It is imperative that government at various levels should explore outsourcing its non-core services and its non-sensitive security duties. Government by the way needs to begin to shed unnecessary weight in the light of falling oil prices and dwindling revenue.
There are many duties such as personnel records management, invoicing/bill payment, waste management, maintenance of public infrastructure, recruitment, job evaluation, staff audit etc. that are better left to private hands, freeing government of liabilities incurred by staff and numerous other avoidable costs. Government can then focus on governance, making policies and enforcing standards.
I have always been an advocate of Inshoring, which is for organisations including government to outsource their non-core functions to specialised providers locally. Nigeria’s population is growing rapidly, and projected to reach 208.9mn in 2021 (a 28.5% increase on 2011 levels). The population is also very young, with 62% younger than 25 and nearly 100 million below age 30 not to talk of bout 46 per cent of Nigeria’s young people (aged 18-24) that are unemployed. Outsourcing provides a great window to address unemployment in my view.
Just as it is in the private sector, only duties that are non-core should be outsourced, in addition to those without security implications for government. Government for example need not employ cleaners, security guards, front desk officers (receptionists) and drivers nor manage most of its buildings or facilities for which practically all ministries have fully staffed Admin departments.
The mistake that government makes is to focus on the unemployed in seeking to employ as many as possible. What government ought to do is to focus on creating the enabling environment for people to create small-scale businesses that would in turn employ staff as outsourcing makes a positive impact in today’s business. I must emphasis though that outsourcing is not a career job. It is generally a platform for building skills and raising some capital for the employee to either get career jobs or become entrepreneurial.
Note that anything that makes hiring staff more expensive like multiple taxes, legislated increased benefits like pension and Health Management schemes will discourage job creation. Numerous Taxes for example and the overall tax burden make job creation more difficult and less rewarding for the employer.
Its also been proven that there is a high correlation between the incidence of corruption and the extent of bureaucratic red tape in government. For example, while safeguarding the essential regulatory functions of government, the process of opening up a new business, registering property and a plethora of other services can actually be outsourced in my view. Anyone that has gone through these processes with government would attest to the bureaucracy ad related corruption that thrives in what can easily be managed cheaper and more efficiently by the private sector under strict guidelines and improved revenue benefits for Government. Lagos State revenue generation service outsourced to BAT is a case in point, a model that has been since been copied by most states in Nigeria and even other countries.
Benefits of outsourcing to Government
Government would get access to operational best practice that would be too difficult or time consuming to develop in-house. Secondly the general cost of conducting business would drop while government can then focus more on law, order and strategic development. Cost would drop from reduction in dead weight unproductive workforce that is prevalent in government, while government would have access to enhanced services with global benchmarks as outsourced services are typically guided by service level agreements that tends to put the provider on their toes. While it is true that government outsourcing would result in job loss, Simon Kolawole in a recent Thisday backpage article on Outsourcing posited “Disengaged government workers who really have something to offer will be in a good position to float companies and provide the same services to government, but this time as entrepreneurs. Government overheads are reduced, while the new business entities will pay corporate and personal taxes. Those idle civil servants who sell fish and shoes in the office can collect their terminal benefits and rent shops at Dugbe, Wuse and other markets to engage in proper trading.” In addition, those new business created would also employ workers that would earn income. The income earned in turn would be spent further increasing the volume of economic activity with resultant further increase in Government revenues through taxes.
While there has been significant improvement in the knowledge, skills and service delivery of outsourcing firms in Nigeria in recent times some gap still exists. But it is like the Ebola vaccine that no pharmaceutical company was interested in investing in until the demand for the vaccines became so high. By outsourcing, providers would be encouraged to invest more in improving their own capacities in their core areas and ultimately deliver new, improved skills. Even global outsourcing firms would seek ways to partner with Nigerian outsourcing providers for the enhanced economic potential while also transferring global best practice skills and investments in latest technologies.
Government is expected to be accountable to the people. Government is generally responsible for seeing that law and order are maintained, that the needs of the public are addressed as far as is practicable and that any dangers threatening the interests of the public are averted. As we have established above, outsourcing enhances productivity, reduces governments cost of doing business and improves government revenue while freeing it up to focus on its core roles and responsibilities.
I therefore submit that outsourcing enhances government’s capacity to be accountable to its people.
– Olusoji Oyawoye.