A Punch news report says the Chairman of the Senate Committee on Finance, Senator Olamilekan Adeola, said on Wednesday that over 400 out of 541 Federal Government Ministries, Departments and Agencies are to be eliminated as recommended by the Stephen Orosanye-led Presidential Committee on agencies’ rationalisation. According to the report, Senator Olamilekan made the declaration on the second day of the ongoing interface between the committee and heads of MDAs on revenue drive for the implementation of the proposed N19.76trillion 2023 budget. The Orosanye panel recommended the retention of 106 of the MDAs. According to him, revenue generation was the most critical factor being considered by the Federal Government before retaining 106 MDAs or scrapping 400. 

The Stephen Oronsaye’s report recommended that some MDAs be merged to eradicate the existing duplication of functions, create synergies, and consequently reduce the cost of governance. Specifically, it recommended the consolidation of the Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices & Other Related Offences Commission (ICPC) and the Code of Conduct Bureau (CCB). It also recommended the amendment of the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) to accommodate the functions of the Financial Reporting Council (FRC) as well as those of the National Salaries, Income and Wages Commission (NSIWC). The Infrastructure Concession and Regulatory Commission (ICRC) is also to be subsumed in the Bureau of Public Enterprises (BPE) while the Nigerian Investment Promotion Commission (NIPC) is to be merged with the Nigerian Export Promotion Council (NEPC). The Public Complaints Commission (PCC) is to be abolished and the Border Communities Development Agency’s (BCDA) functions are to revert to the National Boundary Commission, under which it was a department before its establishment, amongst others. 

The country’s fiscal space remains constrained. We recall that the Minister of Finance, Zainab Ahmed, had reported N1.63trn in Revenue from January to April 2022. This figure annualized, comes to N4.89trn, which is 41% less than the N6.91trn budgeted for non-debt recurrent expenditure. The revised government expenditure for 2022 was estimated at an all-time high of N17.31 trillion. Revenue projection of N9.96trn will likely underperform estimate. We forecast that the budget deficit will come in at N9.7tn, above the government’s deficit target of N7.35tn. Recurrent spending will likely overshoot target while capital spending will be lower than planned. In our view, oil revenue will significantly fall short of target, but non-oil revenue will outperform budget estimates. Based on data from the Nigeria Upstream Petroleum Regulatory Commission, the average daily crude oil production for July 2022 was 1.08mbpd and 1.2mbpd (Jan.-Jul) lower than 1.6mbpd budgeted for the 2022 fiscal year. The fiscal strain is further compounded by the drastic increase in petrol subsidy which has gulped N1.55trn in H1 2022. In the absence of any immediate solution to the low crude oil production and already stretched non-oil tax rates, embarking on aggressive cost savings becomes expedient.