Nigeria’s High Cost of Governance Challenge: Any End in Sight?

By Blossom Chukwu

In Nigeria, the cost of governance over the years has been very high and therefore, unsustainable. This is as recurrent expenditure continues to significantly exceed capital expenditure. The problem has generated so much public concern and national discourse, because of the negative implications on investments, industrial expansion, infrastructural development and growth of the real sectors of the economy.

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), 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 and recommendations to Government at all levels, on the need to scale down on unnecessary expenditure and monitor expenses on developmental projects that would impact positively on the lives of the citizenry.

Cost of Governance, which is the cost incurred by the Government in the course of providing goods and services to the citizenry, may be divided into Recurrent and Capital expenditure. Whereas recurrent expenditure is Government spending on overhead and personnel costs, capital expenditure on the other hand, is Government spending on providing infrastructural facilities.

According to RMAFC, it is pertinent to note that when recurrent expenditure is substantially above capital expenditure, it would lead to reduction in the provision of infrastructure, fall in investments, reduction in the level of employment, etc. thus stagnating economic growth.

It is imperative to note that many developing countries all over the world, are making concerted efforts at reducing the cost of governance in order to conserve funds for infrastructural development. For instance, India introduced e-governance in administration, in order to reduce the cost of running its government. Other countries like Ethiopia, Thailand, Kenya, Ghana, Rwanda, etc, have further 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.

In line with reducing cost of Governance in Nigeria, a civil society organisation, “Human and Environmental Agenda” (HEDA), recently demanded a thorough, immediate and urgent investigation into the alleged N1bn Car gifts by the immediate-past Attorney General of the Federation and Minister of Justice, Abubakar Malami, to his supporters in Kebbi State while in office.

The anti-corruption group, in a petition to the Independent Corrupt Practices and other Related Offences Commission ICPC, also demanded Malami’s probe over several allegations of corruption and abuse of office levelled against him.

HEDA decried the lack of investigation by anti-corruption agencies into those allegations, which, according to a statement by the group, were conveyed by media reports and documentary evidence. The group alleged that such lack of investigation went “to the root of breakdown of law and order, and total disregard for the rule of law, while Mr Malami served as Minister of Justice.”

Still on the course of reducing cost of governance Nigeria, in a related development, the Senate recently debunked rumours that N70 billion has been allocated to the National Assembly from the N819 billion Supplementary Appropriation Act Bill, as palliatives. The Senate President emphasised that it is not a “gift” to Senators and House of Representatives members.

It said reports by a section of the media that the National Assembly members “padded” the bill in their favour, were “spurious, inaccurate and irreverent misinterpretations.” This followed the incident where President Bola Tinubu had on Thursday July 13, sought a review of the Bill, to enable him deploy N500 billion for palliative measures and the balance of N319 billion on other Federal Government needs.

The Senate passed the Bill the same day with the following as a breakdown of the N319 billion: N185 billion for rehabilitation of roads impacted by floods; N192 billion for fixing farmlands damaged by floods; N35 billion for National Judicial Commission (NJC); N10 billion for Federal Capital Territory projects and N70 billion for the National Assembly.

The Chairman, Senate Committee on Media and Public Affairs, Senator Yemi Adaramodu (APC – Ekiti South), said in a statement that the N70 billion was not meant for individual federal lawmakers, but for the “facelift” of the National Assembly. He said it was necessary for people to understand that Supplementary Appropriation Act Bill passages, are a part of the constitutional duties of the National Assembly.

Irrespective of the National Assembly’s defense as it seems, several Nigerians believe that it was one of the many instances where the National Assembly get more financial palliatives as various forms of allowances, including allocating huge sums for buying bullet proof cars among others. With the reasonable explanations given to the expense of the N70 billion, it is still general knowledge that beyond what is said, the action part is a far cry from what is communicated. Apart from this fact, the amount is also seen to be too high, at this time in governance where the Government is trying to stabilise its economic agenda for the nation.

Another aspect that is being considered in the quest to reduce cost of governance, is the fact that thousands of Pensioners are still complaining that their allowances have been withheld, and in some cases, not paid as at when due. It is noted that while thousands of retired civil servants who laboured for their States for 35 years wallow in abject penury and in some cases die without getting their pensions and other entitlements, former State Governors (since 1999), who spent a maximum of eight years in office, are allocated humongous pension allowances, after several of them allegedly leave their States’ coffers empty.

Former Governors who are now in public service are not exempted from these humongous pension allowances. For some of them, it is double portion. They collect all the emoluments due to them in their new offices, while still receiving huge sums as pension allowances from their States, some of which are unable to pay workers’ salaries for several months running.

Still in line with this, the Director-General of the Budget Office of the Federation, Nigeria, Mr Ben Akabueze, recently highlighted the crucial role of strong leadership and political will in addressing the nation’s escalating cost of governance. He described the unsustainable growth of recurrent expenditure in the annual budget at the expense of capital expenditure and critical sectors, as a major concern.

Akabueze urged political actors to disregard the consequences and make tough decisions and choices that would facilitate the country’s development. Speaking at a monthly seminar series in Ibadan, Oyo State, titled “Cost of Governance and Development in Nigeria,” Akabueze emphasised the need to take far-reaching decisions regarding the drivers of the cost of governance, including the transactional aspect of governance.

Akabueze acknowledged the readiness of President Bola Tinubu’s administration to make difficult choices, but drew attention to the indicators of the high cost of governance. According to Akabueze, “Unicameral legislature is one of the potent ways to address the high cost of governance in Nigeria. Unfortunately, the lawmakers who will pass a bill or legislation on it, are part of the arm of the political class contributing to the rising cost of governance.”

He further explained, “Oil wealth and the craze by some people to have a share of the national cake, fuels the cost of governance. He said “We are using 60 per cent of our revenue to service debt, and we are borrowing to pay salaries. The window to borrow is limited”.

With what has been shared, it is obvious that for any society to make meaningful progress, there ought to be a competent and cost effective management systems that is capable of maximising the nation’s resources for the benefit of all.  The essence of efficiency in governance is to ensure that public funds are spent judiciously. In other words, every kobo must be fully accounted for and spent judiciously for the welfare of the masses.

The RFMARC suggests some ways to achieve this which when deployed, will bring about a more accountable form of governance that does not promote waste. Some of the suggested ways include:

• The deployment of e-accounting and e-auditing system in public finance in order to guard against unauthorised and wasteful spending.
• Ministries, Departments and Agencies performing similar functions should be merged to avoid duplication of responsibilities, thus curtailing wastage.
• Personnel cost, which is a recurrent expenditure, should also be strictly monitored by ensuring that all MDAs are captured on the IPPIS platform.
• Enforcing the Monetisation Policy of Government: Government should discontinue provision of houses and vehicles to officers whose allowances are already monetised.
• Entrenching Rule of Law:  Where there is rule of law and reliable judicial system, there will be law and order, and foreign investment will tend to flow into the country. Furthermore, unnecessary litigation arising from issues relating to debts and liabilities due to circumvention of the rule of law, will be minimised or eliminated.
• There should be deliberate efforts by the Executive, Legislative and Judiciary to pursue and implement cost reduction policies. The right attitudes by Heads of Ministries, Departments and Agencies will have positive effects in the efficient and timely execution of budgets and projects.
• Government should conduct Personnel Audit and Manning Levels Periodically. This will eliminate ghost workers and reduce redundant staff in all tiers of Government.
• Budget Implementation: Budgets should be regarded as a binding document that should be religiously implemented. There should be strict discipline in the implementation of the budget.

With these suggestions implemented, it is expected that cost of governance can be effectively reduced in the current dispensation, thereby making more allowance for capital expenditures that will promote the development of the nation across all sectors. It is time to make this needed moves that goes beyond words, to cage the high rising cost of running Government in Nigeria.