Massive Government, Miserable Populace

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Alex Otti

OUTSIDE THE BOX BY ALEX OTTI

On Tuesday, March 9, 2021, I was privileged to deliver the 10th anniversary lecture of the Adeleke University, Ede, Osun State. I have taken the liberty here to share excerpts of the paper with you. Interested readers can go to the university website (www.adelekeuniversity.edu.ng) to read the full paper.

My Igbo origin avails me a plethora of philosophies, wise sayings, and moral values on the foolishness of having resources at your disposal while members of your immediate family or constituency suffer the anguish of a systemic lack. When you liken the above to a more recent and immediate reality, you’d see the Nigerian predicament laid bare.

Nigeria, no doubt, is a rich country, at the minimum, potentially. There is massive deposition of such natural resources as crude oil, zinc, gold, steel, rubber, palm, granite, rich and arable soil for the cultivation of different kinds of crops, abundant water bodies and above all, human resources, by way of talent, academic brilliance, and willingness to work. Suffice it to say that Nigeria has it all. But the irony here is that Nigeria is also a poor country. The World Poverty Clock reports that at the latest count, Nigeria had 43% of its population or about 90million people living below poverty line of less than $1.90 per day.

It was Chinua Achebe who, in his 1984 pamphlet, The Trouble with Nigeria, stated that “the trouble with Nigeria is simply and squarely a failure of leadership”. It is doubtful if there is any debate about the fact that we run a very wasteful and expensive system of government. In the past, various federal government administrations had made reasonable attempts to rationalise government agencies ostensibly to bring down cost of governance. The most recent but more comprehensive effort on the issue of streamlining government agencies and cutting down on cost of governance, is the Oronsaye report, which recommended the pruning down of statutory agencies of government, from the current number of 263 to 161 representing a 40% cut.

The Presidency gulps a large chunk of our annual revenue. There is a retinue of aides, ranging from Special Advisers to Senior Special Assistants to Special Assistants to both the President, Vice President, and other senior government officials. Can we not also ask that we cut the Presidency down by about 40%, using the same logic introduced by the Oronsaye report? Presently, we have 43 ministers each with its retinue of aides and special assistants. This is not only unwieldy and inefficient, but very expensive. The constitution recommends that there should be a minister per state. Some of us believe that that part of our constitution should be amended quickly. Is it not possible to cut this number by the same 40%, wind up with no more than 17 ministers and still run these ministries efficiently?

India, with a population approaching 1.4 billion people, has only 19 ministers in her cabinet and presided over by the Prime Minister. Germany also has 15 cabinet ministers and Ghana’s constitution allows for a minimum of 10 cabinet ministers and a maximum of 19. Some of the countries we highlighted here are unitary governments while in our case we still have these roles duplicated in the 36 states by commissioners.

Our federal legislators are the second highest earning worldwide after Singapore, that has one of the highest levels of income per capita, in the world, but it is arguably the most professionally run in the world. America the model of our own democratic experiment, does not occupy a pride of place in countries with jumbo pay for their legislators. The Senate has 109 members while there are 360 House of Representatives members from the different constituencies in the federation. Together, they are entitled to about 1,880 legislative aides amongst other support and personal staff.

Our National Assembly is expected to sit for 180 days in a year and be on holidays and recess for the remaining 185 days in the year. We will ignore the allegation made recently by Prof. Attahiru Jega, the former INEC Chairman, that legislative committee work and oversight functions have been turned into bribe taking and bribe giving pursuits.

What concerns us today is how the National Assembly can help Nigeria to reduce her cost of governance. The budget allocations to the National Assembly is over 15% of the annual combined budgets for education and health for 200m Nigerians. While the number of legislators remains steady at 469, the population of Nigeria keeps growing and about 6 Nigerians drop into poverty every minute. It would not be out of place to ask how fair this arrangement is and even if not important, whether it is really sustainable.

We dare ask, is a bicameral legislature necessary, desirable and sustainable in Nigeria? Our belief is that we should do away with the bicameral system and maintain a single National Assembly structure as this would avoid role duplication and immediately save the country a lot of money.

Our second recommendation deals with the ideal size of the legislature for a country like Nigeria with all its multifarious economic problems? America’s 535 legislators for a country of 330m people translates to one legislator to every 618,000 people. India with a population of 1.38billion people has a parliamentary size of 790 people. This means one legislator to 1.7m people. Even the European Union, with a population of 446m people, has a parliamentary size of 751, giving a ratio of 1 to 600,000. Nigeria with an estimated population of 200m and National Assembly size of 469 works out at 1 legislator to just 426,000 people. If we take a cue from India, we should be looking at about a National Assembly size of about 117 people.

Our third issue of focus is on the compensation package for members. There is no doubt that the National Assembly members take more than their fair share of the national cake. We should remove all perks and pay only sitting allowances to members. This means that they only get paid when they sit. Again, the legislative function should be part-time. That is the standard practice for board members of institutions and companies.

The fourth issue is in the quality of people who would be fit to serve as National Assembly members. The minimum standard should be people who have succeeded in their chosen fields of endeavour and are not merely in search of jobs or relevance.

The fifth suggestion is in the structure and mode of sitting. Today, many meetings are held virtually including the Federal Executive Council. Events like weddings and others, are attended virtually, through such applications as Zoom and Skype. In like manner, we should adopt virtual meetings for the National Assembly. Members should live and remain in their locations and hold meetings for which they would earn allowances each time they sit. We would therefore save on travels, accommodation and other inconvenience allowances. Physical meetings should be held, say, quarterly if and where necessary.

 

Finally, there is the long pending issue of the constitution. The 1999 constitution was foisted on us by the military and the flaws are so glaring that there is no gainsaying the fact that it is one of the major factors holding the country down. The National Assembly should pass a law requiring that each of the 6 geopolitical zones elect only 20 members to the National Assembly from 2023. It can even go the whole hog and legislate away the state structure in favour of the 6 regional structure to help us rein in the persisting high cost of governance.

The state governments, on their own, constitute the bulk of the waste of scarce resources in the public sector. According to the approved sharing formula, 56% of Federal Allocation funds goes to the Federal Government, while the remaining 44% is shared by the states. Of this amount, 20% should theoretically go to the local governments through the Joint Local Government Account (JAAC), a body that in all practical terms, is also controlled by the states. This is because the local governments are accountable to the state governments. In most cases, in order to control the funds in the JAAC account, states refuse to conduct local government elections, preferring the subterfuge of appointing ‘Transitional’ Council Chairmen and officers, who are completely accountable to the governors.

In its report titled “State of the States 2019 Edition”, Budgit, a public and civic organisation, revealed that out of the 36 states in Nigeria, only three, Lagos, Rivers and Kano, are fiscally sustainable. From a purely economic point of view, most of the states in the country are not viable. Before the pandemic, majority of the states had been unable to successfully deal with their cash flow challenges. Some State Governors have even been unable to pay the basic salaries of civil servants and other government employees for several months. Many of them have already sunk their states into unsustainable debt. Many states have had to depend on non-guaranteed sources of funds like Paris Club refunds, budget support funds and bailouts from the federal government, and outright loans and advances from Commercial Banks.

Healthcare delivery in most of the states is in a state of neglect. Many states have no standard hospital that can attend to victims of the coronavirus pandemic. Infant mortality remains very high, maternal mortality, access to drugs, access to medical personnel and doctor-patient ratio remain in the very poor quadrant. A look at the state of infrastructure reveals the alarming level of decay in most states of the federation. Roads have completely collapsed, housing is not even being mentioned in some states and drainages, water, electricity and transport systems have practically decayed. All these come as no surprise because most of the states have found themselves in the same problem that the federal government has been, as more than 70% of their annual budget goes to recurrent spending while a meagre 30%, is allocated to capital expenditure.

The urgent question that needs to be addressed now is whether we should continue to keep our existing unviable governance structure even when we are convinced that it is a drain on the nation’s scare resources. We argue that we can and should put a stop to looting and ‘re-looting’ funds and also cut the cost of governance. Even with the best of intentions, government does not have the capacity to maintain many people on its payroll, rather, it should focus on its proper role of creating the enabling environment for a strong and virile private-sector-driven economy that would create jobs for the populace. By releasing the funds used to run government and channeling same to building infrastructure in a massive manner, government would be able to reduce cost of doing business and help the private sector create jobs.

It is impossible for us to continue doing things the way we had been in the last few years. Nigeria has borrowed up to her neck given that she now owes close to $85 billion and still counting. We are using 85% of our revenue just to service our debt, leaving us with so precious little to do other things. We are clearly running a huge deficit budget and we are seriously in trouble, a twin trouble of dwindling revenue and mounting debt which shows that we have a serious economic crisis in our hands, though some people still live in denial as if by so doing, it will cease to exist.

There is also the issue of internally generated revenue in the states and local governments. Going to share money in Abuja, is not a sustainable way to run government. To generate revenue locally, governments must invest in creating the enabling environment for businesses to thrive and share in the prosperity it has created. Frankly speaking, they must give scope for the private sector to lead economic activities in the states. Expecting that it is possible to collect taxes without making the state and local governments competitive is like attempting to squeeze water out of a rock. Some state governors refuse to invest in viable locations for political reasons. What those who indulge in this fail to realise is that as they punish their enemies in those towns by not investing in infrastructure and renewals, they at the same time kiss their IGR goodbye.

We maintain that the only reason the masses are suffering amid plenty, the only reason profligacy seems to have triumphed over prudence in Nigeria is that the citizens condone and accept it. The saying that every society gets the kind of leadership it deserves, cannot be truer.

The World Poverty Clock reports that about 12% of the world’s poorest people are accounted for by Nigeria. One is left to wonder why such is our story and our fate. Why are many Nigerians still this poor? The answer, lies in amongst other things, a structural defect, that ensures that we spend over 70% of our budget in the payment of salaries and allowances and less than 30% on Capital expenditure. We must restructure this country to streamline and tame cost of governance and focus on pulling our people out of poverty. We can choose to do it voluntarily or wait for economic forces to force us to do it. The choice is ours.

 

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