National Assembly and the cost of governance (1).

There is a preponderance of public opinion that compared with available financial resources; the cost of governance in Nigeria is high. This is contextualised within quantified opportunity costs that alternative investment of a part of the resources deployed to governance would have contributed in no small measure to improvements in living conditions, human and infrastructural development. The implication is that a good part of the resources that should have been channeled to human capital development and infrastructure are rather frittered away on administrative capital and recurrent expenditure consisting of personnel and overhead expenses. This is the situation at the federal level and replicated in all states and local governments in the federation.

The high cost of governance has been officially acknowledged and led to many official interventions including the Monetisation Programme, the setting up of the Committee on the Restructuring of Federal Government Ministries, Departments, Agencies and Parastatals (otherwise called the Oronsaye Committee) and many public expenditure management review panels. Non-state actors including civil society organisations, the media, organised private sector and labour have also waded into the challenge and made several appeals for effective government decisions to bring down the cost of governance.

With recent developments in the economy, particularly the dwindling oil price, (considering that crude oil is the mainstay of the Nigerian economy), decreased inflow of foreign investments, slowing economic growth and fewer jobs created in the last quarters, increasing public demand for reduction in the cost of governance, the inauguration of a new government on a popular mantra of change, and review efforts by Revenue Mobilisation Allocation and Fiscal Commission and the National Assembly, etc; opportunities have emerged for evidence led advocacy that may lead to the reduction of the cost of governance.

It is therefore imperative to focus on a fundamental aspect of the cost of governance, specifically, the cost of running the legislature at the federal level. The focus on National Assembly is in consideration of the role of the institution as the legal and moral compass of democracy and the duties of legislators – general law making and appropriation, oversight responsibilities, representation, etc. It is also the duty of National Assembly to prescribe the remuneration of major public, political and judicial office holders based on the recommendations of RMAFC. Once the legislature is able to reduce its costs, it would have a high moral and legitimate position to call the other arms of government to order.

Thus, the central goal of this discourse is to use empirical evidence to contribute to efforts at reducing the cost of governance in the National Assembly. This will be done through interrogating the appropriations to National Assembly over the years and the factors informing these appropriations; using macroeconomic indicators, legal and socio economic conditions in Nigeria to review the cost of running National Assembly and to make recommendations for reform.

Section 70 of the 1999 Constitution provides that a member of the Senate or House of Representatives shall receive such salary and other allowances as the RMAFC may determine. Thus, it is not for the legislature to fix its own remuneration. In the 2007 review of the provisions of the Certain Political, Public and Judicial Office Holders (Salaries and Allowances, etc) Act No. 6 of 2002, being the law regulating the remuneration and allowances of political, public and judicial office holders as at that date, RMAFC stated that it took the following into consideration: “(a) Changes in the basic fundamentals of the Nigerian economy; (b) External reserves; (c) GDP Growth rate; (d) rate of inflation; (e) correct placement of some category of public office holders who were wrongly placed in the old package; (f) need to modify old salaries and allowances and introduce new allowances that were not included in the old package; (g) need for a living wage to ensure honesty and dignity of the office holders and (h) need to ensure compliance with the provisions of sections 84 (3) and 124 (3) of the 1999 Constitution which states that the remuneration and salaries payable to the office holders and their conditions of service, other than allowances, shall not be altered to their disadvantage after their appointment.”

These are interesting foundations and considerations for a remuneration review exercise and we shall revert to them later. But suffice to state that these considerations were only employed for the review of the remuneration of this category of public officials and were not the determinants of the minimum wage or other public wages in the Nigerian economy.

RMAFC defined stakeholders to be consulted for the review of legislators’ remuneration and had interactive sessions with them as follows: the National Assembly, the state legislatures and local government councils. This definition of stakeholders is unprecedented and was skewed from day one to produce one result – an increase in remuneration and allowances. How can beneficiaries of an increase be the only stakeholders to be consulted over whether to increase remuneration or not?

The review by RMAFC led to a new enactment, being the Certain Political, Public and Judicial Office Holders (Salaries and Allowances, etc) (Amendment) Act No. 1 of 2008. The Act No.1 of 2008 was signed into law on 25th day of June 2008 by President Musa Yar’adua and has a commencement date of February 2007! Essentially, an Act of the National Assembly had retroactive effect in a democracy. This goes against all known precepts of constitutionalism as a law takes effect from the date of its assent by the President or any other future date indicated in the body of the law.

The allocations to NASS since 1999 averaged 2.92 per cent of overall government expenditure peaking at N158.916bn in 2011 and thereafter stabilised at a plateau of N150bn until the 2015 budget when it was reduced to N120bn. This has been high especially compared to the Judiciary which had an average allocation of 1.91 per cent of the overall Federal Government of Nigeria budget. The allocations to National Assembly do not appear to be based on any empirical evidence in terms of its relationship with macroeconomic fundamentals such as inflation, the cost of living index; or increased functions for National Assembly. By our calculations, the total salaries and allowances of 109 senators based on RMAFC’s prescriptions over the four year tenure will be in the region of N9.586bn whilst that of the members of the House of Representatives will be N26.728bn bringing the total for the four year period to N36.314bn.

By the time you input about 20 per cent of total (senators and members) remuneration to cover medical allowance, special assistants, legislative aides, duty tour allowance, estacode, responsibility allowance for principal officers and security and a further 50 per cent of total (senators and members) to cover salaries and allowances of officials of the National Institute for Legislative Studies, NABRO and National Assembly Service Commission, etc, the figures will climb up to N61.735bn for the four year period. This gives an annual personnel cost of N15. 433bn. These extrapolations are supported by the last published budgets of NASS for 2009 and 2010. In 2009, out of a total vote of N106.642bn, the personnel vote was N13.698bn (12.85 per cent), overheads N87.693bn (82.23 per cent) bringing the total recurrent to N101.392bn. Capital allocation was a mere N5.250bn (4.92 per cent).

To be continued

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