AN EXAMINATION OF THE PROBLEMS AND PROSPECTS OF MONETIZATION POLICY IN THE NIGERIAN PUBLIC SECTOR

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

During Nigeria's colonial period, its Public Service largely retained the characteristics of the Colonial Public Service. According to Omenma, (2019), the remuneration structure in Nigeria was inherited from colonial policies and administration. Initially, during the colonial era, administrators from the United Kingdom formed the core of the national administration in Nigeria. These expatriate administrators, who were few in number but occupied senior positions, were provided with various incentives due to the challenges and risks associated with their roles. However, they deemed the existing incentives insufficient and demanded additional perks to compensate for leaving lucrative opportunities in Europe for service in what they perceived as less desirable conditions. Consequently, the Harragin Salaries Commission of 1945 was established to address their demands. This commission devised a package of incentives, including car allowances, European-style housing, free medical care, domestic help, and first-class travel, tailored to the needs and preferences of these expatriate officials. These conditions were designed to facilitate their work and mobility across different colonies with minimal disruption. However, from the 1950s onward, the colonial government began a deliberate disengagement process, leading to the integration of more Nigerians into the administrative structure. Before independence in 1960, a pool of middle-level officers, previously absent in the colonial public service, was established. These officers later assumed leadership roles in the public service post-independence. This transition provided the indigenous administrative elites with more flexibility in managing wages, salaries, and fringe benefits. As a result, the benefits enjoyed by colonial administrators were extended to indigenous administrators. However, this wholesale adoption lacked adequate justification. For instance, providing free accommodation, which was originally intended to incentivize colonial administrators to settle quickly into their roles, was not entirely applicable to indigenous administrators who worked among their own people (Nick, 2016). The Gorsuch Commission of 1954 recommended aligning the structures and remunerations of Nigeria's public service with local conditions and requirements. However, the continued operation of the benefits inherited from colonial times has been prone to abuse, particularly during periods of military rule. Practices such as submitting inflated medical bills for reimbursement, annual renovations of official residences, and maintaining fleets of vehicles at inflated costs have contributed to significant government recurrent expenditure (Obodo, 2018). The concerns over the high cost of administering the public sector have prompted limited reforms, such as the monetization policy (also known as monetization of fringe benefits) in select parastatals like the Central Bank of Nigeria and the Nigeria National Petroleum Corporation, as noted by the Federal Ministry of Finance in 2003. 

Furthermore, previous governments have made attempts at monetization, focusing on selectively applying it to certain fringe benefits such as leave grants, entertainment allowances, meal subsidies, domestic servants allowances, and duty tour allowances. However, it was under the former president of Nigeria ( Olusegun Obasanjo)  administration in 2002 that a comprehensive monetization policy was introduced as part of civil service reform. This policy represented a new approach to remunerating public officers. However, the impetus for this reform stemmed from the expansion of the public sector, which exerted significant strain on government budgets. Obasanjo articulated that the objective of the monetization policy was to instill accountability, transparency, improved service delivery, professionalism, and the broader principles of good governance within state institutions. This, he argued, would create an environment conducive to private sector-led development, thereby fostering economic growth and investment. Additionally, many government policies and reforms in Nigeria have fallen short of achieving their intended goals, primarily due to either imbalanced implementation or a complete failure to align with the underlying objectives of the policy or reform (Williams, 2019). Nigerian public servants have voiced skepticism regarding the government's sincerity in fully implementing the monetization policy to its intended conclusion. Therefore, a survey will be conducted to examine the problems and prospects of monetization policy in the Nigerian public sector.

1.2 Statement of the Problem

A well-crafted policy that is never put into practice on any government matter is far less value than the paper it is written on. Notwithstanding the apparent benefits of monetization policy, there are several obstacles to its implementation. The primary problem facing the policy is the inadequate mobilization of the necessary funds to finance the monetization of benefits and terminal pay for employees who will be let go as a result of the policy. Based on previous research, the government has not allocated up to 10% of the total funds needed for the reform program, even though an estimated N60 billion is required. The government's failure to find the money to pay public employees all of their entitlements is the reason the monetization program is crumbling. Similarly, the state governments in Nigeria were unable to recognize the significance of the policy due to a lack of funding (Adeolu,2018). Even the federal government, which has prioritized the strategy, is implementing it selectively because of the challenges in obtaining funding.Additionally,the prevalent mistrust among public employees that their jobs are in jeopardy presents another difficulty. Largely disengaged with the ongoing implementation were the drivers. Public employees perceive this driver disengagement as a preview to what lies ahead for other cadre. Employees in the public sector felt that job security was no longer guaranteed with commercialization. This anxiety is detrimental to the policy's ability to be implemented effectively.It is in the light of these that the study seeks to examine the problems and prospects of monetization policy in the Nigerian public sector.

1.3 Objectives of the Study

The main purpose of this study is to examine the problems and prospects of monetization policy in the Nigerian public sector. Specifically, the study will;

1.Assess the level at which monetization policy is implemented in the Nigerian public sector.

2. Identify key challenges affecting the implementation of the monetization policy in the Nigerian public sector.

3. Assess the prospects of monetization policy implementation in the Nigerian public sector.

1.4 Research Questions

The following questions have been prepared for the study:

What the level at which monetization policy is implemented in the Nigerian public sector?

What are the key challenges affecting the implementation of the monetization policy in the Nigerian public sector?

What the prospects of monetization policy implementation in the Nigerian public sector.

1.5 Significance of the Study

The outcomes of this research will enhance the administration of the civil service, consequently resulting in enhanced service provision and governance results in Nigeria. Additionally, the study's findings will enable civil servants to exercise autonomy and accountability in addressing their own requirements and preferences. Moreover, policymakers and governmental authorities will have the means to assess the effectiveness of the policy, allowing them to determine whether to sustain, adjust, or cease its implementation. Furthermore, other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to the problems and prospects of monetization policy in the Nigerian public sector.

1.6 Scope of the study

The scope of this study is boarded on the problems and prospects of monetization policy in the Nigerian public sector. Geographically, the study will be delimited to staff in the Nigerian public sector. 

1.7 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. 

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

1.8 Definition of Terms

Policy: A plan of action agreed or chosen by a political party, a business, etc. (Hornby, 2018)

Monetization policy: is therefore a course of action; a plan aimed at revamping the ailing economy of the country through the application of money spent on provision of incentives to public servants to the funding of social projects.

Civil servants: individuals working in government agencies and departments.