…Concerns as MDAs’ personnel cost rises by N480bn
BY VICTORIA ONU, ABUJA
Despite the implementation of the Integrated Personnel Payroll Information System by the Federal Government, the wage bill in Ministries, Departments and Agencies of the Federal Goverment has been projected to hit N4.22trn in the 2022 fiscal period.
The N4.22trn being projected for payment of salaries to Federal Government workers is contained in the Medium Term Expenditure Framework/Fiscal Strategy Paper for 2022-2024.
The preparation of the budget estimates for Ministries, Departments and Agencies usually takes into consideration the Medium Term Policies/Strategies contained in the Expenditure Framework and Fiscal Strategy Paper, which is the Federal Government’s pre-budget statement.
The MTEF/FSP outlines the development priorities of the Federal Government for the period covered.
The N4.22trn represents an increase of N480bn when compared to the N3.74trn, which was approved for this year in the 2021 Budget.
This is despite the implementation of the IPPIS initiative, which is aimed at reducing personnel costs by eradicating the issue of ghost workers.
The 2022 budget proposal, according to findings, is expected to be submitted to the National Assembly before the end of September this year.
President Muhammadu Buhari had, last year, directed the Minister of Finance, Budget and National Planning, Zainab Ahmed, to ensure that all employees of the Federal Government are enrolled on the IPPIS platform.
The IPPIS scheme, which started in April 2007, is one of the Federal Government’s reform initiative designed to achieve a centralised payroll system of the Federal Government.
It facilitates easy storage and retrieval of personnel records for administrative and pensions processing to aid manpower planning and budgeting as well as to comply with global best practice.
Through the implementation of the IPPIS, over N273.8bn had been saved by the Federal Government.
With over 700 MDAs currently enrolled on the IPPIS platform, analysts have said the impact of the initiative would have been reflective in the budget through a decrease in the amount that is being spent on the wage bill of Government.
Despite the IPPIS implementation, analysis by The Point showed that, over the years, personnel and pension costs account for the largest single item of expenditure in the Federal Government’s budget, rising steadily in recent times, from N1.88trn in 2016, to N2.06trn in 2017, and N2.56trn in 2019.
In the 2017 Federal Government budget, personnel costs accounted for about 77 per cent of total revenues as against 64 per cent in 2016.
In the 2019 budget, personnel costs amounted to 63 per cent of total revenues of goverment.
Similarly, personnel emoluments accounted for about 37 per cent of total Federal Government expenditure between 2015 and 2017, and 31 per cent in 2019.
To realise the goal of controlling personnel costs, the Federal Government had said it was introducing measures such as a temporary freeze on non-critical recruitment outside of the Security and Healthcare sectors.
To further improve fiscal transparency, Government, according to its Fiscal Strategy Paper, said it remained committed to improving the efficiency and quality of its spending.
While admitting that the high wage bill poses a major challenge to government finance, the Federal Government had, in its Fiscal Strategy Paper, stated, “An important fiscal strategy to keep public expenditures at sustainable levels in the medium term is to rationalise the Government wage bill.
“The aim is to gradually clean the Government payroll. Towards this end, efforts will be intensified to complete the extension of the Integrated Payroll and Personnel Information System to all MDAs to improve the effectiveness and efficiency of payroll administration.
“In addition, all modules of the Integrated Personnel and Payroll Information System will be fully implemented across all agencies of government.”
Speaking on the cost of governance, the Centre for Social Justice called on President Muhammadu Buhari to reduce the number of his cabinet members to 15 in order to reduce the cost of governance.
The Lead Director, CSJ, Eze Onyekpere, said the reduction should be done as the Government planned to implement the Stephen Oronsaye committee report.
He said, “There is a need for strong political will on the part of the President and the composition of a knowledgeable team to review the report and white paper of the Orasanye committee report in the light of changes and new circumstances that may have emerged since 2014.
“There is also a need to reduce the size of the Federal cabinet through amendment of the Constitution to ensure that federal ministers do not exceed 15 in number and also limit the number of assistants and advisers to the President to a reasonable number.”
Onyekpere urged the government to reduce the number of members on each of the governing boards or councils of all agencies, parastatals and commissions to not more than seven.
He said the membership and composition of boards and commissions should be based on merit and competence.
He also said a single seven-member board should be appointed to serve and oversee all the River Basin Development Authorities as against the current practice of one board per River Basin Development Authority.
