The
Federal Government has proposed salary cuts for workers as a way of reducing
the high cost of governance in the country.
The
Minister of Finance, Zainab Ahmed, said the FG was working to reduce the high
cost of governance by doing away with unnecessary expenditures.
Disclosing
this at the policy dialogue on corruption and cost of governance in Nigeria
organised by the Independent Corrupt Practices and Other Related Offences
Commission in Abuja on Tuesday, she said the President, Major-General Muhammadu
Buhari (retd.), has directed the National Salaries, Incomes and Wages
Commission to review the salaries of civil servants as well as the number of
federal agencies.
Ahmed
urged all government agencies to come together to trim the cost amid the
country’s dwindling revenue.
She
said the government also intends to remove some superfluous items from the
budget in order to cut the cost of governance in the country.
She
stated, “We still see government expenditure increase to a terrain twice higher
than our revenue. The nation’s budgets are filled every year with projects that
are recycled over and over again and are also not necessary.
“Mr
President has directed that the salaries committee that I chair, work together
with the Head of Service and other members of the committee to review the
government payrolls in terms of stepping down on cost.’’
The
minister said that government will also review the number of government
agencies in terms of their mandates, adding that the government will consider
merging two agencies with the same mandate.
The
Director-General of the Budget Office, Ben Akabueze disclosed that the cost of
governance under the President Muhammadu Buhari regime has risen sharply from
N3.61 trillion in 2015 to N5.26trn in 2018 and N7.91trn in 2020.
This,
he noted, excluded the costs of government enterprises and transfers to the
National Assembly, National Assembly, and the National Judicial Council.
Akabueze
stated that recurrent spending accounted for more than 75 per cent of actual
Ministries, Departments and Agencies’ expenditure between 2011 and 2020.
Personnel
costs, he added, accounted for 40 per cent of recurrent spending in 2020 while
overhead was just three per cent.
The
DG stated, “There have been persistent calls for reduction of governance cost
in Nigeria in view of the impact on governmental fiscal situation. The current
system is clearly unsustainable; hence this national dialogue on corruption and
the cost of governance in Nigeria is very timely.
‘’Cost
of governance has generally been on the rise; actual MDA recurrent spending
rose sharply from N3.61trn in 2015 to N5.26trn in 2018 and N7.91trn in 2020.
This excludes the costs of government-owned enterprises and transfers to the
National Assembly, National Assembly and the National Judicial Council.
“Recurrent
spending accounted for more than 75 per cent of actual MDA expenditures between
2011 and 2020. Personnel costs accounted for 40 per cent of actual recurrent
spending in 2020 while overhead is just three per cent.’’
Speaking
further, the DG said in 2016, personnel cost was N1.88trn but it is now over
N3trn, accounting for 31 per cent and 63 per cent of total spending and
retained revenue, respectively in 2020.
He
compared the United States federal budget where he said general administration
cost, including personnel and overhead, was less than 10 per cent of the
budget.
The
economist identified drivers of high governance cost to include corrupt budget
practices, cabinet size, the multiplicity of MDAS, election cost, number of
political office holders and the bloated civil service.
In
his remarks, the ICPC Chairman, Prof Bolaji Owasanoye, SAN, identified payroll
padding and the phenomenon of ghost workers and abuse of recruitment as areas
of concern in governance cost, noting that the ICPC findings from health and
medical institutions indicate that many agencies still engage in unapproved
recruitment without obtaining the consent of all relevant organs of government.
Click to signup for FREE news updates, latest information and hottest gists everyday
Advertise on NigerianEye.com to reach thousands of our daily users
No comments
Post a Comment
Kindly drop a comment below.
(Comments are moderated. Clean comments will be approved immediately)
Advert Enquires - Reach out to us at NigerianEye@gmail.com