Reduction in cost of governance: A step towards economic prudence

BY JOSHUA BAMIDELE

The recent directive issued by President Bola Tinubu, restricting ministers, ministers of state, and heads of agencies to a maximum of three vehicles in their official convoys, is a bold and laudable step towards reducing the cost of governance in Nigeria. This move, aimed at curtailing unnecessary expenses, is expected to have a positive impact on the country’s economy.

The directive, which also limits security personnel to five individuals, comprising four police officers and one Department of State Services (DSS) officer, demonstrates the government’s commitment to cutting costs and improving economic efficiency. This decision is particularly significant, given the country’s current economic challenges.

In January, President Tinubu took significant steps to reduce government expenditure by reducing his entourage on foreign trips from 50 to 20 officials and from 25 officials for local trips. Similarly, the Vice President’s entourage was reduced to five officials on foreign trips and 15 for local trips. These measures underscore the government’s resolve to address the nation’s economic woes.

To further reduce the cost of governance, the Nigerian government can adopt other strategies. One such approach is merging ministries, departments, and agencies (MDAs) with overlapping functions.

This would eliminate duplication of efforts and wastage of resources. For instance, the National Salaries, Incomes, and Wages Commission estimated that Nigeria could save approximately N1 trillion by merging or abolishing redundant agencies.

Implementing e-governance is another viable option. Adopting digital solutions can streamline government operations, reduce paperwork, and increase transparency. According to a report by the World Bank, every dollar invested in digital transformation generates an average return of $3.50 in economic benefits.

Reducing political appointees is also crucial. Limiting the number of special advisers, assistants, and other appointees can help reduce the financial burden of maintaining a large workforce. A study by the Nigerian Institute of Policy and Strategic Studies revealed that Nigeria’s political appointees consume over 70 percent of the country’s recurrent expenditure.

Providing adequate infrastructure is essential for improving the business environment, attracting foreign investment, and boosting economic growth. Investing in critical infrastructure such as roads, power, and transportation can increase productivity and competitiveness.

Enforcing the monetization policy is another area of focus. Discontinuing the provision of houses and vehicles to officers whose allowances are already monetized can help reduce unnecessary expenses. According to the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Nigeria loses approximately N300 billion annually to unnecessary government spending.

Conducting personnel audits is also necessary. Regular audits can help eliminate ghost workers and reduce redundant staff across all tiers of government. The federal government’s verification exercise in 2015 uncovered over 30,000 ghost workers, resulting in savings of around N100 billion.

The Oronsaye Report, which recommended the rationalization and restructuring of federal government parastatals, commissions, and agencies, is another significant step towards reducing the cost of governance. The report’s implementation is expected to save the government around one trillion naira.

In conclusion, President Tinubu’s directive to reduce the cost of governance is a welcome development that can have significant positive impacts on Nigeria’s economy. By adopting additional cost-cutting strategies and implementing reforms, the government can improve economic efficiency, reduce waste, and promote sustainable growth. It is imperative for the government to sustain this momentum and ensure effective implementation of these measures to achieve tangible results.

Joshua Bamidele (ACIB) writes from Lagos. He can be contacted via [email protected]