A STUDY INTO THE PROBLEMS AND SOLUTION OF THE 2007 PUBLIC PROCUREMENT ACT ON TRANSPARENCY AND ACCOUNTABILITY
1.1 BACKGROUND TO THE STUDY
Nigeria gained independence from the British Government in 1960. Between 1960 and 2007, she has passed through Military and Civilian governments. The military governments rule with decrees while the civilian governments govern by the constitution and the laws made by the legislature. Both [military or civilian governments] engage in business transaction of which the greater part is the award of contracts (Ezekwesilli, 2004). Before 2007, there was no statutory provision that directly regulate the award of public contracts in Nigeria and the result is that the award of contract becomes an avenue by which the government functionaries reward their friends and cronies and by which they too amass wealth. Most of the rich business men that we have in Nigeria today make their money through contracts that are awarded to them in the past by the governments, whether military or civilian government it is the same (Emeka, 2009).
Disgusted by the depth of corruption in the procurement system and its effects on the economy, the Federal Government commissioned the World Bank in 1999 in collaboration with some Private Sector Specialists to review the country’s public sector procurement structure, including the existing legal framework, organizational responsibilities and capabilities, and present procedures and practices, including how these may differ from the formal rules and procedures.
However on the 4th of June 2007, the then president of Nigeria President Umaru Musa Yar’Adua signed into law the Public Procurement Act (PPA) which is the first procurement law in the history of Nigeria. The purpose of the Act is to ensure transparency, accountability, competitiveness, value for money and professionalism in the public sector procurement system (Emeka, 2009).
The Act provides for the establishment of the National Council on Public Procurement (NCPP) and the Bureau of Public Procurement (BPP) as regulatory authorities responsible for oversight, management and monitoring of public procurement practices and system. Though the new legal regime takes effect immediately as it should, lack of total commitment on the path of the federal government to fully comply with the regulations enshrined in the Act was observed (Emeka, 2009).
The problem lies with the issue of government involvement, whether they (government functionaries) should disengage from procurement process or not is an underlying question the government is not comfortable with. The argument of the government functionaries is that they must be involved in the procurement process in order to safeguard public resources and maintain transparency and accountability (FMF, 2008).
As of today, the greatest challenge for the enforcement of procurement law in Nigeria is the involvement of the government functionaries in the procurement process and this is possible because the government has not fully implemented the provisions of the Act. Should the government who initiated the enactment of the Act fail to fully implement it. That lackadaisical move on the part of the government is worrisome but not unpredictable. A clue to the reason behind their conduct could be deduced from the history of the PPA itself. It takes the government almost seven years to enact this law.
It was also discovered that partial implementation or dragging of feet in enacting the law is actuated by the desire of the political class in the government not to lose the means to award contracts to their cronies. This study is examining the probems and solutions of the 2007 public procurement Act on transparency and accountability.
1.2 STATEMENT OF THE PROBLEM
Nigeria’s poor economic performance overtime is largely attributable to lack of transparency and accountability as well as widespread corruption (Olowu, 1993). The State and its public bureaucracy are largely to blame for the phenomenon (Aduba, 2004). There have been existing open abuses to rules and standards in the award and execution of public contracts in Nigeria. These were evident in over-invoicing, inflation of contract costs, and proliferation of white-elephant projects and diversion of public funds through all kinds of manipulation of contract system. The regulatory bodies that were set up to ensure compliance with laid down rules and regulations on procurement and award of contracts in the public sector appeared ineffective. This resulted in a high level of corruption and enormous wastage of public resources, lack of transparency, accountability, fairness and openness. The situation made foreign and even local investors to lose confidence in the Nigerian economy. It must be noted that the prevailing high level of corruption was closely linked up with the public sector procurement systems, and considering that about ten percent of the gross domestic product (GDP) must pass through the procurement systems. It then became imperative that the public procurement systems must be reformed if Nigeria must achieve economic growth and developmental strides which is the reason for this study.
1.3 OBJECTIVES OF THE STUDY
The following are the objectives of this study:
To examine the problems of the 2007 public procurement act on transparency and accountability. To determine solutions that will ensure transparency and accountability in the 2007 public procurement act. To identify the factors limiting the implementation of the 2007 public procurement act.
1.4 RESEARCH QUESTIONS
What are the problems of the 2007 public procurement act on transparency and accountability? What are the solutions that will ensure transparency and accountability in the 2007 public procurement act? What are the factors limiting the implementation of the 2007 public procurement act?
1.6 SIGNIFICANCE OF THE STUDY
The following are the significance of this study:
The outcome of this study will educate the general public especially the political stakeholders on the benefits accruable from the 2007 procurement act with emphasis on its problem and solution in ensuring transparency and accountability in executing public contracts. This research will be a contribution to the body of literature in the area of the effect of personality trait on student’s academic performance, thereby constituting the empirical literature for future research in the subject area.
1.7 SCOPE/LIMITATIONS OF THE STUDY
This study will cover the details, problems and solutions to the 2007 procurement act in ensuring transparency and accountability in implementing the public contract.
LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted to the research work
Aduba GT (2004). Good Governance and Public Procurement: AnAppraisal of the Budget Monitoring and Price Intelligence Unit” (BMPIU), Abuja: Heinrich Boll Foundation.
Emeka ME (2009).Due Process as an imperative to Public Procurement in raising integrity standard in the public service.Workshop organized by NOA Headquarters. at the Arewa House,Kaduna, 7th–8thDecember 2009
Ezekwesili O (2004). Welcome Speech at thePublic Procurement workshop, held at Abuja, Nigeria.
Federal Ministry of Finance (2008).Ref. No. Try/A4&B4/2008, OAGF/CAD/026/Vol.11/439, “Guidelines for Due Process Certification of Contracts and Application for Release of Funds from Central Capital Account to the Capital Accounts of Ministries, Extra-ministerial Offices and Agencies at the Central Bank of Nigeria, Abuja
Olowu D (1993).The African Economic Crisis and the Governance Question in Politics for Growth and Development in Africa.San Francesco, ICS Press.
World Bank (1996).Nigeria, Poverty in the Midst of Plenty: The Challenge of Growth with Inclusion.Population and human Resources Division, Western Africa Department, Africa Region.
5.1 SUMMARY OF FINDINGS
The purpose of this study is to investigate the Problems and Solutions of the 2007 Public Procurement Act on Transparency and Accountability.
In this study, a survey research design was adopted, the population comprises all the members of staff of the federal ministry of budget and national planning, a simple random sampling technique was used to select 28 senior members of staff of the Federal Ministry of Budget and National Planningfor the study and a questionnaire was the instrument for data collection.
The following objectives were used for the study:
1. To examine the problems of the 2007 public procurement act on transparency and accountability.
2. To determine solutions that will ensure transparency and accountability in the 2007 public procurement act.
3. To identify the factors limiting the implementation of the 2007 public procurement act.
The findings of the study revealed the following:
1. the problems of the 2007 public procurement Act on transparency and accounting include but not limited to corruption; purchaser’s over familiarity with the rules; political interference; lack of professionalism by the officials and lack of transparency and accountability of the process.
2. that the solutions that will ensure transparency and accountability in the 2007 public procurement Act include that the government should fight corruption in the systems; that all the stakeholders should be made to follow the laid down rules in procurement; that there should be no political interference and that the procurement process should be made transparent.
3. the factors limiting the full implementation of the 2007 public procurement act include but not limited to the limited transparency of procurement processes of MDA’s; refusal of the National Assembly to submit to the provisions of the Act and regulation by the Public Procurement Bureau; low morals in the service; lack of political will to proceed against some violators of the Act and integrity of personnel and failure of the MDAs to grant access to information to requesters of information.
4. the procurement act has been fully implemented in Nigeria.
5.2 CONCLUSION AND RECOMMENDATION
This study was meant to investigate the Problems and Solutions of the 2007 Public Procurement Act on Transparency and Accountability.
The most prevalent challenges in the public procurement process is the selection of the most suitable procurement methods, with appropriate justifications, record keeping is also a major challenge in the sense that very few public entities have designated records management officers; therefore public procurement entities in Nigeria need to improve on record keeping, data and documentation controls and contract management processes and follow up mechanism have to be established by the oversight authority to ensure that firms are conforming to the existing procurement laws.
The findings of this study revealed the factors limiting the full implementation of the 2007 public procurement act to include but not limited to the limited transparency of procurement processes of MDA’s; refusal of the National Assembly to submit to the provisions of the Act and regulation by the Public Procurement Bureau; low morals in the service; lack of political will to proceed against some violators of the Act and integrity of personnel and failure of the MDAs to grant access to information to requesters of information.
The Due Process Mechanism as a model application of “Best Practice” in procurement system has become a key reform agenda in the management of public finance. It ensures that requisite standards are maintained, while transparency, accountability and the elimination of wastes are guaranteed in contrast to the old procurement system that was not integrity-driven. By its introduction, appropriate level of respect for rules, regulations and procedures relating to the management of public funds are institutionalized. It was revealed that there were numerous benefits and dividends of the policy which had accrued to Nigeria over the years since its inception in 2001.
The feedback from the implementation process has generated diverse mixed reactions among Nigerians. Even in government cycle, it has not really turned the way it professed by its vision and mission in practice. The system is still fraught with a gaping hole of public distrust. Nevertheless, this should not raise unnecessary alarms as per the beauty of the policy, considering a great deal of dividends it has achieved for Nigeria in developmental and governance processes. The truth its critics should know is that no system perfects the world-over. Time is the healer of wound, the perceived lapses and abuses in the policy today shall be overcome with time. Arising from the challenges highlighted above, the following recommendations are offered:
1. The government should fight corruption in the systems; that all the stakeholders should be made to follow the laid down rules in procurement; that there should be no political interference and that the procurement process should be made transparent.
2. There is need to review existing laws with a view of encouraging suppliers to perform better and foster formation of long term relationships.
3. The quality of public administration must be improved and accountable, which is an integral part of good governance as well.
4. Promoting transparency and accountability, capable and competent public administration, and the rule of law must be at the forefront of development policies. Policy planning and decision-making are the key concern to public administration.
5. There is need for the BPP to vigorously train and retrain the core procurement staff to acquire necessary procurement skills, competence and professionalism in order to update their knowledge in the contemporary procurement “Best Practices”. Adequate equipment should be provided to the staff to enable them effectively and efficiently discharge their responsibilities.
6. The Nigerian government should urgently address the unduly long bureaucracies to complete a procurement cycle. Thus, the BPP should fix time frame from the start to completion or certification with respect to project types. This could make the people to predict the expected time frame for projects and payment certification which would restore trust in the system or Bureau.
7. The National Assembly should sincerely exercise its constitutional power of oversight functions without political compromise and pecuniary benefits to hold the executive arm of government to standards of accountability, transparency and procurement “Best Practices”.
In summary, the lapses presently being witnessed in the implementation of the Policy should not be completely misunderstood or misrepresented, in realization of the benefits it has impacted on governance and developmental processes in Nigeria. Thus, the critics should exercise caution and restraint with the government as the policy is one of the best reform initiated in Nigeria. With time, the transformation process in the Nigeria’s Procurement System would get its act together..