The Federal Government spent N825 billion in three years on travels, maintenance, local and international training, welfare and stationery/computer consumables.
Disclosing this, yesterday, Head of the Efficiency Unit, set up by the Ministry of Finance to streamline government overhead expenditure, Patience Oniha, said from the study of government overhead expenditure it carried out between 2012 and 2014, 60 per cent of Federal Government’s overhead expenditure were, on the average, incurred through local and international travels, maintenance, local and international training, welfare, office stationery and consumables, honourarium and sitting allowance, meals and refreshment and books.
She said: “In furtherance of its commitment to re-prioritise spending and cut cost on recurrent expenditure, The Efficiency Unit of the Federal Ministry of Finance is planning to introduce detailed price guidelines to ensure value for money in procurement by Ministries, Departments and Agencies (MDAs).
“To reduce the incidence of cash, the deployment of Ministerial Debit Cards is being piloted. The unit, which carried out an extensive and detailed review of the Overhead Expenditure data of the government for the period 2012 to 2014, found that the overhead spending pattern was concentrated on a limited number of items, including travel, maintenance, local and international training, welfare and office stationery/computer consumables.
“The Cumulative Expenditure on these five items was N825 billion, representing 61 per cent of the Cumulative Total Overhead Expenditure of N1,353 billion for 2012 to 2014. “This means that the average amount expended annually on these five items during this period was N275 billion. The estimate for 2015 shows a continuation of this trend. “Overhead spending exceeded allocations to capital in all the years reviewed.”
Expenditure on honoraria
Another finding from the review was the large expenditure on honoraria and sitting allowances, refreshment and meals, books, fuel, publicity and adverts. In relation to procurement, which had been identified as a major source of potential savings for government, the Efficiency Unit had prepared a list of goods and services which were regularly procured by MDAs.
Oniha said by pooling the demand of MDAs, there would be opportunities to leverage the resultant bargaining power and secure price discounts and other benefits from suppliers. “This strategy will deliver savings and reduce the administrative costs inherent in the current procurement process, which is rather fragmented,” she said.
She also recalled that “developed countries such as the USA, UK, Canada and Hong Kong have used this strategy successfully to manage their expenditure. Within Nigeria, large and diversified private sector organizations manage their procurement in a similar manner. As a country, Nigeria should be no exception, more so when resources need to be managed tightly to promote spending on capital projects, such as infrastructure.”