Employers Ask FG to Reduce Expenditure with No Impact on National Devt

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• Say fiscal discipline key to reducing cost of governance • Lament zero operations in aviation, hospitality, others

By Gboyega Akinsanmi

The Nigeria Employers’ Consultative Association (NECA) yesterday asked President Muhammadu Buhari to reduce all federal expenditures with no direct impact on national development.

NECA, a platform for over 3,500 private sector employers nationwide, also urged the Buhari administration to institutionalise fiscal discipline, without which it argued, would be impossible to block or substantially reduce the cost of governance.

The association welcomes the decision of the federal government to implement the 2012 report of the Presidential Committee on Reform of Government Agencies popularly known as the Oronsanye Report.

NECA made these recommendations in a statement by its Director-General, Dr. Timothy Olawale, commending the federal government for approving the implementation of the report submitted to former President Goodluck Jonathan.

On August 18, 2011, Jonathan inaugurated the seven-member presidential committee to restructure and rationalise federal parastatals, commissions and agencies under the chairmanship of a former Head of Service, Dr. Stephen Oronsanye.
The committee submitted an 800-page report to the Jonathan administration on April 16, 2012, in which it recommended the abolishment and merging of 102 government agencies and parastatals.

With the devastating effects of the COVID-19 and its consequent lockdown on the national economy, Buhari had approved the implementation of the Oronsanye report, which stoked the fear of massive retrenchment in the federal civil service.
Beyond Buhari’s resolve to implement the Oronsanye report, NECA’s director-general acknowledged the significance of its implementation, though emphasised the need to institutionalise fiscal discipline in order to meaningfully and sustainably reduce the cost of governance at the federal level.

Also, Olawale recommended that the federal government should deliberately reduce other leakages arising from over-bloated retinue of aids of political officers and expenditure profile with no direct national development impact.

He, equally, recommended that the federal government “must, as a matter of urgency, fast track the deregulation of the down-stream oil sector and re-chart the course for rapid diversification of the economy. Herein lays our path to national economic and social renaissance.”

He said the president “has taken the bold step of approving the implementation of the Oronsanye report, about eight years after its submission to the last administration.

According to him, over the years, NECA had reiterated that the implementation of the report “is fundamental to the institutionalisation of operational efficiency and reduction of government expenditure in the long term.

“It is worrisome that with over 250 institutions, parastatals and agencies of the federal government, the average cost of governance in Nigeria remains among the highest globally.”

He warned that the Oronsanye report “should not suffer the fate of the Ahmed Joda Panel Report and the Allison Ayida Report of 1995. Both reports made bold attempts in recommending the rationalisation of federal agencies and parastatals.

However, NECA’s director-general observed that the Joda and Ayida reports suffered fatal fate because of the lack of political will to implement them.”

On these grounds, Olawale said all efforts “must be made to see to a logical conclusion the implementation of the Oronsanye report as directed by the president.

“Recent global economic downturn has proved that Nigeria cannot afford the burden of wasted billions of Naira and over-lapping roles of some of the ministries, departments and agencies (MDAs).

“Some overlapping activities of the MDAs are, in reality, hinder the Ease of Doing Business efforts of government,” NECA’s director-general explained.

He, specifically, affirmed the imperative for reduced government expenditure, which according to him, should go beyond the implementation of the Oronsanye report, but also require governments at all levels demonstrate high level of political will to implement the report fully.

In another statement, Olawale recounted the cash crunch effects of the lockdown, which he said the federal government had admitted in a circular the Federal Inland Revenue Service (FIRS), requesting companies for advance payment of taxes.

He argued: “If the Government is experiencing the cash crunch effects of the lockdown, then businesses should be worst off. The federal government should stop considering the private sector as a “cash-cow. Rather, the federal governments should look inward on how to cut governance costs.”

Besides, NECA’s director-general cited some statistics that showed the status of business operation during the lockdown, noting that the figures revealed that the federal government was not aware of the practicality in the private sectors.
He disclosed that there “are zero operations for businesses, which had to obey the lockdown directives of the federal government. Businesses in Lagos State have experienced about five weeks lockdown as directed by the federal government and Lagos State.”

Among others, he pointed out that there were zero operations such sectors “as the iron, metal and steel, hospitality, aviation, tourism and transportation. For example, Supermarkets operated at 30 percent capacity, which created problems for the supply chain of the organization.”

He noted that sales dropped by 70 percent due to lack of supplies, few hours of working and controlled social distancing, which he said, limited the scope of operations for the businesses that were exempted to operate during the lockdown.

He, therefore, urge the federal government “to emulate its counterpart in other countries, and to put in place more palliative measures to cushion the effects of the pandemic on Corporate Nigeria rather than putting more pressure on them.

“The FIRS should focus on supporting the real sector to be sustainable into the post COVID-19 era, as it will prevent loss of jobs which will in turn contribute towards economic growth through payment of appropriate taxes.”