Dysfunctional at best, the Nigerian economy is groaning under the weight of excessive cost of governance. Essentially, a huge portion of the country’s resources is allocated to servicing a tiny fraction of the population who are public office holders. With little left for the provision of social infrastructure, the majority is entrenched in extreme poverty, which is why the acting Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission, Shettima Abba-Gana, has canvassed a methodical reduction in the cost of governance.
A government report by the Steve Oronsaye panel in 2012 stated that the cost of governance in Nigeria ranked among the highest in the world. In this regard, the guiltiest parties are the executive and legislative arms, although the judiciary is not blameless. The fad is for ministers (and their aides); senators, representatives, state lawmakers, commissioners, local government chairmen and other public officials to maintain expensive convoys and fly in private jets. This obscenity is in addition to the jumbo salaries and allowances they earn.
In 2018, Shehu Sani, a senator from Kaduna State, revealed that a senator received N13.5 million as “running cost” every month. This is outside of the N750,000 monthly salary, N200 million annually for constituency allowance and other undeclared allowances. A United Kingdom-based newspaper, The Economist, estimated that Nigerian lawmakers earned the highest remuneration in the world.
This remiss has cost the economy dearly in terms of the resources to fund productive activities, fuelling joblessness (23.1 per cent as of Q3 2018), pervasive crime and boundless misery. For infrastructure, the African Development Bank, in 2018, put the deficit at $3 trillion. The insensate template is replicated at the state level, where there are 36 of such governments and 774 LGs.
After serving out their tenure, governors obnoxiously receive mega pensions – for life. About four years ago, a state awarded N200 million in annual pension to each of its ex-governors. It is laughable because these governors served their states for just eight years – or less. It is daylight robbery of the public till. Ludicrously, these governors earned top rates while in office and used chartered/private jets, although their citizens live in penury. In contrast, the British Prime Minister and Queen Elizabeth II travel in commercial aircraft for their assignments.
At a time of decreasing national revenue, it is an absurdity. Collectively, the 36 states and the Federal Capital Territory witnessed a negative growth of 5.08 per cent internally generated revenue in third quarter 2018, the National Bureau of Statistics says. Likewise, external revenue has dropped since oil prices crashed in the international market in mid-2014. Surprisingly, none of these has moved those in government to review their opulent lifestyle.
The National Assembly aside, the executive arm of the government basks in luxury at the expense of the overall development of the economy. Abba-Gana laments that the incumbent Buhari administration – like its predecessors – has failed to reduce the large bureaucracy. He cited the appointment of the maximum number of cabinet ministers, which entails a retinue of aides, official cars and other perks; extravagant expenditures; corruption and humongous severance allowances as the obvious burden for review. Additionally, there is the issue of multiple salaries: some serving senators and ministers were state governors a little while ago.
The effort to review the bloated number of Ministries, Departments and Agencies at the federal level has suffered undue delay since the 1990s when government inaugurated the Allison Ayida committee to recommend the way forward. In 2012, the Oronsaye panel recommended the scrapping of 102 statutory agencies (because they are duplications), and the merger of 42 other MDAs.
With the economy still fragile, whoever wins the presidential election should get serious and scientifically implement the recommendations of the Oronsaye panel on the MDAs, which numbered 541 in 2012. Positively, in 2014, the Federal Government saved N118 billion from its wage bill after detecting 45,000 ‘ghost’ workers in the Civil Service. In 2016, then Minister of Finance, Kemi Adeosun, stated that government further reduced its monthly wage bill from N166 billion to N142 billion after discovering 33,000 ghost workers. This menace does not have a place in a scientifically run civil service system. President Muhammadu Buhari just revealed that his government saved $550 million from identifying phantom employees. This is not enough. The officials involved should be duly prosecuted.
Government should thoroughly clean up the system with a complete upgrade of the Integrated Payroll and Personnel Information System, the Bank Verification Number and other instruments. In the days ahead, state governments will face more pressure on their wage bills because of the negotiations to increase the minimum wage from N18,000 to at least N27,000. This should ginger them to implement similar schemes.
Before the 1999 Constitution is amended to deal with some of these issues, the President should creatively summon the courage to limit the size of the cabinet. The United States, the world’s largest economy, with a GDP of $19.39 trillion and a population of 325 million, has only 16 cabinet positions. Conversely, Nigeria, with a GDP of $375.8 billion, has 42 cabinet positions.
The issue of jumbo pay in the National Assembly has to be addressed. A vote of N139 billion for the National Assembly in the 2018 Appropriation Act, for instance, is excessive at a time of deep-seated poverty. By all standards, Nigeria is a poor country and it is abnormal for legislators to be earning obscene allowances. The implementation of the Treasury Single Account should be intensified to stop public funds going into private pockets.