Public Procurement Reform Programme (PPRP)

 

Jul 14, 2004, 14:08

 

 

Organised by the Budget Monitoring and Price Intelligence Unit (BMPIU) of the Presidency, the PPRP Stakeholders’ Conference took off at approximately 11:20 a.m. on 12 July with an opening ceremony in the Congress Hall of the Nicon Hilton Hotel, Maitama, Abuja. The theme of the Conference was “Public Procurement Reform: The Search for Transparency and Value for Money.”

 

Highlights of the ceremony, which was attended by a cross-section of dignitaries from various arms of Government, were speeches delivered by the President of the Federal Republic of Nigeria, Chief Olusegun Obasanjo, and the Senior Special Assistant to the President (SSAP) on BMPIU/Due Process, Mrs. O.K. Ezekwesili. Their speeches centred on the importance of Procurement Reform as a means to generating an efficient and transparent public procurement system that would be strategic in sustaining the proper handling of public funds.

 

Day One Presentations

 

Chaired by Honourable Datti Baba-Ahmed, the first session witnessed one lecture presentation: “An Overview of the Normative Characteristics of a Value Adding Public Procurement System” by Mr. Sam Afemikhe.

 

In his paper, Mr. Afemikhe cited Procurement as a crucial instrument of public policy that comprises key socio-economic implications and potentials. The failure of past efforts at infrastructural and economic development, he further pointed out, is directly the result of corruption, waste, fraud, and abuse, which a sound Procurement Reform programme is expected to tackle effectively.

 

Chaired by Senator (Dr.) U. Uba, the second session was a presentation by the Head of Service of the Federation, Alhaji Yayale Ahmed, titled: “Capacity Building Requirements for Sustainable Public Procurement Reforms” presented by Dr. Goke Adegoroye.

Alhaji Ahmed’s paper emphasised the need for manpower audit and training as fundamental prerequisites for Procurement Reform. He also pointed out the importance of remuneration improvement for those who handle procurement. He believes that the reform would essentially result in the performance of good jobs and resolve the issue of abandoned projects.

 

A centralised procurement agency, he also noted, would succeed only if line ministries also have procurement units down the chain.

 

The third session, chaired by Senator U. Uba, was a presentation by Dr. T. Getu titled: “Public Procurement Reform as Development Mechanism.” Mr. Getu’s presentation cited the proposed Procurement Reform as a gateway to developing procurement policies that meet world standards and that would promote entrepreneurship and business practices among erstwhile disadvantaged sectors, thus improving competitiveness, especially at the international level.

 

Day Two Presentations

 

Following an introductory remark by the Senior Special Assistant to the President (SSAP) on BMPIU/Due Process, Mrs. O.K. Ezekwesili, day two of the Conference kicked off at approximately 9:30 a.m. on 13 July.

 

The first paper was presented by Engineer Bayo Adeola, titled “Public Procurement, the World Trade Organisation and International Politics.” Mrs. Ezekwesili chaired the session.

 

In his paper, Engineer Adeola focused on public procurement, not simply as a means of purchasing goods and services, but as a tool for national development and a means of livelihood. He made a case for confidence in the indigenisation of most of the services procured in Nigeria and insisted that Nigerian professionals lead the way in this regard. He further pointed out that the procurement of goods should not define the end of the procurement policy, but should be the beginning of the strengthening of capacity.

 

The second session was chaired by the Minister for Works, Senator Adeseye Ogunlewe, during which Chief Bayo Awosemusi delivered his paper, “Donor Perspectives on the Reform of the Procurement System.”

 

In his paper, Chief Awosemusi drew a parallel between effective public procurement and good governance. With Nigeria’s high corruption index, the nation is in dire need of Procurement Reform, which currently has the encouragement and support of international institutions like the World Bank. But such a Reform must be preceded by a well defined action plan that would also be augmented by an assessment mechanism, legal framework, skill enhancement programme, and anti-corruption measures.

 

During the third session Mr. Soji Apampa presented a paper titled, “Public Procurement: Private Sector Perspective.” The session was chaired by the Chairman of the House Finance Committee, Honourable Lawan Farouk.

Mr. Apampa’s paper concentrated on the process and procedure for public procurements, tracing the linkage between power and wealth. He insisted that a good procurement system must be timely, predictable, and fair, thereby ensuring good value for money. He also noted that integrity is the missing factor that has to be recovered.

…

During the fourth session Honourable Datti Baba-Ahmed delivered a paper titled “Economic Benefits of an Efficient Public Procurement System.” The session was chaired by Mrs. O.K. Ezekwesili.

 

The highpoint of Honourable Baba-Ahmed’s paper is that the transformation of public sector procurement in Nigeria into a more prudent and effective system will provide a channel for turning an imminent socio-economic crisis into a new era of social security, economic prosperity, and political stability. The legislator is also of the view that politics devoid of money sourced from inflated Government contracts will certainly produce a more responsible and people-oriented Nigerian economy.

 

Conclusions and Viewpoints

 

The presentations stimulated various reactions that came in the form of questions, answers, comments, and suggestions. These reactions ultimately engendered the following salient points:

 

· There should be a training programme for professional implementers of

Procurement Reform. While one notion held that such training would be more effective than the ongoing Conference, participants were also reminded that the Conference merely serves as a sensitising seminar that allows input from various segments of Government and the public, which would ultimately assist the National Assembly in creating a Procurement Reform Bill. However, through a capacity building scheme specialised personnel should be put in place before the Procurement Reform is set in motion.

 

· A proposed National Procurement Commission should be put directly under the supervision of the Presidency.

 

· Procurement Reform would be unsuccessful without prompt payment for services from international organisations. In such instances, the 10% local counterpart payment should come from Government. Also, interests should be applied where payments are delayed.

 

· While one view suggested that materials management should be part of Procurement Reform, another view pointed out that material management should be separated from this Reform so as not to overburden the process. According to this view, whereas purchase and delivery should be a function of procurement, materials management should be the responsibility of institutions and organisations making use of such resources.

 

· Because Nigeria ranks among the highest worldwide in the cost of project execution, this problem remains a bane that results in the acquisition of little or no value for money spent. It is hoped that a Reformed Procurement system would neutralise this dilemma.

 

· In response to the suggestion that State and Local Governments should be incorporated into a Procurement Reform process (since a huge volume of waste takes place at these levels of Government), it was pointed out that State and Local Government representatives have already been a part of the discourse, and that Due Process departments already exist in some States. In all, the Reform strategy is a holistic one that will integrate all tiers of Government. Aside from this all-inclusive structure, the programme will also undertake an extensive handling of issues that involve the promotion of competition and proper payments for services, insurance, and interests.

 

· The reference to a “Nigerian factor,” theory was debunked by the fact that services, whether local or international, should all be evaluated by quality and international standards, and not area of origin.

 

· To curb corruption and kickbacks, a mandatory integrity pact should be publicly signed between procurement agencies and contractors, whereby they vow to be transparent in payments and costs. An integrity pact clause should thus be appended to the Procurement Reform Bill.

 

· Integrity should also be maintained by sanctioning erring officers. This could be enforced by placing an embargo on their certificates, retiring them, or sacking them. In effect, judicial reforms must be pursued to enforce the rule of law so that sanctions are imposed on those who breach the law on procurement.

 

· Accounting and auditing laws should be reformed in order to prevent financial professionals from falsifying documents and thereby obstructing any Procurement Reform. In other words, there should also be reforms at fiscal and budgetary levels.

 

· The theory that improved remunerations can be linked to performance lacks conclusive data, though it was pointed out that agencies like the Nigeria National Petroleum Corporation (NNPC), for instance, have remuneration packages that were supposed to enhance performance. However, there is no empirical proof that this has been the case. This theory thus remains generic and not categorical.

 

· Concerning the environmental sustainability of the Procurement Reform process, the Due Process Department, even in its interim state, has sector specialists to scrutinise its projects.

· There is the need to have a public procurement officer cadre that should be trained and promoted based on experience and expertise. It was noted that Government plans to produce and professionalize such a cadre of officers.

 

· Although a major public service reform has been suggested alongside the ongoing Procurement Reform process, care must be taken to prioritise various reform agendas. Procurement Reform is extremely vital to Nigeria’s present socioeconomic status and is expected to attain immediate and far-reaching results once it is executed. For this reason, it should not be exposed to delay, which would be the case if it were combined and subsequently overloaded with other reform programmes. A method of sequencing reform projects should be carried out in order to ensure that some reforms take precedence over others.

 

· Provisions should be adequately made for small and medium scale industries to benefit from any Procurement Reform.

 

· The notion that local agencies rank low in international business is a myth that should not allow Nigerian businesses to be excluded from Procurement Reform. As long as local service qualities are high and meet international criteria, they should be procured at home rather than abroad at exorbitant prices. After all, at local, regional, and international levels, Nigerians have demonstrated remarkable talent and expertise in various areas.

 

· Because Information and Communication Technology (ICT) has emerged as one of the greatest areas of waste, this sector ought to be dealt with and streamlined by Procurement reform.

 

· A national confidence barely exists in the carrying out of transactions. For such confidence to be realised there should be a national passion to do things for the country, a spirit of patriotism in other words.

 

Thus far there appears to be a “rent-seeking” culture that permeates all sections of the economy. In essence, a large percentage of the population is not prepared to carry out rigorous creative measures that would boost development, which is part of the reason why a competitive spirit is lacking.

 

· Competition must be encouraged as this empowers the thought process, enhances confidence in productivity, and leads to creativity and innovation.

 

· There should be a lot of preference for locally made goods in order to assist and build the local industry. Accordingly, there should also be a projected target for gradually increasing local content in the country’s procurements. A Procurement Reform Bill should therefore consider a sheltered market in which preference is given to home-made goods.

 

· To further encourage local production, efforts should be made to educate, fund, and give contracts to small businesses and other disadvantaged minorities.

 

· The cost of capital is very high and inimical to the development of the local industry.

 

· Government and the people should be prepared to take risks as this is a necessary step towards effective competition and productivity.

 

· The Procurement Reform Bill should make provisions for sanctions and punishment when violations take place. Those who fail to deliver after being paid should be held accountable and face disciplinary measures.

 

· The transfer of technology should form a cornerstone of all procurements, particularly international and Information Technology procurements.

 

· The nexus between education and development should be emphasised and strongly taken into account as this is vital for the progress of any economy.

 

· Citizens should write their lawmakers and urge their cooperation in passing this Reform Bill, the legal framework of which will guarantee that it is implemented.

 

· Having the appropriate manpower to execute the Reform process is a necessary part of the Due Process.

 

· Procurement should not be limited to the context of buying alone, but should be seen beyond this framework, as it involves due process in buying, paying, storage, shipment, etc, of goods and services.

 

· Timely payment is essential for an effective procurement system, and should be linked to an effective budgetary system. Financial regulations should address this issue.

 

· Some laws already exist, like those that stipulate interests when Government fails to pay on time for services provided or when contractors fail to deliver services paid for. The problem has been the execution of these laws, which Procurement Reform is expected to deal with.

 

· Although international institutions use transparency and efficiency as benchmarks for providing funding, it is more important that Nigeria arrives at a stage where, with proper management, she would not be heavily reliant on foreign aid.

 

· Concerning procurement, Nigeria is being taken advantage of by foreign countries because she makes herself vulnerable. With more competitiveness and patronisation of local goods, she would be able to tackle this problem.

 

· The success level of Due Process is an indication that Procurement Reforms could also meet with success.

 

· There must be a national vision and philosophy that should influence our procurement projects and culture. National priorities must be cited vis-à-vis these projects.

 

· Revenue allocation must reflect favourable and equitable formulae for other tiers of Government.

 

· Care must be taken not to overprotect anyone and thus enthrone a culture of mediocrity.

 

· The issue of quality control and materials testing should be critically looked into to ensure value for money.

 

· It is very important to consider all necessary procedures and hurdles that have to be overcome in the passage of the proposed Reform Bill.

 

· The compilation and circulation of a price index to all Government agencies is important and germane to the success of procurement reforms. In this regard, a Price Intelligence database is already under construction through arrangements being made by Government with Microsoft. The database, among other things, will provide information that could be used to determine who should and should not be trusted for business. In other words, it would also be a database of contractors from which Government can carry out evaluations and procure services.

 

· Release of funds to agencies of Government as contained in budgets should follow Due Process guidelines. Funds already released should always be properly accounted for before any additional releases are made.

 

· The Freedom of Information Act was emphasised as extremely necessary if the goal of transparency is to be attained through Procurement Reforms. This Act should thus be passed without further delay as it is germane to the success of Procurement Reforms. Such an Act would also ensure transparency. Without a Freedom of Information Law, “whistle blowers” would be stifled.

 

· For effective Procurement Reforms to take place (and in relation to the above point), Civil Servants must have the backing of laws that give them the courage to confront and speak out against corrupt practices, especially as they apply to their bosses.

 

· Failure to make timely contract payments should not be blamed on Due Process but on a current procurement practice that is flawed as it lacks effective checks and balances.

 

· There is the need for better remuneration for certain projects, while the issue of poor payment for supervisors remains a major concern.

 

· For a sustainable procurement process, effective governance policies have to be firmly put in place. Procurement Reforms require the cooperation of everyone.

 

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