Slicing the Fat from Our Pot Bellies (I)

BY ALEX OTTI (OUTSIDE THE BOX)

“The more leeches there are affixed to a host, the less resources there are to siphon from said hosts, per parasite. The ability to only absorb energy, without the ability or desire to reproduce it in a productive manner, is a dangerous, unsustainable, albeit attractive long term method of collapse and decline.” Justin K. McFarlane Beau

For some time now, the financially literate ones amongst us have been drawing our attention to the danger that the badly structured nature of our economy portends for the country. One area that has continued to worry analysts most is the fact that we seem to be stuck in a situation where perennially, we dedicate over 70% of our budget to recurrent expenditure while less than 30% gets allocated to capital expenditure. While the argument over expenditure mix rages, the revenue debate has assumed centre stage. Like we had stated in our previous interventions in the past few years, we have only been able to achieve about half of our annual revenue targets of our annual budgets. In situations where the budgets make provisions for deficits like has been the case in the last five years, it simply means that the realisable revenues are less than fifty percent of the targets, in real terms.

Since the total revenue for any specific period is finite, we dare contend that expenditure should be made subject to revenue. As revenue expands, expenditure can be allowed to increase in accordance with Parkinson’s law which states that ‘expenditure will always rise to meet income’. To achieve the required cost containment aspirations, things must be done differently. Some drastic, sometimes even difficult, and painful measures must be taken. Of course, the other option is to allow natural events eventually force the changes. Both options would work, ultimately, even though the outcomes may be different. While voluntary change will ensure that there is a planned order based on the realities of the situation, the involuntary option will be a solution that arises out of the ashes of a crisis and the natural law of decay and degeneracy. This option would sure engender even more crises and oftentimes, would be catastrophic. We believe that it is imperative to explore the voluntary option and have a controlled, predictable, and desired outcome in the face of dwindling resources. This essay shall explore how to realistically manage ourselves in the face of dwindling resources and still come out looking good. We are going to focus on the federal tier of government and expect that the other two tiers – state and local governments – can benefit and learn from the Federal Government. Today, we shall be looking specifically at the Executive and subsequently, we shall beam our searchlight on the Legislature and Judiciary.

It is doubtful if there is any debate about the fact that we have a very wasteful and expensive executive branch of the Federal government. People have argued that democracy the world over, is a very expensive form of government. While we do not disagree, we make bold to say that our own brand of democracy is numerous times more expensive than those of the people from whom we copied it.

We shall prove this fact in the course of this piece. Suffice it to say, however, that in the past, various federal government administrations had made reasonable attempts to rationalise government agencies ostensibly to bring down cost of governance. The Allison Ayida Committee of 1995, was one of the recent attempts to reorganise the executive arm of the federal government. This therefore, shows that this issue of executive profligacy predates the fourth republic. One of the main arguments made by the Ayida report was that Ministers should not act as Chairmen of government owned agencies, which it also recommended should be pruned down. Subsequently, entered the Ahmed Joda Committee of 1999, which, amongst other issues, contended that “ministerial interference and bureaucratic control needed to be eliminated to strengthen public service delivery. This committee had very strong words against the incompetence in government parastatals and boards. It also came down very hard on the sheer size of the boards of parastatals which, according to it, is a complete waste of resources of government.

The most recent but more comprehensive effort on the issue of streamlining government agencies and cutting down on cost of governance, is the Oronsaye report. This report recommended the pruning down of statutory agencies of government, from the current number of 263 to 161, that is a reduction of close to 40%. This report, which was submitted to the immediate past President, Goodluck Jonathan, an 800 page document, which took months to prepare, seemed to be gathering dust in a government shelf somewhere, until very recently. The report states that the average cost of governance in Nigeria is amongst the highest in the world. The Oronsaye report also recommended that professional bodies/councils should be removed from the National budget and most importantly, that the National Budget should be linked to deliverables and performance. In addition, the report exposed the duplication of roles in government. Membership of governing boards, council of government agencies, parastatals and commissions are so many when there is no need for such large numbers, the report further exposed.

Therefore, it is evident that our problem is not lack of ideas or not knowing what to do. On the contrary, we have had more than enough ideas about what to do. We had also made attempts to articulate them in a working document, available to any interested government or official to see. The sad reality is that we stop short after the point of expression of intentions. Many of the reports have not progressed to the stage where white papers are issued on them and even if they were issued, the will to implement them has always been missing. Departing from the norm, the Minister of Finance recently announced government’s preparedness to implement the Oronsaye report as a way of saving money to finance the deficit in the budget. We think this is good news and better late than never. Even then, we are still waiting and we cannot say at this time, how far the government intends to go.

Departing from government agencies, let us now focus on other parts of the executive arm, starting from the Presidency itself. While one may not claim to be an expert in this area, there is no doubt that the Presidency gulps a large chunk of our annual revenue. All sorts of agencies and positions hide under this big monster, ‘The Presidency’. There is a retinue of aides, ranging from Special Advisers to Senior Special Assistants to Special Assistants to both the President, Vice President, and other senior government officials. In the spirit of cutting down on cost of governance, can we not also ask that we cut the Presidency down by about 40%, using the same logic introduced by the Oronsaye report? This could be implemented across board and should include the Presidential fleet, more so, since traveling may not be a very frequent phenomenon any time soon.

Let us now turn to the Cabinet. Presently, we have 43 ministers each with its retinue of aides and special assistants. Even in stable times this is not only unwieldy and inefficient, but very expensive. Do we really need that number or are we simply pandering to what the Americans call ‘pork barrel politics’? Is this not just a very shameless way of finding work and relevance ‘for the boys’? The constitution recommends that there should be a minister per state. Some of us believe that that part of our constitution should be amended quickly. Is it not possible to cut this number by the same 40%, wind up with no more than 17 ministers and still run these ministries efficiently?

When one compares our numbers with those of the US and other leading democracies across the world, one would notice that we didn’t copy well at all. The US has 15 Secretaries (Ministers) as members of Cabinet and it has 50 States. The United Kingdom has just 21 ministers. Interestingly, in the UK, Cabinet Ministers are also members of Parliament, House Of Lords and House of Commons. 5 more members of Parliament are ‘in attendance’ at cabinet meetings. India, with a population approaching 1.4 billion people, has only 19 ministers in her cabinet and presided over by the Prime Minister. Even though there are several other assistants or deputies, they are not members of Cabinet. Germany also has 15 cabinet ministers and just literally at our backyard, Ghana’s constitution allows for a minimum of 10 cabinet ministers and a maximum of 19. What all these numbers show us is that we can afford to run our federal executive arm of government efficiently with the recommended 17 or even 15 ministers. Bear in mind that some of the countries we highlighted here are unitary governments while in our case we still have these roles replicated in the 36 states by commissioners.

There is no doubt that some people would be thumping the unemployment card at us on this rationalisation recommendation. The truth is that there is no way a reorganisation of this nature would happen without people losing their jobs. It is also true that government’s role is not to be the biggest employer of labour. Even with the best of intentions, government does not have the capacity to maintain many people on its payroll. This process is called ‘Creative destruction’ in that it leads to destruction that will engender growth and development in the long run.

Government would subsequently focus on its proper role of creating the enabling environment for a strong and virile private sector driven economy that would create jobs for people. By releasing the funds used to run government and channeling same to building infrastructure in a massive manner, government would be able to reduce cost of doing business and help the private sector create jobs.

We contend that the advent of Covid -19 has made it impossible for us to continue doing things the way we had been in the last few years. It would take a long time for things to return to normalcy, that is if they will ever do. There are opportunities open to us in the emerging post-COVID-19 era. Evidently, oil has become a more endangered species. Nigeria has borrowed up to her neck given that she now owes close to $80 billion and still counting. We are using 60% of our revenue just to service our debt, leaving us with so precious little to do other things. We are clearly running a huge deficit budget and we are seriously in trouble. Desperate situations require desperate measures. We should throw every possible solution into the pot. Using a street expression, if we do not do something, something will “do” us.