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- Should government sack 50% of civil servants?
Posted by : Unknown
Monday, December 3, 2012
At
the Second Annual Capital Market Retreat in Warri, the Central Bank of
Nigeria Governor, Lamido Sanusi, made a strong case against the current
dedication of about 70 per cent of the nation’s income to purely
consumption by civil servants and politicians, who comprise less than
one per cent of a population of over 160 million.
In support of his advocacy, Sanusi suggested five
areas in which recurrent expenditure can be reduced. First, he
recommended downsizing the legislature and the related bloated salaries
and allowances; second, he faulted the “wastage of funds for the
maintenance of 774 local government council chairmen and their aides”;
and consequently, suggested the removal of this third tier of
governance. Third, he queried the need for 36 state governments, some of
which are unviable. Sanusi also insisted on the total removal of fuel
subsidy, and finally, recommended that “you have to fire half of the
civil service, because the revenue government has is supposed to be for
167 million Nigerians.”
Really, if we genuinely desire infrastructural
development, it will be difficult to oppose Sanusi’s overriding
objective of redressing the current budget imbalance in favour of
capital expenditure. Not surprisingly, however, pressure groups from
those sectors, which would be adversely affected, have all come out with
‘gun-blazing’ attacks on these recommendations!
Deputy Chairman, House of Representatives Committee
on Media and Public Affairs,Victor Ogene, has countered that Sanusi
lacks the moral right to call for reduction in either the size of the
parliament or indeed, of the staff strength of the civil service, since
the size of the CBN staff has increased by over 20 per cent, to over
6,000, since Sanusi became Governor. Consequently, Ogene recommended
that Sanusi should first clean up the CBN’s ‘Augean stable’, in which an
annual budget of over N300bn is expended without any legislative
approval or oversight authority to ensure transparency and
accountability!
The Trade Union Congress President, Peter Esele,
alternatively, described Sanusi as not just professionally misguided,
but is also one of the “most idle persons” in the country. Esele
maintains that “all the overhead that the Governor is talking about go
to the politicians”, whom he describes as the highest paid anywhere in
the world.
The President of the Nigeria Labour Congress, Abdul
Waheed Omar, in his reaction, advised the Federal Government “to ignore
the ranting of this hollow economist, who has never demonstrated
patriotism in all his advice on economic and financial management of
Nigeria…. Sanusi’s only understanding of governance is simply about
saving money and not saving lives, as his proposals are repeatedly
devoid of human content and without consideration for the implication on
larger society”.
Omar warned on the excessive burden that the sack of
50 per cent of civil servants will add to the already suffocated
unemployment market, and therefore reminded Sanusi that “governance is
about improving the quality of lives of the people and not the
destruction of productive lives”.
Omar concluded that the suggestion for scrapping of
the local government councils in a country that runs a federal system
“is an indication of how unknowledgeable and unfit Sanusi is as a public
office holder”.
Paradoxically, all the above vociferous critics of
Sanusi’s recommendations would, nonetheless, agree on the obnoxious
level of the cost of governance in Nigeria, but every one of these
critics would stoutly resist any reduction to whatever benefits their
constituencies enjoy under the current crippling dispensation.
The Governor of Delta State, Dr. Emmanuel Uduaghan,
who was the Chief Host at the Capital Market retreat, advised that
before any rational government could take such a rash decision for mass
sacking, it must develop the critical infrastructure that would attract
investors. He concluded that instead of advocating the unpopular
solution of sacking workers, the CBN should first put in place an
enabling environment that would bring down interest rates to enable both
the real sector and governments to access much cheaper loans for
industrial regeneration and infrastructural enhancement respectively.
In reality, Uduaghan’s observation on the need for an
enabling environment is probably the most constructive so far; the
issue of a lean and more efficient civil service structure without
further jeopardising the oppressive rate of unemployment in the country,
can indeed, best be achieved with inflation and interest rates below
five per cent. No economy has been known to grow with rapidly increasing
employment opportunities, when core inflation hovers above 12 per cent
and cost of borrowing to the real sector is about 25 per cent. Thus, our
pursuit of a more efficient and cost-effective civil service structure
would lead to double jeopardy for the economy, if we embarked on mass
retrenchment to reduce recurrent expenditure without creating the
enabling environment for the real sector to grow and quickly absorb
those laid off!
Besides, necessary first steps in any serious attempt
to cut recurrent expenditure should certainly include reduction in
duplication and waste in governance, as well as decrease in corruption
and the humongous fraud in fuel subsidy payments.
Fortunately, even if the policies and public comments
of the ebullient CBN Governor reflect an anti-social mindset, as
claimed, it is still undoubtedly within Sanusi’s powers to create an
enabling environment for industries to thrive, for employment
opportunities to increase and for social welfare to improve. The
critical variables of inflation, interest rates, stable purchasing
power, and exchange rate are within the purview of the CBN’s core
mandate of price stability, which is currently made unattainable by
recurring systemic excess cash.
Paradoxically, the ‘curse’ of excess liquidity is
deliberately sustained with the CBN’s anti-people monetary payment
model, which entails substitution of bloated naira allocations for
dollar-denominated revenue.
In truth, Sanusi would successfully demonstrate a
commendable passion for economic regeneration and improvement in social
welfare of the masses, if he subscribes to a constitutionally compliant
payments model, which adopts dollar certificates for payment of monthly
allocations of dollar-derived revenue to constitutional beneficiaries.
Incidentally, such payments reform will simultaneously dry up the
systemic cash surfeit that funds corruption and waste in governance, and
naturally predicate more efficient resource management.
The positive economic and social transformation that
this will bring about in our economy will become evident even before
Sanusi’s current term expires, and will remain sustained for years
thereafter. The erstwhile controversial Governor would ultimately leave
indelible revered footprints on the sands of time, as Nigerians, both
living and yet unborn, will in retrospect, forever, remain grateful for
his act of courage, in freeing our people from economic bondage and
deepening poverty.