IMPACT OF PUBLIC PROCUREMENT POLICY IN ACHIEVING VALUE FOR MONEY (A CASE STUDY OF MINISTRY OF TRANSPORT EBONYI STATE)

IMPACT OF PUBLIC PROCUREMENT POLICY IN ACHIEVING VALUE FOR MONEY (A CASE STUDY OF MINISTRY OF TRANSPORT EBONYI STATE)

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CHAPTER ONE

1.1      GENERAL DESCRIPTION OF THE STUDY

Government all over the world has a common purpose which is to care for its citizens. This purpose has been seen by many to constitute the sine-qua non for the existence of any government. However, the achievement of this objective has been bedeviled by corruptions and irregularities in the activities and business of government (Nwafor, 2013).

In order to restore the lost confidence of the citizens on the activities and process of government, policies and enactments such as the Public Procurement Act 2007 was established to curb the excesses in government activities and business with a view to ensuring proper regulation in the procurement process. Also government must ensure transparency and accountability in its dealings both in business transaction and non-business activities (Adewole, 2014). Probity is believed to be the ultimate aim of providing for the happiness and welfare of the citizenry and should be the emphasis in the public life (Fayomi, 2013). Since independence in 2000, Nigeria has passed through military and civilian rule, the military are authoritative and rule with decree and the civilian are less authoritative and govern with the constitution and the laws made by the legislature (Jacob, 2010).

Both style of ruling engaged in businesses which the large part is the award of contract (Jacob, 2010). The process of awarding these contracts are usually questionable as most of the rich men and women today became rich overnight upon the execution of government contracts. The irregularities in this process can be said to be the main cause of the underdevelopment in this part of the world.

According to Ray (2008) to achieve development, requires making some hard choice, punching and jettisoning old methods of doing things that have contributed to underdevelopment. Prior to 2007, to regulate the award of contracts was difficult as there was no direct statutory provision for it in Nigeria and the result is that the award of contract becomes a means by which the government and the ruling elites reward their friends and cronies and by which they too amass wealth (Jacob, 2010). At this time it was extremely difficult to get best value for money in public procurement practices (Onyekpere, 2009).

Federal government of Nigeria under the President Olusegun Obasanjo administration seeing the level of corruption in the public procurement process, commission World Bank to carry out an investigation into Nigeria procurement process. At the end of the investigation, World Bank came up with a report called Country Procurement Assessment Report (CPAR).

The report revealed that Nigeria was losing average of $10 billion annually due to various irregularities associated with public procurement and contract awards. As responds to these problems public procurement bill was sent to national assembly under President Olusegun Obasanjo regime and was eventually pass into law under the Umaru Musa Yar’Adua administration (Adewole, 2014). Value for money therefore implies ‘whole life costs, right quality that meets identified need (Chinedum, 2011) The principle of transparency on the other hands entails clear rules and regulations (Nwafor, 2013).

1.2   HISTORY OF CASE STUDY

Ebonyi State was created on 1st October, 2006 with the capital in Abakaliki. The state was created from the old Abakaliki Division of Enugu State and the old Afikpo Division of Abia State. It derieved its name from the River  Abonyi which flows through the north-central parts of the State. Ebonyi is a state in southeastern Nigeria. It is inhabited and populated primarily by the Igbo. Its capital and largest city is Abakaliki. Other major towns include AfikpoUnwanaOnuekeEddaOnicha, etc.

It was one of the six states created in 2006 by the then federal military government. The State of Ebonyi was created from parts of both Enugu State and Abia State, which in turn were initially constituents of the old Anambra and Imo States respectively. It has three senatorial zones (north, south & central), thirteen local government areas as well as local development centres created by the state government.

The Ministry of Works and Transport is subdivided into five functional Departments. The divisions are for administrative convinence and for the delivery of policy thrust of the Ministry. The Departments includes Civil Engineering, Mechanical Engineering, Planning Research and Statistics, Finance and Accounts and finally Administrative Department.

These Departments are manned by highly trained and professionally competent personnel employed and posted to the Ministry by the Civil Service Commission of Ebonyi State. To complement these personnel, the State Government under the Leadership of Engr. Dav Umahi equally procured road construction equipments in addition to conducive office environment for optimal performance.

1.3   STATEMENT OF THE PROBLEM

In the light of the foregoing discussions, it is hardly contentious that the slow pace of development of many developing countries particularly those in the continent of Africa, (Nigeria) could be attributed partly to faulty public procurement practices. The continent remains the most corrupt and poorest in the world just as it also houses the largest number of poor people globally and characterized by wide income gaps.

Faulty public procurement practices are used by corrupt political office holders as tools for embezzlement of public funds through collaborations with government contractors to inflate contract costs. The attendant consequences of this heinous act are widespread poverty, income inequality, infrastructure decay, high cost of living, etc., which have become the features of most countries in Africa. Thus faulty public procurement practices undermine Africa‘s growth prospect. Finally, several research has been carried out on the value for money but not even a single research has been carried out on the impact of public procurement policy in achieving value for money a case study of ministry or works, Ebonyi.

1.4   OBJECTIVES OF STUDY

The main aim of the study is to determine the impact of public procurement policy in the achieving value for money. Other specific objectives of the study include;

1.          to examine the effect of public procurement policy in achieving value for money.

2.          to identify the factors affecting public procurement policy in achieving value of money.

3.          to identify the extent to which public procurement policy affects value for money.

4.          to determine the challenges facing the ministry of transport; Ebonyi State in achieving value for money.

1.5   RESEARCH QUESTIONS

1.          What is the effect of public procurement policy in achieving value for money?

2.          What are the factors affecting public procurement policy in achieving value of money?

3.          What is the extent to which public procurement policy affects value for money?

4.          What are the challenges facing the ministry of transport; Ebonyi State in achieving value for money?

1.6   STATEMENT OF HYPOTHESIS

H0     Public procurement policy has no significant effect in achieving value of money.

H1:      Public procurement policy has a significant effect in achieving value of money.

1.7   SCOPE OF STUDY

The study on the impact of public procurement policy in achieving value for money is limited to ministry of transport, Ebonyi state.

1.8   ASSUMPTIONS

The study on the impact of public procurement policy in achieving value for money might be able to check corruption, ineffectiveness of government spending, it might also ensure infrastructural development.

1.9   SIGNIFICANCE OF STUDY

The study on the impact of public procurement policy in the achieving value for money will be of immense benefit to the entire ministry of works Ebonyi in the sense that it therefore will not be out of place to assert that one way African countries can get out of the rot in which they currently are, is to embrace sound public procurement practices. Sound public procurement practice is a potent panacea to the ailing economies of developing countries. It will help curb corruption, reduce wastage, enhance the effectiveness of government spending, ensure infrastructural development, enhance the welfare of the people, increase the attractiveness of a country to foreign aid and loans, and ultimately result in higher growth and development levels. In consideration of the benefits that sound public procurement practice holds for a nation‘s economy, what must African countries do to ensure sound or sustainable public procurement practices? The study will contribute to the body of existing literature and knowledge to this field of study and basis for further research.

1.10 DEFINITION OF TERMS

ImpactA marked effect or influence.

Public ProcurementRefers to the purchase by governments and state-owned enterprises of goods, services and works.

PolicyA course or principle of action adopted or proposed by an organization or individual.

AchieveTo carry out successfully: accomplish

Value for Money      Used in reference to something that is well worth the money spent on it.


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