FG to eliminate wastes, improve efficiency using price guideline

Against the urgent need to achieve a better-cost structure for the government and derive maximum value for money spent, the Federal Government says it is set cut cost, eliminate wastes and duplications in government’s working processes and activities with the use of ‘Price Guideline.’

“Our mandate is on overhead expenditure, to eliminate wastes and duplications in government working process. The government needs to use resources more judiciously in ‘lean and fat’ times,” Kemi Adeosun, minister of finance, represented by Patience Oniha, head, Efficiency Unit of the ministry, said this at a media roundtable on ‘Understanding the Mandate of the Efficiency Unit’ in Lagos yesterday.

Adeosun said the mandate of the unit, which was inaugurated in November 2015, was to generate savings for government from procurement process.

According to Adeosun, “Managing the budget for what it is meant for has been a challenge.

“In order to cut cost and save more, the ministry has said it is focusing on using the government’s large purchasing power to negotiate favourable terms from suppliers, while streamlining the procurement process to make it more wholesale rather than being fragmented. Under the ministries, compliance is optimal.”

Acknowledging the high overhead cost of running government and disparity in the procurement process in ministries, agencies and departments (MDAs), the minister said the introduction of the unit would bring about price negotiations leading to uniform prices in government spending on similar items from various suppliers.

To accomplish the task, she further said Share Service had been introduced, explaining that the service to engage in government supply activities was open to everyone as long as the price guideline was followed.

Recognising the challenges previous administrations had faced in budget implementation, the finance minister said government needed to invest more in infrastructure, spend more on capital rather that recurrent.

On assumption of office, the minister of finance inaugurated the Efficiency Unit to review the government’s overhead expenditure from 2012-2014 and make recommendations. It revealed that the overhead spending was concentrated on few items namely: local and international travel, maintenance, local and international training, welfare, and office stationeries and computer consumables.

There was also large spending on items such as honorarium and sitting allowances, meals and refreshment and books.

The unit further revealed that on travel tickets, there was potential saving of opportunity of N4.14 billion annually if a price discount of 5 percent was secured on average annual expenditure of N83 billion on travels.

She said that the ministry had concluded the review and recommendation processes, stating that it was at the implementation stage.

CHIGOZIE EGWUATU