Chapter 12

Public Procurement Reforms

Background

Out of inflation of contract cost, lack of procurement plans, poor project prioritisation, poor budgeting processes, lack of competition and value for money, award of contracts for non-existent projects, over-invoicing, diversion of public funds to foreign banks, and low project quality because of the use of inexperienced contractors, procurement costs in Nigeria were unduly high and by 1999 government was losing 60 Kobo of every ₦1.00 spent on procurement.

Past Reform and Achievements

In 1999, the World Bank and private sector specialists were commissioned to study the general procurement-related activities in the country. A Country Procurement Assessment Report (CPAR), which identifies the problems of the procurement system and possible solutions, was published in 2000. In June 2003 a Budget Monitoring and Price Intelligence Unit (BMPIU) for the procurement of capital, minor capital projects, and associated goods and services, was set up to operate independently. It was headed by a Senior Special Assistant to the President. Its objectives included determining whether or not due process has been observed in the procurement of services and contracts, establishing and updating pricing standards and benchmarks for all supplies to government, monitoring the implementation of projects, and ensuring that only projects that have been budgeted for are admitted for execution.

In 2007 Public Procurement Act was enacted, and a Bureau of Public Procurement (BPP) established to replace BMPIU. The efforts promoted an open tender process, competitive bidding process, and reduced the cost of governance. By 2014, after just seven years, the procurement reforms had saved the government more than ₦618 billion. A Public Procurement Research Centre (PPRC) was also established at the Federal University of Technology, Owerri to further improve the system, while training procurement staff.

Challenges and Next Steps

The mismatch between budgetary provisions and actual releases, which makes procurement planning difficult, need to be addressed by making the yearly budget give priority to ongoing and long-term projects. Circumvention of some provisions of the PPA need to be checked by prosecuting all public officials involved, to deter others. The National Council on Public Procurement (NCPP) which is in line with the procurement act should be inaugurated to make the process more efficient.

WANGONeT