Recurrent Expenditure and the Re

Recurrent Expenditure and the Rest of Us

Ogwu Paul Okwuchukwu

The recurrent expenditure in the Nigeria annual budget is taking a substantial part of the public expenditure. Although the budget is more of an expected revenue and expenditure within a given period of time, it mirrors how our resources are managed and the areas that the different arms and agencies of government spend our money. A critical look at the budget proposal and the appropriation bills passed over time shows a rise in the recurrent expenditure. In this year budget presented to the joint section of the National Assemble, a total of 2.41 trillion naira was budgeted for the recurrent expenditure and 1.24 trillion budgeted for the capital expenditure. This puts the recurrent expenditure between 70- 74% of the total budget and 25 to 30 % of the budget goes to the capital expenditure. Considering the items covered in the recurrent expenditure, which includes payment of salaries, welfare and other overhead and personnel cost, it shows that less than 3% of the population will spend more than 70% of the money that will be generated in Nigeria. There are serious implications of this on an average Nigeria and also to the generation unborn. According to the statistics released by the Ministry of Finance, the data of the recurrent budget indicated as follows: 2006 -70.1 % , 2007-64%, 2008-71.4 %, 2009-67%, 2010-64.7 %, 2011-74.4%, 2012- 71.5%, 2013-67.5% and the current year-74 %.There are compelling needs to drastically reduce the recurrent expenditure and focus more on the capital expenditure so that the generality of Nigeria will benefit from the economy of the country. However, I doubt if the country for some years now has ever executed up to 50% of the budget. In addition to the small percentage of individuals that consume the greater percentage of the country resources, they also engage in executing the capital projects by way of corruption and other means. These anomalies can be seen in all the sectors of government from the executive to the legislature down to the civil service. For a reduction in the recurrent expenditure, the government needs to engage in far reaching reforms. Some of these reforms should include the following actions.

There is a growing need to streamline the ministries, parastatals and other MDA’s to make them efficient and effective in carry out their numerous statutory functions. The Obasanjo administration tried it but it was reversed by the Yar Adua administration. Although I believe Obasanjo’s administration should have done it earlier in his tenure. The numerous overlapping ministries and parastatals should be merged together and be made more professional and effective to reduce the re-current expenditure. The constant creation of several agencies and extra governmental agencies without strengthening the existing once should be curtailed. We seem to be coping what we see in other countries without looking at how efficient and effective they are in terms of our environment and cost of running the government. By streamlining and restructuring of the ministries and MDA’s, it would help in identifying the real staff strength of the different government agencies.

The current staff strength of the various ministries and agencies of government are over bloated. The government should be able to rationalise the staff and identify those relevant to the organisations they serve. They should also engage in massive retraining of some of the trainable staff members to ensure efficiency and effectiveness. A thorough auditing of the staff strength is needed. Also a careful identification of the ghost workers, those working with fake identity and fake qualifications should be flourished out of the system to provide space for competent and qualified individuals. The civil service is the engine room for policy formation and programme so deserves a high productivity work force. The government can reduce the large wage bill by the adoption of out- sourcing and the use of private sector services and consultancy to tackle some specialised jobs. This would also reduce the various obligations and labour demand .A high productivity civil service will provide an enabling environment for most sectors of the economy to thrive. The issue of good governance, transparency and accountability will also thrive under such condition.

It is disheartening that a good and sizable part of corruption in the country is perpetuated by the civil service

Added with the money allocated to the National assemble and political office holders, a very tiny proportion of the population say 3-5 % controls and uses the larger percentage of the country’s wealth, thereby leaving the greater percentage of more than 90% of the population to an ineligible percentage of the country’s wealth. It would be practically impossible for politicians to be corrupt without the active participation of the civil servants. A sizable number of the contracts in the ministries are done by the cronies and partners of the civil servants. It is no longer the issue of 10% but outright monopolisation of most of the minor contract jobs. There is an urgent need to curb the rate of corruption as the private sector especially the contractors in the ministries are side-lined by these desperate civil servants

It is very essential that the leadership through a deliberate policy and practical approach begin to reverse the trend of increasing recurrent expenditure and channel funds to capital projects and other critical sectors of the economy that have direct impact to the population. Some of these critical sectors include the maintenance, building and establishment of infrastructure. The investment in the social sector that include education, health, housing and other sectors that serves the greater percentage of the population outside the government sector. This will not only benefit the other sections of the population; but would also be of immense benefit in the long run to the government. This would also reduce poverty and improve the countries human development index. The importance of these critical sectors would also help in our macro -economics by reducing the amount of capital flight and the money the countries elite spend in sending their children abroad. In addition to the money they spend in hospital bills and medical tourism.

The investment in other critical areas like housing, with its multiplier effects in terms of job creation and stimulation of other economic activities, is capable of creating employment to a substantial percentage of artisans, technicians and other areas related to the generality of the population. In addition, the money should be channelled towards the re- development of the country’s industrial base and the creation of an enabling environment that will help the service sector of our economy.

There should be policies and programmes that will create an enabling environment for the private sectors to thrive. The money saved from the recurrent expenditure should be channelled to these needs so that the private sector will thrive and make its contribution to the economy. The private sectors in question are the medium and small scale sector and the unorganised informal sector. These sectors mentioned above with agriculture contribute a substantial employment generation and engagement of the population. These resources spent on the tiny few should be invested in incentives that will encourage agriculture, investments in power, roads, health, railways and other non- economic activities that enhance life of the citizenry.

The country is bleeding from the weights of the recurrent expenditure and the beneficiaries of the expenditure should realise that the country is made for all and not for the selected few.

There is also the need to ensure that the money budgeted for the capital vote is fully released and used judiciously. The units responsibility to monitor the implementation of the budget should be empowered and given all assistance to make sure it carries out its duty.

The high recurrent expenditure of a developing country like Nigeria should be minimised if we are to achieve an economic milestone in the world. The country still needs to build and improve its infrastructural base to meet up to some of the countries in Africa and the rest of the world. Also considering our demography as a country and the high level of unemployment, it is important we look at investing in those sectors that will create jobs and enhance our competitiveness in the global stage. We cannot sustain the current abnormally. We all know it has been existing for some time but there has to be a radical and deliberate reform to change from this anomaly. The leadership should cultivate an emergency team with the cooperation of all the relevant stakeholders to understand the need for change.

A country desirous of meeting her own set targets and playing a catch up to some other countries cannot afford to relax and spend all her money on a selected few. For a country to be recognised as a rich country, her citizenry should be able to benefit from the basic standard of living.