The World Bank's Influence on Procurement Reform in Africa

January 9, 2013 Time: 03:59pm ajicl.2013.0053.tex

THE WORLD BANK’S INFLUENCE ON PROCUREMENTREFORM IN AFRICA

SOPE WILLIAMS-ELEGBE!

I. INTRODUCTION

The World Bank is a development finance institution established by virtue of theBretton Woods agreement to provide reconstruction aid to the countries devastatedby World War II.1 The success of the Bank in doing this meant that it soonrefocused its objectives to provide development finance to developing countries.2

In the aftermath of the ‘corruption eruption’3 in the mid-1990s, the Bank decidedto take a primary stance in the fight against corruption.4 One of the ways inwhich the Bank drives its anti-corruption agenda is by steering public procurementreform in developing countries5 with the aim of reducing corruption in publicprocurement in those countries.

Although there is information on the reasons for procurement reform indeveloping countries and the kind of reforms that should be undertaken, such aslegal reforms (e.g., new legislation based on the UNCITRAL Model Law) andinstitutional reform (creation of a procurement compliance unit, creation of an

! Research Fellow, Department of Public Law, Faculty of Law, University of Stellenbosch, SouthAfrica; Visiting Scholar, University of Lagos, Nigeria; Head of Research, Nigerian EconomicSummit Group, Lagos. Former Lecturer in Law, School of Law, University of Nottingham. I amgrateful for a British Academy Grant that made this research possible.

1 Article 1 Articles of Agreement of the International Bank for Reconstruction and Development,22 July 1944, 2 UNTS 134, amended 606 UNTS 294. See S. Smyth, ‘Collective Action forDevelopment Finance’, 32(4) University of Pennsylvania Journal of International Law (2011):961; E. J. Pan, ‘Challenge of International Cooperation and Institutional Design in FinancialSupervision: Beyond Transgovernmental Networks’, 11(1) Chicago Journal of InternationalLaw (2010): 243.

2 H. V. Morais, ‘Testing the Frontiers of their Mandates: The Experience of MultilateralDevelopment Banks’, 98 Proceedings of the American Society of International Law (2004): 64.

3 This term was first used by Moises Naim, ‘The Corruption Eruption’, 2 Brown Journal of WorldAffairs (1995): 243, 245.

4 S. Williams, ‘The Debarment of Corrupt Contractors from World Bank-financed Contracts’,36(3) Public Contract Law Journal (2007): 377.

5 See B. Basheka, ‘Public Procurement Reforms in Africa: A Tool for Effective Governance ofthe Public Sector and Poverty Reduction’, in K. V. Thai (ed.), International Handbook of PublicProcurement, CRC Press (2009), pp. 131, 145.

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96 Sope Williams-Elegbe

administrative/judicial forum for adjudication of procurement disputes),6 there islittle information on the means by which such reforms are initiated, how they areapplied and the nature and consequences of such reforms, especially in the Africancontext.7 There is also very little academic analysis that adopts a comparativeapproach to examining the nature and consequences of such reforms in Africancountries.

This article attempts to redress this information deficit by examining themechanism the World Bank has used to drive public procurement reform inAfrica, and the scope of this reform, comparing and using Nigeria and SouthAfrica as case studies. The article examines and compares, first, the objectivesof this reform; second, the Bank’s assessment of the procurement systems in thecountries under review and the nature of the reforms proposed by the Bank asstated in the Bank’s Country Procurement Assessment Report (CPAR); and third,whether the reforms suggested by the Bank were suitable given the context of thecountries and how the countries implemented the suggestions for reform. Finally,the article will discuss whether it is possible to conclude that the reforms havebeen successful, with the aid of interviews with relevant procurement personnel.It will be seen that the inability of countries to adequately implement the reformsproposed by the Bank has led to such ‘reformed’ procurement systems being facedwith similar challenges as existed before the reforms were initiated, except thatsuch systems now possess a veneer of legitimacy as a result of the fact that theyare seen as having undergone reform. It will be argued that in certain contexts, thetraditional ‘soft touch’ approach to public procurement reform may be insufficientto deliver the objectives of sound procurement regulation, and both the Bank anddeveloping countries need to consider a more radical and holistic approach topublic procurement reform.

6 R. Hunja, ‘The UNCITRAL Model Law on Procurement of Goods, Construction and Servicesand its Impact on Procurement Reform’, in S. Arrowsmith and A. Davies (eds), PublicProcurement: Global Revolution, Kluwer Law International (1998); R. Hunja, ‘Obstacles toPublic Procurement Reform in Developing Countries’, in S. Arrowsmith and M. Trybus (eds),Public Procurement: The Continuing Revolution, Kluwer Law International (2003); Basheka,‘Public Procurement Reforms in Africa’, supra note 5; C. Walker, ‘Setting Up a PublicProcurement System: The Six Step Method’, in Arrowsmith and Trybus, ibid.

7 S. J. Evenett and B. M. Hoekman, ‘International Cooperation and the Reform ofPublic Procurement Policies’, Research Working Paper, August 2005, pp. 21–5, availableat http://www.evenett.com (accessed 27 September 2011). Information on procurementreform in some African countries can be found in N. Shipman and E. Agaba, ‘PublicProcurement Reform in Developing Countries: The Ugandan Experience’, in K. V. Thai (ed.),Advancing Public Procurement: Experiences, Innovation and Knowledge Sharing, PrAcademicsPress (2006); W. Odhiambo and P. Kamau, ‘Public Procurement: Lessons from Kenya,Tanzania and Uganda’, OECD Working Paper No. 208, March 2003, p. 17, available athttp://www.oecd.org/dataoecd/59/11/2503452/pdf (accessed 20 September 2011); W. A. Wittigand H. Jeng, ‘Challenges in Public Procurement: Comparative Views of Public ProcurementReform in Gambia’, in K. V. Thai (ed.), Challenges in Public Procurement: An InternationalPerspective, PrAcademics Press (2004); V. Mosoti, ‘Reforming the Laws on Public Procurementin the Developing World: The Example of Kenya’, 54(3) International and Comparative LawQuarterly (2005): 621.


The World Bank’s Influence On Procurement Reform 97

II. THE OBJECTIVES OF PUBLIC PROCUREMENT REFORM

Public procurement reform has been defined as the attempts at changingorganisational, institutional and legal structures that manage the publicprocurement process.8 The procurement reform process is thus a review ofexisting public procurement systems with a view to making such systems moreresponsive to changing circumstances to meet desired goals.9 The process ofpublic procurement reform is not peculiar to developing countries. Most, if notall developed countries are constantly engaging in the process of reformingpublic procurement for reasons such as increasing efficiency and reducing wastethrough increased use of electronic mechanisms in procurement; the use of privatesector finance and collaborative procurement; improving services delivery; andensuring that procurement is used to achieve other goals such as increasing‘green’ contracting, giving a proportion of contracts to small and mediumsized enterprises (SMEs) and other vulnerable groups such as veterans, disabledpersons, minorities or persons from disadvantaged regions.10 Procurement reformin developed countries is essentially aimed at the modernisation of alreadydeveloped procurement systems to take into account the changes in the nature ofwhat is being bought, such as the increased purchase of IT systems and servicesand the use of new technologies in the procurement process, such as electronicauctions, electronic reverse auctions and electronic payment systems.11 Of course,developed countries do not usually require or utilise external assistance for thepurpose of procurement reform, although where such a country seeking reform isa pre-accession candidate, an EU neighbour country or potential member of theEuropean Union, then some technical assistance under the SIGMA and PHAREinitiatives may be available.12 Thus, although procurement reform is not peculiarto Africa, the drivers for reform in Africa differ considerably for the drivers forreform in developed countries.

8 Basheka, ‘Public Procurement Reforms in Africa’, supra note 5, p. 136.9 Ibid.

10 See generally, European Commission, ‘Green Paper on the Modernization of EU PublicProcurement Policy: Towards a More Efficient European Procurement Market’, COM(2011)15 final (27.1.2011); S. Kelman, Unleashing Change: A Study of Organizational Changein Government, Brookings Institution Press (2005); S. Kelman, Procurement and PublicManagement: The Fear of Discretion and the Quality of Government Performance, AEI Press(1990); W. E. Kovacic, ‘Evaluating the Effects of Procurement Reform’, 33(2) ProcurementLawyer (1998): 1; J. J. Snider Smith, ‘Competition and Transparency: What Works for PublicProcurement Reform’, 38(1) Public Contract Law Journal (2008): 85; S. Kelman, ‘RemakingFederal Procurement’, 31(4) Public Contract Law Journal (2002): 581; S. L. Schooner, ‘Fear ofOversight: The Fundamental Failure of Businesslike Government’, 50(3) American UniversityLaw Review (2001): 627.

11 J. A. Pegnato, ‘Assessing Federal Procurement Reform: Has the Procurement Pendulum StoppedSwinging?’, in Thai, International Handbook of Public Procurement, supra note 5.

12 See http://www.sigmaweb.org and European Parliament, ‘The PHARE Programme and theEnlargement of the European Union’, Briefing No. 33 (4 December 1998), availableat http://www.europarl.europa.eu/enlargement/briefings/33a1_en.htm (accessed 28 September2011). Note that the countries in the SIGMA and PHARE programmes are developed, developingand transition countries.



The primary drivers behind procurement reform in Africa are the need to fightcorruption in the public sector13 and in the face of shrinking aid budgets and themove to budget support as the means of disbursing aid,14 reduce the amount thatis lost to corruption and waste during the procurement process.15 Procurementreform has thus been driven primarily by external factors such as donors andthe multilateral development banks, which by the 1990s decided that they wouldno longer fund African governments that did not show a commitment to goodgovernance, public finance accountability and anti-corruption reform.16

The main objective of procurement reform in Africa can thus be saidto be the establishment of a public procurement framework that fosters‘transparency, efficiency and mechanisms for enforcement, coupled with aninstitutional arrangement that ensures consistency in overall policy formulationand implementation’17 as well as the development of a professional cadre ofstaff.18 The objectives of procurement reform often go beyond the establishmentof an adequate procurement system, however, and Basheka identifies seven wide-ranging objectives of public procurement reform in Africa. These are to improvethe governance of the public sector; to respond to global forces and increase theparticipation of the private sector in public procurement; to increase transparencyand minimise corruption; to improve accountability of procurement systems; toincrease coordination in public procurement; to improve professionalism of theprocurement cadre; and to improve service delivery and reduce poverty.19 Evenettand Hoekman also suggest that procurement reform is important to development,as it will be difficult for a state to meet the needs of its citizens without apublic expenditure system that includes effective public procurement policies.20

It can thus be surmised that apart from the establishment of an adequate, modernand well-functioning procurement system, procurement reform is also intended

13 Mosoti, ‘Reforming the Laws on Public Procurement in the Developing World’, supra note 7;A. J. DeAses, ‘Developing Countries: Increasing Transparency and Other Methods ofEliminating Corruption in the Public Procurement Process’, 34(3) Public Contract Law Journal(2005): 553; O. Dekel, ‘The Legal Theory of Competitive Bidding in Government Contracts’,37(2): Public Contract Law Journal (2008): 267.

14 Smyth, ‘Collective Action for Development Finance’, supra note 1; S. Koeberle, Z. Stavreski andJ. Walliser, Budget Support as More Effective Aid? Recent Experiences and Emerging Lessons,World Bank (2006); EuropeAid, Budget Support: The Effective Way to Finance Development?,European Commission (2008).

15 Hunja, ‘Obstacles to Public Procurement Reform in Developing Countries’, supra note 6, p. 3.16 Odhiambo and Kamau, ‘Public Procurement’, supra note 7; S. Arrowsmith, ‘Public

Procurement: An Appraisal of the UNCITRAL Model Law as a Global Standard’, 53(1)International and Comparative Law Quarterly (2004): 17; S. Radelet, ‘Will the MillenniumChallenge Account Be Different?’, 26(2) The Washington Quarterly (2003):171–87; Africa AllParty Parliamentary Group, The Other Side of the Coin: The UK and Corruption in Africa (2006),available at http://www.africaappg.co.uk (accessed 27 September 2011).

17 Hunja, ‘Obstacles to Public Procurement Reform in Developing Countries’, supra note 6, p. 15.18 Ibid.19 Basheka, ‘Public Procurement Reforms in Africa’, supra note 5, pp. 145–8.20 Evenett and Hoekman, ‘International Cooperation and the Reform of Public Procurement

Policies’, supra note 7. See also the views of S. Karangizi and I. Ndahiro, ‘Public ProcurementReforms and Development in the Eastern and Southern Africa Region’, in R. H. Garcia (ed.),International Public Procurement: A Guide to Best Practice, Globe Business Publishing (2009).



to improve public sector governance and accountability and aid socio-economicdevelopment.

These objectives of procurement reform in Africa to a great extent reflect thegovernance and anti-corruption objectives of the World Bank,21 and as a resultit is not surprising that the Bank has devoted time and resources to the reformof procurement systems in transition, emerging and developing economies.22 Thefrequency with which the Bank assists in the procurement reform process has ledto funds being set aside by the Bank solely for this purpose.23

In initiating the reform process, it should be mentioned that while it is possiblefor the Bank to initiate the process of procurement reform, in many cases theprocess is initiated by the government of the country in question, either on theadvice of the Bank or on the country’s sole initiative, whereby the governmentinvites the Bank to assist in the process of procurement reform. The processof procurement reform could also be initiated by a regional development bank,which will rely on and cooperate with the World Bank in the process of theprocurement reform of the country in question. The main tool that is used toassess a procurement system and issue recommendations is a World Bank CountryProcurement Assessment Report (CPAR). The other development banks haveaccepted the CPAR as the best tool for assessing a procurement system and manyof them use this tool in the process of domestic procurement reform. Beforea country procurement assessment is conducted, the Bank tries to obtain thecommitment and agreement of the government to the process in order to ensurethat the government takes ownership of the reform process.24

The CPAR was developed to be used as a means of conducting a holistic reviewof domestic public procurement, which could be used as the basis for initiatingprocurement reform. As stated by the Bank,

the CPAR was intended to be an analytical tool to diagnose the healthof the existing system in the country, and in the process generatea dialogue with the government focused on needed reforms. Themain purpose of a CPAR is to establish the need for and guide thedevelopment of an action plan to improve a country’s system forprocuring goods, works and consulting services.25

The Bank has listed four objectives of the CPAR. These are:

a) to provide a comprehensive analysis of a country’s publicsector procurement system, including the existing legal

21 See World Bank Institute Governance and Anti-Corruption Program, details available athttp://www.worldbank.org.

22 Hunja, ‘Obstacles to Public Procurement Reform in Developing Countries’, supra note 6, p. 14.23 World Bank, Capacity Building in Africa: An OED Evaluation of World Bank Support, World

Bank (2005).24 World Bank, Country Procurement Assessment Report Instruction. Section III – Preparation of

the CPAR, available at http://www.worldbank.org (accessed 20 September 2011).25 World Bank, Country Procurement Assessment Report Instruction. Section I – Introduction,

available at http://www.worldbank.org (accessed 20 September 2011).



framework, organizational responsibilities and controland oversight capabilities, and procedures and practicesand how well these work in practice;

b) undertake a general assessment of institutional, organi-zational and other risks associated with the procurementprocess, including identification of procurement practicesunacceptable for use in Bank-financed projects;

c) develop a prioritized action plan to bring about institu-tional improvements, and

d) assess the competitiveness and performance of localprivate industry with regard to participation in publicprocurement and the adequacy of commercial practicesthat relate to public procurement.26

The CPAR is built on a doctrinal and empirical investigation into a domesticprocurement system that focuses on eight to ten sectors, depending on the countryin question. Thus, the standard areas that are investigated as part of the Countryprocurement assessment are the legal and regulatory framework; procurementpractices and procedures; procurement organisation and resources; electroniccommerce in public procurement; audit and anti-corruption measures; customsand trade practices; private sector procurement; and a general risk assessment.The CPAR template used by the Bank contains a series of questionnaires, whichare addressed by Bank staff to the relevant persons, agencies and organisations inthe country being assessed.

III. THE FINDINGS OF THE CPAR AND THE NATURE OF THE PROPOSEDREFORMS

As was mentioned in the Introduction, this article is focused on an examinationof World Bank-led public procurement reform in two of Africa’s largesteconomies – South Africa and Nigeria. This section will discuss the most recentCPARs conducted on Nigeria and South Africa, examining and comparing thefindings of the CPARs and the reforms proposed as a result of the CPAR.

Nigeria and South Africa have had very different procurement regulationhistories but, as will be seen, there are similarities in the nature of the challengesthat they face in the procurement context. Prior to 2007, Nigeria did not havea procurement system in the sense that procurement was regarded as a supportfunction conducted by non-professional staff27 and there was no legislationregulating the procurement function.28 There was no defined organisation of theprocurement function and no institution with oversight responsibility over public

26 World Bank, Country Procurement Assessment Report Instruction. Section II – CPAR Objectives,available at http://www.worldbank.org (accessed 20 September 2011).

27 Hunja, ‘Obstacles to Public Procurement Reform in Developing Countries’, supra note 6, p. 13.28 S. Williams-Elegbe, ‘The Reform and Regulation of Public Procurement in Nigeria’, 41(2)

Public Contract Law Journal (2012): 339.



procurement.29 Procurement reform was initiated in Nigeria after the election of ademocratic government in 1999. The reforms were driven by the anti-corruptionagenda of the government and commenced with a CPAR, which reviewed theNigerian procurement system and made recommendations for reform.

In contrast to Nigeria, South African public procurement has been formallyregulated from the time of the early Dutch settlement and management of the Capebetween 1652 and 1910.30 The modern genesis of South African procurementregulation, however, can be traced to the desire of the post-apartheid governmentin 1995 to reform the procurement system to use procurement to promote goodgovernance and achieve specified socio-economic objectives.31 The reform of theSouth African procurement system took the form of a review of the procurementpolicy and the issue of an Interim Ten Point Plan on Procurement,32 whichestablished the principles on which the new procurement system was to be basedas well as the issue of a Green Paper on Public Procurement.33 Although theGreen Paper was not followed by a White Paper as was initially planned, theproposals in the Green Paper were adopted and were translated into the legalframework that subsequently followed.34 Thus, it is apt to say that the objective ofprocurement reform in Nigeria was to eliminate corruption and mismanagement inpublic contracts and in South Africa, was to democratise the procurement processand use procurement to achieve social and economic goals.35

Although the World Bank did not drive the initial reforms of the South Africanprocurement system, as encompassed in the Green Paper, it contributed financialassistance to the reform programme;36 however, both Nigeria and South Africahad CPARs conducted between 1999 and 2001. Nigeria had a CPAR conductedin 199937 and South Africa in 2001.38 The CPAR conducted in Nigeria wasintended to review the public sector procurement structure and develop an actionplan for reform to achieve institutional and organisational changes and improve

29 Ibid.30 S. P. le Roux de la Harpe, ‘Public Procurement Law: A Comparative Analysis’, PhD thesis,

University of South Africa (2009), ch. 5.31 D. Letchmiah, ‘The Process of Public Sector Procurement Reform in South Africa’, 8 Public

Procurement Law Review (1999): 15.32 Public Sector Procurement Reform in South Africa: Interim Strategies – A 10 Point Plan,

Government Printer (29 November 1995).33 Green Paper on Public Sector Procurement Reform, Government Gazette 17928, 14 April 1997)

(Green Paper).34 Letchmiah, ‘The Process of Public Sector Procurement Reform in South Africa’, supra note 31,

p. 16.35 For Nigeria see Williams-Elegbe, ‘The Reform and Regulation of Public Procurement in

Nigeria’, supra note 28; for South Africa see P. Bolton, ‘The Public Procurement System inSouth Africa: Main Characteristics’, 37(4) Public Contract Law Journal (2008): 781.

36 World Bank, ‘South Africa Country Procurement Assessment Report: Refining the PublicProcurement System’, vol. II Main Text (February 2003) (South Africa CPAR, vol. II), availableat http://www.worldbank.org.

37 World Bank, ‘Nigeria Country Procurement Assessment Report’, vols I and II (June 2000)(Nigeria CPAR), available at http://www.worldbank.org.

38 World Bank, ‘South Africa Country Procurement Assessment Report: Refining the PublicProcurement System’, vols I and II (February 2003) (South Africa CPAR).



the efficiency and transparency of public sector procurement.39 The CPAR wasthus the beginning of extensive and holistic procurement reforms, which changedthe regulatory and institutional framework of public procurement.40 The CPARconducted in South Africa in 2001 had a more subtle objective as it was a follow-up to the procurement reforms initiated in 1995 and was aimed at streamliningthe existing procurement system and enhancing capacity building in the area ofprocurement and contract management.41 The South African CPAR was aptlysubtitled ‘Refining the Public Procurement System’.

As was discussed above, CPARs generally follow a template and focus onspecified sectors. This was also the case in relation to Nigeria and South Africa.Thus, the CPARs of both countries focused on the legal and regulatory framework;procurement practices and procedures; procurement organisation and resources;e-commerce in public procurement; private sector procurement and commercialpractices; trade and customs practices; and a general risk assessment. The CPARon Nigeria also examined the performance on Bank-assisted projects in Nigeriaand given the peculiarities of South African procurement, the CPAR on SouthAfrica examined preferential procurement practices.

Although the objectives of procurement reform in Nigeria and South Africadiffer based on the differences in their procurement regulation histories, it isinteresting to note that there were similarities in the findings of the CPARs ofboth countries and similarities in the recommendations for procurement reform.Below is a comparative analysis of the pertinent findings and recommendations ofthe CPARs for South Africa and Nigeria.

A. Legal and regulatory framework

The CPAR of South Africa found that although there was an extensive andcomplex legislative framework for public procurement, there was no coherent andcomprehensive procurement policy, leading to differences in the interpretationand application of the government’s objectives in procurement legislation andconsequent differences in procurement outcomes.42 The CPAR recommended thatthe South African government issue a National Procurement Policy Frameworkto address the issues that would have been addressed in a White Paper onProcurement and also draft a National Regulatory Procurement Framework tocreate uniformity and simplify the procurement regulatory environment. TheCPAR further recommended the creation of a National Procurement ComplianceOffice to formulate procurement policy and oversee compliance with publicprocurement law and procedures.

In Nigeria, the CPAR found that in addition to the absence of a legislativeframework for public procurement, there was also no central policy-making entity

39 Nigeria CPAR, vol. I, p. 4.40 See Williams-Elegbe, ‘The Reform and Regulation of Public Procurement in Nigeria’, supra

note 28.41 South Africa CPAR, vol. I, p. 1.42 South Africa CPAR, vol. II, p. 5.



in the area of public procurement and procurement policy was issued through adhoc circulars from the Ministry of Finance and, in some cases, the Presidency.43

Similar to the South African recommendation, the CPAR recommended thecreation of an independent Public Procurement Commission with oversightresponsibility over public procurement and also suggested that Nigeria enact aprocurement law based on the UNCITRAL Model Law.44

B. Procurement procedures and practices

In relation to public procurement practices and procedures, the CPAR of SouthAfrica found that there was a lack of coherence and a fragmentation ofprocurement practices as between the national and provincial tender boards.There were also differences in the practices of State-owned enterprises, and thedisqualification of corrupt or fraudulent contractors varied greatly dependingon the disqualifying entity in question. There were also differences in contractdocumentation, the mode of advertising contracts and requirements for contractorregistration.45 The CPAR also found that there was an undue focus on tenderingprocedures and lowest cost without a concomitant focus on procurementoutcomes.46 The CPAR recommended the implementation of a uniform tenderpublication policy, the standardisation of procurement documentation and theabolishment of the prerequisite for the pre-registration of suppliers, where thiswas the case.47

Nigeria’s CPAR found similar as well as further shortcomings in the area ofprocurement procedures and practices. Thus, the CPAR on Nigeria found thatsimilar to South Africa, there was a decentralised procedure for the registrationof suppliers, dependent on the procuring entity in question, and suppliers couldbe de-registered at will and there was no known process for re-registration. Therewas also no uniformity in relation to tendering procedures and the method oftendering depended on the procuring entity in question.48 In short, similar to theSouth African experience, there was a lack of coherence and a fragmentationof procurement procedures in government agencies. The recommendations forreform of the procurement system in the CPAR included the discontinuationof the practice of supplier registration for open competitive bidding and thedevelopment of a uniform system of supplier registration for other contracts,mandatory advertising of contracts over a certain threshold, mandatory rules onthe use of specified procurement procedures and the introduction of standardbidding documents.49

43 Nigeria CPAR, vol. II, p. 5.44 Nigeria CPAR, vol. II, pp. 17–22.45 South African CPAR, vol. I, pp. 14–24.46 Ibid., p. 20.47 Ibid., pp. 28–30.48 Nigeria CPAR, vol. II, pp. 23–4.49 Nigeria CPAR, vol. II, pp. 24–8.



C. Procurement organisation and resources

The procurement function in South Africa was organised at the level ofthe procuring entity and under the Public Finance Management Act,50 theAccounting-Officer of each entity was responsible for the financial managementof government agencies.51 In terms of the capacity of procurement personnel,the CPAR found that there was no requirement for procurement personnel topossess formal qualifications and the quality of personnel varied greatly betweendepartments.52 It also found that the training of procurement personnel wasconducted on an ad hoc basis and in any event, such training was usuallylimited to tendering procedures.53 The procurement function was also not heldin high esteem in the public sector and there was consequently a shortageof qualified and well-trained procurement staff in government agencies.54 TheCPAR recommended a skills and capacity needs assessment for procurementpersonnel, and the development of standards, qualifications and certified trainingprogrammes for procurement personnel.55

The Nigerian CPAR found similar shortcomings in the area of procurementorganisation and resources, especially in relation to the capacity and trainingof procurement personnel. Thus, it was found that similar to South Africa,the procurement profession was held in low esteem, and it was believed thatunqualified staff could perform the procurement function. It was also the case thatthere were very few qualified procurement staff, and there was a lack of fundingfor the training of such staff56 and consequently a lack of training of such staff.In relation to the organisation of procurement, it was found that procurementwas organised at the level of the tender boards in government agencies butthere was often a duplication of tender boards, which meant they were often asource of delay and non-transparency.57 In Nigeria, the CPAR also found thatpoliticians were operationally involved in the procurement process and wererequired to approve contracts. The CPAR recommended the streamlining of thetenders board system and in relation to the professionalisation of the procurementcadre, the CPAR recommended, as was the case in South Africa, the conductof a needs assessment for procurement professionals in the public sector. TheCPAR also recommended increasing the training of procurement personnel and,similar to South Africa, the introduction of a certification system.58 The CPARfurther recommended the development of a procurement manual based on the newprocurement law to assist procurement personnel.59 In relation to the involvement

50 Public Finance Management Act 1 1999, Government Gazette 19814 (2 March 1999) (PFMA).51 Section 38 PFMA.52 South Africa CPAR, vol. II, p. 31.53 South Africa CPAR, vol. II, p. 36.54 South Africa CPAR, vol. II, p. 37.55 South Africa CPAR, vol. II, pp. 37–8.56 Nigeria CPAR, vol. I, p. 12; Nigeria CPAR, vol. II, p. 35.57 Nigeria CPAR, vol. I, p. 11; Nigeria CPAR, vol. II, p. 33.58 Nigeria CPAR, vol. I, p. 13.59 Ibid.



of politicians in the procurement process, the CPAR recommended that politiciansshould not have any role in the procurement process and a tenders board shouldhave the power to approve and conclude all contracts within its remit.60

D. Trade practices and customs

The South African CPAR found that licensing and customs procedures in SouthAfrica were generally transparent and efficient. It also found that where therewere irregularities, complaints could be made to the Commissioner of the SouthAfrican Revenue Service. Foreign firms were generally not required to use anational agent, except in specific sectors such as the pharmaceutical sector.61 Itwas found, however, that there was a shortage of trained customs personnel and aneed for capacity development.62 It also found that the system of customs tariffsmet with international standards and South Africa was in the process of complyingwith its international trade obligations under the WTO agreement.63 In relationto its tax policy, the CPAR found that the tax system was relatively simple byinternational standards.64 As there were few shortcomings in this area, the CPARmade a few recommendations that the South African government complete theprocess of developing a single administrative document for customs, completethe risk profiling system for customs clearance, improve the training of customspersonnel and fully meet its WTO commitments.65

Unlike the position in South Africa it was found that the customs system inNigeria was characterised by inefficiencies, a lack of transparency, corruption andcollusion. It was found that there was no standard calculation for determiningcustoms value and international methods were not fully in use.66 It also foundthat cargoes that were supposed be exports in transit to neighbouring countriessuch as Chad and Niger were often found on the Nigerian market, as the systemof monitoring such cargoes was inefficient.67 The CPAR found that the qualitycontrol of exported and imported consumer goods was hampered by a lack offunctional and equipped laboratories.68 It also found that the system of customsclearing was hampered by a lack of funds for the relevant hardware and softwareand the lack of capacity of customs personnel. The CPAR recommended acomprehensive review of business processes relating to import, export and transitregulations, and an analysis of overall customs performance, staffing levels andcapacity.69 It also recommended that the government introduce and implementa system for calculating transaction values and reorganise transit procedures to

60 Nigeria CPAR, vol. II, p. 38.61 South Africa CPAR, vol. II, p. 6162 Ibid.63 South Africa CPAR, vol. II, p. 67.64 South Africa CPAR, vol. II, p. 69.65 South Africa CPAR, vol. II, p. 71.66 Nigeria CPAR, vol. I, p. 17.67 Ibid.68 Ibid., pp. 17–18.69 Nigeria CPAR, vol. I, p. 19.



reduce smuggling. It also suggested that the staffing needs, remuneration andtraining be improved.70

E. Electronic commerce in public procurement

The widespread international acceptance and use of electronic systems in theprocurement process71 has meant that the World Bank examines as standard thepossibilities and scope for electronic commerce in public procurement when itconducts a CPAR. In the CPARs conducted on both Nigeria and South Africa,it was stated that although electronic procurement had the potential to reduceprocurement transaction costs, increase competition and transparency, and reducethe opportunities for fraud,72 it was found that the lack of adequate infrastructure(Nigeria) and the lack of uniform information technology penetration (SouthAfrica) meant that a full move towards electronic government procurement wasnot possible or realistic in the short term in both countries.73 The recommendationsin the CPARs of both countries were essentially identical and it was recommendedthat both countries embark on a pilot project to gain experience in the field ofelectronic public procurement and test how electronic public procurement couldbe used to support transparent and streamlined procurement processes.74 TheCPAR of South Africa further suggested that the government consider developinga policy framework for the implementation of electronic public procurement.

F. Commercial practices and private sector procurement

In relation to the commercial sector, the CPAR on South Africa found that SouthAfrica had a highly developed private sector, both in terms of large industries(manufacturing, mining, automobile assembly, metalworking, chemicals, etc.) andalso in terms of small, medium and micro enterprises (SMMEs). The promotion ofSMMEs as a means of democratising the formal economy and providing access toemployment, income and the upliftment of the black community in South Africais a central tenet of economic policy in South Africa, and various measures andinitiatives exist to assist in implementing this policy.75 In relation to private sectorprocurement, it was found that procurement practices were company and sectorspecific but, similar to the public sector, the private sector also did not possess thecapacity to handle complex procurements.76 Also similar to the public sector, the

70 Nigeria CPAR, vol. I, p. 21.71 See generally S. Croom and A. Brandon-Jones, ‘Key Issues in E-procurement: Procurement Im-

plementation and Operation in the Public sector’, in Thai, International Handbook of Public Pro-curement, supra note 5; S. Arrowsmith and J. Tillipman (eds), Reform of the UNCITRAL ModelLaw on Procurement: Procurement Regulation for the 21st Century, West (2010), chs 7–15.

72 South Africa CPAR, vol. II, p. 53; Nigeria CPAR, vol. I, p. 22.73 For literature on some of the barriers to successful e-procurement see K. Vaidya, G. C. Callender

and A. S. M. Sajeev, ‘Facilitators of Public E-procurement: Lessons Learned from the U.K. U.S.,and Australian initiatives’, in Thai, International Handbook of Public Procurement, supra note 5.

74 South Africa CPAR, vol. II, p. 54; Nigeria CPAR, vol. II, p. 66.75 South Africa CPAR, vol. II, pp. 55–7.76 South Africa CPAR, vol. II, p. 58.



private sector procurement function was not generally professionalised. The mainrecommendation by the CPAR was thus to enhance the training of procurementpersonnel in both the public and private sectors.77

In contrast to South Africa, the CPAR on Nigeria found that Nigeriancommerce was dominated by agriculture and the upstream oil industry, withagriculture providing a living for two thirds of the population and the oil industryaccounting for 80 per cent of all government revenue.78 In terms of publicsector procurement, it was found that as most large companies in Nigeria weremultinational corporations, they conducted their large procurements through theirhead offices and did not involve Nigerian personnel, while smaller procurementswere conducted according to the procedures of the local subsidiary.79 TheCPAR also found that, similar to South Africa, there was a lack of capacityin procurement and in quality management. The recommendation made by theCPAR was for Nigeria to establish a quality management systems institute, butthe government rejected this recommendation.

G. Preferential procurement systems

This area of procurement was investigated in the context of South Africa,given South Africa’s procurement history and the context of the procurementreforms. After the demise of apartheid, the South African government carriedout extensive measures to democratise the economy and alleviate the poverty ofblack South Africans, women and rural communities, which were consequencesof the apartheid policy. The way in which procurement was used to achieve thishas been detailed elsewhere80 and will not be repeated here; suffice it to saythat the Preferential Procurement Policy Framework Act81 grants categories ofpreferences to historically discriminated against individuals. The procurementpolicy as outlined in the Interim Ten Point Plan also contains requirements forthe use of local labour and the unbundling of contracts to make them attractiveto SMMEs. The CPAR found that some of the unintended consequences ofthe preferential procurement policy include the undue administrative burden ongovernment agencies as a result of the requirement to unbundle contracts. Thishas also limited their ability to spend capital budgets and reduced the market shareof large construction companies and resulted in job losses.82 Other unintendedconsequences include the decrease in the mobility of construction firms as a resultof local labour requirements and a reduction in the quality of construction as aresult of the unattractiveness of public contracts to established firms. The CPAR

77 South Africa CPAR, vol. II, p. 60.78 Nigeria CPAR, vol. I, p. 16.79 Ibid.80 P. Bolton, ‘The Use of Government Procurement as an Instrument of Policy’, 121(3) South

African Law Journal (2004): 619; P. Bolton, ‘An Analysis of the Preferential ProcurementLegislation in South Africa’, 16(1) Public Procurement Law Review (2007): 36.

81 Act 5 2000, Government Gazette 20854 (3 February 2000).82 South Africa CPAR, vol. II, p. 47.



thus made a number of recommendations to improve the preferential procurementsystem. These included a revision of the PPPFA regulations to provide for thegraduation of previously disadvantaged firms to the status of established firmswhen they attained a certain turnover threshold; the establishment of targetsfor preferential procurement policies; the establishment of a requirement forgovernment agencies to report on their progress in achieving their targets andmeasures to address the training needs of previously disadvantaged firms.83

H. Performance on World Bank-financed contracts

Owing to the high level of corruption in Bank-funded contracts, the CPARon Nigeria included an audit of six Bank-funded projects. It was foundthat procurement in Bank-financed contracts fared no better than domesticprocurement and in many cases, the procurement methods used were inconsistentwith those stated in the Loan Agreement and there was a lack of transparencyin the choice of selected firms. In addition, Nigerian agencies did not properlyobserve the Bank’s rules in relation to the pre-qualification of bidders, leadingto the selection of non-qualified contractors. Proper procedures were also notfollowed in the procurement of consultant services and contract management,and record keeping had very severe weaknesses.84 The CPAR thus recommendedincreased oversight and monitoring of Bank-financed contracts, proper andadequate procurement planning, an assessment of capacity to conduct theprocurement before procurement commences, and adequate training on theBank’s procurement guidelines where there are shortcomings as well as improvedcontract management.85

I. General risk assessment

The CPAR on South Africa found that the risk to the South African procurementsystem from procuring entities at the national level was medium to low but therisk level was medium to high from procuring entities at the provincial andlocal levels.86 In Nigeria, the CPAR found that there were serious weaknessesin the current procurement system, including the lack of appropriate legislation,the shortage of basic skills and inadequate organisation; however, there was acommitment from the government to reform the public sector, although the CPARidentified that there was also likely to be resistance to some of the reforms.87

83 South Africa CPAR, vol. II, pp. 49–50.84 Nigeria CPAR, vol. II, pp. 44–5.85 Ibid., p. 46.86 South Africa CPAR, vol. II, pp. 72–4.87 Nigeria CPAR, vol. II, p. 67.



IV. THE IMPLEMENTATION OF THE CPAR RECOMMENDATIONS

In response to the recommendations of the CPARs, both South Africa andNigeria engaged in legislative and institutional reform. This section will analysethe extent of those reforms in relation to the sectors that relate to domesticpublic procurement, discussing whether the reforms were sufficient to addressthe concerns raised in the CPAR. The section will also comment on whether andto what extent the proposed reforms could be said to be appropriate given thecontextual challenges of the countries in question.

A. South Africa

As can be seen from the above, the CPAR recommendations for South Africawere limited in nature and scope because the reform agenda for South Africa wasalso limited to providing a basis for dialogue on the procurement reforms thatwere already underway and propose recommendations that would lead to greatervalue for money.88 In other words, the reform agenda was limited to enhancing,streamlining and making the existing procurement system more effective. Thelimited nature of the reform agenda meant that in many cases, the proposedrecommendations did not require major changes and were suitable to the SouthAfrican procurement and socio-economic context.

In relation to the regulatory framework on procurement and procurementpractices and procedures, the CPAR recommended the creation of a nationalprocurement policy and a simplified regulatory framework, and the creation ofa national procurement compliance department with responsibility for ensuringcompliance with procurement law and policy. In direct response to the CPAR,and particularly in response to the recommendation to create uniformity inthe procurement environment, the National Treasury, in April 2003, issued apolicy document addressing the issues of the lack of uniformity in procurementpolicy and the fragmentation and lack of coherence in public procurementpractices.89 The aim of this document was to promote uniformity in theprocess of procurement reform as government agencies moved from a systemof tender boards to devolving procurement responsibility and accountability toaccounting officers of government agencies. The document also intended topromote uniformity in the interpretation of the preferential procurement policyby government agencies, thereby meeting one of the criticisms of the CPAR. Inaddition, the document sought to introduce the parameters for the promulgation ofa regulatory framework on procurement.90 The policy strategy also addressed theCPAR criticism that there was an undue focus on lowest price and procurementprocedures as the means for obtaining value for money, without due consideration

88 South Africa CPAR, vol. I, p. 1.89 National Treasury, ‘Policy Strategy to Guide Uniformity in Procurement Reform Processes in

Government’ (7 April 2003), available at http://www.treasury.gov.za/divisions/sf/sc/Guidelines/policy.pdf (accessed 29 September 2011) (Policy Strategy).

90 Policy Strategy, p. 2.



being given to procurement outcomes. The policy strategy introduced the conceptof supply chain management, which sought to bridge the divide between outdatedprocurement practices and effective and strategic procurement.91 Further to thepolicy strategy, the National Treasury also issued municipal authorities withguidance to enable them to operate an integrated and cohesive supply chainmanagement process.92

While the CPAR recommended the creation of a national complianceunit within the National Treasury with responsibility for ensuring compliancewith procurement legislation and policies, this recommendation was not fullyimplemented and the Supply Chain Management Division within the NationalTreasury is still responsible for coordinating procurement policy and overseeingthe procurement function of government agencies. Within the National Treasury,however, another unit known as the Norms and Standards Unit was created toensure the compliance of contracting authorities with the extant procurementnorms and standards.

In relation to the CPAR criticism that the preferential procurement policieswere complex and difficult to implement and in any event were appliedwith little uniformity, the government redrafted the Preferential ProcurementPolicy Framework Act Regulations. The new regulations align the preferentialprocurement policy with the legislation on black economic empowerment93 andcame into effect in December 2011.94 The new regulations streamline and clarifythe obligations on government agencies in relation to preferential procurementand reduce the levels of discretion available to procuring entities in awardingpreference points by listing the number of points to be awarded based on asupplier’s Black Economic Empowerment (BEE) status.95 The new regulationsalso increased the threshold values for the preference points system and requiregovernment agencies to advertise contracts with a local content requirement wherelocal production is of importance.96 The new regulations have thus brought ameasure of consistency and clarity into the area of preferential procurement andit is hoped that this will lead to more coherent application of the legislation inpractice.

91 D. Van Greunen, M. E. Herselman and J. Van Niekerk, ‘Implementation of Regulation-basedE-procurement in the Eastern Cape Provincial Administration’, 4(17) African Journal ofBusiness Management (2010): 3655.

92 National Treasury, Supply Chain Management: A Guide for Accounting Officers ofMunicipalities and Municipal Entities (October 2005), available at http://www.treasury.gov.za(accessed 11 October 2011).

93 Broad Based Black Economic Empowerment Act 53 2003, Government Gazette 25899 (9January 2004). See J. D. Taylor and K. Raga, ‘Preferential Procurement: A Case Study of SouthAfrica’, paper presented at the 4th International Public Procurement Conference, Seoul, SouthKorea, August 2010, available at http://www.ippa.org (accessed 30 September 2011).

94 Preferential Procurement Policy Framework Act 2000: Preferential Procurement Regulations2011, Government Gazette 34350 (8 June 2011) (PPPFA Regulations 2011).

95 P. Bolton, ‘New Preferential Procurement Regulations Released’, 13(3) Local GovernmentBulletin (2011): 7.

96 Regulation 9 PPPFA Regulations 2011.



In February 2010, the South African government also issued the IndustrialPolicy Action Plan, which provides for the use of strategic leveraging ofpublic procurement to deliver increased value for money and industrial policyobjectives. This Action Plan also reiterated the need for the prompt overhaulingof procurement legislation, beginning with the amendments to the PPPFAregulations.97

In relation to the criticism about the lack of capacity of procurement personnelin the public sector, the government in 2007 prescribed minimum competencylevels for persons involved in the procurement function in agencies that aregoverned by the Municipal Finance Management Act 2003.98 To this end, thehead of a supply chain management unit in a municipal or municipal entitywith an annual budget of below R500 million must possess at least a NationalQualifications Framework Level 5 or a National Diploma in Public FinanceManagement and Administration and a minimum of four years’ work experienceof which one year must be at middle management level, or six years’ workexperience at any level in a role related to the position of the official.99 Sucha person must also possess competency in the areas of strategic financialmanagement, operational financial management, governance, ethics and valuesin financial management, risk and change management, project management,legislation policy and implementation, stakeholder relations, and supply chainmanagement. Where the procuring entity has an annual budget equal to or aboveR500 million, the head of the supply chain management unit must possess atleast a National Qualification Framework level 6 and a minimum of five years’experience, of which two years must be at middle management level, or sevenyears’ experience at any level in a role related to the position of the official.The person must also possess competency in the areas described above. Similarbut lesser qualifications are also required under the regulations for supply chainmanagement managers.100

Apart from the minimum competency requirements, the National Treasury hasalso spearheaded and coordinated the training of procurement personnel, whichincludes short-term training in supply chain management, medium-term trainingin all elements of supply chain management as well as specialist skills, and long-term support of diploma and degree courses by tertiary institutions.101

In relation to electronic commerce in government procurement, the CPARdetailed the necessity for an e-government policy and recommended that a pilotprogramme be undertaken to test the use of electronic methods in the procurementprocess. The South African government has gone beyond this, however, and

97 Government of South Africa, Industrial Policy Action Plan, 2010/11–2012/13 (February 2010),available at http://www.info.gov.za (accessed 30 September 2011).

98 Municipal Regulations on Minimum Competency Levels, Government Gazette 29967 (15 June2007) (Minimum Competency Regulations).

99 Regulation 11 Minimum Competency Regulations.100 Regulation 12 Minimum Competency Regulations.101 National Treasury Practice Note SCM 5 2004, Training of Supply Chain Management Officials

(27 October 2004), available at http://www.treasury.gov.za (accessed 30 September 2011).



enacted the Electronic Communications and Transactions Act 2002,102 which is acomprehensive piece of legislation, intended to regulate electronic communicationin the public and private sectors and provide for the development of a nationalelectronic strategy. In addition, some aspects of the procurement process areconducted electronically. For instance, bid documents are available to be obtainedand submitted electronically in some cases. Thus, there is in essence themovement towards electronic government procurement.103

From the above, it can be seen that the South African government implementedmost of the recommendations of the CPAR in relation to public procurement andin many cases went beyond the recommendations of the CPAR.

B. Nigeria

As was seen, Nigerian public procurement was at a less developed stage thanSouth Africa’s as there was no procurement legislation, no standards or normsthat governed public procurement and no institution with the responsibility forensuring compliance with the extant public procurement rules.104 As a result,Nigeria’s compliance with the CPAR recommendations led to more radicalreforms than those seen in the context of South Africa. As will be discussedfurther below, while the recommendations made in the CPAR were appropriateto create an adequate and well-functioning procurement system for Nigeria, theWorld Bank’s approach to ensuring Nigeria complied with the recommendationswas not suitable given the Nigerian socio-political context and this has affectedthe success of the reform programme.

In relation to the CPAR finding that there was no legislative framework onpublic procurement in Nigeria, the CPAR recommended the enactment of a publicprocurement law based on the UNCITRAL Model Law on the Procurement ofGoods, Construction and Services.105 In response, the Nigerian government in2007 passed the Public Procurement Act (PPA).106 The PPA is a comprehensivestatute which created new institutions; strengthened new and existing obligationson procuring authorities in relation to the procurement function; provided forthe use of competitive procurement procedures; created a system of supplierremedies; created a debarment (disqualification) mechanism; and created severalprocurement-related offences. The PPA governs the procurement of goods,construction works and services and also applies to the disposal of state assets.107

In response to the recommendation that an institution should be establishedwith supervisory function over procurement matters, the PPA created two newinstitutions: the National Council on Public Procurement (NCPP) and the Bureau

102 Act 25 2002, Government Gazette 23708 (25 August 2002).103 See generally Van Greunen et al., ‘Implementation of Regulation-based E-procurement’, supra

note 91.104 Williams-Elegbe, ‘The Reform and Regulation of Public Procurement in Nigeria’, supra note 28.105 34 ILM 718 (1995).106 Official Gazette no. 65, vol. 94 (19 June 2007).107 Williams-Elegbe, ‘The Reform and Regulation of Public Procurement in Nigeria’, supra note 28.



of Public Procurement (BPP). The NCPP is intended to function as the supremeoversight procurement body in Nigeria and is made up of high-level politiciansand officers such as the Minister of Finance, the Attorney-General, the Secretaryto the Government, the Head of the Civil Service, the Economic Adviser to thePresident, the Director-General of the BPP and representatives of civil society,the media, the Bar, the Chamber of Commerce, the Society of Engineers and theInstitute of Purchasing and Supply Management.108 The functions of the NCPP areto consider and approve the monetary and prior review thresholds for the purposesof the PPA, consider and approve policies on public procurement, approve theappointment of the Directors of the BPP, audit and approve the accounts of theBPP, approve changes in procurement processes necessary to adapt to moderntechnology and perform any other functions necessary to achieve the objectivesof the PPA.109 The NCPP is also required by law to formulate regulations for theconditions of service of employees of the BPP110 and regulate the use of funds bythe BPP.111

As stated, the NCPP is intended to be the overall supervisory body, overseeingthe work of the BPP, which in turn supervises the procurement function ofgovernment agencies. As at May 2012, however, the NCPP had not beenconstituted and this has led to gaps in the procurement scheme and a situationin which some of the functions of the NCPP are carried out on an ad hoc basis bythe Federal Executive Council and the BPP.

The BPP, on the other hand, came into existence in 2007 on the passageof the Public Procurement Act and is the functional organisation that oversees,supervises and regulates the procurement practices of government agencies.The BPP was created to formulate policy direction on public procurement forapproval by the NCPP, publicise the PPA, assent to federal contracts subject to therelevant financial thresholds, monitor the contract process and keep a database ofcontract prices, publicise details of major contracts, maintain databases of federalcontractors, undertake procurement research and the training of procurementprofessionals, prepare standard bidding and contract documents, and prevent fraudand corruption in public procurement.112 The BPP also supervises the procurementfunction of government agencies by reviewing the procurement and contractaward procedures of government agencies, conducting procurement audits ofsuch institutions, and maintaining a central Internet portal as a source of allprocurement-related information.113 The BPP further has the power to conductthe disqualification (debarment) process in relation to erring contractors.114

In relation to the CPAR recommendation on procurement practices andprocedures that the Nigerian government discontinue the practice of supplier

108 Section 1 PPA.109 Section 2 PPA.110 Section 10 PPA.111 Section 13 PPA.112 Section 5 PPA.113 Sections 4 and 5 PPA.114 Section 6 PPA.



registration, develop a uniform system of supplier registration for other contracts,and introduce mandatory advertising of contracts and mandatory rules onthe use of specified procurement procedures and the introduction of standardbidding documents, the PPA provided for mandatory advertising and the use ofcompetitive procurement procedures and BPP designed and introduced standardbidding documents. The government did not eliminate the practice of supplierregistration for open competitive bidding, however; neither did it introduce a moresystematic method of supplier registration. The change that has been wrought inthis area since the CPAR is that contract adverts now clearly state what is requiredfor supplier registration.

In relation to the CPAR recommendation that the tenders board systembe streamlined and the capacity of procurement personnel be increased, theNigerian government ensured that in federal agencies only one Tenders Boardis authorised to conduct procurement matters and also created in federal agenciesand ministries a procurement division headed by a Director, who is responsiblefor managing and conducting the procurement process. In relation to training,the Bureau of Public Procurement has since its inception conducted training andcertification of persons involved in the procurement function. Although mostof the CPAR recommendations in this area have been implemented, as wasdiscussed elsewhere, there remain severe inadequacies in the level of procurementcapacity.115 Further, although the procurement function has been devolved to civilservants, the Nigerian government did not implement the CPAR recommendationthat politicians should not be operationally involved in the procurement processand politicians are still required to approve contracts over a certain threshold, andin doing so are able to improperly influence procurement outcomes.116

In relation to the CPAR finding on the lack of infrastructure and a frameworkfor electronic government procurement, the Nigerian government has made somestrides. In 2004, the government established National E-government StrategiesLtd, a joint initiative between the government, represented by the NationalInformation Technology Department Agency, and the private sector, which isaimed at increasing the participation of ordinary citizens in government activitythrough information and communication technologies.117 Nigeria also created,in 2000, a National Policy for Information Technology, which is aimed at,among others, improving the accessibility to public administration for all citizens,bringing transparency to government processes, and promoting legislation for theprotection of online business transactions, privacy and security.118

While there is as yet no true system of electronic procurement, tenderinformation and bidding documents are currently available on the Internet,

115 Williams-Elegbe, ‘The Reform and Regulation of Public Procurement in Nigeria’, supra note 28.116 Ibid.117 Dr O. Agunloye, ‘Implementing the Nigerian E-government Programme’, paper presented

to UNeGovt Workshop on eGovernance, 24 July 2006, available at http://www.unegov.net(accessed 3 October 2011).

118 See Nigerian National Policy for Information Technology (IT), available athttp://www.nitda.gov.ng (accessed 3 October 2011).



although the submission and the consideration of tenders still occurs offline;however, some large government agencies have commenced electronic purchaseinitiatives,119 a development that may eventually lead to a lack of coherence andstandardisation in electronic procurement. This situation will not be aided bythe fact that there is also no legislation to regulate electronic communicationin Nigeria, unlike what obtains in South Africa; however, it is expected that asthe relevant infrastructure is built and Internet penetration deepens, electronicprocurement will become a part of Nigeria’s procurement landscape.120

Thus, as can be seen, similar to South Africa, Nigeria implemented most ofthe recommendations in the CPAR. As is discussed further below, however, thefailure to implement the recommendation on the involvement of politicians in theprocurement process is undermining the procurement reform process in Nigeria.

V. ASSESSING THE SUCCESS OF THE REFORMS

The procurement reform efforts in South Africa and Nigeria are still ongoing. InSouth Africa, the challenge is to have an efficient, transparent and cost-effectiveprocurement system that provides value for money, but is used as a vehicle to driveblack economic advancement and the expansion of local industry. Unfortunately,these goals will always conflict with one another, as there is always a cost toincluding social, environmental and industrial concerns (secondary policies) inpublic procurement.121 In South Africa, as was detailed in the CPAR and has beendetailed in the literature, the preferential procurement system has created eliteclasses of firms that continue to benefit from the preferential procurement policyto the disadvantage of other smaller firms. This is one reason why the CPARadvocated the ‘graduation’ of firms that no longer required preferences out ofthe class of firms eligible for preferential treatment.

While the absence of up-to-date and reliable data on the effectiveness ofthe preferential procurement policy as a means of achieving the desired socialchange122 and the recent changes to the preferential procurement legislationhave meant it is difficult to comment on the success of the reform in the area

119 M. Okwe, ‘NNPC Spends N3 trillion Yearly on Procurement, Launches ElectronicPurchase Mechanisms’ (13 December 2006), available at http://www.thenigeria business.com/energy25.html (accessed 3 October 2011).

120 A. Adebiyi, C. Ayo and M. Adebiyi, ‘Development of Electronic Government Procurement(e-GP) System for Nigeria Public Sector’, 10(6) International Journal of Electrical andComputer Sciences (2010): 74.

121 S. Arrowsmith, J. Linarelli and D. Wallace, Regulating Public Procurement: National andInternational Perspectives, Kluwer Law International (2000), ch. 5; C. McCrudden, ‘SocialIssues in Public Procurement: A Legal Overview’, in Arrowsmith and Davies, PublicProcurement: Global Revolution, supra note 6; S. Kahn, ‘Problems of Industrial Policy inHigh Technology Collaborative Procurement’, in Arrowsmith and Davies, Public Procurement:Global Revolution, supra note 6; OECD, The Environmental Performance of PublicProcurement: Issues of Policy Coherence, OECD (2003); D. N. Dagbanja, The Law of PublicProcurement in Ghana: Law, Policy and Practice, Lambert Academic Publishing (2011), ch. 8.

122 D. Acemoglu, S. Gelb and J. A. Robinson, ‘Black Economic Empowerment and EconomicPerformance in South Africa’ (August 2007): 2, available at http://www.npconline.co.za(accessed 6 October 2011).



of preferential procurement, South Africa has, however, achieved discerniblesuccesses in areas such as electronic procurement and capacity building. Thereis already the embryonic use of electronic systems in public procurement; and inrelation to capacity building, the minimum standards of competency have ensuredthat only qualified persons are involved in the procurement function, but this hasunfortunately also meant that in some agencies, there are unfilled vacancies in thesupply chain management division.123

In the context of Nigeria, although the Nigerian government implementedthe main CPAR procurement-related recommendations, except in relation to theinvolvement of politicians in the procurement process, the reform efforts havehad only a limited success in bringing about the desired changes in publicprocurement. It must be stated that some of the factors identified in the literatureon procurement reform as barriers to effective procurement reform such as vestedinterests, a lack of political will and the lack of technical capacity124 are allmilitating against the successful implementation of the reform process in Nigeria.While there has been the enactment of new legislation and the creation ofnew processes, procedures and institutions, it was revealed in interviews withprocurement personnel in Nigeria in July 2011 that, to a large extent, these newprocedures are merely being manipulated to maintain the status quo that existedprior to the reforms – which was to ensure that public contracts are awarded tothe firm in which the minister, permanent secretary or other politician has aninterest.125 The continued involvement of politicians in the political process is thusseriously undermining the procurement reform process. The CPAR recommendedthat this practice should be stopped, but the Nigerian government continues thepractice whereby the Federal Executive Council (ministers in council) is requiredto acquiesce to contracts over a certain threshold. This means that in practice,ministers become aware of contracts in which they could then use their leverageto ensure they are awarded to particular firms or that particular firms from theirconstituency are engaged as subcontractors. While there is the political will forchange at the presidency, the deeply vested interests of politicians in procurementoutcomes are stalling and undermining the reform process.

Also as was discussed above, the lack of procurement capacity means thateven where there is the will on the part of civil servants to properly conductthe procurement process, the lack of skills means that in some cases, theprocedures are followed without an appreciation of the reasons underpinningthose procedures, leading to undesired outcomes. The one-week training andcertification exercise conducted by the BPP for procurement personnel isinsufficient to ground personnel in the technical procurement skills, the knowledgeof the legal and institutional framework, and the policy and financial managementissues related to the procurement environment. It may be that the SouthAfrican approach, which prescribes minimum competency levels for procurement

123 Van Greunen et al., ‘Implementation of Regulation-based E-procurement’, supra note 91.124 Hunja, ‘Obstacles to Public Procurement Reform in Developing Countries’, supra note 6,

pp. 17–18.125 Williams-Elegbe, ‘The Reform and Regulation of Public Procurement in Nigeria’, supra note 28.



personnel and supports this with a comprehensive training programme, may bepreferable to the ad hoc and inadequate training of incumbent personnel.

There are, however, a few ways in which the reforms in Nigeria have met withmeasurable success. One is in cost savings to the government, and this is dueto the fact that the BPP has to give a certificate of no-objection to governmentagencies to proceed with contracts over a certain threshold.126 In many cases,however, the BPP also revises over-inflated contract prices and will not provide thecertification where the contract price is highly in excess of market prices. Second,the government sought to increase the attention of civil society and the privatesector on government procurement by inviting civil society to public bid openingsas observers and training civil society organisations in the public procurement lawin order to utilise them as watchdogs over the procurement function of governmentagencies. This has led to an increase in the number and quality of civil societyorganisations that specialise in governance and anti-corruption issues. A third wayin which the reforms have been successful is in the publicity and transparency thatare now afforded to government procurement, especially for larger contracts. TheBPP publishes on its website details of contracts that have been given a certificateof no-objection and contracts that have been given Federal Executive Councilapproval. This measure is going a long way to redress the secrecy that used tosurround government contracts and means that the public may verify whether suchcontracts are properly implemented.127

VI. PROPOSALS FOR CHANGE: A MORE HOLISTIC APPROACH TO PUBLICPROCUREMENT REFORM IN NIGERIA

As seen from the above, although the Nigerian procurement system has to allintents and purposes undergone reform with the creation of a new regulatoryframework, in many ways, the procurement system is still dogged by corruptpractices. In this author’s view, one reason for this is because the reforms were notradical enough for a country like Nigeria where public contracts were traditionallyseen as a means of enriching the elite. The reforms to the procurement systemfollowed the same pattern of reform in other countries, which do not have thesame contextual challenges.128 While the recommendations made for Nigeria wereappropriate and necessary, the approach to the reform process was not appropriatefor Nigeria because of the social, economic and political peculiarities of Nigeria,and the World Bank ought to have exerted pressure on Nigeria to fully complywith all the CPAR recommendations.

Procurement reform must be seen to be more than the adoption of legal rulesand must in the long term be accompanied by supporting political, social andeven educational institutions.129 The reforms in Nigeria took place outside the

126 Sections 6(1)(b) and 16(1)(b) PPA.127 See http://www.bpp.gov.ng (accessed 4 October 2011).128 See Walker, ‘Setting Up a Public Procurement System: The Six Step Method’, supra note 6.129 J. I. Schwartz, ‘On Globalization and Government Procurement’, in Arrowsmith and Trybus,

supra note 6, p. 45.



context of Nigeria’s socio-political environment and did not take into account thedeep-rooted nature of corruption in the procurement structure and the capacityand knowledge challenges that are more stark in the federal civil service as aresult of the constitutional policy of ‘federal character’, which requires that high-level positions in politics and in the civil service equitably reflect the state, tribaland religious divides in Nigeria.130 While this policy may seem appropriate topromote diversity and equality in a pluralistic society, in practice, it breeds a non-meritorious system of appointment and promotions in the federal civil service,with consequences for the capabilities of some senior civil servants. The qualityof education of civil servants also has a bearing on procurement capacity issues.131

The CPAR did not go far enough and ought to have included recommendationsfor more radical reforms of Nigerian procurement that were not divorced fromthe context of the Nigerian environment.132 These recommendations shouldhave included the dismantling of entrenched practices and structures.133 One ofthe structures that was left to stand was the involvement of politicians in theprocurement process and, as discussed, this structure is at present underminingthe reform agenda. Further, the CPAR recommendations should have given moreattention to capacity building, beyond recommendations to train procurementpersonnel. As has been highlighted by Walker, a highly educated civil serviceis vital to the success of procurement reforms.134 Thus, as is the case in SouthAfrica, a recommendation for minimum qualifications for procurement personneland possibly all senior civil servants should be able to ameliorate the issues thatare a direct result of lack of knowledge and capability.

Further, the CPAR ought to have highlighted with greater force the necessityfor a comprehensive procurement policy.135 In Nigeria, the lack of an overarchingand coherent procurement policy has also meant that beyond the use of proceduresto prevent corruption, procurement reform has been divorced from the contextof procurement outcomes – whether those are to deliver goods, infrastructure orservices to the public. The focus on corruption as the driver of procurementreform has also led to a skewed approach to procurement, which was also

130 Sections 14(3)&(4) and 171(5) constitution of the Federal Republic of Nigeria 1999.131 In a comparison of higher education quality among thirty-nine countries, Nigeria obtained the

lowest score, with Lesotho. See A. A. Maslak, G. Karabatsos, T. S. Anisimova and S. A. Osipov,‘Measuring and Comparing Higher Education Quality Between Countries Worldwide’, 6(4)Journal of Applied Measures (2005): 432. Another study estimated the years of schooling forthe average Nigerian to be 3.89 years, one of the lowest in the world. See E. A. Jamison, D. T.Jamison and E. A. Hanushek, ‘The Effects of Education Quality on Income Growth and MortalityDecline’, 26(2) Economics of Education Review (2007): 772.

132 O. McDonald, ‘Buying Power: Aid Governance and Public Procurement’, Christian Aid(February 2008), p. 4, available at http://www.eurodad.org (accessed 6 October 2011).

133 Hunja, ‘Obstacles to Public Procurement Reform in Developing Countries’, supra note 6, p. 17.See also D. Rodrik, ‘Institutions for High Quality Growth: What They Are and How to AcquireThem’, 35(3) Studies in Comparative International Development (2000): 3.

134 Walker, ‘Setting Up a Public Procurement System: The Six Step Method’, supra note 6, p. 7.135 The CPAR mentioned the development of a procurement policy as one of the functions of a

procurement regulatory body, but did not highlight a policy as one of its main recommendationsas was done in the case of South Africa. See Nigeria CPAR, vol. II, p. 20; South Africa CPAR,vol. II, p. 12.



seen in the South African context, where there is an undue focus on tenderingprocedures with lowest price being seen as the only way to prevent corruption.136

The absence of corruption in public procurement will not necessarily lead to thedesired procurement outcome, however, where the goods, services or works beingprocured are not of the right quality or are not delivered when required.

VII. CONCLUSION

This paper has tried to show the influence the World Bank has had on developingcountry procurement, using South Africa and Nigeria as examples. As was seen,the World Bank’s CPAR has had a major influence on the reform of the publicprocurement systems of these countries. It was seen that although the Bank has thetools to comprehensively review the procurement systems of developing countriesthrough the CPAR, and make appropriate recommendations, the manner in whichcountries implement these recommendations, as was seen especially in the caseof Nigeria, may lead to a reform programme that appears to have succeeded butin reality merely maintains the status quo or, worse, gives new opportunities forrent-seeking. What is needed is that for countries where reforms may not succeedwithout a radical overhaul of existing structures and practices, the Bank shouldfirst, be bold enough to recommend radical changes and second, use its leverageto apply pressure on such countries to ensure that the necessary steps are taken toensure the desired outcomes in the procurement reform process.

136 Note that section 16(17) PPA mandates the use of lowest price as the criterion for bidderselection.

The World Bank's Influence on Procurement Reform in Africa

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