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that some of them are underpinned by law, which cannot be repealed in the short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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Politics