Challenges And Prospects Of Public Procurement Practice In Nigeria
By Mazi Emmanuel Onyema  Newsdiaryonline Fri Sep 30,2011

The public procurement practice and systems have been acclaimed, based on empirical evidence, as the best means of guaranteeing the provision of public goods to the Citizens and public expenditure management. The Nigerian public procurement practice, before the enactment of the Public Procurement Act, 2007, has been known to be unprofessional, inefficient and ineffective; as it was based on Treasury Circulars of 1958, which provided only guidelines on public expenditure management. The guidelines of these circulars on public procurement practice were grossly inadequate and created rooms for malpractices and high level corruption in contract management. 

As a result of these shortcomings, the Chief Olusegun Obasanjo’s Government in 1999 commissioned the Country Procurement Assessment field work.  The outcome of the work produced the Country Procurement Assessment Report, CPAR, which recommended the establishment of Bureau of Price Monitoring and Intelligence Unit (BMPIU), among others, to address the shortcomings of the observed Country’s Public Procurement inadequacies.   However, in order to institutionalize the operations of the BMPIU, the Public Procurement Bill was sent to the National Assembly in 2003/2004, and passed into Law on May 31, 2007.    It was subsequently signed into Law, despite the desperate efforts of its critics on June 4, 2007, by late President Umaru Yar’adua, GCFR.  Since then, the Law has been in practice, with the Bureau of Public Procurement, BPP, as its main driver.

Recently, a Decade of Public Procurement Reform in Nigeria (2001-2011) was celebrated in Nigeria by Public Procurement National and International Stakeholders and anchored by the Bureau of Public Procurement.  What is the journey so far and how rosy or tortuous has it been? Any lesson(s) learned thus far, or how further afar can we go? These issues and questions need examination as we trudge on into another decade of the reform.

Before the enactment of the Public Procurement Act, 2007, it was established that 60 kobo was lost to underhand practices out of every N1 spent by Government.  The question now is, in terms of calculating the gains of the public procurement practice in Nigeria within the period under review, has there been a change or institutionalized processes to combat the aforementioned scenario?      Based on empirical evidence, the answer, without any fear of contradiction, is yes!  For example, the Bureau of Public Procurement, BPP, whose establishment was provided for by the Law, is in existence and is performing creditably.  The Bureau, as the sole regulator of public procurement practice in the country and based on its statutory functions and powers, has been scrutinizing the activities and performances of the MDAs under its public procurement review mechanism to ensure transparency, accountability, value for money, timeliness, among other essentials of a good practice.  In fact, the Bureau, according to records, saved the country a whopping sum of N216.6 billion during the 2010 Appropriation year from its review of contract processes before the issuance of Certificate of No Objection.

In terms of institutionalizing public procurement processes that will ensure efficient and effective practice, it is now a standard practice for the MDAs to base their annual procurement budgets on verifiable need assessment.  This simply means that the proposed procurement expenditure will impact positively in the provision of public goods for the Citizens of the country.  Besides, before the commencement of the yearly procurement, the MDAs must prepare and present to the Bureau, their public procurement plan to substantiate their readiness and strategies for the year’s procurement.  In spite of these efforts of the MDAs, the Bureau, from records available, has been conducting procurement planning workshops before the bid solicitation by the MDAs.  This is done, unarguably, to guarantee that their planning is good enough to drive the procurement processes when they commence exercise. 

Also, the MDAs have been provided with procurement planning software by the BPP, which is a technology that timely and efficiently assists them to perfect such crucial assignment.   The MDAs, Contractors and Service Providers, Stakeholders and members of the Public have been provided with Standard Bidding Documents and Regulations free of charge by the BPP.  These documents have clearly provided step by step processes that must be followed in contracting and provision of procurement of works, goods and consulting services in the country.  As a gain, it made Public Procurement Practice quite interesting, as both Procuring entities are robustly been engaged by Contractors and Service Providers once a foul play is suspected unlike before the advent of the Law when the MDAs Officials quote the aforementioned Treasury Circulars arbitrarily to suit their whims and caprices.  The practice now, is subject to well known recourse mechanisms and these accounts to deluge of petitions against MDAs to the BPP, EFCC and ICPC and even litigations at the High Courts of Justice.

  In many instances, statistically, there have been verdicts against the MDAs’ choice of Contractors and Service Providers.   This is also as a result of the various public enlightenment programmes which the BPP has carried out at the Zonal and State levels and their consistent electronic mass media education via radio and television jingles.  Also, the explanation of the technicalities and expectation of public procurement processes in their weekly television programme, Public Procurement Today, cannot be forgotten; as the programme, apart from being a must watch for the Procurement Stakeholders, has proved to be “an electronic lecture hall” for members of the public.

In its efforts to guarantee efficient and effective public procurement practice, the BPP has developed and made public in its website, a National database of the particulars, classification and categorization of Federal Contractors and Service Providers, with a view to encouraging serious business Organizations to register and position themselves for the much expected competitiveness in government business.  From the same website, the standard prices for most of the goods, especially, construction materials, are displayed to frustrate exploitative tendencies of Contractors and their collaborating MDAs Officers to inflate prices.  This gain of the current public procurement practice can be ascertain in Hon. Dino Melaye’s petition against the former Speaker of the House of Representatives, when he quoted the BPP’s prices for the items he alleged the Speaker and Management of the House inflated.  Unlike the pre-Public Procurement Act, 2007 era, when MDAs Officers charged with public expenditure and contract managements lack the expertise and experience to efficiently conduct public procurement due to lack of training, the said Officers now have sufficient skills and experience as a result of regular public and in-house public procurement workshop, seminars and dialogues by the BPP.  Besides, may of them have been converted, trained and certified as public procurement specialists as a result of the establishment of the public procurement cadre in the Nigerian civil service. 

Of all other gains of the public procurement practice in Nigeria, the established concerted efforts by the Civil Society Organizations,  some Contractors/Service Providers, BPP, EFCC and ICPC in tackling the hydra headed public procurement corruption are worthy of note and commendation.  It is important to stress that this corruption usually reduces the value for money and public procurement economy in our yearly Appropriations to about 40%, according to experts in public expenditure management.  These abuses result in various forms and degrees during project conception (Contractors influencing projects to suit them), design (Consultants designing to suit a particular technology or Contractor), implementation (Consultants manipulating documents/processes to suit a pre-arranged outcome), execution (Contractors and Consultants conniving to deliver poor quality jobs) and completion (Procurement Auditors conniving to affirm existing irregularities).  Public Procurement Corruption is also the main source of the monies being laundered by public Officers and therefore posses a big threat to our economic development and Internal Security Management. 

In this type of corruption, the country and her Citizens suffer untold hardship both at the short and long runs while few individuals become stupendously rich over night.  However, with the Procurement Law, the BPP, CSOs and the Anti-Corruption Agencies, successes, though limited, are being achieved in tracking, prosecuting and convicting public procurement Offenders.  In this regard, the CSOs have been blowing their whistles as a result of their public procurement observation of procurement processes in the MDAs, the BPP has exhibited courage in reporting cases of corruption in the areas of collusion, unlawful influence, bid rigging, use of fake documents in bidding,  bid splitting, etc, to EFCC and ICPC for prosecution.  The Anti-corruption Agencies, despite inherent frustrations in the system, have been arraigning, prosecuting and convicting public procurement suspects; for example, Chief Olabode George, a PDP chieftain, together with his co-conspirators, were sentenced to various jail terms on offences bordering on inflation of contract and contract splitting.  This conviction, whether political or not, according to different schools of thought, has brought caution in political interference in the procurement processes in the MDAs.

However, to the Public Procurement Stakeholders and other well meaning Nigerians, the greatest concern when appraising the Nigerian Public Procurement Practice within this decade, is the challenges confronting the practice.  From all ramifications, it is crystal clear that the challenges are enormous and daunting.   It is obvious that some Stakeholders, especially, some MDAs Officials, Consultants, Contractors and Service Providers, Politicians and indigenes where some projects are sited have refused to accept the change in the new public procurement reform and paradigm.  To them, the new practice, which is frustrating the “business as usual” syndrome, is a hindrance to easy money making  from the public sector of the Nigerian economy and should be resisted accordingly.  As a result, they still employ all sorts of tactics to frustrate the practice during bid solicitation and evaluations and contract execution stages. 

Another challenge being faced presently is political interference.  Despite the clear distinction made by the Act, in terms of responsibilities between Ministers as political heads and the Permanent Secretaries as Accounting Officers, evidence has shown that the Ministers dictate the procurement processes and override the powers and functions of the Accounting Officers.  In many instances, contracts are alleged to have been shared by the politicians, with the assistance and supervision of the Ministers manning the Ministries even before they are advertised.   Also,  perhaps, in order to obey their Masters, the Accounting Officers, are also alleged to often times direct Procurement Officers to work towards ensuring a ‘preferred Contractors/Service Providers are pre-prequalified and emerged as winners of contracts.

Perhaps, due to the aforementioned interest of the Government in the public procurement practice, the Federal Government till date, despite repeated calls and appeals by relevant Institutions and Stakeholders, has refused to inaugurate the National Council on Public Procurement, whose membership are statutory and known.  Based on the provisions of the Act, the powers and responsibilities of the Council are very enormous and critical to the activities of the Bureau and practice of public procurement in Nigeria.  In the absence of the Council, BPP has creditably tried to close the yawning gap created by the absence of the Council, although, its inauguration is a must, if the country demands to be taken serious in her campaign for Economic Reform Agenda.

In the MDAs, appropriated contracts are still being split to keep their value within the approved threshold of the Accounting Officers.   This ultimately, when not found, shield such contracts from the proper scrutiny/review of the BPP before the issuance of Certificate of NO Objection and therefore results to public procurement corruption. The present efficient and ineffective structure of the Public Procurement Cadre in the Civil Service posses a challenge.   At the moment, some MDAs still conduct their procurements in the department of Policy, Research and Statistics, PRS, contrary to the provisions of Act, mostly because of the hiccup at the Office of the Head of Service as to whether public procurement cadre and Officers should be transferred to the BPP, as Accountants and Lawyers in the Civil Service are Staff of the Accountant General and Attorney General respectively or not.

Worthy of mention here is the observed inability of the Anti-corruption Agencies to promptly try and dispose of public procurement cases.  According to the laws establishing EFCC and ICPC, they cannot charge cases to courts after investigation without the authorization of the Attorney General.  These situations, according to public procurement analysts, frustrate their eagerness to prosecute such offences and highly placed people will normally get their prosecution dropped or unduly delayed.  The posture of the Courts and the Lawyers in prosecuting related offences is another hindrance in ensuring good public procurement practice in the country.   According to observers, the law courts connive with most defending Counsels to resort to unnecessary and ridiculous injunctions and adjournments to frustrate the trials of suspects.  It is worthy of mentioning here that some cases, mostly those involving past Governors and other Politicians, that were charged to courts since 2007 are still pending there.  One of them has even obtained an injunction restraining the EFCC, sine die, from mentioning the against him.

Despite the efforts of the BPP in enlightening the Citizens, building the capacity of the public procurement Officers and the CSOs, the truth is that much still needs to be done in ensuring that about 70% of the Nigerian population know and appreciate the provisions of the Public Procurement Act, 2007 and the resultant Guidelines and Regulations.  In order to achieve this, there is still obvious need for sustained public procurement education in all the States and Local Government Areas of the Federation. At least, this will make the herculean assignment of observation and monitoring of procurements in the rural areas to be possible.

In order to achieve their perceived mischief most MDAs still make it difficult for the CSOs to effectively observe the processes.  For example, most MDAs have resorted to giving the CSOs short notices of their bid opening and pre-qualification exercises. They are equally known to be hostile to the CSOs when some details of the procurement processes are being demanded.

Another challenge being encountered is the late passage of annual budget.  Experience has shown that most the Country’s budgets are passed about the first quarter of the Appropriation year or more.  Even when passed, it takes quite a long period of time before financial releases are made to them. The implication is that the MDAs are  usually put under undue pressures to start and conclude their yearly procurements within a short period so as to avoid their monies being mopped up.

The poor screening of the technical and financial capabilities of the Contractors and Service Providers during their pre-qualifications due to ulterior motives and/or lack of capacity within the MDAs have been observed to be a challenge.  This scenario usually result to abandonment of jobs or poor execution of concerned contracts.

For the Contractors,  there have been complaints of long delays in getting agreements prepared and signed by the Legal Departments of the MDAs resulting to late entry of sites as the case may be.  They have equally complained of the difficulties of getting Advanced Payment Guarantees and Bid bonds from the MDAs’ nominated or preferred banks.  In most cases, these will warrant opening of new bank accounts with the nominated banks.  Some of the MDAs still demand  registration of the Contractors with them before bidding there, contrary to the present guidelines from the public procurement Regulator.  Many Contractors are still being owed after completion of their jobs.  Curiously, they have refused to sue and collect the approved interests on the fund owed as stipulated by the Act; perhaps, for fears of being tacitly blacklisted in such MDAs

The frosty working relationship between the Ministries and the Parastatals under them has been variously reported as a challenge in guaranteeing good public procurement processes.  Most of Ministries still insist in micromanaging of the Parastatals and even starving them with essential information that will enable them independently conduct their procurement activities.  In many instances, the Ministries still insist of approving payments for contracts in the Parastatals under them contrary to the relevant circular from the Office of the Secretary to the Government of the Federation, SGF.

The National Assembly on its own, has not helped matters.  It will be recalled that the amendment of the Act during the last legislative year was not concluded for obvious self interest.  Besides, the alleged high level of public procurement corruption, as exemplified in the N2.8 billion Peugeot scandal and the allegation by the PROGRESSIVES, a Group of Honourable members in the House led by Hon. Dino Melaye, accusing the then Speaker, Hon. Dimeji Bankole and the House Leadership of public procurement malpractices.  The right thinking members of the Nigerian Society expect the lawmakers, who passed the law and oversight its  administration in the MDAs to protect rather than abuse the stipulations of the Act.

In spite of the observed shortcomings of the public procurement practice in Nigeria so far, public procurement analysts believe that based on the newness of the Law, the existing level of corruption in the country and the general Nigerians’ mindset towards get rich quick syndrome, that the practice need to be applauded, although urgent actions need to be followed to guarantee the public procurement best practices.  What remains is to chart a way forward towards ensuring the prospects of the practice.  In view of this, a strong political and Government supports are needed as this will ensure a holistic economic transformation of the county.  This can be done by ensuring non-interferences in the conduct of procurements.  Besides, Government should grant the EFCC and ICPC the much needed total autonomy as these will them to fast forward their operations against public procurement corruption.   From the achievements made so far, it is evident that shortly, irrespective of the efforts of detractors, the practice will be more sustained.  Accordingly, more Nigerians, especially, the Professionals and rural populace, who are better placed to monitor and report on project should be enlightened and mobilized to sustain the practice.

It is quite interesting that some States have passed the Procurement Law and have started enjoying the benefits of the practice, no matter small.  In the same way, all the remaining States, despite the tiers of Government status of the country, should be tacitly compelled to institutionalize the Law.  It is the opinion of experts that before the release of their statutory allocations and benefiting from certain Federal Government economic largess or even foreign grants and aids that the Federal Government will approve or stand as guarantor, a demand should be made of the Procurement Laws.

It is very heartwarming that critical National and International Institutions are now paying good attention to our procurement practice.  The efforts of the World Bank, United Nations Development Programme, UNDP, United Nations Office on Drugs and Crime, UNODC, Nigeria Financial Intelligence Unit and Nigeria Economic Summit Group, NESG, among others, are commendable in sustaining our procurement practice.  In its recent Policy Dialogue, the NESG mobilized local and international experts to brainstorm on corruption in Public Sector business or public procurement, its challenges and impact on National development.  While commending their efforts, it is expected that they, together with other relevant Organizations, should partner with CSOs and Professional Bodies to make their work people oriented by embarking on mass enlightenment programmes at the rural areas.

In summary, public procurement practice has come to stay in Nigeria, courtesy of public procurement Stakeholders and championed by the BPP.  What remains is for everybody to join hands in developing and championing strategies that will sustain it, especially, combating public procurement corruption, which has been identified as its greatest challenge.

Mazi Emmanuel Onyema is an Abuja based Public Procurement Analyst.

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