1.0. It is my great delight to be one of the participants at this one-day sensitization on Public Procurement which is being organized by the Ondo State Local Government Service Commission. It is appropriate to remark that this is event is epochal because this is the first noticeable intervention from the Local government service Commission to sensitive its work force and the general public on the importance of the principles of public procurement. This is a laudable initiative for which the organizer deserves a commendation and a round of applause. I will like to thank the organizers for inviting me as a Guest lecturer, I am indeed humbled by the invitation to be the guest lecturer at a very unique event of this kind. I am humbled by the invitation because there are more competent, more versatile, more knowledgeable individuals within the State to act in this capacity and for this kindly accept my gratitude.
2.0. In recent time, discussions on the principles of Public Procurement had occupied a massive space in public discuss and as major stake holders, its important that we acquaint ourselves with the nitty gritty of the concept. To buttress this assertion, I am reliably informed that the Chartered Institute of Accountants of Nigeria has earmarked a session to discuss Public Procurement at its next Annual Conference scheduled to hold in October 2022.
4.0. The rising intensity in discussing Public Procurement is accentuated by the following factors;
- The prevalent global economic recession triggered by the COVID 19 Pandemic and the Russia- Ukraine war which is having debilitating effect on revenue. The ongoing war is creating huge distortions in economic activities apart from loss of lives.
- The insistence on the implementation of the World Bank Public Sector Reform Agenda dubbed the SFTAS has catalyzed discussions on global best practices in public procurement.
- The overarching need to control cost of governance has propelled discussions in public procurement to the front burner. While Revenues of both national and sub nationals (local governments) inclusive are declining, expenditure aided by inflation has spiraled beyond control creating financial disequilibrium.
5.0. The question therefore is what is the way forward? One can perfunctorily suggest that the immediate solution is to rev up internally generated revenue by increasing tax rates coupled with stringent enforcement. It is submitted that this prescription apart from being fraught with several misgivings as well as debatable One school of thought argued in favor of financing deficit by raising taxes in the high-income bracket (Obamanomics) while some argued in favor of reduction for the upper income earners as a way of reinflating the economy (Reganomics). However, one indisputable solution either to reduce deficit in government finance or ensure prudent spending of public funds, applicable at all times is rejigging the public finance architecture. Rejigging the Public finance architecture will entail the interrogations of issues of probity, accountability, value for money, transparency in public spendings.
The import of this is that all public expenditure must pass the litmus test of transparency, probity accountability, fairness, value for money, competitiveness and all other ingredients of global best practices and local legislations. This is what is generally referred to as DUE PROCESS in public finance or Public Procurement.
6.0. What is due process?
- Due process is a requirement which emphasizes that all procurements in the public sector must be resolved or accomplished in accordance with established rules and principles and that all stakeholders be treated fairly and equitably.
- Due process is a legal principle designed to protect the rights of citizens to fair treatment. The import of this statement is that all prospective vendors shall be given equal opportunity.
- Is the requirement that connotes that established laws and standards of behavior must be followed during any official act on the part of the State to ensure that individual rights and interests are not infringed.
- Due process in public procurement stipulates that tax payers fund or public fund must be expended in accordance with the provisions of the law, legally established procedures and regulations that conform with global best practices.
7.0. Characteristics of Due Process.
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- Open
- Competitive
- Fairness
- Value for money.
- Transparency
- Accountability
8.0. OBJECTIVES OF DUE PROCESS
- To strictly enforce the Due Process principles of transparency, competition, efficiency and value-for money in the execution of contracts for supplies, works and services in the State as set out in the Procurement Manual and in accordance with its enabling Law;
- To ensure that project packaging and implementation match the defined priorities and targets as set out in annual appropriation laws of the State;
- To prevent extra budgetary spending by Ministries, Departments and Agencies (MDAs) in the State by ensuring that only projects contained in the Approved Budget or supported by appropriate financial Warrants are executed;
- Emplace a mechanism for ensuring cost of governance is nationally competitive.
9.0. WHAT IS PROCUREMENT?
- It is the process of identifying, shortlisting, selecting and acquiring of required goods, services, and works from third party in the right quantity and quality through direct purchase, competitive bidding or tendering process while ensuring timely delivery.
- It is the strategic sourcing of works, goods, services required by an organization to accomplish or achieve its business model, corporate or social objectives.
- Long range plan to ensure timely supply of goods and services that are critical to an organization and its capacity to meet its core objectives.
- Inter-Connectivity Between Due Process and Public Procurement?
- It is a mechanism that focuses on ensuring that buying or purchasing process in the public service is conducted in a fair and just manner.
- It is a process that certifies that public expenditure has been executed in accordance with the established procedures and principles that satisfies global best practises
- In Ondo State, it implies that public funds have been dispensed in the acquisition of goods, works and services in accordance with the provisions of the Ondo State Public Procurement law 2017, and in tandem with global best practices.
10.0 STEPS IN PUBLIC PROCUREMENT
- NEEDS ASSESSMENT.
- PROCUREMENT PLANING.
- BUDGETARY APPROVAL.
- METHODS OF PROCUREMENT.
- GOVERNORS APPROVAL TO COMMENCE THE PROCUREMENT PROCEDURE.
- BENCHMARK PRICE
- MINISTERIAL TENDERS’ BOARD
- BPP CERTIFICATE OF NO OBJECTION
- CONTRACT AWARD
- PROJECT COMPLETION & CERTIFICATION.
11.0. HISTORY OF PUBLIC PROCURENT IN NIGERIA
Strictly speaking, public procurement has largely been a public sector activity in Africa. From a back room administrative function, it is however now assumed a new dimension and currently being recognized as a major multi-stakeholder public function, with huge ramifications on public service delivery and therefore on economic and social development. Nigeria is one of the African countries with a new legal framework for public procurement meeting the benchmarks prescribed by the World Bank and multi-lateral agencies. 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 the government that weaknesses in the existing procurement system were contributing to the nagging issue of corruption. In the last two decades or so, a good number of African Governments have implemented public procurement Reforms aimed at strengthening their public procurement systems e.g. Ghana, Liberia, Sierra Leone, Kenya, Zambia, Lesotho, Nigeria. They all agreed that these governments have obviously realized that sound public procurement policies and practices are among the essential elements of good governance and that good procurement practices reduce costs and produce timely results whereas poor practices lead to waste and delays and often lead to allegations of corruption and government inefficiency.
In 1999, Nigeria transited to a democratic government under President Olusegun Obasanjo after over a decade and a half of military dictatorship. The governance structures inherited by the new administration then, naturally had all the traditional drawbacks of dictatorship, especially with regard to the lack of accountability to the citizenry and general arbitrariness in governance. Specifically, the federal government of Nigeria under President Olusegun Obasanjo alerted the nation to the serious and catastrophic danger that characterized public contract processes. He also alerted on the World Bank Country Procurement Assessment Report (CPAR) which revealed that Nigeria was losing an average of $10 Billion (Ten Billion United states dollars) annually due to various abuses associated with public procurement and contract awards. I Fact checked confirmed that for every #100 of public expenditure #70 went into private pocket! A major initiative initially designed to respond to this challenge was the setting up of Budget Monitoring and Price Intelligent Unit (BMPIU) at the presidency.
The BMPIU was a stop-gap due process measure aimed at due diligence in government procurements and awards so as to facilitate fair deals for the government through price monitoring. However, the challenge with the Budget Monitoring and Price Intelligence Unit (BMPIU) stop-gap measure include absence of legal framework; inability to reduce corrupt practices as a result of collusion by public officials and the lack of clear role definitions and delineation for proper public procurement practices in line with global best practices so as to adequately ensure transparency, probity, accountability and openness.
In recent years, several reforms had been initiated on virtually every aspect of public service delivery such as the Due Process Certification Policy in 2002, the National Economic Empowerment and Development Strategy (NEEDS) in 2004, Infrastructure Concession Regulatory Commission (Establishment, Act the2005 whose goal is to regulate, monitor and supervise the contracts on infrastructure or development projects; the ‘Service Compact with All Nigerians’ (SERVICOM) which committed the civil service to providing quality basic services to all citizens “in a timely, fair, honest, effective and transparent manner” (Federal Government of Nigeria, 2004). International development partners and other multilateral agency have invested valuable time and resources in order to assist in deepening public procurement practices across all the 36 states and 774 local government in line with the federal nature of Nigeria nation. The World Bank through the Civil Society Organizations (CSOs’) has embarked on advocacy initiatives in order to achieve this objective. State governors were visited while key local government stakeholders were also encouraged to consider passage of public procurement laws in their respective jurisdiction.
RECOMMENDATIONS
- Capacity building by way of training and retraining of procurement offers or personnel of procuring entities.
- Ensure that all government agencies or institutions are saddled with the responsibility of ensuring sound public procurement practices.
- Strict adherence to the legal framework for regulations of public procurement -Ondo State Public Procurement Law 2017.
- Ensue transparency, competitiveness and fairness in the award of government contract.
- The State government should also ensure that state organs promptly approve and release funds to avoid undue stress on procurement process.
- There should be proper database for proper record keeping and documentation in the ODBPP and in all the government MDAs in the State.
- There is need to set up the National Council on public procurement to reduce the level of political interference with public procurement. 8. There should full implementation of Public Procurement Act 2017.
- Institutionalize international global practices.
THANK YOU
FOR LISTENING
Tolu Fadahunsi