Efficiency Unit Targets 20% Savings from Travel Cost Reduction Initiatives

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New restrictions on travels of civil servants could save the Federal Government as much as 20% in travel costs in 2016, according to a statement from the ministry of finance.

The ministry estimates that Travel Expenditure will drop by about 20% if the provisions of the new Circular issued by the OSGF are fully implemented.

The new travel restrictions is an initiative of the Efficiency Unit of the Federal Ministry of Finance in collaboration 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.

This 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.

The second recommendation bordered on 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.  Furthermore, such events should for the most part be held in Nigeria but where this is not possible, the prior approval of the Secretary to the Federal Government should be secured.

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.  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

The Efficiency Unit, is the initiative of the current Minister of Finance, Kemi Adeosun and was set up to engender transparency and reduce government’s large expenditure through procurement in the various ministries, departments and agencies of the Federal Government.

.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.  The discounts received so far vary across routes and airlines and range from 7% to 50%.

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.

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.