CAMBRIDGE UNIVERSITY NIGERIA SOCIETY 2008 CULTURAL EVENT

1. CAMBRIDGE UNIVERSITY NIGERIA SOCIETY2008 CULTURAL EVENT Sope Williams University of Nottingham

2. DEFINING CORRUPTION • The difficulties of defining corruption • World Bank defines corruption as “the abuse of public office for private gain.” • Corruption involving the public sector is a large problem to governments- the US government estimates that $1 trillion is spent as bribes worldwide.

3. What is public procurement? • Public procurement refers to the purchasing by a government of the goods and services required to function and maximise public welfare. • The goals of a public procurement system are to obtain these goods/services at the best value or “most economically advantageous price”. • Public procurement could also be subject to secondary criteria such as developing domestic industries

4. The relationship between public procurement and corruption • Public procurement seems to be an area where bureaucratic corruption manifests due to the following reasons: • Large sums involved • Non commercial nature of contracting entities, • Relationship between the decision maker and the public body • Unsupervised discretion • Bureaucratic rules • Non-performance related pay • Low pay • Nature of budgets

5. The common types of corrupt activity in public procurement • Public corruption: moving from a supplier to a public official. • Private corruption: this occurs between bidders for a public contract- includes collusion, price-fixing, cartels etc. • Auto-corruption: this occurs when a public official secures for himself, the privileges that rightly belong to the public i.e. conflicts of interest.

6. The effects of procurement corruption • Undermines the legitimacy of governments and increases public spending • Adverse effect on development. • Adverse impact on public welfare. E.g. in Senegal. Consider the allocation of a water distribution contract to the highest briber. What will the briber do to recoup his costs? And at whose expense? • Effect of corruption on investment including FDI- it is seen as a business risk that may not be worth surmounting. E.g. recent privatisation exercises in Nigeria. • The effects of corruption on businesses- increases transaction costs, creates uncertainty, reduces competitiveness and adaptability and affects reputation in other sectors.

7. Disrupts democracy • Responsible for ‘criminal debt’- loans obtained from multilateral development banks like World Bank that were never used as intended, and which African countries must still repay.

8. Solutions? • Commitment…but from whom? • A top down approach is unrealistic at this point, therefore a bottom-up approach may be the only realistic solution. • Legislation- there is ongoing procurement reform in many countries, but this is donor driven…may not be relevant to national needs.

9. Training- African countries do not see public procurement as a specialist field, requiring special training and qualifications. • Individuals need to stop viewing government as a cash cow…that means YOU!