Tuesday, July 21, 2015



Let me begin by stating right from the onset that my candid opinion is that this debate, this discourse around cutting the cost of governance is being framed wrongly, but attractively within the paradigm of saving costs in order to fit with the regime of reduced revenue base rather than being approached from the perspective of good governance.What do I mean? Why am I saying this? Given the current dire economic situation, occasioned by the crash in global oil prices against the backdrop of a continuing global economic and political crisis; a context made even more critical by the recent ‘uncommon’ and historically unprecedented levels of impunity driven treasury looting spree; it has become part of the received wisdom that there is an urgent need to reduce the cost of governance through a reduction in the size of government in order to save resources for capital development.But while this may be so, it does not take into cognizance the entire picture nor is it derived from a sound understanding of the historical situation – that is the context in its historical development of Yesterday through Today to Tomorrow.My contention is that it is important, in fact decisively significant to approach this from the perspective of Cost effectiveness, and improving the Effectiveness and Efficiency of governance rather than simply from that of making more revenue available for spending.Furthermore, given the current situation of a deepening economic crisis, where workers in both public and private sectors are being owed arrears of salaries, where economic enterprises are folding up, where workers are losing their jobs and where as a consequence the unemployment rate has been rising [general composite unemployment rate now put at 24.1% (Q1 2015) from 8% in 2003 – NBS; with youth unemployment put at 45% in 2012 – NBS, and graduate youth unemployment put at 80% in 2013 – CBN];, it is important to put the question and seek the solution within the context of ensuring improved effectiveness and efficiency of governance without compounding the unemployment situation, and in a manner that can ensure economic growth that creates jobs and thus reduces unemployment drastically.This requires a paradigm shift. And undertaking this paradigm shift requires posing and answering a number of core questions.The primary question to pose is to ask what is the general and specific purpose of governance, of government? General in the sense of why do we as a society need a government and what kind of governance do we need in general? And specific in the sense of what is the specific goal, objective and socio-economic program of this new regime, this new government?For without posing and responding effectively to these questions it will be impossible to determine the potential size of government that will be needed to realize and implement the program, and as such also determine the potential appropriate cost of such a government and of governance over a given period.Let me elaborate a little on this. The public service we have now is one that evolved and have been inherited from the first republic through the second republic and the years of military dictatorship. In essence it was a public service that has evolved and been shaped by the declared purpose of the state during that period, which is a ‘Developmental state’. This was a state that was an interventionist state and that played a decisive leadership role in the development process including in developing the private sector, private capital, and therefore an indigenous based capitalist or market oriented mixed economy. Hence the size of the government and its bureaucracies; Nevertheless these were professionally effective and productive bureaucracies.
We all can recall a few examples: the Public Works Department [PWD] for instance which built and maintained roads among other things; the Public Health Department which among other things undertook environmental sanitation duties as well as also health inspection duties etc; the Housing Department which among other things not only gave approval for building constructions, but also built and maintained housing units across the country [we can all remember the low cost public housing units of the NPN in the second republic], while also inspecting buildings to ensure their integrity etc; or the Railway Corporation which ran a successful rail road system for decades etc.These are just a few examples; but they nonetheless buttress the point of the size of governance being commensurate with the nature and purpose of governance.Part of the inherited challenge of the present times however is the fact that although the current state, and nature of government is no longer developmental and interventionist in purpose, we have retained governmental structure and size built for a state that is no longer developmental. The process of retreat from the developmental character of the state and the mixed economy nature of the economy began in the 1980s and was driven by the global neo-liberal response to the then global economic crisis, manifested by the various ‘austerity programs’ and variants of the imperialist imposed ‘Structural Adjustment Programs’ [SAPs].The most significant indicator of this paradigm shift from a Keynesian developmental state to a classic neo-liberal state was in the retreat of the state from the economy and from social services, a process underpinned by a movement away from integrated time bound, periodic development planning process to the less cumbersome, but spending focused Expenditure Frameworks. In this process the annual budget became an instrument not for development planning and realizing set objectives and targets in the development plan; but instead it became an instrument for organizing annual expenditure layouts within a periodic three year expenditure framework.
Expenditure frameworks – revenue utilization and allocation, not generation and increased productivity, became the focus of planning; and the state became the center for organizing spending, not the center for generating growth.A significant outcome of this process has been the unprecedented levels of corruption and impunity that has underpinned this rising rate of treasury looting we have seen in recent times; a process that gathered pace from the 1980s, and entered unsustainable levels in the last six years.Because by transforming the character of the state and its purpose without altering its structure and design, a lot of room was left open for leakages, wastages, dubious duplications, and outright stealing and public theft.Another consequence of the retreat from the developmental state has been the failure of governance and of the development project in the country; a process that is exemplified in the fact of the collapse of social infrastructures and basic services and the commensurate steep decline in standards, a situation that has seen the country move from the frontline to the rear in terms of global rankings of human development indices etc.The situation is underpinned by the phenomenon of growth without development, non-inclusive growth, and the paradox of increasing national wealth and rising citizen poverty. So for instance although we are Africa’s largest economy, we also have the largest concentration of rich and poor people on the continent with the top 10% of the population owning and controlling 40% of national wealth while the bottom 20% of the population own and control a mere 4.1% of national wealth. This is one of the widest gaps between rich and poor anywhere in the world.This is why it is important to properly situate the context for this discourse. We as citizen, and the current regime must determine our response to what kind of state, what nature of governance and what size of government we actually need.
For citizens our answer need to be clear, what our country needs at this moment in its history is a developmental and interventionist state at the very least. A state that leads the development process, a state concerned with the basic needs of citizens, a welfare state.This requires a return to the development planning paradigm. We must demand of this regime that it set out its human and economic development vision, goals, objectives and plan for its Four Year tenure. We require a four year integrated development plan, complete with an operational and implementation framework.
This plan will not only set out objectives and targets, but also set out the means of achieving these set goals and targets as well as the potential cost of achieving the plan.It is only within this context that a pragmatic, scientific and rational decision can be made on the size, structure, and purpose of government.
With this decision on structure and size and purpose of government made and informed by the goals, objectives and targets of the development plan, and with systems and mechanisms put in place for cost effectiveness, it will now be possible as a consequence to measure effectiveness and efficiency of governance and determine appropriate cost of governance.Let me illustrate the relationship between effectiveness and efficiency of governance and cost of governance with some examples.The most significant example can be drawn from the power, energy and transport sectors. If the power sector was working effectively and efficiently, and we were generating, transmitting and distributing power commensurate with our needs, then we would be able to reduce cost by doing away with the necessity for generators, and fuelling and maintaining these generators in the public service and in the private sector.
If we had adequate domestic refining capacity for petroleum products then we would eliminate the necessity for the wasteful import regime that is so prone to abuse and corruption.If we had a well-integrated transport system, then we would be able to better and more efficiently organize haulage of goods and services, reduce cost of undertaking these, use rail road and air cargo transport to take advantage of economies of scale and reduce cost; while also reducing level of carnage, level of deterioration, and cost of repairing roads across the country.If we had a public housing policy and a system for public housing provision, not only would we reduce the cost of housing, we would also reduce effectively the housing deficit put at 18 million housing units by the past administration.Getting all of these done would spur economic development and economic growth, but more importantly, it would make growth inclusive, create and generate jobs, reverse the growing unemployment trend, reduce the gap between rich and poor; the consequence of which would be enhanced human development driven by a robust economic growth.But this will also necessitate a paradigm shift, the construction of a development and interventionist state, and a return to an enhanced development planning system.To conclude, it is important to note that the challenge is to ensure cost effectiveness in governance, to ensure effective and efficient governance, and to build a developmental state in such a manner that waste and leakages in cost of governance can be eliminated, economic growth and wealth redistribution can be achieved, while reducing unemployment and generating jobs, on the basis of increased productivity.In the interim and immediate what is needed is to put in place measures to block all leakages and avenue for wastage; identify, probe, prosecute and punish all corruption cases and culprits, while also taking steps to recover looted funds.Underlying the process that needs to be put in place is to ensure a multi-stakeholder approach and structural framework to carry through what needs to be done.
Thus the answer to reducing the cost of governance is not as simplistic as, and should definitely not be reduced only to reducing the numbers of and merging MDAs, retrenching workers, and cutting salaries, emoluments and allowances, including cutting number of political appointments.While some of these are necessary albeit very superficial, some of the above can also be counterproductive in the medium to long term, such as arbitrarily merging MDAs without a program blueprint for governing, or simply laying off workers because the public service is perceived to be over bloated etc.


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