Despite the existence of the nation’s Public Procurement Act, many government agencies have not been transparent and accountable in their procurement processes. UDEME AKPAN who focuses on recent study of 15 institutions, reports that the future is not bleak as the Nigerian Electricity Regulatory Commission, NERC, rated the most transparent has started to drive enforcement in the power sector.
Many years ago, a former Group Managing Director of a state owned company (name withheld) told a panel established to probe various allegations that he was forced to procure several computers the firm did not need because of ‘pressure from above.’ He said, “I received several phone calls to procure commercial quantities of computers despite my explanation that our stores were full of previous stocks and that we had no place to even keep new stocks. They would not listen and I was forced to buy the computers’’.
The firm was not alone. Many public institutions and agencies, including the defunct National Electric Power Authority, NEPA have different sad tales to tell about irregularities in public procurement. Investigations showed that this was common before 1999 because public procurement was not properly managed in Nigeria. In fact, the World Bank report which documented the various lapses established a link between weak public procurement procedures and corruption as well as its far reaching negative consequences on national development.
Specifically, the report stated that for every N1.00 spent, 60kobo was lost to underhand practices and that as high as $10 billion was being lost annually due to fraudulent practices in the award and execution of public contracts through inflation of contract cost, lack of procurement plans, poor project prioritization, poor budgeting processes, lack of competition and value for money and other kinds of manipulations of the procurement and contract award processes.
Determined to tackle the lapses, the Federal Government initiated the Public Procurement Reform as part of its Economic Reform agenda designed to restore due process in the award and execution of government contracts. This led to the setting up of the Budget Monitoring and Price Intelligent Unit, BMPIU also known as Due Process in 2001 to implement the Federal Government’s Public Procurement Reform Policy. The policy was targeted at eliminating or minimising open abuses to known rules, processes and standards in the award and execution of public sector contracts in Nigeria.
The Bureau of Public Procurement stated that, “Following the growing Public demand that the reforms are sustained and institutionalized with legal backing, a Public Procurement Bill was articulated in 2003/2004 by the Leadership of BMPIU and presented to the National Assembly. The Public Procurement Bill was thereafter passed by the National Assembly on the 30th of May, 2007 and subsequently signed into Law by Mr. President on the 4th of June, 2007.
It added that, “The Act, among others emerged with guidelines or steps to guide public procurement in the nation. Specifically, the Act stipulated that public procurement of government agencies should be based on proper need assessment, adequate appropriation, advertisement, transparent prequalification/ tender, bid submission/opening, bid evaluation, tender board/FEC approval and project implementation. The agencies are also expected to provide timely and accurate information to the general public in a way that can enable them to make informed decisions.”
However, while some have complied with the provisions of the Act, many agencies still operate without regard to the said provisions. Specifically, they play according undisclosed rules expected to have culminated to loss in revenue. The inability or unwillingness to place information at public domain at all times has also affected the nation in many ways.
Contrary to the provisions of the nation’s Freedom Information Act, many public institutions have defaulted in the provision of timely information to the public. The 2011 Act stated among others that, “Notwithstanding anything contained in any other Act, law or regulation, the right of any person to access or request information, whether or not contained in any written form, which is in the custody or possession of any public official, agency or institution however described, is established.
But a recent authoritative research conducted to ascertain the level of compliance showed that while many institutions did not respond to request, others delayed more than necessary in responding to request for information which the act seeks to place in the public domain. The Public and Private Development Centre, PPDC, an Abuja-based group that conducted the research ranked transparency across 15 public institutions in Nigeria according to their responsiveness to requests for procurement information.
The PPDC stated in its latest report made available to National Mirror that the Nigerian Electricity Regulation Commission, NERC lead others as the most transparent public institution in the nation. The report stated, “The Nigerian National Petroleum Corporation, NNPC, the Federal Ministry of Education and the Federal Ministry of Health were ranked as the least transparent as they did not provide any response whatsoever to requests for procurement information, neither did they provide other viable avenues for procurement information to be sought.
The PPDC stated that the Federal Roads Maintenance Agency was ranked as the 2nd least transparent agency along with the Federal Ministry of Works, the Petroleum Development Technology Fund and the Ministry of Petroleum Resources whilst the Rural Electrification Agency, REA trailed NEITI, NERC and NAC as one of the most transparent public institutions. It stated that the Power Holding Company of Nigeria, PHCN and National Agency for Food and Drug Administration and Control, NAFDAC scored midway between the most transparent and the least transparent ministries.
The PPDC maintained that, “The surveyed public institutions were ranked based on four criteria which are proactive disclosure, responsiveness to requests for information, the cost of disclosure to the requester and the level of disclosure. It stated that of all the public institutions surveyed, none received a healthy report for proactive disclosure of procurement information as their procurement plans were not readily available. The PPDC stated, “Although the federal budget, advertisements in newspapers and advertisements are available online, it is hard to tell whether every procurement process for the year has been advertised when procurement plans cannot be accessed.
It maintained that NERC and others responded within seven and 14 days to requests for procurement information made pursuant to the FOI Act whilst FERMA responded only once to five requests for information without providing any part of the information sought. The PPDC stated that although the NPHCDA responded to request for information, the responses took longer than 14 days while the Federal Ministry of Health, the Federal Ministry of Education and the Nigerian National Petroleum Corporation made no response to multiple requests for procurement information.
The PPDC stated that on the other hand, the Federal Ministry of Works responded to a request for procurement information concerning the contract records for the Lagos-Ibadan expressway after four reminders. It stated that, “The highly anticipated response did not however, meet the expectations of the requesters as the Ministry of works only affirmed their commitment to transparency and sought to know the legal identity of the requesting organization without providing any information on the requested contract documents for the Lagos- Ibadan expressway.
The PPDC stated that regarding the National Agency for Food and Drug Administration and Control, partial information was provided concerning preevaluation processes; however, after the contract was awarded subsequent documents such as contract award documents, schedule of payments, etc. have not been provided despite 6 reminders to NAFDAC. It stated that although the Federal Ministry of Mines and Steel Development has informed the requester that procurement records would be provided, the high cost of N65,000 charged to inspect the records has hindered any form of access so far. The PPDC stated, “Full disclosure of information has also being attained from the Power Holding Company of Nigeria although that level of disclosure took 9 months and followed a court order for the records to be disclosed.
It maintained that although the Ministry of Mines and Steel Development responded to each of the four requests for procurement information, the responses by the Ministry reiterated that the procurement information sought could only be inspected and accessed after a fee of 65,000 was paid. The PPDC stated that it has been noted that procurement and contract records fall under the extensive proactive disclosure list provided in Section 2 of the Freedom of Information Act, 2011. The body stated, “Consequently, public institutions who do not meet their proactive disclosure obligations ought not to require requesters to pay the cost of duplication when specific requests for information pertaining to such documents are made.
It stated that the rationale for rating transparency levels in the public procurement process has arisen because public expenditure that is budgeted for the provision of public goods is required to pass through the procurement process. The PPDC maintained that accordingly, public scrutiny at the procurement process stage is critical to value-driven delivery and performance at the stage of contract implementation. It maintained that the public procurement process is also a great avenue to rate transparency because the information sought is one that is available as long as due process in the award of public contracts has been followed.
The PPDC stated, “As a result, it places no extra burden on the public institution to prepare documentation that has already been prepared. The Public and Private Development Centre is a citizen sector organization established to increase citizens’ participation in governance and development in a way that improves the integrity of public and private sector governance processes particularly through procurement monitoring.”
However, the emergence of NERC as the most transparent institution is important, particularly because of the central place it occupies in the power sector. As a regulator, the Commission has the mandate to carry out important roles as defined in the EPSR Act, 2005. For instance, It has the mandate to ensure constant and reliable power supply through appropriate regulations. The Commission is also entrusted with encouraging the participation of private investors in the electricity market. It ensures that regulations which encourage profitable pricing and effective competition among market players are developed and implemented while appropriate codes of conduct and rules of engagement are enforced to ensure an efficient and investorfriendly market. The commission is to monitor industry operators and prevent abuse of the market power as well as ensures that consumers fulfill their obligations by paying for power.
It is against this backdrop that many observers and stakeholders believe the commission would be in a position to influence the realisation of transparency and accountability in the sector. For instance, the 14 man delegation of the House Committee on Power which visited NERC a few weeks ago encouraged the commission to continue to drive transparency and accountability in the sector. The Chairman, House Committee on Power, Hon Patrick Ikhariale called on the Commission’s to pursue due diligence and transparency in the post privatisation of the power sector.
The Chairman and CEO of NERC, Dr. Sam Amadi said the promotion of FOI was targeted at enhancing good governance in the nation. Amadi said that “the whole idea is to create an open government because Freedom of Information greatly improves the quality of governance”.
Amadi listed the various actions undertaken by the Commission in pursuit of the prescriptions of the FOI law, including being the first and only agency in Nigeria to publicly declare a code of conduct that commits every staff of the commission to the highest standards of disclosure and transparency. He said that NERC has designated a desk officer for the FOI and has trained relevant officers locally and international in order to ensure responsiveness to FOI request.
He assured the committee that NERC would mandate complete disclosures for all licensees in the electricity sector in order to ensure effective energy audit and ensure quality services to consumers. He also advised chief executives to know that without transformation in the corporate culture, it would be difficult for their agencies to make the paradigm shift required to fully embrace the FOI law, and by extension sustainable development of the nation’s emerging power sector.
Information from National Mirror was used in this report.