Abuja, March 10, 2024 – Mohammed Shehu, the Chairman of the Revenue Mobilization Allocation and Fiscal Commission (RMAFC), says the high cost of governance in Nigeria is draining its resources.
Shehu urged the Federal Government to check the high cost of governance as it is also hindering economic development.
The RMAFC chairman gave the advice in a statement in Abuja on Sunday.
He attributed the high cost of governance to several factors like the expensive presidential system, a bloated bureaucracy with overlapping ministries, and widespread corruption.
Sheu said the excessive spending on administration far outpaced investments in crucial areas like infrastructure and industrial expansion.
According to him, the imbalance hurts the real sectors of the economy, ultimately impacting the lives of everyday Nigerians.
Shehu highlighted several other contributors to the high cost of governance to include inefficient public service delivery due to poor infrastructure; high security costs arising from insurgencies, kidnappings, and other security threats; excessive payouts in salaries, severance packages, and allowances; Extravagant spending by government officials; crippling burden of domestic and foreign debt and weak institutions that struggle to enforce regulations.
The RMAFC chairman commended President Tinubu’s administration for embracing the Oronsanye Report as a blueprint for streamlining government agencies.
He said the full implementation of the report could significantly reduce administrative costs, freeing up funds for vital infrastructure projects that benefit Nigerians directly.
Shehu also applauded the government’s current economic and monetary reforms and praised the focus on maintaining stable prices and exchange rates.
He said these policies would help to curb inflation’s damaging effects.
Sheu said price stability would allow Nigerians to plan their finances more effectively and protect the purchasing power of the Naira.
A stable exchange rate, he said, would foster investor confidence and minimizes uncertainties in the foreign exchange market.
“This, in turn, attracts foreign investment, improves financial inclusion, and creates a more predictable environment for businesses”.
The RMAFC also commended the ongoing reforms in the Bureau De Change (BDC) market. These reforms aim to establish transparent operations in line with international best practices.
“This will increase trust among businesses, regulators, and the public. A well-organized BDC market with clear procedures plays a crucial role in maintaining a credible foreign exchange system”.
He called on the Federal Government and states to use the increased allocations from the Federation Accounts Allocation Committee (FAAC) wisely.
“These additional funds should be used to provide adequate support to the Nigerian people, particularly those struggling with the effects of subsidy removal,” he said. (GBN)
