The FY 2016 expenditure budget is a study in misplaced priorities and lost opportunities. The recurrent budget for the entire country is a little over $500 million. As I have stated before, that is a very small sum indeed. $500 million to cater to the needs of 3.5 million people? Me and a dozen of my colleagues were allocated that sum of money 20 years ago to run a newspaper in Dallas, Texas with 2,500 employees. In other words, on a per capita basis we had $200,000 to spend compared to just $140 for the Government of Liberia. When you place it in that context, it concentrates the mind.
When you have such a small amount of money to go around, focus is absolutely essential in order to have impact. And that is what is lacking in our governance. There are simply too many ministries, agencies, commissions, administrative units. When I went through the budget I counted 108 budgetary units. With a $500 million budget, that boils down to an average of just $5 million per unit. You cannot do much with that.
So, one of the things that has to happen, probably not during this administration but certainly in the next one, is a careful review of the mission and efficacy of every unit that gets budgetary appropriation. What is the mission of this unit? Do its functions overlap with those of another ministry/agency/ commission? Should one be dissolved and its functions absorbed by another?
Let’s look at a practical example. Why do we still have a Ministry of information (a more apt name for it might be the Ministry of Misinformation or the Ministry of Presidential Propaganda)? Every ministry now has a public affairs office. The President has a press secretary. So, what is the Ministry of Information doing that these other agencies are not?
We have multiple security agencies: Ministry of National Security, National Security Agency, Drug Enforcement Agency, Anti-Money Laundering Agency, etc. Are all of these really necessary? Each agency has to have a minister/director and the full complement of deputies and assistants, plus staff. Can some of them not be merged to save overhead expenses?
This lack of focus is highlighted when we delve into the guts of the recurrent budget. Half (50%) of the budget goes on salaries and benefits. Because such a large proportion of the budget goes on compensation, there is insufficient money left over for work to be done. I think it is fair to say that the only justification for a ministry or agency to exist is that it is providing a service to us, the taxpayers. If all a ministry or agency has money for is to pay salaries, then that ministry or agency should not exist. It is not providing any value to the taxpayer.
And there are many agencies for which the above is true. Their budget consists of salaries and very little else because after the appropriation process is done, there is nothing left to give them for them to do meaningful work.
The government cannot do everything. It cannot be all things to all men. Choices have to be made. Decisions have to be made as to what government can and should do. Conversely, decisions have to be made as to what government should not be doing.
My take is that government should be in the business of education, healthcare, rule of law, certain aspects of agriculture and infrastructure. The government should not be involved in business because the nature of government (slow, bureaucratic) is not suited to business (which requires swift decision-making, ability to change course quickly). That means we should be shedding most of our public corporations. The government should also leave big ticket infrastructure expenditure to the private sector because it simply does not have the resources to undertake the kind of expenditure that is necessary to get the job done. I am thinking of airports, sea ports, electricity, water and sanitation, some roads (which can be farmed out to the private sector and tolled).
I was in England in the mid 1970s when the country, weighed down by a multitude of loss-making state-owned enterprises, was moving inexorably towards Third World status. Margaret Thatcher came on the scene, bust up the overly powerful unions, sold off or shuttered many of the state-owned enterprises and saved England. We need a Maggie Thatcher here.
Next week, we will take a final look at the expenditure budget to see how it measures up to the priorities that I listed above.
The writer is a certified public accountant and a businessman. He can be reached at [email protected]