How exactly does the public procurement process work here in Nigeria?Before I do that, let me give you a little bit of perspective. Procurement reform was initiated in Nigeria in 2001 with the democratic government. With the assistance of the World Bank and the IMF (International Monetary Fund) the reform was initiated as a means of addressing the shortcomings of the old procurement system. Before, contracts were given based on who you knew and there was an issue with inflated contractual costs and a lack of transparency. On many occasions projects were undertaken because they were contractor-driven, depending on who the contractor knew in Government.
So when democracy was restored in the country in 1999 and with the commitment of the government at that time, we needed to conduct a procurement report with the assistance of the World Bank. They recommended that Nigeria needed to review its entire procurement system with a view to providing the institutional and regulatory framework which we should standardise. That led to the establishment of an office in 2001 charged with the responsibility to vet all procurement and after many public awareness campaigns and studies a draft bill was launched in 2003. It took until 2007 for it to go through all the approval processes and it was passed into law in 2007. This Public Procurement Law sets the basis for third parties wanting to do business with government, and the rules they must comply with and the processes. You must engage in procurement planning before hand and then integrate it into the national plan. Then you need to do a needs assessment. You must put the tender in the public domain through an advert with clear criteria, upon which you will base your decision.
Once that is done, you must involve civil society organisations and professional associations to come and observe the processes. They are at liberty to report their comments and opinions on the process to see whether it is right or not. You then evaluate your tenders and make the necessary recommendations. Beyond a particular threshold of $10m for works, the
Bureau of Public Procurement (
BPP) then looks at the processes, and if we say that the processes are OK, then they can proceed with the contracts. BPP can say no and we can change the recommendation of the agency and say that on the basis of these facts, they have invalidated X, Y and Z. If corruption is detected the law provides both administrative and criminal provisions that will enable us to sanction the officers that are involved. It also enables us to do some criminal prosecutions – like if you collude and influence the outcome of the bid, the law allows us to recommend individuals for criminal investigation. As I am talking to you, 15 to 20 people are being investigated for deliberately tampering with the bid documents. If you do this, you can go to jail for a minimum of 5 years and a maximum of 10 years. The law is so stringent on this. That is what procurement is all about.
However, the law does not apply to national security procurement as you would expect.
Is that because of the urgency in securing such contracts or the nature of the contract?No, it is because of the security nature, because we do not want to expose certain information to the public. We do not want to advertise the military capability of the nation. No country in the world does that.
In the study you previously mentioned which was done in collaborations with the World Bank and IMF it was noted that for every 1 Naira spent, 60k Naira was lost to corruption. Last year however BPP prevented 216 billion Naira from being dissipated through government contracts. This is clearly a big improvement. Yes and since the introduction of the reform, apart from a decrease in the costs of projects, more and more people are winning contracts without necessarily having to know anybody. That is more important than even the reduction in the costs in projects. Confidence is beginning to be restored in public advertisement. We have got so many people who are writing to say that they did not know anybody in government and they responded to an advertisement and followed the rules and they were surprised that they were invited and were successful. That is the most important aspect of the reform – it is creating a competitive environment where people will know that if they do well and they are competitive in terms of quality and cost, they have the chance to get a job without having to bribe anyone or know anyone.
What would you say to encourage further state level encouragement to adapt procurement law?Nigeria operates a federal system where the federal government does not have the power to legislate for the states. So this is a federal law, but we are working with states to make them adopt the law. About 10 state governments have enacted a procurement law with some modifications and now have some basic procedures.
Naturally in this case the losers of such reform will be against the reform, whereas the winners will be for it. The losers are the very strong political and business elites who benefit from the old order. But the ordinary people who did not benefit from the old order are the winners, and they are happy with the law.
How have foreign contractors/investors responded to the improving procurement procedures in the country?Most of them do not have any problems, especially when they play by the rules. Because of our transparency the winner is very clear and the losers can see why he lost. The selection process is made public and whoever has lost will see why they lost and whoever has won will see why. With this process those who have lost the first time have a higher chance of winning the second time on many occasions because they will see where they went wrong.
BPP and its efforts certainly create a positive image for the country and government of Nigeria. Is this effectively conveyed to the international community?We have been engaging with the national agencies and embassies as well as the Chamber of Commerce recently. With the support of the Government, we have been able to regain their confidence through media interaction and sending out our reports and our certificates and publications. We send them all over the country and this lets people know that Nigeria is working. Yesterday the Canadian Commissioner for Freedom of Information was in Nigeria. All the publications we have are in every embassy in Nigeria. The law requires ministries and agencies to invite civil society organisations to come and observe the process. We also sponsor civil society organisations to serve as whistle blowers on our behalf in our agencies. That is part of our strategy to get into the media.
As the Director General of the BPP since 2007 and having learnt and experienced so much in the Nigerian public procurement process, looking towards the future what are your ambitions for this agency?I aim to develop procurement in the country to the extent where a procurement officer will look a minister in the eye and tell him that he cannot do what the minister is asking him to do because it is against the law.
And finally is there any particular message you would like to send directly to our readers, whether it be about Nigeria or the BPP?I would like to let the business community know that a lot of reforms are taking place in Nigeria. They need to come over to Nigeria to see the amount of progress that has been made in building institutions that will instil confidence in them. If they come they will never regret coming here because there is nowhere in the world where you can make as much profit as you can here. There is a lot of potential and the Government is setting up institutions to make that happen. Procurement reform is one of the key institutions that the Government has put in place to make that happen.
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