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How weak public procurement breeds corruption

By News Express on 17/03/2018

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One area of Nigeria’s public life that has yet to receive the needed legal framework and policy guidelines, to check financial leakages in the management of public finance and in the funding of public projects, is the procurement sector. 

Not long ago, an official of the Independent Corrupt Practices and Allied Offences Commission (ICPC), Dr Anthony Onyilimba, stated that 60 per cent of corruption cases are procurement-related. In the last few years of the operations of the Economic and Financial Crimes Commission (EFCC), over 75 per cent of the cases of graft against public officials are procurement-related. In most states, public utilities are in bad shape due to weak implementation of procurement laws. In the last few months, both the Directors-General of Securities and exchange Commission (SEC), Mounir Gwarzo and that of the National Health Insurance Scheme (NHIS), Dr Yusuf were suspended for alleged financial recklessness, relating to violation of procurement law. The poor state of procurement over the last 50 years is the reason for the mind-blowing corruption among public officials. 

The major test of determining the indices of good governance, respect and strict adherence to the principle of transparency and accountability is the availability of empirical data to concretely establish the commitment or otherwise of public officials to the laws and statutes guiding the procurement and execution of public utilities or projects which, basically and fundamentally, are meant to serve public good. This fact finds legal bearing in section 15(5) of the Constitution of the Federal Republic of Nigeria of 1999 (as amended), which states: “The state shall abolish all corrupt practices and abuse of power.”

But our political history is replete with pragmatic evidences that points to the wanton disrespect to the available body of laws that safeguards public procurements from abuses, and most especially since 2007 when the Bureau of Public Procurement (BPP) Act was institutionalised and domiciled as a national legislation. The current administration has gone further in the abuses rained against the Public Procurement Act. The Director-General/Executive Secretary of the National Health Insurance Scheme, who was kicked out by the Health minister for corruption relating to procurement was reinstated by the government only because the man is a distant cousin of President Muhammadu Buhari. Although the legal frameworks on public procurement may be weak, there is, indeed, a national legislation on public procurement. 

In writing, the following are what the institution was established to do, as found in its website.

The Public Procurement Act, 2007 established the Bureau of Public Procurement, as the regulatory authority responsible for the monitoring and oversight of public procurement, harmonising the existing government policies and practices by regulating, setting standards and developing the legal framework and professional capacity for public procurement in Nigeria.

The vision of the BPP is:
Building and sustaining an efficient country procurement system that meets international best practices.

The Mission is “to professionalise the process of procurement that ensures transparencyefficiency,competition, integrity and value for money to support national growth and development.”

The objectives of establishing the Bureau of Public Procurement are: The harmonisation of existing government policies and practices on public procurement and ensure probity, accountability and transparency in the procurement process; The establishment of pricing standards and benchmarks; Ensuring the application of fair, competitive, transparent, value-for-money standards and practices for the procurement and disposal of public assets; and The attainment of transparency, competitiveness, cost effectiveness and professionalism in the public sector procurement system.

The core objectives are: Economic Efficiency; Competition - providing level-playing ground for all strata of bidders; Value for money; Transparency.

But these legal provisions that ought to guide Nigerian public officials on how to follow global best practices in going about the functions of public procurements are grossly abused, beginning from the failure on the part of the Presidency to inaugurate a functional governing council to administer and monitor awards of contracts.

Right from inception of the BPP, with the signing of the law and the inauguration of the offices for that institution, it would seem that the succeeding administrations have always set out to fundamentally weaken and undermine the BPP. The violation of the critical segments of this law makes any claim of probity on the part of the President highly unsustainable and un-provable. 

For the avoidance of doubt, Part I of the Public Procurement Act of 2007, is on the establishment of National Council on Public Procurement, which states: 1 (1) “There is established the National Council on Public Procurement (in this Act referred to as “the Council”); (2) The Council shall consist of: a) the Minister of Finance as Chairman; b) the Attorney-General and Minister of Justice of the Federation; c) the Secretary to the Government of the Federation; d) the Head of Service of the Federation; e) Economic Adviser to the President; f) Six part-time members to represent: i. Nigeria Institute of Purchasing and Supply Management; ii. Nigeria Bar Association; iii. Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture; iv. Nigerian Society of Engineers; v. Civil Society; vi. The Media and, g) the Director-General of the Bureau, who shall be the secretary of the council. 

The law goes further to state that: (3) “Notwithstanding the provisions of section (2), the council may co-opt any person to attend its meeting but the person so co-opted shall not have a casting vote or be counted towards quorum. (4) The chairman and other members of the council shall be appointed by the President. (5) Subject to sub-section (2) of this section, a member of the council being: a) the holder of an elective office under the Constitution of Nigeria, shall hold office for a period he remains so elected and no more; and b) the director-general of the bureau, shall hold office on such terms and conditions as may be specified in his letter of appointment. 

“(2) The council shall; a) consider, approve and amend the monetary and prior review thresholds for the application of the provisions of this Act, by procuring entities; b) consider and approve policies on public procurement; c) approve the appointment of the directors of the bureau; d) receive and consider, for approval, the audited accounts of the Bureau of Public Procurement; and e) approve changes in the procurement process to adapt to improvements in modern technology; f) give such other directives and perform such other functions as may be necessary to achieve the objectives of this Act.”

These fundamental aspects of the procurement Act have been violated with reckless abandon, and in the last three years public procurement corruption has skyrocketed to an unimaginable dimension. 

A commentator has written about this astronomic rise in procurement corruption, thus: “Again, Ministries, Departments and Agencies of government (MDAs) are the most culpable when the issue is procurement abuses. From Nigerian Television Authority (NTA) through the Ministry of Health, to Universal Basic Education Commission (UBEC), the story is the same: violations of the Public Procurement Act 2007, by either the total embezzlement and sharing of funds for the execution of the capital component of their annual budgets; over-inflating of actual contract costs or award of huge contracts through poor procurement processes.

“The Public Procurement Act 2007 has spelt out clearly modalities for the award of public contracts; therefore, any procurement that failed to meet the standards set out in the procurement law constitutes an abuse of due process in the new procurement regime. 

“From the foregoing, and the experiences of the country since independence, it is clear  that the Nigerian people will not know good governance nor accountability and probity until those who work in the public service and the heads of MDAs acquire the knowledge of fiscal responsibility, due procurement process and accountability in public finance and resource use; or those who have these knowledge come to head and work with these institutions of governance in Nigeria. It is in MDAs that ministers and their civil service counterparts at the end of every fiscal year, in which major projects that would ordinarily have served the needs of the people are not executed; rather huge resources appropriated for these projects are shared among individuals who work in the MDA’s.”

I had earlier stated that virtually all previous presidents, including the present have failed to obey the tenets of the Public Procurement Act, by refusing to inaugurate a council so the opaque and corrupt practices of awarding of multi-billion naira contracts for public procurements are still the order of the day, with the Federal Executive Council acting as contracts-awarding platform. 

The public procurement scandal that was exposed in the Nigerian National Petroleum Corporation (NNPC) by the Minister of State, Dr Ibe Kachikwu, to the tune of $25 billion USD is systematically being hidden under the carpet by President Muhammadu Buhari. The recently sacked Secretary to Government of the Federation (SGF) Babachir Lawal, was indicted for alleged procurement fraud of nearly N1 billion in the management of reliefs for internally displaced people in North-eastern Nigeria. These acts of public procurement corruption have worsened poverty among Nigerians. And, in recent times, there was a World Hunger Rating, which placed Nigeria as one of the nations with the most poverty-stricken populations and Nigeria ranked higher than India, which has world’s second largest human population of over 1 billion people. 

Perhaps, the recently issued Corruption Perception Index by Transparency International, in which Nigeria ranked as one of the most corrupt nation’s of the world in the year 2018, goes to show the rot brought about by the gross abuses that ministers and agencies of government commit in the area of public procurements. Finance and Health ministers by suspending two high-ranking officials under them for monumental heist of public fund have confirmed that public procurement corruption has worsened since the last three years. The corruption in NNPC was linked to a top Presidency official. Procurement corruption is now wearing official stamp of the Presidency, one may argue. 

Adherence to Public Procurement Act has also taken the back seat since the emergence of the current administration to the disappointment of most observers who had been sold the propaganda that the current president is a man of integrity.

Transparency international rightly stated that: “Corruption involves behaviour on the part of officials in the public sector whether politicians or civil servants in which they improperly and unlawfully enrich themselves or those close to them by the misuse of the public power entrusted to them.”

It is for the sophisticated nature of corruption currently in place among top government officials that Nigerians are seriously not satisfied with the bogus claims by such officials like the Information and Finance ministers that the current government had spent several trillions to fix the collapsed public infrastructures, which in any event are still dilapidated and dysfunctional. But the fact staring most Nigerians in the face is the total collapse of such critical infrastructures like public, federal, and state highways; educational and health facilities, including the Presidential Clinic, which was recently reported not to have the commonest medications for the benefit of patients due to high rate of procurement corruption.

There is no doubt that all federal highways in the entire South-east, South-west, and parts of South-south and Northern Nigeria have collapsed, even as government officials go about making bogus and unsubstantiated claims of spending public finances in fixing these dilapidated infrastructures. Where then are the peoples’ commonwealth?

Last June, Minister of Finance, Mrs Kemi Adeosun was quoted as stating that the Federal government committed N1.2 trillion on capital projects in the last 12 months.

Her words: “We will continue to prioritise infrastructure spending. In the last 12months, we have spent approximately N1.2 trillion on capital projects. On our roads, spending N200 billion in 2016, which compares to N19 billion in 2015; while Transport and Aviation received N143 billion, compared to N6 billion in 2015. We intend to revive public private partnership (PPP) in Nigeria; and trying to revive existing and failed PPP projects. Nigeria’s private sector is extremely efficient, creative and resilient, but it needs predictability in policy. We will introduce new assets clause of guaranteed instruments that will provide adequate safeguard for the protection of private capital.”

Then the Minister of Budget and National Planning, Senator Udoma Udo Udoma, upped the ante of propaganda claims on what government has or is about to spend in public projects, as if he is in competition with his Finance counterpart on who will quote the highest figures, which are completely unrelated to reality on ground compared to the emerging fact that Nigeria has now become the most poverty-stricken nation in the world.

Udoma said the government has proposed to spend N8.61 trillion in 2018 with N295 billion going to construction and repair of roads nationwide.

Sadly, as I write, as first quarter is ending, the Federal highways that lead out of Abuja to the South-east, South-south and South-west are in some of the worst states of criminal neglect. Lives are lost daily in accidents and crimes due to poor road networks. 

The Aviation sector also, do not fair well, given that some of the basic safety infrastructure are not in place. The international Airports in Lagos and Abuja are in very sorry state with the Abuja airport about to become the ground for one of the worst cases of public procurement crime, with the bogus estimate being bandied about as expected cost for building just one more run-way: an estimate that can build a dozen run-ways elsewhere.

The Ministry of Defence is replete with procurement corruption and criminality, even as fighter jets are procured at almost six times the real costs. Official theft of public fund has, indeed, assumed disturbing trend even with the existence of criminal laws against stealing of public assets and resources. 

In the book, The Legal Implications of the Mismanagement of Public Fund in Nigeria, Mike Mbama Okiro and Basil Anasoh reminds us: “Another offence with which a person may be charged with is the offence of stealing. Section 390 of the Criminal Code creates the offence of ‘stealing’, which is not the same as the old offence of larceny in English Law. Even in English Law, the offence of larceny has been replaced by the new offences of theft, which is contained in the Theft Act 1968.

“Section 383(i) of the Criminal Code defines ‘stealing’ in the following terms: ‘that a person who fraudulently takes anything capable of being stolen, or fraudulently converts to his own use or to the use of any other person anything capable of being stolen, is said to steal that thing.’

“Section 383 (ii) provides, inter alia, that a person who takes or converts anything capable of being stolen is deemed to do so fraudulently, if he does so with the intent to permanently deprive the person who has special interest in the object. Stealing basically means forming the dishonest intent to take away property without the owner’s consent. As with most criminal offences, stealing requires an ‘actus-reus’ and ‘mens-rea’.

“The actus reus of stealing is the taking or conversion of the property that is, the physical transportation of the property. Taking of property under section 383 (i) means no more than the taking of something away from its normal position, if the prerequisite mental element is present. The ‘taking’ needs not to be completely taken into his physical possession. He is deemed to have taken a thing if he moves it or causes it to move.” (This was the issue in RV Taylor, where the accused put his hands in the complainant’s pocket, got hold of his purse, and was trying to bring it out. The complainant held his hand while he was stealing from the pocket. Taylor was found guilty of stealing. More so, the taking or conversion of the property need not be direct, but it could be by trick, as was held in RV Adeboyega).”

In the same vein, Nigerians must in their numbers speak out and demand accountability from this government, at both the centre and the sub-national levels, regarding the monumental theft of our commonwealth by public office-holders through corrupt public procurement practices. We, as citizens, aren't doing enough to stop these massive stealing going on. We must not leave the job for the National Assembly, because some of the members were once governors and dipped their hands in our common till. The job of ensuring that the public procurement corruption is fought to a standstill is ours as citizens to do. And we must do that now! 

•RIGHTSVIEW appears on Wednesdays and Saturdays, in addition to special appearances. The Columnist, a popular activist, is a former Federal Commissioner of Nigeria’s National Human Rights Commission and presently National Coordinator of Human Rights Writers’ Association of Nigeria (HURIWA). He can be reached via 08033327672 (sms only) or via doziebiko@yahoo.com 

Source News Express

Posted 17/03/2018 8:59:03 PM

 

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