Regulatory overlap, bloated MDAs threaten investments in Nigeria, AERE warns

The Chairman of the Alliance for Economic Research and Ethics (AERE), Dele Oye, has urged the Federal Government to urgently implement the recommendations of the Oronsaye Report, warning that Nigeria’s expanding bureaucracy has become a major obstacle to economic growth, private sector investment and ease of doing business.

In a statement, Oye lamented that the proliferation of more than 900 Ministries, Departments and Agencies (MDAs) has significantly increased the cost of governance, with the country losing an estimated N862 billion that could have been saved through the implementation of the 2012 Oronsaye Report.

He described the report as the most practical blueprint for streamlining government operations through the merger, abolition and restructuring of overlapping agencies.

According to Oye, the Steve Oronsaye Presidential Committee on the Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies recommended reducing the number of statutory federal agencies from 541 to 163, with projected savings of about N862 billion between 2012 and 2015.

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He, however, expressed concern 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 beyond 900.

Oye argued that the increasing number of agencies has resulted in overlapping mandates, duplicated regulatory responsibilities and higher compliance costs for businesses, discouraging investment and slowing economic expansion.

Citing the recent sealing of three milk factories in Awada, Onitsha, by the Federal Competition and Consumer Protection Commission (FCCPC), Oye said the incident underscored the inefficiencies of Nigeria’s fragmented regulatory system.

He noted that manufacturers are often subjected to multiple regulators, including the FCCPC, the National Agency for Food and Drug Administration and Control (NAFDAC), the Standards Organisation of Nigeria (SON), state environmental agencies, local government licensing authorities and the Nigeria Agricultural Quarantine Service (NAQS), all exercising overlapping powers.

According to him, the duplication creates excessive bureaucracy that increases the cost of compliance and pushes many small businesses into the informal sector rather than exposing themselves to multiple regulatory demands.

“In Nigeria, a manufacturer producing dairy products does not face one regulator; they face a constellation of regulators,” Oye said, adding that businesses are burdened with satisfying different agencies that often perform similar oversight functions.

He described the situation as “bureaucratic warfare,” arguing that regulators intended to protect consumers have become major threats to business sustainability.

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“The ancient wisdom that ‘too many cooks spoil the broth’ aptly describes Nigeria’s regulatory environment. When three different federal agencies possess the authority to seal the same factory, it ceases to be regulation and becomes an administrative circus,” he stated.

Oye further alleged that many regulatory agencies have shifted from their statutory responsibilities to aggressive revenue generation, treating businesses as sources of fees, levies and fines.

He cited official figures showing that N658 billion was deducted as the cost of revenue collection during the first half of 2025 by agencies including the Federal Inland Revenue Service (FIRS), the Nigeria Customs Service (NCS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

According to him, the deductions now exceed the total allocations received by several states, describing the trend as a system where “the machinery of government feeds on itself.”

He warned that Nigeria’s current regulatory framework contradicts the objectives of the National Development Plan 2021–2025, which estimates that over 85 per cent of the country’s investment requirements should come from the private sector.

“We cannot maintain a 900-agency bureaucracy and expect robust private sector investment. We cannot create overlapping regulatory jurisdictions and expect business confidence. We cannot treat compliance as a revenue opportunity and expect formal economic participation,” he said.

Oye maintained that excessive regulation has encouraged more businesses to operate informally to avoid multiple licensing requirements and regulatory costs.

He urged policymakers to demonstrate the political will to fully implement the Oronsaye Report, warning that continued bureaucratic expansion would further weaken Nigeria’s economy.

“The private sector is bleeding. Investors are fleeing. Informal economic activity is expanding, yet government continues to create more agencies, more fees and more complexity,” he said.

Oye concluded by calling on the Federal Government to embrace structural reforms that would reduce the cost of governance, eliminate regulatory overlaps and create a more business-friendly environment capable of attracting investment and driving sustainable economic growth.