The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Sunday raised the alarm over the high cost of governance in Nigeria.
It attributed the high cost of governance to several factors, including the expensive presidential system, a bloated bureaucracy with overlapping ministries, and widespread corruption.
The body, however, said the implementation of the Steve Oronsanye Committee Report recently approved by the Federal Executive Council (FEC), is the key to correcting all the economic woes bedeviling the country and its citizens.
Chairman RMAFC Mohammed Bello Shehu said this in a statement in Abuja.
He said the Commission observed that the problem of cost of governance was responsible for the reduction in the provision of infrastructure and social services and the consequent fall in investment, high level unemployment and rising insecurity in the country.
It observed that “no society can make meaningful progress unless it develops a competent and cost-effective management system capable of maximizing the nation’s resources to the benefit of all.”
The chairman recalled that RMAFC had over the years, advocated a reduction in cost of governance as a way of preserving scarce resources for the sustainable development of the country.
The body, he said, also proffered far-reaching suggestions and recommendations to governments at all levels on the need to scale down on unnecessary expenditure and to monitor expenses on developmental projects that would impact positively on the lives of the citizenry.
According to Shehu, the high cost of governance in Nigeria was caused by the expensive nature of the presidential system of government, large bureaucracy, duplication of government ministries, departments and agencies and endemic corruption.
…Other factors
He listed other factors to include the high cost of public service delivery due to infrastructure failure, high-security costs as a result of insurgencies, kidnappings, ethno-religious agitations and armed robbery, multiple salaries and severance allowances; extravagant activities and expenditures, high domestic and foreign debts and weak enforcement institutions.
The RMAFC further noted that “the cost of governance over the years had been very high and alarming and therefore unsustainable as recurrent expenditure continues to significantly exceed capital expenditure thus negatively impacting on investment, industrial expansion, infrastructural development and growth of the real sectors of the economy.”
He lauded the wholesale adoption of the Oronsanye report by President Bola Ahmed Tinubu administration, saying it was capable of drastically reducing cost of governance that would conserve funds for infrastructural development which would impact positively on the lives of the citizens.
…Fiscal, monetary reforms
Speaking on the current fiscal and monetary reforms being undertaken by the Tinubu administration, Shehu explained that the policies of prioritizing price and exchange rate stability to promote sustainable economic growth, and safeguarding the livelihoods of Nigerians were quite commendable.
According to him, such policies will play a crucial role in cushioning the impact of hyperinflation in the economy.
The statement said: “The RMAFC sees price stability and exchange rate stability as good policies in the right direction. The price stability preserves the purchasing power of the national currency, provides confidence to the investors and assists the citizenry to plan their spending and savings more effectively”.
The Commission also extolled the Tinubu administration for introducing policies aimed at reorganizing the Bureau De Change Market to achieve transparent market operations in line with International Best Practices.
“The policy will enhance credibility, transparent operations and build trust among market participants, regulatory authorities, and the public. A reorganised BDC market with clear and open processes contributes to the credibility of the foreign exchange system,” he said.
The RMAFC also laid credence to the policy “because it will reduce exchange rate volatility, minimize uncertainties in the foreign exchange market, attract direct foreign investment, improve financial inclusiveness, reduce speculative activities, improve regulatory oversight and ensure effective monetary policy implementation.
“When stakeholders have access to accurate information about market conditions, it can lead to more stable exchange rates, reducing volatility and providing a more predictable environment for businesses and investors,” it said.
He advised the present administration to consolidate the synergy and coordination between monetary and fiscal authorities.
“The country can be assured that through the coordination of policies and the current structural reforms, implementing Oronsaye’s report will bring a more stable exchange rate, control inflation, reduce the cost of governance, and create an enabling environment for businesses and individuals to thrive,” the statement added.
He similarly urged the Committee on the implementation of the Oronsanye Report to equally consider the duplication of agencies, especially those agencies created after the report between 2014 to date, adding that a wholistic implementation of the report will save funds for infrastructural development in the country.
…Fuel subsidy removal
In order to cushion the effects occasioned by the subsidy removal, the RMAFC chairman similarly called on the Federal Government and States to judiciously utilize the increased allocations from the monthly Federation Accounts Allocation Committee (FAAC) to provide adequate palliatives to the teeming masses in the country so as to alleviate their suffering.
…Govs on hike in food prices
in a related development, the Nigeria Governors Forum (NGF) has embarked on measures to tackle the hike in prices of food items.
This followed a meeting President Tinubu had with all the 36 state governors at the Council Chamber of the Aso Rock Villa, Abuja to discuss lasting solution to food crisis.
According to a latest report released by the NGF secretariat Sunday, and signed by the NGF’s acting head of media, Halimah Salihu Ahmed, the governors took several proactive steps to counter the present food crisis as well as the inherent economic hardships.
The report said the NGF chair and governor of Kwara state, Abdulrahman Abdulrazaq, alongside Governors Agbu Kefas of Taraba state, Lucky Aiyedatiwa of Ondo state, and Ahmed Usman Ododo of Kogi state, would collaborate with the Federal Ministry of Agriculture and Food Security (FMAFS) and push for increased crop production to tackle food inflation and food shortages in Nigeria.
The report lamented that the Anchor Borrowers Programme that was previously implemented by the Central Bank of Nigeria (CBN) did not achieve much.
The Kwara governor called on the agriculture minister to work hard to meet the food targets of government, as this was vital for the Nigerian masses, adding that state governors would work with the ministry.
“We could not achieve much with the CBN Anchor Borrowers programme; it was very challenging. The issue of food security is a one-stop-shop and we need to concentrate on what we are doing. We need to concentrate on what we are doing for the dry season farming.
“The minister has come up with a programme on cassava, rice and maize and we want to engage in that programme and urgently make sure we improve on our yield and deliver to the Nigerian population.
“We want to get to a stage where we export our food. What we have now is that, because of the devaluation of our naira, Nigeria’s food is being exported to West Africa and is the cheapest in the region today,” the statement said.
The NGF also said the governors had “come to the realisation that we have a new Ministry of Agriculture, because over the last four years, before this administration, the engagement was not too productive.
“This was because the CBN took over most of what the agriculture ministry use to do. Our trips to the ministry at that time were not fruitful. But now we have seen strong engagement and sense from the Federal Ministry of Agriculture and that is why we are here today.”
Governor Abdulrazaq also said the governors had also noted that food in Nigeria was the cheapest in West Africa, adding that Nigeria’s neighbours were using its food to trade.
Following this, he said: “They are taking our soya and other stuff to make foreign exchange for themselves. That is not a bad thing. What we need to do is to ramp up production and increase our yields per hectare so that we can feed West Africa, feed ourselves 100 per cent and export food. That is the goal we must achieve…. whatever subsidy that is coming from the federal government will be improved upon by the states.”
The report also revealed that: “In Akwa Ibom State, the government is planning to establish an agency which will buy food items in bulk and then sell them at cheaper prices to the residents.
“Towards this end, the Akwa Ibom State Governor, Umo Eno, has forwarded to the House of Assembly a bill for the establishment of the agency.”
The NGF also listed efforts by the Yobe, Enugu, Niger, Ekiti and Zamfara state governments at ensuring reduction in prices of food stuffs.
