Corruption in Public Procurement

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Isa Ali Musa

Public procurement refers to the purchase by governments and state-owned enterprises of goods, services, and works. As public procurement accounts for a substantial portion of the taxpayers’ money, governments are expected to carry it out efficiently and with high standards of conduct in order to ensure high quality of service delivery and safeguard the public interest.

In Nigeria, public procurement is one of the government activities most vulnerable to corruption. In addition to the volume of transactions and the financial interests at stake, corruption risks are exacerbated by the complexity of the process, the close interaction between public officials and businesses, and the multitude of stakeholders. Various types of corrupt acts may exploit these vulnerabilities, such as embezzlement, undue influence in the needs assessment, bribery of public officials involved in the award process, or fraud in bid evaluations, invoices, or contractual obligations.

Nigeria has lost several hundred billion Naira over the last decade due to flagrant abuse of procedures for the award of public contracts, inflation of contracts, lack of transparency, lack of competency-based evaluation, and lack of merit, which is the fundamental criteria for the awarding of public contracts. This finding has made urgent reform of the procurement system imperative if Nigeria is to reduce the large-scale corruption and waste that has reduced the efficiency of the Nigerian public sector. These reasons brought about the birth of the Bureau of Public Procurement (BPP) in 2001.

Despite passing the Public Procurement Act 2007, public procurement is one area of Nigeria’s public system that has yet to receive adequate legal frameworks and policy guidelines to check financial leakages in the management of public finance and in the funding of public projects. Corruption in public procurement can both occur at the national and sub-national levels. On the one hand, decentralization may narrow the scope for corruption, in line with the assumption that politicians and public officials at subnational levels are more accountable to the citizens they serve. The Independent Corrupt Practices and Other Related Offences Commission (ICPC) says 70% of corruption cases in Nigeria are procurement-oriented (Olyilimba, 2016). The direct costs of corruption include loss of public funds through misallocations or higher expenses and lower quality of goods, services, and works. Those paying the bribes seek to recover their money by inflating prices, billing for work not performed, failing to meet contract standards, reducing the quality of work, or using inferior materials, in the case of public procurement of works. This results in exaggerated costs and a decrease in quality.

 

Solutions to Curb Corruption In Public Procurement

As integrity risks exist throughout the public procurement process, a holistic approach for risk mitigation and corruption prevention is needed. Focusing integrity measures solely on one step in the process may increase risks in other stages. Similarly, addressing only one type of risk may give leeway to integrity violations through other mechanisms. For example, administrative compliance measures in the bidding phase do not root out the risk for political interference in the identification of needs. Likewise, asset declarations for procurement officials may not sufficiently protect against bid rigging or petty fraud.

In addition, the following Legal Frameworks and institutions should be strengthened—the Budget Monitoring and Price Intelligent Unit (BMPIU) and the Public Procurement Act 2007. Furthermore, integrity, transparency, stakeholder participation, accessibility, e-procurement, oversight, and control should be promoted.

In conclusion, more awareness must be created about the importance of public procurement and the dangers of corruption to national economic development.  Also, more attention should be paid to the procurement process and legislation in Nigeria.

 

 

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