Sunday, April 22, 2012

Oronsaye’s Merger and Acquisition’s Proposals

On Monday, April 16, 2012, the long awaited report of the Presidential Committee on Restructuring and Rationalisation of Federal Agencies, Commissions and Parastatals headed by Mr. Stephen Oronsaye was submitted to President Goodluck Jonathan.  The committee which was inaugurated on August 18, 2011 was mandated to: study and review all previous reports on similar exercise; examine the enabling Acts of all MDAs and classify them into various sectors; examine critically their mandates and make appropriate recommendations to either restructure, merge or scrap; and, advise on any other matters, which may be relevant to the desire of government to prune the cost of governance.

While summarizing his 800 page report, the committee noted that: “It is a fundamental breach of acceptable practice of good public sector governance to create a new agency or institution as a response to the seeming failure or poor performance of an existing agency in order to suit political or individual interests.  Such a practice has proved eventually to precipitate systemic conflicts, crises and even collapse at a substantial but avoidably high financial cost to government.” The presidential committee noted further that: “The long-standing challenges that beset the Nigerian public sector, including the parastatals, have created a ‘single story’ of inefficiency, corruption, poor work environment, low morale, ineffectiveness, deceit and low productivity, thereby establishing a perception of a dysfunctional and unproductive public sector…where it is unable to perform its legitimate functions creditably.”

Oronsaye committee proffered four ways to immediately tackle the high cost of governance. These include: “Reduction in the number and size of the governing boards of parastatals; Linking the budgetary system to deliverables and output; Implementation or vacation of some decisions taken on past reports; and Removal of all professional bodies/councils from the national budget.” The committee established that at present, there are 541 government parastatals, commissions and agencies (statutory and non-statutory). 263 of these are statutory agencies which it recommends being reduced to 161. To achieve this, the committee proposed the abolition of 38 agencies, merger of 52 and reversion of 14 to departments in ministries. The rationale being that there were “duplications and overlaps in the mandates of many parastatals and agencies…without regard to existing laws and, in some cases, out-rightly replicating extant laws.”

For instance, Economic and Financial Crimes Commission and Independent Corrupt Practices and Other Related Offences Commission were alleged to have usurped the role of police. It is noteworthy that there exists in police commands Special Fraud Units which can be strengthened to take on the role of EFCC and ICPC. FRSC is accused of duplicating the functions of the Department of the Highways of the Federal Ministry of Works and that of Nigerian Police.  Other agencies cited doing overlapping functions are the Nigerian Communication Satellite Limited, National Broadcasting Commission (NBC) and the Nigeria Communications Commission (NCC) in the area of frequency allocation. Presidency who proposed the executive bills to the National Assembly and indeed our parliamentarians who passed the Acts establishing these institutions are reprehensible for the mushrooming of these drainpipes called Commissions.

As an antidote to the undue proliferation of the agencies, the committee recommended the collapse of the Nomadic Education Commission and the National Commission for Mass Literacy, Adult and Non-Formal Education into the Universal Basic Education Commission because they all have to do with basic education. The committee also believes NTA, FRCN and VON should be under one management. In addition to calling for the mergers of some of these agencies, the committee also proposed that management audit should be conducted on 89 agencies with biometric data capture of staff as well as the discontinuation of government funding of professional bodies/councils.

In the Committee’s opinion, if its report was adopted and agencies reduced in accordance with the recommendation, the government would be saving over N862 billion between this year and 2015. The breakdown showed that about N124.8 billion would be reduced from agencies proposed for abolition; about N100.6 billion from agencies proposed for mergers; about N6.6 billion from professional bodies; N489.9 billion from universities;  N50.9 billion from polytechnics; N32.3 billion from colleges of education and N616 million from boards of federal medical centres.

I want to specially thank the Oronsaye’s committee for a splendid job. The committee actually hit the bull’s eyes with many of its proposals. My major concern is whether this report will not eventually be swept under the proverbial carpet like the previous ones. It is on record that similar conclusions have been reached by successive committees set up on how to reduce the cost of governance. Two of such was the Alison Ayida’s committee of 1995 and the Ahmed Joda Panel of 1999 which proposed scrap, commercialisation, privatisation or self-funding of many agencies. Unfortunately, these institutions which were recommended for scrapping are still being funded by government.

President Jonathan has taken the right step by setting up Mohammed Bello Adoke’s 10 member white paper committee same day as he received the report. Whether the Attorney General’s committee will not scuttle the good work done by the Oronsaye’s committee remains to be seen. There is no gainsaying that there will be intense lobbying of the Adoke’s committee to advise the government to reject some of the key recommendations. These advances should be rebuffed. Aside the white paper committee, the ability of President Jonathan to act expeditiously in implementing the government resolution will show if he means business about cutting the cost of governance. The president will also need to rally the National Assembly to earnestly amend or repeal the Acts of Parliament that set up many of the agencies earmarked for abolition or restructuring. I think that was not done in implementing previous reports which therefore made the affected agencies to continue to exist and receive government funding. Considering all that needed to be done, realistically, it will take sometime for us to reap the benefit of Oronsaye’s committee’s good work.

Additional ways the president should explore to condense cost of governance is by halving the presidential fleet of aircrafts and cars; reduction in the number of presidential and legislative aides and  auctioning the white elephant among the  over 11,886 federal government projects that dotted Nigeria’s landscape. It is also advisable for government to quit sponsorship of pilgrimages. During the forthcoming constitutional amendment exercise, the president should sponsor a bill to seek amendment to section 147(3) of the 1999 Constitution which makes it mandatory for the president to appoint at least one minister from each state. Nigeria does not need more than twenty cabinet ministers unlike the current fad where an unwieldy 42 ministers are appointed by the president.  President Jonathan should also look at reducing the number of Nigerian foreign missions while National Assembly must exercise utmost circumspection in creating additional agencies or commissions.  Above all, the president must strengthen all anti-corruption agencies inclusive of police and code of conduct bureau. It is an unassailable fact that corruption plays a big role in Nigeria’s soaring cost of governance as the unfolding pension scam has revealed.