CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
It is a paradox that Nigeria is a rich country inhabited by the poor. Her poverty profile in statistical figures according to a recent study indicates that Nigeria is poverty endemic. Poverty incidence increased between 1980 and 1985 and between 1992 and 1996. The trend also shows that there has been appreciable decrease in poverty rates between 1985 and 1992 and 1996 and 2004. In 2004, growth in population almost equals growth in poverty since 1980.
Poverty has predominated in the rural area than in the urban area by 63.3% and 43.2% respectively. The trends in poverty levels by zones show that in the northern part of the country, the North-East zone has a higher incidence of poverty followed by North-West and North-Central.
Out of over 160 million population at 3.2% population growth rate, 5.3% unemployment rate, real GDP growth rate of 5.7%, oil sector growth rate of 4.31%, non-oil sector growth rate of 8.93%, inflation rate of 8.50%, about half of the total population (68.7million) live below poverty line (Ladan, 2002).
Corruption in the management of public procurement and finance is a veritable area for corrupt practices. Every state must at various times procure goods and services. This calls for request for contract practices, is that public officials disclose to those with interest in the bid, the position of things, this unfairness leads to a situation in which honest bidders are outmaneuvered by smart allies. The bidding process favors those who lest disposed to perform and the end-product suffers from mediocre handling. Very often, the favored bidders later ask for contract price adjustment upwards. The eventual consequence is that the buildings cost more and are often poorly executed.
Transparency and objective criteria should guide government procurements, contract awards and other financial management of public finance.
All information about a tender or contract must be widely disseminate for all those who have an interest to prepare their tenders, consults with their tenders, consults with their financiers, architects, structural engineers and other consultants in order to enable them make informed bids. Time, being of essence, must be adequate. Many prospective bidders have been cut by shortage of the time allowed for preparations and have been stampeded into hasty evaluations leading to their inability to perform the contracts or evaluations leading to their inability to perform the contracts or poor performance or even abandonment of work on site. This is very common in developing states. The terrain is littered with uncompleted projects resulting from the initial rush to bid. This is full disclosure of all material facts in order to facilitate the contracts award process, which would eliminate insider informants, insider trading and other malignant practices.
1.2 STATEMENT OF THE PROBLEM
Corruption in public procurement of goods and services and management of government contracts have marred every efforts put by the federal government in establishing the procurement act 2007. This problem of corruption starts right from the invitation for contractors to summit tenders for government contracts (Eziokwu , 2008).
Legal assessment (through the ministerial tender board units) of contracts which is a mandatory process every contractor biding for a government contract must pass through is not as effective as it ought to be. Despite the legal assessment on contractors and contracts, we still have cases of abandoned projects, elephant projects and poorly delivered projects. All these problems indicate a loophole hole in our legal systems and high rate of nepotism and favoritism in our procurement systems.