NANFeatures/Vol.11/No.30/2017 (Feb.10)
Cost of governance and the imperatives of Efficiency Unit
A News Analysis by Rachael Ishaya, News Agency of Nigeria (NAN)
“There is no amount of fiscal innovation and re-engineering that would deliver the desired results if the way government funds are spent is left unchecked’’, Mrs Kemi Adeosun, the Minister of Finance, said in 2015 when she inaugurated the Efficiency Unit (E-Unit) in the ministry.
The unit is expected to monitor and cut recurrent expenditure across Federal Government Ministries Departments and Agencies (MDAs).
The ministry observes that with proper monitoring and implementation of policies, the unit will also assist the government in identifying opportunities to reduce wasteful spending by public office holders.
Led by the minister of finance, the unit has members from both public and private sectors and notably, the members of this unit will work for free, with no expected salaries and allowances.
The unit is also saddled with the responsibility of imposing guidelines in an effort to cut the vast amount of waste in government spending.
Adeosun, during the inauguration, directed the E-Unit team to concentrate on the daily recurrent expenditure of government, which she said had been dubiously inflated over the years.
Before the inauguration, President Muhammadu Buhari had on Nov. 25, 2016, approved the establishment of the unit with a directive that the principal objective of the unit should be to ensure effective management of Nigeria’s economy and reduce cost of governance.
Economists, therefore, note that the establishment of the unit is fundamental to the country’s economic growth; especially as the nation’s recurrent expenditure completely reduces capital expenditure by a large ratio.
They cite a scenario in September 2015 when the entire capital expenditure was just N194 billion while overhead expenditure was N272 billion, arguing that E-Unit could address such development.
Adeosun assured the public that the E-Unit would undertake programmed reviews of all government overhead expenditure with a view to reducing wastage, promoting efficiency and ensuring quantifiable savings for the country.
“Specifically, the Efficiency Unit will work across all MDAs to identify and eliminate wasteful spending, duplication and other inefficiencies; identify best practices in procurement and financial management and share such knowledge to ensure its adoption.
“Findings of the Efficiency Unit will be formally communicated accordingly and will be enforced through establishment of expenditure guidelines, undertaking follow-up reviews, spot checks and other measures that will ultimately checkmate wastages across all areas of Federal Government expenditure,’’ she said.
She insisted that the cost savings activities of the unit were a key reform initiative towards achieving this objective.
According to her, with the efficiency unit in place, operational costs of government will be slashed to 50 per cent.
However, concerned citizens have asked how effective will the unit be able to carry out its mandate to justify its adoption from UK.
In UK, the Efficiency Unit was established in 1979 election by Prime Minister Margaret Thatcher to look for ways of saving money in departments.
It later developed a pattern of work that would also seek to tackle skills and culture with the hope of reforming the system.
But Mrs Patience Oniha, Head of the Efficiency Unit, said the unit had saved more than N15 billion, especially from travels and allowances, insisting that: “we hope to save additional N15 billion going forward.’’
Since the mandate of the unit includes engendering transparency and reducing government’s large expenditure through procurement in the various MDAs, it has evolved pragmatic approach to achieving efficiency.
For instance, in its negotiation for discounts with local and international airlines, the unit has recommended other measures for reducing the government’s large expenditure on travels to the Office of the Secretary-General of the Federation.
The unit’s mandates also include the need to restrict business class travel to ministers, permanent secretaries, chairmen of Federal Government committees and chairmen and chief executives of parastatals and agencies to cut wasteful spending.
The unit has also recommended the need to reduce the frequency of travels by ensuring that board and committee events such as meetings, workshops and conferences in Nigeria are held in locations where the institutions or persons participating in the event are domiciled.
Analysts say that 20 per cent reduction in Air Travel Expenditure alone, using N69.417 billion incurred on travels in 2014, will result in a cost-cutting of N13.88 billion.
According to them, such large savings, which should ordinarily not be a major expense item for the government, will become available for investment in capital projects.
Other overhead expenditure items reviewed by the unit are those relating to refreshments and meals, honorarium, sitting allowance, advertising and publicity.
With these measures, Mr Jude Ndukwe, an analyst, commended the unit, saying that it had the potential to reform government expenditure in favour of capital spending in critical areas.
“It is no secret that Nigeria is not as rich as it used be so it cannot continue to spend without care.
“It is alarming how government continues to spend 70 per cent of its resources to take care of the few million Nigerians in public service.
“I believe that the E-Unit is strategic to ending this trend and making more funds available to build the much needed roads, schools, hospitals and other social amenities,’’ he said.
The feats achieved so far by the unit notwithstanding, observers insist that the unit is still scratching at the surface of the real problem, calling on it to expand its reach.
The unit in its quest towards lessening government burden has been a platform on which some government agencies in rented property had moved to some seized buildings from those Nigerians accused of treasury-looting.
This has also helped in reducing the high expenditure on rent and office buildings by MDAs.
Similarly, the minister has succeeded in getting state government to buy into the initiative by making the establishment of E-Unit part of the criteria for accessing the N510 billion budget support facility.
Observers note that with the pace set by the Federal Government, if the E-units are effective in states across the country, Nigeria’s economy will recover quickly from recession.
All in all, they insist that there is need to ensure that government’s resources are used in the most efficient manner so that citizens will get value for money and more funds will be available for capital projects for overall development of the country.(NANfeatures)
**If used, please credit the writer as well as News Agency of Nigeria (NAN)