The Presidential Committee on the Rationalisation and Restructuring of Federal Government Parastatals, Commissions and Agencies has recommended the reduction of MDAs by at least 200 percent.
Presenting its report to President Goodluck Jonathan, in Abuja, Mr. Stephen Oronsaye, Chairman of the Committee recommended that the existing 541 MDAs, including 263 statutory agencies be reduced to 163.
Among the agencies recommended for outright scrapping are the Federal Road Safety Commission (FRSC), the Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practice Commission (ICPC) insisting that they all perform the duties of the Nigeria Police Force and Ministry of Works.
The committee, which was inaugurated on August 18, 2011 had the following terms of reference:
i) to study and review all previous reports/records on the restructuring of Federal Government Parastatals and advise on whether they are still relevant; ii) to examine the enabling Acts of all the Federal Agencies, Parastatals and Commissions and classify them into various sectors; iii) to examine critically, the mandates of the existing Federal Agencies, Parastatals and Commissions and determine areas of overlap or duplication of functions and make appropriate recommendations to either restructure, merge or scrap to eliminate such overlaps, duplication or redundancies; and iv)to advise on any other matter(s) that is incidental to the foregoing which may be relevant to the desire of Government to prune the cost of governance.
Mr. Stephen Oronsaye, CFR
Chairman, Presidential Committee on the Rationalisation and Restructuring of Federal Government Parastatals,
Commissions and Agencies at the Submission of the Committee’s Report
Abuja, April 16, 2012
I wish to thank Mr. President for this unique opportunity and privilege to present the Report of the Presidential Committee on the
Rationalisation and Restructuring of Federal Government Parastatals,Commissions and Agencies.
The setting up of the Committee undoubtedly underscores this Administration’s commitment and determination to reduce the size of
government and the cost of governance, while upholding excellence in performance in the Federal Public Service.
Mr. President may wish to recall that at its inauguration on August 18, 2011, the Committee was mandated to complete the assignment and
submit its report within a period of eight weeks. The sheer volume,ramification and importance of the task necessitated that members
worked assiduously seven days a week for eight straight months. The product of all those long days and nights is the over 800-page report
we are presenting today. The report contains recommendations unanimously adopted by members after wading through volumes of submissions and enduring lengthy presentations, lively and frank interactions, detailed analyses and robust debates.
Your Excellency may wish to recall that the Committee was given the following terms of reference:
i) to study and review all previous reports/records on the restructuring of Federal Government Parastatals and advise on whether
they are still relevant;
ii) to examine the enabling Acts of all the Federal Agencies,Parastatals and Commissions and classify them into various sectors;
iii) to examine critically, the mandates of the existing FederalAgencies, Parastatals and Commissions and determine areas of overlap
or duplication of functions and make appropriate recommendations to either restructure, merge or scrap to eliminate such overlaps,
duplication or redundancies; and
iv) to advise on any other matter(s) that is incidental to the foregoing which may be relevant to the desire of Government to prune
the cost of governance.
It may please Mr. President to note that in addressing the above terms of reference, members not only pledged to be objective but also had the Big Picture of Nigeria in mind.The Committee reached out to all Federal Government Agencies through their respective supervising Ministries or Offices and also employed a representative random sampling technique to visit a select group of parastatals.
During the interactions with the MDAs, many of them claimed ignorance of the existence of Government White Papers on previous reports with similar focus. Where they did, the decisions were either selectively implemented or not implemented at all, thereby invitiating Government’s efforts at reducing its size.
Mr. President, indeed, 12 years after the White Paper on the Ahmed Joda Panel Report on the Review, Harmonization and Rationalization of
Federal Government Parastatals, Institutions and Agencies (2000), some parastatals and agencies, which Government had decided should either be scrapped, commercialized, privatized or self-funding, are still receiving full Government funding, which runs into billions of Naira.
One common feature of some of the previous reports is the relationship between the parastatals and their supervising Ministries/Offices. The Allison Ayida Report (1995) referred to the “Administrative Guidelines Regulating the Relationship between Parastatals and Government-owned Companies and the Government” to buttress the point that Ministers should not function as chairmen of Government-owned agencies.
Similarly, the Ahmed Joda Committee (1999) posited that the challenge of Ministerial interference and bureaucratic control needed to be
eliminated in order to restore the effectiveness and efficiency of parastatals in the delivery of service to the public.
In addition, the Joda Report alluded to the challenge of lack of managerial competence in some of the parastatals as well as the
incompetence of some Boards. The Report also noted the challenge posed by the large size of the boards of the parastatals, most of which had over 10 members. Today, the story remains the same.
The long-standing challenges that beset the Nigerian Public Sector,including the parastatals, have created a “single story” of inefficiency, corruption, poor work environment, low morale,ineffectiveness, deceit and low productivity, thereby establishing a
perception of a dysfunctional and unproductive Public Sector. The weaknesses in the “single story” have sometimes placed the Sector in a
situation where it is unable to perform its legitimate functions creditably.Today’s submission presents the nation with another opportunity to do what is right in an era where other Governments around the world are moving towards cutting waste, entrenching transparency, ensuring more prudent spending and better service delivery, all with a view to recording meaningful gains for both institutions and the citizenry.
Our Report is presented in three volumes, namely:
i) Volume I: Main Report;
ii) Volume II: Executive Summary, Critical Issues and Principles; and
iii) Volume III: Appendices
In the course of its assignment, the Committee noted duplications and overlaps in the mandates of many parastatals and agencies. As
elaborated in the Report, successive Administrations established parastatals without regard to existing laws and, in some cases,
out-rightly replicating extant laws.
May I now highlight some Institutional and Parastatal cases the Committee focused on during its deliberations.One case that stands out clearly in this regard is that of the Federal Road Safety Commission (FRSC), which should not be in existence in its present form. While acknowledging that the body has been quite active, the Committee observed that what the FRSC was set up to do is a replication of the mandates of two existing bodies namely: the Highway Department of the Federal Ministry of Works with respect to the maintenance of safety and orderliness on our highways and the role of the Nigeria Police Force in ensuring law and order on our roads.
Indeed, it is a fundamental breach of acceptable practice of good public sector governance to create a new agency or institution as a
response to the seeming failure or poor performance of an existing agency in order to suit political or individual interests. Such a
practice has proved eventually to precipitate systemic conflicts,crises and even collapse at a substantial but avoidably high financial
cost to government. The setting up of the FRSC to take over partially the functions already apportioned by law to the Federal Ministry of Works and the Nigeria Police Force as a result of seeming poor performance and/or to satisfy political and individual interests is a
typical example of misadventure in the Public Sector at a great cost to government.
Meanwhile, on the one hand, other bodies have their mandates intact as the relevant provisions of their enabling laws have not been repealed.
On the other hand, the same provisions have been imported into the FRSC Act, making it appear as if the intention of Government is to
make the FRSC have the same mandate as the bodies referred to.
Similarly, it was noted that the functions of the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt
Practices and Other Related Offences Commission (ICPC) are the traditional functions of the Nigeria Police. The Committee observed
that even though the two Commissions were established separately to address corruption, which the Police appeared to have failed to do,
successive administrations have ironically continued to appoint the Chairman of the EFCC from the Police Force, while the methodology
adopted by the ICPC in conducting investigations as well as the training of its personnel in investigation procedure are carried out
by the Police. One wonders if it was really expedient to dismember the Nigeria Police rather than allow it to evolve as a vibrant and
Mr. President, the point that must be reiterated is the fact that thatan institution is inefficient and ineffective should not be a basis
for the creation of new ones. The officers and men of the Nigeria Police Force have been reputed for performing exceptionally and
winning laurels while on international peace-keeping and other missions. This implies that the problems of our Police are not incurable.
It is thus obvious that reaction to symptoms rather than the diagnosis of the problem has contributed significantly to the proliferation of parastatals and agencies. Government should therefore focus seriously on addressing and removing factors that militate against the effective performance of parastatals.
In a related situation, the Committee also noted the case where the Nigerian Communications Satellite (NigComSat) Limited, which was
established as the commercial arm of the Nigerian Space Research Development Agency (NASRDA), with a sunset clause, has now expanded
its scope and is in rivalry with its parent body. Indeed, only recently, the Nigerian Communications Satellite Corporation Bill was
passed by the House of Representatives. Besides duplicating the satellite development functions of NASRDA, the Bill has created
further needless duplications as it veers into the statutory functions of the National Broadcasting Commission (NBC) and the Nigeria
Communications Commission (NCC) in the area of frequency allocation.
In this austere time, Nigeria cannot afford to sustain the funding of multiple space research institutes, when in fact other more
technologically advanced countries of the world, where space research is a priority, have only one. There is also the case of the Nigerian Broadcasting agencies (NTA, FRCN and VON) which the Committee believes focus more on structures rather than acquisition of broadcasting software. The world over, countries have made concerted efforts to manage the agencies responsible for their mass media communication by establishing and taking advantage of a single coordinating point. Such reforms in the media sector have been underpinned by the efficient use of resources and collaboration in order to have synergy amongst the operators.
In the Environment sector, the Committee observed that the National Oil Spill Detection and Response Agency (NOSDRA) was created to
perform a function already assigned by law to the Department of Petroleum Resources (DPR). Besides being a clear case of latter-day
overlapping functions of agencies, the continued existence of NOSDRA is tantamount to paying huge salaries to persons who do nothing but
wait for spills to occur. This is despite the fact that there is a standard operating procedure for oil companies in Nigeria to clean up
oil spill whenever it occurs.
Mr. President, another sector to which the Committee paid particular attention is Education. The Committee noted, and industry experts
agreed, that the Education Sector in Nigeria is in a state of crisis arising from inefficient utilization of resources, poor monitoring,
falling standards and poor service delivery. If the country is to stem the present trend of mass failure in certificate examinations at
the secondary school level as well as the poor quality of graduates being spewed from the nation’s tertiary institutions, there is indeed
an urgent need to address the critical factors that are exacerbating the current challenges facing the Education Sector.
The problems with the Sector are indeed traceable to the apparent neglect of the first nine years of a child’s educational experience.
These include poor leadership, lack of appropriate and adequate infrastructure and poor teacher quality. The consequential issues of
low pupil enrolment and retention of pupils in school have further aggravated the degree of decay. There is also an absence of a strong
disciplinary process of sanctions and rewards which has resulted in the decline of integrity and discipline in our educational system.
There are several cases of proved unwholesome practices by some principals of some Unity Schools; yet such principals have remained in
The Committee noted that three different agencies: the Universal Basic Education Commission (UBEC), the Nomadic Education Commission (NEC), and the National Commission for Mass Literacy, Adult and Non-Formal Education (NCMLA) all perform functions related to the provision of basic education. The question then arises as to why they continue to function as separate bodies. Our Committee is of the view that the functions of all the other agencies should be taken over by UBEC as there is no economic gain in having the three bodies as separate entities.
During discussions on the tertiary level of education, the Committee noted with great concern that the standard and quality of tertiary
education in Nigeria has declined continuously in the past 25 years.In this period, the top-ranked universities in Nigeria fell out of the top 1000 in the world. The sad reality is that according to current ranking, the highest ranked university in Nigeria – University of
Ibadan – is rated 30th in Africa.
The average cost of training an Arts student in a Nigerian university is about N450,000 and N 525,000 for a Science student, per session.
However, unlike in other climes where their universities are rated among the best in terms of reputation and academics, extant Government
tuition-free policy exempts undergraduates in Federal Universities in Nigeria from paying tuition fees. The consequence of such a policy is that Federal universities have been denied adequate funding to contribute to the delivery of quality education in terms of infrastructure and educational materials.
Our Committee believes that Government should put in place a mechanism to transform the six First Generation Universities (at Ibadan, Zaria, Lagos, Nsukka, Ife and Benin) into model institutions with each having a niche or area of comparative advantage, which is believed would once again restore the former glory of tertiary education in the country.
Other major critical issues that come out clearly in the Report include, but are not limited to the following:
i) Continuing huge increases in the annual Recurrent Costs of Ministries, Departments and Agencies as well as other Arms of
ii) Buy-in of other Arms of Government and support of the Reform;
iii) Good governance and accountability;
iv) Board membership, size and quality;
v) Budget management and administration;
vi) Management of all generated/collected revenues;
vii) Proliferation of Research Institutes;
viii) National Research Policy/National Research Development Fund;
ix) Centralization of Training fund;
x) High Personnel Cost in the Tertiary Institutions;
xi) Personnel and job audits to establish appropriate manning levels for Government parastatals, commissions and agencies;
xii) Guidelines for the establishment of parastatals; and
xiii) Strategy for the implementation of the White Paper that would emerge from this Report.
The average cost of governance in Nigeria is believed to rank among the highest in the world. For example, there are 541 Government
Parastatals, Commissions and Agencies (statutory and non-statutory). Going by the recommendations of the Committee, the figure of statutory agencies is being proposed for reduction to 161 from the current figure of 263. The Committee believes that if the cost of governance must be brought down, then both the Legislature and Judiciary must make spirited efforts at reducing their running costs as well as restructuring and rationalizing the agencies under them since the three arms make up the government.
Consequently, the Committee has proposed four ways, among others, of immediately reducing the cost of governance:
i) Reduction in the number and size of the governing boards of parastatals;
ii) Linking the budgetary system to deliverables and output;
iii) Implementation or vacation of some decisions taken on past reports; and
iv) Removal of all professional bodies/Councils from the National Budget.
Once these have been successfully accomplished, it is believed that they will lead to cost-minimization and benefit-maximization for both
the Government and the citizenry.
Again, if the Executive is to succeed in this current restructuring and rationalization exercise for a slimmer and more cost-effective
means of running government, it needs the other arms of government, particularly the Legislature, to work with it for the ultimate aim of
evolving common solutions that border on Budget matters as well as amendments or repeal of existing laws.
The solutions sought principally revolve around the following:
i) elimination of duplication in the functions of many parastatals through the repeal/amendment of some existing laws and the enactment of new ones as well as the amendment of relevant sections of the 1999 Constitution of the Federal Republic of Nigeria;
ii) reduction in Recurrent Expenditure and increase in Capital Expenditure;
iii) review of the Budget Process by adopting Zero-base Budgeting with effect from 2013, as opposed to the current Incremental Budgeting approach;
iv) conduct of management audits (including biometric capturing) to eliminate areas of waste as well as determine the appropriate manning levels for parastatals, commissions and agencies; and
v) reduction in the sizes of the governing boards of parastatals to a moderate number made up of competent, experienced, knowledgeable
persons of proven integrity. This Committee believes that seven is a moderate number.
Mr. President, the commitment of Government to effect a positive change that would engender a reduction in the size of government and
cost of governance cannot be gainsaid. However, the effective implementation of these recommendations, if accepted, would require
bold and firm decisions that will entail administrative, political, legislative as well as robust and concerted Constitutional actions.
Every rationalization and restructuring exercise has a human dimensionand cost implication. In this regard, ensuring a common understanding of the objectives and goals of a rationalization and restructuringactivity is critical in order to put in place an effective framework that will foster stakeholder buy-in. Government therefore needs to focus on empowering its Ministries, Departments and Agencies (MDAs) to do “more for less” through effective restructuring, streamlining and removal of all overlaps in their functions. This can be carried out after Government has come up with decisions on those agencies that have been recommended for abolition, merger or internal reorganization.
The Committee indeed strongly recommends that a restructured Bureau of Public Service Reform (BPSR), as proposed in this Report, be charged with the coordination and monitoring of compliance by the MDAs with the White Paper that would emerge. By so doing, the challenges of the past would be addressed and the urge to create parastatals would beput under proper check; thus, making the setting up of Committees such as ours largely unnecessary.
Expectedly, there will be resistance and reluctance by those who will always want to protect territories or seek to promote their selfish
interests. While noting that the decisions to be taken by the Administration will be difficult, we are emboldened by the principle
that if a decision is for the common good, it is best that those decisions are taken without delay.
It should be noted, however, that this report is rather silent on Federal Ministries as they are outside the Committee’s terms of
reference. What was highlighted was the need to appoint a Minister in the Presidency for Special Duties, with a budget and mandate, to
supervise certain Parastatals, Commissions and Agencies, which ordinarily should be overseen by the Presidency due to their
uniqueness. Our reason for this is simple. Through the years it has been pointed out and today it remains valid that: the Presidency
should be a policy coordinating organization and not a parastatal-supervising body. It should therefore normally have no parastatals under its supervision, except in the case of certain constitutionally established agencies.
Your Excellency, distinguished ladies and gentlemen, the contents of this Report indicate that there is still work to be done. In
particular, the restructuring of the agencies of Government can only be carried out after Government has come up with decisions on those
agencies that have been recommended for abolition, merger or internal reorganization.
On this note, Mr. President, I wish once again, on behalf of the members of the Committee, who have indefatigably toiled these past
eight months, to thank you most sincerely for the opportunity to serve our Fatherland.
Major economies across the world are embracing leaner governance structures in the face of economic realities. Nigeria, being a
regional powerhouse and a potential global force, can only keep pace with the more developed economies of the world if it takes the right
decisions and gets it right at home. This Administration has a pact with the people of Nigeria and we believe that it will not fail.
Mr. President, the Vice President, Honourable Ministers, distinguished ladies and gentlemen, it is my pleasure to present the Report of the Presidential Committee on the Restructuring and Rationalization of Federal Government Parastatals, Commissions and Agencies.
Thank you and God bless Nigeria.
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