COVID-19: Time to examine cost of governance

As the coronavirus pandemic bites harder, TAIWO AMODU takes a look at the rising cost of governance and some of the institutions in Nigeria that have been rendered comatose by the effects of the challenge.


THE deadly pandemic, coronavirus, aside its unnerving fatality rate, has equally dealt a blow to the Nigerian mono-cultural economy. The drastic fall in the price of crude oil has caused a corresponding decrease in external reserves and volume of money to be shared by state government.

The Federal Government, in its 2020 Budget, offered $57 as its benchmark for crude oil in the international market. It has since fallen to between 26 and 31 US dollars per barrel in the world market.

For an import dependent economy that earns over 80 per cent from crude oil, the unsavoury development is a big strain on the nation’s foreign reserves.

Sunday Tribune’s checks revealed that the foreign reserves has dropped from $38.34 billion on January 15, to $36.69 billion on February 20.

According to the nation’s apex bank, the Central Bank of Nigeria (CBN), the reserves had been on a steady depletion from $39.8 billion in November 2019 to $39.24 billion on December 13, 2019, also losing $1.26 billion in October 2019 after the foreign reserves fell from $41.76 billion on October 2 to $40.5 billion as of the end of October.

The reserves also dropped by $482.18 million from $45.14 billion as of July 8 to $44.65bn on August 8, 2019.

According to a report, the “CBN’s policy on currency intervention has seen the apex bank introduce billions of dollars into the foreign exchange market to maintain the naira at a stable rate, in an attempt to curb imports and boost local production.”

During the week, the Muhammadu Buhari-led administration, through its Finance Minister, Zaynab Ahmed, released $150 million from the Sovereign Investment Authority, otherwise called Sovereign Wealth Fund (SWF).

According to the Honourable Minister of Finance, the withdrawal from the SWF became compelling in the face of dwindling fall in foreign exchange earnings from oil and its negative impact on the Federation Account.

The minister argued that based on the fiscal assumptions underpinning the 2020 Appropriation Act, monthly Federation Account Allocation Committee (FAAC) disbursements to the federal and state governments were projected at N888.5 billion. She expressed regret that FAAC monthly disbursements had since declined to N716.3 billion in January and N647.4 billion in February 2020, a situation that had affected the amount distributed to the three tiers of government by the Federation Account Allocation Committee.

She said: “Our experience shows that monthly average FAAC receipts must average at least N650 billion for the federal and state governments to meet their current obligations.

“Unfortunately, we project that monthly receipts may decline to below N400 billion over the next three to six months.”

Before her disclosure of $150 million withdrawal from the SWF, the minister had met penultimate weekend with the leadership of the National Assembly to seek legislative approval for N500 billion Intervention Fund to address the deadly CONVID-19 scourge.

Honourable Ahmed said the proposed fund, which would be dedicated to upgrade of existing health facilities in states across the federation, would be pooled from from various special accounts, grants being expected and loans from multilateral institutions.

She said:»What we are proposing is an establisment of a N500 billion COVID-19 Crisis Intervention Fund.

“This Fund that we are proposing, that should be created, will involve mopping up resources from various special accounts that the government as well as the Federation have, to be able to pull this N500 billion.

“Our general view is that this crisis intervention fund is to be utilised to upgrade healthcare facilities as earlier identified.

“The Federal Government also needs to be in a position to improve health care facilities not only in the states but to provide intervention to the states.

“We know that there will be a need for the parliament to agree and approve the taking of loans from these special accounts and we will be coming back with a proposed bill in that regard that will define what the fund will be used for.”


IMF drops hint

The fate of the over $29 billion external loan being sought from China, the Asian giant, hangs in the balance. But the international finance corporation, the International Monetary Fund (IMF), during the week, dropped a hint of a financial bailout for Nigeria.

The IMF Managing Director, Kristalina Georgieva, in a statement, said the multilateral institution was considering assistance to Nigeria under the Fund’s Rapid Financing Instrument (RFI) to help mitigate the dearth in Nigeria’s foreign earnings as a result of sharp decline in price of crude oil and to equally mitigate financial shock from the COVID-19 pandemic.

She said: “the IMF was anxious to help President Muhammadu Buhari in his concrete measures aimed at containing the spread of the virus and its impact, including by swiftly releasing contingency funds to Nigeria’s Center for Disease Control (NCDC) and working on an economic stimulus package that will help provide relief for households and businesses impacted by the downturn.

“To support these efforts, Nigeria’s government has requested financial assistance under the Fund’s Rapid Financing Instrument (RFI). This emergency financing would allow the government to address additional and urgent balance of payments needs and support policies that would make it possible to direct funds for priority health expenditures and protect the most vulnerable people and firms. We are working hard to respond to this request so that a proposal can be considered by the IMF’s Executive Board as soon as possible.”


Cost of governance: Who bells the cat?  

At the end of the meeting between the leadership of the National Assembly and the Minister of Finance, both parties agreed to review the benchmark for crude oil from $57 to $30 per barrel. But both the executive and the legislative arms were silent on the deafening agitations by Nigerians for the downward review in cost of governance.

Sunday Tribune’s checks revealed that the 2020 Budget estimate presented to the joint session of the National Assembly last October by President Buhari was increased from N10.33 trillion to N10.50 trillion by the appropriation committees of both chambers before the Appropriation Bill was signed into law. That was after the National Assembly had inserted new projects valued at N264 billion into the budget estimates.

A breakdown of the budget revealed that N560,470,827,235 was budgeted for statutory transfer; N2,725,498,930,000 for debt servicing; N4,842,974,600,640 for recurrent expenditure; N2,465,418,006,955 for capital expenditure; and N2.28 trillion for fiscal deficit.

Apart from its statutory transfer of N128 billion, the legislative arm also appropriated to itself the sum of N37B for the renovation of the National Assembly Complex.

Other agencies of government  to receive statutory transfer totaling  N565.59 billion included the Universal Basic Education (UBE); N111.79 billion and the National Judicial Council (NJC) with an allocation of N110 billion.

Other beneficiaries of first line charge  are the Basic Healthcare Provision Fund (BHCPF) in the Ministry of Health with N44.5 billion, while the Independent National Electoral Commission (INEC) has N40 billion.

Closely following INEC is the North-East Development Commission, which has N38.1 billion and the Public Complaints Commission (PCC) and the National Human Rights Commission (NHRC) has an allocation of N4.7 billion and N2.50 billion, respectively.


Nigerians call for reduction in legislative representation

For the National Assembly, Nigerians have called for a unicameral legislature as against the present bicameral arrangement which they perceive as bloated and a drain on dwindling public fund.

They have equally sighted overlap in functions of some of the existing federal agencies and called for a streamline to reduce recurrent expenditure. A good example is the existence of two anti-corruption agencies, namely the Independent Corrupt Practices and other related offences Commission (ICPC) and the Economic and Financial Crimes Commission (EFCC).

Nigerians have also been presented with heart rending account of staggering sum allocated to the State House Clinic, Presidential Villa. Investigation revealed that N13.59 billion has been budgeted for the State House Clinic in the last five years.

The sum of N3.95 billion, N3.87 billion and N3.20 billion were budgeted in 2015, 2016 and 2017, respectively. Further checks revealed that allocations for 2018, 2019 and 2020 were N1.03 billion, N82344 million and N723 million respectively.

Wife of the President, Aishat Buhari, had, in October 2017, upbraided the Chief Medical Director (CMD) of the State House Medical Center, Dr. Husain Munir, over what she described as poor state of facilities and equipment at the clinic despite yearly budgetary provisions.

A source at the National Assembly, however, told Sunday Tribune that plans were in the offing for a review of the Medium Term Expenditure Framework (MTEF) for 2020 Budget estimates.

“The government is determined to review downward capital projects across ministries, departments and agencies (MDAs) to the tune of 20 per cent.”


e Transparent In Identifying The Poor For Palliatives —CAN Charges Govt
THE Christian Association of Nigeria (CAN) has charged the state and Federal Government to apply transparency and inclusiveness in identifying the poor, whom relief materials had been made available for amid the present pandemic… Read full story

COVID-19: Why I Believe Nigerians, Others In Malaria Belt, Have Little To Fear —Abu, US Based Clinical Cardiologist
Dr Rasaq Olanrewaju Abu has been in medical practice since 1984 and currently runs a clinical cardiology practice in College Park, Maryland, USA. In this interview conducted online by SAHEED SALAWU, Dr Abu speaks on why the huge number of deaths being experienced in Europe due to COVID-19 pandemic and America may not … Read full interview

COVID-19: NCDC Confirms 17 New Cases, Toll Rises To 305
Nigeria Centre for Disease Control (NCDC), on Friday, has announced 17 more new cases of coronavirus (COVID-19), making the number of confirmed cases in Nigeria rise to 305… Read full story

Can I Have Prostate Cancer?
I am a 60-year-old man. My father died from Prostate cancer many years ago. Kindly let me know my chances of also having the cancer… Read full story

Outsmarting Covid-19
It is no longer news that COVID-19, a strain of coronavirus, has held the whole world to ransom. When the disease broke out in China some months back, it gave the whole world a chance to prepare ahead. It is however conspicuous that the preparation was and it is still not sufficient, looking at the severe effect of the outbreak… Read full story

Coronavirus Came From Bat, But How Did It Get To Man?
A vacuum of knowledge about the origins of the new coronavirus ravaging the world has provided fertile ground for all manner of theories — from the fantastic, to the dubious to the believable… Read full story

Eti-Osa Is Leading In Coronavirus Cases, Yet Flouting Stay-At-Home Order
Despite recording the highest number of coronavirus cases, residents of Eti-Osa Local Government Area of the state have continued to flout the stay-at-home and social distancing orders imposed on the state to contain the spread of the deadly virus, Saturday Tribune was told by one of the community leaders… Read full article

Help For Couples With Mental Health Disorders
IDENTIFYING problems without proffering solutions will amount to a wasted exercise. Every mental health disorder is treatable. Couples facing such a challenge should know that help is available to them. So, there is no reason to lose hope, and resign to fate. Once they embrace this truth, they will be able to seek for the available help… Read full article

I Was Under Some Pressure On What It Would Take To Be Olori —Olori Adeyanju
Save for beads, which she sparsely adorns at public functions, there is scarcely anything which announces her as the wife of a traditional ruler. Ask her about her preference for anonymous disposition, Olori Iswat Oluwakemi Adeyanju, wife of the Olororuwo of Ororuwo, Osun State, Oba Qamarudeen Adeyemi Adeyanju… Read full interview

Preventing Skin Damage Due To Face Masks
With many frontline healthcare workers wearing face masks for much of the day, some are experiencing uncomfortable skin damage. One of the authors of a recent article on the topic offers advice… Read full article

Manicure At Home Like An Expert
Getting a quality nail art in the comfort of your home is very easy and now is the best time as going to the salon is not an easy option because of the coronavirus pandemic… Read full article



You might also like

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. AcceptRead More