MDAS AND COST OF GOVERNANCE

It’s time to eliminate waste in the public sector

At a policy dialogue organised by the Independent Corrupt Practices Commission (ICPC) last week, the Minister of Finance, Budget and National Planning, Zainab Ahmed, requested the assistance of the anti-graft body in slashing the cost of governance in the public sector. Ahmed said she will work with other relevant agencies of government to cut down on unnecessary expenditures so that limited resources can be used for important projects. The ICPC Chairman, Bolaji Owasanoye, said that the high cost of governance was fuelled partially by corruption, incompetence and waste in governance structure and processes.

The worrying cost of governance despite dwindling revenue, particularly under the present administration, was graphically laid out by the Director-General of the Budget Office, Mr. Ben Akabueze. The nation spends more than it generates to sustain civil servants and public officials. Akabueze said the cost of governance rose sharply from N3.61 trillion in 2015 to N5.26trn in 2018 and N7.91trn in 2020. Personnel costs alone accounted for 40 per cent of recurrent spending in 2020. In 2016, personnel cost was N1.88 trillion, but now over N3 trillion. “Recurrent spending accounted for more than 75 per cent of actual MDA expenditures between 2011 and 2020”, said Akabueze. “There have been persistent calls for reduction of governance cost in Nigeria in view of the impact on governmental fiscal situation. The current system is clearly unsustainable.”

Nigeria is currently indebted to the tune of N31 trillion and still on the borrowing binge. But the cost of servicing the loans is taking a huge toll on the economy. Unfortunately, the high cost of governance was partly triggered by lack of planning. The creation of five new ministries in President Muhammadu Buhari’s second term raised hugely the size of recurrent expenditure to the detriment of capital expenditure in annual national budgets. Besides, the MDAs are bloated. Government has continued to pay lip service to the Steve Oronsaye Report which recommended the merger of departments and agencies to avoid unnecessary duplication.

Earlier in the month, BudgIT, a civic organisation which advocates transparency and accountability, disclosed that its investigations into the 2021 budget revealed at least 316 duplicated capital projects worth N39.5 billion. One hundred and fifteen of such capital projects occurred in the Federal Ministry of Health. Besides, BudgIT said that some MDAs received allocations for capital projects they could not execute. For instance, the Federal College of Forestry in Ibadan in Oyo State reportedly got N50 million for the construction of streetlights in Edo State. The audit report for 2016 recently released by the Office of the Auditor General for the Federation is very instructive. The number of government agencies that have failed to subject themselves to scrutiny under the present administration has doubled.

We are worried that while government revenue continues to dwindle, there is no conscious effort to cut down expenditure on the recurrent side either by the federal government or by the states. In the states, governors are still living large, appointing hundreds of special assistants with no specific job functions. It is unacceptable that amid a debilitating revenue squeeze, governments at all levels have continued to revel in financial recklessness. Why should the Federal Executive Council (FEC) continue to preside over the award of contracts when the Bureau of Public Procurement (BPP) Board should have been constituted to play its statutory role?

Last week, Ahmed harped on the need to cut down on unnecessary expenditures. But at a period when the high cost of governance is forcing the government to borrow money to finance budget deficits, we need more than the usual preachments. It is time to trim waste and eliminate corruption in the public sector.