Recession: Will Cutting Cost of Governance be Enough?

Here’s a time when everyone has the answers – or so they believe.

On one side they call for the sale of national assets. The nation’s economic team, the Senate President and even billionaire businessman; Aliko Dangote think this is our only way out.

Some even suggest that, asides oil assets there are other government assets lying fallow- rotting away due to poor maintenance or neglect. They think that’s what should be sold. Take the poorly maintained national theater in Iganmu for instance. And there are more of such facilities in a poor state. Privatizing such will bring such facilities back to life thereby adding to the economy and also in the short term cash gotten in exchange can be injected into reviving the economy.

But there’s distrust for our leaders. The position of Nigerians is simple- won’t these assets be sold to the rich minority governing us? This fear is not unfounded. A similar process under Obasanjo was mismanaged.

“Many preferred bidders were said to have been replaced by those favoured by the former president and even those who never bidded for the companies”, Vanguard reports.

Another fear is, if the nation faces dire financial constraints in the near future how will it get out of it once these assets are already divested?

While the government hinted there will be buyback clause in the agreement. Nigerians are not hearing that.

And so the back and forth.

Organised labour said it will fight against sale of said assets, the Senate also kicked out the proposal. The people won.

But if the sale of assets is the best idea the FG has to upturn the nation’s circumstances – then we have a lose-lose situation in our hands.

So when former Anambra state Governor, Peter Obi gave a talk at The Platform, he cause quite a stir when he spoke on “Cutting the Cost of Governance”.

He refuted the sentiment that the nation needs to borrow money at this time as he says,

“Nigeria can still function on its income if only we learn how to cut cost.”

He went on to talk about practical steps he took to cut the cost of governance while he was governor. Cutting down the governors fleet, how his cook used to kill one cow a day in the government house before he stop it.

“We need to cut the cost of governance. No governor needs a house in Abuja; governors don’t live in Abuja.” Another of such steps he took.

At the end of it all, the former governor said he left over 150million naira in the state treasury without taxing his people as much as Lagos does.

Recurrent expenditure in the 2016 Federal budget is 70%. And that has been the trend, 74.4 per cent in 2011, to 71.5 % in 2012, and further to 67.5% in 2013, but rose back to 74% in 2014.

A report by Afenifere Renewal Group says “For three years in a row 2011 to 2013 recurrent expenditure performed 100 per cent while capital expenditure never hit 60 per cent, except in 2011 where it recorded 80 per cent performance.”

And it makes a clear point that “An average of 70 to 30 for the recurrent and capital expenditures portends danger for a stagnating society limited by infrastructure capacities”.

For instance out on the 115 billion naira allocated to the National Assembly 105.4 billion naira is for recurrent expenditure whileN9.6 billion is for capital projects.

Out of which the Senate purchased “36 / 108 utility Land Cruisers at the cost of N36.5 million each,” Vanguard reports.

But Daily Trust reports this is twice the actual price of these vehicles.

But that’s just a casual look into the Senate’s affairs. How about the low chamber- budget padding?

Omojuwa, on Twitter put the figures in perspective:

And this is just one arm of government.

At the end, Obi says even with the current economic state “this country today can spend and save” if those in power chose to be responsible with their expenses. And the people “stop celebrating criminality”.

But what happens to these funds once they are available?

What should the overall state strategy be going forward?

The former governor doesn’t speak on this. The Buhari administration also doesn’t have a clear approach, even if it does- Nigerians are not sold on it.

Indeed we need to cut the cost of governance. And beyond that, we need a clear framework for our economy.

(This piece was updated to include Omojuwa’s Tweets.)

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