How Smart Contracts can Outsmart Nigeria’s Public Procurement Contracts and Service Inadequacies (My opinion)

On several occasions, the Federal government through the Bureau of Public Procurement has awarded numerous contracts for the constructions of roads,bridges,hospitals and public amenities in general. Notably, a report by the abandoned Projects Audit Commission, show that an estimate of 11, 886 federal government projects were abandoned in the past 40 years across the country.

In my opinion, i feel the progress of the Nigerian government under the administration of President Muhammadu Buhari in achieving a “bribery and corruption” free Nigeria has been stunt. For instance, the Infrastructural sector has been clogged by human inefficiencies that conceive nepotism, bribery, corruption undue favoritism. Some Contracts are awarded to contractors without critical merit appraisals. At the end of the day, barely 10 projects out of a 100 projects see a 100% completion state. Unstable governments and fragile policies are also contributory factors to mention but a few. Research has shown that over 60% causes of infrastructural growth impediments and public contracts failures in Nigeria are products of Human inefficiencies. The first step is actually admitting to the fact that these human efficiencies are capable of curbing an entire system of growth. The next step should be seeking ways to reduce human inefficiencies to the barest minimum in order to catalyze growth.

The Dubai government has pioneered a research for the possible implementation of smart government services in the nearest future . To countries that have severe issues with policy implementation and consistency like Nigeria, i personally think Dubai’s decision should be an evolutionary indicator in public governance. It’s more like reminding the Nigerian government that it’s time to evolve technologically in rendering public infrastructural services. Since human inefficiencies have made the implementation of projects for infrastructural development putrid, i think the Nigerian government should try enforcing public service contracts by experimenting with the potentials of smart contracts.

What’s this Smart Contract and how can it improve public procurement services in Nigeria?

In simple logic, let’s say the Bureau for Public Procurement advertises and calls for the bid of a contract to construct a public hospital. Contractors submit their proposals together with other requisitory documents for competitive bidding. The formal procedure often involves a delibration and selection of the most qualified contractor by the Tenders board. The contract is being awarded and percentages are paid out for execution of projects according to stipulations of the public procurement act of 2007 as amended and the contractual terms of agreement.

On the other hand, if the smart contract is adopted, the contractual process would take a different approach. What’s a smart contract? A smart contract is an agreement in digital form that is simply self-executing and self-enforcing. Sergey Grybniak, founder of Opporty.com described smart contracts in his article on business.com as coded agreements that guarantee to deliver outcomes provided all predetermined conditions are met. By translating contracts into sophisticated translated code, this software provides a revolutionary and risk-free way for procurement contracts and services to transact business and regulate relationships digitally between the bureau of public procurement and its contractors.

Now, imagine a contract where both sides will be automatically executed digitally by an automated system without interference of government, the contractors nor a third party; a lawyer for instance, as long as both parties meet the full conditions of the contract. Hence, eliminating common human inefficiencies in form of bias, bribery, corruption, nepotism and their likes.

Consequently, if implemented, government will have a chance to gain the trust of the people on a system that actually works because the smart contract; a product of blockchain technology makes trust, transparency and immutability a reality. Lester Coleman notes that Smart contracts can automate many different kinds of processes and operations, the most obvious being payment and actions conditional on payment. However it is imperative to note that risks of adopting this system should be understood,analysed and managed effectively.

Ultimately, the tide of change would swing in the direction of new, innovative ideas if we eliminate fixed frontiers and embrace the possibility of growth, we could be on our way to changing the unhealthy procurement system in Nigeria.