SLS and NASS – A Wasted Opportunity!

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SLS and NASS – A Wasted Opportunity

December 03, 2010; 0530hrs, Omole, Lagos, Nigeria

"I love the man that can smile in trouble, that can gather strength from distress,
and grow brave by reflection. ‘Tis the business of little minds to shrink, but he whose
heart is firm, and whose conscience approves his conduct, will pursue his principles
unto death." Thomas Paine.

The CBN Governor, Sanusi Lamido Sanusi (SLS) made a statement during a two hour
speech in an academic community which made headlines as it touched on the
growing debate over the huge cost of government for which, in the light of our
decaying national infrastructure, increased borrowing and need to prioritise spending
has captured the attention of everyone concerned about the consequences.

The NASS responded to this use of data expectedly – seeking to stem the
momentum the CBN Governors statement had stirred up – by inviting him and the
Honourable Minister of Finance, Mr. Olusegun Aganga for a public hearing over two
days.

If anyone had thought that this meeting would benefit the Nigerian tax payers, this
expectation quickly evaporated as the exchanges went on. It however remains an
instructive episode – A Wasted Opportunity!

The Senate Hearing - Summary

Bearing in mind that the foundational data for this controversy emanated from the
Budget Office, the NASS public hearing succeeded in revealing three things:

1. that the figures used in managing the economy is subject to dispute between the
principal officers of the executive on the one hand and the legislature on the
other hand;
2. that the Ministry of Finance has an issue with internal alignment of statistics and
data as exemplified in the exchanges described above; and
3. that there remains a need for a clarification of the definition and component parts
of what makes up government overheads/recurrent expenditure.

Definition of what is overhead: A follow-through revealed that the CBN relied on

two key documents as a guide for its understanding of what constitutes overheads:

(i) the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper from
the Ministry of Finance which was forwarded to the NASS under cover letter from the
President, in which, on page 40, the total Federal Government overhead as a line
item is stated as N536.27b. The CBN represents that this aligns with internal
figures.

(ii) The "Citizens' Guidelines to Understanding the 2009 FG Budget", a document

published on the MoF official website (http://www.budgetoffice.gov.ng/), in which the
components of Recurrent Expenditure and Overheads are clearly stated (see Part A,
under General Issues, Recurrent Overheads - http://www.proshareng.com/reports/3055)

The exchange between the NASS, HMoF and SLS highlighted the important issue
about the unacceptability of a situation where there are different versions on the
same statistic/data for decision making in our economy.

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The question that however comes to mind is that - why should there be a total
overhead figure as stated in (1) above without the inclusion of the ‘service-wide’
overheads? Why should a 50 year old nation have issues with what constitute its
overheads?

The Underlying Message

SLS was indeed validating what every Nigerian already knows and is worried about;
something I suspect the NASS appreciates but has not fully addressed, or is unable
to address without public intervention - that our income side continues to go down
while both our capital and recurrent side continues to widen, the consequence of
which the monies previously kept aside for a rainy day such as the Excess Crude
Account (ECA) no longer exist requiring us now to resort to borrowings - a desperate
and unsustainable measure.

The underlying concerns are situated in the following:

1. The widening cost of running Government;
2. The need to be austere, fiscally disciplined and prioritise expenses; and
3. The cost and nature of our political culture, one steeped in patronage and not
performance, which alters actions.

Indeed, the nation should be alarmed that if the CBN Governor is making a claim
purely on the basis of data contained in the Federal Governments Budget, and he
chooses to use same to highlight a point to the next generation – he was simply
stating the obvious. Anyone accessing the MoF website can access the same
information and arrive at the same conclusions.

What should have happened?

1. The CBN Governor publishes his presentation and the source of the publicly
available information he relied on. Given that speakers often introduce a
comment here and there, a video clip of his presentation can be shown on
TV/online. It would appear that not doing this absolves the media of overtly
sensationalising the story.

2. The National Assembly issues a rejoinder stating its position or compels the
Budget Office to immediately clarify the figures using data it provided the NASS
and the CBN Governor.

3. The visit of the HMoF and the CBN Governor presents an opportunity to
discuss the main substance of the lecture - the high cost of government and the
implications for the economy.

Take Away! – Lessons Learnt

The increase in apathy and society’s disenchantment with the NASS is the symptom
of a vacuum in our management of democracy’s deliverables. If we are to develop as
a nation and strengthen our democracy, this episode offers us valuable lessons that
must not be lost, viz:

1. Courage combined with integrity is the foundation of character, and SLS sent a
message to the future generation that will reverberate for as long as he remains

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consistent. Based on personal integrity, he inspired all to stand up to the system

– that is how change and progress will be achieved.
2. Olusegun Aganga had an opportunity to make a case for the better management
of the economy starting with the need to prune down the cost of Government.
3. Legislators cannot heckle, bully or be seen to intimidate invited guests in the
hallowed chambers of the National Assembly – the heart and soul of our
democracy where freedom of thought and expression is protected. This is a
learning point in the legislature-executive exchanges for the future; just as
invited guests are also expected to conduct themselves properly by giving
reasoned responses and information even when not under oath.
4. NASS, it would seem missed the opportunity to engage the public on the cost of
running our democracy – be it 3% or 25% – thus rendering the time spent
organizing the public inquisition a considered waste.
5. Inter-agency co-operation within government appears disjointed and work is
required to ensure that data is centrally co-ordinated – gathered, stored and
easily retrievable by those cleared to access same.
6. The day of reckoning is nigh as our resort to borrowings to fund recurrent
expenditure appears unsustainable – here the Minister of Finance and the CBN
Governor appear to have a congruence of thought.
7. The growing number of unemployed youths and out-of-school young men for
whom the legislature ought to be concerned about has reached intolerable
proportions and any ray of hope that existed before has been eroded by a
creeping feeling of hopelessness, as seen in the misplaced priorities of the NASS
who have spent 3 days now addressing a needless subject.

There are decent and hardworking men and women in the NASS who simply want to
serve their country and just like what obtains in every sphere of human life, they
often go unheard, their efforts fail to make the front pages of newspapers or their
voices are drowned in the noise that pervades the clime.

Now, the NASS has an opportunity to do the right thing and draw the curtain on this
episode. Our democracy requires it and the people demand for it.

What we however must not do is to miss the opportunity we have now to resolve the
challenges exposed about inter-governmental relations; and the reliability, credibility
and access to information from the budget office. We are all shareholders in the
stock of Nigeria Plc.

Olufemi AWOYEMI, FCA

ceo@proshareng.com

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