Nigeria, Africa’s most populous nation and an economic powerhouse has faced longstanding challenges with the cost of governance. As the government machinery continues to expand, so does the financial burden on the nation’s resources. The issue of the cost of governance has become a contentious topic, sparking debates among policymakers, economists, and citizens alike.
The cost of governance encompasses all the expenses incurred by the government in managing the affairs of the nation. This includes salaries and allowances of public officials, operational expenses of government agencies and ministries, and funds allocated for infrastructure development, social programs, and public services, among others. Nigeria’s governance structure is multi-tiered, with a federal system, 36 states, and 774 local government areas, which adds to the complexity and scale of expenses.
The growing cost of governance in Nigeria presents significant challenges to the nation’s economy. One of the most pressing concerns is the allocation of a large portion of the national budget to recurrent expenditure, mainly salaries and overhead costs, leaving a limited amount for capital expenditure. This skewed allocation impedes investments in critical infrastructure and human development projects, hindering the nation’s overall progress.
Furthermore, the hefty salaries and allowances of public officials have raised eyebrows, especially when compared to the standard of living for the majority of the population. Such disparities fuel public discontent and diminish citizens’ confidence in the government’s commitment to addressing their needs.
The cost of governance also exacerbates Nigeria’s fiscal deficit, leading to increased borrowing to fund government operations. Consequently, this can drive up national debt levels and interest payments, diverting resources from essential development initiatives.
Several factors contribute to the burgeoning cost of governance in Nigeria.
The presence of overlapping roles and functions at various levels of government results in unnecessary administrative costs and inefficiencies.
The practice of appointing individuals to political positions based on loyalty rather than merit can lead to bloated government structures and increased expenses.
Nigeria’s bicameral legislature, with a Senate and House of Representatives, boasts a large number of lawmakers. The cost of maintaining these legislative bodies, coupled with substantial allowances, adds to the financial burden.
The overwhelming focus on recurrent expenditure at the expense of capital projects hampers long-term development and economic growth.
Of Nigeria’s 2023 N21.83 trillion total budget, recurrent expenditure has the highest allocation of N8.33 trillion, representing nearly 40 per cent of the budget. This, according to the budget includes a personnel cost of N5.02 trillion, overhead cost of N1.11 trillion, statutory deductions of N967.49 billion and pension, gratuity and retirees benefit at N854.81 trillion.
But the 40 per cent recurrent expenditure for 2023 is a consequence of the fact that the budget is historically the highest in the country’s history. In previous fiscal periods, recurrent expenditure had reached 72 per cent.
Further analysis of the budget showed that the sum of N6.31 trillion has been budgeted for debt service, representing approximately 29 per cent of the total budget, while capital expenditure has N6.45 trillion, representing 27 per cent of the budget.
The chief executive of Moneylinks, Life Asake, said to address the cost of governance in Nigeria, comprehensive reforms and prudent measures are essential. He stated that a critical assessment of government agencies and ministries is needed to eliminate redundancies and streamline operations that can lead to cost savings.
He also said implementing a comprehensive review of public officials’ salaries and allowances to bring them in line with economic realities and international best practices can help alleviate financial strain.
Also, a legal practitioner, Godwin Ogbu, said considering a reduction in the number of legislators and adopting a unicameral legislature, as opposed to a bicameral one, could reduce costs significantly.
Commenting on transparency and accountability, Ogbu said establishing robust systems to monitor government spending, audit public accounts, and ensure accountability is essential in curbing wasteful expenditure.
Also commenting on the cost of governance in Nigeria, a lecturer at Ebonyi State University, Nelson Nkwo, noted that prioritising investments in critical infrastructure, education, and healthcare will promote economic development and improve the lives of citizens.
“The cost of governance in Nigeria is a pressing issue that demands immediate attention. The financial burden of maintaining an extensive bureaucracy, coupled with excessive remuneration for public officials, poses significant challenges to the nation’s economic growth and development. Implementing comprehensive reforms, embracing fiscal discipline, and promoting transparency and accountability are vital steps in addressing this issue. By striking a balance between recurrent and capital expenditure and optimising resources, Nigeria can pave the way for sustainable economic progress and improved governance for the benefit of all its citizens,” Nkwo said.
On his part, a social affairs analyst and economist, Dr. David Wagbara, told NATIONAL ECONOMY that Nigeria’s high cost of governance is a deterrent and turnoff as the Tinubu administration is calling on Nigerians to make sacrifices in the face of the high cost of living sequel to the removal of fuel subsidies at the onset of the administration.
He noted that public officers are openly rubbing their wealth gotten from taxpayers in the face of downtrodden Nigerians.
Wagbara called on the public officeholders to live in moderation in times like these in a show of respect for ordinary Nigerians who suffer the pangs of poverty on a daily basis.
