Governance quality and public sector procurement of infrastructure projects in developing countries: evidence from Nigeria

Abstract

Purpose In developing countries, governance structures are reputed to be weak, and infrastructure procurement is largely achieved through public sector financing. This study aims to examine the impact of governance quality on public sector infrastructure procurement in Nigeria. Design/methodology/approach Data on public infrastructure expenditure (CAPEX), revenue (REV) and debt burden (DEBT) were sourced from the Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS) for the period 2000–2017. In addition, the Corruption Perception Index (CPI) of Nigeria for the period was obtained from Transparency International. Data were analysed using Ordinary Least Square regression and Granger Causality Test. Findings Results indicate that CPI and DEBT have negative effects on public infrastructure procurement, whereas REV has a significant positive impact. The findings suggest that an increase in public sector corruption leads to increase in the share of public budget allocated to infrastructure procurement. Moreover, an increase in the amount allocated to debt burden lowers the share of public resources available for infrastructure procurement. Findings also show that revenue is a leading indicator of infrastructure procurement, and public expenditure for infrastructure procurement is leading cause of public sector corruption. Social implications In Nigeria, resources for financing infrastructure are scarce, and there have been reports of poor governance in infrastructure procurement. The establishment of a relationship between governance quality and infrastructure procurement will help in more efficient allocation of scarce public resources. Originality/value To resolve the governance-infrastructure question, the study established causal relationships between governance quality variables and public expenditure on infrastructure.

Unravelling the encumbrances in procurement management of Nigeria's infrastructure development: pitfalls and prospects of projects

“…Signor et al (2020) found collusion, bid-rigging, corruption, pricefixing, cartel formation and embezzlement of misappropriated funds, among others, in the Brazilian procurement of infrastructure projects. Regarding corruption as one of the major issues, findings agree with Asuquo et al (2021). The authors found that an increase in public sector corruption leads to a rise in the public budget allocated to infrastructure procurement.…”

“…Organisation for Economic Co-operation and Development (OECD) (2006, p. 12) defined capacity as the "ability of people, organisations/institutions and society as a whole to manage their affairs successfully." Asuquo et al (2021) discovered that corruption perception index and debt negatively impact Nigeria's public infrastructure procurement. It was found that an increase in public sector corruption leads to a rise in the share of the public budget allocated to infrastructure procurement.…”

“…They proposed an overhaul of the policy architecture and stemmed down corruption. Asuquo et al (2021) focused on the impact of governance quality on Nigeria's public sector infrastructure procurement. Previous studies did not reveal whether procurement management has been successful in Nigeria's infrastructure development projects.…”

Avaliação da governança na implementação dos ODS: Levantamento bibliográfico das contribuições teóricas ao tema (2015-2021)

“…Oydele (2012 como citado em Asuquo et al 2021) escreve acerca da importância da boa governança para garantir o fornecimento de forma eficaz e eficiente de infraestrutura, argumentando que a mesma promove a responsabilização, reduz a corrupção e minimiza, simultaneamente, o desperdício de recursos, garantindo que sua alocação ocorra consoante prioridades do desenvolvimento nacional. Nesse sentido, a boa governança torna-se crucial para o desenvolvimento econômico pátrio, já que está relacionada à alocação de recursos pelos indivíduos envolvidos de forma responsável e ética, garantindo a consecução dos objetivos traçados nacionalmente.…”

Critical skills for infrastructure procurement: insights from developing country contexts

“…The literature on the role of infrastructure to output, productivity and welfare abound (e.g. Asuquo et al, 2021). A substantial portion of the empirical studies on the effects of infrastructure has focused on its long-run contribution to the level or growth rate of aggregate income or productivity.…”