Items filtered by date: Wednesday, 25 September 2019

There are a host of reasons why a country’s economy must be regulated. One of the main ones is to ensure that dominant firms, whether public or private, don’t abuse their market power. When it comes to state-owned enterprises, government has a further obligation – to ensure that they perform in the public interest.

Since state-owned enterprises are owned by government, one option is to hold them directly accountable to a political and administrative head. A popular alternative in recent decades has been to establish economic regulators, mandated to operate at arms-length from the government which acts as shareholder on behalf of society.

South Africa followed this trend after 1994, creating the National Energy Regulator, which regulates electricity and other energy sources. The other regulators are the National Ports Authority and the Independent Communications Authority. Proposals to expand this approach to transport and water have now been endorsed in the draft policy document recently released by the National Treasury.

However, the model has failed dramatically to achieve its objectives in both the energy and communications sectors. In our view, it has also been a wasteful use of scarce expert capacity and institutional resources. This is our conclusion based on an analysis of independent regulation as applied in South Africa.

An important example is how the energy regulator failed to assure a stable pricing path for electricity. This is it’s most basic function. And in trying to perform its function, it is now hindering the resolution of the crisis at the state-owned power utility Eskom by awarding tariffs that offset support from the Treasury – at a time when the country faces serious fiscal and energy threats.

What’s not working

South Africa’s state-owned enterprises are supposed to provide a foundation for the country’s development. Yet many are performing badly, or not at all. In some cases they are doing actual harm by, for example, draining public resources.

Existing independent regulators are supposed to:

  • set fair prices to ensure that users are not ripped off;

  • ensure that the performance of enterprises meets minimum standards, and ideally keeps improving;

  • make decisions that reflect government policy goals; and,

  • at the same time, avoid short-term or otherwise inappropriate political pressures.

There are four main reasons why South African economic regulators are failing to achieve these objectives.

First is policy incoherence. Independent regulators are supposed to protect enterprises from the short-termism, opportunism and the fickleness of politics. But they cannot do that effectively if state owned enterprises must give effect to government policy that is still in flux.

Second is a lack of government support. Regulators can never be entirely free from political influence precisely because they need supportive decisions and actions by the state. And that support often hasn’t been forthcoming.

The National Ports Regulator is a good example. The regulator wanted the Minister of Transport to separate port services from the rest of Transnet’s operations as envisaged by the relevant legislation. But that hasn’t happened because Transnet has been lobbying government to retain the revenue from the profitable port business. And government itself is disinclined to tackle the financial challenges that would arise if the Ports Regulator was allowed to do its job and reduce bloated tariffs.

Third is the issue of performance. Most state owned enterprises are performing badly but in many sectors the primary challenge is poor performance at municipal level that results from weak governance. Whether in the local supply of electricity, water, or sanitation services, municipal failure can either compound the failure of state enterprises, or diminish any benefits they might bring.

In such instances, national-level economic regulation will have limited impact if service delivery mechanisms fail. Fiddling with pricing decisions is of little significance to citizens and firms that don’t have reliable access to water, electricity or transport services.

Part of the problem is that independent regulation was often promoted as a pathway to privatisation. But that has not happened. And in many instances the case for privatisation has not been convincing, meaning that it might just replace public dysfunction with notional accountability mechanisms for private dysfunction with little accountability. If privatisation is not the way forward, at least for now, these entities should be managed differently with a focus on public performance.

Technical capacity

The final practical consideration is that independent regulation needs substantial technical capacity. There are various parts to this.

  • The regulator must have the staff who can evaluate enterprises, challenge them where appropriate but not intervene unnecessarily.

  • The regulated enterprise must employ people to engage with their regulator.

  • Government must have the capacity to set up and support the regulator. If more than one department is involved, all must have appropriate capacity.

  • Policy makers must provide clear policy expectations and resolve uncertainty quickly.

Ideally, other parts of society also need to be able to engage with regulatory issues. Civil society needs to have a voice as do companies that use the services of the state-owned enterprise. And courts need to be capable of dealing with these specialised issues.

Alternatives

The question then is whether further proliferation of regulatory capacity is possible, or even desirable.

We believe the answer is no. And argue that there is a radical, but simple, alternative.

It’s a given that political decision-making will guide the oversight of state enterprises – that’s because the government wants to use them to promote broader development policy. This means that the focus should be on building government’s capacity to guide the process. That way, political heads will be clearly accountable and failures cannot be blamed on other parties.

The water sector has been cited as one where a new regulator might be introduced. But it actually serves as a case study of how public entities can deliver well without an independent regulator. Bulk water prices are set by the national government department, using criteria legislated 20 years ago. The department calculates the tariffs and consults with major stakeholders. These include municipalities, big users such as Eskom and Sasol as well as organised agriculture. Price increases greater than inflation have to be justified.

Unlike the electricity case, this system has worked reasonably well and tariffs have increased smoothly and predictably. User participation keeps government honest in its calculations.

That’s not to say that the water department doesn’t have challenges. But a 2012 study found little evidence that a formal independent regulator could contribute greatly to fixing these.

Some organisations still argue that a regulator would reduce mismanagement. But this ignores the lessons of experience and is based on a superficial notion of democratic accountability.

By contrast, in energy a former regulator and sector expert acknowledged that the regulatory agency’s price setting had produced huge fluctuations in the tariff which caused uncertainty. Yet, Treasury inexplicably wants to replace a relatively successful model (in water) with a failed one (in energy).

The way forward

We believe that ending dependence on failed independent regulators will ensure that there’s much more direct accountability. It will also lead to a focused effort to improve governance in both government departments as well as state-owned enterprises. And limited capacity can be integrated from disparate departments, entities and regulators.

There is no getting round the fact that tough action needs to be taken, and soon. If government doesn’t get oversight of public enterprises right, a different form of “regulation” will be imposed on the country by international financial institutions and other lenders. But their focus will be on what’s needed to ensure debt repayment, not the broader national interest.The Conversation

 

Seán Mfundza Muller, Senior Lecturer in Economics and Research Associate at the Public and Environmental Economics Research Centre (PEERC), University of Johannesburg and Mike Muller, Visiting Adjunct Professor, University of the Witwatersrand

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Opinion & Analysis
Wednesday, 25 September 2019 09:27

Google celebrates Nigerian food culture

Google is celebrating Nigerian food culture with the world through its project ‘Come Chop Bellefull: A Taste of Nigeria.
 
The project was launched in collaboration with the Centenary Project on Tuesday at the Pan-Atlantic University (PAU), Lagos.
 
The Centenary Project had since its inception in 2014 focused on digitally capturing and showcasing the cultural and historical expressions of the Nigerian nation.
 
Google Spokesman for West Africa, Taiwo Kola-Ogunlade, said Nigeria demonstrated a unique ability to combine culinary innovation with cultural knowledge through food.
 
“If you live in Nigeria or visit Nigeria regularly, then you will understand that Nigerians do not mess around when it comes to food.
 
“Regardless of where you’re from, you will have a favourite dish that drives an eagerness to find and taste more.
 
“In recognition of this, Google Arts and Culture has paid tribute to Nigeria’s vibrant and diverse food culture with the “Come Chop Bellefull: A Taste of Nigeria’’ project,” Kola-Ogunlade said.
 
He said that the project was a way to inform and educate the world about the wealth of creativity and human resources the country had.
 
The Google spokesman said that the project was opening the doors to foodies and lovers of culture from across the globe and helping them experience Nigerian cooking culture for themselves.
 
“A Taste of Nigeria” boasts 2,000 high-resolution images and 30 stories that represent iconic local dishes and unforgettable flavours for which Nigeria is known.
 
“A few of the local cuisine recipes showcased on the Taste of Nigeria site include Jollof Rice which is must in order to be truly Nigerian.
 
Another Nigerian meal that is undeniably sought after across all geographical regions is made from raw groundnuts and rice, Kunun Gyada. It is a light porridge that can be enjoyed alone or accompanied with kosai (bean cake), masa (rice cake) or fried meat,” he said.
 
He said that soups form a staple part of any Nigerian diet, adding that the starch and Banga Soup from the Niger-Delta region of Nigeria is made by extracting the juice from the seeds of raw palm kernel fruit.
 
“Interestingly, the Efik/Ibibios call it Abak Atama and the Yoruba’s call theirs Obe Eyin Ikpogiri.
 
“Banga is best served with catfish and fresh fish and is a meal that is seen as fit for kings, no matter where it is being served.
 
“Snack lovers would want to order one of Nigeria’s favourite deep-fried snacks, akara, which is a popular breakfast meal made with brown or black-eyed beans and spices, it is just one of many snack type meals available.
 
“Suya is probably the most popular street food in Nigeria, sold on street corners almost everywhere in Lagos and elsewhere.
 
“It is skewered meat that is roasted and served with spices, which gives it a unique aroma and taste,” he said.
 
According to him, visitors would be hard-pressed to find a reason to shut their browsers once they start exploring Come Chop Bellefull: A Taste of Nigeria.
 
Published in Business
President Muhammadu Buhari of Nigeria on Tuesday in New York alerted World Leaders on attempts by international criminal groups to cheat Nigeria of billions.
 
The president raised the alarm while presenting the country’s National Statement as the fifth speaker on the first day of the General Debate during the 74th Session of the UN General Assembly (UNGA74).
 
According to him, the present Nigerian government is facing the challenges of corruption head-on.
 
He said: “We are giving notice to international criminal groups by the vigorous prosecution of the P&ID scam attempting to cheat Nigeria of billions of dollars.”
 
While holding social media outlets responsible for fuelling major crimes such as mass killings, Buhari called on major tech companies to be alive to their responsibilities.
 
“They cannot be allowed to continue to facilitate the spread of religious, racist, xenophobic and false messages capable of inciting whole communities against each other, leading to loss of many lives.
 
“This could tear some countries apart,” he said.
 
He also declared that, “no threat is more potent than poverty and exclusion,” noting that, “they are the foul source from which common criminality, insurgency, cross-border crimes, human trafficking and its terrible consequences draw their inspiration.”
 
The Nigerian leader described poverty “as one of the greatest challenges facing our world.”
 
Buhari noted that, “its eradication is an indispensable requirement for achieving sustainable development,” while highlighting his administration’s efforts to overcome the challenge.
 
On the 2019 presidential elections, he said “our people backed the politics of tolerance, inclusion and community over the politics of protest and division.”
 
The President in his mission statement which was made available to newsmen in Abuja, reaffirmed Nigeria’s position on certain issues which impinge on global peace, security, progress, democracy and development.
Published in World
The Democrat dominated US House of Representatives appears set to launch a formal impeachment probe of President Donald Trump.
 
Reports indicated that Speaker Nancy Pelosi (D-Calif.) will announce later Tuesday that she supports the inquiry.
 
The move comes amid mounting pressure from House Democrats to take a stand against Trump’s alleged political pressure on Ukraine to investigate former Vice President Joe Biden’s son, Hunter Biden, during a July phone call with Ukrainian President Volodymyr Zelensky.
 
Trump who had earlier dismissed the furore over his unreleased whistleblower report on his phone conversation with Zelensky tweeted today that he has authorized the release.
 
Trump said he has directed the release on Wednesday of the “unredacted” transcript of his July phone call with Ukrainian President Volodymyr Zelenskiy.
 
The announcement comes as Democrats lined up in ever greater numbers Tuesday urging an impeachment probe of President Donald Trump, pushed to action by his phone call with Ukraine’s new leader and what Trump may or may not have said about corruption, frozen U.S. millions and Democratic rival Joe Biden.
House Speaker Nancy Pelosi is expected to speak on an impeachment inquiry later this afternoon.
Published in World

It’s fairly clear that the tectonic plates of the British constitution are shifting. After a grating and grinding battle between the legislature and the constitution, the main friction point moved to the judicial sphere.

And the UK Supreme Court has ruled that the process by which prime minister prorogued parliament for five weeks in the run-up the October 31 date when Brexit is now due was not lawful. What happens now in terms of process is unclear but what appears to have been almost completely overlooked in the generally turgid and jargon-rich commentaries that have surrounded the case is that the result is unlikely to matter.

In fact, despite losing this specific trial of strength, Johnson may still come out the winner.

The goal of the teams taking on the government in court was to stop executive overreach. They argued that the government had devised a lengthy prorogation to limit the time available for parliament to hold the government to account over Brexit ahead of the October 31 deadline. The government insisted that the break was needed to organise a new parliamentary session. The courts have decided this was not the case.

But judicial bravery in highly contested constitutional waters may have the unintended consequence of delivering a major “Boris boost” in terms of public support. Whether through serendipity or strategy (probably the former) the prime minister has created a win-win situation that nobody seems to have noticed.

The Supreme Court upheld campaigner Gina Miller’s appeal and overturned a ruling by the English High Court that suspending parliament was “not a matter” for the judiciary.

In so doing, the court is, in effect, siding with the highest court in Scotland, which ruled earlier this month that the prorogation of parliament was unlawful as “it had the purpose of stymieing parliament”.

This decision is certain to spark the political equivalent of a volcanic eruption with claims and counter-claims of judicial activism and political incompetence. Academics will undoubtedly scuttle off to the library in an attempt to somehow reconcile the Supreme Court’s decision with legal scholar J. A. G. Griffith’s classic account of “the political constitution” in the United Kingdom (Modern Law Review, 1979 and still well worth reading).

In reality, such matters are relatively simple. The court’s decision is constitutionally legitimate on the basis that it was upholding the basic tenet of parliamentary sovereignty. Far from undermining the political constitution, the Supreme Court would from this position be protecting it, while retaining a politically subservient position.

But what no one seems to have considered is that Johnson is an explicitly populist politician. He will live to whiff-whaff another day. His whole approach to gaining the keys to No.10 has revolved around constantly responding to – and to some extent amplifying – the populist signal, not least over Brexit. In this context, a Supreme Court defeat risks simply playing into Johnson’s gameplan. It will not stop Brexit. But for Johnson and, especially for his shady apparatchiks, it will be yet another example of “them” (that is, the elite, the experts, the untouchables that wield power without responsibility) against “us” (the Great British public).

The rules of political engagement have already been altered almost beyond recognition, and Johnson’s entire brand is based on being an unconventional politician.

The great risk of the Supreme Court ruling is that it will add fuel to a populist fire that is already raging about the need for a strong leader. Indeed, one of the few similarities between all the different manifestations of populism that have emerged around the world over the past decade is the existence of a charismatic and strong leader who can mobilise the masses and manipulate how dominant issues are framed. In the UK it is Johnson who seems to be staking the greatest claim to this role – and his popularity amongst Conservative Party members provides a powerful platform.

Britain’s threadbare constitutional framework makes it particularly vulnerable to the wrath of a strong leader. Where other countries have adopted a codified constitution, clear rules of engagement and an explicit role for the courts in curbing executive power, the British constitution operates through what the eminent constitutional historian Peter Hennessy has called “the good chaps theory of government”, which presumes that all politicians will exercise a high degree of self-restraint, respecting the unwritten rules of the constitution.

What’s worrying is that the words “Boris Johnson” and “self restraint” have rarely – if ever – been used in the same sentence. He is not a man to play by the rules and the power of populism appears far too tempting. This is reflected in his refusal to rule out simply suspending parliament again. This tendency to pander to populism is exactly why a judicial loss risks boosting rather than wounding the prime minister.The Conversation

 

Matthew Flinders, Founding Director of the Sir Bernard Crick Centre for the Public Understanding of Politics, University of Sheffield

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in World
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