Nigeria's growing debt crisis and economic woes could be alleviated by addressing the rising cost of governance, said Sam Amadi, former chairman of the Nigerian Electricity Regulatory Commission.
Amadi, Director of the Abuja School of Social and Political Thought, spoke on Tuesday at the sixth annual conference of the Just Friends Club of Nigeria with the theme “The High Cost of Governance as an Impediment to Development.”
He underscored the need for a more streamlined and efficient public service structure, warning that the country's current bureaucratic excess is straining resources and limiting funds available for critical capital investments.
“Today, Nigeria is heavily indebted to the point that we pay our debts with almost 80-90% of our income. We are not just a highly indebted country; We are borrowing to pay off debts, which makes our financial situation even worse.
“The first requirement of debt restructuring is to look inward and restructure public spending. This is a reason to worry about the rising cost of governance,” Amadi said.
He also said that government spending has grown exponentially due to the proliferation of ministries, departments and agencies, each of which draws on large capital and recurring costs.
He cited the Orosanye Report, which has long recommended merging or eliminating overlapping agencies, as an important but insufficient step to reduce costs.
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According to him, institutional inefficiency and “turf battles” further hamper the coherence and effectiveness of government policy, creating an environment in which bureaucracy undermines performance rather than improving it.
“Development requires coherent ideas and practices,” he argued, urging a more holistic response to cost reduction.
“We cannot systematically and effectively reduce the cost of governance unless we can articulate a strong, coherent vision for government and design simple processes that allow us to deliver.”
Amadi called for a strategic approach based on economic transformation and stressed that cost control in government should go beyond the restructuring of agencies.
He emphasized the importance of simplicity in governance, noting that simple systems are a hallmark of intelligent design. According to him, efficient and profitable structures are essential.
Stressing the vital importance of capital formation for economic development, he urged the government to redirect funds towards infrastructure and capital investments that would enhance Nigeria's productive capacity.
Recommendations
Addressing the critical need to reduce the rising costs of governance, Mr. Amadi emphasized the importance of a comprehensive strategy that encompasses a thorough diagnosis of the underlying problems.
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He argued that simply focusing on the number of government agencies is insufficient, but that a more nuanced approach is required. This includes optimizing the structure of the public service, aligning institutions with clear development objectives and prioritizing accountability in budgeting.
Amadi highlighted the need for coherence between government functions and stressed that reducing the cost of governance systematically and effectively requires a strong and coherent vision of government.
He noted that alignment between all government functions is essential to improve efficiency and accountability, which are crucial to achieving significant savings in public spending.