A STUDY INTO THE PROBLEMS AND SOLUTION OF THE 2007 PUBLIC PROCUREMENT ACT ON TRANSPARENCY AND ACCOUNTABILITY

CHAPTER ONE

INTRODUCTION

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 problems and solutions of the 2007 public procurement Act on transparency and accountability.

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.

 OBJECTIVES OF THE STUDY

The following are the objectives of this 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.

RESEARCH QUESTIONS

1.     What are the problems of the 2007 public procurement act on transparency and accountability? 2.     What are the solutions that will ensure transparency and accountability in the 2007 public procurement act? 3.     What are the factors limiting the implementation of the 2007 public procurement act?

SIGNIFICANCE OF THE STUDY

The following are the significance of this study: 1.     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.

2.     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.

 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 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 for the research work. REFERENCES

Aduba GT (2004). Good Governance and Public Procurement: An Appraisal 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 –8th December 2009 Ezekwesili O (2004). Welcome Speech at the Public 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.

A STUDY INTO THE PROBLEMS AND SOLUTION OF THE 2007 PUBLIC PROCUREMENT ACT ON TRANSPARENCY AND ACCOUNTABILITY