical Reflection”. 19 UNODC Handbook on Police Accountability, Oversight and Integrity 12.

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Table 5.1 UNODC accountability mechanisms S/N

Accountability

Meaning

1.

Internal accountability

2.

Public accountability

3.

Independent accountability

4.

International accountability

5.

Accountability to the State

Internal accountability is assured through an effective internal chain of command that includes the reporting system and internal disciplinary system. Public accountability is any mechanism through which police are accountable to the public either directly or indirectly, including community policing forums, civilian oversight boards and the media (use of such mechanisms is also known as “civilian oversight”) Independent accountability refers to any mechanism that does not represent a particular entity, state or civilian, and whose prime concern is the quality and non-arbitrariness of policing, such as a national human rights’ institutions, ombudsmen, police complaints commissions and bodies (this is also known as “civilian oversight”). International accountability refers to scrutiny that police may be subjected to by international human rights treaty bodies such as the Human Rights Committee or regional treaty bodies such as the European Committee for the Prevention of Torture, and in some instances also to specific agreements on oversight laid down in peace accords and other agreements. Accountability to the State can be divided among the three branches of Government: the executive—the police is accountable to the government department responsible, usually the Ministry of the Interior, and to the Auditor General for the spending of the police budget and resource allocation; the judiciary wherein police accounts to the law, judges and prosecutors (this is also known as legal accountability); lastly, the legislature in which the police account to the public through their representatives in parliament and the city council (also called “democratic or political accountability”)

Source Self-generated based on UNODC Handbook on Police Accountability

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5.4 Nigeria Accountability of Law Enforcement Challenges---The Root Cause In Nigeria, the lack of accountability of law enforcement has been traced to the colonial era.20 Chukwuma21 (quoting Odu) noted that the colonial NPF, “was conceived, not as a service organisation for the natives but as an instrument of correction or oppression of the natives”. Based on the notion that NPF was founded in the days of colonialism, Alemika, Asemota and Okenyodo22 submit that the perceived colonialism of the NPF had made it to retain a legacy of guerrilla action with limited public accountability. This argument finds legitimacy in Berg 23 who notes that some countries have maintained their colonial-era laws, rather than a complete overhaul of these laws. These historical narratives have had systematic impacts on the police and policing, despite policy reforms hence, an overhaul of the existing laws of the NPF from a different perspective cannot be overemphasised. To substantiate this standpoint, Okenyodo24 purports that after Nigeria’s 1967–1970 civil war, police accountability was further limited when the force was centralised, as such, the NPF has been used as a political tool for those in power. It is against these premises that the UNODC submits that any attempt to enhance police accountability should always start with an assessment of the country’s current overall situation (covering economic, historic, cultural and rule-of-law characteristics) and its police accountability system, taking an open-minded approach to its specific qualities.25

20 Chukwuma “Internal Disciplinary Systems as Important Complement to—External Oversight of Police in Nigeria” 60. 21 Chukwuma “Internal Disciplinary Systems as Important Complement to—External Oversight of Police in Nigeria” 61. 22 Alemika 1993 Crime, Law and Social Change 189–219; Asemota “Policing Under Civilian and Military Administrations”; Alemika 1988 Police Studies 161–176; Okenyodo 2016 African Security Brief 2. 23 Berg and Howell 2019 Researchgate 8 24 Okenyodo 2016 African Security Brief 3–4. 25 As above.

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In support of UNODC, Scheye et al.26 maintained that every police accountability programme must espouse a clear specific outcome it is intended to achieve with indicators carefully adjusted to align with activities that are justified by reliable theories of change. The scholars further suggest the need to carefully analyze each level of the police chain of command, as well as the political will within each of the police ranks, when determining which reform efforts are most likely to succeed. These pathways to restoring accountability seems to be lacking in the Nigerian system, therefore, should be considered critical instruments for policy reforms and practice. The inability to adopt proper accountability mechanisms explains the reasons insecurity and all forms of human rights violations subsist,27 despite several NPF reforms and institutional mechanisms put in place to hold law enforcement accountable. Acknowledging this weakness, the Police Commission, in collaboration with the Centre for Law Enforcement Education, the Open Society Justice Initiative and the Vera Institute and scholars from various consultative institutions, embark on a workshop to strengthen the existing normative and civilian oversight mechanisms.28 To Miller,29 creating and sustaining mechanism(s) for civilian oversight is often a difficult process. This inference is based on the literature on civilian oversight in some English-speaking countries. Holding law enforcement personnel accountable, however, requires a range of engagements, spanning from strong political support, activists’ support, availability of resources, good management and leadership, and public attitudes. These positions emphasise the need to look beyond simply reactive to proactive approaches to complaints. It is not clear how this can apply in Nigeria where public opinion is of little significance and bureaucracy has become the order of the day. Empirical evidence on issues around lack of accountability has also pointed to pressure resulting from socio-economic standards and political

26 Scheye The Effectiveness of Police Accountability Mechanisms and Programs 10. 27 Hence the clamor for END SARS protest which started around 2015, reaching its

peak in 2021. 28 Alemika Civilian Oversight and Accountability of Police in Nigeria 1–141. 29 Miller “Civilian Oversight of Policing: Lessons from the Literature” 28–44.

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interference in NPF affairs. According to Alemika30 the NPF members are subjected to political, economic and social pressures from different groups to indulge in unethical practices. Lack of effective accountability and oversight mechanism, means the police are likely to yield to partisan interferences to the disadvantage of democratic governance and economic growth. Among several other determinants which have hitherto prompted the unaccountability of the NPF, unethical inter-agency collaboration and coordination, lack of resources, poor synergy between internal and external mechanisms and non-existent political will to implement policies and programmes pose serious threats and should be interrogated (Alemika31 ). The absence of political will to hold the NPF accountable has encouraged the incessant police brutality, weakened oversight institutions and has reinforced the responsible actors’ unwillingness to absorb lessons learned from previous efforts at police reform.32 Yet, the concept of accountability itself has received relatively little research attention hence, it remains poorly defined and understood in the context of holding law enforcement accountable for human rights’ violations.

5.5 Accountability Mechanisms in Nigeria---Discourse and Critique In Nigeria, normative and institutional frameworks are existing mechanisms established to hold the NPF accountable for human rights’ violations. Within the normative cluster, several initiatives, such as the constitution of the Federal Republic of Nigeria (hereafter constitution),33

30 Alemika “Enhancing Police Accountability Systems in Nigeria: The Missing Links”

8. 31 Alemika “Enhancing Police Accountability Systems in Nigeria: The Missing Links”

20. 32 Okenyodo 2016 African Security Brief 1; AI Nigeria Security Forces: Serving to Protect and Respect Human Rights? 17; Amusan 2018 Anthropologist 110; Alemika “Police Accountability in Nigeria: Framework and Limitations”; Osayande “Creating Awareness on Concept and Principles on Civilian Oversight of Police”; Alemika “Enhancing Police Accountability Systems in Nigeria: The Missing Links” 14 and 20. 33 Constitution of the Federal Republic of Nigeria, 1999. Constitution of the Federal Republic of Nigeria, 1999 Constitution of the Federal Republic of Nigeria, 1999.

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the Nigeria Police Act (NP Act),34 the Nigeria Police code of conduct (NP Code)35 and the Nigeria Police Regulations (NP Reg.)36 exists. 5.5.1

The Constitution

Section 215 of the constitution provides for the appointment of an Inspector-General of Police and the Commissioner of Police, who should be appointed by the President and the State governors, respectively. The executives herein may give lawful directives at will, concerning the maintenance of law and order as they may consider necessary. Section 215(5) of the constitution further provides that… “the question whether any and if so what, directions have been given under this section shall not be inquired into in any court”.37 An overview of the above constitutional provisions depicts political actors (executives) who are responsible for the administrative functioning of the NPF. The first noticeable flaw of the constitutional provision in a democratic setting is that section 215(5) places the decisions and or actions made by the said political actors above judicial review. In other words, the President and or the state governors may give whatever directives they presume to be lawful without the courts having the capacity to define if such directives are indeed lawful or not. The concept of separation of power assigns the responsibility of determining the lawfulness or otherwise of an act or conduct in the Judiciary, not the executive. 5.5.2

The Nigeria Police Act

To curb the Police’s long record of abuse of due process and human rights, the government amended the erstwhile 2004 NP Act to make it more relevant to international standards. On Thursday, 17 September 2020, the President signed the new harmonised NPF Bill into law. Barely a month after the passing of the new NP Act, the Nigerian law enforcement during a peaceful protest against the Special Anti-Robbery Squad (SARS) arrested scores of protesters and used lethal force to quell

34 Nigeria Police Act, 2020. 35 Nigeria Police Code of Conduct, 2013. 36 Nigeria Police Regulations 1968 (No. 53) (Chapter 359). 37 Section 215 Constitution of the Federal Republic of Nigeria, 1999.

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the demonstration, contrary to provisions of the Law.38 As a result of the killings, judicial panels were set up to look into the allegation of human rights violations by law enforcement officials. Even as victims suffer from their injuries, during the panel’s hearings and the insurmountable evidence that indeed the law enforcement used life ammunitions, the latter continue to evade responsibility.39 Amnesty international40 in one of its reports stated that over 20 different forms of commissions and panels of inquiry have been set up by various organs of the Nigerian government, including the Federal Government, State Governments, the military and the Senate relating to the conflict in the north-east between 2009 and 2018, most of which relate to conduct of the military operations in the region and/or in response to specific allegations of serious crimes and human rights violations committed by members of the military and CJTF in their operations in the region. In addition, the statutorily independent national human right body, the National Human Rights Commission (NHRC), has set up at least four investigative inquiries between 2013 and 2018. 99 All available information confirms that none of these inquiries have ever led to the investigation and prosecution of members of the military for any crimes under international law.

In another event, scarcely eight months after the enactment of the new NP Act, Mr. Sunday Adeyemo a.k.a. Sunday Igboho, a leader of the Yoruba separatist group who has been clamouring and leading protests for self-determination of the group following human rights violations and attacks by Fulani herdsmen was apprehended at his home at about 1. 30 a.m., by Nigeria’s secret police and the State Security Service (SSS). In the process of the arrest, the SSS damaged the suspect’s vehicles, including his G-wagon, Prado Jeep and some valuable properties including furniture, and windows. In the process, two individuals were

38 The constitution and other relevant legislations precludes the NPF from violating fundamental human right principles such as the right to a peaceful assembly. 39 https://eie.ng/weekly-updates-on-the-endsars-judicial-panels-of-inquiry-no-22/. Weekly Updates on the #EndSARS Judicial Panels of Inquiry—No. 22. 40 AI Willingly Unable. ICC Preliminary Examination and Nigeria’s Failure to Address Impunity for International Crimes 20.

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killed after an alleged gun fight and 13 others (a female and 12 males), were arrested while the principal suspect could not be found.41 On or about 30 days after effecting the said arrest of the Ighoho cohorts, these other suspects were not made to appear in the court of law to either be proved guilty or otherwise. It is worthy to note that despite a second court order granted by the Federal High Court, in Abuja, mandating the SSS to produce the accused in court, the SSS has seemingly refused to obey the court order indicating the need to conduct further investigations. The matter was once again postponed to August 2 for the continuation of the hearing.42 Despite having been granted bail by the High court, the SSS on the 4th of August, adamantly continued to detain the suspects. Eventually almost a month after much persuasion and threats of charge of contempt of court, the SSS released from custody, eight of the arrested suspects.43 Ensuing from the arrest of the Ighoho cohorts, the supporters of the Yoruba self-determination group despite warnings from different government stakeholders not to hold a mega rally protest, embarked on the civil protest on the 3rd of July 2021. During the peaceful protest, the NPF dispersed the crowd at the Gani Fawehnimi Freedom Park in Ojota by firing live ammunition, and tear gas canisters and made further arrests of protesters agitating for their self-determination. As a result of the NPF assault, it was reported that a 25-year-old lady—Jumoke Oyeleke, was shot in the back, alongside others, while fleeing from the scene of the police shootings. The NPF department dismissed the allegation indicating the deceased’s body was found wrapped and abandoned at a distance, far from the venue of the rally and the NPF had nothing to do with the incident, however, the post-mortem report of the deceased revealed that she died of “hemopericardium, disruption to the heart and lungs and missile injury to the chest at the venue of the protest”. To date, there is no evidence holding the NPF and other law enforcement agents accountable for violating the constitutional right of free assembly nor has it compensated the family of the deceased.

41 Ayitogo Premiumtimes. 42 Ejekwonyilo Premiumtimes. 43 Ayitogo Premiumtimes.

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5.5.3

Nigeria Police Code of Conduct

In the year 2013, Vice President Namadi Sambo issued a 20-page booklet titled: Code of Conduct for Officers and Men of the NPF.44 This booklet is viewed as an accountability manual that will reflect International Conventions for Law Enforcement Agents and other domestic laws. The content of the said NP code are as follows; Principle One—Police officers shall conduct themselves, whether on or off duty, in accordance with the Constitution of the Federal Republic of Nigeria and all applicable laws, ordinances and rules enacted or established pursuant to legal authority. Rules . Police officers shall not knowingly exceed their authority in the enforcement of the law; . Police officers shall not knowingly disobey the law or rules of criminal procedure in such areas as interrogation, arrest, detention, searches, seizures, use of informants and preservation of evidence; . Police officers shall not knowingly restrict the freedom of individuals, whether by arrest or detention, in violation of the Constitution and laws of the Federal Republic of Nigeria; . Police officers, whether on or off duty, shall not knowingly commit any criminal offense under any laws of the Federal Republic of Nigeria or any state or local jurisdiction in which the officer is present, except where permitted in the performance of duty under proper authority.

Principle Two—Police officers shall refrain from any conduct in an official capacity that detracts from the public’s faith in the integrity of the criminal justice system.

44 Ogbo Theeagleonline.

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Rules . Police officers shall carry out their duties with integrity, fairness and impartiality. . Police officers shall take no action knowing it will violate the constitutional rights of any person. . Police officers must obey lawful orders, but must refuse to obey any orders the officer knows would require the officer to commit an illegal act. If in doubt as to the clarity of an order, the officer shall, if feasible, request the issuing officer to clarify the order. An officer refusing to obey an order shall be required to justify his or her actions.45 An overview of these police codes shows that they do cover fundamental international principles/standards for law enforcement accountability. Nevertheless, eight years after the launching of the said police code of conduct, insecurity and all sort of human rights violations have been perpetrated by law enforcement agencies, resulting in some being disbanded several times. For instance, the government disbanded the Special Security Squad (SSS) of the NPF in 2014, 2015 and 2017. It is not surprising that the government once again, on the 11th of October 2020 disbanded the police unit linked to the 2020 massacre of youths staging a peaceful protest at the Lekki tollgate in Lagos. The police unit was reinstated and renamed “Special Weapons and Tactics Squad” (SWAT), leaving the human rights violation and accountability issues pending. The government’s conduct, according to the BBC news, was an indication of a lack of political will to address the incessant human rights’ violations by the NPF.46 5.5.4

Nigeria Police Regulations 1968

The NP Reg. 341 explicitly espouse assigning of liabilities of law enforcement for misuse of their powers. The said regulation provides that every police officer shall personally be liable for the misuse of his powers for

45 Nigeria Police Code of Conduct, 2013. 46 Omonobi Vanguard BBC News correspondent.

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any act done over his authority.47 Also, the First Schedule of the same regulation highlighted categories of offences that would attract internal disciplinary processes and sanctions if violated. Unfortunately, like the preceding normative accountability mechanisms mentioned earlier, most disciplinary violations are selectively attended to and/or not reported. In view of the normative frameworks for police accountability for human rights violations as mentioned earlier and the ensuing trending cases, it clearly shows that the non-attention to law enforcement violation of human rights in Nigeria is not entirely due to lack of rules but are rather due to inadequate compliance and/or enforcement of the normative mechanisms.48 The situation can also be attributed to the lack of political will to enforce compliance.

5.6

Institutional Accountability Mechanisms in Collaboration with Political Will

The instantiates defined by the Nigeria Institutional accountability systems include internal accountability, accountability to the State, Public accountability and International accountability mechanisms. 5.6.1

Internal Accountability

Drawing from the UNODC law enforcement accountability framework, Internal accountability is assured through an effective internal chain of command that includes the reporting system and internal disciplinary system. As regards the Nigerian internal disciplinary measures, Section 96(h)(i) and (ii) provide for measures in which erring NPF members may be sanctioned or punished for violating public law. Section 96(h)(i) provides that erring officers: (i) shall be subject to appropriate disciplinary proceedings in accordance with the police disciplinary mechanisms, and

47 Regulation 341 of the Nigeria Police Regulations 1968 (No. 53) (Chapter 359). 48 Alemika “Enhancing Police Accountability Systems in Nigeria: The Missing Links”

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(ii) if found liable shall be recommended for dismissal and charged to court for prosecution in accordance with the relevant laws in the force. An overview of the foregoing provisions seems to be vague in that it is unclear who or which internal disciplinary mechanism has the mandate to discipline or dismiss erring officers from office. For example, the phrase “police disciplinary mechanism” is not properly defined and could raise questions like—Who has the mandate to conduct the disciplinary proceedings—(investigation to the outcome)? If the erring officer is found liable, who shall recommend the dismissal as indicated in the provision? A scrutiny of the Nigeria Police structure depicts a body having three structures, namely—Command, Administration and Organisation. The Command and Organisation structure have their peculiar responsibilities, while, the Administration unit has a departmental structure that is meant to maintain the Force’s discipline “by directing and reviewing relevant policies and instructions”.49 On the other hand, section 16(3)(a) of the NP Act and (b) read together with sections 6(1) and (2) of the Police Service Commission Act (PSC Act) mandate the Police Service Commission (service commission) to appoint, dismiss and exercise disciplinary control over persons (other than the Inspector-General of Police) in the NPF. Failure to answer the aforementioned questions will defeat the expectation of holding the NPF accountable via its internal mechanisms. 5.6.2

Accountability to the State

The NPF is accountable to three state organs, —the Executive, Judiciary and Legislature. In Nigeria, the executive consists of the President, the Deputy President and the Ministers at the Federal level, state governors and heads of Federal and State institutions who are responsible for the development and implementation of policy. Concerning law enforcement accountability, the executive body dominates the Nigeria Police Council (Police Council), which is the principal state organ intended to direct the

49 NPF, Force Structure.

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affairs of the NPF.50 Section 28 of the constitution describes the functions of the Police Council as follows: (a) the organisation and administration of the Nigeria Police Force and all other matters relating thereto (not being matters relating to the use and operational control of the Force or the appointment, disciplinary control and dismissal of members of the Force); (b) the general supervision of the Nigeria Police Force; and (c) advising the President on the appointment of the InspectorGeneral of Police. From the foregoing provisions, all members of the Police Council are political actors except the Chairman of the Police Commission who is an appointee of a political actor, the President, and subject to confirmation by other political actors—the Senate. The said Police Council would have been the best-placed institution to hold the NPF accountable for human rights’ violations due to its proximity to the affairs of the NPF. Unfortunately, there have been allegations pointing to the executive powers using the NPF to protest and front political-self interest.51 An audiotape of a heated session where some executive members ordered a Brigadier General to command his troops to arrest and detain Alliance People Congress members in a plot to guarantee victory in an election is a clear justification of this narrative.52 It can then be argued that leadership in the NPF will often be appointed based on political loyalties rather than merit and competence.53 In addition, the problem of politically nominated leadership is further worsened by the NPF command-and-control structure that is centralised.54 Given that the central power, that is the President, may 50 Section 27 of the constitution established the Police Council. The Police Council comprises of the President is the Chairman; Governor of each State of the Federation; the Chairman of the PSC; and the IGP. 51 Okenyodo 2016 African Security Brief 4; UNODC Handbook on Police Accountability, Oversight and Integrity 65; Ojo “The Role of Media in Ensuring Police Accountability in Nigeria” 82. 52 Sahara Reporters Sahara Reporters. 53 Okenyodo 2016 African Security Brief 2. 54 After the 1967–1970 civil war, powers of the NPF was centralised at the federal

level. Hence, all spheres of NPF are accountable to the President.

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appoint political loyalties across the whole federating unit, one may then conclude that the Nigerian Police Council is a political institution whose actions and decisions will, in all likelihood, be highly political; thus, holding the NPF accountable without the political will of the executives will be an arduous task. In terms of the Judiciary, the NPF are also accountable to the rule of law, specifically, to judges and prosecutors. In an ideal democratic system, wherein separation of powers and rule of law are well enshrined in governance, the judiciary would have been the best oversight organ to effectively hold the NPF accountable for human rights violations. In a weak democratic system, however, the Executives tend to influence court decisions in favour of their political agenda,55 sometimes refusing to execute or comply with court orders as espoused in the Sunday Igboho’s case. In the following discussions, we give further scenarios depicting lack of “judicial will” to hold the President and or the NPF accountable is in nexus with the lack of the legislators’ will to do the same. Regarding the legislature, the NPF is accountable to the public through their representatives in the National Assembly. The legislature comprises different individuals from divergent political parties having their own political agendas. The legislative arm of government is said to have the vector to investigate and summon the executive and or anyone in the country on any account, in this instance, for human rights’ violations.56 Lately, following the outcry on incessant killings in Nigeria by law enforcement agencies and the state of insecurity in the country, the members of the House of Representatives, during its plenary session made a resolution to invite the President of Nigeria to address it on the present insecurity in the country. Upon receipt of the resolution of the House of Representatives, the President accepted the invitation and announced his intention to address the House of Representatives. The Attorney General and Minister of Justice of the Federation, however, questioned the constitutional powers of the House of Representatives over the invitation and contended that the President is the Commander-in-Chief of the Armed Forces of Nigeria,

55 Agbor 2017 Potchefstroom Electronic Law 2. 56 Section 88 and 89 Constitution of the Federal Republic of Nigeria, 1999.

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thus, cannot be compelled to appear before the National Assembly.57 As a result of this vector, the removal of the service chiefs over the rising insecurity in the country was opposed even though the National Assembly had demanded it for the third time. Concerned individuals initiated a lawsuit against the President at Federal High Court58 intended to be heard on the 22 November 2021 at Federal High Court, Abuja Division; unfortunately to date, there is no evidence of any legal action or decision taken to find a solution to the President’s defiance to the rule of law. This is evidence of a broken system devoid of political will and accountable for human rights’ abuses. 5.6.3

Public Accountability

These are external oversight mechanisms that are used to curb law enforcement delinquencies and seek ways to hold them accountable. The Nigerian government had set up several external mechanisms in the form of statutory oversight agencies which will monitor and regulate the NPF conduct. Examples of such forums include, community policing forums, civilian oversight boards and the media, however, the public accountability mechanisms recognised in the Nigerian constitution which were considered for discussion in this study are the service Commission and the Media. 57 Joseph Onyekwere The Guardian; Vanguard Vanguard; Alabi Premiumtimes; Alkassim Daily Trust. It is worthy to note that it is the third time the lawmakers are demanding the removal of the service chiefs over the rising insecurity in the country, yet the President has bluntly refused to oblige to the request of the law makers. 58 Emmanuel Ekpenyong v. The President Federal Republic of Nigeria & 2 Ors under the Suit No.FHC/ABJ/CS/2021.

1. Whether the Plaintiff has locus standi to institute this proceeding? 2. Whether the President falls within the desiption of “any person in Nigeria” as provided in Sections 88 (1) (b) and 89 (1) (c) and (d) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) and subject to the summon of the National Assembly? 3. Whether Sections 88 and 89 of Constitution of the Federal Republic of Nigeria 1999 (as amended) empowers the National Assembly to summon the President to its Chambers to give information and answer questions on the steps taken to stop the incessant killing of persons in Nigeria? 4. Whether the Plaintiff has disclosed a reasonable cause of action against the Defendants to warrant him to institute this action against them?

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The Police Service Commission

The Police Service Commission is the main civilian supervisory and oversight body of the NPF in terms of Section 30 of59 the constitution and section 6(2) of the PSC Act.60 Section 30 reads that the service Commission has the mandate to: (a) appoint persons to offices (other than office of the InspectorGeneral of Police) in the Nigeria Police Force; and (b) dismiss and exercise disciplinary control over persons holding any office referred to in subparagraph (a) of this paragraph. While section 6(2) maintains that: The Commission shall not be subject to the direction, control or supervision of any other authority or person in the performance of its functions other than as is prescribed in this Act.

An overview of the two provisions would have fortified the service Commission as a formidable civilian oversight body against all forms of political interference and employed disciplinary measures against erring members of the NPF. Unfortunately, a critical overview of the ouster/limiting clause in section 6(2) read along with section 4(2), places the civilian oversight function of the service Commission under the control of the President.61 Section 4(2) provides that: A member of the Commission may be removed by the President if he is satisfied that it is not in the interest of the Commission or the interest of the public that the member should continue in office.

The foregoing provisions seem to depict that the Legislature and the President had intended to politically interfere in the appointment and discipline of the NPF. To put it differently, the President ultimately has the power to summarily dismiss any member of the Service Commission at will and without any form of recourse that could protect the 59 Constitution of the Federal Republic of Nigeria, 1999. 60 Police Service Commission Act 2001 2001 No. 1. 61 As above.

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Service Commission’s decisions. These provisions raise some significant questions—What is or should be, the interest of the Service Commission or the public, as it relates to the Service Commission? Who or which body has the mandate to declare an act or conduct of the Service Commission to be in the “interest of the commission or that of the public”? In an attempt to answer the above questions, one will reveal that the PSC Act itself has no definitional provision for acts or conducts that depict what the interest of the Service Commission or the public is. Secondly, in the absence of a law that caters for which act or conduct of the Service Commission falls within the spheres of the interest of the Service Commission or the public, one would presume in law, that such discretionary power is that of the Judiciary, rather than the President. Reading along with the provisions of the PSC Act, section 6(1) (g)62 mandates the Service Commission to “carry out such other functions as the President may, from time to time, direct”. To reinforce the discretionary powers given to the president, section 1963 further provides that: Subject to the provisions of this Act, the President may give to the Commission directives of a general nature or relating generally to matters of policy with regard to the performance by the Commission of its functions and it shall be the duty of the Commission to comply with the directives.

Aside from the institutional challenges mentioned that undermine the function—the ability of the PSC—the NPF members see the Service Commission as a threat and are unwilling to accept, cooperate and subjugate themselves to the oversight of the Service Commission. For example, Ojo64 noted that there are numerous occasions where the InspectorGeneral of Police (IGP) or other Police authorities, in complete disregard of the Service Commission, have gone ahead to promote, appoint or dismiss police officers. Under those circumstances, one can only assume that the presumed authority of the Service Commission is undermined and is encumbered by political interference and conflicting roles and powers of the PSC and the IGP. 62 Police Service Commission Act 2001. 63 As above. 64 Ojo “The Role of Media in Ensuring Police Accountability in Nigeria” 80.

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The Media

The constitution in terms of Section 22,65 encouraged the press, radio, television and other agencies to freely uphold the fundamental objectives in the constitution and uphold the responsibility and accountability of the Government to the people. While there have been some indications of success in exposing and pressurising the political actors to hold law enforcement accountable for human rights violations, there are instances where the media had borne the brunt of reporting certain influential cases. Freedom of the media is said to be a major concern in Nigeria66 and this is not healthy for accountability, hence, the need to shift this paradigm. 5.7.2

Independent Accountability

These are independent institutions that seek the proper functioning of the NPF. As a result, they tend to monitor and protect the rights of citizens when violated by the NPF. They include, but are not limited to the following—National Human Rights Commission, Ombudsmen, Police Complaints Commissions, Centre for Law Enforcement Education (CLEEN), Constitutional Rights Project and the Human Rights Monitor. These organisations play a critical role in conducting external oversight of the police. Nevertheless, on the importance of these oversight mechanisms, Alemika67 submits that they are all confronted by many obstacles and challenges associated with limited functions and powers; expertise in investigation, cost of operation and lack of cooperation from police officers and authorities. More specifically the obstacles and challenges include the following: (a) Most external complaint review boards lack independent power to impose and enforce penalty, they merely recommend penalty to police commanders; (b) Many of the boards lack control over investigation and their function is often limited to reviewing findings of internal departments which may have been compromised in favour of officers; (c) Boards with investigative powers will have to recruit and train officers for the task and this engenders high operating 65 Constitution of the Federal Republic of Nigeria, 1999. 66 Ojo “The Role of Media in Ensuring Police Accountability in Nigeria” 87. 67 Alemika “Enhancing Police Accountability Systems in Nigeria: The Missing Links”

11.

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costs; (d) Members of the boards do not have intimate knowledge of police work and may either have unrealistic expectation of what police should do or undue empathy with the police resulting in unfair decisions against the police or complainants, respectively; (e) Lack of cooperation from police commanders who argue that the activities and powers of an external review board undermine their authority and the confidence of their subordinate. (f) Police officers often withhold their cooperation with external review boards because they fear that the boards may be used by citizens as a platform for vendetta or revenge for arrest and prosecution (g) Police officials and authorities also distrust the boards and whenever possible frustrate their work as a reaction against non-police citizens who do not understand the peculiarities of police work, especially the ubiquity of danger, sitting in judgment over their conduct and actions.

5.7.3

International Accountability Mechanisms

International law governs a state’s treatment of individuals and juristic persons. The international accountability mechanism for Law Enforcement proffers theoretical frameworks, such as the UNODC, the International Covenant on Civil and Political Rights (ICCPR), the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (CAT) and the African Charter on Human and Peoples’ Rights (Banjul Charter) and soft laws are just a few. These instruments seem to have adequately furnished frameworks and mechanisms to hold law enforcement officials accountable.68 Some of the instruments are obligatory, while others are presented in the form of soft laws, hence, they are limited to certain crimes and access to remedial actions is encumbered with procedural challenges which might impede or discourage victims of human rights violations from seeking legal remedy. In other words, the said international instruments only cater for serious crimes such as—genocide, war crimes, crimes against humanity and the crime of aggression—leaving out other forms of human rights’ violations embedded in the fabric of the society. In addition, access and knowledge of international rules and procedures to which to hold law enforcement accountable for, might seem strange to individual applicants who have been victimised by the law enforcement; accountability also depends on the will of external oversight’s mechanisms to pursue the matter at the 68 These instruments have been extensively discussed in the Accountability of Law Enforcement Personnel for Human Rights Violations by Agbor A.

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international level. Finally, in event that the crime is reported at the ICC or any other platform, the outcome of the proceedings is dependent on the law enforcement cooperation and or the political will of the political actors to facilitate the proceedings.69 These challenges limit or impede accountability of using international law agencies.

5.8

Political Will as a Resource for Effective Policy Reforms and Accountability

Political will and policy reform work in tandem to deliver accountability. This line of thinking emanates from the fact that the planning stage of a public reform policy/programme for its implementation is entirely determined by stakeholders who are mainly political appointees and/or political actors/stakeholders. Ideally, there is political interaction from the top to the bottom of policy reforms that concerns accountability and other public issues, thus, exploring mechanisms that can influence the political will of actors involved in policy decisions remains critical. It is essential for a successful public policy.70 This position collaborates with Hammergren’s submission (quoted in Post et al.), which characterised political will as “the sine qua non of policy success which is never defined except by its absence”.71 The authors, Post, Raile and Raile72 believe that it is possible to identify applicable theoretical frameworks and suitable strategies that would aid the development of political will and afford practical solutions to address the lack of political will of political actors/stakeholders to initiate and implement public policy. Woocher73 analysed three models of government decision-making derived

69 Scheye The Effectiveness of Police Accountability Mechanisms and Programs 11. 70 Živanovi´c “Political Will: Or Concept of Public Policy as Analytical Tool For research

of Political Will”; Mujki´c Political Will: A Short Introduction Case Study—Bosnia and Herzegovina 13; Post et al. “Defining Political Will” 676; 2010 Politics & Policy 653–676. 71 Mujki´c Political Will: A Short Introduction Case Study—Bosnia and Herzegovina 13;

Živanovi´c “Political Will: Or Concept of Public Policy as Analytical Tool For research of Political Will” 78; Post et al. “Raile and Raile” 2010 Politics & Policy 653–676. 72 As above. 73 Woocher 2001 Journal of Public and International Affairs-Princeton 169; Živanovi´c

“Political Will: Or Concept of Public Policy as Analytical Tool For research of Political Will” 86.

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from Allison and Zelikow which deepens our understanding of political will and public policy. The analysis explains that 1. The rational actor model (government decision making is rational and based on perception of the actors’ objective situation, their objectives and expected outcomes of the policy options); 2. The organisational behaviour model (government actions are not conscious choice of a unitary actor but outputs of larger organisation based on pre-established organisational routines and standard operating procedures); 3. The governmental politics model (government behaviour is not only based on the participants in the process, their perceptions, preferences and stances and their power, but also on the existing action channels and rules of political negotiations). The models proffer factors that can influence government’s decision to act or not.74 In other words, the identified factors have the potential of shaping and or motivating political will. Similarly, analyses based on “political will” models/constructs by Zivanovic75 maintained that the behaviour, role and relevance of individual actors and the general characteristics of the society itself determine political will and the dimension of public policy in society. To Malena, 76 three mutually underpinning elements of political will (political want, political can and political must) are fundamental. Under the platform of “political want”, Malena distinguishes between types of political actors whose actions are typified by political want—the natural and the converted political actors. The natural political actors unconsciously support specific policies and political actions based on their personal beliefs and values while the converted represent those whose political wants are the outcome of the predictable benefit that may ensue from the implementation of certain policies. Malena claims that either political or personal interest is a significant source of political want.

74 As above 186. 75 Živanovi´c “Political Will: Or Concept of Public Policy as Analytical Tool For research

of Political Will”; Mujki´c Political Will: A Short Introduction Case Study—Bosnia and Herzegovina 13; Post et al. “Defining Political Will” 676; 2010 Politics & Policy 653–676. 76 Malena 2009 Research gate 1–37.

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In terms of “political can”, Malena suggests that political actors and other members with enabling skills—education and experiences—just to mention a few, will easily possess the political will to implement certain policies because they believe they can achieve the set goals. Political actors who do not have the enabling skill would probably shy away from implementing transforming initiatives. Lastly, on “political must” concerns, Malena submits that it is all about putting pressure on political leadership. The pressure can either be from the top political elites or from below through citizen mobilisation, in the form of protests and other campaigns for transformation. To achieve the said goal, scholars also identified and suggested the adoption of a legal framework, that to an extent, can regulate the level of interest of key political actors.77

5.9

Conclusion

Having explored the normative and institutional frameworks of NPF accountability mechanisms in Nigeria, we observed that the major problem the country is facing is lack of political will to implement equitable public policy resulting in biased, weak and double-standard policy reforms. This challenge emanated from the colonial era given that law enforcement structures, at that time, were conceived as instruments to correct/oppress the natives, as well as serve and protect the interest of the overlords (the then colonial masters, and may refer to current political actors). The challenge is somewhat compounded by the NPF commandand-control structure that is centralised, enabling politicians to interfere in the policing system and directly appoint loyalties across the federating unit. Seemingly, the existing normative and institutional accountability frameworks were not crafted to cater for and/or anticipate political will for policy reforms that benefit and protect people in society. The argument leaves researchers with assumptions that the establishment of law enforcement structures and reforms that followed were not completely legitimate services to the public. This political outcomes are among the key factors law enforcement officers failed to account for in human rights’ violations. Other observable challenges point to lack of—discipline, moral standards, motivation and socio-economic standing—of the law enforcement personnel which sometimes perpetuate human rights’ violations and 77 Živanovi´c “Political Will: Or Concept of Public Policy as Analytical Tool For research of Political Will” 89; Malena 2009 Research Gate 22.

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unaccountability. That having been said, exploring measures, whereby politicians and other stakeholder alike can be encouraged to willingly implement legitimate public policy, can go a long way in solving Nigeria’s accountability issues. Based on the outcomes obtained from this study, it is recommended that: . with the aid of the Political Will models/constructs, legislatures should inculcate in the existing accountability frameworks, policies that can inculcate political will in politicians and their associated stakeholders. This includes but is not limited to the individual factors, organisational factors, relational factors and societal factors. . It is imperative to incentivize law enforcement personnel as this holds prominence in mitigating their level of loyalty to political actors, as well as eradicating transfer aggressions on the public resulting from poor or inappropriate support initiatives. Befitting salaries, pension funds and duty rewards are pivotal motivational factors that can enhance “will” and accountability to service. . The Nigeria law enforcement unit may intensify disciplinary measures to enforce accountability. There should be proper and defined punishment measures, scorecards that monitor law enforcement activities/conducts such that they are held accountable for unlawful conduct ranging from—alleged acts of corruption, aiding and abating crime, human rights’ violations, extrajudicial killing, excessive use of force and firearms contrary to standard policies transgression of employment protocols and the extravagant use of budgeted state resources. . Recruitment of potential officers should be rigorous such that both the behavioural and academic soundness are well interrogated. Post-professional courses and training on accountability should be institutionalised and made compulsory for serving law enforcement personnel. . There is a need for policy reforms and a constitutional amendment to cut down the vector bestowed on political actors that allows for them to preside over law enforcement matters. Of key note, the making and removal of Service Chiefs should be procedural, rather than at the discretion of a political actor, this should be based on merit and public opinion, thereby, adhering to the laws that constitute the three arms of government.

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. It is important to develop an index that will determine the election/selection of political actors into various offices. Indicators such as character, academic qualification and soundness, morals and political will to serve the masses should constitute part of the thresholds. . Future studies may explore measures of encouraging political willingness towards accountability of the law enforcement in Nigeria, drawing primarily from diverse grassroots perceptions in different areas of the country.

5.10

Limitation

In this study, the intriguing issues surrounding the concept of political will or the lack thereof to aid law enforcement accountability were explored. The authors acknowledge their limitations on their ability to understand the thoughts and feelings or political will of a particular political actor and to embark on exploratory research that derives data primarily from grassroots participants. We, hence, relied on scholarly studies, models and reports to derive inference on political will and accountability as it concerns Nigeria. In addition, the chapter did not venture into politics of political will due to the limited time and inadequate knowledge in the field of politics. It focuses only on domestic measures of holding the law enforcement accountable, leaving aside any specific exploration of the role of treaty bodies and specific agreements. Nonetheless, the discussions emphasise the need for all accountability measures and processes to conform to international standards.

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AI Willingly Unable. ICC Preliminary Examination and Nigeria’s Failure to Address Impunity for International Crimes (2018), available at https://www. amnesty.org/en/documents/afr44/9481/2018/en/. Alabi M “At Meeting with Lawmakers, APC Governors Insist Buhari Can’t Address National Assembly” Premiumtimes (10 December 2020). Alemika EEO “Policing and Perceptions of Police in Nigeria” 1988 Police Studies 161–176. Alemika EEO “Colonialism, State and Policing in Nigeria” 1993 Crime, Law and Social Change 187–219. Alemika EEO “Police Accountability in Nigeria: Framework and Limitations” unpublished contribution delivered at the Chelsea Hotel, Abuja. Civilian Oversight and Accountability of Police in Nigeria (24–27 September 2003). Alemika EEO “Enhancing Police Accountability Systems in Nigeria:The Missing Links” unpublished contribution delivered at the Enhancing Accountability Systems in the Nigeria Police Force (7–9 May 2010). Alemika EEOaCIC Civilian Oversight and Accountability of Police in Nigeria (Centre for Law Enforcement Education [CLEEN] and Police Service Commission, 2003). Alkassim B “Nigeria: House Invitation—Buhari’s Refusal Decision Puts Him in Bad Light—Reps Minority Caucus” Daily Trust (10 December). Amusan LaSL “The Nigerian Police Force and the Task of Policing Democratic Nigeria: Issues and Problems” 2018 Anthropologist 1–12. Walker S, Archbold C The New World of Police Accountability. 2nd ed (Sage Publications 2014) Asemota SA “Policing Under Civilian and Military Administrations” in al TNTe (ed) Policing Nigeria: Past, Present and Future (Malthouse Press Limited Lagos, 1993). Ayitogo AKaN “SSS Confirms Invading Sunday Igboho’s House, Killing Two.” Premiumtimes (July 1). Bayley DH Patterns of Policing: A Comparative International Analysis (Rutgers University Press, 1990). Chukwuma I “Internal Disciplinary Systems as Important Complement to— External Oversight of Police in Nigeria” unpublished contribution delivered at the Chelsea Hotel, Abuja. Civilian Oversight and Accountability of Police in Nigeria (2003). Correspondent BBC News “SARS Ban: Nigeria Abolishes Loathed Federal Special Police Unit” (11 October 2020). Ejekwonyilo A “Again, Court Orders SSS to Produce 12 Persons Arrested at Sunday Igboho’s Home” Premiumtimes (July 29). Rosenbaum DP “Special Issue on Police Integrity: An Introduction” 2016 International Journal of Police Strategies and Management 39(2).

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Berg J, Howell S “Civilian Oversight of Police in Africa: Trends and Challenges” 2019 Researchgate 1–35. Igbuzor O “Oversight Agencies and Effectiveness of Police Accountability System in Nigeria: A Critical Reflection” unpublished contribution delivered at the Minna, Niger State. Enhancing Accountability Systems in the Nigeria Police Force (May 2010). Onyekwere Joseph “Constitutional Crisis Looms as Buhari Shuns NASS Invitation” The Guardian (10 December). Malena C “From Political Won’t to Political Will; Building Support for Participatory Governance” 2009 Research Gate 1–37. Martínez R Building Political Will Topic Guide (2014), available at https:// www.transparency.org/files/content/corruptionqas/Topic_Guide-_Political_ Will.pdf Mckenzie K “Civilian Oversight of Policing; The South African Experience” unpublished contribution delivered at the Chelsea Hotel, Abuja. Civilian Oversight and Accountability of Police in Nigeria (24–27 September 2003). Miller J “Civilian Oversight of Policing: Lessons from the Literature” unpublished contribution delivered at the Chelsea Hotel, Abuja. Civilian Oversight and Accountability of Police in Nigeria (24–27 September 2003). Miller J “Civilian Oversight of Policing: Lessons from the Literature” in Chukwuma EAaI (ed) Civilian Oversight and Accountability of Police in Nigeria (CLEEN Foundation and Police Service Commission, 2003). Miller J “Civilian Oversight of Policing Lessons from the Literature” 2002 Vera Institute of Justice 1 1–23. Mujki´c DAaA Political Will: A Short Introduction Case Study—Bosnia and Herzegovina (Sarajevo, Friedrich-Ebert-Stiftung [FES], 2015). Ogbo P “Police Code of Conduct, Its Details, Implementation” Theeagleonline (14 January 2013). Ojo E “The Role of Media in Ensuring Police Accountability in Nigeria” unpublished contribution delivered at the Chelsea Hotel, Abuja. Civilian Oversight and Accountability of Police in Nigeria (24–27 September 2003). Okenyodo O “Governance, Accountability, and Security in Nigeria” 2016 African Security Brief 1–8. Omonobi K “Breaking: IGP Sets Up SWAT to Replace SARS” Vanguard (13 October). Osayande P “Creating Awareness on Concept and Principles on Civilian Oversight of Police” unpublished contribution delivered at the Chelsea Hotel, Abuja. Civilian Oversight and Accountability of Police in Nigeria (24–27 September 2003). Post et al. LAP, Amber N. W. Raile, Eric D. Raile: “Defining Political Will” PP, Volume 38, No. 4: 653 and 676; “Defining Political Will” 2010 Politics & Policy 653–676.

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Reiner R The Politics of the Police (Oxford University Press, 2010). Sahara Reporters NY “Police Affairs Minister Adesiyan Admits That Brig. General Momoh, Obanikoro, Fayose, Omisore Colluded To Rig Ekiti Governorship Polls” Sahara Reporters (8 Febuary 2015). Schedler A “Conceptualizing Accountability” in Larry Diamond; Marc F. Plattner aAS (ed) The Self-Restraining State—Power and Accountability in New Democracies (Boulder, Colorado: Lynne Rienner Publishers, 1999). Scheye The Effectiveness of Police Accountability Mechanisms and Programs (2020), available at https://www.usaid.gov/sites/default/files/documents/ Police_Accountability_Mechanisms_8.5.2020.pdf UNODC Handbook on Police Accountability, Oversight and Integrity (United Nations Vienna, 2011). Vanguard “Why Buhari Can’t Honour Reps’ Summons—AGF, Malami” Vanguard (10 December). Woocher L “Deconstructing Political Will: Explaining the Failure to Prevent Deadly Conflict and Mass Atrocities” 2001 Journal of Public and International Affairs-Princeton 179–206. Živanovi´c M “Political Will: Or Concept of Public Policy as Analytical tool For research of Political Will” in Mujki´c DAaA (ed) Political Will: A Short Introduction Case Study—Bosnia and Herzegovina (Friedrich-Ebert-Stiftung (FES),Sarajevo, 2015) 77–120.

Legislation Nigeria Police Regulations 1968 (No. 53) (Chapter 359). Constitution of the Federal Republic of Nigeria, 1999. Police Service Commission Act 2001, 2001, No. 1. Nigeria Police Act, 2020. Nigeria Police Code of Conduct, 2013.

Uncategorized References Anonymous Understanding ‘Political Will’. NPF Force Structure.

CHAPTER 6

Probability of Default, Accountability, Bankruptcy, and Digitization Amid COVID-19 Pandemic Olumide Adesina, Gbadebo O. A. Odularu, and Adeniyi Samson Onanaye

6.1

Introduction

COVID-19, caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) which first case was recorded in China in 2019 has spread globally from 2019 to the present (2021), though the curve is getting flattened in some countries across the world, particularly in Africa. COVID-19 pandemic is a threat to human lives, and the impact is being felt in various industries. The COVID-19 pandemic forced economic

O. Adesina (B) · A. S. Onanaye Department of Mathematical Sciences, Redeemer’s University, Ede, Osun State, Nigeria e-mail: [email protected] O. Adesina Data Science and Business Analytics, University of London, London, UK

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4_6

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activities in many cities to shut down globally to curtail the spread of the virus. Inactivity resulting in compulsory lockdown has resulted in the loss of money to organizations and individuals alike. The first confirmed case of COVID-19 in Nigeria was on 9 March 2020 and reported by the Nigeria Centre for Disease Control (NCDC) and the New York Times (Maclean and Dahir 2020). Total cases recorded as of June 4, 2021, were 166,682, and 2117 deaths. Governments around the world are losing money paying workers while little or no activities were going on. Privately owned institutions are not generating revenue and the majority of the school owners are not able to pay their staff. However, institutions globally have resorted to remote classes, also conducting assessments virtually as a way of accepting the new normal resulting from COVID-19. As beneficial as virtually classes could be, inadequate funding, and low coverage of ICT, among others posit challenges to online teaching and learning, particularly in the African context (ADEA 2020). This implies that the COVID-19 pandemic met educational sectors unprepared. During the total COVID-19 pandemic lockdown, commercial activities such as international trade and Air travel have been badly affected since most countries have shut down their borders. Scheduled flights have been canceled till future dates and persons find it difficult to resume work, and unite with families as planned. The hospitality and recreation sectors have been equally badly affected because hotels and recreation centers have been shut down. The study by Maliszewska et al. (2020) showed that Airlines worldwide are projected to lose $113 billion in revenues in 2020. McKibbin and Fernando (2020) mentioned that the world GDP is anticipated to fall between 0.1 and 1.5%, and global trade is expected to fall between 0.2 and 3.75%. The world economic giants such as China, the United States of America, and Japan are expected to experience a decline in their GDPs by 6, 8, and 10%, respectively. Some organizations recorded gains during the period of the COVID-19 pandemic because they have been able to come up with innovations thereby turning the pandemic into gold (Nairametrics 2020); on the other hand, others have recorded huge losses which may result in financial and economic distress. The study

G. O. A. Odularu Department of Economics and Finance, Bay Atlantic University, Washington, DC, USA

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conducted by Aifuwa et al. (2020) showed that COVID-19 Pandemic had impacted negatively on both the financial and non-financial performance of private businesses in Nigeria, and McKinsey (2020) mentioned that there is a likelihood for Africa to experience economic contraction with GDP growth between percent −0.4 to −3.9 in 2020. An organization that is in a state of distress may be insolvent. This implies that such an organization may not be able to meet the financial obligations to her creditors which may result in filing for bankruptcy, and bankruptcy posits a legal status of an insolvent organization that cannot pay back debts to the creditors. The study by Senbet and Wang (2010) showed that bankruptcy does not necessarily lead to economic distress or poor economic performance. If an organization is in financial distress, the creditor’s expectations of the firm to pay the debt owed are broken. In addition, if an organization has trouble because of operational inefficiencies, such an organization is said to be economically distressed. The reputations and social status of directors diminish when a firm is in a state of bankruptcy, hence, only reputable, and credible directors are retained in such organizations (Mullens 2014). Relating that to the current happenings, the World Bank Group (2020) stated that the COVID-19 pandemic has resulted in a reduction in demand for the supply of goods and services leading to difficulty in the provision of credit. Therefore, employers are forced to lay off workers because of the inability to pay the salaries of workers. Filings for bankruptcy are on the increase because of financial shocks because non-performing loans are increasing (The World Bank Group 2020). So, COVID-19 Pandemic has potentially increased the rate at which firms experience insolvency, and there is a need to measure it to mitigate against it. It is pertinent to note that digital technologies represent innovative pathways and effective tools for overcoming these insolvencies and bringing business back better more dynamically in the post-COVID-19 era as well as minimizing the inherent fragilities which are embedded in the African Continental Free Trade Area (AfCFTA) (Odularu 2020b, c). At the continental level, there are challenges with accessing payment services, savings, credit, and other financial services (Odularu 2020a). Furthermore, innovation in payments, digital payments awareness creation, and the introduction of innovative products should be one component of the industry’s response to COVID-19 (Odularu 2020b, c).

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6.1.1

Bankruptcy Models

Bankruptcy models known as scoring techniques are used to predict insolvency for companies and may as well be used to monitor a company’s liquidity. The multiple discriminant analysis techniques used in scoring functions identified in the literature include the method introduced by Beaver (1966), followed by Altman (1968), logit and probit by (Ohlson 1980), Revised Z-score (Altman 1983), Taffler (1983). The discriminant analysis technique is applicable in testing equality between the means of two or more groups of items. The Altman Z-score (Altman 1968, 1983) is being used by researchers and practitioners till the present day and ˇ and Úradníˇcek (2016), Ali and can be found in a recent study by Boda Özari (2018), Al-Manaseer and Al-OShaibat (2018), Özye¸sil (2020), and Heaton (2020). Following bankruptcy model (Altman 1968) and revised Z-score (Altman 1983), respectively. The Altman Z-score is as follows Z = 1.2X 1 + 1.4X 2 + 3.3X 3 + 0.6X 4 + 0.999X 5

(6.1)

While the revised Z-score defined as Z ' = 0.717X 1 + 0.847X 2 + 3.107X 3 + 0.420 X 4' + 0.998X 5

(6.2)

X 1 represent the working capital/total assets (current assets − current liabilities), X 2 is retained earnings/total assets, X 3 is earnings before interest and taxes/total assets, X 4 is market value equity/book value equity, X 5 is sales/total assets, and Z is weighted average of five separate ratios. In the revised Z-score following Altman (1983), X ' 4 market value equity/Book Value of debt. For the revised Z-score (Z ' -score) the following apply; when Altman Z-Score < 1.81, the organization is in Distress Zones, when Altman Z-Score is between 1.81 and 2.99, it is in Grey Zones, and when Altman Z-Score > 2.99, it is in Safe Zones. By implication from Altman Z-score model, if the Z-score is less than 1.81, the company is going to experience bankruptcy within a year or two. Organizations are now adjusting and learning ways to live with the COVID-19 pandemic to operate at an optimum level. This study aims to present a practical way of estimating an organization’s insolvency using the Z-score technique with the functions embedded in the “tidy verse” package in R. Also, to determine the probability of an organization defaulting in meeting their financial obligations to creditors which

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can also be adopted by practitioners as COVID-19 has impacted business activities adversely in recent times. Past studies computed Z-scores based on annual data while in the current study we obtained Z-scores using quarterly records. The Z-scores were computed using simulated data, followed by real-life data of Lafarge Africa. The logit model was used to estimate the probability of default. The remaining part of this paper is arranged as follows; material and methods in Sect. 6.2, results in Sect. 6.3, and finally discussion and conclusion in Sect. 6.4.

6.2

Material and Methods

In computing the probability of default, we considered a binary response in two categories, defaults coded as one (1), and non-defaults coded as zero (0). Since we have two categories, the discriminant analysis technique is suitable, and, if the classification is more than two groups’ techniques such as multinomial logistic regression can be employed by Smarandaa (2014). Testing the hypothesis follows that the discriminant analysis will multiply each independent variable by the corresponding weight and adds up these products obtained in the discriminant score calculated for each item in the selected sample. Following this process, the group mean called centroid would be obtained; this implies that if there are two groups, we would obtain two centroids. The statistical significance of the discriminant function generalizes the distance between the groups’ centroids. Since we have a binary function (0, 1), the method of logistic regression would be considered and can be obtained as follows. Let Y be response variable, which is also binary, and yi∗ be an unobservable (latent variable). The introduction of the latent variable is to avoid restrictions, yi∗ is defined as follows yi∗ = b0 +

k Σ

b j xi j + εi

j=1

We define yi as ( yi =

1, i f yi∗ > 0 0, i f yi∗ ≤ 0 σε2i =1

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The probability can be computed as ⎛ Pi = pr ob(yi = 1) = pr ob⎝b0 +

k Σ

⎞ b j xi j + εi 0⎠

j=1

⎡

⎛

= pr ob⎣εi − ⎝b0 + ⎡

⎛

= 1 − pr ob⎣εi ≤ −⎝b0 +

k Σ

k Σ

⎞⎤ b j xi j ⎠⎦

j=1

⎞

⎛ ⎛

b j xi j ⎠ = 1 − F ⎝−⎝b0 +

j=1

k Σ

⎞⎞⎤ b j xi j ⎠⎠⎦

j=1

where F is the cumulative distribution function for ε. However, if ε’s distribution is symmetric, it can be represented as ⎛ ⎛ ⎞⎞ ⎛ ⎞ k k Σ Σ Pi = pr ob(yi = 1) = 1 − F ⎝−⎝b0 + b j xi j ⎠⎠ = F ⎝b0 + b j xi j ⎠ j=1

j=1

(6.3) The maximum likelihood function is: Π Π L= Pi (1 − Pi ) yi =1

(6.4)

yi =0

The distribution function F and model type is obtained from the distribution of the error term, ε. If the cumulative distribution function of ε is logistic, the logit model is represented as follows From (1), let Pi = F(q), then F(q) =

eq 1 + eq

Transforming, we obtain (

F(q) q = log 1 − F(q)

)

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It follows that ( log

Pi 1 − Pi

) = b0 +

k Σ

b j xi j

(6.5)

j=1

The cumulative distribution function of ε is standard normal ε ∼ (0, 1), giving the probit Model ( ( A symmetric normal distribution is given as Φ X ' b ) ' ) Pr (yi = 1|xi ) = Φ xi b ) ' ) Pr (yi = 0|xi ) = 1 − Φ xi b wher e xi is a vector o f k × 1, b is also a k × 1 vector o f coe f f icients The likelihood is given as ( ) ) [ ) ' )(1−yi ) ]) yi ' 1 − Φ xi b L(b, xi , yi ) = Φ xi b ) ' ) i f yi = 1, then L(b, xi , yi ) = Φ xi b ) ' ) i f yi = 0, then L(b, xi , yi ) = 1 − Φ xi b For an independent and identically distributed (i.i.d), the joint likelihood will be equal to the product of the likelihoods of the single observations: L(b, xi , yi ) =

n ( ) ) ' )(1−yi ) ]) ) yi [ Π ' Φ xi b 1 − Φ xi b i=1

The joint log-likelihood function is e = L(b, xi , yi ) =

n ) Σ i=1

) ' ) )) ) ' yi I nΦ xi b + (1 − yi )In 1 − Φ(xi b ⎛

Pi = Φ⎝b0 +

k Σ j=1

⎞ b j xi j ⎠

(6.6)

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Maximizing (4) to obtain the estimations for the coefficient vector, b. l can be written as Π{ ( ( [ ( (]} yi I n F b' x + (1 − yi )I n 1 − F b' x e= i

[ ] fi ∂e Σ − fi yi = + − y x (1 ) i i =0 ∂b F(b' x) 1 − F(b' x)

(6.7)

i

The residual of the logit model are given by: Σ eti , and uˆ i = bˆ0 + bˆ j xi j t i 1+e k

uˆ i = yi −

(6.8)

j=1

The residuals are the difference between the observed variable, and the value estimated in the model, details can on logistic models can be found in James et al. (2013, pp. 113–137) and (Tabachnick and Fidell 2014, pp. 481–493). The probability of defaults relies on the logit model in Eqs. 6.1–6.8. 6.2.1

Simulation Study

To predict whether a firm will default or not, we used discriminant analysis. The variables involved are dependent (GROUP) which is binary (1, 0), and predictors are X 1 = WCTA , X 2 = RETA, X 3 = EBITTA, X 4 = MVBV, and X 5 = SATA. GROUP is a categorical variable representing the actual default of a firm which should normally be collected from historical data. In the variable GROUP, 1 = Default, 0 = non-default. Five hundred (500) random values generated were generated uniformly, WCTA (2.0, 4.0), RETA (1.5, 5.0), EBITTA (2.3, 4.5), MVBV (2.0, 5.0), SATA (1.2, 6.0). Simulation specification is summarized in Table 6.1 and the values obtained represent the ratios for 500 different firms, and the probability of default and non-default were assumed to be 0.45 and 0.55, respectively. The response variable of the simulated data was grouped as one’s for defaults and zeros for non-defaults from which the percentage of defaults and non-defaults was computed. The cut-off limit which divided the firms into default and non-default was also computed. Software by the R Core

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Table 6.1 Parameters for simulation WCTA RETA EBITTA MVBV SATA

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Minimum

Maximum

2.0 1.5 2.3 2.0 1.2

4.0 5.0 4.5 5.0 6.0

Source Author’s computation

team (2020) was used to implement the analysis, and functions in the “tidy verse” package in R by Wickham et al. (2019) were adopted for the simulation study as contained in Kulkarni (2018). 6.2.2

Real-Life Data

The real-life data used in this study were obtained from Lafarge Africa (LafargeHolcim) balance sheet. Lafarge Africa plc was formerly trading under the name Lafarge Wapco Plc, it is majorly controlled by LafargeHolcim because of the Lafarge merging with Holcim. Affiliated companies of Lafarge Africa are distributors of Elephant cement, UniCem, Lafarge South Africa Pty, Atlas Cement, Lafarge Ready-Mix, Ashaka Cement, WAPCO cement. The data for the case study was obtained from the LafargeHolcim balance sheet https://www.lafarge.com.ng/fin ancial-reports, https://www.marketscreener.com/LAFARGE-AFRICAPLC-6500000/financials/and presented in Table 6.2. The data in Table 6.2 was used to compute quarterly Z -score and Z ' score, respectively.

6.3

Results

6.3.1

Simulation

Based on the simulation carried out, the summary statistics is presented in Table 6.3. Linear regression of GROUP = WCTA ∗X 1 + RETA ∗X 2 + EBITTA ∗X 3 + MVBV ∗X 5 + SATA ∗X 5, and the result of the linear regression is shown in Table 6.4 as follows. Logit model was used to estimate the number of non-default and default in Table 6.4.

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Table 6.2 Figures extracted from LafargeHolcim balance sheet

Total asset Total liabilities Total revenue Retained earning Current asset Current liabilities Market capitalization EBIT Total equity Book value of debt

Three months ending December 31, 2019 (₦' 000)

Three months ending March 2020 (₦' 000)

497,152,208 152,238,207 213,000,000 155,801,325 75,045,721 84,411,770 246,449,000 34,910,000 344,914,001 266,207,059

491,813,770 138,832,880 63,695,766 163,868,214 70,964,377 77,404,263 169,131,852 169,000,000 352,980,890 60,064,499

Source LafargeHolcim

Table 6.3 Summary statistics for simulated data

WCTA RETA EBITTA MVBV SATA GROUP

Min

1st Qu

Median

Mean

3rd Qu

Max

2.002 1.501 2.304 2.005 1.202 0.000

2.498 2.381 2.839 2.726 2.453 0.000

3.005 3.317 3.346 3.456 3.817 0.000

3.007 3.272 3.370 3.473 3.719 0.4640

3.529 4.171 3.901 4.224 5.015 1.000

3.998 4.999 4.477 4.999 5.991 1.000

Source Author’s computation

Table 6.4 Percentage of defaults and non-defaults

Group Non-default Default Total

n

%

268 232 500

0.536 0.464 1.000

Source Author’s computation

The Cut-off point that was used to divide firms into default and nondefault following discriminant analysis was 0.458. A given firm will default if the Z-score is more than the cut-off, else such a firm will not default. The value obtained from the Z-score was 0.35733 which implies that

6

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Table 6.5 Classification table based on the Altman Z-score

Distress Grey Safe Total

Z-Score

Z’-Score

333 63 104 500

340 77 83 500

Source Author’s computation

Table 6.6 LafargeHolcim quarterly data

Z-score Z’-score (modified)

3 months ending December 2019

3 months ending March 2020

2.05591 (Grey zone) 1.2914 (Distress zone)

2.44515 (Grey zone) 3.61273 (safe zone)

Source Author’s computation

such a company will default on its financial obligations. Table 6.5 shows a comparative application of the Z-Score and the Revised Z-Score to the simulated data. Results in Table 6.5 show that majority of the simulated firms are in distress zone using both models. 6.3.2

Real-Life Data

Table 6.6 shows the Altman Z-Score computed from the data presented in Table 6.2. The computations can be found in the appendix.

6.4

Conclusion: Policy Implications and Areas of Future Research

ˇ and Úradníˇcek 2016; Al-Manaseer and AlRelative to studies by (Boda OShaibat 2018; Ali and Özari 2018; Özye¸sil 2020) that used annual data, quarterly data of Lafarge Africa was used in this study. Three months ending December 31, 2019, and three months ending March 30, 2020, was used to compute Altman Z-scores. The result shows that the company was in the Grey zone using Altman Z-score and in Distress zone using the revised Z-score in the three months ending December 2019. For three months ending March 2020, the company was also in the Grey zone

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using Altman Z-score and in a safe zone using the revised Z-score. Zscore can also help investors to monitor the security of their investments. If it is observed that the Z-score of an organization is declining, in-depth analysis can be conducted to determine the root cause of the decline. From the policy implications perspective, there is no doubt the fact that one of the apparent repercussions of the COVID-19 pandemic includes disruptions in national, regional, and global business systems. However, evidence has revealed that one of the resilient roads to socioeconomic shocks recoveries is strengthening digital business and e-commerce capacities as well as supply chain networks from the effects of the COVID-19 pandemic. Of great relevance is the need to understand how digital communication technology, digital infrastructure, and information remain critical components of sustainable policies toward enhancing business trajectories in Africa. COVID-19 and its impact on organizations potentially lead to their inability to meet up to the demands of creditors, hence default in paying monies owed has been considered in this study. This study provided a mathematical technique for estimating organizational financial distress, which potentially leads to bankruptcy amid the COVID-19 pandemic situation. Simulated data were used to compute the Z-scores and probability of default using the logistic model. One of the areas of future research is the need for a critical re-analysis of the COVID-19 outbreak-related challenges and dynamics being faced by African-based large businesses with a specific focus on digitizationrelated connectivity infrastructure. Furthermore, African governments need to systematically integrate digitalization in their intra- and intercontinental business relations as well as adopt more proactive digital tools toward boosting post-COVID-19 trade, business, and investment volumes, direction, and composition in this digital decade.

6.5

Compliance with Ethical Standards 6.5.1

Conflict of Interest

No conflict of interest whatsoever. Dr. Olumide Sunday Adesina declares that he has no conflict of interest. Dr. Gbadebo Odularu declares that he has no conflict of interest. Dr. Adeniyi Samson Onanaye declares that he has no conflict of interest.

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6.5.2

115

Funding

No funding was received for the study. Dr. Olumide Sunday Adesina declares that he has no funding for this study. Dr. Gbadebo Odularu declares that he has no funding for this study. Dr. Adeniyi Samson Onanaye declares that he has no funding for this study. 6.5.3

Ethical Approval

This article does not require ethical approval; data were sourced from published annual reports.

Appendix A1. Three Months, 2019 Ended December 31 Computed with Naira Value (‘000) X 1 = W orking Capital/T otal Assets = (T otal Curr ent Assets − T otal Current Liabilities)/T otal Assets = (75045721 − 84411770)/497152208 = −0.011884 X 2 = Retained Earnings/T otal Assets = 155801325/497152208 = 0.31338 X3 = = = =

Ear ni ngs Be f or e I nter est and T axes/T otal Assets E B I T /T otal Assets 34910000/497152208 0.070219944

X4 = = = =

Mar ket V alue Equit y/Book V alue o f T otal Liabilities Mar ket Cap/T otal Liabilities 246449000/152238207 1.6188380

X 4' = Mar ket V alue Equit y/Book V alue o f debt

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X 4' = 246449000/266,207,059 = 0.925779357 X 5 = Revenue/T otal Assets = 213000000/497152208 = 0.428440217 Z = 1.2 ∗ −0.01188 + 1.4 ∗ 0.31338 + 3.3 ∗ 0.07021 + 0.6 ∗ 1.618838036 + 1.0 ∗ 0.42844 = 2.05591 Z ' = 0.717 ∗ −0.01188 + 0.847 ∗ 0.31338 + 3.107 ∗ 0.07021 + 0.420 ∗ 0.92580 + 0.998 ∗ 0.42844 = 1.2914764

A2. Three Months, 2020 Ended March 30 Computed with Naira Value (‘000) X 1 = W orking Capital/T otal Assets = (T otal Curr ent Assets − T otal Current Liabilities)/T otal Assets = (70,964,377 − 77,404,263)/491,813,770 = − 0.013094156 X 2 = 163,868,214/491,813,770 = 0.333191594 X3 = = = =

Ear ni ngs Be f or e I nter est and T axes/T otal Assets E B I T /T otal Assets 169000000/491,813,770 0.343626003

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X 4 = Mar ket V alue Equit y/Book V alue o f T otal Liabilities = Mar ket Cap/T otal Liabilities = 169,131,852/138,832,880 = 1.218240607 X 4' = Mar ket V alue Equit y/Book V alue o f debt X 4' = 246449000/60064499 = 4.103072 X 5 = Revenue/T otal Assets = 63,695,766/491,813,770 = 0.129511961 Z = 1.2 ∗ (−0.013094) + 1.4 ∗ (0.33319) + 3.3 ∗ (0.34362) + 0.6(1.21824) + 1.0 ∗ (0.12951) = 2.44515 Z ' = 0.717 ∗ −0.013094 + 0.847 ∗ 0.33319 + 3.107 ∗ 0.34362 + 0.420 ∗ 5.103072 + 0.996 ∗ 0.12951 = 3.612733072

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Odularu, G.: The primer: Bracing Nigerian trading ecosystem for the future. In: Odularu, G. (eds.) Strategic policy options for bracing Nigeria for the future of trade. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-345 52-5_1 (2020a). Odularu, G.: Conclusion and policy recommendations. In: Odularu, G. (eds.) Strategic policy options for bracing Nigeria for the future of trade. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-345 52-5_8 (2020b). Odularu, G.: Digital pathways for fostering post-COVID-19. Available online at: https://www.afronomicslaw.org/2020c/07/18/digital-pathways-for-fos tering-post-covid-19-trade-outcomes/?fbclid=IwAR2FOS9d9U6epp8ItvrqhR lJkfmevHPbITuPmdaXRqt0ed9X12oYEH6U5Fk (2020c). Ohlson, J.A.: Financial ratios and the probabilistic prediction of bankruptcy. Journal of Accounting Research, 18(1), 109–131 (1980). Özye¸sil M.: A relationship between Altman’s Z scores and stock price performance: A review on listed companies in Bist-30 Index. SSRG International Journal of Economics and Management Studies, 7(2), 179–186. http://www. internationaljournalssrg.org/IJEMS/paper-details?Id=547 (2020). R Core Team.: R: A language and environment for statistical computing. R Foundation for Statistical Computing, Vienna, Austria. https://www.R-pro ject.org/ (2020). Senbet, L.W., Wang, T.Y.: Corporate financial distress and bankruptcy: A survey, forthcoming. Foundations and Trends in Finance, 5(4). https://ssrn.com/ abstract=2268540 (2010). Smarandaa, C.: Scoring functions and bankruptcy prediction models—Case study for Romanian companies. Procedia Economics and Finance, 10, 217–226 (2014). Tabachnick, Barbara G., Fidell, L.S.: Using multivariate statistics, 6th ed. Pearson New International Edition. ISBN 10: 1–292-02131-4 (2014). Taffler, R. J. (1983). The assessment of company solvency and performance using a statistical model. Accounting and Business Research, 15(52), 295–308. Wickham H., and many others: Welcome to the tidy verse. Journal of Open Source Software, 4(43), 1686. https://doi.org/10.21105/joss.01686 (2019). World Bank Group. Protecting people and economies: Integrated policy responses to Covid-19, https://documents1.worldbank.org/curated/en/ 879461587402282989/pdf/Protecting-People-and-Economies-IntegratedPolicy-Responses-to-COVID-19.pdf (2020).

CHAPTER 7

Would Accounting for COVID-19 Pandemic Make Cities Much Smarter? Akinseye Olatokunbo Aluko, Olusoyi Richard Ashaye, and Gbadebo O. A. Odularu

7.1

Introduction

Smart cities technologies like the internet, artificial intelligence, open data, among others have been key to the cities’ development. However, with the coronavirus outbreak, it has become increasingly important for

A. O. Aluko (B) Oil and Gas Management, Royal Docks School of Business and Law, University of East London, London, UK e-mail: [email protected] O. R. Ashaye UWTSD London, London, UK e-mail: [email protected]; [email protected] G. O. A. Odularu Virginia Military Institute (VMI), Lexington, VA, USA e-mail: [email protected]; [email protected]; [email protected]; [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4_7

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the government to respond effectively using technology and innovative approaches. The advent of the coronavirus outbreak coincides with the Spring Harvest travel season, which is the largest annual migration of humans in most of the major cities of the world (Lin et al., 2020; Wu et al., 2020). According to Zhang and Ma (2020, p. 1), opined that ‘COVID-19 has been considered a relative of severe acute respiratory syndrome (SARS), which has the possibility of transmission from animals to humans ’. Having emanated from Wuhan in China in 2019, the (COVID19) outbreak rapidly spread to other parts of the world. As a result of the Coronavirus, the Chinese government took bold steps to mitigate the pandemic and prevent the virus into human populations in China before it moved rapidly across China and other major cities of the world. The extraordinary and radical intentions of the World Health Organisation (WHO) and other Western Government had an impact on the restrictions of human and economic mobility (Kraemer et al., 2020). Coven and Gupta (2020) further suggested that the spread of COVID-19 across the globe has significantly contributed to the change that gave birth to the ‘new normal ’ that requires a transformative global environment. With the World Health Organisation (WHO) declaring coronavirus a public health emergency of international concern and a global pandemic, citizens across the world have been under quarantine to keep strong and stay safe (World Health Organisation, 2020a). The government however has the responsibilities to ensure that its citizens are kept informed of progress through different communication systems such as digital, social media and prints to ensure effective information dissemination of how to keep the people safe from the pandemic. Interestingly, the social media

Bay Atlantic University, Washington, DC, USA Nigerian Economic Summit Group (NESG), Lagos, Nigeria Centre for the Study of Economies of Africa (CSEA), Abuja, Nigeria United States Institute for Advancing Community Development Through Interdisciplinary Scientific Research and Education (USI-ADMIRE), Washington, DC, USA Socioeconomic Research and Applications and Projects (SERAP), Washington, DC, USA Mondo Forte, Washington, DC, USA

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has played a crucial role during this outbreak to help in message sharing, noting that citizens, either working from home, being furloughed, unemployed or quarantined, have ample time to use social media (Whitelaw et al., 2020) This phenomenon enables us to develop a theoretical framework based on the role of smart cities innovative technologies including smart mobility and evaluate the impact from citizens perspective due to the coronavirus outbreak (Farhana & Mannan, 2020; WHO, 2020b; Yasir et al., 2020). There is no standard definition of smart city. As Ashaye and Alharahsheh (2019, p. 1) puts it, ‘Smart city has become a global trend in the development of advanced cities in the first century. The concept is a new concept, which is still in its infancy stage as the idea was first initiated by IMB in the USA in 2008’. Scholars and practitioners have described smart cities as a city that takes advantage of technology in its traditional way to improve and transform its systems, operations and service delivery. Similarly, smart cities have been explained to have five key features— digital technology, environmental sustainability, cities’ initiatives, mobility and business (Ashaye & Alharahsheh, 2019; Cavada et al., 2015; IBM, 2010). Literature shows that smart cities emerge with the notion of improving on the sensor systems, information investigation, cloud computing, wireless communications, data innovation and the Internet. These tend to impact on most aspects of our lives such as transportation, security, healthcare, water supply and waste management (Bay, 2020). Smart city simply relates to the use of modern and advanced technology to ensure urban development and improve quality of life through integration of services and community engagement. This involves transportation, home automation, cloud storage and e-business services in countries like Copenhagen and Singapore. To buttress this point, Cohen (2012) initiated the smart city wheel, which summaries the purposes and objectives of a smart city using the major indicators and rankings—Smart economy, smart environment, smart people, smart mobility, smart living and smart government. Since the COVID-19 outbreak, cities have been observed to be mobilising emergency resources and capabilities to keep its citizens safe, strong and healthy. Also, to ensure consistent and continuous delivery of services and information. As a result of these precautionary measures, different global cities tend to be quite flexible in offering services and activities that

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would provide the desired outcomes for citizens, businesses and visitors (Chan, 2020). One of the significant issues with this COVID-19 outbreak is how it will transform the citizens’ relationship with public space as this pandemic could go on for a longer period than initially anticipated (Alter, 2020; Florida, 2020; Honey-Roses et al., 2020; Null & Smith, 2020; Roberts, 2020; van der Berg, 2020). We are still in the preliminary stages of the crisis, and it is not certain when there will be vaccination available to all the citizens to help alleviate the impact of this pandemic.

7.2

Rationale

In this study, we examined smart cities’ development by attempting to critically analyse the impact of COVID-19 on the citizens, within the perspective of smart mobility. The integration of information and communication technology (ICT) infrastructure and services has led to the improvement in the quality of life and environmental sustainability, which are necessary for development and navigation of cities. There is the argument that the COVID-19 outbreak has disproportionally and adversely impacted deprived citizens. This is a novel area that requires detailed studies to examine the rationale behind these social inequalities in mobility differential patterns of sheltering in place during the pandemic in low-income (Chiou & Tucker, 2020; Honey-Roses et al., 2020; Kuchler et al., 2020). Scholars have suggested that this pandemic may also change the perceptions, use, design, and management of public space; hence, there is the need to rethink how these public space designs could protect and promote global health and build stronger cities during this crisis. As predicted for most countries, the continuous lock down could lead to long term economic recession as consumers would increasingly walk away from patronising the market (Honey-Roses et al., 2020; Taylor et al., 2020; Wertheim-Heck, 2020). Government immediate response to this crisis by regulating the use of public space has led to some criticisms; some due to the complexity of the systems or poor documentation or limited data available to reflect the real situation. There is a need to study the extent to which these government regulations have impacted on the citizens especially in the aspect of social distancing and public space restrictions, hypermobility (Musselwhite et al., 2020).

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Literature has also argued that the spread of the coronavirus has been because of globalisation and accessibility like the abundance of connecting across all areas—work, leisure, families or flights (Mazareanu, 2020; Wu et al., 2020). In addition to public space, COVID-19 outbreak also underlines the value of changing the fundamental layout of social and economic resilience. The use of technologies as an alternative to the literal mobility, and to help connect people through online sharing could also be costly as not all citizens would be able to afford this modern equipment; sometimes it amounts to changing the mobility patterns as opposed to eradicating them. On the importance of smart technologies, the coronavirus outbreak has had some massive impact on smart cities. Despite limited research on smart mobility and its effect on cities development, there is need to further studies on reviewing the steps and suggests innovative ways of incorporating the smart citizens agenda into the cities’ development. Despite the innovative technologies such as artificial intelligence, 5G network and open data, which are common in smart cities to deliver faster, cost effective and reliable services, the current pandemic therefore means that these technologies would need to be more applied. There is a need to investigate how cities would be able to offer new services that were initially not possible before the outbreak. From the literature, some of the areas that need clarity include the impact of COVID-19 outbreak on smart cities’ development within the context of smart mobility. We therefore investigated the effects of smart mobility and COVID-19 outbreak and attempted to fill the gap using a unified methodology to make recommendations for scholars and practitioners on how to ensure that the effective technology and tools are in place, despite the outbreak, necessary for ‘smart city’ to become truly smart. By 2050, the world’s urban population is estimated to reach seven billion, which will be driven by a massive wave of urbanisation in developing countries. In recent times, global urban transition has significantly impacted on city transformation and economic development. This transformation has been suggested to have given birth to the necessity of the new idea of the modern-day society in both developed and developing society (Kurma & Dahiya, 2017). These smart cities or modern societies are infested with mega trend infrastructures and regulations such as technology and global developmental regulations that have meaningfully contributed to effective growth and enhancement of different cities. Hashem et al. (2020) gave an understanding of a ‘smart city’ as

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a city that encourages prudent utilisation of quality resource management as well as the provision of services within a limited time. Lima et al. (2020, p. 1) suggested that ‘regulation of urban property use has been a fundamental instrument for cities to develop considering the collective good, the welfare of citizens and sustainable development . As the ties between continents tightened, researchers devoted more attention to describing and evaluating land-use systems in different countries and to study the similarities and differences between legal systems, the results of which showed patterns of change in the legal regimes of an evolving world’. This indicates that smart cities are built upon effective governmental and societal regulations and laws that effectively aid sustainable growth and development. Today’s smart cities are built on high power communication infrastructure and technological systems. Haidin et al. (2016) gave an insight about the evolution of smart cities which started from the wired cities-virtual cities—intelligent cities-information cities-digital cities—sustainable green cities. This can further be supported by Wang and Wang (2016, p. 2) that suggest the concept of smart city to have transformed from; wireless city-digital city-creative city-knowledge city exchange. This evolution has significantly transformed different global cities of their mobility system, sustainable transportation network, digital communication system, smart governance, smart healthcare system, and to mention a few (Pop & Prostean, 2018). The COVID-19 pandemic that was declared on 11 March 2020, is rapidly changing every aspect of our life—businesses, governments, households. It has paralysed the global economy, costing millions their jobs and livelihoods and resulting in huge loss of billions of dollars. Its nationally and globally devastating effects on our societies are compounding the previously existing challenges, such that urgent and continuous roles of innovative technologies are required to relieve how current and future pandemics can be avoided, especially in this digital era. For instance, in the case of urbanisation which has always been characterised by inadequate mobility congestion, pollution, food wastes, bad sanitation, energy inefficiency and insecurity, the highly contagious diseases are undermining this especially in densely populated. In addition, the City of Austin’s Department of Transportation states that before COVID-19, congestion was responsible for costing the U.S. about 6.3 billion hours, thirty million tons of greenhouse gas (GHG) emissions and $88 billion of productivity annually.

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In view of this evolving pandemic, one of the major questions that begs for an answer is how well we get people back to work, stimulate economic recovery and comprehensively enhance the capacities of our communities to rebuild post-COVID-19 prosperous life? One of the most effective responses to this question is that a more efficiently integrated and technology driven smart cities system can improve the way to manage the spread of COVID-19. Like in the case of SARS-CoV-2 virus, which is characterised by untraceable cases and outbreak epicentres acrossthe-national borders, many governments have learnt the dire need for a more efficient management of a new level of urban digital integration. In other words, the conceptualization and implementation of smart cities remain one of the prudent measures to take during global pandemic such as COVID-19. The purpose of this literature review is to present some of the more recent innovative articles on how the construction of socioeconomic infrastructure—centre smart cities are contributing to flattening the spread of COVID-19 now and in the future.

7.3

Discussion

The evolving nature of pandemics, including COVID-19 has revealed the new normal in which the future of work, physical contacts, government, and business is changed forever. However, COVID-19 is changing the perspective that public space is one of the crucial elements of urban fabric that makes cities resilient and adaptive. Thus, in addition to ‘data’ playing a crucially detective, mitigatory and predictive role, the most innovative response to this mis normal is the development of an effectively integrated and collaborative smart city systems especially in large urban areas where the health systems allow for automated exchange of patients’ health records and reduced asymmetry of health-related information. Some of these cities could be Wuhan, Seoul, Singapore, New York, Shanghai, Sydney, Berlin, Cape Town, Johannesburg, Helsinki, Rio de Janeiro, etc. These selected cities have websites which provide masks, healthcare facilities and gaming apps to educate against panic buying. Another interesting initiative is the provision of delivery and service vehicle drivers with mobile app data and information that will incentivize loading in safe and permitted curb locations. For instance, prior to COVID-19 pandemic, the Chinese Government has been deploying innovative technologies to know who needs to be quarantined. The requires leveraging apps which get users information toward enhancing healthcare systems,

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while tracking pharmacy purchases and movements to verify if citizens had contact to infected people. In a partnership with Alipay, the Government is providing a colour QR code to citizens that installs Alipay app in their smartphones such that QR codes have three colours’’ green, which implies the user can move around; yellow which means the user must have a 7-day quarantine and red, meaning the user must have a 14-day quarantine. Furthermore, this app sends personal data to the police department for enforcement and compliance. Table 7.1 presents a summary of the current digital initiatives being implemented for fostering the smart cities initiatives in selected cities in the world. Wuhan: Despite Wuhan’s Smart City Planning which started since 2010, the city has become globally famous for the COVID-19 pandemic Table 7.1 Some current smart initiatives to combat a pandemic in big global cities S/N

Cities

Continents

Population

Initiatives

1

Berlin

Europe

3.7 million

2 3

Helsinki London

Europe Europe

0.6 million 8.9 million

4 5

New York Seoul

North America Asia

8.6 million 9.7 million

6 7

Shanghai Singapore

Asia Asia

24.2 million 5.6 million

8

Sydney

Oceania

5.2 million

9

Wuhan

Asia

11 million

10

Austin

North America

Ambient Assisted Living; we-based services Helsinki Smart Region DigitalHealth. London programme (digital health services) NYeC; SHIN-NY Big data, AI, blockchain, self-quarantine app, Corona 100m app, Corona map 5G-powered robots Contract Tracing App, WhatsApp group, Websites, educational games My Health Record, Secure Messaging Records exchange, Alipay QR code for quarantine, smartphone tracking Smart city innovation and the smart mobility office working with a number of private companies to test, pilot and prove emerging technologies that will help us achieve our mobility goals

Source Costa, D.G. and Peixoto, J.P.J. (2020). The COVID-19 Pandemic: A Review of Smart Cities Initiatives to Face New Outbreaks. The Institution of Engineering and Technology Journal. IET Research Journals, pp. 1–10. ISSN 1751–8644. Available from: www.ietdl.org; Author

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(Leung et al., 2020). For instance, Wuhan’s Smart Health approach connects various healthcare systems and databases to enhance communication among patients, doctors and other healthcare professionals. London: is notable for a number of smart city initiatives by fostering digital healthcare through innovative technologies like AI, data analytics, Google Maps, wearable devices and blockchain which link data to the National Health Service (NHS). Seoul: is one of the globally reputable early adopters of smartest cities concepts such as e-governance, e-mobility, energy efficiency, digital health (leveraging artificial intelligence, big data, blockchain, telemedicine and consumer health electronics). During the recent COVID-19 outbreak, the South Korean Government fought the pandemic via self-quarantine app and another app called ‘Corona 100 m’ which alerts when the user comes within 100 m of an area visited by an infected person. Singapore: is one of the smartest cities in the world in the sense that it created its Smart Nation programme which extensively deploys smart cities technologies to improve the perceived quality of the residents via Contact Tracing App which is shared with the Ministry of Health to identify citizens who are in contact with infected individuals to implement mitigation actions. New York: the New York eHealth Collaborative (NYeC) approach, a non-profit organisation that works in partnership with the New York State Department of Health, to create a special network called Statewide Health Information Network for New York (SHIN-NY). SHIN-NY aims at deploying the most innovative technology for connecting state’s regional networks to exchange data quickly, retrieve patient records, receive alerts about patients, share clinical data and fight the spread of diseases.

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7.4

Conclusion and Policy Recommendations

As cities are getting in on the digital action and becoming smarter, it is relevant to note that about nineteen million Americans still lack at home broadband access (American Planning Association, 2020). On another level, cities like Boston, Minneapolis, and Oakland, California, are currently dealing with the problem of narrow sidewalks by closing streets to make more space for pedestrians and cyclists. According to Portland State University 2020 study, historically redlined and marginalised neighbourhoods are averagely 5 degrees Fahrenheit warmer (and disproportionately exposed to pollution which can cause chronic health conditions) than other neighbourhoods because of lack of investment in parts, green spaces, trees and public transportation. The new normal will compel city managers to develop parklets or wider sidewalks that allow people to record six feet from one another, and trees infrastructure that fosters shade and benches for sitting in the fresh air. For instance, more packets have popped up in Dallas which allows people to get fresh air and sit outside at least six feet apart without blocking pedestrian-friendly sidewalk, prioritising the comfort and sustainability of neighbourhoods. In addition, the smartness in cities also requires a comprehensive, cooperative approach with a wide range of partners such as architects, health care providers, urban planners, developers and governmental organisations. It should incorporate elements focusing on education, retail, housing, pharmacy, community farms, farmers markets, research and development, culture, public transportation, recreation, environmental sustainability, social services towards promoting health and wellness. Implementing smart cities initiatives is a terrific opportunity to mobilise an unprecedented investment in building digital connectivity related infrastructure. Though most cities in the developing world will continue to feel the impact of COVID-19 via the enforcement of lockdown especially in informal settlements, the governments still need to adopt digital measures to not only flatten but halt the spread of the virus. Increasing number of cities should leverage innovative technologies to strategically prepare themselves for the future of smart cities which will be driven by massive integration of a city’s cyberspace with social media vis-à-vis data science and deep learning algorithms technologies.

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References Allam Z and Jones, D. S. (2020) On the Coronavirus (COVID-19) Outbreak and the Smart City Network: Universal Data Sharing Standards Coupled with Artificial Intelligence (AI) to Benefit Urban Health Monitoring and Management. Healthcare (Basel). 2020 Feb 27; 8(1): 46. https://doi.org/10.3390/ healthcare8010046. PMID: 32120822; PMCID: PMC7151018. Ashaye, O. R. and Alharahsheh, H. H. (2019). Preliminary Study of Smart Cities Development. Global Academy Journal of Economics and Business, November 2019, 1(2): 33–35. Cavada, N., et al., (2015). ‘Do smart cities realise their potential for lower carbon dioxide emissions’ Proceedings of the Institution of Civil Engineers - Engineering Sustainability, 169(6), 243-252. Chan, H.-H. (2020, January 29). China coronavirus: Hong Kong nurses call in sick in protest at government refusal to close borders. South China Morning Post. Available online at: https://www.scmp.com/news/hong-kong/hea lthenvironment/article/3048135/china-coronavirus-hong-kong-nurses-callsick. Accessed Date (31/10/2020). Chiou, L. and Tucker, C. (2020). Social Distancing, Internet Access and Inequality. NBER Working Paper No. 26982 April 2020 JEL No. L96, L98, M15. Costa, D.G. and Peixoto, J.P.J. (2020). The COVID-19 Pandemic: A Review of Smart Cities Initiatives to Face New Outbreaks. The Institution of Engineering and Technology Journal. IET Research Journals, pp. 1–10. ISSN 1751-8644. Available from: www.ietdl.org Farhana, K.M. and Mannan, K. A. (2020). Knowledge and Perception Towards Novel Coronavirus (COVID-19) in Bangladesh. International Research Journal of Business and Social Science, 6(2), 1–12. Haidin, A., El-Hassani, S., Aqqual, A. and El-Hassani, A. (2016). The Role of Communication Technologies in Building Future Smart Cities. Available from: file:///home/chronos/udaae0335739b21c107755ffcfff12c44e0dbedb6/MyFiles/Downloads/52010.pdf Accessed Date (07/07/2020). Hashem, Ibrahim Abaker Targio, Ezugwu, Absalom E.,Al-Garadi, Mohammed A.,Abdullahi, Idris N., Otegbeye, Olumuyiwa, Ahman, Queeneth O., Mbah, Godwin C. E.,Shukla, Amit K. and Chiroma, Haruna. (2020). A Machine Learning Solution Framework for Combating COVID-19 in Smart Cities from Multiple Dimensions. medRxiv 2020.05.18.20105577; https:// doi.org/10.1101/2020.05.18.20105577 Honey-Roses, J., Anguelovski, I., Bohigas, J., Chireh, V., Daher, C., Konijnendijk, C., ... Nieuwenhuijsen, M. (2020, April 21). The Impactof COVID-19 on Public Space: A Review of the Emerging Questions. Available

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Pop, M. and Prostean, O. (2018). A Comparison Between Smart City Approaches in Road Traffic Management. Procidia Social and Behavioral Science, Vol. 238, pp. 29–36. Steven Taylor, Caeleigh A. Landry, Michelle M. Paluszek, Thomas A. Fergus, Dean McKay, Gordon J.G. Asmundson (2020). Development and initial validation of the COVID Stress Scales, Journal of Anxiety Disorders, Volume 72, 2020, 102232, ISSN 0887–6185, https://doi.org/10.1016/j.janxdis.2020. 102232 Van der Berg, S., Zuze, L. and Bridgman G. (2020). The impact of the Coronavirus and lockdown on Children’s Welfare in South Africa: Evidence from NIDS-CRAM Wave 1, 15 July 2020 Coven, Joshua and Gupta, Arpit and Yao, Iris, Urban Flight Seeded the COVID-19 Pandemic Across the United States (October 14, 2020). Available at SSRN: https://ssrn.com/abstract= 3711737 Wang, C. and Wang, L. (2016). Study on Theory of Smart City. International Conference on Social Science and Development. Available from: file:///home/chronos/udaae0335739b21c107755ffcfff12c44e0dbedb6/MyFiles/Downloads/47395961-1-SM.pdf Accessed Date (09/07/2020). Whitelaw, S., Mamas, M.A., Topol, E. and Spall, H.G.C.V. (2020). Applications of Digital Technology in COVID-19 Pandemic Planning and Response. Viewpoint. Available from: https://www.thelancet.com/action/showPdf?pii= S2589-7500%2820%2930142-4 Accessed Date (08/07/2020). World Health Organization. (2020a). Coronavirus disease (COVID-19). Situation Report-130. [cited May 30, 2020]. In: World Health Organization [Internet]. Available from: https://www.who.int/docs/defaultsource/cor onaviruse/situation-reports/20200529-covid-19-sitrep-130.pdf?sfvrsn=bf7e7f 0c_4 World Health Organization. (WHO). (2020b). Timeline of WHO’s Response to COVID-19. Available online at: https://www.who.int/news-room/detail/ 29-06-2020-covidtimeline (accessed September 25, 2020) Yasir M., Turner, A,K., Bastkowski, S., David, B., Page, A.j., Telatin, A., Phan, M.D., Monahan, L., Savva, G.M., Darling, A., Webber, M.A. and Charles, I.G. (2020). TraDIS-Xpress: A high-resolution whole-genome assay identifies novel mechanisms of triclosan action and resistance. Genome Research. CSH Press: 1–12. February 12, 2020, https://doi.org/10.1101/gr.254391.119

CHAPTER 8

A Primer into Non-Profit Organizations’ Accounting System in Nigeria Olutayo Modupe Adesina

8.1

Introduction

Every organization both business and non-business requires account and finance for its various activities. The business organizations are set up primarily for profit making like banks, companies, and other related ventures while the religious, clubs, library, museum, and charitable organizations are not meant for profit making but for rendering services and achieving organization’s social mission. Regarding accounting control procedures for every business organization, Sathyamoorthi (2001) observed that it is important to have systems of control over all business activities that are well implemented to help ensure: the protection of resources against waste and fraud, accuracy and reliability in accounting data and success in the evaluation of the performance of the business. Relying on professional accountant, the

O. M. Adesina (B) Department of Accountancy, The Polytechnic Ibadan, Ibadan, Nigeria e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4_8

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organization can get the competencies that they need (Curley and Flynn, 2005). Accounting record keeping plays a key role in the management of knowledge necessary for good business performance either profit or non-profit organization. Modern organizations are concerned with the capture, use, and storage of knowledge. Record keeping provides evidence of how the transaction was handled and substantiates the steps that were taken to comply with business standards. Record keeping is the foundation on which compliance program should be built upon. Measures should be put in place to capture the documentation and events that take place throughout transaction commencing from delivery and payment (Reed, 2010). Record keeping conveys substantial information about the financial strength and current performance of an enterprise. Managers find organizational statements useful in making decisions. As managers develop operating plans, they think how those plans will affect the performance of the organization (Onaolapo, 2014). Non-profit organization (NPO) requires fund to run its affairs and to carry out its daily financial obligations. The funds are not necessarily adequate to meet up to its numerous demands, though there are various sources of generating income. It is then necessary to determine the financial income being used by the NPOs whether there are proper record keeping, the financial decisions and reporting made, and the accounting system or procedure adopted. There arises the need for the organization to keep track of its financial operations, this helps form an adage for it to control its income against its expenditure. Thus, a house built on a solid foundation remains a strong house but that whose foundation is shaky can crumble at any time. In the same way, a good financial background of a NPO can be said to be the foundation on which the organization is built. Accounting for a non-profit can be inherently difficult, especially if this process is handled within the context of standard commercial accounting procedures. Not only can this become a difficult situation but, if the right steps are not taken, these operations can become both ineffective and unreliable. Non-profit organizations not only operate within a vastly different financial framework, but they also carry with them a unique lexicon of financial phenomena: grants, restricted and unrestricted funds, donations, etc. In addition, non-profit organizations also have social and legal implications that extend far beyond the balance sheet. These factors

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can make accounting a drain both on time and resources if they are not being handled appropriately. Many non-profit organizations are now being faced with the problems of maintaining adequate accounting and financial records and these always result in the inadequacy of funds to carry outs their obligation activities effectively. Many of the NPOs are incapacitated in terms of fund, yet there are several sources of finance for them and they seem not to meet up with their financial demand based on the challenges encountered in accurately maintaining and preparing their accounting due to Failure to make accrual adjustment accounting, using of untrained and inexperienced volunteers to perform records keeping and accounting, Frequent incomprehensible regulatory and laws, Obstacle of balancing the goals of humanitarian, delay in the preparation of bookkeeping and accounting. In line with the above stated problems, the study is aimed at investigating the accounting system in non-profit organization in Nigeria and specifically aim to critically examine the problems facing NPOs in maintaining adequate records keeping and accounting system, measure the extent to which poor records keeping and accounting system affect the performance of NPOs and proffer solutions through recommendations to the factors hinder effective accounting system in non-profit organization.

8.2 Conceptual Review on Non-Profit Organizations A non-profit organization (abbreviated NPO, also not-for-profit) is an organization that helps individuals, groups, or causes, rather than generating profits for itself. There are a wide range of NPOs: Charities, churches, hospitals, schools, as well as associations with purposes of science, literature, arts, sports, wildlife protection, etc. In most countries, governments and government agencies are considered a separate type of organization and not counted as NPOs. A non-profit organization is an organization that is dedicated to advancing a particular social cause or point of view. A non-profit is different from a corporation in that it uses its surplus money to advance their views or causes; whereas a corporation takes surplus money and distributes it to the shareholders. While a non-profit can make money through the sale of goods, the biggest difference between a non-profit and corporation is that a non-profit usually is exempt from paying income tax, whereas a corporation must pay (www. whatis.techtarget.com, www.businessdictionary.com).

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8.3

Accounting Record Systems

Romney (2003) defined record keeping systems as set of components that collects, records, classifies, analyses, and processes and summarizes business transactions in the books of accounts. A system should be simple to use, easy to understand, reliable, accurate consistent, and designed to provide information on a timely basis. According to Parker (2002) record keeping involves identification, classification, storage and protection, receipt and transmission, retention, and disposal of records for the preparation of financial statements. He also adds that record keeping also includes policies, systems, procedures, operations, and personnel required to administer records. McLean (1999) points out that good record management helps in controlling the creation and growth of records to reduce operating costs, assimilation of new records management technologies and in ensuring regulatory compliance. Poor record keeping, inefficient use of accounting information to support financial decision-making and low quality and reliability of financial data are part of the main problems in financial management concerns of NPOs (Karunananda and Jayamaha, 2011). Accounting records are the products of an accounting system. Accounting system is an orderly, efficient, scheme for providing accurate financial information and controls. Accounting systems show the books, records, vouchers, files, and related supporting data resulting from the application of accounting process that has observed regulatory requirements and internal administration policies (Olatunji, 2013). Accounting system must comply with the Generally Accepted Accounting Principles (GAAP). According to GAAP, any event that has a determinable monetary impact on the organization must be recognized as an accounting transaction.

8.4

Reasons for Keeping Accounting Records

There are different reasons for maintaining records and these vary from business to business. ASA and RIM (2011) argue that the primary motive for keeping records is at least to provide ample evidence of and information about business activities.

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Many have called for the need of keeping records in enhancing business performance. For instance, Hughes (2003) asserts that keeping business records is an important driver for the success of a business and argues that a comprehensive record or bookkeeping system enables business owners to develop accurate and timely financial reports that detail the progress and prospects of the business. Thus, the performance of a business is contingent on the existence of bookkeeping system. According to (Frolick and Ariyachandra, 2006; Macey, 2001) they have concluded that proper record keeping have used increased market share, profitability, improved facilities, and meeting required standards as proxies for business performance. Arguing along the same line, Fitzgerald et al. (2006) views performance indicators to include but not limited to profitability, business competitiveness, sales growth, customer base, liquidity and capital structure, relative market share, quality of services, and staff competence as well as resource utilization and productivity.

8.5

Theoretical Review

In “Government and Non – profit Accounting Theory and Practice” by Freeman the authors stipulated that the financial reporting of non-profit organization each included religious, clubs, charitable organizations, etc. emphasized that such reporting should provide the following information: . The economic resources, obligations, and net resources of an organization and the effects of transactions, events, and circumstances that change resources and interest in those resources. . The performance of an organization during a periodic measurement of the changes in amount and nature of the net resources of a nonbusiness organization and information must be useful in assessing its performances. . How an organization obtains and spends cash or either liquid resource, its borrowing and repayment of debt and others factors that may affect an organization’s liquidity should include explanations and interpretation to help the user understand financial information provided.

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8.6

Empirical Review

These four attributes have been analyzed for comparing accounting information system (AIS) and organizational strategies and performance (Gerdin and Greve, 2004). Only recently have studies begun to examine whether organizations systematically vary the AIS design to support their chosen strategy, recognizing that AS have the potential to facilitate strategy management and enhance organizational performance (Gerdin and Greve, 2004). Appropriate review between designing of AIS and performance of commercial units by analyzing strategies explains that high performance of commercial units depends on a wide range of accounting information systems (Boulianne, 2007). So many studies begun to examine whether organizations systematically vary the AIS design to support their chosen strategy, recognizing that AIS have the potential to facilitate strategy management and enhance organizational performance (Gerdin and Greve, 2004). Existing literature offers scant evidence of the relationship between these AIS and financial performance; though it is important to highlight the study made by Elena Urquia Grande et al. (2010) which discovered a positive association between AIS design and organizational strategy and performance. The successful implementation of AIS could save shareholder’s money and time. The information value generated by AIS to shareholders and stakeholders in making investment decisions (Sori, 2009).

8.7

Gap in the Literature

The literature is aimed at reviewing the gap in research on the assessment of problems of accounting system of non-profit organization in Nigeria. According to diverse literature review, it was observed that their views on this research area vary. Some scholars studied it on the bases of technology application to accounting system and improved financial reports of NPOs, basically on advertisement in which it was found that culture has an impact on promotional strategies. Some scholars also based their studies on the means to enhance the financial record keeping of NPOs. However, it is deduced from various studies that research has not covered the areas of problems of accounting systems in Non-profit organizations in Nigeria.

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Research Methodology

Random sampling technique was used through questionnaires to survey accountants and other financial administrators of the selected non-profit organizations for this study. The sampling method was deemed the appropriate means of getting respondents knowledgeable and well abreast with the subject matter (Sarantakos, 2006). The data used in this study were sourced through primary method of data collection. In all, 120 questionnaires that were administered to the various organizations 72 were returned and analyzed. The data were collected through four Licket Scale Grades, Strongly Agree (SA) = 4, Agree (A) = 3, Disagree (D) = 2, Strongly Disagree (SD) = 1 based on the perception of respondents on the statements generated under the topic ‘the problems of maintaining adequate accounting and financial records. This data collection method was employed since it is easy to draw conclusion, reports, results, and graphs from the respondents when working with quantitative data. Cronbach’s Alpha pre-test method used shows the result of 0.84. This indicates that the questions generated are reliable. Sekaran (2003) states that the closer the alpha value to 1 means the data is more reliable. That is, any values greater than 0.5 is good. The respondents’ bio data were analyzed through descriptive statistics and the formulated researcher questions were analyzed through Average Mean Score (AMS) with the use of SPSS. For the mean score, the cut off mark to be decided on based on the four Likert Scale Grades, SA, A, D, SD is structured below: SA = 4, A = 3, D = 2 and SD = 1. = 2.5 . Cut off mean = 4+3+2+1 4 . Accept the statement with the mean score greater than 2.5 and reject the statement with the mean score less than 2.5.

8.9

Data Analysis and Interpretation

8.9.1

Data Analysis According to Research Question

Table 8.1 reveals the perception of respondents on the challenges and problems facing NPOs in maintaining adequate records keeping and accounting. The result obtained here (in Table 8.1) shows that NPOs find it difficult to maintain adequate records keeping and accounting due to failure/inability to make accrual adjustment accounting, use of untrained

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and inexperienced volunteers to perform records keeping and accounting, frequent incomprehensible regulatory and laws, obstacle of balancing the goals of humanitarian and delay in the preparation of bookkeeping and accounting. Table 8.2 shows the extent to which poor records keeping and accounting affect the performance of NPOs. It is shown from the table that NPOs performance is retarded by poor record keeping and accounting because it hampers smooth running of the organizations, discourages future reference making, makes it difficult for the organizations to quickly adjust to changes, creates room for fraudulent practices in the organizations, exposes NPOs to excessive clutter and a disorganized environment, tends them to spend more than what comes in based on the fact that the mean score obtained for each statement is greater than 2.5. 8.9.1.1 Testing of Hypothesis H0 : Poor accounting system does not hinder financial activities of Nonprofit organizations (NPOs). Items (statements) 3, 4, and 5 were used to test if Poor accounting system does not hinder financial activities of NPOs (Table 8.3). Reject null hypothesis if F–cal is greater than F-tab and reject alternative hypothesis if F-cal less than F-tab at 0.05 level of significance. The computed or calculated value of F using SPSS version 20 is 6.341 while the tabulated value of F is 4.26. Since the F-cal > F-tab (6.341 > 4.26), the formulated null hypothesis which states Poor accounting system does not hinder financial activities of NPOs should be rejected and conclude that a poor accounting system hinders financial activities of NPOs.

8.10

Conclusion and Recommendations

This study was basically carried out to critically investigate the problems of maintaining adequate accounting record for non-profit organization. Basically, accounting for a non-profit can be inherently difficult, especially if this process is handled within the context of standard commercial accounting procedures. Not only can this become a difficult situation but, if the right steps are not taken, these operations can become both ineffective and unreliable. However, the findings reveals that most of

Failure to make accrual adjustment accounting hinders proper record keeping and accounting of Non-profit organization Using of untrained and inexperienced volunteers by NPOs to perform records keeping and accounting leads to poor record keeping and accounting Frequent incomprehensible regulatory and laws hamper record keeping and accounting of NPOs Obstacle of balancing the goals of humanitarian which is associated with NPOs hinders record keeping and accounting Delay in the preparation of bookkeeping and accounting leads to poor records keeping and accounting in NPOs

1

Source Field Survey by the author (2018)

5

4

3

2

Questions

116

108

120

160

152

4xf4

66

63

75

87

81

3xf3

28

28

30

6

10

2xf2

7

10

2

0

2

1xf1

3.01

2.90

3.15

3.51

3.40

Mean

3.01 > 2.5

2.90 > 2.5

3.15 > 2.5

3.51 > 2.5

3.40 > 2.5

Rule

The problems facing NPOs in maintaining adequate records keeping and accounting system

S/N

Table 8.1

Accept

Accept

Accept

Accept

Accept

Decision

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Poor record keeping and accounting hampers smooth running of NPOs Poor record keeping and accounting in NPOs discourages future reference making NPOs find it difficult to quickly adjust to changes due to poor record keeping and accounting Poor record keeping and accounting in NPOs creates room for fraudulent practices NPOs hinders record keeping and accounting Lack of proper record keeping and accounting exposes NPOs to excessive clutter and a disorganized environment NPOs tend to spend more than what comes in due to lack of proper bookkeeping and accounting

1

Source Field Survey by the author (2018)

6

5

4

3

2

Questions

156

132

204

116

136

164

4xf4

78

81

63

75

81

90

3xf3

10

18

0

24

16

2

2xf2

2

3

0

6

3

0

1xf1

3.42

3.25

3.71

3.07

3.28

3.56

3.42 > 2.5

3.25 > 2.5

3.71 > 2.5

3.07 > 2.5

3.28 > 2.5

3.56 > 2.5

Mean Rule

The effect of Poor records keeping and accounting system on financial activities of NPOs

S/N

Table 8.2

Accept

Accept

Accept

Accept

Accept

Accept

Decision

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Table 8.3 ANOVA

Financial Between groups Activities * Within groups Poor accounting System Total

Sum of squares

Df

Mean square

F

57.662 1645.308

2 9

28.831 182.812

6.341

1702.970

11

Sig 0.034

Source Data Analysis using SPSS Version 20

the non-profit organizations are strongly facing with problems of failure to make accrual adjustment accounting, using of untrained and inexperienced, Frequent incomprehensible regulatory and laws, Obstacle of balancing the goals of humanitarian, delay in the preparation of bookkeeping and accounting. It is therefore concluded that poor record keeping and accounting hampers smooth running of NPOs, discourages future reference making in the organizations, makes them find it difficult to quickly adjust to changes, creates room for fraudulent practices, exposes NPOs to excessive clutter and a disorganized environment and tends them to spend more than what comes in due to lack of proper bookkeeping and accounting. Based on the result of findings and critical analysis of problems of maintaining adequate accounting record for non-profit organization, the research therefore makes the following recommendations: i. Non-profit organization should employ effective and experienced bookkeepers to understand the nuances of full accrual accounting under GAAP, ii. There is need to engage two accountants (external and internal accountants) to minimize the risk of misunderstanding and incomprehensible regulatory associated with NPOs and iii. There is need to institute the numerous training programs for accountants to minimize the accounting errors. iv. There should be one basic framework of accounting at a general level, with scope for a variety of information depending on the type of organization. Similar items should follow similar accounting principles for all enterprises.

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v. Non-profit organizations should use the accrual basis of accounting. Commitments should be shown as appropriations, not liabilities, and expenses.

References ASA and RIM. (2011). Statement of Knowledge for Record Keeping Professionals, Prepared by the Australian Society of Archivists Inc. (ASA) and RIM Professionals Australasia, Australia. Boulianne, E. (2007). Revisiting Fit between AIS Design and Performance with the Analyzer Strategic-Type. International Journal of Accounting Information Systems, 1–16. https://doi.org/10.1016/j.accinf.2006.12.001 Curley, D, and Flynn, A. (2005). Is Bank Finance the Achilles’ Heel Irish SMEs? Journal of European Industrial Training, 29, 712–729 Fitzgerald, L., Johnson, R., Brignall, S., Silversro, R., and Voss, C. (2006). Performance Measurement in Service Business, London: CIMA. Frolick, M. N., and Ariyachandra, T. R. (2006). Business Performance Management: One Truth. Information Systems Management, 23(1), 41–48. Gerdin, J., and Greve, J. (2004). Forms of Contingency Fit in Management Accounting Research–A Critical Review. Accounting, Organizations and Society, 29(3–4), 303–326. https://doi.org/10.1016/S0361-3682(02)000 96-X Grande, U. E., Estebanez, P. R., and Colomina, M. C. (2010). The Impact of Accounting Information Systems (AIS) on Performance Measures: Empirical Evidence in Spanish SMEs. The International Journal of Digital Accounting Research, 11(2011), 25–43. Hughes. C. (2003). Opportunities for Records Managers Working in the Private Sector, Records Management Society of Great Britain. Record Management Journal, 13(3), 117–122. Karunananda, A., and Jayamaha, A. (2011). Financial Practices and Performance of Small and Medium Sized Enterprises Srilanka. Macey, S. (2001). An Integrated Model for Performance Management Based on 1S09000 and Business Ecellence Models, Master’s Thesis, Canada, Dalhous University. McLean, R. J. (1999), Records Management “The Business case”. Records Management Bulletin, 90, 3–9. Olatunji, T. E. (2013). The Impact of Accounting System on the Performance of Small and Medium Enterprises in Nigeria, a Survey of SME’s in Oyo State – Nigeria. International Journal of Business and Management Invention, 2(9), 13–17.

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Onaolapo, A. A.(2014). The Analysis of the Impact of Accounting Records Keeping on the Performance of Business Enterprises. International Journal of Academic Research in Business and Social Sciences, 4(1), 1–17. Parker, S. (2002). Strategic Management Techniques for Record Managers. Record Management Bulletin, 109, 17–21. Reed, R. (2010). Good Small Business Guide, How to start and Grow Your Own business, 2nd Edition, London: A & C Black Publishers Ltd. Romney, W. (2003). Managing Records in Private Companies in China. Record Management Journal, 13(3), 123–129. Sarantakos, S. (2006). Social Research (3rd Ed.), Oxford University Press. Sathyamoorthi, C. R. (2001). Accounting and Control Systems in Selected Small and Microenterprise in Botswana. Africa Journal of Finance and Management, 10(1), 96–109. Sekaran, U. (2003). Research methods for business: A skill-building approach. 4th Edition, John Wiley and Sons. Sori, Z. M. (2009). Accounting information systems (AIS) and knowledge management: A case study. American Journal of Scientific Research, 4(4), 36–44.

CHAPTER 9

A Critique of Urban Coastal Vegetation Land Use Conservation Laws in a Selected South African Metropolitan Municipality Tolulope Ayodeji Olatoye, Ahmed Mukalazi Kalumba, and Sonwabo Perez Mazinyo

9.1

Introduction

The main purpose of this chapter is to critically evaluate the performance and implementation of the policy documents (SDF and IDP), as it relates to urban expansion and conservation of Coastal Vegetation Environments

T. A. Olatoye (B) · A. M. Kalumba · S. P. Mazinyo Department of Geography and Environmental Sciences, Faculty of Science and Agriculture, University of Fort Hare, Alice, South Africa e-mail: [email protected] A. M. Kalumba e-mail: [email protected] S. P. Mazinyo e-mail: [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4_9

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(CVEs) in the study area. The performance of the spatial development policies is dependent on the local authorities to ensure the implementation of the IDP and SDF legislation and development policies. From the foregoing, the municipality is empowered by law to annually review and budget for the spatial development and coastal management of the study area. The roles and functions of BCMM have evolved since the South African post-apartheid era, because of the fragmented space (which typifies the spatial configuration of the municipality in the colonial era (Olatoye, 2020).

9.2

Aim and Justification for the Study

The aim of this study is to evaluate urban coastal vegetation land use conservation laws at Buffalo City Metropolitan Municipality (BCMM), South Africa. This study brings to the fore the growing complexity of environmental sustainability problems in a former apartheid space, as characterized by coastal urbanization and the intricacies of coastal vegetation conservation. Further, this study enriches the public with a more holistic conceptualization of CVEs conservation and functioning, as well as the intricacies of ensuring sustainability of these resources, vis-à-vis urbanization at BCM, and this will concomitantly result in a paradigm shift towards the re-organization and sustainable management of cities in the long run. Secondly, this study serves as an ‘intellectual toolbox’, which provides the public with the cornerstones for ameliorating environmental challenges in the course of urban development. Furthermore, this study provokes academic deliberations among geographers, scientists, ecologists, environmentalists, city managers, and policymakers at diverse levels by charting appropriate policy directions, strategies, programs, and proactive measures towards the actualization of development in urban areas (Olatoye, 2020). Additionally, the present status in terms of extent, nature, at species richness in the study area are unknown due to inadequate information regarding the rate of urbanization and its influence on BCMM coastal environment. It is on this premise that this study considered very apt, timely, and imperative. From the foregoing, the significance of conserving the fragile BCM ecosystem should be a major priority of ecologists, decision-makers, administrators, and other stakeholders in order to ensure ecological conservation of the study area. Hence, this study advocates for urgent procedures and strategies to be expedited towards the protection and conservation of the largely endangered BCM ecological space.

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151

Literature Review

BCMM Spatial Development Framework (SDF) as an Accountability Tool

The South African Municipal Systems Act No. 32 of 2000 provides for the adoption of the SDF, which is a spatial integration component of the IDP, and serves as a germane urban spatial instrument for the development of the study area (Turok, 2012). Additionally, attributes, sensitivities, and developmental objectives of the BCMM urban space are also entrenched in SDF document of the study area. According to Nel (2019), and from accountability standpoint, BCMM SDF assists in channeling of desired spatial expenditures and investment within the study area. SDFs serve as valuable guide in spatial development of the study area, as well as providing required information for decision-making on urban land use operations. 9.3.2

BCMM Integrated Development Plan (IDP)

According to the BCMM Report (2017), the BCMM IDP is an established management tool and a strategic planning instrument, which conveys the metro’s IDP. In addition, it is an all-inclusive document encompassing all facets of BCMM plans through coordinated planning and development (Sinuka, 2017). Further, the metro’s IDP is periodically reviewed every five years regarding the spatial development priorities and needs together with investment channeling and budgeting (Sinuka, 2017). The metro’s IDP ensures guidance on spatial development and tools for land use control purposes. Associated with the aforementioned is the inclusion of all aspects of environmental sustainability interests within the IDP document (Nel, 2019). The influences of the IDP document to urban spatial planning and development of the metro depends on the following considerations, namely: (a) the BCMM long-term developmental goals, (b) current developmental levels, (c) development priorities, strategies, and objectives, as well as (d) the Spatial Development Framework (SDF) of the metro (Cilliers et al., 2014). This provides for valued and channeled direction towards the design and development of the metro’s urban development projects (Olatoye, 2020). Consequently, the metro’s IDP document is a working instrument providing planning directives and incorporates environmental interest within the metro’s

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urban space in a bid to drive progressive and responsible spatial and environmental development. The Spatial Development Framework (SDF) and Integrated Development Plan (IDP) are formulated for the main purpose of redressing the imbalances generated by the apartheid regime. The IDP and SDF are documents that address future developmental opportunities and challenges of municipalities, and are channeled by realistic goals that are contextualized in order to actualize the vision and statements of the municipality. According to Cilliers et al. (2014), the primary objectives of these documents include the following: • They uphold the general well-being of all BCMM dwellers, thereby guaranteeing the attainment of an efficient systematic, and wellordered municipality to the overall advantage of its inhabitants. • They foster developmental strides in the spatial organization of the municipality through the enactment of spatially-sustainable development goals and supporting programs. • They endorse the sound planning objectives according to the relevant policies.

9.4

Data and Methodology

This study adopted qualitative research methods. Letters of request for permission to access the respondents in the study area were obtained. Before the researcher visited any research site, an appointment was scheduled with the City manager of BCMM, and the researcher was provided with relevant documents pertaining to this research. Several visits were made especially for the interviews because appointments were arranged for different dates. To this end, ethical clearance and BCMM permission to conduct research were granted accordingly. The descriptive research design was employed in this study and is aligned with the Urban Green Sustainability (UGS) Theory, which promotes optimal ecosystems functioning and sustainability of coastal vegetation resources in the study area, as well as providing guidance to the analysis of the research objectives to achieve the overarching aim of the study. The descriptive research design was utilized in guiding the review of e-journals, e-databases (pertaining to ecosystems functioning, and BCMM environmental policies monographs publications (ranging from the year 1963 to 2019).

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9.5 The Evolution of Spatial Planning at BCMM Since the 1994 Post-Apartheid Era Spatial planning in BCMM has evolved since the 1994 South African post-apartheid period. The purpose of studying spatial planning in the post-apartheid era is to assess changes in spatial development in the study area after the abolishment of the apartheid regime. The consequences of the post-apartheid policies on the spatial development of south African urban space, and the study area inclusive is characterized by disintegration and uneven accessibility to public amenities, occupations as well as social facilities. This abysmal inheritance has not been totally eradicated in the aftermath of apartheid due to the structure of urban areas, interests of certain individuals with ulterior motives, lack of upward mobility as well as incessant disparities of wages and income along racial lines. The fragmented urban spaces of East London, for instance, demands longer travels from other parts of the study area (such as King Williams Town, Bisho, Dimbaza, and so on), increases the release of carbon, diminishes production levels in the CBD, and weakens the economic potentials of the metro area as a whole on account of increased costs of maintenance. During the period under review such as Sleeper site, Quenera, Dimbaza, Amalinda, Westbank, parts of Bisho and Berlin, just to mention a few. Some areas were largely environmentally degraded, mostly rural, unplanned, and lacked basic amenities (BCMM Report, 2017). From the foregoing, the spatial development of the aforementioned areas is on progress, as urban renewal initiatives, which has been prioritized into three categories is been expedited around East London CBD, Quigney, sleepers site, west Bank, Bisho Berlin, and parts of King Williams Town. Also, there is an uneven distribution of population in favor of areas such as East London, when compared to areas such as Duncan village, Amalinda, Abbotsford, Nahoon Valley, and so on. This colossal unevenness is resultant from the spatial fragmentation of BCMM space, which has concomitantly resulted in spatial management problems as well as social disintegration problems in the urban areas of the metro, especially as buffers often partition different vicinities in the study area. Consequently, the spatial development plans are viable documents regarding the development of the study area vis-à-vis conservation of coastal vegetation resources in this regard.

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9.6 The Purpose of the IDP and SDF in the Coastal Conservation of BCMM The IDP and SDF documents for BCMM have been compiled to support the coastal conservation of Buffalo City Metropolitan Municipality (BCMM). Also, the population of inhabitants in the study area is ever-increasing, and as a result, provision has to be made to develop the spatial environment to cater for the teeming population (Turok, 2012). Further, Stats SA (2011) census figures revealed that the population for BCMM is over 766,000 (and about 257,000 households with an average household size of 3.2 persons). Also, an estimated growth of 54,000 people over a 10-year period (from 2015 to 2025) was projected, hence, it is imperative to take into cognizance the spatial requirements for the conservation of the CVEs in the study area. Further, three spatial areas of priority were proposed in the SDF document, and if the proposed coastal conservation plan is implemented, it will result in enormous sustainable conservation of CVEs vis-a-vis spatial development of the study area. The first three areas of priority include the West Bank (which is prospective for massive urbanization in the Greater East London area); Bisho and King William’s Town. Bhisho serves as the administrative capital of the Eastern Cape Province, while King Williams Town serves as the threshold for extended rural service in BCMM).

9.7

The Study Area

BCMM is located relatively centrally in the Eastern Cape Province, which is bounded to the south-east by the long coastline along the Indian Ocean. BCMM was selected for this study due to the decline of coastal vegetation resources that is witnessed in the study area. Further, BCMM has recorded the second highest population changes in the Eastern Cape from 1996 to 2011, at an alarming rate of 9.2% respectively and this has concomitantly led to increases in anthropogenic actions on the fragile ecosystem (Mostert et al., 2017). BCMM covers a total of 2536 km2 (979 square miles), and lies on coordinates 32°59' S and 27°52' E, and it is enclosed by the Great Kei, Amahlathi, Raymond Mlaba and Ngqushwa Local Municipalities. The area includes the large townships of Mdantsane as well as Amalinda, East London, Bisho, Schornville, King William’s Town and Dimbaza. Buffalo City is the key urban center of the eastern part of the Eastern Cape (Benya, 2011), which consists of a corridor

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of urban areas, stretching from East London to the east, through to Mdantsane and reaching Dimbaza in the west (Turok, 2012). East London is the primary node, while King Williams Town (KWT) area is the secondary node (BCMM Report, 2017). Figure 9.1 depicts the study area, as well as its location within the Eastern Cape Province and South Africa. According to Mahlanza (2014), BCMM is broadly characterized by three main identifiable land use patterns. The first is the dominant urban axis of Dimbaza-KWT-East London–Mdantsane–KWT–Dimbaza, which dominates the industrial and service sector centers and attracts people from throughout the greater Amathole region in search of work and better access to urban service and facilities. The second is the area comprising the fringe peri-urban and rural settlement areas, which, while remaining under the influence of the urban axis, are distinct in character and land use patterns. These include the Newlands settlements, those settlements that previously fell within the former Ciskei Bantustan, and the Ncera settlements located west of East London. Thirdly, the commercial farming areas form a distinctive type of area (Sinuka, 2017). These areas are dominant in the north-eastern and southwestern (coastal) sectors of the Municipality and are characterized by extensive land uses, with certain areas making use of intensive farming (irrigation-based). Having a mild climate with abundant yearround sunshine, the study area records 850 mm of yearly average rainfall (Zwelibanzi, 2011). BCMM has a total population of over 1,110,685, about 82% Africans, followed by 9% coloreds, 7.8% Afrikaans, and 1.2% Indians/Asians, and an average population density of 300 persons per square kilometer is recorded in the study area (Statistics South Africa, 2012). Figure 9.2 depicts the BCMM SDF coastal conservation plans. Figure 9.2 presents the various coastal conservation plans envisioned for BCMM. These proposals include land use proposals (such as proposed land uses for the municipality, recreation, open space, agriculture, commerce, and so on); the special areas for proposed coastal conservation development (such as zones for urban renewal, proposed urban and settlement edges) infrastructure (such as solid waste sites, cemetery expansion, and so on) and proposed mobility routes. Also, the current and projected housing projects are highlighted in the image (as yellow and red polygons), while the proposed mixed land use and commercial industries are depicted as purple and blue polygons. Further, the SDF also incorporates the need for recreation and green areas (which

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Fig. 9.1 The study area

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Fig. 9.2 The study area depicting coastal conservation plans (BCMM Report, 2017)

are highlighted in different shades of green respectively). It is also imperative to state that any positive venture will manifest challenges along the path of implementing coastal vegetation conservation laws.

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9.8

General IDP and SDF Strategies for BCMM Spatial Planning

The BCMM IDP and SDF expound distinct policies for the purpose of managing spatial development and land use in accordance with guidelines for the spatial development of the study area, and these are geared towards the actualization of the development vision as entrenched in the BCMM SDF and IDP. The next section discusses the proposed urban space development plan from year 2015 to 2025, as highlighted in the SDF document.

9.9

The Proposed SDF Urban Space Development

In a bid to actualize the dream of a compact city for BCMM, the concept of the urban edge was incorporated into the SDF of the study area, so as to combine efforts aimed at consolidating the urban areas. It is on this premise that the SDF recommends an urban edge be established in such a way that it will have a “trickling down effect” of development on rural development, thereby favoring the latter (BCMM Report, 2017). Further, the urban edge incorporates the prevailing urban components as well as the close surrounding areas within the study area, with the overarching aim of intensifying infrastructural development, and thereafter yield higher concentrations of housing, manufacturing, commercial and industrial development (BCMM Report, 2017). Outside the urban edge, it is envisioned that the rural areas will be equipped with basic infrastructure and social amenities. The demarcation of an urban edge is imperative for the control of urban sprawl, to incorporate urban areas, and strengthen development. In a nutshell, the urban spaces function as a restriction to urban sprawl, protection of essential resources and environments, densify built-up areas; reorganize trends in development, reposition growth prospects, and justify their efficiency as areas of service delivery. Specific areas within and beyond urban spaces in the study area have been recognized as “Limited Zones of Development”, which are largely referred to as sensitive environments typified with low development intensity, and act as buffers between the rural and urban communities (Cilliers et al., 2014). Figure 9.3 represents the envisioned urban space development plans for the study area.

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Fig. 9.3 BCMM depicting urban space development plans (BCMM Report, 2017)

Figure 9.3 depicts the 2005 and latter urban space development plans as incorporated in the SDF document. The Figure depicts an extension of the urban edge boundaries in communities such as Bhisho, Zwelitsha, Dimbaza, Berlin, Mdantsane and Summerpride, West Bank, Gonubie, and King Williams Town, which depicts the original SDF 2005 urban

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edge, and the newly projected urban space is presented in yellow color, so as to easily distinguish the difference. The newly projected urban edge was envisioned due to expansion of development and hitherto population pressure experienced in the aforementioned areas.

9.10

The Development of Urbanization at BCMM

This subsection discusses how the urban sector in BCMM has evolved for over 50 years (from 1963 to 2017), which is characterized by rapid spatial urban development, as well as providing a platform for evaluating the phases of spatial urban development that conceptualizes the pre-apartheid to post-apartheid era in the study area. From the foregoing, spatial urban development in the study area has advanced in service delivery and infrastructural development in the period under review. Hence, Fig. 9.4 reveals the level of urban expansion and urban edge in the study area from 1963 to 2017. Figure 9.4 depicts the spatio-temporal changes within the BCMM ecological space, which is majorly attributable to urban expansion, and thereby reflects the dynamics of human interference in the metropolis. The visual interpretation was expedient in categorizing the locations and degrees of change in grassland, forest vegetation, urban areas, and water bodies. The satellite imageries reveal increases in urban expansion and grassland, as well as decreased vegetation LULC and water bodies from 1963 to 2017. The year 1963 was characterized by uneven spatial development, and the major area that was urbanized was East London and Beacon Bay with some features of residential buildings and so on. Other areas that had very few infrastructural facilities (such as reisdential buildings, roads and rails, and so on) were Zwelitsha, Bisho, and Berlin (BCMM Report, 2017). The year 2011 witnessed further increase in spatial urban development around East London, Beacon Bay, KWT, Zwelitsha, Bisho, Berlin, Gonubie, and Dimbaza. This observation conforms with research results derived by Olatoye (2020), revealing that the BCMM built-up area had increased from 194 km2 in 1998 to 814 km2 in 2008. Forest cover had diminished in aerial extent from 804.9 km2 in 1998 to 338 km2 from 1998 to 2018, which is approximately 17% loss. From the foregoing, Olatoye (2020) explained that this loss is due to increasing urbanization that took place in the study area within these years, which resulted in vegetation loss. Also, water bodies in

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Fig. 9.4 Urban expansion at BCMM in 1963, 1989, 2011, and 2017 respectively (BCMM Report, 2017)

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the study area witnessed a decrease from 33.8 km2 in 1998 to 22.7 km2 in 2018. The results derived from Remote Sensing and Geographical Information Systems image classification and interpretation, in combination with field authentication during the period under review.

9.11 9.11.1

Empirical Results

Implications of the IDP and SDF Accountability Tools on the Spatial Development of BCMM

According to BCMM Report (2017), the implication of the IDP and SDF policy framework on the metro municipality as regards sustainable urban development include the following: The IDP and SDF have made significant provisions for environmental/ecological challenges and sensitivities over the years within the implementation of strategic spatial and land use change planning and decision-making processes. Secondly, both policies have led to the development of spatial planning in the study area (Ruwanza and Shackleton, 2016). Thirdly, the documents clearly state the importance of strategic spatio-environmental representation towards future planning and guidance towards ecological conservation projects and investments (Cole et al., 2017; Nel, 2019). Additionally, the IDP and SDF policy frameworks have contributed in the actualization of more comprehensive integrated strategies towards planning and development in the study area. Conclusively, both documents have advocated for the management of some planning initiatives such as ecological conservation, spatial planning, land use planning/development, through integrated development planning strategies (Agyepong and Nhamo, 2017; Marais et al., 2016; Monkam, 2014 ). Discussion A critique Regarding the Performance and Implementation of the SDF AND IDP Coastal Biodiversity Conservation Policies at BCMM since the Post-Colonial Era Despite the positive contributions of the SDF and IDP spatial policy framework, to the development of BCMM, it is empirically evident that there is a lack of visible implementation of the biodiversity conservation policies in the SDF and IDP documents, resulting in uncontrolled anthropogenic interventions such as unmonitored urban expansion activities, which is, still largely uncontrolled. Hence, this has adversely culminated

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in the reduction in coastal vegetation and wildlife species overall quantity and ecosystem diversity; distruption of biogeochemical cycles and CVEs scenic beauty; increase in soil erosion and reduced soil precipitation, and the gradual disappearance of wildlife habitat. Other environmental hazards resulting from the non-implementation of the SDF and IDP biodiversity conservation policies include: increase in the quantity of atmospheric carbon, due to the reduction in the quantity of sequestered carbon. Other examples include the reduction in microbial population and basal respiration activities in the soil; increase in the incidence of pests and diseases; alteration of the micro-climatic conditions of the study area, among others. From the foregoing, typical examples of nonimplementation of the SDF and IDP conservation laws include the coastal areas of Nahoon Nature Reserve and Quigney Business District, which are characterized by uncontrolled urban expansion; leading to encroachment into CVEs in these areas. These have further culminated in the reduction of the ecological functioning of goods and services (Ruwanza and Shackleton, 2016); as well as the loss of coastal habitat for endangered plant species and wildlife, and reduction of soil microbial activities in those areas. 9.11.2

Conclusive Consequences

This chapter focused extensively on a critical evaluation of the Integrated Development Plan and the Spatial Development Framework of BCMM, which is the foremost document channeling all administrative actions of the study area. Further, the SDF and IDP policy framework mirrors the desires of the inhabitants, which is premised on the human and capital resources of the metro municipality. The role of the SDF policy framework in ensuring the spatial development of the metropolitan area cannot be under-rated, as it is the documentation of the viable and sustainable ways of channeling the socio-economic requirements of the BCMM people to improve their living conditions. In line with the aim of this research, which centers on urban expansion, CVEs and conservation in BCMM, the IDP and SDF policy framework have significantly enhanced the spatial development of the former BCMM apartheid space, (which was characterized by spatial segregation and fragmentation of white and black communities and services) into a more efficient, productive and spatially balanced metropolitan area. Further, the functioning of ecosystems goods and services have improved on account of the entrenchment

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of the IDP and SDF policy framework of the study area, and this is elucidated in the subsequent chapter, which unraveled the second study objective of this thesis on ecosystem functioning, goods, services, and economic benefits in BCMM. On the other hand, the urban coastal areas have witnessed vegetal losses because of the non-implementation of the biodiversity conservation policies, as well as the establishment of development nodes and extension of urban edges, as recommended by the IDP and SDF policy framework. For example, urban expansion has greatly degraded the fragile CVEs in the study area; most especially around the Nahoon Nature Reserve, Quigney. It is on this premise, therefore, that this study emphasizes the urgent need for local authorities to monitor and ensure strict compliance with biodiversity legislation and conservation policies geared towards the sustainability of coastal ecosystems functioning in the study area. Acknowledgements The authors wish to acknowledge the funding support from Govan Mbeki Research and Development Centre (GMRDC), University of Fort Hare, Alice, Province of the Eastern Cape, South Africa.

References Agyepong, A. O., & Nhamo, G. (2017). Green procurement in South Africa: Perspectives on legislative provisions in metropolitan municipalities. Environment, Development and Sustainability, 19(6), 2457–2474. BCMM Report. (2017). Buffalo City Metropolitan Municipality Report. Benya, Z. N. (2011). The Effectiveness of Poverty Alleviation Initiatives in Buffalo City Metropolitan Municipality (Masters Dissertation, Department of Business Economics. Nelson Mandela University, South Africa). Cilliers, S., Du Toit, M., Cilliers, J., Drewes, E., & Retief, F. (2014). Sustainable urban landscapes: South African perspectives on transdisciplinary possibilities. Landscape and Urban Planning, 125, 260–270. Cole, M. J., Bailey, R. M., & New, M. G. (2017). Spatial variability in sustainable development trajectories in South Africa: Provincial level safe and just operating spaces. Sustainability science, 12(5), 829–848. Marais, L., Nel, E., & Donaldson, R. (2016). Secondary cities in South Africa. In Secondary Cities and Development (Vol. 1, No. 26, pp. 1–26). Routledge in association with GSE Research. Monkam, N. F. (2014). Local municipality productive efficiency and its determinants in South Africa. Development Southern Africa, 31(2), 275–298.

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Mostert, E., Gaertner, M., Holmes, P. M., Rebelo, A. G., & Richardson, D. M. (2017). Impacts of invasive alien trees on threatened lowland vegetation types in the Cape Floristic Region, South Africa. South African Journal of Botany, 108, 209–222. Nel, E. L. (2019). Regional and Local Economic Development in South Africa: The Experience of the Eastern Cape. Routledge. Olatoye, TA. (2020). Effects of Urban Expansion on Coastal Vegetation Ecosystems Conservation and Functioning at Buffalo City Metropolitan Municipality (329pp) (Doctoral Thesis; Department of Geography and Environmental Science, Faculty of Science and Agriculture, University of fort Hare, Alice Campus, South Africa). Ruwanza, S., & Shackleton, C. M. (2016). Incorporation of environmental issues in South Africa’s municipal integrated development plans. International Journal of Sustainable Development & World Ecology, 23(1), 28–39. Sinuka, S. S. (2017). The Socio-Environmental Impacts of Sewage Spills on Communities in East London, Eastern Cape, South Africa (Doctoral Dissertation, The University Of Fort Hare). Statistics South Africa. (2012). Census 2011 Statistical release - P0301.4. Pretoria: Statistics South Africa. Turok, I. (2012). Urbanization and Development in South Africa: Economic Imperatives, Spatial Distortions and Strategic Responses. London: Human Settlements Group, International Institute for Environment and Development. Zwelibanzi, M. E. (2011). An Analysis of the Factors Influencing the Provision of Water in the Buffalo City Municipality, Province of the Eastern Cape (Doctoral dissertation, Nelson Mandela Metropolitan University).

CHAPTER 10

Policy Directions for Oil Pipelines Vandalism, Accountability, and Socio-environmental Outcomes Akinseye Olatokunbo Aluko, Bashir Sulieman, Gbadebo O. A. Odularu, and Rasaki James

10.1

Background of the Study

Between 2015 and 2019, Nigeria contributed almost a third of all oil outputs from Africa with about 2 million barrels per day which significantly justifies the country’s major revenue from oil production as the

A. O. Aluko (B) · B. Sulieman Oil and Gas Management, Docks School of Business and Law, University of East London Royal, London, UK e-mail: [email protected] B. Sulieman e-mail: [email protected] G. O. A. Odularu Virginia Military Institute, Lexington, VA, USA e-mail: [email protected]; [email protected]; [email protected]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4_10

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key economic backbone (Asagunla and Agbede 2018). According to a report by Oladipo (2019) published by The Business Day, focused on the country’s revenues on oil for the fiscal year 2019 stood at a staggering N4.6 trillion which is equivalent to $120 billion. According to the report, this accounts for 60% of total revenues. Despite the high national revenue generated from oil even by global standards, the United Nations Economic Commission for Africa (UNECA) estimates that about 60.9% of Nigeria’s population lives way below the poverty line. Being the most populous country in Africa with about 200 million people, 60% translates to about 120 million people (Tartiyus et al. 2015). Dauda (2017) attributes the high poverty level in Nigeria to wanton mismanagement of the country’s resources by the political class. Dauda further pointed out that most of the proceeds from oil end up in the pockets of a few people as opposed to being used to improve the living standards of the general population. This phenomenon has had devastating effects on the country, giving rise to several socio-economic problems such as crime, war especially in the oil-rich Niger Delta Region, pipeline vandalism, and corruption, among others. Mismanagement of the oil resources by the political elite, largely due to a lack of Accountability and Transparency has driven poverty level higher in some parts of the country with rich oil deposits such as the Niger Delta which has consequently led to a

Department of Economics and Finance, Bay Atlantic University, Washington, DC, USA Nigerian Economic Summit Group (NESG), Lagos, Nigeria Centre for the Study of Economies of Africa (CSEA), Abuja, Nigeria United States Institute for Advancing Community Development through Interdisciplinary Scientific Research and Education (USI-ADMIRE), Washington, DC, USA Socioeconomic Research and Applications and Projects (SERAP), Washington, DC, USA Mondo Forte, Washington, DC, USA R. James Sustainable Energy and Allied Disciplines, Glasgow Caledonian University, London, UK e-mail: [email protected]

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sharp increase in pipeline vandalism (Dauda 2017). Therefore, appropriate accountability is required for an effective governance. Government must be always held accountable to ensure its operations are effective (Idika 2018).

10.2

The Rationale

The sharp increase in pipeline vandalism has attracted the interest of scholars who have tried over the years to establish some of the reasons behind the practice as well as its overall effects on various aspects in Nigeria (Okoli 2019). Okoli further pointed it out that, researchers continue to explore various angles of oil pipeline vandalism, providing useful insights on how to deal with the menace. Literature and academic scholar have contributed immensely towards bridging the information gap in the research scope as well as providing recommendations on how the vandalism of oil pipelines can be suppressed. While the findings sometimes differ, all the studies conducted have adopted a systematic scientific research structure in delivering such findings which explains why a similar structure was adopted for this study. Anifowose et al. (2012) opined that the issues of pipeline vandalism are significantly drawn the attention of all major stakeholders within the local and international oil and gas industry. They further mentioned that the problem of oil pipeline vandalism is yet to receive a meaningful solution. A bulk portion of conducted research has gone towards investigating the environmental effects of oil spillages, whether accidental or through vandalized pipelines. A considerable number have also focused on the effects of spillages on the health of the surrounding communities given the pollution effects of oil. This study will, therefore, attempt to offer a more detailed view of the paramount effects of pipeline vandalism on Nigeria’s Economy following the objectives and questions highlighted below.

10.3

Research Aims, Questions, and Gaps

This research aims to understand the socio-environmental implications of oil pipelines vandalism in Nigeria. More specifically, the aims of this research include:

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. To investigate the social-environmental implications of pipeline vandalism in Nigeria. . To examine the causes of oil pipeline vandalism and understand its economic consistency in Nigeria. . To examine the competitive implication of the Nigerian oil and gas sector in the international market. Based on these aims, the research questions are as follows: Research Questions . Is pipeline vandalism a major socio-environmental problem to the Nigerian oil and gas sector? . Has oil pipeline vandalism contributed to environmental and economic stagnation in Nigeria? . Is oil pipeline vandalism a contributing factor to environmental degradation in Nigeria? . Has the Nigerian pipeline vandalism impacted on the global supply of oil and gas in the international market?

10.3.1

Research Gap

While several kinds of literature that focus on the sabotage of oil pipelines in Nigeria are available, the underlying socio-environmental effect on Nigeria’s Economy has not been tackled sufficiently. Most of the journals analyzed in the literature review section focus heavily on the environmental effects, attaching less importance to the economic loss that the country suffers. For instance, Azodo (2019) has listed several oil spillage incidents and their effects which are predominantly environmental. He fails to capture the volumes lost as well as their economic value. Similarly, there is no consensus on some of the factors that are normally attributed to the vandalism of pipelines, such as poverty. While Okoli and Orinya (2013) highlights the three factors of need, greed, and grievance as some of the leading results in tandem with the findings of Albert et al. (2019), Tukur and Hajj (2017) find no relation between poverty and vandalism. These are key economic areas that this study will investigate further to make uniting conclusions.

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Literature Review

Pipeline vandalism in the context of this study is used to refer to the wilful destruction of oil pipelines either by militia groups or locals in the locations where oil pipelines go through. Research and campaigns that advocate against the vandalism of pipelines have achieved little success mainly because of the lack of understanding of the catastrophic effects vandalizing pipelines by the local people who engage in the act. Bodo and Gimah (2019) note that most people who engage in pipeline vandalism do not understand the catastrophic economic and environmental effects of their acts. For this reason, they readily engage themselves in the act without thinking twice. Oil pipeline vandalism reduces the amount of oil that will be sold by the government by a considerable difference which makes the country to face a huge loss and a drop in economic growth (Tukur and Hajj 2017). This explains the upward trend in vandalism incidents despite antivandalism campaigns run by the government and other agencies involved in the oil industry. This chapter will look at some of the documented studies done previously about pipeline vandalism in Nigeria with specific reference to those address the research questions and objectives of this study. 10.4.1

The Extent of Pipeline Vandalism in Nigeria

There is no doubt that the vandalism of oil pipelines has been on an exponential rise in the last two decades, owing to several factors that this study seeks to establish. Inadequate pipeline protection has been one of the main disadvantages of the oil sector in Nigeria. Recently the Nigerian National Petroleum Corporation (NNPC) said that the number of cases of oil pipeline vandalism on its pipeline infrastructure has seen a 77 percent spike in June 2019, and this has affected exports and oil revenues, which have been very difficult for the Nigerian budget in the recent oil price crisis (Paraskova 2019). The findings of research conducted by Okoli (2019) found that incidents of pipeline vandalism spiked from a low of 57 incidents to as high as 2500 incidents between 1998 and 2008. This not only shows how deeply entrenched the issue of pipeline vandalism has become but also the serious threats it poses. Tukur and Hajji (2017) back Okoli’s findings in their highlights that Nigeria loses over 300,000 barrels per day to pipeline

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Table 10.1 Incidents of oil spillages experienced by Shell and their respective causes Year

Number of Spills

Sabotage

Accidental

Uncertain

2017 2018 2019

160 170 193

130 145 156

23 21 24

7 4 13

Source Adapted from shell, 2017–2019

vandalism. This is about 12% of the total daily volume of 2 million barrels that the country produces. Some of the documented significant pipeline vandalism that has occurred between 1998 and 2008, as shown in Table 10.1 have had significant devastating effects on the environmental, social, and economic fronts. Data from the Federal Government of Nigeria shows that a total of seven thousand incidents of oil spillage resulting from either wilful pipeline vandalism or accidental spillages had occurred from 1958 when oil was first discovered in Nigeria to date (Ejiba et al. 2016). Most of these spills are attributed to increased militant activities in oil-producing regions from local militant groups demanding an equal share of oil revenue. On the other hand, the World Bank estimates that the actual spillage incidents may be ten times higher because a significant number of spillages, especially those that result from terrorist activities go unreported. According to data from Shell below, one of the largest oil companies in Nigeria, the company experienced an average of 180 spill incidents every year. The data across three years (2017, 2018, and 2019) from their website is presented in Table 10.1. From the above data, it is evident that the willful vandalism of oil pipelines is the leading cause of oil spillages in Nigeria. Overall, Nigeria’s Department of Petroleum Resources estimates that over 240,000 barrels of oil are lost to spillages in the Niger Delta region, most of which are caused by illegal siphoning and vandalism of oil pipelines (Kadafa 2012).

10.5

Theoretical Review

Vandalism of oil pipelines in Nigeria can be explained and understood better using several theories that have been proposed over the years. The theory of structural materialism and the three-factor theory of need, grievance, and greed will be discussed in this section.

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Theory of Structural Materialism

The theory of structural materialism is a criminology theory that attempts to explain the origin of crime and some of the reasons why it is widespread in society. The theory posits “the crime is a creation of society and that people tend to take to crime principally as a consequence of existential conditions, which make a criminal living not only attractive but also compelling” (Okoli and Orinya 2013). In other words, people who engage in criminal activities in society do so because of its perceived benefits. The theory puts forward that to understand why certain types of crime are deeply entrenched in the society; the structure of crime must be understood. In this case, the vandalism of oil pipelines, which is considered a crime by all standards exists because of the benefits that accrue to those that engage in the crime. The high demand for the commodity both in the local and international markets contributes highly to the vandalism of oil pipelines. 10.5.2

Theory of Need, Grievance, and Greed

The theory of need, grievance, and greed can also be used to explain why the vandalism of oil pipelines in Nigeria is deeply entrenched in society. Okoli and Orinya (2013) attributes the spike in vandalism of oil pipelines in Nigeria to three key factors; need, grievance, and greed. The need factor recognizes that locals of oil-producing regions vandalize pipelines because of their poor economic conditions. Okoli further pointed it out that, the pollution effect of oil, locals in Niger Delta, and other oilproducing areas in Nigeria cannot engage in economic activities such as farming and fishing. Also, oil regions experience high militant activities that impede any form of economic impediment. The greed factor refers to the group of people who vandalize pipelines to steal oil and amass quick wealth from the proceeds. Lastly, the grievance factor refers to the group of local militants who have come up against the federal government of Nigeria to demand a fair share of oil proceeds and vandalize oil pipelines in protest. The community members have been disappointed as regards their high expectations following the discovery of oil. It can further be deduced that people of the Niger delta had high hopes with the coming of the multinational oil companies since the discovery of oil and natural gas (ONG) at Oloibiri in the present Bayelsa State in 1956 (NeyestanI 2016).

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10.6 10.6.1

Empirical Review

Causes of Pipeline Vandalism in Nigeria

Several studies as discussed below have attributed pipeline vandalism to some factors that range from poverty, increased militant activities, natural causes, and accidents caused by maintenance problems. It can be argued that oil discovery was perceived as a gateway for regular electricity supply, coastal road networks, improved modern health care facilities, increasing employment opportunities, as well as other sustainable community development, etc. The expectations were for the multinational oil companies to provide good social amenities for their host communities. However, these expectations were not met which resulted in the subsequent protest in the 1990s, and subsequent underground vandalism of oil pipelines which provided them with the possible alternative to express their frustration for long years of neglect and underdevelopment both by the federal government and multinational oil companies (Dilanthi and Richard 2018). Fathi et al. (2012) argued that marginalization remains one of the primary motivations for oil pipeline vandalism in Nigeria and posited that a significant link exists between marginalization and vandalism behavior adversely resulting in social breakdown and depreciation of social norms and values. Similarly, Katsouris and Sayne (2013) conducted a comparative study of marginalized and non-marginalized areas and posited that tendencies and behavior for oil pipeline vandalism mainly among the youths is more peculiar within marginalized areas. Furthermore, Zadeh and Ghaderzadeh (2016) in their study posited that marginalized persons are faced with more social problems, which necessitates the timely intervention of the government to build trust among the citizen before it escalates to social unrest. Local content development has been enshrined in the Nigerian oil and gas industry. According to Bello (2017), the local content policy in Nigeria is primarily aimed at promoting the participation of the indigenes in the industry. It ensures the use of local resources and workforce to increase indigenous participation to foster sustainable development. Vincent and Udeorah (2018), in a similar fashion state that the Nigerian Oil and Gas Industry Content Development Act 2010, makes it mandatory for oil companies sourcing for crude oil in Nigeria to incorporate the local content policy in their governance. This policy ensures job creation for the locals and enhances economic activity in the communities. It also enhances skill development and access to a wide range of opportunities for the locals. However, the non-implementation of this policy has resulted

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in violent protests and pipeline vandalism with negative consequences on supply chain management (SCM). Mba (2019) groups the causes of oil spillage in the Niger Delta region into human and natural causes. Based on his findings, human factors have been on the rise, currently accounting for about 30% of the total spills in the region with natural factors, which includes causes from aging pipelines and natural disasters accounting for the remainder. He further points out that the human factors that constitute the 30% are predominantly willful sabotage of the pipelines. On the other hand, Tukur and Hajj (2017) found that there was no relation between poverty or unemployment and pipeline vandalism in the Niger Delta Region. Instead, high criminal activities in oil-producing regions in Nigeria account for almost all the vandalism that occurs to the pipelines. The two-point out that the high crime rates in these areas are due to the high demand for oil worldwide. Any slight interruption of supply prompts immediate action from the government which is precisely what the militants want. Earlier, Olateju (2013) had found that vandalism is orchestrated by international organizations and that the local youths seen as direct perpetrators were just aiders. In support of his position, he explained that: Let no one is deceived for the rich, powerful, and connected are Nigeria’s oil Mafiosi (a member of Mafia). Oil theft is a big criminal ring with a sophisticated organization and international network. Where will poor people get the millions to buy or rent vessels, bribe customs, and get military cover for their operations? Oil theft is not for the poor, it is an extensive racket involving military, security apparatchiks (an official in a large political organization), politicians, dubious industrial moguls, and oil companies. (Olateju 2013, p. 14)

In contrast, Albert, Amaratunga, and Haigh (2019) express in the findings that poverty levels in some of the oil-producing states in Nigeria are considerably high. They attribute the high poverty levels to mismanagement of oil resources by the government and international oil companies which deprive the communities of the important resource. In response, locals rise against the unfair establishments to sabotage pipelines either for economic gain or for retaliation. Similarly, Mba (2019) found that among the causes of oil spillages in Nigeria’s Niger Delta region, sabotage tops the list with numerous incidents. The effects of these spillages are mainly pollution of the farmlands and water bodies. From the graph

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Fig. 10.1 Causes of spillage incidents (Source NOSDRA’s spill monitor)

below, a total of 70% of all incidents were because of sabotage as analyzed and presented in the pie chart below. The remaining 30% of the total spills were caused by other factors shown in the chart, which range from corrosion, operations and maintenance, equipment failure as well as other causes that are yet to be established (Fig. 10.1).

10.7 Socio-environmental Implications of Pipeline Vandalism in Nigeria The effects of pipeline vandalism in Nigeria spread across different aspects of society. Pipeline vandalism has environmental implications especially as it concerns environmental degradation in the Niger Delta communities. Oil pipeline vandalism results in a rising incidence of environmental pollution which is caused by oil spillage from unethical oil exploration activities and sabotage. Bombing and busting of oil pipelines especially on

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large scale result in crude oil spills on the land surface thereby degrading the environment. Pipeline vandalism with its environmental implication results in further impoverishment of the people since the arable land and vegetation have been destroyed as well as the negative impact on biodiversity, aquatic lives, and other environmental issues that contributes to the daily mean of livelihood of the people. Most rural communities in developing African countries are Agrarian hence farming, and animal husbandry remain the primary sources of economic survival (Lutz 2012). In a study conducted by (Oteh and Eze 2012) whereby the researchers discussed the impacts of vandalism in Niger Delta and linked the impacts of this act to poverty in Nigeria. Poverty is an example of a low economy; in this study, the leading cause of poverty was from the oil pipeline vandalism, which led to oil spillage in water bodies, mainly rivers. This increased spillage has led to a meager catch of fish which results in poor and low income from the fish farmers who depended on it. This has increased poverty from these farmers, and in the end, it has resulted in a drop in the Economy of the country. Land pollution, on the other hand, has also been another effect of oil pipeline vandalism, and this has caused more damage to vegetation and farms, thus impacting the lives of farmers in the area. The study discussed the main reasons for this vandalism to be theft, government ignorance, among other factors. In the process of Vandalism, innocent people are affected, and, in this case, the primary victims are the farmers. Fish farmers end up with reduced catch which cannot sustain their lives because of the spillage, on the other hand, crop farmers end up with nothing as their lands get infertile and their crops get destroyed as well. These two groups of people contribute to the growth of the economy in the country through their sales and tax-paying, therefore with their daily activities being disrupted and their source of income being destroyed, they have no other place to gain, and this results in increased poverty which results to a reduced number of capable taxpayers thus bringing in a substantial economic impact in the country. Azodo (2019) notes that numerous cases of oil spillages, most of which occur as a result of willful vandalism in the last three decades have affected the local communities in numerous ways. Figure 10.2 was extracted from the findings of Azodo (2019) to illustrate the different incidents, their location, and the effects they had on the local community (Fig. 10.2). The incidents from Fig. 10.2 were recorded between 1998 and 2004 and represent the incident’s serial number as recorded on spill monitor, the exact date it occurred, the location, state, and the effects in terms

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Fig. 10.2 Oil spillage incidents between 1998 and 2004 (Source Adopted from Azodo 2019, p. 10)

of deaths or injuries and the environmental impact. Based on the incidents in the Fig. 10.2, environmental pollution comes out as one of the major impacts of spillages resulting from vandalism. Aishatu et al. (2016) found that oil spillages resulting from vandalized pipelines have taken a toll on arable land, preventing farming of valuable crops that communities depend on for sustainability. Other than the negative environmental

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effect, the adverse effects on agricultural activities in these areas have significant implications on their economies as well as food security.

10.8 Vandalism and Competitiveness of the Nigerian Oil and Gas Sector in the International Market There is no doubt that oil is a high-value commodity which makes its price in the global market very volatile. Any slight disruptions in supply have significant effects on oil prices and oil products. While this may appear advantageous to oil-exporting countries, the ripple effect from an increase in oil products has numerous adverse effects as well. For instance, Tukur and Hajj (2017) note that while Nigeria is currently the leading exporter of crude oil in Africa and the fifth largest exporter of liquefied natural gas, it is also a significant importer of final petroleum products. Global oil shortages caused by pipeline vandalism in Nigeria may cause crude oil prices to rise, which will also raise the prices of final oil products that most countries in Africa import. Frequent disruptions such as Pipeline vandalism have a significant effect on the supply chain. It alters the flow of capital; it disrupts the supply of petroleum products to the end-users within the country and international (Albert et al. 2019). Besides, the production of other import commodities depends directly on oil. Their prices will also rise proportionately whenever the global market experiences a spike in oil prices. The effect of this on the economies of African countries, and in this case, Nigeria, as a major import destination with a vibrant population of over 200 million is a poor balance of trade. While Nigeria exports oil worth billions of dollars to some of the leading economies globally such as the United States, UK, and Japan, its GDP is still considerably lower compared to these countries (Eboreime and Umoru 2016). Figure 10.3 shows disruptions of oil production in Nigeria that have led to declining volumes which have in turn affected supply to the international market. Between 2012 and 2016, disruption in production increased from as low as below 50 barrels per day to as high as seven hundred barrels per day. The sharp rise, particularly in 2016 which saw the figure rise from an average of four hundred barrels per day to over

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Fig. 10.3 Oil production and disruptions

seven hundred barrels per day was caused by attacks from militant groups such as the Niger Delta Avengers.

10.9

Pipeline Vandalism and Accountability in the Nigerian Oil and Gas Sector

Umar et al. (2017) state that weak institutional factors resulting from poor governance are among the likely factors causing the high incidence of pipeline vandalism in Nigeria. The authors further identify the absence of accountability on the part of the government to be a major contributing factor to huge socio-economic challenges, macroeconomic instability, weak rule of law, and corruption. These often snowball into violence and pipeline vandalism, especially in the host communities of the Niger Delta region (NDR). Idika (2018) affirms that proper accountability of oil and gas operations in Nigeria is key to economic growth and enhances the effectiveness of the performance of the oil and gas industry. The author stresses that despite Nigeria realizing huge revenues from oil and gas, the process of development of the country especially the Niger Delta region has been rather slow. This is largely caused by a lack of transparency and accountability, and mismanagement of oil revenues. The author further states that government accountability is crucial for effective management of oil and gas operations and building confidence in the people.

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Therefore, this paper argues that the lack of proper accountability by the Nigerian government has led to impoverishment and underdevelopment of the Niger Delta region, resulting in pipeline vandalism and conflict.

10.10

The Concept of Sustainability in Energy Development

The Brundtland report (1987) defines sustainability as “meeting the needs of the present without compromising the ability of the future generations to meet their own needs”. The report stresses that nations of the world seeking to meet their development needs must take into cognizance how this impacts future development especially with the increasing threat of climate change. Kuhlman and Farrignton (2010), drawing from Brundtland’s report, state that the concept of sustainability arose from the concerns to balance human aspirations for a better life and the limitations imposed by nature. The authors note that as contained in the report, nations of the world could meet their present needs considering limited resources and environmental degradation by implementing sustainable development. Elkington (1999) considers the issue of sustainability from the perspective of The Triple Bottom Line (TBL) framework, stating that businesses must help society achieve the three inter-linked goals of economic prosperity, environmental protection, and social equity. Expanding on this concept, the author in “Cannibals with Forks” emphasizes that for businesses to operate sustainably in the twenty-first century, they must integrate the three dimensions of sustainability (economic, environmental and social) in their operations. Brin and Nehme (2019) consider the TBL as a Corporate Social Responsibility (CSR) framework comprising of three dimensions of performance (economic, social and environmental) which must result in sustainable outcomes. According to the author, the economic dimension stipulates that a company should achieve continuous profits for the long term, rather than make high profits in a short term. Apart from businesses paying attention to their financial affairs, they must also pay attention to social affairs such as human rights, educational services, and health services; ensuring that surrounding societal needs are satisfied for them to achieve stability over a long time. The author emphasizes that the environmental dimension of the framework makes it important for businesses

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to consider the impact of their operations on the environment and thus take necessary steps to protect it. Drawing from the foregoing, it is important that the issue of pipeline vandalism which is one of the major factors of environmental degradation in the Niger Delta region of Nigeria is addressed to enhance a sustainable oil and gas industry.

10.11 Impact of COVID-19 on Global Oil and Gas Supply Chain In the first half of 2020, the shutting down of a significant part of the world’s manufacturing, shipping business, and retail sectors due to the COVID-19 pandemic, has contributed to a sharp drop in demand for oil products (Jefferson 2020). On top of that, there was a price war between Saudi Arabia and Russia that also impacted on the strategic operational free flow of the oil and gas industry (Finley et al. 2020; Schneider and Schwartz 2020). The Covid-19 pandemic has also negatively impacted on many global businesses including the oil and gas industry. Prior to the Covid-19 pandemic, the industry was already battling with oversupply and low demand (Eric 2020). While there are not many measures in place to limit the supply, the pandemic has had dire impacts on the demand (Eric 2020). According to IEA (2020), the forecast for global oil demand in 2020 is a decline of 9.3 Mb/d due to the containment measures put in place by countries all over the world. In April 2020, the global slump in oil demand and consequent oversupply led to crude oil prices plummeting to −$38. This is unprecedented, and it underpins the impact of the coronavirus outbreak as the global economy slumps. The situation is further exacerbated by shortages of key workers and workforce as employees get infected by the coronavirus and the difficulties in practically observing social distancing (Baker McKenzie 2020; Ajami 2020).

10.12 Methodology and Data Collection Strategy This research adopted the qualitative content analysis research which provides an in-depth scholarly understanding from well researched literature and peer reviews articles (Elo et al. 2014). This method will further provide the credible and dependable information about the economic

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and environmental impact of pipeline vandalism on the Nigerian oil and gas industry. This study used archived data from reputable institutions both in Nigeria and globally, to inform the findings. Data from the Nigerian National Petroleum Cooperation (NNPC) and Nigeria Oil Spill Detection and Response Agency (NOSDRA) on the various incidents that involve sabotage of oil pipelines were used. To get a more accurate picture, the study will analyze data collected in the last ten years (Saunder et al. 2019). Key data sources include annual reports released by NOSDRA on the volumes lost by various companies, data on oil revenue from NNPC as well as the volumes, academic journals, etc.

10.13

Data Analysis Procedure

NOSDRA’s spill monitor website provided a significant portion of the data needed on spillage incidents, the respective companies involved, the number of barrels lost in each incident, the year it occurred, and the underlying causes. Using filters on the website, the data were grouped into the respective parameters that include dates, companies affected, and volume lost and tabulated on excel for further analysis (MacDonald 2012). The study focused on spillage incidents in the last ten years (2010– 2019). A total of 9991 incidents of spillages involving 53 companies were picked. The data was then analyzed further by tabulating it and generating the interpretation of the respective graphs (Saunder et al. 2019). The focus of the study was on spillages caused by vandalism/sabotage. The value of oil spilled over the years was calculated using an average of all the prices across the years calculated at$50 per barrel to accommodate price volatility. Of all the incidents sampled, Nigeria Agip Oil Company had the highest number of incidents at 47.8% while Shell spilled the highest volumes at 36% of the total barrels spilled across the ten years.

10.14

Data Collection and Discussion

This chapter presented the information processed from various data sources listed above on the effect of crude oil pipeline vandalism on oil revenue in Nigeria. It looked at the trend of spillage incidents, the resulting effect, and how it relates to the past literature analysed (Table 10.2 and Fig. 10.4).

To investigate the impact of vandalism of oil pipelines on the Nigerian Economy To investigate the causes of pipeline vandalism in Nigeria

What is the impact of pipeline vandalism on the Nigerian Economy?

To investigate the causes of pipeline vandalism in Nigeria To investigate the causes and consequences of pipeline vandalism on the Nigerian Economy What is the overreaching To investigate the impact impact of pollution of pollution on the resulting from oil pipeline socio-economic livelihood vandalism? of Nigeria

What are some of the causes of pipeline sabotage in Nigeria? What are the various causes and consequences of pipeline sabotage?

What are some of the causes of pipeline vandalism in Nigeria?

Research objectives

Research questions

Table 10.2 Qualitative mapping analysis Recorded document information

Impact of oil pollution on livelihood

Pollution has affected agricultural activities in spill areas

oil pipeline vandalization can lead to a 6 or 10% decrease in oil revenue generated Causes of Pipeline Three factors: Need, vandalism in Nigeria grievance, and greed are significant motivators of pipeline vandalism The investigation into root Pipeline sabotage is causes of sabotage and orchestrated at vandalism of pipes international players Causes and consequences No correlation between of pipeline vandalism on poverty and pipeline the Nigerian Economy vandalism

Effect of Pipeline Vandalism on Nigerian Oil Revenue

Literature

Ejiba et al. (2016)

Tukur and Hajj (2017)

Albert et al. (2019)

Okoli and Orinya (2013)

Azodo (2019)

Citation

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What are some of the Impact of population impacts of pipeline growth on economic vandalism on the Nigerian growth in Nigeria Economy? How does vandalism affect the population of Nigeria? What are the effects of population growth on the Nigerian Economy?

To investigate the impact of population growth and oil pipeline vandalism on Nigeria’s Economy

Literature

Research objectives

Research questions High poverty levels contribute to vandalism of oil pipelines in Nigeria

Recorded document information Dauda (2017)

Citation

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Fig. 10.4 Graph of GDP % of oil revenues from 1960 to 2018 (Source World Bank 2018)

The graph above shows the percentage of contribution of oil revenue to Nigeria’s GDP since oil was first discovered in the late 50s until it was commercialized in the 60s. The fluctuation in GDP contribution may be attributed to several factors such as changes in oil prices, production volumes, growth in other sectors of the Economy as well as additional discoveries of oil fields. The downward fluctuation of oil revenue can be attributed to fluctuations in price and volumes produced for the respective years. The decline in volumes produced and sold through the legal channels is eminently caused by oil lost through illegal channels such as vandalism and illegal siphoning. As expected, stolen oil is sold in the black market where it does not account for any portion of the Nigerian GDP. Oil contribution to the GDP of Nigeria was at its highest between 1978 and 1980, 1992, and recently in 2012. Recent years have witnessed a considerable decline in the same, which can be attributed to a sharp rise in other sectors of the Economy such as Agriculture, real estate, and entertainment. Also, oil revenue has declined considerably because of upsurge vandalism.

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As shown in Figs. 10.5, 10.6, and 10.7, the highest annual oil revenue lost on average was $ 118,991.05 in the year 2011 and decreased to $ 50,551.79 in 2013 before a sharp increase in 2014 to $ 113,603.05. The sharp increase in revenue lost was as a result of an increased volume of crude oil vandalized from 783.87 bbl. to 1903.54 bbl. in 2014. There was a $ 56,439.44 decrease in the oil revenue lost between 2014 and 2015, attributed to the decrease in the oil vandalism incidences that occurred, which also reduced the volume of crude oil vandalized in the same period. This suggests that with increase incidences of oil vandalized, the crude oil lost also rises which leads to a loss in revenue from crude oil. However, with reduced incidences, oil revenue increases since the volume of oil lost due to vandalism are also reduced. The values were calculated using the average oil price across the period of reference which was calculated at $60. The amounts are in millions of dollars.

Fig. 10.5 Trend analysis on the analysis of oil revenue lost between the year 2010 and 2019 (Source NOSDRA spill monitor)

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Fig. 10.6 Analysis of the frequency of crude oil vandalized between the year 2010 and 2019 (Source NOSDRA spill monitor)

Fig. 10.7 Analysis of volume of crude oil vandalized between the year 2010 and 2019 (Source NOSDRA Spill Monitor)

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Table 10.3 Value of repair and maintenance of vandalized pipelines (2015– 2019) Year

No of pipeline breaks

Cost of Repair/maintenance (N billion)

2015 2016 2017 2018 2019 Total

1856 2560 1120 2048 769 8353

103.44 112.48 129.87 137.44 73.04 556.27

Crude lost to theft (Million barrels)

Value of crude lost (N billion)

27.12 101.05 36.46 17.46 Over 22 204.09

514.09 1590.86 717.65 429.18 823.50 4075.28

Source Nigeria Natural Resource Charter (NNRC)

10.15 Estimated Repair Cost of Vandalized Pipelines in Nigeria According to an article published by The Guardian, Nigeria loses an estimated $14 billion per year to Vandalism of oil pipelines (Vidal 2015). Based on thorough research done in the Nigerian states with high incidents of pipeline vandalism that the article quotes, the amounts the government and companies spend to finance repair and cleanup works is a significant factor that motivates people to vandalize oil pipelines. Vidal (2015) notes that because of the easy money that locals get from cleanup and repair contracts, they are motivated to vandalize oil pipelines more often to secure employment. Data from the Nigerian National Petroleum Corporation (NNPC) shows that a cumulative amount of 556 billion Naira was spent to repair damaged pipelines due to vandalism and to clean up polluted areas (Nassir 2019). The number of pipeline breaks recorded for the period stood at a total of 8353 (Table 10.3).

10.16

Discussion of Findings

The findings from the analysis carried out reveal that indeed, the vandalism of oil pipelines is deeply entrenched as it contributes to over 70% of all cases of oil spillages in Nigeria. The other causes that include factors highlighted in the study contribute the remaining 30%. It is important to note that sabotage may account for a higher rate than presented in the study because of the several cases whose cause is yet to be identified.

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The findings agree with Okoli (2019) who found that a highly significant portion of oil spillages as a result of vandalism by militant groups as well as local people in the locations where pipelines pass through. The findings also agree with Ejiba et al. (2016) who had similar conclusions as Okoli (2019). Regarding the various motives of vandalism, the study found that both grievance and need are essential factors of considerations. The volumes of barrels mined from spill monitor are high, an indication of several other parties involved in the illegal oil syndicate. Areas with frequent vandalism incidents are highly militarized by the government in a bid to provide much-needed security which implies that vandalism requires parties with almost equal resources and power. This attributes most of the vandalism that occurs to militant groups. The findings agree with Olateju (2013) who attributed the vandalism of oil pipelines to players in the international market. It disagrees with Albert et al. (2019) who attributed a significant portion of the causes of vandalism to poverty. The analysis reveals that fluctuations in oil revenue and its contribution to the GDP of Nigeria were caused by the vandalism of oil pipelines and fluctuating oil prices. Eminently, vandalism contributes to the fluctuations more This is in line with Tukur and Hajj (2017) who concluded that interruptions in the supply of oil to the international market were a major cause of price instability. Militant groups intentionally sabotage pipelines to cause disruptions that will prompt the government to address some of their grievances. This affects Nigeria’s competitiveness in the international oil market. Besides, the analysis reveals that a positive correlation between oil revenues and the frequency of vandalism exists. This means that an increase in the latter affects the former. Collectively, the losses incurred from vandalism, repair, and cleanup of polluted land deprive Nigeria of an average of 6–10% of the total revenue.

10.17

Conclusion

This study aimed to investigate the socio-environmental implications of oil pipeline vandalism on the Nigerian economy. The study sought to answer the research questions identified in the study which were centered on the causes of vandalism, the extent to which vandalism exists, its socio-environmental implications on natural habitat as well as Nigeria’s competitiveness. The study reveals that oil revenue and frequency of vandalism are positively correlated which means that an increase in the frequency of vandalism national revenue losses. Regarding the respective

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causes of oil spillages, the study establishes that over 70% of total incidents reported since 2010 are directly caused by vandalism. Furthermore, through analyzed literature, the study concludes that a significant portion of vandalism is caused by militant activities and not poverty as concluded by other studies conducted in the past. However, this does not rule out poverty as a significant motivator for pipeline sabotage, especially for the low-volume incidents. The effects of vandalism on the environment are also paramount. With vandalism accounting for over 70% cases of total oil spillages by volume and by the number of incidents, it is a significant contributor to pollution. Spillages have contaminated vast tracks of arable land in the oil-producing states which has in turn crippled the agricultural sectors in these respective areas. This is an economic cost that is not directly tied to the revenue lost from the oil volumes that Nigeria loses. The contaminated land cannot be used for any other economic activity and therefore, its value is foregone. In consideration to industry competition, vandalism interferes with the global oil supply which drives its prices upward. The ripple effect from a slight increase in oil prices, drives prices of other commodities that developing countries such as Nigeria import. This affects its balance of payment. Okoli (2019) brought out three theoretical factors that contribute to the high number of vandalism incidents. The need factor identified poverty as a major motivator of pipeline vandalism by locals, grievance states that most of the incidents are carried out by local militants as a way of getting back to the government and oil companies for the unfair distribution of oil resources and the greed factor attributes vandalism to the greed of certain individuals who want to amass wealth from illegal oil proceeds. The volumes analyzed in the study reveals that they may just be too high for them to qualify as perpetrated by local individuals. Instead, the study finds reasons in the proposals of Okoli (2019) that grievance and greed are the main motivators of vandalism. Poverty, which connects to the need factor contributes an insignificant portion of vandalism because of the nature of resources need to vandalize pipelines such as transportation and a good connection to the international market where most of the stolen oil ends up. There is also the theory of structural materialism which attributes pipeline vandalism to criminal activities motivated by the perceived rewards of pipeline vandalism.

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10.18

Policy Directions and Recommendations

Given the findings from the analysis carried out, this study makes some recommendations that companies, the government, and other stakeholders in the Nigerian oil industry can adopt to curb the incidents of pipeline vandalism that are reducing the potential of the industry. The study has identified the major cause of oil spillage as sabotage which contributed to about 70% of the total incidents of pipeline vandalism. The volume lost from vandalism denies the Nigerian Economy an average of 6–10% of its total revenue. Given the size of the Nigerian Economy which has been ranked the first in Africa, oil revenue lost is comparatively a huge amount that can be channeled into other areas of the Economy. The Nigerian government should, therefore, partner with the various stakeholders in the oil industry to reduce or eliminate cases of pipeline vandalism that does not only put the local communities at risk but also pollutes huge land agricultural land area beyond cleanup. The first recommendation that this study makes is that oil companies involved in the oil trade should participate more often in community development programs to instill a sense of ownership. Some of the companies that have suffered significant vandalism of their pipelines in the past decades as recorded from NOSDRA’s spill monitor include Shell Petroleum Development Company (SPDC), Niger Delta Petroleum Resources, Addax Petroleum, and Indorama Eleme Petrochemical Company. Since 2018, these companies shave recorded considerably lower cases of vandalism, a scenario that can be attributed to some of the control measures that they have adopted. For instance, Niger Delta Petroleum Company increased the salaries of their employees who are drawn mainly from the local communities where their pipelines and refineries are located. This has instilled a sense of ownership in them which makes them vigilant in protecting the properties of the company. Besides the salary increment, the company commits a percentage of revenue generated from every barrel towards community development which has won it the hearts of the local people. This is an approach that other companies can also adopt to try and reduce pipeline vandalism that is obviously costing more than the cost they would incur in additional salaries and development projects. Similarly, Addax Petroleum has employed locals to offer security to its pipelines. The team of local security operators consists of ex-military men who offer patrol services along the company’s pipelines. This is also an approach that can be adopted by other companies.

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Thirdly, the study also recommends that pipelines that go through dangerous locations be buried underground to reduce incidents of vandalism. Burying the pipes underground will make it difficult for locals and other groups of people to vandalize the pipelines and this will contribute significantly towards reducing incidents of vandalism. While this may be expensive, it will serve a long-term purpose of keeping away people who want to vandalize the pipelines. Alternatively, companies can change the mode of transport from pipelines to road or rail transport. Through the partnership, the companies can build roads and railway lines that are purposely meant to transport oil. Lastly, the Covid-19 pandemic situation has led to factories shutting down, restrictions imposed on traveling, and consequently an unprecedented reduction in global oil demand by about million barrels daily. The pandemic has also impacted on the free flow of demand and supply of oil and gas in the international market (Jefferson 2020). This setback can be suggested as the major determinant factor of the WTI price fall to −US$37 in April 2020 (Kingsly and Kouam 2020). The Nigerian government should strategically consider wholesale diversification into Agriculture to avoid relying heavily on oil as the mainstay of the Economy. This will enhance a sustainable economy and sustainable energy development. Financial institutions and the government should support (financially and through incentives) large-scale development of renewable energy to encourage investors in this sector and lower costs.

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Index

A access, 36–38, 42, 58, 60, 94, 130, 152, 155, 174 accountability, 2–9, 13, 15–17, 19–27, 29, 64, 66–69, 71–76, 78, 79, 84–86, 93–95, 97–99, 151, 169, 180, 181 accountability mechanism, 71, 73, 74, 94 accountability to the State, 76, 77, 86, 87 accountants, 15, 24, 29, 141, 145 accounting errors, 13, 145 Accounting Theory and Practice, 139 accounts, 20, 21, 29, 66, 138, 168 Adam Smith International, 61 Africa, 2, 6, 33–37, 44, 45, 60, 103, 105, 107, 111, 113, 114, 167, 179, 192 agrarian, 177 agriculture, 61, 67, 155, 186, 193 all-inclusive, 151 Altman Z-score, 106, 113, 114

animal husbandry, 177 aquatic lives, 177 auditing, 29, 68 auditing personnel, 29 Australia, 61

B Bangladesh, 57 banking facility, 36, 37 Bank of Industry CARES Programme, 58 bankruptcy, 10, 105, 106, 114 bankruptcy models, 106 barrels of oil, 172 Belgium, 61 biodiversity, 162, 163, 177 Brazil, 57 budget, 14, 18, 21, 54, 56, 59, 64, 66–68, 77, 150, 171 budgetary disproportions, 66 budget control, 14 budget deficit, 67, 68

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 G. O. A. Odularu (ed.), Strengthening Systems Accountability for Enterprise Performance and Development Planning, https://doi.org/10.1007/978-3-031-11779-4

199

200

INDEX

Buffalo City Metropolitan Municipality (BCMM), 150–155, 158, 160, 162 businesses, 4, 37, 57, 58, 63, 66, 105, 114, 124, 126, 181, 182 business expansion, 36, 46 business survival, 41 C Canada, 61 Capacity Development Strategy, 2 capacity-strengthening, 4–6, 69 capital expenditure, 54 cash flow, 35, 36 China, 36, 103, 104, 122 Chinese government, 122, 127 Coastal vegetation management, 150 code of conduct, 22, 27, 81, 85 communities, 3, 4, 58, 68, 127, 158, 159, 169, 174–178, 180, 192 community involvement, 36, 41 consolidated revenue fund (CRF), 66 COVID-19 Action Recovery and Economic Stimulus (CARES) Programme, 58 COVID-19 Impact, 58 COVID-19 pandemic, 10, 58, 64, 66, 103–106, 114, 126–128, 193 creativity, 36, 41 criminology, 173 customer satisfaction, 36 D data-driven, 2, 6 debt trajectory, 64 decentralization, 54 dental regulatory acts, 57, 60 deregulation, 64 development planning framework, 33 development policies, 150 development trajectory, 2

digitalization, 10, 66, 68, 114 digital platforms, 67 disciplinary procedures, 74 discriminant analysis, 106, 107, 110, 112

E Economic Development Enterprise (EDE), 34 economic lockdown, 66 economic planning, 2, 4, 10, 68 education, 14, 37, 60, 61, 97, 130 effectiveness, 5, 6, 16, 18, 21, 25, 26, 53, 67, 69, 180 efficiency, 18–20, 25, 53, 129, 158 employee capacity, 35, 36 energy, 61, 126, 193 enterprise failure, 34, 35, 37, 43–46 enterprise performance, 4, 5, 10, 35–37, 39, 40, 44, 46 Enterprise Performance Indicators, 35, 41 environmental policies, 152 environmental sustainability, 123, 124, 130, 150, 151 ethical commitment, 36 Ethiopia, 61 expenditure adequacy, 53 external government health expenditure per capital, 53 extrajudicial killings, 74

F farming, 155, 173, 177, 178 2020 Finance Bill, 67 financial reporting/financial reporting systems, 13, 14, 68, 139 financial resources, 23, 56 firms, 3, 4, 105, 110, 112 fiscal accountability, 21

INDEX

Fiscal Responsibility Act (FRA), 20, 67, 68 fiscal squeeze, 63 fiscal stability, 63 foreign direct investment (FDI), 59 France, 61

G gender, 5, 35, 38, 43, 46 Generally Accepted Accounting Principles (GAAP), 138, 145 Germany, 61 Ghana, 57 Global Giving, 61 governance, 3, 6, 13, 18, 27, 80, 89, 126, 129, 169, 174, 180 governments, 3, 4, 8, 14, 58, 114, 126, 127, 130, 137 greed, 170, 172, 173, 191 grievance, 170, 172, 173, 190, 191

H health, 10, 14, 53, 54, 57, 58, 60, 61, 67, 68, 122, 124, 127, 129, 130, 169, 174, 181 healthiness, 67 health insurance, 60 health regulatory Acts, 57, 60 Health Sector Reliance, 57 Health systems, 54, 68 Health Systems Accountability, 53 household, 3, 4, 37, 57, 58, 63, 126, 154 humanitarian support, 57 human rights violation, 72–76, 79, 80, 82, 85, 86, 88, 89, 93, 94, 97, 98

I IFAD, 61

201

Independent accountability, 76, 77, 93 Indigo Trust, 61 information and communication technology (ICT), 124 innovation, 34, 36, 105, 123 insolvency, 105, 106 Integrated Development Plan (IDP), 34, 150–152, 154, 158, 162–164 internal audits, 15, 24, 25, 27 internally displaced people (IDPs), 58 international assistance, 57 intersectoral allocation, 63 inventory levels, 36, 41 Ireland, 61

K Kenya, 8, 57, 60, 61 Kenya Vision 2030, 8 knowledge, 2–4, 18, 22, 23, 34, 36, 41, 72–74, 76, 94, 99, 136, 141 know-your-customer, 68

L land use conservation, 10, 150 law enforcements, 10, 71–76, 78–83, 85–87, 89, 90, 93–95, 97–99 laws, 10, 18, 67, 75, 78, 84, 87, 94, 126, 137, 142, 143, 145, 150, 157, 163 liquidity, 106, 139 loan capacity, 36, 41 local governments, 54 logistics regression, 107

M maintenance, 81, 153, 174, 176, 189 Malaria Consortium, 61 market development, 36, 41 market share, 36, 41, 139

202

INDEX

market size, 36, 41 medical regulations, 57, 60 medium-term, 59, 63 Mercy Corps Europe, 61 Micro, 16 Micro, Small, and Medium Enterprises (MSEMEs), 58 mobility, 122–126, 128, 153, 155

N National Blood Service Commission (NBSC), 60 National Health Act 2014, 57, 60 need, 3–6, 9, 14, 20, 21, 29, 34–36, 38, 41, 45, 46, 56–58, 63, 67, 68, 73, 79, 83, 93, 98, 99, 105, 114, 124, 125, 127, 130, 136, 139, 145, 151, 155, 164, 170, 172, 173, 181, 183, 190, 191 Netherlands, 22, 61 Netherlands Enterprises, 61 New Zealand, 61 Niger Delta region (NDR), 168, 172, 175, 180–182 Nigeria, 3, 10, 13–16, 19, 20, 22–27, 57–61, 63–66, 68, 71–74, 78–80, 82, 86, 87, 89, 91, 93, 97–99, 104, 105, 137, 140, 167, 169–177, 179, 180, 182–184, 186, 189–191 Nigeria Natural Resource Charter (NNRC), 189 non-profit organization (NPO), 10, 129, 136, 137, 139–143, 145, 146 non-supported enterprise, 35, 43, 45

O oil, 10, 64, 65, 67, 167–180, 182–187, 189–193

oil revenue, 171, 172, 180, 183, 184, 186, 187, 190, 192 One Million Safe Blood Units Initiative (OMBUI), 60 organizational accountability, 21 out-of-pocket/out-of-pocket payment, 53 overseas development assistance (ODA), 59–61, 63 Oxfam, 61 P palliative programmes, 56 pipelines, 10, 169–185, 189–193 police, 75, 77–83, 85, 87, 92–94, 128 police corporations, 74 political accountability, 19, 22, 77 political actors, 74, 75, 81, 88, 93, 95–99 political will, 10, 72, 74–76, 79, 80, 85, 86, 89, 95–99 post-pandemic, 63, 65, 68 poverty, 6, 34, 38, 168, 170, 174, 175, 177, 184, 185, 190, 191 probability of default, 10, 107, 110, 114 productivity, 36, 41, 126, 139 profit to sales, 36, 41 public accountability, 13, 15, 22, 23, 73, 76–78, 86, 90 Public Accounts Committee (PAC), 20, 21, 29 public officers, 15, 22–27 public policy, 6, 95–98 public records, 25, 27 Public-sector, 3, 6 public-sector accounting, 14, 15, 17, 18, 23–29 Q quality of life, 8, 36, 41, 123, 124

INDEX

R recurrent expenditure, 56, 65 remittances, 59, 65 repair, 189, 190 rural areas, 34–38, 42, 44–46, 158 rurality, 10, 35, 38, 40, 42

S safety nets, 56, 63 sales growth, 36, 41, 139 Sierra Leone, 57 Sight savers, 61 simulation, 110, 111 skills, 15, 24, 25, 27, 29, 36, 37, 41, 45, 97 smart cities, 10, 121, 123–130 social distancing, 66, 124, 182 social media, 122, 123, 130 socioeconomic reprioritization, 63 socio-environment, 10, 170, 176, 190 Spain, 61 Spatial Development Framework (SDF), 151, 152, 163 spending, 17, 54, 56, 58, 60, 65, 77 spillage, 169, 170, 172, 175–178, 183, 189–192 stakeholders, 7, 8, 14, 33, 67, 74, 83, 95, 98, 140, 150, 169, 192 states governments, 57 structural materialism, 172, 173, 191 success indicators, 39, 40 support initiatives, 34, 35, 43–46, 98 sustainable development, 3, 6, 69, 126, 152, 174, 181 Sweden, 61 Switzerland, 61

T tax authorities, 68

203

taxpayers, 68, 177 telecommunication, 60, 61 the constitution, 20, 81–83, 85, 88, 89, 91, 93 total health sector expenditure, 54 Treasury Single Account (TSA), 66 trust, 6, 15, 19, 27, 174 turnover, 35, 36, 40, 41 U UNDP, 19, 61 unemployment, 34, 37, 123, 175 UNIDO, 61 United Nations Economic Commission for Africa (UNECA), 2, 3, 168 United States, 57, 61, 104, 179 Universal Health Coverage, 53 V vaccination access, 58 value added tax (VAT), 65, 68 vandalism, 10, 168–187, 189–193 voluntary health care payment schemes, 137, 142 vulnerable communities, 58 W workability, 68 working capital, 40, 41, 106 World Health Organization (WHO), 122 Wuhan, 122, 127, 128 Y Yayale Ahmed Interprofessional Health Committee Report, 57, 60