Sanusi Urges Cut in Workforce to Sustain Economy

28 Nov 2012

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CBN Governor, Sanusi Lamido Sanusi

By Omon-Julius Onabu

The Federal Government should not hesitate to significantly downsize its workforce in order to ensure that the economy is viable and capital projects are not jeopardised, the Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi has said.

Sanusi, who gave the advice Tuesday in Warri, Delta State, at the second annual Capital Market Committee conference, noted that it was economically retrogressive for any government to commit as much as 70 per cent of its revenue on recurrent expenditure.

He said it was irresponsible for the government to spend all monies available to it on the payment of salaries and entitlements.

However, the state Governor, Emmanuel Uduaghan disagreed with the submission of the CBN governor, saying the government exists for the people.

Uduaghan said it would be politically as well as socio-economically suicidal for the government to lay off half of its workforce in an attempt to promote capital projects and sustain the economy. 

The governor had earlier in a keynote address chronicled the country decline from the post-war financial stability era to the present-day dependence on borrowing to meet demands of project execution by governments.

The governor observed that any elected president or governor who embarked on mass sack of workers would certainly draw the wrath of the people and the electorate, noting that his government had to give tricycles to former commercial motorcyclists (okada-men) to maintain their jobs.

He said that sacking of half of the labour force in the public service was not the best way to tackle economic challenges in a country that was already grappling with a large population of unemployed citizens including young graduates.

Uduaghan said: “Before any rational government can embark on retrenchment of workers, it must plan for them by developing infrastructure that will attract investors.

“Sacking of workers would be an unpopular decision… Where would the graduates of the schools be absorbed? If we heed your advice to drop workers, many office holders will lose the next elections”.

According to him, “Not that borrowing in itself is necessarily bad, but the management and deployment of such funds is crucial. In fact, I daresay that with the state of affairs today and the paucity of funds, government can hardly do without borrowing. The issue is what government and public funds managers do with the funds at their disposal for the good of all.”

Nonetheless, the CBN governor stressed that efforts must be made in various sectors to drastically reduce the currently high recurrent expenditure.

In the same vein, Sanusi took a swipe at the bloated number of senators and other national legislators and questioned rationale to continuously sustain the local government system with 774 local government areas, saying these were helping to bleed the nation’s treasury.

According to him, “At the moment, 70 per cent of Federal Government’s revenue go for payment of salaries and entitlement of civil servants, leaving 30 percent for development of 167million Nigerians. That means, for every naira government earns, 70kobo is consumed by civil servants.

“You have to fire half of the civil servants because the revenue government has is suppose to be for 167million Nigerians. Any society where government spends 70 percent of its revenue on its civil service has a problem. It is unsustainable.

“There are state governors whose monthly allocation is barely enough to pay salaries. I hear such governors complain and I say why complain when the solution is simple. It is irresponsible to use all money to pay salaries and wait for another month’s allocation and pay salaries and after four years you would have done nothing.”

Sanusi, who queried the provision for more than 100 senators and nearly 400 members of the House of Representatives, asked, “Do we need 774 local governments, why not just remove them and have only state governments? Do we need 36 states some of which are clearly not viable?”

The CBN governor also urged the Federal Government to further deregulate certain sectors of the economy and restated his belief in the total removal of the contentious subsidy on oil in Nigeria .

Tags: News, Nigeria, Featured, Workforce, Sustain Economy, CBN

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