Of White Elephant Projects and Misplacement of Priorities

April 3, 2019 | By Umar Yakubu

…before N35 billion is released for the construction of a new office to accommodate only a few hundreds of pampered, redundant, inefficient and unproductive staff, let us remember that the TraderMoni scheme effectively utilised N15 billion to move over 1.5 million Nigerians out of extreme poverty!

Sometime last week, after the routine Federal Executive Council meeting, one of the items released to the press concerned the approval of N1.4 billion for the design of the new 12 storey complex in Abuja. The proposed design is for one of the spoon-fed government departments, the Department for Petroleum Resources. At the current exchange rate, that translates to about $4 million.

Without any severe inquisition, the highest paid architect in the world is Norman Foster, whose firm, Foster and Partners has won dozens of prizes for breathtaking architectural designs over four decades. Some of his works include the Reichstag building, the seat of the German parliament. He also designed the London Bridge City, which is more than three million square feet of mixed-use space consisting of offices and residences, accommodating up to 20 thousand people.

The firm has designed master plans, bridges, government complexes, cultural centres, university faculties, stadiums, residential buildings and airports. It works are spread across Spain, Italy, China, US, the United Arab Emirate (UAE), Turkey, Singapore, Morocco, Australia, Switzerland, Saudi Arabia and the United Kingdom. The irony is that the government will be paying $4 million for the design of a 12 storey building that will be built on land, and not on the high seas, for a government agency that has been running on a deficit for decades. The highest fee that Norman Foster, the highest paid architect in the world, has received is two million British pounds sterling! As the saying goes, Naija no dey carry last.

But that is not surprising by Nigerian standards. Most of the white elephant projects we see around were executed with similar amounts. It’s the global trend in countries that are battling massive public sector corruption. Public procurement refers to the purchase of goods, services and works by governments. However, these purchases, or contracts, are the primary sources of corruption in Nigeria. Corruption in procurement has bedevilled many economies, and the World Bank estimates that roughly $1.5 trillion in public contract awards are influenced by corruption.

In truth, the items in the capital expenditure schedule already have ‘real’ owners, who will execute the different projects. Hence, all the process of opening bidder selections and evaluations that we see on live television are just Cartoon Network programming.

Because procurement covers a wide range of activities, the elements of fraud and corruption are lined up in the process. Most of the deals are perpetrated during the pre-contract award process. In truth, the items in the capital expenditure schedule already have ‘real’ owners, who will execute the different projects. Hence, all the process of opening bidder selections and evaluations that we see on live television are just Cartoon Network programming. On paper, the process is fully abided to. That is why all the Anti-Corruption and Transparency Units (ACTU) domiciled in every government agency report nothing. Auditors cannot see and would therefore not flag any violation of the process. Law enforcement can only threaten and grumble.

All the necessary laws, regulations and policies in line with international standards are embedded in the Nigerian legal system. Most States have public procurement agencies. The Bureau for Public Procurement recently won a global award for innovation and ensuring openness in government business transactions. Even though not all areas of public expenditure are covered by BPP rules, most go through them for approval; for the conferment of objection or no objection statuses.

Therefore, one wonders why 90 per cent of the corruption cases investigated by law enforcement agencies are related to contracts. The Economic and Financial Crimes Commission (EFCC) recently formed a special Procurement Fraud Unit to handle such matters. Why are more than 80 percent of high profile cases in courts related to public officials? This simply means that all the preventive measures are weak because billions of naira are still being siphoned out of the system despite the fulfilment of all the procurement rules. It’s a complex problem that requires intelligent solutions.

Sadly, corruption in public procurement isn’t just about money being siphoned. In most sectors, it leads to the reduction in the quality of work carried out, which can lead to the loss of lives. It makes officials connive with politicians and technocrats in seeking the best bribe giver, instead of choosing the best price-quality combination. This ranges from construction projects being several times more costly than they should to the acquisition of goods not needed.

More worrisome, public sector corruption has a pervasive impact on the poor because it reduces the funding available for social services, such as healthcare and education, distorting public sector choices in favour of the building of roads and office complexes for purposes of extracting higher returns on kickbacks.

Also, the efforts of public officials to get into the position for obtaining bribes may represent a significant cost. Gifted youth, especially the millennials, often prefer jobs in the public sector, instead of more scientific professions. Usually, the allocation of funds is biased in favour of capital intensive areas at the expense of health and education. That is probably why most State governors are obsessed with road construction and are eager to flaunt the kilometres of roads they have built. Roads have been contracted for more than a billion naira per kilometre in Nigeria. Airport runways of less than 20 kilometres have been ‘resurfaced’ for tens of billions of naira.

The federal government is set to audit all projects starting on April 1, 2019. For a country that borrows almost 100 per cent of the costs to fund its capital expenditures, while spending all its earnings on recurrent expenses, edifices should not be a priority. That audit should include rationalisation aimed at scaling down on similar projects.

Also, before N35 billion is released for the construction of a new office to accommodate only a few hundreds of pampered, redundant, inefficient and unproductive staff, let us remember that the TraderMoni scheme effectively utilised N15 billion to move over 1.5 million Nigerians out of extreme poverty!

Umar Yakubu is with the Centre for Fiscal Transparency and Integrity Watch. Twitter @umaryakubu