Trimming the State to Build the Nation: The Case for MDA Rationalization

Nigeria is at a fiscal crossroads. Debt servicing consumes a growing share of revenue, and the recurrent expenditure bill leaves little for roads, power, schools, and hospitals. The question is whether the National Assembly will lead the reduction in the cost of governance or continue to preside over its growth.

A bureaucracy that only grows

The Oronsaye Report found 541 federal parastatals, commissions, and agencies. It recommended reducing the number of statutory agencies from 263 to 161, with 38 abolished, 52 merged, and 14 reverted to departments within ministries. The Federal Executive Council approved full implementation of the report on February 26, 2024.

Implementation has nonetheless stalled. AERE's Dele Oye says the number of federal agencies has risen to over 900. That is an advocacy estimate rather than an official count, and the National Assembly should ask the Executive to publish an authoritative register as part of the audit.

On cost, the original projection is firmer than the annual figure. The committee's projected savings of over ₦862 billion between 2012 and 2015 included ₦124.8 billion from agencies proposed for abolition and ₦100.6 billion from agencies proposed for merger. AERE argues that the proliferation of over 900 MDAs now imposes over ₦862 billion in costs on the economy. Whatever the precise current figure, the direction is clear: duplication is costing the nation heavily.

When regulators become revenue collectors

A second problem is quieter but just as costly. Many agencies have drifted from their regulatory mandates and become revenue-generating entities. By one account, ₦658 billion was deducted as "cost of collection" by government agencies in the first half of 2025 alone. Deductions by agencies such as FIRS, the Customs Service, and NUPRC are said to exceed the total allocations received by several states.

The incentive is perverse. An agency that keeps a percentage of what it collects is rewarded for collecting more, not for regulating well. The burden falls on the private sector through layered levies, and the Consolidated Revenue Fund is drained before the money reaches the national treasury. Some agencies even defy legislative summonses, undermining this House's oversight role.

What the National Assembly should do

1. Halt the creation of new MDAs. Before reducing the size of government, stop adding to it.
2. Fully implement the Oronsaye Report. Selective implementation has produced no results. Mergers, abolitions, and subsumptions should proceed on a defined timeline with clear accountability.
3. Conduct a 60-day forensic audit. The Committees on Public Accounts, Finance, and Legislative Compliance should jointly examine every federal MDA for overlapping mandates and statutory relevance.
4. Tie capital funding to transition plans. The Budget Office of the Federation should suspend capital allocations to any agency recommended for dissolution or merger until it submits a structural transition plan.
5. Cap "cost of collection" and enforce full remittance. The Establishment Acts of revenue-generating agencies should be reviewed to set strict limits on deductions and require 100% remittance of operating surpluses.

Addressing the legitimate concerns

Responsible reform must take the risks seriously. Job losses have been a recurring reason previous administrations halted implementation, and labour and civil society have resisted the report on those grounds. These concerns should be answered through design, not by abandoning reform.

1. Protect people, not positions. Redeploy and retrain staff of merged or abolished agencies first, with fair, promptly paid severance or retirement packages where redeployment is not possible.
2. Sequence the transition. Essential regulatory functions should move to successor bodies before any agency closes.
3. Distinguish duplication from distinct functions. The audit should protect bodies with real constitutional or regulatory purposes while removing overlap.
4. Measure the savings. Publish targets and track recurring savings relative to capital reinvestment so the public can see the dividend.

One caution for the debate: critics note that merely merging organisations under an umbrella name, while leaving bloated agencies intact, defeats the purpose of the report. The audit should test whether mergers actually reduce headcount and overhead, rather than merely renaming agencies.

The choice before the House

Rationalising MDAs, capping arbitrary deductions, and enforcing oversight are not austerity for its own sake. It directs scarce resources toward development priorities instead of self-preservation. The recommendations have been on the table since 2012, and the fiscal case is stronger than ever. What remains is the will to act.

This is a call to action to the lawmakers in the National Assembly: they should act now.

Sources and references

Oronsaye White Paper (government’s official response to the report): PolicyVault PDF | Policy page

900+ agencies and "₦862bn annually" claim (AERE / Dele Oye, July 2026): ThisDay | Prime Business Africa

₦862bn projected savings (2012–2015) and its breakdown: Arise News, Twelve Highlights of the Stephen Oronsaye Report

541 agencies; 38 abolished, 52 merged, 14 reverted: The Guardian, Oronsaye Report: Implementation and cost of governance challenge

FEC approval (Feb 2024) and implementation committee: PLAC

Job-loss concerns: Blueprint, Before implementing the Oronsaye report