High Governance Costs Linked to Presidential System, Others: RMAFC Report
By Patience Ikpeme
The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has attributed the high cost of governance in Nigeria to various factors, including the expensive nature of the presidential system of government.
Other reasons include, large bureaucracy, duplication of government ministries, departments and agencies, and endemic corruption.
According to Mr. Mohammed Bello Shehu, Chairman of the Commission, this has led to unsustainable recurrent expenditure, negatively impacting investment, industrial expansion, infrastructural development, and growth of the real sectors of the economy.
Speaking on the issue, Mr. Shehu highlighted additional factors contributing to the high cost of governance, including the high cost of public service delivery due to infrastructure failure, increased security costs resulting from insurgencies, kidnappings, ethnoreligious agitations, and armed robbery. He also mentioned the burden of multiple salaries and severance allowances, extravagant activities and expenditures, high domestic and foreign debts, and weak enforcement institutions.
In an optimistic note, Mr. Shehu praised the adoption of the Oronsanye report by the administration of President Ahmed Bola Tinubu. He stated that this move has the potential to drastically reduce the cost of governance, allowing for more funds to be allocated towards infrastructural development, ultimately benefiting the lives of the citizens.
Furthermore, Mr. Shehu commended the current fiscal and monetary reforms being undertaken by President Tinubu’s administration. He noted that their focus on price and exchange rate stability to promote sustainable economic growth and safeguard the livelihoods of Nigerians is commendable.
According to the Chairman, these policies will play a crucial role in cushioning the impact of hyperinflation in the economy, preserving the purchasing power of the national currency, and providing confidence to investors.
The RMAFC also praised the administration for its policies aimed at reorganizing the Bureau De Change Market to achieve transparent market operations in line with International Best Practices.
This policy, according to Mr. Shehu, will enhance credibility, transparent operations, and build trust among market participants, regulatory authorities, and the public. Additionally, it will reduce exchange rate volatility, minimize uncertainties in the foreign exchange market, attract direct foreign investment, improve financial inclusiveness, reduce speculative activities, improve regulatory oversight, and ensure effective monetary policy implementation.
In light of these developments, Mr. Shehu urged the present administration to consolidate the synergy and coordination between monetary and fiscal authorities. He emphasized that through the coordination of policies and the implementation of the Oronsanye report, a more stable exchange rate, controlled inflation, reduced cost of governance, and an enabling environment for businesses and individuals to thrive can be achieved.
Mr. Shehu advised the Committee on the implementation of the Oronsanye Report to consider the duplication of agencies, particularly those created after the report between 2014 to date. He stressed the importance of a holistic implementation to save funds for infrastructural development in the country.
To ease the burden caused by the subsidy removal, the RMAFC Chairman called on the Federal and State Government to utilize the increased allocations from the monthly Federation Accounts Allocation Committee (FAAC) judiciously. He urged them to provide adequate palliatives to the teeming masses in the country, alleviating their suffering.
