Can we change the narrative on corruption in public procurement in Nigeria?

For several decades, Nigeria, Africa’s economic giant, has struggled with corruption, especially in relation to public procurement at the federal, state, and municipal/local levels of government. In 2022, Nigeria obtained 24 out of a possible 100 points in Transparency International’s Corruption Perceptions Index (CPI). This is the same score as the Central African Republic, Guatemala, and Tajikistan and well below the global average of 43 out of 100. Corruption impedes the functioning of the public sector and the economy with a debilitating effect on quality of public service delivery. Corruption can also breed political instability and social unrest, which serves extremists and can lead to long-term insecurity. As noted in the CPI report, “corruption undermines governments’ ability to protect people and erodes public trust, provoking more and harder to control security threats.”

The percentage of GDP that is spent on procurement in Nigeria varies over time, but it is estimated to range from 10-25%. Moreover, of the amount spent on procurement, the Anti-Corruption Agencies of Nigeria (comprising all agencies with mandates to investigate corruption and financial crimes) estimates that Nigeria loses $18 billion every year to corruption and financial crimes. This is a staggering estimate, amounting to 3.8% of Nigeria’s GDP in 2022, and it has severe and adverse implications for pro-poor growth and development.

These dismal statistics notwithstanding, over the last two decades, there have been various legal, policy, and institutional measures at the federal and state levels designed to tackle the cancer of corruption—which continues to persist, despite the raft of anti-corruption initiatives. Many of these current anti-corruption interventions rely on improving the criminal justice system for corruption offenses, transparency of procurement information, and increased reliance on technology. More recently, the government has also introduced e-Government Procurement to improve transparency and further reduce human interface as a means of eliminating corruption. However, none of these measures consider how to effectively break the corrupt private sector networks participating in public procurement, and neither do they incorporate behavioral tools to enhance ethical decisionmaking in the procurement context.

The implication of this oversight is that legal, policy, and institutional reforms maintain the (corrupt) structural nature of the procurement process, while demanding changes in public officials’ behavior without providing the means to foster these changes. As a result of this lacuna, many of the anti-corruption reforms in Nigeria’s procurement system have yielded extremely limited results.

4 ways to address corruption in Nigeria’s procurement processes

In 2022, the Africa Growth Initiative (AGI) at Brookings formed a consortium with Stellenbosch University and the Centre for the Study of the Economies in Africa (CSEA) to consider new measures to address the pervasive problem of corruption in Nigeria’s procurement processes. The project, “Public Procurement and Good Governance in Nigeria,” covers four areas that can mitigate corruption in the procurement process.

1. Behavioral insights to design more effective anti-corruption tools

First, the project seeks to examine how “behavioral insights” have been used in Africa and other developing countries and what opportunities they present for improving procurement decisionmaking, addressing corruption, and instilling integrity in public procurement.

According to the Organization for Economic Co-operation and Development (OECD), behavioral insights involves using knowledge from psychology, economics, and other behavioral sciences to understand how people make decisions and behave in various contexts. Driven by experimentation and piloting, the approach aims to identify the cognitive biases, heuristics, and social influences that affect human behavior, so policymakers can develop interventions that “nudge” individuals toward making better choices and consequently achieving more effective and efficient outcomes.

A behavioral insights lens can therefore be useful to explain why some anti-corruption measures succeed and why others fail or even have an adverse impact. Tools based on behavioral insights have been used to motivate behavioral changes in the public and private sector in many countries, and experiments based on behavioral insights have shown some potential in reducing bribery—for instance, during elections in South Africa. Our project is  therefore examining what kinds of behavioral tools are useful in addressing corruption in public procurement to determine how such tools may be designed and deployed in the Nigerian context.

2. Gender-responsive procurement policies to disrupt corrupt networks

Second, we seek to analyze the current state of policies and practices related to gender-responsive procurement in Nigeria. This is defined as the introduction of gender requirements and considerations into public procurement policies and practices, in order to use public procurement as an instrument to advance gender equality. Gender-responsive procurement has two strands. The first is determining the extent to which the delivery of publicly procured services affects women, and the second is determining the extent to which public contracts are used to support women-owned businesses or businesses that otherwise advance gender equality through their practices and policies.

Empirical evidence suggests that increasing women’s participation in public sector procurement can disrupt the corrupt networks that manipulate procurement processes, thus improving systemic integrity and making procurement fairer. More equitable procurement can also advance goals related to women’s economic empowerment, good governance, and economic recovery from the COVID-19 pandemic. The Nigerian government has specified its intention to award 30% of public contracts to women-owned (or women-led) businesses by 2026, but much work remains to be done to address the barriers and obstacles to gender-responsive procurement. We will focus on the second strand of gender-responsive procurement and examine the measures toward the prioritization of women-owned businesses in public procurement and barriers to this prioritization.

3. Analysis of open procurement data to promote transparency

The third area being covered by the project is an analysis of the open procurement data in Nigeria to understand what further levers need to be pulled to increase openness and transparency of procurement data. Some progress has been made (especially since the COVID-19 pandemic) on the publication of procurement data, and there is ongoing activity to publish beneficial ownership information in various contexts. These reforms are welcome and have been further consolidated with the gradual introduction of e-procurement by the federal and state governments. It is important, however, to take stock of these different reforms to provide nonstate actors with data and evidence to push for more accountability and value for money in procurement. To the best of our knowledge, there has not been a comprehensive evaluation or assessment on the current state of data openness. This is important to assess the successes, gaps, areas of duplication, and any other shortcomings. Moreover, by conducting such an assessment and cataloging exercise, the project aims to provide a better understanding of the current state of access to and transparency of procurement data in Nigeria. This component also involves a review of open contracting portals at the federal and state levels, as well as interviews with relevant officials in the procurement regulatory system.

4. Documenting procurement skills gaps to inform professional development programs

The final area of research focuses on collating evidence on the procurement skills shortage through a skills gap analysis of key stakeholders at the subnational level. To start off, this component will focus on Ekiti and Kaduna states, which are currently undertaking procurement reforms and have the policy space needed for change. Procurement management in a high-corruption environment like Nigeria requires technical and technological skills to manage the process. Thus far, reform efforts have addressed skill development through donor-supported development of new programs and curriculum around Sustainable Procurement, Environmental and Social Standards Enhancement (SPESSE). In addition, the Bureau of Public Procurement established the Public Procurement Research Centre (PPRC) with a mandate to provide the public procurement community with quality research and continued professional development. The extent to which these skill development programs and interventions meet local demand is still unknown, especially at the subnational level. To address this, we interview various stakeholders such as practitioners (at federal, state, and local government agencies), vendors, regulators, and donors to identify the skills gaps and understand what kinds of capacity development interventions are required.

Key outcomes of the project will be the publication of the research findings to inform future policy and practice, and the creation of new training materials for public officials on using behavioral tools, integrating women-owned business into public sector supply chains, and using procurement data as an accountability tool. These materials will be used to build the capacity of professionals in procurement roles, and procurement entities at the federal and subnational levels. As such, the project promises to elevate the role of transparent and accountable procurement—and offer new and innovative solutions to reforming procurement practices—both in Nigeria and across the African continent.