The Nigerian Economic Summit Group and the Open Society Initiative for West Africa, in a new report, disclosed that the size of the government in Nigeria is unsustainable and driving debt levels.
The report, titled ‘Debt Management, restricting and Sustainability in ECOWAS’, was recently launched at the Debt Management Office in Abuja.
According to the report, the size of government in the Economic Community of West African States countries aids fiscal weakness, leading to a challenge in resource management.
The report added that the fact that the 2021 revenue was below the budget for recurrent and statutory expenditure without the inclusion of capital expenditures and debt service affirmed the unsustainable nature of the size of the Nigerian government.
“The current size of governments in the ECOWAS region facilitates fiscal weakness. A common challenge with resource management in ECOWAS is the size of the government. This is reflected in Nigeria as the projected 2021 revenue fall short of budget expenditure on recurrent and statutory expenditure without considering capital expenditure and debt services. This is reflective of how unsustainable the size of government is and how it has been driving debt overboard.
“Consequently, the ECOWAS region has consistently recorded fiscal deficits from 2015 – 2021 at an average of -4.74 per cent of nominal GDP exceeding the ECOWAS benchmark for fiscal deficit to GDP ratio of three per cent. The in-commensurate size of the government relative to the government’s revenue mobilisation framework is pushing the government to borrow at an unsustainable level,” the report read.
The PUNCH had reported that the amount budgeted for personnel costs increased from N2.29tn spent in 2019 to N4.11tn in the proposed 2022 budget, according to data obtained from the budget implementation report of the Federal Government.
This shows an increase of N1.82tn or 79.48 per cent in three years, signalling a rise in the cost of recurrent expenditure.
The PUNCH had also reported that the Federal Government could save over N241bn if the Stephen Oronsaye report on public sector reforms is implemented.
The Oronsaye report, which was submitted in 2011, stated that there were 541 Federal Government parastatals, commissions, and agencies (statutory and non-statutory).
The report added that 263 of the statutory agencies should be reduced to 161,38 agencies and should be abolished while 52 agencies should be merged.
It further recommended that 14 agencies should revert to departments in ministries.
The Federal Government inaugurated a sub-committee to review the government white paper on the Steve Oransaye Committee report in November 2021.
Also, another sub-committee was instituted to review new parastatals, agencies, and commissions created after the submission of the report in 2014 till date.
While the former would be headed by a retired Head of Service, Mr Goni Bukar Aji; another former HoS, Ms Amal Pepple, would chair the latter.
The two sub-committees were given six weeks for their final reports with recommendations.
In February this year, the committees urged the Federal Government to temporarily suspend the creation of new parastatals, agencies, and commissions while submitting their reports to the Secretary to the Government of the Federation, Mr. Boss Mustapha.
The head of one of the committees, Ms Amal Pepple, during the submission of their reports, stressed, “Nigeria faces a fierce urgency of yesterday in reducing the cost of governance to ensure that we improve the living standards of the populace and not use Government as a source of avoidable wasteful spending.
“This is made more pertinent when we consider the fact that the year 2022 budget has a recurrent expenditure of 40.3 per cent (N6.91tn) and a Capital Budget of 31.9 per cent (N5.47tn), while the balance is made up of debt servicing and statutory allocations.”
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