Supply Chain Management

The Impact of Public Procurement Act on the Procurement Process in Nigeria Public Sector

The Impact of Public Procurement Act on the Procurement Process in Nigeria Public Sector


Public procurement is the process by which governments buy inputs for vital public-sector investments. Those investments, both in physical infrastructure and in strengthened institutional and human capacities, lay foundations for national development. The quality, timeliness, suitability and affordability of those procured inputs can largely determine whether the public investments will succeed or fail. The Bureau of Public Procurement has established general policies and guidelines relating to public sector procurement, and for supervising procurement implementation as well as reviewing the procurement and award of contract procedures of every public entity to which the Public Procurement Act applies, including certifying all Federal wide procurement (subject to the Bureau’s prior review) prior to the award of contracts. This study therefore, was carried out to examine the impact of Public Procurement Act on the Procurement Process in Nigeria. The descriptive method of data analysis was employed while the hypotheses were tested using the SPSS version 20. They result showed that although there are laws guiding the procurement of public inputs; the laws are weak and ineffective and thus has not made much significant impact on the procurement process.



1.1 Background of the study

1.2 Problem statement

1.3 Purpose of the study

1.4 Significance of the study

1.5 Study hypotheses

1.6 Scope and Limitations of the Study

1.7 Definition of Basic terminologies

1.8 Organization of Study



2.1 Introduction

2.2 Conceptual Review

2.3 Theoretical Framework

2.4 Empirical Studies


3.0 Introduction

3.1 Research Design

3.2 Sources of data collection

3.3 Determination of Population

3.4 Determination of sample size

3.5 Instrumentation

3.6 Instrument Validation

3.7 Adopted Method of Analysis


4.1 Introduction

4.2 Data Presentation

4.3 Data analysis

4.4 Data Interpretation


5.1 Introduction

5.2 Conclusion and Findings

5.3 Summary of the Study

5.4 Recommendation




1.1 Background of the study

Government all over the world has a common purpose which is to care for its citizens. This purpose has been seen by many to constitute the sine-qua-non for the existence of any government. However, the achievement of this objective has been bedeviled by corruptions and irregularities in the activities and business of government (Nwafor, 2013). In order to restore the lost confidence of the citizens on the activities and process of government, policies and enactments such as the Public Procurement Act 2007 was established to curb the excesses in government activities and business with a view to ensuring proper regulation in the procurement process. Also government must ensure transparency and accountability in its dealings both in business transaction and non-business activities (Adewole, 2014).

Probity is believed to be the ultimate aim of providing for the happiness and welfare of the citizenry and should be the emphasis in the public life (Fayomi, 2013). Since independence in 1960, Nigeria has passed through military and civilian rule, the military are authoritative and rule with decree and the civilian are less authoritative and govern with the constitution and the laws made by the legislature (Jacob, 2010). Both style of ruling engaged in businesses which the large part is the award of contract (Jacob, 2010). The process of awarding these contracts are usually questionable as most of the rich men and women today became rich overnight upon the execution of government contracts. The irregularities in this process can be said to be the main cause of the underdevelopment in this part of the world.

According to Ray (1998) to achieve development, requires making some hard choice, punching and jettisoning old methods of doing things that have contributed to underdevelopment. Prior to 2007, to regulate the award of contracts was difficult as there was no direct statutory provision for it in Nigeria and the result is that the award of contract becomes a means by which the government and the ruling elites reward their friends and cronies and by which they too amass wealth (Jacob, 2010). At this time it was extremely difficult to get best value for money in public procurement practices (Onyekpere, 2009). Federal government of Nigeria under the President Olusegun Obasanjo administration seeing the level of corruption in the public procurement process, commission World Bank to carry out an investigation into Nigeria procurement process. At the end of the investigation, World Bank came up with a report called Country Procurement Assessment Report (CPAR). The report revealed that Nigeria was losing average of $10 billion annually due to various irregularities associated with public procurement and contract awards. As responds to these problems public procurement bill was sent to national assembly under President Olusegun Obasanjo regime and was eventually pass into law under the Umaru Musa Yar’Adua administration (Adewole, 2014).

1.2 Statement of the Problem

The early oil boom for Nigeria in 1970s saw the country rack in so much money which had led to her mismanagement of the resources. There have been existing open abuses to rules and standards in the award and execution of public contracts in Nigeria. These were evident in over-invoicing, inflation of contract costs, and proliferation of white-elephant projects and diversion of public funds through all kinds of manipulation of contract system. The regulatory bodies that were set up to ensure compliance with laid down rules and regulations on procurement and award of contracts in the public sector appeared weak and ineffective. This resulted in a high level of corruption and enormous wastage of public resources, lack of transparency, accountability, fairness and openness. The situation made foreign and even local investors to lose confidence in the Nigerian economy. It must be noted that the prevailing high level of corruption was closely linked up with the public sector procurement systems, and considering that about ten percent of the gross domestic product (GDP) must pass through the procurement systems. It then became imperative that the public procurement systems must be reformed if Nigeria must achieve economic growth and developmental strides in this new millennium. It is on this premise that this study was undertaken to examine the impact of public procurement act on the procurement process in Nigeria public sector.

1.3 Objective of the study

The study aims to achieve the following objectives:

a) To find out if there are existing laws guiding procurement procedures in the public sector.

b) To determine if the laws guiding the public sector procurement process is effective.

c) To examine the impact of the public procurement Act on the procurement process in the public sector.

1.4 Significance of the Study

Public procurement has everything to do with the public just as its name goes. Its financing is drawn from the tax payers’ money and the oil revenue. Thus, it is necessary that oversight functions are not just carried out alone by those appointed but that the public become aware of what is happening in the public procurement scene. This is to enhance their trust in the agency and their representatives. Furthermore, an understanding of the public Procurement Act and how it works will serve as a tool to checkmate the excesses of the institution. This is why this study is marked significant.

1.5 Research Hypothesis

The study formulated and developed for testing, the following hypotheses:

H0: The Public Procurement Act is weak and ineffective on the Procurement process in the Public sector.

Ha: The Public Procurement Act is weak and ineffective on the Procurement process in the Public sector.

H0: There is no significant impact of public procurement Act on the Public sector procurement procedure.

Ha: There is no significant impact of public procurement Act on the Public sector procurement procedure.

1.6 Scope and Limitation of the Study

The study specifically takes on the public procurement Act in Nigeria with special reference to the Public sector. There are procurement procedures and Acts in the Private sector but this study is limited to the Public sector. Furthermore, this study adopted the descriptive statistical method whereby the questionnaire was used to elicit responses from the respondents to reach a conclusion. This is a limitation, because, further studies can adopt other methods like the investigative kind of method or the use of unbiased data from the Bureau of public procurement in order to examine the effectiveness of the Act and in extension, the Bureau.

1.7 Definition of terms

For the purpose of this study, some terms were repeatedly used throughout this study and as such its pertinent that we provide clarity to these terms for effective comprehension.

Public: This word in this study refers to the people. The masses or the citizens of a given place.

Procurement: this refers to the action of buying goods, materials or services for the good of the public.

Process: This term refers to the procedure, the pattern, the way whereby a certain action has to be followed to arrive at an expected result. Process here has to do with the adopted pattern for procurement.

Public Sector: The Economy is divided into two sectors. The Private sector and the public sector. The public sector has its objectives targeted on the good of the masses. The sector is not profit-oriented but service-oriented.

1.7 Organization of the Study

This study is segmented into five chapters. This is to enhance comprehension, crate symphony in writing and most importantly abide with the departmental project guidelines. Hence, the first chapter deals with a background to the study; stating the problem, its aims, hypotheses and significance. The second chapter brings a review of the related and available literatures. It recognizes the works of several scholars on the same subject and brings to light their contributions and opinions. This chapter is divided into the conceptual, theoretical and empirical frameworks. The third chapter reveals the methodology adopted for this study. The method and sources of data were highlighted in this chapter as well as the research design. The fourth chapter has to do with the presentation and interpretation of data. This is scientific because our claims have to be backed up by verified facts. The fifth chapter gives us the summary of the entire work in few sentences, draws the conclusion for the study and gives recommendations if any.

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