Nigeria Matters

High Cost of Governance, Bad Governance: The Relationship

What I will say very briefly without appearing to criticise anybody is that our cost of government is too high. Our cost of running the ministries, and the National Assembly, all of which are current, and the benefits of which deliberately relate to certain persons and do not indeed really benefit the generality of Nigerians is too high. And because of that very high cost, there is little left for capital projects. Again of course, we know that the level of efficiency in even utilising that capital sum over the years has been questionable. We only hope that better things will be done”. – Chief Joseph Sanusi, Former Governor of the Central Bank of Nigeria.

In reality, nobody should be surprised by the statement above. Even if not documented, it is there for all to see, feel, live and experience in the daily lives of the majority of Nigerians. However, I was further alarmed when I read the Nigerian Compass Lead Opinion of 3rd March 2009 when it counselled the Federal Government of Nigeria to shrink the incredible cost of governance in the country.

We should all be alarmed and fearful. What is going on in all the three tiers of government is tantamount to, if not worse than, bold-faced, daylight armed robbery of the people of Nigeria. It is calculated that our rulers consume over 80% of the total revenue that accrue to it in the name of governance (Holy Molly). If this is not daylight, brazen robbery, please tell me what it is. This issue again highlights that our various Nigerian governments, and others before them are highly irresponsible and insensitive, and hence the reasons why we find ourselves in the mess we are in today, and to which escape seems very impossible, unless really very drastic measures and actions are taken.

I do not think there is a need to reproduce the Nigerian Compass Editorial here because of space, but one of the crux or factors that are gulping our income is the emoluments of public office holders. According to Nigerian Compass, the emoluments (salaries, allowances, perks, etc) of 17,474 public office holders and the judiciary at all tiers of government amounts to about 1.2 trillion Naira per year, gulping about 60 to 70 % of our national budget in a country of 140 million people. And if we add N46, 000 per day allocation to each senator for biscuits and tea (in a hot country), the choice of cars in the convoy of these political appointees, the cost of governance becomes monumental. Surely this cannot be right and is unsustainable. It also shows that our political office holders are not serving us, but serving their own pockets, and we are serving them too. It is a master-slave relationship. But remember, our current President called himself a Servant Leader. Indeed. In effect, Nigerian politics is self-serving instead of a call to service. Public office holders live far above the citizens they are expected to serve, thus becoming disconnected from the sufferings and yearnings of the people.

With all these waste and profligacy, corruption, mismanagement, it is no wonder that governments, all three tiers of them, hardly have any money left to carry out infrastructural development or maintenance, hence the poor and moribund states of our roads, railway, waterways, healthcare system, schools, electricity generation and distribution, agriculture and even public buildings. The government simply do not have enough money to do anything about provision of basic amenities to their people, because the money has gone into individual pockets.

In writing this article, I came across a speech by former President Olusegun Obasanjo, made on June 25, 2003 while inauguration of the Technical Committee on the Review of the Structure of Local Government Councils. He advocated “improving the effectiveness of local government as a vehicle for promoting and sustaining grassroots development” and that “unless the existing local government system is reviewed and restructured to promote greater accountability, optimal performance and drastic reduction of the current astronomical cost of operating the system, the yearnings of our people will be unwarranted”. That was in 2003. Six years later, what has really changed? Was Obasanjo’s proposals ever implemented? In fact, things seem to have gone from bad to worse. This is why I do not take the words or speeches of our leaders serious. They like going to commission or launch projects, accompanied by the best speeches and rhetoric in the world, and full of promises, but as soon as they leave, that is the end of it. I am not sure if the Committee that Obasanjo inaugurated on that day ever came up with anything, or if they did, implemented their recommendations. So is the case for many of these so-called reviews, white papers, green papers, etc. Nothing even comes out of them to better the lives of Nigerians.

Government, at any given level and over a defined territory can be treated as a typical example of a natural monopoly (Adewole and Osabuohien, 2007) and like any other unchecked private monopoly, government and by extension governance, can produce sub-optimal units of public good in which it has comparative advantage. Thus, we see the substandard public service that various governments have been rendering to Nigerians over the decades, without care. Nothing is done right because they have no competition, and most instructively, because they are never held accountable by the public. In fact, we seem to urge them to perform worse each time.

Furthermore, this irresponsible, corrupt mode of governance is put even more under pressure as the scale of the global financial crisis becomes clearer, and its repercussions are felt in every corner of the world, and the extent to which entire societies will suffer will depend partly on the quality of their governance systems. Those countries with governments that enjoy the respect and confidence of their citizens are likely to weather the stresses more easily than countries where politicians are viewed with disdain, Nigeria being one of the latter.

I suspect that Nigeria will be hard hit by the crisis, for several reasons. The main one is that during the past 35 years since the oil boom of the early 1970s, Nigeria has not risen to the challenge of responsible governance by developing economies based on productive industries and other economic sectors. Its economy and politics has been largely based on a platform of monumental and unchecked official corruption and inefficient bureaucracy and other resultant vices that accompany such.

Responsible energy producers have enjoyed using their vast income to develop their countries in a speedy and impressive manner, but without shifting dependence away from oil and gas exports or imported labor. Conversely, Nigeria, a major world oil producer neglected to exploit the oil-fueled international boom and the several hundred billion dollars income they received, and thus did not move towards economies based on productive human resources, creativity, and efficiency.

The net result has been that Nigeria today comprises a sharply polarized population, with about ten percent super-wealthy people (whose main source of wealth are very questionable) and the rest living in abject poverty at worst.

The price of oil has dropped sharply in the recent months, by nearly 60 percent, from almost $150 to under $50 a barrel. Combined with the retreat of global stock markets where so much money is invested, this means that both current income and investment income are dropping fast. And we find our governments clueless and running around like headless chicken.

The problem reflects the cumulative consequences of decades of bad economic management that was camouflaged by oil income and the thrill of globalization. Nigeria’s economy is headed to a crash currently, and we find ourselves particularly weak and vulnerable, given our lack of economic and financial sovereignty. This is not a problem we can blame

on anyone else, other than ourselves. It is an economic management problem at one level, but deep down it is a failure of political governance. Not surprisingly, the major movements of our time in Nigeria – Christians, Moslems, tribalists, democrats, lobbyists, ageing nationalists and others — do not have answers to this problem, either.

This is a moment of potentially historic change for courageous and honest leaders who will stand up and tell other political leaders and Nigerians the truth about their failures, and suggest a more rational path to national revival, security and well-being. The current global crisis will hurt, but what will hurt more is to respond to it with the same combination of technical incompetence and political irresponsibility that have guided Nigerian national development for many decades now.

But our clueless and inept leaders do not care or seem to understand that they are steering the country towards anarchy and mayhem. In fact, they are not steering at all, because they a busy squabbling over the looting of the treasury, thereby leaving the ship rudderless. This is how best I can view it. Just take a look at what happens everyday at the National Assembly. Our “elected” representatives wake up in the morning, some of them do not even bother to attend their sessions, and those who do go to the Assembly, sit down, hurl abuses, chairs and blows at each other, then collect ridiculous sums of money at the end of the day, through inflated salaries, bribes and other gratifications. That is their business done for the day. That explains why in Nigeria, politics is a “do or die” business. Those who are there, mainly as a result of rigging never want to leave while those who are still out and want to get there will do anything to get there.

But where do all these leave the ordinary Nigeria who is simply asking for basic facilities to enable him/her to survive in the world? It is really grim prospects for them. There seems to be no hope. And this is why I said that the high cost of governance in Nigeria, mainly because of corruption and inept management practices, is not only costing us an arm and a leg, but is costing us our lives as well.

So where is the solution? My suggestions are not new. They are common sense and everybody knows this is what should be done. In fact, our leaders are aware of what should be done; only they do not want to do it, because it may not be worth their while, or it may simply be that they do not know how to do it.

Frugality and better governance are good places top start. However, with our unabated and unchecked corruption, we do have a hope in hell. We do not need to be told that working and living in the Nigerian bureaucracy long enough and one realise the level of waste, ineffective spending, corruption, lack of transparency and impracticality of the modus operandi. There is no doubt that our bureaucracy is made up of talented, well-meaning and visionary leaders who need to tone down on their ceremonies, rhetoric, luxurious study and other official trips and foreign jamborees, excessive publicity and propaganda campaigns and focus on tapping best practices and ingraining their departments with a way of planning and thinking to optimize each dollar of state revenue, and start thinking less of their own pockets, but of the people they are supposed to serve.

According to the Nigerian Compass opinion, with the future of oil earnings unpredictable, there is the urgent need for a comprehensive governance reform to cut down the bloated cost of governance, which has starved essential welfare projects of funds. I am of the opinion that the most important thing is that Government must be made unattractive to people who think getting into government is a means of making money. When people know that being in government, either as a politician or as a civil servant is not a lucrative way to make easy money, then we will be able to separate the wheat from the chaff. We will then know that those who are in government really do want to serve. It used to be like this a long time ago. Secondly, the salaries and allowances of public office holders must be drastically slashed (Nigerian Compass, 03 March 2009). Third, the bloated civil service must be reduced and the number of political jobbers called aides, special advisers, special assistants, etc, must be pruned to the minimum possible.

Board appointments is a major way of compensating political supporters and hence very self-serving, and these people are there mostly to “chop”. Their purpose is usually not reflected in their effectiveness or efficiency. Some agencies and Parastatal are created simply to serve these people and are just money-gulping, corruption-riddled quangos.

I do not see why official cars should be bought for Senators and House of Representative members every year. The same goes for the States’ Houses of Assembly. This is apart from getting transport allowances. Official cars, accommodation and other perks should be reduced.

All these may sound Utopian and overly optimistic, given prevailing state of the country, but all we need is A Few Good Men – and Women – to start it. Governor Fashola of Lagos State is showing that it is not impossible to turn things around even in the seemingly almost hopeless situation that we have found ourselves. Others can take the cue and follow. And if this does not work now, 2011 is around the corner to help us push the un-progressives out and put in new blood that will do what we want.

One thing for sure, Nigeria cannot afford to spend up to 80% of its income oiling the wheels of corruption in the form of useless, unproductive, greedy public office holders. It is outrageous and unsustainable. It is robbery. It is a waste of resources. It is now patently obvious that Nigerians have to take the initiatives themselves, in any way, to correct this system of wasteful and retrogressive governance, because the ones at the helm of affairs are unconcerned as long as the oil is flowing and the proceeds end up in their pockets, and only in their pockets. How do we go about doing that? That is the BIG question.

Let the truth be said always.

References:

Adewole, A M and Osabuohien, E S C. 2007 “Analysis Of The Cost Of Governance And Options For Its Reduction In Nigeria” Nigerian Journal of Economic and Social Studies, Vol. 49, No 1, March 2007.

Nigerian Compass Newspapers. 2009. “Reduce cost of governance” 03 March 2009. Editorial Opinion.

3 Comments

  1. A bloated goverment is simly another manifestaion of our inherently and irrevocably corrupt society. Jobs for the boys, means of siphoning public funds are the reasons behind a massive goverment. To change it will reqire moral and political will, alas dont expect any such from the current crop of thieves in power. You might as well ask Ali Baba to seal the cave. It aint gonna happen.

    Reply
  2. This is a nice one but how many of these economic rippers will read this article? If they do not read the article how will their conscience be pricked? Honestly, 45% of the squandered revenue will be more than enough to alleviate people’s pains from bad governance.

    Your reference to 2011 may be a clarion call to the progressives to come together and and flush out the mediocres out of government, power of incumbency notwithstanding. There must be a way to sensitise the people that they have powers to remove the rippers out of government by their votes.

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