AERE chairman warns Nigeria’s expanding bureaucracy is driving up the cost of governance, discouraging investment and weakening private sector growth as businesses grapple with multiple regulators and rising compliance costs.
By Amarachi Odenigbo
ABUJA, Nigeria | July 20, 2026
Economic reform advocate says proliferation of government agencies is suffocating businesses and fueling waste
The Chairman of the Alliance for Economic Research and Ethics (AERE), Dele Oye, has raised fresh concerns over Nigeria’s expanding bureaucracy, warning that the country’s growing number of Ministries, Departments and Agencies (MDAs) is imposing enormous financial and regulatory costs on the economy while discouraging private investment.
Oye argued that Nigeria’s failure to fully implement the recommendations of the Steve Oronsaye Committee Report has allowed overlapping agencies, duplicated mandates and excessive regulatory bottlenecks to persist more than a decade after comprehensive reforms were proposed.
According to him, the continued expansion of federal agencies has significantly increased the cost of governance while creating an increasingly hostile operating environment for businesses.
Call for Full Implementation of the Oronsaye Report
In a statement released on Monday, Oye described the Oronsaye Report as the country’s most comprehensive blueprint for restructuring government institutions and reducing public expenditure.
The committee, inaugurated in 2012 under former President Goodluck Jonathan and chaired by former Head of the Civil Service of the Federation, Steve Oronsaye, recommended sweeping reforms aimed at streamlining federal agencies through mergers, abolitions and restructuring.
Among its recommendations were:
- Reduction of statutory federal agencies from more than 500 to about 160;
- Abolition of dozens of redundant agencies;
- Merger of institutions with overlapping mandates;
- Conversion of several agencies into ministerial departments.
Oye noted that although aspects of the report received approval by the Federal Government in 2023, implementation has remained slow and incomplete.
He argued that instead of shrinking, the federal bureaucracy has continued to expand.
‘More Than 900 MDAs Are Unsustainable’
According to Oye, Nigeria now operates more than 900 Ministries, Departments and Agencies, a figure he said has created an expensive administrative structure that duplicates responsibilities while consuming scarce public resources.
He maintained that the projected savings from implementing the Oronsaye Report—estimated at approximately ₦862 billion over the period originally studied—demonstrate the scale of potential fiscal efficiency that remains unrealised.
“The report offered Nigeria a practical roadmap for reducing waste and improving efficiency,” he said.
“Fourteen years later, many of those recommendations remain largely unimplemented.”
Multiple Regulators, Rising Cost of Doing Business
Oye argued that the consequences extend beyond government spending into the wider economy.
He said businesses increasingly contend with multiple federal and state agencies exercising similar regulatory powers, forcing companies to obtain numerous licences, certifications and inspections before operating.
Using the recent sealing of milk factories in Awada, Onitsha, by the Federal Competition and Consumer Protection Commission (FCCPC) as an example, he argued that manufacturers frequently face overlapping oversight from agencies including:
- National Agency for Food and Drug Administration and Control (NAFDAC);
- Standards Organisation of Nigeria (SON);
- Federal Competition and Consumer Protection Commission (FCCPC);
- Nigeria Agricultural Quarantine Service (NAQS);
- State environmental protection agencies;
- Local government authorities.
According to him, such duplication creates unnecessary delays, increases compliance costs and discourages entrepreneurship.
‘Regulatory Overlap Is Driving Businesses Into the Informal Economy’
Oye warned that excessive bureaucracy could inadvertently undermine regulatory objectives.
He argued that many small and medium-sized enterprises (SMEs) choose to remain outside the formal economy because complying with numerous agencies has become increasingly expensive and time-consuming.
Rather than encouraging compliance, he said, the current regulatory architecture risks pushing businesses into informality where government oversight becomes even more difficult.
He described the situation as counterproductive to Nigeria’s economic development objectives.
Concerns Over Revenue Collection Incentives
Oye also questioned what he described as growing dependence on regulatory agencies as revenue-generating institutions.
Citing official figures, he stated that approximately ₦658 billion was deducted during the first half of 2025 as costs associated with revenue collection by government agencies.
He argued that when regulatory institutions increasingly depend on fees, levies and deductions for operational funding, there is a risk that enforcement priorities could become distorted.
According to him, government should prioritise creating an enabling business environment capable of expanding economic activity and increasing the overall tax base.
Private Sector Growth at Risk
Oye warned that Nigeria’s long-term economic ambitions depend heavily on private sector investment.
He referenced the National Development Plan 2021–2025, which projects that a substantial share of national investment is expected to come from private enterprise.
However, he argued that achieving those objectives will remain difficult if businesses continue to face complex regulatory requirements and overlapping institutional mandates.
He said investors generally favour predictable, transparent and efficient regulatory systems.
Why the Oronsaye Report Remains Relevant
Public policy experts have long argued that restructuring overlapping agencies could:
- Reduce recurrent government expenditure;
- Improve public sector efficiency;
- Eliminate duplication of functions;
- Simplify regulation for businesses;
- Improve accountability;
- Enhance service delivery.
Successive administrations have expressed support for aspects of the report, although implementation has proceeded gradually amid institutional and political challenges.
Analysts note that reforms affecting government agencies often encounter resistance because of employment concerns, administrative restructuring and competing political interests.
Experts Call for Balanced Reform
While many economists support reducing duplication across government institutions, governance experts caution that reforms must also preserve regulatory effectiveness.
They argue that institutional consolidation should strengthen oversight rather than weaken consumer protection, environmental regulation or public safety.
The challenge, they say, lies in eliminating unnecessary bureaucracy without creating regulatory gaps.
As Nigeria continues pursuing fiscal reforms, economic diversification and increased private investment, the debate over the size and efficiency of government institutions has regained prominence.
Dele Oye’s renewed call for full implementation of the Oronsaye Report highlights broader concerns about the rising cost of governance, regulatory duplication and the ease of doing business.
Whether policymakers accelerate implementation of long-standing restructuring proposals may significantly influence Nigeria’s efforts to improve public sector efficiency, attract investment and create a more competitive economy.
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