RMAFC blames excessive price of governance for gradual financial development

The Revenue Mobilisation Allocation and Fiscal Commission has lamented the current high cost of governance.

The Commission noted that the high 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 also attributed the high cost of governance to several factors, including the expensive presidential system, a bloated bureaucracy with overlapping ministries, and widespread corruption.

The commission in a statement signed by its spokesperson, Nwachukwu Christian in Abuja on Sunday, said the issues are draining public resources and hindering economic development, adding that no society can make meaningful progress unless it develops a competent and cost-effective management system capable of maximising the nation’s resources to the benefit of all.

The statement read, “The problem of the cost of governance is 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 adding that no society can make meaningful progress unless it develops a competent and cost-effective management system capable of maximising the nation’s resources to the benefit of all.

“The RMAFC Boss also noted that the cost of governance over the years has been very high and alarming and therefore unsustainable as recurrent expenditure continues to significantly exceed capital expenditure thus negatively impacting investment, industrial expansion, infrastructural development and growth of the real sectors of the economy.”

“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 were the high cost of public service delivery due to infrastructure failure, high-security costs as a result of insurgencies, kidnappings, ethnoreligious agitations and armed robbery, multiple salaries and severance allowances; extravagant activities and expenditures, high domestic and foreign debts and weak enforcement institutions.”

Nwachukwu made the comments in reaction to the Federal Executive Council’s adoption of the Oronsanye Committee Report as a way of curbing the high cost of governance through the restructuring and rationalisation of Federal agencies, parastatals and commissions.

President Bola Tinubu-led Federal Government announced on February 28, 2024, that parts of the recommendations in the 12-year-old Oronsaye report would be implemented.

The 800-page report recommended that 263 of the statutory agencies be slashed to 161; 38 agencies be scrapped; 52 be merged and 14 be reverted to departments in various ministries, among others. In the report, the commission is expected to be subsumed with the National Salaries, Income and Wages Commission.

The RMAFC spokesperson who commended the Tinubu administration for embracing the Oronsanye Report as a blueprint for streamlining government agencies, further stated that the report’s full implementation can significantly reduce administrative costs, freeing up funds for vital infrastructure projects that benefit Nigerians directly.

According to him, the imbalance hurts the real sectors of the economy, ultimately impacting the lives of everyday Nigerians.

“The Chairman of the Commission expressed optimism that the wholesale adoption of the Oronsanye report by President Tinubu’s administration was laudable as it was capable of drastically reducing the cost of governance that would conserve funds for infrastructural development which would impact positively on the lives of the citizens.”

Speaking on the current fiscal and monetary reforms being undertaken by the administration of President Ahmed Bola Tinubu, the RMAFC spokesperson explained that the policies of prioritizing price and exchange rate stability to promote sustainable economic growth and safeguarding the livelihoods of Nigerians are quite commendable.

According to him, such policies will play a crucial role in cushioning the impact of hyperinflation on the economy. “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”.

Nwachukwu further advised that the committee overseeing the Oronsaye Report’s implementation consider agencies established since the report’s initial publication in 2014 to ensure a comprehensive overhaul that maximizes savings for infrastructure development.

He called on the federal government and states to use the increased allocations from the Federation Accounts Allocation Committee wisely.

“These additional funds should be used to provide adequate support to the Nigerian people, particularly those struggling with the effects of subsidy removal,” he said.

The commission urged the government to strengthen cooperation between monetary and fiscal authorities stressing that by effective cooperation and implementing the Oronsaye Report alongside ongoing structural reforms, Nigeria can achieve a more stable exchange rate, control inflation, and create a more business-friendly environment for all.