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A case study of the Nigerian procurement monitoring program and its portal and observatory

Chibuzo Chiemela Ekwekwuo

Reproduced with permission of the copyright owner.

Entertainment - Boy Playing Chess 2 (c) Duncan Walker
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Introduction

Public procurement has largely been a public sector activity in Africa. From a back room administrative function, it is however now being recognized as a major multi stakeholder public function, with huge ramifications on public service delivery and therefore on economic and social development. The concept of having statute based citizens oversight of the procurement process is very new in Africa. Perhaps Nigeria's public procurement law is the first, if not the only one of the many procurement laws passed by African countries in the last decade that took the bold step of requiring mandatory citizens observation of the public procurement process.

This has brought its challenges and presented new potentials for transparency and accountability. One project in Nigeria is at the centre of ensuring the effective utilization of this window of opportunity to achieve the objectives of procurement reforms. This article will present a case study of the Public & Private Development Centres citizens procurement monitoring program in Nigeria, it will examine the challenges, tensions and politics of citizens procurement monitoring and try to identify the value this landmark provision and process may or may not be adding to the Nigerian procurement framework, and perhaps the potential positive effects of sustained and effective citizens oversight on public expenditure in Nigeria.

Why procurement is important in Nigeria

Public procurement is important because of its role in the development process, the amount of resources it consumes, and its susceptibility to undue influences [1]. A 2006 study by Transparency International found that public procurement amounts to about 15-30% of GDP or more in many countries. It estimated procurement-related corruption at normally between 10% to 25%, and in some cases as high as 40 to 50%, of the contract value. It also found that few activities create greater temptations or offer more avenues for corruption than public procurement [2]. The African Development Bank (AfDB) estimates, in a recent concept note, that public procurement accounts for as much as 70% of the budgets of African governments. It points out that strengthening of procurement systems is crucial and provides additional opportunity for minimizing the potential effects of financial/economic crisis and restoring a level of economic growth and development sufficient to reduce poverty.

The AfDB noted in this document that majority of African countries have enacted commendable procurement laws and systems that broadly comply with international and regional requirements such as the United Nations Commission on International Trade Law (UNCITRAL), the Common Market for Eastern and Southern Africa (COMESA), and the West African Economic and Monetary Union (WAEMU). According to the AfDB, these successes have strengthened the rights of bidders and increased the pressure on procurement agencies to comply with Regulations. The bank however, notes that important challenges remain in several areas, including; ineffective implementation of procurement reforms; weak procurement capacity and institutions; low motivation, incentives, and levels of accountability by public officials etc. It also notes that corruption risk in procurement remains a key challenge. It points out that procurement reforms are more likely to be successful, when combined with anti-corruption measures in other areas, as well as with broader-based anti-corruption and good governance measures [3].

Nigeria is one of the African countries with a new legal framework for public procurement meeting the benchmarks described by the African Development Bank Concept note. Procurement reforms in Nigeria have been part of the broader public sector reform effort, seeking to improve government effectiveness in service delivery. In 1999, there was a clear understanding by government that weaknesses in the existing procurement system were contributing to the nagging issue of corruption. Indeed it has been said that about 80% of corruption cases in Nigeria arise from the Procurement process [4].

Thus when the Government of Nigeria presented a bill for enactment of a procurement law to the National legislature in Nigeria, some civil society organizations engaged the process and worked hard to ensure the legislature enacted a law that presented an opportunity for real and genuine improvements. One of those civil society organizations was the Public & Private Development Centre which sought the inclusion of a clause mandatorily requiring public bodies to invite and allow representatives of civil society organizations and professional bodies to monitor procurement processes. When enacted this law did not only contain this provision, but many other progressive provisions including but not limited to provisions granting improved public access to public procurement information. The legal regime for public access to information in Nigeria has however further been improved by the enactment of the Freedom of Information Act 2011.

The activating provision

Section 19 of the new procurement Act [5], requires every government ministry, department, extra-ministerial department, agency or institution referred to as procuring entities, whilst advertising and soliciting for bids to invite at least one representative each of a civil society organization working on governance and or anti-corruption issues and professional body with expertise in the area of goods, works and services being procured to observe the procurement process. Whilst it requires that the observers not interfere in the procurement process, it indicates they may submit their reports to any relevant agency or body including their own organizations. Nigeria¡¦s public procurement law is the first, if not the only one of the many procurement laws passed by African countries in the last decade that took the bold step of requiring mandatory citizens observation of the public procurement process. However this law is only applicable to the Federal level of government in Nigeria, some sub-national governments have however passed similar laws. Also the new Freedom of Information law 2011 has provided a right of access to publicly held information and documents with some reasonable exceptions.

The project leader

One of the organizations and civil society projects seeking to ensure the effective utilization of this window of opportunity to achieve the objectives of procurement reforms is the Public & Private Development Centre (PPDC). See http://www.procurementmonitor.org/ and http://www.ppdcng.org/. PPDCs organizational goal is to increase citizen's participation in governance and development in a way that improves integrity in public sector processes.

Why the portal

Procurement monitoring in Nigeria by non state actors began soon after establishment of the regulatory body ie the Bureau for Public Procurement, and internal structures within procuring entities for implementing the law. The Bureau for Public Procurement issued a directive in 2008 requiring departments and agencies to begin inviting CSOs and professional body representatives to monitor public procurement in accordance with the law. It soon became clear that most procurement observers lacked capacity in procurement monitoring and oversight. It was clear that without capacity and the needed tools, procurement observers will be merely fulfilling the legal obligations without really achieving the intended outcomes of improved transparency and accountability which the PPA 2007 envisaged. They needed improved skills, and modern tools to improve effectiveness of their oversight activities. At inception no system existed to collate, analyze and disseminate monitoring reports. No guide, or templates existed to provide direction to monitors , on how to address challenges they meet in the field monitoring or to indicate to them what red flags to look out for and the implications of these red flags. Thus procurement observers under the umbrella of the National Procurement Watch Platform developed a monitoring checklist, and trained procurement observers to use it. This was intended to generate systemic and evidence based reports.

However the absence of an effective mechanism to collate, analyse and make sense of these reports in a credible manner obviously undermined CSO monitoring efforts and its outcomes at inception. To hold government officials accountable and contribute effectively to system improvements, the media, regulatory bodies and civil society needed evidence based analytical reports that give an idea of individual process effectiveness, but even more important a bird¡¦s eye view of broad system effectiveness or lack of it. Also such reports are vital for providing early warning signals of processes that are not compliant with the law, good practice or the regulations. There was also the need for improved information sharing and synergy amongst non state actors working to improve procurement reforms. As a result the PPDC developed the Nigerian Procurement Monitoring Project, which with the support of UNDEF has created the Nigerian Procurement Observatory, http://www.procurementmonitor.org/.

The portal

This is a robust web-based system developed to support non state actors monitoring of the Nigerian Federal procurement system, based on a revised version of the standard monitoring tool now adapted for online use. This standard monitoring and reporting tool/checklist is benchmarked on provisions of the Nigerian procurement law and regulations, it provides a uniform guide and reporting format for procurement process monitors. It is an online portal providing a feedback port-let for accredited monitors to input monitoring reports in the standard form, and an automated analyses engine that generates analyses reports on varying dimensions of the submitted reports. The feedback from these reports are compiled and presented to oversight bodies and help to identify red flags, needed system improvements, and to support CSO advocacy to improve transparency and accountability in the procurement system.

The procurement portal was innovatively designed with careful consideration of needs of stakeholders. Also several stakeholders were consulted and involved in developing the portal. Through a blog the portal and PPDC personnel are able to channels real time procurement monitoring advice to registered journalists and monitors on request, whilst its open source library currently provides, accurate, timely and detailed information for anyone interested in the Nigerian procurement system. It is intended to provide full multi-media online training soon.

The portal structure

The online Portal itself was designed with three sections.

  1. Descriptive pages for information receiving and sharing, including an open source library, access is open to the general public, with regular website tab displays for ease of navigation [6].
  2. Participatory monitoring, and technical pages, with access restricted to verified procurement monitors and registered journalists, including a blog through which registered procurement monitor and journalists can access procurement legal and monitoring advice.
  3. Technical analytical pages for generating analytical reports with access limited to administrators. These are focused on generating procurement reports. PPDC is considering creating partial access to enable monitors generate different dimensions of reports themselves, without being able to alter imputed information and data.
In practice PPDC staff verify that monitors meet requirements i.e. they are trained, affiliated to a relevant organization that has been checked out, are independent, with no conflicts of interest. This helps ensure the integrity of the reports [7]. The system is such that every report submitted can be tracked to the individual who submitted it and his or her organization.

Shared ownership

To create shared ownership and synergy with existing development programs, the portal has an independent Advisory Board, with members from development sector, other NGOs, the regulators, the media and the National Procurement Watch Platform an umbrella association of non State actors involved with procurement monitoring in Nigeria etc. The Board helps ensure that the portal remains relevant to its stakeholders. It feeds back on new program development and peer review assessment of reports before publication. This way the reports from the project are in use by many other organizations and projects in various other ways.

In addition it has created a mailing list of stakeholders in the procurement process, supporting open information sharing, interactions between civil society organizations, international agencies, anti-corruption agencies, public bodies and others interested in procurement processes and reforms in Nigeria.

Also part of this effort has included an annual assessment report, based on a survey of public procurement personnel in public bodies, non state actors, bidders and contractors and also analysis reports from the portal. This has grown to be a detailed annual report on the state of implementation of the new reform framework and levels of compliance with the procurement law and rules. It identifies weaknesses and opportunities for improvement and its findings and recommendations have in some instances led to regulatory steps that have brought improvements in the system.

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Note 1: Implementing the Nigerian Procurement Law: A survey of procuring entities, civil society observers, bidders and contractors, legislators and the Bureau for Public Procurement Public – Private Development Centre (2011).

Note 2: See Handbook on Curbing Corruption on Public Procurement (2006), available online at http://www.transparency.org/content/download/12496/120034 and Fighting Corruption and Promoting Integrity in Public Procurement (2005), available online at http://www1.fidic.org/resources/integrity/corrup_proc_OECDrapport-2005-aase.pdf

Note 3: Extracts from concept note of the High Level Forum on Public Procurement Reforms in Africa organized by the African Development Bank (AfDB), in partnership with the Common Market for Eastern and Southern Africa (COMESA), the West African Economic and Monetary Union (WAEMU), the African Capacity Building Foundation (ACBF), the Organization for Economic Co-Operation and Development (OECD) and the World Bank (WB), organized in Tunis, Tunisia, on 16th and 17th November 2009.

Note 4: Ojeme Hastings: "Public Procurement Act as an indispensable fiscal policy to move Nigeria forward." In Public Procurement Journal, dated February-March 2009, p.17.

Note 5: Public Procurement Act 2007

Note 6: See Creating Public Oversight in Nigeria by Seember Nyager, the Procurement Monitoring Observatory. World Bank Institute; Procurement Innovation Challenge Publication 2012

Note 7: ibid.

Note 8: ibid.




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