ABSTRACT
One the challenges Nigeria is facing
over the years is the cost of governance. This is what is partially acting as a
stumbling block to our economy. It has now become a challenge to the concerned
practitioners and the contemporary scholars in the field of business and social
science research. Good governance has certain qualities associated with it,
which includes ensuring respect for human rights, equity and rule of law;
strengthening democracy through public participation and pluralism; promoting
transparency, accountability, anti-corruption policies and capacity in public
administration. In order to have a good government that caters for the
citizens, we must start cutting the high cost of governance in Nigeria starting
from the Federal government to the state and even to the grassroots government
and watch how rapid our economy will grow. This study therefore gives incisive
steps on how to achieve economic growth by cutting high cost of governance we
are currently running in the country.
CHAPTER ONE
INTRODUCTION
1.1 Background
to the Study
For any society to
make progress there must be a government to run its affairs. However, citizens
would perceive government as a burden when its recurrent expenditure is
repeatedly higher that its capital expenditure, which should impact positively
on the economy, especially in the areas of employment generation, investment
and other activities that induce growth. This
is the challenge that stares Nigeria in the face. It is now incontrovertible
that the cost of running a democratic government is high in the country. This
is aptly demonstrated in this year 2012 budget. While N2.472 trillion was
proposed for recurrent expenditure, that is a figure prompted 72 per cent of
the expenditure profile, N1.32 trillion, representing 28 per cent, was proposed
for capital projects. Nigeria is currently in need of development like
most other nations of the world. The dream of development for the improvement
in the living standard of the people seems to be fading away. This could be
ascribed to the inability of the various governments in the past to effectively
utilise the available scarce resources to accomplish the desired goals of
development in the society and one of the major reasons for this state of
affair is the high cost of governance in the country.
The high cost of governance in Nigeria
is seemly worrisome when we consider the fact that government expenditure in
the past has not translated into any meaningful development in terms of the
improvement in the lives of the people, this is because Nigeria still ranks
among the poorest nations of the world. It has been observed that the
prosperity of any nation hinges on efficient government. This is because it is
the responsibility of the government to help in sustaining the social contract
that binds every member of the state or country together. In a bid to overcome
the challenges of high cost of governance, successive governments in Nigeria,
since the return to democratic rule in 1999, have talked about the need to
reduce the country’s high cost of governance as this will make more funds
available for development. The irony of it is that rather than reducing it,
every new government seems to increase it further than it inherited from its
predecessor to the detriment of development and the people in one way or the
other.
The United States, the
most powerful and richest country in the world, has a comparatively slimmer and
more cost-effective bureaucracy than Nigeria. It has less than 20 federal
ministries and secretaries of state (equivalent to our own ministers). The
British cabinet is smaller than that of Nigeria. And spending on the public
service in Britain is undergoing savage cuts currently to reduce the cost of
running the country. I can only think of two or three countries that, because
of their huge size, have larger bureaucracies than Nigeria. But despite the
huge size of its bureaucracy, top heavy with an inverted pyramid structure,
Nigeria really does not have an effective public administration. This accounts
for its poor budget implementation. Its bureaucracy remains weak, incompetent,
and ineffective. A slimmer bureaucracy is likely to be more effective in
implementing the government’s economic programmes and easier to control.
Total administrative expenditure as a
percentage of gross domestic products (GDP) was a high as 8.72% in 1977 but
fell to an all-time low of 2.04% in 2002. According to Adewole and Osabuohien
(2007), if we assumed that government administrative expenditure supports the
GDP of any given society, then an administrative expenditure of nearly 9 kobo
went into the production of N1 worth of goods and services for the period of
1977 to 2002. A research work of Stephen Ejuvbekpokpo published in the Global
Journal of Management and Business Research in 2012 titled “Cost of governance
on economic development in Nigeria,” he found that “a unit rise in recurrent
administrative expenditure would lead to a 0.52 unit fall in gross domestic
product (GDP). Conversely, he found out that a unit rise in any capital
administrative expenditure would obviously cause the gross domestic product to
fall by 0.45 units.
Conclusively, in
order to eradicate poverty is therefore necessary that
high and sustained growth that generates productive jobs and brings benefits
across society are made possible. This has historically included boosting
productivity within existing sectors as well as rebalancing economies towards
more productive sectors (e.g. from agriculture to manufacturing). Such
structural change or economic transformation has lifted millions from poverty.
Economic transformation can have a strong disturbing effect on political
governance giving rise, that is, by interesting groups that push for
accountable leaders and effective institutions. More effective institutions
also become more affordable as countries get richer. Over time, economic
transformation can therefore advance core governance objectives.
1.2
Statement of the Problem
Nigeria is a nation
that is obviously in need of development like most other nations of the world.
The dream of development for the improvement in the living standard of the
people seems to be fading away. This could be ascribed to the inability of the
various governments in the past to effectively utilize the available scarce
resources to accomplish the desired goals of development in the society. When
political institutions have considerable discretionary powers in the allocation
or redistribution of resources relative to market institutions, unduly
considerable efforts are expended on capturing political power. The dissipation
of financial, physical and intellectual energies in capturing governance of the
state leaves very little for creating appropriate conditions for cultivating a
developmental state. Many of the high costs of governance are mainly due to the
lack of institutional structures that divert attention away from rapacity to
production. When the primary function of a state is essentially redistributive
or predatory, then productive activities become less significant as a driving
force of economic activities.
Economic activities of Nigeria
has been unstable over the years and this has prompted Nigerians to express
their opinions on the issue without positive
indications that those charged with the responsibilities of ensuring an
effective and efficient management of the cost of governance are prepared to
have a change in the mode of operations. This prompted the researcher to work
on the topic; cost of governance and economic growth in Nigeria.
1.3
Research Questions
The following are
some of the questions which this study intends to answer:
i)
what are the factors responsible for cost of governance and
economic growth in Nigeria?
ii)
what are the reasons for high cost of governance in Nigeria?
iii)
what are the effects of high cost of governance on economic
growth of Nigeria?
1.4 Objectives
of the Study
The main aim of this research was to
investigate the cost of governance on economic growth in Nigeria. The specific
objectives were:
i)
to evaluate the factors responsible for cost of governance
and economic growth in Nigeria
ii)
to determine the reasons for high cost of governance in
Nigeria
iii)
to assess out the effects of high cost of governance on economic
growth of Nigeria
1.5 Significance
of the Study
Previous studies on cost of governance
in Nigeria focused primarily on supplementary appropriation or extra-budgetary
expenditure as a way of understanding the strategies used by governments both
at the federal, state and local levels to increase high cost of governance in
their favour. This study will benefit the government by opening their eyes more
on the rate of unemployment, level of corruption and the persistent problem of
violence and crime in the country, including how these have affected the
development and quality of life of the people. This will also benefit the
masses by showing them the damaging effects that high of cost governance have
on the economic growth of our dear nation.
1.6 Scope of the Study
The study investigated cost of
governance on economic growth in Nigeria and therefore only limited to the
government officials and some scholars in the areas of economics, social
sciences, accounting, public administration and business administration. This
was because those are the sets of people that the researcher perceived to
really understand the topic.
1.7 Limitation
of the study
The researcher was faced with some
constraints to get the job done. Among them are time; the time was not enough
for the researcher to get the job done on time this was because the researcher
was still involving in the academic activities in the school. Access to the
desired respondents was another factor that contributed to the delay of this
study as some respondents were busy in their own work and gave the researcher
only limited to respond to the questions. Finance was the major factor that the
researcher encountered because, the questionnaires printed out by researcher
were not enough and the researcher had to suspend the work till the funds were
available.
1.8 Definitions
of Terms
The following terms were used in the course of this
study:
Cost of governance: This is the money spent on
administrative processes. It is also known as administrative expenditure.
Economic growth: This is
the increase in the inflation-adjusted market value of the goods and services
produced by an economy over time
Gross Domestic Product: This is
a monetary measure of the market value of all final goods and services produced
in a period of year.
REFERENCES
Adewole
& Osabuohien, (2007). Analysis of the Cost of Governance and Options for
its
Reduction in Nigeria. Nigerian Journal of Economic and Social
Studies, 49(1):137 159
Duncan
Green, (2015). What is the Relationship Between Governance and Economic Growth?
Emmanuel Oladesu, (2012). Reducing Cost of Governance. Retrieved on the 22nd of July,
2017, from http://www.nairaland.com
Francis
O. Iyoha, Daniel E. Gberevbie, Charles T. Iruonagbe, Matthew E. Egharevba,
(2015).
Cost of Governance in Nigeria: In Whose
Interest? International Journal of
Social, Education, Economics and Management Engineering Vol: 9 No:1
Stephen
Ejuvbekpokpo, (2012). Cost of Governance on Economic Development in Nigeria.
Global Journal of Management and
Business Research.