BusinessDay
Nigeria's leading finance and market intelligence news report.

Reduce high cost of governance, reflate the economy

Speaker, House of Representatives, Femi Gbajabiamila recently called for an end to the establishment of more government institutions to cut down cost of governance in the country. The Speaker made the call in his remarks to welcome members of the House from their 2020 Christmas and New Year holidays on Tuesday 9th February 2021. The statement by the Speaker is a welcome development and we call on the Federal and State governments to go a step further by drastically reducing the cost of governance in Nigeria and reflate the economy for optimum performance.

Indeed, the outbreak of the Coronavirus (COVID-19), high inflation, current economic recession and fluctuation in crude oil prices, corruption, poverty and other economic challenges have necessitated the need for cost cutting measures by all levels of government in the country.

In this regard, many developed and developing countries are making frantic efforts at reducing the cost of governance so as to conserve funds for infrastructural development that would impact positively on the lives of the citizens. For instance, India introduced e-governance in administration in order to reduce the cost of running its government. Other countries such as Ethiopia, Thailand, Kenya, Ghana, Rwanda, have further resorted to reduction in the number of political appointees involved in the act of administration in their country.

For many years, the cost of governance in Nigeria has been a vexed issue, which has continued to dominate socio-economic discourse. In a bid to overcome the challenges generated by this phenomenon, successive governments have harped on the need to address the issue with no tangible result.

In the African continent, Nigeria is rated one of the worst governed countries based on the Ibrahim Index of African Governance. In the report, Nigeria scored 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. The country scored lower than the regional average for West Africa, which stands at 52.2 percent and ranked 12th out of 15 in the region. While Nigeria got the damning rating by the IIAG, Mauritius is adjudged the best governed country in Africa, with 81.7 per cent, followed by Cape Verde, with 76.6 percent. Other countries that made it to the top of the list include Botswana, which is rated the third best governed country in the continent with 76.2 percent and South Africa which comes fourth with 73.3 percent. Ghana is rated 7th; Rwanda 11th; Benin Republic 18th; Egypt 26th; Mali 28th; Niger 29th; Liberia 31st; Cameroun 34th and Togo 36th; all ahead of the far more endowed Nigeria.

In the UNDP Human Development Index (HDI) ranking, Nigeria has not fared better such that today, over 70 percent of Nigerians live below the poverty line, infant/child and maternal mortality is still one of the highest in the world; more than 10.5 million children are out of school, unemployment rate is over 40 percent and life expectancy is about 52years.

This problem has severe consequences on investment, industrial expansion, infrastructural development and growth of the real sectors of the economy.

Even the World Bank and the International Monetary Fund (IMF) have always warned against over bloated bureaucracy. In the same vein, the Minister of Finance, Zainab Ahmed, recently blamed insufficient funds as a major challenge to the effective implementation of federal budgets.

Consequently, Nigeria’s present reality requires nothing short of a holistic reform of its governance structure, system and process. Such efforts must of necessity, begin with drastic reductions in personnel and overhead costs.

If we are to survive as a nation, we must turn this moment of profound crises into an opportunity to make the hard choices we have too long deferred but can no longer avoid.

As part of the cost cutting measures, Federal and State governments should reduce the size of their cabinets through amendment of the constitution and limit the number of advisers and assistants to political office holders, while bills pending before National and State assemblies seeking to set up new agencies of government should be rejected.

Lastly, the report of the Steve Orosonye Report should be revisited and strictly implemented. In addition, the jumbo salaries and emoluments of lawmakers must be drastically reduced in line with the country’s prevailing economic realities.

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