University of Dundee DOCTOR of PHILOSOPHY Governance And
Total Page:16
File Type:pdf, Size:1020Kb
University of Dundee DOCTOR OF PHILOSOPHY Governance and Accountability Issues in Nigerian Parastatals The Case of Ajaokuta Steel Obera, Johnson Award date: 2015 Link to publication General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal Take down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. Download date: 02. Oct. 2021 Governance and Accountability Issues in Nigerian Parastatals: The Case of Ajaokuta Steel Jeremiah Ojochema Johnson Obera A thesis submitted in fulfilment of the requirements for the award of the Degree of Doctor of Philosophy in Accounting and Business Finance July 2015 University of Dundee School of Business Dundee, Scotland, UK. Dedication To Almighty God i Declaration This is to certify that the work herein is my work and has not been accepted for higher degree previously. ………………………………………… OBERA J.O.J. Signature and Date Certification We hereby certify that Jeremiah Ojochema Johnson Obera has fulfilled the conditions of the relevant ordinance and regulations of the University of Dundee, Scotland, UK for the award of PhD in Accounting and Business Finance. ……………………………………………………………………………………….. Professor Robin Roslender Professor Jim Haslam Signature and Date Signature and Date ii Acknowledgements I would like to record my special thanks of gratitude to God and people who helped me to complete this thesis. To God be the glory for all that He has done for me. My appreciation goes to two men of power, calibre, and generals in academia who agreed to mentor me from whom I tap great knowledge and experience. These men are Professors Robin Roslender and Jim Haslam. Thank God to be mentored by Professor Robin Roslender whose wealth of experience has being brought to bear in my work. Thank you very much Professor Robin. I want to put on record the efforts of Professor Jim Haslam who was my first supervisor from 11 January 2010 up to early 2012. He wrote to Nigerian authorities to help me financially because that will add to the progress of the country. This was a very difficult time in my life and God intervened. Thanks Professor Jim. Also Prof. Rania Kamla and Prof. Christine Helliar, thank you.I wish to thank accounting staff for their kindness. I admire the uniqueness of Professor David Power, Professor Bruce Burton and Dr Theresa Dunne and want to remember them. I am grateful to my PhD colleagues especially Dr Ahmed Ahmed Hassan from Egypt for his friendliness. I would also like to acknowledge some help with proof-reading from Angela Wilkie (ICAS Research Administrator). My thanks also go to Dr Ayodele Asokemeh and Dr Aminu Hassan. My thanks go to my parents Mr Obera Johnson Okakwu and late Mrs Adijetu Obera Okakwu for educating me and whose potent prayers keep me going. John Ejeh thank you, for your prayers keep me going. John, you have been a brother, friend and pastor to me. I appreciate John Sani of FPI and others too numerous to mention in this thesis that have helped me directly or indirectly especially those interviewed at Ajaokuta and outside Ajaokuta. I am grateful to ETF Abuja and Kogi State Polytechnic, Lokoja for their sponsorship. I express my gratitude to Ahonya, Ojonugwa, Oj’arome, Unekw’ojo, Ojodomo, and Ojoma for their supports. Unite Ekwo thanks for your encouragements. I thank Matthew Oguche and his family, Monica and Atayi for their assistance to me at a crucial moment. The researcher is always grateful to God and himself for always remembering Joshua 14:12; “Now therefore give me this mountain, whereof the LORD spake in that day.” To God be the Glory. iii Abstract The purpose of this study is to examine and understand why parastatals in Nigeria are on the face of it performing so poorly. Parastatals are critised for being ostensibly immersed with ethnicism, corruption, nepotism, patronage, clientelism, low accountability and transparency. These issues were explored in the context of Ajaokuta Steel; an enterprise that was substantially complete two decades ago but subsequently progressed no further. Ajaokuta Steel is an industrial giant meant to take the lead of industrialising, developing, and taking Nigeria and Africa from poverty and unemployment. To pursue this study the researcher employed mixed methods of research with interpretivism combined with a critical ambition and a case study as the main research strategy. The researcher used questionnaires, observations, interviews to gather data. Theoretical framework based on neopatrimonialism was used to guide the researcher in the empirical work and in the study. The interviews from the case site and stakeholders were analysed from the voice recorder and those from the questionnaires were analysed using descriptive statistics. The use of several data collecting methods was to achieve triangulation and because of the seriousness of the problem which needed an in-depth investigation to unveil the mystery behind the non-completion of the giant moribund industry. The results of the interviews, case study and questionnaires indicated that the problems of governance and accountability of parastatals in Nigeria are that governing board members and chairmen who formulate policies are appointed to boards based on political patronage, ethnic balancing and religious considerations, thereby loading boards with unqualified people who may ultimately compromise an organisation such as Ajaokuta Steel. Interviewees and respondents also identified a lack of political will on the part of the government, suggestions of an international conspiracy, corruption, military incursions in politics, the geographical location of Ajaokuta Steel and the culture of neglecting projects, as further contributory factors. Interviewees and respondents mentioned also lack of accountability and transparency in the affairs of parastatals. These factors have greatly affected all parastatals in Nigeria. It was recommended that parastatals should appoint board members, the CEO and staff based on track records of good antecedents; publish their accounts in the national newspapers; or be privatised by Public Private Partnership (PPP) so that government will be able to concentrate on its primary duties of providing security, health services and education for its citizens. Key words: Neopatrimonialism, accountability, patronage, clietelism, governance, transparency, triangulation and corruption. iv TABLE OF CONTENTS Chapter Title Page Dedication i Declaration ii Certification ii Aknowledgements iii Abstract iv Table of contents v List of appendices x Acronyms xi List of tables xiv List of figures xv Chapter One: Introduction 1 1.0 Background 2 Ajaokuta Steel Company Limited (ASCL), Ajaokuta: an 1.1 5 introductory overview of the case 1.2 Governance and Accountability 10 1.3 Research aims and objectives 13 1.4 Research questions 14 1.5 Scope of the study 15 1.6 Gaps and Contributions to knowledge 16 1.7 Motivation and importance of the study 18 1.8 The structure of the thesis 20 Chapter Two: Nigeria - A Contextual Analysis 23 2.0 Introduction 24 2.1 Nigeria: historical context and social background 24 2.2 The Nigerian political environment- executive branch 29 2.3 The Nigerian National Assembly- legislative branch 35 2.4 The Nigerian Judicial System 36 2.5 The Nigerian economic environment 39 Importance of Iron and Steel Industry and their development in 2.6 40 Nigeria 2.6.1 Delta Steel Company Limited (DSCL), Ovwian-Aladja 44 2.6.2 Private Steel Companies in Nigeria 45 2.7 Nigerian National Development Plans 46 2.8 Regional militias in Nigeria 49 2.8.1 Oodua People’s Congress (OPC) 49 2.8.2 Niger Delta groups 49 The Movement for the Actualization of Sovereign State of Biafra 2.8.3 49 (MASSOB) 2.8.4 The Arewa People’s Congress (APC) 50 2.8.5 The Boko Haram (BH) 50 2.9 Nigeria’s role in Africa 51 2.10 Summary and Conclusion 51 v Chapter Three: Governance and Accountability 53 Issues in Parastatals: Review of prior studies 3.0 Introduction 54 Governance issues in mainstream theory: private and public 3.1 55 sectors cross referred 3.2 Governance: defining governance 60 3.3 Importance of good governance 61 3.4 The principles of governance in the public sector 63 3.5 Governance issues around the World 65 3.6 Governance issues arising in Africa 67 Governance issues found in studies of a number of African 3.7 69 countries 3.8 Parastatal organisations 71 3.8.1 Pillars of governance in parastatal organisations 73 3.8.1.1 Standard of behaviour 73 3.8.1.2 Organisational structures and processes 73 3.8.1.2.1 The governing board of parastatals 74 3.8.1.2.2 The appointment and meeting of governing board 74 members 3.8.1.2.3 The roles and responsibilities of governing board 75 3.8.1.2.4 The role of governing board Chair 76 3.8.1.2.5 Non-executive members of the governing board 77 3.8.1.2.6 The role of the Chief Executive Officer (CEO) 78 3.8.1.3.1 Risk Management in parastatals 79 3.8.1.3.2 Internal Control System in parastatals