Water, sanitation and hygiene facilities are essential for health and welfare. Providing them is one of the core duties of the state.
In Nigeria, funding for these projects comes from the government’s budget and from development partners. UNICEF, the UK’s Foreign Commonwealth and Development Office, the European Union, and the US Agency for International Development all provide aid.
A UNICEF report shows that between 2014 and 2017, international development partners and the government invested a total of US$188.3 million in sanitation projects in Nigeria.
But the report shows that Nigeria is still one of the top three countries globally in terms of the number of people living without safe water and sanitation. It adds that only 68% of the Nigerian population have access to a basic water supply, 19% use safely managed sanitation facilities and 24% practise open defecation.
Unsafe water and poor sanitation and hygiene are some of the major causes of Nigeria’s high rates of mortality and morbidity among children under five. They increase vulnerability to water-related diseases such as cholera, typhoid and diarrhoea.
There have been public procurement reforms that seek to regulate abuse of rules, processes and standards in the awarding and delivery of public-sector contracts. But despite the reforms, eliminating the massive deficits in the water and sanitation sector through competitive, transparent, accountable and cost-effective procurement processes has become increasingly difficult.
In a recent paper we analysed data from selected local government areas where there were UNICEF-funded sanitation projects. Based on this, we argue that procurement regulation has been subverted to make money in the service delivery sector.
Our findings provide an explanation of the deplorable state of sanitation facilities in Nigeria. The problem is not just a lack of funding or capacity, as has been argued before, but a legal choice.
Procurement in Nigeria
Nigeria enacted a procurement law in 2007. The Public Procurement Act 2007 brought a sense of regulation to the procurement process in the country. Before this, there was no law either at the state or federal level guiding public procurement. It was intended to check abuse in the awarding and delivery of public-sector contracts.
Section 24 (3) of the Public Procurement Act sets out that contracts must be awarded to the bidder with the lowest bid that meets the contract’s terms and conditions.
Our study focused on how this practice undermined the delivery of sanitation projects in Nigeria.
We drew on field data from sanitation projects in states across the country: Akwa Ibom, Anambra, Bauchi, Bayelsa, Benue, Jigawa, Katsina, Rivers and Yobe. The procuring entities were ministries, extra-ministerial offices, government agencies, parastatal organisations and corporations. They awarded UNICEF-funded projects to the lowest responsive bidders (contractors) between 2013 and 2019. The projects were meant to provide water and sanitation facilities.
We observed that four firms were accused of committing a procurement offence. They subcontracted their commitments to other firms at prices lower than the sums in the contract.
We saw that influential individuals under-quoted contract sums, apparently to keep a hold on procurement processes. They then won contracts and diverted contract sums or subcontracted to third parties who either failed to do the work or delivered substandard work. The poor standard could be seen from the reports of the procuring entities.
Contrary to the expectation that the procurement legislation would promote broader participation in contract management, this study found that accepting the lowest bid limited the involvement of credible, trusted and tested firms known for the delivery of quality work, goods and services. Quality work would necessarily cost more than the lowest bid.
The procurement law could have provided, instead, for bidding that emphasised quality, experience and reputation. It appears lawmakers made sure that the law left loopholes.
Reputable firms are seemingly incapable of getting contracts because they lack access to powerful state actors. Highly placed individuals use the bidding mechanism to engage in sharp practices.
The result is low quality service delivery.
How Nigeria got here
For decades, poor sanitation and hygiene facilities in Nigeria were connected to weak project execution, paucity of funds and limited government capacity. Corruption, overvaluation of projects and favouritism in contract awards added to the problems. Attempts to prevent these challenges provided the basis for public procurement reforms.
The reforms were supposed to improve accountability on the part of government and others in public procurement. Fairness, value for money and cost effectiveness were also expected.
But the lowest evaluated bid system is more susceptible to manipulation than a qualifications-based bidding mechanism.
The reforms have not had the desired impact in the water and sanitation sector.
Appropriate reform
An appropriate reform of the service delivery sector should enhance participation in procurement processes by civil society organisations, the media, beneficiary communities and relevant professional bodies.
Contract sums must also be in line with market realities. Tested and trusted contractors must be engaged to manage procurement of works and services.