Role Of Purchasing And Economic Development

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In the recent part, emphasis was only on the balance sheet report without cognizance of other factors that made up the inflow and outflow of resources that sustain the body mechanism of a given firm. With recent emphasis on cost control in the face of the rising cost of input resources and subsequent spill over of high cost of output. It is very essential to discuss the roles and functions s of purchasing and supply management towards the profitability of an local government . After the civil war, the attendant boom in production resulting from the growth of private sector enterprises from Europe and America, began to awaken other management inputs for eventual profit. The reason is based on the sophisticated resources put in by these multinationals into the mechanism of our business sector. One of these resources I purchasing and supply management.
It is imperative to note that the concept of purchasing has been broadened since the turn of the century, to include all those business activities relevant to the securing of materials suppliers and equipment as well as services needed by business and industries. Furthermore, the evolution of right materials has bought purchasing principle and management and its effect on shortages high price of commodities and the allied improvisations have cause the problems of the materials and service to intrude into broad rooms of many local government s large or small public or private and even government agencies. As at date, the cost of materials and supplies for industrial and non-industrial purposes accounts for a large proportion of the cost of these local government . In most of them, this represents over 65% of their total expenditure (Oyeoku O. K. 1993)
Therefore, purchasing is referred to as the department which is concerned with the process of defining the local government s needs selecting suppliers, agreeing terms placing orders, and receiving goods and function which is oriented to providing complete supply function service for user within the local government (R. E. J. Nwanneka). English Oxford Advanced Learners Dictionary of current English, third edition, simply defined the world “purchasing as just buying”. We will however, take purchasing mission o be selection of materials or services agreement of prices and acquisition items. A well organized purchasing is one of the criteria for a company to minimize cost at the same time increase profit. The functions of purchasing and supply management towards ensuring rapid growth of an local government ’s profitability cannot be over-emphasized. It has been sampled and proved that, a layman in the field of purchasing easily views purchasing function as more obtaining requisitions negotiating and placing order without the knowledge that purchasing goes beyond this areas of activities. The activities of purchasing and supply management have the primary purpose apart from procurement of right quality from the right source at the right price. They distributed these materials or resources to the user department. To do this involves requirement determination, taking procurement decision make or buy decisions bidding, vendor selection, negotiation, re-negotiation, awarding of contracts, contracting order processing, expediting, taking delivery, materials handling, storage and distribution within the local government
For a company to succeed or to achieve its desired objectives, it means that those required to man the materials section of the local government should be highly trained and knowledge in the field of purchasing. And other materials related functions, in order to harness effectives and efficient profitability to their local government . In view of numerous challenges of the profession requires a caliber of persons that can exercise prudence and sound judgment for any naira spent at any given point in time, in order to minimize cost and increase profit.
Sincerely speaking, these cannot be achieved if the buyer is not a professional buyer that should adhere, strictly to the ethics of the purchasing profession and techniques of purchasing practice. Quite unlike untrained buyer, a trained and professional purchasing executive is aware that he is bound by the ethics of the purchasing profession.
Purchasing department is the department, which is concerned with the process of defining the local government needs, selecting supplier, agreeing terms, placing orders and receiving goods and services. It is the only department that provides a complete supply function services for user within the local government . This department is the departmental that saves cost while other functional departments within the local government accumulate cost and this makes it to contribute immensely towards the profitability of an local government . It is from this perceptive that researcher reviewed the functions to profitability.
According to A. M. Uzor (2003) purchasing function is to see that materials and services are provided at the lowest cost, which is compatible with suitable quantity and safety. From his definition, purchasing can be seen as cost conscious department that recognizes the distinction between price and value and aim to secure value of money. Example, purchasing department initiates value of analysis exercise with designers and users to reduce cost by modifying components or substituting materials without detriment to the end producer. Purchasing not only procuring the required quantity at the lowest cost, but also has its aim in making sure that the materials procured are of the right quantity in the right quality from the right source, at the right price using the right time, delivered to the right destination, using the right personnel to maintain right services. Purchasing function exist in an local government primary as a means to an end. Its aim is to provide services to users department by making available as when required. Goods and services to meet local government operations needs in any business, its primary aim is to make profit. Aljian G. W. (1973: p. 13) defined business as straining for profit by adding values. This means that profit occurs when value is added to raw material by turning it into a product. Value is added when a fabricated part is improved or incorporated into a major assemble for final use. Taking “cotton” as an example, it is harvested from farm and end up as a printed cloth. In order words, it has undergone many processes each of which costs something to perform and each of which adds value. The process of adding values starts with acquisition of adding values (Aljian G. W. 1973) from his statement it is clear that purchasing function is a profit center and a focal point for substantial cost saving. A relative small reduction in purchasing cost improves the profit of local government . The place to increase profit is at the beginning of the cycle when procurement starts and not at the end when finished product arrived for consumption. A company that brings well profits well.

1.2 STATEMENT OF THE PROBLEM
It has been noted earlier that purchasing erupted as a result of the harsh swords of capitalism which is a system divided into exploiters and exploited in which the exploiters (the capitalists) owned the means of production.
On the cultural note, capitalism is fed by itself, nurses the bourgeois, creates egotism, greed or philistinism ie (concentration on material acquisitions and ownership of money), self-centered rivalry, theft, fraud, dishonesty, and mendacity.
On a general note, capitalism turns the heart against man, destroys man humanity and promotes man’s inhumanity, hardship, social irresponsibility, poverty and constant unhappiness to the citizens. It also bring inflation, depressions, unemployment and various forms of economic and social insecurity for the greater majority of the populace. Capitalism also makes the less economically powerful citizen to exist as on-lookers, and passive spectators in the political game.
In capitalist society labour discipline is the discipline of hunger and poverty while in slave owning and feudal society labour discipline-discipline of the whip and cane. The above problems typical of the Nigeria society today.
Hence the purchasing came to address these short-coming of the individualistic capitalism. Our local government workers and residents do not feel part of the democracy dividends. Workers are owed arrears of salaries, pensions and gratuity on retirement. Both pensioners and workers from various purchasing save themselves from the ills of capitalism.
The government in defense says resources are not adequate to meet their demand. The citizen spine that it is due to mal-administration. The media carry-news of poverty alleviation programme of the government, while non-governmental organization (NGO) purchasing inclusive put its programme of operation as a challenge to the government of the day.
Therefore, it is a bid to examine the economic development effect of the purchasing in line with the prevalent problems that this work is being carried out with Mbano local area as a study area.

1.3 OBJECTIVES OF THE STUDY.
In 1.2 above, an x-ray of the problems have been made. Bearing in mind some of the issues raised as problem the objective of this study is to examine among other issues the following;
 To examine the adequacy of the resources with the reach of purchasing to achieve economic development.
 To examine the socio-economic effects of purchasing sponsored projects as compared to government sponsored projects.
 To critically study the level of government assistance, threat to purchasing existence.
 To examine the effect of remedial actions already taken by purchasing to ensure their survival and continued economic development as well as recommended measures were necessary.

1.4 RESEARCH QUESTIONS:
Following the objectives of this study, the following research questions have been developed for this study:
 Is the resources available to the disposal of purchasing adequate to encourage economic development in Mbano local government area?
 What is the level of impact by the citizens as a result of projects embarked by purchasing as compared to those sponsored by the government?
 How has the government activities been able to encourage or threaten the existence of purchasing in Mbano local government area?
 Has the remedial actions already taken by the purchasing been able to encourage the growth?

1.5 RESEARCH HYPOTHESES:
From the above questions, the following research hypotheses have been formed for this research work.
 There is no significant difference between the perception of workers on the adequacy of resources to encourage purchasing and economic development.
 There is no significant difference between the views of workers on the level of effect of purchasing sponsored projects and that of the government.
 There is no significant difference between the perception of workers on the level of threats and encouragement by the government in Mbano local government area.
 There is no significant difference between workers perception on the effectiveness of remedial action already taken by the purchasing to ensure economic growth.

1.6 SIGNIFICANCE OF THE STUDY
The significance of this study is that it will portray the available and alternative sources of resources open to purchasing society’s sin Mbano local government area particular and other places in general.
Also, it will bring to light the economic impact of project embarked upon by co operative societies as compared to those sponsored by government.
Besides, it will bring to knowledge how government activities encourage or threaten the existence of purchasing movement in many areas.
Furthermore, it will show the effect of remedial actions already taken by purchasing to encourage growth as well as recommend other possible courses of action.
Finally, both the political class, the governed, stude4nt and the entire citizens are bound to benefit from the finding of this study especially now that unemployment is the other of the day and they can contribute resources to gainfully employ themselves.

1.7 SCOPE LIMITATION
The extent of the work is limited by the effect of the following:
• Time
• Money
• Available books on the topic
• Inability of workers to give information which they considered top secret