Will the National Assembly’s attempt to prune, scrap or merge Federal Government’s ministries, departments and agencies (MDAs) be far-reaching this time around? This is the question on the lips of many Nigerians who have been following the processes put in place to achieve this objective in about 11 years. There seems a consensus that some of these agencies have outlived their usefulness; or that some are mere duplications of existing parastatals or agencies. The problem, it would seem, is the political will to do the rightful, which is key if the much-desired savings that the government expects to make from the exercise is to materialise.
The Goodluck Jonathan administration had in 2011 set up the Presidential Committee on the Reformation of Government Agencies to examine the enabling acts and mandates of the federal agencies with a view to determining the areas of overlap or duplication of functions. The committee, headed by Stephen Oronsaye, consequently recommended that 263 of the 541 statutory and non-statutory Federal Government agencies and commissions be reduced to 161, 38 scrapped, 52 merged and 14 others should revert to certain departments and ministries. The idea is to remove several layers of avoidable expenses.
The report was however not implemented.
Rather, the Federal Government, 10 years later in 2021 set up two committees to review the Oronsaye report. The first was headed by a former Head of Service, Goni Aji. Its mandate was to advise the government on the implementation of the report within a year. The other sub-committee headed by Ama Pepple was to review the report.
Not much happened thereafter until last month when the Senate hinted that 400 of the MDAs might be scrapped in line with the recommendations of the Oronsaye panel. This was during the interface between the Senate Committee on Finance and the respective chief executives of the MDAs on revenue drive for the implementation of the N19.7trn 2023 budget. The committee chair, Senator Olamilekan Adeola, and other members of the committee were apparently irked by the paltry returns of some of the agencies despite huge budgetary allocations to them. For instance, the Sokoto Rima River Basin Development Authority’s (SRRBDA) managing director told the committee that the authority could only generate N7million despite collecting about N7billion allocation from the Federal Government. The committee said this was unacceptable.
It is good that the House of Representatives too has seen the need to revisit the issue. Its Ad Hoc Committee to Investigate the Duplication of Functions of Agencies of the Federal Government has commenced the move to reduce the cost of governance and ensure efficiency by reducing the number of the MDAs. The committee had, at its inaugural investigative hearing in Abuja asked the MDAs to justify why they should remain in existence as individual entities. Chairman of the committee, Victor Danzaria, put the matter in perspective: “We have agencies, some doing the job of the other. Some are intervening agencies, their lifespans have expired but they are still there and the government is still maintaining them by budgetary allocation. It is a waste for this country. We are looking at areas where we (can) shrink governance but increase productivity.”
This is the critical assignment, especially at this time of dwindling revenue. So, that both chambers are on the same page on the issue is somewhat soul-lifting. It gives hope of an early harmonisation of the legislation to effect the necessary changes in line with the Oronsaye report. The country is losing so much servicing these multifarious agencies and parastatals. Personnel cost has been on the rise since 2017.
Indeed, in four years, the Federal Government’s personnel cost increased from N2.29trn to N4.11trn in the 2022 budget, about 79.48 per cent. The N4.11trn, about 25.08 per cent of the nation’s entire budget, excluded allowances for members of the National Youth Service Corps (NYSC) that are not medical doctors, contract staff and anticipated promotion projections of existing staff.
As a matter of fact, economic experts, including the Lagos Chamber of Commerce and Industry have been warning the Federal Government about its increasing recurrent expenditure which was about 40 per cent of the 2022 budget, for example. Its president, Dr Michael Olawale-Cole, said “Looking at the 2022 aggregate FGN expenditure of N17.13trn, recurrent (non-debt) spending is estimated at N6.9trn, which is 40 per cent of total expenditure, and 20 per cent higher than the 2021 budget.
“The government needs to watch the rising recurrent (especially personnel) expenditure.”
The implication of this for the budget, for instance, is that only about 35 per cent of the total expenditure (N5.96trn) was allocated to capital expenditure. This is unsustainable.
It is good that the National Assembly is looking in the direction of reducing the cost of governance. We urge it to expedite action so the expected savings could go into more productive causes. But it has to beam the searchlight on other areas of waste for maximum benefits. We cannot make progress if we continue along the present lopsided allocation of resources that tilts in favour of largely unproductive agencies and parastatals..