Buhari left Tinubu blueprint to save $340m yearly by cutting govt cost
Former President Muhammadu Buhari, in his last full year as the country’s leader received a report on the review of the Oronsaye report that lays out a blueprint for how his successor can save N260.9bn ($340m) yearly by cutting governance costs.
BusinessDay has obtained the 200-page report titled “Rationalisation of Government Parastatals and Agencies 2022.” The report is a review of developments since the work of the Oronsaye Committee and recommendations to the Federal Government for decision.
The Presidential Committee on Salaries and Wages tasked with the review of the composition of the governance structure recommended that 45 government MDAs should be abolished, eight be privatised and 32 be merged with other establishments.
They also recommended that 54 agencies, mostly those prescribed by the constitution be left intact, 16 be relocated to another MDAs/Office for supervisory purposes, and 45 be audited, restructured, or commercialised.
“With the formula designed for computing the cost saving to the benefit of the Government due to the implementation of the recommended changes to affected MDAs, the total of N260,971,570,693 was estimated as the annual saving as from the 2024 financial year. This figure is conservative as bigger values are expected in subsequent years,” the report said.
Some far-reaching recommendations made by the committee include granting universities financial autonomy, handing over the management of Polytechnics and Colleges of Education to state governments and a presidential panel constituted a study to review and rationalise research institutions.
“Given the failure to live up to their expectation as centres of excellence and the continual industrial crises which bedevil them, a broad-based presidential panel should be appointed to critically review the Government-owned hospitals, namely the Teaching Hospitals, the Federal Medical Centres, the National Hospital and the Specialty Hospitals, and recommend the best options for their ownership, management, and funding,” the report said.
President Bola Tinubu has given effect to the provision made in the recommendation that professional regulatory bodies, which are already under government funding, should be placed only on grants/subvention and encouraged to wean themselves of dependence on government funding subsequently.
The committee also called for a special committee to critically review the proliferation of new Armed Forces institutions and formations created in the past 15 years, with a view to rationalizing them.
A special panel should be appointed to critically review statutory dispensations where certain agencies of government are granted the right to directly source their funds from a government revenue source, which often leads to financial leakage or profligacy, it said.
Echoing the view of experts who spoke to BusinessDay, the Committee recommended that “a Minister for the Public Service should be appointed to take charge of the portfolio covering matters affecting the public service, which are substantial enough to be managed as a ministry.
Alternatively, the Head of the Civil Service may be upgraded to a political appointment, which should combine the office of the Head of Service with that of the Minister, the report said.
The Minister of Labour & Employment brought together a high-level Team of Experts grounded in the structure and operation of government and the public service, to carry out the assignment, under the oversight of the Minister himself.
The team undertook the assignment from 15th May to 4th October 2022, culminating in the report.
Experts have long canvassed the rationalisation of government agencies. “There is an urgent need to look at the cost of governance. The cost of governance in Nigeria is way too high and should be drastically reduced to free up more resources for development. Nigeria is spending very little on development,” Tony Edeh, Group Managing Director, Norrenberger, an integrated financial services group.
But successive governments lacked the political will, though virtually all of them since 1963 have set up a committee for review. Analysts are urging the Tinubu government to proceed with the same speed used in implementing economic reforms to cut government costs.
This will require the same diagnostics expertise brought to bear by Oronsonye’s team. This will involve lawyers drafting bills to implement the report, de-establish MDAs, merge others, and create new ones to replace them.
Since the Oronsaye report was produced, lawmakers have created about 100 new agencies according to BusinessDay calculations. The team that was constituted by the former President also encountered problems determining the exact number of government agencies that have been added since Stephen Oronsaye submitted his report in 2012.
“The most significant constraint encountered in the assignment was the inability to obtain the list of the organizations established since the Oronsaye Report was submitted,” the committee said.
