Cost of governance: Restructure Nigeria into six regions, Budget Office tells FG

Ben Akabueze

Cost of governance: Restructure Nigeria into six regions, Budget Office tells FG

The Budget Office of the Federation has said restructuring Nigeria into six regions is pivotal to reducing the high cost of governance.

It noted that the number of ministers also needs to be pruned and the number of political office holders and their aides reduced, lamenting that the huge recurrent expenditure had constrained the provision of good roads, steady power supply, health care services, quality education and quality shelter etc.

This, it said, had contributed to observable underperformance of the economy, slow growth and current infrastructural challenges.

These recommendations were contained in a report by the Independent Corrupt Practices and Other Related Offences Commission at its Third National Summit on diminishing corruption in the public sector, held at the State House Conference Centre, Abuja on Tuesday.

The event, with the theme, ‘Corruption and cost of governance: New imperatives for fiscal transparency’, was attended by the President, Major General Muhammadu Buhari (retd.); the Chief Justice of Nigeria, Tanko Mohammed; the Secretary to the Government of the Federation, Boss Mustapha; the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed and the Chairman of ICPC, Prof Bolaji Owasanoye (SAN), among others.

The ICPC report referenced the Budget Office as blaming the high cost of governance on bloated cabinet size, high cost of elections, corrupt budget practices, multiplicity of Ministries Departments and Agencies and high number of political office holders and their aides.

It said a direct result of the expensive governance structure was that less than 30 per cent of Federal Government’s resources were available to fund the much needed capital projects.

However, the Budget Office, according to the document, recommended that should “prioritise completion of ongoing projects, restructure Nigeria into six regions and reduce the number of ministers, and build a more efficient civil service and conduct periodic staff audit.”

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It added that “MDAs should consider fiscal position in reviewing salaries, adopt a cost- effective electoral system and limit the number of aides of political office holders.”

While highlighting the drivers of the high cost of governance, the document quoted the Budget Office as saying that Nigeria has a large cabinet with 27 ministers, 16 ministers of state and 27 ministries, adding that MDAs raise their personnel cost by engaging in indiscriminate recruitment without clearance from the Budget Office.

Nigeria has about 934 MDAs with duplicated functions and 541 public corporations and enterprises.

It noted further that high cost of elections and resultant litigation contribute to the high cost of governance in Nigeria and that the current structure/size of the federal bureaucracy was clearly unsustainable for the size of the economy. “The high number of political office holders and their aides also adds to the high cost of governance,” it added.

The Budget Office lamented that personnel cost for the past three years gulped N9.7tn, adding that cost of governance had generally been on the rise and personnel costs represent significant proportion of the spending.

According to the report, MDAs’ recurrent spending rose from N3.61tn in 2015 to N5.26tn in 2018 and N7.91tn in 2020. This excludes the costs of owned enterprises and transfers to the National Assembly and the National Judicial Council.

“Recurrent spending accounted for 40 per cent of actual recurrent spending in 2020 while overhead was just three per cent. Cost of governance has generally been on the rise and personnel costs represent a significant proportion of the spending,” it added.

The President, Vice President Yemi Osinbajo and several other leaders had repeatedly stated the need to reduce the cost of governance, but not much has been done to actualise it.

Meanwhile, there has been an increasing public clamour for restructuring, with sociopolitical groups like Afenifere, Ohanaeze, Pan Niger Delta Forum, the Southern and Middle Belt Leaders Forum, Northern Elders Forum, Arewa Consultative Forum and the Coalition of Northern Groups insisting that it is the only way the country could return to the path of progress.

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The Presidency had in response to the agitations asked the proponents to approach the National Assembly with their request.

Why we can’t punish those behind budget duplication – Budget Office

The Director-General of the Budget Office of the Federation, Mr Ben Akabueze, on Friday disagreed with the ICPC, saying only 185 projects were found to be duplicated in the 2021 budget, and not 257 as announced by the commission.

He said it was beyond the responsibility of the Budget Office to discipline those responsible for the duplication because the staff of the MDAs who prepare their budgets were not answerable to his office.

He however argued that errors were inevitable since the budget was prepared by human beings but that those culpable for the “willful duplication” of projects should be fished out by the ICPC and prosecuted.

The ICPC chairman had at the summit said 257 projects amounting to N20.138bn were duplicated in the 2021 budget.

Akabueze, who spoke on Channels Television’s ‘Sunrise daily’ on Friday, stated that some of the projects identified by the ICPC were not duplicated but had description challenge.

He said, “The ICPC came up with a report which they sent to us about duplicated projects in the budget. We did our own review and found that 54 of those projects were actually not duplicated. There were issues with project description, which made them look the same.

“Every project in the budget has a unique identifier and for the projects found to be duplicated, funding was withheld. 185 (projects) were found to be duplicated, 54 were not.”

Akabueze said there were about 20,000 projects in the budget and that if only about 200 projects were duplicated, it amounts to about 0.01 per cent. He added that the total MDAs’ in the budget estimate was under N4trn, and that the duplicated projects valued at about N20bn was about 0.005 per cent.

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He added, “Every system has a level of tolerance in terms of error. It is human beings that prepared it, some may be erroneous, some may be willful duplication but the important thing is that there is self-correcting mechanism. The best of systems in the world have audit attached to them because there is an acknowledgement that something can go wrong. We work collectively with the ICPC and it is part of its role as correcting mechanism.”

He however said the Budget Office was working towards a zero level of such duplications.

He added, “At the level of the Budget Office, what we do is withhold funding for such projects and to that extent, it doesn’t create the sort of problem you alluded to; misuse of state resources.”

“As to the discipline of those people, that is outside of our own responsibilities; we look to the day where we have a structure within the budget office where the budget office can deploy its own personnel across the MDAs…to hold them directly accountable. The staff who are involved in preparing this budget in the MDAs are not accountable to the budget office and we have no line of responsibility to question them.”

He said the ICPC with its investigative powers should invite the people involved to find out if the duplications were willful actions intended to defraud the or they were erroneous.

Cost of governance: Restructure Nigeria into six regions, Budget Office tells FG

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