Nigeria suffers from democratic overload. Governance expenses are hugely
disproportional to its _developmental_ strides and democracy dividends.
This is reflected in the high recurrent expenditure relative to the
capital expenditure at the federal, state and local government levels.
Since the return to civil rule in 1999, the share of recurrent
expenditure in federal budget have hovered slightly above 70 percent and
accounted for 78 percentage of 2018 federal revenue. It was not always
thus. Nigeria had relatively lean governance structures under first
civilian administration in the post-independence era as well as under
the military regimes, which were marked by conspicuous absence of
bloated parliamentary structures. Whilst military regimes are
aberrations and cannot serve as a useful model for assessing governance
costs, tackling the problem of high cost of governance requires a deep
understanding of its genesis.
The prevailing high cost of governance in Nigeria is attributable to
both _structural _and _operational factors_. The_ structural_ factors
include a pervasive mentality of “national cake” sharing; the
federalization of several standards, in particular as it relates to
payment of wages, salaries and pension entitlements; constitutional
principles mandating the application of federal character or ethnic
balance; the high level of pensions for some elected officers codified
into law; the huge number of institutions provided in the constitution
and several national legislations; the inability of most states to meet
their recurrent expenditures from internally generated revenue despite
federal government bailout; and the bourgeoning cost of campaign
financing – a sectoral expense poised to outpace public administrative
costs.
There is a myriad of _operationa_l factors in the high cost of
governance. One such operational factor, especially at the federal
level, is the large number of MDAs – ministries, departments,
agencies, many with overlapping mandates. Another important operational
factor is the huge expenditure arising from the opaque high salaries and
benefits for members of the national assembly. Comparatively,
Nigeria’s federal legislators earned more than their U.S., U.K.,
German, South African and Brazilian counterparts, as evidenced in _The
Economist_ in July, 2013 review of lawmakers’ pay in 29 countries.
Yet another major operational factor is the large size of the federal
cabinet coupled with an equally large number of advisers and special
assistants at the federal and state levels. In an effort to address
this issue at the federal level, the Transitional Committee led by Ahmed
Joda, which was appointed by then President-elect Buhari in March 2015,
recommended the reduction in the number of federal ministries from
twenty-eight to nineteen. But this proposal was not adopted.
Still another _operational_ factor is the significant duplication in the
establishment of institutions at the federal and state levels with
overlapping functions and with no unique added value at either level.
This can be attributed partly to the constitutional design of concurrent
list of items shared by the federal and state levels. Then, there is
the factor of inflating and splitting of contracts as well as padding
budgets as a means to siphon off public resources for private gain. This
practice represents huge opportunity cost to the socio-economic
development of Nigeria.
It’s no surprise that Nigeria’s “democracy has been described as
the most expensive in the world with minimal evidence in terms of
infrastructure development, poverty level and pace of general economic
growth.” The disconcerting paradox, is that despite the high cost
being expended on Nigeria’s governance, she has earned the dubious
distinction of being the poverty capital of the world. Indeed, fewer
Nigerians are rising above the consumption poverty line, and it’s most
unlikely that the newly introduced thirty thousand-naira minimum wage
will help in cracking that ceiling. Whereas GDP growth and rising
consumption are considered validating corollaries of high cost of
governance, experts warn that “making GDP growth and rising
consumption the central objective of public policy” amounts to
“self-undermining concept of prosperity”.
While the number of members of the national Assembly and States’
Houses of Assembly may not be easily reduced, their salaries and perks
can. This requires statesmanship and placing national interest above
vested interest personal privilege. Whereas section 147 (3) of the 1999
Constitution provides for appointing a minister from each state of the
36 states, it does not stipulate the number of ministries. The
constitution made no distinction between a Minister and Minister of
State: an 18-member cabinet can satisfy the constitutional requirement
by having a minister and minister of state appointed to each ministry.
Significant cost savings can also come from abolishing the
non-constitutional post of Chief of Staff in the presidency and the
Governors’ office, with consolidation of the functions around the
Secretary to the Government of the Federation and Secretary to the State
Government. This was the situation that prevailed during the first and
second civil administrations as well as in a brief period of the Umaru
Yar’Adua administration. The current number of advisers and senior
special assistants can also be reduced significantly both at the federal
and state levels, with much of their tasks consolidated into relevant
line ministries.
A thorough review of the current structure and functions of ministries,
departments, commissions and parastatals at the federal and state level
is required. At the federal level, such an effort has been made. This is
reflected in the findings of The _Presidential Committee on
Restructuring and Rationalising of Federal Governmental Parastatals,
Commissions and Agencies_. The failure to act on the recommendations of
this panel explains the persisting high cost of governance at the
federal level. Cognizant that constitutionally-created institutions will
be difficult to fold up or merge, the same cannot be said of governance
bodies created by decrees or executive fiat. What is needed is the
political will and commitment to implement the recommendations in that
report and initiate actions on other measures herein proposed. The
growing resort to borrowing to cover the cost of recurrent expenditure
and the increasing debt service burden are warning signals for the
political leadership at all levels to act fast to ensure that Nigeria
does not fall off the fiscal cliff and plunge into a debt peonage.
______
OTOBO is a Non-Resident Senior Expert at the Global Governance
Institute, Brussels.
OBAZE is a public policy expert and MD/CEO Selonnes Consult, Ltd. Awka.
Links:
——
[1] http://facebook.com/ChimaCChri