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Weak public procurement breeds corruption

By Emmanuel Onwubiko
07 March 2018   |   4:20 am
One area of Nigeria’s public life that has yet to receive the adequate legal frameworks and policy guidelines to check financial leakages in the management of public finance...

President Muhammadu Buhari. PHOTO ;DON EMMERT / AFP

One area of Nigeria’s public life that has yet to receive the adequate legal frameworks and policy guidelines to check financial leakages in the management of public finance and in the funding of public projects is the procurement sector.

Not long ago, an official of the Independent Corrupt Practices and Allied offences Commission, Dr. Anthony Onyilimba, stated that 60 per cent of corruption cases are procurement related.

In the last few years of the operations of the Economic and Financial Crimes Commission, over 75 per cent of the cases of graft against public officials are procurement related. So, why has this hydra-headed monster refused to die? Are there bad eggs within EFCC and ICPC that are aiding and abetting these public procurement fraudsters? Surely, there are bad eggs in both anti-graft bodies that play the role of devil’s advocate.

In most states, public utilities are in bad shape due to weak implementation of procurement laws. In the last few months, the Directors General of Securities and Exchange Commission, Mounir Gwarzo, and that of the National Health Insurance Scheme, Dr. Usman Yusuf, were suspended for alleged financial recklessness relating to violations of procurement law.

The poor state of procurement over the last 50 years is the reason for the mind-blowing corruption amongst public officials.

The major test of determining the indices of good governance, respect and strict adherence to the principle of transparency and accountability is the availability of empirical data to concretely establish the commitment or otherwise of public officials to the laws and statutes guiding the procurement and execution of public utilities or projects which basically and fundamentally are meant to serve public good.

The above mentioned fact finds legal bearing in section 15(5) of the constitution of the Federal Republic of Nigeria of 1999 (as amended) which states that: “The state shall abolish all corrupt practices and abuse of power.”

But our political history is replete with pragmatic evidences that points to the wanton disrespect to the available body of laws that safeguards public procurements from abuses and most especially since the year 2007 when the Bureau of public procurement Act was institutionalized and domiciled as a national legislation.

The current administration has gone further in the abuses rained against public procurement Act.

The Director General/Executive Secretary of the National Health insurance scheme Usman Yusuf who was kicked out by the health minister for alleged corruption relating to procurement was reinstated by the government only because the man is a distant cousin of President Muhammadu Buhari.

But the legal frameworks on public procurement may be weak but there is indeed a national legislation on public procurement. What is not clear is why the various heads of governments bring up innovative ways of circumventing and breaching the procurement Act so viciously to an extent that government official will claim to have spent several billions for specific projects but such projects exist only in the criminal imagination of such a false claimant. Bureau of Public Procurement is also badly administered even as ministries and agencies bribe the officials to obtain fraudulent exemption and/or approval certificates of jobs that they never intended to do. Recently the Nigerian Civil Defence Corp presented a subhead of N5 billion to buy nuclear weaponry even when Nigeria has no nuclear weaponised architecture.

In writing, the following are what that institution (BPP) was established to do as can be found in its website.

The Public Procurement Act 2007 established the Bureau of Public Procurement as the regulatory authority responsible for the monitoring and oversight of public procurement, harmonizing the existing government policies and practices by regulating, setting standards and developing the legal framework and professional capacity for public procurement in Nigeria.

The vision of the BPP is as follows:
“Building and sustaining an efficient country procurement system that meets international best practices.”

The Mission is “to professionalize the process of procurement that ensures Transparency, Efficiency, Competition, Integrity and Value for Money to support National Growth and Development.”

The objectives of establishing the Bureau of Public Procurement are; The harmonization of existing government policies and practices on public procurement and ensure probity, accountability and transparency in the procurement process; The establishment of pricing standards and benchmarks; Ensuring the application of fair, competitive, transparent, value-for-money standards and practices for the procurement and disposal of public assets; and The attainment of transparency, competitiveness, cost effectiveness and professionalism in the public sector procurement system.

The Core Objectives are as follows:
Economic Efficiency; Competition – Providing level playing ground for all strata of bidders; Value for money; Transparency.
But these legal provisions that ought to guide Nigerian public officials on how to follow global best practices in going about the functions of public procurements are grossly abused beginning from the failure on the part of the presidency to inaugurate a functional governing council to administer and monitor awards of contracts.

Right from the inception of the Bureau of public procurement (BPP) with the signing of the law and the inauguration of the offices for that institution, it would seem that the succeeding administrations have always set out to fundamentally weaken and undermine the BPP (Bureau of public procurement).

The violation of the critical segments of this law makes any claim of probity on the part of the President highly unsustainable and unprovable.

For the avoidance of doubts, Part one of the public procurement Act, of 2007 is on the establishment of National Council on public procurement and states as follows: 1 (1) “There is established the National Council on Public Procurement (in this Act referred to as “the Council”); (2) The Council shall consist of: a) the Minister of Finance as Chairman; b) the Attorney-General and Minister of Justice of the Federation; c) the Secretary to the Government of the Federation; d) the Head of Service of the Federation; e) Economic Adviser to the President; f) Six part-time members to represent: i. Nigeria Institute of Purchasing and Supply Management; ii. Nigeria Bar Association; iii. Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture; iv. Nigeria Society of Engineers; v. Civil Society; vi. The Media and g) the Director-General of the Bureau who shall be the secretary of the Council.

The law goes further to state that (3) “Notwithstanding the provisions of Section (2), the Council; may co-opt any person to attend its meeting but the person so co-opted shall not have a casting vote or be counted towards quorum. (4) The Chairman and other members of the Council shall be appointed by the President. (5) Subjects to subsection (2) of this Section, a member of the Council being: a) the holder of an elective office under the Constitution of Nigeria, shall hold office for a period he remains so elected and no more; and b) the Director-General of the Bureau, shall hold office on such terms and conditions as may be specified in his letter of appointment.

“(2) The Council shall; a) consider, approve and amend the monetary and prior review thresholds for the application of the provisions of this Act by procuring entities; b) consider and approve policies on public procurement; c) approve the appointment of the Directors of the Bureau; d) receive and consider, for approval, the audited accounts of the Bureau of Public Procurement; and e) approve changes in the procurement process to adapt to improvements in modern technology; f) give such other directives and perform such other functions as may be necessary to achieves the objectives of this Act.”

These fundamental aspects of the procurement Act have been violated with reckless abandon and in the last three years public procurement corruption has skyrocketed to an unimaginable dimension.

A commentator has written about this astronomic rise in procurement corruption thus: “Again, Ministries, Departments and Agencies of government are the most culpable when the issue is procurement abuses. From Nigeria Television Authority (NTA) through the Ministry of Health, to Universal Basic Education Commission (UBEC) the story is the same of the violations of the Public Procurement Act 2007 by either the total embezzlement and sharing of funds for the execution of the capital component of their annual budgets; over inflation of actual contract costs or award of huge contracts through poor procurement processes”.

“The Public Procurement Acts 2007 has spelt out clearly modalities for the award of public contracts; therefore any procurement that failed to meet the standards set out in the procurement law constitutes an abuse of due process in the new procurement regime”.

“From the foregoing and the experiences of the country since independence, It is clear that the Nigerian people will not know good governance nor accountability and probity, until those who work in the public service and the heads of Ministries, Departments and Agencies (MDAs) acquire the knowledge of fiscal responsibility, due procurement process and accountability in public finance and resource use; or those who have these knowledge come to head and work with these institutions of governance in Nigeria. It is in ministries, Departments and Agencies that Ministers and their civil service counterparts at the end of every fiscal year, in which major projects that would ordinarily have served the needs of the people are not executed; rather huge resources appropriated for these projects are shared among individuals who work in the MDA’s”.

I had earlier stated that virtually all previous and the current presidents have failed to obey the tenets of the public procurement Act by refusing to inaugurate a council so the opaque and corrupt practices of awarding of multibillion Naira contracts for public procurements are still the order of the day with the Federal Executive Council acting as contracts awarding platform.

The public procurement scandal that was exposed in the Nigerian National Petroleum Corporation by the minister of state, Dr Ibe Kachikwu, to the tune of $25 billion USD is systematically being hidden under the carpets by President Muhammadu Buhari.

The recently sacked Secretary to Government of the Federation, Babachir Lawal, was indicted for alleged procurement fraud of nearly N1 billion in the management of reliefs for internally displaced people in the North East of Nigeria. These acts of public procurement corruption has worsened poverty amongst Nigerians and in the recent time there was a World hunger rating which placed Nigeria as one of the nations with the most poverty stricken populations and Nigeria ranked higher than India which has the largest World’s human population of over 1 billion people.
Perhaps, the recently issued corruption perception index by transparency international in which Nigeria ranked as one of the most corrupt nation’s of the World in the year 2018 goes to show the rot brought about by the gross abuses that ministers and agencies of government commit in the area of public procurements.

Finance and Health ministers by suspending high ranking officials under them for monumental heist of public fund have confirmed that public procurement corruption has worsened since the last three years. The corruption in NNPC was linked to a top Presidency official. Procurement corruption is now wearing official stamp of the Presidency, one may argue.

Adherence to public procurement Act has also taken the back seat since the emergence of the current administration to the disappointment of most observers who had been sold the propaganda that the current president is a man of integrity.
Transparency international rightly stated that: “Corruption involves behavior on the part of officials in the public sector whether politicians or civil servants in which they improperly and unlawfully enrich themselves or those close to them by the misuse of the public power entrusted to them.”

It is for the sophisticated nature of corruption currently in place amongst top government officials that Nigerians are seriously not satisfied with the bogus claims by such officials like the information and finance ministers that the current government had spent several Trillions to fix the collapsed public infrastructures, which in any event are still dilapidated and dysfunctional.

The practical facts that stare most Nigerians in the face is the total collapse of such critical infrastructures like public federal and state Highways; educational and health facilities including the Presidential clinic which was recently reported not to have the commonest medications for the benefit of patients due to high rate of procurement corruption.

Onwubiko is head of the Human Rights Writers Association of Nigeria (HURIWA)