RMAFC alarm on high cost of governance

ALARMED by the high cost of governance, the Revenue Mobilisation Allocation and Fiscal Commission has expressed concern over the bloated recurrent expenditure in the Federal Government, amidst the country’s underdevelopment. Making his observation via a statement recently, the RMAFC Chairman, Mohammed Shehu, says the implications are poor infrastructure, shabby social services, high unemployment, insecurity, and diminishing Foreign Direct Investment. He is correct. Urgently, President Bola Tinubu should heed the advice, applying strict and meticulous methods to reduce the cost of governance.

According to Shehu, the starting point is to implement the Steven Oronsaye report on the restructuring of ministries, departments, and agencies. This is a logical measure to correct the duplication and overlapping of MDAs. It offers the government an opportunity to save costs and redirect same to infrastructure.

However, this is not enough. Tinubu assumed office during economic malaise. Instead of showing moderation, he appointed 48 ministers, while still holding on to the petroleum minister portfolio. A 48-member cabinet imposes significant costs on governance. The President should do the needful. In Argentina, President Javier Milei, after assuming office in December, immediately cut his cabinet from 18 to nine.

In part, the RMAFC chairman – just like a few other Nigerians – blamed the cost of governance on the presidential system of government. This might not be the case. The cost of governance is essentially defined by the political operators, not by the parliamentary or presidential system. In the Second Republic, some governors like Adekunle Ajasin (Ondo State) and Lateef Jakande (Lagos State) laid down near-perfect examples in frugality.

The problem has to do with the culture of luxury in government. Take the parliament. In October, the National Assembly decided to import 360 SUVs valued at N57.6 billion for the use of members despite gnawing multidimensional poverty, insecurity, and gross socioeconomic imbalance. Lawmakers collect huge amounts of money for constituency projects annually, which a senator put at N500 million at plenary on Tuesday.

The President, the 36 governors and top government officials move around with oversized convoys. Ministers and special advisers enjoy a retinue of aides and security details. The situation is replicated at the state level. If there is no check, the lawmakers will do same in a parliamentary system.

In truth, Nigeria is notorious for fiscal recklessness. While Tinubu flies around the world via the Presidential Air Fleet, studies show that the prime ministers of New Zealand, the Netherlands, Sweden, Finland, and Denmark fly commercial airlines on their travels. This instils fiscal responsibility and prudence in governance. Elected officials should buy into this.

Nigeria’s infrastructural needs are very glaring. While its continental peers, Egypt and South Africa, boast 58,818 megawatts and 58,095MW respectively, Nigeria shamefully battles with about 5,000MW. The Manufacturers Association of Nigeria reported that businesses spent 40 per cent of their total production costs on generating alternative electricity.

This is compounded by shabby roads nationwide. Out of Nigeria’s 195,000 kilometres road network, 135,000km of it is untarred. Of the paved 60,000km, many are in deplorable conditions, per the Infrastructure Concession Regulatory Commission. While Nigeria has been unable to complete the reconstruction of the 127.5km Lagos-Ibadan Expressway since 2004, India constructed 742,398km rural roads at 91km per day as of July 2023, per official statistics.

To fix its roads, Nigeria needs between $100 billion and $150 billion annually over the next 30 years. Dataphyte estimates it at $2.3 trillion, and Agusto & Co, and the World Bank at $3 trillion. Nigeria ranked 24th in 2020 out of 54 African countries in the Africa Infrastructure Development Index with 23.26 points; Egypt was second with 88.3 points, and war-torn Libya was third with 82.9 points.

To salvage the situation, Nigeria should emplace fiscal federalism, and attract private investment for capital infrastructure.