Oronsaye report to test Tinubu’s cost-cutting champions

During a budget consideration meeting three years ago, Femi Gbajabiamila, the then Speaker of the House of Representatives, called for deep cuts to governance costs. Today as the president’s chief of staff, he has more clout in the corridors of power.

“We recognise that we cannot accomplish these objectives using loans and outside financing alone. Therefore, we need to impose deep cuts in the cost of governance and improve internal revenue generation and collection, so that we can free up resources that can then be deployed to fund policy initiatives that will enhance the lives of our people,” Gbajabiamila had said.

This was at the commencement of the Medium-Term Expenditure Framework and Fiscal Strategy Paper revenue considerations with revenue-generating agencies organised by the House Committee on Finance in 2020.

Today, as the man who manages access to the president and assigns priority to his schedule, he and others alike have their chance to prove they weren’t just blowing hot air.

As the leader of the tier of government that has created nearly a dozen new government departments and agencies since a government panel aimed at pruning down ministries and departments called for the elimination of over three dozen government ministries and agencies.

President Bola Tinubu’s team consists of economic experts and politicians who made their careers advocating for the sort of fiscal discipline the president’s economic policies have elevated into an existential concern.

Wale Edun, the president’s monetary policy adviser, while serving as finance commissioner under Tinubu’s tenure as governor of Lagos, ran a resilient operation marked by cost savings and expanding revenue to manage shocks including the seizure of the state’s local government allocation by the Olusegun Obasanjo government.

Members of the Tinubu Policy Advisory Council, including Tokunbo Abiru, a banker and politician; Yemi Cardoso, former chairman of Citibank Nigeria; Samaila Zubairu, president and/CEO at Africa Finance Corporation; and Doris Anite, Imo State commissioner for finance and coordinating economy, are well-known advocates for keeping the cost of governance down.

The council has put forward a proposal aimed at achieving a $1 trillion economy by 2030 that would be funded partly by implementing civil service reforms and recommendations contained in the Oronsaye report.

Since Tinubu announced an end to petrol subsidies, pushing the pump price of petrol three times what they were; and unifying the exchange rate, which triggered a hike in commodity prices and import duties, many Nigerians are demanding speedy implementation of the Oronsaye report so they are assured the government share in their pain.

Officially known as the Report on the Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies, submitted to the Nigerian government in 2012, Oronsaye report was commissioned by the Goodluck Jonathan administration in response to concerns about the size and cost of the Nigerian public sector.

The report was prepared by a committee chaired by Stephen Oronsaye, a former director-general of the Budget Office of the Federation. Other members were Japh CT Nwosu, Rabiu D. Abubakar, N. Salman Mann, Hamza A. Tahir, Adetunj Adesunkanmi, and Umar A. Mohammed as secretary.

Terms of reference

The committee was tasked with studying and reviewing all previous reports and records on the restructuring of federal parastatals and advising on whether they were still relevant;

It was to examine the enabling Acts of all the federal agencies, parastatals, and commissions and classify them into various sectors.

They were also to examine critically the mandate of the existing federal agencies, parastatals, and commissions and determine areas of overlap or duplication of functions and make appropriate recommendations to either restructure, merge or scrap some to eliminate such overlaps, duplications or redundancies and advise on any other matter incidental to the preceding which might be relevant to the desire of government to prune down the cost of governance.

Recommendations

The recommendations of the committee include the abolition of 38 agencies, the merger of 52 agencies, the reversion of 14 agencies to departments in various ministries, and the rationalisation of staff strength in the civil service.

The report argued that implementing these recommendations would save the government N1.3 trillion annually. It also argued that the proposals would improve efficiency and reduce waste in the public sector.

The Oronsaye report promotes efficiency and reducing waste in the public sector as well as advocacy for the removal of such extra-budgetary allocations like security votes, and cutting down allowances of lawmakers, among others, should be labour union’s conditions for subsidy removal if their agitations were truly in the public interest.

Since the report was produced, lawmakers have created about 100 new agencies, according to BusinessDay calculation, indicating the report may need its own review.

Read also: Why Tinubu must address cost of governance

“There is an urgent need to look at the cost of governance. The cost of governance in Nigeria is way too high and should be drastically reduced to free up more resources for development. Nigeria is spending very little on development,” said Tony Edeh, group managing director of Norrenberger, an integrated financial services group.

Experts are calling for the same diagnostics as was done by Oronsaye’s team. This will involve the lawyers drafting bills to implement the report, de-establish MDAs, merge others, and create new ones to replace them.

To achieve this, the implementer needs probably the biggest stick in the Federal Government, a team of highly capable people, a budget, a reporting line directly to the president, and for Tinubu to invest a huge amount of his goodwill with the National Assembly to persuade them in effect, to massively reduce the size of their feeding trough, said one expert.