SYSTEMIC CORRUPTION AND PUBLIC PROCUREMENT IN

DEVELOPING COUNTRIES: ARE THERE ANY SOLUTIONS?

Sope Williams-Elegbe*

Abstract
Corruption affects development and the quality of life of citizens in
affected countries. The increase in anti-corruption measures globally
reflects a consensus that corruption is pervasive and costly. Public
procurement is one area in which corruption manifests, due to the sums of
money involved; the asymmetry of information; and the bureaucratic
nature of decision-making, which presents opportunities for abuse. In
developing countries, procurement corruption is rife due also to institutional
weaknesses, the lack of enforced accountability mechanisms, and a culture
of silence in relation to public sector malfeasance. This paper examines
procurement corruption in countries with systemic corruption, using Nigeria
as a case study, to determine how to reduce public procurement
corruption. The paper will highlight the prevalent corrupt schemes in public
procurement in Nigeria, examine the reasons for the failure of state anticorruption institutions, and analyze the kinds of initiatives that reduced
procurement corruption and increased accountability in other countries and
the utility of adopting such mechanisms in the Nigerian context.
INTRODUCTION
There is little gainsaying the fact that corruption in Nigeria has reached
epidemic proportions (Smith 2007, 113, Apampa, 2005). Corruption is
systemic (or endemic) where bribery, on a large or small scale, is routine
in dealings between the public sector and firms or individuals. Where
systemic corruption exists, formal and informal rules are at odds with one
another; bribery may be illegal but is understood by everyone to be
routine in transactions with the government. Another kind of equilibrium
prevails, a systemic corruption "trap" in which the incentives are strong
for firms, individuals, and officials to comply with and not fight the system
(World Bank, 1997). According to Klitgaard, a distinguishing characteristic
of systemic corruption is that the many parts of the government that are
supposed to prevent corruption have themselves become corrupted
budgeting, auditing, inspection, monitoring, evaluation, and enforcement.
(Klitgaard, 2004). This affects the efficacy of normal anti-corruption
enforcement
and makes the anti-corruption task much more difficult
(Klitgaard, 2004).
The systemic nature of corruption in Nigeria can be seen in the countrys
consistently low scores in the Corruption Perceptions Index1 as well as the
shocking results of the 2013 Global Corruption Barometer, which tracks
public opinion on corruption; and the sheer number of corruption scandals
and allegations reported during the last decade (Okonjo- Iweala, 2012, 8194). Although these do not give a complete picture, they provide a snapshot
of what the corruption landscape in Nigeria looks like. There is also a
growing body of academic and other literature, which traces the origins of
corruption in Nigeria and highlights, examines and decries the extent to
which corruption manifests in Nigeria (Salisu, 2000; Oji & Oji, 2010; Smith,
2007; Okonjo-Iweala, 2012; Rotberg, 2009, Smith
2009).

Sope Williams-Elegbe. PhD is a Senior Lecturer in Law at the University of Lagos, Nigeria, a
public procurement consultant, and a Research Fellow & Deputy Director of the African
Public Procurement Regulation Research Unit at Stellenbosch University, South Africa. Her
teaching and research interests are in public procurement, anti-corruption law, business
ethics, corporate governance, and commercial law. sopewe@gmail.com

Table 1: Nigeria in the Corruption Perceptions Index 2005-2015.

Year

Rank

Score

2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: Transparency

152/158
142/163
147/179
121/180
130/180
134/178
143/182
139/174
144/175
136/174
136/168
International

1.9/10
2.2/10
2.2/10
2.7/10
2.5/10
2.4/10
2.4/10
27/100
25/100
27/100
26/100

As can be seen from the table, there has not been an appreciable
improvement of the perceptions of corruption in Nigeria in the highlighted
period. Further, in 2013, the latest edition of the Global Corruption
Barometer reported that 72% of Nigerians felt that corruption was on the
increase, with the view that the most corrupt institutions were political
parties (94%); the police (92%); the legislature (73%); and the civil service
(69%). This paints a wholly dismal picture of Nigerians experience of and
interaction with the government and provides a clue as to the high level
of public disillusionment with the public sector and a feeling that there is
little that ordinary citizens can do in the fight against corruption (Global
Corruption Barometer, 2013; Smith, 2009). The results of these surveys
are supported by the research by Persson et al, which revealed that in
developing countries with systemic corruption; the problem of corruption
seems to have become worse with efforts to curb it (Persson et al, 2013).
That certainly seems to be case in Nigeria where public sector corruption
scandals in the last decade now involve no less than millions of dollars or
billions of naira (Obuah, 2010).2
One of the main areas in which corruption manifests is in public
procurement (Williams- Elegbe, 2012, 25; Okonjo-Iweala, 2012, 88; Suberu,
2009, 266; Ware et al, 2007; Klitgaard, 1988; Rose-Ackerman, 1999; Thai,
2005). In Nigeria, access to and manipulation of the government-spending
process has become the gateway to fortune. (Salisu, 2000). Thus,
corruption in the public sector is hugely dependent on the manipulation
of the procurement framework and public financial management more
generally. Despite legislative intervention to curb the abuses in the public
procurement system, through the passage of the Public Procurement Act in
2007 (PPA), which mandates the use of competitive processes in public
procurement, criminalizes a wide range of procurement-related offences,
and creates a procurement regulatory institution, (Williams-Elegbe, 2012a)
it is clear that public procurement in Nigeria continues to be plagued by
corruption, fraud and unethical practices.
It is important at this juncture to mention that despite an extensive (and
comprehensive) legal and institutional framework against corruption in
Nigeria (Bello, 2014, Okogbule, 2006), very little progress has ben made in
the fight against corruption. The reason for this is not complex. The study
by Persson conceived of systemic corruption as a problem of the collective
in affected societies, thus moving away from the principal-agent paradigm
that had been used to characterize corruption in economic literature for

decades (Groenendijk, 1997). Where corruption manifests as a collective

action problem, this leads to a breakdown of even panoptic anti-corruption
measures based on the principal-agent paradigm as there are no principled
principals in existence who
can enforce the anti-corruption regime
(Persson et al, 2013, Klitgaard, 2004). This ultimately

means that the formal anti-corruption prescripts are flouted with impunity,
or ignored at best.
Beyond the absence of ethical principals to enforce the anti-corruption
regime, Soudry opined that it is in fact an anomaly to speak of principals
as a homogenous group, as what exists in fact is a diverse collection of
principals,
composed
of
interests represented by pressure groups
influencing politicians and the general public. (Soudry, 2007, 435-436).
The upshot is that where there is systemic corruption, there are few
persons or even institutions committed to integrity, and the consequent
lack of a critical mass of enforcers and enforcement. Further, the interests
that are represented in government are likely to be uninterested in
dismantling a corrupt system that they are content to profit from. It thus
becomes necessary to base anti-corruption efforts on a system that as
much as is possible, is not wholly reliant on the traditional (public sector)
principals or interests.
Procurement
corruption
produces
devastating
consequences
for
development. One issue, which remains unclear, is the effect that
development has on corruption. Whilst there is much literature devoted to
the effect of corruption on development (Bayley, 1966; Mauro, 1997;
Bardhan, 1997; Theobald, 1990), with the conclusion that reforms
necessary for development are likely to fail because of corruption, less
academic information exists on whether development itself creates more
corruption, or at least more awareness of corruption through increased
agitation for transparency, good governance and stronger action over
corruption. It certainly appears to be the case that an improvement in
development indicators creates more of a focus on corruption as a result of
factors such as better literacy, and increased access to technology and
information, which provide citizens with the tools needed to demand
accountability and the platforms necessary to do this (Heroles, 2012).
This paper will begin by highlighting some of the corrupt procurement
schemes that are prevalent in Nigeria, briefly highlight the challenges faced
by state institutional anti- corruption organisations and will then discuss
anti-corruption initiatives that have worked in the procurement context in
other jurisdictions and examine whether such measures will be useful in
the Nigerian context. One thing is clear, as was stated by Nigerias President,
Muhammadu Buhari, who in 2015 was elected on an anti-corruption
platform that if Nigeria does not kill corruption, corruption will kill
Nigeria. (Buhari, 2015). This paper is an attempt to find ways to kill
procurement corruption in Nigeria.

CORRUPT SCHEMES IN PUBLIC PROCUREMENT IN NIGERIA

There are several ways by which both the public and the private sector
may manipulate public procurement for illicit ends. Corruption schemes in
public procurement are often similar in form, shape, nature, and
anatomical structure worldwide (Ware et al, 2007, 299). This section will
examine the more common schemes used
in
Nigerian procurement,
highlighting the Nigerian contextual approach to these schemes with a view
to putting procurement corruption into perspective. As will be seen, there
are several areas of overlap between the schemes and they do not
necessarily fit into neat compartments, but are here grouped and
categorized for ease of reference. Most corruption schemes are in fact a

composite of different kinds of corruption, making it difficult to unravel. It

is thus often the case that demands or offers for illegal payments are
accompanied by bid rigging or other anti-competitive schemes and fraud in
documentation and contract and financial management to cover up the
bribery and bid rigging (INT, 2009; World Bank, 2013). It may be noted
also that these schemes may be perpetuated by either the public or
private sector participants acting alone, or with the participants
collaborating to effectuate the corrupt scheme.

i.

Bribes and kickbacks: These are a staple in the corrupt

procurement diet of any country and are often requested or paid in
order to obtain a government contract, and in some jurisdictions in
order to participate in the bidding process. In some cases, payment
may be made for inside information or to have tailor-made bidding
specifications (Rose-Ackerman, 1999, 27-38). Bribery schemes have
become increasingly more difficult to trace and understand, given the
use of kickback brokers (Ware et al, 2007, 299) or agents who
interface between the bidding company and the public sector. It
should be noted that recent anti- corruption legislation such as the
UK Bribery Act 2010, criminalize activities of such agents and
representatives, thus blocking a loophole in the criminalization of
foreign bribery. In Nigeria, the secretive nature of bribery schemes
in public procurement and inadequate publication of government
information makes it difficult to uncover bribery schemes. However,
investigations and prosecutions by the US government provide an
indication into the scale of bribery in Nigerian federal procurement.
For instance starting from a 1994 bid to build a $2 billion natural
gas plant for the Nigerian government, Halliburton was found to have
channeled $182 million dollars to several former Nigerian Presidents
and officials through an agent (US DOJ, 2009). Although Halliburton
faced stiff penalties in the US for its role in this scandal, (US DOJ,
2009) in Nigeria none of the officials named in investigations have
been indicted and in January 2016, the current President, demanded
that the files be re-opened as part of his anti-corruption stance.
Another case involving Airbel Group Ltd highlighted bribes totaling
$2.1 million bribes paid to Nigerian Customs officials and
government officials in relation to oil exploration contracts (US DOJ,
2008). In 2009, an executive of Willbros International Inc. admitted to
paying bribes worth over $6 million to officials in Nigerias state
owned petroleum corporation to obtain pipeline construction contracts
(US DOJ 2009a). In 2010, Panalpina World Transport admitted to
paying bribes worth $27 million to public officials in seven countries,
including Nigeria (US DOJ 2010). Whilst these cases mentioned
involve
foreign
participants,
the
limited
anti-corruption
investigations, and enforcement in public procurement in Nigeria
mean that there is little information on bribery by domestic firms,
but anecdotal evidence suggests that such practices are thriving in
the procurement market.

ii.

Political pressure, conflicts of interest and fronting: Like many

developing countries in Africa, (Williams-Elegbe,
2015)
Nigeria
undertook
procurement reforms in order to inter alia make
procurement fit for purpose and less prone to corruption, fraud and
mismanagement and assist in better managing resources to meet
developmental outcomes (Basheka, 2009). During the procurement
reform process, the World Bank Country Procurement Assessment
Report (CPAR) on Nigeria highlighted political interference and the
operational involvement of politicians in the procurement process as
one of the risk areas for and causative factors of corruption in
procurement (World Bank 2000, Williams-Elegbe, 2013). Although
politics is important for an understanding of public procurement
(Spiller, 2008), the intervention of politicians in the bureaucratic
decision-making process creates distortions and opens opportunities
for political corruption (Soudry, 2007, 438). The CPAR recommended
that the approval required by politicians for contracts over a certain

threshold be discontinued. However, this recommendation was not

implemented and politicians are required to approve contracts over a
certain threshold (section 17 PPA) and in doing so are able to
improperly influence procurement outcomes (Williams-Elegbe 2012a).
There are different ways in which political pressure may affect the
procurement process. In the first place, the approvals authority for
contracts over defined threshold in ministries is the Ministerial
Tenders Board, which is of course

headed by a Minister, with the power to authorize contract awards.

Secondly, contracts that have been reviewed by the regulatory
authority
(the
Bureau
of Public Procurement) require further
approval by the Federal Executive Council (ministers in council). This
approval process is often used as a bargaining tool between
ministers on such contracts. Thirdly, and perhaps, the most
objectionable scheme is the practice whereby a proportion of an
agencys contracts are earmarked for the Minister, the Permanent
Secretary, and other top officials to be awarded to their nominees.
Although political pressure in procurement is not uncommon, (Ware
et al, 2007, 296), in Nigeria, this is compounded by the weak
institutions and the low level of anti-corruption enforcement. Apart
from these factors, the extensive political impunity and lack of
accountability that pervades the public sector in Nigeria (Suberu,
2009; Smith, 2009) also means that where procurement officers are
pressured to award contracts to companies in which officials and
politicians have an interest, there are no consequences for such
breaches of the rules. In such cases, although the formal
procurement procedures are followed by the government agency in
question, the entire process is a fait accompli despite the outward
show of legality, (Blundo, 2006, 228) transparency and procedural
regularity through the tender advertisement, public bid opening and
constitution of tender evaluation committees as is required by law.3
This manipulation of the procurement process is also a form of bidrigging.
Other ways in which conflicts of interest manifest is the situation
where seemingly independent private companies act as a front for
politicians and are awarded public contracts (Williams-Elegbe,
2012, 26). Fronting also occurs where a politician or other official
desires the award of the contract to a particular company, but that
company does not posses the statutory documentation required to
bid for the contract. In such cases, another company is introduced as
the bidder and awarded the contract; but the actual implementation
of the contract is done by the preferred company, which then pays
the contract winner a fee for its participation in the scheme.

iii.

Bid-rigging: This is also a common private sector-led method of

manipulating the procurement process and takes various forms, with
the ultimate aim that a preselected bidder obtains the contract
(Ware et al, 2007, 301). There is a plethora of literature, which
describes these schemes, which will not be restated here, but
suffice it to say that such schemes restrict the competition that
procurement procedures are designed to facilitate and often
increase the prices paid for public goods and services (McAfee and
McMillan, 1992; Albano et al, 2006; Kovacic, 2006; INT, 2009; World
Bank, 2013). A prevalent bid-rigging scheme in Nigeria is the
practice wherein a contractor, with or without the knowledge of the
procurement officials submits more than one bid for the same lot,
thus increasing its chances of securing the contract. In such cases,
it is very difficult to decipher when this has occurred as procurement
officials are not required to investigate company ownerships.
Multiple bidding schemes may also be accepted by procurement
officials as a result of political pressure described above. In
addition, procurement officers have been known to tamper with

bidding documents after the submission of bids, by inserting or

deleting information into the bidding documents in order to ensure
that the preferred firm obtains the contract.

iv.

Illegal assignment of government contracts (also known as the sale

of contract papers): This is a scheme whereby contractors or
suppliers who succeed in obtaining government contracts assign or
sell the rights to the contract to a third

party for a fee. Although this practice in contract law is referred to

as an assignment, in law, a party to a contract may only assign the
benefit, but not the burden of a contract, and ought to do so with
the consent of the other contracting party.4 However, in Nigeria, both
the benefits (i.e. the right to payment) and the burdens (the
obligation to perform the contract) are transferred to a third party
without the formal consent of the government, but with the
informal acquiescence of procurement officials. The motivation for
this scheme is derived from the frequent manipulation of the
procurement process either through conflicts of interest or political
pressure, which means that in some cases, the persons who obtain
government contracts do not have the interest, skill, competence or
expertise to deliver on the contract, where the contract was obtained
as a result of a favour or a relationship with a highly placed official
or politician. Thus, once the contract is obtained, the winning bidder,
with no desire or interest to fulfill the contract, sells the rights to
the contract to a person who desires to fulfill and extracts a small
rent for this. This of course affects the profitability on the contract
leading to low quality performance and deliberately poor contract
management, described below. The prevalence of this scheme can
be seen in the existence of a permitted informal gathering for the
sale of contract papers known as The Exchange within the office
premises of the Federal Capital Development Authority (FCDA)5 in
Abuja.

v.

Contract splitting: As is the case in many jurisdictions, contracts

over a certain threshold are subject to more formal processes and
more stringent approval mechanisms. Nigeria is no different in this
regard and by virtue of a circular dated 11th March 2009, the
Secretary to the Government of the Federation issued the thresholds
for prior review of contracts (i.e. the issuance of a certificate of
no- objection) and contract approval. In a nutshell, prior review by
the Bureau of Public Procurement is required for goods contracts
over a NGN 100 million, works contracts over NGN 500 million, nonconsultant services over NGN 100 million and consultant services
over NGN 100 million.6 These, the contracts also have to be
approved by the Federal Executive Council. In order to circumvent
the thresholds for prior review and approval by FEC, some
government agencies spilt contracts into several lots, to avoid the
regulatory review mechanism and in order to manipulate the
processes for the award of those contracts. It must be noted here
that for contracts below the threshold, the regulatory agency is
unable to track those contracts and will only be aware of illegal or
unethical conduct where there is a complaint by another bidder, or
during the ex post procurement audit of the government agency in
question. This provides government agencies with a lot of latitude to
manipulate processes for below threshold contracts.

vi.

Contractual variations and price increases: Contractual variations are

a huge problem in Nigerian procurement and are used as a way of
rewarding crony contractors, who have obtained a contract by being
the lowest evaluated bidder, but are also required to distribute the
proceeds of such a contract to politicians or officials as bribes or
gifts. In order to make this possible, contractual variations and
price increases are approved after the conclusion of the contract.
The problem became so widespread that in 2009, there were two

circulars, dated 11th March 2009 and 25th August 2009, which
prohibited variations in existing contracts without review by the
Bureau of Public Procurement. Further, another government circular
dated 25th July 2013, requires that Presidential approval is required
for any revision to a contract price above 15% of the original sum
and/or above N1 billion before such is reviewed by the BPP. The
reason for this directive requiring Presidential approval was merely to
limit the number of government agencies that were approaching the
BPP for contractual variations subsequent to the 2009 circulars.
Evidence from interviews conducted with BPP officials in

2015 indicate that this circular served its purpose and there are
fewer requested variations over the limit.

vii.

Deliberately poor contract management: Contract management is an

important part of the procurement process, but the one that
receives the least attention in developing country legislative
frameworks on procurement. In most countries, the regulatory
framework on public procurement ends at the point of the award
of contract, thus for the most part omitting any prescripts on
contract management and administration. The reason for this
approach may be purely historical; in countries that belong to the
Commonwealth as a result of past colonization by Great Britain, the
received common law in those countries, which for a large part
governs the post-colonial legal system applies administrative (or
public) law to the formation of government contracts and the private
law of contracts to the administration and management of these
contracts.7 It is thus believed that the private law of contract and
the specific terms of the contract between the government agency
and the private supplier or contractor will suffice to ensure the
proper management of the contract. However in countries that are
affected by systemic corruption, this belief is not borne out in
practice, and the contract management phase of the contract may
be deliberately neglected in support of a contractor, permitting the
contractor to skimp on materials and quality and to deliberately
shortchange the government in breach of the procurement contract
without consequence (Aguilar et al, 2000). Poor contract
management also involves permitting contractors to submit fraudulent
invoices and providing certificates of completion, which in fact ought
not to be provided. This may happen in cases where a contractor
has been forced or has agreed to provide a kickback to government
officials or politicians or has paid a bribe upfront and desires to
recoup this cost.

viii.

Poor planning, misrepresenting urgency and

inflating
prices:
Although government agencies in Nigeria are required to submit
annual procurement plans to the BPP and ensure that these plans are
tied to needs and that the budget can support these plans (section
18 PPA), in practice, many government agencies do not submit these
plans as and when due, and instead choose to misrepresent the
urgency for particular procurements in order to utilize emergency
procurement provisions, which obviate the need for competitive
selection methods (sections 42 & 43 PPA). Beyond the failures to
develop and implement robust plans, there is very little by way of
actual demand forecasting that attends the planning process (due in
part to a lack of proper data collection and management), and
many procurement plans are a regurgitation of previous years plans.
Further, another way of diverting financial resources through the
procurement system is by inflating the prices of procurement items
(Okonjo-Iweala, 2012, 88; Obuah, 2010, 23). In the years after the
conclusion of the CPAR mentioned above, it was found that the
prices of common items in Nigeria were often four times as much
as in neighbouring Ghana (Okonjo-Iweala, 2012, 88). It should be
mentioned here that for contracts whose prices are above the
threshold, the BPP is able to conduct a downward review of prices,
where these are found to be in excess of market or internationally

benchmarked prices. However, for contracts below the thresholds,

which do not entail a prior review by BPP, government agencies are
able to enter into contracts at inflated prices.

THE FAILURE OF STATE INSTITUTIONS TO COMBAT SYSTEMIC

CORRUPTION

As can be seen from the foregoing discussion, there are various means
by which both private and public sector participants in the procurement
process may manipulate the procurement process. As was mentioned in
the introduction, one of the problems with combating corruption in
countries where the corruption is systemic is the absence of principled
principals dedicated to enforcing anti-corruption mechanisms. The
traditional state-centric anti-corruption organisations have failed to make
any appreciable changes in the fight against corruption, especially in the
procurement space.
In Nigeria, this is particularly the case as the key anti-corruption agencies,
viz the Economic and Financial Crimes Commission and the Independent
Corrupt Practices and Other Offences Commission are not effectively
insulated from manipulation by the elite (Suberu, 2009, 260) and have in
the past been used as a tool to witch-hunt political adversaries and have
themselves been embroiled in corruption scandals (Suberu, 2009, 264).
Apart from these, institutional and capacity weaknesses, and funding
shortages also constrain the effectiveness of these agencies (Obuah, 2010).
In addition, interviews with former officials of one of these agencies
revealed that where
corruption investigations involved high-ranking
politicians, the anti-corruption agencies were often required to drop these
investigations, and failure to do so led to a transfer, a termination of
employment or forced retirement.
One of the traditional oversight institutions in any democracy is
the
legislature (Stapenhurst et al, 2006, Thai, 2001). By the Nigerian
Constitution, the National Assembly (a bicameral parliament) is charged
with oversight responsibility over all matters. 8 However, the reliance on
the National Assembly to pursue anti-corruption matters is not particularly
effective, given that several former and current members of the National
Assembly themselves currently have or have had pending cases over
corruption allegations and others have in the past been indicted of
corruption or fraud prior to their election to the Assembly (Suberu, 2009,
266, 273).
From all these, it can be seen that in order to properly address procurement
corruption in Nigeria, it is necessary to adopt an approach that relies less
on the formal and statist anti-corruption institutions and to rely more on
anti-corruption frameworks that are outside the government such as civil
society organisations (Johnston, 2005) and the media as well as relying on
citizen power. It will be seen that similar approaches have worked in
other contexts in Nigeria (Williams-Elegbe 2015a) and in the procurement
context in other countries with a corruption problem.

ADDRESSING SYSTEMIC CORRUPTION IN PUBLIC

PROCUREMENT: SOME SOLUTIONS
Corruption control measures in common law countries are often complex,
fragmented and heavily reliant on hierarchy, (Anechiarico & Jacobs, 1996)
investigators and prosecutors. In public procurement, these measures fail,
due in part to the paucity of evidence in corruption cases and in a developing
country context, the precise lack of capacity for tracing financial crimes.
Other factors affecting the efficacy of these measures are the large direct
and indirect costs of combating corruption (Klitgaard, 1988, 27); the time

resources required for investigations in complex cases and the slow nature
of the judicial system. For these reasons as well as the absence of
principals to enforce the anti-corruption regime, the solutions proposed will
rely on activity by civil society and citizens. As was mentioned above, nongovernmental agencies and citizen action have been used to improve
public sector accountability and reduce the scope for abuse by the public
sector in other contexts and are increasingly being used in the procurement
context. In Nigeria, they present the best chance of effecting change in the
procurement system, as long as the action can be sustained. This section
presents an

evaluation of (mostly) citizen-led measures that may be useful to reduce

corruption in the procurement context in Nigeria.

i. Citizen surveillance, monitoring, and participation: Platforms like the

Open Government Partnership and the concomitant commitment by
countries to increase accountability through citizen participation
illustrate that citizens active and direct engagement in government
processes is a growing trend. (Parafina, 2015). In 2009, OECD
countries, in recognizing the importance of citizen engagement in
public
procurement
committed
to
empower
civil
society
organisations, media and the wider public to scrutinize public
procurement (OECD, 2009).
The past 30 years have shown the strength of sustained and
organised citizen action in fields such as environmental conservation
and public accountability (Bohorquez and Devrim 2012, 26). This
model can be replicated and is already being adopted in the
procurement context (Landell-Mills, 2013, 160), and there are some
examples where active citizen participation is required by law or
pursued by civil society (Heroles, 2012). For instance in Mongolia,
the procurement law provides for civil-society co-evaluators in the
bidding process (Parafina, 2015). Similarly, in Mexico, social
witnesses are legally required in all major procurements and this
has significantly reduced the cost of public contracts in Mexico
(Simone & Shah, 2012, 43).
In terms of monitoring, citizen participation could also be included
in the monitoring and evaluation (M&E) of concluded contracts. This
approach would certainly work in Nigeria, where there is an active (if
fragmented) civil society that could be called on to provide
participatory M&E for high value, high impact projects. It may be
noted that section 19 of the Nigerian Public Procurement Act gives
an express mandate to government agencies to invite two
credible persons to participate as observers in every procurement
process. This is currently not being done, but it gives an indication
that citizen surveillance is acceptable in the Nigerian context.
The monitoring of project delivery and completion is one of the ways
to ameliorate the challenges of insufficient or inadequate
procurement data and information in Nigeria. For instance, in the
Philippines, the Bantay Eskuwela initiative involves the local
community in monitoring the purchase of books and school furniture
by the Department of Education. Under this initiative, teachers,
students, parents and other volunteers count books supplied and
verify their quality and quantity (Simone and Shah, 2012, 46).
Similarly, in Kenya, various kinds of mechanisms have been
implemented to monitor procurement spend with some success
(Okello, 2012). This is not to suggest that citizen participation in
procurement monitoring is not without its challenges, the most
obvious ones being the access to information, funding of monitoring
and challenges with monitoring complex procurements, but there are
several ways of circumventing these issues. (Simone and Shah,
2012).

ii. Data driven action: Procurement corruption thrives in opacity, either

through the provision of limited information or obstacles created to

access information. (Blundo, 2006, 238). As a result, timely and
relevant public disclosures of procurement information is an effective
tool for increasing transparency in the procurement process and
limiting the scope for abuse in the procurement process.

In January 2016, a group of Nigerian civil society organisations

launched an online platform known as Budeshi9 (open it in the
Hausa language) to link procurement data to budget data, with the
aim of providing information to the public that could be used in
monitoring procurement contracts and point to red flags. At present,
the platform obtains its datasets through requests under the
Freedom of Information Act, 2011 and thus possesses a limited
number of data sets, but it is also trying to get the public sector to
incorporate Open Contracting Data Standards (OCDS) to improve the
accessibility and usability of procurement data. Whilst the platform is
still in its infancy, the publication of procurement data will lead to
improved outcomes and increased accountability in procurement and
in the public sector more generally. In Nigeria, a civil society
organization called BudgIT.ng has succeeded in the last three years
in improving visibility of the public budgeting process by publishing
simplified infographics on the budget and leading citizen demands
for accountability of spending at local government level (WilliamsElegbe 2015a). BudgIT also has a platform known as TrackaNG,
which enables the public to track capital projects in their community.
Citizens are expected to use the platform to track projects in the
budget and give feedback to the government and their communities
(Tracka 2016). The platform does not however contain a lot of
information, which may point to their inability to obtain the required
data and information from the government.
It may be noted that data-driven action is a sub-set of citizen
action described above, but data-driven action can take any
number of forms depending on the use to which the receiver
decides to put it. The example of BudgIT.com in Nigeria and the
promise shown by Budeshi has shown that there are any number of
organisations
and
individuals
that
are
ready
to
demand
accountability should the right information be put into the public
domain. Some of the information that is currently not easily
accessible in Nigeria is the details of public contract awardees, the
contract value, the final contract values, and the project status. For
large infrastructure projects, especially, which are most prone to
corruption, it will greatly improve procurement outcomes if the
Bureau of Public Procurement can provide this information to the
public in accordance with internationally accepted OCDS, or at least
in a machine readable, accessible format. In the procurement
context, Mexico, (Veerman, 2015), which also has a problem with
systemic corruption has succeeded in improving procurement
outcomes through similar initiatives.

iii. Media engagement and support: Media support in the fight against
corruption is crucial to the success of the fight. In many
jurisdictions, the media are a crucial ally of citizens and civil society
and they are best placed to demand public sector accountability
through investigative reporting (Landell-Mills, 2013, 208). In such
cases, the kind of activity that appears to deliver results and
galvanize subsequent action is long-term sustained reporting. Thus
in countries like South Africa and Nicaragua, long term reporting or
campaigns
against
particular corruption issues have led to
investigations by the Public Ombudsman (in South Africa) and
legislative reform in Nicaragua (Landell-Mills, 2013, 209-210). In
Nigeria, a similar approach of sustained reporting of corruption

1
0

cases would be beneficial to the fight against procurement

corruption, and in recent times, social media platforms have been
used to galvanize citizen action and limited changes in certain
areas, such as in relation to the 2012 Fuel Subsidy Protests and the
still on-going Bring Back out Girls campaign. (Williams-Elegbe,
2015a). However, other forms of media, especially traditional print
media and radio must be willing to devote more attention to these
issues in order to reach the segment of the populace
that
is
currently underserved by the Internet. At present, most

1
0

corruption reporting is limited in scope and duration and many

scandals are removed from the public consciousness within a very
short time.

iv. Procurement oversight institutions: Although the thrust of this

section is to move away from state centric anti-corruption bodies,
one state sponsored organization that is able to reduce the scope for
corruption in public procurement even in countries with systemic
corruption are the procurement regulatory organisations. These
bodies are often constituted with relative independence from the
executive and legislature (Soudry, 2007 438-439) and are designed
to be able to detect and uncover corrupt practices in public
procurement. Nigeria is no exception and the Bureau of Public
Procurement is at the forefront of the fight against procurement
corruption, although it is constrained by funding and capacity
challenges and limited enforcement powers. If the BPP were to be
supported to address some of its institutional weaknesses, it could
record a much higher level of success in the fight against
procurement corruption.

v. The tone from the top: In countries that have successfully moved
away from systemic corruption, this move has often been tied to the
emergence of a leader who was committed to anti-corruption reform
and sent a signal of change to public sector institutions and to
citizens (Klitgaard, 2004). In Nigeria, this is already the case with the
election of President Muhammadu Buhari in 2015. However, his
strident anti-corruption rhetoric
must be accompanied by the
prosecution of important or VIP offenders, focusing on short term
gains and low hanging fruit as well as the mobilization of the
citizens in the fight against corruption (Klitgaard, 2004). Without
these accompanying elements, the change that is wrought by the
rhetoric alone will be very limited. It may be noted that as at
February 2016, the prosecution of several high profile personalities
who subverted procurement processes and diverted state resources
under the previous administration are currently ongoing, although
none of the defendants have been convicted yet. These include the
former National Security Adviser, Col. Sambo Dasuki (rtd.) being
tried for the diversion of USD$322 million meant for the purchase
of arms; the former Minister of State for Finance, Bashir Yuguda;
Olisa Metuh, former National Publicity Secretary of the opposition
Peoples Democratic Party, both being tried for their role in the
arms scandal and several other high profile officials and politicians
who are being tried for various offences ranging from procurement
fraud to money laundering and criminal breach of trust (EFCC, 2016).

CONCLUSION
Addressing systemic corruption in public procurement in developing
countries is a complex, multi-faceted issue, requiring multi-level
approaches, that take into account the economic, social, cultural, and
political nature of this corruption. The failure of the principal-agent
framework in providing effective solutions to systemic corruption presents
additional challenges for developing countries. This means that the usual
approaches, such as improving enforcement, limiting discretion and

21

increasing accountability mechanisms may not yield much fruit as the

officials and politicians responsible for enforcing these frameworks are
themselves part of the problem. This is one reason why this paper
advocates for non state-centric approaches, relying on the public and civil
society to address corruption in public procurement.
It must be noted that these non-state solutions are clearly not a panacea to
all the ills of corruption in public procurement and are not designed to
absolve state institutions and

22

public officials of their responsibilities in relation to procurement corruption,

but are expected to provide the pressure and the impetus required for
the state to respond to demands for more accountability in the
procurement space. Public sector support and willingness to address
corruption at a macro or micro level is always necessary to effectively
combat corruption, even where this support is not forthcoming. At present,
the current Nigerian President is keen to holistically address corruption in
the public sector in Nigeria, and it is hoped that in the long term, both
the government led as well as the citizen led measures against
procurement corruption will produce tangible and measureable results.

NOTES

See Table 1
In 2014, the then Governor of the Central Bank alleged that $20 billion
was missing from government accounts; he was suspended and later
relieved of his duties. In 2014, the whistle was blown on the purchase of
armoured vehicles at an inflated price by the then Minister of Aviation (the
former Minister is now a Senator). In 2016, the former National Security
Adviser was indicted for misappropriating $322 million meant for the
purchase of arms and is currently on trial.
3 Soreide refers to this as the predestination of contracts. See Tina Soreide,
Corruption in Public Procurement. [Online]. Available at
http://www.cmi.no/publications/2004%5Cprocurementsoreidejan2005.pdf
4 A. Obikoya v Wema Bank Ltd SC 61/1986
5 FCDA is the agency responsible for the development of Abuja, the capital
city. It thus issues a vast number or construction and other contracts.
6 As at February 2016, USD$1 = NGN199 at the official rate and NGN345 at
the parallel market.
7 See for instance the South African case of Aquafund (Pty) Ltd v Premier of
the Western Cape [1997] 2 All SA 608 (C) 616e.
8 Sections 4, 88 & 89 Constitution of the Federal Republic of Nigeria, 1999.
Note that by section 88 (2) (b), the National Assembly may direct an
investigation into any matter in order to expose corruption, inefficiency
or waste in the execution or administration of laws within its legislative
competence and in the disbursement or administration of funds
appropriated by it.
9 See www.budeshi.org
1
2

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