MANAGING THE RISK OF ENTERPRISE NIGERIA- WHAT JONATHAN AND BUHARI NEED TO KNOW

As the Nigerian elections draw near it is time to look beyond the election itself to governance in the next four years. A May 27^th 2013 article published by This Day Live on its website and titled "Ministerial score card towards May 29^th" examined the performance of the current government of President Goodluck Jonathan by evaluating the performance of his ministries under the ministers, who are responsible for delivering on his transformation agenda.

The writer rated the ministries using a qualitative rating scale; ranging from the best performance of 'Good' through 'Above Average', 'Average but promising', 'Average' to 'Below Average' and 'Poor'. Reproduced below in table form is the rating assessment. I have taken the liberty of assigning numerical scores to his rating scale to enable a quantitative assessment.

S/N	MINISTRY	GOOD	ABOVE AVERAGE	AVERAGE BUT PROMISING	AVERAGE	BELOW AVERAGE	POOR
	Score	6	5	4	3	2	1
1	Aviation	6
2	Defence		5
3	Interior						1
4	Finance		5
5	Transport		5
6	National Plann.				3
7	Petroleum		5
8	Power			4
9	Trade & Inv.		5
10	Environment				3
11	Culture & Tourism				3
12	FCT		5
13	Special Duties	Not Decided	Not Decided	Not Decided	Not Decided	Not Decided	Not Decided
14	Communications & Technology				3
15	Education					2
16	Justice		5
17	Niger Delta					2
18	Labour				3
19	Youth Development					2
20	Foreign Affairs		5
21	Works			4
22	Agriculture		5
23	Information		5
24	Sports			4
25	Lands & Urban				3
26	Police Affairs					2
27	Water Resources				3
28	Health				3
29	Mines & Steel					2
30	Science & Tech					2
	Total = 105	6	50	12	24	12	1

Total Score of 105

Maximum scores obtainable= 180

Scaled score =58.33%

The majority of citizens eyewitness opinions (5 out of 9 commentators as at 28^th Jan 2015) as recorded by commentators on the article on This Day's site was that the assessment was generally fair and comprehensive overall. There were a few disagreements as follows; 2 out of 9 commentators felt that Education deserved a higher score, 1 out of 9 commentators felt that Mines, steel and solid minerals deserved a higher score and 1 out of 9 commentators felt that only Aviation had done well. The general sentiment was that ministers performing below average without substantiated reasons should be dropped from the cabinet.

My questions are the following; if we accept that performance rating of the Jonathan administration was 58.33% as at May 2013, what was the target and on what basis is that measured and evaluated? Are citizens measuring government on the basis of agreed performance contracts and targets? Did the citizenry have some input in the choice of performance measures? Were quality of life indices included in the key performance measures for each ministry? What is the quality of objective setting? Is the evaluation in line with performance indices earlier set? More importantly what is the explanation for variances and MOST importantly what were the identified risk factors and what plans were put in place to manage the risk inherent in achieving our corporate objectives? As we all know, "anything that can prevent you from achieving your objectives is a risk that must be managed".

Reproduced below are the top 15 Key performance indicators as disclosed in the 2012 National Planning Commission (NPC) performance Monitoring Report

For the reason that anything that can prevent you from achieving your objectives is a risk that must be managed, I visited the website of the National Planning Commission to find out how performance and risk are measured and managed. I was particularly interested in the department of Monitoring and Evaluation to see what early warning signals they are monitoring and evaluating to determine when triggers for key Risk Indicators are being pulled.

My first discovery is that no where in the objects clause is the measurement, management, monitoring or evaluation of risk mentioned. I have reproduced the objects clause below.

"Monitoring and Evaluation

The purpose of this department is to improve the availability, quality and dissemination of government performance information for accountability and policy improvement purposes.

The functions are as follows:

Develop and maintain a framework to support the monitoring, evaluation and reporting of government performance at the national and sub-national levels, in line with the national development goals and objectives; Monitor and evaluate government performance at sectoral level (to measure performance of government policies in each sector of the economy), institutional level (to measure performance of government institutions) and program level (to evaluate the effectiveness and impact of public programs); Develop and publish the Nigeria Country Report as the primary medium for the dissemination of performance information; Develop evaluation capacities across government at the federal and state levels to ensure that the quality, results, and

impact of programs and expenditure can be measured at reasonable cost;Collaborate with MDA's to develop results-focused, key performance indicators and clearly defined performance targets upon

which progress will be measured; Develop the data management system for the National M&E system, including data collection tools, identification of data sources, frequency of data collection and data transmission plan;"

I then reviewed the most recent National Planning Commission Performance Monitoring Report available on the website being that for 2012 to see how risk was reported. To my surprise again, in no section of the report was risk management addressed. To their credit, section 4 analysed the key strategic goals and the enabling conditions identifying KPI's but without identifying potential risk events and developing KRI's for them.

Risk management is an essential tool in tackling the uncertainty associated with any enterprise. Entities be they corporate organisations or nation states have always practiced some form of risk management, implicitly or explicitly. Enterprise Nigeria must be practicing some form of risk management, but it is clearly unstructured , not systematic, not holistic, not properly linked to performance and not integrated properly across policies and across Ministries, Departments and Agencies responsible for governance.

Nigerians are known to be very good at planning but not so good at implementation. From my review and analysis it would appear that Nigeria's main problem is a failure to Manage Risk Enterprise-wide and systematically..

MY RECOMMENDATION

Whoever wins this election should improve on the progress already made and the good work already done to date. This improvement should be by incorporating into NPC's object clause the enterprise-wide management of risk for Nigeria. Nigeria should deploy an Enterprise-wide Risk Management (ERM) framework and structure complete with three lines of defence. Ministries and ministers should also inherit Key Risk Indicators (KRI's) in addition to KPI's, which their performance should be measured against. If this is done we will have better achievement of targets and risks adequately mitigated, be they political risks, macro-economic risks, security risks, environmental risks, legal risks, social risks, financial risks, or regulatory risks et cetera,will would be routinely and properly managed preventing unwelcome surprises.

Author

Ijeoma Rita Obu, FCA, FIMC is the Managing Partner of Ijeoma Rita Obu & Co. (Chartered Accountants) and the CEO of Clement Ashley Consulting. For comments questions or enquiries regarding this article please send mail to robu@clementashleyconsulting.org or post a comment on her blog riskmanagementandperformance.blogspot.com