CHAPTER ONE

INTRODUCTION

1.1 Background of Study

Conflict of Interest, according to McDonald et al., (2002), is when an individual, such as a public official, an employee, or a professional, has a private or personal interest, sufficient to appear to influence the objective exercise of his or her official duties. The inference can therefore be drawn that the perpetration of an act of conflict of interest amounts to being corrupt thus making the understanding of corruption to be a perception.

Corruption, according to Szeftel (1998), is a behavior which deviates from the norms, rules and duties, governing the exercise of a privileged role or office, for purposes of private gain. Corruption around the world is believed to be endemic and pervasive, and a significant contributor to the low economic growth, inhibition of the provision of public services and increase in inequality. This has led to international organizations such as the World Bank (2001) to identify corruption as the single greatest obstacle to economic and social development.

In many countries in Africa today, civil servants continue to thwart poverty alleviation efforts by engaging in activities that enrich them but prevent the private sector from creating the wealth that could be used to deal with pervasive poverty. The public policies favored by bureaucracy are not those that enhance or promote economic growth and the creation of wealth but those that allow civil servants to generate extra-legal income and privileges for themselves. As a result, scarce foreign exchange, which ought to be reserved for the purchase of essential inputs for domestic industries, has been spent on the importation of luxury items from western industrial countries, thanks to corrupt civil servants. Shortly after independence, many African civil servants saw corruption as an opportunity for self-enrichment. Today, corruption is still viewed by many of them in the same manner (such as in the Democratic Republic of Congo). The argument that corruption can improve the relationship between the private sector and government regulators and thereby produce more growth-enhancing public policies is not informed by the evidence from the continent. Although there is much evidence to support this conclusion, just one from Cameroon will suffice. In the jargon used by civil servants in Cameroon, the state is generally referred to as the “warehouse” from which they can requisition resources for themselves, their families, and friends. The managers of this warehouse – politicians and civil servants – continue to exhibit an insatiable appetite to defraud the warehouse’s owners, i.e. the Cameroon people. The process works as follows: an office needs reams of paper. Thus, they are ordered. An agreement is made to pay 8 million or 10 million CFAF for paper that should cost 5 million CFAF. How is the 3 million or 5 million CFAF surplus shared? It is shared between the boss (the linchpin), the store’s accountant (the controller) and the businessman (the architect) (quoted in Jua, 1991, page 165; see Agbiboa, 2012). The same practice is observed in many other African countries, such as the Democratic Republic of Congo and Burundi, Nigeria, Kenya, South Africa, Morocco, Tunisia, Algeria, etc. (See Adebayo, 2010)

Conflict of interest is a very popular construct in management literature though its relationship with public procurement has not been widely studied (Juma, 2009). Public Procurement is one of the main functions of public sector organizations accounting for an estimated 9-13% of developing nations’ (Cameroon inclusive) Gross Domestic Products (GDP) (Odhiambo & Kamau, 2003). This is because of its sheer magnitude and used as a tool for achieving economic, social and other objectives. Arrow smith, Lineralli and Wallace (2000) have intimated that maintaining integrity in public procurement is one of the most important pillars of modern national procurement systems. By its very nature, public procurement is inherently a politically sensitive activity in terms of transparency, accountability and value for money outcomes. However, the capability and ability of an organization to properly manage its procurement requirements give the organization a lease of life to succeed and as a matter-of-fact public procurement management is the major contributing force of utilization of all resources. Being a backbone of an organization due to its economic and political implications, public procurement requires an improved efficiency and effectiveness of its management (Mahmood, 2010). Public procurement has drastically changed from being a simple process to a complex contracts and relationships; from largely goods to a complete service solution; from sourcing considerations to strategic business decisions; from low value, low risk to high value, high risk; from back-office function to central and strategic management, from warehousing to just-in-time; and from basic skills to high level skills (Afonso, Schuknecht & Tanzi, 2005). These changes endear handling public procurement from a more strategic approach as hinted by Arrow smith and Trybus (2003) that the last decade of the twentieth century has witnessed a start of global revolution in public procurement management. Thai (2008) asserts that challenges in public procurement go beyond procurement regulations to include procurement process, methods, organizational structure and work force. The public sector is called upon to exercise good organizational performance, which implies that a public sector organization is effective and efficient in supplying goods and services. Murray (2008) decries existing researches on procurement ignores exploration of the uniqueness of public procurement over private procurement.

Public procurement refers to the series of procedures through which different levels of government and public entities purchase goods and services. The type of goods, works, and services that can be obtained through public procurement vary considerably, from a tender to hire a consultancy firm; a process to acquire medicines and surgical equipment for public hospitals; to the construction of a highway. Public procurement can amount to one-third of public spending in OECD countries and an even higher share in developing countries (Bosio et al, 2022). The large amounts of funds involved and the complexity of the processes make public procurement prone to corruption. To prevent corruption in procurement processes and to obtain the best quality/price relation, countries have implemented different legal and administrative procedures to regulate the acquisition of public goods. These regulations define distinct phases of the procurement process, starting with the planning phase in which a governmental entity establishes what needs to be acquired. Corruption in public procurement can happen at any phase of the process (planning, tender, contract award, and implementation) under different modalities. Nevertheless, the objective of all these different schemes is to award the public contract to a favored bidder without detection, even though that company does not offer the best price, quality, or experience to provide the goods and services needed. For example, the process can be closed to competition by carrying out a direct contracting award, or the call for tenders can be written tailored to a given bidder, there can also be the case that the specifications of the tender are shared beforehand with a certain bidder and that the time for proposals is reduced in order that only the favored company can submit a bid.

Public procurement, in one way or the other, can be understood to be a process by which governments and organizations acquire goods, works and services using public funds. It includes planning, inviting offers, awarding contracts and managing contracts. This may also include acquiring consumables, capital equipment, real properties, infrastructure and services under consultancies, professional services, facility management and construction (Code of practice for procurement, 2005). This is important because it has a direct impact on successful delivery of government goods works and services, effective management of public funds by achieving value for money in public services, reducing corruption and encouraging private sector growth and other investment.

Corruption in public procurement, which is a global phenomenon affecting countries at all stages of development, has tremendously negative effects, leading to projects which not only exploit taxpayers’ money or donated funds, but which may also pose a danger to the health and safety of users. Public procurement is particularly susceptible to corruption because of the vast sums of money governments spend on such projects, the relatively high degree of discretion public officials and politicians typically have in such matters in comparison with other areas of public expenditure, and the difficulty in detecting and investigating cases of corruption. Specific examples of corruption in public procurement may be as varied as the procurements and individuals involved. Generally, corruption in public procurement may involve complicated procedures and detailed planning; technical complexities; numerous persons; and at times an international dimension. These characteristics should be duly considered in detecting, preventing and deterring corruption in public procurement. Because of the complexities of corruption in public procurement, comprehensive preventive measures are necessary. Clear regulations and transparent procedures in public procurement, including e-procurement, establishment of procurement boards, education and public awareness of corruption in public procurement are examples of effective preventive measures. Despite these measures, corruption in public procurement still persists.

1.2 Statement of Problem

Corruption and conflict of interest deprive citizens of essential services or provides low quality services. It burdens citizens with inflated costs and heightens inequality. Recurrent instances of unfair procurement processes can lead to public dissatisfaction and low trust in government institutions.

1.3 Research Questions.

• What are the common indicators and forms of conflicts of interest and corruption in public procurement management in Cameroon?
• What factors contribute to conflicts of interest in public procurement in Cameroon?
• What measures can be taken to strengthen public procurement systems and reduce conflicts of interest and corruption in Cameroon?

1.4 Research Objectives

1.4.1 Main Research Objective

• To identify the indicators and forms of conflicts of interest and corruption in public procurement management in Cameroon.

1.4.2 Secondary Objectives

• To analyses the factors contributing to conflicts of interest in public procurement in Cameroon.
• Impact of Conflicts of Interest and Corruption in Public Procurement in Cameroon.