Revenue Mobilisation Allocation and Fiscal Commission has been at the forefront of calls for reduction in the day to day government expenditure. Through Seminars and Workshops, the Commission has continued to proffer useful suggestions/recommendations to governments at all levels on the need to scale down on unnecessary expenditure and to monitor expenses on developmental projects that would impact positively on the lives of the citizenry.
Cost of Governance is any cost associated with the running of government. In other words, it is the cost incurred by the government in the course of providing goods and services to the citizenry. It may be subdivided into recurrent and capital expenditure. Whereas recurrent expenditure is government spending on overhead and personnel costs, capital expenditure on the other hand is government spending in providing infrastructural facilities.
- It is pertinent to note that when recurrent expenditure (as a percentage of total government expenditure) is substantially above capital expenditure, it would lead to reduction in the provision of infrastructure, fall in investments, reduction in the level of employment, etc. thus stagnating economic growth.
- In Nigeria, 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. This problem has continued to generate public concern and national discourse because of the negative implication on investment, industrial expansion, infrastructural development and growth of the real sectors of the economy.
- It is imperative to note that many developing countries all over the world are making concerted efforts at reducing the cost of governance in order to conserve funds for infrastructural development that would impact positively on the lives of the citizens. For instance, India introduced e-governance in administration in order to reduce the cost of running its government. Other countries like Ethiopia, Thailand, Kenya, Ghana, Rwanda, etc. have further resorted to reduction in the number of political appointees involved in the act of administration thereby making the Government efficient in the management of its scarce resources.
For any society to make meaningful progress there ought to be a competent and cost effective management system that is capable of maximizing the nation’s scarce resources to the benefit of all. The cost of running government in Nigeria has been on the increase over the years to the extent that stakeholders are worried about the problem and are seeking ways to address the anomaly which is posing fundamental threat to the nation’s development.
The essence of efficiency in governance is to ensure that public fund is spent judiciously. In other words, every kobo must be fully accounted for and spent judiciously for the welfare of the masses. One way to achieve this is through the deployment of e-accounting and e-auditing system in public finance in order to guard against unauthorized and wasteful spending.
Some measures which, when put in place, could help to reduce high cost of governance in Nigeria include:
Ministries, Departments and Agencies performing similar functions should be merged
Many Ministries, Departments and Agencies (MDAs) have similar and overlapping functions and responsibilities. Therefore, it is imperative for government to merge these Agencies to avoid duplication of responsibilities and thus curtailing wastage. Personnel cost, which is a recurrent expenditure, should also be strictly monitored by ensuring that all MDAs are captured on the IPPIS platform.
Political offices should be made less attractive
There should be a review of relevant sections of the 1999 Constitution of the Federal Republic of Nigeria (as amended) with clear cut separation of power, checks and balances.
Provision of Adequate Infrastructure
Government should make concerted efforts aimed at providing basic infrastructure that would impact positively on the lives of the citizenry and boost investment.
Enforcing the Monetization Policy of Government
Government should discontinue provision of houses and vehicles to officers whose allowances are already monetized.
Entrenching Rule of Law
Where there is rule of law and reliable judicial system, there will be law and order, and foreign investment will tend to flow into the country. Furthermore, unnecessary litigation arising from issues relating to debts and liabilities due to circumvention of the rule of law, will be minimized or eliminated.
There should be deliberate effort by the Executive, Legislative and Judiciary to pursue and implement cost reduction policies. The right attitudes by Heads of Ministries, Departments and Agencies will have positive effects in the efficient and timely execution of budgets and projects.
Government should conduct Personnel Audit and Manning Levels Periodically
This will eliminate ghost workers and reduce redundant staff in all tiers of Governments.
Budgets should be regarded as a binding document that should be religiously implemented. There should be strict discipline in the implementation of the budget.