
Jonathan
The
Federal Government appears to have dumped the Steve Oronsaye Report
that recommended the reduction in the number of government Ministries,
Departments and Agencies.
Details of the Medium Term Expenditure
Framework and Fiscal Strategy which was sent to the National Assembly by
President Goodluck Jonathan in Abuja on Wednesday showed that all the
MDAs were provided for in 2014.
The MTEFFS showed that the capital
component of the expenditure would go down from the 32 per cent achieved
in 2013 to 26.22 per cent in the 2014 fiscal year.
It also indicated that a total of 712bn
would be spent in the servicing of the nation’s debt comprising N6.49tn
domestic debt and $6.67bn as of March 2013.
The Federal Government explained that it
would not save much money by reducing the number of MDAs. It added that
the merger of the agencies would involve some legal processes that
cannot be accomplished within a short period of time.
The document said, “It had been hoped
that significant savings would be made from the implementation of
government’s White Paper on Rationalising Public Agencies.
“Unfortunately, very little or no
savings are likely to be made from the implementation of government’s
White Paper on rationalising public agencies due to the fact that many
agencies recommended for closure or merger were allowed to remain partly
due to the fact that some of them are underpinned by law, which cannot
be repealed in the short run.”
According to the government, the
reduction in capital expenditure is explained by the fact that revenue
will dip in 2014 and capital projects will be affected.
The government also raised the alarm
that recurrent expenditure was drying up the resources required for the
development of the nation, adding that the quest for higher emoluments
by public sector workers was unsustainable.
The MTEFFS paper said, “Between 2011 and
2013, we were able to reduce the share of recurrent spending to about
68 per cent and raise capital to 32 per cent. However, because of the
new challenges occasioned by the projected significant reduction in
revenue in 2014, there will be a temporary dip in the share of capital
spending to about 26.22 per cent. This is because the brunt of the
shortfall in revenue is borne by capital expenditure.
“It is essential to note that the level
of outlay of personnel cost is crowding out expenditure on capital
spending needed to develop the nation and constitutes a major drain on
public resources. Even now, there continues to be pressure demand for
higher emoluments, pensions, etc. This is clearly unsustainable and
would need to be addressed.”
The government warned that if the
increasing emoluments were not checked,it would spend higher share of
available resources on salaries and allowances of workers that have
little or no work to do due to lack of capital.
The government also disclosed that
increasing oil theft had had negative impact on the implementation of
the 2013 budget, adding that a worsening of the problem in 2014 would
exacerbate the challenge of meeting oil revenue projection.
It also said that the delay in passing
the Petroleum Industry Bill was affecting the auctioning of new oil
acreages with the resultant non realisation of signature bonuses that
had been reckoned as part of the sources of revenue to the government.
The government hinted that efforts would be made to increase the contribution of tax revenues.
The Federal Government pegged new borrowing in 2014 at N572bn, slightly lower than the N577bn stipulated for 2013.
However, the cost of debt servicing will
go up from the N591.76bn in 2013 to N712bn in 2014. This is made up of
N663.61bn for servicing domestic debt and N48.39bn for servicing the
foreign component.
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