FG begins to set benchmark for MDAs’ expenditure.

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The federal government on Monday said it will set benchmark for procurement in the civil service to cut the increasing overhead cost.

Kemi Adeosun, the finance minister said federal government is “trying to establish benchmarks and we believe by so doing, we will make everybody much more cost conscious in how they spend money at the moment”.

“At the moment there is no guideline. So, where there is no law there is no sin. So we need to establish those guidelines to guide how people spend money.”

These are the words to explain why the government came about the Efficiency Unity which she said is to help to cut cost of governance.

A review of past expenditure was made by the current administration and wide variations was noted in the prices of basic items between departments and within agencies.

“Paper costs varied by up to 80 per cent between departments; range of prices for airline flights to the same destination differed by 100 percent while printer cartridges of the same specification ranged in price from N16,000 to N62,000.”
According to her, “there are a number of factors that may explain this. It may be a function of poor negotiating skills or lack of reliable price data. Also, the manner in which government operates may be inflating the costs, for example, delayed payment or perceived risk of non-payment may result in higher pricing to government.”

The Efficiency Unit will look at all the causes that make government spending extremely inefficient while government will circulate those results.

“Not only to the agencies that were reviewed, that is why the head of service is here, to ensure that every agency gets a circular saying, this is now the cost of paper. And if you go above it , the Perm Secretary or whoever is approving that memo needs to have a reason for such”

The current effort is compelled by the current economic situation and reduction in oil price that have exposed Nigeria’s vulnerabilities and created the need for greater efficiency in government spending.

As a result, Efficiency Unit she stated “is an important first step in the road towards improved public financial management. Nigeria’s Efficiency Unit is not a temporary measure. It is a permanent, high profile initiative. The President’s desire to reduce the cost of governance is an important element of the commitment to deliver change to our nation.”

The Efficiency Unit will seek to understand why in many cases the price paid for basic services by government exceeds that attainable in the private sector. The federal government she said “has significant buying power in the market and this must result in keen pricing of all goods and services.”

The primary objective of this Efficiency Unit is to assist the government in identifying opportunities to reduce wasteful and inefficient spending by “doing more with less.” The ministry of finance, Adeosun said “has emphasized the need for the Efficiency Unit to provide concrete policy recommendations to generate fiscal savings for higher priority uses especially capital expenditure.”

According to her, “what we are dealing with is not contracts, what we are dealing with is day to day overhead expenditure and at the moment there is no guideline on that. And then people are left to their own devices. There is no conflict between Bureau for Public Procurement (BPP) and the Efficiency Unit. The Efficiency Unit is drilling down to fueling, photocopying cost the day to day spending of MDAs, you will be surprised that they are actually more than what we spend on capital and that is why we are really trying to address here.

Members of the Efficiency Unit are: Patience Oniha, Project leader, Winifred Ekanem Oyo-Ita (HoS) Ahmed Idris (AGF) Samuel T Okura Auditor General of the Federation, Aliyu Gusau, DG Budget Office, Kabir Mohammed, former ICAN President, Mr. Kunle Elebute Partner KPMG and Seyi Kumapayi, Chief Financial Officer, Access Bank.

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