Cost of governance: Is public sector downsizing escapable?

It is no longer news that the Nigerian economy has officially entered into recession. This announcement by the Minister for 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 Federal Government 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.

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.

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 sometime 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?

Restructuring arises from a conceptual understanding of the role of government in governance. Redefining the role of the state implies doing away in Nigeria, at the first instance, the claim that the Nigerian government is the largest employer of labour. That reputation exposes the government’s ignorance about its capability to generate wastage and undermine productivity. The essence of the managerial revolution in the public service is to interrogate government’s limited capacity to organise efficiency through the infusion of private sector and Diaspora skills and competences. In terms of efficiency saving, this is done through the application of an econometric calculus that suggests an optimal and affordable size of the workforce required in the MDAs and the public service at large.

One of the advantages of government instituting a constant conversation with the trade unions and other employers is that, at the level of the state government, a decentralisation framework can be established that ensures that wages are conditioned to the productivity profile and financial strength of each state rather than a blanket wage framework that ignores the economic reality which is presently being played out in terms of the incapacity to pay salaries.

One appropriate rightsizing method which the trade unions would applaud once they see its intrinsic benefits to the progress of Nigeria is a humane and properly crafted employability package that is attached to any severance plan for those who are due for retirement. Of course, the first source of fear is the perplexing cost that would be generated by the severance package.

Beyond this, severance from the public sector comes with a moral imperative concerning government’s care for those who have spent their productive years serving the government without any adequate attention to the acquisition of any post-retirement competences. Employability training ensures that public servants, while preparing for retirement or upon notification of redundancy, are prepared with skills and competences that could tide them over while out of service.

Restructuring is a critical business involving enormous risks but immense advantages for a country like Nigeria seeking national growth through a transformed productivity paradigm. But every effort so far have been met with severe reactions and public outcries. Most governors would prefer to evade the issue until the end of their terms to pass the buck to the coming administration. But then, there will be a critical point when the buck could not be passed again, and political courage would have to be cranked up to deal with it. I suspect we have all arrived at that critical juncture. It is either Nigeria will survive the cost of governance menace and properly restructure or her national coherence will fizzle out within a framework of avoiding responsibility.

Olaopa is Chairman, Ibadan School of Government and Public Policy (ISGPP), Ibadan, can be reached via tolaopa2003@gmail.com, tolaopa2003@yahoo.com tolaopa@isgpp.com.ng