FG to Save N5bn Annually from Air Fare Discounts
Ndubuisi Francis
The federal government is targeting an estimated savings of about N5 billion annually from air ticket discounts following an arrangement with some airlines under the Efficiency Unit (E-UNIT) of the Ministry of Finance.
The Minister of Finance, Mrs. Kemi Adeosun, made the disclosure in Abuja yesterday at a workshop organised by the E-UNIT in collaboration with Dana Air, for personnel in the protocol units of Ministries, Departments and Agencies (MDAs) of government.
The workshop was designed to acquaint them with the contract agreement between some airlines and the government on discounted air fare. Adeosun, who was represented by a Director in the ministry, Mrs. Laraba Shaibu, stated that the workshop was designed to sensitise the MDAs on the initiatives of the E-Unit which are targeted at moderating the federal governments expenditure on travels.
According to her, the workshop would provide an opportunity for officers in MDAs to be aware of the initiatives and in particular, to be equipped with details of how to access the 50 per cent travel discount offered by Dana Airlines Limited to the MDAs on its local and regional routes.
“It is common knowledge that, if as a country we had invested more in capital projects, the state of our infrastructure would have been better than what it is today,” she said.
“This arrangement with Dana Airlines Limited is the first among several on-going activities of the E-Unit to use the federal government’s large buying power to secure commensurate discounts from providers of goods and services. From discounts on air travels alone, we expect to have saved N5 billion per annum when the legal documentation of the discounts offered by other airlines are concluded,” she disclosed.
Travel costs by MDAs (local and international) is saud to have accounted for N353.70 billion among top five overhead expenditure items of federal government’s expenditures between 2012 and 2015.
Other list of expenditure items such as maintenance (all fixed assets) gulped 228.45 billion, training (local and international) N 176.66 billion, Office Stationery and Computer Consumables N166.27 and welfare 129.43 billion totalling N 1,054.51trillion.
Head, E-Unit, Mrs. Patience Oniha in a presentation to the participants at the workshop said the current administration embarked on financial reforms on discovering that its revenue had dropped sharply by about 50 per cent since 2015 when crude oil prices collapsed noting that the drop was compounded by disruptions in local production.
“Government’s expenditure on the other hand has been growing as evidenced by the size of the annual budgets. The shortfalls in revenue have translated to budget deficits funded largely through borrowing. A significant part of the federal government’s expenditure have been on Personnel (over 60 per cent) to the detriment of capital expenditure,” she said.
According to her, one of the financial reform measures introduced by the present administration was the creation of an E-UNIT, to enable the government deploy more resources
to capital in order to achieve value for money and savings from the procurement process.
Oniha said E-UNIT, carefully , after discussing with a number of airlines arrived at a mutual agreement that would enable government officials on official assignment travel on discounted 50 per cent rate air tickets.
She warned that the discount is strictly for official assignments while discount cannot be transfered to any siblings or relations.
Her words: “19 airlines responded offering discounts of 5 to 50 per cent, some flat fares. Aero Contractors and Arik were among the 19. For the regional and international carriers, the discounts vary for different routes,” she added.
Oliha said while agreement with Dana airlines had been concluded , others were at various stages of completion.