Introduction
Nigeria, Africa’s most populous nation, stands at a crossroads. While blessed with vast human and natural resources, it struggles under the crushing weight of a bloated governance structure and an ever-ballooning public debt. The high cost of governance in Nigeria not only depletes national resources but also stalls critical development sectors such as education, healthcare, and infrastructure.
According to the Debt Management Office (DMO), Nigeria’s total public debt stood at over ₦97 trillion as of early 2025. Meanwhile, recurrent expenditure, including salaries, allowances, and bureaucratic maintenance, consumes over 70% of the national budget. If urgent and practical steps are not taken, the nation risks economic stagnation, social unrest, and generational poverty.
In this article, we explore how Nigeria can quickly and realistically eliminate these twin threats. We will present evidence-based policy suggestions, relatable stories, and a roadmap for sustainable economic reform.
The Problem with the Cost of Governance
Bureaucratic Bloat
Nigeria operates a federal system with 36 states and 774 local governments, many of which are financially unviable. Each layer comes with a full complement of executives, legislators, advisers, and aides — all drawing salaries and allowances from the public purse. A 2012 study by the World Bank noted that Nigeria had one of the most expensive governance structures in the world relative to its GDP.
Legislative Excesses
One of the most glaring examples of high governance cost is the National Assembly. Nigerian lawmakers are among the highest paid globally, earning up to ₦30 million ($20,000) monthly in salaries and allowances — a staggering amount in a country where over 60% live below the poverty line.
Story: The Lawmaker with 20 Aides
In 2022, it was revealed that a senator from the North-West had appointed over 20 aides — many of whom were relatives. Each aide was placed on a monthly salary ranging from ₦100,000 to ₦250,000. This revelation sparked outrage on social media but led to no institutional reforms.
Understanding Nigeria’s Public Debt Burden
Nigeria’s debt profile has soared dramatically in the past decade. From ₦12 trillion in 2015, the figure has grown more than eightfold. While some argue that debt can finance growth, Nigeria’s debt servicing-to-revenue ratio has become dangerously unsustainable, now exceeding 90%.
Sources of the Debt
- Domestic borrowing from commercial banks and the Central Bank of Nigeria (CBN).
- Foreign loans from institutions like the IMF, World Bank, and China Exim Bank.
- Project loans often mismanaged or poorly implemented.
Story: The Abandoned Airport Project
In 2017, Nigeria took a $500 million loan from China to construct the “Super Airport” in a northern state. Eight years later, the project is 40% complete, plagued by mismanagement and corruption. Meanwhile, interest on the loan continues to accrue, burdening future generations.
Practical Steps to Eliminate High Cost of Governance and Public Debt
1. Reduce the Size of Government
a. Merge MDAs
Nigeria has over 800 Ministries, Departments, and Agencies (MDAs). Many perform overlapping functions. Merging or scrapping redundant agencies, as recommended by the Oronsaye Report (2012), could save over ₦1 trillion annually.
“Implementing the Oronsaye Report fully could reduce governance costs by at least 30%.” — Centre for Social Justice, 2024.
b. Prune Political Appointments
There’s no justifiable reason why a single minister should have over 10 special assistants. Nigeria should legislate a maximum limit on political appointments and publish their salaries for public scrutiny.
2. Legislative Reforms
a. Unicameral Legislature
Nigeria should consider scrapping the Senate and running a unicameral National Assembly, as done in countries like Sweden and New Zealand. This could cut the legislative budget by 50%.
b. Salary Review
Lawmakers’ remuneration must be benchmarked against national income levels. Also, constituency allowances should be tied to verifiable community projects.
Story: From Mansion to Studio Apartment
In 2023, a young lawmaker from Enugu State voluntarily slashed his salary by 80%, opting to live in a modest apartment and channel the saved funds into local education grants. He gained massive grassroots support and national acclaim.
3. Debt Transparency and Accountability
a. Public Audit of All Loans
Every public loan must be tied to a clear project with timelines, KPIs, and public oversight. This will reduce corruption and wastage.
b. Legislative Approval for New Borrowing
New borrowing should undergo strict parliamentary scrutiny, including public hearings, to ensure loans are necessary and beneficial.
4. Digitize Government Services
Digitization can drastically reduce payroll fraud, ghost workers, and bureaucratic red tape. Ghana reportedly saved $200 million in a year by automating public payroll.
Story: Ghost Workers Wiped Out in Kaduna
In 2021, Kaduna State used biometric verification to eliminate over 5,000 ghost workers, saving over ₦1.3 billion annually. Similar nationwide adoption could save billions.
5. Privatize and Commercialize Non-Essential Government Assets
The government still owns and funds numerous non-performing assets. Privatization or commercialization can reduce costs and increase efficiency.
a. Refineries and Transport
Refineries and national transport companies that incur regular losses should be offloaded or leased to competent private operators.
6. Revamp Revenue Generation
a. Expand the Tax Base
With over 65 million informal workers, Nigeria’s tax system remains underutilized. By formalizing small businesses and improving compliance, revenue can increase without new taxes.
b. Plug Revenue Leakages
Agencies like the NNPC and Customs must undergo regular audits to reduce leakages. In 2023, a leaked report revealed how Customs officials diverted ₦120 billion in one year through manipulated records.
7. Constitutional and Federal Restructuring
Many states depend almost entirely on federal allocation. By restructuring Nigeria’s federal system to allow states to generate and control more of their revenue, dependence on federal funding (and borrowing) will reduce.
Story: Lagos Leads the Way
Lagos State, thanks to its autonomy in generating internal revenue, now funds over 75% of its budget independently. Other states can replicate this through agricultural industrialization, mining, and tourism.
8. Institutionalize Fiscal Discipline
a. Medium-Term Expenditure Framework (MTEF)
Strict adherence to MTEF can ensure that budgeting is realistic and within sustainable limits.
b. Performance-Based Budgeting
Agencies should only receive funds based on performance metrics — a proven strategy used by Malaysia and Singapore.
9. Public Engagement and Citizen Oversight
An informed public can hold the government accountable. Platforms like BudgIT and Tracka have shown how civic tech can empower Nigerians to track budget implementation.
Story: The Village That Got Its Road
In 2022, residents of a village in Nasarawa used BudgIT to track a ₦120 million road project. When contractors failed to deliver, the community reported the case and had the project completed on schedule after public pressure.
The Role of International Partners
Development partners and lenders must also take responsibility. Loans should only be granted based on transparency and public participation. Institutions like the IMF and World Bank should link funding to governance reform indicators.
Deconstructing Political Patronage and Its Cost to Nigeria
One of the most crippling aspects of the high cost of governance in Nigeria is political patronage. Appointments are often made based on loyalty, ethnicity, or nepotism rather than merit, leading to inefficiency and waste.
Patronage in Practice: A Political Burden
A classic example came to light in 2020 when a newly elected governor in a northern state appointed over 200 special advisers and assistants. Many of them had no clear job descriptions or measurable impact. Each appointee received monthly stipends and benefits, contributing to a bloated wage bill while the state struggled to pay its teachers.
10. Implement Strict Asset and Lifestyle Audits
To curb excesses, Nigeria needs robust mechanisms to monitor the wealth and lifestyle of public officials.
a. Use Technology to Track Assets
Digitizing asset declarations and allowing public access to these records can foster transparency and accountability. Tools like blockchain can ensure data integrity and tamper-proof declarations.
b. Strengthen the Code of Conduct Bureau
The Bureau should be adequately funded and empowered to act swiftly against discrepancies between declared and observed lifestyles.
Story: A Minister’s Fleet of Supercars
In 2023, social media users exposed a minister with a luxury car fleet worth over ₦1 billion. Though the vehicles were not declared in his public asset forms, the Code of Conduct Bureau could not prosecute due to “insufficient powers.”
11. Judicial Reforms to Fight Corruption Efficiently
Corruption cases involving public funds often drag on for years, reducing deterrence and increasing public apathy.
a. Special Anti-Corruption Courts
Establishing fast-track courts focused solely on corruption and financial crimes will speed up adjudication and help recover stolen funds.
b. Incentivize Whistleblowing
Revive and fund the whistleblower policy, which led to the recovery of billions in 2016–2017. Rewarding individuals who expose misuse of public resources encourages civic responsibility.
12. Adopt Zero-Based Budgeting (ZBB)
Zero-Based Budgeting requires every item to be justified for each new period, unlike incremental budgeting that carries forward previous expenditures.
a. Align Spending with National Priorities
ZBB allows governments to cut unnecessary spending and focus on critical sectors such as education, healthcare, and security.
b. Example from Rwanda
Rwanda adopted a variation of ZBB and succeeded in reducing budget waste by 15% between 2016 and 2020. Nigeria can learn from such policy innovation.
13. Cap Cost of Governance by Law
A constitutional or statutory cap on the cost of governance as a percentage of the national budget can create discipline.
a. Enshrine Fiscal Responsibility
A national policy can be enacted mandating that not more than 40% of annual expenditure be allocated to recurrent costs (excluding debt servicing).
b. Benchmark Against Global Best Practices
Countries like Chile, South Korea, and Malaysia maintain lean government operations relative to GDP. Nigeria should study their governance models and adapt accordingly.
14. Civic Education and Reorientation
The battle against governance waste and public debt is not only legal or administrative — it is cultural.
a. Redefining Leadership
Society must stop rewarding opulence and extravagance in public office. A public reorientation campaign focusing on service, sacrifice, and integrity is essential.
Story: Governor Who Walked to Work
In 2019, a state governor in a West African country shocked many when he began walking short distances to work, interacting with citizens. He refused to use sirens or convoys. His state recorded a 25% reduction in operating costs over two years.
15. Rein in the Cost of Political Campaigns
The cost of getting elected in Nigeria is astronomically high, pushing politicians into a cycle of indebtedness and corruption.
a. Enforce Campaign Financing Laws
INEC and EFCC must collaborate to track and penalize parties and candidates who overspend.
b. Encourage Political Alternatives
Empowering youth-led, reform-oriented parties that do not rely on big money politics can reduce the systemic culture of financial excess.
16. Local Government Autonomy and Efficiency
Local governments are closest to the people but are often used as cash cows by state governments.
a. Financial Autonomy
Allocating funds directly to local governments and auditing their use can curb embezzlement.
b. Empowered Citizen Councils
Local development committees made up of residents can track and report budget implementation.
Story: Transparent LG in Ekiti
A local government in Ekiti State started holding monthly town hall meetings to account for its budget. This transparency improved project completion rates and reduced misappropriation.
17. Leverage Regional Cooperation
Nigeria can learn from and collaborate with neighboring countries like Ghana, Botswana, and Rwanda, which have made significant progress in reducing governance costs and debt reliance.
18. Reduce Cost of Public Procurement
Public procurement remains a key area of financial leakages.
a. Open Contracting
Public procurement data should be digitized and made available online in real-time, following the Open Contracting Data Standard (OCDS).
b. Use of E-Procurement Platforms
States like Kaduna and Edo have piloted e-procurement platforms that saved millions by curbing inflated contract prices.
19. Debt-for-Development Swap
Where feasible, Nigeria can negotiate with creditors for debt forgiveness or swaps in exchange for investments in critical sectors like education, health, and green energy.
Example: Indonesia’s Debt-for-Nature Swap
Indonesia used a similar strategy in the early 2000s to reduce debt and protect its forests. Nigeria can negotiate swaps to invest in its renewable energy potential and improve social indicators.
20. Revise the National Reward System
Honors and awards should not be given to public servants merely for longevity or political loyalty but for demonstrable fiscal prudence and transparency.
Final Thoughts: A Vision for the Future
A Nigeria that eliminates the high cost of governance and tames its debt monster will be a country re-energized for greatness. It will be a nation where schools function, roads are built, healthcare thrives, and youths find hope.
But all this begins with political courage, citizen activism, and institutional reform. The journey may be difficult, but the destination — a prosperous, equitable, and sustainable Nigeria — is worth every effort.
Conclusion: A Nation at the Brink, or a Nation at the Rise?
Nigeria is not broke; it is poorly managed. Eliminating the high cost of governance and the public debt burden is not only possible, but necessary for survival. With the right political will, Nigeria can liberate billions of naira for roads, schools, hospitals, and job creation.
The road to fiscal sustainability is not paved with slogans but with practical reforms. The stories shared — from ghost workers eliminated in Kaduna to the lawmaker living like the people he represents — show that change is possible.
What Nigeria needs now is not another white paper or summit, but action.
References
- Debt Management Office (DMO), Nigeria: “Nigeria’s Total Public Debt as at December 2024” – https://www.dmo.gov.ng
- Oronsaye Report (2012): Presidential Committee on the Rationalization and Restructuring of Federal Government Parastatals
- World Bank Reports on Governance – https://www.worldbank.org
- BudgIT Nigeria – https://www.yourbudgit.com
- National Bureau of Statistics (NBS), Nigeria
- Centre for Social Justice (2024), Abuja
- IMF Nigeria Country Reports – https://www.imf.org/en/Countries/NGA
- IMF Nigeria Reports: https://www.imf.org/en/Countries/NGA
- World Bank Governance Index: https://www.worldbank.org/en/topic/governance
- Open Contracting Partnership: https://www.open-contracting.org