Saturday, January 7, 2012

Sacrifice for subsidy removal-Can NLC make the first move?

Since there seems to be a consensus that the FGN should make some sacrifice if it wants Nigerians to accept subsidy removal, I have taken the liberty to paste below a tabular representation of the 2012 budget available on the website of the budget office. Since we want cuts in public expenditure, perhaps, those interested in figures can take a look at it and suggest the expenditures that we do not need.
But for those that may not have the time to look at it, this is a brief summary.
The table shows a breakdown of the specific allocations to the different segments of governance. The first line shows the allocations to Ministries, Departments and Authorities, which the FG calls MDAs. They get the biggest chunk of the budget in 2012 and that is N2.748 trillion to spend this year. The MDAs comprise the Presidency and 41 other ministries. Their N2.748 trillion allocation make up 58 percent of the total FGN 2012 budget.
A further break down of this allocation shows that personnel cost, which is the same as Salaries and wages of civil servants who work in this ministries will consume N1.64 trillion. This is 59 per cent of the allocation. It will be of interest to find out the number of civil servants in these ministries. Another N257 billion is allocated as overheads to run these 42 ministries bringing the total recurrent expenditure of the MDAs to N1.90 trillion. The balance of N852 billion is what is set aside as capital expenditure to build the infrastructure that will benefit the majority of Nigerians.
Since the budget proposal was released, there has been much interest in the budget of the presidency and the national assembly. So how much is the total allocation to the Presidency? The allocation to the Presidency (of the total N2.748 trillion MDA's allocation) is N44 billion about 1.6 per cent of the total allocation to the MDAs.
Of this amount, the Presidency is proposing to spend N13.29 billion on personnel and N14.5 billion as overheads. The Presidency has also budgeted N15.8 billion as capital expenditure.
A detailed look at the expenditure profiles of all the MDAs shows that salaries and wages dominate. About 94.43 per cent of the N308 billion allocated to the police will go into paying salaries and wages of police men across the country. Also 80 per cent of the budget of Ministry of Education is also for salary and wages while 6.80 per cent will go into other overheads leaving just about 13 per cent for capital expenditure. The Ministry of defence will also see 78 per cent of their budget consumed by salaries, about 12 per cent for overheads leaving a balance of 10% for capital expenditure.
What is clear from the figures shown in the table is that the wage bill is heavy. This is due to either the wages being paid in the civil service is too high or we have an over bloated labour force. Obviously, it is the later. We have too many civil servants with too little to do.
So would labour agree to a cut in number of people working for the government? If we can cut FG personnel cost by just 10 per cent, it will free up N160 billion, three times the whole budget allocation to the presidency. Imagine if this is done across the States and local governments. The truth is what most Nigerians already know, we can do without a good number of our civil servants. A good number of them do less than they are paid for; they are only retaining their jobs because they are protected by Big Bother NLC, which will not allow any of its members to be touched.

No comments:

Post a Comment