COVID-19: Curtailing government officials’ appetite for luxury amid dwindling revenue

In this article, FEMI MAKINDE examines the crash in the price of crude oil and the need for government officials at all levels to cut costs of governance and stop extravagant lifestyles for the nation to stay afloat in the face of economic turbulence ahead

The steady crash of oil price as a result of the COVID-19 pandemic in the world is a pointer to a very harsh economic condition ahead for the nation. Nigeria depends largely on oil receipts to finance its budget and, as a result of this, any change in the price of oil will surely have an enervating effect on the economy.

The humongous 2020 Budget of N10.33tn tagged ‘Budget of Sustaining Growth and Job Creation’ may eventually achieve the opposite with the crash of crude oil price to below $30 per barrel. The benchmark for the budget was put at $57 per barrel, which means the nation may experience a serious economic crisis in the months ahead.

Many countries across the world are on lockdown to curb the spread of coronavirus and this has made the nation’s oil no longer attractive to its buyers, unlike before. As a result of this lockdown, the price keeps falling and, despite this misfortune, our leaders have not come to terms with the reality that the cost of governance should be drastically cut, leakages plugged and corruption stopped for the nation to stay afloat during the incoming economic turbulence.

It is a fact that there is no business more profitable in Nigeria than holding elective and appointed positions. Many of those holding such positions see them as avenues to amass wealth rather than to serve the people and that is the reason why Nigeria is still receiving parts of late Gen. Sani Abacha’s loot stashed away in foreign countries about 22 years after his sudden death.

Apart from massive corruption in government circles, political office holders earn tubby salaries and other perks of office, while other public servants who have no opportunity to eat from the national cake wallow in penury as a result of their miserable salaries.

Nigerian political office holders are reputed to be among the highest paid in the world, despite the country’s revenue challenges, and those in government seem not to realise this, as some of them have said repeatedly that their remunerations are not as huge as people claim, despite the country’s rating as a ‘lower middle-income country’ by the World Bank.

But despite the dwindling revenue, the Presidency as well as some governors, for example, do not travel by road any longer. They fly wherever they are travelling to and that is said to be one of the reasons some of them are building airports that they know will not function outside of the take-off and landing of their aircraft.

The agitations that the cost of governance should be drastically reduced at this time are not targeted at only the executive as the legislators are also said to be among the highest paid in the world. But the message is not strictly for the Federal Government alone because political office holders at state and even local government levels are not guiltless in receiving humongous emoluments as well as waste.

Despite the promise made by the President, Major General Muhammadu Buhari (retd.), to reduce the cost of governance, it is evident that he has maintained the status quo. He created new ministries and the promise to reduce the number of the presidential fleet has been in breach.

To free money for Kenya to fight the ravaging virus,  President Uhuru Kenyatta has announced that he  and his deputy have agreed to cut their salaries by  80 per cent. Apart from salaries of the duo, Kenyatta also announced members of the federal cabinet would have their salaries slashed by 30 per cent. He added that salaries of chief administrative secretaries and principal secretaries would also be reduced by 30 per cent and 20 per cent respectively.

He said the pay cut was voluntarily agreed upon by him and the officials, and that the measure was aimed at making more funds available to help Kenya manage the pandemic and prepare for the future.

To show that state governments also have to tighten their belts, the Borno State Governor, Prof Babagana Zulum, on Tuesday, announced measures to brace up for the impending economic downturn as a result of the ravaging coronavirus pandemic.

The governor, while announcing the team to be led by his economic adviser, Alhaji Mustapha Bulu, mandated them to increase Borno’s internally generated revenue through innovations, fiscal discipline, blocking of leakages and priority funding.

The Secretary General of the Yoruba Council of Elders, Dr Kunle Olajide, while speaking to Sunday PUNCH, agreed that those in government must do everything to reduce the cost of governance at this time because of the precarious situation ahead.

He said, “We have gone through this type of circle, minimum, four times in the last 40 years but each time we got out of it, we completely forgot everything we learnt. We have been paying lip service to diversification of the economy. We keep wasting resources and borrowing more just to sustain the lifestyle of our leaders. Things cannot continue this way.”

The YCE scribe, however, said there could be no successful diversification of the economy if Nigeria refused to heed the clamour of those agitating for restructuring.

“We cannot diversify the economy successfully without restructuring the geopolitical architecture of Nigeria. When we talk of diversification, we talk about diversifying into agriculture and exploitation of mineral resources. The Federal Government cannot diversify into agriculture because it has no land but states can do this. Therefore, until such time that we restore power back to the federating units, that is, the states, that cannot happen. We will only be paying lip service to diversification without restructuring.

“If we want to address this problem squarely, we have to look at the 2020 budget. We have to look at all the perquisites and allowances, and the outrageous remunerations of our leaders in the executive and legislative arms and these must be drastically reduced.

“While this is being worked out, a bill must go to the National Assembly initiating this process of restructuring as a matter of urgency. The Federal Government is taking too much for itself and that is why we are where we are now. It must restore power to the federating units.

“In the last six years, or thereabouts, the foreign reserves have been severally depleted; Sovereign Wealth Fund, depleted; Excess Crude Account, depleted; and we have gone into huge debt because the Federal Government has taken too much unto itself. We also do not have any record of prudent management of the resources by the Federal Government. We are in a state of emergency and, on occasions like this, ethnic, political and religious sentiments should be put aside completely and we must face reality,” he added.

Olajide stated further that the idea of creating regional commissions such as the Niger Delta Development Commission, North East Development Commission, and others, which are being proposed, should be thrown away and that the nation should face restructuring fully in order to ensure development of each of the regions.

The National Chairman of the Social Democratic Party, Prof Tunde Adeniran, in an interview with our correspondent, said it was high time the Economic Advisory Team came up with policies that would assist the nation to weather the stormy session the nation is in.

Adeniran, who is a former Minister of Education, said, “The Economic Advisory Committee should swing into action immediately and think through. We cannot pretend as if things are the same way they were before and the reality on the ground suggests that we must cut our coat according to our cloth.

“I do not know which item on the budget I would advise them to cut because the budget has been largely speculative. But one thing we have to bear in mind is that this is not the time to be taking loans.”

The Convener, Nigeria for Good Governance, Mr Wole Oladapo, in an interview with Sunday Punch said despite that the International Monetary Fund had announced that the world had entered into recession, the lifestyles of Nigerian leaders do not reflect this. Oladapo said buying N50bn exotic cars for members of the House of Representatives at this time was an evidence that Nigerian leaders were not ready to adjust.

He said, “ What we should be doing is to adjust our spending to the essential things but we are not seeing this in the way our leaders are living. Just two days ago, we had the report that House of Representatives is distributing N50bn worth of exotic cars to its members. Is that what we should be doing at this time?

“In this time when nations are rising up to help their citizens and their companies, we thank God some individuals are rising up to help. What is the government doing? Somebody from China was the first to bring the first set of testing tools to us. Our leaders seem not to understand the challenges ahead.

“The IMF has announced a recession globally and serious nations should be working on how to survive this but this is not what is happening here in Nigeria. The whole world is challenged now and this is exposing the incapability of our leaders.”

A lecturer at the Faculty of Law, University of Jos, Prof Nnamdi Aduba, said the impact of the novel coronavirus was huge on the economy as much as on the health of the people. He said the Federal Government and states needed to slash salaries and allowances of political office holders and stop corruption in the system in order to free funds for developmental projects.

He said, “Political office holders are earning so much while the pay of most workers in other categories can hardly sustain them till halfway in the month. Also, some new entrants in places like the Nigerian National Petroleum Corporation earn what a professor of 20 years earns. Is that just? What are they doing at the NNPC that is making the government to pay them so much? We have been importing fuel for so long and those in this sector are earning so much.

“The Academic Staff Union of Universities is on strike but many people will not ask why they go on strike. We do not invest in education, we do not invest in the health sector and see what is happening now. They cannot travel outside the country now for treatment because it is even more dangerous there and their hospitals abroad are overwhelmed.

“Look at this issue of priorities and the amount of money budgeted to renovate the National Assembly complex; if that amount is given to the universities, they will produce those that will qualify for the Nobel Prize. But we don’t get our priorities right.

“Governors do not travel by road any longer because they have refused to rehabilitate the roads, so they fly now. We should stop this waste of resources, especially at this time, because the money is no longer coming like it used to. So, this lifestyle of opulence by those in government should be stopped. We are in a serious situation and we have to prioritise where we spend our money. The life without oil which we have been preaching has even come to us now faster than what we envisaged.”


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