RADICAL ECONOMICS 101: CBN Governor Sanusi Lamido proposes drastic cuts in civil service, National Assembly others
Published:28 Nov, 2012
Central Bank of Nigeria Governor Mallam Sanusi Lamido on Tuesday lamented the high cost of servicing the nation’s civil service and called on the Federal Government to fire at least 50 per cent of its entire workforce.
Sanusi, in his presentation at the Second Annual Capital Market Committee Retreat in Warri, Delta State, said the country spends 70 per cent of its earnings on salaries and entitlements of civil servants.
He argued that having the Federal Government’s staff strength reduced by half would free up capital for infrastructure development in the country and buoy the economy.
The CBN governor had in a lecture last year claimed that 25 per cent of the overheads of the Federal Government budget went to the National Assembly.
“Twenty five per cent of the overhead of the Federal Government budget goes to National Assembly. I have figures from the office of budget for the year 2010. Total government overhead is N536, 268,49, 280. Total overhead of the National Assembly is N136,259,768, 112 which is exactly 25.1 per cent of Federal Government overhead. The overhead of the National Assembly as a percentage of the Federal Government budget in 2009 was 19. 87 and in 2008 was 14.19”, he had said.
Sanusi, at the retreat on Tuesday, advocated a more compact and less expensive system of government that would reduce overhead costs.
He said, “At the moment 70 per cent of Federal Government’s revenue goes for payment of salaries and entitlement of civil servants, leaving 30 per cent for development of 167 million Nigerians. That means that for every naira government earns, 70 kobo is consumed by civil servants.
“You have to fire half of the civil service because the revenue of the government is supposed to be for 167 million Nigerians. Any society where government spends 70 per cent of its revenue on its civil service has a problem. It is unsustainable.
“The various tiers of government should cut down their recurrent expenditure and use the fund to provide basic infrastructure like schools, hospital, etc.
“How can we be using the proceeds from our major source of revenue to service recurrent expenditure, by paying salaries, allowances, etc. The country should be thinking of enhancing its productivity base rather than spending on things that cannot create wealth.”
Sanusi added that the country did not need over 100 senators, 400 members of the House of Representatives to make laws. He said when the expenses of lawmakers, civil servants and those in the executive arm of government are totalled, Nigerians will find out that their national revenue has been consumed by the Executive, lawmakers and civil servants.
He also faulted ‘wastage’ of funds on the maintenance of 774 Local Government Area chairmen, their aides, councillors and other appendages of the third tier of government.
“Do we need 774 LGAs? Do we need 36 states some of which are not viable? why not just remove them and have only state governments?,” he asked rhethorically.
According to him, “there are state governors whose monthly allocations are barely enough to pay salaries. I hear such governors complain and I say ‘why complain when the solution is simple?’ It is irresponsible to use all your money to pay salaries and wait for another month’s allocation and pay salaries and after four years, you would have done nothing.”
Sanusi also maintained that the Federal Government needed to totally remove petrol subsidy. He suggested that those who stole subsidy funds should be punished. He said, “People have the right to demand transparency. If you want to remove subsidy, you have to show what happened to those who stole.”
The CBN governor advised the Federal Government to stop investments on infrastructure that could be handed over to the private sector to run so that it (FG) can concentrate on building of schools, health centres and the provision of other social services.