by Salisu Uba
Asiwaju Bola Ahmed Tinubu has won Nigeria’s presidential election, as declared by the electoral commission, INEC. As a professional and scholar who works on procurement transformation at an international level, I put together this piece on why President-elect Tinubu and his administration must transform public procurement in Nigeria. This is in order to effectively drive value for money spent on public projects, cut down on corruption, and make capital project spending more transparent. Although none of these were part of what he said he would do when he ran for the office, I will discuss the significance of public procurement and why the incoming government should transform how public procurement and contracts are conducted.
Nigeria implemented public procurement reforms for the first time in a response to a World Bank Country Procurement Assessment survey conducted in 1999. This survey found a link between poor/weak government procurement procedures and corruption. As a result, the Budget Monitoring and Price Intelligent Unit (BMPIU), also known as Due Process, was formed in 2001 to carry out the Federal Government’s Public Procurement Reform Policy. The goal was to reduce open violations of known rules, processes, and standards in the award and execution of government contracts. Transparency and accountability issues necessitated the reforms henceforth.
The Bureau of Public Procurement (BPP) was established as the regulatory authority in charge of public procurement monitoring and oversight under the Public Procurement Act (PPA) of 2007. The Public Procurement Act (PPA) was enacted to provide a legal framework for public procurement and to promote transparency, accountability, and efficiency in the procurement process. However, several factors have hampered the PPA’s full implementation, including a lack of political will, insufficient guidelines, a lack of capacity among procurement officials, and resistance from Ministries, Departments, and Agencies (MDAs). As a result of the inability to fully implement the PPA, Nigerian procurement practices have suffered significantly, including a lack of transparency and accountability, inefficiency and delays, insufficient competition, and limited SMEs participation, among other things.
Corruption is one of the most serious issues confronting Nigerian public procurement. The procurement process’s lack of transparency and accountability has resulted in cases of embezzlement, fraud, and misappropriation of funds, undermining the procurement system’s credibility. These have compounded effects on project delivery to specifications, cost, and timelines as well as standards and sustainability.
Nigeria’s procurement laws and regulations are somewhat outdated and in need of reforms. This deficiency has created gaps in the procurement process that are being exploited by unscrupulous actors. For example, innovation in areas like aggregated procurement, economies of scale, centralised purchasing, and supplier platforms and the use of technology are initiatives that could be introduced to transform our public procurement.
Another issue is a lack of capacity, as many procurement professionals in the public sector lack the necessary skills and training to carry out their responsibilities effectively. As a result, there is a misunderstanding of procurement best practices and procedures, which has further dwindled procurement efficiency and effectiveness. The two-week BPP training programme is the most common approach to recruiting and converting people into procurement, and it is arguably not comparable to the best practice route to becoming professionalised as offered by institutes around the world i.e., CIPS.
Now, the current administration should be aware that the procurement process’s lack of transparency and accountability has eroded public trust in government institutions. Mismanagement of public funds has led to a scarcity of resources for critical public services and infrastructure. Furthermore, procurement inefficiencies have resulted in project delays, impeding the country’s development and growth. It has been difficult to hold those responsible for procurement malpractice accountable due to insufficient compliance with the legal framework, exacerbating the problem. Addressing public procurement issues in Nigeria is critical for any government to achieve national development in infrastructure, healthcare, education, and many more.
Despite these obvious challenges, according to the most recent update from Open Contracting Nigeria as of October 2021, almost all Nigerian states have implemented procurement reforms, with 26 states subscribed to open contracting portals for publishing some form of contracting data. Besides, 32 states are implementing new e-procurement systems, which is a positive step. The Federal Government, on the other hand, is conspicuously absent. I am aware that the Federal Executive Council (FEC) has approved N1.6 billion for the establishment of an e-Government Procurement Platform in October 2020, according to the Guardian. Overall, several challenges exist in Nigeria’s public procurement system that must be addressed in order to promote transparency, accountability, and efficiency. While progress has been made at the state level, the federal government must act to strengthen the system and restore public trust.
Another intriguing point to consider is the role of the FEC in public procurement. The FEC, which is chaired by the President and the membership of the Vice President, and Ministers, is the highest body in charge of approval and awarding of contracts. Contracts worth more than N500 million are usually approved by the FEC, though the amount varies depending on the type of activity to be procured. According to Femi Falana (SAN), a well-known human rights activist and lawyer, the FEC’s act of awarding contracts is unconstitutional because no law grants it such authority. Arguably, the FEC has no authority to award contracts on a weekly basis; that is solely the responsibility of the Public Procurement Bureau (BPP), which is overseen by the National Council on Public Procurement. However, successive regimes have failed to establish the council, which is an eleven-member body comprised of five government representatives and six part-time professionals.
Therefore, it is worthwhile to revisit the National Council on Public Procurement (NCPP), a Nigerian independent body charged with overseeing the implementation of the Public Procurement Act (PPA). The council is expected to play a critical role in the implementation of PPA and in promoting procurement transparency, accountability, and efficiency. The formation of the council may result in improved procurement processes due to increased oversight and regulation of procurement activities. This could lead to more efficient and effective procurement processes, resulting in cost savings, improved service delivery, and increased public trust in government as well as innovative initiatives.
The establishment of the NCPP could also help to reduce procurement corruption by ensuring that all procurement activities are carried out in accordance with the PPA. This would improve transparency and accountability, reduce the possibility of fraud and embezzlement, and increase public trust in respective MDAs leaders. Furthermore, because more suppliers and contractors will be able to participate in the bidding process, the procurement process will become more competitive. This could result in better value for money and higher-quality goods and services.
Overall, the NCPP’s establishment may simplify and aid the development of local businesses by providing them with access to procurement opportunities. This would contribute to economic growth and job creation. However, all governments since 2007 have ignored the establishment of the NCPP, including President Muhammadu Buhari’s outgoing administration, which has promised to combat corruption. President Buhari’s administration, in particular, promised to establish the National Council for Public Procurement but did not do so during his first term in office. Instead, in 2019, he issued an Executive Order (EO5) on Project Planning and Execution, Promotion of Nigerian Content in Contracts, and Science, Engineering, and Technology, which included provisions for the formation of the National Council on Public Procurement.
In September 2020, the Nigerian government was chastised by the Socio-Economic Rights and Accountability Project (SERAP) for failing to establish the National Council on Public Procurement, which is required by law to oversee public procurement in the country. SERAP urged the government to form the council as soon as possible in order to increase transparency and accountability in public procurement. In response to criticism about the council’s delayed formation, the BPP stated in 2019 that the reason for the delay was the need to consult with stakeholders and ensure that the council was properly constituted and fully functional. It appears that the National Council on Public Procurement has not yet been formed, even though the administration will end in a few months. There has been no recent public declaration.
Now, what is the task ahead of the incoming administration on public procurement reforms? There can be no doubt the new government will prioritise public procurement reforms for Nigeria’s infrastructure, education, health, and socioeconomic developments. First, it is imperative for the incoming government to consider the establishment of NCPP as a step to demonstrate its willingness to transform public procurement, and the following should be considered:
To maintain independence, the NCPP should be a self-contained entity free of political interference. This would help to ensure that the council’s mandate is carried out effectively and without fear of retaliation.
Recruit qualified members into the council, the NCPP should be led by qualified leaders with procurement, commercial, legal, and financial experience. This would ensure that the council has the necessary capacity, wider skills, and knowledge to effectively carry out its mandate. Nigeria is fortunate to have produced two CIPS Global Presidents, the only country in Africa to hold such a prestigious position.
Incorporate private-sector ideas into government contracting and procurement processes and procedures. This could be led by the establishment of a Central Coordinating and Commercial Agency in charge of facilitating public procurement. The BPP is responsible for enforcing and establishing standards for compliance with the Public Procurement Act. The new agency will facilitate public procurement, so I do not believe it is a duplication of efforts.
Digital transformation in procurement and contract management functions: Investing in technologies such as cloud for automation, artificial intelligence, and blockchain will streamline processes, increase efficiency, and reduce costs. Nothing can be achieved without the use of the right technology and tools.
Create an effective ecosystem for supply chain management by collaborating with all stakeholders, including suppliers through different models not only through traditional Public-Private Partnerships, but it will also create open access to government projects and wider economic benefits.
Invest in education and training to develop the skills and competencies required for a strong procurement and supply chain workforce. Education and training programmes for procurement professionals, government departments, and other specialists are critical.
Sustainability should be prioritised for ethical and environmental reasons. The importance of sustainable procurement and supply chain practices is growing. Prioritising sustainability and implementing policies and initiatives that promote sustainable procurement, circular procurement and supply chain practices are critical to be embedded into the reforms.
For the incoming government, it is imperative to recognise some governments that developed strategic and value-driven public procurement systems. Singapore, for example, has consistently been ranked as one of the world’s top public procurement countries, with a procurement system widely regarded as one of the most efficient and effective in the world. Singapore, for example, has a strong legal framework and governance structure to support its public procurement system. This includes a strong anti-corruption framework in procurement and a centralised procurement agency, the Government Procurement Services (GPS), which is responsible for the procurement of goods and services by all government agencies. In its procurement processes, Singapore places a strong emphasis on achieving value for money. This is accomplished through competitive bidding processes, benchmarking against international standards, and a focus on total cost of ownership as opposed to just the purchase price.
Singapore has embraced technology in its procurement processes, using e-procurement systems, data analytics, and other digital tools to streamline processes and improve transparency and accountability. The procurement system in Singapore is distinguished by a collaborative approach among government agencies, suppliers, and other stakeholders. This has resulted in the formation of strong relationships and partnerships, which has resulted in better outcomes for all parties involved. The strategic and value-driven public procurement system in Singapore is the result of several factors, including strong governance and legal frameworks, a focus on achieving value for money, the use of technology, and a collaborative approach. These factors have helped to make Singapore’s procurement system one of the most efficient and effective in the world.
The United Kingdom has a robust public procurement system that has recently undergone significant reform. The Crown Commercial Service (CCS) manages centralised procurement by procuring goods and services for all government departments in the United Kingdom. This has resulted in streamlined procurement processes and cost savings due to economies of scale.
Another important factor is technology adoption, with the United Kingdom embracing technology in its procurement processes through the use of e-procurement systems, online marketplaces, and data analytics to streamline procurement processes and improve transparency and efficiency. In its procurement processes, the United Kingdom places a strong emphasis on achieving value for money, which is accomplished through competitive bidding processes, benchmarking against industry standards, and a focus on total cost of ownership rather than just the purchase price.
Collaboration and engagement are also prioritised, with the government, suppliers, and other stakeholders working together. This has resulted in the formation of strong relationships and partnerships, which has resulted in better outcomes for all parties involved. By instituting a common procurement vocabulary, standard procurement documents, and simplified procedures for low-value contracts, the United Kingdom has simplified and standardised its procurement processes. This has decreased complexity while increasing efficiency.
Therefore, for the new administration, these accomplishments would be impossible to achieve without the strategic guidance of a globally recognised procurement and supply excellence organisation. The Chartered Institute of Procurement and Supply (CIPS), it has already played a significant role in Nigeria’s health sector procurement, and I believe that the new administration can benefit greatly from CIPS’s expertise in supporting procurement reforms.
CIPS is a professional organisation that promotes best practices in procurement and supply chain management globally. CIPS can assist the new government of Nigeria in establishing public procurement standards in a variety of ways, including trainings and certifications, the development of guidelines and standards, access to knowledge and resources, and advocacy for best practices. CIPS has already benefited several other countries, including the United Kingdom, Australia, and South Africa, where it has played an important role in establishing procurement standards, building capacity and expertise, and promoting best practices.
However, transforming public procurement in Nigeria will necessitate the participation of a diverse set of stakeholders, many of whom are already involved. I believe that the new government will play a critical role in transforming public procurement in order to achieve the desired developments in critical sectors of the economy. The new government should provide political leadership and support for procurement reforms, as well as ensure that adequate resources and infrastructure are available to support effective procurement technology and human capital.
Furthermore, they should be in charge of enforcing procurement laws and regulations as well as holding procurement officials accountable for their actions. Procurement professionals are in charge of putting procurement processes in place and ensuring that goods and services are obtained in a transparent, fair, and efficient manner. Procurement professionals must be properly trained and qualified, and they must follow strict ethical and professional standards. Suppliers are important in public procurement because they provide the goods and services that government agencies need to function.
Suppliers should be chosen through an open and competitive bidding process, and they should be held to high quality, performance, and ethical standards. Civil society organisations are vital in promoting transparency and accountability in public procurement. They can act as watchdogs, monitoring procurement processes and advocating for reforms to improve transparency and reduce corruption. International organisations such as the World Bank and the United Nations Development Programme (UNDP) should support procurement reforms and initiatives through technical assistance and funding.
Lastly, I wish the incoming administration a prosperous term in office, as I will continue to encourage passionately for best practices in policy, governance, and capacity development in public procurement and supply chains.
Salisu Uba, FCIPS, is based in the United Kingdom and is a procurement and supply chain leader and a fellow (FCIPS) of the Chartered Institute of Procurement and Supply (CIPS). He founded NatQuest, a supply chain tech firm based in Nigeria and the United Kingdom. He can be reached via: https://www.linkedin.com/in/salisuuba/