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21.06.2019 Nigeria

Reducing The Cost Of Governance In Nigeria

Reducing The Cost Of Governance In Nigeria
LISTEN JUN 21, 2019

The world over, the Presidential system is believed to be the most expensive system of government. This is due largely to the fact that the system supports a robust governmental apparatus as against lean and efficient government as practiced in a parliamentary system.

With thirty-six States and the Federal Capital, seven hundred and seventy four Local Government Areas, Nigeria spends stupendous amount of money to run several layers of inefficiency.

Research findings conducted in Two thousand and ten showed that the cost of governance in Nigeria has greatly increased due to unnecessary increase in the number of government agencies, high number of Commissioners, Special Advisers, Special Assistants and Personal Assistants, huge pay of political office holders, payroll fraud as well as the “ghost workers syndrome”. Others are incessant foreign trips, existence of security vote and extra-budgetary expenditure. Interrogating the huge cost of governance has become imperative.

Many statesmen have advocated a drastic reduction in the cost of governance, which has characterized the Presidential system. They called on President Buhari to prune down the size of his cabinet as against what obtained under previous governments, describing the system as too expensive.

Nigeria is blessed with human and natural resources. Sadly, successive administrations have not applied the resources judiciously. Since Two thousand and ten, federal budgets have increased steadily yet because of the devaluation of the naira, standard of living does not keep pace with wage increases. This has automatically reduced the importance of the thirty thousand naira minimum wage.

Nigeria’s federalism is skewed, with lots of powers deposited at the Centre. This is because these States depend on life-support budgetary allocations from the Federation Account. These allocations are then drained down the black hole of recurrent expenditures. The depressing fact is that there are still clamours for the creation of more states and local governments.

In Nigeria, even the LGAs are cost centres because a great number of them are not productive. Again, the Federal Character principle which was introduced to ensure justice in the allocation of scarce values is being grossly abused. More often than not, representativeness not only undermine merit as the basis for institutional appointments, but it also generates unnecessary costs.

One factor that has increased the cost of governance is the multiplication of government agencies, which perform overlapping functions. The Nigerian State runs on the effectiveness of the Ministries, Departments and Agencies. These institutions have become a liability because of corruption and under-performance. There are so many MDAs, and the result is high level of redundancies in workforce and a workforce that is unproductive.

The second challenge is the incidentals on the primitive leveraging of the public sector for solving the problem of unemployment. When workers embark on strikes, most often collective bargaining agreement yields militancy in labour agitation totally outside of rational model of wage fixing or concessions to workers based on productivity.

In addition, the implication of the institutional multiplication has enthroned a practice whereby every federal agency irrespective of costs implication must have offices in all the states of the federation. This guzzles huge recurrent cost components of such administrative practices, and of course, recurrent expenditure is always bigger than the capital component in the federal government budget.

Recently, there have been serious arguments about the huge wages received by members of the National Assembly. So far, nothing has been done in this direction. While recurrent expenditure is huge money earmarked for capital projects is less than the expectation of the masses.

Pained by the heavy expenditure on the bureaucracy, the FGN instituted the Oronsaye Committee on the restructuring and rationalization of Federal Government agencies, parastatals and commissions. The Committee was instructed to meet the global socio-economic challenges which have rendered it inevitable for the Government to cut the cost of governance while ensuring accountability. Its ultimate objective is on how to empower the MDAs to do more for less, thereby jumpstarting a productivity trajectory which can transform the Nigerian socioeconomic profile. The implementation of the Oronsaye Committee leaves much to be desired.

So many people have proffered certain solutions on how to cut the cost of governance in Nigeria. It was recommended that government should abolish the sponsorship of pilgrimages undertaken by Muslims or Christians to any part of the world. The intent is that religion is more of a private matter and individuals who want to go on pilgrimages should fund it and not ask the government to use public resources to fund the project. Thus the establishment of Pilgrims Boards because it is a money guzzler people use as a conduit to siphon government resources.

There are several steps government can take to reduce the cost of governance. Executing wage freezes, scaling down on government services, and imposing strict fiscal measures are some potent measures to reduce the cost of governance.

Government can also seize the opportunity to reform tax administration in order to widening the tax net to enable government rake-in enormous resources.

States can also be tasked with the responsibility of generating thirty percent of their Internally Generated Revenue (IGR) used to run the recurrent component of expenditure. The adoption of an efficient tax regime also needs to be improved considerably. Most modern States deploy ICT for tax collection and this boosted the revenue profile of States. Others build markets and collect levies to increase Internally Generated Revenue.

Ostensibly, practicing true federalism whereby each State controls its resources will engender more productivity.

President Obasanjo really made a serious effort to tackle the problem by reducing federal staff and the cost of running the vast federal bureaucracy. The perks of civil servants were either monetized or reduced to bring down the cost of running the country.

The privatization strategy was more vigorously pursued through the hiving off of some public enterprises to the private sector. Some success was achieved in this regard, but the two successive administrations did very little to sustain the programme.

The most effective strategy for cutting the cost of governance is to operate an open government whereby financial transactions are made transparent. Recently, the media is awash with reports of the financial leakages in the Nigerian National petroleum Company. NNPC, and other subsidiaries in the oil and gas sector are a deficit to transparency.

Kaduna and Bayelsa States have shown the way by cutting the pays of political appointees. Whether other States will act in like manner is their own prerogative.

Certainly, in Nigeria’s presidential democracy, the sense of entitlement, low external investment, poor infrastructure, and absence of other necessaries have made governance very expensive. Nigeria’s budget funds layers of inefficiency hence recurrent expenditure gulps about seventy two percent while only twenty-eight percent is earmarked for capital expenditure.

A reduction of the cost of governance will also reduce the malaise of unemployment, insecurity, poverty and all the trappings of underdevelopment.

We cannot make progress with an over-bloated bureaucracy, a huge political patronage network, lack of industrialization and a crude oil mono-culture. Government at all levels must take drastic steps to reduce the humongous cost of governance. We should operate a lean government and maximize the efficiency of the private sector.

Nigeria’s federalism now stands with one leg and many people who do not understand the dynamics of democracy are clapping with one hand. It is high time the cost of governance is reduced so resources can deployed for the provision of effective service delivery to alleviate the plight of the down trodden.

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