USA Africa Dialogue Series - Danjuma panel to Jonathan: Cut recurrent budget to 40%

QUOTE

 

It frowned at a situation where there are 30 federal ministries and a plethora of extra-ministerial departments, 42 ministers and "an army of special advisers and assistants." It also said the National Assembly consumed N144bn in 2010, or N307m per legislator...........

According to the panel, "no economic indicator better exemplifies our poor management of resources than the depletion of the Excess Crude Account at a time of rising oil production and prices."

UNQUOTE

 

DAILY TRUST

Danjuma panel to Jonathan: Cut recurrent budget to 40%

Thursday, 27 January 2011 00:00 Nasiru L. Abubakar

 

 

 

Ten key recommendations intended to turn around the course of the Nigerian state were made to President Goodluck Jonathan by the Gen T.Y. Danjuma Presidential Advisory Committee last week, beginning with one that recurrent expenditure should not exceed 40% of the national budget and this should determine the size of the government. Other recommendations contained in a summary report submitted to Jonathan by the council dated January 20, 2011 and signed by Danjuma, include the need to reduce Federal ministries to 18 at most and to rationalise all non-ministerial agencies to eliminate overlap, duplication and redundancies.

 

Similarly, the Danjuma panel recommended pursuing programs to enhance capacity of the public service; reduce the salaries, allowances and overhead expenditure of political office holders; and pay to legislators only salaries and allowances as determined by the Revenue Mobilisation, Allocation and Fiscal Commission [RMAFC].

It also recommended a pruning of the budget deficit to no more than 3% of GDP; limiting borrowing by federal and state governments to only productive projects; stopping the legislature from hiking budget proposals; ensuring that expenditure and project costs are internationally competitive; scrupulous auditing of public accounts, as well as strict adherence to a policy of zero tolerance for corruption.

The Danjuma panel expressed "grave concern over the sub-optimal management of our national resources" in four key indices. It condemned the deterioration in the ratio of recurrent to capital expenditure over the years in favour of the former, from 39:61 percent in 2000AD to 60:40% in 2010 and a projected further deterioration to 71:29% this year.

It said the country is dedicating the bulk of its resources to finance government administration "rather than making investments in key infrastructure...to fuel growth and enhance quality of lives."

It frowned at a situation where there are 30 federal ministries and a plethora of extra-ministerial departments, 42 ministers and "an army of special advisers and assistants." It also said the National Assembly consumed N144bn in 2010, or N307m per legislator.

The Danjuma council also frowned at "the abuse of legislative oversight functions" with the allocation of big sums of money to finance committee members' visits to projects sites. It said despite the cost, this has not added anything to the quality of spending and project execution.

It also said "unrealistsic budget assumptions have pushed up the government to resort to excessive borrowing to finance the budget." It warned on the dangers of the growing public debt burden on the country's future and said delay in passing the Petroleum Industry Reform Bill [PIB] has led to a suspension of new investment in the oil sector.

According to the panel, "no economic indicator better exemplifies our poor management of resources than the depletion of the Excess Crude Account at a time of rising oil production and prices."

It said the account was eroded from $20bn in 2007 to $1bn last year, and even that $1bn was shared out between the three tiers of government on December 31, 2010.

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ALUKO COMMENTARY

This is a massive indictment, if there were one....a poor report card.

GEJ's government should make adjustments accordingly.

 

Bolaji Aluko

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