The President, Major General Muhammadu Buhari (retd.)
THE cost of maintaining politicians and public officials often irritates a sore spot among the public. Vice-President Yemi Osinbajo recently re-ignited the national discourse on the debilitating cost of governance in Nigeria and the challenge of development. Rightly admitting that the current structure promotes consumption and deprives the citizenry of the benefits of human progress, his suggestion of a national debate demands an immediate response as the country is battling to save an economy sent spiralling by the coronavirus and facing the worst ever recession in decades. To save the economy, reduce poverty and support millions of jobless Nigerians, Abuja and the states need to go beyond occasional lamentations and end the dangerous public finance heist.
Experts say public finance and public administration are at the heart of development. If development is about transforming state, society and economy, having capable institutions able to raise, deploy and account for effective use of public funds is indispensable. But the national and international consensus that the country runs an unsustainable governance structure has reached a crescendo. The dysfunction starkly confronts leaders at the federal, state and local governments, who are transfixed in place despite the country visibly crumbling all around them, with poverty, bankruptcy, debt, insecurity, joblessness, decrepit infrastructure and a broken political system.
Osinbajo’s comments at a webinar suggest that the regime of Major General Muhammadu Buhari (retd.) believes itself helpless to implement the drastic reforms necessary to overturn the present system that drains over 70 per cent of all spending for salaries and overheads, leaving a pittance for infrastructure. Here, the 36 states and 774 LGs are mere unproductive cost centres, and the executive and legislature are parasitic.
All stakeholders must however face the harsh truth that Nigeria is poor. The hype of having Africa’s largest economy is misleading given its 200 million-strong population. Development experts have shifted the focus of governance from mere economic growth to that of promoting human development anchored on democracy and its ability to promote the optimum good of the overwhelming majority. The country does not come near the five top African countries in GDP per capita or on the UN’s human development index. It is rated one of the worst governed countries based on the Mo Ibrahim Index of African Governance, scoring 45.8 per cent as against the African average of 51.5 per cent and ranked 37th out of 52 in the overall governance scale.
Revising its previous forecast of the economy shrinking this year by 3.4 per cent to 5.4 per cent, the International Monetary Fund has again warned Abuja to reform. Buhari’s cost-saving measures, eliminating “ghost” workers from the payroll, a plan to reduce the number of ministries, departments and agencies, curtailment of travel by ministers and officials – are too tame and rather late for a government that rode to power five years ago promising change. When Buhari got into office, he simply kicked the can down the road. A former Governor of the Central Bank of Nigeria, Lamido Sanusi, was more frank: the country is practically bankrupt, the inevitable outcome of a disarticulate system.
The path to reform may now be clear however as the reality appears to have finally penetrated the thick skins of lawmakers at the National Assembly too. The Senate President, Ahmed Lawan, the Speaker of the House of Representatives, Femi Gbajabiamila, and the Senate Majority Leader, Ali Ndume, have separately agreed on the urgency of cutting costs. Generally, experts refer to the cost of governance as the cost of running a government’s administration, its structure and includes recurrent and capital expenditure. According to the OECD, governance involves the use of political authority “and exercise of control in a society in relation to the management of its resources for social and economic development.” The ultimate objective, adds the World Bank Institute, is that through its institutions, governance and the cost must be for the common good, delivering public services and promoting economic wellbeing.
Deprivation subsists alongside opulence by a tiny minority. Apart from being one of the five countries that, combined, host the world’s poorest people (others being India, the DRC, Ethiopia and Bangladesh), the World Bank cites wide income inequality. The Nigerian conundrum is threefold: the preponderant bulk of public revenues service elected officials and the bureaucracy, leaving very little for infrastructure, social services and savings. Second, the federal constitutional arrangement is prohibitively expensive, creating enormous bureaucracy and costs that enrich a few at public expense. The basic law further renders the states poor and the centre overbearing. This requires uncommon resolve by the political class to begin the process of changing the constitution, a virtue they have not demonstrated so far.
The constitutional proviso that decrees every state having a minister is bad enough. Officials are also notoriously wasteful, selfish and bereft of a culture of public service. Just look at the figures: Oby Ezekwesili, a former Education Minister, alleged that between 2005 and 2013, the National Assembly appropriated over N1 trillion to itself. The revised 2020 N10.8 trillion budget allotted only N2.48 trillion to capital spending, a meagre 22.96 per cent, while recurrent and debt servicing had 70 per cent, and the Finance Ministry confirmed that 90 per cent of revenues in the first quarter went for debt servicing. Capital was earmarked N2.87 trillion and N2.03 trillion in 2018 and 2019 respectively compared to N5.52 trillion and N6.58 trillion for recurrent and debt servicing. This mismatch is replicated at the states and LGs with some states borrowing perpetually to pay salaries. Several owe a backlog of salaries and pensions.
While Nigeria (GDP $446.54 billion) inaugurated a 43-member cabinet in August last year, Australia’s (GDP $1.37 trillion) federal government has 19 cabinet level ministers though by law it can have up to 30. Brazil (GDP $1.84 trillion) listed 25 ministers including the president. Chancellor Angela Merkel runs Germany’s (GDP $3.86 trillion) federal government with 15 other ministers, while Canada (GDP $1.74 trillion) has 35 ministers, including Premier Justin Trudeau.
Rationality should guide governance. Yakubu Gowon as military head of state had a cabinet of 16 federal commissioners (ministers) in 1967. Jacob Esuene, military governor of old Cross River State (now CRS and Akwa Ibom states) had a 12-member cabinet, while old Benue-Plateau State (now Benue, Plateau Nasarawa states) under Joseph Gomwalk had 13 commissioners. Last December, Cross River inaugurated 39 commissioners; Akwa Ibom has 19, with similar excesses in all the states.
The way forward is first, to immediately cut costs drastically across the board. Leadership is crucial; the President, governors and lawmakers must lead by example, cutting their luxury lifestyles and large, unproductive bureaucracies. The Presidency should mobilise the entire country, especially legislators, behind the urgency of totally remaking the 1999 Constitution that by its centralising constraint, hamstrings and impoverishes the states as beggarly appendages to a wasteful centre. All options should be on the table, including fiscal federalism, state policing and radical devolution of power to the states. The debate needs to determine also the desirability or otherwise of continuing with the expensive presidential system or a return to parliamentary cabinet system acknowledged as far cheaper.
Ultimately, nothing will change unless the people reclaim sovereignty from the current predatory political class that has provided terribly poor leadership and mass poverty.
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