Nigeria to Spend N19Bn on Software in New Budget

The Nigerian government will spend N19 billion on computer software in 2022, according to the budget proposal for the year submitted by President Muhammadu Buhari to the National Assembly.

While the items are essential for government operations, their cumulative cost compiled by Premium Times is higher, in part, due to fragmented purchases by agencies that have little or no consideration for cost-reduction or value.

The amount is spread across nearly 200 offices, and is bound to be a lot higher as it does not cover computer and software expenditure by the armed forces and dozens of government offices whose budgets are not submitted as part of the whole to the National Assembly.

Some offices not listed in the government’s general annual budget document include the Central Bank of Nigeria, Customs Service, NNPC and Federal Inland Revenue Service (FIRS).

Punch reported on Monday that the tax office, FIRS, plans to spend a whopping N2.04 billion all by itself on computers alone, and another N1.3 billion on “office stationery and computer consumables.”

Rising software spending

The huge figures help raise the budget’s total deficit to over N6 trillion.

At a time of low government revenue, they reflect how the country is made to bear the burden of increased spending on items that are ordinarily vital for government operations, but whose costs are made higher, in part, due to fragmented purchases by agencies that have little or no consideration for cost-reduction or value.

As countries continue to respond and recover from public health uncertainties due to the COVID-19 pandemic, spending on IT products by governments around the world is expected to rise next year to $557.3 billion, an increase of 6.5 per cent from 2021, according to Gartner Inc., a Stamford, Connecticut-based technology research and consulting company.

Gartner said in an August forecast that the disruptions caused by the pandemic have also reinforced a key digital government tenet, which is that “public policy and technology are inseparable.”

Many governments have over the years put in place processes that take advantage of bulk and discounted procurement of software to save cost.

In 2016, the United State government issued a new policy that tightened the reins on wasteful software purchasing by its agencies.

The policy made it mandatory for agencies to appoint officials to centrally manage their software buying.

Agencies were also required to continually update inventory of software licenses to track usage and remove redundant applications.

The policy aimed to “save taxpayers’ money and deliver more value for the American people.”

There is no indication the Nigerian government has made efforts to streamline its spending in a similar manner. The lack of coherence sometimes leads to apparently inflated rates for computer services and packages.

In 2020, Premium Times reported how the Kogi State government claimed it spent N150 million on a software to track coronavirus cases.

The company contracted by the government confirmed to Premium Times that the package sold for only N300,000.

Amid public backlash, the government later claimed the actual amount it spent was N890,000, without explaining the whereabouts of the huge balance.

Also, in 2015, Fashola Babatunde, minister of Works and Housing, said a IT firm developed his personal website for N78 million, but the firm initially denied being paid the amount.

It subsequently clarified that less than N10 million was paid by the Lagos state government for the website.