Labyrinth Fiduciary System Of Government Expenditure (2)

(By Nicholas Anakwue)

For public expenditure to affect the lives of the citizens, some standard procurement practice has to be inculcated such that will include information gathering, needs assessment, proper planning, public presentation, evaluation of needs, prioritisation of needs, appropriation and transparency in the awards and execution of contracts. The government must ensure that its development plans are generated from the people. They also have to be efficiently, effectively and sincerely executed.

Continued from yesterday

HOWEVER, the infrastructural project constructed in Nigeria seems to be lacking in due procurement process. Timely delivery of project is almost impossible in Nigeria. Most projects originally billed to last for four years have been extended to run for more than 10 years thereby, incurring additional costs on them. The contractors are either not paid on time or they truncate the project as a result of their own inefficiency or political interference of the government. Another labyrinth issue is corruption. Corruption is responsible for most delays in project execution; the perpetrators willingly delay a project so its cost can be inflated. In most cases bribes and some other forms of gratifications are offered to the procuring entity. This starves the contractor of necessary funds to continue with the project.

  The last issue on this subject is lack of integrity and professionalism of the persons handling procurements. Procurements must be handled by professionals who imbibe integrity in their core functions, especially as these concern awards of contract. Paucity of professionals handling government procurement has led to poor performance of projects.

   The labyrinth scenario painted in the foregoing is responsible for the disconnection between what the government claims it is doing and the realities on ground facing the people. Economic indices such as vibrant GDP growth and stable inflation rate can be misleading, if the per-capital income  of the people does not improve, houses are not yet affordable, tertiary education is still very expensive, maternal and child health mortality is still palpable, etc.  Looking at the labyrinth issues surrounding the macro-economic policies of government, we need to consider if the blueprints for economic growth affect the poor. This should be done using the number of poor farmers that can access loans from the banks at low interest rate. Currently, banks prefer to lend to the government rather than to young entrepreneurs. There are young enterprising Nigerians who have brilliant ideas on profitable business ventures but they are yet to benefit from government economic policies, simply because those policies are not pro-poor but for capitalist or commercial elite. Therefore, the growth rates we celebrate are accumulated prosperity of the elite.

  If we are to match government development priorities with its expenditure, there are lacunas that can be taken as labyrinth. Part of the transformation agenda of the President, is to diversify the economy from a mono single source of crude oil earning to incorporate agriculture and local manufacturing. For Agriculture, the transformation agenda proposes an expenditure of N500.79 billion within the mid-term of 2012-2015. The sum was therefore spread as follows, N112.07 billion, N120.841 billion, N136.221 billion and N131.724 billion for the years 2012, 2013, 2014 and 2015 respectively. One would, therefore, expect that, the annual budget should contain agricultural projects that can transform the sector, but this is not the case. Most of the projects listed in the 2012 and 2013 budgets of agriculture consist of complicated padding of line items. Some of them include: construction/provision of roads, construction and provision of office buildings, construction and provisions of infrastructure,   Fencing National Vetinary Research Institutes, Research and Development, Monitoring and Evaluation, Payment of Counterpart Fund on West African Agricultural Rice Production programme.   Others are nebulous repetition of line items such as seeds, seedlings, seed dressing, improved seeds, fertilizer, all repeated over 10 times, with funds in excess of N26 billion allocated against the same items. Such an appropriation can never achieve the target of transforming the agricultural sector rather; mechanised and irrigational farming facilities should have been a top budget priority.

  This scenario cut across other sectors. There is mostly no link between what government promises and what most MDA’s propose to do within the Fiscal year. This is responsible for the difficulty of tracing the impact of government expenditure in the lives of the citizens; especially the poor.

  For public expenditure to affect the lives of the citizens, some standard procurement practice has to be inculcated such that will include information gathering, needs assessment, proper planning, public presentation, evaluation of needs, prioritisation of needs, appropriation and transparency in the awards and execution of contracts. The government must ensure that its development plans are generated from the people. They also have to be efficiently, effectively and sincerely executed.

   The general public has to be carried along in the development agenda of the government. This should be done through wide consultation with the people. The government must gather enough information about the needs of the citizens; otherwise some projects might be executed with little or no value to the people. The government must also make sure that the needs are properly scrutinised in such a way that would aid economic benefits and also bring about the needed development. This can be achieved with the aid of public consultation with professionals and sector specialists.

   In the preparation of policy linking tools, such as the Medium Term Sector Strategy and the Medium Term Expenditure Framework, the needs of the people must form the development priorities of the government. This, therefore, requires that government MDA’s must prepare their procurement plans based on the provisions of the MTSS. Funds attached to specific projects must be scrutinised to meet real cost, the effect of over costing of project has done great harm on the value of the naira. Most projects are quoted in billions whereas the real value of those projects does not go beyond millions.

  The PPA 2007 is a commendable law that stipulates the general criteria for the award of contracts. It provides for advertisement of all bids; all government contracts should be properly advertised so as to afford participation of qualified bidders. It also provides that only the best responsive bidder be awarded the contract. In this case, a responsive bidder is one who has fulfilled all the necessary requirements of the procuring entity, in terms of specifications, quality, least price and timely submission of tender.   The contract should, therefore, be awarded to the best responsive bidder.  Such projects have to be monitored to ensure that the contractor works according to the terms of the agreements. It is recommended that a qualified consultant works with the procuring entity to monitor and evaluate performance of the project. World pricing standard has been established for some basic projects such as the World Bank Standard for Road Construction Cost per-Km (“ROCKS”).  Some of those established standard pricing benchmarks should be used to award similar projects in Nigeria.

  Corruption has always been the bottle-neck stalling development and economic progress; the poor suffer the effect of this. The government must fight against corruption and every other form of impunity by making sure that those found to be corrupt are appropriately sanctioned.

Concluded.

•Victor is a procurement specialist, Centre for Social Justice, Abuja.

“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”

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