Cost of governance: Is public sector downsizing escapable? – part 1

It is no longer news that the Nigerian economy has officially entered into recession. This announcement by the Minister of Finance is just a formal acceptance of a reality which most Nigerians, especially those working in the public service, have felt for the past few years. Out of all the 36 states in Nigeria, only a very few states have been able to conveniently pay the salaries of its workers. Even the FederalGovernment is borrowing to pay its workers’ salaries! The result is that many workers have been left existentially stranded, and more significantly, the economy has been paralysed because of the unceasing industrial action by several unions in the states. The effect of all these on the productivity profile of the Nigerian economy is terribly gloomy. The naira has been in a downward spiral for a while now; corruption saga has become a recurrent refrain on the national media space; production of crude oil, Nigeria’s mono-cultural economic product, has been rudely disrupted by militants in the Niger Delta as well as sundry global forces. On the whole, there are so many things currently wrong with the Nigerian state and its economic dynamics.

It would then seem that the change slogan of the Buhari administration is being resisted at all corners by several economic forces and intervening variables it did not bargain for, anticipate and which perhaps, requires that much more strategic policy intelligence than is currently in place, be deployed. This is now a fact for all to see. But the other fact is that change within the Nigeria socioeconomic context is urgently required if there is to be any significant national development. And to all intents and purposes, the administration’s confrontation with a few policy conundrums, like the anticorruption campaign, is highly commendable. Yet, there is more that needs to be done. Here is a fundamental advice that the president might be wise to take from a former president of the United States, Franklin D. Roosevelt: “The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something.”

One of Nigeria’s failings is that we fail to experiment at certain critical policy levels. And if there is an issue which demands “bold, persistent experimentation,” it is the cost of governance distress Nigeria has been facing for a while now. True, the Buhari government has paid attention to this, but we need more than cosmetic reduction in personnel and structures to achieve a significant restructuring of the economy. The Nigerian presidential system of government is one of the most expensive in the world. It is as if the system was manufactured to gulp scares resources. When Lamido Sanusi Lamido, the former governor of the central bank of Nigeria, raised the alarm sometimes ago that close to 30% of the national budget goes to servicing overheads in the national assembly, we were just about scratching the surface of the cost of governance trouble Nigeria faces. The national assembly is just one tiny side of the equation; the entire public sector institutional architecture really needs unbundling and downsizing.

The cost of governance problematic is a huge one. In recent times, the media have been shocked by the humongous figures, in billions of naira, that were recovered from a perfected system of siphoning involving “ghost workers.” Efficiency and productivity are sacrificed on the altar of numbers, while the trade unions remain vigilant in guiding the affairs of those who ordinarily ought to benefit from severance from the public sector.

Rightsizing has always been the obvious and easy antidote to high cost of governance dilemma. In fact, it constitutes the first condition in a restructuring exercise that ought to automatically lead to a productivity revolution to be supervised by a debureaucratised managerial public service primed for national growth and development. The sign is clear: with the stark phenomenon of bankrupt and non-viable states, Nigeria faces the danger of a significant economic collapse worse than the present recession. But then the solution is also clear: a radical, scientifically derived but humane restructuring not only reduces the cost of governance but also enables the diversion of cost saved to infrastructural development. If it must be done however, then the payroll and institutional restructuring, using productivity audit tools, must be extensive enough to involve the review of all appointments in government that are funded from national revenues and the entire expenditure of government. It is only in this sense of unbundling and restructuring of the entire expenditure structure of government that the government could go with clean hands to equity to negotiate with the trade unions the rightsizing inescapable option. But then, as Banchao, the Chinese diplomat asked, “How can one catch tiger cubs without entering the tiger’s lair?” How can great governance deeds be accomplished without uncommon courage and perspicacity?
To be continued

Olaopa is Executive Vice Chairman Ibadan School of Government and Public Policy (ISGPP), Ibadan can be reached via [email protected], [email protected], [email protected]