Prune your agencies to save cost, Senate tells FG

The Senate on Wednesday urged the federal government to undertake a downward review of its agencies to reduce the cost of governance.

The Red Chamber also directed the Bureau of Public Enterprises (BPE) to examine the activities of all government agencies currently operating under the partial commercialization arrangement to determine those that may be qualified for full commercialization.

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Speaking after the Senate considered the report of its committees on Finance and National Planning on the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper, Senate President Ahmad Lawan said many of the agencies were created to address specific challenges but have now become irrelevant.

According to him, many of the agencies receive money without adding any value to the government.

“Whatever we say about the cost of governance will depend on how to merge the different agencies. I think there is need for us to muster the political will. We know what to do but when it comes to doing the right thing, we find it difficult,” Lawan said.

He said though they were concerns about job lost, but there was need to find a way out of this because the cost of governance is high.

He said reducing the cost of running the National Assembly won’t save the Nigerian economy but a holistic review agencies and the cost of running them.

Chairman of the Committee on Finance, Solomon Olamilekan Adeola (APC, Lagos), while presenting the report, said many of the partially-funded government agencies need to be excised from the national budget.

He, however, said this cannot be done without the relevant amendments to their extant laws and in some cases certain sections of the 1999 Constitution.

According to him, majority of the revenue generating agencies engaged in arbitrary and frivolous expenditure, expended enormous funds on overhead and recurrent expenditure, including huge personnel costs that was difficult to reconcile with the number of staff on their nominal roll, thereby reducing their operating surpluses.

The Senator said most of these revenue agencies engaged either in outright non–remittance or under-remittance of operating surpluses, disclosing that sum of N1.4 billion outstanding remittance was discovered in the case of just one of these agencies between 2018 and 2019.

He also said apart from the major revenue drivers of the Federal Government, in the Oil and Gas sector, the Nigerian Customs Service, and the Federal Inland Revenue Service (FIRS), majority of the other revenue generating agencies, failed to meet their yearly revenue targets, within the 2018-2020 period reviewed.

The Red Chamber, therefore, directed the Accountant General of the Federation to develop templates for strict cost-control measures for all revenue-generating agencies of Government, with clear sanctions for non-compliance.

It also directed the federal government to institute sanctions for inability to meet revenue targets, where it is established that there are no visible constraints for such non-performance.

The committee recommended the amendment of the Fiscal Responsibility Act (FRA, 2007) to improve revenue generating and remittance capacity of government agencies.

Meanwhile, the committee recommended that the sundry parameters in the 2021-2023 MTEF/FSP Document be sustained.

They included fiscal deficit estimate of N5.16 trillion; N4.28 trillion new borrowing; revenue of N7.89 trillion; total FGN proposed expenditure of N13.08 trillion; Statutory transfers of N484.4 billion; Debt Service estimate of N3.12 trillion; recurrent (Non-debt) of N5.66 trillion; Capital expenditure of N3.58 trillion.

The Senate also approved the benchmark oil price of USD$40 per barrel and the daily crude oil production of 1.86mbpd, 2.09mbpd, and 2.38mbpd for 2021, 2022 and 2023 respectively.

The exchange rate of N379/US$, GDP growth rate of 3.00%, Inflation rate of 11.95% were also approved.