International Procurement And The Nigerian Economy Commerce Essay

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Background of the study International procurement is considered to be a very big challenge. Buying internationally is much more complex than buying domestically. Buying internationally involves having to expand your knowledge of many aspects of procurement that you don't have to worry about when buying domestically. Differences in cultures, laws, communications, currencies, and more have to be understood to support international procurement and if you don't have a good foundation, your international procurement efforts will have a higher probability of failing.

The Nigerian Security Printing and Minting Plc (NSPM Plc) apart from being the foremost in

Africa, is the only full-fledged security printing organisation in the whole African sub-


It was established in 1963 but since 1965 it has been producing currency notes and coins for

the Central Bank of Nigeria (70% produced in Nigeria and 30% in England and Germany by

the De La Rue of the UK, the world's largest commercial security printer and papermaker,

involved in the production of over 150 currencies of different nationals. De La Rue, 

shareholder and technical partner managers of the mint until the 90s previously owned closed

to 40% stake in the mint and the Giesecke & Devrient of Germany , [printers of the recently

launched polymer notes] Royal Spanish Mint, FNMT of Spain, and Securrency of Australia.

respectively) as well as a wide range of security documents for the Federal, State and local

governments, commercial banks, blue chip companies amongst others.

The Central Bank of Nigeria relies solely on NSPM Plc for the production of its banknotes

and coins as well as the government also security documents as bank drafts, treasury bills,

diplomatic documents, cheques, examination papers and certificates, tax receipts, custom and

immigration documents, motor vehicle documents, passports and id cards and so many other


The NSPM promotes open competition through its international procurement process with

full operational capabilities that can be compared favourably with any international security

printing establishment of high repute due to huge investment in high technology equipment,

technical training and calibre of human resources, research and development.

I have chosen to do my research on this topic because i have a keen interest in international

business and also what it entails in buying and selling internationally and more importantly

what procurement and international procurement in general entails. I intend to look at and

analyze the structure of NSPM Plc in terms of their procurement system and processes, know

what types of materials they procure, what are the products and how they are used and also

find out how NSPM Plc communicates with their suppliers through effective communication.

Preliminary Review of the Literature

International procurement as a business function was born thousands of years ago. It is an ancient practice that goes back to the very beginning of record history. Almost as old as the way the Romans painted walls to announce forth-coming gladiatorial contest and also the Phoenician's painted murals on prominent wells along trade routes entailing the wares they sold. Also the sales of slaves, cattle etc.

As the world industrial output grows, this gave manufacturers the ability to produce mass goods with uniform quality. For this mass produced products to be consumed, it will require large numbers of consumers, therefore manufacturers could no longer be contented in their local areas and realized the tremendous value of import and export as in aid in selling their products to a wider markets rather than the locality in which they operate.

Johnson, Scholes and Whittington, (2008) said procurement is the process that occur in many parts of the organisation for acquiring the various resource inputs to the primary activities.

Each organisation has its own primary activities explained in the value chain of that organisation which are the activities that are mainly and specifically concerned with and in charge of the creation, distribution and delivery of its products.

Francois, C (2003-2010) stated that in a global economy, international procurement is a term used to describe the process of allowing firms around the world to bid on contracts for goods and services. The concept has gained popularity as shipping and transportation costs have decreased due to an influx of cheap, readily available fuel. The globalisation of large corporations has allowed them to reap the benefits of lower labour and materials costs while still selling the same quality and quantity of products. There are three primary benefits to international procurement: lower costs, stimulation of a global economy, and increased consumer base. The lower costs that can be achieved through purchasing services or goods from other counties are derived from currency valuation and the effects of product specialization. Both of which are core concepts in economics.

Business Dictionary (2010) defined procurement as a strategy in which a business seeks to find the most cost efficient location for manufacturing a product even if the location is in a foreign country. Companies and organisations always tend to spread their wings and diversify lot to make research and surveys as to the best location to procure their goods and products from. International procurement helps a great deal because most companies do not always get what they need at their finger tips, they have to source it elsewhere i.e from a foreign place.

Baily, P.,D. Jones, et al. (2008) cited that International procurement is the purchasing from another country of the products and/or services required for the organisation. In other words it is importing. Importing is the commercial activity of buying and bringing in commodities, goods and services from a foreign country. Any good that is brought into a country is termed and seen as a foreign and imported good because it has been brought in internationally and it can also be seen as an international procurement.

Spray, G (2009) stated that the most crucial decision confronting procurement strategists is procurement outsourcing-transferring to a third party many of the activities that relate to sourcing, category management, requisition to pay, and supplier relationship management.

IPO-International Procurement Organisation also defined procurement as

The NSPM Plc. has taken international procurement into great consideration and holds it with high esteem because most and bulk of the work of the company is from that part and its the main component of the NSPM Plc. which has caused the company so much envy amongst others because of its surety, unity and wholeness, and its production of quality products and good customer satisfaction and delivery. Most of all, the NSPM Plc. has been tagged as virtually the only organisation with high degree of surety impression in Africa.

NSPM Plc. official website (2010) stated that the Federal Government of Nigeria owns majority share of the company as reflected in the ownership share of the company, the Central bank of Nigeria owns 77%, the Bureau of Public Enterprise Nigeria owns 20.06%, while the De La Rue of England owns 2.94%.

Cole, A (2007) defined procurement as the purchase of merchandise or services at the optimum possible total cost in the correct amount and quantity.

In procurement, goods and services are normally bought when their prices are relatively low and it is always better to buy them in greater quantity. Almost every organisation engage in procurement either for gains or profits, this differs in organisation because every company has its own procurement systems and procedures.

Research Questions and Objectives

The basic objective of any manufacturing company like NSPM PLC is to marry customer satisfaction and profit maximization for the shareholders. To achieve such an objective, there are a number of factors to be considered. NSPM PLC being a security outfit requires special skills due to their value and strict confidentiality, concerned with two core products lines, which are; i.e Banknotes and coins, ii. Security documents.

It is in line with this the research intends to look at the relationship that exists between international procurements and the Nigerian economic growth, the risk and challenges.

Research Questions

Should organisations engage in International Procurement?

Do their staffs benefit from International Procurement?

What are the type of materials procured?

Where are when can they be obtained?

How are they used?

Research Objectives

To assess the role of International Procurement in the development of the Nigerian economy.

To consider the effects of International Procurement if any on the sales volume of NSPM Plc.

To critically analyse the organizational structure of NSPM Plc. Nigeria.

To evaluate ways in which NSPM Plc can re-design their International Procurement process to enhance quality of their products and promotional activities

To make recommendations on the improvement in the practice of International

Procurement in NSPM Plc. Nigeria.

5 . Research Plan

Research perspective:

Research perspective in literal is the appearance and way of regarding things relative to one another as determined and analysed by the viewer. Most of the data and information collected will be based on qualitative research approach. Based on the nature of this research, the qualitative appraisal will help in drawing the cracks and openings experienced by the organisation in carrying out its activities.

Research design:

Research design is a properly planned way or method of carrying out a piece of research literally, it provides a definite direction focus or scheme to any work or an anticipated outcome that is intended to guide your planned actions. Research is an investigation carried out so as to discover additional information about a specific problem or desired goal. According to (Miller and Salkind, 2002), 'guides are presented that include the first steps in the sequence of a planned research proposal'. International procurement is a broad activity and strategy used by many organisations to help them run their activities successfully, systematically effective and efficiently. Based on all these, i intend using three methods of data collection so as to get an exact or almost exactly facts of my research findings.

Data Collection Methods:

For the purpose of this research work, both the secondary and primary methods of data collection and analysis will be used to get all the necessary and required information and data.

Secondary Data: based on my research, i plan to get my data from journals and articles of the organisation, a few magazines though the organisation does not issue in-house journals because of its sensitivity and security, a number of textbooks and the internet, the organisations internal records and diaries, the Central Bank of Nigeria library, Bureau of Public Enterprise Privatisation Records - Nigeria, the Federal Ministry of Finance (Nigeria) internal records and also the De La Rue of England Publications. All these data have to be carefully collected and analysed so as to help me deliver and tackle my research questions and objectives appropriately.

Primary Data:

Interviews: I intend to interview a number of staffs at the NSPM Plc., and the top management staffs, heads of departments who are incharge of the procurement processes. I will use about 20-30 minutes in conducting the interview and try as much as possible to ask them questions that will favourably answer my research questions and also address and achieve my research objectives. Though there are various methods of sampling procedure which include the random sampling, stratified sampling, cluster sampling, quota sampling and systematic sampling but i will use the simple random sampling so as to get the required information readily available from a number of representatives and respondents selected. Random sampling is a method of sample selection in which each possible sample combination has an equal probability of occurrence and each item in the population has an equal chance of being included in the sample.

Questionnaires: I would make a number of questionnaires about 500 copies which will be drafted by my supervisor and i to be answered by the staffs of the organisation to find out how the International procurement benefits them and also their views about other activities of the organisation and expect a turn over of about 50 -60 which will help me in achieving an accurate solution to meet my research objectives.

Analysis of Data:

Saunders, Lewis and Thornhill, (2007) stated that virtually any business and management research you undertake is likely to involve some numerical data or contain data that could usefully be quantified to help you answer your research questions and meet your objectives.

Data are collection of facts from conclusions are drawn. They are round and meaningless facts which become information when they are processed.

Jewell, S (2007) also stated that a data display is a summary of data in a diagrammatic form that allows the user to draw valid conclusions.

My analysis of data and findings will be qualitative because i will make use of the qualitative method of data analysis by (Jewell, S 2010) and i will seek permission from the people i am interviewing to make a record of the interview so that analysis and conclusions may be drawn afterwards. The simple random sampling procedure in the questionnaire will be further used on former staffs of the organisation to get additional data and information that will help in getting an accurate analysis.

I will also use the PEST framework, as well as the SWOT analysis. Porter's five forces framework and the BCG matrix.

The limitations i am likely to face will be getting across to interview most of the top and senior staffs and also getting the required data and information because of the sensitivity and security of the NSPM Plc., but to reduce the effect of this limitation i will try my possible

best to make prior appointments in time and also provide them with all necessary documents they need from me before releasing the data to me such as means of identification to prove to them i am a student of Coventry University undertaking my research in their organisation.

Ethical considerations

I will make sure i follow and abide by the Coventry University's BES ethical guidelines and also make sure that i keep all the data and information collected and gathered from the organisation i am doing my research securely and also abide by their code of data preservation act.

The interviews and questionnaire questions will be first approved by my supervisor before it is put in effect and pursued to a conclusion and successful issue.

I have clearly read and understood what plagiarism is and its implication and i will strictly abide by it and make sure i acknowledge every work i get and use from others. Also the use of the CU Harvard referencing style will be used to acknowledge every other external source gotten and used in carrying out the research.


Every successful and well organised research work has to be carried out with an effective and efficient planning, on this note, i will use a Gantt chart to help me make efficient, effective and wise use of the time frame to ensure that this research is concluded at the set and particular time and to plan my work accordingly and systematically. Also i will make sure i make all the necessary contacts with the organisation i am doing my research on time so as to be able to get all the data and information i need because it is a totally surety organisation so i have to do everything on time so as to get all what i require from them accurately.