Cost Of Governance: Budget Office Advises FG To Restructure Nigeria

Budget Office of the Federation has called on the Federal Government to restructure Nigeria into six regions.

EKO HOT BLOG reports that the Budget office that made the call, stated that the restructuring is pivotal to reducing the high cost of governance.

It noted that the number of ministers also needs to be pruned and the number of political office holders and their aides reduced, lamenting that the huge recurrent expenditure had constrained the provision of good roads, steady power supply, health care services, quality education and quality shelter etc.

This, it said, had contributed to observable underperformance of the economy, slow growth and current infrastructural challenges.

These recommendations were contained in a report by the Independent Corrupt Practices and Other Related Offences Commission at its Third National Summit on diminishing corruption in the public sector, held at the State House Conference Centre, Abuja on Tuesday.

The event, with the theme, ‘Corruption and cost of governance: New imperatives for fiscal transparency’, was attended by President General Muhammadu Buhari; the Chief Justice of Nigeria, Tanko Mohammed; the Secretary to the Government of the Federation, Boss Mustapha; the Minister of Finance, Budget and National Planning, Zainab Ahmed and the Chairman of ICPC, Prof Bolaji Owasanoye (SAN), among others.

The ICPC report referenced the Budget Office as blaming the high cost of governance on bloated cabinet size, high cost of elections, corrupt budget practices, multiplicity of Ministries Departments and Agencies and high number of political office holders and their aides.

It said a direct result of the expensive governance structure was that less than 30 per cent of Federal Government’s resources were available to fund the much needed capital projects.

However, the Budget Office, according to the document, recommended that government should “prioritise completion of ongoing projects, restructure Nigeria into six regions and reduce the number of ministers, and build a more efficient civil service and conduct periodic staff audit.”

It added that “MDAs should consider government fiscal position in reviewing salaries, adopt a cost- effective electoral system and limit the number of aides of political office holders.”

While highlighting the drivers of the high cost of governance, the document quoted the Budget Office as saying that Nigeria has a large cabinet with 27 ministers, 16 ministers of state and 27 ministries, adding that MDAs raise their personnel cost by engaging in indiscriminate recruitment without clearance from the Budget Office.

Nigeria has about 934 MDAs with duplicated functions and 541 public corporations and enterprises.

It noted further that high cost of elections and resultant litigation contribute to the high cost of governance in Nigeria and that the current structure/size of the federal bureaucracy was clearly unsustainable for the size of the economy.

“The high number of political office holders and their aides also adds to the high cost of governance,” it added.

The Budget Office lamented that personnel cost for the past three years gulped N9.7tn, adding that cost of governance had generally been on the rise and personnel costs represent significant proportion of the spending.

According to the report, MDAs’ recurrent spending rose from N3.61tn in 2015 to N5.26tn in 2018 and N7.91tn in 2020. This excludes the costs of government-owned enterprises and transfers to the National Assembly and the National Judicial Council.

“Recurrent spending accounted for 40 per cent of actual recurrent spending in 2020 while overhead was just three per cent. Cost of governance has generally been on the rise and personnel costs represent a significant proportion of the spending,” it added.

The President, Vice President Yemi Osinbajo and several other leaders had repeatedly stated the need to reduce the cost of governance, but not much has been done to actualise it.

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