• The Complete Research Material is averagely 47 pages long and it is in Ms Word Format, it has 1-5 Chapters.
  • Major Attributes are Abstract, All Chapters, Figures, Appendix, References.
  • Study Level: BTech, BSc, BEng, BA, HND, ND or NCE.
  • Full Access Fee: ₦6,000

Get the complete project » Instant Download Active



1.1 Background of Study

Anambra State Governor, Peter Obi, and the Bishop of Anglican Diocese of Lagos Mainland, Rt. Rev. Adebayo Akinde, have decried the huge cost of governance in the country. They spoke at the Third Session of the Second Synod of the church in Lagos recently. Obi said there was a need for government at all levels to reduce the cost of governance and redirect the funds to socio-economic development. Obi posited that, We can not continue to spend our scarce resources to finance unnecessary consumption and pile up huge national debts. We must increase savings and generate resources to provide public amenities. Obi then advised the Federal Government to complete the deregulation and unbundling of the power sector and find a lasting solution to the electricity problem. Akinde on the other hand said the cost of governance in the country was high and had left little resources for infrastructural development. He said, “The cost of governance in Nigeria is disproportionately high relative to productivity. We have a long list of ministers, special advisers, and special assistants with high remuneration(Famutimi,2012:8).” Akinde called on governments to demonstrate the political will to cut down overhead costs, tackle terrorism and fix the power sector.

When the Governor of Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi pointed out this aberration to the National Assembly, he was criticised and almost run out of the place, but we all know it is true. The President, Governors, local government chairmen, ministers and even commissioners in the states with their retinue of aides, not to talk about members of the National Assembly and the State Assemblies and their several aides, are sucking this country dry. The Kwara State governor has over 500 aides who all draw salaries from the coffers of that state, while another governor in the South-south has a whopping 900 and something aides. Note that none of them earns less than N50,000 a month. These are all aside the security votes and sundry expenses run by the state and Federal Government. The cost of running Nigeria is one problem policy makers have refused to address. Those who have done so did it half-heartedly and the country is gradually grinding to a halt. Many do not see it but we do. If only we could address this, Nigeria would be saving billions of naira that could be pumped into other productive ventures. A governor with close to a thousand aides cannot honestly tell us his state problems will be solved in his four-year term because that states resources are being used in the course of governance instead of providing the much-needed infrastructure to jump-start the economy. We agree that some of these aides are useful to the running of governance but the sheer number of them is a great cause for concern. It boggles the mind. If a member of the National Assembly earns more than what the American President takes home, then we know things are not right. If one thinks about the number of ministers and how many aides each of them has, then we will surely know that out problems will never be solved until we address the issue. If we think of how many states votes as much as a hundred million naira monthly for security, money which is usually not accounted for, then we will know what Nigeria problem is. So much is being wasted on unproductive ventures that we fear the country may collapse under the weight of this burden. It is time to take another look at the issue of the salaries and allowances of the people that govern us. We believe democracy can work, just like it is working in other climes but how many countries spend so much on governance to the detriment of other things? Democracy in other climes is not a full time job like it is in Nigeria. We have to address the issue of paying so much to so many and achieving so little. After so many years of waste with so little on ground, we need to take another look at a constitution which allows so much money and allowances to be paid to those that begged to serve. It is not too late to address this anomaly. The siren-blaring idle people have had enough and the National Assembly should move in to arrest the situation. 

The state governments in the North-East and North-West geopolitical zones were the most expensive states in Nigeria in 2011 when measured in terms of personnel and overhead costs data complied by Business Day Research and intelligence Unit (BRIU) have revealed.

The data was complied from the Central Bank of Nigeria’s Annual Report 2011. Based on combined regional personnel and overhead costs, the six states in the North-East zone, comprising Adamawa, Bauchi Borno, Gombe, Taraba and Yobe spent N182 billion out of N360.6 billion realized as revenue for the year 2011, which means that 51 percent of the revenue made by the zone ended up a personnel and overhead costs. 

Also, the North-West geopolitical zone, which is made up of Jigawa, Kaduna, Kano, Katsina, Kebbi, Sokoto and Zamfara expended 44.8 percent as cost, which translated to N217 billon out of N485 billion total yearly revenue realized by state governments in the region. The North-Central was third with 41.4 percent of its 2011 receipts or N196 billion, incurred as the cost of governance. Cost of governance is the money spent on salaries and administrative expenses. 

The South-West, South-East and South-South ranked 4th, 5th and 6th with 37.3 percent, 27.5 percent and revenues for 2011 ending up as the N230 billion, N89 billion and N251 billion respectively were the combined expenses incurred by state governments in the three geopolitical zones in the south. 

On state by state analysis, the combined personnel and overhead cost of Kano State was the highest in the country, translating to 75 percent N72.4 billion) of its 2011 total annual receipts, being used in paying personnel and overhead costs. The state was left with N24.6 billion for developmental projects. Kano was closely tralled by Bauchi (70%) and Plateau (68%) in that order, which amounted to N45.4 billion and N42.8 billion respectively of the total money received by the aforementioned state governments being spent on administrative costs. In the South-West region, Oyo State (63%) and Ogun State (57%) were the most expensive state was the least expensive (9%) among the states analysed. 

It the level of expenses and internally generated revenue (IGR) only two states in Nigeria would comfortably pay their personnel to rely on the monthly federal allocation. These are Lagos and Abia States. In 2011, Lagos State realized N147 billion as IGR, whereas its combined personnel and overhead costs amounted to N70 billion, while Abia State made N31 billion as IGR whereas its combined personnel and administrative cost was N26 billion. 

At the Annual Capital Market Committee retreat in Warri, Delta State recently, the governor of Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi called for a reduction in the cost of governance. He said “at the moment, 70 percent of the Federal Government’s revenue goes for payment of salaries and entitlement of civil servants, leaving 30 percent for development of 167 million Nigerians. That means that for every naira government earns, 70 kobo is consumed by civil servants”

Another research report supports the observation made by the CBN governor about the high cost of governance. According to the research work of Stephen Ejuvbekpokpo published in the Global Journal of Management and Business Research in 2012 entitled “Cost of governance on economic development in Nigeria,” he found that “a unit rise in recurrent administrative expenditure would lead to a 0.52 unit fall in gross domestic product (GDP). Conversely, he found that a unit rise in capital administrative expenditure would cause grass domestic product to fall by 0.45 units”. Put in another way, if recurrent administrative expenditure rises by 100 percent, GDP will fill fall by 52 percent, just as if the capital administration expenditure surges by 100 percent, GDP will fall by 45 percent. 

1.2 Statement of Problem

The cost managing the economy formed part of the speech given by the Chairman of NESG, Foluso Phillips. He told participants at the recent NES 18 that the cost of managing the Nigerian Economy at present is larger than its productive base.

“We cannot defend an unsustainable situation. We cannot sustain this model. We all have to fix this problem faster than we are currently addressing it,”(Nwachukwu,2012:1).

Philips, who was addressing dignitaries at the Nigeria Economic Summit (NES 18) at the Transcorp Hilton Hotel, Abuja told the gathering that the current reality surrounding the cost of managing the country presents a situation where the three million or so people who work for the federal, states’ and local government, not forgetting the legislature, consume about 70 percent of the annual budget on salaries, allowances and overheads, while the rest of the 160 million odd Nigerians depend on the balance of 30 percent to provide the infrastructure, education, health and other services which most governments have a responsibility for.

1.3 Research Objectives

1. To find out the economic implication of cost of governance in Nigeria.

2.  To examine the cost of governance under Goodluck Jonathan regime.

3.  To determine the internal generated revenue of each states in Nigeria.

1.4 Research Questions

1. What is the economic implication of cost of governance in Nigeria?

2.  What is the cost of governance under formal President Goodluck Jonathan?

3.  What is the internal generated revenue of each states in Nigeria?

1.5 Significance of the study

The study will serve as a veritable source of information to the public on the heavy cost of administration incurred by the Nigeria government in running the economy. The study will also provide information on possible solution to reducing the cost of operation and how unnecessary expenses can be avoided.

1.6 Scope of the Study

The study will be focused on the administrative structure of the federal republic of Nigeria and a break down of internal generated revenue from each state in Nigeria including the countries capital city, FCT, Abuja.

The study will also make reference to the cost of administration under Goodluck Jonathan regime.

You either get what you want or your money back. T&C Apply

You can find more project topics easily, just search

Quick Project Topic Search