The Case For Open Contracting In Nigeria

Eze Onyekpere

Open contracting is one of the commitments made by Nigeria under fiscal transparency in the Open Government Partnership. In the outgone week, the Bureau of Public Procurement, being the regulator of government commerce, undertook the training of Ministries, Departments and Agencies of government on how to use and upload procurement information on the Nigerian Open Contracting Portal. It was one training designed to introduce greater transparency and accountability in federal public procurement.

It is imperative to state that open contracting is a collaboration involving three principal stakeholders, namely the government through the MDAs, the civil society including non-governmental organisations, professionals, the media and the wider public and the private sector operators who participate in government commerce. The rationale for the participation of the triumvirate is that government manages public resources and uses public procurement to deliver public services; the private sector is mainly involved as contractors and bidders who deliver the services that government requires to fulfil its functions. On the other hand, the people represented by the civil society are the beneficiaries of the services of both government and the private sector.

Open contracting is done for overriding purposes and these include: improvement of accountability, transparency and popular participation; reduction of corruption and promoting integrity in the public procurement process; promotion of fairness, competition and professionalism; improvement of service delivery over the short, medium and long terms; improving the business environment; and using the feedback and lessons learnt to improve the procurement system over time. It provides access to contracting information as a basis for participation, feedback and making informed contributions to the learning and improvement process. Being a learning process, it builds the capacity of the participating stakeholders through the provision of actionable empirical data.

Open contracting is not another box ticking technocratic exercise to satisfy the demands of external donors or some fancy new standards. Rather, it is an iterative learning process that is expected to result in quantifiable improvements in savings for the government, improved service delivery outcomes in health, education, housing, power, etc., and builds greater trust and confidence between the government, citizens and private sector service providers. It is not about starting another initiative or programme but it seeks to improve the already existing contracting system detailed in the Public Procurement Act 2007. It builds on initiatives such as the Extractive Industries Transparency Initiative, Natural Resource Charter, Open Budget Initiative and the Global Initiative for Fiscal Transparency, Corruption Perceptions Index, etc.

Also, a functional open contracting system facilitates the work of the National Bureau of Statistics in data gathering to improve governance especially in public financial management.

The rationale for open contracting is that public procurement is part of the larger Public Finance Management and in Nigeria, about 27.5% of the federal budget over the years have been dedicated to capital expenditure which is delivered through contracting. Public contracting is the biggest source of public corruption considering that no one dips their hands into the treasury and take away money without a reason. And contracting provides the perfect reason and avenue to mismanage resources in a way and manner that will not raise red flags, if outsiders have no access to information. Procurement and its implementation processes are initiated and to a great extent supervised by the executive. Without access to timely, relevant and sometimes proactive information, even the legislature, oversight and anti-corruption agencies will not be in a position to optimally perform their duties. Thus, open contracting facilitates the prevention of corruption, strengthens observance of laws and policies and in the process, improves the PFM outcomes.

Nigeria has a Freedom of Information Act which guarantees Nigerians access to public records and documents while protecting privacy and security information in appropriate cases. The FoIA demands the proactive publication of a number of information including the following which are procurement related; information relating to the receipt or expenditure of public or other funds of the institution; materials containing information relating to any grant or contract made by or between the institution and another public institution or private organisation. Access to actionable information is the currency for the demand for accountability.

Specifically, the PPA provides in Section 5 (r) as part of the functions of the Bureau of Public Procurement: “Establish a single Internet portal that shall, subject to Section 16 (21) to this Act, serve as a primary and definitive source of all information on government procurement containing and displaying all public sector procurement information at all times”. Also, Section 48 of the Fiscal Responsibility Act 2007 states that: “The Federal Government shall ensure that its fiscal and financial affairs are conducted in a transparent manner and accordingly ensure full and timely disclosure and wide publication of all transactions and decisions involving public revenues and expenditure and their implication for its finances”.

It is posited that contracting comes under the purview of all transactions and decisions involving public revenues and expenditures which should be subject to full and timely disclosure and wide publication through open contracting.

Open contracting simplifies data in a way that ordinary citizens can make informed judgement from datasets by collecting data with the end users in mind. It builds pressure from different actors with different interests for the modification and reform of the system towards an ultimate goal. It creates a publicly available red flag mechanism that allows proactive and reactive engagement of the contracting system. The ultimate goal of open contracting is clean contracting where all the identifiable red flag issues are eliminated. Accountability and transparency will be coupled with capacity and participation of stakeholders to deliver greater competition, value for money, service delivery and realisation of overall national goals through sectoral policy objectives, etc.

Three key steps are found in open contracting. They are disclosure, engagement and redress. They need to be contextualised to reinforce each other; and should not be decoupled. Otherwise, there could be disclosure without engagement and action for redress. Thus, it is also imperative that while government and civil society pursue higher goals of accountability, transparency and value for money, a clear pro-business case is made to guarantee the buy-in of the private sector.

In conclusion, the training of the MDAs on the use of the NOCOPO portal is a step in the right direction and needs to reach all the MDAs so that no one can have an excuse to fail to do the right things to improve value for money in federal commerce.