Nigeria: Reducing the cost of governance

For the past 20 years, economists in Nigeria have raised alarm about the rising cost of governance. A typical national budget is characterized by a huge recurrent component, with huge overheads on travels and training. Another unnecessary contributor of the cost of governance is the constitution of massive cabinets. So many Ministers are appointed, and each Ministers appoints a retinue of Special Advisers, Senior Special Assistants, Special Assistants, Executive Assistants and the list goes on. Usually, these appointments are huge patronages to brothers, kinsmen, friends and loyalists.

In the February, 2023 general elections, all the Presidential candidates agreed in principle on the need to reduce the cost of governance. Ironically, when Tinubu assumed office as President, most Nigerians were shocked that he constituted a 48-man cabinet. This is amidst critical economic challenges of huge budget deficits, over-optimistic budgetary spending and unrealistic revenue projections.

President Tinubu came into office and embarked on two policies, which may have long-term benefits. These are the removal of subsidy on petroleum products and devaluation of the currency. These two policies have conspired to increase the cost of living, unemployment, excruciating hardship, hunger and poverty. Granted that the Nigeria's economy was bastardized by the Buhari administration, the past 8 months are like hell on earth. The forex regime has run amok, with a dollar exchanging for N1.500.00 naira. What has caused serious concern is the fact that the Tinubu administration does not seem to have any clear direction to put the economy on the pedestal of accelerated development.

Realizing the sense of despondency in the country organized Labour is pressing for a new minimum wage, which will further increase the misery index in the country. The most depressing is that more than 75%of the 2024 national budget is based on anticipated borrowings from China, the IMF and other external financial institutions. It is obvious that if stringent measures are not taken to instill fiscal discipline, Nigeria may be in for a creeping economic recession that is capable of undermining the credibility of the budget itself.

One area Tinubu seems to be doing well is the area of anti corruption crusade. Even in this crusade, nothing extraordinary has been achievements. Successive administrations also started that way. Nigerians hope that the anti-graft crusade will be sustained in the years ahead.

It is stating the obvious that the Tinubu administration so far has worsened the conditions of living of the average Nigerian. Not only has he constituted a huge patronage network. In Nigeria, we operate a street-beggar economy based on borrowing. For the past 8 months, more than 12 manufacturing companies have left Nigeria because of the unfavourable investment landscape. The Ease of Doing Business is at its nadir. Now, Foreign Direct Investment is non-existent.

One terrible mistake of Tinubunomics is the distribution of the monies realized from the subsidy to State Governors. It is a known fact that most of the Governors even divert statutory allocations to them. The huge statutory allocations to the States have not yielded any corresponding development. State Governors worsen the the level of poverty, hunger and deprivation.

For the average Nigeria, Tinubu has worsened the harsh economic conditions of the country. If the Tinubu Presidency is serious about mitigating the hardship faced by the people, it is the expectation of the people that pro-poor policies would be formulated to meet the immediate and intermediate needs of the people.

Tinubu should adopt a multi-level approach in fighting poverty in Nigeria. Instead of embarking on social investment Programmes that puts money in to the pockets of Ministers and their conspirators, government should embark of deficit financing by constructing roads, public buildings and Dams to create jobs opportunities for the youths and at the same time put in place infrastructure that will support manufacturing and industrialization.

Nigeria is fast becoming a liability to Africa and an example of a country where poverty and corrupt combine to undermine development. This is the sad reality of the Nigerian situation.