As Nigeria’s fiscal situation continues to deteriorate and the gulf between the official and black market currency rates yawns ever wider, the finance ministry is trying to cut costs wherever it can.

The latest target: government travel.

There is good reason for this focus. According to figures released by the ministry, travel was the single biggest government line item from 2012 to 2014, at N248bn ($1.25bn) for the three years combined (the ministry did not provide annual figures). This is equivalent to an extraordinary 18 per cent of total government spending.


The finance ministry reckons it can shave N4bn a year from travel costs by negotiating discounted airfares with carriers, or just under 5 per cent of the approximately N85bn yearly average.

“The Efficiency Unit has engaged in negotiation discussions with local and international airlines for discounts commensurate with the large number of ticket purchases made by government annually,” the ministry said in a statement.

“The savings generated will increase funding available to the government for capital investment,” it added.

Unfortunately these savings are a drop in the ocean. The country is staring at a budget deficit that is set to double to N2.2tn in 2016.

Falling oil prices have battered the economy of Africa’s largest oil producer while the government’s refusal to let the naira devalue has eaten away at foreign reserves and caused black market exchange rates to rocket.

NIGERIA’S PUBLIC FINANCES: IN DEEP WATER

Year Fiscal deficit, % of GDP

2014 1.24%
2015 0.79%
2016 2.16%*
Sources: World Bank, Reuters *estimate


According to President Muhammadu Buhari, the country will borrow up to $4.5bn on foreign markets this year to plug the gap. In January, it approached the World Bank and the African Development Bank for a $3.5bn emergency loan.

The high cost of travel for government officials is unsurprising. The Nigerian elite has a taste for luxury travel, shown by the proliferation of private jets in the country.

A 2012 investigation by Nigerian newspaper Punch found that wealthy Nigerians spent $6.5bn on private planes between 2007 and 2012, making the country the biggest market for them in Africa.

Not all of them were bought with private funds. Under former president Goodluck Jonathan, Nigeria’s Presidential Air Fleet (PAF) acquired several new private jets, bringing its total to 11.

According to the UN, 46 per cent of Nigerians live in poverty, rising to 70 per cent in rural areas.

It is not clear whether the finance ministry’s targeted savings will address the lavish amounts spent on private jets by officials. The ministry did not respond to repeated requests for comment.

The PAF is financed from the defence budget and overseen by the Air Force. President Buhari has faced criticism for failing to cut down the fleet more than a year after he took office.

The revelation that the presidential fleet cost N5.8bn to staff and maintain in the first six months of his administration caused a furore in the national media.

The governors of Nigeria’s 36 federal states are not known to fly commercial, either.

Under former governor Rotimi Amaechi, the oil rich southern Delta state, for example, owned two private jets including a brand new $50m Bombardier jet purchased in 2012, and operated several helicopters.

Mr Amaechi is now Nigeria’s transport minister.

The cost of operating private planes is high. PrivateFly, a UK-based charter service, estimates fixed costs for a medium-sized private jet at around $1.8m a year.

“The biggest cost is the depreciation of the aircraft itself,” says CEO Adam Twidell.

He estimates that aircraft lose 20 per cent of their market value in their first year and 10 per cent yearly thereafter. Crew, engineers, maintenance, taxes and fees also factor in.

Many large companies and governments avoid such high costs altogether. Oil company BP, for instance, relies entirely on charter contracts. JCB, the world’s third largest equipment manufacturer by volume, has a single long range aircraft.

Mr Twidell estimates that three to five aircraft would suffice to service the entire UK government and royal family’s travel needs.

If Nigeria’s finance ministry is serious about cutting costs, targeting the government elite’s private air fleets might be a good place to start.

moxter:
Unfortunately no one can seperate Baba and travelling... So let the high life continue

moxter:
Unfortunately no one can seperate Baba and travelling... So let the high life continue

PassingShot:

Baba's traveling makes much more sense than GEJ's who always had hundreds of associates in his entourage as if they were always going for carnival.

PMB's ten journeys will not still cost as much as GEJ's one trip.

SleekMallam:
Mr Buhari alone spends approximately 12 billion naira annually to maintain his luxurious traveling addiction. By 2019, it must have cost taxpayers a whooping 48 billion naira on travelling expenses. for Mr Buhari.

Now when you factor in Mr Buhari feeding allowances which on official record is pegged at 1.7 billion naira per annum, that's 6.8 billion naira by 2019! In essence, it would cost the nation 116 billion naira to foot buhari travelling expenses and food! Yet, we are daily getting slaughtered in our sleep by the fulani and Buhari looks the other way.

moxter:
Can you give me three benefits of baba's tour to about 20 countries in 10 months Nigerian sir?...

obailala:
1.7 billion for feeding allowance?

This is how you spot the desperate wailers, they keep feigning ignorance so as to have what to say. Or who knows, maybe they might actually just be as ignorant as they appear to be.

SleekMallam:

1. Stabilised oil price at $40 per barrel.

2. Signed MOU with UAE.

3. A failed attempt to negotiate critical loan from world bank and IMF.

moxter:
Wow!!! More fuel to his jet then!

SleekMallam:

http://www.elombah.com/index.php/special-reports/3693-budget-2016-buhari-s-feeding-to-cost-5-million-naira-daily

SleekMallam:

He deserves more encouragement to travel more often after spending 6 billion naira so far on travels excluding hotel bookings of $1million per trip.

SleekMallam:

1. Stabilised oil price at $40 per barrel.

2. Signed MOU with UAE.

3. A failed attempt to negotiate critical loan from world bank and IMF.

obailala:
Your ignorance is unparallelled. The copy of the real budget has been in circulation for over 3months, even primary school pupils have access to it and know what's contained in it. But here you are, showing me link to elombah; in other words, elombah is your own budget document.

PassingShot:

Baba's traveling makes much more sense than GEJ's who always had hundreds of associates in his entourage as if they were always going for carnival.

PMB's ten journeys will not still cost as much as GEJ's one trip.

SleekMallam:

Is it too hard to present all evidences to support your case? show me your own budget.

obailala:
I am not going to show you any evidence; for someone who has access to the internet but chooses to be uninformed on even the most basic facts about a forgotten topic, I wouldnt expend a single iota of my energy educating you cos there's absolutely no need for that. I would gladly leave you to wallow in your ignorance but if you really need the right info, google is your friend.

SleekMallam:

You should be charged with withholding evidence. You mean the 2016 budget is been studied in primary schools?

obailala:
Oh yes, the budget has since been made public and anyone with access to the internet can have access to it. Strangely you chose to obtain your info on the publicly available budget from the gossip peddled by a gossip website, a gossip which was made even before the budget was released. And while the peddlers of that falsehood have since been put to shame, have been shut up and have since moved to other propaganda, someone (you) wakes up in March 2016 and is basing his argument on a long forgotten and long debunked piece of misinformation. I should have told you 'good morning' but obviously, you are still sleeping.