By Dr Joe Abah.
Ministry mergers are prevalent in the public sector. Ministries are not set up by law and can be reconfigured at will by the president. Even then, the merger of ministries is often done haphazardly. The announcements are made before any deep thought is given to how to operationalise them. When two ministries are often merged, the permanent secretaries remain, and each retains a set of directors, deputy directors, and other civil servants.
For instance, when the Ministry of Power was merged with the Ministry of Works and Housing, there was a Permanent Secretary for Power and a Permanent Secretary for Works and Housing. As the permanent secretary is the ‘Accounting Officer’ of the ministry and the chief adviser to the minister, it was unclear which of the two permanent secretaries had ultimate authority over budgets, expenditure and staffing.
Conversely, there was initially a Minister of Transport and a Minister of Aviation (Transport) within the same ministry before the Ministry of Aviation was eventually made a standalone ministry during President Muhammadu Buhari’s second term. At the time, it was argued that, unlike others, the Minister of Aviation (Transport) was never announced as a Minister of State and was, therefore, a full-fledged minister. Both ministers were served by the same permanent secretary who described his situation at the time as that of a woman who had two husbands who did not necessarily get on with each other.
However, with the merger of ministries, governments tend to muddle through until the subsequent reconfiguration. The civil servants remain, and there is no talk of job losses. The Federal Executive Council often needs to clarify and approve mandates formally, and people act more on instinct than with clearly redefined mandates. Save for changes in stationery and websites; there have been only a few changes.
On the other hand, the merger of agencies is rare, mainly as most agencies are set up by enabling legislative acts. To merge them, you must repeal the laws of the agencies you are merging and enact a new law. In some cases, there may even be a need for a constitutional amendment, which is a much more complex undertaking. Mergers are more common in the private sector, and there needs to be more guidance on merging public sector parastatals, agencies and commissions. To address this gap, the BPSR under my leadership published two guides: ‘How to Merge and Wind Down Agencies and Parastatals’, published in May 2014, and ‘Guiding Principles for Merging and Restructuring Ministries, Departments and Agencies’5, published in October 2015. This policy note will draw from these two guides without getting into the weeds of what is a pretty complicated and technical process.
Governance Arrangements for the Mergers.
Mergers are complex restructuring processes that require time, expertise and planning. Although the government has announced a 10-member implementation committee for this initiative, that body can only look at things superficially. If any progress is to be made in the 12 weeks that the committee has been allotted for its assignment, it will be essential to establish a merger committee for each agency to be merged. That merger committee will develop a plan for the merger with a realistic timeframe and budget for implementation. It will be able to get into the required details and then report to the 10-member committee for policy decisions. One of the things that the 10-member committee must guide on is what the purpose of the merger is. Is it to improve service delivery, raise productivity, or cut costs? If it is to cut costs, what costs will it cut? As the Minister of Information announced, is it feasible that there will be no job losses?
Mergers cost money, and there is a need to develop a budget and ensure the release of funds. For instance, it was announced that the National Agency for Science and Engineering Infrastructure (NASENI), located in Abuja, is to be merged with the National Centre for Agricultural Mechanisation (NCAM), located in Ilorin, Kwara State, and the Projects Development Institute (PRODA), located in Enugu. How does one even begin to take an independent inventory of assets or a confirmation of staffing numbers without an allowance for travel between the three organisations? It is still being determined whether budgetary provisions were made for this limited implementation of the Oronsaye Report. If no fiscal provision was made, it may be necessary to seek a virement to repurpose the 2024 budget of each agency to be merged or to submit a supplementary budget. Alternatively, it is possible to approach donors.
Audit of Assets.
It is essential to immediately carry out an independent inventory of assets in each agency to be merged. Without this, there is a real risk of significant asset flight. Even if each agency is asked to produce a list of assets (buildings, vehicles, computers, bank balances, etc.) and liabilities independently, it would need to be independently verified. Otherwise, there is a genuine possibility that an entire building or several luxury vehicles would disappear. It is unlikely that the 10-member committee will be able to conduct this audit by itself. It may have to commission a set of public servants (say, from the Office of the Auditor General for the Federation) or engage external accounting firms. Either way, it will cost money and take some time.
Staff Audits.
Similar to an audit of assets, it is essential to carry out a staff audit in each agency to be merged. Not all agencies are part of the Integrated Payroll and Personnel Information System (IPPIS), which pays salaries. There is a need to ensure that personnel figures are not inflated and that people drawing salaries exist. Apart from permanent employees, some agencies have hundreds of contract staff and interns who must be added to IPPIS. It would be prudent to understand the actual staffing position of each agency to inform decision-making. Undertaking the staff and management audits will take time and cost money.
Revision of Mandates, Management Arrangements and Organisational Structures.
The mandates of all agencies to be merged need to be reviewed and a consolidated mandate developed for the new agency that will emerge from the merger. The management arrangements must also be examined, appropriate human resource levels must be established, and a fit-for-purpose organisational structure must be developed.
Staff Utilisation.
When organisations are to be merged, there is a need to consider how to handle duplications in functions and what to do with excess personnel. We use the proposed merger of NASENI, NCAM and PRODA as an example. In that case, you will have three agency Chief Executives, three Directors of Finance, three Directors of Human Resources and possibly hundreds of people performing similar roles. With the announcement by the Minister of Information that nobody will lose their jobs as a result of the mergers, how will this situation be managed? NASENI alone has 11 development institutes, each headed by a Managing Director who reports to an Executive Vice Chairman.
The most significant expense of any organisation is its personnel costs, accounting for up to 70% of total costs.6 If the purpose of the mergers is to cut costs, retaining all the staff will ensure that the effort will be an exercise in futility. It is essential to consider relieving some of the chief executives of their jobs. It is possible to organise a competition for people in directorate roles so that the best Director of Finance (for instance) from the agencies to be merged emerges as the Director of Finance for the new entity that will emerge from the merger.
For other staff, it would be necessary to carry out a skills inventory of each staff to see where they could be deployed within the merged entity or whether they have skills that could be helpful in the rest of the public service. Again, this will take a little while and needs to be carefully managed.
Those who were unsuccessful in any competition, whose skills do not match the mandate of the new organisation, and for whom there are no suitable vacancies in the rest of the public service can be given enhanced packages to go. If no budgetary provision was made, it may be possible to approach some development partners for support or propose a supplementary budget. This will take time and effort. Job losses are an emotive issue. The trade unions will pay close attention to what is done and how. Members of the National Assembly, whose constituencies are located in the agencies, will be very nervous and probably have sympathy from their colleagues.
New Legislations.
Merging two or more organisations set up by law into one will require repealing existing acts and putting in place a new establishment act. In developing the new legislation, it will be essential to ensure that it is aligned with the ambitions of the government and the public now and in the future. For instance, the organisation that emerged from the merger of NASENI, NCAM, and PRODA could focus on innovations that promote green energy for homes and irrigated farms. The process of repeal and enactment will go through the normal legislative process, including first and second readings, committee work, public hearings, passage and harmonisation by the two chambers of the National Assembly, and assent by the president. This will take some time.
Post Merger Implementation Tasks.
We have dwelt more extensively on the pre-implementation tasks because they are the most important and complex but are the ones that are most often ignored. Many other tasks are worth mentioning, but these can happen as the merger is done or even when completed. For instance, there is a need to look at systems, processes, IT and records integration, staff integration, salary integration (which may undermine the desire to cut costs if the merged entities have different salary structures), integration of organisational cultures, management of stakeholders, knowledge management and public communication.
Subsummations, Relocations and Scrapping.
It was announced that some agencies were to be subsumed under other agencies while others were relocated to new ministries and that several agencies would be scrapped. For agencies to be subsumed, most of the pre-and post-implementation tasks set out previously will similarly apply:
Audit of assets.
Staff audits.
Revisions of mandates, management arrangements and organisational structures.
Considerations on staff utilisation.
Legislation may also need to be amended, particularly around governance arrangements. For instance, NASENI and PRODA are agencies of the Federal Ministry of Science, Technology and Innovation, while NCAM is under the Federal Ministry of Agriculture and Rural Development. Whatever power is given to the supervising minister in the existing establishment acts must be transferred to the supervising minister to be named in the new establishment act.
Agencies slated for scrapping will need to have their establishment acts repealed, and arrangements will need to be made for dealing with their assets, liabilities, and personnel.
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