Pruning Public Institutions for Efficiency, Fiscal Sustainability

The federal government must take the bull by the horns to expunge redundancy in the public service to institute a culture of meritocracy as well as achieve fiscal sustainability amidst current economic reality, James Emejo writes

Over the years, one of the key disturbing features of the country’s annual budget had been the disproportionate allocation between the recurrent and capital expenditure.

There had been concerns that one of the reasons for the slow pace of national and economic development especially infrastructure is not unconnected with the huge recurrent component of the budget which often far outweighed the capital vote.

The nation’s civil service is considered over-bloated with workers who don’t really add value to their respective organizations but yet benefitted from juicy remunerations.

Some appointments are often influenced by politicians who in the process settle for mediocrity over merit.
Even in public agencies that claim to be poorly funded and thereby unable to execute capital projects, the staff salaries and other remunerations are paid as and when due amidst redundancy.

It is further argued that the huge recurrent vote earmarked annually for public servants are sort of a jamboree because there is a major disparity in productivity.

Analysts are also of the view that at a period when the government is faced with fiscal challenges, it would not be wise to keep wasting money on staff salaries, some of whom do not add value to the economy.

As rightly attested to by several reports in the past and well as empirical evidence, some government agencies are manned by unskilled workforce, a condition attributed to the country’s tardiness towards meeting its developmental objectives.

There have been instances whereby some civil servants who rose to the rank of a directors are found wanting in their fields and directorate and yet fully remunerated till retirement.

Of particular concern is the enormous amount budgeted for payment of salaries and other benefits which do not translate to improved productivity. Oftentimes, people report to offices where there are no duties assigned to them year in, year out but get paid for doing nothing.

A staff in the Federal Ministry Agriculture and Rural Development once complained to this reporter that her talent was being wasted as she would normally report to office without having anything to do and her superiors never complained.
The inefficiencies in the public service abound in various shapes and forms.

Huge Recurrent Votes

It is interesting to point out that of the N17.12 trillion budget for 2022, the sum of N6.91 trillion is earmarked for recurrent expenditure largely payment of salaries. While N5.47 trillion is for capital expenditure. Even though the gap between recurrent and capital had been closed compared to the past years, budget implementation had remained a challenge as more monies go into payment of salaries than the execution of capital projects.

For political and economic reasons, no administration had been able to take drastic actions to sanitise the public workforce towards minimizing redundancy and establishing a culture of merit and key performance indicators. The KPIs established recently to gauge performance individuals had been more or less cosmetic and ineffectual.

Analysts believed that anyone who is paid a salary should be able to justify it through value addition to the organization.

A watershed?

However, in a development that could redefine public service and value addition if scaled-up across the board, the Agricultural Research Council of Nigeria (ARCN), the apex regulatory body for agricultural research institutions in the country, recently resolved to drastically slash the membership of boards of agricultural research institutes by about 89.41 per cent.

The move was in realization of the sheer waste of time and scarce resources without commensurate output, even as the research entities groan under the yoke of under-funding by the government.

It was further gathered that before the landmark purge, each of the 32 agricultural research agencies had 15 individuals on their respective boards, bringing the total to about 480 members.

This is in addition to the board membership of the ARCN, which had 30 individuals piloting the affairs of the council.
As a result of the excessive manpower, which is largely redundant, huge amounts of money were believed to be spent on their sitting allowances and other entitlements amidst funding gaps to these institutions.

Waste without value

However, troubled by the development, the ARCN under the leadership of Prof. Garba Sharubutu, had moved for the amendment of the council’s establishment Act to correct inherent anomalies as well as reposition the research agencies under its supervision towards living up to their primary mandates of ensuring food security among others.

After several attempts, the breakthrough finally came on October 8, 2021, when President Muhammadu Buhari signed the Agricultural Research Council of Nigeria (Amendment) Bill 2021 into law.

Among other things, the amendment is expected to aid the council in playing a crucial role in coordinating research efforts in the agricultural sector towards achieving food sufficiency and security in the country as well as help actualise the present administration’s efforts to diversify the economy.
The new law effectively altered the boards’ ineffectual numeric size, paving the way for proper repositioning of the institutes.

Essentially, the law has now reduced the number of board of the ARCN to about nine members made up of technocrats extension agents who will be able to drive the desired change, especially at a period when research institutions have been blamed for not doing enough to respond to the issues affecting food production.

Sharubutu, in an exclusive chat with THISDAY, also explained that the various research institutes have had their respective board membership reduced to only about three, amounting to 54 members across the country and consisting of highly technical individuals from the Manufacturers Association of Nigeria (MAN), and the All Farmers Association.
Commenting on the former structure, which he described as unsustainable.

The ARCN boss said, “These board members are expected to meet quarterly, and take a decision on the way forward. If you calculate that, you will know the humongous amount of money that is being spent; you may take it as welfare, you may take it as employment. But they are still eating deeply into the meager resources that are being budgeted for the purpose of research.

“It doesn’t happen anywhere in the world. Go to China, Brazil, Egypt, it doesn’t happen where you have a humongous number of people that are supposed to deliberate on policy issues.”

He insisted that one of the primary objectives of the amended law was to reduce the cost of running the agricultural research agencies.

Analysts’ perspectives

Meanwhile, analysts who spoke to THISDAY on the development said the government must rise to the occasion and reduce redundancy in the public workforce if the country must make any meaningful development.
They believed that reducing recurrent expenditure could boost the capital component as well as fast track development of critical infrastructure.

Managing Director/Chief Executive, Credent Investment Managers Limited, Mr. Ibrahim Shelleng, said the government must be ready to take some tough, unpopular decisions amidst the present fiscal challenges being faced by the country.

He said, “For a country that seeks to develop, we should be spending more on capital projects rather than recurrent but sadly this has been the case in the last few decades leading to an over-bloated expenditure on salaries and pensions.
“What is required is a leaner, more efficient but also adequately remunerated government with accountability and transparency. Currently, there are multiple duplicated roles, which make people less accountable and even create avenues for more corruption.

Shelleng added, “If the government is able to slash 50 per cent of its wage bill, it could potentially have about N2 trillion to N3 trillion annually to be reinvested in capital expenditure. Since 2016, on average only 48 per cent of the capital budget has been implemented. The effect of this is evident in our poorly performing economy.”

Also, Managing Director/Chief Executive, SD&D Capital Management Limited, Mr. Idakolo Gbolade, said the government should apply such drastic measures to most of the boards of MDAs that have not contributed anything significant to the growth of the agencies but are collecting taxpayers money as allowances whenever they sit.

He said as much as he didn’t agree on the slashing of the numbers of board members, yet agricultural research institutes remained the fulcrum on which the country’s agricultural revolution rest upon.

Gbolade said, “If this is applied the amount earmarked for salaries and allowances will reduce and such fund can be ploughed into capital projects that would have meaningful impact on the society.”

On his part, Associate Professor of Agricultural Economics at University of Port Harcourt, Anthony Onoja, however pointed out that “agricultural research institutes in the country are not the only institutions where board membership are over manned”.

He said, “Besides, the problem of the Nigerian agricultural institutes is not hugely about too many board members but rather a lack of proper funding and attention to the institutes.

“There is also a lack of synergy between the research institutes and the policymakers as well as private sectors. Nevertheless, if the reform is about reducing recurrent expenditure in public service governance, there is the need to extend the downsizing of board membership across all Federal institutions. What is good for the goose is good for the gander.”