Human Capital Development and Deployment Trilemma in the Governance of the Oil and Gas Sector in Nigeria: Implications on the Efficacy of PIA 2021

Prof. Iledare

-By Omowunmi Iledare, PhD (GNPC Professor & Chair in Petroleum Economics)


In one of my op-ed articles, I discussed four quadrilemma dimensions in the oil and gas sector in Nigeria emphasizing the fact that effectiveness, efficiency, equity and ethics are non-mutually exclusive.  The object of the article insinuate that the PIA 2021 has provisions to address these quadrilemma issues. I entreated political decision makers in Africa and Nigeria, in particular, to be attentive to Energy Transition Trilemma, namely energy security, accessibility, and sustainability as they walk the green energy talk carefully.  I underscored the fact that the applications of available energy services depend on affordability to sustain the quality of life of humanity in a sustainable manner.

The op-ed in this edition centers on the development and deployment of human resources for the efficacy of PIA 2021. With the benefit of hindsight, something went wrong somewhere along the journey so far in the Nigeria Oil and Gas Sector.  In the aftermath that oil became the engine that propels the national economy and central planning became the political modus operandi of the nation, and the governance and administration of the oil and gas industry was not insulated from rent sharing and rent seeking mentality. Thus, managing oil and gas in the era of decarbonization and renewable energy transition would require a departure from the current trend in the way human capital is developed and deployed in Nigeria.

I hasten, based on my experience, that human capital development and deployment have been impaired by the trilemma of monocracy, prebendalism, and exclusivity in the more recent two decades, in my opinion, than the first three decades of petroleum economy in Nigeria. Further, I have also argued in my several commentaries over the years, that to the extent imaginable, Nigeria does not necessarily lack human resources per se but, perhaps, it might be underprovided in resourcefulness because of human capital development and deployment trilemma, more so in the more recent decades of petroleum production economy, apart from the natural workforce aging process phenomenon.


The word trilemma as being used in this op-ed simply means, three disagreeable comportments each of which, if not censored, has unpleasant consequences. Thus, I have characterized the HCDD trilemma dimensions as monocracy, prebendalism, and exclusiveness. It is plausible to argue that it took more than two decades to complete the restructuring and reform of the oil and gas sector in Nigeria.  Perhaps the process took that long too, because of the HCDD trilemma dimensions. It would be imprudent, therefore, to not keep an eye on these dimensions of HCDD trilemma as they will more likely than not have significant impact on the efficacy of PIA 2021 implementations.

Monocracy Dimension of HCDD — Managing the future of oil and gas in Nigeria in accordance with PIA 2021 provisions, demands appropriate human capital development and deployment. A monocracy, a transactional leadership attitude, with no shared vision in the deployment and development of manpower is worrisome. Yes, a monocracy may seem fitting under an emergency situation for quick decisions, assuming that the monocratic leader is all knowing, which usually is not the case, and we are all witnesses, in the last two decades. Such leadership style is hierarchical in structure to the extent that whatever the team lead wants done is done, irrespective of the consequences.  The idea of first among equals is foreign to an autocratic leader and everything good is attributed to the team lead. That leadership style is authoritarian rather than being authoritative and seem to me to be inappropriate looking at the conceptual framework espoused in PIA 2021.

I am not sure if this is cultural, but monocracy or an appearance of it has glaring impediments to the development and deployment of manpower in most institutions in Nigeria.  For me and as far as managing the future of oil and gas in Nigeria is concerned, monocracy or any appearance of monocracy is not the way to go in the three institutions enacted in PIA 2021. Experience shows such leadership style is ineffective because it is premise on the misconception that leadership is a position rather than an action. The monocracy dimension of the HCDD Trilemma presupposes that the leader with autocratic leadership style and attitude is competent and knowledgeable enough to decide each and everything thing. Unfortunate, a monocratic leader may not necessarily know everything or be fully competent, especially when such leadership, more often than not, emerges through prebendalism, under the disguised of geopolitics of federal character convenience. Subsequently making monocracy leadership style ineffective with respect to human capital development, which then breeds mediocrity in the workforce.

The explanations of why monocracy is ineffective are not farfetched.  First, it is purely transactional in attitude and secondly, creativity is usually not recognized in the performance appraisal process nor rewarded. Thus, institutional performance indicators are mostly set to support the self-worth of the leadership, who can single handedly decides who to recruit, develop, and deploy along the ladder on the basis of reward rather than service. Monocratic leaders are authoritarian (reproof of individual is the first reaction at any point in time) not authoritative (idealized influence and inspirational motivation of individuals). Monocracy leadership commands does not know how to cherish nor reward creativity nor seek input to do things right and in the right way.  Monocratic leadership cannot be effective because usually, such leadership attitude lacks the capacity to translate vision to reality, neither can it unlock the potentials in others because it has purely the mindset of a transactional leadership. It is a do as I command leadership approach with a promise of reward for obedience. It is not a leadership, of what you think should be done with an open mind. For the record, I have written this op-ed mostly from the point of view of what ought to be, the starting idealistic position for leadership improvement in Nigeria and anywhere else and to encourage a change from existing leadership style that is transactional.  Monocracy leadership style will not deliver the desire of PIA 2021 to create governing institutions that do the right things and do things right in the oil and gas sector in Nigeria. Folks entrusted with the implementation of PIA 2021 to manage the future oil and gas sector must bind this fact to their hearts.

The leadership style that PIA 2021 envisioned is transformational through and through and I can say this for a fact. It is a leadership style that encourages creativity, inspires innovation, and the right to independent thinking.  It is based on a collective critical thinking process, as well, to proffer solutions to problems based on knowledge and meritocracy.  I saw it firsthand during the dialogue that created the PIGB 2018.  While not averse to diversity, the transformational leadership style demanded for the PIA institutions recognizes that the leader still has the final say but enables each member of the management team to challenge, without fear or favor, the decision process.  According to Eleanor Roosevelt, ‘a good leader inspires people to have confidence in the leader. A great leader inspires people to have confidence in themselves.”

Prebendalism Dimension of HCDD – I have spoken a lot on prebendalism in a general sense. It is a word I used in conversation with my peers to describe what is observable in the political economy of Nigeria.  In fact, some of my peers and junior colleagues have challenged me that there is no word like that, and I have had to direct them online.  I did not invent the word and in fact, an online visit may make one feel as if Nigeria and prebendalism are complementary words. Well, it must not be surprising then to those who know me well enough that I have considered prebendalism as a component of HCDD.  Unfortunately, we do not, perhaps, again because of the culture discuss issues of paramount importance without making it a “black and white.” Meaning politics, religion, and tribe.  But prebendalism is real in Nigeria for sure and it is not new but its effects on manpower development and deployment has become more glaring in the last two decades than ever before in the history of Nigeria.  By the way, and I am not talking about the ordinariness of tribalism or culturalism in this Op-Ed.  So, for the purpose of this Op-Ed, prebendalism represents the cornering of opportunities, be it political power, resources or wealth for a defined constituency, mostly, by leaders with autocratic or transactional leadership mentality.

On the other hand, transformational leadership disavows prebendalism in manpower development and deployment and looks critically at egotism, one of key traits of transaction leadership as harmful to institutional effectiveness at adding or creating sustainable economic values to the society. Interestingly, one feature of a transformational leader is the absence of prebendalism among other key traits such as honesty, integrity, competence, diligence, among others. Disavowing prebendalism enhances the capability to inspire shared vison to the extent that human capital development and deployment do not reward mediocrity because of elitism under such leadership scheme.

Look around and take time to examine manpower development and deployment to what we called the juicy sectors of the political economy in Nigeria.  It is very much skewed in distribution, to the extent that the MDAs with significant access to public or private petroleum revenues hardly advertised job openings and yet positions are filled quickly with the assumptions that the available are the desirables. Ironically too, the salary structures of these juicy sectors are significantly attractive, making it even more difficult for the Universities to retain first class recipients in the University environment to train the trainer for posterity. Unfortunately, too, even recruitment to Universities has been overrun by prebendalism, which is not necessarily tribalism.  Universities are now local rather than being universal.  In fact, they are not even regional.

Just cast your mind back to the furor displayed recently on the appointments of Vice Chancellors of two Federal Universities in Ile Ife and Ibadan. Thus, the prebendalism dimension of HCDD creates a significant danger, in my opinion, for PIA implementation effectiveness.  If prebendalism sneaks into the process of manpower development and deployment, then the noble objectives of PIA 2021 may more likely than not be at risk.  Again, this is my opinion and if I am wrong discard the opinion, but if I am correct, kindly adjust the process and do the manpower development and deployment process in accordance with the PIA objective to promote transparency, good governance and accountability. My recommendation continues to be to put right pegs in the right holes and this is impossible with a prebendalistic approach.  In the long run, prebendalism breeds the exclusion of many from the manpower pool and renders in the fostering of a business environment that is conducive for petroleum operations a dream, rather than reality.

Exclusiveness Dimension of HCDD — The leadership mindset that abhors prebendalism is transformational and it will take courage, more so in an authoritarian system, which makes entrance to the juicy oil and gas sector an exclusive club for “ajebota” kids (Kids that grew up with butter and bread).  It seems extremely quite difficult to have a brilliant “ajepaki” kid (kid growing up in the current Nigeria without access to butter and bread), in the system and I stand corrected if I am wrong.  I grew up poor but prebendalism did not shut me out. In my days there was nothing like prebendalism that would have precluded me from getting offers of employment from four companies. Allow me to infer from my experience that prebendalism is destructive. It kills morale and promotes discontentment.  It has no place in the implementation of PIA 2021, if PIA is to effectively deliver the aims and specific objectives, as expected. Do I have evidence to suggest exclusivity in manpower development and deployment? of course, I do. Permit me not to spill the beans. However, check who gets the contracts to build capacity in the MDAs? Guess who gets selected from juicy sectors to go for overseas staff training and development and who get selected to go for local training? Managing the oil and gas sector for posterity demands inclusion and only transformational leadership structure can deliver such demands.  It is doable and must be done for posterity.


Concluding Remarks and Observation

The oil and gas sector is the largest and most important industries in Nigeria and this may be the case for a long time. That the petroleum sector is the engine that drives the Nigeria economy is not conjectural, either. The sector is vertical in scope and horizontal in dimensions with significant strategic, financial, and management implications to the sustainability of the economy of Nigeria for the nearest future, perhaps beyond 2050, but time will tell.

The PIA 2021 offers to investors in terms of rewards that are commensurate with the challenges and risks that come with finding, developing and utilizing petroleum resources. Thus, the new government MDAs enacted by PIA, must rationalize spending significant amount of money, annually, on best available technology and human resources to foster a business environment conducive to petroleum operations in Nigeria. The importance of human resources with proper skillsets in an organization cannot be overemphasized, making continuing education of professionals is imperative. Hence, human capital development through professional training and staff development sharpens competencies, enhances productivity, and balances rewards adequately and accordingly with risk management.  However, the type of leadership styles and frameworks for manpower development and deployment to effectively manage the PIA envisaged for Nigeria oil and gas sector in the future has to be transformational. Meaning that prebendalism, elite capture, and transactional leadership scheme had to be expunged from the system if PIA objectives were to meet expectations.

The oil and gas reform and restructuring in Nigeria took too long to fail, perhaps, because of the HCDD trilemma. Hence, the PIA institutions legislated for efficient and effective industry governance must have leadership attitudes and frameworks based on intelligentsia knowledge of the business and not sentimentality. It must motivate individual to engage in critical thinking to discourage mediocrity or laissez-faire (do-as-you-please) attitude. Leadership that is willing to process diversity of ideas with institutional enrichment priced above self-interests would matter a lot to effectively manage the oil and gas future in Nigeria.  Such leadership conceptualization is a winner because it makes posterity and sustainable economic development of Nigeria a priority above rent seeking, rent sharing and individual prosperity.

As a matter of fact, for PWI, prosperity without posterity is inconsequential. Correspondingly, any evidence of maladministration in human capital development and deployment because of prebendalism, transactional leadership (monocracy), and elite capture (exclusiveness) is objectionable. The suitability of PIA 2021 to foster competitive business environment for petroleum investments and operations in the renewable energy transition era will depend on efficient and effective manpower development and deployment in the oil and gas governance institutions created by the Act.

Source: The ValueChain



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