THE Federal Government of Nigeria has budgeted approximately N8 trillion for 36 ministries’ personnel costs amid rising governance costs and calls to merge some of the ministries, departments and agencies (MDAs) for proper efficiency.

Personnel costs are made up of wages and salaries and the employer’s social security cost. They are one of the most important components of any budget planning.

The ICIR analysis of the proposed 2025 budget presented by President Bola Tinubu to the National Assembly has allocated N7.943,644,476,825 for 36 ministries’ recurrent expenditure, otherwise known as personnel costs, and N5,689,651,758,186 for capital expenditure, amounting to N13,633,296,235,011 appropriation.

While the Ministry of Defence has the highest allocation of N2,341,367,693,324 on personnel costs, the Federal Ministry of Works has the highest on capital expenditure with N926,164,472,063 allocation. See the table for allocation to other ministries.

According to the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), an agency of government saddled with the responsibility to ensure conformity and equity in revenue allocation formulae, many MDAs have similar and overlapping functions and responsibilities.

It had decried the need for the government to merge some agencies to avoid duplication of responsibilities and thus curtail wastage, warning that personnel cost should be strictly monitored to ensure all MDAs are captured on the Integrated Payroll and Personnel Information System (IPPIS) platform.

It had even called for a deliberate effort by the Executive, Legislative and Judiciary to pursue and implement cost-reduction policies.

But in a recent conversation with the media, President Bola Tinubu said has no intention to reduce the number of his ministers or cut down the size of his cabinet.

The President urged that the Nigerian population of over 200 million people requires a substantial number of officials to manage its affairs.

However, stakeholders have continued to be critical of the over-bloated cabinet size and overlapping functions of the MDAs.

In a report tagged, ‘Options for Economic Reform and Consequences for The Medium-Term Expenditure Framework for 2025-2027,’ the president of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) Dele Oye, said there is need for the government to undertake a rigorous review of its budget to identify and eliminate wasteful spending.

He advised that efficient allocation of existing resources could help reduce government excessive borrowings.

“Countries like Argentina have made political choices to eliminate recurrent budget deficits. The Nigerian budget for elected and unelected politicians can be adjusted. The size and number of government-funded agencies can be reduced, and taxes should be further reduced, which will attract greater private sector investment,” he stated.

President Tinubu appointed 48 ministers in August 2023 three months after his inauguration and in October 2024, re-shuffled his cabinet by re-assigning 10 ministers to new portfolios and appointing seven new ministers.

Although Tinubu sacked five of his ministers, however, critics believe that the cabinet remained large, especially with the creation of a Livestock Ministry from the Federal Ministry of Agriculture and Food Security.

Despite calls to cut down the ministries, Tinubu had insisted he was more concerned about the efficiency of his team than reducing its numbers.

He had further insisted that the implementation of the Oronsaye’s report would not be as immediate as the government had promised.

The ICIR reported that  Oronsanye’s report, submitted in 2012 to the federal government by former head of service, Stephen Oronsaye, seeks to enforce fiscal discipline in the federal government’s institutions by merging ministries, agencies and departments with similar mandates while also downsizing others where necessary.

The report has been a subject of discussion over the years. It recommends the reduction of government agencies to streamline operations and reduce the cost of governance.

If implemented, the about 263 statutory agencies of the government as of 2012 could be reduced to 161.