The greatest amount of financial corruption resides in national procurement systems. Generally, as much as 20-60 percent of public spending on procurement is lost due to leakages and malpractices in developing countries. In Nigeria, in spite of the huge government budgets over the years for the provision of goods, works, and services, there has been a discernibly wide expectation gap. According to the World Bank's Country Procurement Assessment Report (CPAR) elaborated in 1999, out of every 1.00 Naira spent by Government 60 kobos were being lost to underhand practices.
It is not surprising therefore that the estimated public procurement loss (in millions USD) is greater than the official development assistance for the period between 1960 and 2011 as depicted in the figure below.
Nigeria has lost several hundred billion Naira over the last decade due to flagrant abuse of procedures for the award of public contracts, inflation of contracts, lack of transparency, lack of competence-based evaluation, and lack of merit, which is the fundamental criteria for the awarding of public contracts. This finding has made urgent reform of the procurement system an imperative if Nigeria is to reduce the large scale corruption and waste that has reduced the efficiency of the Nigerian public sector. These reasons brought about the birth of Bureau of Public Procurement (BPP) in 2001.
The Nigerian Bureau of Public Procurement (BPP) plays a significant role in ensuring efficient and integrity-based monitoring of the implementation of all Federal Government capital projects. The mission of BPP is to establish an open, transparent and competitive federal procurement system that is integration-driven, upholds spending within appropriations and ensures speedy delivery of projects, thus achieving value for money without sacrificing quality and standards. This mission will be difficult to achieve without deployment of a Databank Management System (public procurement review software and adequate ICT infrastructure). Such a system will assist BPP in ensuring strict compliance with openness, competition, cost accuracy rules and procedures that should guide contract awards within the Federal Government of Nigeria. Therefore any improvements in the public procurement system are expected to have a direct and beneficial effect on the overall economic situation of the country.
* Estimated PP Loss (Min, Max): Despite the difficulties in measurement, international comparison covering a wide set of countries is possible when one considers central government procurement only. The size of central government purchases varies between five percent (5%) and eight percent (8%) of GDP for most industrialized countries. For the Middle East and Africa, the magnitude of central government purchases ranges from between nine percent (9%) and thirteen percent (13%) of GDP. According to a World Bank Country Procurement Assessment survey conducted in 1999, out of every 1.00 Naira spent by Government 60 kobos were being lost to underhand practices.
** Foreign Aid or Official Development Assistance consists of loans and grants by official and non-official agencies of the members of the Development Assistance Committee.
1- Budget Monitoring and Price Intelligent Unit (BMPIU known as Due Process) was setup in 2001
2 - To institutionalize the operations of BMPIU, the Public Procurement Bill was passed by the National Assembly on the 30th of May, 2007 and subsequently signed into Law on the 4th of June, 2007
1- Bureau of Public Procurement
2- National Council on PP (NCPP)
Nigeria - Country procurement assessment report (CPAR) (English)
Nigeria - Country procurement assessment report (CPAR) (Vol. 2) (English)