Recurrent Expenditure: The National Assembly is Partly to Blame

Recurrent Expenditure: The National Assembly is Partly to Blame

If you are one of those that has always chosen to “conveniently blame” Goodluck Jonathan and Ngozi Okonjo-Iweala for the huge recurrent expenditure in Nigeria, then this is the very article that you must read:

The National Assembly is Partly to Blame

20 Jan 2014

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Behind the Figures By Ijeoma Nwogwugwu;

Primarily for political reasons, the House of Representatives has been at loggerheads with the executive arm of government over the management of the economy and in particular its implementation of successive federal budgets. Whereas it is not unusual for a party that is in the opposition to criticise and undermine the policies of a ruling government in countries that run a two party system, Nigeria’s case has defied the norm.

But then again, our House of Representatives, realistically, has always acted like it is controlled by the party in the opposition. Even when the ruling Peoples Democratic Party (PDP) had a clear majority in the lower chamber, the common refrain of its members has always been that they shall not serve as a rubber stamp for the executive. I often laughed inwardly at the lawmakers whenever they made this remark.

But with time, I have come to realise that the bane of our political system has been the absence of ideology. The lack of political ideologies that are largely concerned with almost every aspect of a society ranging from the economy to social welfare, health care, immigration, labour laws, the military, education, the criminal and justice system and even religion, has saddled us with lawmakers and politicians without a belief system. Is it any wonder that they whimsically migrate from one party to the other at the drop of a hat?

This brings me to the so-called 50 questions drafted on the state of the economy by the House’s Committee on Finance and the chamber’s resort to underhand tactics to hinge the passage of this year’s budget to the response of the Minister of Finance, Dr. Ngozi Okonjo-Iweala, on the questions. When the House released those questions just before the Christmas break, I called the committee’s chair, Dr. Abdulmumin Jibrin (I believe he has a preference for the title “Doctor” to the “Right Honourable”) and had a lengthy conversation with him on the object of those questions.

Of particular interest were a few questions his committee had presented to the minister. The rest were neither here nor there and could be answered by any insightful and smart undergraduate of Economics. One topic we spent time discussing was the federal government’s recurrent budget vis-à-vis its capital spending programme.

I made it abundantly clear that the National Assembly is partly to blame for the federal government’s recurrent expenditure, which for almost a decade has consistently accounted for 70 per cent, on average, of the federal government’s budget. Jibrin, naturally, bucked at my line of reasoning. But I persisted and got him to understand that the executive cannot be expected to cut recurrent expenditure without the understanding, cooperation and assistance of the National Assembly.

I reminded him that we have a labour movement that has periodically demanded for wage increases of workers in the public sector, we have witnessed the rise of salaries and allowances of medical personnel in the health sector, as well as university lecturers in the education sector. I reminded him that instead of our public sector growing smaller, we have seen the size of government grow multiple-fold since the advent of democracy in 1999. All these, I reminded him have an impact not only on its annual wage bill, it also impacts on how much must be set aside by the federal government for pensions.

The long and short, I informed Jubrin that the federal legislature, alongside labour, has by commission and omission been complicit in raising the federal government’s personnel costs. And whether we like it or not, it is high time we start to grasp the enormity of the problem that the country – at the national and sub-national level – is saddled with year-in, year-out funding its over-bloated public sector.

A review of the federal government’s budgets for a decade shows that personnel costs alone account for almost 50 per cent of total budgetary expenditure during the period. By the time statutory transfers, debt service and overheads are added, total recurrent expenditure inevitably rises to 70 per cent of total expenditure, on average. With this kind of pattern, it would be disingenuous for anyone to expect the federal government’s capital spending, which really drives economic growth, to improve.

Like I informed Jubrin, insofar as the National Assembly continues to legislate on new laws that set up more departments and agencies of government and lacks the political will to repeal or amend the laws of institutions that duplicate and inefficiently fall over one another, the executive would always be hamstrung by an unsustainable wage bill. The choice is there’s to make, I told Jubrin: The legislature, for self-serving reasons, could either keep playing politics with the economy or do the needful by rationalising and streamlining the public sector for efficient service delivery.

To be fair, it’s not as if the federal government is unaware of that this problem exists. The Obasanjo administration did make an effort to streamline the public sector between 2004 and 2007. But the Yar’Adua administration managed to reverse whatever small gains were made by its predecessor by reabsorbing a lot workers, who had been laid off because they had records of non-performance or infractions standing against them. More recently, a committee headed by a former Head of the Civil Service of the Federation, Steve Oronsaye, also undertook a diagnostic review of the public sector and made far-reaching recommendations for its rationalisation. However, it acknowledged that a lot of departments and agencies of government would be difficult to consolidate or wind up due to laws that established them. Yet the National Assembly has never stepped up to the plate to take its share of responsibility where reducing recurrent expenditure is concerned.

Yes, the executive is hopeful that some savings could be made with the introduction of an integrated payroll system that is automated and could help to eliminate ghost workers in the public sector. But whatever achievements it makes through this system would be miniscule relative to the larger gains to be made from the proper restructuring and rationalisation of the public sector.

So my advise to Jubrin and his colleagues in the National Assembly is that if they are sincerely concerned about the state of the economy, if they are really concerned that too much of the government’s revenue is spent on recurrent expenditure, and they truly want more resources applied to infrastructure projects that can drive economic growth and create jobs, they must recognise their roles in the larger scheme of things.

It is not enough for any member of the National Assembly, be it collectively or individually, to summon ministers and give them marching orders just because the constitution permits them to do so. They must also understand their roles and responsibility to the constituents that they claim to represent. They must understand that a country’s economic growth and progress is not just hinged on the policies of the executive, but also on the legislations churned out by its parliament.

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