NIM Journal Dec2013

PAGE 24

THE PERSPECTIVE OF POWER

GENERATION AND NATIONAL DEVELOPMENT

VISION 20:2020:

A Journal published

by the Nigerian Institute

of Management (Chartered)

Volume 49: Numbers 3 & 4

JULY - DECEMBER, 2013

THE IMPACT OF THE ENVIRONMENT ON THE

MANAGEMENT OF HUMAN CAPITAL

PAGE 42

MANAGING CHAOS AS DEVELOPMENT

TOWARDS THE APPLICATION OF OPERATIONS

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Members

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Mr. M.O. Lakanu, FNIM

Engr. M.K. Sulaiman, FNIM

Mr. Sola Obadimu, MNIM

3 Management in Nigeria

PAGE 20

PAGE 24

PAGE 36

VOLUME 49 : Numbers 3 & 4 JULY - DECEMBER 2013

VISION 20:2020:


THE IMPACT OF THE ENVIRONMENT

ON THE MANAGEMENT OF HUMAN CAPITAL

RAW MATERIAL MANAGEMENT IN

MANUFACTURING ORGANIZATIONS

TOWARDS THE APPLICATION OF OPERATIONS

RESEARCH IN MANAGERIAL DECISION MAKING



PAGE 42

From the Editor

One of the major key indices for determining the

overall development of any nation is its

electricity generation and consumption. All

other facets, namely infrastructural, social, economic and

industrial developments are linked to the availability and

utilization of reliable electric power. Nigeria's electricity

demand has continued to increase over

t h e y e a r s . H o w e v e r, t h e p o o r

performance recorded in the power

sector has not only stalled the nation's

development but also impoverished its

citizens. Also, the increasing population

that is not balanced by adequate energy

development programme has become a

major challenge.

It is a well known phenomenon that the

electricity market in Nigeria is facing

myriads of challenges ranging from slow

growth in generation capacity, slow

i m p l e m e n t a t i o n o f t h e m a r ke t

deregulation process, interference by

G o v e r n m e n t , p o w e r l i n e s a n d

equipment vandalization, poor maintenance of existing

facilities and corruption. In an effort to address this state of

affairs, the federal government embarked on an extensive

power reform programmes aimed at ensuring modest but

genuinely realisable improvements in the amount and

quality of electricity supplied to consumers all over the

country. To this end, a realistic, properly considered and

sustainable plan for service delivery in the short and

medium term were outlined. This included the unbundling

of the operations of the Power Holding Company of

Nigeria (PHCN).

Consequently, In 2013, the federal government decided to

hand over the operations of the Power Holding Company

of Nigeria (PHCN) to private operators nationwide. The

citizenry felt that a wind of relief had come their way as this

was seen as the final solution to curb incessant power

supply to millions of household and business concerns as

well as a means to boost the economy, especially through

small and medium scale enterprises (SMEs). But the

reverse seems to be the case on ground as major cities and

businesses still groan under epileptic power supply. A

nat ionwide assessment on the

performance of the new owners shows

that more still need to be done by these

business outfits to satisfy the yearnings

of Nigerians. One of the reasons given

for this is that the private companies

are not generating power, rather, they

a re s imply engaged in power

distribution; and the power they

distribute is the power that is

generated by the government.

Secondly, many of those involved in

the electricity distribution do not have

experience about power. They are

strictly businessmen looking for new

areas of business. You can understand

why we are having the problem for

now; because they are in the area that is supposedly not

their own.

It is obvious that the Federal Government of Nigeria would

not be able to fund such enormous investments in view of

the huge capital expenditures involved in the project.

Hence, it requires involvement of investments from the

private sector. The government therefore needs to provide

the incentives and enabling environment for the private

investors to fully participate in generating the target

40,000 mega watts by the year 2020.

Achieving 40,000 mega watts by the year 2020.


OCTOBER - DECEMBER , 2012

A Journal publishedby the Nigerian Institute

of Management (Chartered)

Volume 48: Number 4PAGE 12

EDUCATION AS A TOOL FOR

NATIONAL REORIENTATION,

DEVELOPMENT AND INTEGRATION



Power is critical to economic growth and development. Adequate provision of power is essential for national

development as it has a great influence on socio- economic activities as well as the living standards of citizens.

Introduction

By Professor Rahamon A. Bello, FAEng

University of Lagos, Nigeria.



VISION 20:2020:

VISION 20:2020: THE PERSPECTIVE OF POWER GENERATION AND NATIONAL DEVELOPMENT


Vision 20:2020 recognized that for the Nigerian

economy to become one of the top twenty in the

world, it has to generate and make available to its

citizenry adequate power for economic and social

purposes. The desire of Vision 20:2020 was and is to

increase the power production to meet the demand

progressively; utilizing all forms of available energy

resources in the country.

Most of the power sector infrastructural facilities in

Nigeria were built in the 1970s and 1980s. Due to lack of

maintenance and adequate expansion of the facilities,

the country has had to live with epileptic and limited

availability of electricity supply. In spite of the abundant

energy resources in the country and significant

Government investments in the sector over the last ten

years, electricity supply remains a serious challenge to

Nigeria's socio-economic development.

Currently, less than 50% of the Nigeria's total

population has access to the national grid due to

inadequate transmission and distribution networks.

Also ageing and poorly maintained infrastructure, weak

ion and radial network configuration and overloaded

transformers, result in frequent system collapse, high

transmission and distribution losses and poor voltage

profile.

Figure1 shows a very good correlation between power

consumption in KWH/capita/annum and the GDP in

PPP/capita of a nation, utilizing the data for 134 countries.

A close look at Fig.2 confirms the assertion in Fig 1. The

countries with high GDPs are seen to have higher values of

power production, which definitely translates to higher

level of economic activities.

30000

25000

20000

10000

5000

0

15000

10000 20000 30000 40000

NigeriaGDP (PPP)/capita

kW

h/c

ap

ita

/an

nu

m

0

Figure 1. Electricity consumption and GDP in 134 countries of the world

Given Nigeria's available generation of 5,482MW (2010) and an estimated 150 million population, the 136KWH per

capita estimate is a by smally low when compared to:

South Africa which has 40,000 MW for its 50 million people.

Brazil with 100,000 MW for 192 million people.

The US with 700,000 MW for 308 million people.

Nigeria's per capita consumption is just 7% of Brazil's and 3% of that of South Africa (Fig 2).



POWER SECTOR IN NIGERIA

Generally, electricity has to be generated by one of so many

modes, transmitted from where it is generated to where it

will be used or consumed and finally distributed to each of

the end-user or consumer. Hence, the usual three broad

segments: Generation, Transmission and Distribution.

Power Generation

This involves generating electricity from any of the

available energy resources. Generally, generating plants

make use of water or steam to turn turbines which rotate

electromagnets that are surrounded by huge coils of wires.

The push is transmitted to electrons and consequently

electricity is produced at voltages varying from 11 KV to

25KV. Transformers are located at the generating plants to

step up the voltage to between 138KV and 700KV for

transmission.

Power Transmission

This is the system for moving high voltage electricity from

source of its generation through interconnected

transmission lines. Should any of the networks of lines fail,

another takes over the load. At various points along the

way, transformers step down the transmission voltage at

substations to voltages below 69KV, which feed into the

distribution system.

Power Distribution

This is the final stage in the delivery of electricity to end

users. The system's network carries electricity from

transmission system and delivers it to consumers. Typically,

it is composed of medium voltage (less than 50KV) power

lines, substations and pole-mounted transformers, low

voltage (less than 1KV) distribution wiring and

sometimes meters used for residential and commercial

occupancies.

136

214

271

710

932

961

1,226

1,420

1,781

2,013

2,474

4,848

5,110

6,234

6,759

8,358

13,636

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Nigeria

Cameroon

Ghana

Zambia

Gabon

Zimbabwe

Egypt

Namibia

China

Brazil

Jamaica

South Africa

Trinidad and Tobago

United Kingdom

Israel

Singapore

United States

KWh per capita per annum

Figure 2: Per capita electricity consumption for various countries



Length of Transmission Lines: Length of Distribution Lines:

Substations:

Substations:

330KV - 4,889.2Km

132KV - 6,319.3Km

33KV - 46,482Km

11KV - 31,785Km

0.415KV - 193,822Km

21 No. 330/132KV - 6,248MVA

108 No. 132/33/11KV - 8,305MVA 1,078 No. 33/11KV - 10,988MVA

41,477 No. (33/0.415KV & 11/0.415KV) - 17,044MVA

TRANSMISSION DISTRIBUTION

Table 1. Nigeria's Electric Power Transmission and Distribution Capacity (2010)

Power Generation in Nigeria

Power Generation Modes.

Nigeria is a country blessed with resources useful for

generating electricity such as coal, natural gas, oil, hydro

and other renewable energy.

Coal

Coal discovery in Nigeria dates back to 1909. Production

rose to a peak of 905,000 tonnes in the 1958/59 with a

contribution of over 70% to commercial energy

consumption in the country. In over 13 States of the

Federation, available data shows that coal of sub-

bituminous grade is available in about 22 coal fields. About

Color Key:

Black: Generation

Blue: Transmission

Green: Distribution Transmission lines

705, 500, 345, 230 and 138kV

Generating Station

Generating

Step Up

Transformer

Substation

Step Down

TransformerSubtransmission

Customer

20kV and 69kV

Secondary Customer

120kV and 240kV

Primary Customer

13kV and 4kV

Transmission Customer

138kV and 230kV

Figure 3: Simplified Electricity Distribution diagram from Generating Station. Transmission elements are shown in

blue while distribution elements are in green.

639 million tones was established while the estimated

quantity are about 2.75 billion tonnes. However, the

discovery of fuel in commercial quantities in 1958 and

conversion of railway engines from coal to diesel led to the

fall of coal in the early sixties. It only contributed about

0.02% to commercial energy consumption in Nigeria in

2001. Nigeria's coal can be utilized for power generation,

where available.

Oil

Oil exploration in Nigeria witnessed steady growth over

the past few years. The nation had a proven reserve of 25

billion barrels of predominantly low sulphur light crude in

1999. This increased effectively to 34 billion barrels in



Except for the large scale power generation from hydro

resources at Jebba, Kainji and Shiroro which serve as a

major source of electricity, the exploitation and utilization

of the renewable energy resources in the country is very low.

Recent efforts have led to the increasing use of solar energy

resources but others like wind and biomass are currently

limited largely to pilot and demonstration projects.

Hydro

In the case of hydro, currently, there are three main hydro

generating stations in Nigeria namely: Kainji, Shiroro and

Jebba in that order, these are stations that could ensure that

the nation gets a very sizeable supply of electricity without

Large Hydropower 11,250MW

Small Hydropower 735MW

Solar Radiation 23.5 - 7.0 kWh/m -day

Wind 2 4 m/s (annual average) at 10m height

Table 2: Nigeria's Renewable Resource Estimate

Source: Energy Commission of Nigeria; National Energy Masterplan

ENERGY SOURCE CAPACITY

2004 and currently is about 36.5 billion barrels. Nigeria's

capacity was about 2.4 million barrels per day in 2008 and

1.85 million barrels per day averagely in 2012.

Nigeria has four refineries in the downstream oil sub-sector

with a total installed capacity of 445,000 barrels per day and

5001 km network of pipeline to 22 oil depots from the

refineries. Electricity can be produced from oil directly or

from products of the refineries, especially gas oil or diesel

and fuel oils. Vision 2020 is looking at maximizing this

potential for power improvement to meet its goal.

Natural Gas

Nigeria's proven natural gas reserves, estimated at about

187.44 trillion standard cubic feet in 2005, are known to be

substantially larger than its oil resources in energy terms.

Gas discoveries in Nigeria are incidental to oil exploration

and production activities. Consequently, as high as 75% of

the gas produced was being flared in the past.

Natural gas comes either associated with oil or non-

associated. It is the non-associated gas that has largely,

hitherto, been processed for generation and other uses,

instead of flaring. The main gas resources are still largely

untapped.

New and Renewable Energy

Nigeria is endowed with abundant renewable energy

resources, the significant ones being solar energy, biomass,

wind, small and large hydropower with potential for

hydrogen fuel, geothermal and ocean energies. The

estimated capacity of the main renewable energy resources

is given in the Table 2.

interruption if it is properly harnessed. The total installed

capacity of these stations is around 1,900MW. More

importantly, Nigeria has a very big potential to generate

several Mega Watts of electricity from hydro. UNIDO

Centre for Small Hydro put the unexplored potential of the

Nigeria's hydro electric power capacity at about

20000MW.

CURRENT STATUS OF POWER GENERATION

In year 2000, power generation capacity was as low as

1,500MW in Nigeria. This was due mainly to lack of

investment in maintenance and expansion programs on the

existing power plants. Table 3 shows additional electricity

to be generated in view of achieving vision 20:2020.



With efforts on increasing power generating capacity, there

has been reasonable sectoral improvement as generation

capacity increased to 5482 MW in 2010. However, the

actual daily generation fluctuates between 2000 MW

3700 MW due to inadequate gas supply. Of this power

supply, gas-fired plants contributed about 74% of the

available power. The new power plants significantly added

to available generation capacity. These plants are compact

and flexible in operation with better control and

monitoring devices.

The figures highlighted are however related to the power

generation by PHCN and other identified associates

contributing to the grid. As shown in Fig. 4, a considerable

proportion of electricity is generated by individuals and

corporate bodies to compliment the inefficient services

offered by PHCN. An estimated 6000 MW is generated

via individual and corporate outfits to meet their minimum

demands for electricity.

1,754.7

6,000

794

1,119

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

PHCN

& IPPs Diesel & Petrol

Generators

Megawatts Hydro

AES, AGIP, Shell

Thermal

Figure 4: PHCN Peak Generation Compared with Capacity of Individual Diesel and Petrol Generators (2010)

Kainji

470

100 570

Jebba

482

96.4 578.4

Shiroro

450

150 600

Egbin

1100

220 1320

Sapele 180 90 270

Delta 300 200 500

Afam 52 346 398

Geregu 414 - 414

Papalanto 480 - 480

Omotosho 304 - 304

Station

Available

Capacity

(MW)

Expected

Additions

(MW)

Total (MW)

2012

TOTAL 4232 1202.4 5434.4

Table 3: Expected Additional Generation Capacity



In spite of the huge and diverse endowed energy resources in

Nigeria, there are only two major resources that are

exploited for electricity generation in Nigeria namely gas

which contributes about 68% on average, and water which

generates about 31% of electricity supply. The national

electricity grid comprises of three (3) hydro, seven (7)

government-owned and three major IPP-owned thermal

plants, with a total available capacity of 5,482MW as at

2010. However, the level of generation fluctuates due

primarily to gas supply constraints. The available capacity is

1 Calabar

562.5

2 Egbema

337.5

3 Ihovbor

450.5

4 Gbarian

225.0

5 Sapele

450.0

6 Omoku

225.0

7 Alaoji 960.0

8 Papalanto 675.0

9 Omotosho 451.0

10 Geregu 434.0

S/N NIPP Total Output

TOTAL 4770.5

Table 4 Capacity Output of the NIPPs

In spite of the huge and diverse

endowed energy resources in

Nigeria, there are only two

major resources that are

exploi ted for e lectr ic i ty

generation in Nigeria namely

gas which contributes about

68% on average, and water

which generates about 31% of

electricity supply.

6,000

35, 000

4,000

25,000

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

PHCH + NIPP in 2011 2020 Target

Megawatts Gas, Transmission & Build Gap

Gas & Transmission Gap

Actual Generation

Maintain?

Construct?

Unconstrain?

Figure 5 gives a pictorial view of actual PHCN generation capacity and associated generation from other sources with

projection to 2020.

inclusive of the power generated by the three major

Independent Power Producers (IPPs). Table 4(b) shows

current capacity output of the NIPP.

There exist virtual independent and potential power

generating facilities at various locations which are unused

and untapped because of absence of synergy between

Ministries of Water Resources, Mines and Steel

Development and Power. Examples are Dadin Kowa Dam

(30MW), Oyan Dam (9MW), ALSON (540MW).



Figure 6 shows the current electricity generation pattern

by resource. Large hydro accounted for about 31.30% of

electricity generation capacity while natural gas accounted

for 67.5 and the balance of 1.2% through other resources

as at 2005. In a study conducted by A. S. Sambo on

Matching electricity supply with demand in Nigeria

seven different fuel types were considered. These include

natural gas, large hydro, coal, nuclear, small hydro, solar,

and wind. Oil was considered to be very expensive and was

not used in the optimization. The shares of the different

power generation technologies in the total installed

capacity for the Reference Case are shown in Table 5.

Fuel Type 2010 2015 2020 Coal

0.0

9.9

13.8

Gas

78.6

48.5

53.5

Hydro

21.3

18.9

13.6

Nuclear 0.0 9.4 5.3

Solar 0.1 13.1 11.0

Wind 0.0 0.1 2.9

Table 5: Future Installed Electricity Generation Capacity By Fuel (Reference Case), %

Niger ia Power Generat ion by Fuel Type

1 . 2 0 %

3 1 . 2 8 %

6 7 . 5 3 %

C o a l H y d r o O t h e r R e n e w a b l e s N u c l e a r N a t u r a l G a s O i l , D i e s e l

Figure 6: Power generation by type

The share of hydropower (large and small) in the total instal

capacity could decrease from 31.30% in 2005 to about

13.6% in 2020, while the share of natural gas based power

capacity could decrease from 68.30% in 2005 to 78.6% in

2010 and thereafter decrease to 53.5% in 2020. Coal and

nuclear, which are not used for power generation at all at

present could account for 13.8% and 5.3% by 2020,

respectively. Solar and wind are also projected to account for

11.0% and 2.9% respectively by 2020. The High Growth

and Optimistic Scenarios follow similar patterns.

ISSUES AND CHALLENGES

The key challenges facing the Nigerian Power Industry are as

follows;

I. Inadequate power generation capacity

In comparison to other countries, Nigeria's installed

capacity is grossly inadequate. As at 2010, only

about 3,700MW was available for a population of

140million people due to various reasons including:

Gas supply constraints

Inadequate maintenance of equipment that stems

from procurement constraints, dearth of skilled

maintenance personnel and the dependence on

imports of parts and foreign experts to effect

repairs and overhauls.

II. Gas Supply

Considering Nigeria's reliance on gas for the thermal

stations which is currently estimated at about 74%,

Electricity Supply Mix



Po

wer lo

sses

(% o

f g

en

erati

on

) 50

40

30

20

10

0

1970 1980 1990 2000 2010

Figure-7: Power Losses as a

percentage of Generation

Source: National Energy Data Bank,

www.nationalenergydatabank.org

the frequent gas supply disruptions have been primarily

responsible for power load shedding across the country.

The main reasons for the disruptions were:

Quality of gas which is sometimes delivered

with condensates.

Non implementation of the gas master plan

leading to inadequate gas infrastructure for the

existing power plants

Inappropriate gas and power pricing structure to

support investment in domestic gas supply.

Vandalisation of gas infrastructure

PHCN's recurring debt to NGC

Lack of coordination between agencies of the

Ministries of Power and Petroleum

III. Sector Reform

1. Industry regulation

The National Electricity Regulatory Commission

(NERC), saddled with the responsibility of regulating

the power industry, has to be properly empowered and

enabled to carry out its functions. The independence of

the regulator also needs to be strengthened in order to

give confidence to investors. This needs to be addressed

to create a viable and competitive power sector. The

success of this is what will make or mar the effective

development of the sector.

2. Industry and Market Structure

The implementation of the Electric Power Sector

Reform Policy has introduced a number of new players

in the power industry. NERC has licensed thirty one

(31) companies for generation, transmission and

distribution.

3. Inappropriate Electricity Pricing

Nigerian electricity tariffs have to reflect the costs of

generation, transmission and distribution to ensure

stability and attract investors. Nigerians, who

currently generate supplementary power, pay much

higher prices for electricity. Generation with the use of

diesel, if efficient, is at about N40/KWh, much higher

than what would be paid to a more efficient power

sector.

4. Commercial framework to support private

investments

Although the implementation of the Power Sector

Reform Program is well advanced, the appropriate

commercia l f ramework to support pr ivate

investments needs to be clearly spelt out and the

framework made attractive enough to investors.

In order to proceed with the reform program, it is

necessary to develop a comprehensive action plan to

holistically implement the reform program as

encapsulated in EPSRA 2005.

IV. Transmission

Inadequate Transmission Network

The transmission network is overloaded with a

wheeling capacity which is currently estimated at

5,000 MW. It does not have adequate voltage

profile, dispatch and control infrastructure, grid

network, has frequent system collapse, and

exceedingly high transmission losses. Access to

electricity services is low.

Obsolete and Inefficient Transmission and

Distribution Equipment

Significant portions of the transmission and

distribution network are obsolete, especially in the

major cities. The transmission and distribution

losses (figure 7) are of the order of 40%.



There is low

human

capacity in

the Industry

and there is

need to

enhance

human

capacity

development

in the

Nigerian

power sector.

In order to

address this

challenge,

the reform

proposed a

National

Power

Training

Institute,

similar to the

Petroleum

Training

Institute

V. Low level of human capacity

development

There is low human capacity in the Industry

and there is need to enhance human capacity

development in the Nigerian power sector.

In order to address this challenge, the reform

proposed a National Power Training

Institute, similar to the Petroleum Training

Institute, which was set up to take over the

operations of the existing training schools of

PHCN. The Institute should be adequately

funded to d i s cha rge i t s manda te .

Development of the specific high-level skill

requirement should immediately commence

so as to be able to meet the needs of the

sector, when fully open to the private sector.

Full advantage should be taken not to repeat

the experience with the oil and gas sector and

ensure the jobs available are taken by

Nigerians.

VI Vandalization of power assets

The incidence of vandalization has

significantly impacted negatively on grid

equipment and capacity development in the

sector at all levels. Vandals target various

equipment from distribution flow voltages

of 415v to 330Kv super grid levels. These

include transmission lines and transformers

at distribution level. Usually these vandals

pilfer the distribution transformers, line

conductors, insulators and other line

equipment that are resold to the grid on the

open market.

OBJECTIVES, STRATEGIES AND

THRUSTS OF VISION 20:2020

The policy thrust of the medium term plan of

vision 20:2020 envisages a power sector that

efficiently delivers sustainable, adequate,

qualitative, reliable and affordable power in a

deregulated market while optimizing the on,

off grid energy mix and a technologically

driven renewable energy sector that

harnesses the nation's resources to

complement its fossil fuel consumption and

guarantee energy security.

The key strategic objectives for the first

medium term Implementation Plan (2000

2013) were as follows:

1. To increase generation, transmission

and distribution capacity for adequate

and su s t a inab l e power supp ly.

Generation of 16,000MW by 2013 was

envisaged.

2. To have an optimal energy mix of Gas

fired plants 12,730MW, Coal 900MW,

Nuclear 0MW, Hydro 2250MW with

other renewable i.e. wind 10MW, Solar

10MW and Biomass that can give a total

of 16,000MW by 2013 - using

appropriate technologies.

3. To encourage local production of inputs

for Power sector development using

local materials.

4. To reduce wastage of electricity by

promoting efficient practices through

introducing demand side management,

publicity, encourage use of energy saving

equipment.

5. To promote effective utilization of coal

to complement the nation's Power needs

and ensure the much-needed Power

generation mix.

6. To harness a significant contribution of

hydropower potential for electricity

generation with the mini and micro

hydropower schemes developed for

electricity extension to rural and

remote areas.

7. To ensure a significant contribution of

the wind energy to electricity generation

mix in the areas feasible.

8. To make effective use of the solar energy

resources for electricity generation,

particularly in the rural and remote

areas.

WAY FORWARD

The first medium term for the vision

20:2020 is virtually over. However, all hope

is not lost with the power sector. Noting the



socio-political terrain and the usual attitudes towards

government programmes, a lot of progress has been made

in the implementation plan for the power sector. The major

bottleneck has to do with the unbundling of PHCN, which

has taken the whole of the first medium term and all is yet to

be fully achieved. The recent release of funds for the PHCN

pensioners as well as the conclusion of the transfer of some

of the Gencos to the private sector may just set the pace for

an accelerated development in the sector.

Hence, efforts would need to be put at:

(i) Intensifying the Implementation

of the Power Sector Reform Program, i.e.

Improvement of industry regulation with specific

reference to capabil i ty, capacity and the

independence of NERC.

Maintenance of viable electricity and gas pricing

that will encourage and guarantee financial and

capital investment.

Conclusion of the privatization of the PHCN

successor distribution and generation companies.

Feasible incentive scheme backed by policy to

encourage private sector investment in generation

and distribution.

Conclusion of the fate of TCN to be sure of a

robust and operationally efficient transmission

network.

Financing institutional and market systems that

will support power procurement between

generation companies and distribution companies

should be put in place. Empowerment should be

given to the office of the market operator to

commence shadow trading.

(ii) Overhaul and Rehabilitation of Existing Power

Plants

The overhaul and rehabilitation programmes of the

existing thermal and Hydroelectric Power plants

station should be speedily concluded and

privatized accordingly.

(iii) National Integrated Power Projects (NIPP)

The completion of the on-going National

Integrated Power Projects (NIPP) which were

expected to contribute about 4,770.5MW of

electricity to the national grid and increase the

transmission and distribution capacities by

3040MVA at 132/33KV and 5250MVA at

330/132KV and 3540MVA (3009MW)

respectively by December 2011 and much more by

2013 should be hastened.

(iv) Construction of Additional Gas Supply

Infrastructure

In order to realize the power generation target,

urgent need for additional gas resources had been

established and a few projects identified or

earmarked to mitigate the shortfalls. The

completion of those projects and additional ones

would be essential to move near the targets of the

power needs in Vision 20:2020. These include:

D e v e l o p m e n t o f g a s r e s o u r c e s f r o m

Obiafu/Obrikom fields held by Nigerian Agip oil

Company (NAOC)

Construction of a 100km 48 pipeline for gas

evacuation through the East-West inter-connector

gas pipeline from Obiafu/Obrikom in the East to

Oben node in the West is needed to meet the high

demand in majority of the power plants in the

western part of the country.

Phase I project of gas pipeline construction of

about 400Km through Calabar-Umuahia-

Ajaokuta to supply gas to the power plants in the

Eastern part of Nigeria such as Alaoji, Geometric

power plants etc.

OCTOBER -

DECEMBER

, 2012

A Journal p

ublished

by the Nig

erian Insti

tute

of Manage

ment (Cha

rtered)

Volume 48:

Number 4

PAGE 12

EDUCATI

ON

AS A TOO

L FOR

NATION

AL

REORIEN

TATION,

DEVELO

PMENT

AND INT

EGRATIO

N

Always readManagement in Nigeria Journal



(v) Upgrading of Facilities at the National Power

Training Institute

The middle level manpower development for the

sector would be largely from the newly established

National Power Training Institute, whose upgrade

should be completed to a world class standard. A

complimentary high-level skill development should

also commence through specialized Masters

degrees in aspects of power generation,

transmission and distribution. These should jointly

be mounted by universities and the power servicing

companies.

(vi) Independent Power Producers (IPP)

Development Program

Nigeria government will have to provide incentives

such as pre-approved permits, tax holidays, off take

guarantees, model form PPAs, GSPAs etc. to

achieve the power generation target needed to

achieve the objectives of Vision 20:2020. As

highlighted in Figure 5, the bulk of the power

generation needed to meet the needs of the vision

will have to be through the IPPs. Hence, a focused

effort to encourage the development of

Independent Power Projects (IPPs) in the country is

essential.

(viii) Utilisation of other Energy Resources for

Adequate Power Mix

In order to enhance energy security and

sustainability through the diversification of

feedstock for power generation, the use of coal and

other renewable energy resources hitherto unused

(wind, solar, biomass) have to be fully deployed in

partnership with the private sector.

(ix) Full Exploitation of the Hydroelectric

Resources in the Country.

Hitherto, hydroelectric power is the second largest

source of power in the nation after the gas-fired

plants. Developments in this area are dual:

(a) Completion of the Zungeru (700MW) and the

Mambilla (2600MW) Hydroelectric Power

Projects which could add a total of 3300MW to the

grid.

(b) The installation of turbines in existing dams to

generate electricity should be a priority since these

facilities are near completion.

CONCLUDING REMARKS

It has been clearly shown that provision of electricity is key

to economic deve lopment as there i s d i rec t

proportionality between power generation in an economy

and its level of development. No nation can thrive and

keep its workforce in jobs without adequate level of power

generation and provision. Entrepreneurship and SME

development can be maximized with adequate power

provision.

The Vision 20:2020 plan, as it relates to power, set out to

articulate the path to achieving adequate power supply for

Nigeria. Its first implementation plan spanning 2010 -

2013 seems to be far behind its target of the provision of

16000MW of power by 2013, albeit with appreciable

power mix. However, the major hurdle to the vision's

realization, which is the full involvement of the private

sector in the generation, transmission and distribution of

power appears to be on course, even though behind in

time frame.

The eventual solution to the Nigerian power problem will

involve the generation of power from resources (coal,

wind, solar, nuclear, biomass, etc) as at where they are

available in the nation and not 100% reliance on

generation from only natural gas and hydro resources.

This will ensure security of supply.

There has to be synergy between Ministry of Power and

that of Petroleum Resources to ensure adequate gas

resources for power generation by the existing plants and

new ones that are bound to come up to meet the demands

of the vision. Key projects like the East West pipeline and

the gas processing plants must be scheduled to meet the

needs of the power agenda. Similarly, synergy must exist

between the Ministry of Power and the Ministry of Water

Resources to harness power from the existing dams in the

nation.

More importantly, the framework for appropriate gas and

electricity pricing as well as power purchase must be

without blemish. The regulator, NERC, must be

independent and be allowed to play its role for a vibrant

power sector which is what could and would drive the

economy to take it to be one of the best twenty (20) in the

world, not far beyond 2020.



REFERENCES

* Ebewele, J. O. (2011): The challenges of power generation in Nigeria, Paper delivered at the Summit on Energy and sustainable economic

growth.

* Goldwyn,D. (2003): Power sector reform review, World Bank Operations Evaluation Department (OED), [on line]. Available:

http://www.worldbank.org/oed

* Labo,H.S. (2010); Current status and future outlook of the transmission network, investors' forum for the privatization of PHCN successor

companies, [online]. Available: http://www.nercng.org/tcn

* Owonubi,O. U. Equere, A. Adelakun, A. Solanke, T. Oluwakiyesi, A. Idowu and R. Ahmed; 31 (August 2010):.Nigeria-power sector reform

roadmap, Nigeria Vetiva Flashnote, [Online] Available: http://www.proshareng.com/admin/upload/reports/VetivaResearchFlashNote

* Oluseyi,P. O.(2012) "Evaluation of the Roadmap to Power Sector Reforms in a Developing Economy, Proceeding of European Energy

Market (EEM) conference, Florence, Italy, May 10-12, 2012.

th

* Sambo,A. S. (2008):"Matching Electricity Supply with Demand in Nigeria", International Association of Energy Economics, 4 Quarters pp

32-36. [online]. Available: www.iaee.org/en/publications/newsletterdl

* Shettima,A.(2011) Market development in the Nigeria Electricity supply Industry (NESI),. [online]. Available http://www.nercng,org/tcn

* Nigerian Electricity Regulatory Commission(NERC), The Grid Code for Nigerian Electricity Transmission System, The Grid Code version 01,

[on line].Available: http//www.nerc.ng.org/tcn http://en.wikipedia.org/wiki/Electric_power_distribution

NIM VISION: To be the and of Management ExcellenceSOURCE SYMBOL

NIGERIAN INSTITUTE OF MANAGEMENT

(CHARTERED)

The President & Chairman of Council,

DR. NELSON U. O. UWAGA, mni, FNIM, FPSN

on behalf of the Institute, invites you to the

2014 CENTENARY DISTINGUISHED

MANAGEMENT LECTURE

R.S.V.P

Engr. M. K. Sulaiman, FNIM

Registrar/Chief Executive

08037185477

Theme:

holding at the

SHEHU MUSA YAR'ADUA CENTRE , ABUJA

TH

on Thursday, 10 JULY, 2014 at 11.00 am.

RESETTING NIGERIA,

APPLYING TRANSFORMATIONAL

DISCIPLINES

GUEST SPEAKER:

DR. (CHIEF) L. E. A. AIMIUWU, FNIM, CNIM, OON

(The Osayuwanoba of Benin Kingdom)

World renowned transformation strategist and planner

N IMNIGERIAN INSTITUTE

OF MANAGEMENT

(CHARTERED)

Management Excellence Since 1961



Abstract

The discussed the centrality of management in the evolution of

a livable community, in the organization of states and in the

architecture of national development. In order to drive home

the message on national development, it raised some

fundamental questions such as: Why is our national

development effort since independence unable, till date, to

support a decent life and a promising future? Why are all the

symbols of promised economic growth suddenly stunted and

even in reverse gear? Have we truly given thought and

sufficient reflection to the meaning and scope of development

and management? It called on the NIM to be part of Nigeria's

Management Mix as the best people to lead the nation are the

professional managers.

Introduction

Development is certainly much more than crunching

GDP figures, drilling oil, erecting skyscrapers or even

blindly accepting the western economic theories of

privatization, stabil ization and l iberal ization.

Development is strictly about the transformation of

society. The transformation of society is not just about

slogans, they have to be coded in the values of direction.

Transformation must be about what kind of society we

seek to build, and for what goals and purposes. This is the

only way that transformation acquires its true meaning,

and that is why development experts insist that

transformation is also a process mechanism that affects

not only what we do, but how we do it.

An accurate conception about Nigerian development is

essentially about quality of life issues; issues such as

poverty eradication; peace and security, true and broad

health care and education beyond basic literacy. It is also

about economic security, the creation of safety nets, a

democratic, equitable and sustainable development.

Many Nigerians are frustrated about the failure of

development on our shores. What many have failed to ask

however is how they understand the concepts and the

values that give development its meaning. The Indian

economist and philosopher, Professor Amatya Sen makes

By Mallam Nuhu Ribadu

Principal Partner, Ribadu and Partners, Abuja

MANAGING CHAOS

AS DEVELOPMENT


the important point that democratic values,

as much as economic values are critical in an

accurate conception of development.

These key in with the vision of the

American Nobel Prize winner, Joseph

Stieglitz who definitively affirms that

words like openness, partnership and

participation, women empowerment, and

environmental health carry in their innards,

a theory of development, as well as evidence

tha t can l ead to more succes s fu l

development efforts.

Management in Nigeria:

The question is to look down the passage of

time and ask why half a century after

independence Nigeria remains a near

destitute nation. Whichever way it is

viewed, management has received a bloody

nose in the country, and those who insist

that our tribe of managers cannot escape

the humiliation of failing to provide

leadership appear to be right. We need to

just look around ourselves, recall our last

visit to a true factory, take a broad view of

many of our national monuments, even

colleges, health centres, car assembly plants,

steel mills, agricultural projects and the

endless lists of failed national institutions.

Undoubtedly there is a major management

deficit in the land and the result is that the

country is far away from where it ought to

be.

Nigeria's problem is not with its laws. The

amendment to Nigeria's Constitution and

other laws alone would not take the nation

to the desired destination. The problem is

largely that of management. Bad managers

cannot operate the best of laws, the best of

businesses and the best of countries. The

country's management problem did not

begin today. Management is the act of

getting people together to accomplish

desired goals and objectives using available

resources efficiently and effectively.

Flowing from this definition, the questions

are: how efficiently and effectively have the

God-given natural resources been used to

uplift our great country? How well have the

talents and endowments of Nigeria's

human resources been harnessed to put the

country on the path of sustainable

development? How well have we managed

ourselves as a giant in Africa and an

important entity in the comity of nations?

While pondering over the questions and

making deductions, the immense damage

and huge cost that poor leadership and

management have led Nigeria to socio,

political and economic failures should be

visited. These are giant setbacks like more

than three decades of military dictatorship

in Nigeria polity, the brutal civil war, the

phenomenal misuse of huge oil resources,

the incessant ethnic and rel igious

intolerance, the monumental corruption,

the massive brain drain and now the bitter

experience of terrorism on our own

homeland.

Need for New Management Paradigm:

Are our management assumptions really

right? It is said that once the assumptions of

social science are wrong, the analysis is

destined to a fatal failure. The father of

modern management science, Peter

Drucker said, The basic assumptions

underlying much of what is taught and

practised in the name of management are

hopelessly out of date. As a challenge to us

all, we cannot afford not to think of an ideal

management model for ourselves that is in

tune with our country's political, economic,

social and cultural realities. Hence, the task

of the Nigerian Institute of Management.

Martin Meredith, author of the classic

work, The State of Africa, noted aptly that

mismanagement and corruption in our

country is as old as our independence, if not

Why is our

national

development

effort since

independence

unable, till

date, to

support a

decent life and

a promising

future? Why

are all the

symbols of

promised

economic

growth

suddenly

stunted and

even in reverse

gear? Have we

truly given

thought and

sufficient

reflection to

the meaning

and scope of

development

and

management?



older. He asserted that: In Nigeria, the first years of

independence became an orgy of power being turned into

profit. The advantages of political office were used at

every opportunity by Nigerian leaders to accumulate

empires of wealth and patronage with which to improve

both their personal and their party's fortunes. Using

public resources, party and government bosses were able

to reward their supporters and friends with jobs,

contracts, loans, scholarships, public amenities; indeed

any favour that came within their purview.

He added that: Power itself in effect came to rest on the

ability to bribe. Parties, once in power, moved quickly to

amass a fortune from public funds large enough for them

to be able to win the next election; a network of banks,

businesses and financial structures were set up to support

this objective. Parties that did not command state

resources simply stood no chance of winning elections.

Furthermore, he submitted that: Between 1958 and

1962, for example, the Action Group government in

Nigeria's Western Region invested about 6.5million GBP

in the National Investment and Properties Company, a

business which had four party leaders as its directors. In

the period between April 1959 and November 1961, one

of the directors gave 3.7million pounds to the Action

Group in the form of special donations. Northern

politicians ran a similar spoils system. A study of thirty-

nine investment and loan projects of the Northern

Nigeria Development Corporation undertaken in 1966

showed that the biggest borrowers had been the big men

of the Northern government.

From the foregoing, it could be seen in horror that

Nigerian leaders began to mismanage the country right

from day one. The commanding vision of development

was not even part of the bargain. A little comparison of

Nigeria and Tanzania at independence could be made to

underline what good and bad management can do to a

country. Tanzania is younger than Nigeria, becoming

independent a year after in 1961. Zanzibar, its semi-

autonomous region, got independence in 1963. But

because of the quality of their managers, they foresaw

strength in unity and worked extremely hard, in spite of

their religious and cultural differences, to become one

country the United Republic of Tanzania in 1964. The

country grew stronger, more prosperous and ended up

avoiding military coups, civil war and disintegration. It

became the bastion of peace and stability in a very restive

region, even turning out to be saviours to its tumultuous

neighbours.

Tanzania had the same kind of challenges Nigeria had at

independence. But its leaders had better managerial

know-hows. Nigeria is not that lucky with its managers,

and the rest is history. The first wrong steps were taken

and the country is paying dearly for them ever since.

Effects of Mismanagement

The point has been made earlier about how so many years

of mismanagement and inept leadership has led to the

social and political dislocation in the country. If we were

to subject this result to the standards of strict business

judgments, there ought to be consequences for this type

of result. Every manager knows that his or her longevity

at the head of a corporate organization is as certain as the

continued satisfaction of the shareholder to executive

performance.

Apparently, the mismanagement of Nigeria has led to the

extinction of institutions of national significance and

pride such as Nigerian Airways, National Shipping Lines,

Steel Rolling Mills, NITEL, Car Assembly Plants and

even the national soccer team, the Super Eagles, which

used to be the symbol of the nation's collective unity and

pride, that some Nigerians now refer to as Super

Chickens. Poor managers that we are, we have

mismanaged our natural resources, particularly the oil

that is the cash cow of the national economy today, to the

extent that most observers and commentators of the

industry now believe oil is a curse on Nigeria.

The Managers Nigeria Desire

The central challenge is to identify how we all can

effectively respond to our daunting challenge of

management and development. Development will

continue to elude us if we cannot deploy a new generation

of managers that will interpret the challenge of our failure

as the failure of current management practices.

The community must support the ennoblement of man

and its resources. It must be an empowering community

of equality and justice where values of collective and



individual progress are an abiding faith. The manager

Nigeria desires must be one with a national ethos, not a

sectional jingoist, he must be a competent, modern,

honest, God-fearing, compassionate, benevolent,

courageous and firm, confident, articulate, great team

builder. Presumably, the Nigeria Institute of

Management has an unusual ball in its court.

A Managerial Model for Nigeria

Researchers at the Harvard Business School, concerned

at the failure quotient of corporate organizations in the

United States, came up with new markers of

management vision for the new age. They proposed that

the businesses of the future that will endure and last must

be guided by the following principles: Eliminate formal

hierarchies; Reduce fear and increase trust; Exploit

diversity; Expand employee autonomy; Unleash human

imagination; Encourage passion among employees; Use

lofty goals such as truth, love and justice to inspire

employees instead of mundane ones such as

differentiation or focus.

The NIM must challenge the country in the face of the

current climate of failure in many of our institutions with

new values for the future. If we have lost the past decades,

but hope to refocus, it is imperative that new values of

leadership and management should guide our next steps.

The notion that Nigeria's geography, race or culture has

anything to do with its current situation is not tenable.

The examples of Nigeria's neighbours and sister nations

sufficiently suggest that we can and should try harder. We

need to learn some management lessons from some

countries on African continent and then formulate an

ideal management system for the country. A bit of

Tanzania (how to build a nation out of a country), a bit of

Botswana (the sharing of resources accountability and

transparency) and a bit of Rwanda (how quality

leadership pulls a country back from the brink and puts it

on the path of sustainable development with the highest

development indices in Africa. Certainly not to forget

Ghana, Nigeria's cousin in the region, that is showing on

a daily basis that size and wealth have nothing to do with

development and progress.

The Place of NIM In the Nigeria Management Mix

A management revolution is urgent if we are to gain the

decade ahead. Today we are at best managing chaos and

that is not a viable development model. However, it can

also be an opportunity to turn failure to success. If we put

in the will and the determination we shall and can make it.

The history of our nation and of the components of the

larger nation has shown that we have the capacity to pull

back from the brinks and make impressive wins. The

most salutary example is how we managed to rebuild

after a nasty civil war and still kept the faith of a united

nation aglow. This should be the focus of the NIM. It

should inspire Nigerians to know that there is a way out

of our current failings and the alternative in the new

century is that failure cannot be an option. Nations and

societies that cannot put the challenge of development, of

leadership and of management at the front burner, will

atrophy and vegetate. The easy way out is to find a way

out of the endemic corruption that has choked the breath

out of Nigeria's purpose to progress and the best people

to lead the nation in this march are the professional

managers.

We need to just look around

ourselves, recall our last visit

to a true factory, take a broad

view of many of our national

monuments, even colleges,

health centres, car assembly

plants, steel mills, agricultural

projects, and the endless lists

of failed national institutions.

Undoubtedly there is a major

management deficit in the

land, and the result is that the

country is far away from

where it ought to be.



THE IMPACT OF THE ENVIRONMENT ON

THE MANAGEMENT AND PLANNING OF

ABSTRACT

The environment in which an organisation finds itself

considerably dictates the way and manner in which the human

capital of the organisation is planned and managed. The

environment consists of a plethora of forces (environmental

challenges) that exert varying degrees of pressure and influence

on the planning of human capital. The paper investigated the

factors militating against the planning and management of

human capital planning in public organisations. Three

hypotheses were drawn and tested based on the data gathered

through a questionnaire. The survey investigation method was

used in collecting the primary data for the study. The sample

consisted of 349 middle level management staff of five public

sector organisations in Nigeria. The results showed that the

planning and management of organizational people is

significantly influenced by political influences, traditional

rulers and military rulers; globalization, economic meltdown

and technological changes; and the corporate strategic plans

and objectives of the organization. Based on the

aforementioned, the paper concluded that the environments in

which organisations find themselves contain key trends and

forces that have potential impact on the management and

planning of human capital. These factors possess both

opportunities and threats which, if well harnessed and checked,

can be great potential for public sector organisations. The paper

recommended advocacy by Human Capital Planning (HCP)

managers to influence detrimental laws that affect or influence

HCP; training programmes and updates on technological

changes and the need to harmonize HC plans with corporate

strategic plans.

BYBY

Dr. WURIM, BEN PAM Dr. WURIM, BEN PAM

(Assistant Chief Accountant)(Assistant Chief Accountant)

National Directorate of Employment, PlateauState.National Directorate of Employment, PlateauState.

BY

Dr. WURIM, BEN PAM

(Assistant Chief Accountant)

National Directorate of Employment, PlateauState.

HUMANCAPITALHUMANCAPITAL


INTRODUCTION

Human capital is a key economic resource which demands

the same attention from its enterprise as planning its

finance, equipment, raw materials, production or services,

sales, investments or profits. Human capital has been

defined as the stock of productive skills and technical

knowledge embodied in labour. In order words, human

capital comprises of expertise, dexterity, talent, craft,

aptitudes and abilities, and understanding. Without

people, organisations cannot exist.This is because it is the

knowledge, skills and abilities of individuals that create

value to the organization (Armstrong, 2003). Davenport

as cited in Armstrong (2003:353), observed that people

possess innate abilities, behaviors and personal energy.

These elements make up the human capital they bring to

their work. It is they, not their employers, who own this

capital and decide when, how and where they will

contribute it.

Human capital represents the human factor in the

organisation; the combined intelligence, skills and

expertise that gives an organisation its distinctive character.

The human element of an organisation are those capable of

learning, changing, innovating and providing the creative

thrust which if properly motivated can ensure the long term

survival of the organisation (Bontis, et al, 1999: 391-402).

In summary, all the workers or employees of an

organisation form the human capital of that organisation.

Human Capital Management (HCM) and Human Capital

Planning (HCP) are two vital activities often associated

with human capital and organizational performance. While

human capital management is a management function

concerned with the recruitment, selection, training and

development of people in an organisation, (Aswathappa,

2005: 6), human capital planning is the process by which a

firm ensures that it has the right numbers and kinds of

people in the right places at the right time, doing things for

which they are economically most useful (Fammularo,

1986:10).

The assumptions underpinning the management and

planning of human capital are that people are the

organisation's key resource, and organizational

performance largely depends on them. Thus, if an

appropriate range of human capital policies and processes

are developed and implemented effectively, human capital

would make a substantial impact on organizational

performance.

Human capital planners and managers in Nigeria grapple

with the tasks of planning and managing the human capital

of organisations in such a way as to increase productivity,

effectiveness and efficiency, and meet production targets.

In spite of efforts put in by such organizational operators,

most organisations suffer from gross mismanagement

which has consequently resulted into inefficiency in the use

of resources, faulty recruitment of employees, inadequate

training, absence or non compliance to replacement

charts/succession plans, massive purges and corruption

which have in turn weakened the ability of organisation to

carry out their functions effectively (World Bank,

1991:23).

Simply asked, why is it that in spite of frantic efforts to plan

and manage the human capital in organisations, the

productivity and performance levels of the workers is still

below expectation. It is well known that no organisation

operates in a vacuum. The environment in which it finds

itself considerably dictates the way and manner in which

the human capital of the organisation is planned and

managed. Environment may be understood as all those

forces which have their bearing on the planning and

management of human capital (Decenzo, et al, 2002: 46).

Analysis of the environment is very important in order to

be proactive. Reactive strategy serves the purpose when the

environment is fairly stable and competition is less severe.

Today's business environment is characterized by change

and intense competition. Hence, proactive steps in the

planning and management of human capital are vital for

any organisation if it has to survive in such an environment.

Human capital represents the

human factor in the organisation;

the combined intelligence, skills

and expertise that gives an

organisation its distinctive

THE IMPACT OF THE ENVIRONMENT ON THE MANAGEMENT OF HUMAN CAPITAL


STATEMENT OF THE PROBLEM

It is a truism that people are the organization's key resource,

and organizational performance largely depends on the

people. However, the realization of a well planned and

managed human capital that ensures maximum

organizational effectiveness and performance depends on

the inter-play of a plethora of forces that exert varying

degrees of pressure and influence on the planning and

management of human capital.

The great pressure exerted by the environment in which an

organization's human capital is planned and managed

appears to be the main bane of its ability to meet target,

datelines and customer demand, the achievement of

teamwork and the employment of the right quality and

quantity of workers. Other attendant problems are low

labour productivity and capacity utilization. These forces

include among other things: global economic meltdown;

logical changes; demographic changes; government/legal

regulations; cultural diversities and trade union interest

and expectations. Others are: globalization; e-commerce;

corporate strategic plans; objectives and policies. Whereas

some of these are clearly observable, others are largely

remote in operation and effect.

What is not yet very clear, however, is whether or not, or

further still, which of these forces, affect the planning and

management of human capital in Nigeria and to what

extent? Further compounding the problem is the apparent

uncertainty as to whether the easily identifiable factors as

opposed to the remote factors are the worst culprits

militating against the planning and management of human

capital in Nigeria.

RESEARCH OBJECTIVES

The major objective of this paper is to generally investigate

the factors militating against the planning and

management of human capital in organisations. The

specific objectives of the study are:

1) To assess the impact of political, traditional and

military leaders influences on human capital planning

and management

2) To ascertain the extent to which globalization,

economic meltdown and technological changes affect

human capital planning and management

3) To assess the impact of corporate strategic plans on

human capital planning and management.

METHODOLOGY

The study was a survey investigation to find out how

certain environmental forces militate against the planning

and management of human capital in five organisations.

The population of the study is made up of 10,127 middle

level management staff presently active in the employment

of the five selected organisations.

Table 1.1 Population of Middle Level Management staff in the Five Selected Organisations

Organisations No of Employees

National Directorate of Employment (NDE)

1,677

Power Holding Company of Nigeria (PHCN)

3,072

Plateau State Water Board (PSWB)

360

Federal Ministry of Finance (FMF)

2,066

Nigerian National Petroleum Corporation (NNPC)

2,952

Total

10,127

Source: Field survey, 2012



Given that the population of study is finite, the Taro

Yamane (1964) formula was used to arrive at a sample size

of 385. The formula is given as

n = N 2

1+N (e)

Where: n = Sample size; N = Population; e = level of

significance (or limit of tolerable error), in this case, 0.05.

and 1 = Constant value.

The primary data were generated using a Likert Scale (5

Points) structured questionnaire which covered three

management functions and other issues relevant to the

research topic. The questionnaire was administered on the

selected sample (385) through direct distribution. The data

collected through the questionnaire was analyzed using the

Kruskal-Wallis test statistic.

THEORETICAL FRAMEWORK

To actually understand the plethora of forces that exert

pressure and influence on the planning and management of

human capital, an environmental scanning must be carried

out.

Environmental Scanning

In order to identify the key trends and forces in the

environment of an organisation as having a potential

impact on the management and planning of human capital,

an environmental scan must be carried out. This is because

no organisation operates in a vacuum. The environment in

which it finds itself considerably dictates the way and

manner in which its human capital is planned and

managed.

Mathis & Jackson (2000: 38) posited that environmental

scanning is the process of studying the environment of the

organisation to pinpoint opportunities and threats. The

external environment especially affects human capital

planning because each organisation must draw from the

same labour market that supplies all other employers.

Indeed, one measure of organisational effectiveness is the

ability of an organisation to compete for sufficient supply

of human capital with the appropriate capabilities. Mathis

and Jackson suggested the areas to be scanned to include:

Government influence, economic conditions, geographic

and competitive concerns, and workforce changes.

According to Aswathappa (2005:72), environmental

scanning refers to the systematic monitoring of the external

forces influencing the organisation. To him, managers

monitor several forces but the following are pertinent for

human capital planning: economic changes; technological

changes; demographic changes; political and legislative

issues as well as social concerns.

Analysis of External Environment

When carrying out an external scan of an environment for

the purpose of human capital planning, what things should

one look at? According to the Government of

Saskatchewan H R planning guidelines as contained in

Bacal & Associate (2008: 1-2), in order to do human

capital planning you need to have a sense of both the

current external environment, and anticipate things that

may happen in the future in the labour market place. You do

this via an external scan or environmental scan that can

address the following issues and questions:

What is the current external environment? What

elements of the current environment are relevant to the

company? Which are likely to inhibit the company

from reaching its goals?

What are the company's specific issues and the

implications of these issues? What key forces in this

environment need to be addressed and which ones are

less critical?

What is the impact of local trends on the company

(demographic , economic , po l i t i ca l , in ter-

governmental, cultural, technology, etc)?

Are there comparable operations that provide a similar

service? How might that change?

How would that affect the company?

Where does the work of the company come from?

How might that change and how would it affect the

organisation?

It is a truism that people are

the organization's key

resource, and organizational

performance largely depends

on the people.



How might the external environment differ in the

future? What forces at work might change the external

environment? What implications will this have for the

organisation?

What kinds of trends or forces affect similar work in

other jurisdictions?

What kind of trends or forces affect the company's

partners/stakeholders and customers?

It has been noted that many factors are driving change both

from within and without. A carefully scanned environment

is likely to reveal active forces like government/legal

regulations, economic and technological changes,

globalization, e-commerce, demographic changes, and

union interests and expectations. Others are societal

expectations and corporate objectives and policies.

The Internal Organisational Environment

Human capital planning cannot take place in a vacuum. It is

essential to note that human capital planning is affected by

corporate strategic plans, objectives and policies of an

organisation. Bartholomew & Smith (1970:3), observed

that human capital planning is an essential part of the

overall corporate planning of any organisation and cannot

be successfully developed as a separate or parallel activity.

For one thing, all the components of a corporate plan are of

necessity, related to the organization's mission and

objectives, and all are concerned with the same future

environment, although they focus on different aspects of it.

Incomplete or inconsistent basic assumptions made by

different contributors to a corporate plan are well known

sources of disaster.

Human capital planners must be very conversant with their

corporate plans and objectives, financial conditions and

technology in use or to be used. This is because therein lies

the answers and solutions to some of the basic questions

they (HR planners) face. In scanning the internal

environment of an organisation to detect forces that

influence human capital planning and management, a

number of questions and issues need to be addressed. Bacal

& Associate (2008:6) adapted from the Government of

Saskatchewan (USA) a list of such questions and issues to

be addressed. They include but not restricted to the

following:

What knowledge, skills, abilities and capabilities does

the organisation have?

What is the company's current internal environment?

What elements support the company's strategic

direction? What elements deter the organisation from

reaching its goals?

How has the organisation changed its organisational

structure? How is it likely to change in the future?

How has the organisation changed with respect to the

type and amount of work it does and how is it likely to

change in the future?

How has the organisation changed regarding the use of

technology and how will it change in the future?

How has the company changed with respect to the way

people are recruited?

What is the public's (or customers) perception of the

quality of the organization's products, programmes

and/or services? What is being done well? What can be

done better?

Are current programmes, processes or services

contributing to the achievement of specific

organisational goals?

What are the present and future financial positions

/conditions of the organisation?

Is the technology currently in use cost effective? What

other cost effective technology does the company have

in mind for the future?

Organisational Objectives, Policies andPrinciples

Efficient and effective human capital management is a

challenge to all human capital professionals. Staffing,

training and managing with the aim of increasing

organisational productivity needs proactive strategisation.

Among the core human capital activities are: payroll, time

and labour management, benefit administration and

human resource management. These activities are affected

by forces eminent in policies and principles of the

organisation.

Organisational objectives are benchmarks against which

actions of a Human Resource Management Department

are evaluated (Shehzad: 2008:1). For human capital

activities that are designed to increase organisational

productivity to be effective, certain standards of

measurement or points of reference must be set. The

primary objective of human capital management therefore,

is to ensure the availability of a competent and willing

workforce to an organisation. Beyond this, there are other



objectives too. Specifically, human capital management

objectives are four fold societal, organisational,

functional and personal. (Aswathappa, 2005:8). The

implication of organisational objectives on human capital

planning and management is that the planners and

managers must plan and manage human capital in line with

organisational goals. No more, no less.

Whatever the size of an organisation and however the

human capital management functions and objectives are

structured and located, there will be a need to communicate

to employees their terms and conditions of employment

and operations. These employment guidelines are usually

reflected in human capital policies. Shehzad (2007:3)

opined that polices are general statements that serve to

guide decision making. Armstrong (2004:129) gave a

more detailed definition of policies as he believed that they

are continuing guidelines on the approach an organisation

intends to adopt in managing its people. According to him,

they define the philosophies and values of an organisation

on how people should be treated, and from these are

derived the principles upon which managers are expected

to act when dealing with human capital matters.

Organisational policies therefore serve as reference points

when human resource management practices are being

developed, and when decisions are being made about

people. They help to define the way things are done. It is

clear that organisational objectives, policies and principles

exert pressure on the human capital planning and

management.

RESULTS

The questionnaire was distributed to 385 middle level staff

of the five selected organisations and 349 copies

representing 92% were completed and returned as shown

in Table 1.2

Table 1.2 Breakdown of Sample size According to Organisations

Organisation Sample Size

National Directorate of Employment (NDE) 64

Power Holding Company of Nigeria (PHCN) 116

Plateau State Water Board (PSWB) 14

Federal Ministry of Finance (FMF) 79

Nigerian National Petroleum Corporation (NNPC) 112

Overall Sample Size 385

Source: Field Survey, 2011

The study set out to provide the necessary lead for

empirical examination of the impact of environmental

forces in the management and planning of human capital.

Specifically, it tried to assess the impact of political;

traditional and military rulers; globalization; economic

meltdown; technological changes; and corporate strategic

planning on human capital planning and management.

For these reasons, the following hypotheses were

formulated:

1) Hypothesis 1: Political, traditional and military leaders'

influences have no significant impact on human capital

planning and management.

The implication of organisational objectives on human capital

planning and management is that the planners and managers must

plan and manage human capital in line with organisational goals.

No more, no less.



Table 1.3 - Opinion of Respondents on the Impact of Political, Traditional and Military Influence on

Human Capital Planning and Management.

Q/

NO

QUESTIONNAIRE

STATEMENT

RESPONSE FREQU-

ENCY

%

Q1

Q2

Q3

Political practices and influence

affects human capital planning

and management in my

organisation.

Traditional rulers influence (also

known as godfatherism) do

compel my organisation to

employ the wrong type and

number of workers.

The military personnel do

compel my organisation to

employ the wrong type and

number of workers and this is

sometimes done even when

such vacancies do not exist

Agreement category

Disagreement

category

Undecided

Agreement category

Disagreement

category

Undecided

Agreement category

Disagreement

category

Undecided

306

23

20

212

92

45

212

92

45

87.7

6.6

5.7

100%

60.8

26.3

12.9

100%

60.8

26.3

12.9

100%

Source: Field Survey, 2012

Table 1.3 showed that 87.7% of the total respondents

agreed that political influences affect human capital

planning and management. About 6.6% thought

otherwise while 5.7% was undecided on the question

posed. Also, 60.8% of the total respondents agreed that

traditional rulers do compel their organisations to recruit

the wrong type and number of workers, whereas 26.3%

thought otherwise while 12.9% were undecided on the

question posed. Lastly, on the question of whether or not

military personnel do compel organisations to employ the

wrong type and number of employees even when such

vacancies do not exist, 60.8% of the total respondents

agreed while 26.3% disagreed. About 12.9% were

undecided on the question posed.

The Kruskal-Wallis one-way analysis of variance by ranks

named after William Kruskal and W. Allen Wallis was used.

It is a non-parametric method for testing equality of

population medians among groups. It is identical to a one-

way analysis of variance with the data replaced by their

ranks. It is an extension of the Mann-Whitney U test to 3 or

more groups (Kruskal et al, 1952: 583-621). The test

statistic is given by:

K =12

N(N + 1)

g

i=1

g

2

2

12

N(N + 1)=

_r i.

_ N + 1ni

i=1

ni_r

2

i. 3(N + 1)_

where: n is the number of observations in group i ;r is the i ij

rank (among all observations) of observation j from group

I; N is the total number of observations across all groups

and is the average of all the r . ij

However, the Kruskal-Wallis computer-statistical package

for social sciences (SPSS)-16.O version was used to test the

impact of political, traditional and military; globalization,

economic conditions and technologica

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NIM Journal Dec2013