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Feyi Fawehinmi: Fiscal policy consequences of Ogas At The Top

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Feyi Fawehinmi: Fiscal policy consequences of Ogas At The Top

by Feyi Fawehinmi

Cast your mind back to September 2011. Ngozi Okonjo-Iweala was just settling in to her second stint as Finance Minister with the added responsibility of ‘coordinating the economy’ – de facto Prime Minister if you like.

There was also a huge debate raging over how much of our budget was going towards recurrent expenses meaning we had very little left to commit to badly needed capital projects.

The government had to address the issue or at least be seen to be addressing it and so at an event in New York organized by ThisDay newspapers, Mrs. Okonjo-Iweala made the following remarks (8mins and 20 seconds in), she said:

74% of the budget is recurrent expenditure and that is too high.

What we try to do is a four-year plan to bring down the recurrent expenditure from 74% to 72% in 2012 and by the time we finish in 2015, it should be under 70% at about 69% to 68%

I don’t know about you but when I read those remarks, I was apoplectic with rage. Here we were in a crisis and the Finance Minister, after looking through the books, decided that all she could muster was no more than 1% a year in nominal cuts to the recurrent expenditure. Of course this would be an increase because 69% of N2bn as an example is greater than 74% of N1.8bn.

I am also of the opinion that Mrs. Okonjo-Iweala would have cut the recurrent expenditure more deeply if she was able to. And this is the problem – once government starts spending some money even if ‘temporarily’, it becomes an incredibly difficult thing to roll them back when they become unaffordable. This is the same whether it is fuel subsidies in the developing world or welfare spending in the rich world – the easiest part is always for the government to commit to spending some money.

Come with me to the 2013 budget for Nigeria where we will see that the Nigerian Security and Civil Defence Corps will cost us a total of N58.5bn this fiscal year. Of this amount, N57.4bn will go towards salaries and allowances. And how much are these ‘civil defenders’ going to spend on defence equipment? A trifling N85m or if you prefer, a rounding error in their budget less than the amount budgeted for ‘security vote’ (N144m).

Friends, this is why it is so hard to cut the recurrent expenditure’s share of our budget in Nigeria. There is no way you can cut the NSCDC’s budget as it is without sacking a large number of them. And when budget proposals involve sacking people, you can be rest assured that they would do everything humanly possible to frustrate such efforts.

Nasir El-Rufai in his book The Accidental Public Servant tells the story of how a reform exercise was carried out for the civil service when he was in government and which he played a big part. At the end of the exercise, around 20,000 people were sacked for poor performance and other offences and a decent reduction was achieved in a hugely over bloated civil service. Alas, according to Mallam El-Rufai, the vast majority of these civil servants found their way back into the service even after they had been paid gratuities and pensioned off, leading to the obscene situation where these people were drawing a salary and pension at the same time.

The breakneck expansion of the size and reach of the Nigerian government especially in the last 5 years continues to be a parasite on our commonwealth. Various reform and rationalization reports (e.g. one by Steve Oronsaye) continue to gather dust in Abuja and even when parts of them are implemented, the people who have their mouths on the breast of government simply move to the other breast.

There are a million and one Ogas At The Top in Nigeria and they act as a first line charge on our revenues. They will get their share before the rest of us fight over the scraps – that is to say, N58bn will go to the NSCDC before we spend that money on building schools. And for what? What security are they providing us with? How exactly have they been defending us? How are they even going to defend us when they are spending less than 0.01% percent of their budget on equipment to defend? And to rub salt into an open wound, a state commandant went on a TV programme to denounce fake NSCDC websites and did not know the address of the real website.

Watch: Is This The Most Embarrassing Moment On TV This Year? NSCDC Commandant Fumbles On Live TV

Hilarious: My Oga At The Top By DJ Ziggy Feat. NSCDC (Watch)

When next you hear the Finance Minister come out with a half hearted attempt to reduce the stranglehold of recurrent expenditures on our revenues, these are the people who will wage war against any such efforts and it will take a tidal wave of public anger to shift some of these entrenched interests.

It’s frustrating that the Finance Minister has not seen it fit to capitalize on this golden opportunity to ride on the #OgaAtTheTop meme and steer the narrative towards one about our fiscal choices. Most Nigerians did not know about the NSCDC or pay it any serious attention before last week and yet they will pay N58.5bn to keep it going this year.

The #OgaAtTheTop meme, which launched a thousand jokes, tweets, blogposts, photos and t-shirts has undoubtedly been funny and a remarkable insight into what’s possible when a story catches the public imagination. But it should also serve as a reminder to us as to where and how we are being bled dry as a nation.

READ: See What Shem Has Done: Top 10 Photos Of The #OgaAtTheTop Craze

READ: No Stopping It Now: Nigerians Launch #OgaAtTheTop Website And Game (PLAY)

Go through the budget and you will find them there – all manner of agencies and bodies laying claim to this billion or that million and each one complete with several Ogas At The Top quietly collecting money for doing absolutely nothing. As sinecures go, few countries can match how we have turned them into an art form in Nigeria. This is the part of the whole story that isn’t quite funny – that we are unable to build schools and hospitals because we are maintaining several Ogas At The Top across the country.

For N58.5bn, is it too much to ask Obafaiye Shem, who is himself an #OgaAtTheTop (never mind his attempts to pass the buck on live TV) to know the web address of his organization?

No sympathies from me and I hope that more and more of the ridiculousness of the Nigerian state is laid bare.

Of course the NSCDC is a joke. That’s why everyone is laughing.

And here’s a challenge to you Madam Minister – give us a N29bn reduction in the NSCDC’s budget for 2014 so we know it’s real. Otherwise you are just a part of the problem yourself.

Follow: @DoubleEph

Feyi is an accountant in London with several unreconciled balances to deal with on any given Tuesday. He takes his job of commenting on any policy issue in Nigeria from the safety of faraway London very seriously. Everything he knows about economics, he learnt from reading reviews of textbooks on Amazon. Twitter: @DoubleEph

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