Twelve years after its original authors gathered to present it to the Goodluck Jonathan administration, we got news this week that President Tinubu has ordered the implementation of the Oronsaye report within twelve weeks.
The elegant symmetry of the timeframes aside, the move has brought the debate about the cost of governance to a head.
Mixed Reactions
In some quarters, the announcement of the Federal Executive Council’s (that’s the one with ministers, not governors) decision to implement the report has been met with disbelief.
In fairness, one can be forgiven a healthy dose of scepticism, if anything is a testament to the oft-repeated sentiment that “everything looks good on paper, but the real question is implementation”, it’s the Oronsaye report – the ghost which has haunted three administrations.
In other quarters, the move has been met with excitement, and the mantra that government spending is far too high in Nigeria is deeply held. It’s certainly a prized riposte against recent government reforms which many argue have been shouldered largely by the poorest in society, while the political elite file for foreign trips and the lavish estacodes that come with them.
It seems like a perfect opportunity for the political elite to walk their talk on collective sacrifice for “renewed hope”.
Continuity in Governance
In any case, the Oronsaye report is an example of the role of continuity in governance to achieve desired ends. Goodluck Jonathan, who commissioned it, took up some of its recommendations, harmonising the functions of a number of agencies, for example making it mandatory for all agencies dealing with biometric data capture to interface with NIMC.
The Buhari administration took the baton, but there was more work to do. In 2021, two committees were established – one to look at the original report recommendations, and one to review all the over 200 MDAs that had been created since.
This context is not to diminish the feat that the Federal Government is undertaking, rather a timely reminder that iterative governance is needed, especially when the pace of change is rapid.
Government Spending and Efficiency
It’s time to own up to my unpopular opinion: the trouble is that the Federal Government doesn’t spend enough, and what it does spend is so poorly managed that citizens don’t see enough benefits to justify their budgets.
In 2018, the IMF released a Selected Issues report which painted a bleak picture. Our 2016, revenue to GDP (at 5.3%) performance was less than a quarter of the 22% average across comparable countries (including Algeria, Cameroon, Indonesia, Ghana, Mexico, and the Philippines among others).
Today we’ve improved marginally but according to the CBN Governor’s analysis yesterday, we’re still doing less than half at just below 8%.
Using IMF data, the latest figures available put public spending in Nigeria at 14.39% of GDP, less than half of an average of the same mix of countries which sits at 29.76%.
At the same time, our public debt to GDP ratio sits more than 20 percentage points below the African average of over 60%. In layman’s terms, Nigeria does not have a debt or spending problem, Nigeria has revenue and efficiency problems.
We’ve heard much about the gaping infrastructure deficit estimated by the World Bank at $3 trillion, and the underinvestment in education and healthcare.
Mohammad Ali Pate in his senate screening underscored the severity of the situation when he highlighted that without foreign aid, Nigeria would not have a functioning immunisation programme for primary health.
To address these problems, we need more spending and more personnel.
Realities of Implementation
So maybe the Oronsaye report is less of a ghost and more a spirit. The question is, what does that spirit mean, and why has it caught flight yet again in 2024?
The Minister for Information stressed that the intention was not to throw people out of jobs. The FG is promising the impossible: lowering the cost of governance, in a year when minimum wage must face statutory review, without substantial job losses.
This is not to talk of the substantial one-off costs that we’ll see from moving people around, setting up appropriate office space, rehousing departments, the list goes on.
An important reality check, the move is not likely to reduce the nominal cost of governance any time soon, but is that really what people want? I know they say they want it, but if they were to see it practice, would it not face resistance?
Reassessing Budget Priorities
On one hand, you have the boogeyman of the luxury SUV, symbol of the opulent foreign tastes of our lawmakers and ministers. However, if you cut every single car from the budget – estimated at N85 billion by Statisense – you wouldn’t make a dent.
By contrast, this year, personnel costs are set to rise substantially as minimum wages goes up. N6.5 trillion was budgeted for personnel.
Debt servicing will be N8 trillion calculated with an exchange rate of N750. Altogether that’s N14.5 trillion. There’s already been pruning and higher revenues, so predicted revenue is N18.32 trillion.
That’s 79.1% of your revenue. You’ve got N3.85 trillion of your revenue left for everything else if you don’t want to cut jobs, default on loans or continue to borrow.
A very sticky situation which underscores the fact that the popular symbols of wasteful governance have not much to do with actual government spending
Efficiency and Asset Utilization
Moreover, the real spirit of the Oronsaye report is the efficiency of government spending. When people think of the FG’s personnel, the mind wanders to the 48 or so ministers, their SAs and SSAs, to the permanent secretaries and the countless DGs of various agencies.
These aren’t where the real numbers go – IPPIS, which doesn’t even pay all FG employees, can give you a sense of this. As of October 2023, IPPIS was responsible for the payment of over 1.1 million Federal Government employees – that includes teachers, soldiers and doctors too.
Those aides and ministers are a tiny drop in the ocean which distort sober reflection. The real question is, how are these 1.1 million people recruited, and are they being utilised to the best of their potential
Identifying Challenges
This leads me to the three stampeding elephants in the room as I see it. The first is coherence. The reason we have such an unwieldly public service is that, despite the strides we’ve made over time towards rationalising and keeping stock of agencies, we still lack a coherent view of governance.
This results in the kind of siloed working which sees separate MDAs working on the same issues with little to no communication between themselves, that is when we’re lucky and they’re not competing.
Rather than being iterative, looking at what we have and improving on it, politicians are rewarded for being pioneers, so they are perversely incentivised to set up new committees with new snazzy names and not to cede ground in accepting that they’re building on the work of their predecessors.
The second is transparency. The opaque operations of the Federal Character Commission – which has repeatedly been accused of job racketeering – and the generic nature of recruitment means that civil service roles are not generally accessible without connections and are not generally fitted to the competencies we need, but rather the individuals that MDAs want to hire.
This also creates a chasm between the public and the agencies which serve them, whilst enabling the interference of private interests in recruitment practices and disciplinary processes to all our detriment. Who has ever seen a job ad for the thousands of roles at the CBN?
This opacity opens room for fraud, MDAs spend more time clarifying that they aren’t recruiting in the face of fake job ads than they do telling us that they are and how to apply.
The third is effective asset utilisation. Several budget lines were dedicated to establishing new offices for new MDAs like the Ministry of Petroleum Incorporated in the 2024 budget.
One wonders how much attention is paid in these processes to utilizing the abundant real estate assets in the FG’s possession to cap costs.
Dr Ayo Teriba spoke recently of the urgent need to establish a MOFI deal room to bring MDAs on board with finding innovative uses for the FGs assets and identifying opportunities for commercialization. If truly efficiency is the FG’s primary aim, there’s no better time than now to get the ball rolling.
It’s perhaps political suicide to argue that the Government doesn’t spend enough, so I can understand why this move was presented in terms of cost of governance. But facts are stubborn, and data doesn’t lie.
If the FG doesn’t come clean on the fact that implementation of the Oronsaye report won’t result in the kind of dramatic reductions in expenditure that its mention conjures in the minds of those with fantasies of a Nigerian Milei (Argentina’s new anarcho-capitalist president), it’ll create an even bigger problem for itself.
In short, while the implementation may aid efficiency, don’t expect the governance bill to go down. Personally, I don’t think that’s such a bad thing.
I somewhat disagree with this article’s narrow focus on the Federal government. The FG in this country spends plenty, relative to its constitutional duties and obligations in our Federation, and in fact much of that spending, although some of it Is of questionable efficiency, only accounts for 52% of total government spending in this country.
However, this overlooks the remaining 48% of government spending, distributed between the State and Local governments..
The inefficiencies in government spending, rightfully identified by the author, predominantly occur outside the Federal capital, rather than within it.
It’s worth noting that not just the Federal level but also the 37 federating units and the 774 local governments across the country probably need their own versions of the Oronsaye Report to address these inefficiencies comprehensively.