It is estimated that Nigeria can save as much as N12 trillion annually from the merger of government ministries, departments and agencies (MDAs) that have overlapping functions. This is if it implements the recommendation of the Stephen Oronsaye report on the reduction of the cost of governance.
Last year, out of the country’s ₦16.3 trillion budget, ₦6.8 trillion was spent on the payment of salaries and other personnel overheads. In 2023, the figure is even higher as N8.5 trillion of the N21.82 trillion budgeted for the year, would be spent paying salaries and allowances of public servants.
Nigeria is currently neck deep in debt with the nation’s total debt stock now estimated at N49.85 trillion, according to the Debt Management Office (DMO).
The DMO also informed that between October and December 2022, Nigeria spent N406.77 billion on domestic debt servicing, while it spent $312.27 million (N143.74 billion) on external debt servicing, giving a total of N550.51 billion.
Between January and March 2023, Nigeria spent N874.13 billion on domestic debt servicing, while it spent $801.36 million (N368.87 billion) on external debt servicing, giving a total of N1.24 trillion.
An analysis of Nigeria’s 2023 budget shows that a total of N18.04 trillion is allocated to all government MDAs. With a total of 541 MDAs, each MDA is estimated to receive about N33.27 billion.
Going by the Oronsaye recommendation that the MDAs be pruned down to 161, Nigeria will only need a little above N5 trillion to spend on all the MDAs put together, saving the nation over N12 trillion.
But that is only one leg of the journey, the ostentatious lifestyle and fiscal indiscipline of elected government officials presents even a more cause for concern.
In the 2023 budget, Nigeria is to spend N14.2 billion on the Presidency alone while the National Assembly has a budget of N228.1 billion.
President Muhammadu Buhari between 2016 and October last year spent about N81.80 billion for the Presidential Air Fleet (PAF) maintenance and foreign trips.
The amount includes N62.47 billion for the operation and maintenance of PAF, N17.29 billion for foreign and local trips and N2.04 billion earmarked for other related expenses.
The Presidency has maintained 10 aircraft since the inception of the Buhari regime in May 2015.
Just last week, President Bola Ahmed Tinubu joined the race to enter the Guinness Book of World Record with his over 120 convoy of cars at a time Nigerians are struggling to survive under the harsh economic conditions in the country occasioned by high cost of living.
As the federal government is desperately seeking ways to cut governance costs due to low revenue from oil sales, stakeholders believe this is the best time to muster the political will to implement the Stephen Oronsaye recommendation.
Recently, the Presidential Advisory Council submitted its report to President Bola Ahmed Tinubu in which it proposed the merger of the Federal Inland Revenue Service (FIRS), Nigerian Customs Service (NCS), and the Nigerian Maritime Administration and Safety Agency (NIMASA) into the Nigerian Revenue Service (NRS) in order to ensure an efficient collection of all direct and indirect taxes, as well as levies on behalf of the Federal Government.
This recommendation has been seen by stakeholders as a sign of hope that the Oronsaye report might be implemented by the current administration even though they also called for caution as the objective appear to be mainly to increase revenue with little emphasis on cost reduction.
Lead Director Centre for Social Justice (CSJ), Mr. Eze Onyekpere in his reaction to the proposal by the council, said there is no empirical evidence to show that the merger will guarantee efficiency and transparency in revenue collection.
According to him, “While these objectives are desirable, it is not clear that a merger is the best way to facilitate their realization. It appears that these objectives can be realised by supporting these agencies as they currently exist.
“Furthermore, there will be a huge challenge in merging agencies with diverse mandates. The Council’s recommendation assumes that these agencies simply exist to collect revenue.”
He said the mandate of the Nigerian Maritime Administration and Safety Agency (NIMASA), is the enthronement of global best practices in the provision of maritime services in Nigeria.
“Its areas of focus include effective maritime safety administration, maritime labour regulation, marine pollution prevention and control, search and rescue, cabotage enforcement, shipping development and ship registration, training and certification of seafarers, and maritime capacity development. Most parts of NIMASA’s mandate are beyond revenue assessment and collection,” Onyekpere said.
He noted that even though Customs and FIRS collect revenue, they are focused on different revenue streams of the government. “And collecting these streams of revenue needs to be deepened through specialisation, institutional autonomy and use of knowledge and experience acquired over the years,” he said.
“The recommendation of the council if implemented will create a revenue behemoth which will be too big and unwieldy to the extent that if anything goes wrong in its administration, the entire revenue chain suffers. It is recommended that instead of a merger, these agencies should institutionalise enhanced collaboration, information sharing and exchange of workable ideas. They should be strengthened in their present form.”
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), warned that the whole exercise needs to be looked at very critically so that the government will not in the process of solving a problem, create a bigger one.
According to him, “I think it is a proposal we need to examine very very carefully so that in the process of wanting to solve a problem, we do not create a bigger problem.
“The core function of NIMASA is not revenue collection. The core function is maritime security. Now you merge it and make an accountant the head of the agency, how will the person supervise security? Yusuf queried.
“We need to be careful. If it is about revenue generation, I think a framework can be created so that the revenue component can be taken care of by FIRS, and the revenue will be flowing directly to FIRS so that you can leave the core services to those who know the business.
“So it is something that requires rigorous and very robust consultation. Whatever happens, robust stakeholder consultation is key in this process.”
For Professor Uche Uwaleke, a lecturer at the Nasarawa State University, Lafia, the merger is a great idea on the grounds that it will promote efficiency, transparency and block revenue leakages.
“When you merge revenue collection agencies it tends to bring about what we call economy of scale, it reduces the cost of collection of revenue, it also encourages standardisation of revenue collection method. It helps the government to see the whole picture of the revenue,” Prof. Uwaleke said.
“This practice is not new, in the UK for example before 2005, they used to have Inland Revenue Service and Her Majesty’s Customs. Both were separate but they later merged the two because they saw the need to do so. Today in the UK, it is Her Majesty’s Revenue and Customs Service that collects all forms of revenue, whether it is income tax or company income tax or indirect tax or customs duties.”
He said it is the same thing in India, noting that the individual agencies will be subsumed in the new agency as departments performing their core functions within the same organisation.
He noted that the move is also in line with the plan to reduce the cost of governance which is part of the Orasanye Report that proposes that agencies with overlapping functions should be merged.
“As we have them now, Customs and FIRS have overlapping functions. Let us do this because we cannot be doing the same thing and expect a different result,” Uwaleke said.
In his own reaction, Executive Director, Civil Society Legislative Advocacy Centre and Head, Transparency International, Nigeria, Auwal Ibrahim Musa (Rafsanjani) said he is in support of any policy that will bring about transparency, efficiency and block revenue leakages.
He said the Oronsaye Report has already recommended that federal agencies and parastatals with overlapping functions should be merged.
“If the merger will bring efficiency and ensure transparency, and block leakages, let it be, because these are the key things we are looking for. We want to eliminate duplication, we want to eliminate waste, we want to ensure efficiency and probity. If this merger will help do that, we are in support of it,” he said
He however, warns that if it is a way to create jobs for the boys without adding to productivity, then it doesn’t make sense.
“Since they will all require legislative arrangements, they need to look at it very well. We need to have a second look to see whether we need to merge them, to find out if merging them will lead to better service delivery.
“Again we also need to look at how to take care of those that might lose their jobs as a result of the merger,” Rafsanjani said.
For Professor Godwin Oyedokun of Lead City University, Ibadan, it is a matter of securing the system to block revenue leakages. Using the example of a house with multiple entrances, Ayedokun said, “if your house has 10 doors, you need 10 security systems to secure your house.”
According to him, “Nigeria is losing a lot of revenue because of the multifarious revenue collecting agencies. We need to have a unified revenue collection agency as is done in other countries. Apart from blocking leakages, cost of collection will also come down.
“Anything that will help us to move forward I am in support of it. We cannot continue doing the same thing and expect a different result