Reducing governance cost: Whither Oronsaye report?

…It forces FG to borrow ceaselessly – ICIR, …Cut estacode – Odinkalu,  ‘…Govt should downsize lawmakers, MDAs’, … Restructuring the way out – Expert

It’s clear that the governments at all levels in the country cannot meet their obligations, and this has been blamed on the present high cost of governance. Worried by the declining fortunes from oil revenue, the administration of the late Musa Yar’Adua found it difficult to meet its obligations. ELEOJO IDACHABA in this report takes a look at the Steve Oronsaye report and wonders if it could be revisited.

After his death, Dr. Goodluck Jonathan inherited a heavy burden of which necessity was placed on that administration to devise a way of cutting down running costs with a view to meeting other obligations. This led to the inauguration of a Presidential Committee on Restructuring and Rationalisation of federal government parastatal, commissions and agencies under the chairmanship of a public service technocrat, Steve Orosanye, to prune and abolish certain institutions whose functions appear similar. 

Although the Committee finished the work and submitted its report, 10 years later, the government is still crying foul on account of the high cost of governance.  The 800-page document otherwise known as the Oronsaye report contained far-reaching recommendations that, if implemented, would help to address the high cost of governance in the country. In all, it identified 929 MDAs, parastatal, commissions as well as agencies, but recommended that 38 agencies be abolished and 14 reversed to departments in a ministry.

The debate

Recently, the Minister of Finance, Zainab Ahmed, said at a policy dialogue on ‘Corruption and Cost of Governance in Nigeria,’ organised by the Independent Corrupt Practices and other Related Offences Commission (ICPC) that the government had initiated a number of programmes aimed at cutting the cost of governance in the face of dwindling revenue.

She said President Muhammadu Buhari had directed the Salaries and Wages Committee to review the payroll of public servants.

According to her, “Mr. President has directed that the salaries committee that I chair work together with the Head of Service of the Federation and other members of the committee to review the government pay rolls in terms of stepping down on cost.”

Ahmed said the measures were aimed at reducing recurrent expenditure, projected to gulp N5.6 trillion, about 41.5 per cent of the N13.5 trillion budgeted by the government for the 2021 fiscal year.

She had during the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) revealed that there would be a spike in personnel cost (including pensions cost) from N2.45 trillion in 2019 to over N3.4 trillion in 2020 due to the Nigerian government’s decision to create five new ministries.

As at the time she was speaking, it was reported that the additional personnel cost arising from the creation of the new ministries was not factored in the implementation of the New Minimum Wage.

The development prompted a series of reactions from stakeholders who blamed the government for what they called its ineptitude towards reducing the cost of governance, but has resorted to borrowing and anytime loan facilities are not available, they said the Buhari administration would contemplate downsizing the workforce or rationalise salary payments. 

PDP’s take

In its reaction, the Peoples Democratic Party (PDP) in a statement by its publicity secretary, Kola Ologbodiyan, described stated that it was wicked and completely unacceptable that the ruling party would rather choose to go after workers’ salaries even after APC had already increased the heavy burden it placed on Nigerians through the high cost of fuel, electricity, food and other essential commodities that have gone far beyond the reach of many Nigerians.

The statement read in part, “Rather than impose more hardship on our workers, the APC and its administration should realign the budget by removing their padded figures as well as end the exposed looting in the integrated payment system where trillions of naira are being siphoned through non-existent workers and overheads.

“Moreover, the APC and its administration should return the over N15 trillion stolen from various agencies of the government and channel the same to governance.”

APC’s response

On its part, the APC speaking through its national secretary, APC Caretaker and Extra-ordinary Convention Planning Committee (CECPC), John Akpanudoedehe, said the federal government has no plans to slash salaries of civil servants as alleged by PDP.

He said, “The PDP is up to its comical tales on what it terms intelligence at its disposal to slash the salaries of workers in the country; clearly only the PDP believes its tales. We are proud of our credentials as a truly progressive and people-centred political party.”

While all of these were going on, the Kaduna state government fired over 4,000 employees on its payroll on the grounds that it can no longer pay the New Minimum Wage and this development led to the ongoing strike in the state. Also, Imo, Ekiti and other state governments have since indicated that they can no longer pay the New Minimum Wage.

The ICIR view

In its take, the International Centre for Investigative Report (ICIR) noted that, “High cost of governance is forcing the Nigerian government into borrowing money to finance budget deficits and also to fund capital projects. But the cost of servicing the loans has taken a huge toll on the economy.”

ICIR noted that despite the dwindling revenue challenges, political office holders are still among the highest paid in the world. For instance, the president and his deputy earn N3.5 million and N3.03 million respectively as basic salaries, per annum, according to available records from the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).

Also, the annual basic salary of a minister is put at N2.02 million; minister of state, N1.95 million; special adviser, N1.94 million; governor, N2.22 million; deputy governor, N2.11 million; and commissioner, N1.33 million.

In addition to the basic salary, the president is entitled to allowances such as hardship allowance – 50 per cent of his salary, about N1.757 million, and consistency allowance – 250 per cent of his salary, which is about N8.79 million.

The president’s gratuity, it noted, is 300 per cent of his salary, amounting to N10, 544,115 and he is also entitled to a leave allowance of 10 per cent of his salary as well as a vehicle loan which amounts to 400 per cent of basic salary. This also applies to the vice president, lawmakers and other senior public servants.

Experts’ take

Reacting, Barrister Edward Omaga, a human rights lawyer, anti-corruption crusader and chairman, Board of Trustees/president of Global Integrity Crusade Network (GICN), said “restructuring the country is the only panacea to reducing cost of governance.”

He said, “The ongoing debate about how best Nigeria can considerably reduce the cost of governance is timely and justifiable. It is however important to point out that the economy is crumbling and certain drastic measures must be adopted by those in authority to salvage the situation.

“No doubt, restructuring is the answer to our hydra-headed economic challenges at the moment. We hear recently that Kaduna is on a collision course with labour over sacked workers because the governor claimed that he no longer pays salaries. The story is the same in other states like Benue, Ekiti and Imo who have piles of unpaid salaries and pensions. While this is happening to poor civil servants, it is rather surprising to note that heads of ministries, departments and agencies (MDAs) and politicians continue to take jumbo salaries and allowances which, to say the least, are outrageous. One then begins to wonder where lies the justification for failing to pay workers.

“My position on how best to reduce the cost of governance is clear and simple. It is high time the president on whom lays enormous powers under the 1999 Constitution (as amended) take positive steps to implement the excellently drafted Steve Oronsaye report.

“As it is, nothing stops Mr. President from coming up with an Executive Order for implementation of the Oronsaye report. Our Coalition of Civil Society Organisations had written to him before now on this same matter, but no action was taken. When I talk about restructuring, I mean changes in fiscal policies, not creation of more states or regions. I can authoritatively say that the solutions to our national malaise and challenges are with our leaders, but they have failed to tackle them headlong in order to protect their primordial interests.”

Political will

On his part, a public affairs analyst and executive director, OJA Consult, Jide Ojo, noted that there is simply lack of political will on the part of the Buhari administration to save the cost of running the government. 

“A lot of things are done that may be politically expedient but economically suicidal. For instance, why did President Muhammadu Buhari increase the number of his ministers from about 37 in his first tenure (2015 – 2019) to 43 members in his second tenure? Why has he not deemed it fit to reduce the number of aircrafts in his Presidential Air Fleet from the current six or thereabout to just two or three?” 

He said all the trillions of unremitted revenues by the government-owned enterprises should have warranted stiff punishments.

“The Auditor General Report of 2017 which indicted several heads of ministries, departments and agencies should have warranted stiff penalties. The country shouldn’t be witnessing budget padding, the kind of which BudgIT revealed about the 2021 budget where an estimated 316 duplicated items in the budget amounting to over N39 billion was found.  

“I learnt the president had asked the Secretary to the Government of the Federation and the Head of Civil Service of the Federation to implement the White Paper on the Oronsaye report since April 2020; ironically more than a year after, nothing has been done. In any event, I have issues with the report which is that only about 10 per cent of the recommendations were approved for implementation. Aside from that, since 10 years now when that report was first submitted several other ministries, agencies and departments have been created and still being created. That report should have been updated and thereafter promptly implemented.” 

On the way out, he said, “There is a need for the president to sponsor an executive bill for amendment of the Constitution. Section 147 (3) which asks the president to appoint at least an indigene of a state as a minister should have been amended to ensure that we have only two ministers per geo-political zones. After all, the United States of America with over 300 million population has only 15 secretaries equivalent to our own ministers. We can also tinker with the Constitution to reduce the number of senators representing each state to two instead of three. We should also reduce the number of members of the House of Representatives from 360 to 240. Also, the state assembly should have only a member representing each local government instead of the current arrangement.”

Ex-rights commission’s boss’ reaction

In his reaction, a professor of Law and former chairman, National Human Rights Commission, Prof. Chidi Odinkalu, “Life in high level political leadership is really about Arithmetic and calculus. This administration failed woefully as if ill-equipped for leadership. 

President Buhari should have known that the cost of governance was unsustainable when he emerged in 2015, and with the political will he had then, he should have set about re-shaping governance as a priority. 

“The groundwork was already laid before he came, but instead, he saw governance as sadaka for his inner coterie and vengeance against the people he defined as ‘5%.’ As a result, instead of fiscal consolidation, we had a snowballing of the cost of governance and of corruption too. 

“Nigeria’s debt to GDP ratio has risen by about 12 percentage points in two years. The profile doesn’t look good. We are in sovereign insolvency territory. It was just a matter of getting on with the Oronsaye report which had the recommendations. Buhari had the political will in 2015 to implement it, now he no longer has it.” 

According to him, laying off workers doesn’t necessarily raise revenue; instead, it costs the government revenue in taxes because for most states, the only assured tax is PAYE which comes back to the government. 

On the way out of the development, he said, “The biggest line item in most budgets is travel; this is because most establishments use estacode to supplement salaries. People get paid for trips not made and there are no reports or deliverables either. So, cutting down travel and estacode would be more sensible.”