On the Spot with Eric Teniola

July 16, 2019

Whither the due process mechanism? (2)

Whither the due process mechanism? (2)

By Eric Teniola

ONE of the main objectives of the unit was to harmonise and update all Federal Government policies and practices on public procurement to ensure that project conceptualisation and packaging match the defined priorities and target as set in annual appropriations and to strictly enforce the due principles of transparency, competition and efficiency and value-for-money in the procurement of public goods, works and services. Other objectives of the unit are to ensure efficient and integrity-based monitoring of the implementation of all Federal Government projects in line with due process principles to prevent extra-budgetary spending by Ministries, Departments and Agencies; by ensuring that only projects with due appropriation by the National Assembly are certified and thus funded for execution and to prevent contract inflation; by ensuring cost reasonableness, accuracy and comparability of all public contracts with national, regional and global costs.

According to the unit, there were three approval thresholds for the approval and award of Federal Government contracts. These were contracts below N1million, contracts above N1 million below N50 million and contracts of N50 million and above. As at December 2005, the unit claimed to have saved Nigeria over N152 billion through reduced contract cost. There are several instances where sums ranging from N10 million to N11billion have been “saved” through due process from a single contract transaction. Till June 2005 when Dr. Oby Ezekwesili was appointed as Minister of Solid Minerals by President Olusegun Obasanjo, the nation was bombarded with such exaggerated claims of even up to N250 billion saved.

These claims were never verified by anyone or any group. If the unit could save so much from contracts awarded, the question is who awarded the contracts and what were the punishment meted out for the negligence. Many claimed at that time that the figures released by the unit were designed to justify the establishment of the unit. Certainly no one is against due process in the award of contracts but if you look closely at the guidelines brought by the unit, they have been in existence for long. In government there have been two tender boards in each Ministry. We have the departmental tender’s board and the Ministerial tender’s board.

These two operate under what is called Financial Regulations. Incidentally the preface for the new Financial Regulations was written by President Obasanjo on January 1, 2000. In the preface Obasanjo declared: “This revised edition of the Financial Regulations is issued on my instruction within weeks of the inception of the administration to underscore my concern for the restoration of rules and regulations and the need to adhere strictly to them in the conduct of government business, particularly in the control and management of public funds and resources of government.

“Since 1976 when the Financial Regulations were last reviewed and published, the conduct of Government business has undergone many transformations. From the mid 1980s especially, anyone with the slightest idea about how the machinery of good government should work, would have noticed that the time-tested ways of conducting government business have degenerated and fallen apart. Compliance with the Public Service Rules and Financial Regulations has been jettisoned and instead, regime of indiscipline, disorder and arbitrariness were established.

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“All the elements that enhance efficiency, reliability and continuity of the system have been tampered with, resulting in major and severe setbacks for the conduct of government business. Government business was operated as if laws and rules no longer existed to govern the way and manner public funds were expended. Public funds were disbursed illegally without recourse to the Financial Regulations; facilities of the Central Bank of Nigeria, CBN, and the Nigerian Security Printing and Minting Company, NSPM, were recklessly abused; and the Contingencies Funds was used without regard to the rules governing its operation.

“As I have enunciated on May 29,1999 in my inaugural address and repeated on several occasions, there would be changes in the philosophy of management of Government business under the present democratic administration. Henceforth, rules and regulations designed to promote honesty and transparency in dealings with government would be restored, strengthened and vigorously enforced.

“Accordingly, it is mandatory for all public officials to ensure strict compliance with the rules and regulations as contained in this Handbook. Primary responsibility in this regards falls on the shoulders of permanent secretaries in their double capacity as accounting officers of their ministries and advisors to their respective ministers.

“They are expected to ensure that all officers subordinate to them adhere strictly to these rules and regulations. They are also expected to guide their ministers to operate strictly in accordance with rules and regulations. It is mandatory for ministers to ensure that any decision taken by them is correct, unexceptionable and in the public interest. In this regard they should insist that any recommendation put before them is supported by the relevant provision of an extant Act or Regulation.

“Finally, I urge all public officers to acquaint themselves with these Regulations, the Finance (Control and Management) Act, Cap. 144 as well as the relevant sections of the Constitution dealing with public finance”.

The Due Process mechanism has not offered anything new judging by the contents of the existing Financial Regulations. Except the non-creation of the Procurement Act which provides for the establishment of the National Procurement Council which all previous administrations including the present one has refused to set up, there is nothing new in guidelines of the due process mechanism. Even the Act itself is a new global phenomenon.

Non adherence to the Financial Regulations should not have led to the establishment of the Budget Monitoring and Price Intelligence Unit, BMPIU, which is the unit tasked with implementing Nigeria’s Public Procure Reform Programme. In future, such policies, like the Due Process Mechanism, will be viewed with much scepticism.