President Buhari’s government hopes to cut down air travel expenditure by 20 percent, amounting to N13.88 billion annually, through the Efficiency Unit initiated run by the Federal Ministry of Finance, especially if the provisions of the new circular issued by the Office of the Secretary to the Government (OSGF) are fully implemented.

The finance ministry which announced this in a statement on Wednesday, said such large savings from travel, which should ordinarily not be a major expense item for the government, will become available for investment in capital projects, such as roads, power, railways and public health facilities.

Kemi Adeosun, minister of finance, established the Efficiency Unit across MDAs to identify and eliminate wasteful spending, duplication and other inefficiencies.

But the unit is now collaborating very closely with the Office of the Secretary to the Government of the Federation (OSGF) and the Office of the Head of the Civil Service of the Federation (OHCSF), to review the provisions of some extant government Circulars on Overhead Expenses one of which is on Travels.

“It is estimated that travel expenditure will drop by about 20% if the provisions of the new circular issued by the OSGF are fully implemented. A 20% reduction in air travel expenditure, using the figure of N69.417 billion incurred on travels in 2014 will result in a cost-cutting of N13.88 billion,” the ministry stated.

Other overhead expenditure items reviewed by the Efficiency Unit are those relating to refreshments and meals, honorarium and sitting allowance, as well as advertising and publicity.

Measures that will standardise spending on these items, cut costs and promote transparency on these items have been recommended to the OSGF and the Office of the Head of the Civil Service of the Federation, from which further cost-cutting on Overhead Expenditure is to be achieved.

Meanwhile, the Efficiency Unit expects the implementation of the price discounts secured from airlines to start in May 2016 when the agreements would have been signed with the airlines and MDA staff would have been trained and equipped for effective administration of the new process.

The savings are expected to be even larger when discounts secured from airlines are added. Already, 11 airlines have offered discounts on local and international routes for travel by MDAs while negotiations are on-going with others.

According to the finance ministry, the discounts received so far vary across routes and airlines and range from seen percent to 50 percent.

The Efficiency Unit, in its negotiation for discounts with local and international airlines also recommended other measures for reducing the government’s large expenditure on travels to the OSGF.

These include the need to restrict Business Class travel to Ministers, Permanent Secretaries, Chairmen of Federal Government Committees, as well as Chairmen and Chief Executives of Parastatals and Agencies. In the past, some government officials who should have been on Business Class usually travelled First Class, while many others travelled Business Class instead of Economy.

http://www.financialwatchngr.com/2016/04/07/finance-ministry-reduce-mdas-air-travel-costs-n13-88bn-efficient-spending/

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