Dwindling National Income and the Pressing Need to Reduce Cost of Governance

The agitation for a drastic reduction in the cost of governance is gaining traction in the country’s political circles. With Nigeria currently facing the challenges of dwindling revenue, the need to cut costs to stabilize the polity keeps propping up at different fora.

Recently, Plateau State’s Governor, Simon Bako Lalong, who was Guest speaker at this year’s Arewa House Annual Lecture, delivered a lecture on “Reduction of the Cost of Governance for Inclusive Growth and Development in Northern Nigeria in a Post-COVID-19 era.”

Lalong spoke extensively on the need for governors, especially those in the North, to reduce cost of governance if current security challenges and youth unemployment must be mitigated in the region.

According to Lalong, this could be carried out by keying into e-governance at all levels, and reducing the size of civil service and political offices.

In the same vein, an international human rights organisation, ActionAid Nigeria said the Federal Government should close all leakages along the revenue collection value chain and reduce the cost of governance.

While demanding that government expedite action towards the process of diversifying the economy, the organisation said blocking the leakages became necessary to reduce Nigeria’s debt profile.

In Nigeria, the cost of governance over the years has been very high and alarming and therefore unsustainable as recurrent expenditure continues to significantly exceed capital expenditure. This problem has continued to generate public concern and national discourse because of the negative implication on investment, industrial expansion, infrastructural development, and growth.

Whereas recurrent expenditure is government spending on overhead and personnel costs, capital expenditure on the other hand is government spending in providing infrastructural facilities.

All over the world, many developing countries are making concerted efforts at reducing the cost of governance in order to conserve funds for infrastructural development that would impact positively on the lives of the citizens.

For instance, India introduced e-governance at various levels of administration in the country to drastically reduce the cost of running its government. Other countries like Ethiopia, Thailand, Kenya, Ghana, Rwanda, etc. have equally resorted to reduction in the number of political appointees involved in the act of administration thereby making the government efficient in the management of its scarce resources.

Last year, President Muhammadu Buhari, approved the implementation of the report of the Rationalisation and Restructuring of Federal Government Parastatals, Commissions and Agencies, commonly referred to as the Oronsaye Committee, which recommended the merger, conversion and scrapping of many agencies.

The committee, inaugurated by former president Goodluck Jonathan in 2011, recommended the scrapping of 102 Federal Government statutory agencies from the present 263, the abolition of 38 agencies, merger of 52 and reversion of 14 to mere departments in some ministries.

Also, the Revenue Mobilisation Allocation and Fiscal Commission has been at the forefront of calls for reduction in the day-to-day government expenditure. Through seminars and workshops, the Commission has continued to proffer useful suggestions/recommendations to governments at all levels on the need to scale down on unnecessary expenditure and to monitor expenses on developmental projects that would impact positively on the lives of the citizenry.

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On his part, Gbajabiamila, while speaking with revenue agencies at the commencement of Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) revenue considerations, organised by the House Committee on Finance in Abuja, noted:

“We have a responsibility to act with urgent determination to build the infrastructure of opportunity that is required to lift millions of our fellow citizens out of poverty.

“We recognise that we cannot accomplish these objectives using loans and outside financing alone. Therefore, we need to impose deep cuts in the cost of governance and improve internal revenue generation and collection so that we can free up resources that can then be deployed to fund policy initiatives that will enhance the lives of our people.”

The Governor of Sokoto State, Hon. Aminu Tambuwal, equally said that cutting down the cost of governance in Nigeria which is the clamor of youths, civil society groups and concerned citizens should take a holistic approach in execution.

He agreed that it was the right step to take but must be done methodically and strategically, to avoid adverse effects on the nation’s economy.

He said that it is not only for the National Assembly but the executive arm of government, especially critical government parastatals like the Central Bank of Nigeria, Nigeria National Petroleum Corporation, and the Federal Inland Revenue Service (FIRS).

For the former President of Aka Ikenga, an association of Igbo professionals, Chief Goddy Uwazurike, he noted that urgent steps must be taken towards reducing the number of Federal government agencies and paratatals.

He said: “I participated in the 2014 national conference and we seriously discussed the issue. We analysed it because we had civil servants both serving and retired; we had politicians and all kinds of people. One of the things we analysed was that one minister you appoint may have up to 10 cars, 10 drivers, 10 special assistants, about five personal assistants or even more. Every special assistant also has a special assistant; every special adviser has an executive assistant and also has a retinue of officials and cars.

In its 2020 ‘State of the States’ Report, BudgIT highlighted the fact that 11 states namely; Adamawa , Bauchi , Bayelsa, Benue, Ekiti, Kano, Kogi, Kwara, Nassarawa Plateau, and Taraba had their overhead costs higher than their capital expenditure.

For any society to make meaningful progress there ought to be a competent and cost effective management system that is capable of maximizing her scarce resources to the benefit of all. The cost of running government in Nigeria at all levels has been on the increase over the years to the extent that stakeholders are worried about the problem and are seeking ways to address the anomaly which is posing fundamental threat to the nation’s development.

The essence of efficiency in governance is to ensure that public fund is spent judiciously. In other words, every kobo must be fully accounted for and spent for the welfare of the masses. One way to achieve this is through the deployment of e-accounting and e-auditing system in public finance in order to guard against unauthorised and wasteful spending.

Godwin Anyebe

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