Nigeria Content Online

The Expenditure
Review Committee (ERC) inaugurated last September to look at ways to
help government reduce the country’s spiralling recurrent costs and
overheads yesterday called for a radical amendment of constitutional
provisions that promote unrealistic budgetary provisions and processes.

Presenting the
report yesterday in Abuja, the Chairman of the 23-member committee,
Anya O. Anya, said a situation where successive governments since 2003
continue to devote 80 percent of the country’s financial resources to
recurrent expenditures “tends to portray governance as irresponsible,
unresponsive, self-centred and clueless pretenders to leadership.” Mr
Anya, who is also the former Chairman, Nigeria Economic Summit Group
(NESG), said as of last year, two-thirds of the country’s resources
were allocated to recurrent and overhead expenditures, pointing out
that the 2011 budget hardly showed any marked departure from the trend,
despite the pledge by the National Assembly for a 30 percent reduction.

Spending binge

Indicting the
leadership at the various levels of government, Mr Anya noted that “the
mission of a responsible political leadership surely includes
maximising the quality of life of the citizens, while making provisions
for and enhancing the opportunities of future generations.

“The prominent
political actors must know that we are at a historical conjuncture
where demography, economics and social dynamics suggest that unless
there is a drastic redirection of our fiscal operations, the judgment
of history will be harsh,” he warned.

Underscoring the
need to create the environment to attract foreign and local investments
to the economy, the committee declared that it is practically
impossible for the country to achieve the development aspirations of
Vision 20:2020 if the current mix of recurrent and capital expenditure
and high level of fiscal indiscipline are maintained.

“The major drivers
of the high level, but low value recurrent expenditure include
unbridled multiplication of structures and process; overloading of
recurrent items, especially through overheads, and pervasive defiance
of the extant rules and regulations on government’s fiscal operations,”
the committee noted.

While urging
government to identify opportunities for reduction of recurrent
expenditure as well as for switching to making capital expenditure more
important in the fiscal mix, the committee suggested that the ratio of
recurrent expenditure to gross domestic product (GDP) be pegged at 6
percent, and not more than 100 percent of non-oil revenue.

Minister of
Finance, Segun Aganga, while receiving the report, said the committee
was part of the effort by government to review the legacy issues to lay
a solid foundation for the building of the country, adding that this
would not be achieved without resolving the issues about how the
country’s resources are allocated.

The Minister
promised that government would review the committee’s recommendations
and ensure that they are effectively implemented, pointing out that the
present administration has already taken a number of measures to
enhance the quality and efficiency of government budgetary spending to
add value to the quality life of the people.