The Necessity of Orosanye’s Panel Recommendations
By Abdullahi M. Seidu
As a nation, we are accustomed to taking the easy route in accomplishing our objectives, and we expect the government to create desirable change within various sectors of the economy by also driving through shortcuts. But for a lasting change to take root, we need learn the virtue of sticking with the hard decisions and enduring temporary pain for long-term gain.
In 2005, the then governor of Central Bank, Charles Soludo, championed the merging and acquisition of banks by increasing their capital base from N2 million to N25 million. Then, it seemed the governor was overambitious and his overzealous plans will never come to fruition.
Today, we continuously reflect on the benefits of recapitalization, as Soludo's policy has repositioned Nigerian banks from reliance on public sector funds and better equipped them to finance bigger projects in the oil and gas as well as telecommunication sectors. If Nigerians take a cue from the 2005 recapitalization policy and its gains, they would better appreciate the benefits and wisdom in the Orosanye's report, which recommends that many agencies be merged and some scrapped!
The Minister of Finance, Dr. Okonjo-Iweala, has expressed her commitment to implement the recommendations in this report. As an economist with foresight, she understands mergers form the best method of combining resources to better serve the community, encourage rapid growth and, most importantly, reduce recurrent expenditure.
Currently, there are over 100 agencies in Nigeria with overlapping functions, as many of the agencies are mere duplications. There is also an enormous amount of non-ghost and ghost workers enjoying free government money. This let's-work-for-job-security-with-the-governmentmentality is eating deep into the nation's annual budget, where recurrent expenditures is almost eclipsing capital expenditures.
Last year, the recurrent expenditure was a high 74.4 percent and would be reduced to 68 percent if the Orosanye's committee's recommendations are faithfully implemented, as they are designed to also cut waste and block all leakages in the system while reducing bureaucracy.
The committee's report recommends that 38 agencies should be scrapped, the country would save about N124.8 billion from such scrapped agencies; and 52 others merged - the country would save about N100.6 billion from such mergers. Coupled with this is the recommendation that 14 existing departments that were upgraded to agencies should be reverted to their former status by appropriate ministries. According to the report, the country would also save at least N6.6 billion from professional groups; N489.9 billion from universities; N50.9 billion from polytechnics; N32.3 billion from colleges of education and N616 million from the boards of Federal Medical Centres.
Now, let's do the arithmetic: add over N200 billion to be saved through the implementation of the Orosanye's report into the nation's infrastructure deficit, it will surely equal a balance in the provision of infrastructure amenities which will benefit the generality of Nigerians.
Of course, it is probably unreasonable to expect that workers in the affected agencies will be ecstatic about the prospect of losing their jobs. But it can be argued that these agencies will become more effective and efficient; and more jobs are expected to be created from the saved funds that will injected into capital projects, thus providing more employment opportunities for Nigerians in the long run and boosting economic growth.
The Federal Government has already begun to reduce allocations to agencies with duplicate functions. Mrs. Okonjo-Iweala said: “We are continuing the roll-out of Integrated Personnel Payment Information System (IPPIS) across all Ministries, Departments and Agencies (MDAs) which will result in savings in personnel costs. In the spirit of the Orosanye Report, we have started trimming down allocations to agencies with duplicate functions. For the 2013 Budget, this resulted in about N100 billion of savings, and we hope to have even greater savings in 2014.”
With the continuous effort of the finance minister to cut recurrent expenditures and promote capital investments, the economic progress of Nigeria is being realized. It is always wise to cut, cut, and cut, until all resources are properly managed and adequately utilized.
Yes! Madam Ngozi, put the Orosanye's report into action. Your commitment to implement this report deserves applause!
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