1.1 Introduction
Corruption in public procurement is widely understood as the misuse of public authority, influence, or resources for personal gain during the process of acquiring goods, services, and works funded by the state. According to the World Bank (2020), it is an unethical distortion of procurement procedures, where transparency, fairness, and competition are deliberately compromised. In developing countries such as Nigeria, public procurement represents a major avenue through which government resources are allocated, making it a critical governance function and a major determinant of national development outcomes (Adewale, 2019). When corruption infiltrates this system, the consequences are extensive, affecting economic stability, public trust, and the quality of infrastructure and social services available to citizens.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the aim and objectives of the study. Others are significance of the study, scope of work, research hypothesis and questions, limitation of the study and definition of terms.
1.2 Background of Study
Public procurement is a fundamental tool through which governments allocate resources, deliver public services, and stimulate national development. In Nigeria, public procurement accounts for a substantial portion of government expenditure, making its integrity central to economic growth and institutional credibility. However, corruption within procurement systems has become a persistent challenge that undermines development outcomes, particularly in strategic sectors such as oil and gas. According to Achebe (2020), corruption in procurement processes disrupts transparency, weakens competition, and encourages the diversion of public resources for personal gain (Achebe, 2020). The Nigerian petroleum industry is at the core of the nation's financial structure, contributing the majority of government revenue. The Nigerian National Petroleum Corporation (NNPC), being the principal operator in this industry, plays a pivotal role in the procurement of equipment, services, and infrastructure needed for oil and gas operations.
Transparency International (2021) reported that the procurement processes within NNPC are frequently associated with inflated contracts, opaque bidding procedures, and political interference. Scholars have continuously examined the link between procurement corruption and national development. Adewale (2019) asserted that corruption in public procurement distorts government spending priorities, leading to project abandonment, poor-quality infrastructure, and inefficiencies in public service delivery. The World Bank (2020) stated that corruption affects development by reducing economic productivity and weakening public institutions responsible for financial management. In the context of NNPC, procurement-related corruption has far-reaching implications because the corporation handles projects of high economic value that directly influence Nigeria's development trajectory.
Governance structures within the petroleum sector have historically been affected by political patronage and inadequate oversight. Olatunji (2018) affirmed that weak monitoring systems and inadequate enforcement of procurement regulations encourage practices such as contract splitting, bribery, and favoritism. These issues are compounded by limited transparency, making it difficult for stakeholders, including civil society and regulatory agencies, to hold procurement actors accountable. As a result, public funds that should be channeled towards national development are redirected into private hands, thereby limiting progress in infrastructure, education, healthcare, and technological advancement.
Several studies contend that addressing corruption within procurement processes is essential for achieving sustainable development in Nigeria. Effective procurement practices promote fiscal discipline, enhance value for money, and support equitable distribution of resources. However, persistent corruption within NNPC's procurement system continues to weaken public confidence in government institutions. This study is set against the backdrop of this research seeks to explore how procurement irregularities impact project delivery, resource management, and public trust.
1.3 Statement of Problems
Investigation revealed that public procurement is expected to serve as a transparent mechanism for acquiring goods and services essential for national development, yet corruption within procurement processes in the Nigerian National Petroleum Corporation (NNPC) is undermining this purpose. The persistence of such issues is creating widespread distrust among citizens who expect accountability from public institutions responsible for managing national assets.
The complexity of Nigeria's petroleum sector is intensifying the challenges associated with procurement transparency. NNPC's central role in national revenue generation is placing its procurement activities at the core of public interest, yet opacity in contract awards is limiting public scrutiny and enabling the diversion of funds meant for development projects. Furthermore, the weak enforcement of procurement regulations is making it difficult to deter corrupt practices. Existing legal frameworks are often bypassed, enforcement agencies struggle with capacity constraints, and internal auditing units face intimidation or are influenced by vested interests. It is against this backdrop that this study seeks to examine the effects of corruption in public procurement on national development, with a focus on NNPC.
1.4 Aim and Objectives of Study
The aim of the study is to investigate the effect of corruption in public procurement on development outcomes in Nigeria, using NNPC as a case study. In achieving this aim, the following specific objectives were laid out as follows:
- To identify the forms of corruption prevalent in NNPC's procurement processes.
- To evaluate the effects of procurement corruption on project completion and development initiatives.
- To assess the effectiveness of existing procurement regulations in preventing corruption.
- To examine the role of political interference and weak institutional oversight in perpetuating procurement corruption.
- To recommend strategies for enhancing transparency and accountability in NNPC's procurement system.
1.5 Research Questions
Based on the objectives, the study will address the following research questions:
- What are the forms of corruption prevalent in NNPC's procurement processes?
- How does corruption in procurement affect project completion and national development?
- How effective are existing procurement regulations in preventing corruption within NNPC?
- What is the role of political interference and weak oversight in sustaining procurement corruption?
- What strategies can be implemented to enhance transparency and accountability in NNPC's procurement system?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
- H0: Corruption in public procurement has no significant effect on development outcomes in NNPC
- H1: Corruption in public procurement has a significant negative effect on development outcomes in NNPC
1.7 Significance of Study
It is believed that at the completion of the study, the research will inform policymakers on practical measures to enhance transparency and accountability. The study will also guide regulatory agencies, internal auditors, and anti-corruption bodies in addressing procurement malpractices.
Additionally, the research will serve as a resource for scholars, students, and researchers interested in governance, procurement, and national development.
Finally, the study will raise awareness among civil society and stakeholders, encouraging advocacy for more robust procurement systems and ethical practices.
1.8 Scope of Study
The scope of this research is focused on the effect of corruption in public procurement on development outcomes in Nigeria, using NNPC as a case study.
1.9 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
1.10 Definition of Terms
Corruption: According to Transparency International (2021), corruption is the abuse of entrusted power for private gain. In this study, it refers specifically to manipulations, bribery, favoritism, and embezzlement within public procurement processes.
Public Procurement: Achebe (2020) defined public procurement as the process by which government institutions acquire goods, services, or works from external suppliers, aiming to achieve value for money, transparency, and accountability.
Development: Development refers to the process of improving economic, social, and infrastructural conditions in a country (Adewale, 2019). In this study, it includes projects and services funded by NNPC that enhance national welfare.
Transparency: The clarity and openness in procurement procedures that allow stakeholders to scrutinize decision-making and contract awards (World Bank, 2020).
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