FG, extends cost-cutting initiative to states

In view of dwindling revenues, the Federal Government of Nigeria on Thursday extended its cost management initiatives to States and Local governments.

Addressing a cross section of Commissioners of Finance and Senior officials from states in Nigeria at a one day workshop on Cost Management, Kemi Adeosu, Minister of Finance while describing the workshop as timely said it is targeted at ensuring prudence in public expenditure.

According to Adeosun, one of the strategic objectives of FG’s Fiscal Framework for sub-national Governments is better management of Public Expenditure for which the establishment of Efficiency Units and the use of PriceList for procurements by state governments were stated as vehicles for achieving the objective.

The workshop according to the Minister has been organized not only to guide the state governments in the creation of efficiency units in their respective states but also to provide useful tips on how to identify the various elements of costs as well as how to manage them.

“As members of Federation Accounts Allocation Committee (FAAC), we are all familiar with the challenges being experienced by all tiers of government as a result of the sharp drop in revenue accruing to the federation.

“In the past 18 months, we have been confronted with the challenge of lower revenues in the face of high recurrent expenditure, large infrastructural deficit and high level of unemployment.

“In its resolve to address these issues and position Nigeria for inclusive and sustainable growth, the current administration adopted measures to diversify the economy, increase revenue sources and ensure best value in government spending by eliminating wastages and leakages,” she stated.

The Minister expressed optimism that the case studies highlighted at the workshop will inspire the thoughts of the participants on cost-cutting initiatives that they may introduce at the state and LGA levels.

Speaking on behalf of the participants, Obinna Mbata, Imo State Commissioner of Finance and Acting Chairman, Commissioner’s forum lauded the initiative of the Finance Ministry and concurred that the current economic situation in the country surely calls for drastic cost saving measures.

He further hinted that many states have already instituted due process units in their various establishments, a move which is geared towards ensuring prudent procurement processes and financial management.