Cutting governance costs key to Nigeria’s economic recovery – ex-NERC chair

“Today, Nigeria is highly indebted to the point that we service our debts with almost 80-90% of our revenue"

Nigeria’s escalating debt crisis and economic woes could be alleviated by addressing the soaring cost of governance, Sam Amadi, a former Chairman of the Nigerian Electricity Regulatory Commission, has said.

Mr Amadi, the director of the Abuja School of Social and Political Thought, spoke on Tuesday at the 6th annual lecture of the Just Friends Club of Nigeria themed “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 bloat is draining resources and limiting funds available for critical capital investments.

“Today, Nigeria is highly indebted to the point that we service our debts with almost 80-90% of our revenue. We are not just a highly indebted country; we are borrowing to service the debts, further worsening our economic situation.

“The first requirement of debt restructuring is to look inwards and restructure public expenditure. This is one reason for worrying about the rising cost of governance,” Mr Amadi stated.

He also said that government expenditure has grown exponentially due to the proliferation of ministries, departments, and agencies, each drawing on extensive capital and recurrent costs.

He cited the Orosanye Report, which has long recommended the merger or elimination of overlapping agencies, as an important but insufficient step in reducing costs.

According to him, institutional inefficiency and “turf battles” further hamper the coherence and effectiveness of government policy, creating an environment where bureaucracy undermines performance rather than enhancing it.

“Development requires coherent ideas and coherent practice,” he argued, urging a more holistic response to cost reduction.

“We cannot reduce the cost of governance in any systematic and effective manner unless we can articulate a strong and coherent vision of government and design simple processes that enable us to deliver.”

Mr Amadi called for a strategic approach rooted in economic transformation, highlighting that cost control in government should go beyond restructuring agencies.

He emphasised the importance of simplicity in governance, noting that straightforward systems are a hallmark of smart design. According to him, effective and cost-efficient structures are essential.

Emphasising the vital importance of capital formation to economic development, he urged the government to redirect funds toward infrastructure and capital investments that would enhance Nigeria’s productive capacity.

Recommendations

In addressing the critical need to reduce the rising costs of governance, Mr Amadi emphasised the importance of a comprehensive strategy that encompasses a thorough diagnosis of the underlying issues.

He argued that simply focusing on the number of government agencies is insufficient but a more nuanced approach is required. This includes optimising the structure of public service, aligning institutions with clear development objectives, and prioritising accountability in budgeting.

Mr Amadi stressed the need for coherence across government functions, highlighting that reducing the cost of governance systematically and effectively requires a strong and coherent vision of government.

He pointed out that alignment among all government functions is essential for enhancing efficiency and accountability, which are crucial for achieving significant savings in public expenditure.