The Chairman of the Alliance for Economic Research and Ethics (AERE), Dele Oye, has warned that Nigeria is losing more than ₦862 billion annually to the rising cost of governance driven by the proliferation of over 900 Ministries, Departments and Agencies (MDAs), calling for the immediate implementation of the long-delayed Oronsaye Report.
Oye also expressed concern over the ₦658 billion deducted by government revenue-generating agencies as the cost of revenue collection within the first six months of 2025, describing the development as evidence of an unsustainable public sector that is stifling economic growth.
In a statement on Sunday, the AERE chairman argued that the unchecked expansion of government agencies had created overlapping responsibilities, duplicated regulatory functions and imposed excessive compliance costs on businesses, discouraging investment and slowing economic development.
According to him, the recommendations contained in the Steve Oronsaye Presidential Committee on the Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies, submitted in 2012, remain the most practical solution to reducing the cost of governance.
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The committee had recommended the merger, abolition and restructuring of several government agencies, reducing their number significantly and projecting savings of about ₦862 billion between 2012 and 2015.
However, Oye lamented that despite the Federal Government’s approval of aspects of the report in 2023, implementation has remained largely stalled while the number of federal agencies has continued to grow.
He warned that many agencies now perform similar functions, resulting in regulatory duplication that places unnecessary burdens on businesses.
Using the recent sealing of three milk factories in Awada, Onitsha, by the Federal Competition and Consumer Protection Commission (FCCPC) as an example, Oye said manufacturers often face multiple regulators exercising similar powers over the same products.
According to him, food manufacturers are simultaneously regulated by the FCCPC, the National Agency for Food and Drug Administration and Control (NAFDAC), the Standards Organisation of Nigeria (SON), environmental agencies, local governments and other authorities.
He argued that the situation has created excessive bureaucracy that discourages formal business operations.
“In Nigeria, a manufacturer producing dairy products does not face one regulator; they face a constellation. NAFDAC demands product registration and facility inspection. SON demands standards compliance and certification. The FCCPC demands consumer protection compliance. Add the State Environmental Agency, Local Government trade licences and perhaps the Nigeria Agricultural Quarantine Service, and you have a recipe for paralysis,” he said.
According to Oye, the overlapping regulatory environment has transformed agencies established to protect consumers into institutions focused primarily on generating revenue.
He said many regulators now justify their existence through fees, levies and penalties imposed on businesses, turning enforcement into what he described as a profit-making exercise.
“This is not regulation. This is legalised extortion,” he said.
Oye further criticised the growing deductions retained by revenue-generating agencies, noting that ₦658 billion was deducted from Federation revenue as collection costs during the first half of 2025.
He said agencies including the Federal Inland Revenue Service (FIRS), the Nigeria Customs Service (NCS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) now retain percentages of revenues collected, reducing funds available for national development.
According to him, the deductions now exceed the total federal allocations received by several states.
He warned that Nigeria’s current regulatory structure is discouraging private investment despite the National Development Plan projecting that more than 85 per cent of required investments should come from the private sector.
Oye also argued that excessive regulation has pushed many small businesses into the informal sector, where they operate outside government oversight to avoid the burden of multiple regulatory requirements.
He urged the Federal Government to demonstrate the political will required to fully implement the Oronsaye Report and streamline the country’s regulatory framework.
“The private sector is bleeding. Investors are fleeing. Informal economic activity is exploding. Yet we continue to create more agencies, more fees and more complexity,” he said.
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Oye added that Nigeria’s economic future depends on reducing bureaucratic duplication and restoring government institutions to their original role of enabling, rather than frustrating, business growth.
“We are not asking for a revolution. We are asking for the implementation of a reform blueprint that has existed for fourteen years,” he said.
He maintained that only decisive action to rationalise government agencies and eliminate overlapping functions would reduce the cost of governance, improve the business environment and restore investor confidence in the Nigerian economy.
