In the midst of high unemployment rate in the country, the Federal Government has concluded plans to cut the cost of governance as a result of fallen revenue profile occasioned by COVID-19 pandemic.
The focus of the measures are to merge Ministries, Departments and Agencies (MDAs) and make them manageable and reduce recurrent expenditure
Zainab Ahmed, Minister of Finance, Budget and National Planning, who spoke at a policy dialogue on ‘corruption and cost of governance in Nigeria,’ organised by the Independent Corrupt Practice and other Related Offences Commission (ICPC), dropped this hint.
According to her, the measures are being put in place to reduce recurrent expenditure which is projected to gulp about 41.5 percent of the total provisions of N13.588 trillion in the 2021 budget, amounting to N5.64 trillion.
To realize this objective, she stated that President Muhammadu Buhari had asked the salaries and wages committee to review the payroll of public servants as well as consider the merger of some agencies.
Also the government is working to remove some unnecessary items from the budget as a move to cut the cost of governance, she stated.
The cost-saving measures that are being proposed are aimed at streamlining government expenditure with revenue.
She, therefore, urged all government agencies to come together to trim the cost amid the country’s dwindling revenue.
“Our budgets are filled year-in-year out with projects that we see over and over again and also projects that are not necessary.”
“Mr. President has directed that the salaries committee that I chair, work together with the head of service and other members of the committee to review the government payrolls in terms of stepping down on cost,” she added.
The Federal Government would also review the number of government agencies in terms of their mandates, adding that the government will consider merging two agencies with the same mandate.
Speaking also at the event, Ben Akabueze, in a paper titled: ‘Reducing the Cost of Governance in Nigeria, described the country’s current system of democratic governance as very expansive and expensive.
He said the constitutional provision that mandated the president to appoint a minister from at least each of the 36 states, should be amended to reduce the number of federal cabinet members.
He cited the large federal structure to be one of the drivers of the high cost of governance and engendering public outcry that government spending is largely on recurrent activities at the expense of capital projects.
Akabueze said the persistent call for the reduction of governance cost had continued to gain momentum in view of its impact on government fiscal situation.
He stated that the cost of governance is considerably cheaper in the United States from where Nigeria copied the presidential system of government.
According to him, the general cost of administration in the United States is less than 10 per cent of the total annual budgets while the United States, with a higher population than Nigeria, has only 15 secretaries and executive departments as against Nigeria, which has 27 ministers, 16 ministers of state and 27 ministries.
He suggested that there should be a constitutional amendment to pave the way for the restructuring of the country into six regions instead of the present 36 states structure.
He lamented that the federal government is maintaining 943 Ministries Departments and Agencies (MDAs) with many of them having duplicated functions.
There are 541 federal government-owned public corporations and enterprises. “We need to cut these in order to install efficiency in governance. Also, we have a bloated civil service. The current civil service structure and size is clearly unsustainable for Nigeria’s economy,” he said.
A comprehensive staff auditing and job available is imperative to determine the right size of the Federal Civil Service without having any adverse effect on the service. And to avoid duplication in the civil service, the staff rationalisation programme should be gradual,” he added.
Akabueze said the Federal Government’s recurrent spending accounted for more than 75 percent of the actual MDAs expenditure between 2011 and 2020, in addition to personnel cost which accounted for government significant spending.