On Monday, February 26, 2024, President Bola Tinubu directed the implementation of the Steve Orosanye report, which focuses on restructuring and rationalizing federal government parastatals and agencies.
The report, among others, seeks to cut the cost of governance by having some government ministries, agencies, and departments merged or scrapped due to duplication in activities, efficiencies, and others.
Background
In 2011, then-President Goodluck Jonathan set up the presidential committee on the reformation of government agencies, chaired by Steven Oronsaye, a former Head of Service of the Federation.
The 800-page report proposed reducing statutory agencies from 263 to 161, with recommendations to scrap 38 agencies, merge 52, and revert 14 to departments within different ministries.
Oronsaye’s report in 2012 highlighted the existence of 541 Federal Government parastatals, commissions, and agencies, both statutory and non-statutory. The numbers appear to have tripled; a check with the Federal Civil Service shows 1316.
Cost of governance
Nairametrics reports that the National Assembly passed the 2024 appropriation bill on January 1, 2024, raising its size from President Bola Tinubu’s proposed N27.5 trillion to N28.7 trillion. N9.92 trillion, which represents 43 percent of the budget, was allocated to non-debt recurrent expenditure.
However, the personnel component of Ministries, Departments, and Agencies (MDAs) is expected to cost N4.9 trillion of the budget.
One of the suggestions of the Oronsaye report is the consolidation of the Code of Conduct Bureau (CCB), Economic and Financial Crimes Commission (EFCC), and Independent Corrupt Practices and Other Related Offences Commission into a single agency.
In the 2024 budget, the EFCC presented N76.586 billion, the ICPC presented N14.525 billion, and the CCB presented N49 billion.
Potential for downsizing
The implementation of the Oronsaye report appears to only ‘scratch the surface’ in cutting the cost of governance while adopting a no-job-loss-palliative approach.
According to reports, the Federal Government currently has about 720,000 workers. Nairametrics reports that Nigeria’s unemployment rate currently stands at 5 percent. While the FG has repeatedly assured that the implementation of the Orosanye report would not result in job losses for federal civil servants, this appears contradictory as the report recommends a ‘merger’ or ‘scrap’ of some ministries, departments, and agencies.
A partial implementation of the report would appear not to achieve its aim of reducing the cost of governance in the country.
Constitutional bottleneck
The MDAs recommended for merger or scrap were created by acts of parliament that are backed by the law. Its implementation could set the FG on a path of interfacing with the legislative arm to achieve this.
Expectedly, this could take some time to achieve. There are various administrative, legislative, and constitutional measures that the government would employ to integrate the recommendations of the report into the governance framework of the Nigerian state effectively.
The Oronsaye Report’s suggestions regarding mergers, acquisitions, and eliminations must be carefully implemented to ensure a well-organized and effective restructuring process.
Any haphazard implementation would result in increasing the cost of governance through payments of severance packages and imminent lawsuits from trade unions and individuals. Also, it could potentially deepen the crisis within the civil service.
Recommendations
The Oronsaye Committee report, while a significant initial measure, is just the beginning of addressing Nigeria’s cost of governance challenges. It is a palliative measure that serves as the foundation for reducing the cost of governance and ensuring the effectiveness of the civil service.
The Federal Government must ensure a comprehensive public expenditure review (PER) of the MDAs to analyze their effectiveness. This will help identify areas of expenditure reduction to achieve the efficiency-saving targets, as most MDAs have higher recurrent expenditures compared to capital.
While the Orosanye report proposes a solution to cutting the cost of governance in the country, it’s a first-level approach to addressing the issues of governance. Also, the committee submitted its report in 2012, and implementing it 12 years later without a review could be counterproductive.
