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FG’s cost cutting measures

Last week, President Muhammadu Buhari approved new cost cutting measures aimed at reducing the cost of governance. In the approval released by the Office of the Secretary to the Government of the Federation, the number and duration of foreign trips per quarter and the number of each delegation were reviewed downwards.

According to the new rules, all Ministries, Departments and Agencies (MDAs) are required to submit their yearly travel plans for statutory meetings and engagements to the Office of the Secretary to the Government of the Federation (OSGF) and/or the Office of the Head of Civil Service of the Federation (OHCSF) for express clearance within the first quarter of the fiscal year before implementation. Also, when a Minister is at the head of an official delegation, the size of such delegation shall not exceed four including the relevant Director, Schedule Officer and one aide of the Minister. Every other delegation below Ministerial level shall be restricted to a maximum of three persons.

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In addition, travel days will no longer attract payment of estacode allowances as duration of official trips shall be limited to only the number of days of the event as contained in the supporting documents to qualify for public funding. Really, there is nothing new in the announced measures that has not been part of the normal approval in the budget implementation processes. The rules have been there all along but were mostly observed in the breach.

The breaches have made high cost of governance a major stumbling block towards Nigeria’s path to sufficient public capital investments that address our infrastructural deficits. Yes, governance expenses are hugely disproportional to Nigeria’s developmental strides. Generally, since the return to civil rule in 1999, the share of recurrent expenditure in the federal budget has hovered slightly above 70 per cent and accounted for 78 per cent of 2018 federal revenue. In 2018, N6.25 trillion out of the N9.12 trillion budget went to recurrent expenditure, leaving less than a quarter of the total budget – N2.87 trillion – to capital expenditure. For 2019 and the proposed 2020 budget, the story is the same. This has triggered the resort to borrowing to cover the cost of capital expenditure, which keeps increasing the nation’s debt burden.

Regrettably, instead of fixing key infrastructure that make the public system to work, governments are far more interested with funding bloated recurrent expenses for running the MDAs. This has resulted in the abysmal low level of infrastructure development, high prevalence of poverty and sluggish economic growth. For Nigeria to make the walk along the required developmental threshold, it must run relatively lean governance structures.

These efforts to reduce the huge economic and financial burden of running this country included reducing the number of staff of the MDAs while the perks of civil servants were either monetised or reviewed downwards. Yet, very little has been done to sustain these cost cutting measures as they were more or less abandoned with each successive government. It is clear that travelling consumes a large chunk of the government’s overhead budget, which necessitates putting some limits on its expenditure as the new Presidential directives demands. The challenge really is that Nigeria belongs to numerous regional, continental and international organisations which hold endless meetings. Such organisations include UN, AU, ECOWAS, Commonwealth, OIC, ITU etc Many of these meetings are of doubtful benefit to the country. Restricting these expenditure limits to statutorily essential meetings is not enough.

Essentially, our public and civil servants enjoy going on foreign trips. So, as a way to make this new measure impactful, the National Assembly and the Judiciary should copy from the Executive and cut down on their foreign trips. Most importantly, it is hoped that the new measures would not go down the way of numerous cost cutting measures including monetisation that was sabotaged and rendered ineffective. Government should ensure full implementation of the new measures and go further into cutting other areas of waste.

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