Cost of Governance: Is Public Sector Downsizing Escapable?
It is no longer news that the Nigerian economy has officially entered into recession. This announcement by the Minister for Finance is just a formal acceptance of a reality which most Nigerians, especially those working in the public service, have felt for the past few years. Out of all the 36 states in Nigeria, only very few states have been able to conveniently pay the salaries of its workers. Even the federal government is borrowing to pay its workers’ salaries! The result is that many workers have been left existentially stranded, and more significantly, the economy has been paralysed because of the unceasing industrial action by several unions in the states. The effect of all these on the productivity profile of the Nigerian economy is terribly gloomy. The naira has been in a downward spiral for a while now; corruption saga has become a recurrent refrain on the national media space; production of crude oil, Nigeria’s monocultural economic product, has been rudely disrupted by militants in the Niger Delta as well as sundry global forces. On the whole, there are so many things currently wrong with the Nigerian state and its economic dynamics.
It would then seem that the change slogan of the Buhari administration is being resisted at all corners by several economic forces and intervening variables it did not bargain for, anticipate and which perhaps, requires that much more strategic policy intelligence than is currently in place, be deployed. This is now a fact for all to see. But the other fact is that change within the Nigeria socioeconomic context is urgently required if there is to be any significant national development. And to all intents and purposes, the administration’s confrontation with a few policy conundrums, like the anticorruption campaign, is highly commendable. Yet, there is more that needs to be done. Here is a fundamental advice that the president might be wise to take from a former president of the United States, Franklin D. Roosevelt: “The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something.”
One of Nigeria’s failings is that we fail to experiment at certain critical policy levels. And if there is an issue which demands “bold, persistent experimentation,” it is the cost of governance distress Nigeria has been facing for a while now. True, the Buhari government has paid attention to this, but we need more than cosmetic reduction in personnel and structures to achieve a significant restructuring of the economy. The Nigerian presidential system of government is one of the most expensive in the world. It is as if the system was manufactured to gulp scares resources. When Lamido Sanusi Lamido, the former governor of the central bank of Nigeria, raised the alarm sometimes ago that close to 30% of the national budget goes to servicing overheads in the national assembly, we were just about scratching the surface of the cost of governance trouble Nigeria faces. The national assembly is just one tiny side of the equation; the entire public sector institutional architecture really needs unbundling and downsizing.
The cost of governance problematic is a huge one. In recent times, the media have been shocked by the humongous figures, in billions of naira, that were recovered from a perfected system of siphoning involving “ghost workers.” Efficiency and productivity are sacrificed on the altar of numbers, while the trade unions remain vigilant in guiding the affairs of those who ordinarily ought to benefit from severance from the public sector. Rightsizing has always been the obvious and easy antidote to high cost of governance dilemma. In fact, it constitutes the first condition in a restructuring exercise that ought to automatically lead to a productivity revolution to be supervised by a debureaucratised managerial public service primed for national growth and development. The sign is clear: with the stark phenomenon of bankrupt and nonviable states, Nigeria faces the danger of a significant economic collapse worse than the present recession. But then the solution is also clear: a radical, scientifically derived but humane restructuring not only reduces the cost of governance but also enables the diversion of cost saved to infrastructural development. If it must be done however, then the payroll and institutional restructuring, using productivity audit tools, must be extensive enough to involve the review of all appointments in government that are funded from national revenues and the entire expenditure of government. It is only in this sense of unbundling and restructuring of the entire expenditure structure of government that the government could go with clean hands to equity to negotiate with the trade unions the rightsizing inescapable option. But then, as Banchao, the Chinese diplomat asked, “How can one catch tiger cubs without entering the tiger’s lair?” How can great governance deeds be accomplished without uncommon courage and perspicacity?
Restructuring arises from a conceptual understanding of the role of government in governance. Redefining the role of the state implies doing away in Nigeria, at the first instance, the claim that the Nigerian government is the largest employer of labour. That reputation exposes the government’s ignorance about its capability to generate wastage and undermine productivity. The essence of the managerial revolution in the public service is to interrogate government’s limited capacity to organise efficiency through the infusion of private sector and Diaspora skills and competences. In terms of efficiency saving, this is done through the application of an econometric calculus that suggests an optimal and affordable size of the workforce required in the MDAs and the public service at large.
This vision appears clear, but its possibility lies in the government’s awareness of its role, and its willingness to enter into a continuous conversation with trade unions and employers of labours to fast track a change management dynamics that can make Nigeria work for democracy and de- velopment. Restructuring has many critical dimensions each of which could undermine the overall objective. The trade unions are a critical part, but once the adversarial undertone is removed by the willingness to brainstorm and engage the bigger picture in the nation’s best interest, then their support is crucial to the success of all the other requirements. One of these is the urgency of creative human resource good practices, mediated by a rigorous job evaluation and comprehensive manning procedures, which matches skills and competences to the scope of workload requirements in the public service. In other words, employment in the public sector would have to deploy meritocratic metrics that trumps nepotism, corruption and incompetence. This will automatically involve, for instance, the firming up of establishment and treasury control that will serve as the institutional bulwark against bloatedness.
One of the advantages of government instituting a constant conversation with the trade unions and other employers is that, at the level of the state government, a decentralisation framework can be established that ensures that wages are conditioned to the productivity profile and financial strength of each state rather than a blanket wage framework that ignores the economic reality which is presently being played out in terms of the incapacity to pay salaries. It beats the imagination to compare Lagos state with Osun; or Ebonyi wih Sokoto. What is interesting about restructuring, but which requires real understanding, is that a properly restructured public sector brings real benefits eventually in terms of real wage and welfare package. And once the conversation gets going between the stakeholders, it becomes possible to put all the economic elements of any state on the table, reengineer efficiency through the appropriate rightsizing method and plough back the benefits into workforce welfare and compensations.
One appropriate rightsizing method which the trade unions would applaud once they see its intrinsic benefits to the progress of Nigeria is a humane and properly crafted employability package that is attached to any severance plan for those who are due for retirement. Of course, the first source of fear is the perplexing cost that would be generated by the severance package. But then, a fringe benefit could come from development partners which might be persuaded to underwrite the cost. Beyond this, severance from the public sector comes with a moral imperative concerning government’s care for those who have spent their productive years serving the government without any adequate attention to the acquisition of any post-retirement competences. Employability training ensures that public servants, while preparing for retirement or upon notification of redundancy, are prepared with skills and competences that could tide them over while out of service.
A humane severance programme and package has a larger effect on the system—it sends a critical message to others still within service that their lives do not literally come to an end in penury and bitterness after retirement. Once there is a reigning perception of the loyalty of the government to its serving and retired workforce, there is a more than average probability that corruption and productivity can have inverse reaction upon each other.
Restructuring is a critical business involving enormous risks but immense advantages for a country like Nigeria seeking national growth through a transformed productivity paradigm. But every effort so far have been met with severe reactions and public outcries. Most governors would prefer to evade the issue until the end of their terms to pass the buck to the coming administration. But then, there will be a critical point when the buck could not be passed again, and political courage would have to be cranked up to deal with it. I suspect we have all arrived at that critical juncture. It is either Nigeria will survive the cost of governance menace and properly restructure or her national coherence will fizzle out within a framework of avoiding responsibility.