Corruption is common in Nigeria’s public procurement sector, with up to one-third of companies expecting to give gifts or payments to secure a government contract (ES 2014). Companies report that irregular payments are very common in public procurement procedures (GCR 2015-2016). The diversion of public funds to well-connected firms and individuals as well as favoritism in decisions of government officials is widespread (GCR 2016-2017). Foreign companies are generally treated on equal terms with domestic companies, but they may in some localities be required by law to partner with a local firm (ICS 2016). Occasionally, foreign financing appear to be essential in the award of government procurement (ICS 2016). Difficulties in obtaining payments for projects has rendered companies reluctant to bid on public contracts (ICS 2016). There has been some improvement in the process of awarding contracts in the natural resources sector, but irregularities including the award of contracts to firms with histories of fraud and bribery and the award of contracts outside the regular bidding process persist (NRGI, Oct. 2016). Nigeria has undertaken various efforts to reform public procurement policies, the most notable of which is the Public Procurement Act, which regulates public procurement and aims to minimize the abuse of rules, processes and standards in the award and execution of public-sector contracts. Companies can find information on legislation, complaints procedures and contracts at the Bureau of Public Procurement. Businesses are recommended to implement special due diligence procedures to assess the risk of encountering corruption in Nigeria’s procurement process.
There is a high risk of corruption in defense sector procurement (GDACI 2015). A panel found that over USD 15 billion was stolen from the state coffers under the guise of fraudulent arms procurement deals during the administration of President Goodluck Jonathan (Reuters, May 2016). The panel launched investigations into 15 retired and serving military officers, as well as 22 companies and aides of suspects (Sahara Reporters, Apr. 2017). A member of the panel, Rear Admiral in the Nigerian Navy Daniel Ikoli, died under suspicious circumstances in April 2017, prompting the other members of the panel to seek special protection (Sahara Reporters, Apr. 2017).
Bala Ngilari, the former governor of the state of Adamawa, was sentenced to five years in jail for failing to adhere to proper procedures for awarding a contract to supply 25 vehicles according to the public procurement laws of the state (Daily Post, Mar. 2017). After serving only a few weeks in prison, he was released due to health concerns, allegedly based on a fraudulent letter (Premium Times, Mar. 2017).