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EFFECT OF THE NEW PUBLIC PROCUREMENT ACT ON GOVERNMENT PURCHASE IN NIGERIA

ABSTRACT

This study on the effect of the New Procurement focused on Imo State Ministry of Health Owerri in Imo State. The study used survey design technique. The population of the study consisted of 88 staff from the three divisions in the ministry while Yaro Yamene formular was used to determine the sample size. Both primary and secondary sources of data were used while a 2 and 3 item structured questionnaire was the main instrument of data collection, the research questions were analyzed with simple percentage and frequency table while research hypothesis were tested with chi-square method at 5 percent level of significance. The major findings of the study were that the New Act finds it difficult to prevail in practice because of the corrupt system made up of officers who only seek for their self enrichment instead of value for money in the award of contracts and that Act has not been fully implemented. It was concluded that the new Procurement Act has the potentials of transforming the present mishaps in government purchases if fully implemented in practice ands was recommended that the various agencies, ministries, departments and functionaries should embrace the submission of the New Procurement Act and put it into practice for better accountability. 

CHAPTER ONE

1.0 INTRODUCTION 

This chapter which introduces the subject matter of this research work “the effect of the New Public Procurement Act on Government Purchase” focuses on the following sub-headings as background of the study, statement of problem, objective of the study, research question, statement of hypothesis, significance of the study, scope of the study, limitations of the study and definition of terms. These areas are critically x rayed below:

1.1 BACKGROUND TO THE STUDY

The government of Chief Olugesun Obasanjo approved the conduct of the Country’s Procurement Report (CPR) between 1999 and 2000. The report made several recommendations resulting in the setting up of the Budget Monitoring and Price Intelligence Unit (Due Process). The administrative implementation of a due process mechanism in the procurement of goods, works and services, and the enactment of the Public Procurement Act 2007, which was passed by the National Assembly in May 2007 and signed into law by Late President Yar’Adua on 4th June, 2007.

Before 2007, there was no statutory provision that directly regulated the award of public contracts in Nigeria and this resulted to an avenue by which government, functionaries rewarded their friends and cronies and by which they too amassed wealth. The extent of corruption in the procurement system and its effect on the economy made the federal government to commission the World Bank in 1999 in collaboration with some private sector specialist, to review the country’s public sector procurement structure, including the existing, legal framework, organizational responsibilities and capabilities and present procedures and practices and how they made differ from formal rules and procedures. The report of the review was presented with certain recommendations and however, on the 4th of June the then president, Umar Musa Yar’Adua signed into law the new Public Procurement Act (PPA) which is the first procurement law in the country’s history.

However, the Act (PPA) is expected to be binding on all government agencies, ministries, department and parastatals, who engage in government purchase or purchase for public usage, hence the apt essence of this research work. The Ministry Of Health Owerri dated back to 1976 when Imo State was created. The ministry in 1977 moved to its permanent site in Orlu Road Secretariat Owerri. Today the ministry is operating from the New Secretariat in Port Harcourt Road in New Owerri. The ministry has three divisions namely: Medical division, pharmacy division and public health division. The number one man responsible for policy and decision making as well as all actions of the ministry is the Honorable Commissioner of Health, in the person of Doctor Obi Njoku, the inline of authority is the permanent secretary, Doctor John Ihebrenme. The ministry is divided into eight (8) department namely, public health/primary health care, nursery service, vector control laboratory service, administration and finance planning search and statistic, accounting, drug administration and medical services department. The supply division is attached to the department of administration and financed under the supply section. There are principal store officers, higher store officers, store officers, store keepers and store attendants.

1.2 STATEMENT OF PROBLEM 

The enactment of the Public Procurement Act (PPA) is a great opportunity for Nigeria to develop as a nation, because national resources will be allocated on just and transparent manner do satisfy the needs of the people and the more towards government accountability will be guaranteed as the people have a role to monitor the use of their resources. However, from the findings at Ministry of Health, it can be generally concluded that the greatest challenges to the Act are:

1. The relevance on the part of the government, its agencies and officials to embrace in totality the full implementation of the Public Procurement Act.

2. Inability of organizations and suppliers to understand the Public Procurement Act 2007.

3. The issue of corruption and politic in government functionaries.

4. The involvement of government in the award of contracts in Nigeria contrary to the procurement law.

5. Lack of proper training and orientation.

1.3 OBJECTIVE OF THE STUDY 

The then president of Nigeria, Alhaji Umar Musa Yar’Adua signed into law the public Procurement Act (PPA) on the 4th of June 2007 with the aim of addressing the inadequacies of the Procurement Practice In Nigeria by ensuring transparency, competitiveness value for money and professionalism in the public sector/government procurement systems. This project has its objective as:

1. To clarify what sound public procurement is all about as contained in the new Public Procurement Act. 

2. To determine the challenges facing the public procurement functions in government ministries and departments. 

3. To identify the various challenges militating against the implementation of the New Act.

4. To ascertain the extent to which the new public Procurement Act has impacted on government purchase in Nigeria.

5. To indicate the various functionaries and authorities responsible for implementing the new Public Procurement Act in government ministries and departments.

1.4 RESEARCH QUESTIONS

The following questions are to be critically addressed in this project work:

1. What is sound public procurement? 

2. What are the challenges facing the procurement function in government ministries and departments? 

3. What challenges militate against the implementation of the new Act?

4. What effect has the new Act made since it became a law?

5. Who is responsible for implementing the Act in government ministries and departments?

1.5 STATEMENT OF HYPOTHESIS 

Ho: The new Procurement Act does not have the capacity to transform the procurement functions in government ministries if implemented. 

Ho: The New act has not been accorded the necessary recognition for full implementation in government ministries.

Hi: The new act has received enough recognition for full implementation in government ministries.

1.6 SIGNIFICANCE OF THE STUDY 

The benefits abound in the findings and recommendations of this project cuts across individual corporate bodies, government agencies and departments. 1. The Researcher: The study sieve as a pre-requisite for the award of Higher National Diploma (HND) certificate by the National Board for Technical Education (NBTE). 2. Other students: This research work will sieves as a source of information (data bank) for some other students who may be embarking on further research on the topic or related topic. It is also an eye opener to students with regards to public procurement and the new regime.
3. Government ministries/department as case study: The study enables the firm of study to measure its performance and make necessary inputs through its recommendations. 4. The Industry: This study will create the necessary awareness and recommendation that would enable firms within the procurement industry to toe the paid of due process in public procurement as provided for, in the new Act.

1.7 SCOPE OF THE STUDY

This research is intended to cover the Imo State Ministry of Health and various foundational departments. The study tends to ascertain the essence, acceptability, coverage and effect of the new Public Procurement Act on government purchases in the above mentioned ministry.

1.8 LIMITATION OF THE STUDY 

The perfect actualization of this research work would have been a reality if not for certain constraints. 1. During the course of survey at the Ministry of Health and various departments, getting the exact and required information was quite difficult because the custodians of such information were not very liberal to the release of the required information. 2. The span of time available to complete this research work was quite limited combing the academic activities with research work. 3. It was not possible to cover quire a reasonable number of areas due to financial constraints on the part of the researcher hence the researcher needed to be travelling from one location to another, making some contacts.

1.9 DEFINITION OF TERMS 

1. Pubic procurement: Blacksmith (2014:24) defined public procurement as the process whereby the public sector organizations acquires goods, services and works from parties. It refers to government activity of purchasing of goods and services which is required in order to carry out its functions/activities. 

2. Procurement Act: This is a body of principles, statutory established to regulate and guide the actors and activities in public procurement. 

3. Procurement Assessment Report: This is an analysis tool used in diagnosing the health of the existing procurement system in a country for possible modifications to be effected.

4. Due Process: Uzor A.M. (2014:521) Due process is a mechanism for ensuring strict compliance with the openness, competition and cost accuracy rules and procedures that should guide contract award in the public sector within the Federal Government in Nigeria.

5. Hypothesis: It is a proposed explanation made on the basis of limited evidence as a starting point for further investigation.

6. Enactment: This is the process of making a law official – Oxford Advanced Learners Dictionary 6th ed.

7. Cronies: person

8. Statutory provision: This is a condition that is fixed by law and must be performed according to dictates of the law.

9. Trigger: Something that causes a particular reaction and development especially a bad one.

10. Amass: To collect something especially in large quantities 

11. Apt: Suitable or appropriate in the circumstances

12. Lackadaisical: Not showing enough care or enthusiasm 

13. Public Accountability: The obligations of public enterprises and agencies (who are entrusted with procurement resources to be answerable for fiscal and social responsibilities to them.

14. Procurement proceeding: Means the initiation of the process of effecting procurement up to award of procurement contract.

15. Relevant authority: It reduces economics and finance crime commission (EFC) and Independence Corrupt Practice Commission (ICPC).

16. Debarment: It is a state of being excluded from enjoying certain possessions, rights, privileges or practices and the net of prevention by legal means.

17. Blacklisting: It is process of listing or registering of entities or people for one reason or another, are being denies a particular privilege, services, mobility accessing or recognition.

18. Procuring entities: These are individuals, corporate bodies, agencies etc charged with the distinctive function of procurement.

19. Value of money: This is the term which describes the quality of a product or services in terms of its ability to satisfy the purpose of its purchase.

20. Constraint: A thing that limits or restricts something or someone’s freedom to do something.

21. Transparency: The quality of something such a situation or an argument that makes it easy to understand.

22. Custodian: A person who is responsible for taking care of something

23. Liberal: Generous

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